Would you like your business to reach £1m turnover? Most business owners would answer yes, but 96% of them will fail. Only 4% of businesses reach £1m turnover.
Why so few? Well, it has a lot to do with how you started the business and what pillars you have in place to allow you to reach that level.
Having worked with hundreds of businesses over the past few years, I have discovered that there are some striking differences between the ‘micro’ business owner and the owner of a £1m enterprise:
Starting a business requires no formal education or qualification. The process of going online and registering a new company is easy.
This ‘low bar’ to start also means that most people assume that what they know is likely to be enough. They then spend the entire first year bravely finding their footing and ‘learning to walk’.
The skills they develop at this early stage will influence their ability to break through the £1m mark later on.
Most businesses hit a ceiling because the way they began means further improvement and growth is too complex for them to handle and pursue.
Effectively, the business becomes trapped in what is sometimes called the ‘Hindu Rate of Growth’ – an average growth rate of around 3% each year – just enough to keep pace with inflation.
To break through this ceiling, new systems need to be employed to allow for growth to happen, while at the same time managing the increasing complexity of the business. What allowed many entrepreneurs to run a successful small business simply cannot support larger, more complex teams and issues.
It is at times like this that it helps to have an outside party shine fresh light on your business processes.
Every entrepreneur – ideally at the start-up stage – needs to become fluent in the language of business. This language is all about numbers; profit, sales, cashflow, receivables, assets, equity, ROI, average value sale, conversion rate – these are all numbers that the professional business person not just understands, but is also able to leverage for every business decision they make.
In marketing, sales, team management and leadership there are key metrics to measure, estimate and average to evaluate and justify decisions that will lead to sustainable growth.
If you want your business to break through the £1m threshold, review your techniques and decision-making processes now. Don’t wait until you hit the ceiling and get stuck.
The recent publication of Just the job – or a working compromise? The changing nature of self-employment in the UK by the Resolution Foundation (RF) offered a revealing glimpse into the world of self-employment in post-recession Britain.
RF is an independent think-tank that seeks to “improve living standards for the 15m people in Britain on low and middle incomes”. The findings of its report will prove less than inspiring for those considering self-employment, with the startling revelation that self-employed workers, on average, earn a measly 60p for every pound earned by employed people (in other words, 40% less).
Despite ever-increasing living costs, average self-employed earnings have fallen by a punitive 20% since 2007, compared to 6% for other employees. And, of course, many self-employed people don’t get sick pay, nor paid holidays or days off, despite taking responsibility for generating their own incomes.
So, why have self-employed incomes fallen so dramatically? Well, because of uncertainty and austerity since 2007/08, many self-employed people have probably thought it unwise to increase their prices, despite their own rising costs. Another reason is a reduction in work hours, a consequence of reduced demand and greater competition (ie more self-employed people).
Perhaps interestingly, it seems that many more ‘sisters’ and now choosing to ‘do it for themselves’. There has been a marked increase in the number of self-employed women in the UK, having risen from 27% (or 970,000) in 2005 to 30% (or 1.29m) in 2013.
Office for National Statistics figures show that between Q1 2013 and Q1 2014, the UK’s self-employed army increased by 375,000 to reach 4.55m (15% of the total workforce). But according to RF, self-employment has been growing steadily since the early 2000s, it’s not simply a consequence of recession and redundancy, but a matter of choice for many.
A survey conducted by Ipsos MORI for the RF report suggests that 73% of those who’ve become self-employed in the past five years have done so mainly or partly out of personal preference.
More people are now choosing self-employment, with fewer people heading in the opposite direction (including many more older people who can’t afford to retire completely). One-third of the part-time self-employed are aged 60-plus.
Interestingly, RF’s research suggests that the self-employed are now much better educated as a group, with many operating in service sectors, rather than manual trades, as previously.
RF chief executive Gavin Kelly, says: “Self-employment is often a highly precarious existence, which isn’t that well supported by public policy. High levels of self-employment seem likely to be here to stay and policy-makers have some catching up to do.”
Only 30% of self-employed people contribute to a pension, compared to 51% of employees. And, according to RF, a minority of self-employed people are “experiencing difficulties getting mortgages, tenancies and accessing personal credit and loans, due to being self-employed”.
According to RF: “For too many self-employed people, [housing and credit] are difficult to access, with many poorly positioned to cope with unexpected financial demands and retirement. Reform of the mortgage market, the pensions system and the introduction of Universal Credit should take into account the needs of this ever-growing group.”
Blog written by Start Up Donut editor Mark Williams.
Recently there has been a surge in the number of graduates choosing to work for themselves as soon as they leave university. Rather than becoming employees they are choosing self-employment. Armed with their entrepreneurial skills they are turning their talents and passions into businesses, the most popular of which being website design and mobile app development.
It seems graduates are plagued by gloomy thoughts of leaving higher education to compete for the restricted number of jobs available. The latest graduate unemployment figures from the Office for National Statistics showed that around 9% of recent graduates were out of work, while a significant 47% were forced to take ‘non-graduate’ jobs after leaving university.
So, with this in mind it’s no wonder start-ups are on the increase, after all, who wants to job hunt when you can be your own boss so easily, especially with advancements in mobile and online technology, which allows you to start and run businesses from anywhere.
Small-business owners can now tap into a global marketplace of highly skilled freelancers and run a flexible workforce, with flexibility to hire more staff on a temporary or one-off project basis without the overheads or office space requirements that come with taking on employees.
With that in mind there really has never been a better time to start a business, and it seems Britain’s young graduates are doing just that with the number of recent graduates registering as freelancers or micro-business owners increasing by 97% in the last twelve months. The number of male graduate entrepreneurs was up 110% and female graduates up 94%.
Considering the average cost to start a business from scratch is £632*, for a graduate leaving university with little or no start-up funds, the prospect of going it alone doesn’t feel as daunting as the days when you had to ask your local bank manager for a business loan. With low start-up costs and armed with all of the tools to get a business off the ground, the graduate entrepreneur is here to stay.
* Statistic from a recent survey of 1,000 start-ups by PeoplePerHour
Blog supplied by Xenios Thrasyvoulou, founder and CEO at PeoplePerHour (@PeoplePerHour)
I understand all too well the trials and tribulations of setting up a new business, which is why I agreed to become an ambassador for Britain’s Top Real Role Model 2014. The annual competition, launched by direct selling company Amway UK and now in its fourth year, is dedicated to encouraging new talent amongst the nation’s entrepreneurs.
Amway UK has already handed a total of £20,000 in funding to entrepreneurs for the business ventures they presented, but we now need a new wave of creative bravery in business to generate success and employment opportunities.
Recent research carried out by Amway UK suggests that more than two-thirds of us would prefer a female boss to a male one, with the stereotypically female attributes such as compassion, trust and loyalty coming out on top. These ‘softer’ attributes were favoured over more traditional ones such as courage, confidence and strong leadership.
I think this is a very interesting shift in attitudes. I feel that female bosses tend to have a slightly more ‘3-D approach’ to business and see the whole picture. They also tend to care more about their employees, which helps get the best out of people. You don’t have to scatter people out of your way to be successful.
Starting up your own business and backing your ideas can be very lonely and takes a lot of courage so it is crucial that we support fledgling companies. I can’t wait to see the finalists’ ideas and share their enthusiasm and energy. I have been fortunate enough to have people around me to encourage and share my dreams.
I ran Twenty8twelve with my sister Sienna for seven years, in what is a notoriously fickle and unforgiving industry. You need a bit of steel to go with the creativity, but it is important to be a good boss, as well as a good designer. Having Sienna in the business was an amazing help because of the profile she has. We made a good team, because she has incredible style and she forced me to take risks.
My current label, Savannah, is about finding out what my customer wants and meeting her needs. I’ve kept true to my mantra of providing style at an affordable price point.
I am a driven person because I love what I do, but I have space for other people and I don’t think you can run a business without understanding what makes your staff tick as human beings. I was brought up to believe that if you wanted something, you had to work for it.
So, my advice to would-be entrepreneurs is to roll your sleeves up, be prepared to start at the bottom, but once you have employees, let your softer attributes come to the fore – trust and loyalty can go a long way.
The recent publication of A Portrait of Modern Britain had some commentators questioning the motivation of its publishers – right-wing think tank Policy Exchange, which was founded by current Tory ministers Michael Gove, Nick Boles and Francis Maude.
Policy Exchange called for all political parties to better understand and recognise the “clear and striking differences” between ethnic minorities and stop “lumping them together” or risk appealing to none.
One of the study’s headline claims was that the five largest “distinct Black and Minority Ethnic (BME) communities” (ie Indians, Pakistanis, Bangladeshis, Black Africans and Black Caribbeans) will double in size from 14% of the UK population (eight million people) to 20-30% by 2050.
According to A Portrait of Modern Britain: “Ethnic minority businesses [ie where at least half the management team is from an ethnic minority group – about 7% of UK SMEs] are already highly successful and contribute £25bn to the UK economy. There are higher aspirations to start-up amongst ethnic minority groups, especially Black African (35%) and Black Caribbean (18%) groups (compared with 10% for White British), but ‘conversion’ remains very low.”
So what do we know about UK BME businesses? According to Black Women Mean Business:
So, why is the UK BME start-up rate so low? Last year, The Ethnic Minority Businesses and Access to Finance report, which was commissioned by Deputy Prime Minister Nick Clegg, concluded that “although the banking industry was working hard to ensure ethnic minority businesses have access to finance, there is more to be done to help under-represented groups”.
Clegg said that while there was no evidence that the challenges ethnic minority businesses face are due to racial discrimination, they still encounter problems accessing loans. “We know that 35% of individuals from Black African origin say they want to start a business, but only 6% actually do. Are they having problems accessing loans?” questioned Clegg. His friend, the Prime Minister, certainly seems to think so. Or at least he did in 2010 when he said black entrepreneurs were “four-times more likely to be denied a bank loan than white entrepreneurs”.
Race equality think tank Runnymede Trust welcomed the government’s review of access to finance for BME entrepreneurs and the UK banks agreeing to fund independent research into the experiences of BME businesses when seeking finance.
Dr Omar Khan, Runnymede Trust Head of Policy Research, commented: “Black and Asian businesses have long felt that they’re not treated fairly by lenders. We hope that government also engages in further initiatives to better understand why racial inequalities persist, not only to improve the lives of ethnic minorities, but also to grow the UK economy.”
Writing for The Voice in October last year, in an article called Want To Beat Racism? Start A Business, journalist Nels Abbey pondered possible reasons why more black people in the UK aren’t starting up. “In each of the home countries that black Britain’s lineage comes from, entrepreneurship is the norm,” he observed. “[Yet] for some strange reason, when black people arrive on these shores we seem to lose that entrepreneurial zeal and ingenuity. Not all of us. Just most of us.”
He puts this down to (perhaps) “a lack of confidence in our abilities in the face of more established business people”, as well as “actual and perceived racism maybe” and the “legacy of colonial structures”. Other possible reasons were “lack of resources, red tape, comfort, laziness even. Or maybe just a desire not to challenge the social order”.
Abbey concluded: “A single successful black business is worth more than any number of anti-racism demonstrations. A successful and respected business is a symbol of power and self-determination. You have to respect it, regardless of who runs it. Everyone loves a winner, no matter their colour.”
Blog written by Mark Williams, editor of the Start Up Donut.
Slightly more than three years ago, Tony Curtis' business idea for heated sports gloves was given short shrift on TV's Dragons' Den. Those Dragons must be fuming now, because Alago Heated Gloves is a hugely successful business, with thousands of its products warming the hands of gardeners, cyclists, kayakers, tennis players, horse riders and players at many premier sports clubs. Stick that in your pipe and smoke it, Duncan Bannatyne.
Determination, bad luck and a radical approach to funding have all played a part in Tony’s remarkable business journey. Recalling how he came up with the idea, he says: "It started seven years ago when I was watching my 12-year-old son playing rugby. It was a freezing day and no one could catch the ball – no one wanted to. He ran off the pitch at the end with blue hands and shoved them up my jumper for warmth. Once I'd got over the shock I thought, he needs heated gloves.
"That was my ‘light bulb moment’. I searched online to try to find heated gloves but nothing was suitable. Everything I saw had big bulky battery packs, electric cables – useless for sport.
"So I thought I'd have a go at inventing something and spent six months playing around with gloves, silicon tubing, a meat syringe and some heat packs at home. After destroying several kitchen appliances along the way, I came up with something that I thought would work. I took it to a brilliant design company and we went forward to prototyping. That's when it started costing money."
So how did he cover those costs? "I had a day job, but needed more money. I didn't think about investment, I found another way. I bought a camera and taught myself photography. I opened up a spare-time photography business, doing portraits, weddings, event, etc. I did that for four years, that’s how I paid for product development."
What customers did he have when launching his business? Tony answers: "Our mitts were bought by junior and mini rugby clubs throughout the country. Gradually, our full-length gloves were picked up by professional clubs, then we got emails from salmon fishermen, helicopter pilots, classic car drivers, obstacle race runners – you name it."
Was there a breakthrough moment? "We were asked onto Radio 4 for a five-minute interview with Liza Tarbuck. Within 30 minutes our website crashed due to demand,” Tony remembers. “Many people asked whether our gloves could be used for other purposes than just rugby, which was a crucial moment. Overnight we changed our website, product names, packaging – everything. We changed 'Rugby Mitts' to 'Classic Mitts', changed the descriptions, positioning, etc. Looking back, it was such an obvious thing to do - but we hadn't seen it."
What advice does Tony offer to those with a great business idea but no start-up capital? "It's all about paying for prototype manufacturing and product development. I needed money, so I went on Dragons' Den a few years ago, but they just didn't get it. Of course, now I look back and I'm glad I didn’t give up part ownership of my business in return for their investment.
“For years I had no luck with the banks or other lenders either, so I had to do something radical. I discovered that I could move my pension fund into a self-invested vehicle and invested that money into my business. This was a new idea then, and some told me it was risky, but if you think about it, your pension is already being invested in someone's business. Why not invest in your own business? It certainly keeps me focussed and motivated!"
Tony says he now makes 95% of his sales through his website and the remainder through Amazon. “We don't advertise,” he adds. “When we launched our cycling gloves I bought cheap train tickets to major cities such as London, Newcastle and Manchester and spent days putting credit card-sized leaflets onto bicycles I came across in the street. I must have walked for hundreds of miles with a heavy backpack stuffed with leaflets. As a result, we sold three-quarters of our stock on pre-order before the product was even in our warehouse!"
Alago Heated Gloves has taken a standard product, adapted it intelligently to a niche requirement and delivered very high levels of customer service to make a successful business. It is currently partnering with the University of West England on some very smart (but ‘hush-hush’) new applications of its technology. Alago's innovations have already caught the attention of Lockheed, the British Army and a major car manufacturer, all of which have signed development deals.
According to government figures, more women than ever before are starting their own business and this has led to a steady rise in the number of female entrepreneurs. When it comes to the number of male and female entrepreneurs in the UK, the gender gap is narrowing, but there is still plenty of ground to make up before parity is achieved.
Previous perceptions about the typical profile of an entrepreneur would probably suggest that the person would typically be male and middle-aged, but business in the UK is changing and women are generally taking a more prominent role when it comes to business leadership.
It is interesting to note that at least 25% of registered self-employed workers in the UK are women and the number of female entrepreneurs is rising nearly three-times faster than the rate for men. There are understood to be more than 1.2m self-employed women in the UK who are involved in full or part-time work and according to the Office for National Statistics, the number of female entrepreneurs has risen by nearly 10% in the past two years, which compares very favourably to men (3.3% increase).
The term ‘mumpreneur’ is used to describe a woman juggling family commitments with running a business, but it is very much a ‘Marmite’ phrase as far as many woman are concerned. Some think it’s rather patronising, while others consider the term to be empowering, but whatever your view the fact remains that there are an estimated 300,000 mothers running businesses who contribute an estimated £7.4bn to the UK economy each year.
There are already annual ‘mumpreneur’ awards and numerous blogs and online directories aimed at making networking easier and opening up new opportunities and ideas for discussion for those women who are looking to start their own business.
The challenges for men and women are often different yet equally demanding in their own ways and sometimes it can be a struggle to achieve the right work-life balance.
Many female entrepreneurs become self-employed after starting a family and one of the winners at the last mumpreneur's awards is probably typical of what being a female entrepreneur involves.
One of the co-founders of Peach Pink, Vanessa Pinkney, was a former retail buyer for a large fashion retailer. She has used her contacts and industry knowledge to form a company that supplies luxury bags that are now sold in numerous well-known stores.
Her typical day will involve running her business around looking after her twin daughters, emailing suppliers in the morning, doing the school run and using Skype to communicate throughout the day, running her growing business empire from her kitchen table.
It’s almost impossible to identify the absolute ingredients to achieve success in business or we’d all be following the same path and formula. Good advice is essential for anyone starting a business and here are some key points to consider.
A robust business plan is essential and you need to test your business model to make sure it is sustainable from the beginning. Having little or no start-up capital can actually be viewed positively, because it ensures that you apply greater financial discipline.
It is important to have confidence in what you are doing and a positive can-do approach is in the DNA of most successful entrepreneurs. And as long as you always remember that the biggest asset is you and work hard at building a supportive network, the venture has a greater chance of flourishing.
There are many business opportunities out there and when you look at the examples of success from previous start-ups, it is easy to see why the number of female entrepreneurs continues to rise.
Blog supplied by business strategist Tim Brown. Tim blogs about news and trends for successful small businesses in the modern world, including the ImRubbish site.
According to the AAT (“the UK’s leading qualification and membership body for accounting and finance staff”), your business could be missing out if it doesn’t currently employ an apprentice.
The organisation reckons that every time a business takes on an apprentice, “its bottom line gets a boost of more than £2,000”, while lack of awareness of available government support is a key reason why more small and medium-sized businesses aren’t employing apprentices, who, it estimates, “delivered £1.8bn of net economic benefits to UK organisations in 2012/13”.
The claims are based on a research report called The Value of Apprentices, compiled by the Centre for Economics and Business Research (Cebr). It found that apprentices offer UK firms “a significant return on their investment”, with economic output usually far exceeding associated wage and training costs. Even after wages and training is accounted for, every time a business takes on an apprentice, on average, they gain by £2,000, according to the AAT.
But the research also found that awareness among businesses (particularly small firms) of government support for those who take on apprentices was poor. About 60% of small businesses surveyed by The Department for Business, Innovation and Skills in August 2013 lacked basic knowledge of the “government’s programme of support for businesses that take on apprentices”. For example, businesses with fewer than 1,000 employees that haven’t hired an apprentice in the past 12 months and take on one apprentice (aged 16 to 24) could receive a grant of £1,500 per apprentice from the National Apprenticeship Service.
Jane Scott Paul, AAT Chief Executive, comments: “Take-up of apprenticeship schemes has grown sharply over the past five years, as more and more organisations enjoy the benefits that apprentices can bring to the workplace. This is benefitting their businesses and bolstering economic recovery and growth.
“We now need to do more to engage with smaller businesses – to break down the misconceptions and make it easier for smaller enterprises to unlock the full potential of training apprentices and to gain specific skills relevant to their business.
“Our research clearly reveals that apprentices, far from being a cost to business, are often a tangible benefit and, what’s more, they’re flourishing in non-traditional sectors such as business, administration and law. By quantifying the value of apprenticeships in this way we hope to encourage all sectors of business to open up their recruitment policies and address the skill shortage.”
With it being National Apprenticeship Week this week, maybe it’s time you found out more about the business benefits of taking on an apprentice?
As an SME owner, I know that experiencing that inspirational moment that cements the purpose of your business is essential, but almost painfully difficult to find. The more you panic about finding your ‘Eureka’ moment, the more elusive it can prove to be. However, there are a few sure-fire ways that can help you to relax and find that moment. Take some time to find inspiration in some of the most unlikely of places and chances are you’ll soon be struck by the light-bulb moment you’ve been searching for.
Even if you’re the world’s most practical and business-minded person, sometimes you have to unleash your creative side to find true inspiration. From roughly sketching a meaningless object to spending hours working on a more challenging piece of art, you’ll find yourself lost and letting your mind wonder onto other subjects, which could lead to you being struck by an unexpected bolt of inspiration.
Over-thinking something often means that the ideas you come up with are forced and unrealistic. Watching an unchallenging film or TV show can allow your mind to switch down a gear and come up with something much less forced.
Unwinding with a great read has numerous benefits, but is also a brilliant way to learn and let your mind wander. It doesn’t have to be related to business in any way. Pick something or someone in whom you’re interested and passionate about or even something that will spark debate or opinion in you. Annotate as you go along with points that you find interesting, inspiring, enlightening or even empowering. You could even write short reviews or points you have learnt.
As more people move to TV that allows viewers to pause, rewind and fast-forward, it can be easy to think that adverts are a total waste of time and money. However, there are adverts that make people stop, look and listen. Take notes about what makes these ads successful. How are they able to convey a story in a short amount of time and how do they connect with their audience? Apply these observations to your own work and think about how you can make it your own.
How you become inspired is up to you. We all have our ways that are as unique to us as our business models, but if you’re lost for ways to expand your mind, these are some easy tricks that are sure to get the creative juices flowing.
Blog supplied by Paul Lees, founder and CEO of business conference call services provider Powwownow. You can see Paul talking about his experience of starting a business below.
With record numbers of people starting their own new business, hopefully 2014 will be another triumphant year for start-ups in the UK. If you want to make the leap, finding your feet may seem daunting, but don’t let fear prevent you from stepping out on your own. To help those who are thinking of starting their own business, Aisling Brennan of eFax and Rory Whelan of eReceptionist share their top ten start-up tips.
If you fail to plan, you plan to fail. You should have a succinct and clear business plan. Not only will it enable you to monitor your business’s success, but it will also prove useful when asking outsiders for funding. Conversely, don’t be beholden to the plan. The pace of change in business can be rapid, so make sure you’re able to adapt. The joy of entrepreneurship is often the ability to make decisions ‘on the fly’.
Why waste precious money on renting an office if you can run your business from home? A proportion of your electricity bills and mortgage payments can be offset against your business tax bill and it’s now simple and cost-effective to set up a second phone line for business calls. When you bundle your number with a virtual office phone system you can even have a real-time receptionist answering and directing your calls, so you never miss a business opportunity.
Hopefully, the money will be flowing in from the start. However, don’t get too carried away, always keep good track of your financial status. Do you have savings that can be invested and will these be enough? If you don’t, approach potential investors and lenders early on. Don’t rule out considering government-backed funding, too. Investigate the many business incubator services that are on hand to advise you, and in some cases they offer financial backing.
Taking on the responsibility of running a business all by yourself might be too much, especially if you have a family. Find a business partner who shares your goals, but perhaps someone with different skills and knowledge, so you complement each other.
If you don’t shout about your new business – who will? Make the most out of social media to spread the word. Similarly, something as simple as asking your customers to tell others about you can make a big difference to your sales. Also, network like mad. This doesn’t have to be at networking events, but just in your daily activities. Keep telling people about your business and in some cases you may find yourself talking to someone who wants to buy from you.
A good business name, business cards and a professional website all contribute to how your business is perceived, but don’t underestimate the power of your telephone number. By setting up a national 0800 number, you can look bigger, but having a local phone number need not limit your ambitions. For example, should you want to appeal to customers in Birmingham despite being Manchester based, it’s easy to have an 0121 number with calls routed to your existing Manchester landline.
Customer like 0800 numbers, because they are free to call from landlines and will soon be free from mobiles. Our research shows that UK businesses experienced a volume increase of 167% when they switched to an 0800 freephone number.
Keep your start-up costs to a minimum and look to invest in cloud-based services. Investing in the right fax software will make running your business smoother, less time-consuming and more cost-efficient. Digital faxing eliminates the need for fax hardware, while allowing you to sign orders or contracts through a digitised signature anywhere from your mobile.
Customer care, business development and administration are the three key areas you should concentrate on. They are all equally important, so all require equal attention. If you neglect one, it will have an impact on the business as a whole. No one likes doing paper work – but it needs to be done.
Learn from your mistakes and adapt accordingly. Be prepared to continue refining your methods as you encounter new hurdles. No one successful ever launched with the finished product, so keep tweaking and adding. You’ll learn so much from your first few sales and customers to help you refine the way you do business and make things easier for the future. Keep motivated and don’t lose sight of why you started the business in the first place.
In six months of trading our company has been through some pretty turbulent times. In the true spirit of supporting other start-ups small businesses, we’d like others to be able to learn from our experiences. In no particular order, here are five pieces of insight we gained in our first six months of trading. Each is fairly universal, so some or all should also apply to your business.
Building a business is a long and hard task and it requires a lot of patience. Anyone who expects to make an instant return is probably being overly optimistic or not taking into account all of their start-up costs. You need to account for everything you spend money on when starting your business, which could include a website, marketing/advertising, stock, premises, staff and quite possibly many other things. Even if you have a high margin product or service, it will take time to recoup all of your start-up costs.
This point closely links up with the first; you need to know your break-even point and when you need or want to reach it. Year-end targets are good, but you must work out how to meet them, because demand for a growing business is not linear. For example, if you want to sell 120 product units in your first year of trading, you might not sell the necessary 10 units every month from launch. That means you’ll later need to sell more than 10 units each month if you are to achieve your yearly target.
When you create your initial business plan you’ll probably look at what your competitors have done to get to where they are. It’s also likely that you’ll set goals to build a business around a similar (but hopefully better) structure. But don’t forget that while you’re doing so, your competitors will be trying to progress from where they were when you started. So keep an eye on your competitor’s activity and remember – they’re moving targets.
When building a new business you’ll need some capital behind you. Unless you’re in a space that’s really open to creativity and you can get a lot of free media coverage and word of mouth, you’ll struggle to gain momentum if you don’t have a reasonable start-up budget.
New businesses are a prime target for predatory salespeople (especially telesales). If you’re in the online space you can expect companies that host business directories, sell email data, run pay-per-click ad campaigns, etc, to contact you. Most of them will press really hard and rattle off impressive-sounding numbers, but the fact is these direct sales services rarely convert to sales. If you are thinking of investing in any of the above channels, do your homework so you are able to find the best service provider.
Blog provided by Pete McAllister of Intelligent Car Leasing.
1 “Being your own business cannot be improved by unnecessary physical ‘accoutrements’, so think carefully about any purchases you think you need to make because you’re now ‘a business’”
2 “In the UK, anyone can call themselves ‘an accountant’ – even if they aren’t qualified. So, ensure that the one you choose is suitably qualified and part of the relevant professional body”
3 “Spend 30 minutes each day thinking. It seemed to work for Bill Gates. He’s reported to have spent one month every year thinking up ideas for his business”
4 “Managers make sure that everything is controlled properly; leaders create the vision, the enthusiasm and the passion. The best leaders are those who inspire and create followers”
5 “It's funny how the best ideas can come to you by accident – literally, in my case”
6 “Let’s be honest, a boring, drab, dark office has never inspired anyone to do anything”
7 “Think about issues that people are faced with every day and write them down. Helping to solve such problems could enable you to come up with some excellent ideas”
8 “Look for a business mentor to help you stay on track and advise if things get tough”
9 “In 1919 a man called Jack Cohen decided to sell more than just syrup and fish paste. He started selling tea and laid the foundations for what we now know as Tesco”
10 “Nobody wants to think that what you thought was the perfect hire could result in a costly tribunal case, but one in six disputes do – at an average cost of £9,000”
11 “According to Experian, there are some 900,000 businesses in the UK that have real potential to start exporting and yet they are still only serving the UK market at the moment”
12 “Never sit back and admire what you’ve achieved – look forward to what’s next. Have the courage of your convictions and think about what you need to do to reach new markets”
13 “Up to £150 per head of the cost of holding a Christmas party is an allowable tax deduction and VAT can also be recovered on staff entertaining expenditure”
Thank you to our sponsors for their support last year. Many thanks also to the experts who shared their knowledge and provided content that ensures this blog remains a popular source of information, advice and inspiration. A big ‘Thank You’ also to our ever-growing list of partners – we look forward to working with you this coming year and beyond.
Finally, a massive ‘Thank You’ to all our readers in 2013. Whether you were thinking of starting your own business and were looking for inspiration or were starting your own business and needed advice, we hope you found what you were looking for.
Happy New Year and here's to a superb 2014…
Starting a business involves making an often tough, but amazing journey. I was fortunate enough to have started ‘tinkering with the internet’ right when affiliate marketing was just starting to evolve. At that time eBay, for example, would pay for every website visitor they received, even if they clicked straight back off. I could see the enormous opportunities and decided to pursue them.
I completed a degree in computer science before going into business with my best friend, using the money I made designing and selling my first website. I developed a very basic affiliate programme and learned all the basics to being a single Internet marketer, website management, design html and online marketing. I did not know it at the time but this would eventually become MoreNiche, the affiliate marketing company of which I am managing director. We decided to specialize in the growing health and beauty industry.
The business really started to take off and in 2007-2008 we grew sales to such an extent that we broke the £5m per year turnover mark. All our growth came organically from our own affiliate work, but later from partnerships.
We’ve certainly learned lots of lessons getting where we are today. Every business has its challenges. One time I had to work solidly for 36 hours because someone had managed to paralyse our systems, which meant that none of our websites were working. After much soul searching and a severe lack of sleep, I eventually managed to get us up and running again.
We’ve had numerous other bad experiences, including a credit card processor going bankrupt, which severely dented our profits, as well as a supplier selling us tens of thousands of units of product that simply were not as described. The important thing is that you learn from such things, deal with them and make sure they don’t happen again.
One of the most important lessons I have learned since starting MoreNiche is that success cannot be achieved alone. A business, no matter how big or small, is really just a collection of people working towards a common goal. It’s these people that will either make you a success or not. I have some superstars who have worked with me for many years and I would not be here without them. Rewarding key staff for their dedication is critical.
Having the creative freedom and the technical foundation to try ideas out has allowed me to enjoy business and continue to thrive on tomorrow’s challenges. It would be very easy to take the foot off the gas and relax a little, but that’s just not in my DNA. For whatever reason, I just want to go further.
Blog supplied by Andrew Slack, managing director of affiliate marketing business MoreNiche, which specialises in the health and beauty industry.
As the high streets prepare for a shopper-invasion and the countdown to festivities begins, businesses that traditionally feel the financial impact of the peaks and troughs of seasonal trading are once again preparing their strategies to manage cashflow.
Research published earlier this year by Santander Corporate & Commercial suggests that 61% of UK small and medium-sized businesses are impacted by seasonality – with 37% suffering as a result.
But the truth of seasonality is that it doesn’t always fall at Christmas, nor is it industry specific. For businesses across the country, delayed receipt of revenue and seasonal fluctuations in demand can lead to serious cashflow problems that existing finance arrangements cannot accommodate. Even for the most hardy business management team, a significant slowdown in business or revenue can make for a tough time.
Management strategies that have been agreed in advance can help to soften the blow when a seasonal dip is on the horizon. Here are four ways to stay on top of cashflow when things get tight:
One of the biggest issues facing businesses today is that of late payment. According to the Forum of Private Business, more than one million UK SMEs currently face difficulties with late payment – about 20% of the UK’s business population. The total amount of late payments across the UK now stands at just below £37bn.
Of course, you want to keep the customer on side and encourage future business, so a slick invoicing and payment processing operation can keep relationships harmonious and reduce the chances of late payment. Make sure invoices are sent out promptly, chase due and overdue payments regularly. Consider introducing an incentive scheme where discounts are given for early payment. Interest charges and financial penalties can be applied for late payments.
Cashflow forecasting, as part of the wider financial planning process, is essential for all businesses – not least seasonal ones. Healthy and detailed insight into anticipated fixed and variable business costs, set against data gleaned from your sales forecast, can help predict the future cash needs of your business and allow you to put financial back-up plans in place.
Not only will this process keep you aware of your business’s cash position at all times, it will allow you to creatively map and move around payments and budget allocation during leaner months.
While you need to manage and improve cash inflow, there are creative ways of managing cash outflow, too.
When entering into a new supplier agreement or looking back on existing ones that can be improved, make your suppliers go the extra mile. Negotiate favourable payment terms, work to drive down the price, arrange purchases on a sale or return basis, or settle on a bulk discount agreement. If you can, work to spread out recurring expense payments throughout the year so that they fall outside of your slowdown period.
Many vendors and suppliers are flexible, since it is in their interests to retain your business and put an affordable and sustainable agreement in place that will also prevent them receiving late payment from you.
Seasonal trends are beyond our control. One-in-20 UK businesses closes their business during seasonal periods to reduce costs; 6% of UK businesses admit to relying on credit cards to manage seasonal fluctuations in supply and demand; 4% use business loans; while 17% either increase or decrease staff numbers.
For stability during seasonal slowdowns or growth management during speed-ups, short-term cashflow facilities can be an invaluable lifeline. These funds offer a precious injection to pay off creditors, pay staff and maintain an overall healthy operation.
In the £250-500k annual revenue category of businesses surveyed by Santander Corporate & Commercial earlier this year, 30% of those that suffered from seasonal fluctuation said invoice or supply chain finance was used to ride out seasonal downtime.
Invoice finance has now evolved through crowd-funding into invoice trading, a facility that creates a market between businesses and investors to give flexibility to businesses in need of short-term working capital finance, without the need for long-term contracts or a whole of ledger commitment.
Blog supplied by Beth Nicholas, writing on behalf of Platform Black, provider of complementary and alternative finance solutions.
The thought of starting a business now might seem to many a bad idea. These are the days of austerity, surely we need to keep our heads down, take stock of what we have and bide our time until this is over.
The reality couldn’t be further from the truth. The best time to start a business is during a downturn. In other words, if you’re thinking of starting a business, there couldn’t be a better time than now. So, let me explain...
Years ago starting a business was a more difficult process, because you often needed to take significant risks to get started. Nowadays it’s much easier and more and more people are starting their business from home with little or no financial risk. The internet has been a key driver in this, because there are so many opportunities online. Technology has also made it much easier to research ideas for businesses and what’s involved in running a business, so knowledge has improved and most people feel much more confident about taking those first steps.
A startup has very few expenses and overheads, so if you check out your competition, the chances are that you can undercut them. Their clients or customers will be looking for deals and cheaper alternatives that are just as good. So, it’s the perfect time to win them over. If you do a good job, as promised, there’s no doubt that you’ll retain those clients when the economy recovers.
If your startup depends on products from suppliers, this is the best time to negotiate a really good deal, because vendors struggle to sell products. When the economy is strong, vendors in the main set the rules for their price model and it’s very hard to broker a deal.
Whether they’re large corporates looking to scale back throughout the downturn or smaller companies that perhaps aren’t resilient enough to see it through, your competitors are in a vulnerable state. Startups are nimble, agile and flexible, and when you spot an opportunity you can pounce on it.
Previously, to get started in a business you either needed to self-fund or go to a bank for a traditional business loan. However, there are now so many different schemes and incentives, as well as crowdsourcing and independent investors that if you have a great idea – its possible to get funding quite easily and on reasonable terms. When the economy falters, angel investors in particular, look to move their money out of the stock market and may be willing to fund you if your prospects are promising.
If you’re able to secure funding and looking to grow your business quickly, you’ll probably be looking to increase your staff. In a downturn, when redundancies are rife, highly qualified, talented and effective people are much easier to come by.
A startup created during tough times is designed to be lean and ultra efficient. You’ll develop business habits that will help you get ahead of the game when the market recovers, with the scope to increase profit margins once consumers and clients are spending at full throttle again. If you can make it work in the bad times, it should fly once the economic good times return. Also for many people whose job is perhaps uncertain or if they have been made redundant, it becomes a chance to put control in to their own hands.
We have definitely seen a rise in the number of people starting up businesses from home, and although we still get people of all ages there seems to be a growing number of young people (18-25) starting up a company alone. So, if you’ve been considering starting your own business, this is the time to take the plunge.
Blog by Paul Bryant of Setup A Company
I’ve always believed that a healthy mind is a key success factor in running and growing a business and that there is huge overlap between sports and business. Entrepreneurs are the top athletes of the business world. With the same passion, the same ability to postpone gratification, with the same ability to focus and suffer when needed.
When you listen to sports coaches, they talk exactly the same language as managers, but in a different context and with more focus on results and more of the fluff removed in sports. I once heard Ray Colgan of Ulster Bank speak about the Dublin Gaelic football team. Key metrics? Tackle count and training hours. Simple as that.
Recently I was at an event where sports initiatives and concept were pitching. Two companies talked about measurement of sleeping patterns, food intake and training effort for athletes. Imagine doing the same for entrepreneurs. Ensuring a healthy mind in a healthy body and a key contributor to business success.
Our clients are also always looking for ways to engage with their staff and ensure that they are happy. Maybe it should become more holistic and include all aspects of life, including sleeping and that goes beyond “Employee first, customer second” or “The great workplace” and would suggest a more holistic approach.
Which brings me to the book, Move, Eat, Sleep by Tom Rath. Tom has a genetic disorder, which means he is very susceptible to cancer, so he needs to watch what he is doing and eating all the time. In this book he shares his experiences, the research and his observations. It’s absolutely fascinating.
The title says it all. You need to sleep well and it is the most important lesson. Not sleeping well kills. You need to eat properly. Sugar kills. Carbohydrates kill. Movement is key. Not just exercise. You need very regular movement during the day. Sitting kills. Watching TV kills.
Here are some of the stats included in the book:
The book does make a few reference to the marketers and how we are being manipulated and fooled by the words they use, the ingredients they put into food to make us all addicts.
The book also contains some tips:
So if you move well, sleep well, don’t watch TV and eat broccoli and berries, you live to be at least 90. And you’ll be more successful and happy.
I’ve seen it time and time again, high-flying entrepreneurs at the helm of their empire, trying to do everything and getting little done.
Business owners are constantly trying to multi-task and although we all know that trying to do so makes us less focussed and less productive, it’s an inevitable outcome of the real world in which we do business. There will never be just one task. Here’s some simple advice on how to remain focused and in control.
This is the first thing I advise my mentees to use when deciding which tasks to embark on. Keep a task list of anything and everything that you need to do and keep updating it with new tasks.
Prioritise your tasks into “Must Do”, “Should Do”, “Could Do” and “Won’t Do” categories. Above all, keep in mind your strengths and delegate tasks that are not your strengths. Understand what you can realistically achieve in one day. A simple process like this, combined with some discipline, will make a big difference to your mindset and productivity.
There are tools that business owners can use to improve their overall focus. I use Asama to set my goals, targets and tasks and it enables me to share and delegate jobs to other members of my team. Mind mapping software is helpful in defining goals and targets that you can prioritise and focus on.
Of course, tools are only as effective as the person using them, so make sure you have adopted the right mindset and implemented the best processes before you resort to these.
Environment is a key factor in improving focus. The more comfortable your work environment is, the greater your ability to concentrate. I find that purposefully changing my location during a long day, for example, from my home office to the sunroom, helps introduce a new impetus to my work.
It sounds obvious, but removing and avoiding as many distractions as possible is one of the best ways to improve your focus. It’s astounding how personal issues can creep into your work zone. Adopt digital ‘Do Not Disturb’, by turning off your mobile phone, closing your emails and chat programs – deal with them later.
You know when you’re at your best, whether it is early morning or late at night when you have peace and quiet. Do your hardest tasks when you’re most alert and the less intensive tasks later on in the day when you have less drive.
Blog provided by Raj Dhonota, who first came to the public eye in 2005 during the first series of The Apprentice, since when he become a successful serial entrepreneur and investor in start-ups.
My sister, Rachel Clacher, and I founded Moneypenny in January 2000. All we had was a business idea and £15,000. I’d run my own business previously and had needed someone to look after my telephone calls while I was out, but finding the right service was tough and when I did, it was full of flaws.
Recognising a gap in the market, we decided to create a personal, relationship-based service staffed by people who understood the business need and who would deliver an efficient and professional service every time. That’s when Moneypenny – and most recently, Penelope – was born.
We knew that with limited resources we had to shape our product if we were to differentiate ourselves from our competitors. Having your calls answered by one person you know and trust is what has defined us as a provider.
Diversifying our product offering is an essential part of our success. Earlier this year we launched a new digital receptionist, Penelope, which offers a wealth of features designed to help micro-businesses handle their calls, including pioneering voice recognition capabilities.
Our technology allows our receptionists to look after calls exactly to the client’s brief. This ensures a seamless service and our clients know that every call and opportunity coming into their business is captured, while leaving them free to manage their day as they need to.
We’re focused on providing unique solutions for small businesses, as well as growing our service offering for large corporates. Digital receptionists across all areas of business are a huge focus for us going forward, too.
What’s my advice to start-ups and micro-businesses that want to grow quickly? Create, create, create – and don’t take no for an answer. Never sit back and admire what you’ve achieved – look forward to what’s next. Have the courage of your convictions and think about what you need to do to reach new markets. Pre-empt and don’t be afraid to be different.
By December 31, half a million new businesses will have been started in the UK this year, with the number of VAT-registered companies already back to pre-2008 levels.
According to government statistics SMEs generate £1,600bn – slightly less than half of all private sector turnover. Research carried out by Enterprise Nation suggests almost 70% of these new businesses are started at home – often by people who are holding down a day job.
Meanwhile a new report from think tank Resolution Foundation points to our economy rapidly moving towards a two-tier labour market – those with top jobs and big salaries - and those with low-paid jobs. It reported a drop in the number of middle-income jobs and predicted further polarisation in the UK’s maturing economy.
It’s a fundamental change and one that the Foundation thinks the Bank of England should take into consideration when deciding when to increase interest rates – because it argues lower unemployment - the magic seven million mark – will not hold the same significance as it once might have done.
It led us at Enterprise Nation to ask this question - could the start-up momentum we are witnessing be, in part, fuelled by the increasing wage gap? We know “5 to 9ers” – people carefully test the water by starting a business in their spare time, working away in the evening and weekends – have been around for a while.
I wrote Working 5 to 9 in 2010, reflecting the then new trend, and at the time we calculated that five million people were making some form of income at home. It’s now time for us to revisit these statistics – because we’re pretty sure that figure will have been blown out of the water.
Is the 5 to 9 trend likely to experience an even bigger boost now people have realised they are unlikely to see the kind of income they might once have expected?
Sadly, no statistics that can clarify this at the moment, however, the idea is set to be tested this week when Enterprise Nation opens its doors to its pop-up enterprise hub, set in the heart of the City and offering a free lunchtime start-up service to people who already have jobs.
The pop-up will offer power hours, setting up a website in your lunchtime, expert help with blogging, social media, finance, planning and so on. We think we’re going to be busy - and the very fact that we think there’s a demand demonstrates there is at least an anecdotal appetite as well as a certain ‘normality’ about holding down a job and working on a business in your spare time, which is interesting. Let’s see if we’re right.
Many people will consider the option of starting a business of their own at some point during their life. Sometimes this is fuelled by a change of personal circumstances, sometimes it is as a result of a 'light bulb' moment where you think to yourself "I can do it better than that" and for others it is to fulfil a life-long ambition.
The UK is a nation of entrepreneurs. There are more than 2.1 million VAT registered businesses and the vast majority of those are small businesses. StartUp Britain suggests that entrepreneurs in Britain will start more than 500,000 new businesses in 2013 alone.
Andrew Devenport, chief executive of Youth Business International (hosts of Global Entrepreneurship Week) says "While more than half of the population would like to start their own business, less than 5% actually do. These entrepreneurial ambitions are even more acute among young people and women. Young people in the UK are three-times more likely to be unemployed than adults, and more than twice as many men start businesses as women.
This week marks the 10th anniversary of Global Entrepreneurship Week, which is dedicated to giving individuals and start-ups practical support to help them get set up and grow. Andrew Devenport says, “Young or old, whether you’re in Barrow or Braintree, or Greenock or Greenwich, Global Entrepreneurship Week can help you take a step forward.”
Here, four entrepreneurs tell us why they decided to set up on their own and share their stories.
Alex Head - Social Pantry Ltd
Alex began her entrepreneurial journey when she started a small sandwich company at the age of 15 and since then it has steadily grown it to the company it is today.
After opening three restaurants for other people she decided it was time to take the plunge and founded Social Pantry Ltd, a café and catering company in Clapham. Social Pantry was created on the back of Alex’s love of food and a challenge. Despite starting up during the recession, she has expanded with an impressive client list including Jo Malone, Red Bull, Innocent Drinks and Laura Ashley.
However, it hasn't always been plain-sailing for Alex - learning quickly how easy it is to get it wrong after the closure of Melito in 2010, a company she had invested in and set up.
One piece of advice Alex would give to people looking to start a food business would be to run a pilot scheme or a trial run. "A good way of starting is to have a pop up as a tester and then you can get direct feedback straight away. Alternatively, if you’re delivering food, start with a small sample of addresses you deliver to, and then expand if successful."
Jacob Hill, age 20 – The Lazy Camper
Jacob is currently studying for a degree in Enterprise Development at the University of Huddersfield, but unlike his peers, he isn’t just learning about starting a business, he’s actually doing it. What started as an idea in a muddy campsite at the Leeds festival has now grown into having its own office and six members of staff. Jacob now supplies camping equipment to thousands of festival goers and campers across the UK through his company, The Lazy Camper.
The company, whose best selling product is the £69.99 all-in-one camping kit in bag, is now a proud sponsor of Virgin Media’s V Festival and offers one of the easiest camping options ever to the hundreds of thousands of people at events such as ‘V Festival’ each year.
However this young entrepreneur nearly didn’t make it through school when his teachers found out he was running a confectionary enterprise from his school lockers. When threatened with suspension at fourteen he worried about his future, but little did he or his teachers realise that by twenty-one he would be a successful businessman winning £270k worth of investment for his start-up enterprise. Jacob wants to inspire other youngsters to combat the lack of employment opportunities by thinking big and starting up their own business.
James and Charlie Gerard - Offertune
Offertune was born over a good steak in an empty restaurant on a Monday evening. Two brothers (James and Charlie) were dining with the owner of a small group of restaurants and discussing why the normally busy restaurant appeared empty in the early week.
They realised that large chain restaurants were able to communicate offers to their guests through organisations like Groupon that have large, ready-made databases.
The seed of Offertune was sewn and the brothers worked for eight months trialling and developing software that provides a free tool for restaurants to collect and grow databases and send out free vouchers to their members.
Through a number of trials, they proved that fans of the restaurants would pay up-front and then spend 150% on the night. Charlie and James are now ready to run their business after a turbulent year of setting up but state that the key to their success is their brotherly bond. Charlie describes their relationship as one of the many strengths of Offertune, having a shared background and a similar frame of mind they are able to bounce ideas off each other with no inhibitions for sharing ideas.
As a result of both their hard work and teamwork, they already have interest from household names such as Charles Wells Pubs, Yo Sushi and Loungers, so it’ll certainly be a busy Christmas for them!
Katie Ainsworth – The Celebration Tent
Katie’s business idea grew while she was looking for something out of the ordinary for her son’s first birthday. She spotted this gap in the market and jumped at the chance to have a business that would fit around family life.
In 2011, Katie undertook voluntary redundancy from the NHS to coincide with her maternity leave. Katie dreamt of having a rewarding job that also let her work from home and have flexible hours to be a full-time mum. She realised the only way this would be possible was to become her own boss and she is now leading the way for stay-at-home parents seeking commercial success.
Katie started up The Celebration Tent, offering a decorated five metre bell tent for hire at private events, in April 2013, and has never looked back. Throughout this year, the company has gone from strength to strength as a result of beaming reviews from all of her clients and she has now expanded from one huge tent to four.
Katie describes her job as much more rewarding and challenging than her previous job at the NHS working with high level researchers. She would advise anyone thinking of changing their career and starting up their own business to take the plunge, as it was the best decision she ever made.
This week is Global Entrepreneurship Week – a week that aims to grow enterprise ambition and motivate people to meet their new business potential. Entrepreneurs and budding entrepreneurs from across the globe use the week to share ideas, connect with each other and receive valuable support and advice. Sounds great, but what does this mean for the UK’s small businesses? Why should they care about Global Entrepreneurship Week?
The organisation I represent – Youth Business International – runs the week in the UK and 10 other countries across the globe. Our ultimate goal is to help people around the world to start and grow their own business. Global Entrepreneurship Week gives us a platform from which to drive this goal forward, shining a spotlight on enterprise that enables us inspire and encourage new business ventures. But, for me, Global Entrepreneurship Week is more than that. Now in its tenth year, the week has become more of a movement than a PR push.
The campaign will see over 3,000 events across the country involving in excess of 300,000 people. Very few of these events are organised directly by Youth Business International. They’re organised by partners, from schools who want to inspire their young people to Barclays Bank who want to help businesses take their venture to the next stage.
So why should small businesses care? For me, there are three reasons. First of all, the week can be a catalyst for growth. Our theme this year is ‘take a step forward’ and the activity taking place is focused on giving small firms the tools and encouragement to push themselves, even if they make just one change that will open up their potential. Secondly, the week shines a light on the importance of enterprise – it’s a celebration of the UK’s start-ups and a time to be bold in communicating the value they bring to our economy. And finally, through the week, small businesses have unprecedented access to a huge amount of practical advice and resources, from masterclasses in international client marketing to bookkeeping workshops.
Global Entrepreneurship Week genuinely helps entrepreneurs to get the recognition they deserve and the support they need to grow. That’s why I believe it’s a week that all small businesses should take note of.
For more information about Global Entrepreneurship Week, to learn more about the events taking place across the world and how you can be involved, visit www.gew.org.uk or follow the hashtag, #GEWfwd on Twitter.
Andrew Devenport is the Chief Executive of Youth Business International
I once heard Sir Bob Geldof telling a conference that “you can’t do it all, but you can do your best’, and it inspired me to create my own corporate social responsibility (CSR) strategy for my business.
There’s never enough time or money to do everything you want to do, but you should not use that as an excuse for not doing anything at all. If money is tight, businesses can donate their time and core services to their chosen charities.
Your expertise might lie in accounting, baking or magic tricks – it doesn’t matter. Someone somewhere will appreciate your skills and this will be the most effective contribution you can make.
We adopted Friends for Leisure as our corporate charity in 2008, it’s a voluntary organisation in Cheshire that helps children and young people with disabilities, and they do great work. We provide them with all of their outsourced IT solutions, as well as organising regular fundraising initiatives.
It’s not only your services that will benefit your charity. Inevitably, corporate sponsorship of non-profit organisations raises PR opportunities and the profile of the charity rises (as well as that of your business).
Although I identified the cause I wanted my business to support, there would be no way I could pursue anything without my team’s support. By getting ‘buy-in’ from my staff I not only ensured that we could achieve a meaningful charity programme, but also that we created greater team spirit and camaraderie within the business.
Most charity events have PR value for business that are involved with them and many find that their clients/customers love to get involved too. Choose events that not only benefit the cause, but also your clients/customers, staff and other people to whom you wish to connect.
Motivating staff can be difficult at the best of times, but those who get involved with giving will also be more willing to give more to their day job and you’ll find that they buy into the ethos and culture of the business.
Blog supplied by Gary David Smith, co-founder of Prism Total IT Solutions, provider of Cloud and managed IT services to UK SMEs (and the Friends For Leisure charity).
When starting a business we're faced with difficult questions and difficult decisions. The importance of asking the right questions cannot be overlooked.
You’re probably not familiar with the term “intuitive heuristics”. It means that when faced with a difficult question, we often ask ourselves an easier one instead and then satisfy ourselves that this is the answer we were looking for. Read Thinking, Fast and Slow by Daniel Kahneman if you want to find out more. He cites the example of a stockbroker investing millions in a car company. Instead of asking "Is the stock currently underpriced?" he asks "Do I like the cars?" It's the easier question – but the wrong question.
If the answer to a question requires a difficult, skilled, time-intensive or scientific solution, we often ask ourselves an easier question that avoids any of the above, without noticing. We do it every day.
If we've learned anything from Nobel Prize winner Kahneman, it's that intuition doesn't really exist. It comes with experience. The footballer who can read a game and make impressive decisions quickly does not have an innate gift. He didn't know where on the pitch to stand when he was eight years old and has countless examples of mistimed tackles throughout his career. His understanding of how to react or statistically predict what will happen in a match comes from years of practice, effort and coaching. Any gut feelings you have come from your industry and life experience. Consider it, but don't blindly follow it. Collaborate with other people and learn.
An instinctive reaction to anything is "do I like it?" We know what we like and make a snap judgement accordingly, from our brand name and logo to how our website looks and feels. But if you want to sell more, it doesn't matter what you like, it matters what your customers like.
Consider customer behaviour, industry best practice and using data available on your existing customers to understand what they like, so you can give them more. What would you prefer, a product you like or a product 100 of your customers like?
Don't stop at asking what you're customers like. Ask what your potential customers will like. If you sell pies, you're not just in the pie industry, you're part of the pastry industry, the catering industry, the lifestyle industry. In 1919 a man called Jack Cohen decided to sell more than just syrup and fish paste. He started selling tea and laid the foundations for what we now know as Tesco.
There's always a danger of trying to do too much too soon, but be aware that industries, technologies and customer trends are changing all the time. Don't get left behind.
Blog supplied by Jonny Cameron of merchant service provider Retail Merchant Services
While you’re outlining the vision for your life, formulate some clear goals and write them down. Not having objectives is like taking a journey but not being sure of the route or the destination. Write down exactly how much you want to earn, how many holidays you want a year and anything else that is important on your wish list.
Make your personal and business goals bigger than you can possibly imagine. This shifts your thinking and helps to shake you out of your comfort zone. Even if you don’t hit your goal, you might get 75% of the way there, which is still a bigger leap than you might have made with smaller, more conservative goals.
You don’t need a step-by-step plan but knowing where you want to end up can be enough to get you started.
While I would always advocate starting out with a clear idea, and major goals, that doesn’t mean your business actually needs to start off big from an operational and financial perspective. I believe my success has been down to structured and planned growth, investing small amounts and proving the business model works before moving to the next level.
I had an inkling that Tots To Travel would take off, but it has far exceeded anything I could have imagined. But had I overstretched from the start, it may never have had the opportunity to grow.
And you don’t need to come up with a BIG idea, in fact it’s probably better if you don’t. Costa Coffee didn’t think up the café, they just reinvented what was already out there. We didn’t dream up the holiday lettings business, we just took a different approach from the companies that were already out there.
Extract taken from The Mother of Invention, written by businesswoman, author, mentor for women in business and mother of three Wendy Shand, owner of multi-award winning business Tots To Travel. The book is available to download for free.