Hello everybody. Welcome to the Results Mastery podcast. It's great to have you here. As you can see, I've got a guest with me today. I'll tell you a little bit more about him in a moment. What I'm trying to do with the podcast is help as many small businesses as I can. I've been doing this now for a couple of years. So, you know, go and have a look at some of the other episodes. Make sure that you subscribe to the podcast to get the latest updates, ideas on technology and AI and so on and so forth. But let's focus today, if we can, on our guest. Welcome, Peter Smith. It's great to have you here. Thank you for your time. I really do appreciate it. I've known Peter for, well, I'd dread to think, Peter, what is it? 25... 20 years. Yeah, something like that. We share a common love of Sheffield Wednesday, I've got to say. So that was a good start in our friendship. [laughter] But also, he's someone that, as I've got to know Peter, I've got huge respect for his knowledge and expertise. And as you can probably guess by the grey hair that both of us have got, we've been around a while, haven't we, Peter? You know, we have lots of experience, but Peter's somebody who's incredibly up to date. He was telling me just the other day that he's on an AI training program, which I just think is absolutely brilliant, you know, and I'm the same. I like to keep up to date with stuff. But Peter is a renowned business advisor. He's been helping businesses, particularly smaller businesses like myself, for many, many years, and I'd like to welcome him into the conversation. So, welcome, Peter.
Thanks very much, Steve. It's my pleasure. It's a pleasure to be here and chatting with you. It's always good to have a chat.
Well, we try and do it in a way that's like just a friendly chat with two people who hopefully know what they're talking about. I'm sure we do. And that's of great benefit to other people. But just to kick off, Peter, tell people a little bit more about you, what you do, what you've done in the past, and so on and so forth.
Okay. A potted history. I left school at 16, became an apprentice with the GPO before it became BT. So I was a civil servant for about two years. And I became a technician, decided that it was better pay as a manager. So I became a manager. And then found that I was still being told what to do. So I decided to become a manager's manager. And eventually I reached senior manager status. I was managing over 500 people, 40 managers at the time. And then I had the opportunity to take early retirement. So I decided that I would travel the world at someone else's expense, and that's exactly what I did do for about six years. Travelled the world, mainly working in telecommunications, ops director in Holland and various things, ending up in Indonesia, in Sumatra actually, before I came back to the UK. And I ran a small to medium business in Sumatra for a period, not terribly successful. We were attacked on the jungle roads, which, well, [laughter] it put my wife off a little bit, and she said, yeah, yeah, [laughter] she said, could we go back to the UK and find something to do in the UK instead of travelling the world? And I said, well, it can happen in London, you know, this sort of thing, but anyway, I took the point. I'd had a great time, I'd travelled, you know, doing a fair bit of travelling, and so I was happy enough to come back. And I thought, what will I do? Work with small to medium businesses, because I can transfer the knowledge I gained through all the times I spent dealing with businesses and BT initially, all the training I had with BT, incredible training I had. When I left BT, I'd actually had something like two years of training if you added all the days together out of 32 years I worked for them. So you can imagine there was an awful lot of not just technical training but management training as well. And I also did a degree. It took me 10 years to get a degree, but I became a chartered electrical engineer as well during that period of working for BT. So, came back to the UK, and I'll be honest, working with small to medium was a bit of a discovery, Steve. It's different working for SMEs to working for large businesses. Yes. And I also had the problem that I'm an engineer. And to me, taking me on board would have been a logical decision because I could explain to them how much of a difference I could make to the business. But one of the things I discovered, when I also studied sales, I thought I'd better study sales. So I discovered that people don't actually buy on logic, they buy on emotion. They'll justify buying it on logic because when the emotion dies down and they have to explain to the wife, the dog, the father, why they've made the decision, they have to have some logical reason for having made the decision. But they won't make the initial decision logically. It'll be based on how they feel about you working with them. And that's always the key. But having learned that, I found that it was a lot easier then to engage with prospects. And I suppose I helped initially, I did a lot of free work whilst I was learning about working with SMEs. So I did a lot of work in the Midlands. I worked with a couple of outfits including the Prince's Trust. Actually, I did some work with the Prince's Trust as well. But it all helped me to gain an understanding of working with small to medium businesses before we moved down to Berkshire, which we did, although there was no sensible financial reason for doing it. We started with grandchildren down here. So we moved down to Berkshire and I've continued with the business down here. And it's been tremendous fun. I helped several businesses. In all, I suppose I've worked with over 100, perhaps 150 small to medium businesses since 2005 when I came back from... sorry, trying to think, where are we now? 2026. Yeah. 2005. So I've been back in the UK for about 20 years. So [laughter] any longer than that? So I've worked with over, you know, with probably 150 SMEs that I've helped in that period. Anyway, that's enough about me, Steve.
That's great. I would say, Peter, your comment about, you know, the difference between the corporate world and the small business world, it is such a gulf, isn't it? You know, it's massive. And, you know, in my background in marketing, somebody who's like a director at a big company like Vodafone or BT or Nike or whatever, they don't actually know that much about how to market this little business, you know, an electrician or a consultant or a one-man accountancy business. It's just a different world, isn't it? You know, in a big business you think, you know, you have a multi-million pound budget probably and, you know, it's a matter of what you're going to spend it on. In the small business, it's very, very different. So, I wanted to make my first question around the problems that businesses have right now. Not so much, you know, the oh well, you know, the government and the wars and the world and the economy because we can't do anything about that. But I want us to, if we could, Peter, try and identify what are the issues? What are the things that small businesses can do right now? What are the problems that they're facing? And what can they do about that in order to overcome or at least reduce the problems that they've got? What are your thoughts on that?
Yeah, can I just go back a little bit because we talked about the difference between large corporate and small to medium. But yeah, I did spend over 30 years with a large business, but there are some things that are common. One of the things I found when I was a manager at 24, I had five people working for me then, but I found that it was about money and people. I mean, it doesn't matter how big the business is, there are two things that are key. One is money. Because if you're in a small to medium business or a large business, if you don't have cash, if you don't have cash available, then the business is dead on its feet. And then the second thing is assuming that you've got cash flowing through the business. The next issue really is people. And you know, you've got customers, you've got suppliers, you've got your own people, and you've got shareholders. No matter how big the business or small the business is, you've got those four groups of people that you need to manage. So, in some way, what I tend to do is I simplify businesses, Steve. And I say, look, you know, have you got the basics right? Because again, if you're running a business, running a business is not in theory complicated. In theory, it's very simple. All we need is a product or service that the market's willing to pay for at a price that gives us a profit. So that's the basic premise upon which a business is built. What complicates it is actually doing it. So the theory is great, but when you actually start doing it, as easy as it sounds, it's very complicated. But nevertheless, no matter how complicated the business is, sometimes it's useful to say, well, let's just cut through all that complication and have you got a market for this particular product? You know, is it clear that there is a market for it? Because anybody can sell into a market at a loss, but is it going to make a profit as well? So, I tend to simplify. Now coming back to the original question, which was what's the biggest difficulty that small to medium have. It comes back to the title of my latest book actually, which is Staying in Control. And what we need to do as business owners, we need to stay in control of what's happening. And that's not as easy as it sounds. But you know, if we look at it, it's about change. The only constant in business is change. You've constantly got change. Which is why I'm on a 15-week course to learn about AI.
Because it's probably, Peter, it's never been more change. The one thing we can all guarantee about the future is it's going to be different. I don't think, certainly in my lifetime, I don't think there's ever been a time where there's so much change.
But again I simplify things because I say, well, okay, what are the changes? And there are only three changes actually that we have to deal with. One is how society's changing because we constantly have to review our business in terms of how society's changing and how society is not just changing in terms of markets but how society is changing in terms of people bringing new people on, recruits. I think some of our members will realize that recruiting someone now at 16, 20, 24 is different to recruiting someone that we had 25 years ago, 50 years ago. The way people think is different. So society is changing in every aspect we can think of. The second change is technology. So the first one is society, the second one is technology, and technology is constantly changing, you know, and over the years there's nothing... I mean, the thing about AI is it's just another tool that we're learning how to deal with. But if you go back far enough, people didn't have electricity, did they? You know, before that they had steam power. So yeah, you know, small to medium have had to react over the years in all sorts of ways. I mean, I read a book once which told us about how people had local batteries. They were constructing local batteries in cellars and they'd shovel in sal ammoniac and carbon and all to make a local battery to light the house, you know. [laughter] That didn't work. You know, that industry failed miserably. But so things change all the time and I was in telecommunications and as you know telecommunications changed dramatically from clockwork switched circuits which I had when I first joined, carbon granular microphones, to the latest digital technology. So the second thing is technology. The first thing is society. The second thing is technology. Now, one would have thought that that was sufficient, but it isn't, is it? Because we also have a government, and the government thinks things are far too easy only having to worry about society and technology. Let's make it a little bit more difficult, and let's introduce some legislation. Let's make it more difficult to recruit people. So, we'll increase the taxation of actually employing people. Or they'll decide to say, well, you know, let's charge a bit more corporation tax. You know, these fat cats are making too much money so it reduces investment. So, you know, we have regulation that comes along as the third factor. Now if you think about those three things, it's only really those three things that you have to worry about as a business leader.
Yeah. Yeah, I get that. Yeah, but you know, some things you can do something about and others you can't. You know, the government will do what they'll do. But I think, you know, I was talking, I remember there's a brilliant book that I read a good few years ago now. I was in a situation myself where, you know, I was doing well. I was working phenomenally hard. You know, things were going great, I thought. But when we got to the end of the year, and I got my accounts, I hadn't really made... I made a lot of money, but I hadn't made hardly any profit, which is, as you said earlier, the purpose of a business is to make a profit, not to, you know, even if you're a charity, the purpose of a charity is to make a profit so that you can do good, you know. And I got to a level there, and you know, I weren't making the profit that I wanted to, and I read this book called Profit First. I don't know whether you've ever heard of it, but it's a truly brilliant book. One of the things it said is take your profit first. So the idea being that instead of waiting to the end of the year, you take your profit out of your... If I want to make 20% profit every month on my income, then at the end of the month, I take that out of my... take 20% out of my money that I've earned that month and stick it in a separate bank account. Now, the following month after I've done that, if I've not got enough money in my account to run the business and pay everybody and so on, then something's not right about my business. And what it taught me is to identify the problem so much earlier, you know, rather than end of the year, oh, oh shoot, you know, I've not got the profit I wanted, I've not made my 20%. I knew it at the end of the month. I knew it in real time. And it was just such a great lesson. And by the way, he also said take 20% out of your VAT and stick that in a separate account as well, and then take 20% out for your corporation tax and stick that in a separate account, which is always difficult to do, to take all that money out. But, you know, it was just such great advice, I thought.
I think that's true, Steve. And that brings me on to... in fact, it just reminds me of the latest client I got. I picked up a new client a few weeks ago. Somebody recommended them and the first thing he said to me was, he's a subcontractor to large businesses. He had sort of 40, 50, 000 pound contracts, but just a single one-man band effectively, but he did employ about five people with subcontracts and whatnot. So he dealt with some decent contracts. He said, 'I've just had this fantastic contract.' He said, 'But I don't think I'm making any money.' I said, 'Well, that is probably the easiest thing to deal with.' And I said, 'What did you put down for your overheads? What did you put down for your management time? What did you put down for extras, for contingencies?' Oh, he says, 'Well, I actually looked at the number of people I'd need on the job and I looked at the equipment and the stores I'd need and I put those in.' I said, 'Well, that's where you're going wrong. If you don't take account of the non-obvious costs, then you've got a problem.' And I simply provided him, I used AI actually, with a spreadsheet which included all those extras. I said there is no point in getting a contract which is loss-making. The only work you need to do is profitable business, and you do not compete on price. Never compete on price. You compete on quality and diligence and providing the least hassle for the person who is managing the contract. Now that's more important than price because anybody [snorts] can reduce a price and make a loss. But the skill is actually convincing someone who's looking for someone to fulfill a contract that will say what they do and do what they say and actually deliver. And the delivery as agreed is far more important than scraping the bottom of the barrel and going for the cheapest possible price. And since I've been working with him, he has had... he's only taken profitable work. I said, you know, just if they want to screw you, just sort of say, well, thanks very much, but no thanks. And you drop any work that isn't making a decent profit and you make sure that you concentrate on providing a quality product and a quality service. And we also, I said, the other thing is you need to be constantly listening because he is a lad who was sort of learning as he went. You need to listen to the people who you're working with and find out what it is that makes them want to have you working for them as against somebody else and what sort of things they're looking for. And flexibility is another thing, of course, but there are ways to work with the people who have the control over giving you the work. You need to meet their needs. It's actually, Steve, it's what you always said, you know, how do we meet customer needs? It's about meeting customer needs and meeting customer needs better than everybody else.
