Be prepared, winners urge

While Western Australia’s entrepreneurs continue to thrive in today’s buoyant climate, the smart operators are keeping one eye on the future and a post-boom marketplace.

At a breakfast forum last week to launch the 2007 WA Business News 40under40 awards, four entrepreneurs shared their insights on a range of subjects, from their luckiest breaks in business through to succession planning, getting additional equity to expand the business, and maintaining a work-life balance.

However, underlying the discussions was a focus that, while the state is in the midst of good times, it won’t last forever and businesses must take advantage of the current conditions to set themselves up until the next cycle begins.

Hosting the breakfast was Peter Harold, managing director of highly successful Western Australian nickel producer, Sally Malay Mining Ltd.

On the panel were Eddie Rigg, managing director of financial services group Argonaut Ltd, iiNet managing director Michael Malone, partner of boutique accounting firm Gooding Pervan Pty Ltd, Suzan Pervan, and Brett Martin, managing director of Australia’s fastest-growing boat builder, Trailcraft Pty Ltd.

All have raised their respective businesses from obscurity and are fully aware of the hurdles faced in running a company during a downturn in the market.

None more so than Mr Harold, who has navigated Sally Malay through some uncertain times over the years.

He was closely involved with securing an overseas purchaser for 100 per cent of Sally Malay’s future production and steered the company through an IPO phase during September 2001. The company’s share price continues to break 12-month highs on the back of positive drilling results at its Pilbara operations.

Having grown Trailcraft from obscurity six years ago to a private operation that is claimed to be the biggest producer of plate aluminium trailer boats in the world, Mr Martin said his motivation came from the ability to inspire other people to share his vision for the company.

Asked what it was like to wholly self-fund Trailcraft, Mr Martin said while he was fortunate to still own 100 per cent of the company, it had put considerable strain on the financials of the business.

“[Looking back] whether private equity or venture capitalists would have alleviated a bit of that I am not sure,” he said.

For Mr Malone, who was introduced at the breakfast forum as Western Australia’s version of Bill Gates, the ability to obtain additional equity or funds to expand the business was made more possible by the fact that iiNet was publicly listed.

“It just comes down to how much it is going to cost existing shareholders and other stakeholders inside the business,” Mr Malone said.

“If I was going to point to something I could have done differently over the last couple of years, it would have been when our share price was sitting over $3 to raise as much cash as I could while the sun shone.”

With a background in global investment banking, Mr Rigg said cash-rich companies should take advantage of the current boom conditions, calling for further merger and acquisition activity of cash-strapped companies to combine their cashflow and to apply their expertise to grow the business.

All four panellists highlighted retention of staff and costs associated with replacing skilled employees as current imposts on their business.

The notion of work-life balance, what it meant and how to achieve it, provoked some contrasting views among the panellists, who nevertheless acknowledged the importance of maintaining a balance and the challenges in making it a reality.

Ms Pervan said she had made a conscious decision, once having children, to spend more time out of the office.

“I wouldn’t call it a balance,” she said. “I call it precision timing.”

Asked what he would do if he was state premier to ensure future prosperity in Western Australia, Mr Rigg highlighted the importance of spending profits made from the current conditions on infrastructure.

“…so when the markets do turn down, we have an efficient way of actually getting the product to port,” he said.

A policy of great interest to Ms Pervan concerned women’s role in the workforce.

“Whenever a skilled female walks out of her office or a factory, that is a skilled person who is leaving that we need to entice back in,” she said.

Mr Martin said he would increase his pay packet to $5 million, sack himself and then get someone else who was more skilled to take the helm.

The breakfast forum also gave some panellists the opportunity to vent their frustrations… mainly over the younger generation of employees.

Mr Rigg emphasised a lack of drive and respect for another person’s dollar among Generation Y, while Mrs Pervan said there were problems trying to identify future leaders, which led to succession planning issues.

However, Mr Malone was more forgiving, saying Generation Y should make the most of the opportunities available to them.