Ians Slides
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Ian Gordon sold his business due to pressures from running it alone. He discusses the importance of networking for business owners both within higher education institutions and other personal networks. Maintaining diverse networks requires effort to cultivate relationships and offer assistance without expecting anything in return.
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Ians Slides
- 1. ESRC Festival of Science How I sold my business because of Widow Twanky Ian Gordon Entrepreneur in Residence Lancaster University
- 2. O God, not another ESRC seminar
- 3. Wray Castle
- 4. Suppliers Work/Life Balance The Paradox of the Owner/manager Banks Selling the business Customers Cash Flow Family Profitability Network Clubs
- 5. Other networks of the owner/manager Thursday Night Boys GOLD ? To what extent does the social capital created in the HEI generated network translate to pre-existing and other networks of the owner/manager? Mates in the pub Friends in the gym Pals in the wine bar Amount of Trust Busy Fool Number of contacts [Rothstein, ISOCA conference 2007]
- 7. Competitors
- 8. Competencies
- 10. MBWA
Editor's Notes
- Extracts from one time line linking social networking that led to the sale of my company. I was aware of the impact of my small company on a tiny rural area. Each day forty cars drove down the small country roads bring staff to work, the cleaners, caterers, gardeners and the staff all lived in the area. The head of department lived next door to the cleaners mum. Decisions you made about your business impacted on more than the business. I chose to engage with all of this (partly because it felt good). I was asked to become a governor of the local primary school where raising cash was always on the agenda. I was further asked to help form a charitable trust as a suitable vehicle to draw down cash that the school alone could not do. Part of that charity formation was a hunt for cash from the business community and that meant talking to Hawkshead Sportswear, a huge national mail order company that had its head office in the next town and took its name from the area in which I lived and worked.
- Suppliers. You can hardly talk to your suppliers about your concerns for cash flow especially in these troubled times. You can talk to suppliers about some of your problems if it is in the context of some transaction that will have benefits to both parties. A supplier may be happy to give you payment terms for goods being ordered but this is related to a transaction not a stand alone request for help. So whilst you can say, “our cash flow is tight at the moment can I pay you over three months for this stock?” you would be less likely to get away with, “I’m worried that I have not got enough cash to get through this year”. This sits on top of a general requirement in business to be always in selling mode. The default position is that everything is great and we are growing etc etc.The same is true for customers you just can’t go to them with anything other than confidence that should they purchase from you everything will be okayBanks by and large are not to be trusted. They don’t have front line people who understand small business accounts or logic. On one occasion I told the bank up front that we were concerned about our new shop in Chester worrying a little that it may be in the wrong location and footfall may be lighter than anticipated. The bank’s response was to cut the overdraft facility and their reasoning was that they were concerned that our Chester shop might be in the wrong location and footfall may turn out to be light. If you tell them stuff it will just be loaded into a gun and fired back at you.Home. Sometimes and only in some businesses the relationship between home life and business is strained. You may have left a good job with regular pay to start your own business. Presumably you are/were consumed with passion for your new business so it might be reasonable to suppose you are spending more time building that business. You may have put up the family house as guarantee or sold the family car to raise funds. In life you have conflicting pressures between you, your family and your business and the three of them add up to more than one and one is all you have so which one gives. Network Clubs are good ways of meeting lots of people but by and large they are set up to facilitate trading and as such it’s not the place to go in with your concerns.Customers Actually depending on the relationship it is possible to talk about the things that worry you but in the main it’s still a no go area
- This is my model of what I believe is the secret to growth base upon starting, and growing three companies. It represents my view after being in business since 1983 and having been through pretty well everything that a SME business owner can go through. I’ve learned only after some critical incident has stared me in the face that not to change was not a choice. There are of course lots of other areas and academics can put together other ways of looking at growth. But for me it comes down to three areasWithout either a long term mentor or Non Executive Director, it is extremely difficult to stay on track with the big picture. Being the boss, even with junior partners, is a lonely position and you need someone to talk to where you can share your worries. Without this the company may still grow but it will be slower and the simplest day to day thing will put a stop to it happening at all.Ian Gordon’s four c’s (at least I think they are mine). This is where the passion must come in. I have a brother in Scotland who is mad for Steam Trains. Ask him any question about a steam train and he will not only instantly have the answer but he will also give you supporting information and background stories that demonstrate the deep level of understanding. In other words he has a passion for his subject. And so it must be with the four C’s. Forget the bullshit, you must know every aspect of your customers (market dynamics), how your competitors are moving (the industry), be able to identify 4 or 5 key competencies that your organisation needs to have to be successful in the market you have chosen. Finally whilst the P&L and BS is essential the world turns on the movement of cash. For the vast majority of small firms survival, growth or just staying the same depends on the management of cash. All small firms rely on a bank and banks only know how to look at a cash flow. Banks can add up no more than this.The owner must also be able to provide passionate leadership in whatever style is natural to them
- Not the best image but asking you to recognise that you get out what you put in and just having a network is not good enoughThere is a continuum starting with awkward, false breakfast meetings at one end and some network, high in trust, trading favours without thought of repayment at the other end. Trying to sell at a network event rarely works; bumping into Richard Branson is unlikely and even if you do what’s the chances that he might just be looking for a new photocopier.If you can do a favour for someone without thought of any commercial gain (the philanthropic entrepreneur) or payback and without bankrupting yourself, then you are starting to get the idea of networking.If by your actions, indirect or otherwise, the result is the potential client phones you, you probably are more likely to be succesful