How is Your Operating Platform?

I spoke to a manager from Amey yesterday, who told me of their use of technology to manage some of their subcontractors on their contract with Birmingham City Council. For example, tree surgeons have hand held devices on which jobs and instructions can be allocated and work recorded.

This makes communication quicker, but particularly limits the need for worksheets and invoices. There is no dispute over what work has been done, and information is common (and accessible to the Council as client).

This led me to think of the importance of operating platforms for small businesses. This means everything that the business uses to “get the work done” – people, facilities, processes and technology. How these fit together make a huge difference to the success of the firm, and hold the key to productivity improvement. It is worth mapping processes and making step by step improvements.

And remember that one day you will not be there, due to retirement or otherwise. How well will your operating platform function without you?

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The Bus May Not Look Like a Bus

The “what would happen if you were hit by a bus?” is always a useful test. It applies to equally well to running a business or  project, or to a family. We will all be replaced sometime, whether in a planned way or unexpectedly. Having contingency plans in place makes it easier for you or other people to cope.

A well known example of what can happen is Michael Schumacher. After a hugely successful career in Formula 1, he was left severely disabled after a skiing accident. There must have been a sense that the risk of injury was past.

Less well known is Casper Gray, who set up a business helping SMEs to raise funds, but then developed multiple sclerosis. His condition has deteriorated, and he finds himself in the position of disabled entrepreneur. But determined businessman he remains.

The plans should deal with succession, and with passing on knowledge, contacts and processes. Making the time to do so is often a problem.

Keyman insurance should cover the business as well as the business owner, so that the business has cash to hire a replacement.

The other important issue is making a will, with any necessary tax planning. Ensure that your dependents are looked after.

I hope it never happens to you, but what are your plans for an unfortunate encounter with a bus, whether it looks like a bus or not?

Are We Ambitious Enough?

I was at the Lunar Society’s Boulton and Watt Lecture this week, an interesting exploration of financial regulation (yes, really it was) by Prof George Feiger, the Dean of Aston Business School. One remark that he made during the Q&A struck me. Asked if London was sucking funding away from Midlands firms, he acknowledged that funding was an issue, but thought the bigger problem was a lack of ambition among small businesses. This was not how to build the next Google.

I do not think that he was singling out Birmingham within the UK, rather he was comparing where he is now, to where he has come here from, namely California. His thought was however interesting enough to discuss it with two speakers at another event, both of whom help new technology businesses succeed.

The view was that the Professor was, as a generalisation, right, and that indeed this is not Midlands specific. (I have for instance heard similar comments about businesses in Wales). However, funding is very much easier to obtain in the USA (particularly California), and the tax regime can mean that the proceeds of sale of a business can be reinvested in another business before attracting a tax charge.

So what are we talking about? The cup cake shop may bring joy to the neighbourhood, and provide a living, but is limited. It will not suddenly turn into a chain of shops – that would require a great deal of planning and effort, if it could be done at all. Similarly it is possible to envision a nationwide chain of law practices, but that is unlikely to grow from the newly formed 2 partner firm.

This does need a word of caution. Size is not necessarily the right criterion, nor is profit. Germany is successful in part because so many companies in the Mittelstand (larger SMEs) are world class, and work hard to stay that way. This is often in conjunction with their local university. Equally, a social enterprise or co-operative can be ambitious. After all, John Lewis is doing fairly well!

If a business owner is happy with a cup cake shop, and can make it successful, that is their choice. Indeed, that owner is probably not the right person to look to build something much bigger. However, if we want a successful economy, we also need the ambitious people who will build long standing and successful businesses which employ people.

Small Business Saturday

Saturday 7th December 2013 is Small Business Saturday. The idea started with American Express in the USA, where it started on 2010. Indeed I did a little to publicise the idea on this blog in 2011. It has now spread to the UK.

If you value having small shops and other businesses, Saturday is your opportunity to show your support by spending some money with them. Basically, use ’em or lose ’em.

If you are Christmas shopping, buy a coffee from the independent rather than the chain. Try the butcher instead of the supermarket for meat. Buy a bottle of wine or your Christmas chocolates from the corner shop.

Above all, take the opportunity to explore and find your nearest hardware store, gardening shop or ice cream parlour. You may not need them on Saturday, but knowing they are there for the future extends your choice. And you never know what quirky delights you might come across.

If you are an American Express card holder, visit their site http://www.amexshopsmall.co.uk/hub.html?cid=van1-hub-pcs

Work Life Balance for Employers

I was at an interesting seminar this morning with Challinors Solicitors, on work life balance. The guest speaker was Terence Hogarth of the Institute for Employment Research at the University of Warwick.

Although work life balance and flexible working were somewhat conflated (and I do not want to play the definitions game) his view was that there was a potential benefit to employers. One question is whether work balance issues are actually a product of a tight labour market, which is not the case at present. Only time will tell if this is true or not.

The benefit to employers? A recession often means losing staff and thus talent. When the upturn comes, talent again has to be brought in, which means that it also has to be bought in. When other employers are doing the same, there is likely to be an inflationary bidding war for talent.

Keeping talent by showing flexibility on both sides can avoid many of these problems, and build and maintain staff loyalty. That said, large corporates may find this more sustainable than would small businesses,

Public Sector Procurement

Find it in Birmingham held an interesting seminar on the recent changes to public procurement rules. These are aimed at enabling SME’s to gain more work by removing some of the barriers. For example, insurance generally becomes a condition of the contract – so it has to be in place when the contract starts, not when tendering.

More to follow when I have various links to hand.

Small Business Saturday, 26th November

In the USA, Small Business Saturday falls this weekend. Consumers are encouraged, on one of the busiest shopping days of the year, to spend something in small shops. This will only be its second year, but according to American Express, which founded it, last year businesses saw an increase of 28% in sales turnover over the same day in 2009.

I have no connection with the American version, but it would be wonderful if everyone in Britain could do the same here! So get out there on Saturday and spend something with a small business that you would not otherwise have done. That could be anything from a bar of chocolate through your fruit & veg. to a pair of shoes. Or you could grab a coffee from the local cafe rather than your usual chain, or have your first pint at the local.

It can work in all kinds of ways. If you have a prescription, take it to the independent pharmacy rather than the chain. If you keep thinking about making a will, phone a solicitor to make an appointment (try Friday, though).

And you could even do it all online, such as at “The Oldest Record Shop in the World.”

Me? I will visit the butcher and the greengrocer in my local High Street, which I do not normally do. I will also make a never before made offer to small business owners via this blog at 10 am tomorrow – so watch this space.