Posts

Australians are waking up financially

/in , , , , /by

here’s a Brisbane business building tip!  The majority of Australians want advice without strings attached.  People simply want financial wellbeing without all the rigmarole. Because consumers are mistrustful of financial planners they are researching more and paying more attention to financial matters that they believe are relevant to them.

People are starting to take more notice and become more financially aware.  Whilst the majority of Australians are not financially trained or skilled, they are starting to ask questions and challenge the status quo.

Typically, people want to know:

  • How they can get a better superannuation deal and take advantage of government incentives to top up their retirement savings (after realising that their superannuation actually is their money)
  • More about the advantages and disadvantages of residential property
  • More about the risks associated with investments and how to choose investments that match their personal comfort level of risk
  • Ways to protect themselves and their financial future
  • How to qualify for the age pension and maximise the pension payments
  • How make their money last and how to pass their wealth on to their children whilst denying the opportunity to sons / daughters in law to walk away with their wealth in a divorce
  • How to retire with reasonable security

People of all ages want to know make their money go further and escape the financial rut.  Most people don’t aspire to be millionaires.  They just want to improve their lot to a level of reasonable comfort, do the very best they can for their children, and have a secure and peaceful retirement.   In other words, financial wellbeing!

The area of personal finances is not only about additional income and investments.  It is a broad knowledge base that includes protecting income and investments; making and / or saving money by having access to a professional who knows the hundreds of government rules that apply to this discipline.

For more business building tips Brisbane, and to read more on this subject read the article “The Irimi approach to personal finances” at http://www.aikido-secrets-to-calm-success.com

If you want to try Aikido, try Griffith Aikido at http://www.griffithaikido.com.au

Until next time!

Gary

What people really want from personal financial planners

/in , , , , /by

Another Brisbane business building tip!  It pays to see things from the customer’s point of view.

What do most customers really want when they seek personal financial planning services?  Although they want to achieve a desirable level of financial wellbeing, what they really want often differs from the services that most financial planners want to provide.

There is growing demand in Australia to make financial advice affordable, easily accessible, easily understood and deliverable in smaller portions (as apposed to large complex financial plans).

The industry is changing and this requires a complete change of thinking on the part of financial advice providers.

I know from experience that the majority of people:

  • Don’t always want huge, expensive and hard to read Statements of Advice containing complex advice that attempts to map out the rest of their lives. (Why?  Because life can change so quickly)
  • Appreciate an expert resource with a depth of knowledge and experience they can draw on
  • Would really like to talk to someone who would simply answer questions
  • Appreciate having risks and opportunities that are not obvious to them, drawn to their attention
  • Like to browse for factual and current information without sales pressure
  • Have a continuing love affair and well founded belief in direct property, particularly residential property, even though it is not commonly addressed or recommended by financial planners
  • Are not necessarily wanting to buy a financial product when they seek advice

People who seek financial advice crave it with no strings attached.  They are looking for guidance and advice that is independent any particular product, and not given by someone who is employed by a product provider.

For more business building tips in Brisbane and to read more on this subject read the article “Navigating Life” at http://www.aikido-secrets-to-calm-success.com

If you want to try Aikido, try Griffith Aikido at http://www.griffithaikido.com.au

Until next time!

Gary

Be your own financial planner

/in , , , , /by

Looking for business building tips in Brisbane?  If you are really interested in your own financial wellbeing, become your own financial planner.  Sound impossible?  It’s not as difficult as you may think.

An extraordinary amount of knowledge is required to be a professional financial planner in Australia, but only a fraction of that knowledge is required when you only have one client – yourself!

Think about it!  With only one set of circumstances to understand and one set of goals to achieve (i.e. your own), and no compliance issues to worry about, you only need sufficient knowledge to plan your own financial future.

Let me say upfront that while it is desirable to be involved in the planning of your own financial future, it is dangerous to do the same for others because their circumstances and aspirations are different to yours.  Please refer them to a licensed professional.

In financial planning, the big knowledge areas are taxation, insurance, superannuation, retirement, Centrelink & DVA payments, and estate planning mainly because each is a broad area and there are so many rules to understand.  The other important knowledge area and one that causes a lot of frustration for people, is ‘investment’.

There are so many products and so many options that even the most knowledgeable financial planner does not know them all.  Also, people assume that if a financial planner recommends an investment product, it is guaranteed to make money.  Such is not the case as the GFC has recently demonstrated.

Therefore, if you are seeking to improve your financial wellbeing, it is important to understand the concept of risk.  Risk exists in all investments, bar none.  The value of investments can go up and they can go down.  There are different types of investments and different types of risk, so the real skill is to uncover and understand the risks that are relevant to your particular investment.

Understanding risk requires thorough research – deeper than the glossy brochure.  Also, the closer you are to managing the investment yourself, the clearer the risks are likely to become.  However, that requires some experience.

For more business building tips in Brisbane, check out my Aikido Secrets blog site at http://www.aikido-secrets-to-calm-success.com

Next time – Starting with a budget

Gary

Bad boy Meno!

/in , , , , /by

This is the story a suburban home mortgage lender who I will refer to as Meno Lendalot.  I have seen some commission hungry insurance representatives and financial planners in my time but Meno, the ‘loan-a-ranger’, takes the prize.

Meno is a one-time kitchen hand turned residential home mortgage lender.  His lack of technical knowledge is only surpassed by his lack of service and complete apathy towards his customers.  For females his attitude borders on disdain.

In Meno’s world, women have no place in the boy’s club of property investment.  So with a largely male customer base, his only goal is to build his loan book to a point where his trailing commissions will cover the cost of running his business and his long boozy lunches.  His only interest therefore is to get as many borrowers, with the least credit problems, through the door as possible to sign up for high fee loans, preferably locked-in with early discharge fees.

For the average suburban shop front home mortgage lender this is the way the money goes around.  On an average home loan of say, $300,000 the authorised lender (e.g. Meno the loan arranger) receives about 1.4% ($4,200) in upfront commission and a trailing commission of about 0.4% ($1,200) as an annual trail commission.  That is if the customer walks in off the street.

If the loan is referred by a finance broker, about half of the upfront commission is paid back to the broker, leaving the ‘loan arranger’ with 0.7% ($1,200) upfront commission and $1,200 annual trail commission on a $300,000 loan.  Of course the loan funds still come from the same bulk sources as a bank loan and the customer’s loan account is run through a major bank, at a fee.  This level of commission is good money, thus it is no surprise that this sector of the financial services industry, like all other sectors, attracts the occasional Meno.

Meno’s problem is that very few existing customers will refer their friends to him because they know from their own experience that once the business is on the books, ongoing service will be non-existent.  The only contact that an existing customer can expect is the occasional generic newsletter and the regular non-personal appeal for referrals.

Somewhat desperate, Meno relies on very print advertising and shopping centre promotions in an attempt to attract ‘one-time only’ direct business.  It has been proved over and over that very few people respond directly to professional and financial services advertising.  It is largely referral business.

A good dose of technical knowledge would also serve poor old Meno well.  He is fine writing a loan in the name of an individual but struggles when the owner of the property and the loan is a trust.  So what does Meno do when confronted with a trust?  He ridicules the customer and the advice of competent financial planners who recommend regularly as an asset protection strategy.  Not cool!

Meno complicates his problems by believing he knows everything.  He bleats the all too familiar tune “I have been in this business for years, so what would a professional business adviser know about running it better than me!” As he continues to ignore advice and draws ever closer to business oblivion, you wouldn’t be surprised to learn that his health is suffering.  A diet of alcohol, cigarettes, restaurant lunches and stress has taken a heavy toll on this overweight unfit late-thirties business pretender.

There is no conclusion to Meno’s story yet, but the end will come, ingloriously.  Meno should stop and smell the roses before the next bunch of flowers he receives is a wreath.

He is in business for all the wrong reasons and the stress he causes himself is killing him.  He is motivated only by money.  He needs to realise that he is delivering a service first and writing loans second.  A good first step would be to listen to his customers and demonstrate some genuine empathy for their needs.

Business building tips Brisbane – make a connection with your customers

http://www.aikido-secrets-to-calm-success.com

Until next time!

Gary

Make a connection with your customers!

/in , , , , /by

Norma set up a new business in a busy suburban retail area.  The business offered a massage service but the massage was delivered not by the traditional hands-on approach, but by a computer programmed massage bed.

Ten massage beds were purchased and set out ‘dormitory style’ in rented premises with soft lighting and music.  A customer would be shown to a bed, asked to lie down face up, covered with a sheet and a bank of warming ‘therapeutic’ lights would be rested gently on the chest.

The bed would be programmed at the bedside control panel and the customer left to relax.  Although this type of massage is very relaxing, the computer guided padded fingers were nowhere near as soothing as the hands of a trained massage therapist.

With some deft marketing, new customers kept coming and they were rewarded for bringing their friends.  The problem was that repeat business was very low.   Customers would come in once or twice and never return.  It took a little while to realise what the problem was.

Norma, the owner, was a very stylish middle aged woman who was always impeccably well dressed and well mannered.  On the other hand, the customers were the local residents, typified by shorts, denim skirts and thongs.

To Norma’s eyes, there was an obvious perception of class difference and the customers felt it.  Whilst she was friendly and helpful, it wasn’t hard to sense the distance that she put between herself and her customers.

At times when Norma was not in the shop, casuals were employed.  Typically they were young and were more focused on the customers and their enjoyment.  This pleasant change of atmosphere and lightening of mood saw customers flocking back with repeat business.  But as soon as Norma returned, the ambience reverted to that of a funeral parlour.

This issue was pointed out to Norma and, once her shock and anger subsided, her choices became clear.  If she stayed in the shop she would go broke.  Instead of selling what she thinks her customers want, she needed be more empathetic and provide what they really want.  That meant either changing her stand-offish approach or replacing herself in the shop.

Norma thought about this and finally responded by saying that she felt uncomfortable allowing herself to become closer to her customers and that to employ anyone who could do that for her would be to unnecessarily increase expenses when the business was only breaking even.  She elected to do nothing but continue on as before and steadfastly remained as the face and personality of the business.

So what happened?  Yep, she went broke; her health suffered badly and she closed the shop as soon as her lease expired.

Business building tips Brisbane – make a connection with your customers

http://www.aikido-secrets-to-calm-success.com

Until next time!

Gary

Business building tips Brisbane – threats that can wipe out a business

/in , , , , /by

This is the story of Arthur, a Brisbane pharmacist.  After working as an employed pharmacist for a few years, he purchased his own suburban pharmacy.  The shop was located beside a doctor’s surgery.  In fact, as part of an arrangement with the doctor, the previous owner had built a doorway directly from the doctor’s waiting room into the pharmacy.  It was truly a captive audience!

All went well for a few months.  Arthur is a personable guy who made a real effort to connect with his customers.  He sought feedback from customers about what he should stock in the shop, other than prescription drugs.  He even greeted his customers by name after reading the name on the prescription – very clever!

A few weeks ago, tragedy struck, dealing Arthur a double blow.  Firstly, the doctor moved out from next door to a nearby regional shopping centre, to join a group of doctors who were locating next to a major pharmacy.

Shortly after, in January 2011, Arthur’s shop was completely submerged in the recent Brisbane floods.

I will be amazed if Arthur’s pharmacy business survives this blow.  That will be a real shame because my interest in this business has been as a customer who had always received excellent service.  This is one of many businesses I observe in my own neighborhood.

These are the kinds of events that are categorized as ‘threats’ when undertaking S.W.O.T. analysis (Strengths, Weaknesses, Opportunities, Threats).  Threats are not to be confused with ‘weaknesses’.  Weaknesses usually relate to skills and knowledge that are missing.  Threats are events that can kill or cripple a business.  They can occur suddenly, and are usually caused by nature, government legislation or reliance on one source (in this case – income).

I am not being critical of Arthur over the flood issue.  After all, when the last major flood hit Brisbane, he wasn’t even born.  Besides that, our governments had us believe that with new flood mitigation infrastructure, it would never happen again.

However, the previous arrangement between the doctor and the former pharmacy owner which was responsible for the majority of the pharmacy’s business is something that should have sounded alarm bells.

This is where business owners can get blindsided.  The relatively few business starters who actually undertake planning before taking the plunge are usually too focused on the opportunity and the upside.  They tend to ignore downside risk on the basis that it may never happen, and it certainly won’t happen to me.

For more business building tips Brisbane, visit my other blog at:

http://www.aikido-secrets-to-calm-success.com

Until next time!

Gary

Don’t bet on the weather or politicians

/in , , , , /by

If you are looking for a business building tip in Brisbane, don’t bet on the weather or politicians!

This is the story of Godfrey.  Godfrey is a very intelligent and entrepreneurial business man who saw an opportunity a few years ago.

A few years ago, Queensland, Australia’s north eastern sub tropical State, was headed for a drought.  The El Nino weather pattern had been forecast for some time.  Godfrey decided that in the face of drought, Queenslanders would need access to water.  So he decided to go into the business of manufacturing and selling water tanks in Queensland.

Knowing very little about the technical aspects of plastics molding, he bought a share of an extruded plastics business which then ceased selling its traditional plastics product line and ordered the construction of several large water tank molds.

His timing was excellent.  As higher and higher water restrictions were imposed in Queensland, both the State Government and Federal Government offered attractive subsidies for residents to purchase water tanks.

Instantly, residential water tank sales went ballistic!   Residents were effectively being paid by the government to purchase water tanks and store their own water.  Soon there were countless manufacturers and importers entering the market as demand outstripped supply.

Meanwhile back at Godfrey’s water tank factory, two twelve hour shifts a day still couldn’t keep up with demand.  He  decided to increase his investment and ordered more water tank molds.

Then it rained and soon after, the State Government changed the subsidy rules and later announced the phase out of the subsidies all together.  Tank installation rules changed and residential sales plummeted by 70% overnight and the demand for tanks quickly dwindled.

By this time Godfrey had made a significant investment in manufacturing assets, gearing up to meet growing demand.  When demand disappeared almost overnight, he was facing some serious survival problems.

So what really happened?  Godfrey rode the wave of success on the back of a change in government legislation.  It was also the reversion of that subsidy legislation that killed off consumer demand.

His business was built on the whims of politicians; a very dangerous strategy indeed.  The demand for water tanks hadn’t fundamentally changed.  The reality was that the government was giving money away.  When they stopped, the market returned to its previous state, except there were now far too many suppliers.

Five years on, the El Nino weather pattern has been replaced by the la Nina weather pattern.  Dam storage capacity has risen from a low 17% to a peak of 200% and widespread flooding has replaced drought.

A business building tip in Brisbane? – be careful betting on the certainty of the weather and politicians!

Until next time!

Gary

Business building tips Brisbane – Use brains not brawn

/in , , , , /by

As Michelangelo said, “A man paints with his brains and not with his hands.”

So if you are looking for quality business building tips, a great piece of advice this wise old business plan consultant can give you is to build your business with your brains, not your brawn.

Just because you slave away at your office for 14 hours a day does not necessarily mean that you are in any way building a business.  It could be that you are just filling in the day.

Activity does not necessarily equate to productivity.  Regular attendance and routinely performing your trade or profession are not necessarily your highest payoff activities.

Doing those things may cause you to excel as a self employed, labour only sub-contractor.   But that is not building a business.  It is buying yourself a job and effectively working with your hands.

You must understand the difference!  You build a business when you extend your enterprise beyond yourself.  Your aim should be to finally make it independent of you.  To build a business that you own yet it doesn’t need you …. Now that’s brains!

Even though other people are involved, building your business is still building an extension of your self.  You are its brains, so it inherently carries your strengths, your values, your preferences, and your flaws.

Consequently, you can set yourself up for success or failure before you even open the doors.  If you actively seek opportunity, value good advice and surround your self with clever people, then you are setting up for success.

On the other hand, if you are internally focused, cutting corners and trying to do everything yourself then you are in for a rough ride and could be setting yourself up for failure.

There is a certain type of business that will suit you better than others.  There is also a type of culture that you will prefer.  You will have a particular way of doing things.  Your stamp will be all over it, so you should consider planning its design carefully.

That is why a business plan consultant can only guide you and mentor you.  They may even help you out with some of the more technical stuff, but at the end of the day it is your business.  No one else can (or should) ever plan your business without you.

So instead of looking at business planning as a touchy feely exercise or as a chore to please the Bank manager, view it as your golden opportunity to ‘paint with your brains’.

For more business building tips Brisbane, read my article at:

http://garyweigh.com/starting-up-your-own-business-business-basics

Until next time!

Gary