Starting a business involves making an often tough, but amazing journey. I was fortunate enough to have started ‘tinkering with the internet’ right when affiliate marketing was just starting to evolve. At that time eBay, for example, would pay for every website visitor they received, even if they clicked straight back off. I could see the enormous opportunities and decided to pursue them.
I completed a degree in computer science before going into business with my best friend, using the money I made designing and selling my first website. I developed a very basic affiliate programme and learned all the basics to being a single Internet marketer, website management, design html and online marketing. I did not know it at the time but this would eventually become MoreNiche, the affiliate marketing company of which I am managing director. We decided to specialize in the growing health and beauty industry.
The business really started to take off and in 2007-2008 we grew sales to such an extent that we broke the £5m per year turnover mark. All our growth came organically from our own affiliate work, but later from partnerships.
We’ve certainly learned lots of lessons getting where we are today. Every business has its challenges. One time I had to work solidly for 36 hours because someone had managed to paralyse our systems, which meant that none of our websites were working. After much soul searching and a severe lack of sleep, I eventually managed to get us up and running again.
We’ve had numerous other bad experiences, including a credit card processor going bankrupt, which severely dented our profits, as well as a supplier selling us tens of thousands of units of product that simply were not as described. The important thing is that you learn from such things, deal with them and make sure they don’t happen again.
One of the most important lessons I have learned since starting MoreNiche is that success cannot be achieved alone. A business, no matter how big or small, is really just a collection of people working towards a common goal. It’s these people that will either make you a success or not. I have some superstars who have worked with me for many years and I would not be here without them. Rewarding key staff for their dedication is critical.
Having the creative freedom and the technical foundation to try ideas out has allowed me to enjoy business and continue to thrive on tomorrow’s challenges. It would be very easy to take the foot off the gas and relax a little, but that’s just not in my DNA. For whatever reason, I just want to go further.
Blog supplied by Andrew Slack, managing director of affiliate marketing business MoreNiche, which specialises in the health and beauty industry.
According to research published recently by membership organisation the Forum of Private Business (FPB), business costs in 2013 in the UK have increased at a rate of “3.5% ahead of inflation”.
The FPB’s latest Cost of Doing Business survey, based on responses from its members, concluded that “firms are still facing an uphill battle to make ends meet, despite positive signs of an economic recovery,” says the organisation.
The FPB reckons 94% of businesses have seen an overall increase in their business costs in 2013, with 87% having to cope with an increase in energy costs, 83% with higher transport costs, 78% with a rise in marketing costs and 69% with higher raw materials/stock costs.
Margins continue to be squeezed, with two-fifths (41%) of respondents unable to “pass any rising costs onto customers, forcing them to cut their own costs to keep prices static” (just 2% were able to pass on costs in full, says the FPB).
"The major reasons for increases in prices are predominantly down to transport and energy prices rising, coupled with the continued weakness of sterling for importers,” explains Alexander Jackman, FPB head of policy. “The economic outlook may be better, but costs still remain an issue for our members and a key focus of our lobbying and support services.
"Unfortunately, it doesn't look as if there is going to be any respite from energy hikes any time soon, despite the ongoing political pressure to introduce more competition in the market, with many of the major players recently announcing significant increases and others expected to follow suit."
Although annual inflation has fallen from 3% to 2.7%, prices have continued to rise faster for businesses (6%), although, says the FPB, this is less than the 6.7% it reported last year.
Almost three-quarters (73%) of respondents have experienced cashflow issues as a result of rising business costs, which has had a “detrimental effect on 51% of firms when looking to invest”, while “51% also reported that it has been detrimental to employment levels” and “63% feel that it has inhibited their plans for growth”.
Despite the recent good news on the UK economy, increasing business costs could hamper many business’s ability to take advantage of recovery, with 83% of respondents expecting prices to continue to increase and 16% expecting a “significant increase”, says the FPB.
"Businesses, like consumers, are facing a lot of upward cost pressures at the moment,” notes Phil Orford, FPB CEO. “When looking at how to dampen energy price rises and other cost pressures for households, the government shouldn't ignore the fact that businesses are facing similar challenges. Political efforts to positively impact on the cost of living should not be funded through increasing the costs of doing business."
1 “Ensuring that your target market can find your website is essential to making your new business work and SEO [search engine optimization] is core to that”
2 “Part of the job of running your own business is figuring out how you can get ahead of the game. You need to have processes or systems that can focus on you finding cuter/smarter/cleverer ways of doing things”
3 “From the moment you meet your potential customer think about how you are going to close the deal. Always greet them with a smile and form a relationship. People will rarely sign a deal with someone they don't like or respect”
4 “The lack of a simple ‘thank-you’ means six-in-ten employees do not feel they are appreciated by their boss, with a third having stopped expecting any form of appreciation”
5 “One way of thinking differently is to question the limiting beliefs you have about what is and isn’t possible. Change your thinking, question your beliefs and you are on the way to truly creating change”
6 “Facebook and Twitter are ideal places to advertise jobs. If a vacancy becomes available, post it on Facebook with a link to how applicants can apply. Also Tweet about it and encourage staff to Retweet it on Twitter”
7 “Youth unemployment in the UK among 15 to 24 year olds increased by a staggering 35% between 2008 and 2011, compared to an average of 15 per cent in the G8 countries”
8 “You just need to speak to everyone, because you never know who you are talking to and you really need to shout about your business. You have to believe in yourself, your business and its products”
9 “If you can’t verbally and succinctly convey your offering (in what is often called the elevator pitch), how can you communicate it to potential customers? Wordy websites and offerings that are difficult to understand turn potential customers off”
10 “Choose the market that you want to aim towards and build it around that; and make sure you offer something different – you must stand out if you are to succeed”
11 “With a strong idea, bags of determination and ability, the right people to support you and some guts, you’ll do well. Just accept that there will be highs and lows – be ready for both”
12 “Bad decisions cost the typical small business £2,340 a year”
13 “If you do something you love, you’re more likely to be successful. It will be fun rather than just work and your natural passion and enthusiasm will rub off on others”
Thank you to our sponsors for their support this year. Many thanks also to the experts who shared their knowledge and provided content that ensures this blog remains a popular source of information, advice and inspiration. A big ‘Thank You’ also to our ever-growing list of partners – we look forward to working with you next year and beyond.
Finally, a massive ‘Thank You’ to all our readers in 2013. Whether you were thinking of starting your own business and were looking for inspiration or were starting your own business and needed advice, we hope you found what you were looking for.
Happy Christmas and here’s to a wonderful 2014…
As the high streets prepare for a shopper-invasion and the countdown to festivities begins, businesses that traditionally feel the financial impact of the peaks and troughs of seasonal trading are once again preparing their strategies to manage cashflow.
Research published earlier this year by Santander Corporate & Commercial suggests that 61% of UK small and medium-sized businesses are impacted by seasonality – with 37% suffering as a result.
But the truth of seasonality is that it doesn’t always fall at Christmas, nor is it industry specific. For businesses across the country, delayed receipt of revenue and seasonal fluctuations in demand can lead to serious cashflow problems that existing finance arrangements cannot accommodate. Even for the most hardy business management team, a significant slowdown in business or revenue can make for a tough time.
Management strategies that have been agreed in advance can help to soften the blow when a seasonal dip is on the horizon. Here are four ways to stay on top of cashflow when things get tight:
One of the biggest issues facing businesses today is that of late payment. According to the Forum of Private Business, more than one million UK SMEs currently face difficulties with late payment – about 20% of the UK’s business population. The total amount of late payments across the UK now stands at just below £37bn.
Of course, you want to keep the customer on side and encourage future business, so a slick invoicing and payment processing operation can keep relationships harmonious and reduce the chances of late payment. Make sure invoices are sent out promptly, chase due and overdue payments regularly. Consider introducing an incentive scheme where discounts are given for early payment. Interest charges and financial penalties can be applied for late payments.
Cashflow forecasting, as part of the wider financial planning process, is essential for all businesses – not least seasonal ones. Healthy and detailed insight into anticipated fixed and variable business costs, set against data gleaned from your sales forecast, can help predict the future cash needs of your business and allow you to put financial back-up plans in place.
Not only will this process keep you aware of your business’s cash position at all times, it will allow you to creatively map and move around payments and budget allocation during leaner months.
While you need to manage and improve cash inflow, there are creative ways of managing cash outflow, too.
When entering into a new supplier agreement or looking back on existing ones that can be improved, make your suppliers go the extra mile. Negotiate favourable payment terms, work to drive down the price, arrange purchases on a sale or return basis, or settle on a bulk discount agreement. If you can, work to spread out recurring expense payments throughout the year so that they fall outside of your slowdown period.
Many vendors and suppliers are flexible, since it is in their interests to retain your business and put an affordable and sustainable agreement in place that will also prevent them receiving late payment from you.
Seasonal trends are beyond our control. One-in-20 UK businesses closes their business during seasonal periods to reduce costs; 6% of UK businesses admit to relying on credit cards to manage seasonal fluctuations in supply and demand; 4% use business loans; while 17% either increase or decrease staff numbers.
For stability during seasonal slowdowns or growth management during speed-ups, short-term cashflow facilities can be an invaluable lifeline. These funds offer a precious injection to pay off creditors, pay staff and maintain an overall healthy operation.
In the £250-500k annual revenue category of businesses surveyed by Santander Corporate & Commercial earlier this year, 30% of those that suffered from seasonal fluctuation said invoice or supply chain finance was used to ride out seasonal downtime.
Invoice finance has now evolved through crowd-funding into invoice trading, a facility that creates a market between businesses and investors to give flexibility to businesses in need of short-term working capital finance, without the need for long-term contracts or a whole of ledger commitment.
Blog supplied by Beth Nicholas, writing on behalf of Platform Black, provider of complementary and alternative finance solutions.
The thought of starting a business now might seem to many a bad idea. These are the days of austerity, surely we need to keep our heads down, take stock of what we have and bide our time until this is over.
The reality couldn’t be further from the truth. The best time to start a business is during a downturn. In other words, if you’re thinking of starting a business, there couldn’t be a better time than now. So, let me explain...
Years ago starting a business was a more difficult process, because you often needed to take significant risks to get started. Nowadays it’s much easier and more and more people are starting their business from home with little or no financial risk. The internet has been a key driver in this, because there are so many opportunities online. Technology has also made it much easier to research ideas for businesses and what’s involved in running a business, so knowledge has improved and most people feel much more confident about taking those first steps.
A startup has very few expenses and overheads, so if you check out your competition, the chances are that you can undercut them. Their clients or customers will be looking for deals and cheaper alternatives that are just as good. So, it’s the perfect time to win them over. If you do a good job, as promised, there’s no doubt that you’ll retain those clients when the economy recovers.
If your startup depends on products from suppliers, this is the best time to negotiate a really good deal, because vendors struggle to sell products. When the economy is strong, vendors in the main set the rules for their price model and it’s very hard to broker a deal.
Whether they’re large corporates looking to scale back throughout the downturn or smaller companies that perhaps aren’t resilient enough to see it through, your competitors are in a vulnerable state. Startups are nimble, agile and flexible, and when you spot an opportunity you can pounce on it.
Previously, to get started in a business you either needed to self-fund or go to a bank for a traditional business loan. However, there are now so many different schemes and incentives, as well as crowdsourcing and independent investors that if you have a great idea – its possible to get funding quite easily and on reasonable terms. When the economy falters, angel investors in particular, look to move their money out of the stock market and may be willing to fund you if your prospects are promising.
If you’re able to secure funding and looking to grow your business quickly, you’ll probably be looking to increase your staff. In a downturn, when redundancies are rife, highly qualified, talented and effective people are much easier to come by.
A startup created during tough times is designed to be lean and ultra efficient. You’ll develop business habits that will help you get ahead of the game when the market recovers, with the scope to increase profit margins once consumers and clients are spending at full throttle again. If you can make it work in the bad times, it should fly once the economic good times return. Also for many people whose job is perhaps uncertain or if they have been made redundant, it becomes a chance to put control in to their own hands.
We have definitely seen a rise in the number of people starting up businesses from home, and although we still get people of all ages there seems to be a growing number of young people (18-25) starting up a company alone. So, if you’ve been considering starting your own business, this is the time to take the plunge.
Blog by Paul Bryant of Setup A Company
The Forum of Private Business (FPB) is warning business owners to be aware of seasonal dangers that could potentially leave them with “a nasty financial hangover long after the decorations have been taken down”.
“With their mix of drink, high spirits and merriment, Christmas parties are still the number one source of potential problems,” argues FPB business adviser, Joanne Eccles.
To make sure you and your staff remember Christmas 2013 for all the right reasons, the FPB advises business owners to:
However, putting on a Christmas party does have “an upside for employers”, notes the FPB. It says up to £150 per head of the cost of holding the party is an allowable tax deduction and VAT can also be recovered on staff entertaining expenditure.
“No-one wants to put a dampener on the festive spirit and Christmas parties are great for boosting workplace morale and allowing staff to let their hair down,” adds Eccles. “But business owners need to take some important precautions if they want to guard against potential litigation.
"Most of the regulations which govern the normal working day also extend to the Christmas party, wherever it might be held, so employers need to ensure they're not leaving themselves open to claims, complaints and time-consuming employee disputes.”