Australian Real Estate Search Engine

Michael Merlin over ecoms.com at has had another brainwave. The Australian Real Estate Search Engine searches multiple Australian Real Estate websites simultaneously, in an automated fashion.

Michael is looking for volunteers to beta test the application shortly.

I look forward to using it.

Now if real estate agents would keep their listing information up-to-date it would be wonderful. Agencies have gotten better. I remember a few years ago when most internet listings were ten months out of date.

Q&A Time

Given the traffic from search engines with rather strange questions, I thought I’d start a Q&A section. So ask a question as a comment to this post and I’ll post an answer if I can. Obviously, I’ll only to that if it’s relevant to WealthEsteem: The Psychology of the Deal type stuff.

The current description of this blog is

Wealth is created between your ears. Documenting a journey to earn a second fortune after foolishly misplacing the first.

Into Profit

NigelW’s needling prompted me to action (I had to go to the office anyway). So I did 500 flyers. While Australia watched the Rugby, Nella and I distributed them in freezing drizzle. At least the Wallabies won.

Friday sales were a ripper. I got caught out at the office for a few hours and Nella sold pots and quilts and toys and carvings and dust-catchers and you name it. Go Nella! One of the delays was deciding what stock I could replenish easily out of inventory. Doing the flyer took about an hour. At home I have a ink-jet based fax/printer combo. So doing flyers on it is expensive and slow.

The casual leasing exercise is now healthily into profit. Hopefully Saturday is equally great and Sunday is not a disappointment. Then I’ll do a wrap-up and analysis.

Casual Leasing 4 days

Well Thursay trading was not as great as the neighbours hoped. Only one out of four of us casual leasee’s had a good day. One poor person had $65 in sales for the day. Still it’s the second best trading day this week. And better yet we’ve covered the overhead for the week, with three more trading days to go. So the exercise will not leave us out of pocket.

Two themes come through talking to almost-customers. “It’s beautiful, but where will I put it?” is a common problem in homewares and decorator items. The other theme is husbands, boyfriends and other silly blokes talking their women out of buying the bloody things! This one has me steamed :p

Guys, never get between a woman and her retail therapy. This is unbiased advice from a man who will celebrate 20 years with the same woman next February. Now Nella is a lousy atypical female shopper. We are guaranteed to fight if I go shopping with her. But I know better than to tell her I know better than she does shopping. Especially while she’s doing the shopping. Double especially in front of a shop assistant.

Nella and I have similar values when it comes to discretionary doo-dads and dust catchers cluttering up our home. We’d rather go out to a restaurant with the money instead. Strange that I’m in the useless baubles business then.

I wish I had the time and resources to follow up on NigelW’s comment to do some flyers. I’m just too tired, my office is too far away and half of my staff are on holidays in Queensland.

Casual Leasing 2 days

Well Monday was a public holiday and while the shopping centre was apparently busy, sales were disappointing. We nearly covered the rent for the day, but we did setup and iron out some systems bugs. Other small retailers said trade was slow. I decided to stock up on a wider range of pots and homewares after we closed on Monday.

Another frustrating factor was the centre manager said there were tables available on-site, but a mixup with the visual merchandiser led to the tables being pinched by another casual leasor. This limited our eye-level merchandising.

This week is also week two of school holidays, so we’ll see if that impacts sales as well. This was the only week available before Christmas for a reason.

Todays results were considerably better. We’ve covered the daily rent for the last two days and the cost of goods sold. Remember I am clearing old stock I can’t sell elsewhere. So really all I have to do is cover rent and wages. The rest becomes cash-flow.

Interestingly on both days my last sales were around 3:45 in the afternoon. I had to stay open until 5:30pm under the license. That’s a boring two hours. I used the time to review my pricing. While I don’t have actual cost prices for any of the pots, I’m guessing the clearance prices are actually profitable. I don’t think further price reductions will drive greater volume, people are already commenting on how great the prices are. Now if I can get more to buy something immediately rather than “I’ll be back with my spouse tomorrow”.

Poor Performance Financial Penalties

Between 16:07:13 and 17:36:13 AEST our internet link was down. The cause is currently unknown and reflects the reality that ADSL is still not production-ready in Australia. If I were running a business that absolutely demanded internet access or 99.999% uptime for email and web, I’d be looking at ISDN or Telstra’s business-ready solutions.

ADSL doesn’t cut it. But it is cheap.

Having said that, corporately, we require reasonable email access, and this blog uses most of our corporate bandwidth. So to my comms buddies, “relax , I don’t need to upgrade yet.”

If my business needed say an e-commerce website I’d host it with a commercial hosting company. It’s hard to beat their infrastructure and uptime guarantees.

Speaking of guarantees, why would anybody accept an IT services guarantee without non-performance financial penalties that exceed of a refund on down-time? I have to take that from Telstra because we aren’t big enough to warrant a sales executive to ourselves. But many larger companies accept the flimsiest of guarantees.

If a service is pay-as-you-go isn’t some of the value in the ability to use it immediately or continuously? So a refund of say 30% if my internet service is unavailable for 30% of the month implies no premium for continous service. I’d expect that if a guaranteed service level was breached in any business area the refund would be more than the pro-rata interruption. For the record no Austalian ISP’s (that I know of) offer any guarantees of suitability or service.

What do you think?

Casual Leasing

I’ve decided to turn some of my old stock into cash. I found a shopping centre that had a vacancy before Christmas in their centre court.

So for the next seven days I’ll be liquidating ceramic pots at Royal Randwick Shopping Centre. Drop by and say hi and share a capuccino.

Interestingly I am quite scared about the financial outcome of this exercise. If I had to buy product; staff the stand; pay rent, insurance and other overheads my breakeven analysis is sky-high. Once I’ve taken the product cost out of the equation it looks quite reasonable.

Hardly a sustainable business model. But with $1.2Million of stock at cost in my warehouse I have to turn a great chunk of it into cash quickly. So if it moves at a better rate than the vultures pay for it, then it may be a smart idea after all.

I’ll keep you posted.

On Partnerships

Generally people who have had business partners don’t recommend them.

You can never both be exactly 100% committed and do exactly 50% of the work. Like a marriage, they only work if there is tremendous flexibility on both sides.

But when is the best time to learn to work with partners?

Entrepreneurs with skills to develop and manage formal and informal partnerships grow fast and large enterprises.

Partnerships are an essential part of geographical and market-segment diversification. Eventually joint ventures become attractive. Do you really want your first ever partnership experience to be a $5Million JV with an Indonesian manufacturing company?

One popular exit strategy for a successful entrepreneur is a trade sale with a generous multiple on earnings. The entrepreneur sells the business to a larger player but stays with the business. The entrepreneur drives profits because they reap huge financial rewards (as a multiple of the increased earnings).

Now you may not aspire to create a company with that size, complexity or headaches. In which case enjoy owning 100% and controlling your destiny. Make a choice and execute the plan.

That leads to a major draw-back on partnerships. Most startups give away too much equity for a partner’s contibution to effort, cash or growth.

How can we create incentives for contibutors? Try income splitting or commissions. Some entreprenuers hire staff on base salary plus performance bonuses (tied to profitability). If you need PR agent, offer them a percentage of the revenue increase and no equity? Be prepared to pay more for successful performance based service than you’d ever pay for salaried staff.

If an essential person demands equity insist on an earn-out. Value the business at $X for your 100%. In order for them to own half, they either must pay you 50% of $X or grow the business to twice $X valuation. They then have earned 50% of the company. Keep and eye on liquidation preferrences and those other VC tricks.

Legal aside:- never, never, never structure a business as a legal partnership. That allows each partner to make the others jointly and severally liable. So when you get a partnership, get structuring advice (hint: companies or trusts are ok).