The Windows Free Business Experiment

At the start of this year my businesses partner @martynshiner & I started an experiment to see if we could run Severn Delta using free open source software.

In place of Microsoft outlook we have been using Roundcube Webmail. Instead of Word, Excel and Powerpoint we have used Open Office. Our servers are likewise Microsoft Free-zones.

To be really bonkers we have both been using 9 inch Eee pcs running Eeebuntu! As you can see above.

We of course run the day to day business of the company with our own ERP software built with open source tools and our in house IT crew of 2. This runs in a browser. FireFox usually although I am using Chrome.

After eleven months the only glitch is my forecast model which still resides in a spreadsheet (I know I know - we are working on it!). This has a tendency to crash Open Office, but this is the weedy processor in the Eeepc falling down so a hardware issue. Otherwise it's no looking back. We are overdue an overhaul of our desktop hardware and so will be rolling Microsoft Free desktops across the company replacing our remaining XP running hardware.

The conclusion on the Eee pc is that it is great for traveling as ludicrously light but just a little too light on processing power. Martyn is already playing with an old Toshiba laptop with Karmic Koala...

I sent this blog post from my Android running HTC Hero. Maybe not as achingly trendy as an iPhone but it is Open so we can write apps to hook up with our ERP if we want.

And as for Windows7...

If You Work For Me You Can Twitter All You Like

Great response from TechCrunch Europe here to the "We don't understand what the kids are up to so we'd better try and put a stop to it!" story in the Telegraph this week.

If you work here at Severn Delta you can tweet all you like. I don't care. As long as your performance is good I am not going to micro manage you and fret that you have just had another cup of coffee! We believe in managing performance not behaviour. Simple as that.

I am confident that the cost to Severn Delta of our employees using Twitter or Facebook is ZERO English Pounds Sterling.

I am in any case very confident that when it come to all this new fangled social media time wasting blogtastic webby stuff that round here I am very much the time waster in chief!

So who am I to criticise?

Its Official Sarah Smith "Ultra Absorbent" Cleaning Cloths Are Britain's Favorite!

According to those clever chaps at Nielsen our Sarah Smith "Ultra Absorbent" Cleaning Cloths are Britain's number one selling branded cleaning cloth!

Available in a range of kooky British designs they outsell:

Every one of 23 Spontex branded cloths (owned by Total - T/O 143bn Euros)
Every one of 26 Vileda branded cloths (owned by Freudenberg - T/O 4.8bn Euros)
The total sales of all 8 Scotch Brite cloths (owned by 3M - T/O $23bn)
The total sales of all 26 Minky branded cloths (owned by Vale Mill - T/O £30m)
And outselling E cloth's 8 products by a more than 50%

Not bad considering we have a fraction of the distribution of this lot, indeed for most of the last 12 months we have had only 2 shelf facings (one in Sainsbury's, one in Waitrose) and a "clip strip" merchandised unit in less than 50% of Tesco stores. Not to mention of course that we are a small, privately owned company employing about 40 people in the depths of rural Somerset, UK!

A good example of where focus and Ignoring Everybody and the big company marketing industry straight jacket of conventional thinking will get you. The world has changed so you have to think different and be different or you will die.

Data source: Nielsen UK Grocery Multiples Value Sales 52wks ending 22Aug2009

Cadbury, Kraft, Unilever and La Fromagerie Bel

I posted this snapshot of the Guardian homepage on Twitpic yesterday and asked if anyone could tell me the obvious error.

Answer:

I assume the chocolate on the left is Cadbury's. The Cheese in the centre looks uncannily like Baby Bel which is owned by La Fromagerie Bel / Unibel and the Mayonnaise is Hellmann's which is of course a Unilever brand.

So who are these Kraft fellows?

Why A Weak Currency Is Bad For Manufacturers

I get frustrated when I see articles like this one in The Observer trotting out the cod wisdom that weak sterling will help the UK ride the recessionary storm.

The view from the small to medium sized manufacturing enterprise is different for two reasons:

1. The collapse of sterling has caused a vertical lift off in raw material costs. The modest manufacturing base here in the UK is wholly dependent on imported raw materials. If from the Eurozone or the Dollar-zone the increase in prices resulting directly from weakness of sterling. The weakening in Sterling has cost my company an amount equivalent to 75% of our 2008 pre tax profits. Just the currency shift alone. It is the equivalent to the salaries of 8 shop floor jobs. Am I sitting here comfortably reaping the export boom and not worrying? No. Actually our export business is down. Well down. Here is why:

2. Demand in the UK's biggest export markets is on its knees. Italy, Germany, Spain, a little better in France but where is the demand for my cheap sterling exports made with my now 25% more expensive raw materials? Hello? Hello? Anybody there?

My outlook for demand recovery on the continent is sceptical. I am not holding out for an export demand surge because by the time it arrives (if ever) the preceding wave of cost increase may well have finished me off and so rather than be the saviour of UK manufacturing a weak currency is simply exacerbating the problems.

Pampers Simply Clean: The Jury Is Out!

I have to admit this launch from P&G has me stumped. I have spent most of my professional life watching P&G and frankly for the most part learning from them. Back in my Unilever days we had a book of advertising guidelines called UPGA which we on the detergents team I worked in referred to as "Use Procter & Gamble's Advertising" rather than the Unlever Plan For Great Advertising that was the official title. Even now here at Severn Delta P&G brands are market leaders in many of our important own label categories so we benchmark them pretty thoroughly and follow where they go.


With Pampers Simply Clean however they seem to have torn up convention and may well have succumbed to recession panic. Esentially Pampers Simply Clean is a lower specification, cut price alternative to Pampers. I see three potential problems with this:

1. Range extensions up and down the price ladder rarely work. If you are value brand and you try to extend up the price/value matrix you better have a mighty fine reinvention of yourself up your sleeve. If you are a premium brand, and Pampers is a premium brand in the diapers and baby wipes market you risk hemaoraging value as your existing buyers trade down into your new cut price variant. Much better to extend the brand into adjacent categories at similar price points. Given the importance P&G have placed on personal care and their positions generally in skin care and hair care I would have thought extending their marketing leading baby care brand Pampers into infant skin and hair care would be more logical. The lessons from P&Gs successful dominance in laundy detergents is also worth considering. If you want to go for a different value sector of a market: use a different brand e.g. Daz & Ariel.

2. Margin attrition is inevitable. In walking into the value end of the market you stray into the territory of Supermarket own label. A tough and agressive place to live where prices only go down. If you want to maintain a value prce point vs ownl label your margins are going to get squeezed, and once margins go down they are damned hard to get back up.

3. You run the risk of trashing your hard built brand for good and all. It should be of paramount concern that only a few weeks after launch the first comments that consumer have posted on the Pampers website are overwhelmingly negative!

Doh! If You Don't Send An Invoice You Won't Get Paid!

Seems obvious, but it is an all too common failing in all too many businesses. A devil may care attitude to actually billing customer for the work, goods and services that have been supplied. In these credit starved times a punctual, nay, obsessive approach to invoicing is called for.

Here at Severn Delta we issue invoices daily for all goods shipped that day, like most FMCG companies. But our suppliers are not so sharp. Our financial year is Jan to Dec so we have just passed the half year mark in 2009, and we have a substantial chunk of accruals outstanding for goods and services which we received BEFORE the end of December 2008, but for which we have to receive an invoice.

Now I don't know how long it typically takes you to issue an invoice to your customers but I put it to you that six months is a little extreme.

We will be happy to pay the suppliers in question. No problem. We ordered the goods and services and we received the goods and services. BUT if you don't send us an invoice you just ain't gonna get paid!

To give you an idea of the scale of this slackers approach to the fundamental act of invoicing, the value involved totals £30,000.

And that is just Severn Delta, a £6million turnover company. Scale it up across the UK economy and how large is the big black hole of un-invoiced value?

So if you are reading this and are wondering if there is anything you haven't billed your customers for, go and check now. Get the invoice/s out today.

The sooner you do, the sooner you will get paid.

And that is what you are in business for... isn't it?