Brewing up a storm
BrewDog founders Martin Dickie and and James Watt are on a mission: to change the perception of the Great British pint. They’re clearly on to something. With turnover of £19m this year, many a punter shares their passion
(H)November cover.indd 1
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VOLUME 02 ISSUE 11 / 2013 09 10 12 13 14 82 98
Editor’s letter Contributors News & events Talking point Book reviews Franchise news Start-up diaries
“We cobbled everything together ourselves, whether we had to beg, barter or bootleg” James Watt, BrewDog
16 The Elite interview
BrewDog has given beer a new lease of life
23 One to watch
Bloom.fm is harnessing mobile for the benefit of the music industry
27 Tech me out
An entrepreneur without tech skills nowadays faces an uphill battle
CONTENTS 33 Start-up on a shoestring
48 Finding your voice
65 Fresh blood
38 A taxing issue
52 Super quick wins
68 Tech for start-ups
40 Plan of action
57 Foreign treasures
71 Keeping up app-earances
60 Donâ€™t mind the gap
77 Top of the pile
Taking the lean approach from the start can pay dividends It helps to keep a decent handle on your tax liabilities Investment is less likely without a trusty business plan
43 Time for a trip?
A business excursion can be a worthwhile expense
Picking a language for your brand is essential in the digital age Real time bidding is set for a further revolution Immigration has untold benefits for business British entrepreneurialism isnâ€™t a generational thing
A new recruit can create new challenges for all concerned This month, the Samsung Galaxy Note 3 and iPhone 5s go head-to-head Mobile business apps try to compete with their consumer counterparts David Hathiramani unravels the mysteries of SEO
85 Franchise in the spotlight Wrap It Up! is taking the fast food arena by storm
91 End of the road
Business partners need to prepare for the worst, just in case
77 (H)Contents.indd 2
85 31/10/2013 19:56
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EDITOR’S letter VOLUME 02 ISSUE 11 / 2013
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Rebellion is the only thing that keeps you alive
EDITORIAL Hannah Prevett – Editor firstname.lastname@example.org Josh Russell – Feature Writer email@example.com Adam Pescod – Feature Writer firstname.lastname@example.org Helene Stokes – Chief Sub-editor email@example.com DESIGN/PRODUCTION Leona Connor – Designer firstname.lastname@example.org Clare Bradbury – Designer email@example.com Dan Lecount – Web Development Manager firstname.lastname@example.org CIRCULATION Malcolm Coleman – Circulation Manager email@example.com ACCOUNTS Sally Stoker – Finance Manager firstname.lastname@example.org Colin Munday - Management Accountant email@example.com ADMINISTRATION Charlotte James – 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 Call: 01206 266 842 Elite Business Magazine is published 12 times a year by CE Media Solutions Limited, Weston Business Centre, Hawkins Road Colchester, Essex, CO2 8JX T: 01206 266 849 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.
Rebels aren’t your average stay-athome Joes
We all have an idea of the archetypal entrepreneur in our mind’s eye. We hear stories about precocious teenagers undercutting tuck shops in the school playground and washing neighbours’ cars. They often share similar traits, among them a disdain for authority and an appetite for non-conformity. Rebellion against the status quo is a common trait of successful entrepreneurs; they stick two fingers up at the establishment and carve out their own route to the top. BrewDog, the brewers based in Aberdeen have done just that. Tiring of drinking the same bland, gassy, mass-market beers, James Watt and Martin Dickie decided to see if they could do better. They could. Their beers are now sold globally, and BrewDog bars have sprung up in many of the UK’s main towns, with more to follow in some of the most exciting cities in the world. The pair are also currently starring in a TV series across the Atlantic where they roam around the US trialling beers in different States. Fame and riches beckon. But none of this would have been possible without taking a risk. Rebels aren’t your average stay-at-home Joes. They make shit happen. They beg, borrow and steal to ensure their plans come to fruition. This is one of the reasons we published our guide to bootlegging this month (p33). And whilst Watt and Dickie are still spring chickens at 31, this isn’t to say people of more senior years can’t start their own businesses too. A sprightly 60 year old can have more to offer than a wet-behind-the-ears 18 year old, as we discuss on p60. We reckon that whatever your age, the best entrepreneurs have that anarchic spirit. The best businesses push the boundaries and keep the stalwarts on their toes. Lest we forget, as Marianne Faithfull once famously said: “Rebellion is the only thing that keeps you alive.”
HANNAH PREVETT EDITOR
(H)Editor's comment.indd 1
We’ve been extremely lucky this month in netting the talented Aberdeen-based photographer Addie to snap November’s coverstars, BrewDog founders James Watt and Martin Dickie, on his home turf. Whilst weddings are his usual bread and butter, taking him on short hops to Skye and international trips to India, he’s looking to make the most of the quieter winter months with some personal projects. First up is a Great-Gatsbyinspired shoot on the site of a music video he is co-directing.
Sarah McVittie & Donna Kelly McVittie and Kelly are the talented team behind Dressipi, and our new Start-up diaries columnists. The pair evenly balance each other out, with product- and detail-focused Kelly packing the corporate capability and McVittie bringing the start-up skills, with her sales and shareholding expertise. And it’s not only their passions in the workplace that complement each other – Kelly prefers to spend her free time brushing up on her piano playing, whilst McVittie likes to let off steam by hopping on her motorbike.
David Hathiramani Hathiramani’s head was darting between the computer screen and the cutting table when he went to visit A Suit That Fits’ team of talented tailors in Nepal. For him, it only seems like yesterday that his co-founder Warren was staying with a family of tailors in the country and he’s very excited by how the team has grown – not to mention getting the opportunity to wear his short-sleeved linen shirt from the company’s range.
Adam Pescod This is the view that feature writer Pescod was treated to during the first week of October as he took a well-earned holiday to Turkey – with his future missus. However, he hasn’t had much chance to put his feet up upon his return, having cracked through his usual workload in the space of three weeks. No rest for the wicked, then.
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01/11/2013 00:28 9/23/2013 10:22:28 AM
NEWS & EVENTS Helga Esteb / Shutterstock.com
When things are hard for your business and you need a spot of advice, where do you turn? Well, aside from these pages, it seems the place for many a small business to find some support is from friends and family, according to research from Bibby Financial Services. The figures show that almost a quarter of entrepreneurs would go to their nearest and dearest, coming ahead of the 20% that would approach a financial adviser or the one in six that would head online or to an accountant. It certainly brings more truth to the lyric ‘I get by with a little help from my friends’.
WORDS: JOSH RUSSELL
It seems Beardy’s got other billionaires beat, as interior landscaping company Ambius reveals results of a poll to determine Britain’s favourite business personality. Sir Richard Branson topped the the survey of 2,000 adults, netting nearly a quarter of the votes. Meanwhile, Long Sugar had to make do with just 10%, narrowly fending off a challenge from Simon Cowell who only amassed 7% of the vote. Given Cowell’s experience with public votes, you’d have thought he’d be a shoo-in.
UPCOMING EVENTS The Finance Professional Show November 6 Olympia Central, Hammersmith Road, London, W14 8UX
National Sales Awards November 7
Small businesses can often be seen as the ‘mom and pop’ stores of the enterprise world. And not without good reason it seems, as research from Close Brothers Asset Management reveals almost half of all business owners intend to pass the business on to their offspring when they retire. However, it seems not everybody has worked out all of the nitty gritty involved, with 13% admitting that they haven’t given their succession plan any thought. Time to grab the legal paper and get cracking?
We bring sad tidings: the John and Paul of the fast food world have gone their separate ways after McDonalds has announced it will no longer be serving any of the 57 Heinz varieties in its stores. The decision to no longer stock the world’s most famous ketchup came after news that Bernardo Hees, the former head of Burger King, has taken over as the condiment producer’s chief exec. Once an enemy...
Whilst there is still something of a question mark overall about our current positive economic performance, it seems the employment market is currently feeling rather chipper. Advertised job vacancies rose to their highest level for almost two years in September, according to the latest UK Job Market Report from classified ad server Adzuna. There were just 1.9 jobseekers for every vacancy in September 2013 in comparison to 2.3 the same month the previous year. Job’s a good ‘un.
In the start-up world, there’s nothing like optimism to see you through, particularly after a tough five years. So some good news for Londonites comes in the form of the latest Global Entrepreneurship Indicator from international network the Entrepreneurs’ Organization. According to the report, whilst less than half of entrepreneurs around the world are expecting improvement in the economic situation, a whopping three quarters of London’s entrepreneurs were planning for brighter times ahead.
Scottish Business Exhibition November 14-15
Business Scene Birmingham Connections November 20
Prelude Group – Breaking Down the Barriers to Growth November 14
Mercury Expo 2013 November 20
SECC, Exhibition Way, Glasgow, G3 8YW
Troxy, 490 Commercial Rd, London, E1 0HX
Dexter House No.2 Royal Mint Court, London, EC3N 4QN
Southampton Business Show November 7
Business Junction – Networking Lunch November 14
Ageas Bowl, Botley Road, Southampton, SO30 3XH
National Business Awards 2013 November 12
Grosvenor House, Park Lane, London, W1K 7TN
(H)News & events.indd 1
Video game Grand Theft Auto V has attracted its fair share of press, both positive and negative, having simultaneously smashed sales records whilst allegedly causing unprecedented levels of sickies pulled around release day. However, there is a very good reason to be cheering on its release, as news reveals that the game has single-handedly led the first rise in computer games sales for five years, particularly benefitting Tesco, which pocketed a whopping third of the sales profit during the first two weeks after the game hit stores. We did try to contact the store for comment, but its marketing manager is still stuck on a rather tricky courier mission.
MWB Business Exchange 10 Greycoat Place London, SW1P 1SB
Regus, Victoria Square, Birmingham, B1 1BD
Mercury House Willoughton Drive, Foxby Lane Business Park Gainsborough, DN21 1DY
Thames Valley Expo November 21
Museum of the Great Western Railway, Fire Fly Avenue Swindon, SN2 2EY
East Midlands Business Expo November 25
The National Space Centre, Exploration Drive, Leicester, LE4 5NS
Digital Marketing Show 2013 November 26 – 28
ExCeL, Royal Victoria Dock, London, E16 1XL
The Business Show 2013 November 28 - 29 Olympia Central, Hammersmith Road, London, W14 8UX
Angels Den – SpeedFunding Event November 21 Harper MacLeod, 8 Melville Street, Edinburgh, EH3 7NS
A full event listing is available on our website: elitebusinessmagazine.co.uk /events
Free and fair? Are the government’s ‘back-to-work’ schemes the right way forward?
WORDS: ADAM PESCOD
hen assessing the success of a political party’s stint in government, people often use the unemployment rate as a decent marker. Needless to say, this issue has been a key one for the Tories and Lib Dems throughout their time in coalition. However, whilst things on the unemployment front aren’t as grim as they were this time five years ago, a few of the measures that have been put in place to tackle it have sparked some controversy. So-called ‘back-to-work’ schemes – which are designed to offer the long-term unemployed a route back into work through unpaid placements – fall firmly into this bracket. Last week the Supreme Court upheld a ruling that the regulations underpinning such programmes were invalid and legally flawed. It was adjudged that not enough information was given to jobseekers. The decision was a victory for graduate and former jobseeker Cait Reilly, who initially brought the case because of what she claimed was unfair treatment at the hands of high street retailer Poundland. Reilly was said to have worked without pay for three weeks at the store and faced losing all of her benefits if she hadn’t seen out the term, as stipulated under the terms of the sector-based work academy (SBWA) scheme. Critics have slammed such measures as something akin to ‘slave labour’ whereas supporters recognise the government’s efforts in returning people to employment. What, though, do those at the coalface think? Do back-to-work schemes offer a fair deal for both employer and employee?
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Far from perfect but benefits on both sides Although the back-to-work scheme appears far from perfect, it does certainly allow prospective employees to benefit from practical work experience, while providing businesses with the opportunity to trial employees before committing to anything. As a growing Graham Ewart managing director specialist healthcare manufacturer, hiring the of Direct Healthcare right people with the correct skillset is of the Services utmost importance to us. That said, we are very open to hiring people with the right attitude and willingness to learn new skills. We have benefited in the past from a situation similar to this scheme. 13 One local person religiously came in to our offices and asked if we had any job opportunities throughout the winter months. Unfortunately, there were none available at the time, but he offered to volunteer for us to demonstrate his potential. He was willing to learn and to work hard and quickly proved he possessed the appropriate skillset. We subsequently offered him a permanent role within the company and he is now overseeing one of the key processes in our manufacturing facility. This example shows how a smaller business can support unemployed people, by helping them gain practical skills in the workplace and providing them with the opportunity to demonstrate their abilities to a potential employer.
Probably in need of a rethink Back-to-work schemes may one day work for larger organisations, but by and large they probably need a rethink in order to work properly. Being valued is an important part of a working relationship, and free labour from Daniel Booth someone that may have little motivation to try, search marketing let alone turn up for a hard day’s work, is only manager at Jelf ever going to end badly. Surely putting somebody back into work from long-term unemployment – in a fair and properly paid position – and giving them the opportunity to develop their skills and grow as a professional is far more rewarding than getting free labour from a back-to-work scheme. Also, as a small business, the quality of your staff is in many cases even more important than in a big company where you have more staff to support the work effort. So the question is whether small businesses want cheap and quick or would prefer to wait for the right person for the job and be prepared to pay a little more.
BOOK REVIEWS Delivering effective social customer service – How to redefine the way you manage customer experience and your corporate reputation Carolyn Blunt & Martin Hill-Wilson
he impact that social media has had, and will continue to have, on enterprises of all sizes is nothing short of enormous. Companies are now open to criticism and praise like never before, with one Facebook post or tweet having the potential to either transform a firm’s fortunes for the better or damage its reputation, seemingly beyond repair. However, one can reasonably assert that the business owners who fail to accept that social media is here to stay are the ones who stand to lose the most. The very exposure that firms now have to the public means they have to adapt their customer service accordingly. This, ultimately, is where Blunt and Hill-Wilson come in. Delivering effective social customer service is a comprehensive yet accessible read for social media savvy entrepreneurs and novices alike. Far from advocating the dismissal of tried and tested customer service channels though, the authors explain that the imperative is incorporating these into a ‘social customer service’ strategy. And the message that rings through is that responsiveness and transparency should be central to any such strategy, along with a recognition that most criticism will be well-founded. In conclusion, the authors describe a world where PR, marketing and customer service teams work hand-inhand to keep on top of the social agenda at every touch point. It goes without saying that Blunt and Hill-Wilson’s book will stay relevant for a good while yet. AP
Delivering effective social customer service, published by Wiley, is out now and retails at £19.99
(H)Book reviews.indd 1
The Year Without Pants – WordPress.com and the future of work
A comprehensive yet accessible read for social media savvy entrepreneurs and novices alike
an a company that breaks all the rules really ever be successful? Given that Automattic runs the fifteenth most popular website on the planet, WordPress.com, and is one of the driving forces behind WordPress, the tool powering 20% of web, it seems like the answer is an unequivocal and emphatic ‘yes’. In this book, Scott Berkun, popular author and former Microsoft manager, recounts his return to the coalface as he goes to work for a truly unconventional employer, a business where employees work remotely and seldom meet, where blogs and online chat software take the place of emails. The Year Without Pants manages to achieve two seemingly contradictory aims. Berkun deftly portrays the culture into which he enters, Berkun capturing first-hand the affability and deftly portrays the openness of such a significant web company. culture into which But equally, he doesn’t shy away from discussing how Automattic has thrown down he enters the gauntlet for the businesses that follow and the trials this can entail. Those looking for observations about the changing nature of the workplace won’t be disappointed, but equally this is far from being just a passionless futurist text; Berkun infuses the whole book with real humour and gives an excellent personal account of the inner working of one of the world’s most unorthodox enterprises. JR
The Year Without Pants – WordPress.com and the future of work, published by Jossey-Bass, is out December 2013 and retails at £17.99
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the elite INTERVIEW
Rebels with a cause W
WORDS: HANNAH PREVETT PHOTOGRAPHY: Jonathan Addie
(H)Elite interview.indd 1
hen the UK smoking ban came into force in July 2007, pub landlords warned about the implications of outlawing lighting up in pubs. The regular ale drinkers would stay away, they said. The Stella Artois-swigging twentysomethings would attend house parties where they could chainsmoke their Benson & Hedges until the sun came up. They weren’t wrong. Pubs began closing at an alarming rate, but the smoking ban wasn’t the only cause. As the recession kicked in, pubs struggled under the weight of ever-increasing beer duty, business rates and rental costs. That’s not to mention the ‘cheap as chips’ supermarket booze deals that were keeping people indoors before they headed straight to the clubs. At the same time, overall consumption of beer in Western Europe began to slide. The multinational beer brands started to see the fizz taken out of their profits. But whilst the mainstream beer companies are largely in decline, a new drinks brand has emerged from the fray with one key goal in mind: to breathe new life into the Great British pint. Six years after starting their business, James Watt, co-founder of BrewDog, the craft beer brand with 210 employees and turnover of £19m, says the aim remains the same as it was when he and Martin Dickie first set up shop in 2007. “The biggest mission of our business is to try and encourage people’s passion for great beer and show them that there is an alternative to the mainstream, lowest common denominator, mass-market beers that dominate the market,” he explains. Much of the company’s branding is based on the premise that the company is a foil to the established beer companies operating globally. “Our flagship beer is called Punk IPA. We see what we do as a modern day rebellion against beers which are bland, tasteless and mass market; we like to think we’ve got the same attitude against the old school beer incumbents as the punks had against pop culture,” says Watt.
The British beer industry has taken a bit of a kicking in recent years. Thankfully, two young Scots have taken it upon themselves to offer something new, exciting and controversial - to the market
“Ours is a rebellion against the bastardisation of beer.” Watt, now 31, has demonstrated an impatience for the tried and tested methods of doing things since he was a child. “I hated school,” he says. “I was always complaining to teachers about how badly they were doing things and telling them how to do their lessons better.” Bored and frustrated, by the time he was of secondary school age, Watt was skipping classes to go out fishing with his father and grandfather. Juggling his fishing expeditions with school work, Watt secured a place at the University of Edinburgh. “I very reluctantly studied law and economics because I felt I should study something.” Graduating in 2004, Watt took a job in an office – which he quit after just two weeks. “I absolutely hated it. I studied for four years to get a job that I lasted two weeks in,” says Watt. “I looked around the office and saw people in their fifties doing exactly the same as I was doing, which was just glorified admin. So I thought, ‘to hell with this’.” A better option, it seemed, was to follow in the footsteps of his forebears: Watt spent the next five years working full time on a fishing boat and studied for his captaincy. He even continued to work as a fisherman during the first two years of BrewDog’s inception, until he and Dickie drew salaries. Dickie and Watt had been firm friends since meeting in their English class at the age of 12 in their native Aberdeen. They both later studied in Edinburgh, though attending different educational institutions, and shared a home in the city. One of their shared passions was for tasty beer. But we’re not talking about the ‘£1 a pint’ nights it’s easy to associate with students and recent grads. No, Dixie and Watt took an altogether different approach to beer drinking. “A long time before we set up, we used to make beers at home,” explains Watt. “When I was working on the boat, my garage was converted into a mini alchemy zone where we used to make all of these crazy beers. We were massively
“The biggest mission of our business is to try and encourage people’s passion for great beer”
(H)Elite interview.indd 2
the elite INTERVIEW
frustrated that we couldn’t find any beers we wanted to drink in the UK, so we thought the best thing to do was to make our own.” The beer aficionados began importing craft beers from America before attempting to copy them in the garage. “Sometimes they’d work; sometimes they wouldn’t work so well and they’d taste like a French fry,” Watt laughs. During his time on terra firma, Watt would accompany Dixie to various beer tastings, and on one such trip they encountered the late Michael Jackson – an influential beer and whisky writer (not to be confused with the pop star). “We met him in London where he was doing a beer tasting and talk, and we took one of our beers we’d brewed at home for him to taste. He told us to quit our jobs and start making beer.” They followed his advice. On their return to Aberdeen, Watt and his business partner obtained a £20,000 bank loan, some secondhand stainless steel tanks and leased an industrial unit that, by Watt’s own admission, was “falling apart”. “We cobbled everything together ourselves, whether we had to beg, barter or bootleg. We
“We wanted to get people drinking beer for the experience, not just the effect” did a lot of the welding and wiring and just got everything set up,” Watt recalls. Despite having brewed in smaller quantities in the past, not everything went to plan initially. “We had to condemn the first couple of batches – not because they weren’t drinkable, but because we were stupid,” says Watt. The first batch, he explains, was contaminated after his phone, car keys and a mercury thermometer fell out of his shirt pocket and into the mash tank. And the second batch didn’t fare much better. “We were trying to save money so we bought some cheap hoses, but they made the beer taste like plastic, so we had to lose that as well.” The pair then stumped up another £500 to make a third batch. According to the Sunday Times Fast Track, BrewDog is now the UK’s fastest-growing food and drinks company. Did the start-up’s success come as a surprise to its founders? “No, not really,” says Watt, his response driven by conviction in the quality of the product rather than arrogance. “Even when we were just two humans and a dog filling bottles by hand, sleeping on sacks of malt on the floor, driving delivery vans
(H)Elite interview.indd 3
and working 20 hours a day, we were really ambitious,” he explains. “If you look at beer in the UK, most people think beer is something you go out and you drink eight pints of. It’s cold and fizzy, it has no flavour. You fall over, you have a kebab. Then you wake up the next day with a hangover and you tick Friday off your todo list,” laments Watt. Conversely, Watt and Dickie wanted to “elevate” the status of beer. “We wanted to get people drinking beer for the experience, not just the effect,” says Watt. “We wanted to put the taste, the flavour, the craftmanship, the passion back into people’s beer glasses. So even back then when we were only selling ten cases a week and the bank were shouting at us about not paying back our £20,000 bank loan, there was a lot of ambition behind what we were trying to do.” Manufacturing is a famously cash-hungry affair which often means expansion is a doubleedged sword for entrepreneurs. Grow too slowly and it’s difficult to make ends meet, pay staff and buy new equipment. Grow too quickly and the cash dries up quicker than you can repeat the entrepreneurs’ mantra, ‘cash is king’. “It’s not just about staying afloat but having enough cash to expand aggressively,” Watt says. Part of the reason BrewDog has been able to grow strongly is that it has had widespread support from the UK supermarkets. Interest was initially sparked when BrewDog won a beer competition run by Tesco, the UK’s biggest grocer, after which they were offered a mammoth distribution deal. “I sat there with my
best poker face on and didn’t mention the fact that it was two guys and one dog filling bottles by hand,” says Watt. Tesco wanted 2,000 cases for distribution in 400 of its UK stores. This would mean vastly ramping up production – and quickly, too. The contract was due to start in four months. Watt and Dickie went to their bank, described the deal and asked for a further £150,000 loan – £100,000 for a new bottling line and £50,000 for new fermentation tanks. “They just laughed at us,” says Watt. Undeterred, the duo walked into another high street bank and told them that a competitor had just offered them an excellent asset finance deal and if they could match the deal BrewDog would shift all the banking to them. “It worked,” exclaims Watt. “Business plan one: make copy beers and tell lies to banks. A small piece of advice for start-ups.” The hustling paid off: the beer came off the line a week before it was due to ship to Tesco. And no sooner did the beer hit the shelves at Tesco did the phone start ringing at BrewDog HQ. “Sainsbury’s called. And then Waitrose. And then we started doing some export. It all just picked up from that point,” says Watt. Watt’s descriptions of his dealings with the supermarket makes the process sound simple – far from the horror stories propagated by many entrepreneurs. Is it as tough as it sounds? “No. It’s because they’re idiots,” says the no-nonsense Watt. “We don’t negotiate with anyone. We tell the supermarkets, ‘this is what we do and this is how much it costs. If you want it, that’s fantastic,
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the elite INTERVIEW
but that’s how much it’s going to cost. We’re not going to discount, we’re not going to do buyone-get-one-free offers.” The Scotsman says running promotions is a form of self-harm for entrepreneurial businesses. “It’s so easy to drive sales growth by discounting, but as soon as you start losing that gross margin, that’s the lifeblood of your business and that leaves you with nothing. You’ve got to believe in what you do and get a fair price. It takes four times as long to make Punk IPA as it does to make a standard industrial beer. We use twice as much malt barley. We use 20 times more hops in it. It’s a handmade artisanal product: the last thing we want to do is discount it.” This is just one facet of a stellar sales and marketing strategy – one of Watt’s core responsibilities, along with finance, while Dickie spearheads management of the company’s production facilities in Ellon, Aberdeen. BrewDog’s unique approach to marketing is one of the ways it has managed to set itself apart
(H)Elite interview.indd 4
“You’ve got to believe in what you do and get a fair price” from larger, often faceless corporate rivals. “So many companies base their advertising or marketing strategy on this target market thing. They’ll say, ‘my target market is guys aged 24-35 that like football.’ It’s so silly,” chastises Watt. “I think it comes across as unauthentic and ingenuine, so what we’ve always done is completely selfish. We do something that we love and we would want to drink ourselves, we put bars together we’d wanted to go to ourselves, and if other people want to drink the beers that’s awesome. Regardless of who they are or what they do.” Watt’s unconventional approach to marketing has certainly ruffled a few feathers since the company’s inception. There have been a few deliberately controversial wheezes: brewing
beer at the bottom of the ocean; making 55% proof beer that was packaged in taxidermy; campaigning outside the Houses of Parliament with a dwarf to protest about not being able to serve beer in three-quarter pint glasses. “They’ve all been about how we can open up the discussion about what beer is and how it can be enjoyed,” says Watt. Leveraging the power of social media has also been a major focus for the brewery, which wouldn’t be able to compete with the astronomical advertising spending power wielded by the conglomerates. “Conventional advertising and marketing for beer companies is all very traditional, it’s about how much money you can spend on TV or magazine advertisements,” says Watt. “But all of a sudden you go online and it’s not about budget. It’s about how intelligent, how engaging your content is. In that type of arena we can not only compete with big companies, but knock their socks off. We’ve made videos that cost £200 to make, but more than half a million people have watched.” Another strength of BrewDog versus more traditional rivals is that the company now has a catalogue of bars – 11 in the UK and one in Stockholm, Sweden. And that number is set to head in one direction only. BrewDog bars are set to open in Tokyo, Sao Paulo, Brussels, Rome and Berlin, and a further handful of locations being scouted in the UK. For Watt, the bars are a vital part of the company’s lofty ambitions to educate the general populace about the merits of beer. “We want to take customers on a journey and educate them, so we do things like beer pairings,” he explains. The company also imports glorious beers from around the globe, from as far afield as Japan, New Zealand and America. One of the central tenets to BrewDog’s business strategy – and the reason it’s been able to raise the funds necessary to open bars and grow at such a rate – is its crowdfunding scheme Equity For Punks, whereby customers can become shareholders for the princely sum of £5. As a result, the company now has 12,000 shareholders (with Watt and Dickie hanging on to around 80% between them) and the business has raised £8m through the scheme, which has been run three times. Whilst Equity for Punks was originally dreamt up out of sheer frustration with bank finance – or the lack thereof – the company’s highly original crowdfunding scheme has also helped engender a culture of trust and pride among customers and shareholders. “We’ve only been able to open bars in London and other places because of the Equity for Punks investment,” says Watt. “It means customers can take their friends to our bar in Shoreditch for example and know they helped fund it. That’s quite evocative.”
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01/11/2013 10:58 00:29 25/10/2013
ONE TO WATCH
Mobile app Bloom.fm is doing its bit to dispel the doubts of aspiring music stars
WORDS: ADAM PESCOD
“From an early age, I had stamina and massive risk appetite”
(H)One to watch.indd 1
he music industry has been turned on its head over the course of the last decade. Some would say the ‘download culture’ that has engulfed the industry is merely a sign of the times. However, whilst the internet has helped uncover a fair proportion of the talent that is currently gracing our airwaves, many new artists are left frustrated in their bids for stardom and riches. The age of paying for music is in danger of reaching a swift conclusion, or so it may seem. Predictably, this is a fate that Bloom.fm’s Oleg Fomenko is keen to prevent. But the co-founder of the revolutionary mobile music app wasn’t able to put his dream into reality as soon as he probably would have liked. In fact, the very notion of owning his own business was alien to him in his formative years. “I wish I could say I wanted to be an entrepreneur from a very young age but to be honest I didn’t know the word, neither did I know the concept,” he recalls. “Having been born into the Soviet Union, there was no real business or entrepreneurship. The state was running pretty much everything.” Fomenko did however still possess a couple of qualities that would stand him in good stead for his future endeavours. “From an early age, I had stamina and massive risk appetite,” he explains. “This risk appetite has stayed with me and at that time I think it was hard to understand what it actually was but as the Soviet Union started to crumble, and
businesses started to emerge, I realised that it is actually a competitive advantage.” And Fomenko was soon putting both these traits to good use, selling souvenirs to tourists whilst at university, and evading the authorities in the process. “If you were caught making a transaction in a foreign currency, you could end up in jail,” Fomenko reveals. “In practice, it very seldomly happened because basically, being corrupt, they simply took the money off you, threatened you, put your name on some roster and then let you go. But if you ran very well, that didn’t happen.” Music did serve as a welcome accompaniment to Fomenko’s exploits in this period, but his passion was somewhat tainted as the digital revolution swept eastward. “I used to value my music collection not by the number of units, but by the amount of money that had gone into it,” he says. “All of a sudden, digital happened and there was an opportunity to have access to all of this music that before either didn’t penetrate through the Iron
ONE TO WATCH
“I am building a business to actually generate money for artists”
“Visually we had already started to experiment with a user interface featuring large circles”
(H)One to watch.indd 2
Curtain, or I didn’t have enough money to buy. But it became blatantly clear very quickly that people started valuing their music collections in gigabytes and later terabytes, which was almost a derogatory way of looking at all of this amazing music that is out there.” Suffice to say, the seed was planted for the idea that has now come into Bloom. Fomenko’s desire to preserve the earning potential of recorded music grew and grew. An encounter with one musician at a party in Vienna – where Fomenko had moved in 1996 to work for Coca-Cola – was something of a clincher. “It was extremely depressing to hear him saying ‘I used to be able to make a living out of music, right now I need to make a living to make music’,” he comments. “This really cut into me because if we want to have more good music coming our way, we need to make sure that people are motivated, driven and supported to continue improving their skill.” Fast-forward to 2013 and Bloom.fm has amassed a quarter of a million customers in less than a year, with every major record label – bar Warner – and numerous independent labels coming on board with the beautifully designed mobile music app. It currently offers users no less than 22.3 million tracks to whet their appetite, or more accurately tickle their eardrums. And what is its closest competition? Well, one could say that Bloom loosely operates in an arena that also hosts the likes of Spotify and Last.fm. It enables users to tap into its rich library of tunes from their iPhone or Android at any time of day, and suggests artists based on genres and sub-genres. Yet, there are a few things about Bloom that make it a slightly more intriguing proposition to consumers. Firstly, unlike the names mentioned above, Bloom was primarily developed with mobile – and more specifically touchscreen devices – in mind. “One of the things we wanted to focus on was how we could make a music app that was designed for a touch screen rather than a mouse and pointer,” explains Fomenko’s fellow founder and Bloom’s chief technology officer Thong (Tum) Nguyen. Indeed, the name of the app actually sprang from the initial experimentations with mobile, at least to a certain degree. Chance also had its part to play, with Nguyen admitting that Bloom emerged after he misinterpreted a suggestion from design manager Emma Bathgate. He adds: “Visually we had already started to experiment with a user
ONE TO WATCH
Company CV Name: Bloom.fm Founded by: Oleg Fomenko & Thong Nguyen Founded in: 2013 Team: 27
interface featuring large circles. In one brainstorming session, Emma jokingly suggested we call the company ‘Balloon’ which I misheard as ‘Bloom’. To us, the Bloom name perfectly reflected the clean fresh start we intended the mobile project to be.” Fresh is certainly one way to regard Bloom, and not only because Fomenko and Nguyen’s first project – social music sharing and download website mflow – promised much, but ultimately failed to deliver their dream. The design of their new mobile project is like nothing else on the market. It is simple, slick and easy on the eye; sentiments that are firmly echoed by the customer reviews at the heart of Bloom’s first advertising campaign, launched in September. And simplicity certainly holds true for the Bloom logo, which Nguyen says, “came as a result of our design philosophy keeping it simple.” He further explains: “The logo itself is reminiscent of vinyl, CDs and the iPod click wheel.” Yet, whilst the design and platform of Bloom
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are undeniably appealing, this in itself was never going to incentivise the masses to drag themselves away from the seemingly endless supply of free music on the web. There had to be at least one other hook. Needless to say, a personalised radio service and streaming facility is only one string to the Bloom.fm bow. A unique music ‘borrowing’ system allows users to download tracks to their phone and listen to them offline before swapping them whenever they fancy a change. And the number of Bloom tracks that one has on their phone at any given time is tied to the on-going fee charged to users, with 20 tracks coming in at just £1 per month. Fomenko believes this price plan gives Bloom the edge over its rivals and opens the door to people who may have previously been unwilling to empty their pockets for new music. “Right now, if you want to listen to music on your mobile, you have a binary choice of either paying zero and not getting anything or having to pay £10 per month,” he says. “What we are doing is simply giving people a ladder that gives them comfort that they can choose whatever level they want.” Turning the musical tide isn’t going to occur overnight for Fomenko and Ngoyen. However, winning over the big guns and amassing the volume of customers it has since January is a significant first step. One simply can’t help but admire the personal mission that underpins the Bloom.fm story. “I am not building a business to sell,” insists Fomenko. “I am building a business to actually generate money for artists which was an original compelling case and emotional motivation for me back in the year 2000. Negotiating deals in ten years’ time for a country that probably doesn’t have even a handful of smartphones now would be absolutely fantastic.” Whilst sticking a tagline of ‘the music app’ on a new venture would usually be enough to raise an eyebrow or two, Bloom.fm is definitely proving itself to be worthy of such a title thus far.
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Those who can, tech
Technology has always been big business but public appetite for tech success stories has been increasing exponentially in recent times. Just earlier this year, the then 17-year-old Nick D’Aloisio became an overnight start-up celebrity and the world’s youngest self-made millionaire after selling Summly, his bedroom-coded news aggregation app, to Yahoo! for a reported $30m. Whether offering a new approach to recruitment or a potential form of alternative finance, technology has becoming a vital consideration for any start-up. As Stephen Lake, CEO and cofounder at Thalmic Labs, creators of gesture control device Myo, says: “We know that the future is in tech.” Maker of biometric recognition technologies Bionym is just one example of a new breed of start-up that is wholly dependent on these sorts of skills “This kind of business simply does
Technology is a ubiquitous part of our lives. Perhaps then it shouldn’t be too big a surprise that tech skills are becoming a vital part of launching any start-up
I WORDS: JOSH RUSSELL
“We know that the future is in tech”
t’s hard to deny that we’re living in a technology dominated age. With a lot of London start-ups moving east to Silicon Roundabout and with apps and software-as-aservice becoming essential tools for many start-ups, it can feel like entering the commercial world has very much become a case of program or perish. Tech skills are increasingly being seen as essential for enterprise, regardless of sector, and yet the number of those entering the workplace with a fundamental degree of fluency is still alarmingly low.
“The average person’s daily life is becoming more steeped in technology” Karl Martin, Bionym
Robyn Exton, founder, Dattch
Richard Nicholson, giving and marketing manager, Dell UK
not get creative without that kind of background,” remarks Karl Martin, the company’s CEO. “We devoted a good chunk of our lives to the technology arena and to developing deep skills and knowledge. There’s no question: we could not have started Bionym without that background.” In part, the reason tech skills have become so important is down to the fact that technology has become so ubiquitous in our culture. “The average person’s daily life is becoming more steeped in technology,” says Martin. An example he gives is the smartphone; whilst a lot of the smartphone market may seem to be driven by aspiration and a desire to ‘keep up with the neighbours’, this would be to deny how vital a part of our lives this sort of technology has become, acting as our main gateway to information. He continues: “Anybody who doesn’t have one isn’t adept at navigating that world; they’ll typically have the sense of being left behind.” Because every consumer is, by necessity, hyper-aware of technology, this means that having at least some degree of knowledge about the impact of technology on a service or product has become nigh-on essential. “If you’re backwards when it comes to embracing technology in a way that will prevent you from having a strong online presence, I think you’re almost entirely doomed to failure,” says Richard Nicholson, giving and marketing manager for computing giant Dell UK. But increased consumer awareness isn’t the only factor increasing the pertinence of tech skills to modern enterprise. “Day after day you see very traditional business areas, markets and industries being disrupted by small start-ups that realise they can make a product that is a lot more attractive and with quicker development cycles,” comments Martin. With firms that make the most of their tech skills and knowledge able to
bring products to market much more rapidly, there is a fair weight to the argument that technology is democratising the market. “It can’t be ignored – technology is introducing much faster cycles of innovation.” Its disruptive power isn’t the only reason why technology is an essential part of enterprise, however. After all, few people are going to expect a CEO to completely code their own platform; most businesses can hire contractors and freelancers to make up their own skills shortfalls. But being able to understand the terminology and frameworks these individuals are communicating in is vital if a founder is going to marry their strategic aims with their technological strategy. “You don’t have to be a programmer; it doesn’t mean that’s going to be your job,” explains Robyn Exton, founder of lesbian dating app Dattch. “It just means you need a really basic understanding of how the tools around you work.” This is something Lake concurs with. “In certain sectors and positions, those who are tech-literate could definitely see greater success in their roles than those who are less techsavvy,” he says. “Being able to communicate about technology in an efficient and effective manner is certainly a huge advantage in today’s global marketplace.” Regardless of your industry, it is evident then that technology is going to have at least some bearing on your success. And it would be tempting to view the whole subject as something of an open and shut case, if it weren’t for one fundamental issue. Despite the huge demand for tech skills and the increasing consumerisation of hardware and software alike, there is a much publicised shortfall in terms of the number of individuals entering the workplace with the required skills. Eben Upton, CEO of the Raspberry Pi Foundation, the charity producing cheap micro-computers for kids, has had firsthand experience of the dwindling engagement with tech skills through his work as director of studies in computer science at St John’s College, the University of Cambridge. He relates: “It’s probably the premier engineering school in the country, certainly the premier computer science department, and even we were finding it difficult to find enough people who were interested.” Additional time is spent bringing candidates up to speed and when one of the country’s leading institutions is struggling to find enough talented tech students, it underlines a significant problem.
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“There’s always been that tension that it’s a geeky thing to do” Eben Upton, Raspberry Pi Foundation
‘digital native’ because they have cut their teeth on these tools but in fact this only extends to their aptitude as users, not of their base understanding of the inner workings of these tools. “The fact that computers have gotten more user friendly is a good thing,” says Upton. “But it means that, as a society, we’ve lost this free supply of good computer programmers that we used to get when computers weren’t very user friendly. We’re generating a generation of users, a generation of consumers, rather than a generation of producers.” As a result of the disconnect between these clean user interfaces and the underlying languages that build them up, people who are approaching programming for the first time may feel that they are lacking the Rosetta Stone that will unlock the relationship between the two. “Because we’re very visual in our interface, show a child DOS, they’ll freak out and ask ‘what is this?’” Nicholson comments. “That perception of complexity can be a bit negative, instead of ‘don’t run before you can walk’, there’s the fear of ‘how do we even crawl?’” Fortunately, this isn’t the end of the story and there are plenty of individuals and organisations now helping adults and children alike find their feet. One key focus for Dell is its work with the Transformation Trust, which is introducing access to tech in some of the UK’s disadvantaged schools to help open young people’s minds to the possibilities that tech skills offer. “What we’re doing is putting some of the latest, greatest tech in the hands of children that otherwise wouldn’t be able to get access, to demystify it and to give them a purpose,” explains Nicholson. However, one of the issues still comes down to that of hardware; whilst many of Britain’s children may have a computer on their hip in terms of a smartphone, these proprietary and closed-off solutions aren’t necessarily best placed to get kids curious about coding. Luckily, we have another hero at hand in the form of Raspberry Pi. The Raspberry Pi’s main purpose is to get children interested in programming again. Taking the form of a cheap unit, the Raspberry Pi is very flexible and encourages children to
probably went to school for computer science,” comments Martin. dig beneath the surface to see what the technology can achieve. “This is “That’s sort of the new thing. Everybody is a maker. Everybody can the ‘one computer per child’; it goes in everyone’s bedroom, plugs into an old telly,” explains Upton. However, despite its flexibility and low create something because companies like ours put out the hardware and price, it actually comes packaged with powerful 3D graphics and then now you don’t need anything special at home; all you need is a computer and a bit of skill and you can write code.” everything a child might need to get creating without Whether you’re an individual hard at work from a huge barrier to entry. “It comes bundled with all your kitchen table or an executive in charge of a those tools which means that our hope is that there is multinational organisation, it seems the whole world a very shallow learning curve at the start.” But perhaps the most important initiatives are is waking up to the importance of tech skills. “I think if we were doing this whole thing five years those aiming to confront tired expectations of the ago, we would have felt quite lonely because there sorts of individuals that can develop these skills. wasn’t a movement,” Upton says. “But it just happens Exton runs the ‘Geek Girl Meetup’, attempting to challenge stereotypes around tech skills and that it’s an idea thats time has come.” Which is where we reach the fundamental question encourage more women to get involved with coding. at the heart of the debate: should every entrepreneur “We try to help more women get into tech and we be looking at how these skills can help their talk to schools,” she explains. For her it’s a vital step business? Is it really a case of those who can, tech? for us to make, given the huge role technology has come to play in our society. “It’s so important Essentially, yes. Martin believes it’s something that Robyn Exton, Dattch everyone should feel able to be a part of. “Being a because it is literally a language that you use and see creator now is much more accessible,” he says. “The average person in front of you every day but people aren’t asking how to make the stuff doesn’t have to go to school for computer science; they can pick up a few that they consume.” And gradually, we are seeing a shift in people’s expectations. When lessons on the internet and can now create things. That’s really exciting.” This is something Exton concurs with, emphasising that there is no Bionym first put out a call looking for developers to use the Nymi API to time like the present for individuals to pick up these skills. “I would develop new applications, they were swamped with 5,000 responses. “These are just individuals; some of them were self-taught, some of them encourage every single person to start doing it tomorrow,” she says.
“It’s so important because it is literally a language that you use and see in front of you every day”
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Within your means
(H)Within your means.indd 1
The statistics show that more British start-ups are shunning external finance and doing things their own way. But does a commitment to ‘bootstrapping’ always make for success?
iven the sheer volume of negative press around the subject of late, one could be forgiven for thinking that start-ups across the country are chomping at the bit for some external funding. There’s been no escaping the headlines about banks’ reluctance to finance the needs of small businesses, and the notion that an attempt to secure any kind of helping hand will ultimately prove fruitless. However, if a recent survey by online business network Enterprise Nation and accounting software provider Sage is anything to go by, such assertions should perhaps be taken with a pinch of salt. The 10% Growth Survey reveals that 95% of start-ups and micro businesses are looking to grow over the next year. Nothing very revolutionary about that statistic, you may think. Yet, where things begin to take an interesting turn is in the fact that 54% of these small businesses intend to use working capital to help fund their growth, with a further 41% expecting to dip into their savings accounts for the necessary funds. Meanwhile, 68% of company founders explained that they had the security of another source of household income before they set up shop. And only 10% admitted that a lack of financial investment was holding them back from the growth that they are so eager to achieve. These figures certainly paint an intriguing picture and provide some fairly concrete proof that a culture of ‘bootstrapping’ is becoming more prevalent in the UK’s small business arena. Nevertheless, whilst some may see this as a necessary response to the bleak economic conditions our entrepreneurs have been faced with since 2008, others are keen to regard it as an outwardly positive characteristic of Blighty’s burgeoning start-up community. “Business owners are saying ‘we want to make sales, not get into debt, and we want to fund our expansion whilst staying in control’ which
I think is a very good move,” says Emma Jones, founder of Enterprise Nation. “It has just become this very well-trodden path now that everybody says ‘businesses can’t get funding’, but it is really interesting that the majority of people aren’t looking for finance.” Of course, one must be careful not to limit discussion of external funding to the banks and other repayable finance options. Many small business owners are also evading the attractions of an injection of cash from venture capital firms and angel investors. Whilst Jones accepts that such behaviour could engender somewhat gloomier perceptions of the business landscape, she believes it still shows there to be something quite unique about UK plc. “It could be construed that businesses are not investing for growth or they are not going out to get investment for growth,” she says. “The government may look at this and think business owners aren’t prepared to take risks anymore. But I would say it is a great thing because if you have got millions of people trying out things with small budgets, that creates a really entrepreneurial economy.” Indeed, almost to lend credence to Jones’ claims, it is worth bearing in mind that there is far more to ‘bootstrapping’ a business than the avoidance of external assistance from the outset. The very concept of a ‘lean start-up’ is largely founded on a commitment to being as cost efficient as possible in the early stages. This means that any revenues can be reinvested into developing a product that fulfils consumer needs, ideally with a minimal chance of catastrophe along the way. “Bootstrapping forces you to be creative and realise how to get things done with limited resources,” says Daniel Callaghan, founder and managing director of freelance
“Bootstrapping forces you to be creative and realise how to get things done with limited resources”
consultant marketplace MBA & Company. “It helps entrepreneurs to very quickly get a full view of how the market perceives their idea, which in turn helps them to refine the idea.” And Callaghan can certainly speak from experience, having co-founded MBA & Company with £1,000 of his own money shortly after graduating from business school. He explains that this has ultimately stood him in good stead and prepared him for the challenges that lay ahead. “There will be lots of ups and downs in the life of a start-up,” he says. “Starting with a wealth of resources at your fingertips limits that view, whereas starting with limited resources and having to work out how to overcome those obstacles is highly advantageous for the next time an obstacle appears.” Launching an online venture can make things a little easier in this regard, owing largely to the low cost of setting up a basic website to get things off the ground. It also opens the door to utilising cost-effective marketing channels, one of which has become particularly prevalent in the last decade. “Whilst using social media is time-consuming, it is also free,” says Clare Whalley, managing director of business coaching firm Meta4. “So you can definitely be making money in the early stages.” In this sense then, bootstrapping is very
Daniel Callaghan, MBA & Company
founder, Enterprise Nation
founder and managing director, MBA & Company
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much a case of working within your means and only taking money when it is absolutely essential. “A lot of companies will take on external funding, they will get fancy offices, company cars and mobile phones, but they haven’t got any customers,” adds Anna Bastek, CEO of language services provider Wolfestone. “For us, the focus was on getting customers because in my eyes, having a business doesn’t mean having a flashy office.” More often than not of course, taking the lean approach will be as much a necessity as it is a conscious decision to keep strict control of the purse strings. This holds true for Bastek, who moved to the UK from Poland and initially funded Wolfestone with the salary from her full-time job. Suffice to say, this led to many a sleepless night, but she is now looking back on seven years of solid growth, a place among Wales’ Fast Growth 50 companies and a couple of acquisitions in the pipeline. And whilst Bastek is on the verge of securing a loan to help fund these acquisitions, a commitment to bootstrapping has left her debt-free and in full control of her business. The latter, it would seem, is the overarching benefit of such an approach, but the crux of the bootstrapping debate is essentially whether it is a viable ‘long-term’ strategy and tool for rapid, potentially global, growth. “I think it does absolutely at the end of day come down to what the business owner wants from their business,” says Jones. “Do they want to retain full control or are they happy to relinquish some of that in exchange for thinking ‘we will grow quicker if we bring that money into the business?’” For an entrepreneur with their eyes on international reach, the latter will find its way onto the agenda eventually. “It is extremely rare that you can build a brand off the back of bootstrapping,” claims Angus Elphinstone, CEO of delivery comparison website AnyVan. com. “You can get to a point but sometimes investment exaggerates any growth. It makes it a hell of a lot quicker and I think for a company to bootstrap all the way through its term, it is dangerous because that will open the door for its competitors.” Regardless, there can be little doubt that successfully running a business on a shoestring can put an entrepreneur in a strong position when investment becomes a necessity. “We
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took on outside investment because of the speed at which we wanted to grow the organisation and the extra credibility that it can give to you,” explains Callaghan. “The fact that we were able to operate on a lean model and be as professional with resources as we were only showed a good testament to our personal and professional capabilities.” The statistics certainly speak for themselves. And in some ways it’s hard to blame our aspiring entrepreneurs for wanting to do things their own way from the start. That’s the very beauty of entrepreneurship at the end of the day, isn’t it?
“It is extremely rare that you can build a brand off the back of bootstrapping”
managing director, Meta4
Angus Elphinstone, AnyVan.com
Angus Elphinstone, CEO, AnyVan.com
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Five-minute money masterclass
How to make tax less taxing 38
It’s safe to say that the business world has suffered a couple of setbacks in the last 12 months as the likes of Google and Starbucks have been criticised for their tax practices. However, regardless of how one feels about their behaviour, the episode has served to highlight the importance of staying on top of one’s tax responsibilities. After all, the last thing a start-up needs is a knock on the door from HMRC. Moreover, a recent survey from the Federation of Small Businesses (FSB) reveals that our small business owners are spending the equivalent of 12 days – and a collective £500m – on their tax admin every year. In that case, there has probably never been a better time to ask the experts how an entrepreneur can safely negotiate the tax minefield and avoid any unwanted headaches
WORDS: ADAM PESCOD
Maintain regular records
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Taking on the services of an accountant or financial planner may not be an option for a business owner from the outset, so the burden of bookkeeping ultimately falls on their own head. And one hardly has to be a rocket scientist to know that – whilst time-consuming – doing this frequently and diligently should ensure you are operating above board but equally paying your fair share. “Once you have got the bookkeeping done, you can produce monthly management accounts, see how the business is performing and from there you can obviously estimate your tax liability as well,” says Jo Nockels, training and communications manager at TaxAssist Accountants. “Keeping up-to-date with your bookkeeping is also going to facilitate quite a quick turnaround of your tax return.” Keith Macdonald, certified financial planner at Broadway Financial Planning, adds: “Good record-keeping is essential because at the end of the day HMRC may wish to investigate and if your records are patchy, you have got considerable problems.”
Keith Macdonald, certified financial planner, Broadway Financial Planning
Jo Nockels, training and communications manager, TaxAssist Accountants
Chris Daems, director, Principal Financial Solutions
financial planning director, Wingate Financial Planning
Set sufficient funds aside
Monitor the cash situation
A sure fire way to ensure that the taxman stays off your back is to have the necessary money in place when the time comes. This will often entail estimating the size of a tax bill in advance and leaving more than is required in a safe place. “Unless you keep that tax segmented, the temptation is to say ‘there’s loads of money in there – we can actually take more out as income or spend more’,” says Chris Daems, director of financial planners Principal Financial Solutions. “Keeping that buffer in our business has always been invaluable and we find it also works really well for the businesses we work with.” And Nockels offers a reasonable estimate of how much a business owner should be leaving behind. She adds: “As a ballpark, I would always say put aside at least 25% of your profits for your tax bill. That might not cover it all. It might be too much. But at least it means there shouldn’t be any nasty surprises.”
Be aware of your rights It goes without saying that a start-up would generally prefer to be paying as little tax as possible. Fortunately, there are many ways that small companies can enjoy a bit of welcome relief which are fully within the realms of the law. McDonald explains, “There are plenty of things out there to help small businesses. There are enhanced capital allowances and some companies will also be heavy on R&D so there are great allowances there for them to take advantage of.” He adds: “With a good team of professionals around the small business owner, they can really get a grip of their responsibilities but also minimise their tax liabilities legitimately and perfectly sanctioned by HMRC.”
In addition to some of the allowances available to small business, there are also certain things that an entrepreneur can do themselves to help limit their tax liabilities. One of these is maintaining a decent handle on the company’s cash reserves. “I think for a start-up business, the key is probably not pulling the money out of the business very often,” says Alistair Cunningham, financial planning director at Wingate Financial Planning. “Cash in the business, so long as it is still a trading company, is only going to be liable to 10% capital gains tax if you also benefit from entrepreneur’s relief. It is probably just good planning to have loads of cash in the business anyway because then all you pay is corporation tax on the profit.”
“As a ballpark, I would always say put aside at least 25% of your profits for your tax bill” Jo Nockels, TaxAssist Accountants
Outsource when affordable Whilst attaining some assistance from an external party may be not a viable option in the first instance – as alluded to above – it can prove invaluable to the business owner who can afford it. “In an ideal world, a small business owner will want to be outsourcing the paperwork because there is an awful lot of it,” says McDonald. “It is easy to slip up on things and miss deadlines, so to spend their time in that area is going to draw them away from their core purpose. Obviously they could employ somebody to do it, but that is a fixed on-going cost and I think there are perfectly good solutions available to outsource it.” Daems helps put things in further perspective. He adds: “An accountant or bookkeeper is more likely to do accounting and bookkeeping better than you, but it can also be a lot more cost-efficient, both from a monetary and time perspective.”
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Any chances of investment can be ruined if your business plan isn’t up to scratch, says Clive Lewis, the ICAEW’s head of enterprise
Grand plans W
“It’s surprising how many plans dO not give a clear idea of the business model and how it will make money”
hen seeking external investors, your business plan is your calling card. Needless to say, potential investors will receive many plans in a week, so if you want to get to the next stage you have to make yours stand out from the crowd. First of all, you will need to ask yourself what you want to get out of sending your business plan to the potential investor. If the pitch is for equity investment, it’s worth considering whether or not the time – and investor – is right for your business at this stage of its development. Putting together a business plan can be quite a daunting task so a business owner shouldn’t be afraid to take advice on the areas of their plan that they are least comfortable with. For example, among other things, pitching for finance requires financial information and forecasts. Most early stage entrepreneurs will therefore benefit from a discussion with an accountant about the forecasts within the plan. There are also a host of other key bits of information that an investor will be looking for from the business plan. Essentially, it has to summarise your business model in a short and easily understood way. It’s surprising how many plans do not give a clear idea of the business model and how it will make money. Summarising your target market is just as important. One should fully expect to be asked questions like ‘who are your competitors?’
• What did you learn from it? • What questions did the pitch or meeting raise? • What was the feedback? • What would you do differently next time? • Does your business plan need modification?
You may wish to talk through the experience with the person with whom you practiced beforehand. After all, they would have already seen your pitch before the event and an independent person can give insightful feedback. If your potential investor is still interested, then you should expect to have some form of due diligence done on the business. Should the investor be a business angel, they will probably visit the business themselves while private equity investors will employ external accountants to conduct such checks. In this case, you need to be prepared for an intensive period of due diligence, final negotiation and legal agreements.
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and ‘how do you expect to break into the market – is it by offering a lower price, better quality or is your offer just breaking new ground?’ The investors will be interested in the personnel that you have at your disposal too, so you will be expected to identify the key people in your team along with their qualifications, experience and past successes. This not only includes employees but also people who have already invested in the business, as well as mentors and advisers. Furthermore, your plan must detail the opportunities and threats to the business. Potential investors may well have knowledge of the sector so you are probably going to be asked what the dangers are anyway, and detailing the threats can avoid arguments later. Finally, your plan should paint a picture of the future. A good device is to imagine what the business could look like in two to three years’ time. This will help investors focus on the growth potential in the business, or ‘the upside’. Once your business plan is prepared, it’s wise to practice your pitch in front of a friendly audience such as a business acquaintance or your accountant. Pitches to angels or meetings with equity investors will have time limits and you must ensure you get all the facts you want out in a persuasive way and within the allotted time. Then, when it comes to the pitch, it’s important to have the key financials at your fingertips and be as well prepared as possible to answer questions. If you don’t know the answers, it’s better to say that you will provide the information after the meeting. Following your pitch or meeting with an equity investor, it may be a good idea to sit down and review how it went. Some of the questions you could ask yourself are:
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Getting to grips with business trips Making the most of your time away is essential if you’re to benefit from your travels
ven in this age of hyper-connectivity, travelling to help grow a company is often still essential. Whilst the economic situation over the last six years has encouraged more people to find alternatives to pricey trips out of the country, the number of sojourns Brits are taking is increasing year on year. Whilst not back up to its pre-recession level of 9,018,000, according the Office for National Statistics’ (ONS) report Travel Trends 2012, the number of overseas business trips has been increasing by at least 100,000 year-onyear since 2010, reaching 6,956,000 in 2012.
“As the deal values become bigger, you have to involve more people and to get everyone on-side” Philip Witheridge, Grove Group
Clearly then, despite the ready availability of video-conferencing and cloud-hosting software, travel is still an essential element of the way the UK conducts enterprise. In part, this is because meeting face-to-face can give us so much more than FaceTime or Skype. “Humans are still social,” says Philip Witheridge, CEO of the cloud services company Grove Group. Essentially, it can take a lot more than a video chat for us to build up a sense of trust in someone. “You’ve got to create substance and that human touch is about ‘if something goes wrong, is this guy just going to disappear or does he actually exist? Does he
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have the same values as me?’” Whilst this may not be a big deal in low-value, high-volume areas like apps with a one-off payment, trust can play a huge part in whether an individual signs on the dotted line. Witheridge explains: “As the deal values become bigger, you have to involve more people and to get everyone on-side, you need to be circling around the environment in which you’re selling.” This is something echoed by Steve Lowy, CEO of umi Digital and umi Hotels. “The majority of people, when they’re buying a service or even a product where there’s an element of service related to it, want to feel comfortable with the person selling it,” he comments. Relating an example where umi Hotels was looking at expanding in India, Lowy explains that, whilst he had a contact on the ground, he struggled to build up a relationship with a specific client via videoconferencing tools. “I was finding it really difficult,” he says. “I trust them and I don’t think they’re fraudulent people but I didn’t have that personal connection.” However, whilst it may sound like an exercise in stating the obvious, taking a trip away can be a costly business, both in terms of the time involvement and the literal costs entailed. Lowy feels it’s often a case of doing some simple cost-benefit analysis. “I’d have to work out what my costs would be from the hotel, from the taxi, from everything,” he explains. “Say it was £3,000 or £4,000, then I’d ask ‘how many websites do I need to sell?’ or ‘would I get a new hotel contract and how much would that be worth?’” Lowy gives an example of a UKTI-backed trip he took to the Caribbean – approached at the last minute, he was offered everything
inclusive for a week at £500. “They guaranteed me three meetings a day with people I’d never usually meet,” he says. The prospect of meeting clients like the Hotel Association of Trinidad and the Ministry of Tourism was more than worth the ticket price. “We ended up getting one client and then we’ve got two or three still bubbling away; the one client paid for the trip but the others, if they come off, mean it will have been very profitable.” But financial factors are far from the only consideration. For a CEO or managing director to ascertain whether they should be taking half the week out for a trip, it’s important to understand who prospective clients might be expecting to meet. “If Prince William, for example, was visiting Newcastle, he would expect to meet the mayor; he wouldn’t expect to meet the mayor’s assistant,” says Witheridge. Often a CIO isn’t going to be just be content with a pitch from another CIO; instead they’ll want the assurance that only a CEO can provide. So in this situation, a chief exec’s presence will be required to give a potential client confidence that they are engaged and involved with the process and will be accessible
“I’d have to work out what my costs would be from the hotel, from the taxi, from everything” Steve Lowy, umi Digital and umi Hotels
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“You need to know your own value and, with you being out of the office, what you are missing and what you are gaining” Steve Lowy, umi Digital and umi Hotels
in the future if required. Whilst they might not be needed to close a deal, showing it has their attention and seal of approval can add more value than a hundred sales talks. “The reality of it is, my job is not sales,” Witheridge comments. “My job is promoting Grove to the wider world and continuing that momentum.” Another factor that can add impetus to the need for a business trip is the culture of the region or country in which a client is operating. “In the UK, people do business without meeting,” says Witheridge. “But in South Africa, there’s still a massive meeting culture.” Getting this wrong can mean the death of a potential deal so if it’s of significant value then it really is worth an entrepreneur making sure they’re aware of the cultural expectations involved. Deciding whether to go, however, shouldn’t be a business owner’s only concern. Ensuring
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you get real value out of a trip is dependent on making the most of your time. “A lot of the events we go to are B2B travel events, so they often have appointment scheduling,” Lowy comments. “The minute that’s available, I go on, I fill out our profile, I get as many meetings as possible.” Whilst he concedes a business owner may be more driven than an employee to fill their schedule wall-to-wall, he feels it’s important to maximise the way you are using your time as a way of guaranteeing a return on your investment. “You need to know your own value and, with you being out of the office, what you are missing and gaining.” In terms of the role one plays, it can often depend on the individual’s position in the company and the stage of the sales cycle which they are at. Often Witheridge feels, when closing a deal, it’s important to make sure you have the right people on hand. To this end, he will make sure he has a technical and sales expert on hand. “I set the scene and the sales guy will say where the product is relevant for the customer,” he explains. “Then the technical person will say ‘Where’s the business problems? Where are the technical challenges? How are we going to integrate it with your backend systems?’” Whilst a hardcore sales situation may not necessarily be what everyone thinks of when discussing jetting off to warmer climes, it’s important to recognise that this really should be the end game you have in mind. “There’s potential to actually seal a deal at that meeting,” says Lowy. And this will ultimately be the business case for any trip you take. “If, for example, you look at your P&L, share it with your staff and they’re like ‘Why did you go away on a jolly?’, you can say ‘Because I came back with £10,000 of business.’” As Lowy explains, it can be tempting to view a business trip as a glamourous chance to get some sun, sea and champagne but as with any element of your enterprise, it’s important to think of the balance between the investment made and the returns it can offer.
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Talking the talk
Brands are often lauded for their visual impact, but the way they speak to consumers is an equally important component of their make-up
WORDS: ADAM PESCOD
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nce upon a time, the word ‘branding’ almost went hand-inhand with the concept of ‘brand identity’. A company may not have been able to get by with just having a quirky and attractive logo, but there was definitely an extent to which it could harness the power of visual to its advantage. However, whilst we are still having our eyes treated to some even more beautiful brand designs nowadays, the technology that has made this possible has been accompanied by a revolution in the way that consumers engage with UK plc. Indeed, the very nature of social media dictates that brands will no longer get away with hiding inside their corporate shell. They need to have their own personality, their own language and their own ‘tone of voice’, which can be expressed consistently across every communication platform. “The number of brands competing for people’s eyeballs or attention is huge so it is massively important that brands try and develop a personality early on,” says Peter Briffett, managing director of daily deal site LivingSocial UK & Ireland. “Certainly for small businesses, the majority of their early customer base will be early adopters; people who do respond to new and unique voices and personalities.” In order to pinpoint a personality that befits your offering, it is first necessary to reflect on your very reason for being. “One of the things that we say is ‘know your why’ and use it,” says Rachelle Thompson, community strategist at digital agency TH_NK. “Why do you exist as a brand in the first place? What is the kind of relationship you wish to have with your customers? By defining that, you shouldn’t have any issues finding your tone of voice because you have this reference point where you can ask ‘is that us?’, ‘is that really who we are?’, ‘is that the way we would speak?’” Essentially then, it boils down to treating your brand as a person in its own right. Thompson adds: “If you have this visualisation of what kind of person you are as a brand, then you can begin to get very clear about what words you would and wouldn’t use, what way you would respond, when you would respond and really start to define that type of person and how they would interact.”
“If you have this visualisation of what kind of person you are as a brand, then you can be clear about what words you would and wouldn’t use”
community strategist, TH_NK
managing director, LivingSocial UK & Ireland
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“If you understand who your audience is and you can communicate in their language, you have got the best chance of getting their attention” Peter Biffet,
LivingSocial UK & Ireland
Nevertheless, once the persona and language of one’s brand has been established, the challenge lies in delivering this across the board. If a tone of voice isn’t consistent at every possible touchpoint, the less convincing and believable it becomes. “When creating tone of voice, the challenge for lots of people now is to understand how they can sound the same on one press advert versus 140 characters in a tweet or the whole copy on a website,” comments Thompson. “But it is not just that; it is also ‘how do I sound if people encounter me in all these spaces at different times of day and with different needs?’” Undoubtedly, the product or service behind a brand can sometimes make a persona-building exercise a little easier. Juice drinks and veg pots brand Innocent is a classic example here, with its playful branding lending itself to an equally playful and amusing tone of voice. “Their brand personality shines off all their cartons of juice and is absolutely at the forefront of the marketing effort,” says Briffett. “Whether it is a formal press release or a social media campaign, it is very consistent, and therefore they get customer engagement.” As a result, Innocent manages to appear less of a corporate entity and more a social being who consumers can relate to and engage with at their pleasure. This isn’t as simple for companies operating in sectors that lend themselves to a more regimented approach, such as financial services, insurance and mechanical engineering. However, it shouldn’t be overlooked that consumers in these markets may differ from the demographic being targeted by the likes of Innocent. The tone of voice adapted should still chime with the message the respective firm is trying to get across and the expectations of the people they are meant to serve. “If you are in insurance,
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quite often one of the fundamentals of insurance is trust so creating a trusting voice is important,” suggests Thompson. “You are not always going to want to invite the cool hip teenager. Occasionally, you will actually want to have that formalised voice for the appropriate conversation.” Yet, a step away from one’s comfort zone can still pay significant dividends, if the circumstances dictate it. Thompson uses telecommunications giant O2’s response to a consumer backlash over service problems last year as a prime example. By offering personalised and tongue-in-cheek responses to angry tweeters – as opposed to a stock company response – O2 was able to deflect criticism and turn the tide in its favour, surprising and impressing many in the process. This approach has been taken forward as demonstrated by O2’s current ‘Be More Dog’ campaign and headline grabbing Twitter rap battles with rival Tesco Mobile. “They got cheeky, they got playful and they began to entertain people,” Thompson comments. “You would never have expected it but the licence was open for them to do so
because it was considered and it was in response to a situation.” In this sense then, there are times when a brand can alter its tone of voice, but it must be done for the right reasons. However, for any brand with global ambition, Thompson is adamant that the focus should initially be on customers in the appropriate region. “One of the things that we always encourage is to put local content in such a way that when it is encountered globally it will still make sense,” she says. “If you haven’t secured what is going in your market, who your competitors are, what they are doing and what makes you different, your tone of voice will not speak to people in a different way because you haven’t defined yourself in a market.” Like all brand considerations, settling on an appropriate tone of voice merits a sizeable investment of time and patience. Ultimately though, having knowledge of both yourself and your customer is key. “The major thing is to be relevant,” concludes Briffet. “If you understand who your audience is and you can communicate in their language, you have got the best chance of getting their attention.”
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Recently, real-time bidding has begun to reach critical mass, with many proclaiming it the future of display advertising. But something steelier and even more efficient is already forming on the horizon
isplay advertising has come a long way since the dark days of pop-ups and poorly served banner ads. Big data has not only arrived but made itself at home, as advertising has become increasingly focused on a granular picture. Tools like Google’s AdSense have already enabled small- and medium-sized enterprises (SMEs) to target display ads to the right audience. Real-time bidding (RTB) has evolved to offer greater efficiencies and control over a company’s media buy. But that doesn’t mean that there aren’t even greater developments in the offing. At one time display advertising was the uncontested domain of the ad networks. “They would work together with lots of web publishers and aggregate that media,” explains Raoul Witherall, CEO of IO Technologies,
Rise of the
WORDS: JOSH RUSSELL
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producers of learning-based real-time media buying platform IO. These ad networks helped provide some much-needed buying scale and could offer a consistent and less fiddly way to serve ads to the consumer. However, initially, buying in bulk through a network also made granular targeting more difficult and took place in anything but real time. Witherall continues: “It’d be booked months in advance, in the same way that print publishing or TV is done.” And perhaps, had our browsing habits not changed, this would have been less of a concern. But the introduction of Web 2.0 and much more sophisticated platforms meant getting the right ad in front of the right demographic wasn’t quite as straightforward. “Suddenly there was a super-abundance of media and from an advertiser’s point of view it becomes much harder,” says Witherall. “How do you find the person who wants to see your ad when there’s 50 times more media available than when it was on a simple website?” This fuelled a drive for greater efficiency in the buying process and – rather than buying media and hoping your brand was a match for every one of a site’s users – the focus began to shift toward buying impressions, based on the information available on the individual user. “In about 2010, the world changed with the introduction of the first real scaleable ad exchanges,” Witherall comments. “These allow you to buy ad impressions and – here’s the cool bit – you buy them one at a time and you do that by participating in an auction that happens as a website loads.” This was the birth of real-time bidding. When a user clicks a link and a page begins to load, auctions are initiated. Based upon the demographic and data available, advertisers’ technologies will assess how valuable the opportunity is and bid a dynamic price. The highest bidder will secure the space and the ad is automatically served to the user. Whilst it sounds like a fairly drawn out process, the entire exchange will take place in under 0.5 seconds – the user is left entirely unaware of the frantic bidding war they have sparked when loading that page. Real-time bidding is unarguably a smart process, allowing advertisers to monitor and tweak the spaces they are buying as ads are served. However, this doesn’t mean the process is entirely without flaws. “The technology brought to decision making, to evaluating which ad to bid on, is still quite crude,” explains Witherall. Especially in this big data age, analytics can take some deciphering and are subject to interpretation; moreover the freshness of purchasing intention, the risk of brand damage associated with certain spaces, the provenance of data, all muddy the water to an extent that mere humans might not be especially well placed to make the most informed decision. Witherall continues: “That led the way toward what’s going on now, which is people are looking at machine learning and artificial intelligence to make the absolute optimal predicted decisions on which to buy in real time.”
“There’s going to come a point where no human planning buying team at any ad agency or any human controlled technology will be able to keep up with machine Raoul Witherall, learning” IO Technologies
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And it seems inevitable this is the next stage in the evolution of online advertising. As we’re dealing with an increasingly labyrinthine data picture, it has become essential to begin relying on our tools to interpret and learn from the market. Currently hundreds of millions of ad opportunities are whipping past every day, each being resolved within a tenth of a second and relying on assessment and observation to know whether it’s the right choice to make. “We’re doing that up to tens of thousands of times every second,” Witherall says. Which is why bidding driven by machine learning is becoming increasingly important. Figures referenced by Witherall place the monthly display advertising spend in the UK at around £100m, the vast majority of which is planned and steered by human decisions. But the sheer quantity of data to consider means the time where we are required to surrender the reins on our media buy may be drawing ever closer. As Witherall explains, “There’s going to come a point where no human planning buying team at any ad agency or any human controlled technology will be able to keep up with machine learning.” There are also subtler benefits to accepting a hand-up from our silicon siblings, particularly for SMEs who may be looking to cut any extraneous spend. Rather than requiring enterprises to hire agencies to manage their data-driven advertising, Witherall firmly believes tools driven by machine learning will help to put control back into the company’s hands. “What’s going to happen is technology is going to disintermediate any interim step,” he says. “All the information flows through to you; there’s no intermediary who needs to figure it all out for you.” Sometimes the world of real-time bidding can appear off-putting to newcomers, particularly as there is little support for the amateur who wants to handle ad decisions in-house. Fortunately, it seems technology that can learn from the data at its disposal is perfectly placed to help interpret the available information and suggest powerful purchasing decisions. “Our assertion is this: in the future, all digital advertising will be powered by learning,” concludes Witherall. “Data is the proper domain of machines.”
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Rather than being a drain on the national coffers, immigration is actually essential to maintain diversity of talent in the workforce and grow the economy
“Migrants from EU member states really perform higherskilled work” Colin Edwards, Cebr
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WORDS: JOSH RUSSELL
here are few more subjects quite so incendiary in the current climate than immigration. It has gradually crept up the government’s agenda in reaction to growing pressure from right-wingers, and to begin with public opposition in the business world was relatively muted. But a gathering resistance amongst the business community has been keen to emphasise how vital migration has become for the UK economy, with entrepreneurs like former Elite Business cover star Lord Billimoria going on record about how important transit is for UK plc. With so much heat and passion on either side of the debate, it’s often hard to form an empirical picture of how immigration stands to effect UK enterprise in the coming years. For this reason, we decided to speak to the
Centre of Economic and Business Research (Cebr) to discuss some of the figures in its recent report Impact of EU Labour on the UK. First of all, it is useful to draw a distinction between pre-existing EU states and newer so-called accession countries. “Migrants from EU member states really perform higherskilled work,” says Colin Edwards, senior economist at Cebr. “You’ll find them in sectors like financial services.” Conversely, migrants from accession states are more likely to end up in different sorts of roles, including hospitality, construction and manufacturing. Since the block on migration from accession states was lifted in 2005, there has been a significant increase in the influx of migrants to the UK. Despite this, there are still plenty of things the two groups of migrants have in common.
“In both sets of circumstances and both groups of people, they’re more likely to be employed than the average UK citizen; they’re productive members of society,” comments Edwards. Migrants from these areas tend to be more of a working age than the general population, in part because they are moving here for the specific motivation of earning money and improving their lot. This also means that the proportion of migrants who are in work is far higher than that of native Britons – 63.3% compared to 56.2%. “They arrive young and in their prime, as it were, and eager for work. We essentially catch them right in the sweet spot of their working lives.” Based on this information and ONS population projections, Cebr ran several different scenarios based on the way changes to immigration stand to affect British GDP. The first, dubbed the ‘central scenario’, would see long-term migration of 140,000 individuals each year and a rise of 7.9% in the working population by 2050. The ‘EU exit-scenario’ would see an annual migration of just 100,000, a decline in the size of the working population of 1.9% and our GDP shrinking 2% by 2050. Lastly, if the UK implemented a policy of zero net migration, we would lose 6.7% of our GDP by the same year, totalling a real world loss of £204bn. It goes without saying that the effect of this on enterprise would be absolutely crippling. So why is our economic future so dependent on continued migration? In part, it’s down to a necessity brought about by our growing aged population, in which enlarging the size of the working population could go some way to offsetting the huge social cost of supporting the older generation. “There is a structural shift that needs to take place in the way the UK funds its ageing population,” Edwards explains. “In a sense this issue of immigration is not the whole solution but it certainly helps to alleviate what is a serious issue facing the UK.” A second reason is that cultural migration is essential to keep bringing innovation and talent into the country. “Estonia, for example, is quite an interesting example with computer programming skills,” says Edwards. Given a lot of our economic eggs are currently being kept
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“It just comes down to finding the best person and employing them. It shouldn’t really matter where they’re from” Colin Edwards, Cebr
in the London tech basket, access to the best talent on offer is absolutely invaluable. “At the end of the day, the more diverse the range of skills and the more diverse cultural views and ways of doing things, that has to be beneficial to the way any business operates.” However, this, on its own, probably isn’t enough to assuage the fears of more hardened opponents of immigration. An oft-cited objection to an increase in the size of the working population is that the UK doesn’t have enough jobs to support an influx of workers but, of course, this is a fallacy. “There isn’t a limit of the number of jobs that the UK can create,” explains Edwards. “When people do move to the UK and work, they also spend money in the UK and that has a ripple effect throughout the economy, generating more jobs.” Another common concern is that migrant workers prepared to work for lower wages might drive down the average wage and leave UK natives with less cash in their pockets. However this isn’t borne out by the evidence. First of all, the national minimum wage provides a firm floor for all UK workers, regardless of nationality. “It’s also important to recognise that many people who come from countries like France, Germany and Italy, actually earn more than the average UK salary, because they find themselves in potentially more senior positions and more skilled roles,” Edwards comments. However, he’s keen to stress that migrant workers make up a very small section of society –just 5.5% – meaning this net benefit is still comparatively minor. “We’re still talking about a relatively small proportion of the total labour force so their impact is always going to be limited.” All told, immigration can actually provide some real economic benefits but how does this to stand to affect SMEs directly? Should they be looking to maximise the benefit they might be receiving from the migration of talent? Put simply: no. “If businesses are able to get involved in increasing the skill sets of UK citizens that’s a brilliant thing to do to,” Edwards comments. “But it just really comes down to finding the best person and employing them. It shouldn’t really matter where they’re from.”
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WORDS: JOSH RUSSELL
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Just a number I
t’s something we’ve all heard many times before: ‘age is just a number’. However, sometimes, in the world of entrepreneurialism, it can feel like things are stacked against you if that number doesn’t fall in the right checkbox. With increasing attention paid to the young guns of enterprise, sometimes start-ups can feel like a young person’s game, but in fact there’s a huge wealth of evidence that you can launch a winning business, regardless of your age. For Paul Spiers, founder of ethical surf brand Wave Native, the motivation to finally pursue his business came at 40, when his children reached the age he wanted to get them engaged and interested in the surfing community. Rather than being an arbitrary need to start a business by a certain age, he felt it was the natural time to explore an idea he’d had for a long time. “You just want to try something else, have some fun and do it for the family,” he explains. “And to have no regrets, to not look back.” But forming the decision to start one’s own enterprise may not be always as clear cut as that. An oft-cited reason why it may be easier to launch a business in your youth is that there are commitments that may be jeopardised if you fail. “Having money gives you a comfort blanket,” says Lenka Gourdie, co-founder of designer handbag outlet BagServant.co.uk and fashion digital marketing service SalesServant. co.uk. “You have a certain income and you are accustomed to certain things.” This can mean that there can be a restance at certain stages of life to laying everything on the line. However, inevitably specific stages of life come with varying degrees of risk aversion. When Jane Whitham and Elizabeth Hudson committed to starting up PR agency Cream Consultancy, they were aged 39 and 29 respectively, meaning that, inevitably, the
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Sometimes entrepreneurialism can be seen as a young person’s game. But, in reality, whatever age you’re at, there’s never been a better time to start a business
levels of personal risk each was exposing themselves to varied hugely. Whilst Whitham was moving from a rather stable position, sacrificing a well-paying position and a mortgage on a nice house, Hudson didn’t have as secure a base to launch from. This actually meant she wasn’t gambling her security on the new venture, something her partner definitely was. “I was in quite a flexible position,” she explains. “Whereas I think Jane had more to lose, in a way.” It would be easy to make assumptions about age and risk aversion though and it’s important to remember that in reality this often doesn’t bear out in real life. Spiers feels it’s important to consider that these things can also provide a strong driver to create more of a future for yourself and those whom depend on you. “That’s certainly what drives me and I’m sure it’s what drives a lot of older entrepreneurs, that desire to create something better for more than just yourself.” The age of an entrepreneur has a bearing on more than just their willingness to take the plunge. A huge part of launching a successful enterprise involves clearly identifying one’s target demographic and being able to show that you can loyally represent their needs. The online shopping and fashion outlet for older women SoSensational is far from the norm in the fashion industry; its aims to challenge assumptions about mature women and the styles they can adopt mean it courts a demographic that rejects lazy stereotypes. The fact its founders Cyndy Lessing and Jan Shure were both in their 60s when they started the enterprise and yet were much more than just token examples of fashionable grown-up women means they clearly understood the perspectives of their market. “I hate to say ‘we represent the demographic’ because it sounds presumptuous,” Shure comments. “But we do understand the demographic.” Whilst the stereotype for areas like fashion and PR is that they are dominated by youth, the entrepreneurs know they speak for a huge demographic who aren’t encapsulated by sweeping generalisations. “We know that’s not the reality,” Shure continues. “There are women all over business and the media who are in their 60s who have been on the cutting edge of social change and feminism; they’re not going to just put their feet up with a cup of cocoa.” But the idea that entrepreneurs should be aiming to pitch only to their own demographic is fallacious in the extreme. Wave Native’s surfer market is one typically associated with youth and yet Spiers has found that what matters more is a degree of brand sincerity. “People just want to know it’s real, that you’re authentic, that you believe in it and it’s not a big faceless brand,” he explains. “If it’s something with a story to tell from someone who believes what they’re doing, then age becomes far
less relevant I think.” Particularly in areas that move quickly, it would be easy to think it’s easier to remain in your comfort zone. Tech and app development are so often associated with 30-somethings in Silicon Roundabout that hearing a 58-year-old is successfully taking on the teenage market definitely makes a striking story. With his app Shuttersong, enabling people to marry their photographs with audio recording and music, William Agush knew he had something that could capture the imagination of a young demographic. He explains: “This came from watching my son and his friends grow up and knowing that music can be such an integral part of teenagers’ lives.” Trying to put yourself into the shoes of someone 40 years your junior may seem like a daunting task but actually Agush found this relatively easy to transcend. “Whenever I look at one of, say, the young people that were in our beta test, I just try and pretend I’m them,” he says. “‘Why do they take pictures? What would sound add to the equation? Why would they want to do this?’”
“There are definitely investors who can’t quite get past the age thing” William Agush, Shuttersong
Elizabeth Hudson and Jane Whitham, co-founders, Cream
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And, in part, this ability to think beyond the boundaries of demographic has helped the app reach much wider audiences. Agush comments: “One of our biggest users is in his 80s, so it was a lot of fun to come up with something that was just as inspiring for a 14-year-old as an 80-year-old.” The ability to relate to one’s audience is undeniably important but can the age of an entrepreneur affect how seriously the wider market is willing to take an enterprise? Since starting BagServant and SalesServant, Gourdie has met plenty of younger people with a great deal of passion and drive. “One of them is really determined and she’s 24,” she recalls. “She wants to work with others and help them to grow.” However, she does acknowledge young people like this might face an uphill struggle for credibility. She continues: “In some situations you also have to work harder for people to believe you actually have the expertise.” However, there is a flip-side to this, particularly within certain sectors. “There are definitely investors who can’t quite get past the age thing,” comments Agush. But whilst it might be tempting to go in all guns blazing and explain why you can relate to your audience, he found a route that more effectively proved it wasn’t a factor. “Ultimately, I was just able to get past the whole subject of age by never even mentioning it,” he says. “What I did do is focused on all the years of operating experience, all the experience in figuring out what markets to enter, all the failures.” In actuality though, what might be perceived in some circles as a disadvantage can actually be the key string to an enterprise’s bow. “Our age gives us a slight novelty value in this industry,” Shure says. For an enterprise that has so strongly relied on disrupting standard expectations of more mature women, having such a remarkable pair of entrepreneurs to head the organisation has actual given them their key differentiating factor. “There is an expectation of who is coming up in this industry and we are very much outside that norm,” she comments. “They look at us and think, ‘wow, that’s different, that’s new’ and that has worked in our favour. Because we don’t conform to the stereotype, we’re able to transcend expectations.” Ultimately though, for any enterprise looking to ensure it isn’t simply defined or reduced to the age of its entrepreneurs, the key step is to ensure you make the most of the life experiences of all of your staff and guarantee you have a healthy mix throughout the organisation. Given Cream Consultancy was founded by two individuals at different stages of life, inevitably they have found this breadth of perspective to be one of their most vital assets. “We’ve got an apprentice who’s 17 and the speed at which she can do things and what she’s aware of is phenomenal,” comments Hudson. “But at the other end, Jane knows a lot more about other things and has more experience in lots of other ways.” Evidently, age shouldn’t be a barrier to any entrepreneur looking to set up. However, used appropriately, one’s experiences, regardless of age, should be more than enough to secure the success of an enterprise.
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Martin Reed Reed has been at the helm of psychometric testing company Thomas International since 2007, having been appointed chairman two years earlier. As well as penning this regular column for Elite Business, he is also a founding member of Buckingham Business First and a fellow of the Institute of Directors.
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The arrival of a fresh recruit is a daunting prospect for both the individual concerned and the team they are joining. The integration process should therefore take the needs of all parties into account, says Martin Reed
ccording to government statistics, the economy is on the up and confidence is improving. Another positive sign is the fact that the rate of unemployment has dropped to 7.7%, down from 7.8% the previous quarter, which means that more companies are hiring and the jobs market is becoming stronger. Although the outlook is positive with companies taking on new members of staff, recruitment can present its own challenges, not just in finding the right person, but in welcoming new members to the team and helping existing team members deal with internal changes and adapt to changing team dynamics. So, the interview process is over, you’ve decided that you’ve found the right person for your role and they’ve decided your company is right for them. What now? As I’m sure we all remember, starting a new job can be nervewracking. You’re faced with new responsibilities, new colleagues and a new boss, not to mention a different working environment. It’s essential for the new employee to be made to feel as welcome as possible and the process of engaging with your new starter can start even before their first day. Apart from the job offer letter, which should express your personal welcome, it’s worth considering inviting them on a team event or lunch. Inviting a fresh recruit along to meet their new colleagues in an informal environment is a good way to start their integration into your team.
“It’s essential for the new employee to be made to feel as welcome as possible”
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“Regular one-to-one meetings and open communication will help you learn how to ensure they perform to their potential”
As the CEO of Thomas International, I also make a point of calling new starters personally to welcome them to the company. Every employee is an essential part of the team and it’s important for them to see that we recognise this from their very first day. A planned induction schedule will help you demonstrate to new employees that they are a valued member of staff. Implementing an effective induction will help them feel comfortable within the organisation more quickly and making time for them to spend with other members of the team will allow them to engage with their new colleagues and get to know them better. Helping the existing team adapt to new colleagues is also part of this process. Whether your new starter is replacing a team member who is leaving or filling a newly created role within the company, a new staff member will often change the dynamics within the workplace. Helping your employees adjust can go a long way to maintaining team morale and performance as well as ensuring your new starter feels comfortable in their role. When a new member joins your team, it’s essential to understand how they work best and how they prefer to be managed in order to get the best from them. In the long term, regular one-to-one meetings and open
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communication will help you learn how to ensure they perform to their potential but in the short term, one of the fastest and most accurate ways to understand their preferred way of working and communication style is psychometric assessment. Many of the same techniques I’ve already covered can help your team to adapt and feel comfortable with changes taking place. For example, seeing a planned itinerary will help existing team members feel included in the induction process and understand their responsibilities in terms of helping the newest employee understand the company and/or team structure. Likewise, allowing existing employees time to get to know their new colleague will support the formation of strong working relationships and a positive team atmosphere. It is also important that each member of staff is clear on what their roles and responsibilities are and what those of their colleagues are. When a new member of staff starts in a newly created role, ensuring that everyone is clear on the team structure will help to avoid confusion later. Primarily, it is the manager’s job to ensure staff relationships are harmonious and that there is a positive working relationship. It is accepted that good managers will take time out to speak to their team members individually to discuss any issues they may have and during a period of change, but it’s even more important that these lines of communication remain open. All these strategies will help to encourage team cohesion and good working relationships between existing employees and newcomers, which not only helps them, but also your business as a whole. The happier and more comfortable the environment, the more productive and committed to the company your staff will be. The first few months in a role can really set the pace for the future, so making your new employees feel as welcomed and supported as possible in their first few weeks at work can have long-lasting effects.
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Galaxy Note 3 A former heavyweight, coming as it does with a positively Herculean 151x79mm 386ppi screen, the newest Galaxy Note has nonetheless dropped a weight class since its last appearance, coming back thinner and lighter. Its main weapon is still its S Pen, and it’s packaged with some additional functionality this time round. This is backed up by a great battery and the fact it’s only the second device to come with Android 4.3 Jelly Bean. A solidly built, no nonsense device that certainly won’t be pulling any punches on the market.
WORDS: JOSH RUSSELL
Unsurprisingly, the iPhone 5s is more of a featherweight entrant with a focus on style and agility. However, whilst still only packing a 326ppi display, it can certainly throw a heck of a punch, coming as it does with the new Apple A7 chip that promises twice as much power as its predecessor. But it’s defence is where this old stalwart comes into its own; its new fingerprint recognition may just be enough to see off the competition and ensure the iPhone retains the belt for some time yet.
We have a bit of a showdown this month. With our focus on wearable tech last month, we missed out on the release of iOS 7, the iPhone 5c and, most importantly, the iPhone 5s – a phone we couldn’t afford to overlook. However, whilst the newest and hottest Apple product to hit the market sat waiting for the bell, a new contender snuck into the ring. Which is why, this month, the Galaxy Note 3 and the iPhone 5s are touching gloves, waiting to see which will be declared winner. Let’s get ready to rumble...
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Stir Kinetic Desk One unfortunate barrier to getting active at your workstation is the relative inactivity of your desk. Either you slump at a low desk all day or you get a high workspace and stand until your legs turn to petrified stumps. Gladly, Stir have provided an alternative with their kinetic desk, allowing you to vary the height of your desk throughout the day to best suit your posture and energy levels. The desk even learns from your patterns, knowing when to vary things up and when to leave you be. Staying active has never been so effortless.
Macaw Generally, as far as the last 20 years of web design have been concerned, you either code or you get out of the garage; WYSIWYG editors are seen to output ineffective, messy code that simply creates more problems than it solves. Which is why Macaw is set to ruffle some feathers; its promise to output clean, functional code combined with a truly beautiful UI and simplistic approach has already got many a jaw wagging. Could we be seeing the tool that finally closes the rift between designers and programmers? Only time will tell.
Origami wood lamp series A Kickstarter veteran, the first batch of Aesthetic Design’s Origami Wood Lamps should have begun shipping in October 2013 and boy do they look beautiful. Made from a special veneer, the two designs for the Origami Wood lamps, the ‘arrow’ and the ‘loop’, are the product of extensive prototyping – as well as, we imagine, no small quantity of screwed up paper. The end result is a pair of lamps imbued with the effortless grace of their inspiration, stark and geometric yet possessing a wonderful minimalism.
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Business apps are a huge part of our daily lives and yet when it comes to mobile devices, they simply aren’t getting their day in the sun
Serious applications 71
WORDS: JOSH RUSSELL
nterprises rely on a myriad of business applications to carry out – that were receiving little attention when they their daily tasks. Far from the dark days of having a one-size-fitscame to mobile, despite the increased all Office package, we now have a whole host of tools to play with. flexibility that the medium could bring. He And whilst these aren’t necessarily confined to the humble desktop, with gives an example: “The mobile version of many mobile equivalents cropping up left, right and centre, some feel BaseCamp, a tool that I used at many places dedicated mobile apps for business are yet to achieve the recognition before, just wasn’t mentioned anywhere.” they deserve. That’s not to say that the uptake of tools like Energy recruitment specialist Spencer Ogden first noticed the issue BaseCamp and DropBox hasn’t been when reviewing its marketing stats for 2012. An upturn in the number phenomenal; they have become integral parts of candidates accessing its site from mobile devices, as well as express of many a team’s workflow. However Quirke feedback from existing clients, led the firm to review feels that in terms of their “Some companies its existing channels. Considering whether a mobilevisibility on the market, optimised site or an app would be best for its purposes, still don’t see their business apps can get it became clear that a business app could provide something of a raw deal when business apps as a compared to their more advantages for clients that a mere mobile-optimised site couldn’t. confident consumer brethren. genuine platform “One thing that really attracted us to doing it was the “You just tend to see the games, idea of push notifications and the ease of use,” explains with which they can the little pick up and play Rob Quirke, the firm’s marketing manager. The ability your little novelty apps, engage an audience things, to create a customer experience that really made use of Instagram, all that kind of the secure and integrated nature of apps on thing,” he says. “Some or a customer” smartphones and tablets essentially meant there was companies still don’t see their Rob Quirke, Spencer no contest when helping people find work who might business apps as a genuine Ogden be spending weeks out on an offshore rig or windfarm. platform with which they can “We track it at four clicks of a button to apply for a job, from actually engage an audience or a customer.” opening the app, selecting your job, clicking apply to choosing ‘apply Part of this is down to the motivations a with LinkedIn’ – the user journey is just second to none.” company might have for launching an app. “I But it was when the company came to market the app that it was met do actually believe a lot of companies that by something of a surprise. Conducting detailed analysis of its try to create similar apps or in different areas competitors and the wider market, it seemed something was amiss. “It of the business world do so as a knee-jerk was just unbelievable just how little coverage these great business apps reaction,” Quirke says. Often a business were getting,” Quirke recalls. There were plenty of key business tools will create an app because of market pressures; – the desktop- or web-based versions of which were big name products they’re aware that mobile users are becoming
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“A lot of companies are pushing out an app because they think they should do to keep on trend” Rob Quirke, Spencer Ogden
an increasingly important segment of the market and so they feel they need to have a version of their software or site to capture the mobile market, without necessarily considering what benefits it will confer to a user. Quirke continues: “A lot of companies are pushing out an app because they think they should do to keep on trend but don’t really have a real purpose for doing so.” He feels that to be considered a valuable product and stand on its own two feet, a business app has to offer something unique and that actually offers an improved user experience. “What companies need is to have a reason for creating this app, to understand their target audience and what they want from an app, to create that app for them and then to keep developing it,” Quirke says. He’s quick to emphasise that this isn’t just about bug fixes or optimising for the latest OS; instead it’s about committing to improving it based on customers’ needs. “You have to listen to your audience and understand what changes need to be made.” But there are deeper issues behind the low visibility of mobile apps for business. One of the first stumbling blocks is around the way business often views the modern smartphone. “A handset is seen as more of an entertainment system, people may not take apps too seriously,” comments Quirke. “It has a stigma so they think ‘that’s not going to help my business life that much’.” Another contributing factor is the fact that true mobile working, whilst a much-discussed topic in modern business circles, is still something of a rarity. Although many enterprises might like to consider themselves
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modern and forward-thinking, Quirke feels this can often be more of a surface consideration, rather than a considered and integrated part of their long-term strategy. “Business devices are often still very static; they’re not particularly mobile,” he says. “They’re being used almost as a cool replacement for a desktop PC or as a laptop, going down to a meeting room and taking notes on your tablet, instead of taking notes using a laptop or a pen and paper. Using tablets and phones as a genuine mobile devices with genuine mobile applications, that just hasn’t happened yet.” But, of course, this only holds true in the business arena. As individuals, to say we’re wedded to our devices is something of an understatement and, as Quirke has pointed out, curiosity about new solutions and apps in the consumer space has never been higher. So why hasn’t this spread into industry? In part, Quirke believes this is down to a disconnect between the devices we’re using at work and the devices that have become such an integral part of our lives. By way of example, he mentions the fact that there are still many professionals with a separate business and personal device. “Their business phone will very much be a communications device, whereas their personal phone will be that phone that all their apps and music go on,” he explains. Inevitably, this discourages people from making use of the more mobile functionality of business apps because there is still a separation between use inside and outside the workplace, reducing the need for fluid connectivity and true mobility. Ultimately, this is something that will begin to change with increasing uptake of bring your own device (BYOD) policies and focus truly begins to shift toward having the right tools wherever you go. As Quirke concludes: “That’s when I think it will really start coming together.”
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Reaching the top A Suit That Fits’ unique offering gave it an SEO advantage from the very beginning, says David Hathiramani
What is SEO?
Whenever you search for something using a search engine (like Google or Bing) online, the most relevant site will come up top. Search engine optimisation (SEO) is a marketing technique that can be used to affect how visible a website is when people are looking on a search engine; the higher in the search rankings something appears, the more likely that people will click on that link. Search engines will look at which sites they think are most relevant for the words people are searching for, and use clever algorithms to rank them in order of relevance. If the content on your site is really relevant to the thing that people are searching for, then your site will naturally come out top.
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y background in IT is central to the story of how A Suit That Fits was established and has managed to get to where it is now. I always loved the idea of creating easy-to-use systems –in fact, this is what I was primarily doing in my previous role as an IT manager. The first thought that Warren and I both had was that a system that let you choose your fabric, lining, jacket front, buttons – and all other the attributes in a suit – would be really cool. We hadn’t seen this flexibility anywhere else online and wanted to use it for ourselves. Needless to say, it didn’t take long for us to hatch a plan to do just that. In the space of the 24 hours after deciding to ‘give it a go’, we built a basic interface that enabled you to go through the process of designing a suit online. Even though this system looked very basic, it provided something to the world that was not out there before. It also inadvertently described the advantage of different styles of jacket front, different styles of a lapel and lots more. Looking back, I realise that this was great content. It was content that would answer customer’s questions on the topics that we were experts on. We also answered the question “is getting something tailored a privilege for the super-rich?” with an emphatic “no!”. The simple result of this was that other websites linked to us as the resource for the answers to these sorts of questions. These ‘inbound links’, as everyone is now aware, are one of the factors Google uses to weight the
David Hathiramani He may be co-founder of trendy suit retailer A Suit That Fits, but Hathiramani is also something of a closet geek. And the Imperial College computing graduate is here to impart some of his wisdom about setting up an internet business.
importance of websites and website pages. However, it does get a little bit more complicated than that. Innovative businesses started realising that they could change or manipulate search engine results by providing search engine optimisation (SEO) services. There are companies who do this well by actually correcting the simple problems on your website which aren’t helping to show off what you do as well as you could be. However, there were also SEO businesses out there that did seedy things such as use websites to link to your website ‘unnaturally’. This kind of manipulation made it seem to Google that these websites were important when they weren’t. Google didn’t stand still and, like all good businesses, it adapted to the changing world and updated its algorithms accordingly. Naturally, websites that used services of these businesses now have a lot of catching up to do. If you focus on Google’s algorithms as they are now, then the waters can be very murky indeed. Google has built its reputation on giving users what they want. If there is a way of artificially manipulating rankings, then Google will stamp it out as quickly as possible – its reputation depends on it. In order to have long-term and sustained success in SEO, the real thing to focus on is the users; compelling content will interest people. So my tip for SEO in any business is to find something that you feel is really interesting, put it out to the world, and keep doing it.
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The UK’s biggest business exhibition celebrates its 30th staging this November. Why not join 25,000 aspiring entrepreneurs and SME owners at Olympia London to mark the occasion? Here’s what awaits you. Held in London twice a year, the two-day event draws crowds of more than 25,000 aspiring entrepreneurs and small-medium business owners looking for inspiration, advice and networking. The event has grown from its beginnings as Business Startup at Birmingham’s NEC in April 2000, to become the UK’s biggest business exhibition and the fastest growing event of its type in Europe. The 30th Business Show is fast approaching on 28th-29th November at London Olympia, so if you’re looking to start, grow or improve your business, make sure you book your free tickets at www.thebusinessshow.co.uk now. Ever since its first staging 13 years ago, The Business Show has always supported British start-ups and SMEs by providing everything they need to start and grow a business – from access to innovative technology to new sales techniques that could revolutionise the way they do business – all completely free and under one roof. With so many ambitious business people in one place, 350 exhibitors, 250 seminars, and 10 workshops running across two days, the atmosphere is always electric and you can sense real business deals being done all around you. Whether you want to drive sales for your business, learn from experts and thought leaders, network, or research your market, The Business Show gives you the opportunity to meet your objectives. The show has hundreds of pioneering exhibitors, from software suppliers to business advisors and market leading ecommerce companies, to develop your business in every aspect. Exhibitors at November’s show include big names like 3M and .com offering every kind of business solution, as well as financial giants like Intuit and Sage. The Business Show always presents the latest technology to the business community and now it’s the turn of cloud computing, with exhibitors such as Incloud Solutions and Hosted Desktop taking their place on the show floor.
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Something For Everyone If you’re just starting out, then the Business Startup area has exhibitors like School for Startups, Startup Loans London and Crowd Ahead, with a dedicated Start-Up Boardroom, for small business owners to sit around a boardroom style table to share experiences, learn from one another and come away with new ways to grow their own business. There are also popular features like Midas Touch, where 24 contestants compete for investment in front of a live audience. If your business is already established, but looking for investment to take your existing SME to the next level, then make sure you don’t miss the chance to make your pitch to the panel of angel investors at Angels Den. They’ll also run one-to-one funding clinics to ensure your business stands the best chance
of attracting the investment it needs. Whether you want to make your own pitch, or take in the spectacle as part of the audience, Angels Den is always a hit with showgoers.
Learn From The Best Presenting the premier class of speakers, The Business Show seminar schedule is a who’s who of the biggest names and brands in business right now. Each seminar gives you the chance to learn first-hand from the best of business who will share their experiences and insights with an avid audience. Keynote speakers this November include Rachelle Headland, Managing Director of Saatchi & Saatchi; David Gold; the original BBC Dragon, Doug Richard; and Clive Rich, the £10bn negotiator, as well as social media giants Facebook, Twitter and LinkedIn.
This is the only place you can hear this seminar schedule covering every aspect of business, from branding to budgeting, and CRM to SEO, as the exclusive line-up of the leading lights of industry deliver keynote seminars on topics that include inspiring stories and how to build a multi-million pound business from your back bedroom. The comprehensive workshop schedule is constantly evolving to meet the changing needs of business in the 21st century, with new subjects that include cloud computing, email marketing and the secrets of successful websites, as well as the latest advice for business planning, financial fitness and marketing.
Networking Every one of the 25,000 visitors represents a business opportunity for you to network with, whether they might be a potential supplier or customer. You’ll find it easier than ever to make those all-important contacts, thanks to a range of features dedicated to networking. Speed Networking is a highly charged series of two-minute mini-meetings, while FaceTime enables delegates to discuss hot topics on one of eight industry specific tables, chaired by an expert. Business Connections makes a welcome return for you to exchange business cards and establish new relationships with the suppliers, distributors and partners that you’ve been looking for.
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International Trade, Takeaways And Farm Business As if The Business Show didn’t already offer enough inspiration for the most productive day out of the office you’ll have this year, event organisers Prysm Group have added even more content for 2013. The Going Global Live area is dedicated to businesses that want to trade overseas, with exhibitors and advisors to help you with everything from setting up import/export trade to tax and recruitment across borders. You’ll find the trade bodies for each of the BRICS markets here, as well as the UKTI, who will explain how they can support your business as it approaches the global market. Two all-new exhibitions will also run alongside The Business Show for the first time in November; Takeaway Innovation Expo and Farm Business Innovation, for anyone interested in finding out more about business opportunities in these sectors.
If you’re in business – or want to be – then you need to be at The Business Show at London Olympia, 28-29 November. Book your free tickets now at www.thebusinessshow.co.uk or call 08000 686970
As British institutions go, they don’t come much bigger than Marks & Spencer. Despite some of the other casualties of the high street, good old M&S has come out the other side alive 82 82and kicking, and this is a significant testament to the resilience and popularity of its mighty retail proposition. And it is not just working its magic on these fair shores. The M&S brand is also getting significant traction in overseas markets, with its food offering proving particularly attractive in foreign climes. For, in addition to a planned 150 new openings of its Simply Food outlets in the UK over the next three years, it has also struck a new partnership with French newsagent firm Relay. The agreement will see M&S and Relay open ten news stores in and around Paris by 2018, with the first opening in
Tesco’s clothing brand F&F hits Europe
Tupungato / Shutterstock.com
M&S winning over French foodies
summer 2014. Adding to the four stores it already has in the French capital, the new outlets will be branded under the M&S Food banner and located at train stations, metro stations and airports. “Our Food business has gone from strength to strength under our plans to transform M&S,” said Marc Bolland, chief executive of M&S. “We’re delighted to be partnering with Relay France to drive our international ambition even further.” It certainly seems the Parisians are taking kindly to what the Best of British has to offer.
WORDS: ADAM PESCOD
Caremark franchisee is year’s best
The days when Tesco was just a grocery store now seem a long distant memory. And this is merely fortified by the fact that it has just announced the opening of the first European franchise stores of its clothing brand F&F. Following successful franchise agreements in Central Asia and across the Middle East, the new openings in Switzerland and Gibraltar bring the total number of F&F franchise stores to 32, with more planned in the coming months. The new openings include the first ever F&F Kids store – in Gibraltar – as well as the first F&F franchises to be opened in both a hypermarket and department store, owing to its partnership with Coop, the second biggest retailer in Switzerland. “F&F has performed really strongly over the last 12 months, so we’re delighted to announce these new franchise agreements in Switzerland and Gibraltar, our first franchise stores in Europe,” said Jason Tarry, chief executive of F&F. The charge of the Tesco juggernaut continues.
With franchising enjoying a sustained period of growth in the UK, it is probably worth getting to know the people setting the gold standard. A good starting point would be the British Franchise Association (bfa) HSBC Franchisee of the Year Awards supported by Express Newspapers. At what we assume was a glitzy award ceremony, Janis Anderson of domiciliary care provider Caremark was named the overall winner for 2013. Not only did Anderson pick up the coveted Franchisee of the Year crown, she also scooped Female Franchisee of the Year. “It’s brilliant to be recognised for all the hard work which contributes towards Caremark’s success,” she said. “I became a Caremark franchisee at a challenging time when cuts were being introduced but this spurred me on to drive the business forward and we have since grown from strength to strength.” Anderson wasn’t the only winner though, so we’d recommend popping over to the bfa website for the lowdown on this year’s fab franchisees.
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Pan Chai’s all set to franchise In a move that’s left the Elite Business team drooling, luxury pan-Asian restaurant Pan Chai has announced its intention to take its beautiful food across the UK by launching a franchise division. To give readers an idea of the kind of quality cuisine we’re talking about here, Pan Chai currently operates out of a relatively established luxury department store in Knightsbridge called Harrods and has wowed customers ever since its opening back in 2011. It may come as little surprise to learn then that Pan Chai owner Eddie Lim is eager to build on the success of its flagship site and introduce people from other parts of the country to the delights of premier Asian dining. Needless to say, Pan Chai won’t be diverting from its current target market and has therefore identified affluent city-centre locations with high footfall as potential new sites. And whilst the initial focus of the franchise will be a fine dining model, it is also offering franchisees a chance to try their hand at either a casual dining or quick service restaurant concept. “It has long been my ambition to bring high-end, luxurious pan-Asian food to the UK market and I can already see its influence growing,” said Lim. “Creating a Pan Chai franchise brings Asian fine-dining across the UK, and is a great opportunity for anyone looking to become involved with a luxury Asian brand.” We’ll certainly be putting some money aside for the first opening near Elite Business HQ.
Frozen treats hit the spot for Pizza Hut and Costa veteran The people of Amersham are enjoying the delights of Baskin-Robbins after serial franchisee Zul Chagani opened his first branch of the specialist ice cream chain in the Buckinghamshire town. Chagani, who already has eight Pizza Hut restaurants and 15 Costa Coffee shops to his name, identified Baskin-Robbins as the best bet for expanding his already impressive business portfolio. And it won’t come as a surprise to learn that a second site is already firmly on the agenda. “The visual effects of the Baskin-Robbins store is modern and shows the contemporary nature of this historic brand, which really appealed to us,” he said. “We are already looking at potential locations for our next store opening and I’m sure our Amersham store will be just the first of many stores to come.” We’re expecting hundreds and thousands of customers to converge on every one of Chagani’s new outlets.
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Wrap It Up! A
s crowded markets go, the fast-food arena is right up there. Whilst the likes of McDonalds and Subway continue to dominate the landscape, a host of new and exciting concepts have come to the fore since the turn of the millennium, all offering a fresh take on overseas cuisines. Whether it’s a consequence of people conducting more business on the move, or just part and parcel of globalisation, there has certainly been a demand for a greater choice of tasty hunger remedies. Suffice to say, this demand is being met, and then some. One company tapping into this trend with relative success is Wrap it Up!, founded by Faisal Haque and Afnan Bashir in 2006. Having taken the decision to franchise its gourmet tortilla wrap offering in 2010, the company now boasts 11 stores across Central London and has been attracting significant investment as a result. However, whilst Haque and Bashir may have been responsible for tentatively introducing the humble tortilla wrap to the British fast-food market, it is another man that has turned it into such an intriguing business proposition. Managing director Tayub Mushtaq became the firm’s first franchisee in 2010 after previously turning around the fortunes of its flagship store – a kiosk outside Liverpool Street station. He was soon overseeing four franchised outlets under the Wrap It Up! banner and Haque and Bashir ultimately decided to let Mushtaq drive the brand forward. You could almost say the rest is history but it is probably worth taking things back
WORDS: ADAM PESCOD
Franchise in the spotlight:
You have to do something rather special to stand out in the fast-food market nowadays. Needless to say, world gourmet wrap franchise Wrap It Up! is a solid contender
“Wraps are the next big thing”
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to the start before delving deeper into what lays ahead for Wrap it Up! Mushtaq explains that the notion of a world gourmet wrap enterprise originally emanated from the adventures of the afore-mentioned co-founders. “Faisal and Afnan came up with the idea through travelling the world, seeing the different forms of street food, how it is served and the ingredients that are used,” he says. “They came up with the idea of putting together a combination of global products under one roof, which are served and prepared fresh for each and every customer.” Indeed, what is also quite endearing about Mushtaq’s own entry into the Wrap it Up! journey is his experience as a consumer beforehand. “I worked in the city before I bought into the business and I used to have my lunch at Wrap It Up! for two to three years – I fell in love with the food,” he adds. “And in 2010, when they still had their first store, they started to advertise to bring in franchisees to help grow the business, and that is the stage that I thought ‘it is a good brand, it is a good concept’.” Certainly, attempting to name another retailer whose focus is on tortilla wraps is an ultimately fruitless endeavour. But this in itself is what makes Wrap It Up! the compelling venture that it is, and goes some way to explaining the £2.5m it has thus far risen from private investors. “That is testament to the fact that the product works and it can compete with a burger, it can compete with a sandwich,” says a bullish Mushtaq. “People are fed up with eating boring bread sandwiches. They want more filling, they want fresh quality good produce, and we deliver.” Naturally, there were some investors who Mushtaq wasn’t quite able to win over, including the five entrepreneurs who grace our television screens on Sunday nights once or twice a year. However, Mushtaq puts a positive spin on his Dragons’ Den experience,
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describing it as “the best PR we have ever had”. Moreover, there was recognition from the panel that Wrap It Up! filled a gap in a notoriously competitive market, and it was ostensibly only Mushtaq’s lofty valuation of the business that stopped the Dragons from coming on board. The company also undertook a rebrand as a result of feedback from the show, something which Mushtaq admits was a useful bit of advice. Commenting on the rebrand, he says: “It gives the stores a world theme, a world feel. It gives customers the experience that they are actually coming into a store where they can see the influences of the food and how it has been absorbed by different cultures.” Not one to be held down though, Mushtaq intends to appear on the show again next year, daring to go one further this time. “I will be going in at double the investment for half the equity because since the show was aired, and by the time I get to go on the show next year, we would have nearly tripled in size in terms of revenues and store numbers.” Significant growth is definitely on the horizon for Wrap It Up!, and it will be a process where franchising has an important part to play. “We want to get up to 50 stores in the next three to five years, of which 35 would be company-owned and 15 would be franchised,” he explains. “And these are very conservative figures. It might well be that with the investment we have got and the potential of new franchisees that we open 70 or 80, but realistically we are targeting to get up to 50 stores by the end of year five.” The interest is certainly there with almost 15 new franchisees already having paid their deposits. And the recent acquisition of Mexican fast-food chain Flying Burrito also looks like a sign of things to come. “We do feel that our concept and the product goes hand-in-hand and can compete with the likes of your Subway, your Burger King, your McDonalds,” says Mushtaq. “Wraps are the next big thing.” Time will tell of course, but given the belief that he has in his venture, we’ll give Mushtaq the benefit of the doubt for now.
“People are fed up with eating boring bread sandwiches. They want more filling, they want fresh quality good produce, and we deliver.”
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WHY CHOOSE A PC HOSPITAL FRANCHISE?! Proven Business Formula As a PC Hospital franchisee you will have the opportunity to build a successful business with the training, support and experience of an established business behind you. Large Exclusive Territory Each franchisee is given a large exclusive territory to work within. This means that only you can operate and market within your chosen area. Proven Lead Generation PC Hospital has a proven business formula for generating leads and business. Key areas we cover include target markets, sales activity, lead generation tools and techniques, lead conversion and how to maximise the amount of money in the deal. Credibility and Use of Company Brand As part of the franchise agreement you get to use the PC Hospital processes, systems, name, logo, website and stationery. Training and Ongoing Support Ongoing comprehensive training and support will be given to franchisees which combine on the job and office based training. Assistance with Raising Finance Finance Plans are available for prospective franchisees if required. A business plan template has been developed which is then amended to suit your particular circumstances.
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OF SETTING PEOPLE CH BL E UP IN BUSINESS 20th
20 YEARS SUCCESS DU
58685 Dublcheck A4 2pp:Layout 1
1993 ANNIVERSARY 2013
Franchise F hi owners say: JOANNE Previously Project manager at Bank of Scotland Starting turnover: £50k Current turnover £73k
“We found Dublcheck during our research into the franchise industry and immediately liked its concept of guaranteed turnover*, with Dublcheck finding your clients and guaranteeing the level of turnover you desire.” - Peter
BUILD YOUR BUSINESS THE EASY WAY
Previously Greengrocers Starting turnover: £12k Current turnover £77k
Previously MD of Colouroll Starting turnover: £48k Selling turnover £400k
“Facing redundancy in my 50’s was unsettling. A management franchise was ideal because it enabled me to utilize my previous management experience. I love the fact that the harder my team and I work the higher the rewards.” - Graham
LEN DONNELLY “A big thank you to the Dublcheck team, and o receive an award was brilliant” - Len
Carol Stewart-Gill and the Dublcheck Support Team
“Once I met the Dublcheck team I found the concept of commercial cleaning very appealing” - Joanne
PETER & PRU
Previously Retail Manager Purchased resale Current turnover £300k
NO NEED TO DO ANY SELLING... WE GET THE BUSINESS FOR YOU!
• Turnover • Profit • Growth Larry Bainbridge
Starting Turnover £62k Current Turnover £250k
Starting Turnover £14k Current Turnover £82k
Full training, support and low investment Invest from £9,950 to £190,950. Turnover from £14,000 to half a million per annum. With over 100 franchisees nationwide, and many more areas and opportunities available, you too could benefit from the proven Dublcheck system. Dublcheck’s unique franchise system is a proven way to build a successful business in a multi-billion pound cleaning industry. Carol Stewart-Gill, Founder and Chairman of Dublcheck
Further Details: 0800 317236 SONAL & MITESH Previously Quantity Surveyor Starting turnover: £14k Current turnover £118k
“Sonal and I can’t belive a year has past since we decided to join this wonderful franchise. We both wish we had done this years ago.” - Mitesh
email: firstname.lastname@example.org web: www.dublcheck.co.uk
APPROVED FRANCHISE ASSOCIATION
ALL FIGURES CORRECT AT THE TIME OF GOING TO PRESS
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Dublcheck, The 20th Fastest Growing Company in the UK - Official Source, Sunday Times 28/06/2013 09:29
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Breaking G up is hard to do
WORDS: ADAM PESCOD
Whilst business partners may go into a new venture with the best intentions, differences of opinion may often threaten to become terminal. Preparing for such an eventuality from the start is therefore essential
oing into business with a close friend or acquaintance is usually an endeavour laced with excitement. Despite the numerous challenges that are sure to arise along the way, there is ultimately comfort in the thought that you will not have to overcome them alone, but with the help of your fellow business partner or partners. However, what is often overlooked are the components of the business partnership that are most likely to bring the whole thing to its knees: the very people who set it up. For, as much as one partner may think their vision for the enterprise is shared by their compatriots, there may come a point when they wish to go in a direction that isnâ€™t greeted with universal approval. Alternatively, an untimely incident could result in a seemingly irreparable state of affairs, culminating in an outcome that may favour one partner more than another. It is therefore worth having a think about these occurrences before the business even comes into being.
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“The first debate that occurs is ‘what happens to the things that create value in the company?’”
From a legal perspective, much will hinge on the formal stature of the partnership, as this could have a significant bearing on whom, if anyone, stands to lose most from the fallout. Under a traditional General Partnership agreement, each partner is equally responsible for the debts of the partnership. What this often means in practice is that the misconduct or negligence of one partner falls on the heads of everyone involved in the partnership. The agreement is therefore governed by the principal of ‘unlimited liability’. On the other hand, a Limited Liability Partnership (LLP), as the name suggests, operates in a slightly different manner. Under this arrangement, each partner is held solely to account should their own conduct be judged as the principal cause of any damage to the company’s name or financial position. Needless to say, the latter option is becoming increasingly popular as far as business partnerships in the UK are concerned. “Lots of people now are saying ‘let’s run ourselves as a Limited Liability Partnership because then we can have the best of both worlds’,” comments Clive Rich, owner and CEO of online law firm LawBite. “They give you the benefits of partnership without that potential risk that you could be unlimitedly responsible for the actions of your fellow partners.” Putting aside circumstances when the conduct of one partner brings a firm into disrepute or significant debt, due consideration must also be given to disagreements that conclude with a partner saying they ‘want out’ or a number of partners exerting pressure on another to step down. Rich explains that the legislation governing these situations is both dated and complex. As a result, it can open the door for outcomes that probably wouldn’t emerge if a written agreement between parties is signed at the time of a company’s foundation, or at least before the danger signs start to show. Such unwanted scenarios – as covered in the Partnership Act 1890 – could include any partner having an undefined right to dissolve the company, as well as no restrictive covenants being in place, thus meaning an exiting partner would be free to set up in competition. It goes without saying, then, that relying solely on the law in these matters is a hazardous path indeed. “You don’t really want to be leaving the resolution of disputes to those kinds of legislation,” adds Rich. “It is much better for everybody if you could have thought through it yourself and said ‘in the unlikely event that this all goes wrong, here is how we should sort it out’.” Whilst a decent lawyer will be able to pinpoint the sorts of things that should be discussed here, without the agreement of all parties concerned, the spectre of litigation will still loom large. Rich nevertheless says that company assets are usually one of the biggest points of contention and a key area that should be covered in the
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paperwork. “If a partnership of any kind goes wrong, the first debate that occurs is ‘what happens to the things that create value in the company?’” he explains. “‘Who owns those and in what measure, and how can I protect my share of it?’” Indeed, the precise amount of money that has been ploughed into the company by respective partners should dictate these conversations, as sensitive a subject as that may be. This becomes more pertinent when one considers that the Partnership Act also assumes everyone to be entitled to an equal share of profits, unless alternative arrangements are put in place. “This may not have been intended at all, for example by a senior partner who put in most of the money,” adds Rich. Clearly then, it pays to put a marker down early to avoid a messy and potentially catastrophic break-up. “If people can’t work out these areas amicably, you get into a destructive cycle where people are seeking to punish the other party even at the expense of the enterprise itself,” Rich explains. “That is when you get people trying to wind up the company, call a liquidator or dissolve the partnership against the wishes of the person that they have now fallen out with.” All said and done, a business partnership can be treated a bit like a marriage, according to Rich. A pre-written document outlining how things will pan out at the end almost serves as something akin to a prenuptial agreement. “I understand why people are reluctant to do that because it seems a bit vulgar before you get married to be thinking about how you are going to get divorced,” he says. “However, when you are in business with somebody, it is a more rational exercise even if everyone is probably swept away with a wave of enthusiasm at the beginning.” Of course, an acrimonious conclusion is the last thing anybody wants, but it’s always worth bracing yourself just in case.
Clive Rich, owner and CEO, LawBite
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the START-UP DIARies
Fashioning an entrepreneurial future Sarah McVittie, co-founder, Dressipi
Each month, the co-founders of fashion recommendation site Dressipi, Sarah McVittie and Donna Kelly, tell us what it’s like to run a business that operates in the two famously fastmoving sectors of fashion and technology. In their first Start-Up Diary for Elite Business, Sarah explains how Dressipi got off the starting blocks
onna and I started Dressipi in 2010 as a way of solving a problem most women will be familiar with – the daily struggle of finding something to wear. Back then I’d just sold my first start-up, the SMS Q&A service Texperts, and was looking for a new challenge, while Donna had a highpowered corporate job leading the digital media team for IMG, the sports and media business. We’d wanted to work together on a new venture for ages, but it was only when we got talking about how maddening and intimidating we found shopping for clothes, especially online, that the idea for Dressipi was born. I was out in New York at the time and remember going into a really trendy boutique in the West Village. The sales assistant looked at me in absolute horror and quickly banished me to the changing rooms. He then proceeded to bring me five outfits, none of which I would have picked myself but all of which looked amazing. I promptly bought all five and loved wearing them. This guy didn’t even know me, yet he could take one look at me and know exactly what would look great. It made me realise that there might just be a science to sexy. Technology was now at a point that it was likely to be good enough to deliver a really good service for customers.
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If you meet Donna and I together, you’ll see instantly we have very different ideas of style. But we both had the same problem when clothes shopping online. With millions of garments to choose from across thousands of retailers, we never seemed to find anything we liked. Every retailer was pushing products but there was no one genuinely servicing the consumer to help them work out what suited them, their wardrobe and their budget. And when, by some miracle, we did find a dress or pair of jeans that looked perfect in the photos, when it arrived we usually found it either didn’t fit us or – even worse – didn’t suit us one bit. We knew then that women everywhere must be crying out for a recommendation service that applied some of the data and technical innovations that excited us so much as technologists to solving the problem of finding the perfect dress. And so we created Dressipi (the recipe for getting dressed, geddit?), a service which makes personalised style recommendations for each user on the basis of what we called their ‘fashion fingerprint’. We called it that because we knew from the start that a woman’s sense of style is just like her fingerprint – a unique thing that combines her size, body shape, personal taste and favourite brands. Two years on from our beta-launch in November 2011, Dressipi has changed beyond recognition. Not least because the business we created to change shopping for consumers is now a business that sells services to major retailers. This happened after we realised that a problem for a consumer, like returning an unsuitable garment, also represented a cost or lost opportunity to a retailer. So we began to develop a recommendation service that could ‘plug in’ to a retailer’s website and help their customers while allowing them to improve metrics like average basket size, returns rates and conversion rates. Dressipi for the enterprise was born – a service that’s now in use or on trial with businesses like M&S, eBay, BrandAlley and many more. Offering a broader solution for the consumer also opens up new revenue models. Our B2C business is funded through some affiliate fees from purchases and we increasingly see media partnerships and branded content filling the gap. A third way is to look at what your business does, and think whether it might have an enterprise use. Does the technology and service you’ve created solve a business problem – and can its effects be measured? If so, you have the beginnings of an enterprise model. What you need to do next, however, is make it work.
“We created Dressipi a service which makes personalised style recommendations for each user on the basis of what we called their ‘fashion fingerprint’”
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