An Australian events company has hurdled the obstacles to opening its first overseas office - and managed to retain its unique culture.
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Entrepreneur: Paul McCloskey, Managing Director
Company: Laservision Group
Business type: Large-scale multimedia entertainment
Founded: 1984
Employees: 15 staff in Sydney, 4 in Hong Kong
Turnover: (2002 - 2003) $8.5M
Head office: Dural, NSW
Contact details: +61 2 9658 1000
The Laservision Story
More than 90% of Laservision’s revenue comes from overseas clients, mainly in the Asia-Pacific region. So there was a good business case for Paul McCloskey’s Sydney-based company to set up an office in Hong Kong in October 2003. An office in Hong Kong would provide obvious opportunities for expanding Laservision’s Asia-Pacific business - and there were attractive tax advantages too. McCloskey says: “Tax there is only 16% of the income that is produced and is only relevant to work commissioned in Hong Kong. So if the Hong Kong company does work in France, that is a nil tax in Hong Kong.” But the undeniable advantages of a Hong Kong office were balanced by challenges to the company’s unique business culture.
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Key learning points:
- Staff cohesion - Australian companies with overseas offices need to find ways to bring scattered employees together. A unified company culture is an important prerequisite for growth and success.
- Intellectual capital - Keep ownership of the technology that you sell - it guarantees an income stream through ongoing maintenance, warranties and upgrades.
- R&D - Never become reliant on just one supplier for research and development. If the supplier fails, so does the R&D effort.
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Laservision’s business has two main parts. One is special events, for which company staff travel to a particular country or location and stage a multimedia spectacular. This can include elements such as fireworks, lasers, fountains, waterscreens, lighting or digital video projection. The company often uses lasers to project imagery and signage onto large surfaces such as buildings, the sides of mountains or even the underside of clouds.
The other part of the business is permanent installations, which provides Laservision’s main income stream. These are usually at theme parks or prominent public places at which a client wants to draw or retain crowds outside business hours.
McCloskey says: “Because we work such bizarre hours, we have a fairly extraordinary culture in the company. People work hard and play hard together. The problem with having people at another office such as Hong Kong is that they are isolated. It can be hard to get revved up when there’s only a few of you. So we look for opportunities to join the two groups together physically to remind them that they are working for the same company.”
To break down the isolation, Laservision has staff from Sydney and Hong Kong work together on projects in third countries. They also work in each other’s countries, or holiday together at resorts such as Phuket.
Issues such as working visas and different tax regulations posed headaches when the Hong Kong office was started. Fortunately, Austrade put Laservision in touch with a company, Asian Financial Services, that specialises in helping companies open offices in Asia.
McCloskey says: “Not only did they know all the details about visas, the banking system and company compliance regulations, but because these people were expats themselves, they also understood Australian and Hong Kong tax law.”
Research and development is crucial to Laservision’s growth and success. The company is committed to owning the technology that it markets. McCloskey says: “Once you install that technology, then almost by default, you get the maintenance contracts, warranty renewals and upgrades that generate additional revenue for your company.”
Laservision avoids using just one contractor for its R&D work. In 1998, it had one person who was writing new software for the next phase of Laservision’s technological growth. But the contractor was diagnosed with cancer and died.
McCloskey says: “Suddenly, years of undocumented work bit the dust. Our rise and rise took a bit of a bellyflop. The technology that we’d relied on to ride the first curve was now not going to cut it.”
Laservision scrambled to find another company - with more than one staff member - to develop the next generation of its multimedia technology. But two years into the project, the new supplier ran into difficulties. In 2002, Laservision severed the relationship, electing to deal with several suppliers for its R&D program.
McCloskey says: “When things went bad, not only revenues took a dip but our own people knew we didn’t have the latest and greatest. It was important that we got that new technology out there even though it took us three goes. The culture of a company is its heartbeat. The biggest problem that we face is to keep that heartbeat alive in another country.”