Mitigating risk is a serious business when you own a company. For Rick Stone, risk management became his business.
The former senior disaster planner for the NSW government launched his own consultancy to teach businesses and organisations how to be resilient and develop plans to mitigate all manner of risks should disaster strike.
“Basically, what we do is help organisations become more resilient,” explains Rick.
“We think that organisations need to be agile, as our Prime Minister often tells us.
“What that means from our perspective is that you need to be able to cope with the stuff that life throws at you, the risks that life throws at you: whether those risks are key people leaving your organisation, key suppliers going bankrupt, key customers disappearing or your building burning down, you need to able to cope with that. You need to be able to bounce back from that.”
Transition from government employee to business owner
As anyone who shifts from a stable, salaried role to running their own business can appreciate, it is a difficult and emotional decision to cut off your financial security and go it alone.
However, Rick says it was less an active decision than a response to the circumstances.
“In many ways in life, sometimes you get forced into things,” he says.
“I was very fulfilled as a public servant for a very long time and I thought that I was making a difference by generating good policy and by creating environments that were freeing to people and creating environments that supported the work that people did.
“It got to a point, though, where I felt that I was unable to influence the policy debate in a way that I thought was useful and in a way that I thought that I was able to contribute to the same extent that I had in the past.”
This, combined with several personal factors, led Rick to make the change and look at using his skills and experience for maximum effect.
Of course, it was a difficult transition to make, and Rick has had to effectively re-learn his entire modus operandi.
Why being your own boss is something of a falsehood
“Anybody that tells you that you leap into running your own business so that you can be your own boss, I think, is in some sort of fantasy land,” Rick says.
“I used to have one boss when I was working in the public service, really, maybe two at the most. Now ... at the moment I've got nine big clients, I've got nine bosses. All of them are competing for the work that they want done, and the client that's throwing $70,000 at me gets priority over the client that's throwing $7,000 at me. That's an interesting juggling act.”
Rick says he has learnt what anyone who has been in business a long time – especially a services business – has discovered: not all clients are created equal in terms of their profitability.
“We have two [revenue] streams: we sell 60 per cent of our work to government clients and 40 per cent of our work to a number of clients in private sector organisations. [But] the revenue is the reverse of that, so our 60 per cent government clients give us about 40 per cent of our revenue; our 40 per cent private sector clients give us about 60 per cent of our revenue.”
As such, Rick says it is a delicate act to balance time with profitability, a process he is constantly working on and adapting.
A different view of money
The change from government service buyer to self-employed service provider has forced Rick to make a complete turnaround in how he looks at pricing.
“Having been a buyer of services for government for a long time, which is all about screwing the supplier down to the lowest possible amount, now suddenly I'm the one being screwed and I had to adjust to actually not trying to save the client money, because that was actually taking money out of my pocket,” says Rick.
“That's been the most significant challenge for me.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.