Why Australian Businesses Seem to Be Failing
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Hungry Jacks in Sydney - Remind you of Burger King?
I am not going to sit here and even pretend to be an expert at Australian business. I have not been in Australia long enough, or done any kind of research on Australian businesses, to proclaim that I am any kind of expert. However, I am an expert when it comes to American businesses and why American businesses often fail. I have researched hundreds and even thousands of individual businesses, their revenues and expenses, their attendance, their local demographics, etc, etc, etc, and thus I have an excellent idea of what will make any business work, no matter who the customers are, or where the business is located. Thus, because I have tons of research experience locked away in my head, I can’t help but analyze the businesses I see in Australia and what they are doing right or wrong.
Why do I think there’s something wrong with the businesses in Australia?
Quite frankly, there are two reasons. The first is that the locals keep telling me so. Here are a few paraphrased quotes I’ve heard recently:
- From a resort manager: “There are so many same-type attractions in the area because when one person opens up a new successful attraction, other business owners see that it’s working, and they figure, ‘if it works for them, it will work for me.’ Thus, a bunch of the same attractions will all open up at the same time, all offering the same business models and elements with nothing new or unique, and then all of those attractions will suffer.”
- From a restaurant manager: “In Melbourne alone, there are 20,000 restaurants – all offering the same menu and service. Since none of those restaurants differentiate themselves as extraordinary, approximately 30% of the restaurants in Melbourne close each year, but just as many open each year, so the number stays fairly stable.”
- From local parents: “There’s no reason for me to go more than 10 kilometers out of my area. All the stores that are 10 kilometers away, are also at my local shopping center. So why should I bother making the trip?”
- Also from a local parent, “The government does not encourage tourism in this area because we already get flooded with tourists every Summer, and we don’t want them. So, the government makes laws that limit what the businesses can do.” (That’s a very strong reason why businesses can fail, right there.)
If you've ever been to Venice, then you've already seen the million masks for sale there...
Those were just a few of the comments I’ve heard. (Whether or not they’re 100% accurate is another story.) There are many other quotes I’ve heard on the news, in TV shows, and from eavesdropping, but I’m going to move on so I can get to my point.
The other reason I think Australian businesses are failing is: We just bought a brand new GPS while IN Australia, and yet 90% of the businesses we search for, no longer exist by the time we get there. It’s a NEW GPS. Since GPS information is supposed to be less than two or three years old, I can safely assume that business turnover is high. (I know, it’s a silly reason to think Australian business may be failing, but it does kind of prove my point.) On top of that, it seems like many businesses you walk into are basically ghost towns. You see a handful of customers at most, and you can’t help but wonder, “How is this business doing?”
Why the Businesses are Failing
While I am a huge advocate of giving exceptional customer service to get and retain customers, I don’t believe it’s the customer service in Australia that is making these businesses suffer. For one thing, 99% of the Australians I’ve met have been incredibly friendly and talkative – even in the bigger cities. In the smaller towns especially, people seem genuinely curious about what brought the Americans to their region out of season, and what our plans are during the duration of our visit. They seem more than willing to sit and talk for a while, and more often than not, I have to make some excuse to get out of the shop and continue on my way. In fact, there are at least two instances where I revisited a restaurant location with my family (only for the SECOND time, mind you), and the cashier actually remembered our orders, right down to the number of sugars we liked in our coffee. Now that is EXCELLENT customer service.
So if the business offers great customer service, why are they still failing?
Here’s are three reasons I can cite from the time I’ve been in Australia (and the last six years of market financial feasibility research):
- A Sterile Environment: Every country has businesses that make this mistake: A business owner opens up their business, and they end up being so strapped for cash, they decide to skimp on creating a warm and inviting atmosphere. Instead, they go for basic white walls, a few generic pictures, very basic fluorescent lighting, possibly some wood paneling, and the floors are often covered with the most basic industrial wall tiles that can be found. While all of these choices can definitely save money, they do not create an atmosphere that people want to return to. In Australia, I’ve seen plenty of businesses that make this mistake, PLUS, they skimp on the heating and the lighting. The end result is that the patrons leave as soon as the cold room penetrates their multiple layers of clothing, and the patrons often get “creeped out” by the dark, unwelcoming atmosphere. The end result of a sterile environment is that customers do not want to hang out for any length of time (or return), which can mean smaller profits if you run a business that involves impulse shopping – like a retail store or even a café.
- They’re All the Same: Again, this is a problem I see in America just as often as I see in Australia – businesses all have the same business model. For example, a while back, I researched cafes in my hometown. There were NINE Starbucks in my town alone, and well over 30 cafes. The menus for those cafes were all the same (even at Starbucks) – a variety of coffees and teas mixed with high-carb pastries. In addition, they all offered free internet. The problem with that is when a lot of businesses offer the same product in the same business model in a small market area, those businesses will end up sharing the same customers and those customers will often end up going to whichever business is closest and most convenient. Thus, the more businesses are the same, the fewer customers that business will have.
- Bad Location: Today I went looking for a restaurant that served steak. Because I was following the GPS, I ended up on a beautiful hillside overlooking the ocean – a view that would have been perfect for a big, fancy, way-too-expensive steakhouse. What I found instead was a plant nursery. The restaurant was already gone, and it was easy to understand why. As nice as the view was, the road to get there was winding and steep, and there were no other businesses around – only houses. It was NOT an ideal location for a restaurant that needed tourism to thrive. Every business, I don’t care what the business is, needs other businesses to thrive. Not only do they need other businesses, but they need parking that can accommodate the customers they do get. If a location is too “out of the way” or offers no parking, then customers will find other businesses that can accommodate them better. The worse a location is, the harder the business will have to work to get customers to come back. And in all honesty, that’s what any business comes down to…getting the customer to come back.
If you’ll notice, I have not mentioned bad customer service or freebies, like I did in last week’s article about American Style Customer Service. I stuck solely to the factors that can quickly ruin any business, no matter where they are in the world.
Tomorrow, I will blog about how to balance out these factors to help a business thrive, even if the cards are stacked against them. Because the truth is, there is hope for any business to survive and thrive… you just need the right tools.
If you agree or disagree, or if you have seen “Obvious Business Mistakes” anywhere in the world, please share it in the comments below. I love it when people share their knowledge because it helps others improve whatever needs improving.
The New American-Style Customer Service
As I’ve begun my year-long journey around the world, my mind has transitioned from constant worker to constant customer. Yet at the same time, my researcher’s brain has shifted into high gear. Every town and attraction I’ve visited, I have analyzed, weighed and compared that location to “what we do back home.” Because I’ve done market research for so many years, I can’t help but notice what these attractions are doing wrong, what they are doing right, and what they could be doing better. 
Through all of this constant analysis, there is one themed-thought that has been uppermost in mind. That one themed-thought is: “This would (or would not) be successful in America because…” The rest of the sentence usually has to do with the American’s demand for excellent customer service and the good old American Motto: “The customer is always right.” The thing is… we seem to be the only country that believes this, especially when we don’t get it.
This motto, and the lack of American-Style Customer Service in my travels, has led me to a further revelation: American Customers don’t just want to be right…being right is not enough. American customers want more, and unfortunately, there aren’t a lot of companies that deliver what Americans really want.
“What do Americans Really Want?” you may be wondering (especially if you are in the retail business). The answer is simple… Americans Want the Royal Treatment for Free. Screw being right…we want our butts kissed, and we don’t want to have pay to get it.
(I know…how coarse. But bear with me a moment as I explain how this new answer can help ANY business anywhere in the world.)
An Example from Delta Airlines
When I was flying to Australia on Delta, I got my “panties all twisted” (an expression my mother likes to use meaning “ticked off”) over a Snotty Stewardess who happened to be working in my section. Because of the Snotty Stewardess and her lack of respect, Delta has been moved down my list of must-fly airlines. Her terrible customer service has most likely cost Delta an avid traveler. Here’s what happened…
It was the middle of the night somewhere high above the Pacific Ocean and I was hungry. Instead of ringing my “Call Bell” to make the stewardess come to me, I went to them looking for something to settle my stomach. I was not surprised to find all the flight attendants sitting at the back of the plane, chatting over coffee, since most of the passengers were sleeping. In all honesty, I felt they deserved the much-needed break.
Because I knew they needed a break, I was loathe to interrupt them for something as silly as a bag of pretzels. So I stood nearby, waiting patiently to be noticed. The Snotty Stewardess noticed me right away since she was facing me, but she was in the middle of telling a story and decided to ignore me. (The other flight attendants were all facing her, so they did not notice me.)
Being the curious person I am, I openly eavesdropped on the attendants’ conversation. The woman was complaining about a passenger, and she happened to make a comment about federal regulations that peaked my interest. Right as she finished her whining, she asked me quite bluntly if I needed anything. I told her I was hoping for some pretzels (which another attendant jumped to get for me). While the other flight attendant dug through their food stores for snacks, I asked the Snotty Stewardess if it was true that federal regulations did not allow a stewardess to move a customer on a plane, and she told me very rudely, “That was a private conversation.”
Just like that, my panties twisted.
While normally I would never complain about bad customer service, I bring this incident up for a reason. You see, after getting off the plane, I was standing in line in customs with my fellow passengers, and I saw the flight attendants standing in the “Fast Pass Lane” nearby. At the same time I noticed this, I heard two other passengers complaining about a terrible flight attendant. Butting in, I asked if they were talking about the Snotty Stewardess (who I was able to point to in the Fast Pass Lane), and the other passengers confirmed that they were indeed talking about her.
“But what you can expect?” the other passenger asked. “You just can’t get good customer service from flight attendants these days. And you can’t complain about it because of all the Security Regulations. If you complain, you may find yourself booted off the plane or marked as a terrorist. Because of that, every airline has crappy flight attendants.”
“That’s not true,” I rebutted. “While normally, I would agree with you – especially because there’s always at least one Snotty Steward(ess) on any flight you take – I just flew V Australia from LAX to Sydney a couple weeks ago, and the flight attendants were phenomenal.”
“Really?” they asked. “But the plane probably sucked, right?”
“Absolutely not. The plane was incredible, and in great shape. And there is just something about Australian Customer Service that is so attractive. Every Australian cashier I’ve met has been incredibly friendly.”
And that’s the truth. Every Australian I’ve met so far has been amazing when it comes to customer service. HOWEVER, this customer service comes with a price…literally. I have yet to find anything for free in Australia – not even free internet at the hotels. Everything in Australia seems to have a price tag attached to it. (I sincerely hope to be proven wrong about this soon, but after two and a half weeks in Australia, it’s not looking good.)
Customer Service: American Style
I have noticed a shift in the way American Corporations do business. More and more companies are offering freebies with their products “just in case” the customer gets bad or so-so customer service. At hotels, you see free parking, free shuttles, free room upgrades, free nights at the hotel, and even free cookies upon arrival. At restaurants, you see free chips or bread before the meals, free refills on various beverages, and even free candy, cookies, or ice cream for dessert. In the blogging world, bloggers offer free videos, eBooks and podcasts to their readers. At banks, we get free toasters, free checking accounts, and even free money for signing up with that bank. With credit cards, we get free APR and even free flights, gifts or points. Coffee Shops and Bookstores offer free internet (as does McDonalds). These business models strive for excellent customer service, but also give gifts to really drive their service experience home.
Another really great example of “The Royal Treatment for Free” is a Harley Davidson Shop. Many Harley shops offer free coffee and free access to clean bathrooms to their customers, whether they buy anything or not. That one freebie is enough to attract large groups of Harley riders on sunny afternoons, to make a pit stop for a little bit of Free Royal Treatment. Even though the Bikers don’t have to buy anything, they often do because they’re killing time waiting for the caffeine to kick in and their buddies to get out of the bathroom.
Can you see where I’m going with this?
How to Really Deliver American-Style Customer Service in Your Business
If you really want to attract American customers and keep them coming back (and believe it or not, it works for other nationalities as well), good customer service is no longer enough – especially if you compete against the “Big Boys”. You need to offer some type of freebie to keep your customers coming back. Blogs are a great way to give something valuable to your customers for free because you are sharing your knowledge with them at no cost. Promotional products are another great way to give something free to your customers while also promoting your business, but it should be something your customers might actually use (like a calendar, magnet, decadent chocolate, etc). Small brochures or pamphlets are also a good idea, but only if they TEACH something that your customers want to know, and aren’t just promotional fluff. These are basic items that pretty much any business utilizes.
However, if you really want to make an impression with your customers, you need to offer more than promotional products to keep them coming back. You need to give them a reason to visit you and visit often. Free coffee or snacks are a great low cost way to do this for any retail business (just ask them leave it at the counter if they handle the merchandise). To be effective, simply think about what your customers buy and what complimentary products you can offer, or what products will get them to hang out for a while, give great service with a friendly smile, and you will soon dominate your market niche. All Americans really want is a good butt-kissing when they’re told they’re right. (I know that’s what I look for…)
I Think My Bookkeeper is Embezzling…
Believe it or not, I hear this statement all the time: “I think my bookkeeper is embezzling.” Usually, this sentence is followed up with, “How do I find out?”
If you’ve been reading this blog for a while, then you will already be familiar with the Diary of a Bad, Bad Bookkeeper series and you will already be familiar with Betty Bookkeeper and her twisted ways. You will probably sympathize with “the Moron Boss” (readers words, NOT mine) and you will already have decided that “This could never happen to me.”
The sad truth is…it happens ALL THE TIME. What people see with the Diary entries is the inner workings of Betty’s mind. They see that she has a wicked sense of humor, and that she’s very greedy. What I don’t think I’m conveying very well, however, is that Betty is LIKEABLE. Her boss adores her. His troubles appear to have disappeared when she began working for him. He thinks his business is thriving… he has NO IDEA what is really going on, and he won’t… not until Betty is gone. Once Betty is gone and a good bookkeeper comes in, all hell will break lose. (I’ve already decided to write those diary entries as well…to show the wreckage that Betty will leave in her impressive wake.)
In the meantime, for anyone who has ever thought, “I think my bookkeeper is embezzling,” here are three questions and answers that might help.
How do I find out if my bookkeeper is stealing from me? – OR – I think my bookkeeper embezzled from me; how do I find out?
- Basically, the best way to catch an embezzling bookkeeper is to bring a new bookkeeper in. New bookkeepers have fresh eyes. They are not seeing the “same old systems” that your business has always used. They are looking at what another bookkeeper does and thinking either “What the heck?” or “Wow – great job.” They do what accountants don’t necessarily do…they look at all the little details. So, if you really fear that your bookkeeper IS stealing from you, go into your bookkeeping file when your bookkeeper isn’t around, make a “backup” of the bookkeeping program, and then send it to either a virtual bookkeeping business or a local independent bookkeeper that specializes in auditing books. Worst come worst – have that bookkeeper re-enter a new set of books with whatever backup you can gather so that you can compare financial reports.
I have an accountant. Won’t he/she catch any embezzlement as soon as it happens?
- A lot of business owners believe that a good accountant will catch embezzlement as it occurs. That is NOT the case. More often than not, an accountant is receiving Summarized reports about what is happening in a business. These reports are based on an “honor system” of sorts. The accountant and business owner believes that the bookkeeper is doing honest work, and producing honest reports. An embezzler can easily fake these reports. In order for an accountant to see or catch an embezzler, they need a backup of the file so that they can see the DETAILS, NOT the Summaries. As such, accountants will NOT look for embezzlement unless asked, and of course, that service can come at a hefty price. But the question is: How much is it worth to you to save potentially thousands and hundreds of thousands of dollars per year? Because that is how much a bookkeeper can make off with before most business owners ever realize it.
What if I don’t want to hire a bookkeeper or pay my accountant to look for embezzlement? What if I want to audit the books myself (especially to save money)?
- That is what the Diary of a Bad, Bad Bookkeeper series is all about. I’m trying to teach small business owners very simple ways to check their bookkeepers. While embezzlers are constantly finding new ways to steal – after all, it is a crime of opportunity – most embezzlement can be caught early on. I firmly believe that MOST embezzlement crimes can be caught if someone other than the bookkeeper OPENS the mail (and especially the bank statement) and quickly looks for anything that does not belong. This could include extra checks to the bookkeeper, payments to unknown vendors or customers, excessive charges on credit card bills…etc, etc, etc. The key is to look for anything “suspicious” and then to actually ask about it. And as always, go with your gut. If something doesn’t feel right, follow through. Don’t ignore it or you could lose hundreds of thousands of dollars.
If you have any questions about embezzlement, or any comments you would like to share, please do. The more people talk about this kind of crime, the more other people can stop it. Simply leave a comment here and I will research your questions, or reply with what I know.
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Diary of a Bad, Bad Bookkeeper (Day 195) – The IRS
Dear Diary,
Today I got a notice from the IRS. Luckily, the receptionist passed the letter to me unopened before the boss saw it (she didn’t know what it was), and he doesn’t know it’s here.
Opening the letter, I was shocked. The IRS said that the company owned payroll taxes on the paychecks for the last three months that I’ve been here, and since we hadn’t paid when we were supposed to, we now owe penalties and interest. Apparently, payroll taxes are due within three business days of cutting payroll checks, and the IRS considers that money “they’re money.” All I can say is…”WHOOPS!”
So now I have a dilemma. Do I show the boss the letter and have him cut the check right away? Or, do I just hide this letter and try to deal with it a little at a time, without the boss knowing? Obviously, the first choice comes with the unfortunate consequence of the boss coming to believe that I don’t know how to do my job when I do (I mean – Seriously! It was one simple mistake). The latter choice means that he continues thinking I’m brilliant, and that the company is doing better in my hands…
Hmmmm…choices, choices.
Although, now that I think about it, I see a third option here. I could always continue to fill out the payroll tax forms, but instead of cutting the IRS checks, I could just take the payroll tax money and enter the taxes as “Paid” in the bookkeeping program. The boss will think that I’m paying the taxes, and I can make a little extra on the side. Then, if the IRS does ever come calling, I can just explain it away as, “the bookkeeping program must have made an error in calculating the payroll taxes.” After all, it’s not like the boss would expect me to stay on top of all the interest rates.
And how often does the IRS come calling? I mean, Really?
You know what they say, “Ignorance is bliss.”
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Keeping a Clean Bill of Health with the IRS
I’ve often told my clients, “The IRS is an unforgiving mistress.” Would this piss the IRS off to hear? Sure…but I think they would rather keep their intimidating reputation than have people painting them as sweet and kind.
The facts are these…The IRS considers themselves debt collectors for the people. The money that a business is supposed to pay does NOT belong to the business, but to the business’s employees the moment those checks are cut (at least in the IRS’s point of view). What that means is, they will NOT negotiate on when you can and cannot pay payroll taxes. You should pay it within three business days of the checks being cut, PERIOD. And if you ask employees to hold off on cashing their checks until you can get some money in the bank account, you could suffer fines as high as $25,000 per Employee Check. (Imagine it…your business is strapped for cash, and so you ask your employees to wait a week to cash their checks. Then you fire a bad employee. What will they do? They’ll run to the IRS and report you, and BAM – bye, bye business.)
The point I’m dancing around here is that – YOU DON’T MESS WITH THE IRS! You – whether you’re the bookkeeper or the business owner – need to make sure the taxes get paid on time. Since payments can now be made over the phone directly from a checking account, the business owner will likely never see a payroll tax check to cut. That means, the business owner needs to check up on their bookkeeper and make sure the taxes were paid, or you could suffer huge fines.
To Make Sure the IRS Taxes are Being Paid
This step merely comes down to one thing yet again. Open your bank statements and look at it. You will probably see the payments listed near the top, detailed out as an EFTPS payment to the IRS. It’s that simple. If you don’t see the payments cut as often as payroll is cut, get it taken care of immediately.
One Last Note for Small Business Owners
The mistake of not paying the payroll taxes is VERY common with a lot of bookkeepers. The biggest reason is that many bookkeepers are office managers that were handed a company’s check register and told to “take care of it.” So, just because payroll taxes may not have been paid at your company, doesn’t mean your bookkeeper is an embezzler. It could just mean that they aren’t on top of everything they’re supposed to be doing yet. Make sure your bookkeeper is on top of the IRS forms, and definitely talk to your accountant for help. That’s an accountants main job – to deal with the IRS.
My First Online Workshop: Making Money With Your Website
Although I am doing a mini-series in the Bookkeeping Money Saver Tips about making money with business’s website, there is a whole lot more information to teach than just the basic elements that go into earning extra cash. There are simple things that can be done to improve a website (like using keywords and picking the right tagline), social networking things (like using LinkedIn, Facebook, and Twitter properly), and there are RSS and email subscription things. Almost all of it is fairly simple, but if you don’t know how to use these things properly, you won’t see any results. If you are interested in learning more about turning your website into a major internet advertising and money-making tool for your business, then you’ll want to join the online workshop I’m doing in September. It will be an intensive course, and you will actually have the chance to ask me questions in a forum atmosphere. So, if you are interested, here is more information:
(You can also find this information under the Workshop tab above.)
How to Make Money With Your Business Website
In the Month of September, I will be putting on my very first workshop entitled “How to Make Money with Your Business Website.” It’s all about…you guessed it…making money with your website no matter what your business is.
Many business owners use their websites as simple online business cards and nothing else. They never realize that with a few simple changes to their existing sites, and with the addition of a blog, they can start supplementing their income right away. In the month of September, I will be teaching ANY business owner how to take their current website and make those changes so that they can supplement their income WITHOUT taking away from their normal business website sales. (And if you aren’t selling from your website…you really SHOULD be.)
IN ADDITION, EVERYONE WHO SIGNS UP FOR THE CLASS WILL RECEIVE $20 AT THE END OF THE WORKSHOP TO USE AT ELANCE.COM SO THAT YOU CAN HIRE AN ASSISTANT TO HELP YOU WITH YOUR WEBSITE OR GRAPHICS! (That’s the cost of your workshop fees.)
Therefore, in the month of September, I will be teaching the following lessons:
Week 1 – Blogging and Website Basics:
- A quick overview of Setup, Domain Names, Taglines, and Themes
- How to Blog in a way that will bring readers back.
- How to Blog in a way that appeases the Search Engine Spiders and moves your site up in the rankings.
Week 2 – Getting Readers for Free
- An overview of RSS and Email Subscriptions
- Social Networking Basics and why Social Networking Works
- LinkedIn, Twitter and Facebook
Week 3 – Making Money
- No-Pressure Money-Making Elements
- An Overview of Affiliate Income
- Products that will Make You Money and Help You Sell Your Products
Week 4 – More Customers Than Ever Before
- Building Your Mailing List
- How to Get Massive Amounts of Traffic
- How to Keep People Coming Back
To Join the Workshop, simply click the “Buy Now” button below:
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- Why Australian Businesses Seem to Be Failing
- The New American-Style Customer Service
- I Think My Bookkeeper is Embezzling…
- Diary of a Bad, Bad Bookkeeper (Day 195) – The IRS
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- Laptop Features to Consider For Small Businesses
- Bookkeeping Money-Saving Tip # 14: Making Money with Your Website (Part 2)
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