8
SHOW ME THE MONEY!

I see starting a business as a very maternal process. Just like you can't be half-pregnant, you can't be half-hearted about starting a business; you have to go all the way! A business can be very consuming, and it will take all your time, all your money and your entire soul to make it work. Sometimes the main thing that stands between the winners and losers is simply the ability to keep going. If you are serious about achieving success in your field, you can't just shove your business on the backburner every time you want to take an overseas holiday or when you've just had a big weekend and want to sleep in the next day. You've got to put your business first. It's your new baby and it needs you. Many people are simply not willing to make the necessary sacrifices to allow their business to succeed. As you read earlier, Boost nearly took my marriage, but this type of obsessiveness, for me, was the only way to make the business work.

People are often attracted to the Branson and Zuckerberg success stories, and are keen to reach dizzying heights of success as fast as possible — along with all the trappings. I have seen people who start a business with a flashy office, pay themselves a top wage and simply burn money. We're living in an era of ‘NOW'. Everybody wants to have everything immediately and nobody wants to wait. But these businesses are often in the four out of five businesses that fail in the first five years. The reason for this failure is that businesses are hungry for cash and they need every cent to be spent on growth and on things that make a difference to the customer. When you prioritise your own needs, inevitably you run out of cash. Remember — many a good idea has failed due to lack of funding. New businesses are not about you and your needs; they are always about the business. So if you want the sports car and the corner office, maybe you would be better working for a big corporate. The reality of starting a business is likely that you will be living with your parents, or on the floor of your friend's apartment, working 100 hours a week (to not work a 40-hour week).

Keep it in your pocket

If you're starting a business and living by the mantra, ‘You have to spend money to make money' — you're wrong! This mentality will kill your businesses before it has a chance to grow. People look at Boost and they see an overnight success story, but nobody ever sees the hard slog behind that ‘overnight' success. The reality is, I worked from my rental house for two years, didn't take a salary for three years and we didn't take a cent out of the business for five years! We even had to take the agonising risk of selling our family home in year two to fund growth — and that wasn't easy. There was no guarantee the gamble would pay off, but we were all in.

If you want to attract an investor into your business, the first thing you need to do is demonstrate that you are a good steward of your own finances. If you're not putting your business first and carefully measuring every dollar you spend to make sure you're maximising the value of that dollar, what faith can an investor have that you are going to show any greater respect for the funds they give you? If I sat down for a business meeting with a start-up company and saw the founders drive up in a flashy new car and hand me an expensive business card as they straighten a designer tie, I would start to question why they were meeting with me at all. If you can afford all that personal expenditure, why do you need an investor? The first place your investment should come from is yourself because if you're not serious enough about your business to sink your own hard-earned funds into it, why should anyone else be?

The smartest thing you can do as a new business owner is put your wallet away. Sit down and take a good look at your budget. When you really analyse it, you quickly start to realise how much money you simply waste on things you really don't need. How you feel about an ‘essential' item right now is going to change over time. The more pressing your business needs become, the more it becomes like a hungry child. When that baby is crying for food and you have nothing to feed it, you're going to be thinking, Why did I spend $150 getting my hair done? Why did I get the expensive wine? Why did I get takeaway four nights a week for the past six months? Your whole priority system around spending will shift towards your business — as it should if you're serious about making it work. Suddenly a lot of the things you've been spending money on will make you sit back and think, Really? This is what you wanted to do with the advertising budget this week?

When I look back I think, sure I could have taken more holidays, spent more money on clothes, driven a nicer car — all those things. But if I hadn't sacrificed then, I wouldn't be part of the Boost phenomenon today. These are the sacrifices you'll have to weigh up if you're serious about going into business. Those small decisions about not taking holidays, going for weekends away, dining in fancy restaurants or spending money on nice clothes in those early years are the reason Boost is open in more countries than any other juice bar in the world, earning over $2 billion in global sales since inception. So if I have one piece of financial advice for new businesses just starting out, it's this: put your wallet away. Your future self will thank you for it!

Attracting an investor

So, other than being smart with your budgeting, how can you catch the eye of an investor? You need to consider five critical things — and not all of them are about spreadsheets! Consider these points:

  1. Do your homework. You should know your market well. Understand the competitive landscape and make sure there is actually a need for your product. One of the saddest moments I witnessed on Shark Tank was when we had to break it to a man, who had invested a huge amount of time, money and energy in developing a product, that the product actually had no market demand. He'd spent a fortune on something that nobody actually needed or wanted. I really felt for him as he walked away empty-handed and with his dreams crushed. He'd worked so hard for nothing. You also need to research and understand your customers. Meeting their need isn't enough — you also need to make sure your product is targeting them effectively and that they will like the way you present it.
  2. Know your numbers. That means understanding every detail of your operation. How much does it cost to run? What are your overheads? How much does your product cost? What's your margin? Where can you make savings? Are there potential economies of scale if you grow? How are you going to realise the necessary growth to ensure that your investor will get a return on the money they are putting in? How long will it take?
  3. Be smart about timing. Is your business actually ready to scale up? Do you have the systems in place to manage sudden growth or will the whole operation fall over? What do you need to do to make your operation scalable? It could be something as simple as making sure you understand your payroll obligations if you need to hire staff. Do you know how much tax, superannuation and other entitlements you need to pay them? Is there a way you can outsource any aspect of your operation and is that practical? Are you investing in the right part of your business?
  4. Be passionate about your project. I've often said that I'm at least as interested in the person as I am in the product when I invest. That's not to say I'll invest in something that doesn't interest me. There was more than one occasion on Shark Tank when I saw a really impressive pitch but had no interest in the product and so didn't invest. But a really great person can turn an average product into a fantastic business; whereas, even with a brilliant idea, the wrong person can turn it into a disaster. If you're really passionate about your idea, that reassures an investor that you will stick with your business through thick and thin because it's your baby. Someone who is in it for the cash will be easily disappointed and quickly look for an easier way to make money. Passion for the project is always a very attractive characteristic in a potential business partner.
  5. Think win–win. While on Shark Tank, I had the opportunity to see dozens of pitches from hopeful businesspeople desperate to take their operation to the next level. Similar to the way I felt in the early days of Boost, they simply expected their business to be worth a fortune just because they had spent years on the project. But at the end of the day, the business is only worth what an investor believes they will get a return on. I often tell people in start-up businesses that they need to look at not only what they need, but also what the investor is looking for. The pitches that are flawed are the ones that only consider what they want without considering what they have to offer to the investor.

Connecting with investors

Starting a business involves many challenges, and one of the ones that makes many a good idea fail is lack of capital; or simply put — you run out of money. Young businesses are super-hungry for cash, and you may need to look not only for money to start the business but also money to grow the business. As I said earlier in this chapter, you need to use every dollar in the business to return a profit, but sometimes no matter how careful you are, more is needed to grow. We sold our family home and I was lucky that we had a great deal of interest in the business so investors were not a problem in the early days. But getting the right investor was the challenge. At the start, when all I had was a document with the title of Business Plan, it was a bit different. These days there is crowd funding and many business angels who are looking at investing. But even with these, potential investors would like to see some ‘proof of concept'. What I mean by this is that the investor knows that the consumer wants the product. This may mean that you have to start on your own or with the support of your family, which in itself can be difficult. But you do need to get your business to a point where it is actually a business before you take it to the market.

Beware the ‘Bank of Mum and Dad'

I have seen and heard some horrible examples of parents lending their kids money for their business and then, for whatever reason, it all goes horribly wrong and the parents are left in a terrible situation, often without their super or any financial security. Some parents are in a position to lend money and if they lose it, it's not the end of the world; other parents lend or guarantee their children with their super, or use the equity in their home as security to fund their children's dreams. This is, of course, completely understandable because these parents want to support their children in their dreams. But, if it doesn't work out, the parents can be left with nothing and some of them are retired so they are not in a positon to make the money back.

Remember: four out of five businesses fail in the first five years, so if you approach your parents, understand what it would mean to them if the business does not succeed. And they should only lend you what they can afford to lose. This may all sound dark and depressing but I have seen the worst happen, and seeing a 60-year-old who has just lost their life savings on their children's dreams is no fun at all.

Mentors: you don't have to learn the hard way!

One thing I can't recommend highly enough is getting a mentor. Everybody needs guidance — yes, even you! As the journey of Boost continued and I was trying to manage the incredible growth, I discovered that there were things I didn't know. More correctly — everything I was doing was for the first time! Fortunately, I had help along the way, and still have a number of business mentors.

The mentor I mentioned earlier was Geoff Harris. We were the perfect pair: he received enormous joy out of teaching and I was a sponge that took everything in.

Geoff's message on culture fit was also loud and clear — in any meeting when we spoke about acquisition, the first topic that was discussed was always whether the possible acquisition was the right cultural fit for our business. One thing Geoff, Jeff and I agreed on was that we wanted to do business with people we liked and who had the same integrity and honesty in business that we had. If people did not get the tick, we would put a line through the business and move on.

I am thrilled to call this man my friend.

The others are people who may not be long-term mentors but who have been generous with their time and advice — people such as James Fitzgerald from Muffin Break, and Lesley Gillespie from Bakers Delight.

All these people have given me a wealth of invaluable knowledge. I've found that those who have been in business for many years are often very open about sharing their experience. It's refreshing when this happens, and it has always encouraged me to make sure I help other people where possible.

Is it any wonder that I firmly believe everyone should have a mentor? After all, nobody has all the answers all the time. Sometimes you just need help from someone who has been there before.

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Ask someone you respect to be your mentor, your personal sounding board, but don't have too many expectations. As with all things, the timing must be right. The person you approach must be in the right circumstances to give you their time. Geoff Harris, for instance, was looking for an opportunity to help someone. Be incredibly respectful of that person's time. You should realise that you're encroaching upon this person's space. If the person you approach agrees to be your mentor, you must allow them to set up the means of communicating and amount of time given. Hopefully over time, your mentor may be happy to increase dealings with you. Always respect your mentor by following through on any advice provided.

If the person you admire doesn't have time for mentoring at the moment, look at other ways to study this person's success. Read about them, and read any books they may have recommended — there is always a lot to learn.

Pro tips

Keep in mind the following about mentors:

  • A mentor can be an invaluable source of experience and wisdom. Sometimes the best thing a mentor can offer is a pair of objective ears.
  • Be respectful in your approach if you're seeking someone's mentorship. Understand that a ‘no' is probably not a rejection of you personally, but rather a reflection of the person's time constraints.
  • If the person does agree to mentor you, don't expect too much in the beginning. Allow the relationship to develop over time. Also, prepare well for each meeting so you maximise your and your mentor's time.
  • There are professional mentoring networks in place. By contacting one of these, you might be paired up with a suitable person who has decided they have the time to give something back.
  • The best compliment you can give your mentor is to follow their advice — whether that is what book to read or what system worked for them. And always take notes.

Avoiding business pitfalls

When your business is becoming more established and successful, you may start to feel pretty pleased with yourself. The business may be on track, investors are taking an interest and life seems to be moving into the fast track but beware: there are dangers lurking to trip you up. Whether you work in an office environment, a retail outlet or a work site, the traps can be the same, even if they wear different disguises. They're not always the most obvious problems — some of them may be considered assets under different circumstances. This section is all about knowing how to recognise problems — and overcome them.

Remember to harness your positive energy and there will be no such thing as an obstacle — it becomes just another lesson in business!

The following sections also outline what I have learned from being an employee and how to progress in your working life. One day (perhaps not too far away) you may be the business owner with many staff; in the meantime, learn as much as you can from being the best employee you can. Doing so will be so beneficial when you are the owner of the business.

Handling conflict

At Boost and Retail Zoo, we place an enormous emphasis on ‘cultural fit' during employment interviews — and for good reason. It's not just to save us the hassle of employing a person who won't fit in; it's also to save that person the unhappiness of being a square peg in a round hole.

Dealing with people will always be your toughest challenge, and you need to make sure that you never settle for mediocrity. But sometimes you need to look in the mirror and ask yourself if you have provided all the tools and the right environments for staff to be successful. At times, we can inadvertently set someone up for failure by promoting them far too quickly.

Often the best outcome is to put yourself in the seat of the employee and realise that the best outcome for you both is that they are no longer working for you.

If you find yourself in an environment that isn't right for you, you will feel isolated. You'll never know what's going on, you'll never hear about the best opportunities for advancement and going to work will be an absolute chore. If you're the kind of person who likes peace and quiet, for example, and you find yourself in an open-plan office, full of creative types who like to bandy about ideas, you'll never be able to show your full potential.

If you're having a personality clash with one or two other people in a company of 100, well, that probably just makes you normal.

On the other hand, if you find it tough to name even one or two colleagues who you actually like, you probably need to take a hard look at your current position. Most people spend more time with their work colleagues than their family, so it is important that you enjoy your co-workers.

Solution

Find a job (or start a business) that suits your personality. Remember, if you're passionate about something, you'll be good at it! Passion can be quiet, but you need to be in a position where you feel confident about getting your point across. When you go for job interviews, ask a lot of questions about the ‘culture' of the company — you want to make sure it's right for you.

Setting realistic expectations

When was the last time you woke up and thought, I'm going to wow them at work today! A lot of people trudge off to work (or even their own businesses) and sit down at their desks, prepared to do nothing more than what's necessary to get through the day. Low expectations like those could be killing your career or your business. To get ahead you need to be more positive! I go to work every day determined to learn something new — and every day, I manage to do just that. There's always something you don't know.

If you've been killing time at your desk for a while now, you may find that other people have fallen into line with your low expectations. Has your boss given you any interesting new projects of late or suggested you attend a training course? If your answer is no, chances are your boss has noted your attitude. We get back the energy that we put out — if you're giving off bad vibes, nobody is going to go out of their way to give you opportunities.

Solution

It's time for an attitude change. Try surrounding yourself with positive mantras — write them down and put them where you'll see them in the morning.

Go to work with a smile on your face and a can-do attitude. If you lift the expectations of yourself, you'll find that others will too. If you look ready to receive more, you'll be given more. Yes, that might mean a heavier workload but, really, aren't you bored just sitting there watching the clock?

Also consider whether you're expecting too much too quickly. We live in a ‘now' era. You only have to look at the spiralling credit card debt in our society to see that this is not a generation of people willing to wait patiently for things to happen. Too often young people sabotage their positions by demanding too much, too soon. Ask yourself if you're being realistic in your expectations. So you're not managing a department at 22 — very few people are. Having said that, many of my employees may be considered young for the roles they hold, but they've worked very hard for their success.

I have never been a fan of those who believe they're entitled to things. Yet I've seen people take entry-level positions and then, within what feels like three minutes, demand pay rises or ask for promotions just because ‘I have a degree', ‘My friend gets x dollars' or ‘I've been here three months'. I encourage ambition in my staff, but progression within a company has to be earned.

Some people manage to progress very quickly; for others it takes longer. If you feel you've been passed over several times, it may be time to speak to your boss, but overall you need to look at your career as a long-term prospect. Promotion may not happen overnight, but if you put in the hard yards and aim for respect from management and your colleagues, it will happen. Remember that respect and reputation are very difficult to earn and incredibly easy to lose. Don't forget about the big picture in a fit of pique about what's happening now.

Learning to say no

Do you find yourself saying yes to everything? A last-minute report needs doing, the photocopier needs fixing, you're loaded down with a big project, but you can't turn down the new recruit when she asks for help with her expense sheet. Every office has someone like you. Good old dependable you. The need to control (and ‘fix') everything can be even stronger when it's your own business.

The trouble is that it's very difficult to remain dependable when you're being stretched in every direction. Sooner or later all those balls that you're juggling will start to fall — and you'll be too busy doing something else to catch them.

If you've found yourself in this role, you know wiggling out of it can be difficult, particularly if the word ‘no' rarely passes your lips. You must assert yourself better. Taking up the slack in your office, department or business is not helping anyone — either someone else is letting you pull their weight or you're simply understaffed. Whatever the reason, your boss (or you) will never be able to manage resources if they can't get a clear picture of what's going on. It's time to stop working those incalculable hours; let others in the office stand on their own two feet. You don't have to be everything to everyone to be a valuable member of the team.

Solution

Learn how to say no. If you find that you're being piled up with work, under the assumption that you always find a way, it's time to sit down with your boss and discuss your deadlines. If your colleagues are taking advantage of your good nature, help them find the solutions for which they should be responsible by suggesting they put their own ideas together and discuss them when you get some time. There is always a way to let people down gently. If you don't start to do this, the only person heading for a fall is you.

Respecting others

You may call it being cool, or creative. Maybe you simply don't think about it at all. I'm talking about the little things that show a lack of respect — like being consistently late for work or not ready for meetings, throwing things together at the last minute, and passing the buck to others because you've got ‘other things to do'.

What these things add up to is a big lack of respect for your colleagues — and never imagine for a second that they won't notice. They may not say anything at the time, but those slights are being filed away and will count against you in the future.

At Boost and Retail Zoo, we value respect immensely, but it has to be earned. It also has to be given. When you wander in late, fail to give 100 per cent or let others pick up your slack, you send a message to the rest of the team that they don't count. That doesn't make for a very happy workplace. I believe that happy teams make the best teams, and I do my best to weed out any negative influences. Any smart boss will do the same.

Solution

The old adage ‘Do unto others as you would have them do unto you' has never held truer than in today's workplace. The best way to get ahead is to show your colleagues respect. They will not help you or make you look good unless you show them that you value their contributions. If one person performs badly, it lets down the whole team — don't be that person!

By the way, if you happen to be the person who's picking up the slack for someone — that is, having a heap of stuff dumped on you because your colleague ‘doesn't have time', you're not doing yourself or your colleague any favours (refer to the preceding section).

Acting the part

You only need to read some of the chapters in this book to realise that I'm the last person who will ever judge people on their appearance. I don't believe that you need to present any other image than your own to be successful. But — yes, there's always a but — that's within reason.

Most workplaces or business types have a dress code and it makes sense to work within this code as best you can. Advertising agencies and other creative environments may seem to be freer with their fashion, but their unspoken rules of cool can be as set in stone as rules on attire in a corporate accountant's office.

Why would you bother with these rules? Two words: your comfort. If you're uncomfortable, you can't be at your best. If you stand out in your workplace or with investors, like Lindsay Lohan at an IBM convention, your fabulous ideas may never get the audience they truly deserve.

Which brings me to my next and most important point: actions speak louder than words. You can be the best talker in the office, full of amazing plans and strategies, but if you never get past the talking, you won't get far.

Solution

It can be difficult trying to sell your ideas and solutions to people who aren't looking past your belly-button piercing. You'll find it's easier if you take the time to work out the best way to express your personality within the boundaries that are acceptable in your workplace.

Also, once you've sold your ideas, don't forget the most important part of the equation — the follow-up. I don't want to hear about how well you can do something, or how quickly — show me. Very few people talk their way to the top (no matter how things may sometimes look). The truth is that solid hard work needs to follow up any burst of hot air.

Eliminating the fear

Whether you have a fear of failure or success, drop it! Everybody makes mistakes. There — the truth is out. Unfortunately, some people would rather not make any impact at all than risk making an error. You only need to watch an episode of a reality television show to see these people in action. In this situation, they're hoping to go unnoticed so they don't get voted out; however, even in this example you can see this tactic only works for so long. Soon the numbers get so few that those hiding in the shadows are forced into the spotlight.

In a work or investment environment, those people who never speak up, never volunteer and never commit will also never get ahead. They may get by without making waves for a while, but sooner or later their workmates will notice a certain void where that person should be. Nobody ever said that every member of a team has to be an extroverted leader. However, every member of a team does need to commit to the group. If you're too afraid of failure to even have a go, you create imbalance within the team.

Making an error will not be the end of your career or your business; write that down in your diary if you must. You need to step up to the plate and have a swing if you hope to hit a home run. The key to learning is having a go. As far as I'm concerned, learning something new every day is the key to a successful career. If you make a mistake, fine — own up to it and do your best to rectify it. I have more respect for people who do this than for those who skate through their working life, never really making an impact. After all, how can your boss see what you can really do if you never take a swing?

On the opposite side of the coin, many people seem frightened of the changes that success might bring to their lives. They feel they are imposters — that somehow the opportunities that have come their way were not really meant for them. They sit waiting for someone else to uncover the awful truth. I've seen talented staff who haven't gone for promotions because they're worried about ending up as the boss of one of their friends. Others are concerned about how their lives might change, and whether their partner will be able to handle their success. Many people go about their ordinary lives, ignoring great opportunities because they don't fit into the scheme of those ordinary lives. It's the few people willing to take a chance who find that success comes their way.

Solution

Face your fear. Try my ‘worst-case scenario' approach: what's the absolute worst thing that might happen should you take a chance on success? Perhaps the partner you have right now won't make the jump with you — if that's the case, is that person really right for you? Perhaps you will end up your friend's boss — have you talked to them about it? How close is your friendship anyway? The point is this: can you live with the ‘worst case'? Once you've identified the absolute worst that can happen, it usually just doesn't look as scary.

We can use a million reasons to convince ourselves that we shouldn't do something. We can use just one reason to convince ourselves we should: ‘Why not?'

As for feeling like an imposter — and I've seen it with so many people — never underestimate the effort you put in, and accept that you deserve everything you've achieved. At times I think, How did I get here? Me, who knew nothing about business? Then I remember — Oh yes, I'm here from a lot of bloody hard work!

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Avoiding burnout

Not so long ago, I had days when I started to wonder what the hell I was doing. I'd spend ten hours in the office, go home to spend a few hours with my family, then sit down at my computer to do another five hours' work. Of course, I'm not the only one who has worked that hard at some time in their life. The workplace is full of people spending way too much time in front of their computers and under fluorescent lights. Unfortunately, if we don't see the warning signs and put the brakes on in time, we will burn out. The fastest way to derail your career is to lose track of the importance of downtime.

Burnout is what happens when we don't get our work–life balance right. If you focus on just one area of your life, to the detriment of all else, it's no wonder things begin to go pear-shaped.

Stress can only be endured for so long. Long hours can only be tolerated for a little while. Being the first into the office and the last to go home will only get you brownie points with management for a short period. Once that wears off, they will simply begin to question your time-management skills.

In short, if you're beginning to feel that your workplace simply couldn't function without your presence, it's probably time to take a break. Holidays are a vital part of working life — we need them to refresh our minds and re-energise our bodies. Never underestimate the importance of taking a breather, and stopping to do nothing.

Solution

When was the last time you had a break — a proper one, without the laptop and the mobile phone? Trust me — the office will not fall apart in your absence. This may be a little deflating for the ego, but the health benefits will more than make up for it. When you return from your holiday, rested and rejuvenated, you'll be able to make that charge up the corporate ladder at full speed.

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