Today on SmartCompany we are talking to Amber Fergusson, one half of the husband-and-wife team behind Carbon Management Solutions, which recently took out the top prize for fast growth in our Smart50 awards with growth of 453% over the past three years.
Amber talks about the secrets of managing exponential growth, what the next big green product in the home will be and why not knowing much about business planning can be a big advantage.
You have had absolutely extraordinary growth, but how much of it has been pushed along by government subsidies for solar?
I guess a lot of it has been, but we have a lot of competitors that are in the same situation as what we are and while they’ve experienced growth it has not been as significant as ours. Part of it is due to the fact that we’ve got two companies, we’ve got two halves to the company. We’ve got Aussie Solar Installations and that’s an installing company and we have the wholesale company, which Carbon Management Solutions.
So is there anything you have done to differentiate yourself in what is a very competitive sector?
We haven’t actually signed over any contracts to anybody, we haven’t bought into the whole franchising thing. We’re trying to protect the smaller installers in Australia against the big players of the industry like BP Solar and Sharp Solar. They will only sell to distributors and then they put on their percentage on top of that and then that prices smaller installers out of the market. So what we’ve done is created a pricing structure that it doesn’t matter who you are, you can buy from us and we sell directly to you.
That’s what we like to hear, supporting the smaller player.
That’s right. Well, we were small players and we couldn’t buy panels.
So are you sourcing the panels directly from China?
We are.
And how’s it been establishing those relationships? Has it been a difficult process?
No, not at all. We’ve been extremely fortunate with our suppliers in China. We found a product to begin with that was efficient and cost effective and it ticked all the right boxes. Cameron, my husband was the one that initiated the contact and went over to China to meet with them and he now goes over there every eight to 12 weeks. He’s got a very strong relationship with our suppliers and he is consistently building those relationships and improving products.
So what happens on the visits?
It’s improving the development of the products and keeping the suppliers in touch with what our market is doing and what the demand will be.
Have you struggled to keep up with demand at times?
Absolutely. We’re always sold out before the stock’s even arrived.
How do you manage that with the customers back here?
Well they have to understand that the processing of solar panels takes a long time. So by the time that we’ve put in an order, it takes three to four months before those panels actually arrive in Australia. So if customers are experiencing high demand on their end and they didn’t tell us prior that we would be getting large orders from them, it puts a lot of pressure on us again. So we try and manage that out as best as we can. We have a very simple rule: It’s first in, first served. So just because you put in an order, a large order, doesn’t mean you’re going to get the priority.
So again all the smaller guys get to compete on a level playing field.
Absolutely.
You and Cameron came from very different backgrounds. When you sat down and did the forecasting for the business, did you anticipate anything like this happening?
No. But we also were told that we were crazy getting into solar power because that was just for hippies and there was absolutely no money in solar power.
When you were told that, how did you react? Did it force you to do some more research?
No, we didn’t do any research to begin with. We just do what we love and we improve on it everyday. We decided to go down a different route in wholesale and that’s what has been a really, really good decision.
What sort of systems or processes have you had to put in place to manage the exponential growth?
We have an unbelievably awesome management team. We have a team of people, there’s about seven of us that have been with the company for the last three years. So since it started getting extremely busy, these people have been with us from then and they’ve helped us improve and implement the processes to manage the staff issues. I mean in the beginning it was just those seven people and now we have 70 people. So each of them have different sections and they manage those sections and we deal with the issues as they come up.
So what does that let you and Cameron focus on?
Just doing what we love to do. Planning the company and looking at different ways that we can improve the whole company rather than just processes. The managers really look at the day-to-day running of the business and we really then can look at a broader view of the entire industry and company.
Have there been any big challenges or mistakes you’ve made during that growth time?
For sure. When we first started out we were approached by a very large prominent company that wanted us to distribute to them. That was a very big learning lesson on corporate relationships and it was a money hungry tiger. We got burnt, pretty fried by that and turned into a pretty ugly legal battle that we learnt major lessons from. Major, major lessons.
Is that why you’ve kept the customer base quite diversified?
That’s right. We’ve kept it to what we wanted in the beginning. We went off to the side there for a little while. We thought, this is what businesspeople do, they make connections like this in business – but that’s not who we are. We are extremely down to earth tradespeople that wanted to start something to help tradespeople and that’s what we’ve stuck to.
What other advice would you have for companies that have to deal with a large spike in customers and sales?
Just always work on processes. You just have to refine the processes all the time. Some of our processes change weekly, so what was good last week, doesn’t work this week, you just have to get on with it and change the process to make it function. You can ride the wave then. It doesn’t matter about the volume when the process is correct and it doesn’t matter who is running that, the process just runs it for you.
One of the keys to the growth of the business has been selling via the web. Was that something you really concentrated on?
We never intended that anybody would come to our workshop, it was always going to be a web based company because we’re in the mountains. We always thought that no one is ever going to want to come here, but we can still supply them with really good products and deliver it to them. We’re only 30 minutes away from the hub of Sydney’s distribution area for the entirety of Australia for Star Track Express so it’s a really good area for distribution.
So it was always the plan that it would be an internet based system and we’re going to be improving that over the next 12 months so that will make it easier for the installer to do that from his mobile phone, place an order on the internet and bang, it’s out.
Do you sort of have to design the website in a certain way for installers that are out on the road and probably don’t spend their entire days in front of computers? They probably want something different from a website.
They sure do. They want to be able to buy in many different ways. The old fashioned way of calling it in, some of them want to just email it in the middle of the night but most of them, 75% of them want to use the shopping cart on the site. But they do need things a little bit more tailored for their needs. When you do a solar system, it can be a little bit complex if you have a different house size, so we do have technical people on call all the time that the installer can call through and we will guide them through what to order.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
