The Road to 2017


Last week Keaton Jennings made his debut for England, playing against India in Mumbai.

He was dropped off the 21st ball of the day. At the time he’d made 0. Had the catch been taken, he couldn’t have made a worse start to his test career. But it wasn’t – and by the end of the day Jennings was the hero, scoring 112 – only the 19th England player to make a hundred on debut.

Listening to a recap of the first day’s play one of the summarisers made a really important point: even if Jennings had made 0, even if he’d failed in his first few innings, he still looked right. ‘We get too focused on outcomes in very small samples,’ he said.

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That’s something to keep in mind as you head into 2017. You’ve now made – or you’re close to finalising – your plans for the year ahead. You’re convinced they’re the right plans. You’ve run them past your colleagues and in January you’ll do the same with your fellow Board members. Come Tuesday January 3rd they’re the plans that will guide you through the year.

So don’t lose heart if you get a duck in January. If the plans don’t work immediately, don’t rip them up. Refine, tweak, adjust, get outside the line of off stump: but remember that the first month of the year – like the first steps in building a business or the first few innings in a test career – is a ‘very small sample.’

Anyway, the end of 2016 is approaching. You may now be tempted to breathe a sigh of relief. You may carelessly think, ‘Phew, thank the Lord that’s over. Leicester City, Brexit, Trump… Surely we can’t have another year that’s so unpredictable?’

‘Yes we can,’ is the answer to that question: I suspect there may be quite a few twists, turns and bumps along the road in 2017. Domestically Brexit will be triggered: how it will end, no-one (least of all the Government) knows. And I wouldn’t be entirely surprised to see Theresa May call a General Election next year, Fixed Term Parliament Act or not…

But it’s my colleagues in TAB Europe who’ll see their countries become the focus of attention next year. March brings a General Election in Holland with the far-right Freedom Party currently on course to become the largest single party. The French Presidential election is in April/May – the signs are that it will be fought out between Marine le Pen of the Front National and the likely winner, the right’s self-confessed admirer of Margaret Thatcher, Francois Fillon.

And then in September there are elections in Germany: Angela Merkel will seek a fourth term, but she will surely come under plenty of pressure from the right-wing Alternative fur Deutschland (AfD).

May you live in interesting times’ as the supposedly-Chinese curse has it. I suspect we’ll look back on 2017 and decide that ‘interesting’ was an understatement. So next year will not be a year to take your eye off the ball. No, don’t panic if your plans are not on track by January 31st. Even if the world changes so much next year that you need to completely re-write your original plans, remember the words of Dwight D Eisenhower, “In preparing for battle, I have always found that plans are useless, but planning is indispensable.”

What you will need to do next year is keep a close watch on your metrics: the two or three key statistics, ratios or measurements that absolutely determine the health of your business – the ‘pulse’ that I’ve talked about in previous posts.

Through December I’ve had the remarkably enjoyable job of listening to TAB members reflect on the past year: I’m delighted to say that far more has gone right than has gone wrong. Has there been a common thread running through the success stories – apart from measuring those key metrics?

Yes, I think there has. ‘Resilience’ and ‘consistency’ are the two words that come to mind: TAB members have consistently done the right thing and stayed true to their beliefs and their vision. And as a result, they’re reaping the rewards.

So 2017 will be challenging: I suspect the old PEST analysis will be wheeled out several times. But like all years, it will also be full of opportunities: and however challenging, the plans you’ve made, the metrics you measure and the support of your TAB colleagues will ensure that you couldn’t be in better shape to greet the coming year…

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…

Does Brexit Really Matter?


Friday June 24th – and today is potentially the most important day in the six years I’ve been writing this blog.

As you read this, you’ll know whether we’ve voted to remain in the EU, or whether ‘Leave’ has won the day.

I’m writing these notes on Wednesday: I hope – and I have to believe – that common sense and a vision of the UK really playing its part in the wider world will have prevailed. I hope we’ve voted Remain by a significant margin – enough to settle the issue not just for a generation, but for several generations to come.

So now let’s talk about Chinese Corporate Debt…

If you’ve given up on your football team and started supporting the International Monetary Fund instead, you’ll know that its First XI were recently playing away in China. And after a fortnight of meetings with Chinese bankers and high-ranking Communist Party officials they came away issuing stark warnings.

The source of their displeasure was Chinese debt.

You may at this point say ‘what debt?’ And on the face of it, you’d have a point. After all, China regularly generates a trade surplus of $40-50bn every month. The economy may be slowing down – but growth of 6.7% in the last quarter is something George Osborne can only fantasise about.

But the IMF believe much of this growth has been built on unsustainable levels of corporate debt – especially among State Owned Enterprises (SOE’s). These organisations produce only 22% of China’s output but account for 55% of its corporate debt – which in total, is equal to one and a half times GDP.

Why am I making this point on the morning of the Referendum result?

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For this reason. The IMF believe that the current level of Chinese corporate debt is unsustainable. If they’re right – and if the chicken comes home to roost – then there’ll be significant sectors of the Chinese economy unable to fulfil orders, unable to pay their suppliers and unable to service their loans.

Cue problems for the banks, cue problems for the rest of the Chinese economy – and therefore, cue problems for the wider world economy. And possibly, for your business as well…

So you may or may not be celebrating this morning. The question I’m asking is, ‘Will the victory for Leave or Remain be a key factor in the success of your business?’

I’d suggest the answer will be ‘no.’ I’d suggest that over the next five years other events in the political and economic arena will be at least as influential as what happens today.

Political and economic events may shape the landscape – but it’s how you react to them, how you navigate the landscape that makes the difference. As business owners we’re the masters of our destiny. The four horsemen of the PEST analysis – Politics, Economics, Social and Technological change – may make the waters choppy, but the most important factor will always be how we sail the ship.

I appreciate that the last few weeks have been difficult for many TAB York members: like stock markets, businesses need certainty and “I’m sorry about your cash flow but I can’t make a decision at the moment” has been heard all too often in the past few weeks and months.

This morning – for good or ill – we know where we stand. From now on it’s the quality of the decisions we make about our lives and our businesses that will determine our success – however we choose to define that success. But – and as always, this is a big ‘but’ – the one thing we can be sure of in the future is change. If the champagne corks are popping at Leave HQ, the British political landscape won’t be quite the same again. Then there’s Trump vs. Clinton, the continuing threat of terrorism – and the Chinese corporate debt…

What can we be certain of? That whatever difficult decisions you have to make in business, TAB York will be there to help. That seven brains are better than one: that the collective wisdom of your colleagues will help you make better decisions – and, when it’s needed, keep a sense of perspective.

So if you’re depressed by the result of the Referendum, take heart. If you’ve backed the winning side, remember it doesn’t automatically guarantee the success of your business. That will always be down to you, to the decisions you make, and the support team you build around you.

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.

 

The Entrepreneur’s Wife


As the old saying goes, “Behind every successful man is a strong, wise and hardworking woman.”

But that’s the whole point. It’s an old saying – dating back to the days when the man went out to work and the woman stayed at home. Now the chances are that both partners are working full time – and the entrepreneur is just as likely to be the woman.

So how important is an entrepreneur’s partner? Does the success or failure of your business depend not on your brilliant idea, your stellar crowdfunding or your strict control of the KPIs – but on the person you come home to at night?

It’s a subject I need to tackle – however great the personal risk! And bear with me: I’m not being sexist, but I don’t want to disrupt the flow of the post by constantly writing he/she or him/her. So I’m writing this one from my own standpoint and the pronouns are used accordingly.

First things first: being married to an entrepreneur is difficult. There are long hours, holidays that are interrupted by vital phone conversations and – as I wrote in the last post of 2014 – plenty of nights when you’re ‘there but not there’: when your body is watching Silent Witness and your mind is back at the office worrying about the cash flow.

Your wife can be bemoaning the problems one of your children is having at school, the fact that the kitchen wall is about to fall down, or the problems and frustrations of her career – when you suddenly jolt back to reality and say, “I’m sorry. What was that again?”

The bad news is, it may not improve.

Being married to an entrepreneur can put different strains on a relationship no matter how long the business has been established – and no matter how successful it may be. Different stages bring different pressures.

One day the husband comes home. “I can’t take any more,” he says. “I was determined to be at the Nativity Play this year. The boss says I have to be in Frankfurt. No more. I’ve resigned. I’m starting on my own in the New Year.”

Sadly, that may not be what the wife hears… “The dependable amount of money that goes into our account every month is going to stop. I’m going to be working a lot of late nights and we’re not going to have a holiday for three years. And there’s no guarantee it’ll be a success.”

You might not like what she’s thinking either. Oh £$%&. I was going to work part time. Spend more time with the children. Well that’s gone. Or… £$%&. That means I’m going to have to take that promotion. Longer hours, more driving, more stress, less time with the kids. But we need the money. Thanks, pal.

The decision to leave the security of a job and start your own business isn’t just about you: it affects two lives. You’re certainly changing your own career path – but you might just be changing your wife’s as well.

Three years on there’ll be another tipping point. The business has survived so far. The cash flow has evened itself out. There are even a couple of employees on the payroll. But now there’s a problem. A major customer has gone into liquidation; the business is under real pressure. Oh well, the wife thinks, if the worst comes to the worst he can always go back to Giant Corporate plc.

Across the lounge her husband is also deep in thought – and he’s worrying about two things. First of all his customer. But secondly, himself. Because he knows he can’t go back to Giant Corporate. He knows that the last three years of running his own business have changed him. In effect, he’s become unemployable. And it’s not something he shares with his wife: no wonder there’s a certain tension between them…

Ten years later it’s all very different. The business is a success. Money isn’t a problem any more. Everything in the garden is rosy. Except success can undermine a relationship every bit as much as failure. I was talking to a partner in one of our bigger firms of accountants about this. “I can’t count the number of marriages I’ve seen ended by success,” he said. “Suddenly the girl he married when he was 23…” He didn’t need to finish the sentence.

Being an entrepreneur is tough – but being married to an entrepreneur can be even tougher. Your wife needs to understand that being an entrepreneur is part of you – every bit as much as being right handed or having brown eyes is part of you. She needs to understand risk – and she needs to be able to live with it. Hopefully TAB plays its part in minimising that risk, but running your own business will always bring risk – especially if the bank are eagerly clutching the deeds to your house.

And that’s why your work/life balance is so important. As I wrote a couple of weeks ago, when you’re planning your diary for this year, get the really important dates in first – the dates when you’re with the people you love. The entrepreneur’s wife pays a high price: make sure you repay her in full.

The Time to Take a Risk


There he is – at the high stakes poker table. The four, six and eight of hearts are face up on the baize. He’s all in. Surely he can’t have the five and seven? Can he? You’ll have to pay to find out…

There he is again. York races. The horses flash past the post. Was that the slightest of smiles? That’s between him and his bookmaker…

Seven o’clock the next morning. As always, the first one into the office. A bank of computer screens. Stock market prices, foreign currency exchange – and the production figures from his factories; the sales figures from his shops. He finishes his black coffee, takes his tablets and settles into another high-risk, high-pressure day. Another typical day for an entrepreneur…

That’s the popular perception of the entrepreneur – someone who loves risk, who needs the adrenalin rush from risk, who even goes out of his way to create risk where none exists.

That’s the popular perception – and in my experience it couldn’t be more wrong.

How can I possibly say that? After all, I run my own business. Most people reading this blog run their own business – or at least have a significant portion of their future prosperity tied up in the success of the business they’re managing.

We’ve all taken risks. We’ve given up the security of the corporate world for the doubtful joy of working until ten o’clock at night and wondering why the person you thought you’d developed a relationship with hasn’t paid his invoice. Maybe some of us have had to tell our families that Christmas won’t be quite so spectacular this year – and spend January explaining to the building society that they’ll need to be patient…

There’s nothing more stressful than running your own business. You put your wealth, your health and your psychological well-being at risk.

But that doesn’t mean that entrepreneurs enjoy risk – and it certainly doesn’t mean that they go out of their way to create risk.

In my experience, the vast majority of entrepreneurs I work with would class themselves as being ‘risk averse.’ And as I wrote last week, that’s one of the key strengths of The Alternative Board – the collective wisdom round a Board table goes a long way to reducing risk, to making sure that you’re aware of all the possible downsides before you press ‘go.’

But there’s something else I notice as the discussion on risk goes round the table. Entrepreneurs define risk differently to other people. The entrepreneurs I work with see a different type of risk. Let me explain by taking you back to Newport Pagnell service station…

I’d finished another identikit motorway breakfast in another identikit service station – and I’d decided to leave the security of the corporate world and start my own business. Doing what? I didn’t know at that time. But come hell or high water, I was going to be my own boss. That meant saying goodbye to security, to my company pension, company car and all the other trappings of being a few rungs up the executive ladder.

And conventional wisdom dictates that I was taking a huge risk in giving all that up.

But if I didn’t start my own business there were far greater risks. Risks I simply couldn’t accept any longer.

The risk that I’d never know if I could have succeeded on my own.

The risk that I’d never really fulfil my potential.

And above all, the risk that someone else could dictate my schedule – and that I might miss seeing my boys grow up.

Almost everyone reading this blog will be able to identify with that. It isn’t conventional risk that the entrepreneur fears. ‘No money? Fine. I had no money when I started. I’ll start again.’ It’s the risk that can’t be quantified. It’s the risk of not fulfilling your potential, the risk of missing your children growing up and, above all, the risk of never knowing if you could have done it or not…