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There’s A Biker Gang In Your Supply Chain
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Articles

There’s A Biker Gang In Your Supply Chain

June 1, 2020
-
Posted by admin
https://ianwhitworth.net/wp-content/uploads/2020/06/Bikies.mp3

Audio version 6 mins or listen on Spotify


The Problem With Business Advice

 

There’s a problem in the business world and it’s advice on how to do things from people who have not done those things.

Let’s consider a company I’ve known for a long time. Based in California, they do office designs and refits. Two joint owner/managers. One of them, Hannah, was the hands-on operator, talking to customers, quoting projects, supervising the staff and making sure projects were executed to the right standard.

The other one, Karen, was the ‘big-picture management’ woman. She didn’t touch much of the day-to-day stuff. A qualified accountant, she spent a lot of time mingling in the big end of town and getting herself out there on the socials.

She was involved in a swarm of business associations. She sat on boards. She presented very well, and gave people plenty of advice. People sought her out and lapped up her wisdom. After all, she was a successful business owner.

The company was a dominant player in its sector, with strong margins, high cash flow and low debt. Karen became convinced she was the real genius behind its success.

 

Karen knew all the success words

 

So much so that she decided to buy Hannah out. The deal went through early last year. Since then, the business has developed rocketship momentum. Toward the ground.

In less than a year, Karen’s solo achievements include:

• Making most of their projects unprofitable because of the cost of returning to fix errors
• Losing 10 out of 12 of their full-time staff because they weren’t getting paid on time
• Not paying any of their suppliers and contractors, so they can’t get credit anywhere

I could write another 3000 words on the madness, but let’s keep to one story that maps out the state of Karen’s brain.

 

Satan’s Scavengers: For All Your Freight Needs

 

If you needed a freight service to move a bunch of fixtures, would you choose:

a) The one that everyone in your area knows is owned and operated by an outlaw bike gang, or
b) Literally any other option

OK let’s be charitable and assume you dialed the wrong number so now you’ve engaged Satan’s Scavengers to move your stuff. Do you:

a) String out their payment with a litany of excuses, or
b) Pay them as soon as fucking possible

You’re thinking: Karen, enough with the (a) choices, this is not a King Solomon level of decision difficulty. But no, she’s got more jobs to execute and some expensive equipment to move. Equipment that is owned by the client. Does she:

a) Call the bike guys AGAIN to do the move?
b) There is no (b), you know how this ends

The equipment is now in some razor-wire meth lab compound, awaiting payment of the original invoice plus interest payments at special Bank Of Bike Gang rates.

 

Bad business advice can lead to all kinds of weirdness

Derek from Accounts Receivable would like to remind you of agreed payment terms

 

Why Non-Compete Clauses Exist

 

How’s Hannah going? Pretty well, because certified business genius Karen and her legal team didn’t include a non-compete clause in the sale contract. The most standard of standard terms in that sort of agreement, and one that left the gate so wide open you could drive a combine harvester through it.

Which Hannah, after a nice holiday, did.

Her new business is going just fine, thank you, doing exactly what she did before. She hasn’t approached a single client or staff member; they’ve all sought her out.

There are so many people who sound plausible telling you how to run your business, even though they’ve never done it successfully themselves. They have no hands-on experience in creating businesses, they just say empty managerial words. And are happy to take money for their shallow advice.

So many people turn to business coaches now. Some of them are good. Many are never-quite-made-it real estate sales people whose qualification is printing a business card saying Business Coach.

Then there are the people who like to sit on SME boards because that’s a prestigious thing on their LinkedIn.

 

Do Your Background Checks

 

Check their credentials, folks. Not how they seem. Ask for a list of businesses they have started, managed and sold. Ask for references from clients and staff who worked with them. See how long since they’ve been actively involved in the business world.

Check their backgrounds like you would if you were giving them the access codes to your bank account.

Because that’s effectively what you’re doing. Bad advice will cost you piles of money, and worse, years of your life.

(You may be thinking hmm Ian, why should I listen to this advice you’re giving me right now? Fair question. My partners and I have a national group of businesses with very pleasing revenue and profit growth every year since we started it in 2006, except for the current unpleasantness. I don’t want your money. I just like writing.)

The same applies to more casual sources of advice. Even if you finally manage to get your business hero to meet up for a coffee, don’t change your whole business because of what one person says.

Their advice might be right for them, but wrong for you. Get multiple points of view.

And if you owe a bike gang money for whatever reason, please: stick to the agreed credit terms.

 


 

Last week I interviewed Shoes of Prey founder Jodie Fox on our Saxton/Scene Change Fireside Chats. She is super-smart, thoughtful and honest, we spoke of how they built a company culture that stayed strong through all kinds of setbacks. And lots more. It’s well worth a watch:

 

 

If you’re new here I write a story like this each Tuesday, drop your email here to get it sent direct.

 

June 1, 2020

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1 Comment

on There’s A Biker Gang In Your Supply Chain.
  1. David Jamieson
    June 2, 2020 @ 8:41 am
    -

    Good listen Ian,

    ‘Kill all MBAs’ comes to mind…

    David ?

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