The early days of starting my juice bar, Boost, were insane. Opening a store a week in a country like Australia that is the size of the whole of Europe had some challenges! From Day One to four years in, we had opened 100 stores.
But the biggest challenge I had was finding the right financial accountant. I did eventually make a fantastic appointment, but I made some very painful mistakes along the way. This is how we navigated that journey and ultimately gained surprising value from some very expensive stuff-ups!
Getting hands-on with numbers
When I started, I didn’t know the difference between debit and credit, but I did know that to be successful you need more income than expenses. Simple, right? (The number of businesses that do not get this one right is A LOT). I did my accounts at the start, and I admit the so-called accounts looked more like a cash book but it was the start of my education on doing business.
This was the year 2000 and Australia had just introduced the GST of 10 percent on some products but not on juice (just to make my life as complicated as possible). I got an expert in Quickbooks to show me how to do accounts and off I went, creating a chart of accounts and actually doing the books that looked something like an accountant would do.
I must say, it’s the best thing I did as I really got to understand how my business ticks. Handling every invoice and paying every person and creating monthly profit and losses taught me things about my business that to this day I find useful. But there has to be a time when you start handing over areas of the business so that you can grow the business.
Mistake #1: Ignore the track record
The mistake, however, was my first finance hire. She had long dyed blonde hair and drove a bright blue fancy, sports car. Now I have nothing against anyone dying their hair (I do it; and my best corporate councillor ever had streaks of purple hair) or driving sports cars, but what I neglected to take note of was where she had come from. She’d just left a business that had gone under, and I foolishly thought this was a positive, as she would have learnt what not to do.
She made an absolute mess of the accounts. She wasn’t a bad person, and she didn’t do it deliberately; she was trying hard. But the business was growing so quickly that she just got herself into a mess and then tried to cover it up. She was with me just on a year, but it cost me more than $100,000 with an accounting firm to try and fix. This was at a time when $100,000 was pretty much my whole bank account.
Mistake #2: Outsource = solution
Hiring the account firm was another mistake, as all they did was crank up chargeable time and not achieve any outcome other than now having no money in my bank. I was still in the same position. So I have gone from doing the accounts myself and knowing where every dollar went to running my business in the dark. The mistake here was simply trusting that these people knew what they were doing and that they could help me as they said they could. I assumed that because they were a professional top-tier accounting firm that they knew more than me about the business. A big learning curve in trusting so-called professionals.
Mistake #3: Expensive = worth it?
I then met this guy who was seriously expensive and a CFO of a major firm. Finally all my prayers had been answered, and I could grow the business and have someone senior to get the accounting platform of the business right. This was mistake number three: he was a great talker, but I should have known there was a problem when he mentioned that businesses do not need to do bank reconciliations. (For the record, if ANYONE ever tells you this, fire them).
He had zero care factor and during his time, he installed a new accounting system, he never did any overtime and barely worked when there. He wanted a nice cushy job in a big corporate. After a heated confrontation about creating an annual budget for the business (which personally I thought was the job of a CFO), he told me he was too busy. I thought I would show him and created a 102-page fully integrated Excel budget. I had never created a budget or even used Excel before, but I was making a point.
I know what you’re thinking: Who was winning here? He was happy at the gym whilst I paid him a fortune and I was working to 3 a.m. every night getting the budget ready… The budget was presented on time, accurate, and highly detailed. I fired the CFO and started again.
Getting it right
I FINALLY got a young enthusiastic female financial controller. Again, I know what you are thinking: How on earth is this the best mistake you have ever made? What I learnt about the business during this time of looking at every expense line and pulling the business apart and putting it back together enabled me to understand the DNA of the business like never before. This time taught me more about the business than anything I have done before and since. We cut $2 million of the expense line, and it was a better business because of it. She helped create a solid platform for which we could grow.
I thought I was far too busy growing the business to stop and really look at the foundations of the business, which is its numbers and how the business actually ticks. The lesson was learnt due to my stubborn streak of “I will show him,” which was the wrong motivation, but the right outcome.
The accountants who took me for a ride taught me that just because accountants and lawyers charge $400 per hour doesn’t mean they are any good, and they definitely do not know my business as well as I do. From that time onward, I never accepted the status quo or what the so-called professionals said was gospel. I am sure that I am not my accountant nor lawyer’s favourite client. In fact I heard a year ago that in the early days the comment was that, “Janine may look like a hippy, but she is tough as a nut.” I took it as a compliment, even though I’m sure that wasn’t the intention!
The early learnings of having the wrong people in the wrong positions and taking far too long to make the change gave me an unexpected gift – the foundation of my business is solid.
Janine Allis is the founder of Boost, part of Retail Zoo. The Retail Zoo stable of brands includes Boost Juice Australia, Boost Juice International, Salsa’s Fresh Mex and Cibo Espresso