Heading Pow Wow Events and Rich Dad Australia, alongside chairing the Australian Businesswomen’s Network (ABN), is a breeze for Suzi Dafnis. But it wasn’t always so easy for Dafnis, the serial entrepreneur, who says the road to growing niche businesses is full of steep learning curves.
In the early 90s, Suzi Dafnis and partner, Peter Johnston, were in the mood for change. Sitting in their rented flat in Sydney’s Mosman one day, Dafnis and Johnston decided their work lives needed direction and motivation, but they didn’t know how or what exactly. Dafnis attended a personal development seminar, liked the offering and volunteered to work with them until they hired her as a marketing co-ordinator. She found her calling. Next, a crash-course in running a small business, one that almost literally crashed.
Coming from sales and marketing backgrounds, neither Dafnis nor Johnston knew how to run a business, or even much about the personal development and education industry that became their niche. But, as Dafnis says, they weren’t afraid to learn on the job.
The initial offering was to present seminars, workshops, and books and tapes to help ambitious punters achieve their financial, business and life goals. She wasn’t an expert, but knew how to market those who were, and using Johnston’s limited savings they set up shop in the spare room, launching Pow Wow Events in 1994.
Rich Dad Australia was then launched three years later. The savings didn’t stretch far—they were used to pay their ‘wages’ so they could pay rent, as well as grow the business. This isn’t an unfamiliar method for start-up businesses but, unlike other start-ups, aside from the brief use of an overdraft the business growth has continued to be funded solely by cash flow. Not uncommonly, the start-up phase brought with it plenty of struggles. The pair lacked experience in financial and staff management, and this phase and the growth phase brought two of the steepest learning curves for the business. “First, it was what I didn’t know about how to run a business, then it was what I didn’t know about how to grow a business,” she says.
By 2000, the business started to take off, and grew from 10 to 24 staff almost overnight. “We were going with the market growth in the area of personal finance education and personal development education, and we couldn’t make a mistake. Every [speaker] we brought to Australia was a hit.”
Over the moon with their apparent success, they crashed quickly back to earth. “We weren’t ready as far as procedures and managing expenses were concerned, and we started to grow ourselves broke,” Dafnis says of the rapid growth. While they could keep their fingers on the pulse of the business and bring new business in, there were suddenly too many people to watch and manage and they hadn’t created the back-end procedures, starting with job descriptions, to back up the growth. “While all that was going on, we decided to open up in the US. One of the biggest mistakes I made was that I disconnected from the Australian operation when it wasn’t ready to self-generate. People knew how to run the business but no one knew how to bring in money like we did. And as business owners, we are responsible for that. Expenses started to go crazy, we had a CEO who didn’t have the same values we had—we just made a bunch of mistakes.”
Number one in that bunch of mistakes was reacting to market downturns, and this presented another expensive learning curve. “I know it sounds naive, but I didn’t think [the market] would change. I was in a business that was growing steadily, the market was going with us, and then it changed.” Suddenly there were a few ‘shonks’ in the marketplace that meant the reputation of the wealth creation market took a dive. New legislation changed around what someone could or couldn’t say about personal finance, and suddenly selling tickets to even reputable speakers became impossible.
But this was only part of the problem. Dafnis failed to streamline the business, and as profits dropped, staff levels and overheads remained the same. “We made the mistake of thinking we were going to keep growing at this level forever. And we held on to staff thinking [the market] will turn back,” she says. “I loved the staff and thought they were really important—more important than the business—and the business suffered. “For a long time, probably 12 months longer than we should have, we maintained staffing levels. We had close to a $2 million payroll,” Dafnis says. “Rather than scaling up, then down—because it’s a cyclical, seasonal business—we tried to keep finding things to do to pay the staff.”
One of the toughest lessons to learn was that although she made a great leader in these early years, and motivated, inspired and supported staff, she lacked the skills to be a good business manager. “We should have said ‘we love you, but the business won’t survive if we keep you and therefore you must go’,” she explains. “I used to measure my success by turnover and how many staff I had.” But it didn’t matter if the turnover was $1 million or $18 million when expenses were killing profits. So they needed a new perspective: “Let’s stop looking at bringing money in and let’s look at our expenses. Changing that perspective was like growing up. My wish for every other business owner is that they learn that sooner than I did. I’m very passionate but I also get very emotional with things, which hasn’t served the business.”
It took the business 18 months to get back on track, and now it is in a healthier position than it was a few years ago. Now a streamlined team of 12 run the business, with contract workers helping in peak times. And all lessons learnt during this period were transferred to the business as Dafnis set up Rich Dad seminars in the US, even if the launch was a little ill-timed. “We were able to duplicate what we had in Australia, and what took us six years here took two years in the US. That’s just experience; there’s nothing you can exchange for experience. Experience is the teacher that would have me do it differently next time around.” She now passes these lessons and more on to others through her role as chair of the Australian Businesswomen’s Network (ABN).
Like most business owners, Dafnis is passionate about her business offering. She loves learning, regularly attending courses to improve the business and her own outlook. She also encourages all business owners to do the same. “The advent of the internet has changed the industry, and you can find and learn anything on the internet,” she says. “There’s really no excuse not to be educated.”
When I ask whether she feels pressure from the marketplace to know everything about topics she offers, she says the only pressure comes from herself. “I’m a terrible perfectionist.” But she admits there is a need to “walk the talk”, which she discovered when she and Johnston went into partnership with now renowned speaker and author, Robert Kiyosaki. Dafnis became involved with Kiyosaki when she was a student of his in 1991, and then from her work with the organisation that represented him. He retired in 1994, and came out of retirement a couple of years later to write the book, Rich Dad Poor Dad, and they hooked up again to release the book together in 1996. “And the rest is history!” This relationship meant success for both the business and Kiyosaki. “We were very lucky we were working with a product that was exceptional, and with a person who was as driven as us.”
And Kiyosaki passed on his own lessons about wealth creation. “A lot of people depend on the business solely to create wealth for them. One of the things I learnt very early was that businesses do have cycles: boom and bust, every industry goes through that. And because the business was me, I had no succession plan or any idea that I would sell,” she explains. “At some point people in small business get tired or burnt out, and if they haven’t taken care of things and don’t have a saleable business or don’t invest somewhere else, they have very little to show for having been in business.”
Their first commercial property investment was made in 1997, and within five years they had built up a substantial portfolio that continues to grow today. To make her point, Dafnis says that for the last five years she hasn’t needed Pow Wow to make money. “So now the real estate business has its own staff and is as important to me as Pow Wow or ABN or Rich Dad Australia, because the money from there has allowed me to continue to learn and grow and put my time voluntarily into things like the ABN.” Even with the growth in her own finances, personal development education remains a big interest, and although personal finance education has proved so popular, thanks largely to the Rich Dad offerings, it wasn’t a specific interest for Dafnis until the business got under way. “But we made sure that no matter what the topic was, the core was about personal transformation and education.”
Well-Developed
Dafnis says her background has been very handy in her business, and combining marketing and technology has been her strategy from the beginning, and one she says is often copied by other businesses. Attending a marketing conference in 1998 about the secrets to online marketing, when the internet was still in its infancy, was a godsend. “We were one of the first organisations to introduce email marketing, online newsletters, to get our website up and happening and to establish an online store. At the time it was very new and revolutionary. We could send out an email and fill a seminar room.”
It’s not like that now, because it’s not new, which means they have to continually try different methods. She embraces new technology, and says this is where small business wins over the bigger organisations, especially in terms of flexibility in new technology take-up. “Technology allows small business to do what was only available to big business before.”
And through the ABN she’s helped put together a new mentoring program—MentorNet—to be delivered online through podcasts and blogs. “There’s a huge learning curve for how to deliver online learning across Australia, so each project has its own learning curve.” Building a customer database, which most organisations do now, was a new tool Dafnis employed before much of today’s software became available. In fact, she got her first start with managing databases after approaching the ABN for theirs in the early years.
She needed to reach a lot of business people to attract to her seminars, so in 1995, when she was bringing a speaker to Melbourne, she needed a local database of potential customers. The ABN was based in Melbourne, so it seemed the right fit. That initial contact was all she needed to be offered the chance to run ABN’s Sydney office, although she admits she felt like a fraud. “I’d only been in business for six months!” Then, when the role of national chairperson became available some time later, she took on the role, expanded the network, and has been running ABN ever since. She now volunteers about half her time to grow the network to support other businesswomen, and expects this role to involve even more time down the track.
She is currently putting an application together for a grant to develop public policy and advocacy. “I really want the ABN to do more representing for women in small business,” Dafnis says. “I feel it’s my responsibility to develop a way to further be the voice for women and represent their small business issues.” Dividing her time between all these roles is one challenge, but it’s quite another when you add an overseas base to the mix. She now divides her time between her base in the US and trips back to Australia every couple of months. “I have a lot of frequent flyer miles!” This is where technology again comes in handy, although she admits she still misses bouncing ideas off staff face to face.
And her base in the US has its advantages. For example, from a market research perspective, she says it’s like “heaven”, and she can adapt offerings depending on market changes in either country. The constant travel plays havoc with her health and well-being, so she plans to spend more time in Australia this year. She can recall one year when she spent more than 80 percent of the year in hotel rooms. Even now, though, she admits she doesn’t have a secret to avoiding burn out. “When I was at my most successful I had the worst health. I did not manage it well,” she says. “I’m a serial entrepreneur and sometimes I still feel burnt out.
“I don’t believe in balance: I have one life,” she says. “Sometimes I’m working really hard, and sometimes I’m in New York playing with friends. Do whatever you’re doing at 110 percent, that’s my philosophy!” Although she still works very hard, she recognises warning signs and eases up when she needs to. But no matter where she lives or what she’s doing, whether organising or attending seminars, adding to her portfolio of product offerings or presenting online development tools to the ABN, learning and education will feature in her future. “The area of personal development education is what I want to keep doing, whatever the format might be.”
These days, Dafnis is often recognised for her stint on the Dragon’s Den television show, an experience she describes as “invigorating”. And although no longer an active venture capitalist, she still gets a kick out of receiving prospectuses from small businesses looking for a leg up, and sharing advice and experience. “I don’t go out to try and be an inspiration to people, that’s not my job. My job is to just keep growing as a human being. In that, if I can impact on people in a good way, then that’s great.”
Lessons From Suzi Dafnis
• Never give up. Persist when it really matters to you.
• Know when to stop. Cut your losses and move on.
• Business is the greatest personal development experience. Enjoy the journey.
• Be passionate about what you do. Your personal mission will get you on track when you stray.
• Integrity is everything. Keep your word and do what you say you will do.
• Trust your instincts. You know what is right for you. Use mentors to inspire and validate.
Ten Things You Didn’t Know About Suzi Dafnis
Here are a few things you didn’t know about our favourite dynamic business people:
What’s your favourite part of a typical day?
My first coffee and, on the days I workout, that post-workout exhaustion/elation.
What’s the least glamorous thing you do regularly in the line of duty?
Proof-read marketing materials.
What skill would you most like to improve?
I’m always striving to be a better communicator. The ability to confront difficult situations and tell the truth without fear of retribution still challenges me some days.
What makes for a good salesperson for your product offerings?
Passion sells but passion alone won’t do it. Sales is an essential skill for any business owner, regardless of the company or industry. If you can’t sell what you do nobody can.
If you could go back in time and do one thing differently in your business, what would it be?
I would have fired faster when that is what was needed.
What part of your job would you gladly give up?
Answer emails (I usually have more than 300 in my inbox at any one time)…
What’s the simplest thing you never learned to do?
Drive a manual car!
Who’s the smartest person you know? And who inspires you most?
Smartest: a dear friend who passed away. I think he was the greatest internet marketer ever.
Many people inspire me. Famous people include Steve Jobs, Madonna, Richard Branson, Anita Roddick, but the women I meet through the Australian Businesswomen’s Network inspire me as much.
Who gives you the best advice about your business?
It depends. When it comes to finances and strategy, our financial advisor. When it comes to marketing, I travel widely to find great mentors and information.
What keeps you up at night?
I can be a bit of a worrier … and a perfectionist. I’m kept awake by details: the unfinished bits of business; that conversation or meeting that I need to have; the to-dos that didn’t get done.
