Would you ever consider setting off on a long, unfamiliar journey without your SatNav or road map and only a dribble of fuel in your tank?
You might make good progress for a while, but before too long the roads will narrow, your fuel gauge will hit zero and your mobile will show no signal. HELP! Oh, if only you’d bothered to plan ahead!
Funnily enough, business planning is just like going on a journey. You know your destination, that fine place called Success. But knowing where you want to end up isn’t enough because you need to plan your route, too. And you must be vigilant, watch out for obstacles and steer clear of roadworks – not to mention bad weather and mile-long traffic jams.
If you’re serious about starting a business, you need to be serious about planning. You must focus on your ultimate goal – fabulous success – and determine your route towards it. This ranges from the grand plan right down to what might seem like insignificant details. If you plan for all eventualities – however small – you’ll know exactly how to deal with them when they, inevitably, crop up.
I took this approach in starting and running Diva Cosmetics and it quickly brought me success and wealth. Now, having moved on, I feel that passing on my knowledge called Seven Business Disciplines to budding entrepreneurs like you will bring you success. If strategic planning (my first discipline) is about visualising your destination, then business planning (discipline two) is how to plan your route to get there.
Let’s look at planning basics. What is a business plan? In a printed form, it’s a surprisingly slim document. Only 25 or 30 pages with a front cover carrying the business name and logo. Inside, the business idea is thoroughly investigated and includes supporting facts, figures and research. The writing style is easily readable within bite-sized paragraphs and technical jargon and waffle are banned. Titles and headings are concise with the overall structure being simple, focussed and well-organised and there are, of course, no errors (whether spellings, grammar or figures).
If the thought of sorting out your business planning sounds daunting, long-drawn out and too demanding of your scarce time, you should take comfort in the fact that this initial burst of effort will pay real dividends. This one document – and all the research that you’ll need to carry out for it – will help you decide whether or not the idea will fly. It will signal your chances of success and how to go about achieving it.
What are the key elements you need to include?
Once you’ve dealt with these elements you’ll be in a position to write an executive summary, a two-page summing up of your start-up. It should be convincing enough to excite potential investors, as well as boost your own confidence. Although this is written last, your summary should be at the front of the plan, where it needs to pack a powerfully persuasive punch.
When you’ve finished that first draft, you need to step away from the process. Return to it a couple of weeks later and read it several times. Make notes, gather more data and rework parts that don’t read well. Double check your facts, especially your figures, because they need to stack up and be impressive. Make sure the tone of the document shouts the right message. Does it ignite your passion? If not, revisit the words you’ve used and choose more dynamic, proactive, positive language.
Ask a business colleague, mentor or supporter to review it. This must be someone you trust, who has good judgement, knows you professionally and has an insight into your industry. Ask them to be honest and use their comments to hone what you’ve already done. After all that hard work, don’t allow it to languish on your desk. Instead, actively use your plan for reference, it will help you make good business decisions, take fewer risks and keep customers in the front of your mind.
At Diva Cosmetics, right from start-up, I updated my business plan regularly and used it to keep ahead of the competition. By focussing on the business, I was able to make decisions about staff requirements, how to expand the team and in what areas. I was able to review costs, check suppliers and understand the implications on the business should anything go wrong. I would undertake a full competitive review each year and adapt the marketing strategy on the basis of it.
My advice to you is to make your business plan a “living” document that evolves and adapts as you progress on your journey. Remember that planning is a necessity and if you want success you can’t afford to ignore it. So, I hope your journey into business is a smooth one – no collapsed drains or muddy old tractors up ahead for you – and do make sure you check your fuel gauge!
PR is essentially about developing your business by raising its media profile. For a small business, effective PR can be the difference between success and failure. At HearingDirect.com we recognise the value PR brings to our business. Here are our top tips for generating PR coverage:
Who is your product/service aimed at? Successful PR works because you reach the right audience with a clear message that is relevant to them.
Knowing and understanding the media outlets your target audience consumes will help you target your audience. This will enable you to get an idea for the types of stories you need to pitch to maximise coverage.
Your story must tell your audience something they haven’t heard before and fit the profile of your target publication. For example, a local newspaper is more likely to cover a human-interest story, while a trade publication is more likely to focus on industry issues. In both cases, however, editors want a relevant, interesting “hook” to the story. Make sure you have created a good plan with a clear message.
Many journalists/editors are too busy to read all of the emails they receive, so always identify the right person you need to speak to and call them before sending your story. Always call them at the beginning of the day. When speaking to them, and in the follow up email, your message should be clear and concise – you should be able to sum it up in a few sentences. If it sounds too complicated, it’s likely to put people off. Anticipate and clearly label all materials editors need, explaining why your story is worth covering. Mark the email you send with the words “Press Release”.
A good photograph can be the difference between a story being published or not, because editors like to illustrate stories with images that draw in readers. However, nothing is more amateur than using passport or home photos for publicity shots. Spend a couple of hundred pounds getting some professional single and group shots of your staff. Buy the copyright to the images and make sure they’re supplied on disk. This means you can offer journalists high-quality photos via email at no cost.
You need to build good relationships with journalists because this is the basis of your interaction with the media. These take time to develop and should be viewed as a long-term investment.
Everything you say to a journalist is ‘on the record’ and can be referenced unless you are specifically promised otherwise in advance. Journalists don’t have to show you their story before it goes to print. Always ask a journalist what their deadline is and send them everything they need within that timescale and be aware your story may not appear in the next issue – or even at all.
Digital hearing aid sellers HearingDirect.com was recently voted the UK’s 59th most promising start-up for 2010.
Deadly is the Female is a Frome-based boutique and web shop specialising in fabulous quality faux vintage fashion from head to toe. Both in store and online, the shopping experience is designed to make their customers feel like old-time Hollywood starlets.
Claudia has been using social networking websites since opening her shop in November 2008.
“We started out with a MySpace page,” she remembers, “which was the site with which I was most familiar, but I soon realised many of our followers were more focused on Facebook. We now mainly use Facebook and Blogger with some Twitter on the side.
“We try to find a balance between updating regularly and bombarding people to the point of irritation. Generally, we post something on Facebook every day and on Twitter a couple of times a week.”
Do she have any good social media tips? “I find it useful to follow other people with similar businesses and learn from them. This is easiest when they do things that are annoying. I hate getting slight variations of the same picture posted again and again, so don’t do that. Try to keep things fresh and don’t focus on selling all the time, a little bit of personal stuff is a good thing, too.”
Claudia recently started using Google Analytics, to find out more about site usage. “You wouldn’t ever guess some of the keywords that lead people to your site. Occasionally, we’ll run Facebook exclusive sales, too - which is a great way to see if people are paying attention.
“Social networking is a great way to connect directly with your customers. You can ask opinions or for help and advertise events. It’s also useful for keeping an eye on trends and gauging popular opinion, which even in a niche market has an impact.”
She says her favourite thing about Facebook is the variety of ways it can be used and how visible everything is. “You can make people feel involved by tagging them. Twitter is great for short, sharp information sharing. I feel less comfortable with Twitter, but I’m still learning.
“Social networking can be quite time-consuming but it’s worthwhile. The instant feedback and volume of information shared is like nothing else and it can help with making important day-to-day business decisions. I sometimes still feel a bit silly typing my thoughts out and sending them out into the unknown, but it’s worth it.”
And if Claudia could only use one social networking site? “It would be Facebook,” she replies. “It’s so easy to add attractive links to specific pages of the website as well as endless photos, videos and just about anything you can think of. You can have your own identity without the clutter of some MySpace pages and you can make people feel part of your brand. Using social media for business marketing takes time and practice to find out what works, but my advice is stick with it and stay positive,” she concludes.
I am sure we have all heard the expression “rule of thumb”. I am also sure we can all relate to decision-making based on these rules. In a past role as an IT director, the rule “never be biggest and never be first” proved true on numerous occasions, some of which were when I didn’t follow it.
Rules of thumb based on our own experiences can be useful, but can equally be dangerous. Of course we can conjure up a rule to justify virtually anything. The choice between “too many cooks spoil the broth” and “many hands make light work” springs to mind in this context.
So with that caveat, I present my four rules of thumb for starting a business:
It amazes me how many people plan a start up, especially selling online, where they intend to undercut everyone else. The only way this can work is if you have something that makes your costs lower than all of the competition, for instance, by having a special relationship with a supplier that ensures you receive the best prices. If you don’t and stick with that strategy, you will go out of business, overwhelmed by all the new entrants pursuing the same strategy as you, and by those that have a cost structure that enables them to succeed.
If you are good at something, you tend to enjoy it. If you enjoy it, you tend to be good at it. Starting a business is bad enough without being involved in something you know nothing about or worse still – hate.
Until you have some happy customers, you only have a theory. Once you have some happy customers, you have a business. Some people who deep down in their heart are unsure about their idea postpone the day when the customer meets the product. In contrast, you should make that day happen as soon as possible. If it’s not going to work, the sooner you know, the better.
Money is the most precious resource when starting a business. You need to focus this resource on finding customers and giving them what they want. Everything else should be kept to a minimum.
These are my top rules of thumb for starting a business – what are yours?
Amazingly, a change in policy means that if Companies House compulsorily closes your company you could avoid paying any Corporation Tax you owe.
How? It seems that Companies House has adopted a new approach to closing a limited company (by a process known as “striking off”) if that company does not complete an annual return.
An annual return, of course, is a snapshot of certain company information at the made-up date (ie address of registered office, details of directors etc). It is different to the company accounts and does not contain any financial data about the company’s performance.
There are no fines for filing the annual return late, unlike if you file your accounts late, where fines start at £150 and rise to £1,500 for private companies.
For clarification, I telephoned the Companies House helpline and was told: “We changed this in about August 2009. If companies do not reply to our letters, we begin the ‘strike-off’ after about two to three months. The change was as a result of a policy decision – not a change in law.”
As a result of the action by Companies House to close the company, technically, the company no longer exists. And a company that no longer exists cannot pay Corporation Tax.
Because Companies House took this action, the directors or shareholders have not avoided their duties to inform creditors.
So let’s just say you have a company that has traded, made a profit but for whatever reason has been compulsorily closed down by Companies House, then you could just start another one and do the same again.
It seems that while HMRC is told of these compulsory closures, it is not doing anything about them.
It could easily stop the close down until it has the final accounts and tax paid by the limited company.
Why doesn’t HMRC do something about it? That’s the question I would love to have answered.
Should HMRC do something? Well in my opinion – yes. At the moment, in this regard, HMRC is avoiding collecting taxes. Mind you – should we be surprised about another HMRC fiasco?
While I totally disagree with the ethics behind owners of companies taking advantage of this loophole, it is legal and done with full knowledge of Companies House and HMRC. So who am I to question it?
Caution – if the company is closed the business bank account will be closed and the money belongs to the Crown, as will any other company assets.
There may also be other reasons for not wishing your company to be closed down. However, I’m sure there will be a few who will enjoy making use of this loophole.
Elaine Clark, www.cheapaccounting.co.uk
Nicki started her online vintage boutique a year ago on the back of her career spent in fashion journalism, women’s magazines and websites. Having always loved clothing with a sense of history and fancy dress, she started sourcing unique and charismatic vintage items from the UK, America and Europe.
Nicki says: “The boutique is all about style-savvy women having fun experimenting with fashion, encouraging eco-friendly shopping and preserving a piece of the past in their own individual way.”
She’s been using social networking sites since she launched the business in August 2009. Mainly she uses Facebook, Twitter, Flickr, Blogger, MySpace (not as regularly) and professional sites such as LinkedIn.
“I try to update Twitter daily – if not every other day – and Facebook, on average, once or twice a week. I used to blog every day, but time constraints now mean I can only manage once or twice a week. The MySpace page is pretty static, and I update Flickr every month or so with new stock images.
Does she have any tips for successful use of social media for business? “Keep at it!” she replies, “You have to do regular updates to maintain interest. Be creative – think outside the box. We only just started posting pictures of celebrity outfits and finding the vintage equivalent on our website. Also, link, link and link some more. Promote other people who promote you, tag photos, mention names and use content that will engage. You’ve also got to use social media channels differently. Facebook and Twitter are two very different tools, so try and use them both to their full potential.
To measure traffic, Nicki has Google Analytics installed on her boutique website so she can see who is coming from where. She adds: “Facebook emails me weekly stats on how many fans my page has and comments made; Blogger has a 'followers' tool and I get a lot of messages through Twitter and my website from people via social media.”
Social media has also enabled Nicki to more conveniently gather customer feedback on her products and website, which is crucial for an online shop that can’t interact with customers face to face. Her business profile has also been raised. She says: “Our recent video and feature for GLAMOUR magazine actually came from Twitter. I took the time to help a girl out with something for her university fashion course, and she was in the right place at the right time to recommend us directly to the magazine.”
Does she think social networking is worth the time she spends on it? “Yes I do. Social media is essential for modern marketing - especially when you’re primarily an Internet-based business such as ours. You rely solely on getting those clicks and getting your brand out there and social media is hands down the best way to achieve this. By listening to what customers and people online are saying about your business and your brand, you will only improve your service. My only regret is that I wish I had more time to dedicate to it, because it can be so time consuming - but so worth it!”
If she could only use one social networking site, which would it be? “A very tight contest, blogs second only to Facebook. As much success as Twitter has bought me, whatever you tweet feels so momentary. Also, you can’t represent who you really are and what you’re about in 140 characters and I like having more creative control over social media. Facebook allows this and also reaches out to a wider audience. Some of our fans are 16, while some are 60.
“Facebook is more recognised channel, whereas many people I know still don't understand Twitter. Facebook is the easiest site to get people engaged because your updates land in their own personal feed, keeping your presence known, without being intrusive. You can combine links, photos, feedback and status updates plus receive comments all in one place - which is why I think it’s best.”