The Bannatyne way, or the Osborne way?

I read Duncan Bannatyne’s autobiography last year, and must confess to finding it a good inspirational story. However I’d like to use one piece of advice he gives in his book that goes against much of the advice offered by many business advisors, and that I myself also disagree with.

My first business wasn’t a great success. I ran it for two years and it pretty much as good as went out of business. My second business struggled for the first couple of years, and that also nearly went down the pan until I changed my ways. It’s now a great success, so what changed? Well quite a lot of things changed about the way I approach my business, and one key area was that I started to use professionals to do things instead of struggling to do everything myself.

In Duncan’s book he gives reference to two examples. One is that he learnt how to form a Limited company, and then completed all the paperwork and formed his first business by himself. The second is he gives reference to learning about the legislation involved in running a nursing home. He then advises that you shouldn’t waste money paying other people to do things when you can in save that money and do the “thing” yourself. This I firmly disagree with, and I’m a true example of why it is wrong to take on that apprach and here is a couple of examples why.

Websites: I have lost count of how many businesses have poorly designed websites that they have tried to do in house to save money, without realising that all they are doing is making their businesses look too tight fisted to create a professional image of their organisation. They look tachy and I’d never deal with a business who takes pride in promoting a lame public image of themselves.

Business Cards: When someone passes you a business card printed on cheap do-it-yourself paper from a cheap stationer. Realistically it would cost you less than £50 to get some better quality business cards printed from a high street printer, on card. If you can’t afford £50 for business cards then you need to relook at your budgeting and startup costs.

Both the above reflect the impression you are giving other people about your business, and you should be thinking about creating a professional image. You want to portray a sustainable business that is going to be around for a while, not that of a business that can’t afford basic business cards. As for a website, it is better to have nothing at all than something that makes you look like an amateur.

Duncan does suggest contacting the relevant Government organistations and ordering their handout booklets to read and learn about whatever it is that you need to comply with. Personally I feel this is a waste of your own time, when you should be focusing your energies on growing, developing and selling your business. If I relied on the Government guidance on how to comply with the Money Laundering Regulations I could inadvertantly find myself breaking the law because their guidance is riddled with contradictions. If I followed their guidance on how to comply with the umpteen million different Emplyment Legislations I again could find myself breaking the law without realising, or worse still, I could find myself drowning in so much paperwork I’d never find time to run my businesses.

My advice is manage your time. It is actually sometimes a much more efficient and cost effective use of your time to use professionals to do what they are good at so you can get on with running your business safe in the confidence that “whatever” you could have done yourself more slowly has been done more quickly and professionally by a professional. I now surround myself with professionals who know how to do things much better than I do. I technically can do the programming that powers my Efiling business, but it is a much more efficient use of my time to pay others to do it better than I can. I could also technically learn how to write my staff contracts, but it is a much more efficient use of my time to pay someone else to do it. The end result is that my businesses get the attention from me that they need to grow and develop, and not have me tied up in books, leaflets and other unnecessary paperwork.

Using Duncan Bannatyne’s example of forming a Limited company. It probably cost him about £40 all in to form one of his companies himself, and by the time he received all his paperwork back it would have been about a week. So that is about 5 hours of his time learning and form filling, £40 paid out, and a week delay in delivery of his Certificate. He could have paid my “professional” company to do it for about £50, took him about 15 minutes and we would have had the paperwork back with him the next day (quicker than Companies House directly).

Even multi-millionaires can learn something from us mere trainee millionaires.

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Working with your competitors

Earlier this week my salesman for E-filing Limited was calling through a number of company formation agents doing his job, selling the services of E-filing. He was doing a pretty good job too.

He did hit a problem with one company, a problem which I had anticipated but I would never have guessed it would happen with this company in question. To understand why I’ll give you a bit of history.

When I started Quick Formations in 2002 the Pay-Per-Click market was pretty new in the UK, and at the start there was only myself and one other company formation agent bidding for key positions on the likes of Yahoo!, MSN, etc for our industry’s main search terms. It reached a point where we were trying to outbid each other and the end result was that we were paying way over the odds per click on our main search terms costing us both a fortune. It was a rediculous situation and needed to be sorted, so I gave the other company owner a call. We agreed to alternate weekly who would hold 1st place and the other would sit in second place. We had a gentlemans agreement between competitors and it worked very well… until the competition in the industry increased and then it just didn’t work because there was too many people. Whilst it was working though it saved us both a small fortune, a simple example of competitors working together.

So this company owner having experienced us working together, I was most surprised when he said he wouldn’t deal with E-filing because we are the “competition”. As a side note, the two companies are actually run and handled independantly at arms length .. just clarifying that point for the readers :-) .

As a business owner I spent a lot of time talking with my competitors. We share knowledge about our industry with each other, industry gossip, and market trends. Some of them I have become friends with and often enjoy a round of golf or good long ol’ chat over the phone or lunch with. I have learnt a lot from their strengths and they have learnt a lot from my strengths. The end result is that each of our businesses have become stronger and more profitable.

That is not that you should run off and become all buddy with all your competitors and give away all your trade secrets, because I have also been bitten quite badly by someone who after a year of chatting on the phone at least weekly double crossed me quite badly. So you must tread carefully when getting into contact with competitors and building these relationships, because some of them will be just out for the take, but there are others who are genuine professional business people. They are the intelligent ones who share a common goal where everyone wins, and these are the ones you need to seek out and work with. Share and share alike, you help them and they will help you. It’s all about give and take.

This is where E-filing Ltd works so well in that when I speak to my customers of E-filing I share knowledge I have gained from Quick Formations with competitors of Quick Formations, we all bounce ideas off of each other. The results speak for themselves, QFL wouldn’t be doing as well as it is today if I thought I knew everything and did everything based on my own opinion alone. It is good to bounce ideas off someone not only in the same situation as you, going through the same experiences as you, but in the same industry as you.

My advice for today, if you want to move your business forward at a significant rate work with your competition. By doing this both businesses will benefit, and you need to be willing to help the competitor(s) you work with. If you are not willing to do this then don’t bother even considering it.

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The Importance of Shareholders Agreements

In the day to day activities of my Quick Formations business we frequently deal with people who are setting up a business with a friend or family member, or even an old work colleague. These people are always keen to work together, they have a shared vision or dream, and know they are going to be successful.

Unfortunately for 50% of these people, their relationship is going to break down and their business is going to suffer significantly as a result. The meeting I had this morning is no exception.

We have two married couples setting up in business with their business owned 25% by each person. Everything straight down the middle, it couldn’t be fairer. They were all very keen to get started, and really motivated to make a success of their new business venture.

You only have to look through some of the posts in the Legal section of the UK Business Forums to see exactly how many people find themselves stuck in a situation with a business partner they no longer want. It’s a sad story, but one that could so easily be resolved by spending some time working out how to deal with all sorts of situations before they arise. How will each person be rewarded, salaries and bonuses. What about if someone wants to break from the partnership? You agree all this at the start, whilst you are still talking to each other and not through solicitors!

I’ve recently got involved in a new business venture with someone else called UK Golf Forum, and acquired a stake in another business venture called Calltracks. One of the first things I ensured was done in both instances was have a shareholders agreement drafted and signed, because I was one of those unfurtunate people through bitter experience lost hundreds of thousands of pounds through a bad business experience. I had no shareholders agreement in place, and did not take proper legal advice. I’ve since learnt from that experience, and found the experience a valuable learning curve – although I was pretty upset at the time as I’m sure you can imagine.

I used two firms to write my shareholders agreement for me. The first for UK Golf Forum was written by a gentleman called Ian Mason from Mason Bullock Solicitors, and the one for Calltracks I had written by a lady called Andrea Wyld from Franklins Solicitors. I received an excellent service from both firms and can highly recommend both, my advice is call both and deal with the one you feel that grasps a better understanding of your business. This will be important when drafting your shareholders agreement for you.

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Judging the Young Enterprise Awards

Last week I was asked by a nice chap called Robin Neighbour from Young Enterprise to be a judge for the Daventry and Northampton Young Enterprise Awards. Of course I was more than happy to do so, and am happy to say I will be happy to do so again.

I found this event extremely valuable to be involved in, and gave me a great insight into the minds of our future generation of Entrepreneurs. I also enjoyed the fun debates with the other judges, who me being me I often disagreed with. Particularily because they generally came from a corporate background and I came from a more Entrepreneurial background, and this is part of the problem with the UK’s economy when the Government base their budgets on corporate policy.

The best example came about when trying to decide who the final three should be. I wont go into any more detail than that because it wouldn’t be fair to expand any further.

We had narrowed the decision down to 4 companies. Two were unanimous, but the last two I thought one and the other two judges thought another. They felt company C should be in the final three because they had made a lot of profit exploiting a small market in their school, but I felt company D should be shortlisted because they had a niche market and a more sustainable business model. However company D had not made as much profit as company C.

Tough call perhaps, but do we award people for making a quick buck without considering the long term consequences? Is this the sort of Entrepreneurial culture we want to develop? Personally I do not think so, I believe we should develop a more calculated and thought out economy where long term consequences are considered where businesses, and our environment, are more sustainable. We don’t want our future run by a load of fly-by-nights. We want job security. We want stability. We want a future that will last, even if the profit margins aren’t as high as perhaps they could be, so long as it is sustainable.

I’m pleased to say I argued my case well and the other judges agreed with me!

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Train from Within, Develop Loyalty

Last week I made one of the most difficult decisions of my Entrepreneurial Career, I changed my accountant. I’ll tell you a little bit more about that another time, but for now I want to tell you about a disagreement I had with my new accountant .. and why I think he is wrong, although right in many ways.

The case is this, I am in the process of developing a member of my staff to take over the reigns of one of my businesses. This project is likely to take 5 years to complete, by which time she’ll have an equity stake in the business, and received all the training and support she will need to do a great job. She will be loyal, she’ll know the business inside and out, and she’ll share the ethos and ethics of the business to run it successfully whilst maintaining the company image and reputation as I have built it.

My new accountants argument was that I should have recruited a Managing Director to come in at the top to take over the business almost immediately. This would free me up immediately to focus on my other business interests, which is something I don’t have a lot of time to do at the moment but wish that I did.

So why is he wrong? He is wrong because this new MD will be monetarily focused, and will more than likely leave as soon as someone offers more money. This new MD won’t know my business the way someone who has worked in it for a few a years will, and want to make their mark. More importantly for me though, this new person coming in above my staff who have always reported direct to me will upset the balance and probably put a few noses out of joint. I could end up losing some important staff in the process.

However, why is my new accountant right? He is right because in the cold hard world of business when the core focus is profit his method is the right thing to do. If I want to be extremely wealthy, and my businesses are just a way to make myself more money, then I should not be so focused on keeping people happy but more focused in building my wealth.

Unfortunately for my accountant though, that just isn’t me. I make a nice living, I am happy with my lifestyle, so I’m happy to put myself out to further the career of my staff who are loyal and supportive of me. If that means I have to work a few extra hours, if I don’t have the time I’d like to devote to new business projects, I don’t mind because I know in the long run it will pay dividends! My new MD will be a lot more loyal than someone I could poach from another business.

So what kind of Entrepreneur are you? There is no right or wrong decision to make in a situation like this, just a right or wrong decision for you as an individual. Would you bring in a new director to run your business, or would you identify a hungry individual within the business to train and promote?

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Inspiring Young Entrepreneurs

Those who know me personally, or have read this blog for a while, will know that I firmly believe that our economy is a small business economy and to keep our economy afloat we should all be encouraging the next generation of Entrepreneurs from a young age.

So imagine my surprise after a young lad, Ben, interviewed me on Thursday as part of his dissertation to be told that out of a list of Entrepreneurs he’d already interviewed at 40 minutes my interview lasted the longest. I’d shared with him more insight, stories and information than anyone else, and he even commented that one interview lasted 10 minutes with the “Entrepreneur” answering most questions with “I dunno”! How on earth is that person still in business?

Ben asked me whether I felt that Entrepreneurialsim can be taught, and hoping I didn’t knock the University course he is doing, but I said no I don’t believe it can. I believe Entrepreneurialism is born out of an event that triggers the person to make a decision for themself and make a future for themself. I do, however, strongly believe it can encouraged. To inpire young people of the challenges, the highs, the lows and wonders of running your own business and being in charge of your own destiny.

He also asked me whether I was taught the skills to be an Entrepreneur at school. To be honest I do not believe so. I don’t believe I became a true Entrepreneur until my daughter was born and my first business started to go horribly pear shaped. It was the need to secure a future for my child that drove me to become an Entrepreneur, where failure was not an option. That was my event, my trigger, and if you look through the past of any Entrepreneur and read any autobiography you’ll find similar triggers.

I’m not saying I wasn’t hungry for success before then, because I was. In my working career and childhood I’ve always been competitive and determined to succeed, but it was that one trigger that flicked a switch inside of me and gave me that extra push to take things more seriously. I had a dependant, and her future relied on me.

It is these stories that Ben wanted to know, not big trade secrets to rip you off. So if you are an Entrepreneur don’t treat it like some big secret, don’t be afraid to share your experiences with the next generation of Entrepreneurs. They are our future, the future of our economy, and it is extremely rewarding to feel their enthusiasm as they talk with you about your experiences. Further more, you can also learn a lot from them too.

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Get the most out of using a forum.

Many business owners and managers are used to networking; we do it all the time under many different guises. Whether you play golf, go to lunch events, am a member of your local Chamber of Commerce, or simply going down the pub. Networking is all around us in everything we do and take for granted.

A friend of yours from your local pub is a plumber, and someone else you know asks you if you know a plumber, you naturally recommend your friend from the pub because he’s a mate and you know him. This is the most basic principle of professional networking which organisations around the world rely on, referrals and recommendations.

What millions of people around the world haven’t got to grips with yet is online networking. The use of social networking websites such as Facebook, MySpace and YouTube in business are frowned upon by many, but utilised to great success by many. The use of networking websites such as UK Business Forums and Ecademy are seen as time wasting and even skiving by many business owners. They are making such a huge mistake, and should be ranking their time on websites such as these up just as high as attending professional networking breakfasts and time on the golf course. In fact, they should be ranking them higher because the exposure they bring in worldwide.

If you in doubt as to what value online networking can bring to your business please read my previous article on the subject from my blog at http://www.ozzy.co.uk/blog/2008/01/16/networking-as-cost-effective-marketing/. In an attempt to help those who have yet to utilise the exposure and value online networking can bring their business here is a follow up article on how to get the most out of using Internet forums, and how to present yourself to the world through them.

The first decision you need to make is choosing which forums to use. There are hundreds out there and no-one will have the time to use all of them, in the same way that it is not physically possible to attend every networking breakfast, lunch and dinner in your local area. My advice is to select one major, large forum to take part in and then a small handful of industry specific forums. Using a search engine such as Google and typing in “business forum” will bring you a nice selection to choose from.

Once you have found you list of forums to choose from read through some of the activity on there and get a feel for the ethos and atmosphere of the forum. Does this look like the sort of community you would feel comfortable in? If so, register an account and let’s get started.

When registering an account you will be given the option to create a Username. This is the name which you will become known by on the forums, how every one will recommend you to others and the “nickname” you will become known by for ever more. For that reason you need to think carefully, do you want to use your real name or your company name? Or does your actual nickname sound professional enough to stick with? Give this some serious thought because in some circumstances it cannot be changed, and you could be stuck with whatever you choose here. Common favourites are the member’s company name, or an abbreviated name. Very rarely will someone choose something which could reflect them in a bad light, for very good reason!

Some forums require you to confirm your email address after you register, and your account will not be activated until you do this so look out for activation emails in your spam folder in your email and do what it says. This is usually just clicking a link, or visiting a web page on the forums and entering an Activation Code. Don’t start posting or email the forum moderators sayings “Why aren’t my posts showing up?” if you haven’t activated your account. It can become very annoying for the moderators when this continuously happens.

So I’ve activated my account, do I start posting now? Nope, not quite yet! You need to check the rules of the forum and make sure you don’t break any. The last thing you want to do is start off on the wrong foot and be seen by the forum moderators as a spammer.

So what is a spammer? What constitutes a spammer varies from forum to forum, and you need to be sure you’re on the right side with each forum you take part in. For example, on some forums you will be allowed to openly promote your business as and whenever you wish and this is perfectly accepted, however on other forums this is not allowed and your account could be banned without warning. You need to either read the rules of the forum which should be displayed in either the FAQ page or a dedicated rules page, or in the case of some forums they evolve and you need to gauge what is and is not accepted by looking at how the conversations flow on the forum by reading it.

If in doubt, do not blaze in with lots of messages about how wonderful you and your business is, instead go for the softly softly approach. Even worse than the all guns blazing approach, for heavens sake do not try and pretend to be someone else recommending your service. It is very easy for the forum moderators to spot this sort of activity and then publicly make a mockery of you and your business – to the whole world.

You want to get the most out of this forum, you want to be able to promote your business and become well known in this new community, so it is worth taking the time to do your research and find out about the people you are about to start socialising with and the rules of engagement for each forum. Just because this is the Internet it doesn’t make it any different than real life. If you were about to attend a new networking event your area you would do exactly the same, so do it here online.

So now do I make my first post? Patience my friend, we’re almost there! Some forums allow you to setup a Profile for yourself. This is a little page on the forums that tells everyone else a little bit about yourself, your business, links to your website, and much more. When you make your first post this is the first thing that everyone will look at, so you want it to be as complete as possible and tell these people about you. Each forum is laid out differently, but look for a menu options such as Edit Profile or UserCP (short for User Control Panel). Go through all the options in these areas and complete them as best as possible. Her you can usually put all sorts of sales information about your company, the services you offer and links to your website.

Some forums also allow the use of signatures in your messages, and each forum has different rules about what is and is not allowed in the signature. As you would have checked out the rules of the forum you would by now know what is and is not allowed in the signatures.

What is a signature? This is a small message or strapline which is appended to the end of each message you post on the forums. Depending on the rules of the forum, this could be a link to website, your company slogan, or a special offer you are running at the time.

Some forums offer extra levels of membership, usually charged at a small fee, which allow you to have extra functionality for your account. This can be an increased profile, use of extra images for your profile or Avatar shown alongside your posts, and also increased or extra features for your signature. It is definitely worth giving consideration to what extra exposure you would get on the forum from having a heightened profile. An example would be the UK Business Forums which currently attract some 5,000 unique visitors a day. Is it worth paying a small fee to have your contributions and profile on these sorts of forums increased in exposure or not? Only you can make that decision.

Ok ok, I’ve got done all that. Now can I make my first post? YES!

One of the most important things you must keep in mind when you use the Internet to network is that how you present yourself is how your business will be perceived. If you are short and obnoxious then your business will be perceived the same. However, if you are polite, courteous and helpful then that is exactly how your business will be presented.

It amazing me sometimes when I participate on Internet forums and people seem to forget that they are talking to other human beings. I once changed my mind about doing business with a company based on the way they conducted themselves online, and I know that hundreds of other people have done the same. Speak to others how you would like to be spoken to yourself, be courteous, and friendly, and make use of smilies and emotions if you are ever in doubt about how your written message could be received. It is common knowledge that written messages (whether in emails, letters or forums) can be misinterpreted, so take this into account when you write your message.

What is a smiley? A smiley is an image which is commonly used in Instant Messaging, Emails and other Internet based communications. They are called Smilies because of the smiley faces they represent, and they are used to represent the tone in which the message is meant. Usually you will see a selection of smilies to insert into your message alongside the text box you type your message into. A smiley face to show you are happy, a sticky out tongue to show you are being cheeky, and so on.

Most forums have an Introductions or Welcome area. This is where it is generally regarded as good manners to make your first post and introduce yourself. Consider this area your elevator pitch, your 60 seconds as you will. Make a short post telling people a little bit about yourself, why you joined the forums, what you want to get out of them, and what it is your business does. You would then usually get a few welcome on board responses from some of the existing members, and also perhaps a little bit of interest in your business and what you do. Most people would have also taken a look at your profile, which is why it was important to get that setup before you started posting. Your profile would have told these people who have an interest in what you do more about your business.

You’ve said your hello, now how do I really start getting maximum exposure out of these forums? By helping out and becoming part of the community.

Do you ever wonder why some people are networking meetings seem to know everyone, why these people seem to be welcomed by everyone else. Wouldn’t you like to be as well known as these people? So everyone knows exactly what it is you do and what your name is?

These people are well known because they are always around, welcoming newcomers to the networking events they attend, getting to know the organisers, introducing themselves to others, and making connections between people they know. This is exactly the same on forums.

Look out for questions you can answer, or people looking for services where you know someone who can help them. Welcome other new members so they remember you as one of the friendly “faces” who made them feel welcome. Most importantly though, become known for a specialism on the forums, and ideally that should be your area of expertise in your business. So if you work in Sales and Marketing, help other members out with answers to their sales and marketing questions. You may feel you are giving information away for free which you may normally charge for, but that is the beauty of forums. They are a medium of sharing information which ultimately lead to warm leads and sales, because if that member you helped out with that question needs any more help the chances are they will remember that person who gave them that really helpful answer on those forums.

Don’t be a flash in a pan. If you pop along and spend a few days on the forums and then leave because you didn’t get any sales then I imagine you are also one of those people who tried networking but stopped because it didn’t work for you, yes? Networking is all about relationships, and that doesn’t matter whether it is online or face-to-face, it’s exactly the same for both. You need to build relationships on these forums first, become known by many of the other regulars and before too long they’ll start recommending you to other members who they know you can help. The larger the forum the longer this can take, but the bigger the potential rewards. So it just depends on how patient you are.

Respect the moderator’s decision. The moderators of a forum are put in place to ensure the smooth operation of the forum, and to intervene when in their opinion something on the forum is not going in the best interests of the forum, or in the interests of the forum owners. Moderators are usually unpaid volunteers from the forum community, who do a task where every decision they make can be questioned by the community and shouldn’t be. Remember that you are in someone else’s venue so play by their rules, “When in Rome…” as they say. You may at some point have your own messages moderated or even removed; I have on a few occasions. Appreciate that this will happen occasionally, don’t dwell on it. Just move on and respect that you may have posted something which did not fit with that particular forums guidelines or rules. Would you walk into a pub for the first time and then start moaning at the bar staff that you don’t like the way they run their pub? Well you might, but you might not be welcome there again in the future.

Finally, manage your time well. Some people say that online networking is addictive, and it is. If you are not careful you could find yourself spending far more time on Internet forums than you should, so set a time limit and stick to it, just like you would manage the amount of time you would spend down the pub, at networking breakfasts, and so forth. Treat it as a business commitment just like any other which needs to managed as close as your diary.

Enjoy your new forum networking experience and I hope to you see around online, Ozzy

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Get your prices right.

When a business starts out and you go for that all so daunting meeting with your business banking account manager one of the first questions, after “do you want a loan” is usually, “what is your unique selling point”. And this can be the stumbling point for many a company.

A common mistake so many entrepreneurs make when they start their own company is to set their prices too low in the hope that a low price will attract new customers and they label this as a good USP.

In reality, what this actually does is attract the wrong kind of customer, the kind of high maintenance customer who shops on price alone and drains the supplier for every drop of blood they can get out of them.

What the entrepreneur should be doing is focusing on providing a quality service or product at a price that reflects that quality. This enables you to filter out the chaff from quality clients who you really should be concentrating your efforts and enthusiasm on. Someone who is prepared to spend sensible money on a quality product is a much better value customer than someone who haggles you down to the last penny at cost price.

And to be honest, would you not get more satisfaction if you could spend more time engaging with and helping the customers who truly value your services rather than those who are going to be beating you down on prices every day.

This is a regular hot topic on the UK Business Forums (www.ukbusinessforums.co.uk) where new business owners pop online and ask what the other members feel is a correct price to charge for their new product or service.

I recently spent some time with an IT support and computer supply company where the MD had no time to focus on growing his company as he was always running around dealing with customers all over the county. His profit margins were practically non-existent, so even if he wanted to he couldn’t afford to expand his business.

He had to finish our meeting early because he had to run out and sort out a broadband connection at one of his clients homes. I asked him how much he was going charge, and he replied £10 plus VAT. Taking into account the 30 minute drive there and about an hour on site, followed by a 30 minute drive back, that worked out a whopping £5 per hour charge, not including petrol. It’s no wonder he is making no money, and his excuse was that he didn’t feel his clients would pay any more.

Maybe some of his existing clients wouldn’t, but I responded with the other argument. Find some clients who would pay more. I, for example, would think of nothing about paying £70-80 for an engineer to come to our site and fix our office broadband connection if it ever went offline. My business relies on the Internet and it costs me more than that in lost business if I’m offline for an hour.

I’m not an exception either; I am a typical business client who realises the true value of a quality service from a professional. This is what small business owners should be focusing on, attracting the right kind of client and then once you have them look after them.

It takes courage to be bold enough to set your prices at what you really should be charging, and it will go against every instinct in your body saying “I need every order I can get”, but the realism is that you don’t need every order – you just need the good quality orders. The added bonus is that it puts true value into your service, a quality value that will reflect well when approaching potential clients. I use an example of this when I made the mistake of being too cheap myself.

I was once introduced to a large pharmaceutical company to do a contract as one of the board members at the company was a close friend who had opened the door for me. The deal was as good as mine, so I did my quote making what I thought was an OK profit but not too expensive as I really wanted this order. I was making £5,000 profit. I lost the order to a large blue chip corporate company who went in £19,000 more expensive than me!

When I asked my friend why I lost the order he explained it was simply because I was too cheap. The rest of the board was concerned that I would not have been able to provide the quality of service they wanted because I was so much cheaper than the other price. If I had been just £5,000 cheaper then the order would have been mine, and I would have made an extra £9,000 more profit on that order!

Although an extreme but very true example, the same applies on a much smaller scale. If you are running around trying to service too many customers who are not paying enough, give serious thought to raising your prices and go after a better quality of client. It is better in business to have less clients paying sensible rates and making a sustainable profit, than having hundreds of customers paying low fees and you make a loss.

You may even be surprised to find that most of your clients may actually be happy to pay you a higher fee. I know I sent this IT guys invoice back to him for my laptop repair and told him to double it! I want him to still be in business a year from now looking after my own office network.

The article may be freely distributed and copied subject on the condition that credit is given to myself with a link through to www.ozzy.co.uk

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Networking as Cost Effective Marketing

The first time I was invited to attend a business networking event was some 8 years ago by a printer. He said it would be good for my business, and that they had a slot for my business category. I had no idea what on earth he was on about, so he then explained that all I needed to do was turn up at 6:30am with a one minute presentation prepared for my business. I would then have the perfect opportunity to stand up in front of about 30 business owners and present my business to them.

That was it; I near as hell had a heart attack and made my excuses. I was busy, family issue, sorry thanks for the offer but I won’t be able to make it. The very thought of walking into a room of other business owners and standing up in front of them scared the hell out of me.

I now realise that I had already been networking since I was about 5 years old. When you start school you go into a room of other people all in the same boat as you, and you start to make friends with them, getting to know them all one by one. Business networking is no different really, and it does help to realise that everyone feels the same as you no matter how confident you think they look or sound. They were all first time networkers once and were all just as nervous as you the first time they attended a networking event, or their first day at school.

So how can networking improve your profit?
Well first of, and more importantly than anything else, networking is not about the instant win. If you expect to walk into a networking event and come away with a signed order you are likely to be sadly let down. Networking is all about building relationships; it is called “Farming” in many networking circles. You also have to take it seriously, there is no point attending a networking venue once and never going back again as no-one will ever remember you. You need to attend these events on a regular basis. It is about getting to know those other people in the room, gaining their trust and respect, and then if that goes well they introducing you to other people they know who could use your services. This is referral marketing, and it only costs the price of a full English breakfast! What’s more, these people you meet will happily refer your business to everyone suitable that they meet forever more.

Networking is also a great way to meet new suppliers, new friends and also a great way to build a great support network. Before I started networking I was as nervous as hell standing up in front of people presenting my business. I now happily enjoy standing up in front of crowds of hundred or more people and giving a presentation on anything from networking to my own business. Networking has helped boost my confidence and improve my presentation skills, and it’s all included in the price of a breakfast.

Networking doesn’t have to just be face-2-face; there are online networking communities you can take part in also. There is obviously my old website at www.ukbusinessforums.co.uk, and on that website you can network with a community of over 17,000 other business owners. There is also www.ecademy.com, a hard core networking website which is broken down into what they refer to as “Clubs”. The same principles apply to online networking as do to personal networking. It all boils down to relationships and trust, not the instant sale which so many people fail to grasp. These are the same people that say “Networking doesn’t work for me or my business”, and they wonder why.

Can you imagine how laughable it would be if some crazed lunatic ran into a hall of 80+ business people, threw his business cards up in the air shouting “Buy my great widgets off my website, they are great” and then ran back out of the room never to be seen again. Everyone would laugh at how ridiculous he was and then forget about him by the next day. No-one would look at his website, and no-one would trust him or his products. This principle is even more important with online networking. Those who visit online networking forums, post a message online saying look at my website, and then are never seen again just have their messages deleted and no-one takes any interest in what they have to offer. Now those that contribute on the forums and become part of the online networking community become trusted and known as experts in their field. They are the ones that benefit from networking.

There are hundreds of different networking organisations and events in every area around the world. I’ve pre-booked myself into every single Chamber of Commerce and FSB networking event in my area from now until the end of the year. There are professional networking organisations such as BNI, BRE and others which I’d also recommend giving a try. There are even fun networking clubs, and next week I’m going to a Networking Curry Club and tomorrow I’m playing Golf at a professional golfing networking event. I’ve even been known to try my hand at Speed Networking, which was an experience!

If you want to try your hand at networking, and I strongly suggest you do, then the following are a few good places where you can find out what is happening in your area;

  • Contact your local Chamber of Commerce and ask their Events Team what networking events that have coming up.
  • Contact your local FSB representative and find out when their monthly breakfast is on and where.
  • By a copy of your local newspaper on that day that comes with the business supplement, they usually contain a list of up coming networking events.
  • There is most likely to a business advertorial paper in your area, subscribe to receive that on a regular basis as it is likely to also contain details on local networking events.
  • Look on the BNI and BRE websites for your area and contact their Chapter Directors’ saying you would like to come along as a visitor.
  • Finally, don’t forget to ask everyone you meet at every networking event if they know of any other networking events in the area that you could attend.

Another couple of tips to take into account when you do start networking first don’t waste the back of your business card. Make sure your business card contains all your contact information as well as information on what your company does. I see hundreds of business cards that look really pretty, they do honestly, but I haven’t got a clue what the company does. Secondly, there is almost nothing more embarrassing than going to a networking event and not having any business cards to hand out. I’d recommend taking no less than 50 business cards out with you when you go networking, but ideally take a hundred. The last thing you want to happen is to be talking to someone who says “Ah you’re just what a friend of mine was looking for, can I take one of your cards to pass to him?” and you reply with “Oops, sorry, I don’t have any”. Always make sure you have plenty of stock of your business cards and carry plenty around with you.

Why do I network? Well in year 2004 I spent just under £100,000 on PR and Marketing in my business and did no networking, in 2005 I spent just under £80,000 in PR & Marketing and just started networking in the summer of 2005. This year I might reach £20,000 in my PR & Marketing budget and I heavily network. My turnover for those 3 years remained fairly constant so where do you think that spare £80,000 I was spending on PR & Marketing has gone?

That, my friends, is why Networking is a Cost-Effective Marketing Strategy.

This article may be reproduced on the condition that it is kept entirely intact and credit is given to myself with a link back to www.ozzy.co.uk

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Get off your backside, be a Do’er.

A good friend of mine is always coming up with ideas for businesses he wants to start, and several times has asked me to get involved either on an advisory role or as one of those frequently mentioned “investment opportunities” :) .  Unfortunately for him, some of his ideas sound quite promising, and could perhaps grow to be very successful. So why is that unfortunate?

It is unfortunate because he does absolutely bugger all with his ideas. He mentiones them, bounces off all the walls with excitement, but does nothing until a few weeks later all is forgotten.

Originally I got quite involved with some of his ideas and was considering investing in one, but as I got to know how he  procrastinates and never actually does anything I too lost interest and started to see him as a very high risk investment. My money would end up doing nothing more than paying his wages to do nothing, until the pot ran dry and we would eventually fall out.

The world is full of people who talk a good game, but very few actually make things happen and try their ideas. I almost lost my home a couple of times because I took the risk on my business ideas, my friend will never take that risk. He will forever more be what some call a “wage slave”, despite running his own business he always takes the safe long term contracts with the guaranteed income. There is nothing wrong with this though, an old boss once said to me the world needs worker bee’s just as much as it needs leaders.  What kind of person are you, if you are an Entrepreneur then you are a Do’er, and you will make your business ideas happen at any cost.

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