Received wisdom will tell you that you should never make assumptions (as put in Police Academy 'when you assume, you make an ass of u and me'); in the real world of course assumption form an integral part of every day life whether it is for basic self preservation, to save time or simply to test our understanding - it is simply too complicated to only act when you know for sure.
The most frequent wrong assumption that people make about my businesses is that the start up business feeds the finance business - they will say 'I see, so you set them up, then go get the funding they need'. In actual fact the funding business feeds the start up business; I am privileged to have a detailed insight to what a lot of businesses do - where they go wrong and where they go right - this insight is hopefully passed on to start ups to help them avoid those mistakes. Funding? If I can help you start with zero funds then I have had a success.
Whilst we are dealing in cliches, my dear Grandmother always used to tell me 'you won't get there any faster by speeding'; one of my more destructive traits is a compulsion to speed on motorways. Whilst in many cases I can directly prove Grandma wrong, the truth of the matter is that she could more accurately have re-worded her caution as 'you won't achieve an more by speeding'. Put into context, because I like to drive fast on motorways, I assume that on a journey of any real distance I can average 60MPH. Ignoring the rising improbability of this happening, I am of course increasing the cost per mile covered and incurring secondary risks such as being caught for speeding (time consuming and expensive), accidents (potentially fatal) and, because I insist on using motorways I often actually travel further than I need to. Do I make extra time? Not really - I might get there sooner but then I spend 10 minutes waiting for the other person to turn up.
Where was I going with this? Oh yes..
By far the most common business start-up mistake is the belief that more cash equals more chance of success; in very many cases this can be the very opposite of what actually happens. Like the risk incurred by speeding, having too much cash in hand carries inherent psychological risk - witness the lottery winner who feels they should now start a business, lurching from franchise to dodgy 'opportunity' like a drunk in a casino, with neither plan nor realistic chance of success.
Alternatively, like my spare 10 minutes the cash will just sit there waiting for something to happen.
A successful business will be planned then capitalised, not the other way around, so here is my very simplistic Business Funding Plan:
STEP 1: Compile your plan and cashflows on the assumption that there is no capital available.
STEP 2: Look at where you go into deficit and ask yourself is there a realistic way that you can avoid or postpone expenditure without fundamentally damaging your business.
STEP 3: Look at ways of improving cashflow rather than introducing capital.
STEP 4: If you are certain that capital is required, build it into your plan as a loan, with repayment terms. (Even if it is your own money that you are happy to inject).
Remember, having cash in your business might get you to your goal quicker, but will it actually be any better?
Sunday, 13 May 2012
Friday, 24 February 2012
More networking - sometimes it's best not to know!
Having set (and not met) my January challenge, I have ended up a month later still exploring and discovering new network events.
This lunchtime was spent in a riverside pub venue at the delightful Peal Network - a very usable mix of informal chatter and a sit-down 'meeting' featuring 1-minute presentations (no silly bells) and an agenda item of 'other network events you would recommend'.
Unfortunately I have now added the TWM Curry club to my schedule - thus moving further from my original goal.
Anyway, having attended events for 2 months solid, I am now obviously a world authority on face-to-face networking, so will share a few practical tips with you:
Tip 1: Never sell at a networking meeting. EVER. Introduce yourself; a brief sentence about what you do and back to them 'how about you - what do you do'. This is entirely counter-intuitive but believe me, it will work. The person you are chatting to might well ask more about your business, which is an invitation to elaborate, but doesn't open the door for your best sales spiel. Keep with me here...
Tip 2: Where possible, target your 'meetings' - quality rather than quantity. 3 good quality conversations can be better value that 12 encounters.
Tip 3: Think about your message. If you have committed to regular attendance (particularly on a weekly basis), you need to evolve your message - sometimes even straying a long way of your normal territory.
The temptation is to provide effectively a list of your products or services. Don't. Take a risk, and tell them just one thing that might be interesting & they will remember you (as someone who said something interesting, rather than the bloke or woman with a list).
Tip 4: Swap cards. Giving out your card is unlikely to yield results but convention dictates that they will reciprocate by handing you theirs - Thereby providing your with valuable information and an invitation to keep in touch.
Tip 4: Follow up! Think about what you want to achieve and go for it. Because you haven't already bored their socks off, you have plenty left to discuss. In a one-to-one meeting, where they won't be looking over your shoulder to see if their colleague / friend / customer has turned up.
They have given you information - use it to target your marketing and database - this is the warmest contact you will ever have!
Obviously I sometimes forget to follow this advice myself, but trust me, it works!
This lunchtime was spent in a riverside pub venue at the delightful Peal Network - a very usable mix of informal chatter and a sit-down 'meeting' featuring 1-minute presentations (no silly bells) and an agenda item of 'other network events you would recommend'.
Unfortunately I have now added the TWM Curry club to my schedule - thus moving further from my original goal.
Anyway, having attended events for 2 months solid, I am now obviously a world authority on face-to-face networking, so will share a few practical tips with you:
Tip 1: Never sell at a networking meeting. EVER. Introduce yourself; a brief sentence about what you do and back to them 'how about you - what do you do'. This is entirely counter-intuitive but believe me, it will work. The person you are chatting to might well ask more about your business, which is an invitation to elaborate, but doesn't open the door for your best sales spiel. Keep with me here...
Tip 2: Where possible, target your 'meetings' - quality rather than quantity. 3 good quality conversations can be better value that 12 encounters.
Tip 3: Think about your message. If you have committed to regular attendance (particularly on a weekly basis), you need to evolve your message - sometimes even straying a long way of your normal territory.
The temptation is to provide effectively a list of your products or services. Don't. Take a risk, and tell them just one thing that might be interesting & they will remember you (as someone who said something interesting, rather than the bloke or woman with a list).
Tip 4: Swap cards. Giving out your card is unlikely to yield results but convention dictates that they will reciprocate by handing you theirs - Thereby providing your with valuable information and an invitation to keep in touch.
Tip 4: Follow up! Think about what you want to achieve and go for it. Because you haven't already bored their socks off, you have plenty left to discuss. In a one-to-one meeting, where they won't be looking over your shoulder to see if their colleague / friend / customer has turned up.
They have given you information - use it to target your marketing and database - this is the warmest contact you will ever have!
Obviously I sometimes forget to follow this advice myself, but trust me, it works!
Tuesday, 31 January 2012
Business Networking
I don't do New Years resolutions, but I did start 2012 with something I've never had before (I bet you haven't either) - a business networking strategy. Like many people I have surfed many events over the years with mixed results; the strategy is to create a distinct focus and involves attending as many events as possible throughout January with a view to committing to 2 regular events.
As a general pointer, successful networking without weight gain requires a degree of self discipline I simply don't possess with most events involving food or drink to some degree - from the traditional 'full English' to fancy canapes and free drinks. Just make sure you balance your attendances with a bit of exercise!
I have mostly confined my attendances to the Guildford area and, even with a fairly tight geographical constraint I was amazed at the sheer volume of event available. So much so that I estimate you could actually attend an event each day within a 10 mile radius of our base.Quite often at one event I would receive invitations to several others.
So, with my new expanded waistline i have settled on my 2 events but am trying to decide how best to categorise events in a way that will make sense to you, so here goes!
Breakfast meetings:
These were originally the focus of my challenge. For the most part these events are fairly structured -following with varying degrees of flexibility and self-consciousness - the tight disciplines of BNI. The spin-offs tend to give themselves away with their TLA names (I have experienced BNI, BRE, BOB, BRX), the make-up of attendees and their formula approach. (meet/chat, sit down breakfast / one-minute presentation / special presentation / swap leads / meeting ends). There are very many people who can testify to how well this works but, at a personal level I'm afraid I felt after 3 meetings (various groups) that it was far too oppressive and a little self-congratulatory.
A lighter approach to the theme is offered by 4N, who operate nationwide and take themselves far less seriously, seeing themselves as 50% social 50% business. 4n hit my shortlist but ultimately represented too much financial commitment at this stage.
Informal daytime events;
Mostly held in pubs, hotels or bars there are a number of regular daytime networks, some of which are sponsored locally, some run on a voluntary basis by saintly people who evidently list cat-herding as a hobby.
First Friday is a lunchtime group operating mainly in Sussex and Hampshire - and Guildford, each group will have its own set of rules but a common theme is informality - you have the opportunity to present your business but it is entirely optional. Venues are mainly pubs, though one group did involve a fixed-cost sit down meal.
Business Biscotti is similar, but operates mid morning (9.30 - 11.30) which to some would probably represent half a day out of the office. I struggle to be subjective since i walked into room full of - sorry, there's no other way to put this - infeasibly attractive women. (Something to do with the Guilldford effect); so should I seek a business advisor who can pass me leads, or the pretty lady from the dress shop? On a serious note, the room did balance out over time and did lead to good, informal networking - all for the price of a coffee!
Other lunch events I attended were sponsored and highly localised - Basepoint serviced offices run a good monthly event - with possibly the best canapes in the business; whilst a local firm of solicitors provide free food and wine in their Property Club (every 2 months). Whilst this is technically for property specialists, the fact that I offer finance to developers put me well within qualifying criteria.
Evening Events:
Unfortunately i had to cancel my invitation to the interestingly entitled Entrepreneur's Club, but will try it in February. Surrey Chambers also run a number of evening events, though I am unlikely to commit to regular evening events.
as mentioned, on my journey I was invited to several ad-hoc events. These, together with intermittent eduction type events where you will meet people outside of the usual 'netwrking crowd'.
From a well-intenttioned plan, it quickly became apparent that the networking pool really is very deep indeed - and I have succeeded only in scraping its surface; I still have a few testers to go, but have decided on my forward strategy, which is actually to embrace all of the daytime events listed above, whilst attending ad-hoc evening events. Breakfast clubs definitely have a use, but the costs, structure and formality don't work for me I'm afraid.
Hopefully I will be reporting positive results soon!
As a general pointer, successful networking without weight gain requires a degree of self discipline I simply don't possess with most events involving food or drink to some degree - from the traditional 'full English' to fancy canapes and free drinks. Just make sure you balance your attendances with a bit of exercise!
I have mostly confined my attendances to the Guildford area and, even with a fairly tight geographical constraint I was amazed at the sheer volume of event available. So much so that I estimate you could actually attend an event each day within a 10 mile radius of our base.Quite often at one event I would receive invitations to several others.
So, with my new expanded waistline i have settled on my 2 events but am trying to decide how best to categorise events in a way that will make sense to you, so here goes!
Breakfast meetings:
These were originally the focus of my challenge. For the most part these events are fairly structured -following with varying degrees of flexibility and self-consciousness - the tight disciplines of BNI. The spin-offs tend to give themselves away with their TLA names (I have experienced BNI, BRE, BOB, BRX), the make-up of attendees and their formula approach. (meet/chat, sit down breakfast / one-minute presentation / special presentation / swap leads / meeting ends). There are very many people who can testify to how well this works but, at a personal level I'm afraid I felt after 3 meetings (various groups) that it was far too oppressive and a little self-congratulatory.
A lighter approach to the theme is offered by 4N, who operate nationwide and take themselves far less seriously, seeing themselves as 50% social 50% business. 4n hit my shortlist but ultimately represented too much financial commitment at this stage.
Informal daytime events;
Mostly held in pubs, hotels or bars there are a number of regular daytime networks, some of which are sponsored locally, some run on a voluntary basis by saintly people who evidently list cat-herding as a hobby.
First Friday is a lunchtime group operating mainly in Sussex and Hampshire - and Guildford, each group will have its own set of rules but a common theme is informality - you have the opportunity to present your business but it is entirely optional. Venues are mainly pubs, though one group did involve a fixed-cost sit down meal.
Business Biscotti is similar, but operates mid morning (9.30 - 11.30) which to some would probably represent half a day out of the office. I struggle to be subjective since i walked into room full of - sorry, there's no other way to put this - infeasibly attractive women. (Something to do with the Guilldford effect); so should I seek a business advisor who can pass me leads, or the pretty lady from the dress shop? On a serious note, the room did balance out over time and did lead to good, informal networking - all for the price of a coffee!
Other lunch events I attended were sponsored and highly localised - Basepoint serviced offices run a good monthly event - with possibly the best canapes in the business; whilst a local firm of solicitors provide free food and wine in their Property Club (every 2 months). Whilst this is technically for property specialists, the fact that I offer finance to developers put me well within qualifying criteria.
Evening Events:
Unfortunately i had to cancel my invitation to the interestingly entitled Entrepreneur's Club, but will try it in February. Surrey Chambers also run a number of evening events, though I am unlikely to commit to regular evening events.
as mentioned, on my journey I was invited to several ad-hoc events. These, together with intermittent eduction type events where you will meet people outside of the usual 'netwrking crowd'.
From a well-intenttioned plan, it quickly became apparent that the networking pool really is very deep indeed - and I have succeeded only in scraping its surface; I still have a few testers to go, but have decided on my forward strategy, which is actually to embrace all of the daytime events listed above, whilst attending ad-hoc evening events. Breakfast clubs definitely have a use, but the costs, structure and formality don't work for me I'm afraid.
Hopefully I will be reporting positive results soon!
Thursday, 17 November 2011
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:
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!
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:
- Sit down and thrash out all of the details of your business arrangements.
- Commit them to a properly draw-up agreement.
- Get it legally ratified.
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!
Tuesday, 13 September 2011
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.
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.
Friday, 9 September 2011
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.
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.
Wednesday, 7 September 2011
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...
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...
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