It is all about getting in the cash

We have had some gloomy forecasts about the British economy recently with the Bank of England downgrading its own for growth in the immediate future. It says that growth in 2011 will be less than 3% compared with the previous forecast of 3.5%. Many independent forecasters think that is still over-optimistic. At the same time Germany’s GDP has leaped in the last quarter, so that might help to pull the UK up, but there may be some disadvantage on this side of the water in that the UK is weak in manufacturing and we may expect a further climb in unemployment, so fewer people will be buying.

The cuts to Government spending will account for the further losses of jobs and not only in the public sector, but also in the private sector as the State buys less products and services. There is also a trend towards higher unemployment in the US, partly seasonal, and although the administration has tried spending more and cutting less. My kitchen-sink economics cannot tell you who is right, but despite the personal debt figures in the UK rising my instinct tells me that it is more natural for the Government to be cutting its coat according to its cloth, which is deeply ingrained in the British psyche from Victorian days.

I keep hearing that people do not have money to spend and there is talk all the time of cash-flow problems for small business owners. I read the other day an article telling us that employees do not apparently go out so often for a drink with their colleagues after work on a Friday night or indeed any night. Much as I would like to think that is because the population is becoming more responsible over the imbibing of alcohol I suspect it is because they simply have less money to spend on alcohol or anything else. Alcohol is anyway cheaper in the supermarkets and perhaps there is more drinking at home.

One in ten pubs has closed in the last five years. There are no doubt several reasons for this, including the duty on alcohol, the competition from the shops, the recession and the easy answer, the ban on smoking.

I think the ban on smoking has helped drive the adaptability of the other pubs who are doing their best to survive. The magazine, The Publican, has published a survey stating that 52% of pub sales are now of food though there seems to be some dispute over the method of calculation. Certainly pub food sales are much higher.

We have seen a rise in gastro-pubs and there is excellent value to be had. The stale cheese sandwich and the chicken-in-a-basket are thankfully long gone as is the smoky atmosphere. A good pub meal is something to look forward to, no one feels obliged to buy loads of alcohol any more, and Sunday lunch at a pub is a pleasurable experience without the anticipated terror of an enormous bill. We can estimate and budget the cost.

What does this mean for the rest of us? I think the lesson for us and certainly for me is that we must adapt to what our clients and customers want. We must be prepared to do things differently, to do new things and stop trying to sell the old products and services that people may no longer want. Above all we must think about maximising profit not by raising our prices en bloc but by delivering value that people will pay for because we are giving them what they want.

That’s what I think. What do you think?

© Jon Stow 2010

Need a service? Get recommendations

A couple of people I know had a little success selling items on eBay, and not wishing to be wage slaves all their lives invested a considerable amount of money setting up a shopping website serving a niche market they know well. I am all for enterprise, and would always wish them good luck. However, usually we need more than good luck, because we need to do proper research.

Our shopping site owners realised that they needed traffic to their website, for which they had paid quite a lot of money. They settled on a company which promised to get them up to the top of the search engines. As most of us know, this service is called Search Engine Optimization, SEO for short. They paid £3,000 over the first year, which is just over US$4,600 at the time of writing. Was their site easily found for the top key words a year later? No, it was nowhere to be seen.

The SEO company owned up to the failure and promised to work for free until they had got a result, which would be to get the site up the search rankings. Even if they are successful, at least another six months will have been lost, and there had been very few sales after the first year. My worry would be that if they failed once, they may well fail gain.

I know several SEO experts who really can deliver results. One or two may even read this post. To you I say that I have recommended you, but unfortunately pride gets in the way of making a judgment about spending even more money.

Sixteen months on, the site is still nowhere to be seen. I have tried several searches on key words I would use, one even using a word which is part of their URL, but I cannot find them unless by typing in the name of the business, which of course no one will do if they are just looking for a particular product.

I have not pressed the business owners again with my recommendations. I feel reluctant to intrude on private grief, but if either of them comments again on their poor sales I will bring the matter up. In a way I am pleased for them they have not given up their day jobs, but that very fact may explain why they lack business focus.

As most of us know, when buying in a service, do not go for advertising hype. Get a recommendation or two or go to someone you already know and trust. That way, apart from knowing about that provider’s ability to deliver,.they will have an added incentive not to let you down.

What is your experience? What do you think?

© Jon Stow 2010

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Why quality is important – lessons from BMW and Waitrose

I had a strange dream last night. I had been asked to work at a trade exhibition selling BMW cars. Quite why I am not sure as I am no salesman, but I was asked how I would approach this task, to which I responded that all cars have a wheel more or less at each corner and for the most part were a simple mode of transport. So I said I would concentrate on the enjoyment and wonderful experience of driving a BMW, and of course their reliability, making them better cars and better performers than the rest. That of course is the BMW approach to marketing, and whilst I do not have one of their cars, clearly my subconscious as been imbued with their philosophy.

Some people I know, both clients and family, have been let down recently by people they trusted, and in all cases this has been because they were engaging amateurs and people not up to the task. I have mentioned previously that it is no good employing anyone to provide services to your business who is not a full time professional in their area. Part-timers and co-opted amateurs will not be up to the job and indeed it is not fair to ask them to do it in the first place, because it will all end in tears; ours and those who have failed us, and there will be bad blood.

What I have been thinking about is that we need to engage trusted and recommended people to support our businesses, and we need to be the best in our field at what we do. We need to be different from the rest, to have something special as far as our prospects are concerned so that they want to be our clients. We need to be the Waitrose experience, top quality products and services for which we can charge a decent amount and have our clients or customers and clients come back to us again and again. Jim Connolly would explain it better actually, so why not ask him?

In this difficult market it has been hard to avoid grabbing at every piece of business even where the reward is not great. I have done my best in the last couple of years because it is no good working hard without proper profit. I already provide a quality service. I am going to try even harder to live up to the philosophy of providing perceived quality in the coming years. What about you? What do you think?

© Jon Stow 2009

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False economies and part-timers

Following on from my last piece, at Christmas those with jobs may well be off work for a week or so, and students are home for the holidays. They may have some time on their hands and be thinking about earning extra money, which is when some of us might be tempted to ask them to help with a project, thinking that they will charge less than if we hired a full time professional. Oh the temptation to think we could gain whilst at the same time helping someone with a little pocket money!

Of course I am not against a bit of charity, but what happens when our part-time bookkeeper goes back to work in January having left a job half done with a well-intended promise to find a few evenings to finish off? What about our student web-designer or graphic artist disappearing for ten weeks or so back to college or Uni with real study to do plus the social distractions of student life? Will our project get finished and will it be satisfactory?

Let employees at a loose end help out with something which doesn’t need them to finish it, and give the kids pocket money, but employ a full time business with recommendations and a track record for anything important to your business.

One of my friends once recommended a young student to design a logo for me. He didn’t have a clue and could not come up with a design that was even web-friendly, let alone good for a corporate image. I wasted my money. Do you have any tales to tell, or have you been too sensible or lucky enough to learn from the mistakes of others, rather than your own?

© Jon Stow 2009

Practicing what we preach – seeing value over cost

When we are selling our product or service, what many of us aim to do is to persuade our customer or client of the value of our offering. That way we get a proper reward, and of course we have to live up to our promises in delivering the quality to fulfill our customers’ expectations. I work hard to maintain the quality of the service I provide and to ensure that my clients have peace of mind, because as someone effectively offering business support services in tax compliance and other areas, peace of mind is what I am selling. My clients are then able to concentrate on their core businesses whilst knowing that most of the red tape compliance is being taken care of.

This is all well and good, but sometimes in business we are guilty of not seeing the value of the products and services for which we ourselves are customers. I see people including some of my own clients finding value in one service but penny-pinching over another. We may think that we know what we are doing, but I have resolved to find help in marketing through my websites in the New Year. I am a specialist in one area and pretty nifty in at least one other but I have to admit that I do not know all the tricks of internet marketing whereas someone else will. For that reason, this very blog may look a little different in a month or so, though I will still be writing it of course.

It is no good being a cheapskate as a purchaser of goods or services. Generally, a better product or service makes life easier all round, so do not skimp on buying in website design or bookkeeping or whatever it is you need. Check the track record of anyone you engage, look at their work or get a decent reliable reference for any contractor whose services you buy in. Quality will cost money but should deliver greater value and help you make a lot more money. Unfortunately it really is true that if you pay peanuts you get monkeys. What you don’t get is satisfaction in delivery and you may be no better off and end up having to spend a lot more to have things put right.

© Jon Stow 2009