tuesday 26 th april 2005. presentation to tuesday 26 th april 2005
TRANSCRIPT
Tuesday 26th April 2005
Presentation
to
Tuesday 26th April 2005
Business Success
through
Networking
Ken DicksonManaging Director, Axiom Executives Limited
Tuesday 26th April 2005
Outline
• Why I am here today• Definitions• Building a database of contacts• Some practicalities• Who to network with• Business Success: the fundamentals• Warnings from experience• Question time
Outline
• Why I am here today• Definitions• Building a database of contacts• Some practicalities• Who to network with• Business Success: the fundamentals• Warnings from experience• Question time
Why I am here today
• Academic interest in helping students/Universities
• Background
• Advisor to small, growing businesses
• Developed my own company 3 years ago
Academic interest in helping students/Universities
• Student – Glasgow University
• Certificate in Teaching Adults – Surrey University
• Lecturer in Management and Management Accounting – London Guildhall (Metropolitan) University
• Mentor, Enterprise Centre - Cambridge University
• Acting Finance Director, spin-out - London South Bank University
Background
• Qualified Accountant– FCMA
– MIP
– Practicing Certificate
• Experienced Finance Director/Financial Controller– Start-ups and early stage
– Small companies (< £2m turnover)
– Large companies (£500m turnover)
Advisor to small, growing businesses
• Start-ups– Helped set up 12 businesses in 3 years– Fund raising– Establishing financial and legal processes
• Turnarounds– Financing– Dealing with creditors
• Grooming for sale– Over 25 acquisitions and sales
• General management advice
Not only advice
but also hands-on experience
“We implement the advice we give”
axiom-e’s view
Strategic financial management is:• the application to strategic decisions• of financial techniques in order • to help achieve management objectives.
axiom-e’s view
All organisations need to have:
• a clear and realistic strategy,
• the financial resources, controls and systems to see it through
• the right management team and processes to make it happen.
Business Success through Networking
How many of you have ever networked?
Outline
• Why I am networking with you• Definitions• Building a database of contacts• Some practicalities• Who to network with• Business Success: the fundamentals• Warnings from experience• Question time
Networking – definition (1)
Any suggestions?
Networking – definition (2)
1 LINKING OF COMPUTERS
The linking of computers so that users can exchange information or share access to a central store of information
2 GATHERING OF ACQUAINTANCES OR CONTACTS
The building up or maintaining of informal relationships, especially with people whose friendship could bring advantages such as job or business opportunities
Source: Encarta World English Dictionary
Networking – definition (3)
Networking is:• establishing, maintaining and utilising a broad network of contacts • in order to keep aware of public, political and internal issues and• to make informed decisions.
It includes:• identifying who to involve, as well as • when and how to involve them
in order to achieve objectives and minimise obstacles.
What networking is about
“Networking is • making links from people we know to people they know, • in an organized way, • for a specific purpose, • while remaining committed to doing our part, • expecting nothing in return.”
Donna Fisher and Sandy Vilas, Power Networking
Outline
• Why I am here today• Definitions• Building a database of contacts• Some practicalities• Who to network with• Business Success: the fundamentals• Warnings from experience• Question time
Starting in business
“No man is an island, entire of itself; every man is a piece of the continent, a part of the main.”
John Donne
Meditation 17, Devotions Upon Emergent Occasions
In partnership
“Two are better off than one, because together they can work more effectively.
If one of them falls down, the other can help him up. But if someone is alone and falls, it’s too bad, because there is no one to help him”
Ecclesiastes 4:9-10 (GNB)
A small group
“Two men can resist an attack that would defeat one man alone.
A rope made of three cords is hard to break.”
Ecclesiastes 4:12 (GNB)
Committee working!
Winning friends and influencing people
A more complex Network
HandshakesPeople
1
2
3
4
5
6
7
Handshakes
People Handshakes 1 0
2 1
3 3
4 6
5 10
6 15
7 21
Handshakes
People Handshakes Ratio 1 0 0
2 1 0.5
3 3 1.0
4 6 1.5
5 10 2.0
6 15 2.5
7 21 3.0
Get connected
People Connections
N N(N-1)
2
Get connected (2): On your way to St Ives
Man 1
Wives 7
Sacks
Cats
Kits
Total
Get connected (2): On your way to St Ives
Man 1
Wives 7
Sacks 49
Cats 343
Kits 2,401
Total 2,800 extra contacts from each 1 made!
The benefits of networking (1)
Contact at networking meeting discussing canoeing• 1 company 1• Intro to 1 other person
– 3 companies (one closed) 3• Intro to liquidator
– Invited to work on turnarounds 2– 1 company going well
• Fundraising led to a Venture Capitalist–Referred several companies to axiom-e 5
– Intro to 1 other person• 1 company 2
• Intro to bank– Referred several potential clients to axiom-e 5 16
The potential of networking
axiom-e’s view
It’s not who you know
but rather
who the people you know know!
Outline
• Why I am here today• Definitions• Building a database of contacts• Some practicalities• Who to network with• Business Success: the fundamentals• Warnings from experience• Question time
Use something suitable
• Index card system
• Outlook contacts
• CRM system (eg ACT)
• PDA
Meet and thank
• Do not take contacts for granted
• Ask for their advice
• Thank them for their help
• Keep in touch– Follow-up to meeting– Regular contact by phone, email etc
• Reciprocate
Good Networking Contacts
Some sociologists have found that “…acquaintances are more likely than family members to give individuals direct information and to recommend them for opportunities.”
Mark Granovetter, The Strength of Weak Ties
How to network: Suggestions?
How to network: Get yourself known
• Stand out
• Committees
• Articles
• Speaking
• Websites
How to network: Meetings
• Informal get togethers
• Invite yourself (Accountants and Lawyers meetings)
• Formal discussions– Top Banana– Cambridge Enterprise & Technology Club
Focus on the Help You Are Asking For
• Finding a job/advisor/lead
• Referral to company
• Increase knowledge/expertise in target career/field
• Increase visibility to others
• Generate new business/professional contacts
Develop Good People Skills
• Assert yourself positively
• Ask good questions
• Be a good listener
• Present yourself attractively
• Be viewed as knowledgeable or skilful in a particular area
• Show interest in empowering and helping others
• Reciprocate – what can you do in return?
• Do not look for the next contact whilst talking!
Make Name Badges Work for You
Suggestions?
Make Name Badges Work for You
• Always include your surname – Ken Dickson
• Print large & legibly – Have standard printed badge prepared
• Wear name tags on RIGHT SIDE – in the line of sight when shaking hands
• Add description below your name – name of company or sector
– (sometimes) job title
What will I say?
Suggestions?
What will I say?
• A mutual contact suggested you could help me…”
• “May I ask your advice?”
• Develop a 10-Second “Sound bite”
• Enlarge it into an expanded 30-second “elevator pitch”
• Can we meet to discuss our business plan?
• Prepare a set of opening lines, statements, questions, etc.
• Be prepared... practice, practice, practice.
A word of advice
“Remember, part of networking is giving to other people. The best networkers know that networking is much more than passing around [CVs, business cards etc]. It involves building relationships over time...”
Jack Chapman, Build Your Network, Now!
Outline
• Why I am here today• Definitions• Building a database of contacts• Some practicalities• Who to network with• Business Success: the fundamentals• Warnings from experience• Question time
Networking
• Building and maintaining useful contacts
• A two-way process
• Not “ME” but “WE”
Who to network with?
Suggestions?
Who to network with: Funders
• 3Fs
• Business Angels
• Venture Capitalists
• Banks
Who to network with: Advisors
• Accountants
• Lawyers
• Marketing advisors
• Not always charged for
• Free advice can be expensive
How axiom-e can help –Advisors
axiom-e has close working relationships with leading:
• Auditors and Tax advisors • Banks • Business Angel Networks • Corporate Finance Houses • Lawyers • Marketing, IT and HR advisors• Venture Capitalists
Who to network with: Stakeholders
• Suppliers
• Customers
• Employees (recruitment agencies)
• Government bodies– Inland Revenue– HMCE (VAT)– Small business service
Stakeholders Customer Owner Supplier
Sub-Contractor Administrator
Outline
• Why I am here today• Definitions• Building a database of contacts• Some practicalities• Who to network with• Business Success: the fundamentals• Warnings from experience• Question time
“A man may rise from poverty to become king of his country, or go from prison to the throne, but if in his old age he is too foolish to take advice, he is not as well off as a young man who is poor but intelligent.”
Ecclesiastes 4:13-14 (GNB)
axiom-essentials
Key things that all businesses need
• Corporate structure
• Funding
• Legal and Company Secretarial Matters
• Accounting and Financial Administration
• Internet Presence
• Other Administrative Matters
The problem
The absence of relevant financial [or other necessary] support can prove costly.
Early assessment of requirements and appropriate input is necessary.
CIMA’s view
“Appointing a finance director with the right skills to match the needs of the business is vital to its success.
Source:
CIMA Appointing the right finance director for your business
How we can help – Our approach
• Adding value – the reason for working• Cost-effective – lower charges than expected • Flexibility – work undertaken when required• Professionalism – experienced and capable• Experienced – hands-on Finance Directors• Honesty – fundamentally necessary from both parties • Integrity – working for the client’s interests
Outline
• Why I am networking with you• Definitions• Building a database of contacts• Some practicalities• Who to network with• Business Success: the fundamentals• Warnings from experience• Question time
Watch out 1: An idea is insufficient
• Ideas do not make a business–Over 99.9% of ideas never progress from a person’s head
• Having a company does not guarantee success – Almost 40% of businesses fail in the first 3 years
– Be prepared: ensure you have all the essentials
Watch out 2: Beware ostrich management
• Handle correspondence– in a timely way
– accurately/honestly
– keep copies of responses
• Piles of unanswered letters multiply– Get a competent person to help
• Proper filing systems– Computer
– Paper
Watch out 3: Business Planning
• Ensure you Plan, Budget and Control your business– Need for realism
– Regular feedback/review
• “Unless you know where you are headed, it doesn’t much matter which way you go” The Cheshire Cat in Alice in Wonderland by Lewis Caroll
• “If you’re going there I wouldn’t start from here” Apocryphal story of advice given in some remote places!
• Need for realistic costed plans showing sensitivity analysis
Watch out 4: Cash is King
Sales is vanity, Forget salesmen’s egos
Profit is sanity Forget accounting measures
Cash is reality. Cash is King
• The world does NOT owe you a living or funding or…• Banks are risk averse• Investors need to make a return• A sale by itself does not put money in the bank!
– Credit control
Watch out 5: Mr Micawber’s advice
“Annual income twenty pounds, annual expenditure nineteen pounds, result happiness. Annual income twenty pounds, annual expenditure twenty one pounds, result misery.”
Adapted from Mr Micawber’s advice to David Copperfield in
David Copperfield by Charles Dickens (a great Portsmouth person!)
• The proportion of spend to income is highest for start-ups
• Stupid Alice’s advice (in Rob Parsons The Money Secret)
– manage cash and beware loans that can’t be serviced
Watch out 6: Reputation
• Hard to earn, easy to lose
• Honesty is the best policy
• People remember problems
• Association
The Dragon’s Den
• Who would you invest in?
• Why?
• What do you need to know?
The Dragon’s Den:
Select the company to invest in
A B C
Forecast turnover 2007 £5m £5m £5m
The Dragon’s Den:
Select the company to invest in
A B C
Forecast turnover 2007 £5m £5m £5m
Incorporated in 1990 1999 2003
The Dragon’s Den:
Select the company to invest in
A B C
Forecast turnover 2007 £5m £5m £5m
Incorporated in 1990 1999 2003
Employees 40 8 3
The Dragon’s Den:
Select the company to invest in
A B C
Forecast turnover 2007 £5m £5m £5m
Incorporated in 1990 1999 2003
Employees 40 8 3
Investment to date £0 £6m £0.1m
The Dragon’s Den:
Select the company to invest in
A B C
Forecast turnover 2007 £5m £5m £5m
Incorporated in 1990 1999 2003
Employees 40 8 3
Investment to date £0 £6m £0.1m
Turnover 2004 £2.9m £0.05m £0.02m
The Dragon’s Den:
Select the company to invest in
A B C
Forecast turnover 2007 £5m £5m £5m
Incorporated in 1990 1999 2003
Employees 40 8 3
Investment to date £0 £6m £0.1m
Turnover 2004 £2.9m £0.05m £0.02m
% of market scheduled for 2007 <1% >40% >70%
The Dragon’s Den:
Select the company to invest in
A B C
Forecast turnover 2007 £5m £5m £5m
Incorporated in 1990 1999 2003
Employees 40 8 3
Investment to date £0 £6m £0.1m
Turnover 2004 £2.9m £0.05m £0.02m
% of market scheduled for 2007 <1% >40% >70%
Forecast profit 2007 £0.9m >£3m >£1.5m
The Dragon’s Den:
Select the company to invest in
A B C
Forecast turnover 2007 £5m £5m £5m
Incorporated in 1990 1999 2003
Employees 40 8 3
Investment to date £0 £6m £0.1m
Turnover 2004 £2.9m £0.05m £0.02m
% of market scheduled for 2007 <1% >40% >70%
Forecast profit 2007 £0.9m >£3m >£1.5m
Profit 2004 £0.6m £(1m) £(0.08m)
The Dragon’s Den: Best factors?
A B C
Forecast turnover 2007 £5m £5m £5mIncorporated in 1990 1999 2003Employees 40 8 3Investment to date £0 £6m £0.1mTurnover 2004 £2.9m £0.05m £0.02m% of market scheduled for 2007 <1% >40% >70%Forecast profit 2007 £0.9m >£3m >£1.5mProfit 2004 £0.6m £(1m) £(0.08m) How much would you invest? ? ? ?
Health Warning 1
“If you love money, you will never be satisfied;
if you long to be rich, you will never get all you want.”
Ecclesiastes 5:10 (GNB)
Health Warning 2
In your search for riches,
watch out for gems
Health Warning 2
Gems = Green Eyed Monsters
• Yourself – Trying to keep too much – Losing £15m without thinking!
• Others– Trying to take your ideas, company, reputation– But: small part of a lot > 100% of a little
Each funding round may dilute your share by 40%• be prepared!
The benefits of networking (2)Writing articles for local magazines• Increased awareness of axiom-e’s name
Treasurer of CETC• Increased awareness of axiom-e’s name• Linked to better-known people and access to membership list
Lawyers breakfast meetings• Contacts made about 1 year later by two clients• Introduced lawyers to axiom-e client• Low-cost/free advice from lawyers to start-ups
Website• 4 clients contacted axiom-e following internet search• Shows clients we know about internet
Outline
• Why I am here today• Definitions• Building a database of contacts• Some practicalities• Who to network with• Business Success: the fundamentals• Warnings from experience• Question time
Any Questions?
Summary
• Enjoy meeting interesting people but watch out for
• Networking– is a two-way process
– requires effort
– needs proactive approach
• Get known for the right reasons
• Watch your reputation
• Know one person who knows the people who…
Thanks for inviting me to speak and for your contributions.
Best of luck with your enterprises.
Ken DicksonManaging Director, Axiom Executives Limited
www.axiom-e.co.uk