How to turn a family business into a million-dollar company

The Party People, Australia’s premier destination for balloons, decorations, costumes and party supplies, was once a small family business. We chat with brothers Dean and Peter Salakas to find out how they’ve used online channels and an appearance on Channel Ten’s Shark Tank to turn the family business into a million-dollar company.

Whether you’re planning a Minions-themed birthday, getting ghoulish for Halloween or decking the halls for Christmas, The Party People is Australia’s premier destination for balloons, decorations, costumes and party supplies. There’s a three-floor megastore in Sydney’s Drummoyne, a smaller retail outlet in Sans Souci, and a thriving online store – all supplying party goods across Australia.

Brothers Dean and Peter Salakas have been in the party business since they were two years old, using their time in the sandpit to create table weights for balloon decorations. Now aged 32 and 30, the pair is turning over an impressive $4.1 million per year with their family-run business, The Party People.

From clowns to e-commerce

The Salakas brothers have led The Party People to staggering growth; however, the wheels were set in motion by their mother, Mala, and grandfather, Peter Nikolas, back in the early 1980s.

It all began when Mala was asked by a friend to dress as a clown. She did, and Patches the Clown became an in-demand fixture. With a flair for catering and a willingness to help with the post-party clean-up, Mala identified an opportunity to host parties in a dedicated venue, providing a stress-free solution for busy parents. With her father’s help, she opened a party venue in Sydney’s San Souci.

Dean Salakas concedes that his mother was ahead of her time. “That was in 1985, before venues were a thing. People didn’t embrace the concept, but now it’s huge. She was a little too early. The party supplies sold really well though, and the business became a retail one.”

In 1999, with the store ticking over and the dotcom trend picking up, Mala took The Party People online. She enlisted the help of her oldest son, Dean, and some friends who were web designers. He says the site build cost around $10,000, “a huge investment at the time”.

Orders trickled in from remote areas and The Party People began to ship nationally using Australia Post. Dean and Peter, meanwhile, followed their individual paths through high school to university, studying business and exercise physiology respectively.

The online turning point

One of the major growth opportunities for The Party People came in 2003, when Dean had to undertake a thesis-style project for university. His timetable meant he could help more with the business, and it was the perfect case study. He began investigating online advertising. Coincidentally, he says, Google AdWords launched at about the same time.

“I implemented a whole lot of advertising initiatives, including Google AdWords, and my project turned a profit before I’d even finished. The business had just launched – we tripled sales overnight and that was just in the testing phase. We were one of Google’s first customers and it was very affordable, so I went crazy with it.”

Mala and Peter Nikolas decided to put the business up for sale in 2006 and in 2007 a buyer made a generous offer. The brothers had found success in their fields, Dean as a business analyst for Woolworths and Peter in the fitness industry. A casual Friday afternoon conversation between the two about the future of the family business took an interesting turn when Peter proposed they buy their parents’ business. “Within an hour, we had decided to go ahead and do it,” says Dean.

Once in charge, one of the first changes Dean implemented was to remove the business’s budget cap on online advertising. Sales through the website tripled almost overnight, again.

“We were already doing a reasonable volume, so the increase was a mixed blessing,” he recalls. “I was working 18 hours a day and sleeping for four or five. We couldn’t recruit quickly enough and we kept hitting roadblocks. We ran out of staff then we ran out of computers. Next it was space – our loading dock was our kitchen. We took on the shop next door and the garage behind the store, and began running the shop almost 20 hours a day to deal with orders. Eventually we ran out of room to grow, which led us to open in Drummoyne.”

From strength to strength

The Party People now boasts a team of 40 and Dean says sales are evenly split between online and in-store purchases. “Our strength online underpins our strong store performance. Our digital strategy is core to our competitive advantage.”

The brothers have played to their strengths, Dean managing areas like finance and IT, and Peter taking on people and resourcing. They’re both extremely hands on and Dean is quick to list the business’s agility as one of its strengths. “We’re always evolving online, it’s a work in progress. There’s an internal road map of enhancements to the site but you need to be reactionary. As soon as there’s a new trend, we’re there and testing it.”

Swimming with sharks

That tenacity is what landed Dean on Channel Ten’s Shark Tank earlier this year, a program where entrepreneurs are invited to pitch their businesses to a panel of investors with the hope of attracting a buy-in. Dean went on the show with what he says was a deliberately high valuation of the business and attracted the interest of Boost Juice founder Janine Allis. While he was seeking a $400,000 investment for five per cent of the business, Allis wanted 40 per cent. He upped his offer to 10 per cent but the pair could not reach terms.

Dean’s airtime was a boon to The Party People. It might not have ended with an investment, but it forced the brothers to look critically at their strategy and direction for the future, not to mention yet another increase in sales as online traffic spiked.

“I didn’t want to go on the air and get ripped to shreds by the ‘Sharks’, I needed to have answers to everything. One of our goals is to open more stores but in preparing for the show, we had to ask ourselves why? We had to look at the numbers, say ‘does it stack up, how much return do we get, is it going to be enough for an investor to consider us, is that a good return or a bad return?’”

The flow-on effect of a national television appearance is still being felt by The Party People. Dean says one of the most exciting things to come out of the show was the offers he received afterwards. “We’re now in discussion with various investors, from billionaires to people further down the chain. It might go nowhere, we’ve got no debt on our balance sheet, or we might give away some equity. We’re talking to people with some really exciting skills, but we have to wait and see.”

Either way, it sounds like just cause for a celebration. And what better way than in the company of The Party People.

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