Special offers to be taken with a pinch of salt

Obverse of the Series 2006 $20 bill
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Do you receive at least daily loads of emails offering you the secret of how to make vast amounts of money a day for working only four hours a week? Do you get telephone calls from overseas suggesting you invest in some penny stock that is about to make it big? Are you sometimes approached by quite good business friends with the offer of some wonderful moneymaking scheme they have heard about and are gullible enough to try to rope others into?

These are all penalties of being in business and having a web presence. We give the world opportunities to contact us, but we are in business and cannot filter out the chancers except the serial spammers.

Now, I don’t doubt that some of the tales that are woven have some basis in truth. An experienced day trader may make a lot of money in four hours though it won’t be without investing a lot of time in watching the markets even when not dealing. There is a risk of losing of course, but that is just glossed over in the sales patter.

The penny stock offers are known as “boiler-room scams”. I don’t know about boiler-room, but most of these people sound as though they are calling from the bottom of a well or a Chilean mine, no doubt due to roundabout routing of their calls to avoid being traced.

The other week I had occasion to examine an apparent way of saving large amounts of tax. In this case there was an outside chance it could work before the tax authorities leaped on it, but it would have required a very bullish taxpayer to try it and you could bet your bottom dollar that the offshore providers would have disappeared long before the angry taxpayer turned on them.

The truth is that all these “opportunities” pander to the greed of those drawn in. There will always be money and probably quite a lot of it to be paid up front. That is money which most likely will never be seen again.

Take care out there, and remember that if something sounds too good to be true…

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Loss of status issues for the newly self-employed

Signpost at the Cape of Good Hope

I remember well what it was like to find myself without a job, not able to get one and with the prospect of “getting on my bike” and earning a living as a self-employed person. I had not planned to be self-employed; it was a matter of survival, which I have discussed before.

In the corporate world of larger organizations we have the concept of status. We know our place, and we have worked hard to get there. I had various titles such as “Manager”, Senior Manager” and “Senior Consultant”. Once I thought these had some sort of cachet; I guess the main purpose was to define our roles, and so that we knew who to report to and others knew that they had to report to us. There are other reasons for titles of course. In the accountancy world, especially in larger partnerships, the title of “Director” is dished out to those who think they should be partners but haven’t been offered this status; it helps them feel better than being a senior manager but really doesn’t have any other meaning.

In the small business area titles are irrelevant to the clients and customers, and one has to get on with building a business. Just the same, if someone had been made redundant it takes a while to recover the self-esteem had when he or she had a designated title. It is bad enough feeling unwanted when made redundant, but not even knowing by what title to call yourself is very hard indeed.

Strangely, many people find it very hard to see themselves as the boss and in charge, and it may be a completely new experience. Of course being in charge has a lot of responsibility, not least in earning a crust to live on, but new business owners amongst those who have lost their jobs need to recognise the freedom they have to make their own decisions. It should be liberating and invigorating, and even if we make the wrong decisions sometimes at least we can change our minds. In the corporate world it can be very frustrating implementing someone else’s wrong decisions.

Running one’s own business can be so much more satisfying than being an employee in someone else’s business. We just have to throw away the conditioning and forget the grand titles we used to have. Just call yourself the Boss. Don’t you agree?

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Unemployment, qualifications and aptitude

On the local news on TV there was a feature from a seaside town about the high level of unemployment. One guy interviewed complained he couldn’t get a job despite being a qualified bricklayer, gym instructor and IT technician. Now I know there is something known as a benefits trap and there may not be that many full time jobs in those disciplines, but a few postcards in newsagents’ windows would surely bring some work in any of these areas of expertise. It would also show continuing experience for a prospective employer when the jobs market picks up. If the guy were lucky his bits of work from the three areas could add up to a full-time occupation. It certainly sounds like a waste of talent.

Am I being harsh? Is this another example of the dependency culture? Should he be on his bike?

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Budding entrepreneurs should take care of their redundancy payments

Cheque sample for a fictional bank in the Unit...
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With many firms downsizing there are many people, often in their late forties or into their fifties who find themselves unexpectedly with time on their hands and also a fat cheque as part of their compensation package. Some may have several tens of thousands in their bank accounts.

Few are happy to retire and put their feet up. Spending more time with the family may be a convenient euphemism for politicians who have been kicked out of office, but actually for people with active minds, boredom soon sets in. It is then that there is a danger of being lured into something which may eat some or all of that redundancy payment without any lasting benefit.

There may be an attractive offer for a franchise with “guaranteed income”. There may be an alluring advert in a weekend newspaper offering training as a “consultant”. There may be an offer of high returns from a property business. All should be viewed with perhaps not suspicion, but at least with healthy scepticism.

If you are looking at an opportunity to start a business:

  • Think whether it would suit your skills
  • Consider whether you can meet the demands on your time
  • Ask for references from other people who have gone down that road
  • Check that the income suggested in the blurb is being received by those other people (they may be embarrassed but if they are you have your answer).
  • Consider whether any turnover-based levy from “Head Office” will eliminate any profit unless you work 24/7.
  • Remember that if something seems too good to be true….

You may find just the right thing, but do be very careful and choosy. Keep your money until you are absolutely sure you are doing the right thing. Remember that very plausible scammers roam amongst us. Have you tripped over any?

(C) Jon Stow 2010

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The right market for a business start-up

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When we are starting a business it is easy to take on every prospect who comes to our door and every project we may be asked to do. It is easy for me to say that it is important to be selective, but I have been around long enough to know that we do need to be choosy.

Whatever business we are in we need to decide what our market is. It is very tempting to take on a lot of small value bits of business, but they tend to be fairly routine and unlikely to lead to bigger things and bigger fees later. Large volumes of small customers or clients also tend to be very labour-intensive. We are likely to create a treadmill for ourselves, especially if we offer a service which will be called upon over and over again. Repeat business is worth seeking out, but repeat business which occupies all our time tends to keep our income down.

If we are choosy we can look for clients and customers who appreciate the individual touch and a customised service. We can charge higher fees because we know our clients value us and value the service. Value is what a good client wants and appreciates. Value business is what allows us more time for seeking new and valuable business and even more importantly allows us some leisure.

Knowing what our market is, offering value especially in a niche area not only sets us out from the crowd; it allows us to leave the crowds behind when we need a little downtime.

Don’t you agree?

© Jon Stow 2010

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The right business to start up?

People start businesses for different reasons. It might be to fulfill a dream such as running an art shop or an old-fashioned confectioners, or because they have been made redundant and think they are good enough at what they do to have the same type of business on their own.

There should always be certain factors our budding business people should think about. Will there be a demand for their product or service? If they are redundant from a company in which they used a similar skill to that which they will be using in their own business, the market may not be there; that would be why they were made redundant in the first place. In the latter scenario it might not be hopeless in that often larger corporates waste a lot of money which they reflect in higher charges so a small business run efficiently may be able to cut in to their remaining market. It needs thinking about.

Running a small business is hard at times. Small business owners have a lot of responsibility. Unlike in a larger corporate environment there are no safety nets if the owners can’t work I would not want to put people off, but all small business owners need to be able to deal with problems and think on their feet.

So, if we really want to run our own business, maybe we need to turn away from what we did before. Do we have an interest or a hobby we could turn into a business? Are we ex-insurance salespeople who are good at carpentry or kitchen installation? Are we former bank employees who are already into property letting and could become a letting agent? Are we tyre and exhaust fitters who know all about making and selling scale models of railway locomotives, aircraft or boats and could be a full-time EBay dealer?

DC3 Scale model - Photo by O-VMikkel

I have started businesses myself; several of them. I was good at tax and started my own tax consultancy. It took a lot longer to be successful than I had thought it would. I learned to be flexible and start other businesses too, based on my “life skills”, to ease the pain.

Starting a business takes a lot of thinking about and I learned from my mistakes. I hope it can help to learn from my mistakes too rather than have to learn from your own.

© Jon Stow 2010

Related posts

Being in business is not a game

Some things start-up businesses need to know

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Business start-up planning and taking responsibility

Planning to start a new business is not easy. At the outset we need to have a real plan, and not just for the bank. We should be sure there is a need for our type of business, a niche we can fit in, and know who our clients or customers will be. Whether we realize it or not, we have to establish a team. We need our bank manager, we need a marketing person, we need a web designer, we may need an SEO expert and we need an accountant or tax adviser. There may be other people too in our team. If we are in retail then we need a supplier or several. All those we need even before we think about perhaps taking on employees.

We need to establish dialogues with each member of the team, and we sometimes need them talk to each other. Above all, we must tell them what we need from them and tell them what they need to know in order to help us.

All too often with new businesses I have seen them get into trouble or even fail because their enthusiastic owners simply forgot to communicate. They hate their web design, their website is not found because their SEO expert did not understand their business or they miss an important deadline relating to financial issues. If their advisers don’t know what they want, they have not sent them important letters from Government Departments because “they assume they would know”, and if the new business owners don’t understand the basic principles of running a business and do not ask for help, then they will probably fail, and failure is expensive in financial terms and for morale.

In the end it is all about communication. Tell your advisers everything, even if you think they ought to know. Good professionals generally won’t be insulted. If they roll their eyes it will be in private. At least you will know that they are in the loop. Leave nothing to chance, don’t be too part-time, and you will have a sporting chance of success.

Do you agree?

© Jon Stow 2010

Related posts

Better to have a business plan than have your dreams shattered

Why we need to have the right business in the right place

Being in business is not a game

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How will your customers find you?

It struck me the other day while I was waiting for a hair cut that there are different ways of attracting customers. Some businesses are totally passive in their marketing, some can get away with only a little marketing, and there are those who will not be noticed without taking the trouble to market in the ways that suit them.

A men’s hairdresser (barber if you prefer) on a main street may come into the first category. They open a shop, potential customers notice it and decide to give it a try. If they have a good experience they will come again and will recommend the place to their friends. Following on from having a business in the right place for its type in geographical terms, a good service will bring its rewards. A convenience store in a good location has the same attributes, but in a popular location this sort of passive marketing has its cost in the rents or cost of the premises.

Then there is the sort of business that needs recommendations, but also needs a fairly central location, though not necessarily in a prime position to catch passing trade. A firm of solicitors (lawyers) or indeed a useful hardware store might be in this category. They need to advertise, could do with some networking to build a reputation, and have to provide great customer service to get great recommendations and word of mouth referrals. No one just drops in to a firm of lawyers on the off-chance. People go because of a name they have heard through advertising, or on recommendation.

Then there is the third type of business. It does not have the main street location. It may be out-of-the-way. It relies on the ability of the owners and employees to provide a great product or service. It might be a country restaurant, it might be a firm of accountants and it might be a country farm shop selling local produce. Then, there will have to be very active marketing to get known, a concerted campaign, publicity, networking with many other businesses, a good website and so on. Again, great customer service is essential to build reputation and gain word of mouth referrals, but a business like this needs to get customers in the first place.

All this seems obvious, but many new businesses do not understand which category they are in. Across the road from the men’s hairdresser is a new gift shop in place of a jewellers which went out of business. On the same side of the road as the hairdresser was another gift shop which also went out of business. Are the new gift shop owners marketing as they should, getting out of their premises to meet people to tell them about the business and helping others along the way?

The trouble is that what might be a prime location for a hairdressers with ready-made business and trades people passing is not a prime location for a gift shop, which is less likely to benefit than the hairdresser. A gift shop needs to differentiate itself from the rest, perhaps rely on the personality and personal touches of the owners. If people don’t know about it the business will fail. Are they treating their marketing seriously?

It worries me and when I have a minute I will visit the gift shop to see if I can help.

Do you agree with my perspective? What do you think?

© Jon Stow 2010

Related post:

Why we need to have the right business in the right place


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Some things start-up businesses need to know about

When we start our business, most of us have a good idea and a plan to carry it out. Everyone should have a plan, but we need to be flexible enough to alter it according to circumstances. What no one tells us if we don’t ask is about all the mistakes we might make which can cost us money. It is always useful to be armed with a few tips, so here are some things I have learned.

1. When thinking about advertising and marketing, consider the best strategy to promote your business. What do others in your area of business do, and does it work for them? I thought that it would be useful to be in Yellow Pages (or the on-line equivalent, Yell.com). It cost me a fair amount of money until I worked out that these sorts of directories are really only effective for tradesman and specialist retailers. This leads me to:

2. You may find that one of the best ways to find new business is to go out networking. This involves getting out of your comfort zone a little, especially if you have been an employee and you are an introvert.. There is plenty on this site about networking and vast amounts of information available on-line, so look at BNI and other breakfast groups, and think what most suits you in terms of networking: formal, less formal, morning, lunchtime and evening.

3. Do not be afraid to ask for advice. If you have a problem, it is not a failure, just a learning process. Most people will be happy to make a suggestion.

4. Going on from item 3, many of those who can help are in your business. Do not look on them as competitors. They are colleagues who have the same issues.

5. There are quite a lot of nuisance telephone callers. I do not mean the cold callers in general. They have a job to do. However, deal firmly with the really pushy ones, because they will often try to sell you something you don’t need. If the product or service sounds useful, do some research and call back.

6. Never give your credit or debit card number to a cold caller. It sounds obvious, but it is an easy thing to do in a weak moment.

7. Some cold callers are out-and-out scammers, or crooks. They will try to sell you advertising in a police or fire service magazine or in a magazine of a charity, or ask for a donation to help the poor children in your area. Any of these is a red flag. The magazines probably don’t exist or if they do, they have nothing to do with the scammer. The charity for children will be a fiction too and someone has your card number if you are not careful. If you are suspicious, ask for a number to telephone back, or ask for the name and address of the company calling and the name of the owner. Any resistance to this and you know you were right to be suspicious. I fell foul of this trap once, too.

8. Do not borrow money against your house, and if you do borrow make sure that the payment terms are reasonable and your plan really supports the repayment schedule. Don’t chance it because the worry isn’t worth it.

9. If you are not up to keeping your accounts in apple-pie order, get someone else to help. Do not leave it to your accountant at the year-end because completing a year’s accounts from scratch can be costly. A good bookkeeper is well worth the investment.

10. Make sure you have all the insurance you could possibly need. Of course things shouldn’t go wrong if we are careful, but sometimes they do. If we are insured it should not be a problem, at least in financial terms.

None of us gets everything right. We learn and move on, and we ask for help when we need it.

One thing we can say is that running a business is never dull. What pitfalls have you seen along the way?

© Jon Stow 2010

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Breakfast referral networking and gaining trust

When I started out running my own business I was lucky enough to be recommended to join BNI. In terms of business, it was not a huge success for me mainly due to local reasons, but it was great training for much more successful breakfast networking later; successful because I have met great people and won more business.

Networking for business involves getting to know other business owners and gaining their trust. We know that if we can help others to find business we will get referrals back. It is not always something that works instantly. We may have to wait for business to come to us because gaining trust takes time. Once we are part of someone’s network, they will think of us when talking to people they know who need a product or service we can provide, and they will refer us only when they have learned to trust us not to embarrass them.

Breakfast groups have the potential to become very tight-knit with true bonds between the members meeting every week. As we learned in BNI, attendance is important to gain that trust, and so it should be.

Why wouldn’t we want to have a weekly meeting with our sales team, for the breakfast referral group is our sales team? It is the most important meeting of the week and we should arrange our other appointments with clients and prospects around attending our breakfast meeting.

If attendance once a week at your breakfast meeting is not that important to you, you just don’t get it. But you do, don’t you? What do you think?

© Jon Stow 2010

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