by James Caan
If you can run and manage a household, you have got all the basic skills for running a business. If you apply those basics you can run a household, or a business, much more efficiently.
The other day I was sitting in a half-day meeting called the Chief Executives’ Forum. It’s something we do in my company Hamilton Bradshaw every year. We invite all the chief executives within the group to come in. I asked each of them what their key challenges were.
One of the guys spoke up. ‘You know, I have to confess I am not really that financially minded. I have a great finance director, but he always makes me feel a bit inadequate.’
‘That’s a really great point,’ I said. ‘Because of Dragons’ Den, everyone thinks I must be brilliant at finance. But look at my background. I left school at sixteen. I didn’t go to university. I’m not an accountant, not a banker. I have no financial education of any description at all. The truth is that I’m not particularly good with numbers. I’ve never run a profit and loss account. I don’t know how to use Excel spreadsheets. Everyone on my staff can produce a better spreadsheet than me.
‘Yet the public believe that I am very good at numbers and business. So how can I run a multi-million-pound business if I don’t understand those things? I’ll tell you honestly that what I am actually good at is adding up and taking away. Good old sums. I understand debits and credits.’
I told them exactly what I had told Nazima. I used a whiteboard and gave them the same story. Money comes in and then we have costs. We plan and we budget. If we get something left we call it profit, and if we don’t it’s called a loss. ‘Now,’ I asked them all, ‘tell me what the difference is.’
They were all looking at me in puzzled astonishment. ‘Yes, James, but what about budgeting for one-off items or the time of the year?’
‘OK. At home a one-off item is the fridge going wrong or the car needing a new clutch. And the time of the year – seasonality – means planning for birthdays or holidays once a year. It’s the same thing.’
All that the bookkeepers, accountants and financial advisers will do is present that as a more complex spreadsheet. And what I find strange is that I have worked with chartered accountants, people who have business degrees or have worked at major accountancy firms for years, and yet I can still find holes in what they do. How come? I think they get so involved in the detail that they forget the principle of common sense.
I am never afraid of asking really basic questions. So when I do talk to accountants, I ask them, ‘Which box does that go in? Is that in the income box or the cost box?’ There are only three boxes. You’ve got income, you’ve got cost and the third box is profit. There isn’t a fourth box. If the basics don’t work, the rest of it doesn’t matter. That formula has never left me, and believe me, it works. Stick to the core, to what is fundamental.
I believe that’s why I can often be more effective, more efficient. I keep it simple. I get to the point more quickly. Instead of spending a month producing thirty pages of printout, I use one piece of paper. I sketch out the essential elements on a side of A4.
It makes it so much easier to spot the problems. Once you identify the problems, you can start doing something about them. In difficult economic times, people start worrying about money issues, which is only natural. But they are wasting the emotional energy they should be using to go back to the basics and sort out any financial problems.
I have been in all of those situations: running out of cash, not having enough money to pay bills, the VAT and other taxes. My attitude is always to remain calm, because there will be a solution, but only if you talk to people. I’ve talked to clients who owe me money that is not due for another month, but I tell them I need the money now: ‘Is there any way you can pay me earlier?’ I have even asked to be paid on account although the work is not yet finished.
There are many businesses that have gone under because they were too embarrassed to ask. There is no point in being heroic and noble and going bust. As always, I say turn every situation to your advantage. Turn the traditional mindset on its head, observe what everybody else is doing and do the opposite.
Financials: the JC approach
Apply the essential rules of housekeeping. Money comes in, costs go out, and you are left with a profit or a loss. Adjusting the costs is the way to budget.
Don’t let the accountants, bankers or financial advisers bamboozle you. It is very easy to lose sight of those basics behind loads of jargon and sheets of figures.
If you are having a conversation about money and don’t understand what you are being told, ask questions.
With finance, keep it simple, keep calm and you will start to keep in control.
6
Refresh Your Career
Taking a new direction
An obvious way to change your life is to think, ‘I need to get a new job.’ The work you are doing on a day-to-day basis can easily feel dull and uninspiring. You feel you are stuck in a rut. If you are trying to find work, the lack of jobs in the market can be very dispiriting. I want you to tap into the emotional excitement of transforming that feeling.
I have spent many, many years helping people find new jobs and change careers. The very first business I set up, Alexander Mann, was a recruitment agency. I still love that buzz of matching someone to a job that is right for them but also finding a person who will add value to the position and the new company. In fact, I wrote a whole book about the subject. It’s called Get The Job You Really Want.
One of the key points I made in that book was how important it is to prove your value to a new employer. In tough economic times companies want to know a new person is a cost worth paying.
Always aim to demonstrate your value. Keep that in mind whenever you are writing an application letter or putting a CV together. Look for clues in the wording of the ad. Is there something in there you can show you have done?
If it’s a sales job, have you recently made a particular sales target? If so, how much higher was it than the previous target? Or have you come up with a tweak to one particular process or system that’s significantly helped reduce your company’s costs? Can you show how that improved the performance of the team you’re in?
If you are thinking about changing your career, the need to prove your value in a different sort of workplace is even more vital. Don’t rush in. You may need to spend time re-training first. I am always impressed whenever I look at a CV and see that somebody has actively been improving their skills.
Change does create opportunities, but do consider the long-term impact. You might have to uproot your home and family, or end up commuting a long distance. If you’re happy with that, great. However, you could turn the whole idea on its head. Instead of leaving your company, re-invent yourself inside it.
Perhaps you have been in the same job for a while, maybe reasonably happy. What you’ve noticed, though, is that other people are getting promoted, not you. That usually means your set of skills may be out of line with what is needed. If it’s appropriate for the kind of work you want to do, think especially about boosting your computer and IT skills, which are so central to many jobs.
The message here is, again, get the experience and skills you need. Don’t keep quiet and wonder, ‘What if?’ Tell your bosses you are interested in moving the company forward. Could you sit in and observe some meetings in a different part of the business? Can you spend time in the department you are interested in?
In any job search, use the power of the internet. Look on the online job boards. Use it to check out a company you are going to see. Usually you’ll find something on its website about ‘The Team’. There may be press articles about the person you’ll be talking to. It’s all great background for you to build on. There are also plenty of online courses for improving your skills.
The other option is to go off and set up a new business. If you have never started a business, then don’t think it’s not possible.
Let me finish off the story about my siste
r. Here she was, a housewife with three kids, who never wanted to be a businesswoman. Nazima happened to be a very good cook. Her samosas were already selling like hot … samosas. My idea was she should get some larger cooking facilities. She told me, ‘Don’t be so ridiculous, James, I’m a housewife, how do I know how to do that?’
I said, ‘What’s the difference between that and doing it at home? You have got a little cooker. I am just saying, “Get a bigger cooker.” ’
Then she said she didn’t have enough money. I had to work really hard to persuade her to let me provide some funding. She really didn’t want me to, because she was worried she’d lose my money. I pointed out that I never had any guarantees as a Dragon. I am always risking my money. I would rather risk it with her, because I believed in her. ‘Rather than pay me interest,’ I said, ‘just give me some samosas!’ Finally she said, ‘OK.’
Nazima did it. She found a unit, hired four of the mums she knew, and in the first month they made 10,000 samosas. Then she went to all the local shops, presented her samosas, and the shops were buying from her. Even I was surprised … One of the mums mentioned that her husband was in the catering business. He came in on the selling side. It was the power of networking in action again. To cut a long story short, Nazima now has a whole range of samosas, spring rolls and kebabs and supplies hundreds of corner shops and retail outlets around the country.
Look at the way Nazima fought against the very idea of starting up a business. She came up with all the reasons why she couldn’t do it. Yet once she had set her mind on it, she stuck with it. She had a product people really liked: they wanted to buy her samosas. She got the pricing right. She didn’t try to do it alone and brought in a good team of people to help her. She proved that if you get the basics right the rest will follow.
And one final lesson I have learnt about starting up a business. I meet people all the time who tell me, ‘I would love to be an entrepreneur, but I can’t think of the next big idea.’ They believe they have to invent something that nobody else has come up with.
My message is: you don’t have to think of the next big idea. You don’t have to be the next James Dyson. Take an existing concept and modify it. Look at McDonald’s. Did they invent the hamburger? No. They did it cheaper and faster. Did EasyJet invent airline travel? No. Stelios Haji-Ioannou created a solution that was easier and cheaper to use.
Most of the people I personally consider to be entrepreneurial geniuses have done the same. Something as simple as changing a name, adjusting a price point, tweaking a colour. That is just as forward-thinking as a new invention. In fact, to me, those people are even smarter than the inventors because they haven’t had to invest ten years of research and development. As an investor I am always more likely to invest in those people than take a massive risk on something untried and untested.
Career change: the JC approach
For a new job, make sure you can show real evidence of what you can do. Empty promises do not add value. Bring real proof of your skills.
Think about staying with your current company, but really making a difference there. Re-train and re-launch your prospects.
If you have the drive and passion, think about setting up a new business. A recession might be the best time to do just that.
You don’t have to be a great inventor. Look at an area you can understand and make sure you do it better, faster, cheaper.
7
Reveal Your Best
Presenting with confidence
You’ve just heard you’ve got a first interview for a new job. Or maybe you are going along to see a business adviser at the bank because you’d like them to give you a loan to start up a café in the local park. Or you are about to stand up in front of the local residents’ association and propose yourself as chairperson.
In all of those potentially life-changing situations you want to be able to present well. And the confidence to present well comes from one thing. That is preparation, preparation, and some more preparation. The next meeting, the next interview, could transform your life. Why risk losing that opportunity by not thinking about the impression you make?
First of all, I always say don’t take any risks with your personal presentation. People seem to think this is a rather old school approach. I actually disagree. If you look good, if you are smart, you immediately come across well. There is nothing to distract.
For an interview or an important meeting, I suggest a short checklist. Go through every aspect. Think about your clothes, hair, fingernails and shoes. What briefcase or bag are you going to take? It’s all in the detail.
Make sure you are in tune with the people you are going to see. If it’s a job at Google or Virgin you probably don’t want the pin-stripes. If you are visiting the bank, a smart suit is always the best bet.
Do the basics well. Give the person you are meeting a good, straight handshake. Make sure it’s not too bone-creaking, limp or sweaty! Make eye contact. Sit up. Sometimes people get over-concerned about the business plan or the job spec and forget the simple niceties.
Look for a way of connecting with them on a personal level. There might be a picture on their desk you can talk about. Maybe it’s a photo of them finishing a ten-kilometre run. Ask them how it went. Perhaps there’s an award for Employee of the Month on the wall. Again ask them what they did that caught the company’s attention.
Try something a little bit left-field. Imagine I am a bank manager. You’ve come along to see me and pitch me a proposal. ‘Oh, by the way, James,’ you say. ‘It’s ten o’clock. I wasn’t sure if you’d had breakfast so I’ve brought a brownie along for you.’ Somebody actually did that to me once, and I was quite impressed. And I ate the brownie!
Something so basic changes the dynamic. It breaks the ice, and relaxes the atmosphere. You will shine more strongly when you are less tense. If you have done your research you will be confident in the conversation. You don’t want to dazzle the other person with knowledge. You want to have the knowledge at your fingertips, ready for when you need it.
I always find it helps to get in with an early question. If it’s a job interview, ask what they think the key elements of the job are. That will tell you what they want you to tell them. Focus on those areas. Provide them with details on how you can help them improve those aspects.
During the interview, ask the interviewer as many questions as they are asking you. Any meeting is a two-way exchange of information. It’s not about you sitting there being grilled. You also have the right to ask. The more you ask, the more information you can glean from which to answer their questions. If I have ever left a meeting and I have felt I haven’t performed well, it’s generally because it was a one-way meeting.
It’s like going on a date. If at the end of the evening you’ve said nothing, you pretty well know they’re not going to call you back. But if when you get home it feels like you said as much as she or he did, it’s a lot more promising.
If you are feeling nervous, remember that everybody does. Don’t worry too much about hiding any nerves. They can actually show just how much you really want the job or the loan. Being arrogant is not usually a plus point. Some gentle humour goes down well. On the other hand, don’t turn up thinking you’re the next Michael McIntyre. It’s all about balance.
In the same way, if you do get fazed, take some time out. I once went to an important meeting that I thought was going to be one on one. When I walked into the room I found there was a whole panel waiting for me. It wasn’t at all what I had been expecting and it certainly wasn’t what I had been preparing for.
Rather than blundering on and getting flustered, I simply asked if I could visit the bathroom. Of course, they said. I used those few minutes to re-group and re-think my approach. When I walked back in I knew exactly what to expect and was ready to go.
I have another little trick I like to use after an interview or a meeting. As you get walked back to reception, ask, ‘What’s your gut feeling?’ It’s a beautiful, open
-ended question. Because the formal meeting’s over, you’ll usually get an honest and useful answer.
They might say, ‘You look like you’d fit in, but I’m not sure you’ve done enough direct work with clients.’ That’s something you can deal with immediately in a thank-you e-mail. A short thank-you note is always a good piece of follow-up. It’s good manners, and reflects well on you. That’s all part of good presentation.
Presenting: the JC approach
Plan ahead. Don’t run around in a panic ten minutes before you set out. Do plenty of research so you are confident in your answers.
If at any point you feel you are not in control, take some time out. That will give you a chance to re-focus and get things back on track.
Go in and play your full part in the conversation. Ask questions early and throughout. Make it a proper dialogue.
Remember to get feedback with that simple ‘What’s your gut feeling?’ question.
Great presentation comes from even greater preparation.
8
Relationships Matter
Working with other people
My father passed on so many great pieces of advice to me. That in itself was a lesson, of course. The information you need to change your life is already out there, in other people’s heads.
He was the one who taught me that successful business is not about good deals, but good relationships. My father was quite a philosophical person. Business, he told me, is about developing a relationship where you want to do business with that person again.
He showed me that it was really important in any deal to create a win-win position. Both people should come away feeling they have gained something. There are few things anyone has ever told me that have had more impact on me.
My father’s view was that even if you came out on top, you should make the other person feel as if they had won. The way he put it was, ‘Don’t squeeze the last drop from the lemon.’ That’s a fantastic phrase, and so true.