A tale of two sales

Last year my wife and I had the holiday of a lifetime in India. It was a wonderful experience with fantastic monuments, history and culture, great food and the warm and friendly people.

We came back with lots of stuff we hadn't really intended to buy due in no small measure to the local merchants' talent for selling.

The format usually went something like this. We would have a morning's sightseeing with a local guide. On the way home he would invite us to drop in at a local merchant - jeweller, potter, fabric trader etc. Let's use the jewellers as an example but the experience was similar, whatever the trade, 'Would you like to visit a local jewellers? The owners are very nice and they have a workshop on the premises which they will be happy to show you'. 'Why not?, we thought. There was no 'hard sell', we were free to say no but we usually opted to have a look around. We were greeted by the owner and several others at the entrance and warmly welcomed. Masala tea was offered and we were invited to look around the workshop. We had a personal tour and were shown the journey from raw gem stones, through cutting to designing and manufacture of the jewellery. Nothing was too much trouble. Lo and behold at the end of the tour we ended up in the jewellery shop. More tea was brought in and we were asked about our holiday so far. 'Would we like to see some jewellery?' No one asked us to buy anything but somehow we just did. Not things we needed or had planned to buy but presents and mementos from an enjoyable trip.

Let's contrast this with a trip to a carpet shop at home this weekend. We are in the process of redecorating our house. My wife has thought very carefully about the decor, we just needed the carpets and wanted advice on what to buy. We were ready to be sold to. We had a budget (well sort of) and a deadline. A couple of sales people were sitting down as we entered. We were welcomed and shown a few samples and basically left to potter around and well...leave. We had lots more questions, we wanted some ideas, some input, to let us know what was possible. A cup of tea and a chat would have been nice.

Ok so it's a different situation but I think illustrates a point. In India we had not intended to buy but were shown the possibilities and buying was made easy. So we bought. In the carpet shop we were ready to spend. We had the money ready and wanted help. The kind of help we wanted wasn't forthcoming so we didn't buy.

Off to a new carpet shop today so will see how that one goes...

www.base52.co.uk

A case for outsourcing

In the early days of running a business, often the business owner does a bit of everything. Looking after customers, sure, but doing the accounts, paying the bills, fixing the computer, cleaning up, sorting out problems and anything else that comes along too. The phrase, 'Chief cook and bottle washer' describes it well. From the interesting and important stuff to the plain boring and mundane, it all needs to get done...somehow.

As the business grows the business owner might start to bring in help. They then need to decide what tasks to let go of and what they need to keep hold of. Michael Gerber's, 'E-Myth' describes this dilemma well. He advocates that over time the business owner should delegate the 'technical' stuff and in due course, the 'managerial' stuff and end up being the entrepreneur who develops and guides the business. It's a difficult journey and many don't stay the course. Many stay stuck in the mire of dealing with technical matters, often where they are not an expert and fail to focus on developing their businesses.

A good solution can be outsourcing. Outsourcing is passing responsibility for a set of tasks to an external party, usually a specialist in this line of work. There are many advantages but these include:

• It's often cheaper than employing someone to do this work for you as you only pay for the support you need
• They are are experts and have the knowledge and resources to do the work better than you can
• It's scaleable - as you grow or contract you can adjust your level of support accordingly
• It leaves you to focus on the entrepreneurial stuff

 It's almost a no-brainer but I see many businesses of a reasonable size who deal with their own IT (if something breaks they get someone in to fix it), have no HR back up, do their own marketing (when they get time) and yes, do their own bookkeeping, payroll and VAT, not always in the most effective way

Since starting Base52 we made an early decision to outsource IT and HR support, website maintenance and aspects of marketing. I've never regretted this. It's a monthly overhead but I feel it is an essential cost of 'doing business'. Similarly we offer an outsourced accounting service to many of our clients covering bookkeeping, VAT, management accounts, payroll and well as year need compliance. I believe this arrangement works very well and many of these clients have stayed with us for many years on their business growth journey. 

I found this quote from a chap called Alphonso Jackson, 'The other part of outsourcing is this: it simply says where the work can be done outside better than it can be done inside, we should do it'. 

I think that's pretty good. Cost is also a factor of course (you'd expect an accountant to say that) but if it's affordable, I'm a big fan.

Outsourcing at Base52