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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 Whole Kids, a family-owned organic snack small business based in Melbourne.

Their story

Whole Kids launched their first organic snack range in 2005 in response to a gap in the market. The couple, Monica and James Meldrum, who at that time were not yet parents, could not find delicious and healthy snacks to buy for their nieces and nephews. They found that the range of “healthy” snacks available in the market at that time were not necessarily healthy—they thought many of them were filled with potentially harmful preservatives and were poor in nutrients.

They decided to create their own range of snacks that focused on nutrition and also making sure that they were free from common allergens. The Meldrums spoke to organic growers in Australia and worked with a dietitian at the Royal Children’s to understand what some allergies were.

They also decided early on about what kind of business they were going to set up. They wanted a business that focused on healthy products, on having an impact in the community, and on sustaining a small, family-run business that is fun, friendly, and fulfilling.

In the beginning, the Meldrums worked more intuitively. As the business expanded, the couple wanted to articulate their purpose and values in a statement, and so they engaged a consultant to help them formalise their statement.

Their values and purpose reflect on how they recruit talent and how they source suppliers. They recruit and source based on how they fit with their values and align with their purpose. This, in turn, helped them focus on what they are best at, which is product development and marketing. By working with competent employees and by outsourcing work to suppliers who share their values, they are able to keep their operations small, nimble and family-run—the kind of business they set out to build and nurture.

Today, after using AU$100,000 in savings meant for a deposit on a house, Whole Kids is Australia’s largest certified organic snacks manufacturer for children with an estimated annual turnover of at least AU$6 million. It exports to the Middle East, South East Asia, and most recently, China.

Monica Meldrum is considered as one of the country’s most influential female entrepreneur. And yet they still consider themselves a small, family-run business competing with large, multinational corporations. To date, they supply large orders of kid snacks to large airlines, such as Jetstar and Qantas.

What we can learn

Their business model—that is, small operations catering to large corporations—presents unique challenges, which I think that small business owners, such as you, would be able to relate to and even appreciate.

Here are three lessons that the Meldrums share about running Whole Kids:

(1) Be honest with your customers

Any business will run into supply issues—but because Whole Kids work with organic and seasonal ingredients, ensuring a stable supply of raw ingredients makes it even more challenging.

Whole Kids work with fresh natural and organic ingredients, taking into account not just overall nutrition but also common allergens. Some items are seasonal and some items need to pass certain standards—so they can run into supply challenges. This means that they may not always supply the same product in every flight or that they can deliver large batches of particular product units all the time.

What do Whole Kids do? They communicate closely with their clients.

With any supply issues you think you may run into, give your customers a heads-up – it’s much easier to work through that than be caught out last-minute.”

(2) Do the research

When launching a business, especially one that tries to cater to gaps in the market, it is important to understand what the market truly wants in order to create and supply the right product or service. In the case of Whole Kids, the founders spent a lot of time and effort in understanding not just their market, but also ingredients and processes that may affect their product offerings.

Because I spent two to three years researching the market, I understood what ingredients were available and what product gaps there were. It enabled me to launch the product and minimise the risk.”

 (3) Focus on what you are good at and delegate the rest

The founders of Whole Kids are parents to a young family. The operations of Whole Kids remain family-owned and small. In the early stages of the business, their impressive growth stretched them out too thinly. So the couple decided to focus on their core competencies, product development and marketing, and to delegate to other people who specialised in warehousing and distribution.

We immediately thought we needed a warehouse and needed a good distributor and took that on ourselves but it stretched us really thin. We realised there were other businesses that could oversee that side of the operation better than we could. At the five-year mark, we realised we could do things smarter so we could focus on the marketing and the products and leave distribution to someone else."

One other notable thing that Whole Kids focuses on is their vision. They are an example of a small, family-owned business that has a clear vision of what they want to be, what they want to do, and where they want to go—and one that keeps to that vision to drive their growth.

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, 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 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 >

How do these team-building activities improve collaboration in the workplace? Are they really as effective as they purport to be?

In this video, I explore why team-building activities may not necessarily improve collaboration in teams or within the workplace—and what you can do instead.

Team-building activities can be fun: scavenger hunts, obstacle courses, cooking or art classes, and even activities that mimic reality TV game shows. These can bring out unique skills from employees and allow one to see a different side of their co-workers.

In order to cater to demand, there is an entire team-building industry across the globe—and even here in Australia. And I have to admit that some of the activities they offer are fun and one-of-a-kind, as kendo and samurai classes, mountain climbing and sailing experiences, or themed scavenger hunts. These are just some of the activities they offer for team building or team bonding.

But given their costs, how effective are these team-building activities in improving collaboration within employees?

Do team-building activities work?

There is currently no hard research to support that these activities improve collaboration in the workplace. The problem is that while these activities may bond people through shared experiences and emotions—they do not last long enough to hold up under the day-to-day pressures at work.

One reason is because they do not really mimic what happens at work—they do not represent the routines that employees face on a daily basis.

Furthermore, one activity alone does not change the office dynamic. It takes sustained and recurring efforts to do that.

There are also other factors that may be preventing employees at work to collaborate effectively: unaddressed conflict, role confusion, bureaucracy, inexperienced leaders, learning gaps, just to name a few.

Why don’t they work?

Perhaps the long-term study conducted in Mars, Incorporated, the American global manufacturer of confectionery and pet food can help us understand why team-building activities don’t work.

The company wanted to improve collaboration across their organisation but was stumped when they realised that employees were not collaborating as closely as they wanted them despite providing support and following best practices. And so they sought to understand why this was happening.

What they found out changed the way they view collaboration. Most collaboration studies and best practices claimed that collaboration begins with trust and relationships—when you build trust amongst employees, collaboration will naturally follow. While trust is an important factor in collaboration—it is NOT, however, its defining factor.

The problem was that most employees viewed collaboration as a vague concept—and merely a tool to get something done. It is viewed as something important but not essential for their work.

The idea of collaboration is this: If Ted, Dan and Bill—all outstanding sales employees—put their heads together or collaborate, perhaps they could potentially sell more product.

But what the Mars, Inc. study found out was that what made Ted, Dan and Bill outstanding employees was their individual motivation to do better each time and relying on their own selves to get the job done. So, instead of depending on each other and working together—they went about their work individually to sell more product and get the job done.

They found out that Mars, Inc. had a bunch of very competent and highly motivated employees—and it was this internal motivation that was preventing people from collaborating!

What to do instead?

The key was to change mindsets. To do this, Mars, Inc. had to focus on what motivated each employee.

1. Define what collaboration is

The first step was to define what collaboration is—that collaboration is not merely a tool to get something done but a goal to be achieved. People would collaborate more if they were held accountable for it.

2. Reinforce the collaboration goal

The next step was to reinforce the collaboration goal with making teams understand why it was important. Each collaborative team member was tasked to come up with an answer to the question: Why is your working together, as a team, more valuable than just the sum of your individual efforts?  Why should we collaborate as a team? What good will it do for us?

This step was crucial to getting everyone to buy into the idea that collaborating was not only useful to the team but also crucial for their performance and growth. To get people to work together, the team had to figure out why and how that would actually improve results.

3. Identify roles and tasks

The last step was to identify roles and tasks. Specifically, what work, which specific tasks, would require collaboration to achieve those results? This step took the most time to do. Many assume that when teams collaborate, they give up control over results. But this step provided a way to define and measure collaborative efforts. For highly motivated individuals, this was very important because it made clear who was accountable for which tasks and determined how much they were accountable for.

The end result? The team that the study focused on grew 33% overall—with the primary brand in their portfolio growing by 60%.

In sum, team-building activities may be fun, but they may not produce lasting results. It may do your team of employees better by making them define what collaboration means to them as a team and how this will help achieve your business goals as a whole.

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 >

Growth is a good thing—until it is not. In this video, I discuss why growth for the sake of growth may be a bad idea for your company—and what you can focus on instead.

What is good—and what is wrong—about growth?

One of the more common growth strategies include product lines extension and business diversification. The idea is simple—offer something else or something more to your existing consumer base to increase your revenue. Many global brands and companies have used these strategies to their advantage. The idea is simple: offer something else or something more to your existing customer base to increase your revenue.

A product line extension entails using a popular and established brand name for a new item in the same product category. A successful example of this strategy is Diet Coke, which is a product line extension of Coke.

Diversification, on the other hand, entails entering into additional markets or using a different pricing strategy. Amazon, for example of successfully diversified its offerings when it launched Amazon Prime, Kindle and Alexa. Amazon Prime offered a premium delivery service for a fee, while Kindle and Alexa are two products that extended Amazon’s offerings.

Diet Coke, Amazon Prime, Kindle and Alexa all strong arguments for the viability of these growth strategies. Done well, product line extensions and diversification can lead to growth.

However, these strategies aren’t fool-proof—and they can especially lead to a financial disaster if a company uses it merely to grow without concern for how this affects the company’s overall operations or how its customers will respond to these strategies.

One example of a failed product line extension is the New Coke. The New Coke was meant to compete head to head with Pepsi. To do so, the New Coke was formulated to taste exactly like Pepsi. This left Coke fans confused—and Pepsi fans remained loyal to their brand. The product was pulled out of the market after suffering severe losses.

The Amazon Fire Phone is considered as one of—if not THE most expensive mistakes Amazon has ever made—in fact, it made US$170 million in losses. While the idea of the world’s largest online retailer launching a phone made sense in its early stages, it quickly became apparent that the phone did not meet the needs of its users, despite its many features.

If I don’t focus on growth, what should I do instead?

New Coke and Fire Phone are perfect examples to the phrase—just because you can do it doesn’t mean you should. Having a goal to grow is not necessarily bad—but growing for the sake of growth can hurt more than benefit you and your business. And many times, focusing on something else—something more important—may be what you need in your business.

What can you focus on instead?

  • Focus on what you do.

I can appreciate why one would want to diversify—don’t we always say that we should not put all of our eggs in one basket? That said, we also need to choose which baskets we put our eggs into.

Before we diversify, for example, we need to ask ourselves several questions. Do we have the expertise to diversify and offer a different product or service? Does it make financial sense to offer this different product or service? Do we have the equipment and infrastructure to support this?? Do we have the labour resources? Do we understand enough about the new market we will be entering to know what market wants?

If you find yourself responding with a “No” to any of these questions, perhaps it’s a reminder that we do not always need to diversify right now. Maybe what we need to do is to focus on what we do well—and find ways to improve on that.

  • Focus on what works.

You do not need to reinvent the wheel—especially if the current solutions or offerings work well. The New Coke was meant—in the company’s terms—to reinvigorate the market by offering a new formula. Unfortunately, Coke’s fans did not like this new formula—and openly protested that there was never a need to reformulate to begin with.

When we implement something new, are we offering a better product? Are we introducing a simpler solution? Or are we messing up with a formula or product that already works? Are we trying to reinvent something that doesn’t need reinvention? Are we changing things merely to introduce something new?

  • Focus on your customers.

What Amazon and Coke teaches us is that the best strategies and the best products are the ones that keep the customers happy. Diet Coke works because it provided an alternative for Coke fans who wanted or needed to cut back on sugar. Amazon Prime, Kindle and Alexa provided Amazon customers convenience—a better way to enjoy the products they bought from Amazon.

The New Coke and Amazon Fire also remind us that new features and supposedly improved formulas don’t always lead to products that existing customers will love.

The line that separates Diet Coke, Amazon Prime, Kindle and Alexa from New Coke and Amazon Fire can perhaps be defined by this question: who was the product designed for?

Are you offering a new product and service with customers in mind? Are you diversifying to offer better solutions or to make things more convenient for your customers?

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 >