The Five Lessons I’ve Learned


I was talking to a potential new member of TAB York last week: explaining what I did, how the concept of peer coaching worked, the benefits it had brought to my members… And looking back on the seven years I’ve been running TAB York.

“So,” she said. “What are the five key pieces of advice you’d give to an entrepreneur?

Five? I thought. More like 55. Or 555. But let me try and answer the question more successfully than I answered it then. What are the five most important lessons I’ve learned in the past seven years – and by definition, the five most important pieces of advice I’d give?

Lessons Learned written on chalkboard

1.The job of a leader is to lead

You’ve pushed your breakfast round your plate in a desolate motorway service station: you’ve decided that enough is enough. It’s time to start your own business. You owe it to yourself: you owe it to your family. Sooner or later your new business will be employing people – and your job is simple. It’s to lead them: to say, ‘this is the where we’re going, follow me.’ There are plenty of other things you need to do – realise you don’t need to be an expert in everything and don’t be afraid to hire people who are brighter than you – but it is your drive, determination and vision that will carry the company forward.

2.A mistake is only a mistake

I made Spaghetti Bolognese at the weekend. I broke a bowl, tipped pasta sauce on the floor and left the gas on under a pan. They were mistakes – and that’s all they were. No-one (not even my wife) is suggesting that I give up cooking and never enter the kitchen again. So your latest idea didn’t work out: the guy you hired who was going to transform your business transformed it in the wrong direction. Move on: you live to fight another day – your vision is still the same. No-one scores 100% with their decisions – and as the saying goes, ‘the man who never makes a mistake never makes anything.’

3.Keep on Learning

I think we can say that the world has changed since I joined The Alternative Board in 2009. In that year Facebook had 360m users and 20m iPhones were sold. Today the figures are approaching 2 billion and over 200 million. In 2009 Apple had just introduced a fledgling service called the ‘app store.’ The pace of change over the last seven years has been astonishing, and it’s not going to slow down. You need to set aside time to learn – and as I wrote a few weeks ago, if you don’t develop and grow, then your company can’t develop and grow.

4.Nothing can replace your KPIs

Having just written about change, let me turn to something which can never change: your Key Performance Indicators – the numbers and metrics which tell you the current state of your business and go a very long way to predicting its future.

If I’ve seen one cause of business failure over the past seven years it’s not knowing your KPIs. Checking your KPIs every month is simply essential to the continued success of your business. And ‘How much have we got in the bank?’ is not an adequate check. Sadly, it is almost always followed by ‘Can we afford to pay the wages this month?’

5.Your product is more important than anything

Despite the internet, despite social media, despite e-mail marketing and despite every change that’s happened over the last seven years, your product (or service) remains the key to everything. And if it’s not excellent, you’re in trouble. To paraphrase the old saying, stories about bad service are half way round the world before good service has got its boots on. Not only is the world changing, it is spawning a lot of hungry competitors: if you’re not innovating and improving, then someone else will be, and they’ll be telling your customers.

6.We all need friends

Clearly I haven’t learnt to count, but where else can I finish? Over the last seven years it has been my privilege to listen to some outstanding business advice from the members of TAB York. It’s been advice which has transformed businesses, transformed lives and – on at least one occasion – saved a marriage. We all need friends and – in business – you will never find better friends than your colleagues round a TAB boardroom table. As the man said, we all need a little help

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The Monday Morning Quarterback


It’s just about the perfect description. Instantly, we all know what it means…

So the wide receiver’s wide open. 20 yard throw straight into the end zone. Hell, even my six year old can do that. What’s he do? Tries to run it himself. Gets sacked. Turnover. And it’s game over. Season over. See you in September.

There isn’t an equivalent phrase in the UK, but no office is short of an expert round the watercooler on a Monday morning.

Seriously, he thinks X is a centre back? He needs to buy Y. And no wonder Z didn’t try an inch. My mate’s brother says he’s been tapped up by City.

Whichever side of the Atlantic you’re on, no sports fan gets a decision wrong on a Monday morning. Hindsight is a wonderful thing – and it guarantees you a 100% success rate.

Sadly, the entrepreneur doesn’t have the benefit of hindsight: he has to make decisions every day – and he’ll get plenty of them wrong. As a recent article in the Harvard Business Review put it, ‘The problems entrepreneurs confront every day would overwhelm most managers.’

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…And – just like the QB on a Sunday night – entrepreneurs get plenty of decisions wrong. Any entrepreneur who gets 50% of his decisions right first time is doing remarkably well. Fortunately, TAB members can improve on those numbers. They can bring their problems to the monthly board meetings – and rely on the collective wisdom, experience and insight of their colleagues: the Tuesday/ Wednesday/ Thursday quarterbacks. Once a problem – or an idea – has been run past seven people instead of one, the chances of a correct decision increase exponentially.

But I’m aware that not everyone who reads this blog is a member of TAB York: plenty of readers are just starting their journey as an entrepreneur. So here are three of the most common problems, proposed solutions and – ultimately – mistakes that I’ve seen in my business life. I hope they help – and don’t worry if you tick all three boxes: every successful entrepreneur has done exactly the same.

  • No-one else cares like I care. The only answer is to do it myself

That’s true. It’s your business: no-one will ever care like you care. But you cannot do everything yourself. That way lies fatigue, burn-out and your wife telling you that she needs to talk… Embrace the division of labour: we live in an age where everything can be outsourced online. Your job is to manage the business: let someone else do the tedious stuff that takes away your creativity and your productivity.

  • There’s no more money in the budget. The only solution is to throw more hours at it

Let me refer you to one of my favourite books, Rework, and page 83: ‘throw less at the problem.’ As the authors say, the solution is not more hours, people or money. The solution is almost always to cut back. You cannot do everything and, as I wrote last week, success comes from a focus on your core business – not on trying to please all the people all the time. Besides, more hours simply means a second, more serious, talk with your wife…

  • Fire people: hire people

When you’re starting out you’ll be a small team: that breeds closeness – and loyalty. But not everyone who starts the journey with you is capable of finishing it. Sadly, at some stage you’ll learn just how lonely it can be as an entrepreneur: one day, you’ll accept that Bill’s just not up to it any more. You have to act: if you don’t, you’ll cause resentment among the rest of Bill’s team – and risk losing people who are up to it. And when you hire Bill’s replacement, don’t be afraid to hire someone smarter than you. See above, your job is to manage and lead the company, not to be the expert on every single aspect of it.

 

When I write this weekly post I sometimes ‘let it go cold’ for an hour and then give it a final read through. That’s what I did this week and I need to correct myself. The three mistakes above are mistakes we can make at every stage of our business journey – not just when we’re starting out.

It’s all too easy to slip back into bad habits, to think ‘it’s easier to do it myself’ or ‘If I work through the night I’ll have cracked it.’ We’ve all done it. But at least you won’t make the mistakes for long: those quarterbacks round the TAB table will be watching you…

The 6p Café – and the question You Should Really Ask


Just a note before I start this week: I’ve written more than 300 posts on this blog, but last week’s was much the most personal. I’d like to say thank you for all the comments and replies: some of them were touching, some heartfelt and some even more personal than the original post. One in particular buoyed me for the whole weekend: so thank you again.

Anyway – on to business. And a simple question: how much did you pay for your last latte? I’d guess anywhere from £2.40 to £2.90: that’s the going rate and it is, of course, completely ridiculous. Invest not-all-that-much in the right equipment and you can stay in your kitchen and make a coffee that’s equally good for a fraction of the price.

But that’s not the point is it? Because as we all know, Nero, Starbucks and your local coffee n’ cake shop don’t sell coffee. They sell something else entirely.

…And now a café has started charging for it.

Let me introduce you to Ziferblat, a café in Manchester that charges 6p a minute. That’s right, 6p a minute. Stay as long as you want; eat and drink as much as you want and use the Wi-Fi. 30 minutes costs £1.80 and an hour is £3.60.

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At first glance that seems remarkably cheap: why do you need to pay rent on an office? An eight hour day at Ziferblat costs £28.80 with no need to go out for a sandwich at lunchtime. Well, they make a profit and the chain is expanding. But it’s not their balance sheet I want to discuss; it’s their willingness to look at an established concept in a wholly new way.

I have plenty of my meetings in various Costas, Starbucks and Neros around North Yorkshire. Am I paying for the coffee? No. That’s the last thing on my mind. I’m paying for convenience, for somewhere to meet, for thirty minutes with a friend, Board member or potential client.

I’m buying the coffee in order to rent a convenient meeting space for thirty minutes. The owners of Ziferblat have recognised this: as one of them says in the video, “Everything is free, except the time that you spend.”

Some of you may remember a post I wrote early in 2014: it was about American restaurants charging different prices for their food depending on when you ate. Re-reading the original piece – and thinking about ‘the 6p café’ – that still seems entirely logical to me.

The reason I make these points is simple. We’re now well into ‘making plans for next year’ season and there’s a fundamental question to ask yourself: what do I really sell?

Do you sell coffee? Or do you sell the convenience, the surroundings and the meeting place?

Quite rightly, you’re now turning the question round and asking, ‘Fair enough, Ed. What do you really sell?’

Let me answer that, because it illustrates the point exactly.

Do I really sell 1 to 1 meetings and peer-to-peer coaching? No, of course I don’t. So let’s look at the reasons entrepreneurs ‘buy’ TAB York:

  • They want to solve a problem and/or address some pain
  • They don’t want to feel isolated/lonely any more
  • They want a fresh perspective on their business
  • They’re stuck in a rut
  • They know they’re ready to ‘take the next steps.’ But they don’t know how to do it, and may not even know what the next steps are

So TAB York sells solutions to specific problems, an end to loneliness, a new way of looking at problems and opportunities, motivation and – as I wrote two weeks – a glimpse of what life and business could be like: ‘permission to dream’ as I termed it.

Clearly, TAB York sells different things to different people – and that doesn’t change even after someone becomes a member. The reasons why entrepreneurs continue as Board members can be very different to the reasons why they joined:

  • The Board meetings are an insurance policy against things going wrong
  • The routine of the monthly meetings forces members to work ‘on the business’ not ‘in the business’
  • It’s the only place they can really talk about their business with people who absolutely understand…
  • Who’ll give absolutely impartial advice…
  • And who care about your success and the success of your business

So in no way am I selling the monthly meetings: I’m selling reassurance, a framework, and the experience, objectivity and commitment of the other Board members. And ‘commitment’ is the right word: members of TAB York have an emotional investment in each other’s businesses.

All the above points have come from Board members over the years – and yes, when entrepreneurs ‘buy’ for so many reasons it makes it difficult to define what my colleagues and I ‘sell.’

The same may very well be true for you and your business. But take your time to define exactly what you do sell – and don’t be afraid to emulate ‘The 6p Café’ and think a long way outside the box. It’s a really worthwhile exercise and the answer may well surprise you – and have a significant impact on next year.

In fact it’s something we could cover at a 1 to 1: maybe over a meal. I’ll drop an e-mail to the Star Inn the City and offer them 6p a minute…

A Conversation with my Wife


Last week I discussed ‘permission.’ That my job is very often about giving an entrepreneur ‘permission’ to grow: to open the door and see what it could be like, to see the potential for himself and his company. But as I wrote last week:

…Going through that door can be painful. Because you’ll need to have a couple of conversations: one with your team, admitting that maybe you don’t have all the answers. And one with your spouse or partner, saying that you have room to grow: that you’ve had a dream, and you’re going to pursue it…

It’s the second of those painful conversations I want to look at this week. There’s no doubt at all that setting up and building a business puts a strain on a relationship. If you Google ‘business success leads to divorce’ the number of results is terrifying.

But sometimes a regular blog needs to go into deep water. Besides, we’ve tackled loneliness and depression in previous blogs: why not marriage guidance?

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(A note on pronouns before I start. As around 75-80% of TAB members are men, and as I’m going to relate this to my own experience, I’ve used ‘he’ for the entrepreneur and ‘she’ for the partner. But swap them round and every point I make is at least equally valid.)

So let me share some of my own story…

When I pushed breakfast round my plate in Watford Gap services and made the decision to start my own business, it wasn’t just a decision about me: it was a decision about my family as well. And yes, it lead to a lengthy conversation with my wife. It also lead to a couple of years of being largely dependent on Dav’s income: years when I was building TAB York and Dav paid the price in going without a lot of life’s luxuries.

Dav’s income allowed me to pursue my dream. You might say that in the same way I give an entrepreneur permission to look through the door, my wife gave me that same permission. I’ll be eternally grateful for that.

Were there some tough times in the first two years? Was the cash flow – with two young children – strained at times? Did it get a little tense occasionally?

Yes to all three.

As I’ve already said, starting a business puts a strain on a relationship. But it’s not just the cash flow – and now we move into real Venus and Mars territory.

The entrepreneur starts a business: his thoughts go something like this:

I’m starting this business for the benefit of my family. Sure things are going to be tough for a while, but ultimately we’ll all benefit. She must be able to see that – and she must be able to see that I’ll go insane if I stay where I am.

His wife takes a different view:

Our security’s gone out of the window. We might not be able to pay the mortgage this month. The kids need new clothes and I need a holiday. And all for what? So that he can spend his days trying to build “a better widget.” Like the world needs another widget…

Then there’s attention: or lack of it. As Dav would tell you, there were plenty of times in the early days of TAB York when I was ‘there but not there.’ All entrepreneurs are the same. Suddenly your head is full of staff who aren’t performing, suppliers who aren’t supplying, the inevitable cash flow problems. It’s all too easy to forget the things you used to do together: date nights, weekends away, the simple act of listening when your partner is talking to you…

Communication is vital in building your business. It’s vital when you come home as well – especially when you’re no longer the boss, but an equal partner.

I often write about the importance of communicating the vision you have for your business. There’s an exact parallel with a relationship. I don’t want to use the word ‘vision’ as it’s too impersonal: but you need to keep focused on the future; on what you want for the family, and for each other.

That’s what Dav and I had – and it’s what we still have. And more than anything, that helps you keep business in perspective.

So yes, there were tough times: some triumphs and some disasters. But as my pal Kipling would say, we tried to treat those two impostors just the same. And we met with pizza instead of steak and treated those two just the same as well…

The Only Certainty is Uncertainty


From the Daily Mail: 24th June 2017

“What on earth were we worried about?” That was the triumphant cry from Prime Minister Michael Gove yesterday as he celebrated ‘Independence Day’ – the first anniversary of the UK’s historic decision to leave the European Union. “What do we see now?” he asked to loud cheers on the Conservative benches. “The pound riding high, the stock market at a record level, small firms liberated from the shackles of Brussels’ red tape and free to recruit. Foreign firms rushing to invest in ‘the Switzerland of Northern Europe.’ The motion to make June 23rd a national holiday was passed by a majority of 378, with only the SNP and the handful of Labour MPs remaining after last month’s general election voting against. Celebrating with a pint of Late Knights’ Worm Catcher, Lord Farage said it was “a wonderful day for ordinary British people.”

From the Guardian: 24th June 2017

“I propose these measures to the House with a heavy heart,” said Chancellor of the Exchequer Nicola Sturgeon as she announced more tax rises and further austerity measures in her second emergency Budget of the year. “Exactly twelve months has passed, Mr Speaker, since we took the ridiculous and xenophobic decision to leave the EU. We now see the pound approaching parity with the dollar, the stock market plunging and unemployment rocketing.” Prime Minster Dan Jarvis – who seems to have aged ten years in the six months since the SNP/Labour coalition came to power – looked on with a pained expression. He is back in Brussels tomorrow as he tries to negotiate Britain’s re-entry to the EU, but must know that Angela Merkel and the German bankers will make the UK pay a heavy price.

Two scenarios, each equally unlikely.

But this time last week anyone predicting a lame-duck Prime Minister, an even lamer Leader of the Opposition and thirty shadow cabinet resignations in one day would have been advised to increase their medication.

Given the outcome of the Referendum – and the consequent fall-out – we can say goodbye to any hint of certainty for the next few weeks, and possibly for a good deal longer.

…Which is going to make running your SME extremely difficult. Big companies will be reluctant to commit to orders, fuel costs will increase as the pound falls against the dollar and – I suspect – some banks are going to be unwilling to lend as they watch their own share prices drift south.

Uncertainty-is-an-uncomfortable

My question last week was, ‘Does Brexit Really Matter?’ I stand by my thesis that five or ten years from now it will not be the most significant factor in the success of your business or your personal life. But in the short term there will be some very difficult questions for owners of SMEs to deal with.

Confidence, costs and the availability of capital will certainly be three of them – but there’s a fourth, highlighted by this article on the BBC website. Will the pool of talent dry up? When you need to hire someone outstanding to drive your business forward, will there be anyone left in the UK? And if there is, will a small business in North Yorkshire be able to compete?

I was talking to a friend of mine on Monday. “My son’s graduated on Friday,” he said. “Stellar degree from a top university. And now he tells me that he’s far more likely to work abroad.”

I suspect that conversation is being repeated up and down the country. And for the owner of a SME it’s a double whammy. Not only might your top talent move abroad, there might not be anyone around to replace them.

Hopefully you’ve now received (and read, obviously!) TAB’s ‘top tips in the light of the Brexit vote.’ One of those tips is simple: reassure your team, especially if you have EU nationals among them. Over the next 12 months the people you work with are going to be more valuable than ever – and more coveted by your competitors.

As everyone knows, I voted Remain. But living and voting in a democracy means you don’t always get the result you want. Now we have to get on with it. I hope – and believe – that there’ll be goodwill on both sides and that the sensible politicians in the UK and the EU will hold sway. But in the short term, the waters will be choppy. One captain may have resigned: those of us running SMEs don’t have that option. We’ll get through it – but a key part of that will be protecting, nurturing and retaining our teams.

Dealing with the Dark Side


A great half term, a brilliant family holiday and – like my trip to Australia – absolute confirmation of why I run my own business.

But as I wrote two weeks ago, it’s time to consider the darker side of being an entrepreneur. How to cope when it’s all going wrong.

So my Google search was fairly straightforward – and back came the regulation 26.7m results. Almost without exception they failed to address my query.

Coping with failure is the key for entrepreneurial success. Don’t see it as a failure; see it as a learning experience.

That’s all very fine. It’s easy to trot out the old clichés, and all successful entrepreneurs have had their share of failure. Equally, you’d expect the vast majority of articles about entrepreneurship to be unremittingly positive.

But this blog has always sought to address the real world. Entrepreneurs are by nature optimistic people, but everyone running a business will – sooner or later – go through tough times.

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We’ll go through times when we wonder if we’ve made the right decision, we’ll go through times when the old security of the corporate world seems remarkably seductive – and we’ll go through times when we wonder if the price is worth paying, both for us and the family we’ve dragged along on the journey.

And once or twice in our entrepreneurial careers, we’ll go through times when the ship seems to be heading for the rocks.

So the question is, how do you cope? I’m not talking about the practical here – solving the immediate problems, keeping everyone informed, stringent cost control – I’m talking about you.

How does the entrepreneur cope when the easiest decision might be to wave the white flag? How do you stop yourself going mad? How do you put on a brave face and focus on sports day, not on what is – or isn’t – happening back at the office?

If that’s what you’re going through right now, here are five strategies that work. These themes are remarkably common in talking to entrepreneurs who’ve ‘been there, done that’ – and eventually steered the ship away from rocks.

Remind yourself why you started

…And remind yourself that if it was easy, everyone would be doing it. You started because you wanted to build something and you wanted to define your own future. Creating anything that worthwhile will involve some pain – and remember the old adage: ‘the only thing harder than carrying on is giving up.’

Take the opportunity to make changes

Tough times can be an opportunity as well: take the chance to make some hard decisions about what’s really working and what’s not working. That might be parts of the business – or it might be people. Sometimes difficult times force you to make the decisions you’ve been putting off for far too long.

Keep the end in mind

This is self-explanatory. Remind yourself why you started this journey – and remind yourself where it’s going to end. That can be incredibly difficult when you’re fire-fighting, but force yourself to do it. Lift your eyes up and look at the eventual destination. Trust me, when the fires are out, you’ll be more determined than ever to reach it.

Walk…

Do some exercise, release some endorphins. No problem was ever solved by eating junk food and gaining half a stone. Get out there in the fresh air, walk up a hill and somehow it puts problems into perspective – and often presents a solution.

…And talk

You’re not the only parent whose teenage daughter has just slammed the door and walked off into the night – and you’re not the only entrepreneur who’s ever had this problem. There is an absolute wealth of experience around any TAB boardroom table, and I’d be amazed if one of the members hasn’t experienced – and solved – whatever problem is facing you right now.

And next week I’ll take a look at one of those problems – one that everyone building a business faces sooner or later. Until then, have a great weekend.

 

Tim Ferris and Tony Soprano


Most people reading this blog will have heard of Tim Ferris. Best-selling author of the 4 Hour Work Week, The 4 Hour Chef and The 4 Hour Body. Angel investor in and/or adviser to a host of companies including Facebook, Uber, Twitter, StumbleUpon, Evernote and others…

Ferris has been described by New Yorker Magazine as ‘this generation’s self-help guru’ and as ‘today’s equivalent of Napoleon Hill.’ (Remember him? The author of the first self-help book any of us ever read.)

But Ferris is also accused of manipulating his 5* reviews on Amazon, he’s Wired Magazine’s ‘Greatest Self-Promoter of All Time’ and The 4 Hour Work Week has been described by one reviewer as “A disquieting insight into the world of the 21st Century snake-oil salesman.”

But whatever your view on Tim Ferris, one thing is undeniable. He is hugely quotable. Like anyone who’s quoted extensively, there are plenty of clichés in the collection – but there are also some seriously valid points.

I’ve picked out four (an appropriate number!) which both underline the perennial themes running through this blog, and which are highly relevant as we finally get Christmas out of our systems and focus on our goals for 2016.

Here’s the first one:

For all the most important things, the timing always sucks. The stars will never align and the traffic lights will never all be green at the same time. The universe doesn’t conspire against you, but it doesn’t go out of its way to line up the pins either. ‘Someday’ is a disease that will take your dreams to the grave with you.

How many times have I written that – or words to that effect? There’s never a perfect time to get married, have children, quit your job or start your own business. Neither is there a perfect time to expand your business or – ultimately – sell your business. As Ferris says, ‘Just do it and correct course along the way.’

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He’s backed up by that other great business guru of our age – Tony Soprano. “A wrong decision is better than indecision.” Spot on, boss. A wrong decision can be acted upon and corrected. But as Ferris says, indecision takes you and your dreams to your grave.

What we fear most is usually what we most need to do.

A person’s success in life can usually be measured by the number of uncomfortable conversations he’s willing to have.

OK, I’ve cheated slightly by treating these two as one quote: I’ve allowed myself some leeway as they’re so similar.

How many times have you come into the office, looked at your to-do list and seen one job screaming at you? One job that’s metaphorically in 72pt font bold? That’s the job you absolutely need to do – and yes, it may very well involve an uncomfortable conversation.

What’s your to-do list look like two hours later? Fantastic. Loads of jobs crossed out. Except for the one in 72pt bold – the one that would really make a difference to your day/week/month/year. And what was Mr Soprano reading last time I re-watched an old episode? Feel the Fear and Do It Anyway.

If you are insecure, guess what? The rest of the world is too. Do not overestimate the competition and underestimate yourself. You are better than you think.

I often think back to my ‘first big sale.’ “Yes you can, Ed,” my sales manager said to me. ‘No, I can’t,’ I thought. This was a serious client: I’d only been in the job six months. It would be a two hour grilling. Complex, technical questions that I’d struggle to answer.

You know what happened. My competitors were no better than I was. He asked less difficult questions than almost any other client I’d met. I was in and out in no time. “Will you deliver?” “Yes.” “Will you look after me?” “Yes.” We shook hands.

‘Bigger’ never means more difficult or more complex or ‘you’re not worthy.’ It just means ‘bigger.’

Remember – boredom is the enemy, not some abstract ‘failure.’

Over the years I’ve seen so many people running businesses make mistakes because they were bored. Tim Ferris is absolutely right: boredom is the enemy. Now, more than ever, you can’t stand still in business. As the world swirls around you your business has to change and move forward – and you need to be constantly challenged. Beware the temptation to stand still; to think, ‘we’re in a good place, let’s consolidate.’ Boredom will inevitably follow – as will mistakes, both personal and professional.

Fortunately, there’s an antidote. I refer, of course, to your colleagues round the TAB boardroom table. A group of people that will most certainly challenge you, and who’ll give you courage – to do what you fear most, and to go through a few lights that may not be green.

The Clients You Don’t Want


Good morning – and a very happy New Year from the blog. I hope 2016 is a brilliant year for you – and hopefully there’ll be a few ideas in the next 50 posts and around 35,000 words that will help.

I looked back at how I started the first posts of 2015 and 2014. Maybe I missed my calling as a foreign exchange trader… ‘The rouble has just about reached parity with the chocolate coin,’ I wrote last year. And sure enough it dropped 26% last year thanks to tumbling oil and commodities prices.

But it’s the first post of 2014 that’s more relevant this morning. Here’s what I wrote two years ago:

So may I once again commend to you a business practice that is traditionally held to be unthinkable, but which is nearly always profitable; not as painful as you thought it was going to be and which will definitely have you saying, ‘why didn’t I do that ages ago?’

Sack some of your clients/customers. [You will have] clients who cause you grief: who don’t pay on time: who make unreasonable demands: who simply don’t bring any joy into your life.

Let me return to that theme. All of us will be under time pressure this year: however much we plan, however much we delegate, whatever productivity app we install on our phone, we’re going to be short of time. And we all know that buried away in our client or customer banks are plenty of clients we could politely describe as ‘indecisive.’

Sooner or later I have to say, “I think you’d be a great fit for TAB York. I think you’ve a lot to gain from it. Shall we go ahead?” Or words to that effect. At that point there are four possible responses.

  1. Yes
  2. No
  3. Not right now but come back to me in three months
  4. Let me think about it a bit longer

1 is great. 2 I can live with. 3 is fine – and has given me some of my best Board members. 4 is the worst possible response. A long, drawn-out ‘maybe’ is no good to anyone.

So as you start 2016, mentally run through your clients – and if ‘Mr Indecisive’ is there, ask yourself a simple question. “Wouldn’t I be better spending my time on someone else?”

But sadly, Mr Indecisive isn’t alone. He has some colleagues. Unfortunately, you’ll recognise them all-too-well.

Mr. No-Power

Years ago my first sales manager took me to one side. “You need to talk to the MAN, Ed,” he said. “What man?” I naively asked. “The person with the Means, the Authority and the Need.”

…And that fundamental still applies. Someone must need what you’re offering, have the means to pay for it and above all, the authority to make a decision. If they don’t, you’ll simply end up jumping through hoops to inflate their ego.

Mr. Sceptic

We’ve all seen the cartoon of the machine gun salesman being sent away with the words, ‘I’m too busy’ ringing in his ears.

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Maybe the modern equivalent is ‘What’s the ROI?’ All too often it’s a question asked by people who won’t – or can’t – make a decision to give themselves the illusion of knowledge.

“So what’s the average ROI on joining The Alternative Board?”

I’m sorry, I have no idea. What’s the average ROI on seeing more of your children? What’s the average ROI on finally feeling in control of your life and your business? Sceptics sometimes ask me what the ROI is on this blog. Sure, I can point to clients who have probably come to me as a result of the blog: but the anecdotal evidence – comments, engagement, reputation, influence – is far, far more important than the analytical.

Mr Overthinker

Yes, you’ve got to weigh up the pros and cons. Yes, you need to take advice and yes, you may need to run it past your colleagues on the TAB board. But eventually you need to make a decision: ‘paralysis by analysis’ may be a cliché, but like all clichés it contains a large grain of truth. Decisions need to be taken: not analysed indefinitely.

So there they are. The indecisive, the powerless, the sceptic and the overthinker. Four clients who will take up far more of your time than they should. Four characters you should be wary of in 2016. And four behaviour traits that I – and everyone round the TAB table – will make sure you don’t copy in the coming year.

Three Things You Simply Can’t Accept


I’m constantly struck by the similarity between being a Dad and being a boss.

Dan – my eldest son – is nearly 13 and fairly soon he’s going to casually slip the word ‘party’ into a conversation. A party involving alcohol, girls and collecting him the next morning…

That’s fine. It’s a natural part of growing up. We’ve all been there and we’ve all made the discovery that beer, wine and vodka isn’t a winning combination. But there are going to be rules, and they’re going to go something like this:

Wherever you are, whatever time it is, whatever state you’re in – if there’s a problem we’ll come and get you. If you get into trouble, tell us. Whatever’s happened, we can deal with it. But you have to be honest with us. We can cope with the truth: we can’t deal with it if you lie to us.

…Which brings me neatly on to being a boss and building your business. Because if you’re going to build a successful company then there are certain things your employees can’t do; that you simply can’t accept. There have to be rules that can’t be broken and boundaries that can’t be crossed.

I’m indebted to an article in Inc for giving me the idea for this post – and you can read the full version here. Thinking back to all the companies I’ve worked for and the teams I’ve managed I’ve picked out three actions/behaviours/habits that I simply couldn’t condone – and which unchecked will do incalculable harm to your business.

Dishonesty

I’m not talking about employee theft here, or companies distorting their accounts. I’m talking about the basic honesty which is essential to running any business: telling the truth, even if it isn’t what you want to hear.

It’s an exact parallel with the conversations I’ll have with the boys one day. Whatever’s happened, however bad it is, if you’re the boss you need to be told. I can think of very few situations in my business life that couldn’t be put right, providing they were acted on immediately. And very often if you do simply hold your hands up, apologise and put it right you can actually strengthen your relationship with a client or customer. But you need to know immediately: and you need someone in your team to tell you the bad news, not your client.

That means you need to create a climate where mistakes are tolerated and seen as a learning experience. It’s a cliché, but it’s correct: the man who never made a mistake never made anything.

Negativity

I won’t speak ill of him – well, not too much anyway – as he died recently. But I used to work with someone who simply sucked the life out of the office. He made the Dementors look like Anthony Robbins and he will now be complaining that his harp hasn’t been tuned properly. Or that the pitchfork is too sharp…

Most of the members of TAB York and the people that read this blog run SMEs with relatively small teams – up to say, 15 people. In a company that size one negative person can have an insidious effect and spread demoralisation like the flu.

Clearly the trick is not to hire them in the first place: the other antidote is to lead. You cannot be negative in a small team if the company is ambitious, knows where it is going and everyone is busy. And that’s your job. As I’ve said many times in this blog, before you see a client, buy any stock or worry about the cash flow your first job is to lead. It’s to say, ‘That’s where we’re going. Follow me. And if you don’t like the destination or you don’t like the pace were going at, there’s the door.”

Mediocrity

‘It’ll do’ won’t do and ‘good enough’ isn’t good enough. It takes 80% of your time to do something that’s ‘good enough’ and the other 20% to do something that’s outstanding. If you allow a culture of mediocrity to take hold it will spread rapidly through the company.

I was once in a restaurant with someone who’d built a very successful business. He called the manager over and pointed out that his glass wasn’t clean. “You want 100% of my money,” he said. “I want 100% of your attention.” That seems a fair summary: a dirty glass is ‘good enough’ – it’ll hold a drink. But in a serious restaurant, it clearly isn’t good enough and never will be.

Those are my three deadly sins from the article in Inc: there’s one more which I’ll cover in depth next week. But in your view they may not be the worst offenders: I’d love to hear your opinions. What are the habits and behaviours the owner of an SME simply can’t allow?

The Freaky Side of Things


Sorry, the headline’s a week late for Hallowe’en…

Many of you will have read Freakonomics, the hugely successful ‘rogue economist’ look at everything by Stephen Dubner and Steven Levitt. Now they’ve a new book out – Think Like a Freak – and I was reading it on holiday.

This book tends much more towards self-help than it does towards economics, and there were a couple of points in it that really struck a chord with me.

‘Don’t be too proud to quit’ was the first one. At first glance this flies right in the face of the traditional business view that nothing can replace persistence and too many people quit when they’re just around the corner from succeeding.

But there are times when quitting makes sense: when you’ve tried an idea and it simply hasn’t worked. When your startlingly brilliant insight about what the market really, really wants has – astonishingly – proved to be somewhat wide of the mark. There’s no shame in saying, ‘Fine, that didn’t work. Let’s try something new.’ And in the days of the internet and ready-fire-aim start-ups, abandoning an idea is no longer as expensive as it once was.

One of the hallmarks of the most successful entrepreneurs is the number of failures they’ve had – which they then saw as a learning experience.

But the story that’s really stayed with me from Think Like a Freak is the one about the Chinese children and their eyesight problems…

The book makes a simple point: ‘tackle small problems, not vast ones.’ Again, that seems to be directly at odds with most business advice: surely you can’t ‘keep the main thing the main thing’ if you’re off fighting small fires?

…And you can’t get a much bigger problem to tackle than the Chinese education system. Children in the poor, rural province of Gansu were underperforming at school. The cause was eventually pinpointed: their diets were deficient in iron, which was affecting their eyesight. They were performing badly at school because they simply couldn’t see the blackboard.

Two Western economists launched a programme to give the children free glasses – and their performance in school improved dramatically.

The point is very similar to one I made a few weeks ago in Small Gains, Big Profits, where I looked at the lessons business could take from the success of GB Cycling. Some problems – improving the Chinese education system; achieving Olympic success – are so huge that the only way you can tackle them is through a series of small initiatives.

I’m always pleased at TAB meetings when a member comes in and says, “We’ve saved 5% on our heating costs” or “On average we’re getting paid six days quicker than we were this time last year.” It’s pleasing for two reasons: first of all I know that if they’re making small gains in one area they’ll be making small gains in several others – and the sum of those small gains is significant. Secondly I know that someone who’s paying that much attention to detail is going to succeed.

Business is becoming ever more competitive and knowing exactly what’s going on in your company is vital – as is knowing it at the right time. TAB members will be aware of the absolute importance I attach to KPIs (Key Performance Indicators if you’re new to the blog) – but once you’ve identified your key numbers, you have to stay on top of them. It’s no use finding out in January why you missed your targets in October.

That takes me back to the beginning of this post: deciding that something isn’t working and abandoning it is nothing to be ashamed of: realising that you didn’t know the numbers and you’ve been on the wrong path for a year emphatically is.

Next week I’ll be in a more relaxed mood. I’ll be considering one of the most crucial business questions: should you treat yourself to a couple of days in a five star hotel?