Hipstamatic

17Jan11

Im not an Iphone man (why bother when my other company pays the Blackberry bill) but the wife has succumbed. As a result we got the Hipstamatic app around Xmas and I really love it. Basically it turns the snaps from the phone into a variety of nostalgic prints from the 60’s, 70’s and 80’s. They don’t look so good printed on modern papers but fantastic on the screen and, lets be honest, that is where most photos stay these days. This is one of my favorites of the little whipper snapper (Evie Rose) trying to throw a ‘leaf’ snow ball at me on Boxing Day (more here if interested). Go and  download it, its great fun.


Okay so I didn’t go with the daily blog for 2011 as i thought that the discipline required for that was beyond me but Jeeze I thought I would cope with at least one a week. No, its a fail. In my defence however i am on track with my other commitments for 2011 and i can still make 52 blog entries in a year which is technically a pass. Plus I have finally finished the partnership tax returns so am now ahead of that (fun) game for the first time since 2005!

Anyway, the plan for Jan was fourfold; 1 – Get the partnership tax returns completed. Tick. 2 – Read at least one non-fiction a month. Tick (and passed with flying colours having nailed the whole Stieg Larsson Trilogy in the first ten days of the year). 3 – Get personal tax returns completed. Not quite / at all yet. And 4 – Update the Hoffi Barbershop business plans for the year ahead. Its the last one that I suspect may be the failing from January’s targets.

The main element that i update each year is the risks to the business and the warning signs to look out for. Its easy enough and I can, for example, forecast a 10% fall in sales (weather, inflation, recession, etc) a competitor opening up, a fire in the shop or other unlikely risks which i can plan around as potential scenarios. Its never been a problem doing this exercise over the last 5 years and it serves no purpose, other than making me feel on top of things. Basically its the same disaster recovery planning that any business would do.

However the dilemma this time comes from an excellent book I read last year, Black Swans by Nassim Nicholas Taleb. I was reading it from an investing    background as opposed to anything barber related to be honest and whilst i enjoyed it, it didn’t have any profound impact on my thinking at the time.  The  basic concept is easy to grasp in as much as it explores the disproportionate role of high-impact, hard to predict, and rare events that are beyond the realm  of normal expectations. His point being that when we plan, forecast or explain events we are doing so based on our understanding of normal  circumstances and ‘normal’ probabilities. So, for example, had I been going through the above exercise in 2000 and been unfortunate enough for Hoffi to  have been in the shadows of the World Trade Centre what hope would I have had of predicting the event and, to be less highbrow, WTF would I have done  in prep anyway? Who in all the business owners based in NYC at that time would have planned for such an event (and if they had then no doubt they  would have got a subsequent visit from the FBI).

This is my point regarding Black Swans, where do you actually draw the line? How do you hope to predict them or is that actually the point in the first place? Is the point that its futile to try and plan when you really cant imagine the type of events that would truly turn the business on its head – so therefore why waste the time. I can plan for competitors, I have price cuts and loyal clients in the toolkit for that eventuality. I can plan for new technologies muscling into the barber space, actually i cant but that would be a hell of a black swan if we are to get robot barbers in the next 12 months. What I can’t plan for is unknown ‘game changers’.

We are in Fenchurch Street, right in the heart of the City of london, this must be one of the top terrorist targets in the world but would that even count as a black swan? Bar anything happening within 100 yards of the shop we’ve already had it twice in the last decade to varying degrees. If i was to plan for Aliens turning up in London with a laser gun that turned all men bald then you’d think me a idiot but I am finding it really hard to identify what might happen somewhere in the middle. So whilst i know that something will happen and i won’t actually see it coming I have no way of planning for it.

Therefore I conclude that I am going to bin the planning process after all. There is as much chance of me predicting the Black Swan as there is of a 10% fall in sales so I might as well plan equally for both, and not bother with either.

So another tick in the box, and back to the tax returns!


Lazy blogger

07Jan11

Okay its been too long and so much has happened since the last post I wouldn’t know where to start. Business is good, work is interesting, family is bigger than it was but there was no time to update on any of that that in 2010 (and the lack of an iphone didn’t help either). I couldn’t even keep up good habits with Twitter so what chance did I have with the full blog?

Then I saw the WordPress article today re the postaweek2011 idea and I thought that was the best way to get back in the saddle, so to speak. So the idea of 52 blogs in the year is officially accepted as part of the plan for 2011 for TheLondonBarber. This puts it in with a host of other targets, resolutions and ambitions for this year (I figured that if I made loads the chances of actually delivering on a couple would increase) that I can expand on in the coming weeks.

We have big plans for this year, expanding in some areas and cutting back in others so I think there might be some interesting news in the coming posts. Although, seeing as I will need every bit of imagination and limited creativity to fill 52 blogs, I am not going to waste them on this one. I’ll leave this one as a somewhat impotent starting gun!


Trying to digest the news at the moment is a difficult process even with the political landscape getting a little clearer by the day. The decision makers may have changed (thank goodness) but the outcome isn’t going to be pleasant, or much of a surprise. I can’t see anything other than tough love coming our way and, to be honest, we will probably feel the better for it, albeit some time in the distant future. VAT will go up (I’ll happily rant about this in relation to barbers in the not too distant future), cuts in the public sector will need to be made, interest rates can only go one way, who knows what that will do to house prices, unemployment will probably soar and as for Sterling, well, don’t be planning any trips to America for a couple of years. My view is, and I am no expert, that even if we avoid the oft quoted ‘double dip’ recession the best outcome for most of us is going to be a few very tough, slow and grey years ahead.

With this in mind we have been reviewing the Hoffi business plans and making sure everything is appropriately positioned, makes sense to have a chat with the bank now while there is still some spring optimism in the air and also ensure that we are keeping an eye as opportunities raise their heads – on the barber training side for example. That said it did get me thinking which high street businesses are best placed right now for the recession, challenges of technology, cheap overseas labour and the likely UK position in the world a few years from now (ie probably not too rosy). What business, if I was starting out tomorrow, would I back right now with some confidence?

Business wings have an article on this which helped my thoughts and helped get it down to a few examples. Using that and a few ideas of my own I have created my own scientific (ish) rating system, scoring each option out of 10 in terms of their safety, potential to deliver decent returns and most importantly the attraction to me. So taking the average high street;

Convenience Store / Newsagents
Pro’s – easy to set up, major objective is to know your local market and stock accordingly, limited skills required, cheap labour, if inflation kicks in (and I think it will 2 years from here) you can raise prices but the rent should be fixed so helps push up profits. Get a chain together and there would be some value to negotiate better buying terms and a decent exit value.
Con’s – Supermarkets continue to stretch their reach into local markets and I can’t see that slowing down as their shareholders continue to demand growth in ever more difficult markets. It’s getting tough to sells cigarettes which must make up a chunk of the revenues and newspaper circulation is in global decline so can you really fight that from a village street corner?
Rating4/10 it’s a tough business that will just get tougher as the big stores continue to expand.

Funeral director
Pro’s – There are only three certainties in life and one of those will need a funeral director – recession, internet or otherwise.
Con’s – Come on, it’s a funeral director
Rating
1/10 safe economic choice, zero fun

The winner in all conditions

Pound shop
Pro’s – The obvious solution, if in doubt go as cheap as you can. Tat shops they may be but they always find punters. The harder things get the more attractive this might look.
Con’s – If the Far East suddenly decides that it isn’t the best idea to ship 5p plastic hammers half way across the globe for a 2p profit then where will the stock come from? I also doubt this is the best option, to me when times are hard you don’t kill your margins, you focus on your niche, on what you do best and you price accordingly, value doesn’t always mean cheap. Limited upside if the economy does brighten up quicker than I predict.
Rating - 2/10 only marginally higher than funeral director as plastic hammers are probably more fun than, well, dead people.

Birthday gift / Crafts / Clothes / baby shops
Pro’s – Lifestyle businesses. Nice idea if you have the money behind you, always more fun to be in business doing something you are passionate about and if you can bring that passion to the shelves clients will respond. Easy enough these days to create a niche and utilise the web to reach beyond just your high street.
Con’s – The web, whoever thought birthday cards would go online and yet they have in a big way (see the moonpig story for one). Most people would also accept that these business are hardly recession proof. Lets be honest when the job goes or cash is hard to get hold of you can probably manage without the organic baby booties or the African hand crafted wooden wine bottle stand.
Rating
4/10
Great to pass the years post retirement but it wont fund the pension to get you there in the first instance

Sandwich / Coffee  shop
Pro’s – Decent hours, the established demand for good coffee and sandwiches ‘to go’ is probably too high and established now to be curtailed by harder times. Easy enough to stamp some individual mark on the business and bring passion to the fore. People will cut down on some things but still want ‘affordable’ luxuries (a nice latte to start the day).
Con’s - A lot of competition and the big brands will likely squash you the moment they decide to open up in your area with their ability to get stock at bulk discount and run shops at a loss far longer than you probably can.
Rating
7/10
But you really need to pin down the identity before the brands notice how well you are doing and come a knockin.

Barber
Pro’s
- Most of the above. Would you not get your haircut due to financial distress (and we are talking everyday men cuts here not £100 lady specials), you might go one week longer and not have the cut throat shave but 99% of men wont stop getting their hair cut until baldness does the job for them. Decent hours and easy to get started. Need really good staff and keep on top of their training. It  can’t be replicated online, in China, replaced by a machine or of any interest to Tesco! Once you are established and doing a good job its a very cash generative business.
Con’s – If you don’t do an excellent job with customers and staff the risk remains that others will be keen to move in.
Rating - 10/10  -Remains the winner for me in all economic conditions.

So that proves it, following a purely scientific process whilst listening to the new Black Keys album, Brothers (which is excellent by the way), I am happy that I am still in the right business for the economic challenges that may lay ahead. Having said that I hope George O and Vince are going to spend a little more time working on the economy than I just did!


‘More than one F in Hoffi’ – I was walking home tonight and that struck me as a great slogan for our Hoffi shops. Then I thought about it a little more and sensed that most people wouldn’t get it. ‘It’ being the fairly rubbish gag or the point being that there are two shops. So it will probably never see the light of day and I figured that I might as well at least try it out here.

Could go anywhere

It’s not quite as controversial as one we saw in a book and wanted to do ourselves a few years ago. There is a bus stop 100 yards away on Fenchurch Street and the plan was to take a full size shot of a City worker but with his, ahem, manhood hanging out. The slogan then being something akin to ‘don’t worry everyone will be looking at your hair’. However the knowledge that we would probably spend thousands on getting it done to have it pulled down by the City of London and face a huge indecency bill put that one to bed fairly rapidly.

Great for the tube or bus stop

The point is it really is hard to get a reaction. I might get people reading the blog in Hong Kong (a rather random example I admit) but when it comes to advertising a barbers or salon you are looking at a fairly limited geographical area of a few square miles. Money can buy you space in a paper, online or on a billboard but it can’t actually guarantee the attention of the clients that you need. The smaller the market you are after the more creative and aggressive you need to be with the advertising. The goal is clearly to get a reaction, whether that is through amusing, shocking or confusing people. For most potential clients out there its busy and its ‘noisy’ so you have to fight hard for the 2 seconds its going to take them to consume your ad, your offering or your brand. We are in the City and for most of our potential clients they get an hour for lunch and that’s it, they rush out they grab a sandwich and a coffee and then disappear back to their desks for ten minutes on the internet before getting on with work. What we have to do is work hard enough to just break that routine, stop them in the street and for a few seconds get them to think about the shop, if we get that then we have probably cracked it. Getting a reaction has to be the key.

Good old advertising

I have a few ideas that we might run with over the summer and as they evolve I will be sure post them up but in the mean time I have stumbled across a few great ideas on the web in this post. If you are interested have a look at the links, pop ‘guerilla marketing’ into google or check out the fantastic creativeguerrillamarketing.com for a whole number of ideas.


Should have retrained

I was asked the other day when, and why, we went from ‘just’ running shops to opening and running the training Academy. I thought it was a fair question and I don’t think we have documented it anywhere and what’s the point of a blog if it isn’t for something like that. A lot of the post below is lifted from a business plan so might feel a little heavy in this context but if anyone is interested this is where we came from, this is what we do and this is were we are heading.

“One of the biggest challenges we have faced as we have grown over the last five years has been in the recruitment of staff. Whether it be the quality of their cutting, their personality, their attitude, their ability to understand customer service, their ability to sell or simply their ability to work independently but as part of a team, we have struggled. Unable to find a satisfactory solution elsewhere we created one of our own.

As a result we have taken our largest challenge and created our biggest opportunity.

To solve our problem we created a bespoke course of 8 weeks duration where we went back to basics, we covered all relevant aspects of what we wanted from a barber. We got our staff to forget their bad habits, to understand that they are stakeholders in the business and, critically, to relearn the fine art of barbering. This was hugely successful, we saw immediate returns in terms of customer satisfaction, team morale and increased revenue.

Then the recession began ….. and business really took off.

Our barbers talk to customers, thats what we train them to do. Our customers talk to their friends, thats what they like to do. However during 2008/9 our customers started talking to their friends, about our barbers. And it wasn’t just about the shops, or the cuts, or the products, or the music, it was also about the training that they got when they joined the business. So when people started losing jobs in the recession we started getting enquiries from bankers, and secretaries, and engineers, and entrepreneurs, and soldiers, and the list goes on. Eventually we gave it a go and ran a 8 week course for 6 guys who each had a story that appealed to us and who were willing to personally invest in their own futures. The course went very well. The guys learnt a skill on a vocational level, we trained them to a standard where we would be willing to employ them. As it turned out, 6 companies agreed with us,  and all the students following graduation had full time job offers and are now pursuing careers in barbering.

From there we haven’t looked back. We are now running full, regular and popular training courses through our city shops. We are able to manage a flow of models through the sophisticated use of the internet and local press, likewise we have now perfected a modular approach to the teaching of the course and a growing reputation for running a short vocational course that is affordable and appropriate for people looking to start afresh in an incredibly exciting and growing industry.

Our students are currently coming from all walks of life. We stick by our original ethos of training people to a standard where we would be willing to employ them within our own group. As a result we pre-vet all students, if we feel that no amount of training would instill the right attitude in an applicant, or their behavior would be detrimental to the group we will politely decline the application. We are fiercely proud of our brand and what the course represents so we expect the same level of professionalism in our business partners, our trainers  and our students as we expect from ourselves.

The effect of the recession were soon felt far beyond the square mile of the City of London. We now receive applications for our courses from across the UK, Europe and even China. With sterling continuing to struggle and the fact that our courses can be completed under a tourist visa therefore reducing the administration, we see this wider geographical interest continuing. Our proven success, increasing media profile and partnerships with a number of career transition specialists has created a healthy order book of students wanting to join the courses and find their own way as masters of the trade.”

Fancy joining us then please get in touch for more info.


Just got these shots back from the last graduation class to go through the training academy. I think they look fantastic and are an absolute credit to the students, and the course itself. These are actually local clients who were kind enough to hang around after cuts and made great models in the end. I think, truth be told, they enjoyed it more than they let on. We are pleased with these so may look to use them for some promotional material in the near future. People probably wont realise that they are real customers, real student work and taken inside the Academy, but what the heck, we’ll know.

The guys on the current course are also doing a really good job, it’s a slightly younger crowd so plenty of enthusiasm and banter this time around. They have two weeks left before graduation so a great time to get in for a free haircut or shave, if you are interested and can get to the City of London easily enough (Fenchurch St)  get in touch with Steve or leave a comment with me below.

If you are interested in the course itself then link through the barber pole on the right or here for more information.


Are you happy?

28Apr10
From Black Eiffel

Simple but oh so true

I don’t like just posting links but this captured my mood this week perfectly, from the excellent Black Eiffel, enjoy


Just been reading through yesterday’s Sunday Times Rich List (link). I’ve always been a fan although last years was far more enjoyable as it was full of faces who’d had a couple of hundred million wiped off their balances (the 2009 car crash had a combined loss of £155bn). Gives a bit of perspective to mere commoners like myself!

After a cursory glance to see if I knew any of them personally or owed any of them money (a ‘no’, and a ‘not directly’, unless you count the Queen’s link to HMRC) for me its interesting for the original source of their wealth. Okay so the first 100 or so are almost exclusively from family wealth, commodities and prime property but after that it gets really interesting. The number of people who have built and sold companies that most of us have never heard of, for money we couldn’t dream of. It shows that this path remains the real route to freedom and success and I don’t just mean the pure financial pay off. When you see the likes of John Caudwell (link) and Felix Dennis (link) above Terry Leahy (CEO of Tesco, the largest retailer in the UK but ultimately just an employee) it reminds you that the lonely path will, long term, always be the most rewarding.

The other element that struck me was the number of retailers and SME owners in the immediate families of these big players. I’m not knocking it, after all if my wife was a millionaire many times over I wouldn’t want to answer to anyone (else) and likewise wouldn’t want to be sat at home twiddling my thumbs so its an obvious path. That said I am not sure they share one of the biggest challenges we faced in the early days – working capital, or more explicitly lack of working capital. I’m sure when setting up Neuro Brands (Diana Jenkins), or a gastropub (Tamara Ecclestone) they have had plenty of challenges and total respect for the success they’ve had. My point is merely that the balance between having absolute faith in your concept and enough money to keep it alive is surely easier if, frankly, you will always have enough money to keep it alive.

The king of the capital game

Anyone who has ever played Monopoly knows that the first couple of goes round the board are easy, its just a race with dice but as soon as people start buying streets and you get hit with a few rent demands you suddenly take a little more care of your cash, you stop buying the Stations and the utilities and revert to the most defensive of strategies regardless of what you felt was right at the outset. You sell your hotels and your houses to just keep the wolf from the door and hang in the game that little bit longer. Running a small business often feels the same, only with higher stakes. In the current climate the banks arent keen to listen (although in my experience that is thawing out a little) and the deals on offer from alternatives arent always appealing, so the competitor who has his wife, partner, Mum or Dad as the banker is always at an advantage in life, much as in Monopoly.

I don’t want this to sound like sour grapes (honestly) or jealousy (okay a little bit), but whenever  I read business books or more specifically small business books there is nearly always a chapter on cash-flow yet only one or two sentences on working capital. Yet for me the latter is just as critical, and in the early years its even more important than the former. To me working capital is like the wheels on the plane, you need it to get off the ground. Without that you might have the best jet in town but you aren’t going anywhere. What I am trying to say is that if you have cash-flow problems in the first 6 months of business that is not the problem, the problem is working capital –  you simply didn’t have enough cash to get off the ground in the first place.


Barber shop

24Apr10

Im a sucker for old Barber shop photographs so this blog is a bit of a find and has some great content, http://www.shorpy.com/, I particularly like this shot of an old shop in Atlanta. Next time someone tells me that Hoffi is ‘ a bit too Shoreditch’ for the City I will show them this! There is a line between shabby and shite, and i fear these guys crossed it, even for 1936. The other one is a pretty good example of where we’d be if we didnt have so many employment rules and regs? Could you imagine getting away with that these days. At least, as my Mum might say, it keeps them off the streets.

With credit to India Knight’s fantastic bloghttp://indiaknight.posterous.com/ for getting me into Shorpy.

Who needs labour laws

Get the hoover out




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