Business Owners' Wisdom. Brett Kelly
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I wish I could tell you. I just cannot remember. Whatever we paid, it was a great decision.
BK: I’m wondering how long it took to pay back?
BB: I remember back then I thought, ‘If I could make $20 000, life would be wonderful. My own business and $20 000! I remember, once we built that store up, in that year, I made $80 000.
BK: How much was a house worth at that time?
BB: To buy a house back then, thirty-two years ago, about $80 000.
BK: That’s a huge achievement, earning enough to buy a house in the town you’ve grown up in, in a couple of years.
BB: Can you imagine? I’m a country boy. I’m as excited as. But, forget the money for the moment, we achieved that by paying attention to the customers. That’s all I’ve ever done. It’s, ‘What do they need? What do they want? What are they likely to want? How can I get it? How can I stay in stock?’ It was pretty simple in principle. ‘How do I start employing a couple of people? How do I get them to pay attention to the customers?’
In those days, it was simple. Look them in the eye, walk up to them, and say,‘Hi!’ I had such a ball working in that store. During the day I’d work on my own and, if I needed to go to the toilet, I had such good relationships with customers that they would walk in and I’d say, ‘Hey! Nice to see you again. Would you mind the store while I dash off to the toilet?’ I think about the things that I did back then, it was–
BK: Crazy.
BB: But it was great fun. That’s the sort of rapport I had. I was working very hard, but it didn’t feel like work. As a matter of fact, from then on, it’s never really been work, to be honest. It’s never really been work for me. I actually enjoy most of it.So that was the second store.
‘I really enjoyed it. I discovered that customer service was somethingthat was very special if you delivered it properly.’
BK: Did it start to pay out some of the problems in the first store or was it supporting it?
BB: It was supporting it. It was a three-year lease that we took on that Pakenham store and the day the lease came around–
BK: Gone?
BB: Gone. It never made a cent. To put it in perspective, back then, 7-inch singles were $1.99. I remember ringing Debbie one night and asking, ‘How did we go today?’ and she said, ‘We’re going well.’ The total takings for the day were $3.98.That sticks in my mind thirty-two years later. Can you imagine that call? We were in trouble, we weren’t making any money.
But it was true, it was a bad location. It’s laughable. Those one or two stores eventually grew to more than three hundred stores. At our peak, we had Sanity, we had HMV in Australia, we had the Virgin stores in Australia and, essentially, more than one in three records were being bought through one of our stores.And even twenty-five years later, we never, ever, had a store in Pakenham. And Pakenham had grown as a town–
BK: So, it had been marked as never to be forgotten!
BB: Well, no, it wasn’t, because I wouldn’t put one in there. It was just that we were twenty-five years ahead.
BK: There was no market even twenty-five years later?
BB: Yes. Two green guys out of school thought that you’d just open up a store and it would work–
BK: How important is location to retail?
BB: Well, it was my very first, very early lesson – don’t put a store in a town that can’t support it. I put the store in an arcade, which is even worse. Only about three people walked down it every day. But it did teach us a number of good things. Location is very important.
BK: So you’ve taken the step from that one store, you get to the next store.your takings go from $2 000 to $15 000 primarily around service, around interest in the customer.
BB: Back then, it was all about service, paying attention to the customer. We certainly learned a lot more about systems and processes and structures in order to grow, but I’ve never lost those lessons. It’s about the customer – always.
BK: What are the things that you do to know your customer better?
BB: I think there are two parts to that, particularly if we fast-forward to where we are today. One is, you’ve got to stay close to your customer. Now, I have a huge, deep fear that my life that’s become so–
BK: Not average.
BB: Not average. I was born in the country. I’ve always enjoyed people. I enjoy watching people. Wondering what they’re going to do, what they should do, why they do what they do. You’ve got to stay connected with your customers. Today, I still think it’s vitally important. Which is why I think I worry about my life, about moving to a place where I lose touch with what is normal.
We’ve got to make sure we keep pushing that in the business, making sure that little things are done. All the CEOs of all the brands today are required to go and do store visits on a regular, continuous basis. Part of that is to connect with the customer, to connect with the team, to make sure that we’re seeing things where they’re happening, customer touch points.
More and more today, though, it is becoming data-driven. You can actually get a lot of indications when you’ve got hundreds of stores, as we do. There’s a lot of data that gives you trends, gives you directions, what’s happening here, why that is selling, why that isn’t selling. The product teams as well as the operations teams have to pay attention to that. That’s important, and they do.
There is also a part of me still today that enjoys creating new businesses. That’s just, in a bigger sense, in the same vein as creating new product. I like to create new businesses. You know, what are people going to want, what’s happening out there that’s not being delivered that people would want? Some people call that entrepreneurship. I just call it – I’m a retailer. At the end of the day, business is mostly about meeting a need. When that need shifts, you’ve got to shift with it.And that’s really what’s happened.
‘I like to create new businesses. You know, what are people going to want, what’s happening out there that’s not being delivered that people would want?’
BK: How did you build up from two stores to three hundred?
BB: Well, that is a very good question. I got to the fifth store and I was asking myself the same question. I was one stressed-out twenty-four-year-old. I shouldn’t admit that, but I was. I had no formal training in any of this and, all of a sudden, I was trying to figure out how to pay people and how to make sure that I was paying taxes and doing the right thing.
There were a couple of things that I did. I remember the most scary thing involved my good friend, Craig Kimberley, now of Just Group, or Just Jeans back then. He was the first guy to really nail the specialist experience. He had about sixty stores and back then, he was just–
BK: The dude!
BB: He was the king. So I did probably one of the smartest things I’ve done, as it turns out. I was flat out running