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The China experience - part 1

2010-12-01T10:50:00.000-08:00

Fresh from my MDHUBAlpha trip to China. A fantastic experience - eye and brain opening. We started in Hong Kong - slightly tropical feel to the weather, bright lights and designer shops everywhere - stayed in The Langham which was fantastic and the staff were genuinely friendly as were most locals we met.

A couple of useful presentations from UKTI and HK Trade Development Council - the general message was direct trade with Mainland China was difficult particularly getting money (Rmb) out, IP protection poorish, legal system not what we would be used to. General view at this time - operate through a Hong Kong based company and find a good local representative.

Advantages of Hong Kong - British based legal system, currency linked to US dollar, free flow of trade, good IP protection and a low tax system.

Key figures from the presentations -
1.5billion people - 55% of them under 24
4 million graduates a year
100 million bachelors
200 cities with population of more than 1 million
20 new airports and 20 new underground systems being built
400 million mobile phones
320 million internet users
50% of the world's pork eaten
33% of world's tobacco consumed - forgot what it is like to be in a smoky restaurant or bar.
More people speak English in China than America
GDP growth 9.4% over 10 years
Trade Growth 21% over 10 years
$1.5 Trillion foreign currency reserve - no wonder the US is sweating!
Growing middle class 300 million (although this number varied from presentation to presentation) and 18,000 billionaires.

- that's the numbers, more about the trip later.

The New Normal and other phrases of the year

2010-01-04T02:46:00.000-08:00

So "The New Normal" topped the list for most overused phrase of 2009. I have used it myself and it was a good shorthand for the "unprecedented events" (second on the list) of the last 18 months.

I saw the phrase as a way of stopping any conversations that wandered off into fantasy scenarios of things getting back to normal (whatever that is).

What entrepreneurs are good at is seeing what's going on and doing something with it - whether that is improving their business model, their service or product or launching something new or into a new market.

The best companies that I see regularly have done just this and are better placed now as a result and certainly the worst option when things aren't working is doing more of the same.

The start of the year is a great time to review what you do, who for and why they should come and get it from you - the foundation questions for any business.

As ever come and talk to us and MDHUB members to get an honest and pragmatic view of your plans.

Here's to a good New Year and the latest "New Normal" (first mentioned in 2001 by Warren Buffet, so not that new.)

or that other business model?

2009-06-23T16:58:00.000-07:00

By that other one I mean the common concept that either you are in business to make money or you are there to serve a higher calling to staff, society and the environment. Lord Browne - Group Chief Executive of BP - in a lecture to MIT suggested that actually these are too simple. Pure profit is short term by nature and the higher calling is too often a PR gloss put on top or even distracting such as the "Triple Bottom Line".

The more complex idea is that a good business fulfills it's purpose "by supplying goods and services at a price people can afford in a manner which makes the activity sustainable".

So where does that leave the (serial) entrepreneur?

Growth - now?

2009-06-15T01:06:00.000-07:00

Interesting discussion at a workgroup this week, which followed a theme from MDHUBAlpha. What is a serious expectation of growth for our businesses both in the current climate and going forward. We have seen MDHUB members achieving serious growth rates of 50%-150% per annum over recent years but is it realistic to hit an exit target of £5m-£10m over say, a five year period.
Many entrepreneurs have set up businesses in the last 10 years with a very specific "build and sell" model, I'm pretty sure that what would have to have been extremely strong business models, specialist market niches or just brilliantly marketed companies will now have to be truly exceptional businesses to fulfill that dream over the next few years.
The other angle of the discussion was not new, but perhaps being re-visited, the changes needed to move from a £500k turnover company to a £10m turnover company. The key thoughts being: How do we keep the atmosphere, the small company enthusiasm, the personal customer service and what kind of management team do we need? With perhaps a more focused question of - am I really the MD to do this move?
I know one MD who was absolutely rigid about his abilities - he could take a company from £5-£15m but after that he wasn't the right person. He had achieved it at least a couple of times but I could never quite get at what ingredients worked and what was missing.
So is the time right for "build and sell" or do we need something else?

St. George's Day & Shakespeare's Birthday

2009-04-23T01:28:00.001-07:00

St. George's day and we hear that our Prime Minister is proud of what England has given the world - in particular our language and Shakespeare's phrases now in common usage. He particularly mentioned "a pound of flesh", something the ex-chancellor knows a lot about and a theme continued by his own chancellor yesterday.
The "green budget" barely raised it's head again beyond justifying an increase in fuel duty but there was a whack to those of you earning over £100k with reduced personal allowances and if earning over £150k an extra 10% income tax on the top slice from April 2010. Add in the messy return to 17.5% VAT on 1 Jan 2010 increased penalties when we get things wrong (although nothing for when they do).
The good stuff was restricted to the "Old Banger" relief for scrapping a 10 year old car, the stamp duty maintained at nil up to £175k, re-introduction of 40% capital allowances for a year from April 2009 and confirmation that we can carry back losses for 3 years (limited to £50k pa). Talk to your accountant about how all this affects you.
As for Alastair Darling - the IMF have already said that they don't agree with him - is he trying to put too positive a spin on things? You undergo too strict a paradox, Striving to make an ugly deed look fair. (as Shakespeare also wrote, Mr Brown).

2009-04-09T03:19:00.000-07:00

Following another good MDHUBAlpha session some of Michael Porter's thoughts on strategy were discussed, I had a chat with another business who is focussing their strategy on "exceeding client expectations".
My view is we should first aim to agree expectations so we both know what that means and then strive to deliver what we've agreed to a very high standard. There is also an ongoing process of educating and being educated with the client to develop more ideas and ideally deliver more for them.
Certainly a strategy of exceeding expectations is neither a strategy - taking Porter's view that the worst error in strategy is to compete with rivals on the same dimension ie competeing to be the best rather than his choice competing to be unique - nor is it an easily achievable goal as so often we do not really understand our clients true expectations.

Keep on running

2009-03-06T02:33:00.000-08:00

Great session with the Alpha group, sparked me into thoughts about leadership at the moment. I have often thought it's your bloodyminded stubbornness that marks the MDHUB Mds. Got an e-mail this morning that included a quote from Calvin Coolridge which seemed to fit the bill.

Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan 'Press On' has solved and always will solve the problems of the human race.
Calvin Coolidge30th president of US (1872 - 1933)

Obviously you need to know where you are "pressing on" to but most of you do.

Seminar and BERR

2009-02-13T01:00:00.000-08:00

Good session at the seminar this week and I believe that some of you gave those nice people from BERR a tough time. Thank for the involvement they seem to be genuine about finding out about small businesses but no idea what happens next.

On the business front a couple more Hub companies reporting that business is holding up well and another who has seen business slide at the end of last year but now holding level and feeling a little more confident.

Also an interesting discussion about keeping staff in the loop and one important point if you are doing most of the new business for your company, don't forget to let them know how it's going. You may have a positive feeling after a pitch but they may just have seen all the hard work and not know how it went. Generally the feeling is that you should be monitoring the pipeline and be transparent about it.

Still finding HMRC helpful with tax re-scheduling but they are asking for a business case to back it up so expect a few more questions but still a useful way out of a cashflow hole and yesterday a bank said to a client "we are going to help you through this"!

They're coming to get me

2009-02-04T12:56:00.000-08:00

Our house (and part of the village) was cordoned off due to a rumoured cache of explosives being found up the road. Unfortunately they neglected to check the house first so Gill dragged out a couple of bemused teenagers and a sleepy dog leaving the security experts to blow things up. That excitement over back to business.

Interesting offer from a bank at 0.5% over base on what is admittedly an excellent covenant but there are some deals out there.

Also looked at a couple of good business performances - their secret? - Good management, good basic product, a good share of their market and a history of aggressively paying off debt.

Gordon Brown (by accident?) called it a global depression today. Avoid depression - keep talking to your peers and look after each other when things are tough, sometimes we need someone else to remind us to keep going for it.

End of January

2009-02-02T11:10:00.000-08:00

Back from Christmas and a broken laptop - realised how much I use the laptop out of the office.
Still getting patchy stories out there - one company had their best month ever in January, another has this year's target turnover 70% booked already, another won 4 straight pitches as clients move from larger suppliers. However also heard of orders drying up in the space of a week and of course everyone is hanging on to their cash. Still no movement on the Government's secured lending to business which is not due until end of February but one bank I spoke to said it still did not mean that money would come easy, they would still want to see financials and a plan.

Key things to concentrate on - Cash of course - offer discounts for quick settlement, get people on standing orders where they pay regular fees. Look at your cashflow and budgets regularly and now of all times know your pipeline of business and set costs accordingly. re-do your business plan it needs to be a working tool.

Can you make your costs more flexible? - I have heard of companies reducing working hours and therefore pro-rata salaries, others changing to production linked pay - make sure you get good HR advice first. Above all keep your staff involved and let them know how things are, they might have some good ideas for you.

....and finally - look after those customers, call the ones you haven't spoken to in a while and don't forget to ask for more work.

MDHUB Seminar - February

2009-01-21T04:25:00.000-08:00

MDHUB Seminar – 11th February 2009
Marketing your company during a recession

The seminars are monthly informative sessions delivered by MDs and based on their practical experience of their subject. We are pleased to announce that on the 11th February, Kate Burgess from KBC Public Relations & Marketing Ltd will be our guest speaker. She will be bringing her associate Neil Edwards of The Marketing Eye.

In addition, experts will be able to answer individual questions, develop open discussions, followed by valuable speed networking opportunities.

The seminar will take place at the Royal York Hotel, Brighton, 3pm. If you have not already confirmed your attendance to this event please reply to this email: editor@mdhub.co.uk or call 01273 311220.

Seminars come free with MDHUB 100 & 250 membership but cost £30 for non-members.

Finance and things

2008-12-11T05:13:00.000-08:00

A good session yesterday on raising finance - one thing that came through clear and strong is that at the sub £500k level Angel investors are the best option, and don't be afraid to approach people you think might be interested in your business.

If you are aiming to raise finance make sure you have your business plan ready and updated so that you can react quickly - it will be the first thing you are asked for.

On things in general - still the same mixed messages - a few companies tightening belts but others actively looking at opportunities to expand at home and abroad. But we are firmly in the "Decision in January" time where nothing will happen this side of Christmas on bids/tenders.

Remember to check your clients and potential clients - look at where the money is and position yourselves to get your share - the government has apparantly shortened it's payment terms and there are projects with committed funds to be spent, look out for those opportunities.

Keep talking to your existing clients, let them know that you are around and want to do business - in fact ask them how you can do more business with them - it's already worked for one Hub company in the last month.

The Banks - again

2008-12-07T03:14:00.000-08:00

Another couple of meetings with banks this week.

For rock solid asset backed (60% of value) loan they are generally looking for a minimum of 2% margin and typically now on LIBOR not base - so with LIBOR only falling to 3.38% on Friday after the base rate cut you're looking at 5.58%. For unsecured money (still needs a minimum directors' guarantee) rates quoted are anything from BASE + 5% - Base + 12%.

The shift to LIBOR is not too suprising, remember this is the rate at which banks lend to each other (when they do) and also the government money into the bank is reported to be lent at 12% so they are being squeezed.

Best news is if you are a vet - the banks will probably lend you 100% of your cost for a new surgery at probably a margin of 1.5% over LIBOR or even base. The banks have always loved the white coat professions and things haven't changed there.

News from Hub members still mixed - some reporting strong sales, others getting through pitches but implementation not until the new year, others finding things tighter. The main message is people are holding onto cash so get tight on your debtors and remember historically January is the worst month for insolvencies so review your clients carefully.

On a final positive note - the best thing to do at the moment is remind your customers you exist and are still around foir business - make that phone call that you have been meaning to do, they'll appreciate it.

A niche and the DiMA:S

2008-11-27T16:01:00.000-08:00

Interesting conversation amongst some of the HUB 250 MDs this afternoon about the need (or not) for smaller companies to strengthen their identification with a niche in their market. Overall feel was probably yes - in the face of broader base competitors buying in business but with a strong feeling that business was there to be won particularly from London based competitors at a decent price.

And talking of a niche - Brighton and Hove's not so small niche as the primary city for digital media was enhanced by an excellent inaugural Digital Media Awards: South at the stunning, if slightly cramped, All Saint's Church in Hove. An enjoyable evening with some well-deserved award winners and a great example of the talent in Brighton & Hove and beyond. Congratulations to Phil Jones, his team at Wired Sussex, Midnight Communications and the supporters and sponsors. It should help convince the doubters (and there still are some) to back Wired Sussex's campaign to make the area renowned for its creative digital skills.

I spent the evening in the, as always entertaining, informative and occasionally raucous, company of the Nixon McInnes types who sadly missed out on the Blog award. FTL! I guess this time chaps.

2008-11-27T15:59:00.000-08:00

Well the answer is "we are still in the business of lending money" but strong message is for the right deal and with the right (i.e. strong) security at the right (i.e. higher) price. Let me know of any experiences you might be having.

BBC confirms VAT thought

2008-11-26T00:45:00.000-08:00

I'm glad to see that the BBC have picked up the news of the potential VAT rise even though it's now being heralded as a mistake. As a sad beancounter this news had already been hawked around the trade press and I still say they will probably do it - whoever "they" are by that stage.

Any news from the banks? - RBS are saying that they are still lending and I'm meeting them tomorrow so I'll keep you posted....

Chancellor rides to the rescue of business?

2008-11-24T10:18:00.000-08:00

or does he?

Widely touted and leaked package to "kick start the economy". From a quick glance it looks like the best news for smaller business is the delay to the increase in the corporation tax and a promise to allow us to spread tax payments to help cashflow, not sure what the second one means but the phone lines to the Revenue will already be red hot and I wonder if a certain Revenue employee will now hold off on action against a client struggling to pay PAYE?

The VAT adjustment won't help too many b2b service companies as it is just a pass through except for things like entertainment and car purchases where it can't be reclaimed. I guess it may help the retail sector to subsidise their discounts.

Watch out for the government's favourite stealth tax - National Insurance - will be going up for employers and employees from 2011. Don't bet against VAT following once it gets back to 17.5%.

The Chancellor says that the economy will recover in early 2010 - will it?

We are still getting very mixed messages some members are still seeing good business and in fact 3 recently reported October as their best months of the year.

Will it make much difference to you? What are the best bits?

MDHUB Seminar dates for 2008 - 09

2008-11-10T04:49:00.000-08:00

The MDHUBs monthly seminars start this Wednesday. They will be running once a month, 3pm at the Royal York Hotel, Brighton.

The seminars are monthly informative sessions, delivered by MDs and based on their practical experience, both good and bad, of their subject. We are please to announce that on the 12th November Penny Bailey will be sharing her experiences of the highs, lows and rewards of being a Managing Director.

Penny is the Managing Director of Bailey Solutions and also a finalist for the Institute of Director's Southeast Region's Director of the Year Awards 2008. Penny will find out if she was successful when the winner is announced on November 25th 2008.

In addition, experts will be able to answer individual questions, develop open discussions, followed by valuable speed networking opportunities.

For future reference, the up and coming seminars are as followed:

Managing the pressures of being an MD - 12th November

Raising finance & Investment - 10th December

Managing maternity & paternity leave - 14th January 2009

Marketing - 11th February

Recruiting & Managing good sales staff - 11th March

Updates on employment law - 8th April

International business - 13th May

Social Media – an update on last development - 10th June

Acquisitions & Mergers - 8th July

Buying & selling a business - 12th August

Branding - 9th September

Introducing robust management & quality systems in business - 14th October

PR - 11th November

Seminars come free with MDHUB 100 & 250 membership but cost £30 for non-members.
If you would like to book your place on any future seminars please email Kate - editor@mdhub.co.uk or call 01273 311220.

MDHUB launches programme of Seminars

2008-11-07T02:01:00.000-08:00

The MDHUB Seminars are monthly informative sessions, delivered by MDs and based on their practical experience, both good and bad, of their subject. The programme will start on 12 November 2008 and take place every second Wednesday of the month from 3.00pm at members’ offices.

Wednesday 12th November 2008-11-05
Seminar 1: Managing the pressures of being an MD

The MDHUB is pleased to announce that Penny Bailey will be sharing their experiences of the highs, lows and rewards of being a Managing Director.

Over the forthcoming months the seminars have an impressive line up of specialist speakers, which include Fiona Martin from Martin Searle Solicitors, Jamie Shaw of Geeks on Wheels and Kate Burgess from KBC Public Relations & Marketing Ltd amongst others. Other topics that will be covered range from managing maternity and paternity, developments in Social Media and raising finance and investment.
In addition, experts will be able to answer individual questions, develop open and rigorous discussions, followed by valuable speed networking opportunities.

The Managing Director of the MDHUB, Phil Green says
“Combining the wealth of experience and diversity of members’ business, the seminars aim to facilitate sustainable business and personal development for managing directors by providing an open, honest and challenging environment in which to test business thinking with the confidential support of their peers”

Seminars cost £30 for non-members but come free with MDHUB 100 & 250 membership.

To find out more or wish to attend our next monthly seminar held on the 12 November 2008, please contact Kate Mockford on 01273 311 220, alternatively email editor@mdhub.co.uk

MDHUB Annual General Meeting - 29 October 2008, Stanmer House

2008-11-06T08:47:00.000-08:00

The Annual General Meeting provided members and supporters with the opportunity to network and catch up on the latest MDHUB developments. The event was held at Stanmer House, Brighton and included presentations by our own Phil Green, Anna McGrail from Content Consultants and Norman Mayhew from The Sussex Signs Company.

Support has arrived for Mid Sussex MDs

2008-11-06T07:31:00.000-08:00

The MDHUB’s launch event was held in Burgess Hill within the prestigious building of the successful jewellery concessions firm – Icon Live. MD’s from all over the region attended, to network and learn from Rosie Freshwater, MD of Leapfrogg Ltd about how the MDHUB supported her business growth.

Being an MD can be a lonely job, which is why the MDHUB was set up. Its aim is to be the premier peer to peer business growth support network for Managing Directors in the South of England. To facilitate sustainable business and personal development for MD’s by providing an open, honest and challenging environment in which to test business thinking with the confidential support of their peers.

Due to the success of the MDHUB in recent years it now has two divisions, the MDHUB100 and the MDHUB250; both dedicated to the pursuit of business excellence catering to MD’s with different lengths of experience.

The MDHUB operates an annual programme of monthly workgroups and seminars, coupled with events, training and other invaluable business activities. For more information please visit http://www.mdhub.co.uk/.

Bringing the MDHUB to the Mid Sussex region will help not only to support the sustainable growth of local businesses, but also to encourage local MDs, who join the organisation, to work together and use one another for support through the MDHUB’s facilitated business programme.

The Managing Director of the MDHUB, Phil Green says “The Brighton and Hove MDHUB effectively supports its members, all MD’s of varying sized companies, to achieve business excellence. This continues with great success; in the last couple of years three of our members have sold their businesses for in excess of £50 million but remain and continue to grow in Sussex. We are very much looking forward to seeing the same results in Mid Sussex.”

To find out more about the MDHUB or to attend one of their taster workgroups to be held in Mid Sussex on the 5th and 10th November 2008. Please contact: Kate Mockford editor@mdhub.co.uk or ring 01273 311220.

Welcome to the MDHUB

2008-11-06T07:12:00.000-08:00

MDHUB is the premier business club for leading MDs. Dedicated to spreading best practice through peer-to-peer contact between like-minded MDs. It is our aim to help our members develop sustainable business growth.

Our organisation provides a challenging but open, honest and trusted environment for pursuing fresh ideas, resolving demanding issues and debating the future of business.
MDHUB currently operates in Brighton & Hove and Mid-Sussex with two divisions, the 100 and the 250. Both are dedicated to the pursuit of best business practice, but each caters for MDs with a different length of experience.

This blog is intended to inform you on all the regular activities that go on within the MDHUB. If you are not already a member then this is the place to find out what we do and how to join us.