Archives for August 2010

Personality, marketing and business principles

Those who know me well are aware that I prefer a logical approach to my work and pay attention to detail. That is the nature of the business I am in, helping people with their tax problems and teasing out and rectifying problems people have in their businesses. I am not saying that we should not take a step back now and again and look at the bigger picture, but like any mechanic I know that a major problem can arise from just a small failure. It is finding what has gone wrong which is the key to getting on the right track with things ticking over smoothly.

I have a similar approach to running my own business and to my marketing. I test and test what works, and spend money where I think it is best applied. While I have a pretty decent web presence it is not through being flamboyant; just through making friends and trying to help others online which is also really nice even where it makes no money.

I am definitely not an arty person. I can’t draw or paint. I don’t make big gestures. I don’t bother about sparkly things. I don’t throw myself into big campaigns without having some certainty of outcome. Yet those who do launch into major projects blindly, or seriously big marketing or advertising campaigns may come up trumps.

I wonder if deep down our approach to business reflects our personality and we cannot change it. Both methods work; the showman Richard Branson and the understated Warren Buffett. Is it better to be a shining light in the firmament with a Mac and an iPhone and an eye for the bright lights, or like me, an XP, Windows 7 Android sort of person with a touch of Linux, but pretty plain vanilla. Is it all down to our personality Operating Systems?

What do you think?

© Jon Stow 2010

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Telephone service and talking to clients

Wonderful though email and on-line digital services are there really is no substitute for speaking to a real person. I am sure we all get frustrated at having our time wasted by large organizations where we have difficulty getting through to the right person (or even find out who the right person is) to deal with a problem or even give them a sale. What is worse in my view is where we cannot even find a telephone number and find we have to raise a “support ticket” on some company’s website.

I believe in talking to my clients on the telephone if I cannot talk to them face to face. With many I could just bang out an email and sometimes I do as clarification of a point raised in a conversation, but there is no substitute for the personal touch.

Sometimes a client will call at a time which is inconvenient. There are times when we can do without interruptions in the midst of particular projects. That is why we should have someone else answer the telephone and take a message, whether that is in actually in our office or in the office of our virtual PA. The point is that the client knows that they matter and we will talk to them as soon as we can.

When we do speak to the client, we should have made time to do so and to be helpful. It is no good just calling back to say we have the matter in hand. At the end of any call, our client should feel that their immediate need is being dealt with.

In a small business we have so much more opportunity to demonstrate that we care, both in word and deed, and I believe the telephone is a good starting point. What do you think?

© Jon Stow 2010

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Related post

Answer the telephone!

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Networking, hunting and butterflies

As someone who runs a breakfast referral group, I follow-up visitors who have attended the occasional meeting in the past but who have not become regulars and signed on the dotted line as members. It is fascinating to hear the different responses, such as the person who obviously didn’t get networking because he was worried about just meeting the same people every week when he joined us for breakfast.

I caught up with another guy this week, and asked him why he hadn’t been to see us. He said “I already go to two networking groups and I don’t want to dilute my referrals too much”.

While I was disappointed as I had hoped he could be a valuable member of the group, I thought this was a great answer from someone who really understands networking and the importance of building trust in his inner circle of business friends. He has earned my respect.

The problem with the networking butterflies, those who flit from group to group and probably cover quite a few miles, is that they are in reality hunters. They have to be because they spread themselves too thinly to be capable of giving referrals to many people they meet.

What they hope for is a great and fortunate referral or at least a good lead in a conversation they may have with someone they hardly know. Of course it happens and it has its place in the business world in that such people are salesmen or saleswomen; let us settle for sales people. However they are not good networkers and are not expecting to be able to give anything back. Networking success usually involves giving first and receiving later.

Our hunting butterflies may protest that their larger business network may benefit from referrals. They may suggest that they can maintain relationships with one or two hundred people in a referral networking environment. They may refer to Dunbar’s number but the reality is that if they know ten printers and eight graphic designers, only one of those is up for each referral in those categories and that is the one they know best.

Do you agree? Have you seen these people fluttering around?

© Jon Stow 2010

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Play to your strengths

Slices of French Bread
Image via Wikipedia

Especially when we start out in business we try to please every client or customer who comes along. I know because I have been in that position. However I have learned that we should concentrate on what we are best and most comfortable at doing, and on what is most profitable for us.

In our local village we have a very good baker. His bread has a considerable reputation. He knows pretty well how much bread his customers will buy each day. He opens at 7.30 and closes at 2.30. If you want the best choice of bread you need to get there earlier. Near closing-time nearly all the bread will be gone and sometimes he has sold out. There can be very little waste and therefore he must maximize his profit based on his resources.

He buys in a few things to sell on, notably sausages which he cooks. He produces some sausage rolls and Cornish pasties for the lunch market, but always sells out.

What doesn’t our baker sell? Fancy cakes! The reason is that although these would be high-cost, they are also labour-intensive. He or one of his staff would have to put in a lot of time on each cake. A lot of local baker-patisseries do make that error. They reduce their profit.

Bread is easy. It requires a lot of skill to get it just right and our baker has the skill. However he can produce a lot without spending much time on each individual loaf. He knows his business. He has got it right.

Like the baker I now do what is most profitable. There are some services which people ask me for which are not profitable. I buy them in through using sub-contractors. Those sub-contractors may even work directly with my clients. That is fine with me given we all have a good relationship. Sometimes my clients ask me for something totally out of my sphere, akin to the fancy cakes issue for the baker. I ensure I know just the right trusted business person to whom to give a referral. In that way I deliver everything a client wants without having to do it all myself and without having to do things which are difficult for my business, being too time-consuming and not profitable.

Do you subcontract or know when to pass on work? Doesn’t it give great piece of mind and allow you to make the best use of your time and effort?

© Jon Stow 2010

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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

Networking butterflies

I am a keen networker. I do believe in getting out often to meet people in business and to build relationships. To me and to most of us the important part is about the building of relationships, because with that comes trust and the referrals we can give without embarrassment, and we hope the referrals we receive.

I usually go to two or three meetings a week, although sometimes it is only one. It depends on my work schedule and my clients of course. Some meetings are weekly, some fortnightly and some monthly. Pretty much all my networking is done in the same groups, though with an occasional sample of a new one. I expect that is pretty normal.

What I do not do is travel to lots of different meetings, hardly going to the same one twice. I also do not generally travel more than around twenty miles (overseas friends please remember how our dense population makes motoring slow at times) because in practice I know I will not be able to make time to visit regularly. As networkers we need to be seen as reliable and that means being at the meetings almost every time and not drifting in and out.

Yet I know there are networking butterflies who drift in and out of groups, flitting from flower to flower, never concentrating on a few. Maybe they find the odd serendipitous piece of business on their way, but what may seem the best serendipity is often the result of hard and careful networking and relationship building over a long time. Our butterflies are easily forgotten if we see them but once in a blue moon

I believe we should choose our networking groups carefully, and give them time to work What is your experience?

© Jon Stow 2010

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Why DIY contracts, partnership and shareholder agreements are bad news

It may be one of my recurring themes, but sometimes I am really surprised at how often I have to mention the problems with using someone else’s template or altering up another contract to save professional fees. I do not think I protest too much. This is not because I want to protect the income of the legal profession or some in my own line of business. It is just that there is no substitute for paid professional and insured advice.

I frequent quite a few on-line forums and am a member of several networks as are many of us. Time and again I see people asking for drafts of contracts for clients, of Non-Disclosure Agreements, Patent Agreements, of Partnership and Shareholder Agreements. In fact you name it and someone is trying to save money with some DIY bit of paper.

I have mentioned elsewhere that faulty partnership and shareholder agreements can be costly in terms of tax, but I have also seen a situation where an amateur partnership agreement led to dissident partners gaining an interest in the land and premises of the business which were owned by the other partners, simply because of some vague wording as to the interest they acquired upon introducing partnership capital.

Most of the agreements we may enter into in this area are supposed to define our rights. The time when these become most important is when the parties fall out, there is a dispute or disagreement or someone reneges on their undertaking. As soon as there is a major break up of a business, every party and especially those in breach of their agreement will be out for everything they can get; that is human nature. Unfortunately that may be a lot more than some deserve. There will be winners and losers and those who were trying to honour their part may end up the losers. The important thing is to know always and exactly what every party is entitled to.

Bizarrely I have even seen situations where amateur contracts have been exported and have been supposed to have the same meaning in another land. The law in the other country will be different and anyway an agreement in one language may lose something in translation in the eye of a judge, who may anyway have to rule that the law of the second country trumps the agreement anyway.

If it might rain and you need an umbrella, do you try to make one copying someone else’s design? No, you buy one that suits your purpose and your needs and from an experienced manufacturer of brollies. Why should it be different when people need a legal agreement?

Have you heard some sorry tales re dodgy contracts? I would be interested to hear your views.

© Jon Stow 2010

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Related posts:

Why we SHOULD reinvent the wheel – business agreements and contracts

Pitfalls in faulty contracts – partnership and shareholder’s agreements

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Great gestures and goodwill

A local business in our County Town has a regular monthly networking lunch meeting and I was lucky enough to be invited along a week or so back. I met some great people, both new faces and familiar ones, and there were probably sixty or eighty people there.

Here’s the thing. The buffet lunch was free. It was an extremely generous gesture by the host business. Of course the bar venue had to make money, so the drink wasn’t free, but free food and great company? Who would turn that down?

The idea is of course great marketing. Which firm in the host’s sector will we think of first when we or our clients have a need? In the long run they will get great business and I stress, this is probably a long haul marketing strategy to get more clients, and that deserves admiration for their foresight.

So we have a free lunch and benefit from building relationships, and with the kindness and courtesy shown by our hosts on the day they will be deserved winners.

© Jon Stow 2010

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The perils of under-resourcing

One of my family members who is now rather frail but insistent on staying in her own home has carers to visit her four times a day, to get her in and out of bed and to prepare meals and attend to other needs as necessary.

Obviously we have to deal with the agencies providing the carers and it may surprise you to know that we are now employing the third agency in about four months.

The first two agencies were a disaster. Their visiting times were erratic and sometimes they failed to come at all, leaving the poor lady in bed until lunchtime as we only later found out. They failed in many other irritating and occasionally unfortunate ways, but I will spare you the details.

Some of those agency employees were indeed caring. They explained that things went wrong because they were understaffed and trying to cover too many clients. They had no back up if one had a major problem with a client and could not send a relief person to deal with the next client on the list, which was why our relative was left to lie in bed until lunchtime on that occasion.

Finally we were referred to another agency, who it has to be said are a bit more expensive. They have a smaller staff and fewer clients, but even so they have more than enough employees to cover all their clients’ requirements. Our invalid is very happy. She doesn’t worry about when the next visit will be. We don’t worry because we know that she is at last in good hands and we will not get that telephone call to go to the rescue at whatever time of the day or night.

There is a business lesson here, it seems to me. The first two agencies were chasing every bit of business they could and accepting everything flung at them by the local authority. They were never honest and said “we are at full capacity and we haven’t the resources to meet your or the clients’ needs.” That means that they will continue to fail and they will always lose clients as quickly as they get them. Even though it is a narrow sector they have a high client churn rate and lose what should be long-term business.

The current agency charges more. They provide a great service, which is why they get referrals rather than have to fight to stay afloat. They have the staff to cope. They do not have to tout for business; it finds them. They take away the clients’ pain and they take away our pain in terms of worry.

Most of us are in business to take away our clients’ and customers’ pain. If we can provide a great service we will get more referrals and we will be able to charge more too, because relief from stress is what everyone wants, and the price is worth paying. Don’t you agree?

© Jon Stow 2010

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