Do You Remember What Happened To Bonny And Clyde?

November 6, 2007

Neil Patel wrote a guest post on Shoemoney - Have a Business Partner? If Not, Go And Get One!

And whilst Neil made some great points, having a business partner isn’t for everyone. Bonny and Clyde were business partners, and look what happened to them.

So before you rush out and grab yourself a partner, consider the following points:

1) What are they bringing to the table? A combination of cash and business experience would be ideal.

2) What do they want in return? Anyone willing to fund a start up and give business advice will usually want a huge chunk of your business. Is it worth giving that percentage up - or is there another way you can raise the cash?

3) Maybe you’ve found someone who’s willing to join you in an equal partnership. They’ll put in an equal amount money and effort in return for an equal stake. But, the chances are, if this is your first business, you’re not going to find an experienced business owner who will do that. Think carefully about whether you need a business partner, or if you can just employ someone.

4) What happens if they stop pulling their weight and they still own half of the business? This happens a lot. And not everyone is willing to put in a lot more than they take out for a long time. For example I was in a partnership with someone who was willing to do very little whilst I worked round the clock. He also emptied the bank account, leaving the business strapped for cash.

I recently spoke to a woman who merged with someone in a similar business. But, it didn’t go as planned and she soon found herself working more hours while her new partner swanned off to play golf.

5) Then there is the trust issue. What do you know about your potential partner? Are they trustworthy? Believe me, there’s many things that could go wrong if they’re not. For example, I know a guy who wound doing a stint in prison because he was oblivious to the fact that his business partner was doing something fraudulent.

6) Do they share your vision for the company? They may say they do now, because they want a piece of the pie. But, what happens in a couple of years time when you want to expand, and they’ve reached a level they’re comfortable with?

7) What happens if they decide it isn’t for them? Will you be able to afford to buy them out? If not, you could find yourself in partnership with the type of person you’d usually cross the street to avoid.


Posted by cathlawson | Filed Under Mistakes, Running a Business | 9 Comments 

Avoid Growing Your Business Into A Maneating Monster

November 5, 2007

You’ve probably seen those films where some mad scientist invents these amazing robotic creatures. Then he tries to get them to do too much too fast, and they turn on him and try to destroy everything in sight.

Believe it or not, this is exactly what could happen to your business if you try to grow it too fast.

Growth is essential or your business will die. But superfast business growth can be equally dangerous if it isn’t well planned. So you need to identify any potential downside before you begin and also estimate how much cash you will need to grow. Here’s some questions you should ask yourself to avoid growing your business into disaster:

1) Will I need to recruit additional employees? If so this could put a strain on your cashflow. The costs of recruiting another employee are usually far more than just the costs of their salary. And initially sales may not increase enough to cover the additional costs involved. Make sure you know what these costs are right down to the exact penny, and ensure that you have the resources to meet them, perhaps through a bank overdraft.


2) How quickly will I get paid? Rapid growth often involves working for a different type of customer - eg: business to business instead of business to consumer. If this is the case, you have to bear in mind that it may take longer to be paid. Would your business suffer badly if you have to wait 60 days plus before you are paid? Make sure you know exactly what your business can stand. And if you’re not sure how to do this, get yourself some cashflow forecasting software.

3) Is My Pricing Accurate? Often it is tempting to put in a low price in attempt to secure a lucrative contract. However, many businesses do this only to discover that they’re actually making a loss. Make sure you cover all your costs, and also allow for any potential problems.

4) Can I Cope With The Work I Already Have? Make sure you have decent systems in place to cope with the work you’re already doing. If you don’t, you’ll get yourself into a heap of trouble if you try to do more.

5) If It Goes Pear Shaped, Could I Live With It: Consider absolutely everything that could go wrong and ask yourself what is the worst thing that could happen. Then decide whether you’d be prepared to live with the consequences.


Posted by cathlawson | Filed Under Planning | 3 Comments 

The Most Stupid Business Ideas Ever

November 3, 2007


We all have stupid ideas from time to time. If we didn’t - we’d never even come up with one single decent idea. So, it’s important to brainstorm freely and not care if 99% of what you come up with is rubbish.

And remember, one man’s stupid idea could be another man’s fortune. I was reading an article a few months ago in Forbes. Some old billionaire was asked what was the silliest business idea he’d ever heard. And he said many years ago, he’d heard about someone who wanted to build an amusement park and call it Disneyland and it was the most ridiculous idea he’d ever heard.


Shoemoney shared some pretty outrageous business ideas in his post: My Top Ten Worst Ideas To Make Money, and it really is worth checking out. The wackiest one has to be the convent restaurant, although the garage giving away free gas comes a close second.

Anyway, here’s a challenge. Let’s help make some crazy person rich and famous. Brainstorm for a little while and share some crazy business ideas.

Here’s a few I’ve been thinking about lately:

1) A doggie bag service. You collect food that others don’t want from restaurants and deliver it to pet owners (for a small fee of course). The restaurants benefit because they get to have their logo on the outside of the bag.

2) Vegenosis - A hyposis program that convinces kids to love vegetables. My son think this is unethical and would probably be banned from the outset.

3) Winter Sunshine Hotel - A hotel which has a winter theme in the Summer with amazing indoor ice sculptures, daily artificial snowfall in the lobby etc, which transforms into a tropical paradise in the winter, complete with indoor beach etc. I thought this one would please those of us who are never happy with the weather.

4) World Jogger - A revolutionary treadmill in a compartment which you can program to jog anywhere in the world. In addition to visual effects, you would be able to jog in real wind, heat or even snow. You’d never get bored as you would actually feel like you were in another part of the world.

Now, it’s your turn. Have a think, and see what completely crazy business ideas you can come up with. Then share one or two. You never know - we could help make someone rich and famous.

Posted by cathlawson | Filed Under Ideas | 12 Comments 

If Your Staff Did This Would You Shoot Them?

November 2, 2007

As a business owner, it is essential that you encourage your staff to ensure that the customer tells them if they have a problem. That way you can put it right before it becomes a major disaster, because if it does, they will never use your services again, and they’ll tell all their friends that your business sucks.

Unfortunately, many business owners avoid doing this. Here is a really bad example of how not to deal with a complaint. And, if my staff behaved like this I would shoot them.

1) I wanted to book a cruise. I needed to book it far in advance a) because they book up quickly and the lowest prices go well ahead and b) because the cabins I wanted had almost sold out

2) I researched and chose the cruise on a popular forum. The forum is owned by a travel company and because it had been useful I decided to reserve through them. The trouble was, they don’t have proper real time online reservations and they don’t take telephone reservations. It just said on the site that I needed to fill out the form and they would get back to me within 48 hours.


3) The problem was, it also said on the site that there were only four rooms left in the category I wanted, so at the top of my email, I put urgent and asked if anyone could get back to me as soon as possible as I wanted to book straight away. I also sent an email to the webmaster marked urgent and asking if someone could get back to me quickly.

4) I waited for hours and hours and nobody got back to me. So in the end, I reluctantly booked the cruise through an agent who took telephone bookings. The price was a lot higher. And I commented in a thread on the forum that I wished someone could have got back to me more quickly, as I would have preferred to book through the original company at lower prices. I didn't criticise the company and made sure I stressed the fact that they were charging a much lower price for the same trip, which was good for them as potential customers could have been reading the thread.

5) Someone from the travel company replied to my post asking me to email them. I did and pointed out that I would have preferred to have booked through them. I would still like to book through them in the future and it might be a good idea for them to have a system where the customer can choose options such as need to book now, or just browsing for prices etc etc. But over a week later, I still didn't receive a response to my email.

6) This might be bad enough. I would welcome constructive criticism like this in my business. But, unfortunately, instead of using the opportunity to turn the problem round, the company decided to go a few steps further to ensure that I would never use their services or recommend them to anyone.

7) First they asked me to remove my signature in my forum posts, as it was commercial. My signature simply said: Catherine's Blog and linked to this blog, which as you know is not a commercial blog. In fact I don't make a bean from it. So, I was a little offended, but I removed the signature without complaint.

8) This would have been bad enough. Then I saw a forum post which was clearly way off topic. So as per the rules, I messaged one of the moderators saying the post was off topic and needed to be moved. Well, can you imagine my surprise, when I tried to log to the forum again and received a message saying I'd been banned because of an attack on a moderator!

9) As you know, I'm pretty big on naming and shaming companies that suck. And this incident has left a really sour taste in my mouth. But in this case I will wait. I have emailed the manager of the company letting him know what has happened. As a business owner, I would be shocked if my staff were treating a customer in this way. And hopefully they will put it right.

Let's take a look at a) what the company did wrong, b) how it could have been avoided and c) how you can avoid making the same mistake:

They didn’t have a system in place for prioritising: So instead of being able to deal with customers who were ready to buy immediately, they put them to the bottom of the pile, among those who were just browsing and price shopping. This could have been avoided in the quote process as explained above.

They ignored the chance to put things right: A customer who is still prepared to come back to you in the future if you let them down and also gives honest feedback and suggestions is a rare one. It would be great if all customers were like this and you would definitely encourage them to come back and refer their friends. Few customers do this - they normally wouldn’t bother using you again if you’d already let them down and they would advise their friends not to.

They didn’t train their staff on dealing with complaints: Obviously the member of staff was offended by the complaint and didn’t bother responding. He also thought it was ok to encourage other members of staff to attack the customer. The staff member clearly hadn’t been trained in dealing with customer complaints.

They allowed unpaid, inexperienced people to jeopordize their business: Obviously their moderators are unpaid, and decided to treat a customer complaint as a game. It is probably never wise to have people doing voluntary work in a commercial business to begin with, and if you do, you should have strict rules on dealing with customers.

So, what do you think? Can you see the damage that untrained staff can cause? Would you use this company in the future? And do you think my decision to give them another chance and not name and shame them is wrong?

How would you deal with staff who behaved like this, and how would you rate this company on a scale of 1 to 10 - with ten being completely appalling.


Posted by cathlawson | Filed Under Mistakes | 7 Comments 

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