As an online retailer, how do you know how your product is going to sell in the 'offline' market?
With 60% of new businesses now started at home, this is a question being asked more and more frequently. PopUp Britain reckons it has an answer.
The private sector funded scheme offers start-ups a chance to put their products to the test on the high street. The campaign’s first shop, a former estate agent premises in Richmond, Surrey, which had been standing empty for a year, played host to more than 60 start-ups in its first five months.
The not-for-profit campaign intends to make use of the growing number of empty shops on the high street in order to encourage small start-ups to grow by providing an affordable opportunity to test the waters with a 'real' shop.
The scheme’s latest project is based on the iconic King’s Road. The shop is a former electronics showroom which has been empty for three months. It has the capacity to house twelve start-ups at a time, and each will pay £240 for a two week stint to cover costs.
The latest shop, which opens on 9th May, is designed give fledgling businesses from around the country a low cost opportunity to test their products in an area that has famously played a key role in supporting independent British brands for decades.
As retail start-ups begin to realise that in order to build a solid brand they need to be in bricks and mortar, interacting with their customers face-to-face, PopUp Britain could provide just the opportunity they need. It neatly helps them keep all the advantages of online retailers like Amazon, whilst having a low cost route to the high street.
If you think you fit the bill, it’s free to apply: www.popupbritain.com/apply
Research published recently suggests the average working adult in the UK is “59% happy in their current job role”. Researchers commissioned by Surbiton High School asked 2,000 employees to rate their level of contentment at work in 11 key areas, “from pay and company perks to relationships with colleagues and management”.
According to the study, workers are generally satisfied with their holiday allowance and relationship with colleagues, giving ratings of seven out of ten for both. Perks received four out of ten, the lowest score, with employees believing they should be entitled to mobile phones, laptops and even private health care.
Respondents were unhappy about their promotion prospects, which were rated just five out of 10. They gave a more encouraging six out of ten each for level of pay, relationship with the boss, work load, working hours, working environment, social life, size of team and hierarchy.
14% claimed they would be happier if they were allowed regular tea breaks, while 34% appreciated being able to manage their own workload. One in three said they liked the feeling of being able to make a difference, while 22% wanted to be able to talk to people every day. An easy commute was also important to 35% of people, while 18% said they would appreciate yearly bonuses.
When it comes to profession, teachers were happiest at work (presumably the poll took place before Education Secretary Michael Gove called for pupils to work longer days and have fewer holidays), with the “satisfaction they gained from working with children far outweighing the negatives”. Secretaries were second happiest group at work, followed in order by engineers, accountants, drivers, shop assistants, caterers, trades people, lawyers and those working in customer care.
Career dissatisfaction continues to be a key reason why people continue to give up their jobs to start their own business, with numbers continuing to rise. According to Enterprise Nation, there was a 10% increase in new businesses in 2012 (484,224) when compared to 2011 (440,600).
So you’ve done it – you have decided to leave your permanent job, follow your dream and start your own business – great news! But now what?
Starting a business – and keeping one going – can be incredibly challenging in what are still very tough economic times. As an entrepreneur with a clear vision you know exactly where you want your business to go - but it can take a lot to admit that you don’t know how to get it there. This is where many small and medium businesses come unstuck. Where can you find the expertise you need at a price you can afford? To solve this problem, many small businesses are turning to interim managers.
No longer just the preserve of large multinationals or global conglomerates, an interim manager is a flexible, affordable way of getting the knowledge and insight you need to guide your business in the right direction. Whether it is help with sales and marketing, assistance with finance and regulatory matters or day-to-day operational and HR advice, using an interim manager is a quick and easy way to obtain the skills you need.
The other key advantage is that interims operate as a controlled, daily cost – essential for smaller organisations. With no sickness, holiday, pension or other traditional benefits to pay for, it is very easy for SMEs to forecast how much an interim will cost over a specified period of time, with no hidden extras.
If you do choose to hire this sort of resource, small-business owners must also be prepared for the fact that the interim will more than likely be over-qualified for the role they are doing. Don’t be intimidated by this; their breadth of experience means they can deliver for your business faster and leave you with a sustainable best practice approach to grow your business successfully.
This post was written by Nigel Peters on behalf of Alium Partners – global provider of interim management solutions.
Life as an entrepreneur is always a learning process, and you won’t grow without taking risks. Sometimes, you need to trust your judgement, but there are some mistakes you can avoid altogether. Here are 10 common mistakes you need to avoid.
Don’t neglect to provide a detailed business plan showing your projected outgoings and earnings. You may have a great idea, but this is not a business plan. Investors may be intrigued by your ideas, but they will want cold, hard evidence of their viability.
Make sure you’re specific when advertising. Know what your unique selling proposition is and target a specific market rather than trying to be all things to everyone. There are hundreds of, say, interior decorators, but if you have a speciality in, perhaps, decorative paint effects, use it as a USP.
Don’t have hundreds of business cards and brochures printed. They go out of date very quickly and can be expensive to produce. If your contact details change, the cards and brochures need to be amended.
Be careful whom you hire. It may seem like a good idea to get friends or family involved in the early days, but if they don’t have the qualities you really need, it will impede your progress. Identify the mix of skills you need and look for people who can provide long-term value to the business.
Avoid expensive websites and domain names. You could even try building your own business website using one of the popular DIY solutions, you might even know someone with more knowledge who could help you put together your own website. Don’t clutter up your website with information customers don’t really need to know about. Instead, tell them how you can solve their problems or provide them with things they need or want.
Don’t neglect planning and research. These are vital in ensuring the viability of your business idea, and a frequent cause of failure is not spending enough time finding out whether there is genuine demand for what you sell. Your pricing must be competitive and capable of providing a viable return.
Try not to set your sights too high, because inaccurate forecasting of market size is a common mistake for start-ups. You will need reliable cashflow and income projections to avoid expensive mistakes such as over-staffing, purchase of unnecessary equipment and lavish business premises.
Beware of the dangers of over-trading, which happens when you take on more orders than you can comfortably fulfil, or that can be supported by working capital and net current assets.
Make sure you have good practices to avoid tying up your capital as a result of poor stock control. Efficiency here means you have the right amount of stock in the right place at the right time – instead of the chaotic opposite.
Never take your eyes off the competition. You’ll need to respond to your competitors continually, so you need to remain aware of what they’re up to. To wrongfoot them, you could introduce new products or services. Always try to outperform your competitors. Find ways to be more special that they are.
Have you got any tips to add or any stories to share? We’d love to know what you think…
Liz Madden works for Champion Accountants
Fascinating research reveals that only 4% of small business owners call themselves entrepreneurs. Yes, just 4%.
A survey of 1,200 business owners, conducted by business software and services provider Sage, found that the vast majority of people on the small business front line feel no connection with the term “entrepreneur”.
The terms “business owner” (53%), “self-employed” (26%) and “businessman/woman” (15%) were the most popular terms people used to describe themselves.
Government enterprise campaigns galore have featured self-proclaimed and charismatic entrepreneurs as role models for those that are thinking of working for themselves. The fact that the word entrepreneur has been shunned by so many might call into question the idea that extraordinary success stories are the best inspiration for ordinary business people.
And TV programmes like The Apprentice and Dragons’ Den are, perhaps, part of the mythologising of the 21st century entrepreneur. Do you really need to aspire to be a multi-millionaire with a massive media presence to call yourself a entrepreneur? Or are small business owners being too modest in rejecting the term?
What do you think? Do you call yourself an entrepreneur?
Have a look at Sage’s infographic (click to enlarge) on the subject and tell us what you think below.
This question is particularly close to my heart. When I started my very first business venture at the age of 17 in Communist Hungary – where at that time 'entrepreneurship' was virtually unrecognized – some of the points you will read below were key to my survival. Now, 22 years later, having set up numerous enterprises and working with various entrepreneurs - I often ask the same question to my clients – what is the key to surviving your first year in business?
The points below are the result of my own experiences and those of others. I hope it will be of some value to you. So what is the key to survival?
1 Cashflow – nobody mentioned this when I started out, even nowadays when there is much more awareness of cashflow, people still focus too much on profit. Potentially, this could be a big mistake, especially in your first year of trading.
2 Determination – well, this is something I’ve always had, even as a child. In the first year some people around you will often say: “It will never work”. If your business idea is viable – go for it – and keep going until you succeed!
3 Resilience – I often say to my clients you have to be like a 'bouncy ball' when you are an entrepreneur… There will be ups and downs, but the resilience you have to bounce back will determine your success
4 Support by a coach/mentor – back in early ‘90s I didn’t have a mentor or coach – I do now. This is something I hear very often from my clients: lack of experience and clear goals are where a coach/mentor can help and save you lots of money by encouraging you to make the right decisions and helping you to grow with your business while reaching your own potential.
5 Ability to identify and focus on priorities – an entrepreneur’s life is a very busy one. In your first year of trading you’ll be particularly overwhelmed by opportunities and offers, which are very tempting. At times, you’ll find there aren’t enough hours in the day. That is the time when you need to consider what are the priorities and focus your energy on the most important ones.
6 Sense of humour – probably among the most important things you’ll need to survive your first year in business. There will be lots of happy, funny moments, but also slightly scary and stressful ones. This is when putting things into perspective and having a sense of humour is vital. It’s certainly helped to keep me going for the past 22 years!
Agnes Cserhati, entrepreneur, mentor, CEO and founder of AC PowerCoaching
Surrounded by the brightest and best of the UK’s entrepreneurs, business minister Mark Prisk MP launched rather a useful tool for the UK’s small businesses at BIS HQ – a definitive calendar of events to help small business throughout Britain for every month in 2012.
Targeted at pre start ups as well as established and new businesses, the calendar marks the first time all Britain’s best business events feature on the same site in a searchable format. There are 600-plus events listed already – and Mark Prisk is aiming to get 1,000 online in the near future. He said:
“We want 2012 to be the year of enterprise, where entrepreneurs can unlock their business potential. Enterprise events don’t just take place on one day, or during one week, but they appear throughout the year and across the country.
“We need to make sure people know that there is support and advice available, that it is easy to get, and it is often on their doorstep.”
The most up-to-date version of the calendar is online to search or download – and even upload your own event. Many events are free, so the calendar could well become an invaluable tool for you – and at the very least should benefit you with a couple of days of advice, inspiration and a range of handy new contacts. And if you're looking for local events, including workshops and networking, membership is free for small businesses. Get the benefits here.
It was depressing to see Business Secretary Vince Cable quoted as saying that the economy was in worse shape than under the previous administration and that a double-dip recession was a distinct possibility.
While the opposition immediately seized upon his comments, it could be argued that this was rather hypocritical as the current debt crisis and poor bank regulation were a direct result of their own policies.
The feeling of most entrepreneurs is that government is essentially powerless to influence the economy at the grass-roots level. Rather than decreasing regulation as they always promise, any intervention on their part, however well meaning, always seems to create even more obstacles to enterprise.
The solution to our economic challenges is clear. Rather than sit on our hands and complain, now is the time for entrepreneurs to get out there and sell our way out of the recession, bringing the rest of the UK's economy along in our wake.
But this will need to be the UK's real-life entrepreneurs, not the get-rich-quick chancers we see in the media, an image actively fostered by offensive and unrepresentative programmes such as Dragons’ Den and The Apprentice.
And while it is always a joy to inspire young people into a path of entrepreneurship, this is a long-term policy rather than the immediate help that the UK's economy needs.
Real-life entrepreneurs first felt the effects of the recession in 2008. Those that have survived followed the best practice that all businesses should follow. This includes the banks, which are always quick to criticise small businesses for their lack of planning.
Successful entrepreneurship involves reducing risk wherever possible by concentrating on the core business of the organisation and, wherever possible, finding the most profitable niche or vertical market. While cost-savings are important, the main focus should be on generating revenue and reducing the length of the sales cycle.
Rather than chasing brand new customers who promise big orders from exotic locations, the place to find immediate revenue is always your existing customers. They may be equally affected by the recession but willing to discuss mutually beneficial outcomes with people they trust.
It is also a myth that there is no money out there. This is the strong message I have received across the spectrum of industry, from private equity and venture capital companies, angel investors and those companies who have managed to grow successfully in the last few years.
You only need to scan the regularly published lists of fast-growth companies to see which industries have thrived in a recession; all of these companies and others like them have money to spend with the right suppliers.
I am also determined to do my bit to help the UK's entrepreneurs. Starting on November 1st in Essex, I will be presenting at twelve branches of the Federation For Small Businesses (FSB), events that are open to everyone.
The FSB recently launched a new initiative “Championing The UK's Real Life Entrepreneurs”, which focuses on the key issues facing its members. These include increasing the routes to finance, improving cash flow, adopting a new approach to regulation, reducing and simplifying business tax, incentivising job creation and opening up export markets.
The FSB's Head of Policy and Public Affairs, Andrew Cave explained to me that the campaign is designed to galvanise the small businesses in the UK to take a forward-looking and positive attitude towards the economy by increasing their revenue and taking on staff, especially the increasing number of unemployed young people.
He argues strongly that the opportunities and skilled, hard-working people are out there; all it needs is a positive attitude.
Originally published in The Financial Times. Copyright ©Mike Southon 2011. All Rights Reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker.
Some would have you believe that registering a company (“incorporation” – as opposed to simply starting a sole trader business) is an unnecessarily drawn-out ordeal in the UK. But, in fact, you can form a company in a day if you use the Companies House fast-track service. Otherwise, it should take 10-12 days.
As it’s Global Entrepreneurship Week I thought it’d be interesting to find out how the UK compares to other countries when it comes to incorporation. A quick Google search brought me to the World Bank’s Doing Business 2012 report, which compares regulatory conditions for “domestic firms in 183 economies”. It makes for fascinating reading, if you have the time. If not, the organisation’s website provides a convenient data summary of “the bureaucratic and legal hurdles an entrepreneur must overcome to incorporate and register [sic] a new [sic] firm.”
So what does it reveal? Well, things move much slower in South America and the Caribbean. In (socialist president) Hugo Chávez’s Venezuela it takes 141 days to register a company. In Brazil you’ll wait 119 days and in Haiti 105 days.
In Africa things can be similarly sluggish and Equatorial Guinea (137), Zimbabwe (90) and Togo (84) are stand-out examples. Intriguingly, in Republic of Congo it takes 160 days, yet only 65 days in the Democratic Republic of Congo (yes, democracy truly is a wonderful thing, folks). Incorporation takes a mere three days in Rwanda, the same time as in Singapore, but not as much as in the USA and Canada (both six).
In Afghanistan you can register a company in just seven days (apparently, there is a growing textiles sector). In Iraq it takes 77 days – ten times longer than in the Islamic Republic of Iran.
And what of communist regimes past and present? Despite massive entrepreneurial strides in recent years, in China it still takes 38 days to register a company. That’s eight more than in the Russian Federation, yet in Georgia it can be done and dusted in just two days. In Supreme Leader Kim Jong-il’s Democratic People’s Republic of Korea there are only about 200 private companies, each of which is heavily state-regulated. No data is available for how long it takes to form a company in North Korea or how much it costs…
In (the Socialist Republic of) Vietnam you can register a company in 44 days, while in the People's Democratic Republic of Lao it takes about twice as long. In Cuba there is estimated to be only 100,000 or so “cuentapropistas” (private business owners) out of a population of about 11.2m.
How does the UK compare to other European countries? Pretty good as regards Austria (28 days), Switzerland (18), Sweden (15) and Germany (15); not so good as regards Hungary (four), Belgium (four) Portugal (five), Norway (seven), France (seven) and the Netherlands (eight).
For the type of incorporation entrepreneurs might dream of you’re best heading off “Down Under”. In Australia it takes just two days and in New Zealand – less than one (it can all be done very quickly online).
During Global Entrepreneurship Week I urge you to spare a thought for would-be entrepreneurs in the Republic of Suriname, on South America’s north east coast. Here, according to the World Bank – astonishingly – it takes a mind-boggling 694 days to register a company. During that time there are 13 bureaucratic steps to negotiate (unlucky for some, indeed). Suddenly the prospect of having to register a company in the UK doesn’t seem so bad at all now, does it?
In a ceremony that gathered the best of young entrepreneurs of the future from across the world, Youth Business International (YBI) held its Entrepreneur of the Year awards last night in London. It's not often that a business event can have the audience rocking with laughter one minute and sobbing the next, but these awards are truly memorable for their inspiration – the ceremony held a few surprises, a lot of fun and not a few tears.
In a fitting prelude to Global Entrepreneurship Week (GEW), the awards celebrated some of this year’s brightest and best young business talent. Finalists included young people who have started and grown their own businesses from as far afield as Canada, Israel and India, often against hefty odds. The judges are principally YBI, the worldwide network that runs non-profit business-support initiatives for young people across the world, including support programmes in developing countries. With the Prince of Wales as president, the network helped 6,346 young people to start their own business in 2010.
Mrs Deki Wangmo, Woman Entrepreneur of the Year, has overcome centuries-old Himalayan tradition and rather more modern prejudices to create her thriving motor business in Bhutan. At the age of 15, faced with her family’s inability to pay for her education, Bhutanese schoolgirl Deki looked around for a local job, eventually training as a car mechanic.
Despite Himalayan tradition dictating that women stay at home, and startling those who felt car maintenance was not a job for a lady, Deki finished her training with honours in 2007 and left to set up her own tyre retreading business in Thimpu, Bhutan’s capital city. With the help of YBI partners, four years on Deki has established a profitable firm which now employs eight staff, including her husband. “Becoming an entrepreneur was my ultimate choice,” Deki says simply.
Now with three small children to look after, these days Deki also manages to act as an ambassador for local entrepreneurship – which itself is growing as enquiries are increasing from the interested ladies of Bhutan. She's famous now but "It's nice to be appreciated," is all she will admit, modestly.
Now Deki had made it to London, was she going to relax? a spa? manicure maybe? Sadly not – she was flying back to work after a lone day in the bright lights to rescue Mr Wangmo, who was holding the fort – the kids, the business and and their new baby daughter, Little Power – singlehanded. A strong man, I pointed out. "Oh yes," she said, beaming with pride: “Such a strong man. But he works for me.”
Winners had to show they had improved economic development in their community sustainably and measurably. And some of the YBI’s future stars have helped save the planet too – Environmental Entrepreneur of the Year Award went to Vaidhyanathan Rajamani, whose water projects firm V Cube saves 50,000 litres of water every day in India. Vaidhyanathan was so keen to be an entrepreneur that when his parents insisted he stay in education he ran away from home.
Selling T-shirts to make ends meet, he battled for years to get anyone to take his inventions seriously. Then YBI, in the form of a local Indian trust, did. Now he employs 37 full-time staff and 342 dealers. No mean feat, as Andrew Devenport, CEO of Youth Business International, points out: “Recent UN figures have highlighted the dire economic situation around the world, with record levels of youth unemployment blighting many countries."
In a moving speech that had assorted tycoons, self-made men and women and even flinty-eyed venture capitalists moist-eyed, Devenport highlighted the growing problem of youth joblessness and the risk of a 'lost generation' that looms ever nearer worldwide. He added: “It’s vital that more young people are encouraged into entrepreneurship to create jobs and drive economic growth.”
The main winner, claiming a prize of including $5,000 US, was Amir Asor, founder of Young Engineers in Israel. He's invented science lego – plastic models that show kids abstract maths and physics concepts in cheery plastic they can build themselves. He now hires 20 people and is training schoolchildren to be engineers through the lego games.
What inspired the Entrepreneur of the Year? Being diagnosed with learning difficulties as a child. As he sprang onto the podium to claim his $5,000 US dollars, the room of grandees exploded with applause and several people finally gave up and burst into tears. But Amir was, typically of his peers, concentrating on his job – quietly thanking his friends and mentors, and, of course, the kids he watches at play.
Next week GEW sees over 40,000 events take place in over 100 countries worldwide. Ten million of us will take part – among whom will no doubt be the secret stars of future business – and probably some people weeping at how great starting a business really is. Read our daily updates from Day 1 GEW Mon 14 November.
So you’ve decided to start a business. Maybe you’ve concluded that setting up a company is the best route for you to follow. There are a number of different methods of company registration, and a number of people favour the direct path that is registering through Companies House. After all, any incorporation application must go through Companies House at some point, and this is a relatively inexpensive method. However, in the long-run this might not necessarily be giving your business the best start possible.
The Companies House website has a number of pages that provide basic guidance about the incorporation process. However, you are limited in the level of advice you will receive. Beyond the initial formation, Companies House is unable to give you advice on important considerations for you and your newly set-up company. Conversely, many online formations agents offer free consultations with accountants and tax advisors as part of their service, to answer any questions you have as you start-up, for example, whether you need to become VAT registered.
An important part of incorporating a company is deciding on the Articles of Association – effectively, the rules that govern the running of the company. Formation through other channels, such as an agent or your accountant, may allow you to alter the company’s Articles of Association to suit your needs. Unfortunately, this cannot be done as part of the Companies House registration procedure, because model articles are forced on all new formations.
Additionally, the service that is offered is a basic incorporation. Although this will provide you with the minimum requirements when starting a company, you cannot purchase any of the extras offered through other channels. A Registered Office address, for example, is particularly important if you are forming a UK company from abroad or if you wish to protect your privacy when trading from your home. Although this is unattainable from incorporation through Companies House, many agents will provide this.
The major benefit that most start-ups see with registering at Companies House is the comfort that they are filing the application directly. Companies House is a UK government department, and therefore, a trustworthy source to hold all of your important data. On the other hand, it is not required to make stringent anti-money-laundering checks, as an agent would. Although some may see this as necessary to speed up the process for the individual, it does increase the possibility of your details being used to fraudulently set up a company.
Whichever method you use to register a company, it’s important that it is the right type of business for you. Although the process has been made easier with online applications, it is vital that start-ups know the obligations that come with a limited company.
If your business offers credit, you must make sure customers have a good credit history, as this will increase the chances they will pay you on time, every time. You could save yourself a lot of time and worry in the future by researching them at the start of your working relationship.
Ways you can check a new customer’s credit history include:
If you really want to do business with a new customer but your research makes you less inclined to grant credit, you can request advance payment.
Anita Brook is a chartered accountant and owner of accountancy firm Accounts Assist. She also helps businesses regain control of their cash flow with Debts Assist and helps entrepreneurs launch their own bookkeeping businesses with Brilliant at Bookkeeping.
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.
Choosing a name for your business can be tough, but it can be approached methodically. There are five main types of company name:
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
If you have doubts – why should anyone else buy what you have to offer?
You’re not that important, honestly.
Products have price points that are easier for the customer to guess. Services can be priceless.
People like paying for high-quality goods and services. Don’t sell yourself cheap.
Companies are slower than individuals.
Otherwise you won’t learn anything.
Who wants to have a meeting with a boring, negative person?
They all need doing, so just get on with them.
Most things are easier than you think.
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 light bulb went off for me when I read Marketing 3.0 by Kottler. For a brand to be authentic there needs to be full alignment with the culture in the organisation. HR is the new marketing.
Almost as an extension of that is the increasing belief that passion is the ‘X-factor’ in culture. My friend, colleague and business partner Yanky Fachler wrote about the need for “fire in the belly” ten years ago. Since then books such as Mavericks At Work, Poke the Box and The Thank You Economy all agree that passion can and should be the driving force for your business. Their argument is that in a world where everything is commoditised and similar, the only way to differentiate yourself is with your passion.
Since Marketing 3.0, Bookbuzz has covered a wide range of books in the HR and marketing space all touching on that subject. They include:
The Thank You Economy by Gary Vaynerchuk really hit it home for me. He would go as far to say that the next battleground for business after e-commerce and technology will be culture. The book is about extreme customer care (similar to “delivering happiness” and how to use social media. What do you think he thinks is most important for businesses, customers or staff? Giving his obsession with customer care you would suspect he would maintain that the customers are most important. Nope, he is adamant that your focus should be on your staff.
And he takes a leaf out of Why work sucks and how to fix it and applies ROWE (the results only work environment) approach. No rules; treat staff as adults. He talks about the need for a Chief Culture Officer, which is not to be confused with the Chief Curiosity Office that Little Bets and Egonomics would suggest. What else does he say?
As a start-up and as a small business, “culture as the new battle ground” is good news. This is where you can compete with big business. They can’t beat you on culture. If you don’t believe me, I suggest you read Killing Giants.
The government recently announced plans to create enterprise zones, featuring 100 per cent discount on rates capped at £275,000 spread over five years and access to superfast broadband.
The first eleven zones are in Birmingham and Solihull, Leeds, Sheffield, Liverpool, London and Tees Valley. This will soon be extended to 21, mostly centred in the big conurbations.
There was criticism that those areas that had not formed Local Enterprise Partnerships (LEPs) would miss out. My view is that this provides an excellent incentive for local councils, chambers of commerce and other stakeholders to show some entrepreneurial gumption and form their own LEPs, or something very much like them. If they deliver measurable results at minimal cost as the LEPs are trying to do, then government grants will inevitably follow.
Peter Deaves is Head of Policy at the Centre for Economic and Social Inclusion, a research organisation focused on tackling disadvantage and promoting social justice. In the April edition of their journal Working Brief, he questioned the effectiveness of earlier enterprise zones, based on a study by The Work Foundation, which claimed that the cost for creating each job was £23,000 and that 80% of new jobs were displaced from somewhere else.
Deaves says that government has learnt useful lessons from the earlier enterprise zone success stories, such as Canary Wharf and Trafford Park, but argues that success should ultimately be measured by the number of new jobs that the zones creates, especially for unemployed young people.
Few could argue with this logic or the potential role of the enterprise zones in reducing the twin burdens of taxation and regulation that entrepreneurs cite as the two factors preventing them from growing their businesses.
The solution is to provide incentives rather than impose extra regulation. The key issue always identified by small business associations The Federation of Small Business, the British Chambers of Commerce and the Institute of Directors is employment law.
These organisations tell me that they want entrepreneurs to be able to be significantly incentivised when hiring unemployed people but still able to let them go easily if they do not work out or circumstances change, without the burden of costly employment tribunals.
A major concern is that lax government regulation might enable a whole new generation of Ebenezer Scrooges, but my experience of meeting entrepreneurs is that most of them are more like Titus Salt, the Bradford-based manufacturer, politician and philanthropist, who built the town of Saltaire to house his mill workers.
I feel strongly that government should give eye-watering incentives for today’s social entrepreneurs who behave in the same way. People who work with the long-term unemployed and ex-offenders tell me that a key success factor is to take disadvantaged people out of their current environment by the provision of social housing elsewhere.
This is a highly effective way of enabling social mobility, both for the first generation of a family leaving home to go to higher education and for former drug dealers leaving their old neighbourhoods where there is significant peer pressure to re-offend.
The social entrepreneurs will be rewarded by not only doing good while making money, but also by adding a property business to their business portfolio. You only have to look at the successful companies building affordable student accommodation or the next generation of care homes to find an excellent business model to follow.
If entrepreneurs are as successful as Salt and the other Victorian philanthropists, then they will get other benefits that many of them secretly crave and which a grateful government could provide at minimal cost: a public statue and a knighthood.
The Centre for Economic and Social Inclusion can be found at http://www.cesi.org.uk
Originally published in The Financial Times. Copyright ©Mike Southon 2011. All Rights Reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker.
Or, to put it another way, outsource or die! Either way, the message is still the same: starting or running a business is tough, trying to stay focused on what it was you wanted to create, sell, service or make is core.
Everything else is fluff! Admittedly, important fluff – but fluff none the less.
A couple of years ago I was in Canada starting up a retail gift card company for a major Canadian retailer. The concept was sound, the partners were solid, the customer was signed, awesome!
Then it started to go a bit wonky, then it went really Pete Tong!
One of my biggest suppliers was sliding into administration and I worked with their board, their stakeholders and investors to try and rescue the company because I thought it was important for my company.
Big mistake : I should have moved on and fast. Instead I tried to salvage something that didn’t want to be saved and in doing so sank my own ship. Whole exercise as one of my buddies pointed out at the time was basically a real live fire MBA exercise: I lost some cash (quite a bit), I lost some sleep (also, quite a bit) but I gained valuable experience.
This is what I learned and how I now practise what I preach:
With so much bad news flying around about austerity, security and economy it’s easy to join in with moaning about things we really can’t change or influence. Ignore this ‘white noise’ and instead focus on your business and move forward with purpose. There are very few billion dollar contracts from China floating around but there are millions of small business leaders and we can get the economy back off the ground!
Start Up Britain is a new campaign by entrepreneurs for entrepreneurs. It was launched in March 2011 with the backing of the Prime Minister and the Chancellor.
One of the organisation’s key figures is our very own Start Up Donut home-business expert Emma Jones, founder of small-business support company Enterprise Nation, who explains: “Start Up Britain is a campaign run by entrepreneurs for entrepreneurs. It’s a response from the private sector to the Government’s call for an ‘enterprise-led’ recovery.”
Start Up Britain has released a short video clip charting its first three months. You can view it here.
So, to start off with, a little bit about myself... I’m one half of a dynamic duo that has set up our own little “business-ette”. I can’t call it a “business” because that’s the first rule of being a mumpreneur – we don’t run a business, we have a little hobby on the side that we’re hoping, if all goes well, might one day make us a little bit of money.
But, we do have buyers and sellers, a website and a proper spreadsheet which accounts for money in and money out (if I’m honest it’s mostly money out at the moment). We run monthly good-as-new children’s clothes, toys and equipment sales in our local area and we’ve just had our very first sale (so far, “so mumpreneur”, I know).
Like many mumpreneurs, as well as having two small children, I’ve got a day job, as does my “business” partner, who’s also six months pregnant. What we don’t have is a business plan, marketing strategy, business bank account, much spare time or, in fact, any idea about how to run a proper “business”. Sound familiar?
Over the coming months I hope to be writing about all our wonderful business successes, but in all likelihood I’ll probably be sharing our trials and tribulations, mistakes and dead-ends, not to mention steep learning curve that I guess most fledgling start-ups go through.
Feel free to join me for the ride — in the words of that other dynamic duo, “to the Batmobile…”!
Comment here: http://www.startupdonut.co.uk/forum
“Buying an existing business can be less risky than creating one from scratch. If the business has customers, it has income. Risk is also easier to assess because you can calculate costs, turnover and profit – and thereby predict cashflow”
Emilie Corbille of www.daltonsbusiness.com
“If you want to form a new company, you must send Companies House your registration fee plus a memorandum of association, articles of association and a completed IN01 form, which details the company’s registered office and the names and addresses of its directors (and company secretary, if applicable)”
Andrew Millet of Wisteria Formations
“By putting away some money from your earnings each month – say, 25 per cent of your gross earnings – you should have more than enough money in the bank to take care of your tax bills”
James R McBrearty of www.taxhelp.uk.com
“Even if you believe you have an excellent idea for a business, you mustn’t allow yourself to get fooled into a false sense of optimism. Test it thoroughly by doing some basic market research. Only then can you move forward on any sound basis”
Start-up author Kevin Duncan
“You should minimise your start-up costs because then you’ll stand a better chance of surviving that crucial first year. Also, it’s a good discipline to get into from day one. In business, you must keep your costs as low as possible – and avoid buying things you don’t need”
Martin Dunne of Sayers Butterworth chartered accountants
“The old saying ‘turnover is vanity, profit sanity and cash reality’ remains true. Businesses go bust in the long term through lack of profit, but in the short term, they fail because they don’t have enough cash to pay their bills on demand. Cashflow is the lifeblood of any business”
Chartered Accountant Howard S Hackney
“Having a written contract clearly sets out the roles and responsibilities of both parties, which is helpful when it comes to monitoring the relationship’s success. It can also act as proof if a supplier’s performance falls short”
Marie Kell of Andrew Jackson solicitors
“The onus is on the business to ensure staff comply with legislation. An act of omission by an employee is likely to have consequences for the business. In some circumstances, directors may even be personally liable. The consequences can be drastic”
Kevin Turnbull of Muckle LLP Solicitors
“Editorial is regarded as more believable than an advert. I’ve read that it’s 50 per cent easier to sell to someone who has read positive things about your business, products or services. And such publicity is usually no cost or low cost. Even if you have to pay someone to do your PR, gaining one piece of coverage per month can be much cheaper than advertising”
Jane Lee of IT PR specialist Dexterity
“It’s low cost and therefore less risky, because there aren’t any expensive premises overheads. You can also claim for a percentage of your domestic bills, for lighting, heating, telephone calls, etc. A home office means no commute, so you save money and time, too”
Emma Jones of Enterprise Nation
If you are considering starting a business, my first advice is to study some relevant and successful entrepreneurs. If you also have a burning desire to make the world a better place, you should definitely talk to some very particular people: vendors of The Big Issue.
It is a common misconception that The Big Issue is a charity; in fact, it is a social enterprise. The vendors first have to raise the cash to buy the magazine and then persuade people to part with their cash, the classic model for entrepreneurship.
The people behind The Big Issue are highly focused entrepreneurs with a social conscience. John Bird was raised in an orphanage, went to prison and slept rough on the streets. In 1991 he founded the magazine with successful Body Shop entrepreneur Gordon Roddick.
His foil is Nigel Kershaw, a printing expert who first became involved when they were looking at producing the magazine themselves. Then, they worked on various entrepreneurial ideas, such as Big Issue vendors manufacturing fair trade candles for The Body Shop.
Finally, they followed the path often taken by successful entrepreneurs: to have even more fun by investing in other people’s businesses and Big Issue Invest was formed.
Any entrepreneur with an established track record, a fully functioning management team and a genuine market opportunity can potentially grow their company by taking on inward investment.
My own advice is invariably for them to scale back their ambitions and try to grow the company organically from revenue, or do everything they can to retain at least 51% of their company.
If you question this sound counsel, you should spend some quality time with an entrepreneur who came to work one day only to be suddenly, and often correctly, fired by their investors.
If your business would benefit from inward investment, has the potential to make some serious money and also has a genuine social purpose, then you should talk to Kershaw at Big Issue Invest. They have been running a social enterprise loan fund since 2005 and have recently launched a new investment fund.
Their process is no different to any other venture capital firm. Experienced investment professionals will first examine your plan to see if it stands a good chance of making some serious money and therefore provide a healthy return for the investors.
Then, they will check that the enterprise has a demonstrable social purpose; the day-to-day business activities of the company must also make the world a better place. Big Issue Invest will measure and report to their investors on the enterprise’s social impact.
Kershaw is looking for people with the right stuff, or as he nicely defines it, are ‘six-thirty people’. These are business veterans, who spend eight a.m. to seven p.m. making money and then at 7.01 attend a charity event or undertake voluntary work.
Kershaw reckons that at six-thirty these people have the right combination of business and altruistic mindsets, and therefore might make successful social entrepreneurs and investors.
The terms of business from any investment fund always have specific requirements.
In the case of Big Issue Invest, this might include a commitment to interview or train a specific number of Big Issue vendors for future employment.
This makes complete sense to me; when I walk up The Strand I always make a point of avoiding eye contact with the irritating ‘charity muggers’ but always buy a copy of The Big Issue, as I am always interested in meeting aspiring entrepreneurs.
More importantly, the magazine is always a cracking good read and excellent value for money, well worth the £2 investment.
Big Issue Invest can be found at www.bigissueinvest.com.
Originally published in The Financial Times. Copyright ©Mike Southon 2011. All Rights Reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker.
When starting a business, one of the big decisions to make is whether to go it alone or start up with one or more partners.
There are pros and cons to both approaches, but one thing is for sure – it’s one of the most critical decisions you will make in your life. Not only can a lot of future prosperity depend on it, but it can also make a big difference to how happy you will be over many years to come.
If you’re on your own there’s no one else to fall out with; no one but you can decide to give up; have a family crisis or mess things up in some other way.
However, the right partner will usually double your financial resources and experience and you can encourage each other when times are hard. And the cocktail of skills you both have, along with the other factors, means that you’re more likely to succeed.
If you don’t have a partner and your business grows, you will need to employ staff. It’s a big jump from no employees to one (let alone more), both in cultural and financial terms. If there is more than one founder, it’s a smaller step.
When I was thinking of starting a business, for all of the positive reasons above I spent a lot of time looking for and wooing a business partner. I found someone with more entrepreneurial experience than me, who was great at raising funds and who brought with him substantial financial resources. Less than four years after we had started, we’d achieved a full listing on the London Stock Exchange and a business valuation north of £200m.
This experience can be balanced with plenty of other bad examples, of course. But it reinforces the point: deciding on whether to partner and who that partner should be is a crucial decision to make when starting a business.
Finding the right partner to help you start up your business more than doubles your chances of success.
First there’s resource. Your business will have more financial resources and a wider network of family and friends to help.
Then there are strengths and weaknesses. Very few of us have all of the talents needed to succeed in business. If you think this isn’t you, watch the X Factor for an object lesson in over-confidence in one’s own ability. With two people, you have a greater chance of covering all the things that matter.
Then, there’s morale. It’s hard to start a business, and with two there’s always one to cheer up and urge the other on.
Finally, growth is easier. The biggest first step in growth is usually recruiting your first employee. When there are two of you, the recruit only increases the wage bill by 50 per cent, which is much more manageable.
But there can be problems. Let me give you some real life examples. A friend of mine went into business with a partner and after several highly successful years, the relationship became strained to the point where both hated going to work.
My friend offered to buy out the partner, but with the relationship broken, the other party was uncooperative. Feeling desperate, my friend upped the price in an attempt to close the deal. Finally, all was agreed, but he had to put all of his assets on the line and take a loan from the other party. Unfortunately, the long period of wrangling had undermined the business. Unable to meet the loan repayments, my friend ended up losing everything – his job, his house and the business.
In another example, a different friend split from his business partner. The partner, again after much wrangling, took most of the existing business with an agreement to make payments on a percentage of sales. However, the business partner set up a subsidiary; made sales to the subsidiary at a highly discounted rate; then the subsidiary sold the products to the end customer. The result was the ex-partner effectively stole from my friend, although it was probably legal.
The problem with partners comes when you fall out. Of course, in the heat of enthusiastic start-up this seems a distant prospect, but it eventually happens in many cases. So I would offer two pieces of advice.
The first is to make sure your potential partner has integrity. If they don’t, were you to split, they will try to defraud you. I parted ways with my business partner. It wasn’t easy and it wasn’t a happy time. But because he had integrity, he didn’t try to “do me down”. In fact, despite the tensions, I still trust him.
A quick way to check if a potential partner has integrity is to ask them about the cleverest things they’ve done in business. If they boast about how they outsmarted (defrauded) other people, you can expect the same treatment if you ever seriously fall-out.
The second recommendation is to draft a “shotgun clause” between you. This allows, at any time, one partner to offer to buy out the other. The recipient of the offer can then choose to either sell or buy at that price, but they don’t have the right to refuse. This is a great way to get to a fair valuation of the business.
Despite the horror stories, partnership is still more than worth the risk. It’s better to have a problem sharing the pie, rather than have no pie, it just pays to take care. After all, you will probably spend more time with this person in the next few years then you will with your personal partner.
If you’re thinking about starting up, you must carefully consider whether to form a limited company straight away or hold off for a while and become a sole trader.
You may think forming a limited company will save you tax and must therefore be the best route. However, many start-ups incur considerable costs in their initial months. And even if you do not have sizeable initial outgoings, you should still factor in a realistic margin for error in your budgeting.
You will more than likely have a “learning curve cost” if this is your first time in business or if you’re going to be operating within a sector of which you have no prior experience. In either case, you should not expect the same return straight away as your more experienced competitors.
If you make a loss as a sole trader, it can be set against your employment income for previous years, which in all likelihood will give you a handy refund after the first tax year. If you make a loss as a limited company, it can only be carried forward and set against future the company’s profits. If the company never makes a profit, it will be wasted.
Even if you’re more confident that your business plan will be a success, you may still profit from waiting until you form a company. As a sole trader, you can build up custom, contacts, brand awareness and reputation in the business. From a tax point of view, this goodwill can be sold to the company. Future drawings from the company can be taken in the form of a director’s loan repayment, which will be especially beneficial if you expect to be paying tax at a higher rate.
You can set up as a sole trader by simply telephoning HMRC or registering online, whereas the route for a company formation is more complex. Ongoing accountancy costs are bound to be higher and Companies House will publish your company’s financial results for anyone to see – including your competitors, suppliers and potential clients.
Yes, if your salary and dividends are organised properly, a company can save you considerable tax. It can also limit your liability to company debts. But the decision is not so straightforward. If you want to protect your trading name, you can always form the company and leave it dormant at Companies House until you are ready to start trading.
A limited company can save you tax in certain situations, but it is not always the best way to start out. A brief review of the options with your accountant could save you time and money in the long run.