Monthly Archives: October 2015

1 The Entrepreneur Marginalised

My father was an entrepreneur.  He started as a sheet metal worker in Sheffield during the fifties for about 30 years until his health meant he had to stop climbing on roofs.

He was a problem solver and perhaps I inherited this from him.  Given a problem, he would design a solution and then make it in steel.

In the early eighties he complained whichever government was in power they neglected the welfare of small businesses.  The Labour Party (my father always voted Labour) saw employers as villains who should be taxed to provide welfare for the workers, whilst the Conservatives for all their rhetoric, support big business and have little concern for small entrepreneurs.

Marginalisation of Small Businesses Continues

Marginalisation of small business is deeply rooted in our culture.  Schooling prepares children to be employees.  Whilst many jobs have disappeared we still train children to be workers.  If you want a trade, something you can practice in your own right or at least turn your hand to when you’re out of work, then you have to work it out for yourself.

Perhaps we’re suspicious of entrepreneurs because our experience of the big ones is so negative.  Go back to the nineteenth century and whilst there were problems in the mills, eg low pay and poor health and safety, the mill owners lived near their mills and contributed to their city.  In Sheffield the names of Firth, Brown, Ward, Graves are well-known because their names are all over the buildings, parks, art galleries, etc they contributed to their city.

Compare them to the mill owners today.  They are rentiers, meaning they own businesses to make money through speculation.  They have no direct interest in the purpose of the business.  Many don’t live in this country, often living abroad for tax purposes.  They use legal tax avoidance to salt away their profits for their own benefit.

Still, there are many small traders; self-employed people making a precarious living.  They contribute to their local economy and make a greater contribution when they know their business is sustainable.

Community Development and the Economy

So why doesn’t the local economy feature in our thinking about community development?  Community audits rarely cover the local economy.  Do what I’ve just done and Google “community audit”.  Search whatever you find for mentions of economy, shops, finance …  The nearest you’re likely to find is employment.  A community audit can involve local businesses but in all the audits I’ve seen the economy is almost invisible.

Churches for example focus on the very young and very old and then wonder why the economically active don’t appear at their services.

Tesco recently opened a massive supermarket in my neighbourhood, one of the biggest in Europe.  Its local contribution is significant – I use its toilets regularly!  When it opened in November 2011, many predicted local shops would close.  So far local shops, including 4 small supermarkets within a couple of minutes’ walk are still open.  They’re struggling but survive.  How?

Because the Muslim community have put heart and soul into building their own economy.  I don’t know how they’ve done it and suspect a lot of unemployed family members work for almost nothing.  But they’re making it work.  They’re creating a community to their own model and that is an option open to all of us.

Remember not all local businesses are traders (and indeed not all are small).  How many self-employed people in your area work from home, perhaps with customers all over the world?  How do you find out about them?

Where are small businesses building the local economy in your experience?  How are they doing it?  Who is visible and who invisible?

2 The Value Triangle

I’m not going to draw a value triangle because (a) everyone knows what a triangle looks like, and (b) I don’t find it particularly helpful. The value triangle is the forced compromise many businesses have to make between three aspects of their business:

Your customer can have any two but not all three. So, sacrifice any one and this is what you get:

The point is, as a customer you can’t expect to optimise all three. If you want something of high quality and fast, expect to pay for it. If you don’t want to spend a lot of money you must sacrifice either speed or quality.

For the business owner, the challenge is to work out what their customers want. My own business provides a non-directive consultancy or coaching service. My aim is a high quality service and I expect to deliver over 3 – 6 months or longer. This may seem slow but it is right for a consultancy service. My prices are relatively low when compared with Done for You website design and offers a service that integrates online and in-person activity, which many website designers do not offer. It is certainly cheaper than employing a worker to build and maintain a website, so long as there is someone who can dedicate the time to work with me. The client who wants a high quality website tomorrow will need a Done for You service. I offer a slower more considered and eventually more effective route to being effective online.

Cost is a real pitfall for many businesses. There is a tendency to under price offers. Think it through this way, are you going to sacrifice speed or quality? If you offer a service at a low price you will need more clients to break even. This will mean you will have less time to focus on your clients and so compromise quality. Or else if quality is essential you will need to extend your contracts over a longer time.

The first thing is to explore how your service compares with others. What alternatives might your clients be looking at and how are they priced? If you can cut the time you spend on each client without compromising quality or add to your basic offer in a way that enhances quality this may enable you to adjust your price. You will normally be aiming for the highest possible price your customers will accept that enables you to provide the highest quality service.

Some business activities have various options. For example, a cupcake business may offer celebration cakes at a premium price. Something really special for a special event. This would be high-priced, for example the business I heard of recently where the owner breaks even on 6 wedding cakes a year.

Another cupcake business might produce large numbers of cheap and cheerful cupcakes that are low-cost, quick to make and tasty. So long as it’s a good product, it should be easy to sell a lot and break even on the cheaper end of the market.

The first business offers high quality at a high price. Don’t expect to order a wedding cake anything other than months in advance. The other offers something over the counter at low-cost. Their quality may actually be fine but not wedding cake standard!

If you get a chance to interview potential clients, it may be worth asking which two out of the three, they would choose first and second. They can rank them in order of importance and then discuss, the implications of discarding their third choice. Sometimes customers will be more flexible when they understand this basic dynamic.

This post is part of a sequence based on the circuit questionnaire, the branding element.

0 How to Build and Sustain Motivation

My father was a self-employed sheet metal worker for about 30 years between the 1950s and 80s.  He used to tell a story about something that happened to him, probably during the 70s.

A business contact invited him to fasten two pullies to their cellar head and use them to lower a massive boiler into the cellar.  He did his calculations and quoted them £300 for job.  They clearly weren’t expecting it to cost so much.  Do he said he’d tell them how to save some money.  “Look” he said, “why don’t you tell half a dozen of your men that they’ll get £10 extra in their pay packet if the boiler’s in the cellar by tomorrow morning.  If it isn’t give me a ring and I’ll go ahead, you’ll be no worse off.”

The next morning, my father received a phone call from his contact.  “You’re a miracle worker!  The boiler is in the cellar!  How did you know they could do it?”  This actually did my father’s business a lot of good because his contact told lots of his friends how brilliant my father was!

It seems there was a window opposite the cellar head and they put a beam across and used it to lower the boiler into the cellar.  This was a solution thought of by neither my father nor his contact.

Perhaps the extra £10 in the pay packet was an extrinsic incentive (I’m assuming you’ve watched the video) but I think this story does line up with Daniel Pink’s lecture.  The 6 men had autonomy.  No-one told them what to do.  (I suspect health and safety concerns would be an issue these days.)  Clearly they were practical men who enjoyed a challenge and the task was clear.  Even though £10 was worth more in those days I suspect the men enjoyed working out the solution to their problem.

At a recent training session, “How to build and sustain motivation in your career”, the leader, Lisa Read, a local coach, recommended the Daniel Pink video.  Lisa shared Daniel Pink’s three characteristics of intrinsic motivation; common experiences of many self-employed people and third sector volunteers.

These three are valuable attributes anyone who is working creatively needs to meet.  They apply equally for online and in-person work.  The problem many people find working online is the technical aspects of the work tend to overpower the creative dimension.  Looking after your website becomes a chore and this is often because it is actually working against your organisation’s aims.

Coaching and non-directive consultancy are pretty much the same activity; they are branches of the same tree.  My consultancy service can help you get your organisation or business and your online presence working together to increase the effectiveness of your organisation and your personal satisfaction as maintaining your site ceases to be a chore.  Once you have mastered your site and have a clear purpose, you will have the autonomy to choose how you use it.