• How did you come up with your Product Idea?
• History of idea/industry and how it was conceivedBSI Started when I left the accounting profession and said to myself that I would never fill another timesheet!
Everything that I did was based on some form of success fee based on a successful outcome for clients. Accessing Government grants was a major focus.
The grants that I focused on were was
• the EMDG – where for every $ spent on marketing and promoting your product overseas, the company gets 50c in the $ back up to $150k per annum.
• Import Credits in the Textile Industry – also export related
• R&D Tax Concessions and Grants – Incentives given to companies who innovate.
These companies had a huge need for business planning, capital, management advice and management accounting services.
Enter an old school friend of mine, Alan Milwidsky, who was at the time a partner in a BIG 5 company, specializing in Growth Strategies – looking for a change…. I said Al… come spend a week in our business, have a look at our deal flow, join me in the business and you will make a lot more money and have a lot more fun… I was ½ right…. We have a lot more fun!!
We developed the BSI business plan – the Vision being “To Help Companies Grow” and “ To be a “one stop shop for the entrepreneur”
Providing Grants, Growth Strategies, International Gateways, Capital Raising.
We believed that in order for us to leverage our skill base, we would take equity stakes in Innovative Companies and back Motivated People, and over the years help there companies grow with the objective of getting a return on our investment.
We worked out the money that we needed to grow the business, identified a number of strategic investors and pitched our plan to them.
We were fortunate to raise the money that we were looking for from these parties, together with some of our own money.
With the money raised, we acquired
• A Bizcap team Specialising in Early Stage Capital Raising
• The leading R&D Tax Concession Firm, being run by an old friend of mine,
• a Recruitment Business (which acquired a few more recruiting businesses)
• a Training Business ((which acquired a few more training businesses).
• As well as making a number of Investments in Innovative Companies.
• More recently we acquired a financial planning business, focusing on helping an individual build wealth
Our model is to set up different Companies with a common brand and Philosophy, whereby each Head would be a stakeholder, and a group policy of X referring Clients, people and knowledge with a common culture.
THE BSI INVESTOR FORUM
It was 2001, and the dot com crash happened…. And there was no environment for the SME innovator looking to raise between 200k and $2m….
Alan M developed the
“BSI Investor Forum” – where every 3 months we showcase 8 innovative companies to 200 HNI and Funds in Sydney, Melb and Brisbane.
Over the past 8 years…. We have had 25 forums, showcased 200 companies, of which +100m have been raised for more than 80 of them.
We set up a USA office as part of our International Gateway Strategy, and have an Investor Forum every second year in Silicon Valley where we showcased 10 Innovative Australian Companies at “ALWAYS ON” – the key Silicon Valley Conference – attended by “the Captains of Innovation”
Our Investment Fund
In 2003, an amazing opportunity presented itself…..
We had the opportunity to acquire a small Government sponsored fund , from a group looking to get out of the early stage marketplace.
This Fund was a dream come true for us…. It gave us Capital to co-invest with our HNI and Funds, and we would not have to use our working capital to invest in these Innovative Companies.
We have subsequently merged with another fund, and together have made in excess of 30 Investments where we believe that some will be successful world beating companies.
Since 2001 – we have grown our Group from a turnover of 1m – 30m ….
Did I do this…. I have pretty much done nothing besides picking guys who are brighter than I am, passionate at what they do, with the right incentives to help them achieve their goals and objectives.
Where to from here?
We are currently working on a number of projects that will hopefully take us from $30m – 150m over the next 10 years.
• What would be a good new business opportunity if you were starting again (besides one you may be working on at the moment)
Currently we believe the best opportunity for us is growing a financial planning business, helping the individual grow wealth. If there was a better opportunity, we would be focusing on that!!
We have a large base of clients of which to x sell our services
• Were you solving a frustration or need and if so, what was it
The frustration for the entrepreneur was to pay for results vs paying for time. Everything we did was based on a fixed price or a % of the benefit, so the Client knew exactly what he was going to pay us, and that he could afford our bills.
The services of accessing grants solved a huge pain for the enrtrepreneur as there were/are mountains of red tape that need to go through to get the relevant grants.
We solved a pain for the Small Service Business Provider – by providing the back office, financing and marketing services in exchange for equity in their business.
• Describe the Market Opportunity at the time you started?
• What made it unique
Fixed fee and success fees vs fee for time
• How did you gauge the market acceptance of your idea before you started
Knocked on doors, pitched and performed. From there we got referrals. We focused on certain industries where government recognized market failure (TCF industry and ICT Industry) put our flags in that space, and became leading service providers in that industry.
Other services developed were based on client demand
• What was the competition like at the time and how did they react
Competition was and is accountants, business planners and consultants.
Many have adopted our model of fixed fees and success fees.
Our competition copied our methodologies, and tried to headhunt our key people.
• How important was location of your business and how did you pick the location
Location was important to retain the team. Inner City – access to public transport – good location and professional looking offices
• Tell us about the Business Planning Process?
• Did you develop and write a plan – if so, why and how good was it?
We spent 6 months developing our business plan. It was an awesome 5 year business plan… which we achieved in 2 years.
Our 2nd 5 year business plan was achieved in 18 months!!
The philosophy and concept and vision remains the same.
• How many iterations and how long was the process-
• How much did the original plan change over the company’s history
It set the path to our future growth
Basic philosophy the same. Achieved ahead of plan. We are on our 5th iteration!
• Did you have any help/would you recommend getting help and from whom
We had an independent facilitator – found it invaluable
• If you did not do a plan, would you do one if you started the same one today and why or why not
• How much industry knowledge did you have/should someone have
If you are interested in the industry.. give it a go, you will learn soon enough.
• What mistakes did you make in the planning process
We should have got an independent advisory board… who could make unemotional decisions based on fact.
4. Describe the Management Team and how it came together or evolved?
Management Team of the holding company was and is Alan, Mick Lynch and Me
We should have had an independent non executive board/advisory board on out team.
We were the founders of the business
Each division/subsidiary has its own management team, with either Alan , Mick or me on the Board of Directors
• What was your experience and background before starting the business
A Chartered Accountant working in a professional firm for 10 years
• What was your motivation to start your own venture
Independence and financial freedom.
• Did you have a mentor or someone to whom you turned for regular advice and why
Yes and still do… he keeps me sane, and prevents me from feeling alone!
• Who were the key employees you hired first and why
Key Employees were specialists in the relevant grants.. They cam on board, and offered them equity and profit share.
• If your partner or key employees are gone, why and what lessons did you learn
???? Our business is based on our people. Without our key partners/employees, we would not have a business.
• How did you motivate your employees to follow the same vision you had
We got them involved in the business planning process
Total transparency on results
There is generous profit shares
And the most important was picking the right people. Once we chose the right people.. everything else was easy
• Describe the impact of this venture on your personal life and would you change any of the way you managed the work/personal life balance
For the first 10 years there was no work life balance… the focus on the business was 24/7…
5. Describe how you Financed your venture?
• Who were the investors (not names) and how did you find them
A large High Net Worth Individual
• What did you learn from those investors that did NOT invest
How to cope with rejection!!
• For those that did invest, what are their four or five most important factors (besides the quality of the management team) in their decision
Ability to get a good ROI
• If you did not use outside investors, would you have done so if you started today
6. What Mistakes did you make with the Company after it was started and what might you have done differently in the planning process to prevent them?
Hiring the wrong people and not getting them leave fast enough
Not being able to enable fellow companies to x sell with each other and synergise
Focussing on business that is not scalable and has ability to exit
Being too opportunistic
Not being focused
Not having an independent advisory board
Being too diverse
Other mistakes too countless to mention
Some General Tips
• Passion – if you aint got it – get a job
•Have a Vision – “help companies grow” and “ be a one stop shop for the entrepreneur
• Pitch – Invest in getting your elevator 30 second pitch right – have a pitch for every occasion – for an investor , for a customer and for a potential employee – as an entrepreneur , you are constantly selling!!
• People – Hire slow and fire fast – focus on the best people – the right people.. Make sure you look after them , take them for lunch, communicate with them , show them that you care – it’s the little things that count. Founders are generally technically oriented – know when to change the guard – example eway Tony Mcgrath – has built his business to 20 people… both founders were techos – 6 months ago hired a sales and marketing team – and sales have gone crazy!!
• Customer focused and Sales and Marketing is key –Customer Service is important for all in organization to get involved in as this is free focus groups… be on same wavelength as your customers. Develop relationships with them .
• Planning – is key – with knowledge of where you are in the business cycle –
• Penossa – make sure you have enough cash to fund your growth – growth = cash burn – if you cannot afford organic growth – make sure you have a group who has deep pockets who are supporting you or you will get crunched… cash flow cash flow cash flow!!
• Point of Difference – is key – why are you different from the competition – why are you going to hit the home run!
• Persistance and staying focused – keep going (however , ensure that when climbing the ladder – you are climbing up the right wall! (also know when to quit!!)
• Network Network Network – develop relationship with advocates of your product, networked groups, consultants, advisors – they will help you inject your business into the ecosystem – get them to buy into your dream
• Don’t be scared of giving your investors a great return on their investment . If you do this , they will invest in you again and again.
• Always try to climb on the back of giants – align with organizations that will make you look
• Get the brightest and best people, and make sure you look after them like gold. Your people are your assets
• Keep communication lines open – our biggest failures have been through an inability to communicate
• Avoid FTI – take action – make a decision and implement it – even if it is the wrong decision – you can always change it
• Your Database is an valuable asset keep it updated, respect it and guard it. Use it for networking
• X referring clients throughout the service lines – providing a holistic service to clients has been important
• Build your Brand – this is where you will get leverage and credibility – update your website, provide links, use professional mweb marketers, create your blog, have events, seminars, attend seminars. Become “the college of knowledge” in your field of expertise. If people perceive you as a leader, performer and creator – then that is reality – PERCEPTION IS