Make and Save Money like Kerry Packer

There is a lot we could learn from Kerry Packer and we don’t have to read the big books to find out what made him so successful in hte art of making, saving and multiplying money.

We uncovered some of Kerry’s secrets right next door to us – we interviewed another successful person, who worked closely with Kerry, – Allan Mason, principal accountant of Encore Accounting. Allan was, in fact, one of Kerry Packer’s accountants!

Here is a full transcript of the interview:

What I learned as Kerry Packer’s accountant.

Good business advice from the past for business owners of the present and the future

Hello everyone.

allan masondenitza genovaToday we are presenting Allan Mason, Chartered Accountant, SMSF Specialist, Registered Tax Agent and MD of Encore Accounting, a company offering a comprehensive range of accounting, tax planning and wealth management services to help business owners and individuals win the game of money.

Our interviewer is Denitza Genova, Partner – Strategy, Marketing and Service at Sparcus Group, an organisation which helps professional service business owners develop and grow their business with smart marketing, sales and service programs and strategies.

Denitza: Allan, you’ve had a fascinating professional life, having worked for and with iconic Australian companies and prominent high fliers such as Kerry Packer, whose reputation was of a formidable businessman.  As the popular opinion goes, Kerry was “one of the greatest “numbers” men going around in the day”.

Tell us about your time with Kerry and what you learned from working directly with him.
Let’s start first with some context. In what role did you know Kerry?

Allan: I worked in the Head Office of Consolidated Press Holdings. We looked after a number of entities, mainly the printing and publishing divisions of CPH.

Denitza: What was Kerry’s approach to money management and business in general?

Allan: Kerry was not a hands-on business person. His approach was to always employ the best, reward them handsomely and then let them do their job.
When you started with Kerry you were on a 6 month trial after which you either received a big raise or the door. It was as simple as that.
When I went through the selection process, I went up the line and Kerry said to me:

“You need to be worth double what I pay you”

thought I am an accountant how can I be worth double what I am being paid. But it makes you think in a different way. It makes you think about being productive.

That thought has stayed with me all my life and as an accountant when I look after a client and their business I aim to be proactive, to add value and be worth more than what we charge.

As a business owner, when you buy goods and services and when you sell them, you’d expect to make a margin on it.

It is the same with accounting, legal services, etc. when you engage an accountant to do something for you, they need to be worth more than what you pay them.
In Kerry’s case he expected you to be worth double.

I contributed more than double through a couple of acquisitions I recommended that we did, that were extremely profitable.

In those days Kerry paid extremely high salaries, so you either got paid well, or were out the door. There was no in between.

You were either paid high or dismissed.

Denitza: That seems quite an extreme leadership approach, but in a way similar to another “giant” of the business world – Jack Welch (ex CEO of GE)?

Allan: Yes, that’s how he worked, that’s how he ran the business.
He ran the business very much on a financial basis.

By Friday each week all the various division and entities needed to send in their figures. There was no excuse on this. Each entity had different KPIs – they might have been sales, debtors, stock, purchases and creditors. We would tabulate these on a single spreadsheet. It was not the week numbers that were important but the trends.

If the sales were trending down, Kerry would get on the phone to the CEO. Then I would be sent out help deal with any issues. Maybe look at their costings, charge out rates etc. No-one would have ever welcomed a call from Kerry on these matters as he was known to use a few superlatives.
It was a case of KPIs being monitored week by week.

You could see the trends and you could see them in real time, not 6 months after the event.

You don’t want creditors (amounts owed) or GST building up to an extent you can’t jump over, so you want this information in real time and I think small business owners miss that point.
Big businesses are generally good at monitoring their performance.

Small business owners should do exactly the same. At their level, of course.

Denitza: So how can small business owners do that?
Big businesses, such as Kerry’s, can employ the best people to do that. Small business owners may not be able to afford employing the best on a full-time basis.

Should they use the best advisers instead?

Allan: Exactly! And they should.

Also, technology makes things so much easier today. Honestly, with XERO and other online accounting programs, which feed directly from the bank into your accounting software you know these figures.

You don’t need an outside accountant to tell you that.
You may need them to set you up correctly, and we may teach you to fix the errors but once you get sorted you are in the driver seat.

You have to take control of the wheel.

Download the rest of the interview by clicking the button below.

Allan shares his and Kerry’s top tax minimisation strategies as well as other great business lessons for small and big business owners.

Are you attracting Window Shoppers only?

A story about South Australian wines and Fijian holidays to test the market and attract leads…

There are a few basic but very important frameworks on which successful marketing is built.

So simple that they are often overlooked and neglected by both business owners and by marketing practitioners.

The most fundamental one is the definition of a customer:

A customer for your products and services is everyone who meets all three conditions:

  1. Is prepared and happy to pay the money you ask for your product and service (at full, not discounted value)
  2. Has the need and/or want for your product and service
  3. Is ready to buy your product and service

If the people you are marketing to and attracting to your business via your promotional efforts do not meet all three conditions ask yourself this qustion – who are you attracting? Leads or window shoppers?

Look at the table below for the answer:

window shoppers

As you can see from the table, selling to customers (who are ready to buy now) is easy.

Attracting leads to your business, however, is a strategic move as they meet only 2 of the 3 customer criteria.

You need a program/a pathway for them, which will turn their need for your products and services into a want and will increase their readiness to buy.

As for the window shoppers ….nothing about them is certain – you don’t know if they have the money/budget to pay the full price of your products or services.

You don’t know if they even have a need or want for your specific products and services.

And you don’t know how far from ready to buy they are at the time they come to your business to window shop.

So what is the big deal with it? Why is window shopping bad?

It is not, if you just let it happen – in a way similar to having a shop on a busy retail street.

But it is not OK if you are actually paying to attract window shoppers and worse even if you are buildign a business around window shoppers.

It does happen.

This is how.

Many years ago, when I was consulting start-up businesses in Adelaide, many of these entrepreneurs were putting their family savings in a business whose future chance of success was based on the opinion of these very same family members or friends.

They had done market research of their potential market and had assessed the viability of their business idea by asking their family and friends if they liked their new product and services.

What do you think your loved ones are likely to say in a similar situation?

“No, this sucks”? Hardly…

Even if your friends are completely honest with you, you still have to assess the relevancy of their answers in light of your target market – who your target customers are, what they need and want and can they pay the asking price.

Even if they ticked all these boxes their answers are still no guarantee for success.

For example, one of my clients, a very talented jewellery designer, organised an exceptionally inviting and well received exhibition of her new designs.

It was all set up in a nice heritage building with delicious nibbles and of course a wonderful selection of the famous South Australian wines.

wine

Now do you think the guests were slightly influenced by the setting of the “retail” environment?

There’s nothing wrong with this setting, provided your marketing strategy involves creating a similar enhanced customer experience and selling the products to select retailers who would replicate this experience for their customers.

Any other distribution strategy, not replicating the buying experience provided in the market research, would not likely succeed at the pricing points tested at the exhibition…Pricing points? What pricing points?

Oh, forgot to mention that no prices were displayed at the exhibition.

So the very important condition of whether the guests were ready and happy to pay the asking price, which would make them potential customers for the artist’s jewelery was not tested.

Designers and artists in general are sensitive at selling and find it hard to attach commercial value to their art.

I understand this but business is business.

Unless you see clearly the relationship between the price and the product you cannot identify your target customer base and would therefore struggle to market your business successfully.

Coming to present days…

I see a lot of promotional methods on social media centred around free competitions.

A recent one was specifically designed for brokers to help them attract new leads by offering them free holidays to Fiji.

This marketing company was very proud to announce the hundreds of leads it scored for these mortgage brokers.

The obvious questions is – as a mortgage broker do you see a clear link between the desire (need and want) for an overseas holiday and the desire (need and want) to buy a house? Do we assume that because people want a free holiday they can’t afford a paid one? And that the reason they can’t afford a paid one is because they are saving for a house, therefore they may be in the market for a house soon-ish? So this all qualifies them as a viable lead for our business?

Growing a database of non-qualified “leads” is not a good marketing practice. It certainly is an interesting and appealing promotional method but what you are most likely paying for is for a database of window shoppers, not leads and would be customers.

So think about who you want to attract to your business before you go ahead and invest in the process of attracting them.

Think about your long-term marketing strategy first before you invest in a short-term promotinal activity.

Marketing comes first!

How you’re setting yourself up to fail in your business

What is in this article:

  1. You need to be playing the game or risk losing
  2. How you maybe setting up your marketing and sales for failure before you even start
  3. Examples for accountants and lawyers
  4. How you need to play to succeed

If you have a business you are in the game.

How you play it will determine your long-term outcome – a win or a loss.

And if you are not playing, you are losing.

Why so?

Let’s start from the beginning.

Whether you’ve been trying to grow your business or just keep it open you would have experienced ups and downs, wins and losses, joy and frustration; many times.

You would have looked for answers – on your own or through a friend, or advisor.

You would have heard and seen a lot of good advice; often contradictory, often self-cancelling advice, such as:

“Never give up” and “It’s smarter to quit than to continue and incur further losses”

“The answer is in the plan” or “The answer is in the action”

“You need to focus/niche” or “ You need to diversify”

So which one do you follow, which path do you take?

Just thinking about it is overwhelming, so you just continue running…

How about we look at your business in both serious and not so serious way ( I know it’s a contradiction ?)

Let’s look at your business as a game – a game of chess – it’s both fun and serious at the same time.

Why chess?

I could have used a more current game, such as Warcraft.

But perhaps not everyone can relate to the games of the new time…whilst chess is timeless.

Even if you’ve never played it you will still get the analogy and what I’m about to share with you in very simple terms.

Why is playing a game of chess like running a business and doing marketing and sales successfully?

Here are some of the reasons:

  1. You need resources and tools in your business/marketing and sales; they are the equivalent of your chess pieces
  2. Not all of your resources are of equal strength and importance
  3. Your resources and tools should not be used at random (neither are chess pieces)

That’s all

How you are setting yourself up to fail in your marketing and sales before you even start

Here are some of the ways you maybe doing it and not even realising…

As a professional service provider you are focused on delivering great expertise and service and rely on repeat business and referrals. This is great but no different than being an expert employee in someone else’s business.

So you decide to give marketing a go – you set-up a website (1 chess piece) and you set-up a few social media pages (1 chess piece) and you start sending a newsletter to you clients (1 chess piece)

If this is what you have /do then you are entering the game of winning more clients/business and growing your business, which is great but you are doing it with just a few pieces.

How do you move these pieces? Do you have a plan?

Just having a website will not generate interested customers/leads automatically, they need to be sent there in the first place. Are you doing this – do you advertise or promote your website?

If you are sending out a Newsletter, is it customised according to the interests and needs of its readers (your clients and leads)? Do you know what these interests are? Newsletters, just like general news or worse like ads, can be seen/heard as “noise”. People learn to switch off and become situational listeners. They start paying attention only on what is directly and immediately of interest to them. So your Newsletter may get ignored.

Overall, this approach to marketing is like playing chess with few pieces and no strategy. Not a wining set-up.

Now let’s say you have more pieces: you have prepared yourself and have invested in creating strong and versatile set of marketing and sales tools: a website, social media pages/accounts, advertisements (on radio and on the net), live roadshows/presentations, the lot.

How are you “moving these pieces”; how are they helping each other to reach your goal; are they working in unison with a strategy or are they moving at random?

Are they even moving on the same chess board (same market)?

Spending more time and money on your “pieces” will produce results but at a high cost, so you won’t get a good return on your investment, which in business terms does not exactly mean a loss but it’s not a win either.

Learn how to move your pieces more strategically to win here.

What does this all mean for you?

The  dangerous thing about having many resources but not a good strategy is that you are open to manipulation / wrong advice even if it is well-intended.

Let’s look at the financial and legal services market.

If you are an accountant or a lawyer dealing with SMSF (Self-managed Super Funds) for example, you would have read/heard/ even experienced the effects of the huge publicity surrounding big data and accelerated automation (in accounting) and the regulation tightening and the ATO offensive in the area of SMSF.

Depending on your pre-disposition you would have either looked at this in a favourable way – as a great opportunity to grow your business – by productising your services using automation and cloud-based tools (accounting) or by deciding to get into the “fixing your SMSF mess” legal services (law).

If you are looking at these market trends as a threat, then you would be considering turning into a mainly advisory business (accounting) or exiting SMSF altogether (who needs the hassle after all).

If you have/are doing any of the above, great – it means you are thinking long-term.

But it is not fully strategically.

You need to consider quite a few other things before you decide on your winning path of action.

You need to decide on what pieces you will need and how you are going to move them, to ensure a successful future for you and your business.

What to do next?

Frist we’ll look at what exact trends are shaping your industries and how you can use them to your strategic advantage, regardless of the way you see them – as opportunities or as threats.

We’ll be publishing both statistical information and analysis about your industry trends starting with accounting, legal services, financial planning and finance brokerage services.

If you’d like a copy of these industry reports and want to learn how to make better strategic decisions for your business take action here.

PS. My first boyfriend was a chess master but ironically, I did not learn to play chess then. I did, however, fall in love with strategy.  I’ve learned how to simplify it so it’s easy to understand and execute. Most business people don’t have time to learn complex moves; if you’re already in business you have to learn and do things fast and well.

I’d be happy if I have inspired you to learn and do strategy too ?.

The misunderstood case of multilevel marketing and networking

First – a simple message to all people involved in multi-level (ML) and network marketing:

This is not about bashing these legitimate marketing/promotional strategies which can be of benefit to any business; if done the right way.

As always it is about how you use business tools that makes a difference.

So here’s my story…

In the last few weeks I have received several messages from people connecting with me on LI, all about the same thing – inviting me to a networking event in town where you build your business the right way – through developing relationships and not through “throwing the business cards around”

Here is the problem.

When things, strategies, tools get abused people and businesses are taking a huge swing in the opposite direction to an extent, which renders those same tools meaningless.

Here are a few (brief)examples I am sure everyone can relate to:

1.      Workplace health and safety regulation – 20 years ago Australia had very little regulation in this area and a lot of people got injured but the jobs got done; nowadays there is so much regulation, much fewer accidents but the jobs don’t get done.

I once consulted a furniture manufacturing company in Adelaide and the operational manager (a South African) said this to me–

“In South Africa we assess the job for risks and then do it – here, we assess the job for risks to find reasons why not to do it”

This is an extreme case of overregulation, which has already hurt the manufacturing industry badly and has created a secondary black/grey market…

2.      Compliance in business (and in our life) – similar to the first example but it spreads outside of business into our life too – our childcare and school system, in our general day-to-day life where it seems that the systems are there to

“catch us doing the wrong thing rather than reward us for doing the right thing”

(excessive parking rules and fines comes to mind but this a different story I’d write about one day)

I can provide a lot more examples but you are getting the point of the pendulum swinging too far in the opposite direction…so straight back to ML and networking marketing.

Multilevel marketing companies, such as Amway for example, have, throughout the years developed a somewhat negative reputation due to their extreme marketing and sales tactics but also due to these common-sense marketing/business building mistakes:

1. Not everyone can build a multi-level marketing business (not everyone can build a specific type of business, only the business model that suits their goals, personality and skills best)

2. It is a business, not a hobby, and therefore you do not make your friends and family (being the easiest victims) your target market of customers (you risk to alienate them and many have)

3. It takes time, persistence and business-building skills to succeed in any business as well as in multi-level marketing (you have to be prepared for the long-run)

Due to failure to understand these common sense facts unscrupulous marketers were pushing the system to anyone, which clearly hasn’t worked.

As a result ML marketers, just people like you and me, were feeling the pressure to perform and succeed when everyone else, was seemingly achieving success and using push-sales tactics.

How has the pendulum swung from those early days to today’s reality of MLM practices.

Today MLM companies are using Linked In and other networks to recruit people; this is actually OK as it is a legitimate marketing tactics for any business.

What is not good is that this recruitment comes with a hidden agenda of selling a MLM business model hidden behind the façade of a profession business networking event; and focusing on developing personal relationships before doing/even talking about business.

Business and personal relationships are built on trust – short-term and long-term.

What is the point of building a short-term trust inviting you to a business even and then exposing the real reason behind the invite – to turn you into a member of a MML team.

I don’t know about you but this is far more damaging to the MML organisation and the person who is inviting you, than revealing the real intention in the first place, so you can make a decision based on facts.

Now moving onto networking.

Networking as a marketing tactic/tool doesn’t work.

At least not on its own.

Just going willy-nilly ?to networking events and hoping to build your business this way is not very productive even when you focus on patiently building relationships.

As a small business owner or manager or a professional you have limited time and resources so you need them to work hard for you.

You need everything you do to contribute to your overall goal of building a business or your personal brand.

And therefore, your networking needs to be subject to your goals and fit a specific strategy/ a plan.

In other words, what you need is strategic networking!

You need a clear picture about the best networks for you, what goals they can fulfil (source of potential clients, source of potential partners, source of education/professional development), what you can contribute there and what you can get in return.

Then you develop your plan of action.

So next time you get approached and invited to a networking event in a pub on a Monday night, ask this questions:

“Who is in your network, What can I contribute, What/how can I benefit from it”

If you don’t get the answers that are right for you, then don’t go.

Focus your resources. Build relationships somewhere else.

I value relationship building – it is a core marketing tactics in my business but it has a business purpose and plan.

I hope this answers some questions to experiences, people or events you have come across and have been wondering about.

Please share.

To your continuous success,

Denitza

PS – I have never been a Multi-level marketer despite the robust attempts ? of mostly decent people; some of those who have been transparent in their intentions from the beginning I now have as good friends

Apples not coffee

In life, as in business, questioning the accepted “truths” and trying new things pays off.

So did you know that …

Apples are more Potent than Coffee to keep you awake.

I can personally testify that coffee is a failure in the battle against sleep.

I’ve been known to fall asleep with a cup of coffee in my hand, or should I say on my dress during a late movie session at the cinema.

Next time  a bag of apples will be my go-to snack for the cinema.

Who said munching pop-corn could be so annoyingly loud :).

Doubt is NOT your enemy

Personal and business improvement gurus and programs focus on getting us to work on our fears, banish our doubts, “fake it till you make it” and so on.

But how effective is this and is it where we should be putting our energy (and money)?

If you are a tennis fan or at least have caught a glimpse of this year’s Australian Open you would have noticed not just the age defying performances of some of the all time tennis greats but also their winner attitude and beliefs.

This is what Rafael Nadal had to say to Jim Courier after another match win he added to the the 800+ he’s championed in his long and successful carreer:

I think I am not a very arrogant person so I always have doubts.
Even when I was winning I had doubts and even more so when I had injuries.
But doubts make you work harder!

It appears that it makes more sense not only to accept our doubts, fears, restlessness but to use them as our allies to push us harder and further on our path to success.

It does make more sense to focus on practicing our craft, building our business, trying new things and learning new skills than oto focus all this creative energy on trying to chase away an “enemy”, which could turn out to be our best ally.

What do you think/feel? What is your experience?

How Good Communication Can Help Your Business

“Most of us know the marketing concept of good communication. To make a message stick in the head of a future consumer, you need to deliver the message seven times using seven different channels. Why do executives think that to make a strategy stick, a boring speech delivered once  will be enough?”

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Having A Clear Business Strategy

Having a clear Business strategy and a high-performance Business Model is essential for achieving both your short and long term goals.

BOOK MY STRATEGY SESSION

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Don’t get lost

The well trodden path is not the only way to go…. Here’s how to think creatively…

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