Blogging last week, I wrote about bootstrapping and where start-up companies should scrimp. I was making the point that the costs of starting a business are far less than many assume and much of the propaganda (trying to warn off the dreamers perhaps) states.
Yet there are also things not to scrimp on. Bootstrapping doesn’t mean “winging it” or cutting corners on vital requirements. Start-up businesses are also vulnerable businesses, and too many are exposed – perhaps to larger rivals or even the overly punitive employment laws.
Bootstrappers should know where to save money, of course. But they should also know where to spend it. Hopefully, some helpful suggestions below:
Accountants. A good accountant will save any small business a great deal of money. Tax, like death, is an inevitable feature of life but any entity should only ever pay its legal minimum. We should let the inefficient entities subsidise the efficient ones by investing in a decent accountant that can navigate the Byzantine world of any country’s tax structure. Moorgate’s accountant charges around 0.5 percent of the company’s turnover, and saves it around 5 percent (not just from tax efficiency). That’s a pretty good ratio in my opinion.
Compliance. Insurance, health & safety, anti-discrimination legislation, benefits etc etc. Like taxes, regulations are inevitable and seem to grow year-on-year (perhaps because politicians need to justify their existence). As with our financial phobia, compliance is also a classic area for those with fear of failure to neglect – leaving us potentially exposed, or – more likely – deterred from starting our own business. The solution is to treat it like a project – setting time aside to get to grips with the issues. Either that or we should hire someone to do it for us. Some small business accountants (including mine) can also act as outsourcing compliance officers, making sure the regulatory burden is met.
Presentations. These are the modern shop window for most companies – especially service providers – and it’s worth investing in pitch presentations that compete with the big boys in terms of image and message.
In Life’s a Pitch (2007), design and advertising consultants Stephen Bayley and Roger Mavity point out that the pitch is when you are asking someone to judge your future, which makes pitch documents worth investing in.
“The pitch moment, those crucial moments which give the opportunity for big change, all have one thing in common,” write Bayley and Mavity. “You are trying to get someone else to do what you want them to do – to hire you, to sleep with you, to lend you a million pounds to start your business…A pitch does not take place in the library of the mind, it takes place in the theatre of the heart.”
Or as Bud Fox (Charlie Sheen) said just before pitching Gordon Gecko (Michael Douglas) in the all-time business classic Wall Street (1987): “If life all comes down to a few moments. This is one of them.”
So make it a good one. There are 100s of freelance designers out there, many willing to work cheaply to build up their portfolios. Find one and use them to produce a tip-top presentation, although make sure it is a template that can be self-updated as freelance designers tend to have disappeared by the time they are next needed.
Same goes for branding – ask the freelancer to come up with a decent logo. Anything we do ourselves will be awful, no matter how good we think it is.
Get on the plane/train. It may seem obvious that clients/customers are impossible to win without first meeting them but this is an area where many bootstrapping entrepreneurs fall down. Interest from a client in another city or country will never be firmed up by email or phone. It requires a meeting, and that requires us to make the effort to see that person at their place of work, no matter where it is. So get on the plane and visit prospective clients, although always travel cattle-class. And if an overnight is unavoidable, source other potential meetings in the same city.
Sales. Never ever let go of sales and never scrimp on the sales effort – lunches, visits, presentations, whatever. And that usually means that the role of head salesperson remains with us, the company’s founder and owner. I'm often approached by “pearlfinder” type organisations on a regular basis that promise to set me up with meetings with prospective clients. I always make the same statement – I’ve researched my potential client base down to the 50 or so accounts I must have. With this done, I just keep banging on their door until I’m let in. The individuals may change, I may get passed from office to office, but that’s fine – the more people that know me inside the building the better. But I never delegate that role or buy in sales on a commission. Selling is my job.
Legals. Lawyers, like politicians, seem to like making work for themselves. And who can blame them given what they can charge? However, they are also a necessary evil and – at times – cannot be avoided. I learnt my lesson after having a PR agency attempt to poach a team-member despite them signing my self-written non-disclosure agreement that included a clause about not coming after my staff. Assuming I had a case for compensation, I went to a lawyer who said it was not worth the paper it was written on (and kindly didn’t charge me for the advice). Anything someone has to sign should, therefore, be seen by a lawyer (at least in template). That includes NDAs, contracts, staff dispute resolutions, confidentiality memos – the lot.
As a High-FF (someone with a high fear of failure), I absolutely hate handing money over to a lawyer. It feels like booking a yacht on the same basis as a metered taxi except I cannot see the meter. The answer? Like finding a good dentist, find a lawyer you like and stick with them – building up a relationship. And always ask for a quote beforehand – every time (by email at least). At that point they are bidding for the work, so they’ll pitch it lower than after you’ve engaged them. And I complain like hell if I feel stung. Lawyers hate complaints, which means they usually collapse when challenged on their charges (and they are some of life’s most accomplished horse traders, so don't be too afraid to ask).
Until he retired, I used a country solicitor from the Midlands – a friend of the father of my ex-girlfriend. He was an Aston Villa season ticket holder and we bonded over some great football chats at my not-quite-father-in-law’s rugby club. He was also as good as any London lawyer, far more trustworthy and a fraction of the price.
People. Moorgate’s juniors start on a better rate than the competition and have their salary raised more often. This means I get good employees that can absorb heaps of responsibility. Of course, we struggle to compete at the higher level so offer equity for long service. And that's genuine equity - not a smoke-and-mirrors profit share scheme that so many equity option-schemes turn out to be on closer inspection. So we may not have a Christmas trip to Paris or a bar on the roof for after work drinks, but employees are paid a good rate, move along faster, do more meaningful work and become a part-owner of the company – so who cares about the tired office block and scuffed desks?
Showing posts with label Gordon Gekko. Show all posts
Showing posts with label Gordon Gekko. Show all posts
Thursday, February 24, 2011
Saturday, October 16, 2010
Developing compassion: bankers
A reposting (and re-editing) of old-blog posts I like.
On several occasions recently, I have found myself defending bankers. This goes way beyond my day job of running a PR agency that’s focused, to a large extent, on banks. In reality the agency positively profiles the products and services of banks (and others) to sophisticated audiences such as corporate treasurers, financial institutions and other banks. In this defence I was defending bankers themselves. Like Gordon Gecko in Wall Street, I was even defending greed.
To many this really will seem like the ultimate exercise in trying to develop compassion, as recommended by Don't Sweat The Small Stuff author Richard Carlson (and as explained in my previous posts). Yet for me – as an ex banker – it is probably more the other way around. It is me asking others to examine their – perhaps stereo-typical, perhaps (even) a touch prejudicial – views on a section of society currently the target of a great deal of loathing from all “right-thinking” people.
First let’s defend bankers themselves. Much of my defence focuses on my view that the typical banker is a long way their unsavoury media stereo-type of shouting yobs in red braces or arrogant and braying fools at a race track or in a nightclub. Of course, those types exist but they are a tiny minority compared to the thousands upon thousands employed in the financial services industry, even on the trading floors. In fact the vast majority of bankers are very normal people – perhaps even too normal to many of their detractors.
If I was to paint a stereo-type of a City banker, therefore, it would be of a conservatively-dressed, state-educated, family man or woman travelling in from their newish home in one of the nicer suburbs in the Essex or Kent commuter belt (or New Jersey or Connecticut if in New York). They undertake highly-technical, highly-specialised work – often working long hours. They don’t smoke, drink only moderately and don’t know the first thing about recreational drugs. Their main passions are golf, squash and maybe Tottenham Hotspur or West Ham United at the weekend (though probably not since the kids were born).
Of course they are ambitious. These are the children of working-class Londoners (or Scots or Northerners or Asians for that matter), seeing the financial services industry as their route to advancement. Indeed, my father would often state that his generation of post-war working class men advanced into the respectable middle classes via the sciences. Well, for our generation, the same can be said of the City (or Wall Street). While most creative careers (at least the lucrative ones) remain the preserve of the privately-educated elite, those seeking advancement from the sometimes painfully-low horizons of a poor education and an inept social training now focus on the financial services.
But what of the greed that was supposed to have nearly destroyed the banking system in 2008? Indeed, saying someone has the stereo-type wrong does not undermine the concept of greed, or its role in the banking crisis. And while I could put a technical spin on the crisis – in part blaming the “law of unintended consequences” from previous rounds of regulation (Basel II and IAS-39 being two regulations worth examining in this respect) – it would be stupid to say that greed played no part.
So can I defend greed in order to try and evoke a compassion for bankers? I can try – perhaps by turning the debate around and examining those that detest bankers and their greedy ilk. For this I need to make reference to Maslow’s hierarchy of needs. Abraham Maslow was interested in exemplary people and their motivations (Eleanor Roosevelt was a particular focus), which turned into a “ theory of human needs and self-actualisation”. Usually expressed as a pyramid, Maslow – in his 1954 book Motivation and Personality – states that humans move up from the basic physiological needs for food, water and sleep, to require safety in the form of shelter, employment and health. Above that humans need friendship and love and above that self-esteem, confidence, achievement and respect. And at the very top of the pyramid are attributes such as morality and creativity.
The important point here is that, at all levels, money is simply a means to an ends. Material advancement is no more than a ladder up to the next level. Certainly, Maslow contends that we cannot graduate up to the next level without satisfying the needs of the lower level. Only once we have food and water can we think about shelter and security. Only once we have safety can we think about love and belonging. Only once we are loved can we think about self-esteem and respect. And only once we have self respect do we crave morality and seek to express ourselves creatively. Interpret this into career ladders, ambitions and a focus on material advancement and it is easy to come to a view regarding why some people still seek wealth (if only to get their children to the top of the pyramid via a private education) while others seek more spiritual rewards.
And it might also be the case that, once at the higher level – perhaps thanks to the efforts of a previous generation – it is difficult to develop compassion for those in the immediate level below, while compassion for those well below us in Maslow’s hierarchy comes naturally. Certainly, it is easier to be compassionate about those seeking food or shelter than those seeking material advancement so their kids can also reach the podium of creativity and morality. But that doesn’t preclude us from at least trying – even if, to adopt a very Carlsonian concept, it is just for fun. And if even if that won’t work? Even if we still hate those “greedy” bankers? Never mind – we can at least comfort ourselves with the thought that that their children may be more to our taste.
One last note on this. In no way is this a judgement or a condemnation of those that attack bankers or greed – or those that have made it to that happy place at the top of Maslow’s hierarchy (however they got there). It is simply a plea, in the best Carlsonian tradition, to “develop our compassion”. The point being that the harder this seems, the more worthwhile the exercise.
On several occasions recently, I have found myself defending bankers. This goes way beyond my day job of running a PR agency that’s focused, to a large extent, on banks. In reality the agency positively profiles the products and services of banks (and others) to sophisticated audiences such as corporate treasurers, financial institutions and other banks. In this defence I was defending bankers themselves. Like Gordon Gecko in Wall Street, I was even defending greed.
To many this really will seem like the ultimate exercise in trying to develop compassion, as recommended by Don't Sweat The Small Stuff author Richard Carlson (and as explained in my previous posts). Yet for me – as an ex banker – it is probably more the other way around. It is me asking others to examine their – perhaps stereo-typical, perhaps (even) a touch prejudicial – views on a section of society currently the target of a great deal of loathing from all “right-thinking” people.
First let’s defend bankers themselves. Much of my defence focuses on my view that the typical banker is a long way their unsavoury media stereo-type of shouting yobs in red braces or arrogant and braying fools at a race track or in a nightclub. Of course, those types exist but they are a tiny minority compared to the thousands upon thousands employed in the financial services industry, even on the trading floors. In fact the vast majority of bankers are very normal people – perhaps even too normal to many of their detractors.
If I was to paint a stereo-type of a City banker, therefore, it would be of a conservatively-dressed, state-educated, family man or woman travelling in from their newish home in one of the nicer suburbs in the Essex or Kent commuter belt (or New Jersey or Connecticut if in New York). They undertake highly-technical, highly-specialised work – often working long hours. They don’t smoke, drink only moderately and don’t know the first thing about recreational drugs. Their main passions are golf, squash and maybe Tottenham Hotspur or West Ham United at the weekend (though probably not since the kids were born).
Of course they are ambitious. These are the children of working-class Londoners (or Scots or Northerners or Asians for that matter), seeing the financial services industry as their route to advancement. Indeed, my father would often state that his generation of post-war working class men advanced into the respectable middle classes via the sciences. Well, for our generation, the same can be said of the City (or Wall Street). While most creative careers (at least the lucrative ones) remain the preserve of the privately-educated elite, those seeking advancement from the sometimes painfully-low horizons of a poor education and an inept social training now focus on the financial services.
But what of the greed that was supposed to have nearly destroyed the banking system in 2008? Indeed, saying someone has the stereo-type wrong does not undermine the concept of greed, or its role in the banking crisis. And while I could put a technical spin on the crisis – in part blaming the “law of unintended consequences” from previous rounds of regulation (Basel II and IAS-39 being two regulations worth examining in this respect) – it would be stupid to say that greed played no part.
So can I defend greed in order to try and evoke a compassion for bankers? I can try – perhaps by turning the debate around and examining those that detest bankers and their greedy ilk. For this I need to make reference to Maslow’s hierarchy of needs. Abraham Maslow was interested in exemplary people and their motivations (Eleanor Roosevelt was a particular focus), which turned into a “ theory of human needs and self-actualisation”. Usually expressed as a pyramid, Maslow – in his 1954 book Motivation and Personality – states that humans move up from the basic physiological needs for food, water and sleep, to require safety in the form of shelter, employment and health. Above that humans need friendship and love and above that self-esteem, confidence, achievement and respect. And at the very top of the pyramid are attributes such as morality and creativity.
The important point here is that, at all levels, money is simply a means to an ends. Material advancement is no more than a ladder up to the next level. Certainly, Maslow contends that we cannot graduate up to the next level without satisfying the needs of the lower level. Only once we have food and water can we think about shelter and security. Only once we have safety can we think about love and belonging. Only once we are loved can we think about self-esteem and respect. And only once we have self respect do we crave morality and seek to express ourselves creatively. Interpret this into career ladders, ambitions and a focus on material advancement and it is easy to come to a view regarding why some people still seek wealth (if only to get their children to the top of the pyramid via a private education) while others seek more spiritual rewards.
And it might also be the case that, once at the higher level – perhaps thanks to the efforts of a previous generation – it is difficult to develop compassion for those in the immediate level below, while compassion for those well below us in Maslow’s hierarchy comes naturally. Certainly, it is easier to be compassionate about those seeking food or shelter than those seeking material advancement so their kids can also reach the podium of creativity and morality. But that doesn’t preclude us from at least trying – even if, to adopt a very Carlsonian concept, it is just for fun. And if even if that won’t work? Even if we still hate those “greedy” bankers? Never mind – we can at least comfort ourselves with the thought that that their children may be more to our taste.
One last note on this. In no way is this a judgement or a condemnation of those that attack bankers or greed – or those that have made it to that happy place at the top of Maslow’s hierarchy (however they got there). It is simply a plea, in the best Carlsonian tradition, to “develop our compassion”. The point being that the harder this seems, the more worthwhile the exercise.
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