Smart way ahead is to gather the best advice

TOO many prospective business owners work on gut-feel alone. But business intelligence is far more than that. The best business decisions are calculated risks.

Financial expert Ross Greenwood.

TOO many prospective business owners work on gut-feel alone. But business intelligence is far more than gut-feel.

The best business decisions are calculated risks that a certain strategy or expansion will work. Business owners who have been around a while, often make fewer decisions than they sometimes should, mainly because their experience highlights the risks.

But if markets or economic trends are moving fast, then a business owner must be decisive, and pragmatic.

The mistake that too many experienced managers have made as the digital economy emerged is that they have been too slow to change — that their conservatism has allowed new entrants to compete and sometimes overtake them.

The trick here is to work out when the supposed threats are structural and real; or passing trends inside an economic cycle.

The ability to distinguish between the two will have a dramatic impact on your ability to let your business survive and prosper.

Belt-tightening to changing economic circumstances is one thing, but making seismic shifts to a business in the face of industry-wide change is something else altogether.

It’s here where business-owners and managers have to read broadly and to gain advice from others inside and outside your industry. This is where networking works best.

Experience often means having contacts you can speak to about change.

There are so many sources of information available to business owners today. But it is the ability to interpret this information into a coherent business plan that often makes the difference between a business that survives and one that falls by the wayside.

RON’S RISK ON INSTINCT PAID HIGH DIVIDENDS

RON Thomson knew he had a limited budget when he was thinking of a new venture.

He had been successful creating a string of muffler shops, but needed a new challenge. He knew he didn’t have enough money to buy an ­existing business, so he needed to find a gap in a market.

But unlike many business-owners, who blaze away and learn as they go, Ron wanted his gut-feeling reinforced.

He thought that using laser-cutting, then a new technology, to make custom parts and spares for manufacturers was a good business. So he then employed an engineering consultant. They applied for, and ­received, a $10,000 co-contribution grant to ­investigate the market.

When the report came back positive his next challenge was getting finance.

“I had a house and went to the bank with my business plan but they wouldn’t come to the party,” he says.

As it turns out, an emerging mortgage player, ­Wizard, then controlled by Mark Bouris, allowed Rob to finance his business with ­equity from his house. That was 17 years ago and it was one of the first of many such deals Wizard have done.

Aptly, Ron’s business is called Laser Wizard.

Ron Thomson and his sons, Lawrence, left, and Muir, who run Laser Wizard Sydney at their St Mary’s factory / Picture: Jonathan Ng

The business grew, despite a second-hand machine requiring constant maintenance making him doubt his business-plan.

“There was a time, when the machine broke down yet again that I thought we should give it up. It was a roller coaster,” Ron says.

But he won a couple of new contracts and eventually he put on a second shift and ran the machine for longer.

Then Ron used his strategic thinking again, moving away from the shopfloor to concentrate on running the business and building sales. It came at a time when manufacturers needed to adapt their machinery to keep up with competition from Asia.

As Ron’s business grew, he put on more machines and grew from occupying 25 per cent of the St Mary’s premises to the entire space.

Ron brought in his sons Lawrence and Muir, along with professional managers. Muir admits there have been tensions, especially when they were younger, but as he and his brother got older he started to trust them more.

Last year, at age 64, Ron put his business to the test; he walked away for a year and left his sons in charge.

Muir says the hardest thing taking over is trying to get the staff on board.

“We can’t demand everyone follow our direct orders. We have to ease into it. We have changed some basic things, like the website, things he might not have done. But oddly, I didn’t ­realise until he was away I missed him as a mentor.”

Ron says: “I thought if they made a mess of it, I could come back in and fix it up. But they did fine. Now I can work on special projects.”