Small businesses are the backbone of the Australian economy, accounting for 90 per cent of all operating businesses in the nation. These numbers are only growing. So how can you make the leap from working for someone to working for yourself?
Four Pillars Gin’s Stuart Gregor explains the ins and outs of starting your own small business, and what you need to take into account when you make the leap.
The start of the journey
We started Four Pillars for a simple reason, we wanted to make an outstanding Australian craft spirit – and we wanted it to be gin, because quite frankly, we drank a lot of gin . . We opened the distillery in the Yarra Valley, about an hour out of Melbourne and released our first gin almost four years ago, in late 2013. Ever since we bottled that first batch of gin we’ve been experiencing rapid growth; it has been quite the journey, and we wouldn’t have it any other way.
We wanted to make a gin that was uniquely Australian – or “modern Australian” as we called it. We combined Mediterranean citrus and Asian spice with indigenous Aussie botanicals in a way that no one had tasted in a gin before. In a pretty short period of time we built a strong following within the marketplace, and we worked hard to help change the common perception of what gin could be. And we won a few really big international awards in our first year and that really helped put us on the map – a Double Gold Medal at the World Spirits Competition in San Francisco in our first six months was way more than we could ever have hoped.
There was a lot on the line not only for me, but also my fellow founders at Four Pillars. We all chipped in our own money, and re-mortgaged our houses. If you are going to start a business like this, and be serious about it, you really have no choice, you have to go all in financially and in terms of your commitment. It’s incredibly expensive to get started up in this business, and there was a lot on the line. However, we completely believed in our product and our team, and we wanted to show that our little distillery in the Yarra Valley could make world class gin. It was always our plan to take it onto the world stage after establishing ourselves in Australia.
Learning the nuts and bolts
We are proud with what we’ve done with Four Pillars in a relatively short space of time, but I can’t emphasise enough the importance of learning your business from the ground up. Some of our most important lessons came in the very early days of the business.
Obviously you need to have a great product, and invest your time in making it as good as it can be, but it’s crucial to get across the numbers. Ask yourself the difficult questions. Have you thought about how much tax you are going to pay – every week! Australian spirits are nearly the most heavily taxed in the world, and the ATO demands excise payments every week – so cashflow management becomes second nature. How will you manage your expenses? Can you read and more importantly, understand, a cash flow statement? If you aren’t sure about any of these things, my advice is always to go back to the drawing board, and study those numbers closely.
The International Marketplace
Four Pillars is now distributed in 15 markets across the world, including the UK, USA, Hong Kong, Singapore, Thailand, Vietnam, Denmark and New Zealand. Our experiences of growing our business internationally has been a steep learning curve. When you go into the international marketplace it is vital to match with the correct distributors and build the right relationships to give your product the best opportunity to flourish. We certainly missed some steps along the way as we were growing, but it’s all about learning from your experiences.
In our experience, Australia was an easily understood and essential market for our product. It was relatively simple, if you had a great product and a great story, you just need to go out in the marketplace and sell, sell, sell. Obviously internationally, this isn’t necessarily the same premise. There are cultural considerations to understand around alcohol, and networks to build. It is critical to be connected with the right people internationally, who can tell you exactly how to go about business and can point you in the direction of trusted distributors.
Managing our cash flow
Business is busy for us at Four Pillars, and we use an American Express Card to track all of our credit. In a start-up business like ours, you need to invest in a lot of expensive assets, such as the stills, bottling facilities, infrastructure, and you need as much credit as you can get. You also need to keep a tight rein over all of your expenditure, and have a method of tracking it. When you start any business, you have to cost everything out, and make sure that you have a growth strategy. Throughout our journey, we have been able to track everything easily, and will continue to do so. We now are operating in a lot of different countries and our financial facilities give us great flexibility to operate abroad. We have also found the points from our American Express Cards have been a great benefit for upgrading flights when we need to travel for longer distances for business. Our business demands flexibility and The American Express Business Explorer Credit Card gives us a low interest rate on purchases whilst enhancing our rewards potential for Four Pillars.
Regardless of what industry you are in, whether it is making a great Aussie gin like us, or almost anything else, the early years can be a challenge. They can be tough financially, when you are having to work a consistent cash flow and are working through the night to make the best possible product that will sell not only in Australia, but perhaps abroad. The learning experiences that we have gone through in the early years have provided a strong foundation for our future growth. We are excited about the possibilities of growing our brand in the markets we’re currently in, as well as opening new markets in mainland Europe, throughout the Americas and more deeply into Asia, our backyard.
The American Express Business Explorer Grant in partnership with MySmallBusiness is supported by the American Express Business ExplorerTM Credit Card, which offers small businesses greater rewards and improved financial management of their spending. It can help small business owners get back more from the work they put into their business. The combination of high rewards, competitive interest rate and premium travel and business benefits is suitable for businesses looking to grow or improve how they do business. Visit American Express BusinessTMExplorer for more information.