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Running a business in a tough economy

Interview with...

Mick Punter
Business name:
Pelazzo Group
Raising business finance and currency trading software and solar power installation 
Gold Coast

On setting up on the Gold Coast...

We moved from a top business destination in Melbourne, which is too much like the UK. We wanted more of a palm trees and beach culture, to suit our lifestyle. 

We now have a waterfront property, which means we can dock a boat at our house if we want. It was more that sort of thing than the work side [that led them to relocate].

On the ongoing impact of the credit crunch...

It's been two years since the financial crash and we're no different from any other country. Things have slowed down and people are very cautious about what we do.

If you want to raise funds it can be done, but they have to lower their expectations

But what you have to remember is that compared to, say, the UK, money in this country money is quite expensive. Our mortgage rates are 7.5%, so money is not cheap any more, which also slows everything down. 

What is actually happening - and I'm not in this sector -  is the mining sector is extremely buoyant and keeping the economy way up, but it also keeps things like interest rates high. So the country as a whole is doing fine, but individually, unless you're in mining, it's tough.

Advice for businesses operating in a challenging climate...

If you want to raise funds it can be done, but they have to lower their expectations. If they want £3m then they have to look for a much smaller figure and do it in smaller steps, basically.

Other than that they have to get their marketing spot on so they don't waste money and that sort of thing, because advertising is expensive. But there are lots of other ways. If they want to be proactive and put things in doors or whatever, then you have to be innovative.

On business plans...

If you want someone else to put money in then you need a good business plan of, arbitrarily, 30 pages or something, with lots of justification of figures. Many plans which appear on my desk have half a page or one page and they have no idea. I don't understand what they're trying to do because you can't say it in half a page.

Business plans are important not just to raise money, but also important to compare against for the people running that business. 

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