An embarrassing business venture which taught me an important lesson

In my younger years I did catalog sales to supplement my income. I’d just become a Dad and cash was really tight so it seemed like a great way to earn more money in a flexible way. I was young and eager and feeling the weight of providing.  At this point in my life I wanted to make some extra money and tried a few things to see what worked.

In the usual fashion any ‘home based business’ is part of an MLM network. If you sign people up to sell products via catalog you can earn more money. We focused primarily on selling products through the catalog and we were not really interested in signing other people up. I think partially because  I was a bit embarrassed to tell friends I was delivering catalogs in my spare time.

I was connected ‘up-line’ to a very excitable couple who were making thousands every month and passionate about getting us to sign up more catalog sellers. I was very cynical of the MLM part. I saw the couples house and car so I know their portrayed lifestyle was legitimate. They didn’t hide the fact that the vast majority of their income was commission from other people selling ‘down-line’.

Inside catalogs there was good products many of which you would see on a shopping channel today. There was a lot of products including Carrot peelers, Tupperware, and extendable garden hoses. Many of products were good but once purchased we would play with a few times and consign to the rarely used kitchen cupboard.

Part of being in the team, we were invited to monthly network meetings. These meetings were designed to keep everyone motivated and limit the drop out rate. Despite the mental picture I am probably presenting the people we met were all lovely and genuine. At nearly every meeting lead couple would always say ‘just get your books out’. When they said this they mean’t deliver your catalogs and collect them in, turn them around as fast as you can. If you have 200 catalogs put them out 3 times a week, not just once.

Their philosophy was to play a numbers game, the more people saw the catalog the more likely you were to make a sale. Make the most of the catalogs you had. Using the same catalogs three times in a week to triple your potential for orders. In business we’d call it sweating the asset. What was surprising is that they did practice what the preach, they delivered and collected 600 catalogs per week. They did their catalogs with finesses with their BMW 5 series estate and a branded trolley compared to my battered Renault Clio and a messenger bag.

There little saying has stuck with me. It’s become one of my personal mottoes. To me ‘get your books out’ means don’t just dream about it. Do it. Take action. Do as much as you can with what you have got. Don’t wait for everything to be perfect just ‘get your books’ out.

Circumstances will never be perfect. There will always be a reason to delay, postpone or do it next month, but we all have to act if we want achieve and succeed. In the catalog world a rainy day can be incredibly demotivating, but, if you want to get orders, come rain or shine those books have to go out.

I eventually decided to hang up my catalogs but we did make some semi decent money at the time. If you enjoyed walking, delivering and collecting catalogs each day, you could earn a modest income. The most profitable part of delivering catalogs, which has made me hundreds of thousands of pounds over the last ten years, was the day I heard the couple say “get your books out”.

With great power comes great responsibility

Many years ago, I was working with a client who had grown rapidly through buying other businesses. In the usual M&A fashion it was all financed through debt. Within 2 years the company had grown to a £42m turnover by using £23m of debt. An empire had been built which was impressive by anyone’s standards.

There was impressive news articles, awards and the CEO was often quoted a as leader in the industry. This was just before the banking crisis and it looked like the best days were ahead. Then, one of the larger clients decided to downsize and cut back. Ouch that was painful, but, with a sales force of over 100 people, we were sure, more work would come in. After all, we were one of the biggest companies in our field. We could compete for the big work that smaller companies could not do.

We often look at people who have built massive business empire’s with a degree of envy. People such as Bill Gates and Rupert Murdock and imagine the high-life, private jets, being waited  on hand and foot. It sounds ideal. Unfortunately, that bit is accompanied with the pressure, constantly having to keep the empire functioning and developing.

Just like Captains of ships, Emperor’s go down with their empire. When the Titanic hit the iceberg, the captain was resting. As the ship sunk the Captain had a responsibility to keep the ship afloat for as long as he could. He also went down to the bottom of the Atlantic with it. Emperor’s and Captains are the object of envy but their duties can also be brutal.

The quote “With great power comes great responsibility” is so true.

Coming back to my client, a year into the business empire being built, it took a lot more effort to maintain than it was to build it. With such a big debt to pay back the pressure was on to get the orders, keep the factory busy and get work invoiced quickly. Sometimes we envision we want to build a big business empire we can preside over, but in truth, empire’s need a lot of attention. In the end, the empire was so wieldy and difficult to control, it collapsed, 400 jobs were lost and the emperor disappeared into obscurity.

I too have been guilty of empire building. I wanted freedom, the ability to work when I wanted to, escape the 9-5, but I thought the route was to build a big business – WRONG. I went from a one-man band to a 16 staff operation. I did stop doing the day-to-day work of order processing and being face to face with customers, but inherited a whole new set of tasks, cash-flow management, credit control, work flow management, HR and a million other things.

We can easily deceive ourselves into thinking building big and power mean less responsibility. In reality, the more power, influence the more responsibility you have. So, if you are trying to build a business for an easy life, it’s often easy to keep it smaller, less responsibility, more flexible working times.