Small business success

[Husky]

Hi all,

Although we are still in the midst of our migration process, I am thinking ahead and was hoping for some insight into the small business sector, specifically in NSW and Victoria.

I am reasonably confident that I will secure employment once in Oz having started conversations with a few consulting firms already. My husband is a speciality electronic engineer in his mid 40s and reading some of the posts on this forum, I am concerned it will take some time for him to find something.

We are both entrepreneurs at heart, having run our own businesses for a number of years. I have been researching businesses for sale as I think this will be our best bet. What I am keen to understand is;

1. What kind of small businesses work best in Australia?

2. Franchising seems big. Which ones are the most successful?

3. We know how important networks are when you run your own business. How easy/ or difficult is it to build networks?

4. Does the government subsidise or provide any support for small business?

5. Are there any groups of Australian citizens looking for able and willing business partners?

Would appreciate any advice/ insight. Thank you. H 

Edited August 30, 2016 by Husky
Spelling

[Riekie]

This is a helpful link from the ATO which could help you out with the basics. They're pretty good in assisting new small & existing small business in Australia.

https://www.ato.gov.au/Business/Starting-your-own-business/In-detail/Small-business-assist/

 

There is a magazine with every possible franchise opportunity in Australia, available from newsagents. Not sure what the name is, but if you know someone in AUS, maybe they could get you one and mail it to you.

 

Here is a link to a franchise website for Australia - not sure if this is by the same people who does the magazine.

http://www.franchisebusiness.com.au/

 

Once you're ready to start your own business, there is literally step-by-step assistance on the ATO website, including links to all the places you have to register etc and how to comply with all the legal requirements.

 

There are tax breaks for new small business - it's all on the ATO website.

 

Hope this helps. 

 

 

 

 

 

[ottg]

18 hours ago, Husky said:

What I am keen to understand is;

1. What kind of small businesses work best in Australia?

2. Franchising seems big. Which ones are the most successful?

3. We know how important networks are when you run your own business. How easy/ or difficult is it to build networks?

4. Does the government subsidise or provide any support for small business?

5. Are there any groups of Australian citizens looking for able and willing business partners?

Some of my answers may seem negative but its to save you money. It will also depend if the business is under management or run by the business owner/operator. Lets assume the latter.

1. Those with an existing client base. Thus buying an existing business with potential where the owner would like to exit.

2. Difficult question because it depends who you ask. All franchisors will tell you its them. It will require lots of due diligence.

Again look at an existing franchisee who would like to exit

3. This will depend on your personality type. If you are outgoing and a people's person it will be easy. People often buy from those they feel comfortable with.

That is why some businesses under new management, with an existing client base, still fail once taken over by a new owner. Customers are taking there business elsewhere because the "business" doesnt appeal to them anymore. Obviously it will depend on what type of business, service or product.

4. This was answered in other posts. However some local governments are small business friendly

https://www.smallbusiness.wa.gov.au/business-in-wa/about-sbdc/small-business-friendly-local-governments-initiative/

There are grants but only for going concerns and turnover of >$10m and export potential etc.

http://www.industry.gov.au/smallbusiness/Pages/Business-Grants-Hub.aspx

There are lots of initiatives by government to increase innovation  http://www.innovation.gov.au/audience/business These events will then attract angel investors.

5. Yes often businesses will sell % equity to a new partner. They may ringfence the business and make you responsible for a certain part. Beware......it may be to improve their cashflow as you may end up with asset on paper and not sharing in the rest of the business successes.

 

Speak to this broker: http://www.sigmabusinesssales.com.au/ expat and very knowledgeable

 

Also this may save you lots of $$: http://www.diomo.com/view.html  (excellent info - I used it when I did consulting)

 

To get feedback from a wider audience you can perhaps put the same questions on Whirlpool.net.au

 

Edited August 31, 2016 by ottg

[Husky]

Thank you @Riekie and @ottg

This is very useful. Love the thorough advice and prefer honesty ito what to expect.  Sounds like both of you have been down this road before.

[SurferMan]

@Husky

 

I used to work via Seek etc. Now all my work is word of mouth and referrals. I dont have a CV anymore, if clients ask for one I send them to LinkedIn and if they still ask, I tell them they are too imature for my services. Cocky, maybe. But I dont have the time to waste on cover letters and tailored CV's, you either know what you want and like what you see, or you dont.

 

In terms of small business, it means I now sub contract teams to deliver chunks of work. Look at Jonathan Starks website.

[Husky]

Thanks @SurferMan

The luxury of choosing your clients. Not cocky, just makes business sense. 

Curious as to how you built up the network in Australia to get to a referrals and word of mouth stage? With me, I worked via bigger consulting firms and made sure I delivered high quality work on time, but more importantly, nurtured and focused on the relationship with the client. 

Not sure I get the Sparks website reference. Assume you are talking about the digital strategist? Not you? So is it a reference to freelancing and making your service offering clear? 

Take care

[monsta]

SurferMan has answered that question before. He is a Sap consultant. He lists all his successfully projects on his LinkedIn,  along with the financial outcome. For example,  "company yyyy spent $xxxx on  a new SAP system and now save $zzzz each year".  He also has an attitude of,  "if you don't believe company yyyy saved all that money,  then call up their manager Steve. Here is his number.." 

 

So,  for him it was all about getting onto a good,  highly successful project and leveraging that success.  But he has also been smart not to take on companies who don't know what they want and have projects doomed to failure. 

 

But even he has found things to be tough,  especially because of the cyclical nature of businesses here.  He is in Perth,  when commodity prices plum it,  so does the spending on new Sap systems. 

Edited September 18, 2016 by monsta

[Mara]

@monsta,  I thought @SurferMan had moved to Brisbane?

[SurferMan]

I am now a Brissie boy, but jet around Sydney, Melbourne, Canberra etc advising clients. @monsta spot on mate, and I am VERY cautious on who I take on. For example, I refuse to work on an IBM or Deloitte site unless I have been brought in to remedy the project. If so, I have 2 rules, 1: I hire my own people and choose who of the existing consultants I (re)use and 2: You do it my way or I leave and you are on your own.

 

Most clients are in trouble so when I engage they are in dire need. The next conversation is cost. I charge on a value model now, so I have moved away from a day rate. So instead of charging say $2000/day, I say to the client, what's failure look like, cost wise? Then compare that to my fee. So in the case of a mining client, it was a $10 billion dollar running  $120 million ERP core lift n shift. You will blanch if you knew what I charged them.

 

@Husky Yes he is the one who introduced me to the concept of value based billing instead of day rate madness.

 

All my financial savings are proven and are referenceable back to the clients. You will also see on my profile that I am very careful about who gives me a reference. I keep them at CxO level s much as I can. As for my network and how I built it up, easy. I got one CIO to connect up with me, then I cold called/LinkledIn another and another, saying I know the previous guy and I want to talk about your upcoming project XXX and how you can avoid trouble.

 

I usually then get hired to be Quality Assurance at a strategic level.

[SurferMan]

My approach also allows me to reuse a lot of content across clients. I am at a critical juncture in my career and doing this is future proofing my skills as best I can.

[Husky]

5 hours ago, SurferMan said:

My approach also allows me to reuse a lot of content across clients. I am at a critical juncture in my career and doing this is future proofing my skills as best I can.

 

The holy grail of the cash cow.

Also use LinkedIn a lot and it is quite incredible how open people are to connecting and talking to you once you provide a clear reason for connecting. A few years ago I was exploring opportunities in Singapore and had set up 5 meetings/ interviews before I left (4 from LinkedIn and 1 through a friend). By the end of day 2, I had then "forward" connected via LinkedIn or email and set up 9 more meetings/ interviews. The power of 6 degrees of separation ..... probably more like 3.

Thanks again for the insight @SurferMan

[SurferMan]

If you derived ANY benefit from this people, I consider my humble contributions to have been a raging success. I am keen to help the underdog get out from under the oppression of the HR/recruiting grindstone...I am JUST doing this now for a new client I signed up 2 weeks ago. A massive consulting house, could only onboard me via a day rate, I took it because I knew I would shoot the lights out thanks to God and a wee bit of skills I have in that space. On day 2 I had the VP offer me a full time role at a stupendous number. (Yes close to the contract cost I was charging) I declined, saying mate, I gave you mates rates (50% discount on my normal min day rate) to get you to feel me out and to see if there is future value. Come 1 Oct you will need to pay full day rate, or go to my value model. The point is, STOP underselling yourself guys and girls, charge what you ARE worth!

 

Will this model work always? No. People like the ever young miss Mara know I have been through the gristle mill, skilled or not. But I am done with being knobbed, they want to get my skill, pay or move on. A lot of people will do stereotyping off the offshore model for services, the Asians this, the Chinese that, but when I come onboard and analyse what "went wrong" 9 times out of 10, those people are delivering EXACTLY what is in the contract, not a dime more. Why cane them? In my analysis, where is the disconnect? Yep, exec and end user, time and again. Nobody asked the end user what they need in terms of service.

 

I am now going to enter into negotiations for the client to use me across two sites for  two years. Both are utilities, one worth $280million the other worth $100million, one in Brisbane, one in Sydney. In the old days I would be like a damn dog trying to score ANYTHING I came across. No more. New model: You pay me to be an SME across 2 sites, you give me a min of 14 days notice, I will be on site. Max time on site, 2 weeks. I work remote, I don't work Fridays in the office and weekend is 3x the fee to discourage abuse. You my be reading this thinking, Surferman was always a bit of a nutjob, but this is madness. Not so I tell you. Once I have explained to the client my rationale, they get it.

 

They see that they now only pay for me when they need me, I pitch when they call and for the rest of the time, I am free to roam and they don't pay, they love it.

[SimpleSimon]

Hi @SurferMan

 

Food for thought.

 

For us, hourly rate carries less risk. Our projects are complex and things change a lot as we go. Our project scope at the start and end are often different and we often need to bring in subcontractors and other companies. We don't want to have to negotiate a Scope Change all the time as we'd rather just get on and do the work. If we priced in the risk we'd be well out of the market. Also most people in our industry work on hourly rate. We've been offered retainers, project fee, stake in the business, but hourly rate is fair to all.

 

Hi @Husky

 

We've advertised, presented at conferences, are on LinkedIn, have done bulk emails and so on. Our database now covers 80% of the industry. We've found 3 things only have worked (1) association with other organisations that have great reputations (2) referrals from happy clients (3) coffee dates with people we know in the industry.

 

I advise people coming into Australia to work for someone first before starting up on your own. You build your network, you get the Saffer knocked out of you a bit and become more attractive to Ozzies, and you learn the business scene. If you come in cold into a franchise you can lose your shirt and everything else. They'll see you coming a mile off and could give you a lousy territory, overcharge you or fix the rules so you become slave labour.

 

Unlike Saffer workforce where maybe 5% has tertiary education, here it is 50% and they are very business savvy and competitive. Corporates are a political minefield and Saffers are frank, honest, ethical and outspoken. This makes us an easy target for colleagues wanting to get ahead.

 

in terms of what to do, stick to the knitting I.e. What you are trained in and good at. I've seen lots of Saffers try to make money doing something new, and generally they've failed.

[Husky]

Thank you @SimpleSimon

Sound advice.