6 Golden boy An experienced management team gives Golden Boy the golden touch.
12 client story Fennell Forestry – Same, same but different: Fennell Forestry branches out.
26 Food, wine and hospitality Food Sector – Real opportunity or just a dream?
ISSUE FIVE An advice, news and lifestyle magazine for clients Hood Sweeney Serving South Australians for more than 40 years Accounting 4 Kounta 5 Get your head in the cloud to find Kounta cloud software gives hospitality the secret to business success. businesses new fire power to boost performance.
Golden Boy 6 Financial Planning 10 An experienced management team Waiting for value stocks is like waiting gives Golden Boy the golden touch. for the right wave in choppy seas: worth the wait, say expert investors.
Fennell Forestry 12 Same, same but different: Fennell Forestry branches out.
Front Cover Wendy Fennell Fennell Forestry
Agribusiness 16 Performance coaching 18 Savvy SA agribusinesses add value How not to go the way of the Dodo and change the tune for food and with technological change. wine production.
Kings Creek 20 Barramundi with naam jim Kings Creek Station tourist experiences: dressing 25 Conway Family dreaming becomes reality.
Food, Wine and Hospitality 26 Hospitality 28 Food Sector – Real opportunity or just Passion and business sense: a dream? key ingredients for success in the hospitality sector.
SA Wine Sector 30 SA wine sector improving with age — and strong management.
Disclaimer Disclaimer This magazine is intended as generalThis information magazine only. is intended It does asnot general purport information to be comprehensive only. It does advice. Readers should seek professionalnot purport advice tobefore be comprehensive acting in relation advice. to these Readers matters. should seek professional advice before acting in relation to these matters.
| 1 | Welcome Welcome to the first edition of Life and Toil for 2017.
In this edition, we focus on the small Having the right advice at the right time has also helped Ian Conway to realise his family’s dream of creating an outback and medium businesses (SMEs) eco-tourism resort on their Kings Creek Station. The station’s that are the backbone of the South “glamping” facilities, together with new luxury units nestled into the rocks and equipped with air conditioning, showers, Australian economy. television, swimming pool, are a far cry from the camping ground Ian levelled with a piece of railway iron tied behind an They make up more than 90 per cent of the business sector old Toyota. His business systems, now run by daughter Megan in our state and have been heralded as the saviour of the with assistance from Hood Sweeney, have been updated struggling economy. SMEs are extensions of their owners’ from the old system which was based on a shopping bag passions, capacities, goals and ambitions. Hood Sweeney is of receipts. proud to work with a large number of SMEs in South Australia. In this edition, we also bring you insights from It’s important that SMEs consider their strategic approach and Hood Sweeney’s specialist advisors in the food, hospitality business plan in order to grow and thrive. Consider the sage and wine sectors. words of our Chairman, Rob DiMonte, if you're thinking what You’ve probably heard about the “dining boom” that has this might mean for you. Rob notes that those in the box seat been predicted to replace the mining boom. Much has been for growth are those that have adopted a strategic approach made of South Australia’s potential as the food bowl of Asia, and have developed markets for their products outside of with food and beverage product manufacturing in South South Australia. It’s important to have the capacity to invest Australia accounting for more than 25 per cent of the total and to have an investment mindset — even for small and manufacturing workforce in the State. medium enterprises. Businesses that have access to strategic advice will have the edge. While South Australia’s restaurant sector is celebrated and many people aspire to being a Master Chef, it’s critical to take It’s this type of strategic approach to growth that has helped a strategic approach, says Hood Sweeney’s Food, Wine and drive South East family business, Fennell Forestry, from Hospitality sector specialist Priya Chadha. Success in the strength-to-strength. By seeking new markets and continually restaurant business is not just about passion — it’s about working on the business as well as in the business, managing having good business sense and understanding your market director Wendy Fennell says the company has just had its before deciding your food model, she says. best year in 25 years. It’s a sentiment echoed by Wine Sector lead Adam Wright who says while the sector is bouncing back from the challenges of recent years, changes in the tax regime make it more important than ever to seek advice about how to structure your business effectively.
| 2 | Award-winning Adelaide restaurant Golden Boy seems to have found the formula for success, recently scooping silver in the National Restaurant and Catering Awards for Best Thai in Australia and two Forks in The Advertiser Food Awards. Co-owner Sondra Deering says the restaurant’s success reflects a strong vision, an understanding of how to be profitable in this market and a commitment to excellence. By introducing some edgy business improvements in the form of online booking, a two-sitting schedule, set group menu and deposits for group bookings, the restaurant has been able to deliver. Not only do we bring you insights into the success of Golden Boy, we also share their wonderful recipe for barramundi with green mango salad. There’s a lot more to read. We hope you take away something for your business. Come and chat to us if you would like more information.
Disclaimer This advice is general advice only and has been prepared without taking account of your objectives, financial situation or needs; and because of that you should, before acting on the advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. Chris Stewart Managing Director | 3 | Accounting Get your head in the cloud to find the secret to business success.
A new wave of accountants is emerging Cloud-based technology provides providing solutions for a range of and they have their heads in the valuable data about your organisation, functions including: inventory, debtor cloud and their feet on the ground, your operating costs, as well as your management, time tracking, point of sale, says Hood Sweeney’s Dion Carbone. business environment. However, as human resources, customer relationship with anything the real power lies in management, eCommerce, reporting, The increasing popularity of connected your connected advisor joining the dots payment gateways and industry specific accounting software, such as Xero, has between the financial and non-financial software. seen proactive accountants moving information to improve and grow your towards advisory roles and away “There is some fantastic technology business, he says. from the standard client compliance out there that can change the way we requirements. “Many businesses don’t leverage the do business. Something as simple as an information they have or the potential in-store beacon can tell you how many The adoption of cloud solutions has information they could have available people enter your store and then you allowed real time access to client for crucial decision making. can use that information to determine information meaning an advisor can your sales conversion rate,” Dion says. provide valuable and timely advice “That’s where having totally integrated on business operations. systems and an advisor to guide you It’s easy to spend up on the latest and can provide the edge in improving greatest applications without being clear A business’ success is often about the the performance of your business and about what will really work to improve ability to step away and look from gaining a competitive advantage in the your bottom line which can end up outside its day-to-day operation, marketplace,” Dion says. costing you time and money in the at the bigger picture. process. Hood Sweeney’s extensive experience as a Xero Gold Partner and Xero Authorised This is where the role of the connected Integrator means the firm not only uses advisor can be critical in assisting the Xero online accounting package you to develop a solution that meets effectively but can guide organisations your business’s unique needs. More to integrate systems across their entire importantly once the solution is business function. implemented, Hood Sweeney helps clients to understand and interpret the “It is best practice to understand your information to make better business cash flow before making financial decisions. decisions. Cloud-based packages can provide this data seamlessly and most “That’s the difference between having importantly at the decision-making a trusted advisor who understands your moment,” Dion says. business and its unique capabilities, if you can’t use its information to impact The benefit of this means that you and decision making then you haven’t your advisor will have the most up- created any value,” Dion says. to-date information to make strategic business decisions and reprioritise “Our team can show you how to build resources immediately. your whole business around cloud integration to provide greater insight The cloud ecosystem with Xero at its into your operations, greater efficiency core now has more than 500 apps and ultimately grow the bottom line.”
For more information or a consultation about integrated Dion Carbone Manager, Accounting & Business Advisory cloud-based applications contact Dion Carbone on 1300 764 200. Representative of Hood Sweeney Accounting & Business Advisory AFSL No. 485569 | 4 | Kounta Kounta cloud software gives hospitality businesses new fire power to boost performance.
Cloud computing systems are “Open API (application programming In a Telstra Business Awards survey of over transforming the way small businesses, interface) developers can build and 170 winners and finalists more than 70 per particularly hospitality businesses, operate. connect their apps directly to Kounta, cent of respondents said they use cloud giving you complete flexibility to extend computing in their business. Integrated cloud software enables smaller your system and add new features over businesses to improve their customer The ability to use cloud-based software on time including rostering, online ordering, service and business performance, and any device at any time of day, gives small reward programs, instore beacons, cuts the time required for administrative business owners unprecedented access analytics tools and gift cards. tasks. to all the numbers they need in real time Accessible via handheld devices such as just like their larger competitors, without Previously hamstrung by the need to buy tablets and smart phones, cloud software paying a premium. This means business obtrusive and expensive point of sale frees business owners from their desks, owners are able to work closely with their systems and industry specific hardware, enabling them to manage their business business advisors to improve performance. smaller businesses are now spoilt for wherever they are. choice in cloud-based point of sale And by integrating the point of sale systems, says Hood Sweeney’s Cloud The cloud-based system is life-changing system with the Xero accounting software, Accounting specialist David Block. for small business operators who need to business owners can spend more time be experts in multitasking. Menu updates on their business and less time on “One option stands out for the hospitality can be done on the go from your phone bookkeeping. industry — Kounta is the point of sale or from the comfort of your home on system. Run entirely in the cloud with your laptop. no software to install, you can get up and running on an iPad quickly and cost The system can also be up-scaled to effectively,” he says. multiple sites as the business grows, without incurring significant costs. This eliminates the need for conspicuous hardware that adds little value outside of “Once your first site is setup, to add on simply processing orders. another register or open up a new site all you need is an iPad, a stand, a cash drawer “Kounta contains all the features you have and a printer and you are good to go,” come to expect from a point of sale David says. system including price lists, promotions, staff sales tracking, inventory tracking, Data shows small businesses have the table management and much more but jump on larger ones when it comes to the real beauty of the system lies in it using cloud computing to improve their being cloud-based. customer service and back end operations. Whereas larger franchise operations are hamstrung by legacy systems, small businesses can move to cloud-based systems more readily.
Disclaimer This advice is general advice only and has been prepared without taking account of your objectives, financial situation or needs; and because of that you should, before acting on the advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. David Block Manager, Accounting & Business Advisory
If you would like to explore the ways Kounta could benefit you, Representative of Hood Sweeney contact David Block on 1300 764 200. Accounting & Business Advisory AFSL No. 485569
| 5 | Golden Boy An experienced management team gives Golden Boy the golden touch.
| 6 | Golden Boy is an apt moniker for the golden child of the Adelaide restaurant scene given its string of awards since it was established three years ago.
The Thai restaurant, born from the Botanic Hotel in the city’s East End, has certainly a golden reputation, recently winning silver in the National Restaurant and Catering Awards for Best Thai in Australia and two forks in The Advertiser Food Awards. On the other hand, the name belies the fact that much of the business’s success is based on having a “grown up” sense of identity and purpose, says co-owner Sondra Deering. The concept of late night dining, buzzing vibrant space, spicy food and cocktails and its avant-garde administrative structures reflect a mature understanding of what works in this market niche. It’s sometimes tempting, says Sondra, to be pushed and pulled in different directions, but there’s a fine balance between understanding the market and being reactive. Head Chef Head “We’ve had a café previously and we altered our offering based on what the customers wanted. We ended up with a restaurant that was nothing like what we intended it to be. So you look at it one day and think ‘I don’t like this at all’. “With Golden Boy we had a really set idea about what we Prachaya (Palm) Skolaree (Palm) Prachaya wanted to achieve and we didn’t budge on it.”
| 7 | Golden Boy brought some edgy concepts in dining to Adelaide “We could open more but I don’t think we would get the same including having the kitchen open until 10.30pm, online result. We have consistent staff; even in the kitchen we recognise bookings, two-sittings, charging for groups of “no-shows”, and the orders of regulars and know how they like it. a tailored group dining menu. “We would rather everybody gets two days a week of complete And it works. The restaurant is usually full over the five nights rest and five nights we just hit it really hard. That way our staff a week it is open and the store room is empty at the end are happy, and we are happy.” of each day, allowing the business to order produce daily. While industry forums point to a lack of serving staff to support Recognising that consistency would be critical to success, the the 85,000 new restaurants and bars predicted to open business implemented a Tuk Tuk menu for groups of 6-plus nationally by 2020, Golden Boy emphasises a personal customer people, where the waiter helps diners choose a selection of experience. dishes at a set price. The online booking system enables the team to keep track of “When we first opened people complained about it but we customers’ past experiences and to warmly welcome them back didn’t budge and it has been the best thing for us because when they book. customers have a great experience, and it becomes the thing “To go to sleep and wake up and know the restaurant is booked people can rely on time and time again,” Sondra says. without having to make any phone calls – it’s incredible. The business also quickly opted to work five nights flat out Otherwise you are on the phone all day and trying to shuffle rather than over a 7-night trading period, which helps to build people around.” a solid team. The 60-seat business also benefits from hosting two sittings, particularly in a location where drop-ins are few. Photography Credit: Smudge Eats
| 8 | “It’s not only late night dining that is relatively new to Adelaide, Sondra also works in the kitchen a couple of nights a week it’s the two sitting thing. People sometimes wonder whether to keep her finger on the pulse. they will have enough time but if they turn up to their booking “You draw on previous experience – with everything, you on time they will have plenty. become more sure of yourself and know what works and The booking system requires groups to leave credit card details doesn’t work,” Sondra says. to cover last minute cancellations, which is driving cultural “You have to be really focused and really sure of yourself and change in the hospitality industry, Sondra says. have the right team otherwise you can’t do it.” “It means people are committed to their reservation rather than just thinking: ‘I’ll book but may or may not come’,” she says. Having an experienced management team, supported by a personalised accounting team at Hood Sweeney, has helped “ Having an experienced Golden Boy to establish a strong identity. management team, supported It doesn’t hurt that Sondra and her partner James have a number of thriving, symbiotic Adelaide businesses. They’ve also built by a personalised accounting strong relationships with some of the finest produce purveyors in the city. team at Hood Sweeney, has While the team is hot on constantly improving and gathers helped Golden Boy to establish customer feedback from a wide array of sources, it understands better how to use the information than it might have in the past. a strong identity.”
| 9 | Financial Planning Waiting for value stocks is like waiting for the right wave in choppy seas: worth the wait, say expert investors.
With the world awash with capital and Most pundits expected the market to In this market, characterised by capacity, there are few real value stocks fall after a Trump win but sentiment high asset prices and global capital to be found in local or international had shifted as his acceptance speech desperately seeking a return, it is difficult markets — until we get some growth had been more moderate than his to find value stocks. and inflation, a Hood Sweeney campaign and many predicted a boost While the longstanding bull market investment seminar has heard. to government spending on defence continues unabated, many people were and infrastructure. Masters of investing panel included being encouraged to take greater-than- Geoff Wilson and Matthew Haupt This highlights the importance of normal risks with their capital in quest of Wilson Asset Management, David not following the herd because mob of a return, Mr Michaels said. Prescott of Lanyon Asset Management sentiment is often wrong, the panel said. “With investors searching for yield, and Hood Sweeney’s Tony Michaels. Many remain nervous about ongoing people are being forced up the risk The panel said while governments had international political instability and curve… Most people are thinking, how hoped to stimulate aggregate demand resentment from the middle class which can I get an excess return and it’s not by printing money and keeping low has been suffering from falling living quite there yet and we really need to or negative interest rates, this had not standards in the US and Europe since focus on the risk,” he said. eventuated. the Global Financial Crisis in 2007. Companies have done what they could Instead, asset prices have been pushed Despite the frisson of excitement over to create value by stripping costs out of artificially high with most share prices the US election, monetary policy, not their business but most have completed significantly exceeding earnings. politics remains the key driver for asset the task and now need revenue growth Investors planning to snap up bargain prices for the foreseeable future, the to drive profit. This lean cost base will stocks in the wake of Donald Trump’s panel said. stand them in good stead to make shock victory in November were profits when demand increases. “I think as the months pass we will disappointed as markets dipped then return to a focus on the extraordinary A major market correction is still on rallied, they said. monetary policy environment, said the cards, the panel said, although it is “As an investor, the ideal scenario is that the new chair of Hood Sweeney’s possible that top line growth will begin you want a market to crash. That’s the investment committee, David Prescott. to emerge with a general pick-up in exciting part as an investor. It might demand. “We are focused on finding mispricings be painful if you are in it but really in the market – that’s easier when there’s Hood Sweeney clients heard that that’s when the opportunities present a lot of panic and a lot of fear. It’s a lot while it is difficult to pick the top of the themselves,” Mr Wilson said. more challenging in this environment market and tempting to stay in while it but it doesn’t change our focus.” continues to rise, the risks greatly exceed the potential rewards.
| 10 | The panel said although returns on cash The panel outlined four key rules for are at historic lows, it is better to retain a value investors: significant proportion of cash than take ›› Ensure you are confident in the excessive risks. company’s management before Investors should prepare for the worst investing but hope for the best in their investment ›› Identify earnings growth – earnings strategy. per share growth “We’ll sit in cash unless we can find a ›› Examine a stock’s valuation carefully – cheap stock and identify a catalyst that it must represent good value we believe will lead to a re-rating. What we are trying to do is buy undervalued ›› Identify a catalyst – something that growth companies and find a catalyst. will change a company’s valuation When we sit in cash we do take short term eg positive earnings report or trading opportunities and if you look at management change or structural our performance over time, we’ve well and change in the industry – anything truly outperformed the market over the that will change that value quickly. last 18 years,” Mr Wilson said. Please note that this does not “As an investor my rule number one, two, constitute advice on individual three, four and five is: Don’t lose money.” investment strategies or suggested investments.
Disclaimer This advice is general advice only and has been prepared without taking account of your objectives, financial situation or needs; and because of that you should, before acting on the advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. Tony Michaels Director, Financial Planning
For more information contact Hood Sweeney’s Financial Planning Authorised Representative 259128 team on 1300 764 200. Hood Sweeney Securities Pty Ltd AFSL No. 220897
| 11 | Fennell Forestry Same, same but different: Fennell Forestry branches out.
| 12 | As a young school leaver, Wendy Fennell “Our industry hasn’t got a great image as far as what the job really involves but I really love it. To be able to work outside spent her gap year in the family forestry every day and work with million dollar pieces of equipment business in the South East and loved it and the latest technology — it’s a great career option but it is not seen that way.” so much, she never left. Considered by many to be a “traditional industry”, in fact modern day forestry is highly innovative, striving to find Yet the forestry industry’s image belies its high level of efficiencies through technological change and to use more innovation and technology and struggles to attract workers, of the product to extract greater value. particularly from the city. It’s this aspect that particularly drives Wendy’s brother Attracting a high quality workforce is the south east forestry Barry, co-owner and now executive director of business sector’s biggest challenge after losing many workers during development and innovation. the mining boom, Wendy says. Like Wendy, he too, joined the family business as it was Fresh from a presentation to former Holden workers looking expanding and has helped to drive it to become one of the to find a new job, she is passionate about the opportunities region’s most successful businesses, employing around 70 the region provides and the need to promote it better. people and expanding into new business lines. “We are trying to come up with different strategies to attract Established by their parents and uncle as G&R Logging in people to the region. We employ the person and train the 1991, the business has evolved from hauling softwoods under skills so it is about trying to find that person who is interested contract into transporting blue gums for the plantation owner in doing the shift work and operating the types of equipment. for export. “It is a great quality of life here – low cost of living and we have Wendy and Barry took over the business through a succession most services but the fact that a lot of medical and other plan designed with Hood Sweeney, and the company was services are still in the city does, I guess, put people off a little re-branded as Fennell Forestry in 2013, servicing two major bit,” Wendy says. clients with 24-hour operations.
| 13 | “We had a different risk appetite to our parents and we didn’t always looking for ways to do things better… and our forest want them to work hard and lose everything. We wanted them owners are always pushing for more innovation,” she says. to enjoy everything while they were well and fit. This commitment to continually finding new and better ways “Hood Sweeney suggested the succession plan … losing our of doing things is a deep-seated tradition within the business. uncle who finished work, got sick and didn’t get a chance to This extends to continually improving its internal management enjoy it was a driver for us but also we were very fortunate that structures and building relationships with staff and the Mum and Dad were keen to step aside. community. “They were very good at letting us move into the running The company sponsors a range of community events including of the business even before the succession plan was in place the annual Fennell Forestry Truck Pull to raise money for so the banks were comfortable with the change. I think the key children’s charities and it works hard to ensure employees are to our success was the fact that they stepped aside really well,” supported. Wendy says. “The responsibility of employing that many people does weigh The firm has continued to evolve and now has the Australian heavily, not only from a safety point of view but also ensuring import licence for lightweight flat pack trailers from Canada, that they have a job. which Barry sourced and had built locally in 2014, to underpin “We want to make people proud of working here and we a shift from blue gum log transport to chip transport. understand that people work to enjoy a great lifestyle so there “There wasn’t anything available in a stock standard way of has to be that balance…People can come and work hard but doing things so Barry investigated something better. We are they’ve got the ability to enjoy it.
| 14 | “We are not just employing that person; we are employing the “The thing with a family business is that you blend in and roll whole family. If we can give back and support the community it along and all of a sudden you are a big business and you need makes a greater lifestyle for everyone,” she says. to shift.” Somewhat unusually for a small business Wendy and Barry The team also has regular planning days with Hood Sweeney have prioritised jointly attending a business growth program to map out the strategic path, capitalising on the firm’s long at the University of South Australia in a bid to ensure that the standing relationship with the Company and its understanding management structures could support the business’s growth. of its issues. Whereas the pair had previously pitched in wherever necessary “It is important to be working on our business but is taking time to jointly manage the Company, they’ve now separated the out and being disciplined with it.” roles. Wendy has become the managing director of operations And the business is reaping the rewards, posting its most and Barry has assumed the role of executive director, business successful year in 25 years, says Wendy. development and innovation —playing to their strengths, says Wendy.
For more information about Hood Sweeney’s Accounting and Business Advisory services contact Hood Sweeney on 1300 764 200.
| 15 | Agribusiness Savvy SA agribusinesses add value and change the tune for food and wine production.
An iconic poem in which farmer Hanrahan Yet agribusiness, like other sectors, is being transformed by a global megatrend of consumer influence and success is linked regularly proclaims “we’ll all be rooned” to tailoring products to suit different market segments. at various points in the season has pretty Savvy producers have worked hard to value-add and to market much summed up the sentiment of premium products, reducing their vulnerability to international prices. agriculture for generations. Just as countries starting out in manufacturing tend to begin with labour intensive production techniques and relatively simple Buffeted by international prices and Mother Nature, the sector products. These eventually evolve to capital intensive production has the reputation of feast or famine. and more complex products, so is agribusiness evolving. Yet while the weather might remain a critical variable, increasingly Take for example Hood Sweeney client, Pangkarra, which has sophisticated production and marketing techniques are ironing supplemented wheat farm income with premium products such out some of the volatility. as wholegrain pasta and pre-packaged pulses. And in the wake of the mining boom, South Australia’s fortunes Brand is becoming increasingly important in products such as have been linked to a resurgent agribusiness sector, with many meat where product differentiation has historically been limited. citing our clean, green crops, wine and meat production as the Anecdotally, the paddock to plate story is increasingly appealing way of the future. to consumers who value biosecurity. In 2015-16, food, wine and forestry industries were South The biggest employers in SA agriculture are sheep, beef cattle, Australia’s largest export industry worth $21 billion per annum. grain farming, wine making, fruit and nut tree production, meat Food exports grew significantly in 2013-14, representing 35 per and meat products manufacturing. A 2015 Bank SA report noted cent of total merchandise exports. that the value of finished foods has increased significantly, driven Field crops earned $2 billion, livestock and dairy over $1.4 billion mainly by meat processing for export.2 and seafood and horticulture were worth $245 million and $225 South Australia produced the majority (54%) of Australia’s red 1 million respectively. Overseas wine exports were worth $1.2 billion. wine grapes in 2015 with 454,000 tonnes and new vine plantings Economists have pointed to South Australia’s competitive increased in 2015 for the first time in a decade.3 advantage in bulk foods, particularly with growing Asian markets which are expected to account for 71 per cent of growth in global food demand up to 2050.
2 Bank SA, Trend: Premium Food for Thought, Opportunities for South Australia in the Asian Dining Boom.
1 Primary Industry and Regions South Australia (PIRSA) Agriculture, Food and Wine in South Australia, 3 Australian Bureau of Statistics, 1329.0.55.002 – Vineyards Australia 2014-15 and Wine industry 2015-16 statistics – viticulture http://winetitles.com.au/statistics/viticulture.asp
| 16 | The state, with its broad acre cropping, meat production and wine sector, is “ Savvy producers have worked hard expected to benefit from demand for clean food produce, especially from the growing to value-add and to market premium global middle class. Pre-packaged food and products, reducing their vulnerability restaurant dining is expected to increase as incomes rise and time is scarce.4 to international prices.” Although well-positioned, the sector will need to overcome a range of challenges though, such as the need for capital (including connectivity) and an ageing workforce, with farm workers more than six times as likely to be over 65 than those in the general workforce.5 Now’s the time for strategic thinking, for extracting as much value as possible through the innovative use of production techniques and technology; for engaging with consumers to deliver what they want, and for marketing products effectively using sector specific channels. And that’s what many of Hood Sweeney’s clients are doing.
4 Bank SA, Trend: Premium Food for Thought, Opportunities for South Australia in the Asian Dining Boom.
5 Bank SA, Trend: Premium Food for Thought, Opportunities for South Australia in the Asian Dining Boom. Scott Young Jim Pinkney Director, Accounting & Business Advisory Associate, Accounting & Business Advisory Disclaimer This advice is general advice only and has been prepared without taking account of your objectives, financial situation or needs; and Representative of Hood Sweeney Representative of Hood Sweeney because of that you should, before acting on the advice, consider Accounting & Business Advisory Accounting & Business Advisory the appropriateness of the advice, having regard to your objectives, AFSL No. 485569 AFSL No. 485569 financial situation and needs.
| 17 | Performance coaching How not to go the way of the Dodo with technological change.
The internet has a habit of “cutting out the Take these examples, says Simon: Yet disintermediation doesn’t need to be middle man”, which is great for consumers the death knell for your business, he says. ›› Did you use a Lonely Planet guide but not so great for the obsolete link in Thinking like a software company can help to travel the world? Today most the supply chain. to put your business back in the box seat. travellers don’t leave home without Hood Sweeney consulting and Tripadvisor.com The first step towards thinking like a Performance Coaching Director, Simon software company is to identify your ›› Did you use a travel agent to book Starr, says in this environment businesses intellectual property, says Simon – your flights and accommodation? Today need to be clear about their particular distinctive know-how, a process, a way many people do it themselves via edge over competitors to ensure they stay of doing things. AirBNB, wotif.com, webjet.com or relevant in the market. expedia.com. Start by asking these four questions: Recent history is littered with examples Equally, Gumtree and Ebay have 1 What can I do brilliantly that I know of “disintermediation” or the process of superseded newspaper classified my competitors can’t? removing intermediaries in a supply chain. advertisements, digital channels such Companies are tending to use the internet 2 How easy is it for my target customers as itunes, Spotify or Netflix have largely to deal directly with customers rather than to discover this (do I actively promote it)? replaced CDs and DVDs. going through a distributor, wholesaler, 3 This thing/skill/ability I am brilliant at broker, or an agent. In the meantime traditional charities are now… will it still be valued by my losing revenue to direct fundraising target market in the future? through Facebook, Donorschoose.org or gofundme.com. 4 How can I use technology to codify my ‘knowhow’ in this situation?
| 18 | “It’s worth engaging a performance coach to help you identify the ways you can fine tune your competitive edge.”
Take Lego for example. It began as plastic “They are not only tools to improve existing bricks but evolved into movies, apps and processes; they are also instruments of games. collaboration. Similarly, personal trainer Michelle Bridges “Take cloud-based accounting software leveraged her expertise and moved from Xero and its ecosystem of applications personal training face to face to training which can enable businesses to thousands at once via her 12-week body coordinate with suppliers, staff, inventory, improvement programme on Facebook. point of sale, ecommerce, debtors in Competitor Kayla Itsines scaled up her real time. You can also use its customer business by developing a subscription- relationship management (CRM) plugins based fitness app for a bikini body which to connect directly to your current, target she also promotes via social media. and aspirational markets.” Technology platforms have amazing Hood Sweeney’s performance coaching abilities to scale your business, says Simon. team can help you to identify the ways you can fine tune your competitive
Disclaimer edge and explore the role that “scaling This advice is general advice only and has been prepared without taking account of your objectives, financial situation or needs; and and digitising” can play in your business because of that you should, before acting on the advice, consider performance. the appropriateness of the advice, having regard to your objectives, financial situation and needs.
For more information and an obligation-free first consult, contact Simon Starr on 1300 764 200. Simon Starr Director, Consulting & Performance Coaching
| 19 | Kings Creek Kings Creek Station tourist experiences: Conway Family dreaming becomes reality.
| 20 | Kings Creek Station with its luxury units built into the rocks overlooking the majestic country near Kings Canyon in the Northern Territory is living the dream; owner Ian Conway’s dream for an extraordinary combination of creature comfort and remote outback experiences.
“Well it’s my dream,” chuckles Ian. “But as Lyn [my wife] always says, ‘it’s my nightmare!.... I’m a bit of an ideas man… She tells me whether she thinks it will work.” With Lyn’s stamp of approval, the new jewel in the crown of Kings Creek Station enables visitors to drink in the eagle’s view of the valley. It’s a concept finally realised for the Conway family who have built up the station out of the red dirt over the past 35 years. Like many good ideas, it seems perfectly logical to find a blend of working station with camping and glamping facilities 36km from Kings Canyon. It’s the perfect mix of experiential tourism, catering for campers, “glampers” in safari-style tents and onsite units, providing a range of ways to experience the bush. Tourists can even be choppered into a remote, fully serviced camp site, to ride quad bikes along a magnificent valley with waterholes and big beautiful rock formations. Nestled into the rocks the new luxury units are equipped with air conditioning, showers, television and a swimming pool. An ancient cave — once accommodation for travelling Indigenous people and decorated with petroglyphs and artefacts — has been transformed into a common area with a deck overlooking spectacular night time views of the “dreamtime escarpment”. Yet, Ian admits it was not always so idyllic. Ian and Lyn arrived with the dream of a tourism operation and station in 1981 with two children aged four and two and not much else.
| 21 | “We always had a vision of tourism somewhere and Kings This provided the capital to buy an old Toyota LandCruiser Canyon has been an area I’ve always been interested in at auction as the station’s main piece of equipment – the cost because it is beautiful country. I’m of Indigenous descent. defrayed by selling off the doors and the roof. My white grandfather lived in a cave out near Kings Canyon “I drove home in this little open deck Toyota and that became in the early part of last century and he worked out of there our workhorse. I’ve still got it. It’s nearly 40 years old and it and my grandmother was an Aboriginal woman from is still going. Alice Springs,” Ian explains. “It hasn’t got a straight panel on it because I’ve been using it “We didn’t have any mod cons – we had no electricity, no water. in later years not only catching wild camels but catching wild We had to do it pretty tough.” bulls and brumbies and all that sort of stuff — that’s all been They lived under a tarpaulin strung between two trees and part of our revenue.“ eventually built a tin shed and turned that into a kitchen and “We started to put a camp ground in but we didn’t have any bathroom. The family slept under the verandah. machinery so I had to drag the whole area with a piece of “It was really hard yakka but the thing was: we were young, we railway iron behind my Toyota and I established the camp site had a dream and we were able to forego a lot of stuff,” Ian says. on the side of the road going to Kings Canyon. The project was a team effort – even the kids helped from The camel trade also funded the lease of some demountable the beginning, clearing an area for the Flying Doctor airstrip. buildings as camp ground facilities, including a shop which Ian stocked by regular trips to Alice Springs – a 10-hour round trip “Lyn was the teacher, the doctor, the assistant, the fencer, in those days. generator starter, cook – she did everything.” In time-honoured bush tradition, the Conways made the most Lyn went back into Alice Springs to generate income to of what they had, rationing power, re-purposing rubbish to supplement the station for a while. The tourism project got off productive use, confounding the Australian Taxation Office the ground when an American tourism operator approached (ATO) which struggled to believe that such an enterprise could Ian for a shipment of camels which he happened to be catching involve so little turnover. as a hobby. “They sent this Russian bloke who turned up in little tight shorts “It was the first lump sum we made and it was a starter for us.” which didn’t go down too well. We gave him a cup of tea in our tin shed we were living in and he said: Where do you live?
| 22 | “I said ‘we live here’ but you could see him thinking ‘he’s pulling They got rid of the shopping bag full of paperwork and even the wool over my eyes’. replaced the shed with a proper house at Matthew’s insistence. “I cannot speak more highly of Hood Sweeney – they are a Ian took him to his office —a little grass hut covered in shade fabulous, fabulous group of people… If I have any issues cloth with a trestle table and a couple of logs as seats. Papers with the business, I’ll call Hood Sweeney and they’ll organise were spread out on the sand, weighed down with big rocks. everything for me… They are more than accountants now – “He said: ‘Where are all the old papers?’ I said: ‘they are under they are friends.” those rocks there. He asked about recent papers and I showed Under the watchful eye of Hood Sweeney’s accounting team him a shopping bag full of papers. He said: ‘Is there any and daughter Megan who runs the books, the business has semblance of order to this? I said: Yeah the old ones are on become an equal blend of agriculture and tourism, promoting the bottom’.” experiential outback tourism. It took quite a bit of convincing that the Conways were fair The business created a foundation providing education for dinkum about their financial position, Ian says. Aboriginal people, putting a number of Aboriginal kids through “He’d come in and say: ‘what about the welder – I don’t see any high school. paperwork for that.’ But I had picked it up at a rubbish dump These days, the station is connected with satellite telephone – it wasn’t going; I picked it up and fixed it… that’s how the services and the internet which has transformed its operations. conversation went.” There’s even a plan in place to build a more stable team It was about that time that Hood Sweeney’s Matthew Fox swept of live-in workers, and strategies to boost the marketing into the picture at the suggestion of one of Ian’s friends, and via internet and social media. helped to transform the operation into a modern business. It’s still a 7-day a week commitment for Ian though; there’s always a road to be graded, a bore or a pipe to be fixed, always improvements to the buildings, painting or 256km of fencing to maintain. Yet for Ian and the family, it is a dream come true and one they are keen to share. “Tourists really appreciate that we are locals. They are really searching for bushman and the bush,” Ian says.
| 23 | Ingredients Barramundi 1 whole barramundi 1 knob butter Pako breadcrumbs, to coat the barramundi
Salad 1 green mango, shredded 2-3 shallots, finely sliced Handful coriander 1 spring onion, finely chopped Peanuts, roasted Handful mint Handful Vietnamese mint
Naam jim dressing 4 pieces garlic 4 fresh scud green chilli 4 pieces coriander root, cleaned 2 tablespoons fish sauce 2 teaspoons palm sugar syrup (white sugar) 1.5 tablespoons lime juice
Method Barramundi De-bone and butterfly the barramundi but if you’re not up for that, simply score the skin of the whole fish 3 times on each side. Rub the fish with butter then coat with breadcrumbs. Have the oil ready in the deep fryer, saucepan or wok.
Naam jim dressing In a mortar and pestle crush the garlic, chilli and coriander root into a paste. In a bowl mix the paste with the fish sauce, sugar and lime juice. Taste and adjust as needed - looking for a balance of sweet, salty and sour.
Salad Mix ingredients together in a bowl.
TO SERVE Fry your fish until golden - 10-12 minutes, depending on the size of the fish. Once ready, let is drain on paper towel. Place your whole fish on a plate, mix salad with the naam jim dressing and place on top of the fish. Serve with rice. Thai food is all about balance of sweet, salty and sour. When green mango is out of season you can use green apple, but you will have to up the sour element in the dressing (lime) and reduce the sweet (sugar).
| 24 | Barramundi with naam jim dressing
| 25 | Food, Wine and Hospitality Food Sector – Real opportunity or just a dream?
| 26 | Small to medium enterprises with aspirations beyond the State boundaries are going to be more successful and contribute more to the State.
You probably know the stats. It essentially comes down to being So can South Australia capitalise on the strategic. To have some clear aspirations Food Sector opportunity or will it just Agriculture, food, wine and forestry and goals, know which markets to be a dream? are South Australia’s largest export target, being very clear on how to industries. Food and beverage product Yes it can. create a differentiated value proposition manufacturing in South Australia and then to invest in the right things It will require the large body of small accounts for more than 25% of the total that delivers value to the customer. to medium enterprises to invest in their manufacturing workforce in the State. It is important to have the capacity capabilities to succeed. Brand Australia Australia can meet less than 1% of Asia’s to invest and perhaps even more alone cannot drive success. South food demand after meeting its own important to have an investment Australia’s reputation for quality food is food requirements and China and Hong mindset. Investment is often thought important, however small to medium Kong are the largest export destinations of as infrastructure investment that enterprises must position themselves for today. brings efficiency and lowers costs of success on the global stage. To innovate So everything looks rosy? production. Or sometimes the essentials in ways they have not in the past. To to produce the product. However, the collaborate with others to create scale Well maybe not. critical investment is in knowledge, and competitive advantage. To raise It is true that we have some natural people, brand, innovation, product their sights and commit to the growth competitive advantages including land, development and supply chains markets of Asia. biosecurity, technology, education, that targets the chosen markets in innovation and proximity to export the way we want to compete. These markets. However, there are some investments are often not considered. significant disadvantages including Smaller enterprises generally tend not the high cost of labour, an ageing farm to invest in these areas but rather the workforce and regulatory burdens, more tangible asset based production to name a few. requirements. This is where strategic Also, the best performing farms and advice is critical. businesses are the larger ones, yet the There is a “two speed economy” forming South Australian economy is dominated in South Australia. The successful by small to medium enterprises. Why enterprises that have invested in do the larger enterprises generally do strategically growing their businesses better? and those that have not. Noticeably in South Australia, enterprises that market their products outside of South Australia are generally doing better than those only selling their products within South Australia. This has wide reaching implications for the economy, the enterprises in question and for the State’s ability to capitalise on the global opportunities. Small to medium enterprises with aspirations beyond the State boundaries are going to be more successful and contribute more to the State.
Rob DiMonte Chairman | 27 | Hospitality Passion and business sense: key ingredients for success in the hospitality sector.
‘Build it and they will come’ was an idea Yet it is not a strategy for the Adelaide hospitality sector in 2017, says Hood Sweeney’s Food and Wine sector lead Priya Chadha. that worked in the 1980s movie Field “You definitely need to have passion for the industry because there of Dreams when an Iowa corn farmer are such long hours, a lot of late nights away from your family. (Kevin Costner) was mysteriously called But it’s not just about passion — it’s about having good business sense and understanding your market before deciding your to build a baseball field on his farm. food model. Getting the right advice about how to set up your business effectively, how to monitor its progress and how best to turn a profit is critical to success — even if you are a great chef or bartender, she says.
| 28 | “ Setting up the structure from the beginning is a key part of the advice.”
Even very well-known restaurants can risk It really does pay to get advice early Focusing on the marketing side — sliding into the red if they care more for about the right business structure for particularly social media —from the the vision than the bottom line and, once your situation, says Priya — particularly beginning is also imperative, particularly in debt, it’s difficult to get past playing if you are planning to enter business in this day and age of consumer power ‘catch up’. with associates. and the instant review. Having a fabulous fine food restaurant Those who have been in the hospitality “It’s about developing a brand and finding with top notch service might be your business for a while and looking to the right food costings and food model,” dream but you also need to keep your diversify, are increasingly looking to build Priya says. target market in mind and understand a consortium of around 4-5 parties to “The main thing is that if you are interested what will keep regulars coming through spread the costs around, she says. in this industry, get advice up front your door. “Setting up the structure from the because it is a hard industry – you have “People are not going out to dinner as beginning is a key part of the advice. We to be passionate about it and get the right much in the current climate. People are talk about the different structures people advice and structure but if you don’t do doing more coffees and dessert bars and might use – whether it is a partnership, the business well, it’s just going to fail… things like that,” Priya says. a company or a trust – depending on “If you get the advice, you are getting their personal circumstances … one size For pubs and clubs, particularly in the city, exposed to things like Government grants doesn’t fit all. You have to look at assets it’s important to continually re-invigorate for start-ups that you may not know about behind the scenes, whether they are your business. but your accountant will know.” involved in other businesses.” “The pubs and clubs sector is very much “You’ve got the passion – but it’s about “One of the things we are really telling our affected by pop ups, pubs in particular. executing your idea,” Priya says. clients at the moment is that if you are If they don’t have pokie machines, they setting up with a company or partnership, are getting slammed by all the pop ups make sure you have a shareholder or who don’t have the same type of costs. partnership agreement in place because “In the suburbs if pubs have pokies and if things do go sour you want a good local clientele, they’ll always do well but exit clause — you want to have a good in the city, you need to be new and shiny valuation of the business to be able because that’s what people like.” to buy out. “ In helping clients in the formative And while it has never been easier to stages of their hospitality business, manage the business information and Hood Sweeney can make a significant coordinate different parts of the business difference in their profitability. with new technology such as cloud-based With extensive experience in the food and applications, Xero and point of sale (POS) systems, many need advice about how to wine sector, Hood Sweeney has recently use them to improve their bottom line. developed an industry focus, addressing the particular issues those working in the “Getting loans for businesses is a lot harder sector face including financing setups, than it was 5-10 years ago. These days you POS systems, liquor licensing, and business can get a loan but you really do need a structure. personal guarantee and you have to have assets behind you,” Priya says.
Disclaimer This advice is general advice only and has been prepared without taking account of your objectives, financial situation or needs; and because of that you should, before acting on the advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. Priya Chadha Associate Director Accounting & Business Advisory
For advice about how to execute your bright business idea contact Representative of Hood Sweeney Priya Chadha on 1300 764 200. Accounting & Business Advisory AFSL No. 485569
| 29 | SA Wine Sector SA wine sector improving with age — and strong management.
Quality, not quantity, is the mantra This is despite the government watering propelling South Australian wine down the original plan to reduce the businesses up the food chain and it is the $500,000, to $350,000 from July 1, 2017 and way of the future, says Hood Sweeney’s $290,000 from July 1 2018. Instead, the director of accounting and business rebate will be cut to $350,000 from 1 July advisory, Adam Wright. 2018 where it will remain. As a specialist advisor to the wine sector, The government had also planned to Adam says while the sector has had some introduce a requirement for recipients casualties with lower grape prices over the to own a winery which could have past 10 years, the overall result has been dramatically increased the value of positive for the sector. wineries. This has since been revised to the following measures. Large wineries have been divesting vineyards over the past 10-15 years and From 1 July 2018, the rebate will only apply grape prices have been driven lower due to packaged, branded wine. To be eligible, to the oversupply of grapes, so producers a wine producer must own at least 85 per have had to be clever in managing costs cent of the grapes used to make the wine and in finding ways to build consumer throughout the winemaking process— loyalty. from crusher through to final packaged product. In the past becoming a winemaker or vigneron was a cherished tree-change The wine producer must sell wine dream for many professionals seeking to packaged in a container not exceeding take advantage of tax concessions, but five litres (or 51 litres for cider and the sector has become more competitive. perry) and it must be branded with a registered trademark for domestic retail Impending changes to the Federal sale. Common law trademarks would be Government’s Wine Equalisation Tax (WET) allowed where the producer is not legally rebate to take effect in 2018 are likely to able to register their trademark. produce further industry consolidation, says Adam.
Adam Wright Director, Accounting & Business Advisory For more information about how the WET rebate changes may Representative of Hood Sweeney affect your business or how to improve your business performance, Accounting & Business Advisory contact Adam Wright on 1300 764 200. AFSL No. 485569
| 30 | The new eligibility criteria will apply to all “At the end of the day, successful Clever smaller “boutique” players are wine from the 2018 vintage, irrespective operations manage their business very thriving, particularly those offering of when the rebate is claimed. well and they don’t carry too much a food and wine experience such as stock and they focus on which stock a “meet the maker dinner” or a chance “The reduction in the rebate just comes lines to keep or to move. The wine to vicariously live the country lifestyle – straight off the bottom line which will industry is extremely capital intensive even if only for an afternoon at the cellar have a big impact particularly on some when you consider that a bottle of red door. of the smaller players,” Adam says. potentially is released two years after the Smaller players are also increasingly In this environment, producers might grapes were picked. The grape grower using social media to connect directly need to re-evaluate their business has been paid and so you have to hold with their customers and to tailor their model. it in barrels for two years before you get offerings. a dollar,” he says. With grape prices finally improving “There’s definitely been a shift in focus and demand growing through Asia, In this environment it is essential to work by the growers to restrict quantity and there will still be opportunities for closely with a business advisor to use grow for quality,” says Adam. well-run wine businesses to thrive, the available data to improve business particularly those that use integrated processes and decision-making. “There is a lot more focus now on cellar cloud technology to improve sales door, not only just to produce a quality “Now with real time data we are able and efficiency. product but in marketing an experience to go out to a winery more regularly to the consumer. “They all need to run a very lean business to discuss last month or last quarter’s and watch everything. Cloud and the results. We are also able to advise on “It is only one thing to produce an technology systems available now the information flow through the whole excellent product in the bottle but it’s mean they are able to use real time data business. probably about the same amount of to guide the business,” Adam says. effort again to get it out into the market “If a deal comes across your desk such and get it sold.” There may also be opportunities for as someone wanting 10,000 cases — at some regional businesses to obtain a least you know exactly how much it is There will be opportunities for smaller $100,000 recurrent grant designed to going to cost you and what profit you players in the sector but it will certainly foster cellar door experiential tourism — are going to make. Then you can make pay to have good advice, to start although it pays to read the fine print as the call on the opportunity cost of not planning early for the reduction in many of such grants are taxable. having that stock to sell later or whether the WET rebate and to use the right you are best to realise the stock into management systems to ensure you cash and get it back into cash flow.” are constantly improving, he says.
Disclaimer This advice is general advice only and has been prepared without taking account of your objectives, financial situation or needs; and because of that you should, before acting on the advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs.
| 31 | Meet the Hood Sweeney Contributors
Chris Stewart Priya Chadha Managing Director Associate Director, Accounting & Business Advisory [email protected] [email protected] Representative of Hood Sweeney Accounting & Business Advisory AFSL 485569
Dion Carbone Tony Michaels Manager, Accounting & Business Advisory Director, Financial Planning [email protected] [email protected] Representative of Hood Sweeney Authorised Representative No. 259128 Accounting & Business Advisory AFSL 485569 Hood Sweeney Securities Pty Ltd AFSL 220897
David Block Simon Starr Manager, Accounting & Business Advisory Director, Consulting & Performance Coaching [email protected] [email protected] Representative of Hood Sweeney Accounting & Business Advisory AFSL 485569
Rob DiMonte Adam Wright Chairman Director, Accounting & Business Advisory [email protected] Representative of Hood Sweeney Accounting & Business Advisory AFSL 485569
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