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Small businesses can do big things. In this new series of videos, I would like to explore success stories of small businesses in Australia and what we can learn from them.

In this video, I share with you the story of Over The Moo ice cream.

The backstory

Over The Moo is a dairy-free ice cream business and the brainchild of entrepreneur Alex Houseman. Houseman created his business out of his own personal need. He loves ice cream but is sadly lactose intolerant. While dairy-free ice cream is available in the market, he felt that there wasn’t any product that could deliver indulgent and delicious flavor at an affordable price. This led him to develop his own dairy-free ice cream made from coconut milk.

Over The Moo is Houseman’s first business. He quickly recognised that he needed money, advice, and exposure to make it a success. He decided to seek funding in Australia’s version of Shark Tank. In the show, he received three offers but eventually walked away without a deal.

One of the concerns of the judges in Shark Tank during the Over The Moo pitch was that Houseman had not yet trademarked his recipe. Seeing the wisdom in the judges’ advice about owning his ice cream recipe, he immediately worked on fixing this intellectual property issue after the filming wrapped.

However, Houseman’s main concern with the judges’ offers were that they were lower than what he was willing to accept. It was unfortunate that the show was filmed before Over The Moo began appearing on Woolworths’ shelves. Since the judges didn’t take into consideration this particularly important business milestone, their valuation for Over The Moo was lower than Houseman’s own valuation for his business.

As of 2018, Over The Moo was available in 2200 stores, that include Cole’s, Woolworths, and IGA supermarkets. Despite a wide distribution, it maintains a lean business model of just three full-time staff.

What we can learn

1. Hard work and strategic planning pays

Houseman is a former marketing consultant, but it proved to be a difficult sell in the beginning. Houseman approached every supermarket and tried hard to convince them to carry his brand on their shelves. He started with independent supermarkets and eventually made strides toward large chains. His hard work, strategy, and very good ice cream proved to be a recipe for his current success.

Houseman said in an interview, “As I have learnt, a successful business is only one per cent good idea, and 99 per cent hard work and commitment.” This rings true for any business, but moreso for a business operating in a very competitive industry.

The ice cream business in Australia is a AU$1.1 billion industry dominated by major players such as Unilever and Baskin-Robbins. While Over The Moo is considered vegan ice cream, Houseman does not consider it as a health product as it contains the same amount of fat and sugar as a Ben and Jerry’s ice cream. This is to deliver the same indulgent flavor as regular ice cream to those with special dietary needs. Its product caters to a very specific niche: those who are lactose-intolerant or who follow a plant-based diet looking for a sweet, indulgent treat.

2. Check your cash flow

After Shark Tank, Over The Moo earned a gross profit of $1 million, but its net profit was zero. Houseman’s initial spending went to growing and expanding distribution.

Houseman confessed that he was lax with cash flow in the beginning. When he felt that this became an issue, he sought advice from other people and created an advisory board. He also took short courses on financial management. His efforts paid off.

Houseman consistenly advises having a tight watch on cash flow in his interviews. He says of his early experience with the business,

“I wish I’d known earlier how to forecast cash flow better. It’s terrible when you put all that effort into growing and promoting the business, then don’t have the cash flow to keep up.”

“At our worst, we had literally $45 in our bank account. All the while we have thousands of dollars in wages and product expenses every month. Being able to balance growth versus cash in the bank is the most important thing I have learnt regarding starting Over The Moo.'”

In my video, Allow Sales to Trump Everything, I share why cash flow management is important and how a fast growing business experiencing record sales could get into trouble if it does not manage its cash flow problems.

3. Fine-tune your product, and make sure you own it

It took Houseman 4 to 5 months of research and product development to get his ice cream recipe right. But despite doing all of the work developing the recipe, he initially shared the intellectual property of the recipes with the manufacturer he worked with. After failing to get a deal on the show and seeing that the ambiguity in the IP could become a costly issue, he immediately took the necessary steps to ensure that he had full ownership of his ice cream.

Houseman also knew how much his business was worth in his mind.  He was willing to listen to other people (i.e the Judges in Shark Tank) and was able to make an educated decision on the business value and decided not to take up their offer.  He probably knew that his product was going to go into the shelves of the major supermarkets, but could not yet reveal it to the judges at that time due to confidentiality issues.

Having said that, I have also met business owners who have inflated values of their business that were not based on market valuations. You need to be aware about the difference between your valuation of the business and how the market values your product—and you need to learn how NOT to get emotional in the process.

If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.

Read more >

Small businesses can do big things. In this new series of videos, we will look into small businesses in Australia—their humble beginnings, their growth story, and the lessons that we can learn from them.

Today, we will look into the story of Mountain Bikes Direct and it’s unique business model that allows employees to work while pursuing their shared passion for mountain biking.

Their story

Mountain Bikes Direct is an Australian-based online business selling mountain bikes and related products, such as parts, accessories, and clothing. It considers itself as a pure play company or a company focusing merely on a specific niche—in this case, products related to mountain bikes.

However, while this 8-year-old small business caters to a specific niche in the sporting goods market, it turned over AU$10 million in annual revenue in 2018.

This is impressive considering that this online-only company operates with only 14 employees—4 of which were only added in the last year. They pride themselves with their topnotch customer service. They are not only able to supply the largest range of mountain bike parts, clothing, and accessories in Australia, but they also provide expert knowledge to their customers.

If that’s not impressive enough, consider this little tidbit: this small team rarely even sees each other. That’s because Mountain Bikes Direct does not have a central hub or office—they all work remotely, but communicate and collaborate regularly through platforms like Slack and Asana. The team resides all over Australia: the Gold Coast, the Sunshine Coast, Brisbane, Melbourne, Mount Beauty, Canberra, and even Colorado, USA.

Every single member of the Mountain Bikes Direct team is a mountain bike expert who continues to passionately pursue their love for mountain biking, thanks to their unique culture and work set-up. They are all required to be online and at work at a pre-determined set of hours—but beyond these hours, team members are free to pursue their hobbies and interests. They are not even required to respond to queries sent outside of their work hours.

Each team member works remotely from home and provides customer support through chat. And because they are scattered all over Australia and with one team member based out in Colorado, the team is able to provide almost round-the-clock customer service support.

What we can learn

  1. Build a business model that supports your business and life goals.

Before setting up Mountain Bikes Direct, the four founders owned and ran a brick-and-mortar mountain bike shop. They realised the limitations and challenges of operating a physical store, and so they decided to sell the physical store and focus their attention online.

While an e-commerce business provided a different set of problems and challenges, they felt that this business model allowed them to pursue their business and personal goals. For example, being a purely online store meant that they could provide a wider range of parts to customers because they do not face the challenges of keeping inventory in a limited space of a physical store.

They also don’t need to deal with overhead costs associated with running a business in a physical space. This is certainly an advantage particularly because the cycling retail industry is a highly competitive industry, as large international competitors are increasingly slashing retail prices to earn market share.

The other obvious advantage of going online-only is that it eliminated the time restrictions of running a physical store. They didn’t need to show up in a bike shop day-in, day-out to run the operations during store hours—or stay after hours to check inventory and do back office operations. They instead used the time to pursue their hobbies and passions, and it provided them with more time to be with their family.

Jen Geale, one of the co-founders, said, “Over time we realised that we wanted to focus on e-commerce for reasons both business and personal, so Michael and I took the lead on creating a new brand, Mountain Bikes Direct, that was online-only.”

  • Provide the right infrastructure to support your business model

One of the challenges of having an online-only business is the lack of face-to-face interaction with customers. In the early days of their operations, people would call their hotline just to see if there were people behind the website and to check whether they were a legitimate operation. The team quickly realised that the best way to handle these issues was through better communication.

They re-designed the website to include many trust signals and answers to frequently asked questions. They eventually took out their hotline and replaced it with live chat that allowed the team to provide a personalised and real-time response to customer queries. Best of all, they are able to serve more customers. And thanks to the different locations of their team members, there is always someone you can have a live chat with at the Mountain Bikes Direct website 17 hours a day, 7 days a week.

Geale strongly believes that their structure truly supports the business goals they are trying to achieve. She says, “Being online-only means we can offer a more comprehensive service time-wise. We can help more customers. We can help customers simultaneously. We can provide expertise between six a.m. and eleven p.m. seven nights a week.

  • Hire based on goals, and keep them motivated

To make sure that they could grow the business sustainably, the founders realised that this meant they had to build a lean team of mountain bike experts who are passionate about nurturing a mountain bike community. This means that anyone working with Mountain Bikes Direct, including its founders, should have the time to pursue their shared passion, which is exploring the great outdoors on their mountain bikes.

How can you remain an expert in mountain biking if you don’t pursue a mountain biking lifestyle? It only made sense to create and nurture a team that works in a flexible environment: a team that “gets to work hours that suit their lives.”

This unique working environment is responsible for a staff retention rate of 100% in the last couple of years. Because Mountain Bikes Direct provides a flexible working arrangement with clear guidelines on what is expected of them, team members are motivated to work.

In my video, How to motivate employees the right way, I shared how providing employees with a reasonable amount of autonomy can lead to highly motivated employees. As team members are able to pursue their passion for mountain bikes, team members are able to provide expert advice to their customers. This creates a virtuous cycle that benefits customers, motivates employees, and enables the growth of Mountain Bikes Direct.

If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.

Read more >

Small businesses can do big things. In this new series of videos, we will look into small businesses in Australia—their humble beginnings, their growth story, and the lessons that we can learn from them.

Today, we will look into the story of Billie Goat Soap and its founder, Leanne Faulkner.

Their story

Leanne Faulkner, whose youngest son was born with eczema, is the creator and founder of Billie Goat Soap. Her young son used steroids to treat eczema, and she was concerned about the effects of long-term steroid use. This led her to do research on how to naturally treat and manage eczema.

Faulkner described herself as a frustrated farmer—her family owned a few acres of land and had dairy goats in the property. She researched about the benefits of goat’s milk in treating eczema, learned how to make soap from goat’s milk and natural oils, and used her homemade soaps on her son. Seeing the results on her son spurred her to start her goats milk soap company in 2005.

Faulkner used her communication and selling skills to bring the first batches of Billie Goat Soap into the market. She was very strategic on who, when, and how to approach about her product. She started introducing her products to health food stores, then farmers markets, then retail and gift stores, and finally to department stores.

Faulkner worked in organisational development and employee training prior to starting her company, and she used her background to grow her sales team. As a small company, she didn’t have the resources to put a sales consultant in every store. Instead, she trained the sales personnel in the retail stores that carried her product. She built strong relations with these sales people, even going so far as sending a bouquet of edible blooms in every counter with a personal card attached.

By working and leveraging on available resources, Billie Goat Soap grew and sold across Australia. It also successfully expanded its product line to include balms, skin care, and even a baby care line. At its peak, Billie Goat Soap turned over AU$2.4 million annually.

Unfortunately, a stress-fueled breakdown brought by a retail slump and the demands of running a small business led Faulkner to step down from her post and sell her company to The Heat Group in 2012. Today, Faulkner advocates for moremental health resources to support small business owners.

What can we learn

Not all small businesses have a happy ending, but there are lessons that we can learn from Billie Goat Soap’s story.

(1) Forecast what is needed to grow

Faulkner advices small business owners to plan appropriately for growth—specifically, having the right amount of funding to drive business development and expansion. While funding is important, I think the example of Billie Goat Soap also shows that having the right skills, such as management and leadership skills, is also very crucial.

And so, when we plan for growth, we need to also consider the resources needed to grow. In my video, When does your business benefit from seeking professional advice? (link forthcoming—not yet published), I share advice from Howard Schultz, the founder of Starbucks, who believes that planning to grow entails planning to hire or work with people who have the skill base and experience that matches your growth objectives.

(2) Communicate to your employees, to your customers, and to your suppliers

Clear communication helps to ensure that anyone connected to the business knows what the goals are and understands how the business aims to achieve them.”

Build a relationship with the people you work with. In Faulkner’s case, she took the effort to build strong relationships with the sales people working in the retail stores who played a major part in growing the revenue of the company.

How can you continue to build strong relationships with your employees, your customers, and your suppliers?

(3) Look after yourself

Faulkner is an advocate of mental health. She has been vocal about her stress and anxiety—and how this affected her mental health in 2011.

In my video, Overcoming Entrepreneurial Exhaustion, I discuss three things that entrepreneurs and business owners can do to overcome exhaustion. That said, mental health is a medical issue. Whilst we expect to look out for and manage stress that comes with operating a business, bringing consultants and expending your team can help in many areas. But there are instances when stress starts to change who you are.

If you feel that the stress of running a business is getting to you, please seek help from a professional because they are trained to listen unconditionally and provide much needed intervention.

If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.

Read more >

While reality shows seem to feature fantasy over reality, I find it very interesting when motivated and hardworking entrepreneurs become the subject of a long-running reality show like Shark Tank. Running for 10 years already, the Shark Tank in the United States has produced many successful ventures that turns over millions of dollars annually.

In this video, I explore what small business owners like you and me can learn from successful entrepreneurs of Shark Tank.

In two previous videos, we discussed certain prominent judges of the US version of Shark Tank and the lessons we can learn from them (link forthcoming).

This time, I explore lessons from two of the most successful business ventures to come out of that series—and one venture that failed to seal a deal with a Shark but became one of the most successful companies to come out of Shark Tank, and was later bought by Amazon for more than US$1 billion in 2018.

Lesson from Scrub Daddy: Provide a solution to a pain point

Aaron Krause is the founder and inventor of Scrub Daddy, a non-scratching reusable sponge that made cleaning very easy, thanks to the scrub’s characteristics. He developed his first scrub in 2006, but failed to secure any sales, and so sold most of his sponges to the 3M Company as scraps. In 2011, in need of sponges to clean off his own lawn furniture, he discovered that his special sponges got the job done without scratching any surface.

In 2012, he went into the Shark Tank and secured a deal with Lori Greiner. To date, Scrub Daddy has made more than US$50 million since its pitch.

Scrub Daddy provides a simple solution to an everyday problem. It makes cleaning easy. But that’s not all—the product has also been lab tested to rinse clear of debris and resist odors for up to two months. Krause and Greiner, both inventors, have said it again and again—successful products are ones that provide easy solutions to your customer’s pain points.

It all boils down to your customers. How can you help them? How do your products and services minimise or even eliminate their pain points? How can you improve the products and services you offer today to make sure that you provide a better solution to your customers’ pain points?

Lesson from Tipsy Elves: Identify risks and diversify

Founded by college friends Evan Mendelsohn and Nicklaus Morton, Tipsy Elves started out as a company that designed and sold ugly Christmas sweaters. The company differentiated themselves from other ugly sweater creators by using higher quality materials and also by teaming up with Save the Children, an American non-profit organisation, in dedicating a portion of their profits to providing underprivileged American children with winter clothing. After their pitch, they partnered with Robert Herjavec.

One of the risks that Herjavec and the founders of Tipsy Elves identified from the very beginning is the seasonality of the product—it only came out during a few months in the year. So one of the things that they immediately worked on was diversifying their product line so that the company has business the entire year. They have since expanded to over twenty clothing categories, including Hawaiian shirts and swim trunks, patriotic clothing, and Halloween costumes. Since their pitch in 2014, the company has seen more than US$50 million in revenue.

Most, if not all businesses experience business cycles—and throughout the year, there will be lean months and there will be months when we see a lot of business.

The question you should ask yourself is, how can you diversify so that you can have more business during the lean months? What can you do so that you can extend your busy months?

Lesson from Ring: Have a focused vision

In 2013, Jamie Siminoff pitched his product, then called Doorbot, a doorbell with a camera that sent video to users' smartphones. Despite having made solid sales for Doorbot, Siminoff walked away without a deal. His appearance in Shark Tank only increased interest for his doorbell camera, but this is a story of overcoming many challenges.

The first set of Doorbots he launched into the market produced poor video quality and had spotty WiFi capabilities. Siminoff had to spend 9 months responding to customer complaints. Funding also continued to be a challenge.

But Siminoff was motivated by his purpose: to make neighborhoods safer for everyone. He designed his smart doorbell because his wife had difficulty hearing when someone rang the doorbell and also because of his own concerns for home security. While there were smart doorbells in the market, it did not provide the benefits that he wanted from one.

So he pushed forward. Eventually, he was able to work with a manufacturer who could improve the quality of his doorbells. He also found partners to work with, one of whom suggested to change the name from Doorbot to a simpler name, Ring, that had a better recall.

He was also introduced to Richard Branson who lead the last round of funding for the company. In case you did not know, Branson sometimes appears as a guest judge on the Shark Tank. You could say that Siminoff eventually walked away with a deal from a Shark.

In 2018, Ring was bought by Amazon for US$1 billion.

When things became difficult, Siminoff held on to his purpose and his vision for the company. He was specifically motivated by his desire to provide a solution for an important pain point: home security—much like how Scrub Daddy offers a solution for a pain point in home cleaning. And Ring itself has diversified, offering other complementary home security products—much like how Tipsy Elves diversified their product lines.

If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.

Read more >

In this video, I offer a simple 3-step guideline on what small business owners should keep in mind when planning to train and develop their team—and to get them to work for you so that you can grow your business.

For a business to grow, we need to work with the resources that we have access to in order to achieve growth. One of the key resources in any business is the people working in the business—your team. You are dependent on them for the success of your business, as much as they are dependent on you for leadership and guidance. For growth to happen, everyone should have the right skills and the right attitude towards growth—training is one of the factors that will help ensure this.

Why train? When we stop learning, we stop growing. This is why it is important to continue training everyone in the business. Here are three important steps that I think small business owners should consider seriously when discussing employee training and development for company growth.

Step one: Identify learning gaps

What does your team need to learn? Categorize these gaps into short-term, medium-term, and long-term gaps. Look into them and fill accordingly.

What skills or knowledge do your employees need to learn immediately—perhaps in the next 6 to 12 months? What skills or knowledge would they need in the next 12 to 18 months or the medium-term to long-term?

What kind of skills do they need to learn? Are these hard or soft skills? Hard skills are specific, teachable abilities that can be defined and measured, such as the ability to use software programs that you may be using in your business. By contrast, soft skills are less tangible and harder to quantify skill sets, such as customer service or leadership skills.

Step two: Identify an approach

The next step is to identify how you will address these gaps. How will you train your employees for the skills and knowledge that they need to learn immediately? Will they learn on the job? Will someone be mentoring them? Will you be their mentor or will you be bringing someone from the outside to mentor them? Will they be shadowing someone already performing a similar task or process? Or will you be expanding their knowledge and skills through cross-training?

Does your organisation have someone in-house who can teach such skills? Or do you need to find a third-party provider for their training? Or maybe enrol them in an online course?

It is interesting to note at this point that while formal courses offered by many educational institutions seem ideal, some studies have shown that employees tend to learn more from their peers, particularly on skills and knowledge that already exist within your team. Furthermore, by teaching each other on the job, employees learn important leadership and management skills required for their position.

How will you tackle employee training and development in the medium- to long-term? Will you have an organisation-wide professional development plan? Some organisations assign a training and development champion—one who is held accountable for helping the organisation identify learning gaps and find an appropriate approach to achieve the organisatino’s professional development goals.

Step three: Identify accountability

How do you sustain your medium- to long-term learning goals? While the first two steps refers to actions or activities that the organisation should perform, this last step aims to ensure that any plans formulated and carried out in the short term will be implemented sustainably for years to come. This makes sure that the skills and knowledge of your staff grow with your goals.

A more important question to ask at this point is: who ensures that the development goals are carried out? I mentioned earlier about assigning a training champion. But keep in mind that the training champion only helps identify new or persistent learning gaps, and helps business owners find ways to address these. Having only one person accountable for everyone’s training and development is not enough.

In Deutsche Knowledge Services, Inc., the financial management back office of Deutsche Bank offices worldwide, every employee is held accountable for their professional development. They are all required to fulfill at least 60 hours of training every year. The company offers an exhaustive list of hard skills and soft skills in-house training, but employees are also encouraged to take out formal courses online or in formal institutions should the in-house training be insufficient. While the human resources department is considered as the training champion, every single employee is also called on to champion their own learning and development.

Obviously, Deutsche Bank is a massive organisation—and small businesses do not have the resources to roll out a professional development plan such as theirs. But we can take a page from their practice by focusing on what they wanted to achieve: hold employees accountable for learning by requiring them to be very active in their own development within the organisation.

What can small businesses do?

One regular practice in some organisations is weekly catch ups with the immediate superior. Managers spend 15 minutes, usually at the end of the week, to chat with their team members. This can be a form of mentoring. You can also introduce cross-training, where members of your team are assigned a different task or to a different team at regular rotational intervals. The key, however, is to keep your team accountable for their learning is to ask them what they need and what they intend to learn, and get their insight on how they themselves addressing the learning gaps.

Remember, as your team grows, they will be better prepared to handle the changes that come with the growth of your company.

If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.

Read more >