My mate Max is a registered liquidator – but don’t stop reading there….. The nature of small business, Max says, is that they “fight the bush fire” every day.  “So I always say to them: what happens when the rubber band runs out? The key to your business growth is working ON your business rather than simply in it.”  The businesses that come to Max(voluntarily or otherwise) have usually ignored four important considerations:

Ask for help

“It can be a lonely world for small business owners,” says Max. “While there’s lots of help available for start-ups, once they are under way the owners tend to seek less help.  They’re wary of giving the impression they can’t manage, especially if they’ve mortgaged the family home to get the working capital. And when you suggest that they need professional advisors or mentors, they say they can’t afford it, when in reality they can’t afford to do without it.”

Be organised

Right from the start, Max says, get some software that is easy to operate, because you need a decent set of monthly figures.  You need to be able to see realistically how you are doing, whether it’s your cash position or the number of returns.  Another essential is well-organised administrative processes and systems.  As Max says, “Not only will this make your business run better now but it will simplify the due diligence process when you’re ready to sell.”

Cash is king

Follow the money, says Max. Part of the culture of small business, he warns, is to “borrow” from their VAT or tax obligations during hard times or between tax payments and think that they can catch up later.  It’s a dangerous strategy, he counsels, as is simply assuming that a burgeoning customer list means you are doing well.  “Look at your bad payers,” he advises, “they’re costing you money.  Why would you subsidise them?”

The other real risk for small companies is working for much larger corporations whose “standard” payment terms can be simply untenable for a small operation.  While the contracts with larger firms may be key to helping you grow, the hit to your cash flow can tip you over the edge.  You need a balanced portfolio of clients where you can manage the cash flow so that it flows rather than hiccups….

The old saw of “failing to plan is planning to fail”

Max says it may be a cliche hence often dismissed by small business owners who rely on ‘something will turn up’, but undoubtedly the vast majority of companies seeking Max’s help to reconstruct or, sadly, to liquidate their business have not planned properly.  Or they may have had a great start-up plan but don’t adapt it to years two and three and become complacent.  Max says that in his experience many more businesses fail when they try to expand – not at the start-up stage where many are expected to have difficulties and therefore receive – and seek – more support.  “The worst thing for a start-up,” Max says, “can be a great first year.”  Slow but steady frowth is often a better motivator to keep the business owner on track with a plan and in touch with key advisers.

Max explains that by helping companies view their business objectively they can identify the true weak points of the operation.  “I’ve had people come and ask me to sell their business,” he says, “when really all they want is some fresh thinking.  Once we do the analysis and show them what happens when you start to improve sales, profitability and increase the value per order, we often find the request to sell goes away.  They enjoy their business again, can see the potential and want to stick with it after all they have put in.”

John Paul Getty famously said, “Formula for success: rise early, work hard, strike oil.”  It doesn’t happen that way for everyone.  Business reconstruction techniques can be the key to ensuring you never get to hear what my mate Max knows about liquidation.

So this successful businesswoman dies and goes to heaven.  Welcoming her, St Peter says, “No senior executive has ever made it this far before, so take a day in heaven and a day in hell and make up your own mind.”

Heaven is wonderful: harps playing, fluffy clouds, romantic songs, contentment.  Next day, she takes the lift down to hell.  The doors open onto the lobby of a beautifully-appointed hotel, with every luxury imaginable.  Surrounded by old friends, she enjoys a champagne dinner and dances with the devil, who turns out to be a real fun guy.  Afterwards, she heads back to St Peter.

“So?’ he asks, “which is it to be?”

‘I’m amazed,” she replies, “but it has to be hell.”

When she goes back down, the lift doors slam behind her and she is standing in a desolate wasteland, surrounded by scorched earth; her friends dressed in rags and wailing in doorways.

‘What’s happened?’ she cries.

The devil smiles.  “Yesterday we were recruiting you,” he says, “today, you’re staff.”

First impressions count…

Alison, 24, is a Customer Services executive with a small retail company.  Her first job was with a larger corporation and her disastrous start there is a textbook example of how not to welcome new employees.

“I hated it,” says Alison. “By day three I left.”  What did the company do to cause that?  “It’s what they didn’t do,” she explains.  “The department manager asked someone from HR to show me the ropes but she went off sick, just leaving a list of people to meet.  No-one even showed me around.  I knew they were looking for resourceful people, but psychic I’m not!”

Alison found the large building daunting: “Every floor looked the same – rows of cubby-holes separated by high screens.  People were meant to put nameplates outside their area but usually it was on their desk and you were practically sitting on their lap by the time you got close enough to read who they were.  Most people were too busy to talk to me.  I ended up just waiting while they were on the phone or the computer.  I went home in tears the first two days, and I’m not a wimp.  I just felt lost – in all senses of the word.”

The last straw came when Alison was sent for her medical and couldn’t find the Doctor’s office: “Turns out it was in Building B, but they left that part off the note.  The next morning there was a fire drill but after it, I didn’t go back in – I went back to the recruitment agency.”

Alison learned from that experience.  In her current job she takes special responsibility for new joiners, ensuring that they are given a proper introduction to the company when they arrive.  “We give them a chart showing the layout of the building and make sure we show them all the important places first, like toilets and coffee rooms..”

A good induction programme will start at the point of offer acceptance with comprehensive joining instructions and information such as company profiles, annual reports, corporate videos and organisation charts showing how departments inter-relate.  The first few days should include introductions to all the key people and departments and plenty of opportunity for question-and-answer sessions.

Many companies use mentoring: assigning one person to a new joiner to be a constant point of reference during their induction period.  If you ever mentor a new starter, remember how you felt on your first day.  Think about what someone unfamiliar with the building layout needs to know.  Walk them around.  Reassure them that it’s no problem to ask a few times if they forget people’s names or where things are.

“Induction needs to be structured carefully, bearing in mind that we only take in so much new information at any time,” says Dr Lesley Morris, an occupational psychologist.  She says the best approach a company can take is to treat employees as customers.  “All companies want their customers to feel valued – that’s the key to generating the all-important repeat business.  There’s no difference with your employee base.  It’s your most valuable asset and needs to be nurtured from the start.  The same energy you put into PR and pre-sales activities needs to go into employee orientation.”

Dr Morris sounds a cautionary note to employers: “You spend a lot of money on recruitment to ensure you are attracting the right people into your organisation.  From the day they start, you have to show them that they also made the right choice when they accepted your offer.”

Alison agrees.  “We all have the same insecurities when we start something new,” she says, “no matter how far we have progressed.  That’s why induction programmes are so important for all new employees, no matter how senior they are.  Your industry may be familiar to them, but your company and its environment won’t be.  We all have that first day.”

As cute catchphrases go, ‘lifelong learning’ doesn’t quite cut it.  Perhaps it’s the unfortunate association of ‘lifelong’ with ‘learning’ – evoking memories of self-indulgent professors whose  lectures seemed to go on forever, or of being kept back at school to complete an assignment that was so boring it seemed kinder to leave it unfinished.

Lifelong learning is, however, a hot topic.  So, if it isn’t a never-ending stint in the classroom, what is it and what does it mean for you and your business?

Lifelong learning recognises that the nature of work is changing faster than ever before, and that organisations and employees need help in adapting to a business environment where traditional jobs are disappearing or changing all the time in response to new technologies.  Regardless of the size of your business, you and your employees must continually enhance your skills or be left behind.  For the first time in history, learning throughout one’s life is truly necessary for economic survival.

As work practices change, if companies are to succeed they need flexible, motivated employees willing to update their skills and acquire new ones.  It’s about new ways of doing business and the part you can play.  Directors set the agenda with business plans, corporate and individual objectives; a lifelong learning programme supports and facilitates the employee development that is key to achieving those objectives.

Lifelong learning is a combination of formal training, on-the-job coaching, a willingness to share your knowledge with people and for them to share their knowledge with you.  It’s a realisation that learning and work are intrinsically linked.  It recognises that the concept of job-for-life is probably older than Downton Abbey’s Dowager Countess and less resilient …

The ‘new’ workplace puts responsibility for career development back to each individual. Gone are the days of employees being spoon-fed. Today, it’s about taking initiative and recognising that change is the norm and it isn’t going to go away.  As an ancient Chinese proverb says, “Teachers open the door.  You enter by yourself.”

New working practices and technologies challenge and frequently overturn traditional notions of business management and relationships. It can be difficult for some people to accept this – after all, training employees to move to a new job is not part of the traditional management skill-set. Today, the emphasis is on managers being good coaches and facilitators, able to recognise and bring out the potential of their people. For smaller businesses in particular, the aim should be to respond to change using the enhanced skills of their own people, rather than having to recruit.

Emerging technologies, while prompting radical shifts in the nature of business, also underpin and promote lifelong learning. The Internet is creating a single global market; ‘e-learning’ can create a single global classroom, where employees can collaborate with colleagues all over the world.  Like so much else it touches, the Internet has changed forever the way people participate in the learning process.

A lifelong learning programme gives a genuine alternative motivator for employees other than remuneration.  As such, it’s a powerful component of your employee engagement portfolio.  Investment in your people is not simply trading your money for enhanced skills – it’s forming relationships over time and continuously encouraging development.

Where change is a constant, people with the capacity to adapt and recreate themselves – time and again if necessary – will be the most successful. Business owners, in return, need to continue to provide challenging work in an environment where our people can develop and grow.  Lifelong learning is a way of life.

Consider this:

• The British economy is increasingly knowledge-based.
• Traditional jobs are disappearing or changing with the introduction of new technologies.
• Flatter business structures and an emphasis on teamwork and multi-skilling demand new skills, increased mobility and ‘global’ attitudes.
• More and more jobs are being created in the services sector.
• In the 1950s, radical business change took place every 3-4 years; by the 1970s it was once a year, in the 1980s every six months and in the 90s: quarterly.
• The Internet and ‘e-learning’ online methodologies are driving radical changes in corporate training and development programs.
• To succeed and prosper, the employees of the future need to be prepared to ‘recreate themselves’ continuously, updating their skills and acquiring new ones

Are you ready? 

Or are you more likely to agree with a recent survey on training, which indicated a major obstacle to learning is that lots of people simply prefer to do something else?  43% of respondents expressed this view, while 26% claimed no interest in any kind of learning.