There are many grey areas around the legal risks attached to social media use in business. But, say experts, the key to reducing these risks is a robust social media policy and thorough staff training.

Adam Franklin, marketing manager of web strategy company Bluewire Media, says social media risk mitigation starts with training staff about appropriate use of platforms such as Facebook and Twitter.

“It’s also essential as the business owner, you have access to the enterprise’s social media accounts and all the passwords that relate to them so you can change them and access the accounts if you need to,” he says.

Franklin says it’s also important to have a plan in place so that if something does go wrong, for example if a blogger posts negative information about the business, there’s a process in place to deal with this situation.

The plan should include information about the correct steps to take in response to a negative post, such as whether the most appropriate action is to leave a comment on the blog or the point at which the firm needs to bring in external public relations advice.

“It’s also critical to have an open culture in the business, so that if something does go wrong, or if a staff member makes a mistake using social media, staff feel comfortable volunteering this information so something isn’t left to fester on social media that the business doesn’t know about or staff are too scared to tell management about,” says Franklin.

Malcolm Burrows, legal practice director, Dundas Lawyers, says the key to mitigating the risks of social media is real-time, constant and consistent monitoring of the main platforms.

“You need to be monitoring, because if you don’t know what’s going on, you can’t hold your employees accountable. And if an employee is being negative about his or her employer on social media, it can be construed as grounds for dismissal,” he says.

He points to a case between the ACCC and allergy business Allergy Pathway Pty Ltd as an example of how important it is to monitor social media and remove any incorrect statements about the business, even when the statements are made by a third party.

The ACCC brought misleading and deceptive conduct proceedings against Allergy Pathway, which resulted in the business making various undertakings, including that it would not publish claims about its products’ abilities to reduce the effect of allergies across a variety of media.

When client testimonials that supported these claims appeared on its web site, Facebook page and Twitter feed, the court found Allergy Pathway had breached these undertakings and ordered directors to pay a $7,500 fine.

Aside from stringent monitoring about what third parties are saying about a business, Burrows says employers need to be conscious that improper use of social media by employees can leave them open to sexual harassment legal actions – even if posts are made outside working hours.

“Employer policies and duty of care extends to that environment,” he advises.

Vivienne Storey, general manager of law firm BlandsLaw, agrees with Franklin that key to properly mitigating not just legal but also reputational risks around social media is employee training.

“Social media is just another tool – and just like driving a car, you need rules to make it safe to use. Businesses have to understand that social media is a very public medium and that what’s said on social media platforms is permanent. Smart companies educate their staff about this and once people understand that, there’s usually a shift in the way it’s used”.

Storey says it’s essential for every business to develop a social media policy and highlight privacy and confidentiality issues to staff.

“Training works well in a discussion format, on an ongoing basis. As the laws in this area are still developing, it’s important to have an ongoing discussion about what the company’s policy is,” she says.

Storey uses BlandsLaw’s own social media policy as an example.

“Our policy is very free. We allow staff to access social media at any time during work hours and everyone here is allowed to talk on behalf of the organisation and about the organisation. But there are only six of us in the firm. If you’re a larger business, you probably don’t want everyone to talk on behalf of the business,” she says.

“Social media is just a tool, but it is a high risk, high benefit tool. What’s important is trying to help people understand how to manage those risks through education and clear policies”.

Property prices in mining towns across the country have skyrocketed as demand outstrips supply. But it pays to do thorough research before exchanging contracts to make sure you’re not left holding a worthless asset when the boom goes off the boil.

Terry Ryder, founder of the property research web site hotspotting.com.au says when it comes to investing in mining towns, it’s all about acknowledging the risks involved.

“There are opportunities and people have made money. But the risk factor is high. Often you’re talking about single industry and sometimes single company towns. When bad economic times hit, it can devastate small mining communities,” he says.

Ryder cites the twin towns of Hopetoun and Ravensthorpe in Western Australia as an example. BHP Billiton opened a $2 billion nickel mine outside Ravensthorpe in 2008, ostensibly guaranteeing a lifetime of prosperity for the region. Property prices appreciated sharply. But six months later at the height of the financial crisis BHP Billiton closed the mine. Almost 2,000 people lost their jobs and property prices plummeted.

There’s a litany of mining towns that have suffered a similar fate with Dysart and Moura in Queensland and Cobar and Broken Hill in NSW among the rollcall.

Nevertheless, savvy investors in places such as Moranbah, deep in the heart of Queensland’s coal country in the Bowen Basin and Port Hedland in Western Australia, iron ore and now coal seam gas country, have enjoyed substantial gains over the last decade.

“Ten years ago a house in Moranbah would have gone for $90,000. Today they sell for $460,000 on average. But those prices are only sustainable if the boom continues and there will come a point when the heat goes out of it,” Ryder says.

Investors who want to enjoy some of the upside of the property boom but don’t want to expose themselves to a scary bubble scenario would do well to invest in properties in major regional centres close to mines, advises Ryder.

“So rather than buy in a small town you might buy in Toowoomba, which has a diversified economy and doesn’t need the resources boom to be prosperous,” he says.

Another property expert who advocates a similar approach is Albert Wong, who runs the property research and investment site wealthruproperty.com. Wong has done extensive research into two mining towns, Orange in NSW, where Newcrest owns the world’s biggest gold and copper mine in nearby Cadia Valley and Gladstone in Queensland, an area where liquefied natural gas mining is booming.

“Orange has five things going for it. It’s a tree-change, foodie and growing tourism destination with fine dining restaurants, it’s only three hours away from Sydney and it’s a university town with the Charles Sturt campus in nearby Bathurst. It has hi-tech medical facilities at the brand new Orange Base Hospital and real estate is relatively cheap, although prices are creeping up,” he says.

Wong says an investment in Gladstone is more speculative compared to Orange because although some of the LNG projects have been approved, they are still in their infancy and Gladstone is much further away from a capital city.

Of course, a problem for investors is getting hold of a property to buy in the more popular mining towns. Caroline Quinn, managing director of Pilbara Real Estate, says in Karratha where her business is based in Western Australia’s iron ore region, there are currently around 170 properties for sale.

“It’s been at that level over the last few months, although things have started to change in the last four weeks as people get the sense interest rates are on hold, so there’s been a bit more activity lately. But there’s a zero per cent vacancy rate for rental properties,” she says.

Quinn says average weekly rents in the area are around $1,600. A quick peruse of her web site shows there’s not much on the market for less than $700,000.

As to whether the current appreciation in property prices in mining towns is more than a bubble, Professor David Brereton, director of the University of Queensland’s Centre for Social Responsibility in Mining
Sustainable Minerals says back in 2001, mining companies in the Bowen Basin were selling houses to employees for $50,000.

“If they’d predicted the mining boom they probably would have managed their housing stock differently. Is the current boom enough for private investors to take a long-term punt on residential properties in the area? I don’t know. Mining companies don’t make investments in these regions on the basis of a bubble; many projects have a 20-year lifespan. The market will come off the boil at some point, but at this stage, it’s impossible to say when.”

The Australian Financial Review, 15/09/11

Photo by Suat Eman.

Snag Stand is a new busiess that sells gourmet sausages in buns to stressed out shoppers and business-types. It’s a business that provokes a ‘why didn’t I think of that?’ response.

Philip Blanco, who came to Australia in 1996 from the US after rolling out Gloria Jeans stores around the world, including the first Middle Eastern store in Dubai in 1995, came up with the idea for Snag Stand after observing the great Aussie barbie.

He says “when I first came here people would invite me to barbecues and a mandatory item was the sausage. I couldn’t understand the attraction to what seemed to me to be a bland, greasy ordinary sausage. But they were everywhere, at school fetes, at Bunnings, and any time sausages were being grilled people were Zombi-like in their emotional reaction – they just had to have one”.

At the same time, Blanco observed butchers were staging a quiet sausage revolution, extending the standard array of Aussie sausage from pork, beef and – if the butcher was fancy – Italian, to include gourmet offerings with ingredients like rocket and other herbs.

“Australia is a nation of small business owners but cooked sausages were totally missing from the market – I thought this is an amazing opportunity or I’m completely stupid,” says Blanco.

Blanco has his hands in numerous business pies. He’s a director of women’s clothes retailer Seduce, which is about to open its first store in Dubai. He’s also a shareholder and former director of tea retailer T2, which he helped grow into a chain of 22 stores.  He’s also involved in the Mad Mex chain of restaurants with his business partner Clovis Young.

Through these enterprises, Blanco has built up a solid professional network within shopping centre conglomerate Westfield. So, after coming up with the concept for Snag Stand, he decided to share his vision when catching up with the director of leasing and a number of other colleagues.

“They wanted to know what my next project would be and I knew they would be a good sounding board, so I did the hat and cane routine and told them all about my idea for Snag Stand. It was so funny, at the end of the presentation I could tell they were thinking “are you kidding us or is this for real?’”

“A couple of them could almost see what I wanted to do, but Australians have grown up with cheap snags and there’s a love/contempt relationship with the sausage, so in the end I let it go. I was desperately seeking validation for my idea, but I kept getting divisive reactions,” he says.

But one of the Westfield team shared Blanco’s vision and when Westfield was developing the food court for its flagship Sydney Pitt Street Mall development he contacted Blanco and wanted Snag Stand to be a part of it.

“They wanted to do something very special with chefs doing food concepts rather than having all the usual suspects and they were looking for things that were unique. At the time I was about to open my Japanese wine bar called SakeSake and I had my hands full, so I didn’t want to do it. Then, they got in a food consultant called Future Foods, who gave it the thumbs up and Westfield said they would make it worth my while. So with my business partner Clovis’s support we went ahead”.

Snag Stand has been open in Westfield Pitt Street Mall since April 2011 and at time of writing, it was selling 3,000 ‘haute’ dogs a week. “We’ve exceeded our projections by more than 50 per cent,” says Blanco.

These are not just any sausage in a bun. Sausages are sourced from only the best butchers, for example Rodriguez Bros, AC Butchery and Pino’s. Even the bread has been specially sourced; Blanco selected three different buns for the sausages (a brioche, a rustic and a poppy seed bun) from a seventh-generation Israeli baker.

Although the second Snag Stand will open in Melbourne at Melbourne Central in mid-September, Blanco says there are no plans to franchise the store. “We’re all about maintaining a premium product and we will never be willing to compromise on quality,” he says.

http://www.smh.com.au/small-business/entrepreneur/entrepreneur-no-silly-sausage-20110822-1j6ba.html

As for other locations, Blanco says he’s considering his options. “It’s a step at a time and we’re committed to a premium sites strategy, but yes, there are a few other locations we’re considering at the moment,” he says.

As an exporter, it’s easy to think that successfully entering the Chinese market is a one-way ticket to millionaire status. But there is a range of hoops to jump through before a business can sell its products and services into the Chinese market. It pays to have access to in-country expert resources and advice to pave the way.

A veteran of the increasingly well-trodden trade route between Australia and China is BioProspect’s chief operating officer, Peter May. BioProspect develops and distributes natural products for humans and animals, including cosmetics, animal health products and natural pesticides.

May says when distributing products throughout Asia it’s important to understand that “every country is different. The Chinese market is very heavily regulated and you need to work with a local partner to understand what’s required.”

“Chinese regulators need to do their own testing and you pay for that. It’s also often easier to get national approvals at the local provincial level rather than in Beijing.”

May says before a business can start exporting products to China it’s useful to establish a well-developed product data package supported by production and testing results generated in Australia. “We work with Australian manufacturers to develop product data, and use this as a springboard into other markets. Entering the Singaporean market is not as difficult as other Asian markets and can be used as a stepping stone into other ASEAN countries.”

Much is made of the need to properly protect a business’s intellectual property when entering a market such as China so local manufacturers don’t copy the product when it’s at the testing stage and then rush the product to market earlier than the foreign business can.

To address this, May says BioProspect is developing trademarks for its proprietary formulations and the processes used to make its formulations, and to also give it a point of differentiation in the Chinese market.

“There are so many products in China you really need to be selling something different and special. We collaborate with research bodies and blend new technologies into our products.” Having such a highly specialised and technical range of products helps to prevent other businesses from copying BioProspect’s intellectual property.

May says foreign companies in China have also had some success challenging local companies that have copied their products, and that Western-style intellectual property laws to protect foreign businesses now exist.

Chinese born import/export consultant Lindy Chen, who runs China Direct Sourcing Services, agrees that it’s important to have a business of sizeable strength to expand into China and a genuine point of difference to be a successful exporter.

“China is a large country with 30 different provinces, which are really 30 different market segments – it’s not like in Australia, you can’t have the same strategy for different markets.”

She uses the example of one of her clients, a wine exporter, to demonstrate her point. “We had to firstly think about who would consume the product and consumer behaviour and where the consumer is located.”

“In Australia we might have a glass or two of wine with dinner at home, but in China, wine drinkers are more likely to be a group of friends at a disco. So the export strategy has to take this into account. You also have to think about the pricing strategy. Here a bottle of wine might cost $20 or $30 dollars, but when you take into account export taxes, consumption taxes and the margin for the retailer, the same bottle of wine in China could end up costing $200 or $300 dollars a bottle, which would make it totally unaffordable.”

One business owner who has been trying to enter the Chinese market for two years is Antonette Golikidis, director of organic baby skincare range Little Innoscents. She acknowledges that the attraction of the Chinese market is its huge size. “There are just so many business opportunities; if you’re successful then the potential for the business is massive.”

Golikidis has been working with a local Chinese distributor to address regulatory issues and says it takes between three and 12 months for product testing to take place.

“The testers need to ensure the accuracy of our product testing and that what we’re saying is correct and is in line with Chinese requirements,” she says, adding that “it’s all about who you know and making sure they know the right government people.”

Golikidis is looking for a distributor who can assist her to market her products and come up with a sensible pricing strategy. “In China, everything is about the brand. What we’ve got in our favour is that the Chinese like Australia and they think we offer a good, clean product. We’re hopeful consumers will factor this in when making a decision between our products and other products in the market.”

The Australian Financial Review, 27 July 2011

Elegant business planning and bleeding edge technology are not generally the first things that come to mind when thinking about the surf industry, but that’s exactly what Sydney-based surfboard shaper Hayden Cox has pulled off.

Cox is the founder of Haydenshapes Surfboards on Sydney’s Northern Beaches and the inventor of the FiberFlex technology that is currently making waves in the global surfing industry.

It’s hard to overestimate the way FiberFlex is changing surfboards, the design for which has long been dominated by foam ‘blanks’ with a wooden core known as a stringer that provides the board’s integrity.

Although FiberFlex boards are also made of foam, their strength comes from a parabolic carbon fibre frame that hugs the rail of the board and its epoxy laminate. The result is a stronger, faster, more responsive board.

Cox has recently signed a deal with the world’s largest distributor of surfboards, Global Surf Industries, which will see his innovative surfboard technology sold in 58 countries around the world.

Not a bad result for someone who started his career as a 15-year-old work experience shaper in a surfboard factory in Sydney’s beachside suburb of Mona Vale.

Cox got his first break when the owner of the factory he was doing work experience with realised he wasn’t there as part of an organised work experience program. “He was blown away I was working for free in my school holidays, and he helped me shape my first [surfboard] blank – he did one side and I did the other”.

After renting a shaping bay in high school to make boards for mates and a stint in Bali shaping boards for tourists Cox took the leap and borrowed $20,000 from a friend to set up his own surfboard factory.

This was the first step in establishing his Haydenshapes brand. But Cox soon realised focusing solely on that path wouldn’t allow him to sell to every surfer, so he came up with the FiberFlex concept so he could market his technology more widely.

“The brand and the technology can be custom made locally or mass produced offshore, offering a high quality product and good margins,” he explains.

Cox laughs when compared to Simon Anderson, the shaper who pioneered the three-fin thruster design that now dominates the surfboard market. “Simon pushed the boundaries when designing and surfing the thruster, and I’m trying to do the same with FiberFlex,” he says. Anderson is famous for not patenting his design, which is now used by almost every other surfboard maker in the world.

Although Cox says he has a “zero dollar marketing budget”, he has been able to create a buzz around his brands in magazines as world-class surfers such as Josh Kerr, Dane Reynolds and Craig Anderson have been pictured riding boards made with his technology, helping to create consumer demand.

“I shaped the first-ever FiberFlex board for Tom Carroll. He is an amazing person to work with when it comes to surfboard design”.

“But it’s really all about plugging away, speaking to retailers and getting boards to shapers for their team riders. There’s also really good word of mouth around our boards,” he says, explaining that he was able to start building a name in the US market thanks to a well-connected contact who was able to introduce him to the major players in the US.

Cox concedes the financial crisis was a tough period, but he has developed ways to bring cash into the business as fast as possible. For example, customers pay upfront for custom-made surfboards, rather than when they are finished, in return for guaranteed manufacturing in two weeks.

Cox’s boards are manufactured in Australia, Japan, the US and Thailand. The partnership with Global Surf Industries has enabled Cox to manufacture in Thailand and supply the global economy from one manufacturing source. “We also offer locally-made custom boards through shapers around the world”.

His ability to sell the FibreFlex technology to shapers means that Cox can target all surfers in the marketplace. “But really, it’s all about having fun – there’s just something about being in the salt water that makes you happy. I make surfboards that are fun to ride,” he says.

Cox is featured in a new online book called In Hindsight published by Nokia that explores the stories of people building businesses.

http://www.smh.com.au/small-business/entrepreneur/surfboard-shaper-goes-global-20110630-1gs8f.html

These reviews are a new initiative for the ATO and on the surface, are designed to ensure any controversial and uncertain issues large businesses have in terms of complying with tax law are aired and explored prior to the annual lodgement of their returns.

In the letters the ATO confirms the list of tax issues on which it is focusing this year as it conducts audits.

The list is extensive and includes: major or unusual transactions, cross-jurisdictional transactions, share buy-backs, capital raisings, refinancing and changes in internal accounting policies. Pretty much all the usual activities in which corporates engage.

Ashley King, who leads Deloitte’s Tax Controversy area and is himself a former ATO Senior Assistant Commissioner says, “most of the largest corporate taxpayers are pretty much seen as high risk and there are around 19 entities in the highest risk group.”

King says the key issue on which the ATO is concentrating is “international finance. They are concerned about high levels of debt and businesses paying high interest payments that can shift profits to another country.”

Another area on which the ATO is focused is structured finance transactions that use accounting and tax arbitrage to deliver a positive outcome for the business.

“The ATO is concerned that Australia’s tax base is eroded through these structures,” he says.

Transfer pricing is a perennial area of concern. “Corporations can use different pricing in different countries to tip revenue into other jurisdictions, so transactions need to be done at arm’s length value,” King advises.

According to King, the ATO is also looking at businesses that shift functions such as marketing or sales to another country. “The ATO is concerned about businesses that restructure because they think it could be a tax issue – but this is hard to prove and these types of situations involve complex audits and genuine commercial objectives.”

Frank Drenth, executive director of the Corporate Tax Association, says although the ATO’s rhetoric is all about co-operation and transparency “there are concerns the process isn’t really co-operative.”

Drenth says processes around the pre-compliance reviews are still being worked through, but that the idea of a review of a business’s tax compliance “raises questions about the self-assessment regime. There is some consultation going on between the ATO and companies, but I’m not sure the approach is completely settled.”

“There are also concerns about providing information on a quarterly basis; this increases the cost of compliance for businesses and also requires them to make early judgments about what their potential tax issues are. We say they shouldn’t be expected to read the Commissioner’s mind. It’s fair to say not everyone is entirely relaxed about the process,” he says.

“We have asked the ATO to think about acting in a way that encourages companies to disclose uncertainties around their tax position and to give businesses confidence they will be treated fairly, not just in a pro-revenue way. There is real apprehension within companies that if they act co-operatively with the ATO, it will just come down like a tonne of bricks on them.”

According to Drenth “boards and CEOs want a positive and co-operative relationship with the ATO but that doesn’t mean all companies are relaxed about the ATO’s compliance work.”

King says Australian businesses should be aware the ATO works closely with its global counterparts.

“Co-operation between different tax authorities has dramatically increased and the effectiveness of exchange of information has improved significantly,” he says,

“It used to take months to write a letter to a  tax authority in another country and receive a response, but now things can be done in weeks or days. And different countries are doing simultaneous and joint audits on multi-national corporations and working on the same issues at the same time. The whole landscape has changed.”

The Australian Financial Review, 14 June 2011

http://www.freedigitalphotos.net/images/view_photog.php?photogid=721

Iconic circus company Circus Oz has embarked on an intriguing and thoughtful social media strategy other creative businesses should consider. It has taken a long-term perspective of building relationships through social media and plans to make the most of its extensive, engaging video and photo library as it builds its online presence.

The company has recently started a three-year project in conjunction with RMIT to digitise the reams and reams of footage it has captured since the circus was born in 1978. The project is an extension of the success Circus Oz has had over a number of years with its social media activities.

It has had a Twitter account for around two years as well as a Facebook page, and has been posting videos on You Tube for some time and run photo competitions using Flickr. Circus Oz also encourages audiences to tweet from shows and invites prominent members of the Twitter community to opening nights for a number of years.

Marketing manager Ebony Bott says “Circus Oz has been really good at creating content; we’ve got all this back footage and there are so many stories to tell.”

Alongside this project Circus Oz is developing its social media strategy so that when the digitisation project is launched, the business will already have developed a strong relationship with a captive online audience.

“Initially we’re looking at further developing our Facebook and Twitter profile to build our relationships and share our personality. And if we’re successful at building relationships, that will ultimately drive ticket sales,” explains Bott.

Circus Oz fans love finding out what goes on behind the scenes, so some of the content it is sharing through social networking includes images from the 2011 photoshoot of its new show Steampowered. “We’ve got some amazing gadgets and costumes and the audience loves to see what goes on behind the scenes,” she says.

At the core of the strategy is a focus on the audience. Bott says “with social media, it’s all about the people who are part of the community and involving them in the process. We also have a strategy that underpins the campaign – it’s not about saying ‘what should we post today?’”

As an example of involving the audience, Bott says “one of our Steampowered characters is a Young Einstein-type who is obsessed with anything that spins, be it a bicycle wheel or a lazy Susan at the local Chinese restaurant – you wouldn’t be surprised to find him in your washing machine. So we’re calling on the audience to upload photos of images of spinning things to inspire his next act.”

Circus Oz also has an international following and tours globally, so to engage with its international audience it is creating a narrative on Twitter about life on the road. “We might challenge the cast to find someone named Bob in every town they visit and ask him a specific question, and then use the responses in our Twitter feed,” says Bott, who stresses that at this stage, Circus Oz’s future social media strategy is still very much a work in progress.

Deloitte Digital CEO Peter Williams, who is on the board of Circus Oz and who also provides the company with informal advice about its social media strategy, says the beauty of social networking for small businesses is that “it doesn’t have to cost a lot of money. It’s not about spending a fortune on hardware or software or production; it’s about great engagement with your audience. it’s simple and easy to use your iPhone to take a one minute video that you can post on your Facebook page.”

According to Williams, it’s also important to combine online and offline channels to get the most out of your marketing program. “A skateboarding shop, for example, can use its physical presence to advertise its Facebook site, which is a great way to reinforce your online profile.”

Bott agrees successful social networking is all about constantly reinforcing your presence with creative content to help cement relationships with the audience. “By the time we launch our digital archive project we will hopefully have developed a really strong online following and reputation we can use to create interest in the project; it’s a really exciting time for Circus Oz.”

http://www.smh.com.au/small-business/managing/circus-oz-puts-the-magic-into-social-media-20110506-1eb3r.html

Flash forward a year and Walters is now supplying cookies to 80 Virgin Blue planes, doubling her business overnight.

It’s an achievement that has come about through serendipity and hard work, and has required Walters to put considerable thought into how best to scale up her business.

Intriguingly, Spotted Cow Cookies didn’t tender for the airline contract. “They approached me,” says Walters, who believes her cookies were seen in one of the 200 cafes she supplies around Sydney, or in one of the cafes she supplies in other states, by someone in Virgin Blue’s management team.

“They contacted me last August wanting samples. We sent them a box of pre-packaged cookies, which we had only introduced into the range in July because it’s so expensive to distribute branded packaging,” she says.

Indeed, the investment required in packaging and a machine that wraps the product led Walters to sell a portion of the business to raise the required funds. Her investor and now business partner is her former bookkeeper, which can only be a vote of confidence in the business.

“She has as much passion for the business as I do – it’s lucky we found each other,” Walters says.

Virgin Blue contacted Spotted Cow Cookies when it was developing its new Luke Mangan-designed menu. It was four months from the initial point of contact until Virgin Blue confirmed it wanted Spotted Cow Cookies as part of its menu and placed its first order in February this year.

As a result of its relationship with Virgin Blue, Walters has had to dramatically scale up the business, although the infrastructure was already in place for her to do this, thanks to the investment she was able to make as a result of the injection of funds her new business partner brought to the table.

She says the fact that she was able to scale up the business in January, traditionally a quiet time for the business, also helped her get ready to service the new contract.

“We used January as a buffer to start implementing new systems, which are pretty basic really. We don’t use computers and everything is controlled by my supervisor and me. We manage production three to four days ahead because the facility doesn’t allow us to work a month ahead. Plus one of the reasons I started the business was to make fresh produce, which is why we manufacture to order,” says Walters.

“Before we would make 2000 choc chunk cookies in a run and really it doesn’t take much more effort to do three times that,” she says, adding that “ we used to do 12,000 cookies a week, now we do 25,000 to 30,000 – which is a big jump.”

Although the business has doubled in size, Walters says because she’s only dealing with one additional customer, albeit a large one, it’s manageable.

“Before I started the business I had no manufacturing experience – which means I had no pre-conceived ideas. I just try things and if they work, I run with it. I had three gentlemen come in the other day who are experts in manufacturing – they said I should give myself credit because I’m doing well just following my instincts.”

Walters’ advice to other small business owners is to “listen to the advice everyone wants to give you – but realise you don’t have to take it. I was part of the Commonwealth Bank’s Women in Focus conference last year, where there were 40 of us from different industries sharing stories. It made me realise that although we operate in different areas, everyone experiences similar things. You can learn so much from other people and it can get lonely in small business. Which is why it’s so important to reach out and find out what other small business owners are thinking and doing.”

Here’s the link: http://www.smh.com.au/small-business/my-business-success/spotted-cow-cookies-takes-off-20110325-1c9ch.html

“Since I started using Ad Words six years ago my business has tripled; I now get 95 per cent of my business through the ‘net,” says Raymond Mellick, more commonly known as Amazing Raymond the Tattoo Man.

Thanks to his online advertising campaign, Amazing Raymond’s tattoos are now used by a well-known hardware chain and his tattoos have been used by Robert De Niro in his coming film The Killer Elite and by the cast of TV show City Homicide. Other high profile clients include Fox Studios and New Zealand’s South Pacific Pictures.

He also has a longstanding association with Melbourne’s Crown casino, for which he produces special tattoos for events such as AFL grand finals, Mother’s’ Day and New Year’s Eve. He also works with many corporate clients, creating tattoos of their logos for company events.

Initially, Amazing Raymond worked with digital agency Yodel Australia to set up his Google Ad Words campaign, but he has subsequently run his campaigns by himself.

The ‘net works so well for him as a marketing tool because he has a number of different products and aliases and can run individual campaigns for each of his product lines.

For example, he runs campaigns around his Temporary Tatoos Guru site, and for his Amazing Raymond site.

“Because it’s so instant and measurable you can tweak a campaign and see results straight away. I also ask all my customers how they find me, through a sponsored link or through an organic search, and it’s usually through a paid search,” he says.

According to Amazing Raymond, success with online advertising is all about trial and error.

“I started with a $30 a day budget, then gradually increased it to $40 a day, then $50 a day, and the new business I get through online advertising now covers the cost of the campaign plus a lot more.”

Raymond, who has a marketing and graphic design background, developed his Melbourne-based business more than 20 years ago after seeing a similar concept in the US.

He spent 14,000 hours developing cosmetic formulas that are safe to be applied to the skin, as well as a screen-printing formula. All the inks and papers he uses to make his temporary tattoos are tested to Australian standards.

“My main philosophy is to give people a fun way to have a tattoo without them having to commit needle to skin,” says Amazing Raymond, who has no real tattoos.

“Kids get boozed up and choose a design they haven’t even thought about. Then they find they have trouble getting a career job because despite what they think, tattoos are still taboo. If they go for a temporary tattoo initially they can at least make an informed decision if they want something more permanent.”

Amazing Raymond’s advice to other small businesses thinking about embarking on an online advertising campaign is “just do it”.

He says “you can’t really make a mistake because you can change your campaign whenever you want. With Google Ad Words you can work out how much you want to spend and call for expert advice whenever you need to. My secret is to check how my campaigns are going once or twice a day. That tells me which keywords are working and how you need to tweak them – it’s always a work in progress.”

But, says Raymond, make sure you have strong customer support systems in place to be able to handle an increase in business as a result of an online campaign.

“I always make sure I tell my customers that their order has been received and let them know it’s on its way and give them a tracking number,” he says.

“Online advertising has transformed my business and put me on the world stage; I now get lots of overseas orders thanks to my online ads. It’s amazing!”

Follow the link to the story…http://www.smh.com.au/small-business/tattoos-get-amazing-exposure-online-20110330-1cfn4.html

I have a friend, who we’ll call Charlotte, who decided to investigate an investment in laser hair removal to replace her monthly trip to the beauty salon for her ritual waxing treatments (read torture).

I hear what you’re saying. How could the subject of waxing be even remotely within the field of potential story topics for a column called Savvy Investor? Bear with me and you’ll see (although let’s face it, this blog hasn’t been bang on topic for some weeks now, although it always has something to do with money).

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Charlotte decided to investigate laser hair removal because the return on investment has more longevity than waxing. Waxing lasts about four weeks, while some laser clinics offer a lifetime guarantee the hair will never grow back, although my investigations reveal a six monthly top up to get rid of the odd, unwanted straggler is more realistic.

Doing her research, Charlotte contacted two different clinics and discovered significant economies of scale were on offer if she decided to invest in multiple treatments.

The premium lower leg package offered by the first laser hair removal clinic covers 10 sessions and costs $2400. If you buy a second premium package for a smaller area of hair removal, you get the third premium package for free, with the total cost of all three packages being $2820. In a nutshell, buy half-leg and underarms and they thrown in a bikini line.

Charlotte discovered that compared to the cost of waxing, she could recoup the cost of laser hair removal in two and a half years. (It costs her $90 a month for a half leg, underarm and bikini wax, which equals $1080 a year. So $2820 divided by $90 equals 31 months, or two and a half years.)

Regular waxers may think $90 is a lot for a half leg, underarm and bikini wax, but as Charlotte says “in my long history of waxing, I’ve found that the more expensive the salon, the better the technicians. I recently went to a cheap salon and they used terrible wax…basically took the hairs off at the surface. I had to go for a wax at my current (expensive) place a mere three weeks later – very annoying.”

Charlotte says “in a way, the length of payback doesn’t matter…the laser hair removal means I will hopefully have at least 40-odd years hair-free. My ‘investment’ isn’t producing any kind of return…but it does ultimately save me money, time, hassle and pain, which are rewards of the non-monetary sort.”

The second operator Charlotte contacted had seemed less expensive than the first. Based on their advertising, 10 lower-leg sessions appeared to cost $1490. But as they say, you get what you pay for. Charlotte turned up to the second place for her initial consultation to find a woman cleaning the front desk. This woman failed to introduce herself, but asked whether Charlotte had been there before.

Charlotte answered in the negative and the woman continued to ask questions, all while cleaning the reception desk. Charlotte was perplexed as to who this woman was – a laser technician, a receptionist or a cleaner? And was this her consultation? So she queried the lady. The conversation went something like this.

“So is this my consultation?”

“Yes,” says the woman, still cleaning the front desk.

“Who actually performs the laser therapy?”

“I do.”

“And what qualifications do you have?” asks Charlotte thinking to herself, are you really qualified to wield something that has the potential to cause third degree burns on, let’s face it, some pretty delicate skin areas?

“Qualifications…what is qualifications?”

“You know, have you had any training? Any diplomas? Certificates?”

“I am beauty therapist.”

“So do you have beauty therapy qualifications?”

“I am beauty therapist long time.”

Hmmm.

At this point Charlotte backed slowly out of the room, never to return. The next day, she called the head office of this particular outfit to explain the unfortunate incident, the highlight of which was that the ‘therapist’ had never even examined her legs to confirm whether laser would be appropriate. She was told a general manager would call her back within 24 hours. The call never came.

Charlotte has subsequently decided to invest with the first laser clinic and give the second one a wide berth. But the message is clear. Do your homework before you decide to give your cold, hard readies to a laser clinic. A good quality laser hair removal clinic will likely deliver a more permanent result than waxing and you’ll also be able to amortise the cost of the investment over time.

But if you go with a cheapie outfit without any sort of professional standards, it could cost you a lot more in corrective surgery and hospital bills than regular trips to the beautician for a wax. You have been warned.

First published at http://www.smh.com.au/money/on-the-money/blogs/savvy-investor/what-price-beauty/20101222-195dk.html

I bought Mum a hard to find perfume from a US distributor – something I couldn’t have found in a normal retail store in Australia. And various brothers got magazine subscriptions, again ordered online. Let’s hope the Productivity Commission doesn’t spoil the fun by making us pay GST on overseas online purchases.

Everything I ordered online was delivered pronto – with email updates about the precise point where my merchandise was in the supply chain between the time I placed the order and it being delivered.

Granted, Peter Alexander was out of stock of quite a large number of sizes when I placed my order – but because the range is so big if they were out of stock in, say, a boys size two in one line, that size was in stock in another line. It sure beats schlepping around the shops on a hot December day when I’d rather be at the beach.

And when I discovered I’d ordered the wrong sizes for two of my godchildren, returning items of the wrong sizes should have been as simple as a trip to the local post office to post them back. Except I couldn’t find the receipt. Which brings me to my next point.

How good is eBay? Devotees of this online shopping platform will be familiar with the expression BNWT – for the uninitiated this is eBay code for items that are ‘brand new with tags’. Which is what I had in my possession, thanks to the fact I bought the wrong sizes.

As I couldn’t return the PJs to Peter Alexander without the receipt I decided to list them on eBay. They fetched almost as much as I paid for them when I ordered them through the website, which I reckon is fair given I probably deserve a penalty for being stupid enough to lose the receipt.

While we’re on the subject of Christmas presents, how do you know when to stop? In our family, we have the concept of your main present and then what we call ‘secondaries’ – smaller presents we buy, well, I guess we buy them to keep the economy ticking along. Joking! I guess we buy them because we’ve found something extra we think a parent/sibling/significant other can’t do without. Oh, alright. We give them because one present just doesn’t seem enough.

I know a lot of people do the Kris Kringle thing if they have a big family, each person buying something large for only one member of the family, usually with that person’s input so they get something they actually want. I guess that’s a good idea, but it would never cut it in my family because it takes all the fun out of Christmas. As does just giving people money to buy something of their choice. We’ve made that mistake a few times and it’s always a real let down.

On Christmas Day we generally open each present one by one, which works for us because we all put a lot of thought into what we get the other members of our family and opening gifts one by one means each present, and each present giver, gets due attention. Which is as it should be because it’s so rewarding knowing you’ve given something to someone that they actually like.

But my best experience this year involves someone I do some work for from time to time. This client is a genuinely lovely guy who always includes me in all his office events, which is so thoughtful given I’m a freelancer and work on my own. I really wanted to get him something nice and mentioned this to my Mum. She suggested I have a chat to her boss, a wine buff.

Mum’s boss was stoked to help me choose a nice wine for my client – in Mum’s words “he’s on a mission, like a kid in a candy shop.” And not only did Mum’s boss offer to help me select the wine, he also volunteered to pick up the wine for me. If you ask me, that’s the true spirit of Christmas – great gift ideas packaged with a big favour. And once again, I didn’t have to brave the Christmas crowds to get the perfect present. So far, this Chrissy is shaping up to be a beauty.

Original article: http://www.smh.com.au/money/on-the-money/blogs/savvy-investor/2010-the-year-of-online-shopping/20101218-1911z.html

Ideas and grants

The Tasmanian state government has an enviable grants program to support early stage businesses, for example the Enterprise Growth Program, which funds the cost of business advice, the Tasmanian Innovations Program, which helps businesses commercialise inventions and an export markets assistance scheme.

There are also business incubators such as Technopark and In-tellinc to help nurture fledgling enterprises.

Doctor to entrepreneur

One Tasmanian entrepreneur is Byron Teu, the founder of Sentralize.com. The business sets up websites around a particular theme. These sites scour the web for content related to the theme and aggregate online information about the topic. For example the business created willitend.com, a site that collates information including articles, social media posts and videos pertaining to all the major wars being fought at the moment, organising information on a country-by-country basis.

Intriguingly, Teu was training to become a general practitioner before he decided to take a break from medicine to focus his attention on his business.

“I started developing the business in medical school…but it wasn’t until January this year that I decided to focus full-time on Sentralize.com,” he says.

Going out to the world

Paris Buttfield-Addison is another successful Tasmanian entrepreneur. He is a co-founder of Secret Lab, which develops online games and applications sold around the world.

The University of Tasmania PhD candidate says: “we were inspired to develop the business with the arrival of the iTunes app store; one of our games, a puzzle game called Culture, was among the the first in the world to be listed on iTunes. It was successful enough for Secret Lab to continue to develop online games.”

The business continues to develop games and applications for iPhones and iPads and with clients overseas and all around Australia, Buttfield-Addison says he has no plans to leave Tasmania. “We want to keep growing in Australia and increase our presence on the mainland.” He says when working with overseas clients, being from Tasmania gives the business an advantage.

“They see Australians as a novelty and Tasmania and Tasmanians as even more of a novelty.”

Tassie veteran

A veteran Tasmanian entrepreneur is Greg Koennecke, CEO of Vision Instruments, which is developing a portable retina eye camera that will be used to screen for eye disease in the developing world.

Koennecke’s story is a little different to that of Teu’s and Buttfield-Addison’s in that he has been in the process of developing a commercial-ready camera for the past 10 years and expects to have the first production cameras ready within the next two months.

His initial focus is developing the product for use in the Australian indigenous community, but he also eventually wants to export to other markets including India and the US.

Koennecke has been able to secure a number of different grants over the life of the business, including a $50,000 Commercialising Emerging Technologies grant, a $180,000 commercialisation-ready grant and $230,000 in support from the University of Melbourne’s Centre for Eye Research Australia (CERA). He’s also just received a $104,000 Commercialisation Australia grant to finish the product, but says that despite the much appreciated funding from AusIndustry and CERA, lack of funding has held up the project.

Another issue is the requirement of many grants programs to match the grant dollar-for-dollar, a hard ask when, like Koennecke, most of your personal funds have already been spent developing the product. He estimates he has contributed $600,000, including sacrificing his salary, to product development so far.

Koennecke’s advice to other entrepreneurs is to “expect everything to take three times as long as you think it will. You also need to multiply your most conservative cost estimate by three. And don’t expect your first prototype to be perfect – the idea is to just get something out there.”

Staying put

Like Teu and Buttfield-Addison, Koennecke says he’s committed to staying in Tasmania.

“You can do anything here and you’re only an overnight delivery away from Sydney and Melbourne. There really is no reason not to do research and development in Tasmania. It’s a great lifestyle with just enough technical expertise and services to support small technology development start-ups.”

Original article: http://www.smh.com.au/small-business/startup/startups-blossom-in-tassie-20101117-17x8g.html

Instead of returning to the corporate sector, Clive decided to use his skills to give back to the community, rather than use them to make even more money. “I saw friends in a similar position continue working in well paid jobs, but that’s more about ego than anything else. A lot of the time if people are not involved in the business side of life they don’t know what to do with themselves – but a lot of people could actually choose not to make more than they really need,” he says.

Rather than re-enter the rat race, three years ago Clive developed the Yoga Aid foundation, which he calls “a trusted brand for giving within the yoga community worldwide.”

Yoga Aid has just celebrated raising its first million dollars and Clive is now running charity-based events for the foundation in more than 12 countries around the world. A recent Australian Yoga Aid event raised $176,032 for groups such as kids’ charity Barnados, Sunnyfield, which supports people with intellectual disabilities and the Nelune Foundation, which helps cancer patients.

Clive is also about to become one of first three people in the world to graduate with a Master of Wellness from Melbourne’s RMIT.

So how did Clive end up in a position in which he has been able to give up paid work and focus on giving back to the community?

Clive was one of the early pioneers of the internet in Australia and in 1995, at the tender age of 32, became the Australian managing director of the internet darling of its day, Netscape.

This was the launch pad for a successful IT career and, after completing an MBA, he moved to the US to work with a number of high-profile internet businesses.

But after five very successful business years came a very painful divorce (which he blames on his lack of life balance) so he decided to return to Australia. At that point in his life, Clive was 42 and questioned what he really wanted in his life.

“It’s probably the age when most people just want to make more money but for me, I didn’t want to go back into a world that caused the divorce in the first place,” he says.

“I just didn’t want to run my life that way again. I was craving more balance and it was time to give back, especially as I had been given so much in my life. I don’t miss the corporate life at all; compared to what I’m doing now it’s trivial.”

So Clive focused his internet business skills on developing Yoga Aid. He still keeps his business skills fresh as an angel investor in the tech sector but his true passion is developing giving-based projects.

He is especially excited about his new project for 2011, Give Karma, which involves a world tour of giving with a high-profile American based rapper, MC Yogi.

“It’s all about combining the fun of touring with giving and we start in March,” he says.

“People think they don’t have choices in life but they do. When I realised that it started me on this path. I don’t regret my corporate life but what I’m doing now is much more fulfilling.”

So I thought in honour of this great event I’d do a little analysis of the list to find out the type of people who are most likely to become billionaires, including the industry they work in, where they live, their age and gender. I’ve done this as a public service, of course, so those of us who’d like to be billionaires can do something about turning ourselves into one.

OK, industry first. It came as a surprise given the massacre that’s gone on in financial markets over the past few years that if you’re a billionaire you’re most likely to be working in finance. Of the top 100 billionaires on the list, 26 work in areas like hedge funds, investments or leveraged buyouts. Hedge fund tycoons dominate this pack with 11 of the billionaires in this industry.

Also interesting given no one’s supposed to be buying anything, the second most popular industry sector these billionaires work in is consumer goods, with 17 billionaires in this category. Think Walmart, Nike, Ralph Lauren and Estee Lauder, as well as people involved in ‘candy’, pet food, hair products and – more understandable given the economic climate – tequila.

Media and IT barons also dominate, with 13 geeks named by Forbes as billionaires and 14 media freaks on the list including, of course, our very own Rupert Murdoch (equal number 38).

But funnily enough, he’s not the only billionaire with Australian connections to be among the top 100 billionaires named by Forbes. Blair Parry-Okeden, who inherited a considerable interest in diversified media business Cox Enterprises, which owns newspapers, 15 television stations and 86 radio stations in the US, is coincidentally also at equal number 38 on the list. Parry-Okeden inherited this interest from her mother Barbara Cox Anthony, whose father founded the firm.

What’s so striking about Parry-Okeden’s entry is where she lives. Scroll down the list and it’s full of New Yorkers – by far the most dominant locale for billionaires; 18 of the top 100 live in the Big Apple. There are five billionaires from the top 100 who live in Texas. The Californian towns of Palo Alto and Atherton are also represented on the list. But a flashy neighbourhood is not for Parry-Okeden. Her address is the country town of Scone, NSW.

The average age of the top 100 billionaires is 64.7 years, but there’s a wide spread of ages on the list. The youngest is Facebook’s Mark Zuckerberg, who’s 26 (number 35 on the list) and the oldest members are two ninety-year-olds, Cox Enterprise’s Anne Cox Chambers (Blair Parry-Okeden’s aunt) and Frederik G H Meijer (respectively numbers 19 and 57). Meijer made his fortune pioneering hypermarkets in the US. And the top 100 have 6470 years’ experience between them.

It goes without saying most billionaires are male – only nine of the top 100 is female.

Let’s put together a picture of the typical billionaire then. He’s likely to be in his mid-sixties, own a hedge fund and live in New York.

So if you have aspirations to be a billionaire this is what you should be trying to turn yourself into.

* For those not attuned to commercial radio it’s a line from Billionaire, a song by Travie McCoy that’s currently on high rotation.

Article from: http://www.smh.com.au/money/on-the-money/blogs/savvy-investor/moneys-funny/20100927-15st0.html

Most people who launch a start-up venture are aware of the heavy sacrifices they will need to make for their business to really fly. But few have taken a break from a career working as a medical doctor to focus on developing a start-up IT company.

Byron Teu, founder of Sentralize.com, is one such person. Byron is the poster child for how to manage the transition from working full-time for someone else to working entirely on a start-up venture.

This is not an easy transition to manage – how do you work and at the same time develop a business? Can you move to a part-time role while you’re setting up shop? What sort of support will you get from your boss? And how do you know when is the right time to completely leave your job to focus on your venture?

Making a choice

Teu describes Sentralize.com as an ‘invisible survey’ tool. Sentralize.com develops websites around a theme that captures the zeitgeist – for example the business developed a site called obama4.me, which centralised all the information related to President Obama in the one place, be that news articles, You Tube videos, social media posts and other online information, in real time.

Despite studying at medical school for six years and then training for a year as a registrar, Teu decided to take a break from medicine at the end of 2009. Before that, he had been splitting his time between his medical career and his IT venture.

“We registered the business while I was at medical school, planned what we were hoping to develop, researched our value proposition and whether we were solving a commercial problem,” he says.

“We also looked at whether anyone else was doing something similar and identified our market.”

“But it was hard to be disciplined with the business when I was still working in medicine,” says Teu, who funded the business entirely from his own savings, working three jobs while also studying and developing his business.

“It wasn’t until I could focus on the business full-time that things really started to take off. At the same time I also found a mentor who was able to ask all the hard questions – things like ‘what will the business look like in three months?’ – which has also helped us push the business further.”

Asked whether he regrets taking a break from medicine Teu has this to say: “Medicine is a very stable career – but as someone said to me, the internet is always changing but it’s not likely that God is going to upgrade the body any time soon.”

Keen to escape

Another brave soul who left a good job working for someone else to focus on developing a start-up is Kath Purkis, founder of fashion e-tailer Le Black Book.

“I had a dream job working for an Australian designer but I knew working for someone else was never going to completely satisfy me,” says Purkis.

Although Purkis started researching the business while she was still working full-time, after saving up enough from her job to fund the first six months of the business’s life, Purkis left her role. “I decided I needed to focus 100% of my brain power on the business,” she says.

Mike Casey, founder of GradConnection, an online portal of graduate jobs and internships, started his business while working as a graduate for Westpac in New Zealand, along with GradConnection’s two other founders, who were colleagues.

Casey says, “Eventually I was spending so much time on the business it was unfair to Westpac.” So the group not only left their stable jobs at Westpac to start the company, they also relocated to Sydney to build the business.

“When I was still working I talked to a large number of people about our idea and people wanted to meet during the day, which was a real conflict when I had a full-time job. After working a full day at Westpac we’d work until midnight or later on the business; I was always tired,” says Casey.

“But when I made the switch I was able to take meetings at any time. I also got more respect because people could see we were committed to the business. Leaving my full-time role also allowed us to grow the business much faster,” he says.

Preparing to take the leap

Business experts say the biggest mistake people make when they transition from a permanent role to running their start-up full-time is underestimating the funds they will need to get the business off the ground.

“Ninety per cent of people will run out of funds and have to go back to working in a full-time job,” says Andrew Pride, founder and principal business coach with Smart-BIZ Consulting. “You really need funds behind you because most people die of cash strangulation,” he says.

Pride’s advice to people who are still working full-time and developing a start-up on the side is to do as much preparatory work as possible while still working.

“Think about running the business on weekends and validating the idea while you’re still employed,” he says. “You might also be able to work part-time while you’re setting the business up.”

What your boss is thinking

And, while you might be full of enthusiasm for your new venture, it’s important to consider your employer’s perspective. Diane Terzian, a partner with chartered accountants JI Moore & Partners says, “Should one of my employees leave to start their own business I would be happy for them as this is an exciting time for them to expand their horizons and progress their career. Hopefully they take with them knowledge and skills they have developed while working for us.”

“On the other side I would also be disappointed in losing part of the team and having to find someone to replace them. The key risk in losing a staff member is if they start a business in competition or move to a similar business as they may attempt to take clients.”

“To mitigate the effect we have implemented business restriction clauses in our staff’s employment contracts, but more importantly we try and keep our clients close to the firm by making sure they have a relationship with a partner as well as other staff to reduce the risk of losing business.”

The key message for budding entrepreneurs thinking of leaving their full-time role is this: make sure you have enough money behind you to fund the business for at least six months after you stop earning a salary and do as much planning and research as you can while still working.

And only leave your full-time role when you are confident there’s a genuine commercial market for your idea. If you can tick all these boxes, it might be time to take the risk, leave your job and focus on the business full-time.

Five top tips on planning your start-up while working

1. Be sure to define your value proposition while you still have a job.
2. Do initial research to identify your market while still employed.
3. Save as much as you can to put towards business development while you are still working.
4. Make sure your business idea has the potential for broad commercial application before resigning.
5. Think about how you might be able to move to part-time work while developing your business before taking the decision to resign permanently.

Article from: http://www.startupsmart.com.au/planning/2010-10-11/planning-your-start-up-escape.html