Australia
03 December 2007
THERE are many qualities necessary to be a successful entrepreneur: passion, patience, determination, a willingness to make sacrifices and belief in your idea. Michael Paul has all of them in spades.
Had he listened to conventional wisdom when hawking his idea around in the early 1990s, he would have thrown in the towel right then.
But, 14 years on, he's boss of a multi-million dollar, award-winning, Australian-based empire that is about to take on the world.
Not bad for what is effectively a corporate-style mailing-room for the general public.
Pack & Send's formula is simple: it takes awkwardly-shaped, valuable or delicate items that are, frankly, a pain in the neck to send anywhere, and ends all the hassle.
It packs them professionally, completing any necessary paperwork, then ships them anywhere in the world.
The business was already thriving when eBay exploded onto the world scene, which has been a godsend for a postage company specialising in difficult shapes.
Paul said shipments of goods purchased on eBay account for about a third of Pack & Send's business.
But it took him many years to get to the position where he was able to capitalise on eBay's emergence. It was the culmination of a working life spent sending parcels.
Paul's career began in a post room at Richardson Merrell, the pharmaceuticals company, where he grappled with the somewhat unchallenging world of postage and packing - and learned a little about logistics.
He progressed to management and logistics roles within RM. A series of similar roles followed at other firms.
This helped him understand the basics of logistical infrastructure and transport, knowledge that would later become vital.
But it was while a freelance logistics consultant in the early 1990s that he had his eureka moment: how to send an unpacked computer from Sydney toMelbourne.
It doesn't sound like rocket science, but Paul found it was a nightmare.
"I couldn't find appropriate packing materials, or a carrier that would pick it up," he said.
"I had to do all the paperwork and find a way of getting it packaged properly. It turned out to be a two-day exercise. It was crazy.
"Why wasn't there a place I could go and just drop it off and let them do all the work? It seemed such a blatant gap in the market."
To find out what could be on offer, he travelled to America.
"They did have companies that packed and posted items for you, but not as well as I planned on doing it, so I was absolutely determined to come back to Australia and make a go of it," Paul said.
He then set about meeting potential freight partners - and immediately hit resistance.
"There was a lot of scepticism. I remember one senior executive in particular," Paul said.
"He obviously thought I was a nice bloke, and he took me aside and said: 'Michael, Australians will not pay for a convenient packing service'.
"He said he'd been in the industry for 30 years and that there were 'limits to what you can do in this market'.
"Well, I just didn't agree with that at all. In fact, I thought the opposite. There are no limits to what can be done. That made me more determined than ever."
Paul was so convinced by his vision he sold his house, moved in with his in-laws, and borrowed from family to scrape together enough money to open his first Pack & Send store in Parramatta in 1993.
On his first day of business, he made one sale - a cardboard box for $2.90.
"I've still got the receipt from that day to remind me how far we've come, and never to lose faith," Paul said.
It wasn't exactly a flying start. He and his wife, Susan, "wore out many pairs of shoes" pounding the pavements, knocking on business doors, explaining their proposition, and putting flyers in letterboxes.
It was hard work, but the idea took off. Within a year, the store was turning over $200,000 and expansion beckoned.
"The store was doing really well, but I always had a vision to take this right across the country. It was never going to stop at one outlet," Paul said.
"We knew we had a fantastic business model with high gross-profit margins. The challenge was to replicate it on a national scale - and that's when we thought about franchising.
"This type of business is all about personal service and going that extra mile. That's our real selling point above and beyond being an essential service.
"It's difficult to get an employee to go that extra mile for their customers. That's why franchising - effectively giving them their own business - really works because then they have the right incentives."
Their first franchisee approached them in 1994 - the regional sales manager for Startrak, at Crows Nest. The outlet is still there today.
Then followed almost 10 years of investment and more investment in the company's infrastructure.
This included legal work on contracts and franchisee agreements, understanding IT systems, hiring workers for field visits - and developing a national marketing campaign and a buying department to source and negotiate supplies for the franchises.
This required a huge amount of funding that Paul didn't have.
However, the company continued to grow and, in 1999, when it had 20 franchised stores, two pivotal events took place.
First, Paul was approached by businessman Barry Smorgen, who shared Paul's enthusiasm.
He injected a significant sum of cash into the business, which paid for many essential infrastructure projects.
Then, later that year, eBay launched in Australia, and that changed the face of the business.
"Suddenly, we noticed a big change in consumer behaviour." Paul said. "People everywhere had awkward-shaped objects they needed to send around the world, and there we were, perfectly placed with a national network and well-thought out infrastructure.
"It was a godsend. It really kicked off about five years ago. I reckon eBay products probably account for about 30 per cent of our business today."
Today, a quarter of Pack & Send's franchisees own multiple outlets and some have made millions in their own right.
"It's wonderful to see," Paul said. "One couple worked very hard and borrowed to buy their first outlet, but now have three and also own the commercial premises. They are millionaires now."
And there will be more to come. Next year Paul embarks on his mission to open 1000 stores around the world.
He has started a master franchising operation in Britain, where he plans to open 300 stores in the next 10 years. New Zealand, Canada, Singapore, India, South Africa and Europe are also on the expansion agenda.
"We've trademarked the brand in 50 countries, so the sky's the limit," Paul said.
But what about Paul and his first million dollars?
"It was 2003 before we became debt-free, because we invested so much in the business and that required significant borrowing," Paul said.
"The first year we turned over $15m, which was about four years ago, was a great feeling. But to be honest, we're too busy to think about the money very often. What makes me much happier is the success of the business.
"This year, we won PricewaterhouseCoopers' Franchisor of the Year 2007, which was a fantastic achievement and made everybody so proud.
"That's the kind of thing that really matters."
Surely then, somebody who's worth a few million must have a few extravagances? Fast cars? Champagne? A boat, perhaps?
"I love birdwatching," Paul said. "And I bought myself a pair of $3000 binoculars. That'll do me.
"I was happy when we had nothing and I'm happy now. I don't see how having more money in the bank is going to make me happier."
NAME
Pack and Send
Founded: 1993
Staff: 200
Turnover: $30m plus
GOLDEN RULES
Visualise an exciting, big, imaginative vision focused on the customer
Avoid negative people; always stay positive - there really are no limits!
Work hard and put the hours in - only good can come from it
View your business like a seasoned long distance runner - focus on endurance rather than speed and pace yourself to finish strongly
Keep learning; believe in self-improvement - knowledge is a journey that never stops
Surround yourself with great people who are passionate about the vision
Source :
www.news.com.au
