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The North East’s business and lifestyle quarterly

MONEY ONE 1 | ENGAGE www.converge.today


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We can help you build, diversify & grow your business through research, marketing & PR.

Find out how at: ngisolutions.com @ngi_solutions 2

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Contents Business

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Hello from the Editor

Auto-enrolment: The lessons

A helping hand

7 tips for preparing for investment

And I would have gotten away with it...

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The rise of m-commerce, and how to monetise phone shoppers

To equality & beyond: The gender pay gap in the UK

Are you investor ready?

The National Living Wage

R&D funds: Powering innovation

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Are you fuelling the Hacker Economy?

Diversifying for success

5 ways you’re sabotaging your selling opportunities

Children’s heart charity turns to UNW for financial management peace of mind

Hedgehog labs. From start-up to success

Lifestyle

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Spider-Fan!

One year on

The best working parent tech

Air travel gets super-sized

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header Converge Group LTD Publisher James Tennant Editor James@converge.today Head Office The Axis Building, Maingate Team Valley Trading Estate Gateshead NE11 0NQ To advertise with Engage or to join Converge contact: info@converge.today 0191 404 6856 Graham Soult Business Amy Rich Tech Cheryl Lumley Interiors David Alan Motoring Dave Booth Travel Copper Blue Creative Magazine design Stephens & George Print Group Print Remember We always want to hear your feedback. So if you have any to give (positive or negative) please send us an email – info@converge.today Enjoy reading Engage? Join in and be a part of it, it’s easy and affordable to do. Simply visit converge.today and request an invitation – we’ll take care of it from there! Disclaimer Although every care has been taken to keep all articles free of error, Engage Magazine takes no responsibility for factual or grammatical errors within editorial submitted by Converge members. Likewise, we accept no responsibility for lack of accuracy in submitted advertisements or for errors caused in the printing process. ©All rights reserved. Reproduction, in whole or in part without written permission, is strictly prohibited. 4

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Hello from the Editor Show me the money! (If you didn’t want a Tom Cruise-related movie reference today, you picked the wrong magazine to read).

Summer was busy for Converge. Very busy. We now have over 85 members on the platform, and we were joined by our very first Corporate Partner in Forfusion.

Here to help, just at the right time, is ‘The Money One’. We’ve got some fantastic, informative, actionable articles in this issue, from a host of the North East’s leading businesses.

Forfusion epitomise what we’re looking for in a partner. They’re ambitious and innovative, championing both the flexible working and ‘intrapreneur’ movements that are becoming more and more popular in modern, forward-thinking businesses.

There’s something for every business in this issue, with topics ranging from R&D tax relief, preparing for investment, auto-enrolment, staff fraud, how to increase sales, diversifying your offering and more.

I’m proud to call Forfusion our first Corporate Partner, and I hope it’s the start of a long and successful business relationship. Now we’re well and truly into Autumn, most businesses turn their focus to Christmas and the New Year. Plans and strategies are formulated, and budgets are drawn up.

To put it simply, this issue is going to help your business make more money and save more money. In addition, we have streamlined the lifestyle section to put more emphasis on business. But don’t worry, it hasn’t (and won’t) disappear. So dive right in and enjoy it. We’ll see you again in a few months with, ‘The Brand One’.

James Tennant Founder of Converge

Corporate Partners

Sean Ball Forfusion www.forfusion.com info@forfusion.com

When I first heard about Converge 18 months ago, I was encouraged and excited to see a new type of solution for businesses facing a changing and increasingly fragmented media landscape.

As a marketing person, with a background in PR, it’s become evident that the lines between the three aforementioned disciplines are increasingly blurred and interdependent.

James’s vision to help North East businesses capitalise on the ‘convergence’ of public relations (PR) with the Engage print magazine, digital marketing with the Converge web platform and business development with Rendezvous networking events represents an innovative way to build a regional B2B community.

Forfusion is acutely aware of this trend. This is why we launched Pragmatist, the first Cloud CRM designed for PR agencies looking to improve all aspects of workflow – beyond spreadsheets! We’re delighted to be a Corporate Partner of Converge, and look forward to seeing how the platform, and indeed its members, develop over the coming months and years. www.converge.today |

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If you’ve got the message, we’ve got the audience. Join in.

Join the most comprehensive business development platform around and reach thousands of businesses across the North East in print, online and in person. Request your invitation at www.converge.today, or call us on 0191 404 6856 www.converge.today |

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Business Auto-enrolment, preparing for investment, the gender pay gap, R&D funds, diversifying for success and more.

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The Pensions Regulator suggests that since the start of auto-enrolment in 2012, more than six and a half million people have enrolled into a pension scheme.

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Autoenrolment: The lessons Based on original expectations, automatic enrolment into workplace pensions has clearly been a success – so far. But there is much more to be done to address the potential crisis in pension provision which could be looming for future generations. What lessons are there for employers who haven’t yet staged or who may be staging in the next two years?

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Research suggests most large and medium-sized employers have complied with the regulations and most employees within them have remained in the pension scheme.

What have been the successes?

What hasn’t gone so well?

The Pensions Regulator suggests that since the start of auto-enrolment in 2012, more than six and a half million people have enrolled into a pension scheme. It estimates that more than 200,000 companies have enrolled employees, and more than 66% of employees are now active pension scheme members.

Auto-enrolment is now established in the UK, but it hasn’t all been plain sailing. The Pensions Regulator has issued 4,800 compliance notices to employers who have not set up pension schemes and a relatively small number of fixed financial penalties for ongoing pension failures. Research suggests most large and medium-sized employers have complied with the regulations and most employees within them have remained in the pension scheme and are actively contributing towards their future pensions.

The number of employees who have opted out is less than 10% of the eligible population, compared with initial expectations of more than 28% (now downgraded by the DWP to no more than 18% opting out). Similar schemes in the USA and New Zealand have experienced opt-outs of 15% and 21% respectively.

How can smaller employers ease the process? Here are four tips for smaller businesses that will be staging in the next 12-18 months, as well as for large and medium sized employers re-enrolling employees who opted out three years ago:

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Employers who waited longest tended to have less choice of pension provider and could only set up a pension with those who would take them, rather than the scheme they wanted.

01 Plan your auto-enrolment project early The best-prepared employers all: • Checked their staging date through The Pensions Regulator website. The most successful knew their staging date 18 months to two years beforehand, allowing them to consider any implications and plan for any potential issues. • Chose their pension scheme at least 12 months in advance of staging, enabling them to access the best scheme for their business, which could be assimilated into any offers and benefits for new starters, helping to attract new talent. Employers who waited longest tended to have less choice of pension provider and could only set up a pension with those who would take them, rather than the scheme they wanted.

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• Assessed which workers needed to be enrolled and calculated the potential extra costs of autoenrolment over the longer term. Most employers who had the time to do so assimilated additional pension contributions into pay reviews and absorbed some of the expenses. Those who left it late faced extra costs. • Considered ways to mitigate the additional costs by using salary sacrifice. In our experience, employers underestimate the complexity and potential effects of salary sacrifice on employees. We have helped some employers to navigate salary sacrifice schemes, and HMRC has approved all of our projects.


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Because auto-enrolment has been in operation for more than four years, most advisers have experience in helping other employers through the process.

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Make sure your systems can cope

Get help!

Think about the future

It would be very easy for employers to do things themselves and ‘muddle on’ with no help. But many require support in considering a scheme, setting it up, considering the cost implications, and with its ongoing maintenance and operation. Most employers who have successfully implemented auto-enrolment have accessed some help, through their IFA, accountant, legal advisers or payroll bureau. Because auto-enrolment has been in operation for more than four years, most advisers have experience in helping other employers through the process.

As businesses evolve, so does an employer’s benefits package. Most employers review their pension provision every two to three years to ensure it remains competitive and achieves its objectives.

Auto-enrolment isn’t easy, especially for in-house payroll professionals who now need to add pension provisions to their “regular” pay and benefits updates. Operation of the payroll is the key element to help manage auto-enrolment, so employers need either a robust payroll system to cope with the increased responsibilities or a reputable payroll bureau to outsource the function to. Our experience is that many employers consider the onset of auto-enrolment as too onerous and outsource to specialists because of the extra responsibilities and financial penalties. Our auto-enrolment service has been developed to help employers comply with setting up their scheme and throughout the life of the pension scheme.

Some employers use the pension scheme as part of their overall benefits package to attract and retain key employees; others increase pension contributions beyond auto-enrolment requirements to boost pension savings and lock in employees with a generous benefits package. At the very least, smaller employers should consider the potential extra costs of contributions following the proposed increases in April 2018 and 2019, and beyond.

Employers must also ensure that all other systems are set up to cope with joiners, leavers, contribution rates, and salary sacrifice requirements.

Lee Muter – UNW LLP If you would like any advice on auto-enrolment compliance, please email leemuter@unw.co.uk or call 0191 243 6000

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In the wake of the economic downturn and traditional lenders heavily reviewing their policies, we have seen a surge in off high-street funders.

A helping hand It happens to a lot of us. It’s nothing to be ashamed of, though it can cause stress between partners, and some will bring a third party to the relationship to try and resolve the issue. This can certainly spice things up and bring a lot more options which can be appealing. That’s right; we’re talking about raising finance via a broker.

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Rewind 10 years and borrowing was a much simpler proposition for most businesses. The banks were lending, and credit seemed readily available. Sadly, the situation has changed somewhat, though this is not necessarily a bad thing. In the wake of the economic downturn and traditional lenders heavily reviewing their policies, we have seen a surge in off high-street funders. They bring with them deep pockets and greater flexibility, with the trade-off being an increased interest rate.

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Don’t assume you will be paying through the nose though, as this depends heavily on your credit situation, with top tier alternative funders being hot on the heels of the bank’s rates, but the other end of the scale could see you paying 10% more. This is where you need to take a reality check. If you have to approach an alternative lender, either directly or via a broker, it is typically because you can’t borrow from your bank due to your credit or the nature of the requirement. At this point, you need to focus more on the affordability of the borrowing and the benefit it will bring, and less on the rate.

If you are using a broker, they will be looking for the best overall solution to the problem, which means keeping everything manageable and within budget, and delivered promptly. The right funding at the right time, if you will. Rates will be on their radar, naturally, but this is only one of many factors they will be balancing for you. So what are the costs? Following on from the first meeting and your agreement to proceed with the broker, Terms of Business will be drawn up, often including an appraisal fee (average £495). Beyond this, you may also be charged a broker fee. This will vary depending on the case but will be around 1.5% of funds offered.


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Your broker will have access to a cross-section of lenders from across either their selected specialisation (asset finance being a common one) or from across the whole lending market.

Now, what are the benefits? With hundreds of different lenders in the marketplace these days, finding the one that matches your requirements can be at best time-consuming, and at worst a fruitless exercise. Your broker will have access to a cross-section of lenders from across either their selected specialisation (asset finance being a common one) or from across the whole lending market. They will use their industry knowledge and relationships to identify a handful of appropriate lenders quickly, make initial enquiries and then begin the application process on your behalf.

From this point on they will gather all the required information for the lender and build this into a strong case for the facility you need, using their knowledge of the underwriting process to highlight the strengths of your case, and address any potential issues. The result is often a much quicker decision, with as good a chance of success as a broker can achieve.

This is where the real value can lie. Brokers are firmly working on the side of their clients, and can bring with them a host of experience and expertise to complement your in-house financial abilities. Finding a broker you can work with and trust can be a challenge, but once you do, they can become a powerful ally.

What else can they do for me? When working with a broker with market-wide access to finance, you may find they spend a good deal of time learning about your business and how it operates. Many clients will ask for the facility they feel is right, but it may just be a sticking plaster rather than a solution. A good broker will seek to identify the cause of a financial need and highlight a more appropriate course of action.

John Mansel – Advanced Funding Solutions For more information on raising finance, please email john@advancedfunding.co.uk or call 07539 783 359

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7 tips for preparing for investment

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Ensure you are asking for the correct amount

Research potential funders

Investors expect their contribution to lead to a step change in the value of the company – taking a development project to the next decision point, launching a product in a new country, installation of equipment to manufacture a new line and so on. Make sure you are asking for enough money to accomplish this and have built in a bit in your estimates to cover contingencies.

Most professional investors have websites where you can read about their investment policies and perhaps the companies into which they have invested. This will give you an idea as to whether they are likely to be interested before you submit your application. Don’t be afraid to ask them if it is not clear from the website if you fall within their criteria


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Make sure all the intellectual property you use, or intend to use, belongs to the business or is licensed to it under appropriate terms.

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Ensure your paperwork is in proper order

Review your Intellectual Property

Ensure you have the authority to proceed

Potential investors will want to inspect your records so make sure you have contracts in place for your major collaborations, that your employment contracts are up to date and signed, your filings at Companies House are correct and that your accounts are made up. Also, make sure any unusual entries are understood and explainable. Collect everything together for ease of review – perhaps in a DropBox.

Potential investors will want to make sure that you have the necessary rights to run the business. Make sure all the intellectual property you use, or intend to use, belongs to the business or is licensed to it under appropriate terms. Everything must be in writing. Where you have had work done by a third party, check that the contract provided gives you all necessary rights to any intellectual property created.

Your existing articles or shareholder agreement may have restrictions on approaching third parties for investment or set out a process by which this is to be done so make sure you follow the rules.

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Prepare an introductory document

Brainstorm the questions that make you feel uncomfortable!

You will need to pull together a non-confidential teaser that you can send to investors to try and attract interest. This should explain a little about the company and its management team, how much money is needed and what it will be used for, the commercial potential, and why this is a great investment opportunity. You will need a more detailed version that includes confidential information to present to those who express an interest and sign a confidentiality agreement as well.

If an investor is interested, they are bound to have questions. Think of all the tough questions they might have and work out solid answers in advance. If you have data or know of publications that support your answers, make sure you have those to hand.

Patricia Barclay – Bonaccord For more information on preparing your business for investment, visit www.bonaccord.eu or email patricia@bonaccord.eu

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And I would have gotten away with it… 22

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Recent research by CIFAS – the UK’s Fraud Prevention Service – has confirmed that staff fraud has a reputational, financial, regulatory, internal and customer service impact on businesses. As a result, staff fraud is now emerging as the single most significant fraud risk to the financial services industry and a grave risk to all businesses.

As an employer, there is nothing worse than learning that a trusted employee has been committing fraud within your business. It’s one of the most stressful and upsetting issues that an employer can face. Fraudulent behaviour can be anything from lifting a few pounds from the till, claiming undue expenses, fiddling time sheets, unauthorised allocation of company funds, or even stealing organisational documents and data. Unfortunately, all organisations are vulnerable to it, especially SMEs that have little to no security or fraud prevention policies in place. Luckily, you don’t need a resident Poirot to keep the fraudsters at bay, we’ve listed our top seven things that you can do to prevent criminal activity and ring the alarm bells!

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When it comes to protecting data or intellectual property, get ahead of the game and ensure your policies are up to scratch, and key employees are covered by a Restricted Covenant. This ideally needs to be written specifically for the individual and needs to be considered reasonable otherwise it won’t hold up in court.

Be clear what levels of authority your staff have been delegated.

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Make a good 10-day spell of annual leave mandatory! Fraudsters tend not to take longer absences for fear of their wrong-doing becoming exposed (and by law employees should be taking the legal minimum of 20 days anyway).

Ensure that proper procedures are in place so as to minimise the risk of fraud and employees are given appropriate training on these procedures.

03 Make sure you are background checking at the recruitment stage, especially for roles with access to cash and company funds. Offers should be subject to successful background checks.

05 Sign off your finances making sure you’re supervising all related financial activities.

07 Encourage employees to report any colleagues who are committing fraud.

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There is no doubt that getting the police involved sends a strong message to other employees that you have zero tolerance for fraud.

And once you suspect fraud, what do you do about it?

Often employees may not even recognise that their actions are considered as fraud (taking home stationery, leaving the office slightly earlier on a regular basis, doing some photocopying for home) but it all adds up and starts to create a concerning culture. The more severe cases of fraud may require police intervention, for example, money laundering. Otherwise, the employer may choose to apply their discretion over reporting the crime, careful though as there may be insurance or regulatory obligations that require it to be reported. There is no doubt that getting the police involved sends a strong message to other employees that you have zero tolerance for fraud, but it also presents a higher risk of publicity and reputational damage that may need to be managed.

If you are regulated by the Financial Services Authority (FSA) and there is concern that the employee is not behaving in a fit and proper manner, then there will be an expectation from the FSA that the employee is suspended. Be warned though, if you don’t follow a fair process, regardless of the alleged fraud, you could have an automatic unfair dismissal on your hands. This can be complex, especially when a police investigation is taking place. In addition to this, emotions and stress levels can run high. My advice is always to seek expert advice to guide and support you. The HR Dept is here to help prevent fraud and to support those hit by fraud.

How you deal with it will very much depend on the situation, but you must ensure that your disciplinary procedures are followed, and a thorough investigation takes place. This may include suspending (on full pay) the alleged employee(s) while the investigation runs its course.

Jayne Hart – The HR Dept. For advice on HR and Social Media policy, please email jayne.hart@hrdeptco.uk or call 0191 594 7789

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The rise of m-commerce, and how to monetise phone shoppers.

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The world is at a point in time where certain technologies are taking huge, ambitious leaps forward with seemingly little effort. New processes, software and devices are emerging in these areas that are allowing exponential growth, with consumers and businesses alike jumping two-footed into new waters that get deeper every day. It’s an exciting time, that’s for sure, but it can be easy to get left behind.

One of the most rapidly expanding areas is m-commerce. Also known as mobile commerce, m-commerce is the newly defined practice of buying and selling goods or managing finances using a mobile device such as a smartphone or tablet. Generally speaking, this includes any purchases made on websites or apps, as well as transactions made in-store using a phone’s near field communication

function (NFC) or contactless payment features. Banking conducted using a phone, sometimes referred to as m-banking, can also be counted as m-commerce under some of the broader definitions. The very fact that m-commerce can be used as an umbrella term for various acts and processes can prove to be problematic when it comes to

quantifying its potential and the effects it has regarding revenue. If you take m-commerce at it’s widest angle, including m-banking and the rest, then it has been estimated by Digi-Capital to exceed a hefty $500 billion in sales by 2017 across Asia, America and Europe, whilst Gartner are forecasting a market worth of $621 billion thanks to 450 million users by the same time next year.

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The numbers are certainly impressive, especially when you consider how new m-commerce is and how rapidly it is catching up with the more established e-commerce. The UK is one of the leading countries regarding digital sales, with online spending rising to ÂŁ114bn in 2015. Those numbers are still growing too, as an impressive 20% of all sales for February 2016 were made via e-commerce. Looking at these figures, it can be argued that m-commerce is still not taking full advantage of its user-base by comparison. For all the huge projected revenue figures it has been shown that only a third of shoppers browsing via e-commerce sites actually follow through and finalise their purchase. The other two-thirds simply abandon the transaction or leave the items in their basket, a loss of custom that would be unacceptable on the high street. The figures for those shopping on a mobile phone or tablet, utilising

m-commerce, are even worse. Studies from across the last few years have shown that only 3% of prospective mobile purchases are actually completed, despite the fact that over half of all traffic to retail websites now comes via the use of smartphones and tablets. That’s a shockingly low conversion rate by any standard. So, what can be done to boost sales with m-commerce? We suspect that the answer lies in the process itself. In most cases, there are simply too many steps, processes and loading screens that come between browsing and an order confirmation. If the mobile shopping experience was streamlined, with less friction and with a more efficient sales funnel taking consumers from landing to paying, then retailers would surely see a boost in sales.

In fact, if retailers reduced the amount of steps leading to a purchase and abolished the on-site registration process, invaluable though it may be for gathering email addresses and customer data, then current thinking shows that mobile conversion rates could easily increase by up to 60%. M-commerce is still the next big thing regarding shopping habits, that much is for sure, but retailers must ensure that their mobile experience is optimised and up to scratch before they can start to see the benefits for themselves.

Carl Buckley – Urban River For more information on m-commerce, and how your business can better monetise shoppers please email carl@urbanriver.com or call 0191 423 5688

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To equality & beyond: The gender pay gap in the UK In spite of long efforts to offer equal pay for all, a considerable pay gap has persisted into the twenty-first century as women continue to lose tens to hundreds of thousands of pounds in pay, compared to their male counterparts. The gender pay gap, which essentially is the average difference between men and women’s aggregate hourly pay, is explained mostly by a lack of women in higher paid roles.

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Creating equality between the sexes is more than fulfilling a quota or being politically correct; it’s simply good business.

The talent pipeline is just not operating as it should, and while women make up 40% of the global workforce for administrative jobs, females only account for 17% of executive roles. The UK’s gender pay gap of 19.2% represents a significant loss of productivity. Creating equality between the sexes is more than fulfilling a quota or being politically correct; it’s simply good business. Women are better educated and better qualified than ever before, yet their skills are not being fully utilised.

As Chris Giles, Economics Editor of the FT explained: “If you came from Mars and were plonked into the UK labour market, you would know that if you were a woman and working full-time, you would be paid 9% less on average, in the middle of the earnings distribution, than if you were the equivalent man. There is no regard taken of the type of job you do, your background, your education or qualifications. It is a simple average, normally measured at the median.” Research shows that this even happens at graduate entry level. Overall, male graduates continue to earn more (£24–£27k) than female graduates (£21–£24k), even when compared with those who did the same subject, went to a similar university and even went into the same industry. Despite David Cameron’s pledge last year to close the gender pay gap in a generation’s time, such progress has become relatively stagnate; this was until new government regulations were announced.

Gender salary reporting is compulsory in 2016: Are you prepared? On 1 October 2016, regulations will come into force requiring large, private and voluntary sector employers with an employee total of 250 or over, to report annually on gender pay gap information. Also, these regulations will require businesses to divide their pay distribution into four bands and work out the number of men and women in each quartile. Companies that then fail to address any gender pay differences will be highlighted in league tables and published online. This league table is intended to draw attention to the worst offenders and will be published from 2018, giving firms some time to address the inequality before their data appears on the list.

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£ So what must be published? The Regulations will require employers to publish the: • mean pay gap ( the difference in the average pay of male and female employees) • median pay gap ( the difference in pay of the middle male and middle female earner) • figures of men and women working within salary quartiles • mean bonus gap (the difference between the mean bonus payments paid to men and women) in the former 12 months • the proportion of male and female employees that received a bonus in the preceding 12 months. Employers must then publish their gender pay gap information on their website, accompanied by a written statement confirming that the information is accurate. It must then remain on their website for a minimum of three years and will be published on a government-sponsored website. An opportunity will then be given to employers (although not mandatory) to publish a narrative in which they can explain any pay gaps and set out what corrective action they intend to take to be in line with the regulations. So what must I do? 1. Start planning for the pay gap reporting now. Businesses should take action as soon as possible to introduce new systems (or review and update the existing systems) to enable the analysis of gender pay gaps. 2. Where pay gaps become apparent, consider what explanation or justifications can be given, and what action can be taken to narrow the gap. 3. Consider engaging legal support, particularly in light of the reputational and financial risks of potential equal pay claims.

Kelly Shotton – Westray Recruitment To find out more about Westray Recruitment please email kshotton@westray.co.uk or call 0191 492 6622

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Are you investor ready? In my work as an Excellence Engineer for Entrepreneurial Spark Powered by NatWest, the world’s largest free business accelerator for early stage and growing ventures, I have helped entrepreneurs from across the North of England to face and answer this vital question and learn how to become credible, backable and investable.

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Getting started All too often I’ve had conversations with entrepreneurs who are convinced that they are ready to go out and face investors, but who ultimately haven’t considered many of the key factors. At Entrepreneurial Spark we have devised a checklist, with the help of our legal and financial Eagles (partners), which covers some of the most important points: • Do you know your numbers? While it might be nice to receive £100,000, is this really the amount your business needs, or would £75,000 be sufficient? • Are you able to effectively demonstrate how this money will be used? Have you got forecasts and projections, and a timeline for when you and the investor will see a return on the money? A good indication that you’re ready to seek investment is going through the process of figuring out exactly what it is you need the money for. Once you have a sum of money in mind break this down, look at your forecasts, your team, and how you’ll use the cash, and then you’ll be able to see exactly how much money you need. You might be surprised to find it’s less than you first anticipated.

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Network your way to investment Being an entrepreneur can often be a lonely ride, particularly if you’re not part of a business accelerator and don’t have access to like-minded people who are going through the same journey you are. This can pose a problem when it comes to looking for investment. How do you get started if you don’t know where to look? The answer is networking. Build your database and speak to other entrepreneurs and businesspeople. Many are turned off from going to networking events because they’re uncomfortable speaking to strangers. My advice? Start getting comfortable with being uncomfortable. How are you ever going to approach an investor if you can’t explain your business to a stranger at an event? Part of getting investment is building a relationship and gaining credibility to show you’re the right person to entrust with their money. If you network and build your profile within the entrepreneurial and business community, then you can make these connections and create a name for yourself. Always remember – if you’re ever given the chance to pitch your business then take it! You never know who is listening in the audience and who they might know.

Investor ready So you’re ready to begin the investment process. You’ve checked your numbers, got your figure, and know who you’re going to approach. Now what? You need to prepare. Part of being investor ready is your mindset – you have to be open to being challenged. At Entrepreneurial Spark we arrange piranha pits for our Chiclets looking to seek investment where they’re challenged on their figures, the business, why they need the money, how much equity they’re willing to sell, and what their limit is. Ask yourself ‘what is the question I dread being asked’ and answer it. The more you prepare, the more comfortable you’ll feel in that first meeting. Another vital thing is to ensure you are pitch perfect. Put your investor hat on and figure out what they would want from the deal, then appeal to this. One of the biggest things people miss out when they’re preparing is remembering it’s not the investor’s business, so if they’re going to part with money and their time they’ll need something in return. Something else to consider is what exactly is it you’re looking for. Do you just want straight cash? Or could the person you’re approaching add value to your business in other ways? If you have a skills gap within the company, and they have experience in this field, could they join the board and offer their advice too?


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Next steps Remember that investment doesn’t always happen overnight. It takes a lot of time and hard work; it can be a very time intensive process so you need to make sure you aren’t abandoning the day to day running of your business.

The answer is networking. Build your database and speak to other entrepreneurs and businesspeople. Many are turned off from going to networking events because they’re uncomfortable speaking to strangers

If it doesn’t go so well, make sure to find out why. Ask questions and get feedback so you can understand what it is you need to work on before going back to speak to another investor. The most important thing throughout the process is having a plan. With the right #GoDo mindset, once you know what you need and what you want to achieve, you can work on everything else

Jeremy Ambrose – Entrepreneurial Spark To find out more about Entrepreneurial Spark, and how we can help make your business credible, backable and investable, please visit our website www.entrepreneurial-spark.co.uk

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The National Living Wage On 1st April this year the new National Living Wage (NLW) replaced the current minimum wage for workers over the age of 25, raising it from £6.70 an hour to £7.20 (anyone under 25 will still be on the £6.70 rate, and less if they are under 21).

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In particular, the government is hoping that the move will eventually cut the amount it pays out in working tax credits, especially if plans to increase the NLW to £9 an hour by 2020 come to fruition. The arguments surrounding the introduction of the NLW are twofold. Companies are worried about the additional costs of their wage bills and warn about increased prices or redundancies. Workers, on the other hand, are pleased with higher wages but concerned about the knock-on effect on their job security. The Living Wage Foundation predicts that six million low paid workers will benefit from the NLW. According to government figures, many workers will see their pay packets rise by up to £900 a year, the largest annual increase in a minimum wage rate across any G7 country since 2009 in cash and real terms. In fact, by 2020, for example, a 25-year-old working a 35-hour week and receiving the minimum wage of £6.70 will have earned an additional £4,800.

Analysts from the Office for Budget Responsibility (OBR), meanwhile, predict that 60,000 jobs could be lost, partly as a result of employers seeking to employ more workers in the under-25 age bracket. Others claim that as many as a million jobs are at risk. A recent Resolution Foundation report also specified that the three sectors most significantly affected by the NLW were wholesale and retail, hospitality and support services, with an estimated 2.7 million – 46% of all those affected – in those sectors set to benefit from the NLW by 2020. In hospitality alone, the increase in the wage bill is expected to be 3.4% by 2020, compared with a general increase across the UK of just 0.6%.

Of course, not everyone out there will feel so positive about the changes. Nevertheless, perhaps the key point is that, even if you are reticent about forking out more, you must still communicate positively with staff around the NLW. Employees will undoubtedly be pleased to be earning a little more so it’s imperative that you stifle your inner curmudgeon and present a brave face. Otherwise, you risk neutering the morale boost the NLW will undoubtedly provide and leave yourself and your business looking rather uninspiring!

When you consider that a company with 100 full-time workers will face an annual wage bill increase of £96,000, it’s easy to see how the NLW has caused consternation and trepidation amongst all sorts of organisations. Nevertheless, while larger companies have greater flexibility regarding absorbing such costs, it’s smaller businesses that may be hit the hardest with projections showing that those with fewer than ten employees are likely to feel the greatest impact with a forecast increase of 1.5% in wage bills.

Carl Haagensen – NatWest To find out more about the impact of the NLW on your business, and to discuss your options please email carl.a.haagensen@ natwest.com or call 07825 936 091

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R&D funds: Powering innovation 40

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One of the most overlooked sources of finance for growing businesses is Research and Development (R&D) tax relief. This is a crucial part of the government’s funding strategy for helping stimulate the economy, but many businesses miss out on what they could claim.

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The financial risk in innovation is the single biggest factor that prevents businesses reaching their potential.

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The name of the funding is a bit misleading and can put some people off. R&D tax relief can suggest that you have to be carrying out pioneering science and that your business pays tax on profits. Both of these assumptions are wrong. It is better to think of it as a form of funding that is just claimed on a corporation tax return.

This is usually part of salaries, consultant’s costs, and materials that relate to the thinking time involved or the development phase. Many businesses look at this as just part of what they do and don’t think of it as innovation, but in many cases this means they are missing out on government financial support for their work.

Loss-making companies can claim a payment as reimbursement of part of their qualifying costs without waiting until they have future profits to feel the benefit. Also, qualifying activities don’t need to be pioneering research; it just needs to tackle a technological uncertainty. So, if there is some doubt about the best way to make products or processes quicker, lighter, faster, cheaper, more robust or more useful, part of the costs of exploring the options can be claimed.

“Our R&D claim gave us a great cash boost, and the claim process was quick, clear and straightforward. We have raised funds from a few different sources, and this was the easiest.” Matt Hulbert, Ojee Golf Over the last 15 years, around 40,000 UK companies have claimed this funding. This is around 1% of companies in the UK. It’s hard to believe that only 1% of companies in the UK are innovating; this is a really poor reflection of the level of innovation in UK business.


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Those 40,000 businesses have shared around £14bn between them, and there is no sign of the government reducing the level of funding available. If anything, all signs are pointing to the fact that there is a lot more funding available. The government has made the funding more and more generous year on year to encourage more companies to make claims, and it is exactly right that the government supports innovation in this way. The return that is generated by stimulating innovation is more than 12 times the investment, coming through increased PAYE, VAT and tax on profits. Our experience is that businesses can typically claim around £45,000, rising to £70,000 each year for companies that make repeat claims.

The financial risk in innovation is the single biggest factor that prevents businesses reaching their potential. This is the case from start-ups to mature businesses. Taking away part of the financial risk of innovation makes it easier for the business to commit resources to the developments that make them more competitive. Often that means releasing the potential that is already in the business – staff with excellent knowledge of the industry, the products and the market, whose ideas aren’t voiced because most business cultures don’t encourage it. That is something we help tackle at the same time as improving access to R&D funding.

You don’t have to apply for this funding in advance. If you’ve spent the money on qualifying work (mainly salaries, consultants and materials) you can claim part of it back. Typically this is 25-33% of your qualifying costs. This funding can be claimed by any size company in any sector. We have one very simple principle – businesses don’t build themselves, people build businesses. Recognising each person’s role in making the business, its products and its processes better can unlock the potential in the business – at the same time as unlocking money from the government.

This funding comes without having to give away shares, provide security, repay it in the future, stick to business plans or go through competitions for it. There are no complicated, time-consuming forms to deal with and no restrictions on how you spend the money.

Simon Briton – Quantum Law Quantify is an innovation consultancy and part of Quantum Law. Please email simon@quantifyrnd.co.uk – he’d love to hear from you.

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Are you fuelling the Hacker Economy ? Over ninety percent of the world’s data was created in the last two years according to Norwegian research firm SINTEF. More data was created in the last hour than there was for centuries of human existence. Think about that for a second – what a fantastic time to be alive! This increased digitisation of the world and workplace has brought about opportunities that were previously unimaginable. To improve efficiencies, to find cost savings and to innovate industries (and even create new ones!). However, there have also never been more opportunities available to those that wish to do us harm. To plunder and pillage, to disrupt and sabotage hard working, unsuspecting businesses.

Barely a week seems to go by where we don’t hear about a major data breach in the news. It may be unsurprising to us when we hear about monolithic companies like Yahoo! and eBay, and even TalkTalk being hacked. They are perhaps perceived as targets, of which attacks and breaches are inevitable.

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Newcastle tops the list However, it came as a shock to many when a Census-wide report, published in October 2015, found that Newcastle and its surrounding areas topped the national table for cyber-security problems (if only our football teams could perform as well in their national league tables!). The report found that 93% of North East businesses with over 200 employees had suffered a data breach. This brought the risks home, literally! The hacker economy, as it’s becoming known, has transformed into big business. Hackers can make serious money. The report found that the average cost of significant security breaches for small organisations can be crushing, ranging from £75,000 – £311,000. For larger organisations, the costs are even greater – a despairing £1.46m – £3.14m. Such attacks are so painful because they prove catastrophic for not just profitability, but in some cases to long-term viability – trust from customers is hard to win, but easy to lose.

Executives need to take back control Many business leaders feel overwhelmed by the scale of the risks posed by rapidly evolving cyber-security threats. However, boardrooms can, and must, take back in control of an area traditionally seen as the remit of the IT department. It is often difficult, but by no means impossible, for leaders to assess the extent to which their business may be vulnerable. The problem is that organisations are unsure about what they should do to protect themselves, and more importantly, their customers.

It’ll never happen to you, right? To quote Cisco’s former CEO and current chairman, John Chambers: ‘There are two types of companies: those that have been hacked, and those that don’t know they’ve been hacked.’ Experienced and reputable business leaders are often embarrassed when they find out a network breach and data theft has occurred. Often because they failed to detect vulnerabilities from within their own supply chain.

Where to start Start by understanding your vulnerabilities. The most common of which are outdated software or operating systems, long-term passwords and bring-your-owndevice (BYOD) threats. Take time to understand where your weak links are and resolve to do something about them. Regardless of how vigilant you are today, threats are constantly evolving. You can soon fall behind the curve and find your IT systems are no longer secure. We recommend that you begin by understanding the threats affecting your particular industry and understanding your organisation’s vulnerabilities. We realise that identifying threats can be tricky, so that’s why we’re offering organisations a Comprehensive Threat Attack Report with the most intelligent, threat-centric equipment to date at no charge. Many businesses have and will continue to fall victim to cyber-security threats, and thus fuel the hacker economy. Will your business be one of them?

After all, a chain is only as strong as its weakest link. If you aren’t aware of the vulnerabilities, how can you protect against them?

Sean Ball – Forfusion To find out more visit www.forfusion.com/security or please email info@forfusion.com

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Diversifying for success

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Not altogether unsurprisingly, the origins of the word diverse derive from Latin. Specifically, in this instance, the medieval Latin word diversificare, meaning “make dissimilar.” Diversification regarding income generation is a term that has been used extensively as part of developing a business. But what can and does it mean in reality?

What is diversification?

Why diversify?

Essentially diversification is all about moving into new areas of business within which you don’t currently operate. This can involve taking an existing product or service into a new sector, or developing a brand new product or service for a particular market (which may not yet be developed).

There are several reasons why a business may look to diversification to develop their business. By and large, the main reason is to increase turnover and profitability. But, digging beneath the surface, there’s more to it than simply the bottom line. A business may have reached saturation point in its core markets. If growth potential is limited, diversification may become an integral part of future growth. Over many years Apple has continued to look at ways of diversifying its income streams. This is evident with key product development points across the company’s recent history; iPod, iPhone, iPad and Apple Watch. Access to new technologies and the rapid pace of digital development may also open windows to markets that didn’t even previously exist. Think tablets. Think camera phones. Think smart watches. Think sat-nav. These didn’t exist on the high street (unless you were in the military or James Bond) until several years ago.

Competitive activity may also drive diversification as a course of action. Should one of your competitors develop a new product that opens up a new market, this may also present an opportunity for your business. Although not ideal, as it’s a more reactive rather than a proactive course of action, such openings may be too good to miss – or conversely too lucrative to miss out on. Again, the digital and telecommunications industries are awash with such examples. We mentioned saturation point earlier. What if it’s gone beyond that? If, for example, there is no longer demand for your product or service. Or maybe the demand is not sufficient enough to maintain a robust business model. The farming sector is a notable example to highlight here, with working farms adding to their portfolio via tourism accommodation, leisure/recreation activities and the development of retail outlets, all of which we take for granted now.

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Hunch or insight? This is, for me, the fascinating bit. You may realise with your current business that you do need to diversify. You may also have a feeling for the areas that you could move into. But what do you do next? Do you base it on a hunch, or does it pay to look deeper than that? In reality, it is probably a bit of both. With hindsight, it’s probably fair to say that in 1865 when Nokia established a ground wood pulp mill in Finland that they didn’t envisage producing mobile phones over 100 years later. The most entrepreneurial of business minds can see and identify an opportunity before us mere mortals have realised we have a need for a product. Beard oil. Personal hair trimmers. Cider.

Come on, did any of you think about putting ice in a pint glass of cider six or seven years ago?! Nobody has a patent on new (or good) ideas. However, depending on the level of sophistication in the marketplace, sometimes it pays to invest a relatively small amount in research to gauge likely demand, price elasticity and market reaction before you commit. Recently, our business, NGI Solutions, was asked to undertake a piece of research for a client in a highly specialised, technical area, focusing on a very niche product for development. Having invested, along with business partners, in new prototype technology in an established business sector, the client wanted to use our independent expertise to test the likely responsiveness of the market to the product.

Such insight can be invaluable to inform not only whether to proceed, but also to adjust the nature of the offering to help achieve success. And for those of you blessed with a more theoretical approach, using the Ansoff matrix as a starting point, can help provide a steer moving forward. Because for all of the good examples, there are always some that don’t work out quite so well. Over-extending a business, or moving into areas that are markedly different from your core offering can present a great risk if the knowledge, data and skill set for delivery are not planned for.

The most entrepreneurial of business minds can see and identify an opportunity before us mere mortals have realised we have a need for a product. 52

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Regardless of how you diversify, a mix of business acumen, allied to an investment in appropriate research can only help inform a clear vision.

Risk and reward

Our journey (so far)

On that note, the need to develop any business, be it through diversification or any other means, can be viewed through a window of risk and reward. Regardless of how you diversify, a mix of business acumen, allied to an investment in appropriate research can only help inform a clear vision, with appropriate measures to define success moving forward.

Diversification is something that’s also close to our hearts. Our business, currently in our second year of trading, is NGI Solutions – a research, marketing and PR agency, born directly from diversification, via our holding company, NewcastleGateshead Initiative.

Investment with both time and money is almost certain to be required – the level of investment your business is prepared to make is likely to be grounded in the level of potential returns, allied to a realistic time-frame for financial and market success.

Diversification has helped our business to continue to thrive. In an ever changing and fast paced business environment, diversification continues to present significant opportunities to develop new areas of income to drive the bottom line.

James Ealey – NGI Solutions For more advice on how you can diversify your business please email james.ealey@ngi.org.uk or call 0191 440 5744

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5 WAYS you’re sabotaging your selling opportunities. If your closing rate is suffering or it’s taking longer than it should to close sales, you may be sabotaging your efforts. Here are our top five things to look out for to stop making the sales process harder than it needs to be.

01 Hi, how are you today? Failing to establish any real credibility during the initial stages of the phone call leads the prospect to put up an imaginary ‘buyers defence wall’. How many times have you taken a call yourself only to be greeted with an over-familiar salesperson committing what we call a ‘HAYT’ crime – How Are You Today? If you don’t convey a level of equal status with your prospect, in the first few moments of the conversation, you’ll be perceived as “just another salesperson”. The questions or comments you convey in the early stages will help the prospect see that you understand something about the company’s goals or the challenges it faces. There will be plenty of time during the call to talk about your products or services, but this shouldn’t be straight away. Researching the prospects you plan to call is vital so that you can keep the focus of the conversation on the prospect – not you. By doing that, you immediately elevate your status from just another salesperson to a credible salesperson.

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02

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You won’t set any ground rules for what’s about to happen.

You leave your prospect with nothing.

HAYT crimes are frequently followed by something even worse … “showing up and throwing up”!

Prospects are often accused of keeping their cards close to the chest for fear of revealing some information that the salesperson might exploit.

Before the unsuspecting prospect knows what’s happening they’re being delivered a barrage of information by the salesperson on the other end of the phone – normally due to the fact they’re so excited they finally managed to speak with someone who isn’t just a gatekeeper. The salesperson proceeds to spend far too much time talking about themselves, their companies, and their products/services and far too little time focusing on the prospect’s wants and needs.

Salespeople do the same thing. They avoid providing too many details about how they do what they do for fear that the prospect will use the information to negotiate a better deal with someone else, or just try to do it themselves.

This typically leads to the salespeople feeling like the prospects aren’t listening, they talk about everything except the topic the salesperson wants to discuss.

How are you any different than every other salesperson?

As the instigator of the phone call, it’s your responsibility for keeping the conversation focused on topics that keep the selling process moving forward. Hint: that isn’t anything to do with you – but the problems and challenges your prospect currently has! When you initiate a call to a prospect, have a particular reason for calling (other than to introduce yourself and your company). If you don’t have a specific reason that addresses a prospect’s current or potential future need, then don’t call (and refer to # 1 above).

If your prospects don’t learn something new during the time they invest with you, what value did you contribute to the encounter? None.

You’re not. So, how do you provide value without giving away too much? You focus on the outcomes your product or service delivers for the prospect. You can describe them and the means of accomplishing them from a conceptual perspective without giving away the “how to” specifics. Doing so gives you credibility, separates you from the rest of the pack, and more importantly, gives the prospect a reason to do business with you.

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04

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You will avoid the elephant in the room.

You’re wearing ‘Happy Ears’.

We know our prospects are sizing us up when we meet. Typically; deciding if we’re credible, if our company is reputable and if we really can provide a solution for their current issues.

Remember back in point 2 we discussed setting some ground rules right at the start. Well, one of those rules needs to be that you get an agreement at the end of the meeting about what happens next. And be prepared, that might mean hearing ‘no’.

Likewise, we too should be sizing up the prospect. Would they be a good fit for us? Do they have the necessary investment of time and money to work with us? Are they able to make a decision in an agreeable time-frame? The only way you’ll know for sure is by asking questions, sometimes pointed questions, and potentially uncomfortable questions, but you must ask them nonetheless. Some of the information you will need to uncover in order to fully qualify (or disqualify) an opportunity includes: • Whether the prospect is working with (or talking to) other providers • When multiple providers are involved, how the prospect will ultimately decide which one gets the business • Who is involved in the decision process and what their concerns are regarding the issues surrounding the ultimate decision

We’ve seen many salespeople leave face-to-face meetings with prospects without knowing what happens next. They’ve heard a non-committal ‘we’d like to think it over’ and taken this as a buying signal. But when was the last time you heard someone say ‘we appreciate you spending an hour doing your presentation today but we really didn’t like it so it’s a no from us’. It just doesn’t happen. So the buyer misleads you with a wishy-washy ‘think it over’ statement and the salespersons ‘happy ears’ think they’ve heard an agreement to speak again. When really they’ve had a slow-no. Part of your remit as the salesperson is to keep the selling process moving forward until it stops. Be that at a yes, or at a no. Take a close look at how you interact with your prospects and make sure that each interaction adds value to the relationship, is focused on defining the opportunity, and keeps the selling process moving forward. Follow these steps and you’re on the right path.

• Whether or not funding is in place for the acquisition and if not, when it will be in place • When the buying decision will be made Prospects may “volunteer” this information during your discussions. But if they don’t, YOU WILL HAVE TO ASK! You may be uncomfortable asking some of these questions, but a few minutes of discomfort is preferable to wasting hours working on presentations or proposals for opportunities you have little or no chance of winning.

Andrew Pickersgill – Sandler Training For more information on how you can improve your sales process please email andrew.pickersgill@sandler.com or call 0191 206 9696

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Children’s heart charity turns to UNW for financial management peace of mind. Helping children born with life-threatening heart conditions to achieve their dreams is the mission of the Children’s Heart Unit Fund.

Better known as CHUF, the Newcastle-based charity was set up to provide lifelong support to babies and children from all over the UK who are treated by world-leading specialists at the Freeman Hospital. The unit is one of just two in Britain with the ability to carry out transplants and bridge to transplant operations with very young children. It’s a centre of excellence that treats children and teenagers from Europe too. Named as the North East Charity Awards charity of the year in 2015, CHUF raises funds for children treated at the Children’s Heart Unit and their families. The money, which is used to support patients throughout their lives, is generated through generous donations from individual and corporate supporters and also events such as balls, golf days and sponsored walks.

CHUF’s work is supported by patrons Alan Shearer, Ant and Dec and Sage Group founder Graham Wylie. UNW works with CHUF to support its back office function, from bookkeeping to payroll, keeping the engine of the charity ticking and leaving its staff to get on with their vital daily work. CHUF’s Chief Executive Officer Chris Gray said: “The UNW team is very generous with its time, knowledge and connections. We work with almost every department, and each contact is very easy to work with, supportive and understanding.

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The charity can tap into and benefit from all areas of UNW’s service offering and the differing expertise found within the firm through the relationship.

“CHUF has come a long way in two years. It has been an unbelievable journey for us and those around us. We couldn’t have made the significant progress we have without UNW, who provided exactly the right support at exactly the right time. “From revolutionising our payroll to helping find the right skills and experience for the Board, I have absolute confidence in their guidance and know we will be working together for a long time to come.” UNW helps CHUF with bookkeeping, management accounts, automatic enrolment, payroll, marketing and strategic recruitment. A key benefit of the arrangement is that Xero, the cloud accounting software used by UNW, enables its trustees to be involved in the finance. The charity can tap into and benefit from all areas of UNW’s service offering and the differing expertise found within the firm through the relationship.

UNW’s accounting services partner, Hazel Smith, said: “We provide a full finance function that looks after everything for CHUF, delivering a service they need and can rely upon. “Once a week we process payments for authorisation. We undertake all accounting transactions, the monthly management accounts and payroll, and we helped CHUF to put together a budget for the first time this year.

UNW is a leading independent firm of chartered accountants delivering a broad range of accountancy and advisory services to our clients. www.unw.co.uk

“Our versatility is that we can deliver the whole finance package. Clients outsourcing to us in this way can utilise all of the team, for the right areas, whether that be bookkeeping, management accounts, payroll and strategy. “Here at UNW, we understand that clients may require different levels of support throughout their business cycle, and we can offer a flexible approach. “Our relationship with CHUF and the way in which we work with them is a fantastic example of this in action.” Written by UNW

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Hedgehog labs From start-up to success Sarat Pediredla is the CEO of Hedgehog Lab, one of the success stories of the North East business community. If you were to use a business story to be the perfect example of the start-up journey, and the route many businesses must traverse to reach success, that story would be Sarat’s.

With customers that stretch from Guangzhou in China to California, it’s obvious that Hedgehog Lab is doing extremely well. Now a global company with offices all over the world, Sarat has an appetite for growth that inspires. Growing up in India, there was pressure on Sarat to go to University abroad from an early age. “In India, if you don’t go to University, you’re really harming your chances of doing well, and the Ivy League American Universities, Harvard, Stanford, MIT, etc., are the dream targets.” However, Sarat had different ideas, and a desire to become an entrepreneur led him to Southampton Solent University, to his parent’s surprise. “Southampton had an excellent program, and I wanted to do something I was really passionate about. My parents were a bit surprised and asked me if I was sure about my decision, but I was.”

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After moving to the North East with his wife, Sarat eventually launched his own business, with business partner Mark Foster, in 2007. “I don’t think there was ever a grand idea for the business. Our backgrounds were in consultancy, but we really wanted to set out on our own and do something for ourselves.” “I was quite frustrated with tech culture at the time – it was very much a sales driven culture where there was no value in people, just in numbers. We felt like it could be done better, in a more ethically responsible way.” Sarat and Mark initially wanted to move away from consultancy and do something they were more passionate about, which was building software. “Initially we were building financial software. We’d actually produced some software that banks would be interested in, and had very positive talks with a top-four bank. But just as we were about to go to market and get it all signed off, the bank pulled out of the deal.”


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The reason for this? The 2008 recession. “They simply couldn’t invest in a 6-figure software system while they were laying people off. We went from having a fantastic sale and a successful business, to no business at all in the space of a few weeks.” It is testament to Sarat’s resourcefulness that he, and Hedgehog, are thriving today. When the deal was pulled back in 2008, Sarat made the first of several pivots with the business to attract new clients and take advantage of new opportunities. “The business has changed dramatically over the last nine years. Hedgehog Lab today is in its third reincarnation. We’ve successfully been able to rebuild and pivot when opportunities have presented themselves because we wanted to create something special. If we reached a moment when the business peaked, we changed our direction and went where we could grow.”

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Despite leaving the world of consultancy, Sarat soon found himself back in it. “The second pivot for Hedgehog came when businesses started to approach us about doing some consultancy work. We were building lots of software tools, and we really didn’t want to focus on consultancy anymore, but the offer that we received was too good to turn down. For a couple of guys who had families and loans etc., it made sense to take up consultancy again.” Consultancy work was a big part of what Hedgehog did for the next three years until more changes in the market forced yet another pivot. “We’d grown to about 6 or 7 people by around 2010 and, while our agency was doing well, a lot of other businesses who did what we did started to outbid us and competition became incredibly fierce. We had positioned ourselves at the higher end of the market, producing very high-quality work, and we couldn’t compete with some of the quotes other software companies could offer. We stopped growing at the pace I wanted to, so we started to look at other opportunities.”


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And that is when Hedgehog made the change to the business we know today. Mobile apps are a huge part of everyday life now, but it wasn’t anywhere near as big a deal six years ago. Smartphones were just starting to really take off, and the iPhone was getting ready to take over the world.

2010s struggles extended beyond the business as well, as Sarat explains, “I fell critically ill with a long-term illness that year. Coupled with the struggles of the business, that time was particularly hard for me and for the other people in the business.”

“We were seeing where mobile apps were going in America and, as a developer who enjoyed making applications as a hobby in my spare time, I saw there was an opportunity to create mobile apps. We thought if we did that, no-one would be competing with us. It was a risky thing to do. It seems opportunistic now because we’re doing very well as a company, but at the time it did not feel like it.”

Despite those early difficulties, Hedgehog Lab has seen tremendous growth over the last six years. They’ve gone from a handful of staff to over 40 and are adding people at a rate of eight to nine per month. “We’re actually on track for 100% growth for the next three years”, Sarat mentions, with a big smile on his face.

As it turned out, no-one was really interested in mobile apps in the North East at the time. There was just no market for it. Initially, things were difficult for Hedgehog. “We knew we were going to have to retrain the staff, but some of them didn’t want to retrain and take a necessary pay cut to keep the business running. Because of that, we lost a few members of the team quickly.”

It’s impressive stuff, and there doesn’t seem to be any sign that things are slowing down. A UKTI trip to Boston, Massachusetts has been the catalyst for Hedgehog’s move to America, with plans to launch in multiple states in the very near future. When probed on finances (this is The Money One, after all), Sarat had plenty to say, specifically about investing your money.

“The financial side of things is something I’ve learned throughout my career as entrepreneur. The traditional view with money is that you should save your money and keep it for later, but I don’t necessarily agree with that.” But Sarat certainly doesn’t entirely eschew the benefits of saving. “Saving is important, that’s obvious, but the only way to really make money is by investing. I invest a great portion of my income in various things. Stocks, funds and property are a few examples. You really have to do this sort of thing with your money if your objective is to make more from what you have. You have to take calculated risks. As with entrepreneurship, you’ve got to risk a little, to make a lot.” With their ten-year birthday coming up next year, there are big plans to celebrate all the achievements of the last decade. Details are under wraps at the time of writing, but if Sarat’s vision for his business is anything to go by, the celebrations will be awesome. It was a pleasure chatting to Sarat, and I’d like to wish both him and Hedgehog the best going forward.

Written by James Tennant

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Some of our members

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Lifestyle Lifestyle news, reviews and previews. Cars, travel, tech, interiors, and even a bit of food and drink.

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motoring

Spider-Fan! David Alan takes a closer look at Fiat’s rather breathtaking 124 Spider

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motoring

Under the gorgeously sculptured bonnet you’ll find Fiat’s proven 1,368cc MultiAir, turbo-charged four-cylinder engine. It helps propel the little Sportster to 62mph in just 7.5 seconds and then onto the top speed of 134mph.

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motoring

The first time I drove abroad I had to negotiate the worryingly quick, and seemingly chaotic, streets of Naples before heading off to the stunning Amalfi Coast.

With my heart beating out of my chest following the unruly city centre, the winding roads and breathtaking views around the cliffs that lead to Positano did a great job of calming me down.

It gets better too - the underpinnings are from the Mazda MX5, one of my all-time favourite cars to drive. Japanese technology coupled with Italian styling – that’s a winning combination in my book.

I did that drive in a Mazda 626 family hatchback, so it wasn’t as romantic a scene as it may appear.

What makes it even more desirable is the name – Spider. Spider is the name Italian carmakers use for their convertibles. The name has been borrowed from the 1960s Fiat 124 Spider, which also inspired the curves of the new car.

But that sun-soaked stretch of scenic tarmac is one that I’d love to enjoy in the new Fiat 124 Spider. Just look at those photographs! Mind you, the one thing the Italians do well is produce strikingly beautiful cars.

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So what do you get for your money here (other than admiring glances and looks of jealousy)?


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Standard equipment on the entry-level Classica version includes an impressive array of features,

Well, under the gorgeously sculptured bonnet you’ll find Fiat’s proven 1,368cc MultiAir, turbo-charged four-cylinder engine. It helps propel the little Sportster to 62mph in just 7.5 seconds and then onto the top speed of 134mph. There are three levels of trim: Classica, Lusso and Lusso Plus, and prices start from £19,545. Standard equipment on the entry-level Classica version includes an impressive array of features, including four airbags, air conditioning, a leather-trimmed steering wheel with audio controls, a leather-trimmed gear knob, cruise control, 16-inch alloy wheels, keyless engine start and an info-tainment system with USB, AUX and Bluetooth connectivity. A seven-inch touchscreen infotain-ment system with DAB, WiFi, two USB ports and a multimedia control knob is available as a £500 optional extra.

The Lusso has that infotainment system as standard, but it adds sat-nav with 3D maps and a rear parking camera. It also has 17-inch alloys, heated leather upholstery, climate control, front fog lamps, keyless entry, chrome exhaust tips and a premium silver finish. The range-topping Lusso Plus adds adaptive LED headlamps, LED DRLs, automatic lights and wipers and a nine-speaker BOSE sound system (including stereo headrest speakers on both seats). All this is excellent news for those who enjoy toys. But, in all honesty I’d happily take the car with-out any of the toys and just enjoy the fantastic interior, the drive, and the romantic notion that I’m back in the 60s and on my way to take Audrey Hepburn for a day on the sweeping roads of the Amalfi coast. Ah, dreams! Written by David Alan

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travel

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One year on Hampton by Hilton, opposite Central Station in Newcastle, is just over a year old. However, it seems much more mature than that and, since opening, the hotel has become a well-established feature in the city centre. The 160-room hotel reaches up over seven floors and has some truly stunning views of the cityscape.

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travel

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Dave Booth explores the delights of Hampton by Hilton a year after opening. My wife and I decided to enjoy a night of R&R away from home after a busy week. So we rolled back the years and rocked the night away, before retiring to our delightful room.

Location, location, location Hampton by Hilton’s central location is clearly a benefit for the hotel. It is close to everything Newcastle has to offer. Shops, restaurants and a host of bars are just minutes away by foot. In fact, after our night out, where we enjoyed some live music and dancing, being able to walk two minutes back to the hotel afterwards was a godsend. As you enter the hotel and take the lift to floor two, where the friendly reception staff and a great open plan lounge and bar area await, you could be forgiven for thinking that a night in might just be all that’s required. On the surface, many may see the hotel as an excellent addition to the corporate market in Newcastle – and it certainly works well in that sense. Neat, smart and tidy rooms in a hotel in the very beating heart of the city is always a plus for anyone travelling in. There are excellent work and meeting spaces, good food, a nice bar and free Wi-Fi. What more could a seasoned corporate traveller want? And with the Hilton Honors loyalty programme, there’s even more reason for a business traveller to come again.

However, at the weekend you sense it also appeals to a less corporate, and more fun-seeking visitor. Both football fans and those who are celebrating their intended nuptials alike will benefit from staying here. After a fantastic sleep in our comfortable bed, a visit to the gym before breakfast was a great way to start the day. The gym itself is a welcome addition to the hotel, and has a selection of clean, modern and varied equipment. The inclusive, self-service breakfast offered a range of healthy options, such as fruit and yoghurt. However, yours truly savoured the more traditional option of a full English – a choice my stomach was extremely grateful I’d made. If you’re visiting Newcastle for business or pleasure or, like us, you want to get away for an evening or two, then check out Hampton by Hilton. It’s quietly confident – it knows it’s good, but isn’t showy.

Written by Dave Booth

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technology

The best working parent tech Being rushed off your feet is par for the course when it comes to parenting, so if there’s a shortcut or a slither of help/hope available – let’s face it, you’d be wise to take it. While we may all dream of tech that magically ties our children’s shoelaces, makes their breakfast, and ensures they do a decent enough job of brushing their teeth, we’re not quite at the stage of robotic nanny just yet. So, instead, we’re thankful for these little gizmos that make surviving yet another day with kids and the myriad of other life details we need to stay on top of, a touch easier.

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The Bug Brush

Handsfree Baby Car Seat Carrier – CocoBelt

In the world of new parentdom, finding time to brush your own teeth can feel like sheer luxury, so when you’ve got to make sure your kid’s had their fix of fluoride too, it’s great if you don’t actually have to do it yourself. Why? Because you could be a) selling outgrown babygros on Facebook, b) eating chocolate, or c) speaking to an adult. An actual adult. www.bugbrush.co.uk

You’ve left the house on time. Score ten points. Score bonus points for carrying the huge bag of nappies, bottles, wipes and clothes to leave at nursery, plus your work bag, lunch, and car seat with littl’un all in one trip. If you don’t have your car parked conveniently on your drive – score ten more bonus points and give yourself a high five because thanks to the CocoBelt you just might manage that. www.gadgetbaby.co.uk

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Cozi Family Organiser App

Tefal Toast n’ Bean

You work. Your partner works. Your kids go to nursery/school/ college/uni. Erm, when does the actual fun stuff happen? Yeah, about that. Use the Cozi Family Organiser App to find those 30-minutes of free time when you’re all free and in the right place. It’s a shared calendar that the whole family can access from multiple devices. Just what modern, hectic family life needs.

Conjuring up a meal to rival one of Gordon Ramsay’s creations is a thing of the past once you’re a parent. Who has fresh basil, capers, and star anise anyway? So all hail the Tefal Toast n’ Bean. It makes toast; it heats beans. Kids happy. Job done.

Fisher Price Think and Learn Code-a-Pillar

www.cozi.com/calendar

www.tefal.co.uk

A toy that keeps your baby entertained for longer than a nanosecond so you can get stuff done? A toy that could play a part in ensuring that (17 years down the line) your child gets those four A*s and a place at Oxbridge? Why, it’s the Fisher Price Think and Learn Code-a-Pillar! Critical thinking, problem-solving, and sequencing – this is a baby toy you might just find yourself addicted to. www.fisher-price.com

Written by Amy Rich

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technology

Air travel gets super-sized

We’re used to seeing all sorts of aircraft in our skies – aeroplanes, helicopters, and hot air balloons to name a few.

Plus, what with the recent infatuation with all things ‘drone’, there’s even more to capture our attention when we look up. However, we’re pretty sure the Airlander 10 has to be the most fascinating – and certainly biggest – aircraft to take to our skies ever. So what exactly is it? Part airship, part plane, this gigantic aircraft has a whopping million cubic feet of helium inside its triple-layered super-strong fabric. It’s tough, sturdy, and – unlike those crazy-shaped foil balloons from the fair – it won’t go pop.

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Quick Facts • The Airlander 10 is 92 metres long (21 metres longer than the Boeing 747-400) • It can stay in the air for weeks at a time • It’s made in Britain • It took its maiden flight from the Cardington Hangars in Bedfordshire (where ‘Take That’ have rehearsed and The Dark Knight Rises was filmed) • It can land and take off on all sorts of terrain as well as water


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IanC66 / Shutterstock.com

So why do we need the Airlander 10? Good question. Haven’t we got enough technology floating around in the skies above us? Do we really need a 92-metre long aircraft? Well, Bruce Dickinson, the Iron Maiden vocalist and pilot, certainly thinks so as he pumped £250,000 into a crowd-funding initiative in 2015. More funds also came from the UK, EU, and the US defence department, so it’s pretty clear there’s a lot of people on board with this one. With its peculiar bulbous shape, you’d be forgiven for thinking it looks a bit ‘gimmicky’, but there’s no denying the Airlander 10 really does have tremendous possibilities. The Airlander’s manufacturer,

Hybrid Air Vehicles, believes it could help with anything from transporting machinery to out-of-the-way places, to offering the world’s richest people something different from the ‘bog standard’ first class plane travel they’re probably so bored of right now. Still not convinced? It’s time to be. After the Airlander 10 took its maiden flight in the summer, the manufacturers are optimistic that within five years there will be 100 of these massive aircraft in our skies – if not more. With each one measuring roughly the same size as a football pitch, let’s hope they don’t fly in convoy. Written by Amy Rich

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what’s next

See you again soon We’d like to say a big thank you to all contributors and sponsors for helping us put together this fantastic issue. If you’d like to get involved in our other issues this year, please get in touch with us by emailing: info@converge.today, or calling 0191 404 6856

Up next The Brand One After that The Tech One A bit later on The PR One In about a year The Marketing One

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The Money One - Q3 2016  

The North East's business and lifestyle quarterly.

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