TALK BUSINESS MAY 2012
S! PDLOU UR NEW
FIN S COLUMNIST ER M R O F , INSIDE E STARS OF THE IC APPRENT AND NG A CL IRE YOU EEN U Q C LEE M
CHRISTIAN NELLEMANN SERIAL ENTREPRENEUR, GOLFER AND THE MAN BEHIND AWARD-WINNING COMPANY XLN BUSINESS SERVICES
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INSIDE MAY 2012 TALK BUSINESS
FOCUS ON STRATEGY
84 Britain’s got talent
15 News & events
Top negotiator Clive Rich shares his wisdom
86 Secret diary of an entrepreneur
New Editor, Helen Coffey, says hello News and updates from the business sector FOCUS ON SUCCESS
18 F ace on the cover
We put multi-millionaire, XLN Telecom founder, Christian Nellemann in the hotseat
26 T ake one company – Bikedock Solutions
Find out how we rated James Caan’s Start Your Business in 7 Days
Nails Inc. entrepreneur Thea Green tells TB what she has for breakfast
31 I heart my accountant
What your accountant can do for you
35 Salary Sacrifice Scheme Why adding company cars to the SSS could be the smart move for your business
39 Guardian angels
Business angels – how can you get one?
46 It’s payback time
Expert advice on getting debtors to pay up
48 Buyer beware
It’s a buyer’s market, so shop around
50 Voluntary auditing
You may not need a regular audit by law but should you get one anyway?
58 Design do or design dodo
Social media meets the corporate website
Matt Hodkinson on social media listening
122 The daily grind
FOCUS ON MONEY
FOCUS ON TECHNOLOGY
Evolve or become extinct warns Rich With
62 Risky business
Apprentice finalist, Claire Young’s column
64 In the driving seat Driving traffic to your website
67 A video is worth a thousand words Why you shouldn’t cut the corporate video
89 B ridging the gap 94 T weet tweet
Is Twitter timewasting costing you money?
97 Shopitize ’til you drop
98 G adgets to sigh for
TB interviews the founders of a new app
Portability for the travelling entrepreneur
101 Storage matters Are you storing your data effectively?
102 Top tips: websites
68 It’s all Greek to me Olympic-friendly businesses
The five things you need to know before creating the company site FOCUS ON FRANCHISES
FOCUS ON PEOPLE
73 Service with a smile
Master the essentials of customer service
105 Franchising news
75 T he risk factor
106 Spotlight: Riverford Organic We lift the lid on the organic fruit and veg franchise
77 A ll present and correct How staff can make your business sick
109 The rise of the franchise Visiting an exhibition can help you make the right decision
Moving the management conversation on
81 The kids are alright?
The cost of yob culture on UK SMEs
82 Helpful HR
Joe Tree’s Silicon Valley diary
The importance of the written word
61 Learning to listen
Cycle storage idea is a winning formula
29 Book reviews
56 What’s in it for me?
Recruitment advice from Lee McQueen
Stuart Hearn on outsourcing HR
113 Look before you leap Lloyds TSB’s franchising guru Richard Holden tells us that research is the key to finding the right opportunity www.talkbusinessmagazine.co.uk May 2012
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COMMENT TALK BUSINESS MAY 2012
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Jay Boisvert firstname.lastname@example.org Circulation/subscriptions: UK £40, EUROPE £60, REST OF WORLD £95 Circulation enquiries: Aston Greenlake Limited T: 0203 617 4680 Talk Business is published 12 times a year by Aston Greenlake Limited. Floor 8, 6 Mitre Passage Peninsula Central Greenwich, London SE10 0ER T:0203 617 4680 ©Copyright 2012. All rights reserved. No part of Talk 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. Talk Business will make every effort to return picture material, but it is sent at 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 Aston Greenlake Limited cannot be held responsible for such variation.
Good day ladies and gentlemen, let me introduce myself to you formally. As the new editor of Talk Business, I’d like to admit straight off the bat that this is a new area for me. I am an editor, not an entrepreneur – consequently I find myself even more in awe of those who have the guts and tenacity to go it alone and start up their own company. I always thought that entrepreneurs were few and far between, but I have news for you: there are far more of you out there than I ever realised. Within days of starting in my new role, I discovered that pretty much every person of my acquaintance knows at least three people who have started their own business. Everyone I asked had a story to tell, everyone I asked had a friend or family member who had set up on their own. There is a thriving, dynamic community of entrepreneurs here in the UK – and that is an amazing thing. The stigma is slowly changing; starting your own business is no longer considered the contingency career for those who fail elsewhere. Being an entrepreneur is fast becoming the first choice not the fall-back, with more and more of us deciding that we have the skills, the ideas and the determination to work for ourselves. This month the InnoTech Summit brought together entrepreneurs, VCs, Angels and technology experts. The event saw Oscar Jazdowski of the Silicon Valley Bank proclaim from the podium: ‘If you are an entrepreneur and you have just started a business, you have just sacrificed four or five years of your personal life’. Agreed, it is not an easy path to tread, and it can feel quite a lonely one at times. But as you flick through this issue of TB, with our feature on Business Angels on page 39 and one Brit’s look at life in Silicon Valley with our Secret Diary of an Entrepreneur on page 86, just remember: you are not alone. Whatever challenges you may face every day being your own boss, whatever problems you may encounter along your entrepreneurial journey, there are others out there who understand. We’ve brought together tips, expertise and inspiration from just a few to help you and your business in these crucial formative years. Enjoy,
Helen Coffey Editor
www.talkbusinessmagazine.co.uk May 2012
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CONTRIBUTORS TALK BUSINESS WHO’S WHO
Introducing this month’s expert contributors Lee McQueen is the former winner of The Apprentice who now runs Raw Talent Academy, which aims to provide SMEs and corporate organisations with the vehicle to build internal sales academies into long term staffing plans. It also encourages organisations to look at the wider raw talent we have in the UK, not just graduates. Lee, who has over 12 years’ experience working in recruitment and over eight years as an employer of sales people, is passionate about giving job seekers an opportunity to earn a career. Oh, and he likes football and rugby too.
Freya Zaiwalla is a solicitor at Zaiwalla & Co. She has been involved in a variety of cases ranging from banking litigations, family and employment matters, to Serious Fraud Office investigations. She is currently involved in six separate cases filed in the General Court of the European Union, challenging the European Council’s restrictive measures against Iran. Zaiwalla & Co. is a niche London law firm specialising in international commercial arbitration and litigation
Claire Young The Apprentice finalist says life has got a lot more interesting since the boardroom. Claire now devotes her time to School Speakers, her business providing quality motivational speakers for schools, colleges and universities, and her social enterprise Girls Out Loud. The aim of this project is to inspire young girls between the ages of 13 and 18 to raise their work and life goals and aspirations. Likes: Holidays, time with family and friends, cinema, horse riding (and her two horses Henry and Briar), reading, fashion. Dislikes: Liars, cheaters, laziness, people who play it safe, those who are flaky and faff!
Matt Hodkinson finally had to clear his nose of the so-called experts out there, who build the hype about social media, offer no real process or strategy for doing so, and send their delegates on their merry way, unsupported, after years of attending unhelpful seminars. As Programme Director at the F7 Social Media Accelerator Programme for Business – a three month workshop programme and online support network for owner-managers, marketers and PR execs – it’s Matt’s responsibility to bring a bit more certainty to the foggy and wet-finger-in-the-air world of social media marketing. Tap his name into Google, and double rainbows will adorn your screen. Not really…but it’s worth doing anyway.
May 2012 www.talkbusinessmagazine.co.uk
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NEWS & EVENTS GO ONLINE WWW.TALKBUSINESSMAGAZINE.CO.UK
Publishing Rich List topped by Barclay brothers
Britain back in recession The GDP figures for the first quarter of 2012 were announced today and Britain PLC is back in recession after a surprise 0.2% contraction in the economy, following a 0.3% contraction in the fourth quarter of 2011. Manufacturing was down 0.1% after 0.7% in the previous quarter. The continued fall in manufacturing will come as a blow to the Government, which was hoping for an export-led recovery. The disappointing figures come hot on the heels of Prime Minister, David Cameron’s visit to Asia on a mission to drum up more trade with booming economies, such as Indonesia. However, the Queen’s Diamond Jubilee celebrations and the London Olympic Games should do much to promote ‘Brand Britain’ in a global marketplace. Britain will be centre stage and there has never
been a better time to celebrate our rich manufacturing heritage. Brands such as Hiut Denim and New Balance are choosing to buck the trend of outsourcing manufacturing to emerging economies and display the badge ‘Made in Britain’ with pride. As such, a collective of British brands are coming together at the first Best of Britannia event, a brand statement event taking place in October which aims to showcase the best in British design, manufacturing, music and film to both the domestic and overseas markets.
Business mentoring site launched Ixion, a not-for-profit organisation based in Essex, has launched a new way for businesses and individuals to help people that are unemployed across London, Essex, East Anglia and Cambridgeshire. New website thementorhive.com is dedicated to providing mentoring support to those that need help, guidance and advice in getting into employment or starting their own businesses. ‘The Mentor Hive was created to provide an easy way for businesses and their staff to get involved in volunteering and put their skills to new use and help
those that are starting a new business for the first time,’ said John Govett, Ixion Group CEO. The inspiration behind The Mentor Hive was to find a way to match people that have work or business experience to individuals that are out of work and need all the support they can get to help them come off benefits. Feedback to the Mentor Hive has been positive, and both mentors and mentees are now starting to reap the rewards of getting involved. For more information on how to become a volunteer mentor, visit thementorhive.com
The owners of The Telegraph Group, 77-yearold twin brothers, Sir David and Sir Fredrick Barclay, are Britain’s richest newspaper proprietors according to The Sunday Times Rich List 2012, published on 29 April. The twins have an estimated £2,250m fortune, and also own the Ritz hotel in London and the Littlewoods mail order business. London-based Cristina Stenbeck, 34, who was born and raised in New York, is the wealthiest woman among Britain’s richest publishers, with a £369m fortune. After the sudden death of her father in 2002, Stenbeck became steward of the family’s interests at the Swedish-based Investment AB Kinnevik media and telecoms group, best known for its stable of Metro free newspapers (which doesn’t include the UK Metro). WPP boss Sir Martin Sorrell, 67, is Britain’s wealthiest advertising mogul with a fortune of £174m. Sorrell has built WPP into the world’s largest marketing services group. The 20 publishing and advertising millionaires listed are among the 1,000 richest people in Britain in the definitive annual guide to wealth.
www.talkbusinessmagazine.co.uk May 2012
NEWS & EVENTS GO ONLINE WWW.TALKBUSINESSMAGAZINE.CO.UK
Cookie law to affect three million UK businesses
BUSINESS STARTUP SHOW This month will see the 27th annual Business Startup show provide more than 250 seminars, over 350 exhibitors, advice and opportunities to anyone thinking about setting up a business. The free event, taking place 17-18 May, is expected to attract over 30,000 aspiring, developing and expanding companies to ExCel London. Speakers include James Caan, David Gold and Bill Morrow, and a host of seminars, ranging from naming your brand to how you can push your e-commerce strategy forward, will be taking place over the two days. For more information, visit: bstartup.com
Dates for the diary Nordic Chapter Workshop‘ValueBased Pricing in your Company’ 7 May 2012 Lund University School of Economics and Management, Sweden http://goo.gl/QDYj8
North East London Business Expo
15 May 2012 Leyton Orient Football Club northeastlondonbusinessexpo.co.uk
Business Startup 17-18 May 2012 ExCel London bstartup.com
Guildford Means Business Expo
16th May 2012 Guildford, Surrey www.guildfordmeansbusiness.com
Technology for Marketing & Advertising Manchester 30 May 2012 Manchester Central t-f-m.co.uk
E-commerce Exhibition 30 May 2012 Manchester Central ecom-manchester.co.uk
EDUCATION MINISTER BACKS BRITISH CALL CENTRES Education Minister Chris Grayling, in a speech to the rightleaning think-tank Policy Exchange, set out the Government’s priorities on creating jobs. He said British firms which moved their customer service departments overseas were ‘mad’ adding: ‘We all know how frustrating it can be speaking to a call centre operator overseas who works from a set script but doesn’t get what your problem is.’ In 2011, banking giant Santander UK said it had returned all its Indian call centres to the UK following complaints from customers. The UK’s third biggest bank said the move had created 500 UK-based jobs. Grayling said he wanted ‘British employers [to] put local recruits first. ‘It’s easy to hire someone from Eastern Europe with five years’ experience and many employers choose to do so,’ he said. ‘But those who look closer to home find gems too – turning round the lives of somebody from a poor background, given no real opportunity in life – and end up with a model employee as a result. So we should give these young people a chance.’
May 2012 www.talkbusinessmagazine.co.uk
FOCUS ON SUCCESS FACE ON THE COVER
May 2012 www.talkbusinessmagazine.co.uk
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FACE ON THE COVER FOCUS ON SUCCESS
‘I’m pretty unemployable’ Since the age of eight, serial entrepreneur Christian Nellemann has been working for himself – in fact, he’s never had a ‘real’ job. TB finds out how he kick-started three successful businesses and took on BT without breaking a sweat
‘I’ve never had a job,’ says the man behind multi-million pound success story, XLN Business Services. ‘I’m pretty unemployable!’ Somehow I have my doubts. Christian Nellemann may not have a boss willing to furnish him with a glowing reference: but that’s only because he’s been his own boss since the age of eight, when he rented out magazines on a payper-view basis to his friends at primary school. He hasn’t stopped since. When you look at his meteoric rise through the business world, it seems almost effortless. First there was Officepoint Ltd, an office products dealer group which, having been set up from scratch, reached end user sales volumes of £250m in the UK. Next came Euroffice, an Internet-based office supplies company that in two short years Nellemann turned into the leading e-tailer of office products for UK SMEs (and number three in Europe). Finally XLN Telecom was born in 2002, and has since become the leading supplier of telecom products and services to UK SMEs, offering phone services, Internet services, insurance, energy, card payment services and mobile services. It’s little wonder he’s been named Entrepreneur of the Year not once, but twice. Like nearly every successful entrepreneur I’ve met, it’s fair to say that Nellemann eats, sleeps and breathes his business. ‘If you’re an entrepreneur you need to focus 100% on what you’re doing,’ he says. ‘I’ve always said, look after your business and your business will look after you. Look after something else and you’ll lose your business.’ It is this focus that is arguably the key to his success – he found what he was good at and has kept on doing it, growing the business and his customer base along the way. Ten years on and XLN Business Services enjoys a £14.5m net
profit: and Nellemann sees the business tripling in size in the not-too-distant future. Impressed, moi? Maybe just a little…
TB: What was your very first business?
I was less than 10 years old, before I started proper school. We sold apples door-to-door, I rented out magazines at one point. I sold candy until the headmaster’s wife, who was a dentist, found out. My first ‘proper’ business came about between my second and final year at business school – a friend of my dad’s sent his son perfume samples. I was intrigued and as soon as I finished my exams I moved to San Francisco. And then things changed and there was an opportunity to come here, which I literally grabbed, and set that business up and ran a big operation for about 10 years.
How did you get your start-up capital?
When I started my very first business, my dad lent me the money out of my inheritance.
Would you advise people to go to their family for money?
Yes, absolutely. I’ve done that with all the businesses since. I don’t think there is any other way when you’re first starting out. I mean where else can you go? When we started the Internet business, we put our own money in, and then we went to family and friends, and then we went to VCs. If we’d gone straight from the business plan to the VCs, we might have raised £5m. But my view has always been the more risk that you can uncover, the cheaper the money that you’re borrowing is. If I went to you with just a business plan with all kinds of issues and risks, I would be paying a much higher price to borrow the money. Whereas if I can come to you a little later and say look, the
www.talkbusinessmagazine.co.uk May 2012
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FACE ON THE COVER FOCUS ON SUCCESS
through to be successful, I would probably not have stuck with it. But once you’re through it, it doesn’t feel so bad and you forget…
Any mistakes that you regret?
One of the things we can say collectively, without being too arrogant, is that we haven’t made any really serious or detrimental mistakes in this business. And certainly it doesn’t mean we don’t make mistakes. We do. But we find out – we’re pretty open and honest with ourselves. I make a lot of mistakes because I make a lot of decisions, but those around me feel they can say: ‘look, that doesn’t work, it’s not a good idea’. If you have a culture like that, mistakes very quickly become visible and you can change them.
If not mistakes then, what were the big challenges?
DO WHATEVER IT TAKES TO FIGHT ANOTHER DAY
business is running, we’ve got office space, we’ve got people – I would pay less. I would give away less of the business, therefore I’d save money.
What if you borrow from family and the business goes bust?
I’m not prepared to go to friends and family with something that’s completely blue sky. I’ve got to be able to look them in the face. Your good name is only good so many times: if you go to friends and family for money and you burn it, you can only keep coming back so many times.
BEING AN ENTREPRENEUR MEANS THAT YOU HAVE ALL THE RESPONSIBILITY – THE BUCK STOPS WITH YOU
What have been your biggest struggles? Have you ever thought about giving up?
No. Don’t get me wrong – there have been tons of big struggles and there continues to be. There has never been one where I thought, that’s it, I’m packing it in – I’ll go and get a job. I mean, I’ve never had a job so it’s not an option! It’s one of the beauties of the human condition – if I had known what I’d have to go
Well, you can imagine if you start out as a one-man-band and you go up against a monopoly, a £10bn or £20bn company like BT – now at no point have BT sat on their hands and said: ‘Go ahead and steal all our customers, we don’t mind’ – so battling BT for the past 12 years, that’s tough. We started with one product, fixed line, and that had systems and processes. You add another product, and all those systems and processes double. You add another, and they have now quadrupled. We are now fixed line, broadband, mobile, card processing, web services, IP telephony, energy…and insurance has come. So you can imagine the complexity of all the systems. It’s mind boggling.
What’s the best thing about being an entrepreneur?
Honestly I couldn’t tell because I’ve never had a job. But I imagine that being an entrepreneur beats being an employee on most levels, apart from the fact you can never go home and take the tie off and that’s it. What I enjoy is the creative side and building ideas; so you’re standing in the shower, you get an idea, you go into work and you start working on that idea. You can then start implementing it that afternoon – it might be working the next day. You can see that yes, that was a good idea for selling, or it didn’t work, and you tinker with it, so it’s a perpetual ‘playing with your train set’ kind of thing.
And the worst?
Being an entrepreneur means you have all the responsibility – the buck stops with you. If the shit hits the fan, it’s your house on the line, it’s your kids that go on the street and so on.
www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON SUCCESS FACE ON THE COVER
MY LIFE I’m watching: The Good Wife I’m reading: The Times and the FT I’m listening to: LBC 97.5 I’m surfing: Not much!
That is not an insignificant amount of risk and pressure. Hence you can never stop, you can never sit back; you have responsibilities.
What’s your biggest achievement?
There’s been many. What stands out? I suppose as it progresses the awards get bigger, but you also get used to them. So when you win your very first little award at school that’s a pretty big deal, and when you win your first award for business that’s a huge deal. I think when I won Entrepreneur of the Year the first time, that was pretty special. I’d been a finalist in 2004, 2005 and 2006, and then won it in 2006 for the London and South region.
What’s your advice to start-ups who are struggling in the current climate? Do whatever it takes to fight another day.
If you weren’t an entrepreneur, what would you be doing?
Not a lot. I can’t do anything else! There is no other option. I have a notion that maybe I’d want to play golf – but I would not be very successful I suspect!
22 YOUR GOOD NAME IS ONLY GOOD SO MAN Y TIMES
What would be your dream business to invest in?
BATTLING BT AND ALL THEY’VE BEEN ABLE TO DO FOR THE PAST 12 YEARS, THAT’S TOUGH
Family first or business first?
My dream investment is this business. I’ve put all my money, all my effort, everything, in here. Would I like to have bought a hundred grand’s worth of Apple shares in 1999? I mean, who wouldn’t. Would that have given me any particular joy? No, not really. This challenges me and keeps me out of trouble. Every entrepreneur would probably say the same, which is: invest in your own business. And that’s what you should do. If you’re an entrepreneur you need to focus 100% on what you’re doing. The correct answer of course, is family first. The reality is that it’s always going to be business first. It’s just the way it is. Is family the most important? Yes, of course. But it doesn’t come first. If I had to choose, I would choose family, but I don’t have to.
What do you do to wind down?
I wind down by playing a bit of golf on Saturday mornings, and if I’m really messed up then the only way I wind down is either on a boat or in Africa. These are the only places where I don’t think about business all the time. But I haven’t sailed since ’92 and I haven’t been in Africa for a year or so.
What’s the vision behind XLN?
Put simply we’re championing UK small business by using the collective buying power of many thousands of otherwise disenfranchised small businesses, to deliver meaningful savings on essential services they need to function – communications, card and payment processing, web services, IT, energy and insurance. For a small business saving £100 a month is often the difference between whether bills get paid or not; whether you can grow or even take a day off.
What does the future hold?
It’s probably the most exciting time yet for XLN, as we continue to meet the changing needs of UK small businesses by growing the range of products and services we supply. I’m passionate about small business – it is the engine of growth for the UK and our customers are people with the same passion and drive as me: getting up every day, working hard, facing every kind of obstacle and persevering to grow their idea into a business that supports them and their families. I have a huge respect for anyone who does that and a huge respect for our customers. So we will deliver a growing range of products and services our customers need and use our collective bargaining power to deliver huge savings: when we started, despite our small size, we were able to save our customers up to 50% compared to BT, and as we have grown we have forced them to lower prices; forced a £20Bn monopoly to change. There are four million small businesses in the UK, two million of which have premises, so with 130,000 customers we have a way to go – our sights are next set on 400,000. If we save them only £500 a year, that’s £200m in the pocket of small business owners. They save, we grow and everybody wins.
Date: 2002 Start-up capital: £200,000 Current turnover: £70m Net profit: £14.5m Growth rate: 20% No. of employees when company started: 1 Current workforce no.: 375 Work/life balance: 90/10
May 2012 www.talkbusinessmagazine.co.uk
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FOCUS ON SUCCESS TAKE ONE COMPANY
On your bike When James Nash and Josh Coleman came up with the idea of a bike storage company for a university project, little did they know it would spawn a thriving business. They tell us why perseverance breeds success
t was just four years ago, in the summer of 2008, when the founders of Bike Dock Solutions started the company which would see them make the leap from students to successful entrepreneurs. Fresh out of university, and with £20,000 in the bank (courtesy of their savings and the bank of mum and dad), James Nash and Josh Coleman set out to make their business dream a reality. While studying business management at the University of Surrey, they had to come up with an original idea and hand in a business plan as part of their final degree. The boys quickly realised their idea of a one stop shop for bike-parking products could be much, much more
than just an academic exercise – it could be a real company and, more importantly, it could make real money. Setting themselves up as the ‘bike parking specialists’, they began selling bike racks, bike stands, shelters, cycle sheds and lockers, and accessories. Fast forward to 2012 and Nash and Coleman, now just 25 years old, sit at the helm of a steadily expanding business. And with three further companies launched – including Shelter Store, which sells street furniture, and Hudson Garden Rooms, a provider of high end garden pods and rooms – it doesn’t look as if their luck will run out anytime soon. But, as with most businesses, it
hasn’t all been plain sailing for these likely lads. ‘Managing our cash flow was a challenge, because we did not have much,’ says Nash. ‘The single biggest challenge was getting our company name into the market. It was hard work drumming up interest in a new venture.’ They knew they had a good idea, they knew it was marketable, they knew there was a gap in the market: the only problem? No one knew who they were. ‘When we started out we did a lot of telemarketing. Speaking directly to potential customers, mainly local authorities,’ says Nash. But success really came when they spotted an opportunity to launch their business online. Instead of
March May 2012 2012 www.talkbusinessmagazine.co.uk www.talkbusinessmagazine.co.uk
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TAKE ONE COMPANY FOCUS ON SUCCESS
KEEP BATTLING AWAY. ALL WE HAVE KNOWN SINCE LAUNCHING OUR BUSINESS IS THE CURRENT POOR ECONOMIC CLIMATE
debating or hesitating, the boys immediately put everything they had into going after this new market. ‘We pretty much threw all the cash we had at a new website and Internet marketing. Since then we haven’t looked back.’ They went to where their potential customers were, and where their competitors weren’t, building an easy-to-navigate site, offering free delivery and online discounts, as well as putting in the time to ensure that they were SEO-friendly. Like most entrepreneurs, Nash and Coleman have experienced the bad as well as the good that comes with running your own company, despite their relatively speedy success.
The hardest thing about being an entrepreneur? ‘The main stumbling block for people setting up their own business is the fear of it not working. But they need to embrace the uncertainty,’ asserts Nash. ‘That is part of the thrill. I get a buzz from the outcome not being 100% definite.’ This attitude – the ability to turn a negative into a positive – is probably one of the reasons that the company has gone from strength to strength in such a short space of time. From starting life as a piece of coursework, Bike Dock Solutions now has contracts with Transport for London, London Westfield, Barclays Canary Wharf and, impressively, the Olympic Authority, and can lay claim to the title of first company to manufacture bike parking products from recycled steel. So what advice would they give to start-ups, having managed to succeed in one of the toughest economic climates for small businesses? Nash has some straightforward words of wisdom: ‘Keep battling away. All we have known since launching our businesses is the current poor economic climate,’ he says. ‘Keep thinking of ways to differentiate yourself from your competitors. Furthermore, as people are very price sensitive at the moment, do everything you can to ensure your prices are as competitive as possible – while remaining profitable of course.’ Sometimes it can feel like an uphill struggle, but Bike Dock Solutions
has experienced first-hand the benefits that come with persevering, even when the temptation to accept defeat seems overwhelming. The year of cold calling and telemarketing may have been hard graft, but Nash and Coleman have been amply rewarded for their commitment; they now have an annual turnover of £4.5m from their collective ventures. They could be forgiven for breathing a sigh of relief that their efforts have paid off, but these ambitious young entrepreneurs don’t like to stand still for long it seems. The future for Bike Dock Solutions, rather than being more of the same, is extensive growth: ‘international as well as UK expansion,’ explains Nash. ‘We have just launched into mainland Europe – Ireland, France, Spain and Germany – through the e-commerce, fully translated website - www.bikesafe.eu. This is a huge growth market for Bike Dock Solutions and an area where we are expecting rapid growth.’ When you look at the amount they’ve already managed to achieve in their first four years, there can be little doubt they’ll succeed.
CONTACTS: www.bikedocksolutions.com www.shelterstore.co.uk www.hudsongardenrooms.com
VITAL STATISTICS: BIKE DOCK SOLUTIONS Age of founders: 25 Date the company was founded: August 2008 Start up capital: £20,000 Current turnover: £2.5m Current net profit: £400,000 Growth rate: 100% Number of employees when the company started: 2 Current workforce: 15 Biggest achievement: Winning the contract to supply Transport for London with the cycle parking for the new cycle superhighways – and winning an Olympic contract Toughest challenge: Breaking into new markets
www.talkbusinessmagazine.co.uk May 2012
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BOOK REVIEWS FOCUS ON SUCCESS
START YOUR BUSINESS IN 7 DAYS: Turn your business into a life-changing success, by James Caan
Everybody wants to be an entrepreneur. But 90% of new businesses fail, because their founders failed to ask themselves the simplest of questions. In his new book, superstar entrepreneur James Caan outlines how asking the right questions and becoming your own ‘Dragon’ can save you years of heartache and wasted time, and thousands of pounds of wasted money. He guides you through a process where you spend a maximum of seven days deciding if your idea is workable and bankable,
teaching you how to say ‘I’m in’, but equally importantly, to have the courage to say ‘I’m out’.
genuinely has a chance of success. You can be one of the 10% of businesses that do make it.’
He says: ‘Each piece of advice in this book is based on my 30 years of starting businesses. You will find all the fundamental ingredients for any new company, whatever sector you want to be in, whatever size of business you have in mind, along with the tools to make it work. ‘Answer all the tough questions I am going to get you to ask yourself and you will have a business that
We say: ‘A great read, really inspiring. Caan deftly uses his three decades of experience as an entrepreneur to give clear, solid advice to potential start-ups. Rather than simply telling you to ‘go for it!’ indiscriminately, he teaches you how to really question whether your business idea will be profitable or not – and how to know when it’s time to say “I’m out”.
Start Your Business in 7 Days is published by Penguin, priced at £12.99 in paperback original
IT’S ALL ABOUT YOU: How to Maximise the Prime Asset of an Organisation, by Kate Keenan
It’s All About You is published by Ecademy Press, priced at £12.99 in paperback original
It’s all about You sets out to help business owners maximise the asset of their organisation – themselves. By focusing on you, knowing where you’re going, continuing to grow as an individual, mastering your environment and embracing your business, Keenan claims you can ensure that you and your business remain protected and continue to thrive. She provides industry and consumers alike with a guide and resources to aid understanding and give confidence to create and build a growing business.
She says: ‘This was written primarily for owners and partners in SMEs, and offers a range of techniques and formulas to help keep body and mind together in a coherent and healthy way during these turbulent times. ‘Much of the book’s content uses and adapts a great deal of what I have learned during my career as an occupational psychologist (working with corporate organisations) and aims to facilitate entrepreneurs in their personal development, along with that of their business. It’s all about You is the essential book for the busy,
lone working entrepreneur. This book puts the spotlight on your most important business asset – YOU.’ We say: ‘An interesting book. The problem that prompted it – that of many entrepreneurs neglecting their own personal development when struggling to get their business off the ground – is all too familiar, and will resonate with many entrepreneurs who have worked themselves into the ground in the first years of their start-up. Not one to change the world, but worth a flip through if you feel the need to reprioritize yourself.
www.talkbusinessmagazine.co.uk May 2012
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ACCOUNTANTS FOCUS ON MONEY
Clive Lewis, Head of Enterprise for ICAEW Chartered Accountants, tells us how the right accountant can help you on every stage of your business journey, from starting up to selling up
Before you set up a new business, it is important to make the right decisions from the start. You will need to consider issues such as the tax implications of starting a business, personal liability, and capital. An accountant can help with these issues. They can also advise on which records you are required to keep and help you to keep them in a way that suits you, such as by using accounting software or manual records. Accountants can save entrepreneurs time by helping with compliance issues, such as notifying HM Revenue and Customs of commencement of a new business and registering for VAT, as well as advising on issues such as which legal status a new business should have to minimise tax liabilities. Where there is a dispute over a tax liability, an accountant can handle the negotiations with HMRC on your behalf. And remember, if you decide to employ staff you will need to know how to administer a payroll, including applying PAYE, National Insurance rules and basic information such as
maternity and paternity pay. Many accountants will do it all for you.
The dreaded return
Having helped you right from the start, it will be much easier for your accountant to prepare things like your year-end accounts and tax returns when the time comes. Accountants will help you
Cutting your tax
When making important transactions or purchases of capital equipment, you may be able to save tax or delay the payment of tax. Most expenses of running a business are tax deductible, but there are exceptions. An accountant can help to ensure that all legally available tax allowances have been claimed,
TAX AND ACCOUNTING CALCULATIONS CAN BE EXTREMELY COMPLEX AND REQUIRE EXPERT KNOWLEDGE compile a set of accounts from the books and records of the business. A basic set of accounts is called a “compilation report” because the accountant states that he has helped the directors prepare the report, but offers no opinion as to the reliability of the accounts. Limited companies are required to file annual accounts with the Registrar of Companies in a specified format. They must also send accounts to all their shareholders. Limited companies may choose to have their accounts audited and accountants can help with that too.
and also to achieve maximum benefit from the timing of capital allowance (tax relief on equipment purchased) claims.
Finding ‘the one’
Finding the right accountant for you is important. Firstly, it is advisable to distinguish professionally qualified accountants from others. For example, a fully qualified chartered accountant must have professional indemnity insurance and procedures to deal with any complaints you may have. Chartered
www.talkbusinessmagazine.co.uk May 2012
FOCUS ON MONEY ACCOUNTANTS
Accountants are backed by a rigorous disciplinary regime, which means that clients can complain to the Institute of Chartered Accountants in England and Wales (ICAEW) if they are not satisfied with their accountant’s response. ICAEW will look into the complaint
An overdraft is often the best way to finance a temporary or fluctuating cash requirement. Where a longer-term commitment is involved, a bank loan is often the easiest and most suitable form of finance. But other forms of
AN ACCOUNTANT KNOWS WHAT INFORMATION IS REQUIRED AND HOW IT SHOULD BE PRESENTED TO HAVE THE BEST CHANCE OF SUCCESS and, if it is upheld, will discipline the member.
Planning for profit
An accountant can help you examine your business ideas and evaluate profit potential. They can also help you work on break-even analysis, business ratios and budgets, which can be used to set realistic financial targets. The way your business is financed has an important effect on profitability, especially when finance is tight. Questions you might ask include: • Should new capital equipment be leased or purchased? • Should money be raised by share capital, loans or overdraft? • What are the tax implications? • Can savings be used temporarily? All these considerations affect working capital requirements, the cost of financing the business and, of course, profits. They are not decisions that you should make without professional help.
finance, such as factoring or asset finance are becoming increasingly popular. Whatever finance you seek, particularly if you want to attract new investors, you will need to present a convincing picture of your financial condition in a business plan. An accountant knows what information is required and how it should be presented to have the best chance of success.
Adequate working capital and good controls over stock, invoicing, credit to customers and cash collection are among the most important aspects of good financial management in a growing business. Expansion of business activity increases the volume of transactions, which have to be recorded and managed. Your
accountant can help you control all these issues which arise with growth.
Buy, merge or sell
Buying: The difficulty in purchasing a business is knowing how much to pay since there is rarely a market comparison available. It is advisable to get expert advice on valuation and negotiation, as well as financing, from a chartered accountant. Selling: The time may come when you wish to sell part or even the whole of your own business. You will have to put a value on the business and find a suitable buyer. A chartered accountant can help by assessing the value of goodwill and assets, and introducing potential purchasers. They can also advise on how to minimise the tax liability on the sale. Merging: Merging with another business can involve complicated financial negotiation. There may be a transfer of shares or a cash adjustment between the parties and a lengthy legal agreement which will need examination from a financial viewpoint. The tax and accounting calculations can be extremely complex and require expert knowledge. Management buyout: The raising of finance for a management buyout may involve complicated loan arrangements between the company and the new shareholders. ICAEW Chartered Accountants recognise their responsibilty to offer crucial guidance. BAS offers an initial free consultation with no obligation to continue with the service and will play a vital role in the business support landscape. We have seminars taking place accross the UK 25-29 June.
CONTACT: www.icaewfirms.co.uk www.icaew.com/enterprise www.businessadviceservice.com
May 2012 www.talkbusinessmagazine.co.uk
Decisions, decisions, decisions! We can help ICAEW is staging a Business Advice Week from June 25 to 29 with free events, seminars and conferences in more than 30 locations around the country. The week, run in conjunction with the British Bankers’ Association, offers support and advice to start-ups and small and medium-sized businesses. It is the latest initiative under the umbrella of ICAEW’s Business Advice Service, which now offers free consultations to start-ups and businesses through more than 3,200 chartered accountants’ offices around the country. The events vary across regions but generally consist of brief talks on business-related topics such as access to finance, initial start-up advice and planning growth followed by an opportunity to network with business
owners, meet local advisers, banks and other local business organisations. Nigel Hastilow, head of ICAEW Business Advice Service, says: “Our speakers are experts in their fields. We are offering insights into all aspects of business development and performance – from dealing with cashflow and tax to marketing and exporting.” Anyone who is involved in running a business is welcome to come along to their nearest Business Advice Week event and get free practical financial advice for their business. Full details, including how to book, can be found at businessadviceservice.com/ basweek Nigel Says: “Keeping the show on the road is a full-time job for people running small
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companies. The problem is that more and more demands are heaped on you and sometimes you can’t keep up with it all. “When that happens, either something vital gets missed or the development of the business takes a back seat while the boss deals with the VAT returns. “These Business Advice Week events will offer hard-pressed company directors a chance to see how ICAEW Chartered Accountants can help share their load by offering specialist guidance and reassurance. “For instance, employment law can be a real headache for company directors. So can keeping up with your tax affairs, ensuring your accounts are accurate and up to date or worrying about whether there’s enough cash in the bank to pay the wages at the end of the month. “The ICAEW Business Advice Service has been set up to help companies address these and other issues. We want to help small businesses to succeed and our members all over the country are offering a free, no-obligation consultation which could help deal with some of these hurdles standing in the way of business success.”
A full list of events, including how to book, can be found at businessadviceservice.com/basweek
CONTACT: businessadviceservice.com email@example.com 020 7920 3561 www.talkbusinessmagazine.co.uk May 2012
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SALARY SACRIFICE FOCUS ON MONEY
Ever considered the benefits of offering company cars as part of a Salary Sacrifice scheme? Andrew Leech from Fleet Evolution explains why you should
Salary Sacrifice Schemes: the benefits Salary Sacrifice is an essential part of the modern employer’s benefit package, used to fund everything from childcare vouchers to bicycles. However, few companies are combining this extremely tax efficient funding method to one of the most desirable benefits: company cars. The reason? We asked some Fleet Evolution customers and these are the top five misconceptions about such schemes;
1. Not aware that company cars can be funded by salary sacrifice
There are still many employers who are simply unaware such schemes exist, especially in smaller companies where the HR manager has responsibility for other areas. Generally salary sacrifice cars do not appear as part of the standard portfolio of many flexible benefit suppliers as it’s quite a specialised area.
are cost neutral and low risk with measures to protect the employer and employee, such as termination insurance and risk management. The financial reward of better talent recruitment and retention in itself should outweigh any risk; this is before we consider the employer’s NI savings.
4. Size of company
Much has been written about salary sacrifice car schemes not working for smaller employers. However, in our experience, take up and satisfaction are much higher. Using a leasing company, any company can obtain significant discounts on vehicles and with more manufacturers becoming interested in the salary sacrifice market, the potential savings are likely to increase.
WITH A PROACTIVE APPROACH, 10% OF EMPLOYEES CAN BE EXPECTED TO TAKE ADVANTAGE OF SUCH SCHEMES IN THE FIRST YEAR 2. Complexity of introducing such schemes
This is perhaps the most disappointing reason for not looking at salary sacrifice cars, as many suppliers actually play up the complexities of such schemes to prevent new entrants to the market. This is doubly frustrating as the same suppliers will sometimes charge significant set up fees to implement schemes in smaller companies. In reality salary sacrifice is complex but it is equally complex for other benefits unless an experienced partner is sought. The complexity should not be a barrier to introduction as it is the supplier’s burden to meet.
3. The financial risk
Of course the costs involved in a salary sacrifice car scheme are significantly higher than some other salary sacrifice arrangements as it is a company car; but well-structured schemes
5. Take up rate
Some sacrifice arrangements, and indeed salary sacrifice cars, can have reportedly low take up rates – but with a proactive approach, 10% of employees can be expected to take advantage of such schemes in the first year. Indeed, we typically see take up increase across all benefits when a salary sacrifice car scheme is implemented. Of course, there are many companies for whom salary sacrifice cars would be entirely unsuitable, but make sure you make an informed choice. If you have high retention and employees earning above minimum wage, salary sacrifice cars could work for you.
www.talkbusinessmagazine.co.uk May 2012
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BUSINESS ANGELS FOCUS ON MONEY
Getting a guardian angel Angel investment is one of the most important sources of capital for start-ups and early stage businesses. Julie Crane, director of projects for The FSE Group, fills us in on this toughto-crack capital opportunity 39
he British Business Angel Association estimates there are approximately 15,000 angel investors operating in the current market, investing nearly £1bn per annum. When most people hear the term ‘business angel’, they usually think of Dragons’ Den. But how close to reality are the ‘Dragons’ and how do you find a business angel to invest in your business?
Angels or dragons?
The truth is that a business angel can be anyone who invests time and money in someone else’s company: the most common ‘angels’ are actually parents, followed by other family members and friends. So, the first place to look for an angel is close to home – especially in the very early stages of a new business. However, if you have the right type of business and serious growth ambitions, there is also an informal
venture capital market where private individuals provide high risk, early stage capital directly to new and growing business with which they have no prior connection, in exchange for equity (a share in the ownership of the business) – these are what we typically think of as business angels. Business angels are, just like the Dragons’ Den stars, high net worth individuals, usually self-made with substantial entrepreneurial and business experience, who are prepared to invest, on their own or with others, directly in entrepreneurial businesses. A typical business angel makes one or two investments in a three-year period, either individually or by linking up with others to form a syndicate. Of course, some business angels invest more frequently. They invest across most industry sectors and stages of business development, but especially in early
and expansion-stage businesses. Most prefer to invest in companies within 100 miles of where they live or work, although investors in technology companies tend to be prepared to travel longer distances.
Finding the right angel
Before looking for a business angel, the first thing you need to think about is why they would invest in you and your business. What does the investor want? Business angels are individuals and each has their own motivation. However, typically, angels are ultimately driven to achieve success and by the desire to earn a return on their investment, but many are also looking to be involved in the challenge of building a business, and will want to share their experience and be involved in key decisionmaking. They may be able to leverage their established network of contacts to help the business. While not always the case, most angels
www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON MONEY BUSINESS ANGELS
prefer to invest in a business that they know or understand, so many will invest in areas linked to their own industry or sector. Business angels may invest from as little as £10,000 to as much
have growth and profit potential, as evidenced by the credibility of the business model (how you make money), the business’ competitive edge or unique selling point and the characteristics and growth potential
THE ANGEL WILL WANT TO PAY A PRICE THAT REFLECTS THE VALUE OF WHAT YOUR BUSINESS IS NOW, NOT WHAT IT CAN DO as £750,000 in any one business. Where more than one investor is required, this may be done as part of a syndicate organised through a business angel network or an investor club.
Return on investment
The methods used to assess whether to invest in a business vary enormously. However, in order to deliver a return on investment, business angels are looking to identify business propositions that
of the market. In addition, they need to feel comfortable that the people running the company will deliver the plan, so they will take into account both the expertise and track record of the founders and management team, as well as the financial commitment of the founder. If you’re not prepared to risk your own money in your venture, it doesn’t give an investor confidence that you are committed and can deliver. Therefore, to be an attractive investment opportunity for a
business angel, a company must be able to demonstrate to the potential investor that it has all of the right attributes. However, having invested money into a business, in order to achieve a return on their investment, the angel will need a mechanism to get their investment back. So, in order to convert an attractive business proposition into an attractive investment opportunity, you need to demonstrate a clear and credible exit plan for the investor that will enable them to sell their shares in the business – usually within three to seven years of the initial investment.
What do you need?
Before looking for a business angel, you must also think about what you are looking for from their investment. Is it just money that you need? What do you need the money for? Business angels will typically not invest money
May 2012 www.talkbusinessmagazine.co.uk
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FOCUS ON MONEY BUSINESS ANGELS
in a business, unless it is to be spent on activities that will make a direct and positive impact on the growth of the business, and paying large salaries to the founding team is not usually included in this category. What proportion of your business are you prepared to give up in exchange for the investment? Does this reflect a realistic valuation for your business now? Even once you have found an angel who is interested, many potential deals fall through because it’s not possible to agree a mutually acceptable valuation for the business. Don’t forget the potential investor will want to pay a price that reflects the value of what your business is now, not what it can do once the investment is made – it is that growth in value, enabled by the investment, which will deliver the return to the business angel.
Get a head start
You also need to consider when to look for a business angel – the process to find an investor takes time and, even once you have an interested angel, it takes time to structure the deal and negotiate a mutually acceptable valuation, and then there is often a further significant gap before the deal is closed and the money received. So the advice is to start early – don’t leave it until the last minute when you are running out of cash as this
Reputable business angel networks are generally members of the British Business Angel Association and, as members, these networks and affiliated clubs have signed up to the BBAA Best Practice code of conduct.
Business angels can be a huge benefit to a growing business: they
MOST BUSINESS ANGELS PREFER TO INVEST IN AN AREA OF BUSINESS THAT THEY KNOW OR UNDERSTAND will not only make your business less attractive to an investor, but will significantly weaken your potential negotiating position. If you think you have an attractive business opportunity and that a business angel investor could be the key to unlocking the growth in your business, where do you find one? The best place to expose your proposition to a range of potential investors is through an established business angel network or investor club.
provide a cash investment to fund the growth of the business and, unlike a bank, do not require regular monthly repayments or interest that can place a drain on the cash flow of an early stage business, which in turn may slow future growth. However, business angel investment is not free money, and they will be looking for a share in the ownership of your business that they can, once the growth objectives have been achieved, sell at
a considerable profit. As mentioned earlier, many business angels invest more than just money: they invest time and effort in your business, and often bring relevant expertise and contacts that can add significant value over and above the value of the cash investment. However, in deciding whether to accept an offer of investment from a business angel, remember that chemistry matters: an investor is there for the journey with you, and that journey may last as long as seven years.
The FSE Group manages FSE Investor Networks, a BBAA member Business Angel Network, as well as Incito Venture, the first pro-female investor network in the UK
May 2012 www.talkbusinessmagazine.co.uk
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FOCUS ON MONEY LATE PAYMENT PENALTIES
It's payback time
In this tough economic climate, many companies are finding their bad debtors list growing by the day. Freya Zaiwalla, solicitor at Zaiwalla & Co., explains how to recover your money without losing your mind
hen you are owed money, it can become a tricky balancing act to avoid spending more time and cost on recovery than the debt itself is worth. This is especially difficult for small companies which donâ€™t have
check out their financial ability to pay. If it is a company you are contracting with, ask for its lastfiled accounts or check on the Companies House website that no winding up petitions have been filed against the company. For just
ALTHOUGH MAKING THREATS TO ISSUE COURT CLAIMS AGAINST A DEBTOR MAY DO THE TRICK IN SOME CIRCUMSTANCES, SOME MAY CALL YOUR BLUFF huge resources for chasing debts. Unless dealing with a longestablished client or business partner, before entering into a deal it is always good to be diligent and
a few pounds, you can also print off the companyâ€™s accounts. If it is an individual, subject to your discretion, you can ask for copies of their redacted
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LATE PAYMENT PENALTIES FOCUS ON MONEY
best, but even an email agreement or a handwritten note is better than nothing. Make the payment date(s) clear in the contract. Put in a clause that says you will charge interest on the amounts due if payment is received late.
If debtors won’t pay
Assuming you have sent reminders to the debtor and they have not responded, you need to consider how far you are willing to go to pursue the debt in terms of your time and costs. Most importantly, is the debtor worth pursuing – even if you spend time and money pursuing them, are they capable of paying? You might also need
they are free to make admission and offers in the knowledge that, if they can’t settle, those offers will not be used against them in court. Make sure you refer in open correspondence to the fact that without prejudice dialogue is happening – so if the matter goes to court, the Judge knows that an apparent lapse in communication is down to the existence of a ‘without prejudice’ dialogue. An alternative to issuing a claim in the court is to issue a Statutory Demand on the debtor. This is a legal notice used in cases of undisputed debts, which require the debtor to pay up within 21 days. If they do not, you can apply for a bankruptcy or winding
A PROPERLY DRAFTED AND SIGNED CONTRACT IS ALWAYS BEST, BUT EVEN AN EMAIL AGREEMENT OR A HANDWRITTEN NOTE IS BETTER THAN NOTHING to consider your relationship with the debtor, and your options should you wish to maintain that relationship. You may also not wish to get into a spat for risk of potential damage to your reputation in the market.
bank statements for the last few months, or alternatively do a credit check on the person, a service provided by a host of websites found on Google. Needless to say, your contract must be in writing. Make sure it's signed by the other party. We often have clients coming in to see us with draft contracts that were never signed. Although in English law an unsigned contract or verbal agreement can be recognised, it is a lot more difficult to establish than a clearly drafted written agreement. A properly drafted and signed contract is always
A letter from a solicitor is a good way to put pressure on your debtor. It shows that you are serious about pursuing your dues and it often takes just one letter to get the debtor to pay up. Arrange a fixed fee with your solicitor to pursue the matter stage by stage. At this stage it is worth thinking about how far you would be willing to go in terms of the legal process to recover the money. Although making threats to issue court claims against a debtor may do the trick in some circumstances, some may call your bluff. If you do not deliver on your promises, you may be viewed as making empty threats, which would weaken your position. If the debtor engages in correspondence with your solicitor, then it may be wise to consider sending a ‘without prejudice’ letter with an offer of an amount you will accept in place of the debt, or an offer to meet to try and resolve the issues. Genuine ‘without prejudice’ correspondence cannot later be shown to the court. The hope is that parties will settle if
up order against them. It is relatively easy to complete a Statutory Demand and send it to the debtor. However, it is imperative that you do not do so when you are aware that the debtor has disputed the amount or liability. If you do, the debtor can apply to the court to have it set aside and you may be liable for the costs. A Statutory Demand often does the trick and gets the debtor to cough up. If it does not, you should consider whether you do actually intend to wind up or bankrupt the debtor, as you will need to foot the costs of the necessary applications to the court and you may be at the back of a queue of creditors. The fact that you have served a Statutory Demand does not oblige you to commence insolvency proceedings against the debtor.
It is a matter of time and costs. Talk to your solicitors and ask for a fee estimate for handling the case. If it is a straightforward claim you may get judgment easily, which you can then enforce in various ways. Similarly, once you issue your court claim, the debtor may make you an offer to settle.
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FOCUS ON MONEY START UP VS BUY IN
Buyer beware According to a recent survey by BusinessesForSale.com, it’s a business buyer’s market. So if you’re thinking of going it alone, consider what’s on offer in your locality before starting from scratch
CASH-RICH BUYERS ARE SENSING AN OPPORTUNITY TO DRIVE DOWN ASKING PRICES
Of sellers whose businesses have been on the market for some time, 47% said they have had less interest in their business than expected, against 24% who reported a better than expected response. The survey, which canvassed the opinions and experiences of buyers and sellers from around the world, also revealed that many vendors were finding it difficult to close deals because of a scarcity of finance. Of sellers who had received serious interest in their business, 37% believed a shortage of credit to be hampering the sales process “to a significant extent”, while 33% suggested that the ongoing repercussions of the credit crunch were affecting their ability to sell their business. If many vendors are still finding it difficult to find buyers who can raise finance, then cash-rich buyers are sensing an opportunity to drive down asking prices in the absence of other bidders. More than a third (38%) of prospective buyers were expecting to find bargains because of the economic climate, while 29% had plenty of capital and were expecting to find bargains because banks are reluctant to lend for the purchase of businesses with a patchy track record. Nearly half (48%) of prospective buyers want a business with a good track record and are prepared to pay a premium for it, marginally more than those who would consider buying a struggling business if it’s realistically priced (45%). Around a third believe they would actually enjoy the challenge of turning around a
failing business, and just under a quarter prefer untapped potential to a profitable business with little room for growth. Asked how they planned to fund their acquisition, only 41% of prospective buyers were planning to approach a bank. Many are instead using – or at least hoping to use – seller financing, whereby the vendor effectively lends the money to the buyer and receives payment in installments. 15% of those polled were raising cash through private equity, and 7% through business angels, while 5% hoped to use government grants. 18% were at least part-financing an acquisition with capital from an existing business. 70% were expecting to use personal savings, while friends and family were either lending money or buying a share of equity in 16% of cases. 8% were re-mortgaging their home to generate funds. Asked to pick a maximum of three motivations for buying a business rather than starting a venture from scratch, buyers most frequently cited an immediate income, with 51% saying the prospect of generating profit from day one was appealing. 40% believed it was more cost-effective to buy everything – premises, brand, customer base, trained staff – in one go rather than growing a successful business organically. So if you’re thinking of buying a business – what are you waiting for? And if you’re thinking of starting your own, consider whether you might be better off finding a bargain business that’s ready to roll.
May 2012 www.talkbusinessmagazine.co.uk
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FOCUS ON MONEY AUDITS
A surprising number of businesses choose to have regular audits, even when they don’t have to. Robert Holland, a partner at James Cowper LLP, looks at the benefits of voluntary auditing for SMEs
Voluntary auditing: you know you want to…
urrently there are two triggers that mean a company does not have to have an audit: if its turnover is not more than £6.5m; and if its balance sheet total (i.e. gross assets) is not more than £3.26m. In future these are also likely to rise further. This therefore covers the vast majority of companies in the country. The process of an audit for this size of company tends to be what is termed substantive – it validates the closing and opening balance
No doubt in at least some cases it is a matter of habit or a sort of comfort blanket that they’ve always had; however, in most cases there is an explicit and positive choice made to have or retain the audit. Firstly there is the reassurance that somebody else has looked at your figures and is comfortable that they are materially accurate. This comes up frequently, even where the company is owned and managed by a finance professional.
A COMFORT BLANKET IT MAY BE, BUT MANY BUSINESS OWNERS WOULD RATHER HAVE IT THAN BE WITHOUT sheets and looks at and vouches as appropriate the transactions that occur in the period. The financial systems and controls in place are considered, documented and walked through to check that they operate as described, but the audit is not an exhaustive and detailed check of the systems and controls in operation, and it does not draw any conclusions on the competence of the staff who operate them. So why continue to keep an audit?
For example, Chris runs a printing and publishing business with two other shareholders that we audit, and turns over a couple of million pounds. His fellow shareholders run the production and sales functions but Chris is the finance director and overall managing director, and is a qualified accountant. Chris has always been reluctant to lose the audit as he likes to have evidence to show his perhaps less numerate shareholders that the figures are all in order.
Perhaps more indirectly, Philip has now sold his business but previously ran a niche marketing business which had some large multinational corporations as clients. Although they never insisted – and indeed never even mentioned that he had to have an audit – he continued to have one and sent his audited accounts to them to evidence his solvency and good standing. On a similar basis, Trevor ran a consultancy business and specialised in providing technical advice to public sector bodies, particularly local authorities and universities. Embedded in his contract terms for a number of these clients was a requirement that he had to supply them with audited accounts. Trevor knew that some of his competitors didn’t bother with an audit and still managed to survive and prosper, but simply didn’t want to run the risk that he might lose a contract for not being able to supply audited accounts. Some firms have an audit if they are considering selling some or all of the business. In these circumstances a potential purchaser could require the
March May 2012 2012 www.talkbusinessmagazine.co.uk www.talkbusinessmagazine.co.uk
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AUDITS FOCUS ON MONEY
evidence and additional transparency of an independent audit in order to substantiate the price. An audit can also help raise the credibility of a business looking to obtain additional finance on enhanced lending terms. Having such evidence to assist the lender with its own decision-making process can ensure a smoother process when the firm negotiates. Supplying a copy of the voluntary audit often also means that any deals will take less time and
circumstances and help you ensure that its benefits will outweigh the cost. There are, perhaps, less obvious advantages to an audit as well. In smaller companies, bookkeeping can be undertaken by staff who are not particularly qualified. By undertaking an audit, we have enabled them to avoid a potential disaster where the figures in the accounts bore no relation to their true position. Also, even where qualified accountants are employed, rules and
THERE IS THE REASSURANCE THAT SOMEBODY ELSE HAS LOOKED AT YOUR FIGURES AND IS COMFORTABLE THAT THEY ARE MATERIALLY ACCURATE therefore cost less. If a business has a specific lender in mind we recommend consulting them about what they would find useful and credible before buying in the service. There are various types of audits and one containing solid evidence for a bank or other lender may not be appropriate for other purposes. Your accountant can assist with choosing the most appropriate engagement for your
accounting treatments can change and their knowledge can quickly become out of date. Therefore having someone come in to look at how things are accounted for can ensure that the accounts are correct and possibly avoid problems later on. Finally some owners can feel nervous that they are not perhaps as financially sophisticated as they might like to be, and use the audit as a means of
double checking what their internal accounting staff are telling them. As far as we can establish, the experience of different firms varies considerably. We have always prided ourselves on our practical and no nonsense approach. We plan to complete what has to be done without fuss, and with the minimum of intrusion into the day-to-day activity of the business. As Trevor says: â€˜James Cowper audits me every year and provides me with the opinion I need as a contractual requirement. Beyond this, however, it also gives me comfort that my accounts function has run correctly, that my numbers are OK and that the profit and results shown by the numbers properly reflect how my business has performed.â€™ All good auditors can provide such a service. A comfort blanket it may be, but many business owners would rather have it than be without.
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FOCUS ON STRATEGY BEST PRACTICE
May 2012 www.talkbusinessmagazine.co.uk
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BEST PRACTICE FOCUS ON STRATEGY
Negotiate your way to success Having trouble negotiating? Clive Rich, one of the UK’s leading business negotiators, shares his boardroom know-how with TB
egotiation skills are crucial to any successful business. Despite a great business idea, negotiations are needed to secure a framework of deals with a variety of partners, from marketing and distribution to funding, working with employees and exit deals. However, negotiation skills are rarely taught, practised or even thought about. Businesses often focus on a lack of lending, the legislative environment, or tax incentives. As a result, they may focus on product development or cutting overheads. But nobody focuses on how much extra margin they could generate if they could improve the effectiveness of their negotiation skills by 10%. I’ve negotiated deals for and with some of the biggest organisations, including Sony, Yahoo, Apple and the BBC, as well as governments and entrepreneurs. Negotiation is often a challenge for under-resourced SMEs.
Fail to prepare and prepare to fail
SMEs and entrepreneurs are often not very good at preparing for negotiations – because they often don’t have much time or many staff to help out. I once attended a meeting between an SME looking for funding and a potential investor to offer support and advice to the small business. The founder chatted for around 40 minutes about his business before the investor asked how much funding he was looking for. The founder clearly didn’t know and, after stalling, he had to tell the investor that he needed to go away and make a few calculations before coming back to him with a figure. But his fate was already sealed, and he was never going to get any money from that particular investor. It was extraordinary that he arranged the meeting without considering what he wanted to come out of it. This illustrates just how essential preparation is in negotiation. You need to know who is on the other side, what’s the history between you, what’s your ideal position, what’s your bottom line, who has authority on each side – issues which are too important to leave until the heat of battle. If they are an investor, what sort of companies do they invest in, what’s their background? Entrepreneurs can create an advantage for themselves here. Larger deal partners may be more casual and therefore illprepared or (because they operate with larger teams) less well-organised.
SMEs often fail by thinking they can muddle through, so you must put in the groundwork beforehand. One SME with a lot of niche marketing power entered into a negotiation with a large multinational based on a precontract which valued the SME at $3bn. The multinational sent in armies of lawyers and accountants to do due diligence, no doubt intending to slash the price – but they were in for a nasty shock. The SME had spent 18 months preparing for the deal by sitting down with their own team on a regular basis, and asking a series of testing questions about their own company. They rehearsed by asking all the tough questions they could think of and working out the answers in advance. As a result, they knew their company inside out, and were able to deal with everything the multinational could throw at them – and ended up walking away with the best part of $3bn.
AS AN SME YOU ARE VULNERABLE FROM PEOPLE WHO WANT TO RIP YOU OFF BECAUSE OF YOUR SIZE Dealing with the tough guys
As an SME you are more vulnerable from people who want to rip you off because of your size. You should always have a plan B or be prepared to walk away from a deal. If you can’t, then it’s essential to go in with your eyes open. Don’t be tempted by an attractive upfront payment and take your eye off your own ball. I knew an entrepreneur who had worked very hard setting up his own business, and was approached by a large investment company. I was aware of them and warned him that they were fleecers. They offered him a nice sum of money for part ownership, but with a range of conditions which he might not be able to fulfil, and post-contract controls which took away his ability to run the company going forward. He asked my advice and I warned him not to do the deal. However, he did – and 18 months later he was sidelined out of his own business. There are three types of approach people take to a deal – a user, a loser and a fuser. The aforementioned investment company is an example of a user – someone who takes advantage of others. A fuser is someone
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FOCUS ON STRATEGY BEST PRACTICE
looking to bring both agendas together, which is the modern approach to negotiating. Losers are more concerned with the other side’s goodwill than protecting themselves. If you are dealing with a user, look out – don’t become a loser.
It’s all about attitude
Effective negotiators bring the right state of mind to the table – you should be confident and relaxed, and believe you can get what you need. If you have the wrong attitude, it will go downhill. If you are anxious, confused or worried, the other side will pick that up and push you harder. So, give yourself a positive talking to before you start and think of negotiations you have done that have gone well. Or bring along a colleague or expert who can make you feel stronger. Often getting a realistic view of your bargaining power is the key to feeling more confident – you always have more bargaining power than you think. Back up this positive attitude
ENTREPRENEURS OFTEN FAIL BY THINKING THEY CAN MUDDLE THROUGH with positive behaviour – using “I want” or “I need” is much better when you are making proposals than “Could I have”. Don’t beg!
Don’t get emotional
SMEs are often family businesses, which can lead to fall-outs with emotions running high – blood may be thicker than water but it’s usually hotter too. I worked with one business run by three generations of the same family, who couldn’t agree on how the business should operate and how to take it forward. It seemed to me that the only way these arguments could be resolved was by finding common ground which was more important to the family members than the issues on which they disagreed. Ultimately they had the shared goals of wanting to continue the business out of respect for their predecessors, and
for the sake of their children and grandchildren. Once they worked this out, their disagreements were easier to manage.
In negotiations, it’s important to recognise that both sides will have emotional needs, and identifying coinage will help you to address those needs. All negotiations are ultimately driven by the emotional needs of the
YOU ALWAYS HAVE MORE BARGAINING POWER THAN YOU THINK participants. Do they need reassurance, respect, a sense of belonging, a desire to achieve? You need to be able to work that out. Then you can deploy coinage to meet those needs, and get what you need in return. ‘Coinage’ is simply a concession that feels like loose change to the giver, but has high value to the other side because it meets an emotional need. These emotional payments are the currency which get deals done. Finding coinage requires creativity and imagination – exactly the skills which entrepreneurs should have in abundance.
Use the right behaviour
You need to identify who you are negotiating with. There are many different types of people – some are optimists, others are born pessimists. Some like to move towards solutions, others like to avoid solutions. Some people like options, others like a fixed process. You have to select the right behaviour for the right person. These different behavioural types can be spotted through asking questions, observing and listening, which aren’t natural skills for entrepreneurs. They are often so passionate about their project that they spend far too much time talking in negotiations, and not enough time listening and watching. As a rule of thumb you should not spend more than 30% of your time talking in any deal; the more you say,
TOP FIVE TIPS 1 Prepare: People often overlook this aspect of negotiation. Think about your desired outcome in advance 2 Tough Guys: Learn to protect yourself if you are forced to deal with tough guys. Don’t be naïve if you are dealing with a user 3 Attitude: Think about your bargaining power. You may have niche bargaining power in the form of expertise or information that the other side don’t have 4 Focus: Work out what the other side wants through asking questions, listening and watching – if you can identify and meet these needs, you will get back more of what you need in return 5 Behaviour: Are you dealing with a big picture person or a detail merchant? An optimist or a pessimist? Match your behaviour to the other person’s to have more impact
May 2012 www.talkbusinessmagazine.co.uk
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A Directory Of Quality Members Buying Goods Or Services From Each Other Without Using Cash
EASY AS 1, 2, 3 Visit our website: www.BartaClub.com www.linkedin.com/company/BartaClub www.facebook.com/BartaClub www.twitter.com/BartaClub Untitled-2 1
FOCUS ON STRATEGY MARKETING
What’s in it for me? Expert copywriter Annie Holder tells us why image is everything, and how adding value can win you new business
HAVE CONFIDENCE IN WHAT YOU DO. DOING BUSINESS WITH YOU DIRECTLY BENEFITS YOUR CLIENTS
Consumers are a picky bunch. They don’t really care what you do, they just want to know ‘What’s in it for me?’ They won’t part with a bean of their hard-earned cash unless they’re confident you’re worth it, so convince them. That doesn’t mean you’ve got to be the cheapest. You can be reassuringly expensive if you use the right language. Doing business with you directly benefits your clients. Believe that you’re worth the money in their pocket, and you’ll make them believe it too.
Adding value is the key
YOU’VE GOT TO COMBINE ATTRACTIVE APPEARANCE WITH A CAPTIVATING MESSAGE
Establish where you can add value, then publicise it. The benefit of using you might well be financial, but it’s just as likely you’ll be the most professional in appearance, on-the-ball with product placement, or simply the nicest to deal with. A little bit of everything combines to create your overall brand, from how your staff answer the phone to whether your service engineer tucks his shirt in, and the specialist materials you produce for advertising are the most important of all, as these are often your first contact with a potential customer.
It’s all about image
If your printed matter piqued their interest, the next place people will search is the Internet. How can you guarantee detection by a search engine? Surely you should cram your website full of relevant keywords that push you up Google’s rankings? Before you rush off and fill your home page with random words relating to your business, what’s in it for your clients? Keywords are great to get you on page one of a Google search, but if your website fails to engage with its intended audience, you might as
well forget all that SEO effort. You’ve got to combine attractive appearance with a captivating message.
If you give a potential client a leaflet about your business, is it likely to go straight in the bin? What can you do to make someone retain your marketing materials and act on the information they contain? If you know why clients choose you, you’ll know what to focus on, so ask your existing customers. Some will be driven by price or the hassle of having to find a new supplier, but many more will cite the ease of dealing with you, their trust in you to do a good job, the quality of your product or service. Prepare yourself for honest feedback and embrace the inevitable negatives that emerge. Criticism hurts, but helps you improve.
Get expert help
In business, nothing feels worse than wasting money you’ve worked so hard to earn. You spend on web hosting every month. Does your site get any hits? Your print bill is huge but leads are dwindling. Does your printed marketing consistently miss its target? If you don’t know why it isn’t working, get expert help to advise on how best to reverse a downward trend. It’s another bill to pay but it could make all the difference. Words are powerful tools: make them work for you. Annie Holder of is a member of Pure B2B – masterminding your business to the next level
May 2012 www.talkbusinessmagazine.co.uk
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WHY VIDEO IS IMPORTANT FOR YOUR COMPANY
There are a whole host of reasons we could tell you why your company needs to be using video on a regular basis, but there are 3 main things that stand out in the times we are in. I. Revolution The ﬁrst one would be obvious. It has to do with the tecnnological revolution and the advancement of social media. You don’t need to be a genius to see that the way we communicate has changed radically in the last few years, this has had an effect on the way we do business. Smart phones are so commonplace now that Youtube has become the second largest search engine (Google’s 1st).
III. Global and green
II. Video connects with people on an emotional level
These days we are encouraged and sometimes even forced to change our travel behaviour. This could slow your business down.
The most important thing for any company is your brand. It has to be something people are talking about. If done well, video has the power to move and audience, to excite, inspire them to buy a product or get behind a vision.
However, today’s technology enables high quality visual communication that can make us more productive and more effective in how we do business.
Effective communication is power. You want to connect to your customers, whether internally or externally, on a deeper level. We are often swamped with emails, memos and endless power point presentations.
Efficient visual communication means less costly and time-consuming travel and will reduce your carbon footprint. For example, a client of ours was to host an event with their international team. They wanted to fly in a team of 20 from various places around the world for a two day ‘all hands’ conference. The costs were in the tens of thousands. We suggested doing a video webcast for the main points, giving execs the chance to share with the opportunity for live feedback. We followed this with a series of videos explaining the vision for the year ahead and looking back to previous achievements.
When we want to search for a new product of learn about a brand, many of us will head straight to video to find out what it looks like and what others are saying about it. Video is everywhere and accessible to the masses no matter where they may be. Video on the web is growing exponentially and with the advent of mobile devices there has never been a better way to get your message directly to your audience.
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Feedback from this was fantastic and savings were substantial - which meant one happy customer.
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PRODUCTIONS 01/05/2012 14:10
FOCUS ON STRATEGY BRANDING & DESIGN
Design do, or design dodo? If businesses don’t invest in powerful design to adapt and evolve, they’re potentially heading the way of the flightless bird argues Rich With, our branding expert-in-residence
IT’S NATURAL, ECLECTIC – AND MILES AWAY FROM FASHIONISTAS, THE TOWIE SET, BLING AND FAKERY
Society is constantly changing, technology has more impact on our lives than ever, and business owners who don’t embrace it are going to get left behind. The signs are there – we’re moving from a consumerist obsession with buying stuff we don’t need, and looking for goods and services that last, have decent ethics and aren’t a drain on the environment. We’re more savvy with experience, design and technology, so brands must embrace this: recognising that if they fail to meet the demand for something different, wholesome and interesting, we will soon lose interest. Brands have to connect in innovative ways, utilising design in web, interactivity, augmented reality, smartphone apps and yes, print, to enhance the consumer experience. Take www.dollarshaveclub.com. The basic premise is simple – mail order razors – but it’s in the branding where this evolution is so noticeable. While others offer the same service, dollarshaveclub.com’s use of design gets as far away from Gillette’s and Wilkinson Sword’s as it can, creating something that’s zeroed in on the target market (cool, hip men unimpressed by corporate fluff). It wryly smirks at all the gradient blends, shiny text and ergonomic hyperbole synonymous with its rivals, and sets out its stall in a genuinely funny one-minute video with a neat hipster/ retro vibe that looks like they’re not trying too hard. Their design has changed the game - it’s witty, cool and ahead of everyone else. Exploiting the hip, crafting trend with rustic products, and establishing their responsibility credentials by helping out micro-businesses, www.notonthehighstreet.com has launched
its first TV ad. Essentially an online department store, the design – backed up by an enviable brand experience – perfectly hits its niche market. It’s natural, eclectic – and miles away from fashionistas, the TOWIE set, bling and fakery. By using existing infrastructures to distribute goods, and refusing to backhand celebrities for endorsements, both companies have created brands that would have been unlikely just five years ago. But it’s not just start-ups. McDonalds is pushing through a complete redesign of its restaurants, and investing $1bn in reinventing the brand experience. From the moment a customer steps through the doors to the moment they’ve finished their meal, design will play an integral part in that brand experience. Using natural materials in the restaurant, and coffee cups that bear more than a passing resemblance to Starbucks’, McDonalds is using design to maintain relevance with its client base in this postconsumerist society. If we as humans are continually shifting and adapting sociologically-speaking, then brands that don’t change to address this evolution are destined to go the way of the dodo. With a steady rise in the number of new businesses, survival just got a lot more complex. Invest in design, think of new areas in which to market your business, and evolve your brand.
May 2012 www.talkbusinessmagazine.co.uk
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R&H Design FP Advert.indd 1
Your 3-Month Journey to a Socially Successful Business The F7 Social Media Accelerator is a 7-step “doing” programme and support network for business owners, marketers and brand managers. Each 1-day module is presented by the UK’s leading specialist in their field, who have each helped some of the country’s top brands to turn their social media efforts into measurable, effective and profitable results … which is exactly what we deliver to you, over the course of the 3-month schedule. Workbooks and notes accompany each session, with actions and instructions along the way. We don’t believe in running seminars that build the hype, before leaving you alone to slip into old, or no habits at all … once you sign up, you’ll gain entry into our Private Facebook and Linkedin groups, as well as our regular Support Webinars, Twitter chats and Google Hangouts – The F7 community of attendees provide vast amounts of support and collaboration to each other, long after the live event schedule has completed. Whatever industry you’re in; whether B2B or B2C, retail or service-based, we’ll show you how to do it, market it more-efficiently, for more people than ever before.
Registrations now open for our next Programme, starting May 14th. Here’s what previous delegates have to say… “Having started the F7SM programme in March 2012, I am already seeing results. The team has compiled a clever, innovative programme with an engaging approach. I am supported between training days by excellent teleconferences, vlogs, tweet-ups and personal messages of support. Loving the decision to give the time to this.” Dinah Liversidge, Business Mentor “I’m currently on Matt Hodkinson’s F7 Social Media Programme and I highly recommend it to anyone looking to up their game in the social media world. He’s not only very likeable and approachable, but he has a talent for delivering his informative material” Nigel Camp, Video Production Specialist
Call us today to speak to an F7 Mentor about what the programme could do for your business! 01932 500 501 | f7social.com | @f7social | facebook.com/f7social | youtube.com/f7social
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SOCIAL MARKETING FOCUS ON STRATEGY
Learning to listen Remember the old adage, two ears, one mouth? Chief listening officer at Influence Agents, Matt Hodkinson, suggests businesses learn how to listen rather than shout in this, the social media generation
“I don’t know what to write, and why would anyone want to listen to me anyway?”
WHAT IS IT THAT WILL BEST CONVEY YOUR MISSION AND VALUE PROPOSITION TO ANYONE WHO CALLS?
Not the self-conscious ramblings of your humble author, rather one of the most common statements I hear from business owners when considering their use of social media. With millions of potential readers, writer’s block becomes prevalent. For many, the online world is already far too noisy, and with the growing number of users and the duplication of content between platforms, it’s getting even noisier. The good news is that there’s a solution: social media monitoring tools come in a variety of shapes and sizes, and allow you to search the social web for conversations about your industry, products and services, or people. There are many great uses for this technology – and a better understanding of your customers’ needs is as compelling as any. Before you start though, arm yourself with the information you’ll need in order to make best use of the opportunity.
Know your business
FOR MANY, THE ONLINE WORLD IS ALREADY FAR TOO NOISY
List your products and services: any names and keywords your customers may use in conversation. This will be based on your knowledge of the business, so if you get the opportunity, ask your customers what their own perceptions are. Use tools like the Google Keyword tool to run an analysis of your website, to see which keywords the Google search bots deem most prominent on your pages.
Go find your market
Free social monitoring tools, such as Google Alerts and SocialMention, allow you to search as you would in a standard search engine and get near-instant information about the most active and influential content authors, as well as the keywords which appear most often in conversation. Very quickly, you can build a detailed picture of the issues facing your target market and the solutions they seek. In receipt of this valuable insight, you’ll be left in no doubt as to what tweets, status updates, blogs and comments will most resonate with your desired audience.
Be prepared for results
Soon after you start to answer the calls of those who crave your help, you’ll be faced with the pleasant dilemma of how to respond to the reactions, questions and enquiries about your offering. If you’re fortunate enough to cause such a reaction, be sure to know your pitch. What is it that will best convey your mission and value proposition to anyone who calls? Be sure to have a version, too, that will fit inside a 140-character tweet, including the caller’s handle. Start to build a culture of listening into your business. The socially successful business uses the online space not as a billboard on which to advertise their services, but as a means to create conversation.
www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON STRATEGY CLAIRE YOUNG
Ladies and gents, put your hands together for our new columnist, star of The Apprentice Claire Young. In her first offering, she tells us why taking a risk was the best business move she ever made
I am the straight talking, no-nonsense business woman who is known for reaching the final of BBC1’s The Apprentice. Lord Sugar nicknamed me a rottweiler for my tenacious attitude; I survived a record number of final three boardrooms, battling it out against ‘Britain’s best business talent’ and I most definitely wasn’t going to give up. I am incredibly driven, ambitious, never go for the easy option and am like a dog with a bone if I want to do something. So even though being compared to a big hairy attack dog wasn’t something I ever dreamed would happen, it’s probably a fair analogy. Before The Apprentice I’d graduated from Bristol University with a science degree – not
I screamed at the TV how useless the candidates were and that I could do a better job. Millions of people around the country do the same thing, yet very few actually apply for the show. One of my biggest bug bears in life is people who moan and gripe but do nothing about it. I wanted a challenge, an experience which money couldn’t buy, and I wanted to test myself – so in a moment of insanity I walked away from a very secure career and into a reality TV show. A high risk strategy. I have reaped the benefits of taking that small step a hundred times over, and I’m forever grateful to the Apprentice team and Lord Sugar. I have been thrown into the media spotlight, gone
I REALISED I GOT ZERO FULFILMENT FROM MY JOB business or economics – and after applying for 83 jobs, I entered the world of business. The initial appeal of this sector was the generous graduate starting salaries (I was sick of being a broke student), and the challenge of learning about something new. I spent the next seven years grafting 24/7 and climbed the FMCG career ladder. I worked for L’Oreal in marketing, Colgate Palmolive in sales, and in retail buying for the global beauty giant, AS Watson which acquired Superdrug in the UK. At the age of 27 I breathed long enough to give myself a quick pat on the back for achieving what was perceived as great success: however, deep down I was bored stiff. One day I was sat at my desk and had a ‘my whole life flashed before my eyes’ moment – probably some sort of early mid-life crisis. I decided then and there that I didn’t want to spend the rest of my life being chained to a computer, slogging my guts out for someone else and achieving no real emotional engagement with my work. Once I got past the high salary, nice company car, beautiful working wardrobe and eating in great restaurants, I realised that I got zero fulfilment from my job. I think many people feel like that, it’s just difficult to have the confidence to make the jump. Around the same time, the finger of fate must have been waving in the form of Lord Sugar. As I settled down to watch series 3 of The Apprentice,
from employee to a business owner, and run my venture, School Speakers, among other projects. I am incredibly proud to visit No. 10 to discuss young people and enterprise and women in business, and opportunities cross my path which even sometimes make me shut up! I may have lost The Apprentice title to Lee McQueen, but I’m the happiest I’ve ever been and for me that is worth more than a £100k job.
CONTACTS: www.claireyoung.co.uk www.schoolspeakers.co.uk
May 2012 www.talkbusinessmagazine.co.uk
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FOCUS ON STRATEGY ONLINE MARKETING
In the driving seat Fancy driving more traffic to your website? Of course you do! TB columnist Stefan Boyle argues that offline marketing can be the best way to push your online strategy to the next level
e all love traffic to our websites, don’t we? If you are still of the belief that if you build it they will come, then I strongly advise you to re-assess your strategy. I have seen many websites fail to live up to expectations when small business owners proudly watch them go live and then sit and wait for the phone to ring off the hook. Unless you are very lucky or already had lots of regular traffic, it just doesn’t happen. Traffic generation is a relentless process that involves a whole range of techniques, including search engine optimisation, email marketing, pay-per-click, search engine marketing, PR and social media.
WHAT YOU A RE GIVING AWAY MUST NOT BE TOO SALESY, BUT GIVE REA L Know your audience PERCEIVED So the question is, which is the best channel VALUE to use? Of course the short answer is: use
every channel to maximise your opportunity to get every visitor. But we all know that different industries have particular favourites, depending on where your customers hang out, by which I mean what websites they visit, what magazines they read, what exhibitions they visit and so on. Firstly, if you don’t know this or haven’t analysed it, then you probably need to get on the case. If you don’t know where or how to reach your potential perfect
customer, how on earth do you start? Email marketing used properly can send traffic quickly and at low cost, though email open rates are dropping. Social media marketing offers huge potential – I am a big fan of building your community online, but it takes relentless effort to make it work. SEM has varying degrees of success. Pay-per-click can be expensive and wasteful if you don’t really know what you are doing, and banner adverts can vary in effectiveness.
li e e y f
There is a view that on and offline marketing doesn’t mix well, but for me, offline marketing still has a crucial role to play in the marketing mix. I’ve noticed that the level of direct mail I receive both personally and to my business has dropped significantly over the past couple of years. Times have changed. That same barrage is still there, it’s just digital now and it’s hitting your inbox or making your spam filters work overtime.
Everyone loves a bargain
If you want to know a little more about using Direct Mail to drive web traffic, here’s a few ideas to point you in the right direction: Firstly, the all-important factor, like with almost all marketing, is a strong, compelling
May 2012 www.talkbusinessmagazine.co.uk
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ONLINE MARKETING FOCUS ON STRATEGY
offer. Don’t just say ‘find out more on our website’. You need to give people a powerful reason to go to your site; one of the most successful ways is by offering something for free. To make it compelling, it must be your best stuff, not something you are trying to get rid of. Special offers, try before you buy, vouchers, and buy one, get one free-type deals all work well. Most importantly, what you are giving away must not be too “salesy”, but should give real perceived value, which in turn can give you a strong opportunity to build trust. So if you are promoting a website address specifically to drive traffic from a direct mailpiece, don’t make the URL too long or too complicated. Remember: your potential customers are not going to be able to click a link, but have to physically type the address. If you choose a landing page as an extension of your website, make it something short like “yourwebsite/ dm123”. Alternatively, you can also make
the choice of using a unique URL, such as “dm123.com”, and then design that page with a direct call to action.
Keep it simple
I often get asked which mailpiece format is most effective, and the short answer is it’s impossible to say. Different campaigns have different results depending on so many variables. The only way you can know what works best is to test and measure everything you do. If your campaigns are designed so that the key message and call to action is clear, and the offer you are making is of massive perceived value, then your chances of success increase dramatically. The simpler and more valuable your offer, the better. Finally, the biggest marketing rule is equally important when it comes to direct mail: test and measure, learn and repeat!
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CORPORATE VIDEO FOCUS ON STRATEGY
A video is worth a thousand words In a digital age, people expect even the humblest company to tell its story through the magic of moving pictures. We talk to Mark McCarthy, MD of Sparky Media, about the importance of the corporate video
n these tough times, with concerns of a double-dip recession, soaring inflation rates and worldwide financial instability, it’s very tempting to see something like a company video as an unnecessary extra. After all, cutting the corporate film isn’t going to have a direct impact on your profits, is it? And potential clients aren’t going to notice something that’s not there, right? Wrong.
to know more about you. More than just your prices, they want to get a feel for who you are – trustworthy? Trendy? Exclusive? This should come across partly through the look and feel of the website, the style of the content and the copy you have chosen to include. But having a video on your site, even one just a few minutes long, can tell your story far more effectively than words alone.
THE REALITY IS THAT A VIDEO IS ABOUT MUCH MORE THAN SIMPLY NUMBER OF HITS Video has never played such an integral part in brand, image and marketing. It is the way a company tells its story. It is the way a company expresses who it is and what it does. It is a visual tool which cannot be underestimated in showing the world what you are all about. Since the dawning of the age of YouTube, viral online marketing has become a massively powerful tool in any company’s arsenal. You may be thinking that, with all the thousands of online voices screaming to be heard, what’s the point of adding your own to the mix? But the reality is that a video is about much more than simply number of hits. When a possible client heads to your website, it is because they want
‘In today’s multi-platform business climate, it’s vital for businesses of all sizes to be relevant, seen and promoted with high quality video content,’ says McCarthy. ‘Every company needs to showcase who it is and what it can offer people. Viral promotion is far more important than people realise.’
thing to be slashed. However, this is short-term thinking – if you want your business to survive, let alone thrive, it pays to keep promoting your services even when times are hard. ‘Do not be intimidated by cost,’ agrees McCarthy. ‘You can get a good looking film for a small budget these days. It’s important to consider budget, but we can always do something for everyone.’ If you do decide to take the plunge, what should you look for in a video production company? McCarthy advises: ‘Look for a company which offers everything, which invests in good equipment. ‘The first step is to go and see the guys. The most important thing is to get on, so make sure you go and see them.’ So there you are. A video really is worth a thousand words: don’t neglect to tell your story.
EVERY COMPANY NEEDS TO SHOWCASE WHO THEY ARE AND WHAT THEY CAN OFFER Perhaps you have already realised how important video content is. So what’s stopping you? Undoubtedly money. Tightening the belt in an effort to keep costs down means that marketing budgets are often the first
www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON STRATEGY OLYMPIC UPDATE
It’s all Greek to me... With thousands of non-English speakers arriving in town for the Olympics this summer, Shawn Khorassani from translation company Prestige Network advises on how you can make the most of business opportunities
ith the 2012 London Olympics fast approaching, businesses across the UK should start preparing for the influx of non-English speaking spectators, which will have a major impact on start-ups and SMEs. In order to cater for the predicted flurry of visitors, both in and outside London, and turn the flow of visitors to your advantage, there are a few things you should consider.
Get your message out there
Make a transport action plan
The influx of tourists, athletes, officials, sponsors and international media offers a massive potential source of business – research earlier this year suggested the UK would benefit from a £750m consumer spending boost in the seven-week period. Although this is great news for businesses, it will cause a massive surge in traffic so it’s important to put an action plan in place to ensure staff, suppliers and visitors can get to their place of work. It’s well worth looking into if deliveries and collections will be affected due to congestion.
You may have the best product or service on the market, but as a small start-up or SME you may be fighting to get your message across. As VisitBritain predicts nearly 900,000 fans could arrive for the London RESEARCH HAS SUGGESTED THE UK Olympics, not all of whom are English-speaking, you WOULD BENEFIT FROM A £750M will need to make sure your product or service shines. CONSUMER SPENDING BOOST
BROCHURES, LEAFLETS AND WEBSITES IN LOTS OF DIFFERENT LANGUAGES SHOWS YOUR COMPANY WELCOMES VISITORS It’s therefore highly important to make sure nonEnglish speaking visitors are aware of what your company does. If your marketing or information messages are in multiple languages, your business will stand out from the crowd and your business will reap the benefits. The Olympics can also be a great tool for your marketing, and many businesses are using it to show their support and to display that now is a time to be proud of Great Britain. Communicating your marketing literature, such as brochures, leaflets and websites, in lots of languages shows your company welcomes visitors even though you’re proud to be British.
London-based businesses should also be aware of the heavy traffic and the planning restrictions of the Olympic Route Network – a system designed to get athletes, officials, VIPs, sponsors and media to events on time. The Olympic Route Network will have a direct impact on some businesses.
It is likely that many staff will have issues accessing their place of work; it may be worth exploring the option of flexible working or giving your staff the option to work from home. Just remember to check Internet Service Providers and discuss bandwidths as they are likely to have more demands on the system due to the higher demand thanks to the Games.
May 2012 www.talkbusinessmagazine.co.uk
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CUSTOMER SERVICE FOCUS ON PEOPLE
Service with a smile Knowing your customers inside out is key to delivering excellent customer service says Wayne Lysaght-Mason, managing director of IronmongeryDirect Know your offer
Be very specific about what your focus is; that’s about the type of customer you provide a service to and your product base. Significant understanding of the marketplace will help set you apart and establish you as experts in your field. At IronmongeryDirect for example, we never set out to be all things to all people: with this statement in mind, we consciously exclude products such as power tools, electrical and cleaning products, to enable us to concentrate on what we do best. We’re crystal clear about what the offer is.
Be visible and available
This not only relates to ensuring that your customers know about
need from an ideal supplier. Our customer base in particular saw the benefit of the 7:30pm cut-off on orders for next-day delivery. This sort of insight from customers ensures that your investments are profitable as opposed to “nice to haves”. Striving to improve the customer experience can help you gain market share. Monitoring and acting on your own key performance indicators, but actively questioning processes at every stage, is essential to continued growth. And, if your marketing material says you ‘welcome customer feedback’, then act on every comment you receive. Obtaining and responding
CUSTOMER SERVICE SHOULD BE VERY MUCH AT THE HEART OF YOUR THINKING AND APPROACH you and can find you, but also that you work in the way they want you to. IronmongeryDirect started out as one trade counter in effect. Now our customers can browse our catalogue, look at us online and order from our website – and yes, they can still pop into our Basildon HQ and find a trade counter. But the majority of our orders are taken online or over the phone, as this is the preferred method for most of our customers, so it is imperative that we offer this service.
Value continued insight
Our Customer Insight programme includes quantitative research, which helps us understand customer perceptions and gauge expectations of what they really
Do as you say
to customer feedback and adjusting operational systems and procedures accordingly can benefit the business as a whole as well as gaining repeat business. Again, adapting to meet customers’ needs is crucial, and getting it right first time eliminates customer frustrations, reduces time wasted and promotes loyalty.
Keep it simple
Once you understand and perfect your core service offerings, keep it simple. Delivering on a promise of next-day delivery and securing repeat business is central to our business model; and we have to keep on doing it. A satisfied customer is much more likely to choose you over your competitors, remain loyal and recommend you. Concentrate and be passionate about what you do best.
Make it effortless
You need to create differentiators from your competitors and reasons for customers to keep coming back. The temptation during a recession is to lower overheads and cost. While this is a good business discipline, it should only be in non-essential areas that you make these changes. I believe that you should always be investing in areas that improve customer loyalty and satisfaction. This can include technical advice and expertise, and anything else that gives your service a personal feel. It’s been a difficult time for small businesses, in particular in the construction sector, our core market. An effortless and efficient approach to business will help not only retain customers but attract new ones.
CONTACT: www.ironmongerydirect.co.uk www.talkbusinessmagazine.co.uk May 2012
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RISK MANAGEMENT STRATEGY FOCUS ON PEOPLE
The risk factor Andrew Smart, CEO and founder of Manigent, suggests the focus of strategy execution must move from ‘are we hitting our numbers?’ to seriously considering risk In the wake of the credit crunch and continued economic uncertainty, organisations need to think about strategy differently. Taking a ‘performance-only’ approach to strategy execution won’t work anymore – they must integrate risk management as a core part of their strategy execution process and management conversations.
A little history
IN THE WAKE OF THE CREDIT CRUNCH, THE QUESTION MUST BE ASKED – IS IT TIME TO MOVE THE MANAGEMENT CONVERSATION ON?
In 1992, Harvard Business Review published The Balanced Scorecard – Measures that Drive Performance. This article brought the concept of the Balanced Scorecard – with leading and lagging indicators and a balance of financial and non-financial indicators – to the forefront of management thinking. The Scorecard and its Strategy Map have come to dominate management and academic thinking around enterprise performance.
Time to change the conversation?
The success of the Balanced Scorecard concept and the value that it has added to organisations is impressive. However, in the wake of the credit crunch, the question must be asked – Is it time to move the management conversation on? The Balanced Scorecard is essentially a ‘performance-only’ strategy execution tool. It suggests that if an organisation is able to clearly define and communicate its objectives, and measure progress towards achieving them, then it will see an improvement in strategy execution. While this is a simple summary, it highlights a fundamental problem with the Balanced Scorecard theory. The trouble is risk is not embedded in the concept, so we need to move the strategy execution conversation forwards. By including
risk and risk appetite in this process, organisations will be able to sustain strategy execution more successfully.
Changing with the times
So, if risk is going to be incorporated into the strategy execution conversation, how? How do we take risk and risk appetite, which are concepts often surrounded by mystery, and provide an understanding across all levels and functions of an organisation? To achieve this we must use the language of strategy and risk appetite. During the formulation process, executive and strategic planners will consider the risks related to the various choices available. Rarely do they get translated, monitored and managed during the execution phase. The application of risk appetite is challenging. However, using the language of strategy can make the concept meaningful and provide a framework to apply it to during the execution of strategy. This can be achieved by using the business drivers which underpin your organisation’s strategy, to frame the definition of your risk appetite. Business drivers are vital factors that influence the success or otherwise of your business. Defining risk appetite based on the same business drivers that underpin the strategy of the organisation helps ensure that objectives and performance targets are set at levels that do not promote unacceptable risk-taking. This results in a more sustainable strategy, enabling risk appetite to become a central part of the strategy execution conversation.
www.talkbusinessmagazine.co.uk May 2012
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STAFF ATTENDANCE FOCUS ON PEOPLE
All present and correct Business development director of Auto Time Solutions, Christian Berenger, argues that employee ‘presenteeism’ can have a damaging effect on British businesses
he ongoing volatility of the UK economic climate has meant the topic of saving and surviving the downturn is still a prevalent issue for many businesses. With job cuts remaining a real threat, many employees are feeling increasingly conscientious about spending more time in the office. But this is leading to a growing trend of needlessly working excessive hours, even through illness. On the face of it, improved attendance and reduced sickness costs may give cause for celebration, but the reality is that so-called ‘presenteeism’ can have a really damaging impact through lost productivity, infection of co-workers and a decline in performance. Indeed it is widely suggested that the cost of reduced productivity, caused by employees feeling obliged to attend work when they shouldn’t, could be up to three times higher
absence. By searching for absence trends, individual managers are able to measure its overall impact on the business and rectify any issues before they get out of control. However, in contrast, it is far more problematic to account for any losses incurred by a worker who is at work but not performing to their full capacity. Managers often assume that if a worker is fit enough to attend work, then they are fit enough to carry out their role in a productive manner. Yet their performance may be hampered by a range of underlying issues.
A problem within?
When attempting to address the underlying issues associated with ‘presenteeism’, employers may be surprised to learn that in most cases they may actually be contributing to the problem themselves, in that the working
EMPLOYEES FEEL AN OVERWHELMING NEED TO PUT IN MORE HOURS SIMPLY TO PROTECT THEIR JOB than absence costs. For most organisations, the impact of ‘presenteeism’ is difficult to measure and subsequently ignored as, unlike absenteeism, it tends to fall under the radar. When monitoring staff absences, management is able to calculate the days that workers are away from the office and search personal attendance records for patterns of
culture embedded in the organisation may be encouraging staff to work excessive hours and feel pressured to be in the office at all times. Indeed, there remains an outdated perception in UK business that employee performance is primarily measured by time spent in the office – rather than by results. In cases where workers are
genuinely unwell, it may be that they feel unduly pressured to attend work due to strict attendance policies, or because they feel a sense of guilt for taking time off work. While some employers may say that someone working at 50% capacity is much better than them not being there at all, the reality is that they risk spreading illness to other workers in the office and their under-performance can have a damaging impact on the rest of the business. Essentially it can be counterproductive and, ironically, could even lead to higher levels of absence through sickness in the long-term.
www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON PEOPLE STAFF ATTENDANCE
A flexible approach
To help curb a culture of ‘presenteeism’, organisations need to realise that being in the office is no longer relevant for many professionals and instead need to make a serious commitment to flexible working initiatives. Permitting people to start and finish work at times to suit their personal preferences, or to work at home reduces the likelihood of ‘presenteeism’, as it empowers staff to take ownership and responsibility for their work time. By putting staff in control of their working time, they are likely to feel more motivated and productive during their working hours. Popular flexible working initiatives include part-time work, compressed hours (where employees work their standard hours in fewer days), job share and remote working. Flexible working has been a buzz word in business for the past decade and its benefits are widely accepted, yet the management challenges it presents continue to inhibit its expansion. However, employers
can gain comfort from the fact that the latest workforce management systems are now capable of far more
is that they can help to change workers’ attitudes towards absence. All too often, employees attend work when genuinely ill because of an instilled sense of guilt, while others may be worried about the stigma associated with taking too many days off. In addition to assisting with the accurate management of staff time, the latest web-based systems offer self-service functionalities, which allow employees to access their personal record and check holiday balances and request personal leave without having to speak directly with their manager. This avoids any embarrassment that may be associated with personal issues, enabling them to use their bank of days however they wish. Workers feel independent and liberated to take time off rather than pressured to be at work. The current condition of the UK economy is to blame for the increasing trend of ‘presenteeism’, as employees feel an overwhelming need to put in more hours simply to
PRESENTEEISM CAN HAVE A REALLY DAMAGING IMPACT THROUGH LOST PRODUCTIVITY complex functions, which allow managers to take a more holistic approach to the way they manage their staff. Recent technological developments mean they now offer web-based and mobile time and attendance applications, which can be customised to allow employees to record their start and finish times from biometric terminals, laptops, tablets and even mobile phones. For many workers, this renders the daily commute to the office virtually unnecessary and allows managers to confidently mobilise their workforce and be increasingly flexible in their working patterns.
protect their job. However, although it may make people feel more secure in their job, there is no evidence to suggest that working consistently long hours results in increased productivity. Quite the opposite in fact. Instead of rewarding good attendance and discouraging absence, employers need to look more closely at the relationship between health, presence and performance. An environment which has good management practices in place but where workers are in more control can ultimately help to improve motivation, job satisfaction and overall business efficiency.
While time and attendance solutions can help to monitor flexible working patterns, perhaps more important
May 2012 www.talkbusinessmagazine.co.uk
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INSURANCE FOCUS ON PEOPLE
The kids are alright? British yob culture can cause a headache for SMEs says Tara Kneafsey, SME director at RSA, the UK’s largest commercial insurer
MEs are the backbone of the British economy, generating an estimated annual turnover of £1,500bn. Their success is inextricably linked to economic recovery, yet the knock-on effects of civil unrest – such as the riots seen across the country last year – are doing little to help stimulate the financial growth of SMEs. The impact of anti-social behaviour on small businesses should not be underestimated.
ranked highly – affecting a staggering 80% of those questioned. The average cost to companies in 2011 also varied according to the size of the business. While micro- and medium-sized businesses experienced losses of £18,000 per business on average, small businesses were considerably better off, with costs of just over £1,500 on average. This is a particular concern given the current challenging economic climate.
IN 2011, YOB CULTURE AFFECTED MORE THAN A THIRD OF MICRO BUSINESSES, ALMOST ONE IN TEN SMALL BUSINESSES AND NEARLY A QUARTER OF MEDIUM-SIZED BUSINESSES As an insurer with a focus on SMEs, at RSA we’re concerned with issues like this that are increasingly causing big problems for small businesses. That’s why we commissioned research to examine the impact of yobbish behaviour on businesses of all shapes and sizes up and down the country. Our research showed that in 2011, yob culture affected more than a third of micro business, almost one in ten small businesses and nearly a quarter of medium-sized businesses. Although the level of exposure to yobbish behaviour naturally varies from business to business, broken windows and graffiti are the two most common types of disturbance experienced. For smaller businesses, however, petty theft also
What’s encouraging though, is that most businesses expect the situation to improve this year. Micro-, small- and medium-sized businesses all anticipate the impact per business to be between £12,000 and £14,000 on average. That’s good news for micro- and mediumsized firms, but significantly less welcome news for small businesses. The importance therefore of ensuring that a business has the correct level of protection in place should not be underestimated. Safeguarding against such eventualities is crucial to business continuity, and it can be done quickly, easily and cost-effectively via a range of simple measures that minimise the likelihood of such incidences occurring in the first place.
Top five ways to protect your business:
1 Review access to the premises – for instance, remove features that make it easy to access unauthorised areas, or consider using anti-climb paint on surfaces 2 Removing graffiti quickly will help to deter further acts of vandalism 3 Consider external security lighting to maximise surveillance and light up hidden or secluded areas 4 Fit grilles or shutters to the front of premises to deter smash-and-grab thieves, or bollards to deter ram-raiders 5 Make sure you have a sufficient level of insurance cover in place to protect your business against acts of vandalism and petty theft
CONTACT: Read more about RSA’s research into the impact of yob culture: www.news. rsagroup.com/pressrelease/view/1047 www.rsagroup.com www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON PEOPLE HUMAN RESOURCES
Helpful HR To outsource or not to outsource, that is the question. Stuart Hearn, director of plusHR, talks us through the pros and…well, pros, of outsourcing HR More than meets the eye
There is a common misconception that the outsourcing of administrative tasks will result in shortcomings within the organisation in specialist industry knowledge. Arguably, and even counter-intuitively, the outsourcing of administrative tasks can actually increase specialist knowledge and skills within organisations. The outsourcing of processbased activities allows in-house HR staff to focus on more strategic, specialist activities, moving them away from being generalist operators to become specialist professionals
differentiate themselves on quality, specialism and breadth of service, rather than simply cost and efficiency. Breadth of service is particularly important for small organisations and for the increasing number of public sector bodies who are carving out specific departments or services into independent organisations – for example, social enterprises. Another common misconception is that businesses look to third-party solutions to carry out tasks and deal with operations that, in more prosperous times, would have been
MANY OF THOSE OPTING FOR OUTSOURCING ARE START-UPS OR ORGANISATIONS WHO ARE ANTICIPATING RAPID GROWTH in areas such as reward and compensation, talent management and employee relations. The outsourcing industry itself therefore plays a critical role in the current economic climate. By creating a new range of skills and careers in areas such as process excellence, HR technology and information management, it is providing employees with the opportunity to develop the necessary skills to excel in the sector. In the days of ‘generalist HR’, such expertise was rarely found within organisations. Outsourcers are developing a pool of specialist talent in these areas, as well as improving skills in ‘softer’ areas, such as customer service. Surely this can only be of benefit to both organisations and to the HR profession as a whole?
dealt with internally. This assumes that most organisations turn to HR outsourcing to save costs – but actually this is rarely the case. Indeed, cost-saving is rarely cited by clients as a primary reason to outsource – most clients actually wish to improve the quality of their processes, increase compliance, implement new technology and build a flexible HR model that can scale up and down rapidly to meet business needs. Interestingly, many of those opting for outsourcing are start-ups or organisations who are anticipating rapid growth, rather than companies wishing to downsize and reduce costs. For these clients, scalability and breadth of services are primary drivers Outsourcing really isn’t all that it seems!
Quality over cost
Outsourcing now means something very different to how it was defined before the economic crash. Outsourcers must
May 2012 www.talkbusinessmagazine.co.uk
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FOCUS ON PEOPLE RECRUITMENT
Britain’s got talent: make sure you find it
If you want to be the best, you have to employ the best. Apprentice winner and founder of Raw Talent Academy, Lee McQueen, guides SMEs through recruiting talent without breaking the bank Despite the difficult economic conditions, there are businesses that are growing from strength to strength all the time. With success comes expansion, and with expansion comes recruitment. Recruitment is of paramount importance to SMEs and startups; often there isn’t a huge amount of money to play with, and companies must remember to stay as lean as possible to keep costs to a minimum and get their appointments spot on.
THERE IS A HUGE POOL OF TALENTED YOUNG PEOPLE WITHOUT A DEGREE All jobs require different skills, but across the board there are key qualities that SMEs should look out for when taking on staff. Small businesses should always look for people who are flexible. Flexible employees will take on more of the everyday tasks themselves, potentially saving the company paying an assistant to do it. Loyalty is also hugely important. You should look for people who
are ambitious but want to move up the ladder and grow the business alongside you. Always ask people about their career objectives, and find out what they want to be doing down the line, then think about how closely matched those objectives are to your own. With a lack of graduate jobs, there are some talented degree holders out of work, while equally, with the rise in tuition fees, there is a huge pool of talented young people without a degree. Companies should react to this and be more flexible about their recruitment policy as a result. Many have a rigid graduate scheme that has been in place for years, but perhaps now they should be looking to be more adaptable in the way they recruit, so as not to miss out on the best. Uncovering these people requires flexibility in your approach to recruitment. At Raw Talent Academy we put people through a number of tasks in an audition for a job, and auditioning is something that more companies should consider, as it is a great way of finding out more about the
candidates. Often there is little scope for getting an appointment wrong, and an audition process can help businesses make the most informed decision. There is often an element of apprehension about using a
LOYALTY IS HUGELY IMPORTANT recruitment agency. Obviously they cost, but the benefits far outweigh the price. SMEs should not be afraid of recruiters – for their money, they are getting experienced people that know what they’re looking for. One of the most important benefits is that it allows heads of small businesses time to do their job properly. In the current economic climate, recruitment is more important than ever. Never underestimate the importance of recruiting, and invest the time and resources needed to ensure you find the best talent to progress your company.
May 2012 www.talkbusinessmagazine.co.uk
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FOCUS ON PEOPLE US DIARY
Secret diary of an entrepreneur 86
Earlier this month, Blipfoto founder and CEO Joe Tree spent a week in San Francisco visiting some of the top technology firms operating in Silicon Valley. Here he shares his diary with Talk Business…
lipfoto allows people to tell their stories through pictures, one day at a time. With over 15 million monthly views, it’s a fast-growing social media hub which allows its users to post just one picture a day to their journals. CEO Joe Tree has been visiting the most exciting, creative and innovative companies in the Valley, from household names like Google and Nokia to the energetic start-ups like Boxfish and Storify that will be the talk of tomorrow. As he wings his way over the Atlantic, he shares experiences from the trip, from Edinburgh to Palo Alto.
San Francisco: day 1
I’m in San Francisco for the culmination of Cross Creative – a programme I’ve been enjoying back in the UK over the last nine months. Nine of us have flown in for three jam-packed days visiting companies in the city and the valley, soaking up a little of what makes this place the global epicentre of just about everything new and cool. Things kicked off properly today, with a visit to Telltale Games – a developer producing episodic games
with well known brands like Jurassic Park, Back To The Future and Wallace and Gromit. They have a fascinating model, which sees customers subscribing in advance to new chunks – or episodes – of game content over several months, rather than buying it upfront all in one go.
Boxfish gathers every word spoken on television in the USA, UK and Ireland, and makes it searchable in real time – just like Twitter. Bonkers, but unfathomably useful (and arguably more so than Twitter because you’re searching edited content from professionals, rather than waffle from individuals).
ALL BONKERS. THERE’S NO OTHER WORD FOR IT. THE GEEKS REALLY HAVE INHERITED THE EARTH Their games are all based around strong stories and lend themselves well to this approach, but in that industry it’s brave to sell something you haven’t quite built yet. YouTube was meant to be next on the list, but disappointingly they were forced to pull out at the last minute. So, after a leisurely lunch in Palo Alto, we dropped in on a very young startup called Boxfish. They’ve been in stealth mode for the last six months, quietly developing their product for a beta launch this year, and it’s almost impossible to find anything out about them. But they let us in on their secret, and it really is quite incredible.
It’s the brainchild of two guys from Ireland, who uprooted and moved here because it’s the only place in the world they wanted to make it happen. Maybe it’s just because it’s home to so much of the stuff which dominates my life, but the energy in Palo Alto really is palpable.
San Francisco: day 2
First on the list today was the Googleplex for a two-hour tour and lunch courtesy of the Android Games product manager. Bonkers. Just bonkers. Completely and utterly bonkers. The scale of the place, the quirky stuff around every corner, the multi-coloured communal bikes,
March May 2012 2012 www.talkbusinessmagazine.co.uk www.talkbusinessmagazine.co.uk
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US DIARY FOCUS ON PEOPLE
the dogs people bring to work, the weird bits of experimental tech dotted around, the staff eatery. All bonkers. There’s no other word for it. The geeks really have inherited the earth. Next, it was onto Nokia’s Palo Alto research lab, which is another big building full of incredibly clever people inventing the things we’ll all be using in the future. We were lucky enough to arrive in time to sit in on a talk being given by the guys behind the first fulllength feature to be shot entirely on a mobile phone. Fascinating stuff.
San Francisco: day 3
I hooked up with the rest of the Cross Creatives for a quick stroll down Post Street to visit Beyond, our first meeting of the day. David Hargreaves and Matt Iliffe explained their unique approach to online marketing, which revolves around ‘sentiment analysis’. They ‘scrape’ social media, blogs and the wider web with a bunch of sophisticated tools to find out what people are saying about a particular topic, before working out how to build a marketing campaign
THE ENERGY IN PALO ALTO IS PALPABLE The final call of the day was at IDEO. A company I’ve known about for years and one whose designs I guarantee you’ve used many times over. Their culture and process is their product, and they apply it to solving an incredible array of problems, from medical devices to toys to branding to corporate strategy. Three global giants doing quite different things, but all flourishing because of their people and the environment they provide for them.
which fits neatly around the existing conversation. Incredibly sophisticated and effective stuff I’m sure we’ll see a lot more of in the future. Second on the list was Storify, one of the companies I’ve been most excited about meeting. Burt Herman honoured us with a couple of hours of his time, talking us through his background in journalism, hooking up with his co-founder and why they launched the product.
The synergies with Blipfoto are immense, because we share a belief that there’s just too much content created through social media for it to be really useful. We address that by limiting people to one photo a day, they address it through a tool anyone can use to build and curate sensible stories from the mass of social media. Third was Launchpad Toys, a very small, young team who produce an incredibly slick iPad app called Toontastic. They’re punching way above their weight and they’ve loads more on the way. If what we saw is anything to go by, they deserve to be super-successful. The final visit of the day and, sadly, of the whole Cross Creative programme, was to Inkling. They have this huge, sprawling office in the city with 85 staff, and I was expecting to find they were a long-established digital publisher. But they’re younger than the iPad, and (at least for the time being) depend entirely on that platform. Amazing. If yesterday was a day of giants, today was a day full of start-up energy. Hugely driven people with great ideas making them happen. I’m proper full of that energy now, and you’d better watch out, because I’m bringing it home to the UK.
www.talkbusinessmagazine.co.uk May 2012
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SOCIAL MARKETING FOCUS ON TECHNOLOGY
Bridging the gap Russell Loarridge, European sales director for Janrain, argues that companies need to bridge their website with social media platforms if they want results While incorporating social media into marketing strategy is becoming standard practice, many organisations still struggle with how to make the most of opportunities created by these platforms and tools. As social media evolves, so too should the corporate website. It’s no longer just about engaging with consumers on other sites across the web; organisations today need to maximise social media to better engage with customers and create brand advocates, and then in turn direct that traffic to their own corporate site. Furthermore, once visitors are on the corporate site, how can organisations keep them there, engage them, collect information
about them and ultimately sell to them with a personalised proposition that will keep them coming back for more? It’s sink or swim time: only the strongest will survive. You can bet your bottom dollar that the companies who will enjoy real marketing success in the future will be those that are pushing people onto their websites via social networking platforms. Read on to discover how you can be one of them…
The value of social networks
When you look at the value of social networks, it becomes immediately obvious that while there is a new ecosystem in which to operate, the fundamentals of interaction remain unchanged. An organisation’s objective should always be to engage a user on the corporate website with content, products, services or other key parts of it. With the growth in social networks, however, many organisations have set up new places where these engaged users are sharing content, products or services, in a manner that is monitored, but uncontrolled. And this is where many organisations, and retailers in particular, are falling down: they are failing to close the loop back to the corporate site and thereby failing to maximise the value of social interaction and the social information exchange. There is a great opportunity through social login to create a bridge between the website and the social networks, and that bridge is built on the strongest marketing material available – social influence through an engaged user.
www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON TECHNOLOGY SOCIAL MARKETING
90 Social traffic
TRAFFIC TO THE WEBSITE FROM A SOCIAL MEDIA PLATFORM IS, BY ITS VERY NATURE, MORE VALUABLE
Traffic to the website from a social media platform is, by its very nature, more valuable than traffic from other sources. That may be a bold statement, but when we consider what a social network like Facebook, Twitter, or LinkedIn has been created for, and look at the data, it makes sense. Facebook continues to be the number one global social networking destination and people are spending more time each month on the site. People spend time on social networks and share information with people who are interesting and important to them. At the same time, they are interested in learning from these same people, hearing their stories and experiences, and checking out what they think is important. Because trust is high among peers, recommendations and messages exchanged among friends are more likely to resonate than those from a company directly to an individual. The trick is to take that initial social interaction and turn it into a compelling reason for the user to visit the corporate website. Make the registration process simple by shortening the registration form, adopting a progressive disclosure model and allowing them to log in via existing social networks.
The rapid spread of social networking sites such as Facebook and Twitter, as well as the availability of Internet email accounts through Google, Yahoo or Microsoft Windows Live, has increased the likelihood that the majority of site visitors already have at least one preferred online profile. Offering registration or login through these profiles has been proven to not only increase registration rates, but vitally, to increase the quality and reliability of the user data. Once the organisation has a visitor on the website and engages them, social login makes it easy for that person to communicate back to the social networks of their choice without leaving the corporate site. Activity-based social sharing tools enable the user to perform this action from within the flow of the website experience. Once the user publishes activity or content to a social network, the corporate website has a presence there as well. And, as the user shares their activity or content from the corporate site to friends on a social network, the post from the initial engaged user drives traffic back to the site. Organisations that have implemented this functionality are typically experiencing a range of 6-25 new referral visitors for each social action a user shares with friends on the social networks. As this cycle repeats, these organisations create a direct link to the social networks and a sustaining stream of new referred visitors. By connecting the website to the social platforms through the engaged user, any organisation can tap into the social networks to reach new audiences.
Take full advantage
As the web continues to evolve, success will come to organisations that take advantage of new tools to reach target audiences and create meaningful interactions from within their brandâ€™s site. Social media has democratised communication and made information sharing easier. Augmenting push marketing strategies with tools to empower the â€˜engaged userâ€™ as a bridge between the website and the social networks will yield the most powerful results, and true word-ofmouth marketing success on the social web.
May 2012 www.talkbusinessmagazine.co.uk
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Modern businesses rely heavily on the processing power and communications functions of computers, so itâ€™s critically important to keep your IT systems operating reliable and efficiently at all times. Based in Glasgow, DSIS is a computing and IT company specialising in ensuring the smooth and effective operation of all your computer equipment, programs and networks. We have decades of knowledge, from hardware replacement and data recovery through to hosting websites and dealing with email viruses. As a result, you can simply focus on your day-today business, leaving us to handle computing matters without stress or interruption.
FOCUS ON TECHNOLOGY SOCIAL MEDIA
Tweet tweet: time’s a wastin’ Fed-up with your employees wasting working hours on Twitter? You’re not the only one, says Tom Michaels from DealJungle.com An increasing number of employers are getting fed up by the amount of time their employees are spending on Twitter, according to a new study. The research, carried out by SME money saving website, DealJungle.com, found that more than 47% of business owners were somewhat concerned by the length of time their staff spent reading their Twitter feed. A further 15% identified themselves as very concerned about the time spent by employees on the social networking site. Employers have also raised concerns that the use of Twitter streaming programs, such as ‘Tweet Deck’ – which provides continuous updates – has led to a considerable fall in office productivity.
GENERALLY SPEAKING, 20 MINUTES IS LOST PER EMPLOYEE PER DAY TO TWITTER In the same survey, office workers were asked to answer, honestly, how much work time they spend on their personal Twitter account. While the majority openly admitted to briefly using Twitter at work, only 13% confessed to spending 45 minutes or more on the site. However, nobody likes to admit that they are slacking at work, so this figure may be much higher. It is very difficult to place an exact figure on the amount of time the average worker spends in this way. A conservative estimate from our research would be, generally speaking, 20 minutes
is lost per employee per day to it. For a relatively small company with 30 employees, this equates to a loss of 50 hours a week. One employer told us: ‘We are stuck between a rock and a hard place. Yes, we would like to ban staff from using
WE ARE STUCK BETWEEN A ROCK AND A HARD PLACE Twitter during office hours; however, with the social networks now becoming such a powerful advertising tool, it would be commercial suicide to do so. ‘We have tried banning people from sites like Twitter and Facebook, or just limiting them to using it in their lunch hour: although this has become harder and harder to enforce. ‘Another problem we are facing is the blurring of personal and professional relationships in the office. For example, we have had cases of people phoning in sick but then tweeting about going to the shops. For colleagues who follow that person on Twitter, this then puts them in a very difficult position.’ In today’s digital age, companies are under increasing pressure to add social media to their on-going marketing campaigns, and with over half of the UK now using sites like Facebook and Twitter, you can see why.
May 2012 www.talkbusinessmagazine.co.uk
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How my Sunday brainwave added 17% to Tuesday’s sales Sunday morning jog. I’m thinking: can outlets sell more of our self-distributed magazine? Display them more prominently? Why not reward those who can increase their sales by the biggest percentage! I’m a pianist, not a computer whizz kid, but with Ffenics I built a database system to handle our distribution. In less than an hour that Monday I tweaked the app to add issue-by-issue comparisons for each outlet. Vans went out Tuesday. When we collected later, the inducement for a better shop position paid off with 17% more sales!
Stay Ahead – Grow Your Own App! Just like my venture, your business needs to tweak operations to be more efficient, profitable and ahead of the competition. Computer apps are essential in this battle. Free and open source is fine for common functions like accounts. But to gain your edge, you need to control your data. Ffenics puts you – the business owner – in the driving seat. It’s your friend at work.
FREE Starter Pack Our classic software has helped many different types of businesses around the globe for almost three decades. Ffenics is for the small business owner, not the clever techie. So give us a test run. Download our FREE starter pack from www.GrowYourOwnApp.co.uk/talkbusiness, and grow your own small business application – and your own business!
Ffenics. Affordable. Doable. You-able. PS: Find out how another weekend idea got me three years in New York: www.growyourownapp.co.uk/911 Stand 1208, Business Startup, ExCel, London May 17th-18th
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DynaCom IT Support was established in 2003 to give a personal service to a high business standard, serving Essex, Suffolk, Hertfordshire and surrounding areas. We use a combination of remote and onsite support where appropriate – our aim is to resolve your issue in the shortest time with the least inconvenience to you. Remote and telephone support is great for monitoring and simple fixes, but we believe you can’t beat an engineer on your doorstep! With fully customised fixed price contracts or simple pay-asyou-use solutions, we deliver services in the following areas:
Small Business Server network solutions, connecting your users and making collaboration easy Health checks and upgrades Hardware supply to give a one-stop-shop. Web sites Internet connectivity E-mail including hosted exchange, accessible anywhere anytime on almost any device
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End point protection -Antivirus, Antispam, Firewalls (hardware and software) Backup and Disaster Recovery, whether it be traditional tape or “cloud” based online backup Multiple site routing, connecting your remote offices securely and unobtrusively
DynaCom is a Microsoft Certified Partner and a Dell Premier Partner.
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APPS FOCUS ON TECHNOLOGY
Shopitize ’til you drop Being a digital start-up with a big idea can be a challenge, but believing in your concept is essential according to the founders of new app, Shopitize When old friends, Alexey Andriyanenko and Irina Pafomova bumped into each other at Tower Bridge, she was a banker, he in oil. They both had one thing in common – they were miserable. Neither was satisfied with their jobs. ‘Are you happy?’ he asked. ‘No. Are you?’ ‘No. I’ve had enough.’ And the idea to start a company was born. Unlike many businesses where the idea
Andriyanenko explains. But other shops don’t. ‘That direct connection between the brand and the shopper – that is what Shopitize is all about.’ The premise may be simple, but the technology behind it is incredibly complex. In essence, the app can build you a personalised shopping list, keep track of your spending, provide you with specific offers for the brands you like and the shops you frequent, and even remind
HAVING A BIG IDEA IN THE TECHNOLOGY SECTOR CAN ACTUALLY BE DETRIMENTAL comes first, for Andriyanenko and Pafomova the desire to work for themselves was what fuelled their decision to go it alone. With their business partner, Australian-based tech entrepreneur, investor and former cabinet minister, Hon. Alan Griffiths on board, they started the process of finding their “big idea”. ‘We started brainstorming. We were looking for different ideas, interesting markets – markets where we could get involved,’ says Pafomova. ‘It took us a while to develop the proposition.’ Once they had alighted on apps as the focus of their entrepreneurial spirit, it was a matter of looking at what was missing from that marketplace. ‘Supermarkets connect with you as a consumer,’
you to pick up milk on your way home – all from you taking a snap of your receipts. The app processes the data on each receipt into real information and uses it to build a picture of what you like, what you spend your money
talking to foreign investors’. This is due in part to our tendency to dismiss anything ambitious as being unrealistic, according to Andriyanenko – if it could be done, we think, it would already be being done in Silicon Valley. ‘We need to believe in ourselves here,’ Andriyanenko says. ‘There is no reason why Silicon Valley should have the monopoly.’ The recession and continuing financial instability might put some people off starting a business, but Andriyanenko disagrees: ‘When there is uncertainty in the economy, things are going to change, so it is a great time for start-ups.’ His advice if you want to make a success of your first business? ‘You have to be the strongest believer in what you’re doing. You have to be more passionate and into it than anyone else. If
YOU HAVE TO BE THE STRONGEST BELIEVER IN WHAT YOU’RE DOING on and what stocks you might be running low on. Pafomova calls it the “pocket husband” (with the advantage that it doesn’t talk back). Shopitize is a very big idea: a good thing in business, you might think. In fact, having a big idea in the technology sector here in the UK can actually be detrimental. ‘It is much easier to raise money outside the UK,’ she says. ‘We found it a lot easier
you’re not, get another idea.’ And the best thing about being an entrepreneur: ‘You determine your own destiny. It heightens emotions – you feel every bump, but you feel every high, five times stronger. When it’s bad it’s really bad. But when it’s good it’s amazing.’
www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON TECHNOLOGY GADGETS
Introducing some of the nattiest portable gadgets on the market: whether you want to make doing business on the move effortless, or experience a little taste of home comforts when travelling with work, these gizmos are here to help
Gadgets to sigh for... 2
Audéo Perfect Fit Earphones
For those who don’t want to miss a beat on their travels, Phonak Sounds AG is expanding its award winning range of Audéo Perfect Fit Earphones (PFE). With in-built Apple chip technology and 100% compatibility with all Apple products, the Audéo PFE range will see its latest addition offer a hands-free function with microphone and volume control to enable remote volume control and call answering/ending – all at the touch of a button. The Audéo PFE 132 combines a lightweight, ergonomic fit with excellent sound quality and external noise cancellation to ensure the daily commute has never been so relaxing. Contact: www.audeoworld.com
TUMI Bluetooth Smart Key Fob
Ever worried about losing your mobile when you’re away? Then this is the gadget for you. From the makers of the world’s first wireless leash for mobile phones, comes the keychain-sized TUMI Bluetooth Smart Key Fob. This ingenious device prevents users from losing or misplacing their mobile phone by vibrating, flashing lights and sounding an alarm when they separate from it. With added features of call notification, a speakerphone for hands-free communication and emergency services calling capabilities, this is the ultimate accessory for any Bluetooth-enabled phone. Contact: www.tumi.com
May 2012 www.talkbusinessmagazine.co.uk
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GADGETS FOCUS ON TECHNOGY
Freecom Mobile Drive Sq
If you need to be able to carry your office with you without compromising on style, Freecom presents the world’s first mobile hard drive in square form. Designed in collaboration with industrial designer Arman Emami, the lightweight drive is encased in a sandblasted stainless steel enclosure. Available in 500GB and 1TB storage capacities, the hard drive has a USB 3.0 connection that enables users to transfer data at speeds of approximately 130 MB/s – making it perfect for business and home users who want to back up information quickly. The drive is powered by USB port, so users can simply plug into a PC or Mac and drag and drop files to share data with colleagues. Contact: www.freecom.com
Dell Vostro 131 laptop
Every entrepreneur needs a laptop when on the move. Dell recently launched the Vostro 131 – a portable laptop engineered with the mobile professional in mind, with up to 9 ½ hours battery life. With brisk processing options of 2nd Generation Intel Core i5 processors and Genuine Windows 7 Professional operating system, you can work virtually anywhere, anytime: this lightweight laptop travels anywhere you do. It’s also designed to keep you well-connected while on the go, with enhanced video conferencing features like digital array microphones and SRS Premium Voice Pro software, built-in WiFi and Bluetooth 3.0, and customizable Quick Launch Button. Contact: www.dell.co.uk
Energenie Portable Chargers
When you’re on a business trip far from home, there’s nothing worse than your devices running out of juice. Energenie brings a range of nifty solutions in the form of portable chargers. The Portable Charger with LED Torch acts as both mobile charger (compatible with 90% of mobile devices) and a torch, with super bright white LED technology. It charges via mini USB interface and comes with six connectors and an accurate four-stage battery power indicator, as well as being compact, portable and robust. Contact: www.energenie4u.co.uk
www.talkbusinessmagazine.co.uk May 2012
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ARE YOU LOOKING FOR A RELIABLE FLEXIBLE CLOUD SOLUTION THAT DOESN’T STOP WHEN THE INTERNET STOPS? WABSTOR PRO+ is your cloud based file server, now even remote users can work as though they are in the office without the need for expensive hardware solutions.
256Bit military grade encryption means that your data is always secure and safe.
• All the features of BACKUP & SHARE • Secured group folders • Unlimited users per group • Management portal for full control
• All the features of BACKUP • Share files of any size or types. • Sync files between all PCs • Archive old business data • Edit files in web browser
• 256Bit Military Grade Encryption • Keeps last 30 versions of a file • Access backup via PC, Mac, and mobile • Easy file recovery • Stream media from backup to any device
• 25GB mailbox with up to 40MB attachment size • Shared calendars, tasks and contacts • Email Anti-virus and spam filtering • Compliant mail archiving for up to 10 years • PC, Mac & Mobile’s supported • Full outlook web access and seemless mobile anywhere access
For advice on how this can change the way you work, save you time and money, call in and see us at Stand 108 Business Start Up Show/ The Great British Business Show
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CLOUD STORAGE FOCUS ON TECHNOLOGY
Storage matters Fail to manage your data properly and risk storing up problems for later, according to Dell marketing manager, Andrew Miller
STORAGE CAN REPRESENT A HUGE INVESTMENT FOR START-UPS AND MID-SIZED BUSINESSES
Data storage plays a key role in enabling small businesses to deliver efficient business services. What’s more, data is growing at an unprecedented rate so SMEs are looking hard at how they store and manage data throughout their company’s entire lifecycle, in a bid to keep productivity up and costs down. But small businesses are still hesitating when it comes to adopting the new technologies which are designed to support this data growth. Storage can represent a huge investment for start-ups and mid-sized businesses. For these businesses, it’s crucial to be able to guarantee a strong return on that outlay. As a start-up, your business can undergo significant growth, and this means your data demands will also shoot up. One way businesses have dealt with this challenge is by growing their datacentres, but this can easily turn into a costly and complex affair – and sometimes results in an IT infrastructure that’s not fit for your changing storage needs. In fact, more than nine out of ten small businesses in Europe have experienced an IT outage that inhibited their
ability to work, with 17% saying it happens at least once a week. Recent independent research conducted on behalf of Dell and Intel shows that 63% of small businesses in Europe store more than one terabyte of data on their servers. Around a third of small businesses in the UK store more than two terabytes. That said, server capacity can also be under-utilised. Usage rates are noticeably affected by company size, with close to a third of companies with 24 or fewer employees using less than 25% of server capacity compared with only 11% in companies with 25 to 100 employees. What’s more, around one in six small businesses in Europe are currently using less than 25% of their server capacity. Why does this matter? It seems to suggest companies can handle the data explosion, but in reality it highlights poor storage management among SMEs. The management of data in all its forms represents one of the biggest challenges for small businesses, but data lies at the core of many companies. Without it, ability to operate efficiently is compromised. Growing pressure caused by ever-expanding quantities of data, such as email and video files, as well as increased threats to the security of this data, means that efficient data storage and management is more critical than ever. There’s no ‘one-size fits all’ IT solution and it’s important to remember that technology should be tailored to your business’ particular needs. The winners in this virtual era will be those who can simplify, standardise and automate their infrastructure. This means more time spent managing your business rather than running your technology. In today’s business environment, it’s more appropriate to think of storage in terms of performance – it doesn’t end with simply storing more and more data. Ultimately, companies who prepare for growth by deploying innovative technology will be able to boast greater efficiency. And this can make all the difference between success and failure for your company.
CONTACT: www.dell.co.uk www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON TECHNOLOGY CREATING A WEBSITE
Top tips: websites for start-ups Usability experts Darren Langham and Matt Tullett from web and graphic design firm, Twelve20, offer five tips on making your website work for you
Keep your wording clear
Online consumerism has become a fast-paced, competitive environment and your text needs to stand out. Imagine a clock is ticking and you have seconds, not minutes, to sell yourself. Breaking down your wording into clear, punchy and straight-to-the point sentences will allow visitors to your website to understand exactly what you do – immediately. Make sure you keep your style and wording appropriate to your target audience to maximise your suitability.
Choose great pictures
Illustrating a website is crucial for allowing a customer to see what you do. Photographs, graphics and diagrams are very useful if they’re used appropriately and are good quality. Like the shop window theory, a blurry, poor or outdated photograph can be more detrimental to your reputation than not having one in the first place. It’s worth investing in professional photography, but if you’re taking pictures yourself, make sure the image is clear, colourful and well-lit. If you’re using your own picture or photographing people, remember to smile.
Make it memorable
Like many brands on the high street, consumers like what they know and the Internet works in the same way. Many of the world’s most visited websites maintain a consistent brand by considering colours, imagery, simplicity and multimedia content. Being memorable will help you ensure that customers return to your website.
For start-up businesses on a budget, Twelve20 offers an easy-to-use website building product, which lets you choose from a range of stylish layouts and create a professional-looking website in minutes.
Check it’s up-to-date
Don’t forget contact details
Picturing a website as the front of a store on a busy shopping street should help you understand the importance of keeping your website content up-to-date. During the Christmas period, for example, shoppers wouldn’t expect to see an offer for Easter Eggs or summer fashion in a shop window.
Contact information is vital to allow potential clients/consumers to get in touch. It may sound an obvious suggestion, but people will be skeptical of your service if you don’t include an easy way for them to contact you. Decide on your contact preferences and work around that; if you prefer to be emailed, highlight your email address as your main port of call. For a consumer, it’s extremely frustrating when you need to contact a company whose information remains inconspicuous.
April2012 May 2012www.talkbusinessmagazine.co.uk www.talkbusinessmagazine.co.uk
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FRANCHISE NEWS FOCUS ON FRANCHISE
British Franchise Exhibition comes to Manchester The British Franchise Exhibition, taking place 8-9 June at Manchester Central, brings a range of opportunities, advice and guidance under one roof. Currently employing half a million people, franchising is a business proposition that clearly has strong appeal. A wide range of businesses across sectors such as property, home care, technology, food and retail will be at the event, including Local People, United Carpets, Lawn Keeper, Riverford Organic Vegetables, and Bluebird Care. Visitors can have confidence in the companies they meet, as the exhibition is endorsed by the BFA. This means all exhibitors have met its ethical code. Exclusive to the exhibition are sessions held by McDonald’s. Visitors can find out what goes on behind the scenes and investigate whether becoming a McDonald’s franchisee is right for them. There is also an extensive free conference programme, which includes practical advice seminars by the BFA. For more information, go to: franchiseinfo.co.uk
UK shares franchise ethics with European audience Directors from franchise associations around Europe gathered in Prague on 16-17 April to look at Britain’s developments in ethical rules for franchising, and to see how they might be applied more widely. The group, hosted by the Chairman of the franchise association of the Czech Republic, included agents from Finland and Turkey, as well as Germany, Italy, France, the Netherlands and several other countries. The bfa’s rules on refunding pre-contractual deposits, the disclosure of purchase incentives by franchisors, and the charges for renewing franchise agreements, were introduced to the group. Carol Chopra, director of the EFF, said: ‘The European Code of Ethics for Franchising is the central pillar of our work promoting and protecting franchising in front of the European Commission. It is essential that we explore developments in ethical conduct and keep our Code at the leading edge. ‘Britain and France have done more than most in this area and their willingness to share their experience is very valuable to us all.’ The EFF will meet in Brussels for its AGM on 22 May. The agenda includes a pre-meeting on the new work in Italy on an interactive web-based franchise expo, and on the work in Britain on an online bfa franchisee membership scheme.
Top UK franchise finalists announced The British Franchise Association (bfa) has announced the 14 finalists in the 2012 bfa HSBC Franchisor of the Year Awards, supported by Express Newspapers. The shortlisted franchisors were selected from a range of business sizes and industries across the UK, and represent sectors from home cleaning services to global telecommunications. The Awards, now in its 23rd year, showcases ethical and innovative business ideas and the inspiring people behind them. It brings to life the stories of the exceptional franchisors supporting their franchisee network and building strong brands – serving to motivate the next generation of franchisors and franchisees. There are three categories for the Awards: The bfa HSBC Franchisor of the Year Award; The HSBC Franchisee Support Award; and The Express Newspapers Brand Builder of the Year Award. The finalists have been invited to present to the judging panel, face-to-face, on 15-16 May 2012. The winners in each of the three categories will be announced at the 23rd British Franchisor of the Year Awards gala dinner on 21 June at the Telford International Centre. Brian Smart, director general of bfa, said: ‘We are seeing businesses challenge industry standards and employ ethical business practices in order to inspire future franchisors and franchisees. ‘Our finalists are being recognised for doing just that. The bfa HSBC Franchisor of the Year Awards offers a chance for UK franchisors to be acknowledged for these successes and we very much look forward to showcasing the best of the best at our gala dinner in June.’ To see the shortlisted franchisors in each category, go to: thebfa.org www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON FRANCHISE SPOTLIGHT
Under the spotlight… Riverford Organic In our new regular feature, we put one franchise under the microscope and see how it works in practice. This month TB met Laura Cottee, territory services manager of veg box franchise Riverford, who tells us how working from home for a close-knit, growing business equals happy franchisees
scheme which delivers organic veg boxes to 46,000 homes across the country through an extensive network of franchisees might not sound like a close-knit family business, but in reality this ethos underpins Riverford in everything it does.
What makes Riverford special?
‘We’re friendly. It suits families, because a husband and wife team or partners can work together. You tend to find the woman does the creative side of things and the guy does the logistics. But generally we’re looking for friendly, approachable people who can build relationships with their customers. ‘The best thing about being involved with Riverford is the produce. A close runner-up would probably be that Riverford is a family business. Owner Guy Watson has four siblings, and they’re all involved. And that family feel runs through the whole company – not just the staff but the franchisees
as well – so it’s a really close-knit network. It’s a nice place to work.’
What’s different about the Riverford product?
‘I think there is a perception that it’s a high-price product, which is untrue – our produce is 20% cheaper than the supermarket. So once people get to know the value of it, plus the quality, which is amazing – people tell their
vans and livery. Working with a quality product, it’s a great lifestyle without being ‘lifestyle-y’, I suppose.’
So...let’s talk wonga
‘We have a handful of new territories left in the north west at £12,500. We’ve become more resale-focused now. We’ve got a lot of franchises that are around eight or nine years old that are moving onto the next step or looking to
WE’RE LOOKING FOR FOODIES, SO PEOPLE WHO LIKE FOOD WHO CAN GIVE RECIPE IDEAS TO CUSTOMERS friends, which is one of our biggest growth avenues.’
What kind of support is there?
‘Despite our proven business model, we’re learning all the time as well. We provide a lot of support for our franchisees, we do a lot of national marketing for them. We also provide marketing materials, so there are no printing costs. And we work hard to get them good deals for things like
retire. And our resale territories range from £25,000 to £100,000, depending on the size of the business.’
Watch the entire interview, filmed by FranchiseSales.co.uk at the National Franchise Exhibition, Birmingham at www.talkbusinessmagazine.co.uk
April2012 May 2012www.talkbusinessmagazine.co.uk www.talkbusinessmagazine.co.uk
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Looking for something new and a little bit different? Then why not consider owning a Back in Motion franchise? We are a vibrant company linking healthcare and leisure, a new concept in the UK franchise marketplace and a profitable and rewarding business if you are passionate about helping people. We combine Physiotherapy, Pilates and other evidence-based therapies to deliver real lifestyle improvements to our clients. Operating a chain of branches in East Anglia, we have real experience of the potential in Physiotherapy services, both in the increasing private marketplace and in the changing NHS. As a franchise owner, we’ll help you all the way - our support includes a tailored training programme, helpline, customisable website, marketing strategies and our industry insight. You don’t have to be a Physiotherapist to build a successful Back in Motion business, but you do need to be enthusiastic and hard-working with a drive to succeed. Contact Clare and Elaine to talk about how our franchise could help you achieve your aspirations.
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BUSINESS OPPORTUNITIES FOCUS ON FRANCHISE
The rise of the franchise Adrian Goodsell, franchise exhibitions manager at Venture Marketing Group, tells us what to look for in a franchise and how doing your research is the key to success 109
etting up a new business and making it a success is a tough and demanding challenge for anyone. There is so much to consider and to do, even after deciding what to sell – from preparing a business plan and arranging finance to setting up the operations and marketing the venture – and usually with little help. With the support of a franchisor and a network of established franchisees who have personal experience of starting out, budding entrepreneurs can access help to overcome the uncertainties commonly faced.
It isn’t difficult to see why franchising is so popular for start-ups and is growing well. There is extensive evidence that businesses based on
franchise concepts are far more likely to succeed than other new business ventures. The facts make it clear: according to the latest NatWest and British Franchise Association (BFA) survey carried out in 2010, there were 36,900 franchisee outlets in the UK, employing more than half a million people. Overall, franchising in the UK generates £12.4bn, having grown from an industry that 20 years ago had a turnover of just over £5bn. Why is it so successful? A franchise business has a proven business model, which is transferable and can be taught. This is supported by the franchisor with training. A franchisee owns the local business in a particular territory and so can eventually sell, providing a long-term investment.
In addition, banks are generally more willing to lend because of the franchise’s track record and the fact that franchises have proved to be more successful in the longer term. Having decided that franchising is an interesting prospect, the next key step is to find the right business. While websites such as www.thebfa.org and www.franchiseinfo.co.uk can provide options and sources of information, meeting franchisors and existing franchisees face-toface is vital to gain a clear insight into a business and the reality of being a franchisee.
Budding franchisees will have many valuable opportunities to find out www.talkbusinessmagazine.co.uk May 2012
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FOCUS ON FRANCHISE BUSINESS OPPORTUNITIES
more about the world of franchising at The British Franchise Exhibition taking place 8-9 June 2012 at Manchester Central. The event is exclusively supported by the BFA, and only companies that have met the Associationâ€™s code of ethics can exhibit. This means visitors can have confidence in the franchise opportunities on offer, as they are vetted by an ethical entity within the UK market. There are exhibitors spanning a range of sectors, such as property, home care, food and drink, all under one roof.
franchisee, what a franchisee should look for in a franchisor, the size and the expected growth in the franchise market, the initial choice of franchise, the business plan and how to find the finance to start your business.
Although with any new business there are several options for gaining finance, the major banks are very supportive of good franchises, especially Lloyds TSB, RBS/NatWest and HSBC, which all have specialist franchise departments. However, before thinking about approaching a bank, you need to build
MEETING FRANCHISORS AND EXISTING FRANCHISEES FACE-TO-FACE IS VITAL TO GAIN A CLEAR INSIGHT INTO A BUSINESS Alongside the exhibitors, a series of seminars will tackle key subjects of potential interest to any budding franchisee. These will include: An Introduction to Franchising; Families in Franchising; Hands-on Franchises; Executives in Franchising; and Growing Your Own Business. The Introduction to Franchising seminar is particularly useful for those who are new to the concept. It will address a whole range of issues, including the benefits of franchising versus other business formats, what the franchisor looks for in a
a comprehensive business plan to allow the potential lender to judge the viability of the business. There will be a great opportunity to gain free advice on preparing a business plan from consultant company, Franchise Finance, at the Business Plan Clinic. Most franchise businesses will offer the opportunity to meet with existing franchisees as part of the research process, and there will be many on hand at the Franchisee Panel, a popular feature of The British Franchise Exhibition. Visitors, particularly those who are
new to the industry, will benefit from hearing franchisees from different organisations talk about the transition from employee to franchisee, as well as the chance to ask questions about the reality of developing a successful business. Those looking to capitalise on international opportunities in the UK, or to set up a franchise abroad, will benefit from valuable conversations with franchised companies at the High Investment VIP Lounge. Here, they can receive important information on what franchise opportunities are available, how to gain funding, advice on procedures and pitfalls to avoid. Setting up a new business and making it a success is a tough and demanding challenge for anyone. Choosing to start up as part of a proven franchised business helps significantly in overcoming the challenges, and makes success much more likely. In the current economic climate, potential franchisees can really benefit from the support, advice and guidance on offer at a range of exhibitions and events, such as The British Franchise Exhibition to achieve business success.
May 2012 www.talkbusinessmagazine.co.uk
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Lloyds TSB can help you with your franchise plans. Whether you’re buying into a franchise or franchising your own business, it’s important to have the right kind of support and guidance before you take the next step. That’s why we have a team of specially trained franchise managers who have a wealth of knowledge, and can offer you practical support and guidance. To find out more call:
0800 681 6078 lloydstsb.com/franchising
Calls may be monitored or recorded. Lloyds TSB Commercial is a trading name of Lloyds TSB Bank plc and Lloyds TSB Scotland plc and serves customers with an annual turnover of up to £15m. Authorised and regulated by the Financial Services Authority under numbers 119278 and 191240 respectively.
FUNDING FOCUS ON FRANCHISE
Look before you leap
It’s tempting to jump right into an exciting opportunity, but doing your homework is essential when it comes to franchises, says Richard Holden, head of franchising for Lloyds TSB Commercial
t’s not hard to see why people are choosing franchising as their preferred way of setting up in business. One major benefit is that the franchisor provides initial training and ongoing support to the network of franchisees. But, before you take the plunge, it is worth noting that not every franchise offers the same level of support, so you’ll need to find out what is on offer before signing on the dotted line. Recently a franchisor asked me to follow him from head office to a local outlet to see how the business operates first hand. I told him I didn’t know where to go, so he instructed me to follow him. He then drove off at speed. I did my best to keep up with him, following in my own car. Not only did he seem to have no consideration for the fact that I was trying to follow him, but through several roundabouts and junctions he never indicated once. This seemed to be a perfect metaphor for his management style. No indication of future direction and a lack of consideration for those he was meant to be leading. I hear numerous stories of investors who jump into a franchise opportunity without carrying out sufficient investigation beforehand, and who later regret their investment when all is not as it first appears. Research must be thorough – don’t be pressured into making a decision before you are ready to do so. As part of your research, speak to as many existing franchisees as possible. It is likely that the franchisor will want to
manage that process, and that is fine: but don’t let them cherry pick who you speak to. You should try to speak to a selection of franchisees, including some of the best and worst performers. You may also wish to speak to someone who has recently established their business – they will have gone through the same process as you very recently so their experience will be invaluable. It’s also worth speaking to franchisees who are more established. They will be able to point out some of the pitfalls to avoid, and where you can expect your own business to be in two or three years’ time. Of course, franchising is not right for everyone. For people who value independence or want to run a business without restrictions, or to reinvent the wheel, franchising might not be the right choice. Franchising is not an easy business option and
investors need to go into it with their eyes wide open. Ultimately, if you’ve done your research, considered all the alternatives, taken the right professional guidance and decided that franchising is the best way forward for you, then there is every opportunity to benefit from your chosen franchise for many years to come. Lloyds TSB sponsors a series of free evening educational seminars about the benefits and pitfalls of franchising, which are must-attend events for people starting on their franchising journey. For further details and booking information, visit the website: www.franchise-seminars.biz
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AND FINALLY... THE DAILY GRIND
The daily grind TB asks a well-known entrepreneur twenty questions about their life, work, inspiration, and a few other things of no particular importance. This month, we invite Thea Green to take the hot seat Where in the world are you right now? I’m just back in the UK after a few days in the US. What gets you out of bed in the morning? My two-year-old. She wakes up at 6am and is very loud.
What do cereal (sic) entrepreneurs have for breakfast? Porridge when it’s cold – otherwise I just have some fruit on the run. ANYONE CAN HAVE A GOOD IDEA BUT NOT EVERYONE CAN MAKE IT A REALITY
What has been your most effective business tactic? The best is yet to come – constantly trying to improve. Aged 11, what did you want to be when you grew up? I always knew I wanted to run my own business. I just wasn’t sure what kind of business that would be.
Who or what inspires you the most? So many things – inventors, brand creators, fashion, architecture and art.
What is your favourite smell (apart from crisp £20 notes)? Route du The – you can only buy it in Barneys so I stock up in the US.
Where and when are you happiest? Sunday morning under my duvet with my husband, our kids and the papers.
If you could have your time again, what would you do differently? Nothing, I live in the present not the past.
What single piece of technology could you not live without? I’ve just got an iPhone and it’s a lot of fun.
Can ‘anyone’ be a successful entrepreneur? Anyone can have a good idea but not everyone can make it a reality, and even fewer can hack it when they get there.
Gordon Gekko famously said: ‘lunch is for wimps’. Do you do lunch? Yes, but often at my desk or in the car. Sometimes I schedule a business lunch but I don’t have set lunchtimes – just as and when. What is the best piece of advice you have ever received – and from whom? When I was starting out in business there was a lot of free advice out there – don’t be afraid to ask for it. Entrepreneurs like to share their experience and it can be hugely beneficial . Choose three dinner guests (alive or dead)? Coco Chanel (for her style), Steve Jobs (technology and innovation) and Jamie Oliver (inspirational employer and love his food).
How many entrepreneurs does it take to change a light bulb? None – they’re too busy re-inventing the wheel to notice the light bulb. What would you say is your most important skill? Determination. Do you have anything to declare? The best is yet to come: by the time you realise your original business ambition, the possibilities have got so much bigger.
May 2012 www.talkbusinessmagazine.co.uk
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