Cathy Rhodes

The importance of shareholders agreeements

2010-09-04T00:49:00.000-07:00

An interesting article from growthbusiness.co.uk

Shareholders' agreements
Article Date: Sep 01 2010

Don't rely on handshakes alone

Taking the time to write a shareholders’ agreement may save you time, money and stress in the long term, says Catherine Feechan, a partner in the corporate department at law firm Brodies.

A client arrived in my office about six months ago. He explained that he had been made redundant, received a significant pay off, and was going to invest approximately £250,000 in a business that had recently been started by a friend of his. He was full of enthusiasm for the new project and keen to get things moving.

I suggested that a shareholders' agreement and a proper constitution for the company would be worthwhile given the size of his investment. However, I was met by the response that my client's new business partner was a 'top bloke, he had known him for years' and there was 'no need to waste money on needless legal documentation'. Fast forward six months and the same client is back in my office, the £250,000 he invested in the business is gone and his first words as he walks through the door are: 'You don’t even need to say it – I will do it for you. I told you so.'

Shareholders' agreements are one of the most important documents in any privately owned company. They provide the answer to all the "what if" questions and putting one in place at the outset of a business relationship is simple and relatively inexpensive. Sorting out the disputes that arise later is considerably more costly, time consuming and generally stressful.

The shareholders' agreement should address all the "what if" issues. For example:

• What if one of the shareholders dies, becomes too ill to work in the business or becomes bankrupt? The solution here is to provide that in those circumstances his shares will be offered to the other shareholders at a fair market value.

• What if one the shareholders wishes to sell his shares to a third party or to leave the business? In either of these cases again the shareholder should be required to offer his shares first to the other shareholders of the company at a fair value.

• What if one of the shareholders working in the business has failed to perform? If performance is going to be an issue then the agreement should provide that in specific circumstances he can be forced to sell the shares to the other shareholders at a price lower than the fair market value.

• What if an ex-shareholder wishes to set up in competition? The shareholders' agreement should contain a restrictive covenant preventing shareholders who sell their shares from setting up in competition to the business and specifically from poaching staff and customers.

• What if the directors do not agree on key business issues? The shareholders' agreement should contain a list of matters on which majority consent is required. Depending on the number of shareholders, a majority could be set at 50 per cent or any higher figure. Indeed there may be some issues on which the shareholders require to be unanimous before such an action can be taken. If agreement cannot be reached and there is a deadlock, the shareholders' agreement should set out what happens next – can one party buy out the others or should the company be wound up?

• What if one shareholder refuses to participate in meetings? The shareholders' agreement should set out all administrative provisions relating to the operation of the business such as how often board meetings will be held, how notice will be given and what happens if one party refuses to show up. In addition it should deal with other administrative matters such as who the company's bankers and advisers will be and who has authority to access company funds and sign contracts. It is important to make clear what level of input is required from each of the shareholders at the outset to be certain that everyone has the same expectations.

• What if the company makes money? Shareholders should agree whether it is intended that the company should retain profits for a period or whether they intend that any profits should be distributed and work out a timescale for any distributions.

Without an appropriate drafted shareholders' agreement and articles in place, any shareholder can:

• sell his shares to any third party – even to a competitor;

• on death pass his shares to a spouse or to family members, who know nothing about the company and could well cause problems in its day to day operation; and

• (if the shareholder is also a director) enter into contracts or commitments on behalf of the company without any recourse to the board which could spell financial ruin for the company and the other shareholders.

A proper shareholders' agreement regulates all these issues. So don’t leave things to chance, protect yourself, and ask "what if".

Better with age

2010-08-24T10:21:00.000-07:00

An interesting article from www.smallbusiness.co.uk

Aug 24 2010

Not so long ago a government report concluded that two-thirds of employers felt that 16-year old school leavers were well prepared for work. To my mind, that didn’t sound right. From personal experience I know that hiring graduates, let alone school leavers, can result in some pretty scary discoveries about missing skills.
Small business owners clearly have their reservations too when it comes to the skills and training gap. Our latest poll asked whether young people are trained adequately for the world of work and the overwhelming answer was ‘no’ (46 per cent). Of the 205 respondents, 19 per cent said that basic skills are lacking; 18 per cent had to invest in training and only 17 per cent were happy about the readiness of young people to go on the payroll.
If the soaring pass rates at GCSEs and A-Levels aren’t forging the right skills for the workplace, then perhaps employers should be looking at older workers. The default retirement age of 65, which is due to be abolished by October next year, will open another pool of workers for employers who can contribute some real value to a business through sharing their experience and knowledge.
In late 2006, the number of 55-64 year olds in the UK workforce outnumbered 16-24 year olds for the first time. I suspect that more people in their fifties are going to extend their ambition beyond working for someone else and will look to start their own business.
People like Simeone Salik, who is 68 and has big plans for her affordable, temporary blinds company, Blindsinabox. ‘All the media is interested in is keeping older people in work for other people, rather than for themselves. Older entrepreneurs should be encouraged as often they have less to lose in that they own their own homes and understand financial implications,’ she says.
Salik is a prime example of how the modern-day workforce is evolving – it's certainly a far cry from the notion of the gentle, cosy retirement of yesteryear. That said, it doesn’t address the skills gap among a younger generation and an education system that, from an employer’s perspective, has long rendered academic achievement virtually meaningless in many sectors.

Flotation: the pros and cons

2010-08-19T11:00:00.000-07:00

A useful article from growthbusiness.co.uk

Flotation: the pros and cons

Article Date: Aug 18 2010

Flotation isn't for everyone

Thinking about an initial public offering (IPO) on AIM or another market? Catherine Feechan, a partner at law firm Brodies, looks at the arguments for and against.

Whilst there are some signs of life on AIM, activity remains sluggish. Eight companies listed in the first quarter of 2010 raising approximately £200 million and ten in the second quarter raising £133 million.

However, the rate of delisting is slowing more markedly. A total of 73 companies left the market in the fourth quarter of 2009, followed by 44 in the first three months of this year and 36 in the second quarter.

There is no doubt that raising money on the somewhat fragile public markets remains challenging but there is clear evidence now that cash is available for the right companies. But before making any decision on whether an IPO is the way forward, directors should think carefully about the advantages and disadvantages of listing on AIM in relation to their business.

Reasons for listing

1. A successful IPO will provide cash for the company's development plans and a public quote should also allow the company quickly to raise more cash as and when required.

2. A listing allows the company to offer publicly tradeable shares instead of cash when making acquisitions. Sellers will not usually accept shares in private companies as an alternative to cash as they cannot easily be disposed of.

3. Going through the IPO process will raise the company's profile amongst the public, competitors, suppliers and customers, and can enhance its reputation.

4. Staff can be incentivised by giving them share options. This can encourage employees to improve performance as the share price directly impacts on them.

5. The IPO process is rigorous and extensive diligence is carried out to ensure a company is appropriate for listing on an AIM. Investors, suppliers and customers will be reassured that the company has proper procedures, controls and systems in place and will be actively managed.

The drawbacks

1. The IPO process is intensive and a significant amount of management time will be diverted from running the business into completing that process. Management teams routinely underestimate how much work is involved, both during the IPO process and thereafter on investor relations and compliance to ensure the company's continued success.

2. The cost of an AIM IPO and the ongoing cost of listing may be excessive if the company is not raising very much cash (this is one reason why many companies are delisting). In addition to the fees payable, listed companies must have effective corporate governance in place and the costs of risk management and legal compliance can be significant.

3. Once a company is listed many external factors can impact its share price, none of which is controlled by the board - ash clouds, bad weather, economic issues. The share price is no longer controlled by the company.

4. The company is required to disclose information regularly which will be reviewed and acted upon by the markets. In addition, the board will be required to take into account the views of the new shareholders and there is a higher degree of visibility for directors with much greater scrutiny of their decisions.

5. The risk of litigation against the company and/or its directors is greatly increased. Listed companies are perceived as having deep pockets therefore suppliers, customers, employees or shareholders with grievances are more likely to take legal action.

Companies need to think carefully about whether an AIM listing is right for them and whether they can achieve an acceptable valuation. The markets are open once again but there is a split between successful IPOs which are over-subscribed and those that have to reduce the share price or fail to raise sufficient cash. Investors remain cautious but hopefully the momentum gained by the main market will be reflected in an increasing number of IPOs on AIM later in the year.

Time to make an exit?

2010-07-31T07:43:00.000-07:00

Interesting article on mandadeals.co.uk

July 13 2010

With aggressive trade buyers on the prowl and private equity firms expanding their portfolios, there are ways to make sure you can sell your business for the right price.

While many experts will say that now is not the time to sell your business, there are entrepreneurs out there proving that good businesses still command healthy valuations regardless of the wider economy.

Mark Dickinson, MD of energy risk management company Encore, recently sold the business to McKinnon & Clarke for £6.25 million. ‘I founded the company with three other shareholders back in 2001,’ he says. ‘There was no outside capital and we’ve grown the business from there to sales of £4.5 million with profits of £1 million profit.’

The deal was necessary, says Dickinson, if Encore was to achieve the necessary scale. McKinnon & Clarke, which has 450 staff and offices in 13 countries, conducted a £22 million MBO at the tail end of last year that was backed by Lyceum Capital. This firepower gave Dickinson confidence as he felt the buyer had the support to undertake the consolidation that was needed to be a success in the sector. ‘The strategic fit between McKinnon & Clarke and Encore, backed with the vision and resources of Lyceum, present the best strategic opportunity in the marketplace,’ he says.

Adapted Vehicle Hire, which rents cars and vans to people with disabilities, was bought by Nexus Vehicle Rental in June. Jon Reynolds, one of the founders of AVH, says that an exit had been in mind since the company was set up in 2005. ‘We’d always looked at potentially selling within five years if we’d built the business up correctly. To be honest, it exceeded what we’d expected.’

Reynolds had already dealt with Nexus for a couple of years and he knew they would be interested if he ever considered selling. ‘We fitted their niche market and they felt we’d add something to their portfolio. That was around September 2009 and just before Christmas we gave them a call and said let’s get something going and see what you’re willing to offer.’

Part of the reason to sell stemmed from the financial pressures caused by the downturn. Reynolds says: ‘We felt that it was the right time for us because we tightened our belts last year during the recession the same as everybody else, and we felt that we were getting good value for money. Also, what [Nexus] said they planned to do with the business was along the same lines as our own; they can just do it a lot quicker because of the financial backing they have. Up to now, we had been funding growth all by ourselves.’

Brian Livingston, head of M&A at professional services firm Smith & Williamson, comments that the rules for achieving a respectable exit are the same today as they were in the heady dealmaking days of 2007. ‘The market is not necessarily about when you’re ready to exit; it’s about when someone is prepared to buy you. We say that most companies should be prepared for an exit so that they can respond properly at any point. If a big corporate decides it wants to act, quite often if you’re not ready to sell then it will move on and buy someone else.’

The uptick in deals is due in part to an increasing realism from vendors about the prices they can expect for their companies. Livingston says: ‘People are seeing that everything isn’t going to become wonderful in a year’s time. Vendors are accepting that £25 million for their business is enough for them personally and their families. Prices may be substantially lower than three years ago, but you can still get good valuations in 2010.’

Tim Jackson is finance director at HR and outsourcing company Staffline, which has completed six deals in the past year. He says there are two types of vendors: those who want to sell their business because the time is right, and those whom HMRC is ‘encouraging’ to do so because they owe the tax office money.

Although valuations have fallen, Jackson says the appetite to get a transaction done remains high. ‘The prices are different to what businesses would have sold for two to three years ago, but then we wouldn’t have paid those prices back then.’

Andrew Garside, a partner at ISIS Private Equity, makes a similar point. He states that the market poses an interesting dilemma for management teams: ‘If they have successfully traded through the recession, they may feel like extracting value from the progress they have made to date. However, at the same time, they might also be seeking some really interesting growth opportunities.’

A number of management teams, claims Garside, are opting for a partial exit. This is when a director sells shares to a third party to take cash out of the business for themselves, while also bringing in investment which can take the company forward. ‘Some management teams feel they either have to sell the business or stay with it; we say that you can do both.’

The main driver for M&A activity at present remains trade sales as consolidation continues apace. Still, there’s no denying that confidence among dealmakers is fragile: ‘It wouldn’t take much to knock deal flow one way or the other,’ admits Livingston. ‘Transactions are taking longer and due diligence is much more challenging than it used to be.’

Cable trumpets ‘intense discussion’ on finance

2010-07-30T11:12:00.000-07:00

Interesting article from smallbusiness.co.uk

Jul 27 2010

Business secretary Vince Cable and chancellor George Osborne have launched an ‘intense discussion’ on the issue of access to finance for small businesses.

Cable and Osborne outlined the terms of discourse in Financing a Private Sector Recovery, a paper which sets out the range of finance options for different sized businesses and explores where the market is failing to provide support and if there is a role for government intervention.

Cable says: ‘I’ve heard the problems businesses are facing in getting bank loans up and down the country. They need innovative ways to access finance from other sources to grow our firms and economy. That’s why this green paper* is so important as we look to help viable firms get the money they need.’

The paper explores every major finance option, including more use of equity and encouraging venture capital and business angels to invest in a wider range of businesses. In addition to this, the paper sets out options for the finance sector, such as an insolvency moratorium on companies restructuring their debt, increasing transparency in bank loan applications and fostering competition between banks and finance institutions.

Osborne says: ‘As the economy recovers, it is crucial to ensure that the supply of finance supports rather than constrains demand and business confidence. If businesses are to play their part in promoting economic recovery it is important that they are able to access a diverse range of finance choices in a stable macroeconomic environment.’

The paper also addresses existing government schemes, such as the much maligned Enterprise Finance Guarantee programme.

A survey by the British Bankers Association recently showed that banks lent just £900 million to small businesses in 2009, which represents less than a quarter of the average lending over the past five years.

For more information about the consultation, click here

*According to Wikipedia, a Green Paper – in the lexicon of politics – means: 'A tentative government report of a proposal without any commitment to action'

A great article on body language

2010-04-24T05:47:00.000-07:00

Click here

Thanks to Sarah for forwarding the link to me.

100+ Brilliant Ways To Motivate Staff In A Recession

2010-04-12T07:42:00.000-07:00

A great article from www.leadership-expert.co.uk

As times are getting harder, managers have been re-evaluating how they motivate their workforce. At Leadership Expert, we’ve put together this comphrehensive collection of motivation tips & tricks to help managers increase their employee’s productivity in this tough economic climate. Most of the tips don’t involve spending a penny, and the ones that do will create far more value than you spent, meaning they’re perfect to use during a recession.

One final point to make before we embark on this list, is that you should consider this a ’sweet shop’ of motivation tips, i.e. you should only pick a few and certainly not attempt to implement them all. There’s nothing worse than being sandblasted by motivational techniques.
Policy

1. One-on-One coaching - People appreciate learning directly from their senior on an individual basis. It helps them remember what they learn, and ask any questions they wish to help form a deep understanding of their work.

2. Training - In general, training is one of the most empowering tools a company can offer it’s employees. Subsquently all large companies invest heavily in training and enjoy the long term payoff.

3. Clear Career Path – Staff are better motivated when they can see where they should be in 3 years time if they work hard. The more barriers between them and promotion that cannot be solved by hard work will only demotivate.

4. Safe Work Environment – Maslow theorised that safety is one of the fundemental pillars of motivation, and that a safe work environment is necessary for all other motivating factors (such as self esteem) to start having a positive effect.

5. Executive Recognition - A congratulatory conference call from the CEO or visit from the finance director will do well to swell the chests of your workforce with pride and admiration for their work.

6. Time off - Motivated employees will not gladly take time off, however a generous time-off system needs to be in place to create motivated employees. Staff are likely to work harder and longer with the safety and knowledge that should they need time off due to stress, they could take it.

7. Encourage employees to praise good work of their fellow colleagues – Build a feedback procedure whereby collegues regularly pass comment on each others work, or team mates share their opinions after completing a major task. Feedback such as this helps reduce infighting and will give many people tips on how to improve their work.

8. Be sympathetic to personal problems – Offer generous time off for those who suffer bereavement. In most cases it won’t be taken, but the gesture will improve relations between managers and staff.

9. Keep your door open – An open office encourages the open share of ideas. You want to remove any barriers to communication, and a closed door certainly constitutes a barrier.

10. Allow flexible working hours - Allowing employees to manage their own time so they can participate in outside work-related activities won’t make their hours shorter. Employees who would take time off to see their child’s sports day will likely ‘pay back’ the favour by working longer hours afterwards.

11. Have annual or quarterly reviews – These are where an employee goes through some targets and review points with another member of staff who is not directly above them, and is more of a guidance counsellor than a boss.This will allow them to discuss important long term career topics that will feed their desire to work.

12. Let your employees choose their own lunch break- Unless your company happens to be a food outlet, it really doesn’t matter whether your employee takes their lunch at 11:30 or 2pm, so don’t attempt to force them to stick to a routine.

13. Forward information to staff after management meetings - A quick debriefing will increase their sense of involvement.

14. Rotate job roles – More appropriate for manufaturing, the rotation of job roles has been proven many times to increase employee productivity, despite the decrease in specialisation. This technique can be applied to any low to medium skilled jobs with a powerful effect. Multi-skilled workers also make life easier for your HR department.

15. Provide quarterly updates on relevant business and customer issues – many members of staff aspire to be senior management in the future, and will thrive on being kept in the loop when it comes to high-level business infomation.

16. Give an incentive to get employees to work earlier in the morning - I’ve learnt from experience that if a salary-based employee gets to work an hour earlier, it is likely they will work until their usual finishing time.

17. Support charity work within the company – Donate 1 or 2 days of charity work per year to good causes. This will help your business get into the local media and make staff feel like they’re a part of a responsible company.

18. Address the environment issue – While we’re on the subject of responsibility, it’s worth noting that employees prefer working for a company with green credentials, so setting a carbon reduction/ energy efficiency/ recycling intiative will help enthuse the workforce.

19. Give your employees choice over their uniform – Often a business casual work dress code makes employees feel more independent than full suit and tie – which is often not necessary in an office environment.

20. Obey confidentiality – A manager who pretends to care about his employees but simply laughs and bitches about them behind their back will loose all respect and credibility extremely quickly.
Freebies

21. Offer stress management/counselling services – These services are easy to outsource and admitedly are very rarely used. But the availability of such a service increases moral without costing you a penny.

22. Use gimmicks - Give out novetly ‘trophy’ style items for exceptional work. For example, give a LP record for an employee breaking a record.

23. Bring in sweets to share out on random days – This is a cheap technique that will improve the relationship between management and the workforce.

24. Give out tickets to cultured events such as theatres and music shows.

25. Send a company T-shirt or hat to the employee’s child(ren).

26. Walk around with free lunch coupons - Hand out on the spot.

27. Give workers a surprise for their work area - A desk organizer, a picture or poster, a new mouse pad even. Any new gift will be an interesting novelty.

28. Give a subscription to a work-related periodical - This is an interesting gift that shows your commitment to their professional development.

29. Buy lottery tickets or scratch cards for people on an irregular basis.

30. Hand out classic self help literature and excellant leadership books – Hand these out to entire departments at a time, or they may feel that you’re indirectly critisising them. Success literature can really inspire employees to work harder – but be wary of the core message of the book. Many of these books encourage workers to quit their 9-5 jobs.
Behaviour

31. Give recognition – Every worker wishes wants to be ‘known’ by those above them, so talk about your workers to your managing collegues and ensure that none of your subordinates go un-noticed.

32. Give Attention – To be distinguished from recognition. Recognition is the long term awareness that boosts self esteem, whereas attention is a short term devotion of time that will keep employees on task and able to voice concerns as early as possible.

33. Applause - Because sometimes words just aren’t enough.

34. Always carry a smile – I once knew a senior manager who famously was never seen with a negative expression on his face. This sort of reputation really inspired subordinates such as myself, and completely stands again the cynicism and sarcasm that exist in workplaces across the country.

35. ‘Manage by wandering around’ – Rather than calling employees to your office, go and visit them yourself. This is a sign of respect and reduces the interuptive impact you have on your team.

36. Listening to employee efficiency suggestions – And more importantly you should be acting on as many as possible, even the petty suggestions. This way you build up credibility in the system, leading to more important, significant proposals to be put forward in the future.

37. Lead by example and follow through with what you say. Just as following through with suggestion box comments you build credibility in the system, if you follow through with your own promises, you build credibility in the system of management as a whole.

38. Ask! - Ask the employees what they want from you.

39. Listen! – Listen to what employees have to say about YOU and what you can personally improve upon.

40. Add a personal touch by going out of your way to inconvenience yourself to please a member of staff. Just the occasional gesture in a busy period can be enough to remove that employees doubt over whether you have their best interests at heart.

41. Understand employee behaviour - Often a negative attitiude or behaviour is a direct response to bad controls/procedures that you can correct or change.

42. Write thankyou notes fairly regularly – These notes only take a second, and will float around for a long time, making the employee feel proud.

43. Actively make a point to speak to every member of staff each day. This doesn’t need to be a major catch up, but just enough so that you’re maintaining a good working relationship, and they would feel comfortable in coming to you when they’re struggling.

44. Ask employees “What can I do to help you with your job?”. You may surprised at the responses and ideas you get in return. A little help like this can sometimes be more effect than formal leadership coaching or leadership training.

45. Get your hands dirty with your staff - Learn about the good and bad aspects of their day to day work. Only through understanding what their day actually entails will you be able to see what would motivate and enthuse this person to work more effectively.

46. Show the courage to let your employees learn from their mistakes - Don’t jump on their error and shout at them, as they will already feel embarassed enough. Managers often destroy many hours of work building up trust and enthusiasm by loosing control and shouting at workers when things go badly. Nothing destroys intrinsic motivation quite as quickly as raving tyrant.

47. Show great confidence in relying on subordinates expertise in areas that you have none – Trusting in the skills of others is a sign of a great leader. It will improve the confidence of others as well as take some weight and responsibility off your shoulders.

48. Stand behind your employees and back their decisions - Similar to relying on a subordinates’ expertise, this will improve their view of their own skills, and benefit you in the long run.

49. If you have many employees with the same job title, give them a list of the tasks that need doing and let them divide the work up among themselves. It reduces the feeling of ‘meddling manegement’ and allows for more efficient work allocation - as people are more likely to take on jobs that they’re personally good at.

50. Don’t be a pushover - While nearly every employee would love to have a soft manager, they would also admit that it is because they would do less work. Be clear with orders and don’t allow yourself to be fobbed off with excuses.
Financial Incentives

51. Arrange discounts for them at local stores to increase loyalty

52. Offer rewards for great ideas. If it saves money or brings in business, give the employee a percentage of the savings or profit. – entreprenial atttiude.

53. Send $10, $25 or more to a spouse with a thank-you note for his or her support during the employee’s overtime.

54. Pay an employees rent for a month - This will take the weight of their shoulders more than a simple cheque would. Give your employee piece of mind.

55. Pay for the tutoring of an employee’s child - This is a generous ‘donation’ that will really help establish true loyalty and admiration for the company.

56. Give employees who recruit new workers a cash bonus.

57. Sponsor membership in a professional group for your employee.

58. Surprise your staff with a new challenege out of the blue – Give your employees 2 weeks to increase their sales by 15% for a 5% salary bonus reward and watch how they suddenly start looking at their work in a whole different way.

59. Move your staff onto more heavy commission based salaries – This brings employees personal goals in line with those of a sales department. A word of warning – make sure the variable upon which the commission is based is what you truely want. Because staff will often chase that commission at the expense of others goals such as customer satisfaction and quality of service.

60. Give out gift vouchers as a way of rewarding individuals for a good job on a specific task – Amounts of £50 are respectable but won’t break the bank. You can reserve these for when staff members have demonstrated working by company’s values, or have shown hard work.

61. Give generous staff discounts on products - This is a rather standard perk in the modern day, but its effect on employee morale must not be forgotten.
Activities

62. Pizza/Popcorn/Cookie Days - These really put a smile on alot of employees faces. Just hope that few people are on strict diets at the time!

63. External Seminars - These can be attended by individuals, teams or whole departments if they’r relevant. Trips to seminars, events and conferences can be a welcome break from work for staff, while actually still building their skills and adding value to the company.

64. Dress-down Days – Again, another motivational tool that has become a standard in all companies large and small. And why are they popular? Because it really does improve morale!

65. Leadership Teasers - Give employees a glimpse at what it is like to run a team, lead a division or speak in public. These positive ‘taster’ leadership sessions will really get them hooked onto their career track and really kick start leadership development.

66. Share letters of praise from customers with the member(s) of staff involved - A kind word from a customer not only gives effective feedback on the service at your organisation, but it also warms the hearts and motivates the staff who read the mark of appreciation. These are so effective that I would suggest you contact customers to ask for feedback.

67. Have a family day - Perhaps on the last day before a public holiday, you could arrange for staff to bring their children to work. As well as lightening the atmosphere of the workplace, it also helps create harmony and understanding between workers, as they come to understand more about each other and what they’re like as a family person.

68. Go to lunch with each one of your employees on a quarterly basis – Ask the question, “What do we need to do to keep you with us?”

69. Invite employees to your home for a special event - This gives you the opportunity to recognise them in front of their spouses and co-workers. Obviously only suitable for small businesses or departments, this activity is a rare but powerful one.

70. Let them attend a meeting in your place – As well as giving temporary empowerment to your staff, letting them sit in or replace you in a meeting also will increase their understanding of what pressures you are under and what you need from them.

71. Let them “sit-in” with an upper level person for part of a day – Similar to the leadership taster, this shadowing of senior management is more appropriate for junior members of staff. Middle management may feel uneasy about taking a perceived ’step back’ into the activity of shadowing.

72. Involve them in a special project that allows for company exposure and visibility. Such as being written about in the news. All too often – these sorts of tasks are handled by only a couple of individuals who become desensitised to the novelty of being publically recognised. By rotating these sort of tasks round a larger number of employees, you are efficiently maximising the motivation gained from such a job position.

73. Let your employees craft the mission statement – More and more managers are discovering how effective this is as a motivational tool. It’s most powerful when absolutely every employee contributes torwards it’s creation. Without proper employee involvement – mission statements are simply empty rhetorical ‘wish lists’ of values and objectives put forward by the CEO.

74. Minature golf and other fun indoor activities - Fun golf courses, bowling alleys, Scalextric tacks and casino tables can be affordably hired in a recession as businesses cut back on novelty client entertainment and expenses. You can use this to your advantage by hiring such fun equipment to become the centrepiece of a project-end event. Having something fun to look forward to at the end of each major project will have a motivational effect.

75. Team building days out – In a similar fashion, outdoor activity courses and events can also be used to keep your staff happy and promote good team leadership.

76. Hand out awards - Prizes for awards such as ‘best team player’, ‘best attitude’ etc should be also accompanied by humourous ‘caffeine addict’, ‘chief photocopier person’ and other quirky awards.

77. Run short term target-based competitions between staff for freebies or bonuses. But ensure a level playing field or you’ll only create frustration and conflict!

78. Take your employees to the cinema. Cinemas offer cheap corporate deals and will cater well for your employees. Picking the right film is tricky though!

79. Promote the creation of company sports teams – These will help build ties across departments. Encourage recruitment from all areas, rather than simply being teams of cliques.
Other

80. Develop a Wall of Fame to share letters of praise and similar with everyone in the office – Put it near the photocopier for maximum exposure.

81. Create personalised rewards – everyone values different types of rewards more than others. Some workers prefer time off, others prefer cash, so ask people which they’d prefer before setting up any bonus or reward scheme.

82. Additional Responsibility – While you may grimace at the idea of being given ‘another’ batch of responsibility, a more junior member of staff may actually jump at the thought. Start leadership programmes that give subordinates that opportunity at stepping up.

83. When pay cheques are sent out, always write a note on the envelope recognizing an employee’s accomplishment(s).

84. Try to remove all the cynical and sarcastic posters & slogans from around the office. They provide a cheap giggle but demoralise staff. A quick example of short term benefit, long term pain.

85. Remember birthdays with a simple birthday card, mini cake or gift.

86. Take out an advertisement in a local paper and include your star employees’ names and pictures in the feature.

87. Speak truthfully and transparently – All employees have a good skill at knowing when they’re being lied to, so don’t even attempt to pull the wool over their eyes. Learn from Obama – he didn’t try to tell America that the economic was just a ‘little’ bit under-the-weather; he told it how it was. Rather than trying to cover up the failings in a company, instead emphasise how you are going to solve it, and employees will reward you with hard work.

88. Increase your employees span of control – this decreases costs and motivates them if they’re the type that crave control and authority.

89. Remind people of what drives them to do what they do. Allow pictures of family and other such drivers to be strewn around the office, and talk to them about their family, their dreams for the future and desires. You can use their dreams to motivate them easily.

90. Pin up genuine motivational posters etc around the office. These motivational quotes really do inspire some people.

91. Get your employees to replace their default screen saver with a playful ‘Get off your butt and back to work’ message that they’ve typed themselves.

92. Let employees give new recruits on-the-job training - It’ll show them how much they’ve grown as an employee in your company and leave them feeling senior and skilled.

93. Make sure you know everyones name in the office - whether they’re in your span of control or not.

94. Ensure free coffee is available. Caffeine or hot chocolate will always help!

95. Have a bowl of fresh fruit for employees to snack on – The women especially will appreciate this nice gesture, yet it only costs a tiny amount per day.

96. Make sure the service staff (cleaners, janitor, receptionist) greet staff throughout the day, rather than simply trying to be invisible.

97. Play the occasional tasteful practical joke

98. Invite in a motivational speaker to talk to your staff - These speakers often charge high fees however, so ensure that their key messages concern long lasting motivation rather than a ‘fad-like’ short term buzz that will fade as the speaker slips from memory.

99. Give your team a cool team name - Admittedly easier said than done.

100. Ensure that all members of staff feel that they are the best at at least one task - This will give them a ‘place’ in the organisation and make them feel important.

101. Finally - Share this blog post with other managers in your organisation!

Checklists

2010-02-04T10:26:00.000-08:00

A great article recently published in the FT about the advantage of using checklists. In the words of Mike Basch:

"Systematise the routine, humanise the exceptions."

I hope you enjoy it.

Encouraging news

2010-01-28T02:32:00.000-08:00

Clock ticks for PE funds
By James Harris on January 21 2010, M&A Deals.co.uk

Private equity firms are under pressure to invest, according to research by accountancy firm Grant Thornton.

A study of 100 private equity executives has found that the majority of respondents (80 per cent) indicated that they needed to invest at least 25 per cent of their latest fund, while 27 per cent said that they had to invest more than three quarters of their fund.

Mo Merali, head of private equity at Grant Thornton, says: 'Private equity sponsors are very keen to complete new deals as they need to invest the majority of their existing funds before they can raise any new funds and there have been few attractive assets on the market lately.'

The research indicated that 71 per cent of respondents expected to see an increase in the volume of new investments over the coming 12 months, while 4 per cent anticipate a decrease in activity.

The uptick in investment activity coincides with a perceived improvement in debt markets. Just over half (51 per cent) said that difficulty in raising debt would be an obstacle to dealmaking, compared with 81 per cent blaming unrealistic vendor pricing and 66 per cent pointing the finger at the lack of quality businesses for investment.

Most respondents (81 per cent) intended to invest in buy-outs, while 58 per cent also expected to take minority stakes in businesses, and 27 per cent said that they would invest in distressed assets.

'There are a number of reasons why it is unlikely that many buyout firms will shift their focus to taking minority stakes in so-called expansion deals – many buyout funds have not got the skill set for growth capital, while others manage funds that have terms and conditions which would not permit them to focus on investing in minority stakes,' says Merali.

The research also shows that there is a noticeable shift in attitudes. In the last quarter of 2009, two thirds (66 per cent) of respondents said that they expected some of their portfolio companies to breach loan covenants. In the third quarter, 81 per cent expected some of their companies to breach conditions in their loan agreements.

Secrets of the World Class: Which are You?

2009-09-30T10:50:00.000-07:00

Excerpt from : Secrets of the World Class
By Steve Siebold

• The Middle Class competes...the World Class creates.
• The Middle Class avoids risk...the World Class manages risk.
• The Middle Class loves to be comfortable... The World Class is comfortable being uncomfortable.
• The Middle Class hungers for security...The World Class doesn't believe security exists.
• The Middle Class sacrifices growth for safety... The World Class sacrifices safety for growth.
• The Middle Class focuses on having...The World Class focuses on being.
• The Middle Class has a lottery mentality... The World Class has an abundance mentality.
• The Middle Class slows down...The World Class calms down.
• The Middle Class is frustrated...The World Class is grateful.
• The Middle Class operates out of fear and scarcity...The World Class operates from love and abundance.
• The Middle Class has pipedreams...The World Class has vision.
• The Middle Class denies its intuition...The World Class embraces its intuition.
• The Middle Class trades time for money...The World Class trades ideas for money.
• The Middle Class is problem oriented...The World Class is solution oriented.
• The Middle Class sees itself as a victim....The World Class sees itself as responsible.
• The Middle Class thinks it knows enough...The World Class is eager to learn.
• The Middle Class chooses fear...The World Class chooses growth.
• The Middle Class is boastful...The World Class is humble.
• The Middle Class seeks riches...The World Class seeks wealth.
• The Middle Class believes its vision only when it sees it...The World Class knows it will see its vision when it believes it.

Need to inspire your team?

2009-09-30T10:20:00.001-07:00

See this

Coaching used by almost 90% of organisations, CIPD reports

2009-09-30T10:10:00.000-07:00

Recent article on Personneltoday.com

By John Charlton, 16 September 2009 15:00

Research to be launched at the upcoming CIPD Coaching at Work conference has found that almost 90% of organisations polled use coaching.

The Chartered Institute of Personnel and Development (CIPD) says more than 500 companies were surveyed for the Taking the Temperature of Coaching report, which found that 51% of them see coaching as a key part of learning and development and consider it 'crucial to their strategy'.

According to the survey, coaching is being used at all levels to build on good performance (23%) and improve poor performance (20%), and also in leadership development (23%).

"It is not surprising that so many are turning to coaching and mentoring to improve performance," says Dr John McGurk, CIPD adviser, Learning and Talent. "When budgets are tightened, it's a relatively inexpensive way to develop staff, and it also has the benefit of being tailored to an organisation's specific needs. As well as this, coaching has great scope to improve employee engagement, empower people and boost morale at a time of great uncertainty.

"At the conference, we'll look at how those using coaching and mentoring can make sure that they really reap the benefits throughout the organisation.

"It's vital that coaching's impact is measurable and tightly aligned with the business agenda, as well as helping individuals to develop. Otherwise, it runs the risk of being seen as something which only takes place in the executive suite."

The CIPD coaching conference takes place on 24 September 2009 in London.

Meanwhile, CIPD research among 100 HR professionals - backed by evidence from its quarterly employment outlook - indicated that transferable and flexible skills are the number one attribute sought by employers.

It claimed that evidence from both pieces of research showed that these skills were the most marketable in the current jobs market, cited as such by 45% of HR professionals polled and 47% of employment outlook respondents.

So, the Tax people do have a sense of humour

2009-09-02T10:27:00.000-07:00

Picked up by my colleague, Giles Brindley, this is superb:

This is a reply received from HM Revenue and Customs. The Guardian had to ask for permission to print it.

Dear Mr ,

I am writing to you to express our thanks for your more than prompt reply to our latest communication, and also to answer some of the points you raise. I will address them, as ever, in order.

Firstly, I must take issue with your description of our last as a "begging letter". It might perhaps more properly be referred to as a "tax demand". This is how we at the Inland Revenue have always, for reasons of accuracy, traditionally referred to such documents.

Secondly, your frustration at our adding to the "endless stream of crapulent whining and panhandling vomited daily through the letterbox on to the doormat" has been noted. However, whilst I have naturally not seen the other letters to which you refer I would cautiously suggest that their being from "pauper councils, Lombardy pirate banking houses and pissant gas-mongerers" might indicate that your decision to "file them next to the toilet in case of emergencies" is at best a little ill-advised. In common with my own organisation, it is unlikely that the senders of these letters do see you as a "lackwit bumpkin" or, come to that, a "sodding charity". More likely they see you as a citizen of Great Britain, with a responsibility to contribute to the upkeep of the nation as a whole.

Which brings me to my next point. Whilst there may be some spirit of truth in your assertion that the taxes you pay "go to shore up the canker-blighted, toppling folly that is the Public Services", a moment's rudimentary calculation ought to disabuse you of the notion that the government in any way expects you to "stump up for the whole damned party" yourself. The estimates you provide for the Chancellor's disbursement of the funds levied by taxation, whilst colourful, are, in fairness, a little off the mark. Less than you seem to imagine is pent on "junkets for Bunterish lickspittles" and "dancing whores"
whilst far more than you have accounted for is allocated to, for example, "that box-ticking facade of a university system."

A couple of technical points arising from direct queries:

1. The reason we don't simply write "Muggins"on the envelope has to do with the vagaries of the postal system;

2. You can rest assured that "sucking the very marrow of those with nothing else to give" has never been considered as a practice because even if the Personal Allowance didn't render it irrelevant, the sheer medical logistics involved would make it financially unviable.

I trust this has helped. In the meantime, whilst I would not in any way wish to influence your decision one way or the other, I ought to point out that even if you did choose to "give the whole foul jamboree up and go and live in India" you would still owe us the money.

Please send it to us by Friday.

Yours sincerely,

H J Lee

Customer Relations

HM Revenue and Customs

Discipline is key to success

2009-08-24T09:46:00.000-07:00

..put very neatly by Thomas Huxley many years ago. He said,

"Do what you should do, when you should do it, whether you feel like it or not."

Due diligence in the downturn

2009-08-19T01:30:00.000-07:00

An interesting article by James Harris, published yesterday on www.mandadeals.co.uk

There is more emphasis on due diligence than ever before. It's also more difficult, reports James Harris

An unforgiving market means dealmakers are being more vigilant. 'It's a product of the economy,' says Alistair Mackie, partner at law firm Holman Fenwick Willan: 'People are expecting the sky to fall on transactions, so due diligence is much more important.'

This has led to some changes. Mo Merali, head of private equity at Grant Thornton, says: 'In the last two or three years, sadly, we've seen a preponderance of vendor due diligence (VDD), which is slightly contradictory. If you're writing a report about a business and being paid by that business, surely there must be doubts as to the report's veracity. Thankfully VDD is much less prevalent now.'

It is not just the balance sheet that is subject to greater scrutiny. According to Merlyn Gregory, manager of diligence services at Calash, all aspects of the business are now being held to a harsher light.

Says Gregory: 'In the past, commercial due diligence was seen as an ancillary service and often had little relevance to whether the deal would go through. It's no longer a matter of conducting a bit of market research; we're expected to look at everything from operations to strategy and people are seeing real value in it. It's not just because times have changed, but because commercial due diligence is a more established market.'

In essence, the change means that the right questions now get asked: 'After we uncover an issue, the price is renegotiated, and this is happening several times, so deals are becoming longer and longer. As things pick up, I don't think people will look at the smallest details as much.'

How much?

Owing to the increasingly difficult environment, assessing value has become a minefield.

Intangible assets, such as human capital and goodwill, have proved particularly difficult to assess. Mackie says: 'People have had to challenge assumptions about businesses' goodwill. Forward sales are difficult to predict; you can't make assumptions about growth any more. Every part of the business is being stress-tested.'

Pension fund investments have also been hard hit. 'Pension funds have taken a real knock on stock markets,' says Mackie, and it might be hard to know how much value has dropped if actuarial information has not been updated.

For the international business, foreign currency conversions are also problematic. As the sterling continues to fluctuate wildly, businesses with European or American creditors may find themselves owing that much more, and as Mackie points out: 'British businesses will find everything more expensive, especially in Europe.'

Merali advises businesses to keep it simple: 'The key focus should be on the cash generation side of the business. It's all about actual earnings; it's hard to trust anything else.'

Price: Quotes to make you think

2009-07-28T09:02:00.000-07:00

"It is unwise to pay too little. When you pay too much, you lose a little money; that is all. When you pay too little you sometimes lose everything,because the thing you bought was incapable of doing the thing you bought it to do.

The common law of business balance prohibits paying a little and getting a lot. It cannot be done.

If you deal with the lowest bidder, it is well to add something for the risk you run and if you do that, you will have enough to pay for something better.

There is hardly anything in the world that someone can’t make a little worse and sell a little cheaper – and people who consider price alone are this man’s lawful prey”.

- John Ruskin

"The price of anything is the amount of life you exchange for it."

- Henry Thoreau

Peter Jones's view on the current climate

2009-07-03T13:09:00.000-07:00

A new article on www.smallbusiness.co.uk by Peter Jones, which I thought would interest you:

‘We are out of the recession,’ says Jones
Jun 30 2009
'We are out of the recession,' says Dragons' Den star Peter Jones
Serial entrepreneur and Dragons’ Den investor Peter Jones believes UK businesses have seen the worst of the economic crash.
‘We are out of the recession,’ said Jones. ‘People will say we remain in a recession over the next 12 to 18 months but what we will be seeing from now on are just the consequences of hitting the bottom of the recession.’
Speaking at the BT Business Experience 2009 event in London, the Dragons’ Den star argued that if there was a better sense of entrepreneurship in the UK, then the recession would be ‘a lot more shallow’.
‘We lack the mindset of entrepreneurialism in this country. It requires forward thinking, clarity and self-belief and these need to be encouraged,’ he said.
By way of contrast, Jones noted that the US has a deeply-rooted culture of risk-taking. ‘We need more of that entrepreneurial attitude in this country and that can only happen through education,’ he said.
Jones has seen an unprecedented level of interest from young people in starting their own business, but he suggests many of them shy away from putting their ideas into action because the business skills of entrepreneurship are not taught in schools.
‘It’s all about education and that is why I set up the National Enterprise Academy,’ added the Dragon.
The Academy was set up last year and helps 16 to 18 years olds to study enterprise and entrepreneurship.

Reading to get you thinking

2009-06-24T08:01:00.000-07:00

An interesting article on the perils of setting out in business.

The article appears to be based upon Michale Gerber's EMyth, a must read for all small business owners.

Hope this inspires too

2009-06-16T11:16:00.000-07:00

“The best day of your life is the one on which you decide your life is your own. No apologies or excuses. No one to lean on, rely on, or blame. The gift is yours - it is an amazing journey - and you alone are responsible for the quality of it. This is the day your life really begins.”

- Bob Moawad

I hope this inspires

2009-06-16T10:55:00.001-07:00

“Making your mark on the world is hard. If it were easy, everybody would do it. But it's not. It takes patience, it takes commitment, and it comes with plenty of failure along the way. The real test is not whether you avoid this failure, because you won't. It's whether you let it harden or shame you into inaction, or whether you learn from it; whether you choose to persevere.”

- Barack Obama

Calls to bolster EIS

2009-05-25T04:08:00.000-07:00

A recent article from www.growthbusiness.co.uk. An initiative that might just help to revive the economy. Unlike many others the government is pursuing...

Is irreverence your thing? A great new newsletter from my colleague

2009-05-21T11:59:00.000-07:00

Please see below a new regular missive (I daren't call it a newsletter!) from my colleague, Dave. Drop him a line if you would like to subscribe; I have!

Too many newsletters?
If you, like me, are brassed off with receiving dozens of platitudinous e-mail newsletters telling you how to run your business better, well here’s another one to fulminate about. Or not. Because I’m rather hoping to act as the antidote to such irritants with The Bugle. Think of it as a “Get it off your chest” item. And I’d welcome feedback: more than happy to incorporate your own gripes and pet hates in future editions. I promise not to send them too often either. Except in the unlikely event of popular request.
The Antidote
Every day, my inbox contains at least one new e-mail newsletter designed to persuade me what a credible operator and genuine help the sender is.

I’ve been collecting a few gems from the plethora of the last month or two, just to labour the point:

50% of small business owners are cautious about employing young women. (No… I wonder why).

Consumers are still buying during the recession but they are ‘buying differently’. (Well beat me over the head with a wet fish, who’d have thought it).

Late payment and bad debt are the scourge of business. (No suggestion as to what to actually do about it though).

Monitoring what your competitors are doing is essential for businesses as they grow. (Who’d have thought it?)

Oh and here’s my favourite, from BT: React to your customers. Fast. (If at all; someone with an advanced degree in irony must be working for them)

Now frankly, if you need and/or welcome advice like this, you deserve to go to the wall, recession or no recession. And if you’ve got the time to read this guff, you could do with investing in a time management course, for starters.

So what is the point of this one, you may be asking (assuming, quite possibly wrongly, that you’re still with me)? Well I thought it was about time that someone started a forum to get off their chest all the nonsense, platitudes and laziness that passes for business advice.

Irreverent
Think of it as The Daily Mash of the business world, but not quite as rude or offensive. (Never heard of The Daily Mash? www.thedailymash.co.uk) And with at least one piece of blindingly obvious perception per issue.

So what’s today’s magic message? Just this: businesses which are well run thrive in any business environment. All this talk of credit crunch and recession is a complete blind. The businesses that go down are, on the whole (and there are always exceptions to any rule), those that were going down in any event – they just go a bit faster when times are tough. Woolworth’s? MFI? Basket cases for years. Right now, half of all businesses are having a better year than last year. You don’t read that in the papers because good news sells nowt in Fleet Street. Sort out your own systems and processes, for every department, and you’ll likely be one of them.

Cash flow an issue? Don’t complain about the banks or the government: go collect it yourself. If it’s your biggest problem, put your best operator on the case.

Not enough sales? What are you actually doing about it? Many small businesses do not have any dedicated sales resource and rely on the phone continuing to ring ‘like it always has.’ In a court of law, it’s called recklessness.

Team morale low? Look in the mirror: most office environments, in whatever size of business, are a direct reflection of the owner/manager’s personality and management style.

If you run a tight ship and keep doing the right things, the business will thrive. If you’re not sure whether you’re doing all the right things, ask an expert (that would be me, then). Or just write to get your own pet hate(s) off your chest. I’ll publish them if they’re not too offensive. And maybe even if they are.

No advisor (including me) is a universal panacea for all problems and issues. As you can tell, while I can do diplomacy, it is not on the whole my long suit. If you’d like a conversation based on mutual respect, honesty and straight talking and are not afraid of hearing some uncomfortable truths, give me a call. Otherwise, just write and complain. Any reaction’s better than none. Probably.
David Croydon: 01844 238692 or e-mail dave@hilltopconsultancy.co.uk.

Still trying to do it all yourself?

2009-05-15T09:50:00.000-07:00

Here is a great article about why you really shouldn't and what you really can do about it.

Hope you enjoy it.

Have a great weekend!

The key to success

2009-05-01T00:31:00.000-07:00

Do what you should do, when you should do it, whether you feel like it or not.

Thomas Huxley

How to cultivate gravitas

2009-04-27T10:53:00.000-07:00

Please find below an article by my friend and colleague Sarah McCloughry - very powerful stuff:

Gravitas
A dictionary definition of gravitas is “a serious and solemn attitude or way of behaving”. To the ancient Roman republic, it meant dignity, seriousness and duty, one of the several virtues expected of men to possess.. However, currently in my view, it’s not about taking oneself seriously - it’s about taking what one does seriously.

Why bother to cultivate it?
In order to convince someone in business to buy from you and especially promote your interests, the decision maker is likely to need to know, like and trust you. Cultivating gravitas is a compelling business strategy for establishing credibility, respect and trust. Ultimately this leads to increased profile for you and business for your company.

1. Appearance
Take care to look the part. An interesting study revealed that if a vet dressed ‘down’, they were rated as low in effectiveness. However if they dressed in a white coat and wore a stethoscope (however superfluous), they were rated as highly effective! Go to expensive hairdressers to get the best advice on how your hair should look. Go to an image consultant to match your colouring, your style and the context of the clothes you are wearing. Go to the gym. Buy expensive shoes and keep them polished – people DO notice. Make sure your nails are carefully manicured. Make your appearance looks better than expectation to make an impact.

2. Occupy your space
Imagine the 18” the British traditionally claim around the body. To increase a sense of ‘presence’ when you walk into a room, increase the space around you to include the room and enfold everyone in it. To create energy within you, imagine that you have a secret that no one else knows and go into the room thinking this. On entering the room, pause in the doorway and look round. Then move forward towards a group where the body language suggests they are open to others joining them. Even when you think that people are turned away from you, their peripheral vision will catch your entrance and make assumptions about what to make of you.

3. Value your words
Be sparing and measured in your speech and make every word count. People with presence say relatively little. Though everything they say
counts – valuing quality over quantity. You have no need to raise your voice – in fact, you will have people leaning forward to catch your words if you speak firmly yet quietly. And according to research, for men, the female voice is more complex and more difficult to hear and understand
and women’s higher pitch can be interpreted as subordinate. So for women to gain authority in the workplace, they need to deepen their vocal delivery and make it more deliberate.

Hold the silence
Before you speak, hold the pause to ensure others’ attention. When you have finished speaking, stop talking. You communicate very powerfully by your silence.

4. Set the mood
Before you enter the room, focus on and imagine how you want everyone in the room to feel. People are only too willing to be guided by you so set the tone and mood. You will gain the influence to set the agenda for the rest of the meeting.

5. Act ‘powerfully’
Imagine a triangle. Put in a horizontal line near the apex denoting the top 7%. That is the amount of conscious awareness people have of what you say. However, the 93% below the line is the unconscious mind absorbing your body language and vocal delivery that will determine how they really see you. Make sure your unconscious signals are powerful: your movements and delivery deliberate and you use the major key in your voice to convey certainty.

6. Feeling disempowered?
In a situation where you are likely to feel unsure or lacking in knowledge –and especially if you are talking with someone who is an expert, change the role that you are playing. Ask searching and challenging questions to keep them thinking or give incisive summaries of what you have heard to make it clear you are still powerfully attentive. If you get interrupted when speaking, look irritated and immediately cut in to repeat what you were saying. And ladies, cut down on smiling. It can be seen as placatory and
submissive. Make your smile the reward.

7. Give your undivided attention
Give eye contact and quieten the internal chatter. Make space to absorb what’s being said and especially HOW it’s communicated. Become consciously aware of the subtext of body language and vocal tone. It will give you a lot of information as to how you want to respond. Then make your response deliberate and targeted.

8. Note taking
Expect to take notes - you are valuing what you hear and are taking the information to digest at a later date. However do not scribble furiously – others are likely to dismiss you as the minute-taker, particularly if you are a woman.

9. And finally - don’t expect to be liked!
Having gravitas will gain respect from those around you. Gaining respect is far more valuable in business than being loved. It gives you instant credibility so you get taken seriously. Businesspeople – and staff members need to know, like and trust you to follow your lead. Having established respect and credibility, building rapport later will encourage them to want to like you.

Email me sarah@anrah.co.uk or phone 07939 261743 if you want to follow up on any thoughts you have about increasing your gravitas. I’d be happy to discuss things with you.

Sarah McCloughry
Anrah Training and Development
CSSD (1974), London Univ, member of the British Voice Association
www.anrah.co.uk
01865 243655
07939 261743

“Sarah has opened my mind to new ways of communicating which dramatically improved impact, first and lasting impressions. I have used many of her techniques in real situations which have resulted in positive and profitable outcomes.” Ben Dair, Product Manager, Harris Corporation

A funny going into Good Friday

2009-04-09T11:03:00.000-07:00

I had a mate who was suicidal. He was really depressed, so I pushed him in front of a steam train. He was chuffed to bits.

Have a great Easter!

Sam Walton on the recession

2009-04-03T12:13:00.000-07:00

I picked up this quote recently - and it hit a nerve:

"I was asked what I thought about the recession. I said I had thought about it and decided not to participate."

Sam Walton, Founder of Wal*Mart

I choose not to participate.

Out of date laws

2009-04-01T11:05:00.000-07:00

I picked this up from a newletter from Cousins Business Law and I thought it would amuse...

• It is an act of treason to place a postage stamp bearing the British monarch upside down.
• In Lancashire, it is an offence for a person to incite a dog to bark after being asked to stop by a police officer on the seashore.
• Royal Navy ships that enter the Port of London must provide a barrel of rum to the Constable of the Tower of London.
• In England, all men over the age of 14 must carry out two hours of longbow practice every day.
• In Chester, Welshmen are banned from entering the city before sunrise and from staying after sunset.
• In York, it is perfectly legal to kill a Scotsman within the ancient city walls, but only if he is carrying a bow and arrow.
• In the UK, it is lawful for a man to urinate in public as long as he aims for the rear wheel of his vehicle and keeps his right hand on it (the vehicle that is).

mmm.

Inspirational quote

2009-03-10T11:49:00.000-07:00

When I dare to be powerful, to use my strength in the service of my vision, then it becomes less and less important whether I am afraid."

-- Audre Lorde

Acres of Diamonds, by Russell Conway

2009-02-22T06:12:00.000-08:00

Russell Conway was so successful with this speech that he was asked to give it over 5,000 times.

An old African farmer heard about people who had gone off into Africa, discovered diamond mines and become fantastically wealthy.

So he sold up his farm and decided to go off into Africa and crown his life by discovering a diamond mine and becoming fabulously wealthy. He wandered the vast African continent for 12 or 13 years and, finally - tired, broken, broke, alone, sick and exhausted - he threw himself into the ocean and drowned.

Meanwhile back on his farm, the new owner was out watering a mule in a stream that cut across the farm. He found a rock that threw off light in a remarkable fashion. It was later found to be a diamond of inestimable value!

The person who identified the diamond asked the new farmer to take him out to where he had been watering the mule when he found the rock. They went back out and found another diamond...and then another...and then another! In fact, they found that the old farm was literally covered with acres of diamonds.

The old farmer had gone off seeking diamonds somewhere else, without ever looking under his own feet; he did not realise that diamonds didn’t look like diamonds in their rough form. They simply looked like rough rocks, burned fragments and charred remnants of coal.

To bring out it’s very best value, a diamond must be cut, shaped, polished and set.

Our major opportunities in life also come to us like rough diamonds. They say the reason why people miss their major opportunities in life is, in the words of Thomas Edison:

“Most opportunities are disguised in work clothes and look like work.”

Our major opportunities to achieve everything that we want lie right under our own feet. Not only in our own talents and abilities, but also in our own towns, our own industries, our own interests, our own education, our own background and our own connections. Everything that we want, everything that we hoped for is probably very close at hand -but it does not look like a diamond in its rough form. It will require work, planning, preparation and effort. It will require getting down there with our own hands and creating, polishing, buffing and setting.

Don’t think that you have to travel across the country, change industries or go back to school. In setting goals, look right where you are and start where you are right now. Most millionaires become millionaires from the very town in which they grew up. They recognised the opportunities from what was all around them and right under their own feet.

The Man Who Sold Hot Dogs

2009-01-21T03:56:00.000-08:00

There was a man who lived by the side of the road and sold hot dogs. He was hard of hearing so he didn’t listen to the radio. He had trouble with his eyes so he read no newspapers and didn’t own a tv. But he sold good hot dogs. He put up signs on the highway telling people how good the hot dogs were. He stood by the side of the road and cried, “Buy a hot dog mister?” And people bought.

He increased his meat and bun orders. He bought a bigger stove to take care of his trade. He finally got his son home from college to help him out.

But then something happened. One day his son said, “Father, I’ve been listening to the radio. I’ve been reading the newspapers and watching the news on tv. There’s a big recession. The European situation is terrible. The domestic situation is worse.”

Whereupon the father thought, “Well, my son’s been to college, he reads the newspapers and he listens to the radio and watches tv. He ought to know.”

So the father cut down on his bun orders, took down his advertising signs and no longer bothered to stand out on the highway selling hot dogs. And his hot dog sales fell overnight.

“You’re right, son,” the old man said to his boy. “We’re certainly in the middle of a great recession."

'Nuff said.

What's the biggest mistake business make in an economic downturn

2008-12-04T05:27:00.000-08:00

Faced with an economic downturn, many businesses cut advertising and marketing spend. But it's their biggest commercial mistake.

The Financial Times have just launched a very unusual poster/bill-board campaign in which the bill-boards have been stripped back to the bare boards and with just a small copy panel posing the question: "Global downturn. What's the first mistake businesses make?"

The posters direct people to a page on the FT website www.ft.com/budgets which includes details on a number of Independent studies that all show that advertising in a downturn gives you increased share of voice, increased market share and increased profitability over time. Here are some of the highlights:

McKinsey study:

The companies who increased their spend in a recession were the only ones whose profits rose substantially when the economy recovered.
Read the McKinsey study

Patrick Barwise, London Business School Professor of Management & Marketing:

The advantages of maintaining or increasing marketing effort are greater than the short-term benefits of reducing spend.
Read Patrick Barwise's report

Hillier analysis of 1,000 companies on the PIMS (Profit Impact on Market Strategy) database after the early 1990s recession:

The companies who had cut their marketing budgets saw ROCE (return on capital employed) decline by 0.8% after the recession.

Those who increased their marketing activity saw an increase of 4.3%.
McGraw-Hill research, analysing 600 companies from 1980-1985:

The sales of companies who had kept advertising during the 81-82 recession had risen 256% over those who had not.

In every recession of the past 90 years, independent studies show that the businesses who increase their advertising spend are the ones who survive the tough times and thrive afterwards.

Still planning to cut that spend???

These are interesting times

2008-11-21T09:10:00.000-08:00

This is an article written by my good friend and colleague, Gordon Berry, whose sentiments I share 100%. I hope you find these wise words of value.

At the time of writing this note, we are undoubtedly going through some very interesting and challenging times.

Indeed, if we were to choose to believe what we read in the newspapers and hear on the television, then one would be forgiven for thinking that the sky is falling in. What is important to realise straight away is: that is how they sell newspapers or get their viewing figures up. The media know that the more they can scare people, the more people will buy newspapers or listen to the news. It has been said of course that the media have predicted 18 of the last 3 recessions. For months now they having been pawning recession, even though we are not actually in one. Now that they are close to creating a self-fulfilling prophecy (if you scare everybody enough to think that hard times are on there way and they must stop spending - then guess what happens), they have started talking about deflation – even though we do not have deflation.

Now, please understand me. There is no doubt that if it is your job that is genuinely at risk of redundancies, then I can understand your concern. Or if your livelihood relies entirely upon the lending markets, then there is a specific issue there.

However, two things: firstly most of the people reading this are self-employed and there is an argument that self employment is far more secure than employment – because at least you are in control of your own destiny! Secondly, if you do have a fear about the security of your position – is it founded on reality– or are you worrying yourself unnecessarily? You see, that is my definition of anxiety – it is using your present moment to worry about something that might not happen in the future so that you can get to feel bad now! and crazy as that sounds when you think about it – we all do it to some degree, don’t we. Some people are so good at it they make themselves ill. Some simple advice if you will allow me….Stop it. Stop spending your hours worrying about what you cannot affect and go and take action on what you can affect. Speak to your Boss and find out if there are any grounds for concerns and probably more importantly, find out how you can make yourself indispensible to your employer. The same could be said of the self-employed. Go and speak to your customers, find out what they need, what they want, what their concerns are, show them that you are the provider that cares and make yourself indispensible to them.

Again, understand me, I do realise that there are some Industries that have been very much affected by this credit crunch. However, if you are not in an Industry that is genuinely affected by what is predominantly a credit crunch, then what has changed for you. Probably not that much should have changed if you are prepared to be brutally honest about it. Look, if you are not reliant on credit and your clients are not reliant on credit then nothing much has changed – except maybe peoples expectations and the fears in their heads that things might one day, somehow, get bad for them. They are not sure how, exactly - inflation is low, their incomes are, if anything higher than they were last year, they are busy at work, but hey, they keep reading in the newspapers and hearing on the television that we are heading for hard times, so it must be true, therefore, I’d better just keep my money in my pocket and hang on to it, …..just in case.

If you genuinely believe that the current climate does affect you directly then please, please, please come in and speak to us and we will happily give you our time to help you examine what can be done to assist you. There are a number of things that can be done and we will touch on some of them here, but far better that you come in and see us and let us look at your specific circumstances.

In the meantime, switch the television off. That electronic income reducer that has people in trance on average 7 hours every night, and stop reading the garbage that they print in the newspaper. (apparently, on average, we spend 15 years of our life just watching television!! And yet the biggest complaint today is not having enough time!) Filter out those dreadful, sensationalised, scaremongering stories. Ask yourself, is this going to be helpful to me, and if the answer is no, then don’t read it. Stop scaring yourself unnecessarily. It does nothing for your business, it does nothing for your health and it does nothing for your peace of mind. If you don’t believe me that the television news deliberately highlights the negative, then just test it one last time tonight, listen to the flowery sensationalised language that they use in their delivery and ask yourself why.

One final thing that they do, before I get of my soapbox, is they generalise wildly. They find one person, or one business or one whatever that is negatively affected by whatever is making the news currently and then they extrapolate that across the board and apply it to the entire population.

So what can you do about this (other than switch the television off, now)?

Well first of all, most of your competitors are tempted just to slash prices in order to continue to attract customers and to slash all their costs by laying off staff and cutting back on marketing costs and every other cost they can attack, then they hold of paying all their suppliers for as long as they possibly can. Presumably, thinking this will increase their profits and save their business. But if their only strategy is to cut everything to the bone, then what is their strategy next year? They then find that they: cannot attract customers because they are not marketing; they cannot convince them to buy because they approach them with a mindset that communicates that they don’t expect them to buy; they cannot service the customer and treat them well because they have cut back on staff to look after the customer, so the customer has a terrible experience, meaning they won’t come back; furthermore, they can’t actually provide what the customer wants to buy, because their suppliers will not supply goods as a result of not being paid and anyway they have cut their prices - so now there is no profit margin in it and no point selling anything; or they find that they have to work so much harder now because they have to sell more goods just to make the same profits as they did previously.

You must maintain your margins! Do not be tempted to slash your prices to attract custom. Let your competitors do that and then watch their service levels go out the window as they try to service sales when they have no margin. What you can do is check that you are competitive (but you do not need to be the cheapest), make sure you are efficient in your purchasing and delivery, but do not, I repeat do not just slash your prices out of fear. You can and should do the following:

1. Understand that people do not generally buy on price. They buy what they perceive to be a fair exchange of value for the money they are being asked to pay. A 2007 survey of customers had price rank only the 5th most important issue to customers. Only 14% said it was the most important buying factor. So 86% did not perceive price as the most important issue affecting their buying decision.
2. Realise that customers simply have the same fears that you do and all they want is somebody to reassure them that they are making a sensible decision to buy from you. That any fears they have are just that and that you will look after them.
3. Understand that for a large percentage of your customers, nothing has changed. I will make some sweeping generalisations here myself, but probably 20% of your customers are badly affected by the current climate; 60% are largely unaffected but could do with some reassurance and 20% could not care about price, it simply is not an issue for them. So what customers should you be focusing your efforts on?
4. Be aware that people buy on emotions not logic (despite the fact that they would argue that point). I know of businesses who are deliberately increasing their prices at this time and have simply come to people like myself for some guidance on what language to use to make sure that they are selling features, not benefits. Or have deliberately introduced new more expensive products to cater to the percentage of people who are not affected.
5. Recognise that your competition has no other strategy than to slash prices and they have nobody to turn to get better advice. You can come and speak to us.
6. Consider increasing your marketing! If there is only 80% of the trade out there, but your competitors have their head in their hands and are only trying 50% as hard – could you actually increase your market share? There are a number of inexpensive marketing methods that you are probably not utilising at the moment. Come and speak to us to find out what they are.
7. Speak to your customers. Find out what they want and need and what their concerns are. Let them know you care.
8. Speak to your suppliers. Make sure that they know that everything is well with you and that you are reliable.
9. Speak to your bank manager and let them know that everything is well with you and that you are reliable.
10. Take tax advice from somebody you trust, like Berry & Co, and look to see if there are any areas where you are unnecessarily volunteering monies to HM Revenue & Customs, and then stop it!
11. Examine where there is waste and deal with it.
12. Take a step back and look at how you manage your processes. If you can, give yourself some time away from the business, even just a half-day, just to think about how you do what it is that you do. Is there anything you are doing that is inefficient and that you only do because that is how you have always done it. Are there any new markets that you could tap into.
13. Make it easy for your customers to pay you. Accept every form of payment that you reasonably can and be prepared to offer terms if appropriate.
14. Chase up old debts and get the money into your bank account.
15. Clarify your terms of payment and follow up rigorously.
16. Invoice as quickly as possible. It astonishes me the length of time that some businesses take to get an invoice out, even though they know that they probably will not be paid until they do.
17. Think about outsourcing (delegating) the things you do not like doing, if your time could be more productively spent doing the things you do like doing and that brings in more than it costs you to outsource.
18. Make sure your money is working for you. If you do have cash in the bank, is it earning the best rate of interest. If you don’t know then call your bank manager and find out.
19. Are there any old stock items that you could be selling off at this time.
20. Can you use any free time now, to spruce up your premises and/or your materials to make it more attractive for people to visit you.
21. Could you attract any PR by getting a story into the local newspapers.

I could continue, but a far better idea would be for you to take the time to come and meet with us and discuss your specific business with us.
And remember that your body language is 55% of the message that you give to your customers. There is an old Chinese proverb that says “man without smiling face should not open shop”. Your customers will look to you to see how they should act. Treat them wisely and always act with their interests at heart and they will continue to buy from you time after time and it is almost certainly not in their best interests to hear another scare story from you.

Mark Twain said that kindness is the language that the deaf can hear and the blind can see. I would want you to understand that it would do absolutely no good for me to peddle any negativity (there are more than enough people doing that already). There is a section of the medical community who believe that such negativity, which drives a feeling of not being in control, is the root cause of much of the dis-ease we see in society today. There is action you can take to survive and do well in the current climate, you can take back control. Henry Ford famously said, “whether you think you can or you think you can’t, you get to be right”.

I repeat that we are happy to talk about your specific business and industry. We want to help you be successful in these interesting time. Use it, take the time to come and talk to us.

These are testing times, but the tests in life are meant to make you, not break you. If you can come through this healthy then you will come out the other end stronger for the experience. Make sure that you are around people that can help you and support you and not those whose only purpose is to peddle doom and gloom.

I wish you every success in business and look forward to speaking to you soon

Gordon Berry
Berry & Co

Helping create businesses that work… so that you can choose not to

P.S. Ghandi was once reported as saying that he used to meditate for 2 hours every day – and then he became so busy that he had to meditate for 4 hours every day. It can help to take some time out and get some distance from your business and the help of a facilitator to examine the business plan as a whole. If you would like our help in undertaking a business-planning day then please contact Gordon Berry for more information.

P.S. “If you want to test your memory, try to recall what you were worried about one year ago today.” A Rotarian

41 High Street, Kirkcaldy, Fife, KY1 1LL
Tel: 01592 267849 | Fax: 01592 267849 | Email: advice@berryandco.net

27 Canmore Street, Dunfermline, KY12 7NU
Tel: 01383 740261 | Fax: 01383 740261 | Email: advice@berryandco.net

Acres of Diamonds – Russell Conway

2008-11-11T07:57:00.000-08:00

So successful was Russell Conway with this speech that he was asked to give it over 5,000 times.

An old African farmer had heard about people who had gone off into Africa and discovered Diamond Mines and become fantastically wealthy.
So he sold up his Farm and decided to go off into Africa and crown his life by discovering a diamond mine and becoming fabulously wealthy, and so he wandered the vast African continent for 12 or 13 years and finally tired, broken, broke, along, sick exhausted, he threw himself into the ocean and drowned.

Meanwhile back on his Farm, the new farmer that bought it, was out watering a mule in a stream that cut across the farm and he found a rock that threw off light in a remarkable fashion. It was later found to be a diamond of inestimable value and the person who identified it as a diamond asked the new farmer to take him out to where he had been watering the mule when he found the rock. He took him back out and lo they found another and then another and then another and then they found that the old farm was literally covered with acres of diamonds. The old Farmer had gone off seeking diamonds somewhere else without ever looking under his own feet.
And the moral of the story is that the reason the Farmer went off looking for diamonds somewhere else is that he did not realise that diamonds didn’t look like diamonds in their rough form. That diamonds in their rough form just simply looked like rough rocks, burned fragments and charred remnants of coal and that a diamond in order to become a diamond must be cut and shaped and polished and set in order to bring out it’s very best value and that our major opportunities in life also come to us like rough diamonds.
They say the reason why people miss their major opportunities in life, is because, in the words of Thomas Edison, “most opportunities are disguised in work clothes and look like work”.
Our major opportunities to achieve everything that we want to accomplish lie right under our own feet. Not only in our own talents and abilities, but also in our own towns and in our own industries, our own interests our own education, our own background our own connections. Everything that we want, everything that we hoped for is probably very close at hand, but it does not look like a diamond in its rough form it will require work and planning and preparation and effort. It will require getting down there with our own hands and creating and polishing and buffing and setting.
Don’t think that you have to travel across the country or change industries or go back to school. In setting goals, look right where you are and start where you are right now. Most millionaires become millionaires from the very town in which they grew up. They recognised the opportunities from what was all around them and right under their own feet.

Time to sharpen your axe?

2008-10-13T05:54:00.000-07:00

Heard the parable about the two lumberjacks in a wood-chopping contest? One Lumberjack worked furiously over the long day, never stopping to rest.

The second lumberjack also worked hard, but he took a 15 minute break each hour and yet he still won. When asked how he could have done it even though he took several breaks, the winner replied, " I wasn't taking breaks to rest, I was taking time to sharpen my axe."

The moral of the story is clear. A sharper axe cuts faster. In the long run, taking the time to sharpen your axe is much more efficient that just working harder and faster.

If things are slower than you’d like, sales-wise, it’s a great time to sharpen your axe by optimizing your Sales Process.

A spot of Tesco bashing anyone?

2008-09-30T01:57:00.000-07:00

Well, amidst the relentless succession of bad news – another nationalisation, nose-diving stock markets, the Powers that Be in disarray over what to do about it – at least one company appears to be faring OK under the economic onslaught.

So will we celebrate this news, grasp it as evidence that you can manage your business to be successful even in such difficult times, draw strength for our own particular set of circumstances?

Of course not! This is Tesco we are talking about – that giant aunt sally of an organisation that cannot do right for doing wrong. It is a national sport to engage in Tesco bashing at every available opportunity, so why waste this one?

So what has Tesco done so badly wrong to incur our wrath in this way? Well, been successful really. Very successful.

It is a curiously British thing, this suspicion of success. As business owners, we aspire to it and yet seem to resent those who have achieved it. To my mind, this is very much a victim mentality.

Victims blame circumstances, other people, in fact anything outside of their control for their lack of success – their destiny is anywhere but in their own hands! The higher the profile of the supposed “cause” of their failure, the better – Tesco, the credit crunch, global warming, the wettest August since 1066, whatever.

Victors, on the other hand, take full responsibility, ownership and accountability for their own success.

Whatever, your personal views on Tesco, they most certainly fall into this category. Have they always been this mighty juggernaut? No, they started from nothing as we all do – in 1919 selling surplus groceries from a market stall in the East End of London, to be precise. Have they always been this successful? No –remember when Sainsbury’s dominated the grocery market?

What they have done is to really understand their customer and offer true value to them (Clubcard is a fantastic example of this), anticipate market developments (e.g. tesco.com, Tesco Personal Finance) and deliver with a high level of operational effectiveness.

They are by no means perfect and have made many mistakes along the way – and will continue to make them as they trial new initiatives and enter new markets. But that is the essence of good business.

You can learn a great deal from a company such as Tesco, if you choose to, and utilise it to grow and develop your own business. Or you can bemoan their success and every other external factor that keeps you from facing reality.

It's your call.

Don’t take my word for it!

2008-09-27T10:06:00.000-07:00

Following on from my previous post, I thought I’d share a few quotes on leadership..

“Leaders should only do what only they can do." - Sir John Harvey-Jones

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” - John Quincy Adams

“The key to successful leadership today is influence, not authority.” - Kenneth Blanchard

"Being responsible sometimes means pissing people off." - General Colin Powell

"I believe the real difference between success and failure in a corporation can be very often traced to the question of how well the organization brings out the great energies and talents of its people." — Thomas J. Watson, Jr. A Business and its Beliefs (1963)

"The task of leadership is not to put greatness into people, but to elicit it, for the greatness is there already." — John Buchan

I hope this inspires!

Does your business depend on you?

2008-09-23T23:21:00.000-07:00

Many owners go into business because they want to be their own boss, doing what they do well and reaping the reward for themselves. This often leads to a business that is inextricably linked with its owner - if he stops working, the business stops.

Does this sound familiar? Well, be aware that it is a pretty risky state of affairs, for a number of reasons:

1. If you become ill or otherwise indisposed, business suffers. You might be able to deal with this over a few days perhaps, but if something happened to prevent you working long term, the business would be in serious trouble.

2. The demands on your time can quickly become overwhelming, leading to stress, ill health and a business that will ultimately suffer things begin to fall through the cracks.

3. Business cannot continue to grow if capacity is limited because of you. This is an artificial state of affairs and amounts to little more than a job in reality anyway!

4. A business that is inextricably linked with its owner has little value to potential buyers, so won’t provide much of a pension plan for you.

So, what can you do if you are in this situation?

Well, immediately take steps mitigate the risk through insurance – critical illness cover and key person insurance in particular. Private medical cover might also be advisable.

Then, begin work on extricating yourself from the business whilst maintaining your ethos and values. Firstly, go back to basics: Review and restate your vision for the business what it stands for.

Then, set about putting the right elements in place to help you to achieve this vision. Understand how the business needs to be structured and begin to build this. Understand what is required of your people and put the systems and processes in place to support them in their part in your vision. Put a plan in place to bring in the support you require to move you ever closer to that vision.

Once you have the key infrastructure in place, begin to leverage the value you have built through smart sales and marketing.

Lastly, be proud that you have built a sustainable business that remains true to your values – and take a well-earned holiday!

Vulnerabilities in your customer base

2008-09-21T03:48:00.000-07:00

We have all heard of the 80/20 rule, where 80% of your revenue comes from just 20% of your customers. This is not too much of an issue if you have a good number of customers in that 20%. But what happens if that 20% equates to just one customer?

One, your business survival is at risk should anything happen with that customer – perhaps the relationship sours, their business takes a nose-dive for some reason, they get a better offer elsewhere, key personnel change or any number of other events that can impact on their custom with you.

Two, because your very survival is dependent upon that customer, they hold all the cards. They can constantly beat you down on price whilst simultaneously increasing their demands on you. This is just not sustainable long term.

This is extreme end of the scale – but still not at all uncommon for many small businesses. However, even if your 20% is made up of more than one customer, reliance on individual customers for significant proportions of business is risky.

Does this sound familiar? Then act fast to reduce this reliance and the risk to your business.

1. Build your business within existing smaller customers. Explore opportunities to cross- and up-sell.

2. Expand your customer base. Be clear on your target market and why they buy from you, so you can effectively communicate your value to prospective new customers.

3. Give excellent service to and maintain regular communication with the important few. This will help to identify early on where business might be at risk.

4. Keep a tight control on overheads and other costs to minimise the risk to the business should a significant revenue stream dry up.

Next time, we will look at a very common area of risk within small businesses – over-reliance on the business owner.

Reduce your risk exposure

2008-09-19T00:18:00.000-07:00

A common theme throughout the series of shocking news stories this week is exposure to risk. We have all read the reports on the latest victim of the financial crisis, HBOS, which has high debt exposure in the beleaguered property sector.

There are many areas of risk within business – and, if they are not carefully managed, any one of them can severely damage your ability to trade, or even cause you to go out of business. We have seen a number of examples this week of how this can happen to some mighty corporations – as small businesses, we can be much more vulnerable.

So, what are some of the key risks facing us and what can we do about them?

Finance/funding

In the wake of the Lloyds/HBOS merger announcement, commercial property investors are now worried that their facilities will be under threat as Lloyds seeks to reduce its exposure to the sector. They have good reason to worry. Personally, in just the last couple of weeks, I have heard of two small businesses in this sector where finance has been withdrawn or refused. Until alternative sources of funding are in place, neither business can move forward.

And it is not just the property sector that is suffering. A small car leasing company I know is finding trading increasingly tough, as finance providers are tightening the terms on which they will offer finance, resulting in much fewer successful applications. I have many more examples as I am sure do you.

So what can be done to minimise the impact of such shifts in the market?

Where possible, spread your risk in this area – do not just rely on one lender or type of finance. If appropriate for your business, consider the role of less traditional types of finance, such as factoring and asset-based lending. Often, more innovative solutions can be found in this area as more traditional forms of finance dry up.

Beware, however – not all providers in these areas are created equal, so seek good advice from a respected source to help ensure you make the right decisions on both the type of finance and the lender. My friend and colleague Adam Thwaites, from Infinity Finance, is an expert in this area and I would highly recommend that you contact him to seek advice in this area. You can contact him via www.infin.co.uk or drop me a line and I will put you in touch.

Keep your providers in the picture, so they can have confidence in your business performance. This is particularly important if things don’t go quite according to plan! Proactive communication will reassure your lenders that you are in control of your business and help you to identify early on if any of your sources of funding are at risk. Surprises in this area are bad news!

I will leave your to get on with your Friday now, but I will be back tomorrow to look at vulnerabilities in your customer base.

Have a great day!

Further shocking news from the financial sector –but what can we do?

2008-09-15T10:37:00.000-07:00

What a scary news day! Lehman Brothers, Merrill Lynch, AIG – who’ll be next? And what can we do about any of this anyway?

Well, individually, we probably couldn’t have done a great deal to avert these particular situations, but how we respond to them is in our control. So let’s draw some positives by at least learning from the events of recent days.

1. On a practical note, the ripples from these stateside events will reach our shores pretty quickly. So, if you thought our banks’ lending criteria were tight before, be prepared for them to draw the belts in another couple of notches. If you need finance, act now – and provide robust justification for your requirement.

2. Remember that market confidence is key. As Tony Lomas from PWC said today: “If no-one wants to trade with you…there’s no way back.” Never under-estimate the importance of customer satisfaction and your reputation in the marketplace.

3. Whilst belts are undoubtedly being tightened, trading will not cease altogether. People and businesses still need to spend on goods and services – they will just be more selective about which they buy. So, understand why people buy from you and ensure that you offer consistently great value.

4. Be positive and confident in the future. Be open to opportunities and solutions to problems that might be facing you at the moment. This too will pass – make sure you come out the other end the stronger for it!

Phew – that’s done! Now let the hard work commence…..

2008-09-10T10:18:00.000-07:00

Well, thank goodness we are through all that! My friends at Star Digital and I have been working silly hours to get the new email campaign and web site together – but it is thankfully done!

Well, not really – it is started, but not sure it will ever be done as such.

You see, the thing with online stuff is that you get feedback all the time from people – by virtue of their posts, responses and interaction with it – so you get a feel for how it is working. This, coupled with the fact that you can make adjustments as you go – and get more feedback – turns it into a kind of ongoing work in progress!

That is all to the good as far as I am concerned - as I said in my previous post, I am not a fan of mediocrity, so bring on the feedback!

The site as it currently stands is a start point and I will add whatever offers genuine value – so please share your thoughts.

For now, I think I will relax this evening and raise a glass to my hardworking colleagues at Star…!

New and different? I hope so..

2008-09-06T09:15:00.000-07:00

New web site, new blog, new marketing campaign – exciting times! And what a busy few weeks it has been to get here!

We’ve tried to do things a little differently – that is, my friends at Star Digital and me – and hope it hits the mark with you. Do please let me know – good or bad, or downright ugly, for that matter! I am not one to wallow in mediocrity, so please be generous with your feedback, so we can create something of genuine value.

Has it all gone according to plan – hell, no! But in trying new things, we get to do and create things that might never have existed if we hadn’t had the courage to get out there and try. Of course you need to have the sense to know when something is working or when to pull the plug quickly and quietly (!), but if you never give it a whirl you will never know!

A couple of people I admire put it far more eloquently than I could:

“The definition of insanity is doing the same thing over and over again and expecting different results.” Albert Einstein

“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” Bill Gates

I am lucky enough to be surrounded by a great many business owners who share this philosophy – Roger at Star Digital being one – and we have great fun pushing the boundaries of what’s possible.

I do hope you will share this journey with me and my colleagues and that we can all achieve a great deal more for it!