Baxproperty

Old made new

A NICHE PROPERTY COMPANY IS BUILDING SUCCESS ON A SYSTEMATIC APPROACH.
REPORT: AINSLIE CHANDLER

It is perhaps fitting that a business makeover put Bax Property on the BRWFast 100 list. After all, reinvention is Bax's business. The four-year-old company buys tired "six-pack" blocks of units on a single tide, gives them a chic renovation - inside and out - then sells them off as strata-titled properties. The Queensland property group, which was started with just $25,000 in savings, is ranked in eighth position on this year's Fast 100 - up from 14 last year - with revenue of $14.91 million. Company founder and managing director Andre Bax, who has been in the renovations business for about a decade, says he started the company for financial freedom and lists one of his business aims as dominating the company's market niche.

He says the decision to systemise the business about three years ago was one of the biggest factors in the rapid growth of the company. It was a desire for a better business model and reading Michael Gerber's business development book The E-Myth (HarperCollins, 1994) that prompted the entrepreneur to make the change. And Bax continues to work with E-Myth Business Coaching Australia's Ted Bonel. "We started systemising the business and had a strategic objective for the business, just really streamlined and tightened it up," he says. "And we knew what we wanted it to look like. Then when we had that picture, it's obviously much easier to work towards that."

He says that the turnkey business model promoted by Gerber's book helped his niche renovation company to set its goals and decide how to achieve them - as well as helping him to learn the rules on how to play the game of business.

Bax Property

Rank : 8

Chief executive : Andre Bax

Revenue (2007-08): $14.91 million

Growth*: 160.88%

Without systems, Bax says, "it'd be like trying to play a football match without any rules. Everyone would just be doing whatever they want out on the field but... no one would know how to keep score, how to play it, when there's a penalty, when there's not. I think the same rules apply to business."

Bax says that the company's strong culture and vision - which is spelled out plainly on its website and used during the employee recruitment process - help it to achieve its goals.

The company's goal is simple: to complete $35 million in residential unit block renovations with a profit margin of 17.5 per cent between July 2006 and June 2009.

Its culture statement is equally simple, with principles such as "Focus on what works", "If you see a job that needs doing - it's yours" and "Always find the way forward".

Bax believes a lack of systemisation is behind the high failure rate of businesses in their first five years - and the much stronger success rate for franchises.

Bax Property works mostly in Brisbane but has completed projects in northern Queensland and in Adelaide.

The company focuses on projects that are seven kilometres to 10 kilometres from city centres. It spends about $70,000 to $80,000 on each unit before it is sold.

Since it was founded, the company has taken on five rounds of capital from high net worth investors. However, Bax says he has no plans to raise any more.

Listing his ability to "say sorry" as his best attribute as a leader, he says he does not feel like he has made sacrifices to build his business because he has just been doing what is required to build a successful enterprise.

The company has benefited from Queensland's surging property market during the past few years and Bax is philosophical about the prospects of posting such high growth in the coming years, given the softening of confidence in the sector and declining levels of housing affordability.

He says the company is working to reduce debt and working with "skeleton staff levels, given the uncertainty in the property sector. And he suggests that die company is not expecting revenue growth in 2008-09.

Bax says that "obviously the market was favourable to us". "This year will be a different year, and would be for most developers. We won't be doing those same growth numbers as we did last year." BRW

* Average annual revenue growth over three years.