[MUSIC] >> Hi, everyone. Thank you so much for joining me here today for Ignite 2020. I’m excited to talk to you about the future of work. I want to start by reflecting on 2020, and where we are today. We’re living through a once in a generation shift when, where, and how we work is fundamentally changing. In fact, I think we’re experiencing a year of digital transformation every month. This acceleration in my mind, marks the end of the post-industrial age. We’re entering a new era of the digitization of everything. Today, I’ll share some of the trends that are shaping the future of work and the framework for success that we’ve developed for every leader in organization to succeed amid so much change and disruption.
But before we look ahead, I think it’s also helpful to reflect on where we’ve been. Throughout history, people and their ideas have propelled society forward. We’ve definitely seen it in this moment with the global pandemic. Everywhere I look, I see amazing examples of people rising to the occasion during COVID. Let’s hear from the team at Suffolk Construction about their transformation during COVID-19. >> At Suffolk, we’re trying to redefine what is possible in the construction industry. We innovate and we happen to be master builders. We’re always pushing the limits of construction. >> Suffolk’s response to the pandemic overnight really settled around the use of Microsoft Teams. >> We’re able to communicate on a completely different level than we were before and solve problems in real time.
>> Once people realize they can be anywhere to have their meetings while working with the folks that were still on their job sites and be on video and interact and collaborate on files together, it completely changed the game. >> I think what excites me about the future is that in Teams, someone is telling me about another new innovation that is going to completely change the way that we do work. [MUSIC] >> As I talk to IT leaders and customers every day. It’s clear that the way we’re working today presents real risks and challenges. At Microsoft, we see ourselves as students of this new world of work. Now we have a unique vantage point from which to observe emerging durable trends. First, we have our own Microsoft telemetry and first-party research. Second, commission research from partners including people like Harvard and Stanford University’s, and third, the daily conversations that we have with customers, they keep our finger on the pulse of what’s changing.
Let’s take a look at what we’re learning. [MUSIC] >> Since the world shifted to remote work, research shows there are some bright spots. People cite flexibility and greater empathy for team members, 62 percent of people surveyed said they feel more empathetic toward colleagues. Now that we can all see into each other’s lives at home. On the other hand, there are concerning trends. We’re eroding the social capital built over decades over water coolers and in hallways, leading to loss of connection and feelings of isolation. People are working longer hours, leaving them feeling depleted. With the biggest increases in Teams usage outside the typical 9:00-05:00 work day and on weekends, work day length increased 17 percent in Japan, 25 percent in the US, and 45 percent in Australia. One-third of remote workers say the lack of separation between work and life is negatively impacting their well-being. More than 30 percent of information workers and first-line workers see the pandemic has somewhat or significantly increased their sense of burnout, but 70 percent of people also indicate that meditation could help decrease work-related stress. It’s clear that people want to do great work.
The big question, how can technology help? >> From this shift to remote work is that we can trust people to do their best even when no one is watching. At this moment, I feel like over the last few months, leaders have gone from worrying about whether or not people will be productive, to worrying about whether people are working in sustainable ways.
As one Fortune 50 CEO commented in a recent meeting, what keeps me up at night right now isn’t supply chain logistics or sales, it’s the well-being of my workforce. Our company lives and dies by them. You see productivity can’t just be about short-term employee output. Machines don’t create value, people do, and you can’t treat people like machines. Up to this point, technology has been focused on efficiency, and I think that’s a fallacy. A sustainable productivity for people isn’t just about efficiency. People need cycles of performance and they need cycles of recovery.
The world’s best athletes have known this for a very long time. This moment right now, and our future is all about getting the best of human ingenuity. It’s about getting the best out of our most important assets, our people. So we need technology to help us perform at our best at all times. So in this new digital age, how can technology amplify human ingenuity while balancing the needs of people? At Microsoft, that is our mission to empower every person and every organization on the planet to achieve more.
As we’ve studied how work is changing, we’ve developed seven keys to success for every business and IT leader to empower people for this new world of work with the tools to deliver human ingenuity at scale. There’s so much richness in all of these. Today. We’re going to focus on two of them, teamwork and well-being. Underpinning this framework is technology that we believe is crucial to powering the future of work. It’s the Microsoft Graph. It underlies everything we do in Microsoft 365. In a highly distributed digital everything world rich with data, you have to be able to see and read the signals. Armed with this signal, you can do amazing things, but not capturing it means you miss out on how to help people work in sustainable ways, to be innovative, and to create new value. Think about it. Every day the people in your organization are generating enormous amounts of signal and data. With a Graph, there’s a value exchange to create on both sides of the equation for the individuals and the broader organization.
For individuals, the Graph captures and processes massive amounts of signal each day. The more you use the Graph, the more it knows about your preferences and intent and the smarter it gets, and the more you can put it to work for you. The Graph delivers personalized assistance, right within the flow of work, it analyses data, surfaces insights, and suggests actions. The Graph uses AI to augment and expand what people can uniquely do, not replace them. But the real power of the Graph is what you can then do with this signal in aggregate, in combination with your functional data across HR, sales, finance, operations, customer support, all your processes, all your people data.
Imagine for example, if you could understand how teams of people are spending their time, imagine if you could understand what distinguishes top performers. For example, learning top salespeople consistently spend 40 percent more time with customers, can help you improve overall performance. The Microsoft Graph is a powerful ally in a digital everything world. Over time it becomes your Graph, helping to create net new value for the entire organization. Microsoft 365 is the integrated suite of Graph connected productivity apps and experiences. It powers the familiar apps people rely on every day to connect, collaborate, and get work done. Microsoft Teams, Outlook, Office and the Edge browser. We’ve architected Microsoft 365 to empower people to be productive on any platform and any device. The pandemic has made the PC more essential than ever, as more than one billion users rely on Windows 10 to be productive from anywhere across work, school, and life. For more on this, you can check out Brad Anderson and Panos Panay session on how we’re innovating for customers with Windows 10 and Surface across small screens, large screens, and everything in between. Microsoft Edge offers the highest rated protection against malware and phishing. Usage of our Office apps is up across Word, Outlook, PowerPoint, Excel and more, highlighting their critical role in helping people be productive every day.
More broadly, Microsoft 365 is a part of our differentiated approach to the Cloud. Microsoft’s comprehensive portfolio of infrastructure and applications across Azure, GitHub, Dynamics 365 and Power Platform, LinkedIn, and Microsoft 365, all powered by the Microsoft Graph, offers unparallel integration, architectural coherence, and extensibility. What’s more, it’s all built on a secure, trusted foundation with privacy and compliance by design, including leading GDPR compliance. With this in everything we do at Microsoft, we are governed by the belief that you control your data and you decide how to use it. Now, let’s return to those keys for success that guide our innovation investments in Microsoft 365 and in Teams. Let’s start with re-imagining teamwork. In a digital everything world, rebuilding social capital to help people feel connected, engaged, and a part of the company culture is absolutely critical. Staying connected is about much more than just video meetings. Work happens before, during, and after a meeting, and Microsoft Teams is the platform for work. Teams is so much more than any single app where you can chat or meet. It’s a rich platform for all the ways people in teams need to work and move work forward.
It’s the only solution that combines meetings, call and chat, content collaboration with the power of Office and business process automation, all in a secure, integrated user experience. As companies move all their work online, they increasingly want one unified platform for meetings all the way to phone system, and Teams offers exactly that. Everything that happens during a Teams meeting as an example, the discussion, chat decisions, content, it’s all preserved and easy to access. So any team member can revisit it, take action, and move the work forward. But Teams doesn’t just connect people inside your organization. It also connects your people to your customers through video meetings, webinars, remote selling, supply chain, and other scenarios. So you can connect from anywhere, both internally and with external partners and customers.
Today we’re debuting new video meeting experiences in Teams, along with reimagined workspaces that treat every collaborator remote, in-person, or even on the go as a first-class citizen. I’ll now turn it over to Aya on my team to show you what these innovations look like in action. >> Thanks, Jared. Today I’m going to show you some exciting innovations designed to help facilitate teamwork for the hybrid workplace to make every worker feel a part of the team, whether they’re working remotely or in the office. The Surface Hub is an incredible device designed for meetings and collaboration in shared spaces. Earlier this month, we announced Windows 10 Pro and Enterprise on Surface Hub 2, creating a uniquely personal and productive computing experience. This lets me have a Surface Hub in my personal office and have a similar experience to what I would have on my PC. Now, I can easily sign in using my fingerprint, and now, I can enjoy all my favorite apps that I would use every day on my PC.
Let’s jump right into Microsoft Teams and get started with meetings. Teams is perfect for video meetings. I love that I can now see up to 49 people in one view. I’m sure many of you miss the in-person meetings with colleagues. I know, I do. This summer we announced a new meeting experience called Together Mode, which brings you and your team all in one shared virtual space. Now, with a single-click, it’s like we’re all sitting together in what looks like an auditorium. Now, we’re not separated by any grid lines, are without any distracting backgrounds.
>> It’s so much fun to feel like we’re altogether. We can even high five and engage with each other a bit more naturally in conversation. >> Having us together to share background actually helps us concentrate more easily. >> I find I can remember more of what was said in meetings, and I’m less tired at the end of the day. >> Together Mode helps make meetings more immersive and create a stronger human connection. We also introduced a dynamic view that adjusts the screen to prioritize what’s most important. Here, a colleague is presenting content, and I can easily pin, let’s say, the presenter or a key decision-maker or an interpreter, so I can actually see their reactions. Now, when you’re focused during a meeting and don’t have a chat window open, it’s easy to miss side conversations. But now, our new chat bubbles help me stay informed. Now, many businesses have started to implement hybrid work environments. I’d like to show you what we’re doing in Teams to help improve teamwork at the office.
I’m here in the conference room with my colleagues Alley and Alex. This conference room is configured with a Microsoft Teams Room and our newest member of the Surface family, the Microsoft Surface Hub 2S 85-inch. Now, we’re just about to get started in a meeting to discuss the addition of a production line on the manufacturing floor. Cortana, join my meeting. You’ll notice I didn’t need to touch any device to join the meeting.
With the new coordinated meetings experience with Microsoft Teams Rooms and Surface Hub, these two connected devices work together to seamlessly power a modern collaborative meeting experience. With Microsoft Teams Rooms handling the audio and video, the front of room display shows the meeting participants, while the Surface Hub automatically launches a shared digital whiteboard for brainstorming. Our latest innovation is a new category of intelligence speakers from Microsoft Teams Rooms that brings speaker attributed transcription for participants in the meeting room. This will help meetings be more inclusive for both remote and in room attendees. This also enables attendees to spend less time note-taking and easily follow along with who said what in the room. >> If we install a new line, it might actually roughly double our output. >> I think you’re right. Aya, could you bring up the photo from the last brainstorm? >> Great idea.
Now, all remote participants will see the speaker’s names appear next to the live transcription, which is accessible to all attendees during and after the meeting. The Surface Hub is certified for Teams and runs the Windows 10 app, which is optimized for meeting room experiences. As Alex suggested, let me go ahead and paste in our whiteboard photo from last session. Now, with this magic wand, I can easily convert this image into ink, which uses AI to clean up the background and extract the ink. Now, I can easily move things around. Let me go ahead and move this line a little bit lower, and now, I can add the additional third line.
Great. Now, this inking experience is magical, and the remote attendees can also interact digitally from their personal devices. Now, one of my colleagues on this call is in transit waiting for the bus. He’s using the brand new Surface Duo, which is a foldable dual screen mobile device that features the best of Microsoft 365 and can run every Android app in the Google Play Store. Now, the Surface Duo not only helps Jason focus on the meeting, but he can simultaneously stay productive on the other screen. Hey, Jason. >> Hey, Aya. >> Do you have the dimensions for the additional line? >> I sure do.
I’m going to put them right on the whiteboard here for you. >> He can use the Surface Slim Pen to ink directly on the whiteboard while maintaining full view of the meeting. >> There you go. >> Great. To wrap up the meeting, I can use the voice assistance for a touchless experience. Cortana, end my meeting. Now, all the devices in the room have disconnected from the meeting, and the content has been wiped from the Surface Hub, preparing it for its next session.
Whether you’re working from home, in the classroom or back in the office, Microsoft 365 and Teams helps you stay connected and collaborate more effectively. >> Thanks, Aya. Let’s move on to well-being. If this moment has taught us anything, it’s this. We can no longer measure human productivity by efficiency alone. If we just keep building tools to make people more and more efficient, they will inevitably burn out. I feel that, I bet we all feel that. Instead, we need to think about how we empower human ingenuity.
The same ingenuity that creates value for the organization and that only humans possess. We do that by prioritizing individual well-being. One proven way to prioritize well-being is meditation. The fantastic meditation app Headspace did a survey and found that 70 percent of all people think meditating could help them decrease their work-related stress. Today, we’re so excited to announce a new integration that brings Headspace right into Microsoft Teams. Now, I’m going to show you what that looks like in a moment. But first, I want to introduce Headspace’s co-founder and our new partner, Andy Puddicombe, one of the world’s top meditation experts.
Andy, thank you so much for taking the time to meet with me again. It’s just such a pleasure to have you here with us, and to be able to have a conversation with you that we can share. >> It’s a pleasure. Thanks for having me along. >> Meditation is something that you’ve been teaching around the world. Have you always made space for meditation within your work day? >> Yeah. I guess there’s two parts to that job. For many years as a Buddhist monk, meditation was my work, so I always make time. Since leaving then 15 years ago or so, and certainly since starting a company, meditation is being an essential part of my work day. Sometimes it’s in the morning, sometimes it’s at work, sometimes it’s in the evening. >> Because I have been researching and understanding the field. There’s this way that meditation can help with resilience and with work-related stress. Can you just tell us a little bit more about that? >> Stress in itself isn’t a bad thing.
It’s really important to say that. It’s when it happens so often and it happens for long enough that it begins to overwhelm us. Then it becomes harmful. Meditation shows us how to step out of that thinking mind. The way I think about it is more in terms of what can we do on a regular basis so that we are ready and prepared for when difficult, stressful, and challenging situations arise both at work and at home, so we actually, feel ready for that, and we’re not thrown off course or easily overwhelmed by it? >> I’m seeing a lot of stress come from the fact that there aren’t any boundaries. How does meditation help with that? >> How we live our life at work has a direct impact on how we relate to our environment and our immediate family, colleagues, housemates, whatever it might be around us. I do think scheduling becomes really, really important, so you don’t feel burned out, and it doesn’t feel the entirety of our world has come together all at the same time.
>> Wonderful. I think about the moment that we’re in right now, I think about resilience, I think about care and compassion. We have never needed it more. Andy Puddicombe, thank you so much. We’re so excited to have you as a new partner. We’d be working together with you, the co-founder of Headspace, here with us today. Thank you very much. >> Pleasure. Thanks, Jared. >> Today we’re announcing that Insights, powered by MyAnalytics and Workplace Analytics, is also coming to Teams. Insights helps individuals, managers, and leaders prioritize well-being and increase overall productivity. Let’s take a look. I’ll start by showing you the new personal Insights designed to help people be their best and most productive selves. A virtual commute will add structure to the remote workday, carving out time to mindfully disconnect in the evening.
This will make it seamless to close out the day’s tasks or to add them to a to-do list. Emotional check-ins help people pause and reflect on how the day went and observe emotional patterns over time. Then, there’s that new integration with Headspace that Andy and I talked about. These new exciting experiences are coming in 2021. Starting in October 2020 next month, you’ll begin to see personal Insights in Teams designed to help strengthen relationships and protect time for focus work with the briefing e-mail from Cortana and Outlook. Starting in October, we’ll be bringing new Insights for managers and leaders in the Teams. Let’s start by taking a look at Manager Insights. The well-being of their teams is top of mind for managers who can often operate like a life preserver when employees are grappling with disruption and change. Powered by Workplace Analytics, new Insights for managers help them protect individual well-being and position their people to stay productive.
Supporting research and thought leadership provide additional insights on the impact of very specific work habits and behaviors, along with tips and suggestions for ways to improve management skill. Metrics for other teams of similar size and function also help to contextualize team data, and links to best practices can help managers address challenge areas. Insight into the factors that impact the day-to-day experience of their teams helps managers create a culture that enables people to do their best work while prioritizing individual well-being. Now, let’s move on to Insights for leaders. Business leaders need visibility and what’s happening with people across their organizations. New Workplace Analytics Insights in Teams show data on team cohesion and stress and disruption, along with recommendations to help strengthen social ties. Other factors like elevated levels of after hours work can lead to employee burnout, which in turn reduces productivity and increases attrition risk. Seeing where there’s risks and getting insight into other factors that impact employee engagement and productivity levels helps leaders know where they can take steps to protect employee well-being.
Leaders can also see where a process change can improve the way work happens. We are so thrilled to bring these new well-being innovations to you, and there’s so much more on the way. That’s all I have for you today. I’m so excited to work alongside you as we reimagine the future of work together. [MUSIC].
Every company is a software company. You have to start thinking and operating like a digital company. It’s no longer just about procuring one solution and deploying one. It’s not about one simple software solution. It’s really you yourself thinking of your own future as a digital company.
Satya Nadella, CEO
Transform your manufacturing from top floor to shop floor—delivering improved customer outcomes with product-as-a-service.
Vit Muller: Hello everybody. My guest today is a former owner of multiple retail and hospitality businesses. Founder of integrated workforce solutions as well as a number of six and seven figure startups. He is a number one bestselling author in the business category, professional speaker, coach, and small business expert. He is an award winning businessman and entrepreneur. And he was named the business person of the year and has owned more than a dozen multi award winning six and seven figure businesses across multiple industries, including retail, hospitality, technology, entertainment and education. He’s a founder of Australia’s largest cloud based rostering and payroll provider IWS, as well as the founder and CEO of Australia’s fastest growing business, community Bx Networking, please. Welcome to the show. Matt Al Matt Alderton: Awesome. Thank you Vit. Great to be here. Vit Muller: Thanks Matt. Glad to have you on the show today, Matt, tell me you’ve done so many things. In a fairly short timeframe. Where do you get your drive from? Matt Alderton: Well, it depends on the perspective of how short it is, I guess, but I’ll take it as a short time Vit Muller: frame.
I didn’t want to ask you how old are you guys? So I guess, Matt Alderton: yes. Well, uh, I’m, I’m, I’m probably older than I look. Uh, and I’ve done a fair bit and probably the past couple of decades, but, uh, um, fitting it all in is, is, is probably one of the, uh, questions I get asked more than anything else. And I know that it’s, it comes down to what your focus on and, what you give energy and what you give the most energy to get the most out of. Um, but, uh, yeah, look, I’ve, I’ve done a fair bit over the past decade or so from retail and hospitality to take businesses and training education businesses.
And I find myself here. Um, in, um, what are we in 2020 looking at, uh, you know, the fastest growing networking organization in Australia and now New Zealand, which is pretty exciting and a space that I love working and that small business. Uh, and it’s a place that I know that, uh, you enjoy spending a bit of time as well, Vit. Vit Muller: Absolutely. Absolutely. Now, where do you start with all this? I was looking at your LinkedIn profile and, uh, one thing that I saw at the beginning of your story, it is a, there’s a bit of commonality, or you are, you’re like a movie, uh, you know, a fan or you do like movies, videos, or what’s the story there.
Cause I’ll show that you were working at a, in a video store. Matt Alderton: I am actually a big, a big movie buff. I love my movies and I love film. Um, and, uh, you know, pretty much everything about it. Uh, ironically, and I dunno if this was coincidence in auto or whatever, but some of my father owned a video store back in the eighties. And, um, he, when he first started, he had beta and VHS in the shop and soon move to just the VHS format.
And owned that for probably five or six years and got out just before they all made tons of money. And, um, so he, um, I think he sold it in 1988. Would you believe? But, uh, then, uh, in the year 2000 I was working, I was at university, um, and I, I found a job working in a video shop. As a manager store manager. So I started there kind of in like employment status. Like if you forget the fact that, you know, probably worked lots of shifts as a young bloke, um, with, you know, slave child labor for my parents. All for love as we do in family businesses. but, um, yeah, I worked in the video industry for a couple of years there. As a store manager. And then I, when I actually left there after a couple of years, but I came back to work for that organization.
They owned about 50 video shops around Sydney and new South Wales. And I, uh, was an area manager, then an operations manager, then GM for that company over a number of years. And that’s probably where my passion and love of movies really. Got embedded. I loved, I loved it for a long time. I’ve enjoyed movies and film and the whole genre, but, um, that really solidified it for me. And then I ended up earning a couple of shops, uh, in, um, in the 2000. So I think I. Bought my first one in 2007. And my second one I bought in 2010, um, which is at the end of the, uh, the value proposition for earnings, if you own them. Yeah. If you own them in the nineties and the end, the early two thousands, you made a good chunk of coin out of it. Um, my father owned it in the eighties just before it, and I owned it in the, uh, the, um, two thousands just after they made lots of money.
Uh, but in saying that. I learned a lot through running a lot of businesses that had those video shops. And I learned a lot about how to run a good video shop. So we managed to do really well in the shops that we had. Um, and, uh, I still owned it up until 2019. So one year ago I still owned a video shop. Can you believe I sold it in January of, uh, or the end of January, 2019. Sold it, by the way, just putting that out. Vit Muller: Somebody still bought it. Matt Alderton: Yeah. Yeah.
Um, probably more so for the retail space than for the video shop itself, Vit Muller: right? Yeah. I was going to say Matt Alderton: I’m pretty happy to have to actually sold a via store. I think I’m the last person in the world of sold one, but, uh, yeah, good times a great industry. Great. Like just such an enjoyable industry. And I’ve had lots of different businesses, subway stores, cafes, um, all sorts of tech and stuff like that.
But I love the video shots more than anything else is now the business where you get a new product like that every week. And it’s an exciting product. And it’s got, you know, Nicole Kidman on the front cover or Leonardo DiCaprio or someone like that. It’s a lots of fun. It’s a great industry. Vit Muller: I’m missing that. You know, I still remember when I was a kid like going into a video store, that was, there was something about it.
Like. You know, walking around the shelves and picking up physical cover of a DVD or VHS, even a movie and, you know, reading the back over there was something, you know, the smell of smell the VHS, it was, it was a bit of a magic to it. And, um, it feels like it’s. It’s Matt Alderton: not there anymore. No. Well, you just don’t get that on Netflix do you ? You can’t browse that wall and I remember, but people used to walk up and down the wall and they’d have a couple in their hand and they’d be choosing between a few. It’s just not like that anymore. Actually. It’s like that at my house because I have quite a few DVDs, a couple of thousand DVDs. I’ve got it in my house, in my personal collection. Um, so you can still browse on your release wallet. Well, they probably not many new releases in there now, but you can browse the DVD wall. Um, but it was lots of fun, but you know what it taught me, I think out of all my lessons from being in that industry.
And I think it was my favorite because it was. Uh, an industry where a business, where people came to enjoy themselves, they were on a Friday night or a set I not, and they’re thinking about spending time with the family and having fun and enjoying themselves and chilling out. And there’s a mood that’s associated with that as opposed to many other businesses that has a real, so if you can capture that, like there’s a real energy there. Um, but I know the thing that really sticks with me. From the video shop, is that during the, like the, probably the nineties is when they made so much money. Like the average video store is probably making, you know, 20, 25 grand a week. The wages were about, um, anywhere from sort of 15 to 20% of the turnover, the cost of goods were about 25% of the turnover.
They had low rents, uh, considering, uh, you know, in the time of, in a decade or in rents, you know, hadn’t grown to what they have these days. And, uh, And all the rest of the costs were very low. And so to think, to have a wages cost of about 15% and, uh, and a cost of goods sold about 25%, um, you know, you still live with more than half your turnover after that. Um, you know, royalties and franchise fees, weren’t ridiculous and exorbitant either. Um, so you were in an industry that had. So much money flowing through it. And yet, so many of those owners went bust in the year, 2000 and beyond, and it staggered me and it taught me something though. It doesn’t matter how much money you make. It’s about the discipline that you have in the good times. Just as much as in the bad time. And knowing, you know, I’d put money away for rainy day and, you know, profit is about, you know, a reward that you have in your business, but a portion of the profit that you need to be putting away for tomorrow to continue building your business for tomorrow and look at where we are now, we’re in the midst of one of the biggest economic downturns, uh, in our history.
Uh, and most people wouldn’t have had a week’s worth of cash in their bank to continue going. Um, and if it wasn’t for the government, you know, giving us all a job keeper and all that sort of stuff to keep us going, many business owners right now would have folded, uh, which would have been devastating for employment devastating for the economy, uh, and obviously for ourselves as well. Um, but the, the video industry is a classic example of that. It taught us that doesn’t matter how much money is in an industry. It’s not necessarily going to be there tomorrow. Um, and it doesn’t matter whether it’s a coronavirus that kills it, or whether it’s Netflix, um, and light phase didn’t kill the video store. It was poor, poorly run businesses. I think there were some great operators who did a great job, but I saw a lot of them go bust because they weren’t ready for tomorrow.
They were just thinking of today and driving nice cars and living in nice houses and mortgaged up to the Hill because the cash was coming in. Uh, but not thinking about what tomorrow look like. Uh, and they had plenty of warning. Yeah. As opposed to coronavirus. Vit Muller: Yeah, absolutely. And we’re not just talking about, uh, like you said, they were spending money where they should have kept it and think a bit more, uh, on the vision of the business. Then we had blockbuster, right? That was, yeah, that was a big chain. Have you felt that one? Matt Alderton: Well, so blockbuster here was interesting because, um, they were a big American chain that came through Australia and probably, and I was video easy for most of mine.
When I ran the 50 shops that we had, with a Video Ezy. And I rebrand it to a network video when I left and I, my own ones, but blockbuster was the big brand in Australia. Video is video, easy was Australian brand, but blockbuster just crashed worldwide. Like they just disappeared. They pulled out of Australia, they left their businesses high and dry. Um, yeah, classic. I mean Vit Muller: big lesson to learn there, right. That the power of, of innovation in the business with them and, and, you know, the story of blockbuster and Netflix when Netflix was starting out, I think the story goes like the, the, the CEO is, you know, the, the, the executives of blockbuster, like, did you just laughing at it? It was just odd.
This is never going to have to worry about it. Matt Alderton: I think they even had an opportunity to engage. if I remember the story, they had an opportunity to buy in at the time and they knocked it back. Um, in saying that Netflix, Netflix has lost money for many, many years as well. So it’s been a black hole of an investment. Um, And, um, you know, there’s going to be a bunch of, uh, of streaming services that I don’t think are gonna make it, uh, because it’s a very competitive market and you’ve got some big players, Apple TV, plus you’ve got, um, you’ve got, obviously Netflix is probably one of the strongest at the moment, Apple TV plus, Disney plus, Stan, prime. And of course all your free to air, all streaming their services now as well. It’s a pretty, pretty messy market. I wouldn’t want to be in that game. And that would be, there’s probably a lot of money being thrown at it. And, um, I’d be interested to see how much money they’re making out of the streaming services alone.
Um, Vit Muller: you wouldn’t want to be trying to start a new business, trying to compete with that. That would be. That wouldn’t be a smart decision. I reckon. Matt Alderton: I agree Vit Muller: now back to, so running a video store, you mentioned a couple of, you know, the benefits of like the costs being low at the time. And, and, and, and also no perishables, right? There was nothing. I mean, there may be some drinks in the fridge, but that doesn’t go off that soon. But bringing that to income person to hospitality, which you said you had a subway business entirely different, uh, problems with that, right. Matt Alderton: Yeah, well, so subways and, and, um, four subways and a couple of cafes. And, um, they are hard businesses to work in.
So, um, you know, subway turnkey, if I hadn’t had one subway and worked in that easy business to run when you’ve got, um, nine different retail shops to run, um, and you’re running them, the management with 15 to 25 year olds running those businesses, uh, for totally different value proposition. Uh, but the one thing I do know, like I talked about, uh, the video store having a 15% wage cost, whereas your subway might have a 25 to 30% wage cost. Your cafes are having a 40 and 45% wage costs a lot of the time as well. And then you’ve got cost of goods sold. So the video is still, you’ve got 25%. cost of sale, but then once you’ve rented that out, you’re selling off all your excess copies as well, and making more margin back off the back of that on an next rental sale.
Um, um, so it just keeps you, you know, you rent it out once it comes back, you rent it out again. so you’re buying for that and then you’re selling it off of the back end down to, you know, one or two copies to put on the shelf on the weekly shelves or whatever, whereas in a cafe in or at a subway. you can only sell it once and you got to buy it well, and you can’t overbuy cause you you’ll then have wastage.
Um, but obviously like the, the big thing about cafes and, and Subways, you know, you’ve got a 30 odd percent wage of food cost in there as well. Um, so straightaway you’re looking at anywhere from, um, so if you’ve got 30%. At food costs inside, you’ve got 30% wage costs. There’s 60% gone straight away. You might have a 10% royalty or something like that. And if you don’t have a royalty, you’re probably paying more for your food. Um, so it’s still you’re looking at, I think are around 65, 70% just with those two factors alone, which leaves 35, 40% to pay all your other costs in your business, um, which endup, you know, often coming very close to break even. Um, so the average caffeine, a good week, might be making 10%. Um, the video shops on a good week, on a good week, we’re making 50%. That’s the difference in business? Vit Muller: You gotta run a tight ship, then Matt Alderton: Absolutely do. If you don’t, you don’t run a good ship one week.
Yeah. You lose money. Then you’ve got to try and make it up the next week, if you’re lucky. And that’s the hard thing about retail and hospitality, so that all these businesses know right now with coronavirus, that they’re, they’re looking at losing money week in, week out, week in, week out. So that just adds an ads and ads, and then they go, well, when we open. If we, if we’re losing 20% a week or 25% a week, or say we’re losing $10,000 a week or whatever that number is, um, they know they have to make that app time and time again, which doesn’t just cut into, uh, you know, their profit each time it might be generating, you know, take, it could take them two or three years to make up the difference in that loss.
There. I’m a big believer that, you know, everybody should be paying their why and about, um, you know, a firm believer that the cash economy is a big killer for, uh, you know, people doing the wrong thing and not declaring the cash, but I can understand why people don’t, um, declare all their income because they’re not making it. They’re not making enough. And I know that, there’s a lot of businesses out there doing it tough, irrespective of the coronavirus, but certainly the coronaviruses is, you know, putting a lot of businesses under extreme pressure, if not going to collapse them.
Yeah. One Vit Muller: is the moving on to an online, right? You guys had to pivot with BX big time. I mean, I know before B, before this happened, I mean, I know, you know, there was zoom meetings, but I think it was like once a week or once a month. Matt Alderton: So there was Vit Muller: a big shift from going that she’d going weekly almost every day on some days going twice a day having a one and a half hour meetings. Matt Alderton: Right. So it’s great. Right. So, um, w we had been doing it once a month. We were doing it and, um, We were having the same number attend once a month, as we now have a attend, um, a couple of times a day, um, Tuesday through Friday.
So it’s really, it’s quite fascinating because, and you know, you’ve got to look at the silver lining out of every single thing. And, and the coronavirus, although has, is having a devastating effect on a lot of businesses. There’s a lot of businesses that are done well off the back of it. By innovating and changing what they’re doing. Um, and, um, and pivoting, which is the term everyone’s throwing around at the moment.
Uh, but those that have successfully done it. Uh, you know, may still be hurting, but they they’ve created a stronger business off the back of it. Uh, so I know from a BX perspective, we’ve lost half our revenue overnight because we stopped doing events. but we’ve created a whole new channel of business, which is in the online. and so we’ve, it’s really like a whole nother funnel for our business because, people that would never have engaged with us before, because they weren’t. In a physical location where we have meetings can now all of a sudden engage in BX and be part of the online meetings and, uh, and then create opportunities to, to actually create face to face meetings as well. Um, and, uh, but what it’s done, I think for the business overall is made people wake up to technology.
I think the resistance that there’s been in a business to using tech, uh, is still so significant. Uh, and I know from a, just a coaching perspective, I, you know, when you’re talking about things like, uh, businesses using accounting platforms, like cloud based accounting platforms, like QuickBooks online, for example, um, The number of people using that kind of solution as compared to a desk top solution, like an MYOB or something like that, or even Excel and putting the figures in there or something like that. And then sending that to their accountant, that was still proportionately high at the manual end as opposed to the cloud based end. Um, whereas I think we’re seeing a transition now where people are now forced to do zoom calls and, and meet online and to use different formats online, to communicate. Even accountants are now saying, don’t come to my office, don’t send me your receipt.
This is how we want it now. And people are a much, they’re much more. Um, it compliant, I guess, with that and, and aware of the opportunities are involved. And we’ve had people obviously through our online events that would never have come to an online event before. And they’re like, this is amazing. Like, why haven’t you been doing this for years? We’re like, we have like, wow, what, how did we not know about this? And I just wasn’t ready for it, but this forced people to be ready for it. And it’s done that across all the small business. And I think it’s just opened the door for every business to really step it up. And to create more opportunities for themselves. And some businesses have done some great work and created some really successful opportunities for themselves and their business for the future. But it’s also, it’s moved, you know, the consumer as well as the business owner in a really positive direction.
I think Vit Muller: absolutely. I mean, uh, from a fitness side of things on my end, I’ve, I’ve seen incredible shift. I mean, we’ve been able to very, very quickly move on to zoom sessions. So we’re running zoom classes. We were seeing up know up to three people joining in, on zoom from their living rooms, and we’re still able to correct their form, keep them motivated and still get that sense of community. Matt Alderton: Yeah, it’s phenomenal. Really? Yeah. Vit Muller: And the big thing about this is not just, okay, this is just the workaround now just to get by because of this Corona virus. This is like you said, this is now people need to think about it.
This is a new revenue stream. This is, this is the invention. Now this is when we come back. It’s not like you need to drop it. You should actually think about keeping it and add it as, another as another stream, we talked about BX but i guess for the listeners, we should probably unpack it a little bit. I know in the intro, I sort of mentioned a little bit, but for those listening who don’t know about what BX, BX networking represents and what it is. Keen to unravel that a little bit? Matt Alderton: Yeah. So we, we define ourselves as business networking re-imagined uh, so you might have been involved or been to some form of networking in the past.
Um, we are a bit like that, but a bit different or a lot different. And I guess the, the big distinguishing thing is we still run events. Like lots of networking events do, and we do fortnightly breakfast and lunches and we do the online stuff. Uh, but the big thing that we really focus on at BX is helping create referral partnerships as opposed to selling to each other. And you know, the flicking of business cards and the looking at how many people are in the room and how many opportunities there are for people to buy from me. We really eliminate that so that the relationships we’re building in the room and online are all about how to help each other. And connect each other. And we found that we get amazing results by empowering people to build connections from each other in the, out, in their networks, outside the room, and then create the opportunities then to build referral partnerships off those connections, which create a steady stream of new clients as opposed to sporadic one-off opportunities here and there.
And so we’ve created a format and a structure that really extrapolates that out in a meeting. And, uh, whether that be online or face to face. And we’ve got members that are generating six and seven figures off the back of their energy and time with the connections they’re building off the back of our networking events. Um, but I guess, you know, that is kind of the, the structure and the format and the result. Uh, but really we are a community of business owners, uh, spread across Australia, New Zealand. Uh, they come together regularly, online or face to face and help each other.
And I think that’s where the stickiness is. The power of, of BX is in the building of that community. And it doesn’t matter. We seem to have people that are really close and they might be close geographically and good friends and a great community. Then all of a sudden, um, they’ve got contacts across the other side of Australia and in Perth or whatever that they might be working with in a collaboration as well. And it’s, it’s really, um, it’s quite amazing. It’s quite rewarding to be part of and to be leading it. Uh, and seeing people, you know, grow their business off the back of these relationships and the collaborations that happen through the network.
Vit Muller: And anybody listening to this, if you have business in Australia, I highly recommend it. You know, I’ve had experience both pre Covid 19 when it was, you know, over here in Canberra, going into different, I think there’s five chapters that we’ve got Gungahlin, Braddon and whatnot. And the chapter that I used to, or chapter a group that I used to go to in Gungahlin, you know, it was, it was great because you go for brekkie once a fortnight, you get to. You know, see other business owners face to face, you know, you have a bit of a laugh, you get to know people on a personal level, you get to, uh, build stronger relationship and trust.
And so when you build that trust, um, you know, when people know like I can trust you, then they’re more likely to refer you and more likely to, um, you know, that relationship too, to build into a proper referral partnership. So I definitely enjoyed that and I’ve definitely seen that very effective for my own business. And now.
It’s uh, it’s different, but also I would say even better maybe Matt Alderton: I’d say even faster. Yeah, yeah, yeah. Because you’ve really, you can, whereas in a lot of meetings face to face, you’re creating partnerships and collaborations with people outside the room. A lot of them are already on the call that you can build partnerships with. So you might be a referral partner that you’ve, um, you might be looking for accountants to collaborate with. It could be two or three accountants on that particular call spread from across Australia that you’ve never met before that create that collaboration and that you seem to get fast attraction off the back of it. Um, and, uh, the other thing you mentioned was breakfast and lunches. And so I guess that’s, I’m a big believer that, uh, if you come to a, an event you should get barista made coffee, um, as a standard these days, And you should get to choose your breakfast and have ala cart breakfast.
So we are passionate about the food that we put in front of our people as well. Um, and, um, and certainly, you know, from, uh, from the person who’s going to afford five meetings a week. Uh, I’m also lucky to choose my mail and have a great coffee. So it’s one thing we do really well at BX is choose fantastic venues from across Australia. Ah, who will be very excited to go back into soon as well when they’re all allowed to host our events and stuff like that. But absolutely Vit Muller: that’s, I mean, that’s their income, right? They, they definitely, they are looking forward to that.
Now, somebody either listening to this, they still might not actually get the benefit of it. I know the whole idea of networking. I mean, to me, I think the biggest thing is that , it’s like word of mouth. I mean, we are herd species and people need to know you. If you, if, if you’re doing a advertisement in a newspaper, it’s a lacking couple of important things. It’s lacking, you know, the voice, the tonality, you know, that you can’t really replace it face to face, you know? Uh, uh, you know, expression of who you are and what you do.
And so I think that is the biggest thing. Is there anything else you’d want to add to that? Matt Alderton: Well, I suppose, um, the two kind of elements to the value proposition that people get is one that, uh, I always say to people that we don’t sell to each other at BX, uh, you know, we don’t want to salesy kind of environment with our members, but people buy from each other all the time. So obviously, uh, once you build that relationship and you can know like, and trust people through, um, networking and working with them on a regular basis, people will buy from you. That’s just a no brainer. Uh, you know, people. Once they’ve got that relationship, they’re going to be looking for the people they know like and trust to buy from. But the other element is definitely the referral relationships.
And that’s once again, a relationship that you build and you can’t build that, uh, via email or anything like that. That’s a once again, a conversation that you need to have. So you’ve got the tonality and the understanding, and you’re building a relationship as well, because you know, that’s not just something you can make robotic. Even though you can systemize and structure it so that it’s a regular conversation. You still need to be on the phone with people on a regular basis to continue a relationship so that they think of you you’re top of mind and they are referring to you. Cause your referral partners do refer their clients to you. That’s the purpose behind it. And they’re not going to do that if they don’t have a relationship with you in the first place. Vit Muller: Now looking at, uh, you know, talking about, uh, ideal referral partner, who should the ideal or partner Matt Alderton: be. Yeah. So everyone obviously has a potentially a different referral partner. Uh, and the easiest way to identify your referral partners is just thinking about who your clients are.
And then think about another business, that’s also serving those clients as well. and then that obviously doesn’t compete with you. And that is, um, generally going to be a good referral partner for, for an example, I’ll do some obvious examples and then you’ll be able to work your way back from the business you might be in. But if you’re a mortgage broker, you’re typically helping people secure money to buy a home. And, uh, so who else is helping people buy homes? That would be a real estate agent. So you would think that a mortgage broker and a real estate agent would have similar client bases. So if, if these two people were talking to each other on a regular basis, say every fortnight, having a quick catch up and seeing how they can help we’ll connect each other up on a fortnightly basis, that would keep each other top of mind, which meant that, uh, when they had their ideal client and somebody who said the real estate agent, or do you know a good mortgage broker that would say, yes, I do this person.
Cause you’re top of mind and vice versa. When you’re, you’re, you’re sitting in front of your mortgage broker and you’re talking about, uh, buying a home, they should, they’ll say, Oh, you should speak to this person. Cause they’re the guru in that space. And they, they know a bunch of great homes in your local area, et cetera, et cetera. So they’re going to naturally refer, another classic referral partnership might be a business coach and a business coach is a great referral partner for many B to B style businesses.
For example, if you’re a marketing person, just so you do SEO, you would be talking to. Business is about growing and scaling that business and that investing in marketing. if you’re a business coach, you you’re talking to businesses about growing and scaling their businesses and investing in lots of different things. So one of the questions you will be asking and talking to your coaching clients about is what sort of marketing are they doing? And that’s a natural connection, therefore, back to the, uh, SEO company. Uh, and likewise, the SEO company would be saying, you know, how are you going with the business? What other marketing, what other things are you doing? And that would ask the question. Do you have a business coach? If you don’t have a business coach. I reckon you’d really benefit from, um, getting some structure around and some strategy around what you’re doing across all the areas of your business, and they can connect you out with a business coach.
So it’s really prospecting. Your clients on behalf of your referral partner so that your referral partner doesn’t have to do any selling. They’ve really just been getting a warm client, put in a warm lead, put in front of them that I can just have a conversation with and they’ll know straight away whether it’s going to go to the next level or not rather than having lots of sales conversations with people that are maybe interested in, maybe not. You’re having only genuine conversations that are having a high yield or high conversion rate. And you’ll be surprised that, um, generally out of every, uh, referral partnership, you’ll generate about 20K a year with a new business. and we sort of work with our clients to help them get five to 10 new ones every single year.
Which generally gets about a 100 K to 200K in new revenue per year on top of what you built last year and then you’ll add to that next year. So if you’re adding one or 200 K worth of new business every year to your business, um, you know, on top of the income you’re already doing as a business anyway, um, that’s a, that’s a pretty good incrementally, um, growth in your business. Not to mention you probably will be doing some other forms of marketing, which will be driving revenue as well. Uh, so, you know, if they, if they’re spending time on networking and they’re spending time on the digital marketing and they’re, um, maybe doing some PR, um, and they’re getting all their pillars of marketing into place. You know, you should be able to generate, you know, a good unreasonable increase in turnover every year, couple hundred, again at a networking couple of grand out of this couple on the ground or that, um, you know, within a few years you’ll have a million dollar business and growing, and really that’s what you want to be aiming for.
Businesses should be aiming to get into that seven figure. A point within that sort of first five years and that’s, you know, a good, sustainable growing business because every business is a bit different and I’d probably say, have a conversation with a coach. And if you need a referral to a coach, I can let you know about that too. I’ve got some great ones in our network.
Vit Muller: And another good example could be like in a, in a trade shop, right? You can have an electrician and a plumber, right. It could be a referral partners to each other. Matt Alderton: Absolutely. So just to whoever’s already serving your clients. Yeah. So a plumber would be serving in a home services, anybody in those terms, services, builders, plumbers, electricians spot. Oh yeah. They’re all, fit into that.
And so you just got to think, and you would have easy, probably 10 plus referral partners. Some would be really obvious key ones and some will be less obvious but generally they all return about 20 K worth of new business per year, every year, which is the great thing that I love about BX is we’re helping people build businesses. Um, not just that it’s linked to their membership. So it doesn’t, you know, when you leave, but you actually don’t lose those referral sources. They stay with you for as long as you nurture those referral partnerships. Whereas lots of networking, um, the growth and the referrals.
Are linked to your membership. So you leave. So you might be a business coach once you leave that networking organization. Uh, and somebody else steps in as an, as the business coach, they start getting the referrals and you stop getting the referrals, which means you’ve got to continue to invest in your membership, uh, for the return in referrals. Whereas I believe that really you should be able to build a sustainable model. That’s not linked to a membership it’s linked to your input into those relationships. Um, not blinked to the financial input to it, a third party. Uh, it’s like SEO, you know, like you build it. Um, and if you build it, they will come.
But you know, you don’t have to invest the same capital in every year to get the same results. It starts to build itself. Once you put some of these strategies in place. Vit Muller: I think it also comes across as a more, uh, as a more ethical business model where you, you, as a, you know, yourself, with BX you’re coming across as somebody who’s trying to genuinely help, you’re not there saying, you know, I’m only going to help you as far as keep paying kind of thing. Yeah. Matt Alderton: Well, where, where education first? And events second. And we built BX before it was even called BX.
I was doing small business education, running events with five, 600 people, or even a hundred people and 50 people, um, doing small business education. Uh, and then we created BX and we continued doing that. We’re doing 12 month programs and we, the networking became part of it and it’s actually become the biggest part of our business now, uh, by a long way. But, um, our how culture and ethos is around helping and, um, and building small businesses. And, uh, you know, when you’ve got that at your ethos, it means that you’re not focused on how to, um, you know, get as much out of a member as possible. You’re focused on how to give them as much as possible, uh, which in turn will fly back if you believe in karma. Uh, but, um, we are strong believers that. Um, you know, the more we sell into our members, the more valuable we make ourselves anyway. Um, and we know we’ve got, you know, 1%, no greater than 2% churn rate in BX, which is crazy, right? Like it means we retain 98% of our members.
Um, across the 12 month period, like we, which is why we’ve grown 300% in a year. Um, so like, because we are constantly focused on putting value back into our membership, as opposed to what can we get out of each and every member it’s not about, you know, screwing it down to the minute sense. Like you might’ve been retail and hospitality. Um, it’s a different ethos would with BX. Vit Muller: Now, I know you do a lot of work for small businesses, and I know you, you know, you’re also frequented lobby with governments, uh, on behalf of small business owners, I believe you’ve even had a conversation with prime minister and really pushing that message, um, for the government to look after small business.
There could be many other business owners , you know, who had, you know, who have had franchises and had different businesses, but they don’t do that. So what inspired you to, to be that voice? Matt Alderton: I guess? Um, so I think from a family of small business that probably, uh, has shaped a lot of my feelings towards, um, being in business and about helping and being part of something bigger. Um, and we were talking about it earlier, before we kicked off the show here today, we were just talking about, um, That it’s in you as an entrepreneur. And even when I was a business, like when I was an employee, I had an entrepreneurial spirit and I was, and I think that served my employer.
Cause I didn’t, I wasn’t counting my 40 hours down the clock. I was, I was working like, it was my own business. but having owned my own business and, uh, and businesses, and I think I’ve, uh, 13 or 14, um, businesses overall I’ve had, um, having owned all those and. You know, I’ve had some amazingly successful ones, uh, BX being one of those, um, you know, IWS, um, you know, be over eight figures by the end of the, um, sort of next year or so.
Um, like these businesses are amazing and, you know, at least, you know, you’re doing something right. Um, but I’ve made some pretty big mistakes as well. Um, I’ve had, and I’ve had some pretty big setbacks along the way and it’s through those that I’ve learned more than building the successful ones. I’ve learned more off the back of the failures that I’ve had. Um, and, uh, you know, there’s a, there’s an amazing lady by the name of Terry Hawkins, who said there’s no failures in life, there’s just feedback. Um, so I’m quite happy to think of it as, as really good feedback. Uh, and I, I’ve learned, I’ve learned a lot from that and, and it allowed me to take all that and then sew that into the lives of others. Um, and I’d much rather teach someone. Uh, through the, um, the failures that I’ve had, all the feedback I’ve had, um, and give them that wisdom and let them make less mistakes than I’ve made.
Um, and I guess that’s part of the community spirit that we have with BX and, and what we do there but one of my biggest setbacks, uh, would have been. Uh, I had a business partner in one of my early businesses who, uh, D fraudulently took about three what about half a million bucks out of the business? Um, and then we go slug with about another quarter of a million bucks in, in penalties and interest. Cause the money that he took out, um, he was supposed to pay, um, ATO and super and stuff like that. And didn’t, and we got slogged with it. Um, so it cost us about three quarters of a million bucks.
It took us about a decade to really get over it. Um, It took us a considerable time to pay it back and really, you know, the, the impact, the impact is probably lifelong in terms of financial, because you never have that time back. Um, when you’ve had to, it’s like when I was talking about the retail and hospitality businesses, it’s going to cost them two or three years in their business. Right. Um, of, of making money and the reward for that investment they’ve put in there.
Um, and some of them might have not even have leases long enough to make that money back. Um, and it’s, you know, I look back and I think, well, that’s probably a decade out of my life that that cost me, but I guess the. Positive. And you’ve got to find a positive. Otherwise you don’t get up out of bed in the morning and keep going.
But if, once you find the positive and that is an often it’s after the fact that you can, you reflect on and get more positive, but it’s the lessons. It’s the lessons. I’ve now applied into other businesses where I haven’t then made the mistakes that I’ve made back then. Um, I’ve been much slower to trust, um, which is good and bad, but how much wiser to trust I suppose is, is probably the thing I think back then when I took a partner on, um, I just saw the opportunity. I didn’t think of what are the pitfalls, what are the things I should be overseeing? Um, And probably the biggest lesson out of all that as well is, um, it’s the people around me.
Who am I taking my advice from? Um, because of the advice I was taking only on a business was from a local, uh, almost retired accountant, um, who had, um, who had plenty of years of experience of doing personal tax returns for people and doing, um, and maybe a few small businesses in the local area, but he was not Vit Muller: a broad enough. Matt Alderton: No, not broad enough, not understanding of renough of, of, um, businesses of a certain size and growing, um, and probably had no other retail and hospitality businesses under his portfolio. Um, and of course he used to do my personal tax returns because he did my mother in law tax returns. And I just ended up using him just through that referral and, and each accountant I’ve had for a long time.
I had for a long time, but, um, I had it for too long, probably as well. So I should have made the next step to the, the, uh, the next one before I did. Um, and it probably costs me as well in decisions that I’ve made. So, and lawyers would be exactly the same conversation. So I think those professional advice, people, business coaches, another classic example, um, So wherever you’re getting your advice from, you have to think about that, you know, with people for a season, a reason or a lifetime, um, there’s very few lifetime people that way within our life. Um, so it’s a seasonal or reason. Um, and I, I can see, and I, um, when I look at and think about the people that I’ve had around me about when I should have moved on. Because, and I didn’t for a variety of reasons, you know, relationships, and I felt like I maybe owed them or Vit Muller: emotional attachment sometimes. Matt Alderton: Yeah. But I think, um, ultimately I can pin, you know, the cost of some of those along the way as well.
Um, and it’s easy to attribute. Uh, the accountant and the lawyer are probably two big ones that we should be thinking about. Are they serving us right now? And are they doing, are they, are they at where we’re at now? And are they going to take us to the next stage because I might be okay for now, but if they’re not going to be able to take us to the next stage, then it’s probably worth having a think about who are our next stage or next season. Um, People that are around us because we are the average of the seven people we spend the most amount of time with. We know we take where we take our advice from we, we, by osmosis, we, we take on it and we absorb the wisdom of others around us. And if we’re not around around enough great people, we’re not the best that we can be either.
And that’s probably the biggest lesson I’ve taken out of all my businesses. Vit Muller: And often times with family and relationships, that can also be the culprit because there’s a big emotional attachment. And those people mean the best for us. They love us and they, they generally want to help us. But the advice is not often the one that you should listen to. Um, Matt Alderton: Right. Definitely. And I guess it’s a leadership thing as well. Um, it might be an employee that, that you’ve got, um, or a team member that’s with you that you think, you know, this person may have been great at the time.
Um, but at the end of the day, we don’t, we shouldn’t be making decisions just so a hundred percent based on personal feelings and emotions, we should be doing things. What’s, what’s the best thing for everybody here. Um, and that’s often. To move on, um, you know, season a reason, a lifetime. It’s a, it’s a great analogy to think people don’t need to be with us forever. Um, and it’s okay to move on and that’s the same for marriages and relationships of any kind. Um, so hopefully my wife and I we’re good for lifetime. Um, I think we are over 20 years married now with three kids.
We’re doing pretty well. Um, but you know, it doesn’t mean you gotta, you can just, you know, That’s okay. And, and hope that hope that it continues on you still want to work hard at these things as is you’ve got to do with any relationship, whether it be in business or life. Yup. Vit Muller: Now another technical question. More businessy you’ve had an experience with both, uh, starting business from scratch. I believe you had a coffee shop as well.
Did you start from scratch, but then you also run a franchise. You run a couple of those subways. So, um, how, what, what are pros and cons of sort of both what pros and kills. It’s constant, both businesses. Have you personally experienced? Matt Alderton: So I started out of all the retail and hospitality businesses. I started. Um, so it took over two video shops that didn’t start them from scratch with, um, the subways I opened, uh, three of them and, uh, I started and I bought one existing.
And uh, with the coffee shops, I, um, started both of those, um, BX from scratch and, um, an IWS from scratch as well. Um, so most, most from scratch. Um, and, and that’s probably the. Best. If you’ve got something and these days it’s pretty easy to open a business from scratch. Um, but the big difference between like a subway, um, whether you’re taking it over or starting from scratch, they’re, they’re really turnkey operations, even when you’re starting it from scratch and you’re building it, you’re given, um, you know, the Lego kit to build it from, um, you even given the builders and stuff like that. So that’s, they’re really easy businesses to start off with and I’d probably recommend, you know, If someone wants to get into business and they’ve got no business experience, then that’s a good place to start because they help you do your business planning.
They help you. They do that regularly with you. They have, um, a team that come out and visit you once a month and work through, you know, your restaurant from. Yes, health and safety stuff, but they’re also helping you grow your business as well. Um, whereas lots of business owners go to business now and they’ve got no idea what they’re doing. They’ve, they’ve never owned a business, never done any kind of education in terms of running a business.
And then they go and open one, um, and then realize, um, you know, they love serving customers or love doing what they do as a trade. But they’re actually not good at running a business. And this is probably the number one reason most businesses come on stuck is just, they’re just, they’re technically fantastic. But they’re at the actual business. It’s self, the running of the, uh, the books and the accounts and the legal framework and the HR and all those bits that, uh, don’t actually apply to the product or service. They just had to actually run the business itself. They’re not good at that. And they don’t have much experience and it might be good at one part of it, but they probably suck at another. So it might be good with a team and that, but they might be terrible at the account. So vice versa. And that’s where lots of businesses come under stuck because they just, I let those areas fall over and they become very costly.
Um, you know, cause there’s legislation that binds you with a lot of these that if you don’t do it right, you can come back and bite you in the ass, down the track. So you gotta be very careful. Um, and, but it, it’s pretty easy to start a business these days, if you’re not bricks and mortar, Then it is super easy because you know, you can start it from your, your home office and, or your lounge room or whatever, and you kick it off and you’re off and running up and running. Well, when you think about that, if you’ve got something you can do like that, that’s fantastic. But what are the challenge I would always set for people is that do it right? Even if you’re going to start it from your lounge room, you know, You need to know what your turnover is going to look like by the end of this month, this quarter, this year, next year, five years, put a business plan to practice.
It put a business plan into place, treat it like you’re spending, you know, 300,000 bucks on opening a Subway restaurant, even though you’re going to be given the structure down the track, still treat it like you’re spending the money upfront, because I think that when people aren’t spending the money upfront, they think, Oh, well, there’s no risk. The problem with it is when there’s no risk that I put the same level of effort in. And when there’s the effort’s not there, that the structure and the discipline to achieve the results, isn’t there either. And lots of people and excuse the saying, but they fart ass around for two or three years, earning less than the minimum wage. And I can safely say this because half of small business.
So those earning under less than a couple of million bucks a year. Half of them earn less than 50,000 bucks a year. Less than 50,000 bucks a year. And let’s assume that the 50 K’s about minimum wage. Um, let’s like that’s under minimum wage. Like w why are we doing that? Why are we risking, um, you know, our future, uh, probably not paying ourselves superannuation, all those things to own less than the minimum wage we might as well go get a job, work 40 hours, um, in a supermarket or something like that without any responsibility and be able to enjoy.
You know, every minute that you’re not working, rather than it be stressing about trying to build your business and probably working 60 hours. And so knowing what to do when to do it, getting the right structures, having the right people around you and, um, being, having the discipline, um, like I’ve worked from home from, um, Through this Corona virus, but I start my diet at the same time. I end my day. At the same time I set daily goals. I set myself actions for the day. Um, if, and if I’m not achieving those, you know, I might do a bit of work in the night to catch up and, and that’s cool because, um, you’re on your own business, but that’s the discipline as well.
If I just, you know, was whatever, you know, fart assing my way through the day and week and month then year, um, Vit Muller: you don’t know, where you’re going. Matt Alderton: And how can you possibly have a business where you actually have no idea of where you’re going and how fast, how fast and how long it’s going to take to get there. And, yeah, so discipline is probably a big thing that people need to really put into place and have the goal set in place. And I’ll have my goals up on my wall in front of me, my, my, my weekly in front of me on my desk.
I have my quarterly, my annual up on the wall in front of me. Um, And so I’m reminded of where I’m going. I know where I’m I’m know what I’m trying to achieve. I know what I’m trying to achieve it. I cross it off when I get there. Um, and you’ve just got to have that discipline. Like you’ve got a boss who’s, who’s sitting in another office. Who’s got those expectations of you as well, because you do, the boss is the ATO or the bank. Um, and they’ve got expectations, but they don’t come knocking until the last possible moment. And it’s all too late when they come knocking. So you got to think there’s another boss in the office next door who’s who’s by the end of this week or month or quarter, he’s going to want answers, or she’s going to want answers to why you are or are not achieving what you need to be achieving.
Might be Vit Muller: a wife Matt Alderton: and a lot of cases that might be the case Vit Muller: Now starting a business on your own. Uh, obviously you need, you need to be, um, you need to what you said you need to have, you know, the what’s the word. Matt Alderton: Discipline Vit Muller: that’s right. Discipline. Right. So, um, and when you got nobody else around you, um, where do you get that discipline? Right. You need to have a strong why, cause that will, that will drive to us that motivation that will drive that perhaps that discipline too. Um, what is your big audacious way Matt Alderton: Matt? Well, my. My goal, my vision for BX is to impact the lives of business owners and entrepreneurs across the globe.
Um, so I have a, it’s a, it’s a big Beehag, it’s a fairly broad Beehag. Um, but I think we are, I know we are achieving it, um, where we’re global now as, uh, officially, as of may and June, we’ve become a global organization. Now no longer just in Australia. Um, and we’ve been signing people up. We’ve had people from the US and Canada and, um, we’ve got. Already got an Indian base, um, building at the moment, uh, we were supposed to launch there this year. I don’t think that’s going to happen, sorry for Indian fans out there, but I don’t think we’re going to be able to travel to and from, so it makes it pretty hard, but we will be online over there. Um, and New Zealand obviously, so where, you know, we are making a difference globally. Um, and we’re changing the lives of business owners globally and that’s, that’s.
That’s what we’re trying to achieve. That one, that’s what we are achieving. And I know we will continue doing that, um, because our ethos is about helping people first. It’s about adding value and, you know, empowering the lives of business owners and entrepreneurs first, and the rest will come. Uh, and, uh, you know, the discipline is an important part, obviously. In terms of achieving and getting me getting, um, every step of the way. Cause I believe, I believe your Beehag is that big goal that’s up here and it could be two years away, five years away or whatever.
Um, but you’ve got to have a stepping stone every step of the way, you know? Um, no, no one can jump, you know, Five years into the future, um, in one step, but you can step daily and little steps every day. And how do you eat an elephant one bite at a time? It’s exactly the same with your goals. Um, and that’s why I write my daily goals. Yeah. I have weekly goals. I have monthly goals, quarterly goals, annual goals, and, and. They are just those stepping stones to my goals along the way that each time I achieved them, I cross them off and I get that little hit of endorphins and dopamine in to my bloodstream. And, um, and it motivates me and pushes me through to the next one.
And, um, yeah, Vit Muller: Goal setting is very exciting topic and we could probably have another whole episode on that. I know I’m mean, I love the process of coming up with something new that you want to develop and, and you, you. I feel that, you know, that’s 12 months, where do you see that in 12 months? And then he stopped breaking it down and then you start breaking a monthly, weekly, and a little daily routines to it’s also when you, when you really put that hard work into it, it actually is not that hard when you have that clarity of like a specific task on that day. Like how many emails or how many phone calls you need to do or what you need to do on that day. And then you look at that bigger picture.
Ah, okey, well, this leads to me achieving that monthly thing and then quarterly and then yearly and boom, and I’m there. It’s, it’s amazing when you do it. Right. Matt Alderton: And the V and the, um, gym industry, uh, are the masters of it. Um, and I know because it’s what keeps people coming back to the gym and, and what you guys are really good at is giving people the vision. So, you know, why are you. Look trying to lose weight. Why are you trying to tone up, you know, what is it that’s motivating you? Is it that body for when you go overseas on your holiday or whatever, or, you know, you’ve gotta be able to visualize what it is you’re trying to achieve and what you’re going to look like, Vit Muller: connect emotion to it.
And when you’ve achieved it, what will that allow you to do? And. And it’s so funny. All those Matt Alderton: questions I’m really good at, in my business. But I remember I was at a gym, um, a number of years ago. And when I was just joining, uh, they were doing a goal setting. I’m like, I don’t want to do the goal setting. I know what I want. I just, I know how many times a weekd I wanna come. And I know how long I wanna do it for, so let’s just do that.
They’re like, no, no, no. We want to do the whole photos and blah, blah, blah. No, I don’t wanna do any of that. They are like, well you have to. And I’m like.. OK. Vit Muller: And often times what you want is not enough. You got to go deeper. You got to ask yourself maybe like another four levels down, you know, why, and then why. And then again, why. Yeah, right. Because the day, the interesting thing by that goal, that initial goal, especially in our typical one, January, right? New years resolution, everybody who has a bit of a six pack goal or something along those lines, and then it comes February and statistically, a lot of people drop off and it’s purely because they didn’t have a stronger emotional attachment to that goal.
Matt Alderton: They didn’t dig deeper. So, yeah. Yeah. Vit Muller: Uh, I love the branding with BX where you’ve just done earlier this year. Matt Alderton: Thank you. Why? Well, I guess the big thing is that, uh, uh, there’s two reasons. One that, uh, We knew that the branding had been around for about five years and we believe, um, like good business strategy is that, you know, every five years or so, you should do a rebrand because the brand becomes just a bit stale, a bit old. So we’ve been around for about five years. Um, but we also w we were changing in what we were doing and delivering on, and we were, um, delivering in a different fresher way. And we didn’t think the branding. Uh, actually looks like that. Um, so that was really the second part that really our old brands did not conceptualize what we were about. Um, and that was your young, fresh, fun, um, energetic. The old brand was quite a conservative brand with a conservative font.
Um, and it, it, that served us then, but it wasn’t what we’re about now. Uh, and we will probably, if I, if I just. Took the temperature back then compared to now in terms of the average age of our member and our average age is dropped by probably about 15 years from then to now, which just goes to show you that. And older conservative brand doesn’t mirror the general, uh, makeup of our members, um, and let alone, we just needed a facelift and needed a new energy round it. And, uh, I’m actually very excited by the change in it. Um, I love it. Vit Muller: That’s great. Yeah, it’s a good energy.
It’s a bit more dynamic. And I think, um, uh, branding as a, as an exercise in any business, it’s a, it’s a great marketing opportunity because it’s almost like. You know, like when you’re starting a new business, when you there, like I say, a new gym doing a big open week, and then you can like really put money on it and do the whole marketing round it. And it’s like, you just, you’re just waving that hand in the marketing. Hey, we are, he, we are now looking brand new. Come and see us again. Or if you haven’t come and see us now, because like check us out, you know, we’ve got a whole new, new logo and it’s just like, it just gives you an opportunity to, to have something more, something new, something new, exciting.
Matt Alderton: Well, they do say like Subway used to say, if you put up new signs around your shop, you’ll get about a 10 to 20% lift in sales. So if you spend. $20,000 bucks in redoing your shop you’ll get 10 to 20% growth in your business. Uh, like that’s the impact that you’ll get off the back of that. And that’s not even rebranding, but it’s just about, you know, changing the look of what you’re, w w what people see when they look at your business and with a rebrand for your business.
That’s, you know, the same thing, you know, Subways rebranded. Um, a couple of times since I was a franchisee, Um, and I was a franchisee for almost 15 years, so there was two fairly significant rebrands in that process there. And I know that, um, for BX, that was a really important step for us as well. It was almost like our coming of age, I think as well. This has been a very big year for BX. Um, you know, we’ve had, you know, 300% growth basically over the past 12 months. Uh, and, uh, you know, so where we are now compared to where we were is a totally different business. Um, and I think we just needed a fresh face for that as well. Sorry. Yeah. I’m glad you like it. Vit Muller: It’s good. I definitely do. Um, Matt, what do you wish you had known when you, when you started your business, when you started with BX? Matt Alderton: Wow.
When I started BX, um, how long it was going to take? Well, I thought I, um, and how it was harder than I originally thought, um, events. Yeah, there’s lots of hot businesses and filling rooms is a hard gig. Uh, and Vit Muller: that’s, that’s a good one because I actually thought about that the other day. I’m like, hang on. How did he start it? Because I mean, it’s a network, but how do you start in it for, do you like go to one coffee shop? But if a couple of business owners and have a giggle, Matt Alderton: basically you go and it’s, you know, you’ve got to get your first Corum and then go from there and, uh, and build. And, um, so we launched nine groups. Um, we kicked off with nine groups and, and built from there. And I think that we had a big vision for it, but it’s, it is it’s, you’re filling rooms and it’s OK to, um, you know, to make mistakes, but you want to minimize the mistakes and, and, and, you know, multiply the successes and you want to do it fairly fast, but it’s still, I would have thought that we would have been here maybe 18 months ago.
Um, but in saying that at least I know that, um, for every competitor out there that, um, is thinking about doing it, it is also just as hard to get started. Um, and I’ve seen competitor in the past five years, I’ve seen competitors come and go and, um, you know, that’s, that’s a good thing that if I’m in an industry that’s hard to get started in. Um, I’ve heard people say, you know, We might do our own local one and I’ve seen those come and go as well. It just isn’t as easy as people think. And, um, you know, if you’re in a business and an industry, that’s got a hard entry point, um, and a hard growth point for people, then that is a good thing.
Um, But it’s certainly taught me that BX is that’s, that’s been the reality for me as well. And it’s, you know, we’ve, we’ve invested, um, you know, hundreds of thousands of dollars over over the years and then some, um, to build the business, um, and like there’s. You’ve got to be able to have that and to work with that and to be able, prepared to invest that and the time and the effort and the energy and the time away from your family. Um, and you know, I mentioned a wife and three kids. They’re a big factor in how I try and run my business as well. Um, but you know, I said, I set myself up for success because when I had the retail and hospitality, they were 6:00 AM to midnight, seven days a week. Now I’m five days a week and I got my weekends back. So I’m looking pretty good about now. Vit Muller: I was going to ask actually, um, how do you balance that, you know, your, your business and family life? Well, you sort of, I guess already answered it.
Matt Alderton: It’s, it’s a funny one because I don’t believe there is a real balance in life. Well, balancing the day to day or week to week, I think balance in life. Um, I’ll know I’ll work really hard now. Um, and then I’ll take a really good holiday, um, where I can switch off and I can be a hundred percent, uh, with my family. Um, you know, we, we take, you know, a four week road trip every year and we go overseas and stuff like that to be able to do that, um, has it’s balance.
But you need to, you know, also if I’m going to be away, you know, all week then on the weekend, I’m a hundred percent focused on, on the family. But if, you know, if I’m in and around the house and I can do a few pickups and engage with the kids and stuff like that, I can bounce that out as well. So you just, you’ve got to make it work. Um, but you’ve got to have the priority with you in the focus on what’s important and the family is important. Vit Muller: Hmm. Uh, one more, um, question with back to BX. One thing that, um, I was fairly impressed with was when I, when I joined the leadership team and became the experience officer, when I went to the meeting at Tim’s house and he started showing me all these spreadsheets and I’m like, where’s this from? Oh, that’s Matt. That’s Matt. So you’re a bit of a left brain or aren’t you? Matt Alderton: Well, surprisingly I am right brain. Vit Muller: Right.
Matt Alderton: And this is one thing I’ve told myself in business that you actually don’t get the luxury of just being what you are, you have to push. Um, so I, I knew that statistics and figures and understanding the numbers and your business are paramount to success. Um, so I’ve learned to like, and, and to, to understand and to take value from the numbers. Um, but I’m a high, um, high right.
Brain creative person. So, so it’s interesting that you say that and people would say, Oh, Matt, like, he’s pretty anal, his attention to detail and that kind of stuff. And, um, Uh, it makes me laugh cause I’m not, I’m a DI. So I’m a, um, um, very direct person. Um, and I’m an I as well. So I’m on the, on the DISC profile I’m , I’m the opposite to C which is the detail oriented. Um, and I’m a right brain person.
So it’s interesting that that perspective, uh, which just goes to show you though. The discipline that you have to have a small business, you don’t get the luxury of just going well, that’s just who I am. I’m not going to worry about the numbers. You have to be, uh, um, focused on it. And, um, but I do have good people that helped me put it all together. Um, and I believe that, um, it’s always better if it’s got pretty pictures and graphs to go with it as well. So that’s the right brain in me, Vit Muller: uh, I gotta, I gotta say, I mean, uh, so I’m like, wow, that’s, that’s a very detailed, tracking, you know, all the way to tracking attendance and age group and everything.
Wow. That’s but I guess that’s what it takes. Like I said, that’s you got to, you got to keep an eye on every group and, and, and, and, and, and also that helps with your leadership then, because then you can, uh, pick up on those areas where they need further, further help, forther leadership and navigation. Matt Alderton: Absolutely. Vit Muller: Well, look, we’re at the end of the show. It’s been amazing to have you on the show today. Um, for anybody listening out there, whether you’re in Australia or international, because this is about to, you know, continue growing international.
If you want to get involved with, uh, BX and networking, I’m going to put a link in the show notes, but, um, Matt, where can people find you? Any, any extra things you’d like to add? Matt Alderton: Uh, look my personal a website is mattalderton.com.au or you can get a BX networking.com.au as well, which is our two main websites. Um, you can get me at, @mattalderton on Facebook as well. So, um, fi you’ll find me. Yeah, Google me. I come up every week. So if you Google ‘Matt Alderton’ or BX networking, um, you’ll get a million hits and you’ll, uh, you’ll be able to track us down there. Um, but, uh, yeah, join us for a BX Online, there is, um, complimentary guest passes, um, for any of our guests to come along and check it out for the first time.
So we’d love to see you there. Um, and, uh, yeah, we’d really appreciate, uh, you know, we really appreciate your time this afternoon listening in. So, uh, thanks for having us Vit. Thanks, Matt great, having you on the show, mate. Cheers, see ya! Vit Muller: By! Thank you for listening. Uh, you just listened to it. Another great interview on the sexist in spot podcast.
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