Mark Bouris founded Wizard Home Loans in 1999 and famously sold it to GE Money for almost $500 million five years later. GE then sold it to competitor Aussie Home Loans for a fraction of that price during the height of the GFC in 2008. Wizard changed the way Australians attained home loans, becoming one of the country’s biggest non-bank lenders with the brand also expanding overseas. Bouris entered the BRW Rich List in 2005 and in 2007, entered the list of Australians worth more than a billion dollars.
Not one to rest on his laurels however, in 2009 Bouris founded a new business, Yellow Brick Road. Offering a holistic approach to wealth management, around half of Yellow Brick Road’s clients are SMEs. According to the 54 year old, many small business owners just don’t have the time to adequately plan for their financial futures. And planning isn’t that simple either.
“SME owners are under-resourced for a start,” he says. “They’re doing everything from opening up to paying the wages, sorting out their staff’s personal issues and looking after customers. They don’t have the time to plan. And if you’re talking about those five-year plans, I think they’re nonsense. Things change too rapidly; if you can do a decent plan for the next 12 months you’re doing well. You can have five-year hopes or wishes, but you can’t plan that far ahead. That’s like sailing a ship and planning your route but not having any control over the weather or conditions.”
If you can’t plan, structure
Bouris says things change even more frequently for small businesses than bigger ones: “A lot of the time, small businesses are flying by the seat of their pants.” So if they can’t plan, how can they stay in control of what ‘s going on in their business? “You have to have structure. You have to have your personnel bases covered, you have to have your sales force well managed, and you have to have your back office and your systems well managed,” he says. “Then you’re pretty good to go through any changes in conditions.”
He adds: “If your business is well structured and well managed you’ll be in a position to make changes quickly, which is one of the biggest advantages of small business. You have to be able to take advantage of the ability to do that. You also need to have your ear to the ground for any changes in the market, to be flexible and forward-read your marketplace.”
While not a social media convert, Bouris doesn’t dismiss it entirely and thinks you need to go where your customers are, whether that is Twitter or elsewhere. “You can’t beat talking to them face-to-face though,” he says. “All these tools are great but you can’t rely on them too much.”
Gut feel and common sense
It’s clear he believes in good old-fashioned, no-nonsense gut feel and common sense. No stranger to hiring and firing on The Apprentice, he says you should never underestimate the importance of gut feel in recruiting and in business in general.
“Gut feel does depend on the instincts you’ve developed as you’ve grown up,” he says, “It depends how well developed they are. A lot of people, have no gut feel because they haven’t developed character. Sometimes those kind of people are better off looking at a textbook than going with their gut.” For Bouris personally though, trusting his instincts is the most important thing.
Yellow Brick Road helps small business owners plan for their financial future, so what are his top tips for doing that? “First, make sure your revenue line is realistic and execute on it. There’s no point having a great shop front or back office if you don’t actually have the revenue. It’s about going out there and building the revenue. Business is about generating income. It’s not about having the flashiest office or having all your ducks lined up in a row, nicely proportioned. It’s about going out there and selling a service. Too many people sit around planning it and not actually getting out and doing it.”
Spending what you don’t have… yet
His second tip is not to spend it before you have it. “Too many people spend before they earn. As painful as it is, only have expenditure that keeps pace with your income,” he says. “If that means you’re constantly one person down, then that means you have to work harder to fill the gap, not to go hiring a marketing manager or a secretary or a CFO before you have the money to cover costs. It’s a sure way to go broke.”
His third tip is around getting your pricing structure right. “Make sure you know you have a competitive price but that you understand you have to make a profit. There’s no point having the cheapest and best service in the business if you’re not making any money. And that does often happen.”
When it comes to work/life balance and not becoming a workaholic like many small business owners, Bouris says you have to be realistic. “Unfortunately, you have to take it while it’s there so yes, sometimes you do have to sacrifice things like holidays. You shouldn’t sit around getting dark on everybody else who seems to be having a good time while you’re working hard. This is the risk of owning a small business.”
Business ownership brings sacrifices
“Once you’re past those times, you have to take every opportunity to spend time for yourself,” he suggests. “If that means you have to get up an hour earlier to go to the gym then that’s what you have to do. But if you want to stay in bed an hour longer one day then do that, and you see it as giving yourself a little luxury.”
As for the business owners who insist on having every Tuesday night as family night or spending every Saturday afternoon with their kids, Bouris thinks they’re probably making life more difficult for themselves. “Sometimes doing that might mean walking away from revenues and that doesn’t make sense. Also, if you become too rigid then you can get disappointed because you get upset if you can’t stick to those commitments. Life doesn’t work like that. It’s fluid and flexible. If you don’t put these rules on yourself you’ll be a lot calmer, less stressed and less in need of time off!”
Don’t like it? Get out!
Last but not least, if you don’t enjoy your job, get out! “If you like what you do, that’s half the battle won,” says Bouris. “There’s a lot of opportunity in a day for moments of a fun and a smile here and there goes a long way and can be worth more than several nights off.”
As for his own business venture, Yellow Brick Road , he says: “We’re currently opening a new branch every two weeks and we have a waiting list of people backed up.” The business operates like a franchise with branch managers acting as owner operators.
