NAILING IT At a time when retail titans were hitting the runners, Nails Inc solidified its status as a high street hit. Now a ÂŁ25m turnover business, founder Thea Green has the nail market at her fingertips
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Tooth and nail
How Thea Green beat the recession with glamourous enterprise Nails Inc
27 VOLUME 03 ISSUE 04 / 2014 11 12 14 17 18 98
Editor’s letter Contributors News & events Talking point Book reviews Start-up diaries
27 One to watch
BoBo Buddies founder James Roupell is a modern day Dragon-slayer
31 Small change
60 Keep it real
38 Getting your share
65 Worlds apart
44 On the money
68 On fairer shores
Start-ups are behind the innovations driving business forward We talk to Israeli firm Wix about the benefits of its recent IPO How to ensure you’re getting payroll just right
46 Forgotten friend
Authenticity is all the rage nowadays. But will it last? Regus and Maviga reveal how they manage their global workforces How easy have migrant entrepreneurs had it in the UK?
74 Take care of talent
The cash basis system can be a big help for small businesses
Nurturing bright employees will bring great rewards
50 Two’s company
77 The hot list
Sponsorship presents myriad opportunities for start-ups on a shoestring
56 Turn that frown
Winning back unhappy customers can help build strong relationships
The latest must-have gadgets, hardware and apps for forwardthinking small businesses
81 Phoning it in
Why your mobile might be all you need to start your own business
86 In sync
Managing remote teams is a whole lot easier with the right tools
91 Overseas obstacles
Tackling the legal challenges can ease the exporting experience
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EDITOR’S letter VOLUME 03 ISSUE 04 / 2014
Scan this QR Code to register for Elite Business Magazine SALES Harrison Bloor – Senior Account Manager firstname.lastname@example.org Darren Smith – Account Manager email@example.com Matt Webb – Account Manager firstname.lastname@example.org Samuel George – Account Manager email@example.com Charlie Anderson – Junior Account Manager firstname.lastname@example.org
Thea Green is the perfect role model for female entrepreneurs
EDITORIAL Hannah Prevett – Editor email@example.com Josh Russell – Feature Writer firstname.lastname@example.org Adam Pescod – Feature Writer email@example.com Dara Jegede – Feature Writer firstname.lastname@example.org Joe Jeffrey – Feature Writer email@example.com DESIGN/PRODUCTION Leona Connor – Head Designer firstname.lastname@example.org Dan Lecount – Web Development Manager email@example.com CIRCULATION Malcolm Coleman – Circulation Manager firstname.lastname@example.org ACCOUNTS Sally Stoker – Finance Manager email@example.com Colin Munday - Management Accountant firstname.lastname@example.org ADMINISTRATION Charlotte James – Administrator email@example.com Charlotte Wright – Trainee Administrator firstname.lastname@example.org DIRECTOR Scott English – Managing Director email@example.com Circulation/subscription UK £40, EUROPE £60, REST OF WORLD £95 Circulation enquiries: CE Media Limited Elite Business Magazine is published 12 times a year by CE Media Solutions Limited, Fortis House, 160 London Road, Barking, IG11 8BB Call: 0208 214 1068 Copyright 2013. All rights reserved No part of Elite Business may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written consent of the editor. Elite Business magazine will make every effort to return picture material, but this is at the owner’s risk. Due to the nature of the printing process, images can be subject to a variation of up to 15 per cent, therefore CE Media Limited cannot be held responsible for such variation.
It seems especially fitting that we should have a successful female entrepreneur on the cover of Elite Business this month. After all, it’s been an important month in the ongoing battle for gender equality – not least of all in the workplace. A plethora of high-profile events were held to mark International Women’s Day on March 8 and Cranfield School of Management released its influential annual report on women on boards on March 26. It showed that whilst the biggest companies in the UK are on the right track, more still needs to be done to promote gender diversity throughout the ranks of companies. Recent research from the Chartered Management Institute probed the importance of role models in inspiring women to aim for the top. It found that of the top ten role models cited by British workers, just two of them were women – and neither of them were still alive. Young women rising through the ranks need to be able to look up and see examples of peers who have smashed through the glass ceiling and achieved great things. Enter Thea Green. Fashion editor of prestigious high-society mag Tatler at the age of 24, high-flier Green then started Nails Inc which now boasts a turnover of £25m. Our cover star is exactly the kind of woman who should be inspiring and spurring on the talent of today and tomorrow to strive for greatness. So too are Michelle Mone, the lingerie entrepreneur, Karren Brady, the so-called ‘first lady of football,’ and Jacqueline Gold, CEO of Ann Summers and last month’s cover star. What, apart from bags of success, unites these three powerhouses? Well, I’m delighted to say that they are among the headline speakers at the inaugural Elite Business National Conference & Exhibition. We are hugely excited about the event, which takes place on April 10 and 11 at The Old Truman Brewery, London. Whilst we love bringing real-life stories and practical hints and tips to our readers’ fingertips, there’s no substitute for hearing those inspiring stories right from the horse’s mouth. We do hope we’ll see many of you there. Please do come and say hi – the rest of the editorial team and I are keen to hear your tales of entrepreneurial endeavours. But most of all, we look forward to helping you build great businesses.
HANNAH PREVETT EDITOR
Editor's Letter.indd 1
Fear not. We haven’t lost the talents of Kirby to a rhino. He was just having some fun at the Saatchi Gallery. Meanwhile, another of his passions – DJing – continues unabated. He was even kind enough to send us some of his recent mixes, including a retooled version of the Inception soundtrack and a rather epic space movie mix. We’re told he wrote this month’s piece on web-based tech from a galaxy far, far away…
It’s been a busy start to 2014 for Sandy. Firstly, she has produced some stunning snaps of EB cover star, Thea Green – “a pleasure to shoot”, so says Sandy. Elsewhere, our prized photographer had the privilege of being on-set photographer for the BBC’s The People’s Portrait, snapping esteemed portrait artist Nicky Philipps as she sketched the much-loved war veteran Simon Weston – all in the company of Fiona Bruce. She also celebrated the first birthday of her son, Freddie, and did her first ever shoot for The Sunday Times. Phew!
Card is a freelance journalist specialising in small business and enterprise. He writes for The Guardian, Elite Business and anyone else that pays him. He is the author of our feature on customer service and keeps a blacklist of venues you should never visit because they once messed up his order. However, businesses that treat him well can expect positive reviews and repeat business (freebies welcome).
Making a special guest appearance in our legal pages this month, Hatchwell lays down the law on exports for our expansion-hungry start-ups. With his firm Davenport Lyons involved with the UKTI’s Export for Prosperity initiative, he is certainly well-placed to write on the subject. A lifelong love of travel and sailing makes him the perfect fit. We’re definitely happy to have him on-board.
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NEWS & EVENTS Key political and business heads met for the 40th Federation of Small Businesses (FSB) annual conference. Labour leader Ed Miliband declared full protection for smaller energy companies against unacceptable treatment from the ‘big six’ energy suppliers – British Gas, EDF, E.on, npower, SSE and Scottish Power. He proposed a new regulatory body that would help secure the lowest energy prices possible for SMEs. It came off the back of Ofgem’s call for the Competition and Markets Authority (CMA) to conduct a thorough investigation into the energy market and followed chancellor George Osborne’s budget announcement of a freeze on the carbon price floor policy, a move that could save medium-sized manufacturing firms around £50,000 per year. Trying to get the small business vote, Ed?
14 Matthew Hancock, the skills and enterprise
minister, proclaimed to FSB members that SMEs are at the heart of the government’s long-term economic plan. He outlined the steps the government is taking in aid of SMEs such as a £1m education technology design competition for small businesses with innovative ideas who want to see them become a reality. “It is an essential part of our long-term economic plan that businesses are given the right environment to achieve their lofty ambitions,” said Hancock.
Not one to be left out, George Osborne announced a new scheme that should make it easier for SMEs to find alternative financiers. With over half of first time SME finance seekers getting rejected by banks, new proposals aim to bridge the gap between SMEs and alternative funding – connecting businesses that need funding to lenders and vice versa. The consultation poses the question of whether the government should get involved and implement legislation requiring lenders to release information on SMEs they reject for finance, so that they can be identified and approached by alternate credit providers. The news will certainly be welcomed by hardpressed SMEs.
the next big destination for payday spending sprees. The scheme will offer brands, designers, artists and entrepreneurs access to prime retail spots in key stations around London including Baker Street, Old Street, Piccadilly Circus and St James’s Park. The move is hoped to raise £3.5bn which will go towards regenerating the capital’s transport network, while giving millions of commuters an innovative way to improve their experience of the transport system. The first 15 retail units to transform into pop-up shops will be rolled out at the end of April – let’s hope the impact on the morning rush-hour frenzy is minimal.
Do you feel lucky? Well, you should. At least that’s if findings from Aldermore Bank ’s quarterly SME Monitor are anything to go by. The report reveals that wages in SMEs were up 1.2% year-on-year for the fourth quarter of 2013, with labour costs accounting for around 30% of total business expenses. The confidence index for SMEs had also more than doubled at the end of 2013, climbing to +39.7 from a relatively poor +16.0 at the tail end of 2012. More of the same next quarter please. Boris Johnson has set his sights on
making London Town the tech capital of the
Shop ‘til you…get on the escalator? Don’t mind if we do. Thanks to a new collaboration between Tfl and Appear Here, the online marketplace for short-term rentals, unoccupied retails spaces within the underground will be
NEWS & EVENTS
world by launching the inaugural London Technology Week – to take place later this year. “London is at the forefront of digital innovation, with tech giants thriving here as well as dynamic new start-ups,” proclaimed BoJo. The first Tech Week is set to draw in tens of thousands of people from across the globe, providing an unrivalled opportunity to showcase London’s technology credentials. Business leaders and tech pros will also have the opportunity to take part in several events, from boutique networking opportunities to open days. It’s definitely one not to miss.
In line with his blond ambition to drive London’s tech position and ensure it has one of the fastest networks in the world, the mayor also launched a £23m scheme to provide high-speed broadband connections for more than 9,000 small businesses in the capital. The scheme, financed by the £150m Urban Broadband Fund (UBF), is part of government plans to create 22 super-connected cities across the UK. Given the importance of high-speed broadband and the integral role it plays within shaping business today, the scheme will enable data-hungry companies to thrive against larger businesses in their respective regions. Johnson also promised that small businesses within the Greater London area will be able to apply for a voucher of up to £3,000 to assist in the costs of obtaining high-speed internet.
UPCOMING EVENTS UKTI UK - Winning and delivering business overseas (Multi-Sector) April 8 – 9
Many have pledged their support to the growth of SMEs and it seems as though some people are putting money where their mouth is. A new data innovation contest launched by IC Tomorrow gives small businesses an opportunity to bolster their tech departments with a share of £125,000. The contest, which seeks to explore digital innovations in data, will also hand the top five start-ups the opportunity to work with some esteemed
Elite Business National Conference & Exhibition April 10 – 11
Old Truman Brewery 91 Brick Lane Shoreditch London, E1 6QL
Key Person of Influence PitchFest April 8
Business Junction Networking breakfast April 16
Copthorne Tara Hotel Scarsdale Place Kensington London, W8 5SY
It appears that 50 might well be the new 20 thanks to the vision of new startup Trading Times. The company is on a mission to boost small businesses and start-ups by matching them with the largely undiscovered resource pool of the over-50s. Backed by Nominet Trust, the public purpose internet company known to invest in tech-focused social programmes such as Tech for Good, the Department of Health, UnLtd and the London Borough of Barnet, the service is deemed a flexible and affordable way for small businesses to grow while avoiding expensive agency and employment costs. With their skills and more flexibility in working schedules, this age group is still ripe for the picking and local employers should be queueing up to snap them up.
Imperial College London 170 Queen’s Gate London, SW7 5HF
business leaders, including EE and the British Library. Get those applications in by May 7. Last but not least, with the current focus on tech, it’s only fitting that some bottom line projects are implemented. The Cyber Security Skills: Business Perspectives and Government’s Next Steps report, recently published by the
Department for Business, Innovation & Skills (BIS), revealed plans to improve cyber
security, such as new internship schemes to provide students with the work experience employers are looking for. As well as plans to provide training for teachers to enable them to teach pupils from age 11 about cyber security, other titbits from the report involve increased support for activities to inspire more people to consider a career in cyber security and improved support for universities who develop innovative proposals to improve the education of cyber security.
Business Scene Birmingham Business Scene April 16 55-59 Newhall St Birmingham B3 3RB
Angels Den Crowdfunding Club April 22 Edwards Wildman 69 Old Broad St London, EC2M 1QS
Smith & Williamson FRS102 Workshop April 23 Bristol
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A full event listing is available on our website: elitebusinessmagazine.co.uk/events
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Exporting chance? Did George Osborne get it right with his budget pledge on exports?
It’s SMEs that need to drive the change George Osborne gets it. Exports are essential if Britain is to have a sustainable, balanced recovery. Today’s improvement is mostly based on growth in consumer debt rather than Ian Baxter earning our way in the world. I was therefore founder pleased to see the chancellor double the export Baxter Freight finance facility to £3bn and cut its interest rates to the lowest of similar nations. This, along with other help the government is giving exporters, is welcome, but it is still small compared to Germany and France. It cannot possibly be enough for the government to hit its own target of doubling exports to £1tn by 2020. To me though, the issue is not fundamentally about government finance. Export credit is most suited to major engineering projects in developing countries and is mostly taken up by a few large companies. If we are to really become an exporting nation again, it’s SMEs that will need to drive the change. They’re more likely to be secondary manufacturers of light industrial or consumer goods, consultants or in IT. It’s these companies that need to be inspired to export more especially to developing nations. As well as bringing faster, more profitable growth and market diversification, engagement with new markets will test the strength of UK companies’ offer abroad before foreign companies take away their market at home. In a global marketplace I see exporting as an essential 17 part of UK companies’ activity. There really is no alternative if we are to be winners in the global race.
SMEs still face expense of bringing foreign currency profits home
WORDS: JOE JEFFREY
t was hailed as a budget to champion ‘the makers, the doers and the savers.’ In his penultimate budget before the next general election, the chancellor needed to nail it. Bingo duty tax slash excluded, one of the most exciting things to have come out of George Osborne’s speech was the doubling of the amount of finance available to UK exporters, rising from £1.5bn to £3bn, whilst cutting interest rates by a third. Some SMEs may previously have been reluctant to take the plunge in overseas markets owing to the costs involved. Consequently, this newfound opportunity to dip a toe in the water and begin to embrace export, as opposed to exclude it, was rightly lauded. However, with the government hoping to double British exports to £1tn by 2020, we have been left wondering whether the chancellor has actually gone far enough with his budget pledge. Or are we asking too much?
Talking point.indd 1
On the face of it, the statements made sounded positive. However, the truth of the matter is that small and medium-sized businesses, especially those new to exporting, are often Helen Scott unaware of how much the banks are actually founder charging them for foreign exchange deals. 4X Currency The government announced that it wants to help small and medium-sized businesses to export. A new lending scheme will go some way towards this, but once they are actually exporting, these small companies are faced with the expense of bringing their foreign currency profits back home. Whilst large companies are dealt with by the banks’ treasury departments and have access to competitive foreign exchange rates, small businesses are routinely charged up to 5% of the value of the trades to convert profits back into sterling. There are some great small to medium-sized companies in the UK that could really benefit from export opportunities. The budget has given us a great opportunity to shake up the foreign exchange sector and showcase the opportunities that exist for SMEs. The banks dominate the international payment sector, but they are not set up to support smaller businesses with foreign exchange and typically charge them far more than they do larger companies. Smaller companies need to gain access to export in the first place, but once they’re up and running they also need to consider how to hang on to their profits.
The Go-To Expert – How to grow your reputation, differentiate yourself from the competition and win new business Heather Townsend and Jon Baker
f there was ever an award for a book title indicating exactly what it ‘said on the tin’ or for that matter what invaluable information it contained within its pages, The Go-To Expert would possibly be in the front running. Although a smaller font may be required for trophy purposes, given its extremely long title. The two authors share a wealth of experience themselves. Townsend specialises in helping people become go-to experts in their respective fields and her previous award-winning book, The FT Guide to Business Networking, was met with much praise. Co-author, Jon Baker, prides himself on having over 25 years’ industry experience and mainly specialises in helping small businesses grow sustainably. All things considered, a reader certainly gets the feeling that they’re in safe hands. Despite the title lacking a nice ring, the book more than makes up for itself in content. It aims to provide the reader with clarity and confidence in order to make them stand out in a crowded market place and is an essential read for those wishing to be – yes you guessed it – the go-to person within their field. It does this by offering advice on self-marketing, teaching the reader how to build a firm foundation to win business and establish his or her own niche. The book also references social networking for the purpose of self-promotion, which is no wonder considering Townsend himself has over 9,500 Twitter followers. Easy and enjoyable to read, The Go-To Expert is an invaluable guide to making your business better, written by the experts for the wannabe, go-getting expert in their field. JJ
The Social Media MBA Guide to ROI – How to measure and improve your return on investment Christer Holloman
n The Social Media MBA Guide to ROI, Holloman kicks things off by saying that “social media is a must for every business, but only when the time is right for that particular business.” Nevertheless, the crux of this text is not so much the importance of social media to modern day enterprises, but how one goes about measuring the returns that it brings. Indeed, those who doubt the power of social media business often do so because they fail to recognise the actual value it can add to a business. Whilst many authors may approach the subject of social media ROI in a needlessly complex manner, Holloman keeps it simple, something which will definitely be welcomed by those entrepreneurs who – perhaps inexplicably – haven’t yet jumped on the social media bandwagon. By honing in on each of the most popular social platforms – as well as those that help with measuring ROI – Holloman manages to provide readers with a solid overview of the current market in less than 150 pages. There probably isn’t that much for experienced social users here. But, with case studies from the likes of O2 and Cisco to back things up, this is nearing on a must-have for social media newbies. AP
Publisher: Wiley Out: May 2014 Price: £19.99 Publisher: Pearson Out: Now RRP: £21.99
Book Reviews.indd 1
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THE ELITE INTERVIEW
“Making nail polish is a complicated process. It’s not an industry cowboys would go into”
As the recession THE ELITE INTERVIEW put paid to many entrepreneurs’ plans for world domination, Nails Inc, founded by Thea Green, went from strength to strength
A POLISHED PERFORMANCE A
WORDS: HANNAH PREVETT PHOTOGRAPHY: EMILIE SANDY
s Thea Green arrives in the dimly lit Oxford Street Debenhams store (it’s before opening hours) she chatters away happily about the morning’s school run. “My son pointed out that I said ‘goodnight’ when I dropped them off this morning, rather than goodbye,” she laughs. If she is a little frazzled from running a £25m turnover business and bringing up a young family you’d never be able to tell. Slipping on a pair of Manolo Blahniks and shedding her jacket to reveal a stylish Victoria Beckham dress, in a flash she is transformed from schoolrun mum to chic business owner. Her apparent ease in front of the camera should come as no surprise. Green has form when it comes to fashion, having been the fashion editor of high society magazine Tatler before founding Nails Inc. “I always wanted to work in fashion,” she says. Growing up on the Wirral, near Liverpool, she describes an idyllic childhood spent by the seaside. She was inspired largely by her father who spent much of his career at Littlewoods, where he eventually became director. “Littlewoods was one of the first companies to ever do celebrity ranges and they did all of this stuff with the stars of Dynasty and Dallas. He used to go on photo shoots all over the place with people like Linda Gray, which I thought was terribly glamorous,” she laughs. The appearance of fashion bibles including Vogue on the coffee table further galvanised Green’s early ambitions. “Even when he was no longer a buyer himself but was running a team of buyers, he used to have all of these magazines that he’d read for inspiration. They were all the international magazines: American Vogue, French Vogue and Amica, a very trendy Italian magazine,” she explains. “I used to go through and pull things out and come up with all these mock-ups and mini magazines.” While her parents were happy for her to indulge her passion for fashion, the same could not be said for Green’s school. She says her teachers at Birkenhead High School, a prestigious Girls’ Day Trust School, were “disgusted” with her decision to apply to the London College of Fashion rather than a traditional red brick university. “To get into London College of Fashion, you didn’t fill out a UCAS form, it was the same form you’d fill out if you wanted to go and do an HND course. They said it was the first time anyone in their school had ever filled out one of those forms and they were absolutely appalled,” she reports. “They even called my parents in for a meeting.” The school’s disapproval did nothing to dissuade Green from following her chosen route and in September she began her fashion journalism degree at the London College of Fashion. “I moved from the Wirral to London at 18. It was amazing. I was always coming to the capital – from a really early age, I’d really wanted to move to London as soon as I could,” she says. “My friends were going to Leeds and Manchester and all around the country and I had absolutely no idea why anyone would want to go anywhere but London,” Green smiles.
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THE ELITE INTERVIEW
That’s not to say that living in the capital wasn’t a shock to the system. “I don’t think I’d ever thought about the logistics of getting around London versus the Wirral, where you drive everywhere in next to no time. I was lost for a year,” she admits. Whilst Green remained baffled by the city’s geography, she got to firm grips with her degree programme. “It was a great course, both in terms of industry knowledge but also amazing contacts. If you wanted work experience there were always opportunities to do so,” recalls Green. Placements at a couple of PR companies followed, as did a long stint on the Daily Mail. Then when a colleague on the paper left for Tatler, Green saw an opportunity. A work experience placement evolved into a full-time job when she graduated. “It wasn’t an easy place to just walk in and get a placement but once you were in, I think if you proved yourself you could start quite quickly.” She impressed then-editor Jane Proctor, who fast-tracked her from fashion assistant to
fashion co-ordinator, deputy fashion editor and finally fashion editor by the age of 24. It was at this point Green left Tatler to found Nails Inc with Marie Therese ‘MT’ Carney. Although she’s come under fire for her no-nonsense approach to magazine editing, Proctor has quite a reputation for breeding entrepreneurial talent: Net-a-Porter founder Natalie Massenet also came from the Tatler stable. Whilst the overlap between journalism and running a business may not be immediately clear to most, Green says there are some commonalities. “I did an awful lot of budget stuff at Tatler. At the time, the magazine ran on unbelievably tight budgets and 90% of what we had to negotiate was free. We were doing hugely glamorous, expensive-looking shoots on hundreds or a couple of thousand pounds. I liked the fact that they would give you a £2,000 budget for something that should’ve cost £20,000. I loved the problem-solving aspect of it,” she elaborates. Her ability to manage tight budgets and run
projects on a shoestring paid dividends when starting Nails Inc, the idea for which had been formulated during a trip to the US. “I was backwards and forwards to the States all the time when I was at Tatler and there was this culture where everyone would get their nails done. What I liked about it was it was nothing to do with economics. It didn’t matter if you were on a starting salary on a magazine, you’d get your nails done. Likewise, if you were on a fivestar holiday, you’d also get your nails done.” She did, however, spot some flaws with the current model. “It was fast and efficient but it wasn’t a nice, relaxing environment and it wasn’t branded nor had a clear identity of any kind. I wanted to take some of the ideas from that, some of the learnings, and then give it a much clearer identity.” But opening bricks and mortar stores isn’t a cheap undergoing; Green and Carney’s first task was to raise some capital. Initial conversations with VCs were fruitless, despite a promising start. “It was the dotcom bubble and we could’ve raised a lot of money if we wanted to do an internet business. VCs were throwing money at women in particular,” says Green. “But ours wasn’t solely a dotcom business. It had a dotcom element to it but it was on page 20 of the business plan rather than on page one.” The pair decided private investment may be a better route and borrowed £250,000 from wealthy individuals to kick-start the business. The first Nails Inc store opened on London’s South Molton street in 1999 to a rapturous reception. London’s time-poor women, it seemed, were desperate for their 15-minute manicures. The products began to fly from the shelves too. There are more than 100 different shades in the Nails Inc collection, all named after streets, boroughs and landmarks in London. From a ketchup red monikered ‘Portobello’ to a glossy topcoat caviar: ‘Kensington’, of course. There are all the accessories one might associate with manicures too, including files, polish remover, transfers and correction pens. The company also diversified into false eyelashes, currently available at Boots. “It’s a tiny part of our business,” says Green, hinting that Nails Inc lashes’ days may be numbered. “If anything we’ll go strictly into doing more nails.” Until recently, all of the polishes were manufactured in the UK but this has become more difficult as the business has expanded internationally. Whilst the majority of production continues to take place in the UK, Nails Inc now manufactures in Europe and the US to meet the demands of its ever-growing customer base. Green isn’t unduly worried
“There would never have been a perfect time in Nails Inc to have children – I’d be about 60 before that was a good idea”
Poppy Delevingne is the current face of Nails Inc
THE ELITE INTERVIEW
that the quality of production will suffer as a result of no longer being centralised on home shores. “Making nail polish versus most makeup is a fairly complicated process,” she explains. “It’s a chemical product so it’s very technical, it’s very expensive and you need to employ experienced, high-level chemists. It’s not an industry cowboys would go into. It’s an industry for people who really understand chemical manufacturing.” As consumers snapped up Nails Inc products, the services side of the business flourished too. Rather than opening myriad standalone stores, Green and Carney instead opted to partner with department stores to offer manicures as an in-store service. “Opening nail bars in department stores was something we evolved into. We always thought we’d sell products in department stores, but we’d not thought about doing nail bars in store. But nail bars in department stores was an easier way of rolling it out as you can open ten bars quite quickly versus finding ten standalone stores. In most department stores we were the first ever service – there were no blowdrys, no threading services or teeth-whitening and all of the other things you find in stores now.” At this point in the business’s evolution, Carney decided to leave the business – and Blighty – in order to return to the States with her husband whose job had been relocated. Becoming the sole person at the helm was a difficult adjustment, admits Green. “It was tough,” she says. “What I did very quickly was started to employ some great people. MT and I had been just us two without much of a support structure around us. So I felt the gap and then went and found great people.” The business certainly hasn’t been held back by the departure of its cofounder. Nails Inc now has 50 nail bars in the UK and Ireland, employs 400 people and turns over £25m. While many high street businesses hit the runners during the recession, nail bars thrived. Between 2009 and 2012 nail bars accounted for 16.5% of new outlets. Green relates this spike in the market to women’s desire to look and feel great – but without forking out a fortune on clothes. “The nail market exploded during the recession and I’m sure that was because it’s a fun, fashionable way to experiment and to buy into fashion without having to buy clothes that are expensive,” explains the businesswoman. “I think more than most other makeup products, people think about nail polish as being more of an accessory.” Indeed, Nails Inc describes itself as a fashion business rather than a beauty business. As a result, it remains close to the bosom of the fashion world, with a presence at New York and London Fashion Week. It’ll often work with designers, matching nail polishes to new collections and getting models runway-ready. In February this year, a Nails Inc team worked with Victoria Beckham for her show in New York. “I love her clothes; I think she’s fantastic,” says Green. It’s fair to say the affable entrepreneur keeps her finger on the pulse of all things cool and chic, drawing inspiration for new polishes from colours and textures she finds in magazines and on the runway. “I have a full-time product developer here and we have a creative team but I still lead the way
in terms of product development,” she says. “I still love creating products. That’s the nice bit of the job you do when you don’t want to do the hard stuff,” laughs Green. It’s a balancing act – both in the office and at home. Thea’s husband, Nick, also runs a successful business and they have three children between the ages of four and ten. “There’s no particularly easy solution and I’m sure like most people I feel sometimes I’m not doing it perfectly everywhere and am a bit pulled in too many directions, but at the end of it I wouldn’t change a thing. There would never have been a perfect time in Nails Inc to have children – I’d be about 60 before that was a good idea,” she jokes. Back at Nails Inc HQ in London’s West End, Green has more pressing concerns. “We’re 15 years old this year and we’ve been redesigning our logo and our bottle,” she explains. Elite Business was treated to a sneak preview of the new bottle and all we can say is it’s been worth the slog. It was dreamt up by acclaimed fragrance bottle designer Fabien Baron who came up with the famous Jean Paul Gaultier bustier bottle, amongst others, and is expected to hit shelves this August. “I knew it’d be a challenge but it’s been worse than I thought,” Green says. “Creating the bottle was very easy, integrating the bottle into our business has been challenging. You don’t realise how much the Nails Inc bottle is in everything and on everything so everything has to change. It’s a bit like starting up a new company actually because nothing is the same,” she says, only half in jest. Still, even the greatest of work stresses don’t keep her from getting solid shut-eye. “I always sleep brilliantly,” she says. “I sleep brilliantly even if I’ve got something stressful going on. I’ll go to bed and say: ‘6 o’clock tomorrow morning I will fix this, but right now I’m going to sleep.’”
“I still love creating products. That’s the nice bit of the job you do when you don’t want to do the hard stuff”
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ONE TO WATCH
It takes some guts to turn down the Dragons. But it couldn’t have worked out much better for James Roupell, founder of BoBo Buddies
WORDS: ADAM PESCOD
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oBo Buddies founder James Roupell is a born entrepreneur if ever there was one. “My father set up his business the year before I was born so I was brought up in a very entrepreneurial environment,” he says. “I’ve always known that I wanted to follow in my father’s footsteps and run my own business.” Roupell, 26, was nevertheless eager to get on the entrepreneurial ladder at an earlier age than his dad. “I’d always known my father working for himself but he’d done so whilst also having the pressure of a family, a house and a wife to provide for,” Roupell reflects. “Because I’m still young, I have none of those responsibilities that come with later life.” There’s also another family member to whom Roupell is grateful. When he was a child, his grandmother sewed a blanket into the soft toy that he carried everywhere with him. “It is still on my bed, tragically,” Roupell laughs. Little did he know then that it would inspire a product that is now stocked by Fenwick, Harvey Nichols, Liberty, Debenhams and P&O Ferries – and is selling in no less than eight countries. Put simply, BoBo Buddies are soft toy animals that double up as backpacks, with one range coming complete with pillow and blanket. It’s rather fitting, therefore, that Roupell enlisted his gran to assist with their design. “It was quite nice that she had a big part to play in making the prototypes and getting me on my way with the business,” he says. The name of the company has a story behind it too. Roupell explains that nobody ever calls him James, instead preferring Jimbo or, alternatively, Bobo. “It’s a nickname of a nickname,” he jokes. Whilst the BoBo part is relatively self-explanatory, more thought went into what follows it. “Originally my parents would ask me how
ONE TO WATCH
the BoBo Bags are going but BoBo Bag was a bit sterile so we wanted to come up with something a bit more fun and kid-friendly so BoBo Buddies just came and it worked,” he explains. “The whole concept of the original product was that it’s the child’s buddy wherever they go. It’s their connection to home when they to go to nursery school.” Roupell’s journey thus far has certainly been a whirlwind. In January 2012, after leaving Becothings – an online retailer of eco-friendly baby products – Roupell took a holiday. It was on the flight back that he realised his grandmother may have helped him strike gold. “I saw all these kids with soft toy pillows and blankets with their parents lugging them around on a plane. It suddenly triggered the thought that I was brought up with a product that was really convenient, that held everything together.” Two years at Becothings had given Roupell a decent grounding in the industry and he promptly set to work. But he needed a little extra help. “Not coming from a design background, I needed to understand the process that people go through,” he says. “I began to get a team of people who were able to really help me.” And after some initial frustrations with time differences, he jumped on a plane to China to seal the deal on a factory. “I gave myself three weeks in China to meet everyone, not only to make sure that the factories were all good, professional outfits but I also wanted to look these people in the eye and make sure that I trusted them and that they trusted me.” It was worth the trip. Roupell returned home with four prototypes and hit the button on the first shipment. “To go from an idea on a plane in January to launching the product nine months later was virtually unheard of but it was just something that I absolutely wouldn’t let go,” says Roupell. Success was still far from certain though. As Roupell admits, “I was very nervous because I had ordered 4,000 units not knowing whether people were going to like them.” However, after selling out at a multitude of Xmas fairs, Roupell knew he was onto a winner. When the retailers were also bowled
“People like the fact they are backing something that is growing as opposed to a big corporation that churns out products left, right and centre”
Company CV Name: BoBo Buddies Founded by: James Roupell Founded in: 2012 Team: 3
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ONE TO WATCH
over, he realised the time was nigh to seek some outside help. “The irony with any business is that the more business you get, the more money you need to supply that demand,” he says. It was only by chance that a BBC producer approached him at a show and suggested he enter the Den. “I needed a cash injection from somewhere so I thought Dragons’ Den might be the right route to go down.” For those who didn’t see Roupell’s performance in front of the Dragons, a trip to Google is probably in order. It’s not often that all five investors are convinced to make an offer but Roupell had them chomping at the bit. He negotiated hard, eventually accepting a joint offer from Peter Jones and Deborah Meaden who offered £50,000 for a 40% stake, reducing to 30% upon the fulfilment of certain objectives. This was despite Roupell’s initial indication that he wouldn’t part with more than 25%. “I had a very clear idea of how much money I needed and what I was willing to give away. You then go into the Den and it is a very surreal environment. You are surrounded by film crew and cameras with these celebrities in front of you.” As soon as he stepped into the lift, Roupell regretted his decision. He needed some advice. “I have a network of people who have helped me get to where we’ve gotten. I mentioned that I’d been in the Den and that I needed some money because I had some orders to fulfil.” He ended up getting more than advice. “One guy said he’d be more than happy to offer me the money as a loan with no equity involved. It was a no-brainer. I went back to the
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Dragons and they were very understanding, they were very kind and they have checked up on me since to see how I’m doing. There was no love lost.” Roupell firmly believes he did what was best for his business. “I was quite excited by a lot of the aspects of working with them but ultimately I had to make the call and I always believed that I could make it without them,” he says. “My father owned 100% of his business when he sold it so I have always known the importance of keeping control of your own company, even if it might take longer and it might mean more hard work.” Despite pulling out of the deal, Roupell has absolutely no regrets about the experience – and no wonder. He has worked with 300 retailers in the last 16 months and the product is reaching more kids and parents every day. “It has been absolutely amazing for my business,” he says emphatically. That’s not to suggest it’s been an easy ride. Being on the shelf next to Winnie the Pooh and Disney come with its fair share of challenges. “These brands are chucking themselves in front of children on TV or wherever they are,” comments Roupell. However, the young entrepreneur is optimistic that being a newcomer to the market – and one with a story to tell – puts BoBo Buddies in a solid position. “People like the fact that they can relate to it and think they are backing something that is growing as opposed to a big corporation that churns out products left, right and centre,” he says. Such is his confidence in the product, Roupell has ambitions to team up with a larger toy brand in the future to help drive the BoBo brand forward. Until then, the focus is on improving the product where possible. “We want our toys to be softer, we want them to be cuter, we want them to be more functional than anything else out there.” There is also scope for new products under the BoBo brand. Amazingly, Roupell still operates the company out of his home in Clapham, south London, but he is eyeing a move to a more central location soon. “The motivation for me is to see this thing evolve into something that begins to run itself with a fun, young group of people who all believe that we can take over the world with this brand.”
“My father owned 100% of his business when he sold it so I have always known the importance of keeping control of your own company”
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01/04/2014 24/03/2014 20:48 14:38
WORDS: JOSH RUSSELL
Revolutionary inventions no longer filter down from corporate research to SMEs; in fact innovation has increasingly become a conversation taking place between companies – regardless of their size
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There can hardly have been more column inches dedicated to anything over the last decade than innovation. Disruptive ideas have become so vital in setting the pace of modern business that many sectors commit huge amounts of time trying to predict where the next Instagram or WhatsApp will come from. It’s pretty well accepted that this is as likely to come from a piece of crowdfunded consumer tech as a corporation but it hasn’t always been this way. The sources of revolutionary ideas have never been static and whilst corporate R&D became one of the dominant trends of the 20th century, this is far from being the whole story. “If you go back to the 1880s, most of the inventions came from outside the established companies,” comments Professor Ashish Arora, professor of the economics of innovation and technical change at Fuqua School of Business, Duke University’s international business faculty. Gradually, with the rise of the corporation, influence in the business world began to solidify within larger organisations but it is important to remember this is a relatively recent phenomenon. He says: “Corporate R&D actually came into its own somewhere around the 1920s.”
As a paradigm, corporate-led innovation became a significant source of new ideas during the middle of the last century, with the power of commercially funded R&D and labs kicking off a range of trends such as mobile phones. However, since the 1990s, this has been in decline. Rick Eagar, partner and head of the UK technology and innovation management practice at Arthur D. Little, the international management consulting firm, says: “Whilst ten or 15 years ago innovation was largely the province of R&D, that has now completely changed in most companies.” This has helped to overturn many assumptions about innovations, particularly the idea that one could innovate simply by throwing enough money at the problem. Whereas progress was once the domain of those with the most significant financial resources, something else has now taken up the mantle. “We’re almost at a new era,” says Eagar. “It’s characterised by the need for companies to be much more ready to transform themselves.” Agility has actually become an invaluable resource. Glyn Britton, managing partner at Albion London, the creative agency, recently chaired an Albion Society event discussing these issues with a selection of business figures and entrepreneurs. “The way innovation happens has completely changed,” he says. Britton gives an example to illustrate his claim. One of the UK’s biggest players in the innovation and R&D space just a few decades ago was BT, its global innovation and development centre Adastral Park giving it a huge lead over smaller firms in ensuring it had access to the newest ideas. “Its only competition in that space came from other very well-funded, nationalised telecoms organisations,” he explains. “Then Skype comes along, started by a team of six or seven software engineers, and destroys a large part of their international calling business.” Clearly the rapid rise in the power of the internet and the power of independent developers has played a big part in this disruption. But another, deeper factor is that these things have created an era of empowered consumers who are highly aware of the options available to them. “Customers have a huge amount of power to decide to go somewhere else, to decide that they want different products and services than the ones you provide,” Eagar explains. This has meant that the captive audience large companies once took for granted has vanished. He continues: “Business models get disrupted much more quickly.” With corporates’ control over innovation waning, this can mean only one thing: their loss is very much start-ups’ gain. “The way innovations are created has changed and new players have started to grasp that,” comments Valerie Mocker, senior researcher on start-ups and entrepreneurship at Nesta, the innovation
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charity. “Start-ups are definitely one of them.” One of the most significant shifts in recent years is that small enterprises have become more and more essential in bringing new ideas to the marketplace. “As part of the innovation ecosystem, start-ups have probably been one of the important drivers in terms of delivering innovation and new services to society,” Mocker explains. Increasingly smaller companies are the ones introducing the newer ideas revolutionising the way we do things. “It’s easier for SMEs to disrupt large companies than it used to be,” says Eagar. Whilst this is influenced by the easy availability of technology to a much wider base of businesses than ever before, there are also other factors at work. He elaborates: “It’s also because SMEs are better able to weave together value chains than they used to be, business eco-systems are a bit better developed and there’s more collaboration.” As previously mentioned, agility has also become hugely important in being able to react to a rapidly shifting marketplace, something the majority of start-ups are incredibly well equipped to do. Mocker explains this by way of an analogy. “Start-ups are like speedboats; they’re very fast, they’re small, they’re manoeuvrable,” she says. “When they have new ideas they can quickly put them into practice.” In comparison, large corporations often suffer from inertia: whilst they may have a significant driving force
“Whilst ten or 15 years ago innovation was largely the province of R&D, that has now completely changed” Rick Eagar, Arthur D. Little
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“As part of the innovation ecosystem, start-ups have probably been one of the important drivers” Valerie Mocker, Nesta
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behind them, when it comes to being able to react quickly to change they are at a major disadvantage. She continues: “When you look at the largest companies, they are more like big oil tankers.” But whilst it’s tempting to put start-ups on a pedestal as being leaner and fitter, they have another advantage which has nothing to do with their relative merits. “It may not be that small companies are better; it’s just that there are many more of them,” says Arora. “Just the scale of experimentation may dwarf even the ability of large companies.” This means that, when trying to understand their role in the innovation ecosystem, evolutionary metaphors may actually be more appropriate, with many failing and expiring for every organism that finds a vital new niche. He continues: “What we see out of successful small companies is that there must be legions of small companies that try some experiments that end horribly.” This is something Mocker concurs with: “Start-ups are a very risky business; a lot of them fail.” Fortunately, start-ups have a secret weapon that means they’re often able to throw themselves into these scenarios and seek to do things differently: entrepreneurs. She explains that often entrepreneurship is self-selecting and certain types of people will be drawn to trying to do things in new ways, even if it involves a risk. “A certain type of person is more likely to be innovative and willing to do things in new ways than maybe other people.” In comparison, large companies are notoriously risk averse. Whilst start-ups often have the energy and drive to throw themselves at a problem, even if it has the potential for failure, corporates just have too much at stake. “The key to innovation is essentially conducting market experiments,” Arora explains. “But large companies have decided that they’re simply not well placed to manage those experiments.” Beyond standard risk aversion, corporates simply have too many commitments to truly dedicate themselves to the sort of rapid, iterative development conducted by the mass of SMEs in the market. “There is increasing pressure for corporates to work very efficiently and maintain quarterly reporting cycles,” says Britton. “That pressure for efficiency has killed that kind of slightly purposeless experimentation.” Moreover, he explains, there is an increasing currency being given to the
idea that this isn’t even desirable in a large company. “Some people argue that it’s not the job of a corporate to innovate; it’s the job of a corporate to scale and defend IP, rather than create it.” This is where more traditional routes to gaining access to IP come in, to which there are several key approaches. “There are companies that are good at buying technology, integrating them and then introducing products out of them,” Arora comments. “You would think of Microsoft as a good example of that.” Others tend to wait until a company has achieved more significant market penetration, before approaching it for acquisition and running it through their corporate engine to help it scale. He continues: “You can think of companies like Johnson & Johnson that have that as their metier.” But, despite the huge amounts of attention dedicated to high-profile acquisitions of innovative start-ups like WhatsApp, there is an increasing understanding that bringing an innovative business into the fold isn’t always the best approach. In fact, in the words of Eagar, this can simply cause a ‘tissue rejection’ when the two cultures clash and are found to be incompatible. Arora also feels this is something we have seen a little too often. “There have been spectacular failures where large sums were paid to acquire something,” he says. “That company, once it was acquired, was treated like a stepchild by the existing businesses who didn’t see the potential or were threatened by it and the company eventually took a large write-off.” Corporates aspiring to harness the real value of external ideas are increasingly recognising that keeping innovation alive can often mean allowing a valuable brand the space to function. “There is a recognition that it’s not easy to integrate some of those really innovative projects within a company’s own framework,” Eagar says. “They understand that at times you need to release that group from the shackles of productivity.” This is leading to a more nuanced approach to working with innovative start-ups that isn’t solely about possession but is focused more around access to resources and ideas. Mocker comments: “This is why you’ve increasingly seen over the last few years corporates coming into this space and trying to build mutual and beneficial relationships with start-ups.” Whilst disruption is often presented as a threat that can only be fought off by
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acquisition or aggressive competition, it actually provides a vital opportunity to learn from each other. “Start-ups are watching out for other start-ups; not just as potential competition but also in terms of ways they can maybe work together and be innovative together,” explains Mocker. “And the big corporates are also watching out in terms of gaining access to innovations.” In fact, it’s important to recognise that no innovation now hitting the market is developed in a vacuum. With a culture of application programming interfaces (APIs) allowing people to build apps that interact with another’s platform and an increasingly networked approach to the sharing of ideas, it has become almost impossible for any company – start-up or corporate – to innovate without listening to its contemporaries. Arora says this is reflected in innovation trends across US manufacturing. He explains: “With one out of every two product innovations, the innovators claimed that the
"With one out of every two product innovations, the innovators claimed that the basic invention came from outside" Professor Ashish Arora, Fuqua School of Business
innovations – the basic invention or prototype – came from outside the company.” This is certainly one factor behind the recent explosion of co-working spaces, accelerators and incubators in the world of enterprise. With innovations and new ideas developing so rapidly, it’s become essential for businesses to rub shoulders with the companies and concepts that might be the next to revolutionise their sector. The lure of potentially having a stake in the next exciting development to hit your market is something few can ignore. Moreover, there is a subtler benefit to being involved in the fostering of future inventions. Mocker draws on the example of EY’s recent explorations of this space. “They have the Entrepreneur of the Year awards programme and they’re now holding these kinds of networking events,” she says. She maintains one of the key drivers behind this sort of involvement is because companies are
recognising the additional kudos this can give them. “Beyond the acquisition and being motivated to get a product out of it yourself, there’s also this hype around this innovative, hip culture,” she explains. “Big firms want to be a part of that.” Ultimately, regardless of the mechanisms you use, engaging in conversation with other businesses, big and small, is going to be essential to ensure your business stays relevant. Speaking at the Albion Society event, Gav Thompson, the creator of giffgaff, the mobile virtual network operator, and global director of insights & innovation at Telefonica, the global mobile communications giant, summarised things very succinctly: “Not all innovation can come from inside: [...] an important part of the secret source is looking at innovation outside.”
Having worked with big corporate clients like HP, Aviva, BP and Virgin Media, Mubaloo, the enterprise and consumer mobile app development company, is no stranger to innovating on behalf of larger industry players. There are several factors that drive corporates to employ Mubaloo to develop for them. “One of the reasons that they choose to do things externally is the breadth of experience and perspective that an external company like Mubaloo might bring,” says Gemma Coles, the enterprise’s director of mobile strategy. But the firm’s expertise in and oversight of the app market isn’t the only significant motivation; its size also plays a part. She continues: “There’s the speed and the ability to mobilise teams quickly to do things.” However, Mubaloo’s support doesn’t simply stop at putting an app together: its mobile strategy team also assists boards and C-suite execs with longer-term learning and the creation of structures to facilitate mobile innovation long term. Coles explains: “That’s when the real transformation happens, when you’ve got senior backing for what the company’s wider approach can be, as opposed to it just being tactical here and there.”
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The public eye WORDS: JOSH RUSSELL
With the UK IPO market bursting into life, we take a look at how Israeli enterprise Wix’s recent floatation has impacted upon its trajectory as one of the country’s brightest tech firms
n light of the huge quantity of IPOs being announced on a seemingly daily basis – with King, creators of Candy Crush, Just Eat and Poundland on the roster of Britain’s most recent floatations – some are hailing it as the rebirth of the UK’s IPO market. But understanding how this might benefit the entrepreneurial ecosystem and whether listing is the best option for start-ups isn’t all that straightforward. Given Israel’s start-up climate isn’t dissimilar to the UK’s, we asked Wix, an Israeli cloudbased web development platform that recently listed on the NASDAQ, to walk us through its IPO. First, some background. “We still consider ourselves a start-up,” relates Omer Shai, the firm’s chief marketing officer, before admitting that the company actually now employs 600
“Israel is similar to the UK: it’s a difficult place to build a Twitter, Instagram and Pinterest”
The public eye.indd 1
people around the globe. “We have almost 44 million registered users and we are adding more than 1.3 million registered users every month,” he explains. However, despite a significant customer base and an international footing, Wix retains its entrepreneurial attitude, with each of its founders still holding active positions within the company. After it was founded in 2006 by Avishai Abrahami, Nadav Abrahami and Giora Kaplan, the first few years of Wix’s life was spent developing its platform, a set of plugand-play web development tools. Shai relates how an open beta was rolled out to consumers in 2008, which quickly began to pick up steam. With time, Wix has pivoted and adapted its offering: it has gradually transitioned into providing all of the tools a fledgling business needs to establish itself online. “We are much more than just a website builder,” Shai
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explains. “We have upmarket, external and internal business applications to give more comprehensive solutions.” Over the years, Wix has brought in some pretty hearty capital backing. The company raised $1m in angel investment and $3.5m in a seed round in 2007. Such was the company’s potential that it secured a successful series A round, even as the world entered into one of its most severe lending contractions. “It was the week of the Lehman Brother collapse,” Shai comments. “That was a small one.” Two more rounds of $10m and $40m brought the company up to a total investment of $61m; healthy by a lot of tech firms’ standards but not the sorts of figures that had been ploughed into firms like Facebook or Groupon by the time they listed. “Compared to other companies that have gone public, it’s not a lot,” says Shai. This is one reason Wix decided to IPO. “Israel is similar to the UK: it’s a difficult place to build a Twitter, Instagram and Pinterest,” Shai comments. The same cannot be said for the US, where the VC environment is such that series D and E rounds can help support further growth – something there isn’t as much capacity for in the UK or Israeli markets.
“IPOing was the best way to keep our independence” “There isn’t the funding that means companies can run on viral activity and know that money will come eventually,” he continues. “The culture is different.” Both in Israel and here in Britain, the most feasible end goal for a majority of startups is acquisition. This gives founders and stakeholders a decent return and often involves senior talent being purchased along with the product but it also means surrendering control – something that might not always be in the best interest of all those involved. “For us, it wasn’t even an option,” Shai explains. “We knew in order to survive we needed to bring in the money but at the same time we had to continue to build the brand in a way that best served our users.” Relinquishing control simply wasn’t in the enterprise’s interest or that of the many
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businesses that rely on it. In 2011, it was reportedly offered a deal that placed a valuation of over $200m on the company – a figure that would tempt many entrepreneurs. Shai’s response is vague. “We had some discussions but we weren’t interested in the offers,” he says. In part, the team’s resistance to partnerships or acquisition was down to the fact that Wix, unlike big names such as Facebook and Twitter, wasn’t just an expanding platform that was still to monetise. “Wix isn’t just a story,” Shai says. “We earn money.” As it has been built on a freemium model – building a loyal customer base whilst simultaneously generating revenue through value added services – the company has been drawing a significant amount in subscriptions. In fact, at the time of the aforementioned offer, Wix was generating several hundred million dollars a year in revenue. Effectively, Wix’s execs knew that they already had a sustainable model with a huge potential to scale, meaning that their focus was on ensuring they could grow without losing their grasp on the reins. Shai explains: “IPOing was the best way to keep our independence and keep doing what we’d like to do.” And, in November 2013, Wix did just that.
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Listing on the NASDAQ, the firm raised $127m from the sale of 7.7 million shares. “We’re the biggest IPO in the lifetime of Israel,” says Shai. Impressive stuff. But in reality an IPO is far from the end of the story for a business: it’s only the beginning. The prospect of taking on shareholders and the attached responsibilities in terms of corporate governance can give some enterprises second thoughts about going public. The fear that stakeholder expectations will restrict or damage an organisation’s culture is a fairly common one. But for Wix, it was business as usual. “Nothing changed,” says Shai. “A day after the IPO I already had four meetings with discussions about regular stuff.” Shai feels this is partly to do with the fact that the company wasn’t built to just exit or list. The IPO was never intended as an end in itself for the enterprise; it’s simply been another step on Wix’s journey. “We weren’t thinking about exits,” he comments. “We were building a business: we were thinking about how to scale, how to listen to the users and how to make the product better.” This means that after the IPO there wasn’t a lurching transition as the enterprise attempted to establish its next set of
goals: instead it was able to continue business as usual. Given that Israel’s start-up culture is more aimed at selling than listing – much like our own – a significant question remains: what impact does it have when a major company does break through and IPO? Essentially, it can also have huge ramifications for others in the ecosystem. “In Israel, Wix is a role model for other companies,” says Shai. Not only does the country’s more open-door business culture encourage start-ups to learn from their more established brethren but Wix is actively engaged in opening up access to talent from various international markets with its App Market. This means up-and-coming developers can serve their apps up to Wix’s customers alongside established entrants like Google, Instagram and Shopify. If there’s one lesson the UK should be taking away from the Wix story, it’s that the more companies that scale without ceding ownership, the more it opens the door for those that follow. “It’s not only the IPO,” Shai concludes. “It’s also about how we can help others to cross so many chasms in the process.”
“We weren’t thinking about exits; we were building a business”
The public eye.indd 3
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Far too many SMEs encounter problems with handling payroll because they don’t appropriately consider all of the challenges and procedures it entails. Payroll errors can be costly, from HRMC penalties to the time lost on rectifying the problem. So get all your ducks in a row now to avoid being beset by payroll problems later
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Angela Kinghorn, payroll specialist, Henderson Loggie
Money masterclass.indd 1
WORDS: DARA JEGEDE
accountancy expert, Intuit
A little less negligence, a lot more attention please – to the little details that is. Entering the correct information with regards to an employee’s national insurance, date of birth, address and tax reference can be the difference between passing or failing your payroll submission. “Having a formal name in there like William instead of Bill is important,” says Mark Paraskeva, CEO of the SME division at IRIS, the accountancy software firm. “When you’ve run payroll and send the data to HMRC, they’ll try and match that up against their records. If they find a mismatch, they will refuse the entry.” Another common mistake is not including a reference number with income tax and national insurance payments: “with no reference number attached HMRC will not know where the payment came from or which business it pertains to,” says Laura Hughes, training manager for Crunch Accounting, the online accounting company. “They’ll still accept the payment, but as it isn’t tied to your business they’ll issue a late payment fine, thinking you haven’t paid.” Close attention should also be given to dates. “If entered incorrectly, it means that the date on the payslip will be wrong,” says Bobby Chadha, accountancy expert at Intuit, the financial software company.
“The best software has safeguards built in that won’t allow you to make filing errors and combined with a good bookkeeper you should have nothing to worry about” Laura Hughes, Crunch Accounting
Be consistent and methodical Dealing with numbers and codes and lots of different details might play to the strengths of non-mathematically minded business owners, but having a routine and sticking to it should help simplify the process. “Setting a template with the tax references from HMRC on your bank account or having a direct debit can save you time and you don’t have to remember to do those things every month,” says Hughes, “If you make the payments yourself you can forget or be taken ill that day, but the payment needs to be made and HMRC will not care if you’ve been unwell.” Chadha says that consistency is very important. “From the beginning when a new employee joins the business, the P60s and the all the tax codes that are relevant to them should be recorded, for example, on an Excel spreadsheet,” he says. “So when you pay them at the end of each month, the correct information is always at hand.”
Use HMRC-compliant software Utilising the tools that are available will certainly help ease the process but making sure they’re HMRC-certified is crucial. “There are free HMRC tools such as PAYE systems,” says Hughes. “If you follow them to the letter – enter all the tax references correctly and so on, it should tell you how much you need to be paying whoever or what deductions you need to make for tax and national insurance.” A proper payroll product should help to take away the complexity but the key here is to ensure that the software of choice is also compliant with RTI (Real Time Information), as this will determine whether the new monthly submissions are a pain or a blessing. “The best software has safeguards built in that won’t allow you to make filing errors and combined with a good bookkeeper you should have nothing to worry about,” Hughes continues. “Essentially the employer should only need to enter critical info such as the employee’s name, salary info etc, and the product should do all the calculations and take care of everything else,” Paraskeva adds.
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Do your research Tax, for most of us, can be very taxing. Angela Kinghorn, payroll specialist from Henderson Loggie, the accountancy firm, advises owners to at least have an awareness of tax codes. “They should know what a standard code might look like and where the differences might come in,” she says. “If they give an employee a company car, they should expect to see quite a drastic change in that person’s code. If not, they may want to flag it up with their employees and ask them to check with the HMRC to avoid any under-payment of tax.” Employers should also be aware of key legislation changes and the dates at which they need to effect these changes. For example, the national minimum wage changes annually on the October 1 and workers will fall into five different age categories. “It is important to note the changes not only in the October pay run but also to keep an eye on employees’ dates of birth during the year,” says Kingham.
Are you ready for RTI? HMRC has identified that RTI, which was first introduced at the beginning of the 2013/14 tax year, has been a significant change for businesses to adapt to. However, the penalties for non-compliance will be implemented during the 2014/15 tax year, which means employers will need to be make sure that they’re making their payments on time and that the payments mirror what their returns say. Needless to say, ensuring that your current system can accommodate RTI reporting is essential and following the steps listed above will also stand you in good stead. “There are different free seminars that help and people can attend in order to build their knowledge about the different reporting, timelines and things like that that they need to do,” says Kinghorn. When you are in need of clarity, Chadha advises that it’s worth speaking with a professional. “The key thing is that at any point where you’re not comfortable with the changes that are happening from a compliance perspective or any moment you feel you don’t have the information you need, you should speak to a professional, the HMRC or a payroll bureau for additional clarification. Don’t wait till just before the start of the new tax year,” he adds.
Cashing in For small businesses, the cash basis scheme can offer some welcome relief, says Clive Lewis, head of enterprise at the ICAEW 46
“The cash basis system enables the smallest companies to record money when it actually comes in or goes out”
mall businesses with an annual income of less that £79,000 are being encouraged by HM Revenue and Customs (HMRC) to take advantage of the cash basis scheme rather than use full accounting rules. But I would urge businesses to review whether it is right for them before switching. HMRC suggests that businesses providing services, such as hairdressers, window cleaners, taxi drivers, gardeners, painters and decorators, plumbers and electricians, are most likely to benefit from the cash basis scheme. The cash basis system enables the smallest companies to record money when it actually comes in or goes out of their business such as cash, card payments and cheques. This compares to traditional accounting (accruals basis) when firms record income and expenses when they invoice customers or receive a bill. Cash basis might suit smaller businesses because they won’t be taxed on their sales until they have actually received the money for them and if the debtor never pays, they won’t have to claim for bad debt relief. Businesses can also opt for simplified expenses. This involves using flat rates, instead of calculating actual business expenses. It can be used for business costs of vehicles and business use of home. If business premises are used as a home, there is also a simpler way to deal with private use by the owner and their family. The problem for HMRC is that although the cash basis has been live since April 2013, very few outside the tax profession know about it. The only way HMRC will know how many
people choose to use it is by how many tick the box on the 2014 tax return to say they have. This is likely to raise problems; for example, how many taxpayers will say they have used the cash basis because they have no idea about accruals and they were previously doing it that way anyway? There then may be people who wonder if the cash basis means they had undeclared income and therefore do not want to tick the box. It will be interesting to see how HMRC explains all of this on the tax return and guidance notes for the general public. Whether you choose the cash or accruals system, if you don’t keep adequate records or you do not keep them for the required period of time, you may have to pay a penalty. Keeping your records up to date will help you have all the information you need to fill in your return correctly. If you send HMRC an inaccurate return, it could end up costing you. You won’t have to pay a penalty if you can show that you took reasonable care to get your return right but still made a mistake. Some of the ways in which you can show you’ve taken reasonable care include: • Keeping full and accurate records • Regularly updating your records • Keeping your records secure • Checking with HMRC or a tax adviser if there is something that you don’t understand Further information on cash basis and record keeping can be found at businessadviceservice.com and hmrc.gov.uk
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SALES & MARKETING
Better together WORDS: ADAM PESCOD
Often regarded as the preserve of the big guns, sponsorship can also be an affordable and rewarding option for start-ups. It’s just a case of finding a suitable partner
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hevrolet and Manchester United. EE and Wembley Stadium. Samsung and The Oscars. The megabucks deals struck between corporate giants are usually the first thing that springs to mind upon hearing the word sponsorship. Of course, some would argue that’s just a symptom of the world we currently live in. “In recent years, certainly with a struggling economy, sponsorship has come under the spotlight because the press sometimes portrays it as the preserve of fat cat executives who are enjoying hospitality at Wimbledon,” says Jonathan McCallum, head of sport marketing at OgilvyPR.
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Many start-ups may only ever dream of being able to throw that amount of money around – and enjoying the luxuries that come with it. Nevertheless, by looking beyond the headlines, it is possible to discover ample opportunities for start-ups when it comes to sponsorship. And many of them won’t necessarily have too big an impact on the company coffers. “Particularly for small businesses, it is a way that they can really stand out from the competition for a comparatively small amount of money,” says Sophie Morris, founder of Millharbour Marketing. Morris suggests that starting local can be a sensible strategy for start-ups. Sponsoring a nearby sports team, she argues, can provide a far deeper level of engagement with the intended audience than an advert in a local newspaper – and the financial risk is generally lower. “Compared to the cost of advertising in a paper, it is about ten or 20 times cheaper but actually what you are getting back is so much stronger and so much more powerful because you are engaging with the people,” she adds. “You are not just putting your logo or discount offer in front of them; you are becoming part of their community.” There does indeed appear to be some logic in an assumption that people – when making a purchasing decision – may place significant weight on a firm’s sponsorship of something they also support. “You are getting involved in something that particular group of people are very passionate about,” says Morris. “If you can engage correctly with those people, you take on board a bit of that emotion. If you are supporting the thing that they support and you are seen to be helping to develop it, the likelihood is it that they will come straight to you before considering any other supplier.” McCallum also champions the opportunities for brand-consumer dialogue that sponsorship can bring. “Advertising can be very static. It can get your message out there but it doesn’t necessarily allow you to have a direct one-toone relationship with potential customers,” he explains. “There is more opportunity to say something about your brand by partnering with a more established property.” The latter point is as relevant to a local
Better together.indd 2
When food met fashion Propercorn
“We never really use the word sponsorship,” says Cassandra Stavrou, founder of Propercorn, the fast-growing popcorn start-up. “We much prefer to talk about it as collaboration and partnership.” Stavrou has managed to forge such relationships with the British Fashion Council and London Fashion Week thus far. Not bad for a company that is only two years’ old. Nevertheless, identifying exactly what Propercorn stood for from the outset has undoubtedly contributed to its impressive early growth. “Propercorn has always come from a starting point of wanting to champion creativity,” explains Stavrou. “Our packs are hand-illustrated and we see any opportunity with the brand as an opportunity to introduce another element of creativity; not to shove logos and slogans down people’s throats. Very early on we seemed to very naturally get a lot of interest from the fashion and creative industries.” For Stavrou, sponsorship is not something that should be forced, but rather must be allowed to develop organically. “We didn’t just sit down and decide that sponsorship was a way of leveraging Propercorn,” she says. “It has to come from a very natural fit and traction rather than just identifying prominent brands and just trying to jump on the bandwagon.”
“We would much rather get behind something smaller but have deeper engagement than go mad with the numbers” Cassandra Stavrou, Propercorn
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Start local, go global sponsorship deal as it is to a national or global one. McCallum cites Doosan, the South Korean conglomerate, and its sponsorship of the British Open golf championship as an example of how such an arrangement can tell people more about a brand. “The reason Doosan does that is because it gives this sense of credibility and safety,” he says. “By them being aligned together, there is a natural fit whereby people say ‘if they are partnered with the British Open, it clearly says something about their brand. It must be secure, it must have tradition.’” A shared set of values is undoubtedly the cornerstone of any sponsorship deal. The collaboration has to make sense to both parties. As far as the sponsor is concerned though, attention must also be given to what it expects to achieve from the arrangement. “It has to make sense in terms of your marketing objectives,” says Morris. “If you are a local business wanting to attract local customers, a small sport, arts, music or church group – anything that targets the same demographic as you do – makes sense. If you want to get national coverage, that’s a bit harder but it might be that you sponsor more grassroots-level clubs but pick a few in the regions that you can resource.” Despite the apparent cost benefits of sponsorship, start-ups won’t reap the full
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rewards unless they throw everything they’ve got at it. After all, a successful relationship hinges on a commitment from both sides. “It’s not just a cash investment, it is a resource investment,” Morris explains. “If you sponsor a local sports club and give them £500 and put your logo on their website, people will appreciate the support. But if you put the time in to engage with the people, that is really what it takes for them to engage back.” When it comes to measuring those returns, Morris believes there is one sure-fire way of keeping up-to-speed. “The obvious way for tracking it is to give discounts where it is appropriate,” says Morris. “That way, small businesses can track what effect it’s had. They can say ‘we’ve had ten clients this month who said they’re from the local hockey team’. When it comes to the end of the year, they actually know what happened and whether it’s worth doing it again.” So long as a start-up has confidence in its own values and can identify where there is a natural overlap with a partner, sponsorship can be a very useful brand-building tool. It’s a fairly fruitless endeavour otherwise. As Morris concludes, “To sponsor something for the sake of sponsoring it can do more damage than good. There is a difference between sponsoring a youth swimming team and an adult male pub darts team.”
Scurri, the online shipment management platform, has seen huge returns from its sponsorship of a wellknown technology event in Dublin, where it is based. “Pub Summits is a local networking event for the tech community that started in a small pub in Dublin two years ago and has now grown to over 100 cities around the world,” says Rory O’Connor, founder and CEO of Scurri. “As a co-sponsor at this event, we were able to raise our local profile among inspirational people from all walks of life and areas of expertise. We were given access to a fantastic network of contacts that led to a slot on stage at the influential Web Summit event and inclusion in START 150 as one of the top disruptive start-ups in business today. “As a result, we have secured further investment of over €1.2m to help expand our business into new markets, receiving attention from the likes of the Wall Street Journal in the process. At each stage along the way we gained some invaluable business experience and contacts, but this was really kick-started by sponsorship of a local up-andcoming event.”
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SALES & MARKETING
THE CALM AFTER THE STORM
WORDS: JON CARD
An unhappy customer isnâ€™t a problem but an opportunity, business experts say. How can a business deal with complaints and generate repeat business?
SALES & MARKETING
“It can take time to turn a problem into an opportunity” Phil Anderson, Ashridge Business School
icture the scene: an email is forwarded your way and someone isn’t happy. A customer order has gone wrong, a delivery has been missed, a life hasn’t worked out as planned and they blame you. So what to do? Add it to your ‘to do list’, forward it for someone else to take care of, ignore it or reply to the customer and explain precisely why it isn’t your fault? In fact, none of the above are good ideas. The best thing to do is to rejoice; you’ve just been granted a golden opportunity to turn fury into free advertising. Angry customers have lost hope, they think your company has taken their money for granted, so it’s time to flip their expectations upside-down and watch them tell the world how nice you were. “A lot of research shows that if you deal with a complaint respectfully, people are very grateful and tend to tell others,” says Phil Anderson, a director of Ashridge Business School who has spent years studying customer service. However, he points out that great customer service is an investment of both time and money. “It can take time to turn a problem into an opportunity,” he warns. Anderson says that businesses, such as hotelier Ritz Carlton or the Swedish bank Handelsbanken, both demonstrate excellent customer service, but achieve it through very different means; The Ritz holds regular meetings with staff working on customer service basics and ensuring everyone knows who the VIPs are. Anderson says there’s a considerable amount of discipline in its approach. Meanwhile Handelsbanken is far more decentralised and personalised, yet its customer satisfaction levels are ‘extraordinary’. But what both organisations have in common is they enable staff to deal with problems as they arise, Anderson explains. This means giving the customer service team a discretionary budget and allowing them to spend it without talking to a supervisor. The hotelier can therefore provide free drinks, meals or rooms when a guest has become unhappy, or the bank can rapidly authorise an advance before a customer has time to get upset or embarrassed. “It’s been described as freedom within a gilded cage, so there might be an upper limit on the amount that can be spent on a customer complaint. There are boundaries but staff are free to operate within them,” Anderson says. Businesses are occasionally perceived as being remote and incapable of dealing with people on a human level. All too often, they restrict the abilities of their frontline staff and won’t allow them to tackle problems. Call centre employees are often expected to
SALES & MARKETING
“The worst mistake is to not deliver on your promises” Phil Anderson, Ashridge Business School
deal with a set amount of calls per day, rather than focusing on the quality of the service. Anderson says Handelsbanken removes as many barriers as possible and provides direct lines for customers to their account managers. “Handelsbanken has a very decentralised approach, but its customer service satisfaction levels are extraordinary. Customers are given the personal mobile number of their account manager and can call them day or night. This surprises many people, but apparently they get very few calls and when they do so it is really urgent,” he says. There is little doubt that the rise of the internet and social media has changed both the nature and the importance of customer service. Customers have become empowered by online tools and for some businesses this has been hard to deal with. An angry customer can now broadcast their grievances to the world and attract others to their cause who might also want to punish the company involved. Peter Mulhmann, the CEO of reviews company Trustpilot, advocates a direct and open response when dealing with complaints or criticism. “Modern web habits have dramatically altered the way businesses interact with consumers. At times these tools can leave businesses open to criticism and bad reviews, but we’ve seen companies turn these complainants into customers time and again.” Mulhmann suggests that some complainants are worth more time than others and that some people will just try their luck. However, many just feel frustrated because no-one is listening to their concerns. “If the complaint
director, Ashridge Business School
How to woo unhappy customers.indd 3
is unnecessarily rude or wildly inaccurate, then it really comes down to each business’s own principles for managing this type of issue. However, if the complaint is critical but it’s also clear the customer feels hard done by, then we’d recommend engaging with that person and working to both turn around their experience and make it clear to other customers that this will not happen again.” Mulhmann also believes that rapidly offering a customer compensation for inconvenience can work wonders; it will salve their grievances and increase the chances of repeat business. “For example, if a delivery was late then work out what happened, apologise and offer the customer something a little extra. This leaves the customer with a feeling that their views are listened to and that it was a genuine mistake that will not be repeated. Not only that, but that customer is now incentivised to become a return customer. And we all know how valuable a return customer is compared with the cost of attracting a new one.” Businesses often over-complicate things when providing customer service. In fact good service is not about asking customers to fill in excessive forms, or employing complex algorithms. For many businesses such things can distract a business from what’s most important; people pay money because they want the product. As Anderson says: “The worst mistake is to not deliver on your promises. A lot of businesses go to great lengths to create a customer service experience when all their customers want is what they paid for.”
Lessons from the Lego master A recent example of customer service creating PR gold came from Lego. A young boy emailed the company after he had lost his prized ‘Jay ZX’ action figure at the supermarket. He explained how his father had told him not to bring it as ‘he might lose it’, but had ignored him and then dropped his toy, as Dad had predicted. The problem was, of course, not of Lego’s making and it could easily have deleted the email. However, a savvy customer service rep wrote to the boy ‘after consulting with Sensei Wu’ (a Lego character) and authorised a replacement on condition that he listened to his dad in the future as he was clearly a ‘wise man’. Lego’s response quickly turned into a news story and was shared across social media, netting them massive coverage and good reviews, all for the price of a small plastic toy.
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SALES & MARKETING
The real deal These days it’s not the cheapest or the sexiest that survive – the most authentic brands are the ones cleaning up
or many years, marketing models and conventional advertising was all about presenting audiences with aspirational narratives: they would tempt consumers to buy a certain type of perfume, aftershave or car, claiming that said product or service would improve their social status or their sex life. In many cases brands over-promised and under-delivered. How many Lynx wearers found themselves mobbed by semi-clothed supermodels after emptying a can of the deodorant? The answer will probably be ‘not very many’. In recent times, a new breed of consumer has emerged with an appetite for veracity, demanding that brands be authentic in what
WORDS: DARA JEGEDE
they can and cannot deliver. In the Primark era of consumerism, where everything is disposable and widely available – it’s possible to buy the exactly same pair of shoes in Rio de Janeiro and London – businesses need to find a new differentiator. According to Wally Olins, marketing expert and chairman of Saffron Brand Consultants, the modern consumer now seeks to be different and yearns for products that are locally sourced or produced and that are less harmful to the environment. This trend, as he explains in his latest book Brand New – The shape of brands to come, has long been spotted by small entrepreneurial companies, and now the big boys are lumbering to catch up.
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SALES & MARKETING
“At the same time that we have this opportunity for large companies to go everywhere in the world and be the same, it spurs the opportunity for smaller companies to emerge and say ‘look at what we’ve got that’s different, unusual and genuinely local and authentic, compared to what others have to offer’,” explains Olins. Marjorie Benzkofer, senior VP at Fleishman Hillard, the public relations and marketing agency, believes we live on a smaller, more accessible planet thanks to globalisation and communication but this has not done away with the need to be relevant at a local level. Fundamentally, it means that a brand has a greater responsibility to its consumers, to understand local expectations in order to be meaningful and relevant to the audiences they serve; authenticity should therefore permeate everything a company does and says. “It’s about how you treat your employees, how you interact with a community; how an executive behaves and how you operate your plans. All of those things are part of how an organisation has to think about its brand; it’s not just the purview of the marketing department anymore,” says Benzkofer. Fleishman Hillard has identified nine drivers
we look at the issue of authenticity, we try to get an organisation’s brand, which is everything an organisation can own and control, in alignment with its reputation, which is also the perceptions of its different audiences,” explains Benzkofer. “When a brand is aligned with its reputation, then it’s a truly authentic brand.” Olins describes IKEA as such a company. “It’s a classic example of the way in which Swedish-ness presents itself to a consumer in every conceivable respect; in the way in which it operates, in the way it looks, the way its products look and so on.” Yet, as bigger organisations try to cash in on customer demand for more responsible businesses, many will claim or imply a level of authenticity which they don’t actually live and breathe. Olins quotes a marketer in his book: ‘authenticity is the new thing, and we have to learn how to fake it’. There has been a marked shift from brands selling aspirations and dreams to promoting themselves as genuine and considerate. It has been evident in Santander’s branding as simple, effective and fair, in McDonald’s emphasising its home-grown ingredients and even the new 1.6 V6 engines Formula 1 regulators have introduced in an attempt to ‘green-up’ the motor sport. Though it might be the current trend, authenticity does not look set to displace the aspirational notions on which industries such as fashion and automotive thrive, neither will it cease our move towards homogenisation. As a result, in order for start-ups to stand out in both developed and emerging markets, Olins advises SMEs to emphasise their personality or style. Whether it is clothing, jewellery or a service business, the company should highlight what it has that makes it different. “80% of what you’ve got will be the same as what everybody else but the 10% or 20% that’s different is what you have to underline and
“When a brand is aligned with its reputation, then it’s a truly authentic brand” talk about,” he says. “Emphasise that in everything you do, in everything Marjorie Benzkofer, Fleishman Hillard
of authenticity that companies need to address in order to have a genuine engagement with their audiences. “Three of them relate to customer benefit and that’s around innovation, value and service,” elaborates Benzkofer. “The second strand is around impact on society so that’s about care of the environment, care of your employees and community impact. The last three drivers are about how management behaves. So that’s about doing the right thing, having consistent performance and being credible in your communication.” Benzkofer says a business has to be on par with its competitors on all nine drivers. But in order to really stand head and shoulders above the rest, it should then focus on one or two drivers that are most important to its audience in terms of expectations, and differentiate themselves on those drivers from the rest of their competitors or in the industry. “When
you say, to your own staff and to the world outside.” Incidentally, this puts the entrepreneur or business owner in a pivotal position to ensure that the business projects a consistent image to their audience and that it’s not making promises in its marketing that it’s not delivering in its customer service. “SMEs are in a great place to have a holistic view of the organisation which can be harder in a larger multinational corporation, where it’s difficult to see into every corner of the business,” comments Benzkofer. “I think that gives them a competitive advantage in building deeper more meaningful relationships with the kinds of customers that they’re going after.” Indeed, actually being perceived as authentic can go a long way in helping an entrepreneur to establish their business. “It creates better engagement not just with consumers, but with all of its different stakeholders, business partners, with regulators and its own employees,” says Benzkofer. In short, an entrepreneur is better able to achieve the business goals they want to achieve when they have a truly authentic engagement with those audiences. Onlins agrees. “A genuine brand and clear personality gives you a good opportunity to develop in a very clear position in the market place, particularly with a product that looks different, that feels different, and that underlines the authenticity you claim,” he concludes. April 2014
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Business without borders Managing a global workforce is a hefty undertaking, but it’s a necessity for start-ups with international ambitions. Maviga and Regus tell us how they have both tackled the challenge
WORDS: ADAM PESCOD
here can surely be nothing more exciting for an entrepreneur than taking his or her business overseas for the first time. It’s an opportunity to make a mark on the global stage and generate a healthy profit in the process. However, with a foreign foray also comes a multitude of challenges. Convincing new audiences to part with their cash for your product or service is one thing, but the very reality of managing a company that operates in different corners of the globe presents a logistical nightmare. The ability to overcome these can mark the difference between success and failure. For Maviga, the Kent-based bean and pulse trader, being global is part of its DNA. The company was founded in 1994 by Marcus Coles when he bought the UK arm of American packaged food giant ConAgra for £1. He was then joined by former ConAgra colleagues Mike Quann and Christian Lude, who established Maviga offices in the US and Switzerland respectively. Having regularly added new territories ever since, it now boasts a very strong presence in Africa where it has started numerous procurement operations. “It is a very international business,” says Andrew Cooke, chief financial officer at Maviga. “We source beans and pulses from about 20 or 30 countries worldwide and supply to about 80.” Engrained into the Maviga business model is a strategy of hiring ‘locally’ in every single territory. Initially, this was a natural byproduct of its partners happening to be from the USA, Canada, and Switzerland. As the company shifted its attention to Africa, it had a decision to make. It turned out to be a fairly
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easy one. Maviga may not have gotten very far without engaging and recruiting from local communities, explains Cooke. “It’s an essential part of working in those places,” he says. Yet the people who head up Maviga’s African operations aren’t ‘local’ in the strictest sense. “We do use local labour in our warehouses but the cores of our teams in those locations are actually ex-pat Indian nationals,” says Cooke. “There is a significant body of ex-pat Indians operating all over Africa.” These ex-pats have nevertheless been an invaluable part of Maviga’s progress thus far. For starters, they carry with them the local knowledge that allowed the company to make its mark in previously unchartered territories. “They were very well-versed with the local customs, the economies and how it works over there,” he says. “All around Africa, there are different languages and our guys on the ground will always have a decent working knowledge of whatever local language is there.” They also possess another important attribute. “Many of our people come with a lot of energy,” he says. “By nature, anyone who is wanting to relocate and go to a different country at the start of their career has a lot of energy. They’re the kind of people we like very much at Maviga.” It certainly wouldn’t have occurred to Maviga to do things any other way. “What we haven’t done anywhere is go and start cold,” Cooke adds. “That would be pretty impossible. I think you’d last five minutes if you tried to do that.” Despite its global presence, Maviga only has 70 full-time staff on its books. This in itself has enabled the company to effectively tackle the challenges of having a diverse and scattered workforce. As indeed has maintaining a central operations base in Kent – a base which it has just invested heavily into extending. “We have a nice blend in the company of
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“By nature, anyone who is wanting to relocate and go to a different country at the start of their career has a lot of energy” Andrew Cooke, Maviga
having a big international network but actually a lot of the shipping, financing and accounting is done fairly centrally,” he adds. “That allows us to apply a consistent model of operation to pretty much all of our business.” That extends to the hiring decisions made by managers in any country. “For those in more junior levels, our African managers have autonomy to hire those guys and deal with them,” Cooke continues. “If it is someone significant or in the admin management team, we will also ratify here and possibly even meet them if they are quite senior.” Regus, the office space provider, adopts a similar approach to Maviga when it comes to recruitment. By the end of this year, the company will have more than 2,000 centres worldwide, many of which will be manned by natives. Such a strategy ties in with the standards that Regus customers expect in
every single country. “It is obviously attractive to local companies to know that a Regus centre might be part of a multinational chain, but equally that the people will understand their business requirements and will understand how to talk to them and their visitors,” says Celia Donne, vice president for global operations at Regus. “It has therefore benefitted us in all sorts of ways to hire locally.” Regus’s local employees are often complemented by senior management that originate from elsewhere. This, Donne explains, is part and parcel of the company’s people management strategy. “The vast majority of our recruitment is local but there is also the opportunity for people to travel and work in different parts of the world,” she says. “For example, the country manager of China is actually German and we have got area directors from Germany in the US. The ability to be promoted within the structure but also to travel globally is a benefit for lots of people.” Donne concludes with a word of warning for entrepreneurs eyeing up an overseas adventure. “Don’t rush into hiring lots of staff overseas until you are sure the market is there for that particular expansion,” she says. “It is very cheap to have a virtual office or small local presence just so that you are not overextending yourself.”
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A brave new world The subject of immigration is a contentious one at the best of times – it seems everyone has an opinion. But until recently the debate had altogether neglected the value of migrant entrepreneurs to the UK economy
WORDS: DARA JEGEDE
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hodge-podge of cultures, religions and ethnicities, London is one of the most diverse and cosmopolitan cities on earth. It has long held a reputation as one of the globe’s foremost finance and business centres and is fast gaining credit as a hub of entrepreneurial excellence. This goes some way to explaining why multitudes of talented people are coming to live on these fair shores. With nearly half a million migrants from 155 countries living in the UK, some overlook the benefits of a dynamic and international ecosystem and instead focus their attentions’ on making Blighty’s new inhabitants feel unwelcome – the recent pandemonium over Romanians and Bulgarians flocking to the UK is a case in point.
Popular and usually unfounded perceptions about immigrants have included their coming to Britain to take jobs and depress wages. However, a recent study by the Centre for Enterprise (CFE), the entrepreneurs’ think tank and Duedil, the online companies database, seemed to shatter these perceptions, presenting a wholly different picture of reality. “The aim was to bring hard data to what is a very emotive topic of debate around immigration,” says Matt Smith, director of the CFE. “The entrepreneurial value of migrants and their role as entrepreneurs as job and wealth creators has simply not been part of any immigration discussion in the past.” The CFE research probed the job-creating capabilities of migrants and found that
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one in seven businesses in the UK are started by people who hail from outside the country, corresponding to 14% of jobs. “Among the business community, there is an understanding that migrants are often very productive people,” comments Matthew Rock, editor-in-chief at Duedil. “I think what happens though, in the public realm of popular newspaper and news agenda on radio and TV, is that something changes and much more suspicion and doubt enters into the argument.” Another absent truth which the institutions sought to bring to the ongoing immigration debate is that entrepreneurial activity among the migrant community is nearly double that of UK-born individuals with 17.2% of migrants having launched their own businesses, compared to 10.4% of those born here. These are people who have maybe come to the UK as asylum seekers, refugees, or as children and have grown up in Britain. Tobi Schneidler, founder and CEO of Bouncepad, the tablet kiosk provider, came to London from Germany in 1993 to study architecture. Nearly 20 years on, he runs a company which sells tech for public spaces with 25 employees. “There’s something that my French and German friends and people from
all over the place find in London that they don’t find at home,” he says. “It’s to do with the opportunities, the people that you meet, access to academic institutions and the whole business spirit of the country. There might be complaints from entrepreneurs around regulations, but in terms of starting up a new company Britain definitely has the edge.” Smith agrees. “We have a stable rule of law, an economy that’s recovering and growing, compared to many other countries, and we have access to a very large European market and sit rather perfectly between the US and Europe and the east,” he says. Moving to a new country is a giant enough step but setting up a business is a whole other kettle of fish. “It takes real entrepreneurial zeal to do that,” says Smith. “But I think once they’re in Britain, they would face very similar challenges to any other British-based business or entrepreneur.” For entrepreneurs, understanding a new culture, the market, the support structures, as well as the customer base and institutions – already enough of an undertaking for native starters – can pose significant challenges for migrant entrepreneurs who are without easy access to the networks that are vital when it
comes to starting a business. There are other teething troubles, too. “The challenges London poses are around costs, access to space and access to people,” says Schneidler. However, he sees the latter as an opportunity. “Very clever people are drawn to London. So I actually see that as an asset of being in this great place,” he says. “We have a mix of people from Germany, Mexico, Romania, Belgium and of course British people. It’s a great asset to developing companies to actually have people with different points of views chipping in their ideas and introducing language skills, whilst helping to connect to other countries and cultures.” Getting an entrée into established networks can prove challenging and while many will acquiesce that it could be better, there’s pretty decent support for SMEs in the UK. The CFE report also commissioned research from the University of Birmingham, which raised the point that some migrant businesses or entrepreneurs may not be engaging in business support initiatives as much as British entrepreneurs. Smith provides an explanation as to why this might be the case. “I wouldn’t say it’s any form of discrimination but there is more that can
“In terms of starting up a new company Britain definitely has the edge” Tobi Schneidler, Bouncepad
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be done to address cultural barriers and any other barriers that are holding back migrant entrepreneurs from engaging with the support that’s available,” he says. “The government should review access to business support and resources to make sure that migrants are getting all the support that is available to the wider business community.” The motive of the migrant entrepreneur is changing quite significantly too. Whilst in the past, many people who settled here became almost ‘accidental’ entrepreneurs as they set up shop, many moves are now much more targeted, owing to Blighty’s stellar entrepreneurial credentials. “Many of those established at the moment didn’t come as entrepreneurs; they came as refugees and happened to start a business,” says Smith. “Now, we’re attracting entrepreneurs who move here from Europe or want to take the entrepreneur’s visa with the explicit aim of launching a business.” Therefore, the task of the government and
“Very clever people are drawn to London. I see that as an asset of being in this great place” Tobi Schniedler, Bouncepad
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other organisations is to positively encourage migrant entrepreneurs to start and grow business. “I think that as a country, we’ve got to figure out what our new edge in the world economy is and we need to become more enterprising,” says Rock. “The big companies and big employers of the past are breaking down. They won’t provide as many jobs in the future as they have done in the past.” It’s clear that the importance of offering support to SMEs is on the political agenda – the PM declared in his closing speech at the Conservative party conference last October that entrepreneurs are the future of the UK economy. “As the report shows, migrants are highly productive and entrepreneurial, in terms of creating new businesses and running small businesses,” says Rock. “As a country we’ve got to take that seriously and focus on that community because we will need that hard work and their endeavour and those companies, if we’re gonna thrive and survive in a very global market.”
Tobi Schneidler CEO, Bouncepad
HOME AND AWAY
“Bouncepad was set up just over three years ago but it started life before that as a design agency. From working with clients such as Barclays and Adidas, we came across this opportunity to design the B2B product for secure tablet kiosks. “When we launched the website in January 2011, a week later we got the first phone call not from Oxfordshire or Birmingham, but from Johannesburg. So we’ve been an export business from day one and it has continued like that. And we’ve opened a Boston office as well, not least because one of our great British guys is married to an American who came to study here and her company introduced us to a great company in Boston. “I don’t think all of that dynamic would have unfolded in Berlin, Munich or Stuttgart. German companies are masters at exporting and being successful internationally but Bouncepad has benefitted from a very innovative and design-focused customer base in the UK.”
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The trouble with talent is… nurturing it Much like sports stars, talented employees need a little bit of TLC in order to really shine, says Lyndsey Simpson 74
here aren’t many things more magical than seeing a certain spark in someone. When it all clicks, you can actually see someone’s future mapped out before your eyes. However, even though plenty of us have the innate raw talent to become masters of our chosen fields, only a select few ever make it. For example, millions of kids every year fall in love with sport. However, less than 1% ever make it to the world stage of competition. But what’s the difference between them and us? An obvious place to start is to look at how countries churn out elite athlete after elite athlete in comparison to the business alternative. Football and rugby clubs have taken the recruitment and development of their players into their own hands by setting up what are formally known as academies. In these academies, talented children start young and are nurtured up through the ranks before making their professional appearances for the club’s elite team. Similarly, organisations such as UK Sport and the English Institute of Sport (EIS) have rolled out talent development programmes to locate and develop talent in other pursuits such as athletics and gymnastics. This all sounds very fancy, but we’ve been doing this in business for years as well. Whether we pick out talent straight from school using an internship or recruit
“Unless an individual is challenged, and therefore improved, they won’t stay talented for long”
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candidates with a more formal education using graduate schemes, we do have plans in place to nurture talent. However, with a significantly higher drop-out rate than that of our sporting comparison, what else could we do to ensure we are nurturing emerging talent to the best of our ability?
Once you’ve secured a talented individual in your business, you need to push them to the limits. All too often young people or new recruits are pandered to and given relatively easy tasks without the same pressure as their more experienced colleagues. The fact of the matter is emerging talent is just that: emerging. Unless an individual is challenged, and therefore improved, they won’t stay talented for long. An academy player is thrown into a rigorous training schedule giving them a true indication of what their future will be like. This really separates the wheat from the chaff, leaving only the most motivated, eager and truly talented athletes standing. Within business, we need to find the comfort zone of these talented individuals and then promptly drop them ten miles due south. You’ll then get a true indication of just how talented your new recruit is. Of course, this doesn’t have to happen too often, or even right away. However, if you don’t constantly push the limits of a talented person, they will not develop, they will not grow and they will not stay talented.
I know, I know, it sounds like a contradiction. But come on, this is an article about nurturing emerging talent, not just scaring it senseless. Alongside pushing their limits you need to act as a confidant, a shoulder to cry on, a mentor and sometimes even a mother. When they ask for help, give it to them, and when they don’t ask for help, make sure they know it’s there.
Test, assess, re-test, reassess
One of the great things about competing at sport is that everything is quantifiable and as such, monitoring progress becomes a lot easier. You have clear markers of where you sit amongst your peers, an abundance of data upon which you can compare your abilities and a good old fashioned ‘win or lose’ mentality. As a result, budding athletes are continuously tested and assessed to benchmark their talent. Goals are then set, hard work commences, more tests occur and you’ve either achieved your goals or you haven’t (which more often than not results in the chop). Clearly, we don’t want to transfer everything over from this sporting
mentality. However, there is a lot to be gained by being a little clearer with your intentions. This can be achieved by having a conversation with your talented individuals to set them some clear goals and when the allotted time is over, seeing how they did. It is then a case of lather, rinse and repeat as required.
Make them own it
There comes a time when a young emerging talented athlete becomes, in their own right, world class. This will come long before their first Champions League win or their first time on the podium. The same is true in business: an emerging talent will become top talent long before their first big achievement. The transformation will come when each of these individuals ‘own it’ and become the masters of their own destiny.
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A great way to nurture this is to make their goals and subsequent achievements public, which is an age-old trick used amongst performance psychologists. You’ll be surprised how much of a vested interest other people in the business take in your new recruits, so much so that if your new recruits make it known where they want to be in the next six months, two years or five years, they are considerably more likely to achieve this. Not only will they be motivated to try harder as a result of the public engagement, but the teams around them will know what they’re aiming for and be able to help accordingly. So the next time you see that spark in someone, take action and you can reap the rewards of seeing it ignite.
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Anyone of a faintly scientific bent will have spent recent weeks consumed by the news that physicists believe they may have finally found evidence for gravitational waves. Perhaps the most significant development in physics circles for 100 years, the discovery confirms predictions made by Albert Einstein in the theory of general relativity and promises to unite classical and quantum mechanics. In comparison, our news seems a little less revolutionary but we do have a lot of developments in the gadget space to dissect
Android Wear The user interfaces of wearables have always raised something of a question mark, with people wondering how a mobile operating system (OS) can be comfortably adapted to a small screen. Google has become the first of the big players to address this with Android Wear, a reskinned OS more at home on a watchface. Offering integrated notifications and cross-device control, Android Wear looks to be the first mass-market OS that handles some of the queries around wearables.
WORDS: JOSH RUSSELL
Galaxy Note Pro We’re certainly fans of the Note series here at Elite Business and so it’s fair to say we’ve been getting pretty excited by the prospect of upgrading to its Pro offering. The Note Pro certainly dominates its smaller siblings, coming in at a whopping 12.2 inches and unsurprisingly a slightly doughier 750g. But with the extra size comes a lot of power: the 4G version packs a 2.3Ghz quad-core processor, backed up with 3GB of RAM. The extra screen space also makes even better use of the Note series’ S-Pen.
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GiBike Like Google Glass, the GiBike – soon to hit Kickstarter – will be one of those things you either rate or ridicule. But frankly there’s little more we could ask for in a bike. It will offer smartphone, GPS and social networking integration on the go, automatically lock whenever you stray more than ten feet away and folds away to a stashable size in just three seconds, making it a pretty sweet ride. And for those who want to travel the streets without the sweat, the electric version will let you cover 40 miles per charge pedal-free.
Fin There’s not much our tech team loves more than gesture control wearables. And it’s been a while since we’ve come across something with as much potential as Fin. A thumb ring that turns your palm into a gesture-enabled control, Fin functions with the help of discrete optical sensor and can detect a variety of swipe-based gesture. As the device is still in development, plans to introduce bio-feedback elements are set to widen available gestures even further.
Moov If you’re going to make a fitness tracker these days you have to stand out from the crowd. Developed by former Apple engineer Nikola Hu, Moov looks like it will do just that. Rather than simply encouraging you to exercise more, it focuses on improving how you exercise. This modular device can be affixed to parts of the body or equipment and offers unparalleled feedback through dedicated apps on how to improve your technique, based upon data collected from athletes and coaches. Moov has definitely raised the bar for fitness wearables.
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Smart for business? Entrepreneurs are getting savvier at using smartphones to help run their businesses. Thinking of increasing presence and revenue? There’s an app (or hundreds) for that 81
WORDS: JOE JEFFREY
t’s safe to say that mobile phone technology has evolved since its birth, just over 40 years ago in New York City with the release of the Motorola DynaTAC 8000X – a mobile weighing in at over a kilogram and sounding like something more akin to a device capable of nuclear war as opposed to one designed for cellular communication. Fast-forward four decades. Bearing in mind the recent acquisition of WhatsApp by Facebook for a cool $19bn, there’s no denying that apps and the smartphones that go with them are big business. So big in fact that it’s estimated the mobile app industry will be worth $30bn by next year. And for good reason. Be it the latest Angry Birds installment or the most recent update of Citymapper, there’s something for everyone. And that includes SMEs. And cats. Yes seriously, cats. With 51% of SME owners in the UK dependent on the use of smartphone apps to help run their businesses, according to a survey by PeoplePerHour.com, it’s evident that oodles of entrepreneurs are embracing technology. The same survey revealed that among the 2,000 business owners interviewed, two-thirds rely on apps to run their business on the move and three-quarters of entrepreneurs use smartphone apps daily to improve productivity. Similar to the demise of DynaTAC, it may be that the once must-have PCs, scanners and fax machines will become obsolete to make some space for their more compact successors.
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“Smartphones are the new personal computer; they’re more connected than ever” Desire Athow, TechRadar Pro
The must-have apps
“Smartphones are the new personal it scans the info direct to your contacts. You computer; they’re more connected than never have to have a fax machine or scanner ever,” says Desire Athow, editor of website either – the iPhone has replaced it all.” TechRadar Pro. “They are often as powerful as When running a business solo, it’s not their desktop counterparts and are featureuncommon to miss a call. But missing the packed. In addition, a lot of enterprise business wrong one could have dire consequences for applications now run on smartphones as the business. That’s why Melissa Edmunds, well. Most importantly though, users within owner of Safesip and inventor of non-spill businesses embrace these technologies rather drink covers by the same name, signed up to than being reluctantly driven to adopt them. RingCentral – a cloud-based mobile phone “You can already connect your smartphone app, which provides a variety of tasks for to two screens, a keyboard and a mouse, business owners and entrepreneurs on the essentially turning it into a desktop computer,” move. RingCentral also allocates a cloud-based Athow continues. “Add in access to cloud telephone number to the user when calling out services and enterpriseon a mobile. grade features and you have a “When I attended my son’s versatile, affordable, businesssport’s day and the phone rang, ready platform.” I knew immediately that it It’s no longer a matter of was a work-related call by the waking up at the crack of dawn ringtone,” says Edmunds. “The religiously every day, riding call related to an opportunity the train with the other cattle to trial Safesip with the NHS. and rocking up at 9am to log I would have missed the call on to a clunky machine, as but RingCentral makes it look Luke Barlow, co-founder of like I’m always in the office Tufferman – a multi-purpose when, in this instance, I was shelving company – can attest. standing in the middle of a field, Luke Barlow, Tufferman “We all go into the office which makes you look more for a couple of days and then professional.” work remotely for the remainder of the week, Incidentally, off the back of the call from using Skype for conference calls, checking the NHS that day out on the field, Edmunds’ documents on PDF-viewing apps and, Safesip is soon to trialed by the NHS – in both obviously, using the phone to make calls. The hospitals and in the community – amongst good thing is all of this can be done using one patients with Parkinson’s disease and similar device,” he says. disorders that can potentially cause difficulty It doesn’t stop there, though, as Barlow gripping and sipping. explains. “These days, smartphones have got Barlow agrees that the advent of new absolutely everything on them. The apps we technology enables entrepreneurs to be more use now, like XpenseTracker, which accounts accessible to customers. “From a commercial for company expenses, such as mileage receipts perspective you can be more reactive, which and so on, save so much time,” he says. “Then means you can certainly increase revenue,” he there’s Business Card Reader Pro, which is says. “There’s no real skin off your nose to work a business card scanner – it’s ideal for trade whilst you’re on the train, or anywhere, and shows; you take a photo of a business card and still be able run the business.”
“You never have to have a fax machine or scanner – the iPhone has replaced it all”
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Any.do Already downloaded and used by millions, the award-winning Any.do is a simple but effective to-do list app. With quirky little features such as shake to clear completed tasks, as well as simple user-friendly interface, it looks like a winner to us. Available on both Android and iOS Evernote The behemoth of note-taking apps, Evernote, offers everything you could ask for in an instant. Powerful search functionality, clear and friendly presentation, as well as the ability to attach photos or audio clips to your notes makes this an app to be reckoned with. Available on both Android and iOS XpenseTracker XpenseTracker is an all-inclusive (yep, you guessed it) expense tracker, with a reporting application for your business needs. Simple to use, but packed full of features, this app will even track your mileage – ideal for when the tax man comes a-knocking. Available on iOS only Genius Scan – pdf Scanner A scanner in your pocket – who would’ve thought that a few years ago? Providing the ability to scan documents on the go and export them as JPEG or multi-page pdf files, is it any wonder Genius Scan has over 11 million users? Available on both Android and iOS RingCentral Want to make a small business look like a big one? RingCentral could help with access to a dedicated business telephone number and various advanced calling features such as conference calling and a call attendant. Available on both Android and iOS
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How to herd cats With employees increasingly working away from their desks, web-based technologies are an essential tool for the modern-day entrepreneur, says Dan Kirby
ork is getting increasingly fragmented, with more freelance staff, agencies, consultants and people working at home or remotely. My company Techdept operates an office in London and a production office in Sheffield. Our team are found working at client offices, on trains and in cafés. We have partner agencies for financial direction, PR, business development and content marketing, and on specific projects we can be working with people from all over the world. When your colleagues are not sat next to you it’s easy to misunderstand things or get lost in endlessly CCed email threads. Your time gets absorbed with ‘busy work’ (hunting for files, or digging in your inbox) rather than real work. Working this way can feel like herding cats. No matter how planned you are, you’re doomed to fail. So how do you deal with this fragmented modern workplace?
With a remote workforce, relying on traditional ways to manage and run a business – emails, calls, meetings and good old-fashioned ‘management by walking about’ – doesn’t work. In fact it’s a good way to run yourself ragged. I manage all of our PR, marketing and new business agencies in Basecamp. Each company has its own project in which discussions take place. But each company can see the other’s activity – such is the nature of open and transparent cross-collaboration. We have taken all discussions about marketing content out of the email inbox and into the relevant project in Basecamp. This makes it easier for everyone to pick up a thread of conversation at any time or to drop an idea in it and then come back at a later date so we don’t lose those ideas. By using their free mobile app, it means we can keep in touch while on the go.
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This activity is supplemented by regular Skype calls where we all concentrate on creating the next set of activity, aggregating the discussions on Basecamp.
The way we use Basecamp is not exactly that ground-breaking – many people are now working in this way using that platform. But recent years have seen an explosion of ‘social business’ apps like Yammer, Huddle and Jive. We use a web app called AtTask which gives us granular control on all operational tasks – allocating individuals and target deadlines. The platform then allows notes, discussions and time-logging to each task.
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This means that a detailed view of the ins and outs of our operational workflow is available from any web browser in a few clicks. Data for our monthly ‘actionable metrics’ (a concept I discussed a few months ago) comes from AtTask and our production director can see a helicopter view of all the activity in the company, helping make scheduling decisions. However we’ve learnt that, for us, one size doesn’t fit all and AtTask is only one of a number of business apps we employ. Our operational software is in fact a constellation of different solutions we use both as a company and as individuals. I just mentioned Basecamp and Skype above but we use (and have used) Google Docs, Google+, Dropbox, Hightail, WeTransfer, Highrise, Podio and Asana.
The down side 88
These web tools can help manage distributed teams, but there are several cons to consider. Who set them up? What are the passwords? Who has access? What if that person leaves? The more software you use, the more this is an issue. With the explosion of business apps, I predict tools that ring-fence them together will begin to become more prominent, integrating a single login experience. This will allow more corporate control without losing the flexibility that they bring – an undoubted benefit.
But it is still a bit of a wild west
The simplest way to combat this diffusion of services is to rely on some good old common sense and good management practice. Auditing all the tools you and your team use is a good starting point – write them all down and map out who is using what and why. I would recommend reading Remote, the new book by 37 Signals, the creators of Basecamp. These guys have more experience than most at the subject of remote working and indeed their book extolls its virtues. But I found the most useful chapter to be their advice on security, with a list of practical tips that are a great help for any business.
“Auditing all the tools you and your team use is a good starting point”
Tech Dept - Herding cats.indd 2
Staying in sync
Another big challenge of any IT operation is that file servers, inboxes, desktops and Dropboxes usually end up messy. And try accessing your office network when you’ve just stopped off at your local Starbucks. Solutions like Box, Huddle and indeed Dropbox are all vying for the corporate file management market – a modern gold rush to underpin 21st century business. At Techdept we’re in the process of moving all our file servers into the cloud, using Microsoft OneDrive for Business (previously SkyDrive Pro), to avoid issues we face around synchronisation and back up. We often use Dropbox when working with people but then take the finished piece of work, add tags and descriptions in a platform we created called Tidybrand (hosted on Microsoft’s Azure Cloud). This means that our team can quickly search and find the latest and correct file – like
a sales template or logo. I like to use cloud-synchronised note-taking and reminder solutions to avoid meeting notes disappearing in notebooks or on my desktop. Evernote is a great way to create notes which sync automatically between your mobile device desktop and browser. An app called Wunderlist is great to use as a to-do list and memory aid. When I think of something I need to do, I quickly add it to my Wunderlist inbox on my phone, which then automatically syncs with the cloud. If I lose my bag or phone, then I don’t lose my to-do list. It also lets you create shared lists of tasks with others so you can collaborate quickly and remotely with colleagues, whilst utilising focused instructions. There are lots of benefits to working the way we do – but without our use of web technology we would spend most of our time unsuccessfully trying to herd those cats.
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The government is doing its bit to make exporting easier for SMEs but there are legal considerations aplenty when it comes to trading overseas. Michael Hatchwell, partner at Davenport Lyons, gives us the lowdown
Barriers to entry
I "There has never been a greater opportunity for UK entrepreneurs and small businesses to expand their business abroad"
n January 2014, the UK saw its trade deficit hit a 19-month high and exports fall to their lowest level since June 2012. In an attempt to rebalance the economy, the government has indicated that it wants UK exports to reach £1tn and for 100,000 more UK companies to be exporting by 2020. “I want the message to go out that we are backing our exporters – so that wherever you are around the world you can’t fail to see Made in Britain,” George Osborne proclaimed as he revealed the details of this year’s budget, which saw the government place additional resources behind UK businesses to help them invest more in exports. Within a relatively flat European economic environment, more and more businesses are seeking to trade abroad to meet their business growth objectives. Smaller companies now
have to do business overseas like never before to remain competitive. Therefore, getting exporting right is crucial to business success. However, it presents its own set of legal implications for businesses to consider. The following should provide some useful guidance on how to go about tackling them. It is important to understand the market you are seeking to enter and what regulations or laws may impede access to the consumer. Are there any legal requirements in the target market relating to product standards or restrictions relating to marketing and labelling of products? Are your products illegal or do they require, in advance, an import licence from the authorities? In some cases, your business may need to obtain an export licence from the UK authorities. April 2014
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Insurance should be carefully considered to protect against risk of non-payment and to cover against damage or loss and any product liability claims. In some jurisdictions strict liability will be imposed. Selling goods without receiving payment is not good business. Knowing your customer is a key mantra and the result of extensive local research should dictate how you interact with different customers. Money up front is always best or payment by a letter of credit from a reputable bank is just as good, although inevitably more costly.
Take advantage of UK Export Finance’s (UKEF) Direct Lending scheme, an export finance scheme which aims to support buyers from overseas. The scheme supports UK exports by providing loans of up to £50m direct to British exporters. It provides financial security when the exporter’s customers are having difficulty securing their own finance from other sources, which allows the customer to pay in instalments. Following the budget announcement interest rates on this loan have been cut by a third, making them a competitive option to help finance your exporting business. I would strongly recommend establishing the credit risk of potential customers by obtaining a letter of credit from their bank and checking with other exporters to see if they have experience of dealing with the customer.
Agree how any disputes will be handled and by which jurisdiction Include a force majeure clause to allow you to terminate the contract in the event that it becomes impossible to perform Clarify what will happen in the event of faulty goods or non/late delivery Keep the wording of any sales contract clear, concise and simple. You must take local legal advice to check that your contract is enforceable in your target market (even if a different law is chosen to govern the contract) and to help avoid any translation issues. Your IP may be more valuable than the goods themselves. Protect your IP by appropriate registrations in the country that you are exporting to. This is exceptionally important. Checking that you are not infringing someone else’s IP is a step that is frequently forgotten.
"It is important to understand the market you are seeking to enter and what regulations or laws may impede access to the consumer"
VAT is a tricky area that has many special applicable rules. VAT may need to be charged to buyers of your goods in another country. Products exported outside the EU or sold to a VAT-registered purchaser in the EU can be zero-rated, provided you follow strict rules. Import duties, such as customs and excise duty, vary depending on the country and your product. Ensure that you specify the party responsible for paying any import taxes and importation formalities in the sales contract. Going it alone can be daunting and there are many good alternatives. Agency, distribution, franchising and licensing agreements, as well as entering into joint ventures, offer real solutions to successful exporting. Using reliable local partners with local knowledge can help you avoid many pitfalls as there should be a common interest. Take advantage of organisations such as UK Trade & Investment (UKTI) and UKEF which specialise in supporting overseas trade. Exporting can be very financially rewarding and, following the 2014 budget, there has never been a greater opportunity for UK entrepreneurs and small businesses to expand their business overseas. So get the stamps at the ready.
A customer’s financial standing is also key, so it is important to understand where a customer has assets if something goes wrong – ie where will enforcement of a judgement be productive. When negotiating sales contracts or terms of business, ensure that you do the following: Define the goods to be supplied State the price to be paid Be clear about the method of payment State which party takes responsibility for the goods at each stage of delivery, including who will pay for insuring the goods and paying customs duties Include a retention of title clause to ensure that you retain ownership of the goods until you have been paid in full State what rights the customer has so that you can use your Intellectual Property (IP) including trademarks and patents
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NO MATTER YOUR MARKET, WE’VE GOT IT COVERED
Classifieds April.indd 4
the START-UP DIARies
Feeding the need for diversity Donna Kelly, co-founder, Dressipi
Having a balanced workforce came easily to Dressipi and it helped foster the team spirit. As do ‘Burger Thursdays’
always joke that if there was an EU award for diversity Dressipi would be in the running. Technology start-ups often get stick for the preponderance in their teams of white males, but that’s never been one of our problems. Perhaps it’s because we’re a business founded by two women, or maybe it’s because as a company we straddle the two worlds of technology and fashion. Nevertheless, out of a team of 12 we have nine nationalities represented and a very rare split of 50:50 male to female. Why is diversity important in a company? It’s so much more than an exercise in box-ticking. It gives you access to a range of perspectives, priorities and styles that you wouldn’t get from a homogenous team. This was something Sarah and I set out to make the most of from the start. For example, our ‘beauty and the geek’ policy of hiring technologists for their technical skills and professional stylists for their ‘eye’ was an incredibly important part of building our algorithms. By pairing developers and stylists together we could harness
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their complementary skills. It meant that whenever our algorithm made an unsuitable recommendation, a stylist could explain to the developer why it didn’t work and what had to change. This approach, which turned development into an intelligent conversation between two highly-skilled people, meant we built a better product. Of course one of the reasons why a lot of highly successful start-ups are so culturally uniform is because people have a natural tendency to attract or hire people similar to themselves. This homogeneity can help the ease of communication and relationships. Fortunately our geek/chic, nine-nationality stew has found no shortage of things to bond over, and top of the list is a shared passion for food. It is an understatement to say everyone at Dresspi is obsessed. Lunch is a daily agenda item and, as is appropriate for a company driven by bots and algorithms, we even have one for suggesting where to go and what to have for lunch. Thursdays are Burger Thursdays and this means factoring in queuing time into our lunch break for the more popular places. As I type this the team is discussing a project they saw on Kickstarter for a burger venture. Cakes are de rigeur on birthdays and even cupcake flavours reflect our diversity. It’s Dressipi lore that if you get asked ‘do you like food?’ in an interview, the only thing at that point standing between you and a job offer is your next answer. Food doesn’t just give us a subject we can be sure everyone will have a strong view on – after all, everyone’s got to eat – it’s also a shared experience. This is something we pay particular attention to at Christmas where, instead of going to a restaurant to eat dinner with huge groups of people, we go to one of our houses and cook for one another, everyone contributing a dish. We may all be rather different people, with differing cultural and social backgrounds and a wide range of skills, but eating together reminds us of what we all have in common. And working together towards a common goal is what running a startup is all about.
“Eating together reminds us of what we have in common”
FUNDING, MENTORING & MARKETING
INCREASE SALES AND OBTAIN FUNDING FOR YOUR BUSINESS FAST
in this 45 minute workshop you will learn about funding and marketing strategies for all business levels and find out how you can leverage the support of a mentor to help grow your business. we fast track profit growth & investment by providing experienced and successful mentors who have sold their own companies for an average of ÂŁ18 million on a one to one, face to face basis. visit us on stand 150 at the Elite Business Event Outcomes Cost effective marketing strategies that drive sales quickly (based on real life case studies) Effective funding for all business levels Leveraging off the best mentors in the UK to grow your business
Nailing It: At a time when retail titans were hitting the runners, Nails Inc. solidified its status as a high street hit. Now a £25m turnove...
Published on Apr 2, 2014
Nailing It: At a time when retail titans were hitting the runners, Nails Inc. solidified its status as a high street hit. Now a £25m turnove...