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Posts for October 2011

Need money to start your business?

October 31, 2011 by Emma Jones

Small-business support company Enterprise Nation, together with PayPal and Intuit (the makers of QuickBooks), has launched Fund101 to offer up to £500 to start-ups and young businesses.

The fund was launched to meet the gap in the market for business-owners who need only a small amount of capital to get going or growing. It is open to anyone in the UK who is looking to become their own boss or young businesses looking to expand.

Over the past year we have heard loud and clear from start-ups and small businesses that their funding gap is the first £500, a sufficient amount to buy items such as business cards, a camera for taking product shots or maybe promotional flyers or a website. Thanks to PayPal and Intuit, this is the demand we are meeting.

Fund101 will provide non-repayable sums of between £50 and £500 via an online application process. Applicants can apply at Enterprise Nation by explaining how much money they need and what they will use it for. They will make a case for their business idea, answer questions put forward by the community and look to engage and encourage as many people as possible to vote for them.

The number of votes required to obtain the funding is equal to the amount of funding the small business is looking for - so to obtain £500 the applicant will need to secure 500 virtual votes.

On securing this, the funds will be deposited in their PayPal account with the only payback being that the successful applicant agrees to be profiled on the site a few months later to offer an update on how they're getting on.

An amount of £5,000 will be awarded each month with the funds provided by Intuit and PayPal as well as the small business community who will be invited to 'send money' via the site to go directly into the fund and help the next generation of entrepreneurs.

Emma Jones is founder of Enterprise Nation, a business expert, and author of ‘Spare Room Start Up’ and ‘Working 5 to 9’

Will your new business make any money?

October 31, 2011 by Kevin Duncan

Cash{{}}All successful business owners can work out very early on whether an idea is likely to make them any money. The skill prevents you from making poor decisions, stops you fooling yourself about likely success and is invaluable when you introduce new ideas post-launch. Here are some money-related points to consider.

Concentrate on the money – but don’t become obsessed with it

Wandering round with a spreadsheet all day won’t get your business underway. If the idea is sound, the money will follow. Don’t just go for cash as an objective – it will prove unsatisfactory in the long run.

Weigh up the service v product distinction

Are you offering a service, product or both? It is important to look at the distinction between the two. A product is tangible. A service involves interaction that often goes beyond the moment of purchase. A combination is acceptable so long as you know what percentage comes from each.

Work out how to have a high margin

Can you offer something that relies purely on your skill or experience? If so, you may be able to keep your costs down to near zero. This gives you great flexibility in pricing, and the amount of time you spend working each year.

Try to sell what you do, not materials with a mark-up

Products have price points that are easier for the customer to guess. Services can be priceless. Even the most inexperienced customer has a rough working knowledge of what something should cost. They will understand you have to make a mark-up, but there will be an upper limit that could hinder your profitability.

The price-quality equation: If you cost a lot, you must be good

People like paying for high quality goods and services. Don’t sell yourself cheap. Most people starting a business undervalue what they do. This is a mistake. Think carefully about your true value and make your prices match that.

Aim for 50 per cent repeat business within three years

It costs a lot less to gain repeat business than to start from scratch, so aspire to the high standards that generate it. 50 per cent is, of course, an arbitrary figure, but try to design something that encourages repeat purchase. This will save you reinventing your business every year, and all the cost and effort that goes with it.

Don’t be small-minded about money

Speculate and you will accumulate. Invest upfront, within reason. Be generous and put something in before you expect something back. Treat your customers well and pay your bills on time. Develop a reputation for generosity and fair dealing.

Be canny about requests for free or ‘win-only’ work

If you spend your first year behaving like a charity, you’ll go bust. It’s okay to provide a judicious amount of trial product or service as a taster for what you offer, but only to a certain level. Then you need to be paid.

Consider flexible pricing

If you achieve a certain (non-discounted) price for something, consider charging more next time. This point is specifically for service businesses. Start with a fair price and review it periodically to see if your market can tolerate higher prices based on the quality of what you provide.

This extract is taken from Kevin’s recently published book – What You Need to Know About Starting a Business

Kevin Duncan – business adviser, marketing expert and author

Must-read information about filing tax returns

October 28, 2011 by Emily Coltman

We’re starting to see reminders from HM Revenue & Customs (HMRC) that the tax return season is fast approaching. So what are the key facts you need to know?

Online

Most people who have to file a tax return do so online. It’s quicker and easier and means the deadline is later – 31 January 2012. That’s also when any tax and National Insurance will be due, whether you file online or use the paper form.

Paper forms

If you’re filing your tax return using a paper form, whether you’re filling that in by hand or printing it from tax software, you need to get that in to HMRC by 31 October 2011.

Registering to file online

What if the tax year that ended on 5 April 2011 was the first one for which you have to file a tax return? You must file it by 31 January 2012 if you’re filing online, either via HMRC’s website or through commercial third-party software.

If you want to file your tax return online, you must register to do so with HMRC – and that’s a different process from registering with them as self-employed.  HMRC, if you’re reading this – please could you combine these processes?

Why file online?

I recommend filing your tax return online. It’s quicker, kinder to the environment, and perhaps most importantly of all, commercial software and HMRC’s website will calculate your tax for you. That’s not to be sneezed at. Working out your tax, by the time you’ve included National Insurance, isn’t a walk in the park.

When to register?

If this is the first year you have had to file a tax return and you haven’t yet registered with HMRC to file online, do so sooner rather than later – and not just because it’s easy to forget to do it.

HMRC have to send you an activation PIN for the online filing service. They send this by “snail mail” and this can take up to seven working days to arrive.

You have to register with HMRC and be sent an activation PIN to use even if you’re going to use commercial software to file your tax return, rather than the HMRC website.

So why not make registering a task for later this month, or November, before the Christmas rush hits? Not only will you be very busy in December, so will Royal Mail, which might mean your activation PIN might get delayed in the post.

Don’t risk being late in filing your tax return. HMRC have changed the rules so that if you do file your tax return late, you’ll pay a £100 fine, even if you don’t have any tax to pay. (Historically, the fine was limited to the amount of tax payable.) And the fines increase the longer you delay filing. You will almost certainly also have to pay interest and penalties if you pay your tax late.

Don’t give more money to Mr Osborne than you have to. Register now and file your tax return on time. 

Emily Coltman ACA is Chief Accountant at FreeAgent, an online accounting system designed specifically to meet the needs of freelancers and small businesses. Try it for free at www.freeagent.com

Young Apprentice: feel the love

October 27, 2011 by Rachel Miller

We’re back in the boardroom with Sir Alan Sugar and his hench people — Nick Hewer and Karren Brady. But it’s not quite business as usual. For a start the candidates are a bunch of teenagers. And then, in his opening pep talk, Lord Sugar says, “I actually love you lot.” Woah there, Alan, steady on. He continues. “I love seeing if you’ve got that spark of genius.”

Aah bless. Perhaps the makers of Young Apprentice have realised that a bunch of 16-year olds might need a bit of nurturing before they are hung out to dry on national television — as they will be, one by one, over the coming weeks.

To be honest, after that brief flicker of humanity, it’s business as usual. Meet the candidates. They are aiming high, they are taking no prisoners, they are talking in clichés.

Let’s hear about the task. It’s ice cream. They have to make it, brand it and sell it at a profit.

Now see how some of the boys can’t operate the ice cream machine very well. And notice how the girls are rubbish at maths and can’t get their margins sorted. Watch the teams try to flog their ice creams at Southend and Chessington. Marvel at how the producers make it look as though the girls have lost even though they have, in fact, won.

The boys make a profit of £559.29 while the girls make £708.34.

This is all familiar ground. And the lesson is simple — get your prices right. The boys asked too little for their ice creams. The girls, meanwhile, demonstrated their upselling skills, adding expensive toppings and charging their unsuspecting customers more. They even charged 20p for a cone!

But what does this actually prove? The trouble with giving these young people — and indeed anyone — two days to set up a profitable business is that it does not allow any time for learning from your mistakes. Experience is a wonderful teacher.

And while they clearly need to brush up on their business skills, what the programme reveals more than anything is their appalling lack of people skills as they talk over each other and shriek into their smartphones from the back of cabs.

So the boys go down to the losers’ café for a cuppa in a polystyrene cup. I swear they used to have actual crockery. Is this a sign of the times? Or are the programme makers trying to make the losing team feel even more depressed?

Team leader Harry picks two scapegoats to come back into the boardroom with him. James is a big mouth from Northern Ireland (reminiscent of Jim in the last series) and Mahamed has struggled to be heard throughout the task. Poor Mahamed is so desperate to cover himself in glory that he claims it was him that came up with the pirate theme for their ice cream stall. James, whose idea it was, is having none of it.

Lord Sugar is almost squirming as he fires Mahamed — I think he actually feels bad. But then he turns to James and says with menace, “Watch it, OK? Watch it. Because I am watching you.”

It’s a tough world out there kids and you might as well get used to it.

The key to successful blogging - and why it’s worth the effort

October 27, 2011 by Fiona Humberstone

Blogging isn’t easy is it? You work all day (and sometimes into the night) with the day job and then somehow you’re expected to find the time to blog. And for goodness sake, does it even work? Is it even worth it? You hear horror stories of people putting in dozens of hours a week with nothing to show for it and it becomes scary.

Having blogged for my own business for the past four years I can categorically say that it does work. Blogging has helped me develop relationships with my current and prospective clients, showcase our work and gain recommendations. I’ve also gained countless speaking gigs from the back of it and forged some online friendships along the way. And on top of that, we gain a good chunk of enquiries and clients through the blog. It has certainly become a core part of my marketing mix and something I’d be loathed to do without.

That said, it takes time (that I don’t have) and energy (which as a mum is often in short supply) and determination. There are times when I just don’t think I’ll be able to find the time to blog, and times when I’m so busy that I just need to let it go for a week or two. But, the world doesn’t stop turning just because I don’t blog for a day or two.

After four years I hope I have a healthy attitude to my blog and social media. I know that I’ll get out what I put in. And I love to put in a lot, but not at the expense of my wellbeing. And I think it’s that attitude that really makes a difference.

I got thinking about the difference that makes the difference. Here’s my thinking…

Focus. A great blog with a strong and loyal readership is focused. The author is clear about what they write about, what their focus in and how that feeds through to their business. And if the blog is your business, this still matters (see my case study on Flowerona (www.flowerona.com)) for more info on how she has turned her blog into a business).

Consistency. Of design, frequency of posts and tone of voice. I guess it’s about being authentic. Think about your favourite magazine – you buy it because it has reliably consistent content around a theme. It speaks to you and it inspires and motivates you. It’s the same with a blog.

Design. Blogs with big readerships are well designed. It’s easy for readers to find their way around, pleasurable to look at and the branding complements the tone of voice.

Generous. With information, positive energy and knowledge. We read blogs because we love to learn. We love insights into someone else’s business of life. Positivity is key and a feeling of “not holding back” information also really matters here.

Passion. Passion is contagious. It keeps people coming back for more. It enthuses them to tell their friends and it helps them engage with you. Passion is one of the key words people use to describe my blog and I think if you look at most successful bloggers you’ll see passion right up there as a key attribute.

What do you think is the difference that makes the difference in the blogs that you read?

Fiona Humberstone, managing director of Flourish design & marketing

Is social media good or bad for your business?

October 26, 2011 by Matthew Forrest

Matt Forrest of the Sage UK Small Business Team

Social networking is changing the face of business. Experts continue to encourage all businesses to embrace the possibilities offered by sites such as Twitter, Facebook and LinkedIn.

But, frequently we read stories about employees getting sacked for posting libelous or malicious content, often about about their employers. A recent survey suggested almost half of UK businesses have banned social media sites during office hours.

Are such sites a help or hindrance? The answer, rather predictably, is both.

It’s true that businesses have never had the opportunity to reach so many potential customers and employees as they have now, thanks to online social networking. But left unchecked, some employees could post secret or private information or content that could seriously damage a business’s reputation.

Here at Sage we have policies intended to protect our people and our reputation. We want to be where customers are having conversations – which is why we embrace social media.

So, what should your social media policy encourage? Those helpful people at our HR advice service,  Sage People Advice, suggests you should encourage employees to:

  • Only post meaningful and respectful comments.
  • Use common sense and courtesy. It’s best to ask permission to publish or report on conversations that are meant to be private or internal.
  • Keep responses appropriate and polite – especially when disagreeing with others.
  • Never comment on anything related to legal matters the company may be involved in.
  • Remind your employees your policy is still relevant when they are posting about work outside their working hours.

Matt Forrest is part of the Small Business Team at Sage UK, Start Up Donut sponsor and provider of payroll and online accounting software to small businesses.

Some alarming stats about professional indemnity insurance

October 26, 2011 by Nick Green

We carried out some research recently and one of the most shocking findings was small businesses and freelance consultants delay purchasing professional indemnity (PI) insurance for an average of six months after setting up in business.

39 per cent of respondents didn’t purchase professional indemnity insurance until at least three months after they had been in business, with 20 per cent waiting two or more years.

The industries or professions most ‘at risk’ (because those we surveyed delayed purchase of PI insurance for the longest time) are design, engineering and marketing and communications. On average, 43 per cent of businesses in these three sectors waited two or more years before purchasing PI insurance.

By contrast, 90 per cent of accountants purchased PI insurance straightaway, with the remaining 10 per cent purchasing cover within six months.

It’s encouraging that more than half of respondents clearly recognise the importance of PI insurance, evident by their arranging it immediately. However, the fact that many waited until they’d been in business for some time was a shock.

Businesses that delay purchasing PI insurance are placing themselves at risk. A client could make a claim against them for negligence. PI insurance covers damages and legal defence costs – which can have a devastating impact if you lose your case and don’t have any cover.

It’s clear that there’s a stark difference between sectors, with those in more regulated fields such as accountancy and consultancy likely to purchase PI insurance from the outset. In contrast, the more creative sectors such as marketing and design, delay, which places them at higher risk in the event of a serious dispute.

  • We’d like to hear your views on PI insurance and other forms of cover, so please let us know about your experiences.

Nick Green, PolicyBee, professional insurance brokers

Posted in Business law | 3 comments

Your chance to win £3k worth of start-up kit

October 21, 2011 by Mark Williams

Business Crayon logo{{}}Would-be entrepreneurs with innovative business ideas and existing small-business owners with a clear vision for business growth are being called on to enter the Enterprise Now competition, for a chance to win a £3,000 prize.

Organised by business-to-business group-buying website Business Crayon, and supported by Start Up Donut, entrants will have up to 200 words to pitch their idea or business, which will then be subject to a public vote online.

One overall winner will receive a business kit worth £3,000 and be announced at the Business Startup Show in London on 18 November. In addition, 50 runners-up will receive at least £400 worth of business support. The deadline for entries is 25 October.

Click here to visit the Business Crayon website for more information and to enter.

How easily can you explain your business idea?

October 20, 2011 by Kevin Duncan

The original idea for a business needs very careful scrutiny. Few are brilliant immediately. Ideas are nothing if they cannot be enacted effectively, so clarity of thought at the outset is vital. As Einstein once said, if you can’t explain something to your grandmother, then you probably don’t understand it properly yourself.

Something may be clear in your head, but what happens thereafter? The journey from your head to the wider world is a strange one. You need to have a vision of what your business could be, work out what you want to do and find a way of explaining it clearly. Imagine you are going public and consider how you intend to let everyone else know. Your idea needs to follow this sequence:

  • In your head
  • Rough draft on paper
  • Refined computer copy
  • Explanation to someone who knows nothing about it
  • Explanation to someone who knows something about it
  • Refinement of the idea
  • Acceptance or rejection of the idea

Pitching on a postcard is a good idea. If you can’t explain in one sentence what the business will do (the ‘elevator pitch’), it’s probably too complicated. Keep it simple. Don’t let business speak affect your clear statement of the proposition. Some businesses are easy to describe; others are not. If it’s a well-known concept, you may simply say: “It’s a coffee shop.” No further explanation is needed.

If the business idea is not simple, you still need to find the simplest language to describe it. Saying you work in IT solutions doesn’t really explain anything. Don’t get bogged down in the detail at this stage. “It’s an internet business that provides people with X” is fine for the moment. If you are having trouble, try explaining the benefit your customers derive from what you offer. It may well not be the same as what you do. How you deliver the product or service is rarely as interesting as the problem it solves.

If this simple expression of the idea meets with general acceptance from you when you have lived with it for a while and from people you respect, you should be able to move on. Importantly, though, if there are significant doubts, you may need to scrap it. There’s nothing more boring than a person who insists on clinging onto a lame duck idea when it patently isn’t going to work. The most successful businesses have rejected many prototypes and initial thoughts. It’s a crucial editing skill that you need to adopt when starting a business. So, be precise about the idea, ditch all the bad ones, and refine the expression of it so that it is short, clear and intelligible by anyone.

This extract is taken from Kevin’s recently published book – What You Need to Know About Starting a Business

Kevin Duncan – business adviser, marketing expert and author

The truth about email marketing

October 19, 2011 by Matt Bird

The last thing busy start-up owners want is extra tasks and for some the very idea of setting up an email marketing system can seem daunting. However, it’s one of the best marketing channels available in terms of return on investment. Here I will cover three common email marketing misconceptions and explain why they’re no longer a barrier to your first email campaign.

1 “Setting up email marketing is tricky” - Email marketing is such a lucrative and competitive market that it’s driven advancements in ease of use and account availability. It often only takes a few minutes to get a basic account set up.

Additionally, actually setting up a mailing list of contacts takes so long that every day you leave it is a day wasted for accruing subscribers. With the rise of permission-based marketing, essentially it’s illegal to email people who haven’t opted-in to your list. This issue is compounded when you consider email providers who require double opt-in, so now the customer has to signup and confirm a subscription to your list. This means that any start-up joining the email marketing world needs to populate a list before doing anything else.

This ultimately nullifies any set-up times, meaning you can happily create an account with your chosen supplier, get a sign-up form on your website and leave email marketing for a month or two while your list (hopefully) gets populated with interested customers.

2 “The cost of email marketing is high” - You’ll never criticise competitive markets again once you see the impact they have had on email providers.

Free accounts are available from numerous providers, some of which actually provide an astoundingly good service considering you don’t pay a penny. They’re only free up to a set number of subscribers, with a small monthly free once you pass that threshold. This isn’t worth worrying about though, once you hit that threshold your bank should be laughing anyway with the additional return you can enjoy from a loyal email base.

3 “Sending an email-shot is complicated” - Google something like “email marketing advice” and you’ll be met with a deluge of Top-10 and how-to guides. It’s a little intimidating, but don’t be put off.

Email marketers have realised the value in smaller businesses and have invested a huge amount of time and resources to provide the information you need to start emailing hassle-free.

Most email marketing providers now have step-by-step guides and templates for you to follow for your first few campaigns, and everything really is at your fingertips. To demonstrate the advances in usability, a complete novice could select a template, put their message in and have an email sent in about 20 minutes – a tiny investment potentially for such large gains.

Once you’ve got to grips with the basics, you’ll find you actually enjoy finding new features and customising templates to be more in line with what you need. With basic reporting available in most email clients, you don’t even need proper analytics set up on your website to dive into the email performances.

I hope these tips help and you feel confident enough to dip your toes in the vast ocean that is email marketing. If you’ve got any other fears about emails or indeed have helped others start up new accounts, comment below and let us know.

Matt Bird of printer cartridge supplier, StinkyInk

Why brainstorming is good for business ideas

October 19, 2011 by Viv Oyolu

I am sure you are like me, watching the present series of Dragons’ Den, either shouting ‘NO!!’ at the TV or laughing out loud at some of the ideas presented to the Dragons.

If only someone else had told them before they went on the show their ‘business’ is really not a business. Better still, they should have sought independent evaluation of their idea before they wrote a business plan. That would have saved them disappointment and humiliation on national TV.

If I knew any of them, I would have suggested brainstorming the idea first before writing a business plan. Brainstorming is about gathering information, stimulating creative thinking, generating and developing new ideas – a technique established businesses have used over time successfully. And if you are wondering what the benefits are for you as a start-up, here are three:

  1. Save money - On Dragons’ Den when you hear how much money has been sunk into a business, you cringe. If only they had taken the time to brainstorm, that money – and time – could have been used more effectively.
  2. Identify another ‘idea’ within the idea - Being so close to an idea can hinder creativity sometimes. And brainstorming is most effective with people ‘outside’ your circle of friends and family. This is because naturally, and more often, you think and like the same things and therefore are more likely to view the idea in a similar way. But brainstorming with new people (strangers in some cases) can stimulate new ideas because they are looking at the idea from a fresh perspective.
  3. Focus your mind - As start-ups, there are usually a combination of two, three or four ideas to offer potential customers, which is probably not realistic financially or practically being a one-man (or woman) band. Listening to other ideas helps crystallise your idea and gets you to focus on serving a ‘niche’ market. In addition, you may even stumble on an additional revenue stream.

When you think about it, you’ll probably wonder why you hadn’t thought about it or done it before. But it’s never too late to brainstorm if you decide to; and if you can recruit some volunteers for a session, here are a few things to keep in mind.

  • The objective of the session – identify the gaps (or areas) where you are unsure and look for answers to key questions.
  • Attitude – be prepared to accept what people have to say – the good and the bad. Keep in mind what your overall objective is – to get the best offering to your market.
  • Next steps – have someone record all that’s being said on a flip chart, because that’s gold dust for evaluating your idea and deciding what next steps to take.

Viv Oyolu owner of Bounce Point

Exercise your democratic right – vote Donut

October 14, 2011 by Mark Williams

The good web guide awards{{}}Here at Donut Towers we don’t normally go in for self-congratulation. We enjoy our work, prefer to get on with it quietly and take seriously the responsibility we have to help new and established businesses, which, at the end of the day, is what it’s all about.

Personally, one of many things I enjoy about editing the Start Up Donut is reading the many favourable comments people send us or leave behind on our pages. I’m sure my Donut colleagues feel the same way. We’re all greatly encouraged by the record number of visitors we now attract, which continues to grow month on month.

But occasionally other things happen that really make you realise just how much people appreciate the Donut sites and really “get” what we do.

So we were all chuffed to bits to hear recently that Start up Donut has been shortlisted for the Website of the Year awards being run by www.thegoodwebguide.co.uk

The organisers have told us they received a huge volume of entries, and the standard was extremely high, but Start Up Donut is in the running for overall winner of this prestigious award. Esteemed perfume entrepreneur Jo Malone will make the announcement at the awards reception at The Royal Institution in London in November.

Our fingers – and everything else – remain crossed.

The event organisers have asked us to let our site users (that’s you) know that they will also be announcing the winner of The People’s Choice award, voted for by, erm, the people (again, that’s you). So, if you’re a fan of Start Up Donut (and the other Donut sites – they’re one and the same), you can vote for us here.

Advice about naming a business

October 13, 2011 by Kevin Duncan

Choosing a name for your business can be tough, but it can be approached methodically. There are five main types of company name:

  • Descriptive (Premier Sandwiches)
  • Owner-named (Dave’s Sandwiches)
  • Multiple owner-named (Johnson Hobson Wilson Potato Peeler)
  • Pointless initials (DS Ltd.)
  • Irrelevant but memorable (Orange, as in the mobile phone company)

If you wish to portray a solid but unremarkable image, the descriptive approach may be justified. However, it is worth noting that inventive branding has permeated almost every product category these days, so you should be as brave as you can be.

The second option (ie owner-named) may be relevant if you have a reputation from a past life and it will be helpful for past clients to know that it’s your business. In the case of Dave’s Sandwiches, this is unlikely, but if you are a prominent expert in a specific field, it may be relevant.

Multiple owner-named business names are unwieldy and hard to remember. As a start-up this is unlikely to be an issue, but if you are going into business with several partners consider the pitfalls of choosing a long-winded name just to satisfy the founding partners’ egos. It may not benefit the business, so resist this route if possible because it usually just leads to hoots of derision.

Option four, pointless initials, is also highly undesirable. A quick glance at the phone book reveals thousands of these acronyms. Initials say nothing about you and are unremarkable, so resist using them.

The last option, irrelevant but memorable, can be fun if done well. For example, if you work in a fairly dry sector, the use of a fun, lively name might make your business more memorable. All of this is of course a matter or personal taste, but usually it really is worth dreaming up a distinctive, memorable name for your business.

This extract is taken from Kevin’s recently published book – What You Need to Know About Starting a Business

Kevin Duncan – business adviser, marketing expert and author

Train to gain

October 10, 2011 by Jack Ford

Jack Ford of the Sage UK Small Business Team

Sage runs UK-wide training courses to ensure our customers maximize the benefits from their software. Increasing your employees’ skills through training can benefit their professional them and your business.

Too many businesses see training as something they can cut back on to save money. A recent survey by the Chartered Institute of Personnel and Development suggested smaller firms valued learning and development less highly than larger businesses.

You may be reluctant to spend money on something you perceive to be a luxury, especially in these tough economic times, but research by the UK Commission for Employment and Skills shows that in the last recession businesses that invested in their people’s skills were two-and-a-half times more likely to survive.

Training can bring about an increase in productivity, profits, motivation, loyalty and greater customer satisfaction. “It makes employees feel they’re more valued and they’re more likely to engage with their work as a result,” says HR advisor Ann Haydock. “They’re more likely to stay with your business, too – saving you time and money on recruitment.”

There are no legal requirements to train, but certain regulations encourage companies to foster a training environment. John McGurk, CIPD advisor for learning and talent, says: “The regulations on allowing time-off for training are like the flexible working regulations; a light-touch ‘nudge’ aimed at helping people to increase their training and development. We see it as a sensible step in encouraging individual employees to play their part in developing their own skills and talents within the competitive workplace.”

Jack Ford is part of the Small Business Team at Sage UK, Start Up Donut sponsor and provider of payroll and online accounting software to small businesses.

Posted in Employees | 2 comments

10 Crucial pieces of advice about starting and running a business

October 05, 2011 by Kevin Duncan

1.  Assume you have something to offer

If you have doubts – why should anyone else buy what you have to offer?

2.  Take the issues seriously, not yourself

You’re not that important, honestly.

3.  Sell yourself, more so than materials with a mark-up

Products have price points that are easier for the customer to guess. Services can be priceless.

4.  Charge a premium price and do a great job

People like paying for high-quality goods and services. Don’t sell yourself cheap.

5.  Remember that corporate time moves slower normal time

Companies are slower than individuals.

6.  Listen more than you talk

Otherwise you won’t learn anything.

7.  Be more positive than everyone else wherever you go

Who wants to have a meeting with a boring, negative person?

8.  Don’t distinguish between nice and nasty things to do

They all need doing, so just get on with them.

9.  Whatever you plan to do, start now

Most things are easier than you think.

10.  Remember: everything you achieve, you have done yourself

Don’t just plough on indefinitely. Pat yourself on the back every now and again and enjoy your success.

Find out more about Kevin’s latest book – What You Need to Know About Starting a Business

Kevin Duncan – business adviser, marketing expert and author

The key challenges SMEs face

October 05, 2011 by Abby Goode

Abby Goode of Sage One

For some years, Sage has been speaking to SMEs to find out what key challenges they faced when setting up as well as asking what the key challenges were once they were up and running. We used the feedback to develop Sage One, our online accounting service for small businesses.

We travelled all over the country to visit small-business owners, as well as attending many networking events to speak to even more of them (and their accountants). 

We set out (from a product development point of view) to establish how they manage their business accounts and their business in general; whether they have staff and how they pay them; how they manage the sales and purchase invoice process, etc. It was great speaking to so many businesses and really getting a feel for what they wanted from their business software.

A common charge that emerged from our discussions with owner-managers was a perceived general lack of support from the banks. In fact, we found that small businesses are reluctant to use banks for lending and will often seek alternative sources of funding. This is worrying, what with the current economic climate and with so many easy-access, high-interest, high-risk lending companies appearing. The banks should be helping small businesses – not working against them.

Through attending events, we also met a number of bank employees. They informed us that the process of lending money was changing from a local decision-making process to a national one. Where has the relationship with your bank gone?

Protect your business

Keep a close eye on your cashflow. Knowing how your business is performing is crucial – especially if you need to apply for a loan.

Become familiar with the reports future investors will want to see. A profit and loss report and a balance sheet report will show how your business is performing and help you to work out its current value. Sage One Accounts allows you to produce these reports without having an understanding of accounting or having to manually calculate the figures.

Talk to your customers, too. Find out what they want from your products and services. Can you augment them or add value by offering a bespoke service, for example?

It seems obvious, but chasing outstanding payments is key to maintaining healthy cashflow. Similarly, you don’t want to get on the wrong side of your suppliers, so stick to the agreed payment terms.

Abby Goode is part of the Sage One team, provider of cloud accounting software to sole traders, small businesses and their accountants.

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