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GROUP BUYING: HOW MAKE IT WORK WITHOUT HIGH COSTS OR RISK The magazine for ambitious Australian business owners

APRIL 2011 • $6.95 (gst inc.)


Staff theft

How to spot it How to stop it

Paula Ward’s start-up teaches sport to improve business

Fleet management

Why you need a specialist to get into top gear

Inbound investment agencies • Facebook and mobile marketing tips

APRIL 2011


cover story



news and views peter strong brad sugars gadget guide BEC news back of the envelope

Thinking outside the square and indulging your passions can open up a world of unexpected business opportunities. Paula Ward reveals how her life-long love of sport kick-started a whole new career.

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features FINANCE

Tax tips and traps


Tax time may still be some way away, but it’s time to start getting your financial ducks in a row to make the process painless. Ethical investment 28 Ethical investment is no longer just a reflection of green or social justice commitment. Many ethical funds beat more traditional investment options.

fleet feature



Group buying grows up

There’s more to running an efficient vehicle fleet than knowing where to put the petrol. Find out why you need a fleet manager, and how an enterprising pair turned their fleet into an advertising business.




This online buying phenomenon offers businesses a new way to harness the power of social media. How social is your database? 34 Find out how to integrate your social media presence with your traditional customer databases to create the optimum marketing strategy for your business. TECHNOLOGY

Customer relationship management software


Realise your business’s full potential by managing all your important contact data through CRM software. We help you find the right one. EXPERTS Running your own business can be lonely, but there are plenty of individuals and business networks out there to offer support and advice.


Mobile phones are a way of life. Discover how to leverage their popularity and boost your bottom line by incorporating them into your marketing strategy.

Thinking of taking your business to the world? Find out where to get advice and the sorts of financial incentives available to help you get up and running.


robyn anderson sheralyn guy tony gattari phil lee brian walker ivan misner sue hirst michelle gamble donna stone

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Could your business be a victim of employee theft? Point-of-sale software can help you detect and stop employees helping themselves to your profits. 1

NEWS&VIEW EdITOr’SNEWS&VIEWS lETTEr I discovered, in the middle of March, that it was National Bacon Week. Celebrating bacon’s crisp, salty, artery-hardening yumminess was not, however, the only aim of National Bacon Week. Australian Pork Limited, the promoter of the week, also used the occasion to point out that we import about $10 million of pork each week. A lot of it comes from nations which, pardon the pun, indulge in considerable porkbarrelling by subsidising their pork industries. The result is that 70 per cent to 80 per cent of the bacon on your plate comes from overseas, which isn’t good for local pig farmers. For me, any mention of pig farmers evokes the fact that former Prime Minister Paul Keating invested in a piggery. Disputes about Keating’s behaviour in the transactions surrounding his investment burbled on for years. As I recall, the then-opposition made merry hay disputing almost every fact involved and asking question after question after question about the farm, attacking on every imaginable angle. A quick look at the Hansard archive suggests questions were still being asked as late as 2001, five years after Keating had left parliament.

nEw EfTPos fEE noT wELComE


FTPOS Payments Australia Limited (EPAL), the company owned by major financial institutions that provides the EFTPOS payments service, has introduced new “multi-lateral interchange fees (MIFs).” EPAL currently charges a single cent for Keating, for what it is worth, defended himself by saying that piggeries most transactions, but the new multi-lateral were just the kind of modern agri-business Australian needs to get ahead. interchange fees will see the company charge five cents for transactions worth $15 or more Australian Pork’s Bacon Week seems to want to make a similar point. and 15 cents for transactions that include cash But that point seems to have been lost many years ago, an example of how useful withdrawals at a merchant. outcomes for business can be derailed by political point-scoring. I can think of at least one In a press release, EPAL said the new fee is contemporary debate that seems headed for the same fate, and hope business gets what “part of a package of measures to strengthen it needs from that debate. I suspect the outcome we all need will require rather the competitiveness of the popular system” and more nuanced thinking than is currently on display. “will support investment in enhancements to the EFTPOS network which will make it more secure, convenient and accessible for both retailers and consumers.” Rival EFTPOS provider Tryo was predictably NATIONAL COMMERCIAL DIRECTOR EDITOR Simon Sharwood 0414 373 726 Tony May 02 8923 8001 critical, saying the increase “is unjustifiable and mybusinesseditor@mybusiness untimely in today’s banking and retail environment.” ADVERTISING SALES MANAGER The Australian Retailers Association (ARA) ART DIRECTOR Christine Gould 02 8923 8007 took a similar line, saying “Smaller retailers in Kristi Holahan particular should not be expected to cop increased PRODUCTION EDITOR EVENT COORDINATOR interchange fees from banks that are posting giant Gail Lipscombe Simone Benson 02 8923 8003 profits, especially because they don’t hold the PRODUCTION MANAGER same bargaining power as larger retailers when Russell Montgomery SECTION EDITORS negotiating with their banks nor do they have the CONTRIBUTING EDITOR Marketing - Natalie Apostolou time and resources to try.” Finance - Tiffany Hutton Nicola Card 03 8534 5036 Technology - Lia Timson The ARA also calls for banks to “do the right thing in absorbing costs related to the new SYDNEY OFFICE MELBOURNE OFFICE Level 12, 99 Walker St 99 Bay St EFTPOS interchange model.” North Sydney NSW 2060 Brighton Vic 3186 My Business readers, who we asked to T 02 8923 8000 T 03 8534 5000 F 02 8923 8050 F 03 9530 8911 comment on the new fees in our e-newsletter, struggled to see a benefit. Warren Mendes, a Consultant with international strategy and marketing consultancy Simon-Kucher & Partners said the new fees “may cause businesses to either discourage EFTPOS or simply pass on the charge to customers.” MY BUSINESS IS PUBLISHED BY COMMSTRAT ABN 31 008 434 802 “Many retailers already pass on high interchange fees for certain credit or debit cards. It would not be My Business material is copyright. Reproduction in whole or part is not allowed surprising if they responded by doing the same thing for the MIF. If this happens, it will be up to the consumer without written permission from the editor. Investors should seek independent to decide which payment method they prefer.” advice before entering any contracts. Peter Marshall of Soil Stabilisation Service told My Business the new fee is “... a typical story of politics and big business distancing themselves from the crap through intermediaries.” SUBSCRIPTIONS See page 69 for subscription information “The $0.15 is really a slug for people accessing their own money and has to be passed on to customers, so the banks may well find more automatic teller machines are required,” he added. ONLINE visit Another correspondent, Pete Hughes of Ballarat Materials Handling Equipment, was angered by the new PHONE on 03 8534 5000 fee. “Let’s welcome back the cash economy with open arms,” he wrote.

“Let’s welcome back the cash economy with open arms.”


APRIL 2011

Smartphones Citrus bug must be stopped hit $99 Smartphone prices have fallen to just $99, after Telstra launched its new Smart-Touch pre-paid phone. The mobile boasts a touch-screen, Wi-Fi and 3.2 megapixel camera. Google’s Android operating system runs the show and includes a web browser, email and more. The version of Android used, 2.1, is now more than a year old and the phone’s screen is small and uses less-sensitive touch technology than high-end smartphones, so you’re not getting a state-of-the-art device. But Telstra has improved the value of the recharges offered to its pre-paid customers, and you’ll struggle to find a smartphone for less.

WS NEWS&VIEWS Japan’s woes to impact our economy ustralian businesses are bracing for local impact from Japan’s earthquake and tsunami. “Twenty-three per cent of Australia’s energy exports are to Japan and a significant shift in that demand could have serious consequences for Australia’s coal and burgeoning Liquid Natural Gas (LNG) exports,” warned Dr Liam Wagne, a research fellow and energy economist at the University of Queensland’s School of Economics. “The resources industry will certainly start to feel the effects of ‘force majeure’ clauses in delivery contracts in the coming months,” Dr Wagner said. “While it is still uncertain how this major natural disaster will affect our exports markets in the future, it

will certainly leave its mark on our economic recovery.” Professor Andrew O’Neil, Director of the Griffith Asia Institute at Griffith University, believes the tragedies may even make Japan a lessimportant nation and trading partner for Australia. “The unprecedented disaster in Japan poses significant threats to the long term viability of that country’s role in Asia,” he said. “Japan relies on nuclear power for around 30 per cent of all electricity generation and any serious disruption to the nuclear industry will impact Japan’s ability to fully recover.” As Japan remains an important market for Australian resources exports, he warned “This will have serious implications for Australia.”

My Business on its bike My Business editor Simon Sharwood recently rode a 100km leg of the Tour de Cure, a Sydney to Melbourne bike ride that aims to raise money for cancer research. Simon’s entry fees were kindly covered by CSC, but he’s determined to secure sufficient donations to cover that $2000 expense. If you’d like to donate to this very good cause, visit

ASIC offers free financial advice

news in brief


The Australian Investments and Securities Commission (ASIC) has launched a new personal finance website called MoneySmart that it hopes will help Australians to make better financial decisions. While the site is aimed primarily at consumers, it includes calculators that can help you to determine the cost of a loan or plan your superannuation goals. The site can be found at

Draft names bill open for comments The Federal Government has released draft bills that will, if passed, bring about a new national business names scheme. At present, businesses have to register their name in each state, a time-consuming process that can result in disputes over names. The proposed federal scheme will cost $70 to register a name nationally for three years. “Businesses operating in every State and Territory currently face a cost of more than $1,000 to register their business name nationally for three years,” according to Small Business Minister Nick Sherry, who says five percent of small businesses operate in more than one state and points out the new national scheme will be cheaper than most current state schemes. If you’d like to comment on the proposal, the draft bills can be found at You have until April 24 to comment.


NEWS&VIEWS Begin Bright

StartupS of the Month:

We’ve had so many good entries for Startup of the Month that we’ve decided to bring you four new businesses!

Begin Bright’s Tina Tower Our first startup for the month is Begin Bright, a tutoring business for preschool and primary children, founded by Tina Tower. “I started my first business, Reach Education’, while in my second year of university, which was an educational toy store, tutoring centre and party place,” Tower told My Business. “I specialised in children in mid-primary with learning problems and those who had trouble reading. I would always have to spend a couple of months just getting them to like learning again as they had learnt to hate it so much because every day at school was so difficult for them. “I then started school-readiness classes with the purpose of forming an early love of learning. If children start while they’re young and enthusiastic, then they begin school confident and don’t encounter later learning problems.” Tower, a 27-year-old mother of two, says her biggest challenge has been the public perception that schoolreadiness classes are just for the wealthy or those with learning problems. “All children should do at least a year of school readiness and the transition and attitude when they start school is amazingly different,” she said. “My goal is to have 20 franchises by the end of this year around Australia. The reason we have gone into franchising was that we were offering a licence to teach our program, but what I found was that while most teachers are very good teachers, they usually didn’t have a lot of business knowledge. Franchising means we are able to provide excellent induction business training and ongoing support through Webinars and field visits to help teachers become great business people.”


APRIL 2011

Beans & Bunches

Turbo Studio

Stacey Lenstra has a good idea: combine the beauty of flowers with the marvels of coffee. Lenstra worked in florists for six years and dreamed of owning her own florist shop. “The reality is a lot more work than those dreams,” she said on the eve of her shop’s opening. “But it’s a lot more rewarding, too. I could never have completed the shop fitout at such a low cost without the support of my family, generous friends, and a love for the second-hand rustic look.” With a small business course and a Floristry Diploma under her belt, Lenstra’s plan is to offer fresh flower arrangements and gifts for all occasions, including weddings and corporate events. Once that side of the business is blooming, she plans to add another staffer to prepare and serve coffee and cake, with this side of the business bringing diverse revenue and a good reason for customers to make repeat visits.

Cycling is taking off around Australia, and Sydney business Turbo Studio has found a niche helping competitive cyclists to improve their performance. The company offers an indoor training studio where riders indulge in ‘evidencebased power training’ that sees them strap their bikes into power meters and perform carefully planned workouts. “We work to improve the power output of each rider with consistent sessions over monthly blocks,” said co-founder Jo Palazzetti. “How this improvement translates for the rider on the road is they see a significant improvement in speed, endurance and hill climbing. Our clients are reporting marked improvements in their race personal bests across the whole spectrum – from Elite racers to recreational or graded club racers.” Business is good: a little over a year after opening its doors, the company is looking at establishing a second centre to meet increasing demand.

My Artroom Online Lee Martin’s My Artroom Online (www. is aimed at art facilitators, such as secondary school art teachers, community art teachers, home schoolers and people generally interested in art. The site offers lesson plans, workbooks, worksheets, and work samples as text and video, so that art facilitators can be more productive and create richer experiences for their clients. Martin also has big online plans in the form of a series of ‘telesummits’, called Artists Exposed, which will allow participants to ask questions of an established artist. “We will also be able to utilise technology in the classroom and students will be able to attend the interview and ask questions of the artist online, without ever having to actually leave the

An artwork by Kerry Lester, one of the artists to be featured in My Artroom Online’s ‘telesummits’ classroom,” Martin explained to My Business, “through the use of data projectors, whiteboards and PCs. The interviews will also be available to download, so students can even listen to them on their iPods.”

Social engineers boost online risks Criminals’ online tactics are more sophisticated than ever, and only awareness and vigilance can protect your business. By Lia Timson


his story is about cyberwars and whether they are real or hype. But before we talk about that, let’s discuss social engineering, which experts say is at the root of problem. Last year, at the annual BlackHat USA gathering of security professionals and professional hackers alike, a dozen contestants participated in a capturethe-flag event designed to prove that social engineering is alive, well and threatening companies.

divulged them shows that criminals don’t need to be technical geniuses – a few phone calls can yield useful information. The contest was organised by the not-for-profit and sponsored by the firm Offensive Security, whose Operations Manager Chris Hadnagy was surprised at how successful the contest was. People, he said, would always be the weakest link.

“It can be difficult to imagine how a Trojan on your PC might be connected to the Russian mafia, but cybercrime is real.”

Social engineering is the act of tricking someone to do something they should not. With the blessing of the FBI and a tight set of rules about what they could and could not ask, the contestants researched their targets on the Internet and formulated questions they thought would net results. Then they locked themselves in a room and made 140 calls to 17 Fortune 500 companies, seeking information that could be used maliciously. They were not allowed to ask for passwords, Internet addresses or login details. Employees at every single company answered the callers’ requests for seemingly trivial information such as the brand and version of Internet browser the company used, and what software programs were used to open certain emailed files. Details such as these are crucial for writers of malware and viruses, and the fact that employees happily 6

APRIL 2011

Online crime is real Even though it may be difficult to imagine how a Trojan on your PC might be connected to the Russian mafia, how your company Website can distribute malware, or how a virus unleashed on a nuclear power plant in Iran has anything to do with your business, cybercrime is real and the organisations issuing the warnings are concerned that by infecting your computer, hackers have captured the first flag in their battles. According to Microsoft’s Head of Security, Scott Charney, there are four types of cybercrime: conventional crime, such as fraud committed online; commercial espionage; military espionage; and cyberwarfare of the type engaged in by nation-states bent on using the Internet as a pre-emptive strike tool. It is the first and second of these that should concern most businesses, big or small. The rest some might dismiss as hype.

It is by infecting computers and networks that criminals obtain information they can use or sell to someone else. Their efforts to do so are elaborate: here in Australia, rogue call centres have been phoning unsuspecting victims pretending to be computer technicians from Microsoft that have found viruses on your PC. If you ask for their help, these criminals actually install viruses. Last month, Lush Cosmetics announced that its Website had been breached. Symantec estimates some 1,000 customer credit card records were compromised. So the list of attacks grows longer and you wonder, is it scaremongering? Not according to those monitoring criminal activity. “The Zeus Trojan resides on five million computers around the world, and whenever you do anything online, it is being grabbed and (your details) sold. All of the data leaks into these Zeus operators,” Uri Rivner, Head of New Technologies and Identity Protection, RSA, told attendees at the company’s annual conference in February in San Francisco. “Our research shows 88 per cent of Fortune 500 companies have employees with Zeus-infected PCs,” Rivner said. He also demonstrated a script (computer code) that when residing on an infected PC, redirects funds from the user’s online banking account to accounts elsewhere. Although it is not possible to eliminate all threats to your systems, even with several layers of security technology, training staff to think before they download, click, follow or answer calls, can go a long way to minimising the risks for your business.

Lia Timson travelled to RSA 2011 as a guest of Microsoft.


Peter Strong is the CEO of the National Independent Retailers Association Inc ( and the owner of a Canberra bookshop. He is also a Director of the Council of Small Business of Australia (COSBOA). He writes a regular column for My Business on the small business perspective on political, social and economic trends and events 8

APRIL 2011

Discrimination against small business


hy does the Human Rights and Equal Opportunity Commission (HREOC), among many other institutions, discriminate against women and men who are self-employed? Small businesses are run by all sorts of men and women. There are around 2.4 million of us and we reflect the make-up of society. This includes healthy people, people with a disability of some type, pregnant women, women with children, people from an ethnic background, tall and short people, skinny and fat people, young and old people. We also employ some five million other people, and again, this includes pregnant women, women with children, people with disabilities, old people, young people, short people and tall people. We employ people who couldn’t get a job with big business and we employ people who would rather work with us even though we are imperfect. In a small business, you are not a number; in a big business you are a number. Yet the HREOC is happy to demand that employers must understand five acts of parliament concerned with discrimination. Each one of is held responsible if someone in our workplace breaches any of those laws. So if I employ one person and that person harasses me, I am the one held legally responsible for that harassment even though I am the victim. If I sack the person who harassed me I can be sued for unfair dismissal and be forced by the government to re-hire and continue to work alongside the perpetrator of that abuse, no matter how unsafe that makes me feel. I can be fined for the incident in two ways: I can be forced to pay compensation to the perpetrator if I didn’t sack them fairly; and I can be fined for not providing a safe workplace for myself. Also, the HREOC Commissioners have supported the role of small business as the government’s pay clerk for paid parental leave. These Commissioners are happy to see women and men who run their own business spend less time with their families and instead perform administrative chores that aren’t productive and don’t help a business to grow. These Commissioners force their own philosophical baggage onto small business people. This will include instances where one woman, who has children, is forced against her will to be a paymaster for another woman who has children,

and if she doesn’t do the forced government work, she will be fined. She is forced to spend less time with her family to meet the whims of the HREOC. The HREOC has also missed many areas of discrimination against the 700,000 women who run their own business. Did you know that a big business can have a workplace-based creche and can claim all costs as business expenditure. Under these arrangements, large businesses are also exempt from paying fringe benefits tax (FBT) for the employees that use that creche. It’s a rare small business that has the resources to run a creche, yet a woman who runs her own business cannot claim child care as a business expense. If she pays child care costs for a worker, she also has to pay FBT! That is absolute discrimination against women who have children and who also run their own business. Why does the HREOC support this type of discrimination? The Commission fails for many more women. Judith van Unen, a Director of COSBOA and a noted activist for women in business, recently highlighted that “in the shadows of the business world are hundreds of thousands of women doing unrecognised, unpaid work. They complete the red tape that is demanded from government, they pay the workers and do the GST and they take undue pressure off their partners. They help the family earn an income and maintain its health. We must recognise these women at least through tax law and assistance with child care.” So the Commissioners of the HREOC need to get out of their ivory towers and discover a world of wonder called small business where people need to be treated with respect. A bit of consistency wouldn’t hurt either. The Commissioners also need to understand that every bit of administrative red tape that a small business person is asked to do is less time they can spend with their families. Every extra cost is less money available for the business owner’s mortgage. We would never ask our co-workers to spend extra time away from their families doing work for nothing, it just isn’t right. So small business owners should be shown the same respect – do not ask us to work for nothing and spend time away from our families doing your work.


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Brad Sugars is Founder and Chairman of ActionCOACH, the world’s number one business coaching firm. 10

APRIL 2011

Share your vision, build better teamwork


oes your team know what you really want your business to be? Do you have a common goal everyone in the company is working towards? Do they have an understanding of what it really takes to keep your business running day-to-day? Chances are, they don’t. However, sharing that vision, knowledge and information is the key to building a shared vision and teamwork, both of which are vital for taking your company to the next level. Basketball legend Michael Jordan once said: “Great talent wins games, but teamwork and intelligence wins championships.” This is a great quote that highlights a truth about business: not only is teamwork important, but intelligence is, too. Think about this for a moment and imagine a sports team that sends out scouts to assess the strengths and weaknesses of the opponent, but doesn’t share that information with the coach, or the team. Or a coach who has a great strategy, but only trusts it to a few key players. Management guru Peter Drucker famously said that managing people through objectives works, if only people knew what the objectives were. But 90 per cent of the time you don’t. Sharing a vision for the company and creating a single common goal or objective not only helps focus and effort, it also helps create true teamwork, because everyone is now focused and moving in the same direction towards that goal. A common goal also creates synergy and unity. When we re-branded our company a few years ago, I gave my team a seemingly impossible task: a complete re-brand in six weeks so we could present our new look and name at our global conference. Not only did our creative team rally to get this done (even if to spite me!), they produced exceptional quality work on time and under budget. Drucker has also been attributed with the quote, “If you can’t measure it, you can’t manage it,” and a huge part of measuring and managing is making sure you can create a ‘known’ for your team from what may have been an ‘unknown’. Not that you need to share deep dark secrets of the company, or how much you make, or any ‘secret sauces’ with people who don’t truly have a need to know. But if your team had a general idea of how much it costs in overheads every day, every month or each year to keep the lights on and the

computers humming, would they be more costconscious? If they knew that just a 10 per cent increase in profit margins could impact the bottom line exponentially, would they be more salesoriented, even in their customer service roles? Any company vision starts at the top, but if noone knows which direction to go in, there ends up being a lot of oars in the water, all rowing in different directions. So here are three keys to building teamwork through shared and common goals: • Keep it simple —A campaign, a turnover goal, a cost-cutting goal, a quality goal. Whatever it is, it can be simple and simply stated. A few years ago, a professional service company decided to raise its hourly fees and had a goal for “2008 billing hours for 2008. Simple and effective, and meant to keep everyone focused on generating more turnover and higher profits. And, at the end of the year, the result was 10 per cent over goal. • Make it measurable — Put a number to the goal and make sure you can track it daily, weekly and monthly. Then, actually track and measure progress. If it’s an especially big or audacious goal, segment milestones and ‘chunk it down’ to keep people on track and out of overwhelm. • Reward success, coach through failure — Obviously, there has to be buy-in for the goal and a reason why everyone needs to work towards it. So, what’s in it for the company and the team when the objective is achieved? That said, not every initiative will work every time. So, when something goes wrong, coach through the failure by asking quality questions. What happened? Why? How can the process or system be tweaked, changed or modified? What can we learn from this situation and apply to future work? As teams start working toward shared goals and objectives, interesting things start to happen, including more ownership of tasks and more accountability for results. Teams also become more cohesive and start to hold their team-mates more accountable to objectives and results. In addition, people start to move from a mindset of, “Whew! We barely made it through the day!” to, “Wow! We’re one day closer to our goals!” By the way, which company would you rather deal with? And more importantly, which business would you rather own?

If you’re confused by cricket or find football foolish, can you network effectively in Australia’s sportsmad business culture? Paula Ward is taking a punt on the fact that understanding the rules of sport can also help you to score on the balance sheet. STORY BY Simon Sharwood


APRIL 2011



f someone says they want to ‘kick something into touch’ during a meeting, are you sure what they mean? Is ‘bowling a maiden over’ a successful marriage proposal, or something to do with cricket? And when a colleague suggests ‘changing tack’ with your business strategy, are they talking about replacing little nails? If these sporting metaphors get you stuck in the corridor of uncertainty, Paula Ward is here to help. The Sydney entrepreneur has just kicked off a new business, Know the Game, which runs workshops for people who can’t even make it to the starting line when conversations turn to sport, and helps them to the top of the podium in business. Ward developed the idea for the business when, as a human resources (HR) professional for a large bank, she noticed that sport was a dominant topic of conversation among her colleagues. Having grown up in a sport-mad family with plenty of brothers and male cousins, Ward felt right at home in this milieu. She had also experienced the power of sport as a networking activity, as she was a member of the Weary Dunlop Rugby Club that helped win the bid for a new Super Rugby team in Melbourne. But while Ward played and worked hard in the company of fellow sports lovers, she also noticed that those with little interest in sport found themselves excluded from many networking and social opportunities. That thought stayed with Ward as her career advanced (her most recent role was HR Manager at a large accounting firm). Along the way, she also noticed that her peers in other firms weren’t doing jobs much more challenging than her own. “I looked around at my peers and saw that their role was similar to what I was doing,” she says.

Ward wanted more than a sideways move and started to imagine a business that would use the skills she had gained working in corporates. An initial business idea “around how to help women take steps to advance their career” proved “a little too complex for a startup”. Education about sport was part of that concept, and Ward began to wonder if a business could be built on that alone, and if it would be a more realistic business to start as a sole trader. “I thought: ‘How can I control and add value myself?’” she says. “That’s how I refined my ideas. Sport won because it is something I love and it is completely within my capabilities.”

Becoming an all-rounder Ward started Know the Game while still employed full time and formulated her products during her spare time. Once they were ready, her Website went live in early 2010 and she delivered her first workshops in September of the same year. Her boss knew about, and approved of, her extra-curricular activities, but eventually Ward’s enthusiasm for life as an employee waned. “My boss and I talked about balance and maybe working part time.” Eventually, Ward felt “it wasn’t fair to the business or my boss to try to manage both at the same time. I needed to step away and give it a real go.” Ward’s pitch for her new business is that knowing about sport gets you into the game of business. For individuals who find themselves excluded from networking opportunities or even water-cooler conversations, she feels a basic grounding in sport helps them to socialise and network more freely. “I’m not saying you need to know sport to advance your career,” she says. “But it can help.”

Help is welcome in the world of big business, which often imports migrant workers who possess skills and experience that are hard to come by in Australia. While these corporates generally offer generous relocation assistance, they don’t help with acculturation into local peculiarities such as Australian Rules Football. Ward recalls one English participant at her workshops whose son came home from school upset that he was not allowed to play goalkeeper during lunchtime football matches. The bemused parent didn’t know the first thing about Aussie Rules and its lack of goal-keepers until Ward taught him about our indigenous game. One informed parent meant one happy child! Ward also pitches her services to businesses that make sport part of their marketing, either through sponsorship or as a corporate entertainment activity. “If you have sponsorships, rather than have the same people take the same clients all the time, why not expand the pool of staff who like sport?” Ward asks. “Or why not invite clients for a pre-event session so they can appreciate the game more? They’ll be more thankful that you offered education.”

Bursting through the pack Ward quit her job in late 2010, and has already won clients including a major stockbroker and a large bank. She’s also kept working, as a contractor, to pay the bills and fund Know the Game’s development. As a sole trader, she’s networked hard to find customers and build the business, while also gaining knowledge she needs to grow. “Networks have really worked, and so has not being afraid to ask for advice, help or


COVER STORY introductions,” she says. “I take a lot of advice from people but take time to distil it. I listen about how to do it from people who have set up similar-sized businesses. One thing someone told me is that you should be ‘the lighthouse, not the searchlight’. I like that: if you make your purpose clear, people will find you.” Another important strategy is outsourcing. “I learned you can’t try to do it all yourself,” Ward says. “There are some things you just won’t be good at. For things like design work and technology, just get help.”

“If athletes want a future in the media, I can give them their training wheels.” Ward is also finding partners to help her expand and has struck up a relationship with the Australian Football League’s multicultural office, which now understands Know the Game and the services it offers that can help to promote the code. Ward is also talking to the Rugby Union Players’ Association and Cricket Australia about securing athletes to join her at training courses. “We’re talking about giving them a chance to help athletes with lesser profiles and public speaking skills. I will help them with their presentations, which benefits the athlete, and I get the added attraction of an athlete at my courses.” “If athletes want a future in the media, I can give them their training wheels.” That part of Know the Game draws on Ward’s core skills in HR, and she’s also drawn on those skills to keep watch on herself. “When I started, I wasn’t having weekends and I pretty much skipped Christmas. I remembered it’s important to take a break. Now I’m still driven, but also paced and scheduled.” This year’s schedule is busy. In addition to finding new clients for her workshops on AFL, Golf, Tennis and horseracing, Ward expects strong demand for Rugby Union. “Businesses I know are taking clients to New Zealand for games in the Rugby World Cup,” she says. Rugby enjoys its peak exposure in World Cup years, but many people forget its intricacies between tournaments. The Cup therefore represents a chance for Ward to help many businesses get more value from their investment in the event. “I can see a lot of scalability to this business,” she says as the clock runs down on our interview. “In time, I think we can even look at whether franchising is an option so more people can run the workshops.”


APRIL 2011

Sporting clichés deconstructed We used a few sporting clichés in this article. In case you’re a candidate for Paula Ward’s services, we decode them here. To ‘kick something into touch’ refers to kicking a ball beyond the boundaries of the playing field in the four football codes. When this happens, the game pauses briefly. If the allotted time for a game has elapsed, kicking the ball into touch ends the game, making this a complex metaphor when used in business. ‘Bowling a maiden over’ is a term that describes a bowler in cricket who bowls six times without conceding a run. ‘Taking a new tack’ is a sailing term that refers to changing a sailboat’s course to take best advantage of shifting wind conditions. ‘The corridor of uncertainty’ is a cricketing term that describes a ball which is bowled in a position where the batter can chose to attack or defend, but can do neither with certainty. ‘Making it to the starting line’ refers to any race and invokes the fact that much preparation is required to participate in any contest. ‘All-rounders’ are cricketers who can bat and bowl with the same skill as specialists in either discipline. ‘Bursting through the pack’ is an Australian Rules metaphor that describes a player who carries the ball through a group of tightly-bunched opponents (the ‘pack’) and emerges safely in clear space. This feat requires a combination of speed, strength and evasive skills. ‘The top of the podium’ refers to the platform used to award medals to athletes after sporting contests. Podiums have three steps, with the highest reserved for the winner of a competition.

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Paul Slee and Lachlan Nally

A new advertising vehicle

Paul Slee and Lachlan Nally decided the fleet of trucks they use for their online shopping business could become an advertising vehicle as well as a delivery tool. The result? A new business selling ads on trucks. STORY BY Simon Sharwood 16

APRIL 2011


“You see so many blank trucks on the roads, we felt there was an opportunity to start a business.”

One of Truckside Ads’ vehicles on the road


aul Slee had an advertising problem. “We tried all the usual types of ads,” recalls Slee, 22, who six years ago started Perth-based Internet shopping service with friend and partner, 23 year-old Lachlan Nally. “We used radio, newspapers, but none of it was very effective. We did get new clients, but the cost of acquisition was just too high.” A better advertising vehicle turned out to be staring Slee and Nally in the face every day, in the form of the fleet of trucks that ezyshop uses to deliver goods to its customers. Informed by a mixture of hope, optimism and desperation, Slee “started spending money on graphics on the trucks”. Sales took off. “Before we knew it, it was paying for itself,” he says. “We found the response was a lot quicker that with other media. People would ring us up a day or two after they saw an advertisement.” After a few weeks of this strong response, the penny dropped: if ezyshop was getting strong results from its own small fleet, surely the tactic would also work for other, larger, fleet operators? And surely sole traders like couriers would appreciate the chance to make some extra cash by displaying ads on their trucks? “You see so many blank trucks on the roads, we felt there was an opportunity to start a business,”

Slee says. To launch the new venture, called Truckside Ads, Slee and Nally decided to “become our own case study to productise it”. The pair’s message was that lots of advertising opportunities talk about brand awareness, but ezyshop’s experience proved that trucks delivered return on investment. “Everyone talks about brand awareness and stuff, but in business, you have to put money in the bank,” Slee says. Another critical element of the new business was a system that made truck advertisements removable, which made it easy to change ads once a campaign ends.

Sharing the cash Removable ads are also important because they mean third-party truck operators can trial Truckside Ads without having to make the big commitment of sign-writing on their vehicles. That easy entry to the advertising business has quickly seen Truckside Ads secure partners rolling around every Australian capital city save Darwin and Hobart. “We charge advertisers $800 a month for a truck. It’s usually on the road for 10-12 hours a day, five days a week. We then pay drivers or fleet owners a monthly commission of $200 to $350 a month,” Slee says.

“We put the ads on the trucks when they are off the road, so there’s no downtime. The drivers get extra income for doing nothing.” The medium continues to be successful – Slee says one client generated $90,000 of business in just three days. My Business asked Slee how consumers can respond to advertisements on trucks, given that it’s hard to put a memorable call to action on a vehicle that zooms past while you’re driving. Slee says the call to action is less important than messaging, and that the right message brings in steady inquiries. Truckside Ads message, meanwhile, is finding receptive ears offshore. “My last trip to Singapore was very exciting; there is definitely room for progression abroad,” Nally says. “We are busy developing a business model that will ultimately allow that transition, but for the time being, our focus is the Australian market,” he said. And Australia offers the company plenty of room to grow. “We do have some large contracts coming,” Slee says. “That will increase our reach.” The company is also considering other innovations to make its product more attractive. “There is some interesting advertising technology coming out of America that we are keen to use in our service in the next year or two.” 17


gET yOur flEET IN gEar Fleet managers need to be more than mechanics: financial and legal skills are also necessary to keep your business rolling. STORY BY sImon sHARwood


f you’re an average motorist and scarcely know a carburettor from a cylinder, the vehicles in your business are probably a mysterious — if essential — generator of outgoing funds. Don’t worry if you’re ignorant; vehicles probably aren’t your core expertise. But do invest in an expert to ensure that you can operate your vehicles safely and cost-effectively. These experts are called ‘fleet managers’ and according to Ken Thompson, a Director of the Australian Association of Fleet Managers, a good one will have a very broad set of skills. “Fleet managers need to understand change management, contract management, people management and negotiation skills,” he says. Thompson says that when hiring a fleet manager, you also need to break down your transport needs to strategic and functional considerations. “You can outsource the functional things like maintenance, a fuel card and registration. They are administrative tasks that are not strategic for many businesses. “But you need someone who understands your business and its transport needs. You cannot outsource that strategic management of a fleet because when you do, it becomes out of mind. Smart business owners, he suggests, therefore make sure they have a fleet manager to see they get the right transport and the right processes to support it. “What you really need to understand


APRIL 2011

“The fleet is usually the third highest outgoing for a business and you lose 50 per cent of its value in three years.”

is that this is a risk management process and the outcome is safety,” he says.

duty of care Lately, he adds, fleet managers have been asked to take ownership of some complex legal issues, especially the concept of a ‘duty of care’, the legal concept that says you must do everything in your power to foresee and minimise risk to your workers. “The biggest single issue for fleet managers is in the area of occupational health and safety (OH&S),” he says. “It’s an issue, because

it is getting more and more attention from the courts.” Recent court rulings, he says, have made it plain that a vehicle is now considered to be a workplace. The same safety rules that apply to other workplaces also apply to work vehicles. If your business provides workers with a vehicle — either because driving is an essential part of their role or even, under some circumstances, as part of a salary package — you owe anyone who drives it a duty of care. “If you provide the vehicle or ‘own the task’ — you ask an employee to do something that involves transport — you have a duty of care,” Thompson says. “You must actively manage that process.” Managing the process starts with basics like ensuring proper licensing. “If you are providing a vehicle to an employee, you have to ensure they are legally able to drive it, with a current licence. You need to check if they are licensed and your employment contract must include a responsibility to inform an employer if the employee loses their licence,” Thompson says. Insurers, he adds, want to see this process is not just a token effort. Should an employee mislead you about the status or existence of their licence, “you need to prove you have done everything practically possible” to secure and verify the right information.

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GET your fleet in gear You may also need to go so far as to check that your team’s partners are fit to drive a vehicle you supply. “Check other drivers’ eyesight if partners are allowed to drive,” Thompson suggests, as this kind of rigorous consideration of risk is needed to ensure that you cover all contingencies. Another issue fleet managers need to understand is how they work with outsourced providers of fleet services. “What systems do you have to learn if something misses scheduled maintenance?” Thompson asks, explaining another dimension to the risk awareness fleet managers must possess.

Finance Financial management is another core fleet management skill, because vehicles are costly to acquire and generate plenty of ongoing costs. “The fleet is usually the third-highest outgoing for a business,” Thompson points out. “And you lose 50 per cent of its value in three years. Those costs are higher than those for other departments, and of course no-one ever doubts they need an expert manager.” Sadly, fleet managers are hard to hire, in part because no formal training programs for this role exist. The Australian Association of Fleet Managers is working to address this, but for now Thompson points out that a fleet manager’s skills are “common to any type of management”. The Association publishes guides to help non-specialists come up to speed on fleet-specific issues, and has recently created new documents outlining the duty of care business owes anyone who uses its vehicles. But Thompson hopes that, before long, more businesses hire dedicated fleet specialists. “We [fleet managers] are at the forefront of two images: safety and the environment,” he says. “That is where fleet management deserves to be.” 20

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Fleet management technology The GPS navigation units that are so popular among directory-challenged consumers are also a big hit with fleet operators, but not just for guiding drivers to their destinations. GPS units for use in fleets also track vehicles, so that fleet operators can monitor drivers’ activities. One reason to do so is safety: GPS can quickly detect speeding drivers so they can be encouraged to adopt safer driving habits. Another application for GPS is spotting the location of your vehicles so they can be despatched to nearby requests for help. Utility companies, for example, use GPS to find repair crews nearest to a customer who

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needs help. Used in this way, GPS can help you to offer better and more timely customer service. To implement this kind of service, you’ll need specialised GPS units in your vehicles, plus software to track them. A gentler and cheaper introduction to business-grade GPS comes in the form of devices like Garmin’s $599 nüvi 465T, which helps truck drivers by guiding them to their destination while offering options like avoiding roads on which it is not allowable to transport certain goods. You can also inform the machine of a vehicle’s height and it will avoid routes that take it under bridges or through tunnels that are too low!


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Tax tips and traps Don’t sweep your tax under a rug. Start your tax planning now to keep the tax office – and your bottom line – happy. STORY BY Tiffany Hutton


hink it’s too early in the year to be thinking about tax? Sorry, it isn’t. When you’re running a business, tax has to be top of mind, most of the time. Your compliance obligations take different forms depending on the nature and structure of your business, but tax is a constant. Tax ‘planning’ right at the end of the tax year isn’t tax planning, it’s an afterthought – and it isn’t necessarily in the best long-term interests of your business. Certainly, there are actions you can take as the end of the financial year approaches (see our expert tips box below), but these should form part of your overall tax planning, and should not be used as a lastminute exercise. Although tax is a huge and complex topic, that doesn’t mean you can’t have a handle on the most important concepts, even if you leave the details to your accountant or tax adviser.


APRIL 2011


Tax planning versus tax avoidance Tax planning is, in the words of the Australian Taxation Office (ATO), “when you organise your tax affairs to give you the greatest tax advantage”, and is both legal and acceptable when you do it “within the letter and the spirit of the law”. It may sound simple, but it’s not. While you might be able to manage your dayto-day tax obligations, it’s always best to get professional advice for tax planning or strategy. Peter Knight of Knight Partners, specialising in financial and strategic management advice, says the best approach is to “take an holistic approach to tax planning. Look at all areas of your income and expenses, including capital gains tax. For instance, you may have made a capital gain on a particular transaction and be subject to tax on that. But if you look at your overall position, you may have other assets which have an unrealised capital loss. You might think of disposing of those assets and thereby crystallise that loss, which can then be offset against the gain, and your overall tax position is reduced. Obviously you need to consider your overall asset strategy, but you can see the point this example highlights.” Strategies such as timing your realisation of capital gains or losses are legitimate. What you have to steer clear of is tax avoidance, or ‘aggressive’ tax planning, which involves organising your tax affairs in a way that does not comply with ‘both the letter and the spirit of the law’. The ATO has its bases covered with that phrase because, in theory, you could be complying with the actual wording of a statute, but still be guilty of tax avoidance. If in doubt, get advice.

Be extremely wary of any enticing tax schemes, no matter the source. It may be a cliché, but if it sounds too good to be true, it probably is.

In the line of fire: ATO targets In last year’s Federal Budget, the government pledged additional funding to the ATO, specifically so that it (the ATO) can focus on GST compliance over the next four years. You may already have noticed that the ATO has upped its correspondence, with reminders about lodgement of your BAS arriving via both mail and SMS. Some of the areas that the ATO is currently targeting include: • T imely lodgement of activity statements – If you lodge late, you will be fined, and you’ll also receive more correspondence and reminders for future statements. • O utstanding obligations – Businesses who are behind on their payments will find more stringent requirements in place, and repeated defaults may lead to prosecution. Keep GST and PAYG amounts in a separate account as they accrue, and don’t be tempted to use them if you hit cash flow difficulties. • G ST refund claims – The ATO is cracking down on refund claims, and will be substantiating records for claims it believes to be incorrectly reported or false. • G ST avoidance – Businesses that avoid registering for GST, or register in false names in order to avoid obligations are also a target. • D odgy debt – The ATO will be keeping a close eye on ageing GST debts and those who use debt to avoid tax obligations.

The ATO uses sophisticated benchmark data for analysing compliance and reporting issues – if your business falls outside the benchmark for your industry, you may be audited. There can be viable reasons for being outside the benchmark, but you should be aware of the benchmarks for your industry. (You can find them on the ATO Website at under ‘Small business benchmarks’.) The take-home message is clear: keep your books in order, submit your BAS on time, pay your GST obligations and don’t be creative with your refund claims or general record-keeping. The ATO has significantly increased its audit activity, so don’t think it won’t happen to you (later in 2011, My Business will explain what to do if you do get audited).

Gimme a break: small business concessions It’s not all audit and prosecution. Although it may sometimes feel like it, the ATO isn’t trying to make life difficult for the business owner. In fact, it recognises small business as an important contributor to the economy, and offers a number of concessions designed to encourage entrepreneurship, innovation and investment in business. To be eligible for these concessions, your business has to have an aggregated turnover of less than $2 million. Concessions aren’t automatic, and you need to check that your business is eligible for each of the options listed here: •E  ntrepreneurs’ tax offset (ETO) – If your business’s aggregated turnover is less than $75,000, you may be able to use the ETO to reduce your tax payable by up to 25 per cent.



Tax TIpS aNd TrapS

“In this world nothing can be said to be certain, except death and taxes.” Benjamin Franklin

• Small business tax break – You can claim a tax deduction of 50 per cent of the cost of eligible new assets costing $1,000 or more. • CGT 15-year asset exemption – If your business has owned an asset for 15 years or more, and you are 55+ and retiring, you won’t be liable for capital gains tax when you sell the asset. • CGT ‘active asset’ reduction – If you’re selling an asset that you owned to conduct your business (an ‘active asset’), you will only be liable for tax on 50 per cent of the capital gain. • CGT retirement exemption – When you sell a business asset (lifetime limit of $500,000) you may be able to pay the proceeds of the sale into a complying super fund or retirement savings account, without paying CGT. • CGT roll-over – If you sell a small business asset and buy a replacement, you can roll over your CGT liability, to the value of the replacement asset. This means you won’t pay any CGT owing until you sell the replacement asset; • Depreciation – Generally, you can pool your assets to make depreciation calculations

easier and also claim an immediate deduction for most assets costing less than $1,000 each. • Prepaid expenses – Immediate deduction for certain prepaid business expenses.

super, smsfs and tax If you’re one of the many business owners who have a self-managed super fund (SMSF), it’s important to make sure that your fund is compliant. From a tax perspective, the most important issue is to avoid exceeding the contributions caps. Unfortunately, calculating contributions can be complicated (particularly with spouse splitting, identifying whether amounts are concessional or non-concessional, etc). It’s very important to keep clear records of all contributions. While super is an excellent, taxeffective way to build wealth, having excess contributions taxed at the maximum marginal rate is not. Don’t forget also that all super guarantee contributions must be made by June 30 to be deductible for that financial year.

Expert tax tips Peter Knight’s top three tax tips: Reduce, or delay income where possible – Delay sending invoices towards the end of June, and send them in July so the income is taken into the next tax year – but make sure your cash flow can handle it. Maximise deductions by planning the timing of your expenses – If you know you will be purchasing items in July, it makes sense to buy them in June, and bring the tax deduction into the current year. Prepayments – You are eligible for a tax deduction where you prepay certain items up to 12 months in advance. This maximises your deduction as well bringing it forward.


APRIL 2011

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Investing in

and for your business There’s a difference between buying equipment, earning interest and building value. We explain the distinction to help you grow your business when you invest.


f your business is going well, your cashflow is putting a smile on your accountant’s face and you are paying yourself a comfortable wage, and you may have profits you want to invest. At this happy juncture, you have two options: invest the cash back into the business and/or invest it elsewhere. Which action you choose will depend, among other factors, on your business, what stage of the growth cycle it’s at, and your goals. Here are some tips for working out what’s appropriate:

Areas of your business that you might think about investing in, and what to consider for each, include: • Equipment – Make sure that any new equipment is really going to add to your business and not simply be an expense. Also, consider whether buying new equipment is the best option. In some instances, leasing can be more cash and tax-effective, while also allowing you to benefit from upgrades during the term of the lease. When it comes to computer systems or software, don’t just upgrade because there is a

“If you’re upgrading equipment because the new model is state of the art, that’s not an investment – it’s an indulgence.” Investing in your business Let’s start by clarifying ‘investing in your business’. Spending money on something for your business — whether it’s new plant and equipment, a marketing campaign or a software upgrade — qualifies as investing in your business if you can show a return on your investment. In other words, it’s only an investment if it is going to lead to more money for the business. This could be through increased efficiency or productivity or increased sales, but it must be measurable. Some investments are going to provide returns immediately; some will take longer. That doesn’t matter — the point is that there is a return. If you’re just upgrading because the new equipment is state of the art and slickly marketed, that’s not an investment – it’s an indulgence. 26

APRIL 2011

new version available — if it’s going to make your systems significantly faster or more efficient, go ahead. If it’s just going to take time to set up and learn, without adding to your business’s bottom line, you probably don’t need it and the money would be more better spent elsewhere. • Advertising and marketing – Again, it’s really important to measure (or at least try to forecast) the return you will get on any money you spend on advertising or marketing. If you talk to a marketer who is keen to get your business, obviously they’re going to give you the most positive spin possible on how you’ll benefit. Take it with a pinch of salt, but don’t be too cynical either — a well-directed advertising or marketing effort, no matter how small, can make a difference if it allows you to reach new clients, or converts ‘possibles’ into ‘definites’.

• Staff – You may be able to improve your business by putting more money into your staff. Would hiring someone to take on a particular task free up someone else to use their time more productively? Will offering a higher salary attract a better class of employee? You might also be able to use financial incentives to build staff loyalty — and lower staff turnover can save money on hiring costs. Staff training and education can also be an excellent investment, but don’t send staff on courses just for the sake of it.

Investing outside your business The options for investing outside your business are plentiful, from simple high-interest accounts through to property, shares and derivatives. What you choose depends on your investment goals, how much the business has to invest, your level of investment expertise and appetite for risk. Investment decisions have to be made by and for the business, so there’s a lot to consider. The simplest and most obvious are high interest accounts and term deposits. Most banks offer high interest accounts that can be linked to your business transaction account, so it’s simple to transfer any surplus cash over. It earns interest, then you can transfer it back any time you need the cash. The obvious advantage of these accounts is ease of access. If you decide to take this route, make sure you shop around. Just because it’s simple to open another account with your existing bank doesn’t mean it’s the best choice — and online banking means that it’s now very simple to transfer funds between different institutions. The interest rate isn’t the only thing to take into account. Some high-interest accounts offer ‘bonus’ interest if you add a certain amount per month; others cut the interest rate if you withdraw


Make GST work for you from the account during the month. Don’t forget also to check account fees and whether minimum balances apply. Term deposits offer less access, but usually you’ll get a higher interest rate — and it’s set for the term of the deposit, so you know exactly how much it will earn, whereas the interest rate on a high-interest account will be variable. For a term deposit to be the right choice, you need to have a clear idea of how long until you’re likely to want or need the cash for something else. You can usually access your money if you really need to, but you’ll forfeit the interest — in which case you might have been better off putting it elsewhere in the first place. Investing in the narrower sense of putting money into shares, managed funds, exchange-traded funds, and so on is also an option, but one that takes a greater commitment in time and expertise than parking business cash in an account. Although shares are often marketed as ‘liquid’, you can’t choose where the share price will be if you need to liquidate your investment, so it’s generally advisable to make such investments long-term. Higher risk investment products such as margin lending, options and other derivatives can certainly produce some impressive returns, but the downsides can be equally unimpressive.

It’s a given that you shouldn’t use the cash from your business’s GST obligations for other purposes. If you’re relying on it for cashflow, then your cashflow needs work. If you assume that you can use it now and be able to cover it when the time comes, you may find yourself paying GST late, which will attract penalties from the ATO. The bottom line: it’s not worth thinking of your GST as spare cash that can fill a hole.

• GST payment accounts – This style of account typically offers a direct remittance facility, so you can pay your GST straight to the ATO from the account. There’s at least one such account on the market that appears to offer no other benefit aside from separating your GST cash from your business funds, so do check the fine print. At the very least, you want to be earning some interest on your stashed GST.

But that’s not to say that the GST money shouldn’t be working for you. And there are a number of options:

•B  usiness saving accounts – These are essentially the same as the high-interest accounts mentioned elsewhere in this article, but the key point is that you should keep them separate from other funds. You might, for example, have a designated account where you put both your GST and PAYG funds until they have to be forwarded to the ATO.

• GST offset accounts –These accounts let you use the balance to offset interest on your business overdraft. For a business that runs an overdraft, this can be a sensible option, so find out if your bank offers it.

It pays to have connections in all the right places. Virgin Blue offers a huge network and the flexibility your business needs for success. With brilliant facilities such as The Lounge at major airports, you can conduct meetings and get down to business quickly and efficiently, in comfort and style. Virgin Blue accelerate is our air travel program for companies with a total annual domestic air travel expenditure (across all Australian domestic carriers) between $20,000 & $500,000 per annum. Here’s how our range of benefits can help your bottom line:

MAKE YOUR BUSINESS FLY *Calculation based on a Virgin Blue accelerate client spending a maximum eligible travel spend of $500,000 pa exclusive of GST on Virgin Blue annual domestic base air fares with a 5.5% rebate (air travel credit are calculated as a percentage of the GST exclusive annual spend) in accordance with the terms & conditions of the Virgin Blue accelerate program. VIR0192_02

• Earn travel credit of up to $27,500* per year • Use your credit card of choice • Enjoy discounted annual membership to The Lounge • Accumulate Velocity Points to use for local and international travel, through our frequent flyer program, Velocity Rewards To find out more about our commitment to delivering flexible air travel solutions and real, meaningful savings for your business, call 1300 246 498 or email

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Sustainable growth

from ethical investing Investments in companies with social and environmental agendas are generating decent returns and contributing to the wellbeing of the global community. STORY BY Nicola Card


efence industries employ millions of people around the world and foster innovative, wealth-creating, high-technology industries. The industry’s products have many legitimate uses, but they are also used by dictators. Some investors are now weighing these kinds of factors when they decide where to find growth opportunities for their assets, and deciding that they will only seek out ethical investments. Casinos, tobacco companies, defence organisations, factory farms, old-growth loggers and alcohol vendors generally don’t meet these criteria. Organisations with strong green credentials or those dedicated to societal good are favoured. Specialist advisory firm Ethical Investment Services says this sector is emerging as a strong alternative to mainstream investments. “All the studies over the past few years show an increase in the numbers involved in ethical investing and a higher flow of funds. People who are new investors are saying that’s the way they 28

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want to go rather than into the mainstream and we are also getting the mainstream moving across,” says Anne Marie Spagnolo of Ethical Investment Services. “Studies also indicate that the average returns of an ethical fund are extremely competitive. As an advisor, I cannot say to clients ‘You will get a better return’. We are not actually allowed to say that. But historically, all the studies show that ethical investments are producing very competitive returns and have done better than mainstream investments.” Spagnolo attributes the strength of business performance to a number of factors. “Some of it is commonsense; for example, if you look for a company that has good employee relations, staff are going to be more loyal, there is going to be higher productivity and longevity in positions. They also become an employer of choice and attract better people,” said Spagnolo, who authored The Ethical Investor.

“The important thing is that ethical investment funds have proven themselves with a 10-year or more track record in Australia. We are seeing the numbers that are proving better returns. So it’s good news for clients. It’s a double objective we are meeting; it’s a win-win because we are meeting financial objectives as well as ethical objectives, two strong consumer drives for our clients.”

Snapshot of returns According to the recent survey commissioned by Responsible Investment Association Australasia (RIAA), responsible investors enjoyed better returns than their mainstream counterparts in two out of three investment categories. The largest category, Responsible Australian share funds, returned 15.09 per cent while mainstream Australian share funds chalked up 11.56 per cent The research, conducted on behalf of the RIAA by Corporate Monitor, found that in the 12 months to June 2010, responsible investment


(managed responsible investment portfolios, community finance, green loans and responsible investment portfolios combined) rose 13 per cent to $18.19 billion. The trend is similar in the US where, in the five years to 2010, socially responsible investment assets have increased more than 34 per cent and professionally managed assets have risen just three per cent. Today, almost one in every eight dollars under professional management (12.2 per cent of the $US25.2 trillion in total assets) is involved in some strategy of socially responsible or sustainable investing. The assets and numbers of fund vehicles tracked as incorporating environmental, social and governance criteria (ESG) rose 90 per cent on 2007 findings: from 260 to 493, with assets rising 182 per cent from $US202 billion to $US569 billion. Spagnolo says her clients feel good about ‘making a difference’ in their decision to opt to invest in companies with an agenda that is driven toward sustainability. To determine which companies tick the boxes for helping address global poverty and environmental impacts Ethical Investment Services’ investment committee conducts in-depth internal research on companies and supplement investigations by tapping into research on local and global companies conducted by external agencies. “The research house provides us with the financial analysis of companies and we look at them to construct a portfolio, then we conduct internal research on what the companies actually do and to ensure it is something our clients would be happy to invest in,” Spagnolo says. “We also grade companies from deep green to green or light green; we create an individual ethical profile for each client and apply that as an indicator of what companies that individual would be happy to buy.” Companies classified as ‘deep green’ are generally those in the renewable energy sector. “A lot of our clients are very environmentally aware and want to support the technology, but we have to temper that with their financial risk profile because the more speculative companies haven’t yet proven themselves, they are still in the research and development phase. Then you will have those [companies] with proven technology

“Ethical investments are proven to generate good returns.”

that they are getting out to the market and that is also affected politically by legislation in regards to climate change.” “Others are well down the track, having rolled out established technologies that may already be getting a bit of a dividend, but in general, the renewable energy sector is still very much in growth phase, so all choices have to be in line with a customer’s financial objectives. “Other client decisions vary; for example, when it comes to animal testing, some animal rights activists abhor all testing of animals, but in some cases where testing involves biotech research or long-term benefits to society, there may be exceptions,” says Spagnolo.

Spreading branches Spagnolo says ethical investing is largely adopted by people with a pre-existing commitment to environmental activism or practices, but mainstream investors are currently shy of the sector. We still don’t know what the block is, perhaps a heartfelt commitment to environmental issues has to be in your blood,” Spagnolo says. “It seems the many people who are interested in making a difference historically go into the NGO space or work for environmental organisations, few pursue a business avenue as far as their career goes.” Despite evidence of stronger returns from investments in ethical concerns, the field is still generally regarded as a specialty service and is not without its detractors.

“In the field of mainstream investment services, there still seems to be a myth that is perpetuating. I’ve spoken to people who say they went to another advisor and talked about ethical investing and were told they would not make any money ‘because it was like philanthropy or a charity’. But if the advisors would just stop and look at the research, they would understand. We have to educate those people and help dispel all of those myths. “And while more advisors are getting into this area, very few are stepping right across embracing ethical or green investments as the main proposition or primary offering to clients. Some firms have a blended portfolio with a limited amount of money in ethical managed funds; they provide this to try and meet what the client has asked for, but they don’t have the level of knowledge or specialisation [that we do] because it does entail a bit more work.”

Ethical investment organisations If you’d like to know more about ethical investments, the following organisations may be able to help: • Ethical Investments: • Sustainable Investment Research Institute: • Centre for Australian Ethical Research (CAER): • Corporate Monitor: • Ethical Investment Association: • Ethical Investor Magazine:



Group buying grows up

Group buying has quickly become a hot marketing tactic, and a hot market for investors. STORY BY Natalie Apostolou


hey are there when you search, when you check in to Facebook, lurking among your unread emails messages and on TV: group buying offers are now so pervasive, they are impossible to avoid. In less than a year, group buying has emerged from being another US Web trend to the fastest growing online retail sector in Australia. Matching dollars with Internet hype is a rare feat, but the group buying model has found that magic potion, for the time being. With around 25 players emerging on the Australian group buying scene almost overnight and industry forecasts of 284 per cent growth generating $AU242 million in revenue during 2011, even the most cynical observers are taking a closer look. The top four sites — Spreets (which was recently acquired for $40m by Yahoo!7), Scoopon, Jump On It/LivingSocial and Cudo — represent 79 per cent of the industry’s revenues, which were estimated to be $63 million in 2010. One may be forgiven for thinking the highly cloneable group buying craze is almost too basic a concept to sustain: mix one daily deal, a gun sales team and a good media partner or online reach and there you have it. Certainly the 25 current players will not all be around in their current form a year from now. Most operators believe that consolidation will occur in the next six months, leaving around five core players and a raft of very targeted operators that specialise in particular market verticals. But the model itself, based on social reach and context, is powerful, as it taps into the backbone of economic activity, small businesses. With 2.2 30

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million small businesses operating in Australia, contributing around one-third of GDP and employing around 5 million people, it is a strong channel to market through. And as many SME’s struggling to use digital platforms as a marketing tool, let alone leverage the power of online as a revenue driver, group buying offers a user-friendly alternative. Until now, Google has emerged as the small business sector’s de-facto lead-generating machine, industry forecasters now suggest that group buying might be the next solution. Internet entrepreneur and analyst John Battelle predicts that in 2011, group buying or social deals will evolve to become a standard marketing outlet for all business, and by year’s end will be seen as a standard part of any marketer’s media mix. In Australia, the key trends in the year ahead will be a more mature use of social media, hyperlocalisation and the move to mobile platforms.

Group buying – as social as it gets “We believe group buying sites need to migrate their base onto social media platforms in order to wrap the deal,” says analyst firm Telsyte’s Senior Research Manager, Sam Yip. “They work best when they can be referred quickly to friends on their network and social referral leads to faster sales conversion,” he adds. Significantly, consumers are not loyal to any particular group buying sites at this stage, it is still all about who can provide the best deal at the best price. Jump On It is one of the more advanced social media operatives in the space and in November

2010, received a $5 million investment from one of the fastest growing global group buying sites, When Jump On It launched, it utilised the power of social media recommendations through Facebook pages branded ‘I love Sydney’, ‘I love Melbourne’ and so on in each capital city to offer its members deals on goods and services. Those fan pages, which within months built a network of around 450,000 members, were then used as the basis to crowd source the type of services and deals they offer on site. Jump On It now runs both platforms in Australia. The LivingSocial platform, which has over 10 million subscribers in 100 cities, is already exploring hyper-local offers. Jump On It’s Marketing Director Anu Mohan says: “We are about 10 times ahead of our competitors in terms of social media engagement, as a concept group buying is as social as it gets.” . Mohan adds that he does not underestimate the role of traditional media, but says that social media is key in this space, particularly in terms of longevity. “I have trialled TV and radio, and in terms of brand building, it is worth it, but beyond that I would doubt the return on investment,” he says. Hezi Leibovich, founder and Managing Director of Catch of the Day and Scoop On, which are also Web-only models, says “the TV advertising angle is not a great converter to sales”. “We have a rich history in direct marketing and the conversion from a TV ad to bring people to a web site is very poor.” While he agrees that TV is a powerful medium for the group buying outfit’s own brand, he does


“Group buying sites need to migrate their base onto social media platforms in order to wrap the deal.” not believe it benefits the client. What does work, he claims, is a high-quality database with relevancy, which means a move to more targeted, local offers. “You can have a massive database, but it needs relevancy in order to convert to sales,” he says. Mohan claims that the key learnings from both Jump On It and Living Social have been that “Facebook trends a lot higher than any other medium.” He claims the pass on rate is five to six times. Both of Mohan’s sites are marketed through Websites, email lists (1.2 million subscribers daily) and Facebook (580,000 members). “We are moving fast to get deeper into social. Twitter is on the radar — we use it to post deals and we see 10 times the potential. It is just resources holding us back at the moment,” he says.

In the margins Sustainability in this overcrowded sector will come from retaining a high level of revenue share per deal. Cudo attempts to keep its deals at 50 per cent with the client while rivals can drop down to 10 per cent, often reducing the margin in a bid to win clients over from rival group buying outfits. Telsyte’s Yip confirms that Cudo has the highest margin at 49.7 per cent and is quite rigid with its margin promise. “They offer the TV exposure and the reach, but it is about whether a small business is willing to spend more money to get access to that reach,” he says. Yip warns that once you get to that size, “you are cutting out small businesses that can’t afford those large margins.” Telsyte’s research found that the industry average is 30 per cent with no group buyer going higher than 50 per cent. “Most operators start at 50 per cent and work their way down. We found that with margins it is a deal by deal basis.” In general, Scoop On, Jump On It and OurDeal are a few points behind the average of 30 per cent. “In terms of net revenue, we are way ahead, as we’re constantly taking 50 per cent share of revenue,” Cudo CEO Billy Tucker says. He adds that those competitive players dropping to 10 per cent on deals will inevitably fail. JumpOnIt/LivingSocial Marketing Director Anu Mohan agrees. “If you go down to 20 per cent,

then natural consolidation will occur, because the business will not be able to sustain those levels.” Like most of the group buying players outside of Cudo, Jump On It works out deal revenue share on a deal-by-deal basis. He says the average deal between group buyer and retailer will be between 35 per cent and 50 per cent. “Across the board, we aim for 50 per cent and, in some cases, merchants have actually paid us to be on the list. But it depends on the vertical they operate in and the size of the business,” Mohan says. He adds that with dual platforms, clients can test the waters to see if the concept suits them. “Living Social offers local deals, while Jump On It is city-wide. We often test the market on Living Social. We control the offer quite rigorously and the merchant has a much higher level of controlled exposure so they can see how they adapt to higher demand. We ensure that customer experience does not suffer.”

The original arrives The entry of the international player that started it all, Groupon, into the Australian market will also test the revenue share model. Data on Groupon globally claims that is growing at 50 per cent a month with a revenue run rate of nearly $2 billion a year. It has more than 4,000 employees and covered 565 cities at the end of 2010. Google tried to buy it for US$6 billion, but the CEO rejected the offer. Operating under the brand due to trademarking issues, Groupon has been aggressive since its Australian launch. It has also maintained a 50 per cent policy on deal cuts and it has worked giving the company an almost unreachable dominant global position. According to Nielsen, Cudo has seen the most dramatic growth over the last five months. Spreets and LivingSocial have seen steadier growth over a longer period of time. Interestingly, all three sites have declined over the last two months at the point when Stardeals and DealMe! entered the Rankings. Our Deal, which has backing from

How to pick a group buying deal to promote your business Hezi Leibovich, founder and Managing Director of Catch of the Day and Scoop On, offers these tips for business operators considering a groupbuying promotion:

• Remember that you need to service the customer otherwise you will be overwhelmed. Do you have the resources and staff to meet the increased demand created by the deal?

• Call a couple of large players and see which ones have the time and guidance to provide a customised solution for your particular business. The same approach doesn’t work for everyone;

• If unsure about demand/supply find a partner that is flexible and can limit the number of coupons. Sometimes suppliers don’t know how many deals they can they handle;

• Many smaller companies can’t sustain the 50 per cent margin. Shop around to suit your needs;

• Find a partner that will spend time preparing you for the featured deal, what to expect from new clients and how to follow up.



grOup buyINg grOWS up

TIMElINE: The group buying investment frenzy November 2010:

Network Ten and News Ltd investment arm Nettus, says Groupon’s local entry should keep everyone on their toes. “What they have done internationally is astounding. They make me want to be better,” says CEO Julian Holman. He adds that the research and eyeballs that Groupon attracts as a successful business, only increases the spotlight on group buying. “It makes the whole vertical better.”

Hyper-local: the next frontier In the US, ‘hyper-localisation’ is the next wave in the social buying space. In March, Microsoft search engine, Bing, launched ‘Bing Deals’ for the desktop and the mobile on iPhone and Android ( on a hyper-local basis for the US. Bing Deals is an aggregator of all the available deals in a particular area or business category. It has partnered with Dealmap, a discovery and mapping aggregator tool for group buys. The mobile app uses geolocation smarts to determine where you are and provide you with all the available deals in that area and also allows you to easily share the deal with friends. In Australia, some technical and regulatory hurdles have curbed the development of this functionality, but they are already underway. LivingSocial has already gone hyper-local on the Web. “We are offerings deals in specific suburbs targeting our subscribers in those areas,” Mohan says. But most of the geographic information on subscribers is collated from the users preferences themselves, not using smart technology. 32

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“In general, technology in Australia prohibits postcode-level targeting. It is not reliable enough as it is in the US in terms of postcode targeting for specific user group catchment areas,” he says. But these industry-wide hurdles are being tackled and, if the move to mobile is swift where location-based technology is running effectively, will evolve faster than anticipated. Yip says mobile deals may be 18 months off due to the local technology challenges and the steep learning curve that merchants need to go through. “The future, however, will be in personalised and localised deals and in order for personalisation to come to life, you need location-based service tools,” he says. He suggests that those players with strong media tie-ups — such as Spreets with Yahoo!7, Cudo with NineMSN and OurDeal with Network Ten — may have a head start. That’s because they have the ability to utilise the search expertise in the case of Yahoo! and MSN, and on the broadcast side, they can leverage the deep demographic material from audience viewing patterns. Our Deal already uses database lists created from interest in top-rating shows as MasterChef to push targeted deals. The power of social buying will soon shift away from the issue of reach and move deeply into the quality of data that you have about your customer. “In six months, there won’t be a lot of acquisition targets left. As a group buyer, you will need to be either well funded or have fantastic media partnerships in place and some serious backing,” Holman says. As the market matures and a level of consumer group buying fatigue sets in, Holman says it will be up to the dominant players to enhance their offerings. “It will be about the best deals we can bring to people coupled with the best technology offering. Deal personalisation will be key as will the carving up of city geography for geolocation based deals on any platform.”

Network Ten invests in OurDeal. Takes a onethird stake alongside News Ltd’s investment fund Nettus, and Our Deal founders. US-based group buying company, LivingSocial takes $5 million controlling stake in local player Jump On It.

December 2010: Telstra enters the market, soft launching its group buying site with the Yellow Pages. Inc invests $US175 million in online coupon company LivingSocial. Groupon rejects Google’s $6 billion takeover bid.

January 2011: Yahoo!7 buys Spreets, founded by Dean McEvoy and backed by Pollenizer, in a $40 million deal. GroupPrice, the first B2B group buying site for SMEs, launches.

February 2011: Global coupon king Groupon launches in Australia on Valentine's Day as Stardeals. Local group buying site aggregator,, launches.

March: In the US, Microsoft’s search engine Bing launches an aggregator deal site for the desktop and mobile, Partnering with location-based coupon service Dealmap, it allows you to find the best hyper-local deals from a list of providers.

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How social is your database?

Database marketing is dipping its toes into social media, but it pays to ensure you integrate both efforts. STORY BY Natalie Apostolou


mail marketing and social media have been tipped as the top areas marketers will be increasing their budget spend on in 2011. According to a survey from StrongMail, nearly two-thirds of companies will increase spending on email marketing, and 57 per cent will put more dollars into social media marketing this year. Yet while budgets are set to increase, the biggest challenge for database marketers will be a lack of resources and staff to integrate and utilise the increased customer intelligence data flow. The survey suggests that email and social media will continue to get closer as more marketers integrate the two channels. Analysts have also urged businesses to consider that database marketing needs to shift in line with the way customers’ behaviour is changing. A recent report from Forrester Research, ‘U.S. Database Marketing Service Providers’, says the world has shifted from the traditional direct marketer, who simply builds a repository of names, to a world where that data can be tweaked to gain a universe of information about companies and individuals. “What marketers have to realise is that this culture change means not just trying to get hundreds of thousands of names to target, but rather deciding on who your best customers are and might be,” the report suggests. Social media is accelerating the evolution of all marketing disciplines. “Social media has destroyed the traditional definition of marketing,” claims visiting US digital marketing expert, Ryan Warren, Senior


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Ryan Warren Director, Studio Orange at ExactTarget, who says today’s marketer needs to become a customer service specialist and practice ‘interaction management’. “Marketers need to manage interactions in real time and in a very relevant way. It requires us as marketers to both listen and deploy relevant dialogue with customers in real time. There are new toolsets emerging for marketers to capitalise on these emerging trends,” he says. Warren says this phenomenon has broken the traditional campaign management model.

“Conversations that happen in social networks start and end faster and in higher numbers than a marketer’s ability to make data insights and strategise on the next outbound campaign. This requires technology platforms to allow for some level of real-time discernment for enabling content and frequency of scheduled marketing programs,” he adds, warning that many marketers are looking at the social media opportunity, but have yet to understand how it integrates with database marketing efforts. “Many are investing in the social media channel without having a true strategy on how it is going to add value to their traditional efforts. As a result, their social efforts become siloed and disconnected to their broader multi-channel strategy,” he says. He advises that marketers either need to staff personnel to listen and engage with customers via social networks or they will have to correlate key social metrics such as sentiment or ‘klout scores’ – rankings to determine an organisation’s level of influence – to their customer database efforts. By keeping the growing channel of data sources like CRM databases, search marketing, Facebook and email confined to disparate applications, the full potential of the new world of database marketing cannot be realised. “From our perspective, it’s no longer about direct marketing; it’s about customer intelligence. It’s a digital world empowered by a customer world — and with customers in control,” the Forrester report says. For ExactTarget, a global software-as-a-service company, the most innovation in integrated


approaches to database marketing is emerging from the small and medium portions of the market. “If I would put my finger on one key area that we see driving success it would be in remarketing programs,” Warren says. He says that SMEs are consistently seeing as much as a 30 per cent lift in overall program performance for programs like cart abandonment and lifecycle email programs.

An e-tail view South Australian based SME marketing specialists Chilli Chocolate Marketing find that many SME clients in the retail space who newly adopt an email based database marketing campaign become frustrated by the lack of online sales conversion, despite impressive Web traffic results. Simon Garlick, consultant at Chilli Chocolate Marketing says: “While from a marketing point of view the campaign can be a huge success, conversion to sales may not match up. But using online Website reporting tools can give us clues as to why leads weren’t converted, in a way that traditional marketing channels do not.” By integrating analysis of the email report and the Website/CRM report from the online store, the retailer can produce two valuable lists: those that were influenced by the email to click through the Website and then made a purchase, and those who clicked through and just browsed. Garlick says the process allows the company to beef up the richness of its database, segment customers and track their customers buying preferences and behaviours. He suggests that the highly coveted buyer group should now be marketed to as VIPs in all future communications with any special deals pertaining to their purchase choice sent to them as a priority. As for the browser group, Garlick advice is to “follow up”. “Do a follow-up email just to that list and politely ask what it was that made them decide not to buy anything. Any information you get back will be incredibly valuable and means you won’t have to guess so much about why people decided not to buy – you’ll have actual personal feedback,” he notes. He adds, however, that this is only an option if your marketing database is synched with your

CRM activity. “Don’t let all that info just sit there in isolation. Make your marketing efforts support your sales activity. Close the loop.” As Forrester points out, not all customers are created equal – some customers cost more to service than others, for little reward – and by applying analytics and customer intelligence to database marketing, companies will discern the best prospects to go for. Customers, conversely also expect to be treated with some familiarity, as they no longer accept impersonal communication. “This customer-centric approach is not just desirable today; it’s expected,” the Forrester report notes.

“Marketers need to manage interactions in real time and in a very relevant way.”

Five things to rethink about your database marketing plan 1. Where is the strategy? – You may have started your database as a way of keeping track of your customers, but your business has evolved and the way to contact with your customers has become more sophisticated. A good core database strategy should: track your customer’s purchases, demographics and profile; allow analysis whenever you need it; and help determine what motivates your customers and what their preferences are. 2. It’s not all about the deal – Database marketing is about building loyalty. Flooding customers with discount offers does not build up a healthy relationship. Concentrate on maintaining contact rather than extracting a sale. 3. Have you been tested lately? – The beauty of database marketing is accountability and measurement, but marketers often forget to test this. Setting up test groups that measure

response rates and formats of channel combinations can produce an instant ROI uplift. 4. Is it social? – Your core database is marketing gold, but don’t be afraid to synch it up to growing online and social media channels at your disposal. Integrate Twitter, Facebook and LinkedIn contact information for customer profiles. Use these touch points for separate communication. 5. DIY build? It’s time to outsource – Many SMEs start life with an in-house-built database, yet the more data you collate as your business goes, the more relational you need it to get. When looking for a database service provider, ensure that you are in control of the process, and make sure you own the database and software – you need to switch providers, they may go under, you might decide to take it back in-house, or you may get acquired.



Don’t be lonely

at the top Avoid isolation if you want to keep your business at the top of its game. STORY BY Stephanie Hunt

Stephanie Hunt


unning your own business can be lonely. The isolation you feel isn’t just personally difficult; it can also impact the success of your business. To survive and grow, you need to have critics to push you to the top of your game, peers and advisers to help you to see situations clearly and, from time to time, a shoulder to lean on in the tough times when you need to appear strong out front. No matter your business size, industry or professional background, every business owner needs outside support — don’t fool yourself that you’re different or you can’t afford it. The following three owners of very different businesses reveal what’s out there, and demonstrate that even the smallest business can find ways to avoid isolation.

Establish an advisory board Sally Romano established Brisbane-based Publicity Queen nine years ago, leaving a career in PR consultancies and in-house marketing to work from home. “I didn’t realise how much energy you get from those around you. (At home) you are actually reliant on your own energy and that’s a big adjustment,” says Romano. As Publicity Queen developed, she struggled to prioritise. “When you


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are growing a business, there are just so many different things you could be doing every day to grow the business.” In 2007, on the advice of growth guru Verne Harnish, Romano decided to establish an advisory board. She brought together four people from different areas of expertise: finance, sales, law and marketing. Then she put in place a formal process with regular two-hour monthly meetings, a formal agenda and minutes. The results have been life and business changing. “The board has aligned me”, she says, “I now really know which steps are more important than others.” The board also keeps her honest. “Those meetings can be remarkably unpleasant. They’re all there to pressure test how you are running the business and you’re in the hot seat. It’s pretty exhausting.” More comforting, the board wards off professional loneliness. “I get them formally only for those two hours a month, but at least I know that I’ve got a small group of people who really understand my business and what I’m trying to do.” The board members are paid an hourly rate commensurate with their positions and Romano

believes this is critical to ensuring both she and the board take the relationship seriously. Romano also feels that her board enhances her business’s credibility, and has enabled her to create a more sophisticated business. She now has a network of four other PR specialists working with her and says that she has built her business for what it’s going to look like in 10 years time.

Join a management group Julie Jardine (CEO) and husband Michael bought Thermal Electric Elements, a manufacturer of commercial and industrial heating solutions, from Michael’s father 20 years ago. The business is based in Coffs Harbour, where Jardine says she is separated from her suppliers and her customers and finds it hard to see what is really going on. She can talk to her husband, who manages the design aspects of the business, but as with many married business owners, she often finds such conversations unhelpful. She felt she was lacking accountability. “When you’ve got your own business, you can do so many dumb things because you’re in charge; nobody’s questioning why you’re doing it.” Three years ago, Jardine joined The Executive Connection (TEC), which is an international

organisation that brings CEOs together into groups of 14 to 16. TEC’s process includes regular speakers, one-on-one discussions and group meetings. For Jardine, it’s been the group sessions that have added the most value. Jardine travels up to Brisbane once a month to meet with her TEC group, which she says acts as a benchmark. There is a wide variety of businesses in Julie’s group from manufacturing and service sectors and she is surprised by the fact that these diverse businesses face such common problems. She’s also reassessed what’s possible. “It’s opened my eyes,” says Jardine. “Honestly, here were family businesses with turnovers like phone numbers. I had thought to get that big you always had to float. I felt I needed to lift my game.” TEC has been a reality check for Julie, forcing her to lift her head out the sand and face the reality of a rapidly declining Australian manufacturing sector. Thermal Electric now markets internationally, and is about to launch a product for the oil and gas industry. “We wouldn’t have woken up if it weren’t for TEC. We would have held on for dear life. Held on until there was nothing.” Jardine feels that the peer support, the ability to see what was happening to others and the opportunity to talk things through with the group was critical to her being able to face the pain of the GFC and ride the storm, despite the sudden loss of a number of customers. “When the GFC hit, I didn’t panic. I didn’t go crazy spending money in areas just in case. (TEC) kept us stable and (the group) talked a lot when everything first hit about what we were going to cut.” In fact, although Jardine’s sales were eroded through the GFC, her profits went up 14 per cent due to a careful look at costs. “You have a lot of idealistic dreams about what you want your business to look like and going to TEC you realise that a lot of it is just about ego and not about making money.”



“Peer support, the ability to see what was happening to others and the opportunity to talk things through with the group was critical to her being able to face the pain of the GFC.”

Get a business coach After an 18-year career as a NSW police defensive tactics firearms instructor, Jason Dawson moved his family to Beechworth, a small town in northern Victoria, and established the Beechworth Fitness Centre. In a new town with a new business, Dawson was really on his own. He could talk to his wife, but she works full time. “It can be difficult, because she’s not in touch with the business every day.” He joined the Chamber of Commerce and could chat with his clients, who were often local business people as well. But there was no-one to discuss business specifics, noone to hold him accountable, and he admits that priority setting was not his strong suit. Kristy Howard of Inspiring Excellence was a client at the gym and Dawson expressed an interest in what she was doing. “I saw coaching as an opportunity to run ideas up the flagpole and get an outsider’s point of view,” he says. They came up with a contra arrangement and now meet once a month to discuss business development. “Without Kristy,” says Dawson, “I certainly wouldn’t have been setting business priorities and I might not have taken the time to review my business plan and reset my goals. It’s an hour-and-a-half set aside to actually sit there and go through my plan.” Dawson’s business has grown 25-30 per cent since he started working with Kristy and he feels that being forced to focus on his priorities has enabled him to push forward. Outside support comes in many different forms, and as these three business owners can attest, it is

critical to honestly appraising your business, prioritising your many opportunities, keeping your finger on the pulse of the business community and your head out of the sand. Don’t try to ‘go it alone’; isolation can be bad for business.

Useful contacts Looking for help to prevent isolation in business? The following organisations can help: International Coach Federation Australasian Region (02) 4340 8871 The Executive Connection 1300 721 941 Family Business Australia (03) 9867 5322


Three steps

to successful Facebook marketing Facebook is about more than friends and ads; using it well can give you new marketing opportunities. STORY BY Janna Jungclaus


APRIL 2011


acebook is growing quickly and consistently, but while last year the site looked like a social platform it is now also adding business tools. Those new tools represent marketing opportunities for any business, so it’s worth taking a closer look at how businesses can make Facebook work for them. The most important aspect of using any online marketing tools for your business is to develop a strategy first. Whether you want to generate sales leads, increase the exposure for your business, provide customer service or engage existing customers and new prospects in a fun way, there are many objectives that excite business owners. By writing down your goals and adding quantifiable measures to benchmark your success you will know when and how to adjust your approach. Some of the common goals of Facebook marketing include: • Sales – Facebook does have the option of turning your facebook page into a store, however, the safer alternative is to showcase your products to a highly targeted audience and linking your pictures to your online store. • Lead Generation – this can be a great strategy when linked with the highly targeted Facebook advertising. • Increased exposure – The viral nature of Facebook increases the potential for exposure through trusted sources such as friends and families. The new Facebook Places feature now adds to the exposure for brick and mortar businesses. • Engaging with customers – In many ways Facebook pages have replaced old-fashioned newsletters. Offering anything from special

deals to competitions and reviews, Facebook pages are a way of engaging customers with your brand in an environment that they find comfortable.

Implementing your strategy Once you’re clear on the outcomes you want to achieve, your second step is to implement your strategy. This includes the initial set-up of your campaign, as well as provisions for the ongoing management and monitoring of results. Here are some tips to keep your implementation on track: • Don’t mix business with pleasure – keep your business page (a Facebook page) and your personal profile separate. As far as Facebook is concerned these are separate entities and you should treat them that way. Your target audience for each are different and so is the content they are interested in and the engagement style they require. • Get some traction – Getting your Fan page up and running is one thing. Attracting a larger number of ‘Likes’ to your page is quite another. The more interested people like your page, the higher your response rate is going to be and the more likely you are to achieve your goals. Here are some ways to promote your Fan Page: • Offer special deals to people who “like” your Facebook page; • Promote your Facebook page in related marketing campaigns (newsletter, website, print advertising, etc); • Do some targeted Facebook advertising to attract more people to your page (but be sure to measure your return on investment);


“Don’t mix business with pleasure. Keep your business Facebook page and your personal profile separate.” • Make a plan – Once your Facebook Page is up and running and people ‘like’ your page you need to offer them quality content and opportunities to engage and share your material with others. This is where the power of Facebook and related social media really comes to life. You can post any kind of content: short status updates, articles, photos, videos, links, competitions and more. When choosing your content make sure it is interesting for your audience and try to find an angle to engage them. You can also set certain targets of the type of content that should be shared each day or week. • Be accountable – Now that you have a plan, someone should be accountable for executing it. Whether it is the marketing manager, a specially assigned social media manager, the business owner or any other employee who is interested in social media is up to you. However, providing the person responsible with some clear guidelines of what can and can’t be done is essential.

where you’ve gone wrong and see how you can improve your strategy and its implementation to get better results. Minimising risk is an essential part of social media and one of the main reasons why many big corporations stayed away from accounts on Twitter and Facebook for years. The reality is that anything your post or write on your account is permanent – the equivalent of an online tattoo for your business. So planning and accountability are vital. The other risk is that your business will receive some negative interactions or reviews that are publicly visible to all your customers. If your business practices and deliverables are sound – you should have nothing to worry about

though. In fact a negative comment can give you the opportunity to excel in customer service by publicly addressing concerns and showing how much you care for your customers. Taking new online channels such as Facebook seriously for your business is a big step towards success. It’s a powerful marketing channel and you can tap into it’s potential without having to reinvent the marketing wheel.

Janna Jungclaus is a Director of Eminent Online Marketing. For more information visit, email au or call 02 8580 4836

Monitoring Your Strategy Now that your strategy has been implemented, it’s time for step three: monitoring progress. Do this for two reasons, the first of which is to determine whether you’ve achieved your goals. Secondly, measurement will help you to minimise any risks that could be associated with your Facebook strategy. Measuring your actual results against the goals you have set can be both daunting and exciting. After spending months of time and money on implementing your strategy you are anxious to see results. You can measure your success by using Facebook’s inbuilt analytics called Insight. Combine these with your website’s Google Analytics statistics and you will quickly find out whether some of your sales or leads can be attributed to your Facebook strategy. Of course you can also measure your success by counting the number of ‘likes’ your Facebook Page has and whether people tell you they found you through Facebook. If your results do not match your goals – don’t give up just yet. Take a good look at 39


Three steps to mobile


“Ninety per cent of SMS messages are opened within three minutes of being received, and 99 per cent are opened overall.� 40

APRIL 2011

Consumers are increasingly keen to shop with their mobile phones. Get ready for these shoppers with these three steps.


hether your 2010 Christmas sales figures left a lot to be desired, or you are focused on hitting the ground running this year, why not join the ranks of the smart retailers taking matters into their own hands? Utilising easy-to-execute mobile marketing programs, you too can attract new customers, generate repeat business, and improve campaign analytics. All the evidence suggests this is a sensible move if you want to give yourself an added advantage as the battle for shoppers heats up. Leading marketing research company comScore reports there was a 500 per cent increase in mobile Web traffic last year and Gartner, a leading IT research company, predicts mobile Web usage will soon overtake browsing from a PC. Smartphones are also outselling PCs worldwide. Reaching out to customers through their mobile handsets offers many benefits for retailers, including allowing for personalised marketing activity and providing the ability to create immediate incentives to drive customers to stores. Location tools can also be used as part of the communication and all activity can be tracked and measured to show a clear return on investment. Despite these reasons, there is a significant number of retailers who haven’t yet developed a strategy to target customers through their mobile devices. For these businesses, here are three ideas to get started.


“A mobile website can deliver a much broader reach than a device-specific app.” Create a mobile opt-in database

Create or enhance loyalty programs

Encouraging customers to register their mobile numbers is an important starting point. The easiest way to do this is to buy a keyword and shortcode through a mobile services provider. This creates an automated system where customers can text the keyword to the shortened mobile number (e.g. text CARD to 19954536) to register for your database. To encourage registrations, it is important to show an immediate benefit (e.g. 10 per cent discount in-store today) and to display the keyword and shortcode prominently in-store, online, and in your existing marketing channels. By creating an opt-in database, you can instantly begin targeting customers through SMS, a simple and cost-effective way to begin mobile marketing. Research shows that 90 per cent of SMS messages are opened within three minutes of being received, and 99 per cent are opened overall. These text messages can be used to deliver timely and relevant offers, encourage foot traffic and repeat customers. When used as part of a wider mobile strategy, they can also link through to dedicated mobile content such as store finder tools, exclusive offers, or mobile coupons.

Mobile communication delivers a higher response rate (over 70 per cent of promotional text messages are opened and read compared to less than three per cent for email) and therefore a significantly increased ROI from loyalty programs. It also allows you to target specific customers, making it possible to create highly compelling, interactive and targeted offers. As a consumer, if I get a special offer for a complementary item to something I’ve already purchased, say insurance for a TV or boots to go with my jeans, I am going to be much more likely to convert on that purchase.

Create a mobile Website Given the wide variety of mobile devices on the market, a mobile Website can deliver a much broader reach than a device-specific app. A dedicated mobile Website can also be used effectively as part of a wider mobile strategy, for example, as a landing page for an SMS campaign, allowing you to track click-through rates. When considering your mobile site, much thought should be given to the sort of content which will be offered, as certain content is more appealing to someone browsing via a mobile device than on a PC. Helping people check store locations or opening hours, promoting that day’s best buys, or encouraging opt-ins to an SMS service can all be more effective on mobile than via your existing Web content.

Using unique codes that can be scanned at the point of purchase and their use tracked and evaluated, mobile can be used to distribute coupons and loyalty cards. This can eliminate the need for consumers to carry all those plastic loyalty cards. Also, by eliminating the need for printing and distribution, which can often be very expensive, mobile loyalty campaigns can prove more cost effective and friendly to the environment.

By Roger Woodend, General Manager, 2ergo Australia. 2ergo is a retail mobile marketing specialist. For more information, mail roger.

The mobile mob Still think mobile’s a niche? The following data suggests otherwise: • Australia had 27.6 million mobile subscribers in 2010. (AMTA, 2010). • More than 50 per cent of all new mobile phones sold in Australia are smartphones. (ACMA, 2010) • Growth in mobile wireless subscribers 13 times more than DSL. (ABS, 2010) • By 2013, more people access Internet by phone than PC. (Gartner, 2010) • In 2011, over 85 per cent of new handsets will have access to mobile Internet. (Gartner, 2010) • Smartphone sales are up 96 per cent on Q4 2009. (Gartner, 2010)

• Sixty-two per cent of shoppers of smartphone users have bought physical goods from their Smartphone devices in the last six months. (Adobe survey, 2011) •F  orty-three per cent of Smartphone users conduct price comparisons while in your store, 31 per cent review product information and 44 per cent have downloaded coupons to redeem these products. (BuzzBack Market Research, 2010) • Twenty-four per cent of a retailer’s revenue is lost due to customers not finding what they came to buy. (WSJ, 2010) In short, the mobile device has become an acceptable and in many cases preferred, highly effective and rapidly growing consumer channel to market — is your business taking advantage of this?



Counting down to the 2011 ActionCOACH My Business Awards

The My Business team is close to finalising the entry dates for the 2011 ActionCOACH My Business Awards. Full details will appear in the next issue, but until then, whet your appetite with this preview.


ull details of the 2011 ActionCOACH My Business Awards are currently being finalised by the My Business team. In our May issue, which will hit newsagents in the first week of the month, you’ll find entry details and deadlines. Entries will open until late August, when the judges will convene to start the tough job of selecting the winners.

A new, fairer, judging process This year’s awards will have a new, detailed and fairer judging process. The first step will see the My Business team work with a panel of three business experts to develop a shortlist of five finalists for each category. Those experts will include My Business columnists, representatives of industry associations and people with special experience relevant to the award. An example of how this will work is our Best Corporate Social Responsibility award, for which we have already been in contact with local representatives of one of the world’s most visible charities. A member of that organisation will join us in the preliminary judging of that award. Round two of judging will see the finalists assessed by a panel comprising five new business experts, a representative of each category’s sponsor and the Editor of My Business. This panel will vote for the winners of each category.

New criteria Again, we’re a little way from finalising the details here, but the criteria we’re working on for this year’s awards are:


APRIL 2011

• Novelty – This year we are looking for unique businesses. You won’t need to demonstrate that there’s no business on the planet like yours, but we will be looking for businesses that have their own style. We’ll also mark down businesses that have won My Business Awards (or other small business awards) in the past, to encourage first-time entries. •C  reativity – This criteria will assess the degree to which entrants express brand values and creativity in all aspects of their presentation, to the public and to the judges. • Innovation – Judges will assess the extent to which an entry represents a new approach to business challenges. Any business can follow best practice: this criteria will reward those who have pioneered methods that made their business stand out. • Outcomes – Entrants will be asked to demonstrate the outcomes their business has achieved. Judges will value demonstrable growth, be it financial, geographical or in staff skills. Outcomes will have a heavy weighting so that the awards celebrate measurable achievements.

Bonus points The 2011 ActionCOACH My Business Awards will also offer bonus points for businesses that go the extra mile with their entries. Videos, large numbers of friends (for entries that use social media) or creative campaigning for the awards will be able to score bonus points with the judges. One tactic we feel will be adopted by several entrants is posting a supporting video to YouTube – how hard can it be to add a little video to an entry now that just about every phone includes a camera?

Award categories We’ll bring you full details of the criteria next month. For now, start planning your entries in this year’s categories, namely: • The ActionCOACH Award for Outstanding Excellence This award will be chosen from among the winners of the other categories. • The GIO Award for Best Small Business The Best Small Business will need to demonstrate innovation, growth and entrepreneurial flair, in a business with between one and 19 full-time equivalent employees. • Award for Best Medium Business The Best Medium Business will need to demonstrate innovation, growth and entrepreneurial flair, in a business with between 20 and 200 full-time-equivalent employees. • Award for Best use of Technology The Best use of Technology award will go to the business that can best show how technology improves its business efficiency while delighting customers. • Award for Best Start-up Business For new businesses, the Best Start-up category will celebrate the best beginners, based on creativity, growth and overall business execution.

• Award for Best Corporate Social Responsibility A new category for 2011, the Best Corporate Social Responsibility category will reward the business that best gives back to the community and/or the environment. • Award for Best Business Leader Another new category for 2011, the Best Business Leader will be an entrepreneur or manager who has demonstrated outstanding leadership that has measurably improved the business they work at or own. • Award for Best Employer Also new for 2011, this category will reward an organisation that makes the most significant investment in people, as shown by the business outcomes those investments produce. • Award for Best Employee The best employee award can be won by a self-nominated, peer-nominated or managernominated employee whose contributions to a business are demonstrably beyond the call of duty, while also producing outstanding results. • Award for Best Growth Strategy This category celebrates the success of a business’s plans and strategies, by measuring the results generated by new strategic initiatives. Winner selection will be based on innovation and results.

rt impo rt o p x e

Soft landings overseas

Looking to kick-start a business or branch office overseas? Inward investment agencies are waiting to guide you along the way. STORY BY Nicola Card


ou’re keen to establish an office or plant overseas, to be closer to certain markets or workers, but who do you turn to for insights into the region? The good news is that many nations operate inward investment agencies which exist to bring your business to their country. A host of private consultants also want to help. Typical services provided by inward investment agencies and consultancies include market information, economic and regional overviews and insights into business registration, regulations and taxation and more. Referrals to specialists, such as lawyers and accountants, are also provided in most cases. Overseas nations operate these agencies because attracting inward investment helps to build their economy, even though the business principal or entrepreneur may be foreign. In the world’s largest economy, the USA, affiliates of foreign companies – many aided by Invest in America – employ more than five million US workers and support millions more indirectly. 44

APRIL 2011

With local benefits in mind, financial and other incentives large and small are provided to entice foreigners. Ireland has an alluringly low corporate tax rate, while Japan offers the sweetener of free office space for up to 50 days. Britain offers a raft of goodies through its Global Entrepreneurs Program.

Working with investment agencies These are just the icing on the cake once other more basic criteria are met; no one sets out to plough investment into an overseas venture only to encounter an inadequate supply of local workers or a lack of customers. Government-affiliated Japan External Trade Organisation (JETRO) therefore advocates thorough preparation to avert nasty surprises. JETRO Trade and Investment Development Officer Majon Williamson says: “Market research is key, potential businesses need to do as much [research] as possible themselves or with JETRO

or anyone else. It’s vital to know all about the target market and competitors and what Japan is doing in their field. Updated material is very important.” Austrade Chief Economist Tim Harcourt agrees, saying business failure can be avoided through due diligence. “Some think if the country’s language is English or it operates systems that are similar [to Australia] they will be fine. But that’s not always the case.” Business-people with an eye on the Japanese market first have to complete JETRO’s registration form, and provide a detailed business plan and information on available capital. “We then judge if they can be successful in Japan if they set up. And if they can be successful there, there will be returns for the Japanese community as well,” Williamson says. During subsequent consultations, Jetro staff provide market and industry information on relevant legal systems, taxation, visas, office, HR and more, with offices in Japan presenting more local insights for clients tripping overseas.

impo rt expo rt One business that has worked with JETRO is South Australian livestock feed company Balco. In 2005, the company established an office in Japan to circumvent a series of wholesaler middlemen. JETRO’s Tokyo office identified suitable office space and took care of the intricacies surrounding various subsidies as well as all necessary taxation matters. Today, Balco exports 90 per cent of its coarse feed for livestock to Japan. Teresa Keating, the Sydney-based Manager of Ireland’s Industrial Development Agency (IDA), strongly encourages potential investors to visit Ireland and local offices take charge of the agenda. “The IDA assembles a two-day itinerary. We facilitate the meetings with local companies in a similar space, also with a lawyer and accountant and other experts to discuss business structures. Part of the service is stepping them through local laws and connecting them to people who are experts in fields where we cannot answer all questions. “In one example, about 20 meetings were arranged to enable an individual to determine his next move. Clients get a good and realistic overview as we also outline hurdles ... they have a good idea of what to expect.” Paul Burfield of IDA affiliate Enterprise Ireland told My Business one client had “struggled to find good venture capital partners and good manufacturing capabilities and precision engineering in Australia to support business development”, so they introduced him to a venture fund in Ireland. “We can facilitate start-up capital and connect people to incubators within their own industry,” he said. No consultancy fees are charged by IDA or Enterprise Ireland as “the payback or return for us is helping create an entity that bears its roots in Ireland and employs Irish people, generates manufacturing and exports from Ireland.” To encourage inward investment the Irish government has lowered the corporate tax rate to just 12.5 per cent, which is very favourable when compared to the UK’s 28 per cent and Australia’s 30 per cent. Corporate taxes in Japan have also been lowered in a bid to encourage foreign direct investment and various subsidies are provided for companies setting up operations.

It’s also worth checking other countries’ tax rates, although choosing the right region entails a lot more than just looking at business costs. “Often it’s a strategic consumer issue as much as anything,” says Harcourt. “Being close to large consumer markets matters -- for example, people set up in Indonesia, not for cheap labour, because it isn’t; they set up because they have a large consumer market on the doorstep. For example, people in Thailand, Vietnam, Laos and Cambodia will be buying utes by the bucket load, so you want to be right in the market.” Harcourt says clients can gain quality “Information and insights – and make good use of agency networks. In many cases you need government involvement in setting up tenders, you cannot avoid it. “One thing I’ve found is that companies are proud – they don’t want to be seen to be helped too much by a government agency – so [I say] leave the pride alone and just use the resources that are there. Small companies cannot afford the likes of KPMG or McKinsey. [Because] you’re going to have to deal with the government, be very relaxed and comfortable if you have to deal with official circles, whether it be Brazil or European Union or China. And why not get your Australian government resources on hand because, in some ways, foreign trade is part of diplomacy.” Progress in achieving objectives in China – which leads the pack in foreign direct investment in the developing world with India a close second – relies heavily on access to contacts with within government circles. The ability to open doors of officialdom takes on a new level of importance.

China Kevin Cahalane of Australia China Gateway (not to be confused with the Australia China Business Council) told My Business “Nothing really happens in China until government officials stamp things or give them a tick.” Adding to the obstacles are the size of the Chinese market and its 100 dialects across seven regions. Local knowledge is paramount: enter James Shen, Australia China Gateway principal and master of networking within business and government circles. He cites relationship building and networking as “possibly more important

Inward investment agency directory Looking for an inward investment agency? Here’s a starter list: China Canada Chile Denmark Dubai (Middle East) France Germany India Ireland Japan Netherlands New Zealand North of England Poland US UK If the nation you wish to export to is not listed above, contact its embassy (in Canberra) or consulate (in state capital), which can provide links. Googling ‘gateway (+desired country)’ also throws up a number of resources. State government and local councils may also be able to help, as may Chambers of Commerce.


rt impo rt o p x e


than great ideas, extensive capital and exciting products or services. “The first thing we do with a client is workshop exactly what the objectives are ... find out what they want to sell or produce and what they know about the market. From there we tailor a package and try and cut through all manner of red tape and point them toward contacts, which is easier when the client is able to articulate what he wants to achieve.” With Shen’s help over 36 months, Melbournebased Gerry Mussett of kiosk manufacturer Sprocket Design successfully established a profitable multimedia technology joint venture in Shanghai and now plans to expand into the US market. “We were introduced to all the ‘right’ people and through that found a partner in Shanghai and established a direct relationship and that was the basis of the joint venture partnership. Finding the right people is most important – the right match for the company,” he said. “Local knowledge goes a long way. “And you need to establish good local relationships – personal and business – you cannot separate the two. It’s a delicate balance and a live thing, a continuing ongoing relationship. You need to make sure you’ve got all the ground work done and have stable foundations in personal relationships and you build from there.”

Working with an inward investment agency

Gerry Mussett


APRIL 2011

When you start to work with an investment attraction agency, many will offer a market snapshot, information that outlines economic and industry data – labour availability and quality, data on local consumers and an introduction to issues like occupational health and safety. A familiarisation tour is sometimes offered. These tours involve a visit to your prospect nation to become familiar with the location you are considering for your business. They may coincide with a trade fair at which you can meet

“Companies are proud – they don’t want to be seen to be helped too much by a government agency. I say leave the pride alone.” Tim Harcourt, Austrade

potential buyers and get a feel for the industry. Introductions to prospective business partners, local authorities, government representatives and potential suppliers of business services also often reach the agenda. These tours are free once you land, but you’ll need to pay for your own overseas flights and accommodation. Private consultants offer feebased tours. As discussions advance, you may be offered incentives such as assistance with staff relocation, and free or subsidised office space. State aid is sometimes on offer, and many nations also expedite immigration issues if you want to send a team member from Australia to work in the new office. Inward investment agencies won’t indulge you endlessly. Most encourage development of clear goals and well-documented business plans so they can be satisfied you’ll be a good investment for your new host nation.


CuSTOMEr CarE ThrOugh SOfTWarE

Customer Relationship Management software can help you to increase the lifetime value of customers, and smooth your sales process. Learn how to buy and implement it in this feature. STORY BY LIA TImson

“An automated bad process is still a bad process, just running a bit quicker.” Peter Monk


APRIL 2011


rom simple contact lists to automated relationship managers that tell you when and why to act on sales leads, Customer Relationship Management (CRM) software has the ability to help businesses realise their potential by indentifying, nurturing and converting contacts into sales and managing their ongoing relationship. But CRM is no silver bullet. Indeed, it has earned a reputation for complexity, thanks in part to early iterations from giant technology firms like Oracle and SAP. But that reputation is now undeserved and smaller, ambitious businesses can now benefit from automating some customer-facing functions, especially as they strive to improve work processes and grow. One reason CRM is now more accessible and affordable is that it has moved away from onpremises installations requiring software engineers to build the application to suit specific needs. Today’s CRM leaders tend to operate online. Led by trailblazer, the computer industry has allowed small businesses to adopt CRM in a more economical fashion. It is now possible to sign up for a CRM online with a credit card and begin using it within minutes. Even large and traditional vendors such as Oracle, SAP, Sage and Microsoft now offer cloud variants to suit all business sizes. But one thing remains true, as it does of all software adoption: CRM cannot solve all your problems, especially if your objectives are fuzzy or your people do not see a benefit in using it.

what do you want? Peter Monk knows CRM well from his consulting days before joining IBM where he now oversees its customer relationship and call centre arm. He says businesses wanting to adopt a CRM or step up to a better platform must first decide on its goals. “The technology is really just the tool. First you need to think about what you are trying to achieve,” he says. “Do you want just a contact list with the ability to do some mail-outs or do you want a sales tracking tool or complete relationship manager? Defining your business requirements will give you a checklist to help you choose.” Improving customer service should be a priority of any CRM, says Brett Waters, Vice President Asia Pacific-South, RightNow Technologies. “Ultimately, a superior customer experience will help to build brand loyalty and have a positive effect on the top and bottom lines,” he says. Mobility is also a consideration, especially if your workforce needs constant access to company data on the go to serve customers better. And CRM can help streamline workflow and minimise paperwork, as it integrates with other business applications such as accounting, pointof-sale, payroll and inventory packages as well as social media. However, it comes at a price — usually one that requires change from the point of view of people, as well as technology. Monk says any new process must be accompanied by a formal plan to change internal practices.


“An automated bad process is still a bad process, just running a bit quicker,” he quips.

How big do you need to be? Can very small businesses benefit from CRM or is it necessary to have a minimum number of staff or users before the investment pays off? Chris Wren, Director of Highland Financial, is half of a two-person operation, looking after 400 individual investors. He says he could not have done it without a CRM. “We acquired business from another practice to get started, so we had hundreds of clients overnight. They already had CRM product GoldMine, and I saw the potential to further customise it to the way we do business,” Wren says. The software is hosted in-house, as Wren wants to ensure data integrity, but it integrates with his mail exchange to deliver information to his BlackBerry and iPhone.

on-premise or in the cloud? The advantages of ‘software as a service’, or ‘in the cloud’, are obvious from the point of view of cost and manageability. It is hard to argue against the absence of the need to purchase and maintain hardware and software on a regular basis. In the cloud someone else does all that for you plus they take care of backups for a fixed price. In theory. The truth is that cloud services vary greatly and they need to be assessed with as much rigour as any other business decision you make. Some may need to be deployed by a consultancy or integrator, demanding substantial investment in people and money. Others may seek to lock you into a long-term contract that puts additional onus on your business. In a report titled ‘Decision Matrix: Choosing a CRM Vendor’, research firm Ovum says cloud computing is a term that CRM vendors use widely but imprecisely. “Many CRM vendors want to be as closely associated with the cloud phenomenon as possible, so they apply the label to everything they

“Every CRM will have strengths and weaknesses. Buyers often have to drill through bullshit bingo to get the information they want.” Jens Butler

can. The result is some confusion among end-user organisations seeking to explore or exploit the potential of this important emerging technology,” the report warns. Gary Stevenson, Director, Windowline — a company specialising in replacing windows in old apartment buildings — stayed with an onpremise solution for the time being, but would

consider moving to the cloud if his provider introduced the option. He has invested considerable money in purchasing and maintaining equipment to host GoldMine by FrontRage Solutions in-house for nearly a decade. He spends approximately $4,500 at every software upgrade to ensure it integrates with other back-office systems.



CuSTOMEr CarE ThrOugh SOfTWarE


It allows the company to keep track of jobs, and the buildings where jobs have been done, so that if there is a change of personnel or contract, there is still an accurate sales, service and billing history. “My advice to other small businesses would be to make sure whatever they choose is well supported and (the vendor) has been in the market for some time. Forget customising a solution by some software developer. An offthe-shelf product that can be tailored is better,” Stevenson says. Defining how much hardware, software and internal technical support is available to implement and maintain the application helps decide whether to go online or in-house, says Jens Butler, Ovum Principal Analyst, IT Services and Sourcing, Asia Pacific. “Realistically, there are minimal requirements to going to the cloud — at least Windows XP or 7, and certain hardware capabilities — but the cloud path also demands bandwidth and as for security, it depends what you are putting on there,” he says. “If it is mission critical and you want to go to the cloud, I’d consider a private cloud option.”

• Goldmine by FrontRage Solutions

open source

a WhO’S WhO Of CrM


ere are a few CRM vendors and integrators My Business has spoken to. We’d list them all, but there are so many we’d probably have to dedicate a magazine to the topic! As always, search the Web, user forums and industry associations for other references. • Microsoft Dynamics CRM Online • Oracle CRM On Demand • ACT! By Sage Business Solution • SugarCRM by Insightful CRM, a division of Fonality

• RightNow Technologies


APRIL 2011

Open source software does not mean it is free, just that it is built on code that is not proprietary and hence enriched by user collaboration. Among open source options is SugarCRM, which has a free unsupported edition as well as professional and enterprise versions. Deployment, however, may still require an installation partner. Jeremy Roberts of InsightfulCRM, a company that installs SugarCRM, says the product is shelf-ready, despite being open source. “There are no changes needed and it’s possible to integrate with other systems.” Roberts says there is a misconception among small businesses that open source is cumbersome, unsecured and unsupported. He says that is not true — it is government-

ready and supported by both vendors and installation partners.

Ask for references Experts and CRM clients we spoke to emphasise the importance of referrals. Industry events, seminars, online searches, plus professional contacts can provide guidance on suitable applications. Obtain references on the partner or reseller as well, as you will be dealing with them regularly. Wren recommends speaking to their clients armed with a list of criteria. “No one is going to give a bad reference, but you can ask enough questions to realise if they are being authentic,” Wren says. Butler warns no CRM is perfect. “Everyone will have strengths and weaknesses in some areas. Unfortunately, buyers often have to drill through the bullshit bingo to get the information they want,” he says. He recommends speaking to the individual who will be providing ongoing support and their clients, asking how they have resolved similar issues. “Tell them you don’t want to hear about the fantastic cases they sold. You want to talk to a customer without the vendor there and try to work out how they solved it when it all went pear-shaped.” Oracle’s General Manager for CRM, Michel van Woudenberg, recommends asking partners about their experience in your industry. “If you are a stockbroker, your CRM should look very different than if you are selling car parts,” he says. As for costs, van Woudenberg says if a business cannot justify the current charges by some online CRM applications — Oracle CRM On Demand costs $75 per user per month while Salesforce charges between $5 and $95 for non-enterprise options — “there is something wrong with the business case for doing the CRM project in the first place.”

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BUSINESS technology

When should you adopt CRM? Is your business ready for Customer Relationship Management software? Read on to learn the signs that CRM is for you.


arning customer loyalty is paramount to the success of any business, regardless of its size. Often, small businesses have the advantage of possessing truly personal customer relationships that are the envy of larger enterprises. With these relationships comes customer knowledge that transforms into loyalty, repeat business and, ultimately, increased sales. However, how can a small business retain this knowledge when it starts to grow? When and how should it take the Customer Relationship Management (CRM) step? First, it is necessary to understand the existing resources and tools the company uses to store, manage and act upon customer data. In most small businesses, a range of applications perform this task — Excel spreadsheets and Word documents filed on central servers, Outlook’s contacts folder, and, believe it or not, paper documents filed in cabinets and business card Rolodexes on employees’ desks, are all sources of customer data. It is true that these tools can work in an environment where a tight-knit group of workers is operating from a small office. However, when workforces grow and expand beyond the central office, managing these dispersed and unrelated tools and resources for capturing customer data can become extremely challenging. One centrally managed resource, however, can allow a business to build upon its personal


“CRM facilitates sharing of sales, marketing and client service information and provides a more positive experience for the customer.”

customer knowledge by holding and making accessible all the information needed to make informed decisions in order to increase loyalty, reduce customer churn and identify opportunities to sell.

Look for the familiar CRM software that works like, and with, familiar products that employees use on a daily basis, is a great way to enter the CRM software space. The right CRM solution can be up and running quickly and allow a business to remain focused, and with greater insight, on what’s most important: the customer. Less intensive staff training for will also be a reality when familiar user interfaces are selected. When it comes to CRM, communication is key. The ideal CRM solution should streamline the way employees communicate with clients and collaborate with each other. Taking the CRM step can give a business access to powerful capabilities such as workflow automation and analytics. But how does a business assess when it is right to take the CRM step and what it should be considering? I believe there are a few key things that should be on the check list: • Evaluate your needs — Although the task of evaluating and choosing CRM software can be seen as time-consuming, it is important to take the time to first look at your company’s needs in order to choose a system that can keep pace with the growth of your company. • Assess your internal resources — Next, you should assess your company’s internal resources, paying particular attention to existing technology capabilities and available budget. When you can clearly map out your needs and resources, you’ll be in a better position to evaluate the solutions on offer.

• Formulate a plan — Whether you’re looking to implement a CRM solution to improve sales management, streamline marketing initiatives or improve customer service, having a clear and focused plan is crucial. If implemented properly, CRM can help your company to become more competitive, identify new customers and increase customer satisfaction and loyalty. Remember to ensure that the CRM platform you choose integrates seamlessly with existing software that your workforce uses daily. • On-premise or in the cloud? — Another key consideration is whether to have CRM onpremise or hosted in the cloud. The ease of use and rapid deployment, configuration options for sales administrators, plus the infrastructure costreduction that cloud computing offers, makes cloud-based CRM an attractive option. • Mobile accessibility — Mobile devices have become a critical tool for SMBs to gain a competitive edge, even when on the road. As such, make sure your new CRM platform is accessible to your workforce when they are on their mobile devices. Done right, CRM can support a small business during a period of growth. Having a superior level of knowledge of the customer is one thing, but having this available to your entire workforce in an easy-to-use format, from wherever they may be, can see SMBs build on and excel in the customer relationship space. In my experience in working with SMBs over the past seven years, I have seen numerous small businesses flourish since taking the step to adopt CRM. By learning the basics of what a CRM suite can do and acting upon the information it provides, SMBs can really capitalise on their unique customer relationships to boost sales, satisfaction and customer service.

Ross Dembecki is Lead Product Manager, Business Solutions Group, Microsoft Australia. The company recently launched a cloud CRM service for Australian businesses: Microsoft Dynamics CRM Online. An obligation-free, 30-day online trial is available at 53


a prOduCTIVITy rEVOluTION Political revolutions have, of late, been fuelled by information technology that empowered citizens to enact bottom-up change. Business software might just empower your team to do the same. David Jackman



bought my first mobile phone in the late ’80s. It was a huge brick, but it was technologically a wonder and folk watched in awe when I wielded it. Back then, it was almost exclusively a business tool, and it allowed me as a tiny business to service my customers better than much larger competitors. As mobile phones shrunk, became cheaper and ubiquitous, I lost my customer service advantage. I mention my old phone because while it is common knowledge that the use of technology can offer significant competitive advantage,

“How might the West have fared Iraq if, rather than using military force, we had given out mobile devices and a mobile network?” 54

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the ubiquity and its effects have not been well understood. Take the technology-savvy auto company Mercedes Benz as an example. Fifteen years after my first mobile phone, in 2003, they offered hardwired mounts that supported only certain types of mobile phone. This was not a popular offering, and showed how Mercedes had gotten it so wrong when it came to mobile phones. The company did not understand how the mobile was becoming a communications infrastructure that empowers social connectivity. Phones then evolved quickly so that people could use them to express themselves in many ways, making hard-wiring a bad idea. The point I want to focus on is the social effects and consequences of this mobile phone technology, which can hurt a car company ... or a dictator. Certainly, the changes in Egypt and elsewhere are surprises to many. The ability of groups of wired, young and educated citizens to organise and mobilise their disaffection is being aided by the emergence of social media, which has allowed information to spread more quickly. But when you think about it, they are also just a clear application of technology-powered social networks, albeit a


very forceful demonstration that shows how even the mighty can be toppled by people who have the information they need to organise. In light of the Egyptian and Tunisian revolutions, it could even be worth pondering how the West might have fared in conflicts like Iraq if, rather than using military force, we had given out mobile devices and a mobile network and let people link and cooperate to find their own way to change and empowerment. Politics aside, the consequence of mobile phones as an enabler of social change and transformation is something that largely happened while many were focused on the functionality of the tools. We were so immersed in the actual technological advances of the mobile that we failed to notice the social impacts that were occurring, and the idea of empowerment as a much wider concept. I make and sell business software, and in my world, there is a similar transformation going on today and I believe that in the future it will be regarded as a very profound change. That change is similar to the revolutions in the Middle East. This isn’t hype — it is reality, and the smart companies are already actively transforming. To understand the transformation, consider this — staff in most organisations have traditionally been kept busy doing transactions: people move things physically and computers help to control the moves and the flow of information they create. Management then looked at the summary data and made decisions that were somewhat autocratically pushed to the staff, in a delayed manner. This is a command-and-control system in which insights are pushed out of the executive suite. I ask an important question: would you like to work in a traditional company like this? I bet you would not, and neither do the poor folk doing it today! So, what is the transformation in business? I believe it is the breakdown or shifting of traditional hierarchical management structures — workers are in the process of being empowered with much

“Staff cooperate with many others both inside and outside the business, and drive improvements themselves, without waiting for word from on high.”

more data and therefore access to knowledge; more knowledge and information than the managers can manage themselves. This means the staff co-operate with many others both inside and outside the business, and drive improvements themselves, without waiting for word from on high. Their chances of career advancement can be driven by the benefits they are directly able to drive for their employer. This is very empowering as the personality of a boss isn’t so influential in employees’ career visibility: good work will be obvious to all as the benefits will also be widely visible. This is also a sea change for business management, as it will take companies beyond the reactive, report-driven style operations to one that has the ability to proactively identify problems, areas for enhancements and suggest corrective action. This bottom-up innovation means that rather than managers being in control, there is now a growing drive to empower the workers and get out of their way so they can use their access to information to achieve greater insight on what’s happening in the company, therefore leveraging that insight and turning it into business improvements. This involves managers developing new skills — and ways of thinking — from command and control to empowerment, prioritisation and review. We’re seeing the democratisation of data and socialisation (not socialism!) in business.

Like social media driving huge change in politics, this will drive a similar change in business. Our latest product called PRONTO-Xi Dimensions incorporates the infrastructure to enable such empowerment of staff, which our customers will use to be at the forefront of this next wave of worker collaboration. It is the true merger of transactions captured across a business and the ability to have that data analysed immediately with each user being informed on important things they wanted to know. This system-driven approach is a cut above the after-the-fact reporting that’s prevalent in businesses today. It enables ‘feeling connected’ as both a social driver and to their job, other staff and their customers. By delivering a unified Enterprise Resource Planning (ERP) and Business Intelligence solution out of the box, we are simplifying technology, so that businesses can innovate and differentiate by making better use of their transactional data and other business information. This, in turn, improves decision making and returns the business to a healthier profit. Like the changes in mobile technology having transformational effects on the global community, software that empowers people will be transformational to businesses. And just as revolution in Egypt and Tunisia was unexpected, the changes to business will come in ways we can only imagine.



uSE pOS SOfTWarE TO dETECT aNd STOp ThEfT Retailers are often the victim of theft perpetrated by employees. Judicious use of retail management software can help you to detect theft, then fight back.

“If an employee starts to live beyond their means without reasonable explanation, look for evidence of theft.”


know of a couple, let’s call them Keith and Therese, who have operated their busy retail business for 20 years. Many of their employees are friends, including someone so close, she babysat their kids regularly. They now know this person stole more than $200,000 from their company over four years. But they ignored all the signs that could help them to stop it sooner. Employee and customer theft in retail is expensive. According to some international studies, depending on shop size, two to six per cent of total sales value is not unusual. Many retailers prefer to ignore the problem because they feel it is less stressful to do so, even though comprehensive data may be available from their existing point-of-sale (POS) or retail management system to indicate the nature and scale of employee or customer theft. It is only after the theft has been uncovered that retailers become enraged enough to act. For some, this can be too late. Having worked with many retailers to mitigate the cost of theft, I have developed some basic strategies that, if followed, can reduce the cost of theft in any retail store.

12 steps to cutting theft in your store Here are my top 12 tips for countering theft in your business: 1. All stock should be keyed into the POS or retail management software. Selling items that are not tracked creates considerable risks. 2. Track all sales by scanning, using a touchscreen button or PLU (product look-up code), or a hotkey on your computer screen. 56

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3. Stop all department sales and sales where the employee is free to manually enter the quantity of items. This is an old-school cash register approach that makes it easier for employees to steal. 4. Scan all product returns and credit claims. This way everything legitimately leaving the store is tracked.


“Follow your suspicions regardless of how well you know your employees. Put business ahead of friendship.”

5. Undertake regular spot stocktakes. The discrepancy between what you have on hand and what is recorded in your POS system can reflect theft. 6. Re-order stock only through your POS or retail management software. This stops poor buying decisions and helps identify stock theft and employee fraud around stock volumes.

7. Implement the use of employee initials, codes or barcodes for every sale. While this can slow down the sale process, the increased vigilance will reduce potential for theft. 8. Set an end-of-shift cash balance discrepancy target and stick to it. A register that does not balance can be an indicator of employee theft. 9. Change system passwords regularly. Make it a condition of employment that these passwords are never shared. 10. Do random register balance checks during the day. Check that the cash your computer system thinks should be in the cash drawer actually is in the drawer. Employees who steal often build up a reserve of money in the drawer, waiting for an opportunity to take out ‘their’ cash. 11. Use your software to check and report on unusual actions that could indicate employee theft. A good POS system should provide an audit log of cancelled sales, deleted sales and other odd behaviour consistent with fraud. 12. Follow your suspicions, regardless of how well you know your employees. Put business ahead of friendship. The cost of customer and employee theft to any retailer can be reduced significantly. All that is needed is owner and manager engagement, full use of your POS software and relentless application of a zero-tolerance approach.

• Falling gross profit — Compare your trading gross profit year on year for the whole year or better still, quarterly — no less, as retail volatility can make shorter period comparisons dubious. If the gross product (sales less stock purchases) has fallen more than a few points, theft can be the cause. It can be cash or product related. If you’re unsure what your reasonable gross profit should be, consult a reputable industry association or other retailers in your area. • Stock on-hand discrepancies — Undertake spot stocktakes — count the quantity on hand and check this against the count held in the POS system. Do this regularly for 100 to 200 items. If you are finding discrepancies in more than five per cent of items at each count, then it is likely you have a systematic theft problem. • Employees living beyond their means — If an employee starts to live beyond their means without reasonable explanation, look for evidence of theft. There may be good reason for the change in lifestyle; likewise, it could be financed by theft. Theft indicators abound in the retail sector. Be aware of those appropriate to your line of business and establish processes for measuring them regularly. Acting today and embracing the theft reduction facilities in your software could help protect you from the loss experienced by Keith and Therese.

How do you know if theft is affecting your business?

Mark Fletcher is managing Director of point of sale and business management software vendor Tower Systems: He also writes the Australian Newsagency Blog at

Too often, retailers do not find out about theft until the loss has escalated. Working with retailers on theft issues, I have noted three main indicators that should alert you to a potential problem:




GADGET Sliding special

If you want an iPad, but feel you also need a device that will let you run the PC apps you need for work, Samsung has a cunning compromise for you in the form of it’s new Sliding PC 7 Series. The device appears to be a tablet computer like Samsung’s own Galaxy or the iPad, but a flick and a push sees the screen slide away to reveal a keyboard underneath. The Sliding PC runs Windows 7, but adds a special interface when operating purely as a tablet. We spent a few minutes with the Sliding PC at a recent conference and it was hard not to be impressed by it, although a colleague pointed out that the version of Windows on the demonstration machine was intended for consumers and would therefore struggle to connect to a business network. We hope that wrinkle is ironed out when the product makes its expected debut around May.

Beyond the shoebox Our Editor has a shockingly messy desk that is always covered in paper, unread books, expenses he really should claim and more junk than seems sensible. If only he’d use, a Website that lets you upload things like receipts and warranties. You can even snap these documents with your mobile phone’s camera, then upload them to the site. By doing so, the folks behind the site reckon that you’ll always have a copy of these documents when you need them, which is much better than putting them in shoebox and/or losing them and getting grumpy when you want to make a warranty claim and can’t find the necessary paperwork. The site offers a free, ‘lite’ option, along with annual subscription plans starting at $24.95.

Bolt from the blue In late February, Apple launched a new range of MacBook Pro portable computers and proudly announced that they use a new Intel technology called ‘Thunderbolt’, which can transfer data between a PC and peripherals at the amazing rate of 10 gigabits per second. That’s about 20 times faster than USB 2.0, which is currently the mostused way to connect a PC to other devices. Thunderbolt is also interesting because it can transfer data and video, which makes it a new way to hook up your computer to a monitor or TV. At the time of writing, there weren’t a whole lot of Thunderbolt devices available, but you can expect to see it appear in external hard drives and displays first. When they arrive, they’ll bear the nifty blue logo you see here. And if you absolutely must have Thunderbolt now, the new MacBook Pros start at $1,399. 58

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wIRELEss sCREEn Laptop computers are great, but their screens are small compared to those that ship with modern desktop PCs. You can get around that with a cable to hook your laptop up to a monitor, but that’s pretty messy. Docking stations are another way to get the job done, but aren’t cheap. Enter Samsung’s new Central Station monitor, which connects wirelessly to some Samsung laptops. The system is very slick: all you need to do is bring your laptop within a couple of metres of the screen and it automatically displays whatever’s on your portable computer’s screen. The Central Station also includes USB ports, and any peripherals you connect to these connectors can also be accessed by your laptop. At the time of writing, a price hadn’t been set for the device, but you can expect to see it on sale in April 2011.

My buSINESS rEVIEWS ... logitech’s Wireless Solar keyboard doCumEnTs In THE CLoud Google has done something cheeky: it’s new Cloud Connect software is a plug-in to Microsoft office and automatically saves any documents you create to Google’s Docs service. Once your documents land in Google Docs, you can access them anywhere you can get onto the Web. The plug-in also makes it possible to share documents with other users, all in real time. Here at My Business, we think this offers a great way to back up your files if nothing else. And the price — $0 — is also hard to beat.

A couple of issues back, we let you know about Logitech’s Solar Wireless Keyboard, and to be frank, we were intrigued by its claim of being able to operate under just the wan light of the fluorescent tubes in our office. So we summoned one for testing and then left it face down with its solar panels facing the desk all weekend. Come Monday, we flipped it over and ... hey presto ... it worked perfectly! We have also been impressed by its wireless performance, which relies on a tiny USB nubbin to broadcast and receive signals. The keyboard is also accompanied by a nifty application that reports on light levels and the amount of energy the keyboard has stored. But we’re not entirely sold on the keyboard itself. Your Editor grew up with electric typewriters and the long ‘travel’ (the term for the distance you need to press to create a character) that they required. The solar keyboard has flat keys that stand only a millimetre or two high and need only a short, shallow press to type. Perhaps I’m a bit unsubtle, but the keyboard therefore feels a bit too sensitive. Other than that personal tick, this is a nifty, slick and well-thought-out gadget.

RIsE And sHInE Getting up in the morning is seldom fun, so we were intrigued to learn about the forthcoming aXbo iSnooze. This alarm clock has the usual bells and whistles (pardon the pun), but also comes with a wristband sensor that communicates wirelessly with the clock to let it know what stage of your sleep cycle you have reached. Instead of rousing you at a specified time, the clock instead looks at the time you’ve selected for a wake-up call, figures out when you are sleeping lightly and chooses that moment as the best and most natural time to start making noise. The function even works after you hit the “snooze” button, to rouse you when your body is ready for the day. Prices start at $279. 59


“Pay attention to small issues with a quick word here and there.”

Do sweat the small stuff for your people S elf-help books often tell you not to sweat the small stuff, and instead focus on the big picture. But I believe that’s not the correct approach when managing employees. Here’s why: imagine an employer wants to end an employment relationship when an employee transgresses. Small businesses in particular find that they are frustrated by the industrial relations laws and the need for warnings. But in many of these instances, a large indiscretion has been preceded by many little things that have been swept under the carpet. This leads me to ponder: if the little things had been dealt with, would the big thing have ever occurred?

Fevola syndrome Too many times, businesses will let the small things slide if an employee is performing well in other areas. But how much will this come back and bite you? It sends a message that we will put up with some bad behaviour in the workplace, as long as you keep performing in others. And this does have a cost. Firstly, it sends a message to employees that all they have to do is produce results in certain areas and it doesn’t matter about the rest. Secondly, it can be difficult to chastise one employee if you are excusing other employees who commit the same error or have the same fault. This could contribute to a feeling of inequity in the workplace. Employers must look at the full picture when evaluating an employee’s work performance. This means looking at their behaviours, and not just their execution of tasks. So you need to ask yourself if a high performer is really worth the trouble if their behaviour means that you lose other employees who are fed up with double standards. This isn’t something that is confined to the business world. We’ve seen the same scenario played out in the sporting world of late, with a raft of sportspeople behaving badly.

Robyn Anderson is a fellow of Australian Human Resources Institute and the Managing Director of HR Navigation Australia, an HR/ workplace relations consultancy specialising in providing outsourced HR manager services to small and medium businesses. To contact HR Navigation, call 1300 669 747 or visit www. 60

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Tacit approval The very real danger that employers face if they turn a blind eye, even to small indiscretions, is that it can be deemed tacit approval. This can compromise disciplinary action down the track, even if that disciplinary action concerns a completely different employee. No employer wants to hear the words: “How come it was okay for someone else to do it, but not for me?” It can also mislead an employee as to your expectations. For instance, it is hard to discipline an employee for habitual lateness if you allow others to turn up even later. Also you would find it difficult to justify a dismissal on poor punctuality if you have let it go on for months without ever

saying anything to the employee. In both these instances, you need to be clear and consistent from the start, re-state the policy, and advise that rules will be enforced from this time forward. You can’t pick and choose when you want policies enforced — they should all be enforced all the time.

Manage the problem, don’t micro-manage the person Paying attention to the small issues does not mean that you need to micro-manage your staff. No employee likes to be micro-managed and it can actually cause further damage to employee performance across your whole team. Managers who micro-manage their staff typically concentrate on every employee action, leading the employee to feel as if they cannot work autonomously. What is needed here is an attitude where you pay attention to small issues with a quick word here and there. Small issues do not usually require a written warning, but they can mean you are less likely to need to give one. Don’t turn a blind eye to problems; doing so is tacit acceptance of non-performance. For example, if you have asked for a quarterly sales report and you want it broken down by region and client, then communicate that clearly; don’t assume that just because an employee is in sales, they will know what you want. Then if you don’t get what you’ve asked for, insist on them providing the correct report. This will stop the salesperson giving you the wrong report and a mistake will not be perpetuated. You can’t blame the salesperson if you have not told them exactly what you want in the report. More importantly, you cannot performance manage them if you keep accepting a substandard report.

The final word Business owners can be hesitant to deal with the small issues in the workplace, often believing that things will sort themselves out, or it is too small to worry about. We get annoyed with staff for not knowing exactly what we want all the time, but they cannot be expected to be telepathic. Clearly communicate your business expectations and if they are not being met, act promptly, even if the problem is a small one. Small things can be a forerunner to future problems if they are not addressed. At the very least, by dealing with smaller matters as they arise, you can avoid the annoyance of simple things not being done the way you want. Just remember, sweating the small stuff means that you are paying attention to your business every day, not just in a crisis, and that has to be a good thing.


Conducting effective performance appraisals P erformance management is not only useful in the corporate world. The process can just as easily be applied in small-to-medium-sized businesses to give them a competitive advantage. A key component of the performance management process is the performance appraisal meeting. This is where an employee’s performance and behaviour is evaluated, expectations are reviewed and agreed actions for improvement are recorded. Performance appraisal meetings should be used as part of a wider performance management process that includes setting expectations, coaching and development, and recognition and reward. Here are eight key steps to holding effective performance appraisals in small-to-medium-sized businesses. • Lay the foundations — Before holding a performance appraisal ensure you have done all you can to equip your employee to succeed. Have you set clear expectations for what performance and behaviour you require from them? Have they been given the right training and tools to perform their role? Good quality position descriptions are the foundation of a successful performance appraisal, as is providing constructive feedback on a regular basis. • Prepare for the meeting — Explain to the individual involved the purpose of a performance appraisal meeting. Tell them the benefits you will both get from it and give them a detailed description of how it will run. Book an appropriate amount of time for the meeting and in the days before it takes place, give the employee a copy of the appraisal document template you plan to use. The template should include performance outcomes and behaviours that were agreed at the beginning of the year. HRhelp recommends you ask the individual to rate their own performance — they are often more objective than you expect. It also helps them to feel in control and increases the chance that they will accept any actions that result from the appraisal process. Conduct your own assessment of the employee’s performance, rating their performance in each area of accountability, and have examples to support your ratings. Remember to collect results or feedback from other people whose input you need for the appraisal. • Create a relaxed atmosphere — It’s an appraisal, not an interrogation so welcome the team member and put them at ease. Assure them the discussion will be confidential and let them know they will be given the opportunity to have their input. When they speak, listen actively to what they have to say.

• Be objective — Stick to the facts and provide specific examples when you raise a performance issue. This will give you credibility as a leader and ensure the best possible outcome of the appraisal. Remember, you are assessing the team member’s past behaviour and performance — so don’t make any assumptions about what their future attitudes or intentions might be. • Stay focused — It can be easy to highjack your appraisal meeting with talk about the latest project, or something other than the performance of the employee. But that would deny you the full benefits of the process. Use the appraisal document to keep yourself on track and stay focused. Be objective. Ask the team member to explain why they gave themselves the rating they did, then explain why you gave them the rating you did. If the ratings are different, spend some time discussing the particular item and ensure you reach agreement on a final rating for each section before moving on. • Be generous — Give plenty of positive feedback on those areas where your team member has performed well, before moving on to areas that need improvement. Explain clearly why you feel they need to improve and link this back to team and business goals. Provide coaching and feedback on ways they could perform more effectively, using specific examples. • Tackle the tough topics — Feedback on poor performance or behaviour should be given when it occurs. A performance appraisal meeting is an opportunity to reinforce what was previously agreed to for dealing with the problem. If the issue is ongoing, offer your continued support in addressing the issue and reiterate your expectations. If the issue was isolated and has been resolved, don’t rake over old ground. • Walk the talk — Ensure the performance appraisal doesn’t become an empty talkfest by making a note of any actions that are agreed upon, and set dates for followup. Ensure the employee understands why each action has been noted, what is expected of them, and by when. It’s a good idea to book yourself time after the meeting to plan to address any actions you take away from the appraisal. Make sure you have a time plan to achieve these actions so you can be a positive role model for your team members. Effective performance management involves monitoring and supporting team members on a daily basis and providing them with timely feedback when issues arise. Surprises should be limited to positive things — like a bonus!

“Performance management can give small-tomedium-sized businesses a competitive advantage.”

Sheralyn Guy, is Director of HRhelp, a company dedicated to providing affordable, practical and effective HR services to small-to-medium sized businesses. For further great HR ideas, call +61 2 8006 1280, email gethelp@ or go online at 61


“We have yet to hear of a staff member who won’t use a procedure they have helped to build.”

The author is founder and Chief Energy Officer of Achievers group. He is a much in demand passionate professional speaker, business educator, author and corporate, business advisor. He has worked with over 140 businesses around the world. Website: Email: Phone: 02 9025 3716 READER OFFER: As a special gift to My Business the first seven readers who email me can attend in May 2011 (Sydney) our one-day Internet Marketing Mastery program in Sydney for only $49 this is a saving of $150, Details can be found at www 62

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Systemise or Die? W

hen we talk about “systemisation” in business we are not referring to installing the latest equipment, the best software, the fastest printers or the largest server in your business. While the systems that support your business are important, the best technology in the world will be a waste of money unless you systemise. Instead, what we are referring to is the process of building efficiency in your business through the meeting of people, process and systems. Some elements of systemisation include: • Agreed/approved, relevant and appropriate policies, procedures and checklists; • Consistency in activities so that team members follow a logical process for every activity every time; • Competency in activities – every team member having and maintaining the appropriate skills to undertake their job consistently, effectively and efficiently; • Standardisation in activities – every team member following the same logical process for one activity; • Accessibility of information – making agreed/approved procedures and checklists easy to access, understand and use; • Preservation of knowledge – knowledge being shared through updating procedures and checklists, team meetings and training; • Continuous improvement – every team member having responsibility for contributing to the improvement of procedures and checklists. Without systemisation, your business may display these characteristics: • Your people will continue to do the work but in any way that is convenient, based on their background and training; • Your processes will be adequate to support your services, but will be ignored, irrelevant or out of date leaving you with ongoing quality issues; • Your systems might be the latest and greatest, but without the skilled people using the correct process, it will remain a case of “garbage in – garbage out”. With systemisation, your business will operate more smoothly and you’ll see some or all of these improvements: • Your people will be skilled and confident in using the right process at the right time, regardless of their background; • Your processes will be used each time every time by people with the appropriate skills. Every activity will be produced with a consistent level of quality and timeliness; • Your systems will be appropriate for your business and integrate seamlessly with your processes while your people will be trained in how to use them most effectively.

How to introduce new processes to your business New processes can (and should) be received with a great deal of excitement. However, it is also common for transforming businesses to have their new processes received with much reluctance and/or actively ignored in favour of the old! The whole idea of creating standard processes and checklists is to introduce the essential consistency on which to build your business. Repeatable, trainable and service orientated processes not only ensure that you deliver consistent quality to your clients, but allow you to build an engine room that is efficient and productive (and of course more profitable). New procedures received with reluctance and/or actively ignored suggest one important thing – there has been no consultation or input from your team – they have no “ownership” of it. Staff feel that the change is imposed and regardless of how good the procedure or checklist is, will find problems and inefficiencies which provide a reason for them to revert to the old way of doing things. Clearly, this situation means that the time and effort invested in the new procedure is potentially lost. Also lost is the opportunity of becoming more profitable with core services. At this point, many business owners and leaders have given up. “It’s too hard to transform”, “I knew it wouldn’t work”, “Transformation is no good for our business” are just some of the many excuses we have heard. Our advice is not to give up but rather change tactics— for each practice that has given up, another one has successfully made the journey—and you can too. Avoid wasting the effort of building new procedures that are ignored by instead recognising that team members who “own” processes will use them. To get that ownership, get your team involved in designing processes. Don’t be afraid or offended if they come up with processes that are very different to the process you think is best. We have seen this time and time again both in our own business and in other businesses we consult to. We are convinced at the power of the team in this area. That leads us to our next suggestions: • If you are concerned the ideas are a bit too radical, remind the team of the objectives and guidelines of the task and get them to assess where there are gaps • Getting your team involved in designing new procedures is unbelievably valuable in ensuring they are adopted in your business: we have yet to hear of a staff member who won’t use a procedure they have helped to build.


Why Sales Is Hard W hy is sales hard? One answer to this question can be illustrated by a conversation I had with the sales manager of a company I worked with a few years ago. He was struggling with some of the concepts I was trying to teach his company to help it improve profit margins and sell more effectively. His view of sales was that people made decisions largely on price and that, to be competitive, his company had to be cheaper than everyone else. When I explained to him that I preferred my clients to be expensive and that not every potential user of his product was a potential ‘good fit’, he became quite agitated. I pointed out that it often takes time for salespeople to change from the paradigm that ‘price is everything’. I also helped him to acknowledge that there had been a number of situations in the past where his company had competed for business on price and still had not been successful. I also explained that some of the company’s customers had not complained about past price increases, because they were offered such a high level of service!

Customers shop for more than just a good price Even though I had just showed him how his customers valued things other than price, he was still not able to understand that price alone is rarely, if ever, the real issue when the sales process gets hard. Explaining that his sales results would change only when his beliefs around selling changed, I asked him what work he had done prior to getting into sales. He told me, to my surprise, that he was initially trained as a plumber. I asked him how long it took to become a plumber and he said that he had to complete a four-year technical course. I then asked: “After that course, you were a fully fledged, qualified plumber able to crawl under people’s houses and fix their plumbing problems?” His answer was immediate. “Oh no,”. “After the course, I had to do an apprenticeship for a few years with a qualified plumber before I could do that!” I then pointed out to him that it took six or seven years for him to become a fully qualified and capable plumber capable of undertaking complex jobs alone, yet the only professional sales training he had undertaken was several group sessions with me which were instigated by his boss! Yet there he was, trying to make complex sales with little training and experience. No wonder he felt price was so important. Most people who enter the selling profession either don’t last or achieve below their potential because they have not been effectively trained. The individual who

can come close to mastering its many facets without the assistance of a professional mentor, manager, coach or trainer is extremely rare.

Product knowledge alone won’t win a sale

“Price alone is rarely, if ever, the real issue.”

It amazes me how salespeople operate under the misguided belief that all that is required to be successful in their field is a detailed knowledge of all their products and services (I do not deny that product knowledge is important), some basic prospecting skills, the use of a few well-worn ‘closing’ strategies, a thick skin and dogged persistence. Another reason why sales is hard is that, unfortunately, most of us have been burned by a salesperson who was more intent on making a sale and earning commission than optimally satisfying our requirements. Selling has therefore developed a tarnished reputation as a profession. This has been exacerbated by the influence of the many books and sales training programmes developed over the last 50 or so years that have sought to provide salespeople with sure-fire tactics and strategies to help ‘close the sale every time’.

Whose interests are you protecting? Recently, I was shopping for a new jacket in a department store. I picked out several which I tried on without success until finally I found one that I thought might be okay. Finding a full length mirror nearby, I stood in front of it trying to decide whether or not this item was what I was looking for. As I was deciding that it did not suit me at all, a voice from somewhere said, “That looks great.” I looked up and identified the source of the voice as a sales assistant. Without conscious thought, I literally felt the hairs on my arms and the back of my neck tingle as I took the jacket off and placed it back on the rack. I then immediately left that department and the store — without a jacket! It did not matter to me whether the assistant was being sincere or not — for all I know, she may have been (although she had no idea what type of jacket I was looking for and why). What mattered was that alarm bells were ringing from my subconscious compelling me to retreat to a place of safety where my hard-earned dollars were not under threat! It is my belief that if you want to be treated with respect, you must treat others with at least the same degree of respect. Likewise, if you want to be viewed as a sales professional, you must develop a high level of selling expertise that is in the best interest of both the potential buyer and yourself.

Phil is an author, sales performance and personal growth expert and professional speaker. He has trained and coached many individuals to achieve their personal and professional goals. READER OFFER: For a free whitepaper on ‘Why Salespeople Fail’, send an email to 63


“Look on your desk right now and see how many brands you can see? I found 18.”

Fighting back against loss leaders “In the struggle for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment.” – Charles Darwin


e see every day that competition has its victors and that they win the spoils. Competitors resort to every strategy available to win the hearts and minds of their customers and we see this in so many retailers’ strategies. The current supermarket price war is an example of this claim for increased market share at the others’ expense. The supermarkets are using a loss leader strategy whereby they reduce the price of essential items — especially perishables — that everyone needs regularly. Loss leaders can also be used to influence customer price perceptions and give them the perception that the brand is less expensive. This technique is often used by, and may work for, large corporate brands who are trying to position themselves as the best-price supermarkets. So how do smaller supermarkets or convenience stores compete against this? The simple answer is that they should not and we do not suggest they try. Instead, small retailers should remember that the key to winning in competition is to be smarter, quicker, more responsive and ultimately to outfox your competitor. “You have to look for a gap, where competitors in a market have grown lazy and lost contact with the readers or the viewers.” – Rupert Murdoch

Brian Walker is Founder and Managing Director of Australia’s leading retail consultancy, The Retail Doctor Group. He can be contacted at, on 02 9460 2882 or via 64

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Here are some fitness tips for being fitter than your competitors: • Be unequally ‘Fit for Business’ – Develop and enhance your unique offer to market. There is no use competing head on with the big guys, so be clever and focus on the things that make your business unique through factors like exceptional customer service, convenience or home delivery. • Be innovative – Keep your business offer fresh and exciting if you want to motivate new customers to do business with you. Generate curiosity and interest to draw customers into your store above all others. We recently attended a presentation hosted by our design partners at E2 Experiential Environments. Its team had just returned from a trip to New York and brought back some of the latest retail trends to share. One example that really caught our attention was the innovative retail approach used by Louis Vuitton, which ran a live design competition where entrants had to sit in the window of the store to create their works. While

fairly intimidating for the competitors, this is a great example of an innovative concept to create real interest and curiosity and therefore encourage customers to enter the store. • Create a community — Use the power of social inclusion to bring your customers together. Reward your loyal customers through loyalty programs and meaningful VIP events. Social media is a great tool to assist in bringing your customers together and making them feel a part of a group. People naturally tend to gather together in groups and communities and accessing this dynamic can be a great success factor to creating loyal brand advocates. • Go multisensory — Customers are being exposed to thousands of advertising messages every day, and this number is increasing exponentially. As an experiment, look on your desk right now and see how many brands you can see? I found 18 without even opening a drawer or getting off my chair! And even more interesting is how many of these you really notice, until this exercise, did you ever know the brand of your mouse that you use every day? This visual and information overload is making it increasingly difficult to cut through the clutter and have your message noticed. So rather than increase the reach or frequency of your advertising, which can be expensive, focusing on the other less-targeted senses can be equally or more rewarding. For example: * Use sound — Use music that suits your branded experience to entice purchases that will deliver on the brand promise. For example, Abercrombie and Fitch uses loud, current music to create a cool, nightclub-like atmosphere. * Smell — Attract customers to you before they can even see you. Lush does this well with a range of soaps that smell good enough to eat. * Taste — Use taste to tempt your customers to try your product. Samples are a great way of tantalising the tastebuds and introducing new ranges. * Touch — Create and encourage a tactile environment where customers can touch and interact with the product. “I just feel that my competitive drive is far greater than anyone else that I’ve met, and I think that I thrive on that.” – Michael Jordan When all is said and done, the competitive instincts within us determine our results. It is impossible to drive any vehicle if the engine isn’t as primed as it could be. There are many other methods of increasing the traffic in your store and driving sales and we welcome you to contact us for further tips and ideas. Happy ‘Fit’ Retailing, The Retail Doctor


The Networking Disconnect I was at a networking event in Europe last year where more than 500 people were in attendance. The speaker who was on stage just prior to my presentation asked the audience: “How many of you came here hoping to do some business today — maybe even make a sale?” The overwhelming majority of the people in the audience raised their hands. He then asked, “How many of you are here hoping to buy something today?” No one raised a hand — not one single person! This is the networking disconnect. If you are going to networking events hoping to sell something, you are dreaming. Do not confuse direct selling with networking. Effective networking is about developing relationships. I know, I know … there is always someone out there who says, “But, Ivan, I’ve made a sale by attending a networking event!” I am not saying it doesn’t ever happen. I am just saying it happens about as often as a solar eclipse. Let’s face it, even a blind squirrel can find a nut. Any businessperson can stumble on some business at a networking meeting from time to time. However, when you have most of the people at an event trying to sell something and virtually no-one there wanting to buy something, you are crazy if you think the odds are in your favour to ‘sell’ at a networking event.

Why networking? So why go to a networking meeting? You go because networking is more about farming than it is about hunting. It is about developing relationships with other business professionals. It is not about ‘direct selling.’ This means you need to move the relationship through the VCP Process: visibility (V) leads to credibility (C) which, with time and effort, leads to profitability (P). With many people, there seems to be a significant disconnect between intent and reality relating to people’s expectations at a networking event. This kind of disconnect leads to poor results, which then leads people to exclaim that networking doesn’t work. Well, from what I’ve experienced myself over the past the past 26 years — along with the results I’ve witnessed with hundreds of thousands of people around the world — networking works just fine. However, one’s intention must be in alignment with the reality of the particular circumstances. If nobody at an event is looking to buy something and you are there trying to sell something, you have a disconnect. If you are there to meet people and move through the relationship networking process, then your intention and

the reality of the situation are more likely to be in alignment. Sometimes you go to a networking event to increase your visibility and to connect with people you have never met, sometimes you go to establish further credibility with people you know, and sometimes you may even go to meet a longtime referral partner and do some business. In any case, the true master networkers know that networking events are about moving through the relationship process and not just about closing deals.

“Networking is about farming, not hunting. It is not about direct selling.”

It’s not about sales I had someone recently say to me, “I’m still amazed at the number of people I run into at networking events that still don’t understand it’s not a sales event, it’s a networking event! They come to the event, try to sell, don’t get any sales, and then they’re disappointed!” Another person told me that “There is a great opportunity to be found in connecting with people and getting to know them. We need to start seeing each other as interesting human beings as opposed to a potential sale!” I find it ironic that so many people are disconnected when it comes to relating to a process that is supposed to be all about becoming connected. There is a paradigm shift that needs to take place before you can make your networking efforts work. That shift is to move from a ‘direct sales’ mentality to a ‘relationship networking’ mentality. If you go to networking events looking to meet new people and move through the relationship process with those people you meet and get to know, then you are working the process correctly.

Networking dos and don’ts Here are five things you need to remember when attending networking events: • Don’t go there to sell, go there to connect; • Have some meaningful conversations with people you meet; • Follow up with people you found interesting or who you can help in some way. Don’t follow up to sell them something; • Meet these people in a one-to-one setting, learn more about them, and ask them how you can help them; and • Go for the long-term relationship, not the short sale. Remember, networking is more about farming than it is about hunting. So, the next time you find yourself at a networking meeting, think about how many people are actually there to ‘buy’ something. Then, remember to stop ‘selling’ and to start networking.

Called the “father of modern networking” by CNN, Dr Ivan Misner is a New York Times bestselling author. He is the Founder and Chairman of BNI, the world’s largest business networking organisation. His newest book, Networking Like a Pro, can be viewed at Dr Misner is also the Senior Partner for the Referral Institute, an international referral training company. 65

EXPERTS sue hirst

“If you want staff to look after customers, you must look after the staff.”

Sue Hirst, Director CFO On-Call CFO On-Call is a team of Financial Controllers who can help business owners understand the ‘Cash-flow Cycle’ and grow business safely, by managing cash more effectively. READER OFFER: Please call us on 1300 362 436 for a free copy of our booklet ‘The Seven Key Financial Numbers that Drive Profit and Cashflow’. www. 66

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Your top five business issues I ’d like to share what I’ve learned during 20 years running a small business. The place I like to start is to note that most businesses have five components: • The product or service you offer; • Marketing and selling; • Operations and finance; • Customer service; and • Human resources. If you proactively manage these five areas, a lot of hassle can be avoided.

The product or service that you offer

Then there is finance to consider. There are costs and overheads to pay, stock and jobs in progress to finance, debts to collect, equipment to be bought or financed, suppliers to pay, interest to financiers and the list goes on. Cashflow is one of the biggest issues. It has to be managed proactively with forward planning, such as budgets and cashflow projections. If cash runs out, the business won’t survive without outside injections. These can be difficult to source if finances aren’t run effectively.

Customer service

Many businesses get started because someone has an idea or a passion. Unfortunately, not enough research is put into whether the product or service is viable and if there is a market for it. Passion is important in business, but if the idea just doesn’t have legs, it’s going to cause a lot of heartache. The product or service needs to be well researched to ensure it delivers a solution or benefit. Research, testing and improvement needs to be ongoing, as markets change rapidly.

Have you ever heard the saying “The customer is always right? If the customer is wrong, go back and read the first line”? Without happy customers, business will be a struggle. Constantly finding new customers is expensive. It’s an often quoted point in customer service training that a happy customer will tell two or three people, while an unhappy customer will tell around 20. Nowadays, you can multiply that by several thousand, thanks to the Internet. A customer service mentality must therefore be paramount.

Marketing and selling

Human resources

Once you’ve found a great product or service and you’ve identified a market, how do you let people know about it? Marketing is one of the most important factors in business success, because there is no point in having a fantastic product or service if no-one knows about it. If you can’t convey your value proposition, the business will fail. You must research your market, let them know what you have to offer and the benefit. Once you’ve got some interest, the deal isn’t done yet. You need to sell to your customer. You need to engage with them, listen to their needs and find ways to solve their problem. It is a long road from getting an enquiry to closing a sale and it needs patient and trained salespeople. A good sales process can have a massive impact on revenue and getting top performers to share knowledge is vital.

Happy staff means happy customers. If you want staff to look after customers, you must look after the staff. I often hear that even big businesses rarely have reviews with staff and don’t provide any mechanism for feedback. Staff, of course, are your most valuable asset. You can have a fantastic product or service, market and sell it well, but if the person delivering it is grumpy and unhelpful, all that good work can be undone. Staff are often the ones interacting most closely with customers and hearing their comments. These provide clues for improvement. Including frontline staff in development meetings is vital. A good start to efficient HR management is to have an organisational chart and job descriptions for all staff and the business owner. You probably spend time dealing with all five areas. The best way to grow your business is to surround yourself with people who understand and specialise in each of the five. You can’t be an expert in all of them and if you try, you will wear yourself out and create an unhappy working environment. During my time in business, I’ve been very fortunate to be surrounded by a team of people focused on one of these areas. It has freed up mine and my business partner’s time to focus on strategic management and growth. CFO On-Call is your outsourced finance management solution with good contacts in some of the other areas discussed here.

Operations and finance Once you’ve made the sale, you have to deliver. There is a lot involved in delivering a product or service to the satisfaction of customers. Systems are the best way to ensure efficiency. Small businesses are often time poor, lack ways to implement systems and then complain about being overworked and trying to do everything. Systems are the solution. Documenting tasks, especially repetitive ones, will help the business owner be involved in more strategic aspects of business.


Rules of Engagement S o you’ve done everything you’re supposed to online. Your Website is live. You’ve signed up for Facebook, Twitter, Foursquare and LinkedIn. Your blog is humming. So, now it’s time to sit back and watch the business roll through the door, right? If only it was that easy! Having an online presence is essential these days, but having an effective online presence can be the difference in having a successful or failing business. So, what are the next steps from here? Here are our top tips on how to be engaging online.

Get found for less To ensure your Website is found, you need to employ search engine optimization (SEO) techniques Most Web development companies will do some sort of SEO for you while setting up your Website. However, there are other ways to get your SEO up without having to pay for it. The most obvious and effective thing to do this is set up an account on the Google listings service. You should also take advantage of what Google has to offer. Google Analytics and Keyword research tools make it so easy to play with your SEO. You can test different keywords and find out what works best. Believe it or not, sometimes the best way to increase your site ranking in Google is to look at places beyond. There are hundreds of free sites where you can have a small blurb, and a link to your business. Some of the more popular ones are Rayv, True Local, HotFrog, Gumtree and Aussie Pages. There are also industry-specific sites (Eatability is a popular one for dining and nightlife) where you can manage a listing.

Something for nothing Your online presence, especially on social networking sites, have to go beyond selling your products. People want to get some benefit from following you online, or signing up to your newsletter. • Run competitions — Not only does that reward your followers but you could also benefit. Why not have entry dependant on the completion of a survey (the results of which you can use to improve your business) or referral? • Develop your own e-guide — Jam it full of useful information and tips. • Have a designated ‘deal day’ — You’ve heard of Dominos cheaper Tuesdays, and Kogan’s Frugal Fridays, you could also choose a particular day to run a promotion or discount on your sites. By giving away free resources, you build trust, and your online community will feel valued.

Stay recent and relevant One of the biggest mistakes we see people make is letting their Website get stale. In a recent survey we ran, 34

per cent of business owners said they update their Websites only yearly, or even less frequently! This isn’t nearly enough. It’s important to keep people coming back by offering up interesting and fresh content. The Marketing Angels Facebook and Twitter pages give away free marketing tips every day. Social networking sites can be easily updated all at once using tools like HootSuite or TweetDeck, so it’s easier than ever to keep across your various social networking sites. We also put up pictures, video, link to related articles, discuss current events that might impact our customers, or whatever piques our interest that day. Your Website can be a little trickier, depending on what content management systems you’re using. Put some time aside regularly to add some new content to your site. Since your Website is generally the first place clients go, it’s crucial that the site’s appearance, themes and content are current. Having a blog is something all small businesses should do. Blogging is often misunderstood or overlooked by small business owners, but can be a great thing for your business. Not only are you publishing fresh content for your online community, but blogging can help from an SEO perspective also. Your blog won’t be an overnight success, and for the first few months it might feel like you’re writing for no-one. Don’t quit — give it at least a year of regularly putting out quality, original content. Encourage your fans on social networks to read and comment, and you should start to see results.

“Be relentless, resource your business to take the load and look for new things you can offer your online community.”

Be a participant One way to engage others is to be an active participant yourself. You may learn a thing or two along the way, but also get some inspiration for your own business. • Follow people you admire and inspire you; • ‘Like’ the pages of people you’ve done business with, to strengthen networking relationships; • Follow the big corporate brands. They have teams of people managing their sites, and small businesses can often adapt corporate tactics to suit their markets. Following your competitors is an easy way to keep on top of what’s happening in your market. It’s so easy to keep informed through blogs and social media, so start following! Don’t publish your content and then disappear. Followers online can be fickle and they won’t hesitate to replace you if you disappear for weeks or months. This means consistently publishing content, replying to questions and comments. The most important tip is that to be engaging and relevant, you need a certain level of commitment. Understand that being effective online is an essential part of marketing. Be relentless, resource your business to take the extra load, structure your day and look for new things you can offer your online community.

Michelle Gamble is Chief Angel at Marketing Angels, a national marketing consultancy that helps businesses “get smarter marketing”. For more information, visit www.marketingangels 67


“Keeping up a facade that you understand, when you don’t, is far from smart.”

In tough times, take tough actions W hat a time we, as a whole country, have had of late. Between floods, fires and cyclones in a number of our states, we’ve really been pounded. And this has meant that for many of us, our businesses have been pounded, too. So, here are some tips to stay strong:

Chase the money 25 per cent of businesses do not ask to be paid, but debt collection is now, more than ever, a critical part of every business. In tough times, people will put off payment, so you have to be savvy about your collections. I’ve experienced some people taking advantage of recent events by blaming the floods, but in fact they hadn’t been flooded. Sure, there is a ripple effect, but at the end of the day, you need to get your cash in. For clients or customers that were genuinely effected, rather than saying ‘I’m so sorry to hear that, just pay me when you can’, be a little firmer with something like ‘I’m so sorry to hear that. Let’s get you started on a repayment plan, and if it’s fixed up within three months, I’ll ensure my Accounts Department don’t charge you interest.’

Buy insurance

Donna Stone is the founder of Stone Consulting, has over 25 years’ experience, 12 staff and hundreds of clients. Her multi-award-winning consultancy and bookkeeping business, which celebrated its 10th year in 2010, uses MYOB, Cashflow Manager and BankLink. Learn more at www.stoneconsulting 68

APRIL 2011

In financially challenging times, people have a tendency to cut costs. You might remember the man on TV recently who, about two weeks before the Brisbane floods, got a quote for upgrading his insurance to include flood cover and didn’t both going through with the policy as he had decided it was too expensive. Insurance is a gamble, so you do have to weigh up benefit versus risk. My advice is to always insure the large assets in your life. Maybe your mobile phone or jewellery don’t need cover, but your largest asset (your home) really should be properly covered. If losing an item will leave you financially devastated, don’t you think you need to protect it?

Shop around I think most business people do this. Get at least two quotes; don’t just rely on the person you’ve always used (and who admittedly does a good job, but over the years, has definitely forgotten to keep his/her pencil sharp when giving you prices). However, don’t go silly. Driving around five service stations to save five cents on your fuel isn’t economical. Remember the expression: ‘Poor people spend time to save money; rich people spend money to save time’.

Know your figures

I’ve said this before and I’ll say it again: know your figures. I see so many business owners who really don’t understand how to read reports or don’t review regular financial reports. Now when I say regular, I’m not talking your annual returns, presented possibly two years after the fact. I am talking about looking at your figures on a weekly or monthly basis. And if you don’t know how to read the reports, then ask for help! Ask your bookkeeper, or business consultant, or accountant, or even bank manager. Asking for someone to explain something you don’t understand is smart – don’t feel you are asking ‘dumb questions’. Keeping up a facade that you understand, when you don’t, is far from smart.

Negotiate I’ll use the ATO as an example. If you are in a postcode that was deemed flooded, you have an automatic extension for lodgements. The extra month to lodge and pay isn’t such a big offer. If it’s not enough, because you genuinely were affected by disaster, then don’t just sit back and do nothing. Get on the phone to them (or get your accountant to do it for you) and negotiate something that is more workable for you. Nothing ventured, nothing gained.

Know when to call it quits To start off, I am not an advocate of quitting. But if, after a number of years, your business is not making any money (or worse still, making a loss) and you’ve given it your best effort, it might well be time to accept defeat and walk away. Maybe it’s time to close the doors and go out and get a job. If that sounds tough, it is. But I have seen a number of businesses over the years that are simply not going to succeed, for a number of reasons, so why keep flogging a dying dog – or yourself? Have I been a bit tough with you? Definitely. But sometimes we need someone to ask the hard questions, and point out the tough choices we need to take. For some of us, business is hard at the moment, but with some smart choices, hard work, close monitoring of your figures, and surrounding yourself with experts in their fields (such as your accountant) you can (and most likely will) succeed and come out the other end a successful business that we will still be in operation in the next decade. Work hard. Keep positive. Succeed!



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Queensland BECs pitch in to help flood-affected businesses Tony Axford, Manager of the Business Enterprise Centre in Ipswich, Queensland, tells the story of how his BEC has helped flood-effected businesses to bounce back.


he recent flooding in Queensland has hit the Ipswich region particularly hard. Huge areas of the region and a large section of the central business districts were under water. This means that many of the region’s 36,000 ABN holders have been adversely affected. This includes 600 businesses directly affected and 1,000 indirectly in the Ipswich region; 2,200 directly and 4,000 indirectly affected in the Brisbane area; 600 directly and 400 indirectly affected in Lockyer Valley; 450 directly and 100 indirectly in Somerset; 250 directly and 100 indirectly in the Scenic Rim; and 350 directly and 100 indirectly in Toowoomba. The enormity of the task cannot be underestimated. The Business Enterprise Centre Ipswich Region (BECIR) has worked effectively with a range of stakeholders and support groups to help rebuilding our local business community. During the flood, the BECIR Manager and Business Advisor were marooned in Ipswich and put together a strategy to firstly let local business owners know that they were not alone, then they immediately followed up with active business recovery strategies. This immediate process included up to 24 active business visitors. Once the water receded, the BECIR was ready with a business recovery process.

Rebuilding business Since the flooding, the BECIR has been working in partnership with other organisations to


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support business during this difficult time. BECIR’s partnerships include: • QRAA Queensland Government (small business grant assessments); • Ipswich City Council (ICC); • Qld Government Department of Employment, Economic Development and Industry (DEEDI); • Ipswich Chamber of Commerce and Industry (ICCI); • Lockyer Valley Council; • Somerset City Council; • Scenic Rim City Council; • BEC Redland Bay; • BEC Brisbane Metro. A range of important and significant initiatives have been implemented. In partnership with the Ipswich Chamber of Commerce and Industry and Ipswich City Council, the BECIR ran a series of free Business Recovery Workshops over a three-week period. Sessions provided information for business owners and helped to arrange ABN and Tax File Numbers for businesses that had lost their records. The Business Recovery Workshops proved extremely successful with over 100 businesses taking part. In addition, the BECIR helped over 300 businesses navigate government grant applications, a task that can seem overwhelmingly difficult when coping with traumatic events. We helped with 215 grant applications, all submitted before the February 1 deadline. This helped

generate $1.3 million to kick-start the economy. The BECIR and its partners have also started a ‘shop local’ campaign, which is being supported by local radio. The BECIR has helped to implement a range of vital initiatives including the establishment of a marquee at the Ipswich Show Grounds to centralise the processing of insurance claims, and the preparation of Fact Sheet Packs detailing all the relevant information useful to affected businesses: • Special Disaster Flood Assistance – Grants facts, guidelines and application forms; • Questionnaires; • Combined Media Release; • ATO information; • ASIC information; • Australian Government Disaster Recovery Payment Fact Sheet ; • Bank hardship relief packages fact sheets; • Telstra and Optus relief package fact sheets; • Planning and Development Approval plus Process and Fees information; • Life Line and business stress management material. From this, a Business Disaster Recovery Manual was developed by the BECA which was made available to all BECs throughout Australia during the floods in Queensland and Victoria. Additionally, a Temporary Business Centre is being established in partnership with NOVA FM providing a range of office support systems

Cairns gains its first BEC

including computers, phones and faxes for businesses to use during rebuilding phase. Two sites are currently being considered: Ipswich City Square; and The Fiveways on Brisbane Rd.

Generous help BECIR has also helped facilitate volunteer tradespeople organised by Triple M in Sydney. We have been overwhelmed with support from Business Enterprise Centre Australia mentors offering short-term assistance. Many businesses have just completed the cleaning phase and are now making decisions as to the best way forward in terms of rebuilding. This may involve detailed plans showing locations of power/data inputs etc., and then the process of accessing materials and engaging tradespeople begins. It is clear the ongoing involvement of the BECIR in pairing mentors and tradespeople with appropriate businesses in need will be long term. BECIR has sourced a Trauma Psychologist (Ronita Neal) to provide free assistance to local business owners. In addition, Lifeline is contributing as a strategic partner to our recovery workshops. Information dissemination and information collection have both played an important role in the ongoing success of the BECIR’s flood recovery initiatives. A questionnaire for all businesses,

not only those affected by the flooding was put together immediately following the flooding, in order to capture information about priority needs and to assist in business matching. The BECIR, ICC and ICCI Websites currently contain a PDF of this questionnaire, which is also included in the Fact Sheet Packs outlined previously. The Websites are regularly updated to provide information and fact sheets related to business assistance, and links to supporting Websites. ICC, BECIR and the DEEDI have each contributed toward a media package involving radio and print advertising for a period of two weeks beginning Friday 14 January. This advertising promotes the Business Recovery Centre and the Information Sessions. The BECIR and the sessions also promoted through databases, Facebook, and Twitter. The BECIR has accomplished this and much more, without any additional funding.

Short and mediumterm support BEC resources are stretched at present, and further urgent funding support is desperately needed. Under normal circumstances, the BEC will give support to 1,200 businesses each year. In the past four weeks, the BECIR has worked with volunteers to help over 300 businesses. This number will increase when the indirect business start seeking advice.

Advance Cairns, the peak coordination agency for economic development in far north Queensland, has opened the region’s first Business Enterprise Centre (BEC). “Small businesses in north Queensland have been asking for one-to-one support for quite a while,” says Margaret Darveniza, Acting CEO of Advance Cairns. “There are 23,000 business in the region and 22,000 of them are small, so the small business sector is really important here as employers and as suppliers to industries like tourism and agriculture. We know they want direction on the maze of services available to small business, and some cost-effective support where someone can talk to them about their business.” As BECs offer just that kind of support, Advance Cairns has established one to serve the region. “We see ourselves as offering help to start-ups so they can find help with all the necessary planning and preparation to get a business up and running,” Darveniza says. “We also think we can help small businesses who are doing it a bit tough.” In the wake of Cyclone Yasi, plenty of businesses in the region fall into that category and Darveniza says the new BEC will be a big help to those organisations. “In my experience, people can get a bit down after a disaster,” she says. “Some objective support can help them get up again.” The new BEC will also help by assembling a panel of local businesses including lawyers and accountants who will offer cost-effective services to local businesses. At the time of writing, Darveniza said she expected a BEC Manager would start work in late March. Hiring a deputy would be one of the new manager’s first acts. “We had hoped to have a small business advisor borrowed from Townsville when we launched, but he was flooded in,” Darveniza says. “He started work a week after the launch.”

For further information, contact Business Enterprise Centres in Australia on 1300 363 551 or visit 71

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