Success on a Budget

WHILE THE world is full of entrepreneurs, few have achieved the same level of success as Bob Ansett.

The founding director of Budget Rent a Car didn’t just manage to build a company that boasts an annual turnover of $400 million, he also changed the face of Australian business forever.

Born in Australia but educated in the United States, Ansett returned to Australia in 1965 to launch the Budget Rent a Car system.

What started out from some pretty humble beginnings – a two-person business with just one car available to rent – soon blossomed into a dynamic enterprise employing more than 3,000 people.

The company also became the first to introduce staff health benefits and fitness programs and pioneered genuinely successful franchising.

EARLY YEARS

Mr Ansett admits that launching a company like Budget was far from easy.

“When I first returned to Australia, I knew I wanted to start up my own business – so I looked for gaps in the market,” he says.

“I noticed there was only one company renting cars out to travellers at the airports and saw this as a huge opportunity. I couldn’t believe no competitors had ever tried to enter this space before now.”

It wasn’t until Ansett launched the company that he realised why no one else had ever tried to compete against Avis, which held the monopoly in this market.

“Back in the 1960s and 1970s, the federal government owned all the airports and they had a law in place that allowed only one rental car company to trade in the space,” he says. “I thought the policy was absurd, so I set about having it changed.”

Mr Ansett knew other companies had tried and failed to have the laws changed in the past. But he was not deterred, and launched a public campaign that called on consumers to put pressure on the government to change the laws.

Almost 10 years later, and with a petition signed by more than 50,000 Australians, the law was changed to allow multiple rental car companies to operate and compete for business at the airports.

“Where others failed I succeeded,” he says. “Why? Because I knew that the key to success was perseverance.”

That perseverance proved invaluable, not only to Mr Ansett and Budget but to the rental car industry as a whole.

COMPETITION IS CRUCIAL

According to Mr Ansett, when an industry is subject to a restriction that limits competition, that industry as a whole suffers.

“People do not want to deal with a company that has a monopoly,” he says.

“In Australia, we support the underdogs at every chance we get – that is what makes this country amazing.

“Once the law was removed, the industry grew rapidly.”

Prior to the law being changed, however, only five per cent of Australians had ever rented a vehicle.

Five years later, that percentage had grown to 20, the highest market penetration rate in the world.

“I would say that having that law removed, which ultimately opened the door for greater competition in the car rental space, is my biggest business success to date,” he says. But it certainly wasn’t Mr Ansett’s only achievement in business.

During his 25-year term at Budget, he managed to implement a flat fee for car rentals, something that had never been done before.

“I thought it was only fair that consumers knew what kind of expense they were up for, so I implemented the flat fee,” he says.

“Soon after I did that, other countries followed suit. Today, there is not one car company in the world that doesn’t charge its clients a flat fee.”

PROTECT YOUR EMPLOYEES

Of course, Mr Ansett’s innovative approach to business did not just impact the car rental industry.

Budget was a company brand centred around its people, and developing a brand in this way is now a strategy used by companies worldwide, notably Google and Virgin.

“We tried to project ourselves as a fun company that would do anything for its staff and customers,” he says.

“We made a point of doing good things for our staff and then letting the media know about them. The best way to build a good company is to first build a good reputation.”

Budget was also one of the first companies in the world to offer its employees health insurance, complementing its various fitness programs.

Furthermore, it encouraged employees to give up smoking, rewarding them if they did.

“We wanted to build a business that had a ‘can do’ attitude,” he says. “We wanted to show our potential clients that nothing was ever too much trouble and the best way to do that was by showing them that we would do anything for our employees.

“We wanted to prove we owned and ran a company in which all employees were committed to excellence.

“Since that time, I have seen many other companies replicate this method, including Virgin. When Virgin burst onto the scene, they set their stall up on being a fun company that everyone wanted to work for. We did that too – just 20 years earlier.”

OPTIMISM IS KEY

While Mr Ansett and his company have enjoyed incredible success, he admits that the road has not always been smooth.

“At one of our lowest points, we simply did not have enough cars to keep up with demand, so we had to rent a car from our competition and then re-rent it at a cheaper price to our client,” he says.

But when the going gets tough, the key is to remain optimistic, Mr Ansett says. “Whatever we do, be it in business, sport or our personal lives, if we remain optimistic, be positive and have an expectant attitude, then things will work out.”

In fact, people can overcome enormous adversity if they remain optimistic. According to Mr Ansett, couple optimism with knowledge and experience and you have the ingredients of success, both personally and in business.