1998- Factoring and How it could Destroy You !

Of course factoring companies are the best way of releasing and increasing your cash flow for your business. Let’s face it at different times we all will require a cash injection whether that being raised through your existing debtors book or through capital injection..

 Factoring companies are a great way to release up to 90% of your debtor book and you could opt for non recourse factoring which could mean that your risks are insured to a limit set by the factors… So here we go…

I have had good and bad experiences with the factors… My best experience by far was with Close Brothers http://www.closeinvoice.co.uk/ great service, great team….. The worst however was xxxxxxx which at the time part of xxxx….

We had supplied three clients out of 250 active clients, with goods totaling £90k and all got into financial trouble over a period of Three months.. Total ledger was worth £300,000. The Factors were nervous and it was apparent to me that they did not wish to pay to insured debt figure…

We had a very large London Radio station as a client and we were delivery goods to their store on a Friday evening but by the time the driver arrived the stores had closed for the evening (Friday night traffic)…. our driver returned with the goods but we had already batched up our invoices for the week and dispatched them to our Factors….

The factors then came down and ran an audit….. In my eyes their intention was simple “Get out of the contract, find a hole” They did…. we had pre notified an invoice before delivery had been signed for. Or books consisted of quality blue chip and major UK Businesses but they canceled the contract meaning we picked up the 90k bad debt.

This was absolutely appalling. Our account had run cleanly without fault for two years….. It did not break us the Far East Crash did…. So be careful, Banks do not like loosing money….. they give you an umbrella when the sun is out and when it rains they snatch it back!!!!!!!!!!!!

The positives

1. Increase your cashflow – allowing you to focus on your daily business activities.
2. Insure your risk – it can cost you but remember if you have a net profit of 10%%, any loss your suffer you will have to write ten times the revenue to recover the loss.
3. Fees can be negotiated – as you grow and if you have a clean book you can negotiate your fee down.
4. Your own back end office – if you opt for for confidential factoring your client will not know that you factor and you then collect out your own ledger then pay your factor the money you collect out.
5. If you do not have a back office then non – confidential factoring can be a great bonus as the factors chase the money that you are owed and this can be an advantage as the factors will apply pressure when you need it.

The Negatives

1. Some customers can run he factors around and your aged debtor analysis can run out to 60-120 days  increasing the costs that you pay against draw down.
2. Do not batch up an invoice until the goods have been signed as received
3. If you sell a product then make sure your terms state that a customer must notify you of shortages within 3 days of delivery
4. Once your in your in and unless you pay back the advance that they have given you, you cannot get out……
5. The factors may want a fixed and floating charge over your book and your business

At the end of day choose wisely…. you will hear good and reports but use someone well known and meet your account managers and go to their offices and above all check and double check your systems and procedures.. Keep your operations tight and you will benefit from using factoring services…

I would absolutely use factors again but this time would ensure that we would not make a operational mistake like we did… I also hear that Bibby are running a really good service at present….

Regards

The Unknown Entrepreneur

1998 – The Far East Crash cost me EVERYTHING!

It took 5 years to build a successful business and only one day to destroy it. I had built a business from scratch after investing £16k which at the time was all that i had in order to market my products to my target audience. From 1993 I had worked days, nights and weekends to reach my goal of becoming the UK’s leading promotional clothing and accessory business in the UK.

I had started to realise my dream and had secured clients such as Walt Disney, Imperial Tobacco, Coca Cola, Sky BSB, Virgin, Chelsea FC, The Spice Girls, Oasis, Team McClaren, Film 97,98 and I was a major supplier to Wembley Stadium. My turnover had gone from £350k to £3.2 million in the space of one year and we now had a 20,000 sq ft warehouse/ office and held just of £1.5 Million in rotating stock.

I had no ideas that the Far East would crash overnight! Once the crash happened my Korean Partners had to withdraw from UK operations and understandably so. Little did i know, the Korean Glory seeker (my initial stock supplier) had over supplied the UK and European market and was now re-called to Korea to answer to his superiors.

I had spoken to my father about returning the stock in great depth. The Koreans had asked for me to send all the stock back to a bonded warehouse but this would leave my warehouse practically empty with huge costs with a 3 year lease still to run… I was not sure whether to send it back or to keep hold of the stock and call their bluff? My father said to me “Do the Honourable thing son”….The Korean had promised that there would only be a 90 day delay before new stocks arrived, but i felt differently.

I returned the stock and the Koreans had no intension of re-supplying the stock and as a result i could not supply my clients and had no choice to liquidate the business. My advice to everyone when either choosing  a major supplier is to check the risk and exposure that you may face before entering into any agreement that could at a later stage cause your business potential harm!

 

I did return all the stock and did the Honorable thing, but there have many days where i wished that i had not and that i something that still haunts my memories still to this day!

Regards

TUE

2008- A mountain to Climb! Reaching Critical Mass

Well Monday has come just as quick a Friday went…… The concerns, pain and uncertainty are still there in abundance. It’s getting even more difficult to turn this new project around….. This is exactly the point where we loose most of our budding and aspiring entrepreneurs, through lack of finance, lack of knowledge or just plain and simply we reach the point where we can take no more!

I wonder just how many Entrepreneurs have just sailed past this point either through successful trading, lucky break or sheer determination?  Well my point is not aimed at the ones who have sailed through the stormy seas onto calmer waters rather than the entrepreneurs who’s ships run aground or sank at this point?

Two trains of thought:-

(1) You have an idea yet you are underfunded but you have to start the project anyway, because if you did not start the project then it would have never got off the ground. If you have a concept then some people will not believe and realise until you can show them something tangible?

(2) You wait until you have all the necessary funds are in place before commencing your project?

I believe that there are different project that at times need to be created in different ways. Some projects cannot possible start without having the precise funding in place whilst others can be started in order to gather interest and investment. Some projects are very clear cut and without a doubt you know exactly what to do and when, while some other projects, well i guess it’s down to how you feel and the circumstances, climate and the presents itself to you!

OK so we are are where we are, underfunded but a fantastic idea that is now very real and very tangable…. so what are the next steps? Forward momentum is everything…

1. Keep the dream alive at all costs
2. Remember why you started what you started?
3. Celebrate the wins
4. Ensure that you key team has a firm footing on where they are heading
5. Give clear direction
6. When all around you are doubting – raise your game
7. Remember to talk about your position openly with the people that you trust
8. Prepare a plan of action and move towards it
9. Look towards your customers first- they are your primary source of income
10. NEVER GIVE IN!

I always dreamed of big things but even the biggest joinery starts with small steps and i have said to so many people “Instead of trying to cross a raging river in one go, take small steps and use the stepping stones, if you look closely enough- you will see them!”

See you all on the other side….

GFI

Regards
The Unknown Entrepreneur

1995-Its the Man not the Van!

You have often heard the saying “Its the man not the Van”….. I believe that to be completely true. Whilst one man is sitting worrying about inferior another is getting busy in becoming superior. So what sets apart the doers from the shirkers?

The Answer is quite simple – Attitude, Belief, Strength, Purpose, Honor, Desire, Drive, Goal Orientation, Integrity and Honesty…

Let me tell you about a little van called “Hi Ho Silver”.. It was 1995 my promotions business needed every penny i could get my hands on to fire the business up and take on the Korean Glory seeker – see earlier post http://theunknownentrepreneur.wordpress.com/2008/04/01/landing-2-million-of-unsecured-stock-funding-credit-from-a-broken-chair/

So i sold everything my car and my house and all my treasured belongings… I could not afford  much by way of a car and actually i needed a van…. I came across old silver, a small Renault van that had been resprayed but had broken wing mirrors and dented wings…. £45 from the scrap dealers soon cured that.. and for £1145 i had my new van which would carry my stock, take me to appointments and would also act as my car….. “Hi Ho Silver was my work horse” this little van had over 195,000 mile soon the clock when i sold it… It was one of those fantastic buys that always started and never let you dowm….

I have felt let down by so many things in my life but old Hi Ho Silver always delivered- I wonder if he is still about? I’m sure he is…… It was not just the Van rather what i did with it.. Silver took me everywhere from trips up north to my manufacturers, to clients, and to weddings (although i always parked around the corner for those)…

In any case it’s what i did that me different from other people. i did not worry about what i looked like, instead i just got on and did the job at hand!

Regards

TUE

2008 – The Advertising Nightmare- A great Free site!

Hello Everyone

Just thought i would let you know about a great free Business Internet Directory website… Its called Businesssourcer.com visit http://www.businesssourcer.com to upload your free advert. You get 150 words, a full colour logo and full contact details to help promote your business..

As The good ol boys at Tesco say “Every Little Helps”

Kind Regards
The Unknown Entrepreneur

PS – Is it hot in here or is it me?

2008- Reaching Boiling Point and knowing what to DO!

When things heat up around you and you find yourself reaching boiling point, there are only two eventualities (1) You reach boiling point and its lights out (2) You reach boiling point and turn it into your distinct advantage, but at what point do we decipher the difference between hanging in and fighting or realising that we have to let go because there is actually nothing that we can do stop it?

I must admit that i have not quite yet mastered knowing the difference. It seems if you are a fighter and you believe in what you are doing then you hang on regardless of the outcome or until you are so burnt to a crisp that you can no Longer distinguish the difference between a human body and a piece of over baked Pork Crackling.

OK so here is my point……….

Perhaps we should not leave it so long before the situation starts to heat up
Perhaps we should talk to like minded individuals and gain invaluable feedback
Perhaps we should not be so proud, stubborn and foolish and accept that a storm is looming
Perhaps we could or should have taken preventative steps
Perhaps we could have taken another approach and have no second chance to take it again
Perhaps we did not learn from a previous bad mistake or decision

Perhaps, Perhaps, Perhaps……………

So what if there was a network of people who shared their good and bad experiences and this resource library grew so much that it became a bible of knowledge of surceases and failures that all individuals have been either proud to share their success and not so proud to show their failures?

I think the four most powerful words in the world regardless of language or cultural or religious beliefs are “CAN YOU HELP ME”………….People never say “No” but whether they can actually help you or not is another matter entirely but surely if you ask enough people someone will be able to help…

So how do we create a place that individuals can come and feel at ease to discuss both successes and failures? How do we help people to understand that we can stop people having to re-invent the wheel, reduce the amount of failures and increase all of our success rates?

In the mean time i wish all of you luck but remember -  “Be prepared to go on the occasional wild goose chase because thats what wild geese are for”

Good Luck
The Unknown Entrepreneur

 

2003 – The Worst Conservatory Regional Sales Team in the Country!

Here we go again…… I decided to move into taking on what was the worst performing sales region in the country to the Top! I had never been involved with or understood the technical design, delivery and build of these fantastic Conservatories. If I did join this business I would be the first person to move into branch management without ever having sold the product and having climbed through the ranks as a sales person first. I would be facing not only criticism but resistance from all the doubters, however PERSISTENCE BEATS RESISTANCE!

Every body kept saying to me “No one can make that branch work, it’s a no hoper. You cannot recruit, there is no parking and no one has been able to make it previously and we have had some seriously talented managers in here before”. I believed differently because i was always taught that one man’s rubbish is another man’s gold.

I was offered the role and immediately went on a weeks product training before moving into my branch and taking over the management of the sales team,the telesales team and the administrations team. The branch had consistently been the bottom performing branch in the country. In total the mixture of windows and conservatory branches was about 90 … So my branch was at the Bottom! Only one way to go UP!

My goal was to make the Branch the top conservatory branch in the country and the prize for achieving that was a trip to Dubai with my partner all expenses paid trip staying at the Jumeriah Beach Hotel – with an action packed dune hoping, shopping frenzy, heat, sun , sand and the finest restaurants awaited. My partner deserved a break and i knew that she would love it and i wanted her to have fun, after all i loved her.

What would it take - 12 to 14 hours a day work schedule 6 days a week with calls being received up until the wee hours of the morning to close deals. I would have to change the belief in the branch and build a successful and motivated team that not only believed in me but wanted to do it for themselves. I would need to implement a disciplined but rewarding environment. LIMC Lead- Inspire- Motivate- Control. Sounds simple doesn’t it! You can only do it if you have a burning desire to succeed and let nothing get in your way.

WITHIN 3 MONTHS THE TEAM WAS THE NUMBER ONE CONSERVATORY BRANCH IN THE COUNTRY AND THE 5TH BEST BRANCH OVER ALL OUT OF 90 BRANCHES. WE WERE DELIVERING 3 TIMES THE REVENUE OF MOST OTHER CONSERVATORY BRANCHES AND DUBAI WAS ALREADY IN THE BAG. 

I held training meetings every day and spent time with every person in the branch in order to help them grow their SKA levels – SKILL KNOWLEDGE ATTITUDE. It took only three weeks to turn the tide and the appointments and the deals came flooding in. My branch was full so full of motivation that my staff just did not want to go home. There were prizes ranging from a £1 toy right up to a weekend in Paris, which i funded and my ROI was there against my income so what did it matter. I was organised, efficient and dedicated and never for one minute took my eyes off the goal. I monitored and control every team member and gave them both personal and business goals and reasons to move forward.

Anybody that has worked within the environments that i have created have experienced a fun yet disciplined work arena and most have moved their careers forward. Understand that you cannot help everybody. Some people have limits that they either cannot be bothered to go beyond or quite simply are too lazy and unmotivated to move forward from. These people will put up every excuse and give a 1000 reasons why something cant be done and actually if they put the same amount energy into thinking that hey could do it then they would.

Start with the people that want to do it and spent time with them first as that’s where your base revenue is going to come from and then work your way down the performance attitude ladder from there (unless of course you have removed your non performers already) but also bear in mind that In every business i have been involved in that i have found a diamond in the rough!

Vindication was walking down the centre isle if the Monthly National Sales Meeting and putting my sales figures up on the board in front of the whole company for my best ever month on the board……. Top  revenue, Top Finance, Top Conversion Rates, Top telesales lead, Lowest admin cost branch, Best Recruitment, Best staff Retention….. well you get the drift ……and for all those who doubted and you know who you are. Yes I succeeded where you failed because my balls were bigger than yours and you quite simply didn’t believe…….. Dubai was GREAT…… A trip well worth fighting for and by the way winning easy!

Thank you to all the team that enjoyed our favorite morning saying “SIZZLE SIZZLE” well you all did it and i am very proud of you all- we did it together- what a team! Sorry to A.L.E for all the late nights but it was worth it in the end…… a small sacrifice for a big win!!!!! Heart to Heart all the way.

2007- Out of the ashes: The Fire starter!

Down but not out, Judged but not executed!…….. When you fall and you are in a dark hole, sometimes you can have the most amazing ideas and thats exactly what has happened to me AGAIN!  The most enjoyable part of my life is helping people. The amazing fact that you can have such an impacting effect with life changing experiences for the people around you.

I am thinking outside the box and once again I am faced with being the underdog, my finances are in disarray and my personal life has left me with a broken heart and so many mental scars- but my spirit as always lives and breathes, because I believe that i am destined to help people and in doing so it will help me….

I’m wondering how many Entrepreneurs have been here before?
I’m wondering how many Entrepreneurs had amazing ideas yet have failed?
I’m wondering what the government is doing to help bankrupts get back on their feet?
I’m wondering if everybody does indeed deserve a second chance or a third or fourth?
I’m wondering what makes successful people continue being successful?
I’m wondering if we could make people give as well as take?
I’m wondering if a smile can travel the world then could an e-handshake?

I’m wondering if we could create and build a website where business people, Entrepreneurs and people who enjoy the challenges that being in business represents, can come together regardless of their current financial position, gender, location and business area? Could we unite Entrepreneurs together not only in the UK but possibly the world. Hmmmmm !

The concept was buzzing in my mind, an excitement had come over me however we would need investment and we would need a board of directors that shared the same vision in order to create the business and then drive it forward…..

THE DREAM HAD FINALLY BEGUN

Next stop – present the idea to a group of investors!

 

 

 

 

1997 – Landing a £350,000 European Disney Contract

By now I had moved from my humble first floor shop offices and farm barns which were used for storage and had moved to a 20,000 sq ft premises, which now had over £1.5 million in stock courtesy of my Korean Partner in search of the Glory Lands. We were now looking to impress and close some major Blue Chip and World Brand cusomters……..

My first trade show  for the promotions industry was held and the Birmingham NEC and was promoted the BPMA The British Promotional Merchandise Associaiton… The show was a great success but we just had not bagged the biggest visitor to the show….. The buyers for Disney’s Kids Club were at the show! My salesmen were tasked with bagging the prize jewel and bring home the bacon, but somehow i knew that it might just possibly come down to me to run the charm offensive!!!!

The contract was worth over £1 million pounds but if we could just take a small piece of the bigger pie then we would be well on our way…..  Christine was a lovely lady but not into the usual buyer seller nonsense and bravado.. My charm offensive included only a John Wayne style lasso a coffee and a grounded chat. Thats all it took and of course some innovative products backed up with some amazing embroidery techniques.

The order for the following months was worth around £350,000 and we supplied The UK and European Disney Channels with over 10 different and innovative products which were subsequently given away as prizes across europe…

You can if you believe you can!

1986- The Youngest Blue Button with James Capel & Co

At a young age I had always dreamed of working on the London Stock Exchange as a Blue Button (runner). I used to jump school and head up on the underground just to watch all the hype and buzz of the trading floor (which closed in 1986). I knew that with my energy and my crazy love for a fast paced work environment that this would be my home.

I obtained a members book and immediately began writing to all the member firms. I actually wrote about 220 hand written letters, posted them and waited eagerly for all the replies to drop from the letter box of my family home. I had no degrees and only had B,C and D grade CSE’s ad O Level’s and in fact was an average student that always played the fool at school but was always liked. I was the a sixer in my local cub pack, a school house captain and was liked for my fairness by many people.

  It seemed days before i received my first letter, which i ripped open with great excitement, my hands sweating and my heart thumping so loud that it sounded like the drums from Jungle Book. I was expecting Bagheera to jump out of the letter and grab me!

Well all i got was “Sorry we only accept Graduates, however, we will keep your CV on file for future reference” I was mortified, Graduates only! Wait till they get a load of me. After about 120 replies all saying the same thing i realised that i would not be able to get a job using this method.

I retrained my energy toward recruitment agencies and immediately started to send my CV out to the top City placement firms. I managed to secure some interviews and impressed the agencies and finally i had an interview with Chase Manhattan Securities…….. the interview well …….. it just did not happen. I got in there and froze like a Birds Eye Pea! I knew that i would not be offered the job, because i could not answer any question without being shy and withdrawn- of course they would not have recruited me! They needed the Tazmanian Devil instead got a quiet Monk..

After 5 interviews, my hope was beginning to fade. I even applied for a post room position and thought i could work my way up only to be told that my aspirations were way too high for someone who wanted to work in the post room.

WHAT WAS I SUPPOSED TO DO- I ONLY WANT A JOB – CAN SOMEONE PLEASE GIVE ME A BREAK

I was taking a maths exam at school and a teacher came in and said your mum said i had to leave. I had received two short notice interviews, one for 1pm and one for 2pm..

I left school ran home and put on my best suit and tie (Burton’s i guess at the time but i thought i looked good) and headed up on the Underground to Liverpool Street – First stop Nat West Bank…. By now i had nothing to loose. While in the waiting room i looked around at the nervous competition and thought “they don’t stand a chance this job is mine”. I interviewed for about an hour and if i don’t mind saying so, i blew this guys socks off and no sooner as i had finished the interview i knew that i had the job! The usual “We will contact you later” words came from the interviewers mouth and i thanked him then immediately ran to 3 Bevis Marks, next stop James Capel & Co owned by HSBC.

No competition this time and in i went first i saw HR and she said “I need to get someone else to see you” I then saw a trading Director and he said ” I need to get someone else in to see you”……… after what seemed a lifetime a monster opened the door called Barry Collins and oh my god i think i shit myself. I have never seen or felt such a presence…. I almost thought he was going to say “Obi One never told you who is your father….. I AM YOUR FATHER”….now i know what presence is all about! This guy put me through the pace’s but i did not take my eyes off of him even though i had just wet myself LOL……. during the interview he was asking various questions and all of a sudden he said “WHAT’S 9 TIMES 19″ and i answered without hesitation 171……… Do you know to this day i do not know where i got the answer from, perhaps divine intervention, perhaps i was so scared he would strike me down with his light sabre that i just got it right….. the words came once more “We will contact you later”….

The train journey home was perhaps one of the longest of my life. I thought to myself what else do i have to do to get a job! I was desperately low and had gone through over 200 hand written letters, 10 interviews,  the post room and top line agencies……… Perhaps i was not destined for the Stock Market after all?

I left the station and walked up the steep hill towards my home. I was embarrassed to have to tell my family that i had failed and that i would not become a Blue Button….

I creaked down the side gate of our house and proceeded sheepishly to open the back door. To my surprise and shock my parents and my sisters were sitting around the kitchen table with a bottle of champagne and 5 glasses……..

My mum said that both the companies had called, i was expecting the worst “YOU GOT OFFERED BOTH JOBS SHE SAID” at this point i burst out in tears and collapsed on the floor… one job offered me a £7500 start and one job offered me a £5500 start…… I accept the job that offered me £5500 start but had much better prospects. I was the youngest person ever to serve as a Blue Button the Convertible Bonds Floor…..

Dreams to Reality