Why we need to be courageous in business

Sometimes we need to be brave in business. A week or so ago I wrote about how we sometimes need to show courage in our business and take some hard decisions.

We all have fears of the unknown, of measures we have not taken before. Sometimes we need to spend a little money as an investment to take our businesses forward. It is hard in this environment to spend money on the unknown, so the answer must be to spend it with experts in their field about whom we have heard good things. Then we will have more certainty that advice and services we buy in will be effective and increase our revenue stream and perhaps reduce our costs. The need is to increase our margins.

I woke up the other morning determined to take action, and indeed I have by asking for an outside opinion on what I am doing; taking my own advice. I am taking my own medicine as promised and ignoring the voices at the back with their shrill warnings.

A more illustrious commentator than I is recommending we all take the plunge and I was pleased to see that I am in good company.

Spring is coming in the Northern Hemisphere. It is time for a clean out to make our businesses spick and span. If you live south of the equator you can probably find another reason to launch yourself into action.

Managing our online reputation – a personal view

This is a popular subject for bloggers, and we know that our online reputation is important, but somehow human nature seems to mean that many of us are as casual about it as with our offline reputation.

Most of us away from our computers do not say unpleasant things about others and whilst there is always gossip and tittle-tattle, by the time it is passed on, if it is, it is often taken with a pinch of salt. The recipient of the information often clouds the issue in their mind by thinking about the teller’s motives for passing on the information and anyway much of what is said soon fades in the memory. Gossip and even things we have witnessed are forgotten in time and in the light of later events.

However, our online behaviour is there for all to see. Everything we say may be taken down and used in evidence against us. Of course we manage our professional websites, but our blogs and other web material can be seen by anyone at any time. A comment I make to someone on Twitter about our weekend plans is in my Google Alerts, sometimes within a couple of hours, so quite apart from giving information to my followers, anyone can find out anything I have divulged at any time. I cannot retract remarks I have made on Twitter, and if I delete anything from my blog, it could still be seen through Google cache for sometime to come, and anyway it might have been re-blogged or copied somewhere else.

At this point one might say that “what you see is what you should get” but really we do not want to reveal all our foibles even through Facebook, because if we are careless, we could give away a lot of information people do not need to have. We could even become victims of identity fraud or simple impersonation, further damaging our reputations. Whilst we may want to be as open with our friends as we would in an off-line environment we do not know who is watching with evil intent, or who might simple misconstrue a remark taken out of context.

When I am going to meet anyone new in a business context, including a new client, I do a web search. I am sure most other people do too. That is not to pry, but often because we need to make our new acquaintances feel we are interested and to be prepared for our meeting and for what issues might be raised. It is simple due diligence, but who knows what impression an ill thought-out remark might give in the wrong virtual ears or hands?

I try to show enough of my personality online to give readers an idea of my interests, of what I do for a living and for recreation and of course family. Those readers need something to which to relate, so I have pretty much stopped the boring stuff like Twitter advertising, or promoting myself directly through my blogs. Of course many may still think I am boring. Someone more or less told me so before “un-following” me on Twitter. However, I think I would rather be boring than have every cuss word I might have thought broadcast on Twitter, or every detail of our family life known to the world.

What is your approach? I would love to hear your views.

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Why you should define your offering as a freelancer or consultant

In these challenging times with regard to the state of the economy there are a lot more people without full-time employment who find themselves looking for freelance work and who are seeking to offer one form or another of business consultancy. In my world I meet quite a lot of such people, many of whom are new to the fold of the independent worker, having run a business or been in a settled job for many years.

One of the expressions I do not want to hear when a freelancer introduces himself or herself is “I am a generalist”. Why? Because it is important to take into account what the singular or multiple audience hears, and what they hear is “I am not really good at any one thing”. The corollary of “Jack or Jill of all trades” is “Master of none”.

If someone has been the owner of a business or a senior director or partner or whatever, that person tends to think they know all about business because they think they have seen and done everything. That may be true in terms of having a grasp of a business, but it really will not impress a potential buyer of services, who wants to hear what the freelance consultant can do to satisfy their immediate business need.

Everyone is good at something and can offer a special knowledge. If you have been an owner of a business or an employee, that business specialised in something, whether it was engineering, manufacturing, food processing, importing toys, plastic moulding or accountancy. There must be an area the freelancer is most comfortable in. That is going to be the way to get in to sign a decent contract to help. Once in, you can offer your other skills on the back of your perceived competence in what you have achieved so far. However it is important to get in, so do not ever call yourself a generalist, and concentrate on what makes you happiest and is most financially rewarding.

© Jon Stow 2010

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Why we need to take an outside view in business

I am in a reflective mood. I am coming to the end of an engagement helping a client; an engagement which should not be ending. This is not just because obviously an income stream will stop; I have other clients. It is that there is so much more I could do for them which they just cannot see, being such an introspective inward-looking business.

I started with this client when their firm was experiencing extreme pain due to loss of (mainly) staff but also internal disputes. My few months there have alleviated the pain and now they feel much better. However, they do not seem to realise that so far we have just dealt with the symptom and we need to cure the illness so that we do not have another bout of sickness in six or nine months time. Treatment would not be difficult if they allowed me to help. I could cut my time with them by 50 to 75%. It would not be a costly experience for the client and my work would pay for itself many times over.

I have the advantage of being an outsider able to look at the whole business rather than being an inside navel-gazer, not able to look very far, and certainly not able to look even at what competitors are doing. I can see a lot more; I have the perspective of distance and height to see the whole picture, and I wish I could persuade them as to what they need to do. I do not need to do it for them; they need a corporate exercise regime, which is why I would only need to see them occasionally in the role of a “personal trainer”; just a visit to keep them on track.

All this has made me think that I too need an outside perspective on my own business. Maybe I cannot see my wood for the trees. In the next month or so I will be having a check up from a outsider on all my marketing and probably on the whole way I approach my business.

What will you be doing that is different to help your business be better, and do you agree that asking a suitable outsider to look at your business may be what you need?

© 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

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

Why we need to assess the risk in our business assignments and projects

In my last piece I talked about the danger of adapting business agreements and contracts when we do not have the specialist knowledge as lawyers, or indeed as (in my case) a tax practitioner. I suspect that those who are driven to do this are either out to impress their clients or are motivated by the prospect of getting a larger fee than if the work is shared with a professional in the relevant field.

However, even for those who may be very well qualified in terms of understanding what is required in an agreement or contract or other project of any description, the risk in undertaking some assignments may simply be too great. It is sometimes best to pass on a project, and, I believe, take a commission as long as we are up front with our client as to what we are doing.

Let me give you an example. When I was in the larger corporate world the sort of work I did included devising share plans for companies to reward their staff. The idea was that the employees would receive bonuses in the form of shares in their employer, and at the same time the company would save a great deal of money, particularly in terms of tax, in doing so. One project I did took me about three weeks working exclusively, and I remember that my employer’s fee was about £50,000. During the period I was developing the share plan, whilst I knew what I was doing, I had the benefit of peer review and also checked with lawyers that I was on the right lines and that the plan was “watertight” and that it would work.

The client company was looking to save millions, so their Financial Director was not worried about the fee they were paying, and my employer stood to make a tidy profit.

Now I am a principal of a small business. I still have the expertise to do a similar project. What I lack is the opportunity for sufficient peer review and the backing of a large corporate employer. I would not undertake such an assignment and would pass it on to a bigger player, of whom I know a few. After all, it is not just when we mess up that we might get sued. If other things outside our control go wrong it is human nature (and all businesses are run by humans) to look for someone to blame, and even being on the wrong end of misdirected litigation can be very expensive and very worrying. We are also unlikely to have a sufficiently large professional indemnity policy to save ourselves or our company and reputation from ruin.

My message is that not only should we not undertake business activities outside our professional competency, even if we believe that we can rise to the challenge intellectually, we cannot afford to take the risk if there is a lot of money at stake. With a small business it is better to refer on to a larger provider with a more considerable financial clout and be happy with a commission. Our clients will respect us more for our professional approach and we do not need to let our pride line us up for a fall.

© Jon Stow 2009

Why we SHOULD reinvent the wheel – business agreements and contracts

One of the most irritating cliches I hear is “I don’t want to reinvent the wheel”.

It is a favourite refrain amongst many well-meaning business owners and business advisers who will typically ask for a template for a sale agreement, partnership agreement, shareholders’ agreement or some such thing. One of the worst which gets me upset is a request for a template share option agreement.

Why am I concerned? Well, all of these documents are legal agreements. They are contracts. People fall out and resort to lawyers. An amateur document may not mean what it is supposed to mean or may not fulfil its desired purpose. Indeed it may not be fit for purpose at all and will give lawyers a field day, and an expensive one at that.

Something that is also not considered is that these documents which are legal agreements do not travel well internationally. The law is not the same everywhere. There are different laws of succession, different family laws,and of course different commercial laws and different tax laws The last is why share option agreements which are tax-efficient and beneficial in one jurisdiction may be disastrous in tax terms in another.

I guess this is returning to one of my favourite recurring themes which is that there is no substitute for paid advice from qualified professionals. Some people might think this would be expensive for their clients or themselves, but professional advice up front has great value in being cheaper by far than expensive litigation. Do not be tempted to re-hash someone else’s document for your own purpose. Invest in a bespoke agreement from a specialist backed by someone else’s professional indemnity insurance rather than yours. Sleep easily at night.

© Jon Stow 2009

Why arrogance has no place in business

I have been reflecting recently about the danger of arrogance in our business lives. I think it can come to some people through complacency. They feel that they know what they are doing, they have been doing it a fair time, and they know best. An attitude like that may lead to bullying too.

An arrogant person may indeed know his or her subject very well, and be very good at teasing out the finer points in their analysis of problems they seek to solve, but an arrogant person is also someone who does not communicate properly with the people who most need their help. An arrogant person ultimately is someone facing the risk of failure, because without being able to talk to or persuade people, any solution proposed will not be heeded.

Some of you may be familiar with the TV series “House” starring Hugh Laurie as a brilliant doctor and diagnostician. The premise of this very good programme originating from Fox in the US is that Dr House hardly ever sees patients because he in not interested in them, only in the diagnosis of their illness. He is very self-centred and very rude to almost everyone, but he is protected by his team of doctors who deal with and talk to the patients as well as carrying out any necessary tests. Dr House is also a bully, though he always thinks that his bullying is for the victim’s own good. Of course this is entertainment, and one needs to see a few episodes to enjoy the in-jokes and characters, and like many beers the series is an acquired taste.

In fact the premise of the progamme is not so absurd. I understand many doctors do become very arrogant, though perhaps not usually quite to the degree of the Dr. House character.

I am sure most of us have known arrogant but clever people in our working lives, including some who were bullies too. Imagine if we small business owners and employees adopted this attitude with our clients and customers. We cannot rely on our team to protect us. Imagine we believed we knew everything there is to know, and our clients were wrong and did not know what was good for them. Suppose we did not listen to them. We might understand their problem and make a diagnosis, and we may know how to fix it and provide a solution, but if we just told them – barked it out – they would feel intimidated and shy away. We would lose business that we should have gained and our clients would not get their solution unless they found someone more amenable who was as capable as we of delivering it.

Arrogance can be the price of experience and of knowledge but a little humility can go a long way in engaging our clients both in the formal way and in helping to solve their problems.

© Jon Stow 2009

“House”

Better to have a business plan than have your dreams shattered

I was shopping in our village this morning and found the butcher’s shop was closed. There was a notice in the window, presumably put there by the shop landlord, which announced that the shop owners had paid no rent since they started trading last April, six months ago.

I always try to support our local shopkeepers, especially on a Saturday when I always go the village, sometimes with my wife. It is hard-going for many local traders. We are blessed with a very successful hardware shop who seem to sell virtually anything from light bulbs through egg-timers and fire guards to those things you use to unblock toilets. The business has been in the same family for 100 years and they know exactly how to cater for the needs of local people. Recently they have expanded into the shop next door.

We also have a successful baker’s shop. They do a roaring trade in the morning and also make sandwiches for the lunch time trade from local workers from the offices, shops and the factory units we now have down the road. They again cater for a known need.

Until a year ago, the village butcher’s shop was occupied by a local family of butchers, who also own a “farm shop” a couple of miles from the village in which they sell local produce – all the usual things you would expect a butcher to sell, including game. They closed the shop last Autumn because as they told me, the overheads in the village were just too high, and whilst the shop was quite busy they were not making very much money. They had decided to concentrate on the business out of town where they owned the premises on the farm and had more control.

The sad reality is that many people now prefer the one-stop shop available at the two large supermarkets within ten minutes drive and where parking is free. In the village, unless you know where to park, you will have to find 60 pence even for an hour, which of course discourages people for shopping locally even with the high price of fuel used in driving to the supermarket.

The people who took the butcher’s shop last April should have asked themselves why an apparently successful business from down the road could not maintain their village venture profitably. The likelihood is that the rents and business rates prevented the shop from being viable. Such a shop would have to rely on a very high turnover to cover the costs, which frankly they were never going to be able to do in the face of supermarket competition, and of course the farm shop owners who were their predecessors.

It reminded me of the cafe owners in a local town who asked me a couple of years ago to help them make their business profitable. They had a dozen tables, but were paying an annual rent of £17,000 as well as a large amount for utilities given that they were cooking all the time. It was clear that they could never make a profit even if they employed no one else. The figures did not stack up and never could have even before they opened. Rents based on floor area tend to reflect a higher expectation of profit often through a turnover of higher valued items. If you have a cafe you have to have a fantastic following or be really exceptional to stand out in a seaside town with numerous similar offerings. My clients lost the business they should never have started.

The lesson is to always have a business plan. A business plan is not just something we put together for the bank to raise finance. Sometimes we have to look past our romance and our dreams and think whether we really have a shot at making our ideal business work. If we have not done our sums properly and have not thought about contingencies for our teething problems and things that go wrong, our dreams can become nightmares and our hopes can be wrecked, as well as our financial security. A business plan is not just for the bank manager, but something that has to be carefully thought out, and adhered to. It can be changed as circumstances alter, but always has to make sense, otherwise starting a business will just be a leap in the dark.

© Jon Stow 2009

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