I’ve been having a break from “business” stuff and have been focusing instead on finishing a book for teachers: “30 Hot Conversation Lessons“.
Needless to say this is an excellent book, indispensable for any English teacher, or language school. And, for a limited period only, you get €300 of material for only €9.99 !
Who could resist? Get on over to www.30hotconversationlessons.com and download your copy today!
Not convinced? Not got €9.99? Not a problem.
You can get the sample copy for FREE! It’s got chapters on how to teach a conversation class, how and why to give corrections, plus three free lessons!
If you don’t like the sample copy, it won’t cost you a cent. If you do, €9.99 for 30 photocopiable conversation lessons is a steal! In fact, I might even put the price up, so tell all your teacher friends to take a look now while it’s still at a bargain price.
Everyone knows what a profit is, and many language school managers are also familiar with the word “loss”, unfortunately. But liquidity, cash-flow? What is all this “management-speak” about?
My company’s tax year ends on May 31st, unlike most companies in Italy which use the solar year and finish on 31st December.
So, this month I’m busy trying to predict whether we’ll meet our sales targets, whether the costs will total more or less than predicted, and of course, whether to expect a profit or a loss at midnight on the last day of May.
In real life, what happens on June 1st is… nothing! Things just carry on as normal, but technically we’re in a new accounting year, if you see what I mean. Whether we actually made a profit or a loss won’t be finalised until the end of the summer, because all of the bills still have to come in, then it all has to be entered in the software, then it all gets checked, and finally we have a result. By which time, it is quite irrelevant, and I’ll have forgotten all about it.
So, after six hours of number crunching today, I was pleased to be able to tell my partner this afternoon that “The cash-flow situation is MUCH better!”. However, her blank expression, was not the reaction I was hoping for. “This is GOOD NEWS, woman! We’re not going broke this summer! Don’t you see?” No, she had only the vaguest idea of what I was talking about. Hence this post.
O.K. This is simple, so don’t switch channels!
I invest 100,000 in a language school, which all gets spent on the beautiful premises, computers, books and so on.
In the first year, we sell 100 courses at 1000 each, so we have income of 100,000. The teachers and my salary cost 90,000.
So where are we at 31st May? Profit 10,000 (10%) – not bad for a first attempt. Also, we have 10,000 in the bank.
But, what’s this? No one wants to study English in the summer? No one will buy anything until September? Oh. Rent and my salary for June, July and August will total 15.000.
“Houston? We have a problem.”
This is known as a cash-flow problem, or a lack or liquidity. We WILL get the money to pay my salary and the rent, but not in time. An overdraft would solve the problem, or we could suspend the salary or rent payments, or inject more “capital”, and so “liquidity” into the business.
That was a SIMPLE example, but mostly cash flow IS simple. Did you know that cash-flow problems are the No.1 reason for small business failure? One interesting reason for this is that..
SUCCESS CAN KILL!!!
Yes, really.
Here’s why.
Following on from my example above, we borrowed enough money from Mum to get through the summer and now it’s September again and we’re selling courses. Everything’s going great! In fact, so great that we land a fantasic contract with a major bank: they want 5 teachers on 20 hours a week for a year. Total income in six figures, total cost significantly less. Profit? Enough to by a shiny new BMW motorbike…
So you sign the contract, employ the teachers and issue the invoices. The bank says that its standard payment terms are 90 days – “That won’t be a problem, right? Just sign here.”
So, now at the end of October and November you have five extra salaries to pay, plus taxes. That’s at least another 15,000 of liquidity you don’t have.
Hopefully your sales of normal courses will cover the cost of the teachers’ salaries. And they do. Phew. And now it’s December, and you’re checking your bank account every day waiting for the big money transfer from the major bank (and reading BMW catalogues).
But the money doesn’t come on time. What? You expected them to pay when they said they would? Google “average payment times in Italy”, sucker!
And while you’re at it, Google “how to recover small debt from major bank without spending a a fortune on lawyers”.
NOW, you have a cash flow problem. If you major client doesn’t pay for months (it happens), you could go under. It happens. A lot.
So, profit, loss, whatever. But “cash-flow” is the one term that you really DO need to understand if you’re running any sort of business.
TIPS TO IMPROVE YOUR CASH FLOW
- Don’t screw it up in the first place! Be cautious with your capital and keep some in reserve for emergencies
- Ask your customers to pay in advance. If you don’t ask, you won’t get, will you?
- When buying, for example, advertising, ask for ridiculously long payment terms: I’ll sign now, but I can’t pay until October (it’s May now). Again, if you don’t ask, you won’t get!
- Don’t plan major investments (redecorations, new photocopier, etc) for periods when you know your cash-flow is lousy./li>
- Ask the bank manager for money when you don’t need it, not when you do: if you cash 100,000 in October but are broke by May, ask for the overdraft in October, not May.
- Do regular cash flow projections – that means totalling up what you expect to get in, and what you expect to pay out, in a given period (for example, over the summer). Do you have enough to cover it?
That’s the point of a cash flow projection: to know about problems before they happen, and so avoid them.
Do you need to have an MBA for this stuff? No, you just need to be paranoid, at least in private.
Have a nice summer!!
My first job was stacking shelves in Sainsbury’s (a British supermarket), but my attitude was wrong. I know because one of the managers told me at the time – I believe he was trying to be helpful (“You need a P.M.A., Daniel. A Positive Mental Attitude”), and also because, on reflection, I have realised that my attitude has really sucked in most of the jobs I’ve done.
My whole career, in fact, I’ve been held back by having a lousy attitude, maybe even now! Wow! I wish I’d known then, what I know now! Think of all the great opportunities I’d have had, the promotions, the pay-rises, the management lunches I could have eaten.
What brought about this revelation?
Being the boss myself, and in particular, having to interact with misery-ass, bad-attitude employees, who are often unaware of the effect they are having on the person who holds their career his hands.
(NOTE to current employees – this is not about you guys! You’re all perfect! Please show up on Monday!)
Yes, I know that as the boss, everything that goes wrong in your day / week / month / life is automatically my fault, it’s also clear to everyone that life has been unfair to you and that we should, in fact, swop roles immediately – you are better fitted to make decisions, and I, humble manager, to follow them.
However, in the mean time, until your true worth is recognised, you may be interested in this list of what to do to make a better impression:
- ABOVE ALL, DON’T MOAN, or at least, keep the moaning to a minimum
- Be positive about the opportunities you have, for they may be just the beginning. Two “beginner” teachers I employed two or three years ago are now junior managers that I delegate to. Either one of them could be my replacement when I move on to higher things..
- You might know better, but you might not. And your manager will probably see more of the big picture than you do. So err on the side of probability and caution: your manager probably is right more often that you are.
- Take feedback positively. Maybe your manager is trying to help you. She doesn’t want a row, or to make you miserable. She wants you to grow and succeed. Maybe she’d rather be shopping online than giving you feedback. Be nice.
- Don’t bitch about your colleagues, or at least not too much. They may have other virtues you don’t see. Show your magnanimous side, and turn a potential flaw into a virtue.
- Don’t waste my time with false modesty or hysterical displays of insecurity! I know you can do this, otherwise I wouldn’t have chosen you for the role. Or maybe you can’t do it, but no one else can either. So, just do the best you can. Either way.. (see the point at the top of the list!)
- What else? Oh yeah, remember that your manager may be the embodied symbol of everything you hate about the organisation or sector you work in, but he/she is also a person too. Managers have feelings, just like you: they have good days and bad days. Find it in your heart to be generous: one day it might be YOU in that seat.
N.B. Readers who want to be managers of people, or better managers of people are strongly advised to consult the excellent “Growing Great Employees” by Erika Andersen.
As usual, feel free to leave comments!!
Here’s a re-hash of a session I gave at the AISLI OGM in Rome on November 7th 2009 – sadly, it was the last presentation of a long meeting and by Saturday lunchtime a lot of people were heading for home!
10 SIMPLE STEPS TO IMPROVE YOUR PRESENCE ON THE INTERNET, WITHOUT SPENDING ANY MONEY!
Half the money I spend on advertising is wasted; the trouble is I don’t know which half.
John Wanamaker, US department store merchant (1838 – 1922)
Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime. Chinese Proverb
Step 1. UNDERSTAND YOUR NEED
Why? YOUR SCHOOL ON THE FIRST PAGE OF GOOGLE!
Time needed? Cost? NONE
What do do: BANISH FEAR OF THE UNKNOWN
Step 2. LEARN BASIC HTML
Why? HTML IS THE KEY TO ALL WEB WORK
Time needed? Cost? FROM A FEW HOURS TO A FEW DAYS, ZERO COST
What do do: BUY A BOOK, LEARN TO VIEW UNDERLYING CODE
Step 3. TAKE YOUR FIRST STEPS
Why? IN TEN MINUTES YOU’LL KNOW MORE THAN MOST OF YOUR RIVALS DO
Time needed? Cost? A FEW HOURS, NO EXPENSIVE SOFTWARE NEEDED
What do do: GET HOSTING PASSWORD, LEARN TO MODIFY AND UPLOAD FILES WITH FTP
Step 4. GET TO KNOW YOUR SITE
Why? BUILD YOUR CONFIDENCE PRIOR TO OPTIMISATION
Time needed? Cost? A FEW HOURS, NO COST
What do do: DEVELOP SKILLS BY MODIFYING YOUR PAGES
Step 5. DEFINE AND BENCHMARK KEY WORDS
Why? KNOW STARTING POSITION TO MEASURE PROGRESS WITH FUTURE OPTIMISATION
Time needed? Cost? A FEW HOURS, NO COST
What do do: SHORT LIST KEY WORDS.
USE SPREADSHEET TO RECORD POSITIONS FOR EACH PHRASE
Step 6. ANALYSE YOUR LOCAL MARKET
Why? IDENTIFY STRONG/WEAK POSITIONED SITES FOR YOUR KEYWORDS
Time needed? Cost? A FEW HOURS, NO COST
What do do: RECORD WHO APPEARS WHERE FOR EACH KEY WORD/PHRASE
Step 7. IDENTIFY BEST PRACTICE
Why? IF IN DOUBT, COPY SOMEONE WHO KNOWS WHAT THEY’RE DOING!
Time needed? Cost? A FEW HOURS, NO COST
What do do: LOOK AT CODE OF MOST VISIBLE SITES. REASONS FOR SUCCESS ARE USUALLY QUITE OBVIOUS
Step 8. DEFINE OBJECTIVES, TIMESCALE AND BUDGET
Why? WHERE DO YOU WANT TO BE, BY WHEN?
Time needed? Cost? A FEW MINUTES, NO COST
What do do: AIM FOR TOP SLOT FOR ALL MAIN KEY WORDS
Step 9. OPTIMISE YOUR SITE TO PROVIDE RICH AND RELEVANT CONTENT
Why? GOOGLE MUST ‘SEE’ YOUR SITE AS BEST ANSWER TO SEARCH QUERY
Time needed? Cost? MINUTES OR HOURS, AS MUCH TIME AS YOU WANT. NO COST
What do do: UPLOAD REVISED PAGES, REMEMBER: ‘CONTENT IS KING’
Step 10. MONITOR RESULTS ON POSITIONING REGULARLY
Why? LEARN WHAT WORKS AND REPEAT IT
Time needed? Cost? A FEW MINUTES PER MONTH, NO COST
RECORD SITE POSITION MONTHLY
The bank manager’s e-mail to me starts with the line
“I am very hurt.”
He thinks he has delivered excellent levels of customer service, and I am being ungrateful. And rude. And very ENGLISH, though that bit is just implied.
I think the bank has squeezed me until the pips come out, done the absolute minimum to meet it’s obligations, and totally deserve to lose a client. I only haven’t changed bank (yet) because I have a suspicion that all the others will be just as bad.
Which got me thinking…
What if MY customers think the same thing??? Lousy course, too expensive, school ignores my complaints, would just as soon study at any other school in the city.
I’d be hurt.
Memo to myself:
- find out what my customers REALLY think
- deal with anything that’s causing them unhappiness, now!
- above all, when they complain, treat it like my LAST CHANCE, and don’t argue back! (That’s going to be a tough one – I love arguing back)
I’m not going to ask you if YOUR bank offers lousy service (that’s taken as read, if you’re in Italy). But what about your customers, or students?
Are they happy?
Are you sure?
How do you KNOW?
PLEASE COMMENT
What do “commercial” schools do to attract customers and make money that we don’t or can’t do?
Here are some thoughts:
- They prioritise the commercial side of the business – they hire salespeople, for example
- They organise their work in a way which makes the most of every “lead”
- They present their services (courses, etc.) in such a way as to highlight customer benefits
- They charge a “fair” price for what they offer (typically they DON’T join the race for the lowest price)
- They use atractive, professionally-designed, POS (point of sale) material, posters, and so on
- They are owned and/or run by non-teachers (business people, accountants, NOT ex-pats.)
- They develop national brands, with national recognition, and capable of winning contracts at a national or international level
Can we learn anything from them so as to become more successful ourselves?? Please leave a comment. I’ve love to hear your views!
What do WE (“good” schools) do well that “commercial” schools don’t?
- We prioritise teaching, selecting and retaining quality staff
- We build reputations for quality in our local markets
- We understand client needs
- We use top-quality materials and up-to-date methodologies
- We prepare students for international exams, so allowing students an “independent” verification of what they have learnt
- We use commonly accepted level descriptors
- We offer training and professional development
- We join together in organisations based on minimum quality standards
THE GOOD NEWS: The “commercial” schools do not, in general seem to be learning from our strengths.
THE BAD NEWS: We “good” schools do not, in general, seems to be learning from their strengths either.
CONCLUSION: Who first learns to learn from those who do it well, should have a massive advantage in the market.
Could it be you?
PLEASE LEAVE COMMENTS!
Three easy steps to be a better manager -starting TODAY!
Got a lot on your plate? Feeling over-whelmed? No time to learn, plan or innovate? This post will rescue you from that “drowning”, “helpless” feeling!
Don’t forget to leave your comments at the end of your post! It’s great to hear your views and suggestions.
1. ORGANISE YOUR WORKLOAD
How do you keep track of all the things that need doing? Writing lists is a common technique, but can be time-consuming and messy.
There are lots of productivity tools available FREE on the internet. My favourite, which I always recommend to my staff, is RTM (it stands for “Remember the Milk”). You need to register, but it’s free. Once you have your account, you can create as many online lists as you like, give them different names, and store all your ideas and jobs that way. You’ll never need a pencil again!
For example, I created a list of ideas for posts and marketing actions for this blog. I’ve also got lists of things I have to do today, current on-going projects, personal jobs (collect the dry-cleaning!), and so on. Careful though, list-making can be addictive!
Even with an efficient list system, a manager’s work-load can be over-whelming. I read a great book recently on this (more in another post soon!). The author suggested restricting yourself to three MITs (Most Important Tasks) a day, and advised doing them immediately. Everything else can wait, or should be delegated, or deleted. Similarly, he advised having only three current projects to work on, and doing something each day to move them along.
I’ve found that three most important things is achievable for me most days, and is a lot less overwhelming that the 30 or 300 which I used to have on my “to do” list. Since I’ve adopted this system, I’m happier and less stressed. Maybe more productive too!
DO IT NOW: sign up for an account at RTM (no link, because I don’t want you to click away just yet!), create lists of current and future projects, MITs, tasks that can wait, etc.
2. MAKE TIME FOR LEARNING
Got no time to learn? Here are some ideas on how to MAKE TIME!
- block out a morning of your week. Dedicate it to reading or trying something new
- get up an hour earlier to study
- give up TV
- take on less work – you’ll be poorer in the short-term, richer in the long-term!
DO IT NOW: Plan in 3 hours for learning next week, and every week!
3. PLAN CHANGES
What do you want to change about yourself, your job, your business? What do you want to be? What new skills do you want to learn?
Changes don’t just happen because you want them. You have to take action (or actions).
DO IT NOW:
- Write a list of things you want to change
- Prioritise – which are the top three?
- Write a list of actions required to achieve each change
- Select the first action – something you can do right now
- Do it!
So, what are you waiting for???
Here’s the link to RTM, by the way.
Oh, and don’t forget to come back when you’ve done it and leave a comment!
How many teachers and language school managers practise what they preach?
How many of them EVER learn anything new?
To answer my own question: today I learnt how to create a sub-domain (don’t ask), and how to install the software which is powering this blog (actually, that was REALLY EASY!).
“Surely, that’s not your job?” I hear you cry, “We have a boy to do things like that.”
That’s not the point. Whose job it is, is REALLY not the point. For instance, how do you know that your “boy” is doing what he’s supposed to be doing, if you don’t know anything about it?
Sometimes, it’s not the learning that’s hard, but the fear of not being able to do it.
I was a “could try harder” at school. My mother was exasperated with the constant C’s and the occasional B’s. Other people’s sons got A’s!
Now, I’m learning more effectively – I discovered the secret while working at the British Council (ironically).
The BC is a very hierarchical organisation. A VERY hierarchical organsiation: I think we counted 8 levels of managers between the teaching staff in Bologna and the Director in London.
And they had (have?) a very “modern”, very “best practice” system of job descriptions, which basically means that each person’s responsiblities are clearly defined. And also limited.
Given that my job at the time took up approximately 2 hours a day, I was naturally keen to learn new skills, even to take on new responsibilities. This was NOT a welcome attitude, or maybe I was just a thorn in the side of my poor manager (I CAN be a pain, I know!).
Anyway, being constantly told by management that something was “not your responsibility”, “not your job” had the effect of infuriating me to such an extent that I decided to pursue a career in management. Hence the MBA (2003-2005), partly paid for by the blessed British Council.
Looking back on it, it was a lousy course, poorly-organised and leading to no real improvement in my job prospects (one interview, no job offer). But it gave me self-belief.
With self-belief, I knew that I COULD learn, and that I could do it on my OWN. Despite the professors, the British Council, et al.
So now I own and run a language school. Coming up to it’s fifth birthday. Five full-time employees, ten freelancers, sales growing at about 10-20% each year.
Running the school, mostly what I do is LEARN.
Ask any entrepreneur, anyone who’s ever boot-strapped a new business with little or no capital. You just HAVE to be good at learning. And passionate about it.
So, what did YOU learn today? I guess you know that on a blog you can leave comments, start a debate, have a go at the person posting.
Feel free, answer my question, leave a comment .. go on, you can do it! Even if you’ve never done it before! I look forward to reading what YOU learnt today.