I recently listened to a brilliant podcast called "Start-up". Unsurprisingly, it's about a guy who's starting his own business. What is surprising - at least to someone who isn't in the middle of starting a company from scratch - is the sheer scale of what he had to do.
Coming up with a great idea was just the beginning; turning that idea into a business involved organising finance, creating a product, hiring staff, finding premises, negotiating contracts, making plans, managing crises - not to mention living on a shoestring until revenue started coming in.
But one thing that made it easier for this start-up business was the fact that other businesses weren't stopping him from starting up. This may sound obvious. But behind the scenes, the invisible hand of competition law ensured that he benefited from a level playing field.
Start-ups can be sabotaged when bigger, established businesses don't like a new competitor's cheaper prices, better products or innovative, more efficient business models.
They try to find ways to block them from advertising cheaper prices. They stop their customers from using them. Or they use their revenues from other products to fund discounted prices and squeeze their fledgling competitor out of the market - before hiking their prices right back up again.
At other times, start-ups are stopped or slowed because the suppliers they use are colluding on prices or dividing up markets. This artificially drives up prices, making a new company pay more than they should for essential services - the last thing they need if they want their business to be a success.
Hindering other businesses like this is unfair, anti-competitive and illegal. Indeed, healthy competition is the very reason why new businesses launch in the first place, and there are serious penalties for businesses and individuals who behave anti-competitively, including fines and prison sentences.
Before embarking on any new business venture, it is vital to know what anti-competitive behaviour looks like. On the one hand, this means that where you become a victim, you know to report it and you understand that it can be stopped.
On the other hand, you need to be able to recognise price-fixing, market-sharing, bid-rigging and resale price maintenance to protect your own business from getting into trouble with competition law.
The good news is that the basic principles behind competition law are quite straightforward. If you'd like to know more about it, you can follow this link to Competing fairly in business - a collection of free, bite-size materials, including one-minute videos on each aspect of how to compete fairly.
Make sure you know as much as you need to about anti-competitive activity - it's worth the few minutes it will take to read up on it.
Sponsored post: copyright © 2016 Susanne Quick, Competition & Markets Authority.
As a start-up or small firm, you are always striving to minimise your fixed costs. When it comes to energy savings the good news is that you can reduce energy usage (and costs) relatively easily.
The Carbon Trust has found that even low cost and cost free actions can reduce a business's energy costs by 10%, with quick returns on investment.
Before you start, you need to find out who your business energy supplier is, what energy package you are on and what other packages are available. Note the prices you pay for comparison later. If you have moved into new premises and you don’t know your business energy supplier, this guide from Ovo Energy can help.
Heating (including ventilation and air conditioning) and lighting are often your two biggest energy costs. They can make up almost 100% of your energy usage (heating up to 60%; lighting up to 40%). You can make substantial savings by ensuring that your heating is well maintained and operating efficiently.
There are many ways to reduce lighting costs. Switching from traditional bulbs to LED fixtures could make large savings. Adding occupancy sensors, which either dim or switch off lighting, can reduce your electricity usage by up to 30%. Daylight sensors can also adjust lighting to naturally take advantage of daylight; these can save up to 40% of lighting costs.
Encourage staff to switch off equipment when not in use rather than leaving it on or switching it to stand-by. It might not seem like much but a single PC and monitor left on for 24 hrs a day will cost £45 a year in electricity. Turning it off at the end of the day could reduce this to as little as £10.
Installing cheap and easy fixes such as self-adhesive thermal strips around doors and windows will reduce draughts which can account for as much as 10% of any heat loss. In the same vein, fitting automatic closures on doors will also reduce heat lost through doors left open.
Now you have reduced your usage it is also time to check you are getting the best price per Kwh, especially at peak times. Use a business electricity comparison tool to check where the best deal is and switch if your current provider doesn’t offer this or can’t match it.
All the figures given for reductions in energy usage, cost and efficiency savings are from the Carbon Trust.
Sponsored post: copyright © 2016 Russell Bowes, copywriter and SEO expert.
Last year marked another landmark period for UK entrepreneurialism with more SMEs opening their doors for business. According to data from Companies House, 608,110 businesses were started in the UK in 2015, a new record and up from 526,447 in 2013.
This is further proof, if any were needed, that SMEs provide the backbone of the UK economy. But for each of these new businesses, the next big challenge on their exciting journey is deciding how and when to grow. Funding is the key issue: where is the money going to come from and how will it be spent?
That is why we established The Business Funding Show. It is the first and only exhibition focused exclusively on business funding and growth support. It takes place on the 2nd and 3rd of February this year in Old Billingsgate, London. The show will bring together two key groups of people - entrepreneurs and business owners that are looking for funding and leading finance and service providers. This new event will feature expert advice from titans of UK business such as Richard Reed, serial entrepreneur and founder of Innocent Drinks, as well as other leading figures such as David Buttress (Just Eat) and Lord Bilimoria (Cobra Beer).
The funding market has changed beyond all recognition in recent times and the days of a visit to the local bank manager are long gone. New players are entering the market with flexible and exciting channels of borrowing and lending. Advances in Fintech, innovative methods of working and access to information are just some of the drivers behind this growth; but all of the players in the this space are coming to the market for the same ends - to provide SMEs with the best type of funding to grow their business.
Whether you want to expand overseas, consolidate in your market or build your team, the Business Funding Show is opening its doors to provide you with the help you need to take the next step to grow you business.
But we know everybody can’t make it to London. So, for those that can’t, we’ve outlined the ten most common forms of funding below as a starter guide for those looking to take the next step on their business journey:
Business angels are wealthy entrepreneurs that are actively seeking to invest in enterprises based on dynamic business ideas. They’ll want something in return, which is normally a share of the business. However, you’ll not only benefit from their investment, you’ll also get to reap the rewards of their experience.
If you need serious investment (£500k plus) then venture capital financing is the answer. This option is best suited for those who are primed for rapid growth and need a cash injection to get moving. However, don’t expect to get a huge lump sum upfront. Generally speaking, VC funding comes in instalments to help manage growth effectively. You can also expect to give away a substantial portion of the business - but in return, you’ll get significant help to scale-up.
Crowdfunding is a recent phenomenon which involves asking many people to invest specific amounts of money in your business, usually in return for something. Do it well, and you’ll swiftly raise the money you need without spending too much in the process. However, it’s not as easy as it looks, and in today’s competitive market, you’ll need to make sure your business idea stands out.
Peer-to-peer lending. Most peer-to-peer lenders are private individuals investing in a range of different business ideas. Opportunities are listed on specialist websites and some operate on an auction basis, which means, after completing an initial assessment, you can select a lender based on a rate of interest and loan period. However, you’ll need a good financial history, and if you’re a new company, you might be considered "higher risk", which will mean higher interest rates.
Asset financing offers a way to secure a loan against your capital assets and get money quickly for your business. The downside is clear however - fail to pay it back in the specified timeframe and your assets are seized by way of payment. However, if you’re confident that you can fulfil the terms of the loan, it’s a relatively simple way to get funding.
With invoice finance you can raise cash against future invoice payments from your customers. This comes in handy if you need to cough up cash for suppliers before being paid by clients. However, this type of financing isn’t often available to those who sell direct to the general public. Likewise, if your clients don’t pay - you’ll have to shoulder the costs, plus interest.
A cash advance is the business equivalent of payday lending. This is a high-risk option and only suitable if you need the money fast and you know you can pay it back quickly. Otherwise, be warned, interest rates are eye-wateringly high.
If the banks have turned you down, but you have a sizeable pension fund, pension-led funding is a good way of getting your hands on a commercial loan. It’s a simple concept - you secure your loan against your pension. However, the loan can’t exceed 50% of your total pension fund.
Fancy getting some money without having to pay it back? Business grants are offered by governmental bodies and industry organisations. Every business wants to get their hands on these coveted grants, so competition is fierce and you’ll have to work hard to ensure your pitch stands out.
Accelerators and incubators are there to give you the benefit of their expertise, support and mentorship - and they’ll also be able to point you in the right direction for financial support within their network of investors. You’ll probably need to pay a fee or give them some equity to secure their help, but it may be advantageous in the long-run.
Copyright © 2016 Arina Osiannaya, director of the Business Funding Show.
How strong is your network? What return do you get for your networking effort?
Successful networking is about your ability to forge mutually beneficial, integrated alliances with the right partners.
This is especially true for SMEs, where one-on-one relationships and personal contacts continue to drive the bulk of word of mouth business. For some SMEs, it is also important to go beyond industry contacts and focus on regional partnerships. For example, tech firms in the West Midlands, where analysts are expecting strong growth well into 2016, will want to build stronger cross-industry relationships with partners locally to fuel their expansion.
Networking with a plan in place is essential if you are to make a positive first impression, connect with the right cross-industry experts and master the post-event follow up. Here is my advice on what to do before, during and after your next networking event.
When it comes to high-priced industry conferences, do a bit of advance work. Talk to participants from previous years. Ask whether they feel the conference was worth the time and financial investment. How many new contacts did they make and how beneficial have these proved to be over the past year?
For local events, such as networking lunches and happy hours, aim for a balanced mix of sector events and those for the wider business community. SMEs need to balance industry contacts with a strong, diverse geographic network for maximum exposure and relationship building.
Master a one- or two-line proposition in advance that summarises who you are, your experience and what you currently do (or would like to do) as it relates to potential contacts you'll meet at the event.
Remember, you don't 'help' people; you 'work' with them (because the latter implies a fee). It's good to have something the clients will want (eg money, time, happiness, etc) and something they want to avoid (eg efforts, mistakes, pain, etc) embedded in what you say. For example: "I work with family businesses to help them unlock sustainable profits and avoid costly mistakes."
Practice responses for other typical icebreaker questions, such as "What brings you to this event?" and "How's business?" Ask questions, listen and be willing to move on if it's the right thing to do.
While there's value in meeting a wide variety of people at an event, too many brief contacts can mean you fail to make a memorable impression on anyone. Instead, identify whom you want to meet in advance and make it your mission to speak with these people.
The better you get at asking questions, the better you'll get at making connections between the people you're speaking to and other contacts already in your network. Consider why the person you're speaking to should care about you, your business and this conversation. By asking great questions, you may even learn something surprising or unexpected (eg a new business challenge or need) and can tailor your conversation accordingly.
Aim to walk away from every conversation having allowed the other person to speak more than you did. They feel great about the interaction and you'll gain valuable insight into what they do, who they know and how they could best work with you in future business endeavours. One question that can support building a larger network is: "Knowing what you know about me now - who else should I meet?"
At the event, jot down a few notes about your conversation on the back of your contact's business card. Within 48 hours, follow up with a short, personalised email referencing one or more of these points. If you can make an introduction for them do so, and follow up on "You mentioned I should meet […], could you make an introduction for me?"
Finally, don't let your newly forged relationship get stuck online. It's tempting to think once you've connected with someone on LinkedIn your work is done, but it's just beginning! A person-to-person meeting is key to nurturing a new connection. Personal discussion can lead to faster, more productive dialogue than online correspondence, especially if you're trying to close a new business deal.
Copyright © William Buist, a business strategist, speaker and founder of the exclusive xTEN Club, an annual programme of strategic activities for small, exclusive groups of business owners. xTEN helps accelerate growth, harness opportunity, build your business and develop ideas. William is also author of two books: At your fingertips and The little book of mentoring.
The New Year often means a review of what we want out of life and whether the time has come to take a risk and start that business you've often dreamt of. The recent recession saw record numbers of entrepreneurial start-up launches and this trend shows little sign of slowing down. What are the key statistics you might want to look at before taking the plunge?
Statistically, if you think you have found the perfect concept and formulated a sound business plan, and are in your thirties, then your start-up is more likely to succeed. That's what figures from a range of sources including Companies House, The Telegraph and Barclays tell us.
Whatever lies behind this age bias, be it energy, financial resources or simply enough experience of success and failure, the stats seem to favour this stage of life. Don't be disheartened, though, if you're younger or older than this - there are plenty of examples of success outside this peak bracket too.
Global figures published by Mashable indicate that the majority of the most successful new start-ups are launched by former CEOs and business founders. So, if your last concept didn't quite come to fruition or you have been burnt in the past, the figures indicate that you certainly shouldn't give up. Tenacity and an ability to learn from past mistakes could stand you in good stead.
Although the financial rewards of going alone may seem appealing, going solo can be hard work.
As well as sharing resources, having someone else to bounce ideas off and conceptualise plans gives you a fantastic alternative perspective. Even Bill Gates and Steve Jobs had business partners. If you are launching a start-up in 2016, don't let your ego get the better of you - two heads may well be better than one.
Our final tip for anyone contemplating their own start-up in 2016 is to think about location very carefully. On straight numbers, the majority of successful businesses hail from London, Birmingham and Manchester.
However, if you want to make your start-up as successful as it can be, then you really need to be in front of your demographic wherever that is. Do your research and find out exactly where the largest proportion of your target audience is going to be and then make sure you have a physical or online presence that can reach that audience.
Blog provided by Sage One online accounting and payroll software.
The results of Richard Wiseman's experiment are widely known; 88% of those who set New Year's resolutions fail to achieve them. The question is why? And what can we learn from those who actually achieve their goals?
The brain cells in the prefrontal cortex govern will power. They are also responsible for keeping you focused, handling short-term memory, and solving abstract problems. When your prefrontal cortex gets overloaded, you simply do not have room to maintain your will power.
In addition, when you set yourself more than you can achieve this can impact your self-belief, which demotivates you. It is far more productive – and preferable – to set yourself up for a win so that you can celebrate that win and, with confidence, move up to achieve the next level.
When people make a New Year's resolution, they usually choose something reasonably abstract. For example, quit smoking, lose weight or better manage stress.
To give yourself the best chance of achieving them, you need to understand the distinction between a resolution and a habit. A habit is when you perform a very specific behaviour and set a very specific goal associated with that behaviour.
So convert those abstract resolutions into habits you wish to create.
The idea is to break down lofty goals into actions that only take a few minutes to achieve every day. By doing it regularly, those actions become habit that you continue easily.
When these actions become habit, less will power is required and you naturally avoid cognitive overload. You can then devote your cognitive load to creating the next small habit that furthers the ultimate goal.
When you write down your goals, you become more committed to them.
Our clients meet every quarter at a strategic planning day; they fill out a goals template and we hold them accountable. This act of reviewing goals every quarter instills a habit that has resulted in significant achievements towards the ultimate goals of every participant.
This is not just "corporate fluff". In her TED talk, social psychologist Emily Balcetis shows that if you focus on the end goal, you literally feel like it is easier to achieve. Writing it down helps with that focus.
During a study at Dominican University a wide variety of participants were chosen and separated into five groups. The first group simply thought about their goals. Groups two-five progressively took greater action towards committing to those goals:
Group one performed weakest, with a 43% success rate, compared to the average goal achievement of 64% of groups two-five.
Groups four and five achieved greater results than the other groups, with 64% and 76% achievement rates respectively.
This shows that not just writing goals, but also accountability can help in actually achieving your goals.
This study provides evidence for the effectiveness of three coaching tools: accountability, commitment and writing.
Every person and every business is ultimately different. However, these are three actions that have worked well for me personally and for many other successful people. So, if you have not tried them yet, it is worth giving them a shot because they work!
Copyright © Shweta Jhajharia 2016. Shweta is a multi-award-winning business coach and founder of The London Coaching Group.