The impact of governments on the success of a business you might own either as an investor/shareholder or as an entrepreneur, was brought home to me after I caught up with one of Australia’s great, former small business owners, Mark Bouris, for my Switzer Show podcast.
Of course, he now runs a big business called Yellow Brick Road, which was his second finance operation, with Wizard Home Loans being his first. This was eventually sold for half a billion dollars to GE in 2004.
These were and are seriously large businesses, but I met Mark when he had a small office in Double Bay, Sydney, which he shared with a PA and a mate, who was a business broker. And how I met him was a lesson in how you start the building of a great business, and in fact, the whole ‘Bouris can build it’ story is a master class on creating a profitable and sellable business.
Talking with Mark was timely as the publishing business, which is run by my son Alex and my wife Maureen Jordan, launched Hodinkee Australia at the Opera House this week. Hodinkee is regarded as the must-read website and magazine for the world’s band of high-end watch buyers, who unsurprisingly are often lovers of beautiful cars, fine drinks and other luxurious collectables.
Across all of our separate businesses we have always leveraged our belief, taught by history, that you can learn from legends.
Of course, the secrets of Bouris’ business creations have always started with having an offering to potential customers that makes success highly likely. Wizard joined the likes of John Symond’s Aussie Home Loans in the early 1990s to challenge the big banks, which literally had a ‘mortgage’ on writing home loans to Australians.
Mark and John were joined by other mortgage broking businesses that have since seen this group of brokers write more home loans in this country than the branches and online operations of the banks. Sure, the banks get a lot of the brokers’ loans, but the banks have to pay the brokers for the business, and consumers get a much better deal than what prevailed before these upstart bank-beaters became the new kids on the home loan block.
In those early days, once Bouris knew he had a good business model, he recruited a public relations firm, which is where I came in, as I was the editor of the Australian Small Business magazine, at the time, and the inaugural small business editor for The Australian newspaper. That decision to pay for marketing exposure was actually the third innovation this guy got right, with having the right offering and assembling a good team of people to make it all happen, being the first and second smart moves.
I thought about this following two recent instances that tell me that the efficiency seekers of today could overrate the total benefits of AI and online strategies, compared to real people. Recently, I have filled in emails created by the media teams at NextDC and the new Revolut Bank Australia, requesting an interview for my TV show and have been ignored.
It could be that the CEOs don’t want to talk to me, though NextDC’s Craig Scroggie was always happy to do interviews with me when I hosted Switzer on the old Sky Business channel.
I suspect the AI robots or younger generation marketing people either don’t know who I am or don’t rate me as a voice to investors. In contrast, a PR person, Sarah King at Strategic Communications recently contacted me directly about her client, Netwealth, which was launching its new Netwealth Private service, and within a few days, the company’s CEO, Matt Heine, appeared on my show and was able to tell his story.
In a brave new IT-dominated world, successful old business tricks should not be discarded for cost-saving robots or AI agents. You could say, we might need to teach new dogs old tricks!
In my catch up with Bouris we looked at:
- How serious is the post Budget housing slump?
- Chris Joye’s prediction that we will see the worst house price slump ever?
- The current demand for loans in the wake of the Budget and three interest rate rises.
- Expectations around what the RBA will do?
- Biggest influences in his life, including Kerry Packer and Donald Trump, with his experiences with these bigger-than-life guys being something I will never forget.
- And who have been some of the best business minds he has worked with in Australian and from around the world. Some of his revelations will surprise many.
We finished off talking about how Australia has a huge productivity problem that the RBA boss, Michele Bullock correctly says is part of the issue of why our inflation is too high, and why we have copped three rate rises.
Bouris pointed out that great big businesses start as small businesses, and the fact that governments at all levels do so little to make the working lives of our entrepreneurs’ operations successful and profitable is at the core of our productivity problems.
I recently hosted panels at the Australian Independent Insolvency Practitioners conference in Canberra, and interviewed federal Liberal MPs, Opposition treasury spokesman, Tim Wilson and Andrew Bragg, who is seen as an important politician of the future with finance and technology insights.
I asked what they planned to do to genuinely reduce red tape and regulations on small businesses to boost productivity. They were sympathetic to my calls and made commitments to make changes if they gain government down the track, though these guys are not the first to do so, but it’s a promise more easily made from being Opposition MPs.
Until we have government politicians at federal, state and even local government levels, who genuinely believe small business success is at the core of better productivity, which Mark Bouris and I know is right, we will have productivity, inflation and interest rate problems.
