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

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.

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

I thought this was a helpful piece on the topic.

Leadership

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

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

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

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?

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?

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%

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!