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Edition 367 – Passionately Boutique

A couple of weeks back, CPA Australia invited me to speak again, this time in Launceston for the Tasmanian Public Practice Symposium. What I love about these events is to have the opportunity to talk with accountants to small and family business, not only about their clients, but their own businesses and what they’re doing to value add to their own service offer.

A couple of fun facts from my time away:

  1. When I asked a room of 40 people, how many of them were Medibank Private policyholders, not a single one of them raised their hand. They mostly prefer a Tasmanian provider, St Luke’s.
  2. The largest foreign ownership in Tasmania comes from….Canada. Most people would think China, however it is the large Canadian pension funds that are investing in Tasmanian businesses.
  3. Within 50 years, Tasmania’s contribution to the Australian economy will be larger than South Australia’s. Currently, the population ratio is greater than 3:1 in SA’s favour.
  4. The power of the Tasmanian brand of clean air, pure water and premium products is helping to boost Tasmanian exports to the world to the point where, sadly, ripoffs from South America are mimicking Tasmanian products – right down to copying their branding.

As my conversations with various people took place throughout the day, what sat with me were three things:

  1. They’re all proudly Tasmanian, inside the Federation of Australia.
  2. They’re well and truly punching above their weight.
  3. Their focus on being boutique, particularly in relation to agriculture, aquaculture and innovation, helps to drive international interest in Tasmanian products.

So many business owners want to build bigger businesses in the belief that it will lead to bigger clients, bigger projects and a greater ability to attract more talented staff.

Yet, in Tasmania, their focus on being boutique and building businesses that focus on the premium end of the market means that profitable businesses are contributing to the phenomenal growth in the exports of Tasmanian products and services. The fact that Tasmania will have a greater contribution to the national economy, in the next half century, than South Australia, on a much smaller population, points exactly to the economic value associated with being boutique and seeking out that premium end of the market.

Don’t get me wrong, I understand that businesses that are generalists are also profitable. However, if you compared their revenues and profit margins to businesses that are focussed on building a premium product or service, my guess is that you’d see some glaring differences, not only in the numbers, but also in:

  1. The levels of innovation.
  2. The focus of the owners of the business on the future, not just today.
  3. The pride of the workforce about what they’re achieving.
  4. The sense of order inside the business each and every day.
  5. The level of knowledge retained by and imparted by your team.

Bigger isn’t always better. In actual fact, more often than not, boutique not only generates higher profits, but greater levels of satisfaction to the business owner. It’s an interesting point to reflect on.

This Week’s Tip

“How you position your business in the market is critical to not only its financial success,
but to the longevity of your brand.”