Ten years ago it was all about importing from China, but today businesses talk about China's market potential. However, few exporting start-ups know anything about how to get started, the various potential pitfalls or how to pitch a product for the demanding Chinese market.
You can forget about this even if you manufacture your products in China. Lower taxes, lower rent and Chinese businesses’ ability to “game the system” makes price competition a no-go for exporters. The good news is that Chinese consumers are ready to pay for quality – foreign quality in particular. Made in the UK is a quality mark and something that local suppliers cannot replicate. The only thing that really makes sense for exporting start-ups is to compete on quality instead of low prices.
You don’t need to set up a business in China to reach its market. Exporting directly from the UK is good enough for most start-ups. However, to get market exposure you will benefit greatly from having a local partner with an established logistics network and relationships with purchasing managers in the country. Relationships matter in China, they are generally considered to be more important than the product itself.
Chinese distributors can be found online or by visiting one of the various trade shows in Shanghai, Guangzhou and Hong Kong. When you have found a suitable distributor, it’s critical to sign a distribution agreement. Getting paid is not as simple as it might sound. There are commission-based distribution agreements, where the exporter gets paid based on monthly or quarterly sales. However, sales volumes are hard to verify and taking your distributor to a Chinese court is often too expensive and time-consuming for a start-up. The best option is simply to get paid upfront by the distributor and not settle for any complex commission-based agreement.
A local office and manufacturing in China, for China, makes sense when you’ve reached a high export volume. However, many exporters assume that the Chinese government requires foreign businesses to team up with a local partner to gain market access. This was true in the past, but many things have happened since then. Since 2004, foreigners can operate in China as Wholly Foreign Invested Enterprises (WFOE). Apart from a few industries, the market is free for all and no local partner is required.
Filing your trademark in China makes sense more than anywhere else in the world. It’s not uncommon that third parties file trademarks to block foreign companies from entering the market and then offering to “sell it back” for a hefty price. Your product should also have a Chinese name, thus a Chinese name trademark is also necessary.
Fredrik Groenkvist is founder of Chinaimportal, a membership service for start-ups and small businesses sourcing products in Asia.
One of the most important things to consider when setting up your new business, whether it’s accountancy or building, is health and safety. But don’t worry – it doesn’t have to be complex, just be sure to seek professional advice if ever you are unsure about your responsibilities.
Legally you are obliged to decide exactly who will be responsible for health and safety in your business. Many bigger companies delegate this to an external consultant so that they can concentrate on other things, but new business owners usually accept this task themselves. You must ensure that you or your appointed person is competent to take charge of your health and safety.
As a start up you are unlikely to need a written health and safety policy (it’s only required if you have five or more employees), but it wouldn’t hurt to have a written record of the risks you have identified and how they will be handled. No matter what type of business you run, your health and safety policy should describe how you will:
Every type of business will present a different set of risks and hazards that could affect its employees, visitors, customers and even those just passing by! For example, a member of the public passing by a window cleaner could be at risk from falling objects if the window cleaner hasn’t properly considered the risk and taken steps to reduce the likelihood of it occurring.
Of course, no one expects you to completely eradicate all risks and hazards. Many of them will be part and parcel of your new business – hazardous tools and electrical equipment are used in every trade and industry, from gardening to hairdressing and construction. But you must be aware of the risks they present and take reasonably practical steps to protect anyone to whom they could present a risk.
As a new micro business, you’re unlikely to need to delegate the management of your health and safety to others, but if you don’t have the required knowledge or experience to handle it – seek training with a professional and reputable organisation. The additional cost may seem unnecessary – but it will ensure that you fulfil your legal obligations and help keep you, your employees and your customers safe.
This post was written on behalf of Health & Safety Training Ltd
We all have exactly the same number of hours in a day, so why do some people seem to have enough time to do everything they want to do and others never seem to have enough?
If you want to be more successful, you need to use your time in a way that brings you the success you want. To do this you need to understand how you use your time and what it is worth.
A few years ago I sat down and worked out what my time was worth and how I wanted to spend it, and for the past two years my annual income has doubled. Here are my tips:
Start by looking at how you spend your time - the balance between business activities and the rest of your life. I suggest you go through your diary and colour-code the time as follows:
Notice how many weekends and evenings you are using for business meetings and events. Ask yourself if you are happy with this and if it’s bringing you the benefit you want. If so – great. If not – don’t do it anymore.
Next, understand how your daily activities contribute to your overall business (and life) goals. For example, if you want to double your turnover, you need to work out what your time is worth in financial terms. Here is how:
As soon as I doubled my income generation hours (green) and reduced the other hours, my turnover doubled. Last year it doubled again.
Here are some tips to help you focus:
Time and money are our two greatest assets. If we use them well we can create the life, business and lifestyle that we choose. It is our personal experience of time that matters. Are you happy with how you spend your time? If not then I suggest you review how you currently use your time. Work out what your time is worth – do the maths. Think about what is the best use of your time if you are to meet your goals.
In just 20 months, Vicki Wusche made the transition from single mother on limited income to being financially independent and having a property portfolio worth £2m. She runs a successful business that sources property for other investors, teaches people how to invest in property and has written many popular books on the subject.
Trade shows and conferences can be some of the most effective ways of drumming up business. Whether you’re there to meet potential affiliates, clients, employees or other businesses, you will want your exhibition stand to look as slick and professional as possible – so here are five tips for improving your chances at making a big impact:
A way of grabbing the attention of passers by, these posters make a statement and can help you to stand out from the crowd, literally, since they will be visible above heads. Two or three such posters can cover different aspects of your business or address different potential audiences. Plus, they are easy to store and transport because they are collapsible into a small space.
If you have a stand with a back or side walls, this is prime space for branding. You may choose a simple logo to draw focus to your brand; you might want specifically designed posters to communicate your products, message or ethos. Find out the dimensions of your booth so that you are not either left short or struggling to fit everything in.
A good supply of high quality business cards will be essential while networking at a conference. Ensure that they are up-to-date with all details and appropriately branded. Be sure all delegates carry a wad wherever they go – especially to talks and social events.
For a more comprehensive overview of your business and products, you might want to opt for a brochure that potential associates can take away with them. Try an unusual design or format to make it memorable and interesting.
One of the best ways to draw attention to your brand is exciting branded giveaways. A good giveaway should be memorable, useful, interesting and clearly branded. USB sticks, notepads, business card holders, phone covers can all be branded and used. Another avenue to try is a fun game or a good novelty item.
You never know what the tables provided at conferences will look like – they might be quite old and run down, so you will want to make sure you have a good quality cloth to cover up any old scratches and stains. It’s also a good opportunity to continue your branding – you might choose an on-brand colour or get your logo printed directly onto the cloth.
This guest post was provided by Nexus Design and Print.
Twitter celebrated its seventh birthday on 21 March and, with an estimated 1.2 billion Twitter accounts now registered, 200 million active users and 400 million tweets sent each day, it is more important than ever that businesses have stringent social media policies in place.
With the majority of businesses using social media regularly as a tool for self-promotion, interaction with clients and even recruitment, it is easy to forget that potentially millions could read the message you are composing.
The law of defamation concerns the publishing of statements that harm the reputation or character of someone resulting from the false statements or actions of another, and it is crucial to remember that the law treats the online world much as it does the real world.
In other words, every tweet is potentially a fresh publication for defamation purposes, and anyone who tweets a defamatory statement could be held liable for damages. Businesses must be aware because every tweet sent from a work-linked account could attract vicarious liability.
Unfortunately, it does not stop there and even comments on personal accounts might bring a business into disrepute if they can be linked back, which also demonstrates how vital it is for employers to have clear policies and training in place to deal with social media activity.
The misuse of social media has also led to numerous publicised dismissals. A report obtained through the Freedom of Information Act found that 11 civil servants at the Department for Work and Pensions (DWP) have been sacked for misusing Facebook or Twitter since January 2009, while a further 105 employees have faced disciplinary action.
A social media policy should ideally include detailed information on what staff should and shouldn’t say and do on social media, privacy settings that need to be enacted, how to react to requests for references and what to do if an adverse comment is published.
Because of the nature of social media, it is very difficult to abolish the use of it altogether and this may well be counterproductive anyhow because it offers an abundance of benefits.
However, it has to be used correctly and appropriately if these benefits are to be seen. Therefore, when employees are encouraged to use social media as part of their job, employers are advised to have a ‘best practice’ guide available. Appointing a ‘social media’ officer or champion as a point of contact for those in doubt is also highly advised.
Crucially, once a social media policy is drawn up it is important that it is not simply locked away in the store cupboard and out of employees’ sight. It must be easily accessible and well publicised to ensure that all staff members are fully aware of their responsibilities when it comes to using social media.
Even if your resources are limited and social media isn’t a primary tool for your business, the costs of not being in control of it within your company are too big to be ignored.
By Lee Calver of employment law specialists Workplace Law
I’ve always been business-minded, looking for solutions to problems, finding ways to improve things and thinking of ways people could do things better.
I have several family members with their own businesses and that probably influenced me growing up, because I’ve always wanted to run my own business, too. Working for other companies and helping them grow made me realise that this was something I could do for myself, so I set about trying to make that happen.
I was introduced to Nadine, who had 15 years of experience in the travel industry, and we launched eShores in 2007. Nadine and I worked from her spare room for 12 hours a day, seven days a week. Within four months we had built the business up enough to move into a small serviced office and take on two staff. That’s when we knew eShores had really begun!
We saw a gap in the market for a travel company that provided the ease of booking online with the level of service and support offered by high street agencies. We knew that if we were to go down the luxury route and provide high quality service throughout the whole holiday experience, we could create a business that was unique in the market at that time.
Once we’d seen considerable success with eShores we decided to try branching out by launching another website that offered cheap holidays that could be booked online. Quickly we found that marketing the second website was very expensive and difficult, because it didn’t offer anything different from other cheap holiday sites.
Trying to expand the business was a costly endeavour, but it made us realise that it’s not always best to branch out into a different area. If you have something that works, it’s better to focus all your time and effort in to making it the best it can be.
We don’t regret trying out the second business. It had an effect on eShores and took our focus away from the main core of our business, but this simply taught us a valuable lesson in keeping 100% focused on the main product, because this is what works best for us.
My advice to anyone starting out in business would be: choose the market that you want to aim towards and build it around that; and make sure you offer something different – you must stand out if you are to succeed.
Business partners Gavin Lapidus and Nadine Brown run eShores, which is now in its sixth year of trading.