16 OB I TUARY | BUSINESS TIPS VALE ALAN EDWARD LANHAM 1942 - 2024 5 mistakes business owners need to fix…now! ONE OF THE Central Coast’s best-known retailers for over more than 40 years Alan Edward Lanham of Green Point passed away peacefully on 16th March 2024 after a long illness. After leaving school in the late 1950s he became an apprentice plaster and gained his tradesman’s certificate but decided that the industry was not for him. Mr Lanham’s career in retail started in 1967 as a salesman with Norman Ross then quickly as a store manager before moving to the Central Coast in 1972 to manage their first store in Gosford. He would remain with Norman Ross and then Harvey Norman until retiring in 2018. Mr Lanham’s name was synonymous with the electrical and furniture retail brand Norman Ross Discounts and subsequently Harvey Norman Discounts on the Central Coast. Meanwhile, Gerry Harvey and Ian Norman had founded Norman Ross in 1961 and were growing their retail chain of stores. Mr Lanham joined the company in 1968, as a salesman in their Alexandria store and in a short space of time was appointed Assistant Store Manager at the company’s store in Canberra. Four years later he was promoted to Manager to their store in Gosford, their first store on the Central Coast. Having produced results beyond the company’s expectations he was awarded Harvey Normans’ prestigious Store Manager of the Year In 1976 as well as the coveted Managing Director’s Shield for the Store of the Year and followed this up by winning the Store Manager of the Year Award in 1979. He followed this up with a similar award in 1980 along with the Norman Ross Innovators of the 80s Award. In the early 1980s Norman Ross was sold to Grace Bros and subsequently on-sold to controversial businessman Alan Bond who, within six months had sacked Gerry Harvey and Ian Norman. Within a few years Gerry Harvey established Harvey Norman Discounts, opening the first store in Auburn in 1982 and then in 1985 opening the new store at West Gosford with Alan Lanham setting it up. Then followed the opening of a second store on The Entrance Road, Erina in 1999 and the much larger store in Karalta Road, Erina in 1992 which was the largest furniture showroom outside the Sydney Metropolitan Area. Alan Lanham was responsible for the growth of these stores along with the Joyce Mayne store at West Gosford acquired by the Group in 1988. In 1988 he relieved Michael Harvey who was a Director of the Group for a period of six months, a stint which gave him the opportunity to work alongside Gerry Harvey learning and being part of the management of the Group. The six months would stretch out to ten years. In 1998 Gerry Harvey and his wife Katie Page saw an opportunity to establish a furniture and electrical superstore in Slovenia and asked Mr Lanham to take on the challenge. He opened the first store in Ljubljana in 2002. In 2007 Alan Lanham, known throughout the industry as ‘Lofty’ retired and was honoured at a gala dinner in Melbourne for his 40 years of service working with Gerry Harvey and Ian Norman. Commenting on his years first with Norman Ross and then with Harvey Norman, Gerry Harvey said, “Alan was a part of the Harvey Norman family, he was part of our inner circle from the beginning and most highly regarded for all the years right through and beyond his retirement.” After an active life he found retirement wasn’t working and with Gerry Harvey’s acquiescence established Harvey Norman Security based at Lisarow selling security systems. In 2018 he retired permanently. During his career Alan Lanham was very involved in the local community. He was a Charter Member of the Rotary Club of West Gosford, held many club service positions and was President in 1983-84. He was named a Rotary Foundation Paul Harris Fellow in recognition of his service to the community. It was through this association that he became very involved with the Salvation Army and the Red Shield Appeal. He was Gosford then Central Coast Advisory Board Chairman for 17 years. Alan filled many roles on the Red Shield Appeal Committee for the Central Coast and door knocked on their behalf. He was very generous with his time and influence in support of the Salvation Army. He is survived by his wife Marianne, children Ian, Michelle and Corinne and seven grandchildren. 1. Fail to plan, plan to fail Few small businesses have a working budget and cash flow forecast that is rolled over on (at least) a quarterly basis. As a result, they make decisions based on guesswork. A solid budget requires the following information, ideally seasonalised and presented on a month by month basis. Once you have a budgeted profit and loss account, you should then create a cash flow forecast. This differs from the profit and loss budget because it is looking at the cash inflows and outflows. As such, it needs to take account of how long your customers take to pay you, how quickly you turn over inventory, how quickly you pay your suppliers, any loan repayments due and any forecasted capital expenditure that will not appear in the budget profit and loss account. For a thorough budget that could be presented to a bank to get financing, you should also complete a budgeted balance sheet. 2. Financing capital expenditure out of cash flow As a general rule (if possible), it is good practice to cash flow the lifetime of a purchase. By that I mean: if you are buying stock to sell in the short term, then finance it out of your day-to-day working capital. But if you are buying a large piece of machinery with a ten-year life, then you should look to finance it over ten years. Similarly, don’t fall into the trap of spending your money on flashy assets out of your cash flow after just one good quarter. Generally, I prefer to keep cash for a ‘rainy’ day and use Asset finance, which is relatively easier to secure than other types of finance – such as a HP, lease, term loan. CONTINUED ON PAGE 17 By Troy Marchant, Director, Adviceco Chartered Accountants CENTRAL COAST BUSINESS REVIEW JUNE 2024
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