SME News September 2017

sMEnews September 2017

Charging Forward in the Fight Against Chargeback Fraud Israel’s CYBONET launches comprehensive cyber security solution for SMEs

In this issue...

UK SME’s to Seek Asian Opportunities After Brexit, Research Shows Research Shows Poor Preparation for Digital Age Among UK SMEs Millennials Make Great Employees Says Furniture Specialist Charging Forward in the Fight Against Chargeback Fraud Health and Safety Course Keeping SMEs Safe Social Media Brings Success to SMEs Putting Power in the Hands of SMEs Funding the Future

Editor’s Note

, Welcome to the September edition of SME News, bringing you the latest news, announcements about enterprises throughout the UK. In recent news, Foresight Williams Technology EIS Fund invests £500,000 in Utonomy, a pioneering intelligent gas grid solutions provider. The Fund aims to support disruptive technologies through high-performance engineering and proven investment management. The transaction represents the Fund’s first investment.

Elsewhere, we discover how since online banking and shopping is becoming even more popular, chargeback fraud is quickly becoming one of the fastest growing problems for SMEs. In this issue, we discover how to beat it.

Lastly, the global leader in online safety training and compliance software, Essential Skillz offers advice and a customisable course, which examines how slips, trips and falls occur in different work environments, are helping businesses navigate the costly consequences caused by these types of accidents in the workplace.

Here at SME News, we truly hope you enjoy reading this insightful issue and look forward to hearing from you.

Jessica Daykin, Editor Phone: +44 (0) 203 725 6842 Email: j.daykin@aiglobalmedialtd.com Website: www.sme-news.co.uk AI Global Media, Ltd. (AI) takes reasonable measures to ensure the quality of the information on this web site. However, AI will not assume any legal liability or responsibility for the accuracy, correctness or completeness of any information that is available through this web site. If errors are brought to our attention, we will try to correct them.

The information available through the website and our partner publications is for your general information and use and is not intended to address any particular finance or investment requirements. In particular, the information does not constitute any form of advice or recommendation by us or any of our partner publications and is not intended to be relied upon by users in making or refraining from making any investment or financial decisions.

Appropriate independent advice should be obtained before making any such decision.

Any arrangement made between you and any third party named in the site is at your sole risk and responsibility.

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Contents

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, 4. News 6. Charging Forward in the Fight Against Chargeback Fraud 8. Cybersecurity to Support SMEs 10. Millennials Make Great Employees Says Furniture Specialist 12. Foresight Williams Technology EIS Fund: Supporting SMEs 14. Funding the Future 16. Health and Safety Course Keeping SMEs Safe 18. Latest Acquisition Spells Shakeup for Technology Market 20. Putting Power in the Hands of SMEs 22. Research Shows Poor Preparation for Digital Age Among UK SMEs* 24. SME Specialist Sees Lending Soar 26. Social Media Brings Success to SMEs 28. ThinCats-Hot-tailing it to the Highlands 30. UK SME’s to Seek Asian Opportunities After Brexit, Research Shows

SME NEWS / September 2017 3

NEWS

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Vable joins Fuse Vable has been selected to join Fuse, the new tech innovation space, where legal tech companies, clients and Allen & Overy’s legal technologists will collaborate to create solutions to some of the most intractable challenges faced by companies, financial institutions and law firms today.

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NEWS

, Allen & Overy has confirmed the eight companies which will work in Fuse, the new tech innovation space based in its London offices.

Fuse is targeting legaltech (helping in-house lawyers and law firms to operate and deliver their services in smarter, more efficient ways), regtech (supporting businesses in complying with law and regulation) and dealtech (developing new ways for businesses to negotiate and transact with each other). It is an integral part of Allen & Overy’s advanced delivery capability and complements the legal practice’s profile in the fintech arena.

The first company invited by Allen & Overy to join Fuse was Nivaura, which is developing an automated and vertically integrated cloud based service for the issue and administration of financial instruments by small and medium-sized issuers. As entrepreneurs-in-residence, Nivaura team members will help to guide the tech companies selected to work in the space by sharing advice and business experiences whilst continuing to develop their own business.

After reviewing the selection of online applications, Allen & Overy invited a number of tech companies to a pitch day in July. The companies were asked to present to the inaugural Fuse selection committee which included J.P. Morgan’s Oli Harris, Funding Circle’s Robert Kerrigan, Amazon’s Alex Wong and Balderton’s Sam Myers as well as Allen & Overy participants.

Following the pitch process, seven companies have been selected to move into Fuse in September, as follows: • Avvoka – a digital platform incorporating a contract creation, workflow and analytics tool.

• Corlytics – a business providing regulatory risk intelligence, using forensic analysis and forecasting of fines and sentencing globally.

• iManage – previously known as RAVN, a business developing natural language processing and machine learning technology to organise, discover and summarise documents.

• Ithaca – a charitable not-forprofit enterprise aiming to create a mobile-responsive online technology platform to assist asylum seekers in gaining access to pro bono legal representation and advice.

Legatics – a company that turns ‘paper and email’ based legal processes into simple and innovative software.

Atrust Computer Corp.

Opus 2 International – originally a developer of litigation and transcript management software, now developing a tool to support lawyers with the prospectus verification process.

Established in 2007, Atrust is a creative, professional, and enthusiastic team which has rich experience in designing, producing Thin Client, Zero Client, Server and Management Software. On the 8th September, Atrust appoints SA-Distribution Ltd and TooManyClouds as its Master Distributor for the UK/Ireland region.

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Vable – a provider of content aggregation, automation and intelligence software.

Jonathan Brayne, Chairman of Fuse at Allen & Overy, commented: “The selection process has been an extremely interesting and rewarding experience. Now we’re just really looking forward to welcoming the companies into the space next month, introducing people from A&O and our clients’ businesses to it and, ultimately, helping shape what emerges from the Fuse environment.”

Shruti Ajitsaria, Head of Fuse at Allen & Overy, added: “This is an impressive roster of companies, which span a variety of technologies and departments. We chose the successful applicants based on whom we feel we have natural synergies with. We’re now preparing for Fuse to open so that we can begin to explore, test and develop the solutions that these companies offer.”

The Fuse initiative attracted over 80 applications from a variety of enterprises, a quarter of which focus on workflows (26%); intelligent document-focussed businesses accounted for 23% of applications, while platforms (22%) and regtech (19%) each accounted for one in five. In terms of development stage, just under half of the applicants (46%) have existing users, while 40% are at the prototype phase and 14% are still at concept stage.

Just over half of applicants (55%) revealed that the primary type of assistance sought through the Fuse programme related to business development or marketing, this was closely followed by product development (46%) and testing (26%).

Matthew Dickinson, CEO of Vable: “We’re delighted to have been selected by Allen & Overy to work in Fuse alongside their technologists and lawyers. This is a great opportunity for Vable to continue developing new and innovative technical solutions to help our law firm clients deliver their services in smarter, more efficient ways”.

Atrust Computer Corp., the leading thin client computing and server manufacturer, announced on 8th September the appointment of SA-Distribution Ltd and TooManyClouds as its’ Master Distributor for the UK/Ireland market Atrust has focused on providing cost-effective and proficient solutions to small and medium enterprises (SME) for many years. To meet the growing demands for VDI, Atrust is expanding its services to the region and providing the best quality products to UK/Ireland.

“What makes Atrust thin and zero clients unique, is that they are compact, efficient and noiseless.

All data is stored on a server and can be centrally controlled.

What’s even better is the simple management and maintenance.

Atrust self-developed management tools, Atrust Client Setup (ACS) and Atrust Device Manager (ADM), are provided for tasks like automatic configuration, firmware updates and remote troubleshooting. Additional IT administration is almost not necessary.” said Jason Brooker, Director of Atrust Europe.

“Through partnerships with industry leading vendors, such as Citrix®, VMware® and Microsoft®, Atrust is able to provide a total solution for all customer segments, from small businesses to corporate enterprises, whilst offering a wide range of hardware and software solutions.” Jason Brooker added.

“Turn one into many is the main concept of Atrust server-based solutions, meaning that our solution can be tailored to meet diverse requirements in almost any field. It is perfect for organisations that need to do more with less,” said Jason Brooker.

We are pleased to work with both of our new distributors who each bring a different value add to the table, Atrust are now only working exclusively with SA-Distribution Ltd and TooManyClouds for the UK/Ireland market.

SA-Distribution is a leader in the distribution of Endpoint Devices and Management, who have over 10 years’ experience in selling Thin Clients and Virtualisation solutions.

Stefan Lourens - Technical Director SA-Distribution Ltd said It’s a fantastic opportunity to be given distribution of Atrust’s market leading Hardware and Software Thin clients across the UK & Ireland.

We are looking at making Atrust one of the top three vendors in the UK market and believe with their dynamic and agile approach we will be successful very quickly.

Too Many Clouds, is a UK based cloud and disruptive technology consulting firm and distributor.

Who partner with resellers in all regions and sectors to identify which of their customers would benefit from a move to a virtualized environment or the cloud, and transform their business’s IT environment. They are a leading advisor on business cloud and virtualisation infrastructures.

We are all excited about the partnership with Atrust. “Too Many Clouds is now able to offer a complete end to end solution to their partner network. Driving value is the key to every solution we hand pick to distribute” said Jazz Padda, Managing Director Too Many Clouds., Atrust’s product portfolio is without a doubt one of the best I’ve seen in sometime, the management console along with the competitive cost ensures that our resellers have a competitive edge. Continued Jazz Padda.

SME NEWS / September 2017 5

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Charging Forward in the Fight Against Chargeback Fraud As online banking and shopping become ever more popular, chargeback fraud is quickly becoming one of the fastest growing problems for SMEs- here’s how to beat it.

Increasing numbers online sellers are becoming victims of mass fraudulent buying, new research from King’s Business School reveals. The researchers provide vital advice for users of e-commerce platforms like eBay on how to protect themselves.

Professor Stuart Barnes and his co-authors have created a conceptual plan that aims to reduce the huge losses online retailers suffer from chargeback fraud – which occurs when buyers claim a refund for purchased items without returning them, typically on the basis of unfounded excuses such as “items not delivered” or “transactions unauthorized”.

“With vast numbers of SMEs selling products and services online to buyers all over the world, Chargeback Fraud has become a growing and massive problem in global e-commerce.

Billions of dollars are lost every year,” says Barnes, “yet existing research has focused on the

notion that buyers are subject to opportunistic sellers.”

The researchers discovered an urgent need to protect sellers from the fraudulent behaviour of buyers – recommending lobbying and putting pressure on financial institutions to reduce lengthy chargeback periods. Currently, buyers can contact their banks to exploit a credit card protection policy that allows them to reverse charges for many months if they are not satisfied with the ordered items.

Based on a survey of over 400 online sellers on DHgate.com, one of the major cross-border e-commerce websites connecting SMEs in mainland China with overseas buyers, the researchers developed and tested a model that identifies a set of operational measures to enhance sellers’ trust and reduce their perceived risk, particularly through greater transparency of a buyer’s identity, signature mechanisms – such as smartphone fingerprint apps, and more effective tracking of goods in transit.

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This is particularly important because, unlike face-to-face transactions in store where the credit card institutions take full responsibility in disputes, an online merchant is held accountable for the loss of delivered items despite measures taken to verify the transactions.

This research by King’s Business School was carried out with Hohai University, University of Alabama and Kent State University, and published in the Information Systems Journal.

It offers business owners and interested parties valuable insights into how to avoid this increasingly prevalent problem.

g Charging Forward in the Fight Against Chargeback Fraud

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Cybersecurity to Support SMEs

Cybersecurity to Support SMEs Israel’s CYBONET launches comprehensive cyber security solution for SMEs CYBONET, an international information security solutions provider headquartered in Israel, has announced the release of its newest cyber security solution, Cybowall, a threat detection and response platform engineered for small and medium sized enterprises (SMEs). Combining both affordability and functionality, Cybowall provides organizations with a single security tool that delivers those capabilities necessary to identify and respond not only to active threats, but also to potential vulnerabilities within the network.

CYBONET (formerly PineApp) is an international provider of cyber security and information security solutions, installed on more than 3,000 systems and serving close to 40,000 domains in 60 countries worldwide.

Since its establishment in 2002, CYBONET has been working with SME clients, Fortune 500 companies, governmental organizations and some of the world’s largest Service Provider networks. The company provides comprehensive solutions for email security, URL filtering, complete and ongoing monitoring of networks and vulnerability assessment. CYBONET’s 24/7 customer support center is the heart of the organization, ensuring timely responses to a global customer base.

CYBONET’s headquarters and R&D department are located in Israel’s ‘Northern Silicon Valley’ in Haifa.

“As smaller businesses struggle to keep up with the emerging threats inundating networks around the world, it is becoming increasingly clear how ill prepared many organizations continue to be,” says CYBONET CEO David Feldman. “In many ways, smaller businesses today are an even more appealing target to cyber criminals than large enterprise networks. There are more of them and there is often less awareness of the threat, little to no technical staff with a security background, and certainly less budget to invest in security technologies.”

Smaller organizations are often at pains to justify security oriented IT spending, as technology managers struggle to quantify the ROI and clearly communicate the threat landscape to business owners.

A recent study conducted by the Ponemon Institute of small and medium-sized enterprises found that with the increase in malware attacks, only 13% of the respondents said they felt prepared to prevent a malware attack, and a staggering 51% of the respondents claimed to have already experienced a ransomware attack - though many of these organizations had not reported it for fear of damaging their reputation.

Cybowall is a non-intrusive, agentless solution that provides complete and continuous monitoring of an SME’s network across all protocols and extending to all endpoints. The solution ensures full network visibility and protects networks in real time by detecting and reacting to threats as they arise. Cybowall enables organizations to quickly detect potential vulnerabilities and

active breaches; automatically respond to threats as they are discovered; manage and report on compliance (GDPR, PCI-DSS, ISO and other standards); and record and analyze all events and incidents within the network for further investigation.

Additionally, Cybowall empowers smaller organizations by combining multiple cybersecurity tools in one affordable solution.

The solution utilizes a multivector approach and correlates network and end user data from multiple sources to provide insight into endpoint tampering and malware.

Alongside this, Cybowall leverages network and endpoint detection of Advanced Persistent Threats and deploys network trap decoy technology to identify malicious lateral movement and trap attackers that have breached perimeter defenses. In addition, integrated asset mapping, vulnerability assessment, threat detection and event correlation provide a holistic view of an organization’s security posture and critical system configuration, facilitating relevant responses such as patch management prioritization.

David Feldman concludes: “The Cybowall multi-vector threat detection and response solution empowers organizations to meet today’s cyber security challenges. It reflects the need for an affordable, integrated solution with a single pane of glass view to help SMEs identify and mitigate information security breaches and protect their valuable data and business as a whole.”

SME NEWS / September 2017 9

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Millennials Make Great Employees Says Furniture Specialist As SMEs globally face skills shortages and employment issues, DBI Furniture Solutions provides five reasons why millennials make great employees Millennials have had more than their fair share of bad press lately.

Dubbed the ‘go nowhere’ generation, they’re often associated with a lazy, risk-averse attitude, but are they just misunderstood?

With inspirational millennial entrepreneurs making headlines and many businesses investing in a millennial workforce, it would seem so. Nick Pollitt, Managing Director of office furniture provider DBI Furniture Solutions, spoke to a range of businesses and found that millennials could be one of your business’s biggest assets.

1) They crave responsibility and thrive when empowered One of the most common criticisms aimed at millennials is that they’re self-entitled – possibly down to their parents’ openness to involve them in family decisions as children.

Giving them a sense of responsibility from a young age, this kind of parenting has led many young people to feel they should also be able to have similar input in the workplace.

However, this trait can actually be of significant benefit to employers if they approach it in the right way. Give a millennial employee ownership of a particular area (no matter how small), and they’ll feel infinitely more valued, and that their work is having a real impact on the wider business.

Joshua Hebert, CEO of Magellan Jets, says: “Give millennials a boring task without a reason, and they’ll give you boring results. Give them a share in the idea you’re putting into play, however, and they are more likely to turn in work you never imagined.”

Boosting morale and motivation, businesses adopting a team structure that focuses on empowering younger employees are likely to see a happier, more dynamic workforce. This kind of environment also breeds skilled workers, with further benefits down the line when these employees are able to step up to higher positions without hesitation thanks to their experience.

2) They’re open to change Thanks to their parents encouraging them to speak up, millennials are conditioned to

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openly question processes in a business if they think they can be improved.

Rather than starting work and blindly following the rules because “that’s how things have always been done”, millennial workers are open to change and likely to challenge things when older workers would perhaps be more reserved.

People development consultant Susy Roberts says: “Generation Y aren’t more demanding – but they are different. They’ve been brought up in a team environment and encouraged to speak up when things aren’t right. And this, as any good business coach will tell you, is simply best practice.

With millennials, it’s definitely not all about money. An open working culture that respects individual views and opinions is essential.”

While some business owners may see this as a lack of respect for authority, that is simply not the case. Keen to make their mark and not afraid to challenge the status quo, millennials can help shape a business for the better, bringing in inventive ways of thinking that can streamline processes and increase efficiency.

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Millennials Make Great Employees Says Furniture Specialist

3) They’re on a constant mission to better themselves (and your company) Another frequently discussed millennial attribute is their desire to develop and progress.

While some people may see this as a negative thing (and the reason for a higher turnover of millennial staff), it can also be seen as highly positive. Who wouldn’t want a workforce that’s driven to improve and expand their skillset?

95% of millennials said they are motivated to work harder when they understand the importance of a particular task within the context of a company’s big picture goals. One way to harness this is to actively help and encourage them to learn everything they can about the operation at hand.

Through learning new things, millennials can quickly become experts in their field, becoming serious assets to any business in the process.

4) They’re digital natives Raised by computers and smartphones, millennials are the first generation born in today’s tech-centric world. An essential part of their daily lives, 53% of millennials say they’d rather lose their sense of smell than access to their devices.

With advancements in technology changing businesses all over the globe, the digitalsavvy nature of millennials means they’re immune to change. Able to adapt almost effortlessly, the younger workforce requires next to no training when it comes to adopting new processes.

Not only does this save businesses a lot of time, it means you have a workforce that is instantly familiar with the latest tools (e.g. social media) and knows how to use them to produce results.

5) Their productivity is through the roof (in the right environment) Even if the lazy stereotypes are true under normal conditions, there’s a relatively simple solution to unlocking the incredible potential of the younger generation in the workplace.

Forward-thinking businesses are coming to the realisation that, when it comes to millennials and productivity, creating the right environment is a key factor.

Gemma Spinks, Director at Neo PR, says: “At Neo PR we love hiring young, vibrant, hard-working millennials, but we appreciate that they do like to work in a slightly different way. We have tailored our office to keep our employees motivated, engaged, active and enjoying themselves.”

Ben Garry, a 20-year-old SEO Executive, is a big fan of vibrant work spaces. Speaking about his time at Impression agency in Nottingham, he says: “For me, working in this kind of environment has really helped me to integrate with the wider team. It makes collaborative working much easier; not only do we have plenty of spaces for meetings, but the more informal chats over a table tennis game or a beer on a Friday evening can lead to new ideas and more creative strategies.”

Whether you believe the stereotypes or not, investing in millennials is the future for every business.

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Foresight Williams Technology EIS Fund: Supporting SMEs Foresight Williams Technology EIS Fund invests £500,000 in Utonomy, a pioneering intelligent gas grid solutions provider. The Fund aims to support disruptive technologies through high-performance engineering and proven investment management Foresight Group LLP has recently announced the investment of £500,000 on behalf of the Foresight Williams Technology EIS Fund into Southampton-based Utonomy, a ground-breaking intelligent gas grid solutions provider. The transaction represents the Fund’s first investment.

This innovative transaction represents the Fund’s first investment, with plans to make investments of up to £2 million into at least ten qualifying UK SMEs, supporting the next generation of engineering technology success stories in the UK. Established in 2015, Utonomy has developed an innovative technology for reducing leakage in gas distribution networks.

Its unique “internet of things” solution automatically optimises gas distribution pressures through electro-mechanical actuators retrofitted to the network and controlled by intelligent, cloud-based software.

The leakage of methane from gas distribution networks is

a massive global problem with over 300 bn MWh of this potent greenhouse gas lost from networks around the world each year. This is estimated to cost consumers more than £5 bn per annum.

More importantly, leakage of methane has a serious impact on the environment, releasing the equivalent of 1.7 bn tonnes per annum of CO2 into the atmosphere – more than four times the total emissions of the UK. Building on their proven expertise in precision engineering, systems integration and optimisation, Williams Advanced Engineering is well-placed to support the design and development of the actuator technology, a critical component of the Utonomy gas network management solution. Foresight’s experience in growing businesses and expanding them globally will be invaluable to Utonomy in the commercialisation of their technology and the expansion of their business.

Adam Kingdon, CEO, Utonomy, commented: “We are delighted to receive investment through the Foresight Williams Technology

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EIS Fund. This will enable us to complete the product development, certification and customer trials of our innovative solution for reducing methane emissions. We are very pleased to get the chance to work with Williams Advanced Engineering to develop our technology further and to have the support of Foresight to grow Utonomy into a world leading company.”

Matthew Burke, Head of Technology Ventures, Williams Advanced Engineering, said: “Utonomy is an exciting business and their technology is a great fit for Williams Advanced Engineering. Our engineers are looking forward to working with them on the electro-mechanical actuator and control systems, and we are confident that we can help them accelerate their product design and development going forward.”

Bernard Fairman, Chairman, Foresight, commented: “We are delighted to announce in collaboration with the Williams Advanced Engineering team, the Foresight Williams Technology EIS Fund’s first investment.

Utonomy offers a truly exciting proposition that addresses a

global problem. The experienced management team has already achieved a considerable amount of success over the past two years in terms of development and we now have the opportunity to support the business as it looks to capitalise on global opportunities.”

“Through the Fund we will continue to look to support highquality disruptive technology leaders seeking EIS funding in order to develop and commercialise their proposition.”

Craig Wilson, Managing Director, Williams Advanced Engineering, commented: “We’re very pleased to be announcing the first investment from the Foresight Williams Technology EIS fund. Williams Advanced Engineering and Foresight launched this Fund with the vision to support emerging technologies and innovative solutions to global problems. Thanks to four decades of successful operation at the pinnacle of motor racing, and vast experience in technology development and complex engineering delivery, Williams Advanced Engineering is very well placed to support Utonomy and its pioneering technology.”

Foresight and Williams announced the unique collaboration in November last year to combine the Williams Advanced Engineering team with Foresight’s successful investment track record. The fund enables investors to qualify for relief under the UK Government’s Enterprise Investment Scheme (“EIS”) for investment into early stage UK SMEs with strong intellectual property in their own specialist fields. The Fund plans to make investments of up to £2 million into at least ten qualifying UK SMEs, supporting the next generation of engineering technology success stories in the UK. Overall, the future looks great for the fund, as Foresight has a strong 30+ year track record of fund raising and investing in UK SMEs, managing more than £830m for some 22,000 shareholders in its family of Venture Capital Trusts (VCTs), Enterprise Investment Schemes (EISs) and Inheritance Tax Solutions.

g Foresight Williams Technology EIS Fund: Supporting SMEs

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g Funding the Future

Funding the Future Varengold Bank AG to provide £45m to UK SMEs through MarketInvoice

Business finance company MarketInvoice has signed an agreement with Varengold Bank AG to provide £45m funding annually on its invoice finance platform. This will fund working capital solutions for businesses across the UK. Overall, sums advanced to UK businesses from institutional investors via MarketInvoice have increased more than 4-fold since 2014 from £27.8m to £116.3m in 2017. Cumulative funding from institutions stands at £296.2m which represents a quarter (26%) of the total funds advanced to UK businesses.

MarketInvoice has reached the landmark milestone of providing £1.5b funding to UK businesses.

The first £1b was achieved after 5 years of trading in December 2016 and just 10 months later, the company has reached £1.5b. Supporting 18,700 jobs at the businesses MarketInvoice serves, over 70,000 invoices have been funded to help ease cash flow and become an enabler for growth and expansion.

August 2017 was a record funding month at MarketInvoice since it launched. £74.1m worth of invoices were funded to

businesses across the UK, a 109.4% increase on August 2016 (£35.4m).

The recent increase in interest from global institutions and rise in funding levels has come since the launch of MarketInvoice Pro and mirrors the up-take of the product by UK businesses.

MarketInvoice Pro is a confidential invoice discounting facility, launched earlier this year, offering businesses a funding line against their outstanding invoices. This product upgrades the MarketInvoice offer from its long-standing invoice-by-invoice product called Select.

Dan Walker, Head of London Office, of Varengold Bank AG commented: “We have been looking at the fintech sector for some time. MarketInvoice and its peer-to-peer invoice finance platform presented a fitting opportunity for us. In particular, we were attracted by their products, approach to risk management and ambition for growth.”

Additionally, Anil Stocker, CEO and co-founder of MarketInvoice, commented on this project and how it would impact the UK SME market.

“Institutions have played a significant role in our growth story and over the past few years. This commitment from Varengold is further proof of our ability to provide finance to high growth businesses across the country, we’re excited by

their support of our mission.”

“We look forward to building on this relationship as we scale into larger funding lines through our new MarketInvoice Pro product. I’m sure we’ll see many more examples of this type of collaboration in the coming months.”

On reaching the £1.5b milestone, Anil Stocker added: “Our whole team is proud to be supporting the back-bone of the British economy – businesses doing great work in media, technology, design, construction, manufacturing, education, and many more. This is a huge milestone for us as a funding platform. We started the company to provide businesses with choice, flexibility and an easy-to-use funding solution.

Companies have been able to access funding from £10,000 to £3 million against invoices, to fund their working capital, which is vital to the success of small companies dealing with growing orders and long payment terms. This funding has supported fast growing companies to launch new products, hire more staff, and export to new markets.”

Looking ahead, MarketInvoice’s main strategic ambition is to broaden its reach to be able to support a wider range of businesses, from start-ups to larger businesses looking to scale up. The company aims to help even more companies get paid faster by financing their invoices, so business owners can save time and focus on running their business.

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Health and Safety Course Keeping SMEs Safe Essential Skillz the global leader in online safety training and compliance software, offers advice and a customisable course, which examines how slips, trips and falls occur in different work environments, helping businesses navigate the costly consequences caused by these types of accidents in the workplace.

EssentialSkillz Slips, Trips, and Falls eLearning course explains what could be considered as workplace hazards, and looks at how these incidents occur in a variety of working environments. It identifies the importance of risk identification, accident prevention and good housekeeping procedures.

The course also highlights the responsibilities of each employee to protect themselves and others, by following the relevant procedures.

Obligations under the Health and Safety at Work Act 1974 places a responsibility on the employer “to ensure, so far as is reasonably practicable, the health, safety and welfare at work” of all their employees. This includes protection of workers and the public from risks associated with slips, trips and falls. Performing a risk assessment by a qualified member of staff, in all workplace areas, will assist in identifying hazards and therefore, reducing the risk of accidents.

A common-sense approach can significantly reduce the incidents of slips, trips and falls without adding significant business costs.

For example, spillages should be cleared up immediately, wet floors can be identified by using appropriate signage, uneven levels can be accessed safely by use of ramps, handrails and adequate lighting, and poor lighting should be addressed immediately.

Julian Roberts, CEO at EssentialSkillz, explains how businesses can benefit from this course: “During 2014/15, there were 611,000 self-reported workplace injuries.

This included 76,054 non-fatal injuries and 198,000 self-reported injuries which led to over 3 days’ absence and 152,000 led to over 7 days absence. It is reported that slips and trips cost £512 million to employers per year, £133 million to the National Health Service and cause incalculable cost to human life. With this in mind, it is not an area of health and safety that employers and their workforce can afford to ignore.

“Whatever sector you work in, your staff, customers, contractors and members of the public are all at risk from slips, trips and falls.

Prevention can help reduce the number of

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injuries, the cost of your employer’s’ insurance and legal costs.”

Slips, trips and falls occur in all industry sectors, so the eLearning course from EssentialSkillz can be customised to meet individual business needs, ensuring it is targeted and appropriate for each audience. This also takes into account the specific policies and procedures at each organisation.

For no additional cost, a designated course administrator can edit the course content, and link to organisation-specific documentation.

Overall, as SMEs face increasing pressures on their workforces and ever growing amounts of sickness leave, the need for health and safety training is greater than ever, and as such the course offers the ideal platform from which both staff and management for SMEs from across the corporate landscape can engage in safe and supportive practices which enhance their day to day operations.

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Latest Acquisition Spells Shakeup for Technology Market Leading law firm Blake Morgan has advised Cubic Corporation on its acquisition of Deltenna Limited, a wireless infrastructure company specialising in the design and delivery of radio and antenna communication solutions.

Blake Morgan is a Top 50 UK law firm providing a breadth of legal services across the private and public sectors with a strong regional presence across southern England and Wales.

The firm has six offices: Cardiff, London, Oxford, Portsmouth, Reading and Southampton. With a long heritage and committed client base, the firm’s partners and teams provide a depth of expertise in their key sectors.

The firm has ambitious plans for growth to deliver more developed and broader services to its clients both in the south of England and Wales and more widely across the UK. The firm aims to deliver exemplary service to its clients and to make a difference through teamwork, integrity and innovation.

The acquisition is part of Cubic Corporation’s corporate growth strategy and the addition of Long Term Evolution and 4G technology to their portfolio will enable them to deliver the fast data rates needed to meet the critical communications needs of their customers.

Cubic Corporation designs, integrates and operates systems, products and services, such as combat training systems and surveillance, to the military, transportation and defence industries.

Corporate lawyer Mathew Wilson (pictured) led the deal, supported by partner Stephen Archibald.

This was a complex transaction and drew on expertise from across the firm including intellectual property, real estate, employment and pensions.

Norman Bishop, Vice President of Corporate Development at Cubic Corporation, said: “The addition of Deltenna aligns very well with Cubic’s culture of innovation and we are pleased to welcome them to our Cubic family “This is an exciting acquisition that will strengthen our capability of developing and integrating products that will change the way our military forces communicate, train and operate.

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“I would like to thank Mat and the team at Blake Morgan for their pragmatic, commercially astute and technically sound advice. Their desire to really understand our business and support our growth strategy was second to none. We look forward to working with the team again in the future.”

have a wealth of experience of advising on complex corporate transactions and have a long standing relationship with Cubic Corporation providing first class corporate advice to their senior management team.

Keith Taylor, Managing Director of Cubic Defence UK, added: “Having experienced the professionalism of Mat Wilson and the team from Blake Morgan on previous transactions, they were the obvious choice of legal advisor on what is an important deal for Cubic. I would like to thank Mat and the team for navigating us through what was a complex deal that required a range of legal specialisms from within the firm to ensure a successful completion.”

Blake Morgan associate Mathew Wilson, commented: “It has been a privilege to work on another important technology driven deal for Cubic. Whilst the acquisition of Vocality International was highly complex, the Deltenna transaction was strategically important for Cubic and also required our technical expertise from across the firm to secure a successful outcome for our client. I would like to wish both Cubic and the Deltenna team every success for the integrated business for the future.”

This latest deal is the second high-profile transaction on which Blake Morgan has completed recently for Cubic Corporation, having successfully advised on their acquisition of Vocality International - a leading provider of embedded technology that unifies communications platforms, enhances voice quality, increases video performance and optimizes data throughput.

The corporate team at Blake Morgan, who were recently crowned Law Firm of the Year at the Solent Deals Awards,

Blake Morgan has an international portfolio of multinational client companies (public and private), SMEs, owner managed businesses and startups with a need for high-quality corporate and M&A support and advice. Its corporate team is acknowledged within the legal industry and in the independent legal directories, for providing a first-class level of service across a wide range of transactions including mergers, acquisitions, sales, private equity and joint ventures.

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Latest Acquisition Spells Shakeup for Technology Market

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Putting Power in the Hands of SMEs Power2SME raises $36 million to fuel growth and innovation.

Power2SME has announced that it has secured an additional $36 million USD in capital for its Series E Financing round, in order to continue its meteoric growth and dominance as a B2B Digital Ecosystem platform for SMEs. The latest round, representing the largest deal size for Power2SME, is a co-investment by its existing investors Inventus Capital Partners, Accel, Kalaari Capital and Nandan Nilekani with participation from IFC, a member of the World Bank Group.

Completing 6 years in January 2018, Power2SME pioneered the category of the B2B Buying Club for SMEs and boasts of a strong digital ecosystem platform for SMEs. Its increased portfolio offering addresses challenges in raw material procurement, finance and MRO needs. Its B2B raw materials buying club (Power2SME.com) aggregates demand from SMEs for raw materials and procures and sells these at competitive prices. Second, its platform (FinanSME.com) connects empaneled lenders with SMEs to provide working capital finance at better terms from financial institutions for purchases on Power2SME. Third is a one stop

shop addressing SME MRO needs (SMEShops.com) to meet the growing and frequent requirements of SME buyers for consumable industrial goods.

Today Power2SME, operates out of 7 offices and 14 states in India with a registered SME base of 50,000 SMEs. Power2SME’s fast paced growth has been driven by dramatic year on year growth of 2.6 times. The firm achieved profitability in November 2016.

Implementation of GST will further enable expansion of Power2SME into non-operational markets thereby increasing the number of SMEs it can reach out to.

Power2SME will use the additional financing to continue geo expansion, accelerate product growth and innovation, invest in additional sales and marketing resources, and continue evaluating strategic acquisition opportunities.

“Power2SME’s goal is to empower SMEs to reach efficiencies of scale thus driving profitability for them. Our work has been driven by our vision to make SMEs bankable.

Our deep networks and relationships with the banking sector and financial institutions helps us to make our SMEs succeed like never before,” says R Narayan, Founder and CEO, Power2SME. “This capital

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gives us additional resources to expand quickly and strategically into new markets, innovate rapidly, and deliver on our vision.”

“As demonstrated by their remarkable growth and widespread adoption, Power2SME clearly leads the market in the development and delivery of an Impactful B2B digital ecosystem,” says Parag Dhol, MD, Inventus Capital Partners. “Our investment will help Power2SME capitalize on the growing demand for their solutions, and accelerate the company’s pace of product innovation.”

Mahendran Balachandran, Partner, Accel expressed “Power2SME is the largest B2B commerce platform in India focused on delivering extraordinary value to SMEs, be it access to raw materials at highly competitive prices, access to working capital and introducing new technologies to improve procurement efficiency.”

“In 2012, we invested in Power2SME because we believed in SME growth story,” says Vani Kola, MD, Kalaari Capital.

“Since then, Power2SME has shown proof of concept of its procurement offering as well as its finance offering and has emerged as a leader in its category. For India, SME growth and empowerment will help in bringing up GDP contribution of the sector to the nation and Power2SME is leading this change from the front. We are committed to helping the team become the dominant player in this market.”

“MSMEs will play a critical role in making India a manufacturing hub; and thereby make the

growth process more inclusive. The opportunity for both the government and private players such as Power2SME is large and focused and continued contribution could well bridge financial inclusion for the sector,” says, Nandan Nilekani, Co –Founder and Non-exec Chairman Infosys Ltd. “Our investment in Power2SME will spur greater VC interest in the SME sector in the country and support India’s vision to become a global manufacturing hub,” said Ruchira Shukla, South Asia Regional Lead for Venture Capital at IFC, World Bank Group. “By working with SME-focused companies and partner financial institutions, we aim to improve access to finance for over one million SMEs in the next five years. Bridging the financing gap for women-owned enterprises is also a key focus for IFC’s strategy in India.”

Fundamentally, SMEs form a large part of the Indian economy, accounting for 45 percent of the country’s industrial output and 40 percent of its exports. India has the largest base of SMEs in the world after China, however Indian SMEs contribute only 8-10% to the nations GDP as compared to 60% contribution by SMEs in China. This is a huge opportunity for both the government and Industry.

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Putting Power in the Hands of SMEs

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Research Shows Poor Preparation for Digital Age Among UK SMEs British businesses are unprepared for the Fourth Industrial Revolution, with just 3% of employers viewed as ‘leading edge’, as Skype, Facetime and WhatsApp are increasingly popular with consumers, but research reveals that just 7% of British employees regularly use video conferencing at work.

Most British businesses are seemingly unprepared for the dramatic technology developments set to reshape the workplace in the next decade, according to the findings of a research report released today

by TalkTalk Business.

The Workforces 2025 Report, finds that the majority of British workers are frustrated to find themselves in office environments where they lack access to the right level of technology to do their jobs well. Less than 1 in 5 (17%) of British employees are regularly using instant messaging services for work, indicating that few British businesses are taking advantage of established technology solutions that have been around for a decade and already shown to lower business costs and improve collaboration and productivity.

The report also reveals that only a minority of British businesses are looking to prioritise technology investment to prepare for the impact of what the WEF has termed the Fourth Industrial Revolution. The rise of machine learning, Artificial Intelligence and robotics combined with shifting employment expectations, are all predicted to significantly shift the nature and practice of work in the developed world.

Research commissioned

by TalkTalk Business and conducted by YouGov has found that almost 2 out of 3 British employees (64%) believe that poor technology impacts their workplace productivity in some form. Top of the list of time wasters is a slow internet connection, highlighted by 40% of British workers. This is followed by having to use a work computer that is not powerful enough (36%) and having to use old versions of software and systems that keep crashing (29%). Almost 1 in 5 workers (17%) also feel that their time is wasted when trying to share and download large documents.

Frustration with inadequate technology in the workplace is highest among the new generation of millennials entering the world of work, with almost half of 18-24 year olds complaining that slow internet (48%) speeds or slow hardware (47%) keeps them from doing their job.

The Workforces 2025 report is published against a backdrop of historic poor productivity growth for the UK economy since the 2007 crash, with the UK falling behind other major economies including the US, France, and Germany. The latest productivity figures released by the ONS for the first three-months of 2017 showed a 0.5 % decline in hourly

22 SME NEWS / September 2017

output, taking the productivity of UK workers back to pre-financial crisis levels.

Another key issue was the divide between the way staff worked at home vs in the office. The report highlights a growing dichotomy between the advanced technology tools and services that people are frequently using at home, such as instant messaging, video calling and virtual assistants and what is by comparison, the use of traditional and dated technology in the work environment.

of integrated enterprise communications services by UK companies remains low. Whereas consumer use of services likes of Skype, Facetime and WhatsApp is increasingly commonplace, just 7% of British employees surveyed say they regularly use video conferencing at work.

When it comes to the use of instant messaging and business messaging services, such as Lync, only 17% of workers regularly use these collaboration tools in the workplace.

When asked to consider their employers attitude to technology and the use of collaborative communications tools, just 3% of British workers said they would describe their place of work as ‘Leading Edge’, categorised as access to hi-spec computers, laptops and software, super-fast and reliable internet connectivity and the use of cloud-based software and collaboration tools.

While the demise of email in the office has long been predicted, it seems that traditional business communication tools are firmly imbedded. Almost half (45%) of British workers believe email will continue to be the primary way they communicate at work over the next 5 years. Our reliance on traditional phone calls in the office is also not predicted to drop, only 24% of workers see their use of phone calls for work purposes decreasing in the next 10 years.

By contrast, most British workers (44%) describe their workplaces as ‘Traditional’ with useable but basic computers, telephones, and other hardware and slow to adequate internet speeds, systems, and connectivity.

Graeme Codrington, Futurist to TalkTalk Business, comments on the findings and discusses his ideas for improvement in the market.

Despite the focus over the past decade on the field of unified communications, the Workforces 2025 Report finds that adoption

“When it comes to the typical experience of workplace technology in the UK, we are seeing a growing digital divide between the services and tools

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we all use as consumers and the antiquated by comparison technology we’re forced to use in the workplace. For businesses, now is the time to catch up and separate the passing fad from the technology that will deliver tangible impact for years to come. Not only is this vital to remain competitive, but ultimately it is critical to survival.”

As part of the Workforces 2025 Report, YouGov also examined the technology priorities of British business over the next 10 years.

The research finds that most firms are preoccupied on fixing their basic IT infrastructure, rather than prioritising investment in strategic new technology areas.

The top technology priority over the next 10 years, selected by 55% of businesses, is ensuring an adequate internet connection. By contrast just 18% of businesses stated that investment in machine learning and artificial intelligence is a priority. Falling to just 6% for small businesses with fewer than 50 employees, that make up the bulk of the UK economy.

Less than a third (31%) of businesses surveyed stated that ensuring they make the best use of ‘Big Data’ is a priority in the next decade.

In conclusion, Kristine OlsonChapman, Managing Director at TalkTalk Business, provides her insight into the findings.

“Revolutions tend to come with little warning, but businesses have no excuse to be in the dark about the potentially transformative changes to the nature of work on the horizon.

How to prepare business for the impact of machine-learning and automation, and attract and retain a workforce with rapidly shifting expectations of what ‘work’ means, needs to be a top strategic priority. For UK business leaders, there is an increasingly critical need to align with the right partners who will help them innovate on their terms and take full advantage of the coming fourth Industrial Revolution.”

SME NEWS / September 2017 23

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SME Specialist Sees Lending Soar SME specialist Amicus Property Finance has recently announced a record £72m lending month in July. Confident short-term property lending market and national expansion seen as key factors in this exceptional growth.

Amicus Property Finance, the specialist short term property lender, today announces a record month of lending in July at £72 million. The firm has cited a confident and buoyant short-term property lending market as well as having expanded its offering further across the country with the opening of the Manchester office last year as key factors.

The company, which was formed in 2009, is a specialist lender providing short term property loans, SME lending and Working Capital solutions. Since 2009, Amicus Property Finance has lent more than £1 billion. The current property loan portfolio is made up of 83% residential properties and 17% commercial properties. Loans on average are repaid in 9 months and the firm typically lends between £50,000 and £7 million.

In February 2015, Amicus announced the acquisition of City-based SME lending brokerage, Norton Folgate Capital Group Limited including Norton Folgate Capital Consulting LLP to extend the firm’s specialist lending capabilities to SME asset finance and leasing, HNWI financing and SME business loans.

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In November 2015 Amicus launched a new commercial finance business, Amicus Commercial Finance. The business is led by John Wilde and David Hogg who built SME Invoice Finance Limited from start-up in 2000 and sold the business to Metro Bank PLC in July 2013. Amicus Commercial Finance provides a revolving working capital facility based on a proprietary invoice discounting platform which utilises the latest available technology and data extraction methodology.

July’s record figure covers a regional spread of loans.

Included is the refinancing of a commercial property building to enable the borrowers to obtain planning permission for a 240flat scheme in Surrey, a large commercial site with outline planning in Suffolk, and the purchase of a development site in the Midlands.

The firm has seen a strong first half of 2017 having provided more than £500 million of short term property loans last year, as it further expands its customer base among brokers, professional landlords and developers seeking finance for residential and commercial real estate assets.

Keith Aldridge, Managing Director at Amicus Property Finance, said: “We are delighted to have achieved a record month of lending.

We’ve seen tremendous growth over the last few years as our localised relationshipbased approach resonates well with property professionals looking for specialist lending solutions in a buoyant short-term property market.

“We build our most successful loans on the bedrock of effective collaboration and strong relationships. Furthermore through our new Manchester office we have expanded nationally, cementing a strong on-the-ground base to fund local projects and service clients who are often overlooked by more mainstream lenders.”

Amicus has seen consistent funding from the Omni Secured Lending (OSL) Funds. Vintages I, II and III have provided more than £500m of institutional thirdparty funding to the business.

During January and February 2017 alone Vintage III raised more than £200m of new institutional capital, which is being actively deployed to fund new lending activity.

Subject to authorisation, Amicus anticipates receiving its banking licence this year which will enable it to fulfil its long-term growth objectives by accessing an alternative and efficient source of funding.

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SME Specialist Sees Lending Soar

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Social Media Brings Success to SMEs Survey shows that SMEs believe that social media brings in the best quality leads to their business. Print, and other offline media, is rated the second-best quality lead generating channel, suggesting multichannel targeting is key to reaching the audience effectively.

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In a survey of over 200 SMEs by UK call tracking provider, Mediahawk, 62% said that social media brings in the highest quality leads and sales. Offline media such as print, including magazines, flyers and newspaper ads, bring in the second highest quality leads to their business (51%), revealing that small businesses must manage their marketing budgets to include both online and offline advertising in order to maximise reach and sales.

Mediahawk, which developed the survery is a leading call tracking and marketing analytics provider.

They monitor the advertising effectiveness of thousands of marketing campaigns for companies such as Worldpay, Porsche, Kia UK, The Caravan Club, Barchester Healthcare and Travis Perkins.

The company has been at the forefront of call tracking innovation since its inception in 2002, giving clients the ability to track online and offline activity that generate telephone enquiries. Website call tracking provides insights into visitor’s online journeys and the keywords, web pages and internet sources that result in phone calls.

Online delivers best return on investment for SMEs Offline advertising has a reputation for being an expensive venture, so it’s unsurprising that 64% of SMEs said online marketing delivers the best return on investment (ROI). But with over a third of business owners saying offline delivers the best ROI, businesses will need to look at balancing both online and offline marketing to continue to grow and be profitable.

This divide between offline and online lead sources further

Social Media Brings Success to SMEs

highlights the customers’ fractured path to purchase, containing multiple touchpoints of both offline and online channels.

To be successful, businesses need to know when and where to target their audience if they want to ease the path to conversion more quickly and seamlessly.

SMEs plan to increase budgets for social media in 2018 Social media was the most popular channel chosen by respondents for investment in 2018, with 55% of businesses planning to increase budgets in this area. The importance of this channel for future marketing is further enhanced by the fact that the majority of respondents also said social media provides the most valuable leads.

But with greater investment, it is paramount that this channel is attributed accurately within the overall path to purchase. Social media is typically a top-level interaction, so understanding how your audience move from your social channels to your other brand assets, such as your website or picking up the telephone, is also important.

How does advertising spend affect ROI and lead quality?

Of businesses that spend over £15,000 annually on offline advertising, 62% of this dataset said that offline brings in the best sales leads. This is to be expected with such a high investment in a notoriously expensive channel.

The majority of businesses with an annual turnover of up to £50,000 said that online advertising provided the best ROI, however it was businesses with a higher turnover, of £100,000 - £500,000, who said that offline marketing provided the highest return on investment.

Digital analytics often doesn’t include offline marketing and conversions 67% of those surveyed said they ‘ask clients how they heard about their businesses’ as their primary method of attribution.

Considering that the majority of SMEs said online advertising generates the greatest ROI, and has the broadest number of touchpoints, this is a dangerous and unreliable method to attribute sales back to marketing efforts.

Online analytics tools were the second most preferred method of attribution, utilised by 40% of businesses surveyed. However, ‘tracked telephone numbers’ was the least used form of attribution: a scary thought considering that despite print and offline media being the second highest quality driver of sales and leads according to respondents, they are not tracking these media, with many spending upwards of £5,000 a year on offline marketing.

Michael Morrell, Mediahawk’s CEO said “Even while spending more on offline marketing, businesses continue to cite social media as a better source of high quality leads. This highlights the need to properly attribute marketing spend and understand what works best for you. Tools like call tracking shine a light on the whole customer journey and drive smart marketing investment.”

Does globalisation affect channel ROI? Of those who operate internationally, 74% of respondents said that online advertising delivers the best ROI. The majority of these businesses that do operate in other countries are within the retail and ecommerce sector, suggesting that online is an easier channel to use to target their audience globally.

SME NEWS / September 2017 27

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ThinCats-Hot-tailing it to the Highlands Loan provider ThinCats, which specialises in SME funding, looks North to fund Scottish business ambitions.

ThinCats, the alternative business funding provider, has recruited an Origination Manager for Scotland, having identified the need for a dedicated presence in the area. As one of the pioneers of the alternative lending industry, ThinCats was founded in the aftermath of the global financial crisis. The aim has always been to offer loans to UK businesses struggling to access funding through traditional channels, and link them directly with investors via an online platform, offering attractive rates of interest unavailable through many conventional investment portfolios.

Starting from the belief that funding applications deserve more than just harsh number crunching, ThinCats uses innovative data analysis combined with a human touch to candidly assess each loan, listening to the story behind each case; providing real opportunity for SMEs, encouraging growth,

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development and advancement in UK business.

In December 2015, ESF Capital, the London-based institutional fund manager, acquired at 73.4% stake in ThinCats; providing investment, working capital and significant management and operational resource, along with underwriting capitals for loans on its platform. John Mould became CEO of ThinCats, while ThinCats founder Kevin Caley became Chairman.

in Business Development, supporting the SME market.

Geoff also has experience of working with scale-up entrepreneurial businesses via his involvement with the Hunter Centre for Entrepreneurship at Strathclyde Business School and their innovative, award-winning Growth Advantage Programme.

Discussing this latest development, Damon Walford, CDO at ThinCats, was keen to emphasise the firm’s focus on working with SMEs across the region.

Geoff O’Brien will be the key contact for Scotland, leading all new business origination across the region. He will be looking to develop relationships with growth businesses, commercial finance professionals and funding advisers, giving them access to a true alternative to traditional lenders.

“We have a number of strong relationships in Scotland, and it has become clear that there is a particularly high proportion of underserved SMEs, who are struggling to find the funding they need to develop, grow and realise their potential. We are very happy now to be in an even better position to help them out; Geoff is the ideal person to provide expert, local support and guidance.”

Geoff has significant, relevant experience for the position, through his Director level roles at the likes of Santander and Clydesdale Bank, specialising

As Scotland becomes an increasingly important region in the UK, this latest appointment offers many exciting opportunities for SMEs in the country.

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ThinCats-Hot-tailing it to the Highlands

SME NEWS / September 2017 29

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UK SMEs to Seek Asian Opportunities After Brexit, Research Shows Research on behalf of Hong Kong Trade Development Council reveals that Brexit has UK SMEs are looking East for global growth.

Research for Hong Kong Trade Development Council (HKTDC) in advance of its flagship “Think Asia, Think Hong Kong” event returning to London on 21 September 2017, found that almost half (45%) see Hong Kong the gateway into the Chinese mainland and other Asian countries. Although confidence for business growth in Europe and Asia are broadly similar (57% and 62% respectively) 36% of UK SMEs state that the Brexit debate has made the prospect of trading with Hong Kong or China more attractive.

Over a quarter (28%) of UK SMEs believe that it is easy to set up as a foreign business in Hong Kong and almost a quarter (21%) are attracted to its low tax rates. Additional assets identified include Hong Kong’s good levels of English (51%), the long standing political relationship between Hong Kong and the UK (32%) and its proximity to China (36%). The biggest opportunities that businesses recognise for launching into the

Chinese mainland is its huge consumer base (42%), followed by its growing middle class (35%) and ability to be early adopters of technology (27%), whilst the challenges include the language barrier (57%), the rule of law and perceived red tape and regulation (both 41%).

According to the Office for National Statistics’ (ONS) latest Annual Business Survey on Importers and Exporters, only 5% (104,600 out of a total of 2,129,800 businesses) of UK companies were merchandise exporters in 2015, while the number doubled to 10% (216,000 out of 2,129,800) if services exporters were also included. The Hong Kong Trade Development Council suggests that Brexit offers the UK an opportunity to develop a more independent, autonomous trade policy towards Asia that can play to its economic strengths.

Both goods and services (i.e. financial services, high-tech solutions and educational services) exporters are in a prime position to ride on the structural transformation underway in

30 SME NEWS / September 2017

many Asian countries, which are moving towards a service-based economy, bringing benefit to both sides.

The research suggests that UK SMEs are underestimating what a well-established route launching into Hong Kong is.

When asked how many UK companies currently operate in Hong Kong, 32% could not identify any, while the strongest response (20%) came for 250500, when the actual answer is closer to 1,000. Not surprisingly the big global names of HSBC and Barclays were the most recognised at 51% and 41% respectively, but even wellestablished brand names such as Vivienne Westwood and Twinings scored very low at just 7% and 6% respectively.

William Chui, Regional Director, Europe of the HKTDC comments: “It’s great to see that UK SMEs are identifying the benefits of launching into Hong Kong as part of their global growth strategy at this time of European uncertainty. And also, that they are valuing Hong Kong as a hugely well positioned launch pad for businesses wanting to ‘crack’ the lucrative but notoriously challenging to

penetrate Chinese mainland market. What I think a lot of UK SMEs are failing to realise however, is how many UK businesses of their size are making a real success of launching into Hong Kong.”

Hong Kong is the UK’s secondlargest export market, thirdlargest import source and third-largest trading partner in Asia. Hong Kong is also the UK’s second-largest source of foreign investment and largest outbound investment destination.

Just 16% of businesses surveyed have traded with Hong Kong or China in the past year, but a further 26% have been considering it over that time frame. Interestingly, this appears to be a youth market with the young entrepreneur bracket the most likely to have traded with Hong Kong in the past 12 months (25%) compared with those aged over 55 (15%).

Overall, the areas in the UK that have put the most consideration into branching into Hong Kong are the North East (41%) followed by London (34%), and then Yorkshire and the Humber (30%).

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UK SME’s to Seek Asian Opportunities After Brexit, Research Shows

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