Category "Consulting"

At Alpaca we are having lots of conversations with our clients about their business and their need to change as a result of the pandemic. These changes can be big or small but the question we keep coming back to is ‘have you explored everything, before deciding this is the plan you are going to implement?’

I can hear you ask, ‘Well how would I know I have explored everything?’ ‘Would I know if I have missed something?’ It’s not easy and particularly when you may feel rushed into making a decision or you don’t know what the future holds, so I’m going to share one of my favourite* analogies with you.

Changing your business is like baking a cake and with the end of this seasons GBBO in sight what better analogy to use!

Before we begin

You have made it to the tent, congratulations. This means you must have an intention to bake (change your organisation) but do you have a good idea of what you are going to make?

Do you know what cake you are baking? Is it a Victoria sandwich? Perhaps you fancy trying beetroot and chocolate as a combination; is that a genius innovation or a nasty surprise when it comes out of the oven? Are there people around you who can advise you?

Do you have a recipe? Where has the recipe come from? Is the recipe written down so you can follow it and if necessary, anyone else can follow it for you, or is it scribbled on a tatty piece of paper that you keep in the bottom of your drawer?

Do you have all the Ingredients you need? Have you considered dietary requirements? This might be the same cake you always bake but now you have gluten intolerance to deal with. Are there some ingredients that have passed their sell by date and are no longer suitable for using in the cake?

Do you have the time to make this cake? It’s no good trying to deliver a ‘showstopper’ cake that takes 8 hours to create when you only have 4 hours in which to deliver it.

And finally, before you even start the bake, do you have the right equipment; bowls, mixers, weighting scales, measuring spoons, pans, trays, oven capacity?

In business terms this all equates to what is your business and what is it doing now; what does this look like in terms of your finances, people, processes, systems; where is your plan and is it written down in a way that is clear and everyone can understand what the plan is.

Is your organisation ready for the change, will they adapt, can they envisage what is coming in order to help you or are they lost until the change is finished in which case the plan may go awry?

Have you looked around to see if anyone is doing something similar, can you learn from them?

Can you make this change within the time required with the resources and expertise you have, or do you need external support?

Is the ‘equipment’ currently within your business enough to deliver your plan, do you know what investment is available to you and where you can access it?

And Bake!

Are you all set, do you know which order you need to work to create your masterpiece? Did you need to do any preparation before hand such as butter out of the fridge to soften or get the oven on before you do anything else? Do you need to re-read your recipe before you start?

What if it’s the ‘technical challenge’, you’ve never made this cake before and you only have a basic recipe perhaps you could have a look around and see what others in the tent are doing and if it looks sensible, copy it. However, if this is your recipe and you are comfortable with it don’t be put off just because Bob behind you is doing something different. It’s ok to know what you are doing and crack on with it!

You have a disaster! You used salt instead of sugar in your cake mixture. Damn those kilner jars that all look alike when you are under pressure. Stop, take a breath, take stock, can you save this, or do you need to start again? What can you adjust in the recipe to make sure you have something to present to the judges?

Getting back to applying this in your business. Do you have the skills and experience to undertake and sustain this change; do your team have the required skills and experience to cope with the change; would you benefit from running a pilot scheme first; do you have any ‘what if’ plans; is there knowledge out there you can tap into; have you told those who need to know that you are making this change such as the bank, serving a break notice, raising the funds?

5 minutes!

The dreaded call for 5 minutes left, are you going to complete in time, how are you presenting your bake, is it looking like a masterpiece or a disaster that might pass with a sprinkle of glitter? You walk the cake up to the table and hold your breath; does it pass muster or is it destined for the bin; can you take the feedback and learn from it or will we see the same mistakes next week? What are you going to tell you family and friends about your experience and how will this differ to what they see when the show is aired?

We know that for the GBBO competitors it’s a raised eyebrow or if they are lucky a handshake but what about your cake, what are you doing with it afterwards? Are you selling the cake, parcelling out little pieces for different people or having delivered this cake agreeing to bake regularly for the customer; do you know what you should be charging for the cake, are you going to charge more if the customer wants extras on the cake; who’s responsible for your quality control; what if the customer wants a different cake next time? Have you got the necessary agreements in place; do you need to make changes to your contracts of employment, commercial terms and conditions, licencing agreements, fee structure etc?

What have you communicated so far, will your employees, clients, customers, suppliers know the change is complete? What will look, sound, feel different and how will this compare to what you communicated at the beginning? Will you be honest if errors are made or your change didn’t quite go to plan?

You are through to the next week – congratulations!

If redesigning what you do as an organisation feels like it’s too hard think about using the baking analogy; imagine your change as a recipe. Be aware of the steps you need to take and follow them. Even if at the end of this your cake wouldn’t win any awards, you used a recipe and you made what you believed to be the right ‘cake’, with the ingredients and the time you had available to you. I call that a result!

*My favourite analogy is comparing Alpaca and what we do to ‘The Pips’. Some of you may not have heard of Gladys Knight but she is considered an amazing singer and performer in her own right but when she had ‘The Pips’ as her backing singers she become a legend! In their early Motown career, Gladys Knight and The Pips toured as the opening act for Diana Ross and The Supremes. Gladys Knight stated in her memoirs that Dianna Ross kicked her off the tour because the audience’s reception to her soulful performance overshadowed Dianna Ross. Berry Gordy (music mogul and founder of Motown records) later told Gladys that she was giving Dianna Ross a hard time. That’s what we do at Alpaca, we help you become the performer that overshadows the main act!

*terms and conditions apply. No actual guarantee implied. Investments can go down as well as up. Applicants must be 18 or over. Some sequences shortened. Delivery mileage included. Goods must be returned in the original packaging within a 28 day period. May cause drowsiness. Do not operate heavy machinery. John’s Cupcakes are licensed and manufactured in the US of Ireland.

See, it’s rarely a good idea to simply cut and paste your Ts and Cs from somebody else’s website, even if it just seems like a boring, “tick box” exercise that needs completing. Just because you’ve never been burned by having bad (or no) legal agreements doesn’t make them a bad idea. And yet so many small businesses feel that this is the only way to protect themselves. As you can see above, it usually has the opposite effect, simply confusing your customer.

Geek moment – there is also a legal principle that says if you ever need to try and rely on a clause in court, any ambiguity will be interpreted against you. So you might just find that you’ve made your life harder by trying to find a shortcut.

And yet this doesn’t mean you should spend the earth and months of your life creating the best legal agreement the world has ever seen.

But working with Enlightened SMEs on a daily basis we often find ourselves having to educate clients as to the rationale for these documents. Many are resistant to spending on legal or “compliance” issues, often because (as above) they’ve never been burned.

“I operate on a handshake”, we hear often. Which is lovely, but if your clients or suppliers don’t, then you may find yourself in a pickle. Also, Coronavirus, people, please; handshakes are so 2019.

Trust us, having simple yet robust, fair, clear terms and conditions, contracts with suppliers, shareholders agreements and similar documents is a good idea. I can think of at least three reasons:

1. It makes the sales process easier and stops your sales team answering the same questions every time;
2. It makes you more attractive to investors, as they can see you take governance seriously; and
3. It might just save you thousands in legal fees or disputes down the line.

It may seem painful to invest a few thousand pounds to get these right upfront but the cost of getting them wrong almost always outweighs the investment.

So often we speak to clients who are having trouble with wastage, returns, unpaid debts or internal disputes who don’t realise that these issues would never have materialised if decent contracts were in place upfront.

Similarly, I’ve lost count of the times I’ve worked with business owners who have been pushed out of their own companies because they failed to have a shareholders agreement and could not then believe that they had no rights or ability to stop the other shareholders “ganging up” to vote them off the Board. Tens of thousands in legal fees later, they end up starting again with no reward for years of hard work.

Work out the value to you of having these in place. If you sell a hundred thousand widgets a day at pennies a pop, and your returns are less than 0.01%, you might be pretty relaxed about your terms and conditions. On the other hand if you sell a more bespoke product (or service) and the cost of getting it wrong runs into the tens of thousands, then surely it’s worth investing a little now to save a headache later on.

You want an analogy – imagine you’re buying a house. The survey is an expense you could do without, as are the legal searches. But do you really want to take the risk that the roof is rotten, the walls have dry rot and the driveway belongs to your neighbour ? Copying the searches from the last house you bought, because that went well and you never had a problem, isn’t going to help.
Same applies with your business.

A shameless plug for Alpaca ?

Well sure, we can help you sort this stuff but it’s just part of what we do. We’re not a law firm so we don’t HAVE to make our money selling you complicated legal solutions. We’d rather work out what protection you really need and tailor it to suit. But speak to your favourite lawyer if you prefer. If money really is too tight to mention (contemporary music reference there, for those paying attention), go online to a site like Legalzoom and have a crack yourself, but make sure they’re done with YOUR business in mind. It’s way better than having nothing and almost certainly more helpful than simply cutting and pasting from another company.

How do we convince clients that the documents are necessary ?

Frankly, often we don’t. We accept that the clients may never really care about them. Instead of getting all precious about our lovely legal agreements, we focus our client’s attention on the dramatic impact we can have on their profit line and simply make it a function of our Growth Programme to quietly take care of the compliance stuff in the background.

Basically we engage them with really exciting sales plans, we open doors to new clients, we return them huge great wedges of cash through R&D management and cost savings, and then use some of that free cash to deliver a compliance regime that makes them a scalable business.

Alpaca: Growing ESMEs since 2015*

*terms and conditions may apply 😊

Well that went quickly, three weeks where I tried my very hardest not to think about work, check emails, respond to calls from clients and generally spend time on things that were all about me. It wasn’t as easy as I thought and although there was an added distraction in the form of a beautiful Flatcoat puppy I still found it hard not to think about work, talk about work and generally get excited at the thought of coming back.

What I did do though was read, and lots of it. I love reading, it’s my down time, how I relax at the end of the day, my go to thing when I need a distraction; I like just about any kind of book, something that I can lose myself in, something that I can read and it challenges me to think differently, a book that can make me laugh out loud until I can’t get my breath (thank you David Sedaris, your books have been a tonic recently). Whilst I was furloughed I received a copy of ‘Non Bullshit Innovation’ by David Rowan which became my bedtime reading, and what a read it was, it could have only been made better had I had post-it notes at the side of the bed to mark all the interesting sections. It was the first book I had read that gave me the examples to describe why and how we do things at Alpaca; at last I could read about other businesses that felt familiar and that I wanted to be part of.

So, here’s my very short take on the companies whose strategy resonated with me because it’s stuff we are already doing.

As a result of the economic impact of COVID 19 there have been companies out there who have found new ways to do business. Did you know Craven & Co used to make metal & steel wire storage and handling solutions, but nobody was spending money on new catering facilities or shops, however with a few tweaks (well maybe a bit more than a few tweaks) they are now making medical equipment for the NHS Nightingale hospitals. Then there is the Dine Group who provide high end catering to weddings and other large events and also had a ‘Dine Delivered’ product. Much of their market; gone in a day! What they did was to change their business to only supply home dining experiences because folks still had birthdays and anniversaries during lockdown and called it the ‘Lockdown Dinner Box’. What about Masons Gin and Harrogate Tipple who started producing hand sanitiser alongside their Gin? All of these were fast pivots to respond to a rapidly changing market, but if you think these are innovative though, think again! In the book there is a chapter about OP Financial group who switched from being a long term, well established bank in Finland to be a hospital, how exciting is that? It was able to do this because it was a trusted institution that held fast to its core values of a cooperative and instead of trying to do banking better it took a long hard look at what its clients really needed and made that switch.

Reading about Xiaomi (shao-o-mi) is the first time I have been able to understand a company and say, ‘that’s how Alpaca operates!’ Xiaomi is a technology company that designs and builds smart products such as Mi Phones, Mi Smart TV’s and Mi Pads, you get the picture. What it does differently is rather than expanding the business as the technology changes they invest in start-ups and other business to create a portfolio of products, that together create a lifestyle for their consumers. They call it an ‘eco-system’. They describe their strategy as akin to building a bamboo forest; traditional companies are like trees, they take time to grow, they are fixed and when they fall, they fall hard and fast, and we have certainly seen that happening recently, even pre COVID19! Bamboo forest don’t die off, new baby bamboo is always growing fast to replenish it. Alpaca is made up of numerous shoots of bamboo, we have our core product of professional services; we have start-ups that we invest in and support to grow through business advice; there are clients we work with where we take an equity stake rather than a fee (we call it putting our money where our mouth is!); and there are businesses that we purchase and add to our portfolio of services because we know our clients need that type of support. In a nutshell we are creating our own bamboo forest!

At Alpaca we often talk about our service and how we price it for clients. We don’t charge by the hour or the ‘letter’, whatever we charge we do our very best to add value to the client, but what does that look like? Heywood Hill Bookstore has a wonderful literary history and a royal warrant, but they were significantly impacted by the online retailers and just could not complete. Rather than cutting prices or closing the business they realised what they did have, that none of the online retailers had, was a team made up of dedicated bibliophiles who each read up to 200 books a year and understood the importance of matching the right book with the right person. They grew a subscription service where book lovers could choose a subscription based around the type of books they liked and how frequently they wished to receive a book and the staff would select them a book and send it with a beautiful personalised note. The cost of a 12-month subscription for 12 paperback books is £225. That’s approximately £18 for each paperback book, but according to their filed accounts it generated £313,068 in revenue in 2018. Let’s overlay that model with the Alpaca model; we are not cheap, and we don’t pull clients into services they don’t need, for example think about supermarkets where you can buy three books for £10. You end up with two books you want and one you don’t because it’s perceived as a bargain. Or what about online retailers that uses an algorithm to tell you what you need to read next; how many have you bought and not read or wished you hadn’t read it; I know I certainly have. Both simple examples that show how easy it is to waste money and time. At Alpaca we personally get to know our clients, we anticipate their needs, we make valuable connections for them that they didn’t know they needed and those who get it are absolutely prepared to pay for our service! Anyone any ideas how we get a royal warrant?

Four of us at Alpaca have now read the book, and we all picked out different chapters we got the most from or that resonated with us in regard to work we had done; which shows we all looked at this book with a different perspective. Imagine what that looks like for your business when you engage with us? Having a team of Alpacas working together, being innovative but without the bullshit!

Happy reading!

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