Business Matters: March 2008
Business Matters March 2008
The UK’s leading magazine for the SME business owner
WOMEN AT THE TOP OF THEIR GAME & HOW THEY DID IT...
Women in Business / Eric Baker / Whatʼs your businesses value?
FOR SALE TICKETS, TICKETS? We talk to Viagogo chief Eric Baker
PLAYING WITH THE BIG BOYS Competing in the international marketplace
HOW MUCH IS MY BUSINESS WORTH?
Business Matters March 2008
The UK’s leading magazine for the SME business owner
WOMEN AT THE TOP OF THEIR GAME & HOW THEY DID IT...
This Month News
4 Women in Business
HOW MUCH IS MY
We talk to Viagogo chief Eric Baker
PLAYING WITH THE BIG BOYS
Competing in the international marketplace
19 Taking on the titans
32 Getting to know you
• • • • regular features
s you can see from Deborah Meadon adorning our cover this month, we have spent a large amount of time recently speaking to female business leaders and entrepreneurs about how they have succeeded. Whilst they are all inspirations, the general concensus was that it didn’t really matter what sex you are, just as long as you have determination. This month we also look at subjects from how to make sure that you retain your best staff, to networking on the golf course, to how to get the best price for your business if you do decide to sell. Jo Russell spent sometime with Eric Baker about how a bad experience trying to buy Lion King tickets led him to set up Viagogo, one of the leading ticket agencies in the UK and Christine Baker joined us to explore the life of East London boy made good Jack Petchey, whose foundation hands out millions of pounds to help London’s kids, but who plays down the usual publicity that other similar benefacters crave. We are pleased to be launching our new interactive website on the 10th Marchwhich will provide subscribers the ability to join our new social network for business owners to share problems, and market yourselves to your fellow subscribers. Next month we are pacing our cases and heading off to the land of the free to explore how easy it is to set up and run an office in New York. Simon Clarke - Editor email@example.com
CLEARSIGHT PUBLISHING & MEDIA
What has been happening in business in the last month.
Jim Moore’s Inside Track: this month Jim helps you identify the best inestment plan for your money.
Jo Russell talks to Eric Baker about how and why he started viagogo.
• • • • business strategy 12
Women in Business
We talk to some of the leading women in business today.
HR for the non HR
How to make sure that you do not loose your best staff.
Working on the 19th hole
We give you some essential tips on winning friends and business when you mix business with pleasure.
Publisher & Managing Editor- Richard Alvin Editor - Simon Clarke - firstname.lastname@example.org Production and Design - James Conolly & Andrew Lawrence Head of Advertising - Anthony Carty - email@example.com Contributors: Jim Moore, Felicity Cousins, Gavin Porritt, Donald Findley, Jo Russell, Mark Prigg Louise Shaw, Derek Bedlow, Richard Eaton, Christine Baker, Sarah Bethell Published by - Clearsight Publishing Ltd, Ensign House, Canary Wharf, London E14 9XQ Tel: 0870 116 2852 Email: firstname.lastname@example.org Web: www.bmmagazine.co.uk Subscriptions – email@example.com Business Matters is printed on recycled paper and the polybag wrapping is bio-degradeable Printed by – Wyndeham Heron ISSN 1754-3096 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior consent of the publishers. The views expressed in Business Matters are not necessarily the views of the publishers. Whilst Clearsight Publishing Ltd has made every effort to ensure the accuracy of the information contained in this publication, neither they nor any contributing author can accept any legal responsibility for any consequences that may arise from errors or omissions contained in this publication or from acting on any opinions or advice given. In particular, this publication is general and not a substitute for professional advice and you should consult your own professional advisors where appropriate.
Business Matters issue 158 • March 2008 3
News Business debts: what are yours? New research from entrepreneur think tank, the Tenon Forum, reveals that seventeen per cent of UK owner-managers have no idea how much money their business owes. Close to half of UK owner-managers admit their business currently owes money with four in 10 took out loans to grow the business, 15 per cent say their business had not performed as expected and nine per cent blame poor decisions which have lost the firm money. However, it seems that many entrepreneurs are comfortable with a high level of debt – with 15 per cent prepared to accept a high level of borrowing if it enables long term business growth and a quarter stating they are very open-minded about borrowing funds. While some are maximising their debts to grow the business, other SMEs are more worried about their borrowing levels with a twenty per cent saying they feel their debts are having a negative impact on their business. Sixteen per cent of ownermanagers never let their business borrow money and 12 per cent consider being in debt their worst fear. Across the UK, businesses in the North are most concerned by business debt with almost a quarter claiming they never let their business borrow money and 15 per cent of Southern SMEs stating this is their worst fear for the business. Carl Jackson, Head of Tenon Recovery, commented: "In the current fragile economic climate, it’s especially important that entrepreneurs know their balance sheet inside out. Borrowing can bring considerable business benefits but debts must be kept under control and within the financial limits of the company. “No matter their level of debt, entrepreneurs should put contingency plans in place to ensure these debts remain manageable.
Social networking in the UK celebrates it’s tenth birthday Some of our readership might only just be coming face-to-face with the Facebook phenomina, but social networking in the UK celebrated it’s tenth birthday last month. Social networking may now be a buzz word, but the UK's longest running example was founded over a family lunch in February 1998 by mother of three, Penny Power. Penny and her husband are returning to the same restaurant for lunch, ten years after their idea of a business community on the net was conceived, long before the term social network existed or was properly defined. Ecademy was one of the few net-based companies to survive the dotcom crash of 2000. "Back then everyone was chasing dotcom lottery tickets thinking they would be overnight millionaires," says Power. "There was talk of B2B Marketplaces but nothing ever materialised because everyone was obsessed with instant transactions rather than building a community of people and relationships." "At Ecademy we focused on putting people first and grew organically through word of mouth, and by backing up the service with face-to-face local events across the country," says Power. "We avoided venture capital because we witnessed our friends and peers crash and burn after the dotcom crisis in 2000 begun in March 2000, and started making profit after five years." "Our next challenge," says Power "is globalising Ecademy to see a replica of Ecademy in the UK spreading to all parts of the worldwide business community." Social Networking is emerging as a powerful commodity as large numbers of social networks like Facebook, MySpace and
Linkedin expand. After years of profitable business Ecademy has advice for social netFounders: Thomas & Penny Power work companies. The key is to create a community, it says, not just a set of tools. Its own has been achieved because of the personal involvement and guidance that all members provide one another with, online and offline. Penny Power says: "The whole team led by Chief Executive Glenn Watkins worked hard to make sure Ecademy provided a platform of emotional support and wealth for members as well as a vehicle to generate financial wealth through commercial transactions. Networks driven only by money or transactions tend to fade away once the money dries up, we never set out to be a fad, and time has proved we were right". Ecademy believes in relationships first, commerce second and is the UK leader in B2B Social Networking, continuing to expand around the globe reaching all the 222 countries defined by Google Analytics.
Being seen to be green UK businesses are more interested in implementing CSR policies to impress employees than out of any desire to save the planet, according to new research issued by leading business and financial advisers Grant Thornton. The findings highlighted that 54% of UK businesses are influenced to move towards more ethically responsible practices by a desire to attract or retain staff, but only 30% are doing so because they are concerned about the planet. Cost management is also a key factor,
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with 52% citing this as an important motivator. And concern about public perception was mentioned by 48% of businesses, emphasising the extent to which CSR policies are now recognised as being an important element in creating brand profile. Alysoun Stewart, Head of Entrepreneurial Advisory at Grant Thornton comments: "Bottom line profitability will quite rightly stay critical. However, it is encouraging to see CSR policies coming to the fore as an important element in the achievement of these objectives.
News A fine (office) romance Longer working hours, more project collaboration and increased socialising out of hours is leading to an increased number of office romances according to Reed. 54% of the 2000 workers polled this month by reed.co.uk owned up to having a secret crush on one of their work colleagues. One in three admitted they had exchanged suggestive emails and texts with someone at work, even though they were in a relationship with someone else and 38% of people have had an office romance. UK workers it seems have an ambivalent attitude to office affairs and the old adage, ‘don’t mix business and pleasure’ is out of date. 71% of all respondents stated that they wouldn’t mind if their colleagues were having an affair in the office, with an overwhelming consensus (89%) stating that it was none of their business. Just 8% of workers said they would confront their colleagues if they discovered they were having an affair. For many the office is a fantastic environment to meet a future partner. 45% of respon-
dents stated it is the best place to meet a life partner. 10% of those questioned had ended up living with someone they had met at work and 7% had even married a work colleague. Further evidence that office romances are no longer the taboo they once were is that 70% of respondents said that they would not feel any pressure for them or their partner to leave the company if they started dating.
Misplaced confidence levels The Chartered Management Institute suggests that UK organisations have a misplaced confidence about their ability to cope with uncertainty and change. The findings also identify the key challenge currently facing UK employers, but suggest that little is being done to address it. Demonstrating a worrying level of over-confidence, the survey shows that, of the top concerns raised, only 38 per cent of organisations believe that ‘managing risks’ is most important. Just 32 per cent suggest that ‘developing talent’ is a significant issue, despite nearly sixty 60 per cent admitting that skills and talent management is the key challenge currently facing UK employers. And although evidence exists to show that the proportion of failed IT projects at 74 per cent is as high as in 1980 these latest findings reveal that only 24 per cent think it is a priority to ‘keep abreast of technological change’. Worse still, just 10 per cent believe effective use of ‘IT and communications’ is one of the biggest challenges for the UK. Little over one-third also think that ‘prioritising the reputation’ of their organisation is important for long-term business success. Only
35 per cent view ‘managing the impact of regulation’ as a necessity – a surprising response given the importance of corporate governance. The survey, which took into account the views of 1,175 managers, also shows that innovation is a low priority amongst UK organisations. Less than 1 in 5 believe the creativity and inventiveness is a top challenge and just 22 per cent state it is important in today’s working environment. Although this figure increases when respondents look at business priorities in 2013, at 28 per cent it is still worryingly low. The research does, however, uncover some encouraging news. Asked how effective individuals felt their organisation is at ‘monitoring the competition’ 70 per cent responded positively. Reflecting the belief that UK organisations are in touch with their customer base, 65 per cent also claimed their employer is effective when it comes to ‘scanning changes in society for its impact on the business.’ There were also some positive signs for individuals, with 83 per cent saying they ‘can’t wait to get up in the morning’, 75 per cent claiming it is easy to ‘keep positive’ and 53 per cent suggesting that, despite heavy workloads, ‘taking time for lunch is no longer a challenge’.
Call for green windfall tax The TUC is calling on the Chancellor to introduce a green windfall profits tax on energy companies and to use the proceeds to increase spending on tackling fuel poverty, improving home insulation and other environmental and job creating initiatives. The call for a profits tax is based on the calculation by Ofgem, the energy regulator, that the electricity industry will benefit from a windfall profit of around £9 billion from the free allocation of tradeable emission permits over the four years of Phase II of the EU Emissions Trading Scheme (to 2012). This is on top of a previous DTI estimate of £800 million a year in extra profits to 2007 from Phase I of the scheme. The TUC believes that this could make a major contribution to the Government’s target of eliminating fuel poverty by 2010, which has been made more difficult by energy price rises leading to more than four million households suffering fuel poverty. TUC General Secretary Brendan Barber said: “These excess profits do not flow from investment, innovation or hard work but simply result from the way that carbon trading has been implemented across Europe. While carbon trading has a crucial part to play in tackling climate change, these windfall profits will give it a bad name unless they are used to fund socially useful and green spending. “This should be the centrepiece of a green Budget which should show how the Government intends to implement the Stern Review’s call for one per cent of GDP to be used to tackle global warming.” The TUC also feel that the Government should identify new funding streams to boost the introduction of carbon capture and storage projects, and aim to host four of the 10-12 demonstration projects planned by the EU.
Business Matters issue 158 • March 2008
News Business brains More than 10 million Brits dream of leaving their job and starting their own business, according to new research. Over a third of workers have recently thought about setting up on their own, with one in five of those planning to make the leap into self employment in the next year. The average worker even spends three days of each year day-dreaming about their future business from their desk. But while 15 per cent dream of becoming their own boss because they aren't happy in their current job, 37 per cent admits the main reason is simply to earn more money than they do at the moment. More than 40 per cent are thinking of starting up their own business because they crave more freedom in the way they work and a quarter want to turn a hobby into a paying business. Rosemary French, of Business Link, which carried out the poll, said: ''It's encouraging to see how many people dream of setting up their own business to enjoy the flexibility and benefits of working for themselves." "The research also showed that nearly as many women as men are keen to become their own boss." But the poll of 2,000 Brits revealed that a third of people dreaming of setting up their own business might not get round to doing it because they are unsure how to go about it. Money is another concern with 30 per cent of aspiring bosses saying they are worried about getting into debt or adding to existing money problems. Almost half would worry about getting the money together to fund the business in the first place. Surprisingly, 45 per cent of people said they would fund a new company with a bank loan, overdraft or even a credit card. But 41 per cent of people admitted the current economic climate may make them less likely to start up their own business in the near future.
Government urged to commit The Forum of Private Business (FPB) is calling on the Government to stick by its commitment to placing small firms at the heart of its enterprise policy. Following the departure of Competitiveness Minister Stephen Timms. Mr Timms represented the Department for Business, Enterprise and Regulatory Reform (BERR) on the Small Business Forum, which meets every two months to discuss the issues and concerns shared by small firms. As part of a reshuffle following the resignation of Work and Pensions Secretary, Peter Hain, Mr Timms has been appointed Minister for Employment and Welfare Reform at the Department of Work and Pensions. At the last meeting of the Small Business Forum in January, the FPB’s Policy Representative, Matthew Goodman, was told that small businesses would play a significant role in implementing the Government’s Enterprise Framework. He urged Mr Timms’ replacement, Baroness Shriti Vadera, to keep that promise. "Stephen Timms’ departure has put the Government’s progress on the Enterprise Framework in jeopardy," said Mr Goodman. "The danger is that, with this shift in personnel, the small-business agenda may be pushed further toward the margins at a time when it desperately needs to be centre stage." Last year, entrepreneur Sean Taggart resigned from the Forum, citing its lack of real influence in Whitehall. In his resignation letter, Mr Taggart said it was ‘merely a tick box for an SME-engagement agenda’. In the past, the FPB has been critical of the
Baroness Shriti Vadera marginal role the Forum has played in developing business policy, compared to the Business Council for Britain. The latter, which includes representatives from big business, such as Sir Alan Sugar and Tesco boss Sir Terry Leahy, has the ear of the Prime Minister, the Rt Hon Gordon Brown MP. However, Mr Goodman insisted that the FPB’s direct access to BERR, which has the remit of encouraging business growth and creating competition, is more likely to bring about positive change for smaller firms. Commenting on former investment banker Baroness Vadera’s appointment, Secretary of State for Business, Enterprise and Regulatory Reform, the Rt Hon John Hutton MP, welcomed her skills and experience. "Shriti Vadera’s background in the City and at the Treasury is good news for the Department’s engagement with business," he said. "She will be a valuable addition to the Ministerial team and a strong advocate within Government for the needs of enterprise."
Being fit for employment NATIONAL charity Shaw Trust has urged the government to power up its anti sick note culture drive by giving employers guidance and incentives to participate in employee retention programmes. As Health Secretary Alan Johnson called for employers to do more to promote their workers’ work health balance at the British Heart Foundation's Well at Work Conference recently, the charity said everyone would benefit from a clear support system to reduce the 175 million working days that are lost to ill health every year. Managing Director Tim Cooper said employers should be allowed to take the lead, not GPs, who will be at the forefront of the
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government’s summer ‘well note’ pilot of changes to the current sick certificate. “As a charity dedicated to help disabled, ill, and disadvantaged people enter into and maintain employment, we heartily agree that people’s capabilities rather than disabilities be focused on,” he said. “There is no doubt that work is a prescription to good health. But it should not be left to GPs to determine whether or not a patient is able to perform the job functions required by the employer, or to advise the employer on how to make work place adjustments to allow the employee to carry on working. Employers need to be provided assistance and support to understand.”
Talking of Experts Business owners and directors from the UKâ€™s fastest growing small to medium sized enterprises (SMEs) are set to reap the benefits from the series of regional Ideal Business Show events in 2008 Research has shown that both the Thames Valley and Wales regions have amongst the highest concentrations of SMEâ€™s in Europe and that this is expected to grow. Ideal Business Show Thames Valley at Newbury Racecourse, Berkshire 29-30 April and Ideal Business Show Wales at Millennium Stadium, Cardiff on 16-17 July offer both regionsâ€™ busy owners, directors and decision makers of SMEs the opportunity to gain expert advice and explore products, services and solutions from exhibitors under one roof over two days.
Speakers in the Spotlight Aside from unique networking opportunities both events showcase a plethora of inspiring business speakers. The line up in the Innovation Theatre at Ideal Business Show Thames Valley
already includes: Greg Dyke, Director General of the BBC (2000-2004); Retail tycoon, Gerald Ratner; Rt Hon Sir Richard Needham; and female inspiration and ex BBC Dragon, Rachel Elnaugh.
Business up close and personal Harold Phillips, Director of Diamond Discovery Software used Ideal Business Show to re-launch his company: â€œThe contacts we made far exceeded our expectations. We are building on last yearâ€™s success by increasing our profile at the show by taking a space in the Expert Zone.â€? The organisers have created the Expert Zone in order to satisfy the hunger for information, expertise, and advice across 4 disciplines: IT, Finance, Sales and Marketing and HR. Will Allen, Sales and Marketing Director announced this week the British Computer Society (BCS), leading professional body for those working in IT, will be supporting the IT Expert Zone. He says: â€œThe BCS are thought-leaders for IT, one of the critical areas of interest for our audience - time poor decision mak ers of SMEs.â€? Expert Zone exhibitors receive a