Guaranteed to give you 20% return on £100,000 inside one week - Tax Free

I have your interest.

Of course, I would judge the timing of the investment but you could pledge to buy shares in my scheme and then I would call on the money at my time of choosing. Exactly one week from the point at which the money is paid, I will return all the capital of £100,000 plus a further £20,000. To boot, there is no risk, I will guarantee your money back.

At this stage it is a mere Thought Experiment but how real it becomes depends on the interest. I would need exactly 1,200 subscribers into my scheme who would each pledge to pay the £100,000 at a time of my choosing. As I have said, exactly one week from the call on the cash, I will return £120,000 - tax free.

How can I do it? Well that's the genius behind any plan. I won't tell you.

I could offer subscriptions in my idea but that would cost everyone who wanted to buy a share in the idea, exactly £1,000 but that would be on a normal share risk basis. In this instance, the idea is worth nothing, the execution is worth everything.

So to be clear, 1) I have a scheme which people can invest £100,000 into and I will guarantee them a 20% return in one week, tax free, and 2) the idea behind the plan has a share subscription where each share is worth £1,000 and these can be bought into under a normal risk-reward basis of any investment - there will be 1,000,000 shares on offer.

In neither instance am I obliged to tell you how the scheme works nor its plan.

Anybody interested in principle? Go to http://www.calxeurope.com/contact_us.html to register. This is not a scam, it's a bit of fun.

Is Over Estimating Your Business' Capabilities Wise?

BT have had a couple of really naff years and I wouldn't want to be in Ian Livingston's shoes. 10 months into the job and he just has announced the second round of 15,000 job cuts, making a total of 30,000 over the last 12 months.

BT lost a fair packet last year but it was the big write offs on Global Services' contracts where they took the big hits - over £1.6bn of them. I remember being chided back in the 90's by one of their executives for referring to them as British Telecom - 'we are no longer British,' he said, 'we are international.' I wanted to ask him what the 'B' stood for then, but decided it was inappropriate.

The fact is that BT went on an international business expansion during the web 1.0 era that nearly ruined the company. They managed to get some sense back after some dumb acquisitions as they fancied themselves as an 'incubator' too. However, as they got their finances in shape, they took on a number of high profile, over-ambitious senior executives who saw the pots of cash BT took every single minute and decided this was a great way to massage their egos and transform a sleepy telecoms giant into an international services company that could manage anything from communications to massive infrastructure contracts at the NHS and far further afield.

The expansion was rapid and fun. Instead of taking on new staff they hired in rafts of contractors and as we speak they account for up to one third of the staff involved at BT. That is a staggering management issue let alone a potential nightmare. The more ambitious their contracts, the more contractors they needed.

Then the contracts became more complex and the deliverables harder to achieve and so the payments against them were minimised. Suddenly, BT had invested all the upfront costs to do these big projects and were getting little in terms of payment out of the customers. Yet they were booking the contracts to revenue and paying their staff their commissions and bonuses plus the contractor fees.

It was a time bomb. This week we see the whole thing blowing up. While there is still a strong underlying cash business there in traditional telecoms, the problem is that there is little you can do to unravel such complex services contracts one you are in them. You have to grit your teeth and get them done. That remains an issue to BT as the total cost of getting it done is now unlikely to show any of the profits they had hoped for.

It's a salutary lesson in how not to expand your business by over estimating your capabilities to your customer. This applies to companies of all sizes. There is no point, for example, in taking a services contract in New York if your base is in London - sooner or later the smallest of issues, or possibly the biggest, will catch you out and your entire profit could be wiped out fixing it.

How do you know that? Because that's what happens just 100 yards from your doorstep - problems absorb your time and resources no matter where they are. If there is a plane trip involved to fix it - then you are asking for trouble.

BT has illustrated that this happens even on the largest of scales. The trick is always to build capability to a point where you have a critical mass that allows you to apply your over-capacity into other areas, and pick those on a case by case, risk vs profit level.

Don't get seduced by the big numbers up front as it is always the ones at the back end that hurt.

Deal, No Deal

OK, so this is another blog entry about the recession but, before you switch off, it isn't all gloom and doom.

One of the biggest competitors in sales generally is losing out to the 'No Decision' - the idea that your customer weighs up all the factors and competitors and decides whatever it already has will do for now. In a recession, this becomes ever more prevalent. You can sometimes present a cogent and compelling ROI case that even a mathematically challenged mouse could grasp and still your customer chooses to carry on using their old, tried and trusted methods even though they may actually cost more to do so.

You see, in a recession, when people's jobs are on the line, sometimes it pays not to be the guy who makes a bold decision and invites change because the simple reason is that it attracts attention and has the burden of accountability associated with it. It means that one slip up in the implementation, miscalculation in the ROI or delay could cost a lot - including the decision-maker's job. There is every good, but illogical reason to postpone decisions until the organisation is more confident and better off.

No Decision - Sound Business Acumen Or Stupidity?

Very often in recessions people mistake cutting costs and getting value for money. I have fallen into the daft trap many a time like when cutting a few hundred pounds on stopping staff end of month pizzas and sacrificing a piece of goodwill - I found out later that people do not forget and a simple, low cost thank you for their hard work went a long way. When a company goes into cost cutting mode, logic tends to fly out of the window and decisions get postponed or cancelled. After all, why would you increase cost when you are trying to save?

It's why I keep banging the drum about planning for a recession as if you don't plan ahead you put your company into the hands of cost cutters and at that point you rarely are looking beyond the short term. There is a thin line between making cost cuts to save a business to having not enough resources to take advantage for the future.

Compelling Factors

It means in times of recession when selling you have to be both pragmatic and innovative.

1) The first thing you need to do is to look at who you are trying to sell to and their current state. There is zero point wasting time trying to sell to companies who are in high cost cutting mode, look for others where you can achieve your success. A hard, cool-headed review of each salesperson's sales pipeline is the first starting point - make sure their forecast is realistic and that any customer in trouble is removed - don't chase shadows.

2) Take a long hard look at your Value Proposition and what it actually does to companies in terms of saving cost or producing a return. Do not be esoteric or have 'soft dollars' in there and don't make assumptions without foreknowledge - it has to be instantly measurable and applicable to that specific company you are selling to. If it cannot be easily understood then you are on to a losing battle and the essence of it has to be delivered in no more than a few sentences and must trip off the tongue of every employee not just salespeople.

3) Make your Value Proposition your mantra. Your Value Proposition may make sense to you but to customers in 'panic mode' it may just be 'noise'. Test it on people, kick it around, take feedback and adjust your thinking to accommodate. Make sure you cover off the obvious and not so obvious questions and rebuttals. Make sure everyone knows these almost verbatim. Practice delivering the Value Proposition message amongst yourselves until it comes as second nature.

4) Apply innovation. Inevitably customers may be reluctant even to hear common sense, so put yourself in their shoes - ask 'what would make me get off my seat and listen?' Inherently, the issue will be risk - if the customer makes the decision, are all the ROI expectations and assumptions real or just hopeful?

Think about how you can mitigate, alleviate or share the risk.

If your product or service has the capacity, make the cost dependent on the results in some way, perhaps in a performance related model, i.e. charge a certain price now and when the gains are delivered, then you get more of the price paid plus some extra. Get the idea of discount out of your head and think about 'sharing the pain and the gain' where possible.

5) Try to create a 'Compelling Event' as Target Account Selling call it. This is the concept of creating a point in time when there would be a detriment to the customer if they do not take your product or service - the price of inaction. It may be something as simple as for every day they do not implement they are paying £X thousand pounds in costs they should not have to. There are risks to this as there has to be a cost to your solution and the deliverables may not be instant but in many cases they are. If you can pin the Compelling Event as the next Board Meeting or similar you can accurately predict the cost of 'No Decision'. Be wary though, this can backfire if you do not have all the facts. If there are stakes in the ground like legislation coming into play it may be better.

6) Leave no stone unturned.

So often in sales, it is what you don't know rather than what you do know that determines whether you win the sale or not.

Politics, power bases, vested interests, agendas and timing can all play heavily. It is important to poll all the key players in the decision making process and in detail understand their agenda and ensure your solution hits their hot buttons. Leaving things to chance or in the hands of your champion alone may actually play against you if the politics are not right. In a recession, many things can happen quickly and the most obvious is that your coach or sponsor could actually leave through their own accord or by other means. It pays to get round all the stakeholders and sell your solution and its benefits high and wide.

7) Replicate success and analyse failure.

Failure can be your friend - you need to understand why you failed in order to create success.

Make sure you ask your customers for a detailed answer as to why you failed - price is a stupid response because price can be a small factor in an ROI equation so make sure you get the real facts. Then address the reasons for failure and incorporate the answers into your Value Proposition or indeed, if you feel you cannot address the concerns of that type of customer, make sure you do not try to sell to more of the same; keep away from repeating failure. When you find success, make sure you understand why you succeeded and then replicate the success in as many similar customers as you can.

8) Do not stand still.

The worst thing that can happen in a recession is that companies become complacent that things are going ok.

We have seen the frightening speed at which this recession can strike seemingly impregnable household names. All too often when you analyse your business you will find an approximation to an 80-20 rule defining how your current business is generated. If you really understand your business you will know that if 20% of your customers produce 80% of your revenue or profit then it is obvious that even the loss of one major customer could be the difference between surviving or not, and the smaller the company you are the harder such losses hit. It means you have to up your work rate to keep existing customers happier and find more and more new ones.

Recessions are not for the lazy.

9) Talk to people.

Make sure your existing customers know why they buy from you, check if they are happy and are getting enough from you.

If you can, solidify the relationship by getting agreements in concrete or even opening negotiations ahead of schedule. This may sound barmy if you are not far into a new contract but if you are inside 6 months to the contract renewal, you can bet your bottom dollar your customers will be actively looking to reduce costs and so if you are proactive in addressing this it can swing to your favour. Look early to find innovative ways of perhaps offering something for renewing the contract EARLY but in return for LONGER or a crack at more business within the customer. Think ahead.

10) Make sure all your staff are bought in.

Recessions are tough times and innovation and extra activity will mean uncertainty and worry.

Make sure your staff are part of the solution by getting them to contribute ideas and parts of the Value Proposition. If they know the score early, they will be that much more bought in. Your staff are your most precious assets at all times and never more so in a recession - only cost cutters see them as numbers on a spreadsheet, you need to see them as your weapons to survive and thrive.

Recessions are mean old beasts and customers do all sorts of irrational things. Think one step ahead, be innovative, work hard and above all sell smartly.