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Her Inspiration
Rachel Elnaugh
From the very public collapse of her high-profile business, to finding fame on the TV show, Dragons Den

Her Insight
The Beat Girls
The definition of the ultimate Girl Band in Australasia

Her Inform
Emotion and Business
Are not always best of friends

 

Her Inspiration

In Every Adversity Lies the Seed of Opportunity
Rachel Elnaugh

It’s not what happens to you that counts, it’s how you deal with it. That’s Rachel Elnaugh’s motto after a roller coaster ride which recently saw the very public collapse of her high-profile business and found her finding fame on the TV show, Dragon’s Den.

In 1989, on a shoestring budget, Rachel Elnaugh set up Red Letter Days, a pioneering ‘experiences’ company in the UK. The concept was unique: she offered such activities as hot air ballooning or driving a Ferrari as an alternative to more traditional gifts. It was such a hit that Red Letter Days created an entire industry and turned over in excess of £100 million.

By 2002 Rachel was being feted by the press. She won an Ernst & Young Entrepreneur of the Year Award and was short-listed for numerous other accolades including the Veuve Clicquot Businesswoman of the Year.

After more than a decade of successful and profitable trading, in 2002, Red Letter Days over-expanded and got into financial difficulties. Last year, it went into administration but was bought by two of her fellow dragons, Peter Jones and Theo Paphitis. Although it continues to trade, Rachel is no longer involved.

Losing her ‘baby’ was an exceptionally difficult time for Rachel, who spent two and a half years desperately trying to save the business. “At the time, I thought that failure and losing the business would be the worst possible thing that could happen to me. But when the end finally came, it proved to be a real liberation. I had been under huge stress; I had given birth to my fourth son a week before and so was able to be a ‘proper’ mother for the first time. And all sorts of new opportunities arrived on my doorstep. As they say, when one door closes; somewhere, a window opens.”

Looking back, Rachel realises she had outgrown the business and needed to let it go in order to progress with other projects and ambitions. It must have been hell on earth. “During the last couple of years, I was also betrayed by a lot of people I trusted and was crucified by the media in the UK. I had to work through a lot of anger and negative emotions and release these. I had to focus on positive thoughts to help me through the trauma,” she says. Today, Rachel is philosophical about it all. “In some respects, I now think that losing Red Letter Days was the best thing that could have happened to me, although it wasn’t easy to see that at the time!”

After it was all over, Rachel took time-out to recover from her ordeal. This appears to have been an excellent move as she has since been swamped by new opportunities.
She says, “When Red Letter Days crashed, I made the conscious decision not to start a big business. However, every day I receive new opportunities, and I have become involved in a number of different projects, some of which have already been launched and some of which will launch later this year.”

One such project is speaking to business audiences and mentoring/advising other entrepreneurs, which she finds tremendously fulfilling. “I often talk to audiences about the dark side of business and my experiences of losing the company. So many entrepreneurs out there are struggling with the same problems, but no-one wants to admit it as there is a real stigma attached to failure. It’s very easy to think you are the only one who is having it tough, yet the majority of successful entrepreneurs are struggling or have struggled with major issues in their businesses.”

“I’d like to get business people talking openly about their issues and embracing the fact that making mistakes is all part of the entrepreneurial journey,” she says. Or, as the Dalai Lama puts it, ‘when you lose, don’t lose the lesson’. Which makes sense given that most of us learn more from our own mistakes than we do from those of other people.

Rachel is quite upfront about what she’s learned. After all, her failure was not only financially large, it was spectacularly public. And the British media love nothing more than to vilify someone they have previously idolised.

The lessons may have been tough, but they have been well-learned. Money, she now knows, is not everything. “Liberation, time and freedom are equally important.” She also now knows that in every adversity lies the seed of opportunity. And, probably most importantly, it’s not what happens to you in life, it’s your attitude to it that counts. Rachel says, “The most valuable commodity you have in a cash flow crisis situation is time - and you always have less of it than you think. Take specialist advice as early as you can, or immediately you think you may have problems.”

“Be very wary of anyone offering to help if they stand to gain financially from your downfall. And always keep at least three options open at all times,” she says. Through her mentoring programme, Rachel realised that the key qualities of the successful entrepreneur are all to do with having the right mental attitude. Self-belief, determination and drive are key, she believes.

She has created a CD which gives budding entrepreneurs all the basics of business start-up, plus the inspiration and motivation to go for it. Her CD also contains a hypnotherapy session from Glenn Harrold, the UK’s leading audio hypnotherapist, to help with the mental attitude side of the equation. Rachel has been using his guided mediation tapes for years. “The subconscious mind is incredibly powerful,” she believes.

This CD, Escape the Rat Race, was launched in June. Rachel has received great feedback and says it’s been very rewarding to see it develop from just the seed of an idea at the beginning of the year, to a fully-fledged product which is selling extremely well. (Visit www.thelifechangers.co.uk or Amazon for more information or to order).

By Lynnaire Johnston

Her Insight

The BeatGirls

What is the definition of the ultimate Girl Group? Well it’s not in the Collins Pocket English Dictionary, but if it was… then The BeatGirls would definitely fit the bill.

The BeatGirls are the brainchild of Wellingtonians, Andrea Sanders and Billy Watkins. A partnership in business and marriage, the couple are a talented, motivated and entrepreneurial business team who are not only world-class singers and musicians, but also creative and ambitious in their approach to the commercial music industry - a priceless combination in the fickle world of entertainment.

2006 is the10th Anniversary of The BeatGirls. Their progression from one gig a week at a local bar to travelling across the world to perform at such events as the Athens Olympics is testament to Billy and Andrea’s commitment to excellence and the creation of a winning product.

The BeatGirls are Australasia’s hottest Girl Group. They currently employ 9 women in New Zealand and 3 in Australia, which allows 4 gigs to be booked on the same night and performed congruently anywhere in the world; a far cry from the 2 women who joined Andrea and Billy and a 5 piece band to sing Beatles covers back in 1996. But Andrea and Billy could see they were onto a good thing.

They expanded their repertoire to span over 40 years of popular hits and opted to work with programmed backing tracks, rather than their band, to extend the variety of instruments they could call on and cement the Girl Group concept. With this comprehensive repertoire and defined aesthetic, the group has gone from strength to strength. Over the past 10 years it has performed for high-profile, corporate clients everywhere from Hong Kong to Athens, Miami to Puerto Rico. And in New Zealand, they have played everywhere from Keri Keri to the Bluff, entertaining at private functions and for corporate clients who have moved the dates of their events to accommodate the busy BeatGirls schedule and continue to book them year after year knowing that The BeatGirls will never fail to deliver a show the audience will never forget.

“It’s great that it started off as not being a serious business venture. It started out as fun, and I think that’s the reason why we are still working now!” says Andrea. “One of the biggest components behind the success of The BeatGirls is the pursuit of excellence,” says Billy. “When a new BeatGirl comes into the group, it can take at least 2 months to train her. There are more than 1000 songs to sing and every song has its own choreography. The culture isn’t ‘learn this or we will fire you’; it’s ‘we’re all aiming for excellence and we all help each other’ so everyone can come up to the same bar.”

The BeatGirls work under the umbrella of Total Entertainment NZ Ltd and this parent company also manages Glamazon Productions, which looks after sound engineering and lighting design, and Scratch Records, a new company that looks after original music production.

“The original vision of a centrally-managed, international franchise of a live entertainment experience has been realised,” says Billy. “The next step will involve further international expansion and a move into other media.”

The BeatGirls new website will be launched in the next few months and this will begin the promotion and supply of BeatGirl merchandise. The group currently creates its own theatre productions and tours to festivals nationwide, but Billy and Andrea have ideas to expand into television production; and, at this stage, envisage their material to be aimed at children’s entertainment.

Scratch Records is their exciting new venture, sidestepping the record labels and becoming independent. Recently Andrea and Billy travelled to Sydney to record a single with long-time friend and fellow musician, Barbara Griffin. This will be produced by Scratch and promoted in conjunction with Mikee Tucker’s LOOP Recordings.

All of this success and strong business strategy has not gone unnoticed. In May of this year, Andrea was asked to be a speaker for Women in Technology. Also in May, The BeatGirls were nominated for a Wellington Business Gold Award. They are also currently in the running for the Ernst and Young National Entrepreneur of the Year.

“The BeatGirls may not be in the current vernacular of ‘What’s Hot’ in New Zealand such as Fat Freddy’s Drop or The Black Seeds,” says Billy, “but I think we’ve reached the saturation point where we can tap into the resources that are available.” Andrea adds, “Maybe [we could] have a cultural impact and become part of New Zealand’s musical kiwiana history… like The Topp Twins. We know what we do is popular and we have been successful for the past 10 years, so there’s no reason why we can’t be around for another 10!”

By Carrie McLaughlin
Photos Mal Brow

The BeatGirls celebrate their 10th Birthday with a brand new show at Circa Theatre.
The BeatGirls Birthday Bash: September 23 - October 21, 2006.
Phone Circa Theatre for bookings on 04 801 7992. Visit their website on www.thebeatgirls.com or call 0800 beatgirl

 

Her Inform

Emotion and Business - Not Always Good Friends

None of us are immune to emotion in business. We can all think of at least one bad business decision where our emotions led the way, leaving us with 20/20 hindsight of how we would do things differently next time. But would we?

It is a well-known fact that people buy based on emotion. Marketers and sales people the world over have taken advantage of this for centuries.

Property-savvy people find themselves caught up in an auction or negotiations, paying more than they had intended. Experienced business people buy an expensive piece of plant and equipment that will increase capacity and efficiency but is too large or expensive for the current size of the business, putting them under financial pressure. And otherwise sensible people buy businesses based on the potential of what the business could do rather than what the business is doing now; effectively buying a huge pile of problems they have to sort out before they can even start to think about making money.

The truth is – there is no such thing as a truly objective business person. There are only very good, successful business people who have recognised that they, like everyone else, will be tempted to make emotion-based decisions. What makes them different is the safeguards and checks they have put in place to protect themselves and make sure their decision-making processes are as disciplined and objective as possible.

Use these keys to be more objective, and less swayed by emotion, in your business decisions:

1. Set your objectives and parameters before you start. What are your expectations for increasing sales, production efficiencies, and capacity from this project, purchase, or opportunity? What return on your investment do you require (i.e. what extra profit do you expect to make, and what is that as a percentage return on the money you are spending or investing)? Most business people require at least a 20% return on investment, comparing the level of risk with safer investments such as term deposits with a bank.

What will you do if the business case and figures do not achieve these objectives? Now is the time to set the minimum parameters you need to meet to go ahead with the project - understanding that if you do not meet these parameters, you will make an objective decision to ‘walk away’ from the opportunity.

2. Be accountable. Share your objectives and parameters with someone else before you go any further. Avoid sharing your plans exclusively with employees, friends and ‘yes’ people. It is great to have encouragement in business, but ‘groupies’ who don’t challenge you have the risk of escalating, not reducing, the level of emotion in business decisions.

To be accountable, and make more objective decisions, you need to share your objectives and parameters with one or more people you respect who are in a position to question and influence you. You also need to give them permission to challenge your decision if the business case and figures don’t stack up. This will protect you when you find yourself justifying something you really want to do when it doesn’t meet the objectives and parameters you set for yourself at the outset.

3. Prepare a written business case. An excellent discipline when deciding on a major purchase or new business opportunity is to prepare a written business case as if you had to present it to your boss (if you had one) or a Board of Directors to get their approval before you could go ahead. This only has to be one to two pages long, with bullet points detailing the opportunity, potential growth and efficiencies, as well as the risks involved and what could go wrong. A written business case like this clarifies your thinking, helps you make more logical decisions, and can prevent you going around in circles.

4. Do the figures! Do the figures! Do the figures! The golden rule in business – If the figures don’t stack up, don’t do it! Don’t fall into the trap of being so excited about a project or opportunity that you rush ahead without doing the figures first. It doesn’t matter how good an idea may seem, if it doesn’t make money, it’s not good business.

If you don’t know how to use spreadsheets or financial forecasts and models, get someone to help you. It is better to spend a few hundred dollars now to find out if the figures stack up, than lose thousands of dollars later.

5. And do the figures again! When you are analysing a major purchase or looking at a new business opportunity, the chances are you will be over-optimistic in your forecasts. To protect yourself from making an emotional decision based on excitement, and possibly greed if the original figures look fantastic, you need to do the figures again.

This time, halve the sales figures you used in your previous financial modelling to create a worst case scenario. If the project is unprofitable with these new sales figures or has a high sensitivity to sales (i.e. a small drop in sales creates a disproportionately larger drop in profitability), this may be an indication the project is too risky or just not good business.

6. Find your Break Even Point. What level of sales do you need at current margins and overhead expenses to ‘Break Even’ (i.e. make $0 profit) on the project? This is a really good figure to use as the benchmark to ‘get out’ before you lose too much money. For example, if you do not break even for more than XX months then you will close down the project.

Whether you are buying a business, building a commercial property, purchasing an expensive piece of plant and equipment, or investigating a new business opportunity, beware! Don’t let your emotions rule. Reduce the risk with a disciplined, objective decision-making process.

By Fiona Schroeder

Fiona Schroeder, Director of Business Architects, the business risk management specialists. Visit: www.businessarchitects.co.nz