Today’s Financial Times had an interesting article about the widening wealth gap opening between generations.
The synopsis is that the Baby-Boomers aged 55-64 hold double the wealth of Generation X aged 35-44. Worse still, it is believed that Generation X will never achieve the level of wealth of the Baby-Boomers given factors such as the fall in pension benefits (especially final salary schemes – now pretty much the preserve of the Baby-Boomer Generation!) and the rising fiscal burden falling on Generation X to support ever extending life expectancy (aside from our budget deficit).
It reminds of a recent conversation I had with a friend who was day-dreaming about winning the Lottery to achieve his financial and lifetime goals. Without wishing to shatter his illusions (I did!), we discussed the only real way to achieve financial success:
Building your own business.
This is the only way for most people to achieve financial freedom or even millionaire status. And a surprising number of everyday folk do. I’ve met many self-made millionaires. I’ve never met a lottery winner…
So if Generation X are to bridge the wealth gap with the Baby-Boomers, we need to encourage more entrepreneurs. More start-up businesses. More support for early stage and growing companies. Perhaps the creation of more micropreneurs…?
Entrepreneurs are the lifeblood of our economy. Especially those entrepreneurs who are prepared to pick up their bat and start again after a successful exit or business failure – they are often referred to as serial entrepreneurs.
But there may now be a new kid on the block…
The Micropreneur is a different sort of entrepreneur. They start and build lots of small businesses normally simultaneously. There is also no overriding aim to build a large business. Being small is ideal. Being a microbusiness is key. This has the following advantages:
Microbusinesses run by Micropreneurs are on the increase and it is easy to see why. For example, why settle for a 9-5, 5 day -a-week business when you could juggle 3-5+ exciting small businesses instead. This also spreads the risk should one business fail.
For those employees who view the alternative of being an entrepreneur as risky, being a micropreneur could be the perfect antidote.
Likewise for those investors who view business angels as big risk-takers, being a microangel that invests (say £1k – £20k) in these fast growth, nimble businesses could provide an exciting opportunity as well as supporting some of our best and innovative talent.
Getting the price right for your products or services is key if you are to survive – let alone thrive – but how do you achieve this?
Most businesses reverse-engineer pricing – put simply, they work out how much it costs to buy and / or assemble the raw materials or goods, factor in other indirect costs (e.g rent, power etc) and then add a profit margin. This approach is widely accepted and, although its a reasonable start, it is fundamentally flawed.
There is a far better way. But it’s harder as it takes imagination. It also requires that you step away from the safety of the herd.
1. Customer experience = Customer value (Price)
YOU should not dictate YOUR perceived value (aka price) for YOUR goods / services onto me as a customer.
Think about it – if you start from the perspective of:
YOUR cost of purchasing goods + YOUR rental (+ other indirect costs) + YOUR perception of the ‘right’ profit margin = Price
then you completely miss MY (all important) customer perception of value. There’s far too much of you as the business in this equation and too little about me as a customer. This is exactly where most businesses go wrong – and ultimately end up in a price-war because they’ve no other competitive-edge.
What if you could:
How could this be different for your business?
Clue: me (+ lots like me) will become blind to your price and loyal to you + your business. Trust me.
2. Potential for exponential growth
Once you’ve cracked point 1, the (ingrained) correlation between YOUR costs and price become disconnected. This is key.
and you have the recipe for exponential growth in your business.
Cracking No.1 is the hard bit. But its worth it. What the world needs now is Soul Businesses that deliver exceptional service like no other. Its an open goal…
Whilst we watch the newspaper industry being decimated, its tempting to attribute its demise to the recession and consequent decline in advertising revenue.
But such a widely held view misses the KEY point.
Look at the above chart, comparing ad revenue of US classified ads website Craigslist with ad revenue generated by traditional newspapers over the same period. Advertising revenue for newspapers has decreased (no shocks there) but look at the ad revenue for Craigslist since the recession hit in late 2007 – it has increased dramatically, demonstrating that capital does not disappear, it simply shifts to a more effective and efficient business model. It is estimated that the newspaper industry has suffered a $10bn hole in ad revenue in the last decade – Craigslist has clearly picked up much of this slack.
As well as being a game-changer for the newspaper industry, Craigslist is one of the Top 30 most visited websites in the world yet it has less than 30 employees.
Craigslist is an example of a new breed of flexible, lean, game-changing businesses that are capable of challenging traditional, established businesses – or even entire industries. No industry sector is safe. You should be considering now what game-changing business model could redefine your industry and either prepare to compete in the very near future or (ideally) start building it.
It is with great pleasure that I introduce Andrew Thorp as our guest on this week’s Business N2K podcast. Andrew is a business speaker and trainer focusing primarily on effective communication skills within business.
Andrew recently launched SpeakEasy within the North West and it is proving hugely popular amongst the local business community. SpeakEasy is a forum for business leaders and owners to get together in a supportive and informal environment to practise delivering their business message and obtain valuable feedback in the process. I was lucky enough to attend a recent SpeakEasy event in Manchester to experience the benefits first-hand – it was a great and enlightening experience.
In this conversation, Andrew shares some tips and learning points on effectively communicating your business benefits and message including:
It is said that a US survey identified public speaking as the No.1 Fear held by people (death was ranked as a lowly second!). Yet with practise and perseverance in an encouraging atmosphere like SpeakEasy, many more business people should be able to tackle this vitally important (life as well as) business skill with confidence.
How you can listen to the BusinessN2K podcast:
Please leave your comments, feedback and suggestions for future shows in the comments section below.
Credits: Thanks to Andrew Thorp for this week’s show + music used in the BusinessN2K podcast is by Viba – In the Orchard lies a Secret – available as a free download and is released under a Creative Commons Licence
Technology is evolving fast. It is changing everything – from home to the workplace. Although many businesses are wrestling with these changes, others are already seeing the benefits of collaborative working, knowledge sharing and real-time communication that technology advancements can bring. From my perspective, barely a month goes by without another game-changing possibility being introduced e.g. a new productivity, marketing, communication or some other channel or tool.
We are entering a New World of Work.
It is crazy to think that when I was at Uni (‘only in’ 1993-1996), we had to
When I started my professional training-contract at KPMG in 1997 I recall firing up my laptop with trepidation…. Microsoft Office was a new world that was set to become a staple part of my working day.
At home today, I am continually amazed by how naturally my 6 year old interacts with technology. It is an everyday norm for him. He is a Digital Kid. He can log into Club Penguin and other (protected) online gaming platforms without assistance. He uses the mouse tracker pad with ease and can find his way around the keyboard to interact with the gaming experience without fuss. He loves it and, here’s the interesting bit, it has without doubt accelerated his reading, questioning and strategic thinking abilities.
Although we keep tabs on the time he spends on the Mac Book playing online children’s games, ZX Spectrum gaming skills has nothing to do with it!).and Wii, I am relaxed about him getting to grips with technology at this early age as – let’s face it – an advanced competence in technology is going to be a key life skill for his generation (hey, this requirement is already pretty much here). Plus he enjoys it and learns in the process. A win-win. (the fact that it gives me a chance to indulge my old
But what happens in our schools today to reflect these changes? Not enough from my perspective so far. Although the blackboard has now become a whiteboard with overhead projector and there’s access to a computer room, the rest seems pretty archaic. Lining up to go in, sat on a mat being read to, practising joined up writing for hours on end etc. Meanwhile, there’s a national curriculum that appears to have been designed in the dark ages.
If our UK children are to excel in the 21st century New World of Work we need to seem some changes – and fast.
We need children who are encouraged to:
The future of UK (/global) enterprise and the world of work needs Innovators. Leaders. Entrepreneurs.
Our education system needs to reflect this. It is impossible to know what job(s) my 6 year old son will carry out over his lifetime (most roles probably do not as yet exist), however, it is important that we equip our kids with an inquisitive, curious and questioning mind; confidence in utilising latest technology and an overriding focus on thinking skills and developing new, creative ideas and work (rather than an education system based on regurgitating known facts as has been the norm over the 20th Century- all pretty useless in a Google and Wikipedia New World of Work).
And then there’s my 3 year old…
Postscript: I was at VentureFest 2010 in Yorkshire today and was pleased to see what appeared to be a great deal of involvement of local high schools in tech projects, exhibitions and competitions which is promising…
I was deeply saddened by the news that an ex-client of mine was placed into administration this week. A large multinational manufacturing business with over 200 UK employees based in Ellesmere Port. What makes this news particularly saddening is that the company was the best in the world at what it did – but there was a (known) problem…
It was part of a global group who were the world leaders in manufacturing newspaper print. It served a severely declining sector. What turned out to be the wrong sector.
I have another client who is the best in the world at providing sound equipment for film and music studios. They have a growing pipeline of orders as cinemas continue to evolve and grow their offerings, such as the recent 3D Avatar movie (for which they incidentally supplied the audio equipment). They had been through some tough times over the past 5-10 years when the movie industry was in the doldrums but now they are in the right sector at the right time (again).
All industry sectors have their peaks and troughs. Look at the dot.com boom and bust. Who would have thought the banks could have got themselves in such a state? We have neither the time nor the ability to gaze into crystall balls but we can:
There are disproportionate rewards for those businesses that can become best in the world in their sector. The trick is to remember that things never stay the same and that you must continually invest in seeking that next best in the world product or service. Reinvention. Always.
I am looking forward to finally meeting up with a long-standing client of mine this evening – a virtual client. Although we have worked together for almost 4 years, we have never met in the flesh as he is based in Los Angeles, US.
Yet technology has allowed us to work closely over the years despite the significant distance between the UK and US and its getting easier and easier. We rely heavily on email and telephone on a day-to-day basis but screensharing, shared online workspaces and Google Wave-type continual contact are on the horizon. He works largely from home and I try to work from home on regular occasions yet this doesn’t impede our flow of communication due to improving broadband speeds.
Virtual / Global / Cloud consulting – whatever you wish to call it – is becoming an exciting reality.
But how powerful and long-lasting can virtual relationships be? Lisa Tse discussed the importance of bridging the gap to turn virtual communities into real-life flesh and blood communities – via TweetUps for her Twitter followers and friends in her case. This has been immensely powerful for her business in building sustainable and long lasting relationships. Geography can be a significant stumbling block but meeting for real can really cement a relationship – I hope the same will be true of tonight’s real-life meeting!
The only issue is how I will find him at the restaurant in Manchester this evening – having never previously met in the flesh, it’s slightly concerning that we won’t initially recognise each other! Until we speak and I hear his (familiar telephone) voice.
Lisa is famed more recently for her appearance on Gordon Ramsey‘s The F-Word, in which her family-run restaurant Sweet Mandarin won the prestigious Best Local Chinese Restaurant in the UK. Aside from the wonderful cooking, Lisa and her sisters have broken new ground in mixing new marketing techniques to help build a traditional yet thriving business. Her forward thinking approach to business and creativity has led to her role as an alumni of Manchester Metropolitan University Business School and she is in high demand to speak at business conferences throughout the North West and beyond.
I first ‘met’ Lisa on Twitter after being bowled over by how much she ‘gets’ social media – TweetUps and all! Her business has continued to thrive as they have steadily built their community of enthusiastic customers. Lisa has a refreshing outlook on business, having worked as a financier in London (a ‘corporate job’) and made the leap to running her own entrepreneurial business. She is focused on making every experience the best for her customers in order to build the restaurant and leave a legacy – rather than focusing on building a chain of restaurants which could result in growth for growth’s sake.
In this conversation we cover:
The Sweet Mandarin represents a new breed of entrepreneurial business that is closely intertwined with its customers. Lisa and her sisters are the ‘face’ of the business and they actively engage with their customers and the wider Manchester business community. They manage to mix more traditional and established business (restaurateurs) with new (social media, community engaged, transparent, forward thinking).
I firmly believe that we can all learn as businesses from Lisa, her sisters and Sweet Mandarin.
How you can listen to BusinessN2K:
Please leave your comments, feedback and suggestions for future shows in the comments section below.
Credits: Thanks to Lisa Tse for this week’s show + music used in the BusinessN2K podcast is by Viba – In the Orchard lies a Secret – available as a free download and is released under a Creative Commons Licence