Category Archives: Business Partners

To grow a business employ a “great one”.

Whenever I hear advice from successful entrepreneurs the most consistent mantra is “always hire the best people you can afford”.

But how good is “the best”, how do you measure that? Also, if you are in a young company, with very limited resources, how much can you really afford?

Let’s step back for a moment though and examine that advice. Is it really the most important thing that a growing business should do? What about offices, buying equipment and developing the product or service, then there’s marketing, the best product is going nowhere unless people know that it exists.

The answer may be that if you have good people aboard, they will help you get the operating essentials cheaper, faster, and of better quality. When you look at product design the difference between good and average has even more staggering claims.

Mark Zuckerberg, of Facebook, suggests that some programmers and programming teams are 100 times more productive than their more typically talented peers.

This isn’t because they can programme 100 times the number of lines of code, but because they write smarter code. These truly great programmers grasp what is needed quickly and transform that into efficient, supportable, clever instructions that enhance the original concept.

What does this mean for the non IT side of businesses? Well the theory is still valid, if the multiplication factor may be less. Consider the likely results of an inspirational, highly respected and well networked senior figure in any sector of business, such as marketing, PR, raising finance, compared to an industrious but junior practitioner.

Can you measure the impact of the great person against the average worker? The difference may be that you get funding, or not. That you become well known, or not. What is the measure and worth of these?

I think we can all accept that the great person is going to do more for your company than an average worker, the question is what do you give up to be able to afford them?

Do you take out loans, sell your house or divert funds from infrastructure to hire a great employee?

It’s a balancing act, between all the calls upon your limited cash. The advice that successful entrepreneurs have given implies that you do all you can to get these few great people.

If the immensely talented ones can ramp up your business fast, then you can start to readjust the balance so that other areas have cash made available.

It is natural though to hope that even by using a less expensive resource you will still manage to make the break through. The lessons from very successful businesses however seem to speak against that.

 

Will small businesses ever get a slice of government spending?

Government helping small businessA few days ago the office of the Prime Minister sent a letter to many small businesses and SME organisations explaining that a new online tool called Contracts Finder has been launched that will show all government tender opportunities.

At the same time he said they would eliminate the prequalification questionnaire (PQQ) for low value orders and standardise it so it was filled in just once for all other procurements.

Additionally there would be “Dragons Den” type surgeries where people with innovative products and services will be able to come and pitch to government – rather than waiting for the right tender to be issued.

All good news generally. For years the conditions set by procurements have excluded, or been unfairly weighed against smaller businesses applying for tenders. The cost of doing so is also proportionally higher for a small company than a large one.

Some people have commented that they are worried that eliminating the PQQ will create a “free for all” and that companies that stood no chance would waste their time bidding.

Well in an open market that can happen, but if in fact getting rid of the PQQ doesn’t change at all the size of company winning a tender, what was the point? There probably is still a culture in government procurement that only larger companies should win and just getting rid of prequalifying is not enough, attitudes must also change. I’ll wait and see on this one.

However, the Contracts Finder could be very good news indeed. There are some government tender sites out there (a couple charge for their use), but having one simple and easy to use central site for all tenders is a godsend. Much saving of time and hopefully it will make sure we don’t miss any relevant opportunities ever again.

Now on to the “Dragons Den” surgeries. They are not quite as the description implies, because you are not pitching for investment or funds, but for the chance to sell your innovative product or service.

The surgeries are going to be managed by Stephen Allott as a new Crown Commercial Representative (CCR) for SMEs. You will pitch to “a panel of senior procurement and operational professionals from central government and the wider public sector”.

I like this idea a lot, but the proof will be how many get taken up and what hoops they will have to jump through.

In the early days of Company Partners I approached a government figure to offer our business partner matching service to assist people who wanted to start a business. You would think that encouraging new start-ups by finding them a like minded partner to start up with was an obvious benefit to the economy.

The feedback was positive, but I would have to talk to the regional development agency, they in turn insisted I talk to a local Business Link and so it died. They also wanted me to trial it locally for 2 years and if it was successful they would put it out to tender.

Herein lays a problem. If at one of these surgeries, a young company puts forward an innovative idea for a service, will the government support them and place an order, or will there be endless jumping through hoops, or worse (in order of course to be fair and impartial) they put the service suggested up to open tender, effectively stealing the small company’s idea and giving it to someone else?

There is optimism for the general direction that the government is going on this, but let’s see if it actually produces a change.

 

Who needs a business partner?

Spot Bill GatesThere’s a common misconception of the typical entrepreneur being a charismatic individual business person, not needing or wanting a partner’s help in driving forward his all conquering venture.

Think Richard Branson, Bill Gates, or the latest film idol, Mark Zuckerberg of Facebook fame.

Yes they were the front men and there’s no doubt that they steered the ship, but each started their businesses with partners that had complimentary skills.

Branson always had a partner for each business he began. In the earliest years it was Jonny Gems (Student magazine), then Nik Powell (Student magazine and Virgin) adding Simon Draper (Virgin) for his music knowledge. These were share holding partners, not employees, although Branson certainly surrounded himself with a very capable workforce.

Bill Gates and Paul Allen started Microsoft together, while Zuckerberg’s Facebook was founded with his original partner Eduardo Saverin (now the subject of a film – The Social Network).

There must be exceptions, anyone aware of one; I’d be interested to know? As far as I can find out, almost every successful company had a partner helping it to grow.

Why? Well, it is almost impossible for one person to have all the capabilities and characteristics needed to develop a business. One may have the technical skills, the other the sales or business knowledge.

Between them they start to handle the PR and soon it’s clear that one is more comfortable in that environment and they agree that he will act as the front man.

Taking on the world yourself, with no one to bounce ideas off and to give mutual motivation is quite daunting. A strong team of employees will help fill out any skills or experience that the business needs and a mentor can be very helpful in acting as a sounding board, but there’s nothing as good as having a partner with the same skin and commitment in the game as you.

Of course choosing a partner must be done with open eyes and it is absolutely important to get the right legal and partnership agreements in place. See my guide to healthy partnerships: Business Partnerships .

It was to provide a “dating site” for people to find business partners that we started Company Partners, so I guess I am a bit prejudiced in favour of not going it alone. But it’s a hard old world by yourself.