Jeremy Hall – Confessions of a serial entrepreneur

Normal and special days

When I started this blog, I had the expectation it would help make every day a special day. I really wanted to have something exciting and different to write about for three years, to show myself – and prove – that we were building a great business. One thing that has been hard to deal with is in life is that many days are just “normal” days where nothing outstanding actually happens.

My colleague summerised this quite nicely the other day, “you have to have normal days for special days to exist.” He is right, it does not matter how much you want to drive your career forward and achieve something in life and to have those special moments, you have to have days when you mop up the admin and get “stuff” done. As you close the office door at 6:00pm on a normal day, you are one day nearer to a special day.

Does it really take 15 years to learn how to buy and sell cars?

I am looking forward to going to a car auction and seeing how these places operate. I have no interest in buying and selling cars for a living or moving into this market, but I am fascinated how people make a good – or even a great – living out of buying and selling cars. Mr. “Smooth Booth” has been going to car auctions for years and only ever buys one type of car. (It would be disrespectful to say what type or how he makes his profit.) He knows exactly what to buy, how much to pay, what it will sell for and how to sell it. The business model is so simple I am surprised that everyone is not doing it. BUT, we all need to remember the big lesson in business, it might sound simple and probably is, BUT as he said to me “it has taken me 15 years to learn this trade.” He is not joking, he has been there, seen it, bought cars that have made a loss and in some cases not sold for months, I would imagine he has been ripped off and bought the odd stolen car by accident. His extensive experience protects him from most of these mistakes now, it is why he will make a profit and other novices will lose money.

That aside, I did hear of a person who every month bought one car at auction and sold it. This particular individual made £24,000 a year to supplement his salary. He always treated it as a side line and never deviated from his simple plan of buying and selling one car every month.

Time to make a profit on our company car scheme

My new sales person starts on Tuesday. Being without a mode of transport (him not me,) I have promised to buy him a company car. In the days of running Wyse Leasing, we managed to build up a company fleet of 42 cars. It was only when I was signing of the £1700 yearly AA bill that I realized the extent of our company car policy. Suffice to say, over the course of the next three years we reduced our exposure to one car, and that was for the same person who is to start back with me next week.

Why you ask am I giving him a car? He was the only person who really respected his company car. He cleaned it twice a week and treated it like his own. So be it we do not operate a company car policy anymore, I have made an exception for him.

How times have changed. We used to buy or contract hire a brand new car, usually to a reasonable specification. Cost was never an issue. Now, I work on a much lower budget and will buy the car at auction – with the help of a highly experienced auction buyer. (I am fully aware of the pitfalls from buying a car from an auction and would never previously have looked at these places as a source for a vehicle.)

According to my highly experienced auction car buyer – he happens to be my next door neighbor – we should be able to buy a car, use it for six months and then sell if for what it cost us. You never know, we might even make a profit out of it!

How much is an apology worth?

I have drawn a close to the case against Mr. Non-Existent. We have won, he eventually worked out he was in the wrong and instigated communication to end his mess. No one just gives up, they seek to mitigate their expose by negotiation. Mr. Non-Existent was no different; he tabled his arguments shifting some of the blame to the bank involved in the transaction.

By sticking to our plan, we made more money out of the deal than we would have last October. But as I have noted earlier in this diary, it was never about the money, it was about standing up for our rights against a lunatic. The time and energy needed to bring a case always out way’s the financial gain – my advice here is simple, do not take legal action unless you really have to.

I offered him an olive branch and said we would issue credit notes to the value of £200 in exchange for an apology. He apologised and the case is now closed.

It makes me think, what is the value of an apology in business? When a supplier makes a mistake or lets you down, this can potentially have financial implications on your business. Do you ask for compensation, and if so how much? Is there an expectation that you should get the product/service for free or at a reduced price and should you get an apology? If the situation is just a mistake and the person involves offers their profuse apologies, for the majority of people that will do the trick. There somewhere must be some correlation between the extent of the apology and the financial loss involved. Be it Mr. Non-Existent did apologise, it was a weak apology. If the sums were £2000 and not £200, I probably would not have accepted the apology.

Focus on the profit I say…

As Focus DIY collapses into administration, I read about the history of the company. Founded in 1987, it started life by acquiring Choice DIY, a Midlands based company with six stores. Over the next ten years they expanded to 72 stores via organic growth before buying Boots Do It All. In 2000 they acquired Wickes and Great Mills. Meanwhile Payless (which was owned by Boots) combined in a joint venture with W H Smith in 1990. Elsewhere, Texas was sold to Sainsbury’s Homebase.
I remember those brand names, Choice DIY, Focus, Do It All, Great Mills, Payless, Texas and now all of them have gone. It is no different to Wyse Leasing, a brand we developed over 20 years and once sold, the trade name was dropped.

You do not develop a brand for the brands sake. You spend the money on marketing and brand development (product and company awareness) to make sales of your product/service. OK, this may be done by affiliating your brand with value, customer care or quality service, but ultimately it is all about sales, and profitable sales at that.

I meet people so attached to their company name and obsessed with “brand” development. Ultimately if you sell the business and exit, there is a high chance that brand name will be dropped. Better to focus on the sales and profit I say.

Time to dispose of a few assets

Real entrepreneurs develop an idea, build a business then either sell it and move on or drive it forward for income and capital growth. Now there are deviations of this, the entrepreneur may buy a company or invest in a share of another company to name a few. Regardless as to their method, they have to invest time and money into the venture often before the financial rewards come. I a mostly interested in capital growth, building or buying a company where we build value and sell it at a later date, the focus being on capital gain. However, with three boys in private school and an expensive lifestyle, a regular income is not far behind capital growth.
It is with this “income” strategy in mind that we set up two cottage industry lifestyle companies last year, Reward Success and Meeting Books. The plan was simple, set up a business that can provide a modest income as opposed to focusing on building a large highly profitable company where it could be sold for £1m plus in three years. It has not worked out. Even with access to the Who’s Who customer base, these companies are just scraping by and be it are profitable, without further work will not reach the minimum income needs that I would expect. So the outcome is I have decided to sell the business.
There is no point trying to sell them for an unrealistic figure. The value is a couple of websites, some equipment, stock and a small customer list. It will be priced at under £7500, a figure where someone will see a return in a short timeframe. The job now is to find a buyer.

Important but not urgent

I go from meeting a rock star to spending a day sorting out my garage. It is not the best use of my time sorting out a garage, especially when we have a lot on the go at the moment. Tidying up a garage is a task any normal person will do on a weekend. However, this task is somewhat larger.

When we moved office, we successfully managed to reduce the volume of items taken to our new premises by 50% and relocate the other 50% in my garage. I hate clutter and there is nothing worse than having a sales office full of old files, redundant computers and other rubbish that just take up space. In the spirit of saving money, we did not rent storage space, we simply took over my triple garage at home.

After removing everything in the garage, we repainted it internally and reorganized where everything goes. Along the way, there were few interesting observations.

1. I went out and bought Sugar Soap and an extended pole for painting only to find we have both these items already. It is not the cost here but the principle, how many times do we waste money in business on items where if we were better organized in the first place, we would not have to buy them?
2. We managed to reduce our footprint of space needed by over 50%. So many companies I visit have a large footprint  of office/warehouse space that is just not being used effectively
3. By reorganizing where things are and aggressively throwing away items we do not need, we are organised and will work more efficiently.

 Tidying out a garage is one of those jobs that just gets left, falling into the category of important but not urgent. In business many tasks fall into this category, you just have to get them done. As my example shows, completing them will save time and money in the long run.

Only a rock star can wear florescent green trainers in a top hotel

As I walk into The Landmark Hotel in London yesterday, I look around to see one of the world’s most famous people behind me. Ronnie Wood glides past and gets escorted to a table where the waitress is quick to serve him. “I’ll be right with you” the waitress says, noticing me waiting. Well I was here first I thought to myself as Ronnie accidently queue jumps.

I notice a couple of champagne glasses turning up at his table whilst I am ordering my English breakfast tea for two. Settling down into the meeting with the person I am meeting, we talk through his options now that he has just been made redundant. He I fear is just about to enter his own “Managing Directors wasteland.” He will find that his mobile phone does not ring as much and for every ten calls he now makes, only a handful will be returned. For me, It is worth taking the time out with him. This individual has helped me out in the past and I am very confident he will have a successful career in the future. Investing time when he is down on his luck will pay dividends in the future. Why do so many people in business not realize this?

As I come to pay the £15.00 bill for two teas – it makes Starbucks look cheap – who should decide to leave but my new best friend Ronnie. He makes no fuss, he just glides out of the hotel smiling to us on his way out. Whether he was looking at us was another matter, we could not see through those mandatory sunglasses. I can only assume he wanted to come over and say “hi,” but realized I was in a meeting and thought it too rude to interrupt. Outside the hotel, he lights up a cigarette as I walk off, practising this new style of “gliding.”

Who do you call for advice – me!

I regularly get asked for advice. What do I think about a business idea?, do I know any jobs going?, can I help out with a certain problem, the list goes on. Some entrepreneurs will dismiss these conversations, thinking they either do not have the time or are above this.

Today is no different. I receive an e-mail from a person who is just about to go through redundancy consultation and meet with another person who is looking for a job. I respect both of them, they have worked out the basics of business life, it is about who you know. Meeting the person who is looking for a job, he mentions two successful companies, both of which I know. The world really is a small place.

Later in the day, I take a call from an ex-MD of a well known company. Over the last couple of years he has been taking a break and reforming his business. We have met for lunch about four times during this period and I have called him at least every three months. He reminds me I am the only person who has done this during that time. All other suppliers/customers have just dismissed him.

So it was no surprise when he phoned me today to say he was back in business and I was the  first person he had called. I am amazed at the naivety of my competitors, they must have also seen he is a successful person who will set up another business in the future.

So what is the lesson here, what is the moral? You can work out for yourself who is successful and who is not. Catch hold of the belt of successful people and go along with the ride – even if the person is down on his luck or just taking time out.

Cash – the biggest problem in business

I should know, I lend money to companies and see first-hand the challenges faced in business today. And by far the biggest challenge is access to cash. Where has all the cash gone over the last three years? The country was awash with “lolly” and the more there was the more people wanted to borrow.

Business and personal debt – on average – is being paid down. Banks do not lend as much and companies are tightening up their credit control and holding onto cash. What really gets me is the abundance of individuals I know who were very wealthy (assets and cash)and now are just wealthy (assets and no cash.)

There are numerous great opportunities for any budding entrepreneur to grab hold of. Unfortunately, there are a limited number of people who have the cash resources to invest.

I have been on an investment mission over the last few months in our leasing business, WestWon. The business has been like a car that has not had a service for a few years, in urgent need of attention and repairs. (Our web site has not been updated for about three years, our fileserver is at 98% capacity, we have not refreshed the sales team) Our challenge like many other companies is finding the cash. I will not go to the bank, most of the investment in marketing and sales cannot be financed via a leasing company and to be honest, the last thing on my mind is taking on any more debt. So, we raise the cash by sales and tight financial control.

You could argue that now is not the time to invest, keep the business small and profitable. I think the opposite, now is the time to make a run for it whilst the competition is asleep, we just have to take the short term cash flow pains.