How Entrepreneur's grew their business with some tips direct from them

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Written by Adele BarlowPhotography by Michael FarrDesign by Catherine Chi & Pamela Minett

Thanks to the contributors for donating their time:Xero, Minimonos, Jamorama,

Running with scissors, Mr Vintage,

Instinct, IVHQ, Lucy Lou, Epic

Beer, Missing LInk, Asil Group

Limited, Annah Stretton, Hell

Pizza, Cookie Time

Published by

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CapabilityNZ A not-for-profit entity supported by NZTE and leading national organizations

“CapabilityNZ helps build capability by coordinating and leveraging the best of what the private and public sectors can contribute.”Incorporated since: 2008No of Staff: 3 full time, 3 part-time staffLocations: WellingtonFunded by: - Peter Drucker

Company facts

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Contents5 Introduction

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Introductionmean increased profit, efficiency, and opportunities. Essentially, this book exists to lead you to an online tool we built to grow New Zealand business: www.businessassessment.co.nz.

Enjoy,

Capability NZ

There are certain stages to running a truly effective business. First, decide what you want your business to create for you. Then plan the business to meet your needs. Remember that small is good, if it meets your end. Work on your business, not in it. And when you’ve created something that works, make it exceptional.

Growth does not have to mean chain stores or global expansion: it can

We don’t pretend to know how you should grow your business. Instead, we wrote a book to introduce you to fifteen local business heroes.

From different industries, and all at different parts of their journey, they share their stories on one key message: no one succeeds alone.

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1. Gather kiwi business stories2. Mix with management theory

Our agenda

3. Create a book4. Get the book to you

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5.You get inspired to visit www.businessassessment.co.nz

(By the way, no one in this

book was paid for their story

- including Esteban, who you

will meet on the next page)

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From someone who’s tried

The assessment toolWhen I established my company, I wanted a tool that would help us keep track of what we were doing. We also wanted something simple. At the time, we were looking for something that would organise our thinking. I remembered a conversation with NZTE staff about the Business Assessment Tool. So I went online to find it, and registered, to see what it was all about.

When filling in the information about my company, I found that several questions would not apply to small companies or start-ups. This was a bit frustrating

because I was thinking: “What is the

use of the form for us?” However, I found out that I could add advisors (internal and external) to my company profile and this became key.

We operate in a virtual environment, with people located both locally an abroad. The BAT was very useful in putting our thinking and discussions in the same place - avoiding repeated documents, spreadsheets, and teleconferences. BAT became a good tool for us during this start-up phase. The tool gave us most of the features we were looking for (bar the external benchmarking) and we could use it in our “own” way too. We decided to fill out the questionnaire once every 18 months to measure our

progress. This told us where to focus,

during different stages. At the same time, we could get access to external advisors - and insight - on how to build up capability when required.

At the time, I thought: “How can I talk to someone about my business when I don’t even know the person? I might be better off talking to my friends!” This is overcome when you start to get more involved in the process

behind the tool. The tool gives you a starting point for talking to advisors. Again, I found the tool great for putting people on the same page when talking about the business.

I would recommend that other businesses use the tool. I have done so already. I believe that there is always a balance between the intended purpose of the tool and how different businesses use it - like how we used it in the “international coordination” arena.

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The tool gave us most of the things

we were looking for:

Easy and quick snapshot of our •company profile

Triggered thinking on how to •build our business capability

An “internal” benchmarking •tool that could be used over

time

Access to external people that •would give us good insight

I would strongly suggest getting

to know who is behind the BAT.

This takes away the feeling of it

being just “another online form.” If

business people don’t do this, they

would not get the most of the tool.

Q:

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“Maybe I’m just not ambitious enough. But I don’t really want to build a huge company.Is there something wrong with that?”

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Greatness doesn’tdepend on size.

Part one :

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13the word we’re all talking about

capability1, ability2, a characteristic that may be developed potential aptitude

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What your business does[What exists right now]

business Process

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What your business can do[What allows it to exist]

business Capability

16You can spend all day, all week, all year

on the business in survival mode

But growth happens when you work on this

Business capability

Business process

17Business capability = working on your business

Your staff’s actions, opening the store, greeting the customer, explaining the product, making the sale, putting through the transaction, greeting the nextcustomer, purchasing new equipment, meeting a

supplier, talking to staff, closing the store

store location, customer mapping, determining the price points for products, sales strategy,

marketing strategy, sending staff to a training program, attending a training program, meeting

with business advisors

Business process = working in your business

EXPENDITURE OF TIME AND ENERGY INVESTMENT OF TIME AND ENERGY

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Every now and then in business we get a big pay day (like when selling a business). What I am really getting paid for is the days and days I rock up and perfect my craft.

I am a long distance swimmer. If I don’t train, I can’t do the race. But training is not just about stamina, it’s about perfecting the technique so it becomes effortless. I see being in business the same way. The only way I get the pay day is perfecting my technique, working on the team, making sure we have the stamina required, and hitting those big pay days every few years.

- Melissa Clark Reynolds, Minimonos

“I get up between 4 to 5am every day and work on my business until 9am. That’s when I work on how we move forward. I can’t come into the office and work on it; as the minute I step in, it’s reactionary, there’s so much to be done, people are continuously asking for my attention. That development or growth time is crucial, so that I can take business to next level. That’s when I set up my day so I know I won’t get sidetracked.”

– Annah Stretton Clothing company

Increasing your business capability Increasing what your business can do

- Peter Drucker

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- Charles Bruxton

How do you increase business growth?

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Part Two :

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begin with the end in mind (Stephen Covey)

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Most business failures begin in the f irst creation, with problems such as undercapitalization, misunderstanding of the market, or lack of a business plan.

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To build a business you clearly define what you’re trying to accomplish.

You carefully think through the product or service you

want to provide in terms of your market target, then

you organize all the elements to meet that objective.

you use a recipe you create a blueprintTo bake a cake To build a house

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After Trademe, the bar was set. You know, they did a $750 million deal. So we always wanted to do a $1 billion dollar business. Hamish and I talked about it for a while. We built a good, capable team around us – great programmers, developers, and designers that we specifically targeted, and a great operational team – Alistair Grigg, who was the CEO of Air New Zealand, came in to run tech and operations. We got good advice from the people on our Board.

We specifically designed it so that we had the resources to put an operations team in there – with Alistair on board, I

could focus on being the entrepreneur. Entrepreneurs are not good managers. They tend to frustrate the hell out of people – always chasing the next deal; waving your arm around; doing strategy. The entrepreneur’s got the big picture; but it always works better if you’ve got a complementary team.

It’s hard, hard work, but what we’re doing, is absolutely working. The last year was biggest growth – we tripled our customer base from 6,000 to 17,000 customers. There’s operational back-office stuff you have to do for that too. We buiilt the foundations that would allow for scaleable

Xero - Rod Drury

XeroOnline accounting software for Mac, iPhone and Windows that gives companies and advisors easy access to the business bank transactions, invoices, reports.

Trading since: 2007Staff: 40 full-timeLocations: Auckland, Wellington, Christchurch, London, MelbourneSector/industry: Technology, Finance Customer market: Small to medium enterprisesWebsite: www.xero.com

Company facts

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growth, and hopefully we will crack that

over the next year, having done the really

hard part.

Software as a Service is all about getting

your early adopters on board, and

maximizing the network effect – we were

always building for tens of thousands of

customers.

One of the best pieces of advice I’ve

gotten was from the Aftermail days,

when someone said to me, “You’ll be

surprised at how long it takes your

competitors to react.” And I have been

seeing that trend – it’s harder for bigger, more complex businesses to do stuff – whereas small, nimble businesses can get stuff done yet.

If you look at GDP and break it up, 38% of our country’s GDP is from small business. So when I think about raising productivity across that sector – a crucial step is moving data to the cloud, so an advisor can work on the business alongside you.

The barrier to advice before tools like Xero was the price, and getting the data was a delayed process. Now you can

have a shared business plan, where

everyone can easily see the numbers.

And so the cost of advice is much

less now - the Internet is allowing

collaboration to happen in a way that

wasn’t possible before.

I think people like talking about their

businesses – they’re immersed in

it, and so it actually makes for an

interesting conversation; and people

always seem to be asking for help.

It really helps any business to

have a trained outsider looking at

your numbers and opportunities,

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who can say to you, “Stop doing this

activity, it’s not making money - do

this instead.”

My advice? Get your shareholder’s agreement right at the beginning. Raise enough capital to be successful. You learn so many lessons from prior experience – how to build a profile, how to network…. hopefully you make less mistakes the next time. With Xero, we knew what we were doing because of the similar experiences we’d had before. What we didn’t know how to do, we got help with, from lawyers and merchant banking teams.

If you like people, and you’re interested in them, and you like connecting, networking is really easy. You’re always

looking at paying it forward. You might come across someone, and think of someone else, then flick an email intro saying, “You guys should talk.” And you get that back.

So networking is about thinking about things from another person’s perspective, and wondering how

you can help them out. Making connections that add value between people, are a great way to build your network, because you then become valuable to people.

I think when it comes to outside advice, you’re always listening, but essentially you’re just testing that advice against your own existing assumptions. Once you’re more experienced as an

entrepreneur, you gain more confidence in your judgment, but you still want to test that perspective out against someone else’s becuase you always know that you might be wrong.

Over time I think you do get this deep belief that you can spot an opportunity,

but a business opportunity isn’t just about building something, it’s also about selling it. You learn to ask yourself how money will come from it – how will I take investors from here, to there.

You’ve got to be able to recognize whether a certain opportunity has business potential. If it doesn’t, you’ve got to know when to acknowledge that and just walk away.

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then 7-year-old daughter is a digital native (has no life experience pre-internet). I was increasingly horrified at the offerings available for children on line – plus I felt an urgency to work on Climate issues.

After I knew that I wanted to create somewhere for children that expressed great values, encouraged children to take care of each other and this wonderful planet, and didn’t sell them any plastic rubbish, I spent a year talking to everyone I could about the idea.

A Partner at PWC met me often to ask hard questions, until I could explain the idea to people who knew nothing about the industry. I took the idea to a number of Angel investors to ask advice (not money at

MiniMonos - Melissa Clark-Reynolds

I first started thinking about this in late 2006 and early 2007. A few thoughts came together in my mind: firstly, my

this point), and got about a year’s feedback on the business plan before I really got a team together to get going.

My business partners have co-created with me and have been an instrumental part of the process, plus one of the Angels I mentioned earlier is now our Chairman and has personally invested. PriceWaterhouseCoopers continue to help with tax planning and budget modeling.

I went to MIT in Boston in 2007 and did a short course in Technology Entrepreneurship. Professor Ken Morse there was my mentor for the first couple of years, and gave me the huge gift of knowing that I can both dream, and make those dreams into reality.

MinimonosMiniMonos is a virtual world for children based on sustainability and generosity, with over 8000 users.

Trading since: 2007Staff: 2 full-timeLocations: AuckandSector/industry: TechnologyWebsite: www.minimonos.com

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Years ago I did a series of courses with Robert Kiyosaki. He remained as one of my mentors for five years and has shaped my approach in business.

He told me, “What other people think

of you is none of your business.” I obviously still want people to like me, but I don’t need anyone’s permission to get out there and fulfill my life’s work.

Another one is: “Professionals get paid

to Practice.” Every now and then in business we get a big pay day (e.g. when selling a business). What I am really getting paid for is the days and days I rock up and perfect my craft.

Going to conferences has been hugely valuable. XMediaLab in 2008 and 2009 allowed me to workshop the project with a series of international mentors. Two of those mentors are now on our advisory board. Another has been helping us with raising capital out of Singapore.

I also went to the Games, Animation, and Special Effects conference AnimfX and sucked every bit of advice I could from gurus about story writing, technology, team development, and purpose. John Stephenson (Director of Kung Fu Panda) has been a huge influence.Tim Johnson (Director of Over the Hedge) was also inspiring and I am still using notes from his 2007 presentation on the power of story.

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Jamorama - Jon Coursey

My recipe for success: Pay attention. Make a plan. Be disciplined. Never give up.

The idea actually arose in a guitar lesson. David McKinnon was teaching Mark Ling to play guitar when it occurred to them that there could be demand for guitar lessons online. A few searches on relevant key terms and search volume revealed a large market gap.

Initially we read a lot - especially internet marketing resources. Eventually, we needed some sound business coaching and we got our first mentor (a local business coach) who

JamoramaOnline music education software.

Trading since: 2008Staff: 5 full-timeLocations: WellingtonSector/industry: TechnologyCustomer market: Individuals wanting to how to play instruments online using free lessons, step by step instructions, tutorials, jam tracks and famous songs.Website: www.jamorama.com

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helped us structure our organization and put a strategy in place.

Later we attended X-Media Lab - that was a real eye opener for us. Until then we had happily been doing our thing without really realizing what other Kiwi creative teams were doing. The advice we received from lab mentors was very valuable and we’ve grown as business people as a result of it.

There have been a few major things you could say have been pivotal in growing the business:

Gaining a real understanding of our •customers’ needs

The business partners learning to •work together in a complementary wayGetting the right people in the right •places in the organization Putting IT infrastructure in place •for growth.

I read a lot. There have been a number of authors who have inspired and shaped my approach to business management. People like Jim Collins, Tom Peters, Peter Drucker, Seth Godin.

I maintain good contact with business people I’ve met and many have helped with advice at one time or another.

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Running with scissors - Friday O’Flaherty & Andy Mitchell

We met in a fairly progressive division of a large multinational advertising agency. Although the business was delivering some fairly interesting work we both believed that there was a better, more inclusive way of generating ideas. The business we were employed by didn’t share our belief; in fact they were opposed to it and restructured the business in an entirely contradictory way. We had the faith in our convictions to go out on our own and are currently operating a new and unique advertising model.

We have welcomed outside advice

and constantly seek it out. Our business is based on employing diverse minds and drawing on eclectic experiences to deliver better answers. We like to get advice from obvious and obscure sources. We also like to think for ourselves and its always interesting deciding what advice to take, what advice to develop and what advice to ignore.

The hardest part is constantly looking ahead when you’re furiously busy

Running with ScissorsCreative agency.

Trading since: 2008Staff: 6 full-timeLocations: AucklandSector/industry: AdvertisingCustomer market: Companies after new idea generation using digital media.Website: www.runningwithscissors.co.nz

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in the here and now. It’s easy to get caught up in the day to day and neglect tomorrow. But if you’re not focusing on the future you’re not going to get any better and you’re not doing all you can for your business, your staff or your clients.

Managing growth is a constant challenge. You don’t want to grow too fast and stretch yourself too thin, but likewise, if you hamper growth, you’re not benefiting from the extra energy that growth brings.

Achieving a good work life balance is also difficult. We haven’t got that right yet. Building a business from scratch is hard work. But it’s also extremely rewarding. Life outside of work has suffered but if we focus on the business now, when it needs our attention the most, we believe the benefits will outweigh the cost. And the second anniversary of our business approaches we feel the balance is beginning to return.

We’ve had to make a couple of big decisions about the future of the

business, specifically around clients and revenue. We’ve been careful to avoid compromising the core philosophy of our business and we maintain that money is only one factor to consider when making any decision.

Our business has been shaped by family, friends, staff, clients, accountants, lawyers, bank managers, our business mentor and ourselves.

We’re particularly grateful to our staff. They share our passion and constantly

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Working on the business is essential. It’s really important to keep looking

ahead, even when it’s busy, even if you

have to start exceptionally early or work

ridiculously late to get it done. It’s also

important to identify mistakes and fix

them quickly. Mistakes happen. Admit

them, learn from them, fix them and

move on.

Don’t be afraid of the big decisions. They

can provide additional focus and remind

you of why you’re in business. Every

adversity has an opportunity hidden in it

somewhere. Share everything with staff,

the good and the bad. They’ll appreciate

the honesty, they’ll help you make the right decisions and they’ll make your business exceptional.

Advice I live by: “What makes you

successful now may be the thing

that holds you back in the future.”

Another one is a famous quote by

David Ogilvy: “If each of us hires

people who are smaller than we

are, we shall become a company of

dwarfs. But if each of us hires people

who are bigger than we are, we shall

become a company of giants.”

push us to be better than we are now.

They readily share the responsibility

for the future of the business which in

turn makes us stronger.

It’s vital to set your vision and

be true to it. We’re an advertising

agency and we’re in the business

of providing great answers to our

clients. We’ve built our business on

the belief that a great idea can come

from anyone and can be anything. So

we employ diverse and formidable

minds, we draw on eclectic

experiences and we let nothing stand

in the way of improvement.

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Part Three :

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Create a framework(Peter Drucker)

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The health of a business begins with a high demand on

performance. Performance is not hitting the bull’s-eye with

every shot. A performance record must include mistakes.

It must include failures. It must reveal a person’s limitations

as well as his strengths. The one person to distrust is one who

never makes a mistake, never commits a blunder, never fails in

what he tries to do. Either he is a phony, or he stays with the

safe, the tried, and the trivial. The better a person is, the more mistakes he will make - for the more new things he will try.

- Peter Drucker

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Performance is rather the consistent ability to produce results over prolonged periods of time and in a variety of assignments.

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- Peter Drucker

The idea of long-range planning rests on a number of misunderstandings. The future will not just happen if one wishes hard enough.

The long range is largely made by short-range decisions. Unless the long range is built into, and based on, short-range plans and decisions, the most elaborate long-range plan will be an exercise in futility.

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And conversely, unless the short-range plans (the here and now) are integrated into one unified plan of action, they will be expedient, guess, and misdirection.

Company facts

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At first, I had the whole attitude of, “No,

I don’t need help, I’m doing all right

by myself.” I just didn’t want someone

to tell me how to run my business. I

thought I was doing all right.

The business started in 2005. Initially I was doing Mr. Vintage on the side of my university studies, but eventually I pulled out of uni and went full time, moving into a house with a massive basement, which I decked out with Mr. Vintage gear, warehouse T-shirts there. It was our first makeshift office. As time went on, we moved into a store in Parnell.

One day, a friend’s girlfriend came into that store. She thought it was awesome,

but could also see that it could be bigger

than it was. She happened to be working

as a PA for a business coach and advisor,

called Marti.

She set up a meeting with him, and I also

saw him speak at this seminar they put

on - I was quite impressed by the whole

set-up. He gave a CD to take away with

testimonials. Essentially, I think I just

trusted him, so I thought, “I’ll give it a go.”

So often, it comes down to a gut feeling, a

trust thing.

Plus, I’ve always been very open to giving

things a go, to trying new things, and to

keep improving and growing the business.

Mr Vintage - Rob Ewan

Mr Vintage:NZ’s premium online t-shirt brand, stocking Australasia’s largest range of authentic 80s’ themed and pop culture t-shirts.

Trading since: 2005Staff: 10 full-timeGrowth: Currently at about 50% up on same time last yearTurnover: 2m+Location: AucklandSector: RetailWebsite: www.mrvintage.co.nz

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For the first time since I started the business; there was someone there that I could step out of the business with, that I could talk to. There are certain things you can’t talk to your staff about.

It was great to have someone to bounce ideas off and empathize with me. He’d been through his own business, which made a huge difference.

Finding the mentor that you need

specifically to help the business,

means defining what complementary

skill-set you want.

We were already quite strong with marketing, branding; but Marti was

really good at systemizing the business. I had come into business with an idea, but I didn’t actually know how to run and grow the operations – and he was able to give me those templated systems. The way that I looked at any mentoring expense was seeing it as an investment, not a cost. I went in with a mindset of, “I’m investing in myself. Even if I’m going to go with a coach for a year - I’m going to try and up-skill myself so much in that time; and bring on skills and add to what I’ve already got.”

“Acknowledge what you’re not good

at, read books or get people in the

business, surround yourself by people

who can help you to fix that weakness.”

InstinctWordPress, E-commerce and Game Creation software

Trading since: 2002No of Staff: 5Location: WellingtonSector/industry: Technology Website: www.instinct.co.nz

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We’re in our seventh year of business. We started as a small run-of-the-mill web development company and had some decent clients. Yet as the years went on, more development companies started to pop up in Wellington, and it became harder to win decent contracts.

So we reinvented ourselves to what we are now. We’re a company that creates free world-class open source software and we sell upgrades and services around it. We’ve taken the freemium business model and mastered it, and we make a bloody good income from it too.

Advice is an interesting one. Anybody can come up with a good idea or some “sound advice”.

I think most people are too busy doing their own thing to really stop what they are doing to help your business. You get a whole lot of people saying “you just need to do XYZ “ but the problem is that you might not be the right person to do XYZ.

My moment of divine inspiration was not about asking for help, but realizing

that I needed to bring certain people

with certain skills into the company,

to help us grow and do the stuff that

we’re not very good at.

If your business is stuck then pay

somebody to get it un-stuck. If you

can’t afford that then borrow some

money - or give away a percentage

of your business. It’s better to do

that, than to fail massively.

Our goal this year is to bring in a CEO

that can do things for Instinct that I

could never dream of doing.

The biggest obstacle we overcame

was figuring out that we needed to

reinvent ourselves.

Instinct - Dan Milward

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Company facts

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After graduating at 22 from Otago with a MBus and BCom, I signed onto the Telstra Clear graduate program but quit after a week, deciding that working for someone else wasn’t for me. At the time I felt I needed to do something completely different, to give myself time to find what I wanted to do in life.

I didn’t have a great deal of money but wanted to travel so decided a volunteer holiday abroad would be the best way to this. Unfortunately, after extensive research of various companies, the costs of the cheapest company I could find were still extremely high.

IVHQ - Dan Radcliffe

After 6 months working on my parents’ farm to get enough funds together I went and taught in Kenya for 4 months, travelling through Kenya, Uganda, Tanzania and Egypt. The trip was fantastic and really opened my eyes, however after meeting numerous people involved in volunteer tourism in various countries I still could not fathom how the trips could not be done cheaper. On returning home to New Zealand in 2006, International Volunteer HQ was born with the goal of becoming the world’s largest and most affordable volunteer travel company.

After extensive research for partner companies and another fleeting 6

IVHQSafe, quality and extremely affordable volunteering placements in developing countries all over the world.

Trading since: 2006Staff: 5 staff in NZ, over 350 employees worldwideLocations: New PlymouthSector/industry: Volunteer travelCustomers: IVHQ sends over 5000 individuals overseas annuallyWebsite: www.volunteerhq.org

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week visit to Kenya, Nepal, Vietnam and Thailand to establish initial partnerships and staff, International Volunteer HQ was launched in late July 2007. While initial progress was slow, by December 2007 we had grown enough to add Peru and Ecuador to our list of programs.

Over the past 2 years we have added Tanzania, Ghana, South Africa, India, Cambodia, Costa Rica, Colombia and Guatemala to our countries on offer and now send over 5000 people on our trips abroad annually. We employ 5 staff in New Zealand and through our local teams have over 350 staff working for IVHQ worldwide.

I have always appreciated the importance of trying to absorb as much advice and knowledge from others with experience. When travelling I have tried to network with local teams and companies similar to ours to get more ideas, but a lot of the time have had to employ a “learn as we go” approach. Friends from school and university, now practicing in marketing, finance and law have always been extremely forthcoming with help and support which has been a huge help.

Managing international staff has also been a steep learning curve. We deal with such a large number of cultures and our staff have a huge variety of backgrounds (some of whom have completed MBAs,

while some others are unable to read nor write) it can be extremely difficult and frustrating trying to work out what methods of management work best in each country.

Initially I probably tried to deal with too many people from too many different cultures and backgrounds and never managed to get 100% out of any of them. Getting a highly reliable person at the top of each local team who knows their staff and program, inside and out, and is able to delegate, manage and motivate their teams effectively, then report directly to our head office in NZ, has proven to be the best way of overcoming this problem.

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The people to have the biggest influence

on IVHQ have been my parents. Their

unwavering support from the day

I decided to start IVHQ and had to

move back home to make things work

financially, to present day when Mum

still works in the head office in New

Plymouth as part of our team has been

incredibly important in the overall

success of the company. We have also

been very lucky to be associated with

some very supportive businesses and

people in New Zealand, and we have a

very dedicated team of staff, not only

at our head office in New Plymouth

but throughout the world, who have a passion for what we are doing.

The most important piece of advice I’ve

been given: Preparation, planning and

self belief are critical to success.

Getting the confidence to start the business with a high chance of failing and walk away from the standard safe 9-5 job out of university was a tough decision to make. By researching the market thoroughly, and planning for a variety of highly likely outcomes, I was confident I could make the company work.

Looking back over the first 3 years of the business, new ideas or things that haven’t worked have generally been directly related to a lack of planning or

research on my behalf. Self belief and

confidence have been very important,

as the business has progressed. Despite the relative fast growth of the company there have also been a lot of moments where you question yourself. In these times, remembering to be confident, to believe in your abilities and what you are doing has been crucial.

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- Dan Radcliffe

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- Jim Collins

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Part Four :

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The e-myth (Michael Gerber)

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The trap with a small business is

that you want and sometimes try to

do everything yourself but you learn

quickly enough that you can’t.

After visiting my favourtie city of Paris a couple of years ago, I noticed the extremely wide range of legwear available. All manner of patterns and designs were available so I thought, why should New Zealand miss out on gorgeous leggings and tights? So Lucy Lou was born, in about September 2009. All our product is printed on Columbine - we’re 100% local.

Whenever I’m wondering about my next move, it usually comes back down to money. The thing is, this is my money, and if this goes down the gurgler, that’s a lot of my own money lost. Cashflow is the biggest stress.

You know, to be really honest, lately I’ve just been feeling like I’m drowning, and

Lucy Lou - Nichola Tomas

Company factsLucy LouContemporary NZ made legwear.

Trading since: 2009Staff: 1 full-time, 2 part-timeLocation: Upper HuttSector/industry: Consumer goods (clothing)Website: www.lucylou.co.nz

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my lifeguard hasn’t come out to get me yet. I’ve been thinking of getting a grant to help me through, but I don’t have the time to go find the information, let alone spend time writing a big grant application.

What gets you through, are the little things: the order got out. Or that this customer called back and liked the product, and wanted to order more.

Recently, my daughter Lucy had to get an operation, and so she stayed in hospital. I was with her until about midnight, then had to come home, I was up until 8am, then back with her, having to do the orders and printing when I had spare moments. It’s a very manual process - I print and design the tights myself.

Since I feel like I’m just a mother, and

haven’t been formally taught anything, I

started out with just a dream but no idea

how to execute it. My mentor, St John

Craner, has been an incredible advisor - to

me, he has been the most amazing person.

It’s my business, and I want it to reach

the stars, but he has taught me to

celebrate the skills I have, and to ask

for help with what I lack.

I found St John Craner through

approaching Insight Creative, which used to

be Origin Design. They have been amazing,

like a big sister that keeps me honest,

especially Fiona Marianne. Through their

special support for small businesses, they

gave me a huge boost through doing the

56 Lucy Lou branding, as well as setting up

our website.

St John Craner, through his own company Distinct, has sort of just stayed with me since then, and we’ve continued to work closely together ever since.

When I saw the packaging for the first time, I cried. I am so excited and passionate about this. And then at times I could chuck every single pair of tights away. Other business owners must have had that same feeling at some point: the worry that people won’t like, or buy, your products and services.

What I’ve learnd is that you can’t be

afraid to ask for advice from those

who know a certain area better than

you..

Suddenly, they may say, “Oh, I know

someone who could help with that.”

Before you know it, through that

networking, someone who was once a

stranger, comes into your path to get

you to the next point of your journey.

The other thing I’ve learnd is to not

let the knockbacks get you down.

Luckily, I have great people around,

like Glenn and team from Digitex in

Tawa - he always has amazing ideas,

and a “We can do anything” attitude;

Sally who prints for me, is invaluable,

with a wicked sense of humour; my

lovely husband Peter; and of course

the little girl herself, Lucy.

You have this passion for this thing,

and you think that it can’t possibly

fail - and if someone rejects your

product or service, you want to say to

them, “Don’t you know how hard I’ve

worked on that?” And you just have to

pick yourself up and get on with it.

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Technician TechnicianManager Manager

Entrepreneur EntrepreneurStressed owner does everything

Happy owner delegates

58

“The E-myth Revisited” is a book about bringing order to chaos within small business. The entrepreneurial myth, came from the assumption that business success is achieved by simply wanting to own a business, investing capital,

The Entrepreneur, has the vision that drives the business forward; and is the dreamer. He is the creative, innovative energy. The Entrepreneurial Seizure hits when a person decides they want to start a business.

He looks for skills within himself that he can create a business out of. The mechanic opens an auto shop. The web developer starts an agency. This refers to the character of The Technician , who owns the skills that make the business work. He is the present; in charge of doing what needs to be done, and building what needs to be built, in order for the business to run. When a business is starting out, the technician is usually the most prominent.

The Technician, if left to run the business, will get tired as chaos sets in. The baker will be so busy baking that the running of the business itself - the accounting and strategy – will become neglected. The Entrepreneur’s energy will fade. And the Manager might take over.

The Manager is the past – the one in charge of bringing about order and planning. He is practical, problem-focused, detests change and sticks to time-tested solutions.

The e-myth = the myth of the entrepreneur

The characters

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None of the characters can effectively run the business by themselves. The Technician depletes the energy of the venture, the Manager can deplete the soul, and the Entrepreneur can remove much-needed order.

As the business matures, and the owner seeks outside help, then the characters begin to get introduced to one another, and a comfort zone emerges where they can exist together.

Eventually chaos emerges and the business owner either chooses to get small again, to go for broke or to fully survive this phase and move on to the next one.

At this point, the business reaches its maturity phase. The entrepreneurial perspective and model for the business approach their maturity too. The perspective starts to recognize a wider view of the business’s future and the model can now serve particular functions and deliver assignments for the technician, the manager, AND the entrepreneur.

Some businesses also go through the Turn Key revolution, which refers to franchising opportunities. As clearer systems and processes begin to emerge, and the franchise possibility becomes visible, a business can then scale up very quickly in a short period of time.

and setting a targeted profit. In reality, the success of any business depends on numerous factors, which should be examined and connected to give the entrepreneur a holistic view of the reality of what it takes to make a business succeed. Michael Gerber talks about how when a baker opens a bakery, he needs to remember that the skills needed to make a bakery successful are different from those involving an oven. His book’s tagline is: “Why Most Small Businesses Don’t Work and What to Do About It.”

The phases

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I grew up with a Grandpa who home-

brewed beer, so it was always there;

but I wasn’t going to be a brewer. I did a

commerce and management degree; then

traveled to the States on an exchange.

While I was there, I tasted some horrible,

bitter beer. I then came back to NZ, and

worked for export company for 3 years;

then moved to LA, and got into brewing

over there, and hung out with brewers.

Then I came back to NZ, and realized,

“Hey, I can do anything I want - why

don’t I be a brewer?” So I went out to this

brewery in East Auckland to ask for a job,

and they refused. I asked them for a year,

and they could see that I was keen. So I

threw in a high-paying job that I hated, for

a minimum wage job at this brewery.

While I was managing the brewery, I

realized we had to make it profitable, and suggested making a new beer brand, which we did. Ultimately, this became Epic. After a year, the brewery decided they’d have to spend a whole bunch of money to make it fly; so in 2007 I bought it back, and kept making beer.

In the States, I had the chance to see what craft beer could become. I saw in NZ there was a niche for myself – my passion is making great beer and sharing it with people.

We outsource everything. Contract warehouse, logistics, everything. We use Xero. I used to be the guy who printed out the invoice, and put the courier sticker on the box. That was taking up more than

half a day, every single day. You have

to get to a certain size of things to be

Epic Beer - Luke Nicholas

Epic BeerProviders of specialist beer.

Trading since: 2006Staff: 1 full-time, 1 part-timeLocations: AucklandSector/industry: Consumer goods (beverage)Awards: Earlier this year RateBeer.com announced the best beers of each region of the world. For the Australian and New Zealand region, Epic Armageddon IPA was rate #1 and Epic Pale Ale rated #2. Website: www.epicbeer.com

Company facts

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able to justify that extra spend on an

employee - and it was just a growing

phase - figuring out what takes up

most of that time, and figuring out how

to get someone else to do it.

I’ve been through a bunch of business courses, and some of them are really cool and have sound bites that stick. Otherwise they just reinforce common sense.

A lot of it is about getting out and

learning along the way.

NZTE helped out but we were trying to get to another tier to advisors – Beachheads.

However, because we’re too small, and are not doing over 5 million in sales, we don’t have access to those resources.

62We got a grant from NZTE for building our brand, and a grant for market development, in the UK. That allowed us to get our brand right the first time, and we spent a lot of time and money to

get that right. Brand was really, really

important.. People had to want to pick Epic off the shelves in supermarkets and in bars.

I ended up interviewing ten companies, and it took a whole week, where they came and pitched to me. I met boutique consultancies, big agencies; what I wanted was a really good marketing partner. My main criteria were: they had to able to explain their process with me, they had to get on with me, and they had to like beer. We had obstacles with one of the mentoring programs we went through, where the personalities just didn’t really click.

There are things in life that don’t

always work out at the time when you

take them in, but then you get in a

better position, and find someone or a

situation that’s better suited to you.

I was lucky – because I was involved with realbeer.com – and this has opened up an entire network in the states, to key brewers and what they’re doing. It helps me spot the new global trends, and keep track of what’s going on in the market all around the world.

In terms of business advisors, I picked

stuff up from talking to people. I also

looked at a wide range of different

resources available.

The communities that I’ve built are around social media - Twitter, Linkedin,

and Facebook. These are the tools that I use to market the brand - it is an opportunity in itself that has become valuable.

I’m using those networks to find an assistant. It’s powerful being able to tap into your friends’ friends, and their friends, and their friends. The way I work is through word of mouth and building networks.

When I first started using Twitter, there were 450 people in New Zealand on it. I used it more like a personal diary rather than anything else. Now it’s a way of being able to share interesting stuff.

When I was traveling, it was a great way of saying, “Here’s my beer, here’s my location.”

63“I think when it comes to mentors or advisors, it’s really important just to be able to get along with them, for your personalities to click. “

I actually found a venture capitalist through Twitter – we’re all but ready to close a deal with her.

Someone told her to follow me, and then I checked out her website, and went, “Wow – this is exactly the kind of person we’ve been looking for.”

New Zealanders are so entrepreneurial, but we don’t have enough access to those resources. A lot of the reason why small businesses fail is because they’re under-resourced and under-capitalized. The pattern is that in the first year, if you’re profitable, your money’s flat out in stock, and in making more profit – making more to sell more. And so we lack the resources to grow.

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Missing LinkSpecialist social media marketing company.

Trading since: 2006Staff: 2 full-timeLocations: Auckland, WellingtonSector/industry: Technology, servicesCustomer market: Companies that are trying to make the world a better placeWebsite: www.missinglinknz.co.nz

Missing Link has been around since

2006, but we really crystallised our

focus on social media for do-gooders

around a year ago.

When I first started, I attended a bunch

of courses at the CDC. I put together

an Advisory Board over a year ago and

they keep me honest.

My Board has a great ability to help me

plan strategically while appreciating

the constraints of the business. I

absolutely would not have been able

to develop Missing Link to what it is

without their input.

So many business owners I see think

they have it all figured out; in my

experience, we’re all figuring it out

every day, and the more brains we can

throw at a problem, the better!

I’m my own biggest obstacle. For example, I don’t just think, I KNOW that the more clearly I focus on our core proposition, the more powerful the business becomes. But I struggle to turn away other business opportunities that come through the door. I think this is a classic entrepreneur’s struggle - we hate

to say no! But, perversely, saying no

often creates more opportunities than

saying yes.

I have had terrific mentors and advisors, who all give me excellent business guidance, but also really get that Missing Link is about more than the bottom line. So they challenge me to set

Missing Link - Kaila Colbin

Company facts

65

grander visions, to create more inspiring opportunities and objectives, and to be unafraid to make Missing Link a world-changing organisation.

You have to learn, every day: from your support network, from formal sources, from books, or from your customers and the people in your business. The moment you think you’ve got it sussed, it all falls apart! You have to be really awake to the fact that your business is changing constantly, your customer needs are changing constantly, your staff dynamics are changing constantly.

I’ve also learned it’s more fun and

interesting to chase your grandest

vision than to chase the one that

seems most achievable.

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I worked for the export-import

corporation for about 14 years, and

when I left, I saw a niche opportunity. We

developed markets mostly in Asia around

paua shells, and the business started

growing on that. We would be the largest

traders of seashell in the Asia-Pacific

region, if not the world. Commercial

shells - as in, making buttons, shell

sheets for laminates; we buy and sell

shells from Mexico, Chile, and send to

factories in China, Vietnam, Phillipines,

Italy. A lot of them come from Yemen,

the Red Sea, then are made into buttons

and sent to Turkey - and so we get paid

from Turkey. On the back of that we

have always been exporting foodstuffs,

particularly Whittaker’s chocolate, mainly

to Singapore, Malaysia, China, just

opening Indonesia, Philippines, Korea,

growing quite quickly.

We’ve had a business plan, but I actually

think that a 10 or 20 page business

plan is a thing of the past - a strategy is

much more important. About six months

ago the bank - Westpac - invited us to

one of these things put on by Results.

com. I think there’s some connection

to Jim Collins there. We went along,

they gave us a free four-hour thing and

then we decided to go a bit further, and

did a whole day session. It’s been very

good. They did our accounting as well.

Our accountant’s a young guy, and very

interested in the business - as a result of

Asil Group Limited - William Sommerville

Company facts

Asil Group LimitedPrivately owned international trading company.

Trading since: 1998Staff: 3 full-time, 1 part-timeLocation: WellingtonSector/industry: Export marketingCustomer market: Global, with emphasis on AsiaWebsite: http://www.asilgroup.com

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that, we meet every week, about an hour on a Monday morning. There’s a list of things we go through, and we review, and look at where we’re going.

Our BHAG - Big Hairy Audacious Goal is in fifteen years, to be the biggest exporter of branded NZ food and beverages. I think it’s vital to be focused

on what you do best - decide what

you’re going to do, stick to your core

business, and try and be the best at

it. That’s what we did without the shells, and food marketing.

We made that conscious decision to put more emphasis on the food business because shells are a natural product and

sometimes limited. At least with the food

products we know about NZ’s image, we

know that as long as you’ve got enough

cocoa beans, and factories, you can keep

making chocolate.

I believe that the key to any business

is relationships and building

relationships. For instance, we’re

looking at exporting corn chips. We

found a little company in Wellington that

makes fantastic corn chips; and what we

can do for that company is instantly link

them into the distributors we’ve got all

around Asia. It’s taken us years to find,

and nurture, those critical relationships.

Those relationships are everything when

it comes to exporting.

We gave a talk at the ExportNZ breakfast recently about the intermediary solution for exporters. There are so many small companies in NZ with good product and good capacity -but exporting is daunting for them, what with the freight documents, language barriers, currency, foreign exchange rate, and so on.

The one thing that I always stress when I talk to people about starting a business - you’re probably going to lose money for the first two years. It’s very difficult to go straight into a profitable situation - you’ve got to to be ready to make a serious investment of time and energy. It doesn’t happen overnight. We actually got help from the Chambers of Commerce back when we started. I got

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a business lead from them very early on, and it led to selling a container of paua to Hong Kong with a $20,000 profit - which was a lot of money in those days. I figured that paid my subs for the Chamber of Commerce for the rest of my life; and I’ve been a keen member ever since.

Everyone gets something different from those organisations; for us, it’s a good networking experience. I’m also a member of export NZ. I think networking is really important - you can get that from all sorts of places. friends of mine in Business Networking national, more than one in Wellington.

I’ve found that Kiwis like helping kiwis; if people ask me for help, I’m always happy to go see them, and not just if there’s something in it for us. When I hired Andrew, I went to an employment lawyer specialist, who charged me about $450 an hour for something he just regurgitated from a template. I got quite upset and was talking to someone about it, and they told me, “You know, you can go to the Employers federation, Chambers of commerce, and get the same thing for nothing.” So that’s a useful tip.

There are always obstacles - exchange rate’s a really big one for us. The main

way we overcome that, is to sell wherever we can in NZ dollars. Other hurdles continue to crop up too - with change of documentation, and duties. Yet my philosophy is that if you haven’t got any problems, you haven’t got any business.

When I started the business, a former general manager of NZ Forest Products mentored me, who I worked with for 13 years. The most important thing he taught me about was honesty and reputation. Your reputation is critical - that’s how people will decide whether or

not to come to you. A reputation takes a long time to build up, and just five minutes to lose.

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70

Part Five :

71

Good to Great (Jim Collins)

72 Scaling the business (Read more in Jim Collins’ Good to Great, page 120)

The start-up failure rate is high because start-ups often respond to growth and success in the wrong way. A successful entrepreneur is filled with creativity, imagination, and venturing out into new landscapes.

Soon the company grows and starts to stumble over itself – with an overload of new customers, orders, products and people. Lack of systems, accounting, strategy, and lack of hiring, creates problems with customers, time management, and cash flow.

Someone says, “Something

needs to change around here.”

Some of the original staff leave, and begin another start-up

Everything just carries on.

At some point, the company tries to reinvent itself.

Processes, systems, procedures and checklists start to emerge. What was once a flat structure, where everyone felt equal, now becomes a hierarchy, with “us” and “them”.

There is order from chaos, but the entrepreneurial energy also dies. Members of the founding team complain that things aren’t the same anymore. The creative magic begins to fade.

1 2 3 4 5CAPABILITY

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Effective strategy turns it into either lifestyle or •scaleable business,Based around the lives and schedules of the founders•Lack of processes and systems•Experimentation phase•

Effective strategy builds exponential growth•Independent of founders•Clear systems and processes•Franchise model•

Start up Scaleable business

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Annah StrettonStretton Group is based in a multimillion dollar purpose built head office building allowing Annah to factor for growth; particularly in the global fashion market.

Trading since: 2003No of Staff: 145Locations: Stretton Group remains based in the Waikato Sector/industry: Consumer goods (fashion)Customer market: 27 fashion retail stores throughout New Zealand, export accounts to the U.K., Ireland, Europe, USA (California) and AustraliaAwards: 2007 Winner of the Zonta International (NZ), Woman of the Biennium; Member of New Zealand Order of Merit for Services to Fashion, Business and the Community; 2009 New Zealand recipient of the Veuve Clicquot Award. This global tribute acknowledges female achievers in business and industry who exemplify the qualities of Madame Clicquot, the woman behind the successful champagne house Veuve Clicquot.Website: www.annahstretton.co.nz

Company factsI’d been at art school in NZ; and had gone on to copmlete a chartered accountancy degree. I worked initially for a clothing company as their accountant; then an opportunity arose to join their design team. Four years later, I went out on my own. Now we have 30 domestic stores which we run as a vertical operation, and are exporting globally.

New Zealand women are the queens of small business. And they are often very happy to remain in a small environment: they’re doing something they love, they’re self-employed and there’s flexibility around bringing up the family, so in many ways the operation never eventuates beyond hobby status. You’ve

got to have great levels of discipline

and passion, amongst other things, to

grow a business to that next level.

Annah Stretton Clothing Company

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Women can have a certain mindset:

they drive hidden agendas, avoid

confrontation, and there is a personal

and emotive element that seems to enter

into their business dealings. If we can

remove ourselves from the emotion

and think in a more black and white

way, we can become more effective in

both life and business.

I have a common-sense approach to

business: I find it very easy to deal with

challenges. I just take the relevant action

and move on. I don’t deliberate or angst

and I don’t revist them. The challenge is

getting the women I employ to also think

in this black-and-white way.

My father used to say that business is

about sticking to the knitting - and that

phrase is something I come back to especially during a recessionary year. Business is also about profit. You’ve got to work out how to make your culture work in order to maximise your profit.

I constantly advise people to find others they’re inspired by, or who can add value to their life. You need to be constantly listening and learning.

My business is currently trading at around 10 million, but to take this to the 20, 30, 40 million level, I will also need to look to engage people from relevant environments that will enable this growth.

A woman who’s started working for us at an advisory board level has come out of a big business UK environment. The

76

3 or 4 hours spent a month, talking to her about the areas in which I wish to grow and develop this business globally, are invaluable.

Getting things done relies on one

thing: incredibly good discipline.To run a good business you need to be disciplined, in your time and people management.

I use the 80/20 rule. If you look at a day as 100 percent, 80 percent of the stuff that happens is peripheral - it can be delegated, left or ignored. A lot of people get sidetracked in a day and waste time. I will always focus on the 20% to ensure my day tracks efficiently and productively.

I also get up between 4-5am every day and I work on my business until 9am from my home office. When I’m in the head office, it’s reactionary, as there is so much to be actioned from moment to

moment. That morning or growth time

is crucial, to take my business to the

next level. That’s when I set up my day, work on my dreams and schemes and identify the 20% so that I know I won’t get sidetracked.

I see so much mediocrity in business, and essentially it comes down to a lost passion, and an inability to run a sustainable and profitable business. I never want to be seen as average. I love what I do after 18 years in this business, although the people I interface with

“Never, ever let mediocrity creep into your world. It will stifle your dreams and passions.”

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- Jim Collins

daily constantly provide challenges; I

still love my products, my environment,

and the team that surrounds me. Every

day I strive to take my operations to the

next level - keeping that passion alive,

for the products and services you have,

is so damn vital. I’m still learning, and

constantly seek challenges to extend and

grow myself. I will continue to learn until

I’m six feet under.

There are times when I’ve had to

reinvent, but I see that as healthy, simply a new way to drive my business.

Lots of people miss opportunities by

simply being time poor, but my life has

been shaped by opportunities, so it is

important that I have an open mind and

assess them all before I move on.

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- Jim Collins

79

The Good-to-Great Companies faced just as much adversity as the comparison companies, but responded to that adversity differently. They hit the realities of their situation head-on. As a result, they

emerge from adversity even stronger.

80 Hell Pizza - Callum Davies

I was introduced to the pizza business at the tender age of 15 and worked as a pizza delivery driver. By 16 I had progressed to being a manager. At 17 a friend and I jointly owned a carpet cleaning business, debt collection contracts, and a furniture removal business. At 18 I bought a pizza parlour in Wainuiomata that had gone out of business.

It was this place where I tested out what would eventually become Hell Pizza. Two years later I relocated to Wellington, and the first Hell Pizza store was born. Here we also established the mission of our company, which still remains the same: “Damned tasty food and a fun working environment.”

Stu McMullin was an old classmate of mine who had been in a string of corporate jobs with Westpac, ACC, ACNielsen, and IT Manpower. One day over a game of golf, he asked me if I wanted a partner, and the deal was struck. We worked between 90 and 100 hours a week, opening a further three stores, and doing most of the renovations and outfitting ourselves.

So the business was definitely 100% organic and a ‘seat of your pants’ sort of thing to begin with. The only plan was to turnover enough to pay the rent – once that was taken care of, then more goals were set. In 2001, Warren Powell came on board. He had managed the Fletcher

Hell Pizza Food chain that provides online order forms for pizza, pasta and salads.

Year Established: 1996 Year of First Franchise: 2001Staff: 300+ Locations: 64 stores nationwide, as well as UK, Ireland, Australia, Canada Sector/industry: Consumer goods (food) Customer market: 20 to 39 year oldsWebsite: www.hellpizza.co.nz

Company facts

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Challenge GIB franchise and been the country manager for Burger King NZ, as well as Hire a Hubby’s General Manager. He brought his franchising expertise, and I’d say that’s when the “unholy trinity” was born.

When we decided to franchise, we had those four company owned stores, and dealing with managers was too hard. By that point we had already decided that franchising was the best way forward for our business. So we ended up financing two of our loyal and experienced staff into our stores, entrusting them with quality control and making it a point to ensure new franchises were always up to speed. The other two stores were sold.

I’ve always strongly believed that to make

the business successful, the people

who drive the business need to be

the main focus. We’ve always wanted Hell Pizza to remain a fun place to work, and the only proof of that is our staff satisfaction. We didn’t need to advertise for any of the franchises because there was always a steady stream of Hell employees and young entrepreneurs wanting a slice of the action. We went from four stores to 66 in four years - with revenue accelerating from $1.2 million to $55 million over that period.

All us, I was in charge of marketing for Hell before we sold. We had a lot of fun – quite often, I had to hold my business partners back, as I am the conservative one. Initially, I wanted a fun name that I could theme the business around. I liked the Hell Theme but thought it too risky until I asked lots of people and went to

a graphic designer to see how we could pull it off - we then rebranded to Hell.

We’ve always tried to mix creative

marketing with solid strategic

thinking. Having identified our target market as 20 to 39 year olds who were happy to use the internet, we launched Hell’s online pizza ordering system, the first to be established in New Zealand. Saying that, we had always been proud to be the underdogs, the little guys against the multi-nationals. Then we got to a

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certain number of stores, and could no longer deny that we had become a chain. That was an obstacle. The way we saw it, we just had goals - even when we were at 38 stores back in 2005, we had 66 planned for 2006 (666 all the way)!

As for advisors and consultants, initially I would ask anyone I meet whom I valued their opinion. Much later on we worked with accountants on preparing an exit strategy from the NZ market. Some advice I would take with a grain of salt, others more seriously - it would depend on the background of whoever was giving me the advice.

Hell was sold to TPF, owners of Burger King, reportedly for $15 million in December 2006. The money from the NZ sale was used to expand

internationally - we focused on building the brand overseas.

Hell Systems Ltd owns the Hell trademarks and other intellectual property (IP). While the company had spare cash, Stu would register Hell’s IP in countries with potential markets. Master franchise rights have been sold in Oz, Ireland and Canada. Hell would get $250,000 for each master franchise licence for a country, $10,000 for each store opened, and a 1 per cent royalty (we aim to keep the initial price down to ensure franchisees are not overburdened with financial obligations).

As Hell was doing well overseas, that freed up capital to buy back the NZ business. We’ve largely avoided debt by accumulating savings before tackling the next stage of development.

Hindsight is always great. I made many mistakes along the way (and

I’m still making them) - but many

times I’ve learned things that I

never would have, had I not made

the mistake.

Managed growth has been an obstacle in itself. To be honest, the money was always secondary. It has always been about having heaps of fun and having a good time with the company. And as long as everybody is doing their jobs and doing what they said they’d do, then we’re all happy campers. I’ve always believed that business really is a lot about relationships, whether it is franchisees, suppliers or customer -

you need to treat them right - it’s

not just about the dollars.

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84

Cookie time - Michael Mayell

I started Cookie Time at 21, but my story starts earlier. We talked about money around the dining table growing up, so by the time I was 18, I had decided that I wanted to own a business. Over the next couple of years, I wrote this goal down - that I wanted to be a millionaire by the time I was 30.

I did a basic business course at Christchurch Polytechnic. Then I got a job that took me to America, to promote skiing in New Zealand. There, I stayed with a small business owner called Diana Corbett. She was very encouraging about me starting my own business, and took me to a retail chain store that was doing well, Mrs Field’s Hot Cookies, and said, “Maybe this was something you could do.”

Cookie timeCookie manufacturer producing the Original Chocolate Chunk, rated NZ’s #1 most popular cookie. Cookie Time is an iconic New Zealand brand and market leader in its category, and is closely connected with education through the work of the Cookie Munchers Charitable Trust.

Trading since: 1983 (still privately owned by brothers Guy and Michael Mayell)No of Staff: Over 80 full time staff, with an extra 30 staff and 69 tertiary students employed during the busy Christmas periodLocations: Factory headquarters in Templeton, ChristchurchSector/industry: Consumer goods (food)Customer market: 45 independent franchisees delivering stock to a range of outlets across New ZealandWebsite: www.cookietime.com

Company facts

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By the end of that six months, the job was over, and I was now sitting in New Zealand with no job and $10,000 in the bank, and I’m 20 or 21 years old and it’s like, “I guess it’s time I started that business that I said I was going to start.” I started two businesses before I started Cookie time, with limited success.

So then I went to a couple of bakers and asked them to bake me a chocolate chip cookie. They all baked me this very, very average cookie. So I rang Diana and she sent me the North American housewife cookie recipe - the ‘Tollhouse cookie recipe’ which comes at the back of every Nestle chocolate morsels pack. These chocolate chips are nothing like we had in New Zealand - I knew I had to have big

chunks of chocolate. One thing lead to another and I finally got Cadbury’s dark chocolate and unwrapped 250g of it. I put this on a bacon slicer and found I could chop 6 or 8 bars at a time, into chunks.

So I baked these cookies myself from the Tollhouse recipe, gave them to everybody, and they thought they were delicious. I thought, “I’ll try to find a bakery, to bake my cookies at night when they’re not using their equipment.” So I got the yellow pages out, and started knocking on doors. Six said no, and I was about to give up, when the seventh baker said yes. I’d come in at 7pm after he had gone home, bake through the night, clean up, and be gone by 5 or 6am, when he came back again.

Now I needed the outlets. So I started knocking on doors in Christchurch. I told people, “I’m making these chocolate chip cookies, I’m going to be delivering the first batch on Monday the 7th of February, wanna take a jar?” 70 out of the 71 stores I spoke to said yes.

On Sunday the 6th, I go into the bakery with my mother and one staff member, and the baker who has to teach me how to use the equipment. And we just take that scale the recipe up 200 times. It’s midnight when we drive home. I deliver my 35 jars, Mum delivers hers. I go back to the flat and wait by the phone, having no idea whether these things are going to sell. At 3pm that day the phone started ringing - all these outlets had

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completely sold out. They were asking for more. And so it went on for the next six months.

Essentially I’m cruising along, doing well, and I decide that I need a better way of breaking up the chocolate than the bacon slicer. So I looked in the Yellow Pages and found a guy who looked like a bit of an inventor. I went around to see him and he ended up designing me the chocolate crunchers. At the same time, he became my mentor. I was 21, he was 65.

He introduced me to a goal setting program called the Dynamics of Motivation. We talked about visualisations, affirmations and goal setting, and how you create your own reality - how success comes to you, and how happiness is a state of mind. It was all sorts of amazing stuff. If you want to know, what is the absolute most important thing in goal setting - write your goals down, and put a date to them. The difference, between a written goal and one in your mind, is night and day. In your head,

it’s an intangible thought that’s not measurable, but the minute it’s on paper, it is into the world.

That December, my younger brother Guy comes back from Massey Uni for his summer break, where he’s been doing business studies. Sales have suddenly, for no apparent reason, slowed. A lot. So I sit down with Guy and he has a look at it, and for me, it’s just so nice to be able to share this stuff with someone - someone to just talk about this stuff with.

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It took a few years for us to figure it out why sales dropped over summer. Eventually we realised that people tend to diet more to look good on the beach, they’re also on holiday and away, and also, schools and takeaway bars completely close down. That inspired us to come up with Christmas Cookies, which has gone on to be one of the most successful products. The reason we succeed is because we try so many things that don’t work. It’s a numbers game, just like selling encyclopaedias.

So Guy just loves the practical side of business so much and I loved having him. We worked and lived together for at least a year. We were literally working, eating, sleeping. But it was heaps of fun, and we were on fire. We were making tons of mistakes and having lots of successes too. Guy and I are a very complementary partnership. It’s one of the biggest factors in the success of the company - I’ve basically got my head in the clouds, he’s got his feet on the ground. I’m the accelerator, he’s got his foot on the brake.

This business has been going 27 years. Guy and I have been working at home office for 20 of those years. We’ve both been one step removed - we’re not in there everyday. There have been times where we have to take an office in town, and get in the business again. Yet working from

home means that we’re in a separate

headspace, and it’s a better place to

work on, not in, the business.

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At one point, I wanted to get out of Cookie Time and do something different, partly because after 15 years, I was a bit tired of cookies. One of the best things was getting out for those two or three years, because it allowed me to come back into the business with renewed passion and enthusiasm.

We’re about to open our first retail cookie store in Queenstown: an immersion experience, with a cookie

bar where people can go order fresh

cookies; NZ music playing; touch

screens; the whole deal. We basically

want to take Cookie Time global and

are looking for a strategy to do so. If

you don’t have an inspirational goal

that you’re working towards, who’s

not going to get bored? You just have

to have something that you’re excited

about. In business, you always have to

be aiming for the next rung up: if you

want to be a really big local brand,

you need to be a national brand

in NZ. If you want to be a national

brand in NZ, you need to aim to be

a global brand. Say, if you move into

Australia, you’re forced to look at

things differently; then you come

back to NZ with different ideas that

make your NZ ideas better. That

new landscape means a new way

of looking at things.

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- Napoleon Hill

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Conclusion

What the business we’ve featured all have in common is the desire to create great businesses. And we at CapabilityNZ share that desire and are focused on accelerating your progress.

The “capability journey” is just another way of talking about

business success– but essentially, growing your business means realizing this: someday, to some extent, starts today.

The journey does not just magically unravel as we dream it to be - it requires action right now. It

demands allocation of resources, work, and planning, right now.

We at Capability NZ hope that this book is just the start, and would like to partner with you on the journey from here.

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Business journey

94 we would like to thank our partners...Business New Zealand

Economic Development Agencies of New Zealand

New Zealand Business Excellence Foundation

New Zealand Chambers of Commerce

New Zealand Institute of Chartered Accountants

New Zealand Institute of Management

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www.howtheydidit.orgwww.businessassessment.co.nz

Where to from here?

You run a small business. You want to grow, so let’s turn a long-term plan into a short-term reality. This resource covers 14 Kiwi business owners – from the little-known to the well-known (Hell’s Pizza, Cookie Time) – and mixes their real-world Kiwi experiences with leading global business thinking - the E-myth revisited (Michael Gerber), Good to Great (Jim Collins), the 7 Habits of Highly Effective Companies (Stephen Covey), and Peter Drucker.

We hope to motivate and inspire small businesses to spend more time on their business, not just in their business; so that their business capability improves – by telling the positive stories of great Kiwi businesses, and how their founders grew them to be what they are today.