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The Wordle above illustrates the frequency of words that appeared in George Osborne’s Budget speech. The bigger the word, the more frequently it appeared – and so, we assume, the more important it is.
The biggest relevant words here are tax and new. Tax is understandable – there were a lot of announcements around the tax system and its simplification. New? Well, I guess the Chancellor took a lot of pride in announcing one "new" initiative after another.
We then have Britain (naturally) and growth. This, the Tories have been saying, would be a “Budget for growth”. Was it? Well, given that the Budget was accompanied by a downgrading of growth forecasts, we’ve got to wonder… Nevertheless, the words business and businesses are reasonably prominent, too.
Work, however, is not. Neither is manufacturing, despite the apparent emphasis on this sector. One surprisingly large word is also. Well, maybe it’s not so surprising – this was, after all, something of an ‘also’ Budget. How many times did the Chancellor say, like a conjuror, “I promised you this, but I’m also giving you this.”
Investment in growth
Tax and business rates
Tomorrow (Wednesday, 23 March) will see George Osborne’s second Budget as Chancellor. Whatever measures Osborne reveals tomorrow, they will be announced against a backdrop of slow growth, rising inflation and impending cuts.
Frankly, it’s not the best time to be Chancellor. As the latest results from Sage UK’s monthly omnibus survey reveal, some 44 per cent of small-business owners are feeling nervous about the impact the Budget will have on their business. Only 5 per cent of the 1,200 survey respondents were optimistic.
So, what are we all worried about? Sage’s survey identified increased National Insurance contributions, enterprise zones and bank lending as the key issues bugging small firms. The small business groups are calling for the business tax system to be simplified and red tape to be reduced - and tax and regulation are likely to be the hottest issues tomorrow.
The coalition government itself has promised the most “pro-enterprise” and “business-friendly” Budget in a generation. They’ve suggested that they’re going to ease employment law, cut red tape and reform the planning system, among other things.
But it remains to be seen whether the government can keep small businesses happy. Follow the Budget 2011 live on the Donuts and find out what happens.
In all my years as an advisor, I’ve seen businesses start up and fail more times than I would have liked. Here are a few common reasons why:
Stuart Hartley is senior consultant and manager of the Corby Enterprise Centre in Northants.
You’re a small start-up company with high ambitions but a tight budget, so how can you go about reaching that large, attentive audience you so desire? It’s simple— use email marketing.
Email marketing is a cost-effective, fast way to engage your customers and potential customers. Added to this, it delivers the highest return on investment over any e-marketing tactic available.
Being a small, new business, you might not have started on the path to creating and developing any lasting relationships with customers, which isn’t the end of the world, but it is something that email marketing can help you with. With each permission-based email campaign that you send and that your recipient opens, you are effectively establishing a trusting relationship with them.
Your email messages will, over time, make your customers feel as though they are an important part of your company. Email marketing campaigns give you the opportunity to inform your growing customer list about updates, product and service promotions, special offers and even changes and developments happening in your company.
Email marketing might not be far off from what your small business is doing already in terms of traditional marketing. Think about it, most businesses already conduct direct mail marketing in the form of specials, promotions and reminders, which means that they are already used to creating this type of material in print form.
Adapting to email campaigns from print is not a huge step, but it will save you a lot of money. It’s also worth pointing out that print marketing is not very targeted or easy to track, whereas email campaigns are highly segmented and targeted and can be tracked right down to who opens, or even forwards your message.
It goes without saying that start-ups often don’t have much time to market themselves. Most email marketing solutions offer pre-built templates and step-by-step guides to help you create an effective campaign in little time, which means the pressure is off you to create one from scratch. You should also be able to view your stats live, which makes follow-up campaigns much easier to manage.
Smaller companies often have more of a loyal customer following than larger businesses, simply because their contact with them is more personal. To be able to begin your email marketing campaign with a list of people who are already interested in you and what you have to offer is a major advantage that you can use to leverage your company to greater heights.
Georgia Christian is the editor of the online email marketing service Mail Blaze
The last two years have been tough. My business, Karacha.com is based in Bangor in Northern Ireland. It sells musical instruments, online and through my shop. Up until a few years ago, sales peaked around customers pay days. Now, people are much more cautious with their money.
Many of my customers now prefer to rent instruments rather than buy them. Our rental business has tripled, because parents are not racing out to buy ‘wee Johnny’ a saxophone until they know it’s more than a fad. Increased caution is to be expected, but it does not necessarily need to result in businesses closing.
In fact, despite the recession, many small businesses we supply have grown. And we’ve had more applications for trade accounts over the past two years than we did before the crunch.
The reason why many independent smaller shops have weathered the storm, I believe, is they are inherently run completely differently than large business. In a well-run small business, the owner has a good knowledge of all areas of the business. The larger a business becomes, the more cracks can appear in the foundations, cracks that can go unattended until it’s too late.
Certainly, in my sector, many businesses that failed were asking for it. Too many people believe the way to grow a business is to add as many locations as quickly as possible. Personally, my aim has always been to secure the biggest net profit on the lowest possible turnover. In other words – maximise my margins, not my turnover.
But in my sector (and in others, I’m sure) the focus hasn’t been on margin, more the drive to grow at all costs, with the misconception that with scale will naturally come profitability. This is why as soon as the recession hit, the smallest dip in turnover was enough to bring down some of the biggest chains.
I saw it firsthand several weeks ago. A company that held stock belonging to Karacha.com went into administration, entirely out of the blue. They had just moved into bigger and better premises and hired new staff to grow the business. All well and good, but they were balanced on such a knife-edge that the loss of the smallest amount of business resulted in them going bust.
In August I was being regaled with their success story. In October I found myself at their warehouse at 5am on a Saturday morning overseeing a considerable amount of our stock being moved by lorry before the administrators turned up.
If your business is worth a £100,000 loan, you or your business should probably be investing the same amount yourself. In the years leading up to the crunch, businesses were opening new premises and expanding too quickly without having a sound bottom line. Consequently, when the banks would no longer play the game, many businesses failed.
The general lesson from what I’ve seen over the last year is that small businesses should aim high, but don’t overstretch yourself or try to run before you can walk. You should seek to grow your business on profit – not on loans.
Adam Ewart, Karacha
There are very few certainties in life, but you’ll encounter one each time you start a new business – you will be smaller than your competitors. Whether by staff numbers, physical space or market share, unless you have a completely unique product you will be playing catch-up.
But this supposed shortcoming presents two opportunities. Take them and you’ll have a selling point your competition will struggle to match – agility and personal service.
Nothing hinders a business like size. Much like the giant boxer undone by his faster, smaller opponent, a start-up can take advantage of market movements far quicker than larger competitors. They often have their hands tied by hierarchy, limited by the fact they cannot make decisions without approval from “on high”.
A start-up will often be an individual/close-knit team trusted in their roles, with freedom in their responsibility.
It could involve writing a great new guide in response to a design flaw of a top-selling product or emailing an offer to trump a sudden price rise. It could even stretch to personally contacting a small number of individuals affected by a very niche item.
Whatever is necessary – you can get there first. First to market. First into customers’ minds. First to the rewards.
You can’t help but feel like just another number when you buy from large business, which is fine and dandy until something goes wrong.
They can employ hundreds of customer service staff on the phone and dedicated instore support, but you always know they’re tied by a pre-determined script and unable to truly grasp your frustrations and how it impacts your life at an individual level.
Strip this scenario of size and you have a personal experience that can make a customer feel treasured and comfortable – even when a problem is encountered. The ability to ask for staff by name, or something as simple as being remembered when you get back in touch, is incredibly valuable to consumers in today’s technology-driven world.
If you ensure everything is in place for a customer, from pre-purchase information to post-purchase support, you can really provide a worthwhile experience. This, in turn, guarantees that the word-of-mouth you crave will spread, and you will not remain a small start-up for long.