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Lisa Newton (MSc Investment Management 2004) 

 

The 40/40 Plan is where you work 40 hours a week, for 40 years of your life, and retire on 40% (of what was never enough in the first place…)
This ‘plan’ worked well in the 19th and 20th centuries – but today, it’s risky. Unfortunately, the educational system is still stuck in the Victorian era and is itself based upon this plan. Schools are still teaching kids to learn by rote, to conform to get a safe, secure job. The problem is that safe, secure jobs don’t exist anymore because the real world has moved on. And this is what the book, ‘The 21st Century Business model’ is about. How the new world order is changing the game.

I graduated from Cass Business School in May 2004, and in that very same month I formed my company – Boogles Ltd – with £150. My mum gave me £50 and I used £100 from my overdraft. I’ve never had a full time 9 to 5 job in my life. But what seemed like a ‘risky’ choice then, now looks increasingly attractive. I won’t be getting laid off any time soon. I have to take responsibility for my own actions. And, unlike the employees at Lehman Brothers or Enron, when you work this way you are on the Board and you can see what is going on. You’re in control. Many people out there are not in control, and this double-dip recession is a frightening time for them. But for entrepreneurs it’s a fabulous time – full of opportunity!

It’s my belief that so many people fail to take the plunge and start their own business because it’s not really presented as a real option at school or university. And, in addition (lets face it), the vast majority of start-ups fail. They don’t last a year. And that is largely because the key skills needed to run a business – finance, marketing, customer service, delivery – aren’t taught. Plus, of course, it’s hard work. Sometimes you’re not earning, which can be difficult if you’re accustomed to a regular monthly salary.

Many people don’t want the headache. They prefer to keep their head down, work for someone else, and to try and get away with doing as little as possible. But in my opinion, the very ‘idea’ of working 9 to 5, (40 hours a week), should be questioned. Often, compensation is directly related to the amount of time put in. This just causes inefficiency. The job takes longer, because people have to keep themselves busy until 5pm.

A 21st century business pays its owners and partners ON RESULTS. And thus encourages ‘smart’ thinking and smarter working. Many people are unable to apply logic and solve problems. Yet this is a critical 21st century skill. But, many employees won’t figure out how to do their job more efficiently, for fear of losing their job or having their hours reduced or being given more work to do. It’s an inefficient design.

Many people will be driven to starting a part time business, or doing something on the side, because the money they’re getting isn’t stretching as far as it used to. Food, petrol, and inflation are all rising indicators. And they may well witness this lazy behaviour where they work, and so develop the belief that they could run the place / run a business a lot better.

So, for anyone out there who is thinking of starting their own business in these times, here is a checklist – of what you should be striving for. The acronym “CENTURY” is used.

C is for Cash
You want a business which generates CASHFLOW. Due to the ‘credit crunch’, many companies are owed money and are having difficulty collecting it. You don’t want a business with a massive debtors list. Half those debtors go bust, leaving you with no hope of getting paid and facing insolvency yourself.

E is for Entrepreneur
Can anyone be an entrepreneur? Probably. Does everyone want to be one? No. But to run your own business you must have an element of entrepreneurialism within your soul. If you don’t enjoy creativity, the buzz and challenge – stick with the day job.

N is for Network
Your net worth is said to be directly linked to the 5 people you spend most time with. Now think about this for a moment. Are your networks full of employees or business people? You need a network to lean upon. Networking can get you connected, get you into the right places and in front of the right opportunities. Change your networks, change your results.

T is for Technology
Business today MUST make full use of all the tools available. Technology has improved in such leaps and bounds. If you think back to your time at school I’m sure the job ‘website designer’ or ‘search engine optimiser’ probably didn’t exist. It does now. So, make full use of all the social media tools and technology out there.

U is for Unlimited
Ideally, your business reach should be unlimited. Your product/service (ideally) should be available globally. If that’s not possible, it should be UK-wide. You don’t want to put a barrier on who you can do business with. The world is becoming smaller.

R is for Repeat
Your product / service should be one that is bought over and over again. Making ‘one off’ sales is OK, but wouldn’t it be better if your customers became customers for life?

Y is for You
You are not your business. And if you don’t have the skills to take it to the level where is needs to be, then you either have to move out of the way, or learn those skills. Continuous self-development and improvement is always encouraged. No one knows everything – there is always more to learn.

The 20th Century Business Model book written by Lisa is  now available on Amazon.