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Does our tax system stop enterprise growing?
Nine out of 10 small businesses believe they
need an effective voice within HMRC to ensure their progress
is not constrained by the bureaucracy of the UK‘s tax
regime, research by PwC suggests
Post Date: 16/10/2007
UK’s over-complicated tax system is stifling companies
from expanding, research from Pricewaterhouse Coopers
The survey of private enterprises
revealed that only a quarter (27%) of smaller firms felt
the current tax system was supportive of their needs,
contrasting with 45% of larger organisations, while nine
out of 10 small firms felt they needed an effective
voice representing their interests within HMRC.
On average, 35% of business owners
saw the UK tax regime as encouraging for enterprise,
although this had increased from 21% 12 months ago.
The study also revealed that almost
half (49%) of companies want the tax system to be
simplified to lighten the compliance and administrative
burden on private enterprises, while overall use of tax
incentives remains low, at 14% compared to 11% a year
There is still a negative perception of the UK tax
system, and its support for enterprise, and that
significant improvements are needed. This must be
addressed if we are to create a true enterprise
“It is promising to see a more
positive view coming from UK privately-owned companies,”
said Kevin Nicholson, UK head of entrepreneurs and
private companies at PwC.
“However, these messages must be
balanced against findings that suggest there is still a
negative perception of the UK tax system, and its
support for enterprise, and that significant
improvements are needed. This must be addressed if we
are to create a true enterprise economy,” he added.
The survey also revealed that
almost three-quarters (69%) of firms saw themselves as
‘mature’, suggesting there is only a limited amount of
companies that are actively looking to expand.
“If the tax system is not changing
behaviour or positively influencing enterprise –
particularly among small business – should investment be
focused on simplification instead?” asked Nicholson.
“However, it is important to
recognise that this would come at a cost to some. For
example, simplifying the system by eliminating some
reliefs would reduce the administrative and compliance
burden for many small businesses. In contrast, larger
businesses could be disadvantaged because the findings
suggest they are more likely to use those incentives and
reliefs,” he added.
We asked Tenon's Michaela Johns, Alan Moody from
Mamut, John Crawford of The VAT Consultancy and MYOB's Simon Smith
how small companies can turn accounting from a hassle to a
Post Date: 14/08/2007
Johns, director of business services, Tenon Outsourcing
Accounting for the running of your business is not a chore
necessitated only by the possibility of a visit from the
taxman. It is the only way to see where your business
currently stands, to locate and conquer hurdles impeding
year-on-year growth, and to achieve peace of mind that there
is method behind the day-to-day madness of running a small
There‘s a selection of questions you need to ask yourself to
decipher whether or not your accounting is running smoothly
and helping you hit targets.
Does the management information you receive enable you to make
informed decisions or do you find yourself second-guessing?
Are you able to identify niggles like bad debts on your weekly
or monthly reports before they become a real concern?
Do you receive regular financial information in a format that
you fully understand and trust?
If your answer to these questions is in the negative, you are
managing your business in the dark and are also restricting
the chance of successful growth.
So, where do you start if you do not think that your regular
accounting is enabling you and your business to succeed?
Every business needs regular accounts. Professional help may
be required to undertake an initial assessment of your
business so that you can implement systems that allow you to
stay in control of your finances. Once the systems are up and
running, regular checks on profits and losses and regular
cashflow of the business will help you maintain a clear
picture of how your business is doing.
Accounting can seem like an overwhelming task for a small
business and it can distract great minds from the kind of work
at which they are best. One option that has benefited a lot of
businesses in the UK is outsourcing their finance function to
a team of trained business advisors.
Delegating functions to a professional team of accountants
with more resources and increased support allows business
owners to focus on their core business, resting assured that
their back office is running smoothly.
It also allows you to move more comfortably through peaks and
troughs. If your business has seasonal surges, then the
resource is always available when things get busy without you
having to employ more staff.
Outsourcing to a suitable provider gives you access to the
most up-to-date technology and best practice advice. There are
a number of software packages that can help you keep track of
your accounts. The scale of your business and the speed at
which your business is growing will dictate whether you just
need a health check or if you need more permanent solution.
Once you‘re on top, it‘s much less difficult to stay there
but, if you are buried beneath accounting madness, you need to
ask for some help.
Alan Moody, UK managing director, Mamut Software
It‘s no secret that having an effective accounting system
is essential to maintaining a successful business but
financial management can prove to be a frustrating, daunting
task for many small businesses. While technology and
accounting are both areas that can often prove particularly
challenging to smaller companies, technology really can make
accounting simple and ’hassle-free‘.
Until recently, there was very little technology could do to
help. Most accounting packages were designed – and priced –
for large enterprises, leaving small businesses to create
piecemeal solutions from applications not designed for
accounting, or to manually track everything from invoices to
customer payments and supplier tracking.
Fortunately, times have changed. Products and programmes can
now be tailored for the specific needs of smaller companies,
and there is no reason why smaller businesses can‘t compete
with the big players. The same technology that has long been
available to bigger enterprises is now available to smaller
companies but at a price proportionate to their size.
Just because you‘re buying a lower-cost package doesn‘t mean
that you have to settle for second best. When you evaluate
what programme to buy, make sure it:
Enables you to get a 360-degree view of your business,
tracking sales, products and finances from supplier to
Manages all aspects of your accounting needs, including
the creation of reports, management of financials and
payment tracking on one system
Fits with the way you already work, integrating with
your existing systems for contact management and business
Choose a solution that fits the needs of your business
right now, as most companies have bolt-on products available
that will allow you to scale it up later if needed. Accounting
programmes now available enable you to do everything from
identifying late payers and targeting them immediately so you
don‘t spend precious time chasing them, to viewing cashflow
trends and modelling future revenue streams. These solutions
will enable you to take a more holistic view of your business,
allowing you to look not just at financial output but also at
trends, key customers and new business opportunities.
Adopting a new accounting solution may seem like an
overwhelming task, but moving away from the paper trail to an
electronic system delivers massive benefits to small
businesses. Most importantly, it will free up your time
allowing you to focus on the things that matter most to your
company. The key to implementing a new accounting solution is
to choose a programme that is right for you, your business and
Crawford, The VAT Consultancy
VAT accounting can be straightforward, but businesses need to
be aware of some important rules that affect them and the
methods by which they can manage their VAT liabilities more
The quarterly or monthly VAT return includes a formal
written declaration that the information given is true and
complete. Deliberate, and in some circumstances innocent,
errors can give rise to penalties and interest charges.
Ensure your VAT return is accurate to the best of your
knowledge and belief. If you are in doubt speak to your
accountant or HM Revenue and Customs.
It is imperative that your VAT return is received by H.M
Revenue and Customs by the due date (normally by the end of
the month following the period covered by the return).
Failure, even by one day to get your return in on time and
pay the liability on it will bring you within the scope of
default surcharges. These can rise to 15% of the VAT
liability on an individual return and should be avoided if
at all possible.
Businesses whose turnover does not exceed £660,000 can
account for VAT using cash accounting. This means that they
are not required to pay over the VAT on sales until such
time as the customer pays, however, they cannot reclaim the
VAT on purchases until such time as the supplier is paid.
This scheme will be of benefit to businesses who suffer with
Retailers account for VAT on their takings but are
entitled to reclaim the VAT on purchases, regardless of
whether they have paid their supplier or not.
Annual accounting can be used by businesses with a
turnover of less than £1,350,000. This scheme allows
businesses to submit only one VAT return per year and make
monthly or quarterly payments which smoothes out cashflow.
HM Revenue has also introduced a flat rate scheme for
businesses with a turnover of less than £150,000. This
scheme can really reduce business administration, but needs
to be considered carefully as it can result in additional
VAT liability for the unwary. The scheme works by applying a
flat rate percentage to a business‘s total tax inclusive
income, which is lower than the standard rate of VAT. Input
VAT on purchases can however not normally be recovered.
Smith, general manager, MYOB UK
If your business sends out invoices created using a word
processor, or even manually, and then tracks who owes you
money in a spreadsheet, there is a better way!
You may think that your spreadsheet is fine, and for some
businesses it will be, but for many others having better
tracking and reporting will enable them to run their business
more efficiently. By using the right tool for the job, you
reduce your chances of making calculation errors on invoices,
not following up on customers who owe you money or not billing
customers for work you have done.
I recall the story of a lady running a chain of chip shops –
very successful ones – who used spreadsheets to manage the
finances of her business. She thought there was really no need
to automate things any further and was happy with what she was
As the conversation progressed, she began explaining how she
entered all her takings into the spreadsheet, but went on to
say that it would be nice to be able to compare takings this
year against last. She proceeded to describe all the things
she did and was really describing what accounting software
could do for her in a lot less time.
When you think of accounting software as just a database to
store your business finance information, you can start to see
that by putting the information in once, you are able to slice
and dice it however you want. You can get the information you
need to run your business and also produce things such as VAT
returns quickly and easily because all the information is in
there ready for the reports to be run.
A common objection is that small businesses don‘t have the
time to put accounting software into their business. The
reality is that it will involve some time and cost to set
things up, but it is an investment in the future of your
business and the time-saving benefits will come as you use the
software for routine tasks further down the track.
Studies have shown that getting into a regular pattern of
keeping the books up-to-date can increase your chances of
business success. So don‘t get left behind, take control of
your finances and spend more time minding your own business.
Why you must check foreign payments
More than one in three small businesses has lost
money as a result of errors in international banking transactions,
research suggests, costing the small business community £100m a
Post Date: 30/10/2007
The knock-on effects of things going wrong can be
crippling for a small business and go beyond a financial
impact as reputations and business relationships can also
Small business owners should check
international banking transactions for errors after research
revealed that more than a third (36%) have experienced
The study by Travelex found that despite
the fact that more than half of such errors are the fault of
the banks, 17% of companies have been charged extra fees to
rectify the problem.
These costs and the loss of man-hours
chasing up such mistakes costs the average small business £400
a year, the study claims, and mean the small business
community as a whole loses £100m annually.
“The demand for international business
payment services is growing by 8% year-on-year,” said Tony
Wilson, director of Travelex’s global business payments
division. “With an increasing number of the UK’s small to
medium-sized businesses engaging in trade with their foreign
counterparts, these figures illustrate just how often payments
go astray, and the subsequent cost of putting things right.
According to the study, the top five most
common mistakes are banks taking deductions on fees without
the clients’ knowledge; incorrect account names; human error;
bank delays; and unsophisticated local banking networks in
“We would urge any business involved with
international transactions to think carefully about how they
go about sending money abroad and, importantly, who they use
to facilitate the payments,” added Wilson.
“The knock-on effects of things going
wrong can be crippling for a small business and go beyond a
financial impact as reputations and business relationships can
The survey also revealed that in two-thirds of cases the error
was spotted by the customer rather than the bank.
Are you planning for finance?
The team at Platinum Business Services introduce
the Access for Finance programme
Post Date: 25/09/2007
you ever heard (or said) the following:
“…we have gotten as far as we can and now we need support from
our bank – but they are refusing to back us…”
“… the bank only wants to support us when we do not need
“… the government says the small firm loan guarantee scheme (SFLG)
is meant for small businesses like us; but our bank is still
refusing to use this…”
In our experience, a delay in planning (or failure to plan at
all) holds back many of the businesses that report
difficulties in obtaining the finance they require at the time
Developing a timely business plan gives you:
A clear view of how your business is performing
currently AND how your ideas and plans for the future will
impact upon skills, resources and cash flow within the
Allows you to communicate your goals and objectives to
your team and should also help you build performance targets
for key team members
A basis for understanding future finance requirements
and determining the most appropriate ways of satisfying
A tool for demonstrating business’ potential and
strengths to external funding providers
Other advantages include:
Opportunities to utilise government grants – few
government grants would back a project that has already
Design most appropriate funding structure – in many
cases the best deal can be obtained by taking into account
how funds will be expended and future funding requirements
One recipe for disaster is to outsource the development
of your business plan completely to advisors – you and
your team know your business strengths, weaknesses, the
people (and what they are capable of), and your vision
Do you need external help with your planning process?
One recipe for disaster is to outsource the development of
your business plan completely to advisors – you and your team
know your business strengths, weaknesses, the people (and what
they are capable of), and your vision.
A good advisor will work with you and your team to:
Draw out information about your vision and goals in a
Provide objective insight as to where your current (or
new) markets might be heading
Analyse the competition and giving you feedback as to
how you compare
Get information about what really works within your
business (i.e. the bits the team would not normally tell you
Design the right funding structure for your requirements
Provide introductions to the most relevant finance
providers and negotiating the best deal on your behalf
What is Access to Finance?
Access to Finance is a new programme introduced by The London
Development Agency (LDA) – targeted and small and medium sized
businesses based in the London region that expect to have an
external finance requirement within the next 18 months.
The programme significantly subsidises the cost of
professional advice aimed at helping you raise finance.
Platinum Business Services have been appointed by the LDA as
an accredited provider to provide this support across London.
What the credit crisis means for you
Business groups warn that a more cautious
approach from banks could restrict small companies‘ access
to finance, hit them with higher repayment costs and stifle
Post Date: 10/09/2007
companies face tough times as a direct result of the
credit chaos affecting the world‘s largest banks,
business groups have warned.
The Federation of Small Businesses
admitted companies could be put out of business by banks
imposing rates of interest on business loans that were
last seen in the 1980s in a bid to claw back money lost
to bad debt, or refusing to lend money altogether.
“On a scale of one to 10, with 10
being blind panic, we are at a seven at the moment,” a
spokesperson for the FSB told The Telegraph.
“It could get worse.”
The organisation claims some of its
members are already facing interest rates of 10.75% a
year as interbank lending rates have increased to 6.9%.
This is in spite of the decision not to raise interest
“We have still got a huge fallout
from flooding and this on top is going to make it
extraordinarily difficult,” warned Mike Cherry,
financial affairs chairman of the FSB.
It is the last thing small businesses need. They
need banks to be more supportive. We would not be
surprised to hear of more business failures with
this double whammy
“It is the last thing small
businesses need. They need banks to be more supportive.
We would not be surprised to hear of more business
failures with this double whammy.”
Cherry warned that entrepreneurs
wanting to start businesses would also be hit by the
crisis. “The big problem we are going to find is that
the amount of money available to small businesses is
going to be less,” he said. “The goalposts are being
moved much tighter by the banks.”
The British Chambers of Commerce
expressed fears that the credit tightening could also
hit large companies which in turn would impact smaller
“The concern to date is that large
companies are going to find it harder and more expensive
to borrow,” he said.
“If the big business is finding it
more difficult to borrow, then clearly, investment
decisions they make will be either slowed down or cut
back. That will undoubtedly have an impact on smaller
companies. Quite clearly we are in for a very bumpy
ride,” he added.
When did you last review your bank?
The decision to remove restrictions imposed on the
big four banks in 2002 has provoked a mixed reaction in the small
business community. But small businesses that shop around for
better deals will benefit
Post Date: 04/09/2007
businesses are being urged to shop around for the best banking
deals after the recent Competition Commission decision to lift
price controls that established a minimum quality of service
from the big four banks.
The Forum of Private Business said it did
not support the idea of imposing restrictions on the four
largest banks but urged small companies to look into the
possibility of switching bank or negotiate with their current
provider for a better deal.
“It’s inconsistent for business groups
that campaign against regulation and believe in competition to
support price controls,” said Matt Hardman, FPB campaigns
“Our aim is to make competition work and
encourage smaller businesses to negotiate with their banks,
shop around for the best service, and change banks if they are
But The Federation of Small Businesses
condemned the decision to overhaul undertakings made with
Barclays, Lloyds TSB, HSBC and the Royal Bank of Scotland in
2002, under which banks pledged to pay interest on accounts in
credit or provide free banking to small business clients.
Our aim is to make competition work and encourage smaller
businesses to negotiate with their banks, shop around for
the best service, and change banks if they are not
“We are utterly bewildered by the
Competition Commission’s provisional decision in this case,”
said Mike Cherry, FSB financial affairs chairman. “It flies in
the face of all the evidence we have given and completely
contradicts the experience of thousands of our members.
“Despite their promises to the contrary,
there has been a worrying lack of transparency from the banks
about the services they offer to small businesses,” he added.
“We have provided concrete evidence that the big four banks
are not complying with the undertakings they signed up to in
2002 and the Competition Commission appears to have completely
A FPB report published last year revealed
a general improvement in the banking industry’s services for
small businesses as well as a greater willingness on the part
of small firms to switch providers.
Could you cope without key customers?
Companies are finally waking up to the threat IT
outages and other unforeseen events could have. But there are
still many areas in which they are woefully under-prepared, the
Grant Thornton International Business Report claims
Post Date: 25/09/2007
companies have woken up to the need to put measures in place
to protect their core business processes but still have huge
gaps in other areas of business continuity planning.
According to Grant Thornton’s
International Business Report, 77% of companies in the UK now
have documentation in place to deal with disaster recovery and
a major IT failure, comparing favourably with an EU average of
57% and 63% respectively.
The vast majority of businesses (81%)
have procedures in place to deal with a breach in the security
of their electronic information, while 80% could cope with
privacy of information issues and 73% with the loss or
destruction of property.
“Risk management should be an integral
part of every firm’s strategic management, so it is
encouraging to see so many UK businesses appearing to take the
issue seriously,” said Alysoun Stewart, head of Grant
Thornton's Strategic Services Group.
While not as high profile or dramatic as some events, the
sudden or unexpected loss of key personnel or a supplier
can have a devastating impact on a business
“Identifying fundamental risks and taking
steps to prepare for them is essential for minimising the
impact of a disaster, which is key to the continuity of
privately held businesses.”
Yet only 26% of businesses have formal
procedures in place to deal with an event that threatens their
reputation or portrayal in the media while just 32% and 34%
respectively are equipped to deal with the loss of a key
supplier and customer.
“It is worrying that UK businesses appear
to be overlooking these fundamental business risk areas,”
added Stewart. “While not as high profile or dramatic as some
events, the sudden or unexpected loss of key personnel or a
supplier can have a devastating impact on a business.”
The report also revealed that only just
over half (53%) of companies have a formal succession planning
mechanism in place. “Exiting from your company is one of the
most important decision a business owner can make and should
take years of careful planning,” claimed Stewart.
“Business owners who fail to recognise
the importance of such preparation risk putting the successful
continuation of their businesses in jeopardy,” she added.
We asked Carolyn Williams from the Institute of
Risk Management, Russell Scanlan's Andrew Jenkins and Doug Barnett
of Axa Insurance what the main considerations are for small
business owners in the field of risk management
Post Date: 25/09/2007
Williams, development manager, Institute of Risk Management
Half of all start-up businesses in the UK succeed and prosper. The
other side of the coin is that half do not. Risk management is
about applying a systematic approach to identifying and addressing
all those factors that could either stop you achieving your
objectives or, on the positive side, open up profitable
Many owner/managers are already managing
their risks automatically, as part of their obsession for their
business which fills their waking hours. They are constantly
thinking of what might derail their plans and taking steps to
ensure it doesn’t happen.
However, all businesses will reach a point at
which a more systematic approach is needed. Businesses need to be
able to explain their risks and how they are being addressed to
their banks, investors, insurers and, increasingly, to customers.
Within a growing company as well, there is a need for
understanding, communication and documentation of risk, to ensure
that all staff, not just the boss, are aware of the importance of
risk and can contribute to the process.
A typical risk management process would
include the following:
Start with your business objectives: what are you trying to
Take a methodical look at everything that might stop you
achieving those objectives (risks). At the same time don’t
forget to include those things that could occur that would
actually help you exceed your expectations (opportunities)
Determine the relative priority of the risks/opportunities
you have identified by thinking about the probability of each
occurring and the impact it would have on your business if it
Think about the controls you already have in place (e.g. an
insurance programme or IT security measures). How robust are
they, and how far do they go to cover the risks you have
Decide what action you are going to take in respect of each
risk. This will include insurance but could equally include
actions such as producing a business continuity plan or a
succession plan or identifying alternative suppliers. Remember
that even if you have insurance in place there will be a time
lag between claim and payout
Produce a plan for implementing, monitoring and review and
ensure everyone in the business is aware of what they need to do
Jacqueline Gold: Staff loyalty
Not everything a small business does should
be judged by how much money it brings in. Building up a
loyal and hard-working team can be even more beneficial
Post Date: 04/10/2007
always felt that when it comes to the game of life and
we reach the pearly gates and start totting up the
scores, it’s not the person with the most money but the
one with the best stories that wins.
The thing I love about Ann Summers is that there’s never
a dull moment; just ask anyone who works here and we’ll
always have a new anecdote to share. The last few weeks
give you a pretty good idea of what I mean: one day I
was speaking at the IOD conference at the Albert Hall
(and, yes, I still get nervous); the next I was doing
the charity Moonwalk marathon with a team from Ann
Summers dressed in one of our bras.
We’ve also been busy making headlines around the world.
First came the revelation that one of our new toys was
threatening Cyprus’s national security. Apparently the
remote control signal that operates our ‘Love Bug’ uses
a radio frequency shared by the Cypriot military, so the
product is banned over there. I’m not sure whether they
were peace protestors, libertarians or just enthusiasts
for the products we sell but they came to our defence in
the local media and a campaign began to make love not
Next came a story about Apple, our new ‘iGasm’ product
and the ad we ran to promote it. This story has now been
told on just about every computer-related magazine,
website and blog around the globe, as well as in major
tabloids on both sides of the Atlantic. The problem
arose when we created a window poster to promote the
iGasm that parodied one of Apple’s ads, to which their
legal team took a rather dim view. The good news is that
despite this killing our ad campaign, the resultant PR
has seen us make lots of new friends in America.
Courting a little controversy, making a little mischief
and having fun is part and parcel of a company culture
that encourages staff to challenge the norm, make
decisions quickly and act like entrepreneurs.
‘Courting a little controversy, making a little
mischief and having lots of fun is part and parcel
of a company culture that encourages staff to
challenge the norm, make decisions quickly and act
This is a lot easier to do in small firms when everyone
knows everybody else and personal relationships and
trust are strong. The tricky bit happens when your
business grows to a size where it’s not possible for
everyone to know each other personally.
At this point most companies typically resort to
formalising the fun in an HR document that sets the
parameters of what’s expected and what’s not. The
problem is that these documents tend to focus on the
things you can’t do more than the things you can, which
makes the company appear very dull indeed. And because
these tomes tend to come from HR, it makes them sound
dull too, which is very unfair.
Expenses are a typical example of one of these policies.
A senior executive at one company I know once told me
that six people were involved in the sign-off procedure
for expenses. Rather radically, and not without protest
from some in the finance department, they decided that
everyone would sign off their own expenses. The doubters
felt this would give carte blanche to the chancers and
cheats. The outcome? Nothing changed. Expenses claimed
remained the same and five people could devote their
time to growing the business.
In most instances, the instincts of your staff will be
profitable ones but even if they’re not, as long as
they’re constantly pushing the boundaries, you’ll end up
with a great tale to tell and you’ll have created a
culture where everyone loves working.
BFA names top franchisees
The British Franchise Association revealed
the winners of the franchisee of the year awards at a
presentation in Birmingham‘s International Convention Centre
Post Date: 09/10/2007
British Franchise Association franchisee of the year
award has been won by an entrepreneur who gave up
running his own vegetable business to launch a franchise
specialising in property lettings.
Terry Lucking (pictured, right)
took first place and a cheque from HSBC for £5,000 at an
awards ceremony in Birmingham’s International Convention
Lucking has run the Peterborough
franchise of property lettings and management specialist
Belvoir for eight years, during which time it has become
one of the most successful businesses in the franchise
The franchise sector is home to some of the UK’s
most successful brands. These brands have been built
on the foundation of a franchisor driven to build
and support a network and franchisees who are
committed to developing their own business
Lucking won the award after
creating a series of initiatives with his franchisor to
develop greater value for money for customers while
keeping the business ahead of the competition. These
included using feedback forms, encouraging customers to
grade the level of service received and answering all
suggestions and criticisms personally.
“Judging these awards is always a
difficult task but we felt that Terry showed
determination and commitment to building a successful
business,” said Cathryn Hayes (pictured, middle), head
of franchising for HSBC Bank.
“This is a franchisee who truly
understands that without the customer, there is no
business. It’s a strategy that has seen a whole raft of
innovation and inspired initiatives flow into the
“Indeed, so successful have these
been that many of Terry’s ground breaking ideas have
quite rightly been adopted through the Belvoir network,”
McDonald’s franchisee Atul Pathak,
who opened his first store four years ago, was awarded
second prize and a cheque for £3,000 while David Amos,
of the Pitman Training franchise in Bishop’s Stortford,
won third prize and a £2,000 cheque.
“The franchise sector is home to
some of the UK’s most successful brands,” said Brian
Smart (pictured, left), director general of the BFA.
“These brands have been built on the foundation of a
franchisor driven to build and support a network and
franchisees who are committed to developing their own
“The awards recognise the very best
franchisees and how their focus and drive, when
supplemented by the support of a franchisor, results in
the growth of a sustainable, and profitable business.”
How to combat staff stress
Allowing office stress levels to soar can cause
higher absence rates, greater staff turnover and falling
productivity. To mark National Stress Awareness Day, Ceridian
provides top tips on how to keep your staff‘s stress down to a
Post Date: 05/11/2007
cost of stressed out staff to small businesses can be huge,
with higher levels of absence and staff turnover and lower
levels of productivity all likely outcomes.
To mark National Stress Awareness Day, HR services company
Ceridian has revealed the top 10 list of employee gripes,
which may sound trivial but are anything but that if they
contribute to office stress.
Top of the list is colleagues avoiding
doing their fair share of work, followed by arguing in work
places, gossiping and complaining. Other gripes include
hijacking meetings with personal agendas, taking excessive
tea, cigarette or toilet breaks and swearing.
“Irritating habits may be funny when
portrayed in sitcoms like The Office but in real life
they’re no joke,” says Doug Sawers, managing director of
Ceridian. "Employers should be on the lookout for annoying
behaviours that stress out fellow workers. Stressful and
disruptive behaviour can affect office morale, productivity
and, as a result, the bottom line.”
Employers should be on the lookout for annoying behaviours
that stress out fellow workers. Stressful and disruptive
behaviour can affect office morale, productivity and, as a
result, the bottom line
Croner offers the following tips on how
your staff can prevent stress levels getting too high:
Set aside time for project work.
Ignore or turn off your email alert and divert your phone when
working on important tasks so you can focus on the project at
hand. Multi-tasking can make us less productive and it may be
helpful to set aside time for focused effort each day
Assess whether your timelines are realistic. Working toward
deadlines you cannot meet is self-defeating. Re-adjust the
timeline when necessary
Talk about it.
Communicate concerns to your co-workers and suggest ideas for
how to improve your situation. Ask for help with tasks that
are easily delegated such as research, follow-up calls and
other basic tasks
Set boundaries. Find the
appropriate balance between life and work. With 24/7 access to
mobile phones, email and PDAs, many modern workers need to be
reminded to stop working after business hours or to fully
recharge themselves during holiday periods. Time away from
work will make you a more productive worker during normal
Eat lunch. Enjoy healthy
food at lunchtime, each day. Instead of working through lunch,
take the time to eat and enjoy a few minutes away from your
work. Sit and talk with colleagues or take a quick walk
Pay attention to posture.
When you find yourself in a tense meeting, pay attention to
your shoulders and arms. Are they tense? Try sitting with your
palms face up on your lap. This pose naturally relaxes your
shoulders and relieves neck tension. When sitting at your
desk, are you hunched over? Sit up and make sure your
workstation is suitable
Stretch, breathe and find
perspective. It sounds simple, but moving your
muscles and deeply filling your lungs several times a day can
help you instantly lower tension and stress. Take time on a
regular basis to reconnect with your body, recognise stress as
it escalates, and look at the big picture. When you take time
to reflect on your current state of affairs, you may often
find that it’s not so bad after all
How to beat the winter blues
Employers should implement ’winter warming‘
initiatives to boost productivity and staff morale during the
winter months. Croner offers some top tips
Post Date: 30/10/2007
Employers should look to implement ’winter
warming‘ initiatives to counter a lull in staff productivity in
the winter months, according to consultancy Croner.
Research claims that 5% of employees already
suffer from ’seasonal affective disorder‘ – making them lethargic
and demotivated during the winter months – and numbers are
expected to increase over the next five months.
“Employers will always see a slight fall in
productivity during the winter because people are affected by the
dark mornings, even darker nights and cold weather,” said Gillian
Dowling, employment technical consultant with Croner.
“However, this year businesses are
experiencing these symptoms earlier than usual because we didn‘t
have the uplifting sunny summer that normally helps employees get
through the frosty September-to-February period. And we therefore
expect to see an even larger drop in productivity.
“Although it‘s important to note that
employers have no responsibility to raise the ’mood‘ of the
office, we would advise that they make sure they are aware of any
significant drops in staff morale as this will impact their
business‘s performance,” she added.
you consider that lighting an office overnight wastes enough
energy to make 1,000 cups of tea, the need for businesses to
take action to improve the efficiency of their lighting has
never been greater
Croner offers the following tips to ensure
your employees are as productive as possible during the winter
Ensure employees are working within a comfortable
environment by maintaining an optimum working temperature of 20
to 24 degrees and making sure lighting is sufficient in all work
Consider implementing ’winter flexible working‘ by allowing
staff to work additional hours on their lunch break, in the
morning or late afternoon so they can leave early on a Friday
Encourage employees to incorporate exercise into their daily
routine by providing subsidised membership at a local gym
Arrange onsite health screenings so staff feel their
wellbeing is being considered, while serious cases of SAD could
also be identified during these health checks
What your staff really want
Feeling they are being treated fairly by their
boss is the most important motivating factor for staff with
flexible working the most attractive perk, a survey reveals
Post Date: 25/09/2007
most important benefit when selecting an ideal jobs package is
flexible working, according to a survey on staff motivation.
The research by Capital Incentives &
Motivation found that three in 10 respondents put flexible
working top of the list, ahead of pension (19%), car (14%) and
an extra week’s annual leave.
Further benefits selected were a travel
allowance such as a season ticket (6%), laptop (4%), gym
membership (3%) and mobile phone (2%).
“The priority of flexible hours is an
interesting measure of the importance to employees of
achieving a better work-life balance,” said Graham Povey,
managing director of Capital Incentives & Motivation.
“However, given the ongoing headlines
about the future of the state pension, I am surprised that the
provision of a company pension arrangement was not selected by
a higher percentage of respondents.
It seems that employees could be failing to take a
long-term view of the benefits of a company pension or
healthcare scheme and are instead opting for benefits that
will have a more immediate impact on their lives
“It seems that employees could be failing
to take a long-term view of the benefits of a company pension
or healthcare scheme and are instead opting for benefits that
will have a more immediate impact on their lives.”
The poll also revealed that the factor
most likely to motivate staff to perform at work was being
treated fairly by their boss, with 72% citing this as very
important. Having good relationships with colleague was second
with 61% while a good salary was third in the list with 56%.
The majority of factors such as job
security, leadership, benefits, work load and training
increased in importance in 2007, while a good location and
work environment remained stable, with 35% of respondents
rating it as very important. Fair promotion prospects fell,
with 35% of participants rating it very important in
comparison to 38% in 2005.
“It is not surprising that ‘being fairly
treated’ at work has remained the top motivating factor as it
is important for all employees to feel that they are valued by
their employer,” added Povey.
Staff won‘t talk about problems
Over half of staff would avoid complaining
to their manager about a colleague‘s behaviour and
two-thirds would keep such information from the HR
department, research by Ceridian claims
Post Date: 14/09/2007
UK workers would not complain to their manager or HR
department even if a colleague’s behaviour was having a
detrimental impact on their performance, according to a
survey of stress in the office by Ceridian.
The poll found that 58% of
employees would avoid telling their manager about a
colleague’s annoying habits, while two-thirds would not
bring it to the attention of the HR department.
The top three most stressful office
worker habits are coming up with excuses to avoid work
(cited by 21%), having tantrums and arguments in open
spaces (11%) and gossiping and holding private
conversations in the office (9%).
A similar survey by the same
company held last year estimated that staff took an
average of 8.5 days off sick each year with a quarter of
these due to stress, while figures from the CBI estimate
the cost to British business of lost productivity
through mental illness and stress at £5bn a year.
It would appear many employees are suffering in
silence with their managers and HR departments
unaware of internal stress triggers. Today’s
employers must be aware of potential stressors
within the workplace and the impact of these on
According to Ceridian, this
reluctance on behalf of staff to draw attention to
rising stress levels puts the emphasis on employers to
monitor employees and to train line managers in how to
spot the signs of stress.
“It would appear many employees are
suffering in silence with their managers and HR
departments unaware of internal stress triggers,” said
Doug Sawers, managing director of Ceridian in the UK.
“Today’s employers must be aware of potential stressors
within the workplace and the impact of these on their
“Managers need to be properly
trained to identify and correct negative behaviours to
avoid undue employee stress and potential confrontation
in the workplace,” he added.
Do you help staff with addictions?
Four in 10 employers believe alcohol and
substance abuse plays a significant part in employee absence
and lost productivity, according to a new report by the CIPD
Post Date: 13/09/2007
and drug abuse are seen as major causes of employee
absence and lost productivity, according to a survey by
the Chartered Institute of Personnel and Development (CIPD).
According to the survey, four out
of 10 employers believe drug and alcohol abuse is a
significant cause of staff absence.
But only 33% of employers train
managers in how to deal with this sensitive issue and
only half provide access to counselling or occupational
health services to help employees over come addiction.
“Simply adding a policy to a rarely
used staff handbook is unlikely to ensure the issue is
seen as an ongoing priority,” said Ben Willmott,
employee relations adviser at the CIPD and author of the
“Organisations should engage with
their employees to ensure that they are fully aware of
its provisions,” he added. “This can be done via staff
briefings, poster or publicity campaigns at work,
internal notice boards newsletters and email alerts.
The Health and Safety Executive currently estimates
that up to 14m working days are lost each year due
to alcohol related problems, costing British
industry an estimated £2bn each year
“Training managers so that they are
able to identify and manage drugs and alcohol misuse in
the workplace is also essential.
The survey also revealed that 22%
of employers carry out alcohol or drug testing in the
workplace, with another 9% planning to introduce such a
system in the future.
Most companies (60%) prohibit the
consumption of alcohol on the organisation’s premises
and 24% do so when entertaining in work time.
“Clearly drug and alcohol misuse is
an issue which needs to be taken seriously within the
workplace,” added Willmott.
“The Health and Safety Executive
currently estimates that up to 14m working days are lost
each year due to alcohol related problems, costing
British industry an estimated £2bn each year.”
How to boost staff performance
Keeping staff at the top of their game is a
challenge for any business and even more important in a small
company. Business Link offers a few pointers on how get the most
Post Date: 07/09/2007
very easy when you’re running a business to get stuck doing
the same old thing everyday, and that’s exactly the same with
your staff too.
But for dynamic, entrepreneurial
companies that want to expand, it’s vital to retain your staff
at their maximum level so you can continue to maintain
customer service standards and take on extra work when the
“Improving the skills and performance of
your team – your business’ greatest asset – is one of the best
ways of building a more efficient and dynamic business,” says
Helen Cracknell of Business Link.
“Not only will it make your business more
productive, allowing you to service existing customers better,
but it will help you identify ways to grow your business
opportunities. It will send out a positive message to your
employees, who will understand that you are investing time and
money in their development.
“The size of your business will dictate
how much you can do to improve your people and how they work,”
she added. “Other influencing factors include industry, skills
required, training and resources available. The important
thing is to find the right solution for your business that
will be cost effective for you, but also motivate you
Business Link offers the following tips
on how to give your staff’s performance a boost:
Reviewing the situation
A good starting point is assessing your team to understand
what you could change. Think about the different skills areas
within your business, such as customer service, sales and
marketing or finance. Developing a review process will give
you the structure to build improvements into your employees’
performance and their skills across these areas. Talking to
each team member individually carries several benefits,
including identifying and understanding their own particular
skills gaps and training requirements
Running training courses is a good way of improving your staff
performance and can ultimately strengthen your business. If
you have the budget, it is a good way of introducing more
specific skills to your business. It will also ensure you get
buy-in from staff who will recognise you are prepared to
invest in them, ultimately improving loyalty
Improving the skills and performance of your team – your
business’ greatest asset – is one of the best ways of
building a more efficient and dynamic business
What do employees want?
Take some time to think about what makes you and your staff
tick. As a small or medium-sized business, you may not be able
to pay huge salaries or wages but you will be able to dictate
other areas and develop a workplace that will make your staff
happier, such as introducing flexible workin
More than money
Aside from money, factors that you may want to look at more
closely could be the type of work, potential to develop and
the culture. Review these areas separately by asking your team
how they feel about each of them. Perhaps they feel the
business lacks a social element, in which case organise
Eyes on the target
Another good way of motivating people is through targets and
incentives. Maybe you can attach targets to certain elements
of work, like asking your staff to aim for an agreed number of
sales meetings each month? An incentive for this could be an
extra day’s paid holiday
How your team performs depends largely on you, so you should
aim to develop a management style your people will respond
positively to. A manager of a business needs to be able to
demonstrate respect and trust in their team, whilst having the
ability the guide, motivate and inspire. If you can achieve
that then you will succeed in getting the most out of your
Stay on the ball
Always keep an eye out for new ideas and make sure you have a
two-way communication channel open at all times between you
and your employees. Most importantly, lead your team in way
that will make them want to perform well for you and the
Personal development tool
Developed with the Department for Education and Skills, the
Department of Business, Enterprise & Regulatory Reform and the
Management Standards Centre, this tool is for business owners
or managers looking to improve on management and leadership
skills. It guides users through a series of questions about
their business, role and behaviour at work to produce a
comprehensive and personalised development plan. The plan
takes around 25 minutes to complete and the information
submitted can be saved and revisited in order to track
progress. For more information on this see
Why you should monitor sickness stats
Small firms should take a tougher stance on bogus
sickness, which costs the UK £3.5bn a year and accounts for 81m
days, according to law firm Peninsula
Post Date: 28/08/2007
business owners should re-examine their sickness procedures
and introduce back-to-work interviews to cut down on cases of
bogus sickness, according to an employment law company.
Research by Peninsula claims that the
total cost of sickness absence to companies is almost £21bn a
year, with £3.5bn of that down to false cases. The survey
claimed that 17% of all absence is bogus.
It also indicated that the average number
of days taken off sick by an employee is 16, double the figure
from 2002. A total of 480m days are lost due to absenteeism,
it added, with 81.6m of these due to people taking time off
sick when they are not actually ill.
The most common complaint for someone
phoning in sick is flu or its side effects, the survey
Peninsula is advising companies to pay
more attention to trends in sickness, for example staff taking
a lot of Mondays or Fridays off or days when major sporting
events are held, and enforce back-to-work interviews when
staff return from a stint of sickness.
It is all too easy for a worker to ring in sick. They
still get paid for it and there is no follow up regarding
the excuse as to why the employee was off
“It is all too easy for a worker to ring
in sick. They still get paid for it and there is no follow up
regarding the excuse as to why the employee was off,” says
Mike Huss, employment law director at Peninsula.
“Return-to-work interviews should be enforced to give the
employer and the employee the chance to sit down and discuss
why they were absent from work.
“This can dissuade employees from calling
in sick, when bogus, as a sense of guilt may hold them back,”
he added. “The employer must make it known that bogus sickness
will not be dealt with lightly.”
Peninsula has recently invested £755,000
in its Business Wise computer tool designed to help employers
identify fraudulent absenteeism patterns.
Why you should enforce staff breaks
Almost one in five employees fails to take a lunch
break, according to new research by workplace consultancy Croner.
But this is not a good thing for business owners
Post Date: 07/08/2007
business owners are being urged to ensure that staff take
regular breaks to maintain efficiency, prevent mistakes and
stay on the right side of the law.
A survey by workplace consultancy Croner
revealed that almost one in five (19%) employees take no lunch
break. But while this may appear to be an advantage for
bosses, it is also fraught with danger, Croner claims.
“We all know that working long hours
affects our ability to cope with our day-to-day roles, and as
such we are starting to see more people question their
work/life balance and taking appropriate action,” said Gillian
Dowling, employment technical consultant at Croner.
“However, what some employees are failing
to realise is that not taking time out in the working day can,
in the long-term, also affect their health and their ability
to do the job.”
Under the EU’s Working Time Regulations
1998, employers are obliged to ensure that anyone who works
more than six hours a day is entitled to an uninterrupted
break of not less than 20 minutes. This should be away from
Younger employees under the age of 18 who
work for more than four-and-a-half hours a day are entitled to
a further 10 minutes away from their desk.
“In some cases there might well be very
good reasons for missing out on a lunch break, such as meeting
an impending deadline or leaving work early for a doctor’s
appointment,” admitted Dowling.
We all know that working long hours affects our ability to
cope with our day-to-day roles, and as such we are
starting to see more people question their work/life
“But employers have to make sure that
workers are having a rest break under the Working Time
Regulations, so if it’s an every day occurrence, employers
need to be looking into the reasons why and addressing the
However, there are also examples of
employees saying they do not take a lunch hour or break but
who in fact do give themselves at least some form of respite
“It’s impossible for anyone to maintain
concentration levels over protracted lengths of time,” said
Dowling. “We find that in some instances although the employee
doesn’t appear to be taking a regular ‘lunch’ break, they may
in fact be taking other little breaks during the day even if
it’s a quick chat while the kettle boils.”
Is your insurance up to the job?
Three-quarters of small businesses do not
have adequate insurance in place, and in some cases this
includes the legal requirement of employer‘s liability
insurance, research claims
Post Date: 30/10/2007
The recent summer floods have resulted in £3bn of
claims from 50,000 businesses, many of them smaller
businesses. Events such as these can interrupt trade
for weeks but inadequate insurance could spell the
end of any small organisation
Three-quarters of small businesses
in the UK are breaking the law and risking fines of up
to £2,500 a day by not having the right insurance in
According to the research by
Finaccord, many small businesses do not even have
employers’ liability cover in place, despite this being
a legal requirement on all business employing staff,
even voluntary ones.
Over half of small firms are
under-insured for the commercial activity they
undertake, the research added, meaning they are at risk
of going out of business if they are the victims of
unexpected events such as fires or flooding.
“The recent summer floods have
resulted in £3bn of claims from 50,000 businesses, many
of them smaller businesses,” said Neale Phillips, head
of insurance at British Gas Business.
“Events such as these can interrupt
trade for weeks but inadequate insurance could spell the
end of any small organisation,” he added. “The financial
implications of not having compulsory policies in place
are also astronomical. I urge all small firms to check
their insurance requirements today.”
The research also revealed that
over half of small companies would like to buy their
insurance online but only 15% currently do so, prompting
British Gas Business to launch a dedicated online
business insurance comparison service.
“Unlike the personal insurance
market, where internet searching has been truly embraced
as it keeps the customer firmly in control, this simply
hasn’t happened in the business insurance market,”
comments Neale Phillips, head of insurance at British
“Until now, small firms have been
reliant on finding and trusting a reliable broker but
the high levels of under-insurance indicate that this
traditional model alone is no longer viable.”
Are you prepared for a major incident?
Sam Franks, regional underwriting manager at
Hiscox Insurance, outlines some risk management
considerations for SMEs
Post Date: 27/09/2007
your own business can be a stressful thing at the best
Aside from the trials and tribulations of simply running
the business on a daily basis, there is the wider issue
of the external environment that businesses operate in.
This marketplace can be characterised by increasingly
complex levels of risk exposure, for businesses of all
When it comes to disputes and legal action, prevention
is always better than cure. Hiscox specialise in
insuring small and medium sized businesses in the
service sector and have seen how many businesses could
have avoided problems by improving their risk
It is of course essential to comply with all
regulations. One particular area of difficulty involves
complying with employment legislation. The number of
employment disputes reaching tribunal has significantly
increased year on year from 156,081 in the 12 months to
April 2005 to 238,564 in the 12 months to April 2007.
Many businesses will not have the expertise to deal with
employment issues or setting up the correct policies and
procedures so should seek external assistance from
solicitors or HR consultants.
It has been well publicised that an estimated 80% of
businesses which suffer a major incident close
within 18 months
It is important to have an appropriate contract with
your customers. What if one of your customers suffered a
loss and claimed that you were responsible for doing
something which you thought you weren‘t? A contract
would define who is responsible for what and the limits
of the parties‘ liability. The lack of an effective
contract can make disputes very difficult, and
expensive, to resolve with increased risk to your
business. Businesses should seek legal advice to create
a standard contract and to advise them when using their
It has been well publicised that an estimated 80% of
businesses which suffer a major incident close within 18
months. So, should the worst happen, a sound and
workable business continuity plan will be an essential
part of avoiding becoming one of the 80%.
Finally, insurance is available as a safety net rather
than a contingency plan. The bottom line is that a
dispute will not only affect your business financially,
but it could also significantly damage its reputation.
You should investigate what cover is available with your
insurance provider, not forgetting that cheapest may not
be best. Some providers will offer additional services
like legal help lines, HR advice and business continuity
planning assistance as part of their service to you too.
Not all businesses are prepared for a dispute or major
incident - is yours?
A comprehensive guide to the different types of
insurance available to help you work out what you really can‘t
risk being without
Post Date: 20/09/2007
say when it rains it pours. This was certainly true for
millions of people across England this June, which was the
wettest since records began. The north was hit particularly
hard, with more than 10,000 homes evacuated in Hull alone due
to severe flooding and some families expected to be unable to
return home for up to a year.
But it’s not just families and other essentials such as
schools that have been affected. Thousands of small businesses
have also been damaged and insurers – for those that had
insurance – are working round the clock to assist flooded
The Association of British Insurers (ABI) estimates that 5,000
businesses have been affected by the recent floods and storms.
The cost of claims is expected to reach £1.5bn, a figure that
could yet rise further. But for those small companies without
essential flood and disruption cover, the outlook is much
“Many small firms do not think about the consequences of not
being able to trade,” explains Adrian Scott, director of
strategic implementation at insurance broker Jardine Lloyd
Thompson. Costs quickly add up: staff wages; the hiring of
extra machinery to replace ruined kit; renting new premises
while the old ones are restored. Without cover, many
businesses simply go under in such circumstances.
But getting the right cover can difficult. Insurance documents
are often deliberately lengthy and most business owners do not
have the time to wade through each offering. Package or
combined policies are tailored to industry sectors, which
provide cover against typical risks of, say, a grocery
The problem is that small firms are still buying insurance
based on its cost rather than making a comprehensive
assessment of their risk exposure. It is only when they
have to make a claim that they realise that their losses
are not fully covered
However, each packaged policy will be different, with some
offering frozen food cover, for example, as standard, while
others will not. “Small companies, by their nature, have to be
opportunistic in their approach,” says Scott. “Those that
survive will be expanding and may find that the new business
areas are not covered.”
One option is to use a specialist commercial insurance broker,
which can tailor each policy to suit the particular business.
Brokers often offer additional services such as a survey of
company premises and risk assessment, as well as yearly
They can also ensure that the level of insurance fits the
risk. “The problem is that small firms are still buying
insurance based on its cost rather than making a comprehensive
assessment of their risk exposure and buying insurance
accordingly,” says Gary Head, professions underwriting
director at insurance broker Hiscox. “It is only when they
make a claim that they realise that their losses are not fully
Not only do small businesses risk being under-insured, in some
cases they may not be covered at all. Business risks are
constantly changing. Figures from the thinktank c2e show there
was a 41% increase in claims filed with employment tribunals
year-on-year in 2006. Unfair dismissal; sexual, religious,
disability and age discrimination; bullying; stress and low
pay are now all legitimate reasons to sue an employer,
according to Head.
Getting the right cover is essential. A claim or dispute could
affect a business both financially and by damaging its
reputation. As many struggling owners are finding across
England right now, not all business can afford to bounce back
from such a blow. Our essential guide to all your insurance
needs should help you sift through the minefield and work out
what you really need to protect your firm’s future.
We asked Sam Franks from Hiscox, Mike Langton from
Jardine Lloyd Thompson and MORE TH>N's Matthew Wood what the key
risks a small company should protect itself against are
Post Date: 02/07/2007
Franks, regional underwriting manager, Hiscox
When starting a business, most entrepreneurs are nervous about
the business plan, cashflow, competition, regulation, taxation
and shortage of skilled workers to name a few. Mix that with
the excitement of launching a new business, it is no surprise
that this is a stressful and intense time. The last thing
entrepreneurs want to think about is any mishaps or
Most small businesses will acknowledge
that there could be a power failure or a malfunction in their
equipment and they might even anticipate the odd disgruntled
employee and insure themselves against such mishaps. However,
many, in particular those in so-called ‘new’ professions such
as media and IT still forget an important ingredient in their
business diet: insurance cover.
There is a huge range of cover available
to protect SMEs against a variety of risks, such as:
Office contents and computers:
covers damage to your business equipment
covers you for allegations of negligence following injury to
an employee. If an employee is injured on the way to work or
in the workplace, or even has a breakdown, you’re covered.
This cover is mandatory under UK law for most businesses with
Public liability: covers
you for allegations of negligence following injury, or
property damage, to clients or the public. A client or courier
falling and injuring themselves while visiting your offices
would be covered, for example
covers your loss of income or reasonable additional expenses
following damage to your property
Legal expenses: covers
legal defence costs for certain forms of litigation like
employment disputes or tax investigations
However, a key piece of insurance which
small firms shouldn’t be without it professional indemnity
insurance (PI). Quite simply, PI insurance protects your
business against claims made by dissatisfied clients,
particularly those who have experienced a financial loss. It
covers you for the cost of defending allegations of negligence
in the services you have provided, including any advice or
consultation you have provided.
Clearly no business wants to – or expects
to – run into problems where they could face legal action from
their clients, and PI insurance is there to cover you for
those unexpected times. Being sued by a client will not only
cost money and perhaps embarrassment, but you will be
distracted from your business while you deal with paperwork,
lawyers and court time, which can lead to loss of new
business, profits or declining turnover.
However, worryingly, Hiscox’s SME Risk
Barometer study found that half of businesses (50%) don’t
think that PI insurance is relevant for them. When there is so
much to compete on, such as convenience, quality, price of
your service, PI insurance can help you show your clients that
you are a reputable company who have an insurer to call on for
help should your error cause them a loss. The cover also gives
you the peace of mind, of course, that should allegations be
made against your company regarding the quality of your work
you will have the best defence team available.
And if you are tendering for government
contracts, PI insurance is a must, with many pre-qualification
questionnaires including PI insurance (and amount of cover) as
a standard requirement. No matter how capable you are for the
job, a public sector body is unlikely to even consider your
company if it does not have PI insurance. Make sure that you
don’t lose a contract over something that is so important yet
so simple to get.
Langton, divisional managing director, Jardine Lloyd Thompson
In any business venture there is risk and the purchase of
adequate insurance that helps manage the risk is particularly
important in the formative years of any company.
Unlike the more common purchase of motor
insurance, where most people understand the word
‘comprehensive’ or the limitations of third party, the
complexities of small package insurance and their implications
can be vast.
The actual premium cost of insurance is
negligible. If proper advice is not sought on commencement of
an insurance contract, the cost of getting it wrong can be
When considering insurance cover you
should look at the disruptive effect on your business caused
by a specific event which, for example, could be a fire at
your own premises, a fire at a major supplier or even a key
customer on which you rely for a high proportion of your
The requirements by contract to carry
certain levels of insurance vary and you need to have a cover
or an advisor who can reflect different trading conditions.
Clearly when working for public authorities and airports,
there is a requirement to have much higher levels of indemnity
(sum insured) as against what would normally be required in
There also may be a reliance on certain
machinery or third-party services: internet, telephones, post,
computer equipment, switch gear, production machines, all of
which may have a specific role within your business and their
failure through not being supplied, or because they break down
and stop you providing a service to your own customers with
loss of revenue.
When looking at your risk you need to
stand back a little and ask what the worst thing that could
happen is and how it would affect your business and its
ability to provide my product or services to my clients or
customers. The answer might be a permanent injury or
disablement to yourself or another key worker or it simply
could be that you are sited close to a petro-chemical plant,
which, if it suffered a major disaster, would result in your
being excluded from your own premises.
All of these things can be catered for in
one form or another, and it is important that you seek out the
There are many brokers that specialise in
different aspects of commercial life, as well as those like my
own company, Jardine Lloyd Thompson, which handle both
specialist and general ‘all trades’ type covers. The internet
is a good start for research and also takes the
recommendations of other people who have experienced the
service of certain brokers. Trade bodies often give stamps of
approval to brokers, so advice is also available that way.
There is no substitute for taking a
little time to do some research, seek advice or get a
recommendation. I would also strongly recommend that the best
way of identifying risk is to carry out your own disaster
recover plan. This will highlight areas of risk that you
should look to see if an insurance policy could cater for, and
may also highlight things that you could do as an alternative
to taking out an insurance contract.
Wood, propositions executive, MORE TH>N
Starting a new business takes a tremendous amount of
organisation and effort, so deciphering complex,
jargon-littered commercial insurance policies is usually way
down any new business owner’s list of priorities. Arranging
your first commercial insurance, however, need not be such a
daunting task; in fact you can learn a great deal about the
risks facing your business just by talking to your insurer.
Not only will you gain a good idea of the
kind of costs you’ll need to include in your business plan,
but you’ll also find out ways to reduce your premiums. Being
familiar with business risks and insurance is also an
important part of business planning, and demonstrates good
foresight to lenders or investors should you need to borrow
money to kickstart you business.
Good insurers can provide valuable
information on risks and how to reduce costs, for example:
Finding a commercial property with an adequate security
system already in place
Thinking about the physical security standard of locks,
windows and roofs
Producing written health and Safety policies
Appointing designated first-aiders
Implementing computer data backup procedures
Your insurer can talk you through the
information required for a competitive quote and the covers
you require but it pays to be prepared. Before putting in that
important call make sure you know your annual turnover, how
much you will pay in wages each year, what types of locks and
systems safeguard your premises, and, if you’re a contractor,
what type of premise you will be working on.
The lowest price and the right price are
two very different things and, as a business owner, the type
of insurance you opt for could have a direct effect on your
livelihood, so don’t be afraid to ask questions before you
accept a quote. Of course, every business faces different
issues, but here are a few questions to get you started:
How long will the price remain valid? The price may
change when the time comes to buy
What payment options are available? There are 0%
interest options out there
What extras are offered with the policy, such as
advisory and support networks?
Will my legal costs be covered in the event of a dispute
with a supplier or employee?
Will my revenue be subsidised if I can’t trade, for
example, if the premises was flooded?
What value of stock or money is covered in transit?
Can I increase my cover as my business grows?
Will the insurer continue to provide cover if I branch
out into other areas?
Will my premiums go down as my experience grows?
Shop around, and use the internet before
you buy. There is a wealth of price comparison sites
available, similar to those for motor insurance, and be sure
to exploit helpful small business start-up guides published on
many insurers’ websites.
But don’t be afraid to pick up the phone
if you have unanswered questions. Most importantly, make sure
you’re happy with the cover provided, and that you’re
confident you’re with a company you can trust so that you can
concentrate on running your new business with peace of mind.
Make the most of an e-Xmas
For many retailers, the Christmas season underpins
profitability for the entire year. Chris Barling, chief executive
of online software firm Actinic, offers some festive tips
Post Date: 05/11/2007
marketing ideas early
Whatever your Christmas marketing plans, run some small-scale
tests soon. Establish what works, and refine it. If search
engines matter to you, optimise in plenty of time. Keith
www.AnythingLeft-handed.co.uk, advises: “We plan ahead for
promo emails to various customer groups as they take a while
Can you handle the
If there is anything worse that having no orders, it‘s having
more than you can handle. This just produces dissatisfied
customers. The average e-tailer gets 30% more orders in
November and December. Make sure you can cope with the
increase. This includes web hosting and extra staff for
Bill Stevenson, of
www.spicesofindia.co.uk, advises ordering extra stock and
advertising for temporary staff as soon as possible. “Last
December visitors fell, but conversion rates tripled. We ran
out of many Christmas gift sets and could not get new stock.
This year we ordered a lot more.”
Sort your logistics
Make sure your logistics supplier can cope. To avoid missed
deliveries, let customers select delivery to their work
address. Robert Johnston, of
www.gentlemans-shop.com, says: “We email customers their
parcel tracking details and confirmation of delivery date.
This dramatically reduces calls about deliveries.”
Last December visitors fell, but conversion rates tripled.
We ran out of many Christmas gift sets and could not get
new stock. This year we ordered a lot more
“Don't be a bah-humbug! Decorate your site and get into the
Christmas spirit,” says James Auckland at
www.lunaspas.com. Find creative ways to mark the season.
Put gift ideas on your homepage, and stock Christmas-themed
items. Remember to change the pages on Boxing Day.
Last minute shoppers
Cite a final ordering date for Christmas delivery on every
page, highlighted when the deadline has passed. Michelle
Thomas, of One Red Sky
www.oneredsky.com, a contemporary furniture business,
says: “We have to allow seven days for delivery, so we liaise
with suppliers closely. Last order dates are published on our
site, and we send an email reminder to customers.”
Customers in a rush
Most online shoppers are in a hurry, particularly at
Christmas. Help them out with a search capability that can
match by category and price. Text-based searching is no help
when you want a gift for less than £10 for your eight-year-old
niece. Another aid for rushed buyers is a gift-wrapping
service. It can also increase your margin.
Upsell to maximise the
Where gifts need additional items such as batteries, ensure
they can be ordered together. Suggest similar gifts and
incentivise extra purchases with offers like 'buy two and get
“Thank your suppliers, as well as your regular customers,”
www.lunaspas.com‘s Auckland. Good supplier relationships
can help resolve problems. Consider offering discount during
January to suppliers and good customers.
Keep a sense of humour
Robert Johnston once had an irate customer repeatedly phoning
on Christmas Eve, “about the delivery of his father‘s missing
present. He accused me of ’ruining his Christmas‘. Just as we
closed, he called to apologise. His sister had signed for the
parcel, and dad‘s present was already wrapped and under the
Advertise January sales
Plan your January sale early. It gives ’value shoppers‘ a
chance to clear all that dead stock for you. Finally, book a
well-earned rest for February. You will probably need it.
Installing a wireless network on your own
premises or equipping staff to access hotspots on the move
means easy access to the internet, email and company systems
from large parts of the country. And that brings all sorts
of other business benefits
Post Date: 04/10/2007
direct marketing company More2 moved into its newly
refurbished central London offices three years ago,
director Claire Nicholson decided to install a wireless
network (Wi-Fi), as well a wired one.
The decision has paid off. The company has grown rapidly
and every time someone joins, the firm has to find them
an internet connection. “The rooms only have so many
network points so if we didn‘t have wireless, it would
really restrict how many people you could get into a
room,” she says. “Having Wi-Fi gives us the flexibility
to decide where we want to move next, as opposed to just
basing it around where the network points are.”
not the only benefit. More2 staff are equipped with
laptops so when they give a presentation to a client,
they can take the laptop into a meeting room and deliver
a presentation that includes pertinent websites without
the need for trailing cables. And clients, too, can use
More2‘s secure wireless connection if they want to work
between meetings or check their email.
Wi-Fi (the popular name for the 802.11 radio
transmission standard) provides a wireless connection to
an access point. That access point, also known as a
hotspot, is in turn is connected to the internet.
Because the vast majority of laptops – as well as many
PDAs – are now Wi-Fi-enabled, you can take your laptop
out on the road and connect to the internet from
anywhere that has a hotspot. All without the need for
“Business is absolutely embracing Wi-Fi,” says Owen
Geddes, director of business development at Wi-Fi
provider The Cloud. And it‘s not just larger companies.
Geddes has seen a big uptake of Wi-Fi among small
businesses, because of the flexibility it offers, not
just within the office but to mobile employees: sales
staff, for example, who need internet access while at
the airport or on the train.
Another small firm that is benefiting from a Wi-Fi
system is 82Ask, a company that sends answers to any
question by text. It has been using T-Mobile‘s Wi-Fi
service since it was founded four years ago and sees it
as a major reason for its success. “We had to be very
mobile so we could meet with potential investors,” says
the firm‘s chief executive Sarah McVittie. “We‘re based
in Cambridge and a lot of meetings with partners,
clients and investors are down in London. It was very
important to us that we could always connect to the
office. It was a key aspect of how we were able to get
as far as we did.”
Finding a hotspot is getting easier. There are now
approximately 9,000 commercial hotspots in the UK, about
7,500 of which are owned by The Cloud, which then makes
them available to other service providers such as O2 and
BT OpenZone to sell to customers. Most of the remaining
hotspots are owned by T-Mobile and BT OpenZone.
Hotspots tend to be located in airports, hotels and
coffee shops, such as Starbucks, as well as on GNER and
some Virgin trains. The number of public hotspots is
growing fast: The Cloud plans to extend its coverage to
6,000 more bars, pubs and cafés, and has struck an
agreement with McDonald‘s to put Wi-Fi in 1,200 of its
branches. Although Wi-Fi coverage is usually indoors,
the City of London now has an outdoor Wi-Fi network and
we can soon expect to see outdoor coverage in
Manchester. Other cities will no doubt soon follow suit.
So if you‘re thinking of using Wi-Fi, how do you go
about it? The answer depends on whether you want staff
to use Wi-Fi when they‘re out on the road or when
they‘re in the office, or both. To use Wi-Fi on the
road, staff will need to be equipped with a
Wi-Fi-enabled laptop or another mobile device. When they
find a hotspot, they may be asked to pay for it there
and then by entering their credit card details or they
may be required to buy a voucher.
’Because the vast majority of laptops – as well as
many PDAs – are now Wi-Fi-enabled, you can take your
laptop out on the road and connect to the internet
from anywhere that has a hotspot. All without the
need for cables‘
Typically, Wi-Fi access time is sold in units of 60
minutes, costing £5. This can be wasteful if you only
use, say, 40 minutes. But there are plenty of other
options. The Cloud offers a ’paygo‘ voucher, which means
you pay in advance for 30, 60 or 180 minutes: if you use
only a few of your minutes at one location, then you can
use up the rest at another Cloud location.
You could also sign up with a single provider, such
as BT OpenZone, which offers several different payment
options: one-hour, one-day or 30-day vouchers; a top-up
account paying by the minute; or a monthly subscription.
If your Wi-Fi usage is high, it is worth considering a
monthly subscription: BT OpenZone charges £10 for 250
minutes a month or £25 for 4,000 minutes a month,
including the use of OpenZone hotspots abroad. The
disadvantage of a monthly subscription is that it limits
you to one supplier: it can be frustrating to take out a
subscription to one provider, only to find that the
hotspots in the hotel in which you‘re staying are
provided by another.
Another option is to take out a monthly subscription
to a reseller such as Trustive, which gives access to
hotspots provided by 70 different operators. This is
particularly useful if your staff travel abroad a lot.
Currently, however, Trustive does not have deals with BT
OpenZone or T-Mobile.
Down to the wire
What about Wi-Fi in the workplace? If you are moving
into a new office, then it is worth considering
dispensing with cables altogether, claims James Walker,
product manager of Wi-Fi hardware provider ZyXEL,
because installing Wi-Fi can be up to 70% cheaper than
installing a cabled network. The newest version of Wi-Fi
– 802.11n – is at least twice as fast as previous
versions, making it comparable to the speed of a wired
network. Although desktop PCs are not always
Wi-Fi-enabled, you can buy wireless cards for them for
less than £50.
Even if your building is already wired, you can still
benefit from adding a handful of wireless access points.
You will probably need one or two in each room, as
although a signal travels several hundred feet, it can
be blocked by walls. As More2 found, you can employ more
staff without adding extra cables, and you can enjoy the
flexibility of being able to carry a laptop from room to
room without worrying about losing your internet
If you do use Wi-Fi, you should be extra aware of
security issues, particularly if you are transmitting
sensitive data such as customer details over the
internet. There are three main security issues with
Wi-Fi, says Tony Neate, managing director of Get Safe
Online: eavesdropping, hacking and freeloading.
Eavesdropping means that someone within the same
range is able to read your emails as they are
transmitted. Hacking occurs when people are able to gain
access to your computer, while freeloading means that
someone is piggybacking your wireless connection for
free, giving you only half the bandwidth you have paid
There are some basic steps you can take to ensure
security (see separate box). But the best way to make
sure no one can eavesdrop on your business
communications when staff are out and about is to
install a virtual private network (VPN), which enables
mobile users to connect securely to the office network.
“A VPN creates a tunnel of information that goes from
one computer to another in a controlled way that nobody
else can see,” says Neate. The information that is sent
is encrypted and cannot be broken into. You can buy VPN
software from a supplier such as WatchGuard or SonicWALL
and set it up yourself, or ask a provider to do it for
Once you get used to having Wi-Fi on the road, it can
prove to be frustrating to find yourself without access.
You can get around this by also using the mobile phone
network, which has almost universal coverage. 3G cards
are available for laptops, enabling you to connect to
the internet over the mobile phone network, but note
that speeds are much slower and costs higher. If a lot
of your staff are mobile, you could consider a combined
solution, allowing staff to use the mobile phone network
when a Wi-Fi hotspot isn‘t available. Some PDAs and
laptops will now switch seamlessly between the two.
Most businesses using Wi-Fi now say that they
wouldn‘t be without it, and both Nicholson and McVittie
believe that having Wi-Fi has helped their company
expand. “As a growing business, it really does give you
the flexibility to move very quickly and not be stuck by
having to go back to the office to send emails,” says
McVittie. And that could prove priceless for a small
Could social sites work for you?
Websites such as Facebook, MySpace or YouTube
could be used to recruit staff, research business ideas and
network with existing contacts, according to a new survey
Post Date: 01/10/2007
vast majority of computer users feel social networking sites
such as MySpace or Facebook can be used for business purposes
and one in 10 (11%) already uses them for that end.
According to a survey by email research
specialists emedia, 87% believe such sites can be used as a
means of doing business with networking (65%), exchanging
ideas (58%), getting advice (44%), recruitment (43%), research
(35%) and selling (31%) the main possibilities.
The research showed that 81% of those
surveyed use networking sites. The top five websites
respondents have heard off are MySpace (89%), YouTube (88%),
Friends Reunited (81%), Facebook (73%) and Bebo (51%). But the
most popular sites among users were Friends Reunited (47%),
YouTube (42%), MySpace (39%), Facebook (26%) and LinkedIn
Users of social networking sites visit
these sites on a regular basis and almost half of them (48%)
admit using these websites at work. Nearly one in four (24%)
users logs in every day, with half of them logging in several
times a day. Up to 45% of users log in at least once a week.
87% believe such sites can be used as a means of doing
business with networking, exchanging ideas, getting
advice, recruitment, research and selling the main
But there are also concerns about the
security and reliability of personal data held on such sites,
with nearly two-thirds (62%) saying they were worried about
the safety of information.
It also revealed that nearly one in three
(31%) users had already entered false information about
themselves to protect their identity, which should also be of
concern to someone thinking of approaching people using such
sites for business reasons.
Half of users found advertising on social
networking sites intrusive. Interestingly, 72% of users opted
out of email newsletters from these sites and up to 93% opted
out of email newsletters from selected third parties.
How safe do you feel online?
The Federation of Small Businesses has backed
proposals by the House of Lords to tackle the growing problem of
Post Date: 14/08/2007
Federation of Small Businesses has warned that small companies
are failing to make the most of the potential of ecommerce due
to concerns over online security.
According to the organisation, just 18%
of small businesses have a transactional online presence and
only 1% derives all their sales through the internet. Almost
one in five small firms (19%) said they were concerned about
credit card fraud, it added, although only 6% have actually
been victims of this crime.
The FSB’s warning follows a recent report
by the House of Lords on personal internet security which
highlighted the growing problem of internet crime.
The small business lobby group is backing
proposals made in the personal internet security report,
including the suggestion that victims of online fraud should
be able to report such crime to the police and receive a crime
reference number in the same way as any other type of crime.
E-crime needs to be given the same status as crime that is
committed against a bricks and mortar business. Only when
this is accomplished can more small businesses benefit
from having a stronger online presence
It is also getting behind proposals to
force banks to take some responsibility for losses incurred as
a result of electronic fraud, claiming many small businesses
and online retailers are caught by charge-backs from card
fraud which they often receive months down the line, even
after they think a transaction has been successfully
“E-crime needs to be given the same
status as crime that is committed against a bricks and mortar
business,” said David Croucher-Jones, FSB home affairs
chairman. “Only when this is accomplished, by implementing the
Lords recommendations, can more small businesses benefit from
having a stronger online presence.
“Customers will also benefit from the
increased choice and convenience that online security can
bring,” he added.
The FSB is also supporting work to
establish a national e-crime co-ordination unit with the
Metropolitan Police and backs initiatives such as Get Safe
Online, which are designed to create a safer online
environment for businesses and consumers.
Who handles your IT system?
A third of IT managers in small businesses have no
formal training and 40% often double up in another role, research
suggests. And this can cause havoc for long-term data storage
Post Date: 23/10/2007
A third of IT managers in small companies
have no formal training, according to research conducted by
Loudhouse on behalf of database company FileMaker.
The study also revealed that 40% of
managers in small firms have other responsibilities in
addition to IT; a figure which rises to 50% in companies with
fewer than 20 employees.
The most job role to be paired with IT
responsibilities was director (41%), operations (36%),
marketing (18%), finance (15%), sales (13%) and HR (13%). This
suggests that in many cases it is the owner/manager himself
who takes on the role of IT manager.
One of the most challenging issues for IT
managers was managing the storage and cost of emails, the
research suggested. This problem is made worse by the fact
that 60% of employees use their email system as an ad hoc
database, rather than saving contacts and attachments and
storing them on a dedicated database.
Employees in small companies were also
far more likely to have access to the software and network
resources needed to create simple databases, with 71% of staff
having such privileges in small firms compared to just 22% in
The role of IT manager in SMEs is undergoing a sea change:
a typical IT manager is seen to be juggling multiple roles
and learning ’on-the-job‘ rather than undergoing
The functions most likely to go
’off-piste‘ and create their own databases were sales (61%),
finance (51%), marketing (42%), operations (33%) and HR (31%).
Not surprisingly, IT came last with just 25%.
“The role of IT manager in SMEs is
undergoing a sea change: a typical IT manager is seen to be
juggling multiple roles and learning ’on-the-job‘ rather than
undergoing professional training,” the report concluded.
“Simultaneously, employees, particularly
in small businesses, are encouraged to create their own
databases and are given the tools to achieve this. With IT
skills and resources more dispersed through the business, the
result is that employees have created a wilderness of data
files outside existing processes.”
Livingston's Stephen Lark guides us through
the ins and outs of I.T rental
Post Date: 02/11/2007
you have no cash constraints and want to own the
equipment for two years or more then I suggest outright
purchases as the most cost effective option and you need
dwell no longer on this article.
Now that you are all still with me we can look at things
in more detail and specifically is rental an opportunity
for you. Few businesses begin life with a bottomless pit
full of cash; indeed the term ‘running on a shoestring’
is most likely to be applicable. Consider for a moment
that you have started or grown your business and
investment in IT becomes necessary. Consideration must
now be given to the question of purchase, lease or
rental. Let’s look at some of the pros and cons of each
to help you make an informed decision.
Outright Purchase: If you are still
reading this then cash flow is likely to be an issue for
you so purchase may not be a good option. Advantages: Providing the intention is
to own the equipment for at least two years or until
obsolescence then generally it is the cheapest option Disadvantages: Uses vital capital that
could be directed to revenue generating activities,
hidden costs such as support and disposal to WEEE
directive, difficult to respond to fluctuations in your
Leasing: Very fashionable at the moment Advantages: Conserve capital Disadvantage: Inflexible, high cost of
termination is often the complete lease amount,
difficult to respond to fluctuations in your business
success, support costs, may not get accepted to take on
a lease either because order is too small or your credit
rating is insufficient
There is another way and that is rental. In the short
term rental will always be more expensive than purchase
or lease but when cash flow, potential risks of
ownership and flexibility are factored in then it soon
becomes an attractive proposition. You may even find
that the overall cost is lower because the rental
company can pass on the benefits of its volume
Rental should not be pigeon holed as a short term
solution. Sure it is the only cost effective way to
conduct short term trials, competitive benchmarking,
overcoming lead time issues or project budget
Let’s look at some figures:
IBM system x3755 (88774RG) = £4,773
Rental Price for 12 months = £3,300 (£275 per
After the first year there may be a purchase option with
a possible credit against the rental. Ask your rental
company for the options or see if they will build a
package to suit your circumstances. Let’s take a typical
package offered by Livingston (Easy2Source) which allows
for continued rental at a lower monthly rate or purchase
with credit against the rental paid. In this example
let’s take the purchase and credit because the server
has proved fit for purpose and meets your requirement
for the next year or two.
In the short term rental will always be more
expensive than purchase or lease but when cash flow,
potential risks of ownership and flexibility are
factored in then it soon becomes an attractive
This is only an example used to illustrate what can be
achieved. Here we see that the price of the ultimate in
flexibility is just over £300. What price risk
If you enjoy high discounts off list price, circa 30%
and above, I would suggest that where possible you
purchase outright. There are risks and you should make
sure you fully understand all the support and disposal
costs. Also make sure your vendor provides a system that
is fit for purpose and has room for growth. Be
conservative with your business plan, with an outright
purchase policy it is better to stage your purchases to
meet your needs as you grow. Remember it is very
difficult to resale the equipment if you have a downturn
Leasing, while fashionable, is potentially high risk and
may not even be an option for your company anyway. If
this is an avenue that provides a solution to your cash
flow at cost effective prices then always underestimate
your needs. Plan for the leasing of 75% and find an
alternative such as rental for the remaining 25%. This
way you should be able to enjoy the benefits of low cost
leasing with much lower risk in the event of a downturn
in your business.
Rental is a little fancied option that in today’s
volatile business climate is making sound financial
sense. If your discounts are not circa 30% then always
explore a rental financing option. Mix rental and
leasing for a low risk solution or take straight rental
as a no risk solution. Your rental company will always
be looking to help you design a rental package. Decide
what best suits your business, whether it is low monthly
payments or a lower purchase price at the end, or indeed
some mid rental refresh, and ask your rental company for
a quotation. Remember that at all times rental offers a
virtually risk free solution.
Livingston are Europe’s largest provider of IT rental
products from all the major vendors with a variety of
rental services from daily rentals to yearly rental
packages tailored to meet your needs.
ECM: what‘s in it for SMEs?
Managing director of Cygnet, Redmond Schley, gives
us the lowdown on enterprise content management
Post Date: 15/10/2007
F. Kennedy once said “The one unchangeable certainty is that
nothing is certain or unchangeable.” Wise words that are
relevant, whether you are leading one of the most powerful
nations in the world or a small medium enterprise (SME) with
The rising tide of enterprise content
An SME‘s ability to anticipate and handle change is
fundamental to its success, its pace of growth and ultimately
its survival. As businesses grow, the amount of information
entering their organisations increases to the point that
document and data handling can become a serious, costly
In the past companies had to grapple with mountains of
incoming paper-based documents and records. Nowadays they also
have to manage an influx of electronic information: emails,
e-orders, web forms and so on. Collectively, this array of
organisational information is referred to as “enterprise
Business continuity threatened
For some SME‘s content management consumes increasingly more
time and attention than their core business. The company is
distracted and its ability to deal with daily operations is
In the worst case, SMEs spend so much time administrating
current business they have little time for new business
development. Or worse still they fear the administrative
implications of generating too much new business and
consciously curtail sales for a while. Such activity soon
leads to peaks and troughs in activity and is a threat to
business continuity. It has far-reaching and sometimes
irreversible effects on all operations, from sales and
marketing to customer service and international trade.
By handling enterprise content effectively, SMEs can focus on
What is ECM?
In recent years, advances in electronic scanning,
classification, process management and storage technologies
has lead to an upsurge in Enterprise Content Management (ECM)
According to AIIM Europe, the ECM Association, “ECM is the
technologies used to capture, manage, store, preserve and
deliver content and documents related to organisational
processes.” ECM tools and strategies allow the management of
an organisation's unstructured information, wherever that
information exists.” ECM solutions vary dramatically in terms
of capabilities and price, but most set out to achieve the
Minimise time wasted finding or replacing documents and
Significantly reduce operating and administrative costs.
Enable fast, efficient handling of customer enquiries.
Make it easy to find documents, particularly when being
used by others.
Provide information to overseas clients or external
entities without delay.
Maximise information security.
Provide an effective disaster recovery strategy.
Achieve consistent quality.
Provide proof that your company acts honestly and with
Where do SME‘s start?
Nowadays it‘s increasingly common for start-ups to consider
information management needs from the outset. They implement
ECM solutions as the cornerstone for their entire
administrative processes. This is by far the best way to
begin, not least because it eliminates the need for backfile
conversion or staff re-training.
An SME‘s ability to anticipate and handle change is
fundamental to its success, its pace of growth and
ultimately its survival
However start-ups often have notoriously small budgets for
these kinds of projects, and in the early days sales and
marketing activities often take precedence. Nevertheless, SMEs
must remember that administration can become a costly
distraction that inhibits growth. By laying solid foundations
early on SME‘s can focus on adapting to change. They must also
select a solution that has the functionality, flexibility and
scalability to accommodate future growth and previously
There are a number of established, affordable, feature-rich
solutions on the market that are specially targeted at SME
businesses, so be sure to evaluate a selection prior to making
a final decision. Visit exhibitions, meet the sales and
development staff and watch demos. Some suppliers even offer
short term trials, enabling you to try before you buy.
What if content management is already an issue?
If your business is already compromised by spiralling costs,
wasted time and poor customer service, it‘s not too late to
change, but you must act quickly. Some fear this change. Their
perception is that it will cause organisational upheaval and
resistance, but this is rarely the case.
Experience shows that the vast majority of SMEs have the
foresight to create an effective file plan – albeit
paper-based – right from the beginning. It is a system that
generally works, and everyone understands it, but it‘s costly
and time consuming to administer. The ECM solutions most
suited to SME implementation simply map onto the manual file
plan so that the concepts and parameters remain the same. They
automate the file plan, as well as introducing powerful new
tools to enable all content to be accessed, shared, traced,
managed and archived instantaneously, from any PC via a web
ECM implementations benefit SMEs in all industry sectors. The
number one benefit is increased profit. They also enable
superior customer service at lower cost. Authorised staff,
customers and suppliers have direct, round-the-clock access to
accurate information, wherever they are located. Day-to-day
operational costs (faxes, photocopies, paper, time, phone
calls etc.) are reduced and there are fewer administrative
interruptions. ECM enables current employees to work more
efficiently, thereby saving time and cost. As a result,
recruitment decisions can sometimes be delayed. Last, but
certainly not least, ECM solutions provide a detailed audit
trail, assisting SMEs with regulatory compliance.
In order to survive and grow SMEs must anticipate and manage
change effectively. Administration and information management
often hinder progress, but the implementation of affordable,
effective ECM enables business leaders to focus on core
business, not content. Those who savour the change have most
Voice of the future
A combined voice and data network allows small
companies to make and receive work calls from almost anywhere,
save money and improve customer service, all from one single
system. And while there are still concerns over returns on
investment and confusion over the benefits, VoIP is here to stay
Post Date: 04/10/2007
smaller businesses are in a better position than ever before
to take advantage of the sort of IT and telephony systems used
by larger and more profitable companies. One of the best
examples of this is the rise of internet protocol telephony (IPT),
which is now spreading steadily in the small business sector
as equipment prices fall and the choice of products and
A growing number of small businesses are now in a position to
invest in converged, IP-based networks that carry both voice
and data, bringing valuable operational and maintenance cost
benefits, with only one network to look after and changes and
upgrades implemented remotely. At the same time, the
flexibility offered by Voice over IP (VoIP) and IPT
applications is also becoming more appealing to small
VoIP makes it easier and cheaper for staff to work flexibly within the
office or from home or remote locations, giving companies the
opportunity to attract and retain key members of staff as well
as to save money on heating, lighting and office space.
Companies operating from more than one site can transfer calls
between them over VoIP for free, as if between office
extensions. And VoIP and converged networks can also drive
improvements in customer service, with caller-identification
technologies integrated with customer databases providing
call-handling staff with instant access to customer details,
and intelligent routing systems distributing calls to those
staff best qualified to deal with specific customers or
Trevor Evans, marketing manager for the small and medium
business sector at Alcatel, identifies the three key reasons
small companies are considering VoIP as cost savings on calls
between sites, the potential for customer service improvement
and the ability to offer flexible working.
“At the SME level the number of companies looking at an IP
system has definitely increased, particularly as prices come
down, but also because of these other drivers,” he says. “We
find that in small firms about 25% of staff are mobile workers
to some extent and mobility is more easily achieved with an IP
Alcatel‘s Extended Communications Server, which can be
linked with the company‘s OmniPCX telephony system, enables
this kind of mobility by giving remote workers secure
connections into office networks to pick up emails and
voicemails, view both their own – and their colleagues‘ –
diaries, and access business information such as customer and
supplier details. “It extends your communications, so when
you‘re out of the office you get a similar level of service as
you would in the office,” says Evans.
“You access the server securely through a web browser or a
mobile phone browser and there‘s no special software needed,”
he explains. “When you finish the web session there‘s nothing
left on the PC. I can get all my calls wherever I am, and if I
want to make a call I could connect back to my server, so I‘m
not making the call from my mobile, but through my office
phone and I‘m not incurring mobile phone charges or hotel
Access all hours
Chris Jagusz, chief executive at another communications
service provider, Eurotel, agrees mobility has become a
crucial motivator for firms looking at VoIP. “It also allows
businesses to extend their working hours,” he says. “That can
be useful when a customer does a lot of business online,
meaning there‘s a reasonable amount of evening work, including
phone enquiries. We‘ve got a [B2B] customer that uses it for
service calls. The call comes in and can be directed to the
technician at home, straight to the person who can sort it
out. That‘s where VoIP really comes into its own. Previously
this kind of flexibility would have been extremely expensive
but now you just need a handset worth £100 or £200 and a
Araminga is an example of a small business that is
realising the benefits of VoIP. As a company that provides
mobile phone car kit installation services to clients based
across the UK, eight out of its 10 employees are almost always
on the road. It originally considered purchasing a phone
system that would have cost more than £4,000 but now uses
Timico‘s VoIP for Business service that cost in the region of
£300 to set up. This service is offered in conjunction with
Nortel Networks and can run as a standalone IP PBX or function
alongside an existing PBX.
Aside from the initial and ongoing cost savings, the main
attraction is the system‘s call-routing capabilities, which
can transfer calls coming into the office to mobiles, so staff
need not worry about there being no one in the office to
answer the phone. The system also enables several calls to be
routed into the organisation simultaneously over the single
analogue line in the office, using ADSL and VoIP.
’VoIP will be adopted everywhere when the price falls
below the cost of traditional systems. That‘s something
you can already see happening. Eventually, as
manufacturers go over to it, customers won‘t ask for it.
It‘s just what they‘ll get‘
The company started using the system in spring 2005. “We‘ve
had a seamless transition and it‘s working very well,” says
the company‘s managing director Steve Chrich. “I can work from
home and log on as though I‘m in the office. If staff can‘t
get in in the morning, they can just log in at home. If you
want to add another person you just buy another phone, and if
you wanted to decrease in size you won‘t have a big system to
manage.” The company pays about £450 every month for line
rental, internet connectivity and telephony. “It‘s increased
profitability, productivity and capital cost outlay is kept to
a minimum,” Chrich adds.
Lost in translation
Yet companies like Araminga are still in the minority. Often
the reason is economic, with many smaller companies unwilling
to write off existing analogue PBX systems, and a common
suspicion that if the system‘s mobility-enabling qualities are
not well used, it will take a long time to get a return on
Vendors believe those doubters will be won over by the
obvious customer service improvements IPT and converged
networks can offer. “The real benefit would be unified
communications for consistent and fast presentation to
clients,” says Charles Davis, chief executive at the SAS
Group. “It does give an edge to small business clients to be
able to react and update clients fast, because it allows them
to fight above their weight.”
But even if more small companies do start using VoIP,
setting up a converged network is still often too great a
The choice of supplier, and the level of detail required in
planning the network infrastructure are crucial, warns Davis,
who recommends using the assistance of a consultancy and/or a
vendor-neutral systems integrator. “The problem with IP
telephony is that the industry confuses what it is,” he says,
stressing the value of investigating exactly what the
different manufacturers and suppliers offer.
“A lot of small firms don‘t have a huge amount of time to
investigate, so they get confused as to what they‘re buying
and why. IP telephony is a pure call system that requires a
lot of planning and investment,” adds Davis. “That‘s why
there‘s a barrier, because you really need to pay someone else
to put it in and maintain it. There is a bigger understanding
required, because these products change the way you work and
The danger is that without adequate support, the economic
part of the business case may be diluted by any unforeseen
implementation and maintenance costs. “A lot of small
businesses end up only buying half a solution, and they might
not be able to set up the integration to the email server or
firewall,” Davis explains. “There may be hidden costs in
systems integration, staff training and refining business
processes. Larger companies can get the skills they need
in-house, but that‘s not an option for smaller businesses.”
Without an understanding of how convergence changes the
company‘s use of IT, there is also a danger of being caught
unaware by the knock-on effects. “One thing that catches a lot
of people out is data growth, with voicemails, faxes and
emails all coming into one inbox,” explains Davis. “Suddenly
their back-up systems can‘t cope.”
One way to avoid some of these challenges is to outsource some
or all technical functions. BT added VoIP to its business
broadband services 18 months ago and has now launched a
dedicated office extension service aimed at organisations with
10 to 50 employees, with a single broadband line used to run
up to 10 extensions. “It would be good for anybody who doesn‘t
want to put in a capital outlay, who‘s moving premises or has
a particularly flexible workforce,” claims Chris Lindsay,
general manager, broadband, VoIP and software services
propositions at BT.
Among BT‘s customers is law company Woolley & Co, which
specialises in family and divorce law. Its 11 lawyers all work
from home. “Communicating with each other and with clients is
clearly a big issue because there‘s no office to stick a
physical switchboard in,” reveals Andrew Woolley, founder of
“All our software and files are server or web-based.
Because we work as a virtual firm and our clients want us to
be contactable anywhere, we need our information with us,” he
adds. “Also relevant is that we get a lot of clients from
abroad – Brits or people married to Brits – who find us on the
web.” So one of the most important reasons Woolley & Co was
interested in VoIP was a need to reduce the amount of money
being spent on international calls. “The intention is that,
wherever a lawyer is, they can answer queries and have all the
information at their fingertips,” says Woolley. “We will try
to be totally paperless which for a law firm is a bit of a
The company is extending a trial of VoIP that started in
the spring. Security was a key concern. “We were worried about
security issues but that‘s why I use BT, because my insurers
and the Law Society don‘t ask so many questions if we use a
well-known provider as if we used someone they‘d never heard
of,” explains Woolley. “There‘s also the fact that we
represent some very well-known people going through divorces.”
Those security concerns have now been overcome, as have
worries over call quality. The one significant teething
problem, a slowing of internet speed when a VoIP call is being
made, has been put down to the relatively slow 2MB connections
the lawyers currently use as part of their existing BT service
package, and Woolley is confident this problem is temporary.
Of course, IP telephony and converged networks are still
not suitable for every small business. “If you‘re single site
and you just use your phone system to make and receive phone
calls, you don‘t want to integrate it with any other
applications and you don‘t have a great deal of mobility, then
it would be a mistake to adopt all these new technologies,”
admits the SAS Group‘s Davis.
But eventually the day will come when the economic
advantages of IP telephony become too compelling and outweigh
the initial setup costs. “VoIP will be adopted everywhere when
the price falls below the cost of traditional systems,” claims
Eurotel‘s Jagusz. “That‘s something you can already see
happening. Eventually, as manufacturers go over to it,
customers won‘t ask for it. It‘s just what they‘ll get.”
Main IT gripes revealed
Everyday IT issues, security and email or internet
downtime pose the biggest challenges to today‘s small businesses,
according to research by Connect
Post Date: 13/09/2007
biggest IT issue for small companies is being able to cope
with the day-to-day task of running an effective IT system,
according to research released by Connect.
The organisation found that 37% of
directors and IT managers said regular IT hassles were their
biggest problem, followed by IT security at 32%.
Security was found to be more of a
problem for larger companies, with 35% of firms with fewer
than 50 employees listing this in their top two IT headaches,
compared to just 27% of larger companies.
A lack of understanding of basic IT
issues by staff was also cited by 30% of respondents, although
this was less of a problem in smaller firms.
Three in 10 (30%) small companies cited
cost in their top two biggest issues, compared to just 22% in
“Much of the IT debate currently revolves
around what we’d call ‘big ticket’ items,” said Mark MacGregor,
Connect’s chief executive. “Concepts like mobile working, Web
2.0 or open source software dominate the news agenda for IT.
The IT supply industry needs to assess this kind of
discrepancy carefully and to find better ways to ensure
that small companies have the internet and email tools
they need to run and expand their businesses
“While we’re certainly not dismissing
those concepts, the reality is that for the entrepreneurs and
owner-managers that drive much of the innovation and growth in
our economy, the issues are really much simpler,” he added.
“They just want robust, cost-effective IT
systems that actually work. One of the challenges we need to
address as an industry is how we can deliver more of that type
of IT to this vital part of UK plc.”
Smaller companies were also more likely
to complain about the amount of email/internet downtime they
suffered, he added. This was cited by 24% of small companies
compared to just 12% of larger ones.
“The IT supply industry needs to assess
this kind of discrepancy carefully and to find better ways to
ensure that small companies have the internet and email tools
they need to run and expand their businesses,” added MacGregor.
We asked Alan Moody from Mamut, Dawn Baker
of Sage UK, Rachel Bown from MYOB and Palo Alto Software's
Alan Gleeson what the main issues in business management
software will be in 2008
Post Date: 11/09/2007
Moody, managing director, Mamut UK & Ireland
In July 2007, Gartner released a report naming the top 10 IT
trends for 2008, pointing to Web 2.0, Software as a Service
(SaaS) and wireless internet as three buzz topics set to
move mainstream. The three trends are closely linked and
stem from a fundamental change in the way people are using
SaaS, also known as ‘hosted’ software,
is a delivery model where a vendor develops business
applications and hosts them on the internet for customers.
Unlike traditional software that a customer buys and
installs directly on to a PC, with SaaS customers do not pay
to own the software itself but rather for using it.
It may seem complicated, but most
people are already familiar with the SaaS model and just
don’t know it. Everything from Yahoo! Mail to instant
messaging programmes like MSN Messenger are hosted software
The benefits of SaaS to a small
business centre on cost savings, flexibility and management,
Avoiding upfront cost barriers that can obstruct
businesses from obtaining the benefits of more
sophisticated software packages;
Enabling services to be accessed from almost anywhere,
centralising information access and overcoming the
information silos that can limit organizations;
Removing the need for having in-house IT skills.
Some applications are more likely to be
accessed as services than others. Salespeople, for example,
can benefit from SaaS because having an application over the
internet reduces the need to be in the office and
centralises data so it isn’t trapped on a laptop where it
can’t be shared with others. Financial applications provide
benefits in terms of centralisation of data but some
organisations may find the risk too great to outsource such
critical information to a third party and put it at risk of
a communication disruption.
Such concerns around security and
potential risks with placing important financial and
business data online has led some companies to offer a
‘hybrid’ software plus services (S&S) model as an
alternative to a restrictive SaaS model. The S&S model
provides the best of both worlds by enabling some
information to be kept locally on hard drives and other
information to be hosted on the Internet.
Apple iTunes is an example of this: the
iTunes player is installed on a user’s PC, but new music is
downloaded through the internet. Mamut Business Platform (MBP),
launching in late December, is also built on the S&S model.
MBP will offer users access to complete enterprise solutions
to manage financial, logistical, CRM and sales force
information at anytime, anywhere and on any compatible
Whether the software is installed or
delivered over the internet is really just a choice of how
we want to access information. In fact, we need both methods
combined into a seamless user experience.
How the software industry develops will
continue to be tied to other developments such as the
devices that are available and their influence on working
practices. In some cases this will be done by using
installed software, in others by using software as a service
and in many cases by using a combination of the two.
Baker, head of marketing (small business division), Sage UK
Deciding what software to buy for a new business can be
difficult as there is a lot out there to choose from and the
market is changing.
We know from listening to our customers that more businesses
of all sizes are requesting software applications that work
together to help them manage their businesses as efficiently
as possible. Practically, this could mean that a company’s
accounting software shares customer details with its
customer relationship management tool, links in with its
payroll software or allows it to take customer payment
directly from within the accounts software.
This ‘integrated software’ saves businesses time and money
as it removes the need to re-key data into various pieces of
software. They can now spend this time doing what they do
best: running their business.
Another factor affecting the software market for small
businesses is the increase in legislation in the UK. A
recent Sage Heartbeat survey showed that a staggering 42% of
businesses cite red tape as the reason they would not start
up in business again. With this in mind, small businesses
are requesting software to help them manage the burden of
this legislation, such as accounts software to help them
manage their VAT or HR software to help them to manage staff
Changing attitudes towards technology have also influenced
the way in which people starting up in business are using
software. More people than ever have grown up using
computers and factors such as increased bandwidth mean that
businesses now have the choice and flexibility to use
software exactly how they want to, whether it’s provided
over the internet or as traditional desktop software.
For more information on Sage’s range of business
management software, please visit
Bown, head of marketing, MYOB UK
Around half of small businesses in the UK use software to
manage their accounts and business, leaving the rest to
struggle with outdated spreadsheets or, worse, paper-based
ledgers, leading to fears of a ‘two-speed Britain’.
Education on how dedicated software can
contribute positively to a small business’ overall success
and profitability is still needed. But we are pleased to see
this message finally getting through with a sharp increase
in the adoption of business software predicted for next
Other more noticeable trends include
the increase in the number of small businesses now buying
software within the first three months of their business
life; an essential factor in bedding down good practice and
getting the visibility easily before it becomes even more
And now size and geography are no
longer such issues for small business, to even the
competitive landscape further, they are demanding more and
more functionality. But affordability and training is the
The outlook is challenging for British
small business owners. The statistics depict an ambitious
small business owner who is bravely taking on the increasing
challenges of a modern business environment. The financial
burden is reaching a tipping point and is affecting the
profitability and performance of many small businesses.
With compliance and tax issues growing
in volume and complexity, small businesses must implement
more rigorous financial management systems and techniques to
release the valuable time they spend on administrative tasks
and invest in more profitable activities. Typically a small
business spends up to half a day managing their finances
So small businesses must find providers
offering increased functionality, simplicity of use, with
knowledgeable support services and affordable easy payment
options to really benefit from the time and cost savings
Gleeson, managing director, Palo Alto Software
The growth in the use of business management applications
will continue in 2008 as companies and individuals look for
greater efficiencies in the workplace. The following will
represent some of the key developments and trends:
More emphasis on ease-of-use
As software developers reach a point where products become
mature, their emphasis will shift from cramming in more
features to focusing on improving the user experience so
that the product is as easy to use as possible. Customers
increasingly value their time so if a product is not
intuitive they will not bother spending time learning how to
use it. Think iPod, think simplicity.
Growth in web-based
The growth in the number of broadband connections in the UK
and the decline in retail sales of software has supported
the growth in online applications over CD based ones. A
growing number of Web 2.0 applications from the likes of
Google and 37 Signals mean that users can now work online
without the need for specific paid for software programmes.
This trend will continue as users want remote access to
Continued shift towards SaaS
It is likely that users will consider renting their software
in greater numbers. When the software is consumed as a
service there is no upfront outlay required by the customer
and they are guaranteed the latest version.
As companies recognise the need to operate efficiently
across their entire operation they will increasingly
consider niche software solutions. Why compose a business
plan from scratch in Microsoft Word when for only £79.99 you
can buy Business Plan Pro 2007? Why pay studio recording
fees when you can download a free application from Audacity?
More emphasis on design
With both Windows Vista and Apple iWork focusing on the
design elements, it is likely that business management
software designers will also focus on the design side
ensuring their application looks great onscreen alongside
the functions that it actually performs.
Software design for multiple
The continued popularity of mobile devices ranging from
BlackBerrys to iPods to iPhones means that software
developers will look to design their applications to take
account of the increasingly mobile user. However, with a
more limited screen size on mobile applications, not all
business management software applications will transfer
Is your IT security up to the job?
Many small companies see the issue of
cybercrime as something that only affects larger rivals and
as a result are not taking measures to protect themselves,
new research suggests
Post Date: 04/09/2007
half of small companies believe they are too small to be
affected by cybercrime and fail to take the issue
seriously enough, research by internet security firm
A staggering 47% of IT
decision-makers from across Europe said they thought
cybercrime was an issue for larger organisations and 45%
though they would not be victims because they were not
well enough known.
Over half (58%) of those polled
said they did not think they were a valuable target
while 56% suggested criminals would be unable to make
any money out of their firm.
Cyber-criminals don‘t discriminate; to them size
doesn‘t matter. Every SMB, even very small ones,
will have customer details or financial information
that will be of use to a cyber criminal
As a result of this flippancy, 28%
of small companies spend just one hour a week
implementing IT security measures despite almost one in
five (19%) admitting that an attack could put them out
discriminate; to them size doesn‘t matter,” said Greg
Day, senior security analyst at McAfee. “Every SMB, even
very small ones, will have customer details or financial
information that will be of use to a cyber criminal.”
McAfee is warning companies that
they can be victims of viruses, hacking, spyware, spam
and even ransomware just as easily as larger companies,
which can result in stolen date, computer downtime,
decreased productivity, lack of compliance and loss of
sales and reputation.
“Choosing a managed solution and
outsourcing security helps SMBs free up their time to
focus on other priorities, confident in the knowledge
that their IT security needs are covered by an expert,”
added Day. “It can also mean security technologies that
are otherwise out of their price range are available to
We asked Jonathan Westcott from Inforisk Security
Consulting, Terry Martin of Coms plc and Troy Theobald from
Barracuda Networks what the key components of an effective IT
Post Date: 28/08/2007
Westcott, MD, Inforisk Security Consulting
A recent DTI survey into IT security showed that in the larger
enterprise reported incidents have fallen. The same survey also
showed that in the SME there has been an alarming 50% rise.
While the basic issues faced by both large
and small businesses are similar, the challenges are very
different. Large organisations will have well funded IT
departments and full-time security staff. The smaller company may
have in-house IT but is unlikely to have resources dedicated to
We are conducting our business in a world
increasingly connected through internet, mobile and wireless
technologies, laying ourselves open to a multitude of new threats
and risk. Many of us rely on laptops and mobile devices using them
outside our trusted networks on unprotected broadband connections,
public wireless access points and hotel networks. How important is
the information they contain and what safeguards are in place to
protect them? Furthermore, do we have legal obligations over
client or employee data?
It is evident that security has become a
necessary part of today’s business and that we need to incorporate
it into our daily work routines. So what steps can we take to
alleviate some of this risk?
To address these issues, we must first
understand where we are vulnerable and the primary risks that we
face as only then can we take steps to reduce risk to manageable
levels. A security audit will allow us to establish a baseline,
giving us a clear picture of the status of our networks, systems
The audit is possibly the most important
stage of our whole security process as it lays the foundation on
which we can base our efforts. It will identify vulnerabilities
and threats to our business and the associated risk, allowing us
to allocate resources where required and manage subsequent work
efficiently and cost effectively. Additionally audit results allow
us to target exposure and weaknesses.
A security policy outlines the stance of our
organisation with respect to security and communicates to
employees and staff acceptable use of IT infrastructure, further
reducing our exposure.
While the steps taken so far may have reduced
the likelihood of an incident, the possibility of an occurrence is
still very real. Virus or malware infection, robbery or hard drive
failure are almost certain to affect us at some time and can have
a serious impact on our ability to operate effectively. By
recognising and understanding issues that we might face we can
plan for outages with, for example, manual or paper-based systems
that could save us downtime, expense and stress.
Regular backups are obviously important but
like any other plans for continuity of business must be tested and
verified. Too often we hear the story of someone’s computer
crashing, only to find that backups don’t work and all is lost.
Backups are a critical part of our recovery plans so we must make
sure they can perform their function and restore our precious data
So we must establish a baseline through a
good and thorough audit, asses risk and fix issues where possible,
if not mitigate risk through recovery planning. Expect and plan
for outages as they are inevitable. We must ask ourselves what
could really affect our business, how we could reduce the
likelihood of it happening, and what might we do if it still
One thing is certain of security incidents,
they are unpredictable. By taking a structured and proven approach
to security we can level some control over the multitude of
threats that surround our business.
Martin, chief executive, Coms plc
One of the major elements in setting up an effective IT system is
the selection of a communications system that can integrate
seamlessly with all elements of it. For new businesses, this can
be very confusing and very costly if you make the wrong choice.
Thousands of small businesses are selecting
or making the switch to internet-based phone systems (VoIP) for
reasons of cost and ease of usage. Last year, for example, small
and medium-sized companies spent £1.1bn on internet phone systems
equipment and services, compared with £2.1bn for enterprises
according to research by InfoTech.
Major service providers have traditionally
courted large businesses with VoIP, as this was where the most
money was to be made, and more or less ignored entrepreneurs. The
new wave of telecommunication companies have recognised that VoIP
is very relevant to SMEs and are now tailoring packages with this
sector in mind, which is now embracing this technology with open
The benefits of a VoIP communications system
for SMEs are numerous and go beyond simple costs savings. It also
leads to improved productivity and enhanced client customer
relationship management. This ultimately results in more clients,
which in turn translates into a better bottom line and a
healthier, more competitive business.
There are various options that take into
account the current technology and anticipate the innovations in
the not-so-distant pipeline and the following are part of those
A state-of-the-art phone system
Hosted VoIP provides business customers with a leading edge phone
system without the associated capital cost. From day one you will
have a system that delivers all the current features plus
tomorrows as they become available
Hosted VoIP is ‘futureproof,’ as when new features are introduced,
they are rolled out to existing customers, so there is no need to
worry about another large capital equipment upgrade a few years
down the road
Pay as you grow
With hosted VoIP there is no penalty to start small and then add
‘seats’ to the system as you grow, as you only pay for the seats
you need on a monthly basis
Reduce call costs
While saving on calls is no longer the primary driver for adopting
VoIP, it can be a prime factor for organisations that have
multiple offices requiring frequent voice communication, so not
having to pay for that communication can reduce a large amount
from an organisation's operational budget
Seamless teleworker connectivity
Hosted VoIP makes it easy to integrate teleworkers into the
business telephone system through their own broadband connections.
In addition, your customers will be able to reach your teleworkers
through your VoIP switchboard, regardless of where the worker is
Cut move, addition and change costs
Every time your company moves, adds or changes a conventional
telephone connection, it costs money. With VoIP, your network
configuration is software programmable and its voice signals are
carried over your business LAN so you can administer the changes
For more information on what hosted VoIP
can do for your business go to
take a free trial
Theobald, European sales director, Barracuda Networks
Spam is one of those areas of the IT headache that has become very
prominent of late. Once considered to be nothing more than a
nuisance in the form of mass advertising, it has progressed into a
very dangerous, time-consuming and sometimes offensive issue. It
has advanced to a level where we are seeing malicious code hidden
inside spam emails that embed themselves into PCs. This can enable
a hacker to record keystrokes of passwords (gaining access to
systems), for example, or even enable the hijacking of the machine
so as it can be used for sending more spam at a later date. It can
come in the form of phishing spam, which has the sole intent of
getting you to send or input personal data for the benefit of
hackers to steal your identity and blow a devastating hole in your
current or savings account.
To make matters even more difficult for
anti-spammers, good email to one person can be bad to the next.
For instance the marketing department of a business want to see
particular e-magazines, which the technical department has no
interest in seeing. This is making it more awkward for systems to
classify messages correctly on a company wide basis. Spam also has
no preference for what flavour of company it goes to. It can be a
small business of a few consultants to the largest behemoth of a
company with hundreds of thousands of employees. We are all at
risk, even down to the individual home user.
So with all this scaremongering about the
viciousness and indiscriminate nature of spam, how easy is it to
combat? Implementing the right solution is obviously key. Whether
it is software, appliance or an outsourced option will depend on a
company‘s needs, budget and resources. There are pros and cons to
each, but analysts have seen a trend towards appliances that are
easy, intuitive, cost-effective and that actually work. Software
solutions are often very administration heavy. Outsourced
solutions tend to become less cost-effective over time.
It‘s important to remember that spam is an
income medium that if severed, a different/more clever method will
arise to combat the filters. Over the last few years good
appliance solutions have been growing in popularity due to ease of
use and effectiveness at keeping up with these ever-changing
So spammers are always trying to invent new
ways to ’get in‘ and disguise their message intent. In recent
times we have seen the advent of image spam (picture text) being
used to fool systems. This has actually caused many manufacturers
of anti-spam solutions to almost give up due to the difficulty in
dealing with it.
Clever use of PDF files and zipped
attachments has suddenly started to proliferate the world of spam
delivery mechanisms. These are all ways to fool solutions into
letting a bad message through. If your chosen solution is not
capable of keeping up-to-date with all these emerging spamming
methods, then it quickly becomes pointless.
Eventually you can become a victim of what
can be hours of wasted time clearing out your own and your staffs‘
inboxes. Not only that, you risk those phishing attacks and one of
those potential cases of upset employees taking you to court
because they are devastated at reading about sexual enhancement
methods involving pharmaceuticals, which, by the way, currently
account for about a third of the global spam email traffic.
So a well chosen anti-spam solution will
reduce costs associated with dead time ’cleaning‘ inboxes. It is
an invaluable piece of IT equipment designed to wheedle out those
phishing attacks. It will block all those messages with imbedded
malicious code/viruses/Trojans and worms, all put there to cause
havoc or steal private information. With the email traffic now
peaking at 95% spam, reclaim your network.
Are you set for new safety law?
The Corporate Manslaughter Act, which comes into
force in April 2008, requires companies accused of manslaughter to
make that information public, which could have a devastating
effect on their business, Croner warns
Post Date: 05/11/2007
business owners need to prepare now for the introduction of
the Corporate Manslaugher and Corporate Homicide Act or risk
their reputation ending up in tatters, according to business
advice consultancy Croner.
The new law,
which comes into force in April 2008, will make it much easier
for companies and owners to be convicted of manslaughter for
work-related deaths and injuries.
But Croner claims many companies have not
been made aware of the fact that if corporate manslaughter
charges are brought against them, they will have to make that
knowledge public, which could ruin their reputation and cost
them staff, suppliers and customers.
“Only recently over half of all employers
(52%) admitted to being unprepared for the new law, and from
our interaction with businesses we know there’s even less
awareness of the publicity clause,” said Stephen Thomas, a
safety technical consultant with Croner.
This will no doubt affect recruitment and retention rates,
as well as maintaining and securing new business and
relationships with contractors. No one wants to work for
or recruit the services of a ‘rogue’ company
“This specific part of the law puts
unprepared businesses at risk of damaging their corporate
reputation by highlighting their laissez faire attitude to
health and safety,” he added.
“This will no doubt affect recruitment
and retention rates, as well as maintaining and securing new
business and relationships with contractors. No one wants to
work for or recruit the services of a ‘rogue’ company.”
Croner offers the following tips to help
comply with the new legislation:
Make sure that health and safety management systems
accurately reflect the company’s activities
Actively involve senior managers to act as motivators
for all levels of management (by maintaining their interest
through participation) and for employees (by demonstrating
management’s commitment to their wellbeing)
Allocate health and safety responsibilities to all
levels of staff to create a sense of ownership regarding the
companies overall health and safety standards
Encourage communication between all levels in spoken,
written and visible pathways
Implementing health and safety measures need not be
costly: it can save you money not only in the avoidance of
fines and penalties but in tangible business benefits such
as increased performance, reduction in lost time, reduced
insurance premiums and a healthier, happier workforce
Are you ready for new business legislation?
ACCA is urging small business owners to take
action now to ensure they are ready for a rise in the minimum
wage, changes to the Companies Act and an increase in staff
holidays from October
Post Date: 27/08/2007
business owners are being urged to make preparations now for
new laws that will come into force from 1st October.
As part of a new government strategy to
introduce legislation twice a year, three major initiatives
that will affect small businesses will become law, warns John
Davies, head of law at ACCA (the Association of Chartered
“October 1st represents the second key
date of 2007 for new business legislation, under the
government’s relatively new system of storing up new workplace
measures for release just twice a year,” he said.
Of most concern to small company bosses
will be another rise in the level of the minimum wage, which
will increase to £5.52 an hour for workers aged over 22. Those
aged between 18 and 21 will be entitled to a minimum of £4.60
while 16-17-year-olds will receive at least £3.40 an hour.
October also marks the start of a phased
introduction of the new holiday ruling, which will eventually
see every employee in the UK entitled to a minimum of 28 days’
annual leave a year. This is designed to end the practice used
by some companies – particularly in the entertainment and
service industries – of counting the eight Bank Holidays every
year as part of the current minimum entitlement of 20 days.
Staff will eventually be entitled to a minimum of 20 days plus
the eight Bank Holidays.
Of most concern to small company bosses will be another
rise in the level of the minimum wage, which will increase
to £5.52 an hour for workers aged over 22
From October 1st, the statutory minimum
leave entitlement will increase from 20 days to 24, before
rising further to 28 days in April 2009. Companies will still
be able to offer payment in lieu of the additional holiday
entitlements but only up to April 2009. The new regulations
will be extended to part-time workers on a pro-rata basis.
Small business owners will also be
affected by elements of the new Companies Act that will come
into force in October 2007. These include new statutory rules
on the responsibilities of company directors which will have
important implications for directors of companies of all
shapes and sizes, says Davies.
“The new act takes the most important
common law principles and sets them down in legislation,” he
says. “The intention is to make the law more accessible to
non-experts and in the process save companies the expense of
buying in specialist advice from outside.
“The main common law-derived duties now
set out in legislation include the fact that directors must
respect the terms of their company’s constitution and act
within their powers, they must avoid conflicts of interest and
should not accept benefits from third parties,” he added.
How to make the most of marketing
Companies spend an average of £28,187 a year
on business-to-business marketing, according to new
research. But most aren‘t making the most of the leads that
arise from such campaigns
Post Date: 25/09/2007
companies spend an average of £28,187 on
business-to-business marketing campaigns but many are
wasting this money by failing to investigate and qualify
new business leads.
That‘s the conclusion of research
by business information company Marketsafe, which claims
that in almost one in four (23%) companies 50% of annual
turnover comes from new business opportunities.
But despite spending on marketing,
many companies do not do their homework properly when
approaching a new business target, Marketsafe claims.
The survey found that fewer than half (43%) of company‘s
go to a potential target‘s website before contacting
them and a similar proportion don‘t even check who is
the most appropriate contact to approach. A staggering
16% admit to doing no research whatsoever into a
prospective business customer prior to approaching them.
The most common excuses for failing
to win new business were a lack of time (42%) and money
(39%), too much competition (24%) and poor quality
marketing data (13%).
There is an attitude, particularly with direct
marketing, to target as many businesses as possible
and wait for the ’2%‘ to reply
“British businesses pour billions
of pounds into their sales marketing campaigns but
staggeringly many do not take the time to learn about
the companies they are targeting,” said Andrew Harris,
managing director of Marketsafe UK.
“There is an attitude, particularly
with direct marketing, to target as many businesses as
possible and wait for the ’2%‘ to reply,” he added.
“Investing more time and money in developing ’customer
intimacy‘ can help firms get more from their sales and
marketing activity, maximising the value of their
The amount of money spent on sales
and marketing varied considerably depending on the size
of the business with small ’one-man bands‘ spending
around £1,100 compared to large companies which spend an
average of £119,000 per year, the survey revealed. Each
new business client won in the UK costs an average of
£472 in sales and marketing activity alone.
Does your firm personalise direct mail?
Personalising direct mail allows small
companies a much more targeted means of marketing that can
lead to response rates of 30%, according to new research
Post Date: 07/08/2007
majority of businesses are increasing the amount of
direct mail they send out to customers but research
suggests that over half of this heads straight for the
A study by Prontaprint revealed
that 63% of
firms now send out more direct mail than this time last
year, with one in 10 mailing such correspondence out
But 55% of direct mail is thrown
straight in the bin and 19% of staff who handle post
admit to filtering out post to prevent perceived junk
mail reaching its intended recipient.
According to the research,
personalised mail items increase response rates by up to
10 times, boosting rates to up to 30% compared to a 2-3%
ratio for mass mailings.
“For small businesses, where sales
leads and customer contact information can often fall
through the cracks, being able to market pinpointed
prospects with postcards, flyers or personalised notes
is a great opportunity,” claimed Keith Davidson, head of
marketing at Prontaprint.
“A well-designed, road-tested
direct mail package represents a cost-effective sales
tool all on its own, especially if personalisation is
used hand-in-glove with measurable objectives, an
effective advertising message, design, special offer or
response reward, call to action and, ultimately, the
deal closer,” he added.
For small businesses, where sales leads and customer
contact information can often fall through the
cracks, being able to market pinpointed prospects
with postcards, flyers or personalised notes is a
The poll of 1,000 companies also
revealed that 76% had heard of personalising direct mail
and 67% had received and remembered receiving such
But 58% thought that personalised
mailing was a new concept, suggesting many small firms
have yet to take advantage of this method of marketing.
personalisation techniques mean there is no excuse for
firms not to be able to target their specific audience
and increase their response rates,” said Davidson.
“Direct mail gives you complete control over who sees
your marketing, in contrast to advertising in print,
online-mail, websites or television.”
What your staff hate about work
Companies wanting to get more out of their office
staff should aim for crisper meetings and a more efficient
administrative setup, according to European-wide research
Post Date: 16/10/2007
biggest gripes among office workers have been revealed as bad
manners, long and pointless meetings and office politics,
according to pan-European research commissioned by printer
The research found that long and
pointless meetings were the biggest annoyance in Europe while
in the UK and Ireland office politics took the top spot.
Eight in 10 office staff in the UK and
Ireland have witnessed visible acts of displeasure by
colleagues, with the most common causes of staff losing their
temper being spoken down to by a boss or work colleague (61%).
PC downtime and leaving paper jams in printers also featured
prominently, cited by 24% of staff.
The survey of 3,000 office workers also
revealed the most stressful administrative tasks, with
collating documents coming out as the most tedious, cited by
27%. This was followed by searching for files on the company
network (23%), filing expenses (16%) and submitting holiday
There is no doubt that office rage is on the increase, but
a range of initiatives such as crisper meetings or
interpersonal kindness could reduce stress levels
One in 10 office workers admitted to
wasting three hours a day on unnecessary admin, with four in
10 spending at least two hours on such tasks. When asked what
they would spend this wasted time on if they could improve
office productivity, the resounding response was leaving the
office on time (39%) followed by more time for personal
development (27%) and taking a proper lunch break (16%).
“For people to feel less stressed in the
office, they need to feel more in control of their working
life and working environment,” says psychotherapist and
occupational stress expert Lucy Beresford.
“When this control is lost through
external events such as a rude boss, sitting in a pointless
meeting or a printer jam that no one wants to fix, it doesn‘t
take much for the average office worker to snap.
“There is no doubt that office rage is on
the increase, but a range of initiatives such as crisper
meetings or interpersonal kindness could reduce stress
Crimes against business rise again
The British Chambers of Commerce has called for
the system of recording business crime to be overhauled in the
light of startling new crime figures
Post Date: 09/10/2007
number of insurance claims for crimes committed against
businesses in the period between April and June 2007 rose by
11% on the same period in 2006.
According to Axa’s business crime survey,
the amount of malicious damage claims rose by 28% while the
number of arson claims rose by a staggering 43%.
Instances of theft fell by 2%, the survey
revealed, although this remains the most common claim and
accounts for over half (53%) of the total.
“What this survey continues to highlight
is the increasing amount of crime related to business,” said
Gareth Elliott, policy adviser at the British Chambers of
Commerce. “Even though businesses have taken measures to
reduce crime, they are fighting an ongoing battle that is
becoming increasingly difficult to wage.
“Until there is a reliable definition of
business crime with which national police forces can record
crime statistics, the true extent of crimes against businesses
will not be fully known,” he added.
Even though businesses have taken measures to reduce
crime, they are fighting an ongoing battle that is
becoming increasingly difficult to wage
Despite the rising level of crime, the
proportion of insurance claims that were made during this
period due to crime actually fell in 11 of the 15 cities
measured by the index.
The hotspots for crime against businesses
are Bristol where crime accounted for 25.4% of claims – a rise
of 5.2% from last year – and Cardiff, with figures of 24.3%
and 3.6% respectively. At the other end of the table, just
over one in 10 (11.2%) of claims in Newcastle were due to
“Criminal activity is a growing problem
for businesses,” said Doug Barnett, risk manager at Axa. “So
far this year, we have dealt with 10% more crime claims by
businesses than in 2006 and around one in every six claims is
“We believe that businesses are making
more of an effort to protect themselves from crime and are
pleased to see that incidences of theft have actually
decreased this quarter but acts of petty vandalism, which can
be more difficult to guard against, are increasing
Absence rates set to soar
Salespeople and office admin staff are the most
likely to take time off work when they feel a cold or flu coming
on, according to research
Post Date: 01/10/2007
are being warned to expect higher than usual levels of staff
absence as children return to school and the weather takes a
turn for the worse.
Research by Lemsip into how people deal
with colds and flu claims this time of year is particularly
risky for staff, and parents in particular.
“Back-to-school season is a bad time of
year for UK businesses in terms of sickness levels, as germs
are spread among the new school intake, which are then passed
on to mum and dad,” the research claimed. “One in 10 parents
is likely to have caught a cold from their offspring as soon
as the school gates opened for the new term.”
The survey discovered that 59% of
employees are ’gladiators‘, who will attempt to battle on
regardless despite feeling ill, and 32% ’hibernators‘, who
will phone in sick at the first sign of a sniffle.
Salespeople and office admin staff are
the most likely to take time off work when struck down by a
cold or the flu, the research suggested, with 22% and 18%
respectively admitting their tactic is to hide themselves away
for fear of spreading the virus around the office.
One in 10 parents is likely to have caught a cold from
their offspring as soon as the school gates opened for the
Nearly half (45%) of those questioned
said they rarely took time off work, with worrying about
letting colleagues down cited by 43% and missing an important
meeting by 29%.
Those working in the emergency services
are the most likely to feel they are letting their colleagues
down by failing to arrive for work, cited by 68% of
respondents in this profession.
Tradesmen are the least likely to take
time off work due to a cold or flu, the research discovered,
with 76% saying they would battle on regardless. This is
likely to be due to the high number of self-employed tradesmen
who are not entitled to any form of sick pay for taking time
off work. Teachers and others in the education sector
followed, at 71%.
The survey also highlighted an emerging
trend among UK workers for so-called ’HUDDLE‘ days, standing
for ’hide under duvet, do little else‘, at the tail end of a
bout of flu. The research claims this is common practice for
25% of public sector workers and 20% of private sector
Such a habit could increase the average
number of sick-days taken significantly and increase the cost
of absence to UK businesses.
Can you really trust your staff?
Temporary staff, salespeople and cleaners
are seen as the biggest internal threats to company
security, according to a survey. But they aren‘t the only
risks and companies should leave nothing to chance
Post Date: 10/09/2007
least trustworthy members of staff are seen to be
salespeople, temporary staff, security guards and
cleaners, according to new research.
The ’Trust, Security and Passwords‘
survey carried out by Cyber-Ark Software revealed that
the most reliable and honest staff were perceived to be
those who worked in the legal, IT and HR departments, as
well as the boss‘ secretary.
One in 10 respondents nominated the
marketing department as the least trustworthy while the
same amount pointed to company directors as potential
“In an organisation you never know
who you can trust,” said Calum Macleod, European
director for Cyber-Ark. “There is increasing evidence to
show that most breaches are carried out by insiders who
are those people you least suspect such as the temporary
staff who may be paid by your competitors to extract
There is increasing evidence to show that most
breaches are carried out by insiders who are those
people you least suspect such as the temporary staff
who may be paid by your competitors to extract vital
“The findings of this survey show
that there is distrust across all groups of workers and
our advice to companies who need to protect sensitive
information is to encrypt it, lock it away in a digital
safe and make sure that you only allow staff to have
access to what they need, by creating layers of security
on your network.”
Other recent research conduced by
Carnegie Mellon University on behalf of the US
Department of Defence found that the group of workers
that posed the biggest threat to an organisation‘s
security were those with access to IT systems such as IT
“It is time companies take stock of
who they employ and not to naively allow staff general
access to everything and anything,” added Macleod.
“Often people can do more damage
than you can imagine just at the click of a mouse so
it‘s worth sitting up and taking note of just who has
access to what, researching your vulnerabilities and
then locking down and securing not only your physical
backdoors but also your virtual ones.”
How tax changes will hit your retirement
The Federation of Small Businesses has
warned that thousands of entrepreneurs will have less money
than they thought to retire on after the rate of capital
gains tax on business sales was increased to 18%
Post Date: 24/10/2007
Many entrepreneurs now face a more uncertain
retirement. Their contribution to the wealth of the
nation – their hard work, their taxes, the jobs they
offer people and the facilities they provided for
their local communities – are all being taken for
The Federation of Small Businesses
has warned entrepreneurs that they will be hit by
changes to capital gains tax when they retire as well as
during the usual course of selling a business.
Measures announced by chancellor
Alistair Darling in the pre-Budget report will now
affect entrepreneurs who were relying on selling their
business to fund their retirement, often in place of a
The changes – which have been
fiercely opposed by business groups including the
British Chambers of Commerce and CBI – will see the
various rates for capital gains tax scrapped in favour
of a flat rate.
This means small business owners
selling up will have to pay 18% rather than the previous
rate of 10%, which was introduced by Labour government
in the 1990s in a bid to encourage start-ups.
“Many entrepreneurs now face a more
uncertain retirement,” explained FSB national chairman
John Wright. “Their contribution to the wealth of the
nation – their hard work, their taxes, the jobs they
offer people and the facilities they provided for their
local communities – are all being taken for granted.
“We are not talking about
millionaires or fat cats, but entrepreneurs who have
taken a big risk and deserve their modest rewards on the
sale of their business,” he added. “A secure retirement
for entrepreneurs is now looking less likely thanks to
the government’s tinkering with capital gains tax taper
The organisation is also warning that the measures will
hit anyone planning to sell a business before the new
rate is introduced in April 2008, as prospective buyers
will expect a knockdown price knowing that owners have
Should you have a board of directors?
Academic research published by ACCA suggests the
vast majority of entrepreneurs want to retain control over key
business decisions. But in doing so they miss out on a more
independent and strategic approach
Post Date: 24/10/2007
We need to address the reasons entrepreneurs are shying
away from using other directors as they can provide a
cost-effective way of developing these businesses beyond
the often-limited horizons of the founders
Small business owners want to take key
decisions themselves and reject the idea of having a board of
directors or non-executive positions, according to academic
research published by ACCA.
The research carried out by Colin Coulson-Thomas,
professor of direction and leadership at the University of
Lincoln, discovered that very few small companies even had
working boards and the handful of non-executive directors that
did exist were usually relatives.
Those who acknowledged that additional
directors could help fill existing skills gaps did not believe
they would be able to afford them, the study added.
“Directors in many cases only tended to
act as directors when required to do so, at AGM time, or when
approving the audited accounts,” said Coulson-Thomas. “But in
the absence of independently-minded non-executive directors,
whose duty is to the company rather than particular
individuals, many found it difficult to step up from
discussion of short-term operational issues to provide
“What was most striking – and sad – about
my findings was that virtually no entrepreneurs were able to
sum up succinctly what was special about their business,” he
added. “Some of them had real potential, which independent
advice in the shape of new directors could help them realise,
but they could not see it.”
The research also suggested that small
business owners were more concerned with getting through the
next couple of years than formulating a strategy for the
business. Company boards and non-executive directorships were
seen as an issue for larger companies only.
“This valuable research shows that small
firms are missing out on the experience, objectivity, fresh
thinking and skills that effective boards can provide,” said
Paul Moxey, ACCA head of corporate governance and risk
“We need to address the reasons
entrepreneurs are shying away from using other directors as
they can provide a cost-effective way of developing these
businesses beyond the often-limited horizons of the founders.”
Heart of the country
Benefiting from a central location and excellent
transport links, the West Midlands offers a unique combination of
business and pleasure for entrepreneurs
Post Date: 04/10/2007
West Midlands is situated in the heart of England and is home
to over 5m people. Centrally located and well connected to the
rest of the UK and beyond, this region offers everything
businesses and individuals need to succeed and enjoy life,
with a thriving, diverse and innovative population.
The West Midlands comprises of Birmingham and Solihull;
Coventry and Warwickshire; Herefordshire; Shropshire; Telford
and Wrekin; Staffordshire; The Black Country and
Worcestershire. The area offers a variety of environments from
vibrant cities to idyllic rural villages; dramatic hills to
rolling countryside; historic castles to state-of-the-art
It is home to a dynamic and creative workforce of more than
2.7m and has the fastest-growing financial services sector in
the UK outside London. There is a substantial range of
commercial property from Science Park incubators to large
scale development opportunities. In addition, Advantage West
Midlands and other funding organisations offer new business
start-ups more than 600 separate sources of business funding
(see separate box). In 2004 alone, the area saw more than
14,000 new business start-ups and there are currently more
than 2,300 overseas companies from more than 40 countries
located in the area.
As the birthplace of the industrial revolution, the West
Midlands has a long and distinguished heritage. Today, the
region is the economic heartland of Britain and is responsible
for 8% of the UK‘s GDP. Situated at the heart of the UK‘s
transport networks, its central location allows easy access to
national, European and global markets. The West Midlands is in
direct contact with many of the UK‘s most important regions
and is also the hub of the nation‘s transport network. It is
served by six motorways, the M6 Toll and a network of major
arterial roads, meaning that 82% of the total UK population
are within 150 miles‘ drive of the West Midlands region.
It is also at the centre of the UK‘s rail network. Birmingham
New Street is the country‘s main national rail interchange and
boasts exceptional rail connections, with more than 170 direct
services every weekday between Birmingham and London, while
Hams Hall Channel Tunnel freight terminal and Daventry
International rail freight terminal offer direct rail access
to European markets.
’Birmingham International airport is the UK‘s second
largest airport outside London and has daily direct
scheduled flights to over 100 destinations throughout
Europe, North America, Asia and the Middle East‘
The region is also home to two airports connecting the West
Midlands to the world. Birmingham International airport is the
UK‘s second largest airport outside London and has daily
direct scheduled flights to over 100 destinations throughout
Europe, North America, Asia and the Middle East, while
Coventry Airport has an established reputation as a major
centre for international freight and courier services and is
home to the Parcelforce worldwide, national and international
parcel distribution hubs.
As well as a highly skilled workforce, the region also offers
over half a million people currently in education. The region
has 13 higher education establishments, of which 10 are
universities, plus eight science parks and two of the UK‘s top
five business schools; all of which work closely with local
industries to share expertise and research.
It is also home to the largest and fastest growing business
and professional services sector outside London with over
100,000 people employed in Birmingham alone, and boasts a
rapidly expanding IT sector, growing 20% every year and
employing 57,000 in 3,000 companies. The West Midlands is also
one of the leading telecommunications centres in the UK.
Life outside work
From the city of Birmingham and its iconic buildings at the
heart of the region to Hereford Cathedral and the Ironbridge
Gorge, the West Midlands offers a diverse range of cities and
eclectic mix of towns and the ideal balance between urban and
rural environments. With the rolling beauty of the Malvern
Hills to the world-class shopping facilities of Birmingham;
the magic of Shakespeare‘s Stratford to the industrial
heritage of the Black Country; and the culinary offers of the
Balti belt to Ludlow‘s Michelin stars, the area offers a
diversity of landscapes, people, food, drink and attractions.
As Britain‘s second city and the urban centre of the West
Midlands, Birmingham is a modern and vibrant metropolis. A
shopper‘s paradise, the city is home to the Bullring, the
Mailbox and the landmark Selfridges, attracting millions of
shoppers to the region every year. The National Exhibition
Centre, located on the outskirts of Birmingham, is the busiest
exhibition centre in Europe, staging more than 180 exhibitions
each year. Visited annually by 4m people, the centre has the
ability to host large-scale international trade fairs as well
as smaller specialist shows.
With a thriving, diverse and dynamic business base, the region
is the ideal location for new business start-ups and for
established businesses to expand. High technology companies
sit alongside resurgent manufacturing enterprises with
internationally famous names like Cadbury, JCB and Wedgwood
continuing to prosper in the region. An impressive
infrastructure and a ready-made skills base have led companies
like Fujitsu, Vodafone and Muller to relocate to the area
where they have enjoyed strong local support.
The West Midlands was the birthplace of the industrial
revolution and it has a long tradition of innovation. Today
the region has a buoyant high technology base and great
emphasis has been placed on allowing its technology community
to retain its international edge. Three ’technology corridors‘
have been established to build on and nurture the existing
regional technology strengths in targeted key industries. The
West Midlands really is at the heart of it all, creating an
environment in which business and people can prosper and
Find the space you need
The team at Access Self Storage explain how
self storage is helping SMEs
Post Date: 02/11/2007
When starting a business or trying to expand, location
and space are major considerations. Whilst for some
businesses location is of paramount importance, for many
others a prestigious location - which comes with a hefty
rental price - is an unnecessary factor. What is
important though is affordability and flexibility.
Starting or expanding a business always involves risks,
so any opportunity to minimise the risk is always a
For most new or expanding businesses, regardless of
location, one risk factor is the prospect of being tied
down to a medium or long-term lease, which can hinder
growth and restrict flexibility.
A solution which is helping many of today‘s SMEs is self
storage. All kinds of businesses can benefit from using
self storage, from sole traders and those who are
outgrowing working from home to multi-location stock
For stock based businesses the flexibility of self
storage is of particular appeal, with many storage
companies only requiring 7 days notice to up or down
size a unit there is no longer the worry of paying for
space which is not needed. Larger or extra units can be
rented for busy periods like Christmas or to cope with
other increased seasonal demands, and then once stock
has been dispatched a business can resume the lower
rental rates of smaller units.
Tomas Dalek imports Polish beer in to the UK and uses
Access Self Storage in Boston Manor as his base: “My
stock levels fluctuate on a weekly basis so the
flexibility Access offers me means I am only paying for
the space I need. I also have the luxury of increasing
or decreasing space as and when I need it, and don‘t
have to commit to a long-term lease, which is something
I wouldn‘t be able to do with conventional warehouse
For bulk storage, drive-up units and undercover loading
bays are available, as well as forklift facilities to
ensure delivery and dispatch of large orders are managed
with ease. In addition to storage space some companies
also have offices, meeting rooms and secure car parking
facilities, allowing all the benefits of being fully
functional from one site but without the costs and
commitment usually associated with such a set-up.
All kinds of businesses can benefit from using self
storage, from sole traders and those who are
outgrowing working from home to multi-location stock
Making the most of office space
Self storage is not only of benefit to businesses which
are stock based: with office space in any location
costing a premium and the additional worry of volatile
overheads, it is imperative to ensure that costly space
is being used to gain maximum benefit. Offices which are
cluttered with rarely referenced paperwork, archive
files, excess equipment or unused furniture could free
up expensive space for additional members of staff by
using self storage for the lesser used items. An Ernst
and Young survey revealed that it costs the average
company £1,200 per year to maintain the space occupied
by a four-drawer filing cabinet. With self storage
costing a fraction of that price and most businesses
having more than one filing cabinet, smart businesses
are recognising the advantages of storing paperwork
An additional benefit of using self storage is the
opportunity for expansion without relocation. Using
freed up space for additional staff removes the need of
expensive and disruptive relocation, meaning a business
can remain where customers and suppliers know where to
find them, and where current staff are happy to commute.
For companies who use sales representatives to cover
different territories, storing samples, stock or
materials in local self storage facilities is a great
way of reducing travel time, therefore allowing the
sales force to get on with the job they are tasked to
do; selling. Certain self storage companies offer a
receipt and despatch facility which can be a huge added
bonus for all types of storage users.
Having business assets in storage does not mean they are
out of reach, as well as offering 24 hour access, self
storage facilities are located in prime spots in terms
of transport links and proximity to businesses. So, a
self storage unit can be almost as convenient as a
company‘s on-site stock room or archive storage area,
just without the associated costs.
Many companies are recognising the advantages of
cost-efficient and flexible space when it comes to
business. With the self storage industry providing a
hassle-free alternative to conventional trading, it
allows many SMEs to better equip themselves to move
their businesses forward in a low-risk, cost efficient
A place of your own
Taking out a commercial mortgage can give small
business owners security and the chance to invest in their own
business premises. But, as with their residential counterparts,
there are risks attached too
Post Date: 04/10/2007
has long been something of a national pastime in the UK. The
proportion of the population that own their own home massively
outweighs those living in rented accommodation and is
certainly far greater than in many other European countries,
where renting is more commonplace. And yet when it comes to
company premises, leasing is very much the preferred option.
That may all be about to change, however, with an increasing
number of lenders arriving in the commercial mortgage market
bringing with them a far wider choice of products than has
been available up to now. “Building societies have
traditionally been among the leading providers of business
mortgages, with many professional groups – such as
accountants, solicitors and vets – often buying rather than
renting their premises,” says Neil Johnson, policy manager at
the Building Societies Association.
“This can often be as a consequence of the nature of those
businesses. They are often established by a relatively
affluent individual who can afford to buy the premises knowing
that when they come to retire they will have an asset as well
as the business that they can sell,” he adds. “Many societies
are also looking to diversify their lending, however, and move
into new areas.”
Trends in the business mortgage arena are hard to identify.
While it is not necessarily the case that huge numbers of
small businesses are turning their backs on the traditional
rent/lease option and taking out mortgages on their business
premises, the options and opportunities for doing so are
“If a business finds itself in the position where it is able
to buy its own premises, then clearly it will look at doing
so,” explains Nikki Cann, associate director at the National
Association of Commercial Finance Brokers (NACFB). “Renting is
often seen as dead money in the commercial marketplace, just
as it is in the residential one. One trend that is becoming
clear, however, is that there are increasing numbers of
lenders entering the commercial mortgage marketplace, which
means that there is greater choice for a business now.
Businesses that would have had difficulty in getting a
commercial mortgage five years ago now have a number of
different lenders who will consider lending them money.”
According to Jonathan Moore, head of marketing at Mortgages
for Business, business mortgages are usually priced and
negotiated on a case-by-case basis, depending on the personal
and business circumstances of the borrower and the strength of
their company. “Most high street banks and traditional lenders
will want to see three years‘ accounts, while some of the new
specialist lenders take a more flexible approach to the
marketplace,” he says. “Firms with short trading histories or
imperfect credit are now fundable, as are those with limited
David Willetts, director at small business consultancy DAW
Consulting, claims there is another reason why some
’If done correctly, you could have a situation where
tenants in part of the property can effectively be paying
the mortgage for you. That means that your business itself
is living rent-free‘
business owners might consider taking out a mortgage rather
than renting office premises. “A commercial mortgage may be
the only option available to a business owner with a poor
credit record and possibly county court judgments served
against him,” he suggests. “In addition, some types of
businesses may be too high a risk for the conventional fund
providers. Some commercial mortgage providers now add greater
weight to the individual‘s ability to repay rather than the
person‘s past record. Typically an acceptable form of security
would include retail shops, factories, warehouses, office
buildings, hotels, land, pubs and farms.”
Because the range of mortgage products on offer has grown so
significantly, this has become an environment in which you are
far more likely to find a solution that suits your business
than would have been the case just a few years ago. “Multiple
new specialist business mortgage lenders have now entered the
marketplace such as Commercial First,” adds Moore from
Mortgages for Business. “The days of your local high street
bank being your only option in terms of finance are gone.” He
claims that it can make sense to have your day-to-day banking
and mortgage with different providers because having all your
products with one lender means that company has total
transparency over your portfolio and could use that
information when deciding whether to lend money and, if so, at
Why the sudden interest from lenders in this sector? According
to Fraser Mackay, head of commercial marketing at Barclays
Business Banking, research suggests that up to 10% of firms
with a turnover of more than £50k hold a commercial mortgage.
In addition, figures suggest that commercial mortgages are not
typically ’small ticket‘ loans: 63% of loans are for over
£100k, while 41% are in excess of £200k. In addition, against
a backdrop of rising levels of insolvency, lenders are looking
at ways of stretching their business into longer-term
arrangements, easing the short-term cashflow issues that many
of their customers face.
For many owner/manangers of small businesses, their only prior
experience of mortgages is restricted to their own home loan.
But the NACFB‘s Cann suggests
that commercial mortgages should not necessarily be viewed in
the same way as their residential counterparts since they can
also be used as part of a much more bespoke funding vehicle.
“A commercial mortgage as a source of funding doesn‘t need to
be taken in isolation,” she explains. “A good broker will have
a look at the whole picture of the business and design a
package that suits that individual business.
’Some of the new specialist lenders take a more flexible
approach to the marketplace. Firms with short trading
histories or imperfect credit are now fundable, as are
companies with limited accounting information‘
“For example, where a small business owner/manager might
believe they need a commercial mortgage with an 80%
loan-to-value, a broker might look at the deal and consider
the possibility of leasing arrangements on some of the
equipment, or a factoring and invoice discounting arrangement
to help with cashflow,” she says. “This could free up more
capital to allow the business to pay a larger deposit and, in
turn, secure a lower rate for its commercial mortgage. At the
same time, the flexibility of the business‘s finances has been
Safe as houses?
Property has long been seen as a fairly safe long-term
investment, so could there be merit in a business looking
beyond simply owning its own premises and buying additional
commercial property to let for additional income? Stuart
Barton, president of the NACFB, certainly thinks so. “If done
correctly, you could have a situation where tenants in part of
the property can effectively be paying the mortgage for you,”
he explains. “That means that your business itself is living
Taking out a commercial mortgage for an additional property
can also assist with the lending process itself, he adds: “If
you can prove a tenant is involved in your proposal to
purchase a property then it can certainly help the lender to
get his head around the proposition.” The latest report by the
Royal Institution of Chartered Surveyors revealed that rental
yields on commercial property has remained stable, with
offices currently showing the best performance, although even
in this sector the rate of increase has slowed down.
But outside the office market, rental growth was muted, at
2.7% for retail property and 1.4% for industrial space, and
with interest rates likely to rise still further before the
end of the year, this is not an investment decision that
should be entered into lightly. It‘s also worth noting that
the last Budget announced that business tax relief on empty
commercial properties would be reduced, so any business owner
investing in buy-to-let commercial property needs to be
confident that it is highly rentable.
However, the current consensus is that – unlike other forms of
investment – property will at least hold its value, even if it
won‘t necessarily bring the kind of return that the
residential market has seen in recent years. A well-advised
purchase could just be the key to the long-term stability of a
business‘s operation. “Any business looking to purchase its
premises would be wise to seek the advice of a broker before
taking the plunge,” says the NACFB‘s Carr. “As with many
things, it‘s usually better to shop around to secure the best
rates and a broker can take the legwork out of that.”
Why a mixed age range is good for business
Over half of both young and older workers claim
to recognise the benefits the other group can bring to a
business, according to research by Jobcentre Plus
Post Date: 09/10/2007
half (40%) of older workers think younger colleagues teach
them skills they did not previously have, according to a
study commissioned by Jobcentre Plus.
The research highlights the benefits to
businesses of employing a diverse range of age groups, with
66% of older employees and 65% of young workers claiming to
recognise the benefits of working with people of all ages.
“The research shows that having the
right balance of age and skills can bring numerous benefits
to establishing a complete workforce for both employers and
employees,” said Lesley Strathie, chief executive at
“Both older and younger workers
appreciate and learn from the qualities each brings to the
workplace,” she added. “It’s not always easy to get the mix
The main quality young people believe
older workers bring to the workplace is experience, quoted
by 94%, followed by reliability (66%) and understanding
Both older and younger workers appreciate and learn from
the qualities each brings to the workplace. It’s not
always easy to get the mix right
Nearly two-thirds of older staff were
impressed by younger colleagues’ ability to learn quickly,
be flexible (61%) and give them energy (51%).
But the survey also revealed some
notable differences between the generation gap. Over half of
older workers felt young colleagues were more likely to take
risks, while 30% of younger workers thought older staff were
more willing to work anti-social hours compared to 23% of
older workers about younger employees.
The motivations for coming to work also
differed slightly. While both groups said money was the main
factor, this was more prevalent in younger than older
workers (73% compared to 52%). More than one in five (22%)
of older employees said they worked for personal
“Tapping into a wider pool of talent,
experience and skills can help employers increase
productivity, maintain a competitive advantage and improve
the bottom line,” said Chris Ball, chief executive at The
Employment Age Network, which supported the study.
Xenios Thrasyvoulou, CEO of
peopleperhour.com, explains how to find support when you
need it without the agency fees
Post Date: 02/11/2007
is nothing more frustrating than having 10 or more
little jobs that need completing and no time or
resources to get them done. They just stay on your “To
Do” list and cause disproportionate aggravation.
Outsourcing is the simplest solution to this dilemma.
You can be surprised at how many of those little,
niggling tasks can now be easily put out to tender to
highly skilled or qualified experts to complete on your
behalf, whilst staying in complete control.
Take the following as an example.
You are a new business, working round the clock to get
off the ground. Resources are naturally tight, and
whilst you have the ‘bigger issues’ of getting customers
and securing funding, you also have the following to do:
• Design and build a website
• Write copy for the site and other marketing
• Review your Terms & Conditions
• Write a press release
• Compile an electronic data-base of prospects
• Polish up your business plan and power point
This all too familiar problem has led to the creation of
a new phenomenon: online services marketplaces, that
match project work like the above with skilled casual
Xenios Thrasyvoulou, founder and CEO of one such
marketplace that recently launched in the UK explains
“in essence what we are doing is bringing the benefits
of out-sourcing to smaller businesses. Traditionally
this has not been possible due to the large entry costs
which meant that only the larger companies could afford
it. Our model uses the web as a direct matching medium
therefore making it economical to out-source projects as
small as £50 even, or as large as £50,000!”
The way it works is very simple: you simply advertise a
project requirement online. This then prompts people
with matching skills to quote you for the project. As a
‘Buyer’ you can weigh up your decision based on price,
the quality of the quote, credentials and feedback
rating through the site.
You can be surprised at how many of those little,
niggling tasks can now be easily put out to tender
to highly skilled or qualified experts to complete
on your behalf
“It sort of works like an eBay system” adds Thrasyvoulou,
“but where the underlying commodity is a service”
The cost of entry for a small business is zero –
advertising the projects on the site is free. And whilst
in traditional channels you bear the cost of agency
fees, or hefty consultancy fees, here you only pay an
agreed price to the service provider.
Data shows that these new online marketplaces are
tapping into a highly skilled workforce that has opted
to be freelance and self-employed. As a consequence,
they are more likely to quote their rates at a fraction
of larger organisations, which are carrying the
significant overheads that these people do not require.
According to a survey carried out by the Equal
Opportunities Commission in 2006, over 40% of UK women
and 10% of men are making this lifestyle choice by
opting for part-time or occasional work patterns, rather
than the traditional '9 to 5' regime. So now, there is a
growing pool of expertise looking to undertake work at
‘normal’ hourly or project rates.
“The problem we are solving is one of reach and one of
quality assurance” says Thrasyvoulou. “Through the
system you can reach people whom you’d never be able to
reach before. You can easily find a company to build
your website, sure, but how else do you find that one
person who has a day a week to spare and can do it at a
fraction of the cost? And how do you know that they will
be reliable and not run off with your money?”
“Our model solves both problems. With a growing
community of freelancers, who each and every time get
rated on performance from actual users, you have at your
fingertips a vast and growing resource of skills to tap
into, with no cost of entry. And when you think that 30%
of UK companies turnover is accounted for by small
companies with under 50 employees (according to the
DTI), you start realising that this is a big problem to
How to attract working mothers
The majority of working mothers require
flexibility in their working arrangements but 90% struggle to find
it. And that could open doors for smaller organisations that have
traditionally missed out on top staff
Post Date: 11/09/2007
firms that are prepared to offer flexible and home-based
working part of the time could benefit from working mothers
who are keen to get back into the job market.
According to a recent survey by
workingmums.co.uk, many mothers feel employers are indifferent
to their family commitments and 90% said they found it
difficult to find flexible work.
With many smaller companies struggling to
recruit decent staff in key areas, this research suggests
firms that are willing to be flexible over working
arrangements could be attractive to well-qualified and
The survey showed that mothers are hungry for work and
often have an impressive range of skills and experience to
offer employees but feel that there is a distinct lack of
opportunities to utilise them
“I would have been surprised if the
survey had found that working mothers were finding things
easy,” admitted Mike Emmott, employee relations advisor at the
Chartered Institute of Personnel and Development. “It’s a
tough job and it always will be.
“But I’m surprised that the responses
were not more positive. There has never been a time when
employers were more aware of the benefits of offering more
flexibility to workers,” he added.
Over half (55%) of the respondents to the
research said they would rather work from home with just 6%
saying this did not interest them. But 39% said they would
like to work from home only some of the time, suggesting that
companies requiring staff to be in the office at times yet
prepared to offer flexibility at other points could gain.
“There’s a huge pool of talent and years
of experience that could be tapped should the right jobs be
made available,” said Gillian Nissim, founder of the
“The survey showed that mothers are
hungry for work and often have an impressive range of skills
and experience to offer employees but feel that there is a
distinct lack of opportunities to utilise them.
“Things are improving but there’s still a
perception that there’s a reluctance to offer flexibility,”
she added. “We need employers to think more creatively and to
get beyond the mindset that a job requires someone to be in
the office five days a week.”
How to run a successful family firm
Managing a family business can have many
advantages but can also pose issues that if left unmanaged could
become serious threats to future prosperity. Business Link offers
a few pointers on how to get the right balance
Post Date: 07/08/2007
and working in a family business can be challenging but can
also bring valuable benefits when compared to other
businesses, from greater trust between staff to a stronger
commitment to making the business a success.
As well as the advantages
mentioned above, family businesses can often have a more
stable vision, given their desire to build a business for
future generations. Family members may also be more willing to
make financial sacrifices for the sake of the business, for
example, deferring wages during a cashflow crisis.
However, without careful management the business can descend
into conflict, often due to poor communication or clashes over
pay. To help you run or start-up your family business here are
a few factors to bear in mind:
Communication can be an issue, so make sure you have good
communication channels in place. Family members have a
tendency to assume they know what the other feels or wants and
personal resentments can become business conflicts. Encourage
an atmosphere of open discussion where issues can be voiced in
a safe, blameless environment
Integrating non-family employees with the family can be
tricky. They may feel uncomfortable and/or outnumbered.
Develop a mechanism for providing constructive feedback to
help all staff, family and non-family alike, to feel motivated
and involved. This could be regular staff meetings or an
internal newsletter, for example
How best to pass on your business to the next generation
will be one of the biggest challenges you face. You need
to make the right decisions for you, your family and your
Get an outside
Family businesses can have a tendency to get too close to the
day-to-day running or the business and miss the wider picture.
It is always advisable to have someone, perhaps a consultant,
to advise and act as a sounding board. Think about appointing
an experienced adviser or non-executive director to provide an
impartial viewpoint and help prevent emotions from clouding
Make the commitment
To avoid conflict, draw up a family-business constitution. The
constitution or family creed should include the business
strategy, objectives and ethos, management
structure and dispute-resolution procedures. It should also
cover succession planning, retirement, training and the
appointment and rights of all staff, family and non-family
Paying the people
Remuneration can be a cause for conflict for all. Relatives
being paid more that other staff for no valid business reason
can cause resentment. Set out a remuneration policy which will
help prevent conflict and resentment, ensuring fair treatment
planning How best to pass on your business to the next
generation will be one of the biggest challenges you face. You
need to make the right decisions for you, your family and your
business, effectively balancing the needs of all three. Your
plans should include your key goals for the succession
process, a timetable of the transition stages,
from identifying a successor and then full transfer of
responsibilities and a contingency plan
How to start up a business in the UK
Setting up a small business in the United Kingdom
involves a number of important steps if you want to get things
right first time. There will always be an element of trial and
error in starting up a business; however we hope this overview
will guide you through the initial steps, based on the experiences
of the Coddan CPM team and our contributors
Post Date: 25/09/2007
business start ups fail because of inadequate market research.
Overcrowded sectors, insufficient customer awareness, wrong
location - the list of potential pitfalls is almost endless.
Setting up and running a business is a time consuming task –
you need to be dedicated and focused and able to structure
your time in order to be successful. The rewards of starting
up your own business can be great, but think carefully if you
have the attributes and right sort of personality to cope with
going it alone.
So you want to start your own business, but are not quite sure
where to begin? Maybe you have a fledgling business but need
help to move it forward.
You should think carefully about which structure suits your
particular circumstances before making a decision. Choosing
the wrong structure could expose you to unnecessary costs and
risks, while failure to address certain practical issues may
result in you falling out with your business partners or
Having said that, the status of sole trader suits many
professions where starting up does not require major
investment, and where a skill – such as carpentry, bricklaying
or freelance services – is just as important as business
acumen. It will not stop you from employing people when you
start to get busy, but it will allow you to keep a tight grip
on your business and to run it as you wish.
The rewards of starting up your own business can be great,
but think carefully if you have the attributes and right
sort of personality to cope with going it alone
There are different ways to start a new business. These vary
from self employed and partnership to private and public
limited companies. There are a lot of important points you
need to consider when thinking about starting your new
business. There are also a lot of important questions you need
to answer while considering your future enterprise. These
questions usually include:
What kind of business should I be?
What do I call my business? Do I break a trademark
rights or copyright with my proposed name?
Do I need a license?
How the trading laws affect me and my business?
Statutory insurance requirements
Keeping business records
and many others
Coddan CPM Ltd is here to help new entrepreneurs to make the
most important decisions on the structuring of their new
business operations and help with the annual statutory
requirements: from annual filings with the Companies House and
Tax Office to preparation of resolutions and minutes for
At Coddan, business specialists and consultants also can
assist with the following queries and matters:
Banking and finance transactions
Intellectual property – we advise on exploitation and/or
realisation of intellectual property including patents,
trade marks, copyright and industrial know how in
conjunction with the firm's intellectual property group; we
also advise on confidentiality issues, restrictive covenants
and computer software and hardware licensing
Commercial agreements including agency, distribution and
Shareholders agreements – we have the expertise and
knowledge of many industries to recognise what our clients
Internet start-ups. Web site design and development
Financial services regulations
Company incorporations for both local and foreign
interests – we offer a fast, efficient and tailored fixed
fee service for company incorporations
Apostille legalization, notarial and consulate
certification of the documents
Lack of response will cost business
The average cost to a business of failing to
respond to customer emails within two hours is £18,000 a
year, according to research by Vodafone UK. Yet despite this
many companies still aren‘t prepared for mobile working
Post Date: 01/10/2007
companies have just two hours to get in touch with
potential customers before one in three firms would take
their business elsewhere, according to research by
The research also revealed that the
average cost to a business of failing to respond to
email enquiries is £18,000 a year, which rises to over
£100,000 for one in 30 firms. The total cost of this to
the UK economy is £31bn a year, Vodafone claims.
Yet despite the potential losses,
the majority of companies admit they have no policy in
place for following up with potential customers. Fewer
than one in five has a set response time, the survey
revealed, and less than a quarter of workers say they
would respond to an email from a potential customer.
“Business culture and expectations
are dramatically changing with the development of new
technologies,” said Kyle Whitehill, director, enterprise
business unit, at Vodafone UK.
“As the world becomes more
demanding it is vital for business to be able to take
advantage of opportunities when they arise by being
flexible, responsive and available at all times.”
As the world becomes more demanding it is vital for
business to be able to take advantage of
opportunities when they arise by being flexible,
responsive and available at all times
Four in five business admit they
are not totally switched on to mobile working, the
research suggested, despite the fact that more than half
(56%) of those businesses actively expect their own
suppliers to be able to work remotely.
It‘s not just new customers that
would walk away from an organisation that cannot respond
quickly to an email, the survey showed, as half of those
polled said slow responses from an existing supplier
would be a reason to cancel a contract.
The survey added that Glasgow was
the city with the best remote working practices, with
77% of business claiming to be either fairly or fully
switched on. This compares to the least switched on city
Manchester, where only 48% had access to mobile working
Lost time is lost money
Top Sports agent and CEO issues stark
warning to UK businesses
Post Date: 28/09/2007
business, time really is money. It may be a cliché but
new research backed by the UK‘s business leaders reveals
climate shift in ’new business‘ response times.
Suppliers have a crucial two-hour window to respond to a
sales enquiry or one in three companies say they just
take their business elsewhere, according to the Vodafone
‘s latest mobile working research.
The poll of more than 1,000 Managing and Company
Directors, business owners and corporate decision-makers
reveals the cost to business of failing to communicate
with customers. Businesses expect their suppliers to be
available around the clock yet the survey revealed that
only 20% of sales staff have any form of mobile
communication with their offices.
It also reveals the average value of each lost sales
call costs £18,000. However in the high-stakes business
of professional football and talent management a delayed
response can cost many times that amount…
Businesses expect their suppliers to be available
around the clock yet the survey revealed that only
20% of sales staff have any form of mobile
communication with their offices.
In this exclusive WebTVshow for Newbusiness.co.uk, top
sports agent and CEO Jon Smith, and Vodafone mobile
working expert Bryony Clow warns British businesses not
to let complacency replace competitiveness and offers
experienced advice for businesses looking to refresh
their responsiveness. Smith knows how important it is to
keep in touch with your clients at all hours and how
failure to respond can cost a business dearly.
Alliance aims to boost business skills
The government is backing a joint initiative
between colleges and businesses aims to provide a closer match
between training and the core skills required by employers
Post Date: 24/10/2007
It brings together employers, through their Sector Skills
Councils (SSCs), who can identify and articulate their
skill needs, with college principals who have the
expertise to deliver the training to meet those needs
Employers and colleges have joined
together to form a new initiative which will attempt to create
a ‘demand-led’ approach to skills training.
The alliance between the Skills for
Business network and the Association of Colleges will create
14 new employer/college sector skills groups led by a college
principal to develop skills ranging from basic writing to
foundation degrees and diplomas.
“It brings together employers, through
their Sector Skills Councils (SSCs), who can identify and
articulate their skill needs, with college principals who have
the expertise to deliver the training to meet those needs,”
said David Hunter, chief executive of Lifelong Learning UK and
chair of the skills coalition.
The joint initiative has come about as a
result of the number of employers complaining that new
recruits are unprepared for the world of work, despite having
qualifications from schools, colleges or even universities.
“Employers have been telling us that
despite the juggernaut of qualifications, applicants aren’t
coming through with the skills they need,” said Tom Bewick,
chief executive of Creative & Cultural Skills.
“This is why industry and education
really need to work together. This flagship group provides the
direct link between supply and demand. We can now help to
deliver education and training that is truly responsive to the
needs of employers.”
The alliance has now been officially
endorsed by John Denham, secretary of state for innovation,
universities and skills. “The government’s ambition to make
this country a world-class leader in employment and skills by
2020 is being realised,” he said. “We are giving employers a
powerful voice in closing skills gaps so they can control the
design of training and its delivery, where and when employees
Staff ’need financial education‘
Educating employees about the nature of the
financial markets and other matters such as savings and mortgages
could help companies cut down on staff stress, sickness absence
and even litigation, according to the CIPD
Post Date: 21/08/2007
can minimise the negative effects the recent stock market
turmoil have on their staff by educating employees about the
financial markets, the Chartered Institute of Personnel and
Development has suggested.
According to Charles Cotton, benefits
adviser at the CIPD, companies of all sizes can cut down on
stress and depression caused by concern over share plans and
pensions pots by educating them about the long-term nature of
such plans and the tax-advantaged status they enjoy.
Reducing staff angst over such matters
can ensure companies remain productive and prevent a rise in
sickness absence at a time when they need to be performing at
their maximum levels of efficiency.
Employers could also extend such
financial training to cover mortgages and savings, said
Cotton. “This comes against a backdrop of increasing mortgage
costs for many workers, with some tempted to stop saving for
their future by focusing on their mortgage repayments,” he
By providing financial education, employers can help their
staff acquire the financial knowledge that will allow them
to shop around for the best mortgage deals allowing any
savings to be redirected
“By providing financial education,
employers can help their staff acquire the financial knowledge
that will allow them to shop around for the best mortgage
deals allowing any savings to be redirected towards their
“Providing employees with advice and
education about financial matters will help them make more
informed decisions about how to save for the future and deal
with concerns when they arise,” he added.
“Better financial awareness will also help minimise the risk
of people making inappropriate benefit decisions subsequently
blaming their employer and impacting negatively on employee
engagement, employer brand and possible litigation.”
Could a staff trip help your firm?
Taking staff on a corporate trip can develop
working relationships and generate employee loyalty. But it‘s easy
to allow them to spiral out of control. The following tips should
help you to plan the perfect break
Post Date: 17/10/2007
these days of cheap flights and staff shortages, many
companies are realising the benefits of taking their team away
as a means of rewarding them for their hard work and building
a bit of team spirit.
But if left to spiral out of control such trips can easily end
up costing far more than you initially envisaged and can even
have the opposite effect on company morale if behaviour gets
out of hand.
Jonathan Miles, corporate sales director at corporate events
and teambuilding company Brilliant Weekends, offers the
following tips for small business owners looking to create a
truly unique experience:
What do staff want?
Find out what interests staff, where they’ve been before, what
excites them and what their expectations are. Look at their
feedback and take it on board: no one wants to be dragged away
from their personal lives on a weekend for something they
don’t want to do
Do this before giving the game away. Don’t drop hints about
Barbados when your budget will only stretch to Barcelona as it
will only disappoint
Plan in advance. Some corporate weekend breaks are booked a
year beforehand. The earlier you book, the better rates you
will get and more choice due to availability. Last-minute
organising can result in panic-buying which means going with
whatever you can get and disappointing your employees
Pay attention to detail
Mistakes mean unwanted stress and often expense. Something as
simple as misspelling a name on airline tickets can result in
£100 per ticket name changes. Booking double rooms rather than
twins can also cause embarrassment and costly onsite changes
Something as simple as misspelling a name on airline
tickets can result in £100 per ticket name changes.
Booking double rooms rather than twins can also cause
If you’re organising an incentive, get people excited. If it’s
a surprise, email weekly clues to them. If they know what’s
going on, communicate as much detail as possible to make them
look forward to the trip and feel that the hard work is being
done for them and all they have to do is sit back, relax and
Know your limits
Decide from day one how many people are going or what targets
they need to meet to participate. Changing the goalposts leads
to increased costs, last-minute changes and some people
feeling resentful that it’s not such a massive achievement to
win the trip if the receptionist is being brought along for
the ride. Agencies sell packages based on numbers so be aware
the price can change considerably if you change your numbers
It’s not all about the budget. You should also be aware of
weather conditions, language barriers, travel times,
public/school holidays, local customs and security risks.
Overlooking something like a bank holiday weekend can have a
huge impact on your weekend, particularly if everything is
Try and budget for an organiser’s inspection to check out the
destination six months in advance. Not only is it good fun,
it’s the best way to decide whether a destination is or isn’t
suitable for your group. You will also feel far more equipped
to advice your group what they are letting themselves in for
and will be able to suggest great points of interest
It can be a nightmare when booking for one, let alone trying
to organise a whole group. Check flight schedules before
deciding on your destination. Low-cost airlines aren’t always
low-cost once you take into account the extras such as taxes
and in-flight meals so it can be better to book with groups
agencies, which are often able to hold prices and don’t
require names until sometimes two weeks before the travel
dates. Ensure your tickets are 100% checked and accurate
Visas visas visas
Check with your employees in advance if they will need them,
how easy it is to get them in time and how you can help them.
Your employees may feel discriminated against if they can’t
participate in the annual jolly due to their nationality
If you are organising meals find out if anyone has allergies
or dietary requirements, if you know in advance it can be
Often an essential part of the trip but a costly one. Decide
if you are offering open bars to employees or if guests will
be required to pay for themselves. Once out of the office some
people can be tempted to get carried away so you may want to
It is unrealistic to think one person from the team can
organise and manage a trip for 150 employees. Use an
experienced agency who will help onsite and take some off the
pressure. You will also receive better rates and support when
challenges arise, as they inevitably always do. It is also
advised you use UK-based agencies so you can easily
communicate and have somewhere to go if you are unsatisfied.
After all, everyone (including you) should be able to enjoy
themselves and not spend the entire trip dealing with
We asked Grant Appleton from HRS, Stefan
Betz of Germanwings and Stephen Miller from Oasis Hong Kong
Airlines whether cost or comfort is more important for
Post Date: 19/10/2007
Appleton, commercial director UK, HRS
Unlike large corporations which generally have procurement
departments to negotiate best prices, small firms frequently
don’t have company travel policies and usually manage their
travel budgets themselves, which can lead to misuse or
misinterpretation by employees.
Research commissioned by HRS at the
beginning of this year showed that for small firms cost is
the most important factor when choosing travel but that
doesn’t mean you have to compromise on convenience or
The best way to handle travel budgets
is to develop a company travel policy where possible. This
doesn’t necessarily mean having preferred suppliers or using
a particular agent, but it can mean insisting on best
practice. For example, the lowest prices for most types of
travel are generally found on the internet. As an
owner/manager you can insist that employees book their
travel through certain specialist sites which usually have
the widest content and choice as well as the lowest cost.
For example, skyscanner.net is a good
price comparison site for European air travel, listing both
charter and scheduled services both low cost and full
service. At HRS.com you’ll find the widest choice of hotels
worldwide on the internet, including a high percentage of
competitively priced independent hotels which you simply
won’t be offered if you book through a travel agent. The
site gives you a full price comparison as well as allowing
you to search by location, facilities and more.
Aside from saving your company money,
there are two further bonuses to insisting that employees
use specialist sites. One, you can easily doublecheck the
price the employee has been quoted to ensure it’s the most
cost efficient. Two, when someone is faced with a list of
pricing options on screen, they begin to suffer from ‘visual
guilt’ so ignoring the cheaper alternatives is more
If your company does a lot of business
abroad, another smart move is to shop around for loyalty
schemes that reward the company, not the individual. For
example, Hertz and Avis both run SME company schemes which
give upgrades, free hire and more. With airlines, these
company focused loyalty schemes are less prevalent but, for
example, KLM has an SME scheme called Bluebiz where the
company racks up miles, not the employee. Schemes like this
can serve to reduce your travel overheads but do check that
you’re still getting a competitive deal overall.
For many companies, travel is the
second biggest overhead after salaries, but by developing a
company best practice travel policy which includes using
specialist internet sites and SME schemes you will make
savings that directly affect your bottom line.
Betz, country manager, Western Europe, Germanwings
Businesses of all sizes are always looking for ways to
increase efficiencies and generate cost savings. Travel
budgets are often one area to fall into this category, but
the last thing a business traveller wants is to arrive at a
meeting tired and stressed. Even on short-haul flights to
Europe, comfort can be just as important as cost when it
comes to choosing an airline to travel with.
Whilst Germanwings is a low-cost
airline, 40% of our customers travel with us for business
purposes and we have preferred supplier contracts in place
with 300 large companies. Part of the way we achieve this
popularity is by offering convenience, simplicity and great
extra services at no extra charge to our business travel
One of the biggest perceived problems
with low-cost carriers is that they fly from ‘nowhere to
nowhere’. Our policy is quite different: we offer
high-frequency point-to-point services to primary airports
in key European business locations. This minimises the extra
time and money that is spent reaching that final
Another bugbear for companies using
typical low-cost airlines is that if a travel schedule
changes at the last minute, can be difficult to reschedule
or cancel flights and the value of a ticket may be lost. The
cost of ‘unused tickets’ can be particularly problematic for
small businesses. During the past year, Germanwings has
launched special ‘Flex Plus’ tariffs to allow passengers to
make alterations to a booking at short notice, free of
charge. Cancellations can also be made.
To appeal to the business traveller
wanting a low-cost yet ‘executive’ experience, our product
has a distinctive quality: a young fleet of aircraft; well
trained crew; executive-style leather seating; and (it goes
without saying for a German airline) extremely high
standards of reliability and safety. Our award-winning
www.germanwings.com also features an easy and
transparent booking process and options to purchase extra
services such as car rental and hotel booking.
Other services that are attractive for
business travellers include web check-in, a customer credit
card, ‘Rail & Fly’ services within Germany, a dedicated
helicopter shuttle in Berlin to the city’s trade fair
centre, and pre and post- trip newsletters.
Meanwhile, our frequent flier programme
– the Boomerang Club – rewards business travellers for their
loyalty (one free flight for every eight return flights),
and offer benefits such as advance boarding and special
And business travellers wanting to
reach a destination in our comprehensive network, where
there is not a direct low-cost flight, can now instead take
‘Smart Connect’ services on selected routes via our hubs in
Cologne/Bonn, Stuttgart and Berlin-Schönfeld. This is a
re-invention of flight transfers specifically for the
low-cost airline carrier market. The benefits are 141 new
available routes, over 500 additional connections each week,
and a Smart Connect fare always costs less than two single
We believe that Germanwings is at the
forefront of low-cost innovation to give our customers a
high level of comfort but for a fair price.
Germanwings is one of the most
successful low-cost airlines in Europe and offers frequent
direct flights from London to Cologne/Bonn, Stansted and
Hamburg, and from Edinburgh to Cologne/Bonn. Prices start at
19 euros/£13including all taxes and fees. Visit
www.germanwings.com for more information
Miller, chief executive, Oasis Hong Kong Airlines
For business travellers, a comfortable journey is vital.
It’s all about arriving at your destination on time and in a
good condition for that all-important business meeting.
That means a good business class offering; one that
provides a superior standard of comfort and service.
As someone who has worked in Hong Kong
for many years, I know how important it is to keep in
contact with your business partners – not just by phone, but
face-to-face – especially in Asia. In fact, I represented a
number of organisations in Asia to ensure they had presence
here for that very reason. Part of my role for one of the
parties I represented involved studying passenger traffic
patterns, and that is where I found that many business
travellers would take one (sometimes even two) stops to get
Why? Well, the price was one factor,
the other was comfort, because they were travelling in
business class but didn’t want to pay the higher fares for
the privilege of flying direct or non-stop, something which
was especially difficult for SMEs expanding their operations
abroad. It was then I realised there was a need to provide
affordable business-class travel without compromising on the
standard of comfort, service and safety you'd expect on a
A business-class service should give
passengers the smoothest journey to their destination.
Priority check-ins minimise waiting times, lounge access
aids relaxation and on-board facilities maximise the
opportunity for work or rest, something businessOasis is
proud to offer. With both inbound and outbound flights
flying through the night, comfortable business-class seats
with up to a 60' pitch allow for sleep to reduce the effects
of jet-lag. And with landing times that permit a full
working day in the UK and afternoon appointments in Hong
Kong, business people can step straight off the plane and
into meetings, maximising their time in their destination.
Another very important factor for
business travellers is the regularity and reliability of
service. Picking an airline that offers both a frequent
service and has a solid on-time performance record helps
remove the stress of business travel and allows you to relax
en-route safe in the knowledge that an important meeting
will not be missed. Oasis does not have a perfect record of
on-time performance, but we did clock in 91% average for the
last three months on the London Hong Kong route, which I am
led to believe is the best. (Average is 75%).
How to lower your energy bills
Reducing the amount of energy your company
uses can cut bills and your carbon footprint. The Carbon
Trust explains how to go about it
Post Date: 30/10/2007
When you consider that lighting an office overnight
wastes enough energy to make 1,000 cups of tea, the
need for businesses to take action to improve the
efficiency of their lighting has never been greater
With the onset of winter, small
business owners are being urged to consider ways of
reducing the amount of energy they use and reduce their
overheads in the process.
The Carbon Trust is warning that
small firms are likely to see their bills increase over
the winter months as lighting and heating costs
escalate, and has produced a guide to help companies
identify the main areas where they waste energy.
The organisation claims that by
implementing low and no-cost energy-saving measures
businesses can cut bills by up to 30%, as well as
reducing their carbon emissions.
“When you consider that lighting an
office overnight wastes enough energy to make 1,000 cups
of tea, the need for businesses to take action to
improve the efficiency of their lighting has never been
greater,” said Hugh Jones, solutions project director
from the Carbon Trust.
“Implementing simple and low-cost
energy saving measures such as cleaning windows,
investing in energy-efficient lighting or making the
most of the daylight, will help businesses avoid
spiralling energy bills as well as ensuring that they
are playing their role in the fight against climate
The Carbon Trust offers the
following tips to help companies reduce their energy
Think before you flick the switch.
Daylight may be fading but there are still about 10
hours of sunlight a day, so take advantage of the
natural light by opening blinds and ensuring that
windows areas are kept clear
Good housekeeping. Simple
measures, such as ensuring that staff switch off
lights when rooms are unoccupied, can reduce lighting
costs by up to 20%
Keeping up appearances. Ensuring
that lights and windows are regularly cleaned enables
businesses to take full advantage of the natural
light. If windows are dirty then employees are often
forced to use electrical lighting
Staying in control. Lighting
controls, such as those that have light sensors, can
regulate lighting and provide substantial savings
Go for an upgrade. Replacing
lighting with energy-efficient alternatives is an
effective low-cost investment that can save you money
We asked Graham Paul of Electricity4business,
Kanat Emiroglu from British Gas Business, Haven Power's Peter
Bennell and James Constant of Bizz Energy what the main energy
utilisation considerations for small companies will be in 2008
Post Date: 30/10/2007
Graham Paul, sales and marketing
With rising costs of business electricity, to keep the lights on
it is estimated that around 10% of a businesses annual overheads
are electricity costs. There are a number of considerations to
take into account to concentrate your energy on keeping business
electricity overheads low into 2008 and beyond.
Firstly, remember: ‘use less, pay less’.
Being energy efficient isn’t difficult to incorporate into your
daily working life. Things like closing the lid on the photocopier
when not in use, for example, can be done without mass expenditure
on energy-saving measures and still save your bottom line more
than you realise over the course of the year.
It is fact that the most competitive energy
prices for small firms can be achieved by shopping around and
switching to the supplier offering the best price. There are two
categories which businesses can easily fall into. The first being
those who simply aren’t aware a cheaper price is available
elsewhere and the significant savings which can be made by
When a business makes the switch, the
business is offered a ‘new customer only’ pricing tariff. This
means that during the renewal period, these low prices are not
available anymore as the business doesn’t qualify as a new
customer. Instead, they are rolled into evergreen contracts, at up
to double the amount when compared to a new customer.
This is especially relevant as business
electricity is on the rise. With the recent increase in wholesale
price being almost a 25% rise since April 2007 alone, prices only
set to rapidly increase. Just think of how this could affect your
bottom line if you don’t act now.
The second group are those who have made the
attempt to switch supplier, but cannot move due to not
understanding complicated contractual objections as they can’t
comply with cancellation requirements.
Don’t worry if you don’t understand the small
print: many businesses don’t, but our ‘guide to the small print’
will help you avoid the pitfalls which are easy to fall into with
electricity contracts. Even if you are not in the position to
switch supplier, its worthwhile taking a look at what you could be
Kanat Emiroglu, director, SME
markets, British Gas Business
A few years ago, not many businesses would have given too much
thought to where they bought their energy or how much their
business used in the average year. However, the picture has
changed markedly in recent years. Increasing costs for businesses
driven by sharp rises in the wholesale market have meant the issue
of energy coming much more into focus.
The reality is that the wholesale energy
markets could remain challenging as we move into 2008 and so, for
smaller businesses in particular, value for money is key. That
doesn’t just mean getting the cheapest deal. It also means getting
quick and efficient service when you need it so you can get on
with doing the things you need to make your business run
efficiently. That’s why at BGB we’ve given all our customers a
dedicated account manager.
The issue of businesses’ carbon footprints is
another that will remain key in 2008 and at BGB we believe in
practising what we preach. Centrica, the parent company of BGB,
was recently named the greenest major UK supplier by the WWF and
the wider issue of the environment will remain central to the
energy agenda next year. By choosing an energy supplier with a
lower carbon footprint, businesses of all sizes can do their bit
to help the environment.
Just as important though is making sure that
you’re not wasting energy either. Keeping control of overheads is
always good business practice but businesses need advice on how
they can save energy, save money and save the environment into the
bargain. That’s why we’re launching a free online audit for all
smaller businesses off the back of the success of our Energy
Savers’ Report in the residential market, which helped 1.8m people
save around 12% on average in their energy usage.
Next year will also see the arrival into the
business market of energy performance certificates. Already
established in the house sale market, these will be needed on the
sale or change of tenancy of any commercial building over 500m2
from April next year and from all other buildings from October
EPCs show just how important the green agenda
is now to all businesses, whatever size they are. That’s why, for
smaller businesses where time is tight, expert advice will always
come in handy and at BGB, we’re determined to carry on helping
businesses whenever we can.
Peter Bennell, chief executive, Haven
The UK energy marketplace today is a very dynamic one. A
fluctuating world market for gas and oil is creating volatility in
UK prices, making it difficult to plan and budget for both UK
suppliers and customers. Although many business customers have
negotiated fixed-term contracts for supply, those on short-term
agreements and those coming to the end of their current contract
face uncertainty and the possibility of uncertain increases in
their energy bills.
Business electricity supply contracts are often complex. For
smaller businesses that do not employ dedicated energy mangers or
buyers, it can be difficult to establish the best choice of
supplier and/or contract for their particular operation, both in
terms of reflecting their usage patterns and pricing levels.
Energy monitoring and management
Monitoring and managing energy consumption is becoming
increasingly important for small firms, not only to control costs
and maintain profit margins but to respond to growing internal and
external pressure to reduce the business’s environmental impact.
Like the domestic electricity market,
estimated meter readings and inaccurate bills are a huge problem,
often leading to large catch-up bills and account queries. Many
suppliers cater for the whole range of energy customers and offer
impersonal customer service through large call centres, making it
very difficult to resolve problems satisfactorily when they
Without precise energy consumption data, it
is impossible to implement a sensible energy management and carbon
reduction programme. As a result, many smaller businesses will
need to look at alternative metering solutions such as Smart
Meters. Smart Meters employ remote data retrieval technology to
provide detailed, accurate records on energy consumption on a
hourly, daily or monthly basis. This information puts companies in
complete control of their electricity consumption, enabling them
to take fast, effective action to cut wastage and minimise usage,
reducing both their energy costs and carbon footprint. They can
also be sure that they are only paying for the electricity they
It is well established that, where Smart
Meters are installed, customers typically reduce their electricity
use by 10% with minimal effort.
Carbon reduction and energy
Although effective energy management makes good business sense, it
is the issue of carbon reduction that is looming high on the list
of corporate responsibilities. Companies are being driven to
reduce their carbon footprint, not only to satisfy internal
environmental policies, but for practical business reasons. Many
large organisations in the public and private sector are now
demanding ‘green’ credentials from their suppliers. Finally, and
perhaps most importantly, in order for the UK to meet its
responsibilities under climate change initiatives, the
introduction of mandatory energy regulations is a possibility,
requiring small firms to comply with and keep up to date with
Haven Power specialises in electricity
supply to SMEs, offering an alternative to the large multinational
suppliers with personal, named service contacts. For more
James Constant, chief operating
Against a backdrop of continual steady rises in its wholesale
cost, small firms need to become increasingly clever with how they
buy and use energy. A new, very valuable tool is now available to
small firms, called a Smart Meter, that could save them hundreds
of pounds but recent Datamonitor research has shown that most SMEs
are completely unaware that it exists. Automated Meter Reading
(AMR) through a Smart Meter enables customers to track and price
their energy consumption by providing their supplier with actual
readings of the energy being used on a half-hourly basis.
BizzEnergy was the first to introduce Smart
Meters into the UK and we have found that for most businesses,
just understanding exactly where and when energy is being used is
the first and most vital step to reducing or adjusting usage.
Smart Metering enables companies to make decisions with real data,
as they get a full and accurate picture of their consumption
patterns. The data received enables your supplier to ensure that
your business is on the correct meter profile class and can mean
that you save up to 20% on your electricity bills straight away.
When it comes to the bills you get once a
Smart Meter is installed, they will be timely and accurate with no
nasty surprises. Smaller businesses are unlikely to accrue money
just in case their estimated energy bill is too low so when an
actual meter read results in a higher bill coming in, it can often
cause cashflow problems. With a Smart Meter those problems are
avoided. They are also less expensive than you might imagine, with
the cost of a typical 10-year lease deal of a Smart Meter
averaging out at around 50p a week.
Ultimately, Smart Metering puts small firms
in control of their energy consumption in a way that was
previously impossible due to prohibitively high meter costs and
connection charges. Savings of 5-20% are being reported with Smart
Meters, as they have been able to move onto better tariff options
and implement more effective energy efficiency measures. As a
result, Smart Meters can also significantly improve the carbon
footprint of a business, which is partly why the Carbon Trust
would like them to be compulsory for all SMEs. With the savings
they bring to the bottom line as well as the environment, 2008 is
undoubtedly the year for small firms to get smart with their
Green energy turn-off for SMEs
A crucial report from the NCC (National Consumer
Council) has highlighted that the recent trend for paying higher
tariffs for the purchase of green energy does not mean it
guarantees actual usage of green energy – merely just paying for
Post Date: 04/09/2007
NCC investigation criticises Ofgem‘s current system in place
to classify green energy and highlights the need for a formal
definition of what energy qualifies as ’green‘ to be
introduced by the gas and electricity regulators.
Existing green energy tariffs in place are not as efficient as
they may seem; nor do they always deliver many of the reported
environmental benefits featured in slick advertising
campaigns. The reality is, even the better green tariffs
deliver a reduction of just 6% of normal carbon emissions in a
As there are no strict guidelines in place, it encourages
confusion for consumers and businesses alike. Combined with
complex legislative rulings, consumers are further at risk to
being misled by claims.
The report calls for a rigorous system of accreditation to be
introduced for benefiting customers, allowing them to easily
make their selection on the energy tariff they have subscribed
to. This should be based on sound industry advice from
suppliers which would allow them to be reassured that the
tariff they choose is definitely the product they receive.
Without a rigid definition of what is and what isn‘t green
to ease confusion; consumers will never know the
difference between clean energy and what they are actually
buying into when they pay for more expensive tariffs
This clouded information given to consumers by the large
suppliers only intensifies the confusion, powering an ongoing
sense of distrust due to customers simply not being factually
aware of what they are buying in comparison to what they are
being assured they are paying for in cleaner energy tariffs.
Supposedly, making the decision to switch to green energy
should be one of the simplest ways for businesses to reduce
their environmental impact. However, the report indicates that
this is most definitely not the case. So far, less than 1% of
businesses in Great Britain have signed up to greener tariffs.
Prices are expected to rise as the energy industry strives to
meet government targets on CO2 reduction. It is of paramount
importance for energy providers to produce new, cleaner energy
to meet these targets because green energy is never going to
be cheap. However, without a rigid definition of what is and
what isn‘t green to ease confusion; consumers will never know
the difference between clean energy and what they are actually
buying into when they pay for more expensive tariffs.
With wholesale electricity prices which are forecasted to
rise, as will energy tariffs which will contribute to an
uncertain time ahead for suppliers and consumers alike.
Graham Paul, Sales and Marketing Director, E4B comments:
’From many suppliers, a green energy tariff isn‘t likely to
mean the most cost effective for business customers. SME‘s
shouldn‘t be the first in the queue for purchasing green
energy, as only 10% of energy available within the business
market is renewable. For now, allow bigger businesses foot the
bill for green energy tariffs until there is a more affordable
alternative in place which will enable SME businesses the
luxury of buying green. The only environmentally valuable
action small business customers can take is to become clever
with energy efficiency and look to keep their bills low‘.
Advertising campaigns by larger suppliers and regulators alike
only encourages the confusion; it is important to provide a
clear and reliable system of grading in order to bridge the
knowledge gap between which tariffs consumers purchase and the
quality of energy they receive.
It should not be a shock to learn from recent reports that
more renewable energy has been sold than actually produced;
thus further instilling that not all is as it may seem when it
comes to knowing the difference between the tariff itemised on
your bill and the energy which switches your lights on.
The safe choice for SMEs is to focus their green intent onto
energy efficiency that they can deliver now until more
renewable energy is created and correctly defined. Independent
supplier, E4B‘s (electricity4business.co.uk) energy efficiency
papers detail exactly how your business can help the
environment by regulating the amount of energy you use.
The team at electricity4business explain the
sensible way for SMEs to be green
Post Date: 09/08/2007
and mid-sized businesses are already doing their bit for the
environment by paying the mandatory Climate Change Levy, set
to rise incrementally over time. And responsible businesses
understand that this is essential for the long-term
sustainability of our planet.
However, to suggest that these same businesses should switch to green
energy and pay even more for the privilege in order to right
the wrongs of big business, the real polluters, would be
imposing an unfair burden on those whose bills have already
doubled since 2005.
Green energy, no doubt, will have its day and rightly so.
But in times where barely 10% of energy is generated from
renewable sources the responsibility to embrace this in the
first instance clearly lies with big business. By doing this
they will help stimulate the market creating the economies of
scale necessary to produce this energy at more competitive
rates for all. When the supply gap shortens and the cost of
producing green energy drops considerably, then is the time
for all businesses to consider the switch.
There’s much that can be done to reduce energy
consumption, for example, with surprisingly little
That’s not to say that small and mid-sized businesses should
sit on their laurels waiting for this to happen. There’s much
that can be done to reduce energy consumption, for example,
with surprisingly little investment. Buying your energy from a
low-cost supplier such as electricity4business will provide
you with the savings necessary to invest in energy saving
devices which over time will help reduce your carbon footprint
cutting your bills still further. To quote from Lord Jones of
Birmingham, known to many of you simply as Digby Jones,‘The
cleanest power station is the one that you do not have to
our first priority is to find ways of using less energy.’
Could you cope with road pricing?
Business owners should think hard about how
they would cope with pay-as-you-drive scheme after research
suggests 86% would be affected by such a move
Post Date: 14/09/2007
half of small businesses oppose the idea of a
pay-as-you-drive road-pricing scheme and fear they would
have to increase prices as a result.
According to a survey by Alliance &
Leicester, 86% of the UK‘s small businesses said they
relied on road travel and 68% would oppose the
introduction of any scheme that charges people for the
amount they use the roads.
Over half (62%) also said they felt
profits would be adversely affected by such a move.
“Small businesses need to think
hard about how they are going to prepare themselves for
road pricing,” said Steve Jennings, director of business
banking at Alliance & Leicester Commercial Bank.
Simply passing the cost onto customers or reducing
their customer base is not going to solve the
problem of road pricing, especially when we know
that consumers are already reining in their spending
“For many, simply passing the cost
onto customers or reducing their customer base is not
going to solve the problem of road pricing, especially
when we know that consumers are already reining in their
spending as interest rates are at their highest level in
six years,” he added.
The poll also revealed that
businesses are worried about the impact such a scheme
would have on their customers, with 28% saying they
feared consumers would stay local as a result rather
than driving to out-of-town companies.
It also claimed that small
companies do not see congestion as a big problem, with
over half of those questioned saying this does not
affect their business.
Just 17% said they wasted a
significant amount of time due to traffic gridlock on
We asked Nigel Underdown of the Energy
Saving Trust, Arval's Mike Waters and Andy Kirk of Quartix
how small firms can run a green fleet while saving money
Post Date: 07/08/2007
Underdown, head of transport advice, Energy Saving Trust
Do you know how much it could be costing your business to
run your company’s cars in an environmentally unfriendly
way? UK business could be saving a massive £2.6bn a year by
driving their existing cars in a greener fashion, which
works out at a saving of a £1,000 per car, per year, every
year, with no initial outlay.
Research by the Energy Saving Trust has
highlighted the enormous monetary savings which could be
made by firms opting for greener fleets, yet 31% of
companies still believe that such a switch would be too
In addition to saving businesses
billions of pounds each year, moving to a green fleet will
positively impact upon the environment and reduce a firm’s
carbon footprint. Recent findings from the Energy Saving
Trust have highlighted that while less than half of UK
businesses have implemented an environmental policy, 58% of
consumers would like to see what the UK’s companies are
doing to combat the problem of climate change.
Any fleet can be run in a less damaging
way yet businesses are often unsure of how they can start
when it comes to reducing their company cars’ emissions. The
issue becomes exacerbated when the company car fleet
management sits outside of the traditional fleet management
groups: in the HR department or with the company director’s
PA. Without experience and feeling that there is no support
out there, those with the responsibility often put it on the
ever growing ‘to-do’ list, and there it stays.
However, whether company cars come
through a leasing company or are company owned, there are a
range of solutions that can be put in place to reduce the
company cars’ emissions:
Promote cars with low CO2 emissions to reduce employee
car tax and national insurance
Evaluate alternative fuel cars to see if they might
benefit your fleet
Ensure vehicles are regularly serviced: poorly
maintained vehicles have higher toxic emissions and fuel
Identify opportunities to reduce mileage by recording
and analysing business travel
Record and analyse individual fuel consumption to
encourage fuel efficient driving
Promote safe, economic and environmentally friendly
Ensure mileage reimbursement rates are environmentally
sensitive and do not encourage drivers to make excessive
Provide access to websites and route planners to
minimise vehicle mileage
Promote satellite navigation and telematics to help
drivers avoid congestion and use the most efficient route
to reach their destination
Review arrangements for tele/videoconferencing as an
alternative to business travel
The Energy Saving Trust offers
free, expert, green fleet advice to companies through its
funding from the Department of Transport. For further
information call the transport hotline on 0845 602 1425 or
visit the website at
Waters, head of market analysis, Arval
If you’re serious about greening your company fleet – and
with the Energy Savings Trust’s latest figures indicating
company cars emit about 16m tonnes of carbon dioxide every
year, you should be – then data is your greatest asset.
In order to implement improvement you
need to establish where your business currently stands. How
much fuel does your fleet currently use? What type and how
many vehicles do you operate? Where do your drivers purchase
their fuel from and ultimately what level of CO2 emissions
does your fleet currently emit? These statistics will give
you a clearer understanding of areas which need to be
focused on for improvement and what steps to take to make
your fleet as green as possible without costing the earth.
Importantly, it also gives you a benchmark against which to
measure your progress.
Once you have established your position
it then becomes more manageable to determine where you want
to go as a company. How are you going to improve the
business mileage of your drivers, their fuel efficiency and
what vehicles you select? There is a risk on relying simply
on your vehicles to achieve CO2 reductions. Vehicles will
contribute, but procurement is only part of the solution.
Hybrids for example, may only deliver savings on inner city
travel and biofuels are still a developing technology.
There is also the grey fleet to
consider. The ‘grey fleet’ represents workers’ own vehicles,
used for business driving purposes which typically do not
fall under the management of the fleet manager. As a result
there is no strict system in place to monitor fuel
consumption and CO2 emissions from these vehicles. Cost is
often quoted as a major barrier to developing a green fleet
policy, but according to the Energy Savings Trust, a company
with a fleet of only 100 vehicles could save up to £90,000 a
year by implementing a green fleet policy.
In the immediate term, fuel cards
present the best solution to reducing CO2 and delivering
costs savings. As many of you will already know, a fuel card
can be supplied by a leasing provider or oil company. A fuel
card is used within a business to allow drivers to purchase
fuel only at the forecourts. This system removes the
possibility of drivers claiming sundry items as part of a
fuel purchase through typical pay and reclaim schemes.
However, more importantly, fuel cards
provide valuable information which is integral to
implementing and measuring an effective ‘green’ fleet
Produce accurate management report
Price per litre and miles per gallon information on
Point of sale detail including volume of fuel
The data collected via a fuel card system can be used
to calculate CO2 emissions produced by individual vehicles
and overall fleet
Provide accurate mileage recording facilities
Choosing the right fuel card can make a
difference to your carbon footprint and monthly bottom line
costs. For example, a fuel card which can be used at
multiple fuel retailers including supermarkets and oil
companies will be much more valuable than a limited network
fuel card provider. Drivers can fill-up at more economical
stations and avoid driving miles in order to purchase fuel.
This impacts on fuel efficiency and reduces overall monthly
Moving forward, additional measures can
also be taken to improve fleet efficiency. A pro-active
procurement strategy which selects vehicles on their
emission performance as well as sustainability and includes
those opting out of the company car scheme, will provide
reductions in CO2 emissions. A driver behavior policy can be
implemented providing drivers with instruction on how to
drive more efficiently, taking into account factors such as
tyre pressure, revving and car loading. This will reduce
emissions, deliver fuel efficiencies and extend the overall
life of your fleet. Consequently, an enforced policy can
result in decreased fuel use and reduced carbon footprint
A true green fleet will not rely on one
specific factor but incorporate each of these measures. The
key is to integrate a manageable green policy which covers
every aspect of the company car driver and actively
reinforce these policies on a regular basis to deliver
on-going, sustainable improvements.
Kirk, sales and marketing director, Quartix
For new businesses operating any number of commercial
vehicles, there is unrelenting pressure to address the
urgent challenges of reducing each vehicle’s carbon
footprint while maintaining fleet operations as
cost-efficiently as possible.
By harnessing internet and mobile
communications technology, advanced vehicle tracking systems
are providing effective solutions to contemporary
challenges. Less expensive than an investment in hybrid
vehicles and more convenient than converting to LPG,
telematics technology offers 24/7 visibility of your mobile
workforce on the web, backed by comprehensive vehicle
activity data; all accessible at the ‘click of a mouse’. The
accuracy and level of detail provided creates countless
opportunities for business owners/fleet managers to effect
cost savings and improve their ‘green’ credentials.
The award-winning Quartix live-tracking
system, for example, is installed in 12,000 UK vehicles and
saves each customer, on average, 50 litres of diesel per
month, representing annual savings of 7.2m litres. With each
litre of diesel used representing 2.7kg of CO2, subscribers
are sparing the planet the effects of yearly emissions
totalling around 19,440 tonnes.
Fuel economies arise through ruling out
unscheduled journeys and duplication/overlap situations.
Using a tracking system, it can be easier to eliminate
inefficiencies, with reductions in fuel consumption and
vehicle wear and tear apparent from the outset.
More fuel is saved through mobile
employees’ awareness of the presence of tracking technology;
they are less likely to use a heavy right foot when aware
that maximum speeds will show up on tracking records and
tend to adopt a safer, more economic driving style.
The more comprehensive telematics
solutions supply internet-enabled vehicle activity reports,
featuring individual vehicle audit trails from which fleet
managers can arrange timely servicing and reap the benefits
of cleaner emissions, optimum fuel usage and extended
vehicle lifetimes. Historical log records can be filed
securely online, saving time, space and paper.
With additional benefits including
accurate timesheets, reduced overtime payments,
more-efficient call placing and increased fleet
productivity, it’s easy to see how savings of up to £2000
per vehicle, per year are attainable.
Quartix live-tracking service requires no specialist
software or equipment for use and its tracking units are
fully-recyclable. For further details contact: 0870 013 6663
Water company taps into
A firm that supplies coolers to
businesses is now hoping to expand into the domestic kitchen,
writes Philip Smith.
Water coolers in offices are becoming commonplace. So much so
that with just 2pc of the market, Kent-based Water for Work and
Home generates £3.6m a year from leasing the machines and
selling water from its own sources.
But now the company is looking to diversify into an as yet
untapped market: water coolers for home use. The idea is not
new, says managing director Ben McGannan. Most cooler companies,
he says, have eyed with envy the market potential of selling
pure chilled water to home owners, but no one has come up with a
viable business model.
The problem, he says, is that the volume of water drunk and the
diversity of the potential customers made it uneconomic. “Unless
you get the volume and concentration of customers it’s just not
But McGannan is prepared to use the steady profits from his
established 5,000 corporate customers – the business works on an
8pc net margin - to underwrite an expansion into the consumer
market. With first mover advantage he believes, given time, that
he can create a business model that will result in a steady flow
of domestic trade.
First though, he has to convince consumers that coolers are,
well, cool. “Water coolers have evolved as an office product,”
he said. “Consumers see it as a big white square plastic office
thing.” Even with new slim, sleek stainless steel coolers, they
still come with the large plastic bottle on top. “I still think
there are enough kitchens that can cope with a cooler,” he said.
With an established test base of 1,000 domestic customers, Water
is now looking for the best way to service a far larger group.
“The thing is that we have no real experience of a mass consumer
market,” said McGannan.
That core group currently buys a cooler for £180 and then has
regular deliveries of the 19-litre plastic bottles. But that,
says McGannan, leaves the revenue streams open to too much
fluctuation. Instead he is looking to replicate the mobile phone
model where customers will get a free cooler and free water for
a fixed monthly payment. Any extra water would cost £7.50 a
“That highlights one of the challenges we have,” said McGannan.
“People assume they will be paying supermarket prices for the
water – around £20 for the 19 litres - because that’s what they
pay for their Evian.”
Even so, McGannan is sure that the time to exploit the home
market is ripe. The market for home water coolers comes from the
growing awareness of hydration, he adds. “People have come to
realise that they are not adequately hydrated. In fact, 60pc of
us are only moderately hydrated most of the time. That affects
our concentration and our health.
Once people become aware of the need to drink more water,
believes McGannan, then demand for his water coolers will take
off. “Our biggest challenge is reaching that consumer market.
“Once people try it they love it, but we have to find a cost
effective way to market home coolers,” he said.
So far the signs are not good. A recent 250,000 mail shot
generated just one new customer. With a marketing budget of
£500,000 a year – and little scope to increase that – Water
needs to find some innovative ways to raise its profile.
Moving into the consumer market is not the first diversification
for the company, which began life as engineering firm George S
Clayton. Having been bought by McGannan’s father, it moved into
bottling water for the likes of Buxton before ditching its
engineering origins and using its 20,000 sq ft site for the more
profitable service industry of sourcing, supplying and servicing
onsite water coolers. McGannan’s business now supplies 9,000 of
the more than 500,000 coolers in the UK.
The bulk of the water, which it tankers to its site for
bottling, comes from a source the firm leases in Kent.
With depots in Suffolk and Leicestershire, plus partner firms in
Bristol, Birmingham and Sussex, Water plans to triple its
customer base to 15,000 corporate users within five years and
increase domestic users to 200,000 within a decade. “We need to
unlock that potential and grow our business,” McGannan said.
With an average annual domestic spend of £260, that will
generate revenues of more than £50m.
Printer presses on despite lack of orders
Paul Matthews has everything he needs for a
successful and unique business - except customers. Paul Bray reports.
Like the lady in the song, Samaron Printing is all dressed up with
nowhere to go. It has a unique business proposition, bags of
enthusiasm, premises, printing equipment, a website and some stunning
samples, but hardly any customers.
Since the firm was founded in July 2006 sales have totalled just
£2,000 and proprietor Paul Matthews, who has remortgaged his house and
invested £30,000 in the business, is running out of cash.
The core of Samaron is a printing machine - so vital that Matthews
won't even reveal its name for fear that potential competitors will
acquire one. Originally designed for making signs, it can print
directly on to any material that's flat and no more than 15mm thick:
sheet metal, glass, laminate flooring, ceramic tiles, even wood and
"It lets you do photographic quality reproduction on weird and
wonderful materials," says Matthews.
The process is not cheap or suited to mass production. Samaron's
principal sale to date consisted of three photographs printed on
aluminium sheets 4ft square and costing £500 apiece. So Matthews is
aiming at businesses, artists and the high end of the domestic market.
A company could have its logo printed on the carpet in its reception
area. A nightclub could be redecorated from floor to ceiling in metal
and glass. Rich householders could splash family photographs across an
entire wall on dimpled aluminium that sparkles like diamonds in the
The results, says Matthews, have to be seen to be believed - and
that's the problem. He and his wife, Kim, spent £15,000 creating a
showroom and print shop from a disused aviary at their home at
Riddings, Derbyshire, just off the M1 near Nottingham.
"You have to walk into the studio to understand how unique it all is,"
he says. "Everyone who's been here has been wowed by the quality."
There just haven't been enough of them. Matthews tried advertising in
local glossy magazines, which brought in most of his tiny turnover and
a few prospects. He made hundreds of cold telephone calls to design
studios and commercial artists, only to be fobbed off by
He had a website built (samaron.co.uk),
although it's pretty basic. He even scoured Yellow Pages and
sent out mailshots consisting of several hundred individually printed
A2-sized sheets of aluminium to demonstrate the quality of his
The result has been a trickle of interested visitors but precious few
orders, so Matthews knows he needs to beef up his marketing. He
learned the hard way about the value of marketing. During the last
World Cup he had the novel idea of selling car wheel covers sporting
the England flag. Several soccer clubs looked seriously at the concept
and even Comic Relief appeared interested.
But Matthews missed the boat, and when England were knocked out of the
competition he was left with 14,000 Cross of St George wheel covers
and a five-figure hole in his bank balance. "It could have been really
big if I'd done it right, but it just wasn't properly marketed," he
Marketing Samaron properly won't be cheap, and nor is running the
business from day to day. The lease on the printing machine costs £733
a month (Matthews also paid a £5,000 deposit).
Add the cost of the studio makeover, printing materials, mailshots, a
part-time worker to operate the press and a public relations company
recently brought in to help boost the firm's profile, and the couple's
initial £30,000 is almost spent.
Samaron is now being financed - just - by Matthews’ 'day job', the
small landscape garden business he has owned and run for seven years.
(His previous careers have included owning a graphic design firm and
working as a packaging design manager at retailer Boots.)
This situation isn't sustainable, he says, hence the need for an
injection of capital. "If I had the money I'd get a good marketing
agency to advise me on where to advertise and how else to promote the
He'd like another £30,000, but banks are understandably reluctant to
lend to a young business with almost no turnover. So the next step is
to consider private investors.
"The equity bit is worrying as Kim and I watch Dragon's Den on
TV, but 25pc sounds OK," says Matthews.
As well as money, he wants an investor who can advise him on how to
get the best value for his marketing spend - preferably someone who
also has existing contacts in the design or leisure industries and can
open doors for the fledgling firm. And he needs them soon.
He knows of no direct competitors so far, but if one start-up firm can
do what Samaron does, others could easily follow.
Running the landscaping business and Samaron simultaneously is taking
its toll. "I was working until 2.30 the other morning," says Matthews.
"I feel I've taken the company as far as I can in both money and
expertise. I'm still sure that there's a market out there - I just
don't know how to connect with it."
Autocentre investors with drive wanted
Finding enough franchisees to expand the Mr
Clutch chain of repair shops is proving a sticky problem, reports
Joseph Yussuf has to find new franchisees if he is to realise his
dream of rolling out the Mr Clutch chain of car repair and service
centres across the UK.
Yet despite a healthy interest from those willing to invest £130,000
of their own funds in the business, Yussuf’s search is proving less
“As a franchisee this is not an easy business to run,” says Yussuf,
53, the co-founder and chief executive of the privately owned family
“You don’t need to be in the motor trade and you don’t need to be
super intelligent but you do need management skills and you do need
The rewards are there for the taking, he says. Earnings for the
franchisees can hit £100,000 a year; £70,000 is normal.
“Once they have established the business it can give them a really
good lifestyle,” says the one-time panel beater who left school with
no formal qualifications before opening his first garage in London’s
But those looking for an easy life need not apply. “Every potential
franchisee has first to work in the business and if we wouldn’t
consider employing them as a manager we won’t offer them a franchise,”
“We only pick one out of every 200 who apply. A lot of people simply
haven’t got the ability.”
Mr Clutch supplies and fits clutches, brakes and gearboxes at a mix of
25 franchised sites and 15 company-managed centres, many of which are
also adding general servicing and MoTs to their motoring offering.
The business has annual revenues of £18m and gross margins of around
80pc from its retail, manufacturing and distribution divisions.
Mr Clutch also makes clutches which it sells to automotive parts
suppliers across the UK and Europe as well as to its own sites. The
high volumes help to keep unit costs down.
It has a £10m property portfolio, the company-owned centres, on which
there is £1m of outstanding debt. The aim is to double turnover in
three years by expanding from 40 to 150 centres which would make Mr
Clutch a nationwide chain.
Yussuf could open more company-owned sites but he is looking to create
a business without the heavy bureaucratic and managerial burden that a
fully managed network would need.
“I want a body of people who are as committed to this business as I
am. With franchisees I thought it would be easy because they were
putting in their own money,” he says.
With sites already in Durham, Bristol and Manchester, he wants to see
the Kent-based Mr Clutch in every major area - once he finds the right
locations and people to run them.
Potential franchisees have to go through a gruelling selection process
that begins with a psychometric test and ends with a three-month stint
on the shop floor.
“Our franchisees have to understand the company dynamics. They have to
live and breathe Mr Clutch and ask if they can still see themselves
running the business in 10 or 20 years’ time.”
The commitment is long term on both sides. Despite having created a
multi-million pound business from a £250 investment, there are no
plans to take Mr Clutch to the Alternative Investment Market or seek a
trade sale. “What would we do with the money? Buy a bigger a house,
have more leisure time? Whatever we do, I want it to be of benefit to
the whole business,” says Yussuf.
Franchisees also get access to the Mr Clutch central services, which
include an HR team to ensure they stay on the right side of employment
law, ongoing training, and the systems and structures devised and
developed over the past 27 years.
“We provide equipment, know-how and we help them recruit staff,” says
Yussuf. The company also provides a property search, ongoing marketing
and centralised purchasing. But the main thing is access to the brand.
“With them using the Mr Clutch name over the door we have to make sure
we get the right person,” he says. “Our biggest risk is if a person
takes over a business that they can’t handle. Then the customer
suffers and we suffer.
“The key to the continued success of Mr Clutch is getting the
ingredients right and the main one is the guy running each centre,”
says Yussuf. “He’s the one who has to motivate the staff in the
workshop. He sets the standards. The attitude and commitment has to be
there. We are only there for the back-up.”
But back-up there is. The company ensures each franchisee gets a
holiday. “We want to make sure they are working on peak performance.”
To ensure each owner is dedicated to their centre he only allows one
location per person. He is also keen that their levels of debt do not
exceed 65pc of the investment so they’ll need some equity to match the
enthusiasm, which is one reason why so few applicants make it.
They also need to be flexible and adaptable. Yussuf sees the business
moving away from just servicing the needs of private drivers into the
more lucrative fleet market.
“A problem is that some people get into a comfort zone. It’s not that
they become complacent – the standards remain – but they could be
driving the business forward more.”
Even if Mr Yussuf does find all the franchisees he needs for the Mr
Clutch growth, his problems will be far from over. He’s about to
launch a new franchise model offering a valet and minor repairs
service called Suds n Scuffs.
That growth, like all the rest, will be financed from retained profit.
But he’ll still be looking for would-be business owners to invest in a
Swimming pool designer aims to make a bigger splash
Costing £100,000 plus for an indoor pool
Mark Saxton is seeking the seriously wealthy, but he wants to find
clients closer to home, as Catherine Wheatley reports.
An indoor swimming pool is the ultimate home improvement for anyone
prepared to splash out upwards of £100,000.
But many seriously wealthy property owners do not realise that schemes
that unite stylish design and smooth engineering in a manner that
pleases planners are all too rare, according to Mark Saxton, managing
director of Pool Architecture.
Since launching the business a year ago, Saxton has successfully
managed more than 50 pool projects – many in listed properties –
including saunas, steam rooms, gymnasiums and cinemas, with unique
design details such as heated ceramic sun-loungers.
“Architects have design and planning experience without specialist
pool knowledge. Pool companies have mechanical and engineering
expertise but they want to build a box that looks the same every time.
We are probably the only company that sits in the middle,” he says.
Many start-ups struggle to attract clients in the early stages. But
the problem is particularly acute for Pool Architecture, as its market
is limited to a select group of high-net-worth homeowners spread
across the country. Mr Saxton, based in Tetbury, Gloucestershire,
spends hours travelling to clients in France and the Scilly Isles,
though there are potential customers nearer home.
“We need to increase our exposure,” he admits. “I don’t want to be
driving to Newcastle or Edinburgh when there is a concentration of
wealth along the M4 corridor and in the Home Counties.”
Saxton, a quantity surveyor and project manager, started Pool
Architecture to offer clients architectural and design services
alongside the surveying expertise provided by his established firm,
Pool Project Management.
Pool Architecture is a one-stop shop, he says, that manages the entire
process of devising, building and maintaining a domestic swimming pool
complex. First, the company provides a design and development survey,
before drawing up plans that satisfy both the homeowner and the
planning department. Pools can be built in basements, barns,
extensions or existing rooms, often making good use of redundant
space. “We see houses with ballrooms or orangeries that these days
really have no use,” he says.
More than 90pc of his schemes win planning consent, he claims, even
though many clients live in listed properties. “Construction work on
listed buildings is zero-rated, so there is no VAT on the project,” he
Next, the company prepares detailed drawings and specifications, and
advises on potential construction risks, including buried pipes and
ground water. Then it finds a local contractor and acts as the
client’s consultant and agent during the building work, ensuring that
the project is finished on time and to budget. Finally, it will draw
up a maintenance manual and set up a service contract.
“We don’t do the building itself,” Saxton says. “Consultancy skills
are portable, but you can’t transport bricks and mortar construction
expertise because you can never compete with local builders with the
Pool Architecture is poised to take advantage of the growing demand
for indoor facilities as Britain’s wealthy keep spending, he says. He
estimates that up to 1,200 pools are built each year, costing an
average of around £200,000 - but the costs can go as high as £500,000.
“There is a lot of work to be done on a bespoke basis for private
clients. It’s a joy to deal with high-quality projects that give
people a lot of pleasure.”
He admits the business is a barometer of the broader economy. “It’s
the last thing people will spend money on in a recession but it’s not
necessarily connected to rising house prices.”
Recent clients have included hedge-fund managers, property developers,
venture capitalists and car dealers.
In its first year, the company - which employs a full-time architect
as well as freelance architectural technicians, planning consultants
and interior designers - achieved a turnover of £100,000 and a very
small profit, based on fees of 12.5pc of a project’s total cost.
Saxton would like to double revenues in the next two or three years
and to hit £500,000 in year five.
At the moment his marketing expenditure consists of little more than
fortnightly advertisements in Country Life magazine. “We get a
certain amount of repeat business from architects and we get the odd
name by recommendation, but one wealthy client does not necessarily
Developers could be a key source of future contracts, he says. The
company recently advised on fitting pools in two separate £4m
speculative residential developments in Cheshire and Gloucestershire.
“Twenty years ago homebuyers expected to get beautiful fitted
kitchens, but now they want indoor pools. People are concerned about
The firm might also extend its reach to include luxury outdoor pool
developments that feature landscaping, changing rooms and lighting,
Pool Architecture could be well poised to make a big splash in an
Broadcaster seeks a
Flamboyant entrepreneur Jonny Gould
has carved a niche for himself over the airwaves, reports David
Sportsmedia began by offering sponsored broadcasts to local
radio stations; but diversification into new channels and topics
has left its founder with growing pangs. “I have no idea how you
write a business proposal,” Jonny Gould was told by his father.
“But make sure there are no spelling mistakes and work out how
much it’s going to cost you first!”
It was not the most promising start for the young sports
enthusiast’s business career.
Having discovered his ball control skills were average at best,
Jonny Gould resorted to working as a sports newsreader for the
BBC local radio station in Birmingham. After moving to a rival
commercial radio station, he set off to seek his fortune in
To his surprise, he was able to negotiate the sponsorship of
radio broadcasts transmitted on 125 stations reporting on the
1992 return of South Africa to the international rugby scene,
when they played England at Twickenham. “I was making it up as I
went along,” admits Mr Gould, “but the proposal was approved and
I suddenly realised the potential for sponsorship sales on radio
Without delay, he formed his Sportsmedia Broadcasting company.
Then he waited. It took another 13 months before he was able to
secure his next sponsorship contract. The next deal came just 13
days later. The long, painful start-up phase had taught Mr Gould
to focus on exactly what he was selling: guaranteed
‘live-to-air’ broadcasts from the event the company was
Business began to pour in. “On one day in 1994 we did four live
outside broadcasts in one day,” says Mr Gould. “It was going out
of control and I had to take on three new staff in 24 hours.”
The flamboyant young entrepreneur had hit on a formula that
brought benefits to all parties. Local and regional radio
stations got free sports content, while the sponsors enjoyed the
assurance of guaranteed exposure within sports news bulletins
and live outside broadcasts. Scores of independent radio
stations and national networks of local stations leapt at the
Sportsmedia now supplies its sports content to more than 100
stations. Its content is sponsored by over 20 firms such as
Paddy Power, T-Mobile and Nationwide Building Society. The total
audience is up to 5m people depending on the popularity of the
sports events underway, and listeners hear the sponsors’
messages an average of three times per week.
The broadcasting agency invested in five new studios early last
year plus technology to enable the sports stories to be
localised for each radio station. National sports stories are
now combined with coverage of local and regional sports events
and personalities. This gives it a bespoke, local feel that is
popular with audiences and has helped to sustain the company’s
growth. Annual sales grew by 15pc last year to more than
£750,000. The technology that makes this localisation possible
presents a serious threat to traditional radio stations,
however. Sports fans do not need to listen to local radio
stations for news. They can opt for RSS ‘news feeds’ on their
computer terminals about the exact topics in which they are
interested or receive news text messages to their mobile phones.
Gould has reinvested his profits in two ways to counter this
threat. His new
footballaudio.com website transfers radio-style reporting on
to the web and adds competitions, podcasts, video footage and
Not only is it proving a good shop-window for the company and
attracting website sponsorship, it is also being sold as a
‘white label’ product that other websites can use under their
own branding. SportsMedia supplies a daily football podcast on
Nationwide’s football website and has its own Football Audio
channel on i-Tunes.
Mr Gould expects footballaudio.com to take a 10pc share of
sales, but believes it will be overshadowed by diversification
into new subject areas on radio. Sponsored content covering
environmental topics will start soon, after a move into finance
reporting that started early this year.
“We don’t bother with traditional stock market reports and
interviews with City traders,” Mr Gould explains. “Instead, we
decided to focus on easily accessible, consumer-oriented news
stories about interest rates and the costs of things such as
banking, utilities and insurance that have a direct impact on
Having had the idea in November, Mr Gould attracted IG Index as
the first sponsor the following month, signed up some initial
radio stations in January and profitably taken the 90-second
daily ‘finance news’ broadcasts to air by February. Audience
responses from stations such as Classic Gold have been very
positive and the daily slots will soon grow from late afternoon
to breakfast-time as well. The audience is set to grow to 2m a
Mr Gould has just done a deal to syndicate sports and business
news to Capital Gold’s 25 stations across the UK. “That will
increase our overall total listeners by at least 60pc,” he said.
Those breakfast and drivetime broadcasts started earlier this
To exploit the full potential of finance reporting, Mr Gould
believes he needs to strengthen his management structure. He
cannot handle all the sales and business management himself.
“We are playing a new game here,” says Mr Gould, “and I find
myself being drawn back too easily into the familiar stuff.”
He recognises it is difficult to address the pressure for extra
research, sponsorship sales and management when time and money
“Spellcheck ensures my business plans are spelled correctly
these days, but I’m still having to make it up as I go along.”
Microscope scientists focus on expansion
University spin-off is looking to make the
most of its ground-breaking technology. But time is not on its side,
reports Paul Bray.
Life scientists studying the minute workings of living cells face a
paradox. Atomic force or electron microscopes enable them to see
nanoscopic details, down to just a few clusters of atoms. But this
involves killing the cell, so it is impossible to observe how it works
in life - how it interacts with other cells or absorbs and releases
material, how drug proteins bind to it or viruses enter.
Scientists at Imperial College London and Cambridge University have
devised a new technology that uses a tiny probe to follow the contours
of an object without touching or damaging it.
Called scanning ion conductance microscopy (SICM), this can produce
images of living cell membranes and other soft or fragile surfaces at
50 times the resolution of an optical microscope - as small as 50
atoms across and 10 atoms high.
The scientists’ home-made SICM microscopes aroused interest from
researchers around the world. So, in February 2004, a group of them
teamed up with Noah Freedman, a research engineer with experience of
high-tech start-ups, to produce a commercial product.
They founded a company, Ionscope, 50pc owned by the two universities
with the remaining equity divided among the founders. Freedman, as
chief executive, is the only full-time employee. “Our original
strategy was to do the rounds of early stage venture capitalists and
business angels, build up a team, start promoting the product and get
some sales,” says Freedman.
“But we soon found that, with such a specialist target market and no
orders or prospects, no investor was interested.”
Instead the board of the fledgling company borrowed £125,000 from
Imperial Innovations, a technology commercialisation and investment
company based at Imperial College, as a convertible loan, put in
£60,000 of their own money, and set out to support the business
through sales and “sweat equity”.
It took 18 months to turn the prototypes into a manufacturable product
and another year to win their first order for a £60,000 microscope. To
date Ionscope has received six orders (from the UK, US, France, China
and Korea), of which four have been shipped.
This ‘bootstrap’ growth path is viable but risky. “Our strength is in
our intellectual property - we have several patents granted or pending
- and our experience in applying SICM techniques,” says Freedman. “But
if we take too long to get to market there’s a risk that competitors
will find another way round.”
It was with some relief, therefore, that Ionscope recently signed a
£680,000 deal with a group of business angels, some of them biotech
experts, and finally managed to raise a bank loan under the Small
Firms Loan Guarantee scheme.
The worldwide market for atomic force microscopes is worth £100m to
£150m a year and, with life sciences accounting for three quarters of
all scientific research, Freedman reckons the SICM market could be at
least as big.
Now Ionscope faces the challenge of morphing from a university-based
spin-off into a commercial business.
In classic start-up fashion its microscopes are currently assembled in
a garage, using subsystems from Germany and components made in the UK.
Production could be ramped up without too much difficulty, Freedman
believes, since the skills required are mechanical rather than
But Ionscope still relies heavily on Imperial College, since each new
microscope must be tested against IC’s existing prototypes, virtually
all the special software required is written by IC’s programmers, and
installation, commissioning and user training, is done by IC staff.
Although Freedman is keen to maintain the link with IC for primary
research into SICM, he knows that Ionscope must stand on its own feet.
“Dependency isn’t good for anyone and we need to grow or recruit our
own resources,” says Freedman. “If we were solely responsible for
product development we could prioritise better and focus on the
specific needs of customers.”
Sales support will require scientists with experience of life science
research; persuading them to swap academia for a start-up business
will be a challenge. The software skills required are very specific.
Additionally, the firm needs someone to develop its sales - mostly
through representatives and distributors - and marketing.
“Our primary challenge over the next two or three years is to
publicise our technology and build credibility by persuading
scientists in different fields to try it,” says Freedman.
“We can’t afford to advertise so we’re relying on peer group promotion
- conference presentations, scientific papers by users of the devices
and the experience of scientists who’ve tried them out.”
Ionscope is setting up a demonstration facility at the Imperial/UCL
Bio-Nanotechnology Centre in South Kensington and is considering
providing systems on lease or sale-or-return. Simultaneously it wants
to learn from the experiences of its early customers. “There’s always
a tension between dealing with the problems of existing customers and
doing radically new development, so we must learn to prioritise,” says
The company also wants to forge links with other manufacturers, as
research projects are proving that SICM techniques can be combined
with other technologies. And it will have to work out the best way of
protecting its intellectual property. “There’s a real feeling of
confidence now that the first-generation machines are shipping,” says
Freedman. “But we still have a long way to go.”
Team drink to fruits of their labour
The founders of Innocent Smoothies are mad
about fruit - and so are their loyal staff and customers, writes Jamie
“We’ve had to postpone the launch of a new product because we are
struggling to find enough high-quality blueberries,” says Richard
Reed, co-founder of Innocent Drinks. “Because, of course, fruit is
finite. We are close to nature in what we sell and are dependent on
it, which is a good thing, so we’re happy to have that problem.
The smoothie drinks business, launched from a west London industrial
estate in 1999, has gone from strength to strength. The number of
employees has risen from three to 100-plus, market share has risen to
62pc, the drinks are now stocked in more than 7,000 outlets and it
sells around 1m smoothies each week. The business has gone from zero
to a turnover knocking on £100m. Pretty good going for three
university friends with no experience in retail, distribution – or
“The industry told us we had to use preservatives and to do otherwise
would be madness, not least because the profit margins would be too
small and it would lead to a shorter lifespan of the drinks on
shelves. In a way, I think our naivety was one of our strengths early
on,” says Reed.
Their 6.5pc profit margin could certainly be higher but their customer
base is loyal because of the firm’s insistence on 100pc natural
“We’ve never had a board meeting in seven years and, for us, I don’t
see the point of non-executives,” says Reed.
The lack of outside interference has allowed the business to remain
socially conscious as well as financially savvy.
“We’re weirdly obsessed by fruit,” Reed says. “As a result our drinks
are more expensive than others – but they are better.” Despite the
relatively high prices for drinks (£1.99 for a 250ml bottle of
smoothie), the firm continues to grow.
Reed says one of the hardest aspects of the growth is staff -
employing enough of the right kind of people to keep up with the
“There are two options. Either hire staff that aren’t as good, who
aren’t as socially conscious or financially astute as we want them to
be, or ask our current staff to bear with us, work harder and be
patient. We will hire more people but they’ve got to be right.”
Staff at its London HQ, Fruit Towers, so far seem happy to oblige.
So have they been a success? “No,” says Reed emphatically. “We’re at
the beginning, not the end. At the start we had aspirations of being a
£10m-turnover business and I hoped we might one day become a truly
globally, ethical company. We’re going in the right direction but we
could be much better.”
That’s not for want of trying. The Innocent Foundation ensures 10pc of
profits goes back into the farming communities that provide fruit for
the drinks – meaning there are 18 projects in three continents funded
by Innocent Drinks. Efforts like that drive the founders, motivate the
staff and please the ethically conscious, smoothie-buying public.
Data group chief aims to keep his sales pitch clean and honest
Honesty is the best policy, according to
Mark Roy, founder of The REaD Group, an organisation that helps direct
mail companies to keep their data lists clean.
“Often the temptation is to oversell, just to win the contract and put
food on the table,” said Roy, 46. “Don’t: it just does you a
disservice. Talk common sense to people. It’s pretty hard for anyone
to argue with that. The secret is to be honest and don’t be greedy or
try to pull the wool over people’s eyes.”
It’s worked for Roy. The Kent-based business now has a £15.5m turnover
generating £2.1m pre tax profits. It employs 85 people, with Roy
owning 70pc of the company. Three other directors own 10pc each – the
result of an incentive package. “You can’t do it on your own. If you
try, the business will fall apart. You need others to bounce ideas
off,” he said.
REaD sells information to those sending ‘junk’ mail. Using its data,
lists can be cleansed, removing those who have moved or died. It costs
about 60p to send each piece. “If big chunks are going to people who
are not going to respond, it is clearly a waste of money,” he said.
There are 400 companies that account for 78pc of all junk mail – 3.2bn
items, said Roy. These days companies can pay a licence fee to use the
lists. Paying up front helps control cash flow. But when REaD started
in 1993, they paid for each name used. At 20p a name, the savings are
Roy knows his information is correct because it comes direct from the
public. His first list was a file of those who had recently moved
house. Then came the idea to include the recently deceased. “It can be
distressing to receive a letter to someone who has just died,” said
When registering a death, relatives are also encouraged to add the
details to the bereavement register. It’s free and within a short time
all mail to the deceased person stops – because REaD passes the
information to the direct mail companies.
The details can be posted online but most come in via a reply-paid
envelope given out with the death certificates. Again, it was an easy
sell. With REaD providing the envelopes, the UK’s registrars save some
£120,000 a year in stationery, said Roy.
Offering a simple way to save money is the backbone of the REaD sales
proposition. But according to Roy, you need more than that. “You need
belief in what you do. The truer I am to myself, the more successful I
But what if you simply don’t want direct mail because of environmental
concerns or fears over identity theft?
For a small fee, householders can go to
itsmypost.com and select those organisations they want to block.
“Under the Data Protection Act they are then prohibited from
processing your data, he added. “I know it’s clichéd but this is
win-win-win. We win, as we get paid. Our clients win as they save
money and the mail recipient wins as they don’t get unwanted mail.”
Nurture staff skills -
send them to a silent retreat or up Everest
When an account manager at marketing
agency RPM wanted to be left alone, the boss sent her to India –
to a week-long silent retreat.
It’s all part of a scheme to help staff develop skills and
experiences, which managing partner and co-founder Hugh
Robertson says are essential to maintaining the company’s
“We allocate £1,000 each month to allow staff to do something
they would otherwise never do,” he says.
Staff have to submit their ideas to the “experience fund”. Those
who work at the west London agency have taken part in the
Florida Iron Man contest, learnt massage and trekked to base
camp at Everest.
“It’s about people pushing themselves. It has to be an
experience that will change you as an individual,” says
It’s not simply an altruistic move on the part of RPM. The
agency promotes brands via events and shows, so the scheme helps
staff experience the clients’ product and see it in a different
RPM, for example, recently promoted Strongbow at the Glastonbury
music festival to pick up on the wave of interest in cider
following the latest Magners marketing coup.
Formed in 1993, RPM also works with brands such as Sky, FIFA,
Diagio and Unilever, employs 85 people and has an income of more
That growth, says Robertson, has come from understanding the
brands and their target audiences.
“We are not only meeting marketing needs, but business
objectives as well. Clients have to know that every pound they
spend with us secures them additional revenue.”
But it’s the staff that are the real secret of RPM’s success.
“People skills are probably one of the most undervalued in any
company,” he says. “We pay well - not over the market rate – but
we have lots of softer benefits. People work here because they
feel part of the culture.”
Team building is important to RPM.
They all went to Euro Disney, says Roberston, where junior
account execs were tasked with “parenting” their senior
“It gave them the experience of managing people,” he says.
Senior managers can also join an ownership scheme - 20pc of the
business is staff owned. “We also have open lines of
communication,” says Robertson.
“The best ideas come from within so if someone sees a way of
changing and improving – innovation in the business – we
encourage them to bring it up.”
As well as getting a formal induction, new staff are assigned a
“friend” who will help them weave their way through the office
“We are keen to foster a sense of support where we value each
other. We have no blame culture here,” says Robertson.
A helping hand with
Consultant David Morgan tells Philip
Smith why he’s invested in technology to give medical staff
instant access to records.
According to the National Patient Safety Agency, each year tens
of thousands of NHS patients are given the wrong treatment or
operation because of mistaken identity - and it can be very
“There are the famous stories of people having the wrong kidney
removed. As it was their only functioning kidney, the patients
died,” said David Morgan, a consultant ENT surgeon at Birmingham
Heartlands NHS Trust.
It’s a startling statistic even when placed in the context of a
health service providing 49m hospital treatments a year. “The
errors are usually the result of both human and system errors.
It’s usually down to the operating list being changed at the
last minute which can happen for a number of reasons,” he added.
It was after one of Mr Morgan’s team had wrongly taken out a
patient’s tonsils (they were supposed to have grommets fitted)
that he decided the cumbersome manual process of checking and
verifying patients’ particulars needed a helping hand.
Using funds from his private practice he set up a PhD programme
to find a way of using technology to ensure all the manual cross
checks were carried out. Using RFID (Radio Frequency
Identification), those checks could then be linked direct to the
patient via the standard wristband worn by all undergoing
The bands contain the usual information such as name and
allergies plus a digital picture of the patient but a chip links
directly to the computer systems and PDAs (personal digital
assistants) carried by surgeons, nurses and anaesthetists where
all the relevant patient records are kept.
Any detail changes are transferred instantly and the wristband
tracks the patient as they pass through the operating system.
“We all come to work hoping to do a good job but sometimes
something happens and checks get forgotten. This shows that
those checks have been carried out,” he said.
Realising its commercial potential Morgan and other private
investors stumped up £360,000 to set up Safe Surgery Systems.
Now, with some successful pilots behind it and two new products
in the portfolio, the business is seeking a further £500,000 as
it looks to sell its patented products into the NHS as well as
private health services in the UK and overseas.
The money, said managing director Mr Morgan, who splits his time
equally between the boardroom and operating theatre, is critical
to fund further development and provide working capital as the
two-year-old business moves from its R&D start-up phase into a
potentially global provider.
It needs to establish a second series of pilots to prove the
benefits of the tagging which, he says, not only improves
patient safety but increases theatre efficiency – and as
hospitals are paid per operation – funding. Those who have taken
part in the trials have reported no identity errors, said Mr
Morgan. At £15,000 per theatre and ward to install, the return
on investment, said Mr Morgan, is six months.
Safe Surgery Systems’ income stream and projected margins of
between 60pc and 85pc, will come from licensing its software.
The associated hardware such as PCs, PDAs, sensors and bar code
readers comes from existing suppliers and the firm has teamed up
with providers such as BT to use their sales teams as conduits.
But it’s more than just the money Mr Morgan is seeking. “I know
my limitations,” said the clinician. “We need to consolidate our
management team and find a commercially-driven CEO.”
He is also looking for an investor with good City connections as
Safe Surgery Systems moves towards a trade sale in five years.
Between now and then Mr Morgan and his team of managers,
software developers and sales staff need to rack up some
With the NHS fragmented and cumbersome – there are 390 separate
trusts, each making purchasing decisions, he said, it’s the UK’s
private sector and overseas where the quick wins will happen.
“But the NHS is a huge market and that’s attractive.
“America is the main market for any technology business but as a
small English company we can’t simply trudge over there so we
are looking for a strategic partner in the US,” he said.
A major US cancer institute, though, has approached Safe Surgery
Systems and asked it to tender.
“We have also been approached by Swiss and French companies.”
The company has signed a partnership agreement with an
Australian firm for a pilot to start in October. “We need three
or four pilot centres in the UK and another three around the
world,” he said.
Based on those and other projected sales, the business expects
to move into positive cash flow late next year.
Its current £30,000 a month costs – mostly salaries – are being
met by bank borrowing.
The company is also developing two other products.
One, aimed at gathering critical data at the scene of an
accident which is then relayed to the admissions team ahead of
patient arrival, is being tested by air ambulance crews.
The other is for home care where those with chronic conditions
such as asthma, diabetes or high blood pressure can be monitored
with doctors notified of sudden or significant changes.
Those patients can also be prompted to take essential
medication. “With remote monitoring you can intervene at an
early stage. Three quarters of hospital admissions are avoidable
and this system can save the health service a lot of money.”
This is being tested with primary care trusts and housing
“We have focused on three products. We don’t want to diversify
too far,” said Mr Morgan. “But we have a lot of other ideas.”
Head of SME Issues, ICAEW
David Morgan urgently needs to appoint advisers to take a critical
look at the Safe Surgery Systems and decide the best way forward. With
its primary product requiring a second series of pilots, significant
commercial sales some way off and monthly costs of £30,000, decisions
cannot be delayed.
The original backers’ capital is effectively lost. The business is
living on bank borrowing which is unlikely to continue for long unless
David Morgan or others have offered guarantees. In the circumstances
£500,000 may not be enough. With high risks and the business
haemorrhaging cash, a solution might be to seek a partner. Costs
simply must be significantly reduced.
An appropriate adviser will help to prepare a viable business plan as
well as identify sources of equity finance. The market for start-up
finance is limited - around 15pc of companies receiving private equity
each year are start-ups. Some of the bigger business angel networks
may also be relevant. But he needs experienced advisors to persuade
investors of the business’s potential.
Marketing Manager, PC World Business
Safe Surgery Systems in its current state should focus on one main
product. Branching into new areas before the wristband product is
embedded in the market could jeopardise the business.
Taking the time to consolidate his management team and embed a CEO
will help accelerate this process.
With the correct business structure in place, the company can move
from its current pilot stage through to an actual market roll-out.
Once a foothold has been gained then the company has the opportunity
to cross-sell in its other products and solutions based on the success
of the wristband.
Organisations, especially the NHS, which is publicly accountable, need
to ensure that they are spending their budget wisely on solutions that
can be justified. They’ll all want to see a confident supplier that
knows what it is doing and has the necessary infrastructure to deliver
Ensuring that the marketing of its first product is impressive is
essential for the company’s future success.
Group Marketing Manager, National Computing Centre
With lives at stake, healthcare organisations are naturally wary of
new products. However, the dilemma for young firms such as Safe
Surgery is that it needs revenue now to cover costs and to convince
others to invest. Safe Surgery is not short of good ideas, what it is
short of is a firm order.
Focusing on closing business on the product with most developed
interest - the wristband - should be a priority. The other products in
development should be put on hold until it succeeds. Successful
wristband pilots are important so a concentration of effort should pay
a dividend, especially considering the interest from public and
private sector organisations that need to be covered. Mr Morgan could
use the success of the wristband as a lever for the company’s other
Is Safe Surgery doing all it can to exploit sales channels? 60pc plus
margins are good news for the company but only if sales are made.
How much do the sales partners get and is this enough to really give
them the incentive to put in the right amount of effort?
Director General, Chartered Institute of Public Relations
Who could be against systems that eliminate human errors? What
hard-hearted penpusher could object to electronic tagging targeted not
against criminals but which stops our bodies being lasered in the
wrong places – and can be adapted for early treatment in emergencies?
And what health provider isn’t going to pay to avoid botched
But the medical market is a tough and bureaucratic one: the hard truth
is that while there is a public relations hearts and minds campaign to
be fought here, focussing on patients’ groups especially, innovations
cost. The potential funding for Safe Surgical Systems is held in
budgets that can be as tight in the private sector (with their return
on investment) as in the primary care and acute care trusts of NHS.
David Morgan must show that not only do Safe Surgical Systems work but
that they are cost-effective. This means focussing ruthlessly on the
benefits for theatre efficiency and throughput, helping providers
reduce their costs. Making it a no-lose ‘pay by results’ system is a
winning idea too. There’s no scope for sentimentality in health
Yacht race tycoon grasped a rich opportunity and sailed with it
One Tuesday evening in 1995, a friend of
William Ward asked him if he would be interested in putting some money
into a sailing business. After some nagging, Ward agreed to have a
look at it.
The business was looking for £300,000, but Ward estimated it needed
more like £2m. But then he looked at the figures more closely and was
amazed by what he saw. Ward’s background, importing cane furniture and
buying and selling property, was very much product based. What he saw
with this business was that a lot of sensible, wealthy people were
queuing up to give it their money. Ward saw an opportunity.
The business is Clipper Ventures. It owns two main businesses, the
Clipper Round the World Yacht Race and the Velux 5 Oceans. The core of
the business is the 35,000-mile Clipper race, where 10, 68ft yachts,
crewed by enthusiastic amateurs, race each other around the world over
Yachts are notoriously costly, but Ward has managed to make the
business profitable. Its 2006 turnover was £7.6m with pre-tax profits
up to £880,000. (2005: loss of £1.07m). How? “It was a gamble,” he
says, “but then all business is a gamble. There is a risk/reward ratio
to every business, but in this company, with the revenue streams
already in place, I saw a great opportunity.”
Ward says it is seeing and acting on an opportunity that sets
successful entrepreneurs apart. “You might walk down a street, see an
empty building and think about doing something with it. Then go back
to your office and not do a thing. Then, a few months later, someone
has opened a successful bar in the building and you think to yourself,
‘I could have done that’. Well yes, you could have. But this other
person did. That’s what makes the likes of Richard Branson different.
He sees an opportunity and grasps it.”
Ordinarily, owning a boat is all about spending money. There’s the
upkeep, crew costs, the cost of parts. But not with this business. “We
don’t pay for crew, they pay us to be crew,” Ward says.
Ward has focused on sponsorship to take the business on, although he
admits it’s as much luck as judgement. “I think to get sponsors for
anything you need to have thick skin because most people will turn you
away. We had to think about it from their perspective and tell them
what they might get out of it in terms of coverage, both in the UK and
Velux is a good example. It sells skylights. One of its big growth
areas is Poland, so the company included as part of the sponsorship
deal a plan to create a TV programme for Polish television. It’s
detail like this that makes the difference.
Ward’s business life has taught him three things: one, you’re going to
fail but you will come back stronger; two, listen to advice, although
beware of those with a stake in the company; and three, make your own
decisions. “Be brave and be honest and you’ll be all right.”
The impact of product recalls
Should there be any surprise that the recent
spate of product recalls involve product produced in emerging markets,
and what is the resultant impact on the SME retailer market in the UK
following the recall announcements?
The recent product recall cases involving Mattel and Nokia have caused
considerable concern for the consumer and serious damage to company’s
brand image. With much of reporting on these recall cases being
focused on the consumer and producer, little attention has been given
to the impact on the retailer.
It shouldn’t necessarily come as any surprise that one of these high
profile product recalls involves children’s toys manufactured in
China. Earlier in 2007, the European Commission published its 2006
Annual Report “Keeping European Consumers Safe”. The report
highlighted the increasing number of recalls attributable to products
manufactured in China and other emerging, non-EU markets. The EC
identified a 32pc increase in the total number of notifications from
2005, with products originating in China accounting for almost half of
all cases notified (48pc). Toys now top the notification by product
category for the first time (24pc), replacing electrical appliances
The hard nature of the consumer market and the impact of pressure on
margins is ensuring that companies of developed nations continue to
rely upon China and other non-EU countries for the cheaper manufacture
of products. It appears that the issue of product quality is being
overshadowed by the requirement for cheaper production costs and
The European Commission, in an attempt to improve consumer safety,
signed a Memorandum of Understanding with China in 2006 with the aim
of improving the communication and information exchange between China
and the EU. The EC agreed to allow China access to its own dangerous
product reporting system (RAPEX) on a read-only basis to assist
follow-up on notifications concerning products originating in China.
Additionally, in September 2006 a specific roadmap for safer toys was
signed. This agreement was aimed at ensuring toys exported from China
to the EU are safe by adopting a new strategy for improving the safety
of toys manufactured in China. Part of this new strategy includes the
commitment from the Chinese authorities to strengthen inspection and
supervision of toys exported to Europe.
The customer/retailer dynamic has been subject to significant change
in recent years following the advent of globalisation and the
development of e-commerce. This change in dynamic does not however
change the fundamental product recall responsibilities for the
retailer. The two major steps required are to ensure that the products
subject to recall are not sold on to customers and that the retailer
makes every effort to ensure that customers who may have purchased the
product are aware of the recall notice.
Key processes such as clearing shelves of the affected stock or
removing it from the website listing are essential to prevent
potential legal exposure. If possible the retailer should programme
the till computers to prevent sale of any product that may have
escaped the shelf clearance process. The retailer should also ensure
that the recall notice is posted in a prominent place so that it will
reach the maximum number of potential customers. An e-tailer should
post the recall notice in a prominent place on its website.
Under the Consumer Protection Act 1987 an injured party can sue the
producer, first importer into the EU or own-branders. Suppliers such
as the retailer are not liable unless they fail to identify the
producer, importer or own-brander if asked to do so by a person
A legal remedy may also be available to the injured party directly
against the retailer under sale of goods law, assuming a contractual
relationship exists. In practice, it is usual for any liability claim
caused by a defective product presented directly against the retailer
to be redirected to the producer, importer or own-brander. Often
express contractual terms will deal with the issue of the provision of
an indemnity following a claim in respect of defective product.
A product recall can often cause serious damage to brand image and it
is important that openness and effective channels of communication are
maintained to try and minimize that damage and to prevent injuries to
customers and resultant potential legal exposure.
Coping with workplace
Reasons for the escalating levels of
stress in UK managers have been well documented. Email overload,
organisational change and the speed of communications have all
contributed to increasing the pressure on individuals within
their job roles. This not only affects how managers perform at
work, but can have serious implications to their overall health
and general quality of life. In this environment, it is
important managers are given the skills to identify and manage
sources of stress.
Research by the Chartered Management Institute found that
stress was most likely to be caused by aspects of an
individual’s job. These might include work that is dull or
repetitive, having to deal with difficult customers or clients,
or being too closely monitored by a senior manager. Work-life
balance was another potential cause of stress with managers
reporting they were spending too much time at work; leaving
little time for their personal lives. The third most prevalent
stress factor was job overload with individuals claiming that
they were being set unrealistic deadlines or feeling swamped by
the speed of technology with their organisation.
How individuals respond to stress is very personal to them.
While some experience health problems such as headaches or
muscular pain, others show anxiety in their behavioural patterns
such as nail biting or excessive smoking. Either way, managers
should be made aware of the symptoms of stress so they can take
the next steps in identifying the source and making changes to
combat the problem.
However, while it is important for SMEs to put processes in
place to minimise stress in the workplace, it is also necessary
that managers and organisations recognise the difference between
stress and pressure. In today’s environment, there will always
be times when the heat is on to deliver results. During these
periods, it may be necessary for employees to work long hours or
step-up their performance, but this should not result in
Organisations can offer training or various internal events to
help managers recognise and cope with their symptoms of stress.
In the Institute’s research, health initiatives such as access
to counselling, stress management advice, work-life balance
programmes and flexible working options were found to have a
positive impact on managers’ quality of working life. Clear
guidelines on who managers can approach if they are experiencing
stress at work are also useful to combating the problem.
Obviously it will not be possible to remove the source of stress
in every situation, an important client for example, but there
are methods to reduce the level of stress and support
individuals in developing coping strategies.
Overall, it is important to promote a corporate culture which
encourages honesty. Stress is often ignored as it is seen as a
sign of weakness and inability to cope with the daily pressures
of work. This is not the case and unless individuals address the
matter fully it is likely to impact on their health and
productivity at work.
Ten top tips on media
In an article for
the CIPR’s online magazine –
profile-extra.co.uk – James Davies ACIPR,
managing director of Impact Evaluation,
provides top tips on how to scientifically
target media titles and programmes…
Draw on your previous experience: what
does media impact evaluation of your
previous campaigns tell you about media
category and title/programme take- up of
your stories and messages. Use this to
inform your targeting of the next
Trust your intuition: PR professionals
pride themselves on their intuitive feel
for which titles will reach the desired
audience. Editorial environment is
important. And professionals are
increasingly expected to back up this
intuitive feel with more scientific
The starting point is always target
audience: specify who your primary and
secondary audiences are – this provides a
sharper discipline to your media task. You
want both but it makes you focus on what’s
right for that more specific primary
Ways in which to specify target
audience: age group, for example 16-24
years; gender; geography – London or North
East; socio-economic group – ABC1s etc.
Less obvious ways of specifying target
audience: by life stage, for example
families with children; product/service
category buyers, for example organic food
buyers; or even people living in
particular neighbourhood types, as defined
by Mosaic or Acorn. Many media owners can
provide this information – TGI data for
example, cross references product and
brand purchase with media consumption.
Don’t forget attitudinal or
behavioural types that will lead you to
particular titles: the mindset of a Loaded
reader is going to vary from a Country
Appropriate the widely used media
planning and buying tools of advertising:
rating points – per cent of defined
audience reached by the campaign;
Opportunities To See – the exposure of the
campaign in terms of number of times it is
seen; frequency – number of times the
target audience is likely to see campaign
Where to get the media data: if you do
not have it in-house or cannot get it from
your advertising agency, request the
information from the media owners –
checking that it comes from an independent
and respected source.
Do you want a ‘drip’ or ‘burst’
impact: a ‘burst’ makes maximum impression
quickly but there might be many good
reason, including keeping up with demand,
that lead you to a ‘drip’ approach.
Don’t forget post-evaluation: that
‘virtuous circle’ again – back to point
E-learning and E-Assessment – the advantages for SMEs
Over the past few years E-learning and
E-assessment has been quietly seeping into staff development
programmes amongst larger organisations to the point that the
percentage of people moving from paper-based or off-site training to
e-learning approaches has nearly doubled over the last three years.
SMEs are increasingly looking at ways to successfully utilise
E-Learning packages for their staff, but many are either too busy with
the day-to-day running of their business or not convinced of the
benefits to pursue implementing such packages.
There are many online resources available to SMEs that start at the
most basic packages for IT skills through to top-level degrees,
diplomas and NVQs for all sectors. Many learning centres deliver a
diverse range of qualifications that are commercially highly relevant
and mainly delivered online – furthermore many learning centres across
the UK now utilise Ecordia and other E-assessment systems to deliver
competency-based or vocational qualifications online. This is a
significant step forward in the development of E-learning.
The benefits of E-learning and E-Assessment may not be immediately
obvious to small businesses that are stretched for human resource and
feel that off-site training dilutes and distracts their highly valued
staff. However it is exactly these types of business that are in a
position to gain massively from just such an investment into
e-learning. By utilising such flexible technology, employees can have
access to learning materials, work portfolios and guidance anywhere at
anytime. In some cases E-assessment does not completely rule out a
visit to the training centre or a visit from a tutor, especially for
competency-based training, however these are minimised and due to the
effective online management of the learning process, are much more
Off-site training tends to be ‘one size fits all’ – although specific
in content, it can be too rigid and does not always engage the
learner. It happens at a set time, in a set location - whereas online
training is accessible anytime and can be tailored to the individual’s
needs, enabling them to get the most from their learning and
increasing the likelihood of achievement.
The Internet is a crucial and powerful aspect of E-learning. It allows
support of the learner in real-time and increases staff motivation by
providing an engaging medium with which to learn. Staff are able to
collaborate with others such as tutors, work colleagues and with their
employer management, ensuring that they feel valued and part of a
team. Moreover, they are developing professionally and personally to
the point that they may view their organisation differently, not just
as a workplace, but also as an arena for personal development.
Knowledge management is a much over-used term by business consultants,
but it is an important success factor for many small businesses. The
issue is to retain, utilise and build on a firm’s knowledge – it is
this knowledge that gives many small firms their competitive
advantage. E-learning technology can help firms control learning and
retain knowledge, not least through increased staff retention, but
also by developing its use of e-learning technology – the mix and
match of courses and learning packages can be honed overtime,
increased in quality, and, with the input from your own staff, can
include specific learning for your employees that directly relate to
your business. Business managers have much less control over off-site
training since much of the knowledge gained is tacit and transient...
it leaves when your staff do.
So how can this learning and staff development technology improve a
business’s bottom-line? From the first instance you can stop with
expensive training days out of the office, where not only the actual
cost is very high, but also there is the opportunity cost of not
having your staff available for that time. Increased staff retention
means reduced recruitment costs, motivated staff means increased
productivity and knowledge retained means increased business
efficiency and effectiveness over the long-term.
Competency-based or vocational training (which normally includes NVQs,
Key Skills and technical certificates) suffers from specific
challenges as much of the work is practical, requiring involvement
from many people including a third party training provider. The
learner, tutor/assessor, workplace manager, internal verifier,
external verifier and training provider co-ordinator all require
access to the learner’s portfolio of work. Portfolios can end up being
the size of two lever arch files! Logistically this is very difficult
to manage, as the portfolio has to go backwards and forwards between
the learner and the training centre, requiring many visits from an
assessor. The learning processes are not fluid, the portfolio
difficult to manage for the learner and the net result is usually a
long and drawn out process that is de-motivating for all involved.
E-assessment systems, such as Ecordia, allow the portfolio to be
accessible online and available to everyone at anytime.
E-learning and e-assessment has revolutionised the learning process
and dramatically increases the chances of achievement. All those
involved with the training, including the learner and assessor, find
themselves much more engaged in the process; there is a sense of
immediacy and teamwork when personal development is effected online to
achieve qualifications. For small businesses this has had a
significant impact on staff retention, motivation and achievement.
Small Business managers should look to harness this technology to
reduce training costs and help their staff reach their full potential.
There are many options and packages available to small businesses and
a good starting point is to discuss E-assessment with your third party
training provider if you have one, or to contact organisations such as
The Open University and LearnDirect. Other highly reputable training
Studyflex, which delivers Chartered Management Institute
qualifications, including Management and Team Leading.
Entrust delivers competency-based training in the areas of
Management, Health & Safety and Learning & Development.
Smokefree England – One month on
97 per cent of premises inspected in the two
weeks after 1 July were smokefree as required by the new law, data
published by the Department of Health reveals.
Minister of State for Public Health, Dawn Primarolo, said:
"When we introduced the smokefree law last month, we predicted that it
would be largely self-enforcing based on experience elsewhere and the
fact that three-quarters of the public supported the move.
"These figures confirm that, just as happened previously in Ireland
then Scotland, England saw very high levels of compliance in the first
few days. All the signs are that businesses and the public have taken
the new law in their stride.
"These high levels of real protection from secondhand smoke in public
places and workplaces are a testament to everyone involved. Efforts
from enforcement officers in local authorities and businesses,
especially those in the hospitality sector and also the public have
all contributed to making this country a healthier place in which to
work and socialise".
Removing secondhand smoke from enclosed public and work environments
is an enormous step for public health. Thousands of lives will be
saved. Others will be spared the misery of watching family and friends
die prematurely from secondhand smoke-related illnesses.
So far, data has been collected from 88,899 inspections, which
includes 1,090 hotels, 6,783 restaurants and 9,568 licensed premises.
Enforcement officers found that 97 per cent of premises were
respecting the requirement to prohibit smoking in enclosed premises
and 79 per cent were displaying the correct no-smoking signage.
Compliance was even higher in smokefree vehicles, with figures of 98
per cent and 84 per cent respectively.
Although these figures only relate to the first two weeks, compliance
is already comparable to the high levels experienced during the first
month of smokefree in Scotland and Ireland. A similar pattern has also
emerged with regards to signage requirements, with 'other' premises
less likely to be compliant than licensed premises, accommodation and
Local authorities are continuing to work with businesses to ensure
they understand the requirement for no-smoking signs to be displayed
at the entrance to all public places and workplaces covered by the
During the first two weeks of inspections, it has only been necessary
to issue one fixed penalty notice to an individual wilfully flouting
the law by smoking in a smokefree place. Councils have instead ensured
that businesses and individuals are given sufficient opportunity to
comply with the law and have so far issued 142 written warnings
following failure to prevent smoking (equivalent to 0.2% of premises
inspected). There were no court hearings.
Graham Jukes, Chief Executive of the Chartered Institute of
Environmental Health said: "The acceptance of the new law reveals the
good planning and investment put in place by the Department of Health,
local authorities and business leaders in the run up to 1st July. The
Chartered Institute of Environmental Health is proud to have played a
key role in the implementation of what has turned out to be popular
legislation with a limited need for enforcement action to be taken."
Councillor Geoffrey Theobald, Chairman of the Local Authorities
Coordinators of Regulatory Services, said: "The high level of
compliance is testament not only to the businesses, landlords and
members of the public who have wholeheartedly embraced the new law -
but also to the council environmental health officers who have carried
out their work with a light touch, an even-hand, and a commitment to
advising people rather than punishing them."
Over the first month there has also been a steady downward trend in
calls to the Smokefree England compliance line. In total, 2,342 calls
were received during the first four weeks and 606 of these were passed
on to local authorities to follow up. Calls peaked during the first
week at 1,024, although only 232 of these were leads with sufficient
information to pass to local councils. However only 378 calls were
received during the week of 22nd July, with 110 leads passed to
Aiming to take the wind farm sector by storm
There's money in new-look turbines, believes
Viktor Jonanovic. First, he needs to raise £5m, as Philip Smith
Viktor Jonanovic claims to have designed a revolutionary new wind
turbine that is more effective, far quieter, more aesthetically
pleasing and kinder to wildlife than the present crop of
He says he has interest from around the world for the eco-friendly way
to generate electricity. But before Mr Jonanovic can capitalise on his
creation – and win plaudits in the process from the environmental
lobby – he needs to clear a few hurdles.
He needs to build a management team to drive the potentially
multi-million pound venture. He needs to establish a production
consortium to manufacture the various components prior to being
assembled for shipping to the five continents.
And he has to build a pre-production full-size prototype to test the
stresses, materials and structure. For that he faces the biggest
challenge of all: he needs a £5m investment in return for an equity
stake in the five-year-old firm.
It should be an attractive proposition, says the Serbian-born
inventor. “There is a huge potential return for the investment as the
size of the market is enormous.” Mr Jonanovic says his Stormblade
Turbine company has the potential to achieve a market valuation into
the hundreds of millions in the coming five years – by which time he
expects to see a trade sale or flotation. Despite the income currently
standing at zero, it is because of the huge potential that the equity
slice on offer will not be that big.
“This will be a second round of investment,” said Mr Jonanovic, 47, a
former computer engineer and sole owner of the London-based business.
“I put up the seed corn funds of £150,000 and I expect we will need a
third injection of funds when it comes to the production phase.”
Supported by income from a part-time teaching job Mr Jonanovic spent
five years developing his now patented model that uses a system
similar to the jet engine – the wind power is accelerated inside the
turbine’s cowling onto the blades, which are smaller and hidden from
view. In fact the Stormblade Turbine looks just like a jet engine.
His figures are impressive. “Traditional wind turbines can convert
20pc to 30pc of wind energy into electricity,” he says. “Our
experiments show Stormblade can convert 70pc.” That statistic alone
should be enough to secure funding in a sector where demand for wind
turbines is outstripping supply. But add to that a range of features
that he says diffuses the many objections to wind farms and Stormblade
could take the wind generation sector by storm.
“It is much quieter, so quiet that you won’t be able to hear it above
the sound of the wind,” he said. “And it’s smaller with no huge blades
rotating so that it’s not as visually imposing and it is safer to
The turbines can operate at both higher and lower wind speeds,
allowing them to generate for longer. Most turbines have to be shut
down if wind speeds exceed 60mph, he said. The planned prototype will
be capable of generating one megawatt (1,000kw) of power – enough
electricity for 800 homes. But the final production will include both
larger and smaller versions – one small enough to generate electricity
for a single house. Stormblade claims to have many orders almost in
the bag. “We have interest from north and south America, Europe,
China, Indonesia and India,” said Mr Jonanovic. It is the Chinese
interest that fuels his optimism the most.
“There is a demand there for hundreds of thousands of turbines,” he
said. “The Chinese government has expressed interest in a joint
venture where it would fund the bulk of the set up costs to allow us
to produce Stormblade in four or five factories, just to supply the
Once it is in production, the Stormblade business plan includes
revenues from licensing the design to existing turbine producers (and
so helping to protect the company’s intellectual property rights) and
forming joint ventures or strategic partnerships to market and deliver
on the scale the market demands.
“We could sell hundreds of thousands of turbines,” he said. They will
retail at £800,000, installed, for an onshore model and £1.3m for
offshore – per megawatt. He estimates return on investment at five
years. Margins will be around the 20pc to 25pc mark.
But first he must find the development funds. Government grants are
available as climate change and CO2 emissions are top of the political
agenda in most of the developed world. But that, he said, is matched
funding and it takes too long to secure the money. “We don’t want to
get into a situation where the development is delayed. That’s why we
are seeking to raise private capital in return for a share of the
equity.” The Chinese, he said, would put up the £5m. “But to protect
the IP we are looking to develop the prototype in Europe.”
Instead he’s seeking a business angel or high net worth investor
looking for the long term. “I need to find the right person, one who
wants to invest in the project and who will be supportive,” he added.
“The value of the equity will increase with time so I don’t think this
would suit a venture capitalist as they seem to want a defined exit
Football fails to net
profits for Sheffield Utd
The beautiful game is the club’s
reason to exist but it won't pay the bills for the Premiership
newcomer, reports Philip Smith.
Last year Jason Rockett saw a £7.7m loss on his business’s
£27.2m turnover. The problem is simple to identify: one of its
three main revenue channels has a cost base that far outweighs
To most chief executives the answer should also be simple:
restructure or shut the loss-making division. But for Mr Rockett
that’s not an option. At Sheffield United the loss-making part
of the business is its reason to exist - the football.
But he has a solution. “Our big challenge,” says Rockett, 37, a
professional footballer until injury ended his career, “is to
ensure the business does not rely on football to make a profit.
We’ll do that by developing off-field activities.”
Thanks to a joint venture with development company Scarborough,
the business owned by Sheffield United’s chairman and majority
shareholder Kevin McCabe, a £50m low-risk commercial property
portfolio has been set up to stabilise Sheffield United plc.
That venture – United Scarborough Estates - along with the
club’s growing leisure interests mainly in Sheffield and more
recently China, means the Aim-listed business can expect
long-term security, even if the football team fails to perform.
Promotion to the Premiership last season saw gate receipts rise
from 23,000 to 30,000 and next season it could also benefit from
a TV deal. “It’s fantastic,” says Rockett. “It’s at least £30m
to each club… if we are here.”
The problem is that that’s far from certain as the club lurks at
the bottom of the table. “Some people say that, with the new TV
deal, the club finishing bottom will get more money than Chelsea
did last year for finishing top.”
Add that cash bonanza to gate receipts and merchandising and
most businesses would be looking at a healthy profit. But along
with all top-level clubs, its players’ stratospheric wages mean
football alone is not enough to get this business back in the
Paying the going rate is a must if Sheffield United is to
attract Premiership talent. But as a new boy, its spending power
is limited. “We have to compete with the likes of Manchester
United, Liverpool and Chelsea,” says Rockett. “We have to close
the gap on teams that have been in the Premiership for years.
While the club’s 21,000 season-ticket holders may dream of glory
and riches, Rockett is well aware that the business must look
outside of football for its financial success. It’s a lesson he
learnt as a player, then while working to gain a degree in urban
land management before joining Scarborough Group as a surveyor
once his footballing days ended.
“When we devised our business plan we looked at diversification
because you can’t rely on the football results,” he says.
Half of the club’s income last year was down to its property
portfolio. “It made a £2.5m profit and that is like having
another 10,000 supporters each week,” he says. In the short
term, that off-field income may be less important if Sheffield
United reaps the rewards of a long stay in football’s top flight
but as chief executive, Rockett has to have one eye on the long
game. One plan to boost income is to work with another of the
Scarborough companies to set up a second, higher-risk joint
venture investing in property developments.
In addition to its commercial portfolio, the club has a track
record of managing property. It owns its Bramall Lane ground
where it hires out its conferencing facilities and has a
business centre as well as the usual mix of shops, restaurants
and bars. It is looking to build a four-star hotel next to the
ground and to extend the stadium’s capacity.
It also owns a 22-acre site used for the club academy, owns a
leisure and fitness site in London and has permission to develop
a recreation area in Sheffield.
It has aims to win a following in China which, due to the
Beijing Olympics next year, is seeing a boon in sports
investment. “We bought a club in its second division, in
Chengdu, a city with an 11m population,” says Rockett. It has
also bought a bar in the country and is looking to develop
“It’s a way to drive more income from China. Everything for us
is long term with the aim of developing income from property and
leisure to feed into the football club to strengthen our squad,”
The real challenge for Rockett is to avoid being lured by the
short-term gains of top-flight football and concentrate on the
far less glamorous but more profitable property and leisure.
It’s not all going entirely to plan. Sheffield was one of the
bidders to be the site for the UK’s first super-casino and the
club linked up with a Las Vegas operator with a view to managing
that venture. But with a business plan based on precaution and
stability, that may simply have been too much of a gamble.
Is there a ticket to
Narnia in the wardrobe?
A Birmingham theatre needs bigger
audiences but has only £1,000 to spend on each show's marketing,
writes Philip Smith.
They are in something of a quandary at The Crescent. The
83–year-old Birmingham-based theatre company has to sell more
seats for its 20-plus performances a year. But to do that it
needs to increase its marketing budget substantially. Yet there
is no more money available until ticket sales are boosted.
“We are only playing to a half-full theatre,” says Andrew Lowrie,
chairman of The Crescent Theatre Company. “We need to get the
In 2005 one production of nine shows sold less than 16pc of the
It shouldn’t be a problem. The theatre lies in the heart of
Birmingham’s cultural hub just off the huge Brindleyplace
development. Half of its target audience lives within five miles
of the theatre, where it is easy to park. Tickets cost between
£8 and £11.50 for a wide range of shows that include Agatha
Christie, Roald Dahl and Keith Waterhouse as well as
Shakespeare, of course.
It’s not as if the facilities aren’t up to scratch. The
company’s purpose-built venue has two auditoria – of 350 and 100
seats – rehearsal rooms, a box office and a bar. It also has its
own workshops to make scenery and props and a fully-stocked
The sticking point for The Crescent is simply its status.
Despite past players of the likes of Martin Shaw (TV’s Judge
John Deed) and BBC presenter Adrian Childs (and Charles Dance is
mooted to have once been part of the company), it is an amateur
“There are no positive associations with the word amateur,” says
James Allan, the company’s marketing manager and an ad man by
day. “It conjures up images of church halls, wobbling scenery
and actors forgetting lines.”
Apart from a £500,000 lottery grant nine years ago there are no
Arts Council or City Council funds available. Last year The
Crescent saw revenues of £295,000, mainly from ticket sales and
associated revenue streams.
“For each £1 we take on the door we make 75p at the bar,” says
Allan. Other revenue streams include hiring out the wardrobe to
other theatre companies, hiring the entire facilities -
including technical teams - to touring companies, drama schools
and for corporate days, as well as promoting other shows. Later
this year, for example, Julian Clary will be treading the boards
in a show produced by The Crescent.
It also charges each of its 200 or so members £50 a year. These
are the actors, lighting and sound technicians, costume
designers, musicians, stage managers and directors – every
function involved in staging a play.
They also all take their turn front of house pulling pints and
selling programmes. “It’s a great place to learn a new skill.
Not everyone wants to act,” says Allan.
The company pays £1,000 a month rent to its sister trust, which
owns the theatre, but employment costs are the single biggest
expenditure. There are 10 permanent staff ranging from a
full-time operations director to part-time box office
attendants. What little profit there is – in 2005 it was less
than £5,000 - goes into reserves.
“We never have any operating capital on which to draw,” Allan
Growth is not an option: with revenues static and costs rising
that thin surplus will soon disappear. “We can’t put up the £50
membership,” says Allan. “There’d be an outcry.”
With capacity for 400 members and a fairly high churn rate,
raising the price would only be a short-term way to bring in
some cash. “We have to keep the rate accessible,” says Lowrie,
who is an operations director for a nut and bolt firm during the
The lack of funds adds up to a publicity problem. “We have about
£1,000 per show for marketing,” says Allan. “With that, we have
to reach 2m people.” The Crescent does have 10,000 on its
customer database of which half have visited the theatre within
the past three years and 3,000 within the past year.
That’s important, as the company is considering seeking
commercial sponsorship to boost the coffers - access to
customers will be the carrot for getting corporates to cough up
“It’s an opportunity for a sponsor to reach our well-educated,
affluent, middle-class audience,” says Allan. “They have
disposable income and for anyone selling premium goods, it’s an
attractive group.” The lack of a significant marketing budget
means The Crescent isn’t even mailing its customers on a regular
basis. “If I could segment the data and have someone working
full-time on a CRM (customer relationship management) programme
we might be in with a chance,” Allan says.
The Crescent knows that for all its subsidiary revenue streams
and hopes of sponsorship, it’s the seat sales that drive the
business. Even with competition from the Hippodrome and the
Birmingham Rep on the doorstep, The Crescent is optimistic its
small and intimate venues will appeal to enough theatre-goers -
once they now about it.
As Lowrie says: “The question is, how can we sell more tickets?
We are tarnished with the amateur brush.” The 10-strong
governing board hopes promoting shows will help. “Having people
such as Julian Clary here will give us a different profile,” he
The formal approach can take you far
The founder of an operation selling dinner
jackets, dress shirts and tail coats on the internet tells Paul Bray
of his plans for expansion.
Ed Jones discovered the proverbial gap in the market when he had to
drive 52 miles to hire a dinner jacket. “I was living in Norfolk and I
thought this is ridiculous,” he says. “So I decided to set up a
business selling gents’ formal wear on the internet.”
The plan neatly combined Mr Jones’ past experience. As an industrial
design undergraduate at Loughborough University, he noticed that
although there were many black tie parties, few students owned the
right togs, so he bought dinner suits and dress shirts in charity
shops and sold them to his mates.
Graduating during the dotcom boom, Mr Jones joined a venture
capital-funded firm selling magazine subscriptions online. “It went
bust after five years, but I’d learned how to bring customers to a
website and convert them into sales,” he says.
This was 2003 and venture capitalists had found other ways to make
money, so Mr Jones had to make do with a £6,000 bank loan (now
repaid). “The loan bought us 100 dinner suits and shirts, and I
designed the website myself. As soon as we sold some stock we used the
cash to buy more.”
That, in essence, is still the business model. Mr Jones draws a small
salary and pays his two full-time staff, a manager and packer at his
warehouse in Thetford, Norfolk. The remaining profits he ploughs back
into the business, Clermont Direct (www.clermontdirect.com)
which he owns outright.
The firm has averaged 80pc annual growth, and this year will sell more
than 4,000 dinner suits; its most popular line. Estimated turnover
this year is £400,000 and Mr Jones hopes to be seeing revenues of £1m
Clermont Direct’s original four product lines have grown to more than
100, including exotic items such as morning coats (popular for
weddings and Royal Ascot), £300 toastmasters’ coats and Masonic wear,
which sells surprisingly well. Barristers’ collarless shirts are Mr
Jones’s latest addition, and he hopes highland tartans will be next.
“These niche products do attract customers,” says Mr Jones. “If you
type ‘white tie tailcoats’ into Google, we come up top.”
Attracting new customers is necessary, as repeat business accounts for
less than 20pc of Clermont Direct’s clientele; formal wear isn’t
something men buy very often. Conventional advertising does not work,
Mr Jones has found, so he concentrates on boosting his search engine
rankings and recruiting affiliates: websites that direct customers to
Clermont Direct in return for a commission.
By using an agency, Affiliate Future, Mr Jones has already signed up
more than 600 affiliates, accounting for a sixth of his sales. He
would like to recruit more, establishing links with dining clubs,
cruise lines, May ball organisers, perhaps even the Masons - anyone
whose customers or members wear formal dress.
Although he does everything himself, from answering customers’ emails
to checking deliveries at the warehouse, Mr Jones still has time to
develop his affiliate programme during slack periods. Indeed, these
slack periods are Clermont Direct’s biggest challenge.
Most DJs are bought for Christmas parties, so the firm makes at least
a third of its sales between October and mid-December. A fortnight
from now everything will slow down until Easter, when weddings and
cruises will cause a brief surge before the much quieter months of
June, July and August ("summer lines" are much less feasible in gents'
Although Mr Jones is proud to source suits and coats in the UK, the
only economical sources of cheaper items such as shirts, ties and
cummerbunds are abroad, often in China. “To be competitive we have to
order 3,000 at a time, which is a big cheque to write,” Mr Jones says.
“And the Chinese often work on four months’ lead time and demand cash
up-front. It’s a real juggling act for us. Our financial year ends in
April, so there’s a tax bill to pay in the summer, too.”
Buying abroad through UK agents obviates paying in advance, but at the
expense of the agent’s commission, and even UK suppliers require
prompt payment. “It’s a perennial problem for a small firm,” says Mr
Jones. “Our large competitors can pay 90 days after receipt, but we’re
lucky to get 30.”
This is one reason why Mr Jones wants to grow the company, although
not at the expense of the customer service he believes is a vital
ingredient of its success.
“We could ultimately be employing 100 people,” he says. “Then we could
be really competitive and go to the Far East and buy 3,000-plus dinner
A combination of postage costs and differing dress codes puts the
damper on exports, which account for less than 2pc of Clermont
Direct’s sales. But Mr Jones believes the UK offers plenty of growing
room, and plans to diversify into the hire market, which needs much
the same infrastructure and should increase repeat business.
He was about to open a shop in south London, but pulled out just in
time when he calculated that the break-even point was too high.
“We might still do it, though,” he adds. “It gives you gravitas with
new customers. You can say ‘come and visit our shop’, even though
they’re in Scotland and they never will.”
The one thing Mr Jones knows he cannot afford to do is stand still.
The barriers to entry for an e-business are low, and with big brand
competitors such as Marks & Spencer and Moss Bros continually beefing
up their online presence, Clermont Direct will have to evolve to
New love comes as a matter of course
Dinner Dates brings people together over a
sumptuous meal. But is further growth on the menu? Asks Andrew Cave.
It’s a popular mantra that success breeds success but for the dinner
club company that Hillie Marshall set up back in 1989, each little
victory brings with it a problem. “One of the huge issues we have is
that we permanently have to recruit new members because they’re
constantly going off with each other,” she says. “Our success has a
It’s a dilemma common to all dating agencies but Dinner Dates, which
claims to be the UK’s longest-established social events company for
single professional people who are time-poor and cash-rich, has always
seen itself as a different animal.
“I set the company up when I was an actress, singer and theatre
producer and my first marriage had just broken up,” says managing
director Marshall. “I started looking at dating agencies. But the
thought of meeting someone in a traditional dating situation terrified
the life out of me. A friend suggested I could organise dinner parties
and so I saw a gap in the market and started Dinner Dates.”
Marshall’s solution is to make advance dinner bookings and organise
hosted dinner parties in smart London nightspots such as Mossimans,
Floridita and Chinawhite. She books four tables of eight people each,
swaps diners around after the first course, then leaves members to
make friends and stay on for dancing and drinking. After events, she
telephones every diner and provides a discreet service of putting them
in touch with people they would like to see again – on condition that
the other party agrees.
The idea took off and Dinner Dates expanded to organise sporting and
cultural events as well as holidays. It now has a database of 16,000
members and a turnover of £560,000 but Marshall feels the business has
much greater potential. To achieve that, she feels it must overcome a
number of problems and also attract the investment needed to take it
to the next stage of its development.
The attrition rates will always be an issue. Members pay a one-off
joining fee of £199.95 and then an annual “update fee” of £15 by
direct debit but the bulk of revenues depend on repeat custom at
between £65 and £83 for a dinner or up to £93 for a dinner ball. “When
people join, they go to quite a few events,” says Marshall, “but then
they will probably meet someone. If that falls through, they will
start coming back again. Another problem is that a lot of ladies have
grown up with Dinner Dates and are now in their early 50s and it is
very difficult finding older men.”
Her solution is to broaden the range of customers catered for. She is
piloting Dinner with Friends, a sister business that will allow
couples to meet within the hosted dining club concept. The idea is
that when people hook up at Dinner Dates, they can move on to Dinner
with Friends and then move back into Dinner Dates if the relationship
Marshall also wants to bring in a younger clientele. At the moment,
members are mostly over 32 but she would like more members in their
Hence Dinner Dates has been advertising in magazines with younger
readers and targeting its public relations campaigns. However, it
faces stiff competition for younger members from the new generation of
internet and speed-dating networks.
Marshall attributes a lot of Dinner Dates’ success to its technology
platform for its database and wonders whether this could be better
utilised with fresh investment. “We can tell who has met who over the
past 18 years,” she says, “and we can find all the golfers and tennis
players at the press of a key, just as we can find all those who like
opera. The database can tell which members like to go out the most. We
get amazing amounts of information.” But she would never dream of
The biggest catalyst for change, however, may be Marshall’s own desire
to move on with her life. “I’m looking for someone who may be able to
take over Dinner Dates,” she says. “It’s been a great success but I am
in my late 50s and I now delegate a lot to my three staff, who are
“I am looking for someone who could completely take control. My
husband has retired now. We have a house in France and I am spending
more time there. I have also written three books on relationships and
am an agony aunt in local newspapers and magazines.
“I have never put any funds into Dinner Dates. I never had a bank loan
or an overdraft. It has all been cashflow-financing.”
Helping publishers to turn over a new leaf
A new reader-friendly online book store is
providing a fresh marketing opportunity for publishers, writes Philip
Peter Crawshaw and Louise Weir’s online book business is blossoming.
But they know that to maximise its potential they need to find some
“Realistically we need between £500,000 and £1m,” says Crawshaw. The
money would be used to boost awareness of the online retailer among
both publishers and consumers. And with an estimated 11m serious book
lovers in the UK, there is room for growth. So far just 150,000 who
have signed up as members of
“We reckon there are 1.5m people out there who would like to use our
service,” says Weir. “If we had some serious investment, we could
reach 500,000 by the end of 2008.”
The pair, and fellow founder Hugh Salmon, are looking to attract
venture capitalists, high net worth individual investors and even
Enterprise Investment Scheme funds, which are often linked to
high-risk projects. With a projected turnover this year of just
£400,000, this is high-risk. To increase the attractiveness of the
project to would be-investors, they are prepared to offer a sizeable
slice of equity in the two-year-old firm.
If the business goes to plan, it could be a shrewd move for any
investor. Lovereading addresses a gap in the market that has existed
since the abolition of the net book agreement in 1995 – which had
allowed publishes to set a minimum price - but which it has only
recently been possible to plug, thanks to broadband.
“When the net book agreement collapsed, the whole retail landscape
changed,” explains Crawshaw.
It signalled the start of publishers’ concentrated campaigns to market
only the most saleable authors, he says.
“With the agreement gone, retailers began to see that some books sold
better than others. It has got to the point now where only a couple of
hundred books are getting promoted each year. It doesn’t matter which
store you are in, it’s the same titles being pushed. Reader choice has
Weir explains: “Publishers can’t afford to spend big budgets on all
the books they have that month. They have their super leads and these
get the money spent on them.”
Crawshaw claims it has resulted in a decline in the range of books on
offer and a drop in the all-important independent advice about which
books to buy.
“Buying a book used to be a far more involving experience than it is
today,” he says. Offering a wider range, backed up with reviews and
recommendations, is the backbone of the Lovereading website.
On the face of it, therefore, the Lovereading site is aimed at the
book-buying public. It even allows the first few chapters to be
downloaded as pdfs so a customer can try before they buy.
“We know that if you like the first chapter then you’ll like the whole
book,” says Crawshaw. “Before broadband, downloading a 250kb extract
would have been very slow. We can now offer online the kind of
experience you used to get in independent bookshops.”
Lovereading claims 70pc of its users regularly download extracts. But,
in reality, Lovereading is aimed at the publishers and with only 35pc
of its income generated from book sales, it is that larger revenue
stream - as a marketing channel for book publishers - that offers the
greatest potential for growth. With profits still to show, growth is
critical. “We could continue to grow organically but that won’t get us
to our target in the same time period,” says Crawshaw.
“What we are doing is very new to publishers. We are primarily a
promotional tool, a direct marketing arm for them. We allow publishers
to talk directly to readers about a whole range of titles,” adds
Crawshaw, a former direct marketeer with Book Club Associates.
Most of the major publishers have now linked with Lovereading. In
return for data on what’s hot, publishers pay to promote a far wider
range of titles – both fiction and narrative non-fiction, such as
biographies – on the site. “It enables publishers to push
up-and-coming authors,” says Crawshaw.
The attractiveness of the site to publishers, though, depends largely
on the number of readers who register. “We need to raise awareness and
we need help on which are the best marketing channels to use,”
explains Crawshaw. “There is a lot to be done before we turn this
great idea into a proper business. It’s a risk, we know that. But we
have a unique model that people love and which increasingly publishers
are using.” All they need now is an investor.
Proud parents conceive a
Their videostreaming business got in
first but must capitalise on its impressive lead as market-entry
costs drop, reports Paul Bray.
It is amazing what you can do in business when you combine
personal necessity with a little inside knowledge. In 2003, Cary
Marsh and Iain Millar wanted to share videos of their new baby
with Mr Millar’s parents in Holland. Videos are too big to
email, so the couple thought of streaming: putting video footage
on the web where people can watch it via broadband.
Video streaming services were expensive and aimed at businesses,
but Ms Marsh worked for a streaming company and was able to
borrow a small amount of web space for nothing. Result: two
happy grandparents and one flash of inspiration.
“I thought: I can’t be the only person wanting to do this and I
know it costs buttons. It ought to be possible to build a
business buying bandwidth in bulk and selling it in small
parcels,” says Ms Marsh.
The result was
Mydeo, a low-cost video hosting service for consumers,
communities and small businesses. Customers upload their videos
to Mydeo’s website and include links to them in emails and on
their own websites. When someone clicks the link, Mydeo shows
the video. Unlike free rivals such as YouTube, says Ms Marsh,
Mydeo doesn’t limit the size of videos or show them on its own
Monthly subscriptions start at £4.87 for 100 minutes of video.
That’s much less than conventional streaming services, because
bandwidth costs have plummeted and, as most videos are only
viewed by a few people, bandwidth requirements are small.
In 2004 Ms Marsh set up Mydeo at the Kingston Innovation Centre
in south-west London, which helped her raise funding including a
£56,000 Department of Trade and Industry technical innovation
award. The service was launched quietly in March 2005. Four
months later the firm got its biggest break: a deal with
Microsoft that established Mydeo as the default web-streaming
company for Windows Movie Maker across Europe. Every time a
Windows user thinks of putting their movie online, up pops
Mydeo’s name. This accounts for more than half of Mydeo’s
business but costs the company nothing as it plugs a gap in
Microsoft’s own offering.
Vista, this year’s new version of Windows, will work differently
but Ms Marsh hopes to get similar preferred status for Mydeo and
says Vista should boost video streaming.
The rest of Mydeo’s customers come via partnerships with other
internet and digital video companies, including Orange broadband
and Muvee, or by word of mouth. “Our service is inherently
‘viral’ because you have to show it to people,” says Ms Marsh.
Running costs are low but development costs are high, so by 2005
Ms Marsh needed serious funding. She nearly accepted £600,000
from a syndicate of business angels but is now glad the deal
fell through. “They didn’t know anything about the internet. If
I’d signed, I’d have had a business angel as chairman who had no
consumer internet experience, which would have been very silly.”
Instead, Mydeo took a small firms loan guarantee of £150,000
from HSBC, plus £50,000 from a business angel as a sleeping
partner and Ms Marsh and Mr Millar still own two thirds of the
company. Turnover this year is forecast to be near the £1m mark.
This spring the firm expects to raise venture capital (VC)
funding. Although Mydeo’s service is largely unique, competitors
are starting to appear and the barriers to entry keep dropping
as web development costs fall. So the company must build on its
lead quickly. Mydeo also needs a broader management team. “We’re
bootstrapping constantly,” says Ms Marsh. “We’ve outgrown the
virtual management team from Kingston and now we need to employ
global players in marketing, sales, finance and intellectual
property. I’m also looking for VCs with a complementary
portfolio of companies they can introduce us to.”
A misjudgement was not offering free trials. “Everyone expects
them online,” says Ms Marsh. “We’d been partnered with Microsoft
for six months, then we had to spend three months restructuring
for free trials.”
Fortunately the revamps paid off, and during 2006 customer
numbers soared from 2,000 to 100,000 where 60pc are in the US,
followed by the UK, Canada, Australia and more than 160
countries in all.
Consumers form the largest group, but lucrative small business
subscriptions are growing fast. “Now we have to keep innovating
to stay ahead,” says Ms Marsh.
Online technology revs up revenue for fledgling courier company
American Jay Bregman, chief technical
officer at London-based eCourier, was studying entrepreneurship at the
London School of Economics when he started working on an idea.
He did a thesis on electronic document exchange and, for a case study,
looked into motorcycle courier companies in London. He interviewd a
range of businesses about how they operated, expecting to find all the
major firms using state-of-the-art IT systems. The reality was very
“A lot of courier companies had been in the industry for 20 years and
didn’t see why they should change,” Bregman says. “They think what
we’re doing is a fad and that it will pass. And anyway, to offer what
we do they would need to spend a lot of money, and most simply don’t
The strength of Bregman’s company lies in its technology. Two years in
the making, the system could transform the industry. With it, 90pc of
bookings are made online. Customers input the collection and delivery
addresses, then choose the vehicle type. The system works out who the
optimum courier is for the delivery, taking into account information
it has learned from previous jobs as well as traffic and weather
That courier is instructed electronically. It's all done via GPS,
which also tracks riders’ positions every 10 seconds, enabling
customers to do the same. Through eCourier’s technology, the cyclists
and motorcyclists can do up to 50pc more jobs per day.
Bregman’s studies enabled him to do a lot of the business planning and
research before taking the plunge. “By the time of the investment
round,” he says, “we had plans, had developed as far as possible the
technological outline of what we wanted to do, found suppliers and had
contracts in place and ready to go. So in the morning I was going
around asking for £500,000 of funding, in the afternoon I was going to
lectures.” It paid off. After initially raising £100,000, the summer
of 2004 saw another £700,000 raised and the business was ready to go.
To overcome the logistical problems of tracking riders with GPS,
Bregman turned to academic institutions. “I found there were 10
universities around the world, such as Stanford and MIT, who had
departments looking into aspects of this and so I approached them with
my problem,” he says. By March, the business forecasts it will be
doing 40,000 deliveries a month with around 135 couriers. Turnover is
already more than £4m in an industry worth £300m-£400m.
“For me, the role models were eBay, Amazon, Yahoo and later Google,”
Bregman says. “These entrepreneurial businesses proved that, in a
small way, you can change the world. I think with all of them, and us,
the approach is on customer service. I think it’s ingrained in
Americans that the customer is always right. It’s a great asset for us
Can Kate's Cakes make dough in Europe?
MD Steve Greenhalgh wants to expand on the
Continent, but needs a good example to follow, reports Andrew Stone.
Achieving sales growth comes as naturally as making a sponge mix rise
for Sussex-based baker Kate’s Cakes. Ever since Kate Cherkoff founded
the business in the kitchen of her one-bedroom Clapham flat in 1989,
the company’s freshly-baked products have been in strong demand.
The business grew rapidly on the back of the demand generated by the
UK coffee shop boom of the early 1990s and since 2000 has continued to
expand into additional production space at its facilities close to the
By December 2001, further growth prompted a Management Buy Out, led by
Steve Greenhalgh. Sales to the end of the last financial year reached
£27m and the company now employs 490 staff full time and 25 part-time.
Current growth is 25pc year on year and looks to be in no danger of
Kate’s Cakes is now on the cusp of a great growth opportunity thanks
to the emergence of a convenience food culture in mainland Europe,
which shows every indication of matching that already experienced in
To take full advantage of the expected opportunity, however, it must
be ready with enough production capacity to meet demand. In itself
this should not be a problem, says managing director Greenhalgh. The
business has coped well so far expanding into a cluster of three
production sites in rural Ashington.
There should be enough capacity in its existing facilities to cope
with another two or three year’s worth of growth. The business has
some slack with a production capacity to supply about €70m in sales
and output is currently at about €42m.
Yet when the company began selling in earnest onto the continent last
year, sales growth from overseas surprised even the bullish Greenhalgh
with its rapidity. “The more presence we have there the more it seems
to snowball. We see growth compounding annually there at about 10pc
for the next five years.”
“In the next five years we’re going to see a big explosion of food
service business in Europe. It’s a big opportunity; consumers all
around Europe are starting to demand these products and the people
that are there earliest will be best placed to profit.”
How best to serve this growth is the question. Greenhalgh must decide
where to locate the next bakery. “We will need to have another
facility in place in three years, maybe less if growth is more rapid.
It means we have to decide a location in the next year to 18 months,
As the company will eventually outgrow its Sussex base, the easy
option would be to open elsewhere in the UK, where the management team
can repeat its prior expansion successes. However, since the business
must expand beyond its existing base anyway, a location on the
mainland has numerous things to recommend it.
Kate’s Cakes will be closer to its new markets, it will be well placed
to develop new products better suited to specific countries and there
will be less risk of logistical snarl ups than there would be if
customers were supplied from the UK.
Another important reason seriously to consider such a move is that its
customers clearly seem to favour the idea of a continental production
base, says Greenhalgh. “The perception seems to be that we should be
in Europe. I think our customers expect it to happen.”
The problem is that neither Greenhalgh nor his team have ever done
anything like this. It would be a move fraught with challenges,
perhaps the principal one being how to guarantee it can replicate in
another the country the quality of products made with care and skill
in small batches, with no preservatives or stabilisers.
“Can we replicate the quality? We’re not an automated mass-production
business. We will need to find, educate and train switched-on people.
We will also need to get to know different food safety and food
standards legislation and we don’t know what the working culture will
be like. It would be a big learning curve.”
Greenhalgh must also ponder a separate but related dilemma at the same
time. Kate’s Cakes recently diversified with great success beyond its
baked products core business into chilled desserts.
It has mastered the production of this very different product line and
the desserts are popular and profitable. Yet they only represent about
10pc of sales and so effectively take up a disproportionate amount of
effort and management attention.
Since baking will remain the company’s core business, Greenhalgh is
asking himself, despite successful diversification, whether the
company is better sticking to its knitting to ensure it can stay
focused on the main opportunity of expansion.
“Our chilled foods are a great complementary range and offer
attractive incremental growth to us and our customers, but we question
whether this is a distraction from the main baking business. It’s a
completely different kind of food manufacturing and very high risk
using cream and high chill areas.”
Part of the frustration Greenhalgh feels as he ponders these dilemmas
is the lack of useful precedents to help guide his decision making
process, especially as far as European expansion is concerned.
It’s not just the €3m cost of a new facility that’s at stake. Making
mistakes could hold back growth, scare off large customers and
threaten profitability. “We’re spending a lot of time in Europe
getting to know the market there and visiting our customers to see how
they do things.
“We wonder how other people have overcome the challenges of opening a
facility in Europe. We’d love to know how it was for them. Was it a
nightmare? We can’t seem to find anyone who has gone through a similar
process. If we don’t get it right there’s a real danger it could
become a serious distraction from running and growing the business.”
Star of the kitchen struggles not to sink
Designing kitchens is a passion for Johnny
Grey, but designing a business structure is hard, he tells David
In professional terms, kitchen designer Johnny Grey is a star. But
business success remains elusive. Despite wealthy private clients
paying his company around £10,000 for each kitchen design, he still
has to work more than 50 hours a week to make that much net profit
For while his kitchen designs, book writing and public speaking are
all highly rated, his talents for business management are less
impressive. “We’re designers, not business people,” Mr Grey admits.
“Business disciplines have taken second place. But now we want our
creativity on a firmer commercial base.” As well as
kitchens, he now needs to design a better structure for business
He could never have imagined such a need when his aunt, the cookery
guru Elizabeth David, asked him to build a sink cabinet for her
kitchen 30 years ago. He had studied architecture and sold antique
furniture, but at the age of 26 he considered himself “virtually
unemployable”. So Mr Grey was startled when the cabinet prompted the
grandson of the poet GK Chesterton to commission an entire kitchen for
his house in Tooting, south London. He was even more astonished when
the “extreme” gothic punk kitchen design was widely praised in
national newspapers and glossy magazines.
Since then, Mr Grey has followed a distinctive design path,
concentrating on “unfitted kitchens” for private customers and
business clients such as Smallbone. More than 400,000 books by Johnny
Grey have been sold, including the Dorling Kindersley Book of Kitchen
Design and the more recent Kitchen Culture.
He talks passionately about the importance of “soft geometry”, with
curved cabinets that accord with the vision and movement within the
kitchen, which he regards as “the sociable, active central space”
within the home.
Mr Grey despairs of “this awful fixation with fitted kitchens” and
makes no secret of his hatred for wall units above work services and
other “solutions” devised by “box-juggling salespeople masquerading as
Kitchens are a very competitive marketplace, he says, operating at
four price levels, all of which have far tighter margins than the
bathrooms sector. Some kitchens are built for as little as £2,000 to
£3,000 with cheap units sold at very low margins to builders and
joiners. Fitted kitchens use factory-produced units and typically cost
£8,000 to £12,000, while bespoke kitchens cost £15,000 to £30,000.
Johnny Grey operates at the top level, where specially designed
cabinets cost £40,000 to £80,000.
“By the time we have created the entire kitchen environment with
lighting, appliances, underfloor heating and architectural changes,”
he says, “the final bill generally comes in between £50,000 and
£150,000.” To prevent people asking for speculative plans and
employing cheaper builders to implement the ideas, he charges £10,000
for a design.
The prices are high, and the business structure is complicated. At the
core is the Johnny Grey Ltd design studio in the grounds of his
Hampshire country home. Four part-time and three full-time staff,
including young fellow director Myles Hartwell, design kitchens each
year for private clients. Sales, having reached a high point of £1.2m
six years ago, fell to £750,000 in 2006 and declined by another 20pc
last year. “It’s not as bad as it sounds,” Mr Grey says. “Our sales
have halved, but our net profits have doubled.”
Having achieved “cult designer” status in the US through his books, Mr
Grey invested £100,000 for a minority shareholding in an American
company named Johnny Grey Inc. The San Francisco-based firm employs
four staff to sell kitchens created by a Franco-Irish designer trained
in the UK by Johnny Grey himself.
“That business is getting back on its feet now after losing $100,000
in a disastrous relationship with a supplier,” Mr Grey says. “Sales
are now running at around £500,000.” Part of that income is in
appearance fees for Johnny Grey’s personal presence at trade events.
Mr Grey’s imagination is arguably too fertile. As well as these two
companies, he recently joined an architect to form a new company in
which he does approximately one-third of the work, generating
approximately £10,000 per month.
He also makes around £20,000 a year through public speaking and
book-writing and has also just launched a new partnership called
Foresight to run conferences. The first two, entitled “Housing from
Heaven” and “Mapping the future kitchen”, will be staged at the Royal
Institute of British Architects in April and May. All being well, each
will cost £35,000 to stage, generate ticket sales of £50,000 and
evolve into another limited company, running eight conferences a year.
From some perspectives, this represents a textbook “professional
portfolio”. But Mr Grey readily agrees to Mr Hartwell’s suggestion
that “we could be doing so much better”. The organisation had
“terrible financial controls and poor project management skills”, but
past attempts to introduce traditional management structures have
proven ineffective and costly.
The core business has invested in a website (johnnygrey.co.uk)
plus training to improve workplace systems and business
administration. Marketing is more precisely targeted toward big budget
kitchen design projects, and the company now monitors the
profitability of each project.
“Each designer can handle four projects easily and six at a stretch,”
Mr Hartwell says. “So this year we should increase from eight to 12
projects, each worth an average of £100,000.
“With one additional designer and a full time project manager,” Mr
Grey says, “Johnny Grey Ltd could be making £600,000 profit on sales
of £2m.” But even with better marketing and internal systems, growth
will not be easy.
Rising UK labour costs have forced the price of cabinetry up by 50pc
in the past seven years. Margins are squeezed by cheap imports, and
outsourcing work to skilled carpenters overseas is hampered by lack of
operational control systems.
However “the company’s biggest challenge”, Mr Hartwell says, “is
keeping track of Johnny. He is our most valuable resource, but is
spread too thin across all these different areas of interest.” Until
Mr Hartwell can design an operational structure to keep Mr Grey’s
design passion in check, Johnny Grey will remain a star but his
businesses will be “also rans”.
Are your energy bills too high?
Research suggests apathy and a lack of
knowledge are behind the reluctance by small companies to
introduce energy-efficient policies
businesses could do much more to reduce the amount of
energy they use and save money in the process, according
to a survey by Ipsos Mori.
The research, carried out on behalf
of British Gas, suggested that poorly informed and
disinterested owners and managers are wasting money by
failing to take basic steps to reduce the amount of
energy they use.
“We are increasingly of the view
that the small business community could do so much more
to help save the planet and increase their profits at
the same time,” claimed Simon Stenning, head of
marketing at British Gas Business.
“By adopting straightforward,
low-cost and no-cost measures to reduce energy usage,
small businesses could slash up to 20% from the average
annual energy bill,” he added.
Almost one in five respondents said
they felt there were no cost benefits to saving energy,
while 71% believed they could do little to reduce the
amount they use. But more than half the managers
questioned admitted they were more careful about the
amount of energy they used at home than they were in the
Only 18% of the 300 managers
responsible for energy policy had carried out an energy
audit and only 20% had looked for information on
implementing energy-efficient policies.
Companies know what the issue is but too many see
energy expenditure as a tax rather than something
which can be controlled and reduced
Just over half (56%) of companies
questioned admitted they had to make their businemething
which can be controlled and reduced,” said Adrian
Harvey, commercial director of British Gas Business. “If
you’re an SME, you’re less likely to have resources to
dedicate to energy efficiency planning.”
The government has placed energy
efficiency at the top of its agenda for cutting carbon
emissions as fears over the impact of global warming
ss more energy-efficient but 32%
said they lacked the necessary resources.
“Companies know what the issue is but
too many see energy expenditure as a tax rather than so
Secrets of business success revealed
Growing companies and business startups with
under 50 employees are perfectly positioned to flourish if
they follow seven key traits, according to the business
advice in Vodafone‘s UK Working Nation report
start-up companies with fewer than 50 employees are
perfectly placed for fast growth and high levels of
employee satisfaction, according to research into what
makes organisations successful and satisfied.
The Vodafone UK Working Nation
business advice report identified seven key areas that
are most likely to lead to both financial success and
individual satisfaction and found that small but growing
firms, that had existed for four to five years and had
10-50 staff, were the best fit with this template.
The key business advice small firms
must follow to make the most of their potential are as
Leaders, not followers:
more than three-quarters of growing businesses see
themselves as leaders, compared with 68% of businesses
Risk-taking, not cautious:
while a quarter of all employees say their business
takes risks, this figure rises to nearly one-third among
growing businesses, 68% of employees perceive their
organisation to be innovative, compared with an average
while only just over 51% of
businesses see themselves as diversifying, this rises to
60% among growing businesses
Have a clear single
identity: two-thirds of businesses that are
experiencing growth say they have a clear single
53% of growing businesses are the first to try and use
My own work with owner managers from hundreds of
successful growing businesses has shown me that
important conclusions can be drawn from businesses
that succeed and those that fail
70% of businesses that recorded a profit in the past 12
months class themselves as consistently planning and
developing long-term strategies
“The business advice report
provides a valuable insight into the vital
characteristics that successful businesses share,” said
Gerard Burke, director of the business growth and
development programme at Cranfield School of Management.
“My own work with owner managers from hundreds of
successful growing businesses has shown me that
important conclusions can be drawn from businesses that
succeed and those that fail.”
The business advice survey also
Edinburgh as the
business success hotspot, with respondents in the
Scottish capital 25% more likely to work for a growing
company that the national average. The city also has the
highest levels of staff retention in the
The city that sees itself as the
most innovative was found to be Liverpool, while
named as the top centre for research and development.
What would you sacrifice for success?
The majority of entrepreneurs are prepared to work
late, cancel romantic plans and cancel a family holiday in order
to win more business, a survey suggests
lengths entrepreneurs would go to in a bid to further their
business have been revealed in a new survey.
According to the research, 87% would work
as late as required and sacrifice an evening in with the
family, 59% would cancel romantic plans with partners to
secure a deal, and almost one in three (31%) would miss
important meetings about their child‘s education if they
thought it would lead to more business. Over half (54%) would
forsake a family holiday if they felt it would help business.
The survey also revealed how far
owner/managers would go to keep the business afloat. Over half
(55%) would lay off staff and take on their workload in
addition to their own while 41% would consider taking on a
“It is very interesting to see the
lengths that entrepreneurs will go to in an attempt to win new
business, forsaking their partners and putting work before
their children,” said David Robertson, chief executive of
Bibby Financial Services, which commissioned the research.
“This highlights a need for a more healthy distinction between
work and life.”
It is very interesting to see the lengths that
entrepreneurs will go to in an attempt to win new
business, forsaking their partners and putting work before
their children. This highlights a need for a more healthy
distinction between work and life
When it comes to coping with the
financial pressures of running a business, half (50%) of
owners and managers would take out a personal loan and 37%
would sell expensive possessions or re-mortgage their house.
Almost a third (29%) would borrow from
their joint savings account and nearly a quarter (24%) would
borrow from friends and relatives to give their business a
“We are clearly a nation of motivated
individuals,” added Robertson. “But it is concerning that when
facing a cashflow crisis, owners and managers think that a
personal loan or borrowing from friends is the answer. These
are short-term solutions to what is clearly a long-term
Make the most of the summer
Small business owners can turn the challenges into
opportunities if they use the summer as a chance to plan for the
summer months can be one of the busiest times of year for
small business owners, especially those with seasonal
But it can also throw up a number of
headaches, from soaring temperatures and low productivity in
the office to train problems and absence caused by staff
According to David Robertson, chief
executive at Bibby Financial Services, it‘s also an
opportunity to plan for future growth. “Summer can be one of
the most challenging times for small business owners and
managers, with staff holidays and seasonal surges in demand to
cope with,” he said.
“But, with a little forward planning,
it‘s surprising how much time can be saved in the long-term,”
he added. “This time of year needn‘t be a headache for owners
and managers. In fact, it can be a really prosperous time.”
Bibby Financial Services has developed
the following top tips to help owners and managers manage
their workload during the busy periods:
Plan, plan and plan some more. Try to
anticipate summer demand for your products or services by
looking over orders for previous years. Seasonal trends are
likely to occur on an annual basis and should be factored in
to your business plan and sales forecasts
Monitor your stock levels regularly.
While over-stocking will deplete cashflow and may prove
difficult to shift, under-stocking could cost you sales and
may even result in the loss of valued customers
Under-promise and over-deliver. Never
take on board contracts that you can‘t fulfil, particularly
in the summer months when you may have a skeleton staff.
This will damage your reputation and endanger your business
Summer can be one of the most challenging times for
small business owners and managers, with staff holidays
and seasonal surges in demand to cope with. But, with a
little forward planning, it‘s surprising how much time
can be saved in the long-term
Consider seasonal cover. Many of your
staff will want to take time off over the summer months,
particularly during the school holidays. Consider taking on
temporary staff to fill the gap and ensure that your
customer service levels are uninterrupted
Plan your absence. If you want a
holiday, be realistic about when you can go. If your
business is affected by marked seasonal variations, take
your break when you anticipate a lull in demand
Delegate responsibility. For the
duration of your holiday, empower a trusted member of staff
to make decisions in your absence, check email and voicemail
and open the post. This will ensure you can ease yourself
back into work gently on your return and won‘t spend the
first few days sorting a mountain of mail and messages
Keep the cash flowing. As the
temperature heats up, don‘t let your cashflow dry up. If
necessary, explore alternative funding methods such as
invoice finance, freeing up to 85% of the cash tied up in
unpaid invoices and helping you ensure you have a flexible
supply of working capital during your peak sales season
Practise good housekeeping. Keep clear,
concise documentation, send out invoices and statements
quickly and maintain clear records. This will ensure that
when you are extremely busy, the day-to-day business runs as
smoothly as possible. If you go away, staff can pick up
where you left off
Email marketing: the easiest way to increase your
Imagine a marketing tool that is cost-effective,
targeted, easy to manage, and measurable. Sounds good? Well opt-in
email marketing is now the hottest thing on the block. And one of
the easiest ways to grow your business.
the right track
So what makes it so darn good? The advantage that email
marketing has over pretty much any other type of marketing is
its trackability. Instant, live results from a marketing
campaign were a marketers dream just a few, short years ago.
Now they are a reality.
But not everyone is taking advantage.
Emailing your database from Outlook or using bulk email
sending software is usually a waste of time. Mainly because
you get little or no feedback – unless a recipient chooses to
email you back. True, you can set up a read receipt in Outlook
but that only tells you a very small part of the story.
But imagine if you could tell, at a glance, who isn‘t
interested in your services or product and really doesn‘t want
to hear from you again? Or who opened your email and read it
repeatedly? (Wow, those people are keen!) Better still,
imagine if they clicked directly through to your website from
a link in the email? You would know exactly what interested
them. How useful would that be?
Fortunately all that information is really easy to obtain if
you use a good email marketing tool like
ShineEmail rather than Outlook. There might be a learning
curve for a few days but it‘s worth it to make your emails
100% more effective, right?
Email marketing can give you something special: instant,
live, two-way communication from every address you deliver
Use all the information
Email marketing can give you something special: instant, live,
two-way communication from every address you deliver to.
That‘s right, every single one.
Even emails that bounce back tell you something: it may be
that those addresses are dead and you need to update your
You can also tell instantly if your email is engaging your
reader: if you‘re getting 20% ’opens‘ and only 22% ’reads‘
then you know something about your email isn‘t connecting with
your recipients. If it was they would be reopening the email
to reread it or show it to the boss, and the percentage of
’reads‘ to ’opens‘ would be much higher.
With this kind of in-depth information you can really
understand what‘s working. And what‘s not. And you can begin
to target your messages; improve your response rates; and
follow up on click-throughs.
To get you started, here are 5 tried and tested ways to
improve the effectiveness of your email marketing.
1. Short and sweet
Keep your subject line short: about 40 characters or ten
words. Any longer and the subject line will be cut off by most
email clients. And make it punchy and interesting so your
reader will be compelled to open your email.
Avoid words like OFFER or FREE or exclamation marks for
emphasis!!! These will guarantee your email will end up in the
spam folder quicker than you can say junk.
2. Keep it simple stupid
Don‘t make your emails too long or try to cram in too many
offers. You‘ve got a second or so to grab your reader‘s
attention. So keep it simple with short sentences, small
paragraphs, and bullet points.
3. What next?
Let your readers know what to do next: Call us. Email us.
Visit our website etc. Make sure all your contact details are
big and bold.
4. Time‘s up!
Putting a deadline on your email can increase response rates.
So ask your reader to respond by a certain time or day to
receive their, for example, free goodies or discounted offer.
Let your reader know that if they snooze they lose!
5. Timing is everything
Don‘t send your email at 10.00am on a Monday morning when
everyone is manic. It will never get read. Instead choose a
day of the week and time of day when your reader will be more
receptive to your product or service. Friday afternoon is a
good time for alcohol related products!
Follow these five golden rules and I guarantee you will
improve your response rates. Good luck.
How well do you know your customers?
Businesses are struggling to market
themselves effectively to customers both online and offline,
according to research unveiled by Microsoft
and medium-sized businesses are struggling to keep on
top of their marketing strategies both online and
offline, according to new research commissioned by
The study found that 84% believe
marketing is becoming more challenging due to the
growing complexity of customer needs and revealed that
most businesses are ill-equipped to cope with these
Nearly three-quarters of those
polled (74%) admitted using unsophisticated customer
relationship management (CRM) tools in an attempt to
deal with customer needs while an alarming 90% admitted
they needed to get a better understanding of customer
Fewer than a quarter of respondents
felt they were able to monitor purchasing methods or
spending levels from customer audits, meaning they were
missing out on marketing opportunities to new customers
and servicing their existing customer base.
“This research highlights how
organisations are badly prepared to face not only their
current but also their new business challenges,” said
David Thorp, head of research and information at The
Chartered Institute of Marketing (CIM). “A new approach
needs to be taken to ensure organisations keep on top of
their existing and prospective customer relationships.
“Companies need really good tools,
coupled with effective integration across marketing,
sales and services, to help them understand the customer
dynamics of the new medium and not just a vague
understanding that everything is changing,” he added.
This research highlights how organisations are badly
prepared to face not only their current but also
their new business challenges. A new approach needs
to be taken to ensure organisations keep on top of
their existing and prospective customer
The research also revealed that
companies are failing to make the most of the power of
the internet from a marketing perspective. Over half
(61%) of firms claimed they saw the internet as an
important or critical marketing tool but just 15% said
they believed they were using it to the full.
The most common online marketing
strategies were online advertising (used by 57%),
e-direct mail (49%), website e-news sponsorship (44%)
and search engine marketing (36%). Yet just 26% of sales
teams have the necessary processes to capture sales
leads from databases, the research showed.
“The findings of this research
underline the importance of establishing a solid
platform for understanding all of a business’ customer
relationships, both online and offline,” said David
Rodger, group manager, business segment marketing, at
“As the customer landscape changes,
due to this increasing variety of choice, it becomes
imperative that businesses have the ability to address
customers’ changing expectations and build new
competitive advantage by developing marketing strategies
that supports sales,” he added.
Why you need an employer brand
Fewer than one in four small firms has an
employer branding strategy, meaning they risk high staff
turnover and miss out on the chance to develop a good
reputation, according to the International Workplace Survey
than a quarter of small companies have an employer
branding strategy designed to attract and retain new
staff, the International Workplace Survey has revealed.
According to the research revealed
by financial recruiter Robert Half, only 23% of firms
with fewer than 50 members of staff had a formal
branding strategy compared with 69% of businesses
employing more than 200 people.
When asked what was the most
important reason for adopting an employer brand
strategy, a quarter of all UK employers (24%) said it
would lead to a high retention of existing employees and
18% claimed that it would attract and recruit new staff.
A further 17% stated that it would tie employee
commitment to organisational goals and 19% claimed it
would help to maintain a positive reputation in the
“In today‘s marketplace where
skilled candidates are such a precious commodity,
employers need to look carefully at the image of their
organisation and what they would like to represent both
internally to existing members of staff and externally
to potential new employees,” said David Jones, UK
managing director at Robert Half.
“Candidates can now afford to be
selective in who they choose to work for and
increasingly will look closely at an organisation‘s
culture, company image and values that are aligned with
their own before deciding whether to join,” he added.
Responsibility for developing and
driving a company‘s employer branding should comes from
the top, the survey claimed. Globally, almost a third
(29%) believed that the chief executive or chief
financial officer must buy into the employer brand first
for an organisation to become an ’employer of choice‘
while 24% said responsibility lay with the HR department
and 20% said it should be a multi-departmental approach.
Employers need to look carefully at the image of
their organisation and what they would like to
represent both internally to existing members of
staff and externally to potential new employees
“Key to developing an effective
employer branding strategy is to identify what is unique
to your organization,” claimed Jones. “Holding staff
workshops will help you to identify what is meaningful
for your existing members of staff, what motivates them
about the company, what messages work and importantly
what keeps them loyal.”
The UK as a whole fares well in
terms of employer branding, however, with 44% of the HR
and finance managers questioned claiming their company
has a formal employer brand strategy in place. This
compares to a worldwide average of just 32%.
Globally, 20% of companies claim
they intend to implement such a strategy in the next two
years while 35% admit they have no intention of doing
so. The survey was conducted with over 5000 HR and
finance managers in 17 countries across Europe,
Australia, New Zealand, Hong Kong, Japan and the United
The human touch
Technology is giving small business owners new
methods of marketing that offer cost-effective and targeted ways
of reaching potential new customers. But that‘s no substitute for
building some good, old-fashioned customer relationships, says the
Chartered Institute of Marketing‘s Geoff Hurst
has certainly transformed the marketing profession. Email
newsletters, SMS messaging, search engine optimisation and
even iPod marketing have all offered businesses new ways of
reaching customers, and a recent small business advice survey
conducted by the Chartered Institute of Marketing found that
over three-quarters of marketing professionals believe such
technology has made marketing a more effective discipline.Many
marketing decisions that used to require human input can now
be made by a computer programme. Markets can be segmented at
the touch of a button and, even on the most complicated
mailing list, a simple programme can easily separate the
family with two children that aspires to buy a Volvo from the
Lotus-driving singleton living alone.
Customer relationship management programmes that target
customers who bought cans of cat food or cartons of cornflakes
can be activated at the click of a mouse while companies such
as easyJet set prices online using automated systems that
ensure that the maximum number of tickets is sold for each
Technology is enabling marketers to achieve what until
recently was the work of science fiction. Some of the
techniques that are now being used to identify and study human
reactions to products and services are highly exact and the
results they can deliver are breathtaking in their complexity.
But just because they have the ability to target almost anyone
at any time doesn‘t mean this is the right thing to do, from
either a business or ethical stance. There‘s little point
using technology to alert someone to your product if the
potential customer only comes away feeling his or her privacy
has been invaded.
A survey in spring 2006 found that 56% of marketers
believed technology was moving ahead of any consensus
around the moral dilemmas it can create. By autumn last
year that figure had crept up by 7%
Research suggests that the marketing profession is uncertain
about how to cope with this issue. A small business advice
survey by the Chartered Institute of Marketing in spring 2006
found that 56% of marketers believed technology was moving
ahead of any consensus around the ethical and moral dilemmas
that it can create. By the autumn of last year that figure had
crept up by a significant 7%.
Technology can also stifle rather than aid progress. By using
technology-based research to match products to customer
demand, business owners and those thinking of starting a
business can tweak and refine their offerings. Items will be
slightly better than they were before but businesses will
rarely make quantum leaps in innovation without human
Technology-based research can tell you who, what and when. But
it can rarely tell you why. A business owner may be able to
see that customers are going elsewhere by looking at a
spreadsheet but to understand why they are leaving they have
to get on the telephone and ask them. There are times when
there is no substitute for personal contact. Vodafone, for
example, still uses traditional market research to assess the
success of its marketing campaigns, and to find out more about
customer behaviour such as why people move to other suppliers.
Marketers and those interested in the best ways of
communicating with customers must learn to control technology
rather than the other way around. Allowing number-crunching
programmes to automate decisions, send mass communications and
decide what the customer wants is both lazy and misguided. And
harnessing the real power of marketing technology isn‘t
necessarily about buying the newest software or introducing
more sophisticated equipment. It‘s often simply a matter of
using the technology that is already available more
Harnessing the power
The very best businesses understand that the basic rule of
marketing should always apply, which is that everything it
does must be driven by a genuine customer need. Some
third-generation mobile phone providers continue to
haemorrhage money because their emphasis on the glitz and
glitter of technology isn‘t about creating a closer bond with
customers. These companies are creating new technologies and
then try to get customers to buy them.
As with all good marketing, the technology should respond to
what the customer wants. The BBC, for example, treats
technology more sensibly by offering services such as
downloadable comedy and news that can be accessed while on the
Marketers must use technology to add extra colour to what they
already do. The most successful organisations of tomorrow will
harness technology to make marketing more personalised. They
will use it to release themselves from mundane tasks and spend
more time on better meeting the needs of their customers. They
will understand the importance of real relationships and know
when the human touch is required.
Honda, for example, is developing interactive platforms where
buyers can speak to an adviser without the hassle of visiting
a dealership. In this virtual showroom, customers can chat to
a technician, look at different colours and ’test drive‘ the
vehicles that take their fancy. This service allows customers
to get to know a product without obligation and adds real
Similarly, the AA is using technology so customers can avoid
the frustrations of a call centre. Following a breakdown, it
now sends automatic SMS updates to stranded customers letting
them know when the mechanic is 15 minutes away. At Amazon,
technology has been used to bring distant purchases further
forward. Its suggestions for further reading and a facility to
create wish lists are totally automated but they allow the
customer to feel a part of a close community.
In all the above cases, technology is not replacing a direct
and personal relationship with a customer but is enhancing it.
Small business owners and those thinking of starting a
business would do well to remember that technology can be a
valuable marketing tool but it is not the end of marketing
life as we know it.
How to use search engine marketing
Search engines are a great way to attract new
customers but only if you make it towards the top of the list.
Toby Mason, founder of Zootrain.com, outlines the basics
engines are often the first place where people go to look for
products and services on the internet. You need to ensure that
your business shows up on search engines when somebody is
searching for the kind of products and services you offer. The
chances are that if you are not present, your competitor will
be, and your potential customers will be lost to them.
There are two places your business can be
found through search engines: natural search results and
search ads (sponsored links). You want your website to appear
high in the rankings for both, as most users do not look
beyond the first page of results.
All businesses should make sure their
website is optimised for search engines to get them as high up
the natural search results as possible. Google is the number
one search engine in the
with over 26m users and 75% of all searches are done on
Google. Find out what Google suggests to improve your
website’s listing on natural search at
Getting higher in the natural search
results is great because you do not pay if a user clicks
through to your website. But you have little control over
where your site shows up in the rankings. It can be difficult
to achieve a high ranking, especially if your website is new
or there are a lot of competitors. With search advertising,
you have complete control of when your ad shows and where
users are taken to when they click on it. You also have
complete control of what the ad says and which keywords
Link your ad to the relevant page on your website, which
will often not be the homepage. Ensuring the content of
the landing page is relevant to your ad is vital if you’re
going to turn clicks into custom
Natural search and search ads work
together very well: if users see your website appear in both
the natural search results and in the ads, they are more
likely to click through.
When a user searches for something on
Google, sponsored links appear in a column on the right hand
side of the search results page and sometimes on the top of
the page in a yellow box. These sponsored links are ads served
by Google’s search advertising programme, called AdWords.
With Google AdWords you can create, put
live and edit your ads in real time. As soon as you put your
ad live, it will appear when someone makes the relevant
search. You can try different ads and see which does best for
a keyword or set of keywords.
There is no minimum spend with Google
AdWords, so you can use it whatever your budget. You only pay
when someone clicks on your ad, rather than paying just to
place it. This means that you only get charged for people who
have actively shown an interest in your ad by clicking on it.
You choose the keywords that trigger your ad.
Google rewards advertisers who make their
ads relevant to the user’s search. It does so by placing more
relevant ads higher than less relevant ones. The better your
ad, the higher up it will be placed on the page even if your
competitors spend more.
Google has other products to help you
with your advertising, such as Google Analytics which can
provide you with in-depth analysis of your ad campaign and
where users go on your website.
How to make your search
Many people do not go beyond the first page of the
search results so you want your ad to show up on the first
page of results. It is vital that you learn how to make sure
potential customers firstly see your advert, and secondly
choose to click on it.
Choose the right keywords for your product or service.
You know your business best, so start with brainstorming
terms that relate to your business. Then expand the list
Create ad copy that is concise, compelling and reflects
your product. You want to maximise your click-through rates
to increase your ‘quality score’, while avoiding unnecessary
clicks which cost you money
Test multiple ads to see which is the most effective
Link your ad to the relevant page on your website, which
will often not be the homepage. Ensuring the content of the
landing page is relevant to your ad is vital if you’re going
to turn clicks into custom
Use other features like geographic targeting, which
allows you to focus your ads on a smaller area
While this may look complicated at first,
it is worth understanding the principles and managing your own
campaign. This will put you in full control of your
advertising spend and save you expensive management fees.
Protecting business ideas
Leigh Ellis, business solicitor and contract
lawyer, gives a rundown on protecting your business ideas
is an entrepreneurial exercise to conceive a business idea
that will create a leading edge in a market or identify a gap
in a market. The process is in itself creative, but this
itself does protect the business idea. There is some power in
being the first to market with a new business idea, whether it
is a process or a product in its own right. Some analysis is
required to evaluating whether your idea is protectable at
law, and whether any part of it is protectable at law.
The starting point in evaluating whether an idea is
protectable is to understand that there is no abstract right
in law to prevent competition, or to protect an idea. The
courts and governments of the day for centuries have supported
competition between rival traders and have been reluctant
develop laws encroach on a freedom to compete. Ideas may be
protected to the extent that they fall under the relevant
areas of law, the primary area being intellectual property
Confidential information is a well established area of law
that that protects ideas and information regardless of its
form (whether spoken, or in a recorded form such as
electronically or on paper), provided that the confidentiality
of the information is maintained. The law of confidentiality
plays a part in other areas of law. For instance, that a
disclosure of particular information at a relevant time
completely dissolves the right to obtain patent protection.
There are traps for the unwary when dealing with business
ideas. When entrepreneurs are looking to disclose sensitive
information, they should enter into a non-disclosure agreement
prior to any disclosure to at least enshrine the terms of the
disclosure in writing. To be legally enforceable, the
agreement must be properly drafted and ideally lay out some
background to the circumstances of the disclosure, so that if
worse comes to worst there is some documentary evidence of the
disclosure and what it related to. This does not mean that the
information itself should be disclosed in the non-disclosure
agreement, but rather the circumstances and general subject
matter of the disclosure. If the company or person to whom the
idea is to be disclosed is reluctant to enter into a
non-disclosure agreement, then the business idea should
probably not be disclosed to them in the first place. It
would not be the first time that a company says after the
disclosure that they are “already working on something”
similar. A well drafted NDA will cater for this contingency.
No one IP rights serves all purposes, and the best right
depends on what the business idea is and how the business
wants to use it
When a business idea has been implemented and trading
commenced, it will of course lose its confidentiality and fall
into the public domain. At this point (and in keeping with our
comments about rival traders at the outset of this brochure)
there is nothing preventing any other company from copying the
essence of business idea and altering it or improving it and
by doing so creating a competing product or service –
subject to the following. If parts of the business idea
can be protected by intellectual property rights, then
competitors will not be able to copy the business idea to the
extent that the intellectual property rights protect the idea.
Overview of intellectual property rights
Each of the different intellectual property rights serves a
different purpose. They all apply independently – if subject
matter qualifies for protection under more than one type of
intellectual property protection, then the rights associated
with the particular intellectual property right may be
enforced independently of the others. No one IP rights serves
all purposes, and the best right depends on what the business
idea is and how the business wants to use it.
Loosely speaking, copyright protects written and
recorded material from copying; registered trade mark law
protects business names and logos from being used by other
businesses; patent law protects truly innovative
products and processes from being copied or offered for sale;
the law of passing off protects established
reputation in a business from being exploited by others; the
law of confidential information and that of trade
secrets protect information from disclosure or misuse
provided it remains secret. Lastly, designs law
primarily protects the aesthetic features of a design as it is
applied to a product. There are different tests for
infringement in each case.
So, if a logo is created that is intended to be used to
identify a business, it may qualify for trade mark protection.
It will also qualify for protection from passing off. If the
logo is an artistic work, it will also qualify for copyright
protection and protection as a registered design. Likewise, if
a design has been created it may be registered as a design,
the unregistered design right may also protect it, and if it
is to be used as a trade mark, it may qualify for registered
trade mark protection as a shape, and protection from passing
off if it has accrued the requisite goodwill for the business.
It is important to realise the intellectual property rights
are territorial. For instance, there is no such thing as a
worldwide patent or trade mark. A reference to a worldwide
patent usually means that registered patent protection has
been obtained in many individual countries or ‘territories’.
With trade marks, there is an important exception where a
single trade mark may be obtained covering all of the
countries in Europe (except Switzerland) with a single
Individual Areas of Intellectual Property Protection
to Business Ideas
This area of Copyright law is said to protect the fine arts,
whereas patent law protects the industrial arts. Copyright
protects materials in their recorded form whether it be art,
photographs, graphic works, music as a embodiment of a
business idea. Copyright will not against someone reading the
written work, extracting the concepts from it and implementing
their own version of it, provided they do not copy the way it
is expressed. It will protect against someone copying the
materials that they read word for word. It does not protect
against someone extracting the ideas from the document and
using them for their own purposes.
Patent Protection and Business Ideas
Some people say that patents protect ideas. They say this on
the basis that at the time the patent application is filed you
do not need an existing invention, because the patent
invention only needs to be produced when the application
proceeds to examination, about 9 months after the application
is made. Strictly speaking, patents do not protect ideas – it
protects products and processes that have been invented, that
has not been seen before and contains an advance over what
existed in the market at the date of the application.
The UK and Europe do not allow protection for pure business
methods (amongst others). This contrasts with US patent
protection that does allow for protection of methods of doing
business. A good example is the “One-Click” purchasing method
used at amazon.com – it is patentable in the US, but not in
Design protects the appearance of a product brought about by
its shape, contours, ornamentation and surface decoration.
There are exceptions to these rules. Nevertheless if the
design is new and has an individual character, it may be
registered for protection. The unregistered design right
applies automatically in the same way as copyright and has
some similar characteristics.
If the business idea is the name of a business or a logo, it
may be registered as a trade mark. A trade mark is simply a
name or symbol that indicates that goods or services originate
from a source associated with the trade mark. For instance, if
Google were to produce a mobile telephone with word ‘Google’
applied to it, you know that the Google, Inc had a hand in
producing it. Trade marks do play a role in the promotion of a
business idea, because it allows the business to associate the
business idea when it goes to market with a distinctive name,
which is readily differentiated in the market.
Contracts, when properly prepared, are simply agreements in a
legally binding form. Contracts may be verbal or they may be
written. In a commercial context, there is real difficulty in
proving what the terms of a verbal agreement are. It is
commonly said that contracts are not required unless things go
wrong. The problem with this approach is that when a value
judgment is made at the outset of transaction that all will go
well, there is no decisive written record of what was actually
agreed, which makes enforcement of the contract more difficult
and in our opinion, for most cases too risky to try.
When dealing with intellectual property rights, some
transactions dealing with intellectual property must be in
writing, such as transfers of ownership and grants of
exclusive licenses. Furthermore, contracts with employees may
be drafted with a view to preventing competition from
employees and freelancers when they leave finish their
engagement with their employer.
The focus of this article has been the application of
intellectual property rights and contracts may used to protect
a business idea and their limitations. Intellectual property
rights and contracts may be tailored to maximise the level of
protection that is available by law for a particular business
idea in the circumstances that it is intended to be used. The
way this is done for any particular business idea relies on
the nature of the business idea and its origins.
By not taking measures at the outset, you run the risk of
losing rights that may otherwise have been enforceable and in
the process, compromising or losing a powerful negotiating
position in the event of infringement of legal rights that you
otherwise might have had.
Could you face age claims?
Small companies have failed to implement
changes to their employment practices following last year‘s
introduction of age discrimination laws and are failing to
take the threat of legal action seriously, a survey by Acas
vast majority of small businesses have made no changes
to the way they recruit and manage staff since the
introduction of age discrimination legislation in
October last year, according to employee relations
The body claims only 17% of small
companies have altered their employment and recruitment
policies as a result of the legislation, with most small
firms believing that they either already comply with the
regulations or that the new rules do not apply to them.
Companies with fewer than 10
members of staff were even less likely to have made
provisions, with just 6% saying they had made changes as
a result of the legislation.
Two-thirds of the 750 respondents
to the Acas poll thought they were well informed about
the legislation, the findings showed, but 30% could not
correctly answer the question of whether it was still
legal to enforce a retirement age.
Over one in 10 respondents that had
made no changes admitted age had played a part in their
decision on whether to give someone a job, the survey
found, while just 8% were either ‘somewhat’ or ‘very’
concerned about the potential impact breaching the new
age laws could have on their business.
These results are worrying as they highlight a
potential cost timebomb in smaller companies in
terms of potential tribunal cases, because the age
laws have not been considered
“These results are worrying as they
highlight a potential cost timebomb in smaller companies
in terms of potential tribunal cases, because the age
laws have not been considered,” said Acas chair Rita
Donaghy. “Age discrimination can affect all employees,
young and old, and to comply can be very simple and
“We are urging businesses to act
now, helping them to put in place policies that minimise
the risk of prosecution and to make employment decisions
on the basis of talent and skills alone,” she added.
Acas recommends small companies
take the following simple steps to minimise the risks of
them falling foul of the new regulations:
avoid specifying length of experience as this
disadvantages certain age groups
ask for date of birth on monitoring forms only and use
train managers to avoid stereotypes
sure it is open to all employees
set the same standards regardless of age
review your policies. Using length of service to select
employees for redundancy is likely to be discriminatory
add age to your current policy
How safe is your IT setup?
Less than a third of small companies
consider themselves to be fully up-to-date with their
internet security protection, putting both their own data
and that of their customers‘ at risk, research claims
half (44%) of all businesses with fewer than 10
employees have been a victim of cyber-crime, including
internet scams, identity fraud, phishing and data theft,
according to the government‘s Get Safe Online campaign.
Almost one in five (19%) had lost
revenue as a direct result of the attack, the research
discovered, with the average figure cited as £1,540.
This equates to a total of £750m across the
small business population.
The survey revealed that, of those
businesses affected, more than a third (36%) have
suffered from a computer virus and almost one in five
have been a victim of internet scams such as phishing,
spyware or hacking in the last two years. Over half
(60%) admitted their business would grind to a halt if
their IT system failed.
Less than a third (32%) of small
businesses considered themselves to be fully up-to-date
with current PC/internet security issues, despite the
fact that 69% stores customer details on their PCs. This
means any attack could compromise customers‘ security as
well as the original company in question.
Businesses must look at access control, data
encryption and secure password practices, as well as
looking at other measures such as staff training
“Businesses must look at access
control, data encryption and secure password practices,
as well as looking at other measures such as staff
training,” claimed Tony Neate, managing director of Get
Safe Online. “But it‘s also important to remember that
by taking a few simple precautions, online risks needn‘t
overshadow the huge benefits that the internet brings to
“The good news
is that small businesses are taking the general basic
steps to protect themselves,” he added. “For example,
97% of those surveyed in our research protect their IT
equipment with anti-virus software.”
But only 5% of small companies have
access to a dedicated IT resource – either internally or
through an outsourced provider – with many business
owners preferring to take on responsibility for this key
business issue themselves.
Why you need a speedy site
UK consumers are no longer prepared to put up with
poorly performing or badly maintained websites, according to new
companies with slow websites containing broken links will lose
vital business to their competitors, according to new research
into the UK‘s internet buying habits.
The poll found that nine out of 10 people
would go directly to a company‘s rivals if their site failed
to load with over half (52%) only prepared to wait a maximum
of 30 seconds.
The survey of some 1,600 consumers
revealed that nearly 80% of people found slow website loading
a major irritation, 71% disliked websites that required
specific software to run, 61% were annoyed when images failed
to load and 24% were turned off by domain names which are
difficult to remember.
Almost two-thirds of internet users (63%)
would go to another firm‘s website if they came across a
broken link, with just 4% prepared to tell that company about
It is no surprise how strongly consumers feel about poorly
performing websites when they suffer significant stress
from using them. As users become more dismissive of slower
sites, small companies must ensure that their market has
instant access to their products and services
“It is no surprise how strongly consumers
feel about poorly performing websites when they suffer
significant stress from using them,” said Andreas Gauger,
chief executive at 1&1 Internet, which carried out the
research. “As users become more dismissive of slower sites,
small companies must ensure that their market has instant
access to their products and services.”
The research also suggested that
consumers are becoming more aware of the reasons behind poorly
performing sites. Some 69 per cent of those surveyed blamed
poor web hosting as the cause, rather than their own
bandwidth, internet connection or computer.
Women are more likely to revisit a site later in the day,
with 33% prepared to come back later compared to just 25% of
men. But they are also more likely to complain about a site to
their work colleagues or friends, the survey carried out by
Small businesses must overcome virus vulnerability
With all the other issues involved in running or
starting a business, keeping tabs on IT and internet security can
easily be overlooked. But that just makes them all the more
vulnerable to some serious threats that could ultimately put them
out of business
October 2006 a gang of fraudsters was sentenced to eight years
in prison by Russian authorities for blackmailing online
companies. The gang extorted more than US$4m from British
companies after rendering their websites inaccessible. Online
casinos and betting websites were directly targeted by the
group, which used compromised zombie computers to launch the
denial-of-service (DoS) attacks.
Canbet Sports Bookmakers fell victim to the scam during the
2005 Breeders’ Cup races. The company refused to pay a
US$10,000 ransom demand and found that its website had been
taken out of action by the hackers, at a cost of more than
$200,000 in lost business for every day of downtime. Canbet
was just the tip of the iceburg. According to Russian
prosecutors, the gang made over 50 similar blackmail attacks
in 30 different countries before finally being caught.
There are worrying signs that blackmail, corporate espionage
and corporate identity theft are becoming more common online
as businesses come to rely on the internet. And while the
teenage hackers of yesteryear are still causing a nuisance
with malicious viruses, they are now being dwarfed by
organised gangs that have spotted the opportunity to make a
lot of money.
Internet search engine Yahoo and money exchange service
WorldPay have both suffered DoS attempts in recent years.
Internet blackmailers similarly targeted British teenager Alex
Tew’s million-dollar homepage project earlier this year.
According to Graham Cluely, senior technical consultant at IT
security company Sophos, targeted businesses should proceed
with caution. “Whatever you do, don’t pay the money as that
encourages them to come back for more,” he says. “Instead, go
to your local police, the National High Tech Crime Unit or the
computer crime unit at Scotland Yard.”
Business owners can also talk to their internet service provider (ISP),
which can help avoid DoS attacks. But don’t be complacent,
says Cluely. “While smaller organisations are undoubtedly less
at risk than the bigger or high-profile targets, it only
requires one person to be a bit miffed with you or think that
you gave him a poor service, and a DoS attack can happen.”
Small business owners normally come out of the corporate
world where they have IT security available to them. Many
of them don't even realise they need IT support until it's
While the ‘bad guys’ might be getting more sophisticated in
their attacks, small businesses have typically failed to keep
pace with their defences. The problem is significant, with
very few smaller businesses having the knowledge, time or
resources to ensure they are properly protected. Many will not
have dedicated IT staff or a security department, for example.
“Small business owners normally come out of the corporate
world where they have IT security available to them as a
matter of course,” explains Ricky Brown from WireWorX, an
outsourced IT helpdesk service that specialises in companies
with fewer than 10 members of staff. “These entrepreneurs who
are starting a business for the first time generally overlook
security due to the number of other challenges they face in
setting up the company. Many of them don’t even realise they
need IT support until something happens and then it’s too
To combat that problem, new business owners should swot up on
security. There are a number of websites and services that
provide free business advice on what the risks are and how to
avoid them. A good starting point is the government-led
www.getsafeonline.org and Microsoft’s own specialised security
portal at www.bcentral.co.uk.
The first line of defence – and one that is often the most
overlooked – is to ensure the operating system security
features are turned on. Microsoft Windows XP and its latest
operating system Vista have a number of enhanced security
features including automatic firewalls, which effectively put
a wall between the business and the internet and prevents
malicious information coming on to the network. Microsoft
Outlook 2007 now has spam filters and anti-virus features
built in, while Explorer 2007 trawls for phishing sites and
warns users of suspicious web addresses or web content.
Microsoft Vista brings all security settings into one place
and simplifies the installation process. Enhancements include
Windows Defender, which monitors the system for malicious
programs hidden in photos or joke emails, for example. Users
can call the Microsoft helpline for help with any questions or
advice on setting up these security features.
Protect and serve
But while Windows XP and Vista undoubtedly provide improved
security, they are not sufficiently robust to defend against
all attacks. Every month Microsoft finds security holes, so
keeping up-to-date with its security patches by using the
Windows update function, found on your computer’s start menu,
is vital. And businesses will still need to install extra
software alongside the Microsoft tools.
There are many off-the-shelf security products available to
small businesses. Offerings from well-known providers such as
Sophos, Symantec, McAfee and MessageLabs typically cost an
initial fee with an ongoing annual licence fee on top for each
user. Depending on the price you’re willing to pay, this can
include firewall, anti-virus, anti-spam and anti-adware
options (see separate box overpage for a full definition).
For slightly larger businesses with an infrastructure of more
than two or three sites, owners may want to consider an
intrusion detection system (IDS), which can be bought as an
outsourced service for a yearly fee. IDS will search for
hackers or malicious code trying to get into the network and
alert users to the threat.
Companies that are involved in online trading – the buying and
selling of goods over the internet – need an extra layer of
security. Secure socket layer, or SSL, technology is the
cornerstone of all ecommerce security and provides the padlock
icon on the bottom right hand side of the browser. “SSL
ensures data sent over the internet is protected and encrypted
so can’t be eaves-dropped on, and hopefully provides a degree
of assurance that you are who you say you are,” explains Ollie
Whitehouse, internet security expert at product provider
Companies that use an external ecommerce service provider
should make sure they are satisfied with how and where
customer data is stored, who has access to credit card numbers
and how they are backed up. All of these issues have data
protection implications and could seriously jeopardise
business reputation if a breach was allowed to happen.
According to Whitehouse, a relatively new problem for
ecommerce sites is cross-site scripting: a tool that
fraudsters use in phishing scams to redirect payments. “The
criminals send a link out that looks like your site and is on
your site, but is malicious in nature,” he explains, adding
that owners should check that their ecommerce service provider
has sufficient defences against such attacks.
Someone else’s problem
If all this is sounding a bit overwhelming, owners can opt to
outsource the whole security function. Managed security
services such as those supplied by VeriSign, Unisys and
Belgium-headquartered Ubizen, protect customers’ businesses
through the configuration, management and constant monitoring
of security events. These typically have 24x7
network-monitoring facilities, which cover access control,
intrusion detection and prevention, and can include data
Depending on the level of need, managed security services can
also ensure that anti-virus and anti-spam software is
up-to-date and active and that firewalls are configured
However, even managed security will not solve all potential
security problems. Corporate identity fraud, for example, is a
growing threat, where fraudstars fake applications to
organisations such as Companies House, changing information
such as company names and addresses of organisations. In one
case taken up by the Federation of Small Businesses, one
family business had its address changed from where it had been
located for 100 years.
One way of protecting your business from this threat is to use
the protected online filling system operated by Companies
House, which alerts the business owner every time a record is
changed. Another is to stay vigilant and report anything that
looks suspicious. And this piece of advice is valid for all
your security provisions, whether online or not.
Surge in online spending
The amount of money Britons spent online grew by
33% in 2006 and will account for 9% of retail sales by 2011,
according to a study by Verdict Research
retailing is growing at the fastest rate since the dotcom
bubble of the early 2000s, a new survey by Verdict Research
The poll claims the amount of money spent
online in the UK grew by 33.4% to £10.9bn and claims this
figure will almost triple over the next five years.
It cites quicker and cheaper internet
connections as the main reason, claiming two-thirds of
internet shoppers now have broadband connections and spend
more money online as a result.
Verdict claims online retailing will
account for 8.9% of total UK retail sales by 2011, resulting
in a total annual spend of £28.1bn, with most of this figure
coming from an increase in spend by existing internet shoppers
rather than those who have so far resisted the internet going
By 2011, the typical spend of an online shopper will grow
to £1,056 per year with the clothing and footwear, DIY and
gardening, and food and grocery sectors achieving the
But it also suggested there are three
retail sectors that are resisting the temptation to go online
due to the costs involved in setting up and maintaining such
operations. These are food retailers that not yet online,
value outlets such as Primark or Matalan and smaller,
“Even with some retailers staying out of
the market, online sales in the UK are set to triple in
value,” the research company said.
“By 2011, the typical spend of an online
shopper will grow to £1,056 per year with the clothing and
footwear, DIY and gardening, and food and grocery sectors
achieving the fastest growth.”
Verdict‘s figures included online sales
of goods but did not feature other products such as air
flights, insurance or ticket sales.
The total amount spent online has grown
every year since the birth of internet retailing in 1997.
A vicious circle of debt
British companies are leaving themselves
open to late payment in international trade, says Gideon
Jones, head of collections at Atradius. But our own payment
habits leave a lot to be desired as well
As British exports continue to thrive, there is growing
evidence that UK companies are putting themselves at
greater risk of bad debts in their desire to woo foreign
According to the Atradius UK export survey, more British
firms than ever before are giving their overseas
customers extended payment terms of 60 days or more,
despite the fact that is becoming harder for them to get
their clients to pay up on time.
The survey, which was conducted among 6,000 UK export
professionals, by the Credit Management Research Centre
(CMRC) found an increase in the number of UK companies
giving credit terms of 60 days to customers in the key
markets of Europe, South East Asia and the Far East, the
Middle East and Africa. Yet UK companies trading with
these regions say that the average number of days that
bills are overdue has increased since 2002 when the
research was last carried out.
More than two-thirds (68%) of UK firms say that
extending payment terms is a “customer relationship
decision”. Yet the vast majority of companies (82.6%)
use their own funds to finance exports, meaning that a
late or unpaid bill could seriously damage their
The majority of firms (61%) admit they spend too much
time chasing up payments, and many (61%) say that
foreign customers are taking longer to settle their
bills. Unsurprisingly, 84% of UK businesses told
Atradius the possibility of suffering a bad debt
Will Clark, Atradius’s regional director for UK &
Ireland, NAFTA and Australasia, warns: “More businesses
are using their own funds or an overdraft to finance
their exports, yet many firms are not protecting that
investment with vital cashflow tools such as credit
insurance, overseas debt collection, credit checks or
detailed reports on the countries and companies they are
trading with. Without this backup, a slow-paying
customer or a bad debt could wreck a UK exporter’s
Of the major overseas markets that UK companies in the
Atradius survey traded in, four regions had seen both an
extension in payment terms and an increase in overdue
51% of UK businesses offer 60 day-payment terms, up from 45% in 2002
Average number of overdue days rose to 28 days, up
from 22 days in 2002
South East Asia and Far East
43% of UK businesses offer 60 day-payment terms, up
from 36% in 2002
Average number of overdue days rose to 53 days, up
from 51 days in 2002
The Atradius Payment Practices Barometer – research
carried out among 1,200 businesses across Europe –
found that 42% of all European companies believe
that payment practices in the UK are ‘poor’ or
‘average’. Only Italy has a lower score
Middle East and North Africa
42% of UK businesses offer 60 day-payment terms, up
from 33% in 2002
Average number of overdue days rose to 37 days, up
from 22 days in 2002
Rest of Africa
31% of UK businesses offer 60 day-payment terms, up
from 10% in 2002
Average number of overdue days rose to 42 days, up
from 41 days in 2002
However, it seems British businesses have partly
themselves to blame for fostering a culture of slow and
poor payment as they are considered to be some of the
worst payers in Europe.
The Atradius payment practices barometer – research
carried out among 1,200 businesses across Europe – found
that 42% of all European companies believe that payment
practices in the UK are ‘poor’ or ‘average’. Only Italy
has a lower score of the 12 countries rated, with 64% of
European businesses saying the country was ‘poor’ or
‘average’ with payments.
The UK also has a reputation for delaying payment, with
33% of European businesses saying they experience
payment delays from British customers ‘very frequently’
or ‘rather frequently’. Again only Italy scored a worse
rating, with 45% of businesses saying they experience
delays from Italians ‘very frequently’ or ‘rather
European businesses told Atradius that UK firms usually
take an average of 63 days to settle their debts, with
only Italy taking longer at 74 days. Ironically, even
British companies believe businesses here are poor
payers – 41% of local firms say payment practices in the
UK are “poor” or “average”.
According to the Atradius barometer, 15% of all the
European firms surveyed say the UK’s payment practices
have worsened over the last six months, again the second
worst track record after Italy with 19%.
When it comes to defaults, Britain yet again performs
poorly, with 4% of European firms saying they have
suffered a bad debt from a British customer either ‘very
frequently’ or ‘rather frequently’. Italy is once again
bottom with 5% of suppliers recording unpaid bills “very
frequently” or “rather frequently” from the country.
“Poor payment practices seem to be a cultural issue for
British businesses as we are the only country where the
internal perception is consistent with our international
reputation,” says Clark. “If UK firms want better
cashflow they need to improve their entire payment
practices, and that means chasing up their customers and
settling their own bills more quickly.”
Interestingly Germany and the Netherlands have some of
the best payment reputations in Europe and are more
proactive than the UK in protecting themselves from
payment risks. Atradius found that 79% of firms in both
countries take steps to reduce the risk of bad debts,
compared with 70% of British companies.
Credit insurance is the most popular measure, according
to 29% of all European businesses surveyed. The British
are the third biggest users of credit insurance at 33%,
with Germany ahead at 36% of all businesses. Credit
insurance is actually the second most popular protection
tool in Germany, as 37% of firms use advance payment or
cash as a means of protecting themselves against bad
Private medical insurance and health &
wellbeing for smaller businesses – what's the point?
a business, especially a small or new one, requires more
hat changes than there are days in a year. One minute we
have our finance hat on, the next it‘s personnel, then
health and safety and probably salesman too. So when we
are told relentlessly that we must think about staff
health and wellbeing, let‘s cut to the chase: are there
real tangible business benefits? Does this simply mean
private medical insurance? And who‘s going to pay for it
These are very valid questions. The business case for
health and wellbeing support is certainly well
established among larger businesses, but there has
always been concern that smaller companies may not see
the same benefit. Budgets can be generally tighter in
small and growing firms so costs such as private medical
insurance may seem like a luxury early on. At Standard
Life Healthcare we set out a while back to establish
what benefits small business owners saw in supporting
staff health and wellbeing, and then decided to
translate that into really affordable support – but more
on that later.
Between December last year and January of 2007 we asked
more than 300 owners of small businesses what they
thought about business healthcare. More than 98 per cent
said that healthier, happier employees made better
employees and six out of ten bosses encouraged staff to
lead healthier lifestyles. In fact, eight out of ten
said that they should be directly involved in supporting
staff health and wellbeing.
It seems though that for many people, the biggest
barriers to doing something about building a healthier
workforce are perceptions about cost and other
priorities. That‘s why only one in ten actually has in
place a formal prevention and protection programme for
healthcare. But what exactly constitutes a health and
The business case for health and wellbeing support
is certainly well established among larger
businesses, but there has always been concern that
smaller companies may not see the same benefit
At the heart of health and wellbeing support at work,
private medical insurance (PMI) is the strongest form of
protection for when something does go wrong with
someone‘s health. Certainly so if they are a key
employee or if business will be disrupted by their
absence. It helps bosses manage workflow; in fact in our
survey nearly three out of four said that was an
important benefit of PMI. But what else should companies
think about in terms of health and wellbeing at work?
Apart from comprehensive medical insurance there are
also smaller benefits such as dental care - which can
help staff avoid short notice absences, or long waits
for dental appointments. And as anyone who‘s experienced
dental pain that can‘t be treated straight away will
know, anything that will make it better will make you
happier! You can also think about cash plans that
provide money for the extra expenses often incurred by
people when they are ill. And there are services that
can check a potential employee‘s health history and make
recommendations so that you can still get the best from
them, and - crucially - stay within the law.
Something that is really catching on with companies of
all sizes is preventive health services. These can be
actual services, such as all-over health screens at a
leading hospital group, or they can be virtual, such as
online health and wellbeing services that offer tips,
assessments, health, diet and exercise advice. Some
services even allow employees to speak to a GP or nurse
at any time of the day or night, sometimes just for
reassurance, but often helping to avoid time off work
for an unnecessary appointment with their own doctor.
While it‘s becoming accepted that there is a case for
doing some if not all of the above – more than three in
four bosses said that staff PMI alone would make them a
more attractive employer – you can‘t be all things to
all people, but there is a duty of care on employers
that includes workplace related wellbeing that can‘t be
The key to ensuring that you honour your legal
obligations as an employer, attract and retain staff
with good benefits and avoid loss of production through
sickness is to set a budget, no matter how small, and
build a list of what concerns you – with your biggest
worries and obligations at the top. That way you can
maybe start with some medical insurance now, and know
that when you can extend your budget you can add in
health screens or pre-employment health checks. You will
find products that suit even the most limited of budgets
and if you shop around or use a specialist intermediary
you will often get extras included, such as GP helplines.
If you want to know what other business owners and
managers think about health and wellbeing in the
workplace, please visit standardlifehealthcare.co.uk
for a full report on this topic. You will find that the
benefits of health and wellbeing at work, and private
medical insurance in particular, are more tangible than
they first look. It was our research among bosses that
showed that to us, so taking a few moments to find out
more might be a better business investment than you
might have thought.
Is your company's insurance up to scratch?
Just 18% of small companies have employment
practices liability insurance in place, despite the fact that the
number of tribunals is expected to rise, a new survey claims
majority of small companies are leaving themselves open to
footing the potentially crippling bill of legal action brought
by employees by failing to have adequate insurance in place.
According to the results of new research,
fewer than one in five (18%) small firms has employment
practices liability insurance in place – which protects
companies against the cost of lawsuits brought by staff –
despite the fact that new employment legislation means a
flurry of cases is expected over the next couple of years.
The survey by Hiscox also found that just
15% of company owners have directors’ and officers’ insurance,
which aims to protect owners from personal claims brought
against them in their role as director of a company.
However, nearly three in five small firms
(59%) are spending more time looking at risk management issues
than they did two years ago, while 70% believe they are more
likely to be subjected to a frivolous legal claim due to the
rise of a ‘no-win, no fee’ legal culture.
“While firms are increasingly viewing
risk management as an important tool in their business
armoury, the survey reveals some significant gaps in the level
of insurance cover they have, particularly in areas such as
directors and officers’ insurance and employment practices
liability insurance,” said Gary Head, professions underwriting
director at Hiscox.
While firms are increasingly viewing risk management as an
important tool in their business armoury, the survey
reveals some significant gaps in the level of insurance
cover they have
“The potential cost from employee
discrimination claims or other lawsuits is enormous, and these
products are designed specifically for such eventualities,” he
The most common insurance policies taken
out by small firms, according to Hiscox, are:
1. Public liability (80%)
2. Office contents and computers
3. Employers’ liability (66%)
4. Professional indemnity (59%)
5. Buildings (58%)
6. Motor (52%)
7. Portable equipment (49%)
8. Legal expenses (46%)
9. Business interruption/loss of
10. Consequential loss (30%)
11. Health (28%)
12. Product liability (25%)
13. Travel (22%)
14. EPLI (18%)
15. D&O (15%)
The survey added that 10% of small
businesses have suffered financially in the past because of a
loss that wasn’t insured, with the average loss being £14,400.
We asked Iain McMillan from Standard Life
Healthcare, Gil Baldwin from Norwich Union and Ceridian's Paul
Avis how small companies can reduce workplace absence
McMillan, sales director, Standard Life Healthcare
There‘s no doubt that staff being away from work causes
disruption. And it‘s almost certain that it costs businesses money
too. But if people are sick they‘re sick, aren‘t they? Unless
anyone‘s saying that people are taking time off when they
And is it more difficult in smaller
businesses where people all know each other and bosses and workers
may be friends or even be family? The reality is that much of the
time that employees take off sick is justified, but there is much
that can be avoided, or better managed and reduced. But how?
Sickness can be categorised in several ways
and the starting point is identifying potential risks before they
happen. Pre-employment questionnaires will help you see if someone
has a health issue, and with the right advice you can make the
changes needed to ensure you avoid unnecessary risks and meet the
requirements of the Disability Discrimination Act. These
questionnaires generally form part of a service called
occupational health, which can also include helping you to manage
any health issues that might arise after people join you. Our
research shows that people would value talking to a qualified
person rather than to one of their own managers if they had a
health issue; this is something that‘s worth knowing and could
save embarrassment on all sides.
Once people have joined the company you can
help them maintain their wellbeing. Most bosses think they should
fulfil that role, and most employees would welcome it. You can do
this by creating a healthy workplace: in other words encouraging
healthy eating by making sure the right foods are available, even
if it‘s just a bowl of fresh fruit, promoting exercise and
reducing stress. There are great online systems to help too. And
of course there‘s always company private medical insurance, which
will make sure that people are treated promptly and can get back
to work as soon as they are able to. Services such as being able
to speak to a GP by telephone at any time of day or night can help
workers avoid long waits for face-to-face consultations, because
often a reassuring chat with a GP on the phone is all they need.
There‘s already much to worry about when
running a business, so newer, smarter company private medical
insurance can have much of the above benefits built in or added on
to suit. We‘ve recently conducted a lot of research into what
people and bosses think about health and wellbeing and you can now
view the published results in a downloadable PDF as part of the
Standard Life annual Attitudes to Healthcare survey at
Baldwin, managing director, Norwich Union Healthcare
According to the latest Chartered Institute of Personnel and
Development (CIPD) survey, sickness absence costs employers an
average of £598 per employee every year. It also reveals that
absence costs employers eight working days for every member of
staff, which equates to 3.5% of working time.
The evidence speaks for itself: workplace
absence is bad for business. It sounds obvious but the effects of
absence affect our productivity, profitability and reach well
beyond the bottom line. The effects on the morale of staff left to
cope with extra workloads due to sickness absence can be
understandably detrimental and, for smaller companies, these
pressures on the rest of team can be particularly demanding.
Unfortunately, many employers, albeit
grudgingly, accept absence as an inevitable aspect of human
resourcing. But whether it‘s a bout of serious flu or a planned ’sickie‘,
there is still plenty that we can do to tackle the issue, manage
it and, ultimately, reduce it.
By managing absence effectively, you‘ll boast
a healthier, more profitable workforce, ease an already
over-burdened NHS service and, hopefully, change the way the whole
workforce views the absence culture too.
By taking a step-by-step approach, absence
can be measured to see how much time is lost, by who and where it
occurs most. The first steps are to monitor absence, keep
attendance records, communicate with employees concerned and
ensure they are told if the absence levels are putting their job
The next steps are to reduce absence levels
by focusing on work conditions, employment relations, health and
safety and flexible working arrangements. You could also introduce
an occupational health programme which places the emphasis on
prevention rather than cure.
Occupational health services range from
complementary therapies, ergonomics, screening, fitness testing,
lifestyle assessment, drug and alcohol testing, kinetics, on-site
occupational health nursing, CHD and cancer risk appraisal and
psychometric testing to stress management, counselling services
and vocational rehabilitation. This type of programme could also
include health surveillance and pro-active absence and sickness
management but it must be tailored to suit your organisation and
budget. And despite the initial costs, investing in an
occupational health programme is proving for many to be money well
You could also consider private health cover
as a pro-active move towards managing absence. Norwich Union
Healthcare, for example, has taken an innovative approach to staff
health and wellbeing within its Personal Health Manager service:
an online and telephone medical service providing professional
advice and information 24 hours a day, 365 days a year that comes
free with all Norwich Union private health cover products.
We also offer occupational health packages
comprising a programme of services that can be tailored to suit
the needs of any business. With a range of services such as health
screening and pre-employment medicals to wellness and medical case
management and flu jabs, any plan can be designed to help
businesses prevent sickness absence and get people back to work
more quickly. There‘s even an employee assistance programme that
offers round-the-clock help from qualified counsellors to help
employees deal with their personal issues and prevent them from
adversely affecting their performance at work.
So whether you‘re working on prevention or
cure, there is much that can be done to tackle the issue of
absence and change the way the whole workforce views it – and that
will make everyone feel better.
Avis, corporate development manager, Ceridian
There are three simple steps to managing absence: get your absence
policy/procedure right, train your line managers to own the
problem and be motivated in this arena and then get someone else
to take the calls and back this with management, not monitoring,
software. This inexpensive approach is proven to get most
organisations running at 1-2% absence rates, routinely gets a ten
to 20 times return on investment in year one (this is sustained
and sometimes, with insurance premium reductions, can be even
greater) and increases employee satisfaction.
An absence policy needs to have the right
triggers covering days lost, absence incidences, weekend frequency
and so on. This will ensure that persistent short-term absence
offenders (those who show either absence indifference or the more
malicious entitlement mentality) are found out and managed from
that point. There should also be a clearly defined programme of
events for prolonged absences, such as return-to-work meetings or
forms to fill in on returning; at day 14 a face-to-face meeting
with a manager/HR; at day 28 an occupational health referral; and
at week six a group income protection claim form.
Managers should be trained as disability
discrimination legislation can mean unlimited employee settlements
and increasing employer liability insurance costs. Specifically
owning the absence issue is a challenge as some will see this as
an occupational health (OH) or HR task. Ownership is best achieved
with disability compliance and awareness training to identify what
the sick/disabled person may be feeling. Procedural skills such as
how to conduct a return-to-work or absence management interview
(post-policy breach) provide tactical skills.
While the policy and training is where most
organisations stop, it is becoming more routine to have a third
party take absence notification calls. Employees are more honest,
data accuracy increases and benefits such as EAPs and private
medical insurance are optimised on day one. Once the initial call
is over, the IT system should then provide a system of prompts
(email, forms) for the different stakeholders to get them involved
at the optimum time. You should do this now! This should include
all benefits (such as private medical, income protection),
services (such as occupational health and health and safety
policy) as well as policy-wording enforcement. By integrating
these into a seamless system, best practice absence management
becomes routine rather than a chore.
Do you have a sickness policy?
A business advice survey by Croner reveals an
alarming gap between what employers and employees count as an
acceptable reason to call in sick, which is partly fuelled by a
failure to implement and maintain staff sickness policies
firms and business startups need to ensure they have a company
sickness policy and improve the way they communicate it to
their workforce if they are to get on top of the problem of
That‘s according to a business advice
survey by workplace consultancy Croner, which reveals a wide
discrepancy in between what employers and employees view as
acceptable reasons to call in sick.
The business advice survey found that 91%
of employers felt that cold and flu was a suitable reason, as
opposed to 81% of employees. Similarly, 77% of employers
considered migraines to be a reasonable reason for calling in
sick compared to 65% of employees.
The business advice research also claimed
that one in three staff exaggerate sickness to get time off
work, suggesting that as well as having to cope with
fraudulent cases employers are failing to let their employees
know what is an acceptable reason for failing to come into the
“The business advice surveys have
highlighted a real discrepancy over what employers and
employees believe to be acceptable reasons for calling in
sick,” said Gillian Dowling, employment technical consultant
Employers should implement a comprehensive sickness policy
which should clearly set out the procedures for recording
and reporting sickness absence and managing short and
“Employers should implement a
comprehensive sickness policy which should clearly set out the
procedures for recording and reporting sickness absence and
managing short and long-term absence,” she said. “This policy
should be communicated to all employees at suitable times, for
example when a new employee attends an induction.
“Well thought-out and communicated
sickness policies will not only reduce unauthorised absences,
they will have a positive effect on team morale and the
overall health and wellbeing in the workplace, which will
ultimately boost productivity,” added Dowling.
Croner offers the following business
advice tips on how to create an effective sickness absence
Give primary responsibility for sickness absence to
senior managers or HR managers
Keep relevant records
Consider improving employment conditions to reduce
workplace stress and accidents, which are often a root cause
of sickness absence
Consider improving physical working conditions,
ergonomic factors in workplace design and health and safety
Design jobs to give motivation and provide job
Provide proper induction and training
Check that policies on equal opportunities and
discrimination are in place and upheld
Consider requiring absent employees to phone in by a
given time on each day of absence
Notify employees on requirements for reporting sickness
Meet with employees in an attempt to resolve short-term
and long-term absentee issues and continue to communicate
with the employee to gauge the seriousness of long term
absence in business
Ensure that senior managers, line managers and
supervisors have the ability to conduct interviews and to
support staff as appropriate during and following sickness
Sickness in the UK accounts for 21m
working days a year, according to a business advice survey by
the Confederation of British Industry and insurance company
How marketing can grow your business
Developing an effective marketing strategy
can play a vital role in helping small businesses win more
customers and generate extra business. Business Link offers
advice on building a marketing campaign
small business owner believes he or she has something
that sets them apart from the competition. But that
won‘t translate into extra business or more customers if
you don‘t let people know about it.
According to Jonathan Hollow, head
of content at businesslink.gov.uk, marketing a product
or service effectively can play a key role in taking a
small business to the next level.
“If you are looking to grow or
develop your business then marketing will undoubtedly
play a very important role,” he says. “It offers the
opportunity to communicate with your customers, letting
them know why they should come to you over your
competitors. It should be one of your ongoing priorities
and a key part of your business plan, so make sure
marketing always stays at the top of your to-do list.
“Some people have a tendency to
think of marketing as advertising,” he adds. “In fact
marketing involves a number of activities, from market
research and customer needs analysis to direct selling
and sales promotions. Getting to grips with the
marketing tools available to your business and
understanding your needs and your budget will help you
stay ahead of the competition.”
Business Link offers the following
tips to help develop your marketing plan:
Some people have a tendency to think of marketing as
advertising. In fact marketing involves a number of
activities, from market research and customer needs
analysis to direct selling and sales promotions
Research and analyse both your customers‘ needs and your
business environment. This is the best way to make sure
you stay abreast of changes that can effect your
business and start developing your marketing strategy
Analysing your market
One of the most straightforward and effective ways of
doing this is by carrying out a PEST analysis. This
research method looks at political and legal changes,
economics factors, social factors, and technological
changes to give you an overview of your business
Choosing your target
Think about who you want your marketing to target. Are
you on the hunt for new customers or do you want to
consolidate and develop your relationships with existing
customers? This is an important stage in developing the
thinking behind your marketing strategy and will help
you focus your future activity
Casting your net
Think as broadly as possible so you don‘t miss any
potential opportunities. Instead of just considering the
general public, consider dedicating marketing activity
towards potential niche markets, as well as the
Staying on track
When developing your marketing plan, it is important to
set out objectives. However, make sure your marketing
objectives are SMART; Specific, Measurable, Achievable,
Realistic and Timed. They must also be linked in to your
overall business strategy and goals
Consider your options
Having done your research, and consequently having an
understanding of where you are and where you want to be,
think about how you are going to reach your target
audience. For wider reach, advertising could be an
option, while a leaflet drop may work best in your local
Focus your tactics
A good way of concentrating your marketing tactics is by
addressing four main areas. Often known as the four Ps
– product, pricing, place and promotion – these will add
structure to your plan to help you meet your objectives
Don‘t cut corners
Once you have decided to get your marketing activity
underway don‘t be tempted to save money by sacrificing
quality. Do collect competitive quotes from suppliers,
but if your plan is too costly try and tailor it further
to suit your budget
Pitfalls to avoid when
developing a marketing strategy:
Do not make assumptions on what customers want,
Do not base your strategy around competing on
Don‘t focus on a small customer group; more
customer groups will provide more opportunities
Try not to expand too quickly
Don‘t forget to scrutinise the competition
How to keep your cash flowing
The majority of businesses that fail do so
because they simply run out of money. Andrew Cooper from
Business Link West Midlands offers the following tips on how
to keep your cashflow healthy
a healthy cashflow is a great indicator of your
business’ success. A business may be able to survive for
a short time without sales or profits, but without cash
it will certainly struggle.
Although it may sound obvious, cash
is not simply coins and notes. In financial terms, it
includes current accounts, short-term deposits, bank
overdrafts and short-term loans. Cash is the measure of
your business’ ability to pay its bills on a regular
basis, be it rent or salaries. This, of course, depends
on the timing and amounts of cash moving in and out of
your business: your cashflow.
Monitoring and understanding your
cashflow will help you make business decisions and spot
any pitfalls before they become a serious issue. To
improve your cashflow and help your business stay on
track, think about the following:
Be realistic. Don’t say yes to a
contract just because it’s profitable. Remember, if
you don’t have available cash to pay your staff and
suppliers when providing the product or services, you
will damage both your cashflow and reputation
Keep watch. To stave away a
cashflow meltdown, update your forecasts and plans
regularly and incorporate warning signals into your
cashflow forecast. If there are any discrepancies,
think about why. It could be a one-off, a continuing
trend or even the impact of a new competitor. If you
are getting too close to your bank overdraft, this
should set off alarm bells and trigger action from you
to return cash level to normal
Monitor cash outflows. If
balancing your cashflow is challenging, consider
speaking to your bank and suppliers to see if you can
re-arrange the regular cash outflows for a more
Chase your cash. To improve your
cash inflows, chase debts promptly and firmly when
they occur. It may also be possible to ask your
suppliers for extended credit terms
Encourage early payment. To
encourage customers to pay earlier, consider providing
discounts and/or special product offers for prompt
If you are registered for VAT, consider buying
major items at the end of the VAT period. This
means that you can offset the VAT on the purchased
items against the VAT you charge on your sales
Empty the stock room. Try to keep
your stock levels to a minimum by forecasting demand
from your customers more accurately. Aim to develop
closer relationships with your suppliers, shortening
turnaround time for your orders
Make your assets flexible.
Initially it might be wise to lease equipment instead
of buying, as this will reduce your cash outflow and
make your assets more flexible
Contingency planning. Always have
a contingency plan in place with a minimum amount of
cash in your business account. Three months’
expenditure is commonly recommended. This can be used
if you find yourself in a tight financial spot
Improve business performance. No
matter how effective your negotiations with customers
and suppliers, poor business practices can put your
cashflow at risk. Look out for poor credit controls,
ineffective marketing and ordering services, and
inadequate supplier management
Time your investments. If you are
registered for VAT, consider buying major items at the
end of the VAT period. This means that you can offset
the VAT on the purchased items against the VAT you
charge on your sales, improving your cashflow
Outsourcing. If managing your
invoices is becoming prohibitively costly in terms of
time and response rate, you may want to consider
outsourcing to a third party. They will then buy your
invoices from you, taking a percentage for themselves
and returning the remainder
Why you need an expenses system
Only one in two small companies and business
startups has a formal expenses policy in place, leaving them open
to errors and abuse, according to research commissioned by
Post Date: 01/05/2007
just over half (51%) of small companies and business startups
have a formal expenses policy in place, leaving them open to
fraudulent and unnecessary spending, a business advice survey
by independent research company Loudhouse suggests.
The study, commissioned by American
Express, suggests that 48% of small company employees believe
they claim more expenses now than a year ago, with the average
monthly claim now £119.
There are substantial regional
differences in the amounts of money claimed, however, with
Londoners saying they claim just £95 a month compared to £140
in the north-east.
The business advice report suggests that
companies that fail to keep track on employee expenses leave
themselves open to abuse or errors. It found that 60% of
employees said they were able to claim expenses without
receipts at least some of the time, while nearly a fifth (18%)
thought it was acceptable to exaggerate claims and 14% admit
to having done so.
Over half (61%) thought people became
more lax in their attitude towards employee expenses the
longer they have been with a company.
“It is important that companies
understand the value of implementing a formal expense
management programme,” said Brendan Walsh, senior vice
president at American Express Commercial Card. “By monitoring
and analysing employee spending, businesses can piece together
a complete picture of company expenditure and begin to
negotiate better deals with suppliers, as well as stamp out
any unauthorised spending.”
It is understandable that employees will sometimes have
differing attitudes to spending the company’s money but
employers need to encourage policy compliance among
employees to make savings
The business advice survey also revealed
that while the majority of UK workers said they would treat
company money in the same way as their own, 79% contradicted
themselves when putting this into practice.
“This attitude of employees towards
spending company money clearly demonstrates the need for small
businesses and business startups to take tighter control over
their expense management policies,” added Walsh. “It is
understandable that employees will sometimes have differing
attitudes to spending the company’s money but employers need
to encourage policy compliance among employees to make
But there was some good news for
companies that fail to keep a grip on employee expenses, with
82% of staff saying they thought it was unacceptable to
FPB: Shop around for loan deals
Interest rates are now at a seven-year high but
there are signs that inflation may be coming back under control,
raising the spectre that further rises may not be needed
Post Date: 11/06/2007
businesses should shop around to get the best fixed-rate loans
and take their time to get the right deal, the Forum of
Private Business has warned.
With interest rates at their highest
level for seven years and expected to rise further during the
remainder of 2007, the small business lobby group is advising
companies to make sure they get the best possible rate when
applying for a business loan.
According to Frank Peck, the
organisation‘s economic adviser to the FPB and professor of
regional economic development at the University of Central
Lancashire, further interest rates hikes could restrict the
growth of small companies.
“The problem with further rate rises is
that uncertainty discourages investment, particularly for the
expansion of smaller businesses who may have worries about the
increased cost of borrowing,” he said. “It is much more
difficult for smaller firms to absorb short term variations in
The problem with further rate rises is
that uncertainty discourages investment, particularly for
the expansion of smaller businesses who may have worries
about the increased cost of borrowing
But he added that there were signs in
April that inflation had dropped, meaning that interest rates
could yet remain on hold.
“What is interesting about the May rise
in interest rates to 5.5% is that the decision of the MPC was
unanimous, whereas meetings earlier in the year involved split
decisions,” said Peck. “The reason for this, quite simply, is
that inflation unexpectedly rose in March to 3.1%, moving well
away from the target for the Treasury.
“However, we now have the April inflation
figure which shows a drop to 2.8%, suggesting that previous
rises in interest rates are having an effect,” he added. “Much
depends on whether monetary policy committee members think
they have done enough already and wait to see what happens
when the May figures are published.”
The Bank of England‘s monetary policy
committee voted to keep rates at 5.5% in June.
Why you need a business continuity plan
Companies need to consider the impact of a
disaster or terrorist attack on their staff when developing
business continuity plans, the Chartered Management Institute
Post Date: 20/03/2007
are still not doing enough to combat the threat of unforeseen
disasters such as power cuts, storms, fires, floods and
terrorist attacks to their company, the Chartered Management
Institute (CMI) has warned.
According to the organisation‘s annual
business continuity management survey, under half the 1,257
companies polled had any kind of business continuity plan
despite expressing fears that such incidents could see them
deprived of key staff and lose IT systems and files.
Small companies were the least likely to
have a business continuity plan, with just 34% having put
measures in place to deal with such threats, a figure that
rose to 42% for medium-sized companies and an average of 48%
when large organisations were also included.
Despite this, 73% of those questioned
thought business continuity was an important concern for
The CMI is warning businesses to put in
place procedures that will protect the safety of their staff
and reassure them that such an event would not deprive them of
Unless organisations balance the need to safeguard
buildings with the need to secure their workforce, any
attempt at business continuity management will remain
unfinished and inadequate
“Companies need to work out what the key
issues are that will stop them working,” said Jo Causon,
director of marketing and corporate affairs at the CMI.
“Unless organisations balance the need to safeguard buildings
with the need to secure their workforce, any attempt at
business continuity management will remain unfinished and
There were also notable differences in
how companies that did possess a business continuity plan
maintained them, the research found. Half those firms
practised the plans at least once a year but a third of
organisations didn‘t maintain them at all and 15% were aware
of problems with the plans but had done nothing about it.
More than half of those managers surveyed
claimed their organisation had developed a plan to counter the
risk of a bird flu epidemic, the research found, but such
plans tended to underestimate the likely impact on their
workforce and society in general.
Entrepreneurs behind women wealth boom
Research claims there will be more female
entrepreneurs by 2020 than male ones as the number of women
running their own business continues to grow
Post Date: 11/06/2007
growth in the number of female-led businesses means
there will be more women millionaires than males ones by
2020, according to the findings of the Barclays Wealth
Successful entrepreneurs such as
Penny Streeter (pictured), who owns round-the-clock
nursing agency Ambition 24hours, are behind the increase
in female wealth. Streeter‘s company turned over £45m in
the UK last year with a global figure of £70m and the
Sunday Times Rich List estimates her personal
wealth at £75m.
The poll found that more than eight
out of 10 women with investable assets of more than
£100,000 have made their money through earnings and
owning businesses, with more traditional methods such as
divorce or inheritance becoming less common.
“While the more traditional drivers
of wealth still play a part, they are no longer the
dominant forces they once were,” said Amy Nauikas,
managing director of Barclays Wealth. “Women are more
thoughtful and purpose-driven when it comes to
investing, whereas men tend to look for income and
growth,” she added.
Women with more money were also
likely to be happier, the research suggested, with 80%
of women with assets of over £500,000 saying wealth had
resulted in greater happiness as well as more leisure
time, improved health and job satisfaction.
The total wealth of the UK‘s richest women is
already £3.27bn, while the number of women on the
Sunday Times Rich List increased from 81 in 2006 to
92 this year
The Barclays Wealth Management
survey estimates women will account for 35% of all
millionaires by 2010 and will reach 53% by 2020.
The total wealth of the UK‘s
richest women is already £3.27bn, while the number of
women on the Sunday Times Rich List increased
from 81 in 2006 to 92 this year.
Meanwhile, a separate poll by
Datamonitor confirms the gulf between male and female
entrepreneurs is narrowing. The average male millionaire
was worth £2.71m in 1998 compared to £1.28m for women;
by 2006 this had closed to £2.96m and £1.97m.
How can your customers pay?
Ian Rutland, head of business development at
WorldPay Ltd, cuts through the card payment industry jargon
Post Date: 15/05/2007
a new business presents a bewildering range of
challenges. Most new retailers want to focus on their
business fundamentals – the products they’re selling,
their premises and in the case of eCommerce their
website. At the same time, it’s crucial for a business
to be able to be able to accept payments from a wide
variety of customers – that means accepting credit and
debit cards safely and securely.
For those who are new to the card payment industry there
is a staggering array of jargon. In eCommerce in
particular new retailers have to quickly get up to speed
with detailed questions and choices. The effort is worth
it – as Europe’s largest eCommerce economy with 73% of
consumers having shopped online every 3 months, the UK
represents a fantastic market for the budding Internet
One big reason for the success of online retailing in
the UK is that most net users have both credit and debit
cards and both can be used to pay for online shopping.
£80 billion of consumer spending is either on or
influenced by the internet, of which £30 billion of
retail spending is online and £20 billion on other
consumer spending is online. (IMRG)
There’s a wide range of companies who can help you trade
on the internet. Different solutions will suit different
sorts of business and as your company grows it may well
make sense to change between the solution you need.
To accept card payments you will need two things - an
Internet Merchant Account from a bank and a processing
connection from a Payment Service Provider. The Internet
Merchant Account (IMA) is the facility which allows you
to accept card payments. A Payment Service Provider (PSP)
will enable you to connect to the bank to process the
Banks will set out a number of requirements to qualify
for an Internet Merchant Account and these processes can
take a while to complete. It’s important to apply early
in your business set up to make sure everything is ready
An alternative option for those just starting out in business is to
select a combination account like the WorldDirect
solution offered by WorldPay. Because WorldPay defer
funds to merchants they can quickly and easily set up
most businesses with both payment processing and an
Internet Merchant Account. That means you can start
taking payments very quickly. WorldDirect is perfect for
small and start-up businesses that may struggle to
obtain an Internet Merchant Account from their bank.
Additionally it is a very simple way to accept
Banks will set out a number of requirements to
qualify for an Internet Merchant Account and these
processes can take a while to complete. It’s
important to apply early in your business set up to
make sure everything is ready in time
The specific costs of the service will depend on the
business’ average transaction value, transaction
frequency, perceived security risk, exposure level,
online turnover and how long the company has been
A prime factor in the success of your online store is
the shopping cart software you use to sell your services
It is important to select a payment service which links
to the shopping cart software you’ve selected. Solutions
such as WorldDirect are connected to many of the leading
shopping cart and store building products. That means
that once your account is set up and your store is
populated with the goods and services you wish to sell
you can begin to accept cards immediately. Your chosen
PSP and shopping cart provider will offer full technical
support, software cartridges where appropriate, and
technical documentation to help you integrate your store
and your shopping cart package.
It is worth knowing that there are two main
integration models when planning for your business in
the short and medium term. These models are often
referred to as direct or invisible and redirect or
payment page, although you may hear a number of similar
The most suitable model for new businesses is the
payment page model. The shopping cart software will
forward consumers over to a set of checkout pages hosted
by the PSP. All the card details will be captured
directly by the PSP and at the end of the transaction
the consumer will be sent back to the retailer’s
website. Because the PSP is handling all of the
security, the pressure is taken off retailer to set up
secure card processing systems.
An invisible integration will mean that the consumer
never leaves the retailer’s website. Larger merchants
prefer this model as it means they can control
everything that the consumer sees, but such solutions
will mean the retailer has to invest heavily in IT and
Pay page Customization
For those using pay page integration, a range of
customisations are available. For instance WorldDirect’s
management system enables you to customise aspects of
the payment service that are visible to your customers,
Modifying the look-and-feel to match the branding
of your website
Taking payments in up to 144 different currencies
and customise the payment language to match the
language(s) of your website.
Adding and modifying the messages that are
presented to your customers when they are paying
online and in the confirmation emails they receive
after doing so.
You can opt to have consumers' payments processed
in 'real-time' (payments are automatically routed to
the appropriate bank for authorisation) or deferred
(you review your customers' orders and payment details
before they are processed). You can also opt to pass
order information from our payment system to your
inventory and stock management systems.
With a payment page integration, consumers card and
account details are captured on the PSP’s secure
servers, so you do not have to worry about maintaining a
system or keeping abreast of the latest payment or
Using sophisticated new encryption techniques and
fraud-prevention technologies, the solution offer
increasingly high levels of security enabling you to
spend more time focusing on your core business rather
than managing risk. Payment processing services supports
internationally recognised security checks including:
Card Verification Value (CVV2) – checking the
digits on the signature strip of the credit card
Verified by Visa and MasterCard SecureCode –
advanced systems for validating the identify of the
customer at transaction time
Address Verification Service (AVS) – checking the
address of consumers against the billing address of
the credit or debit card they use.
All these fraud control systems are valuable in
reducing fraud and the likelihood of receiving
chargebacks – where a consumer disputes a transaction.
Retailers should aim to read the information that their
bank provides about chargebacks as many new merchants
underestimate the effect fraud can have on their
Your PSP will almost certainly provide reporting systems
which enable you to review and control (e.g. refund) the
payment, settlement, and anti-fraud information we
process for you. These systems can be very useful in
tracking transactions and keeping a record of card
transactions and because they’re online, you can access
your accounts at any time.
So to give yourself the best chance to succeed it’s
important to select a payment provider that you trust
and which is suitable for your business. You should
check they can work with your chosen shopping cart of
provide a suitable integration model.
Deborah Meaden's arrival into the Dragons' Den
gave the television show a new cult figure. But is this new
species of dragon really like? Nick Martindale went to meet the
former Weststar Holidays owner
Post Date: 14/05/2007
have to hand it to the BBC. After two series with the
joviality of Simon Woodroffe, the meekness of Rachel Elnaugh
and even the tough arrogance of Doug Richards and Peter Jones,
the Dragons’ Den organisers really pulled it out of
the bag for the third series of the programme, broadcast this
In picking the hitherto little-known Deborah Meaden – ex-owner
of Weststar Holidays – the researchers finally wooed someone
worthy of the programme’s title. A dragon. A real,
old-fashioned school headmistress kind of dragon who made the
former King of the Den – the grumpy Glaswegian Duncan
Bannatyne – look more like a cowering kitten than a fully
fledged fire-breathing monster.
Described as ‘sour-faced’ and a ‘hatchet woman’ by The
Guardian (which she didn’t like, although she did like another
headline that simply read ‘Don’t f**k with the Meaden’), this
new addition to the den must be pretty much the last person
would-be entrepreneurs would choose to humiliate themselves in
front of on national television.
Or is she? Is it really fair that the nation now respects and
fears ‘the Meaden’ in equal measures on the basis of a heavily
edited television programme caught up in a prime-time ratings
war; a war incidentally which the BBC won hands-down, inspired
as much by their star dragon as anyone?
I would like to be thought of as firm but fair. But I
don't care who likes me or who doesn't like me. I don't
care how many people I upset as long as it's for the good
of the whole. And if I've got to make tough decisions,
then I'm going to make tough decisions
The short answer is yes. She even admits as much. She
recognises herself from the show, albeit watching through her
fingers in a darkened room with just her husband for company.
Perhaps more predictably, her staff recognise her too.
But that’s not the whole story by any means. For one thing,
Meaden is actually quite good company. She’s lively, chatty,
she even laughs at times (which would never make it through
the BBC editors). She’s also very fond of gestures. Arms fly,
fingers point, tails swish (metaphorical ones, anyway). But
when confined to a chair and surrounded by others who can give
her a run for her plentiful amount of money when it comes
listening to the sound of their own voice, all you’re left
with is the stony face that looks like it’s just been
subjected to an encounter with a removable toilet seat cover.
“I hate to say it but it is me,” she says. “It’s a
concentrated version of me but it is definitely me. I’ve asked
my friends and they say they have seen and heard me say all
those things that I do on camera. The only thing they say is
that I come across as sterner on television. I have a lot of
fun in business but I don’t think that really comes across in
One thing is for sure, though: you wouldn’t want to mess with
this particular dragon. I sailed close to the wind at least
once during our interview at the London Hilton Hotel, notably
when I put it to her that Elnaugh had said she felt she was
only in the first two series as a token woman and did she feel
the same (she felt the BBC had been looking for a woman but
disliked my use of the word ‘token’). “That implies ‘oh god,
we’ve got to find a woman, she’ll do’,” says Meaden. “I’m not
there as a token woman. I’m there, I hope, because I’m good at
what I do and I add something to the show. I’m a dragon in
She certainly is. In fact, you get the impression that even St
George may have had his work cut out to subdue this particular
dragon once someone had given her cage a quick shake. “I would
like to be thought of as firm but fair,” she says. “But I
don’t care who likes me or who doesn’t like me. I don’t care
how many people I upset as long as it’s for the good of the
whole. And if I’ve got to make tough decisions, then I’m going
to make tough decisions.
“At Weststar Holidays we had an absolute rule,” adds Meaden.
“I don’t care what mistakes anybody’s made, they had to tell
me about it. If they tried to cover it up and it turned into a
problem later, all hell would break loose. That’s when people
see my wrath: if they try to bullshit me or misrepresent me or
put spin on stuff. I won’t have it.”
She’s candid enough to realise that her way of doing business
has probably cost her somewhere along the line. “Even with my
friends I can be a bit too damned direct,” she admits. “As a
leader in a business, it was my job to get the best out of my
people. That meant that I ended up with very robust people
because I’m very robust myself. If I have a weakness, it’s
probably that I’ve lost some quite good people who didn’t
thrive in that environment and I didn’t temper my approach to
The making of Meaden
But Meaden’s take-it-or-leave-it, my-way-or-the-highway
approach is engrained in her character and it’s certainly no
charade put on for the benefit of staff or television cameras.
Nor is there any denying that it’s proved to be highly
effective over the years.
Meaden set up her first business – importing ceramic and glass
products from Italy – after leaving college, leaving behind a
three-month stint as a showroom model (no sniggering at the
back, please). But despite having sole agency rights, the
goods started appearing in other high street shops and,
without the finances for a legal fight, Meaden walked away and
took on a franchise in Somerset for Italian footwear and
clothing company Stefanel, one of the first in the UK.
“That was a great experience; it was great fun setting it up
and I learned a lot but I have a low boredom threshold and it
just turned into running a shop,” she says. “And I’m not too
happy about the franchising model. One of the strains in my
career has been about being in control of my own destiny and I
don’t like the constraints it puts on you. You’re making a lot
of money for someone else and there are an awful lot of rules
and regulations and, at the end of the day, it’s not really
So with a bit of experience but no real money, Meaden decided
to take up one of the concessions her parents then ran in the
Butlins and Haven holiday camp network, running a bingo hall
at Butlins site. “I learned more business lessons through that
than at any other point in my career,” she says. “You’ve got
to be very good because it’s a very social thing. If the
customers didn’t like you, they walked out and you could see
them go. That was a really good lesson to learn.”
But if it was the bingo halls of Butlins where Meaden learned
her trade, it was Weststar Holidays that became her stomping
ground. After leaving the world of bingo, Meaden became
general manager and then operations manager at the Bryson
Group – her parents’ company that ran the concessions – taking
responsibility initially for running the leisure side of a
holiday park in Minehead, Cornwall, and then for all the
group’s leisure activities and amusement arcades.
But, once more, it was the lack of control that bothered
Meaden – this time over the concessions from Butlins and Haven
on which the Bryson Group relied – and in 1993 she accepted an
invitation from her parents to become operations director at
Weststar, which had been set up by her parents five years
previously and then consisted of just two parks in Mullion and
Looe Bay. Within two years Meaden had become managing director
and the company embarked on a programme of expansion that saw
the number of parks expand to five by 1999.
“Holiday parks are now well-known products but at that stage
they were quite off-centre. We were one of the first to have
an indoor pool and also to develop entertainment from the
clubs so we were pretty cutting-edge,” says Meaden. “I’ve
always said that if you’re in business – whether at the low
end or the top end of the market – just be the best, so we set
out our stall to make Weststar the best holiday park provider
within its sector.”
Yet despite running a successful business, Meaden wanted more.
“I’d put all my eggs into that particular basket and I wanted
to see evidence that I would one day take control of the
company,” she explains. “So in 1997 I struck up negotiations
with my parents, saying ‘either I get to take over the
majority of this business or I’m going to spend my time doing
After two years of wrangling, they finally agreed to sell the
company and Meaden eventually secured the necessary funds to
take over the business, for which she paid a “very full
price”. Her mother disappeared from the business altogether,
while her father retained a non-executive director role.
“Succession is a difficult situation for families to deal with
so give my parents a great deal of credit for recognising that
what I was saying was absolutely right,” she says. “A lot of
family businesses have to bring something to boiling point
before it gets out on the table and that’s a recipe for
disaster. I had a very good experience of family businesses
because we were absolutely clear what was family and what was
business. Our whole approach was that if we looked after the
business, the business would take care of us.”
With Meaden finally at the helm and able to exercise her
entrepreneurial muscles, Weststar was gradually transformed
into what she describes as “a lean, mean fighting machine”.
The number of sites was reduced from five to three, selling a
plot in Riviera Bay, Cornwall, to her to sister and another
one in Looe also being sold off.
With three main sites – in Mullion Bay on the Lizard
peninsular, Looe Bay in Cornwall and Sandford Holiday Park in
South Dorset – all generating new business in a growing
marketplace on the back of quality but affordable holidays,
Weststar soon found itself the target of several takeover
approaches. A deal to sell in 2003 was aborted at midnight on
the day the contracts were meant to be signed when the buyers
reduced their price at the last minute and Meaden walked away.
But the whole process made Meaden think about exiting and in
2005 she finally sold the company to Phoenix Equity Partners
in a £33m deal.
Holiday parks are now
well-known products but at that stage they were quite
off-centre. We were one of the first to have an indoor
pool and also to develop entertainment from the clubs so
we were pretty cutting-edge
Meaden still retains a 23% stake in the business and a
non-executive director role that accounts for an average of
two days a week, a condition Phoenix insisted on as part of
the deal. She initially carried on in a quasi-marketing
director position but took a six-week break last November
after which she returned to concentrate on making
acquisitions, the first of which was Hayling Island in
Hampshire, bought for £13m earlier this year.
Den of equity
Meaden’s love for business, she says, is what gets her up in
the morning and she was all set to begin looking for start-up
companies that were in need of both investment and a bit of
mentoring when Dragons’ Den came calling. “You’ve got
a team of BBC researchers going out and looking for products
for you,” she explains. “I’ve seen products that I think are
bloody silly. But I’ve also seen, and have invested in some,
that I think are very good products and which I would never
have found in the outside world.”
She made a total of four investments in the first series of
Dragons’ Den – all with fellow dragon Theo Paphitis –
and would be interested in doing a second series as well. One
of these investments – the service station truck-washing firm
– fell through at a very late stage when the entrepreneur
decided to accept his bank’s offer of finance with no equity
involved, a decision Meaden describes as “bloody irritating”.
Meaden also invested in Ian Chamings’s MixAlbum company, a
music-download website that allows users to mix tracks; The
Nuts Poker League; and Coin metrics, a wireless revenue system
for fruit and arcade machines. She has also invested in a
market research company outside of the show.
“The people who I’ve invested in generally are entrepreneurs
who can say ‘this is what I want to do with this, these are
the numbers, this is the market, I’ve done the research and
that’s why this is going to sell’,” she says. “That, to me, is
the twist of an entrepreneur. To me, it’s not someone who’s
invented something and isn’t quite sure what to do with it.”
For Meaden, the most important thing when making an investment
is that the product actually works. That may sound obvious,
but many would-be entrepreneurs arrived in the den with
prototypes that either didn’t work or hadn’t been properly
tested. “You’ll see a few times on the programme when I say
‘great idea but I’ve got no idea whether it works so I’m not
investing’,” she says.
“You know a good product when you see it and you think ‘yes,
there’s a market here’. I would invest in a good product with
a bad person because I think you can bolster someone up,” she
adds. “But I would never invest in a good person with a bad
product because a good person will just waste their energies
trying to support what is a fundamentally bad idea. Good ideas
almost have a little bit of life of their own whereas bad
products just need to be allowed to die.”
Yet for all the dubious inventions Meaden and her fellow
dragons examined in a whirlwind two months – and there were
many – she remains upbeat about the UK’s claim to be a nation
of entrepreneurs. And the key for any business model remains
the same. “Demystify it. Simplify it. Keep in tune with what
is going on. I watch so many businesses become
over-complicated with layer upon layer of management,” she
“I think on Dragons’ Den I come over as quite a
practical person. I wouldn’t invest in that toilet seat
because I don’t want to have to hover my face over a toilet.
It’s a very practical reason and it’s very odd that when
people get into business and get removed from their customers
they forget all the obvious stuff and it all becomes figures
and theories. Just ask the simple questions: do customers want
this? Is there a market? Keep it simple.”
There’s no doubt that Meaden’s arrival in the den has raised
the temperature still further and contributed massively to the
continued success of this unlikely hit television show. But
for all the stern looks, the ‘I am not impressed’ faces and
the cool putdowns, there’s more to Meaden than meets the eye.
And when this particular dragon roars, you’d do well to
listen. If only from a distance.
He who dares, wins
Theo Paphitis is probably best known as one of the
dragons on Dragons‘ Den and the former chairman of Millwall
Football Club. But that‘s just the culmination of a lifetime‘s
work taking on businesses that others had left for dead. He tells
Nick Martindale how entrepreneurs can avoid the mistakes of others
and how he‘s found life in the public eye
Post Date: 10/05/2007
I arrive for my meeting with Theo Paphitis at his offices in
Hayes, on the outskirts of London, he’s out being driven
around in the latest Rolls Royce after the exclusive car
company identified him as the kind of person who might fancy
spending £350,000 on a new car.
They were wrong. “It just wasn’t me,” he explained later.
“That car says ‘look at me; I’m better than you’. The car I
drive is a BMW Series 7. It still costs a lot but to me that
just says ‘I’m successful’. I felt silly sitting in the back
of that car.”
Paphitis’ interpretation of cars reveals a lot about the way
he runs his businesses: no nonsense but highly successful.
Even in recent years when he has shot to fame firstly as
chairman of Millwall Football Club and more recently as one of
the more confrontational members of the BBC’s Dragons’ Den
investors, Paphitis has preferred to let his colleagues take
the limelight while he gets on with the job of making some
“Being chairman at Millwall is high profile in the football
fraternity and I thought that I was reasonably well known,” he
reflects. “But that was before I went on Dragons’ Den.
I can’t walk down the street when the show is running. We had
20% of the audience figures for the last series and that’s
incredible for a BBC2 programme.”
Paphitis’ profile may have increased dramatically over the
past three years but he’s still quietly going about what he’s
best at: turning around failing businesses, getting them back
on a secure footing and, at some point, selling them on. Late
last year he finalised a deal to sell lingerie chain Contessa
to the same private equity firm that bought La Senza from him
last summer for a combined figure in the region of £100m. “I
am no longer in women’s knickers,” he jokes.
I’ve often said that a lack of profits is like a cancer,
it kills you off very slowly. But a lack of cashflow is
like a heart attack because you can’t pay your bills, the
bank moves in and you’re bust. You’ve got to think ‘if I
do this, what are the consequences’?
His current portfolio includes the stationery chains Rymans
and Partners and Red Letter Days, the gift experience company
he bought with Peter Jones from their fellow dragon Rachel
Elnaugh in 2005 and which has proved to be one of his biggest
challenges to date. “It was probably the worst managed
business I ever got involved in,” he says. “We had to scale it
down to the profitable part of the business, identify its
market and prepare it for that. We’ve got the business back on
an even keel but we’ve still got work to do.”
In what should be a warning to any small business owner,
Paphitis believes the case of Red Letter Days is by no means
unique. This was, he says, a business with a strong brand that
had suffered from mis-management and neglect. “You have to
focus on the business and deal with the issues that come up,”
he warns. “Looking at it through rose-tinted glasses is not a
good way to run a business. Everything will go wrong at some
stage; it’s how you deal with that and plan for it that
matters. Focus on every single decision and how that will
affect the whole business.”
One of the major problems facing small companies, particularly
early on, is a lack of cashflow. But even this should be
anticipated, he claims. “A lack of cashflow doesn’t just
happen unless there’s some major disaster, in which case you
can’t do anything about it,” he says. “Your business plan will
show you the level of cashflow and you’ve got to deal with it
before it becomes a problem.
“I’ve often said that a lack of profits is like a cancer, it
kills you off very slowly,” he adds. “But a lack of cashflow
is like a heart attack because you can’t pay your bills, the
bank moves in and you’re bust. You’ve got to think ‘if I do
this, what are the consequences’?”
Paphitis firmly believes that to be a successful entrepreneur
requires a certain type of person. “There has to be something
in you,” he says. “It’s the entrepreneurial spirit: the
ability to take a risk and work without a safety net. Some
people can’t do that.”
He does, however, believe the government could do more to
encourage entrepreneurship in this country, and claims the
main reason why the climate for starting your own business has
improved in recent years is down to the arrival of new
technology such as the internet and broadband rather than any
“If you listen to the politicians, they’ll say it’s because of
the way they’re trying to help small businesses which is
absolute poppycock,” he says. “They’ve probably strangled more
businesses than they’ve helped.
“The government has got to just wake up and smell the coffee
because it strangles small businesses with red tape,” he adds.
“There have to be easier ways for small businesses to start up
and raise money. We should be using tax breaks or credits or
exemptions for small businesses to get them going. The
government will get its money back because if they’re
successful they’ll pay the tax. But there’s a lot of talk and
very little action.”
Paphitis and his fellow dragons can take some of the credit
for the current interest in running a business. The fourth
series of Dragons’ Den is currently being shown and
the programme has moved from one to two series a year. “A lot
of people have it inside them to run their own business and
it’s quite compelling to actually see other people’s ideas,”
he says. “The public don’t see that anywhere else, they just
wonder ‘how did he make it?’ This is the first time they’ve
really been able to see it.”
In his investments so far, Paphitis has found himself drawn to
partnering with former Weststar Holidays owner Deborah Meaden,
who he describes as “the most capable businesswoman I’ve ever
met”. He did once enter into a deal with Duncan Bannatyne
which later fell through although, not surprisingly given his
Red Letter Days experience, he lists Elnaugh as the only
dragon – past or present – who he would struggle to work with.
Partly in a bid to make the programme more appealing, the
quality of entrepreneur coming into the den varies
dramatically and Paphitis has administered candidates a severe
dressing down for what he perceives as a lack of preparation
on more than one occasion. “The cardinal sins are not knowing
your product, not doing your research and not having the
answers,” he says.
“We’re sitting there totally blind to what the proposal is so
if we can pick things up and they haven’t thought them
through, then it’s curtains. They’re living with it,” he says.
“The other sad thing is that people ask relatives and friends
what they think of their idea, and they aren’t the best people
to ask. They’ll always say nice things to you.”
He admits he’s had to find a way of dealing with the extra
commitments that have resulted from his investments in
up-and-coming entrepreneurs. He’s there for advice but
Paphitis won’t invest in anyone he thinks will take up too
much of his time. “I laugh when people say ‘I’m not after your
money, I’m after your expertise’,” he says. “And I say ‘well,
I won’t give you any money then’. But I’m not going to run
their business for them.’
But if any entrepreneurs are looking to follow Paphitis’ own
route to millionaire status, they’re likely to be
disappointed. “I didn’t just become a millionaire,” he says.
“You never get this feeling of being rich. It still hasn’t
happened for me. Sitting in that car made me feel very silly
because I didn’t feel like I belonged there.
“I made £10,000 and put it in the building society,” he
continues. “And for me that was a lot of money because I
constantly had overdrafts. But I don’t think I got to having
£100,000 in the bank for a long time. I might have got to
£50,000 but I always reinvested it into a business so I never
had it to use.”
Born in Cyprus in 1959, the family emigrated to the UK when
Paphitis was just six. After leaving school at the age of 16,
he began his career as a filing clerk at Lloyds of London
before picking up his first taste of the retail market as a
shop assistant for Watches of Switzerland.
“It was the first time I’d experienced the ‘them and us’
mentality between the workers and the head office,” he
recalls. “It was a very structured Are you being served? type
of organisation and you could see things that didn’t make
sense but you were powerless to change them.
“We also have a structured organisation in my companies but
I’m happy to listen to the shopfloor,” he adds. “We have a
conference every year when we all stay up until three or four
o’clock in the morning so, if they have the stamina and the
liver, staff can help themselves by putting a few beers down
them and telling us what they really think.”
Paphitis’ inability to conform to a traditional
employer-employee relationship meant he always felt he would
be better working off for himself. “I’m one of those people
who always has an opinion,” he explains. “Nine times out of 10
it’s right. That was there from school. So it became very
clear that I wasn’t the type of character who was going to
survive in any corporate environment.”
After working for Legal & General in financing property deals,
Paphitis set up his own consultancy called Surrey & Kent. But
it was when he agreed to sell this to, and become part-owner
of, Hanover Druce – a London-based commercial finance company
– that he started to expand from helping to finance property
deals to other non-asset-based lending, eventually investing
his own money in businesses he liked the look of.
“It was more businesses looking to survive rather than
expand,” he says. “I didn’t get to see those because they were
too easy pickings for the big boys. They were only interested
in showing me what in those days were called ‘the dogs’, where
the choice was to put them into receivership or find a way of
refinancing them. It then got to the situation where I’d say
‘well, I’ll buy that company’. But it’s about hard work,
commitment and dedication. I’m a very impatient person in lots
of ways but I’m very patient in business. I don’t just put my
money in and sell it tomorrow for a small fortune.”
But if Paphitis knew what he was doing in retail, it was a
whole different ball game – literally – when he decided to
take Millwall out of administration in 1997. “It’s a totally
different business,” he admits. “If you’ve got badly
performing employees here you put them on notice and you
performance-manage them out of the business. But you can’t do
that with football players. If you’ve got a lazy sod and who’s
good at getting his wages, you’ve had it. Agents fill young
men’s heads with rubbish, the FA was in turmoil and the
Football League was in a terrible state after ITV Digital went
“But Mrs P and I used to live in Peckham so it was our local
football club,” he explains. “If I hadn’t got involved the
club would have gone into liquidation and I let my heart rule
my head. But sometimes it’s good to let your heart rule your
head and I don’t regret it for one second. I had eight years
there and they were some of the best of my life.”
Under Paphitis’ stewardship – and like his other businesses –
Millwall gradually got back on its feet again. The club was
promoted to what is now the Championship in 2001 and went on
to reach the FA Cup final and qualify for European football
for the first time three years later. But there were also dark
days, notably the riots that followed Millwall’s playoff
defeat in 2002 and threatened to return the club to the dark
days of the 1980s and ruin the image Paphitis had worked so
hard to build up. For the first time he began to question why
he was there.
By 2005 Paphitis felt he could take the club no further and
owed it to his other businesses to give them more attention, a
process that eventually led to the sale of La Senza and
Contessa last year. Yet the decision to let the lingerie
stores go and retain the stationery businesses took many
analysts by surprise.
“Fashion businesses take up a lot of time. It’s a bit like the
football really. A lot of the time you have to be really
hands-on,” he explains. “I was a bit concerned about the
fashion market as well and I decided that the exciting
business was the one that was going to go and the
not-so-exciting business that was perhaps more stable was
going to stay.”
But if anyone thought being a millionaire entrepreneur was an
easy life, they should think again. Like Gordon Ramsey,
Paphitis regularly works 20-hour days, going out to dinner
functions at least four times a week and often not making it
home at all.
And if ‘Mrs P’ is hoping that by selling his majority stake in
Millwall and letting go of La Senza and Contessa she will see
more of her husband, she’s in for a nasty surprise. “The days
are there all day and the working week is a working week,” he
says. “So I work from first thing in the morning to last thing
at night. I try and get weekends off now and that’s another
reason why I let go of Millwall. But I kiss the missus and the
kids goodbye in the morning and then they won’t see me again
until the following morning.”
Paphitis is already plotting further acquisitions and admits
that “more than likely I will have to educate myself about a
sector that I know nothing about”. So, for a few weeks at
least, it looks like the closest his wife will get to him on a
week night will be watching BBC2.
Entrepreneur Q&A: Bill McGowan
Meticulous research, adequate finance and using
business plans for the purpose for which they were intended are
the secrets of entrepreneurial success, says Bill McGowan, founder
of Fastway Couriers
Post Date: 16/03/2007
made you decide to start your own business?
I wanted to create a financially secure future for myself and
my family. I had started a lot of businesses and sold them to
competitors and I decided that I wanted something that I could
take out of
and go global. I identified very early on that transport was a
sector that is always going to be in demand and I thought that
was the area I wanted to be in.
What has been the biggest
challenge to date?
In the early years the biggest challenge was finding enough
capital to keep developing and growing. I solved this by
inviting friends and family to take shareholdings in the
parent company. Later on I was able to buy them back but that
created another challenge because it stretched my personal
finances. Another key challenge has been to get franchisees to
adhere to and follow the Fastway system. Whenever a franchisee
gets into trouble it’s always because they’ve tried to change
What do you believe has been your
single greatest achievement?
Seeing people being able to earn a living from the Fastway
system. But I think it’s also been fantastic to see that we’ve
been able to keep growing sales and profits over the past 24
years and that we’ve emerged from a small, entrepreneurial
start-up company to a large corporate structure operating in
What key factors have made your
I think the franchise model is the key to our success. The
Fastway model is very complex in its entirety but if you break
it down to each of the franchisees you can see that all the
elements are complementary.
What effect has technology had on
In the last 10-12 years technology has had an enormous impact.
We’ve had to invest very heavily in technology since that time
to stay at the forefront and because we’re a low-cost operator
we had to develop software that was affordable. I think if we
had gone with the original technology that was coming out 10
or 12 years ago, it probably would have been the death knell
of our business. Right now in the
will be rolling out very shortly our track-and-trace scanners
which give the customers real-time information on the
internet. But in every country we’re always rolling out new
How would you describe your
I’m a very direct person. I’m very focused and I know what I
want to achieve. I use my personal goals to drive my business
goals. So if I want a new boat or a house or a car, I work out
what we need to do, even weekly or daily. I’m a do-er and over
the years I’ve been very hands-on. When I’m on a mission to
get something specific done I have a tendency to tell people
exactly what to do and then I expect them to follow my
directions to the letter of the law. On a day-to-day basis I
do empower my staff to carry out their roles and to work on
their own but everything is very accountable and everybody has
to focus back to the business plan.
Who has been the greatest
influence on your career and why?
The one key input on my life was my grandfather. He was very
entrepreneurial and he spent a lot of time speaking to me
about the days when he travelled from Europe to
at the start of the 1900s starting businesses, and how on the
ship rather than goods he took water and would sell this water
and fill it up at the various ports. He was probably the
person who drove me to become the person that I am today.
You need to develop a comprehensive business plan. A lot
of people just use the business plan to go to the bank and
get finance and then they throw it in the drawer but I
used mine to drive the business
What is the most valuable lesson
you have learnt in business?
One of the things that I learned very early on is that you
don’t trust anybody in business. You’ve always got to put
systems that offer accountability in place. One of the things
that I learned from my grandfather is that research is very
important and right throughout my business career I’ve spent a
lot of money on research. Every single year I research our
markets to make sure things haven’t changed.
What advice would you give to
I don’t think anyone wanting to start up will be successful
unless they do some thorough research. I spent a whole year
researching this concept and prepared a five-year business
plan. Research is probably the key and then you have to find a
realistic way of achieving the capital that you need and to
develop a comprehensive business plan. A lot of people just
use the business plan to go to the bank and get finance and
then they throw it in the drawer but I used mine to drive the
What are your plans for the
future of the company?
In the last three years we were on a no-expansion plan. Our
aim was to grow in all the existing 11 countries that we’ve
already got but we’re now ready to recommit to expansion.
We’ve found that non-English speaking countries have been very
difficult for us because we don’t understand the language and
if you get 10 people to translate the same manual you’ll get
10 different versions of that manual. So we’ve identified the
our next marketplace. It’s an ideal market, it fits into our
niche very well and it’s got very high consumption levels,
which are what create courier services. The culture is very
similar to where we’ve been very successful like
And after 24 years we’re looking at
diversifying into other associated areas. In
with the postal market deregulated, we’ve set up a business
called Fastway Post as a competitor to the New Zealand Post
Office and they’ve been very successful and every one of their
outlets has become a customer for the courier service. So
we’re looking at expansion into other areas as well as taking
the core brand into the
How to franchise your business
Franchising your business is a way to expand
quickly and cash in on your hard work to date. Dan Archer,
head of marketing at the British Franchise Association,
outlines how to go about finding the right match
Post Date: 18/05/2007
the past 10 years franchising has grown dramatically in
the UK as more businesses look to develop their
operations and network through franchising. There are
now 781 business format franchise systems, a growth of
44% since 1996.
If it is done well, franchising is
a very powerful tool for generating business
development, company growth and competitiveness. But it
is important to go into the process with your eyes open.
There are several steps which potential franchisors
Research the market to ensure that products and
services are competitive and distinctive enough to be
franchised and that customer demand is sufficiently
Produce a business plan outlining proposals in
full and including a detailed SWOT analysis
Protect all property rights by registering
trademarks, trade names and patents with the relevant
trademark and patent offices
Test the franchise in the form of a pilot
operation lasting at least 12 months and ideally
longer if the business is in any way seasonal. The
pilot scheme should be undertaken at more than one
location to test the concept in different geographical
areas. A comprehensive pilot operation will ensure the
right strategy, highlight problem areas and enable the
franchisor to finalise the package before committing
to developing a network
Test the franchise in the form of a pilot operation
lasting at least 12 months and ideally longer if the
business is in any way seasonal
With the pilot operation running successfully, the
franchisor can prepare and launch his or her network.
At this stage, the franchisor should instruct an
experienced solicitor to draw up a comprehensive
franchise contract setting out the obligations of each
party, including how the fees, mark-ups on supplies
and any other payments from the franchisee are to be
calculated. These obligations should be made clear at
the outset of any agreement with a franchisee
Produce a prospectus to attract suitable
franchisees and determine the criteria for the
Produce a comprehensive operations manual and
training programme for franchisees, to set sustainable
standards of customer service
Establish a central management function and
possibly field support staff to support the franchise
network. Set up a system to monitor the performance of
Develop a marketing, sales and advertising
strategy to promote the franchise network, especially
when competing with rival companies who may already be
known to your potential customers
Seek advice from the British Franchise Association
(bfa). The bfa delivers prospective franchisor
workshops across the country throughout the year,
designed to assist businesses in independently
evaluating franchising as a tool for growing their
business. Alternatively, the bfa Franchisor’s Guide
(sponsored by Lloyds TSB) is invaluable in providing a
wealth of unbiased step-by-step information for
potential franchisors. The bfa can provide
introductions to its accredited consultants,
solicitors and accountants to help you meet bfa
ethical franchising standards and help you identify if
your business is suitable to franchise.
Why you must offer flexible working
Case studies by the CIPD and BCC suggest
flexible working is largely informal in small companies and
can deliver tangible business benefits
Post Date: 19/06/2007
firms are able to derive real business benefits from
implementing flexible working, according to the findings
of case studies by the Chartered Institute of Personnel
and Development (CIPD) and the British Chambers of
In-depth studies of five small
companies follow on from research released by the two
organisations in April, which also demonstrated the
business case for flexible working, such as finding it
easier to attract and retain well qualified staff who
would otherwise have been hired by larger firms.
The case studies indicate that as
well as making a difference to the bottom line, firms
also benefit through a reduction in staff stress and
from a positive reputation as a responsible employer.
“Employees who feel able to balance
their lives in and outside work are much more likely to
go that extra mile as their part of the bargain,”
claimed Geoff Armstrong, director general at the CIPD.
Employees who feel able to balance their lives in
and outside work are much more likely to go that
extra mile as their part of the bargain
“Employers benefit from high levels
of employee engagement and a wider talent pool,” he
added. “Enlightened management of people, and
particularly flexible working, can make a huge
contribution to business performance.”
The case studies also suggest that
flexible working arrangements in small companies are
often informal rather than as part of employment
contracts or company policies. Such a policy is a
business issue rather than an HR or bureaucratic one,
the studies concluded.
“More employers are offering
flexible working and not because they are required to do
so by legislation,” said David Frost, director general
of the BCC. “Survey evidence suggests that two in five
employers offer the chance to work flexibly to employees
who have no statutory right to ask for it and, in many
cases, to all employees.”
The earlier research suggested 72%
of small companies offered part-time work, 69% allowed
employees to vary their working hours and 38% gave staff
the opportunity to work from home.
Do you keep tabs on staff absence?
The total cost of sickness to employers is rising,
according to new research. But despite this many small companies
are still failing to record absence levels
Post Date: 11/06/2007
in three small companies are risking high levels of staff
absence and falling productivity by failing to monitor levels
of staff sickness, new research suggests.
A survey by Employee Benefits
magazine and healthplan provider HSA suggests just 37% of
companies with fewer than 100 employees have a system in place
to keep track of staff absence, compared to 51% in 2005.
It also suggested the total cost of
sickness to employers is rising. The amount of firms recording
the cost at between 6% and 10% of payroll increased from 4% in
2005 to 10%, with those claiming it cost between 3% and 5%
rising from 6% in 2005 to 35%.
The most popular means of tackling staff
absence was to implement work/life balance policies, cited by
69% of respondents. This was followed by establishing a
sickness absence management scheme (66%), encouraging staff to
take regular holidays (65%) and introducing flexible working
This research shows how important it is for managers and
HR practitioners to be aware of the signs of mental
ill-health so that they can take action early and provide
support before the individual‘s condition deteriorates
The research also highlighted the growing
problem of stress in the workplace. The number of respondents
seeing this as a major cause of absence rose from 12% to 37%
between 2005 and 2006 and increased still further, to 40%, in
Meanwhile a separate survey by the CIPD
has suggested that mental ill-health is the second most common
cause of sickness, behind only musculo-skeletal conditions.
The research claimed stress, depression
and anxiety accounted for more than 50% of all mental
health-related absence, with the average amount of time staff
took off due to mental conditions standing at 21 days.
“This research shows how important it is for managers and HR
practitioners to be aware of the signs of mental ill-health so
that they can take action early and provide support before the
individual‘s condition deteriorates to the point they go off
on long-term sick leave,” said Ben Willmott, CIPD employee
Nigel Thomas, Vice President of SHL Partner
Network, tells us how small businesses can attract and retain top
Post Date: 08/06/2007
businesses often struggle to attract and retain top talent due
to the perception of candidates that there may be fewer
opportunities for their development. However, many could
already be employing talent whose potential is un-realised.
Nigel Thomas, from SHL, provider of psychometric assessment
and development solutions offers some insight into how small
businesses can harness the potential of their employees by
taking a talent audit approach.
Over the last two years there has been an increased focus on
recruiting and retaining talent. Whereas larger organisations
are able to invest more resources in the recruitment process,
small businesses often lose out in the ‘war for talent’. The
most significant blow to smaller firms is the financial impact
of recruitment. Consider; the time and money spent on the
recruitment process or the rising cost of employing a
recruitment agency, in addition to the fact that it usually
takes six months before a new recruit becomes effective. That
is of course, assuming that the right decision was made on who
The word ‘audit’ is usually associated with understanding
finances, not people, but an audit is exactly what is
needed to effectively assess and manage talent within
However, while smaller firms may lack the specialised
departments of their larger counterparts, they also have a
powerful advantage: they have the capability of engaging with
their talent on a much more personal basis. As such, one
question seems obvious – ‘Why don’t smaller firms start with
the talent they have in-house?’ – The answer is that companies
often don’t realise what capabilities are already in place but
unused. The first step in winning ‘the war for talent’ is
uncovering this untapped wealth of home grown talent by
following a simple talent audit approach, which is especially
suited for smaller businesses.
The word ‘audit’ is usually associated with understanding
finances, not people, but an audit is exactly what is needed
to effectively assess and manage talent within smaller
organisations. Too many decisions about people are based on
‘gut feel’ when what is needed is an objective look at the
potential of those within the organisation.
One of the most important actions that a smaller firm can take
today to prepare for the challenges of tomorrow is to conduct
an audit of their current talent. Not only does a talent audit
provide invaluable information about the strengths and gaps in
current talent, but it also allows organisations to be
proactive in developing or obtaining the people that they will
need to be successful in the future. As an added benefit,
clear career development processes help to build loyalty with
internal 'high potentials' who feel like their aspirations
could be realised within their current organisation.
Employing a simple, yet strategic, talent audit of the
existing people potential within the organisation could
uncover skills that may need developing, but exist within
those already in tune with the company’s brand values and
culture. In addition to this, maximising the output of
existing potential could cost businesses a third of the cost
of recruiting new candidates. In this way smaller firms can
retain their top performers without losing them to larger
firms, while ensuring that any recruitment decisions are based
on a sound understanding of what the company needs.
No matter the size of an organisation, the result will remain
the same - the more resources you invest in an employee, the
more they will invest in you. SHL is a world-leading provider
of objective, scientific psychometric assessment and
development solutions that helps companies around the globe to
select, recruit and develop the best people. SHL has
established the SHL Partner Network (SPN) to service the needs
of small and medium sized organisations. In the UK there are
more than 350 SHL partners who can offer assistance,
consultancy and expertise in SHL tools to select and develop
the best talent for your business.
Maximising talent – with the help of SHL’s
community of trained experts, simple steps can be followed to
enhance current practices and help prepare for the ongoing
shortage of talent in smaller companies.
1. Write a talent map
The process begins with taking a closer look at your business’
people, making a note of those skills, abilities and
behaviours (competencies) that you think are required from
them to help deliver your long term business strategy. For
example, do you have too many people with strong technical
skills and not enough big thinkers? SHL finds this to be a
critical first step to ensure that your ongoing talent
management activities support corporate goals.
2. Critique current context
You can get a clear view of your talent reputation, by asking
how fulfilled, engaged and motivated employees feel. This
could be done through an employee survey and take an honest
look at the answers – Does your organisation have work to do?
Do employees at multiple levels feel confident that they have
room grow their careers without looking at other firms? Is
there scope for improvement? How many leaders of the future
could there be within the organisation? Your processes for
identifying and “fast-tracking” undiscovered talent in your
organisation may also need to be reviewed.
3. Conduct a talent audit
Along with the results of the employee survey, use of SHL’s
Occupational Personality Questionnaire (OPQ), Motivation
Questionnaire (MQ), and ability tests can also help smaller
organisations to obtain a measure of a person’s potential and
their fit for future roles and responsibilities. Taken
together, the assessment results can enable you to understand
the talent in your organisation – at both the individual and
group level – and match it to those required as per your
talent map. SHL’s Partner Network, SPN, can provide
consultancy in your area and field with the help of our
qualified experts to analyse the output of these assessments.
4. Create a talent strategy
With the help of an SPN facilitator, schedule a day with your
senior managers to review the talent audit results and create
a talent strategy with real targets that all can commit to.
The objective is not to solve the talent challenge for the
whole organisation at once. Through the facilitated
discussion, prioritise initiatives by identifying areas that
address significant pain points and that have the most impact
Finally, integrate talent management into quarterly business
reviews and remember, when addressing talent in your
organisation, above all else be bold. Act like your business
depends upon talent - because it does.
Health warning to small firms
While larger companies struggle to cope with the
problem of staff absence, small firms can boast a much more
impressive record. But with each case hitting them proportionally
far harder, they cannot afford to be complacent, as Helen Beckett
Post Date: 14/05/2007
watching the headlines on health and employment would be
forgiven for thinking the UK is either a sick nation or a
population of malingerers. Every year 176m days are lost
through sick leave – 8.4 days per employee – and the cost to
business is £11bn a year.
One conclusion might be that UK workers take a ‘sickie’
whenever the whim takes them. The government’s white paper
Choosing Health also suggests there is a sicknote culture that
needs to be tackled.
Dig a little deeper, however, and small business owners will
be glad to find confirmed what they knew all along: namely
that small businesses are made of sterner stuff. Alarmed by
the negative headlines and statistics, the Federation of Small
Businesses decided to research whether absenteeism posed a
genuine problem for their members. The key finding from its
business advice survey, published last November, is that the
average small businesses loses just 1.8 days per employee to
absence every year.
It seems unlikely that small companies will have to lobby
local GPs as interim HR director Ray Smelt once did. He wrote
to all GPs close to a factory where he managed staff to inform
them that the company did not have any ‘hard jobs’ any more as
everything was automated. “Employees would tell their GP that
they had a hard job and be signed off,” he recalls. “On their
return-to-work certificate it would say ‘fit for light
duties’. As employees were machine-operators who simply pushed
buttons, it was difficult to see how much lighter their duties
In contrast to the problems experienced in big corporations
and the public services, the FSB report paints a positive
picture of small businesses and health issues in the
workplace. Almost half (43%) of the small firms surveyed
reported no sickness absence in the past year, with business
owners themselves taking an average of three days’ sick leave
The uptake of group private health schemes continues to
grow as employers realise their staff can be treated
quicker privately. Modern diseases like stress and
backache are not areas the NHS caters for best
The figures do not surprise Ben Wilmott, policy adviser at the
Chartered Institute of Personnel and Development. “Smaller
companies tend to have lower levels of absence because it’s
easier for people in a small workforce to see the impact of
their absence on colleagues and friends,” he says. “Managers
and owners are also likely to have closer relationships with
the people they manage.”
No pay, no gain
It’s not just loyalty and altruism that keep employees at
work, of course, but the lack of sick pay too. Statutory sick
pay only kicks in after four consecutive days of illness and
is £70 a day; hardly an incentive to stay off sick. This
compares unfavourably to the full pay that employees in the
public sector can enjoy for long stretches, although many
small firms will also pay staff their normal rate.
Whether it’s down to loyalty or financial hardship of
employees, small businesses may encounter the opposite problem
to unexplained absenteeism: that is, staff returning to work
before they are better. “The danger with a small company is
that you have a driven manager and a loyal team. You have to
be clear in this situation that employees should stay at home
until they are better,” advises Wilmott.
Even motivated businesses are prone to the odd ‘sickie’,
however, and there is a danger that these can mushroom into a
prevailing culture. Joanne McCarthy, an adviser with Workplace
Health Connect, a free advisory service of the Health and
Safety Executive, cites a nursery that rang the advice line
because it was plagued by staff frequently going off sick.
Workplace Health Connect gave them business advice such as
putting in place some basic processes such as logging sick
leave and conducting back-to-work interviews. “Sometimes just
knowing that they are allowed to interview staff about health
is a huge relief for employers,” says McCarthy. “After all,”
adds her colleague Louise Bisdee, “the contract between
employer and employee is about work and so an employer is
entitled to know if there’s an ongoing health issue.”
No margin for error
Even with small companies’ good track record on sickness
absence, there’s no room for complacency as unexpected
absences hits them far harder than their larger rivals.
“Without warning a small firm can find itself without a large
proportion of its workforce,” points out the FSB report.
“Just one person being off work can have a disproportionate
effect: one out of 10 workers is 10% of the workforce,” says
Tim Baker, commercial director of Norwich Union Healthcare.
The fear of being hit by a wave of staff absence is behind the
growing popularity among small firms for taking out private
health insurance policies for staff, which Baker claims is
growing at 4% a year.
“The uptake of group schemes continues to grow, even at a time
when the NHS is investing, as employers realise their staff
can be treated quicker privately,” he says. “Modern diseases
like stress and backache are not areas the NHS caters for
Health insurance also provides a degree of protection against
‘presenteeism’, a situation where sick employees come to work
but do not function at their optimum. Like other health
insurers, Norwich Union offers cover in a modular format with
companies able to choose from a menu of options including more
hospital cover, psychiatric treatment, dental and optical
care. A basic package for five staff would come in at around
£1,200 a year.
Like dealing with an illness itself, the key to tackling
problems of staff absenteeism is to recognise that it exists
and to make small alterations to tackle it (see separate box).
Small companies may be leading the way in tackling the issue
but by ensuring staff know bogus sick leave will not be
tolerated and helping genuine cases to return to work as
quickly as possible, small businesses can make themselves even
Proud parents conceive a £1m enterprise
Their videostreaming business got in first
but must capitalise on its impressive lead as market-entry costs drop,
reports Paul Bray.
It is amazing what you can do in business when you combine personal
necessity with a little inside knowledge. In 2003, Cary Marsh and Iain
Millar wanted to share videos of their new baby with Mr Millar’s
parents in Holland. Videos are too big to email, so the couple thought
of streaming: putting video footage on the web where people can watch
it via broadband.
Video streaming services were expensive and aimed at businesses, but
Ms Marsh worked for a streaming company and was able to borrow a small
amount of web space for nothing. Result: two happy grandparents and
one flash of inspiration.
“I thought: I can’t be the only person wanting to do this and I know
it costs buttons. It ought to be possible to build a business buying
bandwidth in bulk and selling it in small parcels,” says Ms Marsh.
The result was
a low-cost video hosting service for consumers, communities and small
businesses. Customers upload their videos to Mydeo’s website and
include links to them in emails and on their own websites. When
someone clicks the link, Mydeo shows the video. Unlike free rivals
such as YouTube, says Ms Marsh, Mydeo doesn’t limit the size of videos
or show them on its own site.
Monthly subscriptions start at £4.87 for 100 minutes of video. That’s
much less than conventional streaming services, because bandwidth
costs have plummeted and, as most videos are only viewed by a few
people, bandwidth requirements are small.
In 2004 Ms Marsh set up Mydeo at the Kingston Innovation Centre in
south-west London, which helped her raise funding including a £56,000
Department of Trade and Industry technical innovation award. The
service was launched quietly in March 2005. Four months later the firm
got its biggest break: a deal with Microsoft that established Mydeo as
the default web-streaming company for Windows Movie Maker across
Europe. Every time a Windows user thinks of putting their movie
online, up pops Mydeo’s name. This accounts for more than half of
Mydeo’s business but costs the company nothing as it plugs a gap in
Microsoft’s own offering.
Vista, this year’s new version of Windows, will work differently but
Ms Marsh hopes to get similar preferred status for Mydeo and says
Vista should boost video streaming.
The rest of Mydeo’s customers come via partnerships with other
internet and digital video companies, including Orange broadband and
Muvee, or by word of mouth. “Our service is inherently ‘viral’ because
you have to show it to people,” says Ms Marsh.
Running costs are low but development costs are high, so by 2005 Ms
Marsh needed serious funding. She nearly accepted £600,000 from a
syndicate of business angels but is now glad the deal fell through.
“They didn’t know anything about the internet. If I’d signed, I’d have
had a business angel as chairman who had no consumer internet
experience, which would have been very silly.” Instead, Mydeo took a
small firms loan guarantee of £150,000 from HSBC, plus £50,000 from a
business angel as a sleeping partner and Ms Marsh and Mr Millar still
own two thirds of the company. Turnover this year is forecast to be
near the £1m mark.
This spring the firm expects to raise venture capital (VC) funding.
Although Mydeo’s service is largely unique, competitors are starting
to appear and the barriers to entry keep dropping as web development
costs fall. So the company must build on its lead quickly. Mydeo also
needs a broader management team. “We’re bootstrapping constantly,”
says Ms Marsh. “We’ve outgrown the virtual management team from
Kingston and now we need to employ global players in marketing, sales,
finance and intellectual property. I’m also looking for VCs with a
complementary portfolio of companies they can introduce us to.”
A misjudgement was not offering free trials. “Everyone expects them
online,” says Ms Marsh. “We’d been partnered with Microsoft for six
months, then we had to spend three months restructuring for free
Fortunately the revamps paid off, and during 2006 customer numbers
soared from 2,000 to 100,000 where 60pc are in the US, followed by the
UK, Canada, Australia and more than 160 countries in all.
Consumers form the largest group, but lucrative small business
subscriptions are growing fast. “Now we have to keep innovating to
stay ahead,” says Ms Marsh.
Expert Technology - Technology
Commercial Director, PC World Business
Mydeo is scarily dependent on Microsoft. The link with its movie
player provides the company with significant amounts of customer
acquisition and traffic. However it’s important to reduce that
dependency by looking at other ways to generate revenue. One way would
be to link with resellers and manufacturers of camcorders, which are
only really worth having if you can show and share the film you shoot.
And there’s no better way than to load it on the web.
By offering a free subscription along with camcorders, Mydeo could
increase its customer base and show people how simple and easy it is
to upload video – its perceived complexity could be a big block to
growth. As soon as the service’s value is seen and appreciated,
customers are will buy the service. Mydeo also needs to define its
markets. Advertising in parenting and lifestyle magazines should be
considered, but it could also dvelop services for businesses, opening
up new revenue streams.
Managing Director, British Chambers of Commerce
Small businesses can be very tough to reach directly. Ms Marsh should
find herself a partner who already has a strong channel into the
sector. There are many organisations that help companies looking to
target small businesses more effectively and who would see value in
showcasing this service.
She should think carefully about what kind of business could get real
benefit from her service but she should not expect them to work it out
for themselves. MyDeo could create guides or demos showing how video
streaming can significantly improve customer service and sales. Then
market this through its industry organisations, new partners and even
She could even consider taking a leaf out of Skype’s book. The
consumers using her service also work in businesses but need help to
see the business potential, so she should spell out how mydeo.com can
be used. Then incentivise those customers to sell the benefit, turning
them into an unpaid sales force.
Business Advisor, Business Link Kent
Planning is central to any business, but particularly for Mydeo, which
is looking to raise more finance. A strong business plan is essential
when meeting potential investors so Cary Marsh needs to make sure she
and her plan are prepared.
She should start by reviewing the business against the existing plan
as this will help identify potential improvements and benchmarks to
remain competitive. Having then identified Mydeo’s USP, she should
show how this will be exploited. This may involve developing a
resources map, pinpointing what expertise is needed and how to get it.
She must get the right people in place and investors will want to see
Finally, highlight the business development and marketing targets
demonstrating not only market knowledge but how to reach it and
generate a return. Reviewing a business plan is equivalent to general
strategic planning. Getting all thoughts on to paper will provide a
reference for regular reviews.
Stuntman’s versatility means making a living is like falling off a log
What have Ronnie Corbett, Hermione Norris
and half the cast of Last of the Summer Wine got in common?
Well, they have all been stunt-doubled by Riky Ash. His Grantham-based
business, Falling For You, has been running for 14 years and Ash has
accumulated more than 350 television and film credits. He’s even
featured in the Guinness Book of Records as the world’s most
He’s doubled for actors between 3ft 6ins and 6ft 4ins tall in height
(Ash is 5ft 3in), and between six and 87 in age. But it’s not all
leaping out of burning buildings and having bottles smashed over his
Early on Ash realised that the more strings to his bow the better. So,
in addition to being a Fifth Dan Shaolin Kung-Fu expert, he can handle
horses, cars, motorbikes, stunts based around fire, swimming and
powerboats. He does heights, he ice skates and will happily fall down
If that wasn’t enough, he’s also a trained actor, something Ash worked
out early on would make him that much more appealing to production
“If a TV company is shooting a scene where someone crashes through a
window, then gets up and runs off, it’s better for them not to have to
cut from the stunt to the actor and worry about continuity issues,” he
says. That means he’s landed work that would have gone to two people.
Ash says he was never a daredevil when young; if anything the complete
opposite. But getting into martial arts opened his eyes. He
represented Great Britain at the German Open and, talking to the other
competitors, started to find out more about how he could make serious
money doing stunts or fight work on television.
“I enlisted in drama school and contacted Equity. Then I started
watching stuntmen at work, helping out and learning from what they
were doing. I hired stunt videos and got books out of the library.” He
did his research.
He hasn’t looked back. “There are a lot of average stuntmen,” Ash
says. “But because I have many skills and can act I’m in demand.”
Before he got into the stunt work, Ash earned £6,000 a year as a
cabinet maker. He can now earn that in under a week.
Getting doused in petrol and set on fire can earn him £3,000, as can
throwing himself off a cliff. Scary work, even for Ash, who openly
admits he can be frightened doing certain stunts.
Falling For You’s turnover is around £150,000 (although he can earn up
to £250,000). “I’ve been a success because I’m versatile, reliable and
honest. I’m not a big fan of business books. To me, it’s all about
Light on waste, heavy on paper
Norman Kemp is one of the precious few
players in lamp recycling but finds the EU forms weigh him down.
Philip Smith reports.
On the face of it, Norman Kemp’s business model couldn’t be simpler.
He collects old fluorescent light tubes, personal computers,
refrigerators, batteries and other recyclable items from council tips
and commercial sites around the UK, sorts and packages them, and then
sends them off to recycling centres across Europe.
He gets paid to collect and, in turn, pays the recycling centres to
process the products.
His two divisions, one specialising in electrical items, the other
hazardous chemicals, generated a total of £600,000 of revenue last
year from which he saw around an 8pc operating profit margin.
The hazardous waste produces the biggest income while the electric
lamps generate the greater profit.
Business is on the increase boosted by new directives from the
European Union controlling what can and can’t be disposed of, where
In 2005, the Hazardous Waste Regulations came into force that dictated
fluorescent lamps with mercury and sodium had to be recycled via
licensed sites such as Mr Kemp’s Lamp Recycling Company, which is
based in Basingstoke, Hants.
It may sound simple and many would expect Mr Kemp to be a true
supporter of such legislation. But the burden of bureaucracy is taking
its toll on the 57-year-old veteran of the waste industry. “It may
help generate business but the amount of paperwork we have for each
job is phenomenal,” he said.
“I’ve had enough of the regulations and part of me says it’s time to
He has one eye on retirement but to make the Lamp Recycling Company an
attractive proposition to sell, Mr Kemp knows he first needs to take
advantage of being one of only a handful of players in a rapidly
“The one thing we can’t do is stand still. We have to expand,” he
said. “But that will also cost money for new staff and new premises.
We are looking for major funds.”
He would welcome a bid for part of the business co-owned with his
Zambian-born partner Nina Adams.
They are willing, he said, to give up a large slice of equity in
return for that much needed cash injection.
Apart from a Small Firms Guarantee Loan to launch the company all the
capital injections so far have come from Mr Kemp and Ms Adams.
This strategic shift is being played out against a backdrop of
burgeoning bureaucracy from Brussels. “Part of the Waste Electrical
and Electronic Equipment Directive (WEEE) which came into effect in
January,” he said.
The DTI is responsible for turning the EU directive - which aims to
reduce the amount of electrical and electronic goods going to landfill
- into UK law and says producers will be responsible for financing the
collection, treatment and recovery of waste electrical equipment and
distributors will also have to allow consumers to return waste
equipment without charge.
Phil Orford, of HazCom, a firm that helps SMEs comply with hazard
waste rules, says the final part of the directive, the requirement to
treat and recycle – the bit that particularly affects Mr Kemp – will
come into effect in July.
It’s that kind of upheaval and wholesale changes in the way the
industry works that makes business planning for Mr Kemp impossible.
“I get more cynical every day,” he says.
Mr Kemp is no stranger to regulation. His 12 year-old business is
licensed to carry and handle a range of waste products and is
registered under the EU’s Hazardous Waste Directive to dispose of some
pretty dangerous concoctions.
“We had to take on an extra person just to deal with the red tape from
that directive,” he said. “We are now doing a lot of the
administration that the Environment Agency used to do.” The company
employs nine who, together with the expense of transporting of the
waste, account for most of the company’s costs.
Working with facilities management companies and tendering for public
contracts, Mr Kemp collects the recyclable items from civic amenity
tips, hospitals, universities and even prisons, not to mention the
Houses of Parliament, and takes them back to his base where they are
sorted into size and shipped off to vast highly specialised processing
plants throughout Europe.
Items such as lamps can stay on site for many weeks at a time but the
more hazardous materials such as toxic, flammable, corrosive and
carcinogenic materials have to be moved on immediately.
“We don’t have a licence to store those,” he said.
The big profit comes from the high volume lamps business. It has to be
high volume: “It takes about a million tubes to get one tonne of
aluminium, which is worth about £400,” said Mr Kemp.
His is one of half a dozen lamp recycling companies vying for the 30m
fluorescent tubes sent through the system each year. “The UK only
recycles about 30pc of the lamps bought,” he said. “So there is a huge
potential for growth.”
The Waste Electrical and Electronic Equipment Directive should help
businesses such as Mr Kemp’s to exploit that potential just as long as
he doesn’t see his margin being eroded by the cost of administering
increasingly complex and time-consuming legislation.
Even if he does see a light at the end of the tunnel this summer the
future is still far from bright on the bureaucracy front.
“They are already working on the next bit of red tape,” he said. “A
new Batteries Directive.”
Is there a ticket to Narnia in the wardrobe?
A Birmingham theatre needs bigger audiences
but has only £1,000 to spend on each show's marketing, writes Philip
They are in something of a quandary at The Crescent. The 83–year-old
Birmingham-based theatre company has to sell more seats for its
20-plus performances a year. But to do that it needs to increase its
marketing budget substantially. Yet there is no more money available
until ticket sales are boosted.
“We are only playing to a half-full theatre,” says Andrew Lowrie,
chairman of The Crescent Theatre Company. “We need to get the numbers
In 2005 one production of nine shows sold less than 16pc of the
It shouldn’t be a problem. The theatre lies in the heart of
Birmingham’s cultural hub just off the huge Brindleyplace development.
Half of its target audience lives within five miles of the theatre,
where it is easy to park. Tickets cost between £8 and £11.50 for a
wide range of shows that include Agatha Christie, Roald Dahl and Keith
Waterhouse as well as Shakespeare, of course.
It’s not as if the facilities aren’t up to scratch. The company’s
purpose-built venue has two auditoria – of 350 and 100 seats –
rehearsal rooms, a box office and a bar. It also has its own workshops
to make scenery and props and a fully-stocked wardrobe department.
The sticking point for The Crescent is simply its status. Despite past
players of the likes of Martin Shaw (TV’s Judge John Deed) and BBC
presenter Adrian Childs (and Charles Dance is mooted to have once been
part of the company), it is an amateur group.
“There are no positive associations with the word amateur,” says James
Allan, the company’s marketing manager and an ad man by day. “It
conjures up images of church halls, wobbling scenery and actors
Apart from a £500,000 lottery grant nine years ago there are no Arts
Council or City Council funds available. Last year The Crescent saw
revenues of £295,000, mainly from ticket sales and associated revenue
“For each £1 we take on the door we make 75p at the bar,” says Allan.
Other revenue streams include hiring out the wardrobe to other theatre
companies, hiring the entire facilities - including technical teams -
to touring companies, drama schools and for corporate days, as well as
promoting other shows. Later this year, for example, Julian Clary will
be treading the boards in a show produced by The Crescent.
It also charges each of its 200 or so members £50 a year. These are
the actors, lighting and sound technicians, costume designers,
musicians, stage managers and directors – every function involved in
staging a play.
They also all take their turn front of house pulling pints and selling
programmes. “It’s a great place to learn a new skill. Not everyone
wants to act,” says Allan.
The company pays £1,000 a month rent to its sister trust, which owns
the theatre, but employment costs are the single biggest expenditure.
There are 10 permanent staff ranging from a full-time operations
director to part-time box office attendants. What little profit there
is – in 2005 it was less than £5,000 - goes into reserves.
“We never have any operating capital on which to draw,” Allan adds.
Growth is not an option: with revenues static and costs rising that
thin surplus will soon disappear. “We can’t put up the £50
membership,” says Allan. “There’d be an outcry.”
With capacity for 400 members and a fairly high churn rate, raising
the price would only be a short-term way to bring in some cash. “We
have to keep the rate accessible,” says Lowrie, who is an operations
director for a nut and bolt firm during the day.
The lack of funds adds up to a publicity problem. “We have about
£1,000 per show for marketing,” says Allan. “With that, we have to
reach 2m people.” The Crescent does have 10,000 on its customer
database of which half