All that glitters….
Keep Up won’t you? I learned a new Brit word yesterday. Yes, regrettably I’m still in the sad land of fleeces and dodgy haircuts. The word I learned was ‘institutionalised’.
I was at the home of my hopeless and hapless agent, the inept, fashion disaster, Tony Robinson OBE. I was helping his wife, two sons and daughter to choose a surprise present for his birthday. We were poring over glossy brochures and discussing the prices of a care home to put him in, when he burst through the door. ‘I know what you’re up to and I don’t want to be institutionalised’ he pleaded.
A Constant Threat
Naturally, we ignored him but it did start me thinking about the threat to survival and growth of a small business posed by the big institutions. Learning how to avoid or, at least, minimise this threat isn’t something that is taught in business start up programmes or for prospective entrepreneurs in college or university.
In fact small and micro business owners are expected to doff their hat to the advice, support and leadership of the institutions – the bigger the better. Readers of my best selling book on enterprise, Stripping for Freedom, will know that this would be a big mistake.
Government bodies, large corporates, institutes and trade associations are at the top of the supply chain but it is a myth that they are the instigators of social and economic well being, best business practice, enterprise essential products and services and are the clients and customers that small business owners should die for. This isn’t Harry Potter.
Death by Institutions
Yes, I Know. I’m dressed by them, undressed by them, wined and dined with them, first class travelled with them and I dip my beautiful designer toes in the Med from their rather fab yachts – but I’m not taken in by them – after all most are men! They can kill your business usually by one of three methods:
1. Late payment (80 days is the average for large organisations to pay micro business bills or no payment (finding reasons why the products or services you’ve supplied are unsatisfactory).
2. Wasting your time and money by you; buying their (inappropriate or rip off) products and services; trying to meet their product and service requests (meetings, bloody meetings); getting lost in their bureaucracy, processes and rules;and by following their advice or training (they think they know about enterprise but they don’t).
3. Getting a slice of or stealing your business. If you’re a supplier then they’ll copy your product or service and either do it in house or give it to someone else to provide cheaper or (particularly if government) free. If they’re an investor the time you need their support they’ll pull the rug from under your feet.
There’s nothing personal. The person you’re dealing with in the institution wants to maximise their personal wealth (salary and benefits package). This can only be done by doing what the institution (the Executive Directors) wants not what voters, users, members, shareholders, customers and suppliers might want. They get away with it because micro businesses cannot afford to take legal action against these big institutions.
Forearmed is forewarned
Repeat after me; ‘Leonora is not saying that I can only trade with small and medium businesses. I don’t have to starve even though very slim is very good’. Of course you can’t afford to turn down business from the big institutions, including government bodies and the big corporates. So:
1. Find out all you can from other business owners that have worked with a particular organisation (the Enterprise Rockers movement is a free to join global, self help community of micro business owners).
2. Don’t allow your business to be mostly dependant on their custom.
3. Do negotiate terms, particularly try for some upfront payments or deposits – cash-flow is everything to you.
4. Record and store everything – every request, meeting call, text and e-mail. Stay in regular touch and keep reminding them in writing what is yours and what is theirs (including intellectual property).
5. Aim for win/win from every transaction – what will make the institutionalised person you’re dealing with look good back in the institution and will leave you with a profitable, positive cash flow and sustainable business.
Oh and purleese it is time you lost a few lbs/kilos and don’t wear a fleece – ever! I know an institution that could help you.
