I had a nasty surprise this week when I discovered that my heating system had sprung a leak spreading a rich, rusty coloured stain across the kitchen ceiling. The more pleasing aspect was that my wife managed to charm a plumber out at 6.00pm (the cost was something else). Two other surprises followed in quick succession; the first being the plumber himself, all 6’8” in his stockinged feet and a passable stand-in for Charles Bronson in his prime. I quickly decided I had better get my wife out of the house so I was able to deal with this situation in the appropriate man to man manner. Chatting over the cup of tea that I made for our hero in the afterglow of well remedied leak (before I got the bill), he mentioned his business plan.
Now business plans are two a penny these days, even tv wannabees have business plans. However, Charles really did have a plan and I listened, fascinated, as he told me the tale. A qualified heating engineer, it seems that he had been made redundant by British Gas back in the 90’s. His long term goal, he explained, was to get to where he was today, specialising solely in heating system servicing and repair. Charles had started out on the first phase of his plan working as a sub-contractor to local builders whilst he attempted to build a clientele as a general plumber. He quickly gave up the contracted work after he found out the hard way just how mendacious and untrustworthy builders were. Now at this point, I would have asked more of the details of his swot analysis, as I felt sure that he had overlooked his one significant differential strength – his sheer size! Surely, he could have faced down any builder? However, it seems that our Charles must have been deeply religious or something, judging by his intent gaze, so I didn’t pursue that line.
Bathroom, kitchen and heating system installations were the next phase in our intrepid plumber’s business plan, which were all in turn quietly but firmly ditched as he got closer to his goal of servicing and repair only. When the bill was extended to me, I began to see the logic in our man’s plan. Call-out work was clearly very profitable! He also had very little in the way of materials to purchase. A very nice little business or a job?
Despite a clear and single minded commitment to his business plan, Charles had however, either by omission or commission, neglected to prepare his business for an eventual sale. Despite having a very scalable business model, that he could have sold at retirement time, as a complete business, he had in fact just bought himself a job over the years, albeit a nice little earner. The most our Charles could expect from his business at retirement is from the sale of his customer list (at least with his model he does have repeat business).
Planning to make yourself dispensable is the best advice for any new business owner; in fact, the very first business plan you write should include when and how you intend to exit from your business. There are entrepreneurs whose skills are so specialised that they can never delegate but these are few and far between. If you genuinely fall into this category, or if you really can’t face managing others and fighting employment red tape, then make sure that you build a very good personal pension.
Oh, and make sure that you play to your strengths; I certainly paid up with a smile.