Timpson - The Latest Blog entries from Timpson http://www.timpson.co.uk/events Q What were the highs and lows of the last year for you? A This time last year our shops were suffering in the snow, we were two weeks away from a 2.5pc increase in VAT and prospects for the economy looked bleak. Like other retailers we wondered how to make the best of a bad market. Experience of several cycles has taught me you can rsquo;t control profit. Managers have screwed up many a good business by trying to supply short-term satisfaction to shareholders and the City. When turnover falls you are almost bound to make less money. By all means economise but stick to your principles and look long-term. We haven rsquo;t cut back on the way we look after our colleagues. Everyone still gets their birthday off, we bought two more company holiday homes (we now have seven) and increased our hardship fund to pound;300,000 to lend more money to colleagues with financial worries. We didn rsquo;t cut costs in our shops ndash; we kept recruiting apprentices, increased the training budget, and continued to fund a big area support team. We refused to do anything that would water down our service to customers, but we are mean when it comes to true overheads. We have fewer office staff than three years ago when we had 300 fewer shops. We called our plan ldquo;VAT Busters rdquo; ndash; a series of ideas to help branch colleagues take the extra 3pc turnover needed to pay for the hike in tax. We invested in kit to make it easier to repair waterproof watches. We bought gizmos that could copy complicated car keys that can cost an arm and a leg at the dealers. A portrait service and a range of canvas prints were an instant success, and we introduced several multiple offers like three Yale keys for pound;10. It worked well, helped by the ldquo;make do and mend rdquo; demand for shoe repairs that happens in tougher times. With sales 4pc better than last year, we created enough cash to keep expanding. Every recession brings opportunities. In December 2008 we bought photo chain Max Spielmann from administration. It now adds 25pc to our profit. This year we made a major move into supermarkets (mainly Tesco and Sainsbury). We opened 50 new concessions with even more planned in 2012. We have come a long way since the days of being a simple cobbler. But one change in 2011 has been more personal. In March, with much encouragement from my wife Alex, I became Master of a livery company, The Worshipful Company of Pattenmakers. Alex saw this as my chance to step back from the business. She knew I wouldn rsquo;t give up altogether. ldquo;Anyway, rdquo; she said, ldquo;they like seeing you round our shops and you can still produce a few ideas. But you are 68; it rsquo;s James rsquo;s [one of my sons] time now ndash; you preach about Upside Down Management, follow your philosophy, stand back and let James run the business. rdquo; I have spent an enjoyable but time-consuming year chairing Court meetings, dining with other livery companies from The Apothecaries to The Environmental Cleaners and taking part in The Lord Mayor rsquo;s Show. I even preached a sermon in a City church. Alex was right. Although I have still visited about 50 shops every month I have finally retired from the detail. As chairman, I now work for James, giving support and advice when asked. And guess what, business is booming. So, when my Master rsquo;s year ends I will continue to follow my wife rsquo;s advice. As she points out: ldquo;You might have invested in loads of shops but the most significant move of the year was to successfully hand over to the next generation. rdquo; http://www.timpson.co.uk/blog/article/71/how-the-vat-busters-strategy-helped-us-weather-the-recession- http://www.timpson.co.uk/blog/article/71/how-the-vat-busters-strategy-helped-us-weather-the-recession- Q. A recent academic study suggests that family businesses would benefit from some more professional management and that it is often dangerous to hand over control to a son or daughter. Don rsquo;t you think that at a certain size every family company needs the experience of a properly trained top team? I wonder what criteria academics use to define a professional manager. I suspect they envisage an executive who follows best practice with a fair dose of good governance, risk assessment, appraisals and KPIs. Business schools are bound to preach the importance of a proper process because it is impossible to teach someone how to be an entrepreneur ndash; you don rsquo;t acquire flair by going to university. To suggest that family businesses are holding our economy back is bunkum. And to think it is dangerous to put your company into the care of a son or daughter is a sweeping generalisation that shows ignorance of the benefits a family business can bring. Look down any High Street and you will see names that had their halcyon days under family management ndash; Marks and Spencer, Sainsbury, and Clarks, are prime examples of business built by several generations. In a family business most colleagues know the boss and enjoy a consistent style of management. Family managers tend to look after their staff and make long term decisions. It is now being suggested that caring companies are more successful ndash; a family business is more likely to care for its colleagues and reward those that give a life time of service. Business is not just about market research, ratios and best practice it is primarily about people - rsquo;professional managers rsquo; don rsquo;t always seem to get that message. I will never forget the man who told me he was good at buying family businesses and putting in professional management. He bought one of our competitors and managed to lose pound;120m in four years ndash; we then bought it for pound;1! So forget the academic study, family businesses will continue to create a considerable amount of the country rsquo;s wealth ndash; they should be enthusiastically encouraged not wrongly criticised. Q. I opened my bakery next to a Lush outlet and was initially pleased that we had such ethical neighbours. I soon realised my mistake when our baking aromas were smoothered by the fruity smells of their soaps and fragrances. They have since moved on and we now have far more impulse buying, with customers smelling our brownies as they walk down the street. What are your top tips for selecting the right shop location? I don rsquo;t bother with sophisticated research to find out about the catchment area and its socio-economic balance. I like to go and look for myself. To help me imagine what it would look like I compare each potential new site to an existing Timpson shop elsewhere. That gives me a good guide to guess how much turnover the shop would take. I look at the footfall and the sort of people who are on the street and I certainly take note of the surrounding shops. A lot of rsquo;To Let rsquo; boards and empty shops are obvious warning signs and I worry when I see a number of rsquo;Pound Shops rsquo;, and rsquo;Cash Convertors rsquo; (we trade best in affluent areas). It helps to have good neighbours ndash; 20 years ago the dream was to be next door to Marks and Spencer today I am comforted if I find a location near to Greggs (a busy business with a property department that has a wonderful knack of picking the perfect spot). Having spent over 50 years tramping round the high street I am bound to get an instinctive feel for which locations will work but don rsquo;t always get it right. Some sites surprise you by simply not sticking to your plan. Q. I know my strengths and the discipline of setting year-ahead targets and then regularly monitoring progress against them is not one of them. With 2012 fast approaching, do you have any shortcuts to success? You don rsquo;t have anything to worry about. Comprehensive budgets and meticulous monitoring will probably have little influence on your annual profit. You will make much more money by picking the right people, creating a great culture and choosing a successful strategy. No one can guarantee a top performance by following a paper process, management is an art not a science. I have survived the last 20 years without bothering too much about budgets KPIs or targets. Although we do produce a budget (the bank manager likes to see one) no-one outside our Finance Department gets involved in the process. We save hours of management time and avoid plenty of business politics by ignoring the budget ritual that is standard practice on almost every corporate calendar. I like comparing figures with last year - a figure based on fact instead of fantasy. I am amazed how many organisations only compare their performance with budget. In the 1960s when the buzz words were rsquo;Management by objectives rsquo; we had such a blind faith in targets no one was allowed to quote comparisons against last year. The theory was that as long as everyone focussed on the objective it was bound to be achieved! By simply chasing the company rsquo;s optimistically created target we lost contact with common sense. http://www.timpson.co.uk/blog/article/70/don-t-knock-family-businesses-they-create-a-considerable-amount-of-the-country-s-wealth http://www.timpson.co.uk/blog/article/70/don-t-knock-family-businesses-they-create-a-considerable-amount-of-the-country-s-wealth Q. The world of football is seemingly unable to get to grips with racism. Have you ever had to tackle this issue in the workplace and how would you advise Sepp Blatter? A. Sepp Blatter is out of touch, which is bad enough when he stands in the way of action replays and then awards the World Cup to improbable locations, but when he appears insensitive to racial abuse it is time to put the good of football ahead of his desire to hang on as FIFA President. I checked with Gouy, our People Support director, hoping that racism doesn #8217;t exist at Timpson. I was reassured when he confirmed we exercise zero tolerance and make clear to colleagues what is unacceptable. quot;But even in the most caring workplace racist remarks occur when banter gets out of control, quot; explained Gouy, quot;and thoughtless remarks creep into conversation and cause offence. quot; Most colleagues are embarrassed when they realise they have carelessly made a racist remark. We once had a bully who we realised was a lost cause when he proudly announced he had given his cat a particularly offensive racist name. I am pleased to say he now works elsewhere. Blatter suggests the odd racist remark is just part of the game and everything is put right with a happy little handshake. He is wrong. Racialism will continue to fester as long as big bosses like Blatter think a little bit of banter doesn #8217;t matter. The world of football has an enormous influence on our culture. FIFA should set an example by backing a policy of zero tolerance. Q. My son, aged 42, has a degree in marketing and an MBA and has been in various #8217;marketing #8217; roles in his career to date. But, in mid 2010 he was affected by a restructuring of his company and although he had a reasonable package on leaving, that will not last forever. He has been making serious efforts to get back into the market. Recently, however, he has found firms do not reply to his CV. And where he does get invited to interviews in other cities they decline to make any contribution to his travel costs. Have you any advice on what strategy he should adopt? Possibly your organisation may benefit from his experience. A. First, can I sympathise ? Until it affects you personally, unemployment is purely a statistic. But it becomes very real if you are looking for a job. I get a number of direct approaches from well qualified executives who have been made redundant through no fault of their own, and sadly am seldom if ever able to help unless they are willing to make a massive change in their career. We don #8217;t recruit from outside except for professional specialists, like accountants and IT people (we don #8217;t incidentally have a marketing department) so nearly everyone who joins us starts as an apprentice. Recently we have recruited a significant number of graduate executives who have successfully adapted to life in our shops. However I can totally understand why your son wants a job close to his past experience. It is difficult to offer worthwhile advice because job hunters have no guarantee of success ndash; they need persistence and luck. It helps, however, to do things that stand out from the crowd. Look critically at your CV ndash; is it a boring list of your qualifications and experience or does it reveal a bubbly personality? Is it just a lot of words or does it include pictures? You mention the cost of travelling to interviews ndash; well, frankly, that is a price you have to pay. It is not easy, there are bound to be times of despair but never lose hope. Q. I have a member of staff off on long term sickness and have no idea how to approach the sensitive subject of ending his contract. Do you have any suggestions? A. If someone is on long term sick you can #8217;t let the situation drift. Don #8217;t wait for them to tell you when they can come back to work, it is up to you to raise the topic ndash; as pleasantly and sympathetically as possible. Your approach will depend on the circumstances. In the rare cases when a colleague is terminally ill we would never consider dismissal, our role is to support as best we can. If you have a colleague who simply can #8217;t continue to do the job, it is time to talk about home decorating! To help explain reality to an absentee who thinks they have a permanent right to stay on the pay roll, ask them what they would do if they hired a home decorator who went off sick halfway through painting their living room and failed to reappear for over 10 weeks. We find colleagues appreciate a frank chat even if it works against them. When it becomes clear that the relationship is going to end we try to ensure we part as friends. We would never rule out the possibility of re-employing someone when they are signed off the sick list so we keep in touch with the good guys for at least a year after they have left. There is no point in making enemies. Be fair, be firm and be as kind as you can, but never forget you are running a business. http://www.timpson.co.uk/blog/article/69/racism-in-the-workplace-will-continue-to-fester-unless-zero-tolerance-is-enforced http://www.timpson.co.uk/blog/article/69/racism-in-the-workplace-will-continue-to-fester-unless-zero-tolerance-is-enforced Q As a long established employer, if there was one thing you would like the Chancellor to do in his autumn statement, what would it be? A I don rsquo;t envy George Osborne. I studied Economics at Nottingham University where I got a reasonable grasp of supply and demand curves but when it came to Macro Economics (lectures that covered interest rates, balance of payments, GNP and inflation) I was confused. I never really understood how the economy works and now wonder whether anyone does. The mystery ingredient seems to be confidence. Whatever happens with the Euro, at The Bank of England or in the Chancellor rsquo;s Autumn Statement, the economy won rsquo;t recover until the majority of us think it is already on the mend. We live through a series of cycles ndash; and if Mr Osborne stays in the Treasury and keeps his fingers crossed long enough, confidence will improve and he will be able to take part of the credit. Like everyone else, a lack of economic ability doesn rsquo;t stop me offering the Chancellor a few helpful hints to take to the dispatch box. If I am being entirely selfish I would cut the level of local tax we pay on our shops, put VAT back to 15pc, and seek a radical reduction in National Insurance Contributions, especially for people under 21. But I realise the Chancellor has no money to give away. He is decades away from my dream of a flat 20pc tax rate and an uncomplicated benefit system that gives every UK citizen ndash; man, woman and child ndash; pound;400 a month and pound;200 on their birthday. I asked a few friends whether they had the golden answer. Most want the Government to boost activity with some big capital projects, ldquo;let rsquo;s have some more toll roads, rdquo; said one, ldquo;it rsquo;s time to get the housing market going, rdquo; said another, who is also keen on providing more mortgage relief. So there was a unanimous call for the Government to spend some capital. But I wonder whether we have all forgotten we are living beyond our means and that the only way to recover confidence is to create some cash. It helps to have a pessimistic forecast that you have a chance of beating. I have already confessed that I know little about economics but I am aware that we all desperately need a boost to our confidence. George may not need my advice but he is certainly going to need plenty of luck. Q With the season to be jolly almost upon us I feel like a right Scrooge for scaling back our office party. I rsquo;m surely not alone, am I? A Some people might call you Scrooge but don rsquo;t pay for a Christmas party you can rsquo;t afford. If your colleagues still want a night out, provide a modest subsidy and let them organise it themselves. At Christmas, companies act totally out of character. Miserable bosses start smiling, talking to staff they have ignored all year, shaking everyone rsquo;s hand with a warm wish that they ldquo;have a good one rdquo;. It is a pity they can rsquo;t be as nice for the rest of the year. Christmas parties bring plenty of problems, especially if you are the boss. Each year you are setting a precedent ndash; a minimum standard for next year. It is much better to celebrate success well away from the festive season when you can bring in an element of surprise ndash; but never be tempted to repeat the format, however successful, it never seems as good the second time round. If you have to have a party let someone else run it, and, if you feel the need to turn up, arrive early and leave before they have had too much to drink. Never stay after the dancing has started, and leave the biggest bloke from HR in charge to tick the health and safety box. http://www.timpson.co.uk/blog/article/68/it-s-safer-to-let-the-staff-organise-the-christmas-party http://www.timpson.co.uk/blog/article/68/it-s-safer-to-let-the-staff-organise-the-christmas-party Q. Do you see merit in issuing bonds to customers as a way of raising money and building loyalty? I #8217;d far rather pay a coupon to my customers than the bank. And as King of Shaves and John Lewis have shown, if you also hand out free shaving products and discounts it can prove a very attractive investment. A. I applaud the initiative shown by King of Shaves #8217; Will King who has found a novel way to create cash with the bonus of giving his company positive PR. At a time when it is best not to need to borrow from the bank smart businesses give cash flow a bigger priority than profit. The dream is to grow the business in a way that improves the bank balance ndash; a magic trick that was performed by some of the value chains that acquired Woolworth shops from the administrator three years ago. With little or no rent to pay, a quick stock turn and slow payment terms, merchandise was sold before an invoice hit the purchase ledger. As a result every new shop meant more money in the bank. I have always had a sneaking admiration for book tokens. We have copied the idea at our Anglesey pub where you can buy gift vouchers, thus putting money in our till weeks before the recipient puts any food in their mouth. When the Bank of England started shoring up the economy with quantitative easing I flippantly thought that we could make a helpful contribution by paying our suppliers with Timpson Discount Vouchers (TDVs). These vouchers would be redeemable at any Timpson shop and entitle the holder to a 10pc discount. Alternatively, our suppliers could use their TDVs to settle bills with third parties, thus turning TDVs into a useful alternative form of currency. As yet I haven #8217;t tested the market but with pressure on the euro threatening another credit crunch TDVs might provide the extra liquidity our economy needs. But, returning to reality, I reckon that, while being a useful bit of fun, cash-creating bonds, gift vouchers or even a new form of Green Shield Stamps will only provide a bit of cash and a few extra sales. To be really successful we will need to carry on cobbling, providing shoe repairs while you wait and get you to pay cash on the nail. Q. I #8217;m being offered new security shutters for my shop. The trouble is they completely obscure my windows. I #8217;ve always thought there was value in potential customers seeing our displays even when we #8217;re shut. What works for you? A. Timpson has a lot of shops with shutters and most do excellent business. The shutter is there because these branches have a completely open front, so with no window we need the shutter to secure the shop at night. Whenever we change a shop and remove the shop window to trade straight on to the mall or high street we take more money. So I like shops with shutters. When I started work in 1960 shop windows played a much bigger part in British retailing. With no self selection inside the store, every shop offered personal service. The full range of merchandise was in windows which were far bigger than any of the displays shops have today. The Timpson Shoe business employed 55 specialist window dressers to service 260 shops. Today shops are recognised by their fascia. In a world of self service, customers don #8217;t bother with windows. They want to wander inside and browse. If you need to have a shutter to secure your shop go ahead, you might look a little less attractive but it won #8217;t make much difference. Retail success depends on selling the right product in a good location with an attractive shop which, most important of all, is staffed by personalities who know how to give their customers some old fashioned personal service. Q. Are your energy bills rising? I #8217;ve just received my contract renewal letter and mine are going through the roof. What should I do? A. We are also faced with a big increase in energy costs. We last renewed our contract in early 2010, when the wholesale energy market was at a low. Since then prices have increased by 25pc. There is no reward for customer loyalty, you will almost certainly find that switching suppliers produces the cheapest option. We use e-auctions to make sure our contract is tendered to as many suppliers as possible ndash; at least we know we are getting the best price available on that day. The renewable energy policy pursued by governments is bound to bring long-term increases in energy prices. You just have to hope that you renew contracts at a favourable time, like we did ndash; it helps to be lucky. The only sure way to save money is to use less energy, that is why we formed a quot;green team quot; to come up with practical ways to save energy. The cheapest unit of energy is the one you don #8217;t use. http://www.timpson.co.uk/blog/article/67/why-it-8217-s-smart-to-put-cash-flow-above-profit-sometimes-and-reward-customers-8217-loyalty- http://www.timpson.co.uk/blog/article/67/why-it-8217-s-smart-to-put-cash-flow-above-profit-sometimes-and-reward-customers-8217-loyalty- Q. What is the worst piece of advice you have ever been given? A. I wish no one had ever suggested it was worth opening a shoe repair shop on Wardour Street right in the middle of Soho, but I only have myself to blame. I looked at the site three times before giving the go-ahead, and on every occasion the area was buzzing with people. I saw them all as potential customers ndash; especially for the repair of stilettos ndash; their slim heels quickly wear out. When the shop opened I quickly discovered my mistake. Our kind of multi-service shop wasn rsquo;t providing the sort of service shoppers were seeking in Soho. That was an expensive mistake but not as bad as KeyCall. In the early 1990s I was given what seemed a ground-breaking idea ndash; a car key rescue service. If you subscribed to our KeyCall club there was no need to worry about losing your car key. We would log the details of your car key code on a clever computer that an on-call biker could take to your car and cut a duplicate within two hours. It was an eccentric scheme which showed an unbelievable faith in logistics and technology but I would not have lost as much money if I had ignored the advice of our direct marketing consultant who, after what he called quot;amazingly encouraging market research quot;, persuaded me to spend pound;40,000 on leaflets stuffed in the middle of several Sunday papers. I started to worry on the first Sunday morning when I saw a man standing over the garbage bin outside our local Delamere Stores shaking out unwelcome flyers so he could concentrate on the bits he wanted to read. I feared the worst but had no idea how catastrophic our failure would be. Following the campaign we signed up only nine customers, two of whom worked in our office and another was my aunt. It was an expensive experience I will never forget. Q. Is workplace stress a serious issue? Its rise seems to be blamed for all manner of ills, including absence. A. The short answer is yes. Stress is a significant problem that is getting worse. A business can suffer in many ways. Some just see stress as a simple way to throw a sickie. It is relatively easy to secure a doctor rsquo;s note just by describing the symptoms. With no injury to see or temperature to take the doctor must assume the patient is telling the truth. Stress-related absence often occurs as a consequence of workplace confrontations. Disciplinary procedure, demotion, or even an insensitive appraisal can be the cause of weeks away from work. Laid-back bosses who sail through life without the slightest twinge of anxiety may think stress is an excuse rather than an illness. But those, like me, who have experienced the symptoms for themselves realise how tough living with stress can be. Suddenly, you find yourself in a world full of worry. There appears to be no escape as you swing from being totally tense to feeling miserably inadequate. Although some colleagues play the stress card to beat the system, others who are genuinely ill struggle on hoping to hide their weakness. Hopefully, we will soon see an end to the stigma that stops sufferers seeking the help they need. Q. If you found someone writing disparaging remarks about colleagues on Facebook, how should management respond? A. Although it is probably a sign of my age, I have yet to fall for Facebook or be tempted by Twitter but even I can rsquo;t ignore social networks. A good proportion of people on the train, at a coffee bar or walking down the street are tapping away at their mobile device constantly communicating on the move. Sometimes I wonder whether all this messaging is doing more harm than good, especially when I hear that it is used for bullying and malicious gossip. Thoughtless individuals often mistakenly think their negative comments are kept within a tight group of friends, failing to appreciate the wider audience which can view the information and that once it rsquo;s on the internet it stays there. You can rsquo;t ignore Facebook comments about your colleagues. Whatever the content of the allegations, true or untrue, people on the receiving end are victims who need your support, and if the person who is dishing out the dirt is also a colleague they need a severe reprimand. First talk to the victims. Listen to their story and find out what they would like you to do. Then meet up with the scandal-monger and make it clear where you stand. Bullying in the workplace is more common than most companies care to admit. It can make life a misery for the victims and will undermine the atmosphere in your business. You can rsquo;t create a great team if it includes a bully. Make a firm stand and help to stamp it out. http://www.timpson.co.uk/blog/article/66/not-all-advice-is-good-as-i-have-found-out http://www.timpson.co.uk/blog/article/66/not-all-advice-is-good-as-i-have-found-out Q How has your IT spend been affected by tight budgets and have your thoughts on all this hosted IT systems marketing that we get bombarded with been affected by the recent collapse of BT rsquo;s business broadband? A As soon as I read your question I went into our IT department to find out more. As I looked around the modest office with Paul and his team of five looking after all our IT needs I knew we weren rsquo;t overstaffed. ldquo;We don rsquo;t do that many new projects, rdquo; said Paul, ldquo;so there rsquo;s not a lot of potential cost to cut rdquo; Although IT is not at the centre of the Timpson business, Paul rsquo;s team is supporting 2,500 people in nearly 900 shops with broadband, general technical support and the back-up for software that helps duplicate car keys containing complicated computer chips. Plus, of course, an IT service for our central departments. Paul has done a great job keeping IT in its proper place, providing a service to help the rest of the business ndash; solving problems not creating them. He had a clear view when I asked him about hosted systems. ldquo;There is a lot of hype about lsquo;in the cloud services rsquo; but if you put your critical systems on to the internet you run a big risk. Lose your connection and you have lost access to a vital part of your business support. We already have our own servers and my people are needed for all the other tasks they do rdquo;. So thanks for the question ndash; it got me to pop into IT ndash; but I don rsquo;t think it will save us any money. Q It rsquo;s been impossible to ignore the fact that one of our salespeople has had her cleavage lsquo;cosmetically advanced rsquo;. I see no problem with this but she rsquo;s suddenly taken to wearing low cut tops which I rsquo;ve overheard female colleagues complain are unprofessional. How do I broach the subject without offending her, or worse, end up being accused of sexual discrimination? A As only the women in your team are complaining I consulted my wife, Alex, to get her perspective. ldquo;I expect they rsquo;re jealous, rdquo; she said. ldquo;The girl is clearly proud of what her surgeon has produced and as she has spent a small fortune getting a bigger bust it would be a shame not to flaunt it. rdquo; You talk about her bosom but you have missed out her most vital statistics ndash; how good are her sales figures? Is she the star of your salesforce? Has the drop in neckline produced an uplift in turnover? If so, her colleagues may envy the way she attracts sales as well as the extra attention. But however good she is you can rsquo;t ignore the problem. Behind the scenes bickering is bad news. You might disagree with them but other people rsquo;s opinions matter. A tiny bit of cleavage to one person could be a provocative plunging neckline to another. Draw up a dress code to help your colleagues feel comfortable and look professional. Make the guidelines clear by using pictures of unacceptably tatty jeans, excessive jewellery and, of course, too much flesh. Don rsquo;t get involved yourself. When it is time to act leave that to your HR department. Let them issue the dress guidelines, but beforehand get a girl from HR to talk to your sales executive and explain exactly why customer facing colleagues must dress appropriately. http://www.timpson.co.uk/blog/article/65/depending-on-cloud-services-is-risky http://www.timpson.co.uk/blog/article/65/depending-on-cloud-services-is-risky Q We #8217;ve cut our training budgets for the last two years and while everyone has noticed, no one has complained. Given our long list of other priorities I just can #8217;t see it coming back any time soon. Are we alone in adopting this approach? A In these difficult times most companies need to cut costs to improve short-term cash flow, and many have found the training budget provides a pretty painless way to save money. But beware, it could be a short-sighted move that does long-term damage. Fine, if you can cut the cost of training without bothering the business (although it is embarrassing to discover you have been paying for courses that didn #8217;t make a difference). However, it isn #8217;t just a question of cutting the budget, you need to know which part of the training is doing no good. At Timpson, training is a vital ingredient of our success. If we made a significant reduction in funds spent on training we couldn #8217;t maintain the quality of our service to customers. Save costs by all means, but make sure you keep the training that matters. Q M amp;S is asking suppliers to help pay for shop fit-outs. Where do you stand on maintaining good retailer/supplier relations? A A discount to help pay for capital expenditure or extended credit terms to compensate for a period of poor trading are ways of dressing up a blatant chip on the price of a contract that has already been agreed. Companies that are regularly asked for this kind of quot;special contribution quot; must dread the next invitation to a suppliers #8217; reception for fear that they will be bullied by their host into another big price reduction. It is a short-term tactic that can do long-term damage. Suppliers may appear happy to pay up but many will resent being bullied and will try to get the money back the next time they get around a negotiating table. As far as I am concerned, a deal is a deal and the time to change the price is when you negotiate the next contract. http://www.timpson.co.uk/blog/article/64/training-cuts-can-cause-long-term-damage http://www.timpson.co.uk/blog/article/64/training-cuts-can-cause-long-term-damage Q. How do you keep your over-60s motivated? We don #8217;t have a dedicated human resources function and I personally find it difficult to approach long-serving staff to tell them that they need to make more effort. A. If you need to tell people to make more effort you have probably got the wrong people. This isn #8217;t a question of age ndash; your business should be able to inspire every colleague however old they are. If the business is exciting, it will stimulate anyone with a positive personality. Employees don #8217;t suddenly go off the boil just because they hit 60. Although physically demanding jobs get tougher as the years go by, lively long-standing workers still have a wealth of experience to offer. However, younger people don #8217;t always see it that way. We employ a wide range of ages who can all keep alert and up to date, but when I approached 60 I suddenly found out how old I appeared to a young apprentice. I first realised the age gap 13 years ago when I visited a team of three young guys in our shop in the centre of Bracknell. They were all under 20. I added up their ages and came to a total of 54. I was 57, no wonder they thought I was ancient. You motivate your workforce by keeping the business up to date. Everyone likes to be part of a success. To stay on top, a company must keep changing. New ideas, new products and new ways of working will stop your loyal colleagues getting stale, as long as they are willing to keep learning new skills and work alongside the recruits needed to take the business forward. If you find an older colleague who can #8217;t keep up, it is time for a chat ndash; nothing beats straight talking. It may well be time for them to face reality and plan for retirement. Ignore advisers who suggest that the default retirement age legislation stops you having this candid conversation. If someone over 60 cannot keep up, it is much better to discuss a dignified way out for them than to have a 40-year career finish with them facing impossible performance targets, unwelcome warning letters and a traumatic tribunal. Q. A long-standing employee has physical and mental health problems, is often away from work and at the last minute fails to come in, letting us and colleagues down. We have always subscribed to Mentor, the RBS/NatWest employment law advisers. We need to let this person go but have been advised that we are just not able to. We have tried interviews, job assessments, health assessments etc. Is there a solution that won #8217;t land us in court with a bill we can #8217;t afford? A. I can understand your frustration but fear I may not be able to provide the perfect solution to your predicament. You are caught in a nightmare and the situation is fraught with legal danger. Through no fault of your own you may end up in an employment tribunal that could cost you a lot of money. I can #8217;t give a definitive answer, much depends on whether your colleague will co-operate or if they simply want their day in court. By following your employment law adviser #8217;s guidance, you seem to have done everything possible to help this worker keep their job. You have tried consultation, obtained medical records for the experts #8217; view and explored how to make adjustments to the workplace and to their role. However, you still haven #8217;t solved the problem. Their absence is disrupting the business and annoying colleagues. Your advisers may well suggest that you set a performance management programme and issue a series of capability warning letters to prove this colleague is incapable of doing the job on health grounds. But the red tape approach may well lead to a this employee taking a long period of sickness on the way to a tribunal. It is not always wise to follow the procedure prescribed by an employment lawyer. Look at the thing calmly and logically. It is better to spend money on a compensation package that will persuade your colleague to go than to run up legal fees and still risk a tribunal? It is time for a heart-to-heart talk. Explain your situation and listen to theirs. With luck they will see the advantage of a settlement. Although you may feel they have already cost you enough time and money, don #8217;t let your frustration get the better of you and don #8217;t be mean. Look at things from their point of view and be generous enough to secure their agreement. The sooner you get it sorted out the quicker you can concentrate on running the rest of the business. http://www.timpson.co.uk/blog/article/63/lack-of-effort-is-not-down-to-an-employee-8217-s-age- http://www.timpson.co.uk/blog/article/63/lack-of-effort-is-not-down-to-an-employee-8217-s-age- Q Last year all our young male office staff started wearing cardigans on a cold day. This year we have already seen tight knitwear, and even more frightening, roll neck sweaters. Why can rsquo;t they stick to a suit? At a push I can cope with a smart tank top. A I can understand why you want to keep up appearances ndash; casual clothing is sometimes a sign of a slack workplace, but it depends what business you are in. Bankers are expected to stay fairly formal, especially if they are meeting customers, but it is fine for an advertising office to dress down all week. Dress codes have changed a lot over the last few years, I just wonder whether you are keeping up to date. When I started work 50 years ago every man had a suit (that is why John Collier, Burton and Hepworths sold made to measure suits on every high street) and most men wore a hat. But today plenty of top executives don rsquo;t wear a tie. If the cardigan craze has already caught on it is probably too late to expect your office to go back to a suit and tie. Unless all the knitwear fans are work shy troublemakers I would go with the flow. What matters most isn rsquo;t what they wear but how good they are at the job. We insist that our branch colleagues wear a uniform because they are meeting our customers. But colleagues in our office and the workshops behind the scenes turn up in whatever clothes they want to wear. I would much rather have a casually dressed hard-working guy with a pleasant personality than a poor performing person in a smart suit. Q We have one member of staff who is turning up late in the morning and it is beginning to become a problem. How do you tackle such issues? A You say in your letter this guy rsquo;s lateness is becoming a problem ndash; turning up late is a problem the first day it happens. Stamp it out straight away with a blunt face to face chat. You must not let poor timekeeping became part of your culture. A lot of our people are on flexitime so they have chosen their working week but we expect everyone to turn up early ndash; ready to start work at their chosen time. If you let a colleague swan in several minutes late, without saying anything, you are asking for trouble. When you eventually decide to clamp down they will complain with some justification ldquo;you never said anything before! rdquo; We apply the same zero tolerance approach to sickies ndash; with us sick leave is not an entitlement it is only available for people who are too ill to work. To bring home the seriousness of lateness or regular sickies, Gouy, our people support director always draws an analogy with employing a decorator, ldquo;If you hire a decorator and he goes off sick with the room half finished how long would it be before you bring in someone else to finish the job? rdquo;, he asks. We are pretty lenient employers but there is only so long you can sit in a half decorated room. If your guy keeps turning up late he will have to go. Q Why do you consider it worthwhile to put ldquo;Estab 1903 rdquo; on your fascia boards? A When we changed the look of our shops in 1995 we wanted to keep up to date but still retain a sense of tradition. We decided to display the date we started trading on the shop fascia but there was a problem ndash; we didn rsquo;t know what date to put. My grandfather started selling shoes in 1865 but the shoe repair service came much later. The old pictures of our original shoe repair factory and the horse and cart delivery service were taken in the 1900s but we had to guess the exact year. 1903 provided the perfect answer because it meant we could celebrate our centenary in 2003, when we had a big party, presented lots of awards and gave everyone their birthday off to celebrate (a perk that was so popular it now happens every year). The ldquo;est 1903 rdquo; on our fascia not only underlines the long tradition of experience we have in the trade it also shows that we are members of an exclusive club. A multiple business with hundreds of shops that has been on the High Street for over a century. With so much current talk of retailers going into administration it is perhaps surprising that a number of other well known names like Boots and WH Smith are well into their second century of shop keeping ndash; something well worth shouting about on the front of the shop. http://www.timpson.co.uk/blog/article/62/what-matters-most-isn-t-what-they-wear http://www.timpson.co.uk/blog/article/62/what-matters-most-isn-t-what-they-wear Q Our not for profit company is doing well and we recently introduced a graded scheme to increase salaries for staff doing more responsible work. For years we could barely afford the national minimum wage. All staff were involved in the consultation, and individual appraisal interviews. The result has been bitter dissapointment. Everyone has received a pay rise, but most are more intent on making comparisons than counting their luck. Is this just normal human nature? I rsquo;m tempted to scrap everything and go back to the minimum wage. A I am not surprised you have had a problem ndash; you guessed right ndash; it is caused by human nature. Our business doesn rsquo;t have a formal salary structure and, years ago, we abandoned our appraisal scheme. I know these decisions fly in the face of conventional management practice, but a less formal approach works well for us. Every colleague needs the opportunity to have regular meetings with their boss, but we found that a formal appraisal process produced a false impression. With managers following a set format, great colleagues were told about their few weak points and poor performers encouraged by unwarranted praise. When this process was abandoned, the management team gave a huge sigh of relief. Our managers and colleagues now have appraisal type meetings when they want them. As a result we can look at each individual and pay the best people more than the mediocre. If you abandon your current scheme don rsquo;t go back to paying everyone the minimum wage ndash; pay individuals what they are worth. Reward star performers with an occasional surprise bonus and word of personal praise. Q I sense that one of my main customers is in financial difficulties,but we rsquo;ve managed to avoid taking formal action so far. However I understand the director has several pre-pack administrations behind him. I don rsquo;t want him to write off his debt to me only to set up again should I refuse to work with them or reduce my exposure? It rsquo;s a big decision given that they represent a large chunk of our revenue. A Work out what would happen if this customer goes into administration. If your debts aren rsquo;t paid there will be a serious dent in your cash flow and your business will be at risk. You are better off having a smaller client base made up of customers who can pay. The pre-pack deal was designed to ensure continuity of trading and protect the workforce. It wasn rsquo;t meant to be a device to stuff the suppliers, but that is often a side affect. Your man seems to be a serial pre-packer and as such should be dealt with in small doses. Concentrate on two clear objectives ndash; 1) get him to pay up and 2) look for new customers. Go with your gut and put him on your black list. nbsp; http://www.timpson.co.uk/blog/article/61/less-formal-salary-structure-works-for-us http://www.timpson.co.uk/blog/article/61/less-formal-salary-structure-works-for-us Q. We #8217;re getting calls from energy consultants saying that with energy prices rocketing again we should re-examine our return on investment assumptions from buying energy efficient lighting and insulation in our warehouses. What sort of approaches have you heard businesses adopting? A. As I lack the patience to dig into the detail, I leave our cost cutting to my colleagues, but I notice that every time they examine energy costs they manage to save some money. There will be a mathematical formula that will tell you whether to change light bulbs. You need to factor in the size of your warehouse, your working hours, the cost of the bulbs and maybe a solar panel on the roof. But don #8217;t do the sums yourself, call in a consultant. But don #8217;t pay up front, pay him by results. Utility pricing doesn #8217;t seem to reward loyal customers. By switching suppliers and taking advantage of special tariffs or subsidies many a good deal can be done. But this is a specialist field so use an expert. The government commitment to renewable energy will lead to some dramatic increases in costs over the next few years so energy efficiency makes a lot of sense. For most of us it isn #8217;t a question of saving the Earth, it will simply be a vital way to save cash when we are forced to use expensive sources of power to meet the requirements of The Climate Change Act and The EU Renewables Directive. The appearance of more wind farms is proof that energy policy is dominated by a drive to cut greenhouse gases and increase renewable sources. As a result business is going to face a bigger bill. Q. Our firm has been doing quite nicely for the last few years and now a couple of the partners want to grow the business by investigating export markets. We #8217;ve no expertise of working with overseas clients, and while I get the point that growth will be slow in the UK, I suspect exporting is more difficult and risky. Am I right to be cautious? A. You are right to be nervous (I have never had the courage to open shops outside the British Isles) but I don #8217;t want to put you off, it might be the best way for your business to grow. I presume your partners have a few reasons for their optimism. Perhaps you have a product with universal appeal, a world beater that will be a winner whatever country you try. Maybe, if they are fluent in French, Spanish and German, there is no chance of any language barrier. Or it could be that you have already met an agent who will build up your business abroad. Even if your colleagues have a compulsive case, take care. In every country a business relies on its people for success, and they need to understand the people on the other side of the counter. Culture can make a big difference. Our business works pretty well in Great Britain and Ireland but I am not sure we would know how to cope with French and Spanish customers or an Italian and German workforce. We are lucky, there is still plenty of scope to develop our business near to home. If you need to spread your wings take a small step at a time - I wish you well. http://www.timpson.co.uk/blog/article/60/energy-efficiency-could-save-cash- http://www.timpson.co.uk/blog/article/60/energy-efficiency-could-save-cash- Q How do you decide whether to stock a new item in your shops? Do you canvass staff or check what your competitors are doing? A Because our shops are not controlled by a computer, our branch colleagues have the freedom to order their own stock, but normally they can only select from the range we have in the warehouse. From time to time we let a shop try something totally different, but it seldom works. We are mainly a service business (less than 20pc of sales come from merchandise) so we concentrate on stock that complements our range of services ndash; shoe care products, key rings and items that can be engraved like tankards, trophies and Zippo lighters. The only exception is umbrellas, which are wonderful whenever it rains. If sales in the core business are struggling, it is tempting to introduce new products that bring in extra turnover, but it is not wise to stray too far. Although they would probably sell I wouldn #8217;t want to fill our windows with luggage, candles or cuddly toys. We don #8217;t, however, want to stifle people #8217;s initiative, so our colleagues often have a go at something new that is dear to their heart. At first, we thought the trial of cat and dog leads in Chatham was going well until we discovered that our manager (a cat lover), who made six sales in the first week, had only supplied his family and next-door neighbours ndash; he didn #8217;t sell any more for three months. But you can #8217;t run a business by a set of rules. Last Christmas we gave in to temptation and, on the recommendation of a branch colleague, stocked a range of snow grips that can be attached to the soles of your shoes. In one of the worst spells of weather for years they were such a great success we only had enough stock to supply 70 shops. Q My business partner is constantly offering me pearls of wisdom from a business book he #8217;s picked up. Whenever I try to read one, I find they #8217;re dull, irrelevant and badly written. Have you any recommendations of business books that actually changed the way you run Timpson, so I can recommend them to him next time he starts preaching at me? A Most of us are looking for two things from a business book ndash; an enjoyable read and a worthwhile message, especially if it provides a big idea that changes your business for the better. But too many business reads are a disappointment, by page 20 your mind is starting to wander and by the end you wish you hadn #8217;t bothered. Bookshops like to stock books that look good on the shelf, but it is easy to be fooled by the cover. Titles like Fifty ways to increase your bottom line and The Secret to Great Communication are very tempting. Books written by business celebrities on the back of television exposure often appear in the top 20 best-seller lists, but the best bit of these books can be their picture on the front. (During the few weeks when my book Upside Down Management was in WH Smith I never got higher than position 19, so whenever I went through Euston station I always moved a couple of copies to the number two best-seller slot). I like books written by entrepreneurs, although their first book is nearly always their best. Journalists can write good business books because they know how to tell a story. Boo Hoo, the astounding story of Boo.com, and Judi Bevan #8217;s books about Marks amp; Spencer tell you a lot about culture and strategy. But only one book has completely changed my thinking. The Nordstrom Way by Robert Spector and Patrick D McCarthy. It convinced me that the way to provide great service is to give customer-facing colleagues the freedom to use their initiative. And it was the first time I had seen a management chart that is upside down, with the chairman at the bottom. nbsp; http://www.timpson.co.uk/blog/article/59/avoid-the-temptation-to-stray-from-your-core-products- http://www.timpson.co.uk/blog/article/59/avoid-the-temptation-to-stray-from-your-core-products- QHow do you instil confidence and a sense of pride in new managers as it #8217;s an odd job moving, as I see it, from doing to delegating? A I have seen plenty of newly promoted managers who think a job title gives them the right to wear a suit, drive a company car, carry a briefcase and race round issuing orders. That is not the way we operate. We think that the manager #8217;s job is to help and support their colleagues, clearing obstacles out of the way so that every individual in their team is free to perform to the best of their ability. This management style is an essential part of our culture, so recruits are told about the way we work before they have even filled an application form. We continue to talk about quot;Upside Down Management quot; at every opportunity. Apprentices hear all about it when they attend our two-day new starters residential and every manager is invited to the Leadership Course run by my son, James, and myself. I have written a series of little management books which are the basis behind our management training. Despite all this, some colleagues find it difficult to turn into a boss. It helps if they have worked for a talented manager who has set the right example. It is good to give people with potential a minor role that provides a taste of responsibility before you throw them in the deep end. It is critical to promote people with the right personality. QTalking to your son, which business models and practices have you looked at recently that have drawn you admiration and why? A Alex and I have just spent a week in Florida, joining our grandchildren at a succession of theme parks. After three days which included Space Mountain, The Hulk Roller Coaster, seeing Shamu perform and a lot of queuing for tasteless chips and burgers, James and I took four hours away from holiday to go behind the scenes, thanks to the Disney Institute. The rides at Universal Studios are more exciting, the Harry Potter experience is amazing, it is great to get so close to dolphins at SeaWorld but when it comes to friendly service Disney is in a different league. The Institute promised to let us in on their secret, and we are always keen to find ways to improve our customer care. We found that lots of the things Disney do we do already ndash; picking people for their personality and ruthlessly weeding out those who don #8217;t #8217;get it #8217; (they suggest poor performers should quot;seek your happiness elsewhere quot;) and we both like to lavish loads of praise and celebrate success. But there are some things that Disney do much better. The Disney standards of timekeeping, personal appearance and housekeeping are made crystal clear to anyone who is thinking of applying for a job and as soon as they join they are given every detail of the Disney culture. Everyone knows that they are there purely to make customers happy. Without happy customers Disney doesn #8217;t have a business (as they discovered when they first opened Disneyland in Paris). Our visit emphasised something I guess I have known for a long time. Lots of little ideas help to create success but for long-term prosperity everything has to fit together. The company needs a culture that is so strong colleagues work together with a common purpose and at Disney that purpose is all about pleasing customers. http://www.timpson.co.uk/blog/article/58/manager-8217-s-job-is-help-and-support http://www.timpson.co.uk/blog/article/58/manager-8217-s-job-is-help-and-support Q. Sharing advice and your experience in books and newspaper columns is one thing but are you not worried that your competitors gain an advantage by learning your secrets? A. Look at other shoe repair shops and you will find that many seem similar to Timpson. Over the years they have copied many of our ideas and, indeed, we have copied many of theirs. When we turned half our shops over to key cutting most competitors noticed and nearly every cobbler started cutting keys. In 1996 we went into watch repairs and plenty of people in our trade thought we had made a mistake, but as our watch repair sales grew, more and more shoe repairers started to take in watches. It is easy to copy shop design and introduce a similar range of services but few companies have tried to copy our culture. Having pretty looking shops helps but picking the right people and giving them the freedom to provide personal service is the real secret behind our success. I wrote several books to explain the Timpson culture to colleagues. My son, James, and I have also visited several customer service champions, particularly in the US, including Ritz-Carlton, Southwest Airlines and Disney, in a search for inspiration. We found that most of the things they do we were doing already but they were much better at talking about their culture. Hence my books and the leadership course that we run to tell our people, face to face, about our values. You will now find bits of our culture on display inside our shops ndash; posters that talk about our holiday homes, or that talk about our policy of giving colleagues birthdays off as an extra holiday or our preference of promoting from within. The more that people know about our culture the stronger it gets, so I am happy to talk at a few conferences and reveal some of our secrets in this column. Some companies copy bits of our philosophy ndash; such as giving staff birthdays off ndash; but to make a real difference they need to introduce a comprehensive package which influences every department and every person in the business. It takes years to change the way a company thinks. Talking about Timpson has helped to strengthen our culture, if we are helping others along the way that is fine by me. http://www.timpson.co.uk/blog/article/57/why-i-share-the-secrets-of-success- http://www.timpson.co.uk/blog/article/57/why-i-share-the-secrets-of-success- Q We rsquo;ve been getting little response from the police for some years now to shop lifting and even one occasion of extortion. The recent riots have only reinforced in my mind that there is little meaningful protection for shop owners. What are your relations with local police officers like around the country? Are they patchy? A During the recent riots we had a few minor incidents and one major problem. Our shop in Salford was ransacked and set alight. No complaints about the police who had the difficult job of restoring order and protecting the other premises, but what amazed us was the spontaneous support we got from the local community. Timpson colleagues who had been at the scene from 4am were overwhelmed by offers of coffee and bacon butties. Throughout the following day a local contingent of well wishers formed a busy gang to help clean up the worst of the damage. We do experience regular incidents of internal theft but we seldom involve the law. The volume of form filling required for every inquiry is not only tedious for the police it also takes up a lot of our own time ndash; several hours at a police station when we would rather be serving customers. In most cases the matter is handled by our own security team, who quickly dismiss the culprit and recover as much money as possible. Q I work for a small privately owned company. The owner is continually evading corporation tax in many ways and the auditors are failing to pick it up. As I feel strongly that this is wrong I am leaving for another job. Should I blow the whistle or just walk away? A When I think of the huge percentage of our turnover that is paid in tax I, like you, get very irritated whenever I hear about companies that cheat. But before you blow the whistle check out the facts. Are your company executives cooking the books or are they just shrewdly acting in a way that quite legally keeps their tax charge as low as possible? nbsp;We have a complicated tax system that has enough loopholes to create plenty of fees for clever accountants. If your company is simply trying to keep its tax down but keep within the rules leave well alone. But your letter suggests something more sinister. Perhaps there is a wholesale expenses scam or cash payments are taking place to avoid VAT or PAYE. If you have evidence of such improper practice there is no reason why you shouldn rsquo;t contact the auditors anonymously in writing. If the auditors appear to ignore your tip off it is time for you to contact HMRC. If you have clear evidence, go ahead and blow the whistle. http://www.timpson.co.uk/blog/article/56/deal-with-petty-crime-in-house http://www.timpson.co.uk/blog/article/56/deal-with-petty-crime-in-house Q I am the owner of a small training business which has a main office staff and freelance trainers scattered around the UK. Despite our sector being hard hit by the recession, we are holding our own, actively planning for the upturn by increasing the number of courses and trainers we can offer, and I can see a clear way forward to grow, including diversifying into online training. The problem is, I am 65 and need to find someone to take on the day-to-day running of the business to release me to (a) take more of a back seat and (b) plot and guide the way forward. This person must have the energy and drive which I no longer have and be able to take over many of my responsibilities, including constant marketing activity, building relationships with clients and managing both staff and trainers. I have no idea where to start looking and certainly don #8217;t have unlimited funds to attract a very high-flying candidate. There is no one on the present staff who either stands out as an ideal candidate or who wishes to step up a level. What do you advise? A Are you sure you want to take a back seat? You might be 65 and think it is time to relax but my guess is you still have plenty of drive, and the business is probably your number one hobby. It is a pity that you don #8217;t have a current colleague who you could trust with the task of taking on most of your daily duties. This suggests that you are the sole driving force behind your success, and that you find it difficult to delegate. Are you sure you will be happy to settle for the role of chairman while working alongside a brand new chief executive, who is paid a salary that is likely to soak up most of the profit for performing a role that takes away a lot of your pleasure? Frankly, if you decide to trust the future of your business to an outsider, you need a lot of luck. The chances are that it won #8217;t work. However good someone seems at an interview, and whatever the credentials on their CV, a lot of critical appointments end in disappointment. Despite the recent tough economic climate your business has done well, and when things recover you should do even better, but your success totally depends on your people, and whatever move you make for the next few years the business will still rely on you. If you really can #8217;t pick a possible successor from the existing team, recruit a personal assistant who you can train to do your job ndash; it might take five years before you can take a back seat but a gradual handover is much safer than taking a chance with an unknown outside candidate. Q It seems this Government, like the last one, is keen to tell employers to make their staff happy by being flexible about their working hours, particularly when they have children. Better publicly-provided childcare seems off the agenda, probably because it will cost too much. So yet again, it is employers that have to bear the burden. I wondered, if one of your male staff came to you and asked to take every other Wednesday off for six months as part of his shared parental leave plans with his wife, what would you say? A I think most business leaders (myself included) have been too quick to criticise legislation that is welcomed by most of our workforce. Ian, a friend of mine who has a fast-growing transport business, has his own cynical view of new employment legislation. quot;What next? quot; he asks. quot;Perhaps after the maternity and paternity perks Europe will go for grandparent leave. If so, Eric in the warehouse, who has five fertile children, will never be at work. quot; Ian might as well face up to reality, employees have steadily acquired improved conditions over the last 50 years, and the trend will continue, so it is best to have a reputation for being ahead of the game by giving colleagues a better deal than they can get elsewhere. These days employees have the right to make a request for flexible working. They can ask for a different working pattern, but you don #8217;t have to agree to their proposal. Customers expect our shops to be open on a Wednesday, so, if the colleague #8217;s absence makes it impossible to cover the shop and there is a serious threat to business, it is perfectly proper to say no. But our office colleagues can fix their own timetable. As long as the job gets done we are happy to fit in with their life outside work. Employment legislation works best if it is applied with a heavy dose of common sense. HR departments should never be allowed to lay down the law. Inspirational entrepreneurs don #8217;t need legislation, they already know that providing extra benefits to their colleagues is very good business. http://www.timpson.co.uk/blog/article/55/don-t-hire-a-superstar-to-take-over-take-your-time-to-train-someone- http://www.timpson.co.uk/blog/article/55/don-t-hire-a-superstar-to-take-over-take-your-time-to-train-someone- Q I started a small charity, in Somerset raising funds for able and disabled young athletes in their quest to be part of Team GB for the 2012 London Games and beyond. Due to the generosity of the trustees it has incurred no costs whatsoever, all money raised has gone to the applicants and to a long-term Healthy Living fund. However, being based in a county far removed from London and the golden triangle of the SE we have great difficulty in raising funds. While I appreciate this is not the usual type of question you get asked, I would welcome your advice. A I admire your determination but begging for funds can be a real bind. I expect you #8217;ve tried to tap leaders of your local rich list, especially those who have set up a charitable trust, and you have probably considered a fund-raising ball (a lot of work but with a raffle and auction can make good money, even if too much goes to the caterer and the man who puts up the marquee). I #8217;ve done well with sponsorship ndash; it took a long time to complete this year #8217;s London Marathon (I won #8217;t be doing it again!), but I was amazed at people #8217;s generosity. We concentrate on causes in which we are closely involved. The work we do to recruit people straight from prison and our Chefs #8217; Academy that will open next year in our new pub/restaurant the Oyster Catcher at Rhosneigr on Anglesey are funded internally (frankly it #8217;s a lot easier to put your hand in your own pocket than raise money from friends or apply for government grants). Our company charity is After Adoption, a Manchester based charity that provides fantastic support to adoptive parents and their children (as both foster carers and the parents of adopted children my wife Alex and I know only too well why the help it provides is so important). Fortunately, we have developed a quirky scheme that has already raised over pound;2.5m. Our shops do a lot of little tasks like putting holes in belts and minor sticking or stitching. We used to do these jobs for free, but now shop colleagues ask their customers to quot;put pound;1 in the charity box for After Adoption quot; this simple idea raises about pound;6,000 a week (to which I add the fee the Telegraph pays me to write this column). Fund-raising needs personal passion to produce success ndash; put your personality into the campaign. The more innovative your approach the better you are likely to do. Why not get your potential Olympic competitors involved ndash; run a special sports day, write a regular newsletter to keep supporters in touch with their progress, or even take bets on how well your superstars will do. http://www.timpson.co.uk/blog/article/54/be-innovative-when-it-comes-to-fund-raising http://www.timpson.co.uk/blog/article/54/be-innovative-when-it-comes-to-fund-raising Q Apparently I can apply for a job just by sending my LinkedIn profile. All well and good, but I feel that might look a bit unprofessional. And do I really want the personal detail that #8217;s in a CV on a site the public can access? Would you ever consider accepting job applications in this way? A I #8217;ve looked at LinkedIn and I can understand the attraction to a networking executive who hopes to progress by moving from company to company. We almost exclusively appoint from within. All of Timpson #8217;s field management team started as apprentices. The only executives who join us from elsewhere come to specialist roles and even for outsiders we do not take much notice of their CV. As long as they have the basic qualifications we then base our selection on personality ndash; after face-to-face contact, not psychometric testing. Recently, a few friends have asked me to comment on their CVs. Each one had written a standard document full of qualifications but devoid of personality. The politically correct public service approach to appointments has caused the problem. One friend, who works for a local authority, thought it illegal to make any reference to her age, sex or marital status so she had written a sterile list of roles, training courses and academic qualifications in words only a public servant would use. Make sure your CV reveals who you really are. Put in some pictures and paint your personality. Your application must stand out. If the prospective employer rules you out because you have broken the rules that #8217;s fine. Do you want to work for a company without the courage to consider an applicant who shows a bit of character? Don #8217;t use a professionally created CV, write your own. Q My ecommerce business suffers a lot of what my accountant tells me are seasonal variations, although I suspect I #8217;m also guilty of not getting the ordering balance right. Sometimes products fly out of the doors and I feel like I #8217;m over-trading, while at other times it looks like I #8217;ve got too much cash tied up in stock. How do you manage? A Fortunately, shoe repair and key cutting do not need any fancy stock control, but in my early career I was involved in selling shoes. My role was to buy ladies #8217; fashion footwear. In the days before clever computers we had our own homespun way of dealing with a business dependent on fashion trends, seasons and the weather ndash; not helped by customers having different-sized feet. If we selected the wrong styles, bought too much, too late or got caught out by wet summers or warm winters the result was lower sales, large stocks, big mark-downs and low profits. A combination of experience, common sense and keeping in touch with the weekly trends got us by. As a fashion buyer you are bound to follow your flair, but don #8217;t get carried away. History hides plenty of hints on what will sell well next season. At least 50pc of my buying was based on best-sellers from the previous year ndash; I thought I was playing safe but there were bound to be surprises, even the pundits can #8217;t predict which fads will appeal to the public. The secret is to launch your range early in the season and watch what sells. Every week I studied sales statistics and spent one day visiting shops to talk to staff who met our customers. A buyer is almost always unpopular. Select the wrong styles and you #8217;re blamed, but don #8217;t expect praise when you pick a winner ndash; you probably haven #8217;t bought enough. Q I have trouble attracting the right quality of junior candidate to my business. The work is pretty basic but I do expect commitment and social skills, though that often seems too much to ask. Any tips on how to advertise vacancies to fill junior roles? A The first thing to do is make the job more exciting as you paint a pretty depressing picture of a humdrum role. Do you make them feel special? Do they have a bonus scheme? Are there promotion prospects? Do you give them any treats? Ask yourself this before you recruit more people into a dead-end job. We seldom, if ever, advertise. We are lucky to have nearly 900 shops where prospective candidates can pick up an application form, so a lot of our new recruits walk in off the street. However, 50pc of our new starters come from existing staff recommendations through our Introduce a Friend scheme. When the recruit has worked with us for 16 weeks the friend gets pound;200 with a further pound;300 if they stay for a year. There are loads of good young people around (we also find plenty through Job Centres) but you must be prepared to interview five duff candidates before finding a decent prospect. Keep interviewing even if you don #8217;t have a vacancy. Put the good ones on a waiting list and if one is outstanding put them on the payroll straight away ndash; you can always find space for a superstar. You say the work is pretty basic but it is often the people in the most mundane roles that make you the money. The better the quality of your recruits the better your business will be. http://www.timpson.co.uk/blog/article/53/paint-a-picture-with-your-cv-instead-of-supplying-a-sterile-list-of-facts http://www.timpson.co.uk/blog/article/53/paint-a-picture-with-your-cv-instead-of-supplying-a-sterile-list-of-facts Q: I rsquo;ve just had two large customers push out payments terms to 120 days and have had to take it on the chin. I rsquo;m not a bank and need to manage my way out of this situation but they represent 40pc of our total sales. What would you do? A: Any customer that asks for 120 days credit must either be immoral or in trouble. Unfortunately, you may have to continue trading with them over the next few months ndash; but make sure they don rsquo;t feature on your long term list of clients. If they need so much time to pay you have to wonder whether they are heading for administration. If they are purely taking advantage of their buying power, look for new clients to take their place. You can rsquo;t afford to create a successful trading partnership with a bully. You are dealing with some short sighted account executives who must be pretty dumb if they are willing to drive their key suppliers out of business simply to buy an extra bit of credit. I totally understand that you don rsquo;t want to ditch them straight away ndash; however satisfying that might be ndash; but there are a few things you can do to get your own back. Quietly stick up your prices to pay for the extra financing cost. Use a bit of stealth to put a few extra pounds on each invoice ndash; like a delivery charge, or an order processing cost. Put them down the pecking order by giving a better service to your other, prompt paying, customers. Leave them off your hospitality list ndash; go to Goodwood without them. Buying and selling is best done in partnership, both sides must gain from the relationship. Abuse of buying power breaks that bond. Be patient, you will almost certainly get your chance to gain the upper hand. Revenge is sweet. Q: I rsquo;m reading a lot about #8217;blood on the high street rsquo; but demand at my small chain of shops is holding up quite well. Our problem is space ndash; I rsquo;m considering opening up temporary #8217;pop up rsquo; shops, as a short term way of taking advantage of eager landlords ndash; do you think this is a good idea or could it damage my brand? A: #8217;Pop up shop rsquo; is a trendy term that has appeared in the last couple of years, but I am not sure what it means. We are opening a number of new shops in supermarket car parks that literally pop up overnight but these are permanent extra outlets ndash; I assume you are contemplating temporary lets in some of the empty units that we now see on nearly every high street. Short term premises are fine for some retailers such as Christmas shops or sellers of fireworks. Over the last year our Max Spielmann photo chain has successfully occupied several empty shops for three week photo shoots ndash; in Winsford we did so well we subsequently rented the property on a permanent basis as a fully equipped branch. But do you really want temporary shops? If you need more retail space, now is the perfect time to expand into bigger shops in better sites. A welcome wave of reality has swept over retail landlords, rental values have fallen and deals can be done at sensible rents with rent free periods and tenant breaks ndash; not just for a few weeks but tied in to a proper lease. If you have money in the bank and a retail format that works, get yourself a good retail property agent and go shopping for new shops ndash; there will never be a better opportunity. High street shopping is not all going to be swallowed up by the internet but it will change as old fashioned failing fascias are replaced by retailers with something new to offer. Sounds like you could become one of the new class of expanding retailers ndash; not by taking pop up shops but something much more permanent. Go for it. Q: If the law told you to use an independent mediator when faced with an employment dispute, do you think it would make any difference? A: When dealing with a disgruntled colleague we find mediation much better than being dragged by the complainant all the way to an employment tribunal. We believe that most problems are best resolved by a blunt face to face chat. Frankly if you find that a colleagues rsquo; best performance fails to come up to the standards of your business it is right that they should be asked to go as pleasantly but as quickly as possible. For the benefit of your loyal star performers you should get rid of the drongos as soon as you can. But most companies beat about the bush believing that they have to follow the advice from the guys in HR and their employment lawyers. As a result offices have personnel files full of correspondence that is little more than lies. Warning letters and performance management programmes, which claim to help unsatisfactory employees to up their game, are hiding the truth. They are part of a long winded process designed to get the colleague to go by preparing the perfect paper trail that, if necessary can be produced at a possible tribunal. I would rather ignore the advice of nitpicking lawyers and be straight with our people. Open honesty works for us but if we can rsquo;t solve the problem ourselves outside mediation makes perfect sense. It must be better to have a meeting of minds with a mediator who costs nothing than to have an expensive meeting in court. http://www.timpson.co.uk/blog/article/52/credit-terms-of-120-days-signal-trouble-ahead http://www.timpson.co.uk/blog/article/52/credit-terms-of-120-days-signal-trouble-ahead Business Secretary Vince Cable identified some retail regulations to remove as part of the Government #8217;s Red Tape Challenge last week. If you could remove just one regulation, what would it be? Although we don #8217;t sell liqueur chocolates or fly spray (which will now be free from red tape) any reduction in the rules must be welcome. It is common sense to get rid of petty regulations, but to make a real difference we need more freedom and less government. Wouldn #8217;t it be wonderful to be in a world of simplicity with a tax and benefit system which is so uncomplicated everyone can understand it? Despite this week #8217;s announcement plenty of red tape remains. A list of all the rules and regulations, from tax returns to waste disposal, that need to be followed by anyone opening a new shop probably puts off most potential shopkeepers. It is not surprising, therefore, that a lot of small retailers either ignore the rules or bend them, particularly when it comes to tax. It is common to discover that money doesn #8217;t go through the till and employees are paid in ready cash. This, of course, puts the bigger retailers at a competitive disadvantage, but the temptation for the small shopkeeper to cheat is caused by so many complicated rules, high tax rates and the number of part-time staff living off benefits I have a dream proposal ndash; replace all benefits with a single National Subsistence Allowance of pound;5,000 pa for every UK citizen. From birth, everyone would receive pound;400 a month and pound;200 on their birthday, no forms need to be filled, saving billions in administration overnight. That would fix the benefit system and by having a universal tax rate of 20pc (VAT, income, company and inheritance taxes) accountants would stop peddling avoidance schemes, tax havens would be deserted and revenues will rise. But, of course, this is a dream, far flung from reality. History shows that life continually becomes more complicated because legislators can #8217;t resist legislating, so the best we can hope for is that we are not given any new rules to replace those that are on the way out. How much responsibility is too much for someone on work experience? A friend of mine seems to be running his company with an army of interns, most of whom are graduates on derisory wages. Is this an opportunistic quid pro quo or is he exploiting a weak employment market? How do you handle work experience and internships? Work experience or internships can be more of a social enterprise than a smart business move. It is right to offer students from either school or college the chance to discover what work is about but it takes time and quite a bit of trouble to provide them with a proper programme, and, sadly, we seldom spot a future superstar. Helping out a friend by giving temporary work to a son or daughter who wants something to do between school and university can be more of a burden than you think. You meet them on the first day and smile as you pass by in the office, but one of your managers is lumbered with the task of finding a useful project for the young temp to do. We find it much better to put short-term placements in one of our shops and join our apprentice scheme alongside all our new branch colleagues. Interns can do a great job and I see no reason why they can #8217;t be brought in to tackle special projects that are on your quot;nice to do one day quot; list, but if they play a significant role they should become part of the permanent team. An intern should be seen as a welcome fresh pair of eyes not cheap labour. If they do a good and important job, pay them a proper wage. You hear about big name companies banning their employees from using the likes of Twitter and Facebook. Does my small business need a policy? Employees have always spent a significant chunk of the working day chatting to workmates, the difference today is that the internet now enables them to gossip in the company #8217;s time with friends right round the world. Facebook has its faults but it also gives you a hidden benefit. With employees constantly posting their opinions for all to see you have a good way of checking out the backstage gossip. It is a rare opportunity to find out what your team members really think about the business. Don #8217;t start drafting rules about social sites. Let them log on during the working day but watch what they are writing about the company and their colleagues. http://www.timpson.co.uk/blog/article/51/i-have-a-dream-of-a-simplified-tax-regime http://www.timpson.co.uk/blog/article/51/i-have-a-dream-of-a-simplified-tax-regime Q I recently sold some shares in my business and took on a new director, thinking it would be good to share responsibility and the input of someone with broader experience than my own, which would help grow my business. All he rsquo;s done so far, as far as I can see, is put a whole load of big company process into the equation, the most irritating manifestation of which is endless meetings in which nothing gets decided. How do you make meetings actually achieve something in your business? A: Sounds like you picked the wrong man, proving the point that plenty of professional managers spend loads of time on process, which gets in the way of progress. I am willing to bet that as well as bringing in a mountain of meetings your team is now heavily engaged in appraisals, budgets, extra management training and before you know it he will take everyone off on a retreat to draw up a forward plan and agree a mission statement. I have a theory that the fewer meetings you have the better you do. Certainly it is almost impossible to contact the chief executive of a business in trouble because he is constantly quot;in a meeting quot;. I was delighted to discover that Asda have a meeting room with no chairs. With everyone standing they keep the chat to a minimum. In our office all meeting rooms have a glass front so I can see who is round the table ndash; I am quite likely to barge in and ask what they are talking about. I acknowledge the need to meet up to make sure everyone knows what is going on but every meeting must have a purpose. It helps to have a chairman who sticks to the agenda with comprehensive papers issued well in advance ndash; no meeting should take more than two hours and usually an hour is enough. But beware, meetings must never be so important that they stop managers getting out of the office to visit the business. And never let committees run the company ndash; meetings are for discussion and communication, they should never make decisions. You already know you have made a poor appointment. Pay the price by buying back your shares at a big enough premium to persuade your process driven director to take his talents elsewhere. Q If the law told you to use an independent mediator when faced with an employment dispute, do you think it would make any difference? A When dealing with a disgruntled colleague we find mediation much better than being dragged by the complainant all the way to an employment tribunal. We believe that most problems are best resolved by a blunt face-to-face chat. Frankly, if you find that a colleague rsquo;s best performance fails to come up to the standards of your business it is right that they should be asked to go as pleasantly but as quickly as possible. For the benefit of your loyal performers you should get rid of the drongos as soon as you can. But most companies beat about the bush believing that they have to follow the advice from the guys in HR and their employment lawyers. As a result offices have personnel files full of correspondence that is little more than falsehoods. Warning letters and performance management programmes, which claim to help unsatisfactory employees up their game, are hiding the truth. They are part of a long-winded process designed to get the colleague to go by preparing the perfect paper trail for a tribunal. I would rather ignore the advice of nitpicking lawyers and be straight with our people. Open honesty works for us but if we can rsquo;t solve the problem ourselves outside mediation makes perfect sense. Q One of our salespeople recently asked to go on a health and safety course. I let her, but she rsquo;s now being ridiculously prescriptive and upsetting everyone. Last week, she removed all our desk and tower fans, saying they rsquo;re a fire risk. Since our office isn rsquo;t air-conditioned, that hasn rsquo;t been a popular move. I want to intervene but am also scared of falling foul of regulations I don rsquo;t understand. How do you cope? A This problem must be dealt with straight away. You probably think that your health and safety zealot is a troublemaker but before jumping to conclusions check the facts ndash; she may be right. First find out if the fans are faulty. If they are, give her the credit for spotting a potential problem. But if she is just making sure you are following the regulations, check the legislation ndash; she could be confusing someone rsquo;s idea of best practice with a legal obligation. Explain to her that health and safety is best achieved by observant colleagues using their common sense rather than an obsession with nit-picking rules. If she doesn rsquo;t agree, it is time for her to go. You don rsquo;t have to put up with a colleague who refuses to toe the management line. But be careful, I sense trouble, put a foot wrong and you could end up at a tribunal. http://www.timpson.co.uk/blog/article/50/our-meetings-get-in-the-way-of-any-work-being-done http://www.timpson.co.uk/blog/article/50/our-meetings-get-in-the-way-of-any-work-being-done Q. Your column on safety raised interesting points. It is indeed outcomes that matter, not process. No amount of paperwork ever saved lives, it is the creation of a genuine safety culture where everyone understands their role and takes responsibility which delivers real results. How do you think we can inject more common sense into health and safety? Judith Hackitt, chairman, Health and Safety Executive A. It was a welcome surprise to discover you share my view of regulation. When I started in business 50 years ago women were paid less than men for doing the same job, staff used unguarded machinery and vindictive managers could fire people on a whim. For 25 years things got better with the introduction of equal pay, safer working conditions and a fair deal for employees. But for the past 25 years business has suffered from the growth of our fourth sector ndash; the rule creation and exploitation business. Much has been written about the growth of central and local government. In some areas the majority of workers are public servants paid out of our taxes, with only a minority of the workforce creating wealth. While the last Government was increasing the size of the civil service and introducing new laws the fourth sector found ways to exploit the legislation. The ldquo;no win, no fee rdquo; industry is only the tip of an iceberg made up of lawyers, consultants, insurers, training providers, accountants and civil servants. Laws produced to protect the individual are now exploited to provide work for an enormous party of parasites. ldquo;Best practice rdquo;, ldquo;governance rdquo; and ldquo;risk assessment rdquo; are music to the ears of this fast-growing fourth sector and guess who pays the bill? We do, in higher insurance premiums, legal fees and by funding activities we mistakenly have been persuaded are all legal requirements. It is a relief to know that you, Judith, criticise advisers creating pseudo regulations well beyond the legislation. But it is not easy to see how you can reverse the stampede towards a totally risk-averse, rule-driven existence. A good example is the PAT testing of electronic equipment. The law simply says businesses must ensure equipment is safe. The PAT test is put forward as ldquo;best practice rdquo; by consultants who do the testing, it is not a legal requirement. For several years we paid a specialist to test our equipment. I checked how well it was working and discovered we seldom if ever have a fault reported after a PAT test. In fact, every problem in the past two years has been discovered by our own colleagues. And that is the way it should be, a workplace kept safe by workers who take safety seriously and see it as a personal responsibility. We have cancelled the PAT testing consultant rsquo;s contract, saving over pound;25,000 a year. We have got so accustomed to living in a blame culture life now revolves around running as little risk as possible. We are wimps, happily letting the fourth sector walk all over us. I don rsquo;t propose yet more legislation, it is up to business leaders to show some leadership by challenging best practice when it flies in the face of common sense and put the fourth sector back in its place. http://www.timpson.co.uk/blog/article/49/-let-s-bring-common-sense-into-the-health-and-safety-culture- http://www.timpson.co.uk/blog/article/49/-let-s-bring-common-sense-into-the-health-and-safety-culture- Many years ago I had a client with about eight butcher #8217;s shops. When one of his shop managers went on holiday, Mr H. would go into the shop on Sunday and scrub down all working surfaces, floors etc. Come Monday morning, a lady comes in for two chops. quot;Would you like a sausage to go with them and some bacon? quot; he would ask. And then he #8217;d say: quot;Madam, I #8217;ve some lovely this season #8217;s English lamb coming in on Thursday. See you then. quot; He said it was so easy. When the manager came back from holiday, there would be left a note of the weekly takings before and after his holiday. In a butcher #8217;s shop 100pc of the gross profit on extra sales adds to profit. Your story should come as no surprise to any established retailer. The High Street is having a tough time at the moment but they are still plenty of winners, and for most the formula for success is excellent customer service ndash; by having shops run by excellent people. If sales in one of our shops start to suffer there could be a number of excuses ndash; road works, increased parking charges, a new supermarket on the ring road and many more. But in my experience it is nearly always the people who work in the branch that make the difference. Ever since shops went over to self-service with computer-controlled tills with shop assistants paid the minimum wage many shops have forgotten the importance of customer care. But the influence of a superstar is as powerful as ever (I have seen sales figures move by 50pc within a week). Top people make such a difference that we often move colleagues around to check each shop #8217;s turnover potential. We call these moves our quot;busman #8217;s holiday quot; ndash; a spell in another branch to show whether you can improve its performance. We also use a number of our most experienced managers as sales testers ndash; if they can #8217;t increase the turnover we know we aren #8217;t missing any money. Your client with his chain of butchers not only increased the turnover, but also, by mucking in, will have gained a lot of respect. Managers who understand exactly what happens on the shop floor and why have a much better chance of winning over the hearts of their workforce. You have made reference to area managers holding very important positions in your company. Where do you find them and how do you make sure you keep the good ones? Our area managers are the engine room of the business. Together with a team of assistants and mobile managers they pick the people who run our shops, provide the basic training and give day-to-day support. They don #8217;t go around wearing a suit and carrying a briefcase to signify their position ndash; they earn the respect of co-workers by mucking in and making the tea. In their support role they change the rota when a colleague is ill, sort out any stock problems and are often a shoulder to lean on when personal problems take over a team member #8217;s life. It is our area managers who have made our upside-down management style work and in the process have produced a company culture that creates a buzz in most of our shops and seems to give our customers the sort of personal service missing from much of the High Street. We only recruit from within. All our area managers started as Timpson apprentices. As a result they receive the respect that comes from knowing the job inside out, and instinctively understand our unique way of working. It makes such a difference having this key collection of managers who all quot;get it quot;. They are paid what I believe is a good salary, plus a bonus based on area profit. They have the freedom to organise their area in their own way. It is a demanding role, which doesn #8217;t suit everyone (I think it gets more difficult to keep up the pace as they get older). For some the going gets too tough, but we don #8217;t part company. We currently have 16 ex-area managers who fill a range of roles, some return to branch management others include the warehouse manager and our director of people support (other companies call it HR). Area managers get all the perks we can think of like their birthday off, free stays at our holiday homes, and a final-salary pension. Our twice a year area conference involves a minimum of talking, most of the two days are spent enjoying competitive fun ndash; like go-karting and abseiling. Last year, they defied the volcanic dust and went on a four-day trip to Iceland. Only two of our area managers have left the business in the past 15 years ndash; and they both came back. http://www.timpson.co.uk/blog/article/48/serving-up-great-customer-service-can-increase-sales-by-50pc http://www.timpson.co.uk/blog/article/48/serving-up-great-customer-service-can-increase-sales-by-50pc Q My husband is over 65 and has worked at a golf club over the past 10 years, never having a day off sick. As a caddie master this job entails taking bookings on the computer, together with acting as a ranger over the two courses. In March the club wrote to say they have now put in a retirement date for him and he must leave at the end of September. He has the right of appeal which he is going to do, but he feels it will be a formality. My question is, there are six caddie masters and the club is keeping four. They have given notice to the two oldest. The club is now taking on four young women to do the online bookings of tee times which means they only need four people to do the ranging on the course. My husband thinks that means he is being made redundant as they have employed new people to do part of his work and therefore should be entitled to redundancy pay. Basically, he feels that they have used the new age rule [abolition of the default retirement age] to get rid of him when in actual fact they are employing new people to do part of his work. A Although the club has acted totally within the rules your husband has been the victim, rather than the beneficiary, of a new law meant to help older people. By giving notice before April 6 2011 of their intention for your husband to retire before October 1 2011 the club has kept to the letter of the law and any appeal process is likely to be a mere formality. After 10 years of service it seems such a pity to end on a sour note, but many others are suffering from this tactic which is being used to avoid the new employment laws applying to colleagues close to retirement. (After October 1 an employer won #8217;t be able to force anyone to retire because of their age). This sort of insensitive decision is the consequence of the business world becoming so dominated by legislation that it follows the rules, regardless. Sticking to the law may be theoretically correct but I don #8217;t believe it is always the right thing to do. Really good employers have the courage to follow their conscience and, when necessary, break the rules, ignore the employment lawyers and give their colleagues a fair deal. Q My sales director is the most experienced in our industry but I think he has been in this job far too long. In a fast changing world, we need a fresh approach. Should key people change their jobs frequently to prevent staleness and to introduce new thinking? A I #8217;d be very reluctant to move your industry expert into an unfamiliar role, after all I wouldn #8217;t want to give [Carlos] T eacute;vez a different role and make him goalkeeper. But I do accept some people can get stale and run out of ideas. If you do decide to make a move you will create two tricky problems. First you must find the right new role for your superstar and then you need to find a replacement with the talent to fill his shoes. Don #8217;t change a winning team just because some management guru says that job rotation is a good tactic. If in doubt leave things alone. Q You criticise government bodies and the public sector for wasting money on management consultants but surely in these difficult times, these bodies need professional advice and expertise more than ever? A If money is spent wisely I don #8217;t have a problem. My beef is about projects, both public sector and private, that fly in the face of economic sense. They appear in several forms. First the governance and box ticking. We seem to live in a world where no decision can be made without a second opinion. Plenty of people paid six-figure salaries are unwilling to rely on their own judgment and won #8217;t move without the comfort of a consultant covering their back. Secondly we have the consultants employed to deliver gold-plated compliance. Beware of anyone who says you have to get an outsider in to fulfil your legal responsibility. Watch out for the suspicious phrases ndash; quot;Everyone has to do it quot; or quot;It #8217;s in the regs quot;. If it doesn #8217;t feel like common sense check the legislation: nine times out of 10 it won #8217;t be there. Then there are the consultants called in to review strategy and draw up a forward plan. I would like to know what the chief executive is doing? Why does he have to bring in someone else? I accept there are specialist situations and certain areas where outside help is needed, but calling for assistance should never become a habit. I would be fascinated to know, department by department, local authority by local authority, what percentage of the public purse is spent on outside agencies. The current fashion for management by process makes life too complicated. Too many managers think you can achieve success by importing a golden set of rules. They don #8217;t realise that management is an art not a science. http://www.timpson.co.uk/blog/article/47/golf-club-8217-s-play-on-retirement-is-par-for-course- http://www.timpson.co.uk/blog/article/47/golf-club-8217-s-play-on-retirement-is-par-for-course- Q We #8217;re a retailer and need to shift some stock as we #8217;ve over-ordered. What works best? A The best stock clearance sale I ever had was in 1975. At that time the Timpson shoe shops were part of the UDS Group (along with other retailers like John Collier, Richard Shops and Allders). I had recently been put in charge and like many new managing directors I was keen to clear the decks by attacking a lingering legacy of slow-moving stock. It was a bold move. I closed all 250 shops for two days, completely covered the windows with posters and advertised on television: quot;Our shops are shut to prepare for our biggest sale in 110 years ndash; it starts at 10am on Thursday. quot; On the Wednesday afternoon I received a pretty tricky phone call from UDS chairman Bernard Lyons who thought I must have lost the plot. quot;How can you make money if all the shops are shut? quot; he wanted to know. I was wondering whether he was right when I was in the centre of Sheffield at 9.30am on Thursday. Our five city shops were still shut and shoppers were walking past the poster-covered windows without, seemingly, taking the slightest notice. At 9.45am queues started to form and within 20 minutes I knew my gamble would pay off. In the next three days we set an all-time sales record, beating a figure set over a full week the previous Christmas. So the secret is simple, set some dramatic price reductions and surround them in drama. But be careful ndash; you can become a victim of your own success. My quot;super sale quot; cleared so much stock that for the following six weeks I didn #8217;t have enough shoes to serve our regular customers. Gerald Ratner took a lot of trade from his jewellery competitors with his cut-price tactics. One year he decided to start his January sale at the beginning of December. Turnover was phenomenal ndash; it had to be, he was taking a big chance slashing margins during the peak pre-Christmas period. It worked so well that next year Ratners ran another pre-Christmas sale, with bigger posters and deeper discounts. It worked twice but didn #8217;t do the trick the third time. Price-cutting probably caused as big a problem for Ratners as the famous quot;crap quot; comment to the Institute of Directors. If you have stock that isn #8217;t shifting, then slash the price ndash; but don #8217;t get addicted. For many retailers price-cutting has become a drug, and, as a result today #8217;s high street has too many quot;special offers quot;. Early in June some shops, like Clarks, had already started their summer sale. It #8217;s fun to look at the high sales figures that accompany the cut-price promotions, but it #8217;s much more satisfying to sell stuff at full margin and make loads of money. I enjoyed the dramatic price offers in my past, but I am happy that these days Timpson is totally involved in the selling of services ndash; no fashion, very little merchandise to worry about and never enough mark-downs to run a sale. Q What works best in your experience to make clear to junior members of the team that they have broken the company #8217;s rules without discouraging them? AFor a start, make sure you haven #8217;t got too many rules. You don #8217;t want to employ the sort of people who are so lacking in spark that they need a set of standing orders to cope with every possible problem. Try cutting back on the regulation and encourage initiative. Our branch colleagues only have two rules to follow: look the part (turn up on time and wear our uniform; and put the money in the till. If you have a process to prescribe every part of the job you might be killing off the keenness of a recruit who could turn into an excellent entrepreneur. But some new starters find it difficult to stick to our modest list of regulations. I like people with personality and admire many of the rebels who survive through sheer force of character, but there is a limit. If someone fails to fall in line and refuses to become part of the team, don #8217;t be nice to them, be blunt. Most prefer a frank chat in the back room to a carefully worded letter from personnel. Good bosses are firm but fair. Your main role is to support your colleagues and help them to do their job as well as they can. That includes dealing with any colleague who is letting down the team. Don #8217;t be diplomatic. Tell them the truth, give it to them straight and say it straightaway. Rules won #8217;t work if you allow the fools to undermine your authority. This is not a debate, either they agree to toe the line or they leave. If they take exception to a sharp reminder which points out the difference between right and wrong, the quicker they work for someone else the better. http://www.timpson.co.uk/blog/article/46/sales-to-clear-stock-can-be-fun-but-beware-of-getting-addicted-to-them http://www.timpson.co.uk/blog/article/46/sales-to-clear-stock-can-be-fun-but-beware-of-getting-addicted-to-them Q. I run a business supplying specialist services to the public sector that has been savaged by the cuts. We #8217;ve gone from 20 people 18 months ago to just me and one part-time, long-standing employee ndash; and she is just about to go on maternity leave. The company is solvent ndash; just ndash; and I #8217;d really like to quietly close it down, but under maternity legislation I cannot make the remaining employee redundant, meaning I have to continue trading or go into liquidation. The former is not practical and the latter will leave a stain on my record as a director. What should I do? A. I am sorry to hear your story, but I can reassure you that it will have a happier ending than you are contemplating. Employers get mislead by the many myths about employment law, and matters surrounding maternity leave are often misunderstood. Happily, the law is on the side of common sense. If the job held by a colleague on maternity leave becomes redundant then that colleague has first option if there is a suitable alternative role elsewhere in the organisation. But in this case there is no alternative to offer. Your intention is to close completely. You are not just leaving one site and moving elsewhere (in which case you would have a job to offer). You are not selling ndash; this would trigger a Transfer of Undertakings (TUPE) ndash; you are simply shutting up shop. As you have reached the point where there is insufficient work to maintain the employment of your one remaining colleague then it is a clear case of redundancy ndash; so it doesn #8217;t make any difference that the sole survivor is pregnant.Tell your colleague, making it clear that, as a result, her contract will be terminated on the grounds of redundancy. Don #8217;t just inform her in writing, a cold letter in legal language can easily be misinterpreted, she deserves a face-to-face conversation. There is no need to incur legal fees. Why use a lawyer when there are plenty of legitimate web sites to guide you through a relatively easy process for free? Q. You mention that you borrow ideas from other companies. Can you say which ones have worked for Timpson and the ones which didn #8217;t? A. It pays not to be proud, there is no shame in pinching ideas from other people - it #8217;s the cheapest form of advice available. Keep an open mind and do a lot of listening. It is surprisingly easy to get people to talk about their business. A friend introduced me to a secret dinner party game he calls quot;social cricket quot;. The rules are simple, every time you ask a question you score a run ndash; if someone asks you a question you lose a wicket. It is easy to rack up a decent score. If you are lucky, you will learn the secret of someone #8217;s business success. Occasionally you find a great idea inside a book. I will always be thankful that I read The Nordstrom Way by Robert Spector and Patrick D. McCarthy which introduced me to Upside Down Management, transforming the way we run our business. We would never have got so engaged in watch repairs without outside advice. We took the idea from Millies Cookies to give all our colleagues their birthday off, and from Richer Sounds we were introduced to free-stay holiday homes. http://www.timpson.co.uk/blog/article/45/maternity-laws-are-on-the-side-of-common-sense http://www.timpson.co.uk/blog/article/45/maternity-laws-are-on-the-side-of-common-sense Q We are switching away from a key long-standing supplier because we can get a better price and hopefully service elsewhere. How do you handle it? A I believe in cultivating long-term relationships with our suppliers, by developing a partnership based on an open exchange of information. But from time to time the bond between buyer and seller breaks down. Often the supplier simply fails to keep up with the market or sometimes they get too greedy. It #8217;s often a mistake to drop a supplier on a whim. It isn #8217;t just a question of price, think about service and after-sales support. Before making the decision don #8217;t just work out how much money they are making out of you, think about how much you make from the business you do together. The rival salesman who has offered an amazing price that you feel you can #8217;t refuse may not have the infrastructure to deliver his promise. It is a big decision ndash; you are ending a long-term partnership, but if you have lost faith in your partner it is time to act. Check the contract to make sure you are not about to trigger a penalty clause and look at the purchase ledger ndash; is there a credit balance to cover compensation for the future return of faulty goods? Inform them face to face, be blunt but be friendly, and tell them the real reasons why they have lost the contract. The news will almost certainly come as no surprise, especially if they have been getting greedy margins at your expense. Listen carefully to their side of the story but be firm ndash; it is unlikely that they are going to tell you something new. You have taken a lot of time making your decision so stick to your guns ndash; but nicely. You never know when you may want to do business with them again so try to part as friends. Q How long do you expect repairs to your shop fronts to take? I was in Lincoln yesterday lunchtime and noticed that the Timpsons lettering had been largely destroyed with only some of the broken letters visible. A Thank you for alerting me about our problem at Lincoln. I checked with our help desk which confirmed that the quot;fascia theft quot; occurred the night before you spotted it. I was pleased to find our system works and that we have already got the replacement in hand. I hope the local contractor will soon have done the job. We have a simple process for branches to follow whenever they have a problem ndash; they ring our help desk and speak to Sarah or one of the team who have the freedom to sort things without referring to a set of rules. But the proof of any process is whether it works in practice and that always depends on people. Your email gave me the chance to check that we are giving our branch colleagues the support they need. nbsp; http://www.timpson.co.uk/blog/article/44/is-it-time-to-end-the-relationship- http://www.timpson.co.uk/blog/article/44/is-it-time-to-end-the-relationship- Q I am interested in how you measure the financial performance of your private company. Presumably you have sales and profit targets for each of your 800 plus shops, but do you have KPIs for the group as well as cash flow, profit and sales targets? If so, how do you chose some indicators over others? A A long time ago I learnt that having a lot of figures doesn rsquo;t mean you are better informed ndash; it just makes life more complicated. In the 1980s, we set budget sales figures for every shop every week, our Finance Director insisting that individual shop numbers added up to his company budget. It was a tortuous process that took weeks of area management time and although head office hoped the plan would provide the perfect incentive, it made no difference to our performance. Sales never seemed to follow our forecast ndash; our customers clearly didn rsquo;t know how much they were expected to spend! I scrapped the budgetary process and for the last 20 years we have compared branch performance with last year ndash; it has saved us a lot of bother. Life at Timpson has little to do with budgets and we don rsquo;t have KPIs. We have bought several loss making companies and found that every one of them was monitoring minute detail from Head Office ndash; Sketchley, the dry cleaners, were keen on keeping a count of their ldquo;supercrease rdquo; sales; Max Spielmann, the photo chain, kept an eye on the average price of picture frames; and shoe repairers Mr Minit was controlling costs so closely that they recorded every shop rsquo;s expenditure on postage stamps. While management concentrated on the detail they seemed to miss out on the big picture. Instead of studying their computers they should have visited more shops to talk to the colleagues who met their customers. Of the few figures I receive, the most important is the bank balance compared with the same day last year. It gives me a daily health check on our business. I get a daily report on all the new shops we have opened in the last three months and a weekly sales report for the company, in total, and by department. We revise our profit forecast every week and produce management accounts every month, but I seldom look beyond the front page summary. The only time I ask for detail is when we are introducing a new service ndash; like our current growth in portraits, locksmith work and complicated car keys. If you know which shops are successful you can pass their secret around the rest of the business. With little to look at it is easy to see how the company is doing and I have plenty of time left to visit our branches and discover what is really going on. Q Is it a bad time to open more shops? I want to grow my business and increasing sales through the current shops is possible but looking very slow and marginal. Opening up two or three more without increasing my central costs could, on paper, be significant. Rents, for example, are favourable. But is it prudent to wait for better times? A Assuming you have a successful formula, this is the perfect time to expand. I have never known landlords to be so open to negotiation, and the employment market is so tough you shouldn rsquo;t have a problem picking the perfect personalities to run a bigger business. But beware ndash; don rsquo;t push the boat out unless you are totally confident that your retail format will still be a winner in five years rsquo; time and don rsquo;t buy expansion with borrowed money that you can rsquo;t pay back. You are right to point out that every extra profitable shop makes a contribution that goes straight to your bottom line ndash; as long as you keep control of your overheads. It takes the profit from one of our average sized shops to pay for the cost of an extra person in Head Office. This thought has spurred us on to keep a tight grip on central expenditure. As a result, although we run over 300 more shops compared with three years ago, there are five less people in our office. If you have a successful formula, this is an excellent time to expand. Doing more of what you do well is an excellent way to make more money. But take care to pick the right people to put in each new shop. Don rsquo;t take chances, transfer a proven superstar from an existing outlet to make sure your new customers get great service from day one. Q What rsquo;s the worst selling product line that you have personally championed at Timpson and have you thought about why it didn rsquo;t work? A At the height of the dotcom boom I backed a brave scheme devised my son James, then a few years out of university and an enthusiastic young manager full of funky ideas ndash; he called this one #8217;CityCobbler.com rsquo; The plan was simple. City customers could get their shoes repaired without even leaving their desk. An email would bring young Timpson colleague Keith, a keen motorbike rider, speeding to your office to take your shoes to our nearest shop. While you wear a pair of loan shoes the job is done and within an hour your footwear is returned as good as new. Initial results were excellent. Two customers on Monday, three on Tuesday and five on Wednesday. I was dreaming of dotcom success and owning a new business with a multi-million stock market value. And Keith was happy spending much of the day on his bike. On Thursday a journalist from The Evening Standard was due to test the service for a feature in Friday rsquo;s paper. Sadly on Thursday Keith fell off his bike on the way to work and broke his collarbone and the new service was suspended. The newspaper saw the funny side of our embarrassment but their article proved that not all publicity is good news. City Cobbler was a one week wonder. By the time Keith returned to work our little bit of goodwill had evaporated. Like a lot of the dotcom ideas it relied on people power for success. I am pleased to report that Keith still works for Timpson, you will find him in one of our City branches, but these days you have to take your shoes to him. http://www.timpson.co.uk/blog/article/43/studying-the-numbers-is-no-substitute-for-talking-to-people http://www.timpson.co.uk/blog/article/43/studying-the-numbers-is-no-substitute-for-talking-to-people I rsquo;m starting to get those panicky calls from friends who own businesses looking for reassurance that they are making the right business decisions in this tough economic climate. What rsquo;s your sense of how well the people running established companies are coping with the current trading conditions? There is sense in the suggestion that some of the best decisions are made during a downturn and it is probably true that many major mistakes are brought about while business is booming. When times got tough two or three years ago weak businesses were exposed, especially those with high borrowings. With the banks being tight it was bound to be a busy time for lawyers and accountants specialising in corporate recovery. But for most companies the recession has brought its benefits. The greater emphasis on cash control and a keener search to cut costs will bring massive benefits over the next few years. Good managers don rsquo;t panic, they stick to their strategy. When John Lewis experienced the dramatic drop in demand in 2008 they didn rsquo;t copy competitors who cut prices with pre-Christmas sales. They stuck to their principles, determined to do what they do well but do it even better. It was the right call. During a difficult time on the high street, John Lewis has done better than most. In a recession many managers see a world full of problems but a true entrepreneur still finds new opportunities. Carcraft, the car supermarket, faced with a dramatic drop in demand, launched webuyanycar.com and within months created a major new business and became Britain rsquo;s biggest buyer of used cars. Conditions might still be difficult but there are plenty of positive companies providing the green shoots that will stimulate our economy. I hear Mary Portas has been hired by Number 10 to come up with plans to revitalise Britain rsquo;s high streets. What should be top of her list? Although some observers can be critical of the current trend to appoint celebrity advisors, the appointment of Mary Portas should help to give high streets the higher profile they deserve. Mary Portas has a reputation for backing small independent retailers against the big boys and even though Timpson is most certainly a multiple I, also, would welcome measures that help small shops, especially brand new businesses. Half of the top retail names in 20 years rsquo; time have, almost certainly, not yet been invented. It is important for our quot;nation of shopkeepers quot; to make it easy for new entrepreneurs to set up shop. Retailers, big and small, are thwarted by too much tax, unnecessary red tape and a lack of bank support. We don rsquo;t need subsidies, government grants or training deals, but it would help if we had less bureaucracy. Timpson shop managers have a big advantage over their independent competitors. Our central office fills in all the forms, completes the tax return and ticks all the boxes on their behalf. While the independent is completing the paperwork our manager can concentrate on looking after his customers. Whatever our size no retailer needs a jobsworth to tell him what to do. Petty rules and regulations don rsquo;t help our prime aim of providing a great service and giving a better deal to our customers. Government and local government could do much more to make shopping a pleasure. Whether customers come by bus, bike, on foot or in a car we need shopping centres that are attractive, safe and accessible. Enlightened councils offer quot;free for an hour quot; parking and affordable bus services; and they help lively traders to promote their business. But too many local authorities see parking as a prolific source of revenue instead of realising that shops put the much-needed buzz into their community. Following the Portas appointment the press showed pictures of empty shops as evidence of a lingering property problem. Shops are empty because their rent and rates are too high. To attract new tenants some landlords and local authorities need to be more realistic and drop the occupancy costs. If Mary can come up with a solution that persuades new traders to reopen the empty shops then her appointment will have been well worthwhile. How often would you recommend a shop revamp? It can be expensive but I think customers and employees need to see changes from time to time. Take a look at a photo of the high street in 1960 (when I started in business) and you realise how much shops have altered. It is vital to keep your shops up to date but don rsquo;t change the look for the sake of it ndash; there is no need to spend a fortune to get the image right. The last time we had a major revamp to the look of Timpson was 16 years ago but each shop gets a minor change about every five years. There are three reasons why retailers have a refit: 1) to brighten the store 2) for a change of image 3) to increase turnover. Whenever we spend money I expect an increase in sales to justify the expense. Don rsquo;t confuse refits with housekeeping. You shouldn rsquo;t have to refit a store simply to keep it looking smart, but day-to-day cleaning doesn rsquo;t always come naturally to a craftsman cobbler. We ensure every shop has its spring clean by running a Perfect Day competition every year (an idea we borrowed from Asda) when each shop is checked out and the best wins a prize. Most of our refits coincide with the introduction or extension of a new service. In the 1970s key cutting made a massive difference and more recently watch repairs have became a major part of our turnover. Refits give everyone an excuse for performing better. http://www.timpson.co.uk/blog/article/42/the-recession-brings-benefits-in-terms-of-cost-cutting-and-cash-control- http://www.timpson.co.uk/blog/article/42/the-recession-brings-benefits-in-terms-of-cost-cutting-and-cash-control- Q The Government has repeatedly said that business must create more jobs to get the country out of this patchy economic recovery. Are there any incentives that would encourage you to create jobs? For instance, if companies received directly the unemployment benefit of an individual for the first three months of his or her employment with you, would you be more likely to take on extra people? A I have yet to find a government subsidy that is provided without strings attached. Three years ago we searched for a formula that would allow us to receive support for our apprenticeship training. We discovered that funds would only be offered if we changed our training to conform with government guidelines and the subsidy could only be claimed through a training agency. After 18 months it was clear that the training agencies didn rsquo;t understand the way we do business and that their process was more important than our apprentices. So we filed all the papers and forgot all about it. Although we were promised up to pound;1m a year, I would rather pay for the privilege of doing things our way So would we employ more people if a subsidy came with no onerous conditions? Probably not. We will only take on the people we need as an overstaffed business loses its buzz. It may sound strange but we have often found that by increasing the number of colleagues in a shop we reduce the turnover. Q I am 24 years old and have a retail sales job that I love. I must now move on as the company has no progression opportunities. Can you advise me when seeking a new job the order of priority I should give my pay, the training on offer, the strength of the company and to my future prospects? A If you don rsquo;t see a long-term future at your present employer I can understand your impatience, but you are young enough to spend as much time as it takes to find the ideal job. Pay is important. You must have in mind a minimum in mind ndash; fall below that and you risk stress that will affect your performance. Be realistic, no job is perfect, you seldom see the pitfalls before joining the payroll. But, bearing in mind the points that have put you off your present job, list the things that matter to you. Ask your friends about their jobs ndash; one may be able to introduce you to the ideal company. Or do a bit of research ndash; if you want to stay in retail you can find out much about possible employers simply by shopping in their stores. If you have the ideal company in mind apply for a job. Don rsquo;t wait for them to advertise, offer your services in a confident and innovative way. You probably will need plenty of patience and a lot of luck. Don rsquo;t expect the perfect position to appear straight away. And while you are hunting, hang on to your current job. http://www.timpson.co.uk/blog/article/41/job-creation-schemes-can-see-a-business-lose-its-buzz- http://www.timpson.co.uk/blog/article/41/job-creation-schemes-can-see-a-business-lose-its-buzz- Q One of my shops is in a small town which is becoming more run down each week. I am sure you will be familiar with the scene. Shops are closing and customers are disappearing. I have three other shops, which can support this loss-maker but not forever. When should I cut my losses and close the shop? A Cut out any loss-makers as quickly as possible but before deciding to close check that the shop really should be losing money. Textbooks say that retailing is all about location ndash; if you have a pitch in the perfect spot you are bound to do well. I disagree, in my experience the critical factor is people ndash; multiple retailers should aim to have a first class manager in every branch. There is no shortage of excuses when turnover is down. For years I rsquo;ve listened to the same reasons for poor performance... quot;car park charges have doubled quot;, quot;we rsquo;ve had road works for five months quot;, quot;a lot of local factories are laying workers off quot;. I often encounter the problem you appear to be facing: quot;the town is very quiet ndash; everyone rsquo;s complaining quot;, but often a change of personnel can prove there is a lot more business available. Before you throw in the towel organise what we call a busman rsquo;s holiday. Move the existing manager to another shop for a month and replace him with a superstar. If your top salesman takes no more money you know there is a fundamental problem with the property. It is tough taking the decision to close part of your company but if you are making a loss in a declining market, get out as soon as you can. Q I have read that you have recently completed the London Marathon. But at your age and with your responsibilities, is it sensible to put your business and family at risk by undertaking such an activity? A I did take part in this year rsquo;s London Marathon. I am not particularly proud of my time so you may well wonder why I bothered to enter. In March I was installed as Master of the Worshipful Company of Pattenmakers, which has a charitable fund and our main money-raising event is The London Marathon. A significant sum from the pound;55,000-plus we have raised will help provide specialist orthopaedic footwear for injured servicemen at Headley Court through an initiative established by our patron HRH The Duke of Gloucester.That was my excuse, but it was also a selfish move, my last marathon was in 1984 and I wanted to prove that at 68 I was not too old to do it again. As soon as I tried a bit of training I discovered that I can only run very slowly. But my training made me feel fitter (a medical proved this was true) and jogging gave me lots of time to think about the business. So, no harm done ndash; but my wife has told me I will definitely not do it again. Q I run a training company that shows government organisations how money can be wasted using consultants, and I then show these organisations what to look out for if the consultants rsquo; advice is bad. However, there are still times when these consultants rsquo; services are needed, such as guiding decision-making, costing of projects and getting short term specialist staff. Would you agree, and if not, what is the alternative? A You are right, there are times when it is best to bring in external expertise but that should be the exception. A few years ago I spent a week in a government department and was staggered to discover how most projects were handled by consultants. With third parties providing analysis, planning and project management, I wondered what was left for civil servants to do. I was told: quot;Our job is policy. quot; The use of outside advice is encouraged by the recent upsurge of corporate governance. To cover their backs, nervous executives are constantly seeking a second opinion. I see this as a pension scheme trustee ndash; the box ticking required by the Pensions Regulator provides plenty of fees for actuaries and accountants. Our process-driven world has been a breeding ground for consultancy. Try to get a training grant and you won rsquo;t be able to avoid using a training provider. Pitch for a government contract and you will need outside help to complete the pre-qualification questionnaire. Perhaps this is a good time for government to take a hard look at its use of outside resources. With costs being squeezed and public service jobs threatened, each department should publish the percentage of its budget that is spent on consultants. We now live in a world where consultants find lots of work ndash; but you can rsquo;t create success just by following advice and sticking to a set of rules, it is important to trust the judgement of an entrepreneur. Experts can help but it rsquo;s the individual flair within an organisation that makes the difference. http://www.timpson.co.uk/blog/article/40/when-is-it-time-to-cut-your-losses-and-move-on- http://www.timpson.co.uk/blog/article/40/when-is-it-time-to-cut-your-losses-and-move-on- Q. My company has a cash flow problem brought on not by the recession but by the extraordinary spell of fine weather in March and April and by this year rsquo;s sequence of bank holidays. Sales are significantly down as our customers have had other priorities. I do not know if these lost sales can be regained. Do you have similar experiences and, if so, can these lost sales be recovered? A. I used to hate the heat ndash; shoe repairs always do better when it rains, which makes sense when you think about it: puddles provide the perfect indication of holes in your soles. But since we bought Max Spielmann (the photo chain) I have a reason to enjoy the sunshine, people take more pictures on a hot weekend. Bank holidays might bring a bonanza for the DIY trade but they are bad news for both of our businesses. There is less traffic on the high street and, on the morning of the royal wedding, the country stopped shopping. The wedding was an unqualified success and we wish the royal couple every happiness, but Friday, April 29 was a miserable day for most retailers. The lost turnover is gone forever. Don rsquo;t expect a sudden spending spree to make up for the money missing from your till. However there is no need to worry about a temporary glitch, you can expect the odd poor month every year but if your business is fundamentally sound no long-term damage will be done. Periods of tough trading affect us all but they are only life threatening to companies that were already heading for trouble. Don rsquo;t expect much help or sympathy from your bank manager. He will expect you to manage your cash crisis and keep to the covenants whatever the weather. Life isn rsquo;t meant to be plain sailing but, with luck, all will be well when it pours with rain from the beginning of June and (unless you are in Scotland) we can look forward to 13 weeks without a bank holiday. Q. Having your son running the business with you has obviously worked well. What are your views on fathers and sons working together in charge of a company? A. A successful father-and-son business partnership doesn rsquo;t happen overnight. It depends on the characters and how their relationship evolves over many years. Before joining the company the son must want to work for the family firm and have the potential to do well. Some prior work experience elsewhere will help but you don rsquo;t want him coming in arrogantly displaying his new-found knowledge. His first important job is to win the respect of others in the business. First it is best for him to spend some time in each department but soon, if things go well, he needs a real role. His career has started and although father will keep a close watch it will be up to the son to prove himself. He has to demonstrate his management potential to the rest of the team. Dad should be looking to promote his son pretty quickly but that will be accepted if everyone around him knows he is up to the job. If everything goes according to plan the time will come when the son will want to take over, it may well be earlier than father expected. It is much better to hand over responsibility pretty soon as long as the son is willing to use his father rsquo;s experience whenever he has a problem. At some point roles reverse and the father is, in truth, working for his son. Success will depend on father rsquo;s ability to let go and son rsquo;s willingness to keep in touch and seek advice. If all this works well, life can be great ndash; the company gets consistent continuity of management which holds a family business together and there is an even stronger bond between father and son. Q. As you seem to run a slim head office, without a marketing department for example, I assume you rely on consultants to do many of the jobs for you. How do you justify their fees? A. There is a place for consultants in most businesses, but you seldom find them at Timpson. We need help from time to time with specialist areas such as e-auctions, telecoms and new bits of IT, but, when it comes to running our shops, we prefer to do it all ourselves. Some years ago, we had to change the shop design of one of our in-store concessions and the store management forced us to use their consultant. The redesign was a disaster and sales fell 25pc. Fortunately, since then we have always used our own development team, who know what they are doing because they spend their lives fitting out shoe repair shops. I certainly would never hand over strategy to a consultant. If you are the chief executive why get an outsider to do your job? If I need advice on how to develop our watch repair service I know where to find plenty of experts ndash; they are the colleagues in our shops who handle watches several times a day. So I am not tempted by the companies who send me unsolicited emails claiming to ldquo;Make a magical impact on my bottom line rdquo; or ldquo;Beat the downturn by freshening up our brand rdquo;. For more than 20 years we have had the courage to ignore this tempting type of offer. I prefer to listen to the people who serve our customers. To me, the routine use of consultants shows a lack of confidence. http://www.timpson.co.uk/blog/article/39/small-businesses-can-afford-to-ignore-consultants http://www.timpson.co.uk/blog/article/39/small-businesses-can-afford-to-ignore-consultants Q I #8217;ve got a hot-headed co-director who #8217;s making my life a misery. He overreacts to everything ndash; he even threw a computer monitor across the room when it broke down last week, and has visited customers personally to deliver some colourful language when they #8217;ve been late paying us. I want him out of the business, but fear he #8217;ll try and sabotage us if I get my wish. What would you do? A I am wondering whether your co-director has always been so impossible, or is this a recent change in his behaviour? Have some serious problems cropped up in your business? Have things deteriorated recently? Is he suffering from stress? Whatever the problem you must not put up with his antics for a moment longer. Forget your fears of sabotage. Whatever damage he might do as an outsider (which I think will be minimal) will be nothing compared to the harm he could do if he continues to throw his foul temper at all and sundry. You sound frightened of him, but it is time to take charge. Meet up and make your position clear. Start by having a sympathetic chat but be blunt. Explain that his manner is harming the business and see if there any ways you can help. The conversation can go two ways. Either he will accept there is a problem and talk about the cause of his stress (in which case you can start to help) or you will find another monitor flying towards your face. Before the big conversation think through your legal position. Prepare the severance payment you are willing to offer to get him to go and if he is a shareholder be ready to buy out his share of the company. For the sake of yourself and the business it is time to show some leadership. Q I am a director of a small manufacturing company, turnover pound;7m, and there are moves afoot to buy a smaller competitor, with turnover of about pound;2m. It made a loss of more than pound;200,000 in each of the last two years. Their asking price is pound;2m, which I think is miles too high. They also want to keep their, admittedly small, brand name. What is your advice? A It doesn #8217;t matter what he is asking for, decide on the price you are willing to pay and make that the maximum. I agree that, unless there is a hidden gem lurking amongst the assets, a business making a loss of pound;200,000 is desperately overvalued at pound;2m. In fact, I would be worried that if you purchase the company the liabilities could make it worth next to nothing. If you go ahead with a deal it is probably better simply to buy the assets ndash; much safer than purchasing the company. I assume you plan to run the extra turnover through your existing overheads thus turning all its top-line contribution into profit. But don #8217;t calculate a price by applying a high multiple to this marginal increase in your revenue. The business may be worth more to you than anyone else but that does not mean that you should pay a premium. Be hard-nosed, you don #8217;t have to do the deal so offer a price equal to no more than a two-year pay-back (after deal and reorganisation costs) and see what he says. Include the brand name in your offer ndash; you can always use it as a bargaining point at a later stage. The seller will probably tell you to get lost but you never know, he might be so keen to sell you could pick up a bargain. Q Customers and staff seem to be dropping a lot of hints lately that suggest one of my best workers likes a few too many drinks with lunch. I #8217;ve got no proof, but am obviously concerned about the damage this could do to the business. How should I approach this tricky subject? A Don #8217;t let the situation drift any longer ndash; it #8217;s time for you or your HR director to meet him for an open and frank chat. So far you only have other people #8217;s word for it. They may be setting him up. So, after lunch and without warning, ask to see him. If he has had a drink that day you will soon know. Regardless of whether his breath smells ask him about the rumours. If he denies the allegations leave it there for the moment and dig deeper. If he accepts there is some truth in the suggestion it is time for you to give him help. Lunchtime drinking shows there is a real problem which might involve much more than alcohol. He may well have started drowning his sorrows to escape from difficulties at home ndash; the habit could be caused by debt, gambling, relationship breakdown or many other difficulties preying on his mind. You say he is one of your best workers but he won #8217;t be the pick of the bunch much longer unless he can get the rest of his life back on track. It is worth checking the guidelines you give your colleagues. I don #8217;t like rules but other people do, especially the lawyers. Drink and business don #8217;t mix, so give your team zero tolerance: the liquid lunch went out of fashion decades ago. Recently I was talking to a harassed boss who came out with the comment, quot;Some people expect that I should provide a social service, quot; to which I replied, quot;That #8217;s exactly what a good boss does. Your job is to support your team. quot; Q Do young people want to be cobblers or is it just for old codgers? A The image of the grey-haired grumpy cobbler keeping customers waiting, while bent over his last, disappeared from our business a long time ago. If we had recruited only experienced shoe repairers we would indeed have created a chain of shops full of very mature men. But we seldom employ cobblers, we pick people with personality and put them through our apprentice scheme which covers a wide range of skills including key cutting, engraving and watch repairs. The average age of our colleagues is 31 and that includes well over 100 employees who have been with the company for more than 25 years. When I started work 50 years ago life was very different. The cobblers were hidden in a back room and customers were served by counter girls. For several years now our colleagues who repair shoes and cut keys also talk to our customers and they do the job while you wait and while you watch. We have discovered that young men and women who give it a go find it fun. All they need to bring is a positive attitude, a bubbly personality and the ability to learn. In 18 weeks we expect new recruits to have gained enough expertise and there is no shortage of young (and not so young) people wanting to try our traditional trade. Half of them join us through recommendation by a friend or relative. http://www.timpson.co.uk/blog/article/38/john-timpson-show-some-leadership-to-deal-with-hot-headed-colleagues- http://www.timpson.co.uk/blog/article/38/john-timpson-show-some-leadership-to-deal-with-hot-headed-colleagues- Q We #8217;ve had a remarkable spate of departures lately, including some key staff. Sales seem to be holding up and I #8217;m pretty happy with the replacements we #8217;ve brought in, but hiring is expensive and I #8217;m worried that company morale is suffering. How should I investigate ndash; would exit interviews do the trick? A I wouldn #8217;t bother with exit interviews ndash; we don #8217;t. They seldom tell you anything that you don #8217;t already know ndash; and leavers often lie about the real reason for their departure. The more useful interviews take place well before a colleague has decided to leave (when it is not too late to do something) or a long time after they have gone (when they are more likely to reveal the truth). You say you are recruiting some good replacements and probably console yourself by saying quot;a regular turnover of staff is no bad thing quot;. But at a time when most people are thankful to have a job, you clearly have a problem. More serious, you don #8217;t appear to have a clue what is causing your workforce to be so fickle. Is there an obvious trend? Is there a mass exodus to a competitor? Have most of the leavers been working in the same department? If they are being poached by an aggressive competitor what is he offering to tempt them away? If he is paying much bigger salaries there may be little you can do. Assuming you pay well above the minimum rate for the job there is no point in paying fancy salaries to get people back ndash; all you will do is increase costs and upset your loyal colleagues in the process. People are more likely to leave a boss than leave a business. If you have a high proportion disappearing from a particular department look at its leader. You probably have a management problem. Whatever you discover use the current spate of departures as a spur to improve the way you care for your colleagues. You can never do enough to look after for your star performers. We have pinched a lot of ideas from other good employers, like our free holiday homes and an extra days holiday on your birthday ndash; but we are constantly on the look out for new ways to amaze our people. With luck this big block of leavers will help you become a better boss. http://www.timpson.co.uk/blog/article/37/john-timpson-you-can-never-do-enough-to-look-after-your-star-performers http://www.timpson.co.uk/blog/article/37/john-timpson-you-can-never-do-enough-to-look-after-your-star-performers Q I rsquo;ve spotted a budding office romance in the company. I trust the staff concerned to be discreet but should I be worried about the distraction it might cause? A It all depends on whether it is a romance or an affair. If the liaison is likely to break up a marriage or you are faced with an over-friendly colleague in finance who is flirting with your sales director rsquo;s young daughter while she is on a week rsquo;s work experience it is wise to have a word before too much damage is done. In most cases, however, courting colleagues are a normal part of company life. A significant proportion of people meet their partner through work. We have nearly 100 couples working at Timpson, several of whom have paid us one of the greatest compliments in that their children also work for us. So don rsquo;t fret about the odd furtive glance around the filing cabinets, lingering looks over a long lunch in the canteen or even time taken up by the exchange of doting text messages. Love in the office is probably doing more good than harm. Married couples are such a positive influence at Timpson we help to celebrate every colleague rsquo;s wedding with pound;100 and an extra week off. Karina who got married last weekend was driven to the ceremony by Martin in the car he used to drive me round our shops. The only time to worry about an office romance is when it comes to an unhappy end. Its difficult for past partners to continue working together and inevitably colleagues take sides. For a few weeks after a break-up the atmosphere may be severely strained, but before long another relationship will blossom and yet again love will be in the air. Q I rsquo;m enjoying strong demand at my phone accessories business, to the extent that I can rsquo;t afford to finance the growth. My accountant says I rsquo;m in danger of over-trading but I don rsquo;t want to turn customers away for fear that they won rsquo;t come back. Have you ever had cash-flow problems? If so, what did you do to fix them? A It is easy to get carried away when you are convinced you have a world-winning idea but everyone needs to face up to reality. Accountants and bank managers can be irritating when they adopt a pessimistic posture and point out the downside of your pet plan. However, they are probably doing you a favour. Business success is not achieved simply by increasing sales or even by making more trading profit ndash; the only measure that really matters is cash. You are indeed in business to make money. To be over-trading you must be spending more than you are making. You say, ldquo;I don rsquo;t want to turn customers away rdquo;. That is one of a few dangerous phrases that can lead to commercial suicide. Here are a few more: ldquo;I would be a fool to miss the opportunity rdquo;, ldquo;you have to speculate to accumulate rdquo; and a nasty phrase from the dotcom disasters ldquo;first-mover advantage rdquo;. In your enthusiasm you can become blind to the risks. I have been there twice. In the 1980s our shoe shops were starting to eat up so much cash on stock and refurbishment there was nothing left to expand the business. The solution was to sell the chain of shops. In 2003 when we bought our UK competitor Mister Minit ndash; the purchase also included the rundown Sketchley Dry Cleaning business. Sketchley was creaming off pound;40,000 a week and our overdraft was getting bigger by the day. Again the solution was to sell. Being strapped for cash is a nightmare ndash; suddenly your fate is in the hands of your creditors and each night you wonder how you got into such a situation. The lesson is simple ndash; keep control of the cash and never let your ambition run away with your money. That rsquo;s why every day I check our company rsquo;s bank balance against the same day last year. At a glance it tells me the health of the business. Q A business I rsquo;ve had my eye on has just gone into administration. There rsquo;s no time to do the due diligence I would normally want to do, but I rsquo;m convinced its customer base would be a huge boost for us. Is it worth buying it and then setting it up as a separate company for a while so I can take a proper look before integrating it with my main business, in case there are any skeletons in the closet? A When buying a business out of administration act quickly and be prepared to make snap decisions. You must be willing to trust your judgment, without the comfort of due diligence, but the extra risk is compensated for by a very big advantage ndash; the company comes to you free of most liabilities apart from the Transfer of Undertakings (Protection of Employment) obligations to employees ndash; so don rsquo;t waste the chance of having a clean slate by giving a guarantee. You can run the new sales through your old overheads without integrating the two companies. In my experience companies in administration provide the potential to do some great deals. If you buy a successful business and pay a full price based on a multiple of earnings you have to run really hard to get a return on your investment. The administrator will try to get as much as he can for the creditors but most companies that go into administration are bound to be bought at a rock-bottom price. Even a small price may be too big if don rsquo;t have a plan. However, if you have done your homework it is often possible to turn a basket case into a very profitable business. There will be plenty of time to put your plan into practice before starting to invest new money so have a big economy drive. Cut costs, lose a lot of overheads and watch the cash. With no contracts tying you down you can renegotiate every deal. Be tough you are in a stronger bargaining position than you think. nbsp; http://www.timpson.co.uk/blog/article/36/an-office-romance-is-not-necessarily-a-source-of-workplace-heartache- http://www.timpson.co.uk/blog/article/36/an-office-romance-is-not-necessarily-a-source-of-workplace-heartache- Q. I #8217;ve just been on Facebook to check out a new recruit and she looks like a right party goer judging from the pictures. It #8217;s making me think twice about employing her as we need to be completely professional with clients. Does Timpson use Facebook and do you check out potential recruits? A. Despite the repeated pleas from PR and marketing consultants we resist all temptation to use social media to promote our business. Instead of weaving a devious web of contrived comments on the internet we prefer to spread our reputation by giving our branch colleagues the freedom to give their customers really good service. But we can #8217;t escape the social network. A quick flick through Google reveals plenty of comments about our shops from customers who post messages on sites like qype. Thankfully most of the messages are complimentary but we always run the risk of a disgruntled customer spreading his grievance around the world wide web. I know a lot of marketing departments now employ a dedicated team to spread positive spin on social sites. Thankfully we do not have a marketing department. The internet is proving to be full of unintended conse-quences. With so many private affairs getting such a public airing it is not surprising that Facebook, far from being just a source of frivolous fun, can ruin relationships, cause family feuds and create office disputes. We only look at a colleague #8217;s Facebook page when someone has told us that a colleague has posted a personal problem or raised a grievance with our business. Normally this gives us the chance to solve their problem but sometimes inappropriate remarks on the internet have provided the perfect proof to an employment tribunal that a claimant #8217;s case is malicious. As far as your party-going candidate is concerned, it certainly sounds as if she has plenty of personality. It is well worth asking her in for an interview to see if her Facebook image is born out in reality Q. The Royal Wedding is drawing closer. How has Timpsons approached the extra bank holiday? Did you work through different options? A. Bank holidays always cost us money so an extra one is bound to be bad for business. Our sales vary in direct proportion to the number of shoppers walking past our shops. With the wedding to watch on TV customer flow will be a lot less than a normal Friday, but we will still open our shops for business. We checked with a number of other high street chains who all came to the same conclusion. We will have the minimum number of staff covering each branch and our central office will be open to provide the normal helpline support. I am pretty sure we will lose money on the day. The double dose of bank holiday weekends due to a late Easter was always going to disrupt trade. With consumer expenditure already going through a sticky patch the end of April will probably be particularly tough. At least when we get to 2012 our sales will look good in comparison! Retailers are good at complaining. Chairmen #8217;s reports frequently quote the weather or other irritations like Tube strikes to explain away a disappointing result but there are always obstacles to overcome every year. Last year we had the World Cup (luckily we were knocked out fairly early). To make sure we kept our shops open during the football we allowed colleagues to have TVs and radios at work. I don #8217;t think our cobblers will be as keen to skip work to watch the wedding. One part of our business that we expect will be busy is our pub on Anglesey, The White Eagle, and with William and Kate starting their married life just down the road, our pub will be a perfect place to celebrate. http://www.timpson.co.uk/blog/article/35/is-snooping-on-facebook-ever-a-justifiable-recruitment-practice- http://www.timpson.co.uk/blog/article/35/is-snooping-on-facebook-ever-a-justifiable-recruitment-practice- Q. I rsquo;ve just received a doctor rsquo;s ldquo;fit note rdquo; from an employee who has been ill and it is gobbledegook to me. I rsquo;ve sent him home again to get better ndash; I don rsquo;t want to open myself up to a potential claim if he crocks himself on the job. Have I done the right thing? nbsp; A. Even if you can rsquo;t read the doctor rsquo;s writing, don rsquo;t worry, there is no need to stick to his timetable. His notes should simply be treated as advice, they are not an instruction. If a colleague wants to return before the time specified by the doctor, arrange to meet the employee and find out what they thinks they can and cannot do then agree a time frame of reduced hours and light duties to ease them back into work. The key to controlling all issues to do with absence is the return to work interview. Although we try to avoid too many rules and procedures, this is an essential discipline for every organisation. It gives the ideal opportunity for an honest exchange of views ndash; you have the chance to put a few blunt questions to the guy who takes too many sickies and to set some sensible guidelines for the keen colleague who wants to return to work too early. If you can create an open line of two way communication and agree a ldquo;back to work rdquo; plan together you can rsquo;t be blamed if it all goes pear shaped ndash; but in today rsquo;s world of risk assessment and employee liability make sure you put it all in writing. Proper paperwork is the best form of protection. Q. When you open a CV what is the first thing you like to see? A. CVs can provide a useful bit of evidence but they only tell part of the story. Read between the lines and look for signs of past performance. You don rsquo;t just want to know the roles they have played you need to get an idea of the way they actually do the job. You are looking for people who write about organising, creating and running departments, winning contracts, saving money and achieving new goals. These words are clues to the positive people who can make a difference to your business. But beware. Many mediocre managers are good at writing their own CV. To put it bluntly, some are lying and most gloss over the cracks in what could be a chequered career. Smart applicants produce a CV that will get them noticed in a huge pile of forms, but you don rsquo;t know what they are really like until you meet them at an interview. It is impossible to appraise people rsquo;s personalities from a piece of paper. I was flabbergasted when I was first involved in a public sector appointment. The process insisted that we concentrated on the qualifications and ignored personality. The politically correct procedure was so keen that we shouldn rsquo;t know their age, sex or marital status and we had to draw up a shortlist from a batch of anonymous applicants. Recruitment is an art, not a science ndash; a successful appointment is nearly always based on intuition. You can rsquo;t pick the perfect candidate by using a set of rules or even employing psychometric testing. If the politically correct lobby go much further we will finish up having to interview candidates behind a screen, with their voices disguised, and we will be forced to pose exactly the same questions to every applicant with appointments made using a prescribed point scoring method. I really got worried a few years ago ndash; an organisation was taken to task when they advertised for ldquo;hard working people who want to make a difference rdquo; They were taken to task for discriminating against people who don rsquo;t work hard! By all means look at the CV. But rely on your intuition. Whatever the candidate puts on paper have faith in your face to face judgement of their personality. Q. I hear businesses are to have fewer unannounced inspections, which is music to my ears after hosting clipboard wielding staff from various public bodies over the years. They all seem to ask the same questions and request the same information, over and over again. Will you benefit? A. Any reduction in the number of box tickers dropping into our shops has to be welcome but we are relatively fortunate. Some of my friends in other trades, particularly the food and drink industry, are constantly hampered by a succession of unproductive jobsworths. A lot of management time is soaked up by regulators with a lot of authority but little responsibility. We are passionate about health and safety. With shops full of fast revolving cutters we have to be careful ndash; we need to exercise a high duty of care to protect our colleagues. We are very happy to be inspected but there is a limit to the number of visits that are needed. I was staggered when the no smoking ban was introduced. In some areas of the country, we had regular visits from clipboard carriers checking that we had put the right sized posters in the proper place at the proscribed height from the floor. At the heart of the problem is officialdom rsquo;s love of process irrespective of the final result. The best way to ensure a safe workplace is to create a safety culture with colleagues committed to taking personal responsibility. Too many inspectors seem to think that the priority is paperwork. Quality controllers must work out their priorities so they can concentrate their time on the rogue traders. We all know the regulations ndash; it would be nice to have fewer boxes to tick and be trusted to keep to the rules. http://www.timpson.co.uk/blog/article/34/don-8217-t-get-bogged-down-with-sick-notes http://www.timpson.co.uk/blog/article/34/don-8217-t-get-bogged-down-with-sick-notes Q We rsquo;re a family business and last year hired a non-family director to take our business in a new direction. We needed some fresh perspective and she rsquo;s brought that. But now we need to keep her and the thorny issue of equity has cropped up. How have you kept key non-family members on-side? A Presumably your family hopes to keep control of the business and there are no plans to sell. There is therefore no short term prospect of a capital gain. Family members receive a dividend and those who work in the business also get a salary. If your non-family director is playing such a vital part in the business she needs to feel she is getting a fair share of the income but there is no need to give her a slice of the equity. As soon as shares go outside family the dynamics of the business will change, and you may live to regret it. Keep it simple. Give her a good salary and a generous percentage of the profits, making sure the total package more than matches what she can get elsewhere. It is not just the money, involve her in all the major decisions and make her feel fully part of your board. If she is as good as you suggest she will understand why equity is not on offer. Q Are you a uniforms man? What benefits, if any, do corporate uniforms convey? A In 1979, during a trip round our shops I realised cobblers were a scruffy bunch. But we were no better or worse than our competitors. It was not unusual to see a high street cobbler unshaven, smoking, reading a newspaper and wearing a sweatshirt under a filthy apron. But these low standards gave us a major opportunity. If we could up our game and persuade colleagues to look smart we would stand out from the rest. If we couldn rsquo;t look after our branches, why should customers expect us to look after their shoes? I changed the uniform and got everyone to wear a tie. quot;But, quot; I was told by the diehards, quot;no cobbler has ever worn a tie. quot; quot;That rsquo;s the point, quot; I replied. quot;The tie is a symbol that says we are different, quot; (at around the same time Eddie Stobart came to the same conclusion). I won and 32 years later the tie is still a significant part of our culture. Recently we redesigned the uniform at Max Spielmann our photo chain, to communicate a change in the business. The uniform gets the message across to both customers and colleagues, who now feel part of a successful team. With a management style based on individual freedom we give our people leeway, but to be a member of our club you have to look the part and that means wearing the Timpson uniform. http://www.timpson.co.uk/blog/article/33/john-timpson-pay-fair-but-keep-it-in-the-family- http://www.timpson.co.uk/blog/article/33/john-timpson-pay-fair-but-keep-it-in-the-family- Q We haven rsquo;t been able to offer pay rises to our employees for almost two years and I rsquo;m concerned about retention and morale. A contact has recommended investigating alternative benefits such as offering share options to staff. Have you ever considered such a move? A You have every reason to be concerned ndash; if your pay scale has been frozen for two years, expect some of your top performers to be looking to move elsewhere. The offer of share options in a business that can rsquo;t afford to pay a proper rate for the job is unlikely to persuade unsettled people to stay. Before thinking about a share scheme, have another look at salaries. Even if you are making a loss and your colleagues agreed to the wage freeze, it has gone on too long. If you need to save on salaries, say goodbye to the poorest performers so you can pay the key people what they rsquo;re worth. Don rsquo;t take advantage of the people who can return you to profitability. A good bonus scheme has a lot going for it compared with share options. Everyone can understand a scheme based on a percentage of profit. Offering shares is bound to be more complicated ndash; and staff prefer to have their reward sooner rather than later. Frankly I don rsquo;t think share options will provide the game changer you are looking for. Instead of spending time drafting a complicated scheme, review your staffing levels, put through a pay increase and when things improve send everyone a surprise bonus cheque. Q We rsquo;ve been growing rapidly over the last three years and I rsquo;ve got to present an update on our company rsquo;s progress to our 55 staff soon. I used to find it fairly easy to get across my messages when we could all fit in one small room but now I rsquo;m feeling the pressure to be more formal in my approach to the presentation. What techniques do you deploy to make your speeches engaging? A I know the feeling. We have grown to six times the size in 20 years but following each major acquisition we have been keen to keep our family business culture. When we had 150 shops, the area managers rsquo; conference was held round our dining room table. Today we struggle to fit into a conference centre. It is possible to preserve the personal approach. I am assuming that all your employees are on the same site, so if you can rsquo;t fit them all in the biggest room simply have two meetings or finish work early and go to a local hotel (worth the room hire and gives you the chance to put pound;250 behind the bar). Whatever you do always deliver the message yourself and try to keep the atmosphere as informal as possible. I like using a PowerPoint presentation, as long as it is all pictures with very few figures and no words. It is always worth finishing your session by saying quot;well done quot; and quot;thank you quot; in a practical way ndash; think of presenting some awards. http://www.timpson.co.uk/blog/article/32/john-timpson-column-good-bonus-scheme-has-a-lot-going-for-it-compared-with-share-options http://www.timpson.co.uk/blog/article/32/john-timpson-column-good-bonus-scheme-has-a-lot-going-for-it-compared-with-share-options Q How are you coping with the planned abolition of the default retirement age from April? Are you handing out the long-service clocks now while you can? A In my view (and I am nearly 68) this bit of legislation is another example of a regulation that (while purporting to protect employees) has the potential to make matters much worse. When I hear employers are worried about being accused of ageism if they politely ask 60-year-old employees when they plan to retire I am finally convinced employment law is drawn up by bureaucrats that will never be fit to run a business. Our colleagues have always had the right to request an extension beyond their normal retirement age. We have lots of cases where we retain colleagues on a rsquo;pay-as-you-go rsquo; basis, often moving to part time. A gradual reduction in hours often works well for both us and our employees ndash; a slide into retirement seems to suit plenty of the people who work in our shops. The fast pace of our high street business can catch up with colleagues as they find (as I have) that age does have a few physical limitations. Up to now this has not caused a problem but with the law change on April 6 we may unfortunately have to start quoting rsquo;capability rsquo; as part of a disciplinary procedure to get loyal, long-serving, colleagues to face up to reality and, in some cases, finish up in court. What a sad end for someone who has served the business superbly for over 30 years. Despite the change in the law we will continue to have informal, honest chats with colleagues as they approach pensionable age. If we think it is time for retirement we would hope to part as friends. Part of the deal commits us to help them to adjust to life after Timpson, claim any benefit entitlement, and reorganise their time so they can make the most of their leisure. We will keep in touch, sending our weekly newsletter and staying at the end of a phone. The law assumes we are all the same, but some 70 year olds are sprightly while other people have slowed down before 50. The legislatures should leave us alone and let us have the freedom to do the best for our people. Q How supportive is your local authority? Has anyone ever visited you to ask if they can help with anything? I only ask because I rsquo;ve just returned from a trip to a provincial town in South Korea where we are planning to set up an office. The local mayor is so keen for us to invest that he is offering us free rent and access to all the right people. It is that kind of welcome that I miss when returning to the UK? A Although I have no reason to doubt the good intentions of local government we have never been tempted to take up their offers of financial assistance. We prefer to run our own business without the strings attached to any help provided from the public purse. At first the opportunity to tap into development subsidies or training grants seems too good to be true. But before long you hit the bureaucracy. There is seldom such a thing as a free bit of funding ndash; every awarding body wants to take charge and ensure that everything follows a rsquo;proper process rsquo;. With a system that needs monitoring there is a danger that getting the grant becomes more important and time-consuming than running your business. Before signing up it is worth working out the true cost of added administration and whether you want to let someone else have a say in how your business is run. I am sure that for some companies local authorities provide crucial assistance. But I prefer our local government to stick to mending the roads and collecting our refuse. Q Have you broken your iPad yet ... intentionally or by accident? A Twenty years ago I would have been thrilled and amazed that a tiny hand-held device could keep me constantly in contact with business and friends while providing all the facts in the world at the press of a button, but I still can rsquo;t decide whether to love or hate my iPad and my BlackBerry. My wife, Alex says my life is dominated by emails. I disagree, but she has a point. She prompted me to draw up a personal Code of Practice ndash; guidelines to keep the iPad in its proper place and avoid acquiring a permanent addiction to information technology. Consequently neither the Blackberry nor the iPad are allowed to join us for a meal at our local pub and the Blackberry is banned from our bedroom (Alex uses the iPad to play Plants and Zombies). Looking at emails is pretty unpopular when Alex is driving the car ndash; the conversation tends to go something like this: Alex, quot;What are you doing now that is so important? quot; Me, quot;Just deleting a message from someone trying to sell me a hospitality package for Wimbledon quot;. However hard I try to cut out spam I still get peppered with unwelcome proposals to register for conferences, sign up interim managers and participate in an important on-line survey. But perhaps these minor invasions of privacy are a small price to pay for the opportunity to keep totally in touch. So, on balance, it is best to love the technology and keep up to date. http://www.timpson.co.uk/blog/article/31/mps-should-leave-employers-and-workers-to-agree-retirement-age- http://www.timpson.co.uk/blog/article/31/mps-should-leave-employers-and-workers-to-agree-retirement-age- Q As a new business developing its distribution network, long-term success rests in being able to get an established retail chain on board. What advice do you have for small businesses looking to supply to retail multiples? A Before committing yourself to a multiple retailer it is worth thinking through the implications. Every big buyer is going to look for the best price. You don rsquo;t have to be the cheapest but you must offer good value for money. Assuming your products compare well with the competition and can retail at a price that gives both you and the retailer a good margin, you have every prospect of winning the bulk orders you seek, but there are dangers. Will your existing customers be happy when they see your merchandise on the multiple rsquo;s shelves? As a distributor, do you think there is a danger that the buyer will eventually cut you out of the supply chain and go straight to the manufacturer? You have probably already put all these worries to one side and tried to attract interest through trade fairs and direct marketing, but with some buyers it can be difficult to get a foot in the door. Despite the need to constantly improve their range it is much easier to opt for an easy life and work with a list of established suppliers. Don rsquo;t give up mdash;brash extroverts have much more chance of showing their samples to an obstinate buyer than a polite but weak salesman. Take time to visit lots of their stores and try to talk to the sales assistants to find out what they sell and what they are missing. Put yourself in the buyer rsquo;s place and think what would persuade him to give your lines a try, but don rsquo;t rely totally on price mdash; if you start off by cutting your margin it will be difficult to put the price back up. You may sell a lot of merchandise but make very little money. If all else fails, offer a free trial. Put your stock in a few stores, first for free and the next batch on sale or return. With nothing to lose, the buyer may be tempted. Show commitment by offering to work in some stores and see the results for yourself. You will soon know whether you have the right product and the right buyer. Q. Employers often moan about gaps in potential recruits rsquo; skills. What is the most common failing that you see in young people applying for work at Timpsons? A. We are not complaining. Our current crop of new recruits is better than I can ever remember. We need 500 new apprentices every year and find there are plenty of people, young and old, with the personality we want. But to find the ones with potential we interview lots who would never fit in. CVs are not that important. We need recruits who are keen to work hard and earn lots of money ndash; extrovert types who enjoy work and are quick to learn. We like Mr Keen, Miss Ambitious, and Mr Happy mdash; we can teach the skills needed to anyone with a bit of practical talent and the right attitude. It is easy to spot candidates who simply don rsquo;t want the job. They reluctantly turn up for interviews, don rsquo;t look the part and know little or nothing about our business. It is tough being trained to repair shoes and cut keys so if we take on the wrong recruit their failings are soon spotted by work colleagues. Laziness and lateness are often the first signs (we send them an alarm clock in the welcome pack). In a small shop with no more than three people teamwork is essential mdash; their bonus depends on it. Keen colleagues soon complain about a new starter who is letting the side down. Your question talks of employers who moan about a skills gap. We don rsquo;t necessarily need A-levels, a degree or even the odd GCSE. We want new starters who are full of energy and ambition. Thankfully, there are plenty of people for us to pick with superstar potential. http://www.timpson.co.uk/blog/article/30/put-yourself-in-the-buyer-8217-s-position-to-partner-up-with-a-major-retailer- http://www.timpson.co.uk/blog/article/30/put-yourself-in-the-buyer-8217-s-position-to-partner-up-with-a-major-retailer- Q Two thirds of my company rsquo;s revenues come from one activity ndash; sales of a cheese ndash; and my business partner thinks we should split this from our other food product activities so it gets the attention it deserves and we appear bigger. I disagree ndash; won rsquo;t this just mean we add costs, become less efficient and dilute the brand? A Your question doesn rsquo;t really give enough information. You say that 65pc of the sales are cheese, but what else do you sell? Perhaps you are in the yogurt business, or is it something completely different like baked beans or bananas? Even though I don rsquo;t know the detail, I am inclined to agree with you. Your partner must make a very strong case before you sit back and allow him to build a second empire of overheads to control 35pc of your turnover. Think of the situation in a different way. If you were just selling cheese and then acquired a company that brought in the new products, your first move would be to cut out their head office and run both businesses through your central overhead. By creating a new division not only would you be adding to your cost base but you would also be making life more complicated. It is difficult to look in two directions at once. For some years, we have been developing a locksmith service with a call centre and a team of mobile locksmiths. It is quite different from our high street business so we decided it should be a separate division. We made progress but we didn rsquo;t make money. Last year, we brought it under the control of our shop network, giving one of our regional managers responsibility. It has made a massive difference. We have cut costs, increased sales and made life simpler. Unless your partner has a compelling reason to change, stay as you are. It is hard enough to make money. Don rsquo;t make the task more difficult with a complicated structure and higher management costs. Q What is the most useful piece of business advice that you rsquo;ve picked up from a rival recently? A It is rare for a competitor to come up with helpful hints, but it can happen. Several years ago, the chief executive of our then competitor Mr Minit (we bought the business in 2003) told me about the success of their covert cameras in a campaign to control theft. We copied their system and immediately saw the benefit. Most of the information we gather about the competition comes from their employees, especially when their business is going through a rough patch. You can learn just as much by observing a company with problems. Staff on the front line are often the biggest casualties in cost cuts and are only too keen to tell you where their bosses are going wrong. They have taught us why it is so important to look after your good employees, especially when times are tough. Colleagues who are carrying on the day-to-day business often have a clearer view than managers at head office ndash; the lesson is to keep listening to your people. http://www.timpson.co.uk/blog/article/29/there-s-no-single-reason-for-splitting-this-business-into-two http://www.timpson.co.uk/blog/article/29/there-s-no-single-reason-for-splitting-this-business-into-two Q: What makes for a perfect sales pitch? A: No magic formula can guarantee sales success. There are some essential ingredients ndash; a good product, knowledgeable sales team and diligent preparation and often you need a bit of luck. Some years ago we tried to define what makes a great shop manager. We found that the star performers came in all shapes and sizes. The one thing they had in common was their positive personality. Most of our managers are pretty competent at shoe repairing, key cutting and watch repairs but the best sales are produced by colleagues who are good with customers and keen to earn bags of bonus. I guess our experience is typical of most other sorts of business. Of course it helps to have a few common sense guidelines ndash; look the part and produce a great presentation ndash; but most deals depend on people. The personal chemistry between buyer and seller has a big influence. If you are a CEO on the lookout for perfection give your sales team the authority to look after each customer in the way they want. As long as you have picked positive people who are keen to do well there is no need for you to define the perfect pitch. They will find the right approach for each individual customer. Q: How important is networking in business? For instance, would you travel to an expensive Swiss ski resort to network with a load of investment bankers and journalists and discuss #8217;the shared norms in the new reality #8217;? A: It is easy to criticise the money men who make an annual trip to Switzerland especially at a time when banker bashing is so popular. But surely, as more and more business is done by computer and email it is even more important for international bankers to meet face to face. If you have to pick a posh place to put them together so be it. I don #8217;t have a good reason to do business in Davos and I wouldn #8217;t last long trying to keep up with the expertise and banter of bankers. But even for us networking can play an important part. Many of the ideas that have helped our business grow were pinched from someone else. We copied Millies Cookies when they started to give every colleague an extra day off with pay on their birthday. Shoe retailer Kurt Geiger made a major difference to our customer service when they encouraged us to equip our mystery shoppers with hidden cameras so our colleagues could see their personal service for themselves. We spend a lot of our time visiting our own business ndash; calling at shops and talking to the people who meet our customers. But we also need to be aware of business outside Timpson. It helps to have business friends who can talk about common problems, and you know the industry much better if you meet senior managers from your competitors. Conferences and exhibitions are not a top priority, but a few days a year, whether near the slopes of Davos or in the middle of Birmingham, can keep you up to date with the industry and, with luck, produce a couple of good ideas. Q: I #8217;d like to ask about how the Inland Revenue treat hybrid and electrical cars. I faced this issue last year and we ended up purchasing a Toyota Prius, which seems to be a good answer given the price of fuel now. But were we right to do this? And given that our corporation tax was reduced should we do it again? A: I know little about cars and less about tax so Paresh, my finance director, put your question to Lex Leasing who advise us on all things car related. The benefit of buying a hybrid car is that many allow you to claim 100pc first year writing down allowance on the cost of the vehicle. This applies to all vehicles with CO2 emission levels of 110 or below (i.e. not just hybrid #8217;s). If you buy a car with CO2 emission levels above 110, the capital allowances are restricted to 20pc per annum and hence there is a cash flow benefit, but this is only a matter of timing. Many car manufacturers have responded to the changes in tax regime by introducing low C02 emission cars that are not hybrid or electric so there are other options, but these are the main points to consider: 1.The driver gets taxed on a combination of list price and CO2 emissions, and so the higher the list price the higher the employee tax, and the higher the Class 1A National Insurance Contributions the company pays. 2.Vehicle Excise Duty, the tax disk is also based on CO2 emissions. 3.If the driver is typically doing urban miles, the fuel cost for a hybrid can be significantly less than a traditionally fuelled car. However if you are driving motorway miles there is no real difference. In urban conditions electric cars are now becoming a possibility costing as little a 2p per mile, about 10p cheaper than a diesel car. It #8217;s also worth exploring leasing as you can reclaim the majority of the VAT unlike when you buy outright. All quite complex I am afraid. The basic rule should be stick below 110 C02, but it all depends on what you can afford and which one you like, but the lower the CO2 the lower the tax. http://www.timpson.co.uk/blog/article/28/star-sellers-have-good-people-skills http://www.timpson.co.uk/blog/article/28/star-sellers-have-good-people-skills Q How do you keep the required paperwork, such as policies and documentation, ready to hand and up to date in all your shops and business units? In my small businesses, there are large amounts that legally need to be kept and brought out from time to time, some expensively issued by solicitors. Is there a system I can adopt? A Each of our branches has a folder containing policies on sickness, holidays, discipline and equal opportunities. In addition, every colleague receives a handbook covering all these points and many more. Everything is written in plain English. You certainly need to have your Employee Liability Certificate and an Accident Book, but the rest is mainly a matter of good management rather than legal necessity. Don rsquo;t always believe your legal advice. Some safety-first lawyers are so keen to keep you legal they give you guidelines that go well beyond the statute book. Follow your instinct and use common sense. Only do what you want to do. If you think something is a waste of time, it probably isn rsquo;t obligatory. Some of the official language that is used to describe the rules and regulations can confuse a layman. We produce plenty of information but write it in our own words, avoiding long legal phrases. We want our colleagues to understand where they stand. Q We had a poor Christmas and I rsquo;m starting to worry about 2011. What rsquo;s your gut feeling about the year ahead and how are you planning for it? A It seems logical to assume that retailers will have a difficult year. Government spending cuts and 20pc VAT are bound to squeeze consumer spending. It got me thinking last weekend, when it cost me pound;113 to fill up my wife Alex rsquo;s car with fuel. Luckily, cobblers usually do relatively well when the high street is having a tough time. If money is tight, the tendency is to make do and mend, with shoes repaired rather than replaced. But I am still cautious about 2011. We expect to open a significant number of new shops so our total turnover is certain to grow, and we will be creating more jobs, but we will do well to increase sales in the existing branches. It helps to run extra shops through the same central overhead but we rely on the profit created by our core business to pay for the capital cost of new shops ndash; we want to keep growing but need to keep a close eye on cash flow. Trading since Christmas has been well up on last year, but don rsquo;t be deceived. We are comparing with a snow- affected period last year and are catching up on some of the sales we lost during the bad weather before Christmas. February is usually a dreary time for retailers and 2011 promises to be no exception. At some point we will see the first signs of an upturn, one day the green shoots will appear, but don rsquo;t bet on it being in 2011. Q Having your son running the business with you has obviously worked well. What are your views on fathers and sons working together in charge of a company? A A successful father and son business partnership doesn rsquo;t happen overnight. It depends on their individual characters and how the relationship evolves over many years. Before joining the company, the son must want to work for the family firm and have the potential to do well. Some prior work experience elsewhere will help, but you don rsquo;t want him coming and arrogantly displaying his new-found knowledge. His first job is to win the respect of other staff. First, it is best for him to spend some time in each department, but soon, if things go well, he needs a real role. His career has started and although father will keep a close watch, it will be up to the son to prove himself. Dad should be looking to promote his son pretty quickly but that will be accepted only if everyone knows he is up to the job. The time will come when son will want to take over ndash; it may well be earlier than father expected. It is much better to hand over responsibility sooner as long as the son is willing to use his father rsquo;s experience whenever he has a problem. At some point, roles reverse and father in truth is working for his son. Success will depend on father rsquo;s ability to let go and son rsquo;s willingness to keep in touch and seek advice. If all this works well, life can be great ndash; the company gets consistent continuity of management that holds a family business together and there is an even stronger bond between father and son. http://www.timpson.co.uk/blog/article/27/don-t-drown-in-unnecessary-legal-paperwork http://www.timpson.co.uk/blog/article/27/don-t-drown-in-unnecessary-legal-paperwork Q You entered Sainsbury #8217;s in Winchester with a flourish, offering five shirts washed and ironed for one price with a four-day turnaround. The branch is now charging more and the turnaround has risen to eight days, having earlier gone from four to five to six. You cannot be expected to know this level of detail, so my question is, how do you ensure your regional management are aware of the service levels and then put in place action plans to effect change? A Your letter poses a specific question about how we ensure our area team keeps the required service standard in every branch. You have highlighted the major challenge of multiple retailing ndash; how do you maintain standards in a business that is spread all over the country? With 850 branches we are not going to get things right everywhere all the time, but we should still aim for perfection. We don #8217;t run our business through a set of rules because we think every shop team should have the flexibility to serve each of their customers in the way they think is best. This can lead to a variation in the level of service and, on some occasions, even a difference in price between one shop and another (we do, however, provide some guidelines). By giving our colleagues considerable freedom to take decisions at a local level there is no doubt that customers get a much more personal service, but we don #8217;t always spot the problems. Each area manager has a team of three assistants and three mobile managers to oversee about 30 shops. Consequently, branches are visited on a very regular basis and usually they will notice any shortcomings in the service being provided. But retailing is an art, not a science, and the key ingredient of success is always people. There are therefore no guarantees. The standard of service is bound to vary from one colleague to another. A high standard of service is more likely to be created by picking a team of personalities than systematically monitoring a range of key performance indicators. We carry out a continuous programme of mystery shopping but the best indication of our performance comes from the compliments and complaints of our customers. http://www.timpson.co.uk/blog/article/26/how-to-maintain-standards-in-a-nationwide-business http://www.timpson.co.uk/blog/article/26/how-to-maintain-standards-in-a-nationwide-business Q: We #8217;ve been trading for three years now and my business partner and I have been through some tough times. The business has survived but our relationship hasn #8217;t. I #8217;m loathe to rock the boat now we have new orders coming through the door but I know one of us has to raise it at some point. What would you do? A: You have already decided there is a problem. If you leave it to fester much longer you are in danger of damaging the business. Differences at the top are bound to disrupt the day to day management. What result do you want? Is this a passing phase that can be patched up or do you want to split the partnership? If you want to keep the relationship going the sooner you have a heart to heart chat the better. An honest exchange of views may be all that is needed to solve your differences. You say that the business is doing well so the two of you would almost certainly benefit if you can get your act back together. But if things have gone too far for reconciliation, think carefully before you act. One of you is going to go. Do you want to stay or would you be happy to take out your share of the money? Would you be able to run the business on your own? What is your share of the business worth? As soon as you propose a split you and your partner will be on different sides of the negotiating table and the business is bound to change. Do plenty of research and get legal advice before making a move. Be prepared for a difficult year. Q: Have you learnt anything from the snow falls that you #8217;ve now put in practice? A: December was difficult for several of our shops. Wherever there was a lot of snow we lost some sales and I don #8217;t think there was anything we could have done about it. Scotland and the North East were the worst hit, on some days customers simply couldn #8217;t travel to town but despite the weather our colleagues kept nearly all the shops open, some walked several miles to get to work. I certainly learnt a lot about the determination of many of the people who work in our branches. In most years the climate evens out ndash; 2010 had plenty of good months to make up for the snow in January and December. Cobblers pray for rain to find the holes in people #8217;s soles. The wet summer was great for business, so I am not complaining. But I can #8217;t remember snow causing so much disruption at Christmas, so it is not surprising that several retailers have reported disappointing figures. But in December 2011 the figures will easier to beat. Expect some bullish trading statements from the high street in 12 months time. Q: If you were looking to hire someone to work for you directly, what would you want to know? A: Whether you are hiring a warehouse worker or the chairman #8217;s PA the first principle is to recruit candidates with the right personality. But picking people for your own office puts you under extra pressure to get it right. It doesn #8217;t look good if the chairman or chief executive makes a poor personal appointment. You want to set an example to the rest of the business by having a first class team in your office. Don #8217;t risk doing the interviewing on your own, get expert help. Many of your managers do a lot more interviews than you do, ask one to help you through the process. A second opinion will help you avoid making a major mistake, but the final choice must be down to you ndash; use your instinct to pick the person who you think will make the best new member of your team. You never know whether a new appointment will be a success until you start working together. The qualities you need (loyalty, honesty and an appreciation of your values) are impossible to discover in a CV or a reference. We were about to make an appointment recently until we followed up the two references. Both referees said they would not reappoint the candidate (the issue was poor time keeping) and when we withdrew the offer the candidate revealed her true character. It pays to get to know your preferred candidate as well as possible before confirming the appointment. Arrange a second interview and, if possible, a trial period. All this can take a lot of time. It is often safer to choose an internal candidate. http://www.timpson.co.uk/blog/article/25/how-to-act-when-business-partners-fall-out http://www.timpson.co.uk/blog/article/25/how-to-act-when-business-partners-fall-out Q The large high-street retailers and supermarkets are getting tougher on their suppliers and I #8217;ve had enough. If I can #8217;t make any money from selling to them, I don #8217;t see why I should. It means turning away a large volume of our work and making people redundant, but I don #8217;t want to be a busy and penniless fool. What do you think? A If you can #8217;t offer great value for money don #8217;t bother the supermarket buyers. They are trained to get the lowest price and their promotion prospects depend on making the maximum margin. Some can be difficult to deal with, but be patient. Few buyers stay in the same job very long. The next new buyer may be a nicer guy but he will still do his best to screw down the price. You can #8217;t blame a buyer for pushing as hard as he can. You say that you don #8217;t make money, but do all your competitors also show a loss on their supermarket sales? I doubt it. Look closely at your cost structure. If competitors are profitable ndash; what do they do that you should copy? If you are not suited to the cut and thrust of the supermarket world you need to develop a premium product that you can sell through specialist retailers. But don #8217;t expect an easy ride. Upmarket buyers can also drive a hard bargain. Q I #8217;m increasingly buying into the idea that I should let the poorest performers in my company ndash; the bottom 10pc ndash; go each year to keep everyone on their toes. It sounds tough but actively managing people out of the business who are not contributing as much as someone else would has to be the right thing, hasn #8217;t it? A I first came across this idea when I read Jack Welch #8217;s book about his career at General Electric. I thought his approach was pretty draconian (I still do), but understand what he was saying. Try a simple exercise. Rate all your colleagues out of 10. If you have some threes, fours and fives, they should be encouraged to leave. If you repeat the exercise in 12 months when the low scorers have gone you will look closely at the sixes and sevens. Take this tough line and don #8217;t be tempted to replace all the leavers ndash; use some of the savings to pay your superstars more money, leaving a bit to boost your bottom line. Most managers opt for the easy life. Spurred on by HR managers who point out the problems of making people redundant they leave colleagues in the wrong job for far too long. Keeping up standards is a big part of your job and whenever you say goodbye to drongos the rest of your workforce will be delighted to see them go. Q Setting aside your existing directors, who seem to be doing a good job, if you had the chance who would you appoint as your perfect board and would it include Angelina Jolie? A This is one of the trickiest questions I have tackled ndash; picking people is the most difficult part of the job. My first choice is Simon Cowell, someone who seems to make a lot of money almost by instinct. Next, Bill Gates, not for his IT expertise or his money, I just admire the way he has given his wealth away. My third pick is Sir Terry Leahy, probably the best retailer in the UK (and by next spring, he might be looking for something to do). I am also including my wife Alex who has been advising me for over 40 years. Alex doesn #8217;t like meetings but may be tempted to attend if I chose Mick Jagger, who has a good business brain. His alleged mean streak would help to keep us all under control. That, finally, brings me to Angelina Jolie. My son James points out that we have a common interest in adoption and reckons she would be a good addition to the team. I need no more persuading. http://www.timpson.co.uk/blog/article/24/supermarkets-squeeze-suppliers-get-used-to-it- http://www.timpson.co.uk/blog/article/24/supermarkets-squeeze-suppliers-get-used-to-it- Q The snow has caused chaos again and I rsquo;ve noticed my local Timpsons was closed the other day. How has it impacted on your business and have you applied any management lessons from the heavy January snow falls this year? A It has been a difficult week. The snow might be good news for shops selling sledges and sheepskin coats but it is a killer for cobblers. However, there is no point in panicking, there is nothing I can do about the weather and I certainly can rsquo;t blame our branch colleagues for the drop in turnover. I have received reports from all over the country of heroic acts by colleagues fighting through the snow to get to their shop, only to find very few customers on the high street. The severe snow last January caused similar problems and sales slumped by up to 30pc, but as soon as the weather returned to normal, business was better than before. There is nothing better than melting snow to find the holes in your soles. You won rsquo;t find me using the weather as an excuse in my next annual report. Q What rsquo;s on your business and non-business Christmas present wish list this year? A Dear Santa, I am writing to ask you for a special favour this Christmas. Could you please get the Government to bring in a new law? ldquo;The Common Sense and Simplification Act 2011 rdquo;. The objective of this legislation is to reduce red tape and increase trust in the individual. This is bigger than ldquo;The Big Society rdquo;. It will lead to a lot less government. Headline measures within the Act will include: 1. Less legislation ndash; every week while Parliament is in session the Government must repeal a minimum of five laws, including two that were introduced to comply with EU regulations. 2.No meaningless targets ndash; the Government will replace all existing KPIs with two targets: a) Eliminate government debt b) Keep the public sector below 30pc of the UK economy. 3. 20pc tax ndash; income tax, VAT, corporation tax, capital gains and inheritance tax will all be fixed for the next 20 years at 20pc. 4. The Budget ndash; the Chancellor rsquo;s annual Budget speech cannot last longer than half an hour and his measures must fill no more than five pages of A4 paper, with no small print. 5. Benefits for all ndash; every UK citizen will, whatever their age, receive pound;400 a month and pound;200 on their birthday. No forms to fill in and no tax to pay. (This measure, at a stroke, replaces all existing benefits and the old age pension). Q The VAT rise to 20pc is driving me mad. My customers won rsquo;t countenance a price rise and so I rsquo;m having to take it on the chin. If this was meant to be a painless tax rise, the Government should think again. Have you heard how hotels, pubs and retailers are preparing for the rise? A VAT is the easy option for a Chancellor who needs to increase tax revenue but it creates a tough time for traders who are forced to put up prices. Don rsquo;t be tempted to absorb the extra tax. ldquo;No change in our prices rdquo; and ldquo;we pay the VAT rdquo; could be useful short-term marketing slogans early in 2011 but few companies can continue to suffer the loss in margin. The Government will not change its mind, in fact VAT is unlikely to go below 20pc ever again. Don rsquo;t be surprised if it heads towards 25pc. Doing nothing is not an option, it is simply a question of how to recover the extra tax. No big problem if you simply add VAT at the bottom of an invoice, but much trickier for retailers who include tax in the price ticket. Many retailers are looking well beyond price in the quest to maintain margins. Introducing new products provides the chance to get the extra margin while sticking to the traditional price points. Q The people who work in the shops seem to be the centre of your attention ndash; how do you motivate the back office team? A I spend a lot of my time visiting branches, talking to the colleagues who talk to our customers. Our branch colleagues run the business ndash; the back-room boys are there to support them. But that doesn rsquo;t make them second-class citizens. Everyone in our back office team gets an annual bonus based on company profit. We pay extra to colleagues with less than five days absence during the year and a further top up to anyone who spends a day working in a branch. But motivation is not just about money. In the past year we have given our office a pound;1m makeover, including a gym, sauna and pool. There are lots of good ways to say ldquo;well done rdquo;. I find a hand written letter to their home address enclosing a cheque (tax paid) is the best way to let colleagues know how much they are appreciated. http://www.timpson.co.uk/blog/article/23/snow-excuses-the-bad-weather-is-a-thaw-point http://www.timpson.co.uk/blog/article/23/snow-excuses-the-bad-weather-is-a-thaw-point Have you considered running your business by the 80:20 rule? If you shut 80pc of your shops, would you retain 80pc of the profits from the remaining 20pc high-flyers? If you did this I #8217;m sure life your would be a lot simpler. The 80:20 rule is a statement of the obvious that offers very little help to the experienced entrepreneur. In a nationwide chain some shops are bound to perform better than others. It is much easier to take money in Windsor, Winchester and Witney than tougher trading towns such as Bootle and Billingham. Accountants and statisticians who sit in the office running a business by numbers think that if one shop can take pound;12,000 a week all the others can do the same. But it doesn #8217;t work like that, there is bound to be a variation in performance. I have never closed a shop that is making a profit ndash; it only takes a day to shut a shop but it takes years to establish a new business. As long as the branch is making a contribution to overheads I would always keep it open. If we were to cut out all the plodders and concentrate on the superstars we would have to reduce our chain from 900 shops to about 250 and cease to be a national brand. We like having shops everywhere and employing people all over the country. Of course you should close any loss-making shops, but closing the poor performing 80pc is a recipe for disaster. And guess what? If you did cut back to the top 20pc the 80:20 rule will still apply to the shops that remain. I have read in one of your previous answers that you give all your employees the day off on their birthday. That may be admirable but can you really justify the cost and management time involved in finding cover in your one-person shops? Isn #8217;t it creating a headache for your management team? It is certainly not something we have thought worthy of a financial appraisal, but if there is a significant cost it is money very well spent. We introduced the birthdays off with pay in 2003 to help colleagues and the move was so popular we made the perk a permanent fixture. We like making our people feel appreciated, especially in a way that is noticed by their family and friends. Sure, our area team has to rearrange the staffing rota but if that was such a big problem they would soon let us know. But our birthdays off get their full support ndash; they think it helps to improve our attendance record. On average a Timpson colleague is off for four sick days a year and in the public sector the figure can be as much as three weeks. Our lack of sickies is helped by a bonus scheme that pays out only to colleagues who work a full week and we make it easier for the area teams to open every branch by insisting that any colleague who is going to be sick must ring in before 7.30 am. I am pretty sure that by giving birthdays off we improve attendance for the rest of the year. The Government #8217;s spending review is certain to cut discretionary spending in the high street over the next year or two. What can retailers do buck the inevitable trend? We seem to be lucky. Shoe repairs do well in difficult times, with cash-strapped customers preferring to replace the soles rather than buy new shoes. However, even if our sales are strong we will soon have to fund the extra VAT. Trading will be tough but there is no point in looking gloomy as a pessimistic posture spreads negative vibes throughout the company. This is a prime time for leadership and your job is to create the foundations of success when the recovery comes. Don #8217;t advocate any dramatic changes to cope with what is probably a short-term difficulty. Stick to the formula that worked well when the economy was in our favour. Too many managers cut prices to compensate for a drop in demand. Very few companies can emulate Primark, and price-cutting can devastate margins and undermine your long-term image for quality. Stand by what you are good at e_SEnD you can offer excellent value without being cheap. Look for costs you don #8217;t really need ndash; spend a day going through every bill and be honest, are there things you can cut out that no one would notice? Take this opportunity to say goodbye to the drongo ndash; the person everyone knows is no good ndash; but never be tempted to save money on your superstars. However tough it gets, keep your pay up with inflation for your key people and even surprise them with a special bonus. This may be a good time to cut costs but don #8217;t cut corners. Lower standards can affect your level of service and damage your reputation. Don #8217;t worry too much about profit, concentrate on the cash. If sales are down profits might suffer but with a healthy position at the bank you will be able to take advantage when the next boom arrives http://www.timpson.co.uk/blog/article/22/the-accountants-8217-80-20-rule-is-a-recipe-for-disaster http://www.timpson.co.uk/blog/article/22/the-accountants-8217-80-20-rule-is-a-recipe-for-disaster Is a company car still a justifiable part of a remuneration package? In the past, it was a means of avoiding pay freezes and tax. Now it can be seen as discriminatory, environmentally-unfriendly and costly. Your question has a hint of the national negativity that does nothing to help British business. I don #8217;t understand why we are so reluctant to celebrate success. It is about time, instead of criticising high achievers, we allow them to enjoy success. For many, the car they drive is an important measure of achievement. I see nothing wrong in that. The tax advantages of running a company car have all but disappeared but many managers need a car to do their job. We rely on area supervisors who travel round our shops ndash; they are not filling up with petrol for fun. I have seen many careers blossom as ambitious colleagues gain confidence, and collecting the keys to a company car is part of that confidence building. Only this week I met one of our assistant area managers who proudly showed me his new company car. The taxman might not quot;get it quot; but for some of us the car is an essential tool to do the job. It helps if we give colleagues a car they are proud of. Do you attend all the board meetings in your many companies? If you do, it must be time consuming and sometimes quite boring. How do you stay awake? I am not a meeting man and usually give our divisional board meetings a miss, but chairing our group board is an important part of my job. My son James chairs all the operating boards which deal with the detail but he never lets a meeting last long. We both believe anything worth saying can be said within two hours. On the rare occasions I attend I do a lot of doodling to help me concentrate. I find meetings more fun when I am in the chair. Everyone benefits from a good set of reports, as long as they are delivered in plenty of time. I hate papers that are tabled on the day and am irritated by the modern practice of submitting extra emails at the 11th hour. Directors have to tick a lot of legal boxes but our agenda highlights matters of topical importance ahead of the routine. I don #8217;t expect everyone to read all the papers but as chairman I read the lot (often twice), highlighting the topics that need to be discussed. We cover a lot of ground in less than two hours but seldom come to a firm conclusion. I believe meetings are for communication and discussion, and for directors to give advice but it is the chief executive who makes the final decision. http://www.timpson.co.uk/blog/article/21/john-timpson-company-cars-can-drive-ambition http://www.timpson.co.uk/blog/article/21/john-timpson-company-cars-can-drive-ambition Do you have a product development team or a new ventures unit? Where are your ideas for new products and services coming from? We don #8217;t have a department devoted to product development nor do we have a marketing team; we don #8217;t do market research and we have never used consultants to tell us how to shape the business. This is not an attempt to save money, my son James and I are finding new ideas all the time as we travel round the business. Our quot;Upside Down Management quot; style encourages colleagues to innovate, it gives them the authority to do their job in the way they know best. They are free to use their initiative By spending at least half our working lives visiting the shops, James and I spot enough new ideas to keep re-inventing the business. We have a few technical experts who help - like Jack, who is making sure we don #8217;t make mistakes with our growing dry cleaning service and Ivan who is a genius at photo processing - but we decide how we want the company to evolve. When it comes to new ideas I want to be involved, it #8217;s the most enjoyable part of running a business. My company has had to make a number of employees #8217; jobs redundant this year. Should I cancel all the company #8217;s Christmas parties in December in respect of those who are no longer with the company or should we continue to enjoy the Festive season after such a bleak year? There is no need to act like Scrooge. Your ex-employees have moved on and so should you. Look after the colleagues who are still with you. You can #8217;t cancel Christmas. Some sort of party is better than no party at all but an austerity quot;pay for your own pint quot; session at the local pub sends the wrong message. Don #8217;t be stingy, but don #8217;t go silly. There is no need to book a big band when a half decent DJ will do. Pay for some drinks but don #8217;t leave the tab open until midnight. This isn #8217;t just a party, it is a PR exercise and you have an important part to play. You must turn up and talk to as many people as possible, but be warned, after a couple of drinks some colleagues might summon the courage to tell you how to run the business. Even worse their extrovert partner could air a catalogue of grievances on their behalf. Arrive early; conversation is much easier before the drink takes over. Anything worth saying will be said by 10pm. As soon as the music starts it is time for you to leave and let them really enjoy themselves in your absence. I have read that you have a number of non-core businesses in your group of companies, such as two pubs, a manufacturer of house signs and an events business. Don #8217;t these activities take up a greater proportion of management time and deflect attention away from the main business? Yes, you are spot on. Non-core businesses are bound to soak up a disproportionate amount of time, and there are plenty of times when I wonder why we bother to venture outside our comfort zone. But every so often a new activity blossoms into a big business ndash; like our adventure into watch repairs. We first offered a modest watch strap and battery service in 1996. During the first two years we were spending over 25pc of our time on less than 2pc of our turnover, and watch repairing was making a loss, but some 14 years later we have a comprehensive watch repair service that is the biggest in Britain. It is in our nature to keep trying new ideas, but we will never forget that most of our money is made from cutting keys and repairing shoes. Very few #8217;serial entrepreneurs #8217; fully repeat the success of their first big enterprise. http://www.timpson.co.uk/blog/article/20/john-timpson-trying-out-new-ideas-is-the-best-part-of-business- http://www.timpson.co.uk/blog/article/20/john-timpson-trying-out-new-ideas-is-the-best-part-of-business- Q Many suppliers to multiple retailers continually complain they are unfairly treated in price and payment negotiations. Do you have long-term suppliers who have grown with your business or are you in an ultra-competitive market, which means the cheapest offer will prevail? A If you are purely purchasing a commodity then the major considerations must be price and payment terms. As a result e-auctions are bound to play an increasing part in the buying game. But we still rely on several suppliers whose service level is just as important as price. Personal relationships play a big part in the way one company deals with another. My first executive job was to buy women rsquo;s shoes. I was lucky to share a buying office with two experienced campaigners who taught me how to forecast fashion and how to negotiate a good deal with good manners. I was also fortunate to find some suppliers who sold the best-selling shoes and were a pleasure to deal with. I have never forgotten the importance of treating suppliers in the way you would wish to be treated yourself. That is why I invite all our key providers to a regular lunch that is the nearest we get to an AGM. I use the opportunity to give these important stakeholders a frank update on trading. To ensure that the ethical approach I learnt when I was a buyer continues, we have written a suppliers rsquo; guide to explain how we do business. The guide makes clear that we stick to every deal, tell the truth and pay on the nail. We are not a soft touch but we think it is important for suppliers to feel they are members of the team. Q How will the new Equality Act affect your business? I expect working on their feet all day in your shops will prevent many people doing the job properly, but how can you test that before you employ them? A When I started work 50 years ago, shoe repairing was a popular trade for physically disabled workers. But in the late 1960s when repair machinery was brought in to the shop and shoe repairers started to serve customers, conditions changed. Today, as you point out, to work in one of our shops you have to spend all day on your feet. However, we have never seen the need to introduce physical tests into our recruitment process ndash; in our trade you do not need super-fit athletes. We are looking for people who possess a positive personality. The ability to work hard is more about attitude than physique. The Equality Act looks like becoming the latest fad that HR professionals will use to irritate business. I will be wary of any expert who tells me quot;You have to employ him quot; or quot;You can rsquo;t do that quot;. I am all for equality but I will make sure that the obsession with employment law doesn rsquo;t get in the way of common sense. Q I am impressed by your passion for making money by focusing on customer service and staff training. But how does your passion for making money correlate with your wife Alex rsquo;s passion for the renowned loss-making hobby of owning racehorses? A While we were having breakfast last Sunday I took a chance and showed this question to Alex. She quickly came up with: quot;As long as I rsquo;ve got my horses I will get your shirts ironed so you can go out to earn the money to pay the training fees. quot; The moral: partners may not be on the payroll but they play a vital part and should share in your success. At times I have come close to becoming a workaholic. Fortunately, I now realise that it is important to have a significant slice of life outside work. Admittedly, Alex could have chosen a cheaper hobby but at least horse racing is an activity we can enjoy together. If I applied the same financial hurdles to the horses that I use in the business the whole thing would be a disaster. Luckily, we can afford not to worry about it, so I happily allow Alex to exercise a bit of upside-down management and let our trainers Paul Webber and Henry Daly make most of the decisions. It could have been worse ndash; Alex might have chosen to invest in a football club. http://www.timpson.co.uk/blog/article/18/treat-suppliers-as-you-would-treat-yourself http://www.timpson.co.uk/blog/article/18/treat-suppliers-as-you-would-treat-yourself Q I have started up a business recently and it is going as well as I could hope for. A competitor has come up for sale and I feel I must go for it. Have you any guidance on the price I should pay, perhaps by the number of years to get a payback? A First of all, you don rsquo;t have to do anything. Sometimes what appears to be the opportunity of a lifetime can be a step too far. Before you even think about the price make sure it is a deal you really want to do. Acquisitions can put the core business at risk, it is easy to take your eye off the ball when the deal is being done, and when it is over there is a risk that everyone falls in love with the new toy to the detriment of the main business. But the biggest peril is that a deal too far will saddle the company with too much debt. It is vital to forecast cash flow as the price will have a big influence on your future finances. There is no magic formula, forget about earn-out ratios, simply decide the maximum you would be willing to pay and then negotiate. My best advice is to follow your instinct, only pay what you can afford to pay and keep your fingers crossed. Good luck. Q Why do employees who have a job that pays well, provides a future pension and many other employee benefits, put everything at risk by stealing from their employers? How do you manage it in your business? A It is a sad but certain fact that someone somewhere is pinching company money. Many start for what they think is a good reason ndash; such as settling a debt. Having stolen once they try it again and dishonesty soon becomes a habit. There is no excuse for dishonesty in any business, certainly not in ours. We have a hardship fund available to help colleagues in financial difficulty. We lend money to solve just the type of household debt that could otherwise tempt colleagues to take from the till. That is one of many employee benefits at Timpson, but being nice to your workforce doesn rsquo;t always stop them taking your cash. Don rsquo;t spend a fortune turning your business into a fortress. Take sensible steps but never let security get in the way of doing business as crooks will still find a way round the rules. We spot most culprits by common-sense observation. An obviously unusual sales performance, excess use of raw materials or simply the failure to look you straight in the eye can be enough to alert us to a possible problem. If suspicious we put in a covert camera. When we have the evidence we let the scoundrels see the film ndash; then dismiss them for gross misconduct. It rsquo;s an unpleasant but essential part of managing a business. Q I rsquo;ve been approached by a consultant who suggests I solve my company rsquo;s cash-flow problems by making a loan from my pension fund. He tells me it rsquo;s perfectly legal and very tax efficient but I rsquo;m a little nervous. The banks have told me to go away so I don rsquo;t have many options. What would you do? A I assume you are talking about a personal pension as the trustees of a company scheme couldn rsquo;t invest in the business. Are you sure you want to risk your life savings in an enterprise the bank manager won rsquo;t back? Don rsquo;t be sentimental, I can understand your keenness to keep the company going but the cash-flow problem may be sending you a serious message. Think about your future prospects. It rsquo;s easy to write a cheque that solves your short-term cash-flow needs, but if business looks like getting worse you may never see the money again. Rather than risking your pension, look at other sources of debt such as leasing, mortgages or factoring. If no one will bail you out the perhaps you could consider putting the company into administration and buying it back as a pre-pack. nbsp; http://www.timpson.co.uk/blog/article/1/once-in-a-lifetime-chance-could-end-up-as-a-mistake- http://www.timpson.co.uk/blog/article/1/once-in-a-lifetime-chance-could-end-up-as-a-mistake- We rsquo;re swamped with applications every time we advertise a new post and, to be honest, we don rsquo;t have the time to read them all let alone give them all a chance to impress us. The danger is we rsquo;ll miss someone really good just because of the volume. Do you have any tricks to filter out all but the very best applications? Why not ring them up? People can often reveal their personality at the end of a phone. A quick call could save you from a boring interview with someone who is only good at writing CVs. Try a bit of delegation. You don rsquo;t have to do all the screening yourself as there will be plenty of other people in your business who are good at picking personalities. Let them reduce the candidates down to a shortlist. Create a waiting list. Keep interviewing even when you have no vacancies and put any likely candidates on a waiting list (If a superstar turns up take them on straight away). If you don rsquo;t already do it, launch an quot;introduce a friend quot; scheme and reward your colleagues to do most of the recruiting work on your behalf. It works so well that 45pc of our new recruits are introduced by current colleagues. Whatever you do don rsquo;t be tempted to base your decision on the application form. At Timpson we are not bothered about A-levels and GCSEs, we are looking for personality. The only way we can find out if the form has been filled in by a grumpy cobbler is to meet him face to face. High-street retailers keep bleating on about how smaller companies should offer more structured work experience to more young people. They have huge HR departments that are looking for something to do, but we run a tight ship. We give local kids a chance through our apprenticeship scheme but it really gets my back up to be lectured by the same companies that are squeezing my margins and forcing me to scrap one of the two places we have to offer this year. I think they should get their own house in order and am hoping you agree. Never mind what anyone else thinks, make up your own mind about offering work experience. We put a lot of effort into our apprentice scheme, it is an essential feature of the business. With no other national training course for shoe repairers and key cutters, if we didn rsquo;t train people ourselves we wouldn rsquo;t have the skills we need. Every new recruit joins a 16-week apprentice programme that teaches them all the basics our shops do. In addition, we provide a number of short-term work experience placements. This is only worthwhile if you have a properly structured programme that keeps the young people busy and teaches them something along the way. Despite our heavyweight investment in training we don rsquo;t get any grants. The Government rsquo;s skills agenda splashes a lot of cash but we don rsquo;t tick the right boxes. There is a real danger that far too much of the money invested by central government finishes in the pockets of training agency administrators and the enormous network of training providers, with far too small a proportion benefiting the trainees themselves. Are you tempted to put in place a share option incentive scheme for your staff? My accountant says now is a good time to do it to reward key staff for working hard during the recession and because company valuations are low. It is cynical to suggest that your accountant has one eye on picking up a juicy fee, but think carefully before you take his advice. When I did a management buyout in 1983 I quickly set up an employee share scheme. In many ways it worked well. I was happy to give colleagues a chance to share in the equity and when I sold the business four years later their capital gain was a partial compensation for the change in ownership. But that experience taught me about some of the difficulties. As soon as you establish the scheme you must fulfil legal obligations to the new shareholders. Your colleagues now not only have a share in the business, they also have a say in how it should be run and have a right to lots of information. I am all for our workforce getting to know the detail but prefer to use my own words to tell the story. Most were confused by the statutory statements produced by our lawyers. The scheme was not a great motivator. The potential benefits were too long term to provoke a better performance. Annual, monthly and weekly bonuses definitely make our team more conscious of turnover and profit improvement. Today, our special reward for long service employees is a final-salary pension scheme. If you currently have the luxury of being your own boss, think twice before widening the net. Imagine an AGM attended by your most critical colleagues. I prefer to give our team big bonuses and simply report to my wife, Alex. http://www.timpson.co.uk/blog/article/3/application-forms-won-t-identify-the-best-employees http://www.timpson.co.uk/blog/article/3/application-forms-won-t-identify-the-best-employees Q Are you an equity or debt man? I rsquo;m debt every time, if I can get hold of any, as I don rsquo;t need any outside investors telling me what rsquo;s best for my business. A Assuming you are heading for success, selling off shares is bound to be the most expensive form of funding. Equity will only seem cheap if your business is about to do badly. It is almost certainly better to borrow from a bank, but wherever the cash comes from expect some sort of interference ndash; lenders like to know what you are doing with their cash. The only way to be entirely your own boss is to use your own money. On the rare occasions when I watch Dragons rsquo; Den I wonder why the budding businessmen are so eager to release such a large slug of equity. It is probably a sign of impatience by owners looking for instant success. Entrepreneurs in a rush are in danger of spending money unwisely. Tight cash control is a very good business discipline, it forces you to look for economies and make choices. Borrowings that are too readily available can encourage overspending on capital expenditure that may not be necessary. It is worth remembering that one day every loan needs to be repaid. Given the choice I wouldn rsquo;t go for equity or a loan. Ideally I would always have cash in the bank. Q The UK Borders Agency has just turned down a visa application for a member of staff who is from outside the EU. They had originally said it would be OK and I had been planning on this key member of staff being around to lead a new customer project that could turn our fortunes around. I suppose what they rsquo;re trying to do is force me to hire someone from the UK but for this particular job that just isn rsquo;t possible. Do you have any suggestions? A This must be a highly specialist role. I am amazed that out of 60m UK citizens you can rsquo;t find one person who can do the job. The Borders Agency could be doing you a favour. Putting such faith in a high-profile new recruit may lead to disaster. Expensive signings seldom work out as well as expected (I am a Manchester City fan). When it comes to special projects I would always pick one of our own people. Whenever you introduce a new recruit you take a risk. They may not fit into your culture and you could find they are not nearly as good as you expected. After the hassle of bringing them from abroad and an expensive period of induction it could all become a major disappointment. At least with an internal appointment you know who you are getting Our policy of promoting from within is good for the business and helps to create a positive culture. Most businesses have unrealistically high expectations of people who work elsewhere and underestimate the talent of their established team. If you really think this is too big a job for any of your current colleagues, why not do it yourself? Q I rsquo;ve just read about a survey of employees that reported the vast majority of teams bounced back from setback more quickly when they were well managed and given support. Is this something you can relate to and have seen in action? A Without good management a business in trouble has little chance of survival. Even in expert hands some companies find it tough to make a turnaround. Whenever we acquire a company from quot;The Administrator quot; (and we have bought quite a few) we are reminded how difficult it is to put a wayward company back on track. When we bought Max Spielmann, the photo shops, in December 2008, we were lucky, we had some good senior managers to help pull it round. The switch from analogue photography to digital had dealt a devastating blow. When the business went into administration sales were way down on year, it was trading at a loss, leaking cash at an alarming rate. To save money, the previous management shut shops and put the majority of branch colleagues on part-time work. These cost savings only served to delay the day of doom. When we bought the business we needed a radical approach, to create a new culture and attract new customers. It takes time to change attitudes but in 20 months the buzz is back in the business, the shops have all had a makeover and they have a new income stream based on an in-store portrait service from as little as pound;5.95. Our Max Spielmann shop colleagues have completely changed the business. They now have a smile on their face and their customers notice. The business is back in profit and we are starting to open new Max Spielmann branches ndash; we could never have got this result without the help of some great managers. I am a great believer in delegation but even the most devolved organisation needs an inspirational leader. http://www.timpson.co.uk/blog/article/4/using-your-own-money-to-grow-beats-the-banks- http://www.timpson.co.uk/blog/article/4/using-your-own-money-to-grow-beats-the-banks- Is Timpsons having to comply with the Government rsquo;s carbon reduction commitment as I rsquo;m having a nightmare working out our energy use for the period they want (2008)? We don rsquo;t have to buy any permits on the scheme but do have an electricity meter that means we have to supply the Environment Agency with our energy consumption. Fortunately we escape as our shops use too little energy to cause us to fill in a form, but that doesn rsquo;t stop me showing sympathy to those trapped by this irritating bit of bureaucracy, and worrying that Carbon Credits and Permits will create a false market and encourage silly decisions. Some time ago I predicted that the Carbon Footprint could become a more significant measure of success than sales or profit. I also pointed out that being cobblers we sit in a perfect position ndash; as repairers we save resources simply by doing our job. So, in a future energy-based economy, we should receive a carbon credit (say pound;10!) for every shoe we repair. There is, however, a problem ndash; the subsidy would attract new competitors into our industry simply to get the pound;10 credit! To turn that threat into an opportunity I would start a training agency to help new cobblers (the training grants will probably be worth as much as the Carbon Credits!) I write all this to illustrate the dangers of messing with the market economy. Bogus bonuses based on politically blessed behavior will almost certainly bring unwelcome consequences. If we don rsquo;t watch it we will soon have wind farms the size of Wales. As far as 2008 is concerned, your energy supplier should have the data you need ndash; give him the headache by asking him to complete the return on your behalf. I rsquo;m getting fed up that our annual staff day out at Alton Towers is turning into more of a family freebie. Some colleagues seem to think it rsquo;s ok to bring their children. The original idea was to make sure we had at least one day a year where we all got together but as the company has grown maintaining this friendly quot;family quot; culture has become more difficult to manage and afford. What would you do? I know what you mean, once a year I used to close the office at 10.30am on a Friday morning and everyone came by coach to a Barbecue in our garden. The first year was a great success and the second year, when colleagues knew what to expect, was probably even better. But I felt the third time fell a bit flat, people were starting to take the trip for granted, it was no longer a treat. We still have barbecues, but only every three or four years. It is good to celebrate big landmarks and major successes. We find special excuses to present Company Awards, usually in a marquee at our home. Past Award Ceremonies have marked The Millennium, our Centenary, and the raising of pound;1m for ChildLine. These big company functions are a small part of the Timpson social scene. We have football tournaments, golf days, days at the races, and ten pin bowling. Occasionally, following a record week, we have taken the whole office to a local pub for a buffet and put pound;1,000 behind the bar. Bill, our People Person, arranges a lot of the events for our office and warehouse, but we also encourage away days for shop based colleagues throughout the country. Every area team (we have 28 areas) has a social fund to spend however they wish - within reason! Your original idea of a day out at Alton Towers worked because it was original. Keep supporting the family culture by finding lots of other ways for your colleagues to have fun. I hear you rsquo;ve just enjoyed a late summer holiday. Where do you hide your BlackBerry? I took my BlackBerry on its first holiday in January 2005 and my wife Alex didn rsquo;t like it. quot;Don rsquo;t let that thing ruin our holiday, quot; she said quot;I thought you had come here to get away from the office. quot; I kept it in the bathroom, and surreptitiously checked my e mails at least four times a day. Surprisingly I found constant updates from colleagues back home quite reassuring but to Alex this need to keep in touch confirmed my inability to switch off. Eventually things improved. Towards the end of one holiday Alex saw the benefit a BlackBerry can bring. Our return flight was delayed and we needed to tell our children. quot;Use the BlackBerry! quot; she suggested. I am not as badly addicted as the businessmen you see bashing messages into their BlackBerry as they walk up and down the beach, but I am sufficiently hooked to make an international call to IT whenever the server let rsquo;s me down. My Blackberry is now allowed to join us on holiday so I no longer need to hide it in my wash bag. The big breakthrough came earlier this year when I gave Alex her own BlackBerry for her birthday. http://www.timpson.co.uk/blog/article/5/john-timpson- http://www.timpson.co.uk/blog/article/5/john-timpson- September is always a frantic month for us after the summer lull. What are the best and worst business ideas that you rsquo;ve dreamed up while on holiday and put in place when you got back? I am on holiday right now and, apart from submitting the copy for this column, my wife Alex has banned me from doing any work. But she can rsquo;t stop me thinking about it. nbsp;Sitting on the beach with a clear mind, the business seems so simple and the ideas start to flow ndash; each one an obvious winner, but I can only remember one holiday brainwave that was a real success. Fortunately, all my other fancy suggestions never got much further than Manchester Airport. As soon as I got back to the real world my great ideas didn rsquo;t seem so great. When I put each scheme forward to my colleagues they were unconvinced. They refused to back my enthusiasm for a range of projects that included quot;Sew Easy quot;, a chain of garment repair and alteration shops, and a mobile shoe-repair service I wanted to call quot;Heels on Wheels quot;. These holiday dreams didn rsquo;t get off the ground, so I will never know whether they would have worked. But the board foolishly let me go ahead with a retail idea called quot;Security Now quot; which combined key-cutting with an off-site locksmith and burglar alarm service. It was a good name but didn rsquo;t turn out to be a good business. We opened three shops and lost pound;75,000 before admitting defeat. At least I can claim one success. In 1987, while taking a camper van from Seattle to Los Angeles, I spotted a chain of shops called quot;Things Remembered quot; which did personalised engraving. It helped me see the potential of a new service. Today our while-you-wait engraving of tankards, jewellery and other personal gifts brings in sales of over pound;7m a year. One brilliant brainwave in 25 years can hardly be called a recommendation for strategic planning on the beach, so my team back home will be relieved to know that, so far, this holiday hasn rsquo;t produced even the hint of a new idea. Talking to other businesses, do you sense real concern over the chances of double-dip recession, or is this just hype and actually most people are cautiously confident? In the 1960s, at Nottingham University studying industrial economics, I discovered that economic forecasting is a foolhardy game. Today rsquo;s experts find it difficult to agree the correct level of sales for last month, so I have little faith in their ability to make a medium-term forecast. None of us really know how we will be placed this time next year, but looking at it logically we can expect a tough time. So far relatively few people have been devastated by the recession, with low interest rates keeping mortgage costs down and the Government making sure benefits are maintained, most families can still happily fund their weekly trip to the supermarket. But UK plc has yet to balance the books. For the past three years we have been in denial, like a household whose wage earner has lost his job but still pretends to go to work. Much less money is coming in but expenditure continues at the same level. Reality is around the corner. With lower public expenditure, wage increases below inflation and VAT going up to 20pc, people will have less money to spend. This is not really a quot;double dip quot; ndash; it is the delayed effect of finally facing up to the economic facts. We at Timpson have yet to see a drop in sales. However, I am nervous. We will control our capital expenditure carefully and try to keep as much money as possible in the bank. The economy won rsquo;t recover until confidence returns, so, if other businessmen share my prudent approach, the quot;double dip quot; could become a racing certainty. I have read in one of your previous answers that your son has transformed the working environment in your head office. Could you give some details, as I want to do something similar. I had some doubts about James rsquo;s plan to transform our office, but it was partly my fault. Three years ago we went together to visit a business based in Helsinki called Sol. Their office was stunning ndash; a vividly coloured converted film studio with the ultimate in hot-desking, a paperless office with no telephone system (they all used mobiles). Colleagues work whenever and wherever they want ndash; if they turn up at the office they find life-sized plaster sculptures of owners Liisa and Juhapekka Joronen sat on a bench watching them work. James returned home determined to follow Sol rsquo;s example and let his imagination run riot. Two years and pound;1m later we have our own office experience. Today, Timpson House has a fireman rsquo;s pole, two old red telephone boxes, a gym complete with a training pool and a 1903 design boardroom we call Cobbler rsquo;s Cottage. I needn rsquo;t have worried ndash; the makeover has worked, it has created a real buzz and our colleagues love it. quot;It reflects our culture, quot; says James. quot;If you provide an amazing office there is every chance that colleagues will amaze you in return. quot; http://www.timpson.co.uk/blog/article/6/john-timpson-i-ve-had-some-of-my-best-business-ideas-while-sitting-on-a-beach http://www.timpson.co.uk/blog/article/6/john-timpson-i-ve-had-some-of-my-best-business-ideas-while-sitting-on-a-beach Q You cite retailer Richer Sounds as one of your favourite businesses. What is it that they do that your really admire? A I first came across Richer Sounds many years ago when I read Julian Richer rsquo;s book The Richer Way. His book was so full of common sense that I filled several pages of an A4 pad with his ideas. The ideas are not only original, they work. Thanks to Richer Sounds we now have holiday homes for colleagues and a residential course for new starters so they can quickly understand our culture. Richer doesn rsquo;t follow convention, by daring to be different he has created a unique business. With a single minded belief in the power of great service he is able to attract customers to off site locations that enjoy a high turnover at a low rent. Go to his shops and you start to see why they have been so successful ndash; the displays are distinctive but the stars of the show are the colleagues who work in-store. Richer Sounds pick their raw recruits on personality and it pays off. Few businesses would ever have the courage to create such faith in non-traditional methods. This business is not based on the accepted wisdom of professional management, it derives its strength from a strong personal belief in its customers and its colleagues by Julian and his chief exec, David Robinson. Julian and David have run Richer Sounds for more than 20 years providing a level of continuity and strong leadership that few other businesses enjoy. Their example has helped many of us to improve our businesses. Q I rsquo;ve pulled all the operational levers ndash; outsourcing, downsizing, reviewing suppliers ndash; in an effort to protect my profitability. The only thing I haven rsquo;t looked at is my top line. How do you use price in your business to get ahead of your competitors and have you got any advice or warnings you could offer me? A When demand is down, your sales will almost certainly suffer and it is perhaps prudent to plan to make less profit. It is probably impossible to make more money when the market is in decline, so don rsquo;t compromise your long term future by pursuing a short-term increase in sales. When things are tough it is tempting to boost sales by cutting prices, but only one player in your market can be the cheapest and that probably won rsquo;t be you. Pricing should only be your priority if your appeal is based on a low-ticket offer like Primark and Shoe Zone. Don rsquo;t get involved in a price war unless you know you can win. Cut-price competition can get out of hand with rivals selling well below cost because no one has the courage to back down. It is a lesson I have learnt through bitter experience. With lower prices and little margin, volumes may well be up but you become busy fools trading at a loss. You can slash prices with a stroke of the pen: it is easy, anyone can do it. The smart, but more difficult way, to stimulate demand is to engineer a better product or service. Think about what you sell and how you sell it, not just the price you sell it for. The best business in each market (the one providing the most popular product) usually makes the most money. People do not expect to pay peanuts for a professional service. http://www.timpson.co.uk/blog/article/7/john-timpson-why-i-rate-richer-sounds http://www.timpson.co.uk/blog/article/7/john-timpson-why-i-rate-richer-sounds Q I need to take some important investment decisions, which will have a bearing on the performance of my retail business in 12 months rsquo; time. My problem is that I am confused by all the official forecasts emanating from quot;those in the know quot;. What is your forecast for the UK retail market in 12 months? A Don rsquo;t be deceived by any bullish forecasts coming from your competitors, there are always too many good news stories going around for them all to be believed. It rsquo;s safe to assume that things will be better than you fear and worse than you hope for. With government expenditure falling and unemployment on the increase there will be less money in people rsquo;s pockets and less to spend in the shops. It can only get worse when VAT goes up to 20pc in the new year. There rsquo;s no point trying to guess whether sales are going to fall by 1pc, 6pc, or somewhere in between ndash; just plan on the basis that things will be bad and you won rsquo;t be disappointed. Don rsquo;t wait for sales to drop, take action now. Watch your cash flow like a hawk, look at your bank balance every day ndash; this is not a good time to give your bank manager any surprises. Now is the time to negotiate hard and take tough decisions. You can rsquo;t afford to pay passengers e_SEnD root out the poor performers and encourage them to work for someone else. Call an end to any unprofitable projects and close branches that don rsquo;t make any money. No one can be sure how bad things will be in 12 months, all you can do is to take a prudent approach and keep your fingers crossed. Q Why do you not have a female director on your main board of directors? Would not a specialist retailer, like Mary Portas, bring value to your organisation? A We may not have any women on our main board but they are well represented on the operating boards of our two trading companies. This should not be seen as evidence of a Timpson glass ceiling. Our core shoe repair business has always attracted a high proportion of male recruits and with a policy of promoting from within it is hardly surprising that many of the senior management positions are filled by men. Our other retail chain, Max Spielmann, is the opposite, a business dominated by women, with women supplying most of the management. Again it is not surprising that shops dealing with passport photos and portraits attract women workers. We simply appoint the best person for each job, a principle that would be lost if we were required to have quotas. Picking the right people is one of the secrets of our success. Proportional representation should be left to the politicians ndash; it is not the right way to appoint a winning team. Mary Portas wrote in The Daily Telegraph about our shop in Regent Street London but she only gave us 6/10. She thought I could improve my marketing, which I no doubt can, but it is difficult for a mainstream retailer to understand shoe repairs and key cutting. Running our sort of service business is very different from selling merchandise such as clothes, food or furniture. It is all about people, picking the right personalities and training them how to do the range of jobs we offer. When it comes to female advice at the highest level I will continue to rely on my wife, Alex. Q I can understand there are many reasons for people to continue working beyond the current retirement ages. However, it is not realistic in my business because of the job rsquo;s physical demands. How can I keep my business competitive if legislation forces me to retain employees who can no longer maintain performance standards through no fault of their own? A Although the law has changed there is still a provision for legally dismissing someone because of capability ndash; it is accepted that some physical jobs are more difficult to do as you approach 70. However, it will be much more difficult to establish incapability for an office worker. We have plenty of people who work with us well beyond retirement age but they have, so far, been on an annual contract so that a retirement date can be discussed and agreed without embarrassment. We have always been able to use common sense, something lacking in a legal framework. I fear the new law will lead to many long, hard-working careers ending in tears. In striving to avoid discrimination, legislators appear to have forgotten that individuals need individual consideration. It will be some time before case law clarifies the new rules, in the meantime the HR community will demand that we follow the guidance notes presented at breakfast seminars all over the country by employment lawyers and consultants. We will have to work hard to stick to common sense. We will continue to have regular discussions with colleagues who are near or beyond the usual retirement age because we want to do the best for them, the company and their colleagues. When it is time for them to go we want to part as friends. http://www.timpson.co.uk/blog/article/8/time-for-retailers-to-plan-for-the-worst http://www.timpson.co.uk/blog/article/8/time-for-retailers-to-plan-for-the-worst Q: I have an over-achiever in my sales team who delivers great revenues and earns good commission. But a number of employees can rsquo;t stand working with him and we have had perennial disciplinary problems with him. I don rsquo;t want to lose him, nor do I want to be seen as a soft touch just because he brings in the cash. How do you manage mavericks in your business? A: You have to decide whether he is more of an asset than a liability. The others may simply be jealous of his success. They will certainly be conscious that his spectacular performance has raised the bar, making their results poor by comparison. But personalities who can charm big orders out of customers tend to be arrogant extroverts, whose brash manner is best experienced in small doses. You mention his disciplinary record, but don rsquo;t reveal the causes for complaint. If you have been too lenient and let him get away with misconduct that was a sackable offence, don rsquo;t be surprised if the rest of the team is hacked off. Look at the situation from the team rsquo;s point of view ndash; here is this irritating toad who is allowed to break the rules and is still held up as an example to follow. He might be bringing in lots of business but I doubt he is helping morale. The next time he breaks the rules I wouldn rsquo;t bother with another letter, I would sack him. It is only then that you will see the damage he has done. The rest of the team will jump for joy when they hear of his departure, and with renewed enthusiasm will probably make up for the sales you think have been put at risk. Q: I rsquo;ve been offered a deal to sell up my business but it is subject to a three-year earnout and only 30pc cash upfront. I rsquo;m keen to sell and move on ndash; even after three years ndash; to other ideas but not at any price. Have you heard of similar deals ndash; should I push for better terms? A: If you are desperate to sell and this is the only offer you are likely to receive, go for it, but beware, this type of deal can end in tears. At least you are assured of some cash upfront but while you wait for the rest you will have to work with the buyer. Do you respect each other enough to operate as a team? With most transactions, having fought clause by clause to resolve a draft full of worrying warranties and indemnities, the sale and purchase agreement is signed and you never look at it again. This deal will be different. The earnout formula is critical, and likely to be complicated ndash; ensure you fully understand how the final price is calculated, and be aware of any conditions that control your conduct as chief executive of this joint venture. But first, check how the 30pc deposit is determined ndash; are you going to collect as much cash as you expected? This is a legal minefield which will require goodwill on both sides. For your own protection try to negotiate a minimum guaranteed price, and get a good lawyer. Q: Do you think men or women make better personnel staff and does this question reek of outdated prejudices? A: Years ago, when our personnel department included a welfare officer, we always recruited a woman. In those days sex discrimination was the norm; we could advertise for quot;counter girls quot; and had different wage rates for men and women. Today, personnel is called HR and the priority is not employee well-being, but employment legislation. No one admits to sex discrimination but your question demonstrates that the old prejudices have not entirely disappeared. It takes a particular talent to manage people problems. The ideal candidate needs the patience to help colleagues deal with personal problems, while being tough enough to tell someone they have lost their job. He, or she, must adapt to individual circumstances while rigidly following employee laws. A small pool of people, men and women, have what it takes. It might be more difficult for a man to fulfil the role for a predominately female workforce, while male-dominated companies will usually happily accept a woman as HR director. Don rsquo;t be misled by the old-fashioned thinking, forget any past prejudice: just select the best person for the job. http://www.timpson.co.uk/blog/article/9/sacking-your-star-may-well-pay-off- http://www.timpson.co.uk/blog/article/9/sacking-your-star-may-well-pay-off- What rsquo;s the juiciest piece of gossip, sorry, market intelligence, that you rsquo;ve picked up and what have you done about it? You may think we gain market information by listening to gossip and market rumours: I couldn rsquo;t possibly comment. If I revealed our secret sources they wouldn rsquo;t be secrets any longer, so anything that follows is pure fantasy. A few years ago one of our managers was in a cafe when a couple at the next table started to talk about a local chain of shops, one of our competitors. They discussed every shop in detail ndash; turnover, profit and staff problems. Our man made his coffee last until he had a clear picture of the opposition. A month later two of their best managers moved on to our payroll. If information is presented on a plate it is a pity not to use it. When a business starts trading badly there are always plenty of rumours ndash; some true, most false. If you are buying a business and rumours really matter it is better to find out the facts for yourself. Before all our acquisitions we visited as many of the target shops as possible. After weeks of walking the High Street we knew as much, or perhaps more, about the business than the resident management. As we go round, looking at shops and talking to staff we pick up tons of tittle-tattle. This is all useful background but the best information is gathered with your own eyes. Market intelligence is only helpful if you understand how to use it. You have commented about the irritation of hearing the message quot;...away from my desk until... quot;. The irritation on hearing that kind of message is immensely compounded by having to hang up and redial because there is no facility to return to an operator and speak to someone else. More often that not you do not actually need to speak to that person, a colleague or similar should be able to help ndash; if not then the service is surely falling down. Perhaps you could start a campaign to ensure all companies provide a facility to switch calls automatically to an operator or another person who is at his/her desk? Perhaps it is my age or it could be my lack of patience but voicemail really irritates me. Every time the phone stops ringing and the recorded message kicks in my heart sinks. What I hoped would be a simple conversation may well turn into a major saga. I don rsquo;t mind getting a message if I am calling a mobile but when I try to contact an office why should I be ignored? Why can rsquo;t the person at the nearest desk pick up the phone? I hate voicemail so much it is banned in our office. Anyone who calls can expect to speak to a real person. No colleague is allowed to ignore a ringing telephone. It isn rsquo;t difficult to take a message. I suspect some people permanently put their phones to voicemail so they can select who they talk to. The only way to get through to them is to send an impersonal email ndash; and they probably won rsquo;t reply to that. Technology has a habit of ignoring the personal touch, I am happy to cling on to a bit of old-fashioned courtesy. We rsquo;ve been refused an extension to our existing overdraft. At the same time, my bank is trying to sell me an invoice finance facility to improve our cash flow ndash; should I investigate this as an alternative? I rsquo;m a little cynical that my bank might be trying to get me to increase the profit it makes by moving me from an overdraft that rsquo;s 4pc above base rate to a product that rsquo;s effectively 15pc a year when you include all the charges. First be honest with yourself ndash; if you were a bank manager would you be happy to lend more money to your business? If you know you are a bit of a basket case be grateful for any help the bank has to offer, they are probably giving you a facility to avoid their likely loss in an administration. If, on the other hand , you are financially robust, don rsquo;t let your bankers dictate terms, you can always take your business elsewhere. I rsquo;m told that invoice finance used to be a sign of desperation but is now more common and no longer carries a stigma, but it can be an expensive form of finance. When dealing with bankers, accountants and lawyers never forget that you are the customer, and that they have competitors. Solicitors rsquo; bills, audit fees and bank charges are all negotiable. These professional service providers might show signs of shock if you challenge their charges but their real dread is to lose your account. For a banking relationship to work there needs to be trust on both sides, and it sounds as if you have lost faith in your guy. A good bank aims to supply the service the client needs, not just plug their most profitable product. Banks like to talk about their flexible range of facilities, but customers only care about the level of security and how much it costs to get the money. Get your bank manager to put his offer in writing then see if one of his competitors betters it. http://www.timpson.co.uk/blog/article/10/gossip-is-good-if-you-can-use-it http://www.timpson.co.uk/blog/article/10/gossip-is-good-if-you-can-use-it A key member of my team left about three months ago. While I wasn rsquo;t too concerned at her departure, in the subsequent months three people she worked with have resigned and I suspect others are looking around. Should I regard this a natural process that will clear out people who don rsquo;t really want to be here or do I need to take active steps to stop the rot? If the latter, are there any simple steps you rsquo;ve used in your business that I could adopt to boost morale? You are bound to be worried if people are leaving without being pushed, but if they are unhappy you will be better off if they go to work for someone else. Exit interviews might help you identify the reason behind this exodus, but don rsquo;t necessarily expect everyone to tell you the truth. Cliques exist in every business ndash; when a member of the gang moves elsewhere it is natural for them to persuade their friends to follow. The time to get worried is when they widen their net and start poaching your best people. Treat this as a wake-up call. You can never do enough to look after your superstars. Write down all the things you do to say quot;thanks quot; and quot;well done quot;. List all the colleagues you have spoken to in the past week and ndash; be honest ndash; look through your payroll and underline the names of anyone you don rsquo;t really know. It is more difficult to respect a boss that doesn rsquo;t get around the business. There are many things you can do to show your colleagues that you care. Look through the lists of quot;Best Companies quot; and see what they do for their employees. But it rsquo;s not the perks such as free holiday homes, and birthdays off that matter most. Your team needs to know that their boss believes in them. Listen to their opinions, hold some small discussion groups and ask them to tell you how they see the business. Let them know what is going on, share your sales and profit figures and talk through your plans. Perhaps you think that some chief executives are a soft touch who are too generous for their own good. I don rsquo;t agree. If you amaze your best people by becoming a great place to work they will almost certainly amaze you in return. Don rsquo;t worry any more about the crowd who have gone, look after the people who are still on your payroll. Given your experience with commercial landlords, what would you say are the most important things to do for a small retail business negotiating for new sites? The right site at an affordable rent is an essential factor for retail success. The high street is full of empty shops so there are plenty to choose from, but be patient ndash; we view at least 10 possible properties for every one we go for. Get all the help you can. A surveyor who can negotiate a good deal is well worth the fee, but the final decision is yours ndash; you are the one who will pay the rent. Today rsquo;s market is in the tenant rsquo;s favour. As well as lower rents it is possible to secure rent-free periods and contributions to refit costs, but be careful, only take a shop that you can still afford after the first rent review. As a small but growing business it helps to have a lease that gives you plenty of flexibility. If possible, secure frequent break clauses so it is easy to relocate. Always carry out a building survey. If it reveals material problems try to make the landlord repair the property before the lease is signed. Agree as much of the detail as possible with the landlord or his agent before the lawyers get involved ndash; it will keep legal fees down and avoid misunderstandings later on. Visit your selected site several times and proceed only if you think it is perfect. Take your time and don rsquo;t be tempted to overpay ndash; if you fail to get the shop you want it will soon be forgotten, if you make a mistake the decision will stay with you for years. I rsquo;ve read a great deal in business magazines about the quot;power quot; of social media for small companies, with commentators extolling the virtues of targeted advertising through Facebook and the importance of having a presence on Twitter. Is it worth spending time on these things? Since my son James bought me an iPad I am starting to understand why so many people get hooked on computers. I haven rsquo;t succumbed to Facebook or Twitter but some of the computer games I rsquo;ve played have shown me that computer screens can become addictive. With so many people frittering their time on Facebook perhaps social media will provide the perfect opportunity to plug your product ndash; as long as you sell something that will appeal to young potential Tweeters. Alternatively, if you are selling to the family, it might make sense to use mumsnet.com. I intend to keep a close eye on how social media develops, but for the time being we will keep clear. There are probably more important things to do. http://www.timpson.co.uk/blog/article/11/forget-the-quitters-and-focus-your-energy-on-those-who-stayed- http://www.timpson.co.uk/blog/article/11/forget-the-quitters-and-focus-your-energy-on-those-who-stayed- Question: Our revenues remain down and show no sign of recovering in the near future. The problem is we rsquo;ve always run our sales team on a hefty commission basis. Naturally their pay has suffered over the past year and we rsquo;re starting to lose some of the good ones. I rsquo;m thinking of shifting emphasis on to salary, but some directors think we should move the other way and be even more aggressive with our commission to give everyone a boost. What do you think? Answer: It is difficult to decide which is your most pressing problem ndash; losing sales or losing salesmen. Let rsquo;s assume the turnover dip is down to the economy. If so, the market will recover, but will you be in a position to take advantage when demand perks up? If you fail to look after your people, the star performers will be the first to leave. Why should they wait around for a miserable bonus when someone else will pay what they are worth? If you do not pay enough for them to keep up their mortgage then they are certain to seek a competitor who will. Don rsquo;t change the bonus scheme. With less business around, an extra commission will make little difference to sales. You need your good sales people ndash; without them you don rsquo;t have a business. Look after them now, when they really need the money, and you will probably win their long-term support. Leave their salaries alone but give them a substantial one-off payment along with a handwritten letter explaining why they deserve your support. You do not have to pay everyone the same special bonus, pay each one what you think they deserve, but always be generous. Put the letter in a handwritten envelope and send it to their home address. The increase in your salary bill will be money well spent. Question: I rsquo;m one of those much-maligned bricks-and-mortar businesses that rsquo;s apparently rubbish because we don rsquo;t sell online. However, the other day a long-standing customer told me she couldn rsquo;t believe I wasn rsquo;t online. I take her views more seriously than the so-called experts. The thing is, I rsquo;ve got too many other things to do. What rsquo;s your view? Is a virtual presence a must ? Answer: Even if you don rsquo;t want to sell your products or services on the internet you certainly need a website. When you were a lad, potential customers looked at the Yellow Pages, now they search for you on Google. If you want persuading, ask your children, who may even be able to create the website on your behalf. There are plenty of consultants willing to design your web presence, claiming that their experience will help you appear high up in Google rsquo;s rankings, but there is no need to spend a fortune to get started. More than a decade ago Russ, who worked in our shops around Worksop, volunteered to set up the first Timpson web pages. Within weeks he was selling house signs and shoe laces and the internet has provided a modest but profitable addition to our business. If a cobbler can find the web worthwhile I am sure you can too. Build a website, but don rsquo;t be sucked in by the keen computer kings who think life revolves around the internet. Information technology has a role to play in every business, but bricks and mortar still matter and regardless of whether you are dealing in a real or virtual world, the better your people, the better you will do. Question: Have you ever taken action against one of your employees for leaving your business, taking your customers with them and setting up in competition? We rsquo;ve got terms in our contracts that should give us some comfort but one person has already broken those terms and we have to decide whether it rsquo;s worth the cost of pursuing him. Answer: Thankfully, I have never had this problem, none of our senior executives has left us to set up in opposition. Even if they did, I doubt whether their contract of employment would give us much protection. It would be difficult to win any worthwhile damages, so, if I was in your position I would hassle the ex-employee but stop short of legal action. The only people who are bound to benefit are the lawyers. Every year we have a trickle of Timpson employees who leave us to open their own shops. Technically they are in breach of their contract but, so far, we have never taken any to court. We watch them carefully, and if they aggressively try to poach our best people we will have a few sharp words. But in most cases we stay on good terms. If I am visiting our shops nearby, I drop in to see them and catch up with their news. I admire people with the courage to invest in themselves. Many tell me they owed it to themselves to have a go. Several soon discover that it is not so easy to make money out of shoe repairs and many former superstars come back to work for Timpson. It pays to stay on friendly terms. Question: I rsquo;ve never bribed anyone in my life but I hear that if my agent in Turkey offers a bribe without my knowledge I could end up going to prison in the UK? What should I do? Answer: The existence of bribery is seldom admitted by businessmen (or public servants) but buyers are often tempted by quot;generous quot; suppliers. It is a short step from the friendly Christmas gift to the offer of substantial back-handers. Once bribery becomes established, purchasing decisions start to be made in the interests of the buyer rather than the business. For purchasers the only proper policy is to ban all buyers rsquo; gifts and bring every transaction out into the open, but what line should you take as a supplier? As soon as you offer a bribe, however small, you have risked your reputation. If you make under the counter payments you will always have something to hide. Perhaps, you might argue, informal incentives are normal in your industry or part of the culture of a country in which you trade. But if you don rsquo;t think the payments are a problem the tax man probably will. No sector is whiter than white, we sometimes find ourselves thwarted by the obstinate jobsworth who won rsquo;t bend the rules until you grease his palm. We don rsquo;t play his game. Sometimes we suffer but being straight has not stopped our company grow. Are you going to fall to temptation or will you cling to the moral high ground? The decision is yours. http://www.timpson.co.uk/blog/article/12/spend-money-on-sales-teams-to-keep-them-keen-and-loyal http://www.timpson.co.uk/blog/article/12/spend-money-on-sales-teams-to-keep-them-keen-and-loyal Did you ever think of franchising your brand? What are the pros and cons? Franchises work well when the business has a memorable marketing formula and work best when talented people take on the role of franchisee. nbsp;Twenty years ago colleagues franchised 15 of our least profitable branches. The 10pc franchise fee immediately increased our profit and most of the franchisees made more money by working on their own, increasing turnover and cutting costs. A few franchisees were unsuccessful (in retrospect we picked the wrong personalities). As we had originally persuaded them to take on the challenge we felt obliged to buy back the business and offer them their old jobs. Other franchisees did very well but the magic gradually wore off and after about five years we abandoned the scheme. Franchising may not have worked for us ndash; perhaps we were too used to owning our shops ndash; but it works well for many retailers such as Specsavers. With the franchisee carrying most of the investment, the chain can grow quickly without borrowing from the bank (it is the franchisee that needs the loan). I am often asked whether our shops are franchised quot;because a lot of your guys appear to own their shop quot;. Lots of freedom and a generous bonus scheme can create a feeling of ownership, and produce the vital ingredient that a franchise often provides ndash; great customer service. I rsquo;ve just spent six months arguing with someone who may buy my businesses about what he should pay. There seem to be four or five different ways of valuing a business. You rsquo;ve bought a few in your time ndash; which method works for you? Accountants and merchant bankers like to find a formula to fix a fair price, so expect your financial adviser to start talking about price/earnings ratios and Ebitda (earnings before interest, depreciation, tax and amortisation). But even the bean counters accept that valuing a business is an art, not a science. Never mind what the experts are saying, buyers need to work out what the business is worth to them. The more they pay, the longer it will take to get their money back ndash; pay too much and they will be permanently borrowing from their bank. Before starting negotiations, buyers should forecast the likely future cash flow and calculate the price that brings the money back within four years ndash; and make that their maximum price. As the seller, you don rsquo;t need to do any sums. Your minimum price depends on how keen you are to sell the business. There is a big difference between a fire sale and quot;the offer you can rsquo;t refuse quot;. If the buyer rsquo;s maximum price is higher than the seller rsquo;s minimum there is a chance of a deal. I hear it rsquo;s going to be illegal to ask people about their health before I consider offering them a job. I ask all candidates to fill out a health questionnaire so I can have an idea about their reliability. Do you see any way around it ndash; perhaps looking at their tongue or saying they can have the job if they beat me to the fire exit? Never mind whether it is legal, your health questionnaire is a complete waste of time. If they are desperate for the job, few unhealthy candidates will tell the truth about their medical history. If health is a safety issue in your workplace, then you should make that clear, but even then the candidate could lie. By discriminating on health grounds you may be missing some positive personalities that could do your business a power of good. The real problems that make people unfit for work ndash; suffering from sickies, laziness and lateness ndash; are not revealed by a BUPA medical. If you want to find out whether the candidate is fit for your business get them to do a trial day ndash; the colleagues who work with the candidate will soon know if he or she is up to the job. Forget the questionnaire. To decide what the candidate is really like just look him in the eye and follow your instinct. The pay freeze that we rsquo;ve agreed with staff has run its course and I feel pressure now to restore annual pay rises. Since we rsquo;re not confident that we rsquo;re over the worst, how little can I get away with? Your colleagues have a right to know all about your present performance and future prospects. Are you just using the recession as an excuse to keep salary costs down or is your company in crisis? You are proud that redundancies have been kept to a minimum but did you take the easy option? The wage freeze saved money but if you had reduced the workforce further you might have saved more and put the company in a stronger position. The wage freeze can rsquo;t go on much longer without running the risk of losing the trust of your colleagues. You could find that some of the best people start looking for another job. You must do all you can to motivate your team. Hand out plenty of praise and award some special bonuses as a practical way to say quot;Well done quot;. http://www.timpson.co.uk/blog/article/13/franchises-work-when-the-brand-fits-with-the-personality-of-the-salesman http://www.timpson.co.uk/blog/article/13/franchises-work-when-the-brand-fits-with-the-personality-of-the-salesman Q What is on your list of things to do before you head off on holiday? A The world is divided into two types ndash; people who try to fix everything before they go away on holiday and the rest who put things off until they get back. It is better to be a quot;do it now quot; manager, and leave a clear desk before you head off for the beach. nbsp;Announce your holiday dates to anyone who needs to know. It is irritating to ring someone on a Monday morning to hear the holiday voicemail message quot;I am now on vacation and will be away from my desk until . . . quot;. Make sure your key colleagues are fully briefed on any issues that are likely to occur while you are away and trust them to make decisions on your behalf. If they really need help they will send you an email. Getting ready to go away is much easier than coming back to work. Before you leave, write a list of the major issues that you need to tackle when your holiday is over. When you return, try to stay relaxed. Don rsquo;t try to do too much on your first day back at work or you will feel that you need another holiday. Q I rsquo;m thinking of buying the building that we rsquo;ve used for four years now because the landlord needs to sell and it rsquo;s a good location in town. Do you think this is a good use of our resources? All the consultants seem to say that businesses shouldn rsquo;t tie down capital in property. A I don rsquo;t go along with your consultants. People prefer to own the house where they live so why shouldn rsquo;t a business buy the freehold of its head office? You will not only enjoy the security of being your own landlord but you will also save the rent and have the potential benefit of considerable capital growth in the years ahead. Your bank manager will like looking at some solid assets on your balance sheet so he too will feel more secure. It is a sound move as long as the price is right. Get good advice ndash; it is worth asking more than one property expert for a valuation. If your landlord is keen to sell you should be able to negotiate a good deal. During the last two years we have purchased the freehold of a few of our shops and bought our main office building (which we financed through a mortgage). We don rsquo;t regret spending our money in this way ndash; neither will you. Q You claim to be a leading service retailer and yet it could be said that you have missed out on the fastest growing service opportunity on the high street. Did you ever consider getting involved in the booming tattoo and piercing studio business? A No, we have never given tattooing much thought. Some years ago it seemed a million miles from the Timpson culture ndash; small side street independents providing a somewhat cloak and dagger service, which looked like no more than a passing fad. We were wrong, tattooing has become a major trend and the service is moving on to the main street, but it is still not for us. We could have made good money ndash; it is a retail service business that ticks all the financial boxes with low investment and high margins. But business is not just about financial ratios and profit potential, it also needs to fit with your philosophy. We have managed to put together a collection of services that work in the same shop and we have tried some services that haven rsquo;t worked so well ndash; we struggled to make jewellery repairs into a big business. And I have been worried about becoming a Jack of All Trades ndash; we must always aim to be the best at what we do. So I don rsquo;t expect to branch out into hairdressing or service mobile phones and I definitely won rsquo;t be adding body piercing to the services we offer. Q How do you cope when your staff do a better job than you could ndash; turn to the happy pills? A I am delighted to report that everyone working in our shops is better than me when it comes to shoe and watch repairs, and all the other jobs we do. I am so hopelessly ham-fisted that my wife Alex declared me a definite dunce at DIY 40 years ago. It gets worse ndash; with my lack of discipline and attention to detail I rsquo;d make a useless area manager, would be a woeful warehouse manager and pathetic in personnel. Thankfully my role is to help create a culture that helps our experts flourish, by setting the strategy, and clearing away any obstacles that get in the way of progress. But my job is changing. At 67, day-to-day operations have less appeal and there are plenty of people who relish the tasks. Since my son James took over day-to-day control, I have become more of a mentor than a manager. When everyone knows more than me it will be time to play more golf. In the meantime I rsquo;m staying on the payroll. http://www.timpson.co.uk/blog/article/14/holiday-plans-happy-pills-and-selling-tattoos- http://www.timpson.co.uk/blog/article/14/holiday-plans-happy-pills-and-selling-tattoos- Having recently enquired about the number of days paid holiday I receive annually at my current employer, I have been told that I should be receiving another two days a year, as the rest of the staff in the company receive 25 days and not 23 days as I get. I have worked for my current employer for six years. Am I entitled to be paid for my lost days over this working period or at least have my days back this year, thus, getting an extra 12 days holiday this year? Not good news for you I am afraid. Gouy, my resident employment expert tells me that Working Time Regulations state that statutory holiday entitlement cannot be carried over from one holiday year to the next. Therefore, unless you were off work due to ill-health and were unable to take your annual leave at that time, you are unlikely to be able to reclaim your lost days. A case of quot;use them or lose them quot;. You don rsquo;t tell me why you haven rsquo;t been getting the full 25 days, how you discovered the error, and who you think is to blame. If your employer is at fault he could apologise by giving you some extra time off, but there is no legal obligation to do so. I hear that some manufacturing that was outsourced to China is now returning as production costs there rise? Do you see any merit in sourcing more products from Britain? nbsp; I showed your question to Sally, our buying controller, who agreed that prices from China have moved up. quot;But, quot; she said, quot;things will have to change dramatically for us to move our business back to Britain. It is not just a question of pennies; we are often talking about twice the price. quot; It is always better to buy close to home. It is much easier to sort out supplier problems in Chippenham than China. You are talking to people who speak the same language and understand our home market. But even if the home produced quality and service is as good or even better, for most buyers a big price gap will always be the major factor. It pays to be patriotic as long as you remain competitive. I rsquo;ve just been promoted into a position where I will now manage projects for my company, often lasting three, six or nine months. I rsquo;ve been involved in teams before but have not yet seen one through myself. I rsquo;m a little nervous, as while I think I do well at the day to day operational side of our business I rsquo;m not sure how to manage my time looking so far out? Do you have any tips? It is quite natural to be apprehensive about a new role but don rsquo;t worry, your management team would never have asked you to do the job if they didn rsquo;t think you were up to the challenge. Although you are in charge of the project you can rsquo;t do it all on your own. You will rely on your team. Tell them what is going on, trust them to use their initiative and help to clear any obstacles that get in their way. However carefully you plan things on paper they never work out quite as expected. When problems occur deal with them straight away, admit your mistakes and move on. If you don rsquo;t know what to do, ask someone who does. The project leader is not expected to be an expert in every detail, your team members will know much more than you about their jobs so ask their advice. You have almost certainly been given the job because of your past record and your personality. To be successful you will need the respect of your team. Nick Clegg has asked for us all to come up with ideas for laws and regulations that should be scrapped. Which one would be at the top of your list? Most laws are made for a good reason. There needs to be a legal code of conduct to cover health and safety, disability, discrimination and other fundamental employment issues. You can rsquo;t just trust everyone to be honest and honourable. Most of the laws are fine - it is the way they are applied that can cause problems. Some years ago I was asked to draft a letter to the parents of our young (under 18) apprentices, about the dangers their children could face in the workplace. quot;It rsquo;s a new law, quot; I was told. As I started to describe the perils of unguarded cutters and whirling abrasive wheels I wondered whether I was about to give our mums some unnecessary nightmares, then I found the original legislation. I had been misled: the law was for kids under 16 (usually doing work experience from school). We are all to blame by being too compliant. We readily accept advice from the legal know-alls who tell us quot;You can rsquo;t do that, quot; or quot;It rsquo;s a legal requirement. quot; We should have the courage to challenge silly guidelines in the cause of common sense, and check the original Act of Parliament. http://www.timpson.co.uk/blog/article/15/use-them-or-lose-them-a-golden-rule-for-holidays- http://www.timpson.co.uk/blog/article/15/use-them-or-lose-them-a-golden-rule-for-holidays- Q How should businesses plan for a long period of uncertain trading conditions? It feels like we #8217;ve been through the mill in the last two years and my nerves are shredded. A Remember that the tough conditions we continue to experience are the same for everyone else. You might, in the face of lower demand, make less money but you can still aim to make your business better than your competitors. Be positive, smile as you walk round the office. You don #8217;t want your natural anxiety to transfer to your workforce. But don #8217;t hide the truth. Everyone in your business is aware of the economic climate, they need an honest assessment of their prospects, as does your bank manager, who is more likely to give the support you need if he never gets any surprises. Don #8217;t be tempted to wait for the upturn, every business can cut out waste, buy cheaper and be more efficient. To keep ahead of the competition you must look for continuous improvement. In two to three years, many of the survivors will be in a strong position, so watch the cash. A healthy balance sheet increases your chance of being one of the long-term winners. Q After you handed over the day-to-day running of your business to your son what advice did he seek out? What was the first question you expected him to ask and was it different from the question he did ask? A I can #8217;t remember any specific question but I clearly recall the first time James showed that he had inherited his mother #8217;s single-minded determination. It was the first board meeting after his appointment as marketing director. We were discussing the possible purchase of a small independent shop that James had found. quot;Too small, quot; said the other directors. quot;In that case, quot; said James, quot;I will buy it with my own money. quot; After the meeting James asked me to visit the shop and give my opinion. He was right, we bought the business and 10 years later I can confirm the shop has performed better than even James expected. We have worked together a bit like that ever since and seldom disagree. I give my view and he decides. If you find it difficult to work alongside each other in the office a family business can ruin the relationship between father and son. If your son (or daughter) has the talent to become the chief executive let them get on with it. Allow them to make their own decisions and learn from their own mistakes. Your job is to help by passing on the benefit of your experience. Q Entrepreneurs, we are told, thrive on taking risks. Do you? A My economics tutor taught me that profit is the reward for taking risks. We are all on the lookout for risk-free projects but to be successful entrepreneurs must have a sense of adventure and a fair share of luck. A move that looks dodgy to an outsider could seem safe to the entrepreneur who knows his business inside out. Like the punter who studies form, the entrepreneur with a detailed knowledge of his market place has the odds in his favour. The modern world of governance and compliance assumes that the safe way to success is to replace flair with a proscribed process. But intuition is often better than detailed analysis; past statistics are not always a good guide to the future. Q With VAT changing yet again I wondered if you had any tips to share from your experience? A Every tax change brings its problems but it is always easier when tax rates go down rather than up. From January 4, 2011, an extra 2.5pc of the money going through our tills will be paid in VAT. We will need to increase turnover by at least 2.5pc to stand still. The obvious way to recoup the money and maintain margins is to increase prices but that doesn #8217;t guarantee extra sales. It is unwise to put up prices when consumers have less money to spend, everything points to a tough time for turnover. The increase in VAT will put a squeeze on retail profits. To find ways to increase sales without putting up prices, we need new ideas, premium products and great customer service. The constant quest to improve our service now has a greater sense of urgency. We must use higher VAT as a catalyst to do even better. The extra tax will cost our business nearly pound;4m (a daunting 40pc of profit). We have seen big hikes in VAT before, and know how much they can hurt. During the next 12 months prudent retailers will watch their cash flow and if possible keep money in the bank. http://www.timpson.co.uk/blog/article/16/don-8217-t-wait-for-the-upturn-be-ready-for-its-arrival http://www.timpson.co.uk/blog/article/16/don-8217-t-wait-for-the-upturn-be-ready-for-its-arrival Q If you were starting out in business today and had to pick an entirely different industry, which one would you choose and why? A It took me so long to find the right answer to this question, I started to dream about it. Even in my sleep I knew enough about myself to realise I was not cut out to be a career civil servant. My maverick attitude would not have enjoyed red tape, but I dreamt of plenty of possibilities in the private sector. nbsp;In the first dream I created a restaurant chain, no doubt prompted by our pub on Anglesey, but I confess the success of The White Eagle is nothing to do with me. It is entirely due to my wife, Alex. Before waking I became a journalist. Late in life I discovered the pleasure of writing but I couldn #8217;t have coped with the job in my dreams ndash; editor of The Sun. The next night I became a politician, but once elected I had neither the necessary tact nor patience. Well before dawn I discovered my dream job ndash; a bookie, the perfect role for a man reasonably competent at arithmetic who loves sport and enjoys taking risks. I started with a pitch by the parade ring at Bangor-on-Dee and quickly built a nationwide chain of betting shops. I #8217;ve stopped dreaming. Just because I #8217;ve been a pretty successful shoe repairer doesn #8217;t mean I can be a good bookie or publican. It is a mistake to think success can be transferred from one industry to another. A cobbler should stick to his last. Q Around 25pc of my sales come from local authorities and from what I #8217;m hearing I can expect those contracts to be renegotiated downwards. I #8217;m wondering where I stand? Do I dig my heels in? A As the public sector swiftly switches its emphasis from spending to saving, private companies that supply national and local government are certain to suffer ndash; especially suppliers of non-essential goods and services. Local authority managers that are having to look hard at their payroll costs are bound to put an end to quot;nice to have quot; luxuries and quot;belt and braces quot; advice from consultants. I hope you are supplying something that local government desperately needs. Firms that have relied on public sector contracts for years may have to rethink their business model. However, the need to cut costs doesn #8217;t provide an excuse for anyone to break a contract. I don #8217;t condone any big business or large local authority that uses its buying power to bully suppliers into cutting the price or size of an order that has already been agreed. A deal is a deal. Check your contract carefully to make sure the details are set in stone. If you have a watertight agreement stand your ground and make them stick to the terms ndash; only give in to pressure if you can use the opportunity to negotiate the security of a longer-term commitment. Q The Government says it is conducting a root and branch review of employment law. If there was one law you could change or scrap what would it be? A If we were a nation full of perfect employers there would be no need for so much legislation. However, we need employment laws to protect workers in a wide range of issues ndash; discrimination, paternity pay, sickness, under-age working, dismissal, bullying and so on. It is not necessarily the law that is at fault but the way laws are interpreted by the human resources world. I am not bothered about the legislation, but I know many businesses complain of red tape, and I object to some of the processes developed to keep us within the law. Oral and written warnings can be part of a deceitful game played by an employer trying to dismiss someone without the risk of losing an employment tribunal. Even worse are quot;performance management plans quot; which pretend to set targets that help a weak employee get back on track. In reality they are designed for failure ndash; evidence that the poor performer must go ndash; defensive red tape to ensure another tribunal victory. This paper work trail, which HR professionals call quot;best practice quot;, is often a shabby way of treating colleagues. Everyone deserves the blunt truth in a face-to-face chat: quot;we made a mistake quot;; quot;you are in the wrong job quot;; quot;it is time for you to work elsewhere quot;; quot;we will pay a period of notice and help you look for a new job quot;. This honest approach works ndash; it is much better to part as friends. The vast majority of workers prefer a candid conversation to a formal letter in the post at home. I look forward to the day when tribunal decisions stop being based on box ticking. Employment is all about people. Proper paperwork is important but a good filing system is not necessarily the sign of a good boss. http://www.timpson.co.uk/blog/article/17/we-8217-d-all-like-our-dream-job-but-it-pays-to-be-realistic- http://www.timpson.co.uk/blog/article/17/we-8217-d-all-like-our-dream-job-but-it-pays-to-be-realistic-