We've just launched our business planning software – Sage Planning for Business – and what I wanted to do was give you an insight into how we see the business world changing and how you can plan to thrive in it. Here are six key trends I believe anyone starting a business should consider in their planning.
Potential customers won’t wait around for you to 'get back to them'; they're off, looking for someone else who can help them ‘now’. And they’ll find someone, because the internet has changed the game, putting speed at the top of the agenda.
If you can't respond quickly, you need to consider whether your unique selling points are worth waiting for – or if the customer is going to go somewhere else.
The creation and marketing of a business, product or service used to be expensive. It required investment and only the wealthy could afford to do it. They could push products onto their audience because there was little competition, and they controlled the production and distribution networks.
Now you can set up in business for next to nothing, so competitors can and will pop up overnight. Plus, potential customers can visit price comparison websites and go to the lowest seller. And they can read hundreds of reviews online and communicate with other users of your product or service before they buy.
Face facts – you can't control the audience anymore. But, you can be more agile. Try to build flexibility into your offerings, service and marketing to help you adapt more quickly to circumstances.
Gone are the days when customers didn't talk to each other. Today, they're always talking to each other online. And as the marketing author Seth Godin and many others have said: "the internet does not forget".
Whatever you're planning, don't try to spin one 'truth' to one audience, and the same 'truth' another way to a different audience. They'll find out you've been playing both sides against the middle and your reputation will take a real battering as a result. This can be serious and follow you around like a bad smell for years. Stories spread like wildfire online.
The best way to avoid this is to be authentic in everything you do. Speak with passion, speak with conviction, but more than both of these – speak with integrity.
If you are planning to sell online, the more choice you offer, the better you’ll do. This takes advantage of a phenomenon called “The Long Tail”.
Put simply, the internet has enabled customers to find what they want to find, no matter how small a niche you operate in. And because there is no physical stock to store, there are no additional costs to offer that niche product or service. All those niche sales add up, so take advantage of this in your planning.
The world has changed. It's easy to outsource these days. There are thousands of web and social media sites that enable you to hire skilled people to work remotely and cost-effectively. Ask yourself if this might be a viable solution to work into your plan.
Colour TVs used to be scarce, as did bananas, cars, mobile phones, PCs and many other goods. Not any more.
Now, time is scarce, therefore quality time spent with a customer or potential customer is more appreciated and can have a higher value placed on it, but you need to balance this against your return on investment. How much service and support are you willing to provide, and can you charge more for it?
Missed the second episode? Catch up here.
The candidates are once again split into teams of boys (led by the wishy-washy Leon) and girls (led by the formidable Edna). This time they have to create their own mobile phone apps — in just two days.
Both teams come up with sound-based ideas. Can this really be a coincidence or have they been advised that a few quick recordings is all they will realistically have time for?
The boys brainstorm some cracking ideas. “Traffic lights,” says Tom. “Is that it?” asks Jim. “Sorry,” says Tom, “I hadn’t got further than that.” Moving swiftly on…
The boys settle on creating some regional soundbites. Not wanting to offend anyone, they come up with some bland statements delivered in dodgy accents. The app is called Slang A Tang.
The girls plump for annoying noises — a baby crying, nails on a blackboard, the sound of them all talking at once. They create graphics to go with the sounds. For some reason, a picture of an elephant appears on screen when they play the sound of a dog barking.
So both teams have created fairly dreadful apps. But hey, there are some pretty silly apps out there that sell quite well. And these are free. So all they have to do is persuade as many people as possible to download them.
Marketing opportunities abound at a big technology show in London. The teams get to present their app to an audience of about 500 technology bloggers. And they also pitch to the teams at three technology websites. If their app is selected, it will be recommended to some vast online audiences.
Understanding the relative importance of each of these opportunities turns out to be crucial.
Edna is hilarious. She carefully selects the best person to present — herself, naturally — and does so in a pair of long black gloves. But she neglects to explain how to download the app — in sharp contrast to the boys who get the audience to download the app then and there.
Edna comes out of the presentation with a massive grin on her face as the girls gather around her. She is clearly expecting a celebratory group hug but instead Melody speaks for everyone when she says, “I think we got thrashed”. Edna’s face turns to thunder but the grin remains. It’s worth watching on catch-up if you missed it — it’s comedy gold.
It looks like the boys are going to walk away with it. But this is The Apprentice and everyone knows pride comes before a fall.
The boys have actually made three tactical errors and will pay dearly for them. They’ve forgotten that the audience for their app is potentially global and their idea — based on British accents — does not travel. Although they win two out of three of the pitches to the technology websites, they manage to stuff up the big one — Wired — because their app is deemed to be in bad taste. Thirdly, Jim’s copywriting skills let them down. His app blurb is full of clever puns but it’s not immediately obvious what the app actually is.
The figures are in and guess what? The boys have lost. The boys’ app got less than 4,000 downloads while the girls’ app — with its more global appeal — got more than 10,000.
There’s chaos in the boardroom. Leon has to pick two candidates to face the music with him. He selects the people that seem to have come in for the most stick — Jim (for bad copy) and Alex (for doing nothing).
But Jim won’t have it. Employing some kind of mystic mind control he simply tells Leon not to choose him. Leon capitulates immediately and opts for Glenn instead. “I’m not having that,” says Glenn. “Pick Tom”. Tom, incidentally, looks uncannily like actor Michael Sheen.
There is incredulity on the other side of the table.
In the end, Leon, Glenn and Alex get the grilling. I would have fired Leon in an instant for his utter feebleness. But Alex had committed a greater crime in Lord Sugar’s eyes — keeping a low profile. That’s not what Lord Sugar is looking for in a business partner. And, let’s face it, it’s not what the producers are looking for either.
Jim’s power over others is fascinating — will he be able to control Lord Sugar when it comes to the crunch? Gavin and Tom are socially more awkward but could have hidden strengths. Melody is looking strong and will take no prisoners. But little Susie is struggling.
“Traffic lights,” says Tom. “Is that it?” asks Jim. “Sorry,” says Tom, “I hadn’t got further than that.”
Missed this episode? Watch it on BBC iPlayer.
This week Lord Sugar made: nothing
Total profit so far: £624.46
Mood boards, vision boards, design boards – call them what you will, they’re not a new concept. Used by graphic designers, coaches and interior designers the world over, mood boards help you to clarify what’s important to you, visualise what it is you’re striving for and help you to communicate.
We love mood boards at Flourish. And in my branding workshops, I lead small business owners through creating their own mood boards for their businesses.
I love mood boards because they help us understand our client, their objectives and how they’d like their brand to feel. It’s so important to us that we create a brand identity for a client that feels right as well as looks great and mood boards really unlock the gap between what a client says they want (or even thinks they want) and what they actually want.
They also help both us and the client gain a lot of clarity around their business – you can almost hear the penny drop or the light bulb ping as we work through the session and things start to emerge. I really love the way these sessions enrich our creativity and enable us to deliver a very creative and appropriate brand identity for our client.
Intangible businesses, such as management consultancies and services, are very difficult to draw. At times like this, you need some creative inspiration if we’re to avoid trudging down the well-worn stock photography path. Mood boards really spark our creativity and help us enrich the end result.
Finally, everyone that has taken part in these sessions loves the fact that they’ve been a part of the process. I can’t tell you the number of times people have said afterwards “I thought you’d gone mad, charging me for cutting and sticking but that was the most powerful, creative thing I’ve done in a long while”.
It’s not just the mood board itself that helps, it’s the whole process. It’s not just about what goes on the board, it’s about what doesn’t make the final cut too. It’s the clarification at the beginning that comes to life as we work through the session. It’s the emotive responses we have to images, colours and words. It’s the passionate discussion, the lively debate and the understanding. What’s not to like?
Fiona Humberstone, Flourish design & marketing
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Missed the first episode? Catch up here.
The Apprentice is back. There are 16 new candidates. But the game is the same. Cue aerial views of London, close-ups of fingers drumming nervously in the boardroom and cutaways to Karren Brady and Nick Hewer looking like they have smelt something nasty. Build up the tension and then the glass doors slide silently open and there’s Lord Sugar, more owl-like than ever.
But what’s new? It’s the prize — a chance to win £250,000 to start up a new company with Lord Sugar as a business partner.
How simple can it get? Just buy £250-worth of fresh fruit and veg from New Covent Garden market, make something with it, sell it and make a profit. The skills required include negotiation, financial planning, food production and selling. What could go wrong?
Boys’ team leader Edward Hunter claims to be a “wheeler dealer” but when it comes to a negotiation between apprentices and market traders, there’s no contest. The apprentices shake on a deal as if they have won something; the market trader keeps pointing out that he has not actually dropped his price at all.
Food production is always fun to watch. This time, the boys entertain by trying to squeeze 1,400 oranges by hand when the juicers break down. Needless to say, they fall short.
Talk about costs, margins and profit is curiously absent during this task — most notably from trained accountant Edward, who says he doesn’t believe in margins.
The boys vow to “make soup like they’ve never made soup before”. No problem there then — they’ve never made soup before.
Vincent Disneur - doing an impression of a creepy version of the Diet Coke man — as he sells orange juice to girls in offices and leers over them while they drink it.
The girls do better then the boys — but as ever on the Apprentice, they also make plenty of mistakes. Not least, deciding to “save” money by only spending £150 of the £250. Given that they made three times margin, their total sales of £592 could have been closer to £1,000.
But it’s the shambolic boys team that loses and Edward is in the firing line. Lord Sugar says to him, “You said on your resume that, ‘I am Lord Sugar’s dream’. With the greatest respect you’ve been a bit of a nightmare.”
Edward’s rambling defence includes this humdinger: “Not only am I the youngest in the team, I’m the shortest.”
Edward — you’re fired mate.
Gavin Winstanley could be a dark horse. He doesn’t have the bravado of some of the others but he sold well and Lord Sugar seems to approve. Unlike poor Leon Doyle, who is told, “I’m not very enthusiastic about you to be honest”. Jim “souper-man” Eastwood comes in for a lot of praise. Meanwhile, Melody Hossaini praises herself all the time and will undoubtedly make enemies fast.
Vincent: “I’ve got plenty of charisma and yeah I’m not bad looking.”
Missed this episode? Watch it on BBC iPlayer.
This week Lord Sugar made: £624.46
With many businesses still suffering from the harsh economic climate, the rising cost of fuel is unwelcome. Thankfully, there are ways to save on light and heating - many are very simple and even free.
As a starting point, assess your workplace. Are lights left on in empty rooms or equipment left on when not in use? Are employees wearing T-shirts in January? Has the air-conditioning been turned on because people are too hot? All these things can be rectified at no cost, simply turning off lights or equipment when not in use or turning down heating can make a big difference.
To truly understand how much energy your workplace is leaking, invest in a Commercial Energy Performance Certificate (EPC). These cost £200 and will highlight problems – and tell you how to rectify them. If you rent an office or manufacturing facility, this is down to your landlord. They should have presented you with a Commercial EPC when you moved in.
An energy-efficiency drive needs the support of the whole business, so get everyone involved. Incentivise energy-saving acts with rewards for cutting costs. You can ask your utility provider to help out here, too, by providing details of energy used before and after you made the changes. Beyond energy used within the workplace, you could also encourage your staff to walk or cycle to work and do simple things such as cut down paper use and recycle more.
Smart meters monitor electricity used and equate this into pounds and pence. They are a great way to get people to understand the true cost of boiling a kettle. Currently being rolled out across the UK over the next 10 years or so, some electricity providers already offer them for free.
When it comes to lighting, apart from energy saving bulbs, there are low-energy options available and, if you can’t trust employees to switch things off, motion-sensor lighting can provide a great solution.
A single computer and monitor left on 24 hours a day will cost a business more than £50 a year. Switching it off out of hours and enabling standby features could cut this to £15 per annum, according to the Carbon Trust.
Get to grips with the timer and thermostat on your heating system, but don’t switch it off completely – warming up a freezing cold room wastes more energy than keeping a low-base temperature. Switching your thermostat down by one degree could save 8 per cent on your heating bill.
If you haven’t got a condensing boiler – consider making the investment. Heating controls can further optimise efficiency, taking into account things such as computers and lighting that give out a lot of heat. Talk to a Gas Safe Registered engineer to find out more.
Make sure all radiators are free of obstruction from furniture; invest in draught proofing and some thick curtains.
Next year, the Green Deal will provide insulation for ‘free’, paid back through utility bills, more information can be found on the Department of Energy and Climate Change website. The Carbon Trust also offers interest-free loans for energy saving measures.
Shop around for a better deal and negotiate – they all want your business so you might get a special offer. If you really want to ‘go green’ look at where your energy comes from, too.
To reduce your carbon footprint you could invest in renewable technologies. Feed in Tariffs give cash back for electricity generating technologies. Next year a similar scheme is being launched for heat generating renewables. Make sure you employ Micro-generation Certification Scheme (MCS) accredited engineers, because you won’t have access to these initiatives unless qualified trades people install your equipment.
Mark Krull, Logic4training
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In the early stages of any business, it’s easy to spend heavily on all kinds of start-up costs. Each item may seem small in isolation, but they all add up. Without proper care you could be burdening your fledgling business with unnecessary overheads.
Even if you've managed to secure investment, your start-up capital should only be spent on things that add value to the business. This is especially true if you’re funding the business yourself. I question whether it is absolutely necessary to invest in the following four areas:
Do you really need them? They may make you feel more important, but do they really add enough tangible value in the early stages? As well as the obvious choice of working from home, there are many places you can use to “hot desk” and arrange meetings. Alternatively, see if you can rent a corner of someone else’s office. In these tough times, many businesses will welcome such a contribution towards their rent.
As well as the actual salaries, there are plenty of hidden costs associated with hiring staff, such as National Insurance contributions, holiday and sick pay, etc. In today's modern, flexible economy, it pays to use freelancers for tasks you can't do yourself.
There are open source versions of most desktop software packages to cover most of your everyday requirements. An example is Open Office. The internet has made it easy for small software developers to publish a multitude of free and low-cost software applications, so take your pick and save some money.
Face-to-face meetings are sometimes important, but try to limit them to ones that are essential. With all the communication tools at your disposal such as video conferencing and free VOIP calls, you can cut your travelling expenses drastically.
Of course, there are moments when the purse strings just have to be loosened. The following three areas are essential to invest in wisely.
As a small business, your existence is defined by the quality of the products or services you offer. Make sure this is optimised to its full potential. Always be thinking of how you can improve and differentiate your service.
How you present yourself is critical to ensure confidence – not only from your customers, but also your suppliers. As a minimum, make sure your logo and website exude style and reflect your business well. Good design is really important these days. A decent freelance designer should cost no more than around £250 per day. This is money well spent.
This is easy to overlook when you’re pulled in several directions. But it is so important to make sure those precious first customers are really well looked after. Drop everything to deal with their queries. Treat them well and you’ll be rewarded in the long term with a loyal kernel of customers that will be unpaid ambassadors for your company.
So, my advice is invest sensibly in your start-up; avoid the big overheads for as long as possible; and keep a realistic view of how much time it will take for your business to gain real momentum.
Jonathan Rodger is managing director of email marketing service Message Horizon.