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Hiring interns: top tips

June 10, 2014 by Guest Blogger

Hiring interns: Dos and Don'ts/Work experience{{}}I co-founded the cleaner-booking platform Mopp in April 2013. For us, hiring interns (ie a student or trainee who works in order to gain experience or satisfy requirements for a qualification) has been a great way to help grow the business while staying lean. But how do you find great candidates and motivate them to really contribute to your business?

DO

  • Write a standout job ad. Show you’re offering an opportunity to shine, not just do the grunt work. We’ve made statements such as: “This is an awesome opportunity to really make a difference. You will not just be a cog in the machine, we really want you to show us what you can do.”
  • Try different sites. We’ve used Workinstartups, Internwise, and UKStartupJobs, which were great. Inspiring Interns, a specialist agency, is another option, but you'll need to pay them as well as the intern.
  • Set them a test. Before we hire an intern we always ask them to submit a piece of written work (if it’s for a content role) or test their phone skills if we need them to be confident on the phone. At the end of the day they will also play a role in representing your business, so you need to be sure they are up to the job.
  • Consider apprentices. Depending on your business, this is a low-cost option that could be great, as long as you have the time to train them. We’ve used JustIT and have some great young apprentices on our team.
  • Set targets. Give your interns real projects to own and set them targets. We track our interns’ results weekly, from PR leads generated, to blog posts written, to social media traffic generated. It helps them focus and feel motivated to excel.
  • Involve them. Make them feel a part of the business you’re building. Our interns are involved in everything – from company socials, to team presentations, to planning the new office design.  
  • Teach them. Taking the time to teach your interns new skills will motivate them, while taking the burden off your staff. We do a one-hour training session once a week on topics from Google Analytics to search engine optimisation.

DON’T

  • Be too busy to manage them. If nobody has time to manage your interns, they won’t grow in skills or confidence – and they won’t be able to bring value to your business.
  • Expect them to know everything. Hire people with the ability to do the job, but teach them the skills so they can develop into an indispensible team member.
  • Micro-manage. Allow your interns the room to solve their own problems. It’s the best way to learn – otherwise you will end up doing all their work yourself.
  • Undervalue them. This is an obvious, but important, one. You can get some really bright, enthusiastic candidates that in the right environment can be real assets to your business. Just make sure they don’t feel like all they’re doing is making the teas and coffees.

Blog written by Pete Dowds, co-founder of cleaner-booking platform Mopp.

Further reading

 

Surge in UK self-employment - despite average earnings plummeting by 20%

June 09, 2014 by Mark Williams

Surge in UK self-employment - despite average earnings plummeting by 20%/ Self employed Entrepreneur pyramid{{}}The recent publication of Just the job – or a working compromise? The changing nature of self-employment in the UK by the Resolution Foundation (RF) offered a revealing glimpse into the world of self-employment in post-recession Britain.

RF is an independent think-tank that seeks to “improve living standards for the 15m people in Britain on low and middle incomes”. The findings of its report will prove less than inspiring for those considering self-employment, with the startling revelation that self-employed workers, on average, earn a measly 60p for every pound earned by employed people (in other words, 40% less).

Falling income

Despite ever-increasing living costs, average self-employed earnings have fallen by a punitive 20% since 2007, compared to 6% for other employees. And, of course, many self-employed people don’t get sick pay, nor paid holidays or days off, despite taking responsibility for generating their own incomes.

So, why have self-employed incomes fallen so dramatically? Well, because of uncertainty and austerity since 2007/08, many self-employed people have probably thought it unwise to increase their prices, despite their own rising costs. Another reason is a reduction in work hours, a consequence of reduced demand and greater competition (ie more self-employed people).

Perhaps interestingly, it seems that many more ‘sisters’ and now choosing to ‘do it for themselves’. There has been a marked increase in the number of self-employed women in the UK, having risen from 27% (or 970,000) in 2005 to 30% (or 1.29m) in 2013.

Go figure

Office for National Statistics figures show that between Q1 2013 and Q1 2014, the UK’s self-employed army increased by 375,000 to reach 4.55m (15% of the total workforce). But according to RF, self-employment has been growing steadily since the early 2000s, it’s not simply a consequence of recession and redundancy, but a matter of choice for many. 

A survey conducted by Ipsos MORI for the RF report suggests that 73% of those who’ve become self-employed in the past five years have done so mainly or partly out of personal preference.

More people are now choosing self-employment, with fewer people heading in the opposite direction (including many more older people who can’t afford to retire completely). One-third of the part-time self-employed are aged 60-plus.

Interestingly, RF’s research suggests that the self-employed are now much better educated as a group, with many operating in service sectors, rather than manual trades, as previously.

Matter of policy

RF chief executive Gavin Kelly, says: “Self-employment is often a highly precarious existence, which isn’t that well supported by public policy. High levels of self-employment seem likely to be here to stay and policy-makers have some catching up to do.”

Only 30% of self-employed people contribute to a pension, compared to 51% of employees. And, according to RF, a minority of self-employed people are “experiencing difficulties getting mortgages, tenancies and accessing personal credit and loans, due to being self-employed”.

According to RF: “For too many self-employed people, [housing and credit] are difficult to access, with many poorly positioned to cope with unexpected financial demands and retirement. Reform of the mortgage market, the pensions system and the introduction of Universal Credit should take into account the needs of this ever-growing group.”

Blog written by Start Up Donut editor Mark Williams.

Further reading

Why starting and investing in Community Interest Companies is about to become even more viable

June 04, 2014 by Guest Blogger

Why starting and investing in Community Interest Companies is about to become even more viable{{}}CIC Regulator Sara Burgess explains a key regulatory change due for introduction in October 2014 that will come as welcome news to good causes, Community Interest Companies (CICs) and their investors.

In 2015, the Community Interest Company (CIC) model will be ten years old. It has proved to be one of the fastest-growing structures in many years, in spite of some early reservations, hesitation and fears.

CICs have slotted very successfully into the mix of options for meeting social need and delivering social purpose. They have weathered the economic crash and the numbers continue to increase. By the time we get to the 10th anniversary in June next year, there will be well over 10,000 CICs across the UK and we are likely to see more growth following some key recent initiatives.

CICs limited by shares have always been able to distribute some of their profits in share dividends to private investors. Over the years it has become evident that the regulations around this created barriers to setting up a CIC limited by shares and to investment into them. We made some changes in 2010, but when we consulted on it again in 2013 it was clear there was more to do. 

In October 2014, the regulations will change to remove the 20% cap on share dividends and as a result of this remove the peg to the paid-up value of the share, which amongst other things was making CIC shares of little interest to investors.

CIC shares will have greater value, but CICs will still only be able to distribute 35% of post-tax profit in dividends, everything else is kept in the company. The more profit the company makes, the more it can pay in dividends (within the 35% distribution cap).

If a CIC has sufficiently more profit to pay its shareholders, it is making sufficiently more profit to put back into the purpose of the company, to meet its community interest. If the CIC is paying millions in share dividends, imagine how much it will be putting back into its community interest! Shareholders will get a return on their investment and see a return on the social impact of the company. Once it is set up, the CIC will always be a CIC, unless it winds up so it won't be taken over by shareholders who want to take all of the profit.

  • For information about how to set up a CIC (including converting an existing company into a CIC) and to download the relevant forms visit the gov.uk website.

Further reading

Why more graduates are choosing self-employment

June 02, 2014 by Guest Blogger

Why more graduates are choosing self-employment/ Male university graduate{{}}Recently there has been a surge in the number of graduates choosing to work for themselves as soon as they leave university. Rather than becoming employees they are choosing self-employment. Armed with their entrepreneurial skills they are turning their talents and passions into businesses, the most popular of which being website design and mobile app development.

It seems graduates are plagued by gloomy thoughts of leaving higher education to compete for the restricted number of jobs available. The latest graduate unemployment figures from the Office for National Statistics showed that around 9% of recent graduates were out of work, while a significant 47% were forced to take ‘non-graduate’ jobs after leaving university.

So, with this in mind it’s no wonder start-ups are on the increase, after all, who wants to job hunt when you can be your own boss so easily, especially with advancements in mobile and online technology, which allows you to start and run businesses from anywhere.

Small-business owners can now tap into a global marketplace of highly skilled freelancers and run a flexible workforce, with flexibility to hire more staff on a temporary or one-off project basis without the overheads or office space requirements that come with taking on employees.

With that in mind there really has never been a better time to start a business, and it seems Britain’s young graduates are doing just that with the number of recent graduates registering as freelancers or micro-business owners increasing by 97% in the last twelve months. The number of male graduate entrepreneurs was up 110% and female graduates up 94%.

Considering the average cost to start a business from scratch is £632*, for a graduate leaving university with little or no start-up funds, the prospect of going it alone doesn’t feel as daunting as the days when you had to ask your local bank manager for a business loan. With low start-up costs and armed with all of the tools to get a business off the ground, the graduate entrepreneur is here to stay.

* Statistic from a recent survey of 1,000 start-ups by PeoplePerHour

Blog supplied by Xenios Thrasyvoulou, founder and CEO at PeoplePerHour (@PeoplePerHour)

Further reading

Fashion designer and entrepreneur Savannah Miller shares business tips

May 28, 2014 by Guest Blogger

Fashion designer and entrepreneur Savannah Miller shares business tips/Savannah Miller{{}}I understand all too well the trials and tribulations of setting up a new business, which is why I agreed to become an ambassador for Britain’s Top Real Role Model 2014. The annual competition, launched by direct selling company Amway UK and now in its fourth year, is dedicated to encouraging new talent amongst the nation’s entrepreneurs.

Amway UK has already handed a total of £20,000 in funding to entrepreneurs for the business ventures they presented, but we now need a new wave of creative bravery in business to generate success and employment opportunities.

Recent research carried out by Amway UK suggests that more than two-thirds of us would prefer a female boss to a male one, with the stereotypically female attributes such as compassion, trust and loyalty coming out on top. These ‘softer’ attributes were favoured over more traditional ones such as courage, confidence and strong leadership.

I think this is a very interesting shift in attitudes. I feel that female bosses tend to have a slightly more ‘3-D approach’ to business and see the whole picture. They also tend to care more about their employees, which helps get the best out of people. You don’t have to scatter people out of your way to be successful.

Starting up your own business and backing your ideas can be very lonely and takes a lot of courage so it is crucial that we support fledgling companies. I can’t wait to see the finalists’ ideas and share their enthusiasm and energy. I have been fortunate enough to have people around me to encourage and share my dreams.

I ran Twenty8twelve with my sister Sienna for seven years, in what is a notoriously fickle and unforgiving industry. You need a bit of steel to go with the creativity, but it is important to be a good boss, as well as a good designer. Having Sienna in the business was an amazing help because of the profile she has. We made a good team, because she has incredible style and she forced me to take risks.

My current label, Savannah, is about finding out what my customer wants and meeting her needs. I’ve kept true to my mantra of providing style at an affordable price point.

I am a driven person because I love what I do, but I have space for other people and I don’t think you can run a business without understanding what makes your staff tick as human beings. I was brought up to believe that if you wanted something, you had to work for it.

So, my advice to would-be entrepreneurs is to roll your sleeves up, be prepared to start at the bottom, but once you have employees, let your softer attributes come to the fore – trust and loyalty can go a long way.

Further reading

Why don’t more people from ethnic minority backgrounds start businesses?

May 27, 2014 by Mark Williams

Why don’t more people from ethnic minority backgrounds start businesses?/ Young African Businessman{{}}The recent publication of A Portrait of Modern Britain had some commentators questioning the motivation of its publishers – right-wing think tank Policy Exchange, which was founded by current Tory ministers Michael Gove, Nick Boles and Francis Maude.

Policy Exchange called for all political parties to better understand and recognise the “clear and striking differences” between ethnic minorities and stop “lumping them together” or risk appealing to none.

One of the study’s headline claims was that the five largest “distinct Black and Minority Ethnic (BME) communities” (ie Indians, Pakistanis, Bangladeshis, Black Africans and Black Caribbeans) will double in size from 14% of the UK population (eight million people) to 20-30% by 2050.

Low start-up rate

According to A Portrait of Modern Britain: “Ethnic minority businesses [ie where at least half the management team is from an ethnic minority group – about 7% of UK SMEs] are already highly successful and contribute £25bn to the UK economy. There are higher aspirations to start-up amongst ethnic minority groups, especially Black African (35%) and Black Caribbean (18%) groups (compared with 10% for White British), but ‘conversion’ remains very low.”

So what do we know about UK BME businesses? According to Black Women Mean Business

  • 8% of SMEs that employ staff are owned/led by people from a BME background.
  • London accounts for 46% of all BME-led small businesses.
  • Retail is the sector in which most (35%) BME-led businesses operate.
  • BME businesses tend to be younger; 3% of BME-led SMEs are less than a year old (compared to 1% of all SMEs); just 24% of BME-led SMEs are more than 20 years old (compared to 40% of all SMEs).
  • BME businesses are likely to have a lower turnover than other SMEs.
  • More than half (58%) of BME SME employers are family-led businesses (compared to 62% of all SMEs).

Access to finance

So, why is the UK BME start-up rate so low? Last year, The Ethnic Minority Businesses and Access to Finance report, which was commissioned by Deputy Prime Minister Nick Clegg, concluded that “although the banking industry was working hard to ensure ethnic minority businesses have access to finance, there is more to be done to help under-represented groups”.

Clegg said that while there was no evidence that the challenges ethnic minority businesses face are due to racial discrimination, they still encounter problems accessing loans. “We know that 35% of individuals from Black African origin say they want to start a business, but only 6% actually do. Are they having problems accessing loans?” questioned Clegg. His friend, the Prime Minister, certainly seems to think so. Or at least he did in 2010 when he said black entrepreneurs were “four-times more likely to be denied a bank loan than white entrepreneurs”.

Unfair treatment

Race equality think tank Runnymede Trust welcomed the government’s review of access to finance for BME entrepreneurs and the UK banks agreeing to fund independent research into the experiences of BME businesses when seeking finance.

Dr Omar Khan, Runnymede Trust Head of Policy Research, commented: “Black and Asian businesses have long felt that they’re not treated fairly by lenders. We hope that government also engages in further initiatives to better understand why racial inequalities persist, not only to improve the lives of ethnic minorities, but also to grow the UK economy.”

Writing for The Voice in October last year, in an article called Want To Beat Racism? Start A Business, journalist Nels Abbey pondered possible reasons why more black people in the UK aren’t starting up. “In each of the home countries that black Britain’s lineage comes from, entrepreneurship is the norm,” he observed. “[Yet] for some strange reason, when black people arrive on these shores we seem to lose that entrepreneurial zeal and ingenuity. Not all of us. Just most of us.”

Black power

He puts this down to (perhaps) “a lack of confidence in our abilities in the face of more established business people”, as well as “actual and perceived racism maybe” and the “legacy of colonial structures”. Other possible reasons were “lack of resources, red tape, comfort, laziness even. Or maybe just a desire not to challenge the social order”.

Abbey concluded: “A single successful black business is worth more than any number of anti-racism demonstrations. A successful and respected business is a symbol of power and self-determination. You have to respect it, regardless of who runs it. Everyone loves a winner, no matter their colour.”

Blog written by Mark Williams, editor of the Start Up Donut.

Further reading 

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