Know your data and get ready to learn: 10 lessons from this year’s Smart50
Thursday, November 3, 2016/
The Smart50 class of 2016 work up to 80 hours a week on their businesses – by Australian employment standards, they’re cramming two years’ worth of work into one.
Every year, SmartCompany gets to pick the brains of these driven individuals and deliver their top business tips to you.
Here are 10 lessons from Australia’s fastest growing SMEs on how to thrive – and stay sane in the process.
1. Know the power of the pub
Business is not just about the bottom line, and several company founders tell us their employees are driven in part by their stomachs, with the staff lunch a key part of the day-to-day operations of the business. This is important not only for motivation and morale, but for business owners to look beyond the immediate problems in front of them and spend quality time with the talented people they work with.
“Regular staff outings and events are also integral to the culture,” says co-founder of Digital360 Rob Dalessandro.
“These events come in a range of sizes – there’s everything from Friday night drinks, to half a day spent in the country playing competitive laser tag. We’ve done escape rooms, lawn bowls, movie nights – and just about every bar on Chapel Street.”
2. Make a business plan – but feel free to tear it up
How much detail is too much when mapping out growth? This is a key area of contention among this year’s Smart50 members, but all seem to agree that business plans are a deeply personal thing – and not something you have to be wedded to for eternity.
Some believe that mapping out growth is essential to knowing whether you can afford it.
“Make sure that you have the funding required to follow through on your business plan. Keep your focus and don’t over stretch,” say the management team at internet provider Cloud Plus.
Then again, if you’re outlining minutiae and know nobody’s going to pay attention to it, best give it up, says S1T2 co-founder Tash Tan.
“Scrap the business plans and fifty-page strategies that no one will read once it’s written,” she says.
3. Go slow
Expansion doesn’t guarantee happiness, and many on this year’s list have told us they’re taking growth one step at a time to stop overwhelming challenges from getting in the way of delivering to customers. This extends to hiring, too; several founders say they’d rather take their time when hiring than spend it fixing problems down the line.
“Hire for attitude; hire slowly; hire with the emotion taken away. Ask yourself, ‘would I mind if this person worked for the competition?'” says Retail Savvy Group co-founder Stewart Koziora.
TorFX co-founder Paul Billing agrees, saying the foreign currency platform, ranked fifth in this year’s awards, had to be patient when hiring in a relatively new industry.
“The biggest thing that we learned here was never rush to hire somebody for the sake of it. Take your time. If it means waiting for the right person then wait, it’ll be worth it in the long run!” he says.
4. Appreciate how hard it is to find good staff
Patience might be a virtue when hiring, but a number of this year’s finalists were also surprised to find how difficult it is to find staff that had the talent and values they wanted in their businesses. When they did find them, this made building strong relationships with that talent all the more important.
“During the rapid growth of the company in 2014 – 2015 our hiring process let through a few people into our company that either did not have the right skills or were not the right fit due to poor attitudes and characters,” says co-founder of aged care health service provider Blisscare Health, Igor Statkevitch.
“It took a lot energy, time, health and money to fix the problem and rebuild the culture for the future.”
5. Protect your product
Expansion is an attractive prospect, but it comes with risks, say the founders of this year’s Top Exporter, kids cutlery company b.box for kids. And it’s vital to stay on top of your intellectual property.
“Korea is one of our most valuable export markets and our partner has invested significantly in growing the brand. Parallel importing into Korea was a major problem and we spent a lot of time and money in determining the source,” says b.box for kids co-founder Dannielle Michaels.
“We eventually found it was a customer in the US, who despite having confirmed in writing that the products were only for resale in the US, was in fact shipping the goods straight into Korea.”
6. Work hard to understand data
It might be a minefield and several businesses are still working out how best to use it, but there’s no doubt that data analytics play a significant role in corporate expansion.
For companies like this year’s Smart50 winner, Prospa, number crunching has given insight into who’s out there and what drives their decisions.
“We used big data analytics and in-depth market research to determine which industries and distribution channels we could win in,” says Prospa co-founder Beau Bertoli.
The business used to complete credit assessments manually, but operation “Hungry Cobra” saw it review all elements of the loan application process that Propsa clients go through, with the team looking for ways to streamline it.
“The first lesson we learned was the importance of truly understanding our customer and partner needs,” says Bertoli.
7. Know that success brings challenges
Growth is the name of the game, but the Smart50 class know that managing success is half the battle – especially in sectors where growing means taking up more physical space.
“This year our biggest challenge was keeping up with the demand for our product both financially and logistically,” says co-founder of retail outfit Bronze Snake, David Strangis.
With winter late to start and plenty of customers pre-paying for clothing, the team were facing warehouses bursting at the seams with stock.
“It’s a big risk,” says Strangis. The Bronze Snake team now know the value of doing things right the first time.
“Most of the time opting out for the cheaper option means you will have to fix or upgrade down the track. Trust that you will be bigger and better the next year.”
8. Make peace with being “the first”
Often a business idea is such a cracker because there’s literally nobody else in the space – but if you find yourself in this situation, you’d better be ready to be patient about seeing your dream become reality.
Several entrepreneurs on this year’s list created companies to fix a problem that nobody else had yet solved. Toby Strong, founder of coffee pod producer Podpac was in this position, and was the first person to think about manufacturing pods for coffee machines in Australia.
“I was told time and time again just to continue having our products made offshore,” he says.
“Many potential investors just didn’t feel comfortable investing millions of dollars in local manufacturing.”
Meanwhile, Strong had little experience in manufacturing, so he needed to find people who did. In 2014 the team set up a local production line after years of work led them to investor funding.
9. Get ready to learn – even if you’ve done this before
Many on this year’s list are not strangers to business, but virtually every company calls on its founders to become an expert in something they’ve never thought of before. The ability to be open to learning about completely new sectors and processes was cited frequently as a key to success.
Powerpod founder Tim McNamara says he had to ensure he was competent in everything from vending machine technology, to accounting, to site acquisition and importing when he started the phone charger vending machine business.
McNamara says the learning process strengthened his ability to do a number of things useful to the business: “Utilising all available resources, most importantly people around you … and maintaining focus whilst learning and researching and knowing when and which of the many rabbit holes to go down,” he says.
10. Go beyond growth
Finally, it’s not just about the cash. This year’s shortlist cited family, co-workers, philanthropy, learning, humour and happiness as key drivers to their success and lives, both in and out of business. For many, helping with fundraising efforts through their business helped to strengthen their ties to the community and the resolve and success of the company as a whole.
Community Hero Award winner Media33 is one example: after co-founders Michael and Jenna Lambert lost a close friend to cancer in 2013, the business partnered with charity Pink Hope on a number of projects to raise funds for cancer research.
“I truly believe we have surrounded ourselves with good hearted people within this industry and not by chance,” Lambert says of the help the team has received with these efforts.
“We hope we can give back and it gives us all a sense of reality and perspective in our everyday working lives.”