Verbal understandings are not contracts

 

coppersIn my business I think it is important to have agreements in writing with my clients so that they know exactly what I will be doing for them in conducting their affairs (and what I will not be doing). I have always said that verbal agreements are no use especially when the parties fall out or one side has a perceived issue.

Many of us look after family members or agree financial arrangements with them, and somehow it seems less comfortable to ask them to enter into a written agreement. Yet why should they be any different? They are people who may have ideas you have not fathomed.

So I confess. My wife and I entered into a financial and verbal understanding with a family member ten years ago, and when it came to the crunch last year, he reneged on the agreement. That has cost us a lot of money. That is the point: where money is involved, people may have an eye for the main chance when greed, and other motives unknown us, kick in.

If you are relying on a family member to repay you or at some stage meet certain financial obligations, have it all in writing no matter how uncomfortable it makes you feel. That is an insurance we all need.

As for us, we have again learned from experience. Trust no one where money is concerned, and get it in writing when you need to. Onwards and upwards!

 

Stress and the small business owner

origin_544510865 (2) head scratchStress is a major threat to the health of a small business, quite apart from being a threat to the owner suffering the stress. It affects productivity, it affects creativity, and it can affect the way we interact with our customers and our staff. It is generally bad news.

We have all had those times. I have had a very difficult few months myself, being involved in some litigation unrelated to my business. That is all over now, and although we have (very unjustly) lost our claim against the other parties, we can try to put it behind us.

How did I get through? I worked as hard as I could with my clients, but due partly to the stress itself but also the work involved in putting our case together, my creativity and the amount of my writing and blogging took a bit of a knock.

I coped by talking to sympathetic ears and both my wife and I are grateful for our friends and the support we have had. I have also used my walks and time off to relax a little, although being under pressure my normal “bright ideas” that I have when out in the fresh air have been somewhat eclipsed by the darkness of the court case.

It is all over now, and although we have lost and there are costs, at least we can move forward, and I can again enjoy the business game as I always have.

How do you cope with stress when it strikes your business and you?

Getting the sack

Are you ready?

Are you ready?

Getting the sack is what launched my “career” as an independent person. Yet as an employee, if you are “terminated” it is a terrible shock, the stuff of nightmares. I had a bad dream about it last night; being called in to the boss and taking only a few seconds to realise what was going on.

I must confess that when it did happen to me, I told my then boss exactly what I thought about him and the firm that was getting rid of me. I quite surprised myself, and even looking back, what I said was uncharacteristic even bearing in mind the provocation.

Immediately after being told I had to clear my desk and go that very evening I knew something very serious had happened in my life. I did not know quite how serious because I supposed that being at the top of my game I would find another post quite quickly.

How wrong I was! I was “over-qualified”, I did not have the right sort of education decades earlier, my skills did not quite fit. What no one said was that I was too old to get a new job, which was what most employers thought when they gave a reason not to employ me or to not even to grant me an interview.

Never mind. As you know I had to get myself a new income, and I started out to earn some money. Helped by my wife, we ended up with four businesses entities between us, and four distinct “flavours” or types of business. Of course not all of them are a roaring success. One business earns much of the money, but the others in different niches help potential customers decide what they want, and even the biggest earner comes in two “flavours” through separate websites and marketing.

Getting the sack, getting fired, being terminated or whatever you want to call it is not the end of the world. You have your brain and you have your experience, and if you cannot get another job or do not want to work for someone else, you can really succeed as an independent. “Living on your wits” is perhaps over-dramatic, but if you have become unemployed it really is a starting-point for the rest of your commercial life and not “game over”.

Be positive, think what you can do best and what you want to do, and get started on your whole new life as an independent business person.

The Success Shop?

Hairdresser and restaurantOpening a new shop is a daunting experience, and if you are going to do so then you must plan very carefully. I have already mentioned that the level of overheads is an important consideration. Property taxes and especially rents are a very large cost beyond which you must raise your turnover by a very substantial amount in order to have enough profit to live on.

If you are not sure what sort of business you want, have a look at a franchise. You have to make sure that there will be enough profit for you after paying the franchisor, but the advantage is that you will have a tried and tested business model. Talk to current franchisees in the sort of business that interests you.

Decide whether there is a need for your shop in the local community.

For a new shop you need footfall. Unless you are very specialist then you should try to be on a busy street on or near the main drag. Of course that will put up the rent.

You need a marketing strategy both before you open and ongoing. Get someone experienced to send a press release about your Grand Opening. A feature in the local paper will help you hit e ground running. Have some special offers in your first week and mention these in the press release.

Have flyers with special discounts sent round to households with the local newspapers, but make sure you are still making money and leave yourself a decent profit margin.

Many shop owners say they have not time to go networking and they need to be in the shop behind the counter early in the morning. I would suggest breakfast networking. We can all get up extra-early one day a week, can’t we? Friends in the business community will refer business to you, and of course you must reciprocate or get your referrals in first to build your relationships and your income stream.

Remember to consider:

  • Tried-and-tested – a franchise?
  • Footfall and passing pedestrians.
  • Local parking.
  • Publicity
  • Pre-start-up and ongoing marketing.
  • Networking with the local business community.

We can achieve most things with a great plan. You must do your homework before rushing in, but how exciting to be making a difference in an independent business!

The Failure Shop

Photo by Jon Stow

Photo by Jon Stow

There is a new business in our urban village and I really hope they are successful. The owners have taken a shop at the end of the “main drag” and we have a new florist. It is quite a good position for passing trade. I bought a pot plant from them which was on display outside the shop, and perhaps the position will suit a florist more than the other businesses that have occupied that shop. Oh, yes, there have been quite a few.

It is important for any new business owner to do their “homework”. How much is the rent? Will the turnover sufficiently exceed the running costs to make a good enough profit for a “living wage” for the owners? How well connected are they to encourage visitors from outside the village to pick up the telephone and order from them? Have they thought about networking? Can they crack the corporate market and supply flowers to office reception areas? Any long-term contract can be very lucrative for a florist.

Being specific, the shop now occupied by the new florist has previously been occupied by two different estate agents and by a bookseller, all within the past five years. One would have thought that passing customers or “footfall” might have been quite good, but those businesses have gone.

I can see one big obstacle for our newcomers. There is already a very well established florist in the village by the entrance to the main shopping car park. That florist is very good, and my wife and I have bought from them on many occasions. Our customer loyalty tends to be towards them, naturally enough.

I do hope there is enough custom locally to support two florists well, so that “The Failure Shop” no longer has that title in my mind. The owners seem like nice people, and I wish them well. They will have to go several extra miles, but maybe they can.

Not turning up

Pookie & pondMy wife and I have had problems recently with business people not turning up when they said they would. First it was the pond guy, who said he would come on the Saturday morning, but didn’t. Then it was going to be the following Saturday, and it was only on the third Saturday that he appeared.

He had been responsible for putting in the pond and when we have problems we expect support. The trouble for him is that if we get another pond person in to help, she or he will ask why we have not stayed with our first pond guy. If we are truthful, word will get out and a reputation will be damaged, even if it is what one might call self-harm.

We have had the same issue with a “tree surgeon” who failed to turn up to inspect the damage he caused on his first visit. He was obviously a “cowboy” as we can now see, and it is a pity his bad reputation did not go before him. It will certainly go after him.

Of course doing a bad job is going to affect anyone’s reputation. People who do a good job when they do turn up still damage their reputations badly if they fail to make meetings or assignments.

Going the extra mile will always help the standing of any business person. Turning up at the right time is the essential first step towards perfect service.

Is working in your business just a chore?

Look around!

Look around!

This morning I went out for a walk in the woods, as I often do. It has been a lovely day today. The birds were singing and the woods are lush and green. There were plenty of squirrels, babies and adults, going about their business. There were thrushes and spectacularly smart, colourful jays.

A woman came walking the other way, with her dog. She was oblivious to her surroundings. She had her earphones plugged in, listening to her music. She stared straight ahead. She did not look at her dog. She did not look at me. She did not see the wood or the trees or the wildlife, and certainly she did not hear it.

We do not have a dog now, but I was brought up in a house in which we always had dogs. The reason to have a dog is for the companionship and for the pleasure of taking it out for a walk. I know this.

Yet to this person, walking her dog was clearly boring; a chore. She took no pleasure in exercising the animal which probably thinks much more of her than she of it. What is the point of her having a dog?

I wonder about people who see running their businesses as a chore. If they are getting no pleasure from it, what is the point of allowing it to occupy their lives?

You might say that the point is that they need the money. My point is that if running the business is such a chore, they cannot be doing it right.

Are they working all hours? They need to cut down.

Could they be more efficient in delivery, thereby cutting the hours worked, cutting the cost of delivery and increasing their profits that way? They have to consider whether they are not charging enough for their product or service, or maybe it is the wrong product or service.

Perhaps they should change what they provide. Perhaps they should change everything because it is no good living a life of drudgery. It is no good seeing work as just a chore.

 

No regrets – but learn!

I guess we all have memories of matters we could have handed differently. Should I have gone to that college? Should I have tried harder with that girlfriend and might I have married her? Should I have chosen that career? Should I have taken that job?

The truth is that we will never know the answers to those questions, so there is no point in having regrets. We had an education, we may well be in a happy relationship now, we have made the best of our career and have probably been successful. What is there to regret? We must have learned lessons along the way.

Each time we chose a path, we did not know where it would lead, or where we would have ended up if we had gone the other way.

I have made many mistakes in business. I have wasted money on advertising. I was once scammed out of some money by a bogus “magazine publisher”. I did not accept offers of help when I should. I misjudged a client who never paid me all he owed, and it was quite a lot too.

We have to take our mistakes on the chin. As long as we learned a lesson each time, we have gained in experience and will know better next time.

It is no good beating ourselves up. Lessons learned are profitable and lead to more profits for our business by avoiding mistakes in future.

You don’t have any regrets, do you?

Avoiding taking the rough with the smooth in your business

iStock_000020557146LargeI started writing On Our Bikes to help others who, like me, found themselves with no work and had to go out and find it as an independent business person. I had no experience of running my own business and had not expected to have to do so.

It was for me a really tough position to be in, especially when like many, I expected that someone was bound to want my services. Of course I did not understand that clients have to be convinced that they need us, and understand our value to them.

Someone I have known for quite a few years through social media and face-to-face networking is Rory Murray. He has written a great Kindle book, The Saw-Tooth Dilemma (this is not an affiliate link) on getting work as a consultant and how to avoid the “feast-and-famine” scenario so unfortunately familiar to independent service providers and consultants.

Here is my review of his book on Amazon:

“Rory has written a roller-coaster account of his feast and famine experiences in work opportunities, and most importantly he tells us how to avoid them. This is a very personal account which would help anyone who is unemployed, who is a contractor or a consultant without a guaranteed stream of work. You will learn how to apply your social skills to gain work and how to use the on-line networking sites to best effect.

I cannot recommend this book more highly.”

Other reviews are here.

This book gave me a lot of food for thought, and I have run my own businesses for a dozen years now. We are all learning all the time, or we should be.

Do buy the book and download it onto your Kindle, PC, Mac or whatever device you choose. As I said, I am not on commission for this. I must really mean it, don’t you think?

Come back and tell me what you think of it.

 

School’s out

The last bell

When I was at school, back in the mists of time, even when the last bell rang we could not pack up and leave the classroom until we were dismissed by the teacher. It might be different now of course. However, a desperate rush for the door would not seem to indicate much enthusiasm for the subject we were being taught.

Not far down the road is the main office of a local vocational training centre. At 5pm there is a veritable stream of employees and possibly some students out of the door and down of the road, many lighting cigarettes or on their phones as soon as they step out of the door. I find that very surprising. I would guess that there is not much job satisfaction there if everyone is so eager to get away, but it seems these people are not alone. The Cabinet Office has apparently found that there is a huge variation in job satisfaction.

Getting satisfaction

Of course I am not surprised that those in authority have more satisfaction than those that do not, and clergy as top dogs work mainly at their discretion, helping people, which must be rewarding. However, farmers come pretty high despite lower incomes, and I suspect that is not so much because they are in charge of others, but because they are actually self-employed and more in control of their own destinies unless weather takes its toll.

We small business owners do have a considerable advantage in having job satisfaction, don’t we? We make our own decisions, do not have reason to resent the boss (unless we really hate ourselves), take time off when we decide to, and should anyway be running a business we enjoy.

I did not originally choose to start my own businesses, but I am so glad that it happened. After all, as referenced in the BBC article, while we should make good profits, our social well-being and life satisfaction are the main elements in being happy in our work. That stems from our independence rather than dependence on less considerate employers. Aren’t we lucky?