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Thankfully, things are going very well for my new business, but I’ve experienced failure in two previous business ventures, as well as huge losses and a risk of bankruptcy. Based on all of my experiences so far, here are my six start-up tips.
If you start a business with a friend, you’ll fall out eventually. Sole ownership and responsibility gets past a tremendous amount of pitfalls and issues that you just won’t anticipate.
Never take a charge on your house and try to avoid providing more information than a lender requires. The bank manager only looks at the information you present him with, so just give him what he wants and leave it at that. When my first business failed, my partner could not find a job and the bank chased me for the total amount of our personal guarantees – which equalled £40,000 and took 10 years to clear.
Do your accounts, get invoices out promptly and don’t accept being messed around over payment. I remember sitting in our largest customer’s reception waiting for a cheque to be written and the receptionists sneering at me. They could afford to sneer, they’d been paid – my staff and I hadn’t. And ask your accountant to visit you every quarter to make sure you are on top of everything. If you wait until the year-end, you can be looking at information up to 18-months-old.
It’s much easier for a small business to lose a thousand pounds a month than to make a thousand pounds profit. Make sure you are on the positive side of that line. If you are working hard, the least you can do is make a profit.
Think of how much you appreciate being paid on time and the goodwill that makes you feel towards that customer. Now flip that on its head. I prefer to be known as a good payer than a bad one, and in these tough times your bill-paying performance will feed directly into the amount of credit you will receive from your key suppliers.
It’s impossible to place a value on a hard-working employee who cares about your business and where it’s heading. Spending extra on wages for certain skill sets or talents that are suited to your business can be the difference between 5% growth and 20% growth in a start-up’s early years.
When was the last time you carefully reconsidered your website? Have you analysed how effectively it’s working for you recently and looked at ways to get it performing even better?
My business website – Flourish Studios – has been live for a little under eight months and we’ve reviewed and tweaked it twice in that time, once after three months and again in October.
Tweaking isn’t about chucking everything out and starting again, it’s about making small changes that make a big difference, such as displaying your “bestsellers” prominently on your homepage.
Logos, websites and blog designs are the three things we sell the most of, so it makes sense to have those most clearly on the homepage. The initial design didn’t include blogs but did include marketing strategy. A quick check with Google Analytics Site Overlay tool showed me that people weren’t clicking on the Marketing Strategy button – so it was binned. We also found that no one wanted to find out how colour psychology could help their business, so that was changed too.
We replaced the buttons that weren’t working with our bestsellers and the click-through rates have gone up. This is less important with a serviced-based business, but essential when you’re selling products online.
I’ve tweaked the copy several times as we’ve settled into our own skin as a bona fide design agency. I look back at what I wrote even six months ago and see how far we’ve come. It’s exciting.
We’ve also recently tweaked the homepage to make way for the arrival of the new video. The video will get people thinking about some very specific things, so it made sense to have them just a click away to the right of the screen.
I also wanted to simplify the “bugs” (ie call to action buttons), because we figured that if there’s a lot going on with the video, everything else should take second place – otherwise you won’t know where to click first.
It’s now a bit cleaner and simpler but hopefully still has the character and essence of Flourish.
Fiona Humberstone, Flourish design & marketing
There’s nothing like the subject of maternity and paternity leave to get people hot under the collar. And so the news that the government is proposing a more flexible system that will encourage men and women to share parental leave has had mixed reactions in the business community.
The new approach will come into effect in 2015 and could include new provisions for parents to take time off in several short blocks.
“We support moves to make parental leave more flexible,” says Katja Hall, CBI director for employment policy — or ‘the voice of reason’, as I call her. “This will help families better balance their work and home life.” But she adds, “Any changes will need to be simple to administer and must allow firms to plan ahead to cover staff absences.”
Absolutely. No-one wants to hamstring businesses.
So what are the arguments against this new flexibility? Some business groups are saying that shorter periods of leave will be too difficult to manage. They say it’s already hard enough for small firms in particular to find cover for employees on parental leave. Some even warn that the proposals could see some small firms going out of business.
OK, it can be challenging for small firms to cover staff on leave. But it’s not impossible. Who are these totally irreplaceable people? And I really don’t buy the idea that parental leave could bring an otherwise healthy small business to its knees.
Mind you, this is the constructive criticism. The more outlandish comments online include rants about “the scroungers who see baby breeding as a way of life” and the suggestion that we “look at this question again when men start giving birth”.
Let’s stick to the facts, people. Lots of couples decide to have kids. Often both of them work. Babies need looking after. People need to work. How individual families approach the division of labour — both bread-winning and domestic duties — should be entirely up to them.
I believe that making parental leave arrangements more flexible can only be good for businesses. By spreading the leave between two parents, the absence of one individual employee is likely to be shorter. And taking that leave in shorter blocks could make it easier for businesses to manage without that employee — knowing they won’t be gone for long.
Of course it all depends how it is administered and managed. Small businesses don’t need any more red tape, that’s for sure. And while these new parental rights are to be welcomed, businesses have rights, too — the right to be kept fully informed with enough notice to make their own arrangements.
The Department for Business is to launch a consultation with businesses on this issue soon. Perhaps if the nay-sayers were to look at the proposals more constructively, instead of offering their usual knee-jerk reaction, we could develop an enlightened approach to parental leave that is good for families and good for businesses.
Previous articles on parental leave
September 2010: Maternity leave extension too costly for small firms, warns BCC
Recently, I discovered the meaning of a ‘BHAG’, it’s big, hairy, audacious goal. Immediately, I loved the idea of setting some out-of-reach challenges that would push my comfort zone. I came up with the following:
Winning an award last year really gave me a huge confidence boost, led to the start of some interesting PR and gave my product the credibility it needed to move forward. Already I have pinpointed three awards to apply for this month alone. It is time-consuming and competitive, but the process of completing the applications enables you to refresh in your mind what your business is all about, while being shortlisted is great recognition. However, my BHAG is to win!
Having been in contact with the PR people for both Sara Cox and Denise van Outen, I sent them photos of the products I’d like to send and then sent both of them a gift from Mama Jewels hoping for a little recognition. At the time they both had very young children and seemed to be the ideal people. I appreciate that this is a tricky one, particularly with jewellery, because everybody has such personal and different taste and perhaps what I thought they might like, may be completely wrong.
I had a very lovely thank you note on Twitter (two in fact) from Denise Van Outen, but nothing from Sara Cox (I guess she didn’t like my choice). I’d be interested to hear how your business was able to get a celebrity quote…
Possibly Mothercare, NCT online or JoJo Maman Bebe. I’ve been taking small steps and building up credibility, now I have people approaching me to become stockists, but so far I haven’t approached the larger stores. This year is the year I want to start working with at least one of them.
Last year was all about taking small, manageable steps, establishing good relationships with suppliers, finding out which designs sell and which don’t, working with small retailers, building my website, trying out fairs and shows and generally trying to create an income stream and gain recognition.
This year I’m determined to see Mama Jewels in larger shops, with more recognised retailers and move a step closer to becoming a recognised brand.
What BHAGs have you set for this year?
Amanda Waring, Mama Jewels
You can find out more about Amanda on the interactive business website www.inafishbowl.com
Research published recently by office-space provider Regus suggests the number of UK businesses who would take on working mums if they were recruiting has fallen significantly in the past year.
More than 1,000 UK businesses were surveyed and only 26 per cent said they would hire a woman with children, compared with 38 per cent last year. According to Regus: “With 43 per cent of firms saying they plan to increase employee numbers this year [itself quite a remarkable statistic], the proportion intending to recruit working mums is worryingly low.”
Sadly, when asked for key reasons, the same tired, old excuses (not reasons) reared their ugly heads. Some 38% fear “working mothers may show less commitment and flexibility than other employees”; while “31% believe working mums will leave to have another child”; and “17% are worried that women who return to the workplace will have out-of-date skills”.
Why are so many UK employers still stuck in the 1970s with their thinking when it comes to women with children? I’d wager that many of respondents were male – whadya reckon? And behind most successful businessmen, usually there’s a dutiful wife tucked away in the suburban background, who’s quietly looked after the kids and home for years.
Women seemed damned if they do and damned if they don’t. Most working mums I’ve worked with over the years could give many of their colleagues lessons in commitment. Trying to balance a career with childcare is no small challenge. Most families these days can only get by on two incomes, so many women have no choice but to return to work after having children – they do so out of necessity, not choice.
And while many women are allowed to work fewer days after having children (employers who facilitate such flexible arrangements take a bow), most working mums feel under added scrutiny and immense pressure to achieve the same results. They could give lessons in working hard, too. Many working mums try to cram as much work into their reduced working week as they did previously, which can eventually takes its toll.
The use of the word “flexibility” by respondents is interesting. This, of course, usually means willingness to habitually work for no pay. Surely by now we all know it’s about working smarter, not longer? And if your business really has to rely on employees’ willingness to work for free, you’ve really got problems. As long as people work the hours for which they are paid, employers can’t really complain.
On a more positive note, again according to Regus, 67 per cent or those surveyed said employers who ignored the potential contribution returning mothers can make are “missing out on a significant and valuable part of the employment pool”.
More than half (51%) regard working mums as “offering skills that are difficult to find in the current market”; and (revealingly) 45% value returning mothers because “they offer experience and skills without demanding top salaries”. (The implication being that some employers believe these women are just glad to have a job, so they won’t ask for pay parity with male colleagues.)
Generalising is a foolish and dangerous act. It’s certainly not my personal experience, but I’m sure there are women who show less commitment and don’t work as hard after they return to work after having children. In many ways, it’s a natural consequence. But as with any other employee, if there are problems with a working mum’s punctuality, attendance, productivity or quality, then your business should have processes and mechanisms to resolve them.
Some women will soon leave again – either temporarily or permanently – to have more children, and this often creates headaches for business owners and managers. But not taking on women with children or women of a certain age for fear they will soon have children isn’t the answer.
It seems some employers still have a lot to learn when it comes to the two-way streets that are commitment and flexibility.
When starting a business, one of the big decisions to make is whether to go it alone or start up with one or more partners.
There are pros and cons to both approaches, but one thing is for sure – it’s one of the most critical decisions you will make in your life. Not only can a lot of future prosperity depend on it, but it can also make a big difference to how happy you will be over many years to come.
If you’re on your own there’s no one else to fall out with; no one but you can decide to give up; have a family crisis or mess things up in some other way.
However, the right partner will usually double your financial resources and experience and you can encourage each other when times are hard. And the cocktail of skills you both have, along with the other factors, means that you’re more likely to succeed.
If you don’t have a partner and your business grows, you will need to employ staff. It’s a big jump from no employees to one (let alone more), both in cultural and financial terms. If there is more than one founder, it’s a smaller step.
When I was thinking of starting a business, for all of the positive reasons above I spent a lot of time looking for and wooing a business partner. I found someone with more entrepreneurial experience than me, who was great at raising funds and who brought with him substantial financial resources. Less than four years after we had started, we’d achieved a full listing on the London Stock Exchange and a business valuation north of £200m.
This experience can be balanced with plenty of other bad examples, of course. But it reinforces the point: deciding on whether to partner and who that partner should be is a crucial decision to make when starting a business.