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.

The Frank Sinatra guide to running a small business

Frank Sinatra 1973

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The local councillor who couldn’t help me might have been a local version of one of those politicians who think it is sufficient to reach high office and do not have a vision or a plan to do anything when they get there.

Perhaps I am being unkind, but I could list you three British Prime Ministers in office in the last fifty years who thought being Prime Minister was in itself sufficient for their egos, and another three who really thought they could change things for the better. I am not going to list these PMs because I do not wish for a political debate, but they are not all on the same side of the political fence. We have had some who just liked being PM, and others who tried to get on with what they believed they should be doing.

I have been working with small businesses in one way or another throughout what one might grandly call my career, and until the last recession it was probably only the seriously entrepreneurial types who started new businesses. There were others who inherited the family business of course.

Going back a few years, I came across people who had built vast empires from nothing or from cheekily borrowing large amounts of money on a promise or on conviction which they had conveyed to the lender. So I knew people who started engineering businesses with almost no money, and aristocrats who had inherited money but really knew how to run a hands-on business themselves. There is a certain talent needed whatever your background, which is to think on your feet and to know about people. It is not easily taught, but can be learned.

People these days often try to start businesses because they cannot get a job and need some income, but it takes a bit more than that to make it work.

So, going back to the Prime Ministers, it is not sufficient to be in charge of a business. Just having one is not enough, because unless it is actively managed, it will fail as the three PMs failed their country. To be in business is to do because if you don’t do, you won’t be in business. It’s the truth, and many who think it is enough to put up a sign (or a website) will fail.

Kurt Vonnegut (great for good quotes) joked

“To be is to do”–Socrates.
“To do is to be”– Sartre.
“Do be do be do”–Frank Sinatra.

To be in business we need to do and keep doing it. Don’t we?

 

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You are more versatile than you think

As we know, there is far less job security these days. It is not just because of the recession and hard economic times. There is less of a tradition of working for one employer one’s whole life. People tend to want to move and somehow the entire job market has changed. This was a process which started twenty or thirty years ago.

What we now have is choices. We can be independent. We can work for ourselves. We have broadband. We can run several businesses at the same time. We may need to to earn a decent living. Life is good, or it can be if we make it. Don’t be afraid. The future is ours, and it is different.

I am not the only one to think so. Look at portfoliocareers.net (not an affiliate link) and also listen to Chris Brogan’s thoughts.

Do you agree? What do you think?

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Economists with the truth

I went to an interesting meeting last night. Two out of the three speakers were economists. It is often said that there are as many opinions of economic issues as there are economists. There were two opinions of the economy from the two speakers, but really it was all about a difference in attitude.

The first speaker, a lady, did not want to be attributed so we will only say that she in connected to a well-known Old Lady who lives in Threadneedle Street. Her view of the current economic climate in the South East is that things haven’t been so bad, the economy is on the up and eventually everything will be all right even though the UK economy has contracted by 6.1%

All fine and dandy. She says she speaks to lots of businesses north of the Thames and that is her general impression. Funnily enough I also speak to a lot of businesses in my local area, which is specifically South Essex, so much smaller. I get a somewhat less optimistic view of the situation as it is.

I could hardly wait to be disappointed by the second economist, Mark Pragnell of the Thames Gateway South Essex Partnership (TGSEP) . However I was pleasantly surprised both by his honesty and his attitude. Yes, the economy had contracted by 6.1%. He thought that South Essex had been very badly hit by losses of jobs both in London and locally, possibly worse than in the South East as a whole. He might have had a vested in talking up his view as the Old Lady’s representative had, but he didn’t. What he did say that there was a huge opportunity for growth in the area, that we had a skilled workforce ready to go, and we had attractive lower housing costs and we have industrial units and warehouses which can be rented very cheaply (poor landlords) but potentially profitable for many.

I hope I have not misquoted too much. I was not able to make notes, but my general impression after hearing the first speaker was that I was now listening to someone saying “yes, things have really been bad, but we have the chance to really make hay and bounce back quickly.” Really it is all about attitude and realism and not towing the line of officialdom notwithstanding that TGSEP is very much an institution of local government in the area. Well done, Mark!

If we wait for our businesses to improve they may eventually, but it is likely they won’t. If we are positive, proactive, make plans and exploit the opportunities that are out there our future is in our hands and we know we are not hostages to fortune. Seize the day! Carpe diem.

© Jon Stow 2010

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More imagination in customer service

Having been frustrated with the lack of interest in new business exhibited by local event venues and hotels, I have to be fair and mention that one of them telephoned back after a week to say that they could meet my proposal for the amount per head for each of my breakfast group, but they would need to charge an extra amount (actually quite a lot) for our use of a room at their establishment. Quite why they thought this would be satisfactory when clearly I was looking for a particular budget, which they disregarded in adding the room cost, I just don’t know. It is not as though their room would normally be in use between seven and nine in the morning, and since my business group is not in the habit of trashing every room in which we have a meeting, I doubt whether there would be a significant cost even for cleaning beyond a brief run round with the vacuum cleaner.

Presumably they wanted the business; why come back with this when basically I had given them a take-it-or-leave-it proposal with a known outcome and no real downside when they would have had staff in anyway to prepare breakfast for hotel residents? There is a distinct lack of business nous frankly. Obviously I declined their offer.

I was feeling a bit disappointed, but driving back from a meeting on Thursday I heard an ad on the local radio station for a restaurant I had not considered; I had not been aware they were open except in the evenings; apparently they are under new management. The commercial said they served breakfast, lunch and dinner, and hosted events. Naturally when I got back to the office I gave them a call. The duty manager seemed very business-like, she thought they could accommodate the group and was happy on my price proposal, subject to the approval of the owner, which she got. As they do not normally open for breakfast until nine, they are going to get their chef in early or the owner might be in the kitchen, but we are giving it a trial on both sides.

It is refreshing to get a great attitude from someone prepared to give a try to something new in the way of business. Maybe they will decide breakfast events are not for them, but they have an open mind. That is how we in business should approach 2010 and in particular business in a downturn: with an open mind. Otherwise we will assume doors are closed which many just be open a little and only need a push from us. At least, that’s what I think. How about you?

© Jon Stow 2010

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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Why we should deal with the present to look after the future of our business

We are coming to the end of another year, and of course all the predictions for 2010 and beyond are already upon us. As with the social media “experts’” forecasts, most of these will be wrong or else they will be stating the blindingly obvious. We really do not know what will happen in six months’ time or on a micro-management scale, even tomorrow. However the pundits earn their living doing this sort of thing and I have no more faith in them than I do in Mystic Meg (sorry, Meg!).

We hear forecasts that the economy will improve at the beginning / middle / end of 2010 or by 2011. One of these might be right, but it is akin to saying during a period of rainy weather that the sun will come out soon. Of course it will, but if you have a leaky roof or are under threat of flooding you should be prepared and take necessary measures.

In terms of your business, you may have a damaging cash flow problem. It needs to be dealt with now before you get swept away. Tighter and more forceful credit control (I don’t mean sending the boys round) may be the answer, or perhaps talk to your bank or a proper hands-on business adviser about short term help.

Marketing people will tell you that you should do just as much marketing or even more than you did when times were better. That is absolutely true, and they will also tell you to keep testing new ways of marketing and know what works and what doesn’t so that you do not waste your valuable time and worse, your money. Depending on your business, it may be online marketing, off line activities or networking. Take advice if you are not sure.

Make sure that your business is efficient as it can be. Cut your overheads including utility bills, and if you do not know anyone who can help you do this, then ask me or any business adviser with whom you feel comfortable.

The point of this piece is not to lecture about specific issues. You have enough on your plate, as we all do, to have to put up with someone going through the basics.

Relying on the economy improving is akin to Mr. Micawber saying “something will turn up ”. He went to debtors’ prison. We have to look after ourselves and our businesses now. The economic sunshine will come out, but we need to be there to enjoy it when it does.

© Jon Stow 2009

How to get the best out of our employees and co-workers

In the late seventies, when of course I was very young, Britain organised a recession all for itself. It was punctuated and marked by industrial disputes and strikes, notably by the seamen, the public service workers, and of course the rail workers. I need to say that this is not going to be a union-bashing piece or even a Government-bashing piece, though we have a scene now in a new recession which is quite reminiscent of those bad old days. People now forget the strikes of the seventies were the raison d’être for the confrontation with the miners during the Thatcher years. There was an understandable feeling of “never again”. With hindsight, the approach might not have been quite right, but the thing about hindsight is that you do not have it until after the event.

At the time of writing we have threats of a national strike by the postal workers (threats of staff cuts and modernisation of working practices), and a strike by Corus steel workers (closure of its final salary pension scheme to new entrants, i.e. mainly people who have not joined the company yet). One by National Express Rail workers (pay offer above inflation deemed insufficient) has been settled. One supposes that all these disputes are over genuinely perceived issues without a political agenda.

These strikes make me feel quite uncomfortable in that they can make the recession worse, affecting productivity through travel difficulties and raw material supply, as well as cash-flow, so important to many businesses including especially, small businesses. It really shouldn’t be funny, but there is a comic absurdity in all this, at a time when even the TUC is forecasting that there will be 4 million unemployed within the next year or so.

The confrontation and posturing we see on both sides of these disputes between major employers and unions is certainly not the sort of behaviour we would want to see in small business, and indeed we do not see it very often. However, unfortunately management and workers can still take very entrenched positions, particularly over productivity and in respect of staff absence. It can happen in respect of pay too.

Fortunately the small business owner is in a much better position to do something about these problems and to put matters right. It involves taking a friendly approach which might be alien to the big employers and their workforce representatives. Being nice to someone is certainly never harmful. So, if there is a productivity problem we, our small business owner or SME director should say to the workers individually or together (it depends on circumstances) “I know that you are doing your best, but we really are not getting the results we expect. Do you have a suggestion as to how we could get through more work? Is there a problem you can identify and something we can change?” That way the staff will feel happy that they have been asked and feel more valued. We will be giving them some responsibility for their work and there may well be something the business could change to make the system better and get more work done. At the same time, the staff will feel more able to volunteer issues that concern them and give useful feedback without being asked.

In the case of staff absence, it is always best at the earliest stage to talk to the individual because there may be an area in which we can help. Again, the person will feel valued, and perhaps one could allow some flexibility on working hours if there is something which keeps the person away from work. Of course, common sense must prevail, but again we encourage collective responsibility. Even pay issues are best resolved by talking first, and individual incentives related to personal productivity can also encourage valuable feedback.

None of this is novel, but both small business employers and their staff can get into entrenched attitudes if they do not talk enough or at all. We have nothing to lose by being friendly and kind to those who work for us. I have always found that if our team members like us, they will respect us and try harder to please, which of course benefits them hugely, as well as our business.

© Jon Stow 2009

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Enterprise and risk

I have been talking about risk recently in another context. I was a little dumbfounded yesterday when my Mum said she was told by a family member that she should not sign up to Facebook because there was a risk of identity fraud. Of course there is a small risk. I am indebted to @royatkinson for this link and it could be said that I and all of us who are active with profiles on-line run some risk, but what is life without risk?

The reality is that most small businesses which offer services of any kind and very many who are making and / or selling a product need an on-line presence, and what is more, need to engage with their network. In fact, you need to be on-line to get a network beyond a comparatively small number of friends, which is not enough people to refer you. I was just trying to list how many websites where I have a profile. In terms of business and social networks I have at least ten, and must have more I cannot think of at the moment. I have four blogs: two for business and two personal.

The point is that we have to give some of ourselves in order to be noticed. There are then several steps until we get to business. We need to enhance our reputations (or hope to) and be helpful and give useful information to others, but we need a public presence on-line to get known to further our businesses.

I think the contrast between me and our relative telling my mother not to sign up to Facebook is that I am in business on my own account. The relation has been in a large, safe, cocooned corporate environment for thirty years and is involved in IT security, and she clearly cannot see beyond the small risk to her employer (“more than my job’s worth to access Facebook at work”) to allowing my Mum to have a bit of fun making friends and signing up to her favourite jockey’s fan appreciation society.

There is no success in business without risk. If we are in the front line with our own businesses then we assess the risks and take them if necessary, looking at the likely though seldom certain outcome. It will be hard for those coming out of large corporates in the recession job losses, because they may be too risk-averse to start well in the freelance world. Those of us who have been round the block have learned to live with the risks, which reminds me that I will help my Mum sign up to Facebook next time I drop in.

© Jon Stow 2009

“Show me the money” and Giver’s Gain

I alluded a month or so back to my early steps in referral networking and my experience with BNI.

I wonder if I am going soft though. What always made me happiest in BNI was the concept of Giver’s Gain. In other words, if you help others they will help you; the logic of that is one will prosper from referred business which stems from the referrals one hands out. So why is it that at an open meeting put on by BNI the other day (which was otherwise very enjoyable – thank you BNI) I cringed when someone yelled out the slogan “show me the money” and went on to explain how rich he was getting?

I have been around the networking circuit for over six years now, since not long after starting working for myself. We would all like more income, especially in these difficult trading conditions, but I have become more circumspect in talking about my financial needs, especially in the environment of the wider world of social and business networking, online and offline. The funny thing is I have no problem in asking for a sale in getting a new prospect’s business, but boasting about how much money I am making as the BNI guy did would make me uncomfortable as did my hearing it from someone else. That is not to say I am a great salesman, or at least not with the hard sell.

I suppose hard selling was what the BNI stooge, for that is what he was, had been put up to do for the event. Maybe it worked for the newbie start-up businesses, but I am more into soft selling and referral by recommendation rather than because I belong to a certain group. Talking about money sounds like greed or avarice, one of the Seven Deadly Sins. Yes, I know “show me the money” is popular in demonstrating the success of a Chapter but it gives me the shivers. If we realise that the more we have, the more we can give there is value in the statement as well as the money. Charity is what we should all have at heart when doing business; that is why I always loved the philanthropy of Zig Ziglar as well as his wonderful books about sales and motivation.

Despite all this, I am considering returning to the BNI fold, though not giving up any of my present local networking including my current breakfast meeting. I enjoyed the old camaraderie and togetherness of BNI, and whilst I think some BNI members including Assistant Directors don’t quite understand what Giver’s Gain really means, the lure of the old tribe may be hard to resist.

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