It’s been a big year for Australian business. But all entrepreneurs know that with every experience comes a good lesson.
Each week, the “How I” articles bring a little insight about an entrepreneur who has achieved or experienced something particularly noteworthy. There’s too many to list, but here are some of the best pieces of advice given by these business leaders in 2011:
Ian Goddard runs Yaris, a software firm used to help field agents organise work. Earlier this year he spoke to SmartCompany about how he finds the best staff using IQ tests.
“A psychologist once told me that she tested 12 executives in a business, and 11 of them were grouped in one quadrant. There was one left. The 11 were more artistic people, and the one left was the type who keeps pens in his pocket. He made the whole operation work, and the rest were the creative types.
It’s important that you have a diverse group of people so you have a mix and keep things working. You want intelligence, but a high range of diversity among your staff.”
Aussie Farmers Direct is one of the biggest success stories from the past few years. Chief executive Braedon Lord told us about how the company purchased its own dairy farm – and how other businesses can handle their own expansion.
“You need to forget the mantra “build it and they will come”. You need to suit the existing business but at the same time have the ability to manage growth.
Doing this sooner than we had would be a mistake, even within a six-12 month timeframe. When you take care of your supply you need to make sure that the demand is at such a level that it’s something you need to do.”
Sarah Allen runs electronic tagging and testing firm Appliance Tagging Services, and found out the hard way that upgrading your IT system can bring more pain than benefits.
“Always have a plan B or a contingency plan.
There are so many unknowns that could occur when you’re looking at upgrading your IT system, so many little things can go wrong and one or two mistakes can take down your entire system. Because so many IT systems are dependent on each other there is a chain of events that occur when something goes wrong.
But just have a contingency plan and test everything before you assume it’s just going to work.”
My Net Fone has expanded quickly over the past few years, moving from VOIP into dedicated net services. But chief Andy Fung said a bad hiring decision held the company back at one point.
“You really need to put processes and systems in place so that everything is managed professionally. You need to know that if one guy is making a mistake, then it can be caught much, much earlier.
That isn’t necessarily because people are doing it deliberately. But people make mistakes, and the earlier you can catch something that’s going on than the better off you’ll be.”
Website testing is a tricky issue, but as Objective Digital chief James Breeze points out, too many companies focus on design rather than customer behaviour.
“Show people your website and get their feedback on it immediately. Whether it’s your mother, child, colleague, get them to try the website and figure out whatever it is they’re trying to achieve.
Businesses tend to work on their websites in isolation, and they try to have project guidelines and get something done without testing it along the way. That’s a mistake.”
Online rental car booking group Vroom Vroom Vroom was running extremely low on cash until co-founder Richard Eastes started thinking up a way to get more traffic with SEO, developing articles and content to help bring new customers.
“Once the customers start coming in you really need to develop your brand.
The brand name really helps customers over time. You look at a URL like “carhire.com.au”, but it doesn’t get as much traffic because it doesn’t have a memorable brand.
SEO is all about branding. Once you get those customers coming in, they will recognise your name, and it all builds up from there. Search engines can get you out of a lot of trouble.”
Nick Shelomanov is the co-founder of retail website MegaBuy Group, enjoying some impressive success over the past few years. But it hit a snag when the website failed, due to a deal gone bad with a hosting company.
“If you’re a retail business, this applies as well – you wouldn’t skimp on POS equipment because when your front-of-sale touchscreens or cash registers stop working, everything grinds to a halt.
If you make your revenue through a website, then don’t skimp on your web hosting, or on any of the things that will make the wheels stop spinning if it breaks down. Have an alternative.
Do some research before you buy, and when you do have an outage, make sure it’s because you’ve either planned it, or you have a backup plan. It’s really not worth it to save money on hosting when it is the front-end of your business.”
Private selling group OzSale received a significant investment from Twitter backers Insight Venture Partners last year. He spoke to SmartCompany about how SMEs can go after similar funding of their own.
“I think you really need to get the fundamentals right. Get the brand strong, get the business plan robust, and get a good team around it. Those are the three components you really need. Everything else you can buy, like infrastructure, processes, and so on.
Be bold in what you want to do. There can be a degree of uncertainty, but with the right buyer it really creates shareholder value.”
Neil Tilley is the head of printing company Upstream, which was acquired by Fuji Xerox last year. He spoke to SmartCompany about how businesses need to be as open as possible during an acquisition process.
“You have to be totally open, and you’ve got to do a job of picking the right partner. We didn’t just put our business out there, and say, “We’re selling the company to so and so”. We asked these companies to tell us what the plans for our business were.
You need to sell your business with the mindset that there are more stakeholders than yourself in the business. You have to make sure when all the transactions are finished that it’s a better deal for staff, otherwise you can’t expect them to remain loyal to you.”
Jacqui Esdaile is the marketing manager at commercial property design firm Valmont Interiors. She told us about how the company improved its innovation effort by setting up an ideas committee drawn from throughout the business.
“We just want to be able to share everyone’s knowledge around. They are constantly absorbing things every day, when they are seeing clients, and a lot of the time the information gets lost because they keep it to themselves. We want them to share that.
Suggestions about how they’ve come across ideas and how they can use them. Perhaps if they have seen businesses similar to us, how they think they present things and so on. We always take the pros and cons of certain ideas, get the staff to go away, and table what they think will or won’t work.
We’ve had some really interesting ideas where we’ve seen competitors doing interesting things, so we take it and give it a Valmont spin.
A lot of stuff to do with products, but even site safety. We used to manually record what would happen on a building site, but we’ve constructed a live system that updates immediately, and that came out of one of these meetings.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
