From 0 to 70 million in 10 years Presentation by: Chris Cole Managing Director, Make It Cheaper
Unspectacular school achievements:Who am I? • 5 O-Levels (They’re what GCSE’s used to be called) • 0 A-Levels (Kicked out of sixth form – parents still don’t know) • Attended local college Life going nowhere, shaped up, launched a recruitment company with some friends and discovered the wonderful world of business. RA 10 years later: • Listed for £67m • #1 on the Virgin Fast Track list. In 2007 helped launch Make It Cheaper with focus on saving SMEs and start-ups – businesses like yours – money. In 2012 we will save businesses £100m with our free impartial service. In a 20 minute phone call we could save businesses £2k, which goes straight to profit. That’s a huge number of pints, haircuts or bunches of flowers. If you get fully on board this could grow to 4 or 5k each year. I am passionate about growing businesses and the role of SMEs and start- ups in the economy. I’d like to share some things I’ve picked up along the way – some things I have learned myself and some I have borrowed from others...
Life/Work balance People talk about the life/work balance BUT Is there really any such thing? To me there’s just life. When it’s over I want to be able to answer ‘Yes’ to this question: Have I spent my life doing what I wanted to do? Working hard, growing a business or selling a company may or may not be on that list. (It is for me, along with growing a happy family, travelling and a few other things.) If you end up answering ‘No’ then the only person to look at is YOU. 80% of people want to start a business but only 5% actually do so. Who’s thinking about it? Who’s going to take the plunge?
Do something you’re passionate aboutHearts and Minds Why? • More likely to make your million • Even if you don’t, you’ve enjoyed yourself Ask yourself this: What motivates me? What is my goal? For me: Money Houses Cars Holidays Achievement Security Regardless of scale, key is to align your actions to your goals. For me this meant: • 14 to 20-hour days • Commuting from London to NYC • Not seeing kids from Monday to Friday • Selling my flat for capital You don’t question this if: a) You enjoy it b) You’re doing it for yourself
Set a vision for your company, then take it on a mission. This is a lessonMission not a job I learned at Richard Branson’s event for the Virgin Fast Track, where speaker after speaker spoke about this idea. The power of the 3-year plan. Two years too short, five years based on too much guesswork. Three years gives you focus and direction. At Make It Cheaper we set an aim to save UK SMEs a total of £500m by 2014. We want to do this by: • Achieving more revenue balance across our services • Meeting more needs for more customers • Reducing our reliance on third parties and getting in charge of our own destiny It’s a mission, not a job, and all our staff are on it. We have developed a culture to help us achieve this, based around these values: 1) Passion 2) Integrity 3) Expertise 4) Professionalism 5) Impartiality Do you know your values? Do your customers? Remember the cleaner at NASA in the sixties who was asked what he did? He replied, “I am putting a man on the moon.”
Be Unreasonable Here’s something I learned from Charles Dunstone, the guy who started Carphone Warehouse: Be unreasonable, and your team will be amazed with what they can achieve. Invest time in coaching people, challenging people, developing people – and learn how to delegate with accountability. At MIC we measure team and individual performances and challenge staff to keep beating them – just like high-performing sports people. Jack Welch (former SEO of GE): “If you don’t measure it, you can’t manage it.”
Shoot for the Stars Here’s a true story about my Aunty Elena. She grew up in a wooden hut in the foothills of the Himalayas and went on to become the headmistress of a great school in the UK. This is a pearl of wisdom she liked to share: “Aim for the stars and you’ll hit the moon. Aim for the tree tops and you’ll hit the ground.” In four years Make It Cheaper has gone from a back bedroom start-up to a business with a £10m+ turnover operating in two continents. By 2014 we plan to turnover £30m+ in four more sectors and three more countries. Aim HIGH, think BIG
Select a market where the force is with you.A Following Wind For Make It Cheaper, four factors that we knew would support growth: • Growth in energy prices • Energy shortages • Boom in price comparison websites • Grim economic outlook So, we could offer customers something they wanted – a way to make sure that the hard work they put into growing their companies’ top lines ends up on their bottom line. It’s much harder to make profit through revenue than it is to make profit through saving. At Hydrogen we spotted gaps in the recruitment market where the demand for candidates outstripped supply, which is not the norm. Out strategy was to always seek out this imbalance. In 1997 it was accountants, in 2007 it was engineers. Since 2007 we have grown an international engineering business that is about 30% of the group from a standing start.
Read ‘Eat That Frog’ by Brian Tracy.Where will you make If you eat a live frog in the morning, it’s probably the worstthe difference? thing you’ll do all day. Relax, it’s only a metaphor. Successful people don’t put off the big stuff. They face them head on, sort them out, then move on. It’s too easy to get carried away with the day-to-day running of your business – but the trick is to decide what you’re good at and what you’re not so good at. For me: Setting a vision Systems Spotting a market Processes Selling Making tea and handing Hiring out biscuits Crisis management For the things you can’t do, find people who can do them really well. And get on with the things you can do really well.
Tough times are almost inevitable when running aTenacity business. The trick is to stick with it and hold your nerve. In the early days at Hydrogen we were close to going bust, but we stuck with our convictions and held our nerve – even though the stress sometimes felt like a lead overcoat. Our office burnt down. We held our nerve. Out first hire left. We held our nerve. The markets went up and down. We held our nerve. We posted a profit by the skin of our teeth – then the business really took off in year two. However, like a market trader or a gambler at the roulette wheel, know when to cut your losses. If something hasn’t worked, it hasn’t worked. Learn from it. Move on. Keep going forward. If you aren’t making mistakes, you aren’t learning.
Know Your Models For your business to succeed, you must know your model. Tesco CEO Philip Clarke said, “retail is detail”. He knew that the success of his business depended on getting the detail right. • How does (and how should) your business work? • How do you delight your customers? • Where do you make your money? • Who are your most important stakeholders? • Who are your best people and how can you keep them? Don’t go bust because you don’t know the detail. th But at the same time, don’t stifle grow by over-managing the detail.
Exit From the day you start your business, you should have your exit strategy in mind. I used to find this point frustrating but here are two pieces of advice: • Make sure your business is profitable with good growth and cash flow. • Realise that markets have windows. Be on the look-out for the optimum time to float or sell your business.
Sales and Accountancy Here’s two reasons why some start-ups fail, according to my Grandfather (he was a venture capitalist in much more austere times): 1. The founders didn’t know finance 2. The founders couldn’t sell I’m no accountant but I know this: Turnover is vanity, cash is sanity and profit is reality. When you start, focus more on what you’ll spend than on what you’ll earn. That’s something you can control. To sell, be sure to answer these questions. Keep asking them and keep discussing them with partners and key staff: • What is the proposition? • What makes us different to our competitors? • How can I effectively communicate the way my product or service meets my customers’ needs?
There are a million ideas out there, but not all entrepreneurs can execute that idea.How I lost my first A friend of mine once had a brilliant idea for a business – so brilliant that I sold my Aston Aston Martin to back it. He strategised and strategised but never got far with the execution. So I was stuck driving a second hand Prius. There’s a good reason why Richard Branson wrote a book called, “Screw It, Let’s Do It”. Sort through your ideas rigorously, choose the best ones, and put them into action.
Learns and wash Review and learn. If there’s no time to do this when you’re running a ups business, make time. (At Make It Cheaper we take one lunch time a week to “wash up”.) What were our goals for our latest initiative? What were the outcomes? What worked, what didn’t work? What have we learnt and how would we improve it next time?
Don’t be scared to employ people as you grow.No Compromise on Keep it fun and hire great people. People Apply Sir Clive Woodward’s plane test when judging a candidate: Could I sit next to this person on a plane for 24 hours? If not, forget it. The Chartered Institute of Personnel and Development reckon this: A high performer will outperform an average performer by 1000%. Once you’ve hired the right person, set them clear goals, visions and career plans. Recognise their achievements and reward them accordingly.
The What’s? At Make It Cheaper our most important appointment each month is our customer survey meeting.The Customer Since we engage directly with our customers, we can ask them direct questions about our service. What are we doing well? What do we need to improve on? Are we missing a trick somewhere? Make interaction a natural part of customer engagement. The tools are all there waiting to be used: When you get bigger, make sure your sales managers are still meeting customers, not just analysing spread sheets.
Tackling the difficult stuff is just a question of perception.Get Control of The difficult stuff gives you a your mind challenge. It’s the stuff that others can’t do as well as you. It’s the stuff to embrace. It’s the stuff that makes the whole thing fun. Surveys show this: Successful people tend to be more optimistic. (And vice versa.)
The world is a big place The world isgetting smaller BUT The internet makes it smaller and air travel is cheap. SO Go visit, show commitment to your partners and customers, explore new markets, distribution channels and business opportunities. Act as an international company.
That’s It One final thing. Make sure you act on your bright ideas because growing a great company is EASY – just don’t tell everyone… Follow Make It Cheaper on Twitter @makeitcheaper or like us on Facebook.