From home-based business to $60 million annual billings

They say the difference between an entrepreneur and a dreamer is action. John Cross, CEO of FFA PaySmart, had long been a man of action.

A Board member of Fitness Qld and the Recreation Industry Training Company, John had owned and operated fitness centres for 30 years when he identified an opportunity to develop a new service for his growing industry.

“Traditionally, fitness centres charged up-front fees, but in the early 90s, more and more operators were realising the benefits of pay-as-you-go,” John explains.

“Not only did pay-as-you-go appeal to prospective members, it provided a more reliable and positive cash flow for the business, but the downside was that it required intensive administration.”

As fitness centres struggled to resource front office cash handling and receipting, John’s entrepreneurial mind turned to direct debiting as the industry’s best solution. Following exhaustive negotiations with banks, John succeeded in obtaining a Direct Debit User ID.

Initially, his company provided direct debit services to five local fitness centres with a collective billing limit of $50,000 per month. Today, ten years into its business life, FFA PaySmart bills an average $4.5 million per month on behalf of its clients.

Impressively, FFA PaySmart has an average collection rate of close to 98% on all debits by the due date. (The company offers a range of debt collection services for the minority of clients with defaulting customers.)

John’s business partner, Heather Osborne, has been part of the company’s meteoric rise to success since its early days as a humble, home-based business.
A former schoolteacher, Heather initially provided part-time administrative support two or three days a week. Today, John and Heather manage a staff of 23, including four interstate-based business development managers.

The partners attribute their business success to three critical decisions: early reinvestment back into the business, diversification in the late 90s, and their partnership with business coach, Mark Gwynne.

“In the first six years, we re-invested virtually all profits back into the business and our bankers never failed us when additional funding was required to sustain our rapid growth” John said.

“Once we had our own purpose-built software and systems in place, we had the confidence to diversify into other industries, bringing onboard a range of clients from golf clubs and universities to franchisees and wholesale businesses.”

By the late 90s, the company was writing more and more of its new business through non-fitness industry related sources. John and Heather saw many opportunities to expand, but were too intimidated and overwhelmed by the day-to-day demands of their roles to take the next step in building their business.

“We were tearing our hair out,” John admits. “Business was booming, but as hands-on operators, we didn’t have the time or resources to see the bigger picture of where we were heading, or indeed where we wanted the company to head.”

Acting on a recommendation from a panel beater friend, John phoned Mark Gwynne

“To be honest, at the time, I wasn’t even sure what a business coach did, but I knew we needed direction, and I was prepared to give Mark a hearing,” John says.

It was, he now admits, one of the best business decisions he ever made. Heather agrees.

“We were impressed from the outset by Mark’s approach. He took the time to really get to know our business, and to know how we operated. He really focussed our thinking on where we saw the business going, and his initial report gave us a virtual blueprint for our future business development,” Heather said.

That report - a service Mark offers to all clients who undertake his Business Thinking Systems’ programs - provided a virtual audit of where the company had been, where it currently stood, and what it had to do to achieve its goals.

In the three years since they first consulted Mark, he has become an integral part of John and Heather’s business.

“We have monthly meetings with Mark which keep us focussed and directed,” John explains.

“He is a brilliant facilitator and he constantly encourages us to set our own agenda. He’s objective and a real asset to our business, and most importantly, he’s accessible.

We know we can pick up the phone at any time and bounce ideas off him.”

The bottom line?

Since Mark began working with FFA PaySmart, the company has doubled its gross turnover and employed 14 additional staff and four interstate business development managers. It now has an annual growth rate of 30% and it’s projected that this year alone, FFA Paysmart will collect and disburse more than $65 million in direct debits on behalf of its clients.

Not bad for a company that started just ten years ago as a home-based business with a $50,000 overdraft!

FFA PaySmart provides direct debit billing services to all business in every State of Australia. PaySmart clients can have their customers debited monthly, fortnightly, on any given day. For more information, phone (07) 3354 6222 or visit www.ffapaysmart.com.au