John Elliott

Name:

John Elliott

Business:

EBAC Ltd

Web site:

www.ebac.com

Years in business:

30

Number of businesses:

1

Entrepreneurs' Forum member

I believe that loads of people will go to their graves not realising they could be very good entrepreneurs. Entrepreneurs will generally be a little bit shy and lacking in confidence.

The institutions we’ve got discourage some people who could be entrepreneurial because they say they’re not academic enough. In my experience, the best entrepreneurs will be average or below average academically, so things will go against them; he or she might think that he or she isn’t good enough.

People who doubt their performance tend to perform the best because people who think they don’t do enough do the most. People who think they do too much do the least. An entrepreneur doesn’t fit in with the institutions we’ve got.

Throughout my career I’ve tried different things and have never underestimated the value or luck or being in the right place at the right time.

I left school at the age of fifteen and became an apprentice. By twenty one I was a junior draftsman, three years later I moved into technical sales and then became a freelance sales engineer. I can’t think why I did that. I had a good job at the time and I was doing reasonably well. I had no clear plans to go it on my own; I just did it because I thought I could always survive ok.

By chance I met someone who wanted a dehumidifier. He asked me if I had one and I designed a dehumidifier that was, in my opinion, better than the existing ones. My business started from this. With dehumidifiers, for several years I never thought it was a proper business and wouldn’t last for long. I just thought; let’s see if we can get another year out of it so we kept on ploughing the profits back into the business, developing new markets, constantly re-investing ourselves. We just went from one thing to another, with many ups and downs along the way of course.

The biggest challenge in business is identifying what customers value, and what they don’t. It’s more difficult than it sounds. Actions speak louder than words, so market research and focus groups can be useful, but people don’t always do what they say they do. Instead, look at what they do and constantly put yourself in their shoes.

The biggest test is, will they pay for it? We’ve made some big mistakes with this. One of the first dehumidifiers I designed was one that with the use of a kit, it was also a mobile cooler so people could use it all year. I don’t think we ever sold one kit.

There is such a thing as being too clever. I would say just give people what they want and do it well, within the time limit and get the price right. We spend a lot of time trying to get better products but a lot of the time its wasted efforts because people won’t always value what you produce. That’s not to say don’t try new things though. One of my favourite sayings is ‘fail often and fail cheap’. Try things, and if they fail, let them fail; don’t keep trying things that are lost causes.

That’s always tricky to realise because you’ll never get it just right. You’ll never know whether you should leave it another fortnight or put another £10,000 in. But it’s all about sustainable profit. Don’t be paranoid about making profit from day one, but don’t keep piling your money on something that’s not going to work.

You need to have a long term view on where you want to go as a business, but remember to always to work in the short term. I can only do today’s work so that’s what I do. Never do today that which can be left till tomorrow. Trying to plan what you’re going to do a week on Wednesday is pretty pointless. All I can do is today, I can’t do next Wednesday now so as long as the time’s there, focus on now. And if all else fails, lower your standards.

Now that might sound a bit strange, but it’s true. There’s absolutely nothing wrong with aiming high. When you’re creating a product, the first phase is all about being creative. At that time it’s all about flying kites, thinking of the impossible, thinking about what you could do.

But after three months, step back and say, is what we’ve got good enough? If the answer’s yes, it’s what the customer wants, then you should be getting on with it. There’s a time when you need to reach for the stars and a time when you’ve got to say, let’s go ahead. You need to recognise when it’s time to stop dreaming; it’s about making the best of what you’ve got because that’s what the customer will value. You’ve got to try and see the product the way customers see it, not the way you see it. Trust your instincts, get on with it, but be prepared to stop, and start again.

I think there’s lot of cases where we should have stopped sooner. When you’re in the middle of it you never realise, but this is also a good thing. You have to be determined to succeed and don’t think of failure. It’s pretty healthy to not think you’ve got it sorted because as soon as you think that it’s under control you could fall off a cliff somewhere. I never want to think I understand the whole of my business; that’s just plain dangerous.

It’s much better to be slightly nervous, but at the same time, know when you’re going down the wrong route and do your best to re-invest in something you know is worthwhile and has a sustainable profitability.

I used to think in the early years that I didn’t plan enough. I was constantly drawing out these long term detailed plans. Then while on a course at Durham Business School I was told, you don’t want to plan more; you’ve got to be responsive. Do things well rather than sit down and bureaucratically plan things to the last point.

I used to do work for the railways and defence industries and they were really paranoid about having these detailed plans; they could see what we were planning to do in six weeks time but they wanted our commitment to what was happening in the short term.

You’ve got to have some general plans of where you want to be, some kind of general direction. You need some general beliefs, but you may not even recognise them; they’re just within you. Concentrate on producing a well made product that people will want to buy.

The people who you work with are so important. What gives me huge satisfaction in running a business is seeing employees fulfilling their potential, someone who’s been challenged. Sometimes you have to give people more than they can handle and let them struggle with it for a while and see how they get on, but obviously don’t let them drown.

It’s not something that people are comfortable with, but when you’ve got the right people, those who have a desire to succeed, their potential will be really great. Getting the right people can be hard. Teaching is all about learning; you’ve got to get someone who wants to learn and you can’t teach someone who doesn’t. I can encourage them, but the desire to succeed has got to come from within them. People have got to believe they can do it and for some, that isn’t apparent very early because they don’t realise they have the potential. But once you’ve hired the right attitude, your business will go from strength to strength.

In my opinion, you either want to grow a business or you want to make money for yourself; the two things aren’t really the same. For me, in the early days it was all about reinvesting the money so we could increase customer satisfaction. I’m sure someone who values money very highly will never be able to grow a business profitably because every business goes through a time when you’ve got to put money back in again and it might just look like a bad bet.

If you give cash too much value, you won’t put it back in and it won’t be allowed to ride. Ironically, an entrepreneur who worries more about money will probably make less. Cash in your pocket is very different to cash in business. It’s there to work for the company; it’s not cash available for you. Invest it wisely, if it’s not working make sure you recognise that and get out, but you’ve got to try new things.

Sometimes things do go wrong and it wasn’t foreseeable; it was down to chance. Don’t panic, you’ve just got to work your way through it. Manage the creditors, talk to the bank and suppliers and work hard to sort the business.

Anyone who runs a business reasonably well will occasionally run into trouble, the only way to avoid it is to work well within your limits and that means you aren’t utilising your assets. What drives me is happy customers and the way to please them is to keep reinventing your business, think about new things that people would want to buy. Jump in the deep end; just make sure it isn’t too deep. A successful entrepreneur will be able to dream, but also have the determination to implement it.

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