Please wake up and Smell the Recession

I spent three hours working hard with someone this morning who walked out of the meeting with nothing. Therefore I walked out with nothing. What is the point of trying so hard to help someone inject some strategic thinking into their business if they refuse to take any of the suggestions on board?

Pardon my tone of dejection but it has been a while since I met such an ostrich. No offence to any real ostriches out there reading this here blog ;o)

It is a long time since I've seen such an enthusiastic approach to head-burying.

Take a business, over 20 years in operation. When they started up they were pretty much the only operators in their field - well done, blue ocean etc., marvellously opportunistic.

5 years on, the Celtic Tiger arrived and the business grew organically by word of mouth, and has continued to do so since then. (Cue thoughts of "is that it? Could they not have grown some more?" and yes I would agree but I'll get back to today...)

PROBLEM
They have never had to go out and look for business in their life - not once. It has all sort of just landed on their doorstep - OMG what luck.

And what happens now?
They are now not alone in their market. Lots of other - business hungry - people have entered their area of expertise over the last 20 years and what's more, they're good at it.

What ever about the alarming fact that this morning's "business" person did not even know who their closest competitor was (how have they survived!!) - my main worry was providing them with the basic tools they need to survive from here on in. They need to drastically change their strategy and start listening to their customers. At the moment they are manufacturing product and simply waiting for the clients to come along and buy it, without finding out if they want the stuff in the first place!

A bit of research, a bit of listening, a bit of reflexion wouldn't go amiss. This morning was just soul-destroying: at every opportunity the business person turned around and told me all about how they have operated in business up to this point. They are worried and stressed all the time, haven't paid themselves a wage in over 12 months and called me up asking for help. If they had the good sense to ask for help, why wouldn't they listen? I was so confused...

I think I have it now though. I just don't think their heart is in it. Looking for work now is too much effort for them - they have only survived because running a business until last year was easy for them. Rethinking strategies, networking, doing a simple competitor analysis, a SWOT on their own business, looking at trends in their marketplace - all too much like hard work, not at all appealing.

My goodness. It really is a wonder they got this far!

Rant over, apologies one and all...

Just call me Graham

Because here I am with a quick reminder...

The SEEDCORN Competition is closing next month. If you have not yet started to prepare your application please take a look soon - I underestimate the time it takes to do a business plan. It's important to make it as good as possible. The last BP I did took 11 revisions before I sent it out to be read by anybody else so imagine how long that took. (Three months).

Seriously, if you're looking for funding, consider Seedcorn - what have you got to lose?

The other one usually around this time of year is the Shell Livewire Awards, although I haven't heard much about them this time around. Whatever about the awards, the Shell Livewire online community is a great resource for budding entrepreneurs - it's a little less stuffy than other online resources, it's for the under-30's. I also like peeking at the site occasionally simply for inspiration! Some ideas are so quirky, I love it :)

Whatever you decide, good luck with any new business ideas you might be having just now... Personally, I'm working on a chocolate truffle recipe ;) hehe

Business Banking in Ireland

I'm getting some great questions lately and an old one came up quite recently. It was: Which bank should I set up with as I start my new business?

There is no one bank I could heartily recommend over another - mainly because I am not familiar enough with all the running charges in every type of business - retail, B2B, online, international - all businesses need different services from a bank so there is no one answer for everything.

What I can tell you is that where one bank has smaller charges, they will probably charge more in other areas, so it will take a small exercise to get a proper balance on what bank is best for your business specifically.

If you have been working in a similar business to the type you are setting up, have a look through old statements, making a note of every single charge there. If you can't tap into something like that, then really focus on the operational side of your business and think of every possible area you might need to use the services of a bank. For example if you are setting up an online shop then you will need to talk to the bank plus someone like Elavon plus someone like Realex to get everything up and running. Apart from making all three of their systems integrate with your own system. Sigh!

In simple terms, do up a spreadsheet and mark down what your needs will be, then pick up the phone and call the commercial department in three or four banks to see what they charge. Some of them will no doubt tell you that they will charge you zero on various items for the first two years - take down what the costs will be in year three for your comparison.

I suspect you will find they are all on a par by the time you weigh everything up. Ulster Bank and the Bank of Ireland have been fighting hard for Start-Up business in recent years, so they will be quite competitive in the short term - that is why I advise you to check the associated costs in year three! The same goes for the saving element. If a bank is quoting you a great interest rate, check for how long they are willing to offer it, and what are the penalties for dipping into savings if needs be.

The other important factor of course is the relationship you have with your bank. You need to be able to trust your bank manager and not be afraid to call them when something goes wrong. If you have developed a good relationship with AIB for example but would like to move to another bank, make sure they have a personal touch in the bank you are moving to, so that you can call them for advice as quickly as you can call them to flag any upcoming issues such as repayments on loans.

The final thing I'll say to you is - haggle! Banks desperately need to make money at the moment so they won't be giving their services away for free - but then, you wouldn't either, so why should they? At the same time, they are hungry for business so don't be afraid to play one off the other and get them down as far as possible on their charges.

Good luck!

Business Talk

So John Murray from RTÉ got in touch with Santa and made him put a copy of his book, "Now that's what I call Jargon," in my Christmas stocking. It adds to the ever increasing pile of books on my nightstand/kitchen table/car's glove compartment/desk/bedroom shelves/kitchen shelves/sitting room shelves... So I finally got around to finishing it yesterday morning.

It has a promising starting, taking the mickey out of a decent selection of public figures - CEO's, County Managers, Councillors - and of course the politicians.

Yes, I would have to say the introduction is pretty funny.

Then there are of course chapters, each one covering a different topic. HR, for example. John rambles on for an age in each one, simply giving tons of examples showing how those featured in broadcasting and print media spend a lot of time saying nothing. Really? My gosh, I hadn't noticed!

I was hoping the book would me give some helpful examples of how I could encourage people to express themselves in business plans without using flipping jargon, but no. It's just basically a hundred page rant with countless examples of PR machine incompetence and political crap like "downward trajectory."

If you are starting your business, please express yourself in plain English. I have met with over 20 new start ups since January 5th (I know, I can't believe it either), many of them with excellent business ideas - some even had plans to go with them already! Lots of activity, lots of hope. *glows excitedly*

One, stood out from the rest - it took more than one reading, a bit of self-doubt on my part, "...am I stupid? I just don't understand..." - because the plan had over 100 pages and by the end of it I still didn't know what the original business idea was. The only phrase from the book that wasn't in the plan was in fact, "downward trajectory" would you believe. The rest were all there.

So the moral of my little tale is that an effective business plan will be written in plain English with no need for subtitles from Ranter Extraordinaire, Mr John Murray.

Don't buy the book folks. Stand in Eason's and squizz through the Introduction. It's quite funny! And makes you think...but that's where the quality ends. Don't waste your Earth Euro.

What the Banks really really want

Firstly apologies for the lack of juicy blog posts of late, life has been pretty hectic!

But I return bearing gifts... I have been spending a lot of time talking with bank representatives and other lenders, so I picked some brains and found out exactly what they're looking for, when someone approaches them for a small business loan.

They are echoing general consensus I'm afraid - it's all down to the planning. And I quote one person from one of the Big Two banks, "it's the most critical part" of any application.

Two things are graded when you go near a bank for a small business loan:
1) The composition of your business plan
2) Your commitment to the project in cash/savings/time/other investment (e.g. angel source)

The key to an excellent business plan according to the banks is writing it yourself! Everyone I have spoken to cannot emphasise this highly enough. The number of people coming into them for small business loans with a business plan under their arm is increasing. The percentage of this group who cannot defend anything in said plan because they have not even memorised the contents, is also on the rise. This is a common mistake! If you don't understand your own cashflow projections or the demand in your local/national/international market, then they are unlikely to support you with finance. These are just not times of risk, banks & building societies will not take any unnecessary risk at all.

You not only have to be able to defend your plan and discuss all areas within it, but you have to make sure that you and it are realistic. For example if you want to start a business in any sort of luxury product or service, you have to be extra convincing, since lots of people are pulling in the belts just now. It was in the paper only the other day that the number of returns coming into Revenue are on the increase - people are looking for spare cash everywhere - Med1 returns, Rent relief - they're all flooding into the revenue commissioners.

So just to give you the definitive list from a bank on what they consider the core of a business plan:
- History of the firm (you/your business to date)
- Overview of the business (you, your market)
- Threats (within your industry)
- Company Structure (assigning responsibilities to the management team)
- Overview of your Competitors
- Any investment highlights (angels, family donations, your own savings)
- A list of upcoming business opportunities
- Financial Overview (cashflow projections are OK for pre-start up businesses but accurate historical financial accounts are imperative for existing businesses - there is no point in approaching a bank or building society otherwise)

Hope that keeps you going for a while, I'm going into another hectic few weeks...

PS I've blogged once or twice on business planning and market research before... here and here. More can be found down in Labels. Good luck!

But I've No Time To Learn How!

Time Management - not a thrilling or exciting topic, but something that helps SO much when running your own business. It is vital, in fact. One of those big qualities in a great entrepreneur is CONTROL, and the first thing you have to control is your own time. You know all those old cheesy "Time = Money" quips? They weren't made up for fun!

Some more top tips for an easier life, running your own (hectic!) business:

1. Get a good diary - preferably a week to 2-pages. This one really works, even for me! You slot everything into the little lines on each page, and when there is too much on the page, odds are you need to shuffle things around and start to manage your task list a bit better. You have no idea how useful that little nugget is.

2. Task Lists - this one follows directly on from the last point, and leads us to the next one perfectly. There are lots of opinions out there on how to make your task list easier. One example I heard is: write down all the stuff you have to do this week and number them backwards, starting with the one you hate - that way, the only way is up! This tip reminded me of my mum getting me to eat my cabbage first, then I could enjoy the spuds and gravy when I was small. (But curses, I was always full by the time I'd eaten all the yukky stuff! Funny, I quite like cabbage now...) Personally, when it comes to task lists I prefer the priority approach. That way I get less ulcers ;) get the "holy crap this is important" stuff out of the way first!

3. Prioritise - this is what I work with best. Figure out which items on your to-do list are the most vital, and do them first. Leave the weeny things til Friday afternoon when everything else is done and you are cruising to the weekend. The stuff in between just needs to be sorted in order of importance and urgency. There is a handy graph that gets dragged out at every Time Management seminar, and I'm putting it here, with a hat-tip & thanks to Time Management Dot Com:

Essentially, everything on your list can be popped on to this graph, and you undertake each task in order, 1 - 4. If something is both urgent & important, it goes into quadrant #1 and you do it first. If it is urgent but not important, it goes into the next block. Things that are important but not urgent come next, and finally - if it is neither urgent nor important, it'll get done when it gets done! The grid is a handy illustration but you don't get it out every day. You just get used to realising what's important/urgent to you.

4. You have to become quite firm with people - more than firm - and just make sure you remember why you're going to all this effort in the first place. You are trying to run a successful business, and by that I mean you HAVE to put your own needs fairly close to the top of the list. For example if you are a sole trader, make sure you keep one afternoon per week completely free for doing your bookkeeping, VAT returns, invoicing, payments, etc. This is vital to keeping your business financially healthy, but you would be SO surprised at how many people end up doing this at midnight on a Sunday! It's important - do it when you're fresh. That way, you won't make mistakes! Or you'll make less of them, at least.

5. Last tip - plan to be interrupted. Seriously! Leave about 15-20% of your day open, every day. This is like a cushion, so that when some mad customer rings with a crazy "urgent" query, you have the time to deal with it, without sacrificing the control of your day...and business.

Something (Practical) for the Weekend

If you know anyone who is planning on starting a business at some stage, but still in full time employment, writing bits of their business plan here and there, and pondering how best to set up, give them a couple of practical tips.

Odds are, they will not think of the little housekeeping things that take an extraordinary amount of time to design up, when they are starting off. All efforts will go into figuring out the service offering, going out and selling it! Admirable! Sure why not, isn't that what we're all here for...

Then we come to the making money part. What do you need? A few things actually, so it might be an idea to get them sorted before you start. If you have a customer or two, you will want to spend most of your time either taking care of them, or finding more of them. Not wasting time doing these things...

1) Get your tax registration sorted - a TR1 form for Sole Traders and Partnerships, a TR2 for Limited Co's - anything more taxing (pardon the pun) and you should call in the accountants/bookkeepers. Seriously. They're better at it, it will save you money in the long run to use professionals to do these things; it'll cost you your own man hours if you're no good at it. Harsh but true! Tax registration forms available from the Revenue Commissioners. There are sections on these forms for VAT by the way, but until you begin trading, don't register! Well you can, but it's a pain in the arse dealing with the paperwork before you have to, right?

2) Obviously in tandem with the TR forms - you need to register your business name(s). If you are planning on having more than one arm to your business (example - you walk dogs, but you also mind children - different business names required! You might also do people's books for them if you're good at numbers - a third business name - all trading under Joe/Janet Bloggs, Sole Trader...) RBN Forms are so called because they stand for...Registration of Business Name. They are all found at the Companies Registration Office, which also has lots of important information that you need to read!

3) Now that all the reasonably important stately stuff is out of the way, the next part is far more interesting. Figuring out your brand and your logo. If you are just trading under your own name that's fine, you should still find an interesting way of having your name in print. This will be vital for the next few items on this list! Mess around with your name in different fonts - it's that simple. Pick a colour that ties in with your service provision or product, and your identity - the one you want to project. This is really important! You will eventually become a champion of your own brand. Start watching how other people do it. I bet you can't look in any single direction in Coca-Cola's offices without seeing that trademarked brand everywhere...

4) Now that you have your logo or brand all designed up, you should start putting it on document templates. The first of these should be your headed paper. Even if it is just in the header or footer of a standard Word document, with your registered business address beside it in a nice shade of purple/grey/whatever brand colour you have chosen. Pick a nice, clear, legible font that you like and adopt that as your template font for everything. It's all part of developing your business identity.

5) Next on the list of vitals - your invoices! Get that brand/logo out again and put it on an Exel spreadsheet, or any type of spreadsheet. Use that font you liked so much, in the colour that's clear and readable. Don't forget your tax & CRO registration numbers, registered business address, trading names, etc... If you like, look at invoices from other people in your industry and see what are the all-important things they have included. Don't forget the invoice numbers - you have to start a ledger that is going to match up with your system for cash flow management. Lastly on this point - make sure your spreadsheet is printable - easy to forget!

6) Another important template to have at the ready is a quotation template. I know it is tricky, but at least have the bare bones ready. Google some templates if you like, there are loads out there. The important sections to have in a template - once you have plastered your mini-logo onto every header/footer of course - are: Introduction (a bit on your business), outline of the proposal (what you are being asked to quote for), list of items being quoted, their unit costs, any notes you have to include on special or bespoke items on your list, the tax (VAT) associated with various items on your list,(if there is any), your payment terms (50/50 or 25/50/25 or 40/30/20/10 or whatever you want it to be, within reason!), and finally the conditions of your quotation (how long is it valid for, etc.). The other important thing of course is your name & contact details at the end of the document, so they know who to ring & haggle with!

7) Since you have got the invoice done, get a receipt ready too. I think it is great to not only get a receipt but also a small note of thanks for the payment. It makes people smile, it really does. Making business a little more personable is always a total winner.

8) Other more miscellaneous items you can prepare in advance are things like internal memos, compliment slips, that sort of thing. They are not crucial but they are important at times!

9) Your business cards! Please get a proper print company to do these up. You can get them done inexpensively without being cheap, if you know what I mean. You want people to think of quality when they think of your business - so do not hand them a post-it with your number on it...please...

10) I've saved the best for last, because it is usually the thing that people think about last! But it is so important... Documenting. Filing. Set up a system - a system of folders on your server or hard drive or Internet storage space - so that you are ready, with a file structure in place, when you start up your business and start going through the motions. Having a structured filing system right from the start is going to be SO much easier in the long run. Please believe me when I say this, I really do know what I'm talking about... The same goes for the paper files. Follow the same structures if at all possible.

I hope you find this list of top ten preparation tips useful. I hate headaches, so any way to avoid them is good! If you think I've forgotten anything, let me know...


I will of course be blogging on the lovely CRM possibilities soon too...remind me...