In the volatile world of property investment, she teaches everyday people how to manage their budget. Margaret Lomas speaks to Adeline Teoh about starting with nothing but a good idea and ending up with a flourishing business.
It seems ironic when Destiny Financial Solutions director Margaret Lomas says she and her husband Reuben started the company “by accident” rather than via fate. What she really means is, when opportunity knocked, they answered.“Both my husband and I have always been open to new opportunities at all times,” she says. “Sometimes those opportunities become nothing, but we were never cynical when most people were looking for the catch.”Like many couples, the Lomases were on a mission to own their own home and improve their standard of living. With five children and a net worth of zero, they discovered ‘line of credit’ financing and started a niche business teaching others how to manage a budget.“Not many people had the self-discipline to prevent themselves from overspending and we knew that if we could create a business with a supporting network then people could actually achieve financial goals,” she explains. “They’d tell their friends, then word-of-mouth would make it a successful business.”It did become a successful business—in Perth, which Lomas thought too isolated to grow the company nationally. They moved east, selling everything they owned. The family of seven found themselves living off $80,000 “the sum total of our entire life” on NSW’s Central Coast.“Looking back, I have no idea what possessed us to do it,” Lomas admits. “We did letterbox drops and pounded the pavement but after four or five months we were down to $20,000 and we didn’t have enough business to sustain a living.”Reuben then responded to an announcement that spruiked radio advertising as an effective mode of promotion. Radio advertisers came back with a proposal for a radio and newspaper campaign—at a cost of $18,000.
“We thought about it and then decided: let’s do it, let’s spend our last $20,000 on the radio campaign. The radio people said it takes a week for people to start calling because they have to hear the ad a couple of times, so we decided to go to Movieworld, because that’s what we’d promised the kids when we moved. I thought if it didn’t work out, we wouldn’t have the money to do that later. We diverted our number to the mobile and at about 10 past nine, after the first ad ran, the phone started to ring. By the time we reached the Gold Coast, we were booked out for three months.”
{mospagebreak}The anecdote reveals two important things about the Lomases: their willingness to take risks and their dedication to keeping promises, both of which have contributed to the Destiny brand. Part of Destiny’s success has been the structure of the company. As a qualified financial adviser, Lomas was appalled to find that the property investment sector was unregulated, exposing the market to sharks. Destiny, she says, uses the processes that govern the financial advice industry in a property context.“Unless there are some small companies who haven’t come to great public attention, I think we’re the only company in Australia offering property investment advice under a financial advising framework.” This enables the company to operate “honestly and ethically” in a visible way.In addition to structure, Destiny attracts clients because they provide advice based on experience. “We would never teach anyone anything that we hadn’t already done and proven ourselves. That way our clients know it’s real,” states Lomas. “A person will walk away from a consultation with a report that says ‘in year 15 you can expect to derive this much net income from a property strategy’. Most advisers say ‘you can own X amount of properties or X value of properties’, which doesn’t mean anything because you might not earn anything from them—our clients want to know what they’re actually getting.”Further value comes from ongoing support and education that the business initiates. This includes software training for Destiny Track, a program that helps clients manage their budget and their properties, as well as weekly property focus groups and one-on-one mentoring, if desired.“People have to learn basic financial management skills, we aren’t taught them at school,” says Lomas of the focus groups. “But education is the secondary benefit, the main benefit is the gathering of like-minded people.”There haven’t been many mistakes in building Destiny, but Lomas says that if she had her time again she would have borrowed more money. “I’m much more comfortable with debt now that I have a lot of it and I realise it hasn’t killed me. I should have backed myself more in the beginning,” she says. “We’re very successful and we’re a national company but a lot of people have done it more quickly. We probably would have done it more quickly had we wanted to borrow money. My business never borrowed money until six months ago.”She considers this before adding that there have, however, been a lot of benefits in the time it has taken. “When we first started to franchise, we only opened a couple of branches and spent quite a few years getting the model right. There is quite a lot to learn when you’re a franchisor. So many franchise networks grow really big, then fall flat on their faces.”Author of several books, Lomas has also conducted seminars, contributed to publications, appeared on television and radio. However, she is working on ensuring that the Destiny brand is sustainable without her profile. Although she admits media exposure has been advantageous for the business, she says it’s “a double-edged sword”.
“When someone buys a franchise they’re responsible for getting their own leads and building a presence in their community. What my media presence does is create a reliability on me to bring in the leads,” she explains. “So, for the last few years we’ve been all about brand building, and building a strong network that doesn’t need me to have my name in the paper or run a seminar.”
{mospagebreak}The company now has 13 offices in five states, including a ‘virtual branch’ that caters to clients who can’t access a physical branch, including expats looking to invest in Australian property. Lomas expects that the support aspect will improve after they install video conferencing so distant clients can enjoy focus groups as their local clients do.As well as upgrading the virtual branch, Destiny is looking to open physical branches overseas.“The American market is in a bit of disarray at the moment so it looks like it’ll be the UK market that we’ll attack next,” Lomas predicts. “The UK has a lot of similarities to the Australian system. It’ll require a bit of tweaking, but most UK residents are unaware of what’s offered to them in terms of tax benefits, and that’s where we come in.”As if that isn’t enough, Lomas also actively supports community projects—on an industry level in founding the Property Investment Association of Australia, to financial support of the charity World Vision. Now the Destiny Entrepreneur of the Year Award, a prize of money and mentorship awarded to a school student with business promise, supports budding entrepreneurs.“The Destiny Young Entrepreneur of the Year Award is something close to my heart and something that my husband is very passionate about, too,” says Lomas. “I want to develop that into a foundation where young people can apply to us for grants. That way we can really give back to the community.”That’s just good business karma. Or is it Destiny?
