Changing my mind - it can happen!

This is my penultimate post on this blog, for reasons which will be outlined in my next and final post.

At a recent presentation I was forced into thinking about certain aspects of my course and my thought process; I was also led to confess that certain views I had when I started have now fundamentally changed.

There are 2 key aspects on which I have about - turned:

Firstly, Shareholder / partner agreements: whilst I always saw some value in putting together an agreement, perhaps in the form of a 'memorandum of understanding', I have been truly shocked in the course of research by the number of viable businesses which fail simply because the owners cannot get on or agree with each other. What starts out as a small disagreement escalates out of proportion and culminates in a divorce like - and commercially suicidal stand-off, along the lines of 'if I can't have it you can't have it'. Neither party will look back with pride at this process.

So I will say with far more conviction than before:

1. Sit down and thrash out all of the details of your business arrangements.
2. Commit them to a properly draw-up agreement.
3. Get it legally ratified.

On a somewhat lighter note, I'd like to comment on business forums - I'm talking here of the 'chat' style forums rather than professional networking sites such as LinkedIn.

By way of research I hung around several of these forums, showing far more interest in the questions being asked than in the answers provided (at this level I will admit that I derived some real value).

The answers I saw were sometimes a bit disturbing, but like most of us I took the view that everyone has the right to their opinion. 

There is a simple test of quality in media, which says read an article on something you understand - the quality of knowledge and content on that topic will be indicative of the remainder of that of that medium. On this basis, I adopted an alter ego and threw in questions on the topic in which I have many, many years experience - business finance. The results were truly alarming, which disinformation and unfounded opinion forming about 95% of the response rate - basically the good information was buried amongst so much nonsense as to be virtually invisible.

Another interesting point is that some of these forums listed literally thousands of members, yet the vast majority of daily input came from a handful of posters who were either very bored or simply loved the sound of their own voices.

So, if asked for a view on business forums - It would be simple - 'Don't waste your time' - you'll get better advice from the dodgy bloke in the pub!

Why elephants never forget and children are the best salesmen

One explanation for the saying 'an elephant never forgets' revolves around their early days in training (for shows and zoos); the trainer will leave a baby elephant tied to a small stake  for a period of time, after which even when fully grown they will never try to escape, having learned early on that they cannot pull the stake out of the ground.

Children, on the other hand are highly selective in their memory and will cheerfully pull on the sweet cupboard door time and time again until they find it open. They will also question ad nausiem any decision of which they don't approve; what are the chances of this conversation?:

'Mum, can I have an ice cream?'

'no, you've just had one'

'Oh, OK, you're right, it will spoil my tea'

More likely it will drone on for a few minutes with about 50% chance of the mother caving in and buying an ice cream.

Even in later childhood/early adulthood we retain this ability to persevere - some 50% will 'learn' to smoke - it is a tough learning curve which will involve coughing, retching and possibly even vomiting, but most will persevere in order to be part of the smoking crew - the same applies to our early experiments with alcohol.

So why, then do most of us go on to become elephants and take on board every single barrier as a finishing point? Take a read through most salesmen's notes on calls and they will be littered with finite comments such as 'customer not interested, do not call'; 'no requirements'; or even 'very rude, do not do business with this person'.

When did we stop asking for the ice cream and become staked to the ground? In the vast majority of cases those comments relate to a moment in time, when a prospective customer was otherwise engaged, perhaps having a bad day, or simply not interested at that moment in time.

By creating this negativity the salesman (perhaps you or me!) has not only lost theirself a potential opportunity, but has put off other people from picking up on the opportunity.

Note to all of us: Remember the child - Even of no means no, it only means it today.

What is your time worth?

Some time ago there was a TV ad featuring BT and Gordon Ramsey (neither of which top my favourites list); which spelled out with fantastic accuracy the small-business dilemma. You might recall; it showed Gordon lying on the floor opening the back of his computer with a carving knife.

So, hands up - which small-business owners are guilty of doing something similar to this?

In the ad, there is a great compounding of errors which includes ruining an essential business tool (the carving knife) and ruining another essential business tool (the computer) as well as the absurdity of the kitchen running out of control whilst Gordon messes up the computer.

It's OTT, but it is also very real.

Most small-business owners, asked to put a value on their time, will come up with a reasonable figure - say £2 - 500 a day - yet most of us will happily spend half a day doing what a professional could do in an hour - without collateral risk.

To an extent this approach is encouraged in business literature; Duncan Bannatytne, for example states that the first thing he did was learn accounting 'to save paying for an accountant'. Thinking this through, why do you pay an accountant - there are basically 3 reasons:

1. As bookkeeper. So Duncan values his time less highly than the cost of a bookkeeper? Unless you genuinely enjoy pumping in figures whist Songs of Praise is on telly (and some people do), then this cannot constitute good use of time.

2. As auditor. This is not optional and has to be undertaken by an unrelated party so is not relevant.

3. As advisor/consultant. The results from this should be quantifiable, so there is a clear business rationale to employ or not employ the services of an accountant.

Additionally, amateur accounting, like opening a computer with a carving knife, can produce misleading - or just plain wrong - results, which in turn can lead to bad business decisions.

Don't get me wrong; it is an excellent idea for a business owner to understand accounts - they aren't just for Companies House and the Tax Man - management information (MI) is invaluable for business; learning accountancy will help you to understand and interpret the information which is provided.

But to save money on accountants - sorry worst reason ever.

Embarrassing moments

'In a customer-facing role, you will be presented with limitless opportunity to make a complete and utter fool of your self''

An early piece of advice from a sales training course way back in the early '80s.  Having seen and taken a few of these opportunities, I would also add that for some unfathomable reason they always seem to occur in the same place meaning that, whilst most of your customers will view you with varying degrees of respect, a small handful will see you as at best incompetent and at worst a menace to society.

In my days of dealing with the motor trade the ultimate no-no was to drive through a showroom window (I have met a handful of people who actually did this); mindful of this caution, I put my own spin on things and actually walked through a plate-glass door (well, my knee was the only thing that actually went through). The noise and impact were spectacular - if not entirely conducive to good business relations.

When managing sales teams I used this information to try and coax out other embarrassing moments - partly for fun, partly to make people appreciate that they are not alone in looking foolish. Unfortunately only half of the people ever played the game, with the remainder split between dressing up a great result as an embarrassing act (the equivalent of listing being too determined as a weakness), or simply not acknowledging ever having embarrassed themselves; really? Never!? What a dull life...

The business plan - a business essential

OK, so again, far too big a topic for a light-hearted business ramble but of course, your business plan is effectively the centrepiece of your business so I am obliged to mention it.

In my thousand or so years in the finance business I have seen all sorts of business plans from ranging from true 'fag-packets' to several hundreds of glossy pages, neatly bound and , presumably costing several thousands of pounds to create. So, which do I prefer? Well, if pushed, I would probably err in favour of the fag packet on the basis that its creators probably know what they're doing.

The issues, of course are far bigger than that; it might be that 100 pages are actually necessary to present your case, or that your fag packet plan is intended for a major VC - who clearly won't be impressed; to an extent your plan does need to be geared to a specific audience,though I would not agree with the assertion that you need 2 plans, one for yourself and one for investors.

Primarily, you plan must be for yourself (inward facing) - and for this to work it must be realistic, achievable, sensibly ambitious and mindful of variables, risks and pitfalls.

Second; the plan is for investors, funders, clients (possibly), potential key staff etc (outward facing). For this to work it must be realistic, achievable, sensibly........   - you get my point. Despite what you may think, lenders and investors aren't stupid and they will question your assumptions far harder than you will. - which can of course provide useful input for you.

Incidentally, we used to play a little game with business plans called 'spot the fact' - in one 100+ page plan we identified just 3 quantifiable facts the remainder was just bullsh!t and pretty pictures (in another case I received a 2-page plan which, to this day, I've no idea what the business was supposed to do).

So here is my recipe for a simple, adaptable plan:

Executive summary: Think of it as your 3 minute pitch; a brief overview of what, who, where, why, how. (remember your audience - whoever they are - will have a shorter attention span than you - this is your chance to engage them).

Body of the plan: Puts more flesh on the bones but needn't go into excessive detail so, for example 'our Chief Executive has 15 years experience in petrochemicals and has licensed 2 applications' will probably suffice at this point. Similarly 'Year 2 we aim to achieve £3 million turnover and net profit of £50,000' the breakdown comes later.

My personal advice on headings is always to use those that make sense and are relevant to you; unfortunately I was once tripped up on this by a certain bank, who insisted that every section of the plan was completed. Very silly indeed...

Appendices: This is the section where you can adapt and customise your content to your target audience; for example if you are pitching your new paint technology to Ford, it might well be appropriate to include a 100-page technical overview, whereas if you are pitching for bank funding, a letter from Ford expressing interest will be more appropriate.

Some appendix staples are cashflow/p & l projections, director/key person CVs, balance sheets, and SWOT analysis.

SWOT analysis: By far the most abused yet potentially valuable part of your plan! In the vast majority of cases, we see lots of strengths and opportunities, with a few threats and weaknesses, which are shrugged off. The bad news is that your business model can fall over and if you haven't found the fall-over point, you haven't tested it sufficiently. The good news is that even Microsoft's business can fall over - but it seems OK at the moment. To put that into context, every new car model is tested to destruction - this testing makes the product better, not worse.

So, in a nutshell:

If you want your plan to be read, it has to be readable.

Bullshit might baffle brains, but a baffled brain is unlikely to buy.

You can target your plan without re-writing it.

If your plan is infallible, it is definitely wrong.

Where to get advice

Always an interesting debate starter this one; where do you go for advice, how much do you pay and how do you implement it?

I have previously mentioned that there are good, legitimate sources of free advice available to all - the best known being Business Link. Whilst competent and reliable, these sources are by definition somewhat generic and lacking in imagination.

In the course of research I hung around a number of business forums and I have to confess that my opinion is that the advice given is marginal - sometimes outright wrong; try a simple test - ask a question on a topic you really understand and evaluate the responses - it is reasonable to assume that the quality of response will apply to other topics.

Don't get me wrong, there are many people on these forums with genuine specialisms, many more who are entirely well meaning if slightly misguided, then there is the vocal minority who, frankly have little better to do than make crass observations and sweeping generalisations. As the person seeking advice for a business, your biggest challenge will be to work out which is which (and to wade through the crap to get to the quality). If you want to go the forum route, my recommendation would definitely go to LinkedIn, though you might want to take the effort to narrow your fields to avoid getting global input on a local matter.

If you are willing and able to pay, there are any number of specialist consultancies giving advice and support either in specific fields or to specific sectors of industry. It can be difficult to define specialisms, particularly as many of them want to spread their net as far as possible and therefore are somewhat vague about their areas of expertise. The point here is that we all know that no-one is an expert is everything; if your accountant starts selling you advice on marketing - run away!

To plug myself a bit here, I am very specific in my target area - I work with people who are thinking of starting a business through to shortly after opening the doors. Once you have been running for, say, 12 months you will be able to evaluate any  weaknesses and focus your attentions on them with guidance specific to that field, be it accountancy/cashflow, marketing, PR, HR or whatever (or work around the weakness as a temporary measure) - there is no point paying a generalist to do a specialist job, so that is where I leave.

There is, of course one well known, universal source of advice that I have failed to mention - yes - the Bloke in the Pub; His advice is technically free and is dispensed with reckless abandon. Reference points are always available - typically 'I know a bloke who' or 'a mate of my brother's' - obviously you will never meet these people.  The best thing about Bloke in the Pub's advice, is that you always get to do exactly what you like, you always save loads of money and you normally undermine the people you detest - such as the tax man.

I say technically free; there might of course be a small cost - over and above the pints you buy him - such as tax penalties, loss of customers or your business or, possibly a brief spell at Her Majesty's pleasure; still, he's a lot more fun than a consultant and he tells you what you want to hear.

Who can multi-task?

I have been asked - not unreasonably - what happened to me 2 weeks ago; I appeared to burst back from holiday in a blaze of glory only to disappear again.

The truth is that - like many a business owner before me (particularly in a home-based environment) - I believed that I didn't need to be on holiday and that I could carry out all those jobs I had promised to do around the house whilst also being at work.As a result, I now have gloss paint on my phone (and my ear) and lots of illegible messages piled on my desk.

This, of course in modern parlance is known as multi-tasking and I will let you into a secret. It doesn't work.

I have received direct warnings against alienating female readers but I fear it's about to happen again: Extensive studies into multi-tasking have reached 2 clear conclusions:

1. There is absolutely no correlation on ability to multi-task on the basis of gender, age or mental/physical capacity.
2. The only clear conclusion was that, when multi tasking, each task was done less well than if it was done in isolation.

Of course, in certain cases this might not matter for example, you can do the ironing whilst watching Coronation Street as quality of viewing is clearly not an issue. However if either task is important, then you should consider very seriously whether it should be shared. Some customers will be amused that you have dropped your phone in a bucket of paint, others will see it as a tad unprofessional.

Titles - how important are they?

It is an entirely personal perspective, but in my opinion making a big deal out of job titles belongs in the 'big corporate' arena and shouldn't have a place in small business. One of the things I would never miss about corporate life is the stepping stones to success with random words from trainee, deputy, assistant deputy assistant trainee, and so on (as an aside, I also don't miss car-badge promotion where seniority is judged by whether you drive the L or the GL variant). This was brought home to me early on when a friend who worked for a large accountancy firm described their philosophy as 'if you can't give them a raise, give them a title'.

Unfortunately there are many people out there who don't entirely share my view and I have noticed that when 2 or more people are looking to start a business together an argument frequently breaks out over roles and titles; often culminating in the development of ever more spurious titles to satisfy all egos thus you can end up with a 3-man business whose owners bear the title CEO, MD and Chairman.

There are two key issues here, one is resolution of disputes and laying down of responsibilities, which will be the topic of a detailed post in the near future. For the purpose of this post I am really interested in perception - ie - will anyone really take you seriously when you claim to be Chairman of a business which operates from a shed in your garden?

Again, it is not a matter of wrong and right, but I for one am entirely unimpressed by self-granted status -  by all means, make it clear who you are - proprietor, owner, MD and - should the need arise - dish-washer.

As I've mentioned in previous posts, small business is all about flexibility and personalisation - being a small business is something to be proud of, not to hide from; so why deprive yourself of the benefits of being small by saddling yourself with a big title?

At another level, there are recognised traps to avoid; one I walked into was sharing the MD title - people look at the card which says Joint MD and immediately ask 'so are you MD or aren't you?'  I won't do that again!

Words and meanings

It is strange, isn't it, how the meanings - both overt and subtle - of certain words change over time. One of the best examples of this is the word gay - in my parents' generation it was an innocent expression describing bright, cheerful or happy; in my formative years it became used to express homosexuality - still often a term of abuse in those days. More recently, the courts have accepted it to mean useless or non-functioning - as in 'my computer is being gay today' - interestingly my copy of the OED pre-dates this variation, but the online version covers it as 'not impressive, stylish or attractive'.

Similarly, I recently had a discussion with my parents about the use of bad language on TV (you know the discussion...) and found myself trying to explain, as delicately as possible, that certain words that they would freely use are now considered far more offensive than the generally acknowledged obscenities.

What has this got to do with business? Well in marketing terms - everything.  A large facet of the marketing industry revolves around the adaptation of words for a specific purpose.

I'm sure you already know that the official name for evolution of words and meanings is Etymology.

To a marketeer the pinnacle of achievement is to have your brand become common usage such as Hoover, Ansafone etc, or alternatively to have an established every-day word become inextricably linked with your product; to this day the word posh is linked in my mind to Bowyers sausages and that must have been 30 years ago.

On the other hands, marketing jargon and management-speak can grab hold of every-day words and render them meaningless or even negative. For some time Private Eye magazine has had a running feature mocking the use of the word solutions in business names - with the best will in the word, this will reflect on your business name. Similarly, the word opportunity has been abused to the extent that it practically sends shivers down my spine because I know that 9 times out of 10 the next sentence will be asking me to part with money, normally on a premise so whimsical as to be comical.

These  negative connotations were once described to me as dead cow - as in, 'which would you prefer, a well-matured Angus Sirloin, or a piece of dead cow?'

Restaurant owners could try this out on their menus - after all, it's only words, isn't it?

Free advice and resources - from the Government

There is an excellent source of free information for new and small businesses. It is Government sponsored and it is called Business Link. There, I've said it!

So, if this information is available for free, why on earth would you want to pay me (or any other charging resource)? Quite simply, because we offer something quite different and further reaching. Take the analogy of free newspapers - in the short term The Metro (free newspaper) will impact on sales of the The Times - what The Metro provides, however, is a simplistic, bite-sized view of world affairs. Having read 2 paragraphs of events unfolding in the Middle East you might well be thirsty for more knowledge so you will look for a newspaper with deeper coverage, opinions and perhaps feedback - like The Times. In this sense, the free resource is actually a feeder for the paying one. (I'm ignoring the Internet which is a different discussion all together).

Like any free resource - particularly one which is Government sponsored - Business Link has some serious limitations - and indeed it has been an early victim of spending cut-backs.  These limitations are always highlighted very loudly when the topic of Business Link is raised on business forums or media.

So, to elaborate on my initial comment, Business Link is an excellent source of information and, at best, a variable source of advice. (A dictionary is a great source of information, but it won't teach you how to write a book).

When it comes to advice, the very status of Business Link is a vicious circle. Its founding committee is comprised mainly of politicians who have absolutely no hands-on experience of business and are far too busy drowning everything in paperwork and red tape. (Just an aside, but my belief is that Government officers genuinely believe that we business owners actually like filling in forms).

As a nodding recognition of their limited experience they appoint to their committee some business big-hitters - the former chairman of Dixons, for example - not a bad step, but it is still a long time since they were at the coal face, filled in a VAT return, worried about a Companies House filing penalty or had to deal hands-on with an employee issue.

On the front -line, they gave us face-to-face advisors; the majority of these are (or were, I think they are being minimised). This is where it all goes seriously pear-shaped. Don't get me wrong I know that they are by and large diligent, well-meaning and knowledgeable in their own field, but business advisors? Really, they are not.

The reason that Government love bank managers is that essentially they are quite similar - they left school or college and joined a bank. They worked their way up through the system without ever having to leave the confines of their singular environment. Yes, sometimes they would move from one bank to another, but the systems and procedures were so similar as to make no realistic difference. Also, they love forms and paperwork!

OK, so their work environment is tunneled, but they are dealing day-to-day with business and helping them to manage and develop. Well, perhaps they were in the '60s and even the '70s, but since the last recession the average bank manager has been a pure salesman whose role has predominantly been to develop relationships with brokers, intermediaries and business advisors - therefore the banks have effectively delegated the role of understanding customer needs to the professional and broker community. Those who regularly face customers have a simple remit - sell more products (I do know that one bank has a target that every customer should have 4 of their products). When the customer looks shaky the manager has one primary option - get out - quickly!

And that is why I cannot give any credence to bank managers as business advisors - they are the front face of Business Link, so I cannot recommend them as a source of advice.

So, simply, if you want to find out how to register for VAT, or the ins and outs of Ltd company versus sole trader, go to Business Link,. If you want advice on how to develop and run your business, go to someone who knows what they are talking about.

Business funding - The 3 Fs

Here's a subject I have steered clear of in this blog - mainly because it is my own line of business and I could probably ramble on for ever about it.

You can't fail to have noticed that business finance is pretty hard to get hold of at the moment; in fact the press are having a field day writing about it. I don't want to go into that argument except to point out that I have actually written to several Government officers -not to make borrowing easier but to stop them from banging on with their stupid 'force banks to lend' message.

Anyway, with the banks being an unlikely source of funding, new business owners are having to look closer to home for their finance - often this will involve the proverbial 3 Fs - friends, family and fools.

As a matter of course I suggest this to business owners seeking finance - it is very telling to judge their knee-jerk response.

Of course it is sensible to keep business and family separate, but if you would not approach them for money because it is too risky, it does beg some very obvious questions about your expectations.

I would honestly suggest - even if you don't actually want any money - that you prepare your business plan on the pretext that you need funding from family and friends - and present it to them on that basis - it will raise a lot of interesting and relevant questions that the banks might be too discreet to ask! Just try it and see..

If you want to seriously consider 3-F funding, rather than depriving your parents of their hard-earned pension you might want to set up a micro-financing package, where you get a small investment from a number of individuals - well within the bounds of what they can afford to lose; that way you might still be friends if it all goes horribly wrong.

Negotiation - Making it fun.

When the topic of negotiation is raised it seems to bring one of 2 images to people's minds:

1. It's a dark art which requires huge amounts of specialist training or
2. Its a game of poker, just out-bluffing the other party to get the better end of the deal.

On the other hand, when you visit many countries you are invited to haggle in the markets, which is negotiation at its most basic. Some people relish the challenge, whilst others dread it. I was amused some while back by a comment from a Times columnist on this very topic, which went along the lines of 'my approach to haggling is simply to stare at a point on the ground - just in front of the vendor's foot - until he drops to a price which I'm happy to pay'.

The main reason people fear negotiation is that they see it as a kind of face-off, where inevitably one party will win and the other, by definition, will lose. The reality can be very different and, done correctly, that old cliche of a win-win situation is a real possibility.

The first rule of negotiation is not to make it personal or 'separate the people from the problem'. This isn't a battle between you and them it is a business discussion. Keep your terminology business-like, not personal - eg 'I just can't make the project pay on those terms' vs 'you're taking the p!@s, don't try and rip me off'.

The second rule is to understand the relative cost and benefit of what each party holds or consider your currency. In the vast majority of cases there is more to a transaction than price (in these cases the biggest single mistake is to focus on price alone). The other party might have huge benefits they can deliver at little or no cost to themselves whilst you might have skills or contacts which are disproportionately valuable to the other party. This is where the true win/win comes in. These currencies might be esoteric and entirely irrelevant to the core of the trade; an example I once saw was a customer who offered the use of parking spaces as a concession on payment terms.

The large brewers are masters of secondary negotiation and will often strike supply deals where their buying power enables them to supply something of value - at little cost to themselves - against contracts to buy (eg: We will provide you with quality garden furniture if you commit to stocking our beers on 2 of your pumps').

The concept of empathy to revolves around the ability to see a situation though the eyes of the other party; not only will this make you an interesting and engaging business partner, but it will help to move the focus from a single point negotiation to a discussion that takes on all facets of the deal. You will be surprised at how different the final result of a negotiation can be from your expectations.

Perhaps the most dangerous negotiating tactic is to fixate on what the other party gets out of it. In my opinion one of the worst mistakes the FSA made was forcing commission disclosure. This is just a red herring which leads customers to make decisions based on the -often erroneous - assumption that whats worst for the vendor must be best for them. Mature business discussions revolve around maximizing your benefits - if that outcome earns the other party good money, then that is an all-round good decision, surely?

Finally, with a bit of homework and lateral thought, negotiation can become enjoyable. And if you enjoy it, you will probably become good at it.

Holiday contacts

Firstly, let me aplologise for the stress and loneliness my regular readers will undoubtedly have felt during my absence on a weeks holiday.

On a more serious note, most of are now equipped with Blackberries, I-phones, Netbooks etc, which means that there is no excuse for us to be out of contact; which really begs the bigger question 'should we deliberately put ourselves out of contact?'

An old friend of mine was head of IT for the UK subsidiary of a large US corporation and as such, was an early adopter of these technologies. On a typical night out the US parents would start turning up to work at 10.00 our time and his Blackberry would start buzzing with emails. He felt obliged to read and act, even though in reality he was unable to do anything from his position on a barstool. Despite all of his friends explaining that reading emails in the pub was a bad thing, he continued to do so, and worry about the day ahead which made him, frankly, bad company. (and needlessly stressed).

As a small business owner, it is natural to be concerned that you could be missing opportunities or - worse - that things are falling apart in our absence. In reality the second eventuality is highly unlikely and the first can, at least to an extent be managed and mitigated.

Some routine pointers:

• Take your holidays at a time of minimum impact to your business. (If you own a seaside cafe, best not to go away in August!).
•  Pre-empt and handle as much as possible in advance.
• Advise regular customers and contacts that you will be away. Offer them an alternative where possible, but ask them only to call you personally in an emergency.
• Put auto-responders on email, voicemail etc notifying your away dates and if possible, providing alternative contacts.

Business owners should be aware that - unless you are in an emergency business -  very little actually happens in a week or even a fortnight (many of us recall going on holiday leaving a long 'what if' list to find that same list untouched on our return). Also, your customers and suppliers will - almost without fail - recognise your right to holiday in peace.

I have mentioned in a previous blog the value of being friends with the competition. I can name numerous instances where I have been diverted to a supplier's competitor whilst my supplier was on holiday. It takes trust, but then so does much of our business & personal life.

From a personal viewpoint I take a very simplistic view - I turn on the Blackberry once a day just to make sure there is nothing business-threatening and send a personal notification to emails and voicemails promising prompt attention on my return (or giving the number of my stand-in).

Invariably on my return people will apologise for having interrupted my holiday and the business relationship will benefit as a result.

Good ideas / bad ideas / too many ideas.

Once your business is out in the open, there will be no shortage of people bombarding you with well-intentioned thoughts and ideas of how you can improve, expand or simply change your business model. The more public-focused your model, the more frequent this input will be, so if you are running a pub or cafe every third customer will want you to hear their input.

These ideas will, of course rage from outlandish, through varying degrees of impractical to useful and sometimes immediate action. The real challenge lies in managing your own though process and avoiding running off at tangents to the detriment of your core business.

One poster - very sensibly - suggested that it was remiss of me not to run courses in the summer as that is when teachers have most time on their hands. The temptation was to make a sudden and determined foray into this market offering, say 2 X 1/2 day courses. Fortunately I was saved by the sheer impracticality of targeting on-holiday teachers and will be concentrating on my original plan to start after the school holidays.

Meanwhile, on my little jotter there are currently 5 ideas for expansion. And the business hasn't started yet.

The great website myth

'Give a man a £10,000 marketing budget and the first thing he will do is blow £9,500 on a website'

I think I am being gender-specific here. This is partly because we are all a bit geeky but far more so we do it on the principle that if we build a better website, the world will beat a path to our door. Sometimes this takes an extreme form - such as a local tradesman with a fully-functional Flash site - not only will this not help your business, it will actually turn business away.
 
I (rather smugly) like to tell people that a website can be one of 3 things:

1. A shop.
2. A source of information and reference.
3. A millstone.

The third case happens when you over-invest in a site then fail to keep it clean and current (a bit like having a store in a fancy precinct with dead flies in the window). 

Only once you have decided on the function of your site should you decide what you want it to look like and what the content should be. In the course of my job I generally look at a site to find out about more about a prospective client's business. Drawn below is my own personal list of observations on how to get the best front-end results on a site.

• Download speeds. Things like Flash animation and over-use of graphics slow your site down. In certain sectors these are relevant and necessary, but otherwise there is no need to burden your site with them.
• Images / pictures. A purely personal viewpoint - but I have no time at all for boring, generic library pictures (almost every money-based website I visit seems to have a picture of someone in a suit looking up at a tall building and a pile of coins at a jaunty angle. Why?). Try wherever possible to use interesting and personalised images of your people, your products or at least something relevant. A lot of people don't agree with me on this.
• Rolling content. Can there be anything more moribund than a news section whose only entry reads 'Oct 2008 - We are pleased to announce the launch of our new website'. If you are going for rolling content, then there must be a commitment to keep it current, relevant and interesting. 
• Gobbledygook. If you are only interested in attracting visitors with commitment to Nuclear Fusion, then it might be appropriate to fill your home page with jargon; however the majority of sites are designed for a mixed audience, so the core information should be comprehensible to all and not riddled with superlatives and management-speak. There is other opportunity on the site to connect with the technical crowd. I kid you not, there have been many occasions where, having visited a website I have had to go back to the customer to ask what they do. (I accept this is partly for SEO, but that shouldn't preclude a clear statement).
• Who are you? It is essential somewhere on your site to say who you are - legal company/partnership/sole trader details and a form of direct contact other than an auto-email. Not only is this a legal requirement, it also builds a lot more confidence in your business.
• Spelling & grammar. The focus of much recent press, visitors to your site will judge you on spelling and grammar. OK, if you are a local tradesman it might not be a big problem, but there are only 2 safe assumptions: first no-one will think badly of you for using good spelling and grammar and second, your web designer will not correct it for you.  We all make typos and many of us can't claim to have perfect grammar, which is why your content should be critically checked by several sets of eyes before going live.

There is a lot of material available about web content - this is based only on my personal experience, but I hope it helps..

Wasted marketing

Quick question - how much of your marketing material is wasted?

For clarity, I'm not referring to whether the reciprient reads (or even receives) it, or whether it is effective at a campaign level - I'm actually referring to the millions of brochures, pens, keyrings and even business cards that sit in a cupboard only to be binned when they are deemed out of date. Think about it - every single item that goes in the bin is actually a wasted opportunity and no-one will call you because you have a drawer full of keyrings.

I doubt even the most precise marketeer on here would have 100% control of their stocks of marketing materials, so everything left after the campaign sits in the cupboard - sort of 'saving it for best'.

Just to put this in perspective - instead of putting a box of brochures in a bin, what about if you simply spread them around the carriages of your morning train, or around the pubs in the town centre? What are the odds of someone picking one up and being interested (perhaps not today, but perhaps next year)? I've no idea - one in a thousand? OK, not terribly responsible but not bad odds for free marketing really.

A little story - this sounds unbelievable but I can assure you it is true (It can even be verified). One day, several years ago I had arranged to meet a girlfriend in central London after work. She was notoriously late but I, the consumate gent, felt I should arrive on time and be close to the arranged meeting place. To fill my time (and not be drunk when she arrived) I walked around offices stuffing brochures through doors. Several months later we received a phone call - it was from the managing agent of an office - it went something like this 'I've picked up your leaflet from one of our premises which is unoccupied. Funnily enough I was talking to another tenant who is actually looking to lease some equipment, should I put you in touch with them?'

Cut to the chase - this went on to be our first £1 million transaction and was for several years our largest client. Because I stuffed a brochure through the door of an empty office.

So, simple message - go to your stationery cupboard, pull out any marketing material - and do something with it!

Cashflow - the vital business ingredient

Frankly, this is really too important a topic for what is supposed to be a relatively light-hearted business blog - it is also in danger of turning into a rant, so I will keep it simple.

On my course I tend to ask the simple question 'what is cashflow?' this is often met by quizzical looks - either because it's a stupid question (the rule is there is no such thing as a stupid question, so that's out), or because people simply don't know. Often, the response comes along the lines of 'it's profit' or 'it's the same as turnover' which, in the context of business success is deeply alarming.

So, in a nutshell, turnover and profit are paper or accounting functions - they are not real money. Cashflow is real, hard money. Some simple examples (ignoring concepts like fixed and variable cost):


XYZ engineering sells specialist components to K Motors for £1000. Their buy-in cost is £400 which must be paid up front. XYZ agree to pay on 30 days, but in reality will aim to spin that out to 60 or even 90 days.

Whereas Super-Dupermarket buys a job lot of carrots from Farmer Palmer for £1000 and sells them within a week for cash at £1,200. They won't pay Farmer Palmer for 90 days.

So, who has the best business? XYZ are the more profitable by quite a wide margin, but they are also the ones who are likely to go bust - because they don't have any cash!


Superdupermarket can re-invest Farmer Palmer's money up to 13 times before they have to pay him, whilst XYZ are funding an overdraft (or factoring facility) whilst they are waiting for payment and, effectively bankrolling K Motors' business.


Pretty obvious in theory, isn't it, but as long as K motors are OK and are going to pay, why should you worry?

You should worry because:

1. However good your credit checking, there is always a risk that K motors won't pay, in which case you lose not just your profit but your capital input.
2. Cash is more valuable than profit.

To use a harsh analogy:

Losses are like cancer - they will kill you slowly. Cahflow is a heart-attack - it can kill you instantly.

One of the most constantly naive assumptions we see on business plans is that customers will pay on time (indeed that they will agree to your credit terms in the first place), thus we are presented by healthy looking cashflows which show goods being bought on 30 day trade terms, and customers paying on 30 day trade terms, so in context of 'stress testing' - you are a new business, what if you can't get trade terms? And what if your customer (assuming they agree to 30 days which most supermarkets, for example, won't) then doesn't pay for 60 or even 90 days (which is by no means uncommon) - does the cashflow still work?

There are many issues here - forecasting, negotiation, credit/collection procedures but far and away the most important facet in business is that cashflow is everything!

Sorry, I'll try to be more jolly tomorrow.

Herding cats

Back in January, for a variety of reasons, I took it upon myself to organise my local pub's Curry Club. Not terribly  taxing, get a list of email addresses select a curry house and get people together once a month.

There was lots of enthusiasm and people were coming up asking to be put on the list (I think there is an inclusion thing - people were terrified of being left off the list even if they didn't like curry). The list now consists of almost 50  names.

The routine was quite simple - early in the month I would send a notifier of the date and chosen curry house. Based on responses I would book a table for about 20% more people than had responded and send an email confirming I had done this then, 3 days before the event send a reminder.

Outcome - attendance never bore any resemblance to commitment (neither direct nor statistical). People would turn up without having responded, people who had responded would fail to turn up (sometimes with apologies sometimes without). Interestingly people who had made special requests to be added to the list would neither respond nor turn up. Overall, it didn't really matter, since a curry for 3 is as engaging and fun as a curry for a group of 12 - the major embarrasment for me was when 3 people turned up to a restaurant which had prepared a table for 12.

The point here is that this was organising something that people clearly wanted, at no additional cost to them, amongst friends, yet it was still virtually impossible to get them together as agreed at the right time and in the right place (accepting that I could have phoned and confirmed which was somewhat beyond the spirit of things).

Anyway, the point here is that the course I run clearly catches people's imagination and there is much potential interest - even getting them to pay an advance deposit doesn't appear to be a problem - confirming dates for a 6-week span, however, does. I want to be flexible, but it is important to fix some firm dates very soon - do I accommodate the majority or those who appear most committed?

1st week of August my dates will become definite, though I cannot really win, I hate to lose customers!

One-touch admin

This is a busy week, full of networking events - sort of a storm before the summer lull.

The flaw in networking for these courses is that most of the attendees have already established their business so are out of my target range. However lets not forget the second contact effect, as those (particularly quite new) businesses can be great referrers as they are only too aware of those little mistakes that cost time and money.

Anyway, to the point, time out of the office = backlog in admin. There are purists who suggest that a piece of paper should only be touched once - IE open - deal - file.

I am not a purist, so adopt my own variation of this principle and have 'one touch sessions' - quite often a Friday afternoon, where every piece of paper littering my desk must be dealt with effectively.  The process can be quick or prolonged, but in my view dealing with bulk is immensely satisfying.

Some criticism

I'm delighted to say that feedback on my blog has been largely positive, though there have been a couple of criticisms which I feelI should address and explain.

Firstly, a few people have pointed out that, for someone teaching people how to set up in business I seem to be making a lot of mistakes in mine. This is technically true, but most of my mistakes are by way of deliberate testing, and treading in areas which I know are outside my general area of expertise; probably akin to a chef trying a new recipe - he may get it wrong a couple of times, but that doesn't make him a bad chef does it? Also, I am quite deliberately reporting mistakes partly to help others avoid them and partly to reassure those who see mistakes as a form of failure.

The second criticism is that not much appears to be happening. Unfortunately there isn't much I can do about this; due to the summer lull, it seemed sensible not to run courses in school holidays which, in turn meant that I couldn't start before the holidays as each course runs for 6 weeks.

Every business is different - if you are selling low value items it is possible to produce revenues more or less from day one, whereas if you are developing a product a revenue stream might be months or even tyears away, In my case income cannot take plavce until a course date (even if I take deposits, which will not be recognised until the course commences).

I hope that helps - things should start to happen soon!

Got my logo!

I am delighted to have taken delivery of my logo - featured above. The designer is concerned that it's not good enough - frankly I will say he is wrong - I love it and will be adding it to anything I can.

So my thanks to the collaboration that produced it, effectively for free (I think it might cost a drink or two).

This morning I attended a very interesting seminar on marketing which, amongst other things, helped me to recognise that there is no magic in social media - it is really largely about getting a good base of followers. Sort of 'do lots of marketing so you can market effectively' - so if you thought you were missing some magic - no - it's just all about what you put in!

Also delighted to meet a lady who has left the Public Sector to set up a successful business - always encouraging!

Sending e-mailers and newsletters.

Today I sent my first newsletter using a Mailchimp - a free online service mentioned previously. Without wanting to sound like an evangelist - it was remarkably easy and the end result was pretty professional (if I say so myself).

To put it into context, I have only 'normal' computer skills (ie I know my way around most standard Microsoft products) and am certainly not a graphic designer. This first test newsletter took me 2 hours to compile, but much of this time was spent familiarising myself with the specific workings of Mailchimp - so I expect my next one to be rather quicker.The timing ignores the fact that content has been spinning in my head for a few days.

On a cautionary note, because it is so easy it is also easy to 'save and send' without sufficient checking. Always send tests to a couple of critical friends - better to wait a day than send errors in what is supposed to be a professional document (NB spell check is in American and I don't think you can change it).

 Also, I have been warned, but not yet experienced that some recipients will reject you automatically for using automated senders - I don't know a way around this.

Obviously the success of the mailing comes down to good data - this was a test to the first part of my cleansed database, kind of a reward for a few days of burgers..

As they say on the BBC, other providers are available.

When the money has gone..

OK, so I have invested in some local advertising and blown all but £10 of my budget! With hindsight I wish I had upgraded and not left a paltry £10 sitting around!

The ads appear in 2 weeks, so I will report on results. Fortunately the business has no recurring costs so I will concentrate my efforts on my small tasks (elephant burgers) and building my presence on social media. (Interestingly from placing ads I discovered some appropriate local sites for this purpose).

I also have half a box of my original postcards, which I must get out on boards or in hands - golden rule of marketing material - use it, don't save it. Every card or flyer that is left over (This often refers to companies changing details or rebranding) is a wasted opportunity.

Elephant burgers (AKA how to eat an elephant.)

From somewhere in the dark recesses of my mind I recently recalled a course  many moons ago run by TMI (Time Manager International) and entitled 'how to eat an elephant' - a concept which is outlined here - how to eat an elephant.

 Our elephants are all around us, in both the work and home environments and whilst mowing the lawns over the weekend (something of an elephant itself, as the management company have only done it twice this year) I thought about this in the context of the business plan. Largely through necessity and pressure from banks or investors most business plans rely on big round figures which are sometimes backed up by a breakdown of the underlying assumptions; thus a business relying on tele-selling might have monthly revenue £10,000 = 100 calls per day (20 days per month), average 5% conversion, average order value £100. The visible plan won't show the testing or flex in these assumptions - such as the fact that - whilst 100 calls a day is feasible - it is unlikely to be a realistic average. It is easy to suspect that in a lot of cases the underlying stats are adjusted to the end result rather than the other way around.

Unconstrained by the need to impress investors or banks, I have set about rebuilding my business plans (2 businesses) based on lots of bite-sized goals set daily, weekly, monthly. Thus, rather than making X number of calls, I have set my goal to get in touch with 2 existing 'live' contacts, and to make contact with 3 new (named) business introducers or prospective clients. Of course, this might be 5 phone calls or 100.

There are about 6 of these 'burgers' each day, some bigger than others; on a purely temporary basis I have removed any kind of financial parameters until the underlying assumptions are tested. The burgers won't fill the day for a number of reasons, such as that the main goal is to stimulate incoming enquiries, which must then take top priority, plus there will always be random items and tasks to do (something which almost every business plan ignores). If my day ends at 2.00 PM I can always add more or treat myself to an afternoon off, which is supposed to be the benefit of running a small business!

Looked at in isolation the plan looks extremely unambitious but, interestingly, if achieved it should actually produce good results.I am looking forward to testing and refining it over the next couple of months.

Incidentally, my biggest commercial elephant is my database which comprises about 1000 contacts (many probably obsolete) and is spread over 3 different media. I have decided to set my email-marketing database up on Mailchimp - a free email marketing service about which I have heard mainly good things, and to test and transfer 5 items a day - it will take a long time, but at least it will get done,

Buying advertising

There is an old adage that says the the easiest person to sell to is a salesman. Having spent my entire career in sales, I would qualify that somewhat by saying that a salesman will buy from a salesman or, more simply I'm a bit of a pushover if you know what you're doing.

On the flip side, I'm often tempted to walk away when faced with indifference or incompetence, even if I like the product.

In previous businesses we have put considerable amounts of money and effort into direct marketing and promotion on a national basis, but have never really advertised, hence I am a relative novice to this game. A fact that I clearly illustrated with my first question 'what does it cost'. (I was happy to show I was a novice since I was seeking information before placing my ad).

So, I'm quite clear in which journal I'm going to use, but have some questions about placement, timings etc. Surely they can help me with this? My first call to the advertising department of the paper in question was a week ago, and went something like this:

ME: I'm thinking of running an ad, and wondered if you could give me an idea of prices?'

HER: 'Well, it depends on how many words you want and where you want it placed'

ME: 'Yes, I appreciate that. It won't be a big ad; it's for a business start up course so I'm thinking that it might be best in the job section?'

HER: 'Yes, the job section would be OK. Do you want to give me the ad now?'

ME: 'Well I really need to understand how your pricing works and if its better to go for a series and what choice I have in placement'


HER 'Well, that depends on how many words you want'

ME; 'OK. can you email me a rate chart?'

HER: 'Ok, whats the email address?'

She took the address and checked it; to date no email has been received. With my salesman's hat on - well done, she tried to close, but she made no attempt at all to discuss needs or wants and didn't follow up. Bad!

Yesterday I emailed a request for a rate chart again,. As yet no response. I actually want to advertise but they might yet prevent me from doing so!

PS. 'Doh!' moment: I spent several hours yesterday in the company of a seasoned journalist (mainly discussing News of the World) and didn't even think to ask him if he knew any local business editors. Journos are like a club - they all know each other. Silly me!

The size perception

In these days of broadband, web-based business and super-connectivity it is relatively easy for a bedroom-based business to create an impression of size and (by implication) competence. If you are looking for national contracts or are aiming to compete on scale this can be a real benefit, but all too often it is pure vanity. A vanity I must confess that I have been guilty of without even realising it!

My early career was spent working in major banks, so the scale wasn't illusory. When I set up my first brokerage my partner and I instinctively adopted the 'national presence' image without really thinking about whether this was beneficial - we even took this to the extent of setting up the business as a Plc (which involves quite a lot of extra hassle and cost). With the wisdom that comes with hindsight, I would seriously question whether this 'look how big we are' approach actually alienates a large part of your potential client base.

Anyway, Kickstart really is about me engaging directly with individuals, so there is no doubt that it's all about being a small business (and living below the VAT threshold); so why do I constantly find myself playing the 'big' card - referring to myself as 'we' and trying to look corporate?

It really is all about me, working from home in a Surrey village. Slapped wrist every time I pretend otherwise!

PS. I haven't a clue why my titles are sometimes red and sometimes grey; any ideas?

PR - Press Releases

This is an area which I freely admit to knowing little or nothing about, but I am aware that for this type of business a bit of publicity in the local press is worth any amount of advertising.

So, the pointers I have picked up from asking around:

• Have an 'angle' or appeal to public interest - pure advertorial won't make it.
• Send copy to a relevant, named individual, not just to an 'editorial' email address.
• Adapt copy to the house style of the publication you are targeting. (cue a little ditraction time. Topless photo of previous student 'Tania, 22 from Essex says...' or, for the Daily Mail 'Imigrants benefit from business course..' Sorry).

Another piece of advice I received a long time ago is 'try to involve children or animals'. It's remarkably true, but I am really struggling to see how I can make it relevant.

I think that the angle is that I'm using local pubs - user friendly & supporting local business - or the potential resource to those facing redundancy; but that will only work if the publication in question is running an article on jobs and redundancy.

Time to put my thinking cap on - ideally I would like something to appear about 2 weeks from now.

Success and failure

Today I was asked a problem which was both obvious and interesting - namely 'when will you know whether your project is a success or a failure?'

It is obvious (the question, not the answer), because I have clearly set this up as a challenge. It is interesting because there are 2 distinct and possible contradictory levels of failure. at a challenge level I will fail as soon as my outgoings exceed £100 but can easily go on to succeed as a business. It would, of course be extremely foolish to allow a business to fail by deliberately starving it of investment, on the other hand it is a common failing of business people that they continue to throw money in in the belief that 'everything will turn out ok'.

So, to give as honest an answer as possible, this stage of my journey will end when I can see a revenue stream (It isn't currently my plan to incur extra overheads or to grow the business in terms of people or resource). At a challenge level I have a figure in my head to which I will invest, so that the challenge can fail without stopping the business.

Unless of course it's a sure chance..

Catching up with finances.

So, the course date is 2 months away and I have done a quick recce of my finances; it would appear that I have just under £50 to 'blow' on stimulating a few more enquiries.

I should say at this point that having spoken to several other people I have probably been unduly harsh on myself in some of my budgeting - for example I have costed mileage in at .40 p per mile (reviewed to .35 as the true cost of running my specific car) - most people I spoke to have taken the cost of just fuel or, often, nothing at all. Similarly I have put a cost on my mentoring time which, arguably in opportunity terms is not valid.

Any way I am sticking with my decisions and will decide how best to use my remaining budget - network events, promotion or straight-forward advertising? You don't get much advertising for £50, but I am very tempted to give it a try in view of the tight geographical area I'm looking at and the 'fuzzy' nature of my target market.

This will leave me penniless for the purpose of the challenge, but there are no overheads likely to occur, so I think an 'all or nothing' mission is called for!

Will keep you informed of advertising and results.

To bill or not to bill?

Sort of a long range question here.

I am delighted to have been invited back to my old seat of learning in Oxford (OK, the University formerly known as Oxford Poly). Obviously with long student holidays nothing will happen now until well into September, so it shouldn't impact my £100 budget (I'm rather hoping to have cracked it by then!) and I am quite happy to deliver the presentation for free, particularly as it is basically an advertisement for the course. The big question, should I go for traveling expenses, or should I put this down to marketing with an element of social pay-back?

There's plenty of time to decide..

The logo - another favour.

A bit of a delicate one here - I could end up shooting myself in the foot, but it does highlight the pitfalls of calling in favours.

So, lets say, I have a friend who wanted a logo for his business. He approached an old friend who he knew to be something of a whizz at graphic design. (It was a bit of a cheek as they had not really been in communication for several years). The friend kindly said yes, however that was several months ago and there is still no sign of the logo. I am - sorry - my friend is - convinced that the finished product will be superb and well worth the wait (and will represent a significant saving in professional costs), however he would really like to put something on his website and stationery now!

Of course, the simple fact is that if you are going to abuse people's time & skills you have to accept your place down the pecking order - usual business rules don't apply! He'll just have to wait. I expect something might appear on this site soon!

More Social Media

I went to an interesting presentation last night arranged by #surreydigital <see, that's a hash tag!

I had expected to learn lots of secrets on how to use Twitter effectively and to be disillusioned of my view that its just thousands of people all shouting louder than each other. In reality what we got was an amusing but relatively uninformative talk from a BBC chap called Jon Jacobs @thoroughlygood <don't know what that's called, but they use it on Twitter.

 The best word I can use to describe the overall message was 'reassuring'. There were no dramatic insights, but there was a realisation that far too many people just shout, and some wise words to 'be yourself, admit failures and be spontaneous', which, if I'd bothered to formulate my thouhts before, might well have been what they were.

Any way, I am reasonably sure that Twitter has a place in this particular business, so have allocated a set period of time each day. Starting Monday,of course.

By the way, apparently there's something called Tweetdeck, which helps you to filter content. And I still won't follow any celebrities.

PS> Call me a killjoy, but I have absolutely no intention of starting random words with a tw..  - that would be twidiculous. (well, just the once..)

An interesting decision.

Having chosen to distance myself from Strode's College, they have become interested in us working together (treat 'em mean to keep 'em keen, we would have said in my more boisterous days!).

The Director of Continuing Education has now suggested that we get the course accredited for EdExel WorkSkills, which will allow them to obtain funding for jobseekers.

On the plus side, any accreditation will add value to a start-up business and it will cost me nothing (no cash - it will cost me time!).

On the downside, what they are after bears no resemblance to my course but is all about a strange version of skills requirements - a quote from the guidance book 'they can watch videos of 'Dragon's Den' to identify skills used by successful entrepreneurs'. Really? What planet are they on?

Overall, I think it must be worth doing - cue the inevitable paper avalanche...

Deal tracking - its about finding positive outcomes!

Firstly, what on earth is 'deal tracking'? Deal tracking is the process of taking a deal back through all of its stages to ascertain which people/events were influential in the outcome. In fact, it can be applied to all life events (so should, perhaps be life tracking, but we are here to talk about business).

Many people instinctively do one or 2 stages of deal tracking (eg: I got that deal because Mr X referred me; and I know Mr X through the golf club), however for various reasons (time, fear of losing credit or just disinterest) we seldom go further. It is the going further that reveals the most interesting results.

If I track my path to this business the latter events would be:

• I started mentoring as a logical extension to teaching. (pat on the back the those who made the suggestion).
• I went teaching alone because I felt the college weren't marketing it very well (pat on the back to me).
• I  applied to Strodes because my sister urged (nay nagged!) me to do so. (Pat on the back to my sister).
• My sister suggested it because I had come back from the States & was looking for a different direction (no pats).
• I was in the States to renew a relationship with the proverbial 'old flame'. (And I would have sworn that no good came out of that - so a grudging pat on the back to Her).
• It was easy for me to decamp to the States because my house was rented out and I was temporarily living in my friends' pub (pat on the back to my friends).

This could go on for a long time, but will delve into my personal life - as will many of your transactions - so needs to be a private thing.

There will also be many tangents - for example people on my course at Strode's picked up details in Tesco's, so you can pursue both - 'why were you in Tesco's?' and/or 'why were you interested in a business course?'

Isn't this a waste of time? Personally I think some selective tracking will be the best time you will ever spend - contacts and events you had written off as 'a waste of time' will re-emerge as influential in positive events - this is a message I would love to convey to anyone who makes blanket comments such as 'networking is a waste of time' or 'advertising doesn't work'. Do a bit of tracking and I guarantee you will be surprised by the positive outcomes.

Back to money. The root of all evil!

Everyone comes at business from a different angle; some people are lucky enough to get a rolling start whilst still on salary, others have a need to earn from day one. Similarly, different business models will generate income at different rates - mine has no realistic chance of creating proper income before September, when courses start.

Avid readers might have picked up that I have involvement in another business, though I haven't been particularly active in this for the last couple of years.

In order to replicate some of the tougher situations, I have created a strict rule that any work I do (for my other business or for anyone else) I will pay myself no more than £60 a day, which seems to be a benchmark 'stacking shelves in Tescos' figure. So that is what I was doing yesterday (earning, not stacking shelves..)

Incidentally, I did a rough business plan over the weekend - a full 6 pages! It has helped me to refocus my efforts.

Being busy & earning money!

No blog yesterday because I was out all day (and much of today) doing what I'm supposed to do; teaching and networking.

Had my first mentoring job in the morning, which was quite surprising as I had always assumed that mentoring would follow teaching by some distance - still, we know what they say about assumption, don't we?

Without disclosing actual figures, I had to make decisions for the sake of the £100 experiment how I would treat time & mileage. I have decided to cost in face-to-face time at the hourly rate paid by Strodes College (which is by definition market rate) and mileage at 40p per mile. In the short term traveling time will not be counted.

On this basis, and accounting for an installment for PI cover (which I postponed til the last minute), my budget has now recovered to about £52 - burning a hole in my pocket...

The evening networking was organised by a Quango called Enterprise First, who do roughly what I do, but at no cost. Nothing is ever that simple, and if I can teach you just one thing it will be to embrace your competition, don't distance them - you will be surprised how many opportunities there are to work together.

Social media - how to use it

Further to my previous post regarding my IT prowess, I have decided to upgrade my computer skills from 'poor' to 'average'. This isn't due to any flash of inspiration, or a crash course in IT, simply the realisation that lots of the people who claim to be good on computers are referring to the ability to handle Word, Exel and perhaps a bit of Powerpoint - all things in which I consider myself reasonably proficient. Also I'm feeling a bit smug having taught myself a few HTML commands and made several successful changes to my website!

The new area where my skills and knowledge are averagely low are in the arena of social / new media, which I do feel will be a useful tool to reach my intended market - ie people considering or embarking on start-up business. The name is out there on Twitter, Linkedin and Facebook, but as yet I haven't really worked out how to use these as an effective marketing medium. The temptation - particularly on Twitter is simply to round up as many followers as possible and shout loudly - though I am reliably informed that is not the way (unsurprisingly!). There are lots of training courses out there but - even if my budget permitted - could I really spend time and money learning how to 'Tweet'?

The business plan.. Confession time

OK, time for a little confession - I dish out some good advice (if I say so myself!) but I don't always follow it.

On this occasion I m specifically referring to my business plan, or lack of one. I do have excuses - firstly that things to date have been rather self-propelling and have created their own momentum; secondly I have actually looked for flaws and problems just to help me to gain more direct experience and to answer 'what if' questions. Anyhow, the result is that I have rather lost my way on marketing and that my mud-flinging has become a bit ineffective (A bit of mud-flinging is OK, but you should at least know which wall you are flinging it at!).

Excuses aside, I still maintain that a business plan is essential, It needn't be a literary masterpiece - 'fag packet' is fine as long as it covers the bases and is realistic in its assumptions.

So, that's the weekends task - create a business plan and stop being a hypocrite!

Presentation to a job club.

This morning I presented the £100 business to a local job club, followed by a Q & A on business start-up matters.

They were diverse in background, but were wonderfully engaged and interesting. It's easy to get carried away, but it would be marvelous to think that one or more of them will take the self employment route and go on to build a successful business - and why wouldn't they?

Mind you, it did take £2.20 out of my budget for parking....

Business and TV

Just a thouight, but it does appear that TV and media have managed to grab hold of the world of business, put some kind of formula on it and essentially destroy the notion of small business.

For many decades people were entirely happy with the term 'small business man' - it denoted a job or career as credible as any other and perhaps even gave you  a certain cachet in the community - especially if you employed a few people. Now, of course, 'small business man (apart from being sexist) smacks of lack of ambition; to be taken seriously you have to be an 'entrepreneur'. (Quote Alan Sugar 'surely entrepreneur is a title bestowed on you, not one you give yourself'). Whilst there are a few useful small business book, by far the majority are those by TV personalities, with titles like 'The first billion is the hardest' or 'how I conquered the world from my Grandma's fridge' (OK, I made those up, but you get my drift).

The truth is that most people who start a small business want just that - a small business. A decent living and then something to sell or pass on as an inheritance; whilst we will all daydream about Lear Jets, Bentleys and castles in Scotland we fundamentally just want to get up in the morning, do an honest job and sleep at night. Of course, this wouldn't make good TV!

Before I go, 2 more things: First, have you ever encountered a single person (yet alone a group of 20) as sociopathic as those on The Apprentice?  Second, if anyone spoke to you like the Dragons speak to their contestants, wouldn't you just slap them?

Working from home

Clearly on a £100 budget renting an office isn't an option so working from home is my only alternative. It does have advantages, such as the capacity to crawl out of bed at 7.45 and be at work by 8.00, the total avoidance of the M25 (OK, not an absolute requirement of office working) and, of course, it's cheap - though not actually free.

The last time I worked from home I was married with a teenage kid and the main downside was 'at home' was largely interpreted as 'available' so I was bombarded with various domestic requests. This was, to an extent, mitigated when I created a garden office - which was more expensive than renting but did more than recoup its cost when selling the house, so definitely classified as an investment.

This time I am free and single (young?) - I'm also quite sociable by nature - so the key risk is that of going 'stir crazy'. Of course once I'm up and running, I will spend a good portion of my time customer facing, so this won't be a problem. In the meantime I compensate with visits - and human contact - to the gym (good) or the pub (less good).

Interestingly I have been offered corners in offices at very reasonable prices - offers I might well pursue when I have cracked my start-up budget.

8th June - image and perception

One thing about you and your business is that, once people have met you they will judge you on your capabilities - until that time they will judge you on your image which is why it is important to create a good image from the word go.

Probably the silliest corner I have cut is not having a landline number (I made a decision at a personal level not to install one, and obviously my business budget won't now stretch to it). By way of mitigation I have persuaded a friend to 'lend' me the use of an office address for correspondence, so at least things feel more solid.

I am certain that I will never lose a contract through being effectively home-based and working from a mobile phone, but I'm terrified that I might not get the opportunity to see the contract in the first place!

5th June - The big lie - time & money

The greatest of all cheats (or self deception) is the concept that time is a free commodity - time is of course the most valuable commodity we have as we know for certain that it is going to run out..

This manifests itself at every level (both within the business and in a lot of what we are bombarded with). Posit the daily forum-style postings such as 'do your own SEO for free' or 'I do my own accounts - it costs me nothiing'.If this is done in office time then you should have a fairly good idea of the actual cost of your time - in terms of cash and opportunity cost - whereas  if you really have nothing better to do on a Sunday evening than trawl through key words or wade through figures (or, more disturbingly, if you consider this your hobby!) then you might possibly describe it as free. However for most of us 'spare time' is actually more valuable than work time for the simple reason that we have less of it.

From my own perspective, I have to date spent about 100 hours on this project, some of which was at the expense of my former employer (cue big argument - OK it was between the Bank Holidays, when my only role was to be there 'just in case'. In many cases where they are seeking redundancies employers will overlook and even support this activity). The rest was spent in either what would normally be free time or in 'other work' time (more in future  posts) which I have confessed above can't be described as free - I guess I will put it down as investment in capital - hopefully to be recouped on sale of the business!

For practical purposes, I will cost my face-to-face time at the same rate of my lecturing earnings, which seems a realistic benchmark.

A greater crime, of course, is to under-value other people's time. I think we will revisit this whole time/money theme a few more times!

6th June - Early marketing

The topic is marketing, so obvious this entitles me to talk in cliches; and the first big cliche of marketing is that nothing works but everything works (also paraphrased in the great quote '50% of my marketing budget is wasted, I just wish I knew which 50% it was).

My early assumption was that I would be selling primarily a 6-week course and that some mentoring work would follow in due course. For this reason I aimed my marketing very locally and primarily at the course. In fact, most of the early interest has been in mentoring and my first confirmed order has come from within the Public sector and about 30 miles away..

I have also received positive responses from Local Authorities but negligible response from direct marketing  though I'm quite sure this will follow - after all, no contact is ever wasted!

3rd June - Networking

Now I have caught up with myself! Today I attended a First Friday networking event in Guildford (A little plug for there First Friday). Everyone has different views on networking; I am convinced that it works but often takes a lot of ‘deal tracking’ to discover this fact.

Anyway, I favour First Friday because it is informal and unstructured – you have the opportunity to introduce your business – which I did – but none of this compulsory one-minute stuff.

There is, of course a cost to this – mileage, parking & refreshments. I cycled to the event so avoided the first 2 – I had a pint of beer (£3.60). After a big argument with myself I decided that this was not a business cost as I could have had lime & soda like several others people, so I’ve put £1.00 on the costs. I think this is the ‘squinting’ I refer to in the title.

At a practical level, I was unlikely to meet any potential candidates but could see potential benefit in making professionals (accounts, employment lawyers) aware of what I was doing. As it turned out I met and chatted to a lady who ran a job club with 50 members. I am presenting to them next Monday. Serendipity?

2nd June - Cheating and favours

Firstly, I’d like to clarify that the ‘cheating’ referred to in the heading relates not to any dishonest or even unethical acts, it refers to the lies we have to tell ourselves to fit our budget. Key amongst these is accounting for time, which will be covered, but there is also the aspect of calling in favours, which cannot truly be described as free.

When I described my concept to a certain friend, he immediately replied ‘so you’re creating a community of blaggers?’. I have a feeling he wasn’t entirely joking! He did, however go on to do me a big favour (thank you Adrian).

The key thing about favours – particularly from friends -  is that they have to be earned and they have to be repaid so in reality it’s a loan (a loan of time and skills) but I’ve a funny feeling that repayments won’t show in future accounts; I will have to do something with my conscience about this.

The first big favour – and interesting lesson learned was a website. Having spent several days of my employer’s time (no comment needed) fiddling about, I recognised that this – to put it mildly – was not one of my core skills. I posted on Facebook asking for help and received several responses along the lines of ‘have you asked so-and-so?), but no direct offers of help. So I asked ‘so-and-so’ (thanks Phil!) and the job was done!

1st June - Expanding the business

OK, so it’s a bit premature. All I have done is decide on a name  (if you didn’t know, there is no need to register a name as a sole trader) , buy some cards and get a domain name – surely a bit early for expansion surely? It’s probably more honest to say I expanded the concept. Plan A was (and is) to deliver courses in a pub environment, but many people I discussed this with said words to the effect ‘why don’t you do mentoring as well?’. At first I was reticent – surely millions of people offered this? Having done a lot of searching, I realised that there were a lot of related services out there (many delivered by ‘official’ bodies such as Business Link) and lots of consultancies but very few independents offering what I describe as ‘low-level, personalised advice’.

                                                         

So the BTM now meant Business Teaching & Mentors, rather than Business Training & Management.

31st May - Spending the budget

If you’ve read my first post, you will realise that this blog is running some way behind reality and that the £100 actually came to life in April, when I was on a full-time contract which left me little time to run a sideline business. I did know that the contract was due to end imminently (though ultimately it was I ended it).

So, having set a budget, what is the first thing a man must do? Yes – he must go out and start spending! The main business involved teaching in pubs, so I planned to put postcard-sized notes on pub and shop notice boards. These were ordered from Vistaprint – cost £22.93 (inc VAT – I’m not likely to register in the near future). Of course, the card has to stimulate action  in this case a website seemed the best thing, so on to Pickweb for a domain and email. That looked easy – ‘build your site in just 5 minutes’ reality – the site went live as per first post on 20^th May, though I did have holding content. Cost £17.39 + £5.50 per month (it is likely to be at least 2 months before money comes in, so add £11 to the outgoings). Incidentally, the overall hosting cost would be about half the price if paid in one hit but that’s the downside of a tight budget.

27th May - Good advice & bad advice

The success of this venture leans heavily on my belief that if you ask the right questions, in the right way, people in the know are generally very happy to offer advice and support. Of course this does depend on getting the right advice from the right people – these might be the people formally qualified or those 'qualified by experience'.

It’s a personal opinion, but I would always ignore advice from anyone who starts their response with ‘It’s easy you just….’ Or ‘I have a mate who….’. You also need to be aware that for every person offering quality advice, there are probably 5 who just want to be smart or put you down. Ignore them!

On a more serious note, once you start asking focused and relevant questions, people who actually know the answers will start to come out of the woodwork and in a networking environment (more of which later) you should get introduced to the people best able to give that advice.

26th May - The £100 challenge

In my search for relevant topics to teach, I spent significant amounts of time hanging out on business forums mainly looking at what questions people were asking. There are a number of recurring themes (many of which will come up in due course), but one of the most frequent laments was cash – either in the form of ‘I’d love to start a business, but don’t have any money’ or ‘I have a great idea, but no-one will lend me the £20,000 I need to make it work’. Just for fun, I have set myself a personal challenge to set up this business on a budget of just £100. Obviously this will involve calling in a few favours, cash juggling and perhaps some self deception on values – all of these will unfold throughout this blog.

 

Whilst £100 is probably a bit tight, I do hold firm in view that it is a positive thing to start a business lean and build from that point, conversely it is extremely dangerous to pump too much cash in to start as efficiency goes straight out of the window. Back in the Dotcom Boom, we all grew very wary of these VC-backed companies with executive furniture, fancy offices and flash cars who seemed to take delight in making losses year after year. Similarly I am deeply concerned by statements like ‘when I win the Lottery I’m going to open a restaurant’. Give me passion and a tight budget any day!

25th May - Where ideas come from..

Probably the most scary opening sentence I have seen in a business plan (and I kid you not) went ‘Me and my mate was in the pub’.

Notwithstanding the awful impression it makes, it is certainly true that some significant developments in my plan evolved from pub conversations (I can remember the conversations, so clearly not a wild night out).

Having learned that many Private Schools are charities and are obliged to make facilities available I had assumed that my venue would be one of these schools. A good friend (thank you!) questioned this logic – do people really want to sit in classrooms? (It is true that most of the negative comments on my college course related to the environment and strange chairs). Won’t it be strange pitching up to an empty school? Surely a pub would be a better venue? Now, pubs I know a bit about; they are generally quiet early in the week and any sensible publican will welcome a few extra sales and the longer-term marketing potential that extra clients can bring. So, another big decision was made.

24th May - My battle with IT

We all have strength and weaknesses; in the business context my nemesis is IT, which intimidates & frustrates me in almost equal measures. (My co-director of my other business would almost certainly tell you my biggest weakness is admin, but that’s another story).

This particular project has been forced back by almost 6 weeks by multiple computer failures – a problem compounded by the fact that I was driving daily to Hounslow, so trips to the computer shop could only be done on Saturdays. Having sat unopened for 6 months (my contract allowed me full use of their in-house IT, so my own had been neglected) I had to replace first a graphics card, then a wireless card (there is no logical explanation for this dual failure). Then, having finally got the hardware sorted I set about booting up and downloading the numerous spam emails & software updates – at which point the system completely fell over and refused to start. Another trip to my friendly computer shop – this time to be told there would be a 10 day wait for repairs. Incidentally, it is apparently quite normal for this to happen.

‘Why don’t you just buy a new computer?’ I was asked – the answer really is ‘I have absolutely no idea’.

Now everything is functioning, but I am about to kick my computer as I struggle with software issues to access and update my website, so kindly put together by a friend in New Zealand.