Managing risk has been central to this solopreneur’s success
Monday, June 2, 2014/
Tony Hayek is a prime example of a solopreneur; someone who has single-handedly created a highly successful business, in a very niche space. While he has a team for sales, support and warehousing, Tony is the one who drives the business forward and he’s done this for 25 years.
Interestingly, when he first started out importing commercial grade catering equipment from overseas markets, he named the business Hospitality Equipment 2000. As the millennium loomed, Tony realised the business had surpassed his expectations, and he wasn’t quite ready for retirement. He changed it to Hospitality Equipment 2020 with plans to continue growing the business for sometime yet.
Growing in a finite market
There is one thing that can limit a niche business like Tony’s – a small, finite market. Australia’s small population means that there are a relatively small number of businesses that need commercial catering equipment.
However, Tony has found a subset of the market that has led to substantial growth. He began by providing equipment to one outlet of the Cheesecake Shop franchise.
From that initial sale, he met owners of the franchise, many of whom are now his customers. Tony then began to work with other franchise businesses including Subway and Coopers Breweries. The long term nature of franchise contracts means opportunities for Hospitality Equipment 2020 to secure multiple installations from each customer. It also means that Tony only interacts with his customers every few years.
“They come back when they need to upgrade or, if they need a new piece of equipment,” says Tony. “There’s a risk that a customer will be a one-off purchase, not a repeat customer. It’s the nature of the industry.”
As a result, Tony has built a diverse client base so that if one customer closes or changes hands, this won’t have a significant impact on the business.
“Never have all your eggs in one basket,” Tony explains. “No business can survive, if one customer is the main source of income. It’s just too risky if something happens to that customer.”
Managing foreign exchange risk
As with any import business, Tony’s business is at the mercy of the foreign currency market.
Tony makes regular online foreign transactions using CommBiz Markets. He can easily access the current trading spot rates as well as the rates for tomorrow and, any forward-dated transactions he may have planned. This ability to guarantee the rates he’s paying takes considerable risk out of the purchasing side of his business, and increases the certainty he has about projected costs.
Tony can also schedule upcoming expenditure on equipment purchases around changing currency rates.
Managing operational risk
As the sole owner of the business, the only person who can make decisions and perform certain business operations is Tony. This means a lot of time and effort performing tasks that don’t contribute to the growth of the business.
To alleviate the time burden of some of these, Tony has set up secure staff authorisations in CommBiz to allow his accountant to perform certain financial administration tasks on his behalf.
“It’s the convenience and the control that works. Tasks can be allocated to my accountant. I set up who can do what and, when they can do it. That way I can still see what is happening without having to do the tasks. It saves time and let’s me get on with working on my business,” explains Tony.
With a few more years before his self-proclaimed retirement, there is one thing Tony has his eye on.
“I’d like a bigger show room to display the equipment,” explains Tony. “And, I’d like to consolidate all aspects of the operations under one roof. It will be easier to manage when everything is in the one place.”
As his company’s name suggests, Tony has a vision for the future. With his strategic approach to business he’s likely to achieve his goals long before 2020.
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