Don't Just Live In Your House, Diarise It
Sydney Morning Herald
Friday November 25, 2005
His business might be founded on things like writing pest reports for insurers but Steve Allen's real dream is to be the man who introduced logbooks for houses.
"I want to see every house with a logbook, just like you have with a car, and a warranty that goes with it - that's my passion" he said."If you really look at the dollar value most people sink into their biggest investment, they know very little about the quality or condition of it. Whereas with a car you know the history through a logbook."My ambition is to give quality and condition information in respect of a property which will create the logbook which can be backed by insurance".Like all great business ideas it is a simple one, just like the concept on which his current small business, Report Systems Australia Pty Ltd, is based. RSA is a uniform reporting system, including software, handbook and guidelines, for inspectors in the building and pest control industry.Steve got the idea from his early career as a licensed plumber when he saw the growing need for inspection reports and wondered how somebody would find all the information required."I saw the opportunity. House values were going up and it made sense to protect your interest more," he explains."The consumer needed more information including on pests and building rot as well as plumbing. Insurers need to lessen their risk. This system helps inspectors meet their insurance obligations and customer expectations."He set up RSA in 1989 and began the lengthy process of research and verification through contacts with key groups like the Law Society and the University of NSW. Over the next decade he "plugged away", subsidising himself through his plumbing work until he became self-sufficient five years ago after he gradually gained the recognition and support of the big insurance companies.Today he has some 500 clients ranging from mums and dads to large pest companies like Flick and the major insurance companies. Indeed, it is their referrals which have largely driven his growth and will play an important role in the future.His small business, based at home on Sydney's northern beaches, is now facing the challenge of advancing to the next stage of either expanding the range of the business within Australia or focusing on its current business and growing globally."I'm working out exactly where do I take my business now. Do I go into other areas in Australia or take it on a bigger basis around the world? "They're the decisions you have to make and in any business you have to look at your end game."While Steve admits that, from a personal point of view, using the current system to introduce the logbook for every house is his ultimate aim, "from a commercial point of view the end game is global".He is already scouting out the UK and US markets and is quite advanced in discussions with US insurers which could result in him setting up in Florida next year."We now have a track record of cutting losses for insurance companies significantly, so I get a fair hearing from them around the world. I've got a profile and when I looked at the US market I saw there was a definite need for what I have as they don't have anything like it." However, there are still plenty of opportunities at a local level. For example, he has been approached to use the inspection system for mortgage insurance purposes, which "could double the business overnight"."We could also diversify into other areas where you can apply risk management to insurance, anything to do with professional indemnity insurance, like medical. Doctors still love scribbling - look at the way they deliver their systems".Time and cost are another obvious challenge as he wrestles with developing other electronic delivery systems."You've got to write the system and then get it accepted. I see it as being logical to look at what you do in a niche way then expand globally".The support of the insurance companies not only avoids marketing problems but also helps with competitors and those who simply want to rip off his system."I spend a lot of money on lawyers and if I spend any more money protecting my system I'll go broke."I stay ahead of everybody and the insurance companies that insure the pesties and builders, the three main ones, use me as a condition."RSA systems can be downloaded from a website but it also sells a carbonised pad so people can buy them as they need them. His system also has the advantage of being backed by university verification."The most important thing is that all my guidelines are passed so that if someone wants to know how to use the system they have to buy the handbook which explains everything to them."It's not just software but a report in writing and it's actually guidelines to help people fill out the report".But this education process is also another challenge for the business."We partnered with other individual companies in setting up a joint company to run education courses for building consultancy," he says."We use education because you can have the best reporting system in the world but if someone doesn't know how to use it properly, there's no point."Recruiting the right people is always a challenge because they have to have a very broad knowledge of risk management and insurance issues".He concedes that he has to offer incentives like profit share which has been difficult with a small business with a turnover of only about half a million dollars a year. However, it will become more attractive and viable with any overseas expansion."If anyone is going to invest money in you further down the track they need to know you have a global application and if you don't have that they don't want to know you - that's reality," Steve says.RSA was funded through the traditional small business support group of family, friends and colleagues and he is less interested in an equity investor than a joint venture partner with insurance expertise. "You've got to start from scratch and then your reputation will take you forward."CHALLENGES FOR REPORT SYSTEMS AUSTRALIA * Expand into different areas locally or grow existing business globally* Find joint venture partners offshore in insurance and locally in education* Develop passion for home logbook
© 2005 Sydney Morning Herald