As Global Entreprneuership Week gets off to a flying start, entrepreneurs, startups and judges including Doug Richard, Apprentice winner Tim Campbell and millionaire plumber Charlie Mullins gathered in London for the finals of The Pitch 2009.

In true Dragon’s Den style each of the six start-ups pitched live for three minutes and were subject to a seven minute grilling by the judges.

The companies pitching included David Webb and David Wright, co-founders of Super Mouth, an energy gum, Kenneth Cheung of BeeCycle, Craig Smith of The Printed Bag Shop, Tom Warrender of Get Set Schools, Anthony Lau of Cyclehoop and wildcard winner Jennifer Twigs of Lily Pins.

In a polished pitch, Anthony Lau was clear on his numbers, his projected profits and most importantly had significant orders from Councils around the UK.

All this appeared to impress the judges who had their questions answered adeptly and really had little to say to fluster the young entrepreneur.

Anthony recognised that many local authorities are promoting environmennal and health benefits of cycling, but cost-effective cycle parking is seriously lacking – Cyclehoop was born.

His innovative solution is an instant cycle rack that clips on to existing street furniture like sign-posts and street lamps.

A well spotted entrepreneurial opportunity and a well deserved win. Good call judges.

Live blogging from the British Library launch event for Global Entrepreneurship Week.

Lord Mandellson appears in a pre-recorded message to offer encouraging words like the UK governement is ‘focused on maintaining a business environment that supports entrepreneurship’, which many would dispute. Probably the right decision, not to make a personal appearance.

Dr Carl Schramm, CEO of the Kauffman Foundation

Dr Carl Schramm, CEO of the Kauffman Foundation, launched a project to understand the science of entrepreneurship. Business formation turns up in recession.

Entrepreneurship has helped spark recovery in the last seven recessions according to the Foundation’s research.

“Messy capitalism is the way forward, not government industrial policy.”

“In recessions all economists go home and head towards interventionist approach.”

But the economy is the aggregation of business growth and failure. Nearly 40% of US GDP will be derived from firms that were created in 1980.

“Sometimes Global Entrepreneurship Week looks like an entrepreneurial cheer-leading event. But there is a profound change taking place.”

Jim O’Neil Head of Global Economics Research at Goldman Sachs

Jim highlights massive growth of Brazil, Russia, India and Chinas as the man who coined the BRICS acronym.

Discussion

Carl Schramm reckons there’s a good deal of evidence that Britain comes up with a lot of great, innovtive ideas, while the US filches them and scales them.

Discussion about why US entrepreneurship seems to be so more successful than in the UK. Marketing, the size of the market and Brits are too polite to get filthy rich?

You very often hear this argument, it seems to us at SmallBizPod that we should focus on our own startup endeavours in this country, rather than developing global entrepreneur envy!

Carl Schramm explodes some myths on startups, business plans and VCs. Only 14% of the top 400 fastest growing companies in the US did so using venture capital. Fewer than 50% ever wrote a business plan.

Matt Brittin, MD of Google UK, David Wei, ceo of Alibaba.com, Emma Harrison of A4E

After a big, albeit entertaining, video plug for Google from its UK managing director, Matt Brittin, he makes a few tips for the business on the web: be greater with data, leap and learn, use the technology, fast is better than slow.

David Wei doesn’t believe that entrepreneurship can be trained or built by government and makes a very entertaining speech.

Take away comfortable security net, more important, he advises.

Where is the new entrepreneneurial icon – Richard Branson looks very old now?

UK too good at planning, too much money, too much technology which is holding back entrepreneurial resourcefulness.

Emma Harrison of A4E speaking at Global Entrepreneurship Week

Emma Harrison, chair of A4E says entrepreneurs will always find their own way through the system. She tells her own entertaining story about illegal tuck-shops, blagging her way onto a university course, and running her Dad’s firm after 18 days.

Emma’s top tips for entrepreneurs having transformed her business into a £200 million turnover success. On leadership: inspire, encourage and elevate, find your passion, purpose, a mentor and do four marketing activities a day to get your business out there.

Panel Discussion with Peter Jones, in his role as chair of UK Enterprise, Julie Meyer of Ariadne Capital, Priya Lakhani of Masala Masala and Duncan Goose of Global Ethics, Dame Lynne Brindley of the British Library and Lord Davies, Minister of Trade at BIS.

First question picks up on Peter Jones’s comment about one UK bank telling him that 51% of their small business customers in trouble or recovery are social enterprises who clearly need to know more about business.

Peter back-peddles, stresses positives and says he was surprised by figures and says social enterprise is vital.

Discussion about the importance of education and culture to encourage entrepreneurship.

What should government do to encourage entrepreneurship? Priya Lakhani agrees that the ‘can I’, rather than ‘I can’ change in mindset mentioned by other panelists is important.

Take responsibility for change, says Peter Jones. Julie Meyer suggests take away PAYE and NI to encourage startups & buy from SMEs.

Lots of interesting points from the launch, particularly the provocative and entertaining David Wei. Shame there wasn’t enough time to discuss key issues like access to finance and bank lending to SMEs.

It seems to be the week to dish out awards to businesses large and small. Hot on the heels of the National Business Awards, come the gongs for the winners of the Startups Awards 2009. SmallBizPod was there to keep track and celebrate the success of UK start-ups.

Congratulations to the overall startup of the year, Three Sixty Entertainment, and to all the other category winners and finalists.

Green Business of the Year: Shiply.com

Online Business of the Year: Wonga

Product of the Year: trueCall

Business Plan of the Year: Get Set Schools

Service Business of the Year: The Pathology Group

Adversity Business of the Year: Mobility Buy

Innovative Business of the Year: Three Sixty Entertainment

Social Enterprise of the Year: Goodwill Solutions CIC

Women in Business: Natasha Courtenay-Smith – Talk To The Press

Silver Fox Award: Go Sustainable – Franz Hutcheson

Best Use of Technology: JAOtech

A good crop of startups. Congratulations to one and all.

The blog has become a common business practice. Indeed, the lack of a company blog can be perceived as a conspicuous absence. Whatever you blog about, it’s great from a thought leadership perspective and it’s also really helpful for your search engine ranking – all content helps!

Starting Out

Getting the branding of the blog right in the first place is critical to its long-term success. If you opt for a hosted service pick a name and URL for the blog which involves a keyword, where possible. This will help from a search perspective. Also, ensure that the look and feel of the blog accurately portrays your company’s personality; there are millions of blogs out there, you need to stand out and entice readers to come back.

You can set them up on your own site, but other programmes are available, such as the popularWordpress.org and Blogger.com, but you need to consider the loss of control over design and features that you’ll get with hosted programmes. For a professional organisation, it’s generally accepted that hosting a blog on your own website appears more professional.

Some General Top Tips:

• Content should be engaging, thought-provoking and informative. The ideal length for blogs is 350-500 words.
• Make sure your blog is optimised for search engine purposes: download the SEO Blogger tool from Wordtracker to help you choose keywords when drafting blogs. It works with several blogging platforms.
• You should allow comments, but monitor before publishing, so set filters from the start You are completely responsible for the content on your site, so to best ensure you’re not containing defamatory comments or sensitive information.
• Insert hyperlinks on relevant words where possible and use the blog as a kind of summary leading the reader to more in-depth content on your site or elsewhere which they can read at their leisure.
• Remember to tag your blogs with at least 10 relevant keywords.
• Register your blog on Technorati and Feedburner, these help you expand your reach and monitor feedback and following.
• Insert follow and bookmark options, such as RSS feeds or del.icio.us, and upload links to social media news sites, such as Digg and Reddit, which will enable people to promote your blog to others who might be interested.
• Use your Twitter feed to promote the blog. Your following will be made up of people in your industry so many will be interested to hear your views.
• Provide links to other blogs in your industry in your blogroll and ask them to link back. This ‘cross-blogging’ is important for your own blog’s authority.

Blogger Engagement

Bloggers can be hugely influential, so it’s critical to engage with the leading bloggers in your field. A high-profile case in point: Computer manufacturer Dell was faced with the full force of a disgruntled blogger in the form of Jeff Jarvis, which prompted a complete about-face in the company’s policy on blogger – and customer – engagement.

There are a few protocols to follow when reaching out to bloggers:

• Use tools like Technorati and Alexa to check on a blog’s ‘authority’ – so you can focus your efforts on engaging the bloggers with the biggest and most relevant audience.
• Don’t treat bloggers as journalists, they’re not paid to read press releases and are under no pressure to post, so there has to be something in it for them.
• Don’t try and bribe the blogger with product, it could easily backfire.
• If you can, meet them personally. This goes a long way to building a lasting relationship.
• Check the regular contributors on blog sites, they may be – or become – influential bloggers themselves.

Top tips

If you’re worried that you don’t know what to worry about, inspiration is all around you. You know your market and the concerns your customers have, brainstorm what you think they’ll like to learn about. What are other people blogging about? Is there a different angle or repost you can counter their argument with?

The more quirky and confident the blog is, the more people will be likely to bookmark you or return on a regular basis. Lists are particularly good at generating debate, as are top tips. The key thing here is to remember to be neutral and non-salesy – people have come to your blog for advice, not to be sold to. If they like what they hear they’ll progress to the sales stage in their own time.

You can find podcasts on blogging, blogger relations, social media marketing and other marketing best practice advice on my website. I’d also recommend you check out ProBlogger for more great blogging advice.

The National Business Awards are very much the UK’s business Oscars, celebrating the success of businesses large and small. SmallBizPod is at the awards ceremony and will keep you up-to-date with the winners as they’re announced.

The Orange Leader of the Year
Winner: Peter Marks

The 3i Private Business of the Year
Winner: T J Morris

The Coutts & Co Large-Cap Business of the Year
Winner: Inmarsat

The Grant Thornton Mid-Cap Business of the Year
Winner: ASOS

The Daily Telegraph Decade of Excellence Award
Winner: Sir Philip Hampton

The Better Regulation Award
Winner: Environment Agency

The Award goes to the organisation that is making the biggest difference by helping businesses comply with the law as simply as possible, delivering better outcomes and creating a more effective operating environment for UK businesses through better regulation practices.

The Customer Focus Award
Winner: DPD

This Award goes to the organisation that can best demonstrate that it has the customer at the heart of its business and deploys and manages its resources to most effectively meet the needs of its customer base.

The Employer of the Year Award
Winner: Cirrus Communication Systems

This Award goes to the organisation that can best demonstrate how, through well-adopted company values, the provision of stimulating and supportive workplaces and the active development of all employees it has applied its human and supporting resources to achieve commercial success.

The Entrepreneur of the Year Award
Winner: Sarah Murray of buddi

This Award will go to the outstanding individual who can best demonstrate exceptional vision and leadership in the establishment and development of an owner-led business.

The Business Link Growth Strategy of the Year Award
Winner: dotDigital Group

This Award goes to the organisation that can best demonstrate an organic growth strategy (rather than merger & acquisition activity) that has achieved outstanding levels of sales, profit and market share improvement.

The Health Work and Wellbeing Award
Winner: Crown Spa Hotel

This award goes to the organisation that can best demonstrate how it has improved the health and wellbeing of its workforce to the benefit of the organisation.

The ICAEW Corporate Responsibility Award
Winner: Framptons

This award will go to the organisation that can best demonstrate a company-wide commitment to Corporate Responsibility.

The IMechE Business Innovation of the Year Award
Winner: Addison Lee

This Award goes to the organisation that can best demonstrate a proven ability to create, nurture, and develop innovations or processes that substantially improve the commercial performance or prospects of the company.

The Marketing Strategy of the Year Award
Winner: HM Revenue & Customs

This Award is made for a specific marketing campaign that has achieved high levels of commercial success for the relevant product or service.

The Orange Best Use of Technology in Business Award
Winner: Forensic Pathways & Cambridge Constabulary

This Award goes to the organisation that can best demonstrate that it has effectively used business technology to create a significant and exploitable competitive or operational advantage in any business area including revenue, improved quality and/or customer convenience.

The Santander Small to Medium Sized Business of the Year Award
Winner: Go Ape!

Open to organisations with less than £10 million turnover in their last financial year, this Award goes to the company that best demonstrates significant growth and innovation in its market sector, under-pinned by strong financial performance.

Over a third of women business owners (36.7%) are forecasting 10% revenue growth in 2009/10 according to findings of a major report on UK entrepreneurship. But female entrepreneurs are a lot more cautious than men when it comes to assessing their prospects.

According to the annual Entrepreneurship UK report released by accountants Deloitte’s, 42% of men expect to see turnover increase by between 50-200% over the next three years.

This compares to just over 32% of women who anticipate similar growth over the same period.

Debbie Griffiths of Deloitte says:

Expectations amongst women entrepreneurs are relatively guarded at this point, a sentiment that is only heightened when compared with the confidence displayed of their male counterparts.

When it comes to how growth is likely to be achieved, men and women also differ significantly.

Female business owners say entry into new markets (32%) and increased productivity (29%) will be the key drivers to boost business over the next few years.

Male entrepreneurs consider these areas less important (20% and 17% respectively).

Optimism is a byword for entrepreneurship, but hard-nosed realism is a must too.

The question is are women less confident in the prospects for their business, or are they simply avoiding the bravado of the alpha-male to look at the commercial climate with realistic eyes?

[Picture credit: Dyanna licenced from Flickr]

A recent report by the National Association of Commercial Finance Brokers shows commercial lending is down 60% year-on-year compared to 2008. The worst hit areas are commercial mortgages (-51%), buy to let mortgages (-87%) and bridging loans (-77%).

In fact all forms of commercial lending are down apart from invoice finance, which has been the saving grace for some businesses. Invoice finance has grown 20% compared to 2008, showing lenders still have an appetite for this form of finance.

Raising finance for a business can be tough in today’s economy, but that doesn’t stop the need for funding in order to start, grow or even sustain business activity.

With all this doom and gloom around us the question still remains the same – how do you raise money in today’s economy? To help answer this question we’ve put together a few options you could explore to raise £100,000.

Option 1 – Family and friends
Borrowing money from family and friends is typically the cheapest and most flexible way of raising money for a business. People who borrow money by these means typically accrue less debt and are more prudent as they only borrow what they need.

However, there are potential pitfalls in borrowing money from friends and family. What happens if the business doesn’t go well, you fall behind on repayments or the person lending you the money wants to get involved in the day to day running of the company? The last thing you want to do is fall out with friends and family.

Option 2 – Enterprise finance guarantee (EFG)
The EFG is a scheme setup by the government to support businesses requiring finance but do not have the collateral necessary to secure funding. To combat this problem the government will back 75% of the loan.

You can borrow between £10k-£100k, with repayment terms of between 3-10 years.

The scheme is also suitable for both startup and well established businesses, you just need to ensure you have a solid business plan and budget to demonstrate you can repay the loan.

To find out more you should contact your local bank who will be able to talk you through the scheme and advise you on whether you qualify.

Option 3 – Release funds from unpaid invoices
Over 1m businesses in the UK are now affected by the late payment of invoices. With a lack of cash flow you could find business growth is being hindered and at worst threatening the future of the company.

Using invoice finance you could release up to 90% of the cash tied up in your sales ledger, with the cash typically made available to you within 24 hours of raising invoices.

There are over 20 lenders in the market so you are sure to be able to find one who could provide you with the finance to help get your business back on track and help fuel the growth of the business.

You could be eligible to use invoice finance if you raise invoices to other businesses and your projected turnover for the next twelve months is over £50,000.

Option 4 – Refinance property
Although commercial mortgage lending in the UK has been way down compared to 2008, there are signs the market is picking back up. There could be an opportunity for you to release cash which is tied up in the value of your property.

A quick phone call to your local independent mortgage broker will give you an indication on how much cash you could raise against your property value.

Option 5 – Asset based lending
Using asset based lending you could release cash tied up in your business assets. This could include cash tied up in equipment, property and your sales ledger, i.e. your debtor book.

Asset based lending is one of the few forms of commercial finance which has shown any growth during the recession. This is due to the lenders opting to lend money secured against assets which have a resale value, providing lenders with the necessary collateral.

Option 6 – Bank overdraft
One of the most common forms of finance for a new and growing business is a bank overdraft. Funding a business in this manor though has a few disadvantages:

1. You could be given an insufficient overdraft which doesn’t allow you to operate
2. Can be recalled at any time
3. Can be an inflexible way to borrow money.

Option 7 – Angel Investor
An Angel Investor is a person who invests in start-ups in exchange for equity in the company. In addition to providing finance the investor could also provide ongoing advice and support, for example introducing you to their contacts to help fuel business growth.

Angel Investors act as both individuals and also in investor groups, each pooling their cash, resource and contacts. The British Business Angels Association would be a good place to start if you would like to explore this as an option.

To secure finance from an Angel Investor you should have a solid business plan, knowledge of your target market and a good pitch. We’ve all seen what happens in the BBC’s Dragons Den when these requirements are neglected.

Related posts:

1. 7 tips on maximising your working capital

Yesterday the government announced a retail banking sell off of RBS and Lloyds branches to re-establish competition in the consumer and small business banking markets.

John McFall, chair of the Treasury Select Committee welcomed a return to the era of ‘boring banks‘.

Is Lord Sugar taking the piss, when he moans about moaning small business owners?

Meanwhile Alan Sugar, The Apprentice star and government Enterprise Champion, was typically brutal in his assessment of firms blaming banks for their misfortunes.

At an event in Manchester last night, he called the bosses of small firms complaining about not being able to access bank lending, ‘moaners’ who ‘lived in Disneyland’ – much to the dismay of small business groups and many in the media.

Not a great piece of timing on Lord Sugar’s part, but he does have a point.

Many businesses I talk to say while there’s still very much a crunch when it comes to credit, they want to pay off borrowing. They don’t want to increase their debt.

To ask banks to be lending more and businesses to be borrowing more during the worst recession in a generation is entirely counter-intuitive and, you could argue, makes no business sense either for banks or most SMEs.

But robust businesses with strong balance sheets and assets can still obtain lending, if they want it. Yes, businesses fail in recessions, but throwing money at failing businesses isn’t going to make them better, sustainable businesses.

I spoke to Martyn Shiner, the FD of a South West manufacturer Severn Delta, a few weeks back and he agreed with me, saying:

When other small businesses bleat about not being able to finance their business, I think, but are you providing timely management accounts, can you tell me what your margins are, can you tell me what the risks are in your business – and most of them haven’t got a clue.

To be fair, Martyn went on to concede that since most of the UK’s 4 million plus businesses are at the micro end, like consumers, they probably borrowed because borrowing was easy and got used to the habit.

The banks were lax, had lending targets to meet and free money to give away. They then slammed on the breaks too hard and left many SMEs floundering to cope with the new world of austerity we’re once again living in.

But it’s easy to forget, the last time the mighty NatWest (owned by RBS) made an almost unheard of loss, before the current fiasco, was during the major recession of the early 1990s. Why?

Not because of derivatives, but because of huge bad debts incurred by lending in the domestic commercial and small business sector.

So what of small businesses feeling the pain?

Earlier this afternoon I talked to Peter Riches owner of a small Shropshire-based web development company, BeVivid who describes bank lending, or rather lack of it, as ‘diabolical’.

His company has for months sought lending for business development funding and a new product, but RBS, Barclays and Lloyds have all turned him down flat.

Banks have never been keen on web businesses, or on funding new concepts. But lending to innovative businesses and lending to growing business really ought to be considered.

But largely, I think there’s a strong case for saying the small business lending crisis is a myth.

Strong businesses will borrow, if they want to, despite unjustifiably high interest rates. Weak businesses will go to the wall. Some one-man or one-woman bands will just slip away unnoticed.

But what about the massive decline in bank lending figures as recorded by the Bank of England this year?

What about the lack of take up of the Enterprise Finance Guarantee scheme which to end October has seen just 6,100 businesses find funding of £620 million, some way behind target?

Well maybe the demand for borrowing is just not there right now. And maybe that’s a good thing.

The huge growth in SMEs in the UK over the last decade was, in my opinion, debt fuelled.

It’s no surprise many are finding it hard to break the debt habit the banks themselves pushed, like street corner crack dealers.

[Picture credit: Jason Cartwright licenced from Flickr]

One of the key steps to get an effective flexible working programme off the ground is getting the technology right, which involves more than just buying new equipment.

For those businesses that are considering how to integrate flexible working technologies and practices into their organisations, here are a few key considerations.

• What’s the plan – flexible working has many benefits but it’s important to know how it will best suit your individual business. Before any purchase or implementation, work out who in the business needs access to flexible working and what specific tools they need to be able to deliver the benefits it can provide. There is no such thing as a one-size-fits-all solution so base your purchasing decisions on your organisation’s individual requirements, budgets and growth plans.
• Spell it out – all new systems come with initial teething problems. Try to minimise any confusion or miscommunication by setting out a usage policy with details such as who has the option to work flexibly, what reporting structures they will need to adhere to, what resources they will have access to, how they can be reached while out and what office-based team members will or won’t need to do in their absence.
• Keep them in the loop – remote or flexible workers, who spend a lot of time out of the office, can quite often start to feel disconnected from their team members or the wider organisation. Keep them in the loop of all communication and involve them in team or company-wide discussions wherever possible – even if they have to login remotely – so they still feel part of the whole.
• Don’t be Big Brother – one of the key advantages of flexible working is increased productivity through the reduction of downtime so it’s important to give flexible workers the autonomy to make the best use of the extra time they gain from working remotely. Establish a reporting process that allows them this flexibility and freedom, but still gives team leaders visibility of ongoing actions and progress.
• Stay connected – whether by telephone, email or video conferencing there are a multitude of options for keeping in touch without necessarily being in the office. Make sure flexible workers have the resources to stay connected when they’re out – working remotely shouldn’t mean missed calls.
• Get help – while technology is a great enabler for business, it’s important to remember that it’s about more than just hardware and software in isolation. When you commit to a flexible working plan, make sure you have the IT support that can handle the demands of employees working away from the office.
• Keep an eye on it – change is usually the only constant in business. Monitor the ongoing progress of your flexible working system to make sure it stays relevant to your business needs as the organisation grows and evolves.

Related posts:

1. Seven tips on flexible working for SMEs

After spending time with my mentor and deciding the concept I had was a good one, I felt relieved I’d at last shared my idea and received some very positive feedback. It can be very lonely when you’re the only person holding all the cards.

I had de-risked the opportunity for myself, my family and an independent mentor and now I had to set about creating a product and getting it to market to generate some revenue.

So the idea was to create a product in powder form which, when added to a refilled bottle of water, turned it into a healthy award winning alternative to soft drinks, squashes, vitamin drinks etc.

I wanted the world to become healthier by drinking more water everyday. A really simple idea. However I’m a salesman with a background of 12 years in IT and had no idea how to make a powdered soft drink in a sachet.

The first thing I did was apply to the government for a grant for researching an innovative idea (which is no longer available, I believe). There was an awful lot of paperwork involved but I wanted to make sure I was creating a product that appealed to the mass market.

I’d found that, through a national opinion poll, I could ask, for the princely sum of £1,500, 1,000 people four Yes/No questions.

So the government stumped up half the cash and I sowed in my half to book the questions on the next research round.

The questions were:

1. Would you use a powdered flavoured drink to help you drink more water?
2. Would a powdered drink with added vitamins be something you would buy to help you drink more water?
3. Would you buy a powdered drink with added vitamins and a light refreshing flavor for a family member to help them drink more water?
4. Do you refill ready to drink water bottles from the water cooler or the tap?

I can honestly say this was the best money I ever spent. The reams of research produced by the NOP report from these 4 little questions opened up avenues I thought impossible when I started out.

Quality research opens doors. Investors may believe you and invest in your emotions but they also require hard facts. The NOP poll gave me hard facts.

Armed with this data I was buoyed by the apparent need for my new undeveloped product. So instead of mucking about and spending ages learning how to be a technical food developer, I flew out to Geneva on EasyJet to an ingredients show to see if I could work out how to put together my new market ready product.

The first stand I went to I asked the question “I’m looking to develop a powdered vitamin and mineral drink that is sold in sachets and dissolves clear in water with low calories and no nasties in it, what do I need?” and the man at the desk gave me a lit of ingredients and where to get hold of them.

Really, truly that’s how the first formulation was developed. No three years at food technical college for me thank you very much. I just asked for some help and the guy gave it to me.

I honestly couldn’t believe my luck. He even wrote a proposed formulation on a piece of paper and wished me well. Sometimes it’s luck that helps us overcome difficult hurdles.

Back in the UK I contacted three companies, found through Business Link. I created a brief and asked each company to come up with a formulation that would satisfy my criteria at a reasonable price.

They did, I chose one and we worked on the formulation, taste and solubility for 3 months to get it just right before searching for a co-packer.

The essence of this blog is all about taking a chance backed up with real business sense and making sure those involved understand the research has been done and you can all move forward to the next step knowing that you’re on the right track.

I often look back at the research results from NOP and marvel at how far they got me.

Approximately 80-90% of American businesses and over 70% of European businesses are family owned or managed. The strength of family businesses is that the ‘family’ culture tends to attract loyal employees and customers by creating a connection that fosters both loyalty and longevity. In addition, they are frequently built from the ground up with little borrowing and typically play a huge part in the economy of all countries.

However, the overlay of family dynamics on a business can present unique problems because these dynamics are often out of sync. With nearly 40% of American family businesses due to pass the reins to the next generation over the next five years how can family businesses meet these challenges?

1. Selecting and preparing successors

In family businesses it is often taken for granted that a family member will take over the reins, but this may not be good for the business nor actually what the heir apparent wants. A coach will ask the business owner what the plan is on their retirement – who will run the business if it is to be passed on to a family member? Does this family member want it? Have they the right experience or skills? The coach can help the family explore the best succession plans, such as the heir working outside the family business for some time to gain experience, he or she working through the various roles or departments and/or setting up a complementary ‘lab’ within the main company as a testing ground and to help bring their skills and vision into the main company.

2. Creating productive roles for family members

Sometimes jobs are created for family members without interview or necessary skills, which can cause conflict with non-family members in the business especially if they are put into management positions. A coach would ask: Do family members abide by the same rules for timekeeping, holidays, expense claims, for example, as non-family members? Does the family member have the necessary experience and skills for the job they are doing? If in a managerial role, what training is in place and/or planned to help them grow and learn?

3. Attracting and retaining non-family managers and employees

Retaining them is the key thing here. Are employees able to progress their career a coach may ask, for example, if they are unrelated to the ruling family? If the line manager is related to the boss, how does a non-family employee voice their concerns? Will it be held as a black mark? How does the company deal with ‘sharing information’ between family members about their employees? How are complaints dealt with? How are the roles and responsibilities defined between two or more related company directors? An employee may get conflicting messages or end up feeling torn between equal but different ‘bosses’.

4. Fostering open and respectful communication

What may be acceptable communication within a family unit may not be appropriate in a work environment. It is too easy for family members to forget what is or is not appropriate at work – couples should be reminded that shouting, bickering and nagging are not easy for other employees to see or hear, and neither is canoodling or love talk. A coach can help the family see the importance of being as courteous to family members as to anyone else, and may also be able to help resolve conflict where it occurs.

5. Developing mutually agreed visions for the business

In my experience this is often not seen as essential in family businesses and they miss out on the guiding light that a clear vision gives an organization. Coaching can help the family focus not just on WHAT their vision is, but also help them come together to discuss it and have it agreed by all the family members as a unit. A coach will also remind them that a vision is only worthwhile if it is stuck to and reviewed regularly by all concerned.

6. Compensations strategies for family members

Pay is often low with no annual review, and they are often expected to work above and beyond the call of duty without much, if any, compensation or recognition. In some family-owned businesses it can be seen as heresy if they don’t want to join or want to leave, and redundancy may be a moot subject if they are laid off. This can cause massive morale problems and bad feeling. So what employment contracts are in place for your family employees? How often is it reviewed with family members? Do their pay and responsibilities match non-family working at the same level? Is there an ‘exit clause’ ?

7. Defining job roles and responsibilities

It can be a bit like Fawlty Towers where everyone does everything – or is expected to – and the different roles can too easily become blurred between family and business. A coach would ask: Does each person have a job description? Is this reviewed regularly and reflect the true situation? Where do the lines of command and responsibility run within the company? Are they written down and adhered to? Does this blur between family and business? For example, does the Brother who is the boss of the company also act like he is the boss of the family, for example? Remember that just because you are the parent or the boss within one area, this does not mean you can automatically take that role in the other area.

When a family business has a clear vision and focus on the actual business, including having clear policies that treat everyone equally, letting managers make day to day decisions, having policies in place for succession and looking to maximize business opportunities, then this, counter intuitive as it may seem is actually better not just for the business but for the family as well.

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The following 7 ideas may help your business avoid disruption during the postal strikes. They won’t apply to all businesses, but I hope they’ll give food for thought.

1. Ditch the cheque. The new Faster Payments service is easy and it works. Even BACS payments only take three days. Ask your clients to pay you electronically – offer them support if they’ve not done it before. Electronic payments are cheaper and faster for all concerned. If your bank don’t help you switch away from the cheque ditch them too – they don’t deserve your custom.

2. Talk to a courier firm. Couriers are more expensive than first class it’s true, but what is your product worth to your customer? Why not give them the choice of a guaranteed delivery for a little more cash. If shipping lots of low value items is your bread and butter this isn’t likely to be an option, but people know that the supply chain is disrupted and will respect you for offering alternatives.

3. Compensate your customers for a disrupted service. It’s all about taking control. Some subscription magazines have opened up free access to their online content to compensate print subscribers for delayed delivery. Think of low value solutions that could mean a lot to your customers. If word gets out it could be great publicity and will put you ahead of the competition.

4. Send documents electronically. PDF is a great format for securely exchanging documents with people, and it doesn’t need to cost a thing. There are free PDF tools available to download which will create PDF files from any application (see www.cutepdf.com). If a document needs to be signed will the recipient accept a scanned copy? Scanners are cheap and will output in a variety of file formats (including PDF) ready for you to email.

5. If you’re sending out marketing material by post consider changing to an online/email campaign. The web is awash with ideas about using social networking and web 2 applications for marketing and it doesn’t need to be costly and time consuming. Ask a designer to help you develop a simple HTML email campaign or blog and twitter about your services. If you’re smart the results can be instant and powerful.

6. Study your supply chain. If you send products locally can you deliver in person or invite customers to collect from you direct? Again everyone knows there’s a strike on and people will respect you for giving them options. It could be a great way of building stronger relationships with your clients. If you ship a lot of “stuff” long distances have you considered a distributor? With great economies of scale they can secure better prices with carriers other than Royal Mail and it might free up your precious time to work on new business.

7. Relax! In this “just in time” world everyone wants everything now. However if you have a good relationship with your customers and are honest with them, you might find them to be more compassionate and forgiving than you would expect.

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When was the last time you stood back and reviewed your brand?

Take a look in the mirror and ask yourself, in all honesty does your company image accurately reflect the quality of service that you provide and is it appropriate for your target audience?

If not then it’s time for a change.

Your brand is far more than just a logo. It incorporates everything relating to the image that your company is looking to achieve. This includes your logo but also the quality of your marketing materials, where you operate from, the manner in which you deliver your product or service and the people who you employee.

All of these elements combine to give an impression to the outside world of your company and the quality of its service. So you must make sure all of these components of your brand give the same consistent message, otherwise you risk confusing your potential customers.

It is essential that your company brand is appropriate for your target audience. You must ensure your logo and marketing materials are of a quality and image that is appropriate for the audience you are looking to attract.

Consider Argos, the company focuses on competitive pricing and value for money combined with a convenience-based service. Buy a pair of earrings from Argos and you might not even see them before you buy, you certainly don’t expect a personal service or quality of product that you would expect from Tiffany & Co, for example.

So it’s appropriate for Argos to develop a brand that reflects this value market whilst Tiffany & Co must ensure its brand clearly portrays the same quality as its exclusive jewellery.

There is nothing wrong in developing a value based brand but it must be because you are delivering a value based product.

My advice is, if you are unsure of the perception your own brand portrays, then conduct some form of research. Find out from your existing customers and suppliers how they perceive your company and what your brand says to them and act on the feedback.

If upon reflection you find your brand is not suitable for your target audience, inconsistent or simply in need of a revamp, then don’t panic.

Many companies I meet dread the thought of a ‘rebrand’, it fills them with fear of escalating costs and an administrative nightmare. It doesn’t have to be either of these.

Managed properly a company rebrand can be a relatively stress-free, inexpensive exercise and actually a very satisfying project, you just need careful planning, a vision and a realistic budget.

The good news is that you can introduce a high quality brand without blowing your marketing budget!

In next month’s article I’ll take branding one step further and offer some advice on exactly how to develop a new brand, including some hints and tips on keeping the costs down and working with design agencies.

Microsoft’s Windows 7 officially launches on 22 October, but the undoubted appeal of the new operating system for the SMB (small to mid-sized business) market looks set to be tempered by potential upgrade issues.

According to Microsoft in the UK the vast majority of mid-market businesses are still running XP having skipped Vista due to real and perceived compatibility problems.

In a frank interview with Robert Epstein, head of small business marketing and sales at Microsoft in the UK, earlier this week, he told me:

As you start to look at 20 people companies and above where people are more interested in compatibility with their ERP and accounting packages, then there have been a large number who down-graded from Vista back to XP. So we think the actual install base is only 10% running Vista today.

So what’s the problem? Well the upgrade path from XP to Windows 7 isn’t straight-forward. Most would recommend a clean install of Windows 7 on an XP system, rather than an upgrade.

Indeed Microsoft’s own advice says ‘we don’t recommend’ upgrading from XP to Windows 7 and suggests the best option is to buy new hardware.

That’s one way to avoid compatability issues. No wonder Michael Dell is so keen on the new operating system!

As it happens I also think it’s a great operating system as I said in my Windows 7 review earlier this year.

But for businesses of 20-250 users the ‘clean install or buy new hardware choice’ may well cause pause for thought.

Of course Windows 7 includes the extremely useful XP mode which means businesses won’t have to buy new software to replace specialist applications that only work on older machines.

That’s good news in an economic climate where small businesses don’t want to be forking out for expensive software upgrades. But are they ready to upgrade their hardware instead?

Perhaps a refresh of hardware in SMBs is long overdue. Whether now is the time to make those purchasing decisions is another matter.

So it remains to be seen how swiftly XP-loving, mid-market businesses embrace Windows 7. Its penetration into this market may turn out to be slower than Microsoft would undoubtedly like.

Although businesses big and small continue to go into insolvency and the situation is worse than a year ago, the rate of firms going bust in Q3 has fallen by 13.5% compared to Q2 according to the latest figures from Equifax’s 2009 Business Failure Report.

All business sectors and all regions of the UK have seen a slowing in the number of businesses closing their doors during June-September of this year.

Wales and the North East have seen the failure rate fall by 25% quarter-on-quarter, while the wholesale sector has performed the best with closures falling by 19.4%.

All of this, of course, doesn’t hide the fact that thousands of SMEs are going bust every month. Nevertheless, Neil Munroe of Equifax believes its latest data do offer some cause for cautious optimism:

… this must give businesses in general and the UK economy as a whole some confidence that the extreme difficulties we have been experiencing may be lessening … [but] it is crucial that these early signs of recovery are not over-stated.

A realistic approach continues to be paramount. Many businesses will have cut to survive.

Over the next six months, the real test of whether the worst of business closures is over, will be signs of a recovery in demand, sales and profitability.

The latest official figures from the Office of National Statistics show the Consumer Prices Index (CPI) taking a further fall during September 2009 with inflation for the month at 1.1% compared to 1.6% in August.

Quite apart from the impact on sterling, a period of zero inflation or even deflation looks quite possible.

The Retail Prices Index (RPI) still languishes in negative territory, also having fallen in September by 0.1% to 1.4%.

Gas and electricity prices were the major contributor to the downturn in inflation with prices unchanged month-on-month, but not increasing as they did a year ago when tariffs went up.

Other areas dampening inflation were food and drink, restaurants and hotels and recreation and media sectors where the price of DVDs and to a lesser extent games and toys increased by less than a year ago.

David Kern, chief economist at the British Chambers of Commerce, said of the latest figures:

Given the threats facing the economy, this allows the MPC to provide additional stimulus without fear of a short-term upsurge in inflation.

Quantitative easing by the Bank of England may not have filtered through into the system according to many economists.

Meanwhile businesses importing goods will find the effects of low inflation making conditions tough as sterling continues to fall against the Euro in particular.

What is uncertain is whether the Bank of England pumping money into the economy will have the desired effect or not.

SmallBizPod spoke earlier in the week to renowned economist Roger Bootle who believes deflation could still represent a very real threat to the UK economy in much the same way it did to Japan during that country’s ‘lost decade’.

[Picture credit: timparkinson licenced from Flickr]

If you’ve never written a press release before then there’s nothing to worry about, it’s fairly straightforward. The key ingredients to a successful press release are a good story, well-written copy and targeted, enthusiastic pitching.

Style Counsel

Aim to draft between 400-500 words. This is ample for a press release. Use short, to-the-point sentences, as journalists do not have much time on their hands and often receive hundreds of emails a day. Best practice here is to think how you’d sell your news in five seconds, because that’s about as much as you’ve got to catch the journalist’s attention.

The basic structure of your release should be as below:

Title: Bold, in one line explain what your news is and what difference it will make to your target audience

Standfirst: In italics under the headline, another line elaborating on the title

First Paragraph: Here, describe what you do, what your news is and why it’s relevant for your target audience in just two sentences. What’s the top line benefit for your customers?

Second Paragraph: Elaborate on the news. For example, if you’re launching a new product or service, what are the main features and/or benefits for your target audience? What’s in it for them?

Third Paragraph: Include a quote from someone senior here, preferably not a marketing title, though. Journalists don’t like citing marketing titles as a general rule.

Fourth Paragraph: Use this final paragraph to justify your business case with some recent industry statistics or news piece demonstrating why people should be interested in your news. Also use this paragraph to direct readers to other resources, such as online product demonstrations. Finish the release with the word ‘Ends’ below the final para

Boilerplate: Under the press release text you need to tell people who you are. How would you describe your company in one paragraph? What’s you website? Include media relations contact numbers and email addresses here.

Then, when you’re happy with the text, you’re all set to pitch to press!

Life’s a Pitch

Pitching to press is not easy, but editors – especially on regional papers – are usually more willing to hear from people who have set up their own business than PR people pitching on their behalf.

You can do some online research into the main target press in your field, or you can use an online service such as FeaturesExec or Gorkana to build your target lists, but be warned, these can be expensive.

There are newswire distribution services which will send your release to the target media that you want to hit. These need not be expensive, either. Most countries will have a service offering press release distribution but look at their credentials. In the UK, for example, established players include RealWire and ResponseSource.

At the end of the day, however, there is no substitute for the personal touch – calling the journalist to let him or her know what you’re announcing and then emailing them the press release with a short paragraph pitch to remind them of the call.

Once you’ve contacted your main targets you can use free newswires to help improve your search engine optimisation (SEO). Check out the likes of i-Newswire and PR Zoom. Also, research the news sites in your industry as some of them allow you to upload your press releases to their site, if they pass editorial control.

Social Media News Releases (SMNRs) are the most recent development in the continuing evolution of the press release. Whereas most press releases will be sent via email as pure text, SMNRs make the traditional release come alive, with links to more interactive content, such as videos, podcasts or articles and product demonstrations.

This can be done by simple building in links where appropriate, but there are sites that help you distribute your SMNRs, such as PitchEngine. These also enable you to plug the news over social news networks such as Digg and Reddit.

Top Tips

DO:

• Think of what your audience wants to hear, not what you want to say about your product
• Remember that if there’s a third party mentioned or quoted, they must give their permission for you to cite them and approve the text
• Research UK-generated press releases online to see how other companies word press releases
• Identify 10-15 key press contacts and pitch them by phone before emailing
• Use plain English. No one likes marketing puff
• Use keywords – see our SEO guides for more on this
• Send individually addressed emails to your key targets. “Hi Dave”, goes a lot further than “Good morning” to a blind copied address list
• Make sure you call the right journalist! If you supply garden furniture, don’t call the sports desk
• Call your main targets between 9am and noon. 12-2pm is a write-off due to lunch and by the afternoon journalists will most likely be writing to deadline. You can use the afternoon to put your press release on a number of free wires
• Build a news page on your website and aim to get one release out each month

DON’T

• Leave voicemails when calling journalists – they rarely check
• Use hyperbole. If you’re not the leader in your field, then don’t say you are
• Don’t capitalise your headlines, they’re hard to read and makes it LOOK LIKE YOU’RE SHOUTING!
• Send an email to a journalist and follow up with a call asking whether they received it or not, they most likely read it and if they want to get back they will
• Send the release out again a few days if you’re not happy with initial uptake. Journalists are not fools (believe it or not!) and it could damage your attempts to build relationships
• Include large attachments. Although bandwidth is wider now, click-through links are far more preferable. If the journalist wants anything else they’ll be in touch
• Don’t ask the journalist if coverage will appear – you should look for that yourself. If a journalist updated everyone they wrote about when and where their news would appear they’d have no time to write!
• Use exclamation marks in press releases

Writing press releases is something I podcasted on recently. You can listen to that along with other best practice marketing podcasts at my website.

Steps to shred sensitive documents seem like common sense, but large numbers of SMEs are failing to act to prevent criminals from taking advantage of lax security, according to a new survey released today as part of a national campaign to prevent identity fraud.

Nearly a third of UK businesses have fallen victim to fraud and 1 in 3 employees say they simply throw sensitive documents into normal rubbish bins, rather than waste baskets destined for shredding or secure disposal.

National Identify Fraud Prevention Week (NIDFPW) is designed to raise awareness of issues around ID theft for businesses and consumers alike and is backed by government, police, public sector and private businesses.

According to one company behind the scheme, which sells shredders (unsurprisingly!), 79% of small businesses make no effort to destroy sensitive documents bound for landfill or recycling.

To help raise awareness among businesses and to offer practical advice and tips, NIDFPW has launched a new ID fraud prevention website.

With banks and government agencies all failing to protect data in some high profile cases over the last 18 month, the site could well prove a useful resource for businesses large and small.

[Picture credit: Peat Bakke licenced from Flickr]

1. Discuss it with all your partners and/or co directors. Iron out any issues before you put it to the market.

2. Be clear about your timescales. Why are you selling? If it is down to ill health or perhaps a financial decision you may want to sell at the earliest opportunity, however if it is pending retirement or a change of direction you may be prepared to wait for the very best offer. Your timescale will have a bearing on the next issue, which is . . . . .

3. Be realistic about your expectations on price. Everyone wants as much as possible – normally for as little as possible. A good agent will try to get the best out of the market, but please try to put yourself in the buyers shoes. Ask yourself if you would pay what you are asking for your business.

4. Gather together all the relevant information that a buyer will ask for. Your agent can help you here. Get copies of the last three years accounts, details of fixtures and fittings, plant and machinery etc. A copy of your lease if applicable. Your agent will not release any information without discussing the matter with you. If you want a confidential sale be sure to tell your agent.

5. Do your research and appoint a proactive agent. Remember you get nothing for nothing. Your agent should demonstrate the following qualities.

A) Regular, national press advertising in quality media accepted as the reference points for those looking for businesses to buy. such media should currently include Dalton’s Weekly for instance.

B) The agent should have a high profile website, which is user friendly. Some of the best allow the user to download business details. Some others contain videos of businesses for sale.

C). How long has your agent been operating? A business that has been in business many years will always prove to be successful in their chosen trade.

D). Is your agent a franchise or are you dealing with a large, well structured business. A franchised business agent can appear to be a large operation, however you could find that the person who visits you to put your business on the market is the same person who writes your deatils up and prepares your property description, he is also the same person who does your marketing, answers the phone, arranges and follows up viewings, negotiates the offers and completes the initial convceyancing. A lot of work for one or two people operating from thier front room ! Also, this same person may well have been a truck driver or a warehouseman the week before.

It is nearly always better to trust your largest asset to a business that has a history of selling businesses and has a good structure.

6. Contact your agent regularly for progress reports and updates. Dont forget that your agent is not a clairvoyant. Inform them of any significant changes and review your marketing regularly.

7. Lastly, remember that selling a business is in fact a partnership between you and your agent. Respond to all requests for information or viewings quickly and efficiently.

Selling your business is probably the biggest financial consideration you will make in your lifetime – use an agent who understands your needs and is able to provide you with the tailor made service that you require.

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1. 7 things you need to know about sales and selling

Having been working with small businesses and start-ups for the past 8 years due to the B2B nature of our products, I keep on hearing clever money saving tips from clients. Because our business has always been about saving money in house and for our customers, here are my top 7 tips for managing your small business on a budget.

1. Streamline your communication – A modern small business communication hub consists of a phone line, an Internet line and a preferred mailing service such as the Royal Mail. A cheap alternative is to use VoIP providers such as Skype for your physical phone line and calling plan or to choose a communication package which includes Internet and a calling plan all in one.

2. Start your first office at home - Many businesses, especially consulting services who do not need a physical working station have the luxury of starting their first office from home. A home office can be as small as a table with a laptop or as large as a room with a fax machine, shredder etc, where the benefits for a small business are of course risk limitation and financial gain. In cases where you require another address, other than your home address, consider a virtual office service which could be used for your official correspondences and branding.

3. Create a web presence on a budget – To make a good impression today, you will need a web presence i.e. a website. We recently updated our website for the 3rd time, taking into account feedback we received from clients, feedback from our staff and incorporating industry trends. My suggestion would be to start with a simple website, accepting that you will never manage to get every functionality you want at first because of budget issues and most importantly because you cannot possibly think of it all yourself. Consider a free website tool such as Google Sites to start with.

4. Manage your tax returns – Hiring an accountant can be very costly, even on a budget it could easily set you back £1,000 a year. If you are a small business, consider managing your tax returns in house as normally the process of self-assessment involves completing an online or paper tax return in order for the revenue office to learn about your income and capital gains (profits on the sale of certain assets), or to claim tax allowances or relief against your tax bill.

5. Manage your marketing in house – Even if you offer a fantastic service, have innovative technology or a great product offering, with no marketing work set up no one will hear of it. Small businesses often take the route of hiring an external agency thinking they can do a better job. While dedicated agencies sometimes offer services which your in house team cannot, it will comes at a price. Alternatively for the first few months at least look to undertake your marketing responsibilities in house (after all who knows your business better than you). Train your staff to gap their lack of knowledge and if you can spare some money consider hiring a freelance specialist instead of an agency.

6. Don’t tie yourself down long term – As you will have read so far, most of my tips revolve around saving money and minimising your financial risks. With that in mind, always double check if you are over-committing yourself with renting an office, streamlining your office communications or any other expense you might want to bailout of.

7. Reduce your office supply costs – Office supply costs are a considerable expense even for a small enterprise, especially consumables such as printer ink cartridges and paper. Office supplies are expensive and branded products can cost twice as much as a non branded product, though the results will be same in terms of quality. This is extremely true for one of the biggest office budget guzzlers, printer ink cartridges. An alternative, for example, would be to purchase a re-manufactured or compatible part instead of the original.

What are your tips for managing your small business on a budget?

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Slash, burn, sweep away. Sharp blades, bonfires and new brooms.

When it comes to small businesses and red tape, politicians have a limited, but suitably strident vocabulary.

Nightclub bouncer Ken Clarke has the talk, but does he have the trousers?

Words that always play well to businesses large and small. Words that always play well politically.

Words that always play well to the vanity of politicians who believe their administration will have a light touch: less government, not more.

The problem is, for decades, Labour and the Tories alike have failed miserably to do anything about the legislative burden on UK SMEs.

They’re all talk and no trousers – words, words and more words.

So will Ken Clarke and the next Conservative government hold true to the pledge he made yesterday at the party’s 2009 annual conference that:

to get Britain back in business, the excessive regulation that businesses face has to be swept away.

Words like these echo down the years.

In 1994 Michael Heseltine famously announced the biggest purge of bureaucracy since World War II (?) and said he had lit a match under the :

… largest bonfire of controls that has taken place in modern times in this country.

In 2006 Tony Blair promised to cut red tape for business by 25% by May 2010, introduced the concept of ‘better regulation’ and Labour committed itself to:

… one of the most radical programmes of regulatory reform in the world.

The Cost of Red Tape

There is little doubt that the cost of red tape since Labour came to power in 1997 has increased dramatically.

Government figures suggest Whitehall bureaucracy costs businesses £15 billion a year.

The Federation of Small Businesses says SMEs spend 7 hours a week dealing with red tape. The British Chambers of Commerce (BCC) estimate new regulations introduced from 1998-2009 have cost business £76.8 billion.

Over 50% of the increase in costs accounted for by the BCC are linked to introduction of the National Minimum Wage, The Working Time Directive and the Data Protection Act.

Some would argue that introducing 4 weeks holiday for all, protecting personal data and setting a benchmark for low pay are all positive pieces of legislation.

But the uncertainty, cost and time it takes small businesses to deal with an ever-changing, growing legislative environment remains a massive headache.

In December 2008 the government claimed to have reduced the cost of red tape by £1.9 billion.

Bizarrely £400 million of this saving is supposed to have come via rather rudimentary ‘online tools’ to help businesses better understand their employment law responsibilities. A saving no business group I’ve spoken to finds credible.

Clarke’s Red Tape Proposals

So what will Ken Clarke actually do to address the red tape burden?

The headline grabbing ‘night club bouncer’ analogy – one in, one out in terms of new legislation – suits Ken down to the ground.

But one in, one out is not a ’sweeping away’ of red tape, although it promises a 5% net reduction in the legislative burden set out in a policy document released yesterday – interestingly retaining the New Labour mantra of ‘better regulation’.

The challenge will be to prove significant reductions, not just near status quo ‘improvements’.

For years small business groups and some politicians like Vince Cable of the Liberal Democrats have called for sunset clauses on legislation i.e. legislation disappears from the statute books after a set period of time.

Conservative proposals have avoided this step. They did, however, introduce a sunset clause for quangos, unless they can prove their usefulness.

Since much of the legislation affecting small firms is derived from Europe, the pro-Europe Ken Clarke may find the reality of wielding his new broom more difficult to execute in practice, than in theory.

Most important, however, is what’s been missing from government or shadow-government red tape policy for over a decade – the concept of deregulation.

Deregulation – A Dirty Word

The fact of the matter is that ‘deregulation’ has become a tainted word. Why? Because deregulation of financial markets played a significant part in the massive global financial mess we all find ourselves in.

But small businesses shouldn’t be punished for the crimes of big business.

We need deregulation, not the status quo and certainly not ‘better regulation’.

With the launch this week of the Home Business Awards 2009, it’s that time of year again when all home-based businesses have a chance to be recognised on a national stage for all their kitchen table entrepreneurial prowess.

This year’s awards highlight four main categories, ‘Home Business of the Year’, ‘Home Business Couple of the Year’, ‘Home Office of the Year’, ‘Young Home Business Owner of the Year’.

A new category introduced in 2009 focuses on everyone building a business from home in their spare time – the so-called 5 to 9ers.

Winners will be announced at the Enterprise Nation Conference on Home Enterprise Day on Friday 20th November.

The deadline for Home Business Awards entries is Friday 6th November.

Although not all niche ventures have the capacity to grow into thriving businesses, some are ripe for a funding boost, so here are seven steps to building a successful niche business while keeping the business angels who finance your venture happy.

Follow your passion – Consider the things that you are truly passionate about. Whether it is a passion for a particular sector of the market that you feel is being ignored or a strong belief that something already in existence could be done better, your passion could lead to a profitable venture.

Business angels love passionate entrepreneurs and some of the most successful businesses were born from a simple passion, which means that nurturing yours might allow it to grow into something truly amazing.

Get intimate with your market – Okay, well maybe not that kind of intimate, but you should certainly know everything there is to know about your niche market.

If you followed step 1, the chances are you already know a thing or two about your target audience, but no matter how well you think you know your niche, conducting extensive research will probably uncover some very helpful titbits and will show business angels how serious you are and that you really know your stuff.

Speak their language – Obtaining an intrinsic understanding of your market will surely reveal the best means of communicating with your audience. Whether you are marketing to snowboarders or bankers, speaking at their level and in their language is an important part of any effective marketing strategy.

Expand your niche – While niches are, by definition, limited and specific, they can still be developed and expanded while staying true to your core market.

By treading lightly and testing the market to better understand the natural boundaries of your particular niche, you can expand your market without devastating your loyal customers or worrying business angels who may grow wary if you stray too far from your fundamental ethos.

Be the go-to guy (or gal) – Venture promotion is all about expensive advertising budgets, isn’t it? Simply put, no. Public relations is a particularly effective marketing tool for niche ventures and is an excellent way to convince business angels and customers alike that you are an expert in your field.

Offer your unique wisdom to magazines, websites, newspapers, television programmes and radio shows – any medium your audience is likely to partake in – and become a sought-after expert in your niche. The promotional rewards could be immense.

Stay true to your niche – As mentioned in step 4, those loyal consumers that fell in love with you right from the start may not like it if you begin to stray too far from your niche core. While growing and expanding is all well and good, never lose sight of what drew your customers to you in the first place and be wary of over-expansion.

To maintain that central place in their hearts – and more importantly, their wallets – be careful not to deviate too far and unintentionally knock yourself out of the position you and your business angels fought so hard to reach in your niche.

Grow your business – The fact that you have a niche business does not mandate that it has to stay small. It is entirely possible to stay true to your niche market while carefully choosing opportunities for expansion and growth.

Widen your market, broaden your reach and find business angels who are passionate about your area of expertise to invest in your venture and blast it to exciting new heights. Many successful international conglomerates started on a shoestring and a lot of dedication to an idea that captured the imagination of a generation.

Follow this basic how-to guide, tend to your passion with regular care and feeding, and never forget the reason you started your niche venture.

This is what will get you out of bed in the morning, push you to strive for success, and bring business angels knocking at your door eager to invest in your endeavour and assist you in bringing your business dreams to fruition.

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1. 7 traits of a successful entrepreneur

So you have an idea for a business, which is brilliant.

I am truly very excited for you, as this is the moment when your creativity knows no bounds. This is when your senses are most heightened and the constraints on what you can do have not yet reared their difficult and ugly heads.

Are you creative? Of course you are! Many people have simply forgotten how to capture their creative potential.

When you were a child, you would happily concentrate for hours on end, creating endless scenarios played out with the tools you had to hand: building blocks, dolls, cars, trains, dressing-up clothes and action heroes.

The creativity you had as a child was a powerful tool that you could call on to bring you happiness and that acted as comfort and support.

You still have this capacity for creative thought, but it may be buried deep down and the “toys” are different. You need to release your creativity and enjoy the benefits it brings you in business.

One trick is to exercise your brain and perhaps think a little more like a child. Do a simple crossword, paint a picture, sing a song, read some poetry, kick a ball about. Enjoy the freedom of letting go of your worries.

You may already have an idea for a business or just an inkling of one. Take this spark, get some quiet time and see if you can let your mind wander into unexpected places.

When you get good at this, the brain begins to reorganize your thoughts for you. Typically, the dream state is the mind’s way of allocating space and links to the thoughts and experiences you have been having throughout the day.

Dreams are often a strange collection of follow-on events because your brain is making subconscious connections.

Practice creativity and you can enable this process in your waking brain, making subconscious connections to solve complex problems without much effort. All it takes is a little practice.

Thomas Edison exercised his creativity by doing his thinking in a comfortable chair with a few ball bearings in his hand, draped over the armrest. If he fell asleep, the ball bearings would drop into a metal receptacle and the clattering would wake him up.

He believed that his most potent ideas came from the time between waking and sleeping, when his mind was able to set his thoughts free.

How many times have you fretted over a problem and then nodded off to sleep, only to find in the morning that the solution was there all along?

That’s your brain doing its work. Sometimes it’s better not to force a solution out but to coax it out with a little quiet time.

Your brain is a remarkable asset. If you want to solve a particular issue, then sleep on it.

Over 200,000 businesses could be facing a tax bombshell, having taken advantage of government ‘time-to-pay’ arrangements which let SMEs defer their liability with HMRC to ease cash flow.

Some £2.7 billion has already been deferred up until June this year, according to official figures.

Of that total £1.1 billion is now up for repayment, although 33,000 repeat arrangements have already been agreed amounting to £440 million.

On top of these figures, business debt owed to HMRC has risen enormously from £2.7 billion to over £27 billion over the last 12 months.

Some, including business restructuring specialists, MCR, are concerned that with the possibility of smaller businesses finding times tough, even if we emerge from a ‘technical recession’, the building up of tax owed could aggravate the very cash flow situation the Business Payment Support Service was set up to ease.

Steve Clancy, partner at MCR, said:

… the growing numbers of cash strapped companies that have put off paying taxes are at risk of insolvency because of this. Increases could start as soon as the end of the year as, despite the scheme still being available, we have seen HMRC tighten up on the procedure considerably since August 2009.

[Picture credit: Andy Beez licenced from Flickr]

1. Yourself vs. Formation Agent

If you set up the company yourself it can appear to be the cheapest option in the short term and you can do this directly with Companies House. However it can be difficult to work out which forms to fill in and can take longer to process. Plus you will need to supply your own memorandum and articles of association which can be time consuming and expensive to obtain. Using an online formation agent is much easier as they will have an online application that you have to fill in which they then use to form your limited company. If you find the right formation agent they can incorporate your company for around £25.

2. Company Name

Picking a name is an important part of setting up a new company, but don’t let the excitement distract you from doing some research. Check that your name is available before applying so that your application isn’t rejected. Also make sure that the URL you will want after forming your company is available and that someone else doesn’t have a trademark on the use of the name. Otherwise you may have to change it later on. Finally check your name against the sensitive words list on the Companies House website. If you use a sensitive word, you may have to provide supporting documentation or obtain approval from a Government department to use it.

3. Business Plan

Make sure you don’t start your company without putting in place a business plan. Without one you do not have a “road map” helping you with what direction you are going. In addition you may well have to provide a plan to your bank when looking for funding.

4. Company Secretary

Carefully consider whether you should appoint a company secretary. Just because it is no longer compulsory does not necessarily mean that you should not appoint one. Their tasks include Companies House filing and maintaining the Company Register which are important legal requirements. Having an experienced person who can focus on these compliance matters takes some of the burden away from the directors, allowing them to focus on managing the company and growing revenue.. Alternatively you may wish to use a professional firm to act as your company secretary if you are worried about this.

5. Registered Office

Using your home address can result in privacy issues as it is made publicly available. Always consider using a different registered office address, even that of your accountant or solicitors. Please note that from 1^st October 2009 directors can disclose a service address as opposed to their residential address so their privacy can be maintained

6. “Off the shelf” Companies

It is usually not beneficial to buy an off the shelf company. By using one you are buying a limited company that has already been registered at Companies House, and in theory has never traded. However you do not personally know the initial shareholders and officers and therefore it is always advisable to incorporate a company yourself.

7. Limited Company vs. Sole Trader

You should make sure you seriously consider whether your business should trade via a limited company or via you as an individual and sole trader. There are good reasons to trade through a private limited company, but they are not always beneficial for everyone. It is worth talking this through with a Chartered Accountant before making the decision if you are unsure.

No related posts.

Modest increases in GDP (gross domestic product) are set to return to the UK economy with 0.3% and 0.4% growth predicted in Q3 and Q4 2009 respectively, according to the CBI’s latest economic forecast released today.

The end of the recession is nigh, but the CBI warns that consumer and business demand is likely to remain stifled, making recovery in 2010 somewhat tentative.

The reintroduction of a 17.5% VAT rate in January 2010 will prompt consumers to rush out and buy ahead of the Christmas holiday period, but will see growth fall back in Q1 and Q2 to little more than 0.1%, says the lobby group for British business.

CBI director general, Richard Lambert, said:

The outlook is improving as the UK draws strength from quantitative easing, a weak pound and a recovering global economy. Although growth this quarter should mark the end of the recession, conditions in the UK will remain tough for some time yet, and it is difficult to see where demand growth will come from.

Business investment has seen its greatest fall in 40 years during 2009 and economists predict the situation will only gradually improve during 2010.

Add to this a ‘debt correction’ among consumers who are unlikely to want to splash the cash in the way they did when credit was easy, and you have a recipe for a very different economic landscape over the next few years.

This kind of economic adjustment was inevitable. Most businesses will already be planning for more subdued demand.

[Picture credit: DavetheGrey licenced from Flickr]

Times have certainly been tough lately, and small business owners are likely to have grown tired of battling for customers in an overcrowded market place.

Faced with fierce competition, many have decided to look further afield for new business in an effort to reach a wider audience and increase sales.

Although taking products into new markets is an attractive proposition, it is not a move that should ever be taken lightly, and business owners should take time to properly assess the pros, cons and issues they may face when making such a move. To operate in foreign markets effectively, there are a number of important areas businesses must first address.

First of all, building in enough time to create a sound business plan in the early stages of the move will pay dividends in the long term; and thorough marketplace research is imperative. Businesses can’t afford to get carried away with the idea of expanding overseas and be blind to potential risks.

It is vital to have a solid understanding the business landscape in each country. This includes knowledge of size of the business universe, broad characteristics of the businesses, some view of the level of sophistication, business culture or adoption of direct marketing (DM) and importantly, the infrastructure to support direct marketing.

You should utilise all resources that can offer advice. For example talking to the local government, chambers of commerce and other business resources can help gather information on the size and characteristics of various markets.

Once you have carried out suitable planning and research and are ready to launch, the first hurdle you may face is that of the language barrier. Although many non-English speaking organisations are happy to do business in English, some aren’t and will not welcome you calling and speaking in a non native language – even if you are trying to buy.

Low brand awareness in the early stages may also slow down the sales process; however partnerships with established brands to add recognition and trust can help get things moving more quickly.

When dealing with finances in foreign countries, managing exchange rates can be bewildering and extremely complicated.

On paper, what initially appears to be a profit can be massively eroded by variations in exchange rates. You need to be part accountant, part economist and part fortune teller!

Small businesses can get advice from their banks on this, but the banking schemes for fixing (hedging) rates are very expensive. We’ve found Amex to offer the best value and the most support – but I strongly advise that people seek a range of views and schemes before deciding. Being prepared to simply risk the rate on any given day may be the best solution in many circumstances.

When it comes to data, you must be aware that not all countries will have good sources which are accurate and well maintained. It also may not conform to similar standards and address structures as the UK.

Even countries in Western Europe can have complicated, cumbersome and outdated data. Finding the data you need for a European or global campaign can be extremely time consuming, with some countries like Greece, Cyprus, Switzerland and Austria being particularly problematic.

Rather than rule out DM campaigns all together, businesses should work around these issues in order to get their messages to the appropriate prospects. Businesses should also set up systems to ensure data is captured from the responses, to be stored for later use.

For marketers, understanding how European privacy legislation is interpreted and practiced in each country can be tricky. Confusion can lead to big and expensive legal problems – which has led some companies to cease any lead generation activities while they formulate policy to avoid the increasing levels of complaints and legal escalation.

Building relationships with experienced and knowledgeable suppliers and partners can assist in ironing out initial hiccups, but be aware that this can be a lengthy process, and one which must not be rushed or overlooked.

For any small business considering crossing borders with their campaign, the best advice I can offer is to do your research, work with experts, have a plan but be prepared to adjust it, if needs be.

The benefits of not relying solely on one economy and allowing your products or services to reach a much wider audience can be substantial, but the task must be approached in the right way.

There has been a marked decrease in the numbers of firms going out of business in the UK, according to data from Experian’s Insolvency and Distress Index which estimates 1,796 companies went into administration in August 2009.

This is 23% lower than the figures for July 2009 and the smallest increase since September 2008, almost a year ago.

But just as entering a recession was unclear for some time, so exiting a recession is certainly not black and white.

The overall stock of new businesses has continued to rise and Experian believes this may mask the real impact on business closures of the greatest global downturn since the end of WWII.

The number of firms on the brink has also decreased slightly with Experian reporting that its ‘distress’ score (the number likely to close soon) has also improved to be at its most robust since August last year.

The jury’s still out on how devastating this recession is likely to be in terms of jobs and business closures. Both tend to be known, notoriously, as ‘lagging indicators’.

Just in raw numbers alone, the number of business closures is already on a par with the total for the last major recession in the early nineties.

[Picture credit: mycuteladybug licenced from Flickr]

When Neal Hoskins left his job at Oxford University Press to set up a boutique publisher of english versions of children’s picture books from all over the world, booksellers and others in the industry raised a doubting eyebrow.

It’s just too hard to sell children’s books from non-english speaking authors to parents in the UK, they said.

Four years later and Neal’s business, WingedChariot Press, is one of those leading the publishing industry into the brave new world of digital, with the launch of an application (App) for the iPhone and iPod Touch.

He joins a growing band of ‘iPhone entrepreneurs’ who recognise the potential of the mobile platform to prompt innovation and disrupt the distribution models of traditional industries like publishing.

The picture book App, called ‘The Surprise’, has a simplicity and charm which parents and children alike will enjoy – very much in the spirit of Apple’s own design ethic.

It’s digital, but it’s also warm, benefiting from the gestures and beautiful screens of the iPhone and the Touch.

Distribution, distribution, distribution

With startup funding from the Arts Council, WingedChariot published its first books at the end of 2005, but rapidly found getting them into shops was the real challenge. As Neal admits:

Distribution is the hardest puzzle to solve and in some ways you should look at that first before throwing yourself into the deep end, but if you did you’d probably never take the plunge.

A link up with Walker Books in the UK has helped, but the distribution possibilities of the iPhone and other mobile devices was one of his main reasons for exploring digital.

It also has the potential to make WingedChariot, more of a publisher, rather than a translation, marketing and re-publishing business for foreign language picture books.

With digital overheads so much lower than printing and shipping dead trees to bookshops, Neal has ambitions to bring on new artists and authors who wouldn’t normally attract the attention of mainstream publishing companies.

Developing for the iPhone

A chance meeting with a developer at the Bologna Book Fair began the initially daunting phase of getting an App built.

In fact, although slow and sometimes difficult to begin with, Neal has learned a lot along the way about how to manage the publishing process in this new medium.

It was quite a tortuous process for us to learn how to work within that framework, how we work with editorial, images and so on. But I think it taught us a great deal. If this is really going to take off, we’ll want to develop ourselves in-house.

Of course, large publishers are already experimenting with Apps.

But by being in there early and by creating a new process and browser-based platform to streamline production and distribution on mobile, publishing minnow WingedChariot, like lots of disruptive startups in the web/tech space, has given itself the best chance to compete with larger rivals.

Marginal Margins and Speaking in Tongues

The irony is, despite slashing printing, distribution and other costs associated with getting a £15 children’s picture book into the hands of eager young readers in bookshops, margins for a 56p story in Apple’s App store are just as slim, if not slimmer.

And that’s the fundamental challenge. Will it pay?

Neal recognises pricing is untested and a bit of an experiment.

But plans to up the frequency of new titles, develop an App for WingedChariot itself to house collections of picture books and the promise of audio and images as a tool to teach reading, suggest there’s a lot of potential to sell in volume. The kind of volumes that even large publishing houses would envy.

WingedChariot’s roots are in publishing foreign language books in translation. And language may again be its biggest opportunity in the digital world.

Multi-lingual versions of its picturebook apps and the borderless appeal of the illustrations themselves, mean being big in Japan, Brazil, Russia and China is a real ambition, not a pipe dream.

As Neal says:

If we get this right, it gives us possibilities beyond our wildest dreams.

Like the books it publishes for kids, the WingedChariot story looks set to be a colourful adventure.

Let’s hope it has a happy ending.

No matter what businesses say in public, most are being squeezed by the downturn. That squeeze often makes itself felt when it comes to investing in new IT or applications.

It’s no surprise that the CDW IT Monitor survey of IT spending in July 09 showed that just 21% of small businesses expect to grow their IT budgets in the next year.

Faced with stagnant revenues and tight credit, business owners are leaping at opportunities to cut their costs, by deferring software and hardware purchases and upgrades where possible.

The trick, of course, is not cutting so deeply that the business itself starts to suffer as a result. The good news is, there is a way to avoid this squeeze, by using IT that is low-cost, needs minimal upfront investment or manpower-sapping management yet delivers business-enhancing applications.

Software as a Service (SaaS) or cloud applications can deliver these benefits. Not merely for the potential cost savings, but also for the fact that they let organisations deploy enterprise-class applications quickly and easily.

Let’s take a closer look at the possible benefits.

Lower up-front costs

Instead of buying hardware and software and paying external parties to set up and run the applications, businesses simply rent the software they need on a per-user, per-month basis. This means costs are predictable, without a large bill before the application is even up and running.

Faster set up

SaaS gives businesses the ability to deploy and scale their applications up or down in hours, without having to reprogram, buy blocks of licenses, upgrade servers or end-user PCs. It simply takes away the burdensome administration that usually goes hand-in-hand with new software roll-outs.

Reduced financial risk

Instead of having to swallow the cost of new software in one gulp, the investment is spread monthly with no deposit and no balloon payment at the end. This cuts the financial risk out of IT planning because, if the business isn’t benefiting from a particular software module, it can simply stop using it, with zero penalty.

Lower capital expenditure

Because SaaS uses commodity hardware in large-scale data centres, businesses don’t have to invest in new servers or upgrades to existing machines themselves to benefit from cloud apps. The minimal hardware costs of using the application are factored into the overall monthly cost as part of the ‘utility pricing’ model.

Lower operating expenses

SaaS also frees IT administrators from much of the tedious manual provisioning and management of new applications, and handling upgrades to PCs to cope with those new apps. In addition, there should be no extra software support needed, as the SaaS vendor provides support for its apps.

Decreased downtime

SaaS means that new applications can be rolled out quickly without having to take hardware offline: users typically point their web browsers at the cloud app and can get up and running. This means less disruption. Also, cloud services are typically more robust, with less downtime than server-based software. There’s also the added benefit that the apps can be accessed from anywhere – the office, from home, from a mobile device or web kiosk. This is particularly important for smaller businesses, where flexible access is a boon.

Greener computing

SaaS is also a greener IT solution, helping companies using it to reduce their carbon footprint. If a firm is able to run just one less PC or server, it would typically save 145 kWh of electricity per year, equivalent to 105kg CO2** – as well as the costs of buying and running the computer.

So there are 7 good reasons why SaaS could help recession-proof your IT, and give your computing a boost. Even though times are turbulent right now, businesses could be forgiven for having their heads in the cloud.

Related posts:

1. 7 Things You Should Know About Cloud Computing and Cloud Services
2. Seven things you should ask a cloud computing vendor

When it comes to business-to-business marketing, particularly for those of us in the SME space, relationships really do count. Love or hate networking, you really should include it as a key marketing tool. But why?

The simple fact is people buy from people. So, the wider your network of connections, the greater your referral business will be.

It’s the ripple effect. If you provide a great service for a client then they’ll recommend you to their contacts and so on. However, building a network isn’t as easy as you might think.

It takes time and effort and you have to have 100% confidence you can deliver a great product/service, otherwise it could all backfire.

In the same way good service has a positive effect on building your referrals, one negative experience can seriously damage your reputation and erode all your hard work in building those important new connections.

The good news is networking delivers immediate results and provides a cost effective marketing tool. From my own experience, I find the sales cycle is often much shorter when leads are acquired through networking.

Attending just one event can generate a golden nugget of a new prospect that turns into a customer far more quickly than other methods.

The reason for this is you’ve met someone who already acknowledges a need. You don’t have to spend time trying to convince them they require your product or service as you usually do with ‘cold’ marketing such as direct mail.

Secondly, you’ve already made a ‘connection’ with that person, so your barriers have been removed.

Networking comes in many forms. It isn’t just the pre-organised ‘networking event’ that so many fear or hate. Informal networking is just as powerful.

Meeting people in your building, making new contacts at meetings, socialising, friends and family, they’re all forms of networking. It’s also about giving to receive.

I go out of my way to proactively connect my clients, suppliers and trusted contacts to each other. I sing their praises to others and even have a page on my website specifically for this purpose.

There’s nothing in it for me, but my contacts appreciate that I’m promoting them and driving opportunities their way. In return I hope they’ll do the same for me!

So give networking a go, the traditional face-to-face networking that is. Combine it with building your online network and you’ll have developed one very powerful, cost-effective marketing tool.

I don’t know about you, but every time a new top level domain (the bit after the dot in your web address also known as a TLD) is released, I feel like someone’s pointing a gun at my head.

Just when you thought you’d secured your brand, small business or startup presence online by buying up the .com and .co.uk versions of your domain name, all of sudden someone comes up with .biz, .tv, .mobi, .net or the latest, .tel.

It’s as if the companies behind TLD bloat are saying: buy this new domain now before some squatter or adsense splogger grabs it and trashes your brand, your trademark or your business online.

And that’s exactly what seems to drive demand and create a ‘new gold rush’ in the domain name market – fear.

Add to this the confusion which liberalisation of domain names in 2010 is bound to cause and protecting your business ‘name’ on the internet or mobile all begins to look very messy, not to say expensive.

Telnic and .tel – more of the same?

So when I received a call from someone representing Telnic, the company behind .tel domains, extolling their benefits to small businesses, I was more than a little sceptical.

Interestingly though .tel isn’t just another domain name – Telnic really has innovated.

A .tel domain, which will cost you around £12 a year, allows you to put your business or personal contact details encrypted on servers at the heart of the internet known as the DNS (domain name servers) and make them visible online and accessible quickly and easily on smart phones. So what are the benefits?

A .tel page which allows you to keep your contact details online in a simple .tel template held on domain name servers.

Telnic claims this helps non-tech savvy small businesses get a presence online, assists in SEO (search engine optimisation) through easily updateable keywords and thereby discoverability, creates a distributed global business directory and is very fast, particularly on mobile platforms.

Most of these benefits are highly debatable when it comes to what SMEs want.

Small business benefits of .tel?

Let’s consider web presence, SEO and discoverability. The simple html and javascript template (see above) which creates the .tel web presence is certainly a one-stop-shop for your business contact details and a few keywords, but it’s not much more.

Although friendly to search engine spiders because it’s so simple, the page is very unlikely to appear high in search results other than for your name or the name of your business. And surely you’d want your own website in that position?

Most small businesses online want to be discovered ahead of their competition locally or nationally for more general searches e.g. ‘glasgow plumber’ perhaps.

Making it easy for people who already know your business to find your contact details is fine, but it’s hardly discoverability or a source of new punters.

The keyword ‘benefits’ are also largely irrelevant because search engines look for fresh, relevant content and reputation in terms of in-bound links, something these pages are unlikely to attract.

As for speed, well such simple web pages load rapidly – in less than a second – but the benefit is hardly perceptible compared to well-designed ordinary websites.

If .tel, and it’s a big if, becomes the equivalent of a global business directory online, your business will be competing against thousands of others in the same category.

And because of the lack of information on the .tel pages, it’s going to offer no perceivable benefit in terms of differentiation. No more certainly than you’d get from being listed for free in a directory like Yell.com or FreeIndex.co.uk.

Bye, bye address book?

But in a couple of areas Telnic may be on to something, although they face a catch-22 as do their potential customers.

Browsing the web on mobile phones has seen massive growth as smartphones proliferate. Telnic’s .tel domains make your contact details easily accessible and also dialable on the move.

But then Facebook, Gmail contacts, and Plaxo do this too and Apple’s iPhone allows you to dial numbers on websites by clicking on them straight on the phone’s mobile browser.

What differentiates .tel is the possibility of synchronising contact details as they’re updated by your contact, not you. Always having up-to-date details for business contacts that you no longer have to update yourself is a big potential plus.

I’m a name, not a number

The catch-22 is that this service only becomes really useful, if .tel becomes ubiquitous and you and all your business contacts are using it.

But ubiquity is tough. To that extent .tel is competing against free services like Twitter and Facebook to become a definitive ‘namespace’ for people and businesses.

What’s a namespace? Well rather than everybody having a telephone number, it’s everybody having a universally accepted digital ‘name/home’. An easy to remember ‘handle’ that every man, woman and child recognises. One click and you’re in touch, online or on the move.

Twitter with its @ symbol and Facebook profiles have come the closest to achieving this so far. Both companies have millions and millions of people on their platforms, with ambitions to grow to 1 billion users.

Your hairdresser knows about Twitter and Facebook. Your hairdresser probably uses Twitter and Facebook. The day your hairdresser asks you, ‘what’s your .tel’ will be the day Telnic is dreaming of.

As the company’s head of communications, Justin Hayward, said to me last week:

We’re certainly aiming for our Hoover moment.

The moment when .tel becomes a generic term, a verb or a universally accepted ‘namespace’.

It may be a long wait.

When I first embarked on my public relations career more than a decade ago, my boss said to me: “PR is just common sense, that’s all, common sense”. He’s right, but as a small business looking to form your own PR strategy saying it’s “just common sense” is a fairly vague description.

Knowing just “what” PR is – and what it’s not – is a good platform to start from. PR is not advertising, you do not procure online space, column inches or airtime with PR, but your aim is to secure those via various campaigns and tactics.

PR is the establishment and maintenance of your reputation – trying to ensure that people are talking about you, that those comments are positive and, where they’re not, working to change that perception.

Wish List

A poorly thought-out PR strategy is unlikely to succeed. Small business managers have precious little time on their hands to dedicate to marketing as it is, so getting it right first time is crucial in the long-run.

There are some very simple questions small businesses should be asking before they start managing their own PR:

- What are the objectives of our PR strategy in the short, medium and long term, and how are we measuring effectiveness?
- Who are our customers and what media do they access that we can use to reach them
- What makes our company different from our competitors and how do we communicate and articulate that in a way that’s palatable to press, potential customers and search engines
- What do we want customers, bloggers and editors to say and think about us?

From here, forming a PR strategy is then limited only by your imagination. There are endless things you can do as a small business or start-up to promote your products and services, from press releases to opinion articles, blogs to social networking, customer case studies and creative stunts.

You can engage everyone from your local paper, regional organ and even national newspapers and broadcasters, if you have a genuine story to tell.

Logistics

Once you’ve worked out who you want to talk to, what tactics you want to deploy to reach them and over which platforms then you need a few more things to get started.

- Build press lists of target publications and writers: You can do this yourself or you can use services such as Gorkana or Features Exec, which can be quite pricey. Think vertically as well, here, there are hundreds of trade publications out there. Building press lists is time-consuming, so it could be a job for that keen graduate intern!
- Build your press release template: Look online for great examples of press releases. For more, listen to this podcast I recorded on this subject recently.
- Identify relevant bloggers and engage with them: Leave non-salesy comments on their blogs, create backlinks. Get blogging yourself!
- Build a news and resource page on your website: This is critical as journalists need to know who to contact if they’re interested in you, plus the more Web-friendly text and links you host on your site will increase your search engine ranking.
- Use free online news distribution sites, such as PitchEngine, Digg or Reddit to place your news, as well as distributing it to your main targets.
- Seek advice on how to handle media calls. Journalists can sniff out inexperienced or uncomfortable spokespeople. Study how politicians and business leaders answer questions on television, these guys receive the very best media training.

The entrepreneur PT Barnum once said that “Without publicity a terrible thing happens, nothing”.

If you’re not engaging in PR already, then it’s time to get your skates on. It’s not a thing you necessarily need to outsource and the only real investment is your time. But it all comes down to getting the basics right, and that’s where common sense comes in.

If you can master that common sense approach, then not only should you be able to look forward to increased business, but my old boss would be very proud of you.

More good news for early stage internet and mobile companies today as Julie Meyer, online Dragon and founder of Ariadne Capital, announces backing for a debut VC fund which aims to raise £20 million by the end of the year.

The first £250,000 to £1 million of the Ariadne Capital Entrepreneurs Fund (ACE Fund) will target ‘game-changing’ businesses – those investors consider to have disruptive technology, business models or market vision.

As well as Julie Meyer herself, backers of the fund include un-named investors from the London Private Equity world and the following entrepreneurs:

• David Rowe, founder of EasyNet
• Marc Worth, founder of WGSN
• Rob Hersov, founder of Marquis Jet Europe
• Michael Jackson, former Chairman of Sage, Partygaming and Access Intelligence, Founder of Elderstreet
• Simon Capreis, gaming and betting private investor
• Gerard Bonnevay, Board Director of Success Europe, Former Board Director of Credit Agricole and founder of Celimage

On announcing the fund this morning, Meyer said:

Ariadne Capital has developed a model whereby we bring the gutsiest entrepreneurs into our portfolio, and advise them effectively on the Go to Market, the Board alignment, Corporate Structure and High Growth Management. Our new ACE Fund helps us to take that expertise to the next level.

The ACE Fund launch follows a similar fund, ProFounders Capital, announced by Lastminute.com founder Brent Hoberman and Bebo founder, Michael Birch, earlier this summer which plans to offer £30 million to early stage web/technology businesses.

The ‘entrepreneurs funding entrepreneurs’ sector seems to be very active at the moment in the UK. Perhaps a sign of the times.

Definitely an interesting bridge between angel and VC funding proper.

In short the quicker you get cash in the door from your customers and the slower it has to leave to pay your suppliers, the better as that cash stays in the business and works harder for you. Some business models work a lot better than others in this regard.

If you’ve got large blue chip customers who don’t pay for 60 to 90 days and expensive staff who need a pay cheque every month, you’re going to have a bigger challenge managing working cap than say a restaurant where cash is in the till before you have to pay for food and wages – nice!

Here are seven tips to maximise your working capital assuming the business is trading normally and not in some kind of crisis or recovery situation.

1. Minimise your payment due date on your invoices

On your invoices clearly state “Payment due within X days”. Then ask yourself why this can’t be “Payment due on presentation of the invoice”. The answer may be due to industry standards for your line of business. Just remember if you say 30 days, you won’t get paid until Day 45 or later so you might as well put the earliest date possible.

2. Stay on top of collections

Cash is the lifeblood of your business. Those invoices you’re sending out need monitoring and collecting on. It is a fact of business life these will not get paid on time and you have to proactively manage the debtor’s ledger. Make this part of the job of your finance manager and/or admin support in the office, if one is available.

3. Margin – look for the 80:20

Make sure you know which products or services you provide generate the most gross margin. Often times 80% of your margin will come from 20% of your product or service. Unless there is some strategic reason why you need to, don’t waste time and effort on chasing in cash and paying suppliers for product that add nothing to the bottom line or worse, lose you money.

4. Stockholding – the cardinal sin

Related to margin, don’t keep cash tied up in stock. Knowing your sales volumes will help you keep track of how much stock you should be holding.

5. Keep a rolling weekly cash flow

Forecast your cash requirements on at least a rolling 12-month. Know when cash is tight which is usually around month end for salaries and quarter end for VAT and rent payments. If you don’t know where you are with cash it will bite you hard and possibly give you a fatal wound.

6. Communicate a payment policy

Let your suppliers know that you do one payment run a month and it’s on X date. Let them know that payment dates are in the month following receipt of invoice. Depending on the size of your suppliers, some will accept and some will dictate to you. Having one a month will also free up your finance manager’s time for collections.

7. Treat your preferred suppliers different to other suppliers

If you have key partners such as licensors, business advisers, treat them like employees and pay on time unless cash flow dictates otherwise. Do not let poor payment become a demotivator or bone of contention with people critical to your success.

Related posts:

1. 7 tips on how to raise £100,000 in today’s economy

So, there I was, married. One small child and another on the way within a couple of months.

The call I knew was coming, rang through on the company mobile. I had lost my job and there was no chance of redundancy pay as the company had folded and can we have our phone back please.

As a seasoned sales professional I knew I could walk into another IT sales role fairly easily. However, according to my wife, this was the chance to put into practice the idea I’d been mulling over for a couple of months.

And anyway I’d been selling corporate IT for a decade and never really enjoyed it from the outset. Perhaps a chance for a career change.

I decided the idea had enough innovation and novelty X-factor to be worth a punt, so decided to give it a go.

Now here is lesson number ONE when starting your own business: it has to be you who decides the idea is a good one, it has to be you who has carried out the research and proved to yourself that the idea will work.

You have to be the first person to de-risk the idea and accept that this is the path you are going to follow with focus and determination. Without self-belief how can you possibly convey the emotion in the business to a third party?

It’s all well and good getting excited and hot under the collar watching The Apprentice and Dragons’ Den and thinking that’s easy, if they can do it then I can definitely do it.

The reality is that everyone can have a go at starting their own venture, but a very determined few will actually make it through to a sustainable ongoing business.

So make the decision based on reasoned understanding of the opportunity. Once you have made the decision, stick to it.

Right, that’s hurdle one out of the way.

You’ve decided to go ahead and start a business on your own. Well done. Just a few minor things to do before you can pass go and actually start.

Next you have to sit the wife, partner, girlfriend, boyfriend, husband (or all five) down and explain to them the opportunity, why you’re going to make it a success and how they can help.

If you don’t get the support of your closest allies then you cannot go on. Sorry, it’s just the rule.

It should be easy because by this stage you will have created a simple elevator pitch to clearly and concisely convey the idea to people in about 15 seconds. So 2 minutes 27 seconds later after they close their mouths in amazement at your humanity-altering idea, you should have your first nod of assent.

The slight issue with getting family and friends on your side is that they really want you to do well. “Oh look, we have an entrepreneur in the family, we are so proud, of course you can do it, it’s a great idea!”

Family and friends will always urge you to go for it because they believe in you and want you to do well. The relative closeness may cloud their judgment.

The turning point in my decision to start my venture was to get hold of a mentor. A seasoned professional with real business experience in a similar and non-competing industry who would point out all the flaws as well as boost morale rather than stroke ego.

I found my mentor through a friend of the family. When I spent three hours with him talking through the idea, the pitfalls and the opportunities, I knew I was onto a winner.

You have to decide to go for it, get your family and friends on side but most importantly get yourself a mentor to coach through the good and the bad times to come. Without someone telling you where you could go wrong, you may not know until it’s too late.

Four years ago, our beloved leader, Alex Bellinger, interviewed one Greg Gianforte. By then he’d started five businesses – one went to $10m annual revenue, another to $80-85m at the time of interview. The other three experienced enough success to be sold on.

He believes that borrowing money to start a business is not a good idea, far better to ‘bootstrap’ it using the money generated to help it grow. In fact, he advocates trying to sell your wares before you actually have a product. A few hundred phone calls will tell you whether you’re on the right lines and, if not, where you can adjust your vision to match the market. Make sure, though, that you can deliver on your promises within eight weeks.

Trust Alex to have found Gianforte four years before me. He’s the first story in a recent book called ‘Entrepreneur Journeys: Bootstrapping: Weapon of Mass Reconstruction’, by Sramana Mitra (142 pages). You can get it as a paperback from Amazon US for $16.95 or online for $9.99 at Smashwords.

Mitra mixes her own observations with interviews with a bunch of (mostly) hi-tech entrepreneurs who built their businesses with little or no starting capital. Certainly not venture capital, although a few put their hands in their own pockets, tapped friends and family or went to angels. The general tone of the book is ‘the less funding, the better’.

The book reads like a series of business autobiographies, allowing you to understand the interviewees’ thought processes.

I downloaded the ‘.rtf’ version and read it into Word, from whence I could highlight text which meant something to me and add comments. The conversion from .rtf to Word wasn’t wonderful – some sections appeared all capitalised – but it more or less did the job. You can download in a variety of formats to suit your computer software.

I highlighted 454 bits of text and added 81 comments. Essentially, that’s over five hundred separate mental stimulations as a result of a longish day’s-worth of reading. The comments largely referred to how I intend to do things differently in future, plus insights into my own past successes and failures.

The book has an American orientation, but this is not a reason to reject the lessons it contains. In fact, it’s more a reason to be inspired by the ‘can do’ approach over there. (I was a regular visitor to Silicon Valley for 28 years, by the way, and experienced the culture first-hand.)

Gianforte re-tells his story about how he hired a 48 foot billboard to promote his company right outside the company he really needed to do business with. Within six weeks he’d shipped it a $100,000 order. The client had massive credibility in his market place and, by referencing the sale to new prospects, he was on his way.

Om Malik is a well-known technology writer. In 1999, he thought he’d capitalise on his massive knowledge by becoming an investment manager. Within three months, he realised his mistake. He says, “I think a lot of people do things for money, and it’s the stupidest thing we can do for ourselves.” He went on to create a web-based publishing company, the GigaOM Network, which reaches over three million readers worldwide. He’s probably earning a fortune, but from his first love, writing and publishing quality content.

Rafat Ali, of Paid Content discovered, more or less by accident, the power of a regular, informative, newsletter. Although set up as a web-publishing business focusing on news relating to the economic evolution of digital content, he also published an early morning newsletter of the previous day’s blog posts. At the time of the interview, this newsletter had 50,000 subscribers which gives his company a powerful daily presence in the subscriber’s inbox.

These are just three tiny snippets from the book of a dozen stories, plus Mitra’s essays. Each reader will be stimulated by different things. You might be interested in staffing issues, patents, earnout problems, identifying customer needs, raising capital or something else. It’s all touched on and the stories come from the heart.

Of course, if you have no empathy for American stories or an affinity with the hi-tech sector, then you’re less likely to enjoy the book.

When Apple launched the iPhone and its App Store in iTunes, it upped the ante in terms of what mobile phone applications could do. In July this year the number of iPhone apps downloaded hit 1.5 billion.

Competitors followed suit rapidly and the App Store wars broke out.

Blackberry launched its App World, Nokia its Ovi Store and Microsoft is about to unleash Windows Mobile Marketplace.

So I decided to take a look at the top 5 mobile apps for business on each platform and ask has the mobile world really embraced the needs of SMBs?

iPhone apps for SMEs

Here are the top 5 highest rated iPhone apps for business in Apple’s iTunes store.

1. QuickVoice Recorder – in essence an app to record and tag voice memos. Strangely number 1 in the charts, despite Apple having built a very similar app into the latest iteration of its iPhone software.
2. Griffin iTalk – another voice recording app. Useful for recording meetings and memos. A dictaphone replacement.
3. Mocha VNC – a virtual desktop app that lets you access your work PC or Mac. Seems to be difficult to set up.
4. Remote Desktop Lite - another remote desktop app from Mocha. Only connects to Windows XP. Somewhat limited and surprising to find it in the top 5 most popular.
5. Documents (Mobile Office Suite) – word processor and spreadsheets you can create and edit on the move. Integrates with Google Docs. Used to have the advantage of editing which Google’s own iPhone app didn’t have, but that’s changed recently.

The above list and indeed most of the others in the top 50 all focus on memo recording, remote access, documents and to-do-lists.

All well and good and oh so utilitarian. But then maybe that’s exactly what small businesses really need from their iPhone.

Nevertheless, there seems to be a dearth of creative apps for this audience, bearing in mind all the possibilities the iPhone itself offers from a technological standpoint.

To be honest most of the apps look pretty similar to what I remember downloading on both Nokia and Windows Mobile platforms some 5 years ago.

Why nothing creative from all those cool and talented app designers out there?

But, maybe I’m missing some diamonds in the rough. What are your recommendations for business-related iPhone apps?

Three young men have scooped prizes for best small business, best startup and best entrepreneur at the first Nectar Business small business awards. Among them is 24 year old, Rob Mattham founder of Shiply.com an innovative online transport marketplace.

Other winners include the very well known, but astonishingly young (considering what he’s achieved at just 20) Fraser Doherty of SuperJams who clinched the best entrepreneur award and James Taylor whose business SportStars was named best small business of the year.

Robert Mattham’s startup Shiply.com is perhaps the most innovative and interesting of the bunch.

He discovered that 25% of lorries on British roads run empty every day estimated to be 36 million tonnes of unnecessary CO2 pumped into the atmosphere each year.

Shiply.com, an online transport marketplace, attempts to improve this environmentally damaging situation by allowing users to list goods and eBay items requiring transport which are then bid on by a pool of 3,500 hauliers who may already be making similar delivery trips.

If you’ve ever used a supermarket home delivery service, you’ll know that you can select delivery times to match hours when the delivery van is already in your area. It’s a similar kind of principle.

Robert plans to expand the site to Australia later this year, having already received over 23,000 shipping requests.

Fraser Doherty set up his business, SuperJams, making jam at his grandmother’s kitchen table when he was just 14. Six years on and Fraser’s jam is stocked in all the major supermarkets, selling over 500,000 jars a year.

Finally, James Taylor’s SportStars, which won small business of the year, was set up to provide UK children with quality sports coaching as part of schools’ PE curriculum.

In its first year SportStars grew its school contracts from 5 to 30 and has also developed a subsidiary brand, SuperStars, which aims to provide a similar service for children interested in developing their arts skills.

All in all some great winners and inspiration to the one in four young men who say they would like to start their own business according to YouGov research.

The only question we have about the awards is whether the judges had a predilection for sibilant small businesses?

It may not have been an easy month for manufacturers, but their outlook for production over the coming quarter is more positive than it has been since last summer, according to data from the Confederation of British Industry (CBI).

The CBI’s Industrial Trends Survey shows 32% of UK manufacturing firms believe their output will fall over the next three months, while 24% say it will increase.

The resulting balance of opinion is the least negative since June 2008.

As others have pointed out, the signs of optimism are fragile. A balance of 54% of businesses say their order books are below normal.

In addition, in stark contrast to their German counterparts (an economy which has recently escaped recession), export order book levels also look weak.

Richard Lambert, director-general of the CBI says:

Expectations for manufacturing output over the coming three months are the least negative in over a year. This is partly because many firms have run their stock levels down quite aggressively over the summer, so some manufacturers are now looking to raise production.

Most manufacturers are still expecting to lower prices over the coming months in domestic markets.

[Picture credit: sara~ licenced from Flickr]

Official figures released today show the Consumer Prices Index (CPI) held firm at 1.8% in July 2009, the first time the rate of inflation hasn’t fallen for several months. The Retail Prices Index (RPI), while still in minus territory, also rose slightly.

Data from the Office of National Statistics reveal that downward pressures on inflation were largely exerted by food and non-alcoholic drinks.

Following large price rises in food and drink due to seasonal supply issues last year, the decline in the cost of produce in this area makes sense.

Other sectors to have dropped prices include hotels and restaurants perhaps looking to offer good deals to consumers to make the most of an anticipated ’stay-at-home’ holiday trend – i.e. people holidaying in the UK, rather than abroad.

The RPI rose by 0.2% to reach -1.4% in July compared to -1.6% the previous month.

[Picture credit: Dave McLear licenced from Flickr]

Keeping track of changes to legislation that affect your business often feels like a daunting task. A summary of what you’ll need to look out for from 1st October, the next twice yearly ‘common commencement date’, have just been listed on the Business Link website.

Key changes include:

• companies will only need to make their records available for public
  inspection in one place, rather than multiple locations;
• the national minimum wage (NMW) rising to £5.80 an hour for
  workers aged 22 and above, to £4.83 an hour to workers aged 18-21 and to £3.57 for under 18s above compulsory school age;
• tips paid to a worker through the employer’s payroll will no longer count towards the NMW;
• public companies will need to file their corporate governance statement at Companies House (unless it is already included in the Directors’ report).

Details of the above changes and others can be found at the Business Link common commencement date page.

The site also offers an alert service for more instant updates to give you and your business time to prepare.

[Picture credit: InfoMoto licenced from Flickr]

Social media cannot be ignored as you’ll have noticed, if you’ve been reading the SmallBizPod blog over the last year or two.

Not only does social media offer small businesses an incredible opportunity to reach a global audience, but it also presents employers with potential headaches.

Firstly, the good news: social media can really help you grow your business, interact with potential and existing customers, and draw traffic to your website.

If you look at a start-up such as Swedish music streaming service Spotify as a case in point, it owes much of its phenomenal rise to viral word-of-mouth marketing on social networks, such as Twitter, Facebook and Bebo. I heard of Spotify first via Twitter, not via advertising.

However, there’s no point getting involved with networks such as Twitter unless you’ve a clear plan of what you want to achieve, how you’re going to manage it and what are you going to use it for. Likewise with blogging.

I’d always recommend starting up a blog, for search engine optimisation (SEO) purposes as much as using it as a platform to position your company as a thought leader. But then again, a blog is pointless unless it engages the audience and encourages a response.

It’s also going to have no impact unless you plug it via social media – sites like Twitter and news ranking sites such as Digg and Reddit.

Social media is holistic and, most importantly, it’s a conversation. Marketing is no longer a one-to-many tool, it’s a dialogue. Have a listen to my podcast on social media for small businesses and start-ups for more on managing social media from the outset.

Secondly, the bad news: Social media is also a double-edged sword. As well as presenting companies with incredible marketing opportunities, it also presents a whole set of potential issues with confidentiality and staff trust.

Have a look at this recent case where a girl managed to get herself very publicly sacked for comments she made about her boss on Facebook.

Staff who perhaps are not familiar with things like libel, defamation, NDAs and, judging by the above story, are prone to lapses in common sense could seriously compromise your company’s reputation and intellectual property.

You can’t stop social media – the chances are your staff are on some kind of social network – the best thing you can do is form a policy which they should all be clear on. This post will help you form one.

Social media is here, it’s been here for a few years already and it’s only going to get more powerful, presenting both an opportunity and a threat to small businesses.

The smart firms will see how social media can benefit their business and also form policies to manage the inevitability that their staff are engaging on social networks. With so many things in business, it all boils down to common sense and planning.

James Caan of Dragon’s Den is among those supporting the government-backed iawards which aim to recognise British achievements in science, technology and innovation. These new awards are open to all businesses, with a couple of categories paticularly suited to SMEs.

The Next Big Thing category is for businesses or organisations who have conducted research and development into an innovative product, but have yet to fully commercialise it.

The other category which may be perfect for smaller businesses, is the Best British Inside category. This will focus on businesses or organisations whose innovation created a breakthrough which forms a central element of the success of any other company around the world.

The closing date for entries is 16th September.

Full details on how to throw your hat into the ring can be found can be found on the iawards how to enter pages.

Beware of Marketing and Advertising Salesmen
Everyday (at least until I turned my phone onto answer phone) I get around 10 sales people trying to sell advertising and marketing services of a dubious quality. Be careful before investing in any kind of marketing service as most of them will not be the once in a lifetime opportunity they suggest. Particularly for online services it is reasonable to ask for a trial before spending any money.

Keep it Simple
May people think that to start a business requires an original idea. In his book, ‘How to Get Rich’, millionaire publisher Felix Dennis calls this the fallacy of the great idea. In reality great ideas are few and far between. For every Google there are a thousand similar companies which had what their founders thought were great ideas but have unfortunately been consigned to the dustbin of internet business history. To be successful does not require a novel idea, just a good idea expertly executed.

Learn Search Engine Optimisation
Attracting search traffic from Google is undoubtedly the most cost effective way of marketing a business. Time spent learning how to optimise a website to maximise traffic from Google is time very well spent. Fundamentally, there are two optimisation factors, the content of the website and the quality and quantity of incoming links. Whilst getting onto page one for competitive phrases is very difficult creating quality content and being on the look out for linking opportunities can make a significant difference to website traffic. Remember that each visitor to a website is a potential customer.

Economise
As a start up, money will be tight and it really goes without saying that economies should be made wherever possible, especially in the current climate. I saved thousands of pounds by choosing really cheap office space and outsourcing work to the far east. Instead of employing someone in the UK, I have a full time employee in Thailand who I found through eLance. This works out at around quarter of the cost of a UK employee.

Write letters
Sending letters the old fashioned way via snail mail is a highly effective way of getting a point across. Unlike emails, paper letters cannot be deleted at the touch of a button; they sit around and demand action. When writing a letter I advise going straight to the top and writing straight to the CEO. Be polite but firm and remember that a letter of complaint does not have to be a great work of literature. In the last year I have been refunded £5000 though writing letters of complaint.
Be Assertive
When working with contractors it is important to have a good idea of the quality of the work which you want to delivered. Do not to settle for second best. It is in human nature to cut corners and so go though all deliverables with a tooth comb to ensure that they are up to scratch. With web sites, for example, do not assume that the site has been properly tested, it almost certainly has not!

Watch Your Time and Get Organised
Entrepreneurs have multiple demands on their time and often there will be no one to delegate to. It is possible to waste a huge amount of time though pointless meeting and phone calls. Being disorganised is also the thief of time as it is much more time consuming to correct mistakes than get it right first time. However, by learning time management techniques it is be possible to make a huge impact on personal productivity. The two books I recommend are ‘Getting Things Done’ by David Allen and The 4 Hour Work Week by Tim Ferriss (read Tim Ferris for his ideas about efficiency and in my view, avoid his ideas about business)

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1. Genuine Passion

Make sure your FD is someone with a genuine passion for fast growth. The classic trap is to assume someone with an outstanding large blue chip record is what you need. Watch animation vs. lethargy during the interview process.

2. Bags of Energy

Make sure your FD still has a fire burning in their belly, just like you. It’s no good paying for advice from a 30-year veteran with lots of experience if there’s no longer the appetite to roll up their sleeves and get stuff done.

3. Genuine Experience

Make sure your FD can hit the ground running on day one bringing to bear years of experience in supporting your finance and back office needs. Don’t let your baby be the proving ground for an FD looking for a career change, unless the chemistry is outstanding. Drill hard during the interview process on specific examples of supporting entrepreneurs, ideally in your sector.

4. No Shrinking Violets please

If you just need someone to process transactions, that’s called a bookkeeper. The right FD will stand shoulder to shoulder with you in executing the vision but be a voice of reason for you. Ultimately the decision will be yours but s/he won’t let you make it without a reality check on proposals and projects based on analysis of the numbers.

5. Give them HR, IT, and Admin – it comes with the turf

Choose an FD who can look after HR, IT, and Facilities for you. A good FD typically picks up these back office functions allowing you to focus on sales, marketing and biz dev. Of course, if it takes up more time so you will need to pay but think what it’s costing the business in your time lost on sales and biz dev.

6. Agree the cost. No surprises

Your FD is not your financial advisor or your accountant. Your FD is someone who works inside the business with you working part time initially perhaps charging a reduced day rate based on your size. As you grow, the FD will no doubt need to increase the time involved and may look to charge what the business can afford. They are investing time and money (via discounted rates) in your business, which is a clear signal they are motivated to help you be successful.

7. Sense of humour

Yes, FD’s do have them, well the right ones do. You’ll be spending a lot of time with them. You both need to feel good about the interaction. Make sure you get that ‘warm and fuzzy’ feeling in the first five minutes of the interview.

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UK web startups are like rock bands. Not because they all rock, although some do, but because many want to make it big in the US.

But the British invasion doesn’t look like it’s going to happen anytime soon. Last.FM and Bebo are more like Oasis and Blur, than The Beatles and The Stones. Noticed in the US, but hardly game-changing.

So what of our own backyard, Europe?

Well, I recently interviewed Yann Motte the London-based French, CEO of WebJam who prior to setting up the social network platform with Spanish and English co-founders, spent many years leading business development at Yahoo! Europe.

Yann Motte, ceo of WebJam, bringing social networks to business

A good person to ask about the challenges of building a web startup in today’s post-crunch world, but also a chance to pick the brains of someone who knows all about the cultural challenges of extending web applications and services across Europe.

Building Yahoo! in Europe

Yann joined Yahoo! in 1998 when it was only a few years old. With just 300 people worldwide, he was one of the first business development managers in Europe.

On leaving in 2006, he was VP of Product Management for Europe. By then Yahoo! France alone employed 500 people.

It’s perhaps these early pioneering days that confirmed his taste for starting a business on the web, leading to the creation of WebJam almost a decade later.

As he says:

One of the reasons I joined Yahoo! was because of the amazing entrepreneurial feel, especially in Europe.

As the business grew it inevitably became more corporate and Yann observed, with occasional frustration, the oscillation between US headquarters letting European subsidiaries off the leash only to have second thoughts and rein them back in again.

It’s not the culture, it’s the branding and pricing

Yahoo!’s and Yann’s experience of managing European growth, reflects ongoing concerns about how European web startups can effectively scale across the continent.

Nils Hammar one of the founders of recently sold Kindo, described developing a multi-language site as like “dragging a big heavy anchor behind you”.

And questions about why it’s so damn hard to build trans-national web businesses in Europe was also raised by Sarah Lacy on a panel at the recent Techcrunch Europas.

Yann believes for web applications that are platform based, beyond the obvious language challenge, startup CEOs should spend less time changing the product for different countries and more time concentrating on differences in the perception of the brand and the strength of its competition locally.

This and getting the pricing right for different services in different territories.

And these two elements are the very essence of the European challenge.

Language isn’t a huge problem. Cultural differences aren’t the key. The real challenge for any web company is launching a brand over and over and over again with the right price proposition in each European country. That costs.

Costs that US startups aren’t going to incur in the same way, if they want to reach punters in California, Texas, Nebraska or New Jersey.

Building WebJam

After Yahoo! Yann set his mind on working in a startup environment again.

What he didn’t know was whether he wanted to work for an existing startup, or take on what he describes as the “blessing and the curse” of creating a business himself from scratch.

He chose the latter having brought together a team of co-founders who combine creativity, technology, marketing and business development skills.

A solid foundation for WebJam which acts as a software as a service social publishing platform for businesses and organisations. A Ning for business, if you like.

Tick tock

What WebJam doesn’t have, however, is Ning’s huge VC funded pile of cash ($75 million) in the bank to help navigate the recession and grow through it. It is, however, funded by Versailles-based VC firm I-Source.

Is the timing for such a startup, which counts Random House and Yamaha Music as customers, problematic?

Yann says this is something he’s learned the importance of:

It’s all about now finding the right momentum for the vision we have. What’s always difficult for a startup is the sense of timing.

WebJam is already generating revenue, but he recognises that one of the key issues they need to address before the end of the year is whether and to what extent they will need additional funding rounds.

That depends on how aggressive a strategy WebJam will take. Slower organic growth might be the right move in the current economic climate.

On the other hand Yann sees an opportunity for startups in Europe to grow rapidly across the continent, while many US web businesses are refocusing on their own core domestic markets.

In the short term, however, WebJam’s focus is squarely on building revenues in the UK.

Although marketing budgets may be under pressure at the moment, Yann believes his startup will float on a rising tide of business interest in social media as its ROI becomes better understood.

Buzz and engagement with customers are the most commonly cited benefits of social media. But behavioural data and good old traffic are also important.

Yann clearly sees social media breaking the search hegemony of Google and helping to diversify spend away from SEO and SEM.

Certainly savvy online marketers are going to be looking for alternative ways to spend their online budget to build brand and community as well as immediate return.

With a robust team, VC funding and revenues already flowing, WebJam looks well placed to take advantage of this shift if and when it happens.

As regular listeners of the podcast will know, we’re big fans of business books here at SmallBizPod, so were intrigued to find out which titles had made the cut on this year’s long list for the Financial Times and Goldman Sachs business book of the year awards.

The full list is as follows:

Animal Spirits
George A. Akerlof & Robert J. Shiller (Princeton University Press)

Clever
Rob Goffee & Gareth Jones (Harvard Business Press)

Free
Chris Anderson (Random House UK, Hyperion Books USA)

Good Value
Stephen Green (Penguin Press UK, Grove/Atlantic USA)

House of Cards
William D. Cohan (Penguin Press UK, Doubleday USA)

How the Mighty Fall
Jim Collins (Random House UK, HarperCollins USA)

Imagining India
Nandan Nilekani (Allen Lane UK, Penguin USA)

In Fed We Trust
David Wessel (Crown Business)

Lords of Finance
Liaquat Ahamed (Cornerstone, Random House UK, Penguin Press USA)

The Match King
Frank Partnoy (Profile Books UK, Public Affairs USA)

The Myth of the Rational Market
Justin Fox (HarperCollins)

SuperCorp
Rosabeth Moss Kanter (Profile Books UK, Random House USA)

This Time is Different
Carmen M. Reinhart & Kenneth S. Rogoff (Princeton University Press)

Waste: Uncovering the Global Food Scandal
Tristram Stuart (Penguin Press UK, WW Norton & Co USA )

Why Your World is About to Get a Whole Lot Smaller
Jeff Rubin (Virgin Books UK, Random House USA)

As ever, any SmallBizPod listeners who’d like to contribute a book review to the podcast, perhaps even one or two from the above list, please get in touch. We’ve had some exceptional contributions so far.

With the housing boom, came a boom for tradesman of all kinds and standards. But today, as the recession continues, plumbers, builders, electricians, carpenters and others with trades are finding business increasingly tough.

Nearly 80% of tradesmen have seen customer spend decline over the last 12 months. What’s more the big squeeze is well and truly on.

Haggling down prices, less spending and late payments from customers have combined with tighter payment terms from suppliers to make life extremely difficult for many tradesmen according to a SimplyBusiness.co.uk survey released today.

Nearly three quarters (64%) have experienced a doubling of the number of customers defaulting on money owed for work completed.

Over a third (36%) have also experienced an increase in the number of complaints about their work.

Although there has been an upturn in home improvement jobs as fewer people are in a position to move house, tradesman seem to be taking the brunt of the construction recession.

Perhaps they should take some advice from one of London’s best known millionaire plumbers.

[Picture credit: Rob Shenk licenced from Flickr]

New figures from the The Insolvency Service show the total number of company voluntary and compulsory liquidations rose by 2.9% in Q2 2009 compared to the previous quarter, an increase of 39.1% on the same period in 2008.

Overall there were 5,055 business liquidations in England and Wales from April to July 2009.

Of these 1,457 were compulsory liquidations and 3,598 creditors voluntary liquidations.

In addition the official statistics reveal a further 1,529 corporate insolvencies, a rise of 22.7% on the previous year.

Some small business groups believe the big rise in firms going out of business is due to banks’ failure to lend to the sector.

Phil McCabe of the Forum of Private Businesses said:

A variety of factors are contributing to soaring insolvencies, but they all lead to the same major symptom – a lack of cash … our research has consistently shown that demand for finance is not being satisfied by the supply from lenders.

What is not, of course, clear from the business closure statistics is how many were potentially viable had the credit crunch not combined with a deep recession.

Every business closure is a tragedy.

But in the worst recession the UK’s seen in a generation, the number of businesses closing does not seem particularly surprising or indeed, particularly extraordinary from a historical perspective.

[Picture credit: secretlondon123 licenced from Flickr]

Medium-sized manufacturing firms in the UK are expecting growth to return in the third quarter of 2009, in part stimulated by an improvement in export orders. Other small businesses in the sector are also seeing the rate of decline in orders and output slowing.

Just over half (51%) of SME manufacturing companies saw new orders fall in the three months to end July, while 17% saw a rise, according to the latest Confederation of British industries (CBI) SME Trends Survey.

This is a significant improvement on results from the first quarter of 2009.

Despite a slowing in the decline of confidence, orders and output, CBI figures still show the SME sector suffering.

Volumes of domestic orders remained weak (a balance of -38%) and are predicted to shrink further during the next quarter.

Nevertheless, it’s encouraging to see attitudes shifting, optimism returning, little by little and a real upturn for some medium-sized businesses, especially in terms of exports.

Russel Griggs, chair of the CBI SME Council, said:

So far, the relative weakness of Sterling has not provided firms with much of an export boost. It is therefore encouraging that medium-sized companies are hopeful overseas orders will pick up in the next quarter, helping raise total orders and output.

Green shoots? Perhaps.

[Photo credit: photohome_uk licenced from Flickr]

The global recession may have levelled off with growth expected to return to the economy within 18 months according to the latest survey of international finance professionals. But public sector debt may yet stifle economic growth.

The Global Economic Conditions Survey, published by the Association of Chartered Certified Accountants (ACCA), reveals a decline in business confidence has come to a halt in regions such as Asia-Pacific and in some sectors, including small and medium-sized businesses.

In the UK over two thirds of finance professionals (69%) say the economic downturn has bottomed out – twice the number who thought so in Q1 this year.

Although confidence may have returned, the reality of trading is still very tough.

Accountants focusing on the public sector were particularly concerned by what impact necessary austerity measures introduced by governments would have on public sector spending.

This raises concerns of a double dip recession with the private sector having been hit hardest first, and the public sector suffering once economic stimulus packages are spent and government debt needs to be repaid.

When asked what they thought the economic landscape would look like post credit crunch, these were the top five features identified by respondents:

• stricter and more pervasive regulation, especially of financial institutions;
• tighter credit conditions;
• increased efficiency, as organisations look inward for cost savings and more efficient ways of doing business;
• stronger governance and internal business controls;
• consumers expected to become cautious net savers.

Commenting on the research, Dr Steve Priddy of ACCA said:

While there is little evidence of economic recovery, there is renewed confidence and optimism … given the growing debate about fiscal policy in the UK, it will be important to see some early evidence of whether the concerns of public sector finance professionals are justified.

[Picture credit: j / f / photos licenced from Flickr]

So today Microsoft clinches a 10 year deal which means its recently launched search engine Bing will be used by Yahoo.

In return for sacrificing its second place in the search market behind Google, Yahoo will be able to keep 88% of revenues (for five years) coming from search ads generated by its now Microsoft-powered search engine.

Microsoft's Bing will power Yahoo search. Competition for Google and curtains for Yahoo?

The search business that was one of the cornerstones of Yahoo from its early years is for all intents and purposes no more.

Some, like one of the shrewdest entrepreneurs currently in the search space Mahalo.com CEO, Jason Calacanis, would argue Yahoo has capitulated and is now dead meat.

In an email to members of his mailing list, copied to his blog, he says:

Aggression and innovation wins. Period … To say it clearly: Microsoft does not enter a market unless it’s important, huge and on the way to becoming even bigger. Microsoft is the buy sign, not the sell sign.

He argues the once innovative Yahoo lost its innovative edge, lost its talent and has now lost the plot.

It’s also repeating history, having once allowed an almost unknown (at the time) company called Google to power its search engine.

The logic of Calacanis is hard to contest. Innovation remains one of the most potent of competitive tools for any business large or small, but particularly small.

And small is what his own search/directory hybrid, Mahalo.com is, with a touch of innovation and a lot of iteration, ironically, of Yahoo’s original directory of the web.

When I interviewed Calacanis on SmallBizPod soon after its launch it seemed he might have his eye on a Google sale exit.

Now one search behemoth has fallen perhaps his praise for acquisitive Microsoft suggests the courting of a new suitor. Stranger things have happened.

For the rest of us, bizarrely, two main players in the search space may prove better than three.

Microsoft will undoubtedly drive even more competitive pricing into the search advertising market, if only to needle arch rivals Google.

Survival, not growth is the mantra of British businesses in recession according to the latest annual Entrepreneur UK report from Deloitte which suggests the axe must fall further to cut costs to the bone.

According to the report released today, just over one fifth of firms see no prospect of revenue growth during 2009.

Meanwhile 98% of entrepreneurs and business owners recognise their companies have weaknesses which could readily be spotted and exploited by competitors.

Commenting on the report, Dragon’s Den entrepreneur James Caan takes a Darwinian view:

… after six or seven years of uninterrupted economic growth, companies have become a little complacent. Many have not done enough to improve the quality of their services or products. The market has now moved on and only the best will survive.

A failure by many businesses to slash costs hard enough and deep enough is one of the report’s biggest criticisms.

Two thirds of businesses have identified areas where costs could be cut, but haven’t got around to implementing them yet.

Four out of ten say, if a new owner took over, they’d immediately find it easy to reduce head count and admin costs as well as salaries and bonuses.

Despite the potential benefits of expanding overseas with the pound relatively weaker against other currencies, looking to international markets for growth is not a priority for most.

Nearly two thirds of companies (62%) say the UK offers them the best opportunity for growth over the next three years.

All of which adds up to a slightly bemusing picture. It seems bizarre that so many businesses would have spotted competitive weaknesses and opportunities to cut costs and done nothing about it.

We’d be really interested to know how your business is reacting to the recession. Are you cutting costs? Are you fixing competitive weaknesses? Or are you just keeping your head down and surviving?

[Picture credit: Darren and Brad licenced from Flickr]

If you’re running a small business in the digital space, then UK Trade & Investment (UKTI) and our friends over at Chinwag are encouraging you to be part of the UK presence at two key international trade shows.

Grants are being offered to support funding of SMEs to take part in the UK Pavillion at the eMetrics Marketing Optimization Summit in Washington DC and ad:tech China in Beijing in October and November 2009 respectively.

Funding is being provided as part of UKTI’s Tradeshow Access Programme and is awarded on the basis that participation will have a major impact on the prospects of the chosen businesses in breaking into new markets overseas.

Eligible small businesses have until 5.00pm on Friday 7th August to get their applications in. Full details available on the Chinwag website.

[Picture credit: scorp84 licenced from Flickr]

Much has been written about pollution of the land, sea and air. The problems seem massive and, therefore, seem to require massive solutions. Massive wind farms, massive tidal barrages, massive solar collectors – and that’s just energy capture and re-use. Then there’s massive reforestation, massive carbon sequestration and massive implementation of smart metering.

Okay, enough of the ‘massives’. The point with all these activities is that they are beyond our control. We hope that politicians, businesses and other organisations will find ways of getting together and implementing necessary change. It’s the ‘top down’ bit of sustainability.

At a smaller level, you see major companies churning out their CSR (Corporate Social Responsibility) reports which, in part, show how good they’re being to the planet (not to mention their bottom lines). And these companies, naturally enough, lean on their suppliers to smarten up their own acts. (And that could be you, sooner or later.) But why wait?

Many SMBs are implementing their own measures – monitoring and reducing power usage, improving thermal insulation, cutting travel and so on. The motivation is probably money-saving but who cares? They are potentially making life better for their children and grandchildren.

Coming down a level further, many individuals are trying to ‘do their bit’. But it’s not necessarily easy, at any of these scales, to get it right.

However if, at each level, right down to the individual, we can articulate what we’re trying to achieve, then there’s a good chance that we’ll bring about massive change at the micro level as well as watching it happen at the macro level.

Billions of individuals have the potential to bring as much benefit to our environment as all the global players put together. (Okay, I made that up, but it can’t be far wrong.)

Simon Perry is a great example of an individual who is trying to get his own sustainability act together. Like me, he’s a researcher and an analyst working mostly from home, largely for an analyst firm – Quocirca in his case, Freeform Dynamics in mine. Unlike me, he has disclosed his ecological intentions, so that people better understand where he’s coming from, not least when he turns down visits to exotic (and some not so exotic) places. He calls his private business Thinking String, by the way.

If we were all to start thinking the way Simon does, we could start to bring about a vital ‘bottom up’ reduction in our collective ecological footprint. You may not agree with all his choices, but that’s not the point. His ideas might spark off some of your own.

He admits that his approach is, “by no means perfect, however its the best compromise available to me as a worker and as an individual (and as a family member) for the moment.” This environmental stuff is work in progress for all of us. At least, with him, it is actually in progress.

Taking travel as an example, his order of preference is:

1. Bicycle / walking
2. Public transport (rail)
3. Personal motorcycle or personal car (< 2 litre engine size)
4. Long distance rail
5. Flights (avoid if possible)

He then clarifies his travel motivations by these criteria:

1. I will almost certainly travel to deliver a paid-for engagement of services …
2. I will generally always travel to … educate a good sized crowd of people on a subject related to sustainability …
3. I will generally travel to a … meeting [if it] is entirely focused on a product with genuine potential to reduce emissions.
4. I will merely consider travel to a vendor / conference that has tenuous potential to reduce emissions …
5. I am always happy to participate in a meeting via one form or another of teleconferencing …

By making these, and other, statements about his ecological preferences and motivations, everyone (including himself, his family and friends) are clear where Simon is coming from and can act/react accordingly.

While my own motivations and actions are very similar, it never occurred to me to articulate them the way Simon has. So hats off to him. And may I humbly suggest that we all learn from his example?

You can read Simon's whole statement here.

Bullshit detection is a must have skill for entrepreneurs and journalists alike.

Telling a great story, whether you’re talking something up, or talking something down is also a stock in trade of both callings, if I can call them that.

The Clash - in the garage with their bullshit detector

But to use a few lazy, bullshit stereotypes myself for a moment, entrepreneurs are traditionally seen as optimistic and inclined to exaggerate, while journalists are seen as cynical and inclined to denigrate. Often when the two meet you get interesting results.

Witness the hoo-ha around a story about online angel network Angels Den which appeared on TechCrunch earlier this week.

Sound and Fury

The piece written by freelancer Milo Yiannopoulos, who until recently wrote for the Daily Telegraph, appeared to contain at least one factual error and provoked a storm of comments and counter-comments about the value or otherwise of Angels Den and its move into the ‘digital’ arena following the appointment of Irish opportunist Paul Walsh.

You might think this is all a huge storm in a teacup which incidentally will suit TechCrunch which gets more page views and Angels Den which gets a lot more profile than the Paul Walsh appointment would have received otherwise.

But I think it’s also quite instructive for startups and those writing about them.

Big numbers, big scrutiny

I wrote about Angels Den soon after it launched and was a little cautious in recommending it to readers.

It turns out, however, that two years on co-founder Bill Morrow and his team claim to have completed 157 deals worth £25 million in funding.

They’ve been keen to point out their disruptive startup has rapidly become the most successful angel network in the UK – at least in terms of getting money into the hands of startups and entrepreneurs which is what it’s all about. Genuinely good news.

But inevitably, and I believe rightly, when a startup puts out a story like this the bullshit detectors go up.

That’s not a judgement on the integrity of an entrepreneur, but merely recognition that some people talk up stories more than others.

When you’ve seen and heard as many over-hyped press releases and pitches as most journalists and bloggers have, you begin to realise why their first response is often a sceptical ‘really?’.

Think of it this way: the bigger the number you quote or the claim you make the more scrutiny it’s likely to receive. Don’t quote numbers you wouldn’t be happy to share in due diligence with an investor.

Where Angels Tread

Bill Morrow - co-founder of Angels Den securing significant angel funding for his punters.

In the TechCrunch piece Bill Morrow is quoted as saying Angels Den had “just over 10,000 entrepreneurs looking for money”. Blimey, I thought, that’s a lot of people forking out £99 to submit their business plan and a possible further £400.

On that basis Angels Den would have turned over well in excess of £1.3 million in two years without the recent introduction of a 5% commission on done deals.

So I gave Bill a buzz and asked him about the figure. He corrected my misconception and made it clear only a proportion of those 10,000 had actually submitted business plans, although for commercial reasons he couldn’t disclose the percentage – which to be fair is understandable.

Interestingly from a business perspective, Angels Den, while successful, seems to be doing a lot better for its punters than it is for its own bank balance, which may be why it’s introduced the 5% commission on deals and is looking to target the busy web/tech startup space.

Blog Bullshit

But you need your bullshit detectors finely tuned when you’re reading bloggers or journalists too.

Take my own harmless observation above about Milo Yiannopoulos having ‘until recently’ written for the Daily Telegraph.

This small phrase could provoke the reader to wonder why Milo no longer works for the Daily Telegraph. That combined with mentioning the equally minor factual error in his TechCrunch piece may imply something negative.

In a similar way Milo’s own phrase ‘Something’s going on at Angels Den’ combined with leading on someone quitting rather than a new appointment could be perceived as straight factual reporting or a negative insinuation.

Direct challenge is always better than insinuation in my book.

As for me, well I’ve recently dubbed myself a journalist entrepreneur so, to be honest, I’m well beyond bullshit.

For those that aren’t immersed in news about web startups and the world of social media, you might have missed the biggest story of recent weeks, the hacking of Twitter business documents by a Frenchman dubbed Hacker Croll.

By breaking into a personal email account of a Twitter employee, he was able to infiltrate most of the company’s highly confidential documents, email and other details held on their own servers and in Google’s ‘cloud-based’ applications.

He then passed over 300 of these documents to the world’s most widely read blog about web startups, TechCrunch.

For the geeks among you the fascinating details of the hack were revealed by TechCrunch yesterday.

Twitter security FAIL. But how robust are the passwords of your staff?

Lots has been made of the fact that Twitter’s security house of cards came tumbling down because like many a good web startup the company used cloud services.

Their documents, email etc were all held online on other people’s servers, like Google, rather than on their own hardware in a broom cupboard.

But the reality is it’s people that are the problem, not where your data is.

The key component of Hacker Croll’s successful break in was being able to guess the personal Gmail password of a Twitter employee.

Because, like the huge majority of people, this individual often used the same password for many accounts and also had the answers to additional security questions like ‘what’s the name of your pet’ inadvertantly spread around the web on social networks, the French hacker soon had his hands on Twitter’s crown jewels.

Secure passwords are at the heart of the problem. Most people simply don’t use them, because they can’t remember a four digit pin number let alone unique passwords for every application, computer or web service they’re signed up to.

This is a major problem. And it’s not just online security that suffers in this way.

I used to work at a FTSE 100 bank where everybody in the department had their computer password written down in the team personal assistant’s rolodex.

So how do you improve password security online and off for your business? Here are some tips:

1. establish a password policy for your business to which all staff are required to adhere;
2. encourage staff to use unique passwords for each computer or service they use;
3. make sure all passwords have eight or more characters;
4. do not allow passwords to contain real, comprehensible words otherwise guessing is about as hard as playing hangman;
5. suggest ways to make passwords, long, secure, but memorable: for example pick a favourite line from a song, poem or nursery rhyme and use the first letters of each word to form a password i.e. “You have brains in your head. You have feet in your shoes.” could be Yhbiyh!YHFIy5;
6. remember to mix upper and lowercase characters in the password together with special characters and numbers. In the example above, the exclamation mark is used in place of a full stop (which you couldn’t use in a password anyway) and the last ‘S’ is turned into the number 5;
7. make sure answers to password hints are false i.e. if asked ‘what is the name of your pet’ make sure the answer is the name of a friend’s dog, not your cat;
8. if you really have to write down passwords, don’t store them on a computer, but write them on a piece of paper and put them in the company safe.

Just the above measures will dramatically improve your online and physical computing security, but it’s not an extensive list.

Let us know, if you have any password security tips we’ve missed.

1. Understand your audience

Due diligence is key before pitching for new business. Ensure you understand exactly what the company’s objectives are, and how your services can specifically help them achieve those goals. In addition, if the business has a particularly strong credit position despite a challenging market, mentioning this demonstrates that you make it a priority to research and understand your customers.

2. Promote stability

Big business may have concerns that SMEs are less financially stable and therefore less able to provide a guaranteed level and duration of service. It is vital to quash any uncertainties by actively promoting your business’ financial health and long term plans to prospective clients. Be prepared to lucidly discuss your business plan and structure, noting milestones and targets, making it clear that you are able to partner your clients for the long term.

3. Price sensibly

Prices should be based on your operational costs and must be sustainable from the outset. Companies that win business simply by undercutting the market have a tendency to be unstable and often go bust. Be competitive, but price sensibly to maintain a stable position and demonstrate to prospective customers the your service represents value for money.

4. Prioritise customer service

A good technique is to ensure that your core team are trained to understand as many different areas of your business and the general business landscape as possible, so that when speaking to a customer they can address any question or request directly. A knowledgeable account manager is vital for corporates that demand a quick, responsive service.

5. Innovate

Having a good understanding of your customer base is key to providing a service that is relevant and useful. Ask your customers what additional business requirements they have. By doing this, Opus was able to identify a need in the corporate market for an online flexible energy purchasing platform. This was then developed in house and launched as Opus Evolution in September 2007. This service has since become one of Opus Energy’s leading products, boosting turnover in the past 12 months by 25%. In a competitive market, smaller players need to use their flexibility to innovate and quickly respond to customer needs in order to stay at the forefront of the market.

6. Network

Existing contacts and referrals are likely to make up the majority of good business leads, particularly for SMEs with smaller marketing budgets. Ensure that you are involved in industry business associations. Attending industry events with a demonstrable product is also a good way to encourage interaction with potential customers. Case studies also help potential customers to identify with similar problems that your service has provided the solution for. Corporates are much more likely to consider you as a contender having seen glowing reviews from their peers.

7. Retain customers

Customer retention should be a priority. Face-to-face contact is essential to build and maintain working relationships with corporate customers, as it shows a commitment to their business. It is amazing how few businesses do this as standard. Opus Energy’s high customer retention rate has been achieved by ensuring that account managers travel to their client’s sites for regular after sale meetings and account reviews. The effort should not stop once the sale has been closed, instead it should increase, with each customer being valued as a long term investment.

No related posts.

Do you have what it takes to be successful? Entrepreneur and self-made millionaire Charlie Mullins, managing director of Pimlico Plumbers, reveals the traits that got him to the top.

1. Know Where You’re Going – Set Goals

I was never one for school. I found it just didn’t interest me. So from a young age, somewhere around 8 years old, I immersed myself in work. I began helping out a local plumber and soon found I was hooked. He took pride in doing a good job and was the only person I knew who had a car, and from that moment I decided I wanted one too.

From that point on I have been setting myself goals – and achieving them or getting pretty damn close! If I wanted something, I worked hard for it and I have always known that I didn’t just want success, I wanted to be the best.

I believe having a clear vision for the future and most importantly, never losing sight of it, is a key part of being a successful entrepreneur. That’s not to say goal posts can’t move or change, but as an entrepreneur the key is to always have an objective. And don’t be afraid to challenge yourself – aim high and see where you reach.

2. Know Your Strengths and Weaknesses

If you’re going to succeed you need to play to your strengths, but also be aware of your weaknesses. No matter who you are, you will have weaknesses or areas in which you are less able. The secret is to acknowledge these areas and to work on them, or delegate and use the skills of others. A successful entrepreneur will admit when they have a weakness and take steps to improve or learn, not just when they are starting out, but throughout their career.

3. Spot Every Opportunity

Successful entrepreneurs spot the opportunities – and maximise them. This is really more of an instinct than a skill that can be learnt. It is a mindset of thinking ‘is there an opportunity here?’ ‘how can I use this moment to my own advantage?’ You won’t however spot anything hidden away in an office. You need to get out there – talk to people, network, read, go to events, make calls, see and be seen and you’ll soon find the opportunities. When you spot a gap, weigh it up and make an informed decision on what you could or should do about it. But have the confidence to pursue opportunities. Most entrepreneurs will be risk takers, who haven’t got where they are today without taking a risk.

4. Know Your Business, Your Market and Your Competition

You must know your business inside out to succeed. That includes learning everything you can about your competition, and understanding how your own business measures up against competitors. It also includes knowing exactly where your business stands in the context of the financial goals you have established.

5. Don’t Let Your Finances Get Out of Control

Successful people effectively manage their finances. I have always believed in upholding traditional business values and at Pimlico Plumbers that’s meant I have always strictly refused to ever incur credit debts throughout its 30 year history. Finances can be the downfall of many a business, so you need to know exactly how much money you have, where it is, where it’s going and when it’s coming in. Limit your waste and streamline your business to make it efficient. Restraint is a trait of a successful entrepreneur. For a long time you will no doubt need to plough any and all money you make back in to the business and give up those luxuries, such as holidays, new house or car, until you’re firmly established.

6. Never Settle for Second Best

A successful entrepreneur will want to be the best. They will strive for excellence and professionalism in the service they provide – everything from how they conduct themselves to the standards they set for others. They will also surround themselves with the best. For example, at Pimlico we make sure we get the right people on board and that they stay with us for the long haul. The reason we have such exacting standards for recruitment is that our people are the face of Pimlico and one of the most important things beside qualifications and experience, is whether the customer will feel comfortable with them in their home. Pimlico has built its reputation on positive word of mouth and indeed up to 80% of our trade can be repeat business, as customers will not go anywhere else if you give them the quality they require.

7. Hard Graft

Prepare to graft. Successful people are willing to work long hours, weekends, nights, whatever it takes, because they know it is necessary to move the business forward. This is especially true in the first few years of launching a new business, but has continued for me throughout my business life. You will not be successful if you are afraid of putting in some hard graft.

Above all else, you must feel passionate about what you are doing. It is your self-drive and ambition which will see you become a success or end as just another statistic. And if you’re putting in 60 hour weeks, investing everything you have and own in an idea, then you must be passionate about it. Take satisfaction in the knowledge that you are building a business that is yours, and building a future for you and your family.

Related posts:

1. 7 deadly sins of a small business entrepreneur

Official figures for June 2009 released today show large falls in both the Consumer Prices Index (CPI) and the Retail Prices Index (RPI). The figures raise the very real spectre of deflation with the RPI heading into negative territory not seen since recods began in 1948.

At 1.8% CPI has fallen below the government’s 2% inflation target for the first time since September 2007.

The main downward pressure came from food and non-alcoholic drinks where prices fell between May and June in 2009 compared to increases in the cost of food during the same period in 2008.

David Kern, chief economist at the British Chambers of Commerce said:

Inflation is a longer-term threat which must be dealt with by a credible exit strategy, but this can only be applied when the recession ends. In the near future we urge the Bank of England to increase the scale of quantitative easing well beyond £125 billion.

The RPI, which includes housing costs such as mortgage interest repayments, fell by 0.5% to a record deflationary low of -1.6%.

As we reach the bottom (hopefully) of a credit and bank induced recession, most small businesses want some straight talking.

Straight talking about late payments. Straight talking about cash-flow. Straight talking about the cost of legislation. And straight talking about lending.

When it comes to the government’s £1.3 billion Enterprise Finance Guarantee (EFG) scheme designed to prop up bank credit to SMEs, getting straight answers can sometimes prove tricky, no matter who you talk to.

Time for straight talking about lending to UK small businesses

Media Spin

Take the Daily Telegraph this morning. Its business section slams the EFG for not meeting government targets for lending to SMEs and failing to meet levels achieved a year ago by the Small Firms Loan Guarantee (SFLG) scheme.

The problem is the newspaper seems to bend the facts to suit its story. Firstly, why does it only use figures for EFG lending to end March 2009 when figures to end June or even into July are readily available?

The answer may lie in the fact the complicated EFG scheme didn’t come into force until 15th January. This gives the previous year’s figures an additional 15 days’ worth of lending to assist in making the Telegraph’s case.

How much lending was made under the SFLG during the first 15 days of the year is not made clear, but it would be surprising if volumes were significant bearing in mind the scheme was about to be superseded.

So, let’s divide the figure for SFLG lending in Q1 2008 (£205 million) by the 90 days of a full first quarter to get a daily lending figure of £2.28 million.

Let’s do the same for EFG lending in Q1 2009 (£177.8) taking 15 days away from the 90 days of a full first quarter to get a daily lending figure of £2.37 million.

Hmmm … an increase in lending to SMEs which could blow the story out of the water.

Government Spin

The government’s been spinning the EFG too. Hardly surprising with the master of media management, Lord Mandelson, at the helm in the Department for Business.

For several months the Department was putting out press releases dramatically talking up the numbers in relation to the EFG by being economical with the full facts. Here’s an example from the end of April:

More than 2,500 eligible loans worth almost £290m have now been granted, or are being processed or assessed to assist businesses’ lending needs via the Government’s EFG scheme.

This is as good as meaningless. Applications ‘being processed or assessed’ may not end up receiving the offer of a loan at all.

What we need to know is how much has been actually granted as a loan. After some questioning, the Department did start to release more specific figures.

And the figures to the beginning of July show total lending after nearly six months of the 15 month scheme reaching £364 million. On course for £1 billion by the end of March 2010, but some £300 million short of the total allocated.

The Federation of Small Businesses and British Chambers of Commerce say they want to keep up the pressure to make sure lending keeps flowing. That’s a good thing.

But you might well ask, if small businesses gain in confidence as recession eases, then perhaps demand for EFG lending will slow. Banks not being able to lend the full £1.3 billion by the Q1 deadline next year, may actually prove to be a positive sign for the economy.

Bank Spin

Until then the banks are in a race to prove they are lending more than anyone else to small businesses.

They have their battered images to rebuild and being nice to SMEs right now is vital, although their battered balance sheets may also be a powerful disincentive to lend willy-nilly to meet government targets.

The part-nationalised RBS and Lloyds TSB have quotas to fulfil in terms of the volume of loans they need to place under the EFG. Their hands are forced.

So how much are the big four lenders (who account for 90% of the SME banking market) really lending under the EFG? SmallBizPod has managed to extract the following figures from the major banks for the period up until the beginning of July:

Barclays = £150 million
HSBC = £40 million
Lloyds TSB = £91 million
RBS/NatWest = £190 million

This totals £471 million. The eagle-eyed among you will notice the official figures I mentioned earlier total £364 million for the same period.

So where’s the extra 30% or so come from? Well, it’s down to the banks wanting to make the highest possible figures public by quoting (in some cases) the latest sums ‘granted and in the pipeline’.

Back to straight talking

When all said and done, what matters is whether viable small businesses have access to lending when they need it and under what terms.

For example, where no other security is available, personal security is still often required by banks under the EFG, contrary to some suggestions when the scheme was launched.

With the trend in house prices down, this may be a more important restricting factor for many than the volume of lending available itself.

1. Serviced Offices

As a small business looking for office space, serviced offices can offer a flexible solution. Contracts are available for rooms from 2 people up to as many as 200 and term length will normally start at 3 months so you can choose how long you want to commit for. Operators will often offer discounts based on term length – the longer you commit for, the better the price. Office space is provided fully furnished and the centres will be manned with reception staff.

You can go direct to the large operators such as www.regus.com, www.avanta.com and www.mwbex.com or there are some smaller, independent centres which are less well known but can often be hidden gems.

A good way to find the small operators and to assess your options is to use a serviced office broker. These are essentially online agents who will provide you with a list of every operator in your requested location. You choose the centres you are interested in and the operators will then contact you to arrange tours. If you ultimately take space then the broker will receive a fee from the operator. There is no cost to you.

Serviced office operators will typically charge per person per month and prices in London will vary from £350-£1000 + VAT. The smallest office that most operators will offer will be for 2 people. When choosing a centre make sure you take a look at potential “hidden costs”. Operators will nearly always charge for internet connectivity, telephone line rental, telephone call charges and sometimes, handset rental.

The best brokers are www.instantoffices.com, www.easyoffices.com and www.searchofficespace.com.

2. Homeworking/Virtual Working

For many, office space will be surplus to requirements and home working from your living room/spare bedroom will suffice. Should this be the case, why not consider a telephone answering and mailing address service which could help give you a more professional image.

Telephone answering services such as www.kendlebell.co.uk and www.moneypenny.com will answer your calls when you are out of the office or on another call. They will then forward you any messages via text or email, depending on your choice. At the end of the day, you will receive a summary of all your messages. Prices are normally set within monthly packages that will include a certain number of “answered calls” per month. These packages can vary enormously but £50-£100 per month for a user is not uncommon.

Mailing addresses can be hired for those companies looking to give off the image of having a city office. The companies that provide this service will receive your mail and then keep it for collection or forward it depending on your requirement. Prices will start at approximately £25 per month. Don’t forget these kinds of service are also available in all major cities overseas which would make it easy to set up virtual bases in a number of different locations.

All serviced office operators will offer this service but you can also consider www.mailboxesetc.com.

3. Meeting Venues

Most homeworkers are more than happy to work from home but they will not meet people at home. For these people there are a couple of options available. The first is to join a members club (see below) and the second is to hire meeting rooms on an ad hoc basis. All the serviced office operators (listed above) will offer meeting rooms for hire but will normally price out small businesses who need a room for a couple of people for a couple of hours.

However, there are some options which cater specifically for small businesses: www.hubworking.net, based by Liverpool St and Monument in the city of London, offers meeting rooms at £8 per person per hour and is thus very popular with coaches and consultants. www.e-office.net offer a similar service for companies looking for space in Soho.

4. Members Clubs

Many small businesses owners are joining members clubs in central London as they provide a good place to meet clients/partners/suppliers etc.

Clubs such as www.adamstreet.co.uk, www.iod.com and www.thehospitalclub.com offer open plan rooms where business people can meet and work. Subscriptions are normally charged annually and will cost from £300 upwards.

5. Convential Leasehold Office Space

For small businesses conventional leasehold space will normally be too big a commitment. Landlords will usually be looking for a 5 year minimum term and a fairly hefty deposit depending on your financial covenant.

When taking on a leasehold you will become responsible for business rates, service charges, building insurance, facility management, security etc and therefore the “hassle factor” is high. The leasehold is not a realistic option for startups and is best left for businesses that have grown to 30+ employees.

Nevertheless, some conventional commercial property firms are www.struttandparker.com, www.cbre.com and www.joneslanglasalle.com

6. Managed Office Space

Managed office space is a basic form of serviced office space. Rooms will be provided fully furnished and prices will be charged monthly on an inclusive basis. However, IT will be organised by the tenant and there will be no reception staff to meet and greet guests or to answer telephone calls. Try www.hubworking.net for managed office space by Monument station.

7. Office Sharing

A low cost option for startups looking to keep their costs low is to share an office with a company which has spare office space.

The best way to find these opportunities is to look on www.gumtree.com or www.deskspacegenie.co.uk

Costs will vary but can be as low as £300 per desk per month.

No related posts.

Optimism is returning to the small business sector with over half expecting to expand over the next three years, according to the Quarterly Survey of Small Business in Britain, the longest standing survey of the sector set up by the Open University in 1984.

Although nearly half (49%) the small firms questioned had seen sales fall over the last 12 months, fewer expect to cut staff and 62% have made no employment changes during the same period.

Of the 50% who are most optimistic about the future, 34% had bucked the prevailing trend and seen an increase in sales over the last year.

Professor Colin Gray, professor of enterprise development at the Open University Business School, says:

These second quarter results show the mood of UK small businesses as one of cautious optimism. The decline appears to have slowed and may be levelling out and points to small businesses having a very different experience of recession.

Despite these possible green shoots, the survey highlights how the recession may have had an impact on the ambition of Britain’s SMEs with 37% saying they have now set only modest growth targets, while 32% aim to keep their businesses the same size.

When asked what were the biggest factors affecting business at the moment, the economy and lack of demand topped the list of concerns (61%) with cashflow, late payment (33%) and government red tape (31%) following on.

[Picture credit: lrargerich licenced from Flickr]

Straight from the TechCrunch Europas awards ceremony come the results of the winners in each category. SmallBizPod hopes to be able to grab a few short podcast interviews with winners during the night, so keep an eye out for those.

The Europas Shortlist: Best Web Application Or Service (EMEA)

Spotify

The Europas Shortlist: Best Design

SongKick

The Europas Shortlist: Best Bootstrapped Startup (less than 3 years old)

Soup.io

The Europas Shortlist: Best Social Innovation (which benefits society, EMEA)

Mendeley

The Europas Shortlist: Best Enterprise / B2B Startup (EMEA)

Huddle

The Europas Shortlist: Best Cleantech / Environmental Startup (EMEA)

Alertme

The Europas Shortlist: Best European / Real World Gadget (EMEA)

Poken

The Europas Shortlist: Best Entertainment Application or Service (EMEA)

SoundCloud

The Europas Shortlist: Best Mobile Startup (EMEA)

Nimbuzz

The Europas Shortlist: Best Mobile Application (EMEA)

SpinVox

The Europas Shortlist: Best Startup Founder(s)

Daniel Ek & Martin Lorentzon

The Europas Shortlist: Best Investor (VC or Angel fund, EMEA)

TAG The Accelerator Group

The Europas Shortlist: Best Investor Personality (EMEA)

Yossi Vardi

The Europas Shortlist: Best New Startup, Summer 2008-2009

Spotify

The Europas Grand Prix

Spotify

One of the most prestigious awards for UK businesses of all sizes, considered by some as a knighthood for a company, the Queen’s Awards for Enterprise will be open for entries from 20th July with winners announced on 21st April 2010.

Entry forms can be downloaded from the Queen’s Awards website and should be submitted by 2pm on 30 October 2009.

Any UK-based business with two or more employees demonstrating outstanding and sustained commercial success can enter the awards which have three categories: International Trade, Innovation, and Sustainable Development.

From 20th July nominations are also being sought for The Queen’s Award for Enterprise Promotion (QAEP).

These Awards recognise individuals who have found inspiring ways to encourage UK entrepreneurship.

Just over two fifths (42%) of finance directors in small to medium sized businesses in the UK say the weakness of the pound has had a serious and significant impact on their business, according to a survey released today.

Moneycorp, which commissioned the survey of 500 decision makers in SMEs across the UK, says that 30% of businesses rely on imports which on average make up 20% of their costs.

Currency fluctuation and a vulnerability in sterling therefore creates a problem for importers, particularly as 40% of larger SMEs say that they do not directly protect their exposure to currency risk.

For many, of course, the cost and volumes required to hedge currency will outweigh the benefits. Nevertheless firms with larger turnover may be missing a trick with 30% of finance directors acknowledging their lack of understanding of currency risk had hit the bottom line.

UK exporters by contrast have found a weak pound a godsend, creating new opportunities in international markets. Indeed the government is encouraging export-led recovery from recession with the UKTI (UK Trade and Investment) playing an active role.

Nevertheless, recent steep climbs against the dollar for example (up 11% in one month) and ongoing volatility mean that even exporters may be vulnerable to swift movements in currency, despite the pounds inherent recent weakness.

[Picture credit: computerjoe licenced from Flickr]

How did this happen? That feeling of being, well, not quite as young as I once thought I was? Don’t get me wrong, I’m not old – at least this is what I tell myself. I’m just about clinging onto my 20s – granted the thread is precariously thin – but it’s still there. Just.

It’s more that as I reach 30, I suddenly realise my only assets are four bicycles (which I love dearly) and I am very definitely not the co-founder of a fresh new start-up.

The cause for this day of dawning? A meeting with Anna Lewis and Oli Brooke of CompletelyNovel – an online publication platform that allows writers to promote books, and publishers to see how the market receives them – virtual market research.

The young entrepreneurs behind CompletelyNovel.com l-r Jon Gilbraith, Vincent Peresl, Oliver Brooks, Anna Lewis

Both mid-twenties and graduates of Cambridge University – Anna in Law and Oli in Engineering – the pair co-founded the company after Oli saw an opportunity to disrupt the publishing industry.

Writers can use the site to catapult them into the armchairs of publishers, without the cost of printing endless manuscripts (many of which no doubt go unread).

CompletelyNovel.com has therefore inadvertently found itself with enviable sustainable credentials, while at the same time opening up a large door into a notoriously impenetrable industry.

Suddenly the sky for would be writers seems the limit.

When asked about previous entrepreneurial ventures, it is soon clear that for Oli, enterprise is in the blood. His first lesson in price placement came after the completion of a piece of software to design helical staircases.

With his father, a joiner, they bid for a contract with Dukes Mews, only to find they had won as their bid had been so low. Nonetheless they still made a profit. For Anna, CompletelyNovel seemed like a suitable challenge after a few years with the Foreign Office.

Let’s not forget, however, that CompletelyNovel is a team of four, and it is Jon Gilbraith who tirelessly builds and maintains the site with Vincent Peresl.

The concept seems to be working and their grasp of bootstrapping is refreshing. They clearly understand what to spend, when.

Don’t get me wrong, they aren’t out buying fast cars, nor are they rewarding themselves with six figure salaries, but I get the feeling that when Oli mentions ‘keeping things lean’, he means they at least pay their rent and eat without the need for personal overdrafts.

As I sit on the sofa in their North London home office, it’s apparent that these four mean business. They eat, sleep and breathe the business and it seems to be paying off.

While publishers are trying to grasp the move to digitising content, the trio have provided a platform where not only can writers sell their creations, they can connect with the rest of the industry and will eventually provide print on demand.

They have competition – Shelfari for instance is an online community with a book focus, and Lulu a marketplace for books – but there are no other sites linking the whole of the industry in one social place.

My only concern with their present concept is their lack of access to products like Amazon’s Kindle and the Sony E-Reader which could dramatically change the way people consume literature.

For the time being at least, users of CompletelyNovel can only access books online, but once they establish a way to ensure writers do not relinquish control of their works the company may even be able to start selling books to people on the move direct to their portable device of choice.

The company already makes a trickle of profit – which quite frankly is a great success for most internet companies these days, let alone such a new one.

And with an eventual premium model in place, a community and its comments broadcast to all and not just those that are following a particular author (think Twitter), I would happily stake my four bikes on the fact the wheels won’t fall off this particular venture any time soon.

In radical proposals the CBI is calling on government to overhaul employment legislation at what it describes as a critical time for the UK economy.

Among the ideas presented is a scheme designed to provide employees with an option to take time off work for a period of six months, rather than being made redundant.

People choosing to take up to six months off work, under the ‘alternative to redundancy’ (ATR) scheme would receive twice the level of job seekers’ allowance they’d be permitted if made redundant, split 50/50 between the government and employer.

Employment legislation has added over £70 billion to business costs since 1998, according to the CBI, and action to address this burden is required quickly as the organisation predicts unemployment in the UK will reach 3.03 million by the second quarter of 2010.

John Cridland, CBI director-general, said:

The worst of the recession may be over, but businesses still face a long convalescence and the dole queues will continue to grow. The alternative to redundancy scheme could save jobs by giving businesses more leeway as the economy recovers.

Employers and employees have shown extraordinary flexibility and co-operation in trying to protect jobs over recent months.

The CBI appears to be trying to formalise some of the schemes created by individual companies on an ad hoc basis, while clawing back some of the costs of legislation introduced over the last decade.

How likely is an ATR scheme to take off with government backing? The words pigs and fly seem appropriate.

[Picture credit: Justin Cormack licenced from Flickr]

The ripple effect of late payments could be costing British businesses as much as £2 billion a year according to research released today which shows that for 1.35 million firms, one late payment instantly affects their suppliers.

The time devoted to chasing late payment has also increased during 2009 with 52% of small business owners saying it’s taking them longer to persuade customers to pay up.

The research of 876 businesses conducted on behalf of Bibby Financial Services found that 12% were spending three days or more a month chasing late payers.

These figures support data released earlier this year by payments system BACS which showed SMEs are owned £25.9 billion, up 40% on 2008.

In order to cover the shortfall created by delays in payment, small businesses are resorting to bank overdrafts (20%), loans from friends (10%) and family (10%), drawing on savings (5%) and in some cases using personal credit cards (3%).

All in all disappointing that more businesses of all sizes aren’t recognising that paying promptly is going to benefit all of us, but a sign of the times.

[Picture credit: laRuth licenced from Flickr]

If you’re a first time entrepreneur looking for VC funding right now, then forget it.

Julie Meyer rallying entrepreneurs

That, to put it bluntly, was the message coming from a panel of esteemed venture capitalists and investors at last week’s Entrepreneur Country event hosted by online Dragon and Ariadne founder, Julie Meyer.

VCs are more worried about exits than they are about deal flow and business angels are on their knees as most have seen their personal wealth shrink dramatically over the last 12 months.

To be fair, as Dharmash Mistry at Balderton Capital rightly pointed out disruptive ideas and entrepreneurs will always find capital and the two largest VC funds in Europe have recently raised $1.5 billion.

Nevertheless this isn’t any consolation for startup virgins.

As Nic Brisbourne of DFJ Esprit put it:

I have a strong personal conviction that there are good opportunities going unfunded. The VC industry has yet to show a consistent ability to generate good returns in Europe.

But despite all this, the mood at the event was overwhelmingly positive. And I began to start thinking less money = good news.

It is after all only going to accentuate one of the sharpest and most important of entrepreneurial skills – resourcefulness.

In many ways I can see the crisis of capital creating a new generation of dynamic, nimble, revenue focused entrepreneurs and small business owners. The very people Julie Meyer is appealing to in her recent ‘individual capitalism’ rallying calls.

The second theme I took away from Entrepreneur Country was speed.

Speed as rapid, agile action and speed as often irrational gut instinct. The instant slicing and dicing of Malcolm Gladwell’s Blink.

Whenever you talk to investors or listen to a panel of VCs, it becomes very obvious that most investments hinge on gut. That split second, sub-conscious feel for the people behind an idea or a business.

It’s an area, of course, where investors and entrepreneurs are perfectly aligned. Both act on instinct often, both get it wrong often. So fail fast is the mantra and rightly so – or at least much of the time.

Which brings me on to the other speed.

One of the more esoteric, but nonetheless interesting speakers at the event was former editor of Business 2.0 and The Harvard Business Review, Tom Stewart.

Tom talked about five key forward-looking themes for businesses of all sizes. Among them was speed – the fact that businesses no longer have time to rest, let alone to rest on their laurels. As he said:

Speed is necessary, but speed kills.

Who does it kill? Well potentially the slower, bigger companies. And that’s where startups and smaller businesses can step up to seize new opportunities.

But particularly in the world of the web, there’s also an ever increasing need for ’speed to scale’ – at least if the VCs are to achieve a worthwhile exit.

And in that case not being able to keep up can kill off startups, just as much as monolithic corporate monsters.

As Tom Stewart pointed out somehow we’ve got to balance speed with the important task of letting things emerge – listening to the traffic, if you like.

Otherwise we’re never going to be able to make a decision about an event or an opportunity we simply couldn’t have foreseen – leading in uncertainty when decisions are beyond calculation.

What’s this got to do with startups, small businesses and VCs for that matter?

Well, uncertainty is where the opportunities are and the world seems to be blessed with an abundance of uncertainty right now.

Exciting, challenging times, but let’s make sure we also pause to reflect on what we’re trying to achieve while we’re racing towards new horizons.

Jeremy Ettinghausen, head of digital publishing at Penguin, and Tom Thirlwall, managing director of small creative agency, MWorks, appeared recently in a session called ‘Alchemy, Chemistry and Collaboration’ at an event run by b.TWEEN. They thought they’d like to create a document about collaboration by collaborating with the audience. This was to be done using a rather nifty online collaborative editing application called Etherpad. The audience had other ideas but, as the discussion proceeded, it became clear why collaboration can’t be forced.

Referring to a 2007 collaborative book-writing experiment as a way of opening the discussion, Ettinghausen explained that Penguin got over 1500 people to collectively write a novel using a wiki. All of the contributions were anonymous so it meant that some well known writers could participate without risking damage to their reputation by association. This was just as well, because the end result was not at all good. He said it has been called, “not the most read, but the most written” novel in history.

However, Penguin learned a lot about collaboration which it has applied subsequently. In the case of the book, though, the question that hadn’t been asked was, “what was in it for the contributors?” And the answer was, “not a lot”. They got to exercise their writing skills and, presumably, saw what others made of them. So they learnt something. But the anonymity meant that no-one could see that they’d participated or, maybe, written a particularly scintillating chapter. The bottom line for these things is that everyone has to be a winner in some respect – learning, revenue, PR value, establishing new business relationships and so on.

Many organisations no longer have all the talents they need in-house, so collaboration with third parties, especially small businesses, is increasingly the case. Project team members can come from several organisations, large and small. And these projects, ideally, have a life of their own which is an obligation to meet certain agreed objectives but remain largely independent of their own organisations.

What turns out to be far more important than the contractual agreement is the chemistry between the participants. Figuring out whether a collaboration is likely to work owes more to flirtation and courtship than to project planning. The participants have to respect, like and trust each other. If not, the cracks will show as the project nears completion.

One audience member drew a distinction between the participants and the organisations they worked for, especially when it came to meeting up. He wondered if ‘neutral territory’ was important. (In the university world, for example, politics gets in the way. Hosting meetings gives a power advantage to the university, even if the project team couldn’t care less.) The speakers suggested that the money spent on such neutral venues, hotels and the like, would be better spent on content and product. They suggested that organisations need to empower people to be part of the project and not be a spokesman for their organisation.

Discussions about the causes of collaboration breakdowns followed and, fundamentally, the issues came down to clear initial objectives, an understanding of the benefits to the individuals, periodic reminders, continuous dialogue and meet up when possible. Not so different to an internal project really.

In wrapping the session, the speakers summarised the key elements for successful cross-organisation collaboration and took a few extras from the audience:

From the speakers:
- A need for the project (collaboration for its own sake will fail)
- A good chemistry between the participants
- Shared needs
- Mutual respect
- Leave egos at the door (acknowledge own strengths and weaknesses)
- Ongoing communication
- The right tools (Twitter, Huddle, BaseCamp, phone conferences, video conferences, phone calls, meeting up. Ettinghausen found phone conferences particularly bad.)

From the audience
- Clear objectives
- Ownership (who knocks heads together if things go wrong)
- Lots of decent human beings

A video of the session is on blip.tv

The recession has seen businesses putting expansion plans and financial investments on ice, however the one thing a small business should always keep warm is its relationships with customers and prospects.

The economic climate has encouraged businesses to become far more value orientated and companies are keen to make sure their marketing activities and budgets are drawing maximum returns.

However, by putting too much focus on marketing to gain immediate returns, businesses risk falling behind their competitors when the economy picks up.

By concentrating on long term as well as short term relationships with prospects, businesses are ensuring they are in the front line when customers are looking to invest once more.

When a new prospect is first identified and engaged, they are probably still in the research stage of the purchasing decision and not yet ready to talk fully with a member of the sales team.

It is crucial to nurture these leads, develop relationships and collect data during these early stages of research. The stronger your relationship is with a prospect, the better positioned you will be to apply this knowledge and offer them services and products they might actually want at an appropriate time.

SMEs have the potential to enhance their customer relationships, and therefore their data, with every communication sent out. So make sure each one counts.

Collecting and maintaining good data should be considered a strategic move allowing you to deal with current customers better and enable you to address the potential needs of prospects. Any touch point can be used to collect information including mail-outs, click-throughs and white paper downloads.

To avoid putting strain on new relationships and alienating potential customers, SMEs should aim only to ask questions to which the answers will be beneficial.

To work out which questions are most important to ask, a business will first need to establish what its desired outcome will be and work backwards to see the fewest questions that can be asked to gain this information.

By using prospects responses, data from any contact points and applied customer analysis, companies can predict what a prospect (or an existing customer) could buy in the future rather than purely concentrating on what they might buy tomorrow.

A relationship developed over a period of months, or even years, rather than just a few weeks will be in a strong starting position when prospects are again ready to purchase.

No one goes into business thinking “I want to be a middle manager – then I’ll have succeeded”, and the truth is that pretty much everyone within an organisation has thought at least once that they could probably do a better job of running their company than the Chief Exec.

But as George Bernard Shaw famously mused, “There are two tragedies in life. One is to lose your heart’s desire. The other is to gain it.” And at no time is this more true than when that final promotion happens and you find yourself sitting in the CEO’s office.

For usually confident, high-flying business people, it can be a significant shock to the system to realise that being the CEO hasn’t made them quite as happy as they thought it would during all those years of hard slog and shameless corporate ladder-climbing. So what has changed?

Often the job is fairly familiar even if the responsibility has grown. And their ability is still the same. The difference in most cases however is that ‘staff’ – even if you’re towards the top of the management tree – usually stick together, whereas the CEO? Well, mostly they’re on their own.

Almost every CEO describes their role as lonely in some ways, with the main reason being that they feel they cannot share all their fears with their colleagues or their board members.

They feel they are expected to know all the answers, show no fear and stay positive at all times, otherwise their authority will crumble and their business will do likewise. But as another great writer, John Donne, said: “No man is an island”, and this goes for the CEO as much as the rest of the organisation.

There are numerous reasons why the CEO might feel they have been backed into a rather lonely corner, but often it is because they haven’t hired colleagues of the right quality or don’t have the right board members in place.

Just as Obama and even J-Lo are surrounded by their own coterie of trusted advisers, supporters and ‘do-ers’, so a CEO needs to make sure that they have the back-up of their colleagues. Crucially, this does not mean you want an entourage of ‘yes-men’.

By involving your colleagues in the decision-making process, decisions are of better quality and are implemented with greater commitment and passion, and as the CEO you can be confident that you are being balanced as well as supported by your team.

Sharing your problems and concerns is not a weakness, and in the long run it will actually earn you trust and respect. Build up a culture of openness and lead by example by engaging with the business and consulting the team on matters of importance.

Concerned that sales have taken a nose-dive? Talk to people and find out what can be done about it. Sitting alone in your fancy office stewing about a client complaint? Share it with the team and ask for their help in resolving it.

It may be a cliché but a problem shared really is a problem halved, and the sooner you can make this part of the way you work, the sooner you’ll really start enjoying being the CEO.

It’s always intriguing to see how startups and particularly web startups refine their sites and their business models.

And these shifts in priorities are thrown in to stark relief for web businesses like Bview and Cmypitch.com which launched mid-2008 by the full horror of the financial crisis which hit our TV screens and VC funding last October.

It now looks like the Web 2.0 sensibilities of user generated content and community are giving way to ‘where’s the revenue’ as people realise only sites the size of Facebook and Twitter can afford to make no money.

Runways are considerably shorter than they used to be.

When Bview launched in the Spring/Summer of 2008 it seemed set on being a UK Yelp! with networking, local small business reviews and the added hard edge of Experian credit data leveraged by its parent price-comparison company Xbridge.

Bview's design is not a thing of beauty, but is the local business site sitting pretty after a revenue rethink?

Then today I receive a press release which describes Bview as the UK’s largest voucher search engine. Whoa … not what I was expecting.

So I quizzed co-founder, Colin Bruce, about the shift in emphasis. He said:

We looked at what businesses really wanted and thought about what new features we could add. There’s a lot going on in the affiliate space, so it made sense to do something in that area and in essence we’re developing a voucher aggregation site.

The reviews or content element of the site are seen as a commodity to help drive traffic towards the revenue generating vouchers.

Although vouchers from large retailers predominate at the moment, Bview is still very much positioned as a site focusing on the ‘local’.

The announcement today, for example, promotes the fact that Bview’s vouchers will be displayed on Google maps allowing small businesses to offer discounts to a very focused online audience.

An interesting model which as Bview builds out its APIs is likely to create partnership opportunities with other search engines and price comparison sites.

Cmypitch has also had a radical overhaul.

Cmypitch looks a lot clearer than it did at launch, but will it have the traffic to make affiliate revenue count?

At its launch Cmypitch.com seemed to be a UK version of Vator.tv, a place to pitch on video for funding and clients – plenty of user generated content combined with networking, forums and editorial. That said, the homepage design was extremely confusing.

As Ian Wallis at Cmypitch admits:

We always had lead generation services on the site, but the homepage was far too confusing and the navigation didn’t make much sense. So we decided to switch to a much more product focused site.

Cmypitch hasn’t just reworked its site, it’s reworked its business model by focusing, like Bview, on a share of affiliate revenue from offering small businesses special deals and price comparison.

The original subscription-based model, asking small businesses to pay up front for potential leads, wasn’t proving popular as the recession started to bite.

Building traffic to the site to build revenue is a priority, but Cmypitch is also exploring white labelling and syndicating its deals and quick quotes services to other sites to extend distribution.

Both sites offer a web startup story for our times.

Revenue is very much the new ‘pre-revenue’.

Yes, Yasmina! From the moment I saw her in action in weeks one and two, she was my hot tip to win this year’s Apprentice.

And so it proved in tonight’s final when shrewd business instinct, rather than polish, clinched the Reading entrepreneur and restaurant owner a job with Sir Alan Sugar.

And I’m so happy. Not just because I guessed right, but because Yasmina’s win is a win for startups and small business owners around the country.

Yasmina Siadatan - winner of The Apprentice 2009, giving up grim-faced determination for a touch of glamour

In choosing one of the very few candidates to have built her own business up from scratch, Sir Alan again showed that he and his business values the entrepreneurial over the corporate.

Ultimately Yasmina was clearly going to appeal to the soon to be ennobled business tycoon when you read what she’s quoted as saying from the outset on the BBC website:

Business is about a simple formula. Make more than you spend. That’s what I do, I keep business simple and it works. I’m good at it.

Very business savvy, very focused, but also despite her grim-faced determination, outside the boardroom she clearly knew how to have a good time and was liked and respected.

Kate Walsh put in another polished and very impressive performance and like Debra Barr the week before was unlucky not to taste victory in a challenge that pitted the two young women against each other to design and launch a new brand of chocolates.

Kate went upmarket with a box of chocolates for him, for her and to share. Brilliantly executed and presented and only just saved from being called ‘Intimate’ thanks to Debra who joined Kate’s team along with Ben, Kim and Rocky.

Nick gave his verdict on Kate’s first name for her chocolates: ‘frankly it sounds like something to do with feminine freshness’. Mouthy Debra, put it more succinctly – ‘oh my god, it looks like a box of tampons’.

And in so doing she saved Kate from a huge error as the team rapidly came up with the rather good ‘Choc D’Amour’ in just a few minutes before the deadline to confirm packaging design.

Yasmina also escaped certain death in the boardroom, by bravely giving up on a frankly idiotic idea to create a new range of chocolates exclusively marketed to men.

The moment that convinced her ‘man chocolates’ were a bad idea was when Philip, who’d joined her team along with Howard, Lorraine and James, suggested, like ‘pants man’, people would come around to the idea.

It was good to see Philip back. Most of the comedy in this final episode was his. Taking charge of choreography for a dance troupe for Yasmina’s launch event was a sight to behold, only narrowly bettered by his original pants man gyrations.

Yasmina’s Cocoa Electric chocolates, all electric shock, shocking pink and electrifying taste sensation, was all very retro with danger written all over it in a very 80s Duran Duran video kind of way. A fact confirmed when we caught a glimpse of Philip with a shocking pink thunderflash painted across his face.

Kate’s overall presentation and TV ad, in particular, outshone Yasmina’s. But Yasmina got price right again, bringing her chocolates in at £6 per box, compared to Kate’s £13.

Sadly, the chocolates tasted as shocking as the pink in which they were packaged. But in an echo of the catering task when Yasmina bought poor quality food and successfully achieved a huge margin, it was that simple business principle that won the day.

Ironic that the woman whose restaurant is by all accounts really rather good, should have won by literally sacrificing taste for short term profit.

Some will argue the short term, quick buck mentality is a short-coming of The Apprentice and its series of reality TV business challenges.

In fact the real business lesson from this year’s series, is Yasmina’s dedicated focus on her customer – namely Sir Alan Sugar.

She clearly knew her business flare would appeal and did everything necessary to deliver it in a way that would catch Sir Alan’s eye.

A good winner who I bet will return to her own successful entrepreneurial venture a year after spending time learning all she can from Sir Alan’s organisation. A smart cookie.

Quote of the week, from Sir Alan himself: “They weren’t shocking flavours, they were shocking chocolates”.

Business lesson of the week: know your customer.

It’s been a great first few months for SmallBizPod Sevens with over 100 contributors signed up and lots of excellent advice and tips uploaded. Now for news of the first Sevens winner.

Every four months (rather than once a quarter – apols for changing the goalposts slightly!) we’ll be giving the #1 contributor to SmallBizPod Sevens an iPod Touch and £100 to a charity of their choice.

The winning set of tips is based purely on the number of times the article has been read and voted on according to the analytics on our site.

And so, for the period 15 January to 15 May 2009, here are the top 7.

They’re all good to read, with some great practical advice, so do check them out, if you get a chance. Also I hope they might inspire you to offer up your own advice for start-ups and fellow entrepreneurs

1. 7 practical tips on marketing your small business website

2. 7 things you need to know about ebid

3. 7 tips on business advertising on Facebook

4. 7 quick business networking tips

5. 7 tips for implementing effective health and safety

6. 7 things to consider before starting a business

7. 7 tips for a successful franchise

So there we are. Joe White wins an iPod Touch and £100 to donate to a charity of his choice.

If you’d like to contribute, do check out all the details on how to upload your business tips here.

No related posts.

I’ve been away on holiday and missed a few episodes of The Apprentice as some of you may have spotted.

But in my absence something strange has happened, if last night’s final five preview and interview show was anything to go by.

Firstly, I think I too may be afflicted by the Mystic Meg intuition of one of last night’s final firings, Lorraine Tighe.

Back in week one I predicted who would be in the final three: Yasmina, Rocky and Debra.

Well, just like Lorraine, my intuition was almost right, but not quite, although I don’t understand how I missed the Stepford Wife-like perfection that is Kate Walsh.

The other thing that struck me was just how popular The Apprentice must have become. The BBC devoted two whole hours to the show in prime time last night and the final is scheduled for peak viewing on Sunday.

Business as entertainment has clearly taken off. Celebrity entrepreneurs are the new celebrity chefs.

The last thing to strike me watching last night, is that the comedy – so easy to play up as the show’s own producers and I have done over the last few weeks – is making way for a programme that does after all have something serious to say about business.

A bit of TV manipulation’s been going on I’m sure, but Debra’s progression is a case in point. She’s appeared obnoxious, loud mouthed and über-ruthless as many of her former colleagues confirmed last night, but her journey through The Apprentice has clearly taught her something – about business and life.

The preview show focusing in on the characters and backgrounds of the final five, proved as, if not more interesting, than the penultimate episode itself.

You got a real sense of the very often working class backgrounds, adversity and inspiring family members that had shaped and motivated the finalists: James’s bricklayer Dad, Lorraine’s battle with a fused spine as a child, Yasmina’s Iranian immigrant family, Kate’s desire to impress her hard-working mum and Debra’s inspirational business father.

Suddenly caricature gave way to a better understanding of the real people battling it out to be Sir Alan’s new Apprentice. Suddenly the show seemed to be a little less about business pantomime.

It also has to be said the finalists, Kate and Yasmina, have to be two of the most impressive business people to have appeared on the show. Sir Alan must be delighted.

Quotes of the week, both from James’s comic CV: “I put a leash on people who spunk money up the wall” and “I bring ignorance to the table”.

Business lesson of the week: never underestimate The Apprentice, it might just have something serious to say about business after all.

You may have heard of Salesforce.com, an online service that has been penetrating companies left, right and centre because a) it’s useful, b) it can be paid for by individuals and departments without ringing alarm bells in IT and finance and, c) because it can be slipped inside the company as a standalone application. With some justification it calls itself “the world’s most popular sales tool”. Its 55,000 customers are split about equally across small, medium and large enterprises.

Last week, it published some independent research findings among 1,000 UK SMBs which ostensibly pushed the importance of seeking new business. It defines SMBs as organisations of between 50 and 250 employees and the ‘new business’ seeking behaviour was most intense (at 60 percent) among companies of fewer than 50 staff – companies that shouldn’t have been included. However, while the remaining figures are not as dramatic, they’re still quite interesting. See how they match your reality (and comment if you feel so moved):

Important issues by number of employees (Q109)

The 51-150 (surely that should read 50-150) and 151-250 organisations broadly differ in their attitudes to getting new customers/selling to existing ones and in cost cutting versus revenue growth. All four things are important, of course, but each organisation has its own preferred strategies for getting through the present recession. About 28 percent of these same respondents said that they’d consider themselves successful if their businesses don’t shrink during 2009.

Turning to their cost burdens, you may be interested to see where they lie:

Areas of greatest cost overhead

Again, organisation size makes a difference, but not much. IT appears as something of a headache. And this, of course, is music to Salesforce.com’s ears.

As well as the original CRM service and a ‘service cloud‘, which I won’t bore you with here, Salesforce has a third string to its bow called Force.com which is an application platform.

This means that it provides somewhere to run your applications in the ‘cloud’ (no, don’t get me going), taking away from you all that horrible stuff like backup, restore, disaster recovery, reliability, hardware and delivering applications to connected users 24×7. Applications are easier to write (five times easier according to the blurb) and easier to implement. And you have no capital costs. An associated service, called AppExchange, provides many prewritten applications which could save you at least some development effort.

That’s the good news. The bad news is that it doesn’t excuse you from analysing your business processes, deciding what functions you need, writing and testing them (or finding them) and all the other activities that go into implementing business software. You will probably need to consider how such systems are going to work with those that are still running on your own equipment until, and if, you manage to outsource the whole lot.

UK Force.com user, Nimbus, got a 28 year old person with no IT skills (but, presumably, plenty of business analysis and Force.com skills) to do most of the work involved in migrating its home-grown applications, including spreadsheet macros and the like, out to Force.com.

Many companies might be interested in the idea of getting shot of their computing equipment and associated expenses. But, they are also probably concerned about their ability to do it, the cost of doing it and the danger that they won’t be able to get access to their systems if their broadband connection goes down or the Force.com platform goes off air. The last is probably the least of their worries. Salesforce is highly motivated to fix all problems of this nature very quickly. If it happens too often, it goes out of business. The company provide a ‘briefcase’ facility that allows people to continue working when they know they’ll be offline – travelling etc.

With respect to the other two issues: ability and cost, the first depends on your staff and their skills. But, it has to be said, sources of third party help for small businesses wanting to take the Force route are not exactly thick on the ground at the moment. Salesforce is aware of this.

And, since it represents a great opportunity for systems integrators and the like, I think it’s safe to say that this will change. The second, cost, means that you’d be moving capital expenditure to operational. So you could save big in the short term.

You will, however, incur implementation expenses, which wouldn’t be that different to moving to a different internal system. Then you will have your ongoing monthly costs for the service. These you have to hammer out with Salesforce.com and conduct your own ROI analysis. Its blurb reckons you’d halve your costs.

So, although IT is a large expenditure for SMBs, like all ‘cloud’ type solutions, Force.com is unlikely to prove a magic bullet. So much depends on your exact circumstances and your IT setup. But, equally, when reviewing your future computing options, it would make sense to keep it on your radar, not least because Salesforce itself is an established and reputable provider.

Keeping in contact with old friends couldn’t be easier these days. Hotmail, WAYN, MySpace, Facebook, Twitter – the list is endless. That’s all well and good for your personal life, but what about in a business situation?

Some big name companies have thrown themselves into the social media space e.g. Dell claiming to have made over $1million from their twitter feed. That’s all well and good for the big boys who have spare money to experiment but does social media have any real value for SME’s looking to network?

Many business people are already tuned into the benefits of using LinkedIn to network. But is that where social networking should start and finish for small businesses?

Last year Visa Business launched a new network page designed for Facebook, the social network page. They used it to encourage small business owners to exchange ideas, manage their resources and expand their customer bases. This was in addition to the $2 million Visa already spent on advertising on the website.

But was it really an effective strategy? Undoubtedly many small businesses have signed up for Facebook pages but most of these are for fun; offering ways for Facebook’s 200 million active users to play games, share photos, rate music and track friend’s activities.

Whilst I understand the desire to harness Facebook’s rapidly growing audience for business, in my mind it still hasn’t proven that its social playground is an effective tool.

Businesses using social media may also be in danger of blurring the lines between personal and public life. We’ve all seen the stories of employees moaning about their job apparently in the domain of their private network of friends, only to find it gets back to bosses and they’re promptly fired.

Another unresolved issue with these new sites is privacy. Do businesses really want to be doing all their deals and negotiating out in the open? Surely when competitors see new business lined up they will try to lure them away?

As for expanding business opportunities and customer bases, I’m not sure how many people will want to do business with someone they found on a social networking site, predominantly used by teenagers for seeing what their mates have been up to.

Clearly this technology is still evolving but for the time being I’m not convinced it’s a key tool for SME.

When invited to a Microsoft ‘Voice of the Customer’ briefing, I must confess that I didn’t know what to expect. Software that expects the customer to close their computer by going to the ‘Start’ button obviously doesn’t really understand customer needs.

A search on the internet revealed that ‘Voice of the Customer’ is actually quite an accepted term in software circles. It’s about understanding customer needs through market research in the early stages of a project, then prioritising them in order to influence product development. You can find out more at wikipedia’s entry on the subject.

The briefing went way beyond the voice of the customer though. Perhaps it should have been called ’second-guessing the needs of the customer’ or something. Microsoft wants to get things right, customer-wise, in the first place and then make it easy for customers to get resolutions to problems encountered – sometimes before they’ve even encountered them.

You’re probably thinking what I was thinking; “Microsoft has been in business over 30 years, shouldn’t it have been taking this approach all along?” And I don’t have an answer to that, except that I suspect that programmers (who, in general, have little grasp of the average user’s needs) were left to run wild with their clever but irrelevant and often inconsistent (across applications) coding.

Microsoft seemed to have little idea of, or sympathy for, the hours that users would waste trying to find answers to their problems. As the web increased in popularity, Google probably became the first port of call, with real users in forums or Q&A sites becoming the best source of answers.

Although, having said that, I have a note here that says Microsoft itself participated in 13 million email or chat conversations, took 24 million phone calls and served up two billion on-line self-help requests. I presume that was in a year. It represents a ton of work and a huge cost for the company, over whatever time scale. This is, presumably, part of the trigger for a customer-focused revolution.

So, the new order is determined to design products better in the first place, be made better in the second and be better supported in the third. One of the company’s products that has already gone through this particular mill is Windows Server 2008. In a comparative time period, the incident volume was half that of its predecessor, Windows Server 2003.

Rather than have to plough through arcane knowledgebase articles, online users will be able to hit a ‘Fix it’ button. Later on, an online service will be able to undo something that’s harmed your system. Running applications will be monitored for health and get fixed in the background.

Microsoft has 424 full time employees, plus contractors and vendors involved in this quality process. Even so, it has to prioritise its work, it knows, for example, that Windows Mobile is a pain but it’s still not reached the head of the queue.

However the Windows 7 operating system that our beloved leader (Alex Bellinger) blogged about last week, received the full treatment, and it shows. Half a million individual items of feedback were processed. Five diagnostics and 108 design changes were incorporated as a result. It’s no wonder it’s becoming one of the best-received Microsoft offerings.

The company could have saved users (and itself) a lot of pain had it introduced such processes from the start. But then, without the internet, this would have been virtually (no pun intended) impossible.

Let’s hope that this really does represent a fresh start.

Many CEOs and MDs will tell you that their people are their biggest asset, yet spend less time on the selection process than they do on deciding what font to use in their latest presentation.

Even larger organisations with HR departments and formalised recruitment procedures can be woefully bad at really making sure the people they hire are the right ones for the job. Sure, they may force candidates to endure three interviews and a battery of psychometric tests, but none of this is worth a dime if they’re not actually testing them on the things that matter – their attitude, their ability and their potential.

There are lots of reasons why hiring well can be scuppered from the start. Particularly in smaller businesses it can be hard to make the time to really put a candidate through their paces, and convenience wins out over rigour.

In addition hiring can often be a knee-jerk reaction – ‘we’ve won some business, we’re over-stretched, we need to hire!’ – and the recruitment process is started from a base of panic, without anyone taking time to really define the role that needs filling, let alone the qualities required to fill it.

But hire in haste, repent at leisure – getting the wrong person in can cost your business a fortune in terms of time, money, morale and reputation.

So how do you know when it’s time to call it a day with a specific employee? In general, if you’re even thinking of firing someone because of an attitude problem, then you probably should have done it yesterday.

However, if the attitude is right but the performance is under par it may be worth looking at other factors prior to making the decision. Changes in the office or with client requirements, pressures at home, illness or simply stress can all impact ability to perform, and can often be overcome with the right support.

Whatever the issue, if you have any concerns about an employee it is essential that you address them immediately. Either they’re a keeper, in which case you will want to help them get back on track as soon as possible, or they are not suited to your organisation and the sooner you can remove them the better.

Some CEOs delay firing because of the fear of costly legal action. In such cases, you need to compare the cost of delaying versus the cost to the business. Perhaps leaving the individual in place could have worse financial implications than firing, or would demotivate the rest of the team.

However, this does not give you licence to fire people in an unpleasant or insensitive way as this will only create an enemy in the market for you and your company – not to mention all the legal implications.

So what is the secret to hiring success? My personal rules of thumb are very simple. Surround yourself with people that are better than you. And make sure that they are the kind of people you would enjoy going to dinner with.

You need people that will keep you on your toes but also people that make you want to go to work in the morning. A strong, motivated team is worth more than anything to your business in today’s climate, so hire, nurture and retain the quality, even if that means losing some of the quantity.

As many of you know, Vista hell became too much for me and I spent most of 2008 using Ubuntu.

And what a very pleasant surprise the open source operating system and all the good (free) things that come with it has been.

But there were a few gotchas: poor multimedia support, no viable Linux accounting package and a power management system that left my laptop hotter than the sun.

These niggles, the fact that I’m a bit of a tech tart, David Tebbutt’s initial reactions, and my never ending quest to find out whether stuff’s good for other small businesses, prompted me to install Windows 7 beta on my main work laptop in February this year.

The following review is based on my experience of the beta and release candidate 1 (RC1) of Microsoft’s new operating system.

Windows 7 wallpaper - Gates & Ballmer ride into a Yellow Submarine landscape, but is Microsoft's new OS blue monster or blue meanie?

Wow, it works now

Remember the Wow starts now? Microsoft’s come a long way since then.

What the Vista launch proved is that a computer OS no longer merits marketing hype. The evolution of operating systems, Apple and Linux included, is now iterative, not revolutionary.

What matters is do they work well? The bottom line is Vista didn’t and Windows 7 does.

Like many others, I’ve found Windows 7 beta and RC1 to be equivalent to or perhaps even a little faster than XP.

A stable, fast, secure operating system that you can forget about is exactly what small businesses want. Windows 7 could be just that …

It’s all in the detail

There’s really not a lot to say about Windows 7. The very fact that people are talking about the new ‘wallpaper’ in the OS is a rather amusing sign of this.

But actually this is great news. It feels lighter and more refined to use and seems to herald a new less is more philosophy coming from Redmond.

Perhaps cloud computing is forcing software vendors away from the bloatware mentality of Moore’s Law where all the extra headroom created by leaps in processing power had to be filled.

What you’re left with focuses on well executed detail and usability. About bloody time.

Windows 7 small business benefits

As a small business owner these are the things I enjoyed about the software:

- at last the desktop search built into the start button works well bringing a touch of Apple’s Spotlight to the PC – this is a real time saver when you want to find a document quickly;

- the ability to mouse over the taskbar and get a peak at files and windows you’ve got open works very well and saves time (click on the image below to see a screencast review to go with this blog post) as do the jump lists which give you quick access to files you’ve been working on;

- Vista was a pig for connecting to wifi networks on the move and Apple MacBooks are also often a pain if you’re trying to get some work done in an airport or down your local cafe. Windows 7 puts that right and is much more intuitive in terms of finding and connecting to wifi networks;

- compatibility is good thanks to ‘XP mode’ which means all your old software should work fine. Much to my surprise my ancient accounting package is alive and well under the new OS, saving me from an expensive forced upgrade;

- with all the data protection legislation around these days small businesses will increasingly value the ability to encrypt sensitive data on computers easily. Bitlocker on Windows 7 does this for an entire hard drive, while encryption on a file or folder basis also works well.

That’s about it, other than general stability and speed.

Similar features are found in other operating systems and arguably Microsoft should have had all this sorted years ago. But it’s here now and it works. Having said that …

Ghosts and the black screen of death

Just like Ubuntu there are some gotchas, albeit I’ve been testing beta and RC1 versions, so some quirks may get ironed out.

I frequently get programmes including Firefox and Microsoft Office documents suddenly freezing and turning a ghostly shade of transparent. Like ghosts they’re then often difficult to lay to rest. This was particularly bad in the beta, but it’s still happened a few times over the last week in RC1.

On much more rare occasions I get what I can only describe as the ‘black screen of death’. Windows 7 doesn’t stop running (which is good), but if a programme crashes I’ve had the background turn a mournful and appropriate black …

Norton Internet Security 2009 has proved extremely problematic to install correctly – but I expect Symantec will rectify this before the RC1 turns final. Windows-targetted viruses and malware remain a pain which Linux and Apple users don’t have to struggle with.

Finally Internet Explorer 8, bundled with the new OS, still feels slow. Firefox is the way to go.

Conclusion

If you’re a sole trader with an XP or Vista computer and you’re sticking with Microsoft, yes upgrade to Windows 7 (assuming Microsoft is sensible with pricing).

If you’re a larger SME, the benefits of Windows 7 are not so compelling that you should shift existing hardware/software upgrade cycles just for the sake of getting your hands on what’s new.

But when you do, you’ll notice a positive difference.

It was with a heavy heart that I set off to the London Climate Change Marketplace, part of the Prince’s May Day Summit 2009. I wasn’t looking forward to meeting lots of people selling things and pretending this was good for the environment. And I was dreading bumping into Prince Charles, a man whose carbon footprint must be very ‘interesting’.

I needn’t have worried. Prince Charles was at one of the other May Day events, but his speech was screened at our event too. And the exhibitors I spoke to were pretty genuine people who were more than happy to share their knowledge and insights. And yes, if you wanted, to flog you something.

What was refreshing to me was getting out of the IT box and looking at the subject in the round. Sure, IT can help a lot with addressing sustainability-related actions, but it’s not the only game in town.

I received my invite through a colleague’s husband, Habib Abdullah, the MD of MITIE Pest Control. MITIE is an outsourcing and asset management company. It had the largest stand by far and, over a drink made of apples from Kent and some cheese from Somerset, a representative talked to me about reducing food miles, ethical procurement, waste recycling and reuse and local sourcing.

You might be interested in flicking through MITIE’s online booklet entitled ‘the little book of big ideas‘ for inspirations of your own.

Couldn’t resist stopping by the 3M stand to tease it about swine-flu face-masks. Poor guy nearly hit me. He’d only got four hours sleep because of global press interest. He pointed out that even the most advanced masks have to be thrown away after a single use. And, anyway, you need to be trained to fit them properly in the first place or they’re useless. However, on the subject of energy saving, he did manage to show me how 3M window film can substantially reduce heat gain through windows, thus reducing the air conditioning work load.

Siemens was interesting because it is an industrial company that has moved to IT, rather than an IT company that’s moving into industry. Its services are probably not up your street but the perspective is worth bearing in mind when listening to potential suppliers.

The University of Cambridge and the World Business Council for Sustainable Development has produced (among other things) a neat e-learning tutorial on the business case for sustainable development. It looks like a great way to inculcate an understanding among employees in a fairly enjoyable way. You can download a PowerPoint guided tour if you’re interested.

Then we come to the Prince and the May Day network. During his speech, Prince Charles reported that about 1000 companies have pledged to do something about climate change in their own operations. About half of them are sending their footprint figures to the network and some of these are also sharing their stories with others. The May Day name was chosen because it is an international distress call (derived from m’aider, it seems). And it was chosen because we have very little time (98 months, in the Prince’s view) to ‘take the necessary action’.

To find out what that means, I strongly recommend you look at the May Day Journey. I’m ashamed to say that I knew nothing of this until last week. It is a great mind-focusing exercise. And it’s not all about ‘doing good’, it’s about doing the right things for your business.

Is it time for a proposition overhaul?

If, like me, you’re feeling a bit fatigued by the doom and gloom stories of the credit crunch, recession, deflation etc. etc. yawn yawn …

Maybe it’s time to remind yourself why it’s great to be a small business.

Whilst big, lumbering corporates frantically look at ways to cut their costs, re-engineer their business to strip out years of institutionalised inefficiency and wrestle to steer their titanic operations in a better direction, it seems to me small businesses have it GOOD.

Why? Because we’re more nimble, we can adapt to market conditions more quickly and by comparison, we’ve got super light power steering to take ourselves where the money is.

So if your business is taking a bit of a hit as a result of the crunch, maybe it’s time to do some smart marketing and have a look at your proposition. If it’s not getting results in current conditions … what can you change about your product … its pricing … its positioning … to make it more attractive to your key audiences?

At the end of the day, you have power to make changes … just as long as you’re in touch with your customers and you understand what it is that’s changed in their world that’s having a knock on effect on your business.

They say there’s always money to be made in a recession. I say hurray for the small businesses that have the sense and capability to grab opportunity whilst its there.

1. Let your prospect state their needs before you attempt to sell anything. Finding out what your prospect wants – needs analysis – is extremely important. By giving them the opportunity to explain you will, in effect, gain their approval in advance, providing that you can then present your pitch in a way that meets each of their stated needs. Another advantage of this approach is that the prospect is less likely to later dispute or change the spec as it was theirs in the first place.

2. In personal selling situations good rapport is vital. First impressions take just seconds to form and can be irreversible. Remember too that first impressions are not reliant upon words but can include intangibles such as demeanour, manner, dress sense and even humour.

3. Understanding why people buy is key in both marketing and selling. Ultimately, most purchases are made for one of the following three reasons: NECESSITY – My car is totally unreliable so I need a new one; OPPORTUNITY – There’s a special offer on my dream car – I must buy now while stocks last. DESIRE – Wow! The body styling of the new turbo model is so-ooo cool… I have to have it!

4. Different buyers will have different priorities so you should be prepared to adapt your selling pitch according to the circumstances. For example a corporate purchaser will most likely be focused on price, reliability and quality – logical decision drivers. On the other hand, an individual or small group will be more able to focus on lifestyle or fashion preferences, personal taste or ego – emotional drivers. The closer that your pitch fits with their mindset the closer you will be to a successful sale.

5. There are surprisingly few barriers that will consistently prevent buyers from committing – just four in fact. Here they are: What you are selling is simply not relevant to them (“Whadya mean you don’t need a pink zeppelin?”); What you are selling is in some way defective; There is something wrong with your sales pitch; There is something wrong with you (time to check-in with an image consultant maybe).

6. Alternatively, there are several things you can do to sway the buyer. These winning moves include: having an offering that is relevant, different and good quality; presenting it at the right time and at the right price; being convenient and easy to deal with; being likeable and easy to get along with; being persuasive and using a convincing, benefit-led sales pitch. If all else fails, you can try to present your offering as the only one of its kind in town.

7. Lastly, the golden rule. Never buy the sale. By all means give a little ground here and there if it helps negotiations. And by all means add extra value – such as free delivery or a few accessories – but do avoid the temptation of reducing your selling price to rock bottom or beyond just to win a sale. Price slashing is not a sustainable, long-term strategy. Remember that neither you or your business can survive for long without making a realistic profit.

Related posts:

1. 7 tips if you are thinking of selling your business
2. The Seven Deadly Sales Habits

It’s a funny thing, I speak to hundreds of small businesses every year, and there are always three things they complain about: I don’t have enough time; I don’t make enough money; and I just can’t get the staff.

So here are 7 ways you can make money and make your business more productive.

1. Money Money Money: Retrieve any outstanding debt – after all it’s your money, and it isn’t doing you any good in their bank account. Chase up non-payers, get a payment date, send reminders, and bank those cheques. Review all your outgoings each month. Are those phone bills too high? What about your stationery supplies? Could you email rather than post your invoices? Every cost you can minimise means more money in your pocket.

2. Affiliate schemes: Join relevant affiliate schemes to sell products online and earn passive income. Examples include Amazon, Tradedoubler, and Doubleclick. From experience, some schemes are better than others at paying out – do your research.

3. Increase Prices: This is an obvious one – charge more and earn more. If you are worried about raising prices, perform competitive analysis and see what your rivals charge and where you can offer extra value. Spend some time being a “mystery shopper” and evaluating what their customer process is like.

4. Revisit old clients: It’s 10 times cheaper and 16 times easier to sell to an existing client than to recruit a new one. Get your old contacts out and send them an email, pick up the phone or send them a special offer. This also has a simplistic title: “Sell more often”. After someone buys something from you what happens? Do they get directed to another page of your website recommending other products they might like? Do you send them a reminder to buy another 30 days supply from you? How about an email a month on to ask them how they like the product and remind them of your business? I was really impressed the other day to get a phone call from a supplier to check how I was finding the product about a week after buying it – fantastic customer service, and I just told all of you about it!

5. PR: Have a great story or a unique angle on something? We had an excellent ½ page article in the Daily Record (which has over half a million readers) on “21st Century Office Angels” – the equivalent advert would have cost of minimum of £7,000 – for FREE. Come up with an interesting angle – a competition, a survey you have done, a great headline, a cute picture. It’s impossible to buy the kind of credibility that good PR gives your business – well worth some investigation.

6. Network: If you can get 5 people to tell 5 of their friends about your business, and they tell just 5 of their friends, then that’s 125 people all talking about your business! It’s a long process getting business out of networking but it’s great for gauging opinion, getting honest feedback from other business owners/potential clients and getting those people doing your marketing for you.

7. Stop Being Active: Be productive instead. Think – is it really worth your time to sit doing the books (which you hate) rather than going out there and getting more clients? Your time is your most valuable asset – make sure it counts!

Related posts:

1. 7 Tips for freelancers or consultants just starting out

Temptation is all around us. Every day a capital vice or two will focus their attention on us and attempt to persuade us to leave the path of the virtuous entrepreneur, the saintly entrepreneur, the good small business entrepreneur.

So how do you make sure that you don’t stray, that you remain true to your moral code and can sleep easy at night? A good mental defence comes from understanding the nature of mortal sin, and to help you along this dark and dangerous journey we have gone to questionable lengths to research the following list…good luck!

1. Lust
An unquenchable appetite for something. As a small business entrepreneur you will often be faced with this common and potentially treacherous vice. Then again…surely a little passion is essential to business success, isn’t it?

To strive to capture a greater market share, to go all out to win that big contract or to desire the finer things in life that success can give you cannot be a bad thing, can it? Maybe we could all do with a little lust in our lives to push us forward from being small business entrepreneurs to become big business entrepreneurs!

2. Gluttony
Over-indulgence to the point of waste. Now surely there is no excuse for this. Why would you want to have the opportunity to eat what you want, where you want and how you want?

To order the most expensive meals in the finest restaurants anywhere in the world, to take business meetings over lunch at Nobu, nights out with loved ones at Claridge’s or breakfast at The Savoy would surely be excessive in the extreme. No, I say, small businesses entrepreneurs should not strive to be gluttonous…although I hear that the food at Gordon Ramsay’s restaurant is to die for!!

3. Greed
To strive towards the acquisition of wealth…is bad? Oh come now, how can that be sinful for a small business entrepreneur? I can’t even attempt to find an argument against this, so I’ll leave it to one far more eloquent than I am.

In the words of Gordon Gekko, “…greed – for lack of a better word – is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms – greed for life, for money, for love, knowledge – has marked the upward surge of mankind.”

4. Sloth
The sin of laziness. Ah, now here’s one that I can sink my teeth into! No small business entrepreneur can survive if they are lazy. Running a small business takes time and effort in equal proportions. Evenings and weekends are filled with work, days are busier than you’ll ever know them in a salaried job, and those around you must understand that for a while at least they will have to sacrifice some of their quality time with you because your focus is on building your business.

Then again, one man’s sloth is another’s efficiency drive. When machines were introduced into manufacturing, TV remotes into the family home and computers onto work desks, those with a desire to simplify tasks were accused of laziness. Working smarter, not harder, is not being lazy: it’s just a prelude to increased productivity.

5. Wrath
Uncontrollable anger. To lose control of your emotions can damage your business reputation. Building long-term relationships with suppliers, staff and customers is essential to entrepreneurial success in a fickle world.

To be irritable, upset or vengeful will not help you towards your business goals, but anger implies passion and therefore it has its positive aspects as well. When you’re having a bad week, are you the kind of small business entrepreneur who loses faith or do you allow your emotions to fuel your efforts to bring your performance back on track?

6. Envy
Desiring what someone else has. To be consumed by such an infectious craving can be at least distracting and at worst devastating. As a small business entrepreneur, you’ll be driven by the need to plough your own furrow, to walk your own path, to go where no one has gone before (I canna give her any more, captain!), so surely wanting what others have is beneath you?

Well, not really. We all started out on our entrepreneurial journey being inspired by someone else. Whether it was Richard Branson, William Gates, Sir Alan Sugar or Alan Shearer, we wanted what they had – their skills, their money, their allure. If you want something badly enough, envy can push you on to achieving your goals.

7. Pride
Often referred to as the “original sin”, pride is all about self-image and glory. Original sin? Who created this list? By definition, small business entrepreneurs need self-belief, confidence and a determination to achieve power, position and wealth.

Pride in your work ensures that quality is never sacrificed for profit, pride in your achievements allows you some back-patting for all the effort you have put into your business, and pride in yourself is an important end product of success.

Deadly sins may have kept the Church busy for a millennium or so, but as far as small businesses are concerned the true evil to be sent packing, the true deadly sin of entrepreneurial achievement is to lose faith in your venture. Never give up, never lose heart: know that you can achieve great things.

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Marketing is key – no matter what your business
If you’re just starting out, then depending on the industry you are entering, you may hold marketing as being secondary, in many respects, to your day-do-day focus on ‘just getting the job done’.

This may be particularly true for tradesman and those entering the service industry, but I’m living proof that no matter what your service or business offering, an active and creative marketing strategy can prove invaluable.

A plumbing firm may be the last place you might expect to find a comprehensive marketing strategy in action, but it’s played a key role in the ongoing success of Pimlico Plumbers.

Research is a key part of the marketing process so you are only as good as your research. Spend time finding out the facts about your potential customers and also about your competitors as that is the best way to always stay ahead of the game.

Communication is key – mix it up
Marketing is a way to engage new customers, which is so important when, in the current climate, financial pressures may cause your current customer base to shrink, that said, it also encourages existing customers to stay with you. There are now more channels of communication than ever before, and if you get a good mix across the board then you could soon reap the benefits.

Established business?– get back to basics
When you have been in business a while, especially as a small-medium sized business, or when time pressures are tight, there is a tendency to focus only on what has worked in the past. If a certain channel of communication has proven successful, then it can be tempting to just keeping doing it. Whilst it’s fair to say that ’if it ain’t broke don’t fix it’, it is also important to be aware that there are now more communications channels than ever before, so it important to be aware of new opportunities to have a look at any areas which you may have let slip. Get back to basics, refresh the activity you are doing and make sure you are covering all the angles.

Equally, when business is booming it can be easy to place marketing on the back-burner. But when your busy spell inevitably starts to slow you may find yourself behind and even back to square one. You have always got to stay one step ahead of your competition!

Communicate – don’t forget the power of public relations
PR is an essential part of the marketing mix. It can take many shapes and forms, but ultimately helps communicate your business messages to those key audiences you wish to reach. If PR is not something you are familiar with, then don’t be afraid to seek professional support from experts. One skill for any entrepreneur to learn is knowing when to delegate. I know what I’m good at and I know when to use the outside services. Currently Pimlico use the services of two PR agencies, who work closely with our internal PR Manager to maximise, devise and manage the opportunities for Pimlico to be seen and heard.

Get online – take advantage of the web
Having a clear, user friendly website has never been so important. Now, more than ever before, consumers are accessing the internet and using it as a research tool, to help them make an informed decision on future expenditure, and to choose their supplier. Investing in your website and making sure it is up to date with the latest prices, contact details and business developments is vital to ensure you are not missing out. Your website is the electronic face of your business. It communicates your brand, your services and your values, so make sure it is saying what you want it to say and keep it up-to-date

Are you twittering? – social networking could help your business
The internet is now a daily part of many people’s lives and millions of individuals are now members of social networking sites and other new media. Businesses are increasingly seeing the benefits of social networking sites as a way to engage with customers on a further level. Along with newspapers, magazines, campaign groups, industry figures and politicians, anyone keen to communicate is now getting involved. See if a presence on a social site could benefit you.

If times are tough – consider carefully before making cuts
When times are tough and budgets are tight the first casualty can often be marketing spend. But I would advise anyone thinking of cutting back to consider their decision carefully. When competition for work grows, you need to ensure you are visible, available and providing the best service you can.

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It’s no surprise that companies of all sizes are seriously considering moving some, or all, of their computing to the cloud.

But for many, it’s also something of a leap of faith. They will be concerned about exactly how they go about uploading their business data to cloud applications. About how they get best use of the cloud software, and if the data will be secure when it’s up there.

Then there are issues such as application performance, availability and uptime – all of which are legitimate concerns. So how can you be sure that you will reap the full benefits and rewards that cloud computing promises? And how can you ensure that the cloud vendor you choose will help you realise those benefits quickly, with minimum fuss?

Here are seven tips to help you get the best from your vendor.

1. Does the application actually do everything you need it to? Can the vendor offer you a free, no-obligation trial period so you can explore the software or service before committing?

2. How easy is it to upload your existing business data to the cloud application? Here, you need to ask the vendor what data and file formats are supported. The cloud application should support formats from a wide range of popular applications, to make exporting and uploading as seamless and easy as possible.

3. Does the cloud vendor offer resources such as online tutorials on uploading and sorting data, and comprehensive context-sensitive help?

4. If online help resources aren’t enough, does the vendor have a helpdesk to guide you through the migration and upload process, as well as through initial use of the cloud applications? If not, why not? The point of cloud computing is to help remove IT support and management headaches.

5. Ask the vendor specifically about the terms and conditions of using the cloud applications. Is the deal truly flexible? Can you add and subtract users and application modules as you need, on a month-by-month basis?

6. What quality-of-service commitments and service-level agreements the vendor can offer. Can they tell you who hosts your business data? Are guaranteed levels of application availability and uptime offered? A key advantage of cloud apps is, they are far less prone to server or power failures, as the software and data is hosted in enterprise-class, secure data centres where it is constantly backed up. But it’s good to know where your data resides, and the levels of performance and access that the cloud hosting offers you.

7. Finally, what security does the vendor offer for your business data? When you connect to the cloud application, is the connection secured to prevent ‘eavesdropping’ of data? In the cloud, are the data and applications secured behind firewalls to nullify hacking attempts and malware?

Realistically, a cloud application offers higher security than many corporates apply to data stored on their own servers, in their own offices. There’s certainly less risk of data loss or theft by insiders or disgruntled employees, and lower risk of trojan infections which could intercept data. So your data is likely to be safer in the cloud – but ensure the vendor can reassure you of this with an overview of their session and storage security measures.

In conclusion, you need to know what the cloud service you plan to use is made of, before you commit to moving your data across to it. By asking what your vendor can do for you, you’ll be in the best position to know exactly what you can ask of the cloud.

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Don’t get business cards unless you’re going to use them

Millions of business cards are printed every day, but a high proportion of them wind up as pulp because their owners don’t spend any significant time meeting people as part of their day to day business. If you’re running a retail shop, for example, you probably won’t need very many cards – whereas a typical business advisor or consultant will need lots.

Don’t DIY

After you’ve left a meeting or networking event your business card is usually the only tangible reminder people have of your business. If that reminder is obviously home-made or you’ve used a standard template, off the shelf template for your cards (there’s a purple one I’ve seen lots of times handed out by lifecoaches!) then you won’t be remembered as the professional and well prepared person you no doubt are.

Get your message across

Spend some time thinking about the name of your business, your logo and the style of text etc on your card and get professional help with the design. If your name and logo don’t make it obvious what you do – look at adding a strap line to the card to help people remember. For example, if your card says ‘Fred Bloggs Associates’ it would be a good idea to add ‘Business Advice Services’ or ‘Chartered Accountants’ or ‘IT for Small Businesses’ to give potential clients that critical reminder.

Look at your contact details objectively

Little details can give big clues to a client about the nature of your business. ‘Orchard Cottage’ is obviously a residential address, ‘Orchard House’ may not be – a PO Box may be hiding something. Using an email address like fred@btinternet.com looks cheap and unprofessional so why not spend £20 or so on a domain name that matches your business name?

Consider using the back of the card

Many people swear by this – if there’s key information that you think clients would find useful then in theory putting it on the back of your card will make people keep your card rather than throwing it away. I’ve seen rugby fixture dates, tax rates and other information on the bakcs of cards – but bear in mind that if the information goes out of date you’ll need a new set!

Avoid gimmicks

There are quite a lot of ‘different’ kinds if card around – unusual shapes, cards that unfold into brochures or that come in cute little envelopes. This is a personal opinion only but I think anything that doesn’t fit in a standard sized card box (or can be made to fit by removing its container/extras) is probably a waste of money.

Only carry one kind of card

It’s becoming very common for people to run multiple businesses and I have often come away from a networking event with 2 or 3 cards for the same person. While it’s good to have a separate corporate identity for each business I think it’s potentially very confusing for clients if you hand out multiple cards. I think its best to go to any meeting or event with a clear idea of which business you’re promoting and ONLY hand out cards for that.

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Key survival tactics for the current economic downturn will be achieving financial savings while retaining an engaged workforce with the skills to steer your organisation through the tough times and successfully out the other side.

Adapting HR activities in response to these pressures will contribute to your organisation remaining cost effective, competitive and in a position to exploit opportunities presented by adjustments to labour markets.

Retention

As human behaviour generally becomes more risk averse in turbulent times it is likely fewer people will consider a voluntary job move. Review the impact of this change on your planned recruitment and training budgets/activities for 2009/10.

Attendance Management

If you have a higher than average level of sickness absence reinvigorate your attendance management practices, typically this will reduce absence by up to 20%.

Employee Engagement

Maintain through these tough times to retain your competitive edge. Provide clear leadership and direction and engage with your people in periods of change, if making redundancies devise a strategy to ensure survivors remain engaged.

Learning & Development

When evaluating L&D ask if all activities remain current, what new skills & competencies are required for next 12-24 months and consider more cost effective forms of delivery such as developing in-house trainers or e-learning.

Pay & Benefits

Are they affordable and in-line with your employment market competitors? Many employers are reviewing occupational sick pay entitlement, contractual hours and annual increase mechanisms.

Redundancies

Ensure your procedure and selection criteria enable you to retain employees with the skills to deal with the challenges over the next 12-18 months. Consider alternatives such as sabbaticals, secondments and part-time working.

Recruitment

If you have vacancies pursue and exploit the current labour market adjustments. There are big pockets of redundant workers with excellent transferable skills and competencies

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Passion, commitment and perseverance – there will be many times during the early stages of growing your business when you face obstacles and the easiest thing to do is to give up. Before you get started, be very sure that you really want to do this and commit to persevering, even when the going gets tough.

The right support – there will be times when you need to work unusual and additional hours and if you have a family, you will need their understanding, support and flexibility during those times.

Reserve funding – most entrepreneurs are optimistic people and we expect the business to build faster than it does. Prepare 2 budgets: the first one being what you reasonably expect your costs and income to be during the first 2 years and the second one being based on your costs being 20% higher and your sales being 30% lower. Make sure you have the reserves or funding to see you through until the business takes off.

Prepare thoroughly – make sure there really is a demand for your product or service. Figure out how yours is different. Be able to explain it in simple language in less than a minute. Do the numbers – make sure you can make money out of it.

What’s your core business – find a niche, decide what your business is going to be and be consistent. Go to trade shows, subscribe to trade publications, speak to your target customers, not just your friends. Ask for their ideas on how you could improve, before you launch.

Focus on the sales – You need to have a great product or service to start with and then you must focus on building awareness and growing your sales. Very few businesses are lucky enough to have sales just roll in from day one. You need to work hard at it. Particularly if you are keeping costs down by starting with just a home based business or webstore – people can’t buy from you if they don’t know you exist.

Broaden your skill set – during the early stages, particularly in a recession, you can keep costs down by doing more yourself. A professional will almost always do it better, but if you can do some of the basics yourself, you will save money. If you are going to have business partners, decide who is going to look after which area and ensure your skills are complementary.

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Market research
It is amazing how often I come across people who are proposing to invest a lot of money (at least for them) when they really have no idea whether there is a demand in this country for yellow plastic frogs or very expensive Peruvian Vodka.

Market research does not need to be expensive. At the simplest level it might just involve floating the idea past a significant number of friends and contacts to judge their reaction to it.

However, usually, if you are going to be entering into a significant business opportunity something a little more sophisticated is probably a good idea.

Plan Ahead
There are many different ways of importing and exporting, for example, you can simply buy products from abroad and then sell them – hopefully at a profit. Alternatively, you can become a distributor for a foreign company’s products. In this case you may have to buy and sell them or you may sell them on behalf of the overseas company and take a commission for doing so, so removing the need to pay for the goods in the first place.

The same applies to exporting.

Clearly, making the most appropriate choice here could be critical to the success of your business and so it is important to do your research and plan ahead.

Think about the tax
Think about the tax implications of what you’re going to do. In most cases you are going to have to pay tax somewhere but, by the careful choice of structures for the deal, you can often reduce the taxes payable by a very significant amount.

If you’re importing, check out the product carefully
It is important for importers to check the product very carefully to ensure it complies fully with the requirements for sale in the UK market place.

For example, I can remember a client importing thousands of toys from China only to find their sale was completely illegal in the UK.

This research can be more complicated than you might think and the position is often far from obvious.

If you are exporting, it is important to provide potential importers with proof that the product can legally be sold in their country.

What obligations are you going to be taking on when importing or exporting these goods?
If it is a simple purchase for later sale there should be very few obligations, however if you are going into some form of distributors’ agreement there will probably be commitments as to the volume of sales, not dealing with competing products, having suitable demonstration facilities etc.

These commitments require a good, clear, contract and this should be drawn up by your lawyers, indeed, most contracts that we come across which have been prepared by the individual companies’ concerned turn out to be disasters.

Think about any licensing, regulatory or intellectual property issues relating to your plan
It is important to ask questions such as: Do the goods have a trademark? Are you entitled to use it? Are you going to be using any marketing materials prepared by the sellers – promotional videos, brochures etc.? Do you have the right to do so?

If the sale of items need some sort of licence (for example, pharmaceutical products) who is going to be responsible for obtaining the license and at whose cost?

Are you proposing to be the sole importer or (if you are an exporter) to give the person you are dealing with the sole rights to sell your product? If so, be clear about the territories concerned.

What are the arrangements for contracts and payment?
Arrangements for payment need to be very clear and this will ensure you receive money quickly and efficiently without problems. Questions to ask are: Are there going to be any form of guarantees? Who is to pay for shipping and delivery?

In most countries (but not all) parties to commercial contracts have the freedom to agree the legal rules that will apply to their transaction and the way of dealing with any disputes that arise from it. Depending on your choice of law your rights – and obligations – can vary a great deal. Be aware that, in certain cases, whatever your choice there may be rights and obligations that cannot be contracted away. Your lawyers will be able to advice as to the best option for you in the circumstances of your case.

Think about including an agreement that will force both parties to the contract to deal with any dispute, in the first instance, by informal mediation. This can save a huge amount of time and money. If this fails it is worth thinking about a clause that requires the parties to deal with the dispute by way of Alternative Dispute Resolution (ADR) rather than by going to court as this, again, can be much faster and cheaper. These clauses need to be carefully drafted and you need to make the right choice of the people who will deal with the ADR.

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