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MARCH 2015

A CU T A BOV E

MARCH 2015

Experienced entrepreneur and Wahanda co-founder Lopo Champalimaud is just the person to drag the salon and spa industry into the 21st century ÂŁ4.50

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CONTENTS

18 Eye of the beholder

Lopo Champalimaud, co-founder of beauty marketplace Wahanda talks to Hannah Prevett about the journey so far and what the future holds

05

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CONTENTS 44 Pay it forward

VOLUME 04 ISSUE 03 / 2015

REGULARS 09 10 12 15 16 98

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

26 One to watch

Bloom & Wild is the budding business posting flowers through letterboxes

32 Hipstervention

The innovations of the young and trendy in business is something to be celebrated 06

38 Taking responsibility

Impact investing is about more than just focusing on the bottom line

26

How do you decide how much to pay your employees?

46 Lend a hand

Clive Lewis on the resurgence of business lending

32

50 On location

Mobile point of sale helps businesses sell on the go

56 From start to finish

Improving the customer journey is vital for keeping customers loyal

60 Keep it social

Social media isn’t just for marketing – it’s also a selling tool

65 Birth right

With pregnancy discrimination some businesses run the risk of ostracising talented women

68 Duty of care

An older workforce means more serious illness. How should businesses respond?

74 Fresh start

Restructuring might be a challenge but change can still be positive

79 The hot list

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

84 Green shoots

A cabal of UK cleantech companies recently went on a fund-finding mission to San Fran

87 Lucid dream

Matt Stroud explains the potential benefits of personal data transparency

91 Access all areas

Does the new regulation make it easier for SMEs to get public sector contracts?

91 Contents.indd 2

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EDITOR’S letter VOLUME 04 ISSUE 03 / 2015

Scan this QR Code to register for Elite Business Magazine SALES Darren Smith – Account Manager darren.smith@cemedia.co.uk Samuel Darcy – Account Manager samuel.darcy@cemedia.co.uk Suzanne Smith – Account Manager suzanne.smith@cemedia.co.uk Siobhan Stokes – Account Manager siobhan.stokes@cemedia.co.uk EDITORIAL Hannah Prevett – Editor hannah.prevett@cemedia.co.uk Josh Russell – Feature Writer josh.russell@cemedia.co.uk Ryan McChrystal – Feature Writer ryan.mcchrystal@cemedia.co.uk Jade Saunders – Junior Writer jade.saunders@cemedia.co.uk DESIGN/PRODUCTION Leona Connor – Head Designer leona.connor@cemedia.co.uk Rishita Devji – Intern Designer rishita.devji@cemedia.co.uk Dan Lecount – Web Development Manager dan@cemedia.co.uk Marketing Kelly Dunworth - Head of Communications kelly.dunworth@cemedia.co.uk Claudia Laing - Marketing Manager claudia.laing@cemedia.co.uk Lucy Jones - Marketing Assistant lucy.jones@cemedia.co.uk CIRCULATION Malcolm Coleman – Circulation Manager malcolm.coleman@cemedia.co.uk ACCOUNTS Sally Stoker – Finance Manager sally.stoker@cemedia.co.uk Colin Munday - Management Accountant colin.munday@cemedia.co.uk ADMINISTRATION Daisy Jones – Administrator daisy.jones@cemedia.co.uk DIRECTOR Scott English – Managing Director scott.english@cemedia.co.uk

Choose investors wisely During my pow-wow with this month’s cover star, Wahanda co-founder Lopo Champalimaud, he explained that he had learned early on how important it is to choose your investors carefully. As his first business had teetered on the brink of extinction, his investors had revealed their true colours. As it happens, it all worked out fine – the company lived to fight another day – but it’s in those tense boardroom moments that entrepreneurs discover who’s really got the best long-term interests of the business in mind. Having earned his stripes elsewhere meant that when he was faced with an offer of investment for Wahanda from one of the world’s largest and most reputable VC firms, Champalimaud said no. He knew that it wouldn’t be in Wahanda’s best long-term interests. An entrepreneur that was wetter behind the ears would’ve most probably bitten their hand off. The point about choosing investors wisely is reiterated in this month’s article on cleantech. When a recent delegation of UK businesses made their way to the West Coast in search of new sources of funding, they were groomed by SME specialists from the worlds of finance and law not to accept any old offer of assistance. The wrong money, it seems, could be more damaging in the long-term than not securing any money at all.

09

HANNAH PREVETT EDITOR

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.

cemedia.co.uk

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CONTRIBUTORS Alan Keery Battle Creek, Michigan, the home of Kellogg’s, may be known as ‘Cereal City’ but with the recent opening of the much-publicised Cereal Killer Cafe, London is giving it a run for its money. This month, co-owner Alan Keery helped us put together an article looking at how trends work in the business world. Keery’s loves include Chocopotomus, a cereal cocktail comprised of chocolate Krave, Coco Pops, chocolate milk and a Kinder Happy Hippo. Yum! Hates: being a poster boy for gentrification. Don’t worry Alan, we think you and your giant bag of marshmallows are great.

Emilie Sandy Elite Business’s own shutterbug, Sandy recently started shooting unit stills for the BBC with her Blimp (a soundproof housing system for your camera – enabling you to shoot during filming). She has also been commissioned to shoot interiors, including a lovely bespoke Mayfair property. Very fancy. This month for EB, she photographed Lopo Champalimaud, co-founder of beauty marketplace Wahanda. Sandy used to get regular facials and the odd massage at Daniel Hersheson – where all the hip kids go – but these days haircuts are her only only reason for salon visits. Still though, it’s a nice change from when her dad used to cut her hair.

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Sarah McVittie Rishita Devji Devji started helping the EB team in December and has since proved invaluable. When not hard at work, she can be found blasting dancehall on her Beats headphones. For Valentine’s she stayed at the delightful Grange hotel with Anish, the other half. During her stay she discovered The Noodle House on Shaftesbury Avenue, which was so good she has since been back for the banana spring rolls. She is looking forward to a night at the Chiltern Firehouse for a bit of celebrity spotting and fine dining. How she wangled a reservation, we’ll never know. Watch out Justin Timberlake.

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When she’s not tending to her small child, McVittie tends to the other little one in her life – her business. Dressippi recently launched with more retailers including Topshop. Working in the fashion industry, there is never a shortage of awards to attend and this month she looks at how winning can really boost business. Dressippi’s recent Best Use of Technology for Personalisation award at the Retail Systems Awards is reassurance that her team behind the scenes are doing a great job. They are also up for two awards at the upcoming Drapers Digital Awards. Good luck!

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NEWS & EVENTS

It was claimed that the UK’s biggest bank, HSBC, helped its wealthy clients evade tax with secret offshore bank accounts in Switzerland. Dubbed the ‘Swiss leak’, the incident has sparked a global crackdown on tax evasion as more than $100bn of evaded tax was discovered to be owed by 106,000 clients in 203 countries. Accounts held by wealthy clients including global royals and A-list celebrities were uncovered by whistleblower Herve Falciani in 2007, HMRC were given the leaked data in 2010 and identified 1,100 of the 7000 British account holders who had not sufficiently paid their taxes. Five years on, only one prosecution has been made.

A study by PeoplePerHour, the online marketplace for freelancers, found that the number of students starting businesses has increased by 54% in the past 12 months. More than a third of those who founded businesses whilst still in education met their co-founders at university and 57% stated that the lack of job security for graduates spurred them to venture into entrepreneurialism. Nearly half of student participants in the survey admitted that their business was a means to earn extra cash whilst juggling their studies, fitting in work between lectures and 9% even admitted to working on their business during classes.

chrisdorney / Shutterstock.com

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HSBC wasn’t the only bank potentially under fire as it emerged investment banks in the UK could be investigated by the Financial Conduct Authority regulator on the grounds of possible conflicts of interest. The FCA plans to review investment and corporate banking and could invoke new powers that could force banks to be more transparent about charges to clients. Bankers in the sector that generates £10bn annually are said to be stunned at the potential intervention. They needn’t panic just yet: financial experts are questioning the necessity of the FCA probe and do not fear an overhaul of the sector.

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There was good news for market watchers as the FTSE 100 reached its highest peak at close of play since December 1999, during the dotcom boom. During the last week of February, the share index was at 6,949.63 when trading ceased for the day; the previous record was 6903.2. It also rose to a new intra-day record with a high of 6.958.99 beating the Decemeber 1999 record of 6930.2. The 100 companies listed on the London Stock Exchange saw shares rise regularly during 2014 but the record FTSE 100 share price has been attributed to the approval of reform proposals made by Greece. Smashing.

The manufacturing sector grew at a steady rate in February and output is expected to further pick up pace over the coming three months, according to the latest research from the CBI Industrial Trends Survey. 522 manufacturers were surveyed and the sample found their total order books had strengthened robustly and climbed to a six-month high, while growth in output volumes for February were at a seven-month high. The drop in the price of oil has been a stroke of luck for the manufacturing sector as it helped to lower operating costs.

More people in the UK found jobs last year compared to any other year since 1988, showed data published by the Office for National Statics. The number of full-time employees increased sharply in the final quarter of 2014 and saw the unemployment rate fall to a six-year low. However, whilst unemployment has dropped significantly, youth unemployment remains steady and this is a concern for the Labour Party who stressed that living standards in the UK are still far lower than those in 2010.

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Shoppers have been heading to the high street in their droves to take advantage of the latest supermarket price wars. The

Office for National Statistics (ONS)

reported a 3.1% fall in prices in January 2015 compared to January 2014 – the greatest price decline since records began in 1997. Consumers took advantage of plummetting prices which drove up retail sales by 5.4%, bringing the average weekly spend in retail at the beginning of 2015 to £6.5bn compared to £6.3bn at the same time last year.

Tom Gowanlock / Shutterstock.com

NEWS & EVENTS

Remember, what goes on the internet stays on the internet... until you request for it to be taken down. The right to be forgotten rule is a year old; it has given hundreds of thousands of internet users the right to request the removal of personal records, private messages and those embarrassing photos, helping individuals shape their own online identities. Some have expressed the need for the right in the case of personal information being leaked and laid bare for all to see. Others feel that it violates the freedom of expression and enables individuals to pick and choose their identity. Christmas is the season that keeps on giving for Sports Direct as it saw a 2% uplift in its share price after announcing that sales and gross profits for the festive period were up by 2.6 % to £771m and 7.6% to £346.9m respectively. The business, owned by controversial entrepreneur and footballclub-owner Mike Ashley, also has premium lifestyle divisions, USC and Republic, which both saw a slight sales growth of 0.4%. These figures are lower than the previous Christmas which saw a sales growth of 11%. Since most high streets are taking a battering from online retailers, it’s still cause for celebration. Back of the net.

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UPCOMING EVENTS

News.indd 2

Bath Business Expo March 4 Bennett Street Bath, BA1 2QH

Finance for Non-Financial Managers March 8 Corstorphine Road, Edinburgh, EH12 6UA

Business Junction – Networking Lunch March 5 TwoRuba 5 More London Place Tooley Street London, SE1 2BY

Elite Business Event National Conference and Exhibition March 18 - 19 The Old Truman Brewery Shoreditch, London, E1 6QR

Prelude Group – Incentivising beyond carrot & stick March 19 South Place Hotel 3 South Place London, EC2M 2AF London Angel Club Session 1 March 23 Nabarro, 125 London Wall, London, EC2Y 5AL

Twickenham 4 Networking March 25 Wellington Road Twickenham TW12 1JY

A full event listing is available on our website: elitebusinessmagazine. co.uk/events

Financial Development Programme for Senior Managers and Directors March 30 Brindley Place Birmingham B1 2LP

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27/02/2015 19:48


TALKING POINT

Greek Tragedy Should Greece leave the Euro and what would it mean for British businesses?

The EU should ask Greece to leave There is a lot at stake in the current Greece-EU negotiations. If the EU is seen to be too lenient on Greece in its bailout terms, it could lead to other peripheral nations seeking similar concessions, fuelling uncertainty in the euro Philippe Gelis and the Eurozone among investors. However, if CEO and co-founder, the EU does not agree to Greece’s proposal, Kantox Greece could potentially default on their debt repayments and leave the euro. Such an event would see the euro’s value ultimately free fall in the FX market. Any confidence currently remaining in the euro would evaporate and the stock markets of peripheral countries would also decrease in value. A sudden Greek exit would also likely fuel euro-sceptic movements in Europe. In the UK, it would increase the chances of an exit from the European Union. To avoid a shock Greek exit, European leaders have to send a strong message to financial markets and the world in general. The credibility of Europe’s leaders is on the line and they need to show that they have control of the situation. Though rather than risking uncertainty, what the EU should do is to ask Greece to leave the euro in an organised way, and build the Eurozone only with reliable partners. Whatever happens, uncertainty for the euro is virtually guaranteed for the next few weeks or months and that complicates business decisions 15 with Eurozone suppliers and customers, for UK businesses. UK exporters will see their exports become less competitive should the euro continue to tumble against the pound.

A Grexit isn’t yet on the table

WORDS: RYAN MCCHRYSTAL

T

he negotiations between Greece’s new leftwing government and the country’s creditors on how to ease its debt and austerity programmes aren’t over – they have only been stalled. Last last month they secured a conditional lifeline that wins it a four-month extension until the end of June. Alexis Tsipras, the Greek prime minister and leader of the Syriza party, had to give in somewhat to German-led pressure to stick broadly to the terms of its £176bn bailout. The next biggest challenge, apart from persuading the IMF and the ECB that his party’s reforms are the right way forward, is convincing the Greek people that the recent negotiations are the right course of action. After all, Syriza came to power promising to get rid of the status quo but all they really have done so far is to extend it. The standoff will continue. Four months from now we will be in the same position and the heated negotiations will continue. The EU will still refuse to forgive Greece’s huge debts, possibly meaning a slowdown over the euro currency and the possibility of Greece leaving. Should Greece save us all the hassle and leave the euro or is it best for all concerned if it stays on board? Should businesses across Europe – including in the UK – be worried by a possible Grexit?

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Neither the Greek government nor its Eurozone partners want to see Greece leaving the Eurozone – or a “Grexit” as it has become known. However, if they cannot agree a way forward then it may be unavoidable. The recent Alberto developments show, once more, that Greece Alemanno leaving the euro is not a zero-sum game, but it Jean Monnet would be lose-lose for all those involved as professor of EU law countries stand to all gain or to all suffer and risk regulation, HEC Paris Business together. The likelihood of it actually School happening reduces as time passes and serious questioning of Greece’s membership to the Eurozone remains largely absent. Syriza – the coalition of left wing and radical left parties and currently it is the largest party in the Hellenic Parliament – clearly wants Greece to stay in the euro, despite some difficulties in explaining this to its electorate. Only a few economists and parties want a Grexit but they do so because they know that it won’t actually happen, otherwise they would change their mind. The Syriza-led Greek government is naively playing the role of the brave, pushing the rest of the EU to think outside of the box when it comes to look for a new recipe to fix the EU economy. The latest negotiations show that the Greek government is more programmatic and less idealistic that it seemed before the elections. Despite the leather-jacket Economic Minister’s powerful rhetoric, we can expect more ‘business-as-usual’ than disruption in the EU-Greece relationship. No country has ever left the euro and Greece’s exit has not yet been on the table – and nor should it be.

27/02/2015 19:21


BOOK REVIEWS

The Gift of Time – How delegation can give you space to succeed Gail Thomas

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The Creator’s Code - The six essential skills of extraordinary entrepreneurs Amy Wilkinson

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s a start-up scales from a group of co-founders with a bright idea to a 30-strong team, delegation goes from being something that rarely enters one’s mind to being vital to the business’s survival. Learning to delegate smart, rather than simply foisting irksome tasks on the person least likely to complain, is essential; fortunate then that The Gift of Time is here to help start-ups better manage their workloads. One of the key observations of The Gift of Time is how our old view of delegation – a one way trickle from the top echelons of a business downward – is no longer fit for purpose. As frequently, higher-ups might be required to help guide projects to completion, whilst sideways delegation through peer-to-peer work sharing and collaboration between companies is also key. Thomas also goes into the various barriers that often prevent effective delegation; whilst a lack of money or time to invest in the process or concerns about insufficient know-how or levels of control can be off-putting, she shows how these are dwarfed by the benefits delegation can provide. The Gift of Time is not entirely flawless. Particularly early on, there are sections that suffer from a lack of focus, something that can obfuscate the great insight that it does offer. But there’s plenty here for time-poor entrepreneurs looking to create a more efficient workplace. JR

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or a book aimed at aspiring entrepreneurs to be of any real use it must actually contain empirical, learnable and implementable skills. Amy Wilkinson’s Creator’s Code fits the bill because it is more than just anecdotes about success. Over the course of 200 interviews with CEOs from high-growth, highimpact companies – those with over $100m revenue – she has come up with six basic skills, which may seem obvious but in truth very few people have all of them. The good news is that with a bit of work, everyone can. The senior fellow at Harvard University’s Centre for Business and Government, and former White House policy advisor on international trade, has demonstrated these integrated skills through the expertise of leaders in engineering, design, fashion, and food and getting into their head is to find out exactly what they relied on to become successful. The fourth skill is to fail wisely. In the past, companies believed they could prevent failure simply by eliminating imperfections in their products. Today’s successful CEOs know differently. “Creators become comfortable with being uncomfortable. To fail wisely, they place small bets, set a failure ratio, believe enough to persist, and turn setbacks into strengths,” Wilkinson says. As a budding entrepreneur, or even an old timer, it is well worth getting yourself a copy of the Creator’s Code to delve into these six essential skills. RMC

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27/02/2015 19:49


l es so n s learned Watching his mother go through the ups and downs of running a business taught Lopo Champalimaud, co-founder of beauty marketplace Wahanda, a lot about entrepreneurship, discovers Hannah Prevett

PHOTOGRAPHY: EMILIE SANDY

L

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opo Champalimaud is a man in touch with his feminine side. Though he seems an unlikely candidate to start a thriving company in the beauty industry, he gained an early insight into the needs of busy women from a young age. His mother, Alexandra Champalimaud, is a highly acclaimed interior designer who has her own firm based in New York. “I really love strong women,” he starts. “For women especially, it’s a really hard balance to be career-driven, raise families, remain feminine and all of those different things you’re trying to do all at once. I wonder if it influenced the fact that I started a business that is female-dominated.” After his parents’ divorce when Champalimaud was six, he moved from Portugal to Montreal with his mother, where she set up her interior design business. “She’s a real force of nature; she’s quite amazing. She’s very young – she had me when she was 20 – and she’s got this incredible drive.” Champalimaud and his brother, six years his junior, grew up watching their mother build a business, “with all of its ups and downs. It’s not always been easy but she’s a real fighter.” Champalimaud jokes he knew “everything” about the business. “I knew the good clients and the bad clients and I knew the employees who were performing and those who weren’t.” He started his first business months after finishing a degree in history and political science at McGill University in Montreal. His stepfather had given him a desk and a phone in his office in New York and Champalimaud was left to his own devices. He

learned that a company his stepfather’s private equity firm had invested in was going out of business and one of its assets was the right to do internet market research. “This was early 1994. There was no web, there was no browser. There was AOL and that was basically it from a consumer perspective,” explains Champalimaud. “I thought: ‘I know nothing about the internet, I definitely know nothing about market research but I think I want to start the world’s first online market research firm.” Soon after, he and three co-founders begun Cyber Dialogue, “the world’s first online market research company”, which later morphed into an online CRM business. The company scaled fast as the dotcom bubble began to swell. In the spring of 1999, as headcount hovered around the 200-mark, the firm readied itself to list on the Nasdaq. “We were two weeks from going public. Everything was filed, all the paperwork was done – and then the market crashed. We ended up having an incredibly difficult year that year,” the entrepreneur admits. “We thought we were going to lose the business a couple of times.” Incredibly, the business survived and in 2000 Champalimaud moved to London to oversee the firm’s growing European clientbase. After a few years in the capital and masterminding a turnaround to restore the company’s fortunes, he wanted out. He sold his shares back and left in 2003. He didn’t have to wait too long for opportunity to come

27/02/2015 19:24


This is not a sprint, it’s not even a marathon; it’s an iron man

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27/02/2015 19:25


the elite INTERVIEW

20

a-knocking. In 2004, Lastminute.com co-founder and Silicon Roundabout godfather Brent Hoberman offered him a job running lastminute.com’s lifestyle business. “Brent and one of my good friends had gone to university together. I’d talked to him a bit about my previous CRM business and we’d done a little bit of consulting work with lastminute.” Champalimaud was experiencing something of a crisis of confidence. “At that point, I’d worked for myself all my professional life and it’d only been a modest success. I thought maybe I wasn’t designed to do this and perhaps I should go [and] try working for somebody else.” There are worse people to work for than Hoberman when perfecting the craft of running internet start-ups. “I’ve got a huge amount of respect and admiration for Brent.” And though he describes his time at lastminute.com as a “great experience”, it soon became apparent Champalimaud’s calling was to start another business himself. “I loved it. We did a really good job, it grew incredibly quickly; when I left it was probably 50% of the business in terms of orders sold. And we built a great team.” After a long day at the office, Champalimaud tried to book

Elite Interview.indd 3

a massage. When internet searches, email exchanges and phone calls to salons proved fruitless, he gave up. “It was such a rigmarole that by the time I got to the end of the search I actually didn’t want the massage any more,” he recounts. “It dawned on me that you book everything online – you book your flights, your cars, your hotels, your dating life – but you don’t do your hair and beauty.” What’s more, the hair and beauty industry was crying out for transformation. Not only was it a “large, fragmented marketplace”, which would benefit from an aggregator or marketplace, but local salons were struggling to haul themselves into the 21st century and wean themselves off antiquated booking systems. As Wahanda launched on Valentine’s Day 2008, Champalimaud had something to prove. “I felt like [I was] the only guy who’d been in the internet world, pre-internet stage, who hadn’t had a home run. I felt like, ‘what’s wrong with me?’” Though he was modest about his success to-date, investors were in no doubt as to his credentials as they lined up to invest in Wahanda, which he billed as “the OpenTable for spas and salons”. The initial £1.5m, a pretty punchy seed round by anybody’s standards, was raised “on the back of a PowerPoint presentation. We didn’t have anything to show them. We had a team – we had four people – and we had a business plan. That was it.” It was clearly enough to persuade investors to part with their cash. One anonymous investor backed Champalimaud from the get-go – without knowing a thing about his new venture. “We had one investor in particular who’s a big US billionaire and had invested in my previous business. He came to London and we went out for dinner. He said to me, ‘Lopo, what are you doing next?’ I said, ‘I’m working on a new idea,’ and he said, ‘great, I’d like to invest.’ I said, ‘I haven’t told you what the idea is yet,’ and he says, ‘it doesn’t matter, I’m in’.” He was ‘in’ to the tune of $1m (£650,000). “It was an incredible privilege but I also felt a huge amount of responsibility as a result,” admits Champalimaud. “I asked him much later on, ‘why did you do that?’ And he said, ‘there’s nothing else but people. If you believe in a person, that’s it.’” The American billionaire was just one of a handful of highprofile investors. Other familiar faces amongst those who put in seed capital are Brent Hoberman, Stefan Glaenzer and Wolf Hengst, the former head of operations at Four Seasons. Though Champalimaud’s general approach is to “take as much money whenever it comes to you”, he rejected investment from “one of the world’s biggest VCs” during that seed round

My mother’s a real force of nature; she’s quite amazing

27/02/2015 19:22


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27/02/2015 19:35


the elite INTERVIEW

in 2008. “We said no, not because we didn’t think they were amazing and not because we didn’t like the team, but [because] we felt like we were a small bet. Basically they were putting a little bit of seed money in and unless we were an absolute home run, an absolute knock-it-out-of-the-park from day one, they probably weren’t going to Founded: 2008 follow their money.” In other words, if Staff: 190 they chose not to invest again, it would Revenue: £20m+ send a negative message to the rest of Investment to-date: £24.4m the investor community. “If one of the Markets: Two, adding six top VCs in the world doesn’t follow their money at that point it’s very hard for any in 2015 other investor to go against that.” Champalimaud was able to make such informed decisions because of his previous experience with investors, he says. “There’s no question that was a function of experience. Businesses in the internet space are momentum businesses and there are a lot of really good companies out there that have taken longer or have stumbled somewhere in the middle. You want investors that really understand the business.” It may have taken a little longer than he’d hoped (“I should be retired on my yacht,” he jokes,) but seven years in, Wahanda has begun to build real momentum. After a drastic decision to turn off the daily deals side of the company, Wahanda’s core business is now predicated on it providing salons and spas with its booking technology and listing them on its site and app. In return, Wahanda takes a 20% commission on any treatments booked through the platform. It’s growing rapidly with 800 new salons and spas signing up a month. He says 10,000 are now listed in total. Its acceleration since 2013 has been partially fuelled by three acquisitions. The

VITAL STATISTICS WAHANDA

22

Elite Interview.indd 4

first, Salonium, was a Lithuanian company of four that built booking software for the spa industry; the second, Salonmeister, was a German rival Champalimaud snapped up in October 2014, and the most recent in January this year, Lemon Labs, is a Lithuanian mobile-development firm. The addition of Lemon Labs has further bolstered Wahanda’s development team. Despite having only launched its first app in March 2014, the company is now focusing on mobile-first strategy. This has been driven by consumer behaviour, says Champalimaud. “Our business today is 40%-plus mobile.” And it’s growing fast. “We believe that this business will be 80-90% mobile in the next year to year and a half. Mobile really is going to be the predominate platform for us going forward.” The other tenet to Wahanda’s growth strategy is aggressive

I thought maybe I wasn’t designed to do this and maybe I should go and try working for somebody else overseas expansion. Between now and June of this year, it plans to enter six new European markets: France, Spain, Italy, Austria, Switzerland and Ireland. It already has a significant presence in Germany, thanks to the Salonmeister acquisition last year. “When we acquired them, they were 20 people or so. They’re now almost 70.” Champalimaud hints that further European acquisitions may be on the cards. “The tough thing about our business is that it’s a very local business so when we go into a new market there’s only a few things I can do: I can provide capital, I can provide technology and I can provide operating excellence and know-how. But ultimately, I’m reliant on strong, local teams to execute,” he explains. “I’m trying to create a constellation of entrepreneurs who share the same vision, have that real independence, who have the ability to execute in their local markets – but do it in a very co-ordinated, very structured, very unified way.” This all makes for a crowded schedule for Champalimaud – he rarely gets home in time to tuck in his two-year old daughter – but he acknowledges that short-term sacrifices are necessary in the pursuit of longer-term success. “There are certain phases – like right now – where it’s full-on and work demands more than it probably should an ongoing basis. Over time it evens out. You’ve got to believe it’s in phases because [this pace] isn’t sustainable forever.” The entrepreneur avoids burning out by “protecting his weekends where possible” and keeping physically fit – he’s an avid cyclist, runner and skier. “I’m very active from a sports perspective; that’s really important to me,” he says. “I tell my team, ‘this is not a sprint, it’s not even a marathon; it’s an iron man’. So you’ve got to pace yourself and have those moments of recharging. They’re really important.”

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27/02/2015 12:30


ONE TO WATCH

In providing letterbox flower delivery, Bloom & Wild is making it easier to give a scent of the outdoors

WORDS: JOSH RUSSELL

26

G

iven the fact that Valentine’s Day is still fresh in our memories and Mother’s Day is looming large ahead of us, it’s most definitely the season for flowers. And yet ordering flowers – especially as a gift – is no bed of roses; somebody has to be in to take delivery and often the blossoms, which look so vibrant on arrival, wilt all too soon. Fortunately, in bringing a touch of tech to the humble bundle of flowers, Bloom & Wild has hit on a fresh approach that promises to make gifting bouquets a breeze. Bloom & Wild’s co-founders Aron Gelbard and Ben Stanway certainly aren’t lacking in professional experience; Stanway had been a senior partner for Habrok Capital, whilst Gelbard had worked in various consulting roles for retail consumer products and tech companies. After being introduced by a mutual contact, the future founders got the entrepreneurial itch and realised that they’d identified fertile ground for innovation. “We had both independently looked at the flower business and thought that there was an opportunity to create the first flower brand that people genuinely love,” Gelbard explains. The seed for Bloom & Wild was sown when its founders realised there was a lack of a coherent brand in the flower delivery market. “When you’re looking for jeans, you probably don’t go to Google, type in jeans and buy the cheapest ones,” Gelbard says. And yet this is precisely how customers shopped for flowers, leaving the founders of Bloom & Wild to believe there was space for a brand that consumers felt a real loyalty toward. “We just thought it was unusual that, when you’re expressing to somebody that you really care, you’re trusting Google to come up with an

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option for you, rather than there being a brand that you trust and love.” Recognising it was time for their idea to germinate, Gelbard and Stanway decided to put their money where their mouths were. “We put in a little of our own savings to start with; not a lot but we did take a little bit of a risk just to get it off the ground,” says Gelbard. With this they created the first iteration of the website, made up the first batches of flowers and rented some space by the hour at New Covent Garden Flower Market to help get the word out. “We then raised some seed funding from angel investors and that kept us running,” he says. To begin with, the growth in the company’s user base was relatively organic, relying on word of mouth to generate buzz around the company. “We asked our friends to buy flowers and to tell their friends and co-workers about it,” says Gelbard. Since then Bloom & Wild has employed a sophisticated marketing mix, forming partnerships with other start-ups and corporate brands, as well as using targeted ads on social media. It also has a refer a friend system – which offers money off for referrals – and this has proven invaluable in getting the word out. “That’s really helped us to spread the word and encouraged people to tell their friends about us,” he says. But what is it that makes Bloom & Wild stand out through the competition? One factor is that they have found a way to deliver fresher flowers for less cost. “Flowers go through lots of middlemen between when they’re cut at source and when they end up on your kitchen table,” says Gelbard. “Each of those steps mean that the flowers are getting older and that they’re getting more expensive.” Recognising

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ONE TO WATCH

Flowers go through lots of middlemen; each of those steps mean they’re getting older and more expensive Aron Gelbard, Bloom & Wild

how a more direct supply chain could benefit its customers, Bloom & Wild has established a direct relationship with a grower and importer, meaning it takes less time and less money for flowers to travel from cutting to the consumer. Bloom & Wild’s biggest innovation, however, is how the flowers are delivered. One of the biggest pain points of sending flowers as a gift is the fact that somebody has to be in at the other end to receive them. Fortunately, thanks to a chance observation, Bloom & Wild has hit upon a novel solution. “Ben was on a trip to the Netherlands and saw flowers being shipped around Amsterdam airport,” Gelbard explains. “He happened to be passing a cargo area and he saw the flowers laid flat in large boxes, rather than standing up in water.” Consulting with contacts in the industry, they found out that flowers are shipped in flat boxes and only arranged in the final steps of the supply chain. “We thought ‘if they’re transported like that anyway, then why can’t they be transported to the end customer like that as well?’” When customers order Bloom & Wild’s flowers, they arrive in boxes that easily fit through the letterbox, meaning, even if you’re out, your flowers will be waiting on your

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doormat when you return. “If flowers can fit through the letterbox, receiving them is much easier,” says Gelbard. Consumers then get to arrange their own flowers, something that has been an unexpected hit with Bloom & Wild customers. “When we started, we didn’t know whether people would enjoy arranging their flowers,” he explains. “But they actually think it’s a great way to receive flowers; they like the condition they come in and giving them that care and attention.” Not only does this innovation make receiving flowers easier and more aesthetically pleasing but it has also opened up a whole new payment model for Bloom & Wild. When the company launched, a lot of businesses were getting involved in gift subscription services. Requiring somebody to be in for delivery meant most flower delivery services couldn’t get involved but Bloom & Wild’s letterboxfriendly bunches made a regular delivery of posies a possibility. And this is all to the good, as Gelbard believes flowers lend themselves particularly well to a subscription model. “If you send somebody flowers, you know they’ve got a finite lifetime,” he says. When looking to spend a little more on a gift, few are willing to stump

up significant amounts of cash for something that will be little more than compost in a few weeks. But a subscription allows customers to give flowers on an ongoing basis, which can give the gift a more long-term value. “You’re giving somebody the experience of having flowers in their life for an extended period, rather than just something that lasts a few days,” Gelbard continues. “It takes flowers from being a really perishable gift to being something more enduring.” A lot of Bloom & Wild’s focus is on making the giving and receiving of flowers as easy as possible and it has invested a considerable amount of effort simplifying its buying process. This is most noticeable on its iPhone app; released last November, it allows customers to order flowers in as little as ten seconds. Once the customer has selected one of its curated bunches, they can link to their phone’s address book to deliver to a contact and use stored card details to make payment. “You need to make it really simple for people,” Gelbard explains. “If you’re standing on a crowded train, you’ve remembered that it’s your mum’s birthday and you haven’t got round to buying a present yet, then you want it to be as easy as possible.” In light of all of this, it’s hardly surprising how well Bloom & Wild has been received. “We’re already the top-rated flower company in the UK,” Gelbard says. The service has been showered with five-star reviews on Reviews.co.uk and has an average review of 4.79, showing just how popular it is with consumers. But it’s not just Joe Public that loves Bloom & Wild’s service; it’s proving a hit with journos as well, netting no end of press coverage and winning the Guardian Small Business Showcase logistics award. “We have been featured in a lot of national publications already and we’re really happy that people find us worth talking about,” he continues. “It’s really encouraging.” Bloom & Wild is most definitely flourishing. It’s currently working on a new iteration of its app that will serve reminders and allow quick ordering for important events like birthdays, with an Android version to follow later this year. It’s also expanding its product line beyond flowers; it has recently added the ability to send luxury Belgian chocolates with your bouquets. Given the loyal fan-base the start-up has built, it really does seem like Bloom & Wild is ready to enter a whole new stage of growth. “We’ve learned a lot so far and our customers really like the product,” concludes Gelbard. “Now we just need to develop it further and get the word out.”

29

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* Weird is the new *

normal •

The mere mention of the word ‘hipster’ inspires a primal anger in some people. But, despite the cynicism, there is value to be found in embracing your weird side

W 32

hen the New York Times first wrote about the cheeseburger in 1938, the paper referred to the minced meat and bread combo we all know and love today as a Californian eccentricity that would fall into the dustbin of history. But Elizabeth Forman, the scribe in question, couldn’t have been more wrong. Similarly, the bicycle, which the Washington Post dubbed in 1890 a must-have for stylish ladies and no longer just for the ‘bleachedhaired, music-hall type’, was derided by the same newspaper in 1902. “The popularity of the wheel is doomed,” it said. Nowadays, most major cities in the world are scribbled with cycle lanes. Trends are a funny thing, and the things we now couldn’t live without were probably once scoffed at for being weird. Those bleached-haired musichall types of yesteryear are today people like Northern Irish twins Alan and Gary Keery, who in December opened their Cereal Killer Cafe in Shoreditch, serving up one million combinations of cereal, milk and toppings to the masses. “Because there’s so much choice we’ve been described as the ‘Netflix of cafes’,” says Alan Keery.

WORDS: Ryan McChrystal

Breakfast of champions

Most of us enjoy a bowl of cereal but the Cereal Killer business model isn’t one that would have survived only a few years ago. In the current climate, however, it makes perfect sense. “Niche cafes are doing very well at the minute. People are looking for something different and untypical,” says Keery. “Instead of drinking at Starbucks every day, it’s nice to go and have a coffee somewhere that has a little bit of entertainment and that gives you an overall better experience.”

Weird is the new normal.indd 1

Businesses now seem to understand more than ever that aesthetics are paramount to making the world around us special. A major selling point for the Cereal Killer cafe is nostalgia, and as an 80s or 90s kid you will be transported back through the decades, with Thundercats on the TV and all the pop tunes you used to dance about your room to on the radio. There’s even a cereal museum, packed with all the freebies you’d find in your cornflakes box. But it’s not just for millennials. “People bring their young children and we’ve had a couple in their 70s come in looking for a cereal that was discontinued decades ago,” says Keery. “It just shows that a love of cereal isn’t defined by any generation – it spans from kids to pensioners.” The Cereal Killer Cafe has received mixed responses but queues out the door every Saturday surely show which side is winning the argument. Even Russell Brand was snapped looking in the window but was put off by all the waiting. Cereal, it would seem, is the other great leveller and no matter how famous you are, you will have to wait your turn. Keery is confident the cafe won’t become a passing fad as, in only a few weeks, it featured on the top 100 restaurants in London on TripAdvisor and the brothers have been approached by people as far away as Uganda and Columbia to talk about franchising. We may soon see a second cafe open up in Camden as well as a Cereal Killer cookbook in time for Christmas – not to mention the line of cereal-inspired jewellery they’ve collaborated on. Cheerio around your neck, anyone? Of course, as with everyone who stands out, there is the inevitable hostility. “We’re just creative people

27/02/2015 19:24


ANALYSIS

doing something new here in Shoreditch and people have just tagged us as ‘hipsters’.” Hipster is a predominantly pejorative term and there’s a lot of hate associated with it. “We’ve had death threats and some very nasty things said about us on social media but we just laugh it off,” says Keery. It’s not all bad though, because on the other end of the spectrum they’ve received a lot of high praise for their efforts and even a few marriage proposals. “I’d rather people have a strong opinion than no opinion,” he says.

I’d rather people have a strong opinion than no opinion Alan Neery, Cereal Killer Cafe

It’s been said that imitation is the sincerest form of flattery and the Cereal Killer Cafe isn’t short on copycats. Keery doesn’t mind though, as long as they do it right. It has also inspired a lot businesses specialising in niche products to set up shop, including a new Shoreditch pop-up specialising in another breakfast favourite (or not) – porridge. The most interesting salute to the Keerys – and one they are both a fan of – is the world’s first crisp sandwich cafe that opened in their hometown of Belfast in January called Simply Crispy. It had a rather odd beginning but in the current climate of ‘anything goes’ it almost seems normal. It started with a joke. When the Cereal Killer Cafe opened, a fake news article appeared on the website Ulster Fry – a Northern Irish equivalent of the American news parody website the Onion – announcing the opening of Belfast’s hippest new eatery. The fictitious noshery was to serve up, “that staple of the Northern Irish dinner table – the humble crisp sandwich”. When existing cafe owner Andrew McMenamin read the Facebook comments below the article and immediately saw the potential, it was a case of life imitating art. It went from parody to physical existence in around a week. “I approached the guys from Ulster Fry and asked them if

Weird is the new normal.indd 2

33

they wanted to see what we could get from this and I was actually surprised when they agreed,” says McMenamin. The time is obviously ripe for setting up a quirky business with mass-appeal. Even the cost of starting a company and finding customers has plummeted in recent years. Creating something with national reach once cost millions and took a long time but today it can be done for significantly less money in a week. “We remained as close to the article as possible and above all we didn’t take ourselves too seriously,” says McMenamin. Simply Crispy now serves, among other things, Tayto cheese and onion crisps inside a local favourite, the Belfast bap – a crusty round bread usually cut in half and filled with whatever you fancy. Even the interior is a bit of a pastiche. “There’s a lot of faux irony including framed Smash Hits posters and a picture of Roy Walker with a fake signature on the wall. It’s very naff but it seems to work.” Predictably, it doesn’t come without a side order of abuse. “We respond in a typically Northern Irish way: with sarcasm,” he says. “One tweeter predicted we’d last no more then two

27/02/2015 19:25


ANALYSIS

Cheeky girls Volupté

months, to which we replied: “We’d only give it one month, so thanks for your optimism”.” There is an element of truth in the tweet, as McMenamin understands that with the novelty factor comes the need to adapt. “The plan was for us to kill it off and bring it back in the summer as a mobile version out on the road, although if we closed down tomorrow someone would set up a Facebook campaign to bring us back; it’d be inevitable given all the interest we’ve had.” Look what the cat dragged in

34

Cats rule the internet. It’s a fact. Drawing on this trend comes Lady Dinah’s Cat Emporium, London’s first ever cat cafe, allowing clientele to ‘relax with a cup of tea and spend time in the company of feline friends’. Founder Lauren Pears is confident the business is set for long-term growth, and if you’re in any doubt, just try booking

gentrification, they genuinely are transforming many areas for the better. Take Hackney, London. Or Williamsburg, NYC; Detroit; the Mitte district of Berlin; Johannesburg, South Africa; and even the seaside town of Margate in Kent. Each has been transformed from being blighted with derelict areas with no jobs and no hope, into some of the most interesting cultural hubs in the world. It was achieved mainly through setting up businesses in tech, farming, real estate and dining, usually with a unique twist. Shoreditch is no different. Lady Dinah’s is not just a quirky idea: it also has a sustainable business model. In 2013, the start-up raised £109,510 on Indiegogo to support its opening, and its fan base has matched investor interest with over 70,000 fans and followers on social media. Anastasia Emmanuel, director of UK tech and hardware at Indiegogo, says: “What may seem quirky to you or I could well resonate with many people across the world, which is what we have seen time and time again.” Entrepreneurs like Pears have raised hundreds of thousands of pounds for “ideas that traditional investors or banks would be hesitant to support, because they’re just too niche or there is seemingly no market.” But ordinary people are more than willing to

If cabaret singing, burlesque, comedy, drag queens, cocktails and afternoon tea all at once sounds like your kind of thing (and it really should be) then Volupté, the fun and sexy hangout for all the cool kids, is for you. If you’re open to it, you’ll enjoy, regardless of age. Burlesque is a good example of a style going from niche to becoming – while not quite mainstream – much more accepted over time, having undergone something of a revival over the last decade. Combining its rising popularity with afternoon tea – something, which itself has come back in fashion after about, oh, 60 years – is a stroke of genius by founder Denise Farrell. Co-owner Louise Woollard says the company is aimed at people who want that little bit of glamour in their lives. There is also something of an escapism behind it. “When times are a little bit financially difficult, people get a little nostalgic about times past,” says Woollard. “The 1920s and the 1950s are considered a time of of class, refinement and beauty and that’s the style we are going for.” As with Lady Dinah’s Cat Emporium’s Lauren Pears, Woollard held a corporate job which before moving deciding to move into something much more interesting. “I am used to doing long-term projects where you don’t see the results for years; with Volupté I see it all come to life immediately.”

a table there any point during the next three months. It was while travelling in Southeast Asia that Pears visited her first cat cafe. Soon after, following a bad day at work at her previous job as a senior project manager, she received a cuddle from a street kitty, which made her feel much better. In 2012 she packed it all in and decided to open her own, right in the middle of – surprise, surprise – Shoreditch. “I found London a much more openminded place than my hometown of Brisbane, Australia, and I felt more comfortable pitching a cat cafe here,” says Pears. Being able to spot potential in a location and then make it work for you is exactly what young people are doing in cities all around the world. Despite becoming the lone scapegoats for social trends like

Weird is the new normal.indd 3

27/02/2015 19:25


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ANALYSIS

step in, she adds. “Crowdfunded businesses represent supply and demand in action.” Doing things the Hemingway

36

For Wayne Hemingway, of Red or Dead fame and co-founder of Hemingway Design, people should be less critical of these young trendies because one day businesses might just be following in their footsteps. Hemingway, a fashion designer, set up Hemingway Design with his wife in 1981 to breathe “new life into old concepts”. He is something of an authority figure when it comes to style and offers some insight why we’re seeing such an influx of interesting ideas. “With the economic downturn people began to understand the value of individuality and shopping local instead of giving all their money to corporate fat cats like Tesco,” he says. “There’s a definite movement happening and not only is it good but it’s been a long time coming.” When the economy tanked, it forced a lot of 20-to30-somethings to be more innovative and start businesses. “It’s not been as easy for them to get jobs recently, and that can have a really positive impact on creativity,” Hemingway says. “The last time it was this difficult it was the early 1970s and that created punk and all the creativity that came with it.” He also believes that boredom and the death of the high street have a part to place in the current trends. “Town centres are places where people should get together so we should be thinking about that and not be worried about Woolworths and Blockbuster [going bust], because they’re just proliferation businesses that aren’t needed anymore.” As for the criticism levelled at some of the aforementioned companies, he explains: “People can be very cynical and sneering in the UK and if something is trendy and people don’t understand it then they immediately attack it; there is a culture of people who just don’t get cool and will attack anybody who is a bit different but what we should be doing is embracing their difference.” As for the Keery brothers and their Cereal Killer Cafe, Hemingway doesn’t see it lasting but can’t wait to see what they do next. “Those guys will go on to do something really fantastic. They have a great sense of humour and it’s all about trying something new. Often you’ll fail after a year or two, and there’s no problem with that. Failure is great. You learn so much more from it than from something that succeeds massively.” In 2013, Mike Lazerow, a serial entrepreneur who has founded several successful media companies in the US, published an article on LinkedIn called, ‘Why weirdos outperform normals’, which racked up 300k+ views. ‘I like weirdos. They are interesting. They have crazy ideas. They have passion,’ he wrote. We at EB are inclined to agree. ‘Weirdos change the world.’ Will cereal cafes become the next burger joint? Will outlets serving coffee and the company of cute, furry animals grow at the same rate that bicycle lanes have done? We’ll be honest – we don’t know. Trends work in such a way that predictations are essentially pointless. But let’s keep embracing the weird, and remember: haters gonna hate. 

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With the economic downturn, people began to understand the value of individuality Wayne Hemingway, Hemingway Design

27/02/2015 19:25


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27/02/2015 19:51


FINANCE

On impact

Focusing on more than just the financial bottom line means that impact investing can create value for a much broader cross-section of society

I

WORDS: JOSH RUSSELL

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mpact investing – in which capital is invested in companies, organisations and funds to create not only financial but social and environmental value – has come into its own in recent times. An international survey conducted last year by J.P. Morgan on behalf of the Global Impact Investing Network found that respondents had invested $10.6bn in 2013 and intended to invest $12.7bn in 2014, indicating a 19% growth in the market. More and more players are getting involved in the space. Whilst dedicated social or environmental funds are now well established, there is an increasing diversification of the kinds of investors getting involved in the impact investment landscape. “You have angels and VCs getting involved,” says Kieron Kirkland, development researcher at Nominet Trust, the social tech investor. “Some of them are ethical in their approach and slowly but increasingly they’re looking for social businesses.” There is also a sense that the impact investment market is maturing, with a greater variety of different investment solutions available. Kirkland points to work done by the Cabinet Office with co-mingling funds, which bring together traditional funds and commercial investors to minimise the risks for the latter when making impact investments. “There’s a growth in the impact investment market generally because people are looking for greater diversity in portfolios,” he says. But this isn’t the only factor driving the boom in the sector. In part, the increasing interest in impact investing is just a reaction to the enormity of some of the issues our civilisation faces. “We’re facing big social and environmental problems,” says Joe Ludlow, director at Nesta Impact Investments, the impact investment wing of the innovation charity. “We

27/02/2015 19:26


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FINANCE

40

need bigger, cheaper, more scaleable ways of caring for people, getting them into employment and working reducing our reliance on finite resources.” Fortunately entrepreneurialism is all about problem-solving, meaning that start-ups are naturally drawn to trying to address these challenges. “Entrepreneurs see that many of the big knotty problems that they can really get their teeth into are in areas of social and environmental impact.” Certainly these entrepreneurs are creating untold value by addressing these issues and, if nothing else, investment is about supporting the creation of value. But traditional investment typically focuses on the financials alone, which can often miss out on the huge amount of value being created for society at large. By contrast, impact investment is centred upon a triple bottom line of financial, social and environmental value. “It’s about really having those social aims at the core of the investment, intertwining the social objectives with the financial objectives,” explains Kirkland. A large part of the interest in impact investing is driven by the fact that financial concerns do not sit in isolation. Even those purely concerned with economic value ignore social and environmental impact at their peril. “By not taking into account the social or environmental implications of what you’re doing in context, the economic side of things could actually suffer,” says James Johnston, co-founder of Open Utility, the renewable electricity marketplace. Investments that secure short-term returns but that, for example, undermine the health of the workforce or unnecessarily burn through limited ecological resources are something of a zero sum. “At a very high level, it’s all one world and if we mess this up it’s going to be very bad for business,” he says. But that’s not to say impact investors are simply throwing money at these problems for the sake of karma; many will be looking for a very concrete return on investment (ROI). However, whether this ROI takes the form of cold hard cash depends rather on where their individual priorities lie. Certainly for traditional VCs and angels, there are no end of commercially viable social enterprises that can generate just as a strong a return as a purely commercial venture. “The returns that you get from making an impact

On impact.indd 2

investment aren’t necessarily any lower than what you would get from mainstream investment,” says Ludlow. However, not all of those who invest for social impact are doing so looking for financial returns. “Grant-making organisations are often not looking to make their money back,” Kirkland says. “They’re looking to create ongoing impact.” But he stresses that often it’s not a case of either / or; as many investors have blended objectives, what they get out of an investment will generally reflect this. “It’s quite nuanced because we tend to see things as either grant-making or investment but that’s really not the way to think about it,” he says. “We should be able to see these things more as a spectrum.” Kieron Kirkland, Nominet Trust Understanding the returns impact investing can generate, however, can be tricky because social or environmental value can sometimes be seen as rather subjective. “One of the challenges that we’ve had with this sort of the social funding is trying to specify how people could draw value from it,” says Johnston. Whilst he believes financial predictions can be just as unpredictable, there is a sense that some impact investments are still made on a qualitative rather than quantitative basis, which can make it a very tricky game for inexperienced investors to enter into. “I’ve seen other organisations just writing any old crap, just ticking the social and environmental blurb box, rather than actually having a hypothesis, testing it and having some real results,” he recalls. It’s certainly true that impact investing suffers from a lack of metrics

It’s about intertwining the social objectives with the financial objectives

27/02/2015 19:26


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that make it easier to carry out due dilligence around the value they create. But, as Ludlow points out, the ways we measure and quantify financial viability have had a much longer period to establish themselves. “The system of financial measurement that we’ve got has probably been a 1,000 years or more in development,” he says. “Measuring social and environmental performance in comparison has got a relatively short history.” One of the main stumbling blocks with quantifying non-financial value lies in finding common metrics and units of measure. Here Kirkland feels environmental investment has an edge, as there’s a clear unit of environmental impact in common use. “We talk about reduction in carbon emissions; that’s something that’s applicable across the environment,” he says. In the social space, things are significantly more complicated, especially as people work at across radically different levels, from one-to-one to a community level. For this reason, Nominet Trust is working with Social Value UK on its Global Value Exchange project. “It’s building a huge bank of different matrixes and measures for assessing social value,” Kirkland continues. There’s still plenty of room for growth in the UK market; although it’s notoriously difficult to pin the market down to a concrete figure, Ludlow says it’s a given that this falls far short of the size of the environmental and social problems we face. “But that’s the opportunity and not the problem,” he explains. The longer the heritage the market has, the easier it will become to demonstrate the value it creates and quantify the value offered by new entrants. “When there’s data, a track record and people feel like they can make an assessment of the financial, social and environmental return, then why wouldn’t they get involved?”

It’s all one world and if we mess this up it’s going to be very bad for business 42

James Johnston, Open Utility

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Utility and value Open Utility

It’s fair to say that Open Utility delivers a triple bottom line of financial, environmental and social value. “Our idea was a peer-to-peer energy marketplace,” says James Johnston, the company’s co-founder. “We want to give customers direct access to generators so they can have far more control over where their power is coming from.” Essentially, the service allows those with renewable generators to sell their excess electricity direct to local consumers, giving both customer and suppliers more control over their energy supply and allowing people to benefit directly from the green energy in their neighbourhood. Impact investment has helped make the peer-to-peer energy supplier what it is. Johnston and his co-founders first secured investment from Bethnal Green Ventures, the environmentally and socially focused accelerator programme, allowing them to concentrate on the project full time. Then it received funding from Nominet Trust, again on the strength of its triple bottom line. “It was the hybrid of focusing on the environmental impact of our service with an actual ability to build stronger communities buying energy locally,” says Johnston. Since then it has received backing from Climate-KIC and the Department for Energy and Climate Change (DECC) for the launch of its pilot programme, largely on the basis of tackling climate change and securing the UK’s energy supply. The project will be a six-month test run of its energy marketplace, helping to demonstrate the value it provides. And ultimately it’s this value that Johnston things is the most important driver. “It’s not just about financial reward,” he concludes. “It’s about doing something that’s going to positively impact the world.”

27/02/2015 19:26


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27/02/2015 20:00


FINANCE

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44

One topic that will always garner interest is how much you pay an employee. It can be difficult to determine if you’ve never done it before but sometimes even the pros get it wrong. The general rule is to pay enough to get the most out of your workers and attract the best talent but not so much as to overpay and leave yourself unnecessarily out of pocket. If this sounds a little tricky, fear not, for we have experts at hand to show that determining how much to pay staff needn’t feel like applied mathematics

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Stick to the law, or else…

Make workers happy

It should go without saying but following the news recently that 162 employers failed to pay the minimum wage, it would seem some people still don’t get that sticking to the law is a must. “An employee’s right to be paid fairly is one of the most fundamental aspects of the employment relationship,” says Richard Smith, head of employment law at Croner. “At the very least there are statutory obligations that will need to be met, namely the National Minimum Wage Act 1998, which creates a minimum wage across the United Kingdom, and the Equality Act 2010, which requires employers to pay men and women equally for equal work.” The current minimum wage rates are available from the UK government website. Not only can failing to adhere to the law land you in trouble but research by the Department for Business, Innovation and Skills (BIS) reveals that businesses who pay less than the minimum wage risk huge damage to their business through loss of reputation, low productivity and higher staff turnover.

They say money can’t buy happiness but is this always true? As it turns out, you can strike a balance with pay to ensure you keep employees happy while still getting the most out of them. Nic Marks, director at Happiness Works, a company that focuses on sciencebased, responsive analytics to kickstart new ways to happiness and productivity within the workplace, says: “Too little pay can induce feelings of hostility, while overcompensation not only increases costs to businesses but, contrary to popular belief, can reduce motivation.” “A subjective sense of relative pay is far more important than absolute wage,” says Marks. “When employees feel they are paid more than others in similar roles they experience higher job satisfaction, suggesting that a sense of recognition is more important that spending power.” But be careful. Higher wages do not always result in happiness. “The highest paid tend to have the most job-related anxiety. Paying people too much can also reduce their motivation, a phenomenon known as the ‘over-justification effect’.”

27/02/2015 19:27


FINANCE

An employee’s right to be paid fairly is one of the most fundamental aspects of the employment relationship Richard Smith, Croner

Keep it transparent In the pre-internet era, when employers had access to payroll data and surveys and employees didn’t, it was easier to keep them in the dark about pay. In this age of ubiquitous information, companies increasingly realise it is unwise to blur the picture and still expect energy, output and loyalty from staff. Thomas Drewry, co-founder of Emolument.com, a salary benchmarking site, says: “Enhancing salary transparency reclaims hours spent browsing job boards and forums, and chatting to headhunters and colleagues trying to extract information, allowing everyone to focus instead on being productive in the job itself.”  Salary transparency can also pre-empt frustration, confrontational conversations and mistrust among colleagues, which often plays a big role in individuals wanting to move on. “Crucially, transparency shows a level of trust which helps retain staff by making them feel valued and respected through an open dialogue when it comes to pay,” says Drewry. To begin a policy of transparency, it would be useful to let staff know where they are headed. “Give them a good sense of the salary they can expect in two and five years’ time, with variables such as personal and business performance, and you will remove a great deal of uncertainty.” 

Richard Smith,

head of employment law, Croner

45

Track the competition It’s vital to know who your competitors are and to identify the key players – after all, having effective and up-to-date business intelligence is critical. “Search job websites such as Monster, Indeed and Total Jobs as well as local recruitment agencies to see what the competition is offering. Find out what jobs they are currently recruiting for – this will give you an indication of how they are performing and if they are expanding,” says Leigh Freeman, senior HR consultant employers’ organisation, EEF. As an employer you are not the only one comparing salaries with competitors – your employees will be doing it too. If you don’t want to lose good employees it’s important to keep doing your homework. “Networking is another great way to meet employees from other organisations and to gather intelligence about the different offerings on the market,” Freeman adds.

Review your pay scheme Once you have an established pay scheme in place, it follows that you should regularly review it. According to Freeman, this allows you firstly to remain legally compliant. “Do you pay the national minimum wage? Employees have a right to challenge employers if they think they are experiencing pay discrimination, so you must also ask yourself: am I paying the same rate to men and women doing the same or comparable jobs?” Over time, employees’ job roles also tend to change and evolve, so you must ensure their pay is reflective of the job they are doing today and to what you would be advertising if recruiting for the role externally. “Aligning pay to reflect the skills required to do a job is key to managing a fair and compliant organisation therefore a job evaluation exercise will be necessary,” says Freeman. “A pay review also helps identify pay schemes that are no longer fit-for-purpose and where you can make possible savings and efficiencies and, if you are an organisation with a history of acquisitions or mergers, you may have inherited employees on different rates of pay who could be doing a comparable job.”

Money masterclass.indd 2

Nick Marks,

director, Happiness Works

Thomas Drewry, co-founder, Emolument.com

Leigh Freeman,

senior HR consultant, EEF

27/02/2015 19:27


FINANCE

The resurgence in business lending CLIVE LEWIS

Funding is a major challenge for British SMEs but thankfully business lending appears to be back in business

ICAEW

46

ICAEW.indd 1

again, he believes the recent lending drought has permanently changed borrowing behaviour. This change has consequently posed a challenge to banks in his view, who will now have to regain market share from the alternative finance providers that have plugged that gap over the past six years. So what does this mean? 

For starters, banks need to be capitalising on an increasing appetite for funding and work with SMEs far more closely. Between 2011 and the first-half of 2014, the number of firms using only bank loans, bank overdrafts or credit cards fell from 29% to 20%. Incentives, improved service and attempts to shift perception will all play a significant role in delivering positive change around this. There is some good news though, according to the latest findings from Real Business’s FDs’ Satisfaction Survey – run in association with the ICAEW and part of the FDs’ Excellence Awards. The results highlighted that 52% of FDs and CFOs feel that their bank added real value, by giving a score of five on a scale of five to one. In addition, 30.4% awarded a four, with only 6% responding with a negative score. Furthermore, when asked about satisfaction levels around value for money in terms of fees paid, 31% responded by with a score of five, alongside 36% awarding a score of four. So whilst external threats will always have an impact, we are in a period of positive transition – providing this commitment and willingness continues to move forward.   The FDs’ Excellence Awards take place in London on May 14th.

businessadviceservice.com

T

he hangover from the credit crunch seems to finally be abating. With buoyancy in the UK economy remaining strong, despite external pressures across Europe, financial service organisations are starting to reap the benefits. As a result, the concept of business lending is beginning to gather positive momentum. Access to funding is regularly lauded as one of the biggest challenges facing British SMEs. However, with increasing economic confidence demonstrating that more opportunities are now emerging, businesses need to be capitalising on these routes. This is not only for their own benefit, but for the economy at large.  According to figures released last month by the EY ITEM Club, British businesses can expect to see a multi-billion pound cash injection over the next four years. This is in many respects a direct result of lending channels becoming more accessible and a flourishing appetite for corporate risk emerging. Whilst this shift should hopefully incentivise business growth and spending – providing we don’t end up with a bottleneck – it’s important that businesses don’t take it for granted.  Ultimately, it all comes down to confidence. Whilst it is always impossible to predict what lies on the horizon, with the amount of money borrowed expected to rise by almost 17% by 2018, the opportunity for business growth is great. To put that rise into context, it equates to an extra £66bn of funding during the period – a significant uplift over the past six years when the corporate borrowing pot fell by £181bn. So, despite reports that lending to UK businesses is expected to slow this year, these figures will and should continue to instil a greater level of confidence. Certainty after all is critical to successful business planning and prolonged periods of growth, which is essential to driving financial stability. According to Chris Price, UK head of financial services at EY, the biggest challenge now is how to turn this growth into profitable growth. Whilst he feels there is little doubt that traditional bank lending will find its feet

27/02/2015 19:28


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02/02/2015 27/01/2015 16:16 15:06


SALES & MARKETING

Selling

point Mobile point of sale is giving companies great and small a better way to sell on the go

A

50

Traditional point of sale solutions are bulky and expensive

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Ben Brown,

WORDS: JOSH RUSSELL

Shopwave

Selling point feat1.indd 1

t one time, it was easy to be taken aback when you walked into an Apple store to see members of staff manning tablets rather than tills. But the use of mobile point-of-sale (mPOS) devices – which allow staff to take payments on mobile devices – has rapidly shifted from being something of a novelty to being a serious phenomenon in its own right. Which poses the question: what has driven the rise in mPOS solutions? Certainly a major driving factor in the uptake of mPOS is the fact that the way consumers expect to pay has shifted significantly in the last few decades. “Consumers now expect to be able to pay for everyday goods and services with a credit or debit card,” says Philip McHugh, CEO of Barclaycard Business Solutions, the division responsible for its mPOS solution Barclaycard Anywhere. This may seem self-evident but still a significant number of small businesses miss out on a huge amount of trade by not accepting cards; Barclaycard’s research indicates that SMEs miss out on more than £7bn a year by not having the ability to take cards. “Start-ups and SMEs have needed to respond to this new landscape and update their payment systems in order to remain competitive,” he explains. Evidently then there is a clear case for small retailers taking card payments but whilst traditional point of sale solutions cater to this, there are several drawbacks. “They’re bulky and expensive,” says Ben Brown, CEO of Shopwave, the iPad POS solution. Traditional card machines tend not only to come at high cost – requiring the payment both of processing fees and line rental, which can be prohibitively expensive for a new retailer just finding its feet – but the technology itself tends to be immovable and inelegant. “You have retailers that are spending loads on aesthetics and they have to have a big black box on every counter,” Brown says. By contrast, mPOS, through its use of mobile devices and wifi or mobile connectivity, side steps these issues. And this means they can have a significant benefits for businesses that would like to take payments on the go. “Tradespeople are a really interesting market,” says James Frost, chief marketing officer of Worldpay, the payment processing company. A plumber will typically carry out work and then issue an invoice, leaving a hole

27/02/2015 19:29


FP AD PLACE.indd 1

27/02/2015 19:52


SALES & MARKETING

in their finances whilst they wait for payment; research his company conducted in January last year found that sole traders and microbusinesses were owed up to £2.5bn a year in late payments. “It really affects their cashflow,” he explains. “If you take a card payment the money’s in your bank account usually within three or four days.” But the increased flexibility of mPOS solutions also makes them perfect for innovative kinds of businesses, which – by their very nature – require an agile approach. “Flexibility is a major factor,” McHugh says. “Accepting payments on the go provides the freedom for SMEs to run their business from any location.” Non-traditional offerings like pop-ups and street-food outlets may not always know what the immediate future will hold. This means they can’t afford to be pinned down by heavy kit or inflexible fees and this makes mPOS the perfect solution. This increased agility can also help hugely with businesses that are looking to grow, providing a point-of-sale solution that will continue to meet their needs as they expand across multiple locations. “Businesses like popups are actually often owned by people with a lot of experience,” Brown says. “They’re testing a brand that they’re hoping to scale.” Whilst he says a new point of sale solution could require a growing business to make an outlay of almost £5,000, many mPOS solutions will allow businesses to have a more granular approach,

52

scaling up their package more organically in line with their revenues and requirements as they build. There’s much more to mPOS solutions than payments alone, however, and – as retailers build their offerings – being able to break away from a till can allow staff to be far more reactive to the requirements of customers. Frost gives the example of assisted shopping; as they’re using mobile devices plugged into the store’s stock system, they can better answer customer queries and process the resulting transactions. “Someone might come over and help you with a query,” he says. “And if they help you find what you want, they can take the payment there and then.” Staff being able to take payments in a more agile manner also can help with queue-busting during busy periods, enabling them to cut customer waiting times and maximise the number of sales made. “That can be really useful, particularly at peak times or during sale periods.” Given the fact mPOS solutions can also facilitate more interactive customer experiences in other ways. Whilst oldfashioned till systems tend to operate on a fairly closed data ecosystem, mPOS solutions like Shopwave can enable stores to build integrated consumer-facing apps with much more ease. “If it’s a food retailer and they want to build a menu app, they can pull the stock availability data off the point of sale device in real time,” explains Brown. This makes

£23

£23

Accepting payments on the go provides the freedom for SMEs to run from any location Philip McHugh,

Barclaycard Business Solutions

Selling point feat1.indd 2

27/02/2015 19:29


ClouAds is a digital advertising network designed to help small and medium businesses. Clouads FP March.indd 1

27/02/2015 19:53


SALES & MARKETING

£57

54

[mPOS solutions will] ultimately help bridge the gap between the online and offline worlds Philip McHugh,

Barclaycard Business Solutions

Case in point Chillilicious

When it’s not easy for customers to get their hands on cash, a business needs a ready alternative. Given Chillilicious, the chilli farm based in rural Fife, spends a lot of time selling its produce at events that tend to be right out in the countryside, making sure it can take card payment on the go has been absolutely vital. “There are no cash machines; there’s not even one you can pop along to,” says Stacey Galfskiy, the business’s co-owner. “As soon as the customer’s spent all their money, if you don’t

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take card then you’ve lost that sale.” The chilli grower realised that it had to find a solution that allowed it to process payments wherever it went but more traditional solutions just weren’t suitable. “We looked at the big handheld machines and we decided they were just too expensive,” Galfskiy says. She enrolled the business in some beta trials; after coming across Worldpay Zinc, she found it gave them the mobility they needed without inflexible costs. “We wouldn’t have made any money off the card machine if we taken on the standard ones with the monthly charges,” she says. “But having the mobile solution is worthwhile because it’s just a percentage charge; you’re not

creating more engaging consumer experiences a breeze. And this is one of the real strengths of mPOS solutions. Whilst omni-channel is the retail buzzword du jour, there’s no denying that seamlessly integrating the online and offline worlds is becoming increasingly important. “[mPOS solutions will] ultimately help bridge the gap between the online and offline worlds and provide retailers with a single, end-to-end customer view,” says McHugh.  When members of staff are equipped with devices that are plugged into a retailer’s data ecosystem, it becomes much easier to create a genuine exchange between the online and offline worlds. “An example is if the item that the customer wants isn’t in stock,” Frost says. “Staff can also use that same mPOS device to help the customer order it from the online shop.” This allows online and offline retail, which are often viewed as being in competition, to be much more complementary, providing the consumer a better experience wherever they go. Evidently mPOS is offering significant benefit to retailers and because of this its uptake seems likely to soar from here on out. “Unless there’s a very good reason, I can’t see this trend not continuing,” says Brown. He points to forecasts from BI Intelligence, the Business Insider research service, that posit that by 2019 nearly 80% of US retailers will have implemented an mPOS solution, something that he feels is hardly surprising. “You’re getting rid of devices that are inflexible and very basic for a multifunctional device that can do everything for one-fifth of the cost,” he concludes. “It really is a no-brainer.”

finding that you’re out of pocket after the charge comes off.” Since then Chillilicious has found its mPOS solution helps it up its game across the board. Not only has it given it the extra edge at events but it’s even given it a helping hand on its home turf. “We’re at the stage where we want to localise a little bit more, so we’re opening a tourist area on the farm,” Galfskiy explains. The remoteness of the farm and the lack of accessibility of cash would have previously made this an impossibility but now it is able to sell its produce easily, no matter where it’s based. “The fact that we can actually take payments wherever we are is great,” she says.

27/02/2015 19:29


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27/02/2015 20:03


SALES & MARKETING

Happy customers

make happy businesses Customers are fickle. If you don’t provide a seamless, intuitive customer journey, chances are that your competitor will. Time to up your game?

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WORDS: JADE SAUNDERS

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n today’s world, shoppers have access to a plethora of shopping options at the click of a mouse. Therefore, it can be increasingly difficult for start-ups and small businesses to stand out above the din: how do you offer a product or a service that’s not already available and provide a customer experience that’s second to none? And all of this needs to be done on a budget. It’s not an easy ask. Something SMEs often forget is the value of tailoring the customer journey. This can help drive brand loyalty, says Damian Hanson, co-founder and CEO of One iota, a technology company. “We all have less loyalty because of the role that technology is playing in the market place. This means retailers have to be very focused on usability and the user experience to make sure that shopping with them is very seamless,” warns Hanson, who fears that untapped technology will lead to a loss of sales to market leaders. However, this does not mean the incumbent always has the upper hand, Hanson adds. “Smaller retailers have the ability to take on some of the largest retailers in the country. Especially for online only, as there are no limits with the technology to compete.” Navigation is the most obvious place to start: customers are looking for a clear path through the website, from the landing page to the moment they find what they’re looking for and then on to checkout. When it comes to paying for products, speed is of the essence: options like one- or two-click purchasing for returning customers, or guest checkout for new ones, are the most convenient for users. Ultimately, the rule is that less is more. What’s the shortest amount of time necessary to convert a sale? The customer journey does not end with the completed sale; it extends to the collection or delivery of goods purchased and any problems that the consumer may face being solved by interacting with the customer. “Being able to give customers choice and give them the services that they desire, being able to see inventory and being able to do click and collect service and the ability to return in store. Those are all steps that are

27/02/2015 19:31


part of the user journey: the connection between purchase, going through the website and then making the purchase, having the goods delivered at a place of choice or where the customer picks them up and being able to return the order,” says Jonh Pincott, MD Europe at Shopatron. Businesses of all kinds can extend their traditional customer journey to deliver the best customer service possible to customers after that final transaction is complete; traditional bricks and mortar retailers can offer a click and collect service whilst online businesses can offer an efficient delivery service of both physical goods and online products or services. A large element of the customer journey is through their interaction with a business, which as we all know, doesn’t end the moment you enter your bank details. Despite the constant evolution of technology, the telephone

continues to be a trusty communication tool between businesses and consumers. Recent research by Tollring studied the impact of missed calls from consumers on a FTSE 100 company with 900 branches. Over the course of a year, 2 million calls went unanswered, which lead to a potential loss of revenue estimated as more than £80m, based on the average sales order Tony Martino, Tollring value. But it’s not just potential sales that are at stake: a missed call is also a missed opportunity to give customers a positive experience of your brand. What’s more, call data can offer a wealth of information

You need to offer a really good customer experience otherwise you won’t survive in this world

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SALES & MARKETING

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that can help companies optimise the customer experience. Most businesses, including SMEs, will have CRM systems and call recording systems. It might be worth considering acquiring a tool that can help analyse the data behind those all-important customer calls; a computer program could monitor the calls coming in, analysing who has called and how many times. This data can then help businesses get a more accurate picture of the service they’re providing to customers – and identify where any gaps might be. There’s no room for complacency, explains Tony Martino, MD of Tollring. “Businesses need to understand that customers are really fickle these days. You need to offer a really good customer experience otherwise you won’t survive in this world.” The increasing pace at which customers want to make purchases has been good news for One iota, which has built a business on creating solutions for retailers to serve customers quickly and efficiently. Its technology involves a built-in scanner on the rear and, as it’s portable, can a check a customer out wherever they are in the store. Not only does this help banish long queues at till points, but it also bolsters customer satisfaction. Linked to this, many forward-thinking retailers offer e-recipets these days. In Apple stores, for example, customers can have the particulars of the sale emailed to them, in addition to an optional paper receipt handed out in store. This can save customers from carrying unnecessary paper and is also eco-friendly. What’s not to like? Damian Hanson, One iota Ltd. And it’s not just retailers getting in on the act when it comes to innovations in customer experience. Restaurants are increasingly looking to technology to help provide seamless service to diners. It’s hard to imagine life without services like JustEat, which enables hungry customers to order from local takeaways online but, on the bricks-and-mortar side, one restaurant chain in particular is leading the way. Hummus Bros saw customers’ frustration in waiting in lengthy queues during the lunchtime and dinnertime rush. Its Mediterranean menu often needs explaining to customers and this leaves regulars waiting in line. “We’ve got some customers in particular and they know that the queue starts to build at 12:10 so they set out to make sure that they are there before then. But sometimes a meeting over-runs and they know they can’t come because by the time they walk here, plus the queue, plus the walk back to the office, it’s too long,” says co-founder Christian Mousyet. So Hummus Bros decided to do something about it. In order to cater to customers in a more personal way, Mousyet and his team launched a mobile app which enables customers to pre-order, cutting waiting times. “Customers really love it. Now they can come at any time and skip the queue. It makes a huge difference because they know that the most they’ll wait is five minutes,” says Mousyet. Customers can also pay via the app which means if they

Optimising the customer journey ultimately makes the customers happy, makes them spend more freely and drives more core sales

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forget their wallet it’s no biggie. “More and more people walk around without cash. One thing they don’t forget is their phone, so at least they know that if they have forgetten their wallet they can place their order and still collect their food. This simplifies it for the customer and really reduces the varries for them to order from us,” adds Mousyet. The next step for Hummus Bros may be self-checkout. “Anything you can do to simplify that journey and make it agreeable for the customer is paramount and that is what we invest most of our time working on now.” As a start-up or SME, it may not always be possible to offer the latest and most innovative new technologies as they often come with a hefty price tag. But going back to the basics of customer service can help keep customers loyal. Make sure your website is easy to navigate and any interaction with your business offline is friendly yet professional. The result will be a happy customer – and happy customers mean a healthy bottom line.

27/02/2015 19:31


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Sales & Marketing

Tweet

dreams

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The face of sales is changing. No longer is social media just for marketing but with social selling you can actually generate leads and make sales

ight now, customers across the world want what you’re selling and traditional e-commerce will only get you so far. The demand is there so all you need to do is find a way to get in front of them and meet it. This has always been a challenge but fortunately, in our interconnected world, it is becoming easier. Social media has long been touted as a great way of gaining attention or directing people to your website but outside of the marketing department, its usefulness was limited. Now, thanks to the advent of social selling – or social commerce – businesses can use social platforms to generate and nurture sales leads while building relationships with potential and existing customers. It works by providing valuable content to consumers in a non-invasive way. With a plethora of media platforms available, consumers have access to more information than ever before and will likely know what they want to buy and from whom even before visiting a company website. Sure, all selling is social; it always has been and it always will be. But the social aspect of sales is clearly changing. According to research by Forbes, 78% of customers say that posts made by companies on social media influence their purchases and Marketing Land found that 91% of people have gone into a store because of an online experience. Social platforms like Facebook and Twitter have allowed brands to effectively market to a wider audience and helps to guide consumer product decisions and purchases. Its usefulness needn’t stop there. Social platforms and techniques can be mapped to every step of a typical buying process, even

27/02/2015 19:32


Sales & Marketing

business and Facebook for friends and family. though some still don’t realise it. “There is an However, when it comes to social commerce, army of ‘social media gurus’ who insist you the medium is much less important than the can’t sell on social media because people are sharing itself,” says Lask. there only to ‘hang out with their friends at a Therefore, when a buyer is incentivised to party’ and people at parties are not receptive share a deal, he or she should be able to share to marketing or sales,” says Gideon Lask, CEO across all networks. Gavin Hammar, CEO of social commerce experts, Buyapowa. “The and founder of Sendible, a tool you can use to first step to implementing social commerce monitor conversations on social media, has is to debunk this fallacy. Selling at parties some pointers. “With Facebook you need to made a nice business for Tupperware and Ann use the ad platform to drive traffic to a highly Summers and provided you ‘bake’ social into your e-commerce from the outset – rather than targeted landing page, whereas on Twitter you need to listen and join conversations that as a bolt on – you can sell to new and existing are relevant to your company.” He advises customers.” Very simply, your customers are now spending more time online and 80% of that time is being social so you want to be there with them says Lask. “As they say, ‘if you want to catch fish, fish where the fish are’.” It is important to emphasise that simply bolting a catalogue and a store onto a social network is not social Marc Schillaci, Actinic commerce. “That is why Facebook Commerce – or F-commerce – failed: because it did not make the actual that you build relationships by following your sales process social. Social selling means prospects and providing them with advice, making an offer to a potential customer who before offering your product or services. “With is incentivised to buy and then share the deal LinkedIn, with its niche groups, you can build with friends and family,” says Lask. “Sharing trust with extremely targeted groups.” is incentivised in that the person sharing will typically get some reward based on the number Pinterest is a very visual platform and is great for driving traffic to e-commerce websites. And of people who also buy as a result of his or her while Google+ isn’t currently proving to be efforts.” a great place for sales, Hammar believes it is Of course, each social network is different still should good to share content there for the in terms of the demographics of members and boost in the SEO. the content they share, whether in terms of For Marc Schillaci, CEO and founder of text length or media type. “People’s mentality Actinic, the e-commerce solution, businesses is often different on different networks, can have more engaging conversations through as the same person may use LinkedIn for

social selling. “Businesses tend to share more relevant posts and are able to directly see the reaction on social media, whereas direct marketing and one-to-one meetings are not only more time consuming but also create a very limited viewership,” he says. “Social media allows companies to go wider and even reach more customers that were never initially targeted.” For example, when a customer shares a Facebook story on their timeline, it allows all of his or her friends to see the post. “This would allow organic growth via word-of-mouth and achieve greater results in comparison to targeted mail, calls and face-toface meetings.” Keeping customers happy has always been one of the hardest parts in business. “Social selling allows a company to have a better understanding of their customer base, as they will be interacting and reading what customers honestly think about their products or services,” says Schilaci. “This in-turn allows a company to see what’s going on and react accordingly. If a company takes these initial steps, they will be able to better retain customers, due to them having the knowledge of what they like and dislike via social platforms.” If you are in any doubt as to the inevitability of social selling playing a large part in the future of sales, then just follow the money: last month the social selling app, Shopa, secured $11m in funding from Notion Capital and Octopus Investments to scale internationally. This was one of the largest ever Series A investments into a UK start-up. Now is definitely the time to take a serious look at social selling.

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Social media allows companies to go wider

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27/02/2015 19:32


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27/02/2015 20:09


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02/02/2015 16:29


people

a bumpy ride

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A third of managers would prefer to employ a man in his 20s or 30s than a woman of the same age for the fear of them taking maternity leave

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WORDS: Jade saunders

Discrimination continues to hinder the careers of expectant and recent mothers. Small businesses must make sure all employees are treated fairly – or risk missing out on the bountiful talents of working mothers

t can be a daunting experience for new mothers returning to work; their life has been changed by the arrival of their babies and, after a break from the professional world, it can take some time to readjust to the working environment whilst juggling family life. This struggle can then only be exacerbated by any discrimination that a woman might face during and after pregnancy. Horror stories posted on Mumsnet and Helping Working Mums, the online forum run by law firm Slater & Gordon, show that even in this day and age pregnancy discrimination is still prevalent in society. “Discrimination is often more subtle, which can be more difficult for an employee to prove. Discrimination claims often include allegations of less obvious discrimination,” warns Anne-Marie Balfour, senior associate at Charles Russell Speechlys LLP. Some women online have expressed their concerns at being overlooked for promotions and additional training, some have been disciplined for feeling ill at work and others feel that whilst their boss has been supportive, other colleagues have been discriminatory. In August 2014, Slater & Gordon conducted a study to expose the extent of the discrimination women were facing upon returning to work. The survey found that out of 500 managers surveyed, a third would prefer to employ a man in his 20s or 30s than a woman of the same age for the fear of them taking maternity leave. Results showed that one in four mums returning to work felt that they had been discriminated against upon announcing their pregnancy or giving birth, whilst a fifth admitted to feeling less valued when returning to the workplace as a mum. These findings suggest that a new approach and better understanding is needed to support mothers and fathers in balancing work and family life. Employing women of child-bearing age certainly hasn’t hindered the growth of Bec Howard’s business, Cynergy, a digital agency that was recently acquired by Deloitte. “I run a business which is two-thirds full of women who could potentially have a child at any time and this hasn’t

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One in four mums returning to work felt that they had been discriminated against upon announcing their pregnancy

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stopped us becoming a multi-million pound company. Committed, valued staff work hard and with dedication whether they are at a child-bearing age or not,” says Howard. She adds: “Having children is a deeply enriching experience that builds character and resilience. There is nothing more rewarding than supporting a woman in business through her child-rearing age. You build a loyal, supportive team member that would go the extra mile.” Howard believes that good communication between an employer and employees on their plans to start a family are key to create a supportive and flexible workplace. Employer support throughout pregnancy, as well as bereavement or illness, will promote loyalty amongst staff, which means they stay committed to their employers and more often than not, work harder. “Women can be very productive after having children because they know they have tight deadlines. They have to pick the children up at 5 or 6 o’clock from nursery so they have to get the job done within a certain time frame,” says Alice Weightman, MD and founder of Hanson Search and The Work Crowd. Weightman is also a firm believer that good communication between employers and employees is the answer to tackling pregnancy discrimination. Having these honest early conversations before pregnancy or at the time of a pregnancy announcement can help to devise a plan for maternity leave arrangements and what contract the employee will return to post maternity. “As a business we try to keep our business goals and personal goals intertwined. We want an environment where people can talk about that; it is embraced and encouraged. We offer a maternity package; we try to keep people engaged whilst they are on maternity, just to help them feel part of that because the longer you are away from the business, the harder it is to get back,” says Weightman, a working mum, about the practices in her own businesses.  Employers can further encourage women to return to work by offering maternity packages or incentives for earlier re-entry, as the full maternity leave can be costly and demanding

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for smaller businesses. Balfour feels that employers should consider their maternity policies. “For some, the statutory scheme is adequate. For others, enhanced maternity arrangements will be necessary in order to keep pace with competitors and attract and retain talent.” Statutory maternity pay is low and – with some childcare costs amounting to as much as £1,000 a month – a healthy maternity package could be the deciding factor for a woman who is planning to have children.  The government and the labour force are stepping up to encourage more women into board positions, however, Weightman feels more needs to be done to encourage and support women returning to work after pregnancy. Employers need to focus on talented women and be as supportive and flexible as they can be to encourage a strong business ethos with loyal and valued staff. The government themselves have been called upon to lower childcare costs as the UK has some of the highest rates in Europe. Women who freelance or are self-employed are also discriminated against by the government in their amount of keeping-in-touch days available and the rate of statuary maternity pay compared to employed mothers. Being employed by a company that is sensitive and adaptable to parents’ needs is an attractive trait to working mothers. Often, small businesses can’t afford to pay the salaries offered by big companies so this is one area where its possible to really differentiate yourself from the competition. This will help ensure that you attract the brightest and the best. 

27/02/2015 20:07


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27/02/2015 19:36


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C 68

Approach with care Approach with care.indd 1

WORDS: Ryan McChrystal

Serious illness - particularly cancer - can have a devastating impact on your employees and your business, therefore it is essential to have a plan in place that ensures the best way forward for all concerned

ancer isn’t an easy thing to discuss but with around 750,000 people of working age with some form of it in the UK – representing over a third of the 2 million people living with the condition – it is wise to think about your approach now before you, as an employer, have to deal with it. With people living longer and retiring later, the numbers of people in the workplace diagnosed are only going to increase. Cancer is just one – and certainly the most emotive – example of the serious illnesses that could impact on your employees, their attendance and productivity. “The pressures put on an employee with cancer have a direct effect on their ability to manage or even recover,” says Elliott Hurst, director of health consulting at AXA PPP Healthcare, one of the biggest UK health insurance providers. The physical and emotional strain of a serious illness can be severe and, when you combine that with the potentially damaging financial impact, the result can be devastating. But that’s not to say a diagnosis automatically leads on to periods of absence. “From an employer’s perspective, it is better to have your experienced and valued employees contributing to the workplace in some way, shape or form than not and with proper planning this can be achieved,” says Hurst. Therefore, an effective workplace policy should be in place to ensure you are best equipped to deal with cancer and other serious illnesses. As with all good policies, it is best to begin by amassing all the relevant information that’s available, including a full understanding of the law. As an employer, you are legally obliged to make workplace adjustments where appropriate, just as you would with any other disability. Access to Work is a specialist disability service delivered by Jobcentre Plus, which gives practical advice and support that may be able to help with the cost of making workplace adjustments. “It is good to have a better understanding of the illness your employee is suffering

27/02/2015 19:33


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from. Cancer, for example, is not a single disease with a single cause and a single type of treatment,” says Hurst. “Each cancer experience is different, but having a little knowledge can help you as an employer to better understand what the person is going through and how best to support them.” A government white paper in 2011 suggested that employers need to do more about the health of their employees. Dr Gordon Wishart, a cancer surgeon and medical officer at HealthScreen UK has seen a major rise of employers offering cancer screening as part of their benefits packages. “Companies are engaging with us to explore early cancer detection for their employees, which in many ways is adding to the already existing employee benefits that are available through employers and in some cases that’s been completely sponsored by the company,” he says. With most cancers, if you pick it up early it requires less treatment, which is a better outcome for employees and for the employers. “It means less time off work, and getting that employee back to their desk as soon as possible and back to being an efficient, productive member of the team,” says Dr Wishart. A screening by HealthScreen UK only costs around £100 and if it is paid for through a salary sacrifice, it becomes more tax efficient and an employee will only pay around £50-60, or about £5 per month. Often a small business won’t think about the issue of cancer until it is raised by an employee, which can take managers and HR by surprise. Therefore they are often nervous and uncertain about what to say. Good quality conversations between employee and employer are essential to understand their requirements and plan for the best possible support. “It is important for employers and managers have some kind of training or insight that allows them to understand how much a serious illness like cancer can really turn somebody’s life upside down,” says Dr Jill Miller, a research advisor at CIPD. “Have an awareness of the emotional and financial strain it puts on people and that how you respond and support employees has a huge impact on both their morale and on the rest of the workforce as they will see the organisation is a good place to work.” There are a few things to bear in mind when having these conversations. “It is best for the manager, the employee and HR to get the expectations out at the beginning,” says Dr

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It is good to have a better understanding of the illness your employee is suffering from Elliott Hurst, director of health consulting, AXA PPP Healthcare

Miller. “It is important to talk about who the employee wants to know among the business and how they want other people to react. Do they want people to talk about it, or do they want them to act normal and talk to them as they always have done?” Needs will differ from employee to employee and from cancer to cancer. Different cancers will have different paths and treatments will have different demands on people, so constant conversations with employees to get updates on their progress is essential to know what’s going on. “It’s important to think about what support and flexibility you can offer to help people stay in work,” advises Dr Miller. Employers also need to understand that recovery is a process and that it takes time. Legally, they have a duty to make reasonable adjustments to support a return to work, which will depend on the circumstances, including practicality, cost and the extent to which an

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Discrimination Act 1995 provide protection from discrimination. Everyone with cancer is classed as disabled from the point of diagnosis for the rest of their life, and their employer or a prospective employer must not treat them less favourably for any reason relating to their cancer. All areas of employment are covered including recruitment, promotion, training, pay and benefits. Coming back to work can be very difficult for a patient. A recent study by Macmillan, the cancer charity, showed that 57% of survivors who were in work when diagnosed had to give up their job or change roles due to their illness. This means the total loss in productivity of survivors unable to return to paid work in England was estimated, in 2008, to be as high as £5.3bn. You must be prepared for such a possibility because small businesses often rely on teams that, while few in number, are high in skills and experience, so the impact can be particularly devastating. If an employee comes back to work, which is often the case, there are a number of steps that can be taking to make things easier. This includes implementing a standard, phased return to work plan. You should also provide regular catch-ups to check all is working well. More than anything, a clear policy is key to coping with cancer in the workplace. But it’s important to remember that with the devastating effects of serious illness on employees, there are no quick fixes.

It is also important to think about employees caring for those with serious illnesses Dr Jill Miller, research advisor, CIPD

adjustment will be effective in alleviating any disability. Adjustments might include offering lighter duties or allowing extra breaks. These days, many people are cured of cancer or are able to live with it for many years. Some people may have short or long-term side effects from the illness or its treatment. Therefore, they may continue to need support after their treatment ends. “Many people tell us that that work can help to restore a sense of ‘normality’ after a cancer diagnosis. Try to find out a little about the type of cancer your employee or the person they are caring for has and what the effects of treatment are likely to be,” recommends Hurst. Work contributes to financial independence, provides a sense of purpose, creates structure in our lives and is a lifeline back to normality, wellbeing and recovery for those suffering. For Dr Miller, it is essential to make the transition back to work as easy as possible. “It is also important to think about employees caring for those with serious illnesses and how to respond to employees who are supporting a family member or close friend who has had a cancer diagnosis.” There is comprehensive legislation in place to support a successful return to work. Together, the Equality Act 2010 and the Disability

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27/02/2015 19:34


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27/02/2015 20:13


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POSITIVE STEPS 74

Deciding to change

Restructuring can be trying but this doesn’t mean change can’t be positive, says Lyndsey Simpson

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ne of my favourite quotes comes from Gordon Forward: “To stand still is to fall behind.” This is very true in our world where businesses should be a constantly evolving facet, growing and developing with the market and with you as its leader. However, by facilitating business change, inevitably you will have to make some tough decisions that affect, arguably, the most important part of your business – your people. Restructures are commonplace nowadays. However, if managed incorrectly your company can be not only left with a bad reputation but with serious legal implications. For this reason, this month I’m going to focus on how you can elicit positive change with positive outcomes.

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Employees are the foundations upon which companies are built. Certainly within my organisation, our team are brand ambassadors, representing us with every conversation. Therefore, change that is going to affect them and disrupt their pattern of performance should not be taken lightly. Redundancies are sometimes required if roles completely disappear within your structure but as a smaller, more agile company, sometimes it’s not the role that needs to go but the person within it. Maybe you have outgrown their skillset, or they have not been able to adapt to your growing business at the rate you need them to. In this instance, agreeing to part company – by way of a settlement agreement – is often a far better solution for all parties than a drawn-out redundancy and consultation process.

Mitigating your risks

Business restructures aren’t just difficult for employees but employers too. Whilst the impact that a restructure can have on an individual is often more obvious, the effect this has on a business is quickly forgotten. The exiting, or ‘adjusting’, of employees and their roles from a business can have serious legal implications if done incorrectly. If you are not strong on this topic, seek help. Many industry associations or business groups such as the Institute of Directors give free legal advice as part of their membership. Make sure you use these to run your specific circumstances past a professional who can make sure you are taking the right approach. Time spent planning any restructure or change that impacts people will always pay back ten-fold.

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people

Don’t burn bridges

There is never a reason to burn bridges with people. Even if you think someone is in the wrong and you are dismissing them, your role as their employer is to be fair, consistent and transparent in the reasons for your decision. More often though, you lose people that are just not right for what your business needs right now. In this case, you need to consider that at some point in the future, you may want to bring them back. Equally, if you are in the B2C sector, your employees can also be your customers so you need to ensure they remain brand ambassadors. Lastly, reputation used to be considered a local issue but now, in the age of social media and Glassdoor – where anyone can post an anonymous review about what you’re really like to work for – everybody must be taken into consideration. Honesty really is the best policy when making people changes. If an individual understands why the change has come about, they will be much more open minded to re-joining your business should you be fortunate enough to be able to bring them back.

So, what happens next?

You’ve made the decision to let someone go. Now what? If you are mid-to-large sized company, you will probably offer them outplacement support. This is where an external provider usually comes in for a period of time to help exiting employees to transition. Outplacement support varies wildly on the circumstances and level of the person undergoing support, but will typically include coaching support, online tools to help them re-write CVs, manage applications and search for jobs. They often include psychometric and self-assessment tools which, when used in conjunction with the coaching, can really help an individual understand their strengths and where their focus should be. However, it is not always about finding another job, so a good outplacement provider will also help individuals who are thinking about starting up their own business, retiring early, emigrating or becoming a self-employed consultant. Of course, this comes at a cost. What you need to consider is if these costs are outweighed by the positives - such as the reduced legal liability - increased employee welfare and engagement will allow you to focus back on your business priorities. Moreover, employees that receive outplacement support will often find the process much easier to handle and won’t be left with a bitter taste in their mouth when thinking of their employer. You never know when you might meet these individuals again, so maintaining good relationships with them is in the best interests of all involved. If you are not in a position to invest in external outplacement support, think of what you can do internally to recreate some of these support activities for people leaving your business. This could entail allowing them to not work their notice period but still letting them have access to use your offices to complete their job searches whilst in the gardening leave period is a great support. Or perhaps seek out the person within your business with the best coaching skills, see if they would be interested in providing some one-to-one coaching for leavers and then offer this to outgoing employees. Restructures will undoubtedly be a stressful time but this does not mean they have to be negative as well. Any change is exciting, even the kind that results in difficult decisions. Change means you’re adapting to your environment and positive change will elicit positive outcomes.

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Time spent planning any restructure will always pay back ten-fold

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TECHNOLOGY

We all love a good news story in the world of tech and this is a humdinger. Raspberry Pi, the micro-computer and all-round good egg, has become the UK’s best-selling computer, having now shipped more than 5 million units. As one of the first pieces of tech we ever profiled way back in the first ever Hot list, we’re sure glad the dinky little chap has gone the distance. Looking for more instantly classic tech? Look no further

YotaPhone 2 Carrying around both an e-reader and a phone is a faff and yet reading books on your mobile is a hell of a drain on battery life. The original YotaPhone addressed this by introducing an e-ink screen on its reverse; a neat idea that was perhaps let down by the execution. The YotaPhone 2 has improved on this offering considerably; design-wise it has upped its game considerably, replacing its predecessor’s boxy grey frame with a sleek, rounded black and, as well as reading books, users can receive notifications and information on its e-ink display.

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WORDS: JOSH RUSSELL

Embrace

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As we highlighted only last month, wearables get most exciting when they’re solving real world problems. Embrace is case in point. It does all the things one would expect – telling the time, tracking activity, monitoring sleep – and presents this in a way that runs deeper than wearables, usually geeky aesthetic; the square polished metal face and snap-bracelet-style strap are particularly nice touches. But its real strength is its ability to measure seizures in epilepsy sufferers, providing family members with either an alert on their mobile or haptic feedback to a linked Embrace, allowing them to provide immediate assistance.

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TECHNOLOGY

HoloLens The totally immersive VR device Occulus Rift has attracted its fair share of imitators. But in creating HoloLens, Microsoft has decided to go in a decidedly different direction. The augmented reality goggles overlay graphics onto the real world, allowing users to interact with digital objects in three-dimensional space and break away from their screens. It seems to have almost limitless potential; whether you’re exploring digital content as real objects or playing augmented reality Minecraft, it’s very easy to get excited about its applications. Whilst Microsoft hasn’t had the best track record for innovations, HoloLens could be a real turning point.

Luna In combining our two favourite things – sleep and tech – the creators of the smartbed Luna have created an internet of things device we wouldn’t trade for all the smart thermostats and smoke detectors in the world. Luna warms your bed for you – allowing both you and your partner to independently set your preferred temperatures – tracks your sleep, comes with a smart alarm to wake you at the optimum point in your sleep cycle and will learn your patterns to better provide you with restful sleep. Truly a fatigued tech-fetishist’s dream.

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The Brand Deck Sometimes the best kind of tech is low tech. Given most start-ups spend a long time delineating the values and factors that define their brands, the Brand Deck presents a rapid-fire way of exploring what makes your brand what it is. It provides teams with a series of contrasting labels from experimental or traditional to simple or complex to place under headings of ‘you are’, ‘you are not’ or ‘N/A’. The makers have also collaborated with Max Temkin, the co-creator of Cards Against Humanity, to create a NSFW edition for founders to chuckle over when relaxing with a beer.

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TECHNOLOGY

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A recent delegation of UK cleantech companies visited San Francisco with the hope of luring investors to take a stake in their technologies – which are tackling some of the world’s biggest problems

WORDS: Hannah Prevett

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n downtown San Francisco, a room steadily begins to fill with investors. From VC firms, wealthy individuals and business angels to institutional investors, it’s a who’s who of the investment community in California’s thriving cleantech sector. Meanwhile, a nervous-looking gaggle of British entrepreneurs pace the floors, gripping coffee cups and preparation notes. The investors have gathered to hear the pitches of 15 of the UK’s most promising cleantech companies brought to San Francisco by the Clean & Cool Mission for a week of presentation perfection, investor meetings and media interviews. The pitch to investors is the culmination of weeks of preparation and an intensive few days of practice pitches. The dress rehearsals were all worth it, it seems. Alexander von Welczeck, managing partner at Clean Power Capital, a VC and advisory firm, says the standard of companies on the Mission was very high. “We’ve been involved in a lot of business development and trade missions for cleantech companies. Comparably, this is a very good one – in terms of both quality and quantity.” He’s right about one thing: the mix of companies on the San Francisco trip was

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Cleaning Up staggering. From agri-tech to building efficiency software, renewables to biofuels, the diversity on offer is assuredly enough to get any investor salivating. But just what is it that’s whetting the appetites of investors across the pond? Von Welczeck says agritech is an area that is ripe for investment. “It’s really technologies that are enabling and making agriculture more efficient, with smaller footprints, less water, less energy and better crop yields. There are a lot of very interesting technologies there,” he explains. Just as well then that Clean & Cool, which is supported by UKTI, had invited three agritech companies to come and tout their wares in the Valley. The first, Azotic, has developed a seed-coating solution that cuts the amount of nitrogen farmers need to use on crops. This drastically cuts costs as well as some of the associated environmental problems, such as contamination to local water supplies caused by run-off from fields. The second, ADFerTech, transforms liquid waste into solid fertiliser and NGB turns biodegradable feedstock into biogas for energy production – thereby reducing harmful greenhouse gas emissions from agriculture. Peter Blezard, CEO of Azotic, says the

It’s really technologies that are enabling and making agriculture more efficient Alexander von Welczeck, Clean Power Capital

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TECHNOLOGY

biggest challenge is not attracting investors’ attention – he’s not interested in VC money – but developing partnerships with the big nitrogen producers. “They obviously have a vested interest in keeping their factories open. But building more factories is not an option. We don’t want more nitrogen factories when there’s a way to obviate it. Nature can sort this out so we just need to give nature a helping hand – but the vested interests keep putting nitrogen onto crops.” For those who are currently wishing to court investors, it’s clear that the West Coast is where they predict the money will come from. Tim Kruger, founder of Chess, which is developing technology that generates electricity by using a process that removes carbon dioxide from the atmosphere, says there isn’t the same appetite for ambitious cleantech projects amongst European investors. “There is a VC community in Europe but they can make good money just investing in projects that have already proven and are bringing in revenues. This is fine for little, incremental innovation but if you want to make a big difference then you have to do something disruptive and that means there often isn’t the market right there when you start,” he explains. “Therefore it’s higher risk but it’s also higher potential upside as well.” But entrepreneurs from the UK are facing stiff competition in the Valley from other nationalities, warns von Welczeck. “It’s fair to say the centre point for accessing growth capital for high-growth, high-tech cleantech companies in the San Francisco Bay area. As a result of that, we see the whole world trying to come here. There are delegations constantly

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coming from India, China, Germany, Scandinavia, Israel and Spain – as well as the UK. Everybody is trying to gain access to the capital which is essentially readily available here,” he says. Dr Mike Pitts, lead specialist on sustainability at Innovate UK, who accompanied the Mission to San Francisco, says US investors are increasingly likely to look across the Pond. “We’ve heard people say they’re much more open to UK businesses than they have been. Cleantech is still an area that people think is really important.” Besides, the big wins for the mission companies weren’t necessarily measurable in pounds and pence, he continues. “There are some companies here that are too early for investment and they’ve come out to learn what it takes to be in that position, which is one of the aims of the Mission for us – to help people get investment earlier than they would have done. There are also some quite latestage companies, which have already got some investment and are planning their next ones. And then there are some guys who are looking for that investment right now,” says Pitts. “It’s just a case of finding the right investor.” Green Fuels Research (GFR) is one of the

Mission companies that is looking for money in the near-term. After establishing Green Fuels, which sells bio-diesel processors, 12 years ago in his dad’s garage, James Hygate started his new company, GFR, in 2013, with the aim of making sustainable biojet fuel a commercial reality. Biojet fuel is a hot topic at the moment: there’s an international target that says 6% of aviation fuel must be biofuels by 2020. GFR’s aim is to sell its equipment to existing biofuels plants so they can upscale to produce jet fuel. They will also receive an ongoing royalty. But all of this is dependent on Hygate and cofounder Paul Hilditch, securing some serious investment. “If we want to roll out 50 plants in two years, which is what’s needed to meet the targets, we need $40m (£26m). Investors will get really quick returns but figuring out how to go about raising that money is difficult,” explains Hygate. Over the course of the week, a topic that crops up regularly is the location of founders: will UK entrepreneurs need to consider moving Stateside if they are successful in securing funding? Hamish Corner, partner at Pennington Manches, a law firm that recently opened its first office in the Bay area, thinks so. “If an investor likes what they see, they might say, ‘we need to see you out here,’ ‘we need you to open an office here,’ or, ‘you need to have people out here’. The personal dimension is so important; quite often investors will say they invest in people and technology, in that order. Companies need to be open to making that commitment.”

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Building Trust

Given the huge possibilities represented by the big data movement, Matt Stroud, head of the personal data and trust programme, Digital Catapult, explains how we can realise the potential of personal data transparency

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e’re on the cusp of a seismic shift in the connectivity revolution. In the last two decades, globally, we have laid the foundation for this, building the infrastructure to enable both wireless and high-performance connectivity in the workplace as well as in our personal lives. The results of this have been astounding, creating a highly-digitised generation for whom digital is the de facto option and digital services seamlessly integrate into everyday life. In fact, there are now more mobile phones than toothbrushes in the world. This digital boom, alongside the growth of internet of things (IoT), has created a new crucial resource for economic growth: data. We are now entering the second wave of the digital revolution as we start to strategically utilise the data we have created. To put this into perspective, 90% of all shared data has been created in the last three years. We live in a world where data points are everywhere, where data is liquid, machine-readable, widely acceptable, shared and distributed and its growth is on the upwards trajectory. The information collected from your vehicle, for example, equates to just 4MB a month now; in five years’ time it will be an incredible 5GB. There is huge potential for this flood of diverse data to drive waves of innovation. For example, if we combine data from health and exercise, we can add a new level of accuracy to medical records, therefore streamlining healthcare. McKinsey recently stated that the use of big data could account for $300bn to $450bn in reduced health care spending or 12% - 17% of the $2.6tn baseline in US healthcare costs. This combination of big data and personal data is innovation rocket fuel and the same model of shared data can be transferred to other sectors – from education to media. In short, the opportunity is endless. However, we have a looming problem – a glass ceiling on realising the innovation potential that personal data can bring. Thanks in part to the high-profile hacks we have witnessed over the last few years, citizens and contributors are increasingly distrusting of the way their personal data is being reused and how secure it is. To make this worse, as a nation, we lack guidelines on good practice when it comes to the security and reuse of consumer data, making it difficult for organisations to actually prove their credibility to their consumers. If we are to move past this, we must first address the issue of cyber-hacking; allowing consumers and contributors to feel confident

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TECHNOLOGY

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To achieve data trust, organisations need a completely new set of innovative architecture tools and business models

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that their information will not fall into the wrong hands. With an increasing number of connected devices available, concerns around data sharing have grown exponentially. In order to solve this, each individual involved in the digital space must take responsibility and become an expert. And this isn’t limited to those in digital sectors; it is a problem for everyone utilising digital in their businesses, no matter the sector. In order to build trust with their customers, organisations must invest in developing products and services that have transparency, consent, minimisation, simplicity and data integrity at their core. In future these will not be add-on features but differentiators affecting customer choice; organisations that fail to adopt this now risk being left behind. To achieve data trust, organisations need a completely new set of innovative architecture tools and business models. While this is not something we can do overnight, the UK must start to take a global leadership position on this, both in the public and private sector, or risk being left behind as other countries scale up to meet consumer demands. The way in which we can achieve this is by having voluntary codes and trust frameworks around the use and re-use of personal data. By putting these standards in place, organisations can help protect data, as well as setting standard benchmarks for both the public and private sector.

Personal data and trust is an area that the Digital Catapult is heavily involved in already. Much of the progress towards the trusted reuse of personal data will be iterative and taken in small steps using safe secure environments and citizen or consumer explicit consent. These projects can already be seen in services such as CitizenMe, which shows what data consumers are sharing and lets them control what is shared and what is private. Digi.Me also saves consumers social networks to their computer so they can have their content safe and in one place. At the Digital Catapult, we’ll be supporting a range of similar projects and services, ensuring the UK claims its position as a world class leader in the trusted reuse of personal data. Over the course of the next five years, initial use cases of sharing organisational and personal data will start to join up and create a sea change which will impact the whole nation. A whole new set of tools, architectures, business models and best practices will develop and be implemented throughout every sector in the UK. By ensuring that, as a nation, we implement these changes now, the benefits – economic and social will be immense. The UK is already considered a world leader in digital economy, in order to maintain this position; we have no choice but to drive data collaboration. Only by doing this can we break the glass ceiling and realise the power of data as a force for good.

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LEGAL

Regulation rip off

New regulations have been introduced to make it easier for SMEs to access the tender process for public sector contracts. A potential goldmine awaits

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ublic sector contacts have always been notoriously difficult for small businesses to access. Even if they're deemed legitimate applicants, the lengthy and costly nature of the process unfortunately rules most SMEs out. But things could be about to change. On February 26, new rules came into force requiring public bodies in England, Wales and Northern Ireland to change the way they procure goods and services. A key feature of the new rules is a reduced timeframe for procurement which will enable businesses to bid for contracts much quicker. This, teamed with the scrapping of the PreQualification Questionnaire (PQQ) stage for low value contracts, aims to lower the amount of obstacles in the way of SMEs winning contracts. The PQQ is a lengthy document that has previously seen candidates slave away ticking boxes and proving their worth. Buyers will also now be encouraged to split their contracts into Lots, which means large contracts could be split in order to make more contracts available to SMEs for procurement. “In practice, then, these reforms balance the need for a contracting authority to be able to assess a candidate’s past experience with satisfying the European Commission and Cabinet Office’s intentions to make procurement processes simpler, faster, less

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costly and more effective for SME," says Colin Murray, senior associate at DWF LLP. "For contracts below €134,000 (central government contract) or €207,000 (subcentral government contract), the process included in the regulations is simple and less onerous on SMEs,” adds Murray. He believes that the new regulations will ultimately make procuring contracts easier for SMEs as the new regulations have simplified legislation for SMEs to get their head around. “What may be lauded by SMEs is the fact that now ‘sub-threshold’ contracts have a prescribed procedure which has the potential to become uniform across all authorities. This may make it easier for SMEs to bid for contracts from a range of authorities because the conduct of procurements by differing authorities will be more uniform,” Murray says. He points out though that whilst the PQQ has been banned for lower thresholds, the contracting authorities are still permitted to ask any candidates to answer suitability assessment questions if these questions are relevant to the subject matter of the procurement. Murray argues that these assessment questions are just a watered down version of the traditional PQQ but are not so burdensome to answer. The new regulations make it ever so slightly easier for SMEs to bid

These reforms balance the need to assess a candidate’s past with satisfying the European Commission and Cabinet Office Colin Murray, DWF LLP

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LEGAL

for government contracts but there is a sting in the tail. There is an increasing number of regulations to be adhered to: the previous rules had 56 regulations, the new set will introduce 122 regulations that SMEs, procurers and services all need to comply with. It's no surprise then that not everyone is in agreement that the reforms to the PQQ will benefit SMEs. Tim

financial strength, appropriate insurance, quality management processes and a proven track record of completing similar contracts. The removal of the PQQ will mean that this information is given at the full tender evaluation rather than the initial stage, a move that Williams believes is more timeconsuming for both SMEs and regulators alike. Only time will tell how far the new

Williams, managing director of Millstream, which runs the procurement portals for Scotland and Wales, believes that the material change will come with a greater cost to the public bodies who evaluate the tenders submitted and assess their suitability. “Instead of completing a relatively short questionnaire to demonstrate their qualifications, a candidate for a public contract will have to provide exactly the same information as part of their tender, but will also have to complete a full tender proposal. A full tender proposal will often consume a very significant amount of time and resources,” says Williams. This has the added downside of giving false hope to businesses who get further down the line but are ultimately unsuccessfully as they would have failed had there been a PQQ to analyse their suitability. What's more, the complicated changes will take a long time for people to get their head around and Williams predicts that over time this will put companies off submitting tenders for public contracts. “While well intentioned, the removal of the pre-qualification questionnaire (PQQ) process will significantly and adversely affect the ability of small firms to win public sector contracts,” he predicts. He points out that all firms that are considered for a government contact will still be required to be qualified to carry out the work; they must have adequate

regulations to help SMEs. Over the last few years the Cabinet Office has implemented many regulations to try to make it easier for SMEs to win contracts. One such initiative was a new framework that was introduced to the Government Digital Services (GDS) to make it easier for small and medium enterprises to carry out work for the government and public sector. “Until 2012, pretty much 80% of [the government's] IT was done by five companies, the big names that people would know like IBM, Hewitt Packard, Fujitsu and the likes of them," says Chris Chant, former executive director of G-Cloud in the Cabinet Office. "This government wanted to change that and get more SMEs involved, I put together something called the G-Cloud framework, which in essence enables SMEs to deal directly with the government more easily than in the past. [Until that point,] frankly, it was impossible and the only SME involvement was only subcontracted through large multinational companies.” Chant made it possible for SMEs to tap into the wealth of GDS contracts independently rather than having to rely on being subcontracted by market leaders. G-Cloud went live in 2012 and its success speaks for itself: £500,000 worth of contracts have been awarded and half of that has been earned by SMEs.

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The removal of the PQQ process will affect the ability of small firms to win public sector contracts Tim Williams, Millstream

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• VIP Breakfast networking - 18 - 19 March, 8:30am - 9:30am • Access to submit questions to Headline Speakers • Photo opportunities with Headline speakers • Lunch - conference picnic bag • General admission ticket • Fast-track entrance to the Exhibition • Priority seating in the conference hall • Dedicated conference cloakroom area • Access to the VIP lounge with FREE Wi-Fi and refreshments • VIP drinks with Headline Speakers - 18 March, 5:30pm - 8pm • 12 month access to Elite Business Academy (launching April 2015) • 12 months complimentary printed copies of Elite Business Magazine

Executive Pass includes: • Access to submit questions to Headline Speakers • General admission ticket • Fast-track entrance to Exhibition • Lunch - conference picnic bag • Dedicated conference cloakroom area • 12 months complimentary printed copies of Elite Business Magazine • 3 months access to the Elite Business Academy (launching April 2015)

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27/02/2015 19:56


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27/02/2015 20:30


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27/02/2015 20:30


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the START-UP DIARies

AND THE IS...

98

Sarah McVittie, co-founder, Dressipi

Sarah McVittie explains how to use award wins to boost your business

A

s we work in the world of fashion, it’s no surprise that around this time of year our attentions turn to awards and award ceremonies. After all, this is the time of year when you can’t open a paper or log on to your favourite website without seeing some speculation on what the stars will be wearing at The Oscars. Yet awards don’t just have the power to make or break a career in film or TV. They can have an immensely powerful effect on the fortunes of all kinds of businesses too. There are awards in every business sector – from British retail fashion to ready meals – and they all offer companies like Dressipi the chance to make a name for themselves, something that can be invaluable for a start-up. When you’re a business like ours that is breaking into an established industry from the outside, awards represent much more than just a pat on the back for doing a good job. They’re an opportunity for you to sell yourselves. Entering an award is your chance to pitch your products and your projects to a panel of people who might, in their every day lives, be your ideal customer. This can have big benefits. Getting a nomination is a signal that to the rest of an industry that you have a place in the mainstream. It means that a group of experts has taken a close look at what you do, compared you to your competition, and decided that you have the edge. Getting nominated alongside a big name or a huge company can be nerve-

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wracking but it’s also a big thumbs up. It says that big, intimidating company is your peer. Of course winning – when that happens – is even better. An industry gong is more than a piece of glass or metal; it’s a validation that something you do is objectively better than the competition. A nomination or better yet an award can be a powerful shot in the arm for a start-up’s morale, but they can also have a positive effect on your business, if you’re prepared to make the most of the experience. For example, at Dressipi we were fortunate enough to win a Retail Systems award last year, and are now in the running for two Drapers Digital Awards, which will be announced in April. We put a lot of effort into applying for these awards. As anyone who’s tried before can tell you, it can be surprisingly difficult to distill what makes your business down to just 500 words or so. Yet we also know that getting shortlisted and even winning is just the beginning of a whole new round of hard work. Awards give you credibility but it’s still up to you to ensure that everyone knows about it. The moment I knew we’d been nominated for those

Drapers awards, Donna and I went straight back out on the hustle. We emailed our contacts, said thank you to our partners and immediately got back in touch with the retailers on our prospect list. It was another round of emails and phone calls in search of face-to-face meetings; the bread and butter of the entrepreneur’s day. But it got us what we needed. The seal of approval from a major award ceremony was enough to get us four further meetings with retailers. And that’s a good day’s work.

27/02/2015 19:41


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27/02/2015 19:23


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27/02/2015 19:22 27/02/2015 14:50

Profile for Elite Business Magazine

Elite Business Magazine March 2015  

A CUT ABOVE: Experienced entrepreneur and Wahanda co-founder Lopo Champalimaud is just the person to drag the salon and spa industry into th...

Elite Business Magazine March 2015  

A CUT ABOVE: Experienced entrepreneur and Wahanda co-founder Lopo Champalimaud is just the person to drag the salon and spa industry into th...