Karan Bilimoria and the story of Cobra Beer

Another late night for me last Thursday night. This time to attend the Chartered Management Institute 2009 Sir Kenneth Cork lecture. It was organised by my friend Chris Seow from the University of East London who is the current chair of the City of London Branch of the CMI.

I have to admit I was reluctant to spend another evening in London and went along to support Chris. However, I am glad I made the effort as the talk by Karan Billimoria was absolutely fascinating.

Even while waiting for Lord Bilimoria to start I heard an amazing story from Darren Way the founder of Streets of Growth.

Streets of Growth is a dynamic community leadership organisation founded in 2001 and led by local people in Bromley by Bow East London. Committed community adult and young people work together to offer real solutions and practical approaches to tackling the issues that people face in their local community and so develop sustainable and healthier communities in the East End.

Although I had not been following the Cobra beer story closely, I was aware (along with everyone else in the audience) that they had gone bust in May of this year and had been rescued by the giant Canadian brewery firm Molson Coors.

I was wondering if Lord Bilimoria would mention what seemed to be an unfortunate end to what had been an amazing success story up till that time. His first slide gave an indication that he would not be skirting around the painful aspects of his fascinating twenty year story to bring a new beer brand into mass consumption. The title of the slide was ‘Adapt or Die’. He immediately began to explain how quickly the
credit crunch had impacted high growth business such as his, who were dependent on external finance for expansion. As he pointed out, prior to the crash, cash had been king, but then it became an emperor.

Fortunately, he then went back to the beginning of his story, and spent an hour giving an absolutely riveting speech which concluded with the painful details of the collapse and eventual revival of the business.

As with so many entrepreneurs Lord Bilimoria went against his parents wishes with his plans to start his own business. Although his father as head of the 350,000 strong Indian Army did not want Karan to follow him into the military, he felt a career in the City of London would be a more appropriate use of his Cambridge University education. He was told ‘you should get a real job like a banker’.

But, he had developed a love for beer and recognised there was a significant gap in the market between traditional British bitter beer, and the sharp and gassy lager beers available at that time. There was nothing that was a suitable accompaniment to curry meals in Indian restaurants.

The second slide of the talk consisted of just three words, ‘Aspiration, Inspiration, Perspiration’. He reinforced my experience of dealings with entrepreneurs that the business idea is the easy part. Bringing it to production and then to the market is the hard bit, and may take many years.

Lord Bilimoria went to give many instances when his business nearly died. Often from causes which could never have been predicted. For example, a one year boycott of his product by Indian restaurants (his primary customers), after an article criticising the professionalism of the restaurant owners in a trade magazine which Karan had founded, but no longer had links to. In each of these ‘near-death’ experiences it was always flexibility and a creative approach that led to a solution.

It was good to hear his quite confidence about the new opportunities the partnership with Molson Coors would lead to. He said they were moving from a David vs Goliath situation to one where David and Goliath were working together. He had been impressed by the family culture that was still present despite the global size of the company, and how they had been true to their initial agreement despite the financial turmoil of the period when Cobra was forced into a Company Voluntary Arrangement.

He concluded by listing the Molson Coors definition of what makes a remarkable brand:
1.    A compelling story
2.    Refusing to compromise
3.    An instantly recognisable look
4.    A unique, relevant and consistent product
5.    To inspire brand champions from customers
6.    To deliver enduring profits

Desk Space Genie for vacant desk space in London

A common request from visitors to the Business & IP Centre is for us to recommend cheap local office space.

Thanks to Desk Space Genie, a new website that advertises vacant desk space, we can now help people find space right down to an individual desk.

According to Springwise:

The service helps businesses make a bit of money from their unused office space and enables cash-strapped freelancers or other small businesses to become more established.

Desk Space Genie lets space-seeking ‘deskers’ search for a space by postal code or town, contacting the advertisers directly. The site lists vacancies in most major cities around the UK, covering ‘all inclusive’ desk packages with wifi and other utilities, or more basic ‘pay for what you use’ services.

Sources of funding for small businesses

The biggest cause of concern for entrepreneurs I meet is finding a source of finding now that banks are so reluctant to lend.

Here in the Business & IP Centre we have access to the subscription part of GRANTnet (6,000 grants, loans, awards and other assistance). GRANTfinder gives access to detailed information required to make an application.

However BusinessZone.co.uk have also created a Grant Watch service which acts a  guide to small business funding. Definitely worth checking out.

Looking for new business finance? There’s lots of free money out there! A range of small business grant schemes, awards and other initiatives are available to entrepreneurs. Read our latest guide to what’s on offer.

time4change is offering Train 2 Gain funding for leadership and management training to business owners based in London, with a workforce of between 9 and 250 employees, volunteers or associates. Train 2 Gain will provide funding where the first £500 is 100% reclaimable. Thereafter, you can spend up to another £1,000 and reclaim £500. More details.

Innovative London-based small businesses are being offered R&D grants of up to £10,000 as part of the London Development Agency’s Knowledge Connect scheme. The initiative aims to put SMEs in touch with universities, further education colleges and private sector specialists to develop new business opportunities. More details.

To stay up-to-date with the latest from Grant Watch, follow us on Twitter.

Striding Out is offering entrepreneurs aged between 18 and 30 who are at the pre-start or early stages of running a company £500 and training from business experts in its Big Leap competition. 10 finalists will take part in an Apprentice-style business boot camp in April and compete for the overall prize. Deadline: 06/03/2009. More details.

Barclays is offering cash prizes totalling £17,500 to the UK’s most enterprising family businessses in its Family Affair competition. Eight regional winners will win £1,500 and the chance to compete for the overall prize of £5,500. Deadline: 31/03/2009. More details.

The Crisis Changing Lives Awards is offering grants of up to £2500 for single homeless people or for those who have experienced homelessness in the past five years to find a work-related course or fund tools or equipment to carry out a job or become self-employed. Deadline: 13/03/2009. More details.

Make Your Mark in the Markets is giving entrepreneurs the opportunity to turn their buisness ideas into reality and start trading at a local market for free. The winner of the competition will receive prizes including £1,500, six months free market trading and free business mentoring, marketing and advertising. Deadline: 20/03/2009. More details.

Lancaster City Council is offering local businesses grants towards the cost of renting premises. Finance to cover 50% of the first year’s basic rent can be claimed. The maximum grant is normally £2,500 but this may increase to £5,000 if rapid expansion and significant jobs growth is projected, requiring larger scale premises. Deadline: 31/03/2009. More details.

The Welsh Assemby has created a new £4.5m fund to help sub post offices in Wales to improve and diversify during the economic crisis. The money can be used for areas including business and marketing advice, advertising, training, improved security and upgrading computer equipment. Applications can be up to £20,000 capital funding and £15,000 in revenue costs. Deadline: 30/04/2009. More details.

Dell is seeking entries for its 2009 Small Business Excellence Award. Entrants have the chance to win £25,000 in Dell solutions and a meeting with company founder Michael Dell. The UK winner will receive £15,000 in Dell products and services; a day of best-practice sharing with Dell executives, including Michael Dell, and a 10 year membership to an Accredited Chamber of Commerce. Deadline: 03/04/2009. More details.

Winweb is offering £10,000 to new and existing entrepreneurs in its Business ‘09 competition. Deadline: 01/10/2009. More details.

The ultimate feel good movie for depressing times

I was amazed to see from the latest edition of 10 things you didn’t know last week, that we Brits have spent £69 million so far on tickets to see Mamma Mia!

This film version of the musical based on Abba music is now Britain’s biggest ever grossing film, overtaking the previous holder Titanic. To add to this impressive feat, over 1 million copies of the DVD were purchased on its release day, another UK record.

Having reluctantly watched said DVD on Christmas day, I have to agree that it has a remarkable feel-good factor. A combination of those annoyingly catchy Abba songs and a cheesy love story for young and old alike. The smile factor wasn’t even badly dented by Pierce Brosnan’s shouted version of SOS and a couple of other songs.

So this could be the next big market for those in creative world for our recessionary times.

Trendwatching’s six trends for 2009

From the same people who produce Springwise the marvellous source of entrepreneurial ideas which I frequently blog about, comes Trendwatching’s predictions of consumer trends for 2009.

As always, they have invented an intriguing set of ‘new’ words to cover their predictions for the year ahead.

1. Nichetributes, which is about the power of making products and services relevant by incorporating ‘attributes’ and features that cater to distinct (if not niche) consumer lifestyles and situations.*

2. Luxyoury: On to every brand professional’s favorite topic (or so it seems at times): The Future of Luxury. How will luxury brands fare this year? What will define luxury over the next few years? The answer to a large degree is, ‘luxury will be whatever you want it to be’. After all, what constitutes luxury is closely related to what constitutes scarcity. And while scarcity in traditional consumer societies was for decades defined by the biggest, the best, and the most expensive ‘items’, the ‘2009 consumer arena’ shows a bewildering number of ’scarcities’, some of them invented purely to overcome the abundance now found in traditional sectors. More than ever, scarcity is in the eye of the beholder, especially those beholders who are desperately trying to be unique.

3. Feeeback 3.0: Which major consumer trend will continue to give (or take?) in novel ways in the next 12 months? Try TRANSPARENCY TYRANNY. Big in 2007, bigger in 2008, and even bigger this year. To get a feel for all transparency sub-trends, get your hands on our 2009 Trend Report (not free), but for now, let’s focus on FEEDBACK 3.0, which is one of the trends-within-a-trend that is starting to make waves. Basically:

* FEEDBACK 1.0 (one of those early web phenomena) saw outraged individuals posting scathing reviews, feedback and complaints, often to the delight of other netizens. Brands remained unaware or chose not to listen, dismissing these outbursts the way they’d dismissed any kind of customer dissatisfaction for decades.
* FEEDBACK 2.0 (which we’re in right now) is about these rants—and some raves—having gone ‘mass’(no, make that MASS!). The long-predicted conversation is finally taking place, albeit amongst consumers and not, as intended, between corporations and consumers. Companies have started to take note, but to a large degree still choose to listen, not talk back, trying to ‘learn’ from the for-all-to-see review revolution. Which is surprising, to say the least, since a quick and honest reply or solution can defuse even the most damaging complaint.
* FEEDBACK 3.0 (which is building as we speak) will be all about companies joining the conversation, if only to get their side of the story in front of the mass audience that now scans reviews. Expect smart companies to be increasingly able (and to increasingly demand) to post their apologies and solutions, preferably directly alongside reviews from unhappy customers. Expect the same for candid rebuttals by companies who feel (and can prove) that a particular review is unfair or inaccurate, and want to share their side of the story.

4. Econcierge: No, there will be no ‘eco fatigue’ in 2009, mainly because it’s hard to ignore or to dismiss the mind-boggling fortunes (and the accompanying power shifts and reductions in pollution) that are in store for those who figure out how to get the world off its addiction to oil and coal. Which means a steady stream of eco sub-trends. While we hope the likes of ECO-EMBEDDED and ECO-ICONIC are now firmly on your radar, here’s one more to start the new year with fresh, green brainstorming inspiration:

ECONCIERGES are firms and services dedicated to helping households go green in any possible way. And while any advice that reduces a household’s (harmful) consumption is beneficial enough, the fact that such advice leads to savings makes this a very 2009 development. In the coming 12 months, count on cash-strapped consumers to embrace sustainability with a vengeance, but first and foremost for monetary reasons. Next? How about helping consumers to make money by being green, by for example letting them generate and sell excess power to the ‘grid’?

5. Mapmania: Will this year be the year in which all things ‘contextual’, ‘app’, ‘local’, ‘urban’, ‘tags’, ‘lidar’, ‘smartphone’, ‘convenience’, ‘Cell ID’, ‘spontaneity’, ‘infolust’, and ‘GPS’ finally come together in one orgasmic celebration of map-based tracking, finding, knowing and connecting? Embraced by eager consumer masses who will flock to anything from friend-finders to lowest-gas-price-locators? Aided by services that already know which street users are on?

6. Happyending: The umbrella trend for the next 12 months? HAPPY ENDING!
2009 is an excellent year for those businesses keen on showing consumers that they really care. Much more on ‘caring’ in our upcoming February 2009 Trend Briefing, which will focus on GENERATION G, but for now: offering respect and relevance (NICHETRIBUTES), listening to real-time needs and wants (FEEDBACK 3.0), helping people to save money while being green (ECONCIERGE): all of this will not be forgotten by consumers that are currently feeling the heat.

Business Start Up Show indicates increased interest

I spent the today on the Business & IP Centre stand at the Business Start Up Show at Olympia. This year they have moved into the larger hall and our stand was significantly busier than last year.

It seems that the recession is encouraging people to think about starting their own business, as predicted in one of my previous postings.

I met a City based lawyer who was positively relishing the prospect of being made redundant from her well paid, but boring job. She could wait to start investing her redundancy money into a business venture.

I was also rather suprised to see that Skype had a large stand at the show, but a company representative assured me that Skype are making a healthy profit. Although their computer to computer calls are free, they don’t cost Skype anything. For calls to landlines they share the profits with the local phone company.

Christmas sells – Christmas sales

During a spot of television watching the other evening I couldn’t help noticing how many times the word Christmas was used during the advert breaks. I know that Christmas starts earlier every year in the hope that business will reap the benefit. But this was almost as though the word was being thrown at the viewer as some kind of mantra. The irony is that almost all of these pleas to worship at the cult of Christmas commercial consumption ended with a hastily tacked on half price offer.

By chance, on the same day I read about a character who has well and truly bought into the ‘Christmas spirit’, by celebrating Christmas day every day since 1994. His name is Andy Park (aka Mr Christmas) and he estimates to have consumed 117,600 brussel sprouts, 5,110 bottles of Champagne, and opened more than 230,000 Christmas cards. He has also worn out 37 electric ovens, and 23 video recorders by watching the Queen’s Speech every day.

However, this year the electrician from Melksham, Wiltshire, is being having to cut back due to the credit crisis.

Divorced Mr Park said that this year the postage is so dear he is having to deliver his cards to himself by himself, instead of relying on the Royal Mail. Also he is being forced to downsize his turkey from 14lb to 9lb.

Credit checks are critical in current climate

Not my words, but those of Clive Lewis, Head of SME issues at the Institute of Chartered Accountants in England and Wales (ICAEW).

He urges small businesses to invest in new credit checks on their customers to ensure they are aware of any potentially ‘bad apples’.

“Nobody can hide from the difficult credit situation any longer. Critical to coping with it is rigorous credit control – and that means having up-to-date credit references,” says Clive Lewis.

“Whilst many small businesses are diligent in carrying out credit checks on new clients, the information obtained is only of any use if it is up-to-date. In the current credit crunch climate, customers’ creditworthiness can change rapidly, so it has never been more important to ensure data on your customers is valid.”

Lewis concluded: “Credit information is available online at the touch of a button, so there is no excuse for not being bang up-to-date. Avoiding a bad debt can more than justify the cost.”

I agree with Lewis 100%. However, what I can’t understand is why for the six months we had a free credit rating service available in the Business & IP Centre, only a handful of our customers made use of it.

Top tips from ICAEW

•  
  Get regular up-to-date credit information on major customers and periodic updates on smaller accounts
• The credit limit (as suggested by the credit check) shows the
  maximum amount which may be owed by your customer at any one time -
  make sure your sales don’t exceed this limit; and ensure you have in
  place robust internal procedures for dealing with customers who exceed
  their limit
• Assess your payment terms – make sure you have agreed when you
  will receive payments and remind your customers about the payment
  deadline
• Don’t be afraid to chase your customer for payment – waiting
  politely will not help protect your business and your shareholders
• Remember: a sale is not a sale until you have received payments!

A credit crunch silver lining?

I got the day off to a depressing start on Monday by listening to a recent Radio 4 In Business podcast on the credit crunch.

It consisted of a live discussion with the following experts:

• Keith Clarke, Chief Executive, Atkins Engineering
• Jon Moulton, Founder, Alchemy Partners
• Julie Meyer, Chief Executive, Ariadne Capital
• Bob McKee, Chief Economist, Independent Strategy
• George Cooper, Author, The Origin of Financial Crises and Fund Manager, Alignment Investors
• John Kay, Economic Commentator

Although John Kay was the least pessimistic in terms of how bad we can expect the economy to get, the only person who had anything positive to contribute was Julie Meyer, the co-founder of First Tuesday, who spoke at our Desperately seeking finance event in April. She felt that the economic downturn would lead to an increase in small business startups, particularly one person companies. Certainly my 16 years working in the City of London leads me to believe that many of the recent (and expected) redundant staff will welcome the opportunity to explore more satisfying and valuable career opportunities, even if they are less materially rewarding.