How to know when not to listen

Tell others that you want to start your own business.

Don’t be surprised when more people than you thought advise against such action.

Regardless of the state of the economy, there is little doubt that the UK (and most, if not all other western societies) has become more risk averse over the past decade or three. Tightening health and safety regulations, irrational worries over litigation arising from supposed ‘mistakes’ and the general blame culture are key causes.

But feeding into this sad soup of reasoning is the fact we all have far greater access to instant information. And such is the competition for our attention that articles have tended to become more sensationalist. As a consequence, there are far more ‘experts’ in the world who possess a little knowledge on a wide range of headline subjects – one of them of course is setting up in business and the associated risks.

So when people wish to offer you advice about the problems and pitfalls of going it alone, check out their credentials and clarify the extent of their knowledge and the root of their wisdom. There’s no need to be rude or aggressive, but simply ask them about their experience of self employment or working with people like yourself and how they are able to gauge the risks involved.

It was the same with hitchhiking. There are not that many people with first-hand experience of thumbing lifts, yet the skewed advice I received on the subject combined with the sincere belief that the risks certainly outweighed the rewards was stunning. In the end I learnt to switch off to the uninformed pessimist – or try and convert them to my way of thinking.

Having said all that, when you do meet people who have first-hand experience of being their own boss, take all the advice you can get. If they are seeking to steer you on a path away from self employment it is worth listening to their thinking – so question and clarify the points being made so that you fully understand the guidance available. Even though you might not agree with what is being said, the advice is likely to be very valuable.

Ultimately, the decision about going it alone will probably be yours alone. It is the first of many decisions that will be made but if you can sort the wheat from the chaff early (in terms of the people whose judgement and advice you seek and trust) you are far more likely to be confident about the direction you are headed.

Key Learning Points: Whilst people might mean well, judge carefully who you listen to when seeking advice about self employment. Always counsel people who have personal experience of setting up and running their own business.

Understand your need to achieve

Man meets eternalLeeds station, 11.35pm. It’s a dark, cold November evening. The last train to York departed 5 minutes before my train from Huddersfield arrived. But for the night-time usuals I’m on my own, frustrated and penniless. What next?

Impatience is a failing of mine. I can’t hang around and wait for things to happen. Built within me is an innate desire to get on and do things. And if like me you recognise the strong need to ‘achieve’ in yourself, then it’s quite possible you possess a powerful entrepreneurial streak within. But how do you really know?

Back in 1993 I attended a week-long sales training course where Frank Atkinson (the trainer who modelled buyer behaviour) talked about the deeper personal ‘needs’ we all possess. He summarised them into 6 key areas and we completed a test to establish which of our needs were most dominant. The 6 needs included:

Power; Achievement; Order; Safety; Recognition; and Affiliation

My score for ‘Achievement’ was the highest in the room and it was on that day I began to fit together the pieces of my behaviour into a model that made sense. In other words, I started to understand who I was and more importantly why I did things the way I did.

Further exploration into my personality showed I spend much of my time thinking about the future. I am driven by targets and reaching goals I set; this gives me a sense of purpose and identity. For more on the psychology of achievement and success, you’ll find a lot of research and thinking published by Brian Tracy. Brian certainly knows how to sell himself and his products, but from reading other peoples’ comments about his material, it’s good stuff.

For the record, my ‘Affiliation’ score in the needs test was extremely low; in other words, I don’t really seek reassurance or follow the herd when making decisions, nor really cherish being part of a team. And I discovered ‘Safety’ and ‘Order’ needs were not high priorities for me either.

Desire to do something

If you sense your need to achieve burns away (whether it’s learning a musical instrument, doing well in exams, getting fit etc.) then this side of your personality is going to help you should you start your own business. Entrepreneurs have to be hungry to succeed and impatience, whilst also being a weakness, is a vital energy source. It drives you.

That cold winter’s evening, the walk to the edge of Leeds on the A64 was a good 3 miles. I didn’t fancy hanging around the city centre and the idea of waiting over six hours for the first train of the next day was a non-starter. So off I went.

Aware of the risks and slightly nervous I spent 20 minutes hitching in the dark before the first car picked me up. I don’t remember anything about the journey apart from the fact the driver dropped me at the A1/A64 junction where it was pitch black and very little traffic going my way. It was 1.30am. Home was still 12 miles away.

Clarity of solitude

In the still darkness I felt vulnerable, uncertain but also curious about the new experience. After only a few minutes I came to like being out of my comfort zone yet still in control of my destiny. I discovered the freedom of the space because I was alone with myself. In a world dominated by mobile connectivity, people experience the wonder of such solitude less and less these days for fear of being disconnected. We have inadvertently become trapped by the very  technology which ironically was designed to release us and present new opportunities.

Guided only by the lights of the passing traffic a large vehicle eventually pulled off the A1 and rounded the bend towards me. In the gloom he would have seen the lonely figure late, but in those few seconds everything changed.

The brakes hissed, the engine screeched and the lorry ground to a halt by my side. Elated, I climbed into the cab, quickly judged the situation to be safe and said I was heading to York. Happy to give me a lift, the friendly driver drove off. In no time, all was good with the world and success was within my grasp.

Travelling the empty road, I discovered my new companion was destined for an early morning livestock market near Whitby. He was working all hours but loved his job – his own new business. The world had contrived to bring our lives together but in completely different ways the two of us were focused on and driven to make things happen for ourselves; we weren’t waiting for others to give us a lead to follow. Bizarrely, behind us in that lorry were 80 sheep.

Half an hour later, the wagon stopped right outside my student digs in the centre of York. The driver insisted on going out of his way to get me home safely. We shook hands and smiled knowing it was extremely unlikely we would never meet again.

It was 2.10am. In less than 6 hours I would be presenting an assessed piece of work in front of the whole lecture group. I didn’t mind, in fact in a strange way the experience had energised me. I loved the feeling of achieving something I had never done before.

Key Learning Points. The need to ‘Achieve’ creates impatience and drive. It helps to make the entrepreneurial mind ‘hungry’. Analyse your own deeper personal needs to better understand what motivates you to do things. Achievement makes us feel good.

Beware the devil of self-importance

As I climbed the tank crane’s 10 foot ladder to access the driver’s cab I knew this wasn’t going to be a typical hitchhiking experience.

The day was warm and I was heading to the south coast via Oxfordshire. Time was on my side, I had the the freedom of the road and all was good with the world. And then this monster truck growled to a halt.

“It’s the biggest vehicle on the road” said the army uniformed driver proudly, his hands spread across the steering wheel much like an angler showing off his catch. Sitting in my 15 foot high perch I listened intently as he carefully described the vehicle’s weight, length, defence systems and general wonder-powers  - whilst simultaneously crunching through the gazillion gears.

The enormous windscreen gave me a panoramic view from the cab. And my elevated status meant I could see everything and everybody could see me. Indeed, as we drove along I began to enjoy the attention we received from drivers and passers by. Popularity felt cool and I quickly forgot about being the humble hitchhiker.

But as the transporter arrived at a long incline on the outskirts of the town of Banbury, so my fortunes changed. Being titanic in tonnage, the vehicle struggled to get much above 5mph and thus crawled laboriously up the hill. Then half way up the driver caught site of two attractive women walking along the pavement towards the vehicle.

All hell let loose.

Sirens screamed, lights shone, horns bellowed and the driver whooped from his open window. Other passers-by (there were quite a few) must have thought our vehicle was on heat. But of course no one could tell that it was only the driver and not me who had seemingly swallowed a bucket-load of Viagra that morning.

I felt a right idiot (in full view in my elevated perch) as the two women and then others returned ‘fire’. The driver seemed to enjoy the abusive attention; I just wanted to be anywhere but in the spotlight. I’ve never forgotten the embarrassment and the fact that I immediately realised being on show is a double-edged sword.

The same trap lurks for the entrepreneur…

Self importance

There is no doubt that when you experience business success, you feel good about yourself, and want more of the same. People close to you are also much more likely to congratulate rather than question your achievements. However, unchecked, in relatively little time it’s easy to have a skewed view of who you are and what your achievements really mean – especially if events are played out in a public spotlight.

The entrepreneur whose sense of self-importance gets out of hand is in danger of becoming a poor judge of people, situations and perhaps more importantly, their own business. As a consequence, egotistical self interest can take over and/or mask thinking. When wrong issues are prioritised success can quickly lead to financial failure and ‘friends’ melt away.

In contrast, if you are prepared to show and share your vulnerable side, people are naturally drawn towards you. But as a race we are inclined to suppress our vulnerabilities even though ironically, such traits make us more attractive to others.

Not mincing words

The hilarious and direct Encyclopedia Dramatica refers to the theory of ‘unwarranted self importance’ by saying “(It) is a disease that gives you the feeling that you are actually worth something despite not having made any contributions to anything at all, or actually making the world a much s******r place, thus making yourself look like a complete douche.”

A little strong perhaps but when peoples’ self-perception is clearly over-rated or at odds with reality, a quick cut down to size may be the only appropriate medicine.

Occasionally, I have offered insight to a jumped-up few who do little for the image of the hard-working, value-driven entrepreneur. Expensive suits, a throwing hand for cheap, shiny business cards and a motor mouth unite people whose behaviour indicates that they are above others. You may be thinking I’ve described the gaggle who all seek fame and fortune on The Apprentice. I must write about that.

For me, even though I was only hitchhiking, I was fortunate enough to be quickly brought down to earth by events and learnt an important lesson. Public humiliation, whether it is a small crowd or the media spotlight, is a powerful and lasting force.

Key Learning Points: Entrepreneurs naturally seek new business opportunities and publicity. When success arrives, keep your feet on the ground and remind yourself not to be carried away by the hype & emotional highs. True friends will always respect you.

How to plan and achieve sales effectively

In the early nineties I employed a sales guy on a short-term 10 week contract. I gave him a sales target of £10k and suggested we meet each Friday to review progress.

Expecting great things, Steve got stuck into work but at the end of week 1 reported zero sales. I was somewhat disappointed but accepted he was still ‘learning the ropes’. Promising improvement, Steve worked solidly throughout week 2 only to report a total sales figure of £250 the following Friday.

In my mind I had expected £1k a week, so he was now nearly £2k behind target. I was less diplomatic with Steve and told him that things had to improve in week 3 since his fees were costing me dear.

We never got to the third Friday. Steve resigned on the Wednesday complaining the targets were impossible and I wasn’t providing enough support.

What went wrong?

The project was a complete failure but the experience provided huge learning value.  Whilst I should have given Steve more guidance and help, the real problem was actually the way the targets were being set and measured.

Linking targets with time is the wrong thing to do because sales rarely ever flow in a consistent manner. It’s like the hitchhiker trying to achieve a set distance each hour. It’s completely pointless because the opportunity to travel is heavily dependent on other key issues such as route choice and the volume of passing traffic.

To plan sales effectively, sales targets need to be linked to ‘sales activity’ and what are called ‘key ratios’. By doing this it’s possible to be much more scientific and thus confident about eventual sales outcomes. To help you learn faster ( and without the pain I experienced reference this article and/or follow the example explaining key ratios below.

Jane Johnson’s online specialist furniture

Jane sells specialist furniture from her website. She sets herself a new business sales target of £100,000 for the year. She knows that the average sales value of her product is £1,000. As such, she needs to make 100 sales to hit her target.

After a bit of analysis Jane calculates that for every three new inquiries she receives, she sells one item. She also works out that to generate one inquiry she must send 5 emails or letters to qualified prospects. And Jane knows that her qualified prospects materialise from bought lists. Further analysis reveals that emailing 100 people from these lists generates 10 qualified prospect returns.

Jane writes down this information to see how much work has to be done to achieve her sales target:

100 sales are needed at an average value of £1,000

1 sale from 3 inquiries                                                            1:3

1 inquiry from 10 qualified prospects                                  1:5

1 qualified prospect from 20 unqualified prospects          1:10

Based on this information and resultant key ratios, Jane quickly establishes that for every 150 people she contacts she will make one sale. Therefore, as long as she contacts 15,000 people over 12 months, she will hit the target.

By doing a bit of maths, Jane knows that she has to contact 1,250 people a month in order to reach her goal. Confident in her own ability and strategy, Jane sets to work. Her first task is to source and purchase on-line databases that reflect her target audience; then she has to construct succinct emails and ensure 1,250 people are targeted each month with a well constructed message.

As long as Jane remains disciplined with her work and learns and adapts as she progresses, she has a far better chance of achieving her targets compared to Steve.

Key Learning Points: Wherever possible, set your own sales targets based on buyer behaviour data. Link targets to sales activity (key ratios) rather than time, because you have greater control over the outcome and much more confidence in the process.