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5 things I have learnt about running a business
Alan White is the founder and Managing director of the Fresh Group. The Fresh Group consists of; Fresh Logistics, a temperature controlled couriers working many major brands throughout the UK, Europe and worldwide.
Fresh Pharma, which undertakes temperature controlled transportation for pharmaceuticals, biotech, medical devices and research, working with some of the biggest pharmaceutical businesses in UK and the NHS.
Fresh Fridge Hire, a refrigerated vehicle hire business based in Derby.
Finally, the East Midlands Logistics Centre (EMLC.space) which is an office and conference room complex based in the Olivetti building in Derby, offering both long & short term rental of office space for businesses & events. The building itself offers an inspirational environment in a building designed by Royal Medal winning architect Ted Cullinan.
Fresh Group was started in 2009 in Alan's study at home. That year the business showed a loss of £25k. In the following 5 years the Group grew on average c260% per year (560% at one point) with all profits being reinvested in the business, enabling the business to operate debt free. The Fresh Group now has a T/O of c£2.5m and employs over 150 people. Fresh Group was the first business in the industry to gain the Living Wage accreditation.
Away from Fresh Group Alan is a keen rugby player, having played for Wasps in his youth. He currently enjoys playing for his local rugby team, Derby Vets. Alan has brought many of the values that he has learnt through his life in rugby to his business.
The five key things that Alan has learnt in business are:
Focus and effort must be placed on the business life blood, which is cash flow. On the whole, larger companies are worse at paying in a timely manner and will happily use your business as an extended credit facility if allowed. It is a fine balance between administering charges that can potentially sour a business relationship and ensuring that your customer understands that invoices must be paid on time. Start communicating early about payments, so as to ensure that there are no surprises when late charges are applied.
Profit is Sanity
All businesses ultimately fail due to the lack of profit. Try to keep a ‘steady mix’ of different customers, sectors and industries so as to dilute your business risk. ‘Turnover is vanity, profit is sanity’ is a fantastic mantra to keep in the forefront of your mind with every new customer and project. We use a BCG matrix model to identify opportunities with new customers and projects. This sets the profit strategy, and depending on our assessment of the business opportunity, we may reduce our profit to move the project along, or charge a full market profit.
No Black Holes
It is imperative that you understand all the different idiosyncrasies within your business. I am not saying that you should know all things intimately, but you must understand the inputs and outputs required and their effect within the business. Do not create ‘business generals’ that can destabilise the business upon their departure. Ensure that the systems are as logical and streamlined as possible. If the functional output is useless or academic, remove them.
Never Accept PPP (Persistently Poor Performance)
If you have worked in any large business, you would have witnessed someone who is failing being moved to another department or site. As with all natural systems, your workforce will operate and take the easiest route. This means the lowest common denominator will set the standard. Accepting persistently poor performance has a massive impact in the business, the loss of workforce efficiency, customer satisfaction, staff not going the extra yard, inability to win the hearts and minds of employees, employees resigning and staying and, ultimately, building a team becomes extremely difficult.
Don’t Offer One Dimensional Products or Services
Offering a one dimensional product/service is usually just chasing the cost curve. In business, the only real hard measure is cost. Every other measure is a soft measure and often ignored or not taken seriously.
Be different and offer a balanced product/service. Focus on service, cost, quality, innovation, loyalty and confidence, to name a few. Ensure that you are delivering a ‘fantastic’ product/service all the time. When you chase the cost curve, the only output is that the cheapest supplier will keep the customer until someone else comes along and offers it cheaper. Sometimes it is very tempting to offer ‘same here’ products and service - Don’t "paddle the same canoe"! Always ensure that you are not just copying your competitors and just making it cheaper!
Be innovative, drive the agenda, and ensure that you deliver the objectives. Be realistic and never offer a one dimensional product or service. Customers will need cultivating as well, to get the buy in. Once they have experienced the balanced approach they will recognise the worth. This takes consistently high levels of energy and drive to ensure you are the best in the market. Always try to give ‘added value’ especially when it is zero cost to your business. In line with that I have included a 20% ‘bonus advice point’ free of charge to this article.
FOC - Strive to Become the ‘Employer of Choice’
Have confidence in your capability. If I had a quid for every time that I have had unsolicited advice from hourly paid and salaried people throughout my business career, I could retire. Logistics is notoriously a poor pay and poor conditions industry. We took the decision in 2013 to be the first business in our industry and sector to pay the ‘Living Wage’. We pay our workforce for every minute they are at work. This is smart business acumen in a declining workforce market. We run several bonus schemes like our ‘wow' bonus when a customer phones us to say how great our guys are and we also run an Instagram competition where a customer picks the best in situ photo taken by our workforce every month. We also pay a 10% p.a. bonus when targets are achieved. Furthermore, our management team have a ‘spot recognition’ mechanism that rewards success immediately (public presentation of a bottle of champagne, a meal for two etc). Our staff retention and attraction is amongst the highest in our industry.e lack of profit. Try to keep a ‘steady mix’ of different customers, sectors and industries so as to dilute your business risk. ‘Turnover is vanity, profit is sanity’ is a fantastic mantra to keep in the forefront of your mind with every new customer and project. We use a BCG matrix model to identify opportunities with new customers and projects. This sets the profit strategy, and depending on our assessment of the business opportunity, we may reduce our profit to move the project along, or charge a full market profit.
Offering a one dimensional product/service is usually just chasing the cost curve. In business, the only real hard measure is cost. E