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What Successful Business Owners Know, That You Should Know Too

If you are interested in becoming a successful business owner, the first thing you need to do is throw out all of the beliefs and ideas on what makes a person a successful business owner. There is no blueprint that you can follow, or a particular school that you must attend; what you need to focus on are the things that you have control over now, and how they can help you make a difference in achieving your business goals.

The first thing that you need to realize and accept is that there is no predetermined amount of work hours you need to put in each week. The amount of hours that you put in each week, will help you get out of your business what you put in. If you think that you can accomplish everything you need to in a few hours each day, you are mistaken. To achieve your desired result, which is becoming a successful business owner, you need to work your tail off. There is no shortcut or magic business plan that will help you avoid putting in the work.

The next thing you should focus on is finding out what you truly love to do. If you haven’t found that yet, then the business you are working at may not be successful because you do not believe in it 100%. When you find out what it is that truly motivates you and makes you jump out of bed each morning, you will be on your way to doing something that is important to you. Believing in what you are doing each day will make it easier for you to achieve the success that you have been looking for.

A successful business owner is passionate about their work. They are always looking for a way to improve their business or share their work with others. It is this level of passion that drives them to be the best they can be; it is also beneficial in motivating those around them as well. This type of passion can often be contagious and lead to a productive and fulfilling work atmosphere. If you love what you do and are excited about it, don’t be afraid to share that enthusiasm with everyone around you.

Every successful business owner wasn’t born with the knowledge on how to run a business. They knew that there was a lot to learn and they devoted their lives to learning as much as they could. To become a successful business owner, you need to educate yourself on how the world of business works. Become familiar with all of the different aspect related to your business and never allow someone else to know more about your business than you do.

A Dynamic Business in a Challenging Environment

Every business owner looks for ways to grow their business. So when an accommodation group in the north of Western Australia had the opportunity to grow through acquisition of a brewery it sounded like a match made in heaven. Right? Not without some challenges as this accommodation group found. This article documents my discussion with The Chief Operating Officer (‘COO’) of this accommodation group.

This group is a family owned and operated business, specialising in short term accommodation and hospitality throughout the north of Western Australia. They are passionate about sharing the immense and stunning landscapes of the Kimberley region with as many guests as possible. The business is built on a family tradition of commitment to guest satisfaction and their aim is to provide guests with consistent quality and service in all their accommodation, and food and beverage outlets.

The Patriarch has been in the short term accommodation industry for over 30 years and built up a portfolio of properties. They built a river lodge development approximately 7 years ago when the tourism industry was booming. During construction of the development the GFC hit and the tourism industry experienced a significant decline.

In an already challenging seasonal industry the reduced cash flow became a major concern for the group. This was further exacerbated by the purchase of micro-brewery. While the intention had been to smooth out the seasonal cash flow, the rapid growth of the brewery created its own cash flow issues.

I spoke with the COO about the group’s business philosophy and how they manage some of their challenges.

MT: What are the benefits of being a family owned and operated business?

COO: “Being a family owned and operated business – we can react and change tack more quickly, as opposed to a larger corporate. Being a family business, our relationships are stronger with people and suppliers. Trust and integrity is more believable”.

“The patriarch is very family orientated and focuses on keeping family interested and involved. Key family members run and control various aspects of the business and report back to me as the COO. This style of management with clearly defined roles and responsibilities for the various family members works very well for us.”

MT: Short term accommodation and hospitality are highly competitive industries. How do you differentiate yourself from your competitors?

COO: “With our accommodation (business), yield profitability is key for us – not occupancy rates. The risk is our competitors can drop their rates as they are occupancy rate driven. People are more price conscious than they used to be. We can’t and don’t compete with new accommodation properties in the region. We focus on customer service and repeat business. We focus on our strong points and adjust our target market.”

“The brewery business is different. Competitors are always trying to copy our products and are always a concern/consideration. There is not a lot you can do other than remain creative”.

MT: The locations and industries you operate in have highly seasonal cash flows. Added to this recent years have seen some significant drains on your cash flow. How have you managed this?

COO: “Running a brewery with an accommodation business has its benefits and its pitfalls. It provides supplementary income for a seasonal business but has been a cash drain due to its rapid growth. Cash flow forecasting and repositioning regularly is KEY”.

“Our business model and overall cash flow has changed over the years. It was much more seasonal in the past. Since purchasing the brewery, we are now busy in the off season too”.

“The brewery stock levels need to be managed well. Stock has to be on hand to meet demand, especially for large distributors such as Woolworths. Working out what stock levels to hold becomes challenging. Storage becomes an issue. With no contracts in place, there is a risk of stock going to waste. Spoilable product can be turned back for any number of reasons”.

“It helps that our bank has an understanding of our seasonal nature. Our capital debt reductions are made 4 months of the year during the accommodation peak season. Financing is sought for our significant insurance premiums and then is repaid between June and October, our peak season. Seasonal overdraft facility limits are in place to provide cash flow during the off season. Invoice financing for the brewery is in place and it has helped to improve cash flow too.”

MT: What would you say was the biggest change you needed to make as a business?

COO: “We needed a change of mindset and to be more forward thinking. Being in a routine was not working anymore for us and we needed to adapt to change”.

MT: In hindsight, what would you have done differently?

COO: “Put a lot more fat into the budget for the river lodge development project. The project started 7 years ago. The tourism Industry was booming when the development started. Initially we were only developing a portion of the whole project. Things were good and we decided to develop the project in full. Then during construction, things got tight. There was a decline in the tourism industry and things were not so good. The GFC hit. Issues with a dropping AUD and cost of flights had a significant impact on guest numbers and bookings across all properties. At the brewery we were not as prepared as we should have been. We were doing a lot of things at once, and building Berkeley at same time”.

MT: I recently had the pleasure of delivering a Financial Management short course for 14 of your management and administration staff. Has this had an impact for the business?

COO: “I attended this course a few years ago and I got a lot from it. I still refer to the manual from time to time. I thought it would be good for our staff to understand the financial side of business and to get a better appreciation for our business and for what I do.”

“One of the key learnings they came away with was an understanding of P&L’s and Balance Sheets and the ability to analyse and calculate the figures that make up those reports. Also they have an increased awareness of the factors that could affect our business and can now use some basic tools to understand them before the business is impacted greatly”

The Patriarch also said “In attendance were our venue managers, accounts staff, heads of departments and directors, some fourteen in total.

“Without exception we all found the course of great benefit. It provided a practical and easily understood insight into management accounting practices that every business should be undertaking. The case studies even though not directly related to our industry were taken from real business and were easily related to our experiences as business proprietors.”

I come from a strong banking background and was able to explain what banks look for in the financial report of their clients. Despite having been in business for over forty years these performance measures were previously a mystery to me.”

“My presentation was clear and precise and easily understood. There was opportunity for questions and concepts that were difficult for some were covered until all participants were up to speed.”

“The greater their understanding of what makes for a profitable business the easier it is for the owners to operate.”

Money Management: How To Successfully Begin A Home Business

Has the decision to start your home business been made? Many people see owning their own business as an opportunity to make their own decisions and engage in enjoyable work. Never forget that it’s a real business, though. Preparation can help you operate a stress-free, successful home business.

If you need to spend time driving to get things done for your business, it’s vital that you record your mileage and keep careful track of all your receipts. Travel expenses can really add up over time, so take careful notes! However, you need to be sure that you’re able to prove that the trips had to do with your business.

Having a comfortable work space with the supplies you need is the first step to starting a home business. This may not seem that important, but it is hard to stay motivated if you don’t have the proper setup.

If a product that you sell is no longer in stock, say so on your website. Customers are certain to be upset with you if the products they ordered will take weeks to arrive to them. When a product is on back-order, make it very clear so that customers have the opportunity to choose a suitable substitute.

Even when you are working from home, you should take pride in your appearance. There is a great temptation to not dress professionally when working from home. As with any other job, you should dress for success. Dressing appropriately places you in the frame of mind to work productively.

Invest in obtaining some business cards. Business card offers can be found on line at a reasonable price or even free. On your business card, remember to include your name and contact information. At the very least, include a work phone number. It is important to include your email and website as well. This helps make it easy for customers and prospects to contact you.

Start a mailing list. Make sure to keep your communications below the spam level. Mailing lists allow you to advertise new sales or promotions. Some people also use mailing lists to send coupons, relevant information and articles to their customers regularly. Make it easy for people to subscribe to your mailing list right from your website.

When you take the time to learn how to market your business to prospective customers, you’ll find that it’s not that hard. Try creating a website for a home business. You can set your own website up in a day or so. Domain registration is sometimes free, but usually you’ll need to pay a nominal fee. This fee can be worth it if the profits are pouring in.

Make sure that your website has flair and is not mundane. Don’t choose something long or hard to spell. It is always best to keep it simple.

Search online to get the supplies you need for your home business at wholesale cost. Many wholesale companies are available online and can offer you discounts on the supplies your business needs at a fraction of the cost of retail. Owning a certified business license allows you to grab these products under exclusive prices and conditions.

You should always take some risks and experiment with home business if you want to continue to grow. Launching experimental product lines and promotions is a good way to build your customer base and improve your market position. Doing the same routine repeatedly never allows you to see if you can do something better. Another thing you can do is sell other people’s products. You can become an affiliate and start making commissions when someone purchases a product from you. This way you don’t have to spend time thinking about product creation.

Many people pursue the goal of working at their own home business. The success of a home business is dependent on the right information. This article will give you an advantage over your competition, so that you can achieve your goals.