The NABO Strategy Boardroom - 25th October 2011

A trip to pleasant Putney which has always been one of my favourite parts of London with it's proximity to the River Thames. The fact that I couldn't  find the venue first off meant I had to walk across Putney Bridge and back which on a lovely autumnal morning was just fine.

NABO (the National Association for Business Owners) is the prodigy of Jonathan Jay and describes itself as the fastest growing business network which is quite something given the competition there is in this space today. In addition to networking events it offers marketing and mentoring support to businesses. One of its offerings is the a Strategy Boardroom - which was why I was in Putney.

Jonathan offers these free session fairly frequently and today there were 10 or so people around the table. Some one man bands like myself . Some larger - a couple of training companies, an accountancy practice, a company specialising in change management. It was good to be part of a group of this nature - all extremely positive despite the prevailing economic conditions.

In turn we introduced our businesses and outlined what brought us there today. For some it was sustaining revenue in a fickle marketplace, for others the focus was on growth. Questions followed from around the table with Jonathan taking an active role here.

As lunch approached, Jonathan introduced us to his core marketing models,  a number of supporting marketing strategies and a very focused approach to sales funnel management. Here, as previously, he shared his own and the success stories of others with us.

Post lunch continued with an outline of how-  using two structures services - the Strategy Boardroom and the Implementation Programme - he could help us develop our businesses.

Here is not the time or place to go in to the detail or the actual figures, after all in depends on your need and your perception of value . Suffice it to say the investment required would be of the order of several thousand pounds.

Personally, I enjoyed the day and valued the market understanding I got from it. Jonathan's sales pitch was very open and transparent  - we had the option to leave before he went in to it if we wanted too.

The underlying Business Model is fairly familiar these days - some form of membership and various support services - for example, see Paul Avin's Business Wealth Club and Nigel Temple's Navigator offering. At the end of the day it's a 'Can't' (Knowledge) or ' Won't' issue (Motivation). You need to decide what you need.

As I said earlier, the value proposition is for you alone to judge - I'd put myself in the' Won't' camp the consequences of which are only too apparent!

Business Issues - A Lament for Business Link

I was at the inaugural meeting of the Thames Valley Berkshire LEP SME Forum yesterday – more of that anon. But, interestingly, there were a number of people who felt that Business Link had left the stage prematurely.

 I have mixed feelings about the demise of the physicality of Business Link – as you may know they’re now moving to a providing a web based service only. I guess I have a less than positive view of their impact based on impressions rather than direct evidence. Yes, I admit it’s an outright prejudice! I have no right to be sniffy – as a business consultant, coach and mentor I trade in the same space and probably have many of the same competencies and characteristics.

Were they doomed to failure? I think they were. Why?

1.       It’s all about money

We’re in an age of austerity. It’s not quite back to the ration books and coupons of post Worldwide II but it might just as well be. The only problem is that you have to be of a certain age to recognise the reference – as in Saga you’ve guessed! It doesn’t matter that it’s our money governments are playing with – after all we provide the votes and the hard cash from the taxes we pay that gives them their authority. So against the National Debt, the Health Service, the Benefits dependency on scale of 1:10 where 10 is stellar – where would Business Link be?

2.       Big business wins all the time

Think major industries and sectors – banks, oil, utilities, cars, retailers – who do you think is calling the shots? Is it the Government? I don’t think so, despite the ‘pro forma’ bashing – regulators, commissions, parliamentary enquiries etc. Have mature quasi or totally monopolistic businesses changed their position one iota – no they haven’t!

And my point here? Big businesses generally only like smaller businesses if they can rape and pillage them. Because, perhaps, generally they are not bright and creative enough themselves. And governments acquiesce to this. Yes, I know selling works as an exit strategy for the fortunate few too.

So, Business Link was never going to get any leverage here.

3.       The Public Sector doesn’t ‘do’ small businesses

Tales abound of the hoops small businesses have to jump through to get in to the Public Sector. One rule I heard recently was that a tendering company’s turnover had to be ten times the project value. In this case the project was worth £150k and the company although successful was small and didn’t have a turnover of £1m plus. EU rules designed to encourage fairness in tendering mean you need a degree in business obfuscation and the patience of a monk too.

The Public Sector doesn’t do granularity – which presumably is behind the Coalition’s push for local activism. Business Link tried to fill this space but wasn’t sufficiently loved by its owners or users to survive.

4.       Free is always the wrong model

There are numerous studies that show that providing business support free is not the right answer- see Daniel Isenberg’s article for the Harvard Business Review ‘How to start an Entrepreneurial Revolution’. Free has the wrong connotations and is likely too to result in quantity not quality. The problem is once you let poor quality prospects in it’s the devil’s own job to weed them out as a Pharma incubator I worked with found out when it had to move to a commercial business model.

Business Link as formulated had all the trappings of a cost centre.

5.       One size doesn’t fit all

I’ve raised the issue of granularity earlier. Many delivery models to be economic have to make assumptions and group users in to categories or segments and inevitably become homogenous. SME’s have singularly peculiar and varied characteristics which would challenge most customer facing organisations. Actually, just think how difficult it is even to define a small business.

6.       Being ‘nicey nicey’ is no good

Let’s face it – sometimes you just have to tell business owners their baby is ugly. No customers, no cashflow, no more seedcorn capital. Pack up and find something else to do. If you’re going to fail then do it quickly. Life support for an ailing small business is the wrong sort of support. I admit, I don’t actually know how Business Link handled businesses where the business proposition just wasn’t going to work but one might pre-suppose an inclination to kindness.

7.       Not many Business owners want to listen

Here’s the real rub, not only are they loathe to listen but they don’t often ask for advice even when they know they should. A very successful entrepreneur I met with recently took pride in regularly batting away well meaning support services. At the SME Forum I talked about earlier I’m not sure how many small businesses were actually there – although certainly there were a lot of providers (yes, myself included) who want to work in the SME Sector.

Overall, this is not a satisfactory solution as we sift through the embers of a burnt out economic model where expectations of economic regeneration weigh heavily on the SME Sector. There may be cause for optimism in the wave of localism that the Government is trying to engender but nannies in any form are not the answer – would the real Small Business please come upon the stage!

4 Questions businesses frequently ask and 1 they don’t!

In my most recent conversations with small businesses – who it must be said remain quite resilient despite the difficult trading conditions - here’s what I’m hearing:

(Interestingly, there’s not a lot about rules, regulations and compliance unless you’re in that business!).

1.       How do I get more sales?

There’s a lot of talk at the many workshops I go to about differentiation and ‘unique selling propositions’ (USPs). This is a compelling piece of marketing theory which (unless you are Apple or Richard Branson) is very difficult to put in to practice.

It’s difficult because you have to define your product or service in the customer’s language as a set of benefits – faster, quicker, easier or if you must, cheaper. This isn’t a ‘one off’ exercise. The benefits may change over time, customers may be buying for reasons you didn’t think of.

Action: Talk to your customers face to face as regularly as you can. Ask them what they like, what they don’t like, what you could do better. Ask your staff too; after all they need to be advocates too.

2.       How do I make my marketing as cost efficient as possible?

Most markets are highly competitive offering customers more and more choice. Customers are becoming increasingly thick skinned and resistant to marketing messages. Consistency is key – your branding, proposition and also where customers might expect to see your advertising and promotion. A rule of thumb seems to suggest that a potential customer will have to have been exposed to seven messages – how many ways are you using to reach them?

One of the major influencers of your marketing spend should be a good understanding of the cost of acquiring a new customer. Experiment to find out what mix of activity delivers you the best result.

Action: Plug and play with your marketing activity to understand what activity generates the best results. Use multiple channels and be meticulous in capturing the results to justify further marketing investment.

3.       How do I get my pricing right?

You can’t get your pricing right if you don’t have a good handle on your costs. Whilst a cost plus approach will keep your bottom line above water much will depend on your margin and how often you have to concede on price. Narrow margins mean you have to drive turnover – is that realistic for your business? Price has to start with an understanding of the value of what you provide to customers. They buy emotionally as well as rationally – what are the emotional triggers and what value is put on them?

Action: Think about the emotional benefits you offer– avoidance of risk, esteem, kudos, the buying experience, after sales support - as well as the more functional capabilities. Don’t be overly influenced by what the competition is doing. Sometimes being more expensive works really well.

4.       How do I grow my business?

This is not necessarily just a question of getting more customers and more sales. It very much depends on how you want to grow and over what. Firstly –although it may seem a bit bizarre - how do you get yourself out of the business? Because until you can find the space for a helicopter view, the business will – to use a gardening term – be ‘pot bound’. What elements of your business are scalable and sustainable?  Would people pay real money in the form of license or franchise fees for your Intellectual Property (IP)? Would an outside investor provide much needed funds to boost growth? Are there other businesses you could merge or joint venture with?

These issues need careful consideration - they are generally are quite time consuming and fraught with pitfalls. Here, undoubtedly, there is a strong case to be made for getting external advice.

Action: Growth can come in many forms but they generally all take time. Think carefully about what options are available to you and have a good look around to see what others in a similar situation have done. Don’t hesitate to get good professional advice – it will pay for itself in the long run.

And the question I’m not hearing?

5.       Where do I want this business to end up?

 It’s always very powerful when setting up a new business to start with the end in mind. This is particularly important if you go in to business with others – what they want may be different from what you want – a good lifestyle, a legacy to pass on to the family, a trade sale. As the business grows, how will your role develop, can you handle the personal challenges that this might entail?

It’s never too soon to think about this issue because the outcome you implicitly or explicitly track towards will hugely influence both the strategic and tactical business decisions you make.

Action: Talk to your business partners and your personal partners too about your ambitions for the business. A shareholder or partners agreement is a good way of structuring the business side of this conversation – although bear in mind that they are no better or worse than many legal documents.

About Chris Farrance

Chris Farrance is a Senior Practitioner in Coaching and Mentoring who has worked in businesses of all shapes and sizes in the UK and abroad. He is particularly passionate about helping businesses deliver a world class customer experience whilst maintaining bottom line growth. He is an intuitive and engaging business coach who focuses in a positive way on the ‘can do’s’ for businesses.

Outside of his working life he enjoys time with his four grandchildren and is a fair weather supporter of England’s cricket and rugby teams