Another great interview with Dick Smith from 2001 : he is going to have to shut down Dick Smith foods because it has become too successful.
DICK SMITH: Janine, it’s a disaster — I’m going to have to close it down because it’s $69 million. It’s no longer a small business and I love small business.
JANINE PERRETT: Sixty nine million in sales and you still only have two people working in this little office above a real estate agent — how on earth can you keep going at that rate?
SMITH: Well, it’s hard but we’ve done it by being very, very careful. If you remember I mentioned right at the start to keep the overheads down and we’ve certainly done that. I mean the overheads are there — I don’t know what they are but they’re pretty low.
PERRETT: Two hundred and sixty thousand.
SMITH: And that’s the key to it, keep the overheads down. No big flashy offices, we don’t have a flashy boat or anything like that. Keep the overheads down and watch that bottom line all the time.
PERRETT: Where do you go from here?
SMITH: That’s what I’ve got to look at — whether I’ve got to bring in an outside sort of managing director or tell Crez to stop all the other work he does for me and get him to run the company full-time. They’re the things I’ve got to look at. And this has been a problem of mine both with Dick Smith Electrics and Australian Geographic. I’m basically a small businessman, I love small business. I love to have just a handful of staff that you put in a bus if necessary and go away for the weekend, to talk to people. Once my businesses get big I don’t like them anymore and I don’t like big business. I can’t sell the business as such because I’ve said that the business is going to run to help Australian farmers and it’s for this particular ethos. So I’ll have to keep running it, but I don’t really want to expand it and that’s going to be hard because I’ve got lots of Aussie companies saying ‘hey we want the support of Dick Smith’.
Hopefully this will be an example to many people — first of all to politicians — that everyone is concerned about some of the bad things of globalisation. It’s also going to be a message to lots of Aussie businesses that you can do it. If you promote an Australian-owned product — Australian-made — people will go out and support it. That is one of the reasons this business has been successful is that I’m trusted and I’m very careful to make sure with my name that I do the right thing, that I run an honest business.
Right from the very first days of Dick Smith Electronics I’ve done those things and even when it comes back to tax, I used to have friends who used to say ‘oh you’re a fool paying all this tax’. But because I’ve always been able to be completely open about this and not get my name in the paper as a tax minimiser or avoider that means people trust the Dick Smith name and they’ve supported our products. There’s a message in that for everyone.
PERRETT: What are you going to say to all those other Australian-owned businesses that are still struggling?
SMITH: I wanted to see that I could still do it the same way. Now of course you’re right — it’s not equivalent to a normal battling businessperson but what I’ve shown is you can still do it and I’m utterly convinced there are people out there who are watching this show who are like [the way] Dick Smith was 30 years ago, who can get out there, work hard and push the fact that they are Australian. They’re patriotic and do very well.
It’s amazing that the great myth is that Dick Smith is this person who can do these things magically. I surround myself with capable people, any Australian can do that. I ask lots of advice — any Australian can do that, I communicate well and I use the media. What I say to any small businessman is ‘look, come up businessman or woman, come up with some ideas that create publicity for the media and you’ll be supporting you’.
PERRETT: When you launched, when you went to the six month point both times, you said to me you still gave it a 50/50 chance of survival.
SMITH: In the long term, unless we decide to spend huge amounts of money on marketing like Kelloggs, Philip Morris and people like that, then we are doomed. And so we’ve got to make that decision. Look — Dick Smith Foods wasn’t a money-making thing for me because I’ve explained I have enough money. It was very much a selfish thing for satisfaction and mainly to show Australians you can still have a go.