Gerald Ratner: From Crap Peddler To Dotcom Millionaire

September 9, 2008


When I heard that Gerald Ratner had written an autobiography, my first thought was, “Who on earth would waste money buying more crap from that pillock?”

If you’re from the UK, you may remember that Gerald Ratner lost everything in 1991. His downfall began when the tabloids reported that he’d said the jewellery he sold was crap, whilst giving a speech for the Institute of Directors. The headlines included “Crapners” and “You 24 Carat Mugs”.

Ratners was the largest jewellery retailer in the world. And at the time of the speech they had 2500 shops, 27,000 staff, sales of billions per year and profits of £125 million. But Gerald Ratner is living proof that there is such a thing as bad publicity. And his foolish words cost him almost everything, including his £650,000 a year salary.

I didn’t feel sorry for Gerald Ratner. I’d bought jewellery from the stores he owned, so I thought he deserved everything he got. But something drew me to his autobiography and when I read the cover, I noticed it didn’t just say “The Rise and Fall”. It actually said, “The Rise And Fall and Rise Again”. Well that piqued my curiosity and here’s what I discovered about Gerald Ratner.

Gerald Ratner Was Responsible For The Rise Of The Family Business To Begin With

I’d always assumed that Gerald Ratner was a spoilt kid, who’d been given a senior role in the family business, just because of who he was. In fact, Ratner was an enthusiastic child, who left school with no qualifications at 15 years old and worked his way up from the bottom.

At the time, Ratners was nowhere near as successful as it became in the Eighties. At one point, the family almost lost the business altogether. But Gerald Ratner turned the situation round, because of his quick thinking and his ability to see the point of view of others - even those who’d betrayed him.

Ratner’s Success Could Be Attributed To Three Things


Throughout his autobiography, 3 things stood out that contributed to Gerald Ratner’s success:

1) He Was Passionate About The Jewellery Business: In fact, Gerald loved it so much that despite what happened in the nineties, he’s gone back into it and now he’s the largest online jewellery retailer in the UK.

2) Gerald Ratner Surrounded Himself With Positive, Successful People: It’s no accident that Ratner and his two closest friends - Michael Green of Carleton Communications and Charles Saatchi of Saatchi & Saatchi all became hugely successful in business.

3) Ratner Made Big Decisions Quickly And Believed Anything Was Possible: From takeovers of other jewellers, to venturing into the American market; and later, setting up his own health club from scratch, when he had no money, Gerald Ratner made decisions quickly. And he didn’t worry about how he was going to raise the cash to do those things, until after he’d made the decision. He saw opportunities, not obstacles.

If Gerald Ratner Can Start Again From Scratch - Anyone Can Do It

I assumed that someone with a business as big as Ratners, couldn’t go under completely. But after reading his story, it was apparent that Gerald really was skint, after he was thrown out of Ratner’s.

Four years later, Gerald launched a health club - remortaging his house and raising the remaining capital through outside investment and a bank loan. And in February 2001, that business was sold for £3.9 million.

The sale gave Gerald Ratner the money he needed to start an online jewellery business and in 2004, he launched Geraldsonline.com. It is now the largest online jewellery store in the UK.

Gerald Ratner Recognised The Importance Of Trends

Ratner never actually said he sold crap, during that unfortunate speech in 1991. But he did make two jokes, referring to a decanter his stores sold as “crap” and saying that a Marks and Spencer sandwich would last longer than the 99p earrings he sold. According to one publicist, he didn’t actually do anything wrong, he just gave an eighties type speech in the 90’s.

During the eighties, consumers wanted to buy cheap jewellery that they weren’t worried about losing. But today, customers are looking for better quality and good value. Geraldsonline.com recognises that and it is reflected in the product range that Gerald Ratner offers.

Gerald’s lifestyle has also changed. In the eighties, Ratner lived a life of excess, with chauffeur driven cars and helicopters being the norm. His business also affected his first marriage, as he was always working and he eventually divorced from his first wife.

But today, instead of being chauffer driven around, Gerald cycles almost everywhere, on a superfast bicycle which will do up to 60mph. He works from home and instead of employing thousands of people, he deals with many aspects of the business himself, including replying to emails.

If you’d like to read Gerald Ratner’s biography, you can get it here.
You can check out Geraldsonline.com here.

What do you think of Gerald Ratner’s turnaround story? Do you think anyone could turn things round as he did, or would they need to possess certain traits?

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Business Referrals: Are You Making This Huge Mistake?

August 28, 2008


Business referrals from a satisfied customer, who has already used your product or service are one of the cheapest and best ways to get new customers.

If you’re like me, you’ll enjoy referring a great business, or freelancer to your friends. Trouble is, lately I’ve referred a few people to businesses I’ve enjoyed dealing with. And would you believe, a lot of those businesses owners didn’t even thank me?

But it wasn’t the fact they didn’t thank me, that bothered me so much. It was the reason why they didn’t thank me.

You see, I’d referred a handful of friends to one business owner I know and trust. And a couple of weeks later, I’d not heard a thing. This surprised me, so I contacted her and mentioned the name of one of the people I’d referred. She confirmed that the person I referred had been in touch and she’d made a sale. But she seemed really surprised to learn that I’d sent this customer to her. I thought about it for a while and then I realised why.

She hadn’t bothered to ask her new customer how she’d heard about her. And to me, that’s like throwing your marketing budget into a deep lake and hoping it will float back up to the surface.

If we don’t ask our customers how they heard about us, how can we possibly know which marketing activities are actually working? And if we don’t know, we could be wasting a huge amount of time and money on things that don’t work at all and not enough on the things that are bringing us the most business.

If you have a business, do you try to find out how your customers how they heard about you? If not, is there some reason why? Depending on the particular type of business - can you think of ways a business owner can find out where their customers are coming from?

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Adam and Eve Part 2: A Kick In The Teeth

August 21, 2008


“You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you.”
Walt Disney

Satire

This is a series post on the effects of bad relationships on business and success. It’s about fictional characters - Adam and Eve. You’ll probably enjoy the story more if you read Part 1: Relationships, Are You Kissing Goodbye To Success?

Eve Gets A Kick In The Teeth

Eve is bleeding knackered and she’s beginning to hallucinate. So she tells Adam she’s had enough and he beats her up - even though she tries to escape. This has happened to Eve before but she doesn’t know who to tell. So she goes into work and when her staff ask what’s wrong, she says she fell.

She’s still enjoying her work. The business is doing great. And a few weeks later, Adam says, “Hey Eve, you don’t need to work here anymore. The business can run itself. Why don’t you take a break?”

But Eve does something strange now - something beyond Adam’s belief. And what caused this new behaviour was a metaphorical kick in the teeth.

She doesn’t want to leave the business that she saved and built. And if she’s not there running it, they’ll be in shit up to the hilt. “I’m legally a partner now - I’m staying and that’s a fact. And if you think it can run itself then you really are a twat. But don’t worry I’ll just stay long enough to get my money back.”

Adam is annoyed now - Eve usually believes his bullshit. Plus she’s always working - he wants to go out with his girlfriend while she babysits the kids. And the business is making money now, but she won’t let him spend it. And that’s really pissing Adam off, because he’s told his girlfriend he’s loaded.

Cashflow Isn’t Important Right?

So Adam takes a break from fun, to pay a visit to the bank. There’s heaps of money in there - well over ten grand ($20,000). It’s for something called cashflow, Eve said - but he thinks that’s a load of shit. He needs to have that money now to prove that he is rich. So he withdraws every single penny. Eve won’t have a clue. He’ll tell her the ATM swallowed their card and hide the bank statement too.

Now Eve might be too trusting, but she’s not exactly stupid. And when the bank statement doesn’t come, she asks them to send a copy. And when it finally arrives and she sees what Adam has done, she calls a locksmith right away and has the locks changed on their home.

Then she meets with Adam and tells him, “One of us must go.” And Adam smiles because he thinks he’s won but there’s something he doesn’t know. “I’m prepared to leave the business,” Eve says knowing she’d have the last laugh. “The only thing is, if you stay, you won’t have any staff.”

It doesn’t take Adam long to realize he his done. How can he work and have no staff - he’d have no time for fun. But to be fair to Adam - Eve happily agrees, to pay off his fun bank loan and as for his personal credit cards, she’ll take care of some of these.

The Urban Myth - All Business Owners Are Rich

She doesn’t know how she’ll manage, but she sees no other way. She’ll have to delay her creditors and find more work so she can pay.

Eve knows Adam won’t go easily, so she’s not really surprised, when her phone rings at all hours, cos he’s told his family lies. “You’ve made our Adam homeless,” Adam’s mother said, “The poor little lad’s wandering the streets, he’s got no roof over his head.”

Now Eve has plenty of problems and she doesn’t need this shit. Adam’s family must be thick if they don’t realise where he is. She’s avoiding paying bills until her finances are better. But all these calls are driving her mad, then she gets a solicitor’s letter:

“Adam is entitled to receive a massive wage and live the lifestyle he’s become accustomed to - and this will have to be paid by you.”

By now Eve is livid. Adam obviously hasn’t been honest about the state he left the business in. So she crumples up the letter and throws it in the bin.

Money Doesn’t Last Forever

A few months later on, Adam is feeling sad. He’s running out of money and he’s heard Eve isn’t doing bad. He’s not a partner in the business anymore and the thought of Eve making money, is really making him mad.

But he has a secret weapon - access to Eve’s account. He’s been taking money in dribs and drabs - and now he wants more out.

His new job is an easy one. Who said crime doesn’t pay? Adam is quite happy robbing Eve’s bank account every single day. Soon he’s taking a grand ($2000) a week. It’s better than a job he thinks and hopes she doesn’t click.

Helping Yourself To Money Earned By Another Is Theft

Eve’s pissed off when she realises her business account is being robbed again. She’s been on at the bank for months, but they keep messing her about. All the money Adam is taking is cash that she has earned. But her solicitor says she can’t do a thing until the bank changes the account - it really is a pain.

Ten weeks pass by and Adam’s still robbing Eve’s earnings blind. So Eve calls her bank manager’s assistant, but records of these daily transactions is something he can’t find. And as for changing the bank account, he apologises but these things take a lot of time.

Eve’s had enough by now, the bank is having a laugh. And as for her solicitor, she wonders if he and her bank manager are partners in golf. So she calls the bank’s helpline and they find the transactions straight away. Adam’s been using his passport for ID. Eve’s says, “fuck - you mean they let someone do that - every single day?”

So Eve goes into the bank on Saturday, when the bank manager isn’t there. And aside from a few direct debits to go out - she leaves the business account bare. Her bank manager isn’t happy when he sees what she has left. So he writes to her and reminds her, she needs to keep paying, Adam’s fun loan debt.

Eve sends the bank one payment, accompanied by a letter - unless the bank send itemized proof of Adam’s theft - they can go fug themselves - she isn’t their debtor.

Well, things got a lot worse for Adam and Eve. Do you think Eve did the wrong thing staying in the business until she got her money back? What would you have done? Did she do the right thing throwing Adam out of the business and the house? And do you think she has the slimmest chance of getting her money back? Each time there’s been cash in the bank, Adam has taken it - will this send the business down the tubes?

This is a series post. If you’d like to read the final part of the series, click here to subscribe in a reader.


Was I Talking About You?

August 16, 2008


“You” is a powerful word in copywriting. If you want your reader to identify with what you’re saying, in any type of writing - using the word “You”, is far more effective than using the passive voice.

“We” is also important, especially if you blog. After all, we as writers don’t know everything. We’re on a journey with our readers, learning from and helping each other.

But there’s times when “You” and “We” are not the most effective words to use. And I learned this the hard way recently, after these posts: “Are You Blogging Like A Barbie Doll?” and “Legacies, Links, Bad Ads and Puker Powder”.

Both posts talk about “mistakes that we make” and “mistakes that you make”. The trouble is, it’s easy to forget that some of your readers may actually feel like you’re talking about them personally. I know some folk did after they’d read the above posts, because they told me so.

But I wasn’t talking specifically about any of my readers. I was just not careful enough about the words I chose, so I’m sorry if I offended anyone.

Meanings can change quite dramatically when you use the wrong words can’t they? I learned one that I’ll never forget when I started my nurse training. If you’re about to inject a patient, never say, “Don’t worry, you’ll only feel a small prick.”

Have you ever written or said words that didn’t come out quite as you intended them to? Have you heard others do so? Do you have any favourite shocking, offensive, or hilarious word mix ups to share?

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