Business Leader Magazine: Issue 7

Issue 7: Mar - Apr 2019

Why £50m isn’t enough Poundland founder Steve Smith says he’s looking for the next big idea

Should businesses be afraid of a Corbyn government?

Page 14

Business Leader lifts the lid on Dyson HQ move Page 16

Why is the hero CEO no longer relevant?

Page 32

businessleader.co.uk

Weston College has launched an ambitious campaign to create 600 ‘work-related’ learning opportunities in six months.

The ‘600 in 6’ campaign aims to provide students with a range of employmentfocused opportunities that in-turn will help your business to grow.

Here are some of the ways we can help to develop your workforce:

UPSKILLING AND RECRUITING NEW APPRENTICES Apprenticeships help businesses ‘grow’ their own workforce, lower recruitment costs and improve staff retention. You can recruit new staff with apprenticeships or upskill existing staff. We offer more than 70 apprenticeships (from Level 2 to degree-level) and 90% of our apprentices are kept on at the end of their programme.

OFFER A TRAINEESHIP Traineeships are work-based courses that help young people progress to employment or further training. Bringing a trainee into your business could be the first step in helping someone build a long and successful career with your business.

PROVIDE WORK EXPERIENCE OR INDUSTRY PLACEMENTS Work experience and the new longer-term industry placements (315+ hours) equip students with the tools that they need for the workplace. Providing these opportunities will allow you to guide and develop your potential workforce of the future.

GIVE GUEST LECTURES OR OFFER PROJECT BRIEFS Visit the College to talk to students and inspire the next generation of employees. Let them know why they should choose your business and sector for their future career. Or provide students with ‘real-life’ projects to work on, you’ll benefit from motivated and ambitious workers, fresh ideas and, perhaps, spot future employees.

GET INVOLVED www.weston.ac.uk/600in6 01934 411 594

EX-OFFENDER OPPORTUNITIES Our work providing education in nineteen prisons has shown us the untapped potential that’s available. By giving an ex-offender the opportunity to get back into employment, you’ll have access to this pool of work-ready talent.

RECRUITING THROUGH SECTOR BASED WORK ACADEMIES Sector-based work academies are designed to help meet employers’ immediate and future recruitment needs as well as to recruit a workforce with the right skills to sustain and grow their business. If you’re struggling to recruit for specific roles, we will work in partnership with you to devise a work academy to help you find potential new recruits.

SUPPORTING INCLUSION IN THE WORKPLACE After winning a Queen’s Anniversary Award for our outstanding inclusive practice, we have decided to share our wealth of knowledge with employers. You can support your staff or better understand your customers.

FLEXIBLE LEARNING We have developed a range of blended learning courses delivered through our online digital platform. Following an initial induction (either face to face or online), the courses are studied remotely, with the support of an online tutor.

FROM THE EDITOR

16 38 40 20 In this issue...

Latest News

2

Cover Story - Steve Smith

10

Agenda - Economy & Politics

14

BLM Fast-Track - Leon Restaurants

18

Feature - Finance

20

Funding & Growth - Debate

24

Leadership - Feature

28

SUPPORTING HIGH-GROWTH AND SCALE-UP BUSINESSES ACROSS THE UK

Feature - Retail

32

Interview - Jenny Campbell

38

Dear reader,

Growth & International Trade

40

HR - Feature

52

Your latest edition of Business Leader Magazine is once again tackling the issues around HR, growth, leadership and marketing facing the leaders of the UK’s fastest growing companies.

Survey – Rural Business

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My Working Day - Sam Smith

60

Business Leader magazine is an independent bi-monthly publication by Business Leader Limited. Our readers are business owners, senior management, key influencers and senior officials in education and government.

Inside this edition you will find a cover story interview with Poundland founder Steve Smith (page 10); an in-depth review of 30 of the UK’s leading scale-up companies (page 46), a leadership and HR review looking at business and millennials (page 52) and how leaders can best motivate their middle management (page 28).

Any opinions expressed by the interviewees in the magazine are their own and do not necessarily reflect or represent the Business Leader magazine.

You’ll also find a feature looking at the potential impact a Corbyn government would have on the UK (page 14).

© 2019 Business Leader Limited. No part of this publication may be reproduced or used in any form of advertising or promotion without written permission of the editor.

As ever, we welcome your views and if you would like to get in touch with us please call 020 3096 0020 or email: editor@businessleader.co.uk

www.businessleader.co.uk Business Leader - Inspire • Inform • Connect

Yours sincerely, Oli Ballard – Editor

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LATEST NEWS

Serial entrepreneur Marta Krupinska joins Google EDITORIAL Oli Ballard - Editor E: editor@businessleader.co.uk

Marta’s strategy and vision for Google for Start-ups will see a shift in focus towards diversity and supporting underrepresented founders.

Barney Cotton - Assistant Editor E: barney.cotton@businessleader.co.uk Joanna Jones - Assistant Editor E: joanna.jones@businessleader.co.uk

Marta comments: “As technology increasingly shapes the global community and its future, it’s key to recognise the responsibility it puts on tech entrepreneurs who build the next generation of successful companies.

DESIGN/PRODUCTION Adam Whittaker - Senior Designer E: adam.whittaker@businessleader.co.uk Luke Bennett - Videographer/Photographer E: luke.bennett@businessleader.co.uk Melissa Larkin - Website Development E: melissa.larkin@businessleader.co.uk Kirstie Wood - Digital Communications E: kirstie.wood@businessleader.co.uk SALES Sam Clark - Business Development Manager E: sam.clark@businessleader.co.uk SOCIAL MEDIA Beth Chandler - Marketing Executive E: beth.chandler@businessleader.co.uk CIRCULATION Alex Tremlett - Circulation Manager E: alex.tremlett@businessleader.co.uk ACCOUNTS Jo Meredith - Finance Manager E: joanne.meredith@businessleader.co.uk Ashley Cartman - Finance Director E: ashley.cartman@businessleader.co.uk MANAGING DIRECTOR Andrew Scott - Managing Director E: andrew@businessleader.co.uk

CIRCULATION/SUBSCRIPTION Business Leader magazine is a UK wide publication and is published six times a year. Subscription costs £90 (One year), £160 (Two years) and £240 (Three years). Business Leader, 502 Worle Parkway, Weston-super-Mare, BS22 6WA. No part of Business Leader magazine may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written consent of the editor.

Business Leader magazine will make every effort to return picture material, but this is at the owner’s risk. Due to the nature of the print process, images can be subject to colour variation of up to 15%, therefore Business Leader magazine cannot be held responsible for such variations.

If you would like to get involved or have any news you would like to share, please contact us on 020 3096 0020 or email: editor@businessleader.co.uk

Serial entrepreneur Marta Krupinska has been named as the new Head of Google for Start-ups UK.

Baroness Karren Brady quits Sir Philip Green’s business empire Baroness Karren Brady has resigned from her role as Chairman of Sir Philip Green’s retail empire.

The move comes after she publicly stated that she would remain in the role, despite the ongoing harassment scandal surrounding Green.

BUSINESS LEADER COLUMNIST:

CHARLIE MULLINS OBE CEO, PIMLICO PLUMBERS

MARK PEARSON FOUNDER, FUEL VENTURES

Award-Winning Legal Advisers to Regional Businesses 2

“We must ensure they’re sustainable, fair and diverse, and build a world in which we will all want to live. I’m so excited to lead Google for Start-ups in the UK and use the vast resources of both Google and London’s tech scene to make this a reality.”

GREG LE TOCQ - FOUNDER, CLOUD SAVINGS COMPANY WHICH OWNS VOUCHERCLOUD

0117 925 2020 vwv.co.uk Issue 7: March - April 2019

FUNDING THAT’S MORE IN TUNE WITH YOU The funding solution for growing SMEs Only by listening to your growth plans can we provide a finance solution that’s right for your business. It’s why we’ve built a team of experts across the UK waiting to hear your story. It’s how we’ve helped fund businesses with more than £350 million so far – with a further £800m standing by.

Whether you’re looking to fund growth, an acquisition (including Management Buy Outs or Buy Ins), capital expenditure or refinance existing loans, we’d love to hear from you.

Bespoke business loans from £100k up to £10m

Visit thincats.com or call 01530 444 061 ThinCats is a trading name of Business Loan Network Limited (BLN). Registered in England & Wales No. 07248014. BLN is authorised and regulated by the Financial Conduct Authority (No. 724062).

LATEST NEWS

Ros Trotman appointed as new chairman of influential property group

Persimmon announce profits exceeding £1bn months after ex-CEO controversy

Women in Property has appointed Ros Trotman as its new Chairman for the South West.

National housebuilder Persimmon has announced that the company has exceeded £1bn profits for the first time in its history.

Annual profits at the company have now increased by 13% from £966m in 2017 to £1.09bn last year. Total revenue increased 4% to £3.74bn.

In 2018, the company was caught up in a pay row when its previous CEO Jeff Fairburn walked out of an interview after his £75m bonus was questioned.

Persimmon used the opportunity to also announce that their interim CEO, Dave Jenkinson, would take over the role permanently.

Ros has been on the Women in Property committee in Bristol for four years and is a solicitor, specialising in planning law at Thrings.

With nearly 300 members and hosting over 100 events per year, Ros says she intends to use the breadth of this network to address diversity and the attraction and retention of female talent.

Our simple ethos goes a long way.

We help businesses cut through the noise and achieve results.

CORPORATE BRANDING WEBSITE CREATION ADVERTISING CAMPAIGNS CONTENT MARKETING DIGITAL AND SOCIAL MEDIA MARKETING PROPERTY MARKETING DESIGN FOR PRINT AND DIGITAL

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To find out how we can help your business speak louder, contact Peter Gibbons on 0117 956 6777 or email peter@spraguegibbons.co.uk www.spraguegibbons.co.uk

Issue 7: March - April 2019

EXECUTIVE BOXES & VIP SEASONAL HOSPITALITY THE ULTIMATE HOSPITALITY EXPERIENCE 2019

2020

Our VIP hospitality packages provide the ultimate matchday experience.

We have 18 executive boxes which offer the perfect environment for matchday hospitality. Alternatively our Lansdown Restaurant offers an exclusive premium dining experience – both offerings provide a premium seat in the Lansdown stand.

Whether you are a family or corporate company, this unique space has something to suit all requirements.

HOSPITALITY@ASHTONGATE.CO.UK 0117 963 0630

LATEST NEWS

Waitrose announce shop closures following financial troubles

ADVERTORIAL

CASTLE CELEBRATES BUSINESS LEADERS WITH GROWTH AMBITIONS

T

he South West has a reputation for being home to some of the UK’s most exciting businesses and for leading the country in some of the most advanced innovation and technology industries.

This growth, and the resulting success, has a knock-on effect on other businesses in the area, and growth is something everyone aspires to.

Castle Business Finance, based in Portishead, has been a champion of businesses since they were formed in 2016, however, the team led by Chief Executive Jeremy Coombes has been instrumental in making successful growth a reality for businesses nationwide for many years.

Jeremy explained: “A common feature I’ve found with all businesses I work with is that no matter how far they’ve come the majority will always be looking for the next growth step, the next product or reaching the next profit milestone.

“Growth is a natural goal for business leaders, however it is one that often needs investment that can take away focus from other areas of the business – mainly in terms of time and money.

Businesses will often need to secure some level of investment in order to support growth, particularly when they reach the end of the start-up phase.

“We’re being told more and more by prospective borrowers that high street banks are changing their lending criteria and it continues to be harder to secure funding through traditional

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means. We do things differently at Castle and don’t rely on the same box-ticking that the banks often do.

This means that we look at each opportunity on its own individual merit and will be able to see the potential and provide help when other doors have closed.

“By helping these smaller businesses in the delicate formative period of their trajectory, we’re helping our local and national economy and contributing to the success of UK business in a global market. The results of providing appropriate, tailored and well managed funding to a business in its early life can have far-reaching positive outcomes.

“That’s also why we wanted to be part of Business Leader’s National Awards this year and celebrate the best scaleup businesses in the country. Despite all the Brexit scare-mongering, we see the next 12 months as an exciting if challenging time for business growth in the UK, and we’re championing the business leaders with the ambition and courage to go for growth.”

For more information on Castle Business Finance, visit www.castlebusinessfinance.com or call 01275 390660.

Retail giant Waitrose has announced that it will be closing five stores across the UK, after owners, the John Lewis Partnership (JLP), decided that the sites were no longer commercially viable.

The company has announced that deals have been signed to take over shops across the Midlands, South Wales and the South West, all of which are to be completed by June this year.

Over 400 partners are employed across these five stores, and Waitrose has announced that they will be looking to avoid redundancies where possible.

As JLP anticipated, their profit before tax was substantially lower than last year at £160m, down £132.8m (45.4%). This was principally due to the significant operating profit decline within John Lewis.

Ramsdens Holdings announce acquisition of 18 new stores Ramsdens, the diversified financial services provider and jewellery retailer, has announced the acquisition of a portfolio of 18 stores.

They will trade as The Money Shop and have been acquired from Instant Cash Loans Limited for £1.5m.

Peter Kenyon, CEO of Ramsdens, comments: “We are delighted to announce this value-enhancing acquisition and welcome our new colleagues and customers to Ramsdens.

“Ramsdens has a proven track record of acquiring stores and quickly integrating them into the Group and we will now prioritise our resources on these acquired stores. We are confident that this acquisition will deliver value for the Group’s shareholders as well as the local communities where they operate.”

Issue 7: March - April 2019

ADVERTORIAL BARCLAYS

Salon Privé announce several senior appointments The Salon Privé team has announced the appointment of Ed Gilbertson as President of the Jury for the forthcoming Salon Privé Concours d’Elégance.

Gilbertson will be assisted by Adolfo Orsi, who has accepted

the position of Chief Judge, while Derek Bell MBE presides over the Honorary Awards as Chief Honorary Judge.

Salon Privé is a prestigious event that celebrates classic and super cars. It is held at Blenheim Palace.

Superdry tell co-founder he is not wanted at the company Board members at global fashion brand, Superdry have told the company’s co-founder Julian Dunkerton that he cannot return to the firm. This decision will be formally announced following a shareholders meeting in April.

Dunkerton left Superdry at the end of last year, and has been critical of the fashion chain’s marketing strategy ever since. He wants the firm to focus on selling hoodies and coats in the UK market.

You could be eligible for R&D Tax Credits You might be surprised by what can qualify as R&D (it’s not always about white coats and hadron colliders).

We’ve helped numerous businesses claim back significant sums of money in all sorts of sectors.

Here’s one bit of research you needn’t spend any more time on.

Ask us about your own tax affairs today.

Find out more: rdtc@burton-sweet.co.uk | 01934 620011 @burtonsweet | www.burton-sweet.co.uk Business Leader - Inspire • Inform • Connect

tax advisers

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LATEST NEWS

A fast track to finance Ross McFarlane, Commercial Director for Invoice Finance from Aldermore Bank says it’s time to change the conversation on Invoice Finance.

Cash is the lifeblood of any business. But if your cash remains tied up in unpaid invoices then ultimately your business may not survive.

The sad truth, which we highlighted in our recent Future Attitudes report, is that nearly a quarter of SMEs miss out on business opportunities due to lack of funding.

At Aldermore we recognise these funding challenges and want to change the conversation and focus on how Invoice Finance can play a crucial role in enabling businesses to grow.

A fast track to finance Invoice Finance is a practical way of enabling

businesses to embrace new opportunities as they happen.

The facility can be tailored to meet the particular requirements of a business, allowing it to unlock the cash tied up in unpaid invoices to release funding for progression or growth. Typically, we can provide access of up to 90% of unpaid invoices straight away.

Not only that, it can give you the confidence to take on those bigger contracts and more importantly focus on growing your business.

How we can help At Aldermore we can provide a bespoke facility which allows businesses to spread these major costs over a number of weeks.

From finding the right solution to helping understand the opportunities and hurdles ahead, we provide tailored advice and expert insight every step of the way, along with a

facility that can evolve as your business does.

Invoice Finance is increasingly seen as an important part of that funding mix for many SME and a flexible solution to secure growth.

We are seeing this sea change every day from clients who no longer view Invoice Finance as a taboo topic, or as a negative sign that a business has cashflow troubles, but instead they are waking up to its possibilities as a flexible solution to secure growth.

Perhaps you have seen it too?

Find out more about Invoice Finance and our complete business finance solutions that could help take your business to the next level. www.aldermore.co.uk/businessfinance

1 & 2 Research conducted by Opinium Research between 20 and 26 February 2018 with a nationally representative sample size of 1,004 senior decision makers in SMEs.

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Positive Energy for Business

Issue 7: March - April 2019

ADVERTORIAL BARCLAYS

How are Barclays supporting the Vallis Group?

BLM recently sat down with JJ Gagiano, Commercial Manager at Vallis Group, to talk about the assurance service company’s work in the Middle East and Africa, as well as how Barclays have helped them grow internationally.

Can you give me an overview of the Vallis Group?

We provide assurance services in the strategic points in the supply chain, focusing on Africa and the Middle East. We are an independent professional service company for international companies in those regions. Traditionally, the service that we offer is stock management, which included collateral management, and various audit services. We are essentially our customers’ eyes and ears in the region.

knowledge to customers within Africa and the Middle East.

We also provide marine and cargo services in 16 ports in the region. Our main aim is to monitor and provide supervision via our unique live reporting system, using smart devices, which provide information and live data to help our clients make informed decisions. We provide audits and inspections, as well as sampling, analysis, fumigation, pest control, and supply-chain control. We are heavily involved in petroleum and other potentially hazardous liquids, from both a stock management and analysis side as well.

We must manage a wide range of people with different backgrounds and levels of education, which provides a unique challenge. You have to be on your toes, have your ears to the ground, and make sure that you have every possible system in place in order to collate as much information as possible and provide the correct service and professional outcome.

We measure, examine and validate the conditions and the health and safety of the storage structures, products or services. We also check the compliance of the products to the standard of the country or region they are in at the time.

Our aim is to mitigate any potential risks within the supply chain. We solely work in this area, so we can provide expert local

What are the main challenges of being based in the UK, but operating in the Middle East and Africa?

It really depends which part of the region you are in. There are many different languages spoken – so finding the best way to communicate is very important. There are also many cultural differences, especially in this part of the world.

You must also be aware of the differences in the legal systems, as they affect everything from operations to health and safety regulations. There are also different labour laws, which you will also need to be aware of so that you are compliant. This is continually assessed by our team so that we are up to date with all laws and regulations across all areas of the business.

How have Barclays helped your business?

Barclays is our current account holder, so they are involved with all our customer payments, no matter where that customer is

based. They are a massive asset – in terms of their size, and their international reach.

Their corporate structure allows us to travel to Africa and the Middle East and have the confidence to operate professionally.

Barclays also have a strong presence in our operational regions – it is a well known and respected brand. They are friendly, fast and efficient – they are always available when we need them. This has been crucial to our growth in this region.

Does being a global brand with offices in some of those regions make it even more beneficial to have them as a partner?

It is vitally important – having a brand like Barclays behind you certainly helps and adds a lot of credibility to what you’re doing.

If it is the case that we must open up in a new country somewhere, we always look to see if Barclays has a presence there or not, before coming to a decision. Their relationship is very important to the Vallis Group.

Vallis Group Limited 57 Vallis Road, Frome, Somerset BA11 3EG T: 01373 453 970 E: info@vallis-group.com

www.vallis-group.com

To find out more about how we can help your business success please contact John Squier: Mobile: +44(0)7775 545 784 Email: john.squier@barclays.com

www.barclayscorporate.com

Barclays Bank PLC is registered in England (Company No. 1026167) with its registered office at 1 Churchill Place, London E14 5HP. Barclays Bank PLC is authorised by the Prudential Regulation Authority, and regulated by the Financial Conduct Authority (Financial Services Register No. 122702) and the Prudential Regulation Authority. Barclays is a trading name and trade mark of Barclays PLC and its subsidiaries April 2019 + Please note: this is a mobile phone number and calls will be charged in accordance with your mobile tariff.

Business Leader - Inspire • Inform • Connect

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COVER STORY

If you look after the pounds...

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Issue 7: March - April 2019

STEVE SMITH

I’m looking for the next billion pound business I

n 2000, Steve Smith sold Poundland for £50m – a business which now is valued at over £1.5bn. Steve was the originator of the oneprice retail concept, and despite its initial struggle to convince landlords of its value to the high street, it ended up revolutionising the sector.

WHAT WAS THE INSPIRATION FOR POUNDLAND?

In Business Leader’s latest cover story, Steve talks about the decadelong story of the growth of Poundland, and how it became a national success story.

So we thought, why couldn’t the same principal be applied but on a larger scale.

The idea for Poundland was inspired by my father’s first market stall, where lots of items were put in a cardboard box and sold for 10p.

These items were always the best sellers.

In April 1990, the pound coin had just been redesigned, so we came up with lots of ideas for names – Poundtime, Poundworld, but the name we liked best was Poundland.

THE FIRST SHOP OPENED IN BURTON-ONTRENT IN 1990, FOLLOWING A £50K LOAN FROM YOUR FATHER – HOW SUPPORTIVE WAS HE IN GETTING INTO THE WORLD OF RETAIL? I learnt so much from my father – he taught me everything I know. When he sold his business in 1989, and went to live in Majorca, all my family was due to go and live out there.

However, on the day we were meant to go out there, my wife and I decided to stay in the UK. It was during this two-week period that we came up with the idea for Poundland.

From there we started travelling the country to find products we could sell for this price point. When the first shop opened in Burtonon-Trent, we had 648 products we could sell for a pound.

Cont.  Business Leader - Inspire • Inform • Connect

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COVER STORY

WHAT SET YOU APART FROM OTHER STORES ON THE HIGH STREET? It was an idea that hadn’t been seen in the UK at that time. The customers would walk into the store and could not believe that everything was the same price. The success of Poundland was down to word-of-mouth – it was such a unique idea, that customers would tell their family and friends about this shop that sold everything for just a pound.

WHAT WAS THE BIGGEST CHALLENGE YOU FACED WHEN YOU OPENED THE BUSINESS? The biggest challenge was finding a landlord that believed in the vision of Poundland.

When I used to tell them what we were going to do, they would always be sceptical about us finding enough products we could sell for a pound. They would be concerned about having enough money to pay the rent, deal with issues such as inflation, and pay staff their wages. They told me, ‘You will never be able to do it.’

IS THIS PART OF WHAT DROVE YOU TO SUCCESS? Never ever give up. If you are doing something you believe in, stick with it, and find a way to make it work. I saw how popular that 10p box at my father’s stall was, and that excited me even more when the new pound coin came out, knowing that we could sell items for a pound, meaning that we could get even more value for money.

BY THE END OF THE FIRST YEAR, POUNDLAND WAS OPERATING FROM SEVERAL STORES, AND IT TURNED OVER £1M, WITH A PROFIT OF £6K – WHAT DO YOU PUT THIS DOWN TO? The first year that we traded Poundland, we opened Burton-on-Trent, but it was difficult to find landlords who believed in the concept. The only way to conquer this was to try and conquer the best shopping centre in the country. At the time it was a shopping centre called Meadowhall in Sheffield.

We gave our pitch to the owner and he said he had some good and bad news for me.

Good news – he loved the concept. Bad news – he had no shops. This is where doing your homework is vitally important. We knew they had a shop called Video Magic, and I believed that these types of stores were not going to last. So, I asked that if this shop became available, could I have it – he 12

agreed. Three months later, we received a phone call and this shop was available, and he let us have the store.

The rent was £120k, the service charge was £90k and the rates were £65k. However, with that in our portfolio – it was easier going back to other landlords and say that we had a store there. I used to say, ‘If it is good enough for Meadowhall, then it is good enough for this shopping centre.’

FOLLOWING THIS, POUNDLAND ALMOST WENT BUST. HOW DID YOU RECOVER THE SITUATION? It was difficult to convince suppliers to give us credit. It was a new concept, it was unproven, and we were taking on big rents on High Streets. For me, you’ve got to look after the customers, the staff and the suppliers. Suppliers are just as important as customers. If it wasn’t for my suppliers, I wouldn’t have been able to open Poundland.

“THE SUCCESS OF POUNDLAND WAS DOWN TO WORD-OF-MOUTH – IT WAS SUCH A UNIQUE IDEA, THAT CUSTOMERS WOULD TELL THEIR FAMILY AND FRIENDS ABOUT THIS SHOP THAT SOLD EVERYTHING FOR JUST A POUND.” We had just moved into a new warehouse in the Black Country. It had cost us almost £11m to build – but it was opened late.

This meant that we had to open temporary warehouses. This also meant we couldn’t get the stock out to the stores. It was January and we had about £8m worth of Christmas stock left, and there was no way we could pay for it. I was thinking at the time that if we didn’t pay for it, then we could go bankrupt.

Issue 7: March - April 2019

STEVE SMITH

up. I had two young boys and after speaking to my wife, I didn’t want to miss out on my boys growing up.

POUNDLAND IS NOW TURNING OVER £1.5BN – DO YOU THINK YOU COULD HAVE ACHIEVED THAT? We put the infrastructure and systems in place – we put the warehouses and stores in place. We laid the foundations. The main thing they needed to do was open more and more stores. Where we had 100 stores, they went on to open a lot more stores.

The dream was to turn over a billion pounds.

What I didn’t expect was that when it floated on the stock exchange, it floated for almost £1bn. We would have reached a billion – it was there to be had.

POST-POUNDLAND, WHAT HAVE YOU BEEN UP TO AND WHAT COMPANIES ARE YOU INVOLVED WITH?

I needed 60 days to pay for this stock – and they all agreed to help. That saved Poundland – we would have gone bankrupt without that meeting.

couldn’t get the stock into the stores. We started slipping financially, and where we were previously looking at making a profit that year, we ended up making a loss.

YOU SOLD THE GROUP FOR £50M IN 2000, BUT JUST BEFORE THAT YOU HAD AN OFFER FOR £20M. WHAT HAPPENED?

The supplier came back in January and I showed him the figures. He proceeded to take back the cheque and rip it up. He said, ‘thank God I didn’t do it’.

One of our suppliers said he would like to buy Poundland and presented me a cheque for £20m. I said I needed to speak to my dad about it, and I agreed to call my supplier the following day. My dad said to take the deal! I told him that I wasn’t ready – we had an office opening in India coming up, 12 new stores opening, and the warehouse was not quite ready.

We agreed to leave it until after Christmas.

I told this to the supplier, and he told me to keep the cheque and he’d see me in January.

With the late opening of the warehouse, we Business Leader - Inspire • Inform • Connect

WHAT WAS THE MAIN REASON BEHIND SELLING FOR £50M? From almost going bankrupt and turning down £20m, six months later we had a £50m cheque on the table. This was all cash as we had no debt. This time I was going to sell.

Being offered £50m in cash at the time – you must look at being a good businessman, but also a good dad. I used to leave in the morning when my daughter was asleep and get back home and she would be asleep.

This meant I missed my daughter growing

After selling Poundland, I had about a year off. Since then I have invested in quite a few companies and helped my children start some companies. Although there are Poundland, Poundtime and Poundworld, etc – customers always say that they are going to the ‘pound shop’. I tried to buy the name for many years but was not able to buy poundshop.com.

My son has now taken it online and we have over 400,000 customers and around 3500 products. He has a warehouse and customers all over the country, but also expats abroad. It’s all delivered right to their door. I work there two days a week.

I also work on tech for care homes, duty free shopping, temps.co.uk – an online recruitment agency, and I am an investor for NatWest. I also own over 1000 domain names.

I am looking for the next billion-pound business. And I believe this will be in the world of mobile payments. In ten years, no one will be using cash or cards. This is the future of retail.  13

AGENDA

‘Trotsky-esque policies that would drag Britain back to the 1970s or a new kind of leader?

Business Leader asks – what would a Jeremy Corbyn government mean for UK firms?

W

e’re all fed up of talking about Brexit – let’s face it. So we’re going to talk about Jeremy Corbyn instead.

Research published by London First and Britain Thinks suggests that the prospect of a Corbyn government is almost as unsettling for business leaders as Brexit.

Of the 104 business leaders surveyed, 38% considered the prospect of a Labour government to be one of the three greatest challenges facing UK businesses in the next five years. This was second only to the 51% who named Brexitas their biggest fear.

Many prominent business leaders have been pretty frank about the prospect of Corbyn occupying Number 10. Lord Alan Sugar has promised to leave the UK if Corbyn becomes Prime Minister and Labour themselves have even been war gaming about the potential flight of capital and financial resources should they win a General Election.

It’s easy for Alan Sugar to take off and sit on a beach due to his personal wealth but what do those running the nation’s SMEs think?

Alex Fenton is the Founder and CEO of GapCap. He comments: “It is fair to say that a Jeremy Corbyn led government would make Brexit look like a cakewalk for UK businesses. His proposed Trotskyesque policy changes would drag Britain 14

back into the 1970s. Nationalisation of major markets, corporation tax hikes and increasing tax on the wealthy alone will drive investment and innovation out of the UK. “Nearly half of all employment in the UK is from businesses with under 50 employees, and with Corbyn’s antientrepreneurial policies in place and a clamouring for international entrepreneurs, it would not surprise me to see Great British entrepreneurial innovation taken elsewhere.”

Michael Conway, of C20, is less bombastic but equally concerned.

He comments: “Critical to the success of Labour’s economic policy is maintaining consumer confidence and a stable economy to ensure businesses continue to grow and invest. Without this, companies and investment will leave the UK. “Labour has made some positives pledges such as unlocking £500bn of lending to encourage private sector investment.

However, I do not believe that Labour has Issue 7: March - April 2019

ECONOMY & POLITICS done enough to convince the business community that it will be able to maintain a favourable economic environment.

“Radical reform of business rates is concerning. Online is the evolution of retail which benefits customers through faster., more efficient and cost effective service compared to traditional retail. Increasing tax for online businesses in order to make traditional retailers more profitable will not benefit the economy.

“Scale up businesses which have the opportunity of becoming world-beating enterprises should be a focal point of business policy, and I am unaware of any Labour commitment to help those organisations.”

a clear understanding of the plan for the UK’s future economic growth.”

31% of those surveyed also expect a Labour government to take power by May 2022 and 76% confirm that their organisation is taking steps to prepare for the possibility.

Employment Rights But beyond the feeling that Corbyn might be bad for business, what policies may impact companies in the UK? As you would expect, workers’ rights are core to Corbyn’s vision for the UK. As part of this the National Minimum Wage would increase to the National Living Wage for all – estimated to be at least £10 per hour by 2020. Unpaid internships and zero-hours contracts would also be banned.

Although these policies would increase costs and restrict activities for many businesses, 52% of business leaders surveyed by Britain Thinks favoured a Labour government on the issue of workers’ rights, compared to the 32% which favoured the Conservatives.

“IT’S CLEAR THAT BUSINESS AND THE LABOUR PARTY NEED TO BUILD MUCH STRONGER LINKS, ENSURING A CLEAR UNDERSTANDING OF THE PLAN FOR THE UK’S FUTURE ECONOMIC GROWTH.” Jasmine Whitbread

Contingency planning What is interesting from the Britain Thinks survey is that Corbyn would also potentially scare away much needed private-sector investment.

Jasmine Whitbread, Chief Executive of London First, explains: “Business has been focused on contingency planning for Brexit, but a future Labour government is being added to the agenda. Labour’s intention to invest in housing and infrastructure is seen as a good thing by many but there’s real concern that the party could scare away much needed private-sector investment. It’s clear that business and the Labour party need to build much stronger links, ensuring Business Leader - Inspire • Inform • Connect

Entrepreneurship Corbyn’s manifesto paints him as the champion of small businesses and startups. The proposed National Investment Bank would ‘fill existing gaps in lending by private banks, particularly to small businesses, and provide patient, long-term finance to R&D-intensive investments.’

Mandated quarterly reporting would be scrapped for companies with annual turnover of less than £85,000.

Corbyn has also pledged to funnel investment into neglected regions and infrastructure and target late payments in both private and public sectors.

However, the emphasis on entrepreneurship and creating an ‘innovation nation’ is perhaps at odds with his keystone pledge to

“CRITICAL TO THE SUCCESS OF LABOUR’S ECONOMIC POLICY IS MAINTAINING CONSUMER CONFIDENCE AND A STABLE ECONOMY TO ENSURE BUSINESSES CONTINUE TO GROW AND INVEST.” Michael Conway

re-nationalise the rail system, utilities, and Royal Mail. In these sectors, innovation is encouraged in the public sector rather than the private.

Further, a proposed Excessive Pay Levy on companies with staff earning very high pay may deter ambitious entrepreneurs from growing a business in the UK. International Trade and Investment Regarding international trade, Corbyn’s manifesto again champions small businesses in the global economy: “We will develop an export incentive scheme for SMEs based on international best practice, and we will ring-fence Tradeshow Access Programme grants to help SMEs reach new customers around the world.” It promises capital investment schemes and other international incentives, though is fuzzy on details. Meanwhile, finance professionals warn of capital flight.

But Will McIntosh-Whyte, who manages funds for Rathbones, isn’t so sure about Corbyn’s championing of business: “If Jeremy Corbyn’s Labour took power, it would probably look a lot like a hard Brexit.

‘Domestic stocks would get hit hard and Sterling would fall. Mr Corbyn fundamentally disagrees with many economic and legal conventions that have been sacrosanct for a generation or more. The uncertainty he brings is highly likely to unsettle businesses and investors, leading to capital flight and a rise in gilt yields.”

Tax the rich Whether business leaders consider Corbyn’s policies good or bad, his government would inevitably have farreaching repercussions for UK businesses.

Basic economics – and lessons from history – have also often shown that the higher the rates of tax you place on businesses and wealth creators, the less wealth and jobs they often create.  15

AGENDA

TAX, TALENT & TREPIDATION WHY DID SIR JAMES DYSON REALLY MOVE HIS HQ TO SINGAPORE AND WILL MORE UK FIRMS FOLLOW?

By Patricia Cullen

T

he number of companies leaving the UK is growing, and with No Deal now a distinct possibility, more are expected to follow. However, none have caused more surprise than the Dyson HQ move from the UK to Singapore. But what has really prompted the move?

BLM explores the reasons.

Dyson denied the move was a result of Brexit, stating “We are now at a point where Dyson’s corporate head office will relocate there to reflect the increasing importance of Asia to Dyson’s business.”

While Dyson’s stated motivation to switch legal residence to the Far East city state lies in ‘commercial reasons’ and ‘future-proofing’ the business, political observers have linked the choice to concerns over Britain’s imminent departure from the EU. Other factors at play News of the move was made public just weeks ahead of the expected culmination of Brexit, raising questions about whether other factors were at play, such as Singapore’s free trade agreement (FTA) with the EU, which would make it easier to export goods from Singapore rather than the UK.

Brexit-supporting billionaire Sir James Dyson, a Brexit-supporting billionaire, renowned for his bagless vacuum cleaners and hand-dryers, has been challenged with allegations of hypocrisy after the announcement that he would relocate, meaning the company would no longer be registered in the UK. 16

Last year Dyson’s profits broke £1bn as investments in advanced manufacturing and research reached a new high, while revenue continued its strong growth trajectory. The company aims to be truly global in the way it conceives and manufactures technologies and products, and Dyson’s HQ move to Singapore reflects a strategy to be closer to customers and manufacturing centres.

Dyson’s CEO Jim Rowan went on to say, “We would describe ourselves as a global technology company and in fact we have been a global company for some time.”

The company currently employs more than 12,000 people around the world, with more than 4,500 in Britain. It will continue to recruit in the UK to maintain and enlarge its workforce at research and engineering sites

in Wiltshire, London and Bristol, as well as at a new centre in Hullavington, where it is spending £200m on new building and testing facilities.

Access to cutting-edge technology The Singapore Technology Centre will double in size and the Malaysia Design Centre goes into its fifth phase of development. The company vowed the relocation of the HQ will involve only two job moves, with CFO, Jorn Jensen, and the general counsel, Martin Bowen, both moving to Asia.

Dyson is not alone in moving its HQ away from the UK. The last couple of years has seen Panasonic relocating to Amsterdam, where Sony will soon follow, and ferry company P&O shifting registration of its vessels to Cyprus. Japanese retailer Muji is also rumoured to be moving its European HQ to Germany.

Issue 7: March - April 2019

DYSON

out of the world’s top 100 tech firms have operations in the city. In 2018, EDB anchored investments committing $10.9bn in fixed asset investments and $6.2bn in total business expenditure per annum.

Access to highly-skilled workforce Singapore also consistently ranks high in country classifications. The 2017 Bloomberg Innovation Index places the country sixth in the world, just ahead of Japan and the US, and Singapore ranks second among 190 economies in the World Bank’s Ease of Doing Business 2018 report. The innovative working environment, alongside a large local pool of talent reinforces the country’s reputation as having one of the most productive and motivated workforces in the region, landing third place in the IMD World Competitiveness Yearbook, which details the most competitive economies in the world.

Backed by its advanced manufacturing capabilities and highly skilled workforce, Singapore can play a leading role in autonomous vehicles and smart mobility, and this is another motive for Dyson committing to the nation, following the decision to produce the Dyson electric car in Singapore from 2020.

International relocation nothing new But what makes Dyson unique amongst these brands is that it’s a British born business. These moves may not be solely Brexit-related, however, as there is nothing new about big businesses relocating their corporate HQs. The United Nations Conference on Trade and Development welcomed the arrival of a world market as far back as 2003, emphasising the relocation of iconic American companies such as Burger King (to Canada), Budweiser (to Belgium), and Lucky Strike (to the UK).

Singapore’s competitive corporate tax rates If Brexit is not a defining reason, then what are the benefits of moving? What is the pull of Singapore?

The country is rapidly becoming Asia’s business epicentre, has been consistently hailed as ‘the land of opportunity’, and a number of international corporations such as Nielsen and Procter & Gamble have announced plans to establish a presence Business Leader - Inspire • Inform • Connect

there. Dyson is concentrating on Singapore, not because he is thinking short-term, but the opposite. He understands that the growing market for his company’s products lies in the Far East.

International companies who headquarter themselves in Singapore can also see corporation tax (currently 17%, compared with 19% in the UK) fall to 5% or even 0%, thanks to lengthy tax breaks and generous incentives for those who create jobs. There are no capital gains or inheritance tax in Singapore, while in the UK inheritance tax is charged at 40% on anything above £450,000.

Besides having one of the lowest corporate tax rates, Singapore is also considered by many as the gateway to Association of Southeast Asian Nations (ASEAN). It is a first-class technology hub and has become a preferred destination for businesses looking to springboard into the region’s developing markets, and according to Singapore’s Economic Development Board (EDB), 80

Gateway to Asia The country is strategically located at the crossroads of the main trade and shipping routes of the world, including the major sea route between India and China. This puts Dyson on the doorstep of China, the world’s biggest electronic vehicle (EV) market, without exposing the company to China’s tight trade controls and lax intellectual property protections.

In spite of Singapore’s small market size, with a population of just over five million, it has secured 22 bilateral and regional FTAs and has recently signed the European UnionSingapore Free Trade Agreement (EUSFTA) and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

These effectively unlock all of the world’s major markets to Singapore-based enterprises, which is all the more appealing as the US-China trade war shows no sign of waning.

It seems that the way forward is not to discredit businesses for daring to relocate parts of their operations overseas, but to generate a healthy and attractive environment which enables Britain to compete.  17

BLM FAST-TRACK

LEON RESTAURANTS AT FOREFRONT OF HEALTHY FOOD REVOLUTION

F

ounded in 2004 by former Bain & Co management consultants Henry Dimbleby (48) and John Vincent (47), along with chef Allegra McEvedy (48), Leon has become one of the fastest growing restaurant brands in the UK, taking advantage of the vegan and healthy eating zeitgeist.

The company recently employed its 1000th member of staff, opened its 63rd restaurant and is also now operating in the USA. Its growth has been fuelled by funding from Active Private Equity and Spice Private Equity, with SPE becoming the company’s largest shareholders in May 2017 following a £25m deal.

Regarding its current financial performance, Leon currently operates revenues of £58.4m (2017) and is set for huge growth in 2019.

Lack of healthy fast food Leon Restaurants’ journey began when Henry and John were travelling up and down the motorways for meetings across the UK. Shereen Ritchie, Operations Director for Leon Restaurants explains: “John and Henry had become completely disillusioned with life as consultants, travelling up and down the country, stopping at service stations and eating bad fast food.

“They ended up going to sleep because it made them tired and then they would wake up feeling fat. They were not getting the opportunity in their fast-paced lives to 18

be able to live well and eat well. There was nowhere that would offer them something that was convenient, tasty, healthy, and that was good fuel to put in their bodies. So, they decided to start Leon.”

The company opened its first restaurant in Carnaby Street, London, in 2004, with a second restaurant opening a year later in Ludgate.

Fast forward to 2014, and the chain now had 20 restaurants and an impressive menu, featuring an extensive array of locally-sourced, vegan and vegetarian food.

The company also has a range of vegan cookbooks, inspired by their founders.

Going global Once it was an established name in the London and UK food scene, the company started to look internationally.

Shereen comments: “A big milestone for us was in the summer of 2016 when we went

to Schiphol in Amsterdam, and opened our very first international restaurant. We now have nine international restaurants: five in the Netherlands, two in Norway, one in Gran Canaria, one in the USA, and we’ve also got one in Dublin, which is going to open in spring 2019.”

Arguably their most important new market is the USA, where it is traditionally quite difficult for UK restaurants to succeed.

The company will be opening its second restaurant in the country later this year – joining the first in Washington DC. However, international expansion hasn’t been without its challenges.

Shereen continues: “It can be really hard when you’re going into new territory. For Leon it’s not easy because we want to source everything locally – we’re not going to suddenly just start shipping everything.

So, this means that the supply chain must Issue 7: March - April 2019

LEON RESTAURANTS

something that vegans will absolutely love.

“And not just vegans – we want to make everyone happy by having lots of plantbased foods, and show people that you have more options out there.”

Capturing the vegan zeitgeist The rise of veganism has been an important part of the business’s strong growth, with the company reporting a 21% increase in vegan sales between January 2017 to January 2018.

It’s not only capturing the vegan zeitgeist that has demonstrated Leon’s commitment to innovation and understanding the mood of the consumer.

Shereen explains: “I truly believe that we’re at the forefront of innovation - we do set the trends, we don’t just identify them. We’re working towards helping people understand the importance of plants tasting amazing.

“We really want to revolutionise fast food, but we also want to show that there’s a better way that we can do business. You can be successful and you can still be kind to yourself, you can be kind to each other, you can be kind to the planet, and we can prove that this model works.”

What does the future hold?

With the casual dining sector undergoing a

metamorphosis, it’s interesting to see how Leon view the future.

Shereen comments: “There has been a shift in business that has come along with an increase in knowledge about sustainability and the planet. I think people understand that big businesses have a responsibility.

It isn’t just about making lots of money, it’s about a responsibility to do it in the right way. That has become far more prolific now than it was years ago and it’s going to shape the future.”

Shereen says that people’s attitudes to food consumption will also continue to change.

She continues: “I think that people are more willing to eat out and in London we’ve seen a massive growth of breakfast time delivery.

This has revolutionised the way people are eating, as well as the emergence of Deliveroo, Uber, and Just Eat. “The standard of food is improving too.

There have been some good examples over the past years, as well as some shocking examples where people failed to innovate because they failed to understand how people are becoming more advanced in their knowledge of food and so want different things to what they used to want.

This trend will only intensify.” 

be done pretty much from scratch and it makes it really challenging.

“We don’t want to put things on boats or an aeroplane, because that isn’t sustainable.

“Our aim is to be able to support local communities. We want to be able to support everyone eating well, living well, in the right way and doing the right thing.”

Double digit growth With an ever-growing network of restaurants appearing in the UK and across the world, Leon has reported exponential growth over the last few years.

Shereen comments: “The financial growth of the company has been incredible. In 2018, like-for-like sales were up 15% from the year before. We have gone into 2019 with double digit like-for-like growth again. Our success has come from wanting to do the right thing. We don’t just make something that will make us lots of money, we like to make Business Leader - Inspire • Inform • Connect

19

FINANCE

HOW CAN YOU LEVERAGE FUNDING OPTIONS TO SCALE-UP? The Experts: Peter Cowley Invested Investor Karen Holden A City Law Firm Alice Hu-Wager British Business Bank Oliver Woolley Envestors LLP Alex Sleigh Newable Jenny Tooth OBE UKBAA

B

LM was the media partner for the 2019 Business Funding Show. Held at East Wintergarden in Canary Wharf, it brought together some of the UK’s most prominent investors, professionals and business leaders to pour over the latest trends shaping the funding market.

Considering the current economic challenges, are investors likely to have less desire to invest in businesses?

Here are some key takeaways from the show.

“One interesting trend is that there are many more entrepreneurs now than there were ten years ago, and there isn’t enough capital to go round for everyone. So, what we do as investor is end up backing the good people who have been there and done it. I’d rather invest in an entrepreneur who has failed, than somebody who hasn’t tried it before.”

Stephen Hemming Menzies Law

What role is British Business Bank playing in the funding eco-system?

Nigel Walker Innovate UK

Alice Hu-Wagner: “It is a wholesale bank and we ensure there is enough funding available to keep the whole eco-system moving. You can’t ask us for money, but we help to make sure the people that you do ask for money, have it.

“Awareness around different funding options such as alternative finance is actually pretty low amongst SMEs, so our job is also to inform businesses about these options and how they can leverage them.”

20

Peter Cowley: “Not from my perspective, no. I receive about 300 cold proposals a year which are then screened, and I end up investing in about six or seven of them. This will not change at the end stage, but what does worry me is that capital availability may slow down.

Jenny Tooth OBE: “I do agree with Peter that investors will not change their approach due to the current climate and they will continue to back good entrepreneurs.

“When angels invest, they’re looking for businesses that can scale, so it’s important that funding options at the later stages in the cycle are also well funded.

Issue 7: March - April 2019

FEATURE

BUSINESS LEADER COLUMNIST

Why don’t more UK businesses build for the long-term and think in the billions?

Mark Pearson is the founder of investment fund Fuel Ventures, which specialises in early-stage companies and offers a Londonbased incubation studio to its start-ups.

The investment fund recently closed a £20m round from multiple high net-worth investors and corporate institutions, which span China, the Middle East and Europe.

He previously sold Markco Media (parent company of My Voucher Codes) to the publicly listed mobile payments firm Monitise plc in a reported £55m deal.

In his first column for Business Leader Magazine, he talks about the trend for many UK businesses to build quickly and sell If I asked you to name some of the world’s largest or most valuable brands, which names would spring to mind first and foremost?

Google? Definitely. Apple? Almost certainly. No doubt Facebook, Microsoft, Amazon and Twitter would also be on the list.

They were all founded in the United States.

“One issue we’re still not tackling is that 68% of investment is still in London and the South East. We need more investors operating in the other regions, to help build their local economies.”

How do we encourage more women and people from diverse backgrounds to become part of the investor scene?

Jenny Tooth OBE: “Around 15% or 16% of the investment population are women and we’re working hard to encourage more females to become investors. It’s true that the more female investors we have the more female led businesses will receive investment – which is good for the ecosystem.”

Which sectors are most active for investors?

Alex Sleigh: “Office space and the flexible working market and the data that surrounds it is a growing market for us. We’ve funded around ten companies operating in this space. Alongside this it’s about innovation and that covers all sectors.”

How can businesses take advantage of grants and loans that are available?

Nigel Walker: “Innovate UK runs two grant funding programmes. One is focused around the industrial strategy and looking at the big issues around AI, infrastructure and transforming construction.

That’s not to say that UK businesses haven’t had their share of global success – Royal Dutch Shell, the Legal & General Group and BP are among the largest companies in the world.

However, SMEs have typically been and still are the engine room of the British economy, accounting for 99.3% of all private sector businesses at the start of 2018.

So why aren’t UK entrepreneurs competing with their US counterparts?

Historically, this has come down to a lack of funding. Business owners will often launch start-ups with their own personal investment or will raise a small amount of money in their first round of funding.

However, growing a business is difficult and expansion is expensive.

Many businesses struggle to access the cash needed to develop, leading many to become stuck at SME level.

Last year, research from Liberis revealed that more than half of UK businesses are unable to access the funding needed to grow, attributing this partially to the lack of understanding of available funding.

Small business education is desperately needed; entrepreneurs need to be made aware of the funding options available to them. And the reality is that there has never been more funding available.

One option that we are increasingly seeing is equity investment – money that is invested by way of buying shares. It’s often overlooked by founders, but offers some serious benefits to small businesses and is generally encouraged by investors after four to six years, if managed professionally.

Cont.  Business Leader - Inspire • Inform • Connect

21

FINANCE FEATURE The time and scope of this funding programme doesn’t work for everybody though, so we have another competition called SMART and this responds to the challenges business people put to us and funds the best innovation led projects across the UK.” How do we solve the problem of investments being centralised around London and the South East?

Alice Hu-Wagner: “I recently attended an event in Bristol and asked entrepreneurs where they typically go to look for funding.

They answered London.

“Something is broken outside of the golden triangle of London, Cambridge and Oxford and it’s up to us an investor community with the universities and business leaders in the cities outside of London to fix it.”

How can you tell between a real investor and one who is just there for a free lunch?

Peter Cowley: “What you need to do is find a deal lead and he or she will act as the conduit that organises the investors and will save you time.

“It’s also important not to get investment from a single investor as he or she can hurt

you in the long-run. You’re better served getting investment from smart angels, not so smart and also dumb investors.”

as well as ensuring all of the founders are aligned and in agreement about the potential investment.”

How is best to prepare your business for investment?

How may the way your business handles data impact any investment?

Karen Holden: “Fundamentally, preparing your business for investment is about being open and honest.

Karen Holden: “There is also a requirement around GDPR now and ensuring the way you handle data meets regulations. Investors will be looking at your business’s GDPR policies and they don’t want to acquire a company that isn’t compliant. This means you need to look at contracts and processes.”

“If you do have skeletons in your closet talk to your lawyer or tax advisor. Prepare an executive summary for your investor on why there was an error and how you resolved this.

“Making sure you own any IP and that it’s available in the UK is important too, as it will show an investor that the business has collateral.

“There are also lots of ways you can complicate a business through legal and business structures, but you won’t dazzle an investor unless your business has a simple structure.

“Finally, you will need very concise legal documents and a clear plan of your business journey, and you need to be prepared for tough questions about the financial performance of your business;

What is EIS investment and how can it help businesses?

Stephen Hemmings: “It was introduced by government to incentivise investors with tax relief and recognise the risk they’re taking.

You get income tax relief up front and you can also receive tax relief on exit.

“SEIS is for smaller companies and you can claim up to 50% tax relief up front. You can also claim up to 72% back, should the investment go wrong.

“EIS is for larger deals and you can claim 30% tax relief up front.” 

What is driving the US interest in UK firms?

By Rob Crews, Partner, Momentum Corporate Finance The US has been, and remains, a key source of purchasers for UK businesses.

Why is this?

There are many reasons which drive the high appetite of American business for UK targets, and which also attract UK businesses to sell to US corporations.

Deep pockets – American businesses are often successful in winning international auctions due to their ability to pay premium prices. This ability is underpinned by the fact that US businesses are often highly valued relative to their international competitors and so can pay higher prices without diluting shareholder value. Also at present the exchange rate is at a relatively low level given the current uncertainty with Brexit – as such the American dollars are going further when buying sterling.

Europe – For an American business keen on expanding into Europe, the UK is often seen as an ideal Europe and we are not seeing any reduction in appetite from Americans – at least not yet!

A liberal and open market – The UK is not perfect, but it does have 22

an economy which is open to the rest of the world and which, by global standards, is transparent. It also has a robust legal system and is relatively free from onerous bureaucracy and corruption.

Will it change?

Indeed, of the sell side deals we have completed since 2005 around 75% have been cross border and the significant majority of these to American based organisations.

Going forward, we do not see any reasons why these trends should not continue.

Issue 7: March - April 2019

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FUNDING & GROWTH

How can taking on debt and equity

accelerate growth in your business?

W

ith a plethora of funding options available to businesses looking to grow and scale-up, it can be a challenge ensuring you are choosing the right option.

The two most traditional methods for funding growth are debt, typically in the form of a loan, or by giving away equity in your business in exchange for funding.

But what are the trends that business owners and commercial teams – operating companies between £1m and £50m – should know about? To help, BLM has spoken to the leading operators in this space.

The Experts: Alistair Hay Debt Advisory Partner – Cavendish Corporate Finance Stuart Andrews Head of Corporate Finance – FinnCap Angus Grierson Managing Director – LGB Corporate Finance Andrew Ferguson Partner – Maven Capital Partners Stephen Sacks Founder – Funding Nav Paul Swaddle Founder – Pocket App Rob Shand Co-Founder – Tots to Travel

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Issue 7: March - April 2019

DEBATE

Alistair Hay Cavendish Corporate Finance

Stuart Andrews FinnCap

Angus Grierson LGB Corporate Finance

What are the trends around taking on debt or equity that business owners should be aware of?

Alistair Hay: “The availability of different debt financing options has never been higher.

They include challenger banks, debt funds, alternative lenders including Peer2Peer lenders, and crowdfunding as well as asset backed lending options.

“Interestingly, leverage levels are back at pre-financial crash levels but right now they are not exceeding previous highs. There are also some early signs of lenders restraining appetite to certain sectors such as retail.”

Angus Grierson: “At LGB Corporate Finance, we believe that 2019 will see a sustained rise in smaller companies using debt to fund their growth as investment opportunities widen.

“On the private equity (PE) side, record levels of dry powder have resulted in SMEs being able to secure higher valuations as PE firms try to secure the best investments for their portfolios.

“This is in contrast to public markets, such as AIM – the junior market for companies which has fallen by around 10% over the past year.

In January this year, we saw a considerable slow-down in terms of secondary fundraisings and there were no IPOs, suggesting that at the smaller end, public markets are becoming increasingly jittery ahead of Brexit.”

What are the advantages of taking on debt to fund growth?

Stuart Andrews: “One of the key advantages of taking on debt to fund growth for a business owner is they do not have to dilute the equity in their business. That also means there is no claim from lenders on future profits over and above repayments on the debt obligations. It’s also an unobtrusive form of business funding.

Business Leader - Inspire • Inform • Connect

Andrew Ferguson Maven Capital Partners

Stephen Sacks Funding Nav

“Meanwhile, there are tax advantages to borrowing rather than raising funds by giving up equity. Interest on debt financing is tax deductible whereas dividends to shareholders must be paid after tax so ultimately cost the business more.

“The Capital costs are lower too compared with equity loans.”

Andrew Ferguson: “There are many advantages to taking on debt to fund growth.

Taking on debt can be cheap, utilising low interest rates and a wide range of lenders that can provide debt financing, in turn making it easier to find a suitable agreement.”

Angus Grierson: “Debt finance is relatively cheap at the moment. If your business is generating cash and profits, it is worth considering as it generally does not involve giving up any ownership in a business and in the long term it can therefore be more efficient for entrepreneurs. It is typically easier and quicker to raise debt than equity, but if used inappropriately it can be damaging.”

What are the advantages of using equity to fund growth?

Stuart Andrews: “Debt must be repaid whereas equity finance provides the business owner with a greater degree of flexibility albeit at the cost of giving up some control of the business. The contractual nature of the repayments obligations of debt finance will also by definition limit what a business owner may be able to do, whereas equity finance is, at least in theory, limitless.”

Andrew Ferguson: “The biggest advantage of using equity to fund growth is of course that companies are not subject to fixed re-payments. In turn, businesses have more flexibility to manage and allocate capital in the short term.”

Paul Swaddle Pocket App

Rob Shand Tots to Travel

Is there a stage in a business where debt is a better option and vice versa?

Alistair Hay: “Debt requires an element of visibility over a company’s revenues to service future obligations and therefore very lumpy or unproven revenue models are probably not well suited to this type of finance. Start-ups and businesses that haven’t made a profit yet are very difficult to leverage with traditional banking products such as term loans, revolving credit facilities or overdrafts.

“For a business with earnings below £1m EBITDA (Earnings before interest, tax, debts and amortisation) would probably have to rely more upon trade finance and asset-backed lending solutions such as invoice discounting.

“If a business had sufficient scale, earning above £1m EBITDA, and has the ability to operate within required controls and covenants, then debt may be the preferred funding option to equity as it is cheaper and the business owner doesn’t concede control of their company through equity dilution.”

Stephen Sacks: “The question is far more complex than deciding between debt or equity nowadays since there is a morphing between the two in the market.

“PE will load any equity deal with debt which the business will need to repay. There are also several venture debt players in the market who will offer high yielding debt with or without an equity kicker. Some deals can also convert from debt into equity upon hitting deal milestones or visa versa.

“Motivated investors may offer capital that is equity or debt in name only but in reality is in effect a subsidy. These can be the most attractive deals of all. Sometimes they are also your potential exit.

Cont. 

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FUNDING & GROWTH “My advice would be to forget the traditional definitions of debt and equity and instead focus on finding motivated stakeholders who want to play a part in the future of the enterprise.”

What experiences have you had as a business owner, when it comes to funding growth?

Paul Swaddle: “When we started, we initially took some equity from friends and family.

This was to get us going because at that stage we didn’t have the capital to launch the company.

“Later in our journey we also looked at debt financing to help the company grow and we undertook a round of a crowdfunding finance which we found surprisingly easy. However, that did come with the normal constraints of requiring personal guarantees from the directors.

“At a later stage we also utilised a bank facility that was underwritten by the government and that enabled us to access money that otherwise the bank would not

CASE STUDY:

DEBATE have offered. But the course still came with personal guarantees.

“The last round of funding, two years ago, was equity and carried out via Seedrs. While the process was not without its problems it did offer us a route to finance but also gave us 400 shareholders who can become advocates and Ambassadors for Pocket App.” Rob Shand: “Debt was a good route initially, when smaller sums were required and in shorter time frames. We found the nontraditional route to be far more compelling than secured bank lending, which was essentially unavailable. The banks have such a long way to go and are being left behind.

To that end, we used crowdfunding through Funding Circle twice which was simple and quick.

“Experiencing rapid growth, we needed a more significant capital injection and arranged a seven-figure equity raise from a large Venture Capital team based in Berlin.

The deciding factors were the size of the capital required and the shared vision for rapid international growth.

Q 26

“Next stage deciding factors are now all about fit with our vision and brand and who can help us take the next step up in revenue and growth – all the way to exit.” 

“THE BIGGEST ADVANTAGE OF USING EQUITY TO FUND GROWTH IS OF COURSE THAT COMPANIES ARE NOT SUBJECT TO FIXED RE-PAYMENTS. IN TURN, BUSINESSES HAVE MORE FLEXIBILITY TO MANAGE AND ALLOCATE CAPITAL IN THE SHORT TERM.” Andrew Ferguson

How do you secure the right investment for your business It’s in the growth stage and Cyndi Williams – its founder – talks to BLM about her experiences of taking on investment.

uintech is a consumer- led mobile medical app and biodata company. It leverages the experience of people with insulin-treated diabetes to co-create machine learning algorithms that provide personalised self-care guidance and advance diabetes research.

They understood what we were trying to achieve, were relatively light on due-diligence, kept the deal simple and have since stood back and let us get on with it without interference. So for a VC-backed deal, it has been the right path for us.

You are currently trying to secure investment into the business – can you elaborate on this? Are you looking to take on debt or equity?

We’ve already raised £1.3m in grants and equity financing from committed and experienced angel investors.

biggest fundraising challenge.

Many of the traditional life sciences investors are patient, but they’re still working out how to evaluate digital-only medical device companies like ours.

We’re now looking to raise another £2m in equity financing to launch our product in the UK and Europe and enter the US.

They often evaluate us using general tech investor criteria, such as paying customers and revenue, but if you’re doing deep R&D like we are, those milestones are further off than they are for a food delivery or ride-sharing app. On the other hand, the general tech investors often think we’re taking too long, and they don’t like the perceived risk of medical device regulatory compliance.

How have you found this process? What have been the challenges?

Finding visionary and patient investors who are up for a journey like ours is our

Companies like ours sort of fall between two stools – too much science and R&D for tech investors, and too digital for life sciences investors.

Issue 7: March - April 2019

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LEADERSHIP

How can you build a high performing middle management team?

O

ne barrier to growth for businesses looking to scale-up is ensuring that middle-management teams are motivated, productive and aligned with the company’s ambitions.

Having a middle management team that just goes through the motions or is disjointed will hold back growth.

The influence of the middle manager Often described as the ‘treacle layer’ – a recent report from Ricoh UK described the average middle management team as often resistant to change and not as motivated as those above and below them in the business.

Rebekah Wallis, Director of People and Corporate Responsibility at Ricoh UK explains: “While junior employees are often eager and comfortable to learn, this isn’t always the case with middle managers.

Enter the treacle layer.

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“For business leaders often hungry for change in order to reduce costs and achieve greater productivity, encountering this sticky resistance from senior leadership can be a major problem. Change management, the red thread running through every transformation project, needs to be focused especially on this group, and with the right support mechanisms in place.”

So, how can a business leader empower these employees to change their behaviour and support collaboration?

Gone are the days of the command and control, regimented office hierarchy, where barking orders leads to results.

Dean of Bath Business School at Bath Spa University, Georgina Andrews comments: “Business leaders should understand and communicate to middle managers that they are also leaders.

How to empower middle management Men and women in these manager roles often experience the difficulties of the top and lower ends of the business. Senior leadership have overall responsibility for the business, but it is the middle management who often carry out the day-to-day duties to keep the business moving forward.

“Middle managers, teams and even individual employees all have opportunities and the power to facilitate change as well as provide stability. Not all these changes may be intentional or predictable. Business leaders are the creators of the organisation’s ethos, whether this has an ‘atmosphere’ of control and fear, or alternatively one of unlimited possibilities and development.”

For this central part of the business to move as fluidly as possible, empowerment could be the answer.

Rebekah Wallis agrees: “The first step to empowering your staff is listening to them. If design solutions which maximise

Issue 7: March - April 2019

FEATURE

workers’ productivity are to be implemented successfully, there needs to be an understanding of challenges they face and how the workplace affects this. Early involvement in the change process will ensure staff feel their point of view is being considered and result in support for new processes and technology.

“Empowering staff can also mean introducing them to specialists who can help them overcome their own knowledge gaps and upskill them. This is particularly important as work becomes more specialised and businesses find they can’t do everything themselves. It also allows managers to scale teams up or down according to need, making headcount more agile.”

How senior leadership can inspire change Empowering management can lead to better results in productivity, output and ultimately, the bottom line – but this cannot be done by just being good at listening and reacting to their issues or concern. A leader must take charge of the business and its direction.

In order to achieve this, the middle management team must be inspired to achieve the business goals of the company.

“IT IS IMPORTANT TO BE AWARE OF WHAT MILLENNIALS EXPECT FROM THE WORKPLACE, THE PSYCHOLOGICAL CONTRACTS THEY DEVELOP AND THEIR NEED TO IDENTIFY MEANING AND PURPOSE.” Rebekah Wallis

Business Leader - Inspire • Inform • Connect

The best way to keep the manager motivated is by being the role model of a manager to them.

In essence it comes down to being an inspirational leader who sets a clear direction for the business and puts their staff first.

By helping relieve pressure on under-trained, overworked staff, you can understand where they need help – and if necessary – place them on training courses to learn the skills or even teach them in person through one-onone meetings.

Joe Crossley, CEO of national training provider Qube Learning comments: “It’s vital that leaders have a clear plan of what they want their business and their team to achieve. This should not only set out the structure and the objectives of a company, but also include targets that will stretch and challenge employees.

“It’s important that the people around you see that you care; it’s ok to show emotion if things don’t go as planned and celebrate when things do. It’s crucial that every team understands why you do what you do, what motivates you, and how you got where you are.

“Creating an environment where people can grow and develop is also important – it’s okay to make mistakes, but don’t make the same mistake twice. Leaders should surround themselves with people who want to learn and develop, but also people who can teach. Learn from each other, listen to different views and don’t be afraid to change your mind!”

It’s clear that the modern business leader has a lot to think about when it comes to inspiring middle management, but what can be done to help accelerate growth?

Role of technology and modern working As with all sectors and all sizes of business, the role of technology and the introduction of flexible and tailored working environments can help build a high performing management team.

Technology needs to be introduced correctly, with adequate training and explanation on how it will make these employees’ lives easier to manage their own teams.

Rebekah comments: “A recent study from Ricoh found that while 98% of employees are enthusiastic or excited about the introduction of new technologies, a third don’t feel equipped to get the most from traditional software, let alone new technologies such as AI. “If you introduce new processes, technology or workplace solutions, you need to ensure employees understand why they were introduced, how best to use them, the benefits and who to ask for help. Doing so will mean people are more able to change their behaviour and the changes will stick.”

It is these changes that can stop this ‘treacle layer’ and make a management team more dynamic and successful in their individual and collective roles.

However, it is not just technology that is making the modern workforce more dynamic.

Flexible working hours and remote working are just some of the new ways in which the workforce is operating today.

Cont.  29

LEADERSHIP FEATURE

Rebekah continues: “Mobile and flexible working is no longer about working from home. Rather, it’s about giving employees the right tools and technology to work out how and where they will be most productive.

New collaboration technology may also be required, such as video conferencing services and interactive whiteboards, which enable teams in different locations to collaborate seamlessly.”

Through technology, whole management teams can keep in contact anywhere on the planet at their own leisure. Open forums where teams can ask questions and gain valuable feedback on a regular basis can make a leader seem more present and approachable for advice.

Understanding the workforce Another recent development within the modern workplace is the rise of the influence of millennials.

Many of this generation are now starting to take positions of seniority in the majority of businesses, so knowing how individual members of your team operate is vitally important. Generational gaps in management are becoming common and understanding their needs as leaders of their own teams is needed if the overall vision of the company is to succeed.

Georgina Andrews comments: “It is important to be aware of what millennials expect from the workplace, the psychological contracts they develop and their need to identify meaning and purpose. Some of the responses required are unsurprisingly similar to what managers and leaders should have already been addressing - trust, communication, talent management and responsible behaviour.

“TRAINING AND DEVELOPMENT ENSURE THAT STAFF FEEL VALUED AND GIVES THEM REASSURANCE AND CLARITY AROUND THE FUTURE OF THE BUSINESS. AN EFFECTIVE TRAINING AND DEVELOPMENT PLAN SHOULD ENABLE STAFF TO GROW AND EVOLVE WITH AN ORGANISATION.” Joe Crossley

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“Failure to integrate and engage millennials could lead to skills shortages and have a negative impact on business growth and succession planning.”

Dragons’ Den star and prominent investor Sarah Willingham agrees with this sentiment, and as businesses accept more millennials into this type of role, then more must be done to give them the platform to drive the company forward.

She comments: “I don’t think the characteristics of a leader have changed, but the environment within which we operate changes all of the time and we need to adapt. Leaders must be self-aware decision makers, that are strong, passionate and inspirational. This hasn’t changed.

“However, today we communicate in a different way than we used to and we need to use the tools available to us to reach our audience in a way they want to be reached.

The millennials want open and approachable leaders.”

Keeping them up-to-date with the latest management tools and training is important to keep ahead of the competition.

Rebekah explains how this can lead to a step change at a company. She comments: “Encouraging and empowering staff to adopt new processes may require training.

The availability of a broad range of different courses can also instil a culture of continuous improvement and help to unlock a ‘growth mindset’.”

Joe echoes these thoughts, as giving the right training and support can lead to a high performing middle management team.

He concludes: “Having a training and development plan is key to any business and should run alongside corporate and commercial plans.

“Training and development ensure that staff feel valued and gives them reassurance and clarity around the future of the business.

An effective training and development plan should enable staff to grow and evolve with an organisation.” 

It’s not just satisfying the millennials in this role that will lead to a high performing team, but all generations – all of which are taking advantage of new age working life and the technology afforded to them.

Joe Crossley comments: “I don’t think the core principals of business will change for any generation, but communication methods and delivery models will certainly change in the future. In terms of expectations of millennials, it’s always good to have ambition, however, in my view the leaders who tend to get the most respect from their teams tend to be the ones who have rolled up their sleeves up and shown commitment and drive to progress. I wouldn’t want that to change for any generation.”

What can you do?

Middle management is a key element to keeping a business ticking over and stimulating growth, regardless of their generation.

Issue 7: March - April 2019

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LEADERSHIP

Is the age of the hero CEO coming to an end?

How is leadership changing?

I

s anything more important in business than leadership? You could easily make an argument that there isn’t, but how is leadership changing and what are the common traits that successful leaders possess?

In a wide-ranging interview with Business Leader in late 2018 Veronica Hope-Hailey Dean of the University of Bath’s School of Management and author of a major piece of research that looked at trust in leadership post-global financial crisis – spoke frankly about how leadership is changing and how the time of the hero CEO is very nearly up.

Veronica said: “From a personal perspective, the leaders at the top of the successful organisations all had some common traits.

“Firstly, they saw themselves as creating a legacy for the next generation and they managed to successfully show that you may need to take tough decisions in the shortterm to benefit long-term sustainability for everybody.

“Secondly, they saw themselves as serving their workforce and community. They had a different mindset to the more aggressive form of superman leadership that had come before.

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“Thirdly, the successful leaders had a sense of history and that they were here for the long-term. They also tended to spend a lot of time out of their office – engaging with staff and customers. They were all highly relational people.”

She went on: “Interestingly – highly trusted organisations also put less emphasis on spin and much more emphasis on honest communication. Even if they were telling staff unwelcome news, they were showing integrity.

“Do you want uncomfortable truths or comfortable lies? – is a good way of summarising how they view information.

“Wherever possible they shared information too, whether that was with staff, trade unions or partnership organisations. They gave commercial data that justified why they were making the decisions they were.”

Honest, open and trustworthy Phil Barton, who is CEO of Jelf (a £250m business with over 500 staff), agrees that leadership is changing – away from a previously macho and ‘I can do everything’ approach.

He comments: “I’ve never been a big fan of the hero CEO who comes in to execute a plan and then leaves after three years whether they’ve seen success or not.

Sir Alex Ferguson A good CEO needs to see a plan through and must have connectivity with the business and the people and clients it serves. There is an issue with short-termism in the leadership space and it isn’t healthy. I respect CEOs who stay the distance. They have a vision and they deliver it.

“You need to have a strong understanding of the marketplace your business is in. Humility is important too, as is an ability to engage and motivate your people.

“THE TRANSFORMATIONAL LEADER IS A MASTER AT TAKING CHARGE OF CHANGE: METABOLISING CONSTANT SHIFTS IN THE EXTERNAL REALITY INTO CONCRETE VALUE WITHIN THE BUSINESS TO DRIVE EXPONENTIAL RESULTS.” Nick Jankel Issue 7: March - April 2019

REPORT

“Other attributes that make a great leader are a clear vision, being a good listener and somebody the team and customer can trust.”

Phil also says that ruling by control and fear is also outdated: “I think it’s become increasingly less relevant. Certainly, in business where there is such a war for talent, it is important to engage meaningfully with your team.

“A fear-based leadership style doesn’t resonate with people. Business is a team effort, so a more collaborative approach is needed.”

Consequences Knowing more about what good leadership looks like brings about the question – what will be the consequences for leaders who don’t adapt their style?

Nick Jankel is the founder and CEO of Switch On, a sought-after speaker on leadership and a futurist.

He comments: “The need for radical adaptation to the external environment means that every business leader must be able to lead and land constant transformation inside their organisation.

“For decades, leaders could be technical managers, tasked with maintaining the existing business models and slowly growing productivity and profit by driving efficiencies and delivering incremental change.

“But the huge and rapid transformation in the external reality means that 20th Century management is no longer enough. Those at the top need to step up to the evolutionary imperative of “adapt or die” on an unprecedented scale or risk a slow fade into obsolescence or a spectacular plunge into failure. They need to become 21st Century transformational leaders.”

The triple threat that’s changing leadership Nick continues: “There are three enormous external drivers of change that are pressuring every business to adapt. I call them the “triple threat”: exponential digital technologies like AI and blockchain that allow new innovations from competitors to scale far faster than most organizations can grow; disrupted societal values that make legacy products and services irrelevant to new generations of customers and employees alike; and global existential risks that are challenging the very Business Leader - Inspire • Inform • Connect

existence of our species like climate change, pollution and pollinator collapse.

“The triple threat means that only “transformational leadership” can ensure organisations survive the coming decade and have a chance to thrive in it. A transformational leader sees exponential technologies, existential risks and changing societies - the digital, disrupted, and damaged world - as opportunities for digital transformation, business model innovation, and purposeful and sustainable re-invention.

“The transformational leader is a master at taking charge of change: metabolising constant shifts in the external reality into concrete value within the business to drive exponential results.”

Are great leaders born or made?

The threat to not adapting is clear and successful leaders are constantly evolving their approach. But is a great leader born or made?

Sukhendu Pal is the Chairman and Founder of Sirius and Company. His view is this: “The

great leaders I came across in my life led without job titles, without social media, turned their back on the crowd, just like the conductor of an orchestra.

“Let me make it clear: great leaders are neither publicity seeking social media addicts tweeting their way to the top nor come from family dynasties. I was born in Calcutta where Mother Theresa lived and worked and I saw first-hand how an ordinary person developed into an icon.

“She was an immigrant and wasn’t born in a dynasty. However, she developed herself to lead a movement she conceived. Great leadership isn’t about gender either, it is about experience, passion, and a laser-like vision.

“The business world is no different. Great leaders come from nowhere and they champion purposes which change the world, shape our thinking, and impact the way we live and do things.” 

Ambitious growth plans announced by the Ascot Group A marketing and media group based in London and Bristol has announced major expansion plans and expects to grow from 70 to 200 staff in the next three years.

The Ascot Group was founded by entrepreneur Andrew Scott in 2004, and the latest news follows a string of high profile appointments including two new board positions, corporate lawyer Charles Cook and chartered accountant Ashley Cartman.

The Group is now actively seeking

strategic acquisitions, investment opportunities and potential partnerships.

Andrew comments: “We are particularly interested in talking to business owners or private equity houses that want to exit or divest their interest. We see an ideal fit being companies between £1m and £10m turnover, although we’ve open to discuss options either side of this.”

The Ascot Group currently has interests in publishing, events, public relations, digital marketing, business data and CRM software, and has averaged 34% year-on-year growth since it started.

He continues: “We see two or three strategic acquisitions as a way of accelerating our existing organic growth and leveraging the combined resources, skills and customer relationships.”

www.ascotgroup.co.uk

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LEADERSHIP

Running a business can be a lonely place Can having a mentor help? And how do you choose the right one?

B

eing the CEO or MD of a business can be a lonely place, where your decisions decide the future of the company and its staff.

Which is why working with a mentor can help you through the pain as you either scale-up, exit, float or raise funds. Many successful entrepreneurs believe it makes a huge difference and can accelerate growth.

Former Dragons’ Den star and investor Sarah Willingham is one such person.

Sarah comments: “The worst thing an entrepreneur can do is surround themselves with ‘yes people’ or clones of themselves.

When you’re the ‘boss’ it’s hard for your employees to have a balanced relationship with you and feel that they can really push you.

34

“Being a boss can be lonely and we all need someone to listen who won’t judge – a safe environment to speak freely. A mentor is there for you and you alone and will challenge your thinking and decision making without worrying about losing their job. I have always surrounded myself with brilliant people and aimed to be the most stupid person in the room.”

Why should you have a business mentor?

Knowing what to look for in your mentor isn’t so easy, especially if you don’t have any tried and tested business leaders in your network.

Over the past few years, there has been a proliferation of business coaches: experts have come on to the scene and many may have had corporate and business experience. But how many have taken a business from nothing to exit, experienced the round-the clock pressure of going

through an exit fundraised or dealt with major staffing issues?

Last year, in an exclusive interview with Business Leader, serial entrepreneur and investor James Phipps talked about this journey in finding a mentor that would work for him.

“IT SHOWED JUST HOW HARD IT IS FOR BUSINESS OWNERS OR LEADERS TO KNOW WHERE TO TURN FOR THAT MAGIC FORMULA OF EMPLOYEE ENGAGEMENT AND A GROWING, PROFITABLE BUSINESS.” James Phipps

Issue 7: March - April 2019

FEATURE

Despite founding and growing several notable businesses, including computer services firm Excalibur Communications, Phipps was constantly being pestered by ‘experts’ who had never reached the levels of business he had.

One day he ‘snapped’ and in a viral LinkedIn post, he realised how difficult it was for business leaders to have someone they trust, that they can turn to.

He comments: “It showed just how hard it is for business owners or leaders to know where to turn for that magic formula of employee engagement and a growing, profitable business.

“My personal experience of business coaches has been a mixed one. Generally, I have found them to be extremely poor value for money if involved in government funded “general” schemes that are good at textbook relaying but lacking in the understanding of running an actual business or the industry in which you work in.

“They are lifestyle businesses which rely on a few days per month’s work only at a £1,000 day rate to sustain themselves.

More than enough willing victims in the marketplace to keep that going for a while.”

However, Phipps later found there were many options out there that suited him and his business, in order to sustain its growth.

He continues: “People like Simon Sinek are inspirational. I would encourage everyone to watch his videos and read his books as a valuable investment of time to any business leader. I have digested their messages and really used them to give me a different perspective.

“But the two largest influences on the success I’ve had have been support groups and non-exec board members. Leadership is a lonely place sometimes, and to find people who truly understand the pressure is hugely valuable.”

Challenge leadership It is not just the support and influence that a mentor can provide, but that they can challenge the leader of a company with valid points to consider. They are there to help you reach your potential as a boss and a business person.

Business Leader - Inspire • Inform • Connect

Senior Lecturer at Salford Business School, Chris Proctor, believes that – in business as in life – it is difficult to learn new things without the right help.

He explains: “In life it is difficult to learn new things without help. The harder the task the more important is the role of a mentor.

You can work out some manual tasks by watching a film on YouTube.

Arguably, it is possible to learn yoga online, but not only are you more likely to injure yourself, you will miss the vital social component of a class.

“You cannot complete a PhD without a supervisor, and you can’t learn to drive without an instructor. The mentor isn’t necessary just for their technical expertise, but for their ability to guide you through new problems and thresholds and help you to develop your confidence.

“Establishing a new business can be a rocky and lonely experience. It can be frustrating and aggravating. A mentor can help with strategy, contacts, resources and wisdom.

“They can help bring the vital element of teamwork to what appears a solo pursuit.

It isn’t for nothing that teamwork is widely considered by organisations to be the most important attribute in an employee.

Developing a relationship with mentors can thus be an essential step for putative business owners.”

How do I know if they are the right mentor for me?

So, with the good, bad and shocking options available, a business owner might be excused for not knowing who or what type of mentor to bring onboard.

Individual mentors who have grown and sold their stakes in business are available; so are former office executives who have worked through various leadership regimes and different types of business.

There are also specific business mentorship programmes and companies that leaders can reach out to.

One such company is Rockstar Group.

Founded in 2007 by former city investment banker Jonathan Pfahl, they have mentors that have experienced everything the life of a business leader can throw at them.

To qualify as a mentor for the company, they must have started, built-up and then sold their business for a minimum price of £4m. However, the average Rockstar Group mentor has sold their business for £18m.

Cont. 

That one-to-one mentorship support system can be both a business and psychological safety net. These mentors know the best practices available to deal with issues that affect business.

Tapping into their knowledge bank means that hard decisions are made easier, worrying times can be dealt with, and the weight of leadership can be shared with someone who has been through it all before.

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LEADERSHIP Jonathan explains: “The reason why we need to have mentors who sold their business is because that is what entrepreneurship is all about. If you can create something from nothing, and then have someone who is willing to pay a large sum of money to buy it, there are not that many business lessons you have yet to experience and gone through.

“The mentors have likely gone through at least one recession – this is important as business is very different in good and bad economic times. This creates a collection of very credible sources of information.”

Guidance to become a better leader International author and founder of two business mentorship programmes Brenda Della Casa believes that mentors can offer guidance around becoming a better leader, as well as the fundamentals of running a business.

Brenda comments: “Being a leader is different from being a manager, entrepreneur or ‘boss’. Leadership is about investing in other human beings and identifying strengths and areas of opportunity. The one-size-fits-all approach to training doesn’t work in a world where so many options are presented to us on an hourly basis. Leadership isn’t about telling people what to do and where to go so much as helping them to build the skills to succeed wherever they go.”

“I think successful men and women want to be surrounded by successful people. Theoretical advice is fine but mentors should be able to show their advice and point of view is effective through their own daily actions. A good mentorship situation is collaborative, productive and efficient. It’s also friendly and based on trust and respect.”

This shows that the role of the ‘mentor’ has evolved, and there can be ones who target specific or overall business issues. There are also different ways in which a leader can seek mentorship advice.

The role of the non-executive director Sometimes, the option of having an outside and independent mentor might not appeal to some business leaders. However, these are not the only options available to them.

Many scale-up and large businesses employ a non-executive director to help guide them.

James explains: “Non-executive directors have also been incredibly helpful, and I talk to so many SMEs who really see them as something for much larger businesses, with large cost but little gain. My experience was if you can get somebody who is sector specific in experience it is helpful as you can gain insight and get the strategic decisions right.”

Where do I go to find a mentor?

With a selection of choices available to business leaders to help get mentorship advice, it can be hard to make the right selection.

Whether you bring in a non-executive director, apply to a mentorship programme, seek government advice or seek out a sector-specific and niche individual who has faced the world of business and come through it successfully – having a mentor can make a hugely positive difference. 

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FEATURE

BUSINESS LEADER COLUMNIST

Mentorship: The secret ingredient to make a good employee great

By Greg Le Tocq, who is the cofounder of Cloud Savings Company – which owns Vouchercloud.

Groupon recently bought the business for £49m.

Productivity is the name of today’s employment game. Many businesses are looking for people who can do more, in less time, for less money. For the workforce, however, it can breed derision.

That’s where the value of mentorship really becomes clear.

Early on in my career, I started my first business with the help of The Prince’s Trust. They’re an organisation dedicated to helping people turn business ideas into reality. One of the key steps on that ladder was a monthly mentor.

In this case, being coached on the fundamentals of business then turned into precisely how to run a business.

That was everything from Product Lifecycle Management, to how to deal with funding and acquisition conversations and how to scale the business quickly – vital information in the early days.

Without my mentor, it’s safe to say that starting a successful business would have been a more difficult proposition. The benefit of having someone experienced there to speak with can’t be underestimated, and it trickles down into my business strategy today.

From first hand experience, I’m a firm believer that whatever you invest in a person you get back. There’s a perennial question in business: “What if I invest in someone and they leave?” The answer is always “What if you don’t invest in them and they stay?”

Helping your employees be the best they can be is, in short, one of the best ways to boost their output. It not only shows that those higher up in the organisation actually care about their careers, but it gives them an open forum to discuss challenges, roadblocks or successes – whether that’s in their professional or personal life.

Misrepresent the mentor People tend to misrepresent the mentor/mentee relationship as that of student and master that’s absolutely not the case. Instead, it’s more a case of two people on the same path, at different stages, helping each other. The mentee gains the benefit of experience and knowledge, and the mentor benefits from wider perspective and enthusiasm.

Better yet, it’s an initiative that costs nothing but time.

Issue 7: March - April 2019

CHARTERED ACCOUNTANTS, TAX CONSULTANTS & FINANCIAL PLANNERS

GROWTH

BLM talks to Jenny Campbell – the original queen of cash

J

enny Campbell is a banker, turned businesswoman, turned investor and Dragons’ Den star.

Here, she tells her business story.

When did you join Your Cash?

I joined Yourcash in 2006 when it was owned by RBS (I was still working in the bank at that time) and I oversaw its transition to fit it within the group. The winds of change then came in 2008 when the global recession hit. RBS then had to make some decisions about its future, and Hanco (Yourcash) became a non-core asset for RBS. They decided to sell the business and I was put in charge of this.

I didn’t have expertise in selling a business at the time but I put a strong team around me and we spent a year working to find a deal. There weren’t many buyers though, apart from trade buyers who were looking to absorb the business and asset strip it.

“THE INDUSTRY IS UNDER PRESSURE AS CASH IS IN DECLINE, SO IT WAS ALWAYS ABOUT KEEPING OURSELVES AT THE FOREFRONT AND COMMUNICATING THAT CASH STILL HAS A PURPOSE.” 38

During the process I had a lightbulb moment where I felt the business had a future and I wasn’t motivated by being a banker any longer but by being a businesswoman, so I went from trying to sell the business to thinking about whether I could buy it and I did just that in 2010.

What was your greatest achievement at Your Cash?

I would say it was the management and delivery of a major change programme which was focused around processes and people.

I transformed it into a start-up that was Issue 7: March - April 2019

INTERVIEW

structurally messy into a £40m business that was very competitive.

the business. I wanted the business to go on its next journey.

We also completely transformed the people in the business, either coaching people up or coaching people out that didn’t fit with the culture. We had a saying, which was: ‘You had to have the Yourcash sparkle’.

How hard was it to walk away?

It was of course hard but equally I knew the business was in good hands. I spent six months transitioning the business to its new owners.

What was the main challenge you faced at Your Cash?

The industry is under pressure as cash is in decline, so it was always about keeping ourselves at the forefront and communicating that cash still has a purpose.

This also meant making sure we had a voice amongst regulators and politicians about the role of cash in business and society.

I’d worked since the age of 16 for 39 years, so the time was also right for me to take a break and focus on new challenges such as investing in businesses and projects and supporting charities (Jenny is a supporter of The Princes Trust and Young Enterprise, amongst others).

Why did you decide to sell the business?

By 2016 I had been there for ten years and gone through a major transition and taken on debt to grow the company. We’d reached a point whereby the business had flourished for six years after leaving RBS in 2010 but it really needed a new parent that could invest in technology and systems; and give it more access to funding to fuel growth and expand internationally.

Since the business sale you have joined Dragons’ Den. What was it like to be asked?

I had watched the programme since its inception and always found it a great business education programme. I used to watch it on a Sunday and then discuss it with my colleagues at work on Monday.

When I was asked to join the show, it was a bit surreal but I slotted in easily.

When you’re investing – how important is the personality of the entrepreneur?

Firstly, it’s important to invest in products that you know and like - it must be a

We’d limited those options through our private ownership and by putting debt into

product or service you can be evangelical about. Secondly, the entrepreneur must be somebody that you like and respect and want to work with.

These are the softer pieces of the puzzle though, and when those two are in place my banker head kicks in, and I ask myself how do I invest in the business at the right price.

Then my investor side kicks in and I ask myself – how am I going to exit the business with a profit in three to five years?

What advice would you give to emerging entrepreneurs?

I would say have a clear plan because entrepreneurship is alive and kicking in the UK so you need to be able to standout.

Regarding younger people, I feel there is a view from some that anybody can become an entrepreneur and make millions but in reality, it’s a lonely place to be and it’s high risk.

Sometimes it can be beneficial to work in a business where you have a security blanket and can learn before becoming an entrepreneur. 

NEWS:

Will ITV and BBC collaboration hurt Netflix?

BBC and ITV have announced that they will establish a strategic partnership to bring a new streaming service to UK audiences with the aim of challenging Netflix.

The BBC and ITV have agreed a joint vision for the service, called BritBox, and are now working on a formal agreement. The two companies believe other broadcasters will look to join in due course.

BritBox would be a streaming service that provides a collection of British

boxsets and original on-demand series. The aim is to launch the service in the second half of 2019.

Carolyn McCall, CEO of ITV, comments: “I am really pleased that ITV and the BBC are at the concluding stage of discussions to launch a new streaming service.

“BritBox will be the home for the best of British creativity – celebrating the best of the past, the best of today and investing in new British-originated content in the future.”

Business Leader - Inspire • Inform • Connect

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GROWTH

HOW CAN TRADING INTERNATIONALLY IMPROVE THE EXIT VALUE OF YOUR BUSINESS?

I

t comes as no surprise that a large majority of UK businesses listed on the FTSE 250 trade internationally, showing that ‘going global’ can add huge value to your business.

However, Britain has the unenviable reputation of being one of the leading global nations that has a negative balance of payments when it comes to international trade, importing more than it exports.

Currently, Britain ranks as the 10th highest export nation, shipping £636bn worth of products and services around the world – but as the world’s first highest import nation, we ship in a staggering £470bn worth of items.

To counter this there has been a huge drive by government to get more firms exporting.

Many high-growth companies will be ideal candidates to trade internationally, but how does expanding your international footprint really add value when it comes to company reputation, positioning to float and packaging for sale?

Becoming an attractive acquisition Rob Crews is Partner at Momentum Corporate Finance LLP and an experienced transatlantic dealmaker.

He says that for a business to become an attractive purchase option, exporting is one of many options to increase the value of the company.

Rob Crews, Partner at Momentum Corporate Finance LLP explains: “A business that is trading abroad can become an attractive proposition to a potential purchaser. This is because international trading does generate 40

some interesting strengths to consider when looking at an acquisition.

“Overall, regardless of the industry in which the business operates, if it trades abroad then it has access to a wider, global market.

This will make it more attractive than a similar business constrained to the UK alone.”

However, global growth is a huge commitment that can sometimes make or break a business.

With a profusion of potential pitfalls awaiting British companies looking to expand overseas, businesses must be aware of who

they are doing business with.

Mark Sevier, Head of Research at Alpha Portfolio Management explains: “Overseas expansion can improve a company’s growth prospects, particularly during periods of lower growth in their domestic market.

“However, trading internationally presents both opportunities and risks. It offers more diversified revenues and reduces sensitivity to any individual economy. It also opens a company up to different regulatory and political environments.”

Issue 7: March - April 2019

INTERNATIONAL TRADE

“EXPORTING TO OVERSEAS MARKETS REDUCES RELIANCE ON THE UK. A BUSINESS THAT SELLS INTO MULTIPLE MARKETS IS LESS EXPOSED TO A NEGATIVE SHOCK IN ANY SINGLE MARKET. LOWER LEVELS OF RISK DRIVE HIGHER VALUATIONS.” Rob Crews

which creates more uncertainty. If Sterling strengthens, then these foreign currency receipts will be worth less in the UK. “Conversely as Sterling weakens, which it has since the Brexit referendum, then foreign currency receipts are worth relatively more in Sterling. To the extent that costs can also be denominated in foreign currency, then this will create a natural hedge and help reduce the exchange rate volatility in earnings.”

M&A options The route to international growth is different for all companies. It can depend on the sector, the size of the company’s UK operation, and what products and services they offer.

One of the main challenges when growing a business, is building relationships with customers and suppliers. When a business plans to start buying and selling overseas, this process must start over again.

Therefore, buying your way to becoming a global business through acquisition can be an option.

Mark comments: “For companies considering entering a new market, M&A or a joint venture are options to provide a foothold and establish relationships, in addition to organic growth. In terms of valuation, investors are likely to apply a premium rating to internationally diversified businesses which can offer revenue and profit growth against a backdrop of varied economic conditions.

Increasing your business value Despite the contrasting opportunities and risks that international trade provides, those that are successful can exponentially increase the value of their business.

International business growth comes with many new markets, but also its own set of challenges. An obvious advantage of succeeding as a business internationally, is that it puts a business’s value on a much higher level.

One of the main reasons for exploring new markets is also to increase the rate of growth. If a successful domestic business

Business Leader - Inspire • Inform • Connect

can replicate itself abroad and add diversification to its portfolio, then it can establish itself as a global brand.

Rob comments: “Exporting to overseas markets reduces reliance on the UK. A business that sells into multiple markets is less exposed to a negative shock in any single market. Lower levels of risk drive higher valuations.”

However, there are several risks businesses should be aware of before embarking on an overseas trade mission.

He continues: “When selling abroad, receipts will typically be in foreign currency,

“As a consequence of Sterling falling to near 30-year lows against several other major currencies, imports to the UK have become more expensive. The flip side is that our exports have been made cheaper. This offers a real competitive advantage to any businesses producing goods and services in the UK which are considering expanding sales internationally.”

Is there still value in British business abroad?

With the current state of the economy, Brexit looming, and trade deals still being negotiated, there are many outside factors that could impact what value trading internationally adds to a business - but thinking long-term, opening up your business to global markets can only be a good thing. 

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HOW CAN YOUR BUSINESS USE

TO START ITS EXPORT JOURNEY?

I

n the last few years there has been a major drive from government to encourage more UK businesses to start trading Internationally. Exporting often suits businesses that are in the high-growth, scale-up stage and British firms have the advantage of being able to trade on ‘Brand Britain’ - tapping Into the UK’s history of building prestige and quality brands.

Export figures There is still plenty of work for UK plc to do when it comes to exporting its good and services, but the latest figures released by the Office for National Statistics (ONS) are encouraging, showing demand for British 42

goods and services has risen to £636bn in the year to August 2018.

exporting to New Zealand (74%), Australia (60%), the USA (65%) and Russia (64%).

UK exports have also risen by £33bn – an increase of 5.5% compared to the same time the year previous. So, just how powerful Is ‘Brand Britain’?

The appeal of ‘Brand Britain’ was also a major motivator for upping exports. Almost a quarter (24%) of small businesses planning to start or increase international sales in the next year said that their main reason for doing so was the growing international appetite for Brand Britain.

The rise of small businesses exporting According to foreign exchange company OFX, in 2018, more than half of Britain’s small businesses trading internationally (53%) said that their company’s ‘Britishness’ is a valuable asset when selling goods and services outside the UK. This was particularly true for companies

OFX’s Corporate Dealer Jake Trask added: “The rise of marketplaces like eBay and Amazon means it’s now easier than ever for small businesses to start selling overseas, no matter where they are based. Events like the Royal Wedding have shown that there’s Issue 7: March - April 2019

INTERNATIONAL TRADE a real opportunity to tap into the global appeal of Brand Britain.

“London brands don’t have the monopoly on ‘Britishness’, so I’d expect businesses across the UK to leverage their unique heritage and boost their international sales in the future.”

Businesses such as Bristol-based Pukka Herbs have used Brand Britain to its advantage.

CEO Karel Vandamme comments: “We will always be proud of our roots here in the UK and grateful for the sales platform Britain provided us with and the power of the prestige It has globally. We now consider Pukka Herbs to be a global brand, helping us to achieve our mission to bring as many people as possible closer to the incredible power of plants.

“Whilst we wholeheartedly support a thriving UK market, we also work with our partners globally who can give us a large platform to reach even more people so that our mission can continue with even greater ambition and purpose.”

Government assistance The current UK government is very keen to promote the success of home-grown brands on the international business scene.

The Department for International Trade (DIT) has been running many different localised events across the country where they offer advice and provide mentors to help new companies to start exporting.

Made’ on the front of our packaging gives the product a higher perceived value and quality.

“Brand Britain is very much alive and well in international trade, however it can be a challenge to convince trading partners that we can offer value for money compared with China. Once this small obstacle is overcome, the sky is the limit.

“There is also plenty support offered by the government for British companies with an appetite for international trade. This can take a bit of digging - but it is definitely worth the effort.

“I would encourage British business owners to explore export opportunities as a fast, efficient and exciting way to grow their business.”

These thoughts are echoed by serviced-accommodation company, UnderTheDoormat.

The company’s founder Merilee Karr, comments: “Brand Britain helps our business sell internationally because of our ability to communicate the honest, trustworthy, and polite, attributes of British culture in our customer offer. This helps us to provide additional credibility in home accommodation, which is often viewed as a disruptive sector.

“As we operate at the top end of the market, being British and London-based helps to engender that confidence in our customer base so we can grow as a successful British business.”

Future of ‘Brand Britain’ and export Britain is in the midst of one of its most controversial and complicated political eras in its history, and many businesses may seem to be shying away from the potentially risky move of exporting.

However, ‘Brand Britain’ is still as strong as ever, with huge markets such as North America and Asia still eager to buy British.

Recently, the World Trade Organisation (WTO) announced that even after Britain leaves the European Union, business will still be able to bid for public sector contracts, worth over £1.3tn worldwide.

Dr Liam Fox, who is International Trade Secretary, comments: “This is a hugely successful global agreement which will give British businesses certainty that they can continue bidding for £1.3tn worth of government procurement contracts overseas.

“This is an important win for British diplomacy as we take our place on the world stage, and we are looking forward to continuing to play a committed and active role in the GPA Committee and the WTO as a whole.” 

Success stories There are many companies that have taken advantage of the many opportunities provided to both large and small British brands.

One such company is Wicked Vision, a London-based toy company, that has been in business for 19 years and trading internationally for the last five.

Wicked Vision has seen an exponential rise within the sector over the last three years, as they have expanded across Australia, the USA and the Middle East.

Founder David Strang commented: “Being a British manufacturer in the toy industry is highly unusual and something to be very proud of.

With over 90% of toys being made in China - having ‘Proudly British Business Leader - Inspire • Inform • Connect

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BUSINESS LEADER COLUMNIST

UK announces record export figures of £636bn

Leaving the EU is a guaranteed disaster says Charlie Mullins

By Charlie Mullins OBE, who is the founder of Pimlico Plumbers.

Charlie Mullins OBE is the CEO and founder of Pimlico Plumbers, the UK’s largest independent plumbing and service company. Founded in 1979 with nothing more than a plumbing apprenticeship, a bag of tools and a second-hand van to his name, Charlie has built Pimlico Plumbers into a multi-million pound business.

Entrepreneurs are great at taking risks. It’s what makes them stand out from the average Joe. They have the ability and confidence to turn new ideas into reality, jobs and wealth.

You might be excused for thinking that most entrepreneurs would be more comfortable with backing Brexit: it could go down in the history books as the nation’s greatest ever gamble.

But entrepreneurs – successful ones at least – only take calculated risks.

That’s why even some of the entrepreneurs who backed Brexit are jumping ship – now that the risks are more and more obvious. James Dyson is “future-proofing” his business by moving its headquarters from Wiltshire to Singapore and Sir Jim Ratcliffe has left the UK allegedly to take advantage of Monaco’s tax system.

That’s because leaving the EU, whether it’s the cliff edge ‘no deal’ Brexit or some other fudge, is a completely blind leap of faith that we simply cannot afford to gamble on. Britain’s economy and the prosperity of future generations is at stake.

But don’t just take my word for it. Business owners and trusted organisations from all walks of life have warned of the consequences of Brexit on the economy. From the British Retail Consortium, to the TUC, the Bank of England and even the Government: they’ve all said that British business will be worse off for leaving, and nobody voted for that.

As a business owner myself, I know there is nothing more counterproductive than uncertainty. Businesses just want to get on with business, and the decision to leave the EU and the government’s hopeless negotiations have collectively forced us all to hold our breath. As a result, contracts have been deferred, decisions have been delayed, and investments have been put on hold.

While voters up and down the country may be preoccupied with their own individual queries over the country’s exit, from the Irish backstop to international trade, the real problem we should be focusing on is the economy and the trail of destruction which Brexit would create.

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UK exports continue to increase despite a challenging global outlook, new figures from the Office for National Statistics (ONS) reveal. On the whole, British exports grew by 2.7% to £636bn.

International trade statistics for 2018 show that the UK is the second fastest growing goods exporter among the top five economies, just behind China. The latest ONS statistics show that UK goods exports grew by 3.1% to £10.6bn in the year to January 2019.

The International Trade Secretary Dr Liam Fox comments: “UK exports continuing to grow underlines the fundamental strength of the British economy despite the uncertain global economic outlook.

“Goods exports in particular performed well, rising faster than all of the top five largest economies except China in 2018 – yet further evidence of the massive demand for British products.”

London Capital & Finance falls into administration Thousands of customers who have invested in high-risk bond schemes at London Capital & Finance (LCF) fear they may have lost everything, following the collapse of the business.

Now in administration, LCF took a total of £236m following a prolonged marketing campaign – which is now under investigation for mis-selling.

The schemes were marketed as ‘Fixed Rate ISAs’ and LCF’s administrators have stated that they hope to recoup as much as possible for those that have been affected.

Issue 7: March - April 2019

PROFILE

Meet the Chinese ‘Unicorn’ hot on the heels of Alibaba Guest article by Steve van Belleghem @StevenVBe Bytedance is the parent company of China’s most popular media site, Toutiao. The word “Toutiao” translates as “headline,” and their slogan is “The only true headlines are the things you care about,” which gives a clue as to what makes them stand out from the crowd.

P

eople all over the world look to the tech giants in Silicon Valley, such as Google or Apple, for the emerging tech trends.

The area serves as a global centre for innovation in the fields of technology and social media, and these companies have transformed customer expectations and behaviour.

However, in recent years we have seen areas in the East rising up to become the ‘go-to’ destinations for big opportunities in tech.

For example, I recently led an “innovation tour” to China and visited a region that is reportedly now involved in the production of as much as 90% of electronic devices being imported all over the world.

China’s AI-Powered News Platform When we talk about Chinese tech companies, most people think of Alibaba and Tencent – widely regarded as two untouchable giants in China.

However, Bytedance, which was founded in 2012 and is now giving Alibaba and Tencent something serious to think about in the field of content.

Business Leader - Inspire • Inform • Connect

Toutiao is a new style of media app which uses Artifical Intelligence in order to source and curate daily news via its 4000 partner sites. Some of the content is created by traditional journalists and some comes from social influencers, which are increasingly important in China.

But the real differentiator is that Toutiao uses bots to make automated content tailored to the needs and behaviours of individual users. Users of the app have information that they have an interest in pushed to their homepage using a complex algorithm.

Through the technology of their AI Lab, Toutiao learns each user’s feedback and preferences from every interaction – time spent on an article, what time of day the user reads different content, comments, favourites, likes, dislikes and more. The result is a user experience that is more personalised than that offered by their competitors.

Amazing Level of Usage Toutiao is now widely regarded as the most addictive media platform in the world.

The average user of the app spends 74 minutes per day on the channel, which is particularly impressive when compared with the 50 minutes people spend on average on Facebook and 30 minutes on Snapchat.

It also gets double the daily views that BBC Online receives globally.

Toutiao specialises in short video clips

lasting around 10 seconds, which are often funny and engaging so the user can easily watch one after another.

However, it is the combination of AI and personalisation that has really created such an addictive user experience on the platform – it doesn’t just publish content, it pushes it to the individual user in a targeted way.

The app is able to cut through dozens of pages of results on new outlets for the user, solving the perceived problem of ‘too much choice’. No longer do you need to search for the content you like – Toutiao brings it to you, and it is an undeniably convenient experience.

Record-breaking Monetisation Toutiao has grown quickly to become one of the most used media apps in the world in just a short time. What is perhaps more impressive than the levels of usage, however, is the speed at which Bytedance have been able to monetise the platform.

If you compare the first four years of monetisation of Toutiao with that of other leading tech platforms, including Facebook, Tencent, Twitter and LinkedIn, Toutiao is streets ahead. In fact, only the early years of Google’s monetisation come even close to its rate of growth, but Bytedance have mastered the art of monetising media in a way that has never been done before.

Of course, the impressive growth of Toutaio hasn’t gone unnoticed from investors, and Bytedance is rumoured to be planning to IPO in 2019.

However, while you would almost expect Alibaba or Tencent to be involved, Bytedance are independent and a true competitor to the Chinese tech giants, so it will be interesting to watch if and how they fight back.

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GROWTH

Meet the UK’s most successful scale-up businesses

W

elcome to the Business Leader Scale-Up 30 Series where we will be profiling and identifying some of the UK’s leading scale-up companies, creating wealth and jobs.

In the next five print editions of Business Leader Magazine we will reveal 30 of the most successful scale-up businesses, starting with the Bristol City region and then followed by Manchester, London, Leeds and Birmingham.

WHAT IS THE CRITERIA FOR INCLUSION? The qualifying businesses will operate within a ten-mile radius of the chosen city and in their latest published accounts will have a turnover between £10m-50m.

These are the often-forgotten medium sized firms that are the heartbeat of the UK economy.

WHO ARE BRISTOL’S FASTEST GROWING SCALE-UP FIRMS? 30 businesses, combined turnover around £850m and over 11k combined employees.

NB: All companies are private limited with share capital * statistics courtesy of Scale-up Institute

Combined Turnover £850m

INSIDEASIA TOURS Company founded: 2000 Turnover: £20m - £25m Turnover growth: 37.53% Employee Count: 100+ Sector: Retail/travel INVITATION DIGITAL LTD Company founded: 2008 Turnover: £15m - £20m Turnover growth: 32.75% Employee count: 75+ Sector: Marketing FORGEROCK LTD Company founded: 2010 Turnover: £20m - £25m Turnover growth: 73.63% Employees: 110+ Sector: Software & IT KING LIFTING LTD Company founded: 1982 Turnover: £25m - £30m Turnover growth: 37.91 % Employees: 220+ Sector: Construction and transport OPUS RECRUITMENT SOLUTIONS

BRISTOL

11k combined employees

Company founded: 2008 Turnover: £30m - £35m Turnover growth: 21.28% Employees: 120+ Sector: Recruitment VWV LEGAL SERVICES

= 1k employees

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Company founded: 1993 Turnover: £15m - £20m Turnover growth: 24.04% Employee: 320+ Sector: Legal Issue 7: March - April 2019

SCALE-UP

ATLAS SERVICES GROUP ENERGY LTD Company founded: Turnover: Turnover growth: Employees: Sector:

2004 £35m - £40m 40.88% 40+ Renewable energy

SANLAM PARTNERSHIPS LTD

Bristol - A home for scale-ups?

Company profile: 2010 Turnover: £20m - £25m Turnover growth: 55.79% Employees: 30+ Sector: Financial services VIRTUS HEALTH EUROPE LTD Company founded: 2014 Turnover: £15m - £20m Turnover growth: 33.59% Employees: 120+ Sector: Healthcare THE BOSTON TEA PARTY GROUP Company founded: 2004 Turnover: £10m - £15m Turnover growth: 21.57% Employees: 400+ Sector: Food and drink GARRAD HASSAN & PARTNERS LIMITED Company founded: 1985 Turnover: £25m - £30m Turnover growth: 35.56% Employees: N/A Sector: Renewable energy BRISTOL WASTE COMPANY LTD Company founded: 2015 Turnover: £25m - £30m Turnover growth: 85.5% Employees: 500+ Sector: Waste

LUNARMAR GROUP Company founded: 2013 Turnover: £15m - £20m Turnover growth: 39.43% Employees: 150+ Sector: Finance & investment MAIL HANDLING INTERNATIONAL Company founded: 1996 Turnover: £15m - £20m Turnover growth: 30.83% Employees: 40+ Sector: Logistics Business Leader - Inspire • Inform • Connect

By Henry Whorwood - Beauhurst When we talk about high-growth businesses, our minds go straight to London and – most likely – to Old Street. But this stereotype neglects the pockets of growth outside of London, one of the most notable of which is in Bristol – particularly at the moment, as it rides high on Graphcore’s recently won unicorn status.

Starting and scaling a business in Bristol presents a lot of attractions and opportunities – and it’s not just the high living standards in the South West. There is a growing entrepreneurial ecosystem in Bristol, from leading companies and founders, incubator and accelerator programmes, to a growing pool of meetups and networking events, as well as the University of Bristol’s constant supply of graduates. All of these have an important knock on effect on the talent available to growing companies in the region.

For a long time, a challenge for growing businesses in and around Bristol was the lack of high-quality office space to grow into. While this is by no means a solved problem, the emergence of more flexible office space has started to address some of the need (both the EngineShed

and Runway East are now wellestablished in the city) and rumours abound of more sites that are in the final stage of negotiation. It is anticipated that these sites will address the needs of companies growing beyond c.50 employees.

But Bristol is by no means perfect.

Briony Phillips, Scale-up Enabler at the EngineShed, points to the dearth of sources of sizeable investment as a barrier to growth for companies in the region. Things have been getting better: £416m was invested into private companies in the South West in 2018, up from £80m in 2011.

And there are funds that remain committed to the region: Parkwalk Advisors are about to close their third fund that will invest in companies coming out of Bristol University and the SETsquared partnership. But of the 270 funds that have invested in the South West since 2011, only 21 are based in the region. Businesses seeking investment still have to go to London or further afield to meet their funding needs.

There can be no doubt that Bristol is one of the best places outside of London to start and scale a business, but it’s clear too that there’s more to be done to ensure more companies can follow Graphcore’s path to success.

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SCALE-UP

STIRLING DYNAMICS Company founded: 1987 Turnover: £10m - £15m Turnover growth: 36.01% Employees: 80+ Sector: N/A WORLD SNOOKER LTD Company founded: 2000 Turnover: £15m - £20m Turnover growth: 45.19% Employees: 20+ Sectors: Sports management MDE CONSULTANTS LTD Company founded: 2012 Turnover: £23m Turnover growth: 48.71% Employees: 10+ Sector: Recruitment BRISTOL CITY HOLDINGS LTD Company founded: 1980 Turnover: £20m - £25m Turnover growth: 49.9% Employees: 600+ Sector: Sports ETM CONSTRUCTION & RECYCLING HOLDINGS LTD DRIBUILD GROUP LTD

EQUILIBRIUM INDUSTRIES LTD

Company founded: 2012 Turnover: £30m - £35m Turnover growth: 28.99% Employees: 40+ Sector: Construction

Incorporated: 2010 Company turnover: £10m - £15m Turnover growth: 154.05% Employees: 50+ Sector: Manufacturing

CULLEN GROUP

AKKA DEVELOPMENT UK LTD

Company founded: 1993 Turnover: £20m - £25m Turnover growth: 48.39% Employees: 70+ Sector: N/A

Company founded: 1997 Company turnover: £21m Turnover growth: 20.51% Employees: 175+ Sector: Cargo & logistics

Incorporated: 2010 Company turnover: N/A Turnover growth: 61.96% Employees: 80+ Sector: Engineering

ITEC CONNECT LTD

SOLENT STEVEDORES LTD

ELDON INSURANCE SERVICES LTD

Company founded: 1988 Company turnover: £25m - £30m Turnover growth: 25.91% Employees: 170+ Sector: IT & telecoms

Company founded: 2000 Company turnover: £15m - £20m Turnover growth: 22.92% Employees: 150+ Sector: Shipping

Incorporated: N/A Turnover: £47m Turnover growth: £40.34% Employees: 350+ Sector: Insurance

MITIE LANDSCAPES LTD

WITHY KING LLP

GO PAK UK LTD

Company founded: 1978 Company turnover: £40m - £45m Turnover growth: 27.17% Employees: 750+ Sector: Construction

Company incorporated: 2011 Turnover: £30m - £35m Turnover growth: 26.39% Employees: 380+ Sector: Legal

Incorporated: 2009 Turnover: £21m Turnover growth: 28.38% Employees: 180+ Sector: Manufacturing

Company founded: 2011 Turnover: £15m - £20m Turnover growth: 23.08% Employees: 40+ Sector: Waste, transport & construction BRISTOL & AVON TRANSPORT & RECYCLING LTD

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Issue 7: March - April 2019

Connecting business with the right support to succeed and grow l

We offer a free service for businesses across the region

l

Contact us to arrange a phone call or face-toface business support

www.wearegrowth.co.uk T. 0117 456 6955 E. wearegrowth@westofengland-ca.gov.uk

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SCALE-UP

Why are many UK business owners scared of scaling-up their business?

N

ew research from Barclaycard has looked at the issues facing businesses at the tipping point of becoming a scale-up business.

The study finds that almost six in ten (57%) leaders of scale-ups – defined as businesses with at least 10 employees and average annualised growth of 20% or more in the last three years – have experienced a moment of uncertainty when they were afraid their business would fail.

A host of challenges that come with scaling up were also revealed to be keeping the leaders of these businesses awake at night.

The most pressing concern cited was maintaining employee wellbeing and satisfaction (referenced by 66%), followed by finding and retaining talent (64%), standing out from the competition (63%) and maintaining customer service standards (63%).

Mind the Scale-Up support gap Overall, the vast majority of growing companies (91%) have looked to external partners to help scale their business. There remains, however, a clear gap in support with seven in ten (71%) scale-up business leaders calling for more help to be available to successful start-ups ready to grow.

Surprisingly, 25% of respondents, all of whom meet the criteria for a scale-up business, don’t know or haven’t heard of the term ‘scale-up’ – highlighting the need for greater discussion about the requirements of, and support available to, companies in this critical phase of the business lifecycle.

The Scale-Up innovation opportunity While scale-up businesses face many common growing pains, they see themselves as the innovation engine of the UK. The majority (65%) believe that they have the edge on bigger businesses in this area, due to more agile ways of working and a strong pool of talent.

Almost four in ten (37%) believe it’s easier for scale-up businesses to ‘test and learn’, as there’s less red tape and bureaucracy required to implement new ideas, while 29% think scale-up businesses attract the most exciting and creative employees.

While scale-ups view themselves as best-placed to innovate, doing so requires funding. More than three-quarters (77%) agree that a scale-up business needs to ‘invest to grow’, with, on average, 29% identified as the proportion of turnover that needs to be invested annually to secure progress.

Konrad Kelling, Managing Director, Barclaycard Payment Solutions, said: “The scale-up phase brings new challenges, as well as opportunities.

Whether they’re looking to trade internationally, launch a new product line, or update their payment technology to meet customer demand, in today’s uncertain economic environment, growing businesses should lean on their partners for advice and support. If scale ups can access the help they need to overcome the pain points of growth, they will be much better positioned to build a successful business both in the short and long-term.”

Bianca Miller-Cole, Entrepreneur & Author said: “As an entrepreneur who has scaledup and mentors scaling businesses, I identify with the growing pains revealed in this research. Getting the support you need in the early stages is vital for making your business a success, even if it’s just recognising the moment when you’re no longer a start-up.

“My advice to any scaling business is not to be afraid to ask questions and always approach growth as a chance to innovate.”

What are the challenges facing scale-up business owners?

Rob Perks, CEO of business growth specialists and scale-up Ambassadors for Inspire, comments: The first challenge if you want to really grow is to evolve from being a ‘business owner,’ who is involved in everything and actively runs the ship, to a leader of people who gets results through others.

This may sound straightforward, but

50

many people find it difficult.

Letting go of the day-to-day running of the business and spending time on developing the strategy for the business, motivating and encouraging your team and dealing with tricky personnel issues can come as a huge surprise and, sometimes, a painful one.

Getting the right support for you to make the transition is vital if the business is to continue to grow.

The second challenge is to build a truly

winning leadership team. We often soldier on with people who were great in helping us start the business but are not always the best people to help us really scale the business.

The third challenge is getting the finances and investment in place to enable and support our growth.

Many businesses try to grow organically which is sometimes possible but to really scale, investment into the business will accelerate this exponentially.

Issue 7: March - April 2019

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www.beauhurst.com Business Leader - Inspire • Inform • Connect

51

HR

How can your business align itself with the expectations of millennials?

The Experts: Cliff Fox Pure Technology Group James Blackburn Pure Technology Group Luke Smith Croud Professor Gurgpreet Jagpal Aldridge Institute for Investment Harry Hugo The Goat Agency EJ Flynn The Supper Club Chris Donnelly Verb Brand Katy Howell Immediate Future Jo Geraghty Culture Consultancy

AS A BUSINESS OWNER/ENTREPRENEUR, DO YOU BELIEVE THAT THE NEXT GENERATION OF WORKERS HAVE EXPECTATIONS THAT ARE DIFFERENT TO GENERATIONS BEFORE THEM? Cliff Fox: “I think there’s a lot of exaggeration and myth about millennial expectations and some sweeping generalisations. I regularly read about this generation feeling overly ‘entitled’ or wanting to work differently, like that’s a bad thing. The millennials I work with want the same things we all do – reward for great work, career development and to enjoy work socially.”

Luke Smith: “I don’t feel this. There may be pockets of ‘entitlement’ amongst that group, but largely I find millennials to be super smart and prepared for the workplace like no generation before. And we should know - at Croud over 80% of our workforce would be classed as ‘millennial’.”

Katy Howell: “I really dislike the term millennials. Sweeping generalisations about a whole generation adds very little to employee relations and is a very blunt tool with which to ensure a happy and productive workforce. What has changed across the board, regardless of age or gender, is the attitude to work, life and technology.

“It isn’t about generations, it is a set of new work expectations. We all want more from work. We all demand a work-life balance. We want to enjoy living and love working. Back in the day before the ubiquitous laptop and smartphone, when manufacturing was at its height, career longevity was valued.

“In today’s flexible working environments, in predominantly service industries stuffed full of gadgets and SaaS operations, it’s agility, curiosity and innovation that counts - in both careers and businesses.”

Kathy Hartley Salford Business School

52

Issue 7: March - April 2019

FEATURE

SHOULD BUSINESSES ALIGN THEMSELVES TO THE EXPECTATIONS OF MILLENNIALS? Cliff Fox: “It’s less about aligning a business to a generation than a mutual understanding of what the business and its people are trying to achieve. I think it is true that younger people want transparency and open dialogue, but that’s no bad thing for any organisation.”

EJ Flynn: “Millennial founders now represent half of all new members of The Supper Club. While they are joining to gain insight from peers on how to scale and manage rapid growth, their give back to fellow members is a better understanding of how to develop millennial leaders.

Most founders prefer to develop people internally for management and senior leadership positions because they’re already bought into the culture and vision and understand how the business works.

It also rewards loyalty while creating aspiration in the wider team.”

HOW CAN BUSINESSES CREATE AN INFRASTRUCTURE THAT APPEALS TO MILLENNIALS? Harry Hugo: “Millennials are looking at options aside from university to access the workplace, so offering opportunities to younger people and training to people who don’t have these opportunities in place is essential. Offering opportunities to people without professional qualifications and training them up within your company can have great value.

“Going into a role knowing there is room for growth is always on the mind of a millennial.

Being able to know where they stand, the potential for progression and meeting their expectations is a big aspect.

“If you want to attract and retain millennials, then aligning and managing their expectations is vital. Having open communication about the future of your business is critical for millennials to understand and ensure that they are working towards the same goals.”

EJ Flynn: “The interview process is always a two-way street, and millennials will use a range of sources to reference a potential employer. They will look at the Twitter feed to see how social the team are or Glassdoor for how people rate the company and its leadership, for example. Some members Business Leader - Inspire • Inform • Connect

post videos about the company and culture on their LinkedIn page to appeal to new recruits.

WHAT DO YOU BELIEVE WILL BE THE CONSEQUENCES FOR BUSINESSES THAT DON’T ADAPT TO MILLENNIALS?

“The right approach to interviewing can help you determine the cultural fit, value and potential of a candidate and minimise the risk of a toxic hire.”

Cliff Fox: “We work hard at attraction, development and retention. For us the IT skills shortage is a very real challenge and one that’s overcome only by effort. Any business that doesn’t invest in its talent likely won’t prosper or survive in the long term.”

Kathy Hartley: “The emerging nature and quality of new jobs is likely to set the tone for how millennials respond. While individual studies have identified attitudinal differences such as a preference for swift, regular feedback from line managers rather than reliance on formal and bureaucratic processes, and for flexibility, meta-analyses indicate that a substantial difference in attitudes from previous generations has been exaggerated.

“Notions that millennials lack the commitment of older workers may simply reflect responses to new realities: a growth in insecure work and a prevailing discourse of transformation and uncertainty. Older workers meanwhile are also considering their futures, with some likely to continue working for longer, for financial and other reasons, alongside millennials.”

Harry Hugo: “As the global market continues to shift so does the human market and being able to keep on top of that is key, especially as the world develops simultaneously with industry understanding.

“Developing and motivating already engaged millennials within a company has the power to drive it forward.

“I believe that if you have a talented and dedicated employee and there’s room for progression and growth for them, they will be with you for a long time and want to go above and beyond.

Cont.  53

HR “Companies who don’t adapt to millennials will find it harder to progress and won’t be able to connect with and employ the top talent.”

Katie Howell: “Those that don’t change will struggle with more than just recruitment.

They’ll miss the opportunity. Don’t be misled by the headlines. Change is not all about office beanbags and four-day weeks. In fact, there are no set rules to adapting to the new workforce, except one: listen to your employees.

“Often the fundamental goals are the same for your business as it is for your employee.

They want to be valued. They want work to be fulfilling. They want to learn and grow.

They want to make a difference.”

Luke Smith: “It’s not just millennials - every business now has to be fit for the modern age, to be forward looking, inclusive, and quite simply an interesting place to work. If you don’t tick these boxes you won’t attract or retain the best talent.”

IS AN EMPLOYEE FOR LIFE NOW AN UNREALISTIC EXPECTATION? Cliff Fox: “Yes, but that’s been the case for some time. The average millennial is forecast to have 12 or more jobs in their career, so I’ve just counted mine – 13 roles

FEATURE within 10 organisations – and I’m Gen-X, so what’s different?”

Katie Howell: “Anyway, who wants an employee for life? Surely it is what together you and your employee can achieve that has more rewards than meaningless KPIs such as length of service.

“Our modern-day workforce is more aware of how and where ‘working life’ fits into ‘living’. And work isn’t all consuming. Staff want to work for companies with a purpose, that consider mental health and employee wellbeing.”

Luke Smith: “Yes, an employee for 10 years would be a first step. Remember with digital and tech in particular that most businesses weren’t even around 20 years ago.”

“IT’S NOT JUST MILLENNIALS - EVERY BUSINESS NOW HAS TO BE FIT FOR THE MODERN AGE, TO BE FORWARD LOOKING, INCLUSIVE, AND QUITE SIMPLY AN INTERESTING PLACE TO WORK.” Luke Smith tailored to individual wants/needs. With all those things in place you can focus on making work enjoyable, fun, social – it all has to fit together, for everyone.”

DO YOU FIND YOUNGER EMPLOYEES RESPOND BETTER TO FINANCIAL INCENTIVES OR OTHER WORK PLACED BENEFITS?

AS SOMEBODY IN THEIR EARLY TWENTIES – WHAT DO YOU LOOK FOR FROM YOUR EMPLOYER IN REGARD TO EMPLOYEE BENEFITS AND YOUR WORKING PATTERNS?

Cliff Fox: “Both, in equal measures. Most businesses in our sector reward well for sales but there’s a tendency not to reward on results for technical or operational roles. We tackle that head-on through a profit-share scheme for non-commercial personnel linked to commercial and operational success, with flexible benefits

James Blackburn: “Being a marketing manager in a technology company, my expectations are to have the latest and best technologies at my disposal. I value flexible working and the chance to achieve my potential through funded development, whilst realising results-based rewards. The beer fridge isn’t a bad feature either.”

Majestic setting for Inspire’s strategic partners’ lunch Business growth specialists Inspire welcomed 25 of their strategic partners to an annual lunch at the stunning Longleat House.

And the setting could not have been more apt, as Longleat has partnered with Inspire since its inception 25 years ago.

The strategic partners heard a presentation from Inspire’s CEO Rob Perks on the Inspire Elite scale-up support programme and how it supports leaders of growing businesses throughout their lifecycle.

This was followed by a presentation from Josh Robson, Head of External Affairs at the Scale-up Institute, on the scale -up landscape in the UK, before lunch in Lord Bath’s private banqueting suite.

Inspire have been endorsed as Scale-up Ambassadors for Swindon and Wiltshire by 54

the Scale-up Institute for the second year running and have recently been selected by the Heart of the South West Local Enterprise Partnership to pilot a scale up programme across Somerset and Devon.

Rob said: “Scale-ups want a dedicated relationship manager to direct them to the most appropriate support to meet their needs and help them take advantage of opportunities that exist.

“This is what we provide and if we don’t know the answer then our strategic partners can provide additional expertise in specialist areas.”

Josh Robson commented: “Inspire play a vital role in helping businesses get to grips with the scale-up challenges and establish

essential local connections with those who know what it’s like to grow a business.

“Two of the main barriers scale-ups have identified are access to talent and access to market. It is great to see that Inspire have a strong network in place to help provide relevant support.”

Issue 7: March - April 2019

Advertisement

Millennials need to prioritise their pensions A leading pension expert has warned that workers today need to put saving for their retirement at the forefront of their agenda or face an uncertain future.

S

tuart Price, Partner and Actuary at Quantum Advisory, said: “Many people born before 1960 would likely have been a member of an employer’s defined benefit (DB) pension scheme and can look forward to a relatively comfortable retirement. However, this comes at the expense of the younger generation.

their pension savings in one place, give them an idea of their likely income when they retire and should go a long way to addressing much of the perplexity.

“Education is key, and I think people today are more clued up about their pension and understand that they cannot enjoy a comfortable retirement on the State Pension alone – that’s if there even is a State Pension when they come to retire.

“While DB schemes were once the norm, they are now scarce due to the spiraling costs to employers and have been replaced by far less generous defined contribution (DC) arrangements.

“Auto-enrolment has gone a long way to ensuring that the majority of workers are now saving into a private pension, albeit a DC arrangement, however, the current minimum contributions are sadly still not enough for people to build up the pensions pot they need.

“A recent survey by Prudential reassuringly found that more than half of millennials want to be educated about how to best save for their retirement. This is great news that youngsters are taking in an interest in their long-term financial wellbeing.

“The planned introduction of the Pensions Dashboard aims to provide a simplified way for individuals to see all

this is easier said than done, particularly with other priorities for income such as a mortgage, rent, student loans and bills, but the earlier you start saving the right amount, the better your future will be.

“There are options available to get the most out of your savings, such as flexible benefits packages that can be tailored to individual employee circumstances.

Personalised solutions like these provide a range of traditional and innovative employee benefits aimed to engage more workers and allow everyone to have more control over the components that apply to them.

“There really should be no excuse for millennials in employment not being aware of their responsibility to pay into a pension scheme. If they don’t then as a nation in the next 30 to 40 years we are going to have a huge welfare problem on our hands.” ●

“I firmly believe that explaining about pensions should be taught in school – from secondary through to college and university. Employers should also take responsibility and teach their staff about the pension options available to them, and how much they should be saving.

“My rule of thumb to give people the best chance of a decent income in retirement, is to half your age and pay in that percentage of your salary into a DC arrangement. So, for a 40 year old, the total contribution from the worker and employer should total 20%. I appreciate

If you would like to know more about the services we provide, including helping employers explain to their employees the importance of saving for their retirement, please visit our website www.quantumadvisory.co.uk or contact:

Stuart Price Partner

Direct line: 0117 905 8766 Email: stuart.price@quantumadvisory.co.uk

Quantum Actuarial LLP, trading as Quantum Advisory, Registration Number: OC326665, registered in England and Wales. Quantum Actuarial LLP is authorised and regulated by the Financial Conduct Authority. Registered office: Cypress House, Pascal Close, St Mellons, Cardiff CF3 0LW. A list of all members is available for inspection at our registered office.

Business Leader - Inspire • Inform • Connect

55

ADVERTORIAL

ALLIANCE HOMES GROUP BENEFIT FROM WESTON COLLEGE SUPPORT WHO ARE ALLIANCE HOMES GROUP? Alliance Homes Group is proud to offer housing, care and support in the West of England.

We work in partnership with local, regional and national agencies to improve lives and benefit communities.

WHAT CHALLENGES DO YOU FACE IN THE CURRENT CLIMATE? We want to offer our customers every opportunity we can to improve their lives.

This has meant refining and increasing our employment and skills offering to suit their needs, making accessing services easier, and allowing customers to be served at first point of contact.

A further factor is the changing nature of our modern workforce and the need to attract and retain colleagues. We’re upskilling our colleagues and customers to adapt to this emerging landscape.

We are also seeing recruitment and skills challenges within two sectors that we operate in, either directly or within our supply chain: •

Domiciliary Care

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Construction

employment academy. The learners receive mock interviews, feedback from care professionals, visit our offices and get the opportunity to meet care customers. They also complete a range of sector-based qualifications.

Through the Care Academy we’ve hired individuals that would usually get overlooked in the recruitment system. An example of this being Zoe - a 30 year old single mum, with no GCSEs, no work experience and no knowledge of the care industry.

Her confidence grew massively, and she passed all elements of the course with flying colours. We are delighted to have her as part of our team.

WHAT DO WESTON COLLEGE OFFER ALLIANCE HOMES? Weston College is innovative, very responsive and willing to co-design training programmes to ensure solutions are designed to reflect our business needs.

The College builds long-term relationships and has developed a keen interest in

understanding our strategic priorities, culture and values. The College has dedicated teams which have sector specific knowledge designed to support our business needs alongside expertise designed to support the needs of different groups of learners e.g. traineeships, apprenticeships, pre-employment and professional services.

Since working with the College we’ve increased the number of apprenticeships we’re able to deliver, and are working with more pre-employment colleagues through our Care Academy. We’ve also added to local investment in key sectors that we operate in, and established more partnership working within our employment programmes.

WHAT ARE THE COMPANY PLANS FOR FUTURE GROWTH? We’re looking to innovate and further collaborate with Weston College. We’re keen to explore how we can create more apprenticeship opportunities and to establish easier and more flexible options for our partners and supply chain to take on apprentices.

HOW HAVE YOU DECIDED TO COMBAT THESE CHALLENGES? We decided to work in partnership with Weston College, as we believe that if we pool resources and collaborate in the right way, we can achieve more for our customers.

With Weston College, North Somerset Council’s Community Learning Team and Job Centre Plus, and our domiciliary care business, Alliance Living Care, we developed the Care Academy. The Care Academy is a bespoke three-week pre56

Issue 7: March - April 2019

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SURVEY

WHAT ARE THE OBSTACLES STOPPING RURAL BUSINESSES FROM SCALING UP? WHAT ARE THE BIGGEST CHALLENGES THEY’RE CURRENTLY FACING?

48%

RECRUITMENT OF STAFF

24%

CONNECTIVITY

16%

LOGISTICS & TRANSPORT

DOES BEING A RURAL BUSINESS COUNT AS A POSITIVE OR NEGATIVE WHEN RECRUITING?

For BLM’s latest business survey in conjunction with Barclays – the issues facing the UK’s rural businesses was discussed.

A sample of 2,435 business owners were polled, as part of the survey. The first question these rural business leaders were asked was what are the biggest challenges they’re currently facing?

Respondents were given the option to pick one of the following – connectivity, logistics and transport, recruitment, funding growth and exporting.

The majority (48%) picked recruitment of staff and this was especially acute amongst manufacturers. The second biggest challenge was listed as connectivity (24%), with 16% saying logistics and transport.

A follow up question was asked about

58

recruiting staff, as to whether being a rural business counts as a positive or negative when recruiting.

Interestingly, 67% said that it was a negative.

Connectivity A deeper look at connectivity found that 65% of those surveyed said that they were not happy with how their business was served, with regards to connectivity.

Regarding transport links, it seems that this isn’t a huge issue for the rural business owners quizzed, with 70% saying that they were satisfied with current links to and from into their business for staff, suppliers and customers.

Sustainability Respondents were also asked whether they would describe their business as sustainable and ‘green thinking’ – 56% said

67%

SAID THAT IT COUNTED AS A NEGATIVE

they did and of those who responded no, 48% said that they believed it would become a more important issue for businesses in the next five to ten years.

Moving onto exporting, only 28% of those surveyed said they were actively trading internationally and of those that aren’t currently – only 34% said they planned to do so in the future.

Issue 7: March - April 2019

RURAL BUSINESS

NUMBER OF THOSE SURVEYED NOT HAPPY WITH CONNECTIVITY

What are the challenges Rural firms face in today’s markets?

All businesses face challenges in the year ahead, but what are the specific issues facing rural businesses that city-based firms feel less acutely? And what can be done about them?

Here I take a look at what I see as the key challenges.

35%

65%

70%

56%

SAID THAT THEY WERE SATISFIED WITH CURRENT TRANSPORT LINKS TO AND FROM THEIR BUSINESS

SAID THEY THOUGHT THEIR BUSINESS WAS SUSTAINABLE AND GREEN THINKING

Government support To conclude, respondents were asked whether they felt more support was needed from government for rural companies.

Unsurprisingly, 88% said they felt that it was – compounding a popular view that they are often neglected ahead of companies that operate in urban centres.

Business Leader - Inspire • Inform • Connect

Connectivity A fast internet connection may be taken for granted in towns, but it can be a real issue in rural communities with many areas not able to access superfast broadband and for businesses that rely on a good connection for trade it can be a real headache.

Connectivity impacts both business admin and online sales and therefore ultimately customer service.

Skills Gap Finding skilled staff is currently a number one problem for many firms regardless of location and it’s made worse in a sparsely populated area. The talent pool is smaller as are career opportunities and wider considerations such as housing, amenities and educational facilities.

Rural areas often have a higher proportion of older people who may not be looking for work and suitable employees might not want to commute the long distances required to work for a rural employer Transportation Another often heard complaint is the poor transport links – fewer large and multilaned roads, distance from motorways and poorly maintained minor roads can cause difficulties in delivering products to the client base. A more limited public transport service affects clients and staff

David Goodall

alike and long term can make recruitment an ongoing trial.

However, don’t despair!

The rural economy has a vital role to play in promoting tourism and there is continued growth in enthusiasm for organically produced food and drink, often showcased in local eating establishments. The ongoing development of new technology means many different types of businesses are able to trade in more rural areas , which in turn attracts a bigger talent pool. Despite a number of challenges, the future is still looking bright for rural businesses.

To find out more contact: David Goodall, Head of Mid Corporate Banking, South West.

Mobile: +44 (0)7920 266489 Email: david.goodall@barclays.com

www.barclayscorporate.com

Barclays Bank PLC is registered in England (Company No. 1026167) with its registered office at 1 Churchill Place, London E14 5HP. Barclays Bank PLC is authorised by the Prudential Regulation Authority, and regulated by the Financial Conduct Authority (Financial Services Register No. 122702) and the Prudential Regulation Authority. Barclays is a trading name and trade mark of Barclays PLC and its subsidiaries

59

MY WORKING DAY

SAM SMITH

CEO OF FINNCAP

A

s the leader of a company, you are there to set an example, to lead and inspire a team of individuals to achieve a series of business goals. But how do business leaders go about their daily routine?

Business Leader spoke to Sam Smith, CEO of finnCap, about her working day.

What time do you usually wake up?

Around 6:45am the alarm goes off. I quickly run through my emails for anything that has come up overnight, review stock market announcements that come out at 7am, and have a quick press review - then get ready for work.

What do you typically have for breakfast?

Same thing every day – Bircher muesli with some fruit and nuts on top.

What’s the rest of your morning routine before you start work?

I have quite a strict morning routine as it sets me up for the day – I go through emails as soon as I am awake, get ready and do my five mins HIT exercises, take my breakfast with me, get out the door for 7:15am and get to work. I do my meditation on the 15 minute walk, read the papers on the 60

tube and make any calls I need to that are important or confidential. I am either out the door by 7:15am or take my daughter to school twice a week so leave at 8am which is usually a slightly more stressful morning!

What’s the first thing you do at the start of your working day?

First thing I do is go through my to do list, and try and focus on the important things rather than just the urgent things which are all too easy to forget. Meetings usually start around 9:30am and carry on throughout the day.

How do you prioritise your day’s work?

I try to do things that only I can do – if I can delegate it to someone else, then I try to, so I can focus my time on the most important things. People issues always tend to come fairly high up the list as we are a people business.

Do you plan meetings or are they a waste of time?

I have quite a lot of meetings and probably too many but a high number are very useful and a good source of new business or input into strategy. I try and have an objective for each meeting and a reason for being there.

Do you have a working lunch or is it good to take a break?

Always a working lunch. Probably better to take a break but I haven’t done that in 20 years!

When does your working day finish?

I try and leave the office at 5:30pm (other than Thursday when I work a bit later), so I can see my daughter for an hour of quality time before bed. Once she is in bed I usually do two hours of catching up on meetings/ emails/calls so depending on what is going on I might finish anytime between 9-11pm.

How do you prepare for the next day’s work?

I love writing a good list and looking well in advance at my diary to forward plan anything that might come up so I am prepared. I hate last minute. I will look at my diary for the next day and make sure I am prepared as well as look forward two weeks and see if there is anything I need to fit in. I also make sure I have done all my emails before I go to bed, as I hate having an inbox that is full.

What’s your favourite piece of technology?

Got to be my phone, sadly.

How do you switch off?

Sport and exercise are great ways for me to switch off and when I get too busy and don’t have time for exercise it makes a noticeable difference. Food shopping and cooking also make me focus on something else. It is fair to say switching off is pretty difficult.

What’s the best piece of advice you’ve received?

If you can get it done now then do it now.

Issue 7: March - April 2019

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