click this button to get back to the previous page

THE WEATHER REPORT

My friend Roger has been exporting people. Nothing illegal, I hasten to add. Well, maybe a little. Roger lives in Manhattan, where builders and other craftsmen and tradesmen charge prices that would make your eyes water. I mean, they are completely out of touch with reality. So Roger, who wanted some work done on his apartment and on his weekend house in the Hudson Valley, arranged for some ‘friends’ to come and stay for a few weeks. The friends were, as it happens, an Irish plumber, an Irish electrician, a Polish bricklayer and plasterer now resident in Ireland, a Lithuanian carpenter also now living in Ireland and a ‘boy’, being a young English lad who can turn his hand to a bit of this and a bit of that. It won’t surprise you to discover that the friends repaid his hospitality by doing a few things around the house (a new kitchen in the city, renovating a barn and building some new gates in the country) and if they went home with fat wedges of cash in their pocket as a thank-you present from Roger… well… why not? Roger, of course, bought all the materials used. He reckons he saved around $90,000 with this strategy.

It set me thinking. People with cash are reluctant to spend it at the moment unless they get extra value for money. But if they are offered a bargain they will snap it up. Right now in the rural areas of Europe there are good builders and craftsmen desperate for work. In the city are homeowners with plenty of money who would happily get things done to their homes if they could find someone good to do it at a reasonable price. I reckon there is substantial money to be made introducing one group to the other. I know how to find the homeowners, too: by getting in touch with local residents associations in posh areas like Hampstead, Belsize Park, Chelsea and Knightsbridge. The worker end of it is no less tricky. I’d start with a letter to every local paper in Ireland. Why Ireland? Because the economy is in tatters, so good people are looking for work, and because they speak English. OK, it would take a little organisation, but suppose one charged a 1% introduction fee to both sides, in other words 2% off the top of every job. A £20,000 kitchen would yield you £400 for making a few phone calls and sending a few emails.

Hey ho and a nonny nonny. Only an idle thought, which needs refining. But the principle is sound. There’s a good trade to be had in moving talent, as well as goods, around the world. I’ll get on with my column now, which is packed with the usual new business ideas and product recommendations, and I think I will start with a couple of other subjects that grabbed my attention this month.

Become a happy loser

Dr G. Clotaire Rapaille, a psychoanalyst who has built a career studying entrepreneurs and sales people, says that the most successful people are those he terms “happy losers”.

Happy losers are people who see rejection as a challenge. Indeed, every time they fail at something they view it as a necessary step towards success. Rapaille has asked salesmen, for instance, about their first experiences selling and has found out that those who end up successful later in life viewed that first rejection as stimulating. It didn’t make them want to give up; it made them want to find another way.

So, how does that help the rest of us?

Rapaille says that one can train one’s mind to embrace rejection. He quotes two sales-related examples:

• If a sales manager keeps saying to his staff: “You are going to win, you are going to win, you are going to win”, and then the sales person sees the client and is rejected, it can be a serious issue. A sad loser becomes depressed, disheartened and never bounces back. Sales managers should, therefore, change the way they train and encourage their team so that they are looking at the total picture and not at each and every sale.
  
  
• A sale is really only over when the customer says no. In some instances the ‘no’ may come before you have sold anything at all. In other instances the ‘no’ will never be reached. This is where a sale is made so that the sales people give up, doubtless thinking to themselves that it’s been a job well done. In fact, the best sales people realise that after making a sale they should keep asking for more. And more. Until the customer says no. The sale only ever ends when you lose.

Rapaille says that it is really important to embrace failure and rejection. It is something that we all know, but always need to remember.

On my bedside table

This is what I have been reading during the last month:

• The Responsibility Revolution: How the next generation of business will win by Jeffrey Hollender and Bill Breen. Jeffrey Hollender founded a company called Seventh Generation, a household-products business with an environmentally friendly culture and lots of eco-cred. In this book he explains how responsible companies view environmental ills and assorted global crisis as opportunities to innovate and orient their operations around doing better. What I really like about this book is that it has so many different case studies from Marks & Spencer to Nike and from Patagonia to Triodos. If you are thinking of starting some sort of environmentally friendly company, you should definitely read this book.
  
  
• History Lessons: What business and management can learn from the great leaders of history by Jonathan Gifford. This is a comprehensive collection of management lessons based on historical examples. It covers everything from planning (Napoleon Bonaparte) to making things happen (Oliver Cromwell). There is a nice chapter on how to take the offensive (Saladin) and another on how to create opportunities (Genghis Khan). Not only will you learn about running a successful business but there are some very interesting history lessons in here too!
  
  
• Mojo by Marshall Goldsmith. This book explains how to get it, how to keep it and how to get it back if you lose it! What are we talking about? Mojo! In other words, “the positive spirit towards what we are doing now that starts from the inside and radiates to the outside”. Yes, yes it is a little bit airy-fairy but I have to say I found this book very useful and surprisingly inspirational.
  
  
• Obliquity: Why our goals are best achieved indirectly by John Kay. The thesis of this book is simple: complex goals are best achieved indirectly, or obliquely. Kay maintains that this extends to every area of our lives: happiness is not achieved by the pursuit of happiness; the most profitable businesses are not the most profit-oriented; and the wealthiest people are not those most concerned with the pursuit of wealth. Kay is an excellent writer and has lots of inspirational ideas to communicate. Well worth the £9.99 cover price.

Beware of factoring

One of my best friends, James, has just decided to factor his invoices. As he had already made the decision and signed the contract, I said nothing but secretly was filled with grave misgiving. James’ business – a self-storage company – waits an average of 45 days for its customers to pay. Under the deal James has done he will now be paid within seven days. Great, you might say. Times are tough and by getting his hands on the cash sooner he may be able to weather the current recessionary storm. But I think that if James can’t wait 45 days for his money there must be some serious underlying problems with his business. He thinks cash flow is the difficulty… but I suspect it is sales, pricing or overheads. Anyway, I shall try to talk to James about his business in a casual way over the next few weeks. In the meantime I just want to highlight why one wants to be terribly cautious when it comes to factoring.

Perhaps we should start with a definition. The practice of factoring (or invoice discounting) involves a finance company (or factor) that advances you money based on it buying your receivables at a discount; your customers pay the factor the full value later, when the bill is due. Factoring gets you cash in hand immediately – but at a steep price. Factoring fees are much higher than the interest rates charged by a commercial bank. Fees are quoted by the month, so a typical 2% fee is actually equivalent to a 24% annual interest rate.

Dealing with a factor can also be much more difficult than with a commercial bank. Banks are highly regulated, offer competitive rates and standard services, so you know, with few exceptions, exactly what the cost is going to be. But factoring is very fragmented. It is less well regulated and the quality, reliability and integrity of factors can vary widely.

More and more entrepreneurs are turning to factoring despite it being expensive and risky because it can be the only way to get their hands on cash. If it is the route you decide to pursue, due diligence is vital. Here are a few tips and questions you should ask yourself:

• What is the duration of the contract? The shorter the better. Ideally, you want something that only goes from month to month so that you can switch to less expensive financing as soon as possible.
  
  
• Can you negotiate? Some factors will allow you to renegotiate a contract… others insist on standard terms.
  
  
• Must you provide a personal guarantee? Obviously, you want to opt for a company that is willing to lend to you without a personal guarantee, although such a guarantee can bring down the cost.
  
  
• Will the factor take possession of your receivables if they are uncollected? This is a very sticky issue. What happens to those bills that never get paid? In many cases factors will ask you to repay the advance they have given you.
  
  
• Do you have to factor all your receivables? Cash flow and collections can fluctuate and some weeks or months you may not need financing. Do you have to finance all your receivables or can you only do it when you want the money? Single-invoice, or spot, factoring allows you to opt out.
  
  
• Is there a minimum or maximum sales requirement? Some factors require a certain sales volume. If you are not within the limits, you may lose your financing – so the fewer restrictions the better.
  
  
• If you do decide to factor, for heaven’s sake work out how you are going to be able to afford giving it up. In other words, have your exit planned before you enter into any sort of arrangement.

Four free online tools

Regular readers will know that I am currently obsessed with the whole business of outsourcing all functions so that one can run a virtual office. And the large number of collaborative tools available online makes this so much easier. Tools that have absolutely no cost! Here are four of my favourites:

• Drop Box gives you two gigabytes of storage space on its servers which you can access from any computer. The service also makes it easy to share presentations and spreadsheets. Think of Drop Box as your virtual hard drive.
  
  
• Base Camp. Base Camp is a project management tool that helps users keep track of shared tasks, due dates and time spent working.
  
  
• Yammer. Yammer resembles Twitter, but is totally private, thus only your employees can see what you are posting.
  
  
• Gmail and Google Docs. Google’s suite of office software is easy to use, can be accessed from any computer and is totally free.

Good product ideas

Below is a round-up of interesting products that I have spotted on my travels. I cannot guarantee that the manufacturers won’t already have found international trading agents… but all of them are, in my opinion, worth investigating further. What’s more, even if the existing manufacturer might not be interested in dealing with you, you might like to look for a competitive product instead.

Alternatives to traditional battery chargers

One of the most infuriating aspects of modern portable technology is that every product/manufacturer seems to have a different sort of power cord. As a result a growing number of companies have been developing products that make the power cord itself redundant. Here is a quick rundown of companies with power innovations worth getting, if you will excuse the pun, charged up about:

• Powermat. This mat uses magnetic induction to charge any mobile device.
• Coolpod. A six-port wheel that allows a single power cord to charge as many as six phones or other devices simultaneously.
• Fueltank DUO. A portable, cordless power pack that charges two devices and holds enough power for about seven full cell phone charges.
• PureEnergy Solutions’ WildCharge Pad. The WildCharge Pad is like the Powermat that uses conductive metal on metal charging rather than induction.
• WiTricity. The WiTricity Corporation is developing wireless electricity technology that will operate safely and efficiently over distances ranging from centimetres to several metres, and will deliver power ranging from milliwatts to kilowatts.

On-the-go products

While I am on the subject of power, here are four solar gadgets that I like the look of:

• IOGEAR Solar Bluetooth Hands-free Car Kit. A Bluetooth speaker phone that mounts on a car’s windscreen and gets a charge from the sun even on overcast days. It can come with a visor clip so that you don’t have to put it on to the windscreen.
• Voltaic Generator. A bag containing a large solar panel on one side that produces enough energy to charge a laptop. Compatible with most computers.
• Solio Rocsta. Made from hard plastic, this solar charger can survive being knocked around. It is slow but it does allow you to charge phones, iPods etc. while on the go.
• Casio Pathfinder Solar Watch. A water-resistant watch (up to 100 metres) that includes all the usual features but is charged using either sunlight or florescent light.

Two great gadgets

• 3M – a company you don’t hear much about nowadays – has produced an interesting battery-powered, pocket-size projector that allows you to present a bright 8- to 50-inch image on anything from the wall of an office to the back of an airline seat. It includes as much as three gigabytes of memory and adaptors and software that allow you to project everything, from your PC’s desktop to films. Obviously, 3M has got international distribution sewn up… but it can’t be long before other firms begin to bring out similar products, possibly at a lower price.
  
  
• There is a wonderful new clock called BringTim. You will find it at the website www.bringtim.com. What makes it so good? It allows you to work out how much money is being wasted during unproductive business meetings. Basically, the clock displays the cost of every second of a meeting in progress based on the number of attendees and their average salaries. Tim, by the way, stands for Time Is Money.

The future is 3D

Bwana Devil, the first ever 3D feature film, was released in 1952 and tells the story of two man-eating lions. Well, cinema has become more advanced since then in all sorts of ways but actually, as anyone who has seen Avatar will testify, we are still using 3D. There is a difference, however. Three-D is going to become more popular in home entertainment systems. This, in turn, means that consumers are likely to want to get rid of those horrible paper 3D frames and switch instead to something more stylish and permanent. Manufacturers have already anticipated this and are starting to produce designer 3D glasses. Three different companies are in the business:

• Look3D.com
• RealD.com
• 3Dglassesonline.com.

Have they, I wonder, all found international distributors?

Back to basics

Believe it or not, over $1.5 billion a year is spent in America alone on the most unlikeliest of products… flip-flops. To give you an idea of how popular they have become there is even a newly started up retail chain that only sells flip-flops and sandals called, not very originally, Flip Flop Shops. The demand obviously exists and I am wondering whether now wouldn’t be a good time for me to look at possible sources of supply. I suspect that flip-flops are a hot new trend that is already happening and which I may have missed.

Second-hand robots

I was very interested to read about a production company, Autofuss, that bought three industrial robots at recession prices and reprogrammed them for use in its TV studio. The robots came from a car company that had stopped production. It made me think that there must be other uses for unwanted robots and that there has to be a market for someone who is interested in buying and selling them.

I want one of these!

If you visit YouTube, you will see there are lots of videos that show you how to pick a lock with everything from a paperclip to a windscreen wiper blade. Most of these rudimentary techniques only work on a small number of pin-tumbler locks. What do you do if you want a more tried and tested system? The answer is the Southord E500XT Electric Lock Pic. Pin-tumblers use five or more pins to prevent the lock’s central cylinder from turning. The E500XT pushes the pins up and out of the way. The process usually takes less than 30 seconds. The cost? Around £120. The life of a locksmith (or a life of crime) may be beckoning.

You heard it here first

I have just heard about a hot new building product that I suspect is going to be the way forward. It is basically a brick made from mycelium, the fibrous material of mushroom roots. Obviously, this makes it very environmentally friendly. Mycelia from some fungi can produce bricks as strong as concrete and is as insulating as fibreglass. Architecture built with mycelium is called Mycotecture. I haven’t been able to find any manufacturers, yet, but I am certain that this is going to be a hot new product area.

New business concepts

A huge, new and untapped global market

Every year students in the English-speaking world spend an estimated £20 million on textbooks. However, printed textbooks may soon be a thing of the past. Thanks to laptops, iPad and other electronic readers, ebooks are slowly taking over. Indeed, a number of publishers have already started to sell e-textbooks. The four main leaders are:

• CourseSmart. This is a joint venture with five publishers including McGraw-Hill and Pearson. So far they have a staggering 10,000 titles.
• Café Scribe. Owned by Follett, a company which manages over 860 university campus bookshops, Café Scribe has 8,000 titles available to readers.
• Scroll Motion. These publishers only have 13 books available but they are all designed to work with iPhone, iPod Touch and iPad. Basically their plan seems to be to work with traditional publishers and to convert existing books to electronic form.
• Entourage Systems. This company has designed and manufactured a reader, and plans to make other people’s textbooks available to its customers. As a result, it has no titles of its own.

Although some 18,000 books are now available to students, it is clear the market is seriously underdeveloped. What’s more, it may be years before the big players begin to think about all the small, niche markets available. If you are looking for a new business concept that has the potential for vast, international, revenues, this could well be it.

Online piracy turns TV rubbish into gold

The website Everything Is Terrible! is only three years old but is already turning a huge profit. It was initially launched so that a small group of video fans could share unintentionally hilarious discoveries. Their found-footage clips became extremely popular on sites such as Boing Boing and the Huffington Post. Now the Everything Is Terrible team has started producing exclusive content for any number of popular websites. What they do is gather excerpts from old television programmes, exercise tapes, B movies, infomercials and so forth and cut them together for maximum laughs. Since much of the raw material is only available on old videotape, they have had to move fast to find and preserve recordings as independent rental shops evaporate. One of their most popular clips is called ‘Infomercial Hell’. Anyway, what Everything Is Terrible is doing is using free material to create substantial profits. Candidly, anyone with a small amount of Web knowledge could be doing the same. What a brilliant way to make money.

Books are dead. Long live books!

It doesn’t sound a very exciting business but when you get a moment check out www.mckenziebooks.com. It was started by a student called Jim McKenzie, who recently told his story in a business magazine I found on the seat of a train to Birmingham last week but stupidly failed to keep. This, more of less, is what he said: “I was going to university and at the end of the term I was in line at the book store there where they had a buy-back policy for unwanted textbooks. I noticed students were trying to sell back their textbooks, but that the bookstore wasn’t buying all of them back. Upset, many of the students began throwing their books away. A bench off to the side of the room basically became the dumping ground for the cast-off books.” McKenzie eyed bright-green economics books, “which I took back to my apartment and later listed for sale on Amazon. I sold the books, which I had picked up for free, for $80 a piece on the site and… I had the idea for a business, which I called www.cash4books.net.” Now McKenzie sells a staggering 13,000 books a day and turns over roughly £7 million a year.

Incidentally, speaking of bookshops, I was recently told about a second-hand bookshop in a town called Maplewood, New Jersey which unable to make book selling profitable has added a training centre. Basically, the shop had set up a facility that helps people with autism learn retail job skills and move on to larger companies. It now employs ten people to run this facility and, as a result, the bookshop itself is once again making a profit.

A T-shirt business with a difference

When you get a moment, check out www.verymeri.com. It is, as you will see, a T-shirt company. But a T-shirt company with a difference. VeryMeri uses slogans devised by primary school children. Before you pooh-pooh this as an idea below your consideration let me tell you that it is turning over a million quid a year.

Move over Turnip Townsend

I remember very little of what I was taught about the agricultural revolution at school (vaguely the name Turnip Townsend sticks in my mind) but I remember enough to know that a second agricultural revolution may well be under way right now. I am talking not just about the use of new agri technology but also about the new marketing methods being employed by savvy farmers. I think there is money to be made here for quick-witted entrepreneurs with an interest in… um… turnips. To give you a few clues:

• Visit a site called FoodHub. This is where wholesale food buyers log on to access thousands of small and regional producers as well as information on all sorts of food- and farming-related topics.
  
  
• Visit a website called LocalDirt. Again it is a website that connects local farmers with food buyers including restaurants and grocery shops. The website posts information about local farms across the country, including profiles of the owners. The website charges an annual fee to its producers.
  
  
• Go to New York and visit the new Gotham Greens hydroponic rooftop farm in Brooklyn. The eco efficient farm will take a small bite out of the $2 billion in produce that is trucked into in the city each year. It cost £2 million to build but it is anticipated that 40 tonnes of crops will be grown there every year.