GROW

PETER SWITZER’S ANNUAL GUIDE FOR ENTREPRENEURS

GROWYOUR BUSINESS

INSIDE 04 Chef Luke Mangan’s recipe for success tips to keep you in the black 26 Cash 28 Meet the CEO at the helm of retailer Bing Lee 39 John Symond shares his growth story 51 Strategies to create a brand clients love 62 Helpful hints to boost your sales

inside

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profiles

Features

04 The mains man Eminent restaurateur Luke Mangan’s growing global business 15 The ring master The famous following behind Nic Cerrone’s jewellery 24 Meat me halfway

It’s more than a meat market at Anthony Puharich’s butchery 28 Empire of the son Lionel Lee reveals the business mentality behind Bing Lee 37 When opportunity knocks Murray Goldschmidt’s success in the IT security industry 39 The wizard of Aus Aussie Home Loans founder John Symond shares his story 46 Coming of age

General Pants Group’s Philip Staub’s good business practice 49 I walk the line

Neil Murphy’s plans for growth through national expansion 56 Given to fly It’s a double act for the design duo behind label LIFEwithBIRD 65 The master illusionists The team at Electric Art are making waves in visual effects 68 On the move

Mark Liebach is in the driver’s seat of his growing business 77 Turning up the heat

Branching out proves a smart move for Michael Kitchener

10 Hits and myths How to avoid the four fallacies that can kill growth 13 Lead the charge Learn to build your leadership skills to grow your business 19 Playing to win Practical steps to help you excel in key business areas 26 Money (that’s what I want) Top strategies to keep you in control of cash flow 31 A working force

Hiring right is one of the most important decisions in business 33 Lift your game Prepare for the risks that can impact your business 42 Let’s stick together You need to give your brand a competitive edge to succeed 51 All you need is love The key to customer service is to create a brand they love 59 Site for sore eyes Find out the top strategies to ramp up your online presence 62 The hard sell Discover the tried and tested measures of sales success 70 Up for sale Build up a saleable business asset – your business itself!

75 The growth consortium Setting up an advisory council could be your best decision

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in brief 08 Forecast for growth Discover the stories of four successful entrepreneurs who have created a niche in their field 17 The growth lowdown Find out how to handle the common dilemmas of growth; plus entrepreneur Anne-Marie Syme shares her story 21 The ideas incubator businesses that develop an ingrained culture of innovation are well-placed to generate sustainable growth 22 A dynamic duo The sisters behind Ginger & Smart are doin’ it for themselves 35 Safe from harm Avoid the five risks that can negatively impact your business 36 Intellectual property news Stay in the know on the IP front with the team at Griffith Hack 45 One of a kind Delivering a valuable brand proposition means standing out 54 Stories of success

Belief, tenacity and core values go a long way in business 61 We built this city How to reach more customers by developing your website 73 Geared for growth

The growth strategies behind two different businesses 80 Business builder tools

Group publisher Maureen Jordan, maureen@switzer.com.au Editor Renée Carl, renee.carl@switzer.com.au Senior designer Julia Boonzaier, julia.boonzaier@switzer.com.au Advertising enquiries Martin O’Loughlin, martin.oloughlin@switzer.com.au Published by Switzer Media + Publishing Suite 2, Level 1 36-40 Queen Street, Woollahra NSW 2025 T +612 9327 8622 F +612 9327 4366 www.switzer.com.au All material copyright © 2010 Switzer Communications Pty Ltd Reproduction in whole or part is not permitted without the written permission of the publisher.

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In depth Luke Mangan

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In depth Luke Mangan

The mains man As he endured the hard slog of peeling prawns, potatoes and onions 25 years ago, Luke Mangan could surely not have envisaged the glamorous international restaurant business he runs today, employing 350 staff. With prestigious eateries in Tokyo, Melbourne and Sydney, his food also graces airlines and cruise ships. Mangan is a regular on the speaking circuit and his best-selling cookbooks round out a remarkable success story in a fiercely competitive industry. It has taken lashings of hard work, talent, passion and the mysterious interventions of lady luck.

Words Maureen Jordan Photography Wilk

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In depth Luke Mangan

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s a 15-year-old, accepting an apprenticeship with acclaimed chef Hermann Schneider seemed a no-brainer for Luke Mangan given that he had just been booted out of school. First, he had to convince a sceptical father. Mangan recalls the discussion: “He wasn’t too happy and said, ‘Go do the apprenticeship, but you have to finish (it) … if you leave or quit that apprenticeship, you’re back at school’.”

With his father’s words ringing in his ears and few other options, Mangan slaved through the four-year apprenticeship at the renowned Two Faces restaurant in Melbourne’s South Yarra.

The long hours and lousy pay notwithstanding, he soon realised he loved cooking and, what’s more, he was very good at it.

“I cooked and everything went well, and Hermann said, ‘That was amazing, you did such a great job’. Usually he’s so tough.”

Now regarded as one of Australia’s best chefs, the rave reviews have followed Mangan throughout his career.

First making his name at Salt restaurant in Darlinghurst, Sydney, he now controls or part-owns a portfolio including Salt and the World Wine Bar in Tokyo, The Palace in Melbourne, glass brasserie in Sydney and Salt Grill on the P&O cruise ship, Pacific Jewel. He also creates menus for Virgin America and V Australia airlines. With hundreds of staff, Mangan appreciates he has come a long way from his days at Two Faces.

“Sometimes you feel like a bloody father! See, I love to walk into any restaurant and any of the staff come up and say, ‘Hi can we have a coffee?’ and I think that’s a good thing. I love that part of it that they can do that and that I’m approachable and I think that helps the business.”

Seize the day Mangan’s career is testimony to the importance of seizing opportunities. Early in his career, he turned up unannounced in London and talked his way into a kitchen role at Michel Roux’s famed The Waterside Inn. Later, a chance meeting with restaurateur John Hemmes led to a job managing Hotel CBD in Sydney. That experience convinced Mangan to open his own restaurant.

“It was almost a goal or something in me that said I wanted my own business by 30, just something that I’d always had in the back of my mind.”

The dream became a reality in 1999 when Mangan and hotel developers combined to finance Salt restaurant, a very hip spot in trendy Darlinghurst Road.

“I created Salt and we spent about $1.5 million, which was pretty risky in those days, but the nice thing was we had this big, beautiful push of publicity. (In) our first year we did $5 million.”

Soon after, he opened Bistro Lulu and Moorish, proving Mangan’s desire to keep seeking new challenges. His wonderful

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food has generated a series of business ventures. A group of Japanese diners, impressed with his menu, asked the Australian if he would help them launch a restaurant in Japan. “They asked, ‘Would you like to?’ and I said, ‘Why not’.” Salt Tokyo was established soon after.

Similarly, a six-year deal to run restaurants on P&O cruise ships happened after an executive ate in one of his restaurants.

Perhaps the most fortuitous meeting came when Richard Branson ate in Salt, leading to a sequence of events whereby Mangan wined and dined with the Virgin founder on a Caribbean island before they struck a deal for Mangan to create meals for passengers on Virgin America and V Australia airlines.

“Who gets an opportunity like that?” asks Mangan. “Well, it’s luck.” And good management, no doubt.

Catering for growth Over the years, Mangan’s growing empire has benefited from some clever strategies. He has fostered long-term relationships with key personnel such as accountants, agents and chefs. He has shunned setting up an expensive head office to manage his interests, instead relying on business managers at the coalface to run each entity.

And most importantly of all, he has learnt to appreciate that success does not hinge on him working in his kitchens.

Mangan describes that turning point: “Something snapped and I thought, ‘You know what, I don’t think I want to be doing this the rest of my life’, standing in a kitchen, slicing, dicing, cooking. It took me out of the kitchen.”

Not that he is divorced from the day-to-day operations of his businesses. While each restaurant runs separately, communication and trust underpins his relationship with managers and head chefs. Detailed reports are sent in at the end of each day with all incidents, big or small, reported to Mangan.

“I know if a steak has been sent back because it’s been overcooked because they’re honest with me and they know I’m not going to go crazy. I’m not Gordon Ramsay. With my managers, I say to them if I ever find out something that’s happened in this restaurant that you haven’t told me, that’s when our level of trust is broken down.” give it a go The other key message Mangan conveys to business owners who want to grow sustainably is they must be aware that there will be tough times. In any industry, especially the food business, risk and resilience are ever present.

“You’ve got to have a go. And that’s the message I like to get across to young kids too. I’d like them to know the downs, all about the downs, because the downs help the ups.

You’ve got to have those downs and you also appreciate what you can lose.” G

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In depth Luke Mangan

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In brief Mini profiles

FORECAST FOR GROWTH Words Eleanor Glass

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ony Bannister – renowned UK fashion and design aficionado – knows a thing or eight about growing a business. He has breathed new life into some of Australia’s most iconic fashion brands – Sportsgirl, Witchery, Sportscraft, Herringbone and Saba among them – working across design, merchandising, marketing and strategy.

Bannister now heads up Scout, Australia’s first fashion forecasting agency.

Founded in 1999, the agency’s reports are the closest thing to a crystal ball, ensuring clients are not committing to what sold yesterday, today. Retailers, brands, ad agencies, buyers to designers plus management are among the many businesses employing Scout’s services. And this list grows month-on-month – Bannister holds seminars internationally, giving potential clients an insight into the services the agency can provide.

The industry has taken quite the hit of late, but this hasn’t phased Bannister or his business. “We have actually had growth in this period primarily due to the fact that we are very competitively priced,” he says. His unified service offering has ensured Scout not only survives the tough times, but thrives.

An online presence has also afforded flexibility in their offering.

“We have also just relaunched our website with a new format and a tool which enables potential clients to custommake their reports to suit their needs,” says Bannister. Their online presence – including their daily blogs – has garnered international interest, attracted new agents from the likes of the Netherlands and Japan.

Scout’s competitive edge has ensured their success. “Being competitive means researching what everyone else is doing and coming up with a different or alternative approach,” says Bannister. “In lean and difficult times, a new approach can have positive results. Many of our agents have experienced growth through our service as opposed to a decline in others.”

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In brief Mini profiles

KITCHEN TABLE TYCOONS From a humble stall at Sydney’s Paddington markets to the likes of San Francisco’s MOMA and Chicago’s MCA, sustainable accessories and homewares label Polli has come a long way. The duo behind the brand – Maja Rose and Tess Lloyd – met more than a decade ago at university and have since gained traction with more than 450 stockists in Australia and internationally. Polli hit its growth stride once the pair focused on growing the label full-time. “Believe in yourself and your idea. Polli was a ‘hobby’ for too many years and when we had the confidence to quit our full-time jobs, the business just took off!”

The secret to their growth is not only their drive but their determination to be different – in everything from their product to their business practices. The team even eat a communal lunch, cooked in-house and in turn, using sustainable produce. As the Polli team grows – “We’ve had many ‘Polli babies’ over the past three years” – the business adapts to accommodate its needs. “Team members bring their young ones into the studio.” This strategy saves Polli mums the high cost of childcare. Despite their flexibility, they firmly subscribe to the big business mentality.

“Delegating and engaging professionals saw a huge improvement in what we do.”

booty camp With the tagline ‘the home of push ups and hook ups’, Erica French’s Fit2Date is one boot camp where bootie is unashamedly on the menu. The brainchild of French – one of Australia’s leading health and fitness experts, Fit2Date kicked off in July 2007 and has since become an international phenomenon, proving that cupid and callisthenics are a winning combination. “The emphasis at Fit2Date has always been on the training, but it is really expanding everyone’s social network in such a positive way,” says French.

There have also been three key business lessons learnt when taking her home-grown concept to the international arena – first, systems are key; second, have a strong support network, and third, make sure you’re on top of marketing.

“Create a buzz around your brand,” says French. “Luckily for us, this has just happened for us because of the quirky concept, but it is essential for any brand to do this to get noticed.”

Fit2Date defied the recent economic crisis, and continued to expand. “We are up more than double what we were this time last year.” The business has grown in more ways than one.

“Our first Fit2Date baby, Aurora, was born in October 2009 to a couple who met in the very first Fit2Date group in Sydney in July 2007.” Fresh from one Fit2Date wedding, French says there are another three slated for this year – “so far”.

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Feature Myths about growing a business

Hits and myths To grow your business, you need motivation, drive, commitment and passion. Of equal importance, you need to avoid the four fallacies that can kill growth. Busting these following myths will help your business prosper and evolve.

Words Maureen Jordan

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or many business owners, the prospect of growth is daunting. It’s hard work, it’s expensive, it’s scary – and all manner of other excuses. The temptation is to do nothing or find reasons not to grow or expand. However, if you have successfully opened the doors of your business, have a niche for your product or service and have implemented the right systems, procedures and strategies, then you already have a solid platform on which to grow successfully.

So let’s dispel some of those growth myths that may be buzzing around in your head.

1. I’m too busy to grow It is the classic vicious circle: ‘the work I need to do to bring in the revenue takes up all my time and therefore I don’t have time to do the work I need to do to build the business’. It’s about a shift in thinking – as long as you think ‘I am the business’, it’s nigh on impossible to change.

Start thinking of the business as a separate entity and what it needs in order to grow. Once you start thinking this way, you must also consider what you want the business to do for you – rather than what you must do to keep the business going.

Restaurateur, entrepreneur and internationally renowned brand, Neil Perry, has turned a culinary vision into a big-time business success story courtesy of a simple change in focus.

Years ago, Perry’s business reached a stage where it was consuming too much of his time, and it became clear he was devoting himself to the wrong aspects of the venture. With strategic thinking, he was able to free himself from jobs he did not like (or wasn’t good at) and concentrate his skills in areas where he was strong. Perry did a SWOT analysis on himself.

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He identified his strengths and which prospects he could target as a result. Next, he listed his weaknesses, opportunities and the threats that could hurt his business.

As a result of this analysis, Perry brought in two partners who complemented his skills and gave him time to build the business. Accountant Trish Richards helped him crunch the numbers and gave him an accurate picture of where things were heading. Another partner, David Doyle, provided input that helped him focus on the direction of the business.

“Figure out what you’re good at and get people around you who can do the things you can’t do. You’ve got to have likeminded people around you,” Perry says.

It is clear that if you want to grow your business you have to be prepared to stop doing everything yourself or you will burn out. In Perry’s case, he gave up some of his autonomy to bring in the expertise he needed. It allowed him to concentrate on the areas in which he excelled. The upshot is that Perry’s frustration levels dropped and he was able to create systems that meant his business still operated efficiently, even when he was not there.

Business growth that also creates an income-generating operation when you are elsewhere will help deliver a business you will be happy to keep for a long time.

2. I can’t grow because I’m irreplaceable If you are of the mindset that all your clients want you, and that no-one can do a job as well as you can, then you will be the greatest obstacle to your own business growth. At a certain stage in your business development, it could be true that clients want only you, but you have created that dependency, and, just possibly, some part of you might even like feeling needed.

This is where an organisation chart comes into play. Take a good look at your chart and see how many hats you’re wearing.

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Feature Myths about growing a business

Are you the CEO, head of sales, financial controller, customer service representative and administration officer? If so, it may be time to create systems so that others can step into these roles. Loosen the reins a little.

3. It will be easier when we have more people Careful what you wish for: while many hands can make light work, the more staff you have, the more headaches you can have, too. It’s the nature of business.

People bring to the workplace everything that makes them who they are. Great people usually carry little baggage, or know how to store it during working hours. Many others bring lots of baggage and don’t know that dumping this in the workplace is far from appropriate.

Every employer will face times when employees experience a crisis. That’s just a fact of life. Employees can easily encounter problems that will need a supportive boss to help them get though. It’s important that a boss or a manager lends a sympathetic ear when an employee is in strife, but it’s equally important for that boss or manager not to fall into the role of counsellor when an employee reveals they have many issues.

Getting your hiring strategy right is the priority. Some people carry a heavy load that they want to drop on others whenever they can, so choosing employees carefully makes sense.

A business owner is already doing the economy a service by taking on the risks associated with business. This, in turn, provides many people with jobs. Bosses do not have to be everyone’s saviour as well.

I remember an interview we did with business owner and chef Rachel Grisewood, who said she was frustrated because her business needed the right people, but often could not afford to pay the wages that would attract such employees.

Now in charge of renowned bakery Manna From Heaven and a budget-brand offshoot called The Sydney Biscuit Company, Grisewood says staff choices have been critical to her success.

“This business sometimes made do with the wrong people and all the will in China couldn’t make them right,” she says.

Getting the right people on the bus and in the right seats, to paraphrase Jim Collins, author of Good to Great, often causes great difficulties for small businesses.

No matter how desperate you are for extra hands, religiously follow this rule – hire slowly. Go back to your organisation chart.

If you don’t have one, then the first step is to develop a chart that depicts every job in your business.

In our company, Switzer Media + Publishing, there was a time when a few of us were doing every single job on the chart!

Gradually we were able to hire people to fill these roles.

Be flexible. On occasions we realised that we had the right person in the business (great work ethic and attitude) but they were not wearing the right hat, so we were able to change their position on the organisation chart.

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Wired for success Many business owners dip their toes into the deeper waters of growing a business but quickly pull out because they’re too afraid.

Our electrician, Matt, tried to grow his business when he discovered he was so good at what he did that work just poured in. He took on staff to meet the extra demand, but had no systems or procedures in place.

He was a one-man band and thought everyone wanted him, but really what customers wanted was an electrician who turned up on time, was pleasant to deal with and who did the job well.

Matt hired tradespeople who had no job description, no position agreement and no understanding of what was required of them beyond wiring a house and the like. To put it colloquially, these tradespeople were all over the shop and Matt spent most of his time trying to control them or tidy up their mess. He stopped doing electrical work and ended up chasing staff.

When his tradespeople started taking countless sickies, Matt was tearing his hair out. Fed up with all the stress he went back to being a one-man show with a sidekick. If you ever ask his opinion on growth, he simply says “Tried that, too hard”.

In reality, Matt went back to his technical day job because he didn’t understand the core requirements needed to take a business to a higher level.

As entrepreneur and chef Neil Perry says: “If you don’t have a fundamental philosophy and something for people to hang their hats on, then it’s really hard to go forward.”

On the other hand, with the right game plan, business expansion is possible and profitable, as the growth journey of electrical contracting firm Platinum Electrical Contractors shows.

Multi-award-winning owner Joshua Nicholls ensures that his electricians – he has a team of more than 30 – call customers if they aren’t going to arrive on time. And he has a system to ensure this happens.

His electricians arrive with a mat to clean their boots on before they step inside the client’s house.

Tradespeople are not usually known for their business skills – a shortcoming that often leads to a poor-performing business and cranky customers.

Nicholls says he quickly recognised that tradespeople had an ordinary reputation for such things as customer service.

So Nicolls’s business strategy has been to do the opposite!

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Feature Myths about growing a business

4. Growing a business is too hard In some ways, starting a business is a little like having your first baby – you never knew what you were in for and thought you’d never get a full night’s sleep again! Growing a business, however, can be like raising a teenager. A growing business brings a different set of challenges to the table that can make a business owner feel out of control. As an owner, you have to be able to let go and trust that other people in the company are well equipped to do their jobs and help you take the business to the next level. If you have done your groundwork well, if the systems are in place to allow the business to operate without your hands-on involvement, then all will be well.

The hardest part is letting go of the baby you created. And just like raising a teenager, letting go occurs in a series of stages.

Again, go back to your organisation chart. What jobs can you let go of now, in three months, in six months and so on? Can you use reliable contractors who can help lighten your workload to give you more time for strategic thinking?

There will come a time in your business growth where you don’t know everything that’s going on in your business. With the right people in the right positions, there are many decisions that can be made without you, and all you need is a report detailing the outcome. See that as a measure of success. G

working smarter to grow Words Peter Switzer I find whenever I go on holidays that in the first week I just chill out to forget the tough year of working. However, in the second week when I’m refreshed I can’t help thinking about my business and how I could do it better next year. Also I believe many of us change the goal posts as our life develops.

When our kids were young we wanted to keep the business manageable so we were always with them.

But as they got older and didn’t think we were cool enough to hang around them so much, we started to reassess our goals.

Over the past few years, we’ve gone for growth and the Switzer Group now has 21 employees, a number of contractors and we are moving into the fast lane for more growth. The transition from a managed business to a fast grower was made easier by our commitment to innovation, which meant we worked smarter.

If you’re into a healthy work-life balance, ignoring better business techniques could make your life a whole lot tougher than it has to be. It could also unfairly steal the time you might be desperate to save.

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Funny business From a small satirical newspaper funded by mumand-dad investors (that is, their own mums and dads) to a national brand poking fun at anyone and everyone, The Chaser team has proven that there’s a business in being funny. They gained international notoriety in their now infamous APEC stunt in Sydney back in 2007, parading as a group of Canadian delegates.

When corporate lawyer turned funny man Julian Morrow talked to Peter Switzer during SWITZER on Sky News Business Channel, he admitted to running the business side of the show, but denies he is a business brain. Always the fall guy, he said: “The situation was that I wasn’t really cutting it in terms of creative merit so I had to move into management – you know how it is. I had done a bit of work as a lawyer. I was certainly keen to be negotiating the deals. So I’ve taken day-to-day carriage of the business aspects of it.”

While it’s all very well to be creative, eventually the business side catches up. At the end of the day, even every creative person needs to get serious about business, or pay someone they trust to do it for them.

Start thinking of the business as a separate entity and what it needs in order to grow. Once you start thinking this way, you must also consider what you want the business to do for you – rather than what you must do to keep the business going

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Feature Leadership

Lead the charge As a business owner, your capacity to lead effectively can have a direct effect on your bottom line.

So make it your business to improve your leadership skills, and to create trust and confidence in your team to build a more successful business.

Words Lesley Ann Grimoldby

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uch is written about leadership and particularly how it plays out in large corporate entities.

Qualities such as single-minded focus, fierce resolve, clear vision and ambition for the business and determination to get things done are acknowledged as key. In his book Good to Great, Jim Collins lists all of these qualities and more as being the characteristics of great leaders.

In the main, he is referring to leaders in sizeable, established corporate organisations.

Small businesses are a little different.

Michael Gerber, author of the best-selling small business book, the E-Myth Revisited: Why Most Small Businesses Don’t Work and What To Do About It, says that “a big business is just a small business that got it right”. However, very few small to medium enterprises (SMEs) are started by leaders with such focused and entrepreneurial qualities. The majority, as Gerber says, are started by “technicians who had a brief, entrepreneurial seizure”. making time to lead By their very nature, small businesses need hands on, practical work carried out by their owners as well as leadership focus and vision. The truth is, only a tiny percentage of small business owners practice leadership or demonstrate Collins’s qualities because they are so tied up in the detail of getting the work done to satisfy the customers, keep the staff happy and productive and coping with all the day-to-day demands of a small business.

The majority of small business owners will readily acknowledge that their business needs leadership, and in the same breath

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will tell you they don’t have the time to focus on the bigger picture, lead and mentor their people, or spend more than a few minutes – if that – determining the direction of the ship. Think ‘mouse on a treadmill’. If they don’t spend any time on those essentials, nothing will change. How can it?

Without leadership, with the captain slaving away in the bowels of the ship, the crew have no-one to look to for direction.

They eventually become disenchanted and turn up each day to go through the motions in order to take home a pay cheque.

Before long, the owner resents them, and all the work he or she has to do, and they resent doing it as well. The customers sense it. And the business suffers.

This is an extreme example, but we see it over and over again and one of the most common complaints is ‘you can’t find good people’.

The truth is there are good people out there. Everywhere.

And they are looking for the leadership and management that will bring out the best in them.

Get up, stand up In small business, leadership and management are not two discrete responsibilities, they are interdependent.

Leadership is about inspiring people to want to be part of a greater outcome and act accordingly.

Management is about achieving results that will ultimately lead to the greater outcome by inspiring people to be the best they can be.

The SME that has both of these reaps the rewards.

It is up to the owners of these businesses to take a good look at themselves and analyse their own work and leadership practices, identify their skill sets, maximise the positive and develop those that are missing. G

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Feature Leadership

leading your people Words Peter Switzer In these troubled times a couple of clear messages have emerged. Firstly, the world – both the public one we share and our personal one – is in need of leadership.

And secondly, the one area where we are all lacking has to be conflict resolution. Truly great leaders – and that means employers, managers, sports captains, parents and role models – need to show their followers how to fix up the problems they have with one another.

Dysfunctional people lead to unproductive workplaces. If you’ve told a relation or work colleague that their behaviour bothers you or has hurt you and they blow up, the relationship is often never the same.

Experience then tells you not to try that again and you now have embarked on a life of subterfuge and coverups. This, of course, gives rise to grudges, backstabbing and a general lack of development. For a relationship, just like a business, it is unproductive.

Great leaders put time and money into training their staff to build up their endowment of valuable qualities, and the superior results follow.

Working on your leadership • D evelop a clear vision for your business that is more than just a spreadsheet of figures. Have a picture of the ‘finished’ business that is so clear you can taste and smell it.

• Determine what it is that will make your business set itself apart from the competition and build that into your standard business processes.

• Clearly state what your business is there to achieve and how it will do that profitably.

• Communicate this to your people. Let them know what the big picture is and their part in realising it.

• Know exactly who your target markets are and what they are looking for. Understand why your products and services will appeal to those markets • Identify the values of your business and its people.

Know what it stands for and the behaviour, attitudes and beliefs it expresses.

• Recruit and hire people who come with matching values already wired in. In other words, build questions around values into your recruiting interviews and evaluations.

• Set clear goals in realistic and achievable time frames and plot them on a time line. Plan the actions that will bring them to fruition.

• Regularly review your goals to keep them top of mind.

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“The leaders who work most effectively, it seems to me, never say ‘I’.

And that’s not because they have trained themselves not to say ‘I’.

They don’t think ‘I’. They think ‘we’; they think ‘team’. They understand their job to be to make the team function” Peter F. Drucker

Working on yourself • K now and understand yourself – recognise your own areas of strength and weakness and capitalise on them or develop them.

• Listen: to your staff, your customers, your community.

• Take time to process what you hear, particularly if it is critical in what you are doing.

• Learn how to give praise where it’s due.

• Communicate – your staff are not mind readers.

• Recognise when you are doing technical or operational work (which isn’t to say don’t do it; you’re in small business, it comes with the territory).

• Make time to do your strategic thinking and planning. One hour a day will have a profound impact on you and the business.

• Build your management skills. In small business, management and leadership go hand-in-hand.

• Become aware of the bigger environment in which your business operates and how changes impact your business.

• Don’t underestimate the value of getting some leadership coaching.

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In depth Nic Cerrone

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In depth Nic Cerrone

The ring master Words Maureen Jordan Photography Wilk

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ic Cerrone has always dreamed big.

“My mother always tells me when I used to sit around the fireplace back in Italy, even at the age of six, I always used to tell her that one day, I’m going to be very famous!”

Today, living on the other side of the world in Australia, he runs the eponymous jewellery brand that caters for celebrities and for those who love beautiful jewellery set here and abroad.

It has been quite a journey since Cerrone migrated to Australia, later becoming an apprentice to a master jeweller before setting up his own fledgling business. He initially operated out of a small terrace house in Leichhardt, a $16,000 property purchase that, 30 years on, he still counts as one of the best decisions he has made. “I worked downstairs and lived upstairs,” he recalls. “My beginning was very much me going to these families and borrowing their jewellery and repairing it for free so I could train myself to become a good jeweller. So that I could handle these pieces, to touch them, feel them (and) understand what was the meat of these things.”

Cerrone now operates four luxurious stores across Sydney.

His elegant jewellery lines are exported around the world and adorn celebrities such as Barbra Streisand and Olivia NewtonJohn. Not bad for an Australian entrepreneur who grew up in Lanciano, a town in the Abruzzo region in the heart of Italy.

Passion and a burning desire to please those who wear his unique jewellery are the hallmarks of Cerrone’s success. Such acclaim has come on the back of hard work, innovation and a touch of introspection – for example, realising early in his career that selling was not his strength. “So I employed an English gentleman to represent my work,” he says. “He was very proud of my work and knew I had something unique, so he knocked on all the doors in Sydney. Within a few months our work went through the roof. From one jeweller, I started to employ two, three …” The rest, as we know, is Australian jewellery history. G

16 Grow Your Business

A sparkling résumé While gorgeous designs and great craftsmanship are at the heart of Nic Cerrone’s business success, he appreciates the importance of external endorsements.

“My way of promoting my industry was always trying to win international awards because it’s very difficult to go out and say, ‘Look, I am the best jeweller in town’,” he says.

“It’s like you blow your own trumpet. It doesn’t make an impact until you start winning awards, design awards, entrepreneurial awards, business awards, all those sorts of things. I think that’s the best advertising you can possibly have.”

In the modern world, Cerrone believes mass production has, sadly, overtaken style.

“One of my favourite designers was Valentino.

He had a great passion for beauty, style and his weakness was anything that was beautiful … But today, there’s too much mass production.”

To counter such commercialism, Cerrone strives for excellence. “It’s a brand where we take every customer seriously.

“I want them to enjoy and find that happiness of wearing [my jewellery] and celebrate the wonderful occasion that they bought it for.

“And it’s really a wonderful feeling when, for instance, someone comes along and says, ‘It’s my 20-year anniversary. I want to buy my wife the best piece of jewellery’.”

Even the stars – Celine Dion included – are in the know. “It was her 40th birthday and her husband rang and said ‘I want to buy the best piece of jewellery you have in your store’. That is the ultimate reward you could possibly have.”

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In brief The growth lowdown

The growth lowdown Words Peter Switzer

Understanding what you do well forms a foundation from which you can progressively grow. Find what you do well and progressively begin to expand that.

Then focus on your customers.

Is it important to keep growing?

It doesn’t matter whether your business is large, or whether you’re a one-man or one-woman show. It doesn’t matter if you’re even just conceiving what your business might be.

Continuous growth is important and it comes back to the way you design your business, the culture you create, and it really comes back to the way you think about your business.

When you think about your business, and when you think about growing your business, think in terms of continual renewal of the business’s strength – ‘I want to grow my business to make my business stronger, more profitable’.

Assuming sales, employing more people and expanding the business premises are more examples of outcomes and not what we should be focusing on. Growth means continual renewal and thinking about where you’re going, why you’re going, and how you’re going to get there.

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a business owner’s growth dilemma Q: In our efforts to get bigger, we’ve had some doubts so we’ve stopped to think about what we’re trying to achieve. Does that make sense?

A: Your business might be just the right size for what you need for now. Growing a business is never easy. But Richard Shrapnel, director of strategy and organisation at Pitcher Partners, says all businesses need to consider whether to grow. He advises “don’t think size alone, think strength”.

Normally when you say ‘growth’, people think more sales, bigger premises, more staff, let’s get bigger and bigger. But in actual fact, Shrapnel says that growth is not that. Growth involves growing the strength of the business, its competencies, its capabilities, the way in which it performs in the market.

Ultimately, you want your profit to be higher, and most of us want a better lifestyle, while increasing sales might actually do the opposite. So growth is important, but you must think what it is you need to grow to make your business more successful. You must focus on strengthening your business.

All businesses go through periods of strength and weakness; they go through periods when it’s good to expand, and periods when you just need to settle back and relax, and permit yourself to consolidate what you’ve achieved – so you’re not always trying to climb the next Mount Everest. It’s important to balance that.

Growth comes back to the way you view your business. It also comes back to knowing what you’re very good at. Understanding what you do well forms a foundation from which you can progressively grow.

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In brief The growth lowdown

A fast mover Words Eleanor Glass Photography Emma Van Dordrecht Imitation may be the highest form of flattery, but mortgage and finance industry trailblazer Anne-Marie Syme says a strong point of difference is key to survival during tough times, as is having the confidence to trust your intuition and stay one step ahead of your competitors. Advice from someone of her calibre is to be heeded: Syme redefined the way business is done in the industry and today is principal at The Loans Café, executive chair of Finance & Systems Technology (FAST) and director of four other companies.

“When I started The Loans Café, others scoffed at the idea but [soon] the retail style of brokers began to pop up everywhere.” Emulated too was her flat fee model, introduced at FAST. “I always try to stay ahead of the curve in all aspects of business wherever possible.”

Staying ahead of the pack is no easy feat, but it is one Syme does with finesse. Testament to this, in 2009 Syme was named the Most Inspiring Woman of the Year in the business category at the Momentum Women’s Forum International Women’s Day Luncheon in Perth.

When asked what inspires her, Syme answers without hesitation: “Success.

“I get inspired by seeing companies I am involved with grow to be bigger, better and more profitable.

I believe we, as an industry, should revere, emulate and celebrate success where possible. I get inspired when I meet people in our industry whose knowledge and skill far exceeds my own – it demonstrates I have still much to learn.”

Despite her modesty, Syme is a pioneer in her industry: the first female to preside on the Mortgage and Finance Association of Australia (MFAA) council board in Western Australia, she has, over the years, proven to be quite the trendsetter, creating many initiatives that have since become the norm, including the MFAA’s WA Big Day Out, balls and industry awards nights.

Even though the mortgage and finance industry is traditionally male-dominated, Syme has never felt at a disadvantage. She says success comes down to confidence, not gender. “If you are a happy person and at ease with yourself, know your product and are honest in all your dealings, success will surely follow.

“Lead by example,” she encourages. “Leaders have the drive, ego, vision and ambition to see things through regardless of what obstacles come their way.”

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Feature Strategy

playing to win When it comes to maintaining your capacity for growth, your attitude and your ability to capitalise on opportunities is crucial. To help you on the journey, aim to boost your strategy in the following key business areas to gain a competitive edge.

Words Peter Switzer

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usiness and even life success starts with a dream. Making it come true and then making it bigger and better is the underlying process which drives champion sportspeople, successful business owners and, undoubtedly, happy human beings. So ramp up your strategy for professional growth.

Customer Service Most businesses start and grow on the back of the founder’s great customer service. It’s driven by passion for the product or the service and the customers who patronise the business.

I find many sole operators, such as mortgage brokers, worry about growing their business because they don’t think they can replicate their service in other people.

In absolute terms they could be right but similarly, the new staff could be better than them! Over the years, I have been astounded by business owners who treated me like dirt and some even knew I worked in the media!

They don’t know what they have missed out on as many of my business stories in print, on the radio and television have come from being wowed by a business with great customer service.

Of course, it doesn’t happen by accident, and three things are essential for staff to be on par with the owner when it comes to customer service.

First, the owner has to be great at it to create a wonderful demonstration effect. Second, staff need to be trained with systems, scripts and processes to look after customers.

Third, the boss has to create a happy business.

Put this together and even a one-time drongo staff member could learn to cut the mustard.

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Here’s a question to consider. How are you training your staff on customer service?

Word of mouth The best form of advertising is the cheapest of all and that is word of mouth advertising, but it doesn’t come from doing nothing. In fact, it requires an investment of time and usually money!

Kevin Stirtz, who wrote Blow Up Your Business, doesn’t believe people when they say they get all of their business from word of mouth referrals.

“Sure, word of mouth is a desirable way to get new customers,” he once said. “But too many business owners forget that word of mouth doesn’t just appear out of thin air.”

He says you have to create it via marketing tools to tell people who you are and what you do and by delivering a ‘wow’ experience for your customers so they tell others.

Also you need to ask people – customers and staff – if they are happy to talk to others about how good your business is.

And I know a guy who eight years ago when iPods were new would send them to business customers after doing a good job for them. That was a cost but he certainly had people raving about him!

What marketing ideas are you putting into practice? Do you have a marketing budget? Are you tracking a return on your marketing dollar? Do you ask people how they found out about your business?

Cash flow I recently was asked by a young person who was keen to start her own business what she had to do to avoid failing. The advice was to not be negative and ask yourself, what do I do to succeed? Marketing guru Peter Drucker said great businesses

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Feature Strategy

innovate to get a market advantage and then they market that innovation. But I throw in one more imperative – become a cash flow expert. Be sensational at collecting your money. You have to be professional and take lessons from accountants, bookkeepers and debt collecting experts.

Do your homework and remember you can survive a number of years without profit, but you will be lucky to last six months with a negative cash flow.

Last year vs. this year Although Australia did dodge the recession bullet, businesses still encountered tough times. As I have said before, many of the small businesses I spoke with said they didn’t feel the effects of the downturn as much as the media was telling them to expect. This was good news and we can probably expect to see things get better. But as is always the case in business, you can’t kick back and wait for great things to happen.

Use these questions as a springboard to success this year: • What did you do well last year?

• What was a challenge last year?

• What changes can you make to your business to make it run more efficiently and effectively?

• Are you taking too much time working in your business rather than on it?

• What do you hope to achieve in your business this year?

Networking One of the cheapest and most effective ways of marketing your business is to simply get out more! Networking is a great way to market your business, generate leads and grow your business.

However, too many small business people approach it as an amateur and they wind up with mediocre results.

I have learnt that you need to do a number of things to be an A-grade networker. Have a great script that says what you do and why people should want to do business with you. Take plenty of business cards and ask for others’ cards when you meet people. Show interest in others and ask about their business.

They can be customers, valuable suppliers and referrers!

Meet lots of people and practice interesting ways to greet people. Don’t worry if you get the cold shoulder – just move on.

The next day email all of the people you met and tell them it was a pleasure to meet them and if ever you can be of service just simply contact you.

What networking are you doing? To what extent are you engaging in social networking like Facebook? Are you posting tweets about your business on Twitter? It’s wise to investigate these online networking activities, but make sure you do the old-fashioned stuff well.

And finally, look at all of your marketing and ask the question: does this stuff instantly tell a customer why they should buy from me? If it doesn’t, change it! G

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Indicators to look out for Success is a function of two major forces. The first is the most important and it is all about what’s inside you. And the second is external to you, like rising interest rates and global economic meltdowns.

Clearly, the better you are in being control of the first force, that is the internal one, the more likely you will successfully deal with the external one.

The global financial crisis would have been a wakeup call for a lot of small businesses. With the benefit of hindsight, it’s possible for small businesses to look at what they may have done differently. Of course, the problem with the future is no one can predict what is going to happen. So it’s more important to learn from mistakes and prepare for what the future brings.

Keeping up to date with the news in the business world is important. It’s obvious, but how can you gauge, for example, customer sentiment if you’re not keeping up with what’s happening in the news?

You could keep a diary of when different reports are released, for example, reports on business and consumer sentiment, or when the Reserve Bank of Australia (RBA) has its board meeting to make a decision on the cash rate of interest. Events like these can affect the willingness of your customer to shop.

Ensure you visit www.switzer.com.au for the latest news and opinions on shares, property, superannuation, the economy, financial markets and business.

Also watch Peter Switzer’s Sky News Business Channel program – SWITZER – Monday to Thursday at 7pm and repeated at 10pm.

The indicators you should keep your eyes on are: The RBA: The RBA has its board meeting on the first Tuesday of every month except January. At this meeting, they analyse the data released over the past month, such as inflation data, consumer and business confidence, and make a decision on whether to raise or drop the cash rate of interest, or keep it the same.

The RBA also releases the minutes from the Board meeting later in the month. Read through this to find out what economic indicators the RBA was looking at when they were making decisions on the cash rate of interest.

Australian Bureau of Statistics (ABS): There are a number of indicators you could watch here.

These include retail trade, unemployment and lending finance. You can also find data specific to your industry, such as motor vehicles sales, building activity, tourism or agriculture.

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In brief Innovation

The ideas incubator Words Courtesy of Deloitte Consulting

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enerating sustainable growth over longer periods is one of the main challenges facing organisations, small or large, in today’s business world. While this challenge presents an invitation for businesses to focus on innovation as a means of driving growth – and the upsides can be significant – there are also potential pitfalls.

The opportunity to innovate is often viewed by smalland medium-sized enterprises (SMEs) as too costly for no guaranteed outcome or, alternatively, innovation becomes the mantra of the business and distracts management from the day-to-day focus. The stream of new ideas is not converted into business value with timely returns.

However, innovation can be a driver of growth for any midmarket business. The idea-through-to-market process must be pragmatic, it must focus on the strengths of the organisation and be weaved into the day-to-day of serving customers.

Middle market companies are not only using innovation, they are democratising it. Any firm can be innovative, yet it’s clear innovation is not just something you do if you are an enlightened firm. It’s something you do because you have to, to survive.

Successful innovation will result in better products or services, a better customer relationship, or more streamlined and costeffective business processes. It doesn’t have to be ‘big bang’ to be value generating – quite the opposite.

Three key factors contribute to successful innovation in SMEs: 1. Build an innovation network: Idea generation shouldn’t be a solitary pursuit. A large enterprise may decide to set up its own team to focus on innovation – a smaller enterprise needs to look outside its walls to augment its skill base for idea generation. Innovative businesses build smart relationships and partnerships: leveraging local business communities, industry bodies and personal networks. And of critical importance, they involve their customers in the process –

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regularly asking customers what they want and whether they like what they are getting.

2. Keep it simple: The more realistic the innovation challenge, the higher the success rate. Don’t limit innovation to the development of new products or technologies; include, for example, ideas for process improvements or customer service. SMEs can borrow and replicate good ideas from other businesses, say on operational set-up, or how to negotiate with suppliers. Open innovation is critical – share with employees, peers, colleagues and customers to maximise the potential for generating growth through innovation.

3. Think big, bet small: Identify the new idea and break it down into small chunks. Work out how to trial and test the idea on a small scale, ensure you can measure success along the way, fail quickly and cheaply, learn and move on. This avoids the classic problem of investing significant time and money into a big idea, only to fail in the execution – making innovation an expensive pursuit. And as above, involve your customers in the process – make the idea testing real rather than conceptual.

To deliver sustainable advantage through innovation, it needs to be systematically embedded in the business. Only if a business manager can describe his or her innovation process, will it be a source of growth or competitive advantage.

Executives should ask themselves the following questions: • Why are we innovating?

• How are we innovating? What is the process we are following?

• How will we know a good idea when we see it? And how will we make it into reality? G Deloitte is a recognised leader and award winner in innovation practices, and believes successful innovation starts with the CEO and is woven into the fabric of the business. Visit www.deloitte.com.au for business resources to help unlock your innovation potential.

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In brief Ginger & Smart

A dynamic duo Words Jess Blanch

“A

n entrepreneur is often blinded by ambition, bloody minded, focused, self motivated and aggressively determined,” Alexandra Smart told a graduation audience at the Australian Graduate School of Management at the University of New South Wales just three years after starting her business.

“These are not necessarily endearing qualities, but I now recognise they were necessary for the start-up of my business.”

This candid approach is typical of the eldest half of the dynamic sister-act behind Australian fashion and lifestyle label Ginger & Smart. Speak to her and she’ll tell you they named their label in celebration of the combination of “opposing but complementary forces of hard and soft, empowerment and vulnerability, sexy and smart.” ‘Ginger’ referenced her and her equally cardinallyhaired sister, Genevieve (pictured, right, with Alexandra).

Only three years after launching in 2002, their company catapulted to BRW’s list of the country’s top 40 fastestgrowing businesses. Today, they sell in more than 30 stores across Australia including David Jones and their Paddington flagship store. And in a move that displayed a penchant to think big, they opened their second retail store in Justin Hemmes’ $150 million dollar Sydney hotel and bar complex, Ivy in 2008, and a third in Sydney’s Avalon in 2009. The assault on the overseas market packed a similar punch, with their wares stretching internationally from Browns in London and Lane Crawford in Hong Kong to Cara & Co in Russia.

“Before starting out we spent a lot of time thinking about the brand and product mix; what we wanted it to stand for and where we wanted it to be in five and 10 years,” says Alexandra.

“It’s a great moment when you realise your company is no longer just about yourself.” While she may not sound ‘bloody minded’ or ‘self focused’, there’s no question as to whether Alexandra is still an ambitious and determined entrepreneur. G

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Two of a kind Despite a clear distinction in their skills, the siblings are collaborators in every sense and make their big decisions together. “Gen’s area is design, while I look after sales and marketing, staff and retail issues,” says Alexandra. “We sign off on all the designs and marketing together and our strength is that we share the same vision for our company and where we want to go and what we want our lives to be like.”

Lifestyle, after all, was the main motivator behind the conception of their partnership. “We were trying to find ways to build a lifestyle that would allow us to have children and grow something together.”

She says it’s equally a struggle in fashion because of the stress levels and the time commitment. “It was a way of us trying to find a financial footing for the rest of our lives and take back a bit of control over our destiny,” she says. And years on, Alexandra concedes it’s still tough. “We’re both mothers. It’s just a matter of getting that work-life balance happening.”

Retail is a big step for fashion labels and stories are rife of the brands that have learnt the hard way through expanding too quickly. Alexandra says that while there are all sorts of risks you take on board, there are a number of strategies behind growing the company.

“Owning your own brand and your brand environment and being able to talk directly to your customers is the key reason for opening your own store,” she says. “It’s positive in terms of cash flow too; you’ve got a daily situation as opposed to waiting around all the time.”

Looking to the future, Alexandra understands the importance of having a the right team. “We spend such a lot of time on team building. It is so fulfilling to watch other people grow and take on their company goals.”

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In brief Ginger & Smart

“Before starting out we spent a lot of time thinking about the brand and product mix; what we wanted it to stand for and where we wanted it to be in five and 10 years” Alexandra Smart (pictured, left)

“Ginger & Smart is all about creating inspiring product to a designliterate customer. The [collections] are the happy result of the strict philosophies of luxury, quality and innovation” Ginger & Smart website

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In depth Anthony Puharich

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In depth Anthony Puharich

meat me halfway Words Maureen Jordan Photography Wilk

D

uck neck sausages, parfaits and terrines – it does not sound like the offering of your average Aussie butcher.

Not that Vic’s Meat co-founder Anthony Puharich is making any apologies, proudly noting the European influences on his wholesale and retail produce operations. “I’m not trying to sound disrespectful,” he says. “It might not be traditional butchery in Australia, but for Europe and particularly France and Paris, rotisseries, soups, salads, pates, parfaits and terrines – that is the norm. I wanted to bring that back to Australia.”

Courtesy of their wholesale export business at Mascot and a retail presence in Sydney’s well-heeled Woollahra, Puharich and his father Victor are helping to transform the image of butchery in Australia. Their exotic meats and recipes feature on cooking shows, while their interactive website answers everyday questions about meat and demonstrates a modern take on an old business concept. They are making a dollar, too. Their $70 million-a-year business spans the Mascot and Woollahra arms and fast-growing operations in Shanghai and Singapore, which were launched in 2007 and 2008, respectively.

Puharich puts the business’s success down to great products, superior service and robust financial discipline, even as the business grew rapidly. “There were a lot of temptations there,” he says. “You’re making money and it’s easy to go, ‘Oh god, I’ve been working really hard, I’m just going to pay myself a couple of thousand dollars or whatever’. We never did that.”

When the Puharichs’ launched Vic’s Meat 13 years ago, there were many unknowns as they sought to target meat sales to top-end restaurants, four- and five-star hotels and airlines.

While Victor had been in butchery for decades, Anthony was “fresh out of university” after graduating with a finance economics degree from Bond University on the Gold Coast and then spending nine months as a merchant banker. He decided the meat industry could be a better career option.

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The father-and-son combination made a formidable team: Anthony bringing his sales and marketing nous to the table and Victor focusing on the produce. “He’ll be the first one to admit he doesn’t have that commercial business sense,” Anthony says. “He’s amazing at what he does, he’s very hands-on in the business, but he has a lot of trust and faith in me.”

Restaurants, hotels and airlines have been prepared to pay a premium for the enthusiasm, service and products the Puhariches deliver. The business has boomed from day one. Anthony explains: “The growth has been exponential, particularly the first seven years. It was just amazing, and it was scary. Managing growth was more challenging than getting the phones to ring. We weren’t managing it consciously because we were unaware of how quickly our business was growing.”

As the orders flowed in, father and son resisted the temptation to delegate and just worked longer and harder. “Before we knew it we were seeing more money than we’ve ever, ever seen in our lives and it was bloody amazing,” Anthony says.

“Miraculously for the first three or four years, we funded all of our growth by not taking a big wage, relying on retained profits and just driving the business through cash flow and profit.”

Like many entrepreneurs, Anthony yearned for an international business. With the aid of business partners as financiers, that has come in the form of wholesale operations in Shanghai and Singapore. Armed with the business model that has worked so well in Mascot, Anthony made the “bloody hard” decision to leave his wife and three children behind in Australia while he lived in Shanghai temporarily to establish the new business.

Now with a fourth arm of the business – a foray into the retail market with a European-style butchery in Woollahra named Victor Churchill – Anthony can reflect on an enterprise that continues to thrive. “We’re a bit of a household name within restaurants and hotels.” With 120 staff and a multi-million-dollar operation to look after, life is sweet for 36-year-old Anthony, who is glad he abandoned a career as a banker more than a decade ago. “Food is my life, my passion, my industry.” G

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Feature Money

Money (that’s what I want) When a cash crisis occurs due to a growth spurt in your business or because you haven’t yet put down the foundations to manage cash effectively, there are things you can do from a cost and revenue perspective to improve your position.

Words Peter Switzer

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utting costs can only be done up to a point – and you have to be careful. Taking the knife to costs too quickly can mean you cut things in your business you need the most.

These items could be advice from your accountant or business coach, aspects of your marketing or your much-needed insurance. So, while trimming costs is important, it’s wise not to be too heavy-handed or to make rash decisions.

Cost cutting may provide you with temporary relief, but it will most likely cause you problems down the track. Think about it: if you cut down on your marketing budget now, this could affect revenue in six months’ time. This is the time to keep your business name and product and service offerings out there – and it could be the perfect time to use a business overdraft.

Once you’ve pruned your costs carefully, look at what you can do on the revenue front to assist cash coming in.

The real cost of poor cash flow Every business has the potential to have a cash flow crisis, as these stories below show: 1. Retail woes A retail store usually gets paid on the spot via cash, EFTPOS or credit card so you might think they have no cash flow problems.

But what if customer service standards slip or a competitor sets up nearby and customers flock there instead?

Sure, this type of business isn’t waiting 14, 30, 60 or 90 days for payment, but if customers aren’t walking in the door regularly, then revenue will fall and a cash shortage will start surfacing. Rent, wages and overheads still have to flow out

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at a time when customers aren’t coming. This is why it’s so important for all businesses to maintain marketing activities and have superior standards of customer service in order to keep and grow their customer base.

2. Moving money A professional business – a doctor or a solicitor – moves into new premises, does the outfitting, takes on staff, and buys expensive, but necessary, equipment. But it takes 12 months to build up the business because marketing efforts have been neglected. Rent, wages and other overheads still flow out while the customer base takes time to grow.

3. Worth the trade?

A tile retailer does a lot of work with developers who go bust.

The retailer is carrying considerable stock. While a government stimulus package might target the building and construction industry, it takes time before buildings get to the tiling stage. Yes, in nine months’ time, the tile retailer could be laughing – but how does the business get through the next nine-month period?

Invest in the future: Ask yourself these questions: • What am I doing now, in terms of planning, so I have solid revenue in the next three, six or 12 months – or even longer?

• What marketing am I doing to ensure continued business?

• Have I been to my bank to tell them of changes in my business that could affect me in six or 12 months’ time?

• Am I about to buy new equipment that requires a hefty outlay that would be better leased?

• How many proposals do I have out there that could bring in future revenue?

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Feature Money

• Am I looking after my customers so well that they would be reluctant to leave and go to my competitors? In short, am I protecting my current revenue base?

Debtor management Every business at some time experiences a customer who is either a slow payer, or worse still, refuses to pay at all. Few people enjoy harassing customers for unpaid accounts, but essential telephone skills go a long way to getting payment.

A phone call is often the best way to do it. And if you have your script down pat, it’s the best kind of instant gratification there is.

Be prepared. Have all the details in front of you before you make the call – know both the invoice and the delivery details, as well as a list of questions you need answered. This way, you can approach a debtor with confidence and tick these off as you go through. Always be sure to speak to the decision maker. Know their name, and use it. If they are unavailable, find out when they will be back in the office and call them then. Leave your name as a courtesy, but don’t leave a message asking them to call you – it’s unlikely they will. Never leave messages concerning the debt, especially on an answering machine, as this is a breach of privacy (you never know who may be listening).

Don’t call at lunchtime, on a Friday afternoon (or on a Friday at all!), too early in the morning or after 4pm. If you have a part-time staff member who makes these calls, keep the times above in mind when negotiating the structure of their working week.

The pause that pays Professional speakers know the power of the pause and use it to their advantage – it applies pressure through silence.

This is the part of the conversation where you put the burden of conversation on the debtor. For example: “I need your payment no later than Friday.” Then pause. Do not speak.

Even if you are tempted, don’t. Instead, let your debtor fill the silence. This is a great way to get a commitment out of the most reluctant of payers. More often than not, they will give an undertaking to pay. If you don’t get a bite, ask this question: “When can I expect payment?” Once they’ve responded, be sure to repeat their commitment back to them: “Thank you very much. I’ve made a note that this will be paid on Thursday and you’ll email me the remittance details.”

For each account, keep a record of what has been said. Write down the main points of your conversation and refer to this for future conversations. This also means that someone else can handle this account, as they will have all the information before them. Also, remember to be always kind and courteous, never patronising or cross.

As you get to know the client better, you can ask them questions that will put them at ease, like how their weekend was.

This also helps you to establish a relationship, making it harder for them to avoid your calls and your end goal – payment. G

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On the money Words Symon Brewis-Weston, executive general manager, Commonwealth Bank Local Business Banking.

Nothing tests your business like rapid growth, so here are some tips to help you re-engineer and stress test your finances to put you back in control: Step 1: Take control of cash flow It all starts with your business plan. Put together some growth scenarios and see how they affect your cash flow and your working capital needs. Then make sure you have a system in place to monitor your cash position and track your progress.

Tip: Make the most of today’s powerful online business banking tools. They can give you complete visibility and control of your cash flow around the clock, and integrate with your payroll and accounting systems. Take care when selecting a business transaction account. Your account is the hub of your business cash flow system, so it should give you easy access to your cash, with a range of options for moving money in and out fast. It should also have fee concessions, so you can focus on managing your cash, rather than worrying about the cost.

Step 2: Accelerate receivables Without careful management, accounts receivable can quickly get out of control. After all, a sale is not complete until you’ve been paid in full. That’s why you need to make it as easy as possible for your customers to pay you, while minimising the time you need to spend processing each transaction.

Tip: Electronic receivables solutions like BPAY, direct debit, cards and EFTPOS put cash in your account faster and make it easier for customers to buy from you. They also make it easier to track and reconcile payments, slashing paperwork and administrative costs.

Step 3: Create a safety net Every business needs a little extra cash from time to time. If you’re expanding rapidly, you may also need some longer-term capital for new assets. So it’s important to plan ahead and make sure you’ll have access to the cash you need when you need it.

Tip: A business credit card, overdraft, or line of credit can provide a short-term cash injection. You only pay interest on the money you use, so you can keep costs under control. In the meantime, you have the confidence of knowing that there’s a cash flow safety net if you ever need it.

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In depth Lionel Lee

28 Grow Your Business

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In depth Lionel Lee

empire of the son For the family behind NSW-based electrical retailer Bing Lee, the family and the business are inseparable. Lionel Lee is at the helm, steering the business in the same successful way the two generations before him did.

Words Peter Switzer Photography Wilk

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t the heart of every truly memorable brand or business has been a unique marketing strategy that makes the operation stand out from the crowd. US marketing expert Seth Godin calls it a ‘purple cow’ strategy.

Bing Lee is a purple cow. Even if you’ve never stepped into one of its 40-plus stores in NSW, you can’t help knowing the firm’s jingle, ‘I like Bing Lee’, inspired by the singing exploits of Eric Idle, of Monty Python fame.

The lateral thinking in using this tune, which when sung by Idle was the ‘I like Chinese’ song, is typical of what Edward de Bono tells us is at the core of high-achieving businesspeople.

The Lee family, from grandfather Bing through to father Ken and son Lionel, comprises classic outside-the-square thinkers, and that’s one part of the story of how it has created an enduring retail brand.

It’s also a pretty impressive business.

“For the 2009 fiscal year, the revenue comes in just under $490 million,” chief executive Lionel Lee says.

“We have 41 stores, approximately 900 staff through a mix of 13 franchise stores and the rest company-owned.”

It all started when Lionel’s grandfather Bing Lee and Dad Ken purchased an electrical repair business in Fairfield, in Sydney’s southwest, in 1957.

“Bing and Ken saw a future in the electrical business, particularly with the release of television in 1956,” Lionel says.

“Plus, they saw the ambitions of the waves of migrants, and that suggested to them that the demand for electrical appliances would be strong for many years to come.”

The location for the first business showed that the Lee family understood market demand. “Fairfield was right in the middle

29 Grow Your Business

of the hostels housing many of the migrants when they first arrived in Australia,” Lionel says.

“As migrants themselves, both Bing and Ken understood how migrants would want to improve their lifestyles and along the way take advantage of the many benefits of household electrical appliances.”

The early phase of growth was conservative, with Bing keen to stay close to the migrant community. As those communities moved beyond Fairfield, Bing Lee moved with them. When Bing died in 1987, Ken Lee became more expansionary. “We began to open stores in places that were not necessarily migrant strongholds but more mainstream,” Lionel says. “Between 1987 and 2007 we’ve opened more than 20 stores between Canberra in the south and Port Macquarie in the north.”

Start-up businesses that quickly achieve an impressive growth story have to have a competitive advantage. So, what was Bing Lee’s? “Its original competitive advantage was providing credit to migrants who couldn’t get finance through regular sources,” Lionel says. “Bing and Ken trusted the migrants. The migrants trusted them and that mutual trust was the core of the business in the early days.”

While Bing Lee has reached the heights that a publicly listed vehicle would be proud of, it remains a family business. This could explain its success.

“Essentially, the business has grown of itself over the years,” Lionel says. “It’s still a family business. We treat the business as a family. Our staff are family. Our customers are family. If you’re not a part of the family, you’re not really Bing Lee.” Lionel was destined to be part of a family business from a young age. “I attended my first board meeting with my father when I was 10 years old,” he says. “It was during the school holidays. Mum put me in a suit and tie, and when Dad and I

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In depth Lionel Lee

arrived, I was put under the board table and told to be quiet, sit still and listen. I finished my HSC in 1983 on a Thursday, started with the business on Friday and I became CEO on the death of my father in December 2007.”

Typical of businesses built to last, Bing Lee has had the security of a leadership team of six, who have run the business with Ken Lee for many years. This means the operation sits on solid foundations, despite the death of its inspirational co-founder.

And while the retailer has carried the brands that sell themselves, a big part of this success story has been the marketing of Bing Lee, with only two advertising consultants in the business’s history.

After Bing’s death, as Ken began to expand the business rapidly, the marketing as well as advertising changed to reflect this. “First, we began to stock a lot more brand-leading products; and, second, we started working with big-brand suppliers to enhance our mutual interests,” Lionel says.

“Third, we had to move away from straight price advertising and competition because price alone could send you broke.

And, fourth, we had to become more mainstream, appealing to all Australians.” To do this they engaged Barry Anderson, head of Grey Advertising. “He’s taken us down the ‘best advice, best price’ and ‘everything’s negotiable’ routes,”’ Lionel says.

“He’s also instilled family into the advertising, first with Ken and now with Yenda in Sydney and myself rurally. We use the electronic medium to position and get us on shopping lists.

Press and catalogues are about selling.”

Bing Lee started advertising on radio but really didn’t take long to dive into television commercials, with its first ads broadcast in the late 1970s. Both media have been and still are important to the brand’s development. And while the retailer has all the apparent professionalism of the big retail names, the management team has always preferred a family approach, even when it comes to its externally sourced marketing.

“Our two consultants in more than 30 years have both been part of the family, although as consultants they’ve had the objectivity to tell us when we’re wrong. Quite simply, Barry is our brand guardian.”

What about the famous song? “I think it’s more than 25 years ago that we started using it and it was a piece of genius at the time, though at odd times over the years we’ve changed our approach,’’ Lionel says. “However, there’s a lot of equity in the tune as well as the words and I don’t believe anyone else in the world uses the tune like we do. It has worked well for us and its value to the business has grown substantially with its use.”

And don’t forget that this has been created inside a hotly competitive market with big names such as Harvey Norman, JB Hi-Fi, The Good Guys and Clive Peeters, to name but a few. However, in business, as in sport, you don’t become a champion playing in B-grade. G

30 Grow Your Business

Brand power When a family name is the business name it means the marketing has to be used wisely, as what hurts or helps the business can also do the same to the family.

The family name is an asset of incredible value and the Lees have marketed it and managed them like inseparable twins.

“My dad, Ken, died [in] 2007, aged 72. He was a tough but fair businessman,’’ says Bing Lee chief executive Lionel Lee. “He taught me a lot about the importance of family values in business. He taught me to treat our staff like part of the family, our loyal suppliers like part of the family, and as far as is possible, to treat customers like part of the family.”

The Lee belief in creating a family-like link to key partners even extended to the early relationship the management team had with Eric Idle in securing the rights to the famous Monty Python ‘I Like Chinese’ song.

Though the business agreement over the use of the song is now negotiated by agents, originally the deal came out of one-on-one meetings with the great Monty Python star, who wrote the song.

When you look back at the Bing Lee story, there has always been a strong engagement with people who the majority can relate to.

Its ads have always been easy to relate to, but this also brought some challenges. As the voice of Ken had been an important part of Bing Lee advertising, on his death another family member faced an unexpected challenge.

“When Ken died we had to make some important decisions,” Lionel says. “The decision to have Ken become the face and voice of the business was made less than 10 years ago, under the guidance of Barry Anderson [head of Grey Advertising].”

Anderson had always argued that the owner of the business would be more credible than anybody else and the Lee family agreed, but who would it be?

“The two or three months after Ken’s departure were difficult, in more ways than one,” Lee says.

“When we spoke to Mum, Yenda, about representing the business publicly, she was at first reluctant, naturally so. However after some stern persuasion from Barry and myself, she agreed.

“Mum understood what it meant for the business.

And Mum, like Dad, would do anything if it was good for the business.

“As I said before, the business and the family are inseparable.”

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Feature Staff

a working force How can you turn your good business into a great business? One of the standout characteristics of high calibre, high growth businesses is their employment policy. Hiring the right people is so important for your business.

Words Maureen Jordan

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orking with a team of graduates for around 15,000 hours, Jim Collins’ research team found the majority of companies revealed that it wasn’t hiring the people for the job so much as hiring the right people. And, unbelievably, these companies saw the people as being even more important than the vision and strategy.

“We found, instead that they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats,” Collins revealed in his book Good to Great. “And then they figured out where to drive it.” staff questions to consider 1. Do you have a problem finding great employees?

2. Are you using professional methods when hiring, that is, are you taking a systematic approach to hiring, training and developing staff?

3. What kind of structure or formality do you have in your employment practices?

4. Do you have a staffing plan with a budget? There are costs associated with leading and managing staff.

5. Are your human resources (HR) practices aligned to your overall business strategy? Your organisational chart should be one of the first things that you refer to when the decision is made to hire another member of staff. This begs the question – do you have an organisational chart that is updated if or when your business plan is amended?

6. Do you recruit using unimaginative, informal and ad hoc methods such as word of mouth or newspaper

31 Grow Your Business

advertisements? The reliance on ads – newspaper or internet – and the unwillingness to use recruiters can often be driven by a cheapskate mentality and can often be a case of false economy. Having said that, be careful of recruiters. In our business we use recruiters for key positions that need certain expertise to find these people.

7. Do you interview candidates without using a written list of skills and qualifications in the selection process?

8. Is your inability to attract skilled workers impacting on your business viability now and in the near future?

9. Can you improve your HR practices to maximise the investment in their most important asset – your staff?

10. Do your staff know what is expected of them in the workplace?

11. Do your employees have the tools they need to perform their jobs?

12. Do you praise your employees for doing good work?

13. Does each employee have a manager who encourages their development?

14. Do you value the opinions of your employees?

15. Do your staff know the vision and mission of your business?

16. Are you giving employees opportunities to learn and grow in their careers?

17. To what extent are you sharing information about the company with your staff? get recruitment right Unprofessional bosses with poorly planned staff-handling practices can undermine business growth. Given how important top staff are to business success, anyone trying to grow a business with a half-baked recruitment strategy is a liability to themselves and a burden to others. G

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Feature Staff

ENGAGEMENT TIP 1 As a leader, build up your employee’s interest in your products or services and the impact that your business has on your customers’ businesses. Create an inclusive team feeling in the workplace and make your employees feel valued. When your staff show enthusiasm for the work they are doing, tap into their enthusiasm.

Encourage them to approach their work tasks with the same intensity, energy and enthusiasm they put into their outside interests! We all spend too much time in the workplace to approach it any other way. Always give clear instructions, training and keep them busy!

As your business grows and you put managers in place, the bulk of this responsibility will go to your managers who are key players in your business. This means your managers deal with employees and then report to you. It is your job to ensure that you have fully engaged managers. As business coach Lesley Ann Grimoldby says: “Your employees are a reflection of your own leadership and management skills. Put your skills under the microscope before you complain about staff performance and retention challenges.”

ENGAGEMENT TIP 2 Gen Y is probably the most educated generation in employment history, and being stimuli junkies, they’re fast learners.

They’re collaborative at work, as they see this as key to getting work done, and done quickly. Often this can result in lack of accuracy, which needs to be consistently pointed out.

Generational recruitment expert Avril Henry says Gen Y are the most over-stimulated generation. “This means they are easily bored, impatient, intense and therefore great multitaskers. They are also enthusiastic about the things that interest them, and if they feel ‘included’ and valued at work, they will approach their tasks with the same intensity, energy and enthusiasm they put into their outside interests.”

Pessimism and criticism will have Gen Ys running a mile (and not returning) before you worked out what happened.

They want to work with people who love what they do and are willing to teach them what they know, and share their knowledge and experience.

Always answer their questions openly and honestly, ask for their opinions and views, and be prepared to listen, and just possibly change your behaviour and way of thinking – if you want to keep them! You may find their ways frustrating but at the end of the day to get the best out of them, provide them with firm and fair leadership.

32 Grow Your Business

“Make sure you acknowledge an employee’s strengths and always encourage them to play to those strengths.

If you want to keep staff, you have to offer them opportunities to develop their skills” Peter Switzer

employer’s 10-point checklist 1. Do your sales people really know your clients and are they developing solid relationships with them or merely flogging products?

2. Are you training management and staff regularly?

3. Do you see this as an investment in your business?

4. Are you empowering your staff to make them feel they can make some decisions in the business and have a degree of ownership?

5. Are you paying and rewarding your employees adequately?

6. What kind of atmosphere have you created? Is it a friendly environment where people are happy working and feel valued?

7. Are you training staff in the way your business systems operate?

8. Do you staff know what role you play in the business?

9. Are you learning to delegate tasks and trusting that they will be done as well as if not better than the way you do them?

10. Have you defined the culture of your business so you attract people within that culture?

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Feature Risk

lift your game There are key responsibilities that as a business owner and an employer you must manage effectively, ranging from the safety and wellbeing of your staff, to adequately preparing for any unexpected events that can harm your business’ viability.

Words Peter Switzer

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o small business story can be more tragic than the case of the poor young girl who committed suicide as a consequence of bullying in a Melbourne café. And it brought calls for an end to the ‘Gordon Ramsaying’ of workplaces in the hospitality industry.

However, in truth most businesses need to de-Ramsayfy themselves. If it’s not the boss, it’s someone down the management hierarchy tree who’s letting loose with disgusting tirades.

Usually the most tragic small business story imaginable is a case where a good business goes broke and the entrepreneur is not responsible. The pilots’ dispute of 1989 was a case in point, where many business builders could never have imagined such a long strike could crush their cash reserves and their business.

Given what has happened at this café, it would be surprising if this business can or should survive.

The four men were fined a total of $335,000 over the persistent bullying of a young waitress who could not take it anymore.

The humiliating acts against her were barbaric and when this sort of thing goes on, the buck has to stop with the person who signs the wages cheques. This was not only an occupational health issue, it was a risk management challenge and a complete failure of leadership. It underlines what can go wrong in any business that is unsystemised, which is the common characteristic of most small businesses. Typical bosses are technically good at what they do but when their businesses grow they need to learn to manage and lead. They need more to work on their businesses rather than just working in them.

Michael Gerber, the author of The E-Myth, says so many proprietors’ businesses are owner-dependent, which means

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they really don’t own a business but just have a job with a maniac for a boss.

This over-reliance on key men or women creates stress, bad decisions and the antics that Gordon Ramsay has made famous on his TV shows. These outbursts reflect how poor his training systems are and how second-rate his recruitment systems are. But many bosses are in the same boat.

Let’s imagine that the boss at the café in question did not know bullying was going on, well that’s systems failure. Of course, if the boss did know, then it’s criminal and it does break the law – hence the hefty fines. However, even without knowledge it violates occupational health and safety obligations.

Under the Occupational Health and Safety Act 1991, employers are responsible for systematically addressing the risks of workplace bullying in their workplace. This includes applying a risk management process to identify and control incidents of workplace bullying.

Business owners who yell at their staff set up the demonstration effect, which says that this is the way management deals with frustrations. This creates a culture of bullying, undermining productivity and disengages staff. It is failed leadership.

It comes down to you US leadership expert John Maxwell, author of Leadership Gold, says leaders aren’t born, they can grow and it never stops.

“Leadership develops daily, not in a day,” he said. Maxwell also argues that you often need an objective set of eyes to help you to confront the brutal truth and to grow into leadership.

It’s too late for the poor young girl who took her life, but let’s hope other business owners recognise their leadership responsibilities as an employer and they take steps so we never hear about a similar small business tragedy again. G

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Feature Risk

in the driver’s seat of an airport parking business

Business owners who yell at their staff set up the demonstration effect, which says ‘this is the way management deals with frustrations’. This creates a culture of bullying, undermining productivity and disengages staff Prepare for surprises A lot of businesses fail to prepare for surprises and sometimes it can lead to business for things that can happen out of the blue. No one can predict the future, but you can prepare for it.

John Borghetti, CEO of Virgin Blue, spoke of the risks on Peter Switzer’s Sky News Business Channel program, SWITZER. “There are many industries that operate in a tough climate,” Borghetti says. “The basics are all the same – you are hostage of, or challenged by, the major themes of any business – competition, the environment you’re in, the economic situation, the fuel price, the currency hedging. But they’re all things you know will affect the business. The real question is how do you prepare for the shocks?”

The lesson is clear: while precisely predicting an X-factor is beyond most businesses, being prepared for bolts out of the blue is an essential part of a sound business or investment plan.

Leanne Preston, founder and CEO of Wild Child, knows what’s it like to experience a business crisis or two. “We had one of our manufacturing facilities burn to the ground so we lost all of our stock, and the second issue for us was that we were supplied with leaky bottles. In those very early days, you really are vulnerable and we lost more than half a million dollars worth of stock. Those sort of issues are really difficult.”

How well could your business stand up to a sudden crisis?

34 Grow Your Business

Andrew Shanahan had little choice but to set up his own business – the entrepreneur reckons he cannot work for anyone else.

Starting with just one other staff member, Andrew’s Airport Parking opened for business in a small warehouse near Melbourne Airport at 8am on September 1997 when Frank Halim drove in and asked: “Am I in the right place? I’m looking for a car park.”

There were doubters. Early in the peace, a group of managers from Shanahan’s former rental company dropped in to see what their old colleague was up to.

Shanahan recalls the moment: “I overheard them say: ‘He’ll be broke after three months – he’s got no idea.’ This was one of the best things that could have ever happened as it drove me even harder to succeed.

Those managers are not laughing at me anymore!”

Thirteen years after launching a company without partners, money or clients, Andrew’s Airport Parking is one of the three largest operators in the off-site airport parking industry and his business has been growing at an exponential rate.

When Shanahan started the business, he had no customers, only 50 car spots and one staff member.

Success did not come overnight. As Shanahan recalls: “I didn’t pay myself for the first six months and worked in most cases seven days a week between 15 to 20 hours a day as I had to conserve money where I could.”

His darkest days were about nine months into the business when the landlord of the warehouse he was partially renting found a new tenant who wanted the entire building. An ugly legal battle eventually led to Andrew’s changing premises at the end of its lease, upgrading from a monthly rent of $3,500 to $10,000.

Shanahan admits the business was earning nowhere near enough to sustain that bill.

Rather than fold, he just got bigger.

“Six months after the move we were breaking even and the rest is now history,” he asserts proudly.

Surviving that challenge convinced Shanahan he is in business for life. “I came to the realisation that I was meant to run my own business,” he says. “I discovered during the tough times that it didn’t matter what problem was thrown at me, I’d solve it.”

Shanahan’s experience begs these questions for other business owners: do you have a current lease in place that will support your business over the long term? Has it been adequately checked by a solicitor?

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in brief Business protection

safe from harm Words Andrew Newton Brown

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here are many risks facing your business, that, if not properly prepared for in a welldocumented business and insurance plan, could seriously affect the sustainability of your business. So, get on top of your game and put measures in place to protect your business and your livelihood. Plan for these five risks that can affect your business.

1. Not being properly insured If your business is affected by a fire, flood or robbery and you’re underinsured – which means you’ve not taken out adequate coverage – you may end up paying more for repairs or replacement goods than you would have by making premium payments that properly covered you in the first place.

Set aside some time to work out whether your business is properly insured and also do the research on all applicable policies available to make sure you get the right deal.

2. Not protecting your intellectual property (ip) This doesn’t just apply to other businesses stealing your IP. You may need to have confidentiality agreements in place with your staff in case they leave and start their own business using your data or information, etc. Go to www.ipaustralia.gov.au for more information. On that note, check you’re not infringing another business’ IP. This could also put your business at risk.

For example, before you start using a business name, check it doesn’t infringe on another’s IP. Two young Australian women, Thelma and Louise, wanted to start up a new café. It was a great idea and they thought they could use their own names – Thelma and Louise. They learnt the hard way. Lawyers representing the film studios, which owned the IP attached to the film, told them they’d have to change their name or close down the operation. Sure, the café could have continued with another name, but just imagine if they’d spent a large amount of money marketing the brand.

35 Grow Your Business

3. Not implementing systems A lot of business owners don’t have systems in place. Are you worried about whether your business is operating smoothly when you’re not there? Are you explaining things over and over again to employees? Are employees taking too long to complete tasks or confused about how things should be done?

If the answers are ‘yes’, then you need to introduce systems into your business. This is basically a set of instructions that spells out exactly how to complete a task. For example, if you want staff answering the phone in a consistent manner, then write a system on just that. This will also create a more professional atmosphere in your business. For great information on how to create systems and get your business working more smoothly, head to www.bizthinktank.com.au 4. Not having cash flow under control Sure, it’s hard to get debtors to pay up sometimes, but this is something business owners need to get tough on. Put aside some time once a week to call all your debtors. Don’t stew on it and leave it to the last minute. And if you can’t get tough, or just don’t have the time to be making the calls, consider getting in a financial controller who can, even if they only come in once or twice a week. Also ensure your payment terms are clearly laid out on invoices and that they are reasonable.

5. Relying too much on one person This is called key person risk. This person may or may not be the owner of the business. Often businesses can be too dependent on one person, and if this person were to leave, then it can become difficult, if not impossible, to operate the business.

Remember, it takes time to train up any staff member. A key person can be hard to replace in a short period of time, and this can have detrimental effects on your business and your bottom line. Continually review your business to make sure it isn’t overdependent one person in one particular area. Also ensure you have a succession plan in place. G

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In brief Intellectual property

intellectual property (IP) news Words Courtesy of the team at Griffith Hack

1

Across the world, businesses are trying to incorporate connotations into their trade marks as being climate friendly. This poses challenges, as trade marks containing the words ‘green’, ‘clean’ and ‘eco’ are subject to the same assessment of distinctiveness as for any other trade mark not claiming green credentials in the product or service. Unless there are other distinctive features in the mark, it is likely that trade marks containing the word ‘green’ will encounter a descriptiveness objection when examined by the Trade Marks Office. Trade marks that do not have a significant degree of inherent distinctiveness can be difficult to enforce once registered. Focus on getting your trade mark right at the development stage.

3

The Federal Government has proposed changes to the research and development (R&D) tax concession, which include: replacing the existing 125 per cent (175 per cent in some circumstances) tax offset concession with a two-part arrangement – a 45 per cent refundable tax credit (equivalent to a 150 per cent tax deduction) will be provided to small firms with a turnover of less than $20 million per annum and a 40 per cent non-refundable tax credit (equivalent of a 133 per cent tax deduction) will be provided to firms with a turnover of $20 million or more per annum. The government has doubled the R&D expenditure cap for companies claiming the R&D tax offset from $1 million to $2 million per annum. The R&D tax offset is available to companies whose R&D expenditure exceeds $20,000, but whose grouped expenditure on R&D is not more than $2 million per year, and who have an annual group turnover of less than $5 million.

36 Grow Your Business

2

For many companies, the GFC was the trigger for a large cut in IP spend. The danger in de-prioritising an IP strategy is that companies may lose potentially valuable IP. Commercialisation Australia is rolling out a new program that provides up to $50,000 for specialist business advice and services including IP management – so now is the time for small and medium companies to dust off their IP strategy and reinvigorate their IP spend. Eligible expenditure includes fees for the cost of filing a patent application, patent search and examination fees, and annual patent maintenance fees. This provides a welcome boost to many businesses that have much to gain from a strong and proactive IP strategy, particularly in the face of strong competition both locally and abroad. Contact www.commercialisationaustralia.gov.au to discuss your eligibility.

4

The Supreme People’s Court of China has implemented a reform to prevent ‘forum shopping’. Previously, a third party (ie. Chinese) infringer could, on receipt of a ‘Cease and Desist’ letter, immediately apply to an obscure court (such as a local, inexperienced District court) for a declaration of non-infringement, forcing all subsequent proceedings to be conducted in that court. Now, the third party has to wait one month after it replies to a patentee before it can file such a declaration. This gives the patentee time to proceed in the court of its choosing, while putting the infringer and its customers on notice.

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In depth Murray Goldschmidt

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In depth Murray Goldschmidt

when opportunity knocks Words Renée Carl Photography Wilk

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nformation security in the corporate world is big business.

And it’s business that aptly named Sense of Security is well placed to cater for. “I took my first job in a company that was a specialist firm in managing firewalls for corporations,” recalls co-founder and chief operating officer Murray Goldschmidt. “Firewalls then were still a black art.

From that point on, I’ve never moved away from the sector.”

After emigrating from South Africa in 2000, Goldschmidt discovered an opportunity in the market while working at his first job in Australia. The gap, he says, required a company focused only in information security and risk management consulting.

His then-colleague Jason Edelstein became his business partner after the duo decided to create Sense of Security in 2002 to fill that gap. “We took a hobby and a passion and turned it into a business,” says Goldschmidt.

Like most start-ups, there were a number of challenges in building brand awareness. “We recognised long ago that we’re not only an information security business, but a relationship business – and when operating in a field as niche as ours is, this places even more emphasis of the importance of a healthy relationship,” he says.

Sense of Security is Sydney-based, with another office in Melbourne and soon-to-be-established offices in WA and Canberra. “Our growth has been pretty stellar and we’re doing everything in our capacity to make sure we can continue to deliver high growth, but at the same time, keep focused so that we can have a profitable business at all times.”

This success has received industry recognition too, including a Deloitte Technology Fast50 listing in 2008 and 2009, a BRW Fast 100 listing in 2009, as well as the The Optus Award for Fastest Growing Small Business in the My Business Awards 2009.

Great businesses, ultimately, come down to great leaders. As a business leader, Goldschmidt describes himself as “tenacious”.

“I’ve identified that’s very important to having a successful business! Business doesn’t just land on your doorstep, you’ve got to go out there and fight for it.” G

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Steps for recruitment success One of the main issues Goldschmidt has experienced with a rapidly growing business is finding the right people. “Every recruitment agent has been knocking on our doors – and certainly I can’t take all their calls, it’s just not time efficient. So we elected to work with a select few agents across the various disciplines we recruit for.”

Goldschmidt highlights that while his staff are highly technical, they also need to be sales representatives for the business. “It’s difficult to find people who share the same dedication and motivation as we do, and who are also highly talented as well. We’re looking for quite an important mix in the people that we hire.”

There are, of course, strategies to get hiring right, which have helped Goldschmidt. “You have to identify what your core values are, and ensure throughout the interview process that you can determine if those people are going to live up to your expectations and be able to deliver to your core values. If you can make that assessment throughout your interview process, and ours is quite lengthy, then you’ve got a higher chance of finding the right candidate.”

With 12 current employees, Goldschmidt is committed to engendering a culture of passion and enthusiasm among the team.

“We love the space we’re in, we love the technology, we love the fast paced nature of the business that we’re in, and that gives us the excitement and the motivation to come into work. Personally, I get a lot of satisfaction in having established a business that is profitable; I get satisfaction in giving other people the opportunities to enjoy the ride with us and see those people develop their careers in our business.”

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In depth John Symond

Pictured left to right: John Symond (Aussie founder), Stephen Porges (Aussie CEO) and James Symond (Aussie executive director)

39 Grow Your Business

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In depth John Symond

the Wizard of Aus Aussie executive chair John Symond is a home-grown version of Virgin founder Richard Branson.

They both took on the big boys, promised lower prices and, in the process, built unforgettable brands, possibly only rivalled by their own high-profile, indelible public personalities.

Words Peter Switzer Photography Wilk

T

he John Symond Aussie Home Loans story is one based on a businessman determined to succeed by forcing change on one of Australia’s most over-charging and uncompetitive industries.

His upbringing was important. “I was fortunate that I was brought up in real working-class Australia,” he says. “I went to 11 schools and that was because my parents were in the fruit business. They opened up a little fruit shop and every 12 months or so would move on after building it up and making a profit.”

Symond thinks this gave him an advantage that helped him grow his brand and business. “When I look back, I think it was positive being forced to embrace change at such a young age in primary school,” he says. “After the first two or three school changes I realised that probably next year I’ll be at a different place, new schoolmates, new teachers, new house and that made me embrace change as a youngster; the majority of people find change really uncomfortable.”

The Symond kids worked after school and on the weekends in the shops, but after John finished school he went to university to become a dentist. “My father wanted that and I hated it,” he says. “I finally got my own way and did law at night and worked in a legal firm as an article clerk during the day.”

But even at an early age, Symond was giving into his inherited entrepreneurial spirit, developing apartment blocks with a cousin while at university. The 15 years in law working in property gave him the insights to see what his competitive advantage would be, which is critical for growing a business.

He even learned something that made him ready for the credit crunch. “I learned during those years that there were credit squeezes,” he says. “That was an important lesson.”

40 Grow Your Business

He also learned a lot in the 1980s when he nearly went bankrupt. Setting up a financial advisory business focused on property, he went into partnership with a fully-owned subsidiary of the then State Bank of South Australia, which was owned by the South Australian government. It went broke, but it wasn’t all bad news. “In those days I was very naive and I didn’t think I had any need for advisers. The small banks like the State Bank of South Australia were trying to take on the big, commercial banks and ultimately went broke, and I never, ever thought that a government-owned bank could go belly up,” he says. “I was facing bankruptcy and that drove me to come up with a way to make it easier for mums and dads to afford home ownership.”

Symond says the banks were getting a 400 to 500 per cent profit margin over cost of funds on housing.

“That’s when I came up with the idea of Aussie, to try to give people a fair go. Miraculously, without any backers or money, and facing bankruptcy, I came up with a way to eventually launch Aussie, and the rest is history,” he says.

Paving the way Starting in the post-recession year of 1992, Symond called in favours. He secured premises for two years rent-free and he asked for repayment terms of up to 60 days, from conveyancing lawyers and valuers to help beat the cash flow challenge.

“Of course, those 30- to 60-day creditors blew out to 180 days and some hit a year, but they all did very well in the long run because they got thousands of instructions,” he says.

But where did a near-bankrupt get money from to lend?

“That was very hard because I had to go to non-retail financial institutions and my first break was Primary Industry Bank of Australia, which concentrated on rural lending and didn’t have shop fronts,” he says. “I had to come up with a risk-free offer

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In depth John Symond

that was too good to let go and I achieved that after persisting with the then Housing Loans Insurance Corporation of Australia (HLIC), which was then Commonwealth Government-owned – and AAA rated – I really hounded them.” His loans with insurance made his business virtually risk-free and then all he had to do was convince the borrowers of Australia. That’s where Macquarie Bank was important. “We partnered with Macquarie in 1994 to be the first to introduce securitisation of home loans that could go to mums and dads in suburbia, which took three per cent, or 300 basis points, off the cost of mortgages,” Symond says. “Other mortgage originators started a couple of years after we began. RAMS then followed and later Wizard and a whole industry was born – through what we started.”

Consumer champion The new competition resulted in the Commonwealth Bank shocking the market in 1997 by dropping interest rates by about 250 to 260 basis points in one hit. “Every building society and housing lender had to follow and that was the biggest single turning point for consumers in decades,” says Symond.

Aussie Home Loans led the way for competition, but the brand and business was also grown by one of the most enduring doit-yourself marketing campaigns in the country’s history. Symond fronted his own ads and his legendary ‘At Aussie, we’ll save you’ has become as memorable as ‘Not happy Jan’ and ‘Meat pies, kangaroos and Holden cars’. But the latter were ads from big businesses; Aussie John was a small business. Unlike many small business operators, he was smart enough to hire a public relations consultant and then went after his rivals, big time.

“I had no money to advertise, so I learned all about marketing myself – this was by default, not a plan – but because my story was so controversial and it was what consumers wanted, it worked,” he says. “There wasn’t a newspaper in the country, or a current affairs show that didn’t want to understand the story better. I found then the value of marketing yourself and being honest and, yes, controversial.”

With the business growing nicely but some challenges emerging, Symond again embraced change eight years ago.

Recognising consumers were changing, he turned Aussie into a mortgage broker, which meant he would be offering his own loans as well as those of his rivals. He was also concerned about the securitisation market and this decision saved Aussie from the fates that befell RAMS and Wizard with the onset of the global financial crisis. “I doubted whether securitisation pricing would be able to compete when banks were ultimately forced to halve their margins again and I wasn’t clever enough to predict the global credit crunch,” Symond says.

Today, the operation has more than 150 shopfront outlets and oversees $34 billion worth of business, and the Commonwealth Bank has a 33 per cent stake in Aussie. Symond’s parents could not help but be proud of that quite substantial Aussie battler. G

41 Grow Your Business

In brief: aussie, aussie, aussie Aussie Home Loans has grown exponentially since its inception in 1992, with a loan portfolio now worth more than $34 billion and 800 mortgage advisers across Australia, following Aussie’s acquisition of Wizard Home Loans in early 2009.

Joining John Symond at the helm is his nephew and executive director, James Symond, and CEO, Stephen Porges. John Symond shares some thoughts on business below: Best piece of business advice you’ve been given?

“Listen to customers.”

And the worst? “Buy horses and boats.”

Most frustrating part of doing business: “Trying to manage business partnerships, as you do a deal with people, then people change and all of a sudden there’s a different focus.”

Favourite marketing technique: “Meeting people in the street and taking the time to listen.”

Business leader you most admire: “There are a few. Harry Triguboff, Frank Lowy and Richard Pratt.

These people all started with nothing.”

“We partnered with Macquarie in 1994 to be the first to introduce securitisation of home loans ... which took three per cent, or 300 basis points, off the cost of mortgages”

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Feature Marketing

let’s stick together To give your brand the competitive edge, ramping up your marketing should be high on the agenda. Identify the most promising opportunities and the best way to serve your clients needs to create a stellar brand-boosting campaign that resonates with customers.

Words Renée Carl

W

hen it comes to boosting your brand, in the words of marketing guru Peter F. Drucker: “The aim of marketing is to know and understand the customer so well the product or service fits them and sells itself.”

You need to highlight to customers what makes your business different, not what makes it the same as all the others in your industry. This, according to Iggy Pintado, CEO and chief networking officer of ConnectGen, is where the importance of your brand’s value comes in.

“The main differentiator in modern markets isn’t price or packaging – it’s the brand,” he says. “The brand needs to resonate with its audience in order to ‘cut-through’ the noise from competing brands in a cluttered marketplace.”

If you don’t believe this, Pintado urges you to walk down the drinks aisle of a large supermarket and see the range of branded bottled water. “Remember, this is a product that can be obtained for a fraction of the grocery product price from a tap at home, yet comes from a variety of brands!”

Australian-based marketing expert John Lees says you must remember it’s not about what customers want, it’s about what people need. “Remember, customers are people … or if you like, they don’t go home at night to ‘customer land’. The lesson then is to treat customers as people, rather than to treat people as customers. Customers may know what they want, but they rarely know what they need.”

The key point for your marketing strategy then, says Pintado, is a combination of meeting a precise need at the most appropriate time and place. “In keeping with the bottled water example, if you’re walking around the city on a hot day and you’re thirsty,

42 Grow Your Business

almost any brand of water will meet your thirst need. However, if you’re dining in a five-star establishment, your preference for bottled water will probably more likely to be a premium brand such as Perrier or Evian. The need would suit time and place, plus occasion and location.”

FilL the gap So what makes someone opt for a Mount Franklin over a Fuji?

As Pintado would argue, it’s the strength of the brand and its perceived value. It’s your point of difference that’s going to give you a competitive edge, which needs to be advertised in all your customer communications.

“If you want to stand out from the crowd, you need to highlight what makes you unique and then use that to your advantage,” agrees Sylvia Wilson, co-founder of Bark Busters, a dog training business created in 1989 that has made big inroads in Australia and internationally through its franchise system.

A customer-centric focus is, of course, crucial.

Bark Busters, for example, offers a ‘life of the dog guarantee’, which is clearly visible on the home page of their website. The guarantee can be redeemed anywhere in the world where there is a Bark Busters and if the dog is re-homed, the guarantee goes with the dog. “In the US and Japan, that was a very important point of difference as that made new customers feel comfortable about doing business with us, a new emerging company in that country,” says Wilson. In addition to the US and Japan.

Bark Busters now has 37 offices in Australia, plus offices across New Zealand, the UK, Europe, Canada, Israel and Taiwan.

So what was the key to success in marketing their business and building a reputable brand? “We had our vehicles signwritten with our company logo. We were one of the first to be really bold with sign writing. Our logo was very colourful with a

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Feature Marketing

large doggy paw print within the logo. You could see people standing at bus stops as we went by, mouthing ‘Bark Busters’.

Cars would beep and ask for leaflets and business cards.”

In addition, having a visible link to the Bark Buster’s brand via staff has been a big brand building strategy. “Our people are encouraged to wear their uniforms while out shopping,” says Wilson. “Our US master franchisees would wear uniforms with logos on the front and back when we first launched into the US. They would tell us that people would tap them on the back while they were going up elevators or walking down the street, asking them if they could have their business card.”

It’s a strategy that has proven to be very valuable for Bark Busters. “We are now the largest dog training company in the US after only six years of trading and a lot of this was down to our aggressive approach to sign-written cars and our company image,” says Wilson.

“The important thing to remember in any business is that the company logo or trademark must contain accompanying info that clearly states what that company does,” she adds.

So what are some other key strategies businesses in a growth phase can apply? “Use communication in both marketing and PR campaigns that are consistent with brand values,” recommends Pintado. “And,” he adds, “let other third parties recommend and endorse your brand publicly. A good rule is to let your customers and partners do the talking – they’re in the most credible position to speak to a brand they’ve made an investment in.”

In addition, don’t underestimate the value in asking your customers for a referral. If they liked your service or product and were satisfied with the job you did, ask for a testimonial, or for a business referral.

And to take your marketing to the next step, you could also consider engaging an agency to help ramp up marketing.

“An effective agency engagement should begin at the business strategy review phase where the agency is part of the planning process from the beginning,” says Pintado. However he, cautions, “an agency should only be engaged if they can add value to both the offline and online marketing plan as well as a multi-channel strategic go-to-market plan”.

If your budget doesn’t allow an agency’s fees, get reading, and learn from others in your industry, and keep on top of what your competitors are doing. As John Symond, founder of Aussie Home Loans says on page 48, “I had no money to advertise, so I learned all about marketing myself – this was by default, not a plan – but because my story was so controversial and it was what consumers wanted, it worked”.

How do you measure up?

Wilson says any campaign undertaken should be monitored and quantified to see what growth and exposure it achieved.

“This gives you a gauge as to the benefit of the marketing and will allow you to work out when you should commence your

43 Grow Your Business

“The main differentiator in modern markets isn’t price or packaging – it’s the brand. The brand needs to resonate with its audience in order to ‘cut-through’ the noise from competing brands in a cluttered marketplace” Iggy Pintado, ConnectGen

Networking tips Kristy Sheppard, senior corporate affairs manager at Mortgage Choice, shares her top tips for making the most out of attending a networking function.

• Before arriving, take a long, hard look at your image – ensure your presentation matches your desired image.

• Stock up on business cards – hand them to anyone you become engaged in a one-on-one conversation with, but don’t hand them out willy-nilly.

• Have your ‘elevator speech’ down pat – how would you describe your service offering in 30 seconds?

It’s less about your title and your business or the company you work for, and more about what your work entails; what value you add to your customers.

• Don’t worry about turning up alone – take a deep breath and go through in your head a range of questions you can ask people.

• Show consideration for the people you are networking with – ask open-ended questions and listen intently. Speak to as many people as possible.

• Keep a smile (as natural as possible) on your face, even if you don’t feel confident or happy.

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Feature Marketing

next campaign. We recommend an ongoing marketing strategy with six- to 12-months planned campaigns depending on what growth the business requires.”

Claire Linton-Evans, vice president of marketing and communications at Investec, says smaller companies need to understand the cost of finding a new customer. “If a mail-out costs you $2000, with a three per cent success rate, it’s still better than spending $10,000 advertising at a football game that generates no leads. It sounds basic, but many large companies can’t tell you what their return on marketing investment is.

“Measure the effectiveness of all your communications, and the cost of new leads; phone call campaigns; entertainment costs; vouchers redeemed and word of mouth. You’ll realise quickly what works and attracts customers,” Linton-Evans says.

Within reach In order to decide on the appropriate marketing outlets to reach your customer, Pintado’s advice is worth heeding.

“In an era when more people are spending time searching and researching online,” says Pintado, “it’s essential that a traditional ‘offline’ marketing presence such as print, TV and radio advertising, events and direct mail is complimented and enhanced by a purposeful digital web and engaging social media strategy that builds interest and interaction with the target community of prospects and customers.”

To reach your target market, Wilson recommends businesses focus on marketing initiatives through outlets that complement their business. “Bark Busters markets our service to vets, pet shops and grooming parlours, etc. Also, businesses should look to attending trade expos, lifestyle expos and to advertise in magazines that are geared towards their target market.

Businesses with a small marketing budget should look to forming a friendly alliance with other compatible companies to share the marketing expenses.”

An example of this is to hold an event for clients and pool your resources with another complementary, not competitive company. For example, a mortgage broker could hold a seminar, and invite a real estate agent and a valuer. The broker could provide information on interest rates and home loans, the real estate agent on property prices and market data and the valuer could provide information on the valuation process.

This not only adds value to the broker’s customers, but also is a valuable tool in gaining credibility in the market and encouraging the all-important word of mouth.

“Customers are fickle and forgetful,” says Linton-Evans.

“Simple ‘top of mind’ marketing techniques such as quarterly communications, Christmas and birthday cards and footy tipping helps established clients remember your brand, while the larger marketing spends – websites, advertising, promotions, collateral – help to attract and reinvigorate your potential and new client base.” G

44 Grow Your Business

The business builder Words Peter Switzer He burst onto the advertising scene when the world woke up to the threat of HIV infection and AIDS with his memorable Grim Reaper with bowling ball ad in 1987. His name, of course, is Siimon Reynolds.

Reynolds went on to become a celebrated, awardwinning ad-maker and founded his own company Love Communications, which ultimately rolled into the publicly listed vehicle called Photon Group.

So he’s not only a guy who knows a thing or two about customers to help his clients rake in the business, but he has actually successfully built a business himself.

Reynolds’ advice to small operators is insightful. For starters, he suggests that amusing ads have greater residual value with the target audience over more serious ones. Anyone who has used the line ‘Not happy, Jan’ knows the big impact of that Yellow Pages ad.

Reynolds thinks doing one form of advertising at a time means you can test effectively what works for you.

He recommends what he calls the ‘Lions Club school of marketing’. “The more collisions you have in the local community, the more [exposure you will get],” he advises. “The problem is many business people don’t actually schedule encounters with the community.”

Reynolds says you should look for networking events, turn up and sit at a table for 10 and, if you only did five meet-and-greet events last year, ramp it up to 20.

Reynolds is a big fan of local advertising, and advertorial-type features about you and your business are usually effective. “You can get more information into an article than an ad and people always believe in editorial more than ads.”

But don’t sit back and bask in your glory. “Once you’ve had an article or two written, you can photocopy them and use for a direct mail campaign. You can pay students $20 an hour, attaching the articles to a personal note.” The theory is that the ‘objective’ article in a newspaper establishes your credibility and gives your business more authority.

The final clue relates to ads such as Yellow Pages directories and online advertising. “Too many people make their business name and phone number big, but this is a flawed strategy,” explains Reynolds. “I can tell you what should be big in the ad – the reasons why someone should go to you! No-one cares about the name and the number but if you make them think you’re the only one they need, they’ll go looking for your contacts. They would be mad if they didn’t.”

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in brief Sales and marketing

One of a kind Words Andrew Newton Brown

I

f there is one thing the global financial crisis should have taught business owners, it’s that there are going to be good times and bad times. But how you operate your business during the downturn could mean the difference between riding it out and shutting up shop.

Marketing is of course important, but just doing it in the same old boring way most businesses have always done it won’t make a business stand out.

Why should I buy?

Many businesses have sales and discounts, but customer service expert Martin Grunstein argues the average person doesn’t believe in these. There are alternatives to the price discount game. This could be reassurance of the quality of the product, testimonials from satisfied clients, or even what the business is doing to give back to the environment or the community.

“It’s the job of the retailer or the seller to give people the reasons, otherwise they’re not going to make the sale,” he says.

Grunstein says he stayed at the Sheraton Princeville in Hawaii on a milestone birthday a number of years ago. “Everybody who gets there is tired – you fly to Honolulu, you take another internal flight, and then you’re driving a rental car around an island,” he says. When he arrived at the hotel, Grunstein asked the doorman where reception was. “He said: ‘Sir, you don’t want to go to reception’. And I said, ‘I don’t want to, but I have to check into the hotel’. He said, ‘No, we don’t work that way here’.”

The doorman had the car valet parked, then went to the computer, got Grunstein’s room number and someone to take them there and told them to unpack, relax and reception will come to the room in about 20 minutes. “When the lady came to check us into the hotel, I said to her ‘I mean no disrespect, but this is a Sheraton Hotel and I’ve stayed at a lot of Sheratons around the world, this is the first place I haven’t had to stand in a queue at reception for 20 minutes when I’m tired’. And she said, ‘You know, that’s what our new general manager thought the first day he arrived and he changed the system [immediately]’.

45 Grow Your Business

“I think there is a fundamental flaw out there in that a lot of people would not do business with themselves based on the way they sell, market and serve.” The lesson is to think laterally and do things that other businesses aren’t doing.

Would you do business with yourself?

So how do you work out if your marketing is up to scratch?

Grunstein says it’s a matter of asking, ‘Would you do business with yourself’?

One of his New Zealand-based clients told him about a retailer, in a factory outlet mall called Dress Smart in Auckland, that has a couch with a big sign above it that says ‘lost husbands’.

“There’s a coffee table with magazines on it that blokes like to read, and there’s a television with sport on it,” he says. “And do you know what the husbands say to their wives? ‘I don’t care how much money you spend, we’re going to one shop and one shop only’, and that retailer is making a fortune. All they’re doing is understanding and empathising with a customer need.”

He explains this is similar with the ballroom for kids at Ikea.

“Take the obstacle out of the way, and I don’t care how much I pay for the goods within reason. If the only thing I’m being given is price and discount, then obviously I’m going to go to the person who discounts the most.”

Be different Grunstein says retail is about being different.

“Walk through a shopping centre in any mall [and] you see 30 shops with ‘SALE’ in the window,” he says. “Every one the same as the previous one, and there are very few reasons apart from the discount to go in there. And it’s so easy to do.”

Business owners may give great customer service, but are they asking what they actually want? Most customers will, of course, answer ‘yes’ if you ask would you like something cheaper. “What you really have to do is empathise, and sometimes whether it’s a mystery shopper or whatever, it is to find out what it’s like from the customer’s perspective. Then, [you have to] deliver.” G

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In depth Philip Staub

46 Grow Your Business

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In depth Philip Staub

Coming of age The only way is up for Philip Staub, executive chair of the General Pants Group, who reveals the business’ ongoing success has been buoyed by its strong position in the youth market, where staying on trend means tapping into the interests of its core customer base.

Words Andrew Newton Brown Photography Wilk

W

alk into any General Pants store and you get the impression the business is dedicated to one thing. “We all live and breathe youth culture,” explains Philip Staub, executive chair of the General Pants Group, on how his company maintains its competitive edge. Staub’s background has always been in youth marketing. He started out managing dance parties in the 1980s as well as running nightclubs and cafés.

In 1995 he and his wife, Jackie Vidor, bought the General Pants Group. Vidor’s grandfather is the late industrial entrepreneur Victor Smorgon, whom Staub reveals had the most significant professional influence on him. “He only spoke profit,” he recalls. “Nothing else mattered to him.”

Avoid wipeout Acquiring a business can have its obstacles. When Staub and Vidor took over the General Pants Group, it was family-run and that did not have the basic requirements for growth. Staub says the major hurdle was making it professional.

“It was about looking at the overall structure of the business and determining the right structure to go forward,” he explains.

He adds that it was not about putting people into roles, but about what the right roles were.

They also introduced job descriptions, key performance indicators, annual reviews, succession planning, training plans and all the bits and pieces to remove loose threads and create a more systemised business that could grow.

Having systems in place before growing a business is vital.

“Otherwise you will always be catching up,” Staub advises.

47 Grow Your Business

To this cocktail, add planning as well.

“Everyone really needs [to know] what the strategic plan is for the business,” he says. “Everyone [needs] to be on the same page heading towards the same goal.”

Staub also wished he had known about the supply chain and “back of house” aspects of running the business before he started in it.

“All the stuff you don’t think is important until you realise you’ve got to have it.”

Systems must be of strategic importance in a business as big as the General Pants Group. The Group owns Surf, Dive & Ski, Jetty Surf and Billabong and has more than 70 fashion and surf stores nationally with around 1000 staff.

Staub says the best leadership decision he made was to get the business right before growing.

“The growth is all very exciting, but without the right structures in place, you don’t go anywhere”.

And what does leadership mean to him?

“Being a good listener,” he says.

Find the vision Staub advises it’s important to have a vision, but having the staff buy into the vision of the business is “everything”.

How do you ensure staff do that? Make sure they are actually part of creating it! Staub says it’s essential that staff understand the vision and that it’s communicated to them on a regular basis.

“It’s not just a one off thing. It’s something that needs to be brought out and discussed every three months at least for some of the staff, and the other members need to be working on it – the drivers.”

He also says the vision is always being updated. “Once you finish your strategic plan, you’re updating it straight away really.”

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In depth Philip Staub

And in order to keep staff motivated, the General Pants Group introduced staff financial incentive plans, as well as team training and social nights.

Working smarter The economic downturn affected many businesses around Australia but according to Staub, it didn’t affect the General Pants Group for long. “It did motivate us to look at how we do business and how we could be smarter,” he reveals.

Since the Rudd Government rolled out the first economic stimulus package to many Australian taxpayers back in December 2008, Staub says their experience of retail has been “pretty consistent and strong”.

“It was the unknown which forced us to really brace ourselves for what was to come,” Staub says. “So we became a better business just by implementing better systems, looking at our costs and structure and how to do things differently.”

“Profit doesn’t just come from increased sales. Profit comes from running a business in a smarter way.”

He believes there are still a lot of “unknowns” on the way.

“You’ve got to be ready to react very quickly.”

Keys to growth Another key to growth has been the introduction of business coaches and an advisory board. Staub has had a mentor coach for about five years.

“We try and have coaches for key people in the business. We also have a board which has been significant for the growth of our business.”

He describes the coach as like a business therapist as well as a development person – someone to talk with about what’s going on at both a business and an emotional level. “You can’t always do that with your boss because [the boss] might not want to hear certain things or some people don’t want to show their vulnerabilities. I think it really works.”

He explains that no one is going to tick every box and coaching is a way of rounding people out. “By having externals helping with the business, it just adds a lot more grunt, because you only know what you know [and] you don’t know what you don’t know,” he explains. “This way, it helps you see things different and opens your eyes to different concepts.”

And the key ingredient to business, according to Staub, is cash flow. “Many businesses have gone broke purely on cash flow,” he points out.

“We watch our cash flow on a daily, weekly basis. We have rolling forecasts for our cash flow. Every financial we do, we have the entire cash flow attached to it. It’s a totally imperative check of the business.”

So, what does the future hold for General Pants?

“Keep on doing what we do,” he says. “We have a lot of new stores on the go.” G

48 Grow Your Business

“It was the unknown which forced us to really brace ourselves for what was to come. We became a better business just by implementing better systems [and] looking at our costs and structure”

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In depth Neil Murphy

49 Grow Your Business

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In depth Neil Murphy

i walk the line Words Renée Carl Photography Wilk

N

eil Murphy’s career-changing moment came in 2004, at a time when the burgeoning world of telecommunications offered many opportunities for astute small business-minded people.

Murphy moved from his media role in electronic radio to work for Optus SingTel, when the telco giant was in the early stages of working with small to medium businesses (SMBs) to provide technology solutions.

After helping build Optus’ NSW and Central Coast channels, Murphy rapidly worked his way through the ranks to become a state manager within Optus SMB division. “They were exciting times,” says Murphy. “Our focus was ‘let’s go out and see the customer in their premises and let’s provide solutions for them that were both cost effective and also innovative’.”

At that time Murphy was newly married and living in Sydney, but looking for opportunities to move back to his hometown of Newcastle. When the Optus Business Direct Channel in Newcastle became available, Murphy jumped at the chance to apply. Despite a “long and arduous” tender application process, he was successful in taking it over nearly three years ago.

The local response to the service was immediate. “We could actually bring services like account management, someone to do your bill checks, someone to come in and quote your solutions for you, down to a level of business with 10 employees, so it really started to revolutionise the small business market.”

Later, Murphy acquired the Optus Business Centre on the Central Coast. With 13 employees, his role as director is continually evolving. “My role really these days has gone from looking after customers (which I still do today), to developing a team of good people under me.” Working more on the business is a priority. “I guess I’ve had to do that. I was always working in every part. I still clean the toilets though,” he laughs.

Taking advantage of opportunities is a key area that Murphy has capitalised on to date. “[The GFC] was one of our most

50 Grow Your Business

active times, because we were in there talking to our customers about cost saving solutions, new technologies that might increase productivity and trying to safeguard some of those things – so we really have that working relationship with them.”

Murphy says every six months, there has been a dramatic change in operations. “That has come about from our strategy of improvement, but also our growth in being able to get out there and actually win more business and provide more solutions.”

In order to facilitate this growth, marketing has played a prominent role and is high on the agenda. “There’s not many things I haven’t done,” he says. “From radio campaigns to press and electronic-direct mail. Having the power brand of Optus behind me, these days I’m really focusing on web-based marketing, via electronic direct mail.

Retaining his staff has been a key factor in this success. “My whole career I’ve been in sales and I believe that people need to be rewarded constantly for the efforts they do – that’s why obviously we work under not only commission structures, but we have some things that we call ‘qualitative goals’ to make sure people get paid for doing the right sort of behaviours that we want in a company.”

The best thing his business can do, Murphy says, is to be in front of customers and “make sure we’re professional and really use the word of mouth”.

Murphy is part business leader, part entrepreneur – and although he says he’s sometimes prone to over-analysing decisions, he’s not adverse to taking a risk to help grow his business. With systems being so crucial to his business, Murphy made the big decision to write his own software.

“That change was quite expensive and quite risky to do, but we actually cut a lot of expense in our business because it’s perfectly designed for our business.”

His advice for other business operators is sage. “If you want to grow, instead of focusing on competitors or things outside your control, you need to focus on what you can control internally and go for it!” G

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Feature Customer Service

all you need is love The customer might not always be right, but the key to growing a business is to stay on the right side of them. Consider this for customer service made simple: you might want their money (honey), but first you need their love.

Words Eleanor Glass

L

ove. It makes the world go around. It’s all you need. It’s a friendship caught on fire.

But what’s the difference between like and love? How do you go from ‘just friends’ to truly, madly, deeply? How can you take your most important relationship – the one between your brand and your customers – to the next level?

Kevin Roberts, author of Lovemarks: The Future Beyond Brands and CEO worldwide of Saatchi & Saatchi, says the secret to good customer service is to create a heart-stopping brand: you have to create a brand that people will love, a brand to which people will pledge their loyalty beyond all reason.

Author and brand adviser Paul Harmer uses concepts derived from Gestalt psychology to position the brand with the customer in a way that makes your brand worthy of affection.

But this is not something you can fake. Harmer says, above all else, there needs to be congruency between what your brand says it is and what it actually is. And at the heart of your brand or business is the experience of your brand, or customer service.

“In the end it’s really all about why people buy your products,” Harmer explains. “When a person comes into contact with your brand, your behaviour and actions, for example, can tell customers much about who you are, what you represent and whether you genuinely care about those people you are targeting. Meaningful authentic contact based on what a person is experiencing at the moment allows you to develop a deeper relationship and understanding with the customer and your brand’s overall proposition.

“Let’s face it, people like to do business with people and a brand they like and respect.”

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the power of value At the heart of good customer service is creating – and communicating – genuine customer value. This, says Harmer, is the key to growing a business.

“Unless we’re really in touch with, not so much the practical needs of the market, but also the emotional needs of the market, then it’s very hard to succeed legitimately long-term – even medium-term in business. It also comes down to sheer common sense,” says Harmer.

As companies grow, it’s all too easy to lose sight of the customer. But Harmer says that most important is how you commit to that customer, how you resonate with them.

A case in point: Harmer’s partner, Rita, recently went for a hair colour. Now, Harmer tells us, Rita knew she’d be shelling out $150 for the privilege, but she was pleasantly surprised she also got a glass of wine, of the variety and from the region of her choice, with cheese to accompany, as well as advice on how to maintain her colour between visits without an upsell and a 20 per cent discount for her next visit.

Needless to say, Rita has since passed on her colourist’s details several times over.

“Even though it’s simple, if we could all deliver that, and go beyond the experience that we normally give – which is usually mundane – you’ve got an audience that is going to promote your brand and tell the world how great you are.”

Something completely different US permission marketing guru and best-selling international author Seth Godin preaches that your point of difference is key to your brand: this is how you stand out in a crowd, just as a purple cow would stand out among a field of regular, made-to-order jerseys.

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Feature Customer Service

At the heart of Godin’s message is an urging to be remarkable, to innovate and have the confidence to own a brand that is uniquely your own. Clichés are clichés for a reason – it’s not what you do, but the way that you do it.

In the wine game, cellar door visits can often be akin to ordering fast food – fronting up to a counter to work your way through a list, only to spit the majority of it into a communal bin.

In the Hunter Valley, Keith Tulloch is a fourth generation winemaker, doing the cellar door a little differently. His label’s production is very limited, with a combined output of only 12,000 dozen per year. But this has not stopped his business growing or gathering a cult following.

Tulloch’s cellar door is a must-visit not just for his wine (specifically, the Forres Blend 2000, Cabernet Sauvignon with a dash of Petit Verdot and Merlot, of which there where only 350 cases made) but because of the set up – from a lounge on a wide veranda overlooking the vineyard, you work your way through the list – each generous taster brought by a staff member.

Tulloch says the reasoning behind this is simple. Common sense, even. “We only have a small bar area. Because of the shape of the room, it separates the tasting area from the sales area, so we can address each visitor in the right manner at the right time, and it slows down the tasting process and gives the visitor more time to consider each purchase,” says Tulloch.

“You need to consider that wine is usually consumed when the drinker is seated around a table, in a comfortable, relaxed environment. Our tasting experience is simply more in tune with their regular wine environment.”

Tulloch’s strategy has proved a success, encouraging visitors to stay longer, taste through the range of wines on offer, and, most importantly, return on a regular basis. “In the premium end of the market, great service is essential. Patient, well-educated and personable staff makes all the difference.”

Experience counts Harmer says it’s not so much about the customer service, but the experience.

“I think it was Confucius who said, “Tell me and I’ll forget, show me and I’ll remember, involve me and I’ll understand”.

And this need not cost the earth. When Tim Pethick kicked off his fruit juice company, nudie, he had little in the way of marketing budget. Instead, he focused his efforts (and what little cash he had) on product sampling.

Pethick used what the experts call ‘tribal marketing’ to build market presence and brand. Combined with an outrageous nudie character on purple vans – yes, more lateral thinking – Pethick embarked on a massive giveaway program.

But not only did potential customers score a complimentary bottle of juice, they were also given a flyer calling on people to take it to their local shopkeeper to request nudie be stocked.

52 Grow Your Business

A league of your own An important building block of business success is to think laterally, or as Edward de Bono would say, “outside the square”. The colourist didn’t need to stock wine, but she did – and a broad range of it – to ensure customer satisfaction.

This approach should apply to every aspect of your business, with marketing at the top of the list.

Why? It’s simple – this ‘out there’ thinking gives you an edge and will not only save your bottom line, but will ensure cut-through for your brand.

To show you how, let’s look at your customer follow-up process.

In the age of electronic madness, the old-fashioned hand-written ‘thank you’ note works a treat. The sterility of computer-generated envelopes (and, of course, bills) makes any hand-written communication a must-read for clients.

It’s a good idea to systemise this – set a certain time aside each week to write these notes. When it comes to customer service, consistency is key – this said, it’s a good idea to write a slightly different message each time to ensure there’s no double-up! So you’re doing something different. Tick.

But is this ‘something different’ building your brand?

To do this, it could be as simple as using paper or ink in your brand colour. A great example of this is the practice of Clinique’s founder and former chair, the late Carol Phillips (judging by Clinique’s international standing – not to mention sales – this is one woman who knew how to build a brand!).

“Her attention to detail was legendary – she even wrote her inter-office notes in Clinique-green ink,” wrote Leonard Lauder, chair of Clinique’s parent company, The Estée Lauder Companies of Phillips.

“She brought a fresh perspective and savvy creative sense to the cosmetics industry.”

In this way, Phillips proved it’s the little things that make a big difference – and you too can make sure you’re ahead of the pack with simple innovations.

Remember also that your brand collateral should not only build your brand, but should extend its reach.

A great example of a business thinking outside de Bono’s square is Tim Findon of Bondi’s Busby Hair.

A while back, Findon introduced Japanese translation cards to capture the attention of the tourist trade. And it proved a smart move – these camera-clicking clients have a yen for our iconic beach. You have to agree this was innovation with a capital ‘I’!

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Feature Customer Service

In this way, his customers bought into Pethick’s brand. This savvy strategy also meant nudie’s customers actually did a lot of nudie’s marketing (and Pethick could easily measure the result of his marketing venture).

To build your business, word-of-mouth marketing is invaluable.

This is made all the less labour intensive with the rise and rise of web 2.0 – you now have the seemingly infinite resources of social networking platforms like Twitter and Facebook at your fingertips. Getting your message out has never been easier – or cheaper! You can use this medium to offer discounts, let your customers know about new products and services, and as a valuable feedback tool too.

Remember also that your marketing collateral should not only build your brand, but should extend its reach. Pethick upped this buy-in on his branding collateral – on the side of each bottle was contact details for a ‘tell us what you think’ purpose; his website regularly ran competitions and published letters and poems. listen to your customers Harmer says no matter the size of your business, your customers – and your service to them – is the key to growth.

“You need to look at what’s happening in the market and what isn’t happening. Research your customers, talk to them, and communicate. Ask them, what is it that we need to do?

Swallow humble pie – put out a questionnaire saying what are we doing that you love? What are we doing that we can do better? Or, what aren’t we doing?”

Tulloch also believes feedback is key to great service.

“Because we spend the time with visitors and listen to what our customers are saying, we are able to refine our cellar door environment and the range of wines on offer.

“It is a very valuable connection between the seller and the buyer,” says Tulloch. “There are lots of messages, but the strongest one is that people like (and deserve) to be treated like professionals, and they are willing to pay more for better quality and better service.”

To create your very own lovemark, Roberts encourages all brand owners (that’s you!) to get out of the office.

“Your inspirational consumers won’t come to you – and they don’t live in the office down the hall,” he writes.

It’s important you understand what makes people tick (or, more importantly, buy!).

You can do this by another simple innovation – listening.

“Find someone who is loyal beyond all reason…” (this, says Roberts, is what you want people to be to your brand, just as he uses anti-dandruff shampoo brand Head & Shoulders even though he lost his hair long ago)… “to anything: a car; a hobby; a friend. Find out what makes it work and apply it to your business.”

After all, you’ve got to give people a reason to love you. G

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Customer service made simple Marketing guru Martin Grunstein once met a lady who had a great customer service experience when she bought a Lexus – the story was so great, it has followed Grunstein on the professional speaking circuit.

“She said she was test driving the car and the sales person was asking a lot of questions – some relevant, irrelevant, one of them was ‘what type of music do you like?’ She didn’t give it any thought until she took delivery of the car – sitting on the front seat of the car were $200 worth of CDs in her favourite music,” he says.

Grunstein asked the lady how many people she had told about the CDs in the last six months. She said around 100. He then asked how many people she had told about the car.

“Very interesting reply. She said, ‘No-one initially, but every person I told about the CDs wanted to know what car it was, and I told 100 people about how happy I was with my Lexus and where I bought it.’ And I said to her, ‘I’ve been trying to explain customer service for years. You just did it in 30 seconds’.”

“Swallow humble pie – put out a questionnaire saying what are we doing that you love? What are we doing that we can do better? Or, what aren’t we doing?”

Paul Harmer, brand adviser

www.switzer.com.au

In brief Entrepreneur snapshot

Stories of success Words Courtesy of the team at Switzer

Leanne preston Photography Emma Van Dordrecht Leanne Preston’s transition from single mother to savvy entrepreneur evolved from an unlikely source. When one of her children contracted head lice, Preston discovered there were only harsh chemical products used to treat the condition. After intensive research into botanical oils, she found scientific proof of their effectiveness against head lice. Preston devised a prototype – using a mixture of essential and plant oils – of the product that would eventually become known as Quit Nits, sold under her brand Wild Child. Quit Nits is now 14 countries, including the three largest retailers in Europe and the largest pharmaceutical chain in the US. “When you come up with something that’s innovative, and you’re the first, that gives you a great market advantage. There are good ideas out there, but you have to act on them and that’s when you have to believe in yourself.”

Simon johnson Simon Johnson is a business renowned for quality food offerings, but there is only one small ‘problem’ – the man behind the name is not an Australian, he’s a Kiwi (who recently became an Aussie citizen). With all the drive and commitment of those relentless All Blacks, Johnson built up a standout business in Simon Johnson Purveyor of Quality Foods – distributor, wholesaler and retailer of imported and domestic premium food products. The business started in 1989 servicing restaurants and hotels with boutique Australian farmhouse cheeses. It has grown to four retail stores in Sydney, one in Perth, three in Melbourne and one in Brisbane. “The success of the business has been that there’s an absolute focus on quality – we never deviate from that,” says Johnson.

54 Grow Your Business

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In brief Entrepreneur snapshot

In the zone Kylie Kwong has a dream business where – wait for it – people queue up for more than 30 minutes to get a seat at her restaurant. Customers who willingly put themselves out, and almost beg you to take their money, don’t happen by luck but more by you having your act together. In Kwong’s case, her business is no act. It is a part of her, and the vibes she has created in her operation are a reflection of not just the creator, but also the people she has attracted to her.

As she might say, it is all connected. And there must be something in this connective stuff, as Kwong not only has one of the most highly regarded eateries in the country, but she has her own ABC television show DVDs and regularly pumps out best-selling books.

Enough of this deeper stuff. Let’s analyse the making of Billy Kwong, the restaurant, and its entrepreneur owner, Kylie Kwong. She first came to notice working for Neil Perry at his Asian themed restaurant Wokpool for six years as head chef, before teaming up with another famous Sydney chef, Bill Granger, to kick off Billy Kwong in 2000. “It was Bill’s name and mine,” she says. “However, after eight months we went our separate ways as he was expecting his first child, so my mum, a retired accountant, joined me.”

The restaurant’s menu is based on traditional Chinese cooking but no monosodium glutamate (MSG). “Our ingredients are modern, being organic and biodynamic.” At the core of many successful operators is a desire to out-compete rivals, and finding points of difference based on the understanding of where trends are going often directs entrepreneurial behaviour. Kwong’s stance on ingredients is not just a point of competitive difference, but is consistent with her driving philosophy, rooted in Buddhism.

Like many success stories, Kwong has had the benefit of working in good company. The Perry experience and her training all prepared her to be something special. Accounting for her new millennium success, Kwong thinks the book and television exposure has been great for her reputation and the business.

“Being on national television means you are seen by 800,000 people who now know about a little restaurant in Sydney,” she says.

She has no plans to expand Billy Kwong, but it’s not a lack of ambition, as most experts would say it would work anywhere. But Kwong looks as if she is in the ‘zone’ and very happy with life and business. “They’re all connected,” she says. “And that’s really great.”

55 Grow Your Business

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In depth Bridget McCall and Nicholas Van Messner

56 Grow Your Business

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In depth Bridget McCall and Nicholas Van Messner

given to fly With a newly opened retail store and prestigious stockists around the world, Bridget McCall and Nicholas Van Messner, the Melbourne-based design duo behind fashion label LIFEwithBIRD, prove to be a cut above the competition.

Words Eleanor Glass Photography Scottie Cameron

T

he fashion game is not an easy one to play – the rules change with each season – but for Nicholas Van Messner and Bridget ‘bird’ McCall, it was never a spectator sport.

The pair met at an early-20-something birthday party, both tertiary-equipped and industry veterans – Van Messner, a graduate of fashion design at the Royal Melbourne Institute of Technology (RMIT) and street couture label Maiike; McCall, a seasoned photographer and stylist – and pooling their talents seemed like, well, the done thing. Eight years on, the Melbourne-based label is now an international presence.

To secure a break and get off the bench, the pair were savvy – they started small with a line of leather bags, all the while dreaming big. “At the time, no one was giving a beautifully handmade, hand-crafted products,” says Van Messner. “Everything was cheap imports from China, Indonesia, you name it. We thought there’s a real hole for that. It was sheer hard work that we knocked on the right doors and got into the right boutiques and that was really how it all began.”

Positioning was key to building the brand. He recalls cold call after cold call, as the pair worked their way through a list of their dream stockists. “We were really fortunate from day one to be supported by people like Belinda Seper.” This support, in turn, opened the door to other big-name stockists.

The jump from a simple accessories line to a collection was an ambitious one, but proved an integral part of the label’s growth.

“We had a fantastic stockist list with the bags and we had a real opportunity to broaden our product range,” says McCall. “It had always been our focus to have a clothing line.”

The bags, she explains, were a means to an end. Still, it was a case of slowly does it. The pair started off with a capsule

57 Grow Your Business

range, designed to sit alongside the bags in the boutiques they stocked to. This proved a strategic move in that their buyers didn’t have to commit to a whole range and a capsule range was almost always positioned alongside the bags in-store.

“They’re already stocking you, and you already have their support, so it’s not that far a stretch,” says Van Messner.

Their Spring/Summer 2010/11 range – Sun-kissed Machine – is the 17th collection from the design duo, and the ninth effort on an international scale – after “doorknocking” to ensure the perfect stockists in the US, LIFEwithBIRD now hangs on racks in Japan and most of South East Asia.

Under pressure Despite their success, the label’s growth hasn’t been without its challenges – the global financial crisis hit the fashion world, hard, and proved the downfall of many a label. While the Australian industry was largely cushioned from its effects, the same can’t be said for those in the rag trade overseas. Smaller orders, tighter purse strings and bad debt “are all very real issues” the pair have had to face.

“A lot of people don’t understand that fashion is probably one of the only industries where you produce the product and you give it out on credit terms,” says Van Messner. “There’s a lot of pressure on our business. We run our business really well – it’s taken us a long time and we’ve made a lot of mistakes, but we now know how to run it.”

“Predicaments” like the recent downturn really “put pressure” on business, says Van Messner, and it’s key to have strategies in place to minimise risk. ”With the international markets, we definitely had to tighten the reigns a lot and make sure that we were covered with credit applications and all sorts of different guarantees and upfront deposits,” he says. “These are things

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In depth Bridget McCall and Nicholas Van Messner

that have been taken for granted over the last 20 years, and now if you don’t really tighten those reigns up, you’re going to over expose yourself.” But strong business systems have given the pair the confidence to handle any challenge that is thrown their way. “Everything’s running smoothly and like clockwork – we’ve got really good systems in place to make sure that happens,” says McCall.

On the home front, LIFEwithBIRD has branched into retail – opening a flagship store in Melbourne’s iconic GPO. And despite the challenges associated with this new frontier, McCall says the venture – to date – has proved to be a success.

“It’s a very different operation to running a wholesale business,” says McCall. “We’re really, really happy with the results. Retail is definitely a very different focus for our business.” Van Messner says the retail has provided another platform for growth and canvassed unheralded levels of promotion. “Our whole collection is now visible to the public, it’s not just a small cross-section that buyers choose to stock in their own stores,” he explains. “We have this greater focus on our product and our brand.” working hard for the money Van Messner says the wholesale side of the business has “really picked up” thanks to their new retail presence. “Our sales are noticeably increasing. Around 60 to 70 per cent of the people who walk through the door have never heard of LIFEwithBIRD. The scope for that kind of promotion is something we couldn’t have tapped into before as a wholesale business.”

The venture has also been a benefit to the business’s cash flow. “It’s really positive for us. It keeps the momentum of the business going, which is something new to us.”

The retail and the wholesale elements of the business allow them to gear for growth. “Focusing on retail is really key with Australia having such a booming economy in the global scheme of things,” says McCall. “But we don’t want to neglect any of our export markets – they’re going to bounce back over the next year or two and we’re going to be right there where we left off and make sure we capitalise on them coming back.”

And, the duo wouldn’t trade these lessons of the last eight years – both admit if they had their time over, they’d do it all, exactly the same. “You’ve got to fall down to pick yourself back up, you’ve got to learn from your mistakes,” says McCall.

“We started when we were so young – that was a real positive because we didn’t know what we were getting ourselves into.” Van Messner recalls: “We started with the only capital that Bridget and I had saved up and, for the first years, we both worked four or five other jobs. We would have liked to have started with more capital,” he laughs, “but that wasn’t an option. But it probably made us work harder as well.”

“We have taken some more risks because we had less to lose really,” says McCall. “As in, both starting young and just giving it our all.” G

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“You’ve got to fall down to pick yourself back up, you’ve got to learn from your mistakes. We started when we were so young – that was a real positive because we didn’t know what we were getting ourselves into” Bridget McCall

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Feature Online business

site for sore eyes The online market is maturing. Businesses that didn’t want to do enter the online space originally are now deciding they have to do it, because otherwise they run the risk of getting left behind their competitors. It pays to plan your strategy.

Words Nathan Sinnott

M

ost websites fail on the basic stuff. Let’s go back to the basics and see if your website passes these simple tests.

When people visit your home page – the main page of your website, what’s the first thing they see? If all they see is a nice long message about what a great person you are (who cares?) and how you want to run a good business (hope so or you should not be in business) and if they have any questions, they can send you an email (they knew that anyway) and how you look forward to doing business with me (of course you do, that’s why you have this website), what’s the point?

That person came to your website in response to an ad or a referral so they’re looking to buy something. Why are you wasting their time? They want you to sell them the product or service.

Beyond the home page, make it easy for the visitor to navigate around, and buy from your site. It is said that a new visitor will take up to eight seconds to stay or leave a website, and spend up to 52 seconds on average reading and reviewing information on a single page before moving to the next. Make the information on each page count Something you need to think about in terms of how potential clients are going to find you on the web, is what stage of searching the potential client is at. Understanding whether or not the potential client is ready to buy is key to your marketing strategy.

There are three stages a person goes through before they’re ready to buy: 1. Identification: This is the earliest point at which a potential client can identify a need. Clients at this stage are the least

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likely to buy. However, if you can hook a potential client at this stage, you may get secure them when they are ready to buy.

2. Information: Once a person has identified a need or a problem, they usually set out to learn about it in-depth. They start seeking the advice of experts. This is a transitional stage, where it is more likely that they’ll buy than at the identification stage, but where most people don’t rush into anything. This is where real value-added content comes in handy on your website. Being able to provide usable and reliable information helps to position you as an authority in your niche. Once the customer is ready to buy, they’ll remember your expertise and come back to you.

3. Purchase-ready: At this point, the potential client is ready to buy. They understand the problem or need, know what can be done about it, and are ready to pay someone to get their solution. These are your best prospects, and the easiest people to convert into a sale. People who are ready to buy can get very specific in their search terms.

Effective marketing for your business will at least touch on each of these stages. While the details and specific tactics may vary from one niche to another, most will want to spend their time in the second stage. By providing useful information to potential clients, you build your image as an authority in your field.

While not every client will wind up coming to you for services, many of them will. By adding real value, you create a positive experience for the client and engender a certain degree of trust. When the time comes for a solution, they’re going to come to you rather than randomly searching on Google or the Yellow Pages. G Nathan Sinnott is the chief executive officer of Newpath WEB www.newpathweb.com and SEO AUS www.seoaus.com.au

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Feature Online business

Website no no’s Maximise the effectiveness of your website by ensuring it doesn’t have any of the following: • Dead links and broken graphics • Non-essential pop-up windows • Excessive vertical scrolling • Straight-line navigation (navigation should also be present in internal pages as well) • Horizontal scrolling • Multiple frames • Excessive animations • Too many photos and graphics • Complicated background graphics • ‘Under Construction’ signs • Streaming audio with no ‘off’ button • Disabling of the ‘back’ button • Generating new browser windows when windows are closed • Bad grammar and spelling • Missing meta tags • Overuse of dark colours • A website that doesn’t work on all major browsers.

Website design tips 1. Plan your site. Map it out on paper. Plan the navigation, layout, links, and rough look and feel.

2. Ensure you have an attention-grabbing headline. Also make it easy with the use of headings and sub headings for visitors to follow the general point of each page.

3. Make the information on each page count. It is said that a new visitor will take up to eight seconds to decide to stay or leave a website.

4. Make it easy for visitors to provide you with their email address. Don’t ask for too much info.

5. Use your keywords properly. Get advice from a professional SEO company on how best to do this, but also try some of the free SEO tools available to perform quick checks on this.

6. Make your site easy to navigate. Make it simple, and obvious, and don’t move the menu, or change it on each page.

7. Create a blog, keep it updated, and promote it. It’s a great way to keep people interested, and coming back to your site.

8. Where possible, give items away for free. This builds trust, credibility and starts you on the path to establishing some loyalty with visitors.

9. Request feedback from visitors, engage with them as much as possible, where possible. Take their feedback on board and make relevant changes.

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“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency” Bill Gates

tricks of the trade Don’t fall into the trap of assuming a well-built website with a compelling message should cost the earth.

Having a strong call to action, an easy-to-navigate site and one that encourages people to buy from you or use your services doesn’t always reflect the price of the website. Websites can vary in cost due to these factors: 1. Design – static and simple or highly interactive and visually heavy.

2. Functionality – simple and straight to the point, or a site that encourages participation and is highly functional with data and features from third parties.

3. Size – smaller site typically cost less than those with hundreds of pages.

Your home page should be uncluttered and include: 1. Your company name and brand.

2. Images (if relevant) and big headings about your key products or services.

3. A big call to action.

4. Visible, enticing links to inner pages where more products and services can be purchased.

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In brief Building a website

we built this City Words Courtesy of Switzer

I

n the wake of the global financial crisis, innovating to stay one step ahead of the game proved a powerful strategy for many businesses.

At Switzer Media & Publishing, the opportunity to diversify its traditional media and publishing company into the growing online market – at a time when quality business information was in demand more than ever – was a calculated growth move.

The goal was to develop the existing Switzer-related information site to a multi-faceted, content-driven website. “We took an entirely different approach to building Switzer.com.au than any website we’d produced previously,” says Alex Switzer, online operations manager. The process involved extensive planning with a consultant to form a detailed digital strategy, as well as a stringent tendering process to the find the right web developer.

“Early on it was difficult to assess how much we needed to pay to get a highly functional news website,” explains Switzer.

“There was a lot of jargon thrown around in the tenders we received and it was challenging to decipher what was really necessary and how much we should be prepared to pay for it. This was a key area where having an experienced web consultant made life much easier.”

When it comes to engaging a professional for website development, Switzer believes it depends on the type of website you’re looking to build. “The redevelopment of Switzer.com.au was a significant investment for our business and we knew we needed to bring in an expert early on to make it a success. Many businesses wouldn’t require a web consultant, but it’s always smart to seek out some form of expert advice before undertaking any web build,” he advises.

Today, the Switzer website speaks for itself, offering key business information for retail investors and small business owners, such as daily newsletters, commentary from recognised experts, blogs, articles, market updates, interviews from Peter Switzer’s Sky Business Channel program Switzer, and a host of other small business resources.

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Along the way, some pretty valuable lessons were learnt.

“We now know there’s a way to build websites and a way not to build them,” says Switzer. “As with most things in business, planning was the key to success.”

Tips of the trade Switzer offers his advice for other businesses seeking to build a new website: 1) Have a clear strategy for the site build.

2) Always take the time to get at least three to five quotes (more if possible). You’ll be amazed by the variety of prices you receive. Also request references, because it’s important that the web developer is easy to work with. If you have an existing web developer you would like to use, still make sure their pricing is right.

3) Have someone within your business manage the web build thoroughly to ensure your developer delivers on your timelines and to limit ‘scope creep’ (that is, the project going over budget due to delays and adding elements beyond the original agreement).

4) Make sure your business owns all the code for the website.

This is extremely important in the event of a dispute with your web developer.

Technical usability Once you have your newly developed website up and running, consider how easily the target audience finds the site to use, understand and navigate through.

In an ideal world usability testing is best undertaken by an independent third party that specialises in testing websites, because you and your team and the web developer will most likely be too intimately involved in the site to see its flaws.

It is, however, a good opportunity to get some good (and cheap) advice from your family and friends. If they’re not a potential client you may think they wouldn’t know the first thing to look for, but it is amazing what a fresh set of eyes can pick up. G

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Feature Sales

The hard sell To ramp up your sales, two women at the top of their game share their secrets for sales success, with plenty of top tips and strategies to boost your profit and your capacity for growth.

Because let’s face it; if you’re in business, you’re in sales.

Words Eleanor Glass

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he hard sell need not be so hard – you don’t need to sell ice to Eskimos to make it in business. Instead, you need to give your customers what they want, not what you want to give them.

As anyone in sales will know, it’s a tough game, and it’s been made tougher thanks to the recent downturn. But the show must go on, and, as business great Jim Rohn once wrote, “Don’t wish it was easier, wish you were better”.

So, how can you up the ante when it comes to your sales strategies to boost your strike rate to grow your business?

When looking for self-improvement tips, you should always look to the top end of town to find out how they got there.

Simple strategies pay off From a part-time job peddling someone else’s wares on the streets of Melbourne to the number one selling muesli in the nation, Carolyn Creswell knows a thing or three about sales and growing a business. “I think people think it happened overnight, but it’s been 18 years in the making,” says Creswell.

Creswell says the success of her brand – Carmen’s Fine Foods – lies in its simplicity. “We come from the kitchen, not the chemist,” she says. And even with growth – both in Carmen’s line and into international markets – is to keep this top of mind when it comes to all strategies.

So, then and now – how have Creswell’s sales strategies changed? “When we started, it was just the tiniest little business.

You know, I bought it for $1000 and it was…” The best $1000 dollars she ever spent? “Yes, but it was a long time in the making,” says Creswell. “We used to do go around to delis and try to get them to stock the products and do tastings on the

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weekend. Now, we have some critical mass, we have money to do better promotions. We can do price cuts in supermarkets, we can do on-pack promotions, school programs and a fantastic newsletter. A lot of people read that.”

When you’re little, says Creswell, it’s hard to do big things. To boost sales, size does matter. “You can make a decision about putting a muesli bar on the front of a magazine or sponsoring a big bike ride, giving all the bike riders a muesli bar – that we couldn’t really afford to do when we were a little business.”

But that’s not to say the small-time and local sales strategies should be shed as you grow. Blanket sales strategies might go hand-in-hand with big business, but Creswell says it’s important not to forget the sales tacks that have helped you in the past.

“You almost can’t help yourself,” admits Creswell.

She tips growing businesses should target their sales strategies to achieve cut-through, no matter the market. Think about the strategies that worked locally, and tailor them for the global marketplace. “Until you’re available in all sorts of retail outlets, it’s very hard to do anything mass media – you have to do things in-store. Overseas we try to do things that are directly related to the store – such as building an end of an aisle, or having some special displays, a promotion in-store, or tastings.”

Out-of-store promotions – in a market where your brand is relatively unknown – are often a waste of money. “We have to be realistic. People buy what’s at their local place. It’s convenient.

Are you going to go 20 minutes out of your way for one product?

Even though we think the muesli is the bee’s knees, how much effort are they going to change their shopping patterns to buy our stuff? That’s why we try to market specifically to who already shops in a place we sell to.” The secret to a strong, tailored strategy is to listen to those who you’re trying to sell to. If you give them what they want, they’ll buy it. “We’re very reactive

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Feature Sales

to what people tell us,” says Creswell. “Instead of saying ‘this is what we do, take it or leave it’, we tried listen to the market, hear their needs and adapt as much as possible in that regard.”

A simple strategy, but it’s one even Creswell has to be reminded of at times. Biding time before a meeting with her buyer at Coles Myer recently, Creswell cracked open a fortune cookie.

“This is a true story,” assures Creswell. “It said, ‘you have to ask the right questions to get the right answers’. So when I went in to present the product – mini muesli bars – halfway through, I thought about the fortune cookie and I said to the buyer, ‘Do you ever get requests for a muesli bar that doesn’t have nuts in them?’ And he said, ‘All the time! For school lunches!’”

Then and there, Creswell promised her buyer a lunchboxperfect nut-free muesli bar, effectively closing that day’s sale and securing herself another in the not-too-distant future.

“So, a product that might not have been taken was taken because we actively think what does the market need. It’s not just what your supermarket buyer is saying, but, obviously, what consumers are wanting and being reactive.”

This, says Creswell, is key to growing your business. “You need to make your customers love you, to love doing business with you. To promise what you deliver, to be reactive to information you find out in the marketplace, to deliver what you say you will, on time, on budget, and then your business will grow. We really make an effort to over deliver as much as we can.”

Thanks to this tack, large suppliers often call Creswell at the eleventh hour when another business has fallen through, proving not only do you have to be able to give people what they want, but you have to give it to them when they want it.

“Whenever anyone else doesn’t deliver, Qantas will always ring us – they’ll say, ‘We don’t have any sandwiches, can you give us something we can serve for lunch?’ Within two hours, we’ve got an option at the airport, ready to fly. It’s just being that company they respect and like working with; they know you’re a can-do company that will be there when the times are tough.”

So how do you become that can-sell, can-do company?

Creswell says it all comes down to systems. “It’s being organised,” she says. “We have very tidy desks, empty inboxes, people are very calm and on top of their workload. When you are completely on top of your work, it’s less likely anything will slip through the cracks. We have all the packaging at hand, and we have the stock and the set up so we can make sure we’re not running hand-to-mouth. People know that we don’t run out of stuff, that we’re on top of what needs to be done every day.” a stand out The beauty industry is big business – Shelley Barrett, CEO and founder of ModelCo, knows surviving the tough competition and fickle market comes down to the importance of a good sales strategy. In eight years, ModelCo has grown into a global cult beauty brand with more than 125 products. In such a crowded

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Practice makes perfect In business, it’s easy to get distracted and to forget the important things – like the numbers that will keep you in business. Business champion and US sales guru Jack Daly says this is a cardinal sin – and it’s one that could cost you your business.

Daly is a big hit on the international speaking circuit and has cemented a great reputation by helping businesses sharpen their selling skills. For more than two decades, he’s been walking the talk – from leading global sales forces to building businesses from the ground up. “People and companies tend to underperform because they rush to the urgent at the expense of the important,” he says.

To prove his point, Daly turned to US-based magazine for SMEs, Ink, that’s written for business owners just like you. Each year this mag publishes a ‘Top 500’ annually, much like BRW. Daly said a lot of entrepreneurs are focused on making that list, but 70 per cent of those who make the grade don’t make money in the year that they’re honoured.

What Daly is getting at is this: in business, many are deluded by their own successes without stopping to evaluate whether they were successful in a business sense. So how does Daly advise people to shake this complacency? “I’m going to use two words that are almost an anathema to the business community when it comes to an entrepreneur: systems and processes.

“There’s hardly anything that goes on in a sales call that you couldn’t anticipate. When we go out and watch what the top sales people are doing – no matter what industry that we’re working in – the top sales people are canned. That is, they say the same thing, the same way each time.”

Think the canned laughter on an American sitcom.

Or better still, a well-rehearsed theatre production.

“The beauty of the top sales guys is they don’t sound canned. When they say something, it sounds as though it’s the very first time they’ve ever said it,” Daly explains.

“If I go to opening night but the show has been on Broadway for eight years, I don’t want them to make new things up the night I’m there.”

The theatre analogy is a good one, but for those who aren’t big on theatre, Daly also offered a sports analogy.

“Watch the professional circuit. You hear about Tiger Woods taking this high-risk shot. Well, it was high risk for someone who doesn’t play the game regularly, but he’s played that shot over and again. I wish more sales people would take to that. Practice and preparation.”

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market, the brand’s hot pink branding – “high voltage glamour”, applied to everything from packaging to point of sale stands, was a no-nonsense way of getting, and holding, consumer’s attention. “It is so eye-catching – it has really helped us to cut through in a cluttered market,” says Barrett. As US sales expert Patricia Fripp says, it’s not your customer’s job to remember you. Rather, it’s your obligation and responsibility to make sure they don’t have the chance to forget you. This strategy has evolved, as has the packaging – “designed to draw the customer in and simplify the shopping experience” – with elements such as clear casing, so potential buyers can see the product shade straight off, and graphics spelling out the product’s benefits.

Again, simplicity proves key to a strong sales strategy.

“ModelCo is all about ‘Smart Beauty’,” says Barrett. “We use our knowledge to create a premium range of smart, sexy, simple, problem-solving beauty products created with style and speed.”

But the brand’s sales strategy isn’t limited to on-shelf; instead it’s a multi-channel distribution model embracing department stores, home shopping TV, e-commerce, specialty beauty apothecaries and selected high-end boutiques. “This integrated business strategy enables ModelCo to build brand awareness, increase consumer loyalty and leverage investment, while reinforcing the authenticity and premium image of the brand.”

As the brand’s product offering grew, so too did its sales strategies. Or rather, as Barrett terms it, support. “We like to say, ‘with innovation requires education’! This is why we provide fully-serviced counters with highly-trained staff. Recent smart beauty innovations were so unique that it was imperative our beauty advisers demonstrate the application techniques to customers, and educate them on the features of the product.”

As US sales legend Zig Ziglar says, “Stop selling. Start helping”.

Barrett says systems are key to sales success. “Recognise the importance of training,” she says. “It is absolutely crucial when it comes to sales that your staff are highly trained, not only in the product knowledge but also that they have strong sales skills, such as up-selling and link-selling.

“We have recently introduced what we call the ‘SMART Service Steps’ of selling which encourages our beauty advisers to sell across the range and create customer loyalty through our VIP Program, where we hold information on a database which enables us to target them with offers and new products which we think would interest them, based on their sales history.”

So what is the most important thing to keep top of mind when it comes to your sales strategies? “To stay ahead of the curve by producing truly unique and innovative products which are smart beauty solutions, not just a fad or gimmick but which become an essential part of a woman’s beauty regime,” says Barrett.

So, from breakfast to beauty and all the industries in between – if done correctly and systemised, the hard sell needn’t be so hard. Simply find out what your customers are looking for and sell it to them. G

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Help staff boost their sales Motivation, for many, is elusive at best. Sure, it comes in spurts, often at unexpected times, but these are all too often short-lived. Think about it for a moment – if you find motivation a toughie and you’re running your own show, what about those drawing a pay cheque from you? How can you motivate those in your business to be the best they can be?

The answer is simple – practice makes perfect.

Motivational great Zig Ziglar said: “People often says that motivation doesn’t last. Well, neither does bathing – that’s why we recommend it daily.”

You need to set up systems to make motivation a habit for your sales team – think regular, structured team meetings where you review sales targets, regular rewards for meeting – or better still, exceeding – those targets; payment systems to ensure commissions are paid promptly or when promised, and so on. Also, drag in senior management – yes, that’s you! – to help recognise achievements. Try a personal note, perhaps tickets to a show you know they’re keen to see or simply just make an effort to thank them for a job well done.

“Until you’re available in all sorts of retail outlets, it’s very hard to do anything mass media – you have to do things instore. Overseas we try to do things that are directly related to the store” Carolyn Creswell

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In depth Jonathon Eadie and Bruce Bigelow

Pictured: Bruce Bigelow (sitting) and Jonathon Eadie

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In depth Jonathon Eadie and Bruce Bigelow

the master illusionists Passion and imagination fuels internationally renown Electric Art, a graphics retouching studio based in Sydney. Managing director Jonathon Eadie and creative director Bruce Bigelow have built a business founded on creativity, teamwork and embracing the impossible.

Words Keris Lahiff Photography Wilk

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mere glance at Electric Art’s website demonstrates the extraordinary talent and skills they have to offer. Providing creative retouching and 3D artwork for companies such as Olympus, Subaru, Samsung and Xbox, among many others, they have become famous in their field, going so far as to carve their own niche in the industry.

The field of creative retouching, says Eadie, was practically non-existent before they coined the phrase.

In its sixteen years of operation, the internationally acclaimed studio has reached new heights, with steady demand for their work nationally and internationally. However, its origins were far more humble, founded simply as an arena for Eadie to pursue his design ambitions. “It’s really quite simple,” says Eadie.

“All I was ever any good at was drawing pictures. It makes perfect sense that I’ve ended up here, given the only thing I ever felt I was very strong at was this subject.”

Forgoing his university degree, Eadie opted for a more hands-on approach and founded Electric Art in 1993, based on sheer faith and ambition.

“I entered the big end of town in a design sense with very little experience and not knowing anyone,” he recalls. “Knowing what I know now, I wouldn’t do it. It was far too crazy.

“I borrowed money to start with as the equipment was so expensive back then. It cost me close to $700,000 just to start up, but I had such belief in the company.”

A Friendly Partnership The gamble paid off. The business was netted several highprofile clients in its formative years. However, the major growth of the company was not until Eadie convinced Bigelow to join

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the business. The two had met years earlier, through shared networks and, later, a shared studio workspace.

“Bruce has always been more talented than me,” says Eadie.

“We drifted apart when I started Electric Art, but, after a couple of years, I just knew he was the right man for the job.”

Initially, Bigelow was hesitant to come on board. “The call came from Jono to join him at Electric Art,” he recalls. “I thought I would miss design because that’s what I loved to do. But this is so much more.” Thirteen years in the business and Bigelow is certain he made the right decision.

Eadie pinpoints two events that propelled the company’s significant growth and success. The first was simplifying the brand. “Strategic planning is all about brand strategy,” he says.

“I started to look at the Electric Art brand and we were too broad. We got rid of some of the incidentals, the distractions from the business … we stripped them away and we rebranded the company with creative retouching.”

The second, he says, was Bigelow’s insistence that they move into the area of 3D production. “With retouching you can only go so high, but 3D means you can actually create any picture without the need for photography,” he says. Essentially, they could create whatever their imagination desired, which formed the basis of the company’s motto, ‘Play God’.

Teamwork and Technology The pair has always approached work with a ‘the sky’s the limit’ mentality. “We started to focus on the hardest jobs in town,” explains Eadie. “The great thing about the hardest jobs in town is that they’re the most fun. As soon as you start to crack these hard-earned jobs, more come and words spreads.”

Hard work though it may be, Eadie and Bigelow have fostered a relaxed work culture, where humour is inextricably

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In depth Jonathon Eadie and Bruce Bigelow

linked to creativity. Take the giraffe climbing up a tree – the advertisement created for the Wellington Zoo – for example.

“Everything we do is ridiculous,” he says. “It’s a silly idea and it makes me giggle. First of all, you have to have that stupid idea.”

Of course, the increasing capabilities of technology have played their part in Electric Art’s success and the company’s embrace of new techniques and products helps to facilitate this.

“The ability to do stuff you couldn’t do is just happening at an exponential rate. The ability to mimic reality or create the unreal is becoming increasingly easy,” says Bigelow. “We’ve made cities! We’ve done it all.”

He notes that technology isn’t the sole asset in the company’s work; rather, it’s the team as a collective.

“There are plenty of people who are technically proficient but there’s people who have an eye and are proficient and can solve a problem. It’s important to remember the technology is just a tool and always will be,” he says.

After years of working closely with the team, Bigelow believes that promoting collaboration and solidarity is the only way to reach the company’s potential. “You can’t have ego about jobs.

Everyone has to work as a collective. No one has ownership over one image” he says.

Since operations began, Eadie has strived to find these perfect people and keep them within the business by cultivating a caring work culture. Eadie’s commitment to his employees is palpable.

“I’m proud of [the business] not just for its success, I’m proud because it’s a nice home for a lot of people. My role now as the main partner of the business is to, with very light hands, govern and manage the business. I make sure the wages are paid, money is coming in and the mood is staying right,” he says.

Electric Passion Bigelow and Eadie agree that the strength of a business is only as strong as the passion of its people. Luckily, this is something which they are in no short supply of. “You’ve got to love what you do,” says Bigelow. “If you lose a love of what you do, then you may as well stop what you are doing.”

Eadie agree: “There are very few rules; the only rule is that you have to really want to do this and then work as hard as you like.

I tell my children, all you’ve really got to concentrate on is finding the thing you really like to do and if you do, you’ll excel at it.”

With such an impressive body of work, the team’s efforts have been recognised by the industry. In 2008 and 2009, they won 28 awards for work produced for a range of clients, the most notable of which was the ‘Welcome Snoop’ campaign for MTV. “We’ve got a storeroom full of awards,” says Bigelow proudly.

Continuing their love for the ridiculously absurd, Eadie concludes that animation will be the next big thing in the future.

“Street posters will start moving. The girl will wink on the side of the bus. It’s a still image so it needs to come from our end.

The giraffe will have to climb!” G

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“There are plenty of people who are technically proficient but there’s people who have an eye, are proficient and can solve a problem. It’s important to remember the technology is just a tool and always will be” Bruce Bigelow

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In depth Mark Liebach

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In depth Mark Liebach

on the move Words Renée Carl Photography Scottie Cameron

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ith Australia in the grip of the recession in the early 1990s, many people would have baulked at the idea of leaving their job to open their own business. But for Mark Liebach, it was a seminal time in his career, when he decided that crunching the numbers as an accountant just wasn’t cutting it.

“I wanted to get into business and decided that mobile phones and business equipment was a fast-moving industry that I wanted to be part of,” he recalls. For Liebach, the opportunities outweighed the risks of starting his own business. In 1992, he opened his first retail store selling mobile and business equipment in Clayton, Melbourne. A breakthrough came two years later.

“In October 1994 the Optus World [retail] concept was introduced and [my business partner] and I saw a real opportunity in the prospective franchise.” Liebach opened the first Optus World store in Victoria in 1995 and two more followed soon after.

He describes his time in retail as “quite rewarding”, especially during the growth years, but he was keen to get back into the business market. Liebach explains that in September 2001, mobile phone number portability came into effect, which opened up the business market. So he got on board and opened a business office, starting off with just two people. Some 12 months later, he turned his office into an Optus Business Direct (OBD) operation covering the South and South East of Melbourne.

Today, Liebach is the managing director of BusinessTel – an Optus Business National Partner – in Adelaide, Melbourne and Sydney and he currently employs 35 staff. Liebach has his work cut out, but he loves it. “In particular, I love the business planning aspect of my role and constantly thinking of ways of growing the business and delivering more to our clients. In fact, that’s how BusinessTel was born – out of my desire to deliver more to the SMB market and on a national basis,” he says. Liebach opened his first interstate office in Adelaide

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18 months ago. “That was a big step,” he concedes. “It took me back to when I was starting out. [It was] a great challenge.”

The “true growth” of his business is expanding the operation to Sydney. “Part of the expansion is delivering some very innovative go-to market strategies which I’m really excited about,” says Liebach. “Also, it means a further investment in the current operation which is exciting for both myself and the staff.”

Growth though is not without challenges – it’s part and parcel of the journey for most business owners. “Probably the biggest challenge is getting other people to truly buy into the dream and be as passionate about it as you are. Often, they may like it and support it but may not be as passionate about it as you are.”

The key, says Liebach, is to create an environment that all employees look forward to coming to on a daily basis.

“The last thing you want is staff coming to work because that’s their job and they have to. It is very important they want to,” he stresses. Liebach says one of his most successful initiatives was to structure the business in a way that brings staff closer to the running of the business. “For example, every year, we have an off-site with all staff, where among other things, we present the annual business plan to them. We also invite feedback and suggestions, and in many cases they get implemented.”

Liebach advises other business owners to back themselves 100 per cent. He believes there’s no room for doubt. “To overcome [doubt], I listen and evaluate, make any adjustments if warranted, then go forward 100 per cent.” And he’s learnt some pretty valuable lessons along the way. “When I was younger I was quite outspoken. If there is one lesson I learned, it is to listen and absorb other people’s opinions. There is great wealth in that, whether those opinions are right or wrong.”

Having the right people is critical too. “You have to have a core team of trusted and like-minded people working with you (not for you),” he says. “It’s virtually impossible to achieve your business goals by yourself.” Upon reflecting on his business’s growth, is there one thing Liebach would have done differently?

“I would have expanded a lot earlier!” G

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Feature Selling your business

up for sale Think you can’t grow a business and sell it? Yes you can, but the key is not to focus solely on its sale – having one eye on your exit strategy while running a professional and customer-focused operation can pay huge dividends in the long term.

Words Maureen Jordan

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ales of entrepreneurs starting a small business and later selling it to the highest bidder are folklore in the business world.

Two great Australian examples come to mind. Mark Bouris started and later sold Wizard Home Loans to GE Money, and John Symond sold part of his baby, Aussie Home Loans, to the Commonwealth Bank. Such stories are the exception, however.

How many small business owners truly believe they can grow and sell their business?

Consider this true story. Garry owned a fruit shop on a lucrative shopping strip and had been running the business from the leased premises for more than 20 years. The business gave him a good living, but he worked long hours and was tired of the landlord’s antics and what he saw as the increasing demands of customers for better quality produce.

In short, he wanted out and was on the verge of closing up and walking away. His accountant told him the business had a dollar value, Garry didn’t believe him. Another fruit shop had opened six doors up and he held little hope of selling.

A ‘mate’ said he should work out a price for the business regardless so Garry, knowing his annual takings, said “OK, I want $300,000 for the business. I may as well put any value on it because I can’t see any bugger buying this show”.

A few days later, Lee, the owner of the fruit shop a few doors up, came into Garry’s store. They were chatting about the price of tomatoes and other things fruiterers talk about and, on leaving the shop, Lee casually asked Garry if he’d ever sell his business. Garry was taken aback and said, “For the right price I would.” No prizes for guessing the next question, to which Garry replied, “I’d want $450,000!”

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Lee just smiled and left the shop and Garry thought nothing more about it. Two days later, Lee returned with a cheque for $100,000 and asked Garry if he’d take it as a deposit and he’d pay the rest in two instalments over the next two months.

Garry couldn’t believe his luck.

Making your own luck The lesson of this story is that selling a business shouldn’t be seen as luck. Your business is an asset that has a value, and, in Garry’s case, it certainly had value to Lee. While Garry was good at running a business, he hadn’t looked at what his business was worth as an asset that he could sell and, if he had have done so, could arguably have improved his business further to bring an even better price.

This is what Lee has subsequently done, turning his own shop into more of a small supermarket and also selling some basic fruit and vegetables while pumping up the look, feel and produce of his new business. He saw value in the area and took note of other shops lifting their game to make the strip a shopping showpiece. It now draws in an endless parade of customers who shop on quality more so than price.

Garry had seen the other fruit shop as a competitor and therefore an obstacle for him in selling, but that very competitor turned out to be the buyer. By contrast, Lee acted like a true businessman and saw the acquisition of Garry’s business as a way to grow his own asset.

Seizing an opportunity In contrast to Garry, serial entrepreneur Nick Llewellyn has a clear idea of why he starts or grows a business – and his end game is to sell. He held many jobs through his combined law-arts degree, including stints as a barman, petrol station

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Feature Selling your business

attendant and bouncer, before he went out on his own.

“During my five years at uni, I organised events on a commercial basis,” he says. “That was a great little business.”

On graduating, Llewellyn secured a judicial associateship in the Supreme Court of South Australia and then worked for a commercial law firm, but took the dramatic decision to leave law and start an events business again. He soon sold that company and from the proceeds bought Adelaide’s Botanic Hotel, before renovating and selling it two years later.

Wicked Pizza, a fast-cook gourmet pizza concept for major events and franchised stores, is his latest venture. Again, the plan is to grow and sell the business “if the price is right, within the next two to three years”.

“I have not only had many businesses, but I invest money in stable and ‘normal’ investments so they are isolated if a particular plan doesn’t hit the mark properly,” he says.

Llewellyn wisely believes that a clear exit strategy is a must in every business plan. “I am very conscious of my exit strategy and ensuring the strategy remains a realistic option throughout the building phase,” he says. “The more energy – that is, blood sweat and tears – invested in a business, the harder and harder it is going to be to let go of it [so] for me reviewing the exit strategy must happen on a semi-regular basis to ensure I am not becoming too emotionally attached to my business.”

Taking out the emotion Another business owner who has been able to cut the emotional ties and make money from the sale of a business is former mortgage broker Antony Blanch, founder of Choice Rates.

Starting his business in 1997, Antony was a trailblazer in the Dubbo mortgage broking community. While lack of competition in the embryonic days presented an ample opportunity to grow his business, he says both the consumers and the lenders were initially wary of dealing with brokers. Blanch didn’t shy away from the challenge of getting his name out to establish his business. “I had face-to-face meetings with people. It helped develop the rapport and let them know who I was and helped market my business initially in a more personal way.”

It was this commitment to service that saw Antony grow his business in a sustained way, despite the competition that came on his coattails. Despite his commitment, he was always prepared to sell his business.

“I was always sure I had a saleable asset,” he says. “There was a trail of income as well as the business name and goodwill.”

The decision to sell was made in late 2009 to fulfil a lifelong dream of being an officer in the Royal Australian Air Force, where he is now undergoing training.

“I applied to be a pilot in Year 12, but didn’t get in and got distracted by finance for 25 years,” Antony says. “Perhaps I could have kept the business and put in a manager, but with hindsight I realise I would have struggled to do both.” G

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“Start thinking of the business as a separate entity and what it needs in order to grow. Once you start thinking this way, you must also consider what you want the business to do for you – rather than what you must do to keep the business going” Peter Switzer

What is your business worth?

Inevitably, the value of a business is determined by the market at the time of sale.

Entrepreneur Nick Llewellyn says there are scientific approaches to valuations that look at the underlying physical and intangible assets owned by the business (a balance sheet) in concert with the profitability of the operation (profit and loss) plus any goodwill, ‘blue sky’ or potential.

“The more assets (tangible and/or intangible) the business owns and the more profitable the business is, the higher its value,” he says.

“This basic matrix ultimately determines the value of the business I am selling or buying.”

Former mortgage broker Antony Blanch’s business was a little easier to value.

“I did some research and spoke to various companies and to my aggregator, Choice Aggregation, but at the end of the day, I worked on the sale price being twice the annual trail.

“I put it on a business broker’s book, but a local banker ended up buying my business from me,” he says.

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Feature Selling your business

word from the top Tim Pethick is a successful entrepreneur who has created companies such as high-flying juice business nudie, which he started in 2002 and within two and a half years, was turning over more than $18 million a year. He left the nudie board in early 2006 and while he retains a significant investment in nudie, he has no involvement with the business today. Since mid-2005, Pethick has focused on created new brands such as Sultry Sally, Gecko and max Super.

We asked Tim when he starts a business, does he have a plan to sell it? “No,” Pethick says. “I don’t think it is a good idea to start a business with a plan to sell. In my view, this means you focus on the money and a potential quick flip instead of building the business. To be successful, a start-up should try to create a customer-focused ‘movement’. This will often mean there is a more ‘noble’ purpose to the business – it will be a business with meaning. You can do this, for example, by ensuring your business overcomes a frustration a typical customer in your industry would otherwise suffer. By doing so, you make life better for your customers and they reward you by consuming your products or services and helping build your business.

“If you have a successful business and it is creating value for customers, then you can contemplate how best to realise that value (or some of it) for yourself by thinking about selling.”

name your price Putting a price on your business can be tricky, according to Tim Pethick. “There are lots of accountant-led models for valuing businesses that rely on crunching numbers. For example, it could be a priced based on a multiple of earnings. Often times the most applicable multiple is a multiple of EBITDA (earnings before interest, tax, depreciation and amortisation).

Pethick points out there are often industry standard multiples that apply. “For example, average transaction multiples (those based on sales transactions that have been reported) in the beverage space are around nine times EBITDA,” he says. “If you have a high growth business, you can achieve more. [Ultimately] it is all about getting the best price you can and, like any sales situation, that sometimes depends on how valuable it is emotionally to the buyer. If you aren’t comfortable with the mysteries of valuing your business or the practice of selling it, get advice. Your local accountant can be a good start. If you have a business that has national or even international recognition, it may be better talking to a corporate adviser or an investment banker.”

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Keep your eye on the prize Entrepreneur Nick Llewellyn has strong views on why many small businesses fail to build a business that can be sold.

“Most people in small business have a keen eye for the dollar, however my observations suggest that operators get bogged down in the day-to-day physical requirements of their business and the extraordinarily exhaustive paperwork required by all of us and lose the impetus and motivation for growth.

“Most small business owners are ‘punch drunk’ from the paperwork they are constantly bombarded with (and that) clouds and slows their motivation. By the time they want to sell their business, it requires a new much larger amount of energy to get their operation ‘sale ready’.

“If a small business owner can, from time to time, review their position (maybe in line with their Business Activity Statement reporting) and at that time update or annotate their business plan, then this can help them stay on track for growth and ensure that the business is permanently in a ‘sale-ready’ state.” plan of ATTACK From his own experience Llewellyn knows that starting a business, or buying an underperforming business with an eye to growth, is a massive undertaking.

“It requires a ridiculous amount of energy and significant risk. It impacts on you personally, on your family and on your friends,” he says.

“There must be a clear, easily understandable business plan that is reviewed and annotated on a continuing basis. There must also be a clear exit strategy (which may also change and be annotated over time).

‘Without a strategic plan of attack the experience will be hellish. With a plan it will be hard but immensely satisfying once the achievements are reached.” seize the day Llewellyn suggests that you consider these four points that, if taken seriously, can lead you to realise a profit from the business you have built.

1. Identify your opportunity.

2. Write a clear and easy-to-understand plan for what you believe you are going to do with this opportunity.

3. Make sure there are no personal, physical or regulatory hurdles in the way of achieving your plan.

4. Have a clear and defined timeframe and exit plan.

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In brief Growth and diversification

Geared for growth Words Neda Vanovac

Y

ou could be forgiven for thinking the last thing Sydney’s eastern suburbs need is another beauty salon, but Polished Beauty Bar is not just another salon. Conceived as a one-stop shop for the myriad beauty needs of the modern woman, Polished is run by three women of three generations, each bringing their unique expertise to a business that they hope to expand Australia-wide.

Former Sydney Business Review Businesswoman of the Year Jo Patterson recruited her manicurist Jade da Silva and facialist and masseuse Rosa Francisco to develop a beauty brand to cater to a market they felt was being neglected.

“When I’d go into salons I could never get everything in one spot,” says Patterson. “I love the balance between health, wellbeing and beauty. We felt that there wasn’t a place that offered a more [holistic approach], and also one that was convenient. I’ve always worked and I’m a mother of two – I don’t have an hour to sit for a blow-dry, nor do I want to spent $65 on it. I want to get in [and out] as quick as I can. Not that I don’t like my nails being painted, but I’m too hyperactive to sit there for an hour, and that’s how Polished was born.”

The three women formed a partnership in July 2009, signed their lease in December and opened for business in March 2010. Their dedication to the concept has seen them develop a comprehensive business plan, with plans to franchise across Australia. Patterson has been the driving force behind the business, but da Silva and Francisco have been key to drawing in clients. Da Silva’s experience with nails has been instrumental to the development of the manicure and pedicure bar, while Francisco, who ran Marie Claire Beauty for many years, “is an institution in her own right in Woollahra” according to Patterson.

“I want people to walk up the stairs and feel welcomed,” explains da Silva. “No matter where you’re from or who you are, everybody gets treated the same way, and hopefully they’ll walk out having had a great experience. And then the clients

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will get to know each other, and know who’s going in, and they’ll come for a catch up.”

Tucked away in a secluded sunlit first-floor studio, Polished Beauty Bar offers an escape from the hustle of the city, looking out over Woollahra’s tree-lined streets. The marble nail bar, exposed sandstone wall and leather-mounted mirrors invite clients to sit down and exhale.

There are rooms for massage, facials, brow and lash maintenance, non-surgical procedures and a large yoga space that holds classes thrice daily. “What we thought was lacking was a beautiful environment that wasn’t intimidating to walk into, and was affordable,” says da Silva. “There’s still a view that all this stuff is a luxury, and we want to bring it to everyone.

You can be polished, and it’s affordable.”

Patterson hopes that the charm and energy of their flagship store will translate around the country. “We want to franchise the business Australia-wide, so we’ve spent quite a bit of time on training and what we call the ‘Polished Way’. When you come into a salon, it’s consistent. We’ve spent a lot of time writing training manuals and training the staff. It’s really important to us that there’s a methodology. It doesn’t take away any of the fabulousness of having a treatment, but [customers will] say, ‘every time I come in I feel comfortable, because it’s a familiar process that they’re going to follow, and I know I’ll feel good’.”

The Polished women plan to make their fit-out a signature of the salon, along with their organic teas and soy candles. They know the importance of detail, and are planning how to best target their clientele using social media, eschewing traditional advertising. Plus, they’re recording their own salon music and a book on the Polished Way is in the works.

“I think it’s very rare with three women that we don’t feel the need to compete. We all have our areas of skill and expertise,” says Patterson. “There’s three women in three different decades, and from day one there’s never been an issue. It’s just been very positive, lots of laughter, and I think that positive energy goes a long way.” G

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In brief Growth and diversification

Russh hour Words Renée Carl Photography Will Davidson In 2010, Switzer Media + Publishing acquired RUSSH, arguably one of Australia’s most fashion-savvy titles.

The decision to diversify was prompted by “the strength of the RUSSH brand and the opportunity to build this further and share it with the world” says editor-in-chief, Jess Blanch. As a recognised provider of business and financial information, RUSSH was a new foray for Switzer: the ever-evolving world of fashion, art and culture, packaged up in a wellestablished, near cult-status bi-monthly magazine.

The title was founded in 2004 by a leading fabric design and print company that had a clear vision for the magazine. “They believed in the talents of Australian designers and felt this was an opportunity to showcase their work locally and internationally,” explains Blanch. “Within three years the title not only had a strong following locally, but was distributed to more than 20 countries.”

Of course, building a profile in a competitive marketplace can be challenging, but from the outset, RUSSH didn’t follow the rest of the crowd, instead forging its own path. “As an independent title, RUSSH didn’t compromise,” maintains Blanch. “It produced unique and original content for an intelligent reader that wasn’t just interested in fashion, but the knowledge and creativity that drives it.” RUSSH has continued to experience stellar growth, sitting in a unique position with its focus on arts, music and culture. “RUSSH is not a typical glossy, but it is more commercial than many of the independent titles in the market,” explains Blanch. “It incorporates elements of luxury and the street to create its own unique and eclectic character.”

There are plans to drive continued growth of the magazine into different areas. “We are looking to leverage the RUSSH brand by diversifying into other forms of the media such as the digital space,” reveals Blanch. “This means we can provide our supporters with a unique opportunity to tap into our targeted audience across a number of platforms and it also ensures growth in brand exposure.” And in a major move, a new multimedia website will be launched in July so the RUSSH brand can truly compete globally.

“Investment in distribution strategies and marketing will increase our circulation and recognition both locally and overseas,” says Blanch. “There will be exciting new RUSSH products.” Watch this space.

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Feature Advisory Council

The growth consortium Growing a business on your own is challenging, so setting up an advisory council is a smart business move. The advantages are the valuable outside experience and objective assistance its members can bring to the future direction of your business.

Words Maureen Jordan

I

t’s not ground-breaking news that many owners of a growing operation try to do too much on their own and could benefit from external help.

But what form does this help take? A business owner might be wise enough to bring in a coach or mentor, or to effectively use their growth-savvy accountant to help guide them through the cash management cycle and stresses of an expanding operation. But there are other ways.

Some business owners have found it beneficial to set up a council of advisers who assist the CEO or managing director in how to best achieve the goals the company has set itself.

Once privy to the workings of the company, these advisers may give advice based on their past experience or offer introductions to potential clients through their established networks. Therefore these advisers not only take on the role of being objective sets of eyes on the business, they can also bring valuable contacts to the table.

Leanne Preston is the CEO of Wild Child, a business that sells a range of natural products for the treatment and prevention of head lice and nits, across 14 countries. Preston maintains that having an informal advisory board was an important formative step in Wild Child’s success. “I approached people who had the skill sets that I didn’t have. So for me, it was building this global vision, but to do that, I had to have people who had the experience and were skilled in the areas that I wasn’t.

“For example, the first person I approached was a pharmaceutical chemist so he could look after product development [in a technical and regulatory capacity], then I brought on board an accountant and a financial planner, and I also approached some major captains of industry who could help me on this journey. So I surrounded myself with experts

75 Grow Your Business

and they’ve been really great mentors and people who have helped guide me.”

Setting up an advisory council doesn’t have to be complicated.

“The important thing to understand when setting up a council,” says Andrew Bland, founder of commercial law specialists BlandsLaw, “is that it’s not governed by the Corporations Act 2001 or other company-related law because it’s not a board of directors governed by a constitution. It’s simply a group of advisers.” He says that while the company may wish to enter into agreements with individual advisers, particularly if they’re being remunerated, there’s no need to put any formal legal framework around the council. There could be legal issues, however, surrounding the formation of such a council if thought isn’t given to its structure and purpose.

“There are advisory councils whose members are called directors,” Bland adds, “but I’d guard against using that word.

A director of a company forms part of a board and there are many legal duties (and potential liabilities) that arise for regarding their relationship with the company. Such duties won’t exist for members of an advisory council and for the avoidance of doubt, I’d suggest you don’t refer to them as directors.”

Getting the right people on board One striking difference between a member of an advisory council and a director is that the role of the council is far less formal. “There will usually be some agreement about the number of meetings to attend each year,” Bland says. “However, the council’s role is purely that of informal advice and assistance, as opposed to the duties that a director and the board has to the company, such as ensuring that the company does not trade whilst insolvent.”

More than likely, however, you will have to pay to have such experts giving up their time to assist your business and this

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Feature Advisory Council

should be seen as an investment in its future growth. Payment can vary depending on the skills and experience each adviser has – but be prepared to put dollars on the table.

If you select the right people, your advisory council can be a useful sounding board for your CEO or MD (that could be you!). One thing you don’t want is a council of mates who tell you only what you want to hear. A council should add a certain independence and diversity to the advice that you may not get from a board of directors or a consultant.

Rules of engagement If you’ve decided that an advisory council could have real benefits for your business, then here is a guide to its establishment: • Create a charter for the council. Your advisory council needs a charter so members are aware of what’s required from them and the council. The charter should spell out that members do not have legal liability to the company. You can write your own set of rules and get rid of anyone you don’t want but that could damage your reputation if you kick out an adviser.

Have term limits of one or two years, which lets fresh blood into the council naturally. Remember that confidentiality is important. Your council members could be exposed to sensitive issues and confidential information.

• Create a formal position description for who you’re looking for. Work out skills you want and have each council member formally selected. Retired executives and business owners have great experience and great networks. What about your accountant – do they have the ability to add value to your business by being on such a council? After all, they know your financials back to front so their input could be a real plus.

• Ask each person what their vision is for being on the council.

If they mention money (though they will be paid) don’t include them. Be honest with each potential member. Explain your problems and goals and see how they react. Select people you admire and trust. Make your expectations clear.

• Determine how many meetings a year there will be. There is a discipline imposed by regular meetings and a set of objective eyes regularly on the business. Suggest initially 12 meetings a year (one each month perhaps more in the first six months). Then they can be tapered off. Let each member know how often the council will meet and how long each meeting will take.

• Conduct a formal member induction program so this brings clarity to the role. This sets out how the council works, how each member’s role adds value, etc.

• Engage in process reviews. Review each meeting to check its effectiveness. Have a thorough annual review to determine the effectiveness of the council. You need to give feedback to the council; particularly how each member adds value.

• Remember that the council needs to have a chairperson.

The chair should be someone external to your business. G

76 Grow Your Business

Tips for setting up an advisory council 1. Work out why you want to set up an advisory council.

Do you have intergenerational change occurring in a family operation that needs to be managed? Are you in survival mode following a set back? Or simply, has your business grown to a point where you need outside help?

2. Put thought into what skills you require in an advisory council.

3. Think about what you want to improve in the company. If there’s a problem with business development, get someone who can help advise the sales team on how to improve. If there’s a problem with leadership, get someone who’s either capable in that area, or who knows what’s needed to improve this skill set.

4. Think carefully about where the company needs assistance and the goals it’s looking to achieve and then choose members that can help achieve this.

Select members who are strong in different areas, so the council can provide a variety of advice.

It’s probably not particularly useful to have too many members whose key strength is finance, for example.

5. Work out what the business can afford to pay.

You need to come to terms with the fact that you have to pay for great advice. You won’t have to pay your council members anywhere need what you would pay a director but you do need to reward them. It all depends on who the person is and what skills and contacts they bring to the table.

They wouldn’t have to spend time reading board papers before each meeting but they would have to put time into understanding the nitty gritty of your business. Work out what each person’s hourly rate would be.

6. Consider who do you want on the council and how many members you want. The right people can be a huge benefit to your business.

You don’t want too many people involved but you do want the right people. For instance, you could consider bringing in people to complement your own skill set, or who are experienced in a particular key business area – bringing their skills and experience to the table.

7. Carefully consider whether you are able to let go some control of the business and implement the advice given by the council.

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In depth Michael Kitchener

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In depth Michael Kitchener

turning up the heat With a surplus of kitchen renovation companies throughout Australia, cracking the industry is no small feat. Within five years, Michael Kitchener, owner of Kitcheners Kitchens, has grown his business into a formidable competitor.

Words Keris Lahiff Photography Wilk

D

espite his somewhat ironic surname, Michael Kitchener did not originally intend to add founder of a kitchen renovations company to his resume.

Business owner and entrepreneur, though, were on the agenda.

“I had a very strong ambition to own my business. That was the drive of the business,” he says. “I wasn’t looking for a kitchen business to start with. I was looking for an opportunity and I found one.”

In 2004, during a do-it-yourself kitchen renovation in his Bondi apartment, Kitchener discovered a kitchen supplier who offered custom-made fittings at wholesale prices.

With a background in mechanics and an industrial design degree, Kitchener saw he could satisfy a niche in the market.

The idea was to offer something unique and different to what the major players in the industry offered.

“The product that we supply is the custom-made kitchen.

My slogan is any shape, any size, any colour, any finish for the same price point as the modular companies.”

On with the show Starting out with little capital and no office proved a challenge in the company’s early stages.

Kitchener began operations in 2005, converting the second bedroom in his apartment into a workspace.

Within the first year, he managed to complete 80 renovations.

Unlike his competitors, Kitchener was lacking the one thing that seemed a prerequisite to business in the industry: a showroom. Kitchener subverted the traditional structure and implemented an online business strategy instead.

“There was not one other kitchen company in Australia

78 Grow Your Business

actively trying to generate leads from a website – so I built a website,” he explains.

“I created the impression that we were an established kitchen business, running without a showroom. The whole design process and business model is ‘we’ll come to you’.”

Even now with showrooms in Sydney and Melbourne, Kitchener remains defiant that it is not a necessity in the industry. “At the end of the day, a showroom doesn’t help you with what’s in your home. You need someone to come out and measure and do a design brief in your home anyway.

[The challenge] was overcoming that objection and finding out ‘well, what do you want out of a showroom? I can take you to my home and you can see my kitchen’.”

A big small business By 2006, Kitcheners Kitchens was on the cusp of exponential growth. After the arrival of his first child with wife, Samara, Kitchener moved out of his home office into a shared office space with one of his suppliers.

“It was still a relatively small office but I put a little kitchen display in that room. It wasn’t what today I would consider a showroom, but to me it was the bee’s knees!”

A year later, the offices had been moved to their current premises in Alexandria, with a growing staff of 18 permanent workers, at least 10 contracted designers and countless tradesmen. “Between the showroom and office administration, I thought I had way too much room for the next five years.

I outgrew that in less than 18 months and I’ve taken another unit in the business park to accommodate for my growth.”

Kitchener says “99 per cent was all organic growth”.

“I was able to assign the majority of all the growth from the margin of the business.”

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In depth Michael Kitchener

Even before its mass growth, Kitchener envisioned the company as a big business. His biggest struggle, he explains, was encouraging those he employed to operate as if they were already trading with a turnover in the millions.

“I always had the vision that I want to be a big business, even when I was operating from home,” he says. “In the way I spoke with my suppliers, it was ‘I may be a one-man band now, but that’s not the model of my business – don’t treat me like a little business’.”

Point of difference While the business grew physically, Kitchener reinvested funds into the strength of the brand.

Employing celebrity chef Iain ‘Huey’ Hewitson as the brand’s ambassador granted the brand instant credibility. Huey has been involved in the company’s marketing campaign since mid-2008 and Kitchener remembers their initial meeting in Melbourne fondly.

“Flying back to Sydney, I was as high as a kite. I flew Virgin and Huey’s cooking show was on and I felt like going to the guy next to me ‘I just came out of a meeting with Huey and he’s going to come onboard with my business!’”

In 2008, spurred on by his younger days as a bohemian traveller and the new experience of parenthood, Kitchener began to question, ‘what is it we are doing to the environment and how can I have a socially responsible company?’ The answer was to offset 100 per cent of the company’s carbon emissions, thus becoming the first Australian kitchen company to be completely carbon-neutral. The move only further differentiated Kitcheners Kitchens from its competitors.

Kitcheners Kitchens’ success has not gone unnoticed. In 2009, Kitcheners Kitchens won the Sydney Business Award for Household and General Retail and took home the coveted 2009 Sydney Business of the Year Award.

“It was a huge accolade for everyone in the business to be acknowledged for the hard work we’ve done,” he says.

With a staggering number of kitchen renovation companies in the Sydney region alone, differentiating Kitcheners Kitchens has become a crucial to business strategy. Creating a sense of the unique, Kitchener says, is integral to success in the industry and he credits his efforts for his success thus far.

“It’s a hugely competitive marketplace so why would people choose Kitcheners? My goal is how we are different. It all builds towards brand credibility and who we are as a company.”

With an annual turnover of $3.5 million and several plans in the works – including an online shop to sell accessories, appliances and cabinetry – the company’s growth is far from waning. As to the future, Kitchener concludes that change is vital to the company’s growth.

“If I continued to do the same things that I am currently doing, then how can I achieve different results?” G

79 Grow Your Business

“I had a strong ambition to own my business.

That was the drive of the business. I wasn’t looking for a kitchen business to start with. I was looking for an opportunity and I found one”

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In brief Growth resources

business builder tools www.switzer.com.au

350 ways to grow your business

Switzer.com.au is comprehensive online portal for retail investors and small business owners. Founded

by Peter Switzer – one of Australia’s leading business and financial commentators – this portal has been designed to cut through the clutter that exists in business and financial media and to give you the information you need to make the right decisions in relation to your superannuation, your shares, your property, your business, your career, your bank account, your family and your life.

Switzer Media + Publishing, RRP $20.95

www.bizthinktank.com.au

the carbon crunch

On BizThinkTank, you’ll find tons of free information to help you start or grow your business, with articles on key areas such as leadership, marketing and sales, people and systems, customer service and money and finance. But from time to time we’ll have even more for you. As a special bonus – when you become a member of BizThinkTank – you can also sign-up to receive a free copy of your choice of annual business publications from Switzer Media + Publishing.

Switzer Media + Publishing, RRP $20.95 What is emissions trading in Australia all about? And what action do we need to take? The Carbon Crunch answers these questions… and many more. It is a must-read for business owners, investors, environmentalists and you!

www.commbank.com.au/ business/betterbusiness/

cash flow

Put yourself in the know at Commonwealth Bank’s BetterBusiness website, with information and resources on different aspects of managing a company, from regulating cash flow, trading offshore, buying a business, leaving a business, to hiring staff and planning for the future, as well as tools and resources such as a financial plan template, red tape checklist and a cash flow tracker.

Find out how other owners solved common business problems and what you can learn from their stories.

80 Grow Your Business

From inspiring stories such as Gloria Jean’s Coffees, SumoSalad and Wild Child, Peter Switzer shares the lessons that have helped these entrepreneurs reach the top, and shows you how to apply them to your own business.

Switzer Media + Publishing Keep your business in the black with this can-do guide courtesy of the Commonwealth Bank. With plenty of tips to help you take control of your cash flow, this is a must-read for anyone looking to grow their business.

For other useful tips from the experts, visit commbank.com.au/worksmarter

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