The design and functionality of your blog should be determined by your blogging targets and goals. Not all blogs will look the same or require the same functionality. Getting exactly the right blog for your business takes careful consideration.
How people find content on your blog is call “navigation” and numerous common methods are used:
It’s fine to encourage all methods of navigation but it’s useful to decide on one method for the primary navigation. A useful exercise is to rank the different types above in order of importance.
Your primary navigation (menu) should be easy for visitors to spot, higher up the page, more prominent and allocated enough space. Your menu will usually be placed across the top of the screen (horizontal menu) or down the left hand side (left hand menu). I often see the menu on the right, which is acceptable, but remember that will be the first section of the page to be hidden on smaller monitors (and therefore visitors might need to scroll to reach it).
I often hear that the magic number is at is at least three times a week. However, the truth is the frequency of posts should be calculated based upon your goals and the return on your investment (time).
One great blog features is the ability to allow visitors to post comments on your posts. But don’t just use the feature because it’s available. Comments can be subject to abuse and you’ll need to monitor them closely. If you do want to encourage lots of comments, then remember to ask for them and always respond to people quickly. Alternatively, you might not want to allow comments or you may choose to turn them off for some articles only – all up to you and your goals.
To summarise – As with all marketing, there is no “one size fits all” approach. The way you manage your blog will depend on your goals, your company and the resources available. Your blog and your approach to managing your blog should be as unique as your business.
It seems to always be true that the only time that it’s easy to raise finance for a start-up is when you no longer need it. That’s certainly been my experience.
Over the years, I’ve raised money from family and friends, personal savings, government grants, business angels, venture capitalists and going public on the stock market. I’ve only ever once sought a loan from my bank and been offered it, but I turned it down.
I’ve also been an investor in a number of companies, with good and bad results. Here are a few thoughts that result from my experience on the whole process of raising money…
There are two factors involved when anyone decides whether to invest or lend you money – risk and reward. If you want to raise money, think long and hard about how you can persuade the potential source that the risk is low and the reward is likely to be high. You also need to think this equation through for your own personal well-being. If you have no idea of the risk and no plan should the business fail, you’re probably not realistic enough to start a business.
If your start-up is unproven, any bank finance isn’t that appropriate and if available, it will most likely be tied to a guarantee against your personal assets – which means you are the one taking the risk. It’s bad enough if your business goes bust, but losing your house too can turn it into a personal disaster. If you’re considering going down this route, think about selling the house, investing the money in the business and renting or remortgaging your house. When you do the sums, it will probably be a much cheaper source of finance, while having the same risk profile.
The time when bank finance, or finance from someone such as Lombard makes more sense is when the money will be used to purchase tangible assets, and the source of finance can take a charge on these assets.
If you have prosperous friends or family, they might be able to lend you money or invest in your business. Remember, though, if the business fails the result can be damaged relationships – and that might be a risk not worth taking.
Business angels and venture capitalists want the same thing as we all do – a risk-free, returns-rich opportunity. While this doesn’t really exist, you need to form your business pitch to get as close to that as possible. Don’t sell your proposition like you would to a customer; instead paint the picture of why and how they will get a major return. You can find lots of potential sources of finance by searching for “Business Angels” and “Venture Capital” on Google.
For a start-up with a strong offering, crowd funding is another option. It’s where you pitch your business proposition to the general public and build the capital you require from lots of small investments. Look at sites like KickStarter, CrowdCube and RocketHub to find out more.
Raising money is usually a frustrating experience, where persistence and hard work are the keys. Good luck with your fundraising – it can be the key to major growth and success.
Talk about a love-in. Anyone who’s anyone in UK enterprise was there - and then some. David Cameron’s giving a speech? You’re kidding, right?
And not only Cameron (as if his presence weren’t impressive enough). We also had George Osborne hinting at new policies for small investors, Vince Cable making cutting asides about the banks, Peter Jones speechifying sincerely, Duncan Bannatyne growling tongue-in-cheek.
So, you could say the launch of StartUp Britain was a fairly high-profile affair. Always a risk, that. It was slick, it was glossy, it had inspirational music and clever sloganeering (“by entrepreneurs for entrepreneurs”, “itunes for entrepreneurs”, etc). There was a fair bit of hype, to say the least.
But beneath the marketing gloss, what have we actually got? You can read the detail elsewhere, but basically we have a web portal linking to existing start-up resources; we have corporate offers for small businesses, many of which are already available elsewhere; we have the promotion of enterprise education, most of which was already happening; and we have the start of a mentoring system which aims to put business owners in contact with each other (this is new, but hardly an original idea).
Reading between the lines, it looks a lot like the Government has looked at StartUp America (launched three weeks ago), said “We need some of that” and approached a few of the entrepreneurs who carry most influence with small businesses. The conversation probably went something like this:
Government stooge: “Dave wants to launch StartUp Britain.”
Enterprise campaigner: “Great – we’re up for that. When? July time maybe?”
Government stooge: “No.”
Enterprise campaigner: “Ok, June then. I expect we could get something decent together by June.”
Government stooge: “Er, no. March.”
Enterprise campaigner: “But it’s already March.”
Government stooge: “Yeah.”
Enterprise campaigner: “Oh. Right.”
The whole thing has been pulled together in about three weeks by a small group of exceptional people, quite possibly to a schedule set by the Government. Yes, it’s far from perfect, but it’s out there now and it’s just the start of something. The PM and his chums will likely now move on to the next publicity opportunity (they’ve not actually put any money into this); meanwhile, the founders will have to make something more of what they’ve started. Believe me, these are not the sort of people who will want to let an opportunity like this go.
The thing is, StartUp Britain is actually something we need. In the last few years, a huge number of small business resources have sprung up online (Donuts included); how the hell are prospective business owners supposed to know what’s worth looking at? Until now, they’ve only really had Business Link serving this kind of function in a systematic way, and Business Link has always been very conservative about its recommendations (with good reason). StartUp Britain doesn’t have to be - if it’s the most useful resource, it should get on the portal. How you decide what is ‘most useful’ is a different matter.
Of course, there are plenty of gaps - we’d like to see more focus on helping people get to grips with the technical and legal aspects of setting up and running a business, for example (Law Donut, anyone?). But it’s a start, and the founders themselves admit they’re only “two per cent” of the way there.
Perhaps it was launched prematurely - but, hey, it’s been done in true fly-by-the-seat-of-your-pants entrepreneurial spirit, and the people behind it should be given a high five for just going for it. This is something “by entrepreneurs for entrepreneurs”, after all, so let’s support StartUp Britain and help to turn it into something genuinely helpful to small-business owners. I haven’t even mentioned the potential lobbying power of this group of people (it’s considerable) - in fact, it's in the unified campaigning for enterprise education where StartUp Britain might have the biggest impact. This is an opportunity for the UK’s enterprise community - let’s take it.
Do you suppose they’re going to remove David Cameron’s giant disembodied head from the home page now they’ve launched?
Two irritations - the language of enterprise and navel-gazing by the media
One thing that annoys me whenever I go to small-business events is the readiness with which everyone talks about ‘enterprise’ and ‘entrepreneurship’. On the one hand, they discuss the ‘fear factor’ of starting a business and how we can help people overcome it; on the other, they use the very terminology that puts people off in the first place. How many ordinary small-business owners associate themselves with the qualities of a ‘classic’ entrepreneur? Not many, I bet.
My concern is that by indulging the fantasy that everyone can be a restless, risk-taking, dynamic wealth-generator who starts another business - sorry, enterprise - with every million made, we distance ourselves from the reality of what it’s like to actually start and run a small business. It’s just one more step from this to Government business policies that offer a disproportionate benefit to a niche section of our total business community. Take last week’s Budget, for instance…
My second irritation is the media talking about the media. So I’m going to finish this blog by mentioning two ‘real’ people I met today, both of whom I’d love to feature on the Donuts in the future.
Eliza Rebeiro is 17. She started her community interest company at just 14, to campaign against the growing threat of knife crime to young people in south London. Of course, Eliza didn’t know she was starting a business when she launched Lives Not Knives. She just did it and it gathered momentum and now she organises events, provides mentoring to young people and has all sorts of other plans to pull young people away from the gang culture that surrounds them (including business education, a theme of the day). Eliza’s properly inspiring.
The other is the beautifully-dressed Adam King, co-founder of affordable bespoke tailor King and Allen. I have to declare an interest here - King and Allen is based down the road from my flat and I bought one of their suits with some redundancy money about five years ago. At the time they were plying their trade from some pokey rooms above, I think, an abandoned bank branch, and I was struggling to find a job. It’s a very nice suit.
Anyway, Adam’s story started with a successful world record attempt and - well, more of that another time. Meeting Eliza and Adam made my day. There are hundreds of thousands of excellent people starting and running myriad businesses all over the UK. Every one of them has a story worth telling and every one of them is deserving of support and recognition. As long as initiatives like StartUp Britain don’t lose sight of this simple principle, they should do all right.
Today sees the launch of StartUp Britain, a government initiative which will see the UK’s startup businesses receive support from the big corporates, and a new website to point them in the right direction for business advice.
More than 60 leading brands, including Google, AXA, BlackBerry and Microsoft, are backing the scheme and have already pledged a total of £1,500 of discounts and support packages to startups.
This week’s Budget speech was full of references to enterprise, start-ups and growth. But it remains to be seen just how much George Osborne’s budget will actually do to help small firms in the UK.
Like every Chancellor of the Exchequer, George Osborne has had to try and deliver something for everyone — and in business terms that includes local shop-keepers and high-growth technology firms, big businesses and the city.
But while there was some good news for small businesses — and lots of talk about helping entrepreneurs — many of the substantial changes look set to benefit large companies.
In fact, as Robert Peston noted in his BBC blog, this was a budget for big businesses.
First and foremost, the surprise two per cent reduction in Corporation Tax is good news for big companies. But what about the small business rate? That drops one per cent (as previously announced) to 20 per cent but there’s no extra reduction for small firms in this Budget.
The relaxation of planning restrictions will be music to the ears of some of the UK’s largest corporates such as supermarkets and construction firms. But will it really make a great deal of difference to the average small business?
George’s big moment was the announcement that fuel duty would be reduced by 1p, effective immediately. In addition, the planned inflation rise in fuel duty due in April was delayed and the annual 1p above inflation “fuel escalator” rise was scrapped until 2015.
But these gestures mostly represented a chance to grab — and make — the headlines with the clever message that this is the Budget that “fuels” growth. Do you see what they did there?
In fact, the price of petrol has gone up by 17p in the past 12 months and the price of diesel has risen by 23p. That’s the reality on the forecourt for small firms.
OK, yes we’re getting 21 new Enterprise Zones — but how these will work has yet to be revealed.
And yes, from April, there will be a moratorium exempting start-ups and all businesses employing less than ten people from new domestic regulation for the next three years. That’s just new legislation, mind.
And yes, the tax code is being simplified, with 43 tax reliefs being abolished. Call me cynical, but I would bet these are the 43 most obscure parts of the tax code — the removal of which may not radically reduce red tape for the average business.
OK, the government has agreed with the banks a 15 per cent increase in the availability of credit to small businesses. But how that translates into real lending remains to be seen. Does that mean that your business will get the lending it needs to invest in people, product development, equipment, stock — all necessary for growth.
Then there’s the merging of National Insurance and Income Tax. With NI costs rising, this sounds like a plan that could make a very real difference to SMEs. But it’s only a consultation. And the government is looking at merging the administration of NI and income tax, not necessarily fully merging the two systems. And anyway, it’s going to take ages…
Much of the talk about encouraging enterprise in the Budget was full of soundbites — tell the world, “Britain is open for business”, we are making the UK “the best place in Europe to start, finance and grow a business” and this is a “budget for making things not for making things up”.
But soundbites don’t fuel growth. And, as important as Wednesday’s Budget was, the effect of the sweeping cuts is about to be felt. With this year’s growth figures revised downwards, we’ve got a long way to go.
Rachel Miller, editor, Marketing Donut.
We have a full reaction to the Budget announcements in our news section. But here are a few brief responses:
Meera Shah, founder, Red Apple Delivery: “Overall for small business it’s fairly positive. The only negative is in terms of employing people - it hasn’t really given me any impetus to hire people. It hasn’t encouraged it. I think he’s done the best he can in very tough situation.”
Neil Westwood, founder, Magic Whiteboard: “I’m glad he’s addressed the fuel. I would have liked more but at least he’s done something about it. On my deliveries it’s costing me a lot more than this time last year. If anything it needs to be reduced by 20p!
“On the tax simplification they’ve got rid of 100 pages, but when you have 10,000 pages, it’s not many. They need to do more but it’s a good start.”
George Derbyshire, chief executive, NFEA: "The impression I got was that there was a range of announcements that were relatively limited individually but together made up a worthwile package. The measures on regulation, tax simplification, public procurement are all worthwhile.
“I think there’s been a reasonable stab at a growth strategy across a wide range of industry sectors and measures. Apprenticeships are a difficult sell but once the penny drops I think lots of small businesses can use apprentices very effectively.”
Chris Gorman, spokesman, Forum of Private Business: “It’s a step in the right direction but we need more radical, hard-hitting, widespread reform to really make a difference to the lives of small business owners… We wanted to some more drastic things in terms of radical tax and regulatory simplification.”
Brendan Flattery, chief executive, Sage UK: “Whether or not George Osborne’s Budget will amount to his promised ’Bonfire on Red Tape’ remains to be seen, but the three year moratorium on regulation for small businesses can only be good news for small business owners.
“The reduction in corporation tax is encouraging, and shows the Government is at least trying to match words with action. But despite this and other positive steps to encourage investment small businesses are likely to remain cautious in their optimism. A recent Omnibus survey we conducted found small business owners were left underwhelmed by the government’s efforts to get banks lending to business.”
The Wordle above illustrates the frequency of words that appeared in George Osborne’s Budget speech. The bigger the word, the more frequently it appeared – and so, we assume, the more important it is.
The biggest relevant words here are tax and new. Tax is understandable – there were a lot of announcements around the tax system and its simplification. New? Well, I guess the Chancellor took a lot of pride in announcing one "new" initiative after another.
We then have Britain (naturally) and growth. This, the Tories have been saying, would be a “Budget for growth”. Was it? Well, given that the Budget was accompanied by a downgrading of growth forecasts, we’ve got to wonder… Nevertheless, the words business and businesses are reasonably prominent, too.
Work, however, is not. Neither is manufacturing, despite the apparent emphasis on this sector. One surprisingly large word is also. Well, maybe it’s not so surprising – this was, after all, something of an ‘also’ Budget. How many times did the Chancellor say, like a conjuror, “I promised you this, but I’m also giving you this.”
Investment in growth
Tax and business rates
Tomorrow (Wednesday, 23 March) will see George Osborne’s second Budget as Chancellor. Whatever measures Osborne reveals tomorrow, they will be announced against a backdrop of slow growth, rising inflation and impending cuts.
Frankly, it’s not the best time to be Chancellor. As the latest results from Sage UK’s monthly omnibus survey reveal, some 44 per cent of small-business owners are feeling nervous about the impact the Budget will have on their business. Only 5 per cent of the 1,200 survey respondents were optimistic.
So, what are we all worried about? Sage’s survey identified increased National Insurance contributions, enterprise zones and bank lending as the key issues bugging small firms. The small business groups are calling for the business tax system to be simplified and red tape to be reduced - and tax and regulation are likely to be the hottest issues tomorrow.
The coalition government itself has promised the most “pro-enterprise” and “business-friendly” Budget in a generation. They’ve suggested that they’re going to ease employment law, cut red tape and reform the planning system, among other things.
But it remains to be seen whether the government can keep small businesses happy. Follow the Budget 2011 live on the Donuts and find out what happens.
In all my years as an advisor, I’ve seen businesses start up and fail more times than I would have liked. Here are a few common reasons why:
Stuart Hartley is senior consultant and manager of the Corby Enterprise Centre in Northants.
You’re a small start-up company with high ambitions but a tight budget, so how can you go about reaching that large, attentive audience you so desire? It’s simple— use email marketing.
Email marketing is a cost-effective, fast way to engage your customers and potential customers. Added to this, it delivers the highest return on investment over any e-marketing tactic available.
Being a small, new business, you might not have started on the path to creating and developing any lasting relationships with customers, which isn’t the end of the world, but it is something that email marketing can help you with. With each permission-based email campaign that you send and that your recipient opens, you are effectively establishing a trusting relationship with them.
Your email messages will, over time, make your customers feel as though they are an important part of your company. Email marketing campaigns give you the opportunity to inform your growing customer list about updates, product and service promotions, special offers and even changes and developments happening in your company.
Email marketing might not be far off from what your small business is doing already in terms of traditional marketing. Think about it, most businesses already conduct direct mail marketing in the form of specials, promotions and reminders, which means that they are already used to creating this type of material in print form.
Adapting to email campaigns from print is not a huge step, but it will save you a lot of money. It’s also worth pointing out that print marketing is not very targeted or easy to track, whereas email campaigns are highly segmented and targeted and can be tracked right down to who opens, or even forwards your message.
It goes without saying that start-ups often don’t have much time to market themselves. Most email marketing solutions offer pre-built templates and step-by-step guides to help you create an effective campaign in little time, which means the pressure is off you to create one from scratch. You should also be able to view your stats live, which makes follow-up campaigns much easier to manage.
Smaller companies often have more of a loyal customer following than larger businesses, simply because their contact with them is more personal. To be able to begin your email marketing campaign with a list of people who are already interested in you and what you have to offer is a major advantage that you can use to leverage your company to greater heights.
Georgia Christian is the editor of the online email marketing service Mail Blaze
The last two years have been tough. My business, Karacha.com is based in Bangor in Northern Ireland. It sells musical instruments, online and through my shop. Up until a few years ago, sales peaked around customers pay days. Now, people are much more cautious with their money.
Many of my customers now prefer to rent instruments rather than buy them. Our rental business has tripled, because parents are not racing out to buy ‘wee Johnny’ a saxophone until they know it’s more than a fad. Increased caution is to be expected, but it does not necessarily need to result in businesses closing.
In fact, despite the recession, many small businesses we supply have grown. And we’ve had more applications for trade accounts over the past two years than we did before the crunch.
The reason why many independent smaller shops have weathered the storm, I believe, is they are inherently run completely differently than large business. In a well-run small business, the owner has a good knowledge of all areas of the business. The larger a business becomes, the more cracks can appear in the foundations, cracks that can go unattended until it’s too late.
Certainly, in my sector, many businesses that failed were asking for it. Too many people believe the way to grow a business is to add as many locations as quickly as possible. Personally, my aim has always been to secure the biggest net profit on the lowest possible turnover. In other words – maximise my margins, not my turnover.
But in my sector (and in others, I’m sure) the focus hasn’t been on margin, more the drive to grow at all costs, with the misconception that with scale will naturally come profitability. This is why as soon as the recession hit, the smallest dip in turnover was enough to bring down some of the biggest chains.
I saw it firsthand several weeks ago. A company that held stock belonging to Karacha.com went into administration, entirely out of the blue. They had just moved into bigger and better premises and hired new staff to grow the business. All well and good, but they were balanced on such a knife-edge that the loss of the smallest amount of business resulted in them going bust.
In August I was being regaled with their success story. In October I found myself at their warehouse at 5am on a Saturday morning overseeing a considerable amount of our stock being moved by lorry before the administrators turned up.
If your business is worth a £100,000 loan, you or your business should probably be investing the same amount yourself. In the years leading up to the crunch, businesses were opening new premises and expanding too quickly without having a sound bottom line. Consequently, when the banks would no longer play the game, many businesses failed.
The general lesson from what I’ve seen over the last year is that small businesses should aim high, but don’t overstretch yourself or try to run before you can walk. You should seek to grow your business on profit – not on loans.
Adam Ewart, Karacha
There are very few certainties in life, but you’ll encounter one each time you start a new business – you will be smaller than your competitors. Whether by staff numbers, physical space or market share, unless you have a completely unique product you will be playing catch-up.
But this supposed shortcoming presents two opportunities. Take them and you’ll have a selling point your competition will struggle to match – agility and personal service.
Nothing hinders a business like size. Much like the giant boxer undone by his faster, smaller opponent, a start-up can take advantage of market movements far quicker than larger competitors. They often have their hands tied by hierarchy, limited by the fact they cannot make decisions without approval from “on high”.
A start-up will often be an individual/close-knit team trusted in their roles, with freedom in their responsibility.
It could involve writing a great new guide in response to a design flaw of a top-selling product or emailing an offer to trump a sudden price rise. It could even stretch to personally contacting a small number of individuals affected by a very niche item.
Whatever is necessary – you can get there first. First to market. First into customers’ minds. First to the rewards.
You can’t help but feel like just another number when you buy from large business, which is fine and dandy until something goes wrong.
They can employ hundreds of customer service staff on the phone and dedicated instore support, but you always know they’re tied by a pre-determined script and unable to truly grasp your frustrations and how it impacts your life at an individual level.
Strip this scenario of size and you have a personal experience that can make a customer feel treasured and comfortable – even when a problem is encountered. The ability to ask for staff by name, or something as simple as being remembered when you get back in touch, is incredibly valuable to consumers in today’s technology-driven world.
If you ensure everything is in place for a customer, from pre-purchase information to post-purchase support, you can really provide a worthwhile experience. This, in turn, guarantees that the word-of-mouth you crave will spread, and you will not remain a small start-up for long.
Some of you may be operating your own limited company. It might be just you, maybe you and your partner/spouse or you and your employees.
So how much can you pay yourself? Did you know that from April 2011 you can pay yourself a salary of £589 a month without paying any tax or NI?
At this level:
One of the tax-efficient ways to operate* as a shareholder of a limited company is to pay anything over and above the salary as dividends. A dividend is the distribution of ‘after-tax profits’, so it’s essential that the company has sufficient retained profits to pay a dividend.
If this rule is not followed, the dividend could be viewed as an unlawful distribution of the company’s funds.
No additional income tax** is due on dividends received where the total income of the person is below the higher rate threshold.
The higher rate threshold from April 2011 is £35,000.
Assuming that you have no other income, you can pay a divided from the company of £31,866 before you pay any additional income tax.***
Other income covers interest received, rental income received, additional dividends etc
On an annual basis you can pay:
*Subject to your specific circumstances. Check with your accountant whether this is best for you. This is a guide only.
**Corporation Tax has been paid on the company profits at 21 per cent until 31 March 2011 and 20 per cent from 1 April 2011. So while the above is free from additional income tax, Corporation Tax has been paid on the profit where profit = income less costs (the salary is an allowable cost).
***Calculation for dividend – here’s the maths!
There are many types of online fraud, but email scams are among the most prolific. Thankfully, many people are now more aware of online scams, but email fraud is still rife and it often targets small business. Here are two of the most common types of email scams:
Malicious fraudsters have now started targeting .uk domain names with falsified domain expiry warnings. Sadly, many of those who fall for this latest domain name con are small firms, largely because they do their own in-house IT management and are not fully au fait with some of the technical aspects involved.
Unscrupulous online criminals are manipulating this lack of knowledge. Many websites receive emails that warn of an imminent domain name expiry. A lot of small businesses, fearing they’re about to lose their domain name, pay extortionate fees to renew their domain unnecessarily.
The emails are usually called something like ‘Domain Registry Services’. They warn of an urgent renewal being required and will state the charge for a renewal. This charge will be much more than an average renewal. It will also be completely bogus.
Many small businesses don’t keep accurate records of when they bought or last renewed their domain name and they probably will not remember the original charge. This is probably why this scam works so well. If you receive one of these emails and are in any doubt, contact Nominet.org.uk (the .uk internet registry at www.nic.uk).
Most small businesses tend to manage and respond personally to business emails and can become targets for this renowned, but effective, email scam. ‘Phishing’ is the practice of attempting to gather sensitive, protected information by persuading someone to enter their private details online. The most common form of phishing scam is the fake bank email.
Internet criminals clone an official bank email address or manipulate the recipient’s email inbox into believing the email has come from a trusted source. Often the sender of these emails will appear to be the real company. The email will often say that “owing to a recent security threat to the business’s account, to ensure there has been no fraudulent activity”, the business must log in to its account with its username and password.
The email will contain a believable login section that mimics the real bank’s website template. If the business owner enters their details, online fraudsters can access a business’s private accounts and steal money or make unwarranted transactions in the business’s name. Real banks will never ask for personal account information via email, of course.
Be cynical. If an email just doesn’t seem right – don’t open it. Then report it. Many email providers enable you to report spoof emails and phishing attempts. One of the best things a small business can do is use an email provider with high-end junk and spam filters. Many cheap web-hosting services provide email services, but their filtering software may be substandard. It may be prudent to invest in a reputable web host or use a generic email provider such as Gmail, Hotmail or Yahoo!. If you receive a domain expiry email, contact your domain name supplier. It’s that simple. They won’t take umbrage.
There are many more scams other than the two I’ve mentioned. Caution, common sense and a little bit of knowledge will go a long way towards reducing the likelihood you’ll fall for an online dupe.
Daniel Offer is a partner in the Facebook messaging application Chit Chat for Facebook
Intellectual property – also known as ‘intangible assets’ – comprises patents, copyrights, trademarks, design rights and registered designs.
Some intellectual property rights (eg patents, trademarks and registered designs) need a formal process of registration and payment of fees by the owner to the Intellectual Property Office, to provide protection and monopoly rights to their owner.
Copyright and design rights arise automatically upon creation, but do not protect the owner from a third party’s independent creation – only from actual copying.
Intellectual property rights differ in terms of duration and procedures, but their effect is to ensure the owner has the exclusive right to use its rights and decide how those rights are used and exploited, which includes preventing any other party from using the same rights. This is extremely important for start-ups seeking to protect their assets, to achieve growth and potential investments.
Intellectual property rights only protect the expression of ideas, not the ideas themselves, so appropriate confidentiality agreements must be put in place to ensure initial actions do not jeopardize future intellectual property.
A start-up must have a process for identifying and capturing its intellectual property. To this effect an intellectual property audit carried out periodically is always useful. Once a start-up has identified its intellectual property, it needs to:
This article is for general purposes and guidance only and does not constitute legal or professional advice. You can read more information about protecting your intellectual property here.
Dr Maria Anassutzi, Anassutzi & Co Limited
Essentially, there two types of start-ups: the ‘pioneers’ that create a service, product or process that is unique and where there is no known competition; and the ‘settlers’, the more common type of start-up where the business enters a market where there are already many competitors.
The more mature a sector becomes, the greater the likelihood a significant number of businesses will be competing in that market, with a few, increasingly dominant businesses (sometimes called ‘Gorillas’) leading the pack.
What is key is the number and strength of competitors in relation to the overall size of the market you decide to target, along with your market’s rate of growth. If it is growing at twice the rate at which new competitors are appearing, your chances of success are high. However, pitch your startup against a growing number of strong competitors in a market that is stagnating or shrinking and your task of winning market share is much harder. And while it’s not impossible to do well, it means your offer has to be extremely compelling.
Market size is not something that increases or decreases in isolation. It is also influenced by the businesses that operate within it. For example, Europe’s air travel market was considered mature, with many established airlines operating within it. Then came along the low-cost carriers such as Ryanair and Easyjet, which not only took market share off the established players, but actually grew the market they served by encouraging people to take trips they might otherwise not have done if it had not been for the cheap fares on offer. In this way you can change the dynamics of the market you enter if your offer is significantly different.
My own business, Message Horizon, has entered a market that has many established competitors, but the market is still growing, albeit at a slower pace than previously. Here’s what I’ve learnt:
Jonathan Rodger is managing director of email marketing service Message Horizon.
We never had much money when I was growing up, but whenever my mum bought something, she made sure it was of the best quality she could afford.
I don't think we were alone – and I don't think that attitude is confined to the ‘80s. Most people would rather pay for quality than search out the cheapest. And the old adage "You get what you pay for" is just as true now as it was 25 years ago.
If you're good at what you do, you won't need to compete on price. People will recognise the value in what you offer and they'll be prepared to spend more. Or will they?
Often I meet small-business owners who struggle to earn a living because their customers won’t pay their prices. Consequently, they have to be the cheapest or discount just to make the sale because their customers don't recognise/appreciate the value of what they’re being offered.
And this is partly down to the small business’s sales process, partly what’s written on its website/ brochure and partly (largely if you're not doing the selling) down to the fact that their brand isn't communicating confidence or professionalism.
Fiona Humberstone, Flourish design & marketing
Who has never impressed their friends and family with a business idea?
But guess what? They’re biased! Your enthusiasm, along with your close connection to them, means this research will not stand up in the real world.
Although many start-ups develop detailed business plans before they launch, much of the research done for the business plan is limited. It’s either secondary research (such as desk research) or it’s biased primary research conducted among family and friends.
Having a great idea is not enough — it needs to be proven. Moreover it must be proven in a reliable way. By simply questioning biased participants, you risk going forward with unreliable figures.
However, many entrepreneurs still do it. Being realistic is the key to business success for start-ups. Objective research is vital; you need real opinions from your target audience. You must target the type of people that you plan to sell your product or service to. This is your opportunity to get inside the consumers’ minds and ask the important questions.
Objective market research delivers unbiased views, reliable statistics and valid results. Proper market research can also help you when you are seeking funding. Start-ups have a series of barriers to overcome when seeking credit. Reliable data is likely to make your business plan stronger and any pitches you make should be more successful.
So don’t make the mistake of just surveying those in your close circle. Independent research should be at the heart of a realistic, impartial business plan.
Many times I’ve heard people say, “I only do business with people I like” – but is this a sensible approach?
Most small businesses operate in markets of limited size. They have a finite amount of potential customers, with a range of competitors doing more or less the same thing.
So, for example, if a rude and unpleasant customer walks into your business, do you do business with them, even if you don’t like them? Would you rather say no and not be too miffed if they head off in the direction of one of your competitors?
You might not mind too much. You might say: “I wanted to set up my own business partly so I could choose who I work with”. The truth is, only doing business with people you like will limit your ability to grow.
Don’t get me wrong, if you can have a good, personal relationship with a customer, that’s the icing on the proverbial cake. To strive for that with every customer will limit the scalability of your business and your revenue opportunities.
Having good business relationships with customers, based on mutual trust, respect and understanding is certainly a goal to strive for. But that doesn’t necessarily mean you’ll become best buddies and regularly chat on the phone every day.
In the summer I started working on a project with a guy I got on very well with. Nights out together, drinking beer, good laugh, but the perfect person to do business with? No. When working with him I found him to be unreliable. He talked a good game, but failed on three important deadlines, which ended up costing me time and money.
Would I ever go for a beer with him again? Sure. Would I ever do business with him again? No chance.
Liking me as a person is not the same as liking the way I do business. Only doing business with people you like is restrictive. The best way to know how you’ll do business together is by doing business together. To build a business of scale, it’s impossible anyway to know all your clients personally. Getting on with each and every one of your customers doesn’t guarantee success.
Darren Leighfield, Director at EtcEtc Ltd