How I Made My First Million: 26 Self-Made Millionaires Reveal the Secrets to Their Success

How I Made My First Million: 26 Self-Made Millionaires Reveal the Secrets to Their Success

by Nick Gardner

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Product Details

ISBN-13: 9781741768244
Publisher: Allen & Unwin Pty., Limited
Publication date: 11/01/2010
Sold by: Barnes & Noble
Format: NOOK Book
Pages: 198
File size: 826 KB

About the Author

Nick Gardner is the Business Editor of the Sunday Telegraph, where the interviews that form the inspiration for this book first appeared.

Read an Excerpt

How I Made My First Million

26 Self-Made Millionaires Reveal the Secrets to their Success


By Nick Gardner

Allen & Unwin

Copyright © 2010 Nationwide News Pty Ltd
All rights reserved.
ISBN: 978-1-74176-824-4



CHAPTER 1

An Idea Worth A Million Dollars


Danial Ahchow
Service Central;

established 2005;
100 employees;
$4.7 million turnover


One day, when Service Central is worth billions of dollars (as I've no doubt it will be) and founder Danial Ahchow is a squillionaire (which he most certainly will be), somebody will say: 'What a simple idea, why didn't I think of that?' So simple, in fact, that the chances are many of us have had a similar idea. But picturing a simple idea and having the determination and vision to make it a reality are two very different things. And simple though Ahchow's idea was, implementing it has consumed the last five years of his life, eaten millions of dollars in investment capital, and only recently made the thirty-two-year-old entrepreneur a millionaire — on paper at least.

But millionaire status is just the beginning. Global domination is also on the company's agenda, and Ahchow has appointed Australian business legend Shaun Bonett, the property developer (and, with a fortune of more than $200 million, a regular on the Young Rich List), and Cliff Rosenberg, former managing director of Yahoo! Australia & NZ, to help steer the company's growth. It is a testament to the potential of the business that both were so keen to get involved. 'I wanted the experience and credibility of these guys and I was so happy they wanted to get on board,' Ahchow says. 'They're easy to get along with and have so much experience, it's been fantastic.'

So what is this amazing idea?

As I said, simple: a quick and easy way for people to find reliable and competitively priced tradesmen instead of flicking through the Yellow Pages in blind faith. 'Looking in Yellow Pages or even scanning online can feel like doing the lottery,' Ahchow says. 'I was trying to find contractors for my dad's cleaning business when I had the idea — there was just no way of telling how good people were or whether they wanted the work.'

Initially, Ahchow thought everything could be automated. 'I had this vision of a black box that could do everything, match all customers with tradesmen, and we'd make millions,' he says, waving arms in the air enthusiastically. 'But since those early days, we've spent about $4 million on IT and we still don't have any little black box. And we probably never will.'

The main reason is that human input is needed to establish who is good and who isn't. A black box just can't give Ahchow the unique selling point that underpins Service Central's business. 'There are review sites for almost everything, but you can't just ask people for reviews of tradesmen. Companies have tried that, and they've had firms giving themselves great reviews, or rubbishing their rival across the road.' Ahchow's vision was of a site that 'had to be independent and be able to prove its independence'.

So Ahchow took on the leg-work himself. Service Central now employs almost 100 people to visit tradesmen and rate them on four indicators. First, they need to be properly registered with their trade association. They also need to be fully qualified and able to prove it. Third, they must have insurance — which happens to be where about 75 per cent of businesses fail Service Central's eligibility test. Finally, Ahchow applies what he refers to as 'the granny test'. 'It's quite subjective, but we ask ourselves: "Would you invite this person over to Gran's for tea?"' Perhaps unsurprisingly, many companies also fall at this final hurdle. 'We don't want to be recommending people who are swearing every other sentence — it's not the image we want to convey.'

The tradesmen are then profiled and sorted by fee ranges and job capabilities: 'We don't want to send a handyman to build a skyscraper, and we don't want to send Multiplex to repair a gate.' Each company selected can register for an annual fee averaging $3000, and a per-job kickback of $7.50 for small tasks and $30 for bigger ones. With more than 3000 businesses now registered, the site's turnover is over $5 million a year and rising fast.

The business didn't really get going until 2005, yet Ahchow made his first million in 2007, when the company was raising capital for further expansion and his 50 per cent stake was valued at $3 million. 'It was weird,' he recalls. But after it happens, 'You don't behave any differently. I still act like I don't have [the money].' Well, almost. 'I've bought a house in Melbourne and a BMW Z4, which is a nice toy. Other than that, I really don't go spending money wildly.'

Ironically, rather than reducing the company's revenues, the global financial crisis helped it become more profitable.

'It resulted in us taking a long hard look at our costs and really cutting back,' Ahchow says. 'We have been reducing staff numbers and radically cutting overheads. Not that it's been forced on us — it's more preemptive. The business has continued to grow, but we are preparing for a worst-case scenario. Anything above that is a bonus.'

Ahchow has found more tradesmen applying to get on his books as the crisis has shaken business confidence: 'They want to source as much work as possible, so suddenly we're getting swamped by more and more tradesmen. It was such a struggle at first, but I suppose it's no surprise that in a recession we're getting more applicants.'

In addition to laying off some staff, Ahchow has cut back on some of his marketing costs and focused more on online advertising, which is easier to monitor.

'I use the 80:20 rule a lot,' he says.'Eighty per cent of your business tends to come from 20 per cent of your customers, so focus on that 20 per cent. Similarly, 80 per cent of your success with marketing will come from 20 per cent of your spend, so concentrate on those elements. It's common sense, really.'

Service Central is getting around 10,000 inquiries a month — and that will jump substantially after Ahchow signs a deal with a national hardware chain to provide tradesmen to its customers. Other big companies also want to get involved: 'We're now speaking to AGL and TruEnergy [about how we can help them] manage their workload to get their [excess] jobs out to tradesmen as well.'

Ahchow says the downturn has also made businesses more open to partnership deals. 'It's a great time to look around to see who you can partner with to strengthen your business.'

To help ensure consistently good service, customers are invited to rate tradesmen when they have finished their work, much as sellers are rated on eBay. If a tradesman falls below three stars out of five, he must explain to Ahchow and his team why he shouldn't be kicked off the register.

Tradesmen may be queuing up to get involved now but in the early days it was a struggle, Ahchow says.'I had to call 600 plumbers just to get a meeting with one of them, and even then it took four hours to persuade him to pay a modest $80 annual fee to join us. People kept saying they'd heard it all before. It's difficult to keep the faith at times like that, but I had such confidence in the idea — I knew it would work if only we could get enough tradesmen.'

It took a great deal of faith not only for the tradesmen but for Ahchow and his father — who helped finance the project — to stick with the idea. And a slice of luck. 'We advertised on radio. It cost $16,000 a month, which felt like a huge gamble. Then the radio station had a competition where the major sponsor dropped out, so we accidentally became the major sponsor of this Melbourne-wide promotion.' It was the stroke of fortune they needed, he says: 'It got us started.'

'I had to call 600 plumbers just to get a meeting with one of them, and even then it took four hours to persuade him to pay a modest $80 annual fee to join us. People kept saying they'd heard it all before. It's difficult to keep the faith at times like that, but I had such confidence in the idea — I knew it would work if only we could get enough tradesmen.'

The service is now available right up the east coast, from Melbourne through Sydney to Brisbane, and it's expanding on the Gold Coast. Overseas is next. Ahchow says that while the US does have a similar service, that doesn't mean he can't go there. 'First-mover advantage isn't everything — it depends how you tackle the market. But there is nothing like us in the UK or Europe, and that's a huge market.'

There is still work to do before Service Central dominates Australia. But judging by his success so far, you'd have to say that Ahchow has a very bright future indeed.

NICK GARDNER


GOLDEN RULES

1. Keep communicating with your staff. They need to know you're in control and they need to know what is happening. Keep them informed.

2. It's not just about finding smart people, it's about empowering them.

3. Don't promise anything you can't deliver.

4. Use economic downturns to cut costs.

5. Focus on the 20 per cent of your customers who provide most of your business.

6. Never deceive yourself — assume the worst and build your business model accordingly.

CHAPTER 2

Pub Baron Shrugs Off The Worst Of Times


Mark
Alexander-Erber
Pubboy;

established 1997;
twelve employees;
undisclosed turnover


Mark Alexander-Erber is passionate about things. Things like guns, fast cars, Harley-Davidsons, women and tattoos. He is not, in short, your average millionaire businessman. Indeed, depending which reports you believe about his Pubboy empire, he may not be a millionaire any more. But even if he's not, his wild ride to riches was certainly a colourful one.

Alexande-Erber's language is also colourful — tending to psychedelic.

By his own admission, 2007 (when he turned thirty-seven) was a horrible year. Everything that could go wrong did, including fire, flood, theft and divorce. No ordinary person could have coped with the things that happened to him in '07, he maintains: 'A normal businessman wouldn't have handled it, there's just no f****** way. They would have ended up in a ball in the corner, in the foetal position, sucking their thumb, on f****** medication.

'I got through because I believe I'm the truest essence of an entrepreneur. And that's real. I don't give a f*** what anyone says, that's real. I'm real. You cut me, I bleed. Tell me something funny, I laugh. I see something sad, I cry. It's not a f****** show, this is me.

'People don't see that. They see what they want to see.'

I first met Alexander-Erber in his Paddington, Sydney, offices a couple of years ago, when Pubboy was on the rampage, with a chain of twenty-six hotels pouring their profits into its owner's denim pockets.

The walls of his lavish home — complete with pool table, motorcycles, pinball machines, super-sized stereo and silly-sized TV and computer screens — were covered with framed articles boasting of his business acumen and his inclusion in BRW's Young Rich List. To describe him as media friendly would have been like calling Kevin Rudd slightly smug. It's fair to say that he lost a little of his enthusiasm for the press after his relationship with Amber Petty (bridesmaid to Princess Mary of Denmark) became public. A photo of the two at a Pubboy Christmas party, along with an assortment of bikies including Bandidos chief Rodney 'Hooks' Monk (who was later murdered), stirred a media frenzy very different from the kind he'd been used to.

Alexander-Erber gives his bald head a rueful shake and points out that he's never been a member of a bikie gang himself. 'People try and link me to that; it's a media-driven thing,' he says. As the thinking goes, 'I've got tattoos, a goatee and a bald head, and I ride Harleys, so I must be bad, or I must think bad. It's not like that at all. The Israeli ambassador to Australia is a very good friend of mine. He's a magnificent person, but if I hang around with him people don't suddenly say I'm pro-Israel.'

'On the other hand, I will say I would have some of the bikies I know over to my house before I'd have half the bankers. They're a lot nicer people, and they're real.'

It's unlikely Alexander-Erber has had any of his recent clippings framed for his wall. Those news items carried headlines proclaiming that his empire had collapsed and he was $20 million in debt. It's a subject he'd rather not discuss in detail. But he will admit that at least some of his pubs are in the hands of receivers, reportedly appointed by ANZ Bank, which is said to be owed $10.5 million. 'In 2007, we had a series of events — fires [the Lawson pub in Mudgee], floods [which trashed three of his Newcastle pubs] and robberies,' he says. 'It was biblical. At one point I looked out the window expecting to see a plague of locusts.

'It was biblical. At one point I looked out the window expecting to see a plague of locusts.'

'Then my marriage broke down, which was tough. I had a series of things that forced me to restructure. What I'd like to say is that all the reports that have come out about me have been absolute bull****. We haven't gone bust at all.

'I've restructured. I made a decision to work with the banks. We didn't go bust for $20 million; I'm working with administrators and receivers to restructure the group. Some will be sold to pay off the bank debt. I'm hoping to do some kind of deal to get some of the pubs back and keep moving forward and fixing up all creditors.'

To most people that sounds like an unmitigated nightmare, yet Alexander-Erber says he's 'so happy and so excited' about what's happened he can barely put his feelings into words. 'All this has made me refocus and look at my life and what I want. It gets to the point where you think: "How many cars do you want? How many flash houses do you want to live in?" I've always been spiritual, but I got lost along the way. Now I'm finding I've got time to sit and reflect on where I went wrong.'

What would tip some people into depression or worse is to him a valuable life lesson: 'I don't look at anything as going wrong; I look at it as an experience. I've definitely been let down by people who worked closely with me, and I take responsibility for that. I trusted them too much. I thought they knew what they were doing, and they didn't. It's been an amazing experience, and anyone who counts me out would be foolish.'

Alexander-Erber's eye is still on the future, but it's a calmer, saner future: 'The way I'm going to set things up is going to set me up for the rest of my life. I'm meeting some incredible, spiritual people who are supporting me. I'm excited about that. I'm very fortunate to be learning this lesson at an early age. And I'm certainly not on the bones of my arse.'

Although his flamboyant tattoos — 'Live life your own way' covers his back — suggest he crawled up off the mean streets, Alexander-Erber grew up in Vaucluse and was schooled at Sydney Grammar and Cranbrook, where one of his classmates was James Packer. However, he didn't enjoy 'the confines of school' and left halfway through Year 12 to attend catering college.

In 1985 he took a job at the Regent Hotel in George Street. He stayed there until 1997, when he bought his first pub, the Iron Duke. His Pubboy empire grew and grew until he hit millionaire status 'on paper' in 2003. But if that came as a surprise to some, for him it was merely the culmination of a lifetime of entrepreneurial effort. 'My whole life I was making money: washing cars at weekends, doing up cars, various things,' he says.

'From very early, I trained my mind with affirmations and visualisations. When I was fifteen, I'd get up every morning saying: "I am a multimillionaire, I drive a Rolls and I live in a waterfront house." Although those things weren't in my life yet, I trained my mind to think like that and to believe that. Once you believe it, it manifests itself and it happens.'

When the multimillionaire visualisations became reality he thought it was important to reward himself, and he did. 'I've always had two cars, right from when I learned to drive, whether it was a Mustang and a Land Cruiser, or a Porsche and a vintage car. At one stage I had thirteen cars. I don't spend a lot on clothes, but I like guns. I collect guns; I've got about ten pistols. I've got a massive collection of rock 'n' roll memorabilia. I suppose I've spent money on things like that. I've got a tile from the pool that Brian Jones [the founding Rolling Stones member] drowned in. That's pretty cool.'

He regrets that as the Pubboy brand developed his personal life became public property, but the experience didn't frighten him all that much. Indeed, he's now working on a reality-television show about himself that he says Foxtel and one of the big networks have shown interest in. 'It's an excellent capture of my life,' he says. 'I'm very passionate about everything I do. I'm passionate about my children. I'm passionate about my business. I'm single, so I'm passionate about women.

'Money comes and goes. You don't take it with you when you go; all you take is a good soul.'

STEPHEN CORBY


GOLDEN RULES

1. Live your life your own way.

2. Stay true to your dream.

3. Believe in yourself.

4. Make love, not war.

5. Get your priorities straight.


(Continues...)

Excerpted from How I Made My First Million by Nick Gardner. Copyright © 2010 Nationwide News Pty Ltd. Excerpted by permission of Allen & Unwin.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Contents

An Idea Worth a Million Dollars — Danial Ahchow,
Pub Baron Shrugs off the Worst of Times — Mark Alexander-Erber,
An Ad for the Good Life — Grant Allaway,
Making Millions for Others — Charles Anstis,
The Power of Flowers — Jonathan Barouch,
An Ideal Business Model — Shelley Barrett,
Chasing Big Bickies — Andrew Benefield,
The Unbreakable Bond — Peter Bond,
A Winning Flight of Fancy — Hans Hulsbosch,
The Day that Changed a Life — Margot Cairnes,
An Idea Awash with Cash — Jim Cornish,
A Fascination with Figures — Angus Geddes,
A Career Well Matched — Trudy Gilbert,
Success on the Line — John Ilhan,
A Life of Talking Points — Alan Jones,
A Cut and Dried Success — Denis McFadden,
A Fine Performance — Andrew McManus,
The Boss with the Lot — David Michaels,
X Marks the Spot for a New Approach — Jennifer Nielsen,
Success All Wrapped Up — Michael Paul,
Go Green for Gold — Malcolm Rands,
The Coffee King who Changed Australians' Taste — Les Schirato,
High Flier — Penny Spencer,
He Chose to Kick Goals — Peter Switzer,
That Aussie Bloke — John Symond,
Special Blend for Success — Angela Vithoulkas,

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