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If telecom entrepreneurs

Imagine growing up with Richard Branson. No, not that Richard Branson. Brothers Andrew and Richard Branson often exploit their famous name for good tables in restaurants or seat upgrades on airlines, but it’s just a happy coincidence that there are two born entrepreneurs with the same name.

At 19-years-old, like many British backpackers, Andrew found himself stranded in Sydney and short of cash. It was during a short stint working for an Australian telecommunications provider that Branson noticed there was a gap in the market: “There was no one really catering for mum and dad that own a business, or anything small-to-medium.”

So the young Brit began looking into owning a phone company, rather than just selling for one. Before long, he was on a plane home with a big idea and a big question for his brother Richard. After one too many late night conversations, both Branson brothers were on a plane to Australia ready to invest their savings into what would become IF Telecom. It was 2005.

“From there, we’ve just grown and grown,” says Andrew Branson proudly. The five-year-old company made the BRW Fast Starters in 2009 and turnover for 2011 is forecast in excess of $5 million. But its biggest triumph is achieving the near impossible in telecommunications: 97 percent customer satisfaction according to an independent survey conducted by the Australian Achiever Awards in 2010.

Telecommunications was personal

A smaller, boutique-style telecommunications service, IF Telecom has ‘members’, not customers. Branson says they compete with Telstra and Optus on price AND service. “We’re guaranteed to answer the phone within 10 seconds. They’re going to speak to a human being in Sydney or Melbourne. They get their own account manager. We try to give a small business the type of service a massive corporate would get from Telstra or Optus.”

It hasn’t all been smooth sailing, “Initially, it was really quite hard. We massively underestimated the amount of money that we would need.” The first couple of years were a financial struggle as the brothers learned how to run a business, operate in the industry and handle cashflow problems (“which are like growth pains”). Other than that, Branson had to get his head around legislation, tax and employment responsibilities. “I didn’t do a degree on how to run a business. It was on-the-job training. Our policy is to throw ourselves into the deep end and research, research, research.” It’s paid off. “Even through the so-called recession the business grew. Every member of staff had pay rises, we didn’t let anyone go.”

We had more cash

Cashflow is a bit of a catch 22, Branson explains. “We really wanted to put on more sales people so we could get more customers so we could get more revenue. But if you’ve only got a certain budget to play with, you can’t put everything into sales.” But through using “credit cards a little bit too much” and “borrowing money here or there”, they always had money to spend on extra wages for extra salespeople. “If we don’t have any customers we’re not moving forward.”

Customer acquisition (and therefore a strong sales force) is always at the forefront of the business. Branson says he is proud of the way IF Telecom has recruited. “Our longest standing employees were here right from the start and have seen it grow up from zero.” Most of the founding employees are still there. “We just want to find people who fit the culture, who really want to achieve things every day.”

The pair took out a small loan from their parents at the beginning, but paid it back quickly. “Apart from that, we didn’t bring in any external investors. We’ve just used retained profit and organic growth to build the business up until now.” An aggressive growth strategy has seen the company acquire 12 other small telecommunications providers. “If you pick off a competitor you chuck in several hundred customers in one go.” But Branson only looks at taking on a new customer base if IF Telecom can genuinely benefit the customers. “The beauty of the business is that we can service customers all over Australia. We want to reach out into regional areas as well.” Sales are nearly always done face-to-face. “We’ll actually send a customer rep out to Mildura for a month and go and meet with people, which I think is the kind of good old-fashioned service that small business wants but can’t seem to get.”

We could beat Telstra

Since bigger telecommunications companies are cutting costs by outsourcing much of their customer service to developing countries, how does IF Telecom still come out ahead in rates? “We’re saving on that huge marketing budget. We’re not big enough to have a budget to advertise on TV in the middle of the AFL grand final.” IF Telecom also works on a lower margin per customer, but without Telstra’s huge staffing costs, that is viable. “We’re fundamentally guaranteeing we won’t outsource customer service. The cornerstone to the whole business is keeping the business in Australia where you can speak to someone in Australia on the phone straight away.”

Marketing wise, IF Telecom tries to drive as much business as it can through the internet. Branson says they are trying to get into social networking. “That’s quite new for us, but we certainly respect it as a channel.” On a basic level, IF Telecom is marketing on its points of difference to Telstra, its biggest competitor. Strong sales staff are like a “human commercial”. The company also tries to poach business by undercutting competitors when a business moves premises or connects as a new company. “But we really just put our heads down and focus on our own business.”

At just 26 years old, Branson is definitely the odd one out in an industry full of greybeards. “The average age in the office is 26. I think it probably gives a breath of fresh air. There’s a lot of energy.” IF Telecom isn’t Branson’s only business, but it is his first priority. “But I’ve still got time on my side so I’m sure there’s going to be plenty more chapters.” For now, the brothers are considering taking IF Telecom to New Zealand, and concentrating on growing customer numbers in Australia. Branson has taken his citizenship test: “I fell in love with Australia. I haven’t gone as far as supporting the Aussies in the cricket yet, but there are lots of people working on me.”

I could do it too

By 14, Branson was already selling mobile phones and accessories over the internet. Clearly, the art of sales is in his blood. The fact that his ‘real’ business is in telecommunications is just a coincidence. “I didn’t dream about phones at night or anything like that. It’s about running a business and creating something where you’re really servicing customers and having a great work environment.” If you want to follow in his footsteps, don’t hesitate, he says. “There are a million people out there who say ‘If I could get this’ or ‘if I could do that then I could achieve this’. Just chuck yourself in the deep end and give it your best shot. You’d be surprised when you put yourself under that type of pressure the results that you can get.”