SURCHARGES - DINING

We just spent $344 for the two of us for lunch and were charged an extra $3.78 surcharge for using a normal bank credit card - including that same surcharge charged on the tip!  This is a grubby little rip off for little dollar value.  Some financially challenged so called junior manager decided to penalise anyone who doesn't keep a bucket load of cash on them when dining - may I suggest no one!  Let me put that into perspective, this charge is the same as adding circa 50c to the cost of say a main course from $48 to $48.5 as we had this day.  It's a hidden charge designed to make the menu seem cheaper - except it doesn't.  My suggestion, join the real world and make people's experience seamless without reputation ruining nasty surprises.  Think the ramifications through instead of trying to grub a few cents over and above an expensive lunch.In our job we have eaten at hundreds of restaurants all over the world and rarely encounter such backward anti-customer charging.

BUSINESS BROKERS

Want to sell your business and be assured the people you entrust to that sale are both knowledgeable and professional?  Don’t we all.

A broker is merely an expensive intermediary between buyer and seller supporting non disclosure between the parties and by validating financial and legal information leading to negotiated contractual agreements.

Unfortunately there are many so called brokers who should be in some other sort of real estate because business broking requires a deft set of learned skills so as not to disadvantage either seller or buyer.  Beware the broker who devalues a business just so they can get a quick sale commission to support their own cashflow.  Indeed, there are international methods of calculating worth remembering that ‘worth’ is not a fire sale but a true and proven financial statement showing value.

Seek the broker who recognises they have a fiduciary duty and can prove education, knowledge and results because without all three they cannot provide valid advice.

Indeed, a business broker must by necessity provide financial [valuation] and legal [contractual] advice on all matters related to both selling and buying a business and, if that advice is flawed because of a lack of education [knowledge] or for whatever reason, both buyer and seller may be severely disadvantaged. 

Brokers charge and accept significant remuneration for a ‘professional service’ being far more than the cost of just lodging an advertisement on some website.  This differentiation is critical because it means a broker has a fiduciary duty to the seller or the person paying the fees to be honest and act in good faith in all dealings.

Buyer beware because there are many ‘brokers’ who pontificate at length about their ability to sell a business yet may not have a clue other than bluster. 

In simple terms a broker must be able to prove the following and if not keep looking for one who does:

1.       Education:  A broker is supposed to be an expert professional in business valuations etc and as such needs to have some sort of financial qualification to offer that advice; at the very least at diploma level but preferably at degree or even masters level.

2.       Experience:  Whilst experience is not as crucial as educated knowledge it is desirable for the broker to have transferred their educated knowledge into sales where both parties are happy;

3.       Industry knowledge:  As a well paid mediator/negotiator it is expected that the broker has extensive industry knowledge to be able to facilitate any sale without misrepresentations;

4.       Client base:  Has the broker a good enough reputation to be able to support clients wanting to sell and buy?;

5.       Working for you:  The obligation on the broker is to represent the seller as they are paying the commission.  It is not their role to act for both sides therefore no kickbacks;

6.       Not quick turnover fire sale:  It’s worth remembering that many brokers work their sales to maximise cash flow in the short term.  Therefore avoid those who devalue a proven valuation just to get a quick sale.  They win, you don’t – a $100k drop in sale price means you lose $100k whilst the broker may lose just $5k but get $20k in the pocket today;

7.       Valuation expertise:  This is the hub of the broker’s input and where they must prove expertise ‘in good faith’.    Ask the broker to explain common terms such as ‘risk based multipliers’ and ‘EBIT normalisation’ and ‘payback’ and ‘capitalised future earnings [Nett EBIT/ rate of return] * 100 +- adjustments’;

8.       Discretionary cash flow:  This is the total owners benefit from the business including lawful tax breaks, goods and services for private purposes etc;

9.       Mitigating factors:  These are the wow and risk factors influencing a sale such as consistent and verifiable profits and hours required to sustain profit and growth potential;

The most crucial figure is proven revenue [BAS *6] from which any professional broker can deduct linked expenses at ATO published rates and wages etal, add EBIT normalisation [this is why BAS expenses are not indicative] and apply a multiplier based on risk and/or calculate worth based on capitalised future earnings and/or by detailed analysis of P&L to get an estimate of worth.  Then it’s up to market acceptance factors.

This is their job and they get paid for doing it.  If they can’t, then find someone who can.

Myer

An open letter …

Mr Gary Hounsel CHAIR & Mr Nigel King CEO

Myer Holdings Ltd
PO Box 869J
Melbourne VIC 3001  Australia

CC:  Mr Solomon Lew - Premier Investments

Gentlemen,

As a bloke who grew up in Melbourne, was educated in Brighton, spent all my formative years in abject immaturity and wasted many many opportunities I should be the last person you listen to when it comes to your charge.  Indeed one of my burnt in memories was the Myer’s man delivering something for Mum the day JFK was shot.  The 22^nd of November 1963 was an important wake up call for the world.  In a couple of days it will be 55 years ago and we still haven’t learnt that respect and trust is a God given right.

I offer that rather banal insight into history because it helps define your store.  When Sidney Myer founded his department store it was inexorably linked to the person and, if I remember, that link followed through to Ken Myer before his death in Alaska.  A ‘family’ store where people connected with the ‘name’ despite not knowing them. 

Mum used to drag me along to shop at ‘Myers’, have lunch at ‘The Birdcage’ and have the days purchases either carried to a taxi or delivered to home.  The day two mink coats turned up at home was a watershed moment in understanding marital relations between one’s parents.  Myer’s had a soul and a true understanding of people and Mum was made to feel special.

Before forging into hospitality I spent too many years downsizing companies around the globe.  A bugger of a job made all the worse because it was my role to deal with the aftermath of bad board decisions which in turn necessitated disadvantaging too many people all through no fault of their own.  My memories are a bit vague but I seem to remember an imported CEO by the name of Dennis Eck totally missing the point that Myer [note – no ‘s’] was not Coles or Target where impersonal vertical marketing seemed at home but a caring ‘family’ company.  I also seem to remember Don Argus saved the day but I can’t be certain.  The point being that personality and ethos were removed and the business suffered.

Now it seems, personality has once again been removed and business is suffering albeit with Myer still in toxic denial mode.  Look at it from an objective viewpoint – untrained staff, rows of cheapish merchandise, staff who are impersonal and confused, a store undifferentiated [and all at once]and disassociated with their customer base.  The vision has either gone or been muddled to such an extent that customers are confused. For example, remember when the bargain basement was just run-outs and odd items?  I do but it seems the ‘bargain’ mentality has infected the whole store.  More confusion.  Now, it seems that the boxing day sale is a critical tool to bolster sales because people wait for it!  Low margins are the result.  Misery.

Feel free to tear this up right now if you like because I am going to offer an opinion.  In a couple of weeks time we are heading off to Scandinavia again for a month where we will eat in something approaching 100 restaurants researching and collecting ideas for our little bistro.  A bistro which already has multiple global awards yet we still very cognisant of continuing to source global trends, service and differentiating ideas.   

And, I believe that is the key – differentiation.  Let’s take Galeries Lafayette or Le Train Bleu [within Gare de Lyon] as examples in Paris both of which we have shopped and dined in many times and both of which offer a special experience yet both are flawed in many respects.  The point is that both have held their vision and communicated that vision and, as a result, do well despite the flaws.  Now look at your charge!!

The day we saw a dog fashion show at Galeries Lafayette or watched a waiter ‘strut’ a dozen bottles of Moet on a tray above his head at Le Train Bleu burned an image in our heads.  A positive image which overshadowed any complaints.

In my opinion you have 3 types of customers.  The so called upper middle class who want the finer things and experiences, the lower middle class who want to be seen and to be treated as though their elevated position is a natural state of play and all of us seeking a bargain.  This is a natural differentiation in the real world.

I opened this letter with comments about ‘respect and trust’ and this is what I remember most about Mum’s dealing with Myers’.  Because of Myer’s ability to make people feel special my mum, and thousands of others, spent an awful lot of money therein [see comment above on Mink].  But now Myer [no ‘s’] has turned into a jumble sale where no one feels special including I daresay the staff.

The upshot is that people [like me in a previous job] are forced to cut even more staff and amenities to save a bottom line.  Spiralling into misery! 

What should Myer[s] be known for?

McEwans had it with their Vision, ‘McEwans means a million things’ and Bunnings has it with lots of stuff and cheapest prices.  Both places where Eck would have felt comfortable with vertical marketing - but, not for Myer[s].

At the bottom, the bargain basement is a place where people can go and rabbit around looking for that ‘something’ to be bought on impulse.  Why?  Because bargains are not pre-planned.  See stuff, buy stuff.  Everyone likes to fossick.  This is not cheap imported for the purpose crap but real run outs, overstocks etc as anything else diminishes the image and is best left to Target etal.  A bargain is an item reduced to sell, not a cheap product brought in to mimic a real reduction!

In the middle I believe a huge albeit simple change is necessary to cater for modern ways of purchase.  Firstly, people want to try on or view something before purchase and secondly they want it pronto. Therefore there must be a try-on size range and then at purchase the staff member who must be able to say, ‘It’s on its way’ because as soon as the money has been accepted the message goes through to a store where it’s immediately dispatched and with a non-conditional return policy.  Indeed, there is also technology allowing people to see themselves with various garments on screen [?].  When I did my MBA in the 80’s I seem to remember a French knitwear company who started to knit the purchased garment as soon as the order was received and delivered same to the customer at the speed of light.  They were a forerunner indeed!  I think much better to sell say 1,000 lines of quality than 10,000 lines of rubbish with stacks of multiple sizes jammed into racks no one can see over.  Myer[s] did not offer rubbish but Myer does!!

At the top, people want an experience and providing that experience could be the vision and saving grace of Myer[s]!   Why not rekindle Sidney as the founder overseeing a new ethos where people are made to feel special and welcome in his emporium where the best is available, champagne bars abound, the ‘Birdcage’ makes a re-entry, the Mural hall has invited glamour events, dogs have fashion parades, chandeliers light the way, lots of upmarket accessories are on display, furniture is leather, staff are trained and plentiful and trust and respect are ingrained.  My Mum would have lived there because she was made to feel special and that is the image of Myer’s I remember in its halcyon days.

Lastly, this image must be created at the City store and then followed on elsewhere.  Why?  Because nowhere else has the history or has the Mural hall.  Vision and image go hand in hand.  Indeed, the ‘top level’ may only be available at the city store, the home of Sidney. Spooky, isn’t it.

Just a small example, the ‘Hopetoun Tea Rooms’ in the Block Arcade is immensely popular because they capture something of the past whereas their competition can only look on in envy.  Image and vision!

I have been and still am at the pointy end and the coalface of business in highly competitive industries [hospitality etal] and in the past have been stupid enough to delve into so called corporate rightsizing which is about as depressing a job as you can get.  These days we run a little bistro and consult globally when I believe we can add value.

My ‘opinions’ are not mere puff but based on too many years experience.  I really felt for Myers when Mr Eck was CEO because of the diminution of a Melbourne icon to foreign standards.  Likewise when the Mexican triumvirate hit Telstra.  Why do we allow this to happen?

A department store is an icon of the past, present and future because it allows many faces within a constructed ‘life’ ethos.  An ethos which saw Myer’s rise and rise and a now a lack of ethos which foreshadows misery and failure.

Education

I don’t understand the hoopla and the political infighting about people’s education.  This infighting gets involved in both diatribe and minutia at the expense of what we want and need as a country.

If we want the best country in the world in which to live and prosper then there is no choice, all education at the median level must be funded and available to all.  This is not arguable. No education means no future either for the individual or the country.   A simple and understandable life’s axiom.

Given that simple overarching thought then it is clear we need to provide that median level through taxes etc so that every person can revel in the truism, ‘learning is fun’.  No question.  We all benefit!

And, once we learn we question and we improve and invent and forge new ideas that change our collective world.  Wow!!

And, all from ingesting a desire to learn and do better.

This is so simple it’s a no brainer.

To do this each and ‘every’ kid including those with different requirements, needs to be funded the same dollars by the collective to be offered this opportunity to experience ‘learning is fun’ and to progress from primary through secondary and tertiary if they can without the burden of having to pay per lesson. 

Some parents will choose to upgrade their kid’s education and that is their choice and nothing to do with anyone else.  It is between them and their school of choice. Not everyone can afford private schools and those private schools and their students must not be discriminated against by those unable to afford the private schools whilst pontificating at length about the subjugation of their unalienable rights.  Not everything is available to everyone else we would all be driving Ferrari's and living in Toorak.

Still, the basic tenet is strong. 

Now, the rider – ‘there is no free lunch!’  After ‘we’ pay for someone’s education then it is up to them to give back say a year to Australia at nominal salaries after they finish their education to R&D on some project which will have impact on Australia’s future.  Imagine if we had 200 people who had just graduated working with Senator Button in the 80’s on his Sunrise Industries Plan – we could have led the world, but we didn’t and we don’t.

Another benefit is that this programme throws young people into the real world after education but by creating a buffer between being coddled and getting a job.

So, we ingest learning is fun, we support all our kids to fly, we help them move graciously to the cut and thrust and we build our ‘smart country’ at breakneck speed. 

Can’t be bad.

ZOMATO

We have owned and run a boutique restaurant in Fitzroy Melbourne called 'Mon Ami' for some 15 years, have been ranked within the top 2% of restaurants globally and are lucky enough to be full most of the time. 

With the rise and rise of everyone's capacity to post their opinions online there are now a plethora of sites which purport to just publish others comments without bias.  Unfortunately this is rarely the case where defamation is rife and so called 'algorithms' are advertised as perfect yet fail time after time.

Zomato is such a site. 

I have complained to Zomato without success with just the latest below:

Zomato,

In simple terms, you are attempting to separate restaurants on an overall spectrum [bell curve] by arbitrarily [in both senses – your use of unrestrained authority and on the basis or random thought] changing the ranking pursuant to the number of businesses on a ranking rather than independent reviewer scores even though even though the respective businesses may be vastly different.  This is a mathematical nonsense because you are not changing scores based on independent grades but based on your assessment without having been to each establishment.  For example you mathematically compare as equals say a pizza shop and a fine dining restaurant where the offerings are different as are the clients.  A dish which takes 2 days to prepare has nothing in common with a dish which takes 15 minutes, yet you ignore the reviewer and arbitrarily change their score . Undoubtedly, your issue is that you will have a lot of restaurants on 3.5/5 because people tend to vote around the mean.  Instead, separation should be based on a more extensive spectrum [maybe out of 100 in decimals from .1 to 10.0] and mathematically weighted by a number of parameters such as cuisine, service, ambience etc.  All of this without independent mathematical influence by Zomato.

It’s the reviewer which should determine scores, not Zomato.

In our case our score drops to 3.9 when the average of actual reviewers scores is circa 4.5 just because there are others on the same score.  Just common sense says look at the reviews and establish whether we sit at 3.9 or 4.5 [?].

If all this was just esoteric argument then it would be an interesting mathematical exercise but in part our business is affected by Zomato based on their changes.  If a potential clients tipping point is say 4.2 then we would be ignored despite past clients ranking us at 4.5.  This can cost us business and is most certainly inappropriately influenced by Zomato AND it misrepresents our business and is thus possibly unlawful.

In addition, we treasure both professional reviewers and blogging diners and take all comments seriously.  However, we do get annoyed when some disaffected keyboard warrior says nice things to us and ferrets off to anomalously write vitriol.  [Why would anyone do this?]  Thankfully, these cases are very rare albeit there was one quickly refuted [by others] chunk of inappropriate vitriol posted recently on Zomato which we demanded to have modified to remove the defamatory comments.  [What sort of people do this?] 

Note that Zomato are responsible for publishing defamation when they are in full knowledge of content.

This unfortunately gets much more important for a new restaurant depending on public reviews to build business.  Zomato can kill them based on their so called algorithm. 

Not good.

Zomato, you need to deal with your methods.

Regards,

Jon

'T' PLATES

TOURIST PLATES

We drive from St Kilda to Fitzroy between 9am and 1am 5 days a week and we watch with some trepidation what happens to traffic, drivers and pedestrians.

 

The national endemic is ignoring red lights by all participants which creates constant ‘mind’ chaos because no one is sure what anyone else will do.  For example, the disaffected personally powerless dropkick deliberately walks across traffic fingering anyone who dares to complain.  Not a good look.

Everyone has a ‘whoops’ moment being caught clipping a red light but this is vastly different from the dross who accelerate through an intersection in the full knowledge it’s red.

Enter the tourist into this mind chaos.  Strange car, strange city, perhaps driving on the other side of the road and in a constant state of panic.  We as locals are used to it and expect others to also be used to it with little quarter given.  Yet, any tourist wants a positive experience and I speak from personal experience having driven all over Europe.

The trouble is that we don’t know who the tourists are so we have no chance to cut some slack or even smile.  These people are not dross, they are tourists enjoying our space but in a constant state of panic.

The solution is simple.

Magnetic ‘T’ plates the same as ‘P’ plates identifying the driver as a tourist who may make mistakes and whom we have a duty to both understand and support.  

Nice people in a nice city doing nice things being supported by nice locals.

Couldn’t be easier really.

Montsalvat

PRESERVE MONTSALVAT AS THE ICONIC ARTS COLONY

Yesterday we had occasion to visit the iconic Montsalvat to interview Mr Sigmund Jorgensen for news publication. 

During this period we could not help but notice the deplorable state the buildings and grounds are currently enduring.   Weeds on steps, grass unmown, moss on tiles, render falling off buildings, a filthy inappropriate pool fence and a palpable feeling of neglect.

This current board and management are failing in their duty to preserve Montsalvat.  Have a look at Heidi, or indeed, any reasonably run art institution, and note the differences.  

Unfortunately, Mr Jorgensen had been voted off the self elected current board and since thwarted by them in his attempts to revive the arts colony.  

I doubt that the paying public will want to look at an unkempt ruin remembering Montsalvat circa 70’s used to be vibrant and alive when Mr Jorgensen was running the show yet now it feels like a place in its death throes.

The current board and management without Mr Jorgensen have failed in their duty to protect and nurture Montsalvat and therefore as an act of good faith should resign forthwith.  Indeed, Montsalvat’s constitution at section 9a demands board member skills and experience appropriate for the company which would obviously exclude skills and experience such as local government, academia and anything not focused on the business that is Montsalvat.  Unfortunately most of the board and management fall into this exclusion zone and it shows.  Terrible management decisions are prevalent such as outsourcing revenue streams for a fraction of their worth because of an inability to manage.

Montsalvat needs professional intervention to survive starting with the reinstatement of Mr Sigmund Jorgensen as the live in doyen and founder.

The risk is losing the history that is Montsalvat.