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27/03/2015 26/03/2015 11:38 16:04




Hannah Prevett talks bras and books with lingerie tycoon Michelle Mone


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VOLUME 04 ISSUE 04 / 2015

REGULARS 09 10 12 15 16 98

Editor’s letter Contributors News & events Talking point Book reviews Start-up diaries

28 One to watch

Onfido is shaking up background checks

32 Election fever 06

SMEs demand more support as voting day looms

36 Sweet smell of failure

The important thing about setbacks is to learn and move on

42 Risk avoidance

48 Temporary treasures

The death of the high street has given rise to the pop-up

56 The only way is ethics

SMEs are more motivated than ever to have a social purpose

60 Frame of mind

Understanding psychology is key to building customer relationships

65 It’s who you know

Hiring through referral can help SMEs find the best talent

68 Self aware

87 Local heroes

74 Fresh meat

91 David v Goliath

Building a healthy business often requires a slow and steady approach Hiring young prospects is good for business, says Lyndsey Simpson

Support for regional hubs is key to the UK’s digital future The cost of litigation has risen fivefold and SMEs will be hit hardest

79 The hot list

It’s often simple mistakes that cause the biggest financial headaches

The latest must-have gadgets, hardware and apps for forwardthinking small businesses

44 Trading places

84 Appy chappy

Before exporting, SMEs should get to grips with trade finance


How to build a business app: a beginner’s guide



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EDITOR’S letter VOLUME 04 ISSUE 04 / 2015

Scan this QR Code to register for Elite Business Magazine SALES Darren Smith – Account Manager Samuel Darcy – Account Manager Suzanne Smith – Account Manager Siobhan Stokes – Account Manager EDITORIAL Hannah Prevett – Editor Adam Pescod – Web Editor Josh Russell – Feature Writer Ryan McChrystal – Feature Writer Jade Saunders – Junior Writer DESIGN/PRODUCTION Leona Connor – Head Designer Rishita Devji – Junior Designer Dan Lecount – Web Development Manager Marketing Kelly Dunworth - Head of Communications Claudia Laing - Marketing Manager Lucy Jones - Marketing Assistant CIRCULATION Paul Kirby – Circulation & Data Manager ACCOUNTS Sally Stoker – Finance Manager Colin Munday - Management Accountant ADMINISTRATION Daisy Jones – Administrator DIRECTOR Scott English – Managing Director Circulation/subscription UK £40, EUROPE £60, REST OF WORLD £95 Circulation enquiries: CE Media Limited Elite Business Magazine is published 12 times a year by CE Media Solutions Limited, 4th Floor, Victoria House, Victoria Road, Chelmsford, CM1 1JR Call: 01245 707 516 Copyright 2015. All rights reserved No part of Elite Business 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. Elite Business magazine will make every effort to return picture material, but this is at the owner’s risk. Due to the nature of the printing process, images can be subject to a variation of up to 15 per cent, therefore CE Media Limited cannot be held responsible for such variation.

Michelle Mone is the real deal When I met this month’s cover star, Michelle Mone, at her swanky London apartment, it was just days after her book, My Fight to the Top, had launched. Ever masterful at PR, the book had gained coverage in all of the major news outlets and had shot to the top of the Amazon book charts. But it’s not all glamour. In the days since her book had launched, she’d been linked to a number of men and been chastised for the Daily Mail for not smiling after they sent a pap to follow her around the streets of London. And don’t even get me started on the comments on the Mail Online stories. But Mone remains philosophical about even the most vicious of media coverage. She told me that when you court the media, as she does so expertly, you can’t expect it to all go your own way. Indeed, she’s had to grow a thick skin during her time in the spotlight. That’s one of the reasons she wrote her book. She told me that she was fed up with all the business books that talk in acronyms and about leadership and management. Instead, she wanted to create a text that spoke to the challenges that are so often not discussed – whether they be personal challenges, business challenges or run-ins with the press. Being so searingly honest certainly hasn’t harmed Mone’s career. In the few short weeks since the book was published, she has cemented her position as one of the UK’s top female speakers and her new UTan range has launched into 500 Boots stores. At last month’s Elite Business Event, Mone received a standing ovation for her inspirational speech. We hear a lot about authenticity these days, and how leaders must be the true version of themselves in order to achieve more as individuals and organisations. I couldn’t agree more. And one thing’s for certain: Michelle Mone is the real deal.



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CONTRIBUTORS Adam Pescod In the greatest comeback story since Jose Mourinho returned to Pescod’s beloved Chelsea, our web editor ambled in with tail between his legs last week, after daring to flirt with the world of PR. The last time we saw Pescod, he was recovering from a rather busy summer, which included his wedding, honeymoon and a special stag night in Chelmsford. He has now taken to hanging around outside famous fictional houses like 4 Privet Drive, and went all Harry Potter by working his magic on this month’s news pages.

Neil Crockett


Continuing his residency in our tech section this month, Crockett is banging the drum for local support to stimulate the UK’s growing digital economy (p87). Needless to say, Digital Catapult, the body that he heads, is doing its bit to help. However, Crockett believes the time has come for a more joined-up approach, incorporating local organisations and the public sector, to really drive Britain’s digital growth forward. With Crockett’s CV including senior roles at BT and Cisco, it’s probably best to take him at his word.

Malcolm Scolvil This month Scolvil tells us how he put his health on the back burner in his quest for success. When his business hit the runners, he was left emotionally bankrupt too. However, engaging with mindfulness and meditation has helped propel Scolvil back into the entrepreneurial elite and at his first major event, the Mindfulness Summit, taking place on April 16, he is hoping to share some of his wisdom with business leaders and fellow entrepreneurs. We could us some of Scolvil’s calm at EB towers on press day.

Carly Chynoweth Chynoweth is a freelance journalist who writes about small business and management for The Sunday Times, The Times and anyone else who is willing to listen. After graduating she got a job at a security firm thanks to a recommendation from a former babysitter; in the twenty years since she’s become a firm believer in the power of referrals, which she writes about in this issue. Chynoweth likes the open ocean, cold beer and sunscreen. Yes, she is Australian.

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It’s ironic that hiring an accountant can often be a significant expense for a start-up. Many entrepreneurs choose to tackle the finances themselves in the early days, or delegate it elsewhere. As revealed by the

Association of Accounting Technicians (AAT), a third of the people



George Osborne delivered some good news for high-street businesses and those with an eye on overseas growth in his last Budget before May’s General Election. The chancellor confirmed that the government will carry out a review of business rates after admitting the system “has not kept pace with the needs of a modern economy”. Meanwhile, in a bid to boost our (slim) chances of doubling export revenue to £1tn by 2020, Osborne revealed he was to double funding for UK Trade and Investment (UKTI) activities in China to £15m, announcing a number of trade missions to boot. The question remains: is it a positive step towards export success or a case of too little too late? The legalities involved in employing an intern have been well-reported of late, but the value that interns can add to a company is often overlooked. The exuberance and dynamism of a graduate is something that most businesses would relish, if only for a month or two. It is disheartening, therefore, to learn that 58% of British businesses have never used an intern, according to research from the Association of Chartered Certified Accountants (ACCA) and Intern Aware. The figures vary greatly by region, with 38% of London firms saying they have never employed interns, compared to 72% of business in the Midlands. It’s time to tap into that talent pool.

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in charge of businesses’ finances don’t have the necessary qualifications, resulting in an average loss of £1,277, whether through tax miscalculations, unsent invoices or bounced payments. Almost a quarter of small business owners claimed that cost was a significant factor in their staff not having the qualifications. However, the AAT said: “Qualifications can be very flexible and cost-effective, meaning that support for small businesses is more accessible than people might think.”

The cost of employing illegal migrant workers was laid bare last month. According to employment outsourcing firm Parasol, businesses in the UK were fined a collective £24m for taking on employees residing in the country illegally. Figures obtained by a Freedom of Information request showed that the gross value of civil penalties issued between January and December 2014 was more than £24.6m, a staggering 75% rise on 2013, when the figure stood at £14.1m. And the figure has more than doubled since 2012, when the amount of money recouped by the Home Office totalled £10.8m. The Royal Society for Public Health (RSPH) released some thought-provoking research last month, which ranked the UK’s ‘unhealthiest’ and ‘healthiest’ high streets. The health of a high street, it claimed, could be assessed by the nature of the businesses lining it, with bookmakers, payday loan shops, fast food outlets and tanning salons identified as having the most negative impact on public health, and pharmacies, leisure centres, and health services having the most positive impact. ‘Where is the unhealthiest high street?’ we hear you ask. According to the RSPH, Preston holds that dubious title, with Shrewsbury sitting at the healthiest end of the spectrum. The full league tables can be found on the RSPH website.

Small businesses without a digital presence in this day and age can forget about survival. With this in mind, the “digital blind spot” uncovered by the 2015 Lloyds Bank UK Business Digital Index is cause for concern. While it found 100,000 more SMEs are reaping the rewards of digital, the Index revealed that 1.2 million companies still lack basic skills such as running a website, using e-commerce, social media or online banking, with 25% of small businesses claiming digital was “irrelevant” to them. We would urge these firms to open their eyes before it’s too late.

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Shareholders in Heinz and Kraft Foods Group were licking their lips last week as

the two food giants agreed a merger worth a tantalising $100bn (£68bn), reportedly creating the third largest food and beverage company in the United States, and the fifth largest in the world. Heinz shareholders will own 51% of the combined company, with the remaining 49% going to shareholders of Kraft, whose share price rocketed more than 35% to $83.17 when the news broke. The mammoth deal was engineered by Brazilian investment firm 3G Capital and Berkshire Hathaway, led by billionaire investor Warren Buffett, which together bought Heinz for $23bn in 2013. That is one tasty deal.

Ken Wolter /


Thinglass /

Electronic payment giant PayPal found itself in hot water last month following claims it allowed payments that violated sanctions against Iran, Cuba and Sudan. The firm, which was founded in Palo Alto, California in 1998, agreed to pay $7.7m (£5.1m) to the US government after the Treasury Department said it had failed to adequately screen and prevent transactions, including one for $7,000 from someone listed by the US government as being involved in the proliferation of weapons of mass destruction. PayPal did not confirm or deny that it had violated the sanctions.

Does that CV look too good to be true? Then it probably is. According to employee screening experts The Risk Advisory Group, 63% of CVs contain discrepancies, amounting to a rise of 15% in the last decade. While its study suggested that men and women are equally likely to lie on their CV, The Risk Advisory Group’s analysis revealed that 25-32 year olds are the worst offenders, with more than a third of discrepancies coming from this age group. As for the nature of these CV inconsistencies, 35% related to candidates’ employment history, while 12% were found to have inflated their job titles. A dose of due diligence should do the trick.


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Angels Den – London Angel Club Session 2

April 7 Old Oxford Road,

April 15 Nabarro, 125 London Wall,

Donnington, RG14 3AG

London, EC2Y 5AL

Business Junction –

Smith & Williamson – Finance and business briefing for SMEs April 21 Portwall Place, Portwall Lane, Bristol BS1 6NA

Networking Lunch April 9 Babble City, 45 Old Broad Street, London, EC2N 1HU

News.indd 2

Sustainable Built Environment – a vision for the future

Business Junction – Networking Lunch

Business Junction – Networking Lunch

April 21 Horizon House, Deanery

April 22 Tattersalls Tavern, Knightsbridge Green,

April 30 Founders Hall, 1 Cloth Fair,

Road, Bristol BS1 5AH

London, SW1X 7QA

London, EC1A 7JQ

Business Scene – London West Dinner

Property Angels Den

A full event listing is available on our website: elitebusinessmagazine.

April 21 Wrights Lane, London W8 5SP

April 28 Druces, Salisbury House, London Wall, London EC2M 5PS

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Zero tolerance How worried should businesses be that UK inflation has fallen to zero?

Depressed wages could hamper productivity It seems increasingly likely that inflation will remain significantly lower than 2% for the foreseeable future. With the recent announcement earlier this week that the official inflation figure is a paltry 0%, there are some implications of falling prices for business. Cyrus Afkhami, The short-term consequence is that people founder, My Tutor Club feel richer; in short, their spending power increases and every pound goes further. On the face of it, this bodes well for businesses as consumers, buoyed with this extra confidence, make purchases that otherwise they may not have made previously. However, if inflation remains at 0% or turn to deflation, the medium-to-long-term impact on businesses, and indeed the wider economy, would become damaging – we would experience stagflation. The risk with deflation is that if consumers expect prices to continue falling then over time they are more likely to defer purchases in an effort to secure even lower prices in the future. This deferment can depress economic activity and have negative knock-on effects throughout the rest of the economy, just as Japan has experienced since the 1990s. The spectre of deflation may also provide an opportunity for business to freeze wages; this may reduce costs in the short term but depressed wage growth can reduce incentives amongst employees and hamper productivity. It does seem that we are some way off the negative effects of deflation – Eurozone countries are slightly more concerned – but nevertheless even the mere possibility of falling prices can dampen investor sentiment and confidence. 


Counter measures will be good for business



or the past three decades, defeating inflation and achieving price stability have driven UK economic policy. Now, for the first time since records began in 1960, UK inflation has fallen to zero, down from 0.3% in January. It will, in all likelihood, fall again this month, resulting in deflation. From 2008 to 2012, inflation was allowed to run significantly above the Bank of England’s (BOE) 2% inflation target, without an aggressive interest rate response. The current flat rate comes as falling oil prices put the skids on prices. Business groups overall seem to be welcoming the news but uncertainty about future inflation could cause companies to delay investment. Low inflation makes the repayment of outstanding debt more difficult and could even be the result of something more sinister. There are signs, however, that the current situation won’t last. This fall in inflation hands the chancellor George Osborne a preelection boost as people go to the polls with more money to spend. He took to Twitter to write: “Inflation at zero is a first for the British economy. Low inflation due to falling oil prices is good news for family budgets.” British holidaymakers heading abroad this summer may not be so pleased as sterling was down 0.4% against the euro, but just how worried should British SMEs be by the news?

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The prospect of negative inflation or deflation might appear to be a concern for business but in reality the causes are more anomalous. If the economy does dip into deflation it won’t last for long as the prospect of long-term deflation Ivan McKeever, – where purchasers defer their purchase for CEO, fear that it will effectively become cheaper – SwitchMy has a damaging downward cyclical effect on the economy. The likelihood is that if deflation looks more than fleeting the Bank of England will start further quantitative easing and could possibly reduce interest rates to zero or even negatively from the current base rate of 0.5%. These measures would speed up the economy. However, this could create too much heat meaning increased interest rates, which will inevitably happen at some stage in the future, thus putting strain on company and house hold debt.  Measures which are taken to stave of the risks of deflation could actually be a good thing for business but the counter measures used to control potential rising inflation could be the hangover of a pleasant upturn for business. Low inflation should have a positive effect on wages. Assuming the average pay increase is 2% and the inflation is currently zero, this would equate in real terms to a pay increase of 2% above inflation.  This should counter the erosion of living standards caused by wage growth stagnation and high inflation experienced in the economy from 2008 – 2013.

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The Outside Edge – How outsiders can succeed in a world made by insiders Robert Kelsey

W 16

e perceive many people who shake up the system as outsiders. More often than not, they turn out to be nothing more than insiders with an attitude. Take Richard Branson and Mark Zuckerberg: both have achieved great success, not despite their backgrounds, but possibly because of them. They both benefited from privileged upbringings and are welleducated. This isn’t to say the underprivileged can’t succeed but it typically only comes after a long period of soul-searching and self-improvement. This is the premise of Robert Kelsey’s The Outside Edge. For every Branson and Zuckerberg, he says, there is a Steve Jobs – the adopted son of a garage mechanic – or a Howard Schultz – the son of a Brooklyn truck driver, who have overcome a series of obstacles to get ahead. But this is never an easy path and success is far from guaranteed. “Being a disadvantaged outsider is usually a one-way ticket to social exclusion,” writes Kelsey. The good news is that forging an edge is possible. In chapter seven, for example, he details how an entrepreneurial spirit is both enabling and curative, bringing with it a mindset that helps outsiders plan and achieve goals – “all while remaining uncompromisingly beyond the clan”.  Kelsey’s book is a welcomed dose of realism in the current zeitgeist of counterproductive David vs Goliath thinking of the Malcolm Gladwell variety. RMC

Generation Jobless? Turning the Youth Unemployment Crisis into Opportunity Peter Vogel


he face of the modern workplace is changing. Employees are working past previous retirement ages and five generations are now in the labour force. Meanwhile, as the world continues to recover from one of the worst economic crisis in history, unemployment rates across the globe are still disproportionately high and youth unemployment in particular is soaring. The youngest people in society are feeling the brunt with millions unemployed both in the developed and undeveloped world, causing Peter Vogel to speculate that tomorrow's youth could become Generation Jobless. Vogel quite rightly fears such a prospect and, with this book, he aims to engage community-driven individuals to share their experiences and solutions. Generation Jobless is structured in two parts: the first analyses the current trends in the youth unemployment crisis and the second showcases input by business leaders, scholars and thoughtprovokers to tackle the crisis. Generation Jobless is filled with case studies that highlight the fundamental differences between today’s youth that have grown up in the digital revolution compared to older generations who have become digital immigrants.  The first chapter is a little clunky but the book as a whole contains plenty of case studies and practicable solutions, which are vital in solving any crisis. JS

Publisher: Wiley Out: April RRP: £10.99

Publisher: Palgrave MacMillan Out: Now RRP: £22.99



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Enjoy 20% off your order with code MOOEB, expires 30th May 2015.

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Elite interview - Michelle Mone.indd 78

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The launch of her bestselling book, My Fight to the Top, means Ultimo founder Michelle Mone is firmly back in the spotlight. But what will the first lady of lingerie turn her attention to next? When I mee t Michelle Mone in the lobby of her apartment complex, she’s chatting animatedly on the phone. Ending the call, the immacu-

lately dressed entrepreneur ushers me towards the elevator that will whisk us up to her riverside penthouse apartment in one of London’s most desirable buildings. “Waking up next to the water was always a dream of mine. I love it here,” she muses. We settle in the living room and admire the view of two of the city’s iconic landmarks, Tower Bridge and the Shard, as she eats a salad. It’s no surprise she’s short of time. After all, she’s a woman in demand: since her book launch the week prior to our meeting, her schedule’s been packed with press interviews, book signings and speaking events. It’s a far cry from her Glasgow roots: as a child, Mone could only have dreamed of the trappings of fame. Whereas she now sleeps in a room directly opposite the Shard, Mone's first bedroom was the broom cupboard. “It was where we used to keep the mop and the shovel, pots of paint. My mum moved out all this crap and turned it into my bedroom. My dad cut about a foot off my single bed so it fitted in and then he lowered the ceiling and put shiny stars on it,” recalls Mone. “I used to lay at night just looking up at the shiny stars and thinking that I wanted to start my own business one day.” She didn’t have to wait long. Mone started her first business delivering papers at ten; by 11 she had 17 teenagers working for her. At the time, her parents were struggling. Their second baby died of spina bifida shortly after birth and her father was suffering from an illness that left him paralysed. Understandably, the budding entrepreneur was desperate to improve her family’s quality of life. “I used to watch Dallas and Dynasty and dreamt about buying my mum and dad a house and a car,” she says. Mone left school at 15, having decided she wanted to earn money to help support the family now that her dad couldn’t work. “In the household it was just horrible, as you can imagine, and I just thought, ‘I can’t concentrate at school anymore; I need to go and start earning money.’”

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After trawling the dentists and doctors surgeries in Glasgow looking for a job to no avail, Mone was spotted by a modelling agency. “They said, ‘do you want to walk up and down a catwalk?’” She started doing promotional work, which included a gig for the James Bond film, A Licence to Kill. At 17, she met her husband, Michael, marrying him two years later, whilst pregnant with her first daughter, Rebecca, now 22. “That’s when I thought, ‘I need to get some business experience,’” recalls Mone. She started working in admin for Labatts, the beer company. She worked her way up the ranks and within 18 months was running sales and marketing for Labatts in Scotland. But shortly after her son Declan, now 18, was born, she was made redundant when Labatts was sold to pub company Whitbread. “I thought to myself, ‘What am I going to do with my life now?’” She didn’t have to think for too long. Soon after her redundancy, she attended a dinner-dance with Michael and was wearing an uncomfortable cleavage-enhancing bra. That night Mone decided she was going to invent a new bra. In her book, she recounts that husband Michael had his concerns about her clothing design capabilities. “‘What do you know about bras?’ he laughed. ‘I’ve got a pair of tits – I’ll figure it out,’” replied Mone. This can-do attitude is what got the entrepreneur through the next three years of work that went into the invention of Ultimo bras. “I was learning on the job. I was £480,000 in debt, my house was up as security to the bank and I had two kids,” she says. Whilst in the early stages of the business, she also became the European distributor for breast enhancers that had become a smash-hit in the US. Costing an eye-watering £150 a pair, Mone targeted high-end lingerie chains such as Rigby & Peller with her gel pads. The press attention reached fever pitch. “Everyone wanted to know who this woman was who’d launched these ‘chicken fillets’.”

Mone did all of her own PR – to this day she believes that PR companies are "crap" and that she can do a better job herself. Her media savviness came into play yet again when her bras launched into Selfridges in August 1999. “I had £500 left for the launch and I had no idea how I was going to launch a bra with so little money – you can’t even get an advert in your free local magazine for that,” she exclaims. What Mone did next has gone down in PR history. She hired 12 actors and dressed them up as plastic surgeons waving placards protesting that her bras would put them out of business. It had the desired impact: “We sold six months’ stock in five hours.” And the appetite for Ultimo’s boob-boosting product ranges extended far beyond the UK. “That’s where it started but then we launched in Saks Fifth Avenue, we launched in Australia, we launched in Canada. It was crazy. Everyone said, ‘You can’t do it,’ and I’ve always said, ‘Yes we can.’” Despite the success of the brand, things weren’t all rosy behind the scenes. Juggling a rapidly growing business and care of the couple’s three children (youngest daughter Bethany, now 15, was born four weeks before the Selfridges launch) was taking its toll on Mone. She began to comfort eat and gained eight stone in weight. There were bigger problems still in the business. The husband and wife team that had been appointed as the company's US distributors did a disappearing act with six months’ stock and owing Ultimo £1.3m. “I got into this horrible, dark, lonely place where nothing was looking

good,” confides Mone. “I was so depressed. The banks were going to come in and shut us down. I was going to finish it all off, just take some pills and forget about it all.” Then she remembered a conversation she’d recently had at an event with former HSBC chairman Sir Keith Whitson. “He’d given me his card and said, ‘If you ever need this one day, please come to me.’ I remember I was just about to take the pills and then he came into my mind. So I ran and picked up the phone and called him.” With just 15 minutes to spare before being declared bankrupt, Sir Whitson came through. “He called about 15 minutes before they were

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p.22/ wanted to give readers a warts and all account of life as a successful entrepreneur. “There are a lot of business books out there that just talk about KPIs and CTPs, about management and leadership, but they don’t speak about what it’s like being an entrepreneur. That’s why I felt I needed to speak about my personal life.” Her personal life also came to affect her professional life after news of an affair between her husband and an Ultimo designer came to light in 2011. “The business came crashing down. People were leaving, customers were frightened to order. It was like war of the roses in the house and World War III in the office,” Mone explains. For the next 18 months after the separation, the newly separated couple tried in vain to find a buyer for the business. All the offers they received had a common theme: “Everybody that wanted to buy us wanted me [as part of the package] and I thought ‘I’m not getting tied into these companies.’” If Michael wanted out of the company, Mone would buy him out. “I thought ‘No, fuck you. I’m not going so you can benefit from what you did,” she said, referring to his extra marital activities.

Mone bought ou t her e x-husband of 22 years on Feb-

coming in to shut us down and said, ‘Welcome to HSBC’.” That was the beginning of the business’s return to good health. It was given a further boost by what was dubbed ‘bra wars’ in the press: first Penny Lancaster, married to rocker Rod Stewart, was signed up as the face of Ultimo, followed two years later by Rachel Hunter – Stewart’s ex-wife. It was Hunter that inspired Mone to take control of her spiralling weight problems during a shoot on a Miami beach in 2005. “We were the same age and yet we couldn’t look more different: she looked amazing and I was a size 22. I was so down.” Hunter suggested Mone think about her health in a context that might make it easier to tackle. “She said to me, ‘Why don’t you treat your body like a business?’” This pep talk galvanized Mone into action: she lost eight stone over the next four years. She’d promised Hunter that she’d do a photoshoot if she reached her target weight so she did just that – and released the photographs to the press. “I was the first CEO to ever strip. But it wasn’t like I was selling mobile phones – I was in the lingerie industry and I think the pictures were really tasteful. But my husband went nuts.” Mone says this was the “nail in the coffin” for her and Michael, though the rest of their troubles are documented in her book. “I’d never, ever before spoken about my personal life. This is the first time.” She says she

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ruary 6, 2013. She immediately began looking for new partners and settled on MAS, a Sri Lankan lingerie conglomerate that employs 63,000 people. After an epiphany in June last year, she sold 80% of her business to MAS. “I woke up one day and thought, ‘Something is missing from my life.’” She spoke to her partners and brokered a deal whereby they’d buy the controlling stake, she’d retain a few shares, still sit on the board and work with Ultimo six days a month. It’s an arrangement that continues to this day – and one Mone is happy with. She spends a large chunk of the remaining time giving speeches. She is in high demand, speaking in Dubai, the States, South Korea – and spoke at the Elite Business Event National Conference & Exhibition last month, where she received a standing ovation. “I want to inspire people and convince them that they can do it, whether it’s turning around their business or their weight and fitness. I want people to see that this is where I was and this is what I did once I got into the zone,” says Mone. “I could have died in a corner. I could be in a council flat. But now I’m in one of the best penthouses in London, I’ve got my homes in Scotland, and my weight and fitness is under control. I’ve got rid of all the bitterness, the demons. I love speaking to people and saying, ‘Whatever is wrong in your life, only you can change it.’” Having met Mone before, I can attest that she is attacking life with renewed vigour. Like many authors of autobiographies, she says she found working on the book a cathartic – if slightly painful – experience. “I could write a book about writing a book,” she laughs. “At times, it was very difficult. I was drinking too much wine to get through it.” Besides her public speaking gigs, she has great plans for the future. Having bought UTan out of Ultimo, she is 100% shareholder and CEO of the tanning brand which launched into 500 Boots stores last month. She also talks animatedly about potential plans for an events company and even a communications agency. “There’s so much more that I want to do. I have so much energy. I get four hours sleep a night and then I’m wired all day thinking about the next idea. I’ve just got all these lightbulbs going off in my brain.” One thing’s for sure: whatever else Mone does next, she’ll give it 100%. She’s not about to rest on her laurels just yet. “I’ve not been part of anything that’s failed yet. Maybe that’ll happen but I’ll do my damndest not to make it happen. I’ll never, ever become complacent,” she says.

31/03/2015 22:37

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s many as two million sole traders and small companies missed out on £1.5bn of online sales in a single weekend last year, according to the Department of Business, Innovation & Skills. Online retailers had their best ever year as consumers spent £1 in every £4 online, say Capgemini. Nettl, the new network of web design studios is supporting small businesses with a free one-hour consultation for 100 entrepreneurs and startups in each city and a £500 grant (€600 in Ireland) towards a Nettl commerce web shop. Many UK small and medium-sized businesses totally missed out on cyber spending of up to £500,000 a minute in December and January sales due to their lack of online presence. According to research by BIS, more than half of customers (55%) say they find it hard to support local businesses when they simply can’t find them online. “Even those that do have an online presence, over two-thirds are non-transactional,” says Simon Devonshire, from BIS. “Our clients tell us they know they need to sell online, but find it

£500,000 website grants for SMEs difficult knowing where to start,” says Peter Gunning, chief technology officer of Nettl. “They hear about how expensive web development is and worry they’ll get ripped off. It’s Nettl’s mission to remove the mystery surrounding ecommerce and help small businesses just start selling online.” “To show our support for SMEs we’re offering local businesses who sign-up for a no-obligation consultation, a £500/€600 grant towards the cost of their web shop,” says Gunning. “At their consultation we’ll learn about their business and discuss what they want to achieve. Afterwards, we’ll set out our recommendations in a proposal,” he adds. “We’ve already met lots of small businesses and they tell us they like Nettl’s down-to-earth approach. Which is nice.” Nettl have put together a guide called Exploiting Ecommerce. This covers the anatomy of a web shop, winning with Click & Collect and fatal mistakes businesses make. Elite Business readers can download free at


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31/03/2015 21:39




In streamlining background checks, Onfido has enabled start-ups to have confidence in their new hires without investing too much time or money


rust is an essential ingredient in find out just how many institutions were entrepreneurial circles; if you don’t struggling with protracted and costly know who you’re working with or background-checking processes. At the time, investing in, you will be exposing yourself to Jubbawy and Kassai acted as vice-president unnecessary risk. When carrying out this kind and president of the student entrepreneurship of due diligence, background checks will be a society Oxford Entrepreneurs and they had key part of an entrepreneur’s armoury and yet to tour a range of organisations such as they have failed to keep a pace with the world banks, consulting firms and SMEs to raise of modern business. Waiting weeks and weeks sponsorship for the organisation. “After to find out if your potential new director passes the sponsorship conversation, we thought muster is a hold-up we’d ask: ‘how do you no start-up can bear. currently carry out Fortunately, new player background checks?’” Onfido uses automation says Kassai. “The to cut the time and recurring themes capital businesses and pain points were must invest in running always exactly the background checks. same: turnaround Like all truly great times, cost and the start-ups, the idea for quality of the checks.” Onfido was born from This led the founders personal experience. to consider how they Co-founders Eamon might be able to Husayn Kassai, Onfido Jubbawy, Ruhul Amin improve things and and Husayn Kassai met the answer was pretty whilst attending the University of Oxford. It clear. “About 80 - 90% of the traditional was when Jubbawy and Kassai, both studying background checking processes are manual,” economics and management, started summer Kassai says. “The vast majority of this stuff internships at Credit Suisse and Merrill Lynch can be automated.” Currently background respectively that they learnt how drawn out the checks tend to be handled by data processors; existing process was. “We were background they manually enter applicants’ data from checked and we started an excessively paperforms and push key info to certain data based and cumbersome process that took two suppliers, before chasing and collating to six weeks,” says Kassai. “You hardly ever responses into a complete pack. need to print out forms and write your name There are obviously several clear problems out anymore so this wasn’t an industry that with this. First of all, employing data seemed to be part of the 21st century.” processors significantly raises the costs of On their return to university, the future carrying out background checks. Another Onfido founders had an opportunity to problem is there is a higher risk of error


Background checking wasn’t an industry that seemed to be part of the 21st century

One to watch.indd 1

31/03/2015 22:38

It’s just terrific having these high-profile individuals giving endorsements, referrals or advice Husayn Kassai, Onfido

Ruhul Amin Eamon Jubbawy

One to watch.indd 2

29 Husayn Kassai

than with an automated process. “Having to type something two or three times, where you naturally have human-based risks, makes the process much more error prone,” says Kassai. Finally, this method is also far more timeconsuming, severely delaying responses and meaning customers can’t see the results until a full report has been compiled. Onfido realised the huge value that could be created by streamlining and automating this process. “Through live feeds we’ve integrated with all the data suppliers,” Kassai explains. “The applicant provides all of the information and we automatically trigger the process.” As the start-up’s service connects digitally with the various agencies and stakeholders, this enables them to serve results direct to customers as soon as they are processed. “We present them to the customer live, so they can see instantly once an identity has been verified or a right to work has been confirmed,” continues Kassai. And it wasn’t too difficult for the young start-up to get off the ground; not only did it secure some seed capital from the University of Oxford but it had a ready-made customer base pretty much off the bat. “Our first customers were the Oxford Entrepreneur sponsors,” says Kassai. The co-founders returned to the institutions and SMEs they had visited and told them they had created a service that dealt with the pain points they had helped identify. This has certainly stood the start-up in good stead. “From the early days, we were able to show good traction because we had customers who paid for and valued the service,” he says. Very quickly the start-up found there was huge demand for its service. “It’s good timing,” Kassai says. “Be it a growing migrant

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Company CV Name: Onfido Founded by: Husayn Kassai Ruhul Amin Eamon Jubbawy Founded in: 2012 Team: 28

Typing something two or three times makes the process much more error prone Husayn Kassai, Onfido

One to watch.indd 3

workforce, increasing legislation or the expanding jobs market, background checks are becoming a lot more common.” Onfido also found that there was a natural opportunity for its service to support a range of non-traditional industries. “We are increasingly becoming part of the backbone of the sharing economy,” he says. “Trust is such a core element; you can’t have a stranger coming and being a tutor to your child, sharing a car with you or cleaning your home if you can’t trust them.” But this isn’t saying the whole journey has been a cakewalk; dealing with this kind of data obviously requires a lot of checks and balances. “You’ve got to be registered with the data commissioner and there are licenses to be had from the data suppliers,” says Kassai. “You also have to show you’re credible; you have to have a very secure premises and cloud servers.” Onfido is obviously required to go through significant due diligence processes with customers, particularly large institutions like banks. But partly he feels this is just the cost of blazing a trail; as Onfido forms more established relationships with certain sectors and organisations, this becomes significantly easier. “When you’ve done it for a highly sensitive industry or customer once, then they become significantly more comfortable with it.” A lot of thought has gone into creating Onfido’s pricing model, reflecting the requirements of its customers. “SMEs, ondemand services and shared economy startups are not in a position to plan over the next 12 months how many people they’re going to hire,” Kassai says. Whilst many backgroundchecking services rely on lengthy, high-volume contracts, Onfido has focused on creating a much more granular payment structure. “We’ve made it quite flexible,” he continues. “As and when they want to, businesses can come online, pay for a specific check, use it and then come back later.” And this plug-and-play approach isn’t limited just to the checkout. “As an SME, one

day you’re just hiring a junior level associate, the next a potential manager,” Kassai says. Onfido provides a broad range of checks from basic identity or right to work checks up to negative media and directorship checks, meaning customers can select the checks that suit the roles they are hiring for. “Depending on the risk profile and the importance of that role, you can pick and choose the core checks, whereas for more senior roles you can opt for the works,” he says. These factors have definitely proven to be a hit with customers. And, within certain industries, the word of mouth this has generated has allowed Onfido to scale up very rapidly. “The sharing economy is a small community, they’re all tech-driven and they all learn from each other,” Kassai explains. “They typically put our logo on their website to deter risky applicants and signal credibility to their customer base.” And even in more traditional sectors like banking, the nature of Onfido’s work means it often comes into contact with established players. “When we do checks, we interact with other companies to verify other information,” he says. “We’ve had quite good exposure and uptake on that front too.” The start-up also has some seriously heavy artillery in its arsenal in terms of advisors and investors. Not only does it have backers who have been directors at big corporates like Google UK and Waterstone’s but it also has the support of entrepreneurial royalty such as Brent Hoberman, co-founder of, and Greg Marsh, co-founder of Onefinestay. “It’s just terrific having these high-profile individuals as investors, giving endorsements, referrals or advice,” says Kassai. “And we’ve got quite a few very senior advisors from the background-checking industry.” With this kind of fuel in its engines, it seems likely that Onfido will go far but Kassai has no illusions he and his co-founders can afford to rest on their laurels. “We have so many plans and so many things to do,” he says. Not only is the start-up planning to add additional products but it is also looking at expanding its geographical reach from 28 countries to a target of 35 by the end of this year. So, all in all, you can take it on trust: Onfido’s stock is only set to rise from here.


31/03/2015 22:38


GENERAL ELECTION Which political party has SMEs’ interests most at heart?

Analysis.indd 1

31/03/2015 22:39



onfidence among businesses all over the UK is on the up. SMEs are doing well and they want to keep it that way. With election fever heating up, entrepreneurs have a crucial decision to make as to which party, if any, best represents their interests. Small business owners have been making it quite clear in recent months exactly what policies they want the next government to concentrate on in order to realise their goals, and it seems the parties have taken heed. Businesses in England pay higher rates than anywhere else in Europe and so rates as well as regulation reform are popular policies, as are tax simplification and help with finance. Whatever your preference, it is clear that everyone wants policies which are founded on long-term prosperity and a business environment that makes it easy for SMEs to plan and invest. Just last month, every major party attended a debate at the ICAEW, organised by Enterprise Nation, to win the hearts of entrepreneurs. Although the Conservative Party came out on top by a significant margin, anything’s still possible. Which party do you trust to improve conditions for your business?

WORDS: Ryan McChrystal

The Conservative Party

Win or lose at this election, Cameron’s coalition government will be remembered for many things. A recent publication by Cambridge University described the prime minister as ‘more radical than Thatcher; sexier than Blair’. Sexy or not, there may be some truth in the Thatcher remark as Cameron’s improvement of the economy from an historically weak position has come at a price. Austerity was damaging to many, not just those on the bottom of the scale, and some low and middle income earners are only now seeing any benefit from the recovery. The NHS suffered, although not as badly as some claim, but Britain’s legal system is in a mess and small businesses have cause for concern (see p91). “We have a very clear plan: if we are re-elected, we want to make Britain the best place in the world to start and grow a business,” said Matthew Hancock, the business and enterprise secretary, at the ICAEW debate. Step one is tackling business rates. “When we came to office, the plan was to end small business rates relief and we have maintained it.” When George Osborne delivered his autumn statement last year, he announced that business rates relief will be doubled for a further year with discounts of 50%, meaning a possible £1,500 respite for 500,000 small businesses. In the final budget of the current government last month he

confirmed that the government will carry out a review of business rates after admitting the system “has not kept pace with the needs of a modern economy”. The Conservatives have lauded the transfer of power and budgets to cities in the North. Osborne’s budget also revealed something we have known about for some time: a “provisional agreement” to allow Greater Manchester to keep 100% of the additional growth in local business rates in a move intended to help create a northern powerhouse. Similar to the Liberal Democrats, the Tories have hailed the Regional Growth Fund a great achievement and are in support of the proposed high-speed rail line between Manchester and Leeds. The incumbent government – especially the Conservative contingent – are also intent on cutting regulation and won’t let red tape “get in the way” of doing business. Under this administration the UK has seen an additional 760,000 small businesses set up shop. “Our plan now involves not only making sure that we deal with the country’s debts but that we face up to the long-term problems, improving exports, making it easier to employ people,” Hancock says.


When we came to office, the plan was to end small business rates relief and we have maintained it Matthew Hancock, the business and enterprise secretary

Analysis.indd 2

31/03/2015 22:39


The Labour Party


All the established parties in Westminster have had a bit of a bad year. The Labour Party has seen its support drop, leaving it not much popular than it was at the time of the last election, and look how that turned out. Regardless, it has been consistently narrowly ahead in the polls and if elected – most likely in the form of another coalition – it says it will set up a US-style Small Business Administration (SBA). The body would assist entrepreneurs and small businesses. Labour has also committed to increasing competition in banking by bringing at least two more challenger banks onto the high street. The party has committed to cutting business rates in 2015 and then freezing them in 2016 for over 1.5 million business properties, which shadow chancellor Ed Balls said would create a “fairer” tax system. Interestingly, despite all the furore over moral obligations to pay tax, the party has promised to keep corporate taxes “competitive” if it wins the election. When it comes to red tape, Toby Perkins, Labour’s shadow minister for small business – himself the former owner of three SMEs – has promised small businesses “a regulatory framework you can trust”. “An approach that says all regulation is bad is a cowboy’s paradise,” he explained. “We need to make sure that the regulations we have are actually useful, but if you don’t enforce those regulations once they exist, what you end up with is those compliant businesses being disadvantaged against those who don’t follow the rules.” On the issue of late payments, Labour will “stand up for small businesses”. Labour also has no plans to raise taxes on SMEs. Childcare is one of the major stumbling blocks for women re-entering the workforce, and costs have risen by 150% over the last decade. A recent study by the National Centre for Social and Economic Modelling, which is attached to the University of Canberra, found that tackling these costs would be a more effective way of boosting female participation than the current government’s paid parental leave scheme. It will be welcome policy for many that Labour pledged 25 hours’ free childcare for three to four year olds and would

Analysis.indd 3

make primary school hours stretch from 8am to 6pm. Perkins says supporting women in work could be enough to single-handedly tackle the deficit. The Liberal Democrats

The Liberal Democrats have spent much of the last year in single figures on the polls, which is their worst performance in nearly a quarter of a century. It’s no wonder party leader Nick Clegg says he can’t sleep at night over the party’s broken pledges on scrapping student fees. The main question business leaders need to ask is, ‘do the Lib Dems actually have any credibility left?’ If the answer is yes, you may be glad to hear that it has pledged to cut down on red tape. To tackle the uncertainty over Toby Perkins, Labour MP regulations, the party is seeking to establish a Regulatory Advisory Board. Regulation should be designed in such a way as to promote low carbon and energyefficient innovation, it has said. The Liberal Democrats have said that they will review business rates, which are a “disproportionate burden” on small businesses, and look at finding alternatives. Another hotly contested topic is how to close the gender pay gap, which under the current government has fallen to its lowest level, at just under 20%. The Lib Dems say this is still 19.1% too high and if they form part of the next government, this will remain a priority.

Labour will stand up for small businesses

31/03/2015 22:39


Between them, UKIP, the SNP and the Green Party have the support of more than a quarter of the electorate. But how do their business pledges hold up? The Green Party

Despite popular belief, the Greens are pro-business. Details are still scant about their small business manifesto but it is clear the party recognises the importance of local enterprise. In fact, it would allow councils to impose extra rates on out-of-town supermarkets and the pot will be used to fund smaller local firms. A cut in rail and bus fares by an average of 10% would also help those firms using public transport. The Green Party has promised to simplify PAYE by aligning the lower National Insurance limit with personal allowance and abolishing the upper limit. It is committed to ensuring that no contract with a selfemployed person can pay below minimum wage, and to amending planning laws to Howard Allen, Green Party allow appropriate small businesses to operate councillor in residential areas and ensure all large and new retail developments include spaces for small and local businesses. The main thing that sets the Green Party apart is its commitment to ending the policy cuts. The party spokesman on business, innovation and skills, Howard Allen, says: “We’re the only party that is anti-austerity; austerity has failed and was only meant to last for four years.” He adds that the Greens are committed to tackling the problem of living standards, introducing a living wage and reducing tuition fees “so that people can spend money in small businesses”. As with all other parties, the greens recognise that regulation is a problem and will aim to help SMEs deal with it as well as providing tailored advice on energy efficiency.

We’re the only party that is anti-austerity

Other policies include providing help for small rural businesses and the introduction of a network of local community banks, which will provide “a new source of finance for small businesses”. UKIP

If the Tories are the party of big business, UKIP thinks of itself as the party of small business, although judging by a recent poll of small business entrepreneurs at the ICAEW, very few are convinced by this rhetoric. UKIP’s small business spokesperson, Margot Parker, says that the small business community is burdened by massive regulation, particularly from the EU, and unnecessary costs. “Small businesses need to be able to become profitable and I know this is damned hard,” she says. “Our policies are geared towards getting rid of restrictive practices.” This would include simplifying planning regulations and licences for empty commercial property vacant for over a year and lowering taxation. UKIP also wants to increase free local parking and look into how education can create a more skilled workforce. On late payments, Parker says that while a directive is in place, it doesn’t do enough to help small businesses. “If you’re doing work for the larger companies, it’s the big boys that have the political and financial muscle to hold back payments.” She describes 60 days as an “outrageous” amount of time to wait to get paid and pledges change and adds that the cost of small businesses taking large businesses to court is much too high. The real litmus test for voting UKIP should be their flagship policy of leaving the EU. “Fewer than one in ten British businesses trade with the EU, yet 100% of them must comply with thousands of EU laws,” Parker says. “This burden is destroying small businesses and therefore helping to destroy our economy.”


For the first time in electoral history, SMEs have found a prominent place on the political agenda. With the two main parties neck and neck, any party could form part of the next administration. Whoever you vote for, it is important we all hold the next government to its promises on small business.

Analysis.indd 4

31/03/2015 22:39


Second chances

Failure needn’t be the end of your business. In fact, in some circumstances, it can actually breed financial success




Second chances.indd 1

ot everyone who has failed will become successful – not by a long shot – but anyone who has made a success of themselves has probably experienced a lot of setbacks in their career. Take Steve Jobs. The legendary entrepreneur and genius behind Apple is the most influential business person of our time. However, at the age of 30 he was left unemployed, devastated and deflated having been abruptly fired from the company he founded when a series of not-so-spectacular products flopped. And the rest, as they say, is history. Many SME owners experience similar reversals of fortune, especially early in their careers. Failure is just another part of business but it’s what you do when you’re down that makes the difference between becoming a Steve Jobs and a Steve Jobless. The founder of self-tanning brand TanOrganic Noelle O’Connor has a story which many accomplished Irish entrepreneurs who rose to prominence during the county’s Celtic Tiger period will find familiar. In 1995 she opened her first beauty salon behind a friend’s hairdressers with a £2,000 credit union loan. In 2000, she moved into her own premises and revenues tripled overnight. Between then and 2004 she opened more salons and had revenues of £3m. “This was with no debt at all from that first loan,” she says. It was around this time that she also set up a distribution company, supplying goods to around 1000 beauty salons, and was the first to bring mineral makeup to Europe. Everything was going really well – O’Connor owned ten salons and was preparing to franchise – but then the 2008 crash happened. It would seem that no matter how good a contingency plan you have, there are some problems you just can’t prepare for. “Our revenues dropped 80% and they just wouldn’t go up again,” she says. “It was like someone had switched off the lights.” She kept her salons open and, while trading continued, it was nowhere near the levels that it was during the boom. As a result she burnt through around £500,000 in cash reserves and things were looking pretty bleak. But you can’t keep a good entrepreneur down and with a firm support base around her, O’Connor got back on her feet. “They convinced me I could get up and do it again,” she says. “Without them, I would have thrown in the towel.” Licking her wounds, in 2009 she set about developing her own

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product. Frustrated by the absence of a 100% natural sunless tan lotion on the shelf, O’Connor spotted a gap in the market and came up with TanOrganic. “I’ve always enjoyed finding new concepts and being the first to market,” she says. A year later she took her creation to the Irish Dragons’ Den and secured support from Gavin Duffy, who has made his fortunes in the media and communications sector. “It’s a very simple product and he liked that,” says O’Connor. Despite one or two minor setbacks – the cork popped on the entire first batch of glass bottles sold during one of the warmest summers on record and it took a lot of calling around and apologising to customers to prevent disaster – O’Connor is now well on track to getting back on her financial feet. Getting back on your feet is one thing but finding your feet in the first place can be much more difficult. Stuart Miller is a serial entrepreneur and set up his first company, Octopus Information, with Steve Huxter back in 1993, aged 26. The idea behind Octopus was to provide busy professionals with a telephonebased concierge service to call for absolutely anything. Stuart spent six years trying to make the company work, however, it turned out to the the “mother of all niches” and after lurching

from one financial problem to another – “it was difficult to price a service that was so nebulous,” – he sold the firm in 1999. Miller and Hixter used the money to start his next venture ByBox in 2000, which was aimed initially at consumers as a locker delivery solution (consumers can have an online purchase delivered to their nearest locker bank for collection of a time that suits them). “We were smack bang in the middle of Silicon Valley because that’s where everything internet was emanating from,” says Miller. Two weeks later the Nasdaq crashed and the internet bubble burst. “We hung around Silicon Valley for a while trying to fix the mess and make ByBox work but we finally had to accept our losses,” says Miller. “I was then literally back to the dining room table.” Not wanting to give up, he continued with ByBox in Europe as opposed to the US, and redirected focus to offer a b2b arm – the idea being that businesses can have spare parts delivered out to field service engineers. “One of the biggest problems for a start-up is to be overfunded, and we experienced this first hand,” he adds. “If you raise money, one way or another you know you’re going to spend it and so you can go for quite a long time, rolling your plan out and doing whatever you’re doing without

One of the biggest problems for a start-up is to be overfunded Stuart Miller, Octopus Information

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necessarily realising what you’re doing isn’t quite right.” One thing ByBox got wrong was that it hadn’t worked out exactly who its customers were. Once they eventually did run out of money, the pair then realised there were successes to be made in a different market and in offering a slightly different service and through Miller’s perseverance and a re-defined offering, success soon followed. ByBox is now in its 15th year with revenues of £75m, offering more than just a delivery network; it also saves clients millions by revamping and streamlining their entire supply chain processes. The ByBox Group has received numerous accolades, including listings as a Sunday Times International Track 200, Sunday Times Tech Track 100 and Deloitte’s Fast50 business, thanks to its focus on perfecting the logistics technology involved in nationwide in-night delivery. Today the company provides locker-based solutions, not just here in the UK but for businesses across France, Benelux, the US, Israel, South Africa and New Zealand. We’re not sure how many people can say that Facebook’s Mark Zuckerberg nearly sent their business under, but we’re sure that very few can say that he nearly sent them under twice. “I can’t wait to meet him,” says Richard Jones, founder and CEO of EngageSciences, the digital marketing company. The first time Facebook nearly put the company under was right at the inception. “What we started off trying to build was a platform that allowed marketers to create interactive experiences like polls and surveys that they could

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drop across their website,” says Jones. “Due to Facebook’s rising popularity, no one was really interested in using their website as their main focal point for marketing and so everything we created for websites was not used.” The company very quickly changed tact and began creating apps for Facebook and helping brands engage with consumers through the social media platform. However, the social networking platform that we all know and love changed its algorithm in late 2013 which meant organic posts from brands were squeezed and ranked less highly than posts from family and friends. The organic reach of brand pages dropped from reaching 16% of their Facebook fans to an average of 3%. Facebook focused instead on encouraging paid media from brands. This meant EngageSciences had to change its business model to survive. In the first quarter of 2014, very shortly after the algorithm changed, EngageScience’s directors, led by Jones, agreed to re-position the business away from creating apps to helping brands transform their own websites into powerful social hubs by discovering, curating and publishing the best usergenerated content featuring their brand. Through creating social hubs it found it could deliver on average a 300% increase in the amount of time visitors spend on their clients’ websites and an 11% increase in web traffic. “I can honestly say I’m now glad that Mark Zuckerberg nearly killed my business,” says Jones. Admitting failure is never easy – especially in business, where people are lauded and rewarded for their success. As a result, we may be living in a culture where people don’t learn from failure. However, as the above examples demonstrate, this doesn’t have to be the case. By facing up to your mistakes or the whims of outside forces, there is no reason you can’t turn it around and get right back on your feet. In the words of the late, great Irish playwright, Samuel Beckett, in one of his more coherent moments: “Ever tried. Ever Failed. No matter. Try again. Fail again. Fail better.”

Ever tried. Ever Failed. No matter. Try again. Fail again. Fail better

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Five-minute money masterclass

Avoiding common pitfalls 42

Many things can spell trouble for businesses. Sometimes it can be a lack of customer interest. At other times it could come down to a bad advertising campaign. However, the biggest cause of business failure is poor finance management. Often it is the simple mistakes that have the most devastating impact. Therefore, it is worthwhile to know exactly what you should avoid. Here is just a short list of oversights that could lead to major, irrevocable issues

WORDS: Ryan McChrystal

Having no finance skills

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Many entrepreneurs lack a solid grounding in finance, which often leads to a misunderstanding of what it actually entails. “Finance is often seen as two ends of the spectrum; bookkeeping is regarded as an admin task for lower level staff who lack the level of understanding to deal with the complicated stuff that is best left to the accountant at year end,” says Serena Humphrey, founder and MD of The F Word, the financial consultancy. “This conspires to create a true black hole of finance skills in many small companies.” With five-year business survival rates barely at 40%, Humphrey believes a lack of financial skills could be partly to blame. “Any business I’ve seen get beyond that five-year mark has had a wake-up call and made sure they have proper finance skills in place.” “One vital thing they should understand is that anyone left to look after their money needs to be a suitably experienced and qualified bookkeeper,” she adds.

Using VAT and corporation tax as working capital This is something that many small businesses do, often with disastrous consequences. The problem is that most businesses see their VAT and corporation tax as something to be paid once a quarter or once a year, and in the intermitting period see it as part of their cashflow. “VAT is something you add to your sales and purchases although the net VAT which you pay at the end of the quarter is not your money,” says Humphrey. “Where most businesses go wrong is keeping this in their day-to-day cashflow, which can make them feel like they have more cash than they do.” The only way to manage your VAT is to put it away in a separate bank account as often as possible; monthly at the least, and weekly ideally. As for corporation tax, it would be a mistake to keep that extra cash in your account, which inevitably gets used up in cashflow. “Unsurprisingly when the annual tax bill is due, there isn’t enough cash to pay it,” she says.

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Just because a company is a major household name, it is no indication of their ability to pay Martin Campbell, MD, Ormsby Street

Not having a long-term plan For so many small business owners, planning anything beyond the short-term is a chore. This is not the ideal approach “You need short, medium and long-term plans with contingencies built in,” says David Banfield, president of IFG, the funding provider. “The art of running a business is not just about delivering a product or service; it is a holistic approach where every aspect of the operation must be understood and planned accordingly.” Establishing a clear financial plan from day one will help to keep your finances on track and ensure that your money is spent in the areas of your business that boost profits and give you the best return on your investments. Detailing your business’s sources of income and expenditure can tell you a lot about the financial health of your company, particularly when it comes to comparing forecasted figures against actual results. More importantly, developing and maintaining a budget helps you identify periods where cash flow may be restricted. “Looking at things with an even longer term view, your financial plan acts as a roadmap for the continual growth and development of your company,” says Banfield.

Martin Campbell, MD, Ormsby Street


Assuming your customers will pay on time The majority of small businesses assume that new customers can pay and will pay on the terms they agree. Sadly, this is rarely the case. Research last year by the Asset Based Finance Association (ABFA) revealed that that businesses with a turnover under £1m have to wait an average of 71 days to receive payment. “Just because a company is a major household name, it is no indication of their ability to pay,” says Martin Campbell, MD of Ormsby Street, which helps small businesses make decisions based on big data. “Some companies insist on long payment terms and then don’t even stick to those terms, and such late payment can lead to serious cashflow problems for many small businesses.” The best way to address this is by checking the financial status of every trading partner or supplier before working with them. “This can be done via Companies House, or also by using a free and simple tool such as CreditHQ,” he says. “This gives a strong indication of a company’s ability and likelihood to pay your invoices on time.”  Small businesses should also talk to other companies that trade with big companies or have done so, to see what their experience has been. Talking candidly about payment terms early in the contracting process is important in getting across the message that you won’t stand for late payment, as is the issuing of invoices ahead of time.

Serena Humphrey, founder and MD, The F Word

David Banfield, president, IFG

Relying on spreadsheets Many small business owners rely on spreadsheets to do their books. However, research shows that this often leaves them stuck in a cycle of spending hours each month getting annoyed and frustrated, trawling through reams of paper-based records. “Businesses waste a week per year dealing with spreadsheet issues such as understanding formulas, getting the numbers to add up and keeping version control,” says Rich Preece, VP and country manager of Intuit UK, the cloud accounting company. To address this challenge, many forward-thinking SMEs are starting to use cloud-based financial management software. In fact, the International Data Association believes that half of small businesses will be using cloud accounting by 2016. “Getting a complete overview of the company finances at the touch of a button enables them to make better informed business decisions very quickly,” says Preece. “For example, they might look back at their last quarter and decide it’s time to pay their staff a bonus or invest in a new technology solution.” 

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Rich Preece,

VP and Country Manager, Intuit UK

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Tricks of the trade CLIVE LEWIS

Before exporting, businesses should know how much finance will be required and where they can get it



Trade finance

When you start exporting for the first time you will probably need to use a range of new financing instruments. A letter of credit is an undertaking issued by a bank on behalf of a buyer to pay an exporter a stated amount within a specified period, provided certain conditions are met. These generally include receipt by the bank of various documents such as a commercial invoice, transport documentation and an insurance certificate. When the goods have been delivered to the specified location the relevant documents are sent to the buyer’s bank, which will then make the payment. Forfaiting is a form of credit whereby a bank or other third party effectively buys an export transaction, presented as bills of exchange. The forfaiter now has the contact with the buyer. The forfaiter pays the exporter for the goods – providing security to the exporter – and agrees a payment schedule with the buyer over a period typically between two and five years. With regard to revolving credit, if a business is established and has good credit and references, it can apply for a line of credit or overdraft from a financial institution and only pay interest on the money actually withdrawn from the credit line. Businesses that are well-established and have good credit history can apply for shortand long-term business loans from banks and financial institutions to meet capital needs. Invoice discounting and factoring can be used provided the buyer is credit worthy. Up to 90% of the invoice value can be received within 24

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hours of submitting an invoice. The balance, less the factor or invoice discounter’s costs, is received when the buyer pays the invoice.   Export credit insurance

The majority of international trade is conducted on ‘open account’ whereby the exporter accepts payment after the goods or services have been received by the buyer. Exporters face greater risks than sellers within the UK, because they may have no previous experience of dealing with buyers or because of political or economic uncertainties – or disasters – in the buyer’s country. It is therefore usual to cover against non-payment or other unforeseen events outside the exporter’s control. Risks covered might include: • Credit risk – the risk of non-payment • Pre-delivery and work in progress in the event that the buyer becomes insolvent or terminates the contract before goods are despatched • Unfair calling of an on-demand contract or

bond calling • Cargo risk if not covered by the logistics supplier • Liability risk for public/ product liability or overseas local statutory insurances. Exporting services

Trade finance and credit insurance requires specialised knowledge. So exporters will almost certainly be dealing with their bank’s specialist trade advisers. Export credit insurance is also a specialized field requiring brokers or insurance companies advising businesses on international risk mitigation. Through their knowledge of the market they can obtain the most appropriate cover at the optimal price. UK Export Finance is a government department which supports UK exporters by providing risk protection insurance, facilitating finance for exporters and supporting loans to overseas buyers.


s international trade involves buying and selling across oceans and borders with varying legal systems and cultures, a range of financial products and services have been developed to allow businesses to trade overseas with confidence. This is known as trade finance. Credit insurance is the overlapping field, covering exporters against the risk they will not be paid for a range of reasons such as political upheaval or simply default. Before committing to exporting businesses should evaluate how much finance will be required and where they will find that finance from.

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Here today, gone tomorrow We are in the midst of a retail revolution; brands are taking up temporary residence in abandoned shops, breathing new life back into the Great British high street.

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he nation’s high street shops are dropping like flies. Thanks to the recession and a digital revolution, many of the UK’s busiest shopping districts are now ghost towns, with boarded up windows. Indeed, research by The Local Data Company found that high street shops are closing at a rate of 16 per day. But from the ashes of traditional retail, a new type of shopping experience has arisen – this era belongs to the pop-up. Pop-ups can be a temporary shop, mobile stall or brand experience that sells products or services for a limited time period. Whilst the concept of pop-up is nothing new – for centuries retailers have set up stalls and travelled from town to town – pop-up retailers have proliferated up and down the UK in recent years to help revive dwindling high streets. Whilst they are temporary by nature, their presence is becoming permanent as a key driver of innovation in the retail sector. Their worth is not to be sniffed at: with a value

of £2.1bn to the UK economy and a projected growth rate of 8.4% over the next year, pop-up retailing is redefining the marketplace. “Every year we see it become more mainstream – now you see mainstream brands using pop-ups as part of their strategy,” says Abigail Freeman, director of projects at We Are Pop Up, a platform to connect businesses and brands with short-term retail space. Pop-up retailing can be utilised by brands of all sizes; industry leaders including Nike and Google are incorporating pop-up stores into their marketing strategies to help launch new products. The format has many benefits for brands who want to test the market and their company or new product’s viability, and actively engage with their customers before committing to a long-term space. “Pop-ups are brilliant if you are a startup,” claims Elly Harrington, co-founder of Porridge Café in London. “You don’t need the amount of investment and risk involved in opening a permanent place. “It’s just a great

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way to try things out,” she adds. Harrington and her partner Nik Williamson, founder of The Bow Street Kitchen, launched London’s first porridge café after being offered a space there by We Are Pop Up. The duo are in good company in their neighbourhood: east London’s Shoreditch has been crowned the hub of trialling brands, home to diverse creatives and new innovative brands emerging both temporarily and permanently. “It’s been amazing for networking, meeting people and getting your ideas out there. The locals have been really receptive to what we are doing and they’re quite intrigued,” reveals Harrington. Her café serves up more than just your average oats and milk, offering 25 different varieties, including both sweet and savoury porridge dishes, and it trials five new dishes per day. In case reading this has left you with a craving for its oaty wares, we’re sad to say Porridge Café has already packed up its cereal boxes and left. Harrington and Williamson chose to pop up for just one month during March. However, there is some good news for Londoners: “We’ve got a few offers sat on the table at the moment, off the back of being here and people seeing us in the press. We’re just weighing up the best place to pop up next,” reveals Williamson. He remains tight-lipped about the prospective location but felt that the success of their time in Shoreditch will lead to them testing other

With a value of £2.1bn to the UK economy and a projected growth rate of 8.4% over the next year, pop-up retailing is redefining the marketplace

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locations. Popping up offers companies the chance to trial locations for the right retail presence for their brand. Pop-up retailing holds many benefits for brand testing but the nature of retailing hasn’t quite caught up to the needs of this industry to support start-ups. Harrington admits that renting a coffee machine was the pair’s biggest challenge. “It’s quite unusual to have a coffee machine for a month and it’s not something that’s really done in the industry.” Thankfully, Harrington, who is from the Lake District, knew a great coffee producer there who managed to pull some strings. “I think they were quite keen to get into east London – they lent me the machine and the beans as well,” she says.  Roger Wade, the brains behind Boxpark, a pop-up shopping mall made of shipping containers in Shoreditch, is leading a petition along with 600 people to call on the government to help small independent retailers starting up, by giving small businesses rates relief in their first three months. As former independent company owner himself, Wade understands the needs of brands starting up and through Boxpark he offers a one-week free pop-up for small companies as well as a free launch event, 52 weeks a year.  Wade is a firm believer in building a good customer experience with a brand; he believes that retail is shifting back to its founding principles of having positive engagements with customers. “We’ve got to make sure whatever we do has a customer experience and it has to be special. And that experience in pop-ups means limited edition products for a limited amount of time and makes the customer feel like they have a special experience,” Wade states. “I don’t see pop-up as a phenomenon, I think it’s here to stay. It’s not just a fad.”

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“The word ‘pop-up’ has taught us that the future of retail is going to be about creating these special experiences. I think first and foremost, retailing is entertainment and people love going to shops. Shops have got a very bright future,” Wade predicts. Wade has just announced that he will be building another Boxpark mall in Croydon, the largest borough in London. It will have the same retail space, but double the space for events. “We have been really influenced by Covent Garden: we’ve looked at the old ways of retailing. We’ve got to first and foremost create entertainment,” says Wade. “Entertain that customer, make sure they want to come to wherever we build and if they shop that’s great but first and foremost we must deliver entertainment, and the rest will happen organically.” Even e-tailers who’ve built entire businesses around the online experience are going back to their roots. “Online-only businesses who are coming offline are a big segment for us. Pop-up is brilliant for them; they can come offline and get more brand awareness with a physical presence,” says Freeman. “Some brands like to educate their customers in a way that they can’t do online.” We Are Pop Up has launched Shop Share for the smaller businesses that want to break into retail but can’t necessarily meet the rates of individual leases. “It’s a brilliant way to collaborate with brands in a new way that wasn’t possible before,” says Freeman. “We

are very excited to see the new technology coming through to make the O2O [online-to-offline] experience for vendors much more seamless and easy to do.” Convergence of online and offline channels is all part of creating a more positive customer experience; it is what is now expected of retailers. “It’s not a question of online or in store; the future is both worlds. It’s amalgamating those worlds and creating a seamless customer experience that works,” says Wade. You can now analyse behaviours in a store in the same way that you use Google analytics: facial-recognition footfall trackers can now analyse customer shopping behaviours across online and offline channels. “It’s very exciting that technology is getting more and more accessible to small and early stage brands,” Freeman notes.

The word ‘pop-up’ has taught us that the future of retail is going to be about creating these special experiences Roger Wade, Boxpark

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Ethical enterprises With more businesses wanting to be seen as eco-friendly and goodhearted, many have put solving social problems at level pegging with boosting shareholder dividends 56

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One in five UK SMEs are motivated by a social purpose to benefit the world around them


he UK has been hailed the global hub of social enterprises; one in five UK SMEs are motivated by a social purpose to benefit the world around them. Consumers themselves are becoming increasingly ethically conscious and 39% of UK adults surveyed as part of a publication in June 2014 said they based their buying decisions on the ethical practices of the business in question. With 5.2 million businesses in the UK to choose from, consumers are enticed into dealing with those with ethical practices that are implemented across the board – not just social enterprises. As a nation, we are seeing the rise of the social entrepreneur – and we don’t mean in the reply-to-all-tweets sense. Social entrepreneurs set up their businesses to solve social issues. They are game changers that seek to make a difference with their products sold or the projects they reinvest their profits in. Businesses big or small can make a difference to society with simple ethical practices and, for the many implementing them, the practices are normal. The businesses featured below are led by social entrepreneurs who seek to make a real positive difference to the world.


The only way is ethics

Paving the way for social entrepreneurs, Lush is widely considered to be one the of the UK’s most ethical retailers. The brainchild of Mark and Mo Constantine, Lush is renowned for its natural products and extensive list of ethical practices. Its fundamental founding principle is the profound avoidance of animal testing. “We are absolutely vehemently opposed to it. If it meant shutting the business, we’d shut the business before we animal tested,” says Hilary Jones, ethics director at Lush. “We run the most stringent animal testing campaign. As far as is humanly possible we check, we doublecheck and we audit to make sure nobody in our chain is involved in animal testing. We do believe in this really strongly; it’s what runs through our veins.” “Our ethics are about us feeling comfortable with the kind of company that we are running,” Jones continues. Lush is constantly evolving its ethical policies in line with the changing needs of its suppliers and customers. When it discovered that by using palm oil it was contributing to the destruction of orangutan habitats, it eliminated palm oil from its products and is now working on a way to use the product without adding to

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the devastation. Lush would rather use its buying power to persuade suppliers to practice ethically where possible and its SLush charity was launched to support suppliers by creating better working and living environments, funded by 2% of Lush’s product and packing spend. “We don’t just take into account the labour accounts and the working rights, but also the environmental problems,” says Simon Constantine, head of ethical buying at Lush. “By initiating our own projects and working with people, we tend to be working around permaculture techniques” reveals Constantine. “In Kenya, farmers can grow their own food but they can also use geranium as a crop to intercrop, so in between they can grow geranium which helps to fend off pests, and when the time comes to harvest the geranium, we distil it for essential oil and we can use that essential oil in our products.” Lush prefers to be personally connected with its suppliers and its SLush charity, along with its charity pot product, has helped communities and charities immensely. Many consumers have begun to boycott large companies that avoid tax but Lush holds a strict stance on its tax and even taxes its air miles as it believes that the aviation industry should be taxed. Its self-imposed tax is donated to charities campaigning for the aviation change. “Many of us within Lush really strongly feel that your taxes contribute to society and, as a business, you should be contributing to the society that you are trading from. All of us retailers are sitting on high streets that have been built by tax money,” says Jones. “Our main stance is trying to be as open and transparent for customers so they can make their mind up,” Constantine adds.


Holding up local economies

Cornwall is a county that relies deeply on tourism; holidaymakers flock in their thousands, generating a whopping £1.9bn for the Cornish economy. However, Cornish local communities struggle on when tourism quietens. Emma Douglas, co-founder of Picnic Cornwall, recognised the problem with seasonal trading and opened a deli that celebrates all that Cornwall has to offer, only stocking Cornish produce from Cornish suppliers.

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Celebrating Cornish produce became the sole foundation for Picnic Cornwall, Douglas explains. “Neither of our backgrounds were in food in drink but we’d always loved food and drink festivals. However, we found that once they were done you couldn’t get all of that produce in the same place so we thought there was a bit of a gap in the market and put our business plan and ideas together from there,” reveals Douglas. “We liked the variety that Cornwall has to offer and, whilst there was a deli in Falmouth, there wasn’t a deli that sold particularly Cornish produce and we were keen to support the local economy by not just employing people but by actually buying from Cornish producers and suppliers too.” With national chains being its high street competition, Picnic Cornwall’s customers love the Cornish produce and the option to support the local economy whilst consuming tasty treats. Once a month, Picnic holds a ‘Meet the Makers’ event for customers to learn about its product origins. “Because we source locally it does mean that we are able to let our customers meet our producers, which people love,” says Douglas. “It’s something that you wouldn’t get the opportunity to do with a bigger organisation or a national chain. It’s really popular. Supporting and celebrating Cornwall is the sole mission for Picnic Cornwall. It encourages customers to picnic around Cornwall and its map mural shows how close the beach and local landmarks are. It offers a delivery service and delivers products by foot within a one mile radius. Further afield, it would prefer to use a local taxi firm for delivering to further support the local economy. And its ethical retailing doesn’t end there: it provides its wares for charity events and buys free range when it can. As its founders are avid supporters of the Choose Cornish Campaign, its coffee is ethically sourced and roasted in Helston. One man’s junk is another man’s treasure

In 2004, Canadian born Kresse Wesling, co-founder of Elvis & Kresse, moved to the UK. In that year, she was shocked to discover that 100 million tonnes of rubbish went to landfill, a monumental amount for a small nation island. After a chance meeting with the London Fire Brigade and learning about its decommissioned fire hoses going to waste, the entrepreneurial flair in Wesling ignited. She knew that tackling a 100 million tonne problem was a mighty feat but a ten tonne

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Our ethics are about us feeling comfortable with the kind of company that we are running Hilary Jones, Lush

niche problem was one she believed was in her power to solve. “Our entire goal from the beginning was to save London’s hoses and by 2010 the business had scaled to the extent where we were able to do that. The business didn’t start because we wanted to start a business; it started to solve a problem and we solved it,” Wesling professes. Ten years on from conception, the company now creates everyday accessories from 15 different reclaimed wastes including decommissioned fire hoses, military grade parachute silk, coffee sacks and leather. “Our goal isn’t to just reuse; our goal is to cherish a material,” Wesling says proudly. “For us the mission is always to take something that was under loved and turn it into something that everyone can love in the same way that we do.” Wesling and her husband rescued the fire hoses that were beyond repair after years of service fighting fires and saving lives. They valued the history behind the hoses and turned them into everyday accessories. In homage to the duty that the fire hoses served and the brave fire fighters they equipped, Elvis & Kresse donates 50% of profits made from products made of fire hoses to the Fire Fighters charity, as well as donating 50% of the profits from each collection to relevant charities that have provided the waste. Its small and committed team of 11 has proudly donated £50,000 to these charities thus far. “You could say that 50% was a lot of money, but actually its 50% of profit. I’m a firm believer that profit should be redistributed and should be shared,” Wesling states. She believes that donating profit is not a sacrifice for her. If more companies followed suit with this generosity it could be injected into communities and tackling world problems.

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Sales & Marketing



reating a brand that holds a special place in consumers’ hearts isn’t necessarily straightforward but understanding how to get inside their heads is a good place to start. Utilising the unconscious associations attached to a brand can be one of the best tools a marketer has at their disposal to ensure theirs is the product that ends up in customers’ shopping baskets. We haven’t always understood the power unconscious factors have held over our purchasing decisions. “For the last 40 or 50 years, market and consumer research into decision-making was based on a false premise,” says Dr Nigel Marlow, founder of Innovationbubble, the research agency and consultancy. “That premise was that human beings are rational.” He feels this is a hangover from classical Greek thinking, which assumed a rationality that separated us from the animal kingdom. Gradually, as psychological theory has advanced, we have come to understand the role the unconscious plays in guiding seemingly conscious decisions. “Human decision-making is split between deliberate, conscious decision-making and automatic, non-conscious decision-making,” he explains. It’s possible to discern this in the shift in the way certain products are marketed; Marlow points to the way print advertising used to market cars in the 1920s and 1930s. “It maybe had a picture of a car and a family but it had a lot of writing in it,” he says. “It’s all performance things and it’s all rational stuff.” Gradually the timbre of motoring marketing changed; the focus shifted more towards the experience driving certain cars would give you, until the point where many modern cars are advertised using rather abstract imagery. “It’s certainly not conscious stuff,” he says. “It’s all based on feeling and emotion.”


Listening to your gut

But whilst it’s easy to assume informationbased and emotion-based purchasing decisions are diametrically opposed, this may not actually be the case. “When you talk about emotion, it sometimes implies being irrational,” says Simon Glynn, director of Lippincott, the brand strategy agency. “Actually this can be a very rational way to think.” Often, when choosing between two products or services comes down to gut instinct, one might assume that the decision process is entirely irrational. But this ignores the many concrete, unconscious factors at play. “What you’re trying to do with brand, even

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Emotional appeal Calling upon consumers’ sense of reason will only get brands so far. Understanding what’s going on beneath the surface is the best way to form lasting, engaged relationships when it’s emotional, is create something that’s intrinsically valuable,” he says. Implicit value can certainly prove far more powerful in swaying our decisions than stats or product specs. “There’s a really obvious correlation in a lot of industries that emotions are effective,” says Matthew Celuszak, founder of CrowdEmotion, the emotion-capture technology provider. Emotion can motivate us in ways that rational appeal can’t; he points to the recent Red Nose Day as an example of how sentiment can act as a more significant behavioural driver than dry information. These unconscious drivers can help us make decisions far quicker than attempting to weigh up all of the facts. “You’ve already made up your decision by the time your brain reaches the rational part of its process,” he says. “That’s the whole gut feel.” These unconscious factors can help create real and long-lasting consumer loyalty but really capitalising on them requires an understanding of how people relate to each other. “It’s adapting the human relationship framework; a brand needs desire, empathy and dependency,” says Glynn. Desire is fairly easy to understand; you only have to look at people hankering after an Apple Watch to see this play out. But empathy and dependency are far less common: they are the degree to which we feel a brand represents us and the degree to which we rely upon it. “People often talk about brand desire,” he says. “But the real questions are does that brand actually understand me and would I really miss it if it disappeared?” Accessing your emotions

Marketers aren’t lacking in an appreciation of these factors; seeing how much value brands

like Apple or Coca-Cola place in their implicit associations shows they certainly recognise the power they can hold. But, in an age when spend is more closely monitored than ever, how can brands quantify and track the potential return investment that these areas can offer? CrowdEmotion believes it has struck upon a solution. Its emotion-capture technology enables brands to assess consumers’ emotional responses to content through webcams, providing real-time breakdowns of factors like happiness, anger, surprise or sadness. But Celuszak believes its real power is providing quantifiable and actionable insights based on this data. “If I say, ‘they were happy during that film’, they’ll say, ‘so what?’,” he says. “When I say, ‘if you drive more happiness in your campaign, you’re going to see a 10% uptake in clickthroughs,’ then they have something tangible to work from.” And Celuszak believes that as more of our lives are mediated through technology, this will only become more vital. “The big question will be, ‘how do you make technology feel?’,” he says. Not only will an ability to conduct our emotional relationships through smart devices become ever more important but it is hard to underestimate the huge benefit to brands if they will be able to better understand what makes consumers tick. “The big thing is being able to understand not what they’re clicking but why they’re clicking it,” he says. Whilst some assume that our reliance on technology is leading us into an increasingly depersonalised world, its easy to see how a better understanding of consumers’ unconscious processes will enable brands to offer them much more personal, meaningful experiences.

31/03/2015 22:43

You’ve already made up your decision by the time your brain reaches the rational part of its process Matthew Celuszak,


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31/03/2015 22:43





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Peace of MInd I

Hiring through referral is a highly effective way of finding top-notch talent – but beware of hiring an army of clones

Having a referral from an existing member of staff is valuable, as they will know the vision and culture of the organisation inside-out Henry Braithwaite,



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f you trust someone, chances are you can trust the people they trust, too. That’s why going on a date with a friend of a friend is marginally less terrifying than picking at random from a website. It’s also one of the reasons why employers looking for new recruits turn to their existing members of staff – or even their own personal networks – rather than posting an advertisement or paying a recruitment agency to find someone for them. Other reasons? It’s generally cheaper, faster and more likely to end up with the person who is hired sticking around longer, according to the Global Employee Referral Index published last year. Liz Radcliffe, the head of recruitment at Avecto, is such a firm believer in the power of staff referrals that she’s trying to double the proportion of new recruits that the security software business hires that way. “We have seen our headcount grow by 50% to 60% every year for the last three years,” says Radcliffe, the 110-person company’s recruitment manager. “Initially about 10% of hires came from referrals but this year we want to increase that to 20%.” That is because staff referrals are an effective way of finding high-calibre recruits, she says. “We rely on very talented individuals and the best way to find more is referrals because talented people know other talented people.” It can also be significantly cheaper than


traditional hiring methods. MarketMakers’ Henry Braithwaite has calculated that hiring someone through a staff referral is more than £1,000 cheaper than using an agency, on average – and that they are more likely to stick with the job. Turnover for agency staff is 20%, but it is just 11% for those recruited by referral, which improves long-term cost savings. Finding new employees through those who are already on board is an approach particularly suited to start-ups, he says. “Businesses that are entrepreneur-owned and -managed have a very different culture to other types of organisations. They tend to be fast-paced and, as an entrepreneur, you need people who are ambitious and can start contributing from day one. Having a referral from an existing member of staff is valuable, as they will know the vision and culture of the organisation inside-out and only make a referral if they believe that person will be aligned to it.” Sandi Mann, a senior lecturer in occupational psychology at the University of Central Lancashire, agrees that hiring through staff referrals is likely to be good for cultural fit. Such candidates also come with an extra layer of trustability, as your existing employees are unlikely to recommend people unless they think they are up to the job, partly because they will have to pick up the slack if the new hire doesn’t pull his or her weight, but also

31/03/2015 22:44


asked her to give her daughter, Sarah, a job at Barr-Jones Associates, her because backing someone who underperforms reflects badly on their £250,000-turnover consultancy. “This was a tricky decision as it could own judgment, she says. have been very awkward if it had not worked out,” says Barr-Jones. “The “But referrals have their downsides, too,” she explains. “It means that family was well known in the village... and we saw her mum daily.” you keep the status quo.” That’s because people are likely to suggest Barr-Jones decided the best thing was for her to step back so that others who are similar to them, which can in turn lead to a business full one of her senior employees could take Sarah of people who think and act in much the same through the firm’s recruitment process. “I did way. “If you are a young white male you will not get involved in the interview,” she says. “After probably recommend other young white males a successful interview, we offered her a short rather than someone from outside that group interim post with no promise of a job at the end. who could bring in new ideas, new creativity and Once we did offer a job, we used a probation new ways of thinking,” says Mann. period, as we do for all our staff.” “This [homogeneity] can be good when Sandi Mann, Things have worked out well – “she is now vital you’re starting out because at that point you University of Central Lancashire, to our business success” – but Barr-Jones warns need people around you that you trust, which other entrepreneurs not to make any promises to outweighs the disadvantages. But as you get referred candidates that you would not make to others and always to use bigger diversity will become more important. As you expand you will the same formal interview and assessment stages. Radcliffe agrees. Part need new blood and new ideas, which will probably mean you need to of this is simple fairness; it’s also about checking whether people really start looking a bit more widely.” are right for the job. “It’s not just about us interviewing them,” she adds. And the approach can bring other risks that aren’t present with more “It’s also a chance for them to get to know us and ask us questions.” traditional hiring practices, as Leona Barr-Jones realised when a friend

As you expand you will need new blood


The business of referrals Perhaps unsurprisingly, there are also start-ups working to turn personal recommendations from mates into a business. Hire My Friend, currently being spun out of the Makeshift start-up studio, gives job seekers the ability to put up profiles and ask contacts to recommend them. So far, so LinkedIn but what’s different here is that the candidate is anonymous, while a potential hirer can search through recommendations to find if someone he or she rates thinks the candidate is an interesting prospect. “We have turned over £50,000 and had more than 20 people hired through the platform already,” says Dan Kolodziej, the business’s chief executive. “At the moment, it is tech companies and it is very London-focused but we plan to expand.”

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27/02/2015 19:36




Growing mindfully Malcolm Scovil learned the hard way how not to grow a company. Taking a calmer and more collected approach will likely lead to a more successful business – and a much healthier and happier entrepreneur, he says

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once knew the owner of a software company who was so focused on expanding his business that he had blinders on to anything other than revenue growth. Issues with people in the team were put on the backburner, financial challenges were ignored and he stopped thinking about his own health. The list of challenges piled so high that eventually everything collapsed and the business failed. That business owner was me, three years ago. It was my first business and I had a ‘grow, grow, grow’ mentality. I’d read all the advice saying things like, ‘If you’re not growing, you’re dying,’ and I felt the pressure of delivering month-on-month revenue growth, at all costs. In hindsight, what I should’ve been focused on was building a healthy business, not simply a fast-growing business. A healthy business can grow fast, sustainably. A fast-growing business doesn’t necessarily do that. And as we all know, fast growth can be quickly followed by fast decline. I had many very depressing days during that time. I’d often sit on the floor of the shower hoping that the hot water would wash away all my problems. It didn’t. When the business went bust, I went bust emotionally. Twelve months of slowly laying off 25 people I’d become friends with, having hundreds of difficult conversations with frustrated investors, creditors and clients and eventually having to admit defeat took a heavy toll on my self-belief and happiness. If you’re anything like me, you link at least some of your emotions to how well your career is going. We often aren’t aware of it, but our jobs have a huge impact on our overall level of happiness and fulfilment.

31/03/2015 22:45

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Mindfulness is best defined as the mental state of being present in the moment, while calmly acknowledging and accepting one’s feelings and thoughts 71

In the difficult months that followed the bankruptcy of the company, my thoughts were dominated by the fact that I’d failed. I didn’t tell many friends or family what a hard time I was going through because I thought the right thing to do was stay tough and just soldier on. Needless to say, that strategy isn’t very sophisticated or effective. That’s when a friend, Alex Tew, founder of, suggested that I look into mindfulness and try out meditation. He said that it helped him through a tricky time in his career. I didn’t really know what mindfulness was and had been hesitant about meditation in the past primarily because it seemed a bit ‘soft’ and I find it really tough to sit still for long periods of time. It also didn’t seem logical that doing nothing in silence for ten or 20 minutes a day could have any positive benefits. I respected Alex a lot though and I started reading articles online about meditation. I quickly discovered that many entrepreneurs I admired were long-time meditators. Marc Benioff, the CEO of, especially stood out. He said he started meditating when he was at Oracle to handle the stresses of a high-pressure role. Another friend, Michael Acton Smith, who founded Mind Candy, suggested I read Search

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Inside Yourself by Chade-Meng Tan, the story of how Google implemented a mindfulness and meditation programme to build the emotional intelligence of its leaders. The book led me to the work of author Daniel Goleman, who studies the impact of emotional intelligence, self-awareness and empathy on leadership and the success of teams and organisations. This was fascinating and I started to read everything I could get my hands on. I discovered that LinkedIn, Blackrock, Starbucks and hundreds of other organisations (including even the UK government) have programmes to develop mindfulness – which is best defined as the mental state of being present in the moment, while calmly acknowledging and accepting one’s feelings and thoughts. I learned that mindfulness is cultivated through meditation – a workout exercise for your brain. This mental state of mindfulness was a stark contrast to any state that I was in when I was running my previous business. I was in a state of mindlessness, thinking constantly about the future or the past while frantically ignoring my anxiety and all the signals around me. I decided to learn everything I could about the science and research behind mindfulness and to start meditating every day to see if this was more than just an interesting theory.

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When we’re able to be aware of our own emotions we start to become more aware of the emotions of others

The science went way beyond what I expected. The advances in neuroscience and brain-scanning technology in the past few decades show meditation measurably increases activity in the parts of the brain responsible for strategy, planning, memory and executive function while actually reducing grey matter in parts of the brain responsible for stress and anxiety. Research out of Harvard University, University of Oxford and other leading academic institutions is growing exponentially with more than 400 peer-reviewed studies in 2014 supporting the positive benefits of mindfulness and meditation on the human brain and body. It was when I started to meditate for five to ten minutes a day consistently that I really started to experience an impact. The biggest change was in my levels of self-awareness. I could feel and sense my own emotions much more clearly, as they were happening. This sounds like a small insight but it’s profound. Being aware of a negative emotion or voice in our heads and acknowledging it helps to soften it. It also greatly reduces the likelihood that our actions will be ‘hijacked’ by our emotions. It makes us calmer and gives us back the controls. When we’re able to be aware of our own emotions we start to become more aware of the emotions of others. This leads naturally to becoming a more empathetic listener and leader. This awareness of others’ emotions is one of the unexpected drawbacks of becoming ‘mindful’. You’re constantly able to see others being pulled by their emotions and acting from states of mindlessness. It’s very clear after a few months of meditating that the world and the world of work is full of stressed out people living at the whims of their emotions. This is changing, though. More and more business owners and executives are looking for a solution to their own stress and anxiety and finding it in mindfulness and meditation. They are then bringing the benefits into their organisations through training practical ways to build resilience, self-awareness and empathy in their teams and leaders. This is encouraging for the future of work. For too long, we’ve simply looked for ways to get from A to B, quickly and efficiently. This strategy doesn’t take into account that we are humans and we need to look after ourselves and each other. The successful path forward for business is to get from A to B, healthily and happily. Malcolm Scovil is the founder of Calmworks, a London-based company helping to improve the health and happiness of employees through training mindfulness (not always using that word) to teams inside creative agencies, financial institutions, publishers, technology companies and other leading employers. He is also an advisor at venture capital firm Forward Partners and fellow of the Royal Society of Arts.

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27/03/2015 12:01



Bright Young Things Hiring school and university leavers can have a really positive effect on your business, says Lyndsey Simpson


e were all young once. Do you remember the very first opportunity you were given to step into the world of work? I bet you do, although it’s easy to forget in our ever more busy schedules. How excited, yet scared and self-conscious we were. Then there’s the impact those first few people we met at work had on our happiness and confidence. For many of us, it was these first opportunities and experiences that provided us with the platform that we needed to reach our business goals. This month, I’m going to argue the importance of you doing exactly the same for someone else, and taking a risk by giving youth a chance.

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So who are they?

For the purpose of this article, I am going to group all school/college/ university leavers as ‘young prospects’, as they are all just that. Everyone is looking for that first break and there are many different ways these young prospects can enter the business world. Many businesses, including my own, offer graduate schemes and apprenticeships to those leaving either university or school. If you’re not currently offering one or both of these then I ask you, why not? Year after year I’ve seen talented young people coming into our business through these schemes and many of them now hold senior positions and are integral to our success. By growing your own talent, you create a market differentiator and one that I shall discuss more later on. The age of the Generation Y leaders is fast approaching and, like it or not, they are the future of business. As such, it’s your chance to influence that future and reap the benefits that ambitious, driven and talented young prospects can bring.

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How to attract them

Whilst you may feel that the opportunity you are offering is a fantastic one, don’t forget that your competitors are probably offering something similar. Prospective candidates, in particular the most desirable ones, are looking for far more than somewhere to earn a salary. When thinking about how to attract the talent that you are looking for, consider three things: Opportunity: Young prospects want to learn, and they want to begin to experience the things that they feel they have worked so hard to reach. Creating an environment in which young prospects can see the chance to step out of their comfort zones, whilst utilising their hard-earned school or university education is paramount. Progression: The pathway to success should in no way be linear but creating a road map for growth and progression will go a long way in attracting talent to your organisation. Young prospects are ambitious, and will look for a scheme to develop themselves in, be it further qualifications or promotions. Frankly, if they’re not ambitious they might not be the right fit for you. Reward: Naturally, young prospects leaving education are likely to have a certain amount of debt, and the salary at their first ‘real job’ is going to matter. However, don’t underestimate the power of intrinsic rewards and external praise. Rewards can be so much more than simply financial and you should never undervalue the difference that the smallest amount of praise or acknowledgement can make to a younger employee.

The age of Generation Y is approaching and, like it or not, they are the future

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Why invest in young prospects?

By bringing in talent this early in their career you are effectively growing your own. There are no habits to break, only habits to form and if I look at our business, our young talent completely understands the way of doing things in our business. This makes our company culture significantly stronger as a result. Hiring young prospects can have nothing but a positive impact on your business. They come to you as a blank sheet of paper, bringing fresh ideas, bucket loads of enthusiasm and more often than not, a desire to learn and grow in your business. This alone should be enough for anyone to consider hiring. More than anything, seeing young talent flourish under your stewardship and watching them grow – not only as your employees but also within themselves – is just about the most rewarding experience you can have.


How to manage them

In order for your young prospects to thrive, they need your support. I have made many comparisons between the business and sporting worlds in my previous articles, and the same applies here. In football many talented youth team players are sent out on loan to gain valuable first team experience, rather than just playing youth or reserve team football for their parent clubs. Teams believe that through exposing their young players to first team football and giving them ‘real’ experiences at an early age, they are better preparing them for their futures, and this is also true in the business world. In order for your talented younger employees to reach their potential they need experiences, and a lot of them at that. Pushing them out of their comfort zones and experiencing new and scary situations may at the time seem like a risk, but from my experience this is certainly a risk worth taking. With your guidance and with each new challenge they overcome, your young prospects will grow, resulting not only in their own personal development but also in you having an employee who is offering more and more to your business every day. It is too easy for apprentices and graduates to be given all of the menial and mundane tasks that nobody else really wants to do, simply because they don’t have the experience of some of those around them. Give them chances, accept that they will make mistakes (just as you did when you were their age), test their limits, but most of all support them. It doesn’t actually matter if they struggle at a task the first time. So long as you provide them with the feedback and tools they need to improve, your young prospects will be in your ‘starting 11’ in no time.

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31/03/2015 22:12


There’s no denying tech is big business. But news that within 12 months Apple will be valued at $1tn – almost three times as much as Google, its long-term rival and the US’s second most valuable company – is likely to raise an eyebrow or two. Cantor Fitzgerald, the brokerage behind the valuation, linked the eyewatering sum to the California-based firm’s expansion in China and the looming release of the Apple Watch. For a little taste of some of its latest innovations, as well as our other picks of the month’s top tech, take a gander at our gadget round-up

Samsung Galaxy A5 For a mid-market phone, Samsung’s Galaxy A5 is a solid entry. It’s perhaps not going to win much ground in an out-and-out spec war; phones like the Motorola Moto G nearly rival the A5’s 1.2 GHz quad-core innards and 2GB of RAM for over £100 less than the A5’s £280 ticket price. Where it really comes into its own though is its design – its metal edging, lightweight feel and the fact that it’s thinner even than the iPhone 6 means that it’s a great mobile for those wanting a flagship feel at a more reasonable price.



13-inch MacBook Pro with Retina display

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The furore of criticism facing the announcement of the latest MacBook has rather overshadowed the release of the 2015 13-inch MacBook Pro with Retina display. Sharing the innovative Force Touch trackpad with the coming MacBook, Apple’s latest laptop allows pressure sensitive input whilst providing haptic feedback to simulate a real click feel. However, it beats its sibling in a couple of respects: it doesn’t copy the MacBook’s much-ridiculed single USB port and packs significantly higherspec innards, all for the same price. Definitely a case of go Pro or go home.

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27/03/2015 13:32


Pebble Time We first featured the original Pebble Smartwatch way back in April 2013 and its nice to see that one of the world’s first smartwatches is still going strong, even in the face of competition from the likes of Samsung and Apple. Its latest iterations, the Pebble Time and Pebble Time Steel, come with colour e-ink displays and a timeline feature to easily scroll through previous messages or future engagements. Unsurprisingly it’s proving incredibly successful with Pebble’s legions of fans; by the time it finished its Kickstarter round, it had raised more than $20m, utterly smashing its $500,000 target.

Shwood Canby Select Newspaper Already one of our favourite frame makers, Shwood has found a way to improve upon its existing range of wooden prescription and sunglass frames. Its Canby Newspaper range uses recycled newspaper that is rolled into four-inch logs and then sawn into plies. On the Canby Select, this is then used to create beautiful frames with a unique grain interspersed with the slight impression of type. Sadly Canby Select frames are strictly limited edition; only 50 are being made so snap up a pair as soon as you can.


HTC Vive SteamVR It was enough of a shock to audiences at Mobile World Congress to discover that HTC had teamed up with Valve, the game development and digital distribution company, to create a VR headset. But it seems like each has brought its reputation for quality to the mix. Valve’s extensive experience in the games industry makes it likely the headset will see significant uptake from developers. And with Lighthouse – Vive’s motion tracking technology that allows users to move around the room and physically explore their environments – it actually looks like Vive might topple Occulus Rift from the top spot.

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31/03/2015 22:46


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t Tablet Hire, we are proud of our achievements since the launch of our iPad hire service in 2010. With over 2,000 clients in over 30 Countries we boast a stock of over 3,000 devices with a lowest price promise guarantee. We pride ourselves on both our customer service and support that is available 365 days a year and provide a complete service that takes the stress and strain from the client. If you look at our testimonials and our clients you will see why we are the preferred choice across every major sector. Whether you are arranging a conference, exhibition display or simply need to use iPads to collect data or use for guest lists we can provide you a hassle free service with quality equipment. We work with many charities who use our silent auction software for fundraising and have recently launched our paperless conference solution that is the leading app in its field.


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31/03/2015 22:00




App happy

There’s a lot to take on board when creating your own app. We take a look at some of the key points to bear in mind

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ne of the beautiful things about many apps these days is how simple they are to use but this belies the huge amount of work that goes into creating them. For start-ups looking to build their own apps, careful planning is vital if they are to create something that earns pride of place on users’ mobiles. Inevitably, the process of creating an app starts long before a team starts getting its hands dirty with wireframes and code. “The first thing you need to do is outline a definition of the issue or the problem you’re trying to solve,” says Aish Campbell, associate user-experience (UX) director at Albion London, the integrated agency. Identifying the pain points of potential users is fundamental and will shape everything that comes after. This then allows a developer to identify and harness all of the assets at its disposal. “Usually we will try and find out if there’s any existing insights we could leverage to help develop that proposition, be that user insight or stakeholder interviews,” she continues. Once a start-up has a loose idea of the problem it intends to solve, it can be tempting for teams to race ahead and start tackling their respective responsibilities. But developing a snazzy interface without thinking about the back-end or working on data feeds without knowing exactly what the app requires is a recipe for disaster. Alistair Crane, founder of Monitise Create, the mobile innovation and design studio, recalls an analogy a developer once told him, comparing the process to digging the Channel Tunnel. “We didn’t start in England and just dig all the way to France or vice versa; we started at both ends and shook hands in the middle,” he says. “It absolutely has to be something done in tandem.” Uri Sarid, CTO of MuleSoft, the integration platform for applications and data sources, agrees that it’s vital to ensure there is a unified approach between front-end and back-end development. “Get those two teams to collaborate very early without writing any code because code is expensive,” he says. If teams are brought together at an early stage and use tools to model how the front and back-ends will plug into each other, this allows them to create a clear spec that both can work toward. “That removes a lot of the friction around miss-specifying things or things changing,” he says. “It means that when they come together it doesn’t take another two months to figure out how to really glue the two worlds together.”

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These initial conversations then give those working on the back-end a much clearer map of the features that are required. “Those features are normally storyboarded and then give you the idea of what you’re going to need on the back end,” says David Elstob, associate technical director of Albion London. Creating the architecture required to support these features will then become much easier; knowing that an app is likely to have peaks in traffic may mean having multiple servers, whilst knowing you need push notifications means you’ll need specific architecture to deal with them. “Each of those individual things will tick certain boxes as to the back-end functionality that’s required,” Elstob says. It’s worth bearing in mind, however, that you don’t totally need to reinvent the wheel. Using application programming interfaces (APIs), developers can use assets created by other enterprises as building blocks to plug data and functionality into their apps. “Over 13,000 APIs are available for people to use; that’s everything from recommendation engines to facial recognition to telephony,” says Sarid. “There’s a very broad scope of things that you can reuse from other vendors.” When looking at front-end app development, one of the key elements of creating an app is designing a user interface (UI) that really serves the needs of customers. “Ignoring all of the extra detail, you start off with the ideal journey and you basically map out with lines and boxes what path you want the consumer to take,” Crane says. To do this, typically UX developers will begin with paper sketches of the different screens of an app, then map how they fit together with wireframe diagrams, before creating fully fleshed out designs and prototypes. But to understand the efficacy of this design, it is vital that you test this at every stage and make sure that users find it fluid and natural. “We always recommend you involve users throughout the entire process,” Campbell says. “It’s important that you understand and test all the different touch points; what key journeys the users are going to be undertaking,” she says. It’s fair to say that this kind of intuitive UX has gained real currency in recent years. Creating an app that works with users’ natural expectations is a real art and spells the difference between an app that gets used regularly and one that’s deleted within a few days. “It is a bit of an art because you have to have guys that innately have design in their blood,” Sarid says. “Good designers tend to favour simplicity and really try to get to the head of what consumers are going to want to do.” When it comes to releasing an app, rather than trying to cram in every imaginable feature from the get-go, it’s important to get out a minimum viable product (MVP) that will begin to build a user base. “As long as you have one element in there that is genuinely going to improve their lives or their shopping habits or their behaviour, then you launch around that one feature or function,” says Crane. “And then you build from there.” Effectively an app developer’s work is never done; from this point, a start-up will begin to create new iterations based on user feedback and grow the app’s feature set. But with careful planning it can get an MVP out of the door that will give it a point to grow from.

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Start off with the ideal journey and map out what path you want the consumer to take Alistair Crane, Monitise Create

31/03/2015 22:47

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31/03/2015 15:56



A nation of innovation The importance of local-level support to drive innovation and growth in the digital economy by Neil Crockett, CEO, the Digital Catapult

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he UK’s digital economy is booming. In the recent Tech Nation report, over half of the companies analysed were formed since the start of 2008, with 15% set up in 2013 - 2014 alone. This development shows no signs of slowing, with the formation rate of new companies rapidly growing – 53% more digital companies formed in 2013 than in 2010. Digital innovation is driving this. The UK is leading a charge into the truly connected age – a world where technologies like the Internet of Things (IoT) and wearables are part of everyday life. The recent budget reflected this with the government pledging £40m to aid IoT development. Another £600m will be invested into freeing up spectrum to be used for the wireless broadband infrastructure that will support this technology. But in order to foster and support this, all digital stakeholders – from the government to academia and large organisations – need to ensure we are supporting innovation on a local level. London is a vibrant technology cluster. But it is one of many in the UK, all of which will be equally important as we look to drive the UK’s digital economy forward. Fostering local economies

Great work is being done across the country to develop and bring to market products and services which will each form part of the wider digital economy. Indeed, many local technology hubs have specific areas of expertise, lead the way in that space and can therefore cement the UK’s place as a world-leader in digital innovation. From Sheffield’s education tech and telecoms specialism to Birmingham’s hub of advanced manufacturing, all corners of the country are bringing something to the digital economy. Indeed our non-exec director Chris van der Kuyl, whose 4J Studio has been responsible for porting Minecraft to consoles, is one of

31/03/2015 22:47


Scotland’s leading entrepreneurs and the leading light of the games cluster in Dundee. Similarly our showcase winners come from all over the country, from Manchester-based magneticNorth to Gateshead’s on:trac. The local economies are there and they’re thriving. But they need support and expertise in order to develop and ensure sustained growth as the digital sector really kicks into gear. There are many challenges we face as we look to accelerate digital or, more specifically, data innovation. From creating trust in the sharing of personal data to the need to streamline the content licensing and copyright process, digital businesses will struggle to reach their potential if we can’t address these hurdles. The only way to overcome them is to convene the various data stakeholders and work together to develop, test and eventually to take products and services from concept to commercial reality. It’s this kind of collaboration at a local level that will reap long-term reward. Imagine a one-man start-up developing a mobile app that can act as a remote carer for the elderly or for disabled people. At some point, the app itself is not enough. It will require outside input from parties such as the NHS (to provide personal data of NHS patients who will use the app), academics (to help the start-up understand the health issues) and various other experts. To offer a way of bringing these organisations together across the whole of the UK will help overcome the data challenges and ensure all digital products are given the opportunity to reach their full potential.


The digital convener

Investments which reinforce the importance of the UK’s regional innovation will only accelerate the country’s economic growth

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Continuing our mission to help drive digital innovation across the nation, the Digital Catapult is making its move to collaborate with and support these local hotspots. Alongside our ongoing work with organisations including Future Everything in Manchester and Sunderland Software City, we’ve just opened Digital Catapult Centres in Brighton, Yorkshire and North East & Tees Valley to help innovators bring digital products and services to market. The creation of the new Digital Catapult Centres will direct an additional £9m of investment in these already vibrant digital economies. The government itself acknowledged the importance of local hubs across the country in the budget 2015, with the announcement of the Energy Systems Catapult in Birmingham and increased funding in science, technology and the creative industries in the north west and Yorkshire. There is no doubt that investments which reinforce the importance of the UK’s regional innovation will only accelerate the country’s economic growth. We would call on all other digital stakeholders to follow a similar path. Yes, look to London but look outside of the capital too. Because some of the greatest minds are working there and are developing technologies, from medical apps to virtual reality gaming, which will all be staples of the UK’s digital future. As an industry, it is important all of those in digital offer support and collaborate with these local innovation communities. It is from these local hotspots that we will find the best innovation, create the most relevant products and reap the economic benefit for the UK.

31/03/2015 22:47

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27/02/2015 19:58

Clarity, Conviction, Care Ethos is crucial, whatever you do!

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Day in court Last month the government quintupled court fees and it is SMEs that will be hit hardest when it comes to civil litigation

WORDS: ryan mcchrystal


o you have £10,000 to spare? Well, this is exactly what an SME now has to fork out should it need to recover £100,000 through the courts. This presents a real danger that small businesses won’t have deep enough pockets to seek justice. Unsurprisingly, the government’s hike in court fees on March 9 this year has sparked uproar from both the small business community and the legal profession. Seeking redress is more expensive than ever, and considering last year’s cuts to legal aid, you’d be forgiven for thinking that the UK’s legal system favours the rich. Many entrepreneurs will now see justice as simply being not worth the hassle. As it stands, a third of UK companies with potentially valid cases don’t take action because of the financial burden and this proportion only looks likely to increase. Michael Lent, insurance and litigation funding consultant at Annecto Legal, says the increased cost of litigation should be one of the main issues facing SMEs ahead of next month’s election. “This is a big chunk of money that they’ve got to find, and it comes at a time when they don’t typically have much,” he says. “The reason they’re having to litigate, typically, is because somebody did not pay them the money that they owe them in the first place.” Lent makes the point that while the courts are experiencing a huge deficit, the government is targeting the wrong people to solve it. “They are turning to the people who can afford it the least, which is the individuals and SMEs, whereas well-heeled litigants are more than capable of paying.” There are no two ways about it – the courts do need to be better resourced. They are woefully undersupplied in terms of IT and they are still largely paper-based. However, one would think that the government could find a better way to spread the cost. “It has all the hallmarks of something that’s not been thought through,” says Lent. One of the dangers is that if people can’t afford to use the legal system then it encourages all sorts of undesirable behaviour. “If people can’t get the results through using the courts, then all of a sudden you’re moving towards a third world situation which encourages corruption and criminality,” says Lent. Increasingly, the person with most money is in a better position. “The big players are back in the position where they can behave pretty badly and make life very expensive for poor claimants who, unless they’ve got funding behind them or very deep pockets, will frankly get a bit of a kicking,” says Lent. One person who knows all about just how burdensome litigation can be is Jon Welsby, director of Insolvency Assist CIC, which helps

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31/03/2015 22:49


Small businesses have been struggling with high legal fees for a long time Jon Welsby, Insolvency Assist CIC


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businesses understand their options when reviewing financial products. He is currently litigating against a high street bank, which he accuses of misselling him an interest rate hedging product that had catastrophic consequences for his property business. “Small businesses have been struggling with high legal fees for a long time and the last thing we needed was for the government to make it harder for us,” Welsby says. “However, this is exactly what it's done.” In Welsby’s view, the increase in court fees means that we are going to see a lot more of the “big boys abusing someone smaller”. In other words, big businesses can sit back with the peace of mind that they can pay a lawyer, and be much be less concerned about being brought to justice. The solution, as he sees it, is for the government to refine and re-investigate its current policy. “It’s quite scary that you can’t access any form of justice just because you can’t afford to get representation," he says. “There doesn’t seem to be any real concern for businesses that are outside a certain spectrum of wealth." Welsby does believe that the government is warming to the idea that SMEs are important and that more needs to be done to ensure they get the help they need. Lent is, however, clearly less understanding. He says the current administration has taken some really big steps to disable the country’s justice system. “The Liberal Democrats in particular should hang their heads in shame, as it’s very much against their supposed approach to making access to justice affordable to all,” he says. To be fair, Lord Tim Clement-Jones, the Liberal Democrat peer and the party's spokesman for culture, media and sport in the House of Lords, describes the hike in court fees as “totally wrong”. Speaking at the Elite Business Event National Conference and Exhibition, he said: “Access to justice is absolutely vital; in a year when we are celebrating 800 years of Magna Carta, to start denying access by the cost of litigation would be wrong, and I know many of my colleagues on all benches feel the same.” Unfortunately, as a backbencher, he doesn’t have much to do with the policy. Lent is under no illusions that a Labourled government would repeal everything the current one has done in this area but he does believe it is the most likely party to do something that would assist access to justice. Whoever makes up the next government, it really does need to sort out this mess and ensure litigation is accessible to all.

31/03/2015 22:49


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31/03/2015 22:04


Measuring up Sarah McVittie, co-founder, Dressipi

Quantifying how successful your service is at helping customers starts with one basic question: what does success look like?


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e’ve talked a number of times in this column about Dressipi’s journey from a personal styling service for consumers into a fashion recommendation solution for retailers. Over the past few years, we’ve adapted our business model to reflect the needs of the market, updated our technology continuously and got some amazing clients along the way. And we’re now at that time in any busy start-up’s life when you have to start answering a very difficult question: ‘how do you measure success?’ Measuring the effectiveness of what you do is key to every enterprise but it’s particularly acute when you – like us – get your revenue from selling services to other companies. Unless you can justify to your clients that what you are doing for them is improving their business, they’ll stop paying you. As a principle it’s simple: in practice, however, it’s fiendishly difficult to get right. As we’ve found many times, what looks like a success for you as a service provider might not resemble anything of the sort for your customer. For example, our customers – fashion retailers – want their online businesses to grow. They know that while their overall revenues creep up by about 3% a year, their e-commerce can grow by as much as 20%. Their challenge, however, is that fashion e-commerce can be tremendously inefficient. Retailers might get millions of website hits a month but conversions are often quite low and factors like returns can significantly eat into their margins.  When we first started out as a B2B service, we decided to measure the effectiveness of our service by looking at how Dressipi changed some of the key pain points for retailers. We set out to prove that people using our service spent more money and returned less product. Additionally, we made a case for how much customers valued our service by measuring what proportion of a retailer’s customers completed a Fashion Fingerprint on our site. What we found from taking this approach was that, although these measures are relevant, they did not take the whole picture into account. We found that retailers were keen to work out the overall impact, including conversion and the actual difference it made across their entire business. They loved what we were doing but they wanted to see the undeniable benefits in cold hard cash terms. So we did what start-ups always do: we went back to the drawing board. Instead of focusing in on the details, we went for the bigger picture. Now, when an e-commerce manager asks us how we’re going to improve a business, we don’t talk in terms of reduced returns or even how we might drive up average basket sizes with one of our Fashion Fingerprints. Instead, we talk about how we’re using our data to increase average revenue per visitor. And that’s a metric retailers find easy to measure but hard to argue with. It’s taken us two years to get here. But, like all solutions that seem so simple with hindsight, it’s a problem you can only solve using time, experience and sufficient data: all the things we’ve spent the last four years assembling.

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Profile for Elite Business Magazine

Elite Business Magazine  

The Ultimate Success: Michelle Mone OBE, One of the UK's leading entrepreneurs and a shining example of how spirit and determination can lea...

Elite Business Magazine  

The Ultimate Success: Michelle Mone OBE, One of the UK's leading entrepreneurs and a shining example of how spirit and determination can lea...