Procurex 09

I had a very interesting and productive time at the Procurex 09 conference on behalf of BiP solutions. Very busy, and some very interesting discussions at the sessions and on the stand.
Obviously there is a focus on Scottish Procurement, but there were a lot of English and Irish people there as well - and at the Procurex National event in Birmingham in March no doubt there will be even more. I am hoping to write an article about the event with one of the attendees - more details if it comes off.

The presentations from the 2 days (not just mine) are up on the site at
www.procurexscotland.co.uk/day1zone3

Preregistration for 2010 is already on line at

www.procurexscotland.com/2010

I hope to be there.

YCF Conference - Buying in Uncertain Times

Here is the presentation I gave 14th October 2009 at the Yorkshire Chemical Focus annual Conference in Bradford. Any questions or comments please fire away. Sorry, I can't seem to find an easier way of putting the powerpoint slides in the blog.

2009/10 Training programmes

We are delighted to announce that we shall be running our own training programmes in 2010, starting on 22nd February with Market Research for the Chemical Industry, at The Heath Runcorn (with Robert Milner Associates).
The next day 23rd February 2010 we shall be running Chemical Industry Purchasing and suppy Chain Management, also at the Heath.

At a date to be arranged we shall be running "Beat the Buyer" a half day course focussing on sales and purchasing negotiations (in conjunction with NBA4Business).

In the remainder of this year we have;
Purchasing, Negotiation and Cost control 19-23rd October 2009 in Kuala Lumpur, and
Professional Purchasing Skills, 8th-12th October 2009 in Dubai, and
Complete Course in Purchasing Management, 13th - 17th December 09 in Cairo.

In addition we have a full programme of international training programmes in 2010.

The Complete Course on Purchasing Management
15 - 19 February Kuala Lumpur
The Complete Course on Purchasing Management
16 - 20 May Cairo
Purchasing Management Master Class (Certified Purchasing Professional)
5 - 9 July Vienna
The Complete Course on Purchasing Management
26 - 30 July London
Purchasing Management Master Class (Certified Purchasing Professional)
2 - 6 August Geneva
Purchasing Management Master Class (Certified Purchasing Professional)
1 - 5 November London
The Complete Course on Purchasing Management
29 Nov - 3 Dec Kuala Lumpur
Purchasing Management Master Class (Certified Purchasing Professional)
20 - 24 December Kuala Lumpur

Rio 2016

Hard to believe that it is more than 4 years since London won the right to stage the 2012 Olympics. What a thrill it was, coupled with a certain Schadenfreude at the French disappointment. London 2012 made a great pitch - pointing out the UK is such as young country, and that London is one of the great international cities. Maybe only New York has that same buzz. And now less than 3 years until the Games themselves.

Although it may have been easier for UK companies to get business in Madrid or Chicago because of proximity or a common language, there should be lots of opportunities in Rio. The fact that this is the first Olympics in South America, means that there will not be the level of established infrastructure and preferred suppliers that there is in Europe and North America.
Obviously some of that will develop during the World cup of 2014 - but the page will be blanker than it is for most Games, and UK companies should have the momentum coming out of 2012 to do well.

Business Basics 4: Turnover is ego - profit is everything

When I was about the same age as my children are now, my father became insolvent and lost the chain of television shops he had spent a decade building up. His business, as I now understand, was profitable – but the amount of money he was owed by debtors and the amount of money he owed his creditors balanced – and there was no way through the cashflow crisis that created. As a child I didn’t understand the reasons for the change in our circumstances but as I grew up I had two simple messages reinforced to me by my father: Turnover is good for your ego, but profit is everything. And Cashflow is king – but that is another Business basic.

During the dotcom boom, and several other booms, business sometimes seems to find a way round this dictum but, inexorable as gravity, in the end we all need to make a profit. Google did not make money for a long time, but now is a cash machine with the profits from online advertising. Skype on the other hand now seems to be worth a lot less than ebay paid for it.It is an easy thing to assume that if the turnover is there, then the profitability will follow – at a reasonable percentage. However the evidence is there that lots of businesses are what are uncharitably known as “busy fools” – working harder, bringing in more work, but not increasing profits at the same rate (or even at all). How long will Twitter and Spotify be able to go on growing without making a profit? Will they survive?

The holy grail of business is to increase volumes and margins at the same time, and it is the mantra of many sales managers (“sell more at higher prices”), which is instantly dismissed as impossible by many salesmen. It seems far easier to increase volumes by eating away at margins – which means we have to work harder to make the same money. That is the Red Queen’s Race in Alice in Wonderland, where we have to run just as fast as we can to stand still. In the end it is often unsustainable, and volumes drop without margins returning to previous levels and then the trouble starts.

As a consultant I am aware of some of my colleagues and competitors working for low rates that they hope will keep them busy. During the bad times, like the ones we have now in 2009, if the volume of work drops then they no longer able to sustain their business. If more profitable work becomes available they are often unable to take advantage because their time is fully booked with low value work. Clients buy our expertise, but they buy it in time based units. When it is gone, it is gone.

There are valid reasons for pushing for increased turnover – some Buyers will insist that a single contract is no more than 25% of a suppliers turnover, so the bigger the turnover the bigger the contract you can bid for. It can make the company seem more substantial that it is in reality. And as an owner or director it sounds great to define your business by the turnover - £1m, £10m, £100m. It is worth remembering that that is the way the big bankrupt companies described themselves, rather than their profitability - £10k, £20k or even nothing at all.

Of course, if you can maintain reasonable margins, then growth in turnover is excellent. We just have to remember that what we are trying to achieve is more profit, and that does not inevitably follow from increased turnover.

In the North we have a phrase about being all fur coat and no underwear… (to use the polite version). It is worthwhile for all of us to have a good look at the business we are gaining and checking that it really is generating a respectable profit (or that we have other reasons for taking it on), and that we are not just fooling ourselves into taking on more work for no gain.

Details of YCF Seminars 14th Oct 2009

PAWA at YCF 14th October 2009

I shall be presenting at the Yorkshire Chemical Focus Annual Conference on 14th October 2009 in Bradford. Time should be late afternoon, and the venue will be the Cedar Court Hotel at the top of the M606.