Experts Blog
Happy birthday to us!
July 29, 2010
This week we're celebrating the Start Up Donut’s first birthday - and what a year it has been! With a new roster of great sponsors, popular content, a much-improved blog and some 30 enterprise agency partners now on board as syndicators, the site continues to go from strength to strength.
My personal highlights are:
Successful use of social media and blogging
Our followers on Twitter continue to grow but, more importantly, we’re having more and more conversations with start-ups and more established small businesses. By being able to speak to you directly, we can find out what information is most useful to you and tailor the site accordingly.
We’ve recently improved our Facebook page, too, so there’s more interaction with and between our users. Recently we asked what your favourite things about being a small business are and we got some excellent responses ― come and join the conversation.
A few months ago we integrated our blog into the main site (it used to be hosted on Wordpress), which has fuelled growth in visitor numbers and boosted content on the Start Up Donut. We now have a larger number of blog contributors including many of our experts. We add a new post every day or so, keep checking back regularly to see what’s been added. If you’ve got something you’d like to share or get off your chest then send us your blogs.
A large number of case studies
What better way to learn about starting and running a business than from people who have been there and done it? We’ve added a large number of case studies covering topics from “How I set up a business in my 50s” to “How I attract customers”.
More recently, we’ve been adding sector-specific studies, which provide a step-by-step account of how to set up everything from a café or restaurant to beauty business.
The Business StartUp Show
In May we took a stand at the Business StartUp Show in Excel, London. It was great to be able to meet our website users and Twitter followers face-to-face, as well as get the opportunity to tell even more people about the Donut project.
“Mumpreneur” week
In the week leading up to Mothers’ Day we celebrated mums in business. We discussed the term “mumpreneur”, looked at the issues surrounding running a business when you have children and posted a range of interesting guest blog posts. The week was really interesting and we learnt a lot about the different challenges young women face when starting up. My summary blog post captured the highlights.
What have I learnt?
The main thing I’ve learnt is that a project manager’s work is never done! There are always ways to improve the site, different types of article to add, forum posts to reply to, blogs to write and people to speak to on Twitter.
I’ve also learnt that there is such a vast range of start-ups and small businesses out there that are looking for need-to-know information and advice that can help them to start and run their own business more successfully. Please let us know if there’s anything we should be doing to make www.startupdonut.co.uk even better. Here’s to the next 12 months.
- What’s been the biggest lesson you’ve learnt in the last year? What have your biggest business successes been? Please add your comments.
Spend wisely at the start
July 28, 2010
When starting a new business, the way that you spend your limited resources is critical to your chances of success. There are places where you can’t afford to scrimp, and there are places where you simply must not waste. You need to keep the chance of failure down by spending what you have very wisely.
- For a business with any risk, forming a limited liability company is a must. Then if the business goes down, loans and debts owed by the company won’t follow you. So set up a company by searching for “Company formation” on Google. It’s unbelievably cheap.
- There are other things to consider too. You need to keep all of your paperwork, including sales invoices and supplier charges, so that you will be able to do accounts and tax returns. But this doesn’t mean setting up a complex and expensive accounting system. It means employing a cheap book keeper for a few hours a week, or even keeping all of the paperwork in one tidy pile, so you or an accountant will be able to do the accounts when the time comes around.
- Registering for VAT, the Data Protection Act and possibly other specialist health and safety laws are other start up activities. Do these at the minimum possible cost and effort. These are overheads, not keys to your business success. You can nearly always find out everything you need to know with a few hours of research online. Everything possible like this should wait if it can.
- Don’t spend money on things that you don’t need yet. In a start up situation, tomorrow can take care of itself. The critical thing is to concentrate your money on getting your product right, making sure that your customers are happy, then selling like crazy. This is much more important than a slick operation. I’ve seen a number of people spend precious resources on preparing for massive success, only to have that success elude them because not enough attention was paid to sales growth.
- When you have a growing business with satisfied customers, then it’s the time to get better organised. As you grow, you will need to invest in systems to maintain quality, and you should also be able to drive down costs as a proportion of your sales. But all of that is for later.
It sounds easy, which it isn’t. However, following these tips will increase your chances of success. Good luck.
In summary:
- Spend the minimum on being legal and decent
- Focus on getting something customers want, and make sure that they are happy
- With that core in place, sell, sell, sell
- With sales growing strongly, invest in operations to maintain service and reduce costs
Chris Barling is CEO of ecommerce software supplier Actinic
How to commission a website designer
July 26, 2010
The first thing a potential customer is likely to do after meeting you, or hearing about your business, is look at your website.
If it makes the right impression, hopefully, you can move onto making your first sale and build the relationship from there. If your website falls short of the mark, it’s likely to put them off and they will go elsewhere.
So where do you start? If this is the first time you’ve needed a website, it can seem overwhelming. But, if you get a good designer onboard, it shouldn’t cause you any problems. You can benefit from their knowledge and experience, providing you commission them effectively. But how?
Your website must reflect your brand. It should be a tool that enables you to achieve your marketing goals. So before you even think about commissioning a web designer, you must know what your brand stands for and how your website fits into your marketing strategy, otherwise, you’ll waste precious money.
What’s your brand?
So what’s your brand? Think of it as your business’s personality – how it speaks, looks and behaves. It’s something far greater than a logo, typeface or a few colours.
The essence of a brand is voice, look and behaviour. Often, these are defined by brand values, so take time to work out what these are. Before you ask a web designer to start work on your behalf, be clear in your mind about your brand values. Draw up a list of five or six brand values, if necessary, seek advice from those with knowledge of your professional or commercial values.
Now think about your marketing strategy – how you will sell your products or services. Your website will be part of this, even if you don’t intend to sell online. Your website must seamlessly complement your other sales efforts, whether that’s cold calling, distributing leaflets, direct mail, newspaper adverts, using online social media such as Twitter or quite possibly a mixture of these.
Be clear about the contribution your website needs to make. Do you need it to sell, generate sales leads/enquiries, capture information or simply tell people more about your business and its wares?
Choosing a web designer
Your choice of web designer will depend on several factors – and budget will be a key. Big agencies don’t work for small fees, while a self-employed web designer could create just as good a website for your business anyway.
Decide on your budget and stick to it. You could search online for web developers, but I’d recommend seeking recommendations from other businesses you trust. Give them a call and ask about how happy they are with the service and value for money they received. Ask whether they encountered any problems.
Shortlist at least three potential designers/agencies; check out their work and ask what solution they recommend for your business. One of the important questions, of course, is price. That’s not to say go with the cheapest – it’s more a question of value for money. Negotiate a set price before any work commences and get all work set out in black and white. There should be no unexpected additional charges. Most web designers often offer ready-made packages, so make sure your website will meet your individual needs.
Briefing your designer
Once you’ve decided on a supplier, you’ll need to brief them properly. A good brief is the cornerstone of any successful design project. They don’t have to be wordy, multi-page documents; aim for concise and clear guidance on the form, look and content of the site you want, totally in step with your brand and marketing strategy.
When it comes to key decisions (eg site structure, fonts, colours, images, etc), the designer should explain your options, which will enable you to make well-informed decisions. If you’ve picked the right one, you should have confidence in your designer’s ability and opinions, but that doesn’t meaning settling for something you don’t like. You should also be prepared to have your choices criticised where necessary, as long as this is accompanied by suggestions for better alternatives.
The process might involve having to make a few changes (hopefully minor) along the way, but soon enough, come launch you should end up with an important tool that enables you to start and grow your new business.
Brian Copeland, creative director of the multi award-winning agency, Graphic Clinic
2020 Vision – Have you got it?
July 23, 2010
Got an idea for a business? Great! What are you going to achieve with it? Let’s fast forward to 2020. Now tell me what you see....
- Have you built a trusted brand?
- Do you have a national, or perhaps, a global business?
- ARE YOU A SUCCESS?
The vision of where you will be is all part of strategic planning. It’s something you must seriously consider before you take your business idea any further let alone launch it into the marketplace. BUT, what if you’re having trouble gazing into the future and planning your way? Where do you start?
Look at what you’ve done already. You should have carried out a little research, found a niche and run your idea by friends or family. Their enthusiastic reaction, combined with you ambition, will have turned it over and over in your mind, giving it an identity and inspiring you to create it.
So let’s now look at something that will give your wonderful idea a tangible form.
- Get a pen and notepaper and find somewhere to sit, relax and think. If you’re planning to set up in a partnership you must do this together, to make sure you share the same dream and want the same outcome.
- Scribble words, phrases, or short sentences that you feel sum up where you want your business to be and what success means to you.
STOP! I forgot to mention, be economical, it’s not a novel you’re writing but your vision statement and it must be wrapped up in no more than 50 words. It may only be one paragraph but it is so important and you must get it right. Within it you must encompass the essence of your business success, what you want to achieve and where you want to be in, let’s say, the year 2020. It should be exciting enough to motivate you and fire up others you want to involve in the venture.
I maintain that this single exercise – whether looking ahead for a year, five years or a decade – begins the planning you need to achieve success. This is something I believed when I set up Diva Cosmetics (as a new mother) back in 2000. I had a wealth of experience and expertise in the industry, I was focused on what I wanted, and knew exactly how I was going to get it. It was, in essence, written down in 45 words!
Running a business is challenging, decisions have to be taken and if you’re not absolutely certain where you’re heading it’s possible to stumble, lose your way and ultimately miss out on the success that should have been yours. I often referred back to Diva Cosmetics’ Vision Statement when confronted by difficult decision making. If opportunities led me away from my original strategy, I refused to be sidetracked. Establishing my goals was a priority at Diva Cosmetics. I knew from day one where I wanted the business to be and achieving £1m in the first 12 months was, of course, all part of the plan.
I made use of a planning system I call my Seven Business Disciplines to ensure I don’t deviate from the path towards success. Having sold the company, I now use this proven system to guide start-ups. Of course, there are many facets to my first discipline, strategic planning, but having a clear and considered vision statement is a very positive start.
Once finished, put it aside for a week or two. When you go back to it, review it, edit it and leave it again. Repeat this process until those 50 words mean what they say. Now you have your vision for success. Success doesn’t just happen it takes enormous effort and hard work. It also takes thorough planning, specifically strategic planning as a foundation to build everything else on, so now you see just how vital it is.
A lack of research and planning is often blames for business failure, so do make sure your business planning is watertight. If you’re daunted by that then consider getting advice from someone who’s already got what it is you want. Planning is crucial to your success, so take advice.
At this early stage in your business planning, make sure you set out your vision statement and be true to it. Focus on where you want to be with the clearest of 20:20 vision and then set off but never lose sight of it. Who knows where you’ll be in 2020? You do...because you’ll have planned it!
Emma Wimhurst is a motivational business speaker, mentor and author
What your bank will want to see when you apply for a loan
July 22, 2010
To help banks assess whether you’re a good risk when you apply for a loan, they will give you a shopping list of required information. Failure to oblige with the right information can lead to months of delay in getting an answer. So what will your bank want to see?
1 Business plan
In the relatively short space of time you have with the representative of you bank, it’s impossible to effectively convey every aspect and nuance of your business. A business plan can do that. It’s is a ‘convincer’ for the bank and a control and check for you. A plan can highlight flaws in your business idea and potentially save you from making an expensive mistake.
2 Financial statements
Bankers love numbers. Your annual financial statements may not mean much to you, but to the bank they offer a wealth of important information. Don’t apply for finance if your financial statements are out of date. Going to the bank any time greater than three months after your financial year-end without your accounts will simply result in the bank telling you to get them done.
3 Management figures
You may have your financial statements produced within three months of your year-end, but it’s still three months of trading since you closed your books and a lot can happen in that time. The bank will want to see management figures.
The format doesn’t have to be complex; it can be as simple as an Excel spread sheet to accountant-prepared figures. You can also get accounting software that easily prepares monthly figures for you, so there’s no excuse for not having up-to-date figures on business performance.
4 Profit and loss and cashflow projections
Your projections are your view of where you think your business is going to be financially in one, two and three years’ time.
The bank will want to see to prove your business can afford to pay back the loan or overdraft facility. They can also be used as a tool to monitor future performance against your estimates. And by preparing forecasts, you will be forced to think through your numbers first.
Preparing financial forecasts can be daunting, especially if you have never done them before, so seek help, perhaps from an accountant, if necessary.
5 Personal financial statements
Increasingly, banks are taking a greater interest in business owners’ personal financial position. Banks have realised that many business owners have raided savings and ‘maxed out’ on personal overdrafts and credit cards to keep their businesses going.
Banks will ask you to complete a personal monthly income and expenditure report and an assets and liabilities statement, which will give them an immediate overview of your financial position.
6 The list could go on
Each lending request will be treated differently and may lead to your bank requesting more information than I’ve outlined above, but this provides a good introduction.
Rob Warlow helps business owner’s deal with their banks to obtain funding or assist in re-building damaged client-banker relationships. He has written a book called ‘Loan Sharp: Get the Business Finance You Deserve’ which is available via Amazon or on his website.
Sales breakthrough and a huge dilemma
July 21, 2010
It is a really exciting time for Rico Mexican Kitchen at the moment. You might think I keep on saying this and that’s because business opportunities take twists and turns and there’s never a time to be bored! Having a strategy is fundamental to keep the opportunities and challenges in perspective, but there must be a great amount of flexibility and a desire to go with the flow and take any opportunity too.
The aim of my business is to introduce a new range of fresh, vibrant, genuine Mexican foods and now I’m looking for opportunities which bring volume.
We have achieved a listing with a prestigious supermarket chain, which is great news! What normally happens though is that they will list you in a limited number of stores and monitor the performance of the product and then, if it does well, they will offer to place your product in more branches. The problem here is that for some products, the minimum production runs are quite large and if they have a limited shelf life, the waste whilst in storage would be considerable.
So, if the shops are not enough to cover the minimum production run, we could end up running the production at a loss. I have identified other retailers which will stock the new products, but we still may find ourselves overproducing.
The really big question in whether we should go ahead with this listing and hope for the best, and in the meantime, work like mad to get more listings to give us the volume we need. Or is it best to delay the launch by a few months, get those extra listings first and THEN start producing?
I know that option two sounds safer but the real danger is that while we are working to get more listings, the original listing offer may disappear. This is not unheard of. It may be that a competitor may get the listing instead, or the buyer changes and their successor won’t choose our product. Difficult decision, isn’t it?
You can find out more about Marcela on the new interactive business website www.inafishbowl.com
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