Secrets Of
Small Business
Owners
Exposed!
Dale Beaumont
With Simone Tregeagle & Foreword By Robert Gerrish
Disclaimer
All the information, techniques, skills and concepts contained within this publication are of the nature of general comment only, and are not in any way recommended as individual advice. The intent is to offer a variety of information to provide a wider range of choices now and in the future, recognising that we all have widely diverse circumstances and viewpoints. Should any reader choose to make use of the information contained herein, this is their decision, and the contributors (and their companies), authors and publishers do not assume any responsibilities whatsoever under any conditions or circumstances. It is recommended that the reader obtain their own independent advice.
First Edition 2007
Copyright © 2007 Dream Express International Pty Ltd
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission from the publisher.
National Library of Australia
Cataloguing-in-Publication entry:
Beaumont, Dale; Tregeagle, Simone
Secrets of small business owners exposed!
1st ed.
Includes index.
ISBN 9780980308617.
1. Businessmen - Australia - Biography. 2. Small business - Australia - Management. I. Title. (Series: Secrets exposed).
338.6420922
Published by Dream Express Publishing
A division of Dream Express International Pty Ltd
PO Box 567, Crows Nest, NSW 1585 Australia
Email: info@SecretsExposed.com.au
Website: www.SecretsExposed.com.au
Distributed in Australia by Gary Allen
For further information about orders:
Phone: +61 2 9725 2933
Email: customerservice@garyallen.com.au
Editing by Simone Tregeagle [simone@inkcommunications.com.au]
Cover design by Jay Beaumont [www.thecreativehouse.com]
Illustrations by Grant Tulloch [info@secretsexposed.com.au]
Smashwords Edition, License Notes
This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each person you share it with. If you're reading this book and did not purchase it, or it was not purchased for your use only, then you should return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.
To my totally amazing and very special wife Katherine. Thank you so much for your encouragement, hands-on support and love. Looking forward to a life of never-ending adventures!
Dale Beaumont
For Fabrizio and Aja, my two favourite people, my guiding lights and my inspiration.
Simone Tregeagle
Acknowledgments
As with any major project, there are a number of very special people who contributed to making this book happen, so we’d like to take a short moment to say, ‘Thank You’.
First, to the 15 exceptional small business owners featured in this book, the biggest thank you for accepting our invitation to be a part of this exciting project, and for the thought and care you put into your answers. It has been wonderful to get to know you and experience the positive impact that each of you has on everyone whose lives you touch.
Next, a huge thanks to Emma Lyons, our very special assistant who worked tirelessly to pull all of the book’s material together, and to Neil Murphy for your great support and skill in editing the mountain of words.
To Jay Beaumont (Dale’s brother) for designing the book covers, to Bookhouse in Sydney who continue to do such excellent typesetting and to Robert Stapelfeldt – thanks for everything you do to bring all of the ‘Secrets Exposed!’ books to life.
Thanks to all the staff at Gary Allen (our wonderful distributors) and each and every sales rep that has helped to get these books into the stores – we so appreciate the work you do.
And finally, to the tens of thousands of readers that have supported the ‘Secrets Exposed!’ series – a very heartfelt thanks. May the words from our books continue to inspire and guide your way!
Praise from readers of the ‘Secrets Exposed!’ Series
“I believe that the path less trodden is the most rewarding, however it can be quite daunting especially in business. I found the ‘Secrets Exposed!’ series a breath a fresh air amongst the countless business books that fill the shelves. It’s great to find an easy read which makes small business owners not feel so alone and helps explain the end worth of having to build a business.”
Jason Ham – Uniforms.com.au
“I sat on a plane on the way to Seattle for a meeting to start my own business and I often get bored in the air with all that spare time. This time, we landed in LA and I wanted the flight to keep going so that I could read the book again!! From the very first page, I started to write down items for my business that were so relevant. The beginnings of my business were made inspirational by Dale’s book and I have not looked back.”
Sally Wheat – Hot Mama
“I really loved these books. They give relevant information written by people who are out there doing it for real. Unlike motivational speakers, who whilst engaging, can be accused of selling the new age form of ‘the miracle cure’, these contributors are actually successful entrepreneurs, who are running successful businesses and leading well-rounded, successful lives.”
Bradley Stribley – Oscar White Pty Ltd
“I read one of the ‘Secrets Exposed!’ books and could not put it down. It was great to have so many success stories put together in one book. It gives you the urge to move and do something. Halfway through reading one of Dale’s books I purchased another property and by following what I learnt I have accumulated five properties with a total value of $1.4 million. I would definitely recommend these books to anyone who is looking for some inspiration.”
Derek Edgar – Property Investor/Renovator/Developer
“As a business owner and investor, I’m always looking for ‘new’ information in order to set my goals, and improve my knowledge and financial position. I found that by reading your books I was able to gain some valuable information from mentors who have been there already, which I believe will assist me in achieving those goals in the future. Reading gives you the spark to create ideas, the knowledge to make plans and the impetus to take action.”
Perry Hartikainen – Multiple Business Owner
“As a budding entrepreneur I sometimes find it hard to focus on the forest, for the trees. The ‘Secrets Exposed!’ books help me by inspiring me in my big picture thinking and showing me how other entrepreneurs build their businesses!”
Samantha Simpson-Morgan – Rarified
“Before I read Secrets of Female Entrepreneurs Exposed! I was feeling flat about my new business. I was scared about the future and my ability to grow my company. Reading this book reassured me that I was taking the right steps to get me to where I wanted to go. It returned my confidence and drive, and gave me lots of great recommendations for further information to continue my business and personal growth.”
Ilyia Davis – Spillandspan Fashion
“Through the ‘Secrets Exposed!’ series, Dale is able to share with us great in-depth experience of the real world of business or property investment, for example. With the knowledge gained, individuals can learn the trials and triumphs from the success stories without having to lift a finger. There’s no better way of learning than from each industry’s best.”
Alan La – Future Pioneer
Contents
Preface
If I were in your position right now I’d be wondering if I really needed to read this section. However, if this is the first ‘Secrets Exposed!’ book that you’ve read, could I ask you to please resist the temptation to skip ahead, as I’d like to briefly share with you why this book has been created and how you can best use it to impact your life.
When I was growing up I heard somewhere that there are two ways to live your life: the first is through ‘trial and error’ and the second is through ‘other people’s experience’. At the time I dismissed it as just another one of those sayings that sounds good, but doesn’t make much sense. Then, like most teenagers I finished school with stars in my eyes thinking, ‘This is great! My education is over – no more books, no more lectures, no more people telling me what to do’. How wrong I was. After a few months of bouncing around, not quite sure of what to do next, I stumbled across the idea of personal development and started to hear concepts such as:
• Formal education will earn you a living, but self-education will make you a fortune.
• Work harder on yourself than you do on your job.
• You will be the same person five years from now, except for the people you meet and the books you read.
• Don’t wish that your job were easier, wish that you were better.
• You are your own greatest asset, so you must invest in yourself.
Since November 2000, I have been totally committed to becoming my own most valuable asset. After attending hundreds of seminars, listening to thousands of hours of CDs and reading shelves of books, I have discovered that the people who truly succeed aren’t any smarter, better looking or harder working than anyone else – they just think differently and have learnt to incorporate different values into their lives.
I am now in the very fortunate position of being able to travel internationally to present personal development seminars to teenagers and I am often asked, ‘What is the one thing you need to know to be successful?’ My answer is always the same: ‘The one thing that you need to know is that there is not one thing that you need to know to be successful’. I’ve learnt that success is multifaceted and that mastering one principle of success or area of your life isn’t going to take you to the top – the more you master, the more successful you will become. But if I did have to identify one of the most important success strategies, it would be this: ‘Find out what successful people do and do the same thing until you get the same results’.
That’s what this book is all about. The only difference is, instead of you going out and finding successful people, we’ve brought them to you.
You see, whatever you want in life, whatever you are shooting for, chances are that someone else is already living it. They have already invested years of their life and probably hundreds of thousands of dollars, they’ve made lots of mistakes, learnt from them and eventually succeeded. So why would you want to waste your own time, money and effort through ‘trial and error’ when you can fast-track your success by learning from ‘someone else’s experience’? As Sir Isaac Newton said, ‘If I have seen further it is because I have been standing on the shoulders of giants’.
Every time you pick up a book, attend a seminar or interview a successful person, you are compressing years of life experience into a few hours. With any of the ‘Secrets Exposed’ books, you can multiply that by between twelve and seventeen people and you’re looking at around 250+ years of experience and wisdom ready and waiting for you. It won’t prevent you from making mistakes of your own, far from it, but it will help you to make more calculated and purposeful decisions, rather than big, misguided and ignorant ones.
There is no shortage of information about how to achieve proficiency or even greatness in any area of life these days. Go to any bookstore or library and you’ll find the shelves sagging with titles from experts, all with their own theories and ways of doing things. But what I have discovered is lacking in almost all of these books is INSPIRATION. What’s missing is role models and mentors – the stories of people we can all look up to. People who started out exactly like you – with a dream in their hearts and with all the same fears and insecurities. Given the choice between reading a textbook or a dozen success stories about people who have actually done something, I’d take the success stories any day of the week. I’m not saying that theoretical information isn’t important, of course it is, but having presented hundreds of talks to all different types of audiences, I can confidently say that it’s always the stories that move people. It’s the whole, “If he or she did it, then so can I” that gets inside people’s hearts. When we’re inspired we get motivated and then we take positive action which leads to results.
The ‘Secrets Exposed’ books are not intended to be a one-stop-shop. They are an introduction to the wealth of knowledge available to you and to some of the real success stories of people who have reached the top in their chosen field of endeavour. That’s why at the back of each book you will find most of the contributors’ contact details and some of their other products and services that are available to help you continue your journey.
So, how did the whole idea for the ‘Secrets Exposed’ books come about?
Well, in 1998, when I was around seventeen, my nan gave me a copy of a book titled Collective Wisdom, by Brett Kelly. In it were transcripts of face-to-face interviews with a whole lot of prominent Australian personalities. And it was a fantastic read. Since then I have seen a handful of random ‘success story’ books, but the challenge I find with most of them is that they are either transcripts of interviews, that never really make complete sense in the printed form, or they are written by writers who paraphrase someone else’s story. The result tends to be a diluted message that doesn’t really allow you to get a sense of the individual’s personality or character.
In around 2001 I read my first Chicken Soup for the Soul book and realised that there were dozens and dozens of related titles designed to meet the needs of different people’s areas of interest. I thought that was pretty neat.
It wasn’t until January 2004 that the ‘Secrets Exposed’ idea boiled over. I was in my hotel room in Singapore relaxing after six straight days of presenting to hundreds of teenagers. I was reflecting on the ideas that had been shared with them. One of the most important was to seek out those who have already achieved what you want and ask them lots of questions. I was plagued by the thought that only a small percentage would act on that very valuable advice and that most would never take the step due to a lack of confidence, fear of rejection or an inability to contact the people they needed.
That’s when it hit me...‘What if I could find the people and put together a number of books covering a range of different areas?’ I knew it would take a lot of effort, so for the next three days, I sat in my hotel room and developed the basis of an entire system to make it happen.
Based on my experience with other books, I decided that these books had to be non-time specific and be written (not spoken) by the people themselves. This way the answers would be planned and well thought-out, providing richer content and more interesting reading. I also wanted to make sure that there was an even balance between practical ‘how to’ information and inspirational stories that gave an insight into the highs and lows of people’s real journeys. I also wanted to ensure that a percentage of every book sold was donated to a charity relating to the nature of that particular book.
When I arrived home I got into action. However, between working out of a tiny one-bedroom flat and trying to manage two other demanding businesses, my plans were a little slow in the beginning and I had to be resourceful. So I bought a plastic tub and turned the boot of my car into a mobile office! Anytime I could find a spare hour or two, I’d park myself at the gym or a nearby coffee shop and make calls from my mobile phone.
Putting these books together has been both time-consuming and demanding, but it has also been a real privilege for me to have the opportunity to work with each of the people involved in the various books. Thank you, to each of you, for making it possible!
Well, I think you’ve heard enough from me. Now it’s time for you to discover for yourself the wonderful wisdom contained in these pages. I hope that you enjoy the read as much as we’ve enjoyed putting it together. And who knows, maybe one day we will be reading your story?
Dream Big!
Dale Beaumont
Creator of the ‘Secrets Exposed’ Series
Sydney, Australia
Foreword
The mere fact that you’ve picked up this book suggests you’re either considering starting your own business, or you’re already airborne and are looking for some new ideas.
Either way, this book is for you.
On the following pages you’ll read the stories of real people – no hype, no spin, just fascinating personal experiences brimming with passion, courage and optimism.
You’ll discover how others have pursued their dreams; how they’ve overcome challenges and in a couple of instances, prospered in the face of real adversity.
My entry into the world of small business started at the age of eight, helping my father clean and prepare cars in his sale yard. I learnt early that loving your work was very good for business as nothing attracts more strongly than an enterprise that exudes happiness and enjoyment.
As you’ll read in the diverse case histories that follow, to truly love your work you need to fully understand what makes you tick. Only then can you design a business that aligns with who you are.
Creating your own ideal business may not happen overnight, but if you’re willing to learn from others and work to develop a vision of how things could look in your world, it will happen.
As you devour Secrets of Small Business Owners Exposed! I invite you to take note of instances where an experience or action resonates with you by actively scribbling a note in the margin or popping a post-it on the page.
The ‘Secrets Exposed!’ series are books that are full of strategies, concepts and little bits of magic. They should be wilfully plundered, expanded and translated for your personal betterment.
Don’t stand back. Dive in, get involved and embrace the wonderful world of small business.
Love your work
Robert Gerrish
Co-author with Sam Leader of the best seller, Flying Solo – How To Go It Alone In Business, business coach, presenter and founder of the online magazine for business owners, www.flyingsolo.com.au
Introduction
People enter into the world of business for a variety of different reasons. For some it’s a creative spark, for others it’s the need for personal control, and some desire the commercial success in order to create a better lifestyle.
Whatever the reason, sheer passion and determination helps individuals to begin their business ventures. This is then followed by a prolonged honeymoon period where the owner basks in their creative flair and chants the mantra ‘anything is possible’. For some this period lasts for months, for others it’s years. But sure enough, a point is reached when the enthusiasm fades and the owner begins asking – ‘Was it really worth it?’, ‘Will anyone else work as hard as me?’ and ‘When will these dramas ever stop?’
At this point the business owner has three options:
1. Quietly exit from their business, hopefully without much financial damage.
2. Remain committed to the cause and simply adjust to the restricted income and routine.
3. Make a decision to grow through the uncomfortable phase and build their business to a level that ultimately meets their initial goals and intentions.
Sadly, the statistics favour the first two options, because if there is one thing we know for sure businesses don’t grow on their own. They need to be driven and championed by a person that has a solid commitment to increasing their knowledge and improving the efficiency of what they do.
But what type of knowledge you ask? Well, you can try reading one of those ‘Complete An MBA In Ten Days’ books, but you’ll most likely wind up knowing less at the conclusion than you did at the beginning! Why is that? Well, the models which govern the mechanics of a billion-dollar corporation are vastly different to those required for a small business, so one certainly does need to be discerning when it comes to the input they receive.
Surely it would make sense that the best way to receive quality information is directly from those individuals that have walked the same path, overcome the painful bumps and are now enjoying the fruits of their business success. This is the whole idea of the ‘Secrets Exposed!’ series.
Since releasing Secrets of Male Entrepreneurs Exposed! and Secrets of Female Entrepreneurs Exposed! we have had fabulous feedback from readers everywhere. However, many have commented that they’d like to read more stories from business owners that are at a more relatable level. In other words, stories from those people who are either up-and-coming stars in the world of business, or those who have decided against oversized growth in favour of lifestyle, or because of a deep passion for their work.
In Secrets of Small Business Owners Exposed! we’ve assembled an amazing group of 15 highly successful people who are eager to share their experiences and pass on what they’ve learnt. By reading each contributor profile you’ll see that we’ve covered a lot of ground:
• They range in age from 23 to 54.
• Their business turnover ranges from $250,000 through to $5 million.
• Their number of staff ranges from more than 42, to in some cases just a single person operation.
• Some have run a number of businesses throughout their career, while others have had hit their stride in their first venture.
• Some have academic business qualifications while others learnt everything through practical experiences.
As for the content, this book covers: business planning, idea development, research skills, capital raising, time management, sales and marketing, public relations, financial matters, branding, hiring and motivating staff, personality profiling, leadership, crisis management, strategic alliances, web development, franchising, national and international expansion and much, much more.
So, is this book for you?
If you have a desire to:
• dramatically increase your turnover and profitability
• learn how to find and retain motivated staff
• discover how to work smarter not harder
• better manage stress and enjoy a more balanced lifestyle
• build an asset that is ultimately willable or sellable
• expand the reach of your business locally or globally
– then continue reading.
To further assist you in your own endeavours, a number of contributors have also very generously offered valuable gifts to all of our readers. To receive them, all you need to do is visit the specified website provided and then follow the steps to download the bonus gifts – absolutely free.
At the back of the book we have included the contact websites of every contributor. You’ll discover that many have their own books or educational materials, which we strongly endorse and encourage you to investigate further.
Finally, remember it’s what you do after you read this book that is going to determine its real value to you. So, go out there, apply what you’ve learnt and when you reach a goal – no matter how big or small – let us know so we can share your success story.
Enjoy!
Dale Beaumont and Simone Tregeagle
Email: info@SecretsExposed.com.au
PS. Ten per cent of the profits from this book will be donated to the Tomorrows Youth Foundation, an organisation committed to empowering teenagers with practical life skills to succeed in the real world. Having now run programs for over 10,000 teenagers, Tomorrows Youth has recently set-up a foundation which offers full scholarships to school prefects and at-risk teenagers so they can attend the 21/2 day Empower U program at no cost. For more information or to donate directly, please visit www.TomorrowsYouth.com.au.
Create And Communicate
David Staughton
“I suggest you go in with your eyes wide open. It’s no good once you’re half way in to realise that you really can’t afford it. Financially committed, with a half-setup or half-renovated business is no place to be.”
Profile
David Staughton
David ‘Big Dave’ Staughton was born in St Kilda, Melbourne, in 1962. As the eldest of three children, David worked in the family hardware store from the age of six. One of the biggest life lessons he learnt was when the family business shut down in 1980 – a victim of industry competition, poor management and changing demographics.
He was educated at Caulfield Grammar School and went on to achieve first-class honours in geology at Melbourne and Monash Universities. While at university, he earned money working weekends in the next family venture, a small tearoom and function venue in the Dandenong Ranges.
Following his studies, David worked for five of Australia’s largest mining companies, however, after a near-death experience he realised that the mining industry was not for him. At 25, with little money yet lots of passion, he bought a derelict restaurant in Monbulk and set out to become a millionaire by the age of 30.
Over the next 15 years he grew a function centre empire in Victoria with four venues and an enthusiastic, high-energy hospitality team. He hosted more than 2,000 weddings and functions and won the Best Reception Centre Award in Victoria for three consecutive years.
In 2001, David successfully sold off each of his businesses and has been assisting business owners and their teams ever since.
David lives with his wife, Michelle, and their three children in St Kilda. He manages to balance his many business activities with quality family time – there is nothing the kids love more than watching Funniest Home Videos with Dad!
What was your first significant business venture and what did you get out of it?
In May 1987, I found a derelict restaurant in the Dandenongs called The Waldhof. The business had been repossessed by the mortgagee and had been completely vandalised over time. It was a real mess, and many had passed it by, but I could see some potential. I had some money from the stock market and convinced my parents to loan me the rest, before I knew it, I was in business. After four months of hard work over winter – cleaning up, landscaping, building and renovating – we were ready to open our function venue.
The plan had been for my dad to be the master of ceremonies and for me to work behind the scenes. He had already been running nearby tearooms and doing small weddings for many years. I knew how to do the ordering, the preparation and I had some ideas on what food we should serve. I was also okay with customers, although I really lacked the confidence. However, both my father and I had very strong ideas on how things should be done, so it was inevitable that our partnership would fail. His old-style school of management just didn’t inspire me.
Basically, the best thing that came out of our very brief partnership (about 12 days) was for me to be pushed out of my comfort zone. I was forced to remove my kitchen apron and step into the spotlight – to be the front man, to be the MC. With each function and presentation my confidence improved and now I’m on the speakers’ conference circuit. It just shows what regularly stepping outside your comfort zone can do.
Did your business take off right away or was it more of a building process that took a few years?
I was fortunate that my parents sent me a few prospective customers when I first started and over time the wedding reception business slowly grew through advertising and word of mouth referrals. The second and third venues grew much faster because we had an excess of prospect enquiries, a solid brand, and lots of happy customers from my first venue. Having been involved in seven start-ups now, I found they’ve all grown slowly by word of mouth, with a focus on customer service. I don’t think most people realise the cost of acquiring those first few vital customers. Street signage is critical for most businesses to attract early customers, and with advertising, extra sales effort and price discounts you might spend between $50 and $500 to acquire each new customer. So make sure you get your money’s worth and offer great service to make sure they return (capture their details to invite them back and sell them well).
“That’s why they choose you – you’re probably cheap and unproven...”
I think that when most people start a business they are very keen to have any customers, they’re almost desperate and aren’t very selective. I now call it the A.A.A.A.A. phase – we’ll gladly ‘accept anyone at all wanting anything, anywhere, anytime at any price’. Generally, early customers are mostly disloyal, unprofitable and the most demanding you’ll ever find – mostly sourced through signage and advertising and in search of specials. That’s why they choose you – you’re probably cheap and unproven! Later customers will be of better quality and come through word of mouth; they’ll seek you out for your great service.
After a period of time you will discover what you do best, your focal point, and move on to the T.T.T.T.T. phase – where you focus on ‘these customers, these products/services, at these locations, this time and this price’. You can choose which customers to serve and which products and services you no longer want to offer.
In the beginning, what were some of the skills you were lacking and what did you do about it?
Initially, I hired poorly and managed badly, and experienced a lot of stress as a result. One day my life changed when I attended a hospitality management workshop run by Tony Eldred. I was complaining about having ‘stupid staff’ and that they were all ‘driving me crazy’. He politely enquired, ‘Who hired them? Who trained them? What systems were in place?’ It was like he hit me over the head with a lump of wood. From then on I knew I was 100 per cent responsible for the team and their results. I set about selecting better staff and acquiring the business skills I would need from the people I hired; a reverse apprenticeship if you like. I spent hours learning from my accountant, the builders, salespeople and chefs. I then developed the training programs and systems to improve our results and reduce stress. Little did I know, these systems would turn out to be the core of my business and an asset to sell.
I also read a few books that changed my life. Back in the eighties there were not many business books on the market. There were some classic personal development books, theoretical textbooks and books on business strategy in US corporations. Certainly there were none like this book, written by small business people for other small businesses.
You are known for having great customer service. How did you develop and deliver that service?
When I first started, customer service was terrible. I had no idea about what customers really wanted or how critical it was. I was always stressed out and we made mistakes everywhere. Then we hired better staff, trained them and used lots of simple systems. We sent out four-page customer satisfaction surveys and spent a lot of time eliminating our mistakes. We worked hard on having back-up systems and improving our service. It worked – by word of mouth business grew and we eliminated any negative publicity with service recovery programs.
Customers typically remember some events more than others – especially the ones that were most painful or pleasurable (the higher the emotional intensity, the stronger the memory). This is very useful in understanding what customers really value in a customer experience. First impressions and last impressions are critical. These are the ‘defining moments’ or ‘moments of truth’ that customers use to get a gut feeling about whether you really provide value.
A useful analytical tool for customer experience is FLOW:
• F is for ‘First’ – look at how you can make a better first impression and ultimately improve your service.
• L is for ‘Last’ – the last impression is based on the last interaction you have with your client – a meeting, your farewell, an event, a newsletter or even an invoice.
• O is for ‘Ouch’ – this is where customers have been slapped around or have had a painful experience. Most customers are far more aware of the painful interactions than the pleasurable ones.
• W is for ‘Wow’ – things that would normally impress the clients and make them go ‘Wow!’ The wow-factor will result in more word-of-mouth referrals.
What were some of the challenges you had to overcome on the journey to achieving your personal and business goals, and how did you overcome them?
Being a start-up in the wedding business in an outer metropolitan area meant that I had a number of unusual challenges. Initially these included being underfinanced and always short of sales in the winter season. Other major challenges included dealing with thefts, the Longford gas supply disruption and litigation for slip/fall accidents – even coping with a bushfire and getting insurance afterwards. The biggest challenge of all was the impact of the GST and the changing functions marketplace, including the introduction of many new competitors like golf clubs, wineries and restaurants. We overcame these challenges by refocusing on what we could do, which was to become really good at selling during difficult times and selling winter bookings – specifically, finding the secrets of selling the off-peak and shoulder-season bookings.
Can you explain your philosophy behind off-peak bookings? Why was it important to your business?
When we first started we just took any bookings that came along – mostly Saturdays in the spring and summer. I waited for customers to come along and buy the off-peak dates but they never came! In order to sell more shoulder and off-peak days we had to develop a number of ‘think different’ strategies. We thought about potential off-peak target markets; we investigated what would make our off-peak dates more attractive and built things like gas log fires, undercover photo gardens and indoor wedding chapels attached to the foyer; we priced differently; we developed our ‘price confidence’ and set prices based on supply and demand. Since then I have taught these and other methods to other venues – hotels, clubs, motels and caravan parks who have seen impressive sales improvements.
You mentioned setting prices based on ‘supply and demand’. How did you work out your prices?
“I waited for customers to come along and buy the off-peak dates but they never came!”
When I started the business, most reception venues offered just a few different function prices with little variation by day or season. The whole price game changed when I found out that the Melbourne to London airfare changed 21 times during the year based on supply and demand – most expensive was the week before Christmas and least expensive was mid-October. We began to use pricing to effectively shift demand from popular days to less-popular days.
Most business owners struggle with setting prices, some have low self-worth and poor self-esteem, and lack the confidence to charge. Other businesses didn’t even increase their fees when GST came in, some started low and forgot to put them up every year. Putting up your price, reducing your discounts and collecting all your invoices is all about your own price confidence. If you focus on price objections you’ll find them when they don’t exist. Many business owners have been amazed at the customer response to a price increase – hardly a complaint – some people even saying, ‘Yes, I thought that was too cheap’. Price-obsessed people provide way too much value, quickly resort to discounts, are reluctant to discuss pricing, lack confidence in price discussions, are weak negotiators, and give away too much. They will do anything to avoid conflict and are reluctant to ask for things (like payment and referrals) or to prospect and follow up. Confidence is a belief – an emotional feeling based mostly on past experiences. Everyone has a little voice inside their head – is the little voice inside your head helping you or hindering you? It’s really important to manage your little voice. Remember: the first sale is to yourself!
Hospitality can be a very busy industry. What is your secret for effective time management?
Secret: it’s all about actively choosing what you don’t do that really determines your success! When I first started the reception business I made the decision not to set the dining tables myself. I could have saved a few dollars by doing the low-value tasks but deliberately chose instead to work on more valuable tasks – like sales strategy.
I think it is important to outsource some of your low-value activities. Choosing to say ‘no’ to low-value tasks and certain business opportunities frees up time to do the important high-value tasks and to concentrate on better opportunities. It’s all about focus, avoiding distractions and saying ‘no!’ more often.
What is the biggest mistake you’ve ever made in business and what did you learn from it?
When the wedding reception business was trading well, I decided to diversify and expand into a different industry – honeymoon travel. I figured that I knew hundreds of couples that were getting married and it would be great to organise their honeymoons and enjoy the jet-setting life of a travel agent. I figured wrong.
Our travel agency, Happy Honeymoons, started off with great marketing and lots of wide-eyed enthusiasm, and ended up competing on price in the cut-throat low-margin world of the discount travel agent. Over a period of three years, I lost $250,000 and a considerable amount of hair. I did, however, find out how to make a small fortune out of the travel business – start with a large fortune and work your way down!
The biggest lesson was ‘focus on your core business’. If you’re bored with the core business find a different angle or sell it. Don’t place your attention on a distraction. Success in business requires a focus and a serious commitment. I also learnt that just because you can do something, doesn’t mean you should. I think it’s important to carefully look at your competitive advantage and your real reason for going into business. If you are going to compete on price alone in a low volume business, then you really don’t have much to sell. Don’t open a business purely for ‘lifestyle reasons’ and definitely don’t do it to create employment for friends and family!
A common mistake for an established business is getting distracted because you are too comfortable. Comfort is the enemy of greatness because we get bored and lose focus. Sometimes the distraction takes the form of a new business opportunity and sometimes it’s non-business – like an overwhelming interest in car racing, boating or unpaid work for an association, charity or government group. Remember, stick to your knitting!
“...build trust and respect is crucial in order to empower and engage other people...”
What do you think are the essential qualities or attributes of a successful business owner?
The days of old-school ‘command and control’ business owners creating a fear-driven culture are nearly over (fortunately). Business owners need a very different leadership style and several qualities and attributes. I believe the ability to build trust and respect is crucial in order to empower and engage other people, as is the confidence to perform in an unfamiliar situation. Great communication skills are essential for both your team and your customers and for effective rapport building. Above all else is the ability to develop and communicate clarity and purpose for the business.
You built a large team of young hospitality staff. Can you explain the concept of Generation Y and why you believe it is so important for business owners to get a handle on this issue?
Since 1972, Australia has had a declining birth rate. Young people are in short supply and are radically different to past generations. Staff shortage is the number one problem in most workplaces. Some young staff barely want to work and others don’t want to stay. Staff want and expect more – more leadership, more love, more money and more life balance. Recruitment and retention has never been more challenging. For the first time in over 30 years we’re seeing a power shift from employer to employee. Employees can demand and get more. Many businesses are just coming to grips with the leadership style required to find, keep and manage young staff – especially Generation Y.
What are the characteristics that define Generation Y?
Generation Y are people who were born between 1980 and 1994. A generation of ‘gamers’, they have played thousands of hours of video and computer games; they are ‘digital natives’ having grown up with technology. They had different parenting and schooling than older generations. They are used to instant gratification – wanting and getting things immediately. Highly stimulated from a young age, they won’t put up with a boring job or a poor leader for long and drive the demand for better leadership in the workplace.
What tips can you offer for leading Generation Ys successfully and managing their specific needs?
There are a number of things that attract great young staff – a fast-track career path, leaders that listen and keep their promises, lots of positive feedback, praise and appreciation, rewards and recognition systems, and most of all, a good working relationship. Impressive job titles, project work and fast promotion are also desirable. Staff are looking for opportunities, not jobs, and your website is an excellent place to market your business to potential staff – what can you offer an employee? Coaching, mentoring, quality training and development, the opportunity to travel and rewards are all attractive. Young staff are highly motivated to learn and keen to improve. I have had some success building a ‘Leadership Pipeline’ of future leaders climbing a clearly structured leadership ladder.
How do you build a ‘Leadership Pipeline’ for young staff?
The first thing is selecting well. I believe that one hour of good recruitment is worth hundreds of hours of painful discussions and coaching later. Recruiting is a fast game and you need to check references thoroughly. There are some 3,500 personality profiling systems in the world. Many divide people into four main groups and combinations of these groups. Whether you use DISC analysis, Myers Briggs, the Enneagram, Hermann Brain or others, an understanding of personal styles is useful. To find out what your staff really value is very useful in helping motivate them to be more productive. A quick personality profile like a DISC test or values profiling can help determine suitability for the position and team. Clearly map out the leadership ladder and what is required for each position. Then provide leadership training and coaching to pump up your pipeline.
Having built your business to a successful and sustainable level, what made you think that it was time to sell?
In 2001, after 15 years of growth, the wedding market had peaked and changed direction, and become more competitive – more wineries, restaurants, golf courses and clubs had entered the marketplace. The number of marriages fell about 15 per cent in the year after the GST and brides wanted more casual events. I believe there is a time to sell any business and it’s not when you are nearing death. It’s better to sell near the top if possible. My businesses were in great shape but I was ‘over’ the wedding industry, so I sold off the leases to the four different venues. I retained two large freeholds and now collect the rent, which is a whole lot easier.
From your experience, what advice would you give to someone looking to sell their business?
My first piece of advice is always, always, always read every bit of any contract (force yourself if you have to), and insist, where possible, on providing the contract yourself. That way you can at least propose what you want and this will help in negotiations. Think through the different possibilities and plan for various scenarios in the future. A good business lawyer can help with this. My other piece of advice is about deciding when to sell – either sell near the top or at least prepare it for sale. Preparation and presentation are the keys to selling a business. Would you sell your car or house in an untidy state? I don’t think anyone would, so take the time to make your business great!
You regard books as an important part of your life. What business books do you recommend and why?
Yes, I am addicted to business books and bookshops, I even visit bookshops on holidays! Some of the books that are memorable for coming along at a critical time for me are:
• How to Win Friends and Influence People by Dale Carnegie – this book taught me about people and basic leadership skills, which I desperately needed.
• The E-Myth by Michael Gerber – this book showed me the systematic path to success.
• Think and Grow Rich by Napoleon Hill – this book helped improve my mind-set.
• The 80/20 Principle by Richard Koch – this book taught me to prioritise.
• Rich Dad, Poor Dad by Robert Kiyosaki – this book is about understanding basic finances.
Some of the most useful, must-read books for small businesses are:
• What Rich People Know and Desperately Want to Keep a Secret by Brian Sher – a sensational book covering the major areas of personal and business success.
• How to Make Money Out of Thin Air by Brian Sher – a book that offers a complete overview of business.
• Billionaire in Training by Brad Sugars – a book about buying, fixing and selling businesses.
• Instant Cashflow by Brad Sugars – a book that focuses on marketing your business.
• Cash, Customers and Ads that Sell by Brad Sugars – a book that is all about advertising techniques.
“...always, always, always read every bit of any contract (force yourself if you have to)...”
I’d also cast my vote for ‘business book of the decade’ to Good to Great by Jim Collins for his excellent work on business strategy, leadership and teams.
In your opinion, what’s the most common mistake made by new business owners?
I believe the number one killer of most small businesses is a lack of money. The second biggest would be a lack of basic knowledge about finances. Most start-ups are seriously underfinanced and most initial sales projections are significantly over-estimated. The initial costs for a start-up can be staggering. Sales growth and turnover will, almost without exception, be far slower than expected. I nearly went broke three times when I took my eye off the finances as I was renovating or expanding the business. If you’re going into a new business, I suggest you go in with your eyes wide open. It’s no good once you’re half way in to realise that you really can’t afford it. Financially committed, with a half-setup or half-renovated business is no place to be.
Financial knowledge is essential. If you don’t have any skills in that area, hire some! Understanding how you can have money in the bank and still not be making a profit makes all the difference to survival. This means taking it easy on the personal toys, capital expenditure and renovations in the first few years. A big, unexpected tax bill or bad debt could wipe you out, so make sure you keep an eye on the finances. I once read a great quote: ‘Business start-ups are always much slower, harder and far more costly than you planned, and if they’re not – call me, I want to invest!’
Who are the mentors that have inspired you? What important lessons have you learnt from them?
The most inspiring mentor in my life was my grandfather. Fred Brock ran multiple businesses (he was a true entrepreneur) and was always on the look out for new ideas and different opportunities. He taught me all sorts of lessons about business and life. Grandpa Brock was the first to give me a whole weekend’s work and pay me for it. He instilled a work ethic and taught me the benefits of hard work and believing in yourself. I learnt from his entrepreneurial activities. He also got me interested in trading shares while I was still at school. I also learnt from some of Grandpa’s mistakes – lack of financial focus and planning. There was always some customer problem that had to be rectified and he let me be involved in that process. If you can solve a customer’s problem effectively, then the solution will be remembered far longer than the initial problem; great customer satisfaction and service recovery is something that we have always been known for.
Is there a significant quote or saying which you live your life by?
There is one quote that changed my life and is still pinned up on my wall: ‘In one-hundred years’ time, it won’t matter what your bank account was, what house you lived in or what car you drove. The only important thing will be the impact you had on a child’s life’.
“Working on the 8S strategy can make your business more valuable...”
Around the time of the millennium I was wondering why I was always busy, why I was working so hard in hospitality and what impact that would have on my young family. I thought ‘get your priorities right’. I believe that business is addictive and work/life balance is important. Many parents work really hard to provide for their kids and give them lots of ‘stuff’ in lieu of time. Sometimes time is love and it’s not about the ‘stuff’.
You now work as a professional speaker and deliver a presentation about the ‘8S’ – a strategy for improving business. Can you share this with us?
I developed the ‘8S’ strategy to provide a quick checklist to discover the things that can add or destroy business value – whether preparing to sell it or just improve it. For most businesses the 8Ss are: staff, sales, strategy, systems, sustainability, stock control, structure and suppliers. And you can always add another ‘S’ – service.
Working on the 8S strategy can make your business more valuable in both the long and short term. As Stephen Covey says, ‘Always begin with the end in mind’ – you can use the 8S strategy to improve the business you’re building and how it should look when you sell it.
What are your top tips for developing a great small business?
• Have just one captain – decide who’s really in charge because shared responsibility is no responsibility.
• Create and communicate more organisational clarity – be really clear about the roles and responsibilities within your company and articulate your vision.
• Focus – it’s really important to focus on your company’s direction, with special attention given to the financial side of the business.
• Plan! (P.P.P.P.P.P.) – prior preparation prevents a pretty poor performance.
• Develop more systems – ‘Systemise the routine; humanise the exception’. (FedEx)
• Practise – make sure you offer cutting-edge customer service.
• Think – spend some time thinking about the various ways to be different, innovative, creative and exclusive.
• Don’t pretend or delay – learn to take action right now!
• Go the extra mile – build great rapport and long-term relationships by doing that little bit extra.
Free
Bonus Gift
David Staughton has kindly offered a free bonus gift valued at $39.95 to all readers of this book...
How To Find And Keep The Best Staff – Having achieved his goal of becoming a millionaire through his own business, David Staughton is today a professional speaker and trainer to dozens of fast-growing companies. As a result of his first-hand experience, David as created a powerful workbook full of tips and techniques for finding and retaining the best staff for your business. By following his ideas you’ll discover how to reduce staff turnover, improve productivity, boost your sales and improve the value of your business.
Simply visit the private web page below and follow the directions to download direct to your Notebook or PC.
www.SecretsExposed.com.au/small-business-owners
Pride In Identity
Joshua Nicholls
“In five years, Platinum Electrical should be in its fifth year of franchising and our very achievable projections for growth indicate that we will have 50 franchisees with approximately 150 vans on the road.”
Profile
Joshua Nicholls
Joshua Nicholls was born in Sydney in 1979 and raised by his parents to value hard work, save money and be appreciative. Josh attended a local high school and had to work extremely hard with the aid of a tutor to pass his subjects. Even at 14 years of age, he understood the power of delegation; he realised that if he was nice enough to the girls he wouldn’t have to do his school work, because they would do it for him.
At the age of 15, Josh left school after completing his Higher School Certificate and began his electrical apprenticeship. After completing his apprenticeship and spending a further three years as a qualified tradesman with the same company, Josh decided to venture out and start his own business.
In December 2001, when he was 22 years of age, Josh formed Platinum Electrical and started as every other ‘man in a van’ business does. He worked in the field during the day and completed paperwork at night on his bedroom floor in his parents’ house. Long days and long nights made for a tiring 90-hour working week.
From its humble beginnings, Platinum Electrical has now grown to have 30 employees and has witnessed much success. Platinum Electrical Contractors has been a finalist and a winner in many small business awards with the biggest achievement in 2005 when it was named the Australia Post NSW & ACT Small Business of the Year. Platinum Electrical was also named the 36th fastest growing start up company in Australia in 2006. In 2007, Josh launched the franchising of Platinum Electrical with plans to have 50 franchises within five years.
Josh lives in Sydney with his wife and is actively involved in a dynamic and contemporary Christian church. He enjoys balancing work with play by surfing and playing golf.
What gave you the motivation to start your own business at 22 years old?
Watching the lifestyle of my previous employer was my first motivation for starting a business. As a tradesman, I would walk into the office at 7:30am to receive my job schedule for the day. The managing director would stroll into the office at 8am, say ‘hi’ to all the guys, make his breakfast at a leisurely pace, and then go upstairs to his office for the day. I also watched how he had a team in the office that handled the day-to-day operations and stress of the company, and that really appealed to me. However, what ultimately encouraged me to make the decision to get into business at only 22 was the confidence I had in my ability as an electrician. I was definitely the typical good technician with no business skills at all – when I first started business I didn’t even know how to turn a computer on! Also, because I started at such a young age I didn’t have a lot to lose. I had no mortgage, no wife or family and no overheads, therefore starting a business for me was somewhat low risk and the decision was relatively easy to make.
You started as a one-man business, what steps did you take to expand?
Originally, expansion occurred through naive and basic sales techniques. I would arrive unannounced on potential customers’ doorsteps, in my ‘King Gees’ and with a handful of business cards. Although the delivery has improved somewhat over the years, the content hasn’t changed. I grew the business and continue to grow it today by promising clients superior service they cannot find anywhere else and by always ensuring that we deliver on that promise. Word quickly gets around that we are a professional and reliable organisation and so referrals continue to help the growth of the company.
I have also expanded the business by creating room for growth. I lead my business based on the principle of ‘make the space and you will fill it’. Small business owners are often too scared to put on a new staff member, buy a new van or purchase a new premises because they are worried they won’t have enough business to fill it. This is a trap that many small business owners fall into because it limits their potential growth. It’s all about calculated risks and it’s important to take these risky steps because they push you and your business forward. As you get more comfortable taking the calculated growth steps it becomes a lot easier and more frequent. Often I will employ new electricians and purchase a new van when I only have a 50 per cent workload for them. However, if I didn’t take that step, I would not have had the space to service new customers. There is nothing that motivates me more to attract new business than having a van sitting at the office not earning money!