President Kennedy is famous for setting the target of getting America to the Moon by the end of the decade.
It was the swinging 60s and against all odds the US succeeded. It was a fantastic achievement, and even now, looking back it seems incredible. The key was that while the target was a stretch, it was do-able. Also, President Kennedy didn’t confuse things with a pile of other challenges.
This episode is full of lessons for business strategy. In business we need to set realistic targets too, they motivate us and they force us to focus on the things that really matter.
For targets to succeed they need to be pursued consistently over time. That means they must be really well thought through before they are set. Bad targets, or ones that get changed frequently, are of no value at all. The macho style of management that sets an unrealistic agenda and then pushes people beyond breaking point is also plain bad management. The real benefits accrue when targets are important, realistic and clear and are then pursued in a single-minded way.
An example of a good target might be to “increase our repeat business as a proportion of sales to 40% by the end of next year”. This target is measurable and is set within a clear time scale.
Once a target is set, a plan must be created to enable it to be met. Then the whole company needs to be aligned around the target and the plan. The best way to achieve this is to involve a wide range of people in the original target setting and planning exercise.
Unlike the Moon shot, it’s not rocket science. It reminds me of the saying “blessed is he that aims for nothing, for he always hits his target!”
Are we all aiming to land on the Moon? Probably not. But having a realistic goal is the first step in achieving business success. It’s well worth some deep consideration.
Chris Barling, SellerDeck
More and more people are making purchases online but not all businesses are making the most of their ecommerce sites. And if you’re not making the most of your site, you’re not making as much money as you could be. Here are my four tips for creating a more effective ecommerce site so customers buy from you and keep coming back…
Customers will only buy from you if they trust you. So, if your site is 100 per cent secure, you need to make your customers are aware of it.
An SSL (Secure Sockets Layer) certificate is great way to do this. It prevents information entered on your site from being seen by third parties and shields it when it’s transmitted online.
When you're viewing a site with an SSL certificate, most web browsers display a padlock so you know the connection is secure. Also, the address of the web page will normally start with https:// instead of http://.
The certificate can be obtained from SSL providers such as VeriSign™ and most web hosts. If you want your customers to trust you with their credit card numbers, addresses and other sensitive data, get an SSL certificate.
The copy on your website is your chance to communicate with customers and it will either influence people to buy from you or make them go elsewhere.
More often than not, readers will scan your site and only take notice of your headings (and sub-headings) so you need to make them informative as well as enticing. Use phrases such as ‘Lose weight in seven days!’ or ‘How to get free PR – it’s easier than you think‘. They promise useful information and tell the reader what is in the body copy.
In the body copy, don’t just describe what the product or service does, tell customers how it can benefit them. Keep it short and concise – using bullet points can make benefits easier and quicker for customers to digest, too.
For body copy and headlines, be sure to use key phrases that are relevant to your site, products or services to help your search engine rankings. Whether you’re allowing popular search engines to rank your site organically or paying for online marketing campaigns, your body text and headline phrases need to be clear and consistent – without repeating yourself too often or filling a site with similar keywords.
Convincing visitors to buy is hard enough, so the last thing you want to do is deter them with anything that might get in their way, such as a lengthy checkout process.
Focus on making your site as professional and simple to navigate as possible. You need to make it clear what your customers need to do and where they should click next. Don’t be afraid to use big buttons, arrows, text or anything else – as long as they look nice.
Don’t ask for unnecessary details from new customers, and returning customers should benefit from having most of the form fields filled out already. They should only need to put in the payment details at most – Amazon has introduced one-click purchasing to make it super-easy to buy from the site.
Looking after your customers should start before they make a purchase. It should be easy for customers to find the information they want. Forcing a visitor to register just to see shipping charges is likely to put them off, and you should clearly state whether your prices include VAT, just so there are no surprises at the checkout.
Post-purchase contact is always important, too. People hate it when sellers take their money and seemingly disappear. A simple “thank you” email with support details is always a nice touch and if you include a discount for the next purchase (or some other benefit), it’s even better.
More and more consumers are turning to ecommerce because it’s safe, quick and (hopefully) easy. This makes it more important than ever to create an ecommerce site that work for both your business and your customers. Use the tips above to improve your ecommerce site and start making more sales now.
Dale Cook, Serif
In a difficult economic climate, small businesses are understandably looking to make savings wherever possible to help ride out the recession. Savvy SMEs can make significant savings on their utilities bills where, on average, businesses can save more than a third on their current outlay – equating to an average saving of £1,121 per year on electricity and £1,230 on gas rates alone.
Each year, small businesses lose close to £2bn by unnecessarily paying over-inflated energy prices. Yet despite this, only a handful of businesses regularly monitor their energy outlay and switch suppliers to receive the best deals.
So why aren’t more companies switching on to the savings that regularly shopping around for the best energy deals can deliver?
If there’s one thing that puts small-business owners off switching utilities provider it’s hassle. Switching is generally perceived as a complicated, time-consuming process and owners are often too busy running their business to hunt for the best deal.
It’s easy to see where this idea has come from, as our energy providers certainly don’t make it easy for businesses to switch their supply. Unlike domestic users, SMEs are subject to assumptive renewal contracts that only offer a limited window of opportunity to switch suppliers before being rolled over onto a new contract at a higher rate. This means there is an incredibly narrow period (sometimes just 30 days) in which to act – something that’s easily missed by time-poor SMEs. In fact, industry regulator Ofgem has long called for action to enforce measures aimed at simplifying the switching process.
It’s a confusing process and one that’s made worse as each energy supplier has different, and often complex, rules about renewing your business electricity or gas contract with them.
While businesses might think switching suppliers can be a hassle, the reality couldn’t be further from the truth – especially if you ask the experts. Specialist advisors can guide businesses through the utility minefield, comparing prices and helping to find the best deals.
We’ve tried to remove even more of the hassle by creating a free online tracking tool to help small firms check when their contracts are up for renewal, as well as an automated notice letter generator to make the process even easier.
Jonathan Elliott is managing director at Make It Cheaper
If I had a pound for every time I’d suggested a client or prospective client change their headshots I’d be very rich.
Your ‘headshot’ (ie a portrait image of your face and head) is one of the most powerful tools you have at your disposal. A great headshot will communicate professionalism, enable people to engage with you and actually help raise your profile. If you have one of those headshots that people tell you they’d never have recognised you if you hadn’t been wearing the name badge, it’s a sure sign you need to think about speaking to a photographer – and fast!
Let’s think for a moment about why people look at portraits in a business sense. They want to see who the person is behind the business. They don’t want to see you with a silly hat on or you in your favourite bar – they want to see the professional person they’re going to be dealing with. That means that your photograph must fit your brand.
Start off by making a list of how you’d like your ideal customers to perceive you professionally (in my case, approachable, friendly, creative, warm and professional). Now take a look at your photo – does it communicate those things? Chances are – if you’re at a party or a wedding it probably won’t be – you need to invest in a professional headshot.
Secondly, how are you posing? My brief for headshots is always look at the camera, look relaxed, welcoming and engaging. You want your photograph to make you look as approachable as possible. Now, if you work for a law firm, you’re going to need to put the emphasis on formality and professionalism. And if you’re in an ad agency, you will naturally need to look more relaxed and creative – but you should look like you.
Which leads me on to point three. Why this obsession (particularly amongst creative agencies) to produce illustrations/ baby photos/ school photos? Sure, it might look a bit funky, a bit cool, but I’ve clicked on your profile because I want to see who you are. An illustration doesn’t cut it for me. I’m not going to recognise you at a networking event. And – you’re missing a trick.
Finally, and this is so important if you have a team, get your photography done by the same photographer so that images are consistent. I recently worked with an estate agent on some marketing mentoring and this was one of the first things we addressed. Three people in the team – two pictures in colour, one in black and white. One very formally posed with a suit on, one in a nightclub and one at a wedding. That doesn’t suggest “cohesive team”.
Fiona Humberstone, Flourish design & marketing
It may sound blindingly obvious, but by focusing on customers' needs when you design your website you stand the best chance of creating a site that customers will want to visit.
However, this can be easier said than done. Unless you really understand what customers want, you run the risk of creating a website that drives customers away rather than attracting them.
Carrying out some research before you start can help you identify what your customers really want. You need to know:
Ask yourself who your audience is. Are they current or prospective customers? Are they individuals or businesses? Where are they located?
Customer records can answer some of these questions but if you want to profile online customers there are some great online tools you can use. Tools like HitWise and Alexa can help you profile the people who visit your site, your competitors’ sites or even your industry as a whole.
If you’re updating an existing site, answering this question is simple. There's a host of free and paid for web analytical tools that can give you a detailed picture of how customers behave online. Free tools like Google Analytics are simple to use and can help you identify who visits your site, what they look at, how long they spend online and which visits lead to sales.
Analytical tools can also help you identify what doesn't work, where potential customers drop out and the pages that generate complaints.
If you are launching a site from scratch, you could start by looking at your competitors' websites. What do they provide? How does that compare with what you offer? Do your customers use competitors' sites? What do they think of them? What works and doesn't work?
The best way to answer these questions is to ask customers directly. You can use online surveys like 4Qsurvey, send out questionnaires or carry out face-to-face interviews.
Getting feedback directly from your customers will help you hone your site to their wants and needs. It will also demonstrate to them that their needs matter to you.
Remember to ask customers what they might want to do in the future. Technologies are constantly evolving and your customers – particularly business customers – may be developing new systems and technologies that could help give your site a competitive advantage.
Put yourself in your customers' shoes. How easy is it to complete online tasks? Is it easy to find what you are looking for? Is it obvious what steps need to be taken to complete a task?
Eliminating usability issues will help you maximise sales and reduce the number of people who leave your site without completing their task.
There are plenty of experts that can review your site for you. Alternatively, you can use one of the many online resources like this great usability guide. It gives hints and tips on how you can do your own usability testing. But remember that you should be testing with actual customers in mind.
Once you know what your current and prospective customers want from your site, you can start to define the site’s structure, look, content and feel.
Remember: it’s not enough to only think about customers' needs when you build your website. To ensure that your site remains customer focused, you must continually review your web metrics, talk to your customers and develop your website accordingly. In doing this, you’ll create a site that your customers will return to again and again.
Ewan McIntyre is the web implementation manager for Sage UK
This blog is a reworking of a blog that featured on the Sage blog
In January 2011 David Cameron announced an ambitious plan to support the establishment of up to 40,000 new enterprises through the New Enterprise Allowance (NEA).
Under the new scheme people will continue to receive a weekly allowance for up to six months while they set up their enterprise. They will also have access to a low-cost loan of up to £1,000 and are provided with mentoring. The NEA has been generally well received, though there were concerns about how it would be implemented and whether it would actually achieve the desired outcomes.
I met with Chris Grayling, Minister of State in the Department of Work and Pensions (DWP). He explained that the NEA was the result of their manifesto promises to get Britain working by helping more people become self-employed, especially those on unemployment benefit.
This is part of the government’s Big Society initiative, to encourage successful business people to volunteer their time and share their expertise to help the next generation of entrepreneurs. The key challenges of the NEA were first in finding these mentors, and then managing the process without becoming bogged down in red tape and expensive process.
The DWP devised a very simple pilot programme rather than just farm out the work the NEA to the usual suspects traditionally selected to deliver government services. A short application process was announced, requesting a ten-page pitch within a few days for a trailblazer in Merseyside worth around £100,000. The winner was a consortium of seven local chambers of commerce.
Kath Boullen is chief executive of St Helens Chamber, a thriving hub of enterprise providing support to its members with expert advice, business information, serviced offices and networking events. The chamber also provides other very valuable local services, including working with children excluded from school.
Boullen and her team approached their members for potential mentors and provided a two-hour briefing. This explained they would be expected to provide their mentoring for free, inspired by the model operated very successfully by The Princes Trust.
So instead of the usual monolithic service providers delivering yet another moderately successful government initiative inefficiently and at huge cost, the NEA works through local volunteers providing simple advice because they want to help others, rather than for financial gain.
Early indications are that the trailblazer is working much better than expected. Boullen explained that only around seven per cent of those referred by Jobcentre Plus fail to attend the first meeting, a dropout rate less than a commercial seminar.
Of those who have attended, over 80 per cent were deemed to have an idea worth pursuing. This judgement is based on whether the mentor feels inspired enough to continue helping the budding entrepreneur, rather than weighing the number of forms they have filled in or counting the number of spreadsheets in a business plan.
The NEA will be extended to 17 more districts in the next three months and will be available nationwide in August. It is still early days for the programme, but several new businesses are already up and running, and over 300 more are in the pipeline.
In June, the DWP will launch The Work Programme, billed as a results-based initiative aiming to help 2.4 million people get back to work. Some familiar names are in the list of successful bidders and my hope is that they will continue to make the provision of free mentoring a cornerstone of their delivery.
The first rewards for a successful entrepreneur include financial security and an improved quality of life. Later, there is an added and often unexpected bonus: the opportunity to continue their own learning by themselves becoming unpaid mentors.
Originally published in The Financial Times. Copyright ©Mike Southon 2011. All Rights Reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker.
I thought building a business was tough, but trying to get insurance for an online business is ridiculously hard.
The business insurance industry appears to be hiding behind the sofa from the 20th Century (the 21st Century must be a scary nightmare). It doesn’t seem to know how to insure ecommerce businesses – it definitely doesn’t know how to assess the risk.
They’ve actually quoted me more to insure £10K of stock than I pay for buildings and contents insurance combined! Explain.
They don’t have an insurance policy product for e-comm home workers. I know it’s a new industry, but come on, it’s as new as mobile phones. It’s been around for 10+ years, so they should have had specific products for it at least five years ago.
Isn’t insurance based on understanding risk and on history of that risk? Seems not to be the case any more.
Small businesses are here to stay and a lot of them will be on the internet selling stuff. Business forums are filled with people asking where or what business insurance to get and where to get it cheaper.
Insurance is about assessing risk – likelihood of a claim, and based on the historic claims. I don’t see this happening here. Where are the underwriters who used to make decisions and make a note on the policy file – we can’t do that now?
Why can’t you make a modular policy? Basics would be included, of course, but then just add in what we need/don’t need. I don’t need £2.5k of office equipment cover: I’ve only got a laptop and a printer, worth £500 max. Do I need £1m of public liability when I don’t see the public and no one comes to my house?
Have you installed a new-fangled computer system and over automated everything in the process, without the ability to be flexible? Are you just a call centre with standard products? If we don’t fit your ‘shop’ or ‘tradesman’ policy you just load the premium because you don’t understand the risk. You see, the thing about automating a business is that computer systems should replicate your existing business processes – they shouldn’t change them.
You’ve even got online premium calculators – which are infuriating. If we don’t fit into your list of businesses – and I haven’t found one of these that lists e-commerce – you can’t quote.
Why not just say: ‘e-commerce home businesses need not apply. You’re too modern, please go away. You make us feel uncomfortable’?
And yet – oh the irony is overwhelming. You allow us to buy all sorts of insurance online and pay online – so what has that made YOU? Yes, an e-commerce business.
The brokers can see how ridiculous the situation is, but insurance companies can’t. Get a grip business insurance industry – it’s 2011, working from home on the internet has been a big thing for 10-plus years. Catch up!!
Hayley Chalmers, Short Couture
Missed the final episode? Catch up here.
It’s the final: to get this far, four intrepid apprentices have survived 11 weeks of bitching, desperation, foolishness and despair. Now all Jim, Susan, Helen and Tom have to do is impress a panel of experts with their knockout business plan and £250,000 of start-up cash is theirs. The scrutiny is remorseless: it’s not pretty, but it’s entertaining.
Here’s what 11 weeks of rigorous business training has led to:
Amstrad – sorry, Amsmart – is an e-learning enterprise education tool for schools using Lord Sugar as a figurehead. The smarmy salesman predictably describes his idea as “amazing, brilliant, impactful, unique”. Business troubleshooter Claude Littner sees it differently: “This is a feeble attempt to curry favour by using Lord Sugar’s name,” he correctly points out.
This is the high point for Jim; he’s also nailed for making claims he can’t back up, non-existent market research and criminal abuse of cliché. “I’m exactly what it says on the tin,” he declares when asked to describe himself without using platitudes. And with the admission that he’s no more than a tin man, it’s game over for the verbose Irishman..
Susan’s elevator pitch for her organic natural skincare business requires a couple of rides up the world’s tallest building to get through. Her business plan is built on bonkers financial forecasts, not least a projection of £4.5 million first-year turnover that, it emerges, is based on the weekend take at her market stall in Greenwich. Rii-iight.
She has a childlike grasp of finance and fundamental business processes. She has a childlike grasp of almost everything. The consensus is that, despite her entrepreneurial spirit, Susan is too naïve to start an enterprise with. “Don’t keep telling me you ‘absolutely understand’ when you don’t understand,” cries a despairing Sugar. “I’m saying that I understand that I didn’t understand,” she responds. Do you understand “You’re fired”, Susan?
Tom has devised a test to find out whether employees are susceptible to back pain and invented a device to prevent it. Together, these will save employers money lost through absenteeism, he says. It turns out the “device” is an orthopaedic desk chair, but Tom doesn’t think to mention the word ‘chair’ in his business plan. Nor does he point out that most of the revenue will come from chair sales. He gets all his figures wrong anyway.
Tom is flighty and unfocused, say the experts – he’s sold an innovative nail file to Walmarts and Boots, but hasn’t capitalised on his success. “The bottom line is I’m not Mr Nail File Guy,” he admits. At least he’s honest.
Sugar himself isn’t big on the whole ‘saving-money-through-solving-absenteeism’ schtick: “Absenteeism isn’t all about back pain,” he complains. “I could also supply them with bouncing keyboards so they don’t get arthritis in their left bum.” Beautiful. The upshot is that Tom has great ideas but may too “nice” for the edgy, cut-throat world of small business. And yet – he has the gumption to sell nail files to Walmart, hasn’t he?
Helen’s been consistently the most successful apprentice and the £250,000 is hers to lose. She proposes a franchise: a mass-market concierge service for people who are too busy to book their own dental appointments and wotnot. Basically, she wants to be a super PA to the masses and replicate herself across the nation. She is the Borg.
Thankfully, this is considered a dubious idea and, besides, she hasn’t got the contacts to get the business up and running. Furthermore, though universally praised for her efficiency, Helen’s “relentless” work ethic makes her suspect. She struggles to tell a joke when asked; does she have anything in her life but work? She scrabbles desperately to recover credibility with a second, hitherto unmentioned, business plan. But it’s too little, too late. The favourite falls at the last, to Lord Sugar’s much-repeated “disappointment”.
In his heart, Sugar wants to give the prize to Helen, but he can’t – she’s fluffed the final test. He adopts a pained expression as he announces Tom the victor. The Bearded One may be dismissive of the testing service, but the chair has legs, so to speak. It’s a victory for ideas and personality; Tom was the only apprentice who consistently offered anything new – and he did so with honesty, decency and likeability. Good on him.
Mathew Riley: “You’re a very nice guy, Tom. I’ve got a very nice wife, but I wouldn’t go into business with her.”
Tom: “I’m not surprised at all that you have a very nice wife.”
Personally, I reckon bouncing keyboards will sell an awful lot better than orthopaedic office chairs. Get on it, Tom.
Missed this episode? Watch it on BBC iPlayer.
There’s a wonderful lady in one of the networking groups I belong to who is an agent for Arbonne. So lovely is she that when she presented her business at our last meeting I wanted to try her products. The service was fantastic; she came to my home, gave me a bag full of goodies and explained how I should use them. She explained that she’d be back in a few days for the bag, but to just enjoy them and get to know the product.
I really wanted to like the product so that I could support this lady. She’s been a great support to us in the network and she’s a really lovely lady to know – why wouldn’t I want to support her. So with this in mind I tried the products.
What happened was interesting. It totally clarified the power of a strong brand.
I’ve always used Liz Earle products and really rather like them. And having another brand to try out directly against them actually deepened my loyalty – to Liz Earle! Not the outcome the Arbonne lady was hoping, but interesting from a branding perspective nonetheless.
What’s interesting to me is that both were very well designed. Both do their job well. But I subconsciously and irrationally identify with Liz Earle more than I do Arbonne. For me, the product, packaging, price point and perfume of Liz Earle are far more seductive than I realised. They just feel like me. And when I analyse this a bit more I see why.
Both brands are powerful and successful. And, as you’d expect of large and successful organisations, they’ve both worked out who their target markets are. I guess I’m just not an Arbonne girl. The design of the Arbonne packaging is very strong – very winter, very bling. That just isn’t me. The scent didn’t do it for me either – I think it was too sophisticated for me! The whole brand feels incredibly well thought through, incredibly well serviced, but just not me.
But do you think Liz Earle would have retained my brand loyalty if they’d played it safe? Not likely. Just like Arbonne they’ve put themselves out there, been brave about communicating what they’re all about. And they have a huge band of loyal followers because of it. Do you think the same could be said of your business? Or are you trying to be all things to all people?
Fiona Humberstone, Flourish design & marketing
While running a small business is highly rewarding, it’s not easy. Yet more of us are being enticed into starting a business, encouraged by an increasingly supportive government that promotes entrepreneurship at every opportunity. This is good news. As entrepreneurs innovate, we as consumers benefit as they produce products and services that better meet our needs. Governments benefit through a greater tax take and lower social welfare costs. Everyone’s a winner.
However, a key challenge for most entrepreneurs is dealing with the numerous issues they must address – when all most want to do is sell. Their knowledge base must not only span their sector, it must also cover a wealth of functional issues ranging from marketing and HR to cashflow management and taxation, etc.
While bigger companies will typically have access to this knowledge in-house, smaller businesses don’t. Instead, for help they turn to their network as well as search engines, blogs, websites and business forums.
One of the benefits of the growth of social media is information about pretty much any subject is available for free on the internet, making it much easier to access than previously. The quality of information is significant and search costs are low, resulting in unfettered access to solutions to your every business problem.
But all is not as straightforward as it might seem. Information gleaned from these sources is not without its drawbacks, not least, for the most part – you don’t know who you are getting the knowledge from.
Some of the following issues also apply:
Firstly, taking information at ‘face value’ is rarely a good thing. Consider each bit of advice as a mere data point as you seek to gather information to make a decision. You should also seek out articles supported by facts with clear attribution to source data where you can substantiate claims.
Secondly, it is important to assess the nature of your inquiry, relative to the risks associated with the decision to be made. Information gleaned from a search engine or website is no substitute for paid-for advice when dealing with legal or taxation matters, for instance. While we have all become accustomed to using search engines for information searches, we must not lose sight of the fact that nurturing a wide network of contacts from which you can request advice is a better use of your time than surfing the net for solutions to more complex issues.
It is also worth considering the context of the information. Is it on a commercial site where the author has a commercial agenda or is it on an informational site such as Wikipedia, where the content is curated by a number of contributors? Articles written on branded websites, with full author accreditation (and clear domain expertise), trump anonymous postings on poor-quality websites every time. However, you must remember that, unlike professional advice, there is generally no come back if you suffer damages as a result of acting on erroneous information.
As an entrepreneur you also must constantly weigh up the costs of a decision and need to become comfortable dealing with incomplete information. As venture capitalist Mark Suster eloquently puts it:
“You are constantly faced with decisions and there is always incomplete information. This paralyzes most people. Not you. Entrepreneurs make fast decisions and move forward knowing that at best 70% of their decisions are going to be right. They move the ball forward every day. They are quick to spot their mistakes and correct. Good entrepreneurs can admit when their course of action was wrong and learn from it. Good entrepreneurs are wrong often. If you’re not, then you’re not trying hard enough. Good entrepreneurs have a penchant for doing vs. over-analyzing. (Obviously don’t read this as zero analysis).”
Finally, it is worth remembering that general information is subject to cognitive biases, and accredited sources used in support of the arguments may be from wildly different contexts from the one in which you are attempting to apply your learnings.
Missed the eleventh episode? Catch up here.
Week eleven and it’s the task that decides who makes it to next week’s final. Five remain – meaning it’s three against two. The odds should be against Helen and Tom, but with Jim in charge of a Team Logic unsettled by Natasha and Susan’s interminable bickering, you’d be unwise to bet against Venture romping to the win.
It’s a daunting challenge, however: two days to come up with a new fast food franchise, create the menu, kit out the first outlet in the City and leave Lord Sugar and an assortment of industry bigwigs with full stomachs and happy smiles. What are the odds on that?
Natasha makes a failed bid for team leadership, citing her restaurant expertise – a hospitality degree – then spends the rest of the episode denying its relevance. Jim’s charm is wearing thin in the face of Natasha’s lapsing commitment and Susan’s manic behaviour. He promises “direction”, but hides in the kitchen and leaves them to snipe at each other. They’re all on their last chance and they know it.
Ignorance is a recurring theme this week. When thinking of a name and identity for their Mexican restaurant, Susan harps insistently about sombreros and the word ‘El’. “They always have, like, ‘El’ something, don’t they? Like ‘El…’.” Pause. “What does ‘El’ mean?” Knowledge isn’t her strong suit. She’s enthusiastic about Jim’s name suggestion of ‘Caraca’s’ because it “sounds Mexican”. It gets the vote. Unfortunately, nobody bothered to check it out: Caracas is the capital of Venezuela.
Helen’s steel and Tom’s passivity make a potent blend. She comes up with the theme (British), takes care of the planning and makes the decisions; he has fun with ideas. They’re both in their element – mind you, it takes Nick Hewer to point out that their Christopher Columbus Pie is about as British as, er, sombreros.
Tom, wandering around shops taking photos of all sorts of things for inspiration, settles on a sticker in a window advertising the review website Qype. “Ky-py?” he asks himself out loud. It’s rather brilliant, though – he quickly makes the leap to “MyPy” and a new fast-food franchise serving small British pies has a name. Meanwhile, Helen is just being impressive; her grasp of business essentials – such as simple unit costs, for example – is streets ahead of all the other candidates. It pays dividends later on.
Jim, the project manager, is in the kitchen being bossed around by his chef. Susan and Natasha, the women who would “appreciate a bit of direction” are losing their cool on the shop floor. It’s not a good recipe. Asked later on about projected customer numbers and revenue for a busy lunch-hour, Jim flounders: “Errm. Errm. Well, let’s say err we expect to serve err 60 people over two hours and they spend err an average of £7. That’ll be errr £4,800.”
Unlike Jim, Helen has her figures engraved on her brain. She’s like a cat playing with mice now – completely in command, even to the extent of producing a written business plan. If she doesn’t win, I’ll eat my keyboard. Tom fares well, too – his strengths are very pronounced, but he lacks the Alpha characteristics Sugar likes to see.
Susan fares rather worse: she is the full human equivalent of nails being scraped on a blackboard – she’s manic, argumentative, insensitive and depressingly uninformed. But she’s the only one on her team to address a basic flaw – Logic’s “fast” food is actually taking ten minutes to serve. Cold.
In the boardroom, Natasha accuses Jim of having a “dark side”, which presumably does nothing for his mathematical skills. But it’s she who is given the push. As is pointed out by the ever-loquacious Jim, Natasha brought only “apathy and despair” to the task. Lord Sugar is marginally kinder: “The process is tough and if you can’t hack it then that’s a weakness.”
Helen, the Android. Unless she’s unmasked as a nark for News International, next week should be a victory parade. Everyone else is there for the comedy. (Personally, I’d go into business with Tom – it would be a disaster but a lot of fun).
“Was Byron a vegetarian, do you know?” Tom is unintentionally hilarious.
A full stomach for the Bearded One this week.
Missed this episode? Watch it on BBC iPlayer.
Recently, I have been spending quality time with people who have been offered large sums to sell their very successful companies.
The mentoring I provide is not about the complex technicalities of a trade sale. They are already receiving the best possible advice from finance professionals, who are negotiating with the prospective buyer on their behalf whilst also ensuring the entrepreneurs’ own personal tax affairs are in order.
Rather, I help them cope with the emotional impact of selling their company, based on my own experience in 1989. We had found ourselves in this enviable position only five years after starting the company. This was a combination of our highly focused sales activity in a booming niche market, a good hiring policy and strict financial controls.
My co-founders had allowed me to ramp up revenue year-on-year, while they quietly prepared the company for a potential trade sale by hiring the best advisors from day one. When the big offer arrived, the purchasers were able to act swiftly and ethically; the entire transaction lasted no more than a few weeks.
Not everyone has had this positive experience. I have heard many tales of unscrupulous purchasers enticing their smaller competitors with promises of great wealth, only to draw out the process as long as possible before finally offering a derisory offer.
It then transpires that the real reason for their supposed interest in acquisition was to find out competitive information from the smaller company. The process of due diligence distracted the principals of the company from their day-to-day business and revenues soon suffered. This eventually made them desperate and sometimes willing to accept a much lower offer, out of desperation.
There is a much more ethical path. In the heady and euphoric early days of a potential acquisition, both sides should agree an abbreviated timescale for the process. The smaller company should also receive a non-returnable deposit on the transaction, in exchange for exclusivity of negotiation for a limited period.
This should be reasonable to any potential purchaser who should have already done their homework on the company to be acquired, putting a specific financial value to their assets of the company as well as their client base and associated goodwill.
But even such a swift and ethical acquisition will have some emotional fallout for the entrepreneur. For them, the process of selling their company can be best described as like a bereavement.
Their valued and much-loved staff will likely be upset or angry when suddenly finding themselves part of a much larger organisation, especially one who was previously a fierce competitor.
There is a less painful way for founders to exit their companies. To grow a company past thirty people requires the hiring of industry professionals; I often call these people ‘grown-ups’. They will put in the procedures and processes required at this stage, often curbing the excesses and unprofessionalism of the founders.
These ‘grown-ups’ are usually ambitious people with the right skills to grow a company to 150 people and beyond. They also speak the same language as private equity professionals and are the right people to arrange a management buy-out or buy-in.
The inward investors will feel more comfortable negotiating with these seasoned professionals, rather than the unpredictable entrepreneur, who can make a dignified exit while still watching their ‘child’ grow into maturity from afar.
The best advice I can give to anyone thinking of exiting their business one day is to hire these ‘grown-ups’ and let them get on with growing the organisation professionally. Eventually, you will be able to sell your company to people you actually like.
Originally published in The Financial Times. Copyright ©Mike Southon 2011. All Rights Reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker.
The continuous rise of TV viewing figures was an accepted fact for decades amongst social commentators. And then the unthinkable happened. Within a handful of years, TV figures levelled out and – unbelievably – started to dip.
The TV and advertising industries were shocked to the core. How it happened is almost incidental – it was the introduction and growth of first the internet and then social media. But what it showed is really important for you and your business.
It showed that today's audiences are real, live and opinionated. They can no longer be relied on to be passive viewers and, given the opportunity, they will join in and let you know how they feel and what they want.
Today's audiences – your customers – aren't just couch potatoes sitting consuming a diet of product placement and advertising. They have alternatives.
They are watching programmes on BBC iPlayer; playing networked Warcraft with people from across the world; tweeting their thoughts about America's Next Top Model or Strictly Come Dancing. They're blogging; setting up and running charities online; creating webcasts; reading ebooks; buying and selling on eBay; and partaking in any one of a million other niche (and not so niche) pursuits.
What was once a huge audience, with no choice but to watch and listen to a pre-set schedule of programming, has fragmented. It's been smashed into a million different micro-groups. And each micro-group can do what it wants, where it wants, when it wants and with whom it wants.
And how do they pay? Usually with the one commodity that is increasingly valuable in this world – time. But they decide how best to use it – not us.
The customer has been liberated – and that's bad news for the big advertising media. Does it seem like bad news for you? It shouldn't be. As a small business owner, you should be jumping up and down with joy.
Here are the three main reasons why...
So if you're thinking of setting up a small business or you're in the early stages of business growth, take heart. You are at a unique time in commercial history. You are placed at exactly the right time for marketing your small business.
Carpe Diem… Seize the day.
Jason Sullock is a Marketing Manager for Sage (UK) Limited and author of Quick and Dirty Marketing Tips.
Missed the eleventh episode? Catch up here.
There’s no task in this episode — but it’s a chance to find out more about the final five and remind ourselves of how they managed to get to this point. So who are the final five?
Jim describes his special powers: ”I can read people. I can gauge others. I can take their hearts and I can take their minds and I’m good at getting them to do what I need them to do.”
Natasha on Jim’s powers: “People seem to get jim-onised. And it’s almost like he’s got the ability to hypnotise them.”
Karren Brady on Jim’s powers: “Jim has the ability to control people and they don’t even know he’s controlling them. Actually I’ve never seen anything like it in Lord Sugar’s boardroom before.”
Lord Sugar asks an important question: “I don’t know what you’re made of mate — is it brains or bollocks?”
Nick Hewer sums it up: “Nobody would argue that Jim is not a great salesman and a great negotiator. But is he just a salesman? Has he got the creativity, the versatility to lead a business?”
Moment of glory: When Jim persuaded Leon not to pick him in the boardroom.
The bottom line: The man can sell and he can twist people around his little finger. But can he control Lord Sugar? I very much doubt it.
Jim on Natasha: “I would liken her to a Tasmanian devil. A ball of energy.”
What Karren Brady says: “Natasha is a really canny girl. She’s the only candidate that saw straight through Jim.”
What Lord Sugar says about her poor performance in the reinvestment task in week ten: “Are you having a laugh?”
Moment of glory: Natasha proved to be a brilliant lads’ mag editor. Could she be a future editor of a new Sunday tabloid perhaps?
The bottom line: She’s got all the things that Apprentice candidates like to brag about: a fighting spirit, determination, drive. She’s certainly got a tough exterior — but is she a bit of an empty vessel?
What Nick Hewer says: I think she’s quite a force to be reckoned with.”
But then he adds: “She has an unhappy knack of rubbing people up the wrong way.”
And then he warns her: “You cave in too fast to weightier voices. Sometimes you talk great sense but you don’t push your point strongly enough because you’re overawed by those around you.”
What Jim calls her: “The meek little mouse.”
What Lord Sugar calls her: “The mouse that roared.”
Moment of glory: She excelled in Paris selling the universal gripper and leading the winning team.
The bottom line: Yes she needs to be more forceful to get her points across. But the problem is, she doesn’t actually always get it right. She’s inconsistent and perhaps just too young to be a contender.
Karren Brady on Helen’s presentation skills: “She delivered an absolutely perfect pitch. I’ve been in business a long time and it takes years of practice to deliver one as good as that.”
But Lord Sugar spots a weakness: “Suddenly the most simple principle of business and you made a big mistake.”
Karren Brady asks the big question: “The truth about Helen is she’s got the best record. Nine wins and one loss. And in fact the only question mark against her is why hasn’t she set up her own business? What has she been waiting for?”
Moment of glory: Undoubtedly the La Redoute pitch in Paris where she got a €214,000 order. Closely followed by her success on the biscuit task that saw her bring in a record-breaking order for 800,000 units.
The bottom line: Helen is composed, confident, intelligent, charming, organised and refreshingly free of bullshit. And she’s totally focused on the prize. She’s clearly boardroom material but is she an entrepreneur?
Tom reveals his ambition: “I think I wanted to be an inventor since I was four.”
Jim on Tom’s number-crunching: “He can give you the information that you need that you would get from an accountant in a real-life business.”
Nick Hewer on Tom’s run of bad luck: “Tom has got to be one of the most frustrating characters we’ve ever had. He has the most appalling record of losses and yet we know that he’s smart. He needs a bit more steel.”
Nick Hewer appears to back Tom: “If Lord Sugar was going to go into business with Tom he could certainly rely on Tom for all those detailed calculations, the money and all the rest of it. And added to that, Tom’s got one huge benefit, he can conceive and design products and take them to market. But — and it’s a big but — Tom lacks backbone. But, on the other hand, Lord Sugar’s got plenty of that.”
Moment of glory: When he’s finally on the winning team in episode six, the rubbish task.
The bottom line: Tom’s got the credentials. He’s a proper inventor and entrepreneur. But does this clever and slightly eccentric nice guy have the necessary fire in his belly?
So far, it has been a bit of a popularity contest. Let’s face it, Lord Sugar has to work with these people in a 50/50 business partnership so he’s got to get rid of anyone he couldn’t stand to work closely with, regardless of their skills. Right now, it looks like Tom and Helen are the front-runners. But once the business plans are unveiled, things could look very different.
Missed this episode? Watch it on BBC iPlayer.
Missed the tenth episode? Catch up here.
We’re down to six candidates and we’re finally seeing the wood for the trees. We’ve got little Susie, who unwisely says everything she thinks out loud; Irish charmer Jim who can sell anything; brainy but spineless boffin Tom; ambitious Melody who talks for Britain but makes no sense; Natasha, who acts tough but is insubstantial; and Helen, the quiet assassin waiting to make her move.
This week’s task involves buying things wholesale and selling them for a profit. It’s a classic business model and a great test. It’s so simple. And Lord Sugar spells it out for them just in case they don’t get it. Sell this stuff, buy more of the stuff that sells best, sell that and buy more and keep going until you’ve got a nice fat profit. And, he tells them, don’t worry about being left with stock — that will be counted as assets.
This week, the teams are:
Logic: Helen, Tom and team leader Melody
Venture: Susie, Jim and team leader Natasha
This task reveals that there is a chasm between the leaders and the grafters that get on and sell. Nowhere is this more apparent than on team Venture.
Jim is in his element. He tells customers: “I’ll package it up nicely. I’ll even give you a hug and a kiss.” He says things like: “Come to papa”! But in the context of selling nodding dogs and plastic brollies from a market stall, he’s pitching it just right and does a roaring trade.
Meanwhile, it looks like Susan has gone off task, stopping to buy a load of bracelets that catch her eye. A born shopper, her “magpie” eyes light up as she wantonly chucks bracelet after bracelet into her basket. But can she actually sell them?
Ooh those pesky Apprentice programme-makers. They get me every time. It’s edited to look like she’s making the biggest mistake of her life. But lo and behold, she shifts most of them for a big fat profit.
So team leader Natasha must be pleased, yeah? She’s got a great team, yeah? She’s making important, decisions, yeah? If only she wouldn’t say “yeah?” at the end of all her sentences. But that’s Natasha all over. She tries to sound like a player but she’s full of doubt.
You can see her rising panic as she watches Susie and Jim sell. She picks arguments with both of them, hoping to score some points that could be used in the boardroom. They’re having none of it. And then, in an attempt to be decisive, she won’t let Jim go and restock. Not a good move, Natasha, not a good move.
Meanwhile, Team Logic falls to pieces. Tom does OK on the South Bank flogging nodding dogs to small children. But Helen and Melody make a complete hash of things. They decide to “go retail” and sell the wholesale goods in larger quantities to retailers.
This is where Helen has done well before. But it’s all wrong for this task. These retailers can get their own stock from the same wholesalers thank you very much. And really, why would you try and sell £50 watches to a pound store?
So Melody and Helen get into a proper muddle, making random decisions on what to buy and fixating on selling a pile of duvet covers to a shop in Hackney for a tiny profit.
Eventually, thanks to some mobile phone chargers, they manage to make a few sales to add to what Tom’s sold. But it’s a sorry sight.
The best bit is when Helen tries to stage a coup. It’s the start of day two and they’re meeting to discuss tactics when Helen offers to take over the team leader role from Melody. The cheek!
Melody looks haughty, says “no to that” and moves on swiftly. Disaster averted. Or is it? What Melody doesn’t seem to appreciate is that Helen doesn’t care whether she’s team leader or not. She is simply making public her vote of no confidence in Melody ahead of the boardroom showdown. Clever girl.
Natasha’s failure to restock — despite Lord Sugar’s specific instructions — sees team Venture on the naughty step. They get a £100 fine. In the end, though, they still win. But Lord Sugar is so disgusted with them that he takes away their winners’ treat.
So it’s Logic that have to shuffle off to the losers’ café — the Marie Celeste of cafes, where there are never any staff or other customers. Tom’s such a regular, he should get a loyalty card.
Back in the boardroom, Lord Sugar has to make a tough decision. He knows Helen is good (until now, she has never been on the losing team) and Tom has proved this week that he can sell.
So the focus is on Melody. Poor Lord Sugar. He hates to do this. It’s “with regret” that he fires her, this is a “cruel process” and Melody is “a woman of exceptional ability”. He’s so gutted that he can’t even bring himself to point his finger.
Helen’s attempted coup has shown that she is made of steel. But she’s got competition from Tom, who is a “product man” who can sell too. And now Jim is back in the running. He even gets Nick Hewer’s seal of approval this week. Nick says: “People like him. And I quite like him” — pause — “for the first time.” Talk about damning with faint praise.
Once you’ve established your best sellers, stock up and sell as many of them as you can.
“This is all about courage really. Whether you’ve got the balls to actually know and smell what’s going on in business. This is what I am looking for amongst you lot.” Lord Sugar.
Missed this episode? Watch it on BBC iPlayer.
This week Lord Sugar made £1,479.
I prefer the straight-talking approach – to life and business. But working in the recruitment sector means I know a lot about the smoke and mirrors and doublespeak agents use. Here are a few statements I’ve heard many times over the years – and an explanation of what they really mean.
“We’ll find the best candidates in the market place”
I’ll send you the CVs I have on file.
“We’ll network extensively to find you the right person for the role”
I’ll do a database search, post the job description online, send a tweet and write a wall post on Facebook.
“We charge 15% of total remuneration as a fee”
Kerrching – I’ll make £3,500 from this.
“There’s no negotiation on the fee – we add so much value, it’s justified”
I can’t believe people are still paying me to post jobs on social media websites when they could be doing it themselves for free. And I’m earning a £3,500 fee from this.
“We offer world-class service and want to help grow your business”
I’ll treat you like a god because there’s £3,500 fee in this for me and growing your business means more employees so I get richer too. It’s a win-win.
“I think you are making a big mistake not taking my candidate”
Bugger – I promised the missus a new car and now I’m not going to earn a bonus
Darren Leighfield, Director at EtcEtc Ltd
Venture capitalists deciding whether to invest in early-stage businesses will tell you that there are three things that they look for: people, people and people. It’s a slightly trite saying, but my experience says there’s wisdom in this approach.
I’ve recently joined the board of a financial services company that has gone from start-up to a multi-billion pound valuation in the lifetime of its founders. In fact, it’s the only FTSE 100 company to achieve this entirely by organic growth. It’s an amazing story and there are lots of lessons it could teach. A major part of the success has been down to one of the key early employees working alongside the founders.
In a similar way, when I started my own company, SellerDeck, we went from start-up to full listing on the London Stock Exchange in less than five years. The first recruit started working for us while the business was still in my house and was absolutely critical. He later became a director and has now gone on to be highly successful at other companies.
And again, SellerDeck’s biggest customer success story started out in a front room and grew to sales of £23m in a handful of years. Sure enough, their first employee went on to become the operations director and was a major driving force for the business during its development.
When you are starting a company, you have limited resources and husbanding them carefully is critical. It may seem difficult to be choosy when you are recruiting your first one or two staff, but it’s an important discipline. In fact, it’s up there with choosing the right business partner. If you get it right, it can be the first step on the road to huge success. If you get it wrong – it could be the end. Put more effort into your early recruitment than on any other issue. Believe me, the venture capitalists have got it right.