This week on Winning In Business, Angus Pryor the Practice Growth Specialist will be sharing with you the first part of someone has to be the most expensive, why not make it you with Andrew Griffiths.
Someone has to be the most expensive. Why not you?
Angus: Very, very nice to be here, Angus, and hello to everyone who’s tuning in. All right. Now, let me tell you a little bit about Andrew. I started with his very provocative title, because the fact is, Andrew has just released that book, which I might add, I just finished reading in the last week or two. Brilliant book. We’re going to talk about that today. But for you and your business career, Andrew, that book is just scratching the surface. This is book number 14 for you, is that right?
Andrew: It is, yeah.
Angus: You’re a serial author. A serial business owner. And spoken, I think I’m right, 750 times in front of an audience all over the world?
Andrew: Yeah, yep. It’s been a busy few years.
Angus: I’ll bet. I was going to say, this makes you about 1,000 years old.
Andrew: And some days I feel like it. So yeah, that’s about right.
Angus: Let’s talk a little bit about your background ’cause your own story is quite extraordinary. One of the things that you said that definitely tugs at the heart strings for me is from a very early age, you’re an orphan, you literally don’t know your date of birth, is that correct?
Andrew: That’s right, yeah. Yep, my parents abandoned myself and my sister. I was six months old and she was 18 months old and that was, we were born in Melbourne and we ended up, they actually left us with an elderly lady and they disappeared. And we ended up, that old lady ended up looking after us for 10 years before, over in Perth this was. For some reason we moved over there. We don’t really know, before the welfare got involved. And then we became wards of the state and in and out of a few institutions and different families and all that kind of stuff. So yeah, a bit of challenging start.
Angus: Wow. So there’s hope for all of us, no matter what our background is. There’s the opportunity for building from that. Now, if we were to fast forward, and we could spend a long time for those early 18 years, but I don’t know if it was your first business, because I think you’re doing a paper route at one point, but then you ended up buying a surf shop at 18. Is this true?
Andrew: It was a dive shop actually.
Angus: A dive shop, I beg your pardon.
Andrew: No, that’s all right. I did. I’d flunked out of uni. And I had this desire to become a marine biologist in Townsville. I went up there and studied and it didn’t really work for me. And I ended up back down and living in Sydney. And I got a part-time job in a dive shop and I had a fascination with the water and diving.
Then I bought a dive shop in the wonderful kind of 80s when you could walk into a bank with no relatives, no security, no anything, and walk out with a check to buy a business. It wasn’t huge. I think I bought it for 25,000 or something. But as an 18-year-old, that was a big, I hadn’t really seen that much money. And I think my interest rates were like 1000% as well. It was just one of those bizarre things. But I bought the business with absolutely no idea how to run a business.
Angus: Someone does have to be the most expensive. Why not make it you? What’s the case for being the most expensive?
Andrew: I think an interesting part about this, and this is a book, a bit of background about this book as well I think too, Angus, this is not a book that I wrote this year. Well, actually that is a lie. I did write it this year, but it’s a book that I’ve been working on for probably about 10 to 15 years. And I’ve written many books in the meantime, but this is one topic that’s come up time and time again.
A lot of my work these days, yes, it’s travelling overseas. I work with people at the European Union, do workshops, series throughout England and Europe and stuff like that. In America I do different stuff. And I meet a lot of business owners from a lot of different industries, and I get to see what’s working, what’s not, what are their problems, what are their challenges?
And one that I have encountered consistently over all the time that I’ve been in business, and all the work that I do now is this price-driven business. And a business model where people have either choosing their pricing based on what they think their customers can afford to pay. Or it’s like a sense of what everyone else is charging. That’s what we’re going to charge, or a little bit less or whatever it is. A price-driven model.
And what I realised in talking to people and as a coach, I’m looking at numbers of my clients and I’m kind of going, if you were fully booked, you couldn’t make money. And you go, no. And I am honestly say, I’ve worked with businesses where if they, every available time slot they were booked out, they would not make a profit because they just don’t know their numbers. They’re undercharging for what they do.
So I see this price-driven approach based on the fact of, I think they can afford to pay, or that’s what everyone else is paying. And what we end up with are these businesses that are really price-driven. And a problem with a price-driven business or a cheap price-driven business is you attract cheap customers. And cheap customers lack loyalty because there’s always someone else who’s cheaper. There’s always someone who’s cheaper.
Angus: It’s a race to the bottom.
Andrew: Race to the bottom. It’s a term we’ve all heard. They also recommend their other cheap friends to come to your business. Before you know it, you’ve got a business that’s entirely built of cheap, people that want cheap, expect cheap that will resist any price change. And your business is not making the profit it needs to make, which makes it vulnerable.
Now we’ve just been through or we’re in the midst of really, I guess, the coronavirus. But if I go back to other crises, I go back to the GFC, even Y2K, what was going to happen, Gulf War One, Gulf War Two, whatever they are. The first thing that happens when the economy kind of hiccups is all of those marginal businesses go bust ’cause they just have no fat. There’s no profitability. Their cheap clients stop coming anyway ’cause they’re the same. They tend to go bust quickly or they stop spending.
And I realised more and more, I saw these other businesses that were surviving these ups and downs, that were going through it. And I started to do a lot of work around and with organisations small and large that were actually quite future-proofed because I was amazed at how many I would see go broke the minute there was a hiccup and go, well, that company, how has it lasted 20, 30 years to go through this stuff?
They’re the most expensive. Because their business model was one that was profitable, that they were substantial, they had built a business of substance. And that’s a big thing for me because they attracted quality clients. They got paid really well for what they did.
Angus: The other thing, you speak a heck of a lot about mindset in this book. There is a bunch of dentists going, but Angus, we need to provide affordable dental care to the community. But here’s a thing, if you go broke, I would say, who are you helping ultimately in that situation?
Andrew: I agree. And I love that. I admire anyone who out there is saying, look, we want to have that altruistic kind of approach as well to make sure that we’re helping out, but there are many ways to do that. And one of the things that I’m going to say is, I adopt this principle in my business. I live by, if someone’s got to be the most expensive, that might as well be me, in all that I do.
What that gives me though, is a much more robust business. I can give a whole pile more to supporting charities through either my time, my skills or writing out checks, whatever it might be, or being endorsing it, because my business is solid. And your point is right. If every time there’s a hiccup, we get into financial grief in our business and we got a panic.
If we are at least charging what we’re worth, there’s kind of three outcomes I talk about in this book. One is you do nothing because it’s too hard to change. One is you at least start to put your rates up and you start to charge accordingly. Or there’s the third option is that you actually do become the most expensive and the best at what you do.
Again, what that tends to bring, I guess, is the way to lead, that point of differentiation in your business, your marketing, again, becomes done for you, your ability to map out a better and stronger future. And all of that kind of stuff really does become a little bit easier.