At Greve de Lecq, Jersey

Over-delivery

As I said the other day, restaurants so often show the best and worst examples of how to do business, all in an hour or so.

On our recent trip away, my wife and I visited another bar-restaurant for lunch, looking for a snack to leave plenty of room for dinner later. My wife ordered squid and I ordered a steak sandwich. A steak sandwich is rather more than a snack you might think, but it was priced at £6.95 which is about US $11 at the time of writing. At that price I thought it would be only a small snack-sized sandwich, but when my dish arrived it consited of an absolutely enormous steak with fries, an excellent dressed salad and Dijon mustard, plus a long bread roll. The squid dish was of very generous proportion too.

The meal was delicious, but it was a really big meal. On those grounds I would absolutely recommend the restaurant, so please ask if you are going to Jersey. (Channel Islands, not USA).

Don’t be too cheap

So what is the problem? Well, none for me except I had no room left for dinner, but for a meal of that quality and size I would have paid twice as much, especially to eat it in that setting. The problem is that the restaurant owners are not valuing themselves and their business highly enough. At the price they sell their food, their margins surely cannot be great, yet they could make far greater profit selling quality food in good surroundings and still have very happy customers.

The race to the bottom and staying on top

In terms of competition so many businesses compete in the race to the bottom on price, when often if they checked properly, they are not comparing like with like. If you have a great product or service you really should sell it on its true value to the customer. You can make yourself more money which you deserve for your hard work, and if you feel really guilty about making a good profit (and no one should) you can reward your employees better too, so everyone will be happy.

Have you sold yourself short in the past?

Photo courtesy of "OneArmedMan" via Wikipaedia

Riding for a fall

My wife and I have been away recently, which has meant eating in restaurants rather more than we usually do. I love restaurant watching. So often one can see in a very short time the very best business practices and some of the worst.

We ate in a hotel several times. The first time the food and service was really quite good. The second and third times were really less than successful. After the second, maybe we shouldn’t have dined there a third time, but circumstances rather meant that we had to.

What’s cooking?

The third time of dining the menu was fairly unappealing but we tried to pick our way through. My wife’s starter was good but then it was plainly Waitrose’s finest lemon sole goujons so I would expect it to be. My starter was spaghetti bolognese. At least it was supposed to be. It was really only beef mince in a not very nice gravy on a bit of spaghetti. If either my wife or I had produced such a poor “spag bol” for the other, words would certainly have been said. Maybe we should have volunteered to take over in the kitchen.

Two of our party ordered trout. It was dried out and burned round the edges. Whether it had come out of the pan like that or just sat on very hot dinner plates for too long before being delivered I have no idea, but the dishes were not fit for purpose. When we complained about the fish and the menu we were told that we could have ordered from an “a la carte” menu which we had no idea existed because the waiters never mentioned it. It was nowhere to be seen in the restaurant.

Run too fast, fly too high

However, the main problem was the kitchen. The chef might be quite capable but is trying to do everything on his own. He cheats with the goujons. He can’t watch the trout, which should have had his total attention while it was cooked, plated and out of the kitchen. There is simply too much to do and he fails. He probably couldn’t have coped with the “a la carte” menu anyway.

This is all too often the way many small businesses fail. They try to do too much without the resources to do anything properly.

I subcontract quite a lot. I decline to do quite a lot of work I am asked to do because it is not valuable or cost-effective and because someone else would do it better than I. In my business we do what we are good at and so that we can provide the best service. That is what most of us in business do, don’t we?

Do you see businesses who are under-resourced and overstretched? If you can’t stand the heat…

Having been at the networking game both on-line and off-line for nearly a decade, I know a lot of people, some of them really quite well. Because it is how this networking thing works, I connect my friends and acquaintances to people they need to speak to, depending on their needs. I expect you do too?

Help! I need somebody

Now and again I have people come to me with an urgent need for advice which is not tax or business advice within my own expertise. It might be concerning an investment or finance requirements or whether I know someone who could advise on the latest news in a particular sector of industry.

If I have helped someone I may well have generated business for a friend, and it will always be the person / business owner who is the best one for the job or project. Recently I gave someone a good referral which will generate ongoing business for them. I don’t work on commission of course since it could cloud my judgement. It is too uncomfortable anyway. However my friend, being the good guy he is, took the time to thank me. No problem of course. He does a great job for me so he will do a great job for the person who asked me to help.

Casting a shadow

Thankless tasks

However, recently several people who have asked me who I think is the best person to help them have been silent when I have emailed back the names and contact details of their ideal match for the requirement. I have not heard from them again either via email or telephone. How long does it take to thank someone? I always try to express my gratitude when I get help. Most people do. Apparently some people don’t. It rather casts a shadow over trying to help.

Trust

The trouble is that I lose trust in those who don’t thank me. I begin to think they are unreliable. They might have been the people I would recommend next time I was asked to suggest a business owner who could help one of my networking friends. Ultimately, by not thanking me they may lose out on lucrative work.

Saying “thank you” is something we are taught by our parents and elders when we are very small. It should not be easy to forget. When someone thanks me I get a good feeling. I like to give that feeling to others. Do you lose faith in those who don’t take the trouble to thank you?

Pieter Bruegel the Elder: The Seven Deadly Sins or the Seven Vices - Pride (Photo credit: Wikipedia)

We have worked hard to be where we are. We have tried to learn all the demands of the business we are in. We keep ourselves up to date with every bit of news in our industry, every change in the law which may affect us or our customers and every social media tip to advance our business and help those customers.

We might think we know it all, and (warning, cliché alert) we have got the tee-shirt. But we don’t know it all.

It is all to easy to tell our customers and clients what to do to fit in with us and what we think is right, but we need to listen to them first. Unless we listen, we don’t know what they have to tell us which ought to affect what we need to advise them about. For many small business service providers, listening to customers’ problems helps us know what they need, and therefore helps us make the sale.

Arrogance is a sin in business; a step beyond Pride, one of the Seven Deadly Sins. Humility when helping those who provide our business income is a handy virtue.

Have you been on the wrong end of someone else’s arrogance?

Do your figures add up?

Old chestnut

I have been involved in an on-line debate covering the old chestnut of price versus value. This is a very important issue in most service businesses and particularly for smaller businesses., because we all need to think what market we are in and what our business model is. I come from an accounting background, but I see the same issues and problems arising in many different service industries.

However, let us talk about accountants in particular, because it will illustrate the wrong-headed notions persisting in other sectors too.

Most accountants and others in allied areas who are in business for themselves trained in larger practices. Most of the remainder have worked in traditional practices. As many of you will know, the traditional method of billing clients was to charge them by the hour, much as lawyers have tended to do.

Somewhere along the line there has been a shift away from this, although some owners and partners in accountancy do not like change or stepping out of their comfort zone. The rest have generally realised that clients like certainty in their annual bills, so there has been a big move towards fixed fees. Unfortunately at that point further confusion has arisen as to the basis of charge.

Cheap, cheap

I think we should all agree that the basis of charge should reflect what the client receives in the way of service. Some accountancy firms have a model which provides only basic compliance for the clients, which for the uninitiated means that they get their accounts prepared and their tax returns done, but that is pretty much it. The clients have complied with the requirements of the law, and all necessary filings are made. They don’t get much in the way of advice, they don’t get a regular chat with their accountant and they don’t look for anything more. That suits some people and the annual cost is pretty low.

Value

However, many business owners want rather more. They want their hands held through the complexities of their bookkeeping and to understand how their accounts are drawn up. They don’t just want to know how much tax they have to pay and when it is due. They want to know whether there is anything they can do to reduce their tax burden, and whether there are any particular reliefs they might be eligible for if they make certain purchases or invest in energy saving equipment.

Clients who want these extras expect to pay more for the additional value. They still want certainty so they will be prepared to pay a higher fixed fee than some who only want basic compliance. Often they will get back the extra fees they pay in cost or tax reduction by being advised to do things a different way.

Getting lost

Somehow though, some very able accountancy firms get confused and lost in the fees jungle. They hear that Pursuit LLP does company accounts and tax returns for (plucking a figure out of the air) £400. They don’t know Pursuit’s business model, or whether they just offer basic compliance, though that is all you would get for that figure. They hear of another firm who charges £1,500 for accounts and a tax return and they think that disgraceful because they themselves “could do the job for a lot less”, by which they mean that there is theoretically a good profit above their overheads and staff costs at the fee they would charge.

What they don’t know is what the client paying more is actually receiving, and so begins the rush to the bottom; the attempt to match Pursuit’s very low fees and to compete on price without knowing what they are actually competing with.

In reality, they don’t understand what might be involved for a client paying a higher fee. Of course there might be a lot more work. Most likely though the client is getting a lot of attention, has access to the managers, partners or directors of the accounting firm and is receiving not only good tax advice to help manage their liabilities, but long term planning as well.

I have no problem with sensible models for accounting practices who offer basic compliance only. Indeed I have great admiration for those who are successful in the market of processing accounts an a low cost. After all, I like a bargain myself, and if I get food basics at low cost in a supermarket I am bound to be happy. “Pile high and sell cheap” is a proven strategy.

Common sense comparisons

However we have to be sensible in looking at what we get for our money, and when we are selling a service we have to know what we are selling against. There is no comparison between a mass-produced sliced white loaf akin to polystyrene ceiling tiles (remember those?) and the hot sesame-seeded split-tin from the local baker. You wouldn’t expect to pay the same low price for each of those, yet both have their place in the market.

If you provide a service you have to think what your preferred market is, and therefore who is your ideal customer. Then you can design an offering which will suit that type of customer.

I prefer clients who appreciate what I do beyond providing a process, and are willing to pay suitably. Such clients are far more appreciative, far more likely to recommend and refer you, and far more likely to remain loyal to your business than those who look only at price. Loyalty is a two way street of course, which is why we must continue to appreciate them as clients and maintain the value in what they get.

If someone in your sector appears to offer something at a very low price, look at their business model. If you rush to the bottom, your profit will too, and perhaps disappear. If you wish to operate at the bottom end of your market you must cut your costs and cut your customer’s coat according to her or his cloth.

The price of everything

As Oscar Wilde’s Lord Darlington said, “a cynic is a man who knows the price of everything and the value of nothing”. You do not want to be in the market for cynical clients of either sex without the right business model.

I prefer clients who value me as I value them, but we are all different. What market are you in and is it working for you?

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• Delivering the goods (onourbikes.com)

Get off the treadmill...

It’s no secret that I believe in taking breaks from work because it helps me relax and be more efficient. Enjoying ourselves and having a bit of fun is good for us.

What I find really frightening is when I see people so buried in fighting their business issues that they end up working all hours, sometimes seven days a week. Often they are not making money, and that is when they seriously need help from someone like me. However, some people are making a lot of money, but they have lost sight of why they are doing it.

Making a pile of money is all very well, and of course business owners want to give their families a good life. Except of course they hardly ever see their families because they are always working.

One real downside of having their noses to the grindstone all the time is that these workaholics actually forget how to have fun at all. They neglect their outside activities, reduce their options to have holidays and race through their self-imposed tasks like slaves under the cosh. But they have enslaved themselves. I am not a doctor, but this seems to me like a recipe for driving themselves into an early grave through addiction to the work treadmill.

Of course I know some employees with the same addiction; some who really ought to have retired by now but think they are indispensable. Money really isn’t everything, except that their money pot means they could go and enjoy themselves in a useful manner. The trouble is, with all that work they too have forgotten how to enjoy themselves.

We work to make our lives better and to look after our loved ones, perhaps the better to help others, but also to have time for enjoyment and leisure. All of these things make us happier. I should hate to forget how to be happy.

Do you manage not to be busy all the time? Do you need help learning how not to be busy and how to make your business stop running your life? Call me if you need that help.

How do you manage your time to have some fun? What tips do you have?

Floating boat by one of my favourite walks

The other day a doctor told me I shouldn’t work hard all the time and that I should take breaks and spontaneous time-outs. That is good advice, but actually I already do those things.

It is true that some of what I think of as a break, others might consider work, but leisure is whatever you find relaxing. I know many people and indeed some bloggers keep their noses to the grindstone eighteen hours a day. They are out seeing customers during the day and writing articles and blogs half the night. I certainly couldn’t do that and don’t have the drive or energy. I wouldn’t dare criticise in the sense that one might think that if you cannot make a decent business thrive in more normal hours you aren’t doing it right. Many of these dynamo-types are phenomenally successful. It’s just that we all have the choice as to whether we work all hours.

All of us need family time. Some of the “dynamos” schedule it in. I just like to let it happen. I don’t really watch all that much TV. What television I do watch I mostly like to be informative and instructive though I do like crime drama; most of it anyway. It’s time spent with my wife, though, and luckily she likes to watch much of the same stuff.

I write for enjoyment, even this blog. I hope you find it useful because that is part of the purpose of it of course, but writing gives me pleasure. I am very relaxed right now as I type this.

For me, another way of relaxing is in reading. I read about almost anything, and I do read fiction. I think that helps my writing style to keep fit. We learn all the time, and often one can see the tricks another writer uses to make the text lively and compelling so that we want more.

I am getting towards the end of the Millennium trilogy which, after the first part of The Girl with the Dragon Tattoo, is very gripping. The English writing isn’t great and the translation occasionally odd (why use “gallimaufry” instead of “hotchpotch” or “mishmash”?), but as we go on, the way of winding up the tension and making the reader champ at the bit is terrific. There is so much we can learn from other writers, famous or otherwise. I regard that sort of reading as gym training for writers. As in the gym, I might not be the greatest but I try.

As you know, I get the best ideas when I am out walking. Although I walk more in the evening I might go out any time of the day if my schedule allows and I feel like it. I am writing this in the afternoon having been out for a quiet walk this morning. I like to look and listen and today I saw oyster-catchers and both saw and heard a curlew. Relaxing like this makes it so much easier to come back to the office with new energy and ideas.

Some businesses in the service sector and even in my sector offer appointments to clients at weekends. I may occasionally see a client at a weekend in the UK tax season, but generally I think that if they can’t make time to see me during business hours or early evening they aren’t the sort of client I want. That is because if they are stingy over time they are probably stingy over paying me. But it suits me anyway to make sure I am not under pressure seeing people at all hours.

I find the best ways of working are:

• to enjoy what you do
• to take pleasure and treat as leisure what others might see as work
• to be organised so that you are not under deadline pressure all the time so that
• you can take time off when you feel like it, and
• actually take the time out and have fun

Of course it’s whatever floats your boat, but that is what floats mine. What floats your boat?

The fast food and general store concessions in the Myakka River State Park near Sarasota, Florida

I expect you have seen so-called concession businesses within big stores. They are businesses within other businesses and they sell specialist items such as costume jewellery, scarfs, ties or food. Those sorts of concessions are usually themselves owned by large companies, but small businesses can run concession enterprises as well.

Probably most small businesses who own concessions are in catering, but they may also run confectionery or sweet shops, sell souvenirs to tourists or other staples and essentials. It really is a question of what the particular environment requires.

The idea of having a concession is very attractive. For example you might run the cafe-restaurant in a golf club. Having a constant stream of captive customers would make any catering business owner excited. As always it is important to have a plan and a budget, and to fit your idea to the particular venue.

There will be questions you will want to ask yourself:

• How much is the rent?
• How many potential customers will there be? Is there other competition outside or inside the venue?
• With the level of rent and any extra costs in the contract such as utilities plus my own costs, can I set my prices to be attractive and still make a good profit?
• Is the length of the contract enough and do I get adequate compensation if it is terminated, for example due to redevelopment of part or all of the site?
• Should my business rely entirely on the concession or should I have other irons in the fire?

The advantage to the site owner in offering concessions to outside businesses is that they don’t have to worry about being distracted from their own core businesses. A golf club is concerned with making the members comfortable and especially with ensuring that the course is maintained to a high standard. They care more about the state of the greens than about frying eggs for breakfast. However if you are frying those eggs it is up to you to ensure that they are perfect in the customer’s eyes or more especially their mouth.

Similarly, a main railway station’s managers care more about their infrastructure, the tracks and signals and moving the passengers through smoothly. A country park owner cares about the wildlife and the maintenance and does not need to worry about the selling of sodas, food and souvenirs unless there are complaints or litter and trash issues.

So if you are keen on running a concession, make sure your sums add up and the length of your lease is satisfactory. Decide whether you should have all your eggs in one basket. Maybe you should run several concessions in different places, or perhaps you shouldn’t just rely on concessions.

It ‘s all up to you, but as with any business, have a plan. Then go for it if it makes sense.

Image via CrunchBase

For those who don’t know, Alltop is an article and blog aggregator, bringing in content from news stations, newspapers, magazines, on-line articles and blogs. Alltop was founded by the great Guy Kawasaki. And now it includes On Our Bikes.

To get the best explanation of what Alltop is and what it can do for you, just let Alltop tell you.  Watch the video. You can see not only how it works from a user point of view, but how you can apply to have your own website listed and your feed included.

From the point of view of On Our Bikes, I hope the listing will stimulate a lot of traffic, and of course traffic means business either directly or indirectly through recommendation.

I feel very honoured and privileged that Alltop has included Bikes in the Small Business section. To be honest, I had almost forgotten about applying, and certainly had not expected to be listed, because I don’t suppose they have just anyone. Currently and understandably we are right at the bottom, but we are now wearing the badge with pride on the right of the blog.

I like Alltop. You don’t just have to scan through all the vast amount of feeds all the time. You can select your favourites for regular visits and browse and add new topics when you have the time.

Why don’t you try it if you haven’t already?

Avoid the dabblers

It is a great temptation in business, especially for start-ups, to take the cheapest option when spending money on buying in services. It is very often dangerous to do this because some people just play at business.  Often the really cheap option will be a part-timer who does not depend on the part-time earnings to make a living.

A part-timer might be a dabbler; a student who likes building web pages but only when he is not out having a drink with his friends, or an employed “bookkeeper” who works on sales ledgers beyond her comprehension a couple of evenings a week. These people are unreliable because they don’t depend on the money you pay them, they may not be up to the job and they are easily distracted so will not give your work their best attention.

We all need to remember to see the value in services we buy in, know what we expect and how much added value to our business we will gain.

If you don’t know who to engage ask for recommendations from those who have bought the services you want. If they are not happy with their suppliers they will tell you so you will also find out who not to employ.

One of my clients ended up paying a fortune to have a good bookkeeper repair the mess left behind by the cheap part-timer. A friend had to get someone else to start again with his website when the dabbler disappeared back to Uni.

You can’t beat a great testimonial for your new service provider. Phone a friend if you are not sure.

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• Delivering the goods (onourbikes.com)