Learn how the founders of
Some of Australia’s
enormously profitable enterprises richest men and
like Just Cuts, Aussie Home Loans, women reveal in
ModelCo, Elite Introductions, Fat Prophets, EcoStore and fascinating detail
fastflowers.com took a great how they made
idea and turned it into a highly
their first million
lucrative business. Discover what drove them forward, the risks
dollars and offer
they took, and how they’ve
their ‘Golden Rules’
managed to keep their businesses
on how anyone
going through the inevitable
ups and downs.
can increase their
More than just a collection of truly wealth. Some are
inspirational stories, the wisdom well-known high
and experience they share here
flyers, others fly
might just be the catalyst you
need to turn a great idea into your mostly under the
own million dollar enterprise!
radar, but what
they all share is
Nick Gardner is the Business Editor of the Sunday Telegraph, entrepreneurial
where the interviews that form
vision and financial
the inspiration for this book
success.
first appeared.
A L L E N & U N W I N
Cover design: Darian Causby
www.allenandunwin.com
BUSINESS
**half title 8/12/09 8:05 AM Page 1
Nick Gardner is an award-winning journalist who spent 17 years working on The Sunday Times in London where he edited both its ‘Money’ and
‘Motoring’ sections. In 1998 he wrote its bestselling book 50 Essential Questions on Money.
In 2007 he joined the Sunday Telegraph in Sydney to set up its ‘Personal Finance’ section and is now Business Editor of the Daily Telegraph and Sunday Telegraph.
**title page 10/12/09 6:00 PM Page 1
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Acknowledgements Thanks to Alasdair Macleod, managing director of News Limited, for his help and support.
Thanks also to Kiershen Mackenzie, Stuart Austin, Fiona Fraser, Rob Harris and David Rothnie for being such good friends, and also to my brother Jason.
An Idea Worth a Million Dollars—Danial Ahchow
Pub Baron Shrugs off the Worst of Times
An Ad for the Good Life—Grant Allaway
Making Millions for Others—Charles Anstis
The Power of Flowers—Jonathan Barouch
An Ideal Business Model—Shelley Barrett
Chasing Big Bickies—Andrew Benefield
The Unbreakable Bond—Peter Bond
A Winning Flight of Fancy—Hans Hulsbosch
The Day that Changed a Life—Margot Cairnes
An Idea Awash with Cash—Jim Cornish
A Fascination with Figures—Angus Geddes
A Career Well Matched—Trudy Gilbert
Success on the Line—John Ilhan
A Life of Talking Points—Alan Jones
A Cut and Dried Success—Denis McFadden
A Fine Performance—Andrew McManus
The Boss with the Lot—David Michaels
X Marks the Spot for a New Approach
Success All Wrapped Up—Michael Paul
Go Green for Gold—Malcolm Rands
The Coffee King who Changed Australians’
He Chose to Kick Goals—Peter Switzer
Special Blend for Success—Angela Vithoulkas
In Australia, entrepreneurialism is woven into the fabric of society. Australians aspire not only to home ownership, but to property investment—
and they dream of owning not just one property, but an entire portfolio.
Tax breaks on property ownership are turning Australia into a nation of landlords, and that same spirit is fuelling a desire to break free from the nine-to-five culture to a life where their destiny is in their own hands, whether it be through a franchise or a small, independent business. The government fosters such entrepreneurial ambition with generous tax breaks, and while our big banks can sometimes make life difficult for small businesses, many start-ups not only survive, they prosper.
In this book we learn how it can be done, and how others can follow in their footsteps.
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An Idea Worth A
Million Dollars
Danial Ahchow
Service Central;
established 2005;
100 employees;
$4.7 million turnover
eginato
One day, when Service
Central is worth billions
of dollars (as I’ve no
Photo: Anthony R
doubt it will be) and founder Danial Ahchow is a squillionaire (which he most certainly will be), somebody will say: ‘What a simple idea, why didn’t I think of that?’ So simple, in fact, that the chances are many of us have had a similar idea. But picturing a simple idea and having the
determination and vision to make it a reality are two very different things. And simple though Ahchow’s idea was, implementing it has consumed the last five years of his life, eaten millions of dollars in investment capital, and only recently made the thirty- two- year- old entrepreneur a millionaire—on paper at least.
But millionaire status is just the beginning.
Global domination is also on the company’s agenda, and Ahchow has appointed Australian business legend Shaun Bonett, the property developer (and, with a fortune of more than $200 million, a regular on the Young Rich List), and Cliff Rosenberg, former managing director of Yahoo! Australia & NZ, to help steer the company’s growth. It is a testament to the potential of the business that both were so keen to get involved. ‘I wanted the experience and credibil-ity of these guys and I was so happy they wanted to get on board,’ Ahchow says. ‘They’re easy to get along with and have so much experience, it’s been fantastic.’
So what is this amazing idea?
As I said, simple: a quick and easy way for p eople to find reliable and competitively priced tradesmen instead of flicking through the Yellow Pages in blind faith. ‘Looking in Yellow Pages or even scanning online can feel like doing the
AN IDEA WORTH A MILLION DOLLARS 3
lottery,’ Ahchow says. ‘I was trying to find con-tractors for my dad’s cleaning business when I had the idea—there was just no way of telling how good p eople were or whether they wanted the work.’
Initially, Ahchow thought everything could be automated. ‘I had this vision of a black box that could do everything, match all customers with tradesmen, and we’d make millions,’ he says, waving arms in the air enthusiastically. ‘But since those early days, we’ve spent about $4 million on IT and we still don’t have any little black box.
And we probably never will.’
The main reason is that human input is needed to establish who is good and who isn’t. A black box just can’t give Ahchow the unique selling point that underpins Service Central’s business.
‘There are review sites for almost everything, but you can’t just ask p eople for reviews of tradesmen. Companies have tried that, and they’ve had firms giving themselves great reviews, or rubbishing their rival across the road.’ Ahchow’s vision was of a site that ‘had to be independent and be able to prove its independence’.
So Ahchow took on the leg- work himself.
Service Central now employs almost 100 p eople to visit tradesmen and rate them on four indicators. First, they need to be properly registered
with their trade association. They also need to be fully qualified and able to prove it. Third, they must have insurance—which happens to be where about 75 per cent of businesses fail Service Central’s eligibility test. Finally, Ahchow applies what he refers to as ‘the granny test’. ‘It’s quite subjective, but we ask ourselves: “Would you invite this person over to Gran’s for tea?” ’
Perhaps unsurprisingly, many companies also fall at this final hurdle. ‘We don’t want to be rec-ommending p eople who are swearing every other sentence—it’s not the image we want to convey.’
The tradesmen are then profiled and sorted by fee ranges and job capabilities: ‘We don’t want to send a handyman to build a skyscraper, and we don’t want to send Multiplex to repair a gate.’
Each company selected can register for an annual fee averaging $3000, and a per- job kickback of $7.50 for small tasks and $30 for bigger ones.
With more than 3000 businesses now registered, the site’s turnover is over $5 million a year and rising fast.
The business didn’t really get going until 2005, yet Ahchow made his first million in 2007, when the company was raising capital for further expansion and his 50 per cent stake was valued at $3 million. ‘It was weird,’ he recalls. But after it
AN IDEA WORTH A MILLION DOLLARS 5
happens, ‘You don’t behave any differently. I still act like I don’t have [the money].’ Well, almost.
‘I’ve bought a house in Melbourne and a BMW
Z4, which is a nice toy. Other than that, I really don’t go spending money wildly.’
Ironically, rather than reducing the company’s revenues, the global financial crisis helped it become more profitable.
‘It resulted in us taking a long hard look at our costs and really cutting back,’ Ahchow says.
‘We have been reducing staff numbers and radi-cally cutting overheads. Not that it’s been forced on us—it’s more pre- emptive. The business has continued to grow, but we are preparing for a worst- case scenario. Anything above that is a bonus.’
Ahchow has found more tradesmen apply-ing to get on his books as the crisis has shaken business confidence: ‘They want to source as much work as possible, so suddenly we’re getting swamped by more and more tradesmen. It was such a struggle at first, but I suppose it’s no surprise that in a recession we’re getting more applicants.’
In addition to laying off some staff, Ahchow has cut back on some of his marketing costs and focused more on online advertising, which is easier to monitor.
‘I use the 80:20 rule a lot,’ he says. ‘Eighty per cent of your business tends to come from 20 per cent of your customers, so focus on that 20 per cent. Similarly, 80 per cent of your success with marketing wil come from 20 per cent of your spend, so concentrate on those elements. It’s common sense, real y.’
Service Central is getting around 10,000
inquiries a month—and that will jump substan-tially after Ahchow signs a deal with a national hardware chain to provide tradesmen to its customers. Other big companies also want to get involved: ‘We’re now speaking to AGL and TruEnergy [about how we can help them] manage their workload to get their [excess] jobs out to tradesmen as well.’
Ahchow says the downturn has also made businesses more open to partnership deals. ‘It’s a great time to look around to see who you can partner with to strengthen your business.’
To help ensure consistently good service, customers are invited to rate tradesmen when they have finished their work, much as sellers are rated on eBay. If a tradesman falls below three stars out of five, he must explain to Ahchow and his team why he shouldn’t be kicked off the register.
Tradesmen may be queuing up to get involved now but in the early days it was a struggle, Ahchow
AN IDEA WORTH A MILLION DOLLARS 7
says. ‘I had to call 600 plumbers just to get a meeting with one of them, and even then it took four hours to persuade him to pay a modest $80 annual fee to join us. P eople kept saying they’d heard it all before. It’s difficult to keep the faith at times like that, but I had such confidence in the idea—I knew it would work if only we could get enough tradesmen.’
It took a great deal of faith not only for the tradesmen but for Ahchow and his father—
who helped finance
the project—to stick
I had to call 600
with the idea. And plumbers just to get a a slice of luck. ‘We ‘meeting with one of them, advertised on radio. and even then it took four hours to persuade him to
It cost $16,000 a pay a modest $80 annual month, which felt like fee to join us. P eople kept a huge gamble. Then saying they’d heard it all the radio station had before. It’s difficult to keep a competition where the faith at times like that, the major sponsor but I had such confidence in the idea—I knew it would
dropped out, so we
‘
work if only we could get
accidental y became enough tradesmen.
the major sponsor of
this Melbourne- wide promotion.’ It was the stroke of fortune they needed, he says: ‘It got us started.’
The service is now available right up the east coast, from Melbourne through Sydney to
Brisbane, and it’s expanding on the Gold Coast.
Overseas is next. Ahchow says that while the US
does have a similar service, that doesn’t mean he can’t go there. ‘First- mover advantage isn’t everything—it depends how you tackle the market.
But there is nothing like us in the UK or Europe, and that’s a huge market.’
There is still work to do before Service Central dominates Australia. But judging by his success so far, you’d have to say that Ahchow has a very bright future indeed.
Nick GardNer
GolDen ruleS
1. Keep communicating with your staff. They need to know you’re in control and they need to know what is happening. Keep them informed.
2. It’s not just about finding smart p eople, it’s about empowering them.
3. Don’t promise anything you can’t deliver.
4. Use economic downturns to cut costs.
5. Focus on the 20 per cent of your customers who provide most of your business.
6. Never deceive yourself—assume the worst and build your business model accordingly.
Pub Baron Shrugs Off
The Worst Of Times
Mark
Alexander- erber
Pubboy;
established 1997;
twelve employees;
ard
undisclosed turnover
Mark Alexander- Erber is
passionate about things.
Photo: Adam W
Things like guns, fast cars, Harley- Davidsons, women and tattoos. He is not, in short, your average millionaire businessman. Indeed, depending which reports you believe about his Pubboy empire, he may not be a millionaire any more. But even if he’s not, his wild ride to
10 HOW I MADE MY FIRST MILLION
riches was certainly a colourful one.
Alexander- Erber’s language is also colourful—tending to psychedelic.
By his own admission, 2007 (when he turned thirty- seven) was a horrible year. Everything that could go wrong did, including fire, flood, theft and divorce. No ordinary person could have coped with the things that happened to him in ’07, he maintains: ‘A normal businessman wouldn’t have handled it, there’s just no f****** way. They would have ended up in a ball in the corner, in the foetal position, sucking their thumb, on f****** medication.
‘I got through because I believe I’m the tru-est essence of an entrepreneur. And that’s real. I don’t give a f*** what anyone says, that’s real.
I’m real. You cut me, I bleed. Tell me something funny, I laugh. I see something sad, I cry. It’s not a f****** show, this is me.
‘P eople don’t see that. They see what they want to see.’
I first met Alexander- Erber in his Paddington, Sydney, offices a couple of years ago, when Pubboy was on the rampage, with a chain of twenty- six hotels pouring their profits into its owner’s denim pockets.
The walls of his lavish home—complete with pool table, motorcycles, pinball machines,
PUb bARON SHRUgS OFF THE WORST OF TIMES 11
super- sized stereo and silly- sized TV and computer screens—were covered with framed articles boasting of his business acumen and his inclusion in BRW ’s Young Rich List. To describe him as media friendly would have been like calling Kevin Rudd slightly smug. It’s fair to say that he lost a little of his enthusiasm for the press after his relationship with Amber Petty (bridesmaid to Princess Mary of Denmark) became public. A photo of the two at a Pubboy Christmas party, along with an assortment of bikies including Bandidos chief Rodney ‘Hooks’ Monk (who was later mur-dered), stirred a media frenzy very different from the kind he’d been used to.
Alexander- Erber gives his bald head a rue-ful shake and points out that he’s never been a member of a bikie gang himself. ‘P eople try and link me to that; it’s a media- driven thing,’ he says.
As the thinking goes, ‘I’ve got tattoos, a goatee and a bald head, and I ride Harleys, so I must be bad, or I must think bad. It’s not like that at all. The Israeli ambassador to Australia is a very good friend of mine. He’s a magnificent person, but if I hang around with him p eople don’t suddenly say I’m pro- Israel.’
‘On the other hand, I will say I would have some of the bikies I know over to my house
12 HOW I MADE MY FIRST MILLION
before I’d have half the bankers. They’re a lot nicer p eople, and they’re real.’
It’s unlikely Alexander- Erber has had any of his recent clippings framed for his wall. Those news items carried headlines proclaiming that his empire had collapsed and he was $20 million in debt. It’s a subject he’d rather not discuss in detail.
But he will admit that at least some of his pubs are in the hands of receivers, reportedly appointed by ANZ Bank, which is said to be owed $10.5 million. ‘In 2007, we had a series of events—fires
[the Lawson pub
It was biblical. At one in Mudgee], floods point I looked out the [which trashed three
‘
‘
window expecting to see a of his Newcastle plague of locusts.
pubs] and robber-
ies,’ he says. ‘It was
biblical. At one point I looked out the window expecting to see a plague of locusts.
‘Then my marriage broke down, which was tough. I had a series of things that forced me to restructure. What I’d like to say is that all the reports that have come out about me have been absolute bull****. We haven’t gone bust at all.
‘I’ve restructured. I made a decision to work with the banks. We didn’t go bust for $20 million; I’m working with administrators and receivers to restructure the group. Some will be sold to
PUb bARON SHRUgS OFF THE WORST OF TIMES 13
pay off the bank debt. I’m hoping to do some kind of deal to get some of the pubs back and keep moving forward and fixing up all creditors.’
To most p eople that sounds like an unmiti-gated nightmare, yet Alexander- Erber says he’s ‘so happy and so excited’ about what’s happened he can barely put his feelings into words. ‘All this has made me refocus and look at my life and what I want. It gets to the point where you think: “How many cars do you want? How many flash houses do you want to live in?” I’ve always been spiritual, but I got lost along the way. Now I’m finding I’ve got time to sit and reflect on where I went wrong.’
What would tip some p eople into depression or worse is to him a valuable life lesson: ‘I don’t look at anything as going wrong; I look at it as an experience. I’ve definitely been let down by p eople who worked closely with me, and I take responsibility for that. I trusted them too much.
I thought they knew what they were doing, and they didn’t. It’s been an amazing experience, and anyone who counts me out would be foolish.’
Alexander- Erber’s eye is still on the future, but it’s a calmer, saner future: ‘The way I’m going to set things up is going to set me up for the rest of my life. I’m meeting some incredible, spiritual p eople who are supporting me. I’m excited about that. I’m very fortunate to be learning this
14 HOW I MADE MY FIRST MILLION
lesson at an early age. And I’m certainly not on the bones of my arse.’
Although his flamboyant tattoos—‘Live life your own way’ covers his back—suggest he crawled up off the mean streets, Alexander- Erber grew up in Vaucluse and was schooled at Sydney Grammar and Cranbrook, where one of his classmates was James Packer. However, he didn’t enjoy ‘the confines of school’ and left halfway through Year 12 to attend catering college.
In 1985 he took a job at the Regent Hotel in George Street. He stayed there until 1997, when he bought his first pub, the Iron Duke.
His Pubboy empire grew and grew until he hit millionaire status ‘on paper’ in 2003. But if that came as a surprise to some, for him it was merely the culmination of a lifetime of entrepreneurial effort. ‘My whole life I was making money: washing cars at weekends, doing up cars, various things,’ he says.
‘From very early, I trained my mind with affir-mations and visualisations. When I was fifteen, I’d get up every morning saying: “I am a multimillionaire, I drive a Rolls and I live in a waterfront house.” Although those things weren’t in my life yet, I trained my mind to think like that and to believe that. Once you believe it, it manifests itself and it happens.’
PUb bARON SHRUgS OFF THE WORST OF TIMES 15
When the multimillionaire visualisations became reality he thought it was important to reward himself, and he did. ‘I’ve always had two cars, right from when I learned to drive, whether it was a Mustang and a Land Cruiser, or a Porsche and a vintage car. At one stage I had thirteen cars.
I don’t spend a lot on clothes, but I like guns. I collect guns; I’ve got about ten pistols. I’ve got a massive collection of rock ’n’ roll memorabilia.
I suppose I’ve spent money on things like that.
I’ve got a tile from the pool that Brian Jones [the founding Rolling Stones member] drowned in.
That’s pretty cool.’
He regrets that as the Pubboy brand developed his personal life became public property, but the experience didn’t frighten him all that much. Indeed, he’s now working on a reality-television show about himself that he says Foxtel and one of the big networks have shown interest in. ‘It’s an excellent capture of my life,’ he says.
‘I’m very passionate about everything I do. I’m passionate about my children. I’m passionate about my business. I’m single, so I’m passionate about women.
‘Money comes and goes. You don’t take it with you when you go; all you take is a good soul.’
StepheN corby
16 HOW I MADE MY FIRST MILLION
GolDen ruleS
1. Live your life your own way.
2. Stay true to your dream.
3. believe in yourself.
4. Make love, not war.
5. get your priorities straight.
6. And remember who the real boss is—bruce Springsteen.
An Ad For The
Good Life
Grant Allaway
AD2one;
established 1999;
fifty employees;
$30 mil ion annual turnover
eginato
Being rich suits Grant All-
away. It’s not just that he’s
young and handsome and
Photo: Anthony R
has a fortune at his fingertips. Or that he spends obscene amounts of money on handmade shirts and suits. He simply couldn’t exist any other way.
‘I’d be terrible at being poor,’ he admits. ‘I’d go mad if I had to think about spending money; if I had to budget or think twice before going
18 HOW I MADE MY FIRST MILLION
out for an expensive meal, or booking a holiday.
Those things would really irritate me.’
Just as well, then, that Allaway is boss of AD2ONE, an online advertising agency he has taken from a four- man operation about to go bust in 2000 to a multinational business that turned over $20 million in 2008/09. It has offices in London and Sydney and, after becoming AOL’s new online advertising agency, is now the largest such agency in Australia.
As Allaway points out, the 2009 economic downturn was the first where there was a viable advertising alternative to TV, radio and newspapers. In previous deep recessions, online ads didn’t exist.
And it’s an alternative advertisers clearly like, with revenues 15 per cent higher in 2008 than a year before. Allaway concedes that even so, his UK business would have had a ‘relatively flat’ year in 2008 had he not won quite a major client—eBay. As a result of its business, however, his revenues zoomed 200 per cent.
‘We’re having a great recession,’ he says. ‘We are lucky to be in a sector that is not too badly affected. [That’s mostly] because online advertising is relatively cheap, transparent and easy to monitor. Advertisers are leaving other forms of media and [doing their] spending online.’
I meet Allaway at the $12 million waterfront mansion at McMahons Point that he’s rented for his stay—after spending £20,000 on first- class flights from London for himself, his wife, Sarah, and their three children, all under five years old.
‘Ah, the kids can play up on the plane sometimes, and the other passengers must hate me, but I don’t care,’ he says. ‘The [expense] is worth it because the kids can run around and they get looked after.
It’s fantastic. I always travel first class now.’
When I arrive the scene is a perfect picture of happy family life, with Allaway’s two giggling daughters climbing on his back as he crawls across the floor.
But his life has not always been so idyllic.
Born in London, he had a happy early child-hood—his father was a financial director for a steel company and his mother was a housewife.
‘It was the classic suburban family, 2.2 kids, comfortable existence,’ he says. ‘I always got the bike I wanted at Christmas and all that. I was particularly close to my mum—a bit of a mummy’s boy really. But one morning, when I was twelve years old, my mum didn’t wake me up for breakfast like she usually did. It was my uncle instead. I went downstairs and my relatives were all there, and they told me straight: Mum and Dad had been killed in a car crash.
20 HOW I MADE MY FIRST MILLION
‘Obviously I cried and I was shattered, but I didn’t shut down. You find a way of carrying on.
You just do, even when you’re twelve.’
A couple of years later, doctors blamed a painful skin rash on the stress and depression that Allaway suffered in the wake of his parents’ death. One thing he didn’t have to worry about was money. He received an extra £65 a week in benefits because of his orphan status.
‘In 1985, when you were twelve years old with no outgoings, that was a fortune! I had all the latest gear, [running shoes] and tracksuits. And I knew there was a £200,000 trust fund that would kick in when I was eighteen, so actually I never had to worry about money. It’s always been there. I’ve been skint because I’ve spent it too quickly, but there’s always been more around the corner.’
Allaway enjoyed school, where he stood out as the best- dressed student, and by the time he went to university he’d received the £200,000.
‘I spent the lot,’ he says. ‘By the time I finished university at twenty- one, it had all gone.’
He did, however, do one constructive thing with the cash—he put £3000 down as a deposit on a £30,000 flat in Brighton that today is worth about £170,000 ($370,000). ‘If that flat—which is a s***hole—can grow in value to £200,000,
then I’ll have made it all back! That would be something.’
After university, facing poverty for the first time, he found a job with a photography company, cold- calling p eople to try and sell them vouchers for a family portrait. ‘I really took to it,’ he says. ‘I thought to myself, I’m going to get a job in media sales after this, so I ended up in sales jobs on a variety of magazines, including one that provided a company car, which I thought was the ultimate achievement!’ Next he joined the publishing firm Reed Elsevier, selling ad space to corporate clients, honing his sales skills as he worked across its range of publications. Then, in 1995, when the Internet was still in its infancy, he got his first online job, selling online ads for Reed. ‘I was having to explain what a website was to all the potential clients,’ he says. ‘P eople just didn’t understand, let alone want to spend money advertising on it. I don’t think I sold anything for a year.’
In 1999 Allaway left Reed and joined a former colleague and friend who was running AD2ONE in London. The agency had been set up to sell ads across a range of websites for Vivendi, a French media company. But after a rapid expansion, the dotcom bubble had burst and AD2ONE was left hanging. ‘Vivendi had an AD2ONE office in every major city in Europe.
22 HOW I MADE MY FIRST MILLION
It closed them all down except [the one in] London because although we were losing money, we did at least have some turnover,’ he says. ‘Then a small private company came and took over and did nothing, so eventually my business partner Julian and I, who were running AD2ONE at that point, said to the owner: “Look, if we leave, you’ve got no company. Why don’t you just let us take it off your hands?”
‘So we did. All we had to do was take on the
£150,000 of debt, and the company was ours.’
The pair immediately set about selling across the Vivendi sites and acquiring new sites to sell ads onto. They had a powerful incentive to choose well, he recalls: ‘We were only as good as the websites we represented because nobody would want to advertise on rubbish sites. Very quickly we won Disney, Discovery Channel and Eurosport, and started selling ad space to companies such as Ford—companies that aren’t interested in response rates, they just want a brand presence on other reputable brands’ websites.
That’s what we specialise in: brand advertising, putting the right ads with the right sites. In Australia we won Lonely Planet and Expedia.com.
au soon after opening, which was great.’
His first million came in 2005, when the London company made a clear $3 million profit,
which he and his partner split down the middle.
AD2ONE started in Australia the same year, selling ads on UK sites
visible only to Aus-
but as he puts it: ‘I’ve
tralian users—mainly ‘
‘
always thought I had all my
newspaper sites such bad luck all at once, back as The Times and The on that morning when I Guardian, and Sky was twelve.
Sports. It is expand-
ing rapidly and is now the largest online agency in Australia.
It’s all looking up for Allaway now, and some might argue he’s had a pretty easy run of it. But as he puts it: ‘I’ve always thought I had all my bad luck all at once, back on that morning when I was twelve.’
Nick GardNer
GolDen ruleS
1. Never spend more than you have coming in.
2. Surround yourself with good professionals such as lawyers and accountants to give good advice.
3. Use downturns as opportunities to cut costs.
4. Never forget what makes your business unique.
5. Never underestimate your competitors. Para-noia can be good.
6. Always be home to run the bath for the kids.
Making Millions
For Others
Charles Anstis
Mandala Financial
Group;
established 2009;
five employees;
ellegrini
$750,000 turnover
GPA Matrix;
established 1973;
Photo: Ella P
thirteen employees:
$3 million- plus turnover
He spends four hours a week meditating, treks in the Himalayas for a month each year and has built a dressage arena at his multimillion- dollar home in the Hunter Valley. Charles Anstis isn’t
your average financial planner.
More concerned with the teachings of the Indian spiritual guru Amma than with his next commission payment, he finds no conflict in the fact that his clients are predominantly money-obsessed, single- minded corporate high fliers or sports stars. Many have no interest in anything beyond amassing a fortune—and Anstis helps them do it. ‘Yes, we’ve got $200 million of clients’
money invested,’ he says. ‘And we’ve made a lot of p eople a lot of money—and I’m proud of that.’
But his spiritual bent means he’s not content simply to sell his clients the right life- insurance policy: ‘My job is as much about counselling my clients as giving them financial advice. Very often, I find myself talking to clients who have more money than they could ever spend, and the money my investments make them each year is immaterial to them.
‘So I find myself asking them questions, prob-ing to find out what they actually want out of life. Why are they trying to build their wealth?
What do they want to do with their money?
You would be amazed at the number of p eople who have no idea what they’re working for, what their ultimate goals are. I help them identify these things and build sensible financial plans to achieve them.’
26 HOW I MADE MY FIRST MILLION
The process can be emotionally challeng-ing, Anstis says. ‘Many p eople have never been asked these questions before. And aside from that, answering them requires thinking about your feelings, about yourself and your family, in ways that you may never have considered before.
The way you structure your estate for inheritance or tax purposes can reveal much more than you think about how you feel about your family and what your values are. Sometimes it’s a draining process, and I certainly feel that I’m being trusted with very personal information.’
Anstis, from England’s picturesque New Forest, dropped out of Oxford Polytechnic after only a year studying accounting and finance and embarked on a career
The way you structure at Grindlays Private
‘your estate for inheritance Bank. He was placed or tax purposes can reveal in the Middle East much more than you think department, which about how you feel about
your family and what your turned out to be values are. Sometimes it’s an eventful second-a draining process, and I ment. ‘We looked
‘
certainly feel that I’m being after a lot of emi-trusted with very personal nent dignitaries and information.
members of various
royal families in the region. They used to come to the south of France every year, so Grindlays
sent me down to Cannes to look after them.
Most of my work was straightforward banking stuff, but then I started helping them with everything from shopping to arranging their car from the airport. That taught me about service and how you can really add value.’
The ways of Middle Eastern princelings didn’t always sit well with those of France. One day in the late 1980s, Anstis says, a member of the Saudi royal family walked into a tiny bank branch in Monaco and said he wanted $US50,000 in cash for a visit to the casino. ‘Of course, the French thought this was out of the question and said it would normally take a week, not an hour—
not to mention that they didn’t know who he was. They asked him for ID, but he didn’t have a passport with him. So he went outside to his car, came back with an envelope and pointed to the stamp, which had his head on it! Eventually, after much fuss, they gave him the money.’
During his time at Grindlays, Anstis was posted to Australia on a few occasions. He decided it offered a better quality of life than the dirty streets and grey skies of London. ‘My wife and I loved the Hunter Valley, so that’s where we headed,’ he says. ‘I had a bit of money, but not much. But I did have a good contact at Lloyds of London, the insurer, who I knew I could place
28 HOW I MADE MY FIRST MILLION
some high- risk and unusual insurance with—
the sort many p eople wouldn’t know where to find.’
Anstis opened the phone book and began cold- calling companies, offering his services.
‘Essentially, I would find rare, bespoke insurance cover—often multimillion- dollar policies—to cover footballers or rugby league players that other p eople just can’t negotiate insurance for.’
Take a rugby league player looking for injury cover: ‘A typical contract might detail wages of $300,000 a year, so that’s $900,000 over a three- year contract period. Generally speaking, if a player is injured in Year 1, he might get the current season’s pay and that’s it. We’ll find that player a policy that, in the event of a career-ending injury, will pay out $600,000, covering Years 2 and 3 of the contract as well.’
The sums involved can get very large indeed, Anstis says. When soccer stars play in international matches, for example, ‘Their club needs to be covered against the player’s suffering a career- ending injury while playing for his country overseas. These policies can be worth tens of millions of dollars, even more than $100 million.’
The work was lucrative, and Anstis’s business grew through the 1990s. He was well on his way to his first million. Then he got divorced. ‘It’s like
snakes and ladders,’ he says. ‘That knocked me back a very long way.’
But he kept on working, and the business kept growing. Eventually, in 2004, Anstis bought GPA Matrix, a financial planning business that he and his partner built into one of Australia’s most successful. ‘We have tripled the number of clients, doubled the funds under management and tripled the company’s value,’ he says. ‘We now have 3000 clients who pay, I guess, an average of about $2000 a year in fees. I suppose it was around 2004 that I made my first million, but it’s not something that sounds an alarm when you pass the landmark. It just creeps up on you.’
So did the stress. About three years ago, someone remarked to Anstis, ‘I don’t know why you’re so stressed, given the amount of money you earn.’ Anstis instantly knew the man was right. ‘I’d never really stopped to think about it,’
he says.
‘In that way, I’m guilty of exactly the same thing as my clients—possibly working too hard and not examining all my options properly. But I love what I do, and the moment I stop enjoying it I’ll stop doing it.’
In 2009 Anstis decided to go it alone. He set up Mandala Financial Group, taking all his clients—
and his tried- and- true business model—with
30 HOW I MADE MY FIRST MILLION
him. He charges an annual fee of 0.5 per cent of the funds he manages, and usually nothing up front.
Because what he earns is a percentage of his clients’ wealth, he says, the financial crisis hit him hard. The turbulence in the markets has also meant a lot of clients want constant reassurance and hand- holding. Many also need advice about how to cope with redundancy or shorter working weeks, stuttering cash flows, and the sense that their wealth is vulnerable.
Worried p eople can be hard to persuade, Anstis says: ‘Very often their emotions go one way and the right decision actually lies in the opposite direction. Some p eople suddenly want to sell into cash, for example, when you know the right move is to ride it out or even invest more.’
Before he set up Mandala Anstis was busy managing the downturn at Matrix, where he spent a lot of time analysing the business on a
‘zero- cost accounting basis’. He explains: ‘I’d question whether we really needed various products and services at all. I cut back on marketing and PR.’ He also thought twice about buying new equipment. ‘I began to ask whether the photocopier would last another twelve months.
It’s a matter of taking a close look at expenses in every area of operations.’
Anstis is still wealthy—and still enjoying his wealth. He may not drive flash cars or own a boat, but he does have a stud farm for dressage horses on his 20- hectare Hunter Valley estate. ‘It’s a real passion,’ he says. ‘Although it’s a money- making business, I regard it as a hobby first and foremost.
The horses are worth about $30,000 each, and it’s a highly specialised market. My wife is a wonderful dressage rider—I’m not much good at all.’
Anstis also has five children in private education, ‘a considerable expense’, although he says he’s ‘happy when they’re happy’. Overall, he says,
‘I regard myself as very lucky, and try not to be seduced by money or the trappings of success. I love my family and my home and the freedom I have to travel—something many of my clients hanker after.’
He urges them to follow their heart, not just the money. ‘I was recently talking to a client whose lifetime ambition was to buy a motorbike and ride around Italy. I demonstrated to her that not only could she afford to do it now, she could come back in a year or two and be earning more than she was today. She couldn’t believe it, but it shows the value of educating yourself or finding somebody who can. Otherwise, you don’t know what you might be missing.’
Nick GardNer
32 HOW I MADE MY FIRST MILLION
GolDen ruleS
1. When fear is the problem, activity is the answer.
2. believe in yourself: you have the ability to change your own future.
3. Play to your strengths: acknowledge your weaknesses and delegate them to someone who is good at them.
4. Stick to your core business and really ensure you are delivering what you promise.
5. Customers are not dependent on us. We are dependent on them.
6. Plan ahead for your outgoings so you are not hit by surprise bills that can cripple you.
The Power Of
Flowers
Jonathan Barouch
Fastflowers.com;
established 1999;
thirty- five employees;
$5 million- plus turnover
eginato
For Jonathan Barouch,
chief executive of Aus-
tralia’s leading online
Photo: Anthony R
florist, life really is a bed of roses.
Unlike other young businessmen, he has never had trouble getting financial backing for his company. On the contrary, he’s in the envi-able position of constantly turning down huge stacks of cash. ‘I’m getting offers all the time from
34 HOW I MADE MY FIRST MILLION
private equity companies and other big florists for Fastflowers.com,’ he says. ‘They’ve offered me millions of dollars to take me over or for a stake in the company, but I haven’t had any offer I couldn’t refuse—not yet, anyway.’
Barouch has, in fact, spent much of his young life turning down vast sums of money. He had barely set up the company, as an eighteen- year-old, before the Internet boom had companies queuing at his bedroom door. They offered him
‘many, many millions of dollars’, he says. ‘Silly money—more than the company would ever be worth! But I didn’t know what to do with it. And I didn’t want
They’ve offered me the responsibility of millions of dollars to take having big stake-
‘me over or for a stake in
the company, but I haven’t ‘ holders and other p eople on the board,
had any offer I couldn’t so I turned them all refuse—not yet, anyway.
down and carried on
running the business on a shoestring, from my parents’ house.’
It was an extraordinary decision for an eighteen- year- old—especially one who suffers from hayfever and can’t stand to be near flowers:
‘I’ve got a sackful of Claratyne in my drawers!’
But Barouch figured he had nothing to lose.
‘I didn’t take on any debt to start the business, so
the worst that could happen was that it would fail and I’d have to do something else. Big deal.
Most businessmen have families and mortgages to worry about. I was very lucky.’
This determined entrepreneurial streak is a quality that runs deep in the Barouch family.
Jonathan’s grandfather was one of the first big furniture manufacturers in Australia, selling his products to the likes of Harvey Norman, David Jones and Grace Brothers. His father was also a businessman, a pharmacist who ran several stores.
They and his mother, a freelance journalist, all gave him a strong sense of the importance of financial independence.
The idea for Fastflowers came out of an embarrassing experience in a florist’s shop. ‘I wanted to buy some flowers for a girlfriend and found it excruciating. I didn’t know what to buy or how much money was appropriate to spend. I felt so ridiculous. I thought there must be a better way.’
Searching on the relatively new Internet, he found little competition. ‘I found websites in Europe and the US, but nobody in Australia. So I started asking various florists to do our deliver-ies—since they already had the stock—in return for a small commission for passing on the business to them. The first few turned me down
36 HOW I MADE MY FIRST MILLION
flat—they just didn’t get it. But after five or six refusals somebody agreed.’
With savings he had amassed from selling lollipops in the school playground when he was fourteen—‘I made a small fortune from that until the headmaster intervened’—and money squirrelled away from odd jobs and birthday presents, he commissioned a company to build a website and business started briskly. There was just a small catch—Barouch was still at school. ‘I would dash out of class pretending to go to the toilet, but actually I’d be taking orders from customers or arranging business meetings.’
The teenager soon got a very grown- up break. A newspaper item about him was spotted by the business journalist Paul Clitheroe, former Sunday Telegraph columnist and at the time a presenter on TV’s The Money Show. ‘I was at a school swimming carnival when he rang. He was quite famous and at first I didn’t believe it was him.
I was saying, “Sure, sure,” like it was a joke, but eventually he convinced me and I felt like a bit of a goose.’
A crew from the show filmed Barouch working, going to school and doing business on his mobile phone, then taking more orders at home.
It might have been a novelty segment, but it did the trick for Fastflowers. Within half an hour of
the program finishing, the six- month- old website had clocked up 300,000 hits.
Suddenly, Australia’s biggest companies wanted a piece of the young flower magnate. Westpac Bank made Barouch the preferred florist on its credit- card rewards program, giving Fastflowers access to over two million card holders. Then Telstra BigPond also took Fastflowers on as its partner florist. ‘That gave us exposure to another two million Internet users. Overnight we became a household brand.’
It was during that time that Barouch realised he had made his first million. Just as important, he knew ‘the company was going to be an enduring business. It was a wonderful feeling.’
Today, Fastflowers has a multimillion- dollar turnover and is the only Internet- based florist to own its own stores in Sydney, Melbourne and Brisbane, along with a twenty- four- hour call centre and a warehouse. Remarkably, most of this growth was achieved while Barouch was still studying.
After completing a Bachelor of Commerce degree, he took Honours in Economics and did a Masters degree in Political Science. ‘I would study at night and at weekends while all my mates were going to the pub and playing pool, and then I would go back to work and stay at
38 HOW I MADE MY FIRST MILLION
the office till midnight. I did that for about six or seven years. I only finished studying about eighteen months ago.’
Little surprise, then, that Barouch didn’t exactly go wild when he hit the million- dollar mark:
‘I just concentrated on taking the business forward—planned another marketing campaign. The money is nice. It’s given me financial freedom and I’ve been able to buy an apartment, which is ridiculously expensive in Sydney, and drive a BMW. But it’s the other things that give me pleasure. Driving past one of my shops or hearing one of my ads on the radio, that’s what makes me feel really good. Like I’ve built something that will last.’
Barouch now mixes in exclusive circles and provides the flowers for some of Australia’s most high- profile events. Dealing with prominent companies such as Ford and individuals such as Al Gore means discretion is a must, so he enforces a strict privacy policy among his staff. ‘We have had very famous p eople call up and order flowers for their mistresses. But flower companies around the world have been sued for leaking that kind of information.’
Barouch recently got married, and his success enabled him to give his fiancée, Amy, the perfect wedding. He hired Sydney Town Hall and had it decorated with more than 10,000 roses and
10,000 tulips. It took fifteen florists three days to assemble the displays. But there were no tears on the day: he was dosed up on Claratyne the whole time.
Nick GardNer
GolDen ruleS
1. Don’t spend more than you have. Keep your budget tight.
2. Don’t believe the naysayers. If you have an idea, have enough confidence to see it through—and believe in yourself.
3. Network like crazy. You never know when you’re going to make that connection that can make your business explode.
4. Don’t be afraid to employ p eople who are at least as smart as you.
5. Invest in the business—don’t blow money on a Porsche if you might need that money to keep the business going.
An Ideal Business
Model
Shelley Barrett
ModelCo;
established 2002;
forty- three employees
(including retail employees
at David Jones);
$15 million- plus turnover
Photo: Sarah Rhodes
It’s hard work creating a
brand cult that counts celebrities like Victoria Beckham, Keira Knightley, Mischa Barton and Cameron Diaz as devotees. It’s even harder to attract such p eople’s attention for free. But that is what Shelley Barrett’s beauty company M odelCo has managed to pull off in just seven years.
The company’s 125 products are sold in 1000
department stores worldwide—and the financial crisis hasn’t held up its growth in the slightest. The stores include très chic boutique Colette in Paris, beauty mecca Space NK in London, and lingerie chain Victoria’s Secret in the US. In Australia, where it all began, ModelCo has an exclusive concept- store agreement with David Jones.
In 2008 Barrett, aged thirty-six, had the ultimate endorsement when Victoria Beckham was snapped in LA checking her face with a M odelCo eyebrow compact that perfectly matched her pink outfit. Barrett was naturally delighted when her marketing director showed her the picture, which adorned a newspaper’s front page, not least because she and the former Spice Girl share a love of pink and handbags. ‘I didn’t have any idea she used our products until the picture came out,’ she recalls. ‘We were so flattered. The power of celebrity is huge.’
The only celebrity with whom Barrett has made a formal alliance is Elle Macpherson, who in 2006 became the face of her product Erase Those Fine Lines. The supermodel launched the product at a glamorous event in Sydney, where few fine lines etched the faces of the assembled beauty editors. Elle said she liked the treatment because it offered women a ‘non- invasive choice’
42 HOW I MADE MY FIRST MILLION
and that she ‘finds the company and Shelley Barrett very interesting’.
Barrett began her business career at twenty-one by launching her own modelling agency. A decade later, it had 1200 models and actors on its books. ‘My mother did my accounts and she still has our first cheque for $120,’ Barrett says proudly.
Working with models and hair and make- up artists at fashion shows and shoots, she watched sympathetically when the girls winced as they curled their lashes and moaned that they wished there was some other way to create luscious eyelashes. By 2002, Barrett had found one: a heated lash curler that created the desired effect gently, like a hair curling wand. The trick was to find someone to manufacture it.
Fortuitously, her husband Damien was starting an import business at the time. He helped Barrett find a company in Korea that could make the wand and ship it back to Australia. They named it the ModelCo Lash Wand Heated Eyelash Curler and packaged it in pink simply because that was Barrett’s favourite hue. ‘It became the fastest-selling product in Myer,’ she says. Shocked and thrilled by the demand, the couple continued producing the bestseller. ModelCo overtook the model business, and within two years making millions was Barrett’s sole focus.
If she needed any reassurance that she’d succeeded, Japan was it. When the company launched there, sales reached $1 million in two months.
‘When I started I had no global aspirations,’ she admits. ‘It was more of a pet project. We grew so quickly, it was sell, sell, sell, and all this money was coming through the door. But then it became about knowing how to spend it wisely. We didn’t make huge mistakes, but we could have done things a little better, smarter and quicker if we’d had better systems in place.’
Barrett created a point of difference in a crowded market by creating a slew of innovative dual- purpose and ‘quick fix’ products—al in her signature hot pink
packaging. The first
When I started I had no
self- administered spray ‘global aspirations. It was tan (tan in a can) was
‘more of a pet project. We
fol owed by Liplights, grew so quickly, it was sell, sell, sell, and all this money
a range of lip glosses was coming through the that had a mirror and door.
a light for a touch- up
in nightclub darkness or the back of a taxi.
And the pace hasn’t slowed. Barrett has also launched Fibrelash, a revolutionary eyelash product. ‘You literally paint on false lashes and it costs just $48,’ she says. ‘I think make- up is recession-proof. Women will never give up lipstick, lip
44 HOW I MADE MY FIRST MILLION
gloss, foundation and mascara. And when the news is depressing, women want something to make them feel better. It’s all about feeling good.
So we’ve expanded during the economic downturn and increased our spend on marketing and PR. And it’s worked.’
The crisis has made Barrett more creative in her approach to marketing. ‘We need to ensure there are value- driven offers—great promotions for gifts with purchase, for example—that draw in more customers.
‘We have a promotion running at the moment where customers at David Jones who spend $48 on our products wil get a ful - size mascara, valued at $28, for free. That is always going to be appealing.’
Barrett says she has looked closely at her costs and cuts back wherever possible to build a buffer against any unforeseen downturn in demand. ‘I have looked at freight, travel and administrative costs, but we haven’t made any changes to our employee head count or our marketing. It’s all about negotiating for smaller quantities and better deals across all of those areas. But given that we’re expanding, I’m spending most of my time managing the growth.’
A nice problem to have.
As the mother of two girls aged two and three, Barrett knows the power of the quick fix. Her
company has managed to both meet demand and respond to trends faster than other beauty brands thanks to smaller size and greater agility and a determined focus on innovation. ‘The business grew organically from the Lash Wands, and a lot of money goes back into research and development,’ she says. ‘Competing against the rest of the world is part of the challenge that I relish. It pays to be ambitious and actively seize opportunities.
I don’t feel threatened by foreign competition, and I’m proud that ModelCo is taken seriously in the international area.’
Barrett won the American Express Award for Australia’s fastest- growing small business in 2004, and was named Telstra’s New South Wales Businesswoman of the Year. ModelCo’s foundation was named ‘Foundation of the Year’ over products by Dior and MAC, ‘which was a huge coup for us. I set myself huge goals and find the best team to achieve them.’ That still includes her husband and her mum.
ModelCo recently opened a small office in New York; the company is projecting a $12–
$15 million turnover and Barrett is planning to make further inroads into the US market with a presence on the Home Shopping Network, where sales can reach $500,000 in one hour.
Her airbrush tan range is already available at
46 HOW I MADE MY FIRST MILLION
Victoria’s Secret’s in- store beauty bars—where it landed with minimal effort on her part: ‘Victoria’s Secret contacted us after hearing about our products from a buyer who saw them mentioned in magazines. We’d been tagged as the brand to watch and had won a Newcomer of the Year award. We’re fortunate in that we’ve never had to knock on doors.’
Barrett travels every six weeks to London, Paris and New York, where she occasionally gets an opportunity to buy for herself instead of the company. ‘I love bags and shoes,’ she says. ‘And I love little holidays away. We took the girls to Hayman Island for a five- day break, which is enough for me to rejuvenate. I also have massages in day spas at hotels. As the head of a beauty company I do have an image to portray, so I have to look groomed.’
kerrie davieS
GolDen ruleS
1. Know your industry.
2. Find great staff and utilise their best skills.
3. Have a business plan incorporating retail plans, distribution and new products.
4. Start small and build.
5. Always find a way—because there always is a way.
Chasing Big Bickies
Andrew Benefield
Mrs Fields;
established 1988;
265 employees;
$9.8 million turnover
Oblivious to the des-
tiny that lay before him,
Andrew Benefield was
Photo: Dean Marzolla
passionately selling the Mrs Fields cookie brand to the public long before he owned it.
As a budding marketing director of a busy Sydney hotel in 1988, he quickly appreciated the power of a tasty treat to woo a client. On his routine visits to travel agents, the newly arrived
48 HOW I MADE MY FIRST MILLION
Kiwi frequently brought a batch of Mrs Fields’
muffins from a tiny store in Wynyard Station as a ploy to win them over. Twenty years later he is still flogging the brand—only in a more official capacity: Benefield purchased the master franchise of Mrs Fields in October 2006.
Unlike his previous retail experience—ranging from the management of 700 Caltex retail operations to owning several franchises—this challenge, he knew, would make or break him.
Mrs Fields’ cookies were a household name in the US, but the brand’s anonymity in Australia was sobering. The company was founded in California in 1977 after a friend encouraged keen cookie chef Debbie Fields to share her gift with the world. She received no such support from her husband, who reportedly told her:
‘You’re crazy—it will never work.’ But after a rough- and- tumble ride through the retail world, Mrs Fields finally sold the business to a US private equity firm in the early 1990s for a cool $330 million. She divorced the husband who failed to believe in her.
It’s a story that Benefield is keen to replicate—
with one significant difference: not only does the entrepreneur have the full backing of his spouse, also named Debbie, but he is partly riding on her own retail success. ‘When we got married,
my wife said buying a wedding gown was a stupid way to invest $1500. So she started selling them out of our living room,’ Benefield
I guess I’ve always
told Sydney’s Sunday ‘understood that you can’t Telegraph. ‘From that really mak
‘
e serious money
we built two bridal unless you go out on your own. At the end of the
stores with a turn- day, money is just an idea over of $500,000. backed by confidence.
She did most of it
while I did all the back- room work. We had also accumulated houses and assets, and I had saved a lot from previous salaries. I guess the reality [of being a millionaire] really hit home when we had to cash it all up to buy Mrs Fields.’
But it had to be done, Benefield says: ‘I guess I’ve always understood that you can’t really make serious money unless you go out on your own. At the end of the day, money is just an idea backed by confidence.’ Confidence and self- assurance are qualities he has always had in spades, and he has never been averse to taking a risk.
Benefield moved to Sydney from New Zealand in 1988 on a whim, hoping simply to get work. For a while, the prospects looked decidedly poor. ‘I almost got down to my last twenty cents and was very nearly on the phone to Mum and Dad saying “Bring me home”,
50 HOW I MADE MY FIRST MILLION
before I got a job in a hotel chain,’ he says. It was a start—one that opened up a world of possibilities and opportunities for the twenty-two- year- old. Benefield moved up and on to other hotel companies, spent five years at KFC, and headed the retail arm of Caltex’s service-station chain. But it wasn’t enough. ‘Eventually I really wanted to do something for myself that would use my skills. Plus I had done pretty well financially up to this stage, so I started looking for a business that would suit,’ he says. ‘I really had three boxes to tick. One, it had to be a good brand—and Mrs Fields always has been; I just felt it was undermarketed and underpro-moted. Two, it had to have an abundant supply of products. And three, it had to have a positive cash flow.’ He paid $2.2 million for the brand and began gearing up to expand nationwide, drawing on his expertise in franchising and letting the possibilities inspire him.
Despite his self- assurance, Benefield knows the road ahead will be arduous as he takes a virtually unknown brand and attempts to etch it into the Australian psyche. So far he has seventeen stores, including three in Sydney, and he wants to make that fifty by the end of 2011. With a tight marketing budget, he will need to be a smart chess player: ‘We will have to be tactical and do a lot
of sampling and consumer awareness testing,’ he says.
The economic downturn has not hit his business too badly. ‘We offer a treat, and at $5 p eople can afford to reward themselves with a coffee and a cookie, even when times are tough,’ he says. ‘We’re not a discretionary purchase in the same sense as a BMW.’
In fact, all things considered the recession has been kind to Mrs Fields: ‘Our business grew in 2008/09 by 11 per cent in terms of turnover,’
Benefield says. ‘We get our ingredients from the US, so we are hit by currency movements, but one of the things we are looking at now is producing ingredients here. They have now agreed we can source our stock in Australia, which will be a great help.’
Benefield is opening another seven franchises in 2009, helped by the growing number of workers keen to control their own destiny. ‘There’s no such thing as long- term job security any more, so p eople want to start their own businesses. We had three times as many applicants in 2008 as we had in 2007.’
Benefield says he is exploring new partnerships, including the possibility of inviting different brands into the Mrs Fields premises to help share costs and increase consumer choice: ‘It’s about
52 HOW I MADE MY FIRST MILLION
maximising returns from the real estate. We can’t be complacent, even though we’re doing well.’
Benefield isn’t quite your run- of- the- mill self- made millionaire. He loves fast cars, but perhaps not to the degree that one would expect.
This entrepreneur would rather have an empty garage and focus his luxury expenditure on motor sport. ‘What I do for fun is navigate rally cars. I’ve had the pleasure of navigating for some pretty impressive p eople—including a past Australian Formula 2 champion and a host of state champions.
‘Navigating is very similar to being a franchiser,’ Benefield says. ‘It requires communicating effectively, telling the driver where to go and how to get there. Then they turn around and blame you when something goes wrong!’ As well as indulging Benefield’s appetite for risk, his rally- car hobby embodies several of his business principles: ‘Enjoy yourself along the way,’ he says.
‘Believe in yourself.’
Those are messages he loves to preach, especially to his children, who seem to have inherited both their father’s zest for life and his interest in what he terms the ancient art of financial success. ‘Save,’ Benefield instructs. ‘I don’t consider myself to be a great saver, but I managed to squirrel enough away to enable me to
do this. These days, whenever my kids get pocket money, half of it goes into their savings. It is a habit that a lot of us have lost.’
aNdrew carSwell
GolDen ruleS
1. Save, save, save.
2. Enjoy the ride. Enjoy yourself along the way, and don’t be too conservative.
3. believe in yourself and your research. Don’t listen to other p eople trying to give you shortcuts and get- rich schemes. Stick with what you know.
4. Champion those around you. I find that if I make the franchisees happy, that filters down through their businesses.
5. Have confidence. At the end of the day, money is just an idea backed by confidence.
The Unbreakable
Bond
Peter Bond
linc energy;
established 1996
and listed 2006; 110
employees; market
capitalisation: $1.68 billion
yndon Mechielsen
Peter Bond made his first
Photo: L
million dollars selling
muck. It was dirty, discarded muck, unwanted because at the time nobody thought you could sell it. But Bond had other ideas.
In 1985, the truck driver’s son from Camden, in western Sydney, returned from a couple of weeks’ holiday to find that his partner had shut
down their freight business and sold all the gear.
Fifteen thousand dollars in debt and with no job, Bond needed an idea fast. He knew his ex-partner had the contract to remove coal spilled during unloading operations at the Balmain coal loader. He also knew where the coal was dumped. And he had exactly what was needed to turn this dumped filth into a buck: a sharp mind, the capacity for hard yakka, and a rake.
Bond, better known today as the founder and majority owner of $1.65 billion alternative-energy prospect Linc Energy, had found his opportunity. ‘In those days they used to clean up coal from the coal loaders and take it away,’
Bond recalls. ‘They considered it contaminated and wouldn’t load it back onto the ship. My former partner was taking it from the Balmain coal loader and dumping it at a quarry at Kemps Creek.’ So Bond asked the quarry manager if he could take the coal. Unsurprisingly, the manager said yes.
Suddenly the broke kid had a product. Now he just needed a market. ‘I knew hospitals used coal, and I knew brick plants used it,’ he says, so he got on the phone. ‘I’m talking to this guy trying to convince him to buy it, and he obviously knew I didn’t know what I was talking about. He basically told me to f*** off and learn the business
56 HOW I MADE MY FIRST MILLION
before I rang him back.’ Bond had a head start, having worked for a couple of years as a trainee metallurgist at BHP’s Port Kembla steelworks.
He raked up the muck himself and found he had 1000 tonnes. ‘I figured about 17 bucks a tonne would see me clear.’ Finally, he found a buyer.
‘When I got the cheque, I thought, This is the business I want to be in.’
Today that business is like no other.
Bond wants to use the gas locked in the vast underground coal seams in Queensland to make super- clean diesel and aviation fuels. Linc Energy is worth more than $1 billion and his personal stake, a fraction over 50 per cent, makes him one of the most successful of the new energy and resources entrepreneurs. When this book went to press, Bond’s demonstration plant at Chin-chilla was on the verge of being activated and, if he can get diesel flowing cheaply, efficiently and consistently, then Bond might just become Australia’s richest man.
Turning underground coal gas into liquid fuels is a long way from raking up spilled coal.
But every good story requires that the hero overcome adversity before he earns his reward.
The week Bond was paid for that 1000 tonnes he raked together, the Maritime Services Board put up the Balmain coal- loading contract for
tender. Bond bid for it and won, beating all rivals—including the erstwhile colleague who’d left him unemployed. It was a start, but it wasn’t long before the young man got his next lesson in business.
Some of his clients couldn’t help noticing that their coal- hauler looked as if he lived in his truck. ‘They said, “We love your cheap coal, but can you go and get your own house?” ’ he recalls. ‘I was borrowing their front- end loader and borrowing a cup of milk . . . it was second-hand, shoestring stuff. They said, “Can you go and get your own coal yard and actually have a business?” ’ Once again, Bond’s talent for seeing value in the discarded came to the fore.
That first yard was an abandoned site next to the coal rail depot at Glenleigh, near Camden.
The site belonged to the now defunct Clutha coal company. So Bond spoke to someone at Clutha and got the go- ahead to move in. ‘Unbe-known to me, it wasn’t actually their land or their coal, but they’d been asked to get rid of the coal because it was a fire hazard,’ he says. So Bond made the coal dump his own. ‘That’s where I used to park the truck and screen the coal, and that’s where I made my empire.’ Like the quarry at Kemps Creek, this corner of wasteland was covered with a deep layer of the kind of dross
58 HOW I MADE MY FIRST MILLION
Peter Bond could turn into a quid. ‘They had actually dumped quite a few thousand tonnes of coal there, and it was quite good quality,’ Bond says. ‘I started with a rake in 1985, and by 1989 I was a millionaire.’
But there was no posturing. In fact, Bond let the milestone pass in silence: ‘I paid the house off and the car, and there was money in the bank, but I didn’t even tell my wife.’
Bond decided washing coal was the next step in expanding his business and that the way to do it was with a mobile coal washery, which he says was the first of its kind in Australia. Maybe that’s why it almost sent
him broke again. ‘I’d
I started with a rake in
1985, and by 1989 I was a basically bet the mil-
‘
‘
millionaire.
lion bucks I’d made
on it and we were
just breaking even,’ Bond says. The problem with breaking even was that he had debt—and it was the early 1990s. The credit crisis arrived, complete with double- digit interest rates. It was a period and an experience that permanently coloured Bond’s view of Australian banks. ‘Out of that, I have no loyalty to any bank,’ he says. ‘The only exception, and it’s going to sound strange, was General Electric. I was in debt to GE Money
[the company’s banking arm], and they were the
only ones who stood by me. Each time they refi-nanced me they did it without kicking me with another $50,000 or whatever. So the biggest and supposedly most brutal bank in the world was in fact the best.’
With the help of the Americans Bond clung on, trying to wring a profit from his coal washeries. Then came the really big break: a telegram from an old mate at BHP. ‘He’d seen an article about my mobile plants,’ Bond says. ‘They signed me up to a contract to wash the coal at Appin colliery, behind Wollongong.’ A year later, Bond and his new business partner were making a c ouple of million dollars a year in profit.
They bought a couple of coal mines, including one for about $3 million that they later sold for many times that sum. But by 2002, Bond had had enough. He sold everything and went and sat on a beach in Fiji. He was seeking enlight-enment. For a time he wore a Buddhist monk’s saffron robe, but he drew the line at shaving his head. He listened to self- actualisation gurus like Anthony Robbins. He listened to Donald Trump, too. Back at home, he got the odd phone call. P eople wanted him to turn assets around.
Eventually, someone brought him the Linc story. He discussed it with his wife and she told him to go for it.
60 HOW I MADE MY FIRST MILLION
If all goes well, you can forget about this story.
There’ll be a better one about Peter Bond—the one about how he made his first billion.
peter GoSNell
GolDen ruleS
1. Know your outcome and what success looks like before you start.
2. Know the basic steps to achieve that success and look at each step as a mini business plan.
3. Surround yourself with extraordinary p eople.
4. back yourself and have total belief that you can achieve success.
5. be passionate about what you do.
6. Know your exit strategy before you start.
7. be generous. Leave money on the table and give back to the community.
A Winning Flight
Of Fancy
Hans Hulsbosch
Hulsbosch;
established 1986;
twenty employees;
$10 million turnover
Half a century ago, in
a quaint village in the
dormant south of the
Photo: Frank Violi
Netherlands, a young Hans Hulsbosch was sketching his first picture. Despite living a world away from Australia and having never set foot outside his low- lying country, the boy drew a little kangaroo.
62 HOW I MADE MY FIRST MILLION
Fast forward to the present, and Hans is still drawing kangaroos. But bigger—much, much bigger. On the tails of Qantas jets.
When Hulsbosch was asked to redesign the famous flying kangaroo logo for Qantas, he couldn’t help but reminisce about his debut drawing. The revamped Qantas logo and the recently relaunched Woolworths logo are the latest in a long line of successful ideas from the creative minds at Hulsbosch, the design company Hans launched in 1986.
Redesigning Qantas’s kangaroo, one of the world’s best- known logos, was not the first time he had dealt with the airline. In fact, it was Qantas that helped launch Hans into the cut- throat Sydney ad industry.
Hell- bent on living in Australia since child-hood, he’d initially migrated with his wife to New Zealand.
Despite being a designer of some note—he’d created the packaging for Willem II, then the world’s largest cigar manufacturer—Hulsbosch was repeatedly turned away from the Australian embassy in the Netherlands.
‘When I said I was a designer, I think they laughed. When they needed carpenters and plumbers, I guess designers were last on the list,’
he recalls. The newlyweds had to become New
Zealanders before they finally got approval to live in Australia, but Hulsbosch says it was ‘worth the sacrifice’. By then they had two children. Arriving in Sydney, they wasted no time setting up their new life. Within two days, the Hulsboschs had an apartment in Mosman filled with new furniture from David Jones, and Hans had a prize job at the prestigious ad firm Clemenger.
‘As soon as I arrived, I just started knocking on doors,’ he says.
At Clemenger, ‘I had the best time. Those four- and- a- half years there were just phenom-enal. Probably one of my favourite ads was for Tia Maria. That campaign was one of the first in the world for a product apart from tourism that became a global one. I was travelling a fair bit, and you’d be going through Rome or New York and there would be your ad on a billboard. It was a great feeling.’
But despite the praise, the salary and the lifestyle, something was missing—design. Hulsbosch was mad about design, but the giant ad firm didn’t see it as overwhelmingly important. So he did something he was already quite accustomed to: he took a risk.
‘I went to the management and said, “We are doing something wrong. What we are missing is a design arm in the agency.” They were already
64 HOW I MADE MY FIRST MILLION
doing design in Europe on a small scale, but all I heard back was, “Mate, there’s no money in it.
Go and do some ads.”
‘So I thought, here is an opportunity, I’m going to do it. And I made the decision to move out and start my own business.’
A tiny office in North Sydney was to become Hulsbosch’s first home. The four- metre- square box contained a desk and chair, a fax machine, a photocopier and a
I couldn’t have had a phone. But within a more fantastic start. Once year Hulsbosch had
‘Qantas and P&O walked in
the door, I’d made my first ‘ five or six staff, a new office and, more
million within about a year importantly, two of and a half.
the biggest clients he
could have hoped for: Qantas and giant cruise operator P&O.
‘I couldn’t have had a more fantastic start,’ he says. ‘Once Qantas and P&O walked in the door, I’d made my first million within about a year and a half.’
Today, his latest Qantas and Woolworths logos hang proudly in Hulsbosch’s plush Mosman office, alongside designs for clients such as Taronga Zoo, Nylex, Foxtel and Oatley Wines.
Hulsbosch says keeping designs and thinking fresh is the key to surviving when the economy
takes a dive. Businesses, he adds, must stay relevant so they are poised to lead the way when the recovery starts. When that happens, ‘It is going to be tough, because there will be fewer companies and they’ll all be fighting for business. So you need to make sure you are sending out the right signals.’ To keep work coming in, Hulsbosch has been cutting its rates. ‘We have had to become a lot more flexible—some of our clients are not doing so well, so it is about helping them get out of the current situation.’
Rebranding, he notes, is not just about logos. It is about the company’s whole image.
Hulsbosch cites McDonald’s as an example.
‘They are keeping the store designs fresh, and now you can buy a meal for a dollar. They really get what is happening in the economy and are responding to it.’
Hulsbosch says Woolworths’ ‘fresh, inviting’
green logo is already paying dividends, and store design has also helped. ‘You always want to invite p eople in through the fresh produce section and make sure it is presented in an attractive way. It sets the tone for the experience and gives the whole shop a “fresh” feel,’ he says.
These days at Hulsbosch, cash flow is king. Hans is keeping a closer eye than ever on incomings and outgoings, but he is still expanding and still
66 HOW I MADE MY FIRST MILLION
hiring: ‘The economic downturn is a great time to look for new staff, because when the economy is booming, you just can’t find anybody.’
He says his clients are wonderfully loyal. Take, for example, his most recent encounter with Qantas.
‘I was called over to [chief executive] Geoff Dixon’s office. He stands there and says, “As of today, you’ve got the business. Have a look at the identity, see if it still applies. If you think it needs to change, go and sort it out. But don’t come back with the wrong thing.” ’
Judging by his record, Hulsbosch couldn’t do the wrong thing if he tried.
aNdrew carSwell
GolDen ruleS
1. Nothing happens without a brilliant, committed team.
2. The goalposts change every day, and you must be able to change rapidly.
3. Never underestimate the value of loyalty.
4. Never let the competition know what you are doing.
5. Always be thinking about how you can make your brand better than the competition.
The Day That
Changed A Life
Margot Cairnes
Zaffyre International;
established 1986;
thirty employees;
$10 million- plus turnover
eginato
Sitting outside a kiosk on
one of Sydney’s northern
beaches, Margot Cairnes
Photo: Anthony R
had no inkling that her life was about to change forever. It was 1985, and she was up to her neck in debt, unemployed, bringing up two children alone and nursing her dying father.
Desperately in need of a break, she’d decided to have a ‘rich day’ with her kids. ‘We were really,
68 HOW I MADE MY FIRST MILLION
really, really poor,’ says Cairnes. ‘But we test- drove a Jaguar, then went to Double Bay and tried on beautiful clothes we couldn’t afford. Then we went to the kiosk at Manly’s Shelly Beach and I had a glass of champagne and the kids had a glass of pink lemonade. I said to the kids, “One day we’ll be rich.”
‘My ten- year- old daughter looked at me and said, “Mummy, we already are rich. We have each other.” I was speechless. I felt about two inches tall.’ At that moment, Cairnes resolved to work hard when she could and be happy with what she had. Not long after, her father passed away. It was time to find a job.
Years before—while still in her early twenties—the trained teacher had moved from Sydney to Darwin and landed the top position in a child- care company. Taking charge of five child- care centres and three family day- care schemes with more than 1000 children, Cairnes jumped into the deep end and survived.
‘I had also trained as a psychotherapist,’ Cairnes says. Now a mother and deep in debt, ‘I had to decide what to do with all my qualifications. But I couldn’t decide—so I made it up. I started my own company and just went out to do something that hadn’t been done before.’
Cairnes created her own brief: a consultancy
THE DAY THAT CHANgED A LIFE 69
that would improve managers’ self- belief and relationships with their staff and in doing so help companies reach goals they’d previously seen as impossible. She says it was ‘pure luck’ that two men from Victoria’s Portland aluminium smelter heard her giving a speech. ‘They liked what I said, introduced me to their boss, and that led me to where I am today,’ she says.
Cairnes took seventeen managers from the smelter on a camping trip through central Australia, on small boats down the then- flooded Cooper’s Creek. ‘We were gone for ten days, and I called it a leadership training course,’ she laughs, admitting that she made it up as the group went along. ‘The first night out we camped on mud flats without tents. Me and seventeen men, most of whom snored,’ she says. ‘In the end, it changed their lives—and the way they ran the smelter.’
Cairnes said it felt as if she’d ‘found the cure to organisation cancer’. After that, things happened fast. ‘I started to get headhunted.’ She worked for the Reserve Bank of Australia and for BP, both in Australia and in Europe, helping with a merger with Mobil.
Cairnes’ debts had been more than paid off by this stage, and her first million was racked up before she headed overseas. She allowed herself a moment to reflect back on that day at the beach.
70 HOW I MADE MY FIRST MILLION
‘I was sitting at my home in Clontarf on the balcony, looking at the water, holding a first- class ticket to go to London to stay in the Ritz Hotel.
I thought, “This is it, I’ve done it.” ’
Cairnes also bought herself a BMW and—as she still does today—indulged in natural therapies as a reward for all her hard work. ‘I love massages and going to spas, and I’ll often go to health retreats just to spoil myself,’ she says.
At first she resisted
I was sitting at my home hiring staff and set-in Clontarf on the balcony, ting up an office,
‘ looking at the water, but the business was holding a first- class ticket
to go to London to stay in ‘ expanding so fast she couldn’t avoid it. She
the Ritz Hotel. I thought,
“This is it, I’ve done it.”
finally set up Zaf-
fyre International in
the late 1990s. Fletcher Challenge Energy chief executive Greig Gailey had worked with Cairnes on the BP–Mobil merger. Now in New Zealand, he asked her to come and work with him.
‘He said: “I need to turn around a whole company, so I need you to have a company”,’ recalls Cairnes. ‘That was when I started to recruit other consultants.
‘I just didn’t have it in my blood to build the company before that point. [Growth] wasn’t my driving force. I just loved doing what I did and it
THE DAY THAT CHANgED A LIFE 71
made me a lot of money. I get my thrills working as a consultant. As soon as you have a whole lot of other p eople working for you, then you are really doing something else.’
She soon found herself jet- setting on an almost permanent basis. ‘One year I was out of the country for thirty weeks. I was working with Levi Strauss in the US, BP in London, and Fletcher Challenge in New Zealand.’
An unspoken partnership started up and, each time Gailey moved on to restructure a new company, he took Cairnes with him. Other major corporate clients include Zinifex, Origin Energy, Western Power, Alcoa and Telstra. With twenty-five staff and an office in North Sydney, Zaffyre continues to do consulting work throughout Europe, the US and Australia and is currently experiencing a resources boom of its own in Perth. ‘On a good day I walk into the office and there are about three p eople here because the rest are consulting all around the world,’ Cairnes says. ‘These days I myself mostly work with just a handful of managing directors and boards.’
So is retirement on the cards? Not likely, she says: ‘I tried to retire and it didn’t work. At the time I’d become tired of going to work.
I suppose I got run down and burnt out and I tried to disappear to Byron Bay. In the end I had
72 HOW I MADE MY FIRST MILLION
a year off, but that gave me a chance to change my attitude. I had a year of doing yoga, going to the gym, going to the beach and finding a new husband.’
Cairnes now has a house in Annandale, Sydney, and a holiday house at Byron Bay, where she spends a week every month writing books.
She has six under her belt already, including Boardrooms that Work—A Guide to Board Dynam-ics; Staying Sane in a Changing World and Peaceful Chaos. As to the failed retirement, Cairnes has no regrets. ‘The company went on, of course, but not as well as it would have if I’d been here.
Now that I’m back, it’s just sky- rocketing, and I’m having a ball.’
And there’s a new challenge down the track.
‘When you see p eople come to life and reach goals they once wouldn’t have dared imagine, it is really exciting. I’m very keen to take what we do to more companies. But I also want to take it into communities. There’s no reason why a government couldn’t do this and take the whole country to a new level. If you can get an entire community to go through this process, the social good is just colossal. That is my dream.’
Given her track record, there’s every reason to believe she’ll make that dream, too, come true.
rhyS hayNeS
THE DAY THAT CHANgED A LIFE 73
GolDen ruleS
1. It all starts with you, but relationships are key.
2. You cannot change anyone else, but change yourself and you will change all your relationships.
3. Challenge, change or accident: treat everything as an opportunity.
4. Dare to dream—the same old expectations lead to the same old outcomes.
5. be grateful for everything that happens to you.
That’s the way you learn what is real success.
An Idea Awash
With Cash
Jim Cornish
ecowash;
established 2004;
six employees,
125 franchisees;
ellegrini
$8 million turnover
Jim Cornish’s first word
Photo: Ella P
was—if only his parents
had known—a partial prophecy.
‘It’s absolutely true—my first word was “car”,’
Cornish explains. As it turned out, he was just one word—‘wash’—short of predicting his fortune. It wasn’t all that long before little Jim was driving cars. ‘My mum used to race cars—she
was the New South Wales hill climb champion back in the 1960s. I started nagging her to teach me to drive when I was very, very young. She taught me when I was about four or five,’ Cornish recalls. ‘I had my schoolbag behind my back so I could reach the pedals.’
Cornish, thirty-eight, didn’t become a Formula 1 champion, but he did get into car racing in a big way, competing as an amateur in the Super Touring category at Bathurst in 1997,
’98 and ’99. His career followed a very different track: ‘I did three years of veterinary science and then an extra research year in combination with Taronga Zoo, on the reproductive physiology of exotic species,’ Cornish says. ‘So, basically, giraffe shagging.’
But the Dr Doolittle experience, which took up six years of study, was always a sideline to Cornish’s driving ambition: running his own business. ‘It was something I always wanted to do. I set up my first business when I was eighteen, six months into my first year at uni,’ he says.
‘I set up one of those video game entertainment centres, back when they were cool. I had to get a $15,000 loan, for which my parents went guar-antor, but I made the money back very quickly.’
After just a year, the owner of a chain of pinball parlours offered to buy him out. ‘He came in and
76 HOW I MADE MY FIRST MILLION
told me I was running it all wrong, and maybe he was right,’ Cornish says. ‘I hate inefficiency and wasting money, so back then I thought, Who comes to a pinball parlour? Kids from school!
And because we wanted to be socially responsible we didn’t open until 3 p.m., so kids couldn’t wag school to come in. Anyway, this guy changed all the rules, and he went bust within a year.’ What Cornish learned from the experience was how to run a business by thinking like a consumer.
That wasn’t hard, because he enjoyed playing his own machines after closing time.
Cornish finished his vet science studies, then went straight back to school to do an MBA. ‘I’ve always had this thing about time. Mates of mine took two years off and went to Europe, but I never did any of that. I just wanted to get it done and get on with it,’ he says. Still racing, and by now a sponsored driver, he was also working full-time in the pet- food industry, for Nestlé. Then, in 2004, his life changed overnight.
Cornish’s car, ‘a black Monaro that I valued more than anything in my life . . . er, except my loved ones, of course’, was serviced by a mate named Stewart Nicholls. ‘He called me up and said he wanted to wash my car, but he wasn’t going to use any water. I said, “No way, don’t you dare touch it.”
‘But eventually he talked me into letting him show me how this product he’d found worked.
I was so impressed we teed up a meeting the following day with the p eople who were looking at importing it. We told them: We’re going to have mobile car
washing and fran-
chises—just give us a ‘
‘
It all happened literally
overnight. I rang my
year of exclusivity. It accountant that day, we all happened literally went and saw the lawyers, and we set up a company.
overnight. I rang my It was that quick.
accountant that day,
we went and saw the lawyers, and we set up a company. It was that quick.’
Nicholls shut down his garage immediately, and the pair mortgaged their homes so they could buy a brace of Daihatsus and paint them bright orange. Ecowash—the waterless car wash—was born. The secret of the waterless wash is a polymer product originally imported from Monaco. ‘You spray it onto the car and it actually lifts the dirt off the surface and encapsulates it. The polymer acts as a lubricant. There are no petrochemicals in it, so it leaves the car polished and protected because a layer of polymer stays on the car.
‘I was going to stay at Nestlé because I had a good deal there but it just got too busy, so six weeks later I resigned,’ Cornish says. While a waterless wash has
78 HOW I MADE MY FIRST MILLION
big appeal in drought- prone Australia, the Eco wash brand was actual y launched before widespread water restrictions hit. ‘The line we used is: “The indulgence of a clean car, with a clean conscience”,’
Cornish says, ‘but we didn’t market ourselves as an environmental solution. Any business needs to be sustainable, so it was part of our core business strategy rather than a marketing strategy.
‘We also came into the market at quite a premium: you can get your car washed for $12, and we charge $35, so there had to be more value for customers than just feeling good about saving trees. That’s where the quality and convenience came in. In some of our overseas markets, like France, there is no water issue, but it’s been taken up just as quickly there.’
Now, a premium car wash is one of the first things you’d expect to be cancelled when p eople start counting their pennies but Ecowash has continued to grow, in terms of both franchisees and customers, despite the credit crunch.
Even Cornish isn’t certain why.
‘We’ve had some corporate clients cancel on us, particularly in America, but business is up, and some of our franchisees are booked out for two months in advance.’
Cornish suspects several things are working in his favour: ‘P eople aren’t buying cars like they
used to, so maybe they’re looking after them better. Then again, there are lots of p eople selling cars to save money, and they want them looking pristine to get the best price. We’re getting business either way.’
Another factor may be time: ‘I’m hearing about p eople working longer hours to keep their jobs or earn extra money, so they don’t have time to wash cars themselves.’
France is just one of fifteen countries that Ecowash has expanded into, and global growth has remained steady despite the economic downturn.
‘Australia’s been one of the toughest markets to crack,’ Cornish says. ‘We’re naturally a cyni-cal nation, I think.’ The company operates in the Middle East and Central America as well as Europe. In the US, ‘We went in expecting there to be competition, but there’s nothing even close to us. But because of the recession we are underperforming on our targets there, though we’re still growing healthily,’ Cornish says.
A big problem in the US and Australia has been not finding more franchisees—the company is deluged with applications—but finding franchisees who can get funding from the banks.
‘Banks have become much more cautious, and even though you need only $45,000 or so to start a franchise they are reluctant to lend.’
80 HOW I MADE MY FIRST MILLION
The cash crisis prompted Cornish to take a close look at the business and strip out unnecessary costs. ‘We used to advertise in almost every franchising magazine and on every website, but we analysed where we were getting the best applicants from and focused our money there, cancelling the other advertising.’
Cornish has also found many companies and organisations keen to form partnerships and alliances during the downturn—pooling resources to secure discounts. ‘We just formed an alliance with the American Automobile Association, which has millions of members. We’ve also started an arrangement with Holden National Leasing, and with
You have moments Leaseplan in Greece.
where you sit back and go, It’s a great time to W ‘
ow, how cool was that?, hammer out these but we still put everything sorts of deals.’
back into the business. It’s
not a feeling of arrival, it’s ‘
Ecowash cracked
a feeling of being well on its first million in the way.
just its second year
of business, thanks to
a customer base that is 70 per cent female, and turnover is now $7.5 million. But Cornish hasn’t seen fit to reward himself for his success—yet. ‘I’m notoriously bad at that. I’ll set goals like, “When we get to this point, I’ll do this.” And then we get
there I go, “Nah, that was a stupid idea, let’s just keep going.”
‘You have moments where you sit back and go, Wow, how cool was that?, but we still put everything back into the business. It’s not a feeling of arrival, it’s a feeling of being well on the way.’
Cornish says his job doesn’t feel like work any more: ‘It’s become a lifestyle.’ Fortunately, that lifestyle still includes his first driving passion: cars. ‘I just love cars—not just fast ones. I’ve got a four- wheel- drive now and I even love driving that. Anything with wheels and a motor—I’m hooked.’
StepheN corby
GolDen ruleS
1. Choose something you can be passionate about.
2. build systems. Simplify every process and make sure it can be duplicated.
3. Fix things once. Multiply every problem by 100
before starting on the solution.
4. Look at where you are getting results and focus resources there.
5. be honest and open with your staff. Communication is critical.
A Fascination
With Figures
Angus Geddes
Fat Prophets;
established 2000;
thirty- five employees;
$5 million- plus turnover
There’s something strange,
almost freakish, about
Photo: Angelo Soulas
highly successful city busi-
nessmen. Very often you find that before they applied their nuclear- powered brains to finance they studied quantum physics, built their own computers or wrote papers about how to solve Rubik’s cubes, things that are incomprehensible to most p eople.
By the time he turned twelve, Angus Geddes had memorised the names of every director of every company on the New Zealand stock exchange. Rain Man would have been proud. ‘I was just fascinated by investing,’ he recalls. ‘I’d read every company report to soak up all the information I could. I read annual reports from cover to cover.’ That same year, Geddes decided that the savings he’d put in the bank weren’t returning enough interest. So he became an investor.
‘In the early 1980s, interest rates in New Zealand were pegged at about 2 per cent, and I’d saved up a couple of hun-dred dollars. I told ‘ ‘
I’d read every company
my dad, There has to report to soak up all the be a way of getting a information I could. I read annual reports from cover
better return on my to cover.
money. So we went
to the stockbrokers to open an account.’ By the age of sixteen, Geddes had turned his $200 into $40,000.
‘I made some extraordinary calls,’ he says. ‘And I had some luck. But I also had a good broker who gave me some good steers that chimed with my own judgment.’ That was the era of Wall Street the movie, yuppies and the ‘greed is good’
mentality. But for Geddes, it was never about the money. He claims never to have aspired to big
84 HOW I MADE MY FIRST MILLION
houses or flash cars. He drives an eighteen- year-old Mercedes 560SL which, he says proudly, has appreciated in value.
For Geddes, everything is about value. He won’t fly first class because he doesn’t think it’s worth it, but does fly business because it delivers comfort at a reasonable price. His investment approach is the same. He looks for out- of- favour companies that have been underperforming the market for an extended period and are, in his view, underpriced. Then he invests, waiting for a turnaround in sentiment to take the share price back up. The approach has served him well for two decades, although it took him six years to recover from the 1987 market crash.
In the early 1990s, Geddes travelled to London and New York and worked in stockbroking, gaining valuable experience that he put to good use when he arrived in Sydney in the mid- 1990s.
‘I took a job at a small brokers on full commission—no salary at all—and I hit the Yellow Pages, cold- calling professionals like doctors, lawyers and accountants. I asked if they’d be receptive to good investment opportunities, and I would often leave them with a tip. They’d see the company do well, and that would get them interested.
Many of those clients are still with me.’
At the time, Geddes says, he was a bit of a
