UK SME

CTU update Feb 2012

2012-02-03T16:49:00.001Z

Late Dec video blog from CTU - including news on app

2011-12-20T10:54:00.000Z

Dec video blog from CTU - loads of amazing news!

2011-11-30T10:00:00.001Z

Latest CTU Video Update

2011-11-03T17:02:00.004Z

Labour has to be the Party of Business

2011-10-31T15:15:00.006Z

Labour cannot afford to let those who hardly ever look at politics think they've gone back to their ways of being anti-business and the city and e-commerce and therefore, the UK.

I can understand the desire, indeed the need, for the party leadership to find issues that will get profile and traction in an environment where the government has an inbuilt opposition in the Lib Dems. Anything a Lib Dem says in response to a Tory pronouncement is deemed by our media to be more newsworthy than anything said by HM official opposition. This makes Ed Miliband's job even harder than leading a normal opposition. But shattering 20 years of work in challenging the prejudice that 'Labour doesn't do business' in a single speech is not worth a few headlines. Ed's conference speech if it lives on beyond the Westminster bubble, does so sadly because of its perceived anti business stance.

Simon's Camden Town Unlimited update

2011-06-27T16:57:00.000+01:00

How To Be Ingenious

2011-04-21T09:51:00.011+01:00

I have a friend who frequently tells me of a new and exciting idea he's had that can make money. My usual response is to say that I think it's a great idea and that he should do something with it. This in turn tends to produce a look of disappointment which he explains is because what he wants is someone to take his brilliant idea and make money with it. And then, if successful, they'll reward his brilliance with a nice meal or a house depending on how great the realisation of his idea has been. I suspect we all know people like this and will ourselves indulge in the game of 'creative thinking' from time to time. But my friend kept coming to mind as I read How to be Ingenious by Jamie Young of the RSA recently.

The central tenant of the paper is that creativity and creative problem solving are all well and good but that things don't really get going in a meaningful way until one gets ingenious. And that real ingenuity involves a 'frugal elegance' which thrives in an environment of mild deprivation, as it is only then that we are forced to look at what we have in a different light. Young and his colleagues go on to define the ideal environments in which ingenuity can be fostered.

This seems largely to consist of being mindful of the human instinct to resent being deprived and to foster team work and a sense of collective endeavour so that any potential resentment is swept aside in the tide of battling-the-odds. Having endless resources at your disposal, they suggest, leads to lazier thinking as one is not forced to adapt to the challenge.

There seems to be much work still to do, this paper is just the start of project run by the RSA's Design Team, to try and work out how to enable more ingenuity. A resource that could make a meaningful difference in the current climate as an alternative to 'doing less as there's less money' is worthy of further study. I for one will watch their progress with interest.

Also, what I really liked about it was that I could read the paper in one short sitting, get loads of helpful examples and have to option, as an RSA Fellow, of engaging in the learning process.

However for my ideas-rich friend I can see little cause for optimism. For what these guys are really saying is what any experienced business person knows only too well. Working stuff out is hard, you never have enough resource and there ain't no short cuts.

BEYOND THE CRUNCH - A VERSION OF THE BIG SOCIETY?

2010-06-23T10:34:00.001+01:00

Am taking part in a seminar on this topic at the RSA tomorrow. This is what I'll be saying.

If we peer into the corporate future to a time when the Osborne demolition ball has stopped swinging through the current landscape of public funded bodies, what will we see? Assuming the private sector has continued its slow recovery, will the plc, the limited company and the sole trader be all that co-exist with government, local and national, rising above the debris of broken regional development bodies and the like?

Or will there be room for an upstart already claiming a place to bridge the gap between private and public sectors in the new business panorama beyond the crunch - the Business Improvement District (the BID).

The BID is a hybrid venture idea imported from across the Atlantic about seven years ago. Already we have more than 100 in the UK, 25 of them in London.

Essentially a BID is the inspiration of a group of local businessmen and/or local authority officials who perceive that there are flaws in the current social or commercial landscape.

It is funded by a levy on local businesses equivalent to 1% of all business rates in the BID’s defined area, coupled in some areas by match-funding from the local authority. The funding businesses vote in a board and a chairman and appoint a CEO for a fixed period, usually five years

If the BID proves successful it can win a mandate to serve again. If not it goes the way of all failed ventures. The outcome lies with local business and with the imagination, ingenuity and energy of the BID and its leadership. A partnership with the local authority and local residents groups as well as with the police and local media is essential.

The ambition is a lean delivery-focused body that will tackle problems from street clean-ups and eradicating drug dealing to more ambitious projects like incentivising new businesses and developing new streetscape plans for the town centre.

BIDs can engage in commercial activities to subsidise their income or provide joint procurement initiatives, for instance, to reduce energy costs for their membership.

My experience as CEO of Camden Town United, the North London based BID, has taught me that this model of local service, harnessing enlightened self-interest and in return delivering a service that people really need, may be the way forward for the austere times ahead - and beyond.

Our approach is pragmatic. Responding to people’s fears and businesses’ frustration at street drug dealing, we hired private security patrols to drive the dealers off the streets. Seeing how successful uniformed enforcement could be the local council and police were encouraged to massively increase patrols. Our role was to identify the problem, offer a temporary solution and then provide arm-twisting persuasion and communications to make sure it happened long term.

It makes sense that BIDs, funded by business, become just as interested in local social reform as they may be in street cleaning or commercial enterprise. Once a board of directors sees what can be achieved enthusiasm and commitment come easier.

Camden Town Unlimited is currently occupying a warehouse space while the owner waits for times to improve. We’ve filled it with start-up creative businesses to help them take their early commercial steps with some support. The local authority (Camden Council) has provided financial help as part of its recession work but, to its great credit, recognises that the BID can manage the space and the people in it far better than a large bureaucracy ever could.

We have developed plans for the wide area to improve the physical environment and challenge current thinking on planning and licensing. Yet a pure business head might ask what has all this got to do with my profit margins and why isn’t the council doing it?

The truth is that it has never been easy for local authorities to manage this sort incentive nor have they had the know-how when it comes to engaging businesses. And until now, no business has had a vote of any kind.

Inevitably, as we pick our way through the crunch and eventually emerge from the debris, we will see Local Government doing less, concentrating on core services. In place of generous funding settlements, central government needs to give direction to local authorities, to use the power offered by the BID model to fill the gaps that will open up.

Local government must learn to be flexible in their thinking. They must resist the temptation to control and instead learn better to facilitate the changing landscape and those still in it.

If the idea of the "Big society" means anything, it surely is a partnership responding to local demands. What we need now from local authorities is imagination, boldness and a will to seize the opportunity BIDs represent.

Lessons from New York. In the US BIDs have moved beyond the basic sanitation and security remits familiar to most UK BIDs and are increasingly being used as an economic development tool. The Furman Centre at New York University recently published the first study into the impacts of BIDs on the communities they serve. The key findings were that:

· BIDs typically increase commercial property values within the BID area by around 15%

· BIDs don't seem to have any 'spillover' impacts in surrounding neighbourhood areas - so solving crime within the BID doesn't seem to push it elsewhere locally.

· BIDs do not appear to have any long lasting impact on residential property values.

Still in recession or turning in Jan?

2009-10-24T10:57:00.003+01:00

So things are worse than clever people thought (BBC). And the recent figures from my business support this as I wrote earlier about worrying signs. However a BT survey published this week says that 75% of SMEs think things are going to turn up in Jan next year! If I was writing this earlier in the week I might have taken some comfort from the BT report findings. But today, as Britain is confirmed into the worst recession since records began in 1955, I find it hard to be optimistic. October is always a low month for my biz but if this month finishes as it started I have to go back to Oct 07 to find worse monthly figures. At this rate all the growth we've managed to maintain in 2009 will be all but wiped out and whether this year finishes up or down on 2008 will be entirely dependant on the Christmas period. Like us, I'm sure that the SMEs participating in the BT survey have been investing in both technology and staff in the hope of being well placed for the expected recovery. And I quite agree with Digby Jones when he says that embedding technology in the heart of a business is vital to both future growth and current survival but unlike the BT SMEs, my worry is increasing not decreasing. We're lucky to have zero debt, a healthy market position, apparently weakening competition, good technology and great staff. But if October's figures are the start of a second dip, our recent investment could come to look rash. I hope I'm wrong.

October Blues

2009-10-09T09:25:00.002+01:00

Amidst all the talk of green shoots and coming out of recession, my worst fears might be coming to bear. Our figures have an unnerving habit of being a very good indicator of things to come. Last October we saw a sudden drop in what, for two years up the then, had been a pretty steady growth rate. Since then things have been growing again, slowly but pretty steadily. Last month (Sept) would have taken a mini dive had it not been for one large export order and now Oct is starting very sluggishly indeed. In fact I'm currently predicting to sell less this Oct than last by about 40%! That's never happened to us and the old 'double dip' is starting to make a lot more sense to me now.

Steve Ballmer, CEO, Microsoft

2009-10-05T11:33:00.004+01:00

I got to ask Steve a question this morning. Not everyday you get to speak to the CEO of Microsoft. In fairness I was one of many in a room in a posh hotel in London who paid to hear him speak. But still. His theme seemed to me to boil down to 'every thing's about innovation and hard work.' He implied that the 'automation of the everyday' was less that five years away and that it wouldn't be long before we would be designing a cars on massive touch screens that understood our needs and made the whole interface with technology transparent.

My question was how did he split himself between this sort of ambassadorial role and the day to day management of the corporation. He said he was only about 5% ambassador and that hands on work took up most of his time. I have to say I thought that figure might be a little low and may have been the answer his employees in the room wanted to hear. In fact I'd be quite disappointed if it were true. Surely the role of a modern CEO is to be out there most of the time, leaving a competent crew at home to innovate and work at the business, bringing back useful nuggets and thoughts as appropriate. Steve gave everyone his personal email so I might challenge him on his answer away from public gaze.

Radio Show

2009-08-02T15:16:00.003+01:00

Am doing some preparation for an appearance on Business Matters in LBC 97.3 at 5pm today. The thing about phone in shows is that you never know quite where the audience (or the presenter!) are going to take you. But as I scan this weeks business pages there seems to be distinctly conflicting signals for SMEs.

Banks are clearly starting to get caught between the Chancellor putting pressure on them to re-start lending to SMEs from the huge pots of public cash that have been thrown at them and the spectre of bad debt on mortgage lending that seems to be coming over the hill. So guess what? The banks are sitting on the cash just in case. So SMEs, don't expect much in the way of ease of access to funds in the near future. We'll see if today's pressure on the Bank of England to keep the cash taps flowing makes in difference.

Meanwhile, unemployment seems set to rise sharply and it's going to hit the under 25s hardest. For an SME like mine that may not be the end of the world as it suggests the main breadwinners will still be OK and hence able to buy things like table tennis tables. Looking from the perspective of my day job however, Camden Town is very reliant on young people. Then again youth culture tends to thrive on youth unemployment, so who knows how that will play out. Either way I wouldn't want to be coming out of Uni with big debts at this point in time unless I was one of the few who already had a good entrepreneurial zeal ready to take advantage of the undoubted opportunities out there if you know how to exploit them. This weeks announcement of a £1bn fund to help young people find work shows how worried the government are.

If previous experience is anything to go by, none of this will come up during the show today and I'll be making up answers on the hoof. Which of course is half the fun!

June saves the year

2009-06-29T16:45:00.003+01:00

It's been a while since I posted. The main reason being that things with the business have been down. Whilst the first quarter of 2009 was up 10%, April & May were way down and it looked like the recession was finally catching up with us. Then came June! Turns out June's been way up on last year and we're now back on track for a small level of growth for the first half of the year. Result! Plus we've taken a few biggish decisions in terms of re-allocating staff and changing our commission structure which we hope will bear fruit in the next half of the year. I promised by biz partner I'd buy him a case of wine if we made £1.5m turnover this year. That would need around 40% growth in the next six months. Not impossible and I'm more worried about loosing the bet now than I've been in last three months. Will keep you posted.

Old school v new world

2009-05-05T11:45:00.002+01:00

One of our main suppliers told me today that we're the No1 online outlet for their goods in the UK. So they sell more of their product through us than anyone else. Gratifying to say the least. What he also told me was that our competition couldn't work out how we'd done it. Which I have to say shocked me a little. To my mind all we've done is sell competitively priced goods via a well laid out, easy to use, web site and provided good customer service by employing good people to answer the phones. Any problems we have we try to be fare and we try and automate as much as possible. This is not rocket science. Yet it apparently mystifies some of our competitors. Is that because they can't use technology to help themselves or employ good people? Or are they just too old school and penny pinching to notice the world has changed?

Our figures may just be beginning to show signs of slow down

2009-04-28T13:47:00.004+01:00

As April draws to a close I suspect that for the first time in 2009 we'll be down on this time last year. The good news is we're out of the first quarter, during which we were up 10%, which means that the least profitable quarter is over and we're still here. So baring major catastrophe we're not going to lose money this year. But I feel a degree of concern as I study the current figures and compare them to last year. Is this the beginning of the start of our pain?

The Bank of Essex

2009-04-24T09:32:00.003+01:00

This could be interesting. A local council setting up it's own bank to help SMEs. I can't help but think they'll find the hoops they have to jump through, in order to actually start lending, too difficult in the end. But credit where it's due to Essex Council for being prepared to try. And allocating money where it's mouth is.

Budget and SMEs

2009-04-23T11:35:00.006+01:00

As the dust begins to settle on yesterday's Budget and various headlines seek to portray the event in a way that appeals (or gleefully horrifies) their readership, I'm struck by a glaring omission. Whether the budget was an "attack on the rich", the "death knell of a dying government", "a class war divide" or a "trap for the Tories" it doesn't appear to have been much help for SMEs. True, most SME owners fall well below the £150k threshold for the 50% tax rate or the restrictions on pension tax relief but that's not much to sing about. I suspect that the strategic investment fund for struggling businesses will be eaten up by big biz (who represent 1% of businesses in the UK) and will involve huge amounts of red tape which SMEs have no capacity for. Maybe some of the support for the unemployed will help us employ people we wouldn't otherwise be able to afford, but I'm not hopeful and suspect the potential accusations of exploiting cheap labour (which may be true in some cases) will stifle the scheme as it has in the past. So we carry on as before. We carry on employing 50% of the UK work force. We carry on being the "engine of growth". And we carry on taking the real risks in this economy, without a safety net, and hope in vein that someone notices how important yet unheard we are.

Business Matters and Local Taxation

2009-04-20T12:21:00.003+01:00

On LBC Radio yesterday I had a most enjoyable encounter with Dr David Kuo and James Max. We talked about the budget and offered bits of advice to callers, some details of which can be found on the Business Matters blog. However one thing sticks in my mind. During a discussion on business rates David made the point that biz rates are roughly apportioned according to demands on local services. So a bigger premises would have more need for refuse collection etc and would therefore pay higher rates regardless of turnover . Whilst this is true in theory, in practice only around 5% of the rates collected is retained by the local authority, with the rest going to central government. Which to my mind makes it just another form of biz taxation. A point I wish I'd had the wit to make at the time. But live radio doesn't allow for retakes.

What do SMEs want from next week's Budget?

2009-04-16T16:35:00.005+01:00

I've been asked to go on Business Matters on LBC on Sunday 6-7pm to do an SME surgery (helping SMEs with problems I assume) and to talk about what SMEs' want from the Budget. Am working on some ideas for businesses like ours but it strikes me that, bar a complete revamp of the taxation system in the UK that removes the role of unpaid tax collector from the portfolio of all biz owners, I'm not sure what the Chancellor could do to make an immediate impact next week. But am open to ideas......

Day 6 - 'Managing things at distance'

2009-04-12T12:52:00.011+01:00

A four day weekend may well have helped us with our warehouse problems. And it looks like our delivery company has done the decent thing and worked flat out over the period to sort out the issues. As well they might given that we had to bung a couple of grand at their landlord to get the doors open. (Who knows when we'll get that back!)

Longer term it looks like they're going to have to go bust and re-appear as a warehouse management business with a man-and-a-van service tacked on to do local deliveries. Then we can use a bigger, national provider for our needs without having to manage our own warehouse.

We looked at this problem in the past. It seems that the man-and-a-van can make a profit and big national services can. But anything in between in this market just can't make money. As ever it's interesting to get a look at other biz sectors and models. And tempting to think that we could do better than the existing providers. But so far we've always managed to keep the saner, less egotistical, side of that line. Just because you think you've got the hang of one business model in one sector doesn't mean you can switch streams and be just as successful.

Day one - 'managing things at a distance' experiment.

2009-04-09T12:25:00.005+01:00

I mentioned a few days ago that my biz partner was going away for 2 months. See below. Well he left last night and this morning he calls me from New York to say he's just had a call from the guy we sub-contract our warehousing and some of our deliveries to, to say that he's been locked out of his warehouse by his landlord for non-payment of rent. We've been watching him for a few weeks but had got, what we thought were, some pretty watertight commitments and contingencies. It's an interesting start to this 'managing at a distance' experiment.

Human Nature - The flaw in the capitalist model.

2009-04-09T05:18:00.009+01:00

At the end of the business radio show I was on at the weekend, the presenter asked me the same question he always asks. "Are the markets going to go up or down this week?" He was surprised when I said I thought they'd go down since things had been on a bit of a rally the week before. When asked why, I think I said (and the podcast isn't up yet so I can't check) something about human nature taking it's tole. My logic (which may be more post the event than during as is the way with live radio) was that traders, having pushed the markets up last week, would be feeling nervous that they might have over done it and would be cautious this week as a reaction.

It occurs to me now that this is more true than I realised at the time. As it happens the markets do appear to have gone down a little this week. But I'm not claiming any kind of soothsayer status. (I wish!) More the realisation that the biggest flaw in our current model is surely ourselves. If computers, using pure logic (something they're not yet capable of in my opinion as we programme them) had full control of the markets we probably wouldn't be in the current mess as no computer could have been so blind to the over-valuations of the past 5 to 10 years. As I understand it computers now fly our planes, and do so many tasks that we still kid ourselves humans can do better, because in fact computers make infinitely less mistakes than any human ever could.

It's very easy to get all '2001' or 'I Robot' on this topic. But the more I think about it the more I can't wait for the advent of AI. What a treat to have all our mundane tasks done for us (and how many of those are there for your average SME owner?) without having to think about them. Leaving us to find other things to get our creative heads into........ oh!

Customer Feedback

2009-04-09T05:16:00.001+01:00

I thought this was a helpful piece on the topic.

Leadership

2009-04-08T21:43:00.005+01:00

It's a funny thing and a terrible cliche. But the more amenable and flexible I try to be, the more unsettling it seems to be for the people I manage. The more apparently ruthless and inflexible I get, the calmer they seem to be. In my view they have an easier life and more control over their environment when I accommodate their needs and allow them to set their own agendas and time frames. But they seem to find it unsettling.

It seems to come down to good old fashioned boundaries. I find it comparatively easy to provide boundaries for my kids but I don't see why I should treat my employees like they're children. Are they mad or is it me?

A local test for globalisation

2009-04-07T09:16:00.008+01:00

So my biz partner is going to the US for 6 weeks. He's got stuff he needs to sort out over there and the biz has got to the stage where our very able team of four should be more than capable of running the show while he's away. There's a limit to what I can do to help, given my other commitments, and he will be able to work remotely, though the time difference means he won't be around until 4pm UK time. So this really will test just how robust our enterprise has become. In theory, with modern communication and the fact that two of our team work on France full time anyway, it should work perfectly. But I have to confess to being a little nervous. Will let you know how things develop over the coming weeks.

Different kinds of business - Plus Ça Change in the Music Biz

2009-04-05T19:39:00.013+01:00

I spent a very enjoyable day yesterday with Tony White, a music producer in Dalston who explained some of the vagaries of the music business as it is today to me. And like I seem to find everywhere I look, there are some hopeful signs in amongst the seemingly endless gloom. Sure the music biz is not what it used to be, a cash cow for major labels and publishers and successful song writers. But music is still being made and, here's the interesting bit, sold. Apparently certain genres, dance for instance, are still producing international hits that generate sales. These are mainly via download and the artist is increasingly the main link in the chain. Artists who manage everything from writing to recording to touring to sales are able to make a decent living when previously this was often only possible with the aid of music biz infrastructure that the labels could provide. So music's becoming a niche product where singer/songwriters produce a lot of material for a smaller market but make more margin than they could have dreamed of under the label system. Bit like it was before the '50s then?

SME Listeners

2009-04-04T12:16:00.005+01:00

Am trying to prepare for James Max's Business Matters show that I'm going be doing tomorrow on LBC Radio. It's amazing how all the biz stories I come across are either related to big political issues or big corporates. There really is very little space for SME issues in the main coverage. (A theme of mine.) Yet we keep hearing how important the SME sector is to the economy now and surely a large part of the audience for a show like James's will be small biz owners. But where are they in the news or even online? Just think of all the taxi drivers for a start!

Quite like this point from 'I could be the Governor of the Bank of England' about UK manufacturing.

Will it buy us a boat?

2009-04-02T21:53:00.007+01:00

This is a phrase my biz partner and I use to mean, "are we doing more than paying overheads, wages, suppliers and taxes yet?" i.e. did we make any money for ourselves? And laughable though it sounds, it is surprisingly easy to forget. You can be so busy running your business that you forget to check if you can feed yourselves.

Now I know it's also very easy to decide how much you need to earn, take that out of the business, then wonder why your going bust. And though I've seen it done several times, it's stupid.

So how do you move from keeping your head above water and paying your staff to the excess wealth that everyone who doesn't run an SME thinks you're making already? How does one move out of the corner shop, so to speak.

The honest answer is I don't yet know. But having got our business to the state where it will just about run itself without generating much in the way of dividends, this is the next important question to which we shall address ourselves. The truth is that I have no real desire for anything as opulent as the picture above suggests. But if you can't create a modest pension for yourself from your endeavour, what are you in business for? Thoughts and ideas, most welcome!

What does SME stand for?

2009-04-02T10:11:00.010+01:00

I've been asked this a lot in the last week. Apologies for the lazy use of acronyms. It stands for Small and Medium-sized Enterprises, i.e. Small Businesses.

There are various definitions of what constitutes an SME. But things that stand out for me (and show just how vital we are as a group to the UK - especially now) are that;

"out of a total of 4.8m UK businesses, less than 1% were large corporations (i.e. over 250 employees)"
"the majority of the [UK] workforce is employed by SMEs. Statistics [] show that out of 4.7 million businesses in the UK, 99.3% were small firms with fewer than 50 employees, and 0.6% were medium firms with 50-249 employees."

So where are they and why is their voice always drowned out by the 1%? We all know the answer is time and resource but if ever there was a time for government to make an extra effort to tip it’s ears towards the SME community….

Biz Rates not going up by full 5%

2009-04-01T11:03:00.012+01:00

So the Chancellor has decided not to implement the full 5% rise in business rates due to come into effect today. Hooray!

Couple of points that occur to me.

1. isn't interesting how little coverage this event has got today. I know Obama and the G20's a really big deal but it's not easy to find the story on the BBC web site half a day after the announcement.

2. what made him do it at such short notice? gulp!

Businesses as the acupuncture for local regeneration

2009-03-31T13:40:00.015+01:00

A funny thing's happened in my street. A row of pretty dilapidated shop fronts that has blighted the area for all of the 10 years I've lived there, is starting to finally change. And the reason seems pretty simple to me. It's because of Julie. Julie took a risk, a calculated one because she's not stupid and did her research properly, and it's paid off. Now, having run a small deli for a couple of years she's just opened a cafe next door. And guess what? It looks like the boarded up pub in the same road has been taken over by a gastro pub chef!

In my day job, we're desperately trying to regenerate Mornington Crescent. And though the council are being very supportive and we've even discussed doing something with the public library down there, the biggest problem is the guy who owns two burnt-out buildings on the High Street's refusal to do anything with them and the effect these are having on the area.

My point is that it's actually the businesses in an area that can make the real difference to somewhere. And if they get their intervention, or acupuncture, right the whole area can benefit - or suffer. So shouldn't we be targeting sensible businesses in order to support them in the right circumstances? If only we could find them..... See earlier post.

Web TV - Old into New

2009-03-31T12:18:00.012+01:00

Went to the launch of something called Policy Review Interactive last night. A political gathering more than anything else given some of the attendees/speakers (Ed Vaizey MP and Derek Draper) and its location in Millbank Tower, previous home to the UK Labour Party now the base for Conservative election planning. Ironic?

Policy Review is an interesting biz in that it draws heavily on the conference work of its parent company Neil Stewart Associates (NSA). [I was once the publisher of Policy Review Magazine and worked for NSA so I have some insight into the biz.] Neil's premise is that the time is now right to start making money from digital content of this type (mainly speeches from public policy conferences). He's a successful biz-man so I have to assume he knows what he's talking about. And it appears that there are many public sector professionals who will pay £150 to see or hear a conference they couldn't attend for £450. But it seems to me, forgive me Neil, that this is old biz thinking imposing itself on new biz models. I may be wrong and maybe it doesn't matter as Policy Review will generate more interest in the conference biz, so job done. But I think I still see a lot of existing businesses trying to tack web apps onto their existing model, when surely what we've learnt to date is that you need to start from scratch when doing biz on the web isn't it?

Mummy & Daddy Months

2009-03-30T14:25:00.007+01:00

I've just come back from a posh policy document launch at the Commonwealth Club on parental leave. I was invited because I'm now a "leading SME blogger" apparently. (Which reinforces my point about the lack of online 'traffic' amongst SMEs.).

The Equality and Human Rights Commission (EHRC) wants things like 'Daddy Hours' and 'Mummy Hours' and generally worthy, not to mention well thought out, initiatives to help parents spend more time with their kids.

I'm actually quite a fan of this. Where do we expect our low crime society and high emotional intelligence work force to come from if kids of all ages aren't 'raised right'. But I have a few questions.

What about teenagers? I have two and they need loads of help and attention and are far less predictable, and therefor able to fit into a working schedule of any kind, than toddlers and babies.

Isn't the cost off all this going to end up on the shoulders of biz one way or another?

And mostly, isn't this another example of us trying to 'have it all'? I learned today that fathers spend double the time with their kids than was the case in the 1960s, which has to be a step forward and evidence that we're progressing. I also learned that non-parental childcare is expensive and this can put a huge burden on parental relationships. No shit! But somewhere in all this I can't help but feel that we're trying to convince ourselves that two full time working parents has no impact on the kids. And that if we can just throw a bit more money at the problem it'll work out just fine. Raising kids is the only really important thing most of us do in our lives. It's also exhausting, stressful, expensive and once you've started your life will never be the same. Maybe we need to own up to these facts and stop trying to pretend that it won't change our lives forever and accept some of the difficulties, like reduced income and thereby lifestyle, that can go with making hard choices.

Where are all the small biz people?

2009-03-27T11:20:00.005Z

As my friend Surreal McCoy so eloquently suggests in this cartoon, it's quite easy to feel that blogging has become a little pointless. There are various media reports to help confirm this and Twitter has of course become the latest darling of the self-conscious, but I still suspect that there's a place in all this for small biz people to share our pain and wisdom. I just haven't found out where you all are yet. SMEs are supposed to be the back bone of the UK economy now that financial services has imploded. So why aren't we seen or heard other than through the big beasts like the CBI, IoD or BCC? Do any new small biz people really make use of these organisations or are they the mouth pieces of the big and established players?

Lovefilm and Chutzpah

2009-03-24T17:35:00.007Z

Now, according to media reports following the latest consumer pricing index release by the Office of National Statistics, certain things are doing well in recession. Yesterday I mentioned Agent Provocateur, today I learn that Lovefilm is bucking the downward trend. Slightly ironic for me in that when my biz partner and I first started down the road of setting up what we run today, our initial idea was to bring a postal DVD service to the UK. We wrote the biz plan based on what we'd learnt about a company called NetFlix in the US. Having thought long and hard we decided that if we went down this road, as soon as the idea took off we'd get blown out of the water by someone like HMV who had a ready supply of product, relationships and infrastructure. How wrong we were. Lovefilm must have started from the same(ish) base as we were planning to and look them. What seemed to be the difference was they had the balls, bravery, chutzpah and we didn't. It's all too easy in retrospect to see this and we all know that it's easier to get stuff wrong, and go bust, than to hit the big one. But each time I notice stories like Lovefilm I get a little braver inside. Fortune is supposed to favour the brave. But it ain't half scary.

Agent Provocateur says sales up

2009-03-23T17:28:00.005Z

This story made me smile. I like its counter-intuitiveness. But do we conclude from it that in a recession the number of people having affairs goes up or is it that people are spending money on themselves and their partners as it's a) cheaper to stay home and b) no one can afford to get divorced?

And what does that mean for businesses?

Commercial Property Agents

2009-03-20T11:13:00.006Z

They're as useless as the rest of the estate agent profession. My experience today with Christo & Co in Kentish Town demonstrated this all too well. I walked into the office and was looked up and down and treated as if I was interrupting their important discussion. About what?! In a recession are we? Only after I'd left my card, which happens to have the words Chief Executive on it, and was walking out the door did they show any interest. I hope the downturn wipes them out, along with the rest of their profession and something more helpful and user friendly takes their place.

WWGD

2009-03-19T21:11:00.008Z

Having taken a 'concerned' view of all things Google in a recent blog I now find myself recommending what can only really be described as a disciples' guide to the phenomenon. Jeff Jarvis's book is filled with thought provoking ideas for anyone engaged in the frontier world of business online. If you're trading online or thinking about it, I'd say you have to read this. Alternatively you could just read Buzzmachine the blog from which the book is derived. The only reservation I have about making such a recommendation is the risk that others will use the ideas and become my competitors. But, as Mr Jarvis might say, that's not good google think.

UK SMEs not on blogging-line

2009-03-17T17:17:00.002Z

I keep digging around trying to find fellow biz owners and runners who want to share their pain and stories but surprisingly they don't seem to be on-line. Just the long list of (forgive me) non-business people trying to give advice to people who are actually doing it.

I know Business Link are trying much harder these days, especially now their funding cut has been put back due to the recession, but to my mind talking to their agents is like taking to an MBA pre-graduate who's never actually had a job never mind run a biz.

So where are you fellow sufferers out there?

Online Sales up 13%

2009-03-17T09:33:00.006Z

So, according to the BBC, despite the downturn online sales are up on 2008. This is true for our biz, though getting closer to matching last year each day it would seem. But it's heartening to hear that we're part of a trend of sorts and not an aberration.

Adwords and Google Everything

2009-03-16T11:44:00.009Z

Our business is almost totally reliant on Google Adwords. We occasionally slap an ad in a relevant magazine but, as per the old adage, we've no idea how effective it is. With Adwords we get to see the effects directly and truthfully I can't see how old fashioned advertising dependant businesses, including newspapers and commercial radio and TV, are going to survive without drastically changing the way they do things. So here are two questions I'm mulling over.

1. Are we as a business becoming so comfortably dependant on Adwords, and thereby Google, that we're forgetting the basic rules of business by not diversifying in some way? I have no answers to this one yet.

2. What sort of new income streams can conventional (non BBC) media outlets turn to? On this point I have some initial thoughts. Suppose journalists and presenters don't get paid by the newspaper or station but instead run blogs and forums that interact directly with the audience beyond conventional print or airwaves. They make their income from advertising on said blogs and are so directly incentivised to interact with the audience. One immediate concern might be that the best way to get advertising onto your blog is via Google Adsense. Which brings me back to question 1.

Turnover, Gross and Net

2009-03-15T19:26:00.006Z

I'm constantly amazed at how often, apparently sensible, people get these three things confused. I was asked recently what happened to the large profits our biz makes. This person had looked at our turnover and decided that pretty much all of it was spare cash to blow on fast cars and designer clothing. Their question seems to contain the hint that they felt someone with such wealth should dress a little better. On another occasion it became apparent that someone we work with on a profit share arrangement, thought that after his 15% had been paid to him we got to spend the remaining 85% on luxury items. So for the record here's what happens in our biz.

We make about 20% gross profit before expenses. When we've taken off all the running costs we're left with around 8% of our total turnover. From this 8%, we pay 15% of it to the guy on profit share and put aside 22% from what's left for corporation tax. Then we look at what we think the cash flow needs of the biz will be over the coming period and put that aside and finally we see what we think we should put away for a rainy day into reserves. If there's anything left over we might pay ourselves a dividend but often don't for fear that something will happen we haven't thought about. I'm happy to put numbers into this if any one's interested but I hope the point is made. What's interesting is how often I seem to end up explaining this to people. Is it really only people who run their own businesses who really get it?

Mid-month slow down or start of the slump?

2009-03-13T16:26:00.004Z

Maybe Friday 13th gives an added piquancy to the usual mid-month slow-down. Maybe this is the real start of the slump. Whatever the cause, each time I look at the sums they take on greater significance at the moment. All businesses see periods of relatively slow activity all the time but right now it's really hard to take them in ones stride.

Quantitative what?

2009-03-12T15:45:00.009Z

Do any small biz people believe that Quantitative Easing will help them in any way? I think I get the idea. You make money cheap and banks will lend it more freely. But as far as I can tell there's a heavy dose of human nature at work in the behaviour of our illustrious lending institutions at the moment. When something is in short supply and you're worried about how much of it you're going to need in the near future, you get your hands on as much of it as you can, as cheaply as you can, and horde it for as long as you can. So, as before, if SMEs need credit they're going to be in trouble. And nothing HM Treasury or the Bank of England do will change this Darwinian situation until an appropriate number of weaker businesses have gone under.

Businesses that have no debt and low costs should be fine in the long run but have no incentive to expand right now until the storms look like they're passing. In the meantime we mend nets and hold tight.

Small Biz support doesn't get small biz.

2009-03-11T11:10:00.004Z

I'm trying to find a decent forum for people in business to talk openly with each other. Not some patronising Business Link type service, somewhere where the sort of conversations my biz partner and I have can be played out with a wider audience. Anyone know of such a thing?

Where has all the money gone? A question I can't answer.

2009-03-10T14:38:00.010Z

I was having dinner with our accountant last night and after we'd conducted our business, my long-travelling biz partner succumbed to jet-lag and fell asleep at the table. So the accountant and me started the inevitable conversation about the recession. (His biz, not surprisingly, also fits my developing theme of businesses doing OK in the current climate by the way.) We covered the usual bases and then he asked the question I haven't yet been able to answer. Where has the money gone?

I started down the usual route of 'toxic assets' and 'value that never was' and 'securitisation' when he stopped me (to be fare, as a chartered accountant he knows more about this stuff than I ever will and I was probably being patronising) and asked again, where has the money gone? His point was that someone sold said sub-prime house to sub-prime borrower who defaulted, but the money from the original sale didn't disappear. As he developed the theme, I started to see his point. Every share, bond or house that has depreciated in value was bought and that purchase money didn't disappear from the system. It may have changed hands a great deal and many people will have lost and gained but, like energy, it hasn't actually disappeared. Has it? Having worked in banking (never as a banker I hasten to add) and being a bit of a know all, I find it disturbing not to have some sort of an answer.

I recall from various bits of FS training the expression 'slushing round the system' used to depict the phenomenon of money that changes hands but never leaves and which fits with my mate's point. And despite the 'end of the world as we know it' views coming at us like machine gun fire, there must be certain unalterable factors at work in any system and maybe this is one. I'm sure Robert Peston or Will Hutton will have an answer but I'm struck that, in all the acres of coverage, I haven't heard it yet.

What recession?

2009-03-09T11:50:00.004Z

OK so only a fool would really be asking that question. But I posted a note today to say I'm recruiting in my day job and got a response from someone else saying they're doing the same. Our next shipment from China will be twice the size of previous ones. And I keep meeting people who say things are pretty good for them and their business. A boy could get confused....

Taking stuff for granted

2009-03-06T10:29:00.000Z

So I'm walking, though the streets of North London, on my way to work this morning, chatting on the phone with my biz partner who's in a factory somewhere in northern China. He got there via Hong Kong and San Fransisco. Meanwhile I carry on in my day job sorting out the occasional fire in between meetings but mainly leaving things to our four valiant, part-time employees, two of whom work from their homes in France. And never once does it occur to me how extraordinary this is.

Is the competition dying and am I bad for hoping so?

2009-03-04T13:20:00.001Z

I know I am! But it dwells on my mind quite a lot. We often talk about a potential Forrest Gump moment. [You may recall that in the film Forrest buys a shrimping boat but can't catch a thing until one day a hurricane takes out all the other boats and from then on there's more shrimp than they can handle and become rich off the proceeds.] So I keep trying to find out anything I can from suppliers about how the market is faring overall and see if I can't sniff out any gossip about our competition. Maybe there are other ways of getting this sort of information I haven't thought of....

Growth slowing down and media influence

2009-03-04T13:00:00.000Z

So it turns out I was wrong about Feb. We ended up only growing about 1% on Feb 08 which pretty much confirms the trend started last Nov. That said, March has started well and we're through the worst two months of the year, and I can see us having a 2009 similar to 2008 which means no cuts in overhead. I seem to have a different take on things every morning and the daily news intake via the Today programme isn't always helpful. Try as I might to use it as one of many influences, all too often the media seem to dictate my sense of how the climate will affect our business far more than the figures before my eyes.

Green shoots or counter intuitive?

2009-02-26T12:38:00.000Z

As I look at our business in 2009 I can see a definite slowing down of the high levels of growth we've seen every year since we started. Up until Nov 2008 we were always up over 100% on the same month the previous year. In Nov 08 growth slowed to 35%, Dec 08 was 65%, Jan was 17% and Feb looks to be along the same lines as Jan. As it happens not bad given the climate. But are we taking market share in a declining market or is the market not shrinking to the extent that media reports would have us believe?

I know, wearing a different hat, that market condition in Camden Town are better than expected for lots of businesses http://tinyurl.com/dfojvm and wonder if others have similar experiences?

The business of football and investment...

2009-02-23T11:55:00.000Z

As I watch this season's English Premier League unfold I'm struck by the difference in the fortunes of two clubs who, until recently, were the only clubs really in contention for the title each season. Namely Manchester Utd and Arsenal who from the time the premiership began in 1992 to 2004 all but shared the title between them. Since 2004 however Arsenal have not won a single trophy whilst Man Utd have won two titles, as well as the Champions League, and are well placed to make it a third in succession. The other player in the field in this time has been Chelsea who seem to have taken over from Arsenal as Utd's main challengers. Liverpool have also risen from also-rans to title contenders for the first time in may years. The big and obvious difference between Arsenal and the other three clubs seems to be ownership and thereby investment. Now I'm not suggesting that football is an ideal candidate for study for those trying to draw lessons for business in other sectors. However it would appear that there is a compelling argument that had Arsenal allowed a single investor to take over the club, as has happened at the other three top four clubs, maybe they'd still be in contention rather than struggling to make the Champions League play offs.

What's got me thinking re this scenario, is investment levels in my own company. To date my partner and I have been very keen to avoid taking on debt or giving away equity as we want to remain in control of our own destiny and are fairly risk averse. And to date this strategy has served us well. We've grown from zero to £1.2m turnover in five years with only a very small amount of capital (from another business of mine, which has all been repaid) and bits and pieces from our own pockets. We've financed this by taking very little money out of the company so we can reinvest in our own growth.

So my question is, is now the time to consider taking on some sort of investment so that we can remain in contention or are we doing just fine as we are? Thoughts anyone?

So what is business all about then?

2009-02-18T11:42:00.000Z

The longer my biz partner and I have run our company the more complicated, yet ultimatly simple, it seems to get. There are definitely difficult decisions to make on a daily basis regarding pricing, suppliers etc. But the thing that makes it hardest is people. Logic is not the first point of call it would seem when people interact with a business. Be it as customers, contractors, employees or suppliers. Yet dig a little below the surface and a sort of logic begins to reveal itself. From their position certain things do make sense, even if from the business's perspective, and thereby thier best interests ultimatly, they seem odd. Business is mainly about logic and people. But people and logic don't always seem to fit well. Hmm

In the begining.....

2009-02-17T12:20:00.000Z

ASMP began life as Jam Sounds Music in 2004. We started selling download music of unsigned artists. But then iTunes came along and we moved into ringtones (not long before the crazy frog!) before settling on pro-audio equipment for a while. That expanded into Fitness Equipment and Table Tennis as well as a sites including Chilloutspace and Startsport.