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Taking Collective Action

Taking Collective Action
by Phil Latz

Hi, welcome to the ninth blog in my personal growth series that I hope will help you become more successful in your business.

As a business owner myself for many years, I understand the challenges that you face.

Today I’ll be sharing with you about taking collective action.

The words ‘collective action’ may bring to you connotations of trade unionism, collective bargaining and other notions that will raise the blood pressure of many business owners

But the collective action also benefits business owners.

In any industry, individual businesses do best when they understand that they’re part of a wider ecosystem and need to stay connected, just like a branch and its leaves will die unless they’re connected to the tree.

You can see examples of this throughout the history of business. It often leads to the geographical concentration of certain businesses within a particular area. For example Silicon Valley for IT companies, Hollywood for movie making and many more.

Regardless of what industry you’re in or where you’re located, there is almost certainly a trade association that you can join in return for paying a membership fee. These associations perform a wide range of roles. Most important is lobbying to government and other related agencies for favourable treatment of your industry. 

They might also run training, legal advice services, annual industry awards and a national trade show.

They might manage an accreditation scheme, with minimum standards that members must meet to be able to first receive and then retain accreditation.

They might represent your industry on an Australian Standards committee or other related board that sets the requirements for products and services in your industry. Your industry association might also set a code of conduct and minimum standards for its members.

Another important asset that can only be created collectively is industry-wide data.

It’s invaluable to know what is happening across your industry in relation to total sales, trends in sales, stock holdings, average prices and so on. 

Usually, the only way this information can be collected is through a critical mass of industry members agreeing to take collective action, and share their data.

This is usually done through a third party auditor so that individual figures remain confidential and only the aggregate data is shared.

Related to this is benchmarking. The Australian Taxation Office runs a benchmarking program for about 100 different industries. If you’re in one of those industries, you can go to their website and see how your business compares, across a range of different measures such as your sales, profitability, the rent that you pay as a proportion of your turnover and so on.

In other cases, industry associations do benchmarking reports like this for their own industry.

Few people would dispute that all of these different roles that an industry association typically undertakes are worthwhile. But the rubber hits the road when it comes to people forking out their precious cash to join. Then there’s the next level commitment of proactively getting involved or even serving on an expert committee or the board of directors.

This will involve volunteering a significant amount of your precious time for no immediate, direct financial benefit. So why should you do it, when some of your competitors will always be freeloaders?

I can speak to this topic from first-hand experience because I spent a number of years serving on the board of Australia’s bicycle industry association as well as the boards of various other charities and not for profits over the years. 

There are benefits from a commercial perspective. Sitting on an industry board, allows you in a non-threatening environment to make deeper contacts with your peers who are often also your competitors. It also keeps you up to speed about new developments in your industry and even lets you help shape key industry wide decisions.

Often the lunch or dinner that may happen after the meeting, is as valuable as the meeting itself.

Of course, there has to be a balance of your time. You can’t sit on every board and committee. But it was interesting for me to observe that it was generally the busier, more successful business owners and CEO’s who were the most proactive on the board.

I hasten to add that in all of this discussion about taking collective action, I’m not talking about restrictive trade practices such as price fixing, which is illegal.

But there’s plenty of legal cooperation that can be of mutual benefit. This could be everything from sharing notes with another industry member through to sharing logistics to cut costs, such as warehouse space or shipping.

Sometimes in extreme events such as a bushfire, flood or other disasters you hear of stories where competitors directly help out the affected industry member through lending of stock, credit or equipment. To me, this is humanity at its best.

Whether you call it Karma, or something else, when you help someone in circumstances like this, what you sow generally comes back to you.

To summarise today’s topic, we don’t live and work in isolation. We’re part of an ecosystem. The more firmly you plug yourself into that ecosystem, the more your business will thrive.

I’ll go a little deeper into this principle in next blog will be the final one in my personal growth series. It will look at giving back.

I believe that with passion, consistent effort and wise advice you can succeed in your business.

I wish you all the best and I’ll see you next time.

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Your Brand is Much More Than Your Logo!

Your Brand is Much More Than Your Logo!

by Phil Latz

What is branding? It’s one of the key differences between large, highly profitable companies and struggling small businesses.

Successful businesses understand the importance of branding. They respect key laws of branding and build their ‘brand equity’, that is, the value of their brand. 

Brands can be worth many billions of dollars. Think of the Golden Arches or Flying Kangaroo. I don’t even need to name the companies. You already know.

Branding is far more than just a logo. The logo’s ultimate power is that it represents the positive attributes of that company at a single glance. Those attributes will vary from company to company. You can’t be all things to all people so don’t even try. No matter how big you are, you’re better off majoring on your strong points, your key positive attributes.

For example, when it comes to cars, what does the Volvo brand mean? Safety.

BMW? ‘The ultimate driving machine’ that is, vehicles that handle well and give great tactile response through your hands.

Mercedes? Engineering excellence. You get the picture. 

Volvo could spend a billion dollars next year telling the world that they’re the best handling brand, but they’d be wasting their money because BMW has been building that key brand attribute for decades.

Once you’ve established the key attribute (or an extremely short list of attributes) that your brand stands for, the next step is to make every point of customer contact consistent with that attribute. Your customer likes to know what to expect. They like consistency, not nasty surprises.

For example, a customer walking into a Ferrari showroom is not likely to be impressed if they see that Ferrari has introduced an economy people mover model. Conversely, I don’t think Kia could sell too many $500,000 sports cars, even if they out-performed an equivalently priced Ferrari.

To have maximum value and effectiveness, your brand needs to mean something in the minds of your current and potential future customers. You can only build this over time through consistency.

How do you achieve this consistency? There are too many factors to write about them all in a single blog, so let’s focus upon the low hanging fruit that is within the budget of even small businesses.

You should create your corporate style. Or better still, hire experts to help you do so. This will not be as expensive as you might think. The first place to start would be with a good graphic artist experienced in creating corporate style guides for businesses.

Once your guide is created, it costs you nothing to stick to it, other than consistent discipline and organisation.

At its most basic level, for your small business to produce a style guide, you select a colour palette, one or two fonts (typefaces), a logo and a set of rules about how and where you are going to use these colours, fonts and logo.

Think back to those example of the Golden Arches and the Flying Kangaroo.

How often do you see those arches in blue? Or the kangaroo in yellow? Never!

Interestingly, if you Google to see images of these logos through the decades, you’ll see that they’ve been regularly ‘tweaked’ to keep them looking fresh. But these changes are so expertly done that a casual observer might not even notice the difference from one version to the next. 

Large companies know that their logo and corporate branding is worth millions, or even billions. A quick glance at the ‘worlds most valuable brands’ list in Forbes for 2019 shows Apple at the top of the list with a brand value of US$182.8 billion (A$261 billion). Scroll down through a list of famous brands and you’re still looking at US$7.4 billion (A$10.5 billion) for KFC at number 100.

You might think that has nothing to do with your business which is perhaps a single location retail store, but good branding, even for a small business, could mean an extra $100,000 or more on the price achieved when you decide to sell.

Notice that I previously said, ‘hire experts to help you’. Don’t let them create your logo and corporate style for you without your input. They might have the technical expertise, but you know your business better than anyone else. The fonts, colours and styles that are chosen need to accurately reflect the key attributes of your brand.

For example, if you have a ‘blokey business’ that sells macho products mainly to young men you might choose a masculine font such as Machine. This is the font they use for the numerals on gridiron football jerseys. If your key brand attributes and customer base is feminine then you might choose a slender, elegant font such as Optima. Walk into your local chemist shop and look at the skin care products. Optima is all over the packaging like a rash…

Once you’ve got your corporate style created and fully documented, including examples, the next step is to use it – everywhere! Use it on your shop front signage, on your website, your Facebook page, your staff uniforms, your invoices, your shop fit-out, your shopping bags and everywhere else that you are seen by your current and potential customers.

If after a while you see it so often that you’re getting sick of it, great! You must be doing a good job. Resist the temptation to change.

Research says that your customers are exposed with around 5,000 ads per day in some format. That can mean everything from a two minute immersive cinema ad through to a split second flash of a billboard as it goes past their train window or a brand logo that they quickly scroll past on the margin of a computer screen.

If you’re going to achieve ‘cut through’ with your current and potential future customers you need to make the most of every precious slice of their attention that comes your way. You do this by playing smart, just like the big boys with their multi billion dollar brands all do.

Your Next Steps

  1. Work out ideally just one key attribute that your brand needs to represent, certainly no more that two or three.
  2. Get help to design your corporate style to reinforce that attribute.
  3. Stick to your corporate style like you-know-what to a blanket!

Then you’ll gain a competitive edge in your marketplace and build your brand equity.

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Personal Growth | Giving Back

What does giving back do for you?

Business Coaching Videos: Giving Back

Chances are that somewhere in your list of reasons for starting your own business there was something about helping others, whether they be members of your local community or a certain cause that you’re interested in.

But have you ever noticed that if you’re a business owner, you’re automatically assumed to be wealthy? You’re bombarded with requests from all sorts of worthy causes!

In this video we’ll look at some systems you can implement to regain control of this area so that you do what is right for you without feeling stressed when you have to say ‘no’.

We’ll also look at ‘in-kind’ giving which can be a great win-win alternative to cash for both you and the cause that you’d like to support.

Watch Video Ten: Giving Back

Watch another video

Book an Obligation Free Consultation

If you are struggling with the topic in this video, or want to improve this area of your business with new strategies and a proven formula for success, then complete the form here now, to book an obligation free consultation with Phil Latz.

Phil will meet with you for one hour, free-of-charge, to listen to your current situation. He will help you to hone in upon the key issues and strategies that will make the most impact, no strings attached.

It will only take you 30 seconds to activate change! You have everything to gain and nothing to lose! 

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Health, Diet and Exercise

Health, Diet and Exercise
fruit and vegetable
by Phil Latz

Hi, welcome to the eighth blog in my personal growth series that I hope will help you become more successful in your business.

As a business owner myself for many years, I understand the challenges that you face.

Today I’ll be going to be looking beyond just your working life to discuss your physical, mental and spiritual health.

Some of these areas can be deeply personal and quite sensitive topics to discuss. So I’ll start by stressing that I’m certainly not trying to dictate what you should do. 

You are a sovereign being and have the right to choose however you’d like to live your life. Everyone is different and I’m a great believer in respecting and celebrating our differences.

Instead, I’ll simply share with you some general, broadly accepted principals, and for more specific examples, I’ll share what works for me. As I’ve just mentioned, you’re entirely free to take or leave any part of this. 

Physical, mental and spiritual health are areas that I’ve paid a lot of time and attention to in my own life. That’s because I want to squeeze every drop of productive work out of my body before I drop. So I’m motivated to share all the hard-won experience that I’ve learned, especially to fellow business owners when they’re struggling.

Every year as I get older, good health becomes more important to me. If you want to maximise your success in business one of the best places to start is to look after all aspects of your health. 

You’ll be doing no one any favours in the long run if you take on the ‘martyr syndrome’ and put the welfare of your business or even your team members ahead of your own health.

At first glance that might sound selfish, but as they say in the airline safety briefings, ‘Fit your own oxygen mask before helping children or others around you.’ Why? Because if you’re not breathing well then you can be of no help to your child or anyone else.

Let’s talk about physical and mental health. 

In past years, it would be most common to look at these two key aspects of health in isolation. But many recent studies are confirming that physical health and mental health are closely intertwined.

Another highly positive development in our society is that the former social stigma about discussing mental health issues has at least been diminishing, and hopefully, banished forever.

So what are some practical steps that you can take to improve your physical and mental health? They are steps closely related to diet and exercise that you often hear described as ‘lifestyle choices’.

Let’s start with diet.

Most of us already know what we should be avoiding. Excessive sugars, too much salt, fatty and overly processed foods.

But it’s hard to make good choices when every day we’re bombarded with advertising urging us to eat rubbish! Unfortunately, that’s because the addictive, junk food is far more profitable for big business.

How can you resist this temptation!? At least most of the time…

I think it comes down to deep questions of self-esteem and your mental wellbeing. Are you eating to live or living to eat? 

If you’re eating for comfort, that can lead to gaining weight and a further downwards spiral. It’s easy to say, ‘Don’t do it!’ 

But as we all know, it’s far harder to do. 

I would suggest that if you’ve tried all sorts of diets and lifestyle changes but your diet’s still out of control, you should seek appropriate professional help.

As for me, if you’d asked me for 40 years of my life what my favourite food was, I would have probably answered, ‘A T-bone steak!’

The irony of that answer today is that at the time of recording this video, for the past eight years I haven’t eaten a single T-bone steak. Nor have I eaten any meat of any kind, including fish and chicken, nor any eggs or dairy.

My wife and I have followed what’s commonly described as a vegan diet. I’m aware that this diet can offend some people, so I won’t elaborate any further other than to say that we’re both feeling a lot better since making the change.

Even if you don’t go that far down the dietary road, you can improve your health by eating foods that are grown organically and have as little processing as possible.

One strategy I’ve adopted kills three birds with one stone – an ironic expression for a vegan to use I know. That is to have an organic fruit and veggie garden in our back yard. 

Firstly, I get exercise preparing, planting and weeding the garden. 

Secondly, I find that spending even a few minutes in the garden is very calming and good for my mental health. 

Thirdly, we get to eat the fruits of our labour, so to speak. More often the vegetables and herbs of our labour, typically picked a few minutes before each meal time.

In my opinion, no supermarket produce can match the flavours, freshness, fun and health benefits of home-grown food.

Now let’s move onto exercise.

The Western world data about exercise is alarming and getting worse. Most of us are getting far less than the recommended 30 minutes of moderate exercise each day.

Thirty minutes doesn’t sound much out of a 24 hour day, but I know that many of us find it hard to make the time. 

I suggest the best way is to incorporate exercise into your lifestyle. 

For me, this mainly means riding a bicycle to work. But for you it could mean walking the dog, walking to the bus stop, whatever can fit into your everyday routine. None of this is an elite level, high intensity exercise. It doesn’t have to be. And none of it costs any money.

My wife and I made a conscious decision choosing where to live and work so that I could easily ride between the two. I understand that not everyone has this luxury.

Many of my fellow citizens of Wollongong, New South Wales spend three to four hours every day commuting by car or train to Sydney, where the bigger jobs and business opportunities are based. There are multiple complex reasons for this situation that ultimately often relate to poor government policies around housing and employment opportunities, but the health cost is massive.

Don’t hesitate to invest money into your health. I’m not motivated enough to exercise for an hour at home on my own, so I go to a Pilates class twice a week and not only get through the hour every time, but make friends along the way.

Any sort of class, gym, social sports team, hiking club, swim squad, wherever your interest lies, is a great way to stay fit and socially connected.

Another thing you should be avoiding is sitting down for long periods every day. Health experts are now saying that ‘sitting is the new smoking’. If you have an office job, then I suggest that you invest in a standing desk like I have. Ideally, one that you can easily change from standing to sitting height via preset buttons and an electric motor. 

There’s nothing too scientific about how I use this desk. I stand until my legs get tired, then sit until my backside gets numb or I get fidgety, then I stand again.

Regardless of what sort of desk you have, if you have a mainly office bound job, then also take breaks for a short walk at least once or twice a day.

Turning to some specific mental health issues, some huge ones facing business people in today’s hectic, high pressure world are stress, anxiety and depression. 

All of us face these pressures. 

I’ll put my own hand up as being just as vulnerable to all three of these as you might be. 

I’ve found that it helps to avoid the things that trigger these states of mind. For example, I’ve found it too depressing to watch the evening news on TV, so I now avoid it.

Once again, everyone suffers from these issues to different degrees, so please don’t hesitate to seek help if you can’t cope on your own. 

That’s certainly a better option than self-medication which many people do through excessive use of alcohol and so-called recreational drugs.

Smoking is another addiction that has now been proven to have no upsides for your physical or mental health.

If you’re struggling with any of these issues, then please be proactive and get help.

You can also strengthen your mental health by not just taking breaks and holidays, but making sure that when you are away from your business, you’re living fully in the moment. Picture yourself closing the door on your business and walking away.

The third and final aspect of health that I’d like to discuss with you today is spiritual health.

I know this can be a very personal topic, so I’m going to tread carefully.

Most people, even those who don’t follow any particular faith, agree that we come in three parts, a body, that is optimised by good physical health, a soul, which is the mind, will and emotion, that is optimised by good mental health and finally, a spirit.

Virtually every culture in history from the oldest ones on the planet such as Australian aboriginal culture through to far more recent ones have some form of spiritual foundation.

For me, both through my cultural upbringing since birth and my personal decision as an adult I’ve followed the Christian faith. Some critics may say, ‘That’s just a crutch!’ I would not only agree, but say that they haven’t gone far enough. It’s more like a life support system, that I’ve turned to most when any aspect of my personal, family or business health is at its worst.

As I’ve already mentioned, this is a very personal decision. Everyone is on their own journey. 

I think that our society as a whole would become far more healthy if we learned how to better respect everyone’s differences and lived with more true harmony and goodwill.

This leads to the topic of my next blog, that will cover taking collective action, particularly in the context of your business and professional life.

I believe that with passion, consistent effort and wise advice you can succeed in your business.

I wish you all the best and I’ll see you next time.

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How Do You Compare?

How Do You Compare?

by Phil Latz

Don’t worry, I’m not talking about body image here! The world is already too full of unhappy people trying to match impossible comparisons to photoshopped images of movie stars and other ‘celebrities’…

In personal and social settings, comparison may be harmful. But in business, it’s a useful tool that research companies have built a whole industry upon. They’ve even given it a more business sounding label: benchmarking.

For many industries in Australia, from hotels to hair dressers you can find in-depth benchmarking data to see if your business is above or below average regarding a whole range of KPI’s (key performance indicators). These can include everything from gross and net profit, to revenue per employee, rental as a percentage of sales and so on.

Using an example industry that’s familiar to me, unfortunately, there’s not a major, ongoing benchmarking report for Australian bicycle retailers, but there was a survey run by Bicycle Industries Australia from 2014 to 2016. I’ll run a few summary findings from the most recent of those surveys at the end of this blog.

There’s something else you can do on an informal basis that can be highly valuable for your business. Find one or two other retailers who are not in competition with you and whose discretion and business ethics you trust. They could well be other dealers of your main bike brand, who are based a long way from your store, even interstate.

Then make a date for a call or better still a face to face meeting. It might only be once a year the day before your supplier’s dealer show, or via Skype or Zoom. It might be more frequent.

For the second half of the 25 years that we owned Bicycling Australia I had an arrangement just like this with another independent magazine publisher who was based 1,000 km away from me in Queensland. His business was about triple the size of ours, but otherwise very comparable, with a range of specialist magazine titles. None of our titles were in direct competition, but we faced the same challenges in terms of staff, printing and distribution costs, marketing challenges, how to build our subscription lists and so on.

When we met, most of the time we were simply benchmarking. ‘How much are you paying for your printing at the moment?’, ‘What salaries are your editors currently on?’ But we’d also discuss successful past strategies, new plans and ideas and so on. Both of us thought that this was time very well spent, otherwise we would not have continued to stay in touch until, in the end, we both sold our respective businesses.

If you don’t already have a similar relationship with a fellow bicycle dealer or two, I suggest you work hard to nurture one, of course being very up front with what you’re looking to achieve. Both of you will benefit!

Finally, back to that bicycle retailer report, here are some benchmarks from 2015/16, based upon survey responses from 78 stores, 57% metro, 43% regional.

Average shop floor space: 220 square metres.

Average number of total staff:
Full time: 2.0 male, 0.3 female
Part Time 1.0 male, 0.3 female
Casual:1.2 male, 0.3 female

Average number of mechanics on staff:
2.0 male, 0.1 female.

Average Markups, Margins and stock turns per year:
Markup number appears first (gross margin in brackets)
Bicycles before discounts 56% (36%)
Bicycles after discounts 47% (32%)
Bicycle stock turns: 3

Parts & Accessories before discounts 81% (45%)
Parts & Accessories after discounts 73% (42%)
Parts & Accessories stock turns: 5

Clothing before discounts 68% (40%)
Clothing after discounts 48% (32%)
Clothing stock turns: 3

Average annual store turnover: $863,875

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