During the year 2002 I enrolled in an arts degree so I could remain within the university system in case I decided more study was the way I wanted to go. I took one history subject to keep my enrollment alive and worked part time at the university library IT helpdesk which had been a much loved steady casual job for the last year of my degree and remains so even today; I have left and come back to the job many times. I also continued to perform my functions as webmaster of MTGParadise.com and was reaping reasonable advertising revenue though I had long ago lost interest in the game itself.
This continued for most of 2002 until early 2003 when I quit my job and went down to Tasmania with a girlfriend at the time, Stephanie. I left on this trip with little expectation but planning on travelling around Australia on a fruit picking journey. It was a reasonably bold move by my standards as I do not take easily to change and very much like my homespace. The trip lasted for six weeks during which time I learnt that fruit picking was not for me. In fact during many a trip up a ladder picking apples off a tree I was busy scheming ways to make my life easier, which usually meant some half-backed business idea. For example I noticed how hot and hungry you could get picking apples for a full day and you were limited to whatever food and drink you brought with you. I thought it would be possible to purchase an esky and fill it with ice, cold drinks and chocolate bars and drive from farm to farm selling to the hot and hungry fruit pickers.
In the end I gave up fruit picking after maybe a total of three days. I had savings so the financials were not too much of an issue however I could not just do nothing so I went to work on my old fall back occupation, building websites. I thought that the local town stores would benefit immensely from having a website and I was equipped to build and host easily with my laptop and hosting reseller account. I whipped up some posters and stuck them up at the very very small local town down the road from the backpackers in Tasmania we were staying at. The net result was a few queries but no sales. Things changed anyway as Steph and I were struck down by the nastiest stomach bug I have ever had I spent some of the worst days of my life not eating and being sick in surroundings not at all friendly to sick people (loud late night backpacker parties with music blaring and pot smoking). We recovered enough to leave the backpackers and a week or two later I was back in Brisbane, however Steph and I returned single and our relationship was over.
BetterEdit Returns with a Vengeance
It was March 2003 and I was back in Brisbane not wanting to return to my old way of life, not wanting to study and really not sure at all what to do. I knew business was for me but I still lacked any really great ideas or the confidence to chase them. MTGParadise was still chugging away bringing in cash and growing but I had stopped actively campaigning for new advertisers. I was merely maintaing the status quo to keep the community alive but the fire that kept me awake many a night working on the site had long died down.
It was what I thought to be a joke suggestion by Phil to Stephanie, (we remained friends after our breakup) that she take over BetterEdit since she was needing work, that sent in motion the rebirth of the business. I jumped on board willing to promote if she was willing to edit. I was fairly confident that it would only take a few posters to get some work for Steph and sure enough the first few days after hitting the poster runs in Brisbane we had a new client. I contacted Chelsea to see if she was interested in some work again and told her that I was taking the business over. She was happy to come on board.
During the next few months I “lightly” went to work advertising BetterEdit and working on the website to bring it up to date since I had built it a number of years prior and it needed a tidy up and some expansion. However in my mind I was still not devoted to running the business and was unsure of it’s potential as a full time occupation for me. I didn’t truly have the confidence to trust that the business could be a reliable income for me so I kept my eyes open and just waited to see what happened.
New Enterprise Incentives Scheme
It wasn’t until a few months later that I finally committed to BetterEdit. I was in the passenger seat of my father’s car as he explained to me about a friend of his that was writing a book and being paid by the government to do it. This person could even afford a nice beach house on the Queensland coast, my father kept explaining. I delved deeper and asked more about it but dad didn’t know much more so I called up his friend to find out the skinny on the scheme. I had a quick conversation and learnt all about the New Enterprise Incentives Scheme (NEIS) offered by the Australian government to help individuals start a business.
To get on the NEIS program I had to do something I was not too keen on – go on unemployment benefits (called the DOLE in Australia). I was eligible because I was unemployed at the time but I never felt I needed it financially because BetterEdit and MTGParadise were bringing in some cash, nor did I like the idea of having to work with the public benefits system because I had heard plenty of horror stories. In the end my DOLE application process was quite smooth and I easily made it on to the NEIS application system. The extra benefit of this is that during the whole time you are on the NEIS application process you receive employment benefits without having to search for jobs, so in reality the NEIS program is 12 months of income support with an extra 3 months pre-NEIS employment benefits too.
To apply for NEIS you must prove that your business is generating revenue. At the time I applied you had to show at least $75 in income per week, on average per month (apparently now it’s getting closer to $200 due to all the competition to get on the program). So for example if you are selling your own art and you only sell one $400 piece a month that would qualify. BetterEdit at the time had averaged over $200 per week in the last month since it was peak season so I easily qualified. In fact the NEIS organiser phoned me up immediately and was eager to chat about my business.
The NEIS program attracts a wide range of individuals, including many that have recently been retrenched and/or are looking to turn an income generating hobby or talent into a profitable business. Hence the people on the program are quite a hodge-podge of personalities and businesses. My group had a tatooist, lawyer and Brazillian student agent, just to name a few. The lucky few that are accepted on to the application process go on to form a small class were they undertake a business diploma which includes basic training in business management (bookkeeping, legal issues, marketing etc). During this period NEIS applicants must also compile a full business plan (100+ pages) including financial forecasts for the first two years. Finally when that is finished they sit a panel interview in front of three working professionals before acceptance on to NEIS for a full year of benefits. The benefits include a monthly visit with a business mentor and just under $200 a week in income support, which technically is meant to provide living support while you work on your business, although because I lived at home and was supported by my mother I used most of the money for marketing and expenses.
Becuase I had recently graduated a business management degree I was permitted recognition of prior learning so did not have to go through the business course besides a few important guest presentations. I did however have to write the business plan and sit the panel interview. Over the next three months I wrote up my business plan, had a guess at how much money I would make over the next two years assuming a certain level of growth (I would later be surprised when I closely matched my income forecasts – I thought they were quite outrageous at the time). I then found myself on 12 months worth of income support and more importantly, I was running my businesses full time. I was finally taking things seriously.
Web Hosting and English Tutoring
I’m not sure if it was an official condition, but my NEIS mentor told me that each quarter I would have to show an extra $100 in revenue per week growth, and that scared me good. I was worried because my business was very cyclical and over summer my revenue was likely to drop significantly. I started to prepare early first by spending a bit of time working on my very casual hosting business which I thought might be able to supplement my revenue. I already had a handful of hosting clients from friends and family referrals so I went ahead and built a hosting website HostBrisbane.com (a previous one was called WebHostParadise.com to go with the MTGParadise theme). My heart however wasn’t really in web hosting and the market being absolutely saturated was not one were it was easy to pick up profitable clients. Today I still have a few web hosting clients and occasionally a friend will refer another one but I do not actively run a hosting business, although I certainly have those skills to fall back on if I ever need them.
While putting posters to advertise BetterEdit I often had many business ideas. It provides a lot of thinking time and with so much commerce happening on poster boards it’s hard not to come up with new ideas. It was during a trip to a local Korean supermarket to put up posters that I noticed another potentially lucrative market that I reasoned I might be able to service and generate some extra income over summer – English tutoring. Australia is just crawling with Asian students studying English. In downtown Brisbane alone there are over 10 private English schools earning a few thousands dollars per student and I decided I would like a piece of that pie.
I did some research and noted that the market was largely dominated by English schools offering classes of 8-20 students crammed in for a full day of school-like studies. Often these students stay very isolated from local Australians and mingle only with other overseas English studying internationals. Not a good way to experience a country and learn the local language. I also noticed after speaking with a few students that they did not like the large classes because they often felt lost in the crowd. It was because of these conditions that I thought private tutoring would be in demand.
I decided that I would test the market by getting out there and do the teaching myself. While I was no English teacher I certainly have a good enough grasp of the English language to provide some benefits to an Asian student (I’m proud of my ‘A’ grade in year 12 English). As a plus I also have a Canadian accent and English students appreciate the clarity of the North American accent compared to the Australian accent (go figure…mate!). At the time private tutoring was being provided but, much like with proofreading, the market is fragmented into small-time individual teachers tutoring on the side for extra cash, certainly not professionally. I would later meet and have a long conversation with one true competitor that was seriously tutoring full time and would later set up her own school.
Looking at the current tutoring posters the market seemed to be supporting a pricing point of $15/hour, and while there were tutors willing to go as low as $8 or as high as $25 I decided to test the median range. I stuck some posters up and immediately had my first client. It was rough going at first and in fact I found the whole lack of communication quite frustrating, but I walked away with a good sense that I could teach *something* and was prepared to go after more clients.
Over the summer of 2002-2003 I had a handfull of students come and go but I very quickly got tired of teaching. Conveniently though Steph, and another friend, Ryan, both had aspirations to become English teachers and they were willing to help out tutoring. Demand did not let down although I quickly learnt that at the $15 pricing point it would be hard to pay tutors and make a profit. For the time being I was happy teaching a little myself and Ryan and Steph took up some students as well at $15 per hour and no profit margin.
During this time I advertised more than just editing services from BetterEdit to help keep revenue growing. I was a big fan of using freelance staff so I brainstored a few complimentary services that BetterEdit could offer via freelancers. This included language translation, transcription and resume editing services. Whenever I received a request for language translation I would search an online database of translators that was made available by NAATI, the official Australian language translators and interpreters accredidation organisation. I would request quotes from freelancers, tag on a profit and then provide this quote to my potential client. Some of the current editors at BetterEdit were willing to do transcription work and were quite capable at helping with resume editing as well so I could service the little demand we had for these services. Thanks in part to some large translation and transcription work and English tutoring my worries about not maintaining NEIS growth rates were unfounded and I easily maintained the $200 per week average required.
By February 2004 I was convinced there was money to be made in private English tutoring. There was clearly a demand for more intimate one-on-one tutoring and also smaller groups of 2-4 students. My biggest problem was how to earn profit doing it. I decided I would go professional and work on establishing a critical mass of students with a price increase to $20/hour for private lessons. To justify this price increase I decided to set up my school properly with class rooms (at the time we were running from outside the local city library at public tables). To do this I would need an office.