Tag Archives for Business and Economy

Go for value and not cheapest to sell beds

Cars are sold by franchise and so you know what brand you want but visit the dealer to decide the model and extras.

For beds we visit large shops such as John Lewis and the beds are all laid out for us to bounce on and compare.  So to be winners like the Myer brothers you need a passion for your product.  Most beds are bought by women who understand value, whereas cars are bought by men who are only interested in “size”.

So when manufacturing beds you need to concentrate on the things which give your product value in a given price range.  Take the lazy route and you will buy the cheapest fabric and it will look cheap on the shop floor and you customers will drift away.  You need to spend time walking the floors of the shops and understanding what the customer sees and what little finishes you can put on the corners which make the customer realise that you care about your product and about them.

So be careful buying a business run by enthusiasts.  It is all the little things that they put into their products which make the customers realise that they “care” and justify a slightly higher price.

Make the devan drawers run in and out smoothly.  It may be cheap but it does not have to be tacky.

For property it is Location, Location, Location but for beds it is Passion, Passion, Passion all wrapped up in a business plan.

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Passive equity companies near The Lakes

Railway cottages, TebayImage via WikipediaOut of Eden, Lyon Outdoor and the largest of them all Lakeland are all passive equity companies with the latter in the second generation family control.

The Internet has made it possible to build these companies far from big centres.  However if you start-up in a beautiful small village like Dent, there will come a time when you will have to move to Tebay to cope with the large artics which Lyon Outdoor has had to do.  Also all three companies are re-sellers of other peoples ideas and products.

I met Ian Hartley of Out of Eden high up on the Langdales where he was seeking inspiration for the next stageof the companies growth.  And where I sprained my ankle slipping on a wet stone.  Each company now has experienced management some of whom may go and join another company in the area or even start on their own.  With passive equity companies, how can the companies offer a stake in the growth of the business without opening up the share register?  It is easier with the Cambridge Cluster and active equity companies where everyone is a winner in the business plan!

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Wash out rounds with billions

The Royal Bank of Scotland Plc Banca Rìoghail na h-AlbaImage via WikipediaWe all know that the worst thing that can happen to founders is to work hard, build value and for the stock market to dive leading to a washout round with great dilution. Even those who fully understand Equity Fingerprint, the business plan resource, find that difficult. Neil Collins in the Spectator in an article titled Hand Over Your Cash: How Banks Are Mugging Investors describes the deeply discounted rights issues being offered by HBOS and Royal Bank of Scotland – “they’ll have received a matching batch of gobbledegook” – leading to washout rounds for existing investors.

Of course the ceos and executives are not interested in Equity Fingerprints. They are interested in salaries, bonuses and options which are readjusted when they have gone under water. Since MBA students are aiming at executive roles they also find Equity Fingerprint perplexing – so much easier to change the rules as you go along!

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