Is knowledge power?

Confused?

I have seen the expression “knowledge is power” a number of times in blog posts recently. Jim Connolly is correct in saying that knowledge is only effective when you take action.

I believe knowledge is currency. It involves action, but it has to be the right action. Knowledge is what you use to pursue and gain your objective, especially in business. Therefore it has to be valid, which means that it has to have been tried and tested. In terms of improving your business it has to be proven, something which will work for you if you follow the method or process diligently.

I am always been sent emails about how to improve my sales. My deleted items folder is full of them. What I have learned to do is filter out the rubbish. There are some people who I respect otherwise I wouldn’t mention them or read their blog, but at the same time there are others who will invite you to sign up to some program which will help you to (like the seller, allegedly) earn $/£200,000 per year without working more than a few hours work a week. You know the sort of thing.

Especially for a start-up business person it is a confusing world out there. There are so many offerings. Some “knowledge” has no currency value because it is counterfeit. Knowledge is often confused with “belief” too. Belief isn’t proven. Practical advice from a successful person is proven. We learn from our mistakes but it is too expensive to make many.

Some offerings of advice for marketing, cost cutting, public relations or whatever it is will be be real deal. The only way to find out is to look at testimonials and get permission to speak to satisfied customers, preferably not those hand-picked by the seller. Unsolicited recommendations from people you trust are even better.

It really is a case of “buyer beware” (No Latin today) to find the real deals. There are plenty out there, and armed with valuable knowledge you can exchange it for effective action.

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King Canute and the future of business on the High Street

The Danish King

King Canute, or Knut or Knud is best remembered for commanding the tide to stop coming in, either because he believed he was so powerful that the sea would obey, or because he wished to demonstrate to his courtiers that he was human like all of them, and was bound to fail. He was a successful monarch of his time, so I believe in his wisdom and prefer the second version of the story.

I thought of our Danish King when out in our local village the other day. As it happens he may have been to our ancient village,  as his army fought a battle locally and

Winning near Canute's battlefield

camped only four miles away. I think that Canute would have realised that we cannot stand in the way of change, however much we dislike it. And our village is changing.

Byegone days

We have no independent grocer left. We have a small but good Cooperative supermarket. We are going to have a small Sainsbury store as well though how they can both be viable is beyond me. We still have an excellent baker who survives by being excellent. Aside from two funeral directors, the rest is mostly takeaway hot food; a very good fish and chip shop, three South Asian takeaways and two Chinese, one much better than the other. There are some other businesses hanging on, but as the passing trade lessens it will be harder for them.

We know that the shoppers now go out of town for food and clothes, or they go on-line. Although there is a slump in the construction industry right now, we know that more houses will be built to fill in the green bits of countryside as well as the ingress of retail parks. “Infrastructure” such as roads are then built. The trouble is there is no big plan or Big Idea. It is just a pressure of numbers and of population, but no planning beyond dealing with the next few years. Yet to me the one big project which is HST2 seems misguided.

Village museum?

I don’t think the country should be preserved like a museum.  In a way that happens when you have an area which is very limited, such as the island of Jersey. The planning laws for any new builds there are very strict, and the size of population is very much controlled. You and I if we are non-Jersey people cannot easily take up residence in Jersey. We could work there for a while if our services could be justified, but at the end of our contract we are on a boat or plane away. Therefore to the occasional visitor like me, Jersey has retained its character. We in the mainland UK and in most countries just can’t do that.

So we have to accept that the world is changing. You and I know that we have to adapt our businesses. Perhaps we need to work more on-line, whether selling gifts or our services. A lot of this is demand-driven of course.

Ten years ago I met all my clients. They sent me letters and papers. I sent them letters and forms. Few used email.

Now I do not meet all my clients in person although I prefer to and it involves less red tape. My clients email files. We have video conversations via Skype. I deal with queries using email and I send reports to clients on-line. I email forms. I submit on-line to Government departments.

Some clients still like paper, so they get paper. But some practitioners in my line of work became frightened by the on-line environment and quite a few of them retired. As recently as two years ago I took over a client from an accountant who wrote out all his clients’ tax returns by hand. How long must that have taken? How could he have remained competitive? The answer is that he couldn’t and he would have had no room to compete on value, which is what all of us providing professorial services should be doing.

Change or die

So we must adapt our businesses and be prepared to change as needed. If we don’t need a shop or any premises at all, we must bite the bullet. If we need to follow the supermarket and get new premises in the retail park, do that!

I like to think that King Canute understood that we cannot stand in the way of the tide of progress. I also believe that he would have still been good at strategic planning and helped Government at national and local level to be a little less haphazard in their own planning. What new plans do you have?

Innovation, sacrifice and the job trap

 

It’s cold out there!

Employee blues

I was in the tax business a long time as an employee, and in the corporate world we were also in the “business advisory” sector. As someone who has run businesses for some time, I realise how fundamentally useless the so called “business adviser” employees were, because really you don’t understand small business life until you have run a small business. And by small business I don’t mean one within the SME broad brush. I mean one with just a few employees, or with no employees and a few contractors, or one which is essentially just a self-employment.

I know that one-person bands are sometimes described as not real businesses (I think that is unfair) but one-person bands up to businesses with twenty to fifty employees face many of the same challenges. Yes, there is always a danger of generalising but most of those face the same sort of market.

Over the Christmas period I was able to chat with some of my former colleagues who still work for larger organizations, though some are in the same market as my rather smaller businesses. I know that some years ago a few thought about going independent, but in the current economic climate they say that they will hang on to their jobs. I think that is wise.

It’s cold out there

Starting your own business is at the best of times challenging. You need:

  • Some money for essentials
  • A plan of action (different from a business plan for the bank)
  • Marketing (where most ex-employees fall down whether former “business advisers”or not)
  • A good accounting system
  • The drive to succeed
  • Room for you in the market

The last is so important. So many established and formerly very successful businesses are under pressure. People are not buying new kitchens and bathrooms. They are not having their gardens landscaped. They are not visiting High Street gift shops or hot food takeaways in the numbers they did five years ago. Actually they are not visiting High Streets so much at all, economizing on fuel and price by buying essentials in big supermarkets; one-stop shops. Retail has moved on-line anyway.

Realism is sensible

Much as I love to encourage start-ups, room for you in the marketplace is the most important consideration right now. If you have a job you should hang on to it unless you have a really Big Idea. It would need to be an innovation where you can make your own space in the market, or you should be confident you have special expertise and know there is a shortage of it. It is no good trying to do what many others are already doing.

If you have a start-up, I will be pleased to help you. If you have lost your job and would like me to put my thinking cap on for you, give me a call. If you have had the Big Idea you know where I am.

Common sense pricing

 

Toyota Aygo

Toyota Aygo via Wikipedia courtesy of Rudolph Stricker

Value pricing

Now we all know (I hope) that when we offer a knowledge based service we bill for value. So if you deliver a huge cost saving to a manufacturing business by helping it re-source its raw materials you should charge it according to the value it receives in savings. If you offer a brilliant marketing solution that saves your client £50,000 a year you might charge a fair percentage of the first year’s savings and try not to be greedy of course.

When I worked for a large firm of accountants a client was charged £50,000 for saving £500,000 a year. The delivery cost was about a tenth of the fee, but the client was very happy.

Product pricing

However, if we are delivering a physical product or a program we need to be careful because our customers have a choice. I have an issue over some software. I like it a lot and have been a customer for years. However, the number of separate clients in its database has now exceeded a certain number and I have to upgrade to “unlimited” from the number of clients I have been paying for, rather than have another increment in numbers and another limited extra amount to pay for my software license. This means I have a huge hike in the cost of my annual license for this software.

You might say that as I like this software it is worth paying the extra amount, but of course it increases the cost of running my business rather more than seems sensible.

Jumping the ship?

Rather than buying the top-up to the license I have purchased a small limited license from a competitor for the extra number of clients I need. You know what? This software I am trialling is rather good. Also, if I were to buy their “unlimited” license it would cost much less than the unlimited product of my current main supplier, by which I mean some hundreds of pounds.

What do you think I will do? Well, it is most likely I will make the switch. I understand that my data can be moved over to the new program. I am not going to name names of software providers. It is just that if the price structure of the current provider were more sensible I would not even be thinking of leaving them, but why would I pay a huge amount of money for capacity I don’t need? It would be like buying a huge turkey for Christmas and at considerable expense, just for my wife and me. We would never eat it and would be sick of the sight of turkey before long.

Price comparisons

What I am driving at is that if your product isn’t a lot better than other people’s, you cannot charge a load more for it. Even if it is better, it has to meet the customer’s need. If you can buy the same product cheaper at Aldi, why go to Waitrose? Well, I concede you might enjoy the Waitrose experience, but you wouldn’t pay hundreds for it; at least not all in one go.

Why pay more for a Peugeot 107 than you would for a Citroen C1 or a Toyota Aygo? You wouldn’t. They are basically the same car doing the same thing.

So your product must be better than the others and it must meet the customers’ needs without their feeling they are spending money for something they don’t need. Because they won’t spend that money if you don’t get your pricing right.

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New Year business predictions – why we should treat them with caution

 

The slow train to nowhere?

Clairvoyants

Has your in-box suffered an influx of New Year predictions? Mine has. Some of the subjects are predictable of course:

  • How will the economy fare?
  • What trends will we see in the property market?
  • Where will technology go? By which they mean computers and gadgets.

Now of course we can make quite long term predictions in a vague sort of way and all credit to John Elfreth Watkins for imagining in 1900 many of the sorts of things that are part of our lives today. But of course dreaming about how the future might be is quite different from predicting how we might get there or knowing the technology that might be involved. Mr Watkins did pretty well; no doubt about that. It is the chain of events to get there that is impossible to know.

Railroads and sun roofs

Advance planning involves making predictions of course. Hence the newly revived high speed train link (HST) between London and Birmingham and ultimately beyond is a breathtaking gamble on an anticipated future. I am not part of the campaign to save the Chilterns from a blight although I know some of the countryside and see the opponents’ point. What I see is a huge amount of money being spent on a future world which may never happen.

What will be the demand for a quicker rail service in 2026 or 2033 when it reaches Leeds and Manchester? They are even projecting to 2043 in terms of “benefit”, demand and fares. That is over thirty years in the future. Thirty years ago those of us who were here had a Britain with a coal mining industry (maybe we shouldn’t have had), had not predicted the Falklands War although it was only a month or so away, had no mobile (cell) telephones, and had not started the fashion of carving holes in our car roofs so that we had a “sun roof”. The internet as it is today or was fifteen years ago did not exist except as an internal network.

Visiting Auntie Doris

So I could make some predictions about the future of the high speed rail system. Of course people will still want to see family in person even if they can video conference them, even though we might be transmitting and sharing the atmosphere and smell of another place by then. Will rail leisure travellers need to get there quicker?

I think the high speed aspect will not be needed because frankly people don’t need to travel so much for business unless they are hands-on engineers or architects etc. Most of us don’t need to commute except that somehow the cultural shift hasn’t happened yet to recognise that fact. But that shift will come within much less than thirty years. That’s my prediction.

Of course I may be wrong and have stuck my neck out. However, I am not sticking it out nearly as much as the HST planners.

A sticky wicket

Five years ago few predicted the credit crunch. Two years ago we expected there would be a recovery in the economy by the beginning of 2012, but we didn’t anticipate the Euro crisis. So never mind the predictions re investments, property prices and the like.

We must rely on our business experience, work at our marketing and change if it isn’t working. We must ask our peers for help. We must play according to the current conditions as a good cricketer batting must adapt to the wicket and the deliveries bowled. It is no good thinking about making a century when you have made a few runs in a damp atmosphere.

I think we have to accept business is difficult now and use all our skills together with all the help we can get to deliver a better service than our competitors. Therein will lie our reward. Defend when we have to and attack when the time is right.

How is your batting form?

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Advice, logic, principles and beliefs

On our bikes, or at least Boris's bikes. There is no excuse!

Yes, business is tough at the moment, so it is hard to believe that some owners are making more obstacles for themselves rather than trying to make running their business more profitable and less stressful. Somehow people get ideas in their minds which prevent their taking action. For example:

  • Social media marketing wouldn’t suit my business.
  • Email marketing would never work.
  • I don’t believe in cold calling.
  • Networking is futile because you just see the same people.
  • Advertising is pointless now.
  • A proper customer database is a waste of time (really!).

Of course not every strategy works for every business. Just the same the list above and other imagined obstacles prevent so many of us from taking action, because we don’t have open minds, because we tried something once for a short time and it didn’t seem to work, and because we are afraid to ask for help for fear of embarrassment.

Life is hard enough for so many businesses because their owners don’t take action. No strategy works if you don’t give it a fair crack. Deciding which one or ones are best is an area where you may need advice. Do you need advice? Can I help?

 

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Why we must manage our business relationships carefully

Arthur Schopenhauer daguerreotype

Arthur Shopenhauer - Image via Wikipaedia

“Almost all of our sorrows spring out of our relations with other people.” – Arthur Schopenhauer

Certainly I think that we can bring misery on ourselves by bad behaviour which upsets others.

The other day I was in a local store which is part of a small chain. I was browsing in the aisles when I heard shouting. As I rounded a corner I saw a woman with a dog on a lead leaving the shop. She was clearly upset at apparently having been informed of a “no dogs” policy. The store is one that has only a very limited amount of food. It caters more for general household items.

The only thing I actually heard the dog owner say was “What? You try picking my dog up!”, presumably in reply to some comment from a female shop worker who then appeared in pursuit. I really mean “pursuit” because she followed the dog person out of the shop and about fifteen yards up the street, shouting at the top of her voice all sorts of abuse.

Now we all have difficult customers and prospects. I have no idea what transpired prior to the scene I witnessed. However, no matter what the dog owner had done or said, I was more appalled by the behaviour of the shop worker. Of course I left the shop immediately and did not make the purchase I had intended; nor will I shop there again.

No matter what flak we take in the course of our business life, we cannot afford to react adversely in temper, in spite, in revenge or due to our general dislike of a person. It does us no good getting emotional and it wastes mental energy; energy which should be applied to our business an personal lives.

It is not cowardly to bite our lips and move on. It is right to look to the future. It is wrong to shout at a customer or embarrass other customers. It is wrong to flame people on-line no matter how wronged you think you are. Bearing grudges wears us down. Bad temper wears us down and it drives customers away. Yet although the bile exhibited in the local shop is rare, all too often I see unpleasant comments in on-line forums, on Facebook and even on professional websites.

Reputations are built with care and through hard work and planning, and through displaying good character. How easily are they destroyed!

Have you seen any bad behaviour recently? How did it make you feel?

Related post: Online reputations again

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Small business is a life of hard knocks: discuss!

Small businesses under fire

I wrote a little while ago about the tough economy  and what might we do in the face of it.  We can all write the best advice we can and we can try to take advice in a positive way. However certainly since I have run my own businesses these are the hardest times we have faced; harder than a couple of years ago even.

I am always listening to what is going on. I hear news from my colleagues in the same businesses, from other businesses through networking on-line or otherwise, and of course from my clients. The word is that people (by which I mean consumers of our products) are spending only on what they see as essentials.

Of course what our previously potential customers see as essentials may not include our offerings although they should. It is difficult in my case to persuade people to spend money in order to save more. They just can’t get past the prospect of paying out even though we can tell them the benefit of saving more money even before they have paid us. And of course being in recession is all about confidence; the herd instinct worrying about Euro-land, borrowing (even if you can persuade the banks to lend) and financial commitment of any sort.

We have come to a stage where fewer people are prepared to purchase a new car or have a new bedroom fitted or a new bathroom or kitchen. So life is a struggle for car dealers and well-nigh impossible for small independent fitters of bathrooms, kitchens and bedrooms. Some may be making almost no sales at all and word on the ground is that this is true.

I am not going to suggest that there is an easy solution. I wish there were. I think that business owners do have to think how to adapt their skills. Perhaps our home and bathroom furniture fitters and plumbers should emphasise the skills they must already have to repair existing fittings. Things will need mending in order to continue to function and repairs are usually essentials in any consumer’s book.

If your business has dried up you need to reach out to your friends for help and advice. Don’t be proud. We all need help sometimes. Who do your friends know? Can they get you in where a big corporate is offering poor customer service?

Can you compete for insurance work where there has been damage to property if you are in the home fitting line of business? If your work has dried up, can you spare time to help a charity, which will enhance your reputation and maybe get your business recommended for paid work?

No, there is no easy answer, but be adaptable. Don’t sit in your office or home feeling gloomy, because gloomy doesn’t pay.

We have diverse businesses, so there are diverse solutions, but they are all based on staying visible, approachable, adaptable and practical. Give it a go. How are you managing?

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