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The onshore revival

How manufacturing is coming back to Britain

Taste the difference

Transform your business with a supermarket deal

Relatively happy

Why family firms are coming out on top

An enterprising ethic Laura Tenison, founder of JoJo Maman Bébé, is no tree-hugger. But she believes morals and money-making must go hand-in-hand

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Inside this month... ISSUE 02 SEPTEMBER 2012

09 Editor’s letter 10 Contributors 12 News in brief 13 Talking point 14 Book reviews

16 The Elite Interview

Laura Tenison on the benefits of a triple bottom line

22 One to watch

eCourier co-founder Jay Bregman on raising $17m for new start-up Hailo

30 Banking on a bright future

EB chats with Silicon Valley Bank about London as a centre of technological excellence

35 A slice of the pie

Share-incentive schemes offer a way to reward staff without eating into your profits

26 Best of British

41 Supermarket sweep

Getting your merchandise on the shelves of the big four is no game

Is UK manufacturing staging a comeback?

46 Dealing with promotions


A sound strategy around discounting can win you long-term customer loyalty

51 Pretty familiar

UK family firms are remaining resilient in the face of the recession

55 Keeping up appearances

Why a wardrobe choice says more about you than you might think

64 Mobilising the workforce

61 Tech for start-ups

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

Flexible working is the driving force behind many mobile technologies

67 Lessons from an ‘e-tailor’

Even in the digital age, face-to-face interaction with customers still has a place

FRANCHISE SPECIAL 71 Franchise in the spotlight

Mail Boxes Etc. on why building its brand catapulted it to success

80 Seven steps to franchise heaven

Everything you need to read before launching your business in the world of franchising

74 Q&A with Steve Bolton

83 A brief history of franchising

From the Singer sewing machine to the golden arches, franchising has had an illustrious past

The man behind Platinum Property Partners on how he pulled it back from the brink

89 Addressing IP

Franchise Special

Protecting your intellectual property against theft can pay dividends

98 Start-up diary

September 2012

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ISSUE 02 SEPTEMBER 2012 SALES Harrison Bloor – Account Manager E: T: 01206 266843 Richard Smith – Account Manager E: T: 01206 266844 EDITORIAL Hannah Prevett – Editor E: Josh Russell – Feature Writer E: Lindsey McWhinnie – Chief Sub-editor E: Kia Ure-Reid – Researcher E: DESIGN/PRODUCTION Leona Connor – Designer E: T: 01206 266845 Clare Bradbury – Designer E: T: 01206 266845 Dan Lecount – Web Development Manager E: T: 01245 905805 CIRCULATION Malcolm Coleman – Circulation Manager E: ACCOUNTS Sally Stoker – Finance Manager E: T: 01206 266846 DIRECTOR Scott English – Managing Director E: Circulation/subscription UK £40, EUROPE £60, REST OF WORLD £95 Circulation enquiries: CE Media Limited T: 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

Let’s keep riding the Olympic wave So, that’s it for another four years – Olympians from around the world have packed up and gone home to their respective countries. And us spectators have reluctantly removed our Union Jack glasses and packed our flags and bunting away until the next major sporting event. The support for the Olympics has been overwhelming; the cheers deafening. Some people even surprised themselves with how patriotic they felt during the Games – I know I was. But we must not be downcast now that it is all over. This is a wave that we can keep riding. 09

One of the ways we can do this is by championing the fantastic brands that were home-grown right here on Blighty’s shores. One great British success story is that of JoJo Maman Bébé, the £34m-turnover childrens and maternity-wear business that was founded by our cover star Laura Tenison. JoJos is currently embarking on international expansion plans, fuelled by an appetite in Europe and farther afield for high-quality UK-designed goods. What’s more, UK companies are realising the power of the ‘made in Britain’ stamp which is encouraging the trend towards onshoring, as investigated in our Elite Feature this month (page 26). Elsewhere there’s myriad fascinating family businesses that have started and grown in the UK (page 51), as well as UK start-ups that have managed the holy grail of wholesale distribution – getting their products in supermarkets (page 41). The companies we write about in Elite Business all differ vastly from each other – from men’s grooming products to pie-makers and caterers of cocktails. But the one thing they do have in common is their grit and determination to succeed. Surely that’s worth a cheer? HANNAH PREVETT EDITOR

Copyright 2012. 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 is at owner’s risk. Due to the nature of the printing process, images can be subject to a variation of up to 15 per cent, therefore CE Media Limited cannot be held responsible for such variation.

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Contributors Josh Russell

If the hat fits, wear it, as the old adage goes. If anything fits Russell it’s journalism. Our features writer is a vociferous Leeds graduate who lives and breathes ambient music and has a romantic relationship with his laptop. His article on supermarket distribution covers pies, shave gel and cocktails – facial-hair fan Russell is only likely to have two of these items in his trolley.

David Hathiramani

Hathiramani is one half of the team behind revolutionary suit company A Suit That Fits. The computing graduate is a selfconfessed geek. But when he’s not using his computer wizardry to bring snazzy suits to the masses, Hathiramani does like to unwind by beating his co-founder at table tennis and is partial to the odd Jägerbomb – though probably not at the same time.


Emilie Sandy

Aside from dashing between the Cotswolds and London to shoot business types for magazines like EB and TV stars for the Beeb, Sandy is also a visiting lecturer at a college in Stroud – all while studying for a master’s degree. It’s the second month in a row this incredibly talented photographer has shot our cover star. But as they say, if it ain’t broke...

Paul Boross

Fresh from penning his most recent book Principled Selling, Boross agreed to write a guest article on becoming pitch perfect. When he’s not dispensing advice, he’s a keen sportsman. He even used to be one of the top six runners in the UK – and it looks as though his sports-mad son Sam, 11, may be a chip off the old block. Here they are at the men’s 100m final at London 2012. September 2012

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Apple has won its patent infringement lawsuit against perennial rival Samsung in the US courts. Given the issue of a staggering $1bn fine and that Apple are now pushing for a full-scale ban of the infringing products in the US, it seems like it might be smart for the software giant to adopt the slaughter rule and bow out of this bout.


A report commissioned by the Government’s education and business secretaries has outlined a plan to further help SMEs take on more apprentices. Additional advice will be given to small firms on how to secure apprenticeships as well as improving access to the Apprenticeship Grant for Employers, which provides 40,000 grants to SMEs. The future is looking bright for young UK business talent. It seems UK businesses are becoming increasingly attractive acquisition targets for overseas companies. Financial advisor Grant Thornton has reported that the number of its clients being acquired from abroad has doubled since 2009, rising from 112 to 228. In the last quarter alone this injected £300m into our economy. Minister for disabled people Maria Miller has released advice for SMEs wanting to chase the spend of the disabled consumer base – colloquially referred to as the ‘purple pound’. She feels it is vital for businesses to better engage disabled people, who make up a fifth of the population and represent a spending power

of £80bn a year. All-in-all an excellent case of ethics and economics joining forces. In its analysis of the Department for Work and Pensions’ Fit for Work Service, Legal and General has revealed that three quarters of employees required additional assistance when returning to work after having been signed off as ill. With those polled reporting nearly 30% of their employees were on sick leave, getting them back to work is important, but it’s clear the proper support can make it a much less painful process. New findings from the Federation of Small Businesses has highlighted concerns among small businesses that most school leavers simply aren’t prepared for work. Its survey showed that eight out of 10 businesses didn’t feel school leavers had the necessary skills for employment, with 59% of those who employ 16- and 17-year-olds reporting that they had poor literacy skills, 55% noticed poor numeracy skills and 56% insufficient communication skills.

Apparently, partners in romance are also often partners in business. Research from Direct Line for Business has found that more than half of owners of small trade businesses employ their spouse or partner to help with their company. One imagines there could be some arguments however – apparently 31% don’t actually pay their partner for their contribution.

Despite the unpopularity of many of the banks, according to the YouGov SixthSense SME Banking Report, 82% of SMEs are too busy to change providers. And they’ve been given plenty of motivation, with three-fifths saying bank charges are too high and 27% thinking they’re unjustified. With three-quarters believing that charges are just an attempt to make a quick buck, banks are profiting from SMEs’ reluctance to switch services. Long-suffering JJB is finally ducking out of its long marketplace battle with Direct Sports. After discussions with shareholders and other sources of investment failed to garner sufficient funds to implement a turnaround, the sporting goods supplier has announced it is up for sale. Desperate to make a sale, it has yet to set an asking price, hoping to invite offers fast enough to save its 4,000 staff. It may hardly be surprising for anyone who followed the foul-ups in the run-up to London 2012, but security firm G4S has announced the Olympic Games cost it £50m. Among its mistakes was recruiting insufficient numbers of staff – which resulted in the firm having to pay for military support to assist in manning the event, this proving to be the most costly. The firm has also confirmed it will no longer be bidding for Brazil 2014 and Rio 2016 security contracts. It seems things may not be as bad as once thought – the Office for National Statistics has announced it is revising its GDP figure up from a contraction of 0.7% to one of 0.5%. When released last month, the original figure was criticised for being far too pessimistic and claims were made it was inconsistent with reports of falling unemployment rates. It’s a rather happy day for the economy, with news that the recession might not be cutting quite so deep as once thought.

EVENTs The Franchise Show 2012 September 7-8 Earls Court London SW6 1RX Speed Networking Events September 14 Ena Salon, 5 Great Queen Street, London, WC2B 5DG Opening Doors, Closing Sales September 17 Cavendish Conference Centre 22 Duchess Mews London W1G 9DT Cardiff Connections September 18 PC World & Currys Megastore, 501 Newport Road Cardiff CF23 9AD Manchester Connections September 19 Jurys Inn, Great Bridgewater Street Manchester M1 5LE Made Festival September 19-21 Sheffield City Hall Sheffield S1 2JA The Business Growth Show September 20 The Clarendon Suites 2 Stirling Road, Edgbaston Birmingham B16 9SB Speed Networking Events September 21 MWB Business Exchange 14 Basil Street, Knightsbridge, London, SW3 1AJ South East Connections September 26 East Overcliffe Drive Bournemouth BH1 3AF Speed Networking Events September 26 The Four Fifty Club The Academy, 21 Gower Street London WC1V 6HG Young Entrepreneur’s Question Time September 27 Summit House, 12 Red Lion Square London WC1R 4QD The Business Growth Show September 28 Sixways Stadium, Warriors Way Worcester WR3 8ZE September 2012

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Talking Point

Has the Government gone off the rails over the West Coast route? Since the announcement that Virgin Trains had lost out to First Group for the West Coast Main Line railway franchise, there has been a public and political outcry – encouraged, not surprisingly, by Richard Branson. But is this sufficient grounds for a government U-turn?



t’s not often that a government procurement decision attracts so much attention. But the decision on August 15 to award the West Coast Main Line railway franchise to First instead of present incumbent Virgin Trains has certainly provoked some strong feelings: an e-petition started on the Government website had amassed more than 165,000 signatures at press time. That’s enough to trigger a debate in the House of Commons. Naturally, the loudest dissenting voice has been that of Virgin boss Richard Branson; he wants a judicial review of a decision that will strip him of a franchise it has run – arguably rather successfully – for the last 15 years. The debate is fierce. On one hand, you could argue that a full procurement process has been followed – and First’s bid offered a much bigger financial upside for the taxpayer. On the other, those 165,000 signatures show the depth of support for Virgin among its customers – and First’s unsuccessful stewardship of the Great Western franchise raises genuine doubts about its ability to deliver on its promises. Branson’s disgruntlement is understandable; after a difficult start, Virgin Trains went on to become one of the most successful and profitable of the UK’s 19 rail franchises. But is he right to contest the decision so vigourously?

YES says Ross McKillop freelance IT and VoIP consultant, and the man behind the petition The way the decision has been made doesn’t really make sense. The process is fundamentally flawed. The weighting of First’s bid is a bit odd; for the first 10 years, Virgin is actually delivering more money to the Government. And then in the last three years, First reckons it’s going to find about £2bn. We also need to take into account the fact that First are handing back the keys to the Great Western franchise three years early to avoid a payment of about £860m. If they were really committed to improving our railways, surely they wouldn’t be doing that. The wording in the petition isn’t calling for the reinstatement of Virgin; it’s just asking for the decision to be reviewed. An independent organisation needs to look at this and check it really is the right decision for the country and for taxpayers. Because on the face of it, I’m not sure it is.


No says Jamie Waller founder and CEO of debt management & enforcement group, JBW The reality is that every day, people lose contracts where they’ve invested a lot of time, money and effort. Also, people lose contracts to their competitors where they believe they’ve been doing a rather good job until this point. Everyone has to lose from time to time. But what Richard Branson is trying to do now is create this almost union-like environment where he’s bullying the DfT into making a decision based on the customer. Yet, unfortunately, it’s not the customer making the purchase. Branson is throwing his toys out of the pram. I think it’s terribly bad behaviour. He is a leading business figure that people look up to, so he should be behaving a bit more responsibly, rather than calling the people to arms. Has Richard Branson got 165,000 signatures on a petition because of Virgin Trains? Has he hell. He’s got 165,000 signatures on a petition because he’s Richard Branson.

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The Elite read The Careerist: 100 ways to get ahead at work Rhymer Rigby

The jobs market is an unpleasant place to be right now. With so much competition for each position, back-stabbing and bitching is rife. OK, perhaps it’s not that bad, but we all need whatever help we can get, right? Delivered in bite-sized pieces (with a usefully comprehensive contents page to boot), The Careerist makes work-based advice a little easier to swallow. Need practical advice on how to resign without burning your bridges? Get it here. Want to persuade the board to part with more budget? Look no further. Has someone nicked your bright new idea and passed


it off as their own? The Careerist will teach you all you need to know about dealing with the tricksy little blighters. If you’re looking for deep, analytical exploration of a specific HR or management issue, this book probably isn’t for you. But if what you are after is a concise, helpful guide for dealing with everyday workplace issues, with input from some of the best brains in the business, this book’s got your name all over it. HP The Careerist, published by Kogan Page, is out now and retails at £14.99

Inspiring Sustainable Behaviour: 19 ways to ask for change Oliver Payne

Climate change and sustainability are big issues. Which is why the standard approach for encouraging change is to go in with the hard sell. Advocates of environmental issues come on strong – reasonably assuming that the best motivations are the most forceful – and rely on images of the most negative scenarios. Inspiring Sustainable Behaviour turns this on its head: rather than the old-fashioned pressure tactics, it posits smart marketing could be the solution to

evolve the way we approach climate change. Payne’s book is like an industrial loom for the synapses; it weaves in strands from contemporary psychology, cutting-edge marketing and cognitive behavioural techniques to show us how our minds manage the things we find most desirable and how, ultimately, this can be used to our planet’s benefit. JR Inspiring Sustainable Behaviour, published by Routledge, is out now and retails at £25 September 2012

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Waste not, want not Laura Tenison has managed that mystical feat of running a business that’s profitable and responsible. But she’s no green warrior, discovers Hannah Prevett



he name Laura Tenison conjures two thoughts. First is of her £34m childrenswear business, JoJo Maman Bébé, in all its Breton glory. Attention then often turns immediately to her ethical approach to doing business. This is the woman who made her staff peanut butter sandwiches every day for the first two years (until they politely asked her to stop) because she felt guilty not to be paying them more; the woman who chose her new head office in Wales based on its proximity to the homes of her employees; and the woman who set up a charity when she saw a problem she thought she could help fix in Mozambique. Laura Tenison has always been a go-getter. Born in London, her father’s career meant she lived in Romania, Germany and finally Brussels, before he retired when she was eight and the family moved to Abergavenny in Wales. “The problem with growing up in the countryside in effect as a single child [her brothers were at boarding school] is that you become quite bored.” But instead of allowing boredom to settle in, Tenison busied herself selling strawberries to truck drivers at the end of the drive, or making cakes to flog to neighbours. Then she learned to sew. “Although I was never very academic at school, I always

got by with anything that was practical. So I was quite good at art and home economics, and I taught myself to sew by buying second-hand clothes and taking them to pieces, before using the bits as patterns.” By the time she was 14, she was making clothes not just for herself but for friends too. At 16, Tenison moved to London to attend a day school where her passion for fashion grew all the more fervent as she whiled away the days in the Victoria & Albert Museum. And by the time she was studying for her A-levels she had launched a business making men’s clothes out of silk brocades. “I’d gone from funky fashion for my friends on a very ad-hoc basis, more for fun than for money, to launching this company.” Even though clients were limited to those wanting wedding or formal attire, Tenison found herself struggling to keep up with demand. So she decided to outsource some of the work. “I found that it was quite difficult to get the outworkers to take the business as seriously as I did – I was quite happy to work through the night to get an order finished on time.” Results time arrived and Tenison didn’t do as well as her parents had hoped, obtaining just two out of the four A-levels she took. She didn’t want to go to university – nor would it have September 2012

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been possible with her poor results. Her parents encouraged her to take a secretarial course “because they thought my making clothes was nothing more than a hobby and shouldn’t be pursued”. After the course finished, she got a job as a secretary and copy chaser at a publishing company. “I’m not good with authority – something I learned at school – and I’m also not good at spelling. So the two together meant I was a pretty poor secretary all told.” After six months, she quit and upon receipt of a tax rebate she went travelling to Syria, Israel and the Middle East looking at silks. From there she continued on to India, where she ran out of money, so booked herself a one-way flight to Australia. Having refilled the coffers by working Down Under for six months, Tenison made her way back to Blighty on the Trans-Siberian Express days after her 21st birthday. On her return, she looked at all of the silks she’d been sending home throughout her travels and realised she needed a little more experience in fashion if she were to start up a serious menswear business. So she wrote to every British manufacturer/retailer she could think of and Aquascutum gave her a job. “I’d never worked in retail, but the retail director – Margaret King, personal dresser for Margaret Thatcher – took a liking to me, and put me in as an assistant manager.”


“Although I was never very academic at school, I always got by with anything that was practical” Tenison quickly moved through the ranks “irritating the HR department every three month by being moved into bigger and better jobs”. After two years, she decided she’d learned all she could and it was time to refocus on her own venture. But with little money in the bank, she decided to earn herself some quick cash by becoming a French property agent. The idea occurred to her when she was helping a friend buy a house in France. Armed with little but her fluency in French (a result of living in Brussels as a child) and some practical experience (she had recently renovated her London flat), she launched the business – to some raised eyebrows among the local tradesmen. “A 23-year-old woman, I was trying to be a builder in France with a team of 30 middleaged tradesmen. I think there was some gender discrimination,” she recalls. “It took me

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the elite INTERVIEW

quite some time to persuade these old boys that I was serious. But they got there.” Not only did she forge working relationships, but she was well-liked in the village near Brittany because she only used local materials and local labour – as opposed to shipping them in from the UK. “I built up a loyal customer base and had a lovely time wandering around drinking plum brandy with the locals,” Tenison says. But not everyone was happy about her choice

St Thomas’s that she spoke to her ward-mate, a mother of two who was bemoaning the difficulty of buying clothes for her children from her hospital bed. Childrenswear wasn’t an area Tenison had previously given any thought, so she was eager to get out of hospital and see if this new idea had legs. Only she couldn’t. “I was very frustrated because I was lying in bed in hospital when I should have been finishing the handover

of career. “My parents definitely didn’t think I had a proper job. They thought I should come back and settle down. Be sensible,” she says. Settling down a little did seem to be on the cards – at least in her personal life. Tenison married a man she had met on the way to Glastonbury when she was 23, and decided to return to England to live with him and finally start her menswear business. The sale of the property firm in France meant she had £50,000 to get cracking. But on the way to visit lawyers about the deal, she had a serious car crash. Flown back to the UK, she was very ill in hospital for three weeks, having severely damaged her legs, ribs, jaw and cheekbones. It was during her stay in

of the sale of my business. Nor could I work on my new business.” So she discharged herself. “I had one leg in traction up to my thigh, and the other in plaster on my ankle. The consultant said to me if I could stand up without fainting I could go home,” Tenison recalls. “I passed out the first three times I tried to stand, but on the fourth time I managed it.” Not that she was out of the woods yet. “As soon as I got home I realised that he was right and I was wrong – I should never have discharged myself. But I wasn’t going to give in and go back.” Tenison wasn’t going to let immobility get the better of her, and she got straight out in her wheelchair, conducting market research – no mean feat with her mouth wired shut. What

she discovered was that while women were keen for more choice in children’s clothing, what they really wanted was some decent maternity wear. And so JoJo Maman Bébé was launched in 1993 with a 24-page collection of maternity wear and two pages of baby clothes. As with lots of start-ups, those early days were a very hand-to-mouth existence. While the head office and design studio was in London, the warehouse was in Tenison’s native Wales.


“I was very frustrated because I was lying in bed in hospital when I should have been finishing the handover of the sale of my business” September 2012

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the elite INTERVIEW

“It took until we were turning over about £5m before my mother stopped asking when I was going to get a proper job”

“When it comes to warehousing and you have no capital, you see if anyone’s got a spare garage,” she explains. “Our first warehouse was a shed attached to my father’s business in South Wales. After we outgrew that, we took on a wood shed. Then we outgrew that and took on a garage. One time we had a delivery from China and I’d drastically miscalculated how many pallets it was going to be on, and there was nowhere to store them. So my poor parents had to put them in their living room for a week until I’d managed to sort out an alternative solution.” Tenison’s parents may have been supportive in a practical sense, but they still seemed to think her interest in fashion was a phase that would blow over. “It took until we were turning over about £5m before my mother stopped asking when I was going to get a proper job.” These days, business is certainly booming. JoJo Mama Bébé’s head office has remained in Newport ever since the company’s inception, and the company is moving to a shiny new 90,000 sq ft warehouse in December having outgrown the 35,000 sq ft purchased in 2002. And even though the company is now 340-people strong, the small-business feel has remained. Some of Tenison’s first employees are still with the company (the very first is on the board of directors, no less) and all decisions are taken with the team in mind. “One of the priorities when we were looking for our new warehouse was that it must be a commutable distance for our staff,” explains Tenison. “We’ve got an amazing team who have been very loyal. We have three generations of one family working for us, we have husband and wife teams, and we have mothers and sons. I’m very lucky to work with the same people year after year, to actually be very fond of those people and admire the work they do.” As the team has swelled, sales have too. JoJo Mama Bébé will turn over £34m this year. At a time when many retailers are struggling, Tenison puts her business’s success down to a truly multi-channel approach. While the company has had an internet presence more or less from the beginning, it now also has 50 shops nationwide and still produces a ‘big-book’ 200-page catalogue.

What’s more, difficult conditions in the domestic market have made Tenison turn to overseas expansion, and she has begun selling to independent boutiques and department stores around the world. “By hook or by crook, we’re in 52 countries – from New Zealand to several African countries. We’ve also just signed one in Central America,” she adds. Now no longer involved much on the design side, business expansion is just one of the projects taking up the time of the company’s founder. Another is the charity she helped found in Mozambique, called Nema, which supports community health projects and builds schools. She’s also heading up the move to the new warehouse and designing 6,000 sq ft of office space. “I love having a project,” she admits. “And, normally, the tighter the time frame the better; I love to achieve as much as possible in a short time.” This kind of tenacity has helped Tenison build one of the UK’s most recognisable childrenswear brands. And success didn’t come without an element of personal sacrifice, especially where her two teenage sons are concerned: “I’m very lucky that the industry I’m in has allowed me to spend time with my children. I don’t feel I’ve missed out on very much because I was able to juggle.” However, she admits that there were times she had to make difficult decisions. “There have been times when I’ve been on 10-day trips to China and I haven’t been able to be there for my children when I’d have liked to have been. But you have to accept that if you’re going to be determined about any career, whether it’s your own business or working for someone else, you do need to make some sacrifices,” she says. But one sacrifice she’s never made has been on ethics. Tenison is renowned for having embedded the idea of social and environmental responsibility into her business. “My mother was a frugal Scottish woman who brought us up with the motto of ‘waste not, want not’,” recalls Tenison. JoJo Maman Bébé audits all of its own factories and spends more on manufacturing so it can do so in a more environmentally friendly way. “I’m no tree hugger but I absolutely have the in-built ethic that you can do extremely well while doing good,” she says. Amen.


September 2012

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08/08/2012 10:30


All hail the black cab app 22

Having successfully started and grown eCourier, Jay Bregman is back again with his newest venture, taxi app Hailo. Having secured $17m of investment earlier this year, Bregman and his team are surely on the road to success


e’ve all been there: it’s midnight on a Friday night, you’ve just left a boozy work function and are now stood in the street in the pouring rain, trying (in vain) to hail a cab. Your hair’s getting messed up, your Jimmy Choos are getting wet, and your disposition is becoming less sunny by the second. Now imagine a brave new world where you can wait in the warm, dry bar, nursing another vodka and tonic until your taxi arrives outside the door. No more imagination required. Say hello to new taxi app Hailo, which is taking the hassle out of catching cabs in cities all around the world by connecting fareless cabbies with cabless punters. Simple. It’s such an obvious problem, it seems unfathomable that nobody has managed to solve it before now. And it’s not because the motivation isn’t there. Many have come, seen and failed to conquer the taxi app market. But then they don’t have Hailo CEO Jay Bregman’s stirling credentials. Technology has been part of his life for as long as Jay Bregman can remember. Growing September 2012

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z Company CV

Name: Hailo Founded by: Jay Bregman, Caspar Woolley and Ron Zeghibe Founded in: 2010 Team: 85

up in Tenafly, New Jersey, his surgeon father impressed upon him from a young age the importance of emergent technologies. “My father recognised before most people in the world that technology was going to become very important in all walks of life and it was going to have really pervasive effects on society,” he explains. As a result, Bregman’s father always made sure he had the latest computer equipment. “I had the Commodore 64 and Commodore 128 before most people. I also had one of the first Windows computers,” he recalls. What began as a hobby as a child became a more serious pursuit at university when he took his degree in philosophy in computing at Ivy League college Dartmouth. The technology whizzkid was at university between 1997 and 2001, a golden age of internet start-ups. “I was watching the birth of all these great companies such as eBay, Amazon and Google and I kind of felt like I was missing out on the party. By the time I graduated in 2001, the bubble had burst and the whole market had fallen apart.” At this time, the urge to start his own business became stronger, but doing what? The following year, Bregman began a course in entrepreneurship at the LSE and reconnected with Tom Allason, an English friend he’d met at Dartmouth. After noting inefficiencies in the courier industry in the UK, together they conceived the idea for eCourier, a same-day delivery service that would be data-driven, thus ensuring a better service was delivered to customers. At the heart of the operation is ‘Larry’, a real-time optimisation algorithm that knows the location of every eCourier. When a job is logged, in a split-second Larry selects the driver that is the most well-suited to the job, based on location, traffic conditions, customer requirements and so on. eCourier quickly gained momentum – and many an accolade. It won awards for its very clever proprietary technology, and was voted London’s most inspirational business by the Evening Standard in 2007. By the time Bregman left the business in 2010, it was turning over more than £6m and was profitable. “I had an itch to start another business,” he explains. “It had become clear to me that the business was maturing and I wasn’t going to be able to do as much of the fun and crazy stuff as I had at the beginning.” It was almost natural that Bregman turned his attention to transporting people rather than things. “In lots of ways, taxis are the grown-up big brother to the same-day delivery market,” he says.


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“It has a lot of the same dynamics. And what attracted me was the same thing as with eCourier – the prospect of solving the problem of how fundamentally inefficient it is.” It is indeed inefficient. Hailo’s own figures show that black cab drivers spend between 30% and 50% of their time desperately looking for fares. “Whereas on the other side of the coin, consumers are finding it very difficult to get taxis,” adds Bregman. But it is more than simply marrying demand with supply: “The thing I knew from my eCourier days was creating the technology is one thing; creating the intersection of technology and humanity to get a service and a network that actually functions, given all the real-world conditions that you find on the streets of major cities, is really hard.” And Bregman wasn’t the only person who was keen to solve this problem. He assembled some of the old eCourier team, including former COO Caspar Woolley, and Ron Zeghibe joined the fold too. But it quickly became apparent that the team were going to need input from the cabbie community if they were to build a service that would become truly indispensible. A serendipitous meeting with three black cab drivers – Russell Hall, Gary Jackson and Terry Runham – at a café in Charlotte Street was the beginning of a golden partnership. “It became very clear to us that these were the three guys who were going to complement the three of us; you had three people who take cabs and three people who drive cabs. Each of whom is contributing their knowledge about their side of the market to develop something that really works for both,” recalls Bregman. It proved to be a fruitful relationship for all parties: Hall, Jackson and Runham are partners in the business. Hailo has a product that is desirable for drivers and customers and is already being used by 6,000 drivers in London and 2,200 in Dublin – and counting – with Chicago, Boston and New York to come online by the end of the year. Expansion at this rate doesn’t come cheap, which is why Hailo raised some money in March this year: Bregman and his team secured a whopping $17m in a series-A round of funding led by celebrated VC firm Accell Partners – one of the largest European first rounds in recent times. Bregman says Hailo’s popularity is in a large part due to the fact it’s designed by drivers, for drivers. And this is a model that is replicated in every city – so when a new town comes online, Hailo will have evangelists to talk to and essentially sell the service to fellow cabbies. But, firstly, he’ll hire a really strong general manager who then helps hire three

taxi drivers. There will be some localised customer support and marketing capabilities, but everything else is managed centrally from London. This includes the technology, which is localised for each city based on what the taxi drivers and the local general manager thinks is necessary. Then the app is deployed to drivers to build up the network. Once it reaches the critical mass point, Hailo is launched to customers. Hey presto. The ease at which Hailo can be rolled out across the world is both a blessing and a curse, says Bregman. “The biggest challenge in a business like this is getting the balance right between pushing down on the accelerator and growing very quickly, without overstretching yourself and potentially tripping yourself up.” This means that Bregman has been in the unenviable position of having to say no to people asking for their city to be next on the Hailo global roadmap. “We’ve had to be very disciplined in choosing the right opportunities,” he says. At the helm of it all, Bregman certainly seems to be doing a sterling job of steering things in the right direction. And the response from taxi drivers has been overwhelmingly positive. Modestly, Bregman attributes Hailo’s success not to his individual efforts, but those of the team. “The number one thing is having a really exceptional team of people, everywhere,” he explains. “The original idea is important, but it evolves through the people who get involved in the business. This is why you have to be uncompromising and only hire the absolute best people – whether it’s a customer service rep or a CTO.”

Hailo in practice

The cabbie’s story: Neil Chadwick

Hailo is another pair of eyes for cab drivers – and sometimes we need all the help we can get. Hailo just gives you another option. One of the best things about the app is that when you get jobs out to the outskirts of London, you tend to get jobs back in. Whereas, before, you were driving back in empty. So this way you double up on takings. It can be pretty hard to convince taxi drivers to move with the times. Some are stuck in their ways, and a lot of older drivers haven’t got the phones or they’re afraid of the technology. But once you show them how to do it, they come back within a week and say it’s a breeze. It’s definitely a generational thing – the young ones love it. I get a lot more jobs in the morning through Hailo. A lot of customers call from indoors to be picked up. I should imagine this will only increase as the bad weather sets in again. It’s fair enough really: why stand on a street when you can wait indoors? September 2012

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01/09/2012 14:49

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31/08/2012 8/31/2012 4:07:06 16:41 PM




The life and times of UK manufacturing September 2012

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Along with the financial services sector and retail, manufacturing was one of the hardest hit areas during the downturn. The green shoots of recovery are peeking out – but things may get worse before they get better…


K manufacturing is a sector beset with contradictions. One minute the forecast for growth is being downgraded to a contraction of 0.6%; the next Jaguar Land Rover announces that it is moving to 24-hour production to keep pace with demand, meaning a further 1,000 jobs at its Merseyside factory. And an increasing trend for UK firms to reject the offshore outsourcing models of the last decade to return production to Blighty’s shores adds to a rosy picture of UK manufacturing. But is it an accurate one? There’s no denying that the uncertainty generated by tensions in the Eurozone has had a profound effect on commerce in the UK across the board – in terms of confidence, future outlook and, vitally, business investment. It seems reasonable, then – if unfortunate – that while the UK economy is expected to grow by 0.2% this year, manufacturing will shrink slightly. The manufacturers’ organisation EEF says that output in the first half of the year was particularly weak, with its forecast showing a contraction in the first six months. “There is no doubt that conditions in the immediate term have become much more uncertain,” says Mark Swift, head of communications at the EEF. “The ongoing Eurozone crisis has knocked confidence sideways in Europe and is also having a knock-on effect elsewhere with growth in countries such as China slowing,” he continues. However, the subdued nature of things shouldn’t last too long, he reckons. “The medium- to long-term prospects remain

very positive for UK manufacturers as prospects for growth in the majority of emerging markets, including the Middle East and South America, look very strong.” The stats back this up too: the EEF’s figures show that manufacturing will be up to a more respectable 2.1% next year. And it makes sense that the appetite for British-made goods will continue: in the past five years, exports to China are up 185%, to Brazil up 172% and Russia 145%. This is far beyond the overall increase of 34%. Currently, one of the hottest areas of development is in green industries. Not only are manufacturers taking their environmental responsibilities more seriously – two-thirds are either currently involved with, or plan to be involved with, the development of low-carbon technologies – but companies with a focus on making the world a cleaner, greener place seem to be thriving. One such company is Closed Loop Recycling in Dagenham. Set up by Chris Dow and Rob Pascoe, it began operations in 2008 after a long, hard slog to secure the £17.5m needed to build the factory. Closed Loop is the UK’s first ever plastic bottle recycling plant – after it cleans and breaks down the bottles, they come out the other end as food-grade recycled PET, which is then sold on to companies such as Marks & Spencer and Coca Cola. “We’re putting everything in place to give ourselves the best chance of recovery,” says MD Dow. “It’s pretty hard to be in the UK right now and not feel the optimism evoked by the Olympics.” The Olympics are one of the raisons d’être for Closed Loop: one of its initial aims was to make London 2012 the

greenest Games ever. And the sports spectacle has given business a boost in more than one way: “The great thing about the Games was the learning experience. It was widely covered and the recycling facilities at the venues were excellent; this adds up to the possibility of making the Games a stepping stone to a higher recycling rate.” What’s more, Deputy Prime Minister Nick Clegg publicly praised Closed Loop as part of the Olympic Games legacy. The company is already undergoing another £12m expansion that will see it increase its plastics sorting capacity to more than 100,000 tonnes per year. Manufacturing is getting a boost in other ways too. For myriad reasons, there is an increasing number of UK businesses that are opting to move production to Blighty’s shores. For example, Rob Law, inventor and founder of kids’ ride-on luggage-maker Trunki (see case study two), decided to move production from China to Devon when the benefits of manufacturing in the Middle East became negligible. Trunki’s story is indicative of a wider trend says the EEF’s Swift. “There are a variety of reasons [for the shift]. These include the fact the cost differential with places such as China is not as great as it once was, the cost of transport has increased, tougher regulations in areas such as environmental legislation are placing an onus on suppliers, which some emerging economies cannot meet, plus there are also now increasing demands from major manufacturers to have their suppliers close by,” Swift explains. All things considered, the outlook isn’t too shabby at all. The overall message seems to be that things may get worse before they get better – but what’s important is that they will indeed get better. The EEF says there has never been a more important time to keep the spotlight on UK manufacturing. And, of course, it’s right. The success of the internationally respected ‘Made in Britain’ label is vital to re-establishing stability in the UK economy.


“It’s pretty hard to be in the UK right now and not feel the optimism evoked by the Olympics”

September 2012

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Case study 1 Cambridge Satchel Company Founded by Julie Deane From the very beginning, I was adamant that our bags had to be manufactured in the UK. Because, to me, a school satchel is a very British thing. And there were other reasons, too. From a purely practical point of view, I didn’t have a background in manufacturing or retailing. It’s therefore a lot easier for me to sit down and talk to someone over a desk and to completely understand them with no language barrier. The other great thing about working with manufacturers in the UK has been that in the early days, I could order just six of a certain type or design. They never said it has to be 50 or 100. That means I could keep investing as I sold and gradually build it up.


“We know the people who have done every single process along the production line”

I think people like to buy British products, too. They gain a sense that they are helping with the economic recovery. I certainly look at where something has been made when I buy it. There’s something really nice about thinking, ‘I’m investing in something that is going to create more jobs in this country.’ The money we spend on products made overseas is like a vote for Asian manufacturing – so we can’t be

surprised when factories close and people are out of work. People aren’t that naive. The other thing is that we have such an incredible connection with the product. When the bags are delivered to our Cambridge headquarters we look at them, and we know the people who have done every single process along the production line. There’s something very satisfying about that.

Case study 2 Trunki Founded by Rob Law When I was writing my business plan in 2005, we were getting costs from Eastern Europe that were the same as we needed to sell the products at. It was much cheaper to make Trunkis in the Far East, so that’s where we set up manufacturing. Then, 18 months ago, there were quite a lot of changes in the business conditions. The cost of shopping was going through the roof, and with Trunki being quite a large product, landing costs were very high too. Manufacturing over in the Far East meant we’d need to put in large orders for peak seasons, such as summer and Christmas, 128 days in advance of when we needed them, which ties up a lot of our cost flow. So factoring in these issues, I thought it would be worth looking again at UK production. We found a great company down in south-west England called Inject

Plastics, and the first UK Trunkis rolled off the production line on 6 May this year – which was also our sixth birthday. We’ve never had a problem with quality, but the factory is certainly more accessible now – our design teams can just pop down there rather than taking 24 hours to travel to China. This makes us much more dynamic and flexible in adapting to our changing customer needs. So, if there is a particular trend – say for the Olympic-special Trunkis – we could just make them. If we’d still been in China we would have had to bring over a shed-load of containers and then just pray to God that they were going to sell. There’s a real trend emerging around onshoring. I think for the boom years it was all about cost – trying to get the cheapest possible product. That has changed. September 2012

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04/08/2012 16:20 04/07/2012 10:20:23


“You can’t compare Silicon Valley to any other place in the world” 30

The start-up finance arena is so fast-moving it’s difficult to keep tabs on. Good job Elite Business has experts such as Oscar Jazdowski of Silicon Valley Bank to keep us up-todate



here has been a lot of change in the UK start-up scene in the last 12 months or so. An increasingly fertile ground, it has been attracting talent and entrepreneurs from all over the world to come and try their luck. Similarly, the finance landscape has evolved too, with incubators sprouting up almost daily and the proliferation of crowdfunding companies such as Crowdcube and Funding Circle. But one bank that has matured and grown with the market is Silicon Valley Bank (SVB). Hannah Prevett spoke to head of origination Oscar Jazdowski about his predictions for the coming years. September 2012

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“I’ve actually spoken to US companies from Silicon Valley who are looking to open up in London because we have the skills”

Elite Business: What’s new in the world of SVB? Oscar Jazdowski: This year, SVB has grown up and became a real bank. [It was granted its branch licence by the FSA in April this year.] It has fit in really well with what’s happening with Silicon Roundabout and Tech City, and we’ve received a really warm reception. Overall, I think the technology environment seems to be quite robust. One of the latest development seems to be the growth of incubators here in the UK. Telefonica, for example, has established incubators around the world and recently announced plans for its Wayra Academy, which will open its doors in London next May. These initiatives that really help tech start-ups get off the ground are what’s really underpinning a lot of the continued activity in the technology sector. EB: There are undoubtedly comparisons drawn between Silicon Valley and Silicon Roundabout. How do you think we compare in the UK? OJ: There’s no competition because in many ways you can’t compare Silicon Valley to any other region of the world. There is no other place on this planet that is quite like it. But the eco-systems that have been created in the UK around Silicon Roundabout and Cambridge, Oxford etc are unique and are evolving and developing in their own way. What’s more, London has its own advantages: today in the technology world, it isn’t necessarily the lack of capital that’s problematic for start-ups, it’s the lack of talent. And I’ve actually spoken to US companies from the Valley who are looking to open up in London because we have the skills, such as HTML5 developers. In London we also have a very strong media and marketing background, because some of the largest advertising companies in the world are here. We now see a lot of customers from the US and elsewhere looking at London as one of the digital media capitals of the world. EB: What’s it like for entrepreneurs starting a business in today’s climate? OJ: There’s not been a better time to start a company than today. That’s driven by a number of factors. Firstly, it’s much cheaper than ever before – you can rent server capacity, there’s cloud storage (which is very cheap and scaleable), open-source software,

and you’ve also got platforms like Facebook, which gives you access to millions of potential customers. Never in the history of mankind has that situation existed where you can start a company really cheaply and also be able to access a huge number of customers. That’s why the applications market has become such a phenomenon globally. On the funding side, the other trend we’ve seen evolve most over the last 12 months is crowdfunding. I think crowdfunding is the new seed, and potentially series-A, finance. We experienced this first in Silicon Valley and we’re seeing a lot of traction here too. There are entrepreneurs in the Valley who went out to raise $750,000 and they ended up raising $1.5m in six weeks. EB: What are the hot areas of innovation at the moment? OJ: Our model hasn’t really changed. We’ll work with entrepreneurs who have raised money from institutional VC firms. As for the sectors that are important right now, we are living today in a mobile revolution – we’ll look back at these days and say this was the period when everything went mobile. Everything mobile continues to be very hot, including anything relating to location services, mobile advertising and so on. Also, we’re also living in the age of big data. Companies have so much data they need to slice and dice and analyse in realtime. And the third area of interest is cloud. Everything is moving to the cloud, thus enabling entrepreneurs to redefine how they build their businesses.


EB: SVB recently pledged to lend $100m to Irish companies in the next five years. Why the interest in the Emerald Isle? OJ: We look at Ireland as having a very positive future in technology. Google has got 2,500 people in Dublin, Zynger is there and PayPal has just opened a centre of technology. There are a lot of big tech companies in Ireland today, originally driven a little bit by tax incentive, but also the talent – there are well-educated, English-speaking, smart people there. And what’s starting to happen, just like in Silicon Valley and in London, is that individuals leave and say: “I’m going to start up my own company.” We’re already starting to see new start-up activity spawning in Dublin. The future is bright.

September 2012

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01/09/2012 12:23


Cut costs – and conserve cashflow Businesses have a lot on their plate at the moment, so cost cutting can slip down the agenda. Clive Lewis, ICAEW’s head of enterprise is here to explain how to make trimming the fat less painful



nflation is just one of a number of pressure points currently facing businesses, especially small- to mediumsized enterprises (SMEs). Reigning in capital expenditure is one measure that is within a business’s control and can make a difference between a profit and a loss. But it’s not always clear how to put this into practice and many companies make silly mistakes. Businesses need to be on their metal to conserve cash and cut costs. This will stand them in good stead when recovery becomes more firmly established and will help them take advantage of any opportunities that arise. Avoid common mistakes that businesses make when trying to cut costs whilst preserving cash flow: 1. Renegotiate with your suppliers If you haven’t reviewed terms with your suppliers in a while, then take a look at what they’re providing you and if this still meets your needs. Then approach them with a deal you feel is more suitable. 2. Review utility costs Gas, electricity and water bills are some of the highest controllable bills your business will pay. Be sure to regularly shop around for the cheapest supplier and avoid running month to month on estimated meter readings. Also, check if you are owed a rebate. 3. Rule out non-essential business travel A large portion of business travel is out of obligation rather than necessity. Be open with your clients and establish if your attendance in person is really required. Suggest alternative

methods of communication e.g. telephone or video conferencing. 4. Examine expenses claims carefully Review all expenses claims by staff and reject those that are not really necessary. Then meet with them and explain the position. 5. Look at the cost of debt Often expensive and excessive debt is what runs companies into trouble. Get your accounts settled and try to pay off some of that debt. Shop around with other banks and see if they are interested in taking over the loan. 6. Utilise tax allowances Make sure you’re paying the right amount of tax and that you have claimed any tax allowances available to you including capital expenditure, home working, personal allowances and entrepreneurs’ relief.

additional cash. Chances are you may have double paid at least one invoice during recent months. Plus, you might discover payments that are too high or that should have been axed already. 10. Take professional advice Seek professional advice on appropriate cost savings for your business. Through the ICAEW Business Advice Service you can have an initial meeting with on of our chartered accountants completely free of charge. Visit for further details.

7. Follow up on monies owed Chasing the settlement of an account of a long standing client can be awkward. However, in failing to collect your debts you are putting your own company at risk. Manage your cash flow effectively by chasing up monies owed. 8. Look after prompt payers Your customers can shop around too so try offering a discount to customers who pay on time or agree to pay by standing order. Better still; cover the cost of the discount by factoring it into your prices. You’ll save time, money and the stress of chasing late payments. 9. Keep on top of payments Going through your payments could uncover September 2012

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03/08/2012 15:21 14:31 19/07/2012

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03/09/2012 09:42


A share in success



While giving away equity at cut-rate prices might seem like the last thing a business would want to do, share incentive schemes are one way of motivating staff and releasing capital


hare-incentive schemes can work for all sizes of businesses. However, sometimes for smaller ventures it can pay to be a bit more creative. We’ve heard of shareincentive schemes involving pies and beers, but sometimes it’s better to look at tried-andtested formats to sort the wheat from the chaff. There can be no one-size-fits-all approach to incentive schemes, so they inevitably vary from company to company. One of the classic examples is that of John Lewis which, by trading as a partnership, has done away with traditional share holders in favour of direct incentives. As with any company that operates incentive schemes, John Lewis is entitled to dictate certain terms; the standard scheme

doesn’t allow partners to hold onto the shares past the end of the tax year, instead paying out all of the dividends at its close. Despite this, partners maintain a voice in the company and the John Lewis model perhaps features share incentives at their most effective. So how do they work? Share incentives come in four basic types. First of all are free shares. Free shares are given by an employer, often in recognition of high performance. A business can award £3,000-worth of free shares to an employee in any given tax year under a Revenue-approved Share Incentive Plan (SIP) without any initial tax charge. Another possibility under an SIP is partnership shares and, as the name

September 2012

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suggests, these reflect an investment on the part of the employee. An employee can take 10% of their total salary for the year in shares up to a maximum value of £125 a month. As this investment comes before tax, long-term investors can use this to save tax and national insurance contributions on a portion of their income. These are closely linked in with matching shares, which are like-for-like shares awarded by a company; a business can award up to two shares for every one that an employee buys with their gross income. Finally, as shareholders under an SIP, employees are entitled to dividends and, if the employee chooses, the company can award these as dividend shares, up to a maximum value of £1,500 a year. Again this offers tax benefits over a standard dividend payout depending on the length of time the member of staff holds onto the shares. As already mentioned, all purchases through an SIP come before tax, meaning you aren’t liable to pay tax when first obtaining them. Whether you have to pay tax and National Insurance contributions on the ultimate value depends on how long you have held the shares – for free, partnership and matching shares, if you remove shares from the plan in the first three years after purchase you will be obliged to pay income tax on their value at exit. If you remove them between three and five years you will be required to pay tax on the lower of their value at purchase and their value at exit – this means that if the share value has decreased since purchase you won’t be penalised in terms of your tax. But why offer incentive schemes? Because there is a mutual benefit. It allows employees valuable tax breaks while offering them a good reason to stay invested in a company. Aside from the fact that holding onto the shares for over five years offers the best value

return, in times of growth they will have a very strong reason to remain with your company as their shares will be increasing in value. From your perspective, you are freeing up capital in the short-term and also saving your National Insurance contributions; this can prove invaluable. As David Reuben, share plans director at Postlethwaite & Co, says: “If you would be paying out £100,000 in bonuses but make allocations under an SIP instead, it has initially saved the employer £100,000 plus National Insurance.” Obviously, there are limits, however. Given that you are effectively offering cheap shares to your employees, there are only so many shares you can give out without to some extent affecting your stock. “It saves on cash but it’s paid for by all of the shareholders essentially by dilution,” Reuben remarks. However, with most companies, it will be generally understood by investors that a certain proportion of the shares will be used for employee incentives. “As long as you don’t go over what’s understood to be the limit, which for listed companies is about 10% over a 10-year period, then it shouldn’t reduce the value of the shares,” Unfortunately, not all businesses utilise incentives in the best way. An Elite source explains: “Working at a bank in the autumn of 2008 was hardly the safest bet, employmentwise,” he explains. “The credit crunch meant none of us felt that secure in our jobs.” So when management came around and suggested staff might like to take shares over a proportion of their wages it’s not surprising that nobody exactly bit their hand off to take the offer. “They were asking us to take less money when we needed it most and take share options that were looking very shaky just so they could shore up against their financial problems,” our source concludes. An example of how not to do it, perhaps.


There are only so many shares you can give out without to some extent affecting your stock

September 2012

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Business Coaching

Business Growth Strategies

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Training ourselves out of the recession It is a well-known fact that there is a high level of unemployment in the United Kingdom, triggered by the global financial crisis of which began in 2007. The recession has taken a toll on the job prospects, skills and training of the working-age population in the country


he overall unemployment rate stands at 8.1% – the highest since 1996. And joblessness is even worse among the young: the rate of unemployment among 16-24 year olds, currently stands at 23% in Britain. This could spell catastrophe for coffers of UK government: recent reports suggest that the widespread long-term unemployment rate in the UK could result in huge economic and social costs. In the recent annual CIPD Learning and Talent Development survey, it was highlighted that in 2011, UK organisations became accustomed to reports constantly revising economic growth downwards and forecasting a bleak outlook for 2012. The CIPD highlighted that only a minority (10%) report that their economic/ funding circumstances have improved over the past 12 months. The CIPD report continues to paint a bleak picture of training budgets. Of the 601 organisations polled, 78% of managers said they had less money to spend on training in 2011 than the previous year – and the same percentage believed this budget would fall further in 2012. Matching learning with the way we work Currently, the median annual training budget

per employee was £276, less than last year (£350). The median number of training hours employees receive per year was 24, again a reduction on last year. For the first time in modern history, we have four generations of workers in the workplace, which we identified as: Silent Generation - (born 1925 – 1945) Baby Boomers - (born 1946 – 1964) Gen X - (born 1965 – 1976) Millennials - (born 1977 – 2000) Four generations in the mix at the same time generates some interesting dynamics, meaning we have to identify and deal with varied technologies, modalities and delivery methods that address the preferences of these different generations. Added to which, technology has massively changed the way in which we live, work and play. So what does this all mean? For starters, it means the way we work has changed; we are now moving from being an individual, to being a part of a network. We are moving from the physical world to the digital world. Therefore it is also time to match the way we learn to the way we work. At Cetas Kinetic, we have developed a flexible


solution that every business needs to know about. As new technology is introduced and adopted, it immediately becomes integrated with training methods previously utilised. This is called blended learning delivery, demonstrated by the figure above. Our open courses, are delivered series of bitesized units and consist of: • One 2-hour instructor-led online training session • One follow up refresh session with Q&A section • Weekly rapid learning modules delivered to your inbox weekly • Membership site with further resources and materials • Managed Facebook group for networking and discussion Our pricing structure is as follows: 1 seat costs £97 + VAT 3 seats cost £197 + VAT 5 seats cost £297 + VAT 10 seats costs £597 + VAT 15 seats costs £897 + VAT For outstanding learning and business growth strategies, that will drive your business forward, contact us on 02083975556 or visit

September 2012

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This little product went to market... For many growing businesses, getting products on the shelves of the supermarkets remains the gold standard of mass distribution. The problem is ‘the big four’ can be notoriously difficult to deal with. Here’s the Elite guide to getting ready for market




ith the internet offering such easy and direct distribution, it can seem like more hassle than it’s worth getting your products into the supermarket. But when your enterprise is looking to scale, you’d be a fool to ignore this as a very valid avenue of distribution. First of all, it’s worth bearing in mind that as far as supermarkets go a little originality goes a long way. Helen McAvoy, sales and operations director of frozen cocktail maker Rocktails, believes it’s a vital part of getting your product on the shelves. “Everyone wants their customer to have a unique experience across the board,” she remarks. “It doesn’t make a difference whether you sell cars or cocktails.” Sometimes it’s just built into your idea from the get-go. Bulldog, the producer of men’s natural grooming products, found its concept simply served a demand that wasn’t being met. When co-founder Simon Duffy was browsing the beauty aisle, he noticed there were no options for men who wanted natural grooming products. “They had heaps of brands focused on women that offered this natural benefit,” he says. “But there was just nothing there for men.”

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For some ventures, however, this development is much less a spontaneous genesis and much more evolutionary. Rocktails’ drinks have taken the market by storm. But this doesn’t mean that the serve-at-home market was their original focus, as McAvoy reveals. “What we actually started with was an idea to do high-service, high-footfall bars and a cocktail drink for those,” she comments. Carrying out extensive research, they found that demand was limited, with bars closing on a daily basis. But there was little provision for at-home cocktail drinkers. “At parties, catering events, if you were having a wedding in a marquee or if you were going to a picnic – it wasn’t very easy for people to recreate cocktails,” she continues. Uniqueness is always important. Emma Jones, co-founder of StartUp Britain and founder of Enterprise Nation, remarks,

“You probably don’t want too much of what’s already in the shop.” StartUp Britain’s recent scheme PopUp fixes entrepreneurs up with premises to showcase their wares: they’ve had everything from Cake Follies’ burlesque-themed cakes to Little Babas’ animal outfits for kids. “I think this message is really getting out into the market now – knowing your audience, creating something that’s off-the-peg and unusual,” she concludes. Testing the product on the market can also prove invaluable. To get an impression of its marketability, Rocktails took its product on a tour of the UK and ran focus groups. “We had a really good uptake from people who were asking, ‘Where can I buy it?’, ‘How can I buy it?’ and we were saying, ‘Well, we’re not actually available – the product isn’t even officially launched’,” McAvoy recalls. “That was a really good sign.”

Case study:


Higgedy Founded by Camilla Stephens and James Footit We didn’t know that there was necessarily a demand for our product. It was all about what we would like or our friends or mums would buy. We’d seen lots of product development in other places such as in chocolate, coffee, crisps, ice cream; there were some really beautiful brands available at the higher end of the market. Pies seemed to be a really neglected area. Effectively, we started making pies in our kitchen. Then we got a bigger kitchen and a bigger kitchen. We just got started and supplied coffee shops, delis, pubs, garden centres and gastropubs – effectively, we really learned about food manufacturing during that time. Lots of food companies work with manufacturing partners and that’s the way they operate. We found early on that for us it was an important part of what we did that we made what we did. Our product was quite homely. It’s become

a core element of our business, of our brand, and we really love the fact that we do the making side of things. We got ourselves into position and then we had an opportunity to go into Sainsbury’s. That was actually a government scheme called Supply Something New. We got an opportunity to go in and were actually able to present to some quite senior people at Sainsbury’s, some of the directors. And they decided to give us a chance. That was our moment. We were quite clear about why our brand was different. One of the things that we talked a lot about was we felt that we could bring new customers into the category we were in. Our brand was in an area that was quite masculine and male; we decided that we would have our brand appeal more to a feminine customer. That was one of our angles, which was different but, as it turned out, correct.

“Our brand was in an area that was quite masculine and male; we decided that we would have our brand appeal more to a feminine customer”

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As with Higgidy, our case study, many ventures trade for years before taking the next step and pitching to supermarkets. Duffy says many businesses like to grow into it. “‘I’ll start off small, perhaps I’ll sell online, perhaps I’ll sell in a few independents’, and it’ll grow into this phase where they want to launch with a big supermarket,” he says. But for Bulldog it was never the intention to take that approach. Duffy continues: “We decided that we wanted to do that straight away.” Jones also feels that it is important to know what the best approach is for your own venture. “You really do have to know and feel that this is the right move for your business to scale up,” she says. As an example,

pitching a bottle of water or something really generic,” McAvoy remarks. “Our brand itself is memorable – people tend to remember when they’ve seen it.” Not to say that even a successful pitch won’t come with recommendations on how to improve the product. “They did come with some feedback, in terms of the packaging, the messaging and the shelf-ready packs,” says McAvoy. Products can also be assessed as part of a range view. Here, buyers take selections of existing products and potential products in the category and compare them visually as well as comparing cost, marketability and a range of other factors. At this point, the producers have zero input. Duffy admits it’s

“They have not been able to guarantee us that anyone will win a contract, just because they can’t do that,” she says. “What they have said is they will give feedback on things like ‘You could have done that better’, ‘We like your product but maybe this…’ or ‘You should really think about your pricing’.” A successful pitch isn’t the end of the story, however. There’s one big challenge that comes after that it really pays not to underestimate: scaling up to meet demand. McAvoy found it can be really tough to find a way to upscale production without huge amounts of revenue. “The [manufacturers] were saying, ‘It’s not worth our while’,” she recalls. “For them 10,000 units is a drop in the ocean – they

Bulldog, the producer of men’s natural grooming products, found its concept simply served a demand that wasn’t being met


she mentions the famous case of William Chase, the founder of Tyrell’s Chips who turned down distribution in Tesco as he felt their mass production would weaken the vision he had for his brand. Jones posits: “It’s a really intriguing question for any business: ‘Do I really want that contract?’” Once you’ve made your decision and prepared yourself, the next step is the pitch itself. This is where preparation and a solid product really pays off. Rocktails found the strength of its concept paid dividends. “It was relatively easy for us because we have such a unique product, so it wasn’t like we were

an incredibly nerve-wracking time. “It’s a bit like leaving your kids at the school gates the first time: you don’t quite know whether they’ll get on with the other kids.” Sometimes, though, this is a daunting step to take without any prior experience. Fortunately, help is at hand. Part of Jones’s role includes running StartUp Britain’s scheme PitchUp, which puts entrepreneurs in contact with buyers at John Lewis. “It’s an easy access route in to the buyers that you need to meet,” she explains. Not only that but it’s an excellent chance for enterprises to gain valuable experience and feedback.

wanted 100,000 units and we couldn’t start with that.” Fortunately, they eventually managed to secure a local manufacturer that was just beginning to expand into food and drink and that was able to start with the kind of limited run they needed. Duffy remembers the moment the Sainsbury’s buyer rang to give him the news. “He said: ‘Congratulations guys! We had a really good result in the range view and we’re going to launch nationwide in 350-plus stores’,” he recalls. “And I was just elated. For about ten seconds I was like ‘Wow!’ But then we had to figure out how to make it work.” September 2012

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Discounting principle Promotions and discounts are ubiquitous in the retail and customer-facing industries. More cynical perceptions of these offers see them simply as a way to guarantee more footfall or to give a temporary boost to sales. But, in fact, promotions are a vital tool for breeding brand loyalty




he name Aimia might not mean much to the average consumer. But if you tell someone that it is the consumer analytics and brand loyalty expert responsible for the grand seigneur of loyalty programmes, the Nectar scheme, suddenly the effect will be markedly different. To say they know promotions is like saying Google knows the internet. “In any business the 80/20 rule will hold, where 20% of your customers generate 80% of the value or the profit,” explains Dave Hamilton, director at Aimia. “Why wouldn’t a business want to know all about that 20% of customers? That’s really where we start.” Hamilton feels clear analysis of your best customers is essential. “It provides routes to better know customers – know their habits, know their lifestyles, know their product preferences.” He offers a practical example: if one of your best customers has bought a garden shed, you can infer they have a garden or at least an outdoor space. With that knowledge you can offer them incentives on tools, garden furniture or creosote. He elaborates: “If you’ve got that understanding of customers then you can tailor your offer to them and make sure any discount you’re applying or any promotion is direct to your most valuable shoppers.” To adopt a metaphor, untargeted discount schemes – across-the-board offers such as buy-one-get-one-free, three-for-two, 50% off – are the carpet bombing of the promotions world. They will have a significant effect short-term on the ongoing campaign. But if you really want a strategic advantage, knowing your customers and being able to offer informed tactical strikes – specific reductions based on their shopping habits –

their needs and are able to provide the best value deals on the items they need, when they need them. He continues: “If you can better provide them with something that’s relevant to them, that will stimulate them to think: ‘Actually, this company really knows me and understands me – I’d be inclined to visit them again’.” How about the internet though? What effect is it having on how companies are offering promotions to their loyal customers? Hamilton is unequivocal in his response. “We’re pretty much seeing a big tidal change coming our way with digital technologies,” he says. There’s no denying the huge effect social networking and mobile devices are having on the field, giving unprecedented levels of direct contact with the consumer. But he also feels that with great power comes great responsibility. “Marketing using those channels one has to be quite responsible,” he explains. “You don’t want to irritate customers and don’t want to dilute your brand message by bombarding customers through too many

“If you’ve got that understanding of customers then you can tailor your offer to your most valuable shoppers” then the success of your campaign is almost guaranteed. But to make the most of a promotion or discount scheme you really need to understand why you’re doing it. “Long-term loyalty is what loyalty programmes and customer analysis are all about,” Hamilton says. Short-term profit factors much lower than letting a customer know you understand

channels or with too many offers on the one channel.” Engaging with your best customers is an essential part of growing your brand. What they will value most is knowing that you’re taking their needs into account. Which is why promotions carefully catered to them are vital in producing true loyalty among your customer base. September 2012

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Pitch with perfection 48

Standing in front of people to try to flog your wares is scary enough at the best of times. Follow these simple tips to ensure you leave your audience wanting more

WORDS: Paul Boross


ne of the most daunting things any professional has to do is deliver a pitch. Not only does it involve speaking in front of people, which is nervewracking enough, it also puts you under personal and professional scrutiny. And, of course, if it doesn’t work out you’ve lost business. Yet it can just as easily be an engaging, collaborative and fun way to win business and build that all-important network of professional contacts. The ‘elevator pitch’ is a perfect example of this. What most people try to do is cram their entire product story into 30 seconds, thinking that if they say as many words as they can, the client is bound to remember. Actually, just think how you feel when a friend starts telling you something without first introducing what they’re going to say. You might feel confused, disoriented, even irritated, to the point that you have to stop them and ask, “Why are you telling me this?” September 2012

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A fear of public speaking is one of the most common problems in the world of business

An elevator pitch needs to be a trailer for the main feature. The purpose of the elevator pitch isn’t to convince the client to buy from you, it’s to tease the client and have them feel that it’s worth their time to meet with you. Save your main pitch for that meeting. Following simple tips like this actually makes all those nerves drift away, because they give you something very simple to focus on. Here’s seven secrets to help you be ‘pitch perfect’. Secret 1: It’s all about them

Apparently, a fear of public speaking is one of the most common problems in the world of business. According to one survey, people fear it more than death. There are many, many techniques that you can learn to help you overcome any fear of presenting, but you don’t need any of them. You just need to master the first secret. Think about the worst presentation you have ever seen. Did you find the presenter just read from the slides, didn’t interact with the audience and droned on even though no-one was listening? Did the presenter appear ‘self-conscious’? All these problems arise from the same source, and the first and most fundamental mistake that people make when pitching is that they focus on themselves instead of the audience.

Secret 2: By the time you start, it’s already too late

When does the pitch start? Most people say that the pitch starts when you show the first slide, when you stand up to speak, or even when the audience walks into the room. These are all wrong. The pitch starts the moment the audience buys the ticket; the moment that the audience first commits to listening to your pitch. That is the point at which their expectations start to form, and that is the point from which you must be able to influence them.

Secret 3: The ball’s in your court

The audience has to be ready to listen before you start speaking. Get their attention, but avoid ice-breakers, because they actually distract from the topic of your pitch and break rapport. Pausing before you begin is a sign of control, so take all the time you need. After all, it’s your pitch.

Secret 4: Dream the dream

Your pitch, your idea, was created in a dream world. In order for that dream to become

a reality, you need to draw the audience into that dream. Drawing the audience into your dream with rich, vivid language allows you to convey far more than you ever could describe in facts, figures and ‘benefits’. Bring your pitch to life and let your words carry the sights, sounds, feelings, tastes and smells of success. Secret 5: Mind your language

While 93% of your message may be conveyed non-verbally, there is no doubt that your language conveys the raw information that your audience needs to make a decision. For example, traditional sales training advocated selling benefits rather than features. A nice idea in principle, but something often let down by poor execution. The traditional “feature means benefit” is the wrong way round. By the time you’re half-way through describing the feature, the audience is already thinking about the benefit. Otherwise they have no interest in it whatsoever. When you finally get round to the benefit, it will be different to what they had in mind. Even the most subtle difference will break rapport. Do that enough times and you’ve lost the connection altogether. Try “benefit because feature” instead, and you’ll win more pitches. Fact.


Secret 6: Say it again, Sam

No doubt you have heard the old presenter’s adage, “Tell them what you’re going to tell them, tell them, then tell them again”. Get your message across in as many different ways that you can, and realise all of the different communication channels that you’re not using; the way you dress, the way you walk into the room, what you say in the invitation email all communicate your intention, and when all of those factors are aligned, you multiply the power of your message. Secret 7: The end… Or is it?

Every rock star understands the importance of an encore. It’s the thing that most concertgoers rave about. What’s the encore to your pitch? Do you send a DVD with the video highlights? A ‘Best Of’ compilation CD? A thank-you card? As an absolute minimum, you must send a follow-up letter. Paul Boross has written two books to help you be more successful at pitching. Both published by CGW Publishing, The Pitching Bible and The Pocket Pitching Bible are both available from all good bookshops.

September 2012

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Happy families? Family businesses make up a huge proportion of UK plc. And with their long-term outlooks, they could be just the kind of companies the economy needs right now




ome of the world’s biggest brands are family-owned or run, including Walmart in the US, Tata Group in India and the troubled Foxconn in Taiwan. Closer to home, many household names in the UK have passed through generations of the same family, from supermarket giant Sainsbury’s, to haulier Eddie Stobart and confectionary favourite Swizzles-Matlow. Contributing an estimated 31% of GDP in the UK at a time when the economy is struggling to get back on its feet, never before have family businesses been so important to the nation’s financial health. Family businesses play a bigger role in the country’s finances than most people think: around 3 million of the UK’s 4.6 million small- and medium-sized enterprises (SMEs) are family-run.

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“I think it’s very important that each family member’s roles and responsibilities are clearly defined” Leigh Chadwick, director of Cornish clothing company Seasalt


There’s been fierce discussion over the years as to what exactly comprises a family business, but the general consensus is that it can range from a husband-and-wife team, to a company that’s been handed down through seven or eight generations. No one constitution is any more or less relevant than the next; they are all vitally important if the economy is to be restored to its former glory, and unemployment levels whipped into shape. Juliette Johnson, head of UK family business at Coutts, says that family businesses may have been less affected by the downturn than some of their non-family counterparts: “Our observation has been that family businesses are weathering the recession quite well,” she says. “They are still facing challenges, and feeling the squeeze, just like every UK business

is. But what these businesses do particularly well, especially when they’ve been owned over multiple generations, is they tend to take a very long-term view around strategy,” explains Johnson. “That longer term view means they’re much more prepared to weather the storm of short-term blips.” There are myriad other benefits to working alongside those who share the same DNA. But in order to avoid conflict, open and honest communication is key to successful family businesses. “You have to constantly be talking to each other,” says Leigh Chadwick, director of Cornish clothing company Seasalt. Chadwick and his two brothers decided to co-run the family business when their father died, and a succession plan wasn’t in place. The trio have managed to inject new enthusiasm into the

business and have grown it from a turnover of £1.5m when Chadwick Senior was last at the helm to £15m currently. Despite the fact that they had never worked together, the brothers were lucky to share the same vision for the business. They also had vastly different skills – Leigh is from an accounting background, Neil is the creative and David looks after the stores. This is something that stands them in good stead, says Chadwick. “I think it’s very important that each family member’s roles and responsibilities are clearly defined, as well as the authority levels in decision-making.” Decision-making can be a bone of contention at Sarah Steel’s business, The Old Station Nursery. She started up her first children’s nursery (there are now 11 sites around the

“Often it will be about the direction in which I want to take the business, which they may not agree with” Sarah Steel, founder and MD of The Old Station Nursery September 2012

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UK employing 180 people) 10 years ago after her sister lent her £50,000, and her father £25,000. Thus, Steel, her father and her sister are the three shareholders – which can make for interesting board meetings. “It tends to feel like it’s them against me,” she admits. “Often it will be about the direction in which I want to take the business, which they may not agree with.” But having licked her wounds, Steel says it’s important to adopt a business-as-usual attitude. “One will phone the other up and say, ‘Do you want to come over for Sunday lunch?’ Then we’ll carry on like nothing has happened. It’s very British.” One of the difficulties of family businesses is the integration between family and non-family board members. But this isn’t a problem The Old Station Nursery faces, as Steel’s father and sister won’t entertain the prospect of bringing in an outsider at that senior a level. “I would quite like to bring a non-executive director in but my other shareholders aren’t keen,” says Steel. “I thought it might have been quite healthy for to me have somebody on board who sees it rather more objectively than we do, but they didn’t want to risk upsetting the status quo.” The wariness of outsiders could potentially cause difficulties further along the line in terms of succession planning if it weren’t for the fact that Steel plans an exit within the next five years. But for Chadwick and his brothers, an outsider running the business his father set up in 1980 is a very real prospect. With David aged 53, Neil 46, and Leigh at 55, and the only third generation aged just six and four, there is a substantial succession gap. “We’re going to have to hand the management baton over, which will be quite difficult,” admits Chadwick. That’s making an assumption that Chadwick’s children will want to enter the family business. And even if they do, they’ll be expected to prove their credentials elsewhere before they re-enter the fold. “My father encouraged each of us to pursue careers outside the company; therefore it was really our choice to join the family business.” Coutts’s Johnson says that working outside of the family is vital – for all parties. “I cannot stress enough the importance of this,” she explains. “For the young family member it’s about building their own credibility in their own right.” But it’s also to the benefit of the family firm, continues Johnson. “Other people will be able to see that they’ve got something to bring back to the company, but will also know they’ve made their mistakes elsewhere.” “It also teaches them to respect authority and work in a more corporate environment, which you can’t always get when your dad is the boss and your name is above the door.”

Case study Alan O’Rourke Ruark Audio My father and I set up Ruark Audio in 1985 to sell hi-fis and speakers to enthusiasts. We thought we’d sell a few bits and pieces but we ended up selling more than we’d ever imagined. The speakers did very well throughout the 1980s, but in the late 1990s we found the market was changing quite a bit. Computers were taking over, and money was being spent on them rather than hi-fis. We decided then that it was time for a change in direction in the business, so we stopped selling our speakers and started doing our small audio products. The other big change was in 2000 when my father retired (he then passed away in 2002) and Neil Adams, my brother in-law, became a co-director. Neil is responsible for how the company runs on a day-to-day basis, whereas I’m the creative guy, the product guy. I think we complement each other better than my father and I did. Dad and I were too similar. In fact, Neil used to have to jump in to separate my father and I when we were arguing. I have a son and a daughter and Neil’s got two daughters, so there’s a chance that the business will remain in the family. But at the moment we’re encouraging them to develop their own skills like Mum and Dad did with me. Whether it’s them or some of the excellent young team we’ve built running the business, I don’t really mind. I fancy playing a Richard Branson kind of role – live on my island and then be rolled out as a figure-head every once in a while.


“At the moment I’m encouraging my children to develop their own skills like Mum and Dad did with me” Alan O’Rourke, Ruark Audio

September 2012

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04/08/2012 16:32


By its cover


It’s an unfortunate truism that in the business world opinions are formed in the first few seconds of meeting someone. But what does your state of dress say about you? And is a suit and tie all you want people to see?


e’re often told that appearances can be deceptive. But when you’re expected to make a quick decision about someone, whether it’s down to a recruitment choice or forming a deal that could have long-term ramifications for your business, there can often be little more to go on. Entrepreneurs need to dress appropriately depending on the situation. However, as they’re having to adopt an increasingly varied range of roles, it’s becoming less clear-cut what is appropriate. When we’re so used to seeing politicians with their ties off and a top button undone that it has almost become a cultural cliché, it’s clear that attitudes toward what constitutes professional attire has changed. And it can vary radically from sector to sector. The garb of a Silicon Roundabout tech wizard is obviously going to differ wildly to a boiler room trader. Once ubiquitous, the suit is no longer a catchall outfit and so entrepreneurs are having to think more about what their appearance is saying about them. A fairly common label, business casual, still fails to really identify what is expected; to different people it can mean anything from leaving the tie at home to a smart T-shirt and denim. If things are difficult for men, they are invariably more problematic for women. In the majority of workplaces, it’s not uncommon to see female workers in as diverse attire as a skirt suit on one floor and jeans and trainers on another. Levels of formality also vary in terms of what make-up may or may not be appropriate. This places an increased responsibility on women to pitch their appearances right. If a woman appears overdressed she can attract rather unpleasant labels; the 1980s habit of power-dressing and shoulder pads are all too fresh in many people’s memories. But overly casual or, worse, provocative attire comes with, if anything, more demeaning labels. It’s still an unfortunate double standard that provocative dress on a woman comes with entirely different connotations to the same attitude from a man. It’s clear that we put on different attitudes for different occasions and it’s important our appearance matches this. A launch or evening function needs a different appearance from the boardroom. And a television or public appearance might need something more adventurous than a charcoal suit. More than just a measure of someone’s professionalism, the way we dress has become indicative of our personality and so thinking carefully about the image we’re presenting has become far


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more nuanced than it once was. But what does this look like in terms of practicalities? The world of advertising has, understandably, always been rather image led, and perhaps this is the best place to look at how expectations are changing. LBi Ltd is one of London’s largest digital media agencies. Given the nature of its work, the balance its employees must strike between ‘dressing to impress’ and maintaining a cool, fashionable demeanour is perhaps more pronounced than anywhere. “When you are seeing clients, it is a balancing act,” says Adam Russell, head of display. “We need to demonstrate creativity but, at the same time, make them feel comfortable and reassure them that we are experts.” Essentially, Russell feels that traditional ideas about appearance in the workplace put the cart before the horse – rather than being a case of someone’s attire creating an impression of who they are, he believes an employee’s attitude should influence the way they dress. “In my line of work, which I appreciate is fairly creative in atmosphere and therefore relaxed, I think people should largely be free to wear what they are comfortable with,” he says. “Self-expression, creativity, freedom and comfort are more important to me than what someone wears. “Different people have different expectations and it obviously varies massively with sector,” he remarks. But this also means that the way you dress can still be a huge discriminating factor. If you aren’t dressed appropriately

“We need to demonstrate creativity but, at the same time, make them feel comfortable and reassure them that we are experts”

according to the expectations of your field then it draws into question your familiarity with the trends of the sector. “I’ve had people turn up to interviews in a full suit, which in my game, unless you are from out of town, really isn’t the right tone,” he explains. Ultimately, it’s down to a person’s ability to understand the requirements of the situation. “If you don’t realise why turning up to a client meeting in a T-shirt with a rock band on it and torn jeans is inappropriate, then that says more about your understanding of people than anything,” he says. Not being able to recognise your clients’ expectations is the real issue; by comparison the actual formality of your dress is a secondary concern. “In my business understanding people is important,” he explains. Expectations about business dress are definitely changing. It’s rather unlikely that inappropriate dress would attract disciplinary action – instead you are far more likely to attract a few raised eyebrows. As Russell comments: “Get it wrong now and it will be temporarily frowned upon, but I imagine in years gone past it would have been a really big deal.” Creating the right image is still very important but it’s no longer built into the structure of an organisation. Even in the world of advertising, it’s much more down to a person’s judgement. “The days of Mad Men are long gone,” he concludes. “There’s no scotch in the desk drawer any more but there probably are far more spare pairs of Converse.” September 2012

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Reed has been at the helm of psychometric testing company Thomas International since 2007, after being appointed as chairman two years earlier. As well as penning this regular column for Elite Business, he is also a founding member of the Bucks Business First and a fellow of the Institute of Directors.


Houston, we have a problem Dealing with underachievers can be tricky at the best of times, let alone in a small firm. But there are ways to make it less painful…


ealing with staff is one of the most challenging tasks of running a business of any size. No matter how strong the leadership team, every once in a while an organisation will come across an under-performer. An unproductive employee can have a significant impact on the business as a whole, especially in a small firm where every head counts. Yet many entrepreneurs and small business owners aren’t confident about how to deal with under-performing staff. With the right processes behind recruitment, management and development of staff, business leaders can deal with difficult situations. It sounds obvious, but recruiting the right person is a good starting point. Properly matching the candidate with the role will ensure the employee is more likely to be motivated from the beginning. In addition, by determining what sort of person and

characteristics the role requires, employers will be more confident in looking for candidates with those qualities. One of the problems many SME owners face is a tendency to hire people too similar to themselves. Businesses need different people with different strengths, so it is important to hire people suitable for the role, rather than just because you like them. If you’re an extroverted entrepreneur, you may need somebody calm and focused to counterbalance your own energy, and a team full of dominant ‘go getting’ personalities may need somebody who is happier planning and strategising. To determine whether a person is right for a role or even for a company, psychometric assessment can be an invaluable tool. By identifying the strengths and limitations of a candidate, employers can see whether they will fit into a role. For example, an

extrovert is unlikely to be a good fit for a role that doesn’t involve dealing with people, while a more introverted individual could be uncomfortable in a sales role. Using some kind of framework for thinking through what your ideal employee looks like and how you’ll recognise that candidate when they appear, will give you more control over the situation and increase your confidence in the decisions you make. However, sometimes the realisation that the person and the role aren’t well suited comes after a candidate has already been recruited. In this situation, many SME owners feel adrift and don’t realise that those same processes can be applied to employee management as well. If you want to get the best from the people who work for you then you need to understand how they behave and what motivates them and adapt your own behaviour accordingly. September 2012

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No matter how strong the leadership team, every once in a while an organisation will come across an under-performer

With the economic climate in its current state, being clear on who is performing well in your business is every bit as important as managing your cash or stock, and a small investment in this area can go a long way. Psychometric assessment can give you the knowledge you need to manage your employees in the most productive way and, importantly, give you confidence that you are handling the situation productively. As any business owner knows, taking quality, decisive action is vital. If a staff member is performing poorly, ignoring the situation may only exacerbate the problem and send the message that performing at this level is acceptable. It can also impact on the team in general and create bad feeling. By addressing the issue straightaway you make it clear you are aware of the problem and give the employee an opportunity to explain any underlying issues you may not be aware of. Even at this stage, finding out more about your employee can be valuable and help open up the lines of communication about why an employee behaves a certain way – without assigning blame or labelling behaviour as ‘wrong’. A poor performing employee isn’t necessarily unskilled, but could be demotivated. By understanding what motivates your employees you can take steps to restructure their role, work with them to build on their strengths, minimise their limitations and fulfil their role to the best of their ability. Having the knowledge you need to manage your employees in the most productive way is a powerful tool for an employer, but when working with an underperforming employee, it’s important to be aware of the responsibility you have to use the information in a positive way. If you need to give performance feedback, make sure you provide specific examples of when the employee didn’t perform as you would like. Being specific gives you both the opportunity to discuss what went wrong and the reasons for that. Bringing up general points without highlighting specific examples can put the employee on the defensive and become confrontational. Even if you know somebody has a particular personality trait, attacking with ‘You always…’ or ‘You never…’ is likely to make the situation worse. As the adage goes, people don’t leave jobs, they leave managers; bad or even just clumsy management will affect the level and quality of work produced. Adding some structure to your management can give you the confidence to inspire your team to work to their potential through good times and bad and, ultimately, means more success for your business.


September 2012

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28/08/2012 12:43



Hot List

We have some absolute gems for you this month. Bringing you the best android, iOS, desktop and web apps available, as well the sleekest hardware, the Elite Business tech team have been scouring the web like pigs on the scent of some fine burgundy truffles Trello One of our favourite project management apps has come to Android. Trello is a pleasingly straightforward tool, using the nigh-on ubiquitous ‘cards’ system. You can sort projects by organisation, invite contributors, vote on cards to action and create action points on the fly. It doesn’t make waves but then again it doesn’t need to – it’s effective, has a clean and clear user interface and, most importantly, is 100% free.


Cleartouch Okay. Hands up. TransluSense’s stunning Cleartouch isn’t actually available yet. Production is due to begin this month. But a hackable touchscreen keyboard and trackpad – especially one this beautiful – should have you salivating good and early. Fully customisable, gorgeous and, given it’s made of solid glass, 100% coffee- and crumb-proof. If you want your office to look like a graphic design agency circa 2075, Cleartouch needs to be on your Christmas list.

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OS X Mountain Lion Despite fears OS X Mountain Lion isn’t a repackaged iOS, merely adding some nice tweaks on its already strong design. A few built-in apps have migrated from the iPhone; both Notes and Reminders make cameos. But the neatest things are the fresh touches. iChat has been retooled as Messages, allowing users to send unlimited free messages to iOS devices. Notifications can be accessed by swiping two fingers off the trackpad.


Branch If you took Menshn and stripped away the authoritarian desire to control subject matter, the security issues and the ludicrously self-aggrandising name, you might find something like Branch. One of two new offerings from the team behind Twitter, Branch is a tool to stimulate ‘branches’, groups of Twitter users invited to discuss subjects in depth. Beautifully designed, Branch promises to be an incredibly useful discussion tool.

Discovering UK Growth Qlikview’s Discovering UK Growth is a novel app for monitoring business growth across the last two decades and has some rather interesting functionality. It presents the user with a nice visual interface of both regional and national growth, allowing them to view not only the best decade for growth (2000s) but the best prime minister (Gordon Brown). The growth analytics tool of choice. September 2012

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Apparently we’re better connected. It’s certainly true of business. And with the increased in flexible and home working in recent years, technology is working hard to keep pace

Upwardly mobile ‘M



obile working’ is a term that’s so commonplace these days that it has almost been reduced to a buzzword or a cliché. But, as with most trends, there’s a reason why it’s become a nigh-on omnipresent part of the business lexicon. The trend towards increasingly dispersed workforces means that people are engaging with so-called mobile working more than ever before. According to a recent survey by Virgin Media Business, 70% of people in the UK will have a smart device reliant on mobile connectivity by the end of 2012. Linda Summers, director of product marketing at video-calling giant Skype, says this is behind the shift toward mobile working. “As technology has increased so has the predisposition for employees to work remotely,” she says. For her, the real litmus test for this was the Olympics. “According to Transport for London, about a third of regular transport users changed their usual journeys to avoid travel hotspots during the Games, highlighting a clear adjustment within attitudes towards flexible working.” Duane Jackson, founder and CEO of KashFlow, the provider of online accountancy solutions, agrees that there’s been a shift in usage: “With each account, we’re seeing log-ins from many more locations than we normally would,” he says. It seems that a single account is increasingly likely to be accessed from a wide variety of IP addresses, which demonstrates a much greater variance in when and where people are accessing their data. “Rather than someone accessing it from the same place all the time, they’re accessing from multiple places.” Reasons to become a part of the mobile

revolution abound. Aside from the obvious benefits to employees’ well-being, flexible working can mean huge reductions to overheads – for a start-up, not carrying the obligation of premium office space can mean the difference between realising your goals and your business remaining a pipe dream. As Jackson explains: “You can get rid of the expense of that physical space and everything that comes with it – rates, desks, chairs.” Summers also points to subtler benefits. She cites the US President’s Council of Economic Advisors 2010 report Work-Life Balance and the Economics of Workplace Flexibility. “It claimed that flexible working arrangements can reduce absences and staff turnover,” she explains. It sounds like a bold claim but there seems to be some anecdotal evidence to support it – she points to the case of a large utility company that adopted a flexible working schedule in one of its divisions. “In the year after the programme was adopted, the division with a flexible schedule reported a more than 20% reduction in absences,” she says. What’s more, you can’t always guarantee that the best talent available to your business will be just down the street. Sometimes compromises need to be made; building the right team will sometimes need to be at the expense of geographical convenience. In particular, tech-orientated projects are far more likely to rely on talent pools spread across the country – or even the globe. And this will mean a reliance on collaboration software, as well as video-conferencing technologies. Summers remarks: “Skype itself is testament to how video conferencing can help companies to work more effectively internationally.” A significant proportion of the company’s projects involve tasks shared among international offices. “This means that our teams are spending an awful lot of time working collaboratively and using Skype to share their progress,” observes Summers. Unfortunately that’s not to say mobile working doesn’t have its downsides. “What we’ve also seen this month is lots of foreign addresses connecting to UK accounts, so what that implies to us is that people are checking their accounts when they’re on holiday,” comments Jackson. It seems the increased access afforded to most workers is a doubleedged sword; while it may afford more time away from the office, knowing that your work is only a click away can prove far too tempting for a lot of people. “With the ability now to access your software from everywhere, you need some discipline to switch off when you’re not meant to be working,” Jackson concludes. Summers believes this is an area that is still September 2012

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“As technology has increased so has the predisposition for employees to work remotely” Linda Summers, director of product marketing at Skype

being worked out, with differing opinions between employers and employees around flexible working policy. But change may be afoot. “They are both united by the common goal – how they might create an environment that allows them to do their jobs more effectively,” she says. “The future is likely to see employees owning more control over their work/life balance without having a negative impact on the business.” Additionally, security can be a concern for the uninitiated. How do you ensure your company data is secure when it is being accessed from multiple locations, for example? But Jackson explains that those concerns are dwindling more and more as firms tackle security head on. “When we first started years ago that security question would come up on a daily basis,” he says. “Now not even monthly do we get that question.” Given the amount of security most cloud software companies employ, your data is actually far safer with them than on your hard-drive. “When you look at the difference between how secure your PC is compared to an app on our servers with £10,000-worth of firewall equipment around it and biometric scans to get physical access to it, you’re considerably more secure on the cloud than you are on your desktop.” Jackson also feels businesses must put more work into team building. “The whole team bonding culture – you need to make a concerted effort to be getting together regularly,” he says. This can be aided by the social side of cloud software; tools such as Skype make a more fluid integration of the desktop and actually help to break down the boundaries between staff, not reinforce them. As Summers comments: “With employees online via Skype they can work more flexibly with each other via instant messaging, screen sharing and file share at the click of a button.”

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04/08/2012 16:25


The Techspert 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.

A human touch


In his first column, our technology guru told us all about building an online business. This month, he’s back to explain how a wholly online business came back to the physical world to incorporate a truly multi-channel approach


he very purpose of our online platform, our raison d’être, if you like, was to enable the customer to design each garment to their exacting requirements. They build their suit from scratch – choosing everything from the cloth to the shape of the lapel and the number of buttons on the cuffs. It’s safe to say that our foundations of strong technology and an even stronger web presence fundamentally deliver the individual and customised essence of our brand. Our platform has also been vital in building confidence among new customers: when there is no human interface, it is challenging to communicate our expertise in tailoring. This means we’ve had to work a little harder in conveying our knowledge and skills in the suit-building domain. For example, we have little information boxes on every aspect of the suit to explain the tailoring options and

styling advice. This means if you hover over the three-button jacket option, the information box will educate you that it is suitable for most body types, but athletic builds should probably avoid that particular style. All of this informs our prospective customers that although we are not physically there to guide their choices, we are always on-hand to lend our expertise. Despite all this, there were clearly obstacles in the minds of our prospective customers when ordering something as complex as a suit online. Simple questions could be addressed with web design and we could put them on an FAQ page. This would include queries such as: “How long will my suit take to be delivered?” (In case you were wondering, it takes between three to eight weeks for your garment to arrive for your first fitting, depending on the priority that you choose.)

However, we were encountering more complicated and specific questions than we were able to address online. In my mind, the future opportunities for successful retail ventures will change the way people think and challenge the status quo – so that is what we did. Some of the more complex questions included: – The cloth I want to select looks great, but does it look like that in real life? – What happens if I order the suit and it doesn’t fit the way that I wanted? – There are certain aspects of my suit design that I would really want to go through with someone. Can I come to see you? – I’m not particularly confident in my measurements being done from home – is there any way I can be measured by one of your in-house experts?

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“This is when we had to do a bit of soul-searching. As a business, we really had to ask ourselves why we existed”


All of these questions can be addressed online to an extent. For example, question one, regarding the cloth, was solved when we decided to send free cloth swatches through the post to anyone who requested one – something we still do today. In answer to the second query, we developed our Fit Guarantee policy that offers a guarantee of fit to our customers, which protects them and should ensure they go away delighted. However, when someone has asked to see you directly, as in questions three and four, then you know that unless you accommodate them, there is a chance that you will lose that prospect. This is when we had to do a bit of soul-searching. As a business, we really had to ask ourselves why we existed: did we want to be a company that catered to a smaller portion of tailoring customers in an online-only approach or did we want to be a company that made tailoring accessible to anyone? The first option meant that we would get our growth from a small proportion of prospects spread across multiple countries. The second option meant that we would be catering for a bigger target market. As the principle of making tailoring accessible to all was deeply ingrained in our ethos, we naturally opted for the more inclusive approach of catering to all types

of customers and opening up our offering to include appointments in studios – and so developed our style advisors to be personalised tailoring experts. We opened our first office in the City of London – a fantastic location to serve a large number of our target market. Here, we simply started holding hour-long appointments. The appointments would follow a similar process to the online ordering forms, but, instead, we’d simply guide the customer, while answering any questions that they had. In addition, these appointments allowed us to showcase all of our cloth samples and completed suits, as well as offer a premium measurements service to get measured by one of our experts.

We found this local option, whether taken advantage of or not, gave our customers confidence to order with us, both online and offline. We have now extended this model throughout the UK to 34 different locations, and our team of almost 20 knowledgeable style advisors is now at the centre of our offering – which is quite clear when you look at our website. This way of thinking and operating as a truly multi-channel business is integral to our company and, we feel, tailoring in general. We pride ourselves on being Britain’s ‘local tailor’ and a big part of that is the personal relationship that the customer builds up with their local style advisor. Even in this internet age, sometimes it’s about people, as well as machines. September 2012

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30/08/2012 19:22


Franchise in the spotlight:

Mail Boxes Etc.

Franchising is tempting for those who want the entrepreneurial experience but with the protection of selling a firmly tested product. This month’s franchise in the spotlight is definitely that – a strong brand tempered by years of high street experience. Bid a hale and hearty greeting to Mail Boxes Etc.



ruly an international heavy-hitter, Mail Boxes Etc. began life in the United States in 1980s but became a franchise early on in life, expanding to various territories including the UK, India, Poland, Italy, Germany and Russia. Mail Boxes Etc., Inc. was purchased in 2001 by United Parcel Service (UPS); in the years that followed outlets in the US, Canada and India were gradually rebranded as The UPS Store. Eventually in 2009, all of the remaining territories were sold on to the Fineffe Group under the MBE Worldwide banner with all of the franchisees either remaining under the umbrella of the master license or individual master franchises.


Faraz Ahmad and Osman Ahmed, the current Mail Boxes Etc. ‘franchisees of the year’

In the UK and Ireland, Mail Boxes Etc. has gradually come to dominate the courier and packaging industry. Its network of over 125 stores has become a byword for one-stop mail and stationary services, selling everything from bubble wrap to bespoke professional assistance. Stepping inside a Mail Boxes Etc. store can actually feel like probing one’s way through the cloaks and coats and stumbling into Narnia – an entire world of mailing solutions lurks just beyond their doors. “The unique and diverse offering of services is one of the things that makes Mail Boxes Etc. special,” comments Leah Stanley, Mail Boxes Etc.’s franchise development executive. “No

other store on the high street offers all these popular services in one place,” she continues. And she’s right. Mail Boxes Etc. doesn’t shout about how much it offers but once you really look beneath the surface that you realise the extent of the services it provides. Courier. Stationers. Postal service. Mailbox provider. Design studio. Printers. You can rent a virtual business address, apply for planning permission or get maps drawn up, all under the same roof. For small businesses it handles bulk mailing and telephone answering services. They offer a staggering range of services and this is something that makes them hugely valuable as a brand.

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“The unique and diverse offering of services is one of the things that makes Mail Boxes Etc. special”

But perhaps the best measure of a franchise comes from the franchisees. And Mail Boxes Etc.’s franchisees are nothing if not loyal. An excellent example are Faraz Ahmad and Osman Ahmed, the current Mail Boxes Etc. ‘franchisees of the year’. Despite having become MBE franchisees just two years ago they already own six outlets in central London, managing their stores with incredible aptitude and flair. However the pair are quick to share the credit. “We listened to all the advice we were given by our franchisor and then just followed their excellent system,” Ahmad says. Glowing praise. But it’s not unusual for franchisees to feel this way. Stanley explains: “MBE franchises are so popular with

opportunity a Mail Boxes Etc. franchise offered Whilst they had high hopes for the business they had no idea how well it would do. Maendl admits: “[it went] much better than expected”. Even so they couldn’t rest on their laurels – building brand awareness was essential. They focused on giving extra service and building goodwill; one example saw them making complimentary collections from customers who lacked the time to come in store. Little touches like this cemented them in their customer’s minds. “We had to create awareness so people would understand what we do,” Maendl summarises. According to Stanley this isn’t unusual for a Mail Boxes Etc. franchise. “One of the key aspects that gives the MBE brand such strength

Steve Kennedy serving

Rod & Kim Salmine by mail boxes

franchisees because they are so different to any other franchise out there. When you own an MBE franchise there are always new adventures and challenges to experience.” Despite this however there’s still huge amounts of support to help guide franchisees through their tentative first steps toward becoming dynamic entrepreneurs like Ahmad and Ahmed. “With Mail Boxes Etc. you can run your own business and develop your entrepreneurial spirit, with the reassurance of a dependable support system behind you at all times,” she says. Another interesting case is that of Bridget Maendl and Sehrinaz Celebioglu. The first of Mail Boxes Etc.’s exclusively female partnerships, the pair found their way into the franchise in 2011 almost by accident. It was only when Maendl’s husband asked her opinion of the franchise – and she brought in her friend Celebioglu, an international business and management postgraduate, as a consult – that the idea was sown. Whilst Maendl’s husband decided to remain in his existing field, the two friends decided they wanted to pursue the

on the high street is the quality of service that our customers receive,” she explains. “Our franchisees are a strong local presence in their community and so offer a personal, friendly service to all their customers.” Thanks to this presence Maendl’s and Celebioglu’s franchise occupies a very secure position in their area. This is aided further by the strength of the brand they’ve bought into and their obvious tenacity. “There are limitless opportunities for us to grow as so many new businesses are springing up in this area now, mainly creative ones such as film companies and art galleries,” Celebioglu says. As packages go it’s practically wrapped up with a giant bow. A tested brand, a stellar product range and a proven record of both franchisee- and customer-loyalty – there’s little more you could ask for. If you’re wanting a franchise with a friendly face but a rock solid business model you could do a lot worse than Mail Boxes Etc.


Bridget Maendl & Sehrinaz Celebioglu - Waterloo

Minimum investment: £60,000 September 2012

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Become An Auction Your Motor Sales Executive for just £2500 Auction You Motor (AYM) are seeking motivated self employed sales executives across the uk to deal with individuals/ businesses who wish to sell their vehicle(s) at Auction through one of the largest car auction companies in the UK. Also to establish business to business relationships with motor dealers within your territory through our unique ‘SmartXchange’ proposition

You will be granted an EXCLUSIVE sales area either by County or Postcode You will receive head office leads generated via our own dedicated Marketing Company, but will largely be expected to generate your own business. Industry experience would be advantageous but not essential as you will receive training to include BVRLA accreditation in vehicle appraisal. Potential to take on sub agents and expand into vacant territories.


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31/08/2012 10:43


Steve Bolton runs one of the most successful UK-born franchises, Platinum Property Partners. From playing the stock market at the age of eight, to earning a million by the time he hit 30, Bolton wasn’t cut out for an mundane existence


Breaching the canopy



isplaying the all the talents of a preteen Greg Secker and rebuilding his empire from the ashes of 9/11, Steve Bolton is a born entrepreneur. But rather than reaching for the treetops alone, his decision to go down the franchise route has let many others to share in his success. For Bolton a meaningful enterprise will always be about people. Elite Business: Were there any signs of budding entrepreneurship when you were a child? Steve Bolton: At the age of eight my father gave me a little black book – I was fascinated by money – and he told me to pick ten stocks from the Financial Times. I watched them every day and was fascinated that they could go up and down. At eight I was playing the stock market. I was quite bright but not in an academic sense. I left school at 16 with no qualifications and I think the whole educational experience knocked my confidence. When I was 17, after

a couple of dead-end jobs, I got a job teaching kids outdoor pursuits. It wasn’t highly paid but I loved the work. EB: Is leaving school without qualifications something that you regret? SB: No. I’ve got no regrets about it whatsoever because of the way my life has panned out. If anything, it turned out to be an asset rather than a liability. A lot of entrepreneurs think differently to most people; they have to break the rules and change the game. Not having fitted into the school system allowed me that mental flexibility to be able to see opportunities and not worry about doing things other people wouldn’t. EB: So how does someone go about making their first million by the age of 30? SB: The first thing you have to decide is that you want to do that. You’re really passionate about it; you’re willing to put in the time, the work, the effort. I got to the point in my mid-20s where I was fed up with working for

somebody else. For six months I’d finish my day job at 6pm, and then we’d work on our venture until about 3am. A lot of people have to risk everything to start up on their own. The advantage I had was that I didn’t have a huge income; I wasn’t on a massive six-figure salary that I had to leave behind. By 1997, we were the European market leaders and operating in 15 countries and employing 60 staff. Everything changed on 9/11. All that we had built in the previous seven years was wiped out in just a three months. Which was a harsh but important lesson. EB: How did the 9/11 attacks come to have such a huge impact on your business? SB: It was traumatic on loads of different levels. I had two businesses at that time. Our training and development company went from making a net profit of just under £500,000 a year to breaking even within three months because a lot of financial institutions were September 2012

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“The advantage I had was that I didn’t have a huge income; I wasn’t on a massive six-figure salary that I had to leave behind” cancelling team building and training. The business constructing the rope course facilities was partly hit by September 11 but before that was foot and mouth disease in the UK. The outbreak shut lots of places down; you couldn’t go walking in the countryside and all of the places we were building these centres were in the countryside. It just left a massive hole in our cash flow. So we had to make a very difficult decision to put the construction business into voluntary liquidation. EB: For most people that would be the end of the line. How did you pull things back from the brink? SB: It really did knock my confidence. But I think the underlying thing – and it’s probably true of all entrepreneurs – was that I’d actually tasted freedom. I’d been my own boss and – despite the ups and the downs, the pressure and the longer hours – I’d actually had a taste of the good life. So I started again. But the challenge for me this time was building

a business model that was absolutely bombproof. EB: Strong partnerships seem to lay behind the success of Platinum Property Partners. What do you feel the secret of a good partnership is? SB: There’s a number of things. Firstly, there must be an alignment of interests. If we’re partners we’ve got to have an agreement that there is a win-win benefit in place. Number two is trust. You’re both going to have to be able to trust each other. And the third thing is really important – that you have fun during that process. You need somebody not that you’re just going to do good business with, but that you can have a laugh with too. EB: You’ve championed several charities, including supporting orphanages in India and Uganda. What made you want to give something back? SB: I think the influence for that comes largely

from my mentors, one of whom is my mother. She brought me and my sister up with strong values about helping other people. But also some of my business mentors in America were very much proponents of giving back. A lot of business and corporate values are just completely out of whack; greed has taken over. EB: What advice would you offer for someone wanting to make their mark in the world of franchising? SB: The number one thing for me has been that unwavering commitment to making sure that your franchise partners are successful. It’s about going that extra mile. When they’re saying “this is not working for us”, that means changing it or fixing it. Responding. Delivering value all the time. That’s one of the franchisor’s biggest challenges: putting the focus on the franchise partner and that genuine passion for continuing to help them, rather than focusing on just how much profit your business is going to make.

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You hold before you an opportunity that could change the way you think, what you do, and how you do it... Use your work experience to become a business consultant or deal maker with the Alchemy Network 76


hat better way to help kick-start the current economy than help smallto-medium sized business owners? The failure rate of SMEs makes for grim reading, with 85% of new businesses failing in their first five years. If you think you possess the skills or services that can help these businesses survive and thrive, then we may have something that’s right up your street. An Alchemy business consultant and dealmaker, is trained to assist and work alongside the owners or operators of small and medium sized enterprises, to help them achieve business and financial success. The network is led by David Abingdon, CEO of the Alchemy Network. Something of a success story himself, David features regularly in the press. For example, he featured in the television program “How The Other Half Live”, which was first broadcast in the UK on Channel 4. As an Alchemy partner, you are extensively trained to build and develop businesses using Alchemy’s cutting edge systems, powerful techniques and unconventional methods that create unique income opportunities, new markets and long-term wealth for business owners and operators. Furthermore, Alchemy’s business development processes work in any industry or business – irrespective of the type of

product or service and regardless of the state of the economy. This is where your background, previous experience and Alchemy’s training and support can help you to take advantage of the many lucrative opportunities that are present in the business environment of today and the near future. Find out how to use your business experience to build a professional practice in consulting and deal-making with the Alchemy Network. If you think you have got what it takes and want to learn more about how our comprehensive nine-day residential training course and ongoing support can help you make a difference call us on 01453 826710, email or visit In associate with

Alchemy’s training and support can help you to take advantage of the many lucrative opportunities that are present in the business environment of today and the near future September 2012

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LLOYDS TSB Richard Holden

Richard Holden heads up the Lloyds Banking Group Franchise Unit and is an expert speaker at exhibitions and seminars.

Buyer beware Becoming part of a franchise is less risky than starting a business from scratch, but is not entirely without uncertainty. Mitigation of those risks, begins with thorough research...


xperts generally consider that franchise opportunities grow quicker and survive longer than independent start-up businesses. Belonging to a network of businesses has many benefits for franchisees, including brand recognition, greater buying power and being able to follow proven marketing strategies. The opportunity to share best practice and to talk through your problems with other franchisees is a valuable resource which is should not be overlooked. After nearly 30 years in banking, I’ve seen thousands of business plans and the one thing they have in common is that the writer expects to build a winning business. Failure is not an option. And while it’s true that commercial failure rates amongst those people who have invested in a franchise brand are significantly lower than those setting up a business from scratch, doing so will not automatically guarantee success. To start with, you can boost your chances of finding a winning franchise by doing painstaking research. What’s more, wellestablished franchise opportunities that have been tried and tested over many years offer the investor less risk. That said, it is important to remember that running any business will take a lot of hard work, commitment and enthusiasm to succeed. Newer franchise opportunities should not be dismissed out of hand, however, thorough research is essential

to ensure that you make an informed decision about the investment. Spotting the next big trend and distinguishing it from fads which come and go in a flash can be difficult. People who are unwilling to listen to guidance are setting themselves up for a big fall. I often speak to people who are unswerving in their defence of their idea, despite having only undertaken basic research. It can be helpful to bear in mind: ‘All that


and don’t miss any vital information. The British Franchise Association runs exhibitions and seminars that provide an invaluable insight into franchise investment. Lloyds TSB also sponsors a series of free evening educational seminars held throughout the UK about the benefits and pitfalls of investing in a franchise. These are must-attend events for people seriously thinking about starting on their franchising journey. For further details and booking information visit the website. Of course, franchising is not right for everyone. For people who value independence, want to re-invent the wheel or run a business without restrictions, franchising might not be the right option. Anyone considering investing in a franchise must be prepared to ask some in-depth questions of the franchisor. Their responses will assist you in deciding whether the franchise is right for you. No investment can be guaranteed, especially when it depends on your own efforts as well as your franchisor and the market place. Finance is available for franchise investment from banks that have specialist franchise departments like the Lloyds TSB Commercial team. Talk to our trained franchise managers for guidance and support.

Amongst the hundreds of viable, ethical franchise brands, there are a few to steer clear of glitters is not gold’. Amongst the hundreds of viable, ethical franchise brands, there are a few to steer clear of if you wish to build a successful business. The old English proverb ‘a fool and his money are soon parted’ rings true for the unwary investor who commits to joining a franchise opportunity they haven’t fully researched. The choice of franchises can sometimes be bewildering. Banks with a specialist franchise department are often a good source of free, independent advice. They are invaluable in making sure that you’re taking the right steps

September 2012

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Franchise master 59555:Franchise master 59555



Page 1

Lloyds TSB can help you with your franchise plans. Whether you’re buying into a franchise or franchising your own business, it’s important to have the right kind of support and guidance before you take the next step. That’s why we have a team of specially trained franchise managers who have a wealth of knowledge, and can offer you practical support and guidance. To find out more call:

0800 681 6078

Calls may be monitored or recorded. Lloyds TSB Commercial is a trading name of Lloyds TSB Bank plc and Lloyds TSB Scotland plc and serves customers with an annual turnover of up to £15m. Authorised and regulated by the Financial Services Authority under numbers 119278 and 191240 respectively.

Untitled-5 1

08/08/2012 10:57

Proven, ethical and highly profitable property business Create your financial freedom, a secure future and legacy business

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Join a community of like-minded individuals across the UK who are building marketleading property portfolios Be part of the world’s first property investment franchise Our Franchise Partners have purchased over £55 million worth of property in the last 5 years Discover why key business individuals like the former CFO of Norwich Union/Aviva and the ex Financial Director of Coca Cola have all joined Platinum Property Partners

Do you want to earn £50k – £150k income p.a? Achieve an average R.O.I of 15% Generate £15,000 gross profit per property per annum from rental income Join an award winning team

Join a franchise where you own the assets

Contact us today to receive FREE tickets to two huge franchise events: The Franchise Show at Earls Court, London - September 7th & 8th The National Franchise Exhibition at the NEC in Birmingham - October 5th & 6th Contact us today on 01202 652101 quoting EL0912 BE MORE - DO MORE - HAVE MORE - GIVE MORE HP Ad Place.indd 1

30/08/2012 19:23


Ready? Getting

Franchising is an exciting avenue for any business. But sometimes it can be difficult to know what you need to consider before signing on the dotted line. Check out our tips on getting ready to become a full-fledged franchise


The first important step is working out if it is actually right for your business. It sounds like a rather facile statement but it’s absolutely vital to know this is the shape your want your business to take. Some projects are about rapid growth and massively increasing your visibility; others are about a controlled brand and exclusivity of service. Models of mass-production and distribution also fair well under a franchise model – this is why franchising is so effective a choice for a fastfood outlet and such a poor one for a gourmet restaurant. It also comes with significant startup costs, which means you need to make sure it’s a concept that can, and will, scale.



Like any brand your potential franchise needs to have individuality. This doesn’t mean your product or service needs to be something revolutionary or something nobody has ever thought of but it is important that the presentation has some novelty. If you’re going down the franchising route, every time a potential franchisee or customer sees your brand amongst all your competitors’ you want to be sure it’s yours that they remember. Whether its your approach, your sustainability or your branding, something needs to stand out.



Despite the fact you need to be unique, you also need to guarantee that your service or product will be sought-after. There needs to be a huge demand for your brand because you’re going to be selling that brand to two sets of people; the franchisee and then the consumer. If demand falters at either level you’re going to be left with an expensive investment on your hands that will resolutely refuse to grow. Few people would try to sell something they thought served absolutely no need but you still need to be brutally honest with yourself. A recruitment agency for Go coders may be a great idea but will it reach a high level of penetration? Are there enough Go coders to support 200 agencies? September 2012

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set for franchising


One of the most significant factors of franchising is that the model is replicated. Over and over. Everything you do needs to be replicated by your franchisees and carried out with almost complete autonomy. Obviously a significant part of the job they are taking on is to commit adapting themselves to and learning your model but you need to be able to make their job as straightforward as possible. Trying to reduce and explain your model to a third party could help masses here and teach you just how much there is to what you do. It might not be until you unpack it you realise where your processes could be simplified.


Whilst opening a hundred and fifty stores may sound like a dream ticket, you can’t just wash your hands of your franchisees once you’ve signed the contract. One of the key elements of the franchisor / franchisee relationship is a commitment to providing ongoing support to your franchisees. This can vary wildly. Some sectors – where franchisees might act as small, even autonomous, units – require administrative and organisational assistance. Others will require less direct input but will almost certainly require assistance with recruiting. This requires an understanding of exactly what roles your franchisees will need to take on and making sure you have the resources to deal with the volume. It can be a hugely stimulating process, supporting teams around the country but it also will require a high level of preparation and flexibility.


Bear in mind that you will be maintaining a network. This means walking a tightrope. On the one side you are responsible for your franchisees. Failing to properly account for their needs, either at the agreement stage or after years of trading, could hurt them dearly – eventually resulting in a gradual weakening if they take action or are unable to maintain high levels of service. The other side is equally as important – the health of the network is vital and you need to take every precaution to ensure it stays afloat



Lastly, there’s one thing every entrepreneur should do before committing themselves to franchising their venture – seek expert advice. There are plenty of people to assist you with your journey into franchising and making sure you’re aware of the people who are out there can help you feel much more secure in your decision. First off it’s worth registering with the British Franchise Association (bfa); whilst the service is opt-in it’s the closest thing to a formal regulatory body we have in the UK and membership will ensure you make contact with the right people. Secondly don’t be afraid to seek other advisors; from franchise consultants and banks to media outlets and recruitment consultants, there are a huge number of services available. A full listing is available on the bfa website.

September 2012

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Work smarter not harder 82

This business can give you the returns of a bank robbery without the hassle – or the prison stretch – says Bob Welfare.


or more than 20 years, Bob had been running a high-profit business. You are probably thinking: ‘it must’ve taken something pretty darn special to make him stop then’ and you’d be right on the money. In Bob’s words: “I now make three times the money I used to make, in a quarter of the time.” We know what you’re all wondering: how? To put it simply, we’ll hand back over to Bob: “The currency markets. It’s a constant rush of money, flowing across the computer screen everyday. Because money is the number one commodity in the world today. Everyone wants it. Everyone needs it. that’s why buying and selling currencies from home, by computer, is the greatest business on Earth.” And that’s it. It’s that simple. “That’s what I do. Buy the Yen. Sell the Dollar. Sell the Pound. Buy the Euro etc.” Now, we suspect you’ll be after a slice of the

action. Luckily, Bob is here to help you do that. With his help you really can run your own home business, either full- or part-time. “Stop lining your boss’s pockets and start lining your own. If you want the financial security of making your own money, then simply have a look at this amazing business,” he says. To whet your appetite, he’s produced a free DVD showing how he makes his living in this outstanding business. “More importantly, it also shows how I can train you to do the same,” he says. “The training course is restricted to a handful of people a year, so you get personal help at all times.” FOR MORE INFORMATION For more information call 01803 606651 and ask for the free demonstration DVD entitled: “Why I gave up a £200- to £300-a-day business to run my own probability management business.”

If you want the financial security of making your own money, then simply have a look at this amazing business September 2012

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From Singer to Subway: WORDS: Adam Bannister, managing editor of,,

The history of franchising

For the uninitiated, ‘franchising’ evokes images of fast-food chains, car rental outlets and hotel chains. But it hasn’t always been that way....


or many, franchising is synonymous with those iconic golden arches and the United States. However, the origins of the concept, where franchisees pay a regular fee for the right to trade under a recognised brand with training and support, can be traced back way beyond the moment in 1954, when a milkshake salesman marvelled at the rapid turnover of customers at a Californian burger stand. And the story begins not in the US, but in feudal France. Derived from an old French word meaning liberty, a franchise was a right, granted by a local lord to peasants, to, say, run a market, operate a ferry or draw water. The peasants, who paid a regular levy, were also promised protection from marauders. Free-wheeling entrepreneurs who enjoy the creative elements of business might find the provenance of the word ‘franchise’ ironic. Obliged to follow a tried-and-tested formula, a franchisee is rarely at ‘liberty’ to change prices, the product range or branding. However, the spectacular growth of franchising in the 20th century attests not just to its effectiveness as a means of expansion, but also its allure to those who crave the freedom of business ownership but are daunted by the risks and loneliness associated with going solo. British brewers adopted a franchise-like business model back in the 18th century. With licensees increasingly strangled by regulations – a problem modern-day publicans will recognise – some brewers offered financial support in return for a commitment to exclusivity of beer supply. Called a ‘tied’ lease, the model remains widespread – and controversial, given licensees cannot switch supplier when prices are hiked. A man called Isaac Singer is credited as the father of the modern-day franchise. Singer had developed an innovative new sewing machine but found himself in a catch-22 situation: he couldn’t raise the funds to manufacture and distribute his machines without first selling a rather large volume of them – and doing so was contingent on expanding his manufacturing capacity. He solved the problem by offering licenses to sell his products in defined territories, then with the up-front capital expanding his factories. Licensees were also trained to show customers how to use the machines. And the terms of the franchisor-franchisee relationship – although these names were yet to be coined – were enshrined in a legal contract. However, the franchising model did not grow as quickly as its earliest adherent. True, General Motors sold exclusive rights to car


September 2012

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dealerships, but it was during the 1950s boom, when America built its Interstate Freeway System, that franchising really bloomed. The ‘business-format’ franchise, in which franchisees systematically followed a proven formula, was suited to achieving the consistency – in product, price and brand – now demanded by consumers. Advertisers could, through the television, now reach consumers around the world, so McDonald’s mastermind Ray Kroc was astute in his conviction that the product should be as consistent as the message; a Big Mac should taste the same in Tokyo as it does in New York, he believed. Kroc, who licensed the McDonald’s concept nationwide after being impressed by the ‘Speedee service System’ pioneered by brothers Richard and Maurice McDonald, set strict rules on portion sizes, cooking methods and packaging, even promising a refund if people waited more than five minutes for their food. Kroc, who also popularised the mantra “In business for yourself, but not by yourself”, successfully balanced the need for central control, ensuring franchisees stuck to the proven system, with the need to foster bottom-up innovation – as the invention, by franchisees, of the Big Mac, Filet-O-Fish and Egg McMuffin can attest. McDonald’s has recently been usurped as the world’s biggest fast-food chain, in unit numbers if not revenue. Subway, which has 33,749 outlets worldwide, has topped Entrepreneur magazine’s Franchise 500, which ranks franchise opportunities according to a range of factors, in 10 of the last 13 years. Coca-Cola still operates a franchised distribution system it pioneered in 1889. The drinks giant, which hitherto manufactured drinks from a single, central plant to protect its secret recipe, slashed crippling distribution costs by distributing a concentrated syrup to licensed bottlers around the world. The Wimpy restaurant chain, meanwhile, was one of the UK’s earliest business-format franchises. Bought by coffee shop chain J Lyons & Co in 1955, the burger chain prospered until the emergence of McDonald’s in 1974, which heralded a long decline, though a handful of outposts remain. British ice cream brands Lyons Maid and Mr Softee also used franchise distribution systems in the 1950s. In 1960 the industry established the International Franchise Association (IFA) to accredit reputable, ethical franchisors, thus discrediting dubious operators brandishing

In feudal France a franchise was a right, granted by a local lord to peasants, to, say, run a market, operate a ferry or draw water British brewers in the 18th century offered financial support in return for a commitment to exclusivity of beer supply A man called Isaac Singer offered licenses to sell his products in defined territories, then with the up-front capital expanded his factories In 1954 McDonalds is born after a milkshake salesman spots an appetite for burgers in California In 1960 the industry established the International Franchise Association (IFA) to accredit reputable, ethical franchisors The British Franchise Association was founded in 1977 to raise industry standards and forge relationships with key partners In 1978 legislators in the US made it mandatory for franchisors to offer a document called the Uniform Franchise Offering Circular The 1980s saw a proliferation of popular franchises including Domino’s Pizza, Tie Rack and Hertz Now franchises in Blighty number 929 and contribute £13.4bn to UK plc

the franchise label. But self-regulation wasn’t enough for US legislators, who in 1978 made it mandatory for franchisors to offer a document called the Uniform Franchise Offering Circular before accepting money from interested candidates. Outlining the company’s history and a detailed prospectus of the concept, the document helps would-be franchise owners make an informed decision. In the UK, by contrast, franchise agreements must adhere only to regular contract law. In 2007, the then-Minister of Industry Margaret Hodge conducted hearings into the industry but resisted calls for stronger regulation. The notorious pyramid schemes of the 1970s, where dupes made a single payment but earned supposedly repeat income by registering others and taking a cut of their payments, bore only superficial resemblance to franchises, but the sector was nevertheless tarnished by association. The British Franchise Association (BFA) was founded in 1977 to challenge such misconceptions, raise industry standards and forge relationships with the major banks. And a rival organisation, the Alternative Franchise Association, was set up earlier this year with a promise to reaccredit members annually. The 1980s saw a wave of new market entrants, such as Domino’s Pizza, Burger King, Swinton Insurance, Tie Rack and Hertz. No longer limited to fast food, cars and hotels, the options for franchisees had diversified to a multitude of sectors. Fast forward to 2012 and the UK franchising industry is arguably in ruder health than ever. While the economy continues to flatline, the number of franchise systems actually grew by 29 last year, to 929, and the number of units by 4%, according to the latest BFA/ Natwest franchising survey. Meanwhile, 90% of franchisees profess to having satisfactory relations with their franchisor – the highest proportion for 10 years. Contributing £13.4bn to UK plc, the franchise industry has matured into a powerful economic engine. And yet, there’s some way to go before its status matches that of its US counterpart; franchised stores account for around half of all US retail sales. However, with a preponderance of opportunities in recession-proof or major growth sectors – not just fast food but also commercial cleaning, consultancy and internet services, to name a few – expect that gap to close in the coming years. September 2012

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Ever wanted to wave a magic wand and change your life?


This is your fantastic opportunity to market and sell the latest LED technology writing screens. Ready Made Business With this business, there is a very wide target audience. With no restrictions on territory or area, you can operate anywhere in the UK. With a small investment for this great business, it can be an entrepreneurs dream business * INVESTMENT FULLY COVERED BY STOCK

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30/08/2012 19:26


A Slice Of A £Multi-Billion Industry E-commerce is generating more cash for businesses than ever. But if SMEs get stuck into affiliate marketing, the sky’s the limit 86


nline retail is a multi-billion pound industry. According to the Office for National Statistics, (ONS) in the UK in July 2012 alone some £505m was spent online, which accounted for just 8.5% of the total retail sales in the same period. Despite the UK economy’s current overall retail sales growth remaining stagnant at least for the short-to mid-term during the economic slump, the share of retail sales generated online is still growing. Almost a quarter of the UK’s retail sales will take place over the internet within four years, according to a new report by the Boston Consulting Group. What’s more, by 2016, the Group estimates that some 23% of UK retail transactions will take place online, compared to today’s 8.5%. Working with ybis you can have a slice of that revenue in a thriving market - one of the very few growth markets in today’s perilous economy. The ybis online opportunity is the fastest growing franchise/ opportunity on the market today. Without investing in an e-commerce shop, buying or renting a warehouse and filling it with your chosen stock, how could you possibly get into the online retail market without a vast outlay of capital? Affiliate marketing is the answer. Affiliate marketing can be described as ‘SOPP’, or selling other people’s products, where an affiliate marketer earns a commission on a sale for directing a consumer to a retailer to purchase. Amazon,

Argos, Debenhams, Tesco, ASDA, Curry’s, Comet and many more established, trusted and recognised high street brands have affiliate marketers promoting their products in return for a commission on the sales, and the affiliate marketer doesn’t ever have to do any direct selling, never has to worry about sending the order, dealing with returns or even dealing with customer enquiries. The retailer handles everything.

Working with YBIS you can have a slice.... Shawn Collins is probably a name you haven’t heard of before, but you will do well to learn it now. Shawn is a very successful affiliate marketer, and an early pioneer practicing since 1997 he has now branched out and, in addition to running an affiliate marketing agency, is hosting a website dedicated to the field. Also the author of a best-selling book on the industry, Shawn is also the co-founder of the Affiliate Summit. Back to home soil and no doubt you have heard of Martin Lewis a regular face on TV championing consumer rights and presenting an independent view of the best financial deals available on the market. You may have heard that he sold his website moneysavingexpert. com for £87m, but did you know in 2012 the website generated pre-tax profit of £12.6m

from revenue of £15.7m through affiliate marketing?’ revenue was generated through commissions it earned by referring customers to the deals it promoted. Or by ‘SOPP’. These are a just a few successful examples in the affiliate marketing industry that you could be part of. So having read all of this, now do you think affiliate marketing is for you? If you have basic computer skills and can follow our training, maybe you will be the next success story people read about in the press. You have the opportunity to join ybis and the hundreds of other people who are already enjoying the success of buying an affiliate website with the back-up and support from ybis.

Customer Testimonial “Thank you so much to the ybis team. I absolutely love my new business. I have been following the training and am really thankful of the great support your team has given me throughout this entire process. I can now take care of my beautiful baby girl in complete financial freedom.” Katie ( September 2012

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Close protection Rule one of business is to protect your assets. Your equity. Your staff. Your building. So why leave out the two most valuable things you own: your product and your brand?




ntellectual property (IP) isn’t just important to your business: it is your business. There’s a good chance the majority of start-up capital spent at a business goes straight into IP; whether it’s a logo, advertising copy, software or a product, fundamentally IP is the fruit of all the hard work that goes into a thriving enterprise. And because of this it’s essential you make sure it’s carefully protected. When does protecting your IP need to start? Right from the get-go. David Warrilow, patent and trademark attorney at London IP, believes it needs to be looked at from two perspectives. “There’s protecting it and there’s also checking it doesn’t infringe on anyone else’s intellectual property,” he says. Given almost any venture, regardless of size or aspiration, will at least have a name to build its brand around, this is a good place to start. “Any company, should be checking to make sure its name doesn’t infringe any registered or unregistered trademarks,” he continues. After this it really is worth playing safe. “Trademarks are essentially on a first come, first served basis, so it’s always best to get an application in as soon as possible.”

September 2012

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Patents are more complicated beasts. “Again a company should be checking that their product or process isn’t going to infringe upon any patents, although that can be expensive,” he says. After this, the next major – albeit understandable – mistake companies make when they come up with an exciting new idea for a product is spilling the beans too early. Wanting to get things kick-started and go to funders as soon as you can is admirable but it’s an error that can cost businesses dearly. “They should also make sure that if they want patent protection they file an application before any nonconfidential disclosure of the invention,” Warrilow warns. “You can’t get valid patent protection in most of the world unless you file before any disclosures.” But it’s not just the work your employees carry out that you need to be mindful of. As Steve van Dulken, information and patent expert at the British Library remarks: “One essential thing to remember, though, is that if you commission someone else to do work it’s important that there’s a contract that states all intellectual property created belongs to you.” For example, if your logo or website is designed by a third party, they will by default retain the rights unless it is clearly stipulated in the contract. “If you aren’t clear about ownership in the contract then if they go bankrupt, the website, for example, belongs to whoever ends up with assets of that company,”

van Dulken explains. Often, though, it’s not all that clear what actually constitutes IP. “A frequent question I get asked is about presentations or methods of delivery; they say ‘I have a particular method I use for teaching’ or ‘I do this on my presentations and how do I protect it?’” van Dulken says. “I have to tell them ‘I’m sorry, but there is no way of protecting it.’” It’s easier with things that are tangible; writing, graphics, products and branding are relatively easy to protect. But with more abstract matters it becomes a little harder. Processes can be patented under certain circumstance. Van Dulken gives a simple example. “You can patent a method for making, for example, a stapler,” he says. “If it’s a new method for making a stapler, a different or better method, that makes it a more efficient or a cheaper stapler, then that could be patented.” But unfortunately there are many unique facets of your business that you can’t protect. For many enterprises, the nature of their service is what sets them apart, but there is no way of defending this from imitation. As van Dulken explains: “A business method or a technique is not patentable in itself and that’s a real problem.” However, cliché though it is, sometimes it is better to be safe than sorry. If you come up with something new that you feel isn’t well-protected under your existing patents or trademarks then Warrilow advises that

you still seek legal advice. “If you do come up with something new that may have an advantage, consult with a patent attorney,” he suggests. “It’s worth checking to see whether or not it might be patentable before you disclose it because you won’t get a second chance to protect it.” Just because you’ve got some defence on the home front though doesn’t mean that you’re protected on the global stage. Patents and trademarks apply by territory, and businesses need to make applications in every single one of those territories. But, given the fact that James Dyson claims that every invention he makes costs him £40,000 in international patents, is it a justifiable cost if you’re not ready to expand? “Start off by concentrating on your main market,” offers Warrilow. “There’s no point in paying to protect intellectual property in countries where you aren’t trading or aren’t going to be trading for the foreseeable future.” However, van Dulken has a slight caveat to append to this advice. “The only problem is you have to apply abroad for rights in those countries within six months of the design or within 12 months if it’s a patent – it’s what’s called the Paris Convention,” he explains. If, at a later date, you actually do decide you want to expand you will have lost your chance of exclusivity. “If it’s outside of those dates you might have missed the boat.”

“If you commission someone else to do work, it’s important that there’s a contract that states all intellectual property created belongs to you” Steve van Dulken, information and patent expert at the British Library September 2012

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Kent Computer Solutions: We are qualified specialists in diagnostic and PC repair covering a wide range of problems. Perhaps your machine is running slow because of Spyware/Viruses, Windows keeps crashing and has ‘lost’ all your documents, or maybe one of the kids has just stood on your laptop and cracked the screen! We strive to make good any challenges you can throw at us!  01233 680 086 / 0701 702 6003  

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04/09/2012 09:16


How do you find what makes people part with cold, hard cash? Nicola Barron Founder of Homemade London

The second instalment of columns from EB columnist Nicola Barron explores the difference between what customers say they want, and what actually pays the bills



here’s a song that my seven-year-old finds hilarious. It’s about a duck who goes up to a lemonade stand and asks the man running the stand if he has any grapes. “No, but we’ve got lemonade; it’s cold and it’s fresh, can I get you a glass?” says the man. “I’ll pass,” replies the duck and he waddles away. This carries on over several days until the exasperated lemonade seller takes the duck to the store and buys some grapes, offers them to the duck who declines with a “No thanks, but do you think this store sells lemonade?” One of the major realisations in my first year of running my business Homemade London was that the Duck Song is a pretty accurate portrayal of what it’s like to run a small business. Because there’s a big difference between what customers say they want and what they actually want. For example, the Sewing Café part of our business, where we offer our customers sewing-machine rental by the hour, is the aspect of our business that is the most talked about. We’ve had a full-page feature in the Independent on Sunday, have appeared on TV, and I still get tweets and emails from people congratulating us on our great idea. We even get visits from people around the world who want to set up their own Sewing Cafés. It’s an idea that’s truly captured people’s imaginations. How much money do we make from the Sewing Café? On a good week, £20.

While I doubt our Sewing Café will ever have our bank manager jumping up and down with glee, from a marketing perspective it’s been a massive success. With minimal outlay and by running it at times that never interfere with the profitable side of the business, we’ve gained publicity that would have cost us thousands to buy and have managed to attract many customers who first fall in love with the idea of a Sewing Café but mostly end up booking a workshop or a party with us.

The best piece of business advice I’ve received has been to ‘f*** up often, but f*** up cheaply’ So, if you can’t trust what people say they want, how do you find out what makes people part with cold, hard cash? For me it’s been a journey of discovery. The best piece of business advice I’ve ever received – which has stuck with me ever since – has been to “f*** up often, but f*** up cheaply” (this advice was given to me by my hairdresser, who, happily, hasn’t applied that philosophy

to my hair), and it’s held me in good stead. We’ve experimented with as many marketing initiatives as we can, as quickly as we can. We found tapping the large online populations of sites such as, Living Social and, to a certain extent, Groupon useful at the start to raise awareness, but the single most important thing we’ve done is to embrace social media – the ultimate low-risk marketing tool for any business. An example of this was our ‘Drawers Wars’ competition on our Facebook page, where we asked people to vote for their favourite pair of knickers made in one of our lingerie workshops. It drew in lots of new followers, as friends-of-friends were urged and incentivised to comment and like our page. And we regularly incentivise customers to sign up to our newsletter by running giveaways of low-value items such as tote bags and badges, (interestingly enough we always get a much better response offering low-value competition prizes). By taking the opportunity to listen and engage with our customers as much as possible, we’re beginning to get some sort of knowledge of what they want, and behaviour patterns are starting to emerge – with a few surprises along the way. Just this morning, we signed a lucrative deal with a film crew to hire our Sewing Café. Onwards and upwards… website: September 2012

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