ALL YOUR BUSINESS QUESTIONS

by Jude Fiddler

Jude Fiddler is a writer, business mentor, lawyer and the owner of DLP (UK) Ltd, an employment law and HR firm she set up 20 years ago. As part of her work, Jude is also business advisor to over 500 businesses and in her spare time sits on employment law tribunals in Watford.

What is your Why?

The reason to set up a business is referred to as our ‘Why’. A Why is what drives us to our goals and sets us on the right path. A ‘Why’ can be anything – it could be to show the world our expert baking skills, to make a million pounds, to make our mothers proud, reduce the commute or achieve mortgage free living. These are all good Whys. Whys are personal and private but they need to be honest. If your Why is to spend more time with your children, but you end up working harder than ever, then something has gone wrong; you have been working to the wrong why - even with stacks of cash in the bank.

When I started my business, I didn’t have a clue. I had no experience, no master plan and no business qualifications. My business Why was quick and something I never saw coming. On an ordinary Wednesday, November 7th 2001 to be exact, my manager rejected a business idea I had presented to him, and which I later found crumpled up in his bin. Yes, it sounds shallow now but I had to prove that the idea would work. Now, some 20 years later, it is the very same business plan that I use to run my business. My goals and my Why have changed many times since then, including making my mum proud and being able to support my parents, but my current Why is the biggest yet. It’s the need to change an entire industry, and even if it’s just one employee at a time, every decision and strategy now only happens if it furthers my Why.

So what’s your Why and how do you measure your success? Do you use your Why to lead your decision making? I’d love to hear your comments or any further business questions, and if you email them to Judith@dlp. org.uk we will address them in this column in our next edition.

QUESTIONS

1. I am 54 and an empty nester. I have never run my own business. I have an idea that I think will work but wonder if I’m too old or if it’s too late to start something new at my age, and if it is a risk?

Absolutely not! Age is no barrier for starting a business. In fact, it’s likely you have a strong network, a great support system and a proven business idea you’ve spent time on. Maybe instead of overthinking your Why, ask yourself ‘Why not?’ A great exercise to do is to take 3 pages, on the first write ‘set up costs’ where you list the price of all resources you think you’ll need (hardware, email address, website, stock, products or materials). 90

On the second, make a ‘business plan’, where you will write your business time line - where and what your business startup fund will be, how long you estimate it will be until you get your first paying customer, pricing, and then a prediction date for profitability.

The third page is for ‘sales’. Brainstorm your ideas, adding in costs or timings where relevant, and you can include details of competitors and how your product is different.

The interesting thing about this exercise isn’t what is written on the paper but rather the difference between those who complete this task and those who don’t. If you find yourself making excuses and not yet ready to spend time completing 3 pages, it is unlikely ya needed to start a business.

2. I am ready for my first member of staff and doing really well, do you think an apprentice is the way to go?

Apprenticeships are something that need to be considered carefully. There are a number of different schemes offering different levels of support, finance or training. Since April 2021 employers need to register with the Apprenticeship scheme which is a good place to start. The government website [How to take on an apprentice - GOV.UK (www.gov. uk)] is another place with great information. Whilst many employers have success stories, do remember that taking on an apprentice is not the same as having a work-ready employee. Apprenticeships can require a large investment of time which can be frustrating to a micro business. They also have legal protection due to their age and contract so termination, if required, can be complicated. Most employers write an honest job spec but I would advise adding your own risk assessment to each task showing what could happen if the task was unsupervised, completed badly or missed. Add in solutions to mitigate the risks and draw an assessment from those you can’t limit or don’t have time to check to see if this the right move for your business. The bottom line is that taking on an apprentice is not something to do lightly, it’s something you need to research.

3. What are the best lessons or greatest skills you need in business?

Great question. The most important lesson in business, no matter what you sell or do, is showing up. Being consistent, being reliable, and offering good customer service sounds simple. If you get this right you are over 50% of the way there. The amount of people in small businesses who don’t anwer the phone or call back potential customers is astounding. Small business owners work so hard to get customers that the thought of not returning phone calls is absurd yet it happens every day. If you have an email or web enquiry page then make sure you answer it. Customers are hard to keep and easy to lose. Your repuation is something you need to protect.

4. I work in a part time in a City corporate environment and I am setting up my own business on the side. The idea is that when I can make a living wage on my own, I will leave and run my business full time. My question is, do I need to tell my manager what I’m planning and that I will likely leave in the next 2 or 3 years?

It’s not clear if your business would be in competition with your current employent. You should check your written statement of terms and conditions to see if you are able to set up your own business, or if any work would be a breach of your current terms. Many corporate contracts include the need to ask for written permission to work in any other role whilst employed - even where the two roles don’t compete and aren’t similar. The answer to whether or not you have to disclose your work or your plan is likely to be found in your contract. Without a signed contract in place, it will likely depend on the relationship you have with your managers whether you want to disclose this. There is no legal need to disclose a potential future date of leaving and it may not be something they want to hear so tread cautiously - once the cat is out of the bag there is no taking it back. But if there is no breach, and you still want to tell them this, it should be done in a way that assures them of your commitment and that it will not interfere with your own work. If you choose to disclose and then find yourself being treated differently it, may be worth keeping a diary and possibly seeking legal advice if you consider any treatment unfair.

5. I run a small company making baked goods, I am doing well and love what I do. My family are pushing me to expand and get better premises but I am not sure I want a bigger business; I just love baking and don’t want to be a boss.

Your concerns are genuine and need considering. If your Why is your love of baking then think carefully about how expansion may change that. Hiring a baker as a first employee means you are likely to take on more admin, accounts and sales. On the other hand, recruiting office staff may mean you can keep baking. Once you start to expand, issues start to get larger and will come at you faster. You would need to consider issues with staff, premises, employee rights (including sick pay, holidays and pensions), increased customer issues, problems with quality, personal service, logistics relating to increased stock, orders and deliveries, and so on. Expansion brings increased turnover and profit, but this in turn brings different and additional costs and pressures. It’s worth going back to your Why and making sure that it is factored in and any expansion takes place under certain controls and rules so that you don’t lose your Why or stop doing what you love.

Negative feedback can hurt but keep it in perspective. One complaint from a hundred customers does not necessarily need to be listened to. You certainly don’t need to change or bend to accommodate 1% of your custom base.

2. Profit is Sanity and Turnover is Vanity.

Business turnover means very little. A company with £80k income and with 50% margin is always stronger than a business with a £1m turnover and 4% margin even though both businesses make the same £40k profit.

3. Promote yourself.

In today’s business world, every business, no matter what the sector, needs to be a media company first and then work on their products or services second. The good news is that this is relatively cheap and easy. The bad news is that to be successful is a huge commitment in energy and time. Remember also to measure you return, and test what works and doesn’t work on your followers or friends.

4. Professional advice.

Professional advice: So many business owners take advice from the wrong people; quoting an accountant about data protection makes as much sense as seeking a medical opinion from a fishmonger. Only take business advice from those who are experts (not specialists) in what they do. Getting the wrong advice from the wrong people can create more problems than it solves.

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