Tag Archives: scale

Brendan’s dreams #3 – For the love of brewing

After 15 years of selling beer to pubs, the Iceni Brewery in Norfolk has scaled back production and founder Brendan Moore is a happy man.

Brendan Moore 2“I’ve now created the business people imagined I’d created when I started. I have time to go for lunch and I’m now where I’ve always wanted to be – producing beer for the known demand. In the past we tried to force demand which wasn’t good for the quality of the beer.

I work mainly on my own – Kathy comes in to help 15 hours a week. I sell direct to the public through the shop at the brewery and people contact us for beer for events. I limit the number of big events I brew for to limit the strain on supply (and the strain on me!)  I also supply a couple of farm shops, but adding the cost of travel cuts the margin.”

I suggest to Brendan that it sounds like he’s now operating at a scale he’s comfortable with?

“Yes – working hard should not be part of your business plan. The most successful business people are not physically working hard – guard against it. People think I’ve almost committed a crime when I tell them I stop for lunch. I do regret the amount of time I missed with my own kids, but I now have time with my grandchildren.”

IMG_4182Before letting Brendan go off to attend to more important business – brewing beer that people love – I asked him if there was a turning point that got him to his current happy state.

“Once I decided to downsize, everything just came right. I stopped doing things that lost money, or didn’t make much, and started doing things I dreamed of, things I liked to do and which people wanted me to do. What I’ve learnt is that people want to buy beer from a hobby brewer! “

To find out more about the Iceni Brewery and, of course, Brendan’s very special brew, go to www.icenibrewery.co.uk

Growing your enterprise team – does size matter? 

Team size 2Recently I’ve had cause to re-think whether working on my own from home is the best way to develop my enterprise start-up plans to create The Repair Shed – a social enterprise bringing older men at  a certain stage in their lives together to make, mend and learn.

A recent radio discussion about shared workspaces extolled the virtues of co-working with other (often lone) entrepreneurs. Wearing my UK Men’s Sheds Association hat, I’ve also been learning about Association members through interviews and visits. A recurring theme is ‘shedders’ having their own garden sheds, but still wanting to work with others, on both their own and group projects, in Men’s Sheds.

Unless you’re my former next-door neighbour – an author who loved his own company (writing at home) and even travelled the world alone as a location scout for BBC documentaries – it appears the majority of people prefer to work with other people.

In 35 years in the not-for-profit sector, I’ve tended to work in small organisations. I always said I’d never work in an organisation where I didn’t know the person walking down the corridor towards me. I then promptly did so, by working with the National Association for Voluntary Organisations (NCVO) which at that time had 120 full and part time staff. I hasten to add that NCVO was one the friendliest organisations I’ve ever worked in.

So, assuming you’re not destined to always work alone as a sole trader, what’s the right size for your enterprise team? I’m talking about the number of people who work in the business on a paid basis. This is not to under-estimate the sweated labour of volunteers but that’s a variable not easily built into a business plan.

Clearly optimum size will vary from enterprise to enterprise and many, of course, start with only one person – the entrepreneur – probably only earning an income after shedding a lot of blood, sweat and tears. In an earlier blog, I recounted US business scholar Michael Gerber’s theory that the success or failure of a new business is determined by the ability of the entrepreneur to cover three roles – entrepreneur, manager, and technician.

Gerber suggests that these three roles (he doesn’t appear to address financial management skills) are unlikely to be found in large enough quantities in one person to sustain the enterprise beyond a table-top business, probably run from home.

But there may be some kind of half-way house between working alone while wearing several hats and developing a staff team before the outlay can be justified or sustained.

Mike Southon, co-author of ‘The Beermat Entrepreneur’, points to the use of virtual networks of freelancers to build an initial team – bringing in expertise as/when necessary. But he observes that, as the business grows, so does the need for a ‘fixed office’.

The Beermat Entrepreneur’ author has calculated a certain staffing level which triggers a step-change in the way the business functions. That figures is 25-35 people, since made more precise by another commentator at 31. Above this figure, says Southon, people cease to know what’s going on all of the time, communications break down, and rules, procedures and processes have to be obeyed.

If the smooth functioning of a business relies on good internal relations between employees, the next significant figure is said to be 150 – the science-based ‘Dunbar number’. Named after anthropologist Robin Dunbar who defines it as ‘the theoretical cognitive limit of the number of people with whom one can maintain stable social relationships’.

Apparently Richard Branson has his own upper limit for a company’s staff team for optimum social inter-action and internal communication – 300. Above this figure he believes that employees are unable to feel part of a team. Apparently when the Virgin Group was sold, Sony found they’d bought a cabinet of companies with ‘only’ 300 employees in each.

So what does this mean for my own enterprise development plans? Well, we’re about to have a first gathering of half a dozen (nice number) of would-be ‘founding members’ of The Repair Shed. For members read ‘workers’ as they’ll be the people generating income if things go according to plan. I’m also recruiting a steering group – a sounding board, a group to whom I become accountable. I hope this makes for a faster route to getting the Shed off the ground – but it won’t be at the bottom of my garden.

References

Slowing the spin about Social Entrepreneurs https://enterpriseessentials.wordpress.com/2013/12/21/slowing-the-spin-about-social-entrepreneurs

The Beermat Entrepreneur  www.hive.co.uk/ebook/beermat-entrepreneur-revised-edition-turn-your-good-idea-into-a-great-business/17085649

Of related interest…

Seth Godin on a paradox around investing in scaling up http://sethgodin.typepad.com/seths_blog/2013/12/the-moderation-glitch.html

On scaling and social innovation  www.theguardian.com/social-enterprise-network/2013/dec/16/scaling-up-growth-social-enterprise

Slowing the spin about social enterprise  

Before Christmas I wrote about resisting the temptation to sanctify social entrepreneurs and I think the same goes for over-selling social enterprise.

IMG_3712As a social enterprise supporter of the past 15 years or so, I’m naturally delighted when the sector gets a positive profile-raising plug, but I’m equally dismayed when someone goes over the top about what social enterprise has achieved. And the praise is usually coupled with a side-swipe at mainstream business.

It’s all too easy to cast the private sector as the villain and social enterprises – assuming that implies the business is ‘not-for-private-profit’ – as the answer we’ve all been waiting for to treat society’s ills. Reality, of course, is much more complex – there are good and bad private sector and social enterprise businesses, and both may have social impact (ref David Floyd’s social enterprise myth-buster).

I also think scale is relevant. Big isn’t automatically better, but until social enterprises (individually or collectively) make enough difference to enough people’s lives, I believe they won’t offer a realistic alternative to mainstream business models – holding the moral high ground will never be enough.  This isn’t to knock small scale, community-rooted enterprise – it can demonstrate a better way of doing business – but we shouldn’t pretend it’s going to change the world until it’s more ubiquitous and until many more people benefit.

In an imperfect world, I’m happy to credit a large scale solution to a social problem rather than condemn it outright for being big and motivated by making a profit for shareholders. What I’m not happy about is mainstream contractors (they all seem to have numbers in their names these days) providing public services badly and passing themselves off as social businesses. We know who they are…

There’s a well-worn saying in customer care – ‘under-promise and over-provide’. In other words, say you’ll deliver an order within a week and have it with your customer the next day, not the other way around.  The same should go for social enterprise which has a rich heritage that goes back at least 165 years to the Rochdale Pioneers – founding fathers of the co-operative movement.

Recent difficulties for the Co-op Bank show how easily reputations for ‘better business’ can be shaken, so it’s more important than ever to manage expectations about what social enterprise can achieve. If we get carried away with our own publicity and hold it up as the solution to all economic, social and environmental ills, and it’s then found wanting, we could see customers taking their business back to mainstream suppliers – condemning social enterprise as ‘all mouth and no trousers’.

References

Slowing the spin about social entrepreneurshttps://enterpriseessentials.wordpress.com/2013/12/21/slowing-the-spin-about-social-entrepreneurs

David Floyd social enterprise mythbusterhttp://www.theguardian.com/social-enterprise-network/2013/oct/03/private-sector-social-enterprise-ethics

A shorter version of this blog first appeared on the Social Enterprise East of England blog site