Jeremy Hall – Confessions of a serial entrepreneur

Month end

We have probably had our best month in the last three years.

1. We have raised in June about as many sales invoices we raised in the previous three months
2. The prospect list is being maintained at a healthy level
3. We have made massive inroads into a number of projects on the go
4. We have made sales in our new divisions
5. We have recruited three new people

Leaving work for the day, I do not feel ecstatic. I am not scared of investment, taking risks, recruiting people.  I know that not all our ideas will work, but to be successful you have to drive the business forward. We are driving forward, but what holds us back are the constant demands on cash. We have generated cash this month in excess of our overheads, but it gets sucked out of the business so incredibly fast. To make matters worse, we still have a little line of these “dementors” waiting outside my door to be fed with more “lolly.” They are all behaving themselves waiting in line, but it is draining and time consuming when you have to leave them there.

Like many business people, we will have a successful and profitable year and cash flow is forecast to improve.  Again, like many companies up and down the country we are rebuilding, reducing debt, recovering from previous years of the early recession. The frustration is that with only 2 ½ years of my journey left to go, time will start to run out fast.

Parents in business

Recently, I have been leaving work early on numerous occasions due to personal family commitments. Today it is Sports Day, the yearly obligatory event that is sacrosanct. Later is it picking up and drop off at swimming.

I call the person I was to meet in the afternoon to cancel our meeting at very late notice. It is less aggravation than not turning up for “cricket ball” throwing and the 100 meter sprint.

Many successful business people “peak” in their late 30’s. I am sure one of the reasons is there family commitments have not kicked in yet.

Competition

Continuing with the theme of training, I have taken a big look at competition. For most business owners this is a simple subject.

1. Research the competition
2. Undertake a credit search on them, look at their website
3. Document the competitors in the business plan
4. Detail your USP’s and their weaknesses

Clearly that is the first place to start. Successful entrepreneurs will look deeper. The meeting book and recognition plaque business is a small simple business, the competition is easy to find and evaluate. To make matters worse, customers can search them quickly and easily on the web.

I have taken a completely different approach when training on competition. Our competition is;

1. Apathy / the customer just does nothing
2. The customer cannot see the benefit compared to the cost
3. The customer cannot think of a NEED or does not have a NEED
4. A standard non personalised note pad
5. Other forms of corporate gifts

Looking at a personalised meeting book we have documented other companies that produce a similar product. We know the market price and differences in the product.  Our key objective is to win against the real competition, the list above as opposed to battling it out with companies that supply a similar product.

Mr. Big’s brother

I had lunch with Mr. Big’s poorer brother this week. I say poorer, but he did find himself in The Irish Times Rich List this year.

As we turned up at the gourmet pub, I noticed that his Aston Martin DB9 had under 10,000 miles on the clock, less than 2,000 for every year he has owned it since new.

Mr. Big’s brother is one, if not the, most positive people I know. Always, happy, he always has a very positive outlook on life. He has a real belief in himself and that he will succeed, never a doubt in his mind that things will not turn out well.

Turning our attention to sales, like me, whilst he strongly believes in the benefit of the internet and web, you still need people to sell either face to face or on the phone. “These are the snipers that pick customer off” he said.

We can all write a list of what makes a successful entrepreneur. Near the top of that list will be mixing with other successful like minded people.

A key message to entrepreneurs

As George Osborne delivered the toughest budget in over 30 years, the Country now is getting the time to digest the effects and potential outcome.

Leaving aside VAT increases and Government cuts, which for the record are needed, I turn my attention to three key parts of the Emergency Budget.

1. An entrepreneur/Director who does own over 5% of shares in a company for over three years can now make a lifetime capital gain of up to £5m and only pay 10% tax. This was £1m and then increased to £2m more recently under the Labour Government. What an amazing incentive for all British business owners. It is the biggest message of “Go and get on your bike” I have seen since the Thatcher years.
2. Corporation Tax rates are going down, ensuring we have some of the lowest rates in Europe
3. Tax relief on acquiring capital equipment is decreasing significantly from April 2012 – great if you run a leasing company.

Point one and two above clearly illustrates the Government are backing business people. It is a clear message to us all – we will reward you with a very low tax rate if you can successfully build, develop and sell a company for a profit.

Point three does reduce the benefit of buying capital equipment in a business – but does help leasing companies sell a lease rental agreement.

Lunch with a Prince

Our second networking lunch took place yesterday at Cliveden. It was a very relaxed and enjoyable lunch, the conversation mostly being outside of the business arena. Successful business leaders and entrepreneurs typically find it easy to talk about a range of subjects and the people with us yesterday certainly fitted into this mold.

I had a very fascinating conversation with a HRH Prince from an African state. Not only does he keep a palace in Africa, he has also has developed a very successful company in the UK over the last twenty years.  His business associate who joined us was off to see the Queen later.

The Who’s Who brand gives us the ability to network at high levels. In a social environment, we are able to get access to business owners, Directors, Chairman and even Heads of State – a position I am sure many entrepreneurs would be very jealous of.

Key now is what we do with these relationships.

NEED

NEED is an important part of my training schedule. Why would someone/a company need a personalised meeting book or plaque? It is not like they need a new computer, a loan or have to relocate to larger premises.

There are many reasons why they might not need our products, the hardest thing is finding the reasons why they do.

NEED is an interesting subject when dealing with non essential products, or companies that supply a product that could in effect be replaced with a completely different product. An example here is our personalised meeting books serving the corporate gift market. You could just as easily give a bottle of wine or a diary as a gift, so why would someone need our product?

We have to create the NEED or at the very least, create the perception of NEED. It is a simple sales process with its foundations in researching the customer, their market sector, challenges they face, the competition they have. (The list here does go on)

It is only then that we can find reasons why they need our product or at the very least are prepared to refocus time and financial resources to our products/company as opposed to someone else.

Evil starts at the top

I called Mr. Cool who I though may know of the company Mr. Evil worked for. “Don’t touch them with a barge pole” came the very quick reply. Mr. Cool then went on to educate me on the company that Mr. Evil worked for. The evil started at the top with the business owner, a nasty piece of work with a bad reputation.

Earlier in the week, I was involved in a conversation about a well known low cost airline. It was universally agreed that the CEO was also a “nasty horrible person.” This attitude is prevalent in many facets of their business; the pricing policy, the attitude of the staff, the way they deal with complaints, the general feeling they do not give a dam about the customer.

Alternatively, you can take a company in an identical business sector with a good decent person at the helm. This behavioral trait filters down through the company with the staff being pleasant, the business operating in a fair and professional way.

Culture and values in any organization typically come from the top. It is just as easy to be a decent honest person as it is to be a difficult obstinate individual. Be it the end results may still be the same (I will qualify this and say a profitable successful company), the sun always shines on the righteous.

Mr. Good and Mr. Evil

Purely by coincidence, I took two inbound calls within a space of a couple of hours yesterday. Both were from telecoms dealers and the subject of the conversation was identical. They wished to discuss their customer’s end of lease arrangements from a customer base we purchased where the company that sold it to us was later put into administration.

Even before I took Mr. Evils call, I was warned by reception that he was aggressive on the phone. Mr. Evil was quick to explain what we were doing was wrong, “I have a contract with your company” he went on.  I could just visualize him in his office with a few people listening into the conversation as he tore into this poor helpless chap as the end of the line, i.e. me!

Mr. Good called later. He calmly explained his situation and asked for help. I did not have to say to Mr. Good that his contract was with a company that does not exist anymore, a comment that was needed with Mr. Evil.

Later this week, Mr. Good will hear the good news, we will do our best to accommodate his request.  As for Mr. Evil, well I will be expecting the letter from his solicitors on my desk very soon.

Train the Team

The majority of small companies will not invest enough time and financial resources into training employees. Business just gets in the way. Larger companies like Xerox and IBM often will spend six months educating a new employee before they even get near a customer. That is one of the reasons why Xerox and IBM employees have been so highly regarded in the past.

At Wyse Leasing, we had a team of 75 and five offices, and most importantly, a very good training schedule. There was a period of time when we even employed a full time training manager. I remember once taking a new team of four and putting them through four weeks of intensive training. At the end of it one of them resigned. It was just too much for him. On the last day, if you asked him what does one plus one equal he would had said anything other than two.

Was this a bad thing? I believe not. Training not only builds the teams skills and gives them confidence, but also flushes out people that feel they are not capable of the job. If my memory serves me correct, I also believe another one of the four left fairly soon afterwards sighting the reason that leasing was not the correct career for them. I would rather lose 50% of the team early on knowing we have not put them into a customer account and gone through the big cost of salaries.

The ratio of preparation to training must be at least three to one. i.e. You invest three hours of preparation for one hour of delivery. The total investment in time and resources for any company will be big. I for one know that over the past few years, running a much smaller company than I am now, the investment made has been significantly less than what was required.