Business Matters September '08 by Business_Matters

BM164_01

27/8/08

15:56

Page 1

Business Matters: September 2008

Business Matters September 2008

The UK’s leading magazine for the SME business owner

£3.00

RECRUITING:

GETTING THE RIGHT CANDIDATE FIRST TIME! MIKE HARRIS/ NORTH EAST FOCUS/WINING AWARDS

21 WAYS TO BOOST SALES

GIVING BACK DONATING TIME IS JUST AS GOOD AS MONEY!

www.bmmagazine.co.uk

NORTH EAST FOCUS • IN BUSINESS • NEWS • MARKETING • TECHNOLOGY • MOTORING

BM159_68 copy:Layout 1

27/8/08

16:22

Page 1

Are there times when you really wish you had more back up?

Adaptable recruitment software

08712 501502

www.colleague-software.co.uk email: sales@colleague-software.co.uk

BM164_04:Layout 1

1/9/08

01:47

Page 1

Business Matters September 2008

£3.00

The UK’s leading magazine for the SME business owner

RECRUITING:

GETTING THE RIGHT CANDIDATE FIRST TIME!

This Month

WAYS TO BOOST SALES

GIVING BACK

DONATING TIME IS JUST AS GOOD AS MONEY!

NORTH EAST FOCUS • IN BUSINESS • NEWS • MARKETING • TECHNOLOGY • MOTORING

• • • • business strategy 16

• • • • regular features

Graduate Recruitment

Tking on graduates is no longer the preserve of multinational companies

Managing an MBO

Advise on selling the company to your management

Winning awards

Why winning awards brings much more than just kudos when it comes to beating your rivals

IN Business

What has been happening in business in the last month.

Interview

Diane Priestly talks to Mike Harris about his business successes with Egg & First Direct

Ask Brad

Brad Roser joins us to answer your all important business questions to help you grow your business

Giving back

Taking your CSR policy to a hands on level

Finance

Financial Advisor Gavin Porritt explains how you can use use pension to better use.

North East Focus

We spend some time on Teeside looking at the entrepreneurial skills taking shape in the city

Do y you ou u have the tool right to ool ffor or the jjob? ob ha 80% of small business owners have ave no idea if their ITT system ﬁts their bu usin business. 80% of small businesses fail within with hin 5 years. Sources: Sour ces: census.gov, census.gov, Dun n & Bradstreet, Bradstreet, BERR

We provide We provide MAC & PC support and IT coaching services. servic ces. We W e are are small business busin ness specialists, technologists, technolog gists, geeks, gadget addicts ad ddicts and general generra al lovers of o people and technology. techn nology. Give us a call call.

08456 447758 447 7758

3 • issue 164 Business Matters

helpme@theengineroom.co.uk helpme@theengine eroom.co.uk

Technology Reviewed

We take a look at the latest gadgets to help you work smarter

BM164_035.qxd:Layout 1

1/9/08

Yh[Wj_l[ l[djkh[ ^begdkZ XVh][adl

01:10

Page 1

Venture Finance can help you to relieve the pressure of UHVWULFWHG FDVKÃ&#x20AC;RZ

9HQWXUH FDQ UHOHDVH XS WR RI WKH YDOXH RI \RXU RXWVWDQGLQJ LQYRLFHV DQG RXU IDQWDVWLF UDQJH RI VHUYLFHV FRXOG XQORFN HYHQ PRUH

We are a premier independent Invoice and Asset Based Lender ZLWK \HDUV H[SHULHQFH KHOSLQJ thousands of businesses raise JUHDWHU IXQGLQJ IDVWHU

2XU FUHDWLYH Â¿QDQFH VROXWLRQV DUH ZUDSSHG LQ DQ DZDUG ZLQQLQJ VHUYLFH DQG RIIHUHG ZLWK %DG 'HEW 3URWHFWLRQ IRU WRWDO SHDFH RI PLQG

<79JEH?D= r ?DLE?9; :?I9E EKDJ?D= r 7II;J 87I;: B;D:?D= DJ;; r 87: :;8J FHEJ;9J?ED r ?CFE EHJ <?D7D9; IC7BB <?HCI BE7D =K7H7D ;NFEHJ <?D7D9; r FH;C?KC 7:L7D9; r 8BE9A :?I9EKDJ?D=

,I \RXU DQQXDO WXUQRYHU LV Â&#x2026; N RU PRUH FDOO RXU WHDP IRU DQ LQIRUPDO FKDW

%-%% *&* %*( %-%% * *&* %*(

lll#kZcijgZ"Ã&#x2019;cVcXZ#Xd#j` lll#kZcijgZ" "Ã&#x2019;cVcXZ#Xd#j`

BM164_05Q7.qxd:Layout 1

31/8/08

21:49

Page 1

EDITOR’S LETTER I

t’s official - summer is over. What little sunshine we had is disappearing fast, the holidays are gone and the kids are back at school. It’s time to get ready for Christmas and the end of the year that gave us the credit crunch! You may have noticed that this issue of Business Matters comes with a supplement full of useful tips and insights to help you boost your marketing. Here in the main magazine you’ll find we’re packed with ideas on weathering the economic storm. We’ve got twenty-one tips on how to increase your sales with better management, incentives and referral marketing. If online advertising is your thing, look out for the £30 Google AdWords voucher free wth this edition. We’re also taking to the road, with Bill Hilton heading North to Teesside to uncover budding business gems in an area with a chequered economic past.

North East Focus - 32

Have you visited our website? BMmagazine.co.uk, updated weekly, provides you with the latest news, views and advice on how to run your businesses better. Subscribers can also join the social network we’re developing with our partners Business Scene to share problems and make contacts. Enjoy the magazine, and please don’t hesitate to get in touch with your comments and suggestions!

Richard Alvin Managing Editor ralvin@clearsightpm.co.uk

Managing Editor - Richard Alvin - ralvin@clearsightpm.co.uk Editor - Simon Clarke - sclark@clearsightpm.co.uk Associate Editor - Bill Hilton - bhilton@clearsightpm.co.uk Contributors: - editorial.bm@clearsightpm.co.uk Jim Moore, Felicity Cousins, Gavin Porritt, Donald Findley, Mark Prigg, Louise Shaw, Derek Bedlow, Andrew Price, Sarah Bethell Production Manager - Stewart Hyde - shyde@clearsightpm.co.uk Designer - James Connolly - jconnolly@clearsightpm.co.uk Online Editor - Paul Jones - pjones@clearsightpm.co.uk Head of Advertising - Rhidian Jones -rjones@clearsightpm.co.uk Tel: 020 7148 3861 Email: info@bmmagazine.uk Subscriptions - subscriptions@bmmagazine.co.uk Printed by – Stones the Printers, Oxford

www.bmmagazine.co.uk

Giving Back - 28

Published by - Clearsight Publishing & Media Ltd Ensign House, Canary Wharf, London E14 9XQ Copyright: (C) 2008 Clearsight Publishing & Media Ltd. ISSN 1754-3096 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior consent of the publishers. The views expressed in Business Matters are not necessarily the views of the publishers. Whilst Clearsight Publishing Ltd has made every effort to ensure the accuracy of the information contained in this publication, neither they nor any contributing author can accept any legal responsibility for any consequences that may arise from errors or omissions contained in this publication or from acting on any opinions or advice given. In particular, this publication is general and not a substitute for professional advice and you should consult your own professional advisors where appropriate.

CLEARSIGHT PUBLISHING & MEDIA Inform • Educate • Entertain

Business Matters issue 164 • 5

BM164_06_07_08Q7.qxd:Layout 1

31/8/08

21:39

Page 1

News Live longer - UK women - don’t let your US on your bike cousins race ahead! With petrol prices hitting new heights, more people are turning to pedal power to get to work, and to get fit – research suggests cyclists could live two years longer than average. According to Europe’s leading office and workplace equipment supplier, Welco, orders for company cycle sheds and ramps have never been healthier - they have seen a 100% increase in sales over the last two months. It has never been a better time to leave the car in the garage and start cycling to work. In fact, under the 1999 Finance Act, if employers sign up to the cycle-towork scheme, it is a win–win situation – companies that provide bicycles and accessories as a tax-free benefit save National Insurance and get healthier employees. Under the Government’s Green Transport Plan, which promotes healthier ways of getting to work while reducing pollution, employees taking advantage of the scheme get savings of up to 50% on the retail price of bikes and accessories. Birmingham-based Welco has seen significant increases in orders from local authorities, health departments, the police and companies both large and small – all of them looking to provide new or increased cycle facilities for their staff. Welco’s chief executive, Adrian Reeve, says that ‘cycling to work benefits everyone. It helps relieve traffic congestion; helps cut pollution; helps people save money they would have spent on petrol; helps reduce global warming; and often reduces their travel time. And with the tax incentives that are available, people should take up the challenge. ‘Cycling is no longer the preserve of Lycra Man. It is now regarded as a serious means of transport. With the prospect of the $200 barrel of oil, the bike should be viewed as a primary form of transportation – a free, calorie-burning, mobile gym.’

6 • issue 164 Business Matters

Research recently undertaken in the USA found out that women are twice as likely to start a business in the US compared to women in the UK. With that in mind, and alongside other research that suggests that more women would start their own business if they didn’t fear failure, Women Unlimited has set itself a mission to support women across all aspects of their business lives. It will support business women who are starting up or who want to increase their profits by sharing success strategies and stories. The organisation’s training content is created by women who are already managing their own successful businesses. They are supporting the community through their own experiences and engaging with the audience on relevant topics. Julie Hall, founder of Women Unlimited, explained further: ‘I want to be a catalyst for helping women turn their ideas into profitable ventures while managing to maintain their work / life balance. Women have a variety of motivations for starting their own businesses, but the ones I hear most often are family commitments and independence. It is challenging starting and running your own business, but through sharing real stories we can help women find solutions and ideas to support them on their journey.’

Businesswoman Penny Power with husband Thomas

From 1 September the online community will be available to all registered users. Content will include articles, videos, news, book reviews, and a discussion forum inviting opinions and Founders: Thomas & Penny Power views. Also available will be details of the launch event and future events as they are decided upon. The website will feature real stories and interviews with women who are running their own businesses. All content will be written by businesswomen who have managed to juggle their personal and business lives and have valuable experiences to share. Women Unlimited aims to be a supportive platform that makes a genuine difference to women who want to make the most of their entrepreneurial instincts and achieve a greater balance in their lives. www.women-unlimited.co.uk.

Google your way to 192 192.com, the UK’s market-leading directory enquiries site, has launched a unique Google Gadget that allows users to search for people and businesses directly from their iGoogle homepages. The new gadget gives users fast and free access to the site’s 13 million residential listings and 4.5 million business listings. Users can also search 192.com’s award winning maps and aerial photography directly from the gadget. In addition, the new tool will search the site’s premium records, including Electoral Rolls and Company and Director Reports. iGoogle home pages allow you to personalise your Google search page, giving you fast

access to key information and tools across the web. It’s estimated that 20% of Google users have adopted a personalised iGoogle page. Dominic Blackburn, New Technology Director of 192.com, said of the launch, ‘adding 192.com’s directory enquiry search tool next to your news and weather updates ideally rounds out your iGoogle homepage. We first developed this gadget to allow our existing users to access search results faster, but we now see it has great potential to attract and retain new users as well.’ To try out the 192.com iGoogle Gadget for yourself, visit: www.192.com/gadget

BM164_06_07_08Q7.qxd:Layout 1

31/8/08

21:39

Page 2

News Short skirts and open tops head fashion flops Men who undo one button too many on their shirts and women who don seethrough blouses are guilty of the biggest office fashion crimes, according to a survey. 61 per cent of 584 UK financial professionals surveyed in the office fashion report conducted by North West financial recruitment specialist, AFR Consulting, said they find revealing clothing the biggest office fashion faux pas. The survey also revealed that ‘dress down Fridays’ and similar casual initiatives could be ‘so yesterday’, with 58 per cent of respondents preferring more traditional office wear at work, such as suits, shirts, blouses and ties. This was despite a massive 81 per cent of organisations revealing they had introduced a dress down day or similar policy at work, suggesting bosses are themselves following a social trend.

Adventurous wardrobe The report by AFR Consulting questioned company directors, financial directors, managers and other finance professionals in a

range of organisations from the accountancy, manufacturing, legal, financial and retail sectors. AFR Consulting director Simon Speak said: ‘Some people have a slightly more adventurous dress sense than others, but respondents to our survey delivered a resounding “no” to revealing clothes at work. ‘In the professional office environment it seems directors and managers still like to dress smartly, preferring business suits and ties, even over the slightly more casual look of trousers and unbuttoned shirts. Despite this, 81 per cent of respondents said their company now had a dress down policy. ‘Judging from the results of the survey, fashion continues to be a hotly-debated topic in offices throughout the UK.’ Cliff Bashforth, a Master of the

Federation of Image Consultants (MFIC) and leading image consultant for Colour Me Beautiful, says: ‘your image at work can have an impact on your job prospects and make or break your career. ‘One of the deadly sins is showing too much flesh. Whether male or female, young or old, covering up, even in the summertime, is of prime importance. Your professionalism and the respect you’ve gained over a period of time can be damaged should you succumb to dressing down and baring all. If you’re female, the guys don’t know where to look. Well, actually, they do – but it’s not at their computer keyboard. For the guys, let’s keep any hairy bits out of sight – apart from those on your head and forearms of course.’ As well as revealing clothes, other office fashion pet hates, according to the survey, included jeans, sportswear and tank tops.

SMEs in London and South East failing to take up government funding An independent poll conducted on behalf of Ixion has revealed that a staggering 85% of SMEs across London and the South East have lost-out on government funding available for their businesses to invest in training. The shocking results of the poll could partly be put down to a need for more positive action from the SME business base in response to contact from government-funded brokerage services. Missed out The poll, conducted among businesses with fewer than 250 employees, found that 81% of respondents said that their business had carried out some form of staff training in the past, yet a worrying 71% had not taken any positive steps to capitalise on a minimum of £1,500 in government funding available to them for training. Graham Baker, CEO of Ixion, commented: ‘In an increasingly challenging business environment, investment in training is critical. These are worrying statistics. With over half a million* SMEs in London and the South East of England, businesses must realise that they can benefit from the government funding available to access appropriate training to enhance their businesses, and in turn increase their competitive advantage in the marketplace.

‘The Government has committed itself to the UK’s long term skills needs to achieve a world-class skills profile by 2020. This research highlights that SMEs need to take some responsibility for making contact with organisations such as Ixion, which provides a gateway for businesses and individuals to access public funds, and ensures that they get directed to, and benefit from, appropriate business support specialists and the skills training that they are entitled to.’ Graham Baker concludes: ‘Businesses need to understand that government-funded services such as Business Link, Train to Gain and the Ixion-run Advantage East are in existence to help and advise them on business growth and workforce development training. This support is particularly important given the current economic climate, where a trained workforce can give a competitive edge.’ On contact, the Ixion research discovered that an incredible 96% of respondents said they would like to learn more about regional government funded schemes such as Ixion’s Train to Gain and Business Link. *According to Business Link, in 2006 there were 202,580 companies in the East of England and 304,090 companies in London with fewer than 250 employees.

Business Matters issue 164 • 7

BM164_06_07_08Q7.qxd:Layout 1

31/8/08

21:39

Page 3

News UK high flyers prepare for the ‘Business Oscars’ More than 150 organisations representing the finest entrepreneurs and business leaders across the UK are among those shortlisted in the finals of The National Business Awards, sponsored by Orange. The Awards, which recognise and reward business excellence, innovation and success, are uniquely open to organisations of all sizes from any industry sector – public or private. The combined entries for The National Business Awards 2008 represent more than 2.2 million employees across the UK. The finalists, among them entrepreneurs, SMEs, multinationals and public sector bodies, will now prepare to make their presentations in person to a panel of expert judges that includes Business Matters Editor-in-chief Richard Alvin, along with academics and other business specialists. The finals are between 26 September and 15 October. Philip Forrest, Chairman of Judges, said: ‘we’ve had another high quality entry this year, and as we look forward to the finalists’ presentations I don't envy the task of the judges, because in every category every one of the finalists would make a worthy winner.’ Dubbed the UK’s ‘Business Oscars’ by Prime Minister Gordon Brown, The National Business Awards is the nation’s premier annual showcase of skills, achievements and innovation in business. The Awards allow companies to benchmark their successes against organisations of all types, and regularly attracts a field of entrants that, taken as a group, represents more than one third of UK GDP. Robert Ainger, Director of Corporate Marketing at Orange said: ‘We wish the best of luck to all finalists of The National Business Awards 2008. This year has been extremely tough for British business, and it is fantastic to see so many shining examples of successful organisations. It is no mean feat to reach the finals of the National Business Awards and this year’s finalists really are at the top of their game. We are proud to be associated with the cream of British Business.’

Mike Faulkner, Group Programme Director, The National Business Awards, added: ‘It is encouraging to see the industry breadth the 2008 finalists represent. The National Business Awards celebrate business ethics, innovation and success, and with the credit crunch continuing to bite, it is uplifting to see the hunger for success in business grow stronger across most industries.’ Winners of all categories in the 2008 competition will be unveiled at a glittering gala dinner and ceremony, hosted by journalist and political commentator Andrew Marr, at London’s Grosvenor House hotel on Thursday 18 November. Last year’s winners included: Dame Mary Perkins - Specsavers, Steve Leach – bigmouthmedia, Summit Media and Applied Language Solutions (pictured above.)

Small businesses should stop acting big Small and medium sized businesses should stop acting big if they want to grow up and survive the credit crunch, at least according to online business adviser and entrepreneur Guy Kingston. Kingston, who started up the very first entrepreneurial businesses in post-communist Russia, and now advises business owners around the world through his online video and audio podcasts, says being small is a huge advantage to most businesses. Said Kingston: ‘big businesses lack humanity, which is why they have to spend so much money on corporate social responsibility projects to give themselves a human face. Small and medium-sized businesses can give a personal touch to their

8 • issue 164 Business Matters

services where clients and buyers can actually develop a relationship with the owner. That is incredibly powerful, and is often a small business’s biggest asset. ‘But so many small business owners try to act like big corporates and are basically throwing away the biggest advantage they have. ‘In business people buy people, and yet so many small businesses spend money on being impressive when really they could save that money and get more work. It is one thing to look professional, but over-the-top corporate ID, marketing material and websites will simply make people think they are dealing with a big organisation that has no soul. ‘Businesses are experiencing tough times

at the moment, but the best way to counteract that is to be lean and mean and show customers that you are there to give them that little extra in personal service. ‘Smaller businesses can impress by giving realistic prices and following the job through. Too many are chasing bigger and bigger contracts and not concentrating on the business they already have.’ Start-up businesses and entrpreneurs all over the world tune into Guy Kingston’s free business advice on www.myobpod.com, where he has launched a series of video and audio podcasts. There is a listeners’ club and social networking groups where entrepreneurs can share ideas and advice.

BM164_009.qxd:Layout 1

1/9/08

01:06

Page 1

Still paying high agency fees and advertising costs in advance of ﬁlling your position?

No Upfront Costs - No Candidate No Fee! Using a network of the UK’s largest job boards, candidate databases and networking sites, RecruitmentRevolution.com will source you relevant talent; supply you with over 400 complimentary assessment tools; schedule your interview diary; and only levy a £575 fee when you successfully secure your new candidate - That’s Refreshing!

BM164_10_11_13Q7.qxd:Layout 1

31/8/08

21:40

Page 1

IN B U S I N E S S BT plan Tradespace expansion

BT Tradespace has announced it will work with TradeDoubler and buy.at to manage its affiliate marketing programmes in the UK. The new programmes are designed to create increased awareness of BT Tradespace, extending its business reach. As part of the focused online drive, BT Tradespace will also be running complementary email and banner campaigns as well as pay per click activity. Making use of TradeDoubler's and buy.at’s performance-based services means publishers will be rewarded for each new Tradespace set up, ensuring enhanced programme performance in terms of earnings per click.

BT Tradespace is a unique and dynamic online community that brings small businesses and individual sellers together with potential customers and partners to do business. With more than 170,000 businesses already signed up, the service, which is free to join, allows businesses to create and post content on the web quickly and easily and also permits linking to complementary businesses. Each BT Tradespace member’s page also includes space for business advertising, allowing them to add blogs, photos, podcasts, contact information, maps, virtual business cards and Click-to-Call. Businesses can also join the BT’s online community - making BT

Tradespace a customisable and multi-dimensional site for marketing and interaction. Jen Mowat, Director of Online Services, BT Business, said: ‘We are continuing our commitment to our customers through investment in our marketplace, and TradeDoubler and buy.at provide a trusted and credible service for supporting our online strategy. ‘This programme builds on the work we’ve done to date and allows us to deliver a tailored approach for customers, so they get exactly what they need to market their company, network, sell products and services and ultimately drive their businesses.’ Lara Kelly, Client Services Director at TradeDoubler, said: ‘We are delighted to be working with BT Tradespace on such an important part of its marketing strategy. BT is a trusted brand and we want to build on its success. With a decade of experience in affiliate marketing, we are consistently finding more innovative ways to deliver new services that add value to our clients, and we look forward to a successful programme for BT Tradespace.’ Sammy Elazab, Account Director at buy.at, said: ‘We are excited about the addition of BT Tradespace to our current portfolio of BT products on the buy.at network. We look forward to working closely with BT Tradespace to ensure they benefit from the optimisation of the affiliate channel. buy.at’s unrivalled affiliate relationships and cutting edge technology will ensure incremental value to the client.’

UK bosses: married to the job It may not always be a match made in heaven, but UK bosses are in it for the long haul when it comes to running their own company. A survey of small business owners conducted by Barclays Local Business reveals that over a quarter (28%) expect to run their businesses for more than 25 years (longer than the average marriage in the UK at 24 years, or 11.6 years if it ends in divorce) and one in five said they plan to keep working well into their seventies. As well as being wedded to the job, UK small business bosses are forming long-term and loyal relationships with their staff. Despite the popular belief that a 'job for life' is a thing

10 • issue 164 Business Matters

of the past, nearly a third (29%) of those questioned have an employee on the books who has worked for them for at least ten years and two thirds of respondents still employ the first recruit they ever took on after launching their businesses. John Davis, marketing director for Barclays Local Business said: ‘Starting your own business is a serious commitment, and for most people it really is about a life-long relationship that needs constant nurturing and attention. For every overnight success there are thousands who have spent years developing a successful business - but there are few things as satisfying as making it a success after putting in all that effort.’

Given this propensity for long term commitment, it is no surprise that bosses are often thought to be married to their jobs. Two fifths admit feeling personally connected to their business, and said its failure would cause emotions akin to a relationship ending. Although women were more likely to be affected by 'business bereavement' when a company fails, the survey showed that when it comes to their staff, male entrepreneurs are more sentimental than their female counterparts. On average, male bosses employed their first recruit for approximately a year longer than female bosses, while their longest serving employees typically clocked up a year longer on the payroll.

BM164_10_11_13Q7.qxd:Layout 1

31/8/08

21:41

Page 2

IN B U S I N E S S New start-up figures remain unchanged

A recent survey reveals that more people are starting a business to strengthen their financial security despite the current economic climate. The research was carried out by business consultants www.getsetforbusiness.com who surveyed businesses established for less than six months on their motivations for becoming self employed. Over 40% of respondents indicated their main reason was the fear of redundancy from employment and the subsequent removal of financial security.

Over 200 business owners were questioned and other motivations included the flexibility of working from home and not having to answer to bosses. Recent figures released by Companies House and the British Banking Association show further signs of business confidence. Over 27,000 new Limited Companies were incorporated in England and Wales in July 2008. In addition, the latest figures (Q3 2007) for the leading high street banks providing services for small business show that:

• Overdraft borrowing is £9.0 billion, a fall of one per cent over the year, reflecting a lower reliance on temporary, cash flow finance. • Term lending stands at £39.9 billion, having grown nine per cent over the 12 months to September. • Deposits total £48.8 billion, having increased by eight per cent over the 12 months to September. • Over 585,000 small businesses established new banking relationships in the latest 12 months. GetSet for Business has actually seen a 20% rise in the number of businesses seeking support in the last six months compared to the same period last year. Managing Director, Kate Beever, said: ‘our customers are clearly eager to gain the right support for their business from the outset. The credit crunch has actually encouraged business owners to plan ahead more significantly to prepare for a potential slump in their market. GetSet for Business gives users the confidence, knowledge and direction to consider and prepare for every area of the business and produce an online, bespoke business plan.” Established businesses can also earn revenue through the GetSet affiliate scheme. For more information visit: www.getsetforbusiness.com.

Embrace online or fail! Brands that fail to embrace and engage in online consumer dialogues are set be among those most severely affected by the expected economic downturn. Released today, research conducted by e-consultancy Logan Tod and online PR firm Immediate Future reveals that 64% of respondents will reduce their spending generally in view of the deteriorating economic climate. However, 56% said that their online spending will either not be affected, or would actually increase. The survey shows that as fears increase, consumers are turning online to find both the best available prices and advice. Online retail has seen a continual growth in 2008, with online spend up 38% on the first half of 2007, and now accounting for 17p of

every pound spent in the UK. A large proportion of consumers are turning to comparison engines and user reviews before buying. 62% of respondents said that they are now more likely to consult reviews written by other web shoppers before buying. While women are more inclined to reduce overall spending during the economic downturn, they are also more likely to consult online reviews than men (64% compared to 58%). Katy Howell, MD of social media specialist Immediate Future, says ‘the research clearly highlights the importance of online interaction between consumers when faced with purchasing decisions. Whether it is with blogs, comparison sites, or user reviews, brands need to understand and engage with social media to survive the expected economic downturn.’

When comparing the different age groups, it is the ‘silver surfers’ (aged 55 and over), many of whom have paid off mortgages or enjoy higher disposable income, who are the least concerned about the economic situation (43% said that the economy would not affect their spending), followed by the 16-24 age bracket (37% wouldn’t change their spending levels). Matthew Tod, Logan Tod CEO, explains. ‘It is clear from this research that online strategies will have to become far more sophisticated to weather the economic slowdown. A one size fits all strategy will no longer be the most effective and online retailers will have to start to segment their audience and match their marketing activity to each group.’

Business Matters issue 164 • 11

BM164_02.qxd:Layout 1

1/9/08

01:12

Page 1

Think differently. Think MBA.

Discover what you could really achieve in your career with our

part-time MBA. Visit www.thinkmba.co.uk to learn more

Open evening 6 August 5pm to 7pm

Leadership and management development that ďŹ ts around you.

www.thinkmba.co.uk

BM164_10_11_13Q7.qxd:Layout 1

31/8/08

21:41

Page 3

IN B U S I N E S S Who’s top of the broadband chart? Top 10 Broadband, the UK’s leading broadband comparison site, has announced the results of its inaugural annual broadband awards. Winners include O2 as the fastest broadband provider, BT as the winner in the wireless broadband category and ‘3' as best mobile broadband provider. The Top 10 Broadband team closely analysed data captured in over 310,000 speed tests carried out on the Top 10 Broadband site as part of the judging process and broadband packages were rigorously tested against a wide range of criteria to secure victory in award categories such as fastest broadband, customer satisfaction and broadband bundle. The awards therefore offer recognition to broadband providers that have achieved excellence in their field.

O2 won the Fastest Broadband and Customer Satisfaction awards, with an average download speed of 6.128Mb and customer rating of 3.84 out of 5 making it attractive to the number of UK consumers who want to download songs and movies, stream live video and play games online without the connection dropping in and out or the download taking a long time. UK broadband customers increasingly seek the flexibility to connect to the internet from their laptops both wirelessly at home and via mobile broadband when on the move. The Wireless Broadband award went to BT as their wireless router, the BT HomeHub 2.0, doubles the wireless reach of most routers and facilitates digital TV. ‘3’ were the clear winner in the mobile broadband category, with their expansive range of packages offering a variety of download allowance and laptop options. With mobile broadband sales increasing by 50% month-on-month this is the fastest-moving and most progressive sector of the market. ‘The winners of the Top 10 Broadband awards have distinguished them-

selves in the UK broadband market by offering first-class packages tailored to niche areas of the market,’ says Jessica McArdle of Top 10 Broadband. Customer reviews and specific package offerings including price, download allowance, contract length and speed of over 120 broadband packages were also judged by the Top 10 Broadband team. ‘The Top 10 Broadband awards amount to a comprehensive guide to the best broadband packages on the market allowing the public to make informed buying decisions,’ says McArdle. The Top 10 Broadband Awards and winners: Fastest Broadband: O2 Customer Satisfaction: O2 Mobile Broadband: 3 Wireless Broadband: BT Broadband Bundle: Virgin Media Value Broadband: TalkTalk Short-Contract Broadband: AOL Broadband Small ISP: PlusNet Gaming Broadband: Be Student Broadband: Vodafone

Secrets of entrepreneural success revealed As budding businessmen and women face make or break in the latest series of Dragon’s Den, what separates the winners from the losers? New research from Alliance & Leicester Commercial Bank may have the answer. The bank’s study, which profiled entrepreneurs across the UK, identified a number of traits which today’s tycoons have in common – could these be the secrets of entrepreneurial success? The research shows six in ten business owners are the first born child in their family. More than four in five (85%) have one or more siblings, putting to good use leadership and teamwork qualities learnt at a young age. Unlike the big egos and self-confidence often witnessed on-screen, the research reveals the character traits most successful entrepreneurs believe they have in common are actually being dependable (43%), considerate (22%) and a good listener (22%). Private education seems to have little influence compared to natural entrepreneurial flair,

with nearly three quarters (71%) coming from a state school background. However, further education does help. Nearly a fifth (17%) of business owners left education after GCSEs or O levels, while over a third (34%) were educated to degree level and almost one in five (18%) continued to secure a Masters or PhD. Meanwhile, a wealthy background appears to deter entrepreneurialism, with more than nine out of ten successful business people describing themselves as either middle-class (50%) or working class (43%). The research reveals that a third (33%) started their business between the ages of 26 and 35 and London is the most likely place for a small business to start up, with two fifths (40%) of entrepreneurs launching their future empire in the capital. With nearly three in ten small businesses failing before they reach three years, it seems business owners are learning to combat risk, with more than half (51%) saying that their approach to business is attention to detail and over a quarter (28%) saying that being prudent

with money is the key. Nearly all entrepreneurs are united in sharing the same motivations for starting up. Nearly two thirds (62%) wanted independence, while over half (56%) wanted more control over their lives and almost six in ten (57%) wanted to be their own boss so they didn’t have to answer to anybody else. ‘The secret of any successful businesses is remembering to temper bravery with prudence,’ said a spokesman for Alliance & Leicester. ‘Running a business does have associated risks, but it’s vital to make sure that contingency plans are in place should the worst happen. It is encouraging that many business owners say they pay attention to detail and take a sensible approach to their businesses’ finances. Setting funds aside in a high-interest deposit account and making sure that you have the best deal from all your suppliers will provide a financial cushion so that you can afford to grow and develop further.’ For more information call: 0800 587 0800.

Business Matters issue 164 • 13

BM164_48Q7.qxd:Layout 1

1/9/08

00:59

Page 1

Advice

How to address and lead staff during an economic downturn The business press is currently focusing on the tough times that companies are facing, and how they can cut costs and streamline operations. Much of the ‘advice’ has an operational emphasis. While this type of advice is fundamental to business, Stephen Archer argues that businesses will gain a greater level of effectiveness if teams are correctly motivated and led with better focus.

mployees are in tune with the economic climate and the impact it will be having on the company they are working in. In times like this morale is at high risk, and can fall dramatically - particularly if leaders allow it to slip and participate in the gloom themselves. Businesses need to work smarter and company leaders should manage from the front with even greater conviction in order that the team will follow. An organisation that forces itself to behave this way may not grow, but it will survive during an economic downturn.

Invest Leaders need to invest in their people more than ever. These staff will be the future of the organisation – if the culture, the leadership and the motivation are right then success will follow, along with better staff retention and commercial effectiveness. If costs do need to be cut, involve staff in the process to the maximum. Doing this makes them feel included and empowered. Companies that prospered during the last

14 • issue 164 Business Matters

recession energised their teams, and they fought their way out of it. They did not ‘batten down the hatches and pull up the drawbridge’! Inevitably, in any recession, there will be companies that don’t survive – and it will be down to those that do to fill the market voids. This is an opportunity to build market share, and take the business from those who lost it.

Mindset And this type of mindset needs to be instilled into an organisation’s employees – they need to see that they will be part of a company that wants to grow its market share and outperform the competition both commercially and psychologically. Simple steps that business leaders should address during an economic downturn: * Front up to any issues very quickly; tell your staff that the economic conditions are working against the market – not just the business. * Don’t leave them in the dark on anything – remove all doubt and ambiguity. * Stress that you have strengths that your

competitors don’t and that you will focus on these during the downturn. * Remember that nearly all people will want to follow your leadership in difficult times. They will be committed followers. * Adopt the mindset that you will weather the storm, and you will.

Stephen Archer is a director of Spring Partnerships, a fast growing UK business and communications consultancy. Spring Partnerships works with major global brands, helping them to achieve business growth and success. From running unique leadership training courses, to strategic communication and change management programmes, Spring is noted for its unique, in-depth approach to message traction. www.springpartnerships.com

BM164_49Q7.qxd:Layout 1

1/9/08

01:00

Page 1

Legal Advice

Green Leases

How green is your leasing? Stevens & Bolton Partner Gary Grett looks at sustainability in commercial leases in the current economic climate

n a difficult and declining property market we will all have time to reflect on what the future might hold. If sustainability and energy reduction is to be our focus, our buildings and our legal documents both need to change. All the talk now is of Green Leases, and the hunt is on for the perfect green lease. SMEs should not ignore the implications of the UK and European energy regulations, which will have an impact on your workplaces and office space. It is a sobering thought that as little as 2% of total property stock in the UK is currently made up of green buildings - that is, new buildings incorporating in their design greater control of energy, reduction of carbon emissions, best use of natural resources (water, light, air, and heat), waste management and recycling. However, as more institutions trade out of older buildings to buy green, the need for green leases has increased significantly, and could one day become mandatory.

There is no single accepted definition yet, but ideally a green lease will be user friendly, embracing green principles, and will regulate a building's operation, use, maintenance and management with a view to minimising impact on the environment - in other words, a legal framework that contributes to and encourages the reduction of a building’s carbon footprint.

The challenge We need green leases because existing lease provisions cannot cope with the new challenges green buildings provide. Lawyers sometimes mistakenly try to make buildings fit their standard lease, which is like trying to fit a square peg into a round hole. While precedents make good servants, they make lousy masters. Leases need to reflect actual structures; with a new breed of building comes the need for a new breed of lease which reflects the new sustainable construction techniques to be developed over the

coming decades. In my view, green leases really only apply to truly green buildings, or to those which have been refitted/refurbished, and undergone a high degree of greening. For existing buildings, green leases are not really appropriate – in those circumstances what we need is a ‘green umbrella’ under which normal leases can operate – a Green Handbook landlords and tenants can subscribe to, and which has the flexibility to change as the building itself changes. Greening our existing stock of buildings will be an enormous challenge. Many people will be waiting to gauge the impact of Energy Performance Certificates on capital values and rental levels. Perceptions have moved on to embrace the green agenda, and SMEs, like the buildings they occupy, need to keep up with the pace of change. For further information please contact Garry at garry.brett@stevens-bolton.co.uk

Business Matters issue 164 • 15

BM164_16_17Q7.qxd:Layout 1

31/8/08

21:43

Page 1

Recruitment

Taking on a worthy graduate Peter Lawrence looks at how recuiting direct from universities, formerly the preserve of multinationals, is a great source of new staff for SMEs

ost businesses would benefit from recruiting new talent possessing drive, enthusiasm and fresh ideas. But sometimes talent can be difficult to acquire at a cost that is affordable. One option is to employ a recent graduate from university. Traditionally, most graduate recruitment was undertaken by large companies. Recently, businesses of all sizes have been seizing the opportunity to employ graduates to help inject some fresh blood into their organisations. There are a number of specialist graduate recruitment websites and companies on hand to help you weigh up the benefits of employing a graduate, define the type of graduate you require, create a package and anticipat issues and pitfalls.

Employing graduates: Recent graduates have lots of potential, but may be more challenging to manage than other employees. Some points to bear in mind: They are smart and determined. They are likely to be very ambitious and willing to work harder in order to prove themselves. Most graduates are intelligent and well educated. The fact that you have offered them their first career opportunity should give them a degree of loyalty. Graduates starting their first job arrive with no baggage. They have no preconceived ideas. You will have more scope to train them your way. But they will need basic tutoring on how to operate in the work environment. Graduates are not a source of cheap labour. They are likely to be high maintenance in many ways.

16 • issue 164 Business Matters

They will expect a competitive salary. They will want to be given a high degree of responsibility early on. Often graduates expect formal training. They may leave once trained. Bearing this in mind, and thinking about your vacancy, decide what qualifications and experience you would like your graduate to have. Are you chasing a generalist or a specialist? If you require generalist graduates, you’re dealing with a very open field. If you require someone more specialist, think about the range of degree subject areas you must choose from. Create a specification of the ideal candidate. Will they need specific skills, such as languages, IT skills or a driving licence? It is not always realistic to require applicants to have experience. Some graduates may have had placement experience as part of their degree. Others may be able to demonstrate holiday and part-time work. Often recent graduates are highly qualified but low on relevant experience. You can also judge applicants on UCAS points acquired, degree level (First, 2:1 etc), University and degree course.

Work on the offer and package. Competition is fierce to attract good graduates. You can make your vacancy more appealing in a number of ways: Create a clearly understood job spec so that the graduate knows exactly what they will be doing. Formal training is not always essential, but highly valued. Consider added this to the package you are able to provide. Offer a competitive salary. Graduate salaries typically start around £16k. There are regional variations. If you are based in London graduates will expect to start on between £18k and £20k.

BM164_16_17Q7.qxd:Layout 1

31/8/08

21:43

Page 2

Recruitment

Issues and pitfalls

Be realistic about what you can offer. Create a package that is an all-rounder - for most applicants it’s not just about the money. Think about benefits that might not be too expensive for you that may be highly valued by the graduate - gym membership for example. Do not underestimate the value to your applicants of working for an SME. The emphasis should be on: Being able to have a direct influence on the business’s success. The possibility of gaining real responsibility early on and the chance to experience how the different aspects of a business environment. Working directly with the directors is also a potentially exciting prospect. A better and more dynamic working environment. There is more chance to get involved in exciting new projects.

Make sure they stay! Persistence and planning pays off. It’s impossible to predict what will happen, but you can improve your chances of success by having a plan that is well thought out and giving graduates a role that is both interesting and presented correctly. It’s important to make sure that once you

have invested the effort and cost of attracting and recruiting a graduate, you ensure they stay. Buddy up! Assign your new graduate with an experienced member of staff who is responsible for guiding the graduate and can assist with training and introductions. Graduates have been in education for the last 20 years - they have to adapt to a whole new way of life. Increase the graduate's salary after the initial probation period, subject to achieving agreed targets. Suggest your new graduate creates new projects, ensure their progress is monitored. Despite their confidence they will need continual monitoring and support. Give feedback - give regular performance appraisals, and pile on the praise whenever they produce good work. Give responsibility as early as possible. Make sure this responsibility is earned on merit rather than simply provided. Finally, and importantly, don't forget your other employees. It’s easy to create resentment in the workplace, so make sure they understand the graduate’s role and remit. Avoid preferential treatment in favour of your graduate. Finally, in order to maintain trust, keep all the promises you make to your graduate.

The internal recruitment process used at your company will be the same for graduates as it is for other employees, however there can be some specific issues related to the graduate field. Timing. In reality, as a small business there is no slow time during the calendar year to recruit graduates. Graduates are constantly looking for the right vacancy. Availability, however, may be an issue, as a graduate’s final year will end in May/June and they may only become available for work in the following September. You can do everything to keep your graduate, but for whatever reason they may simply leave after initial training. Sometimes, owing to the competitive nature of the market, you may interview candidates who take jobs elsewhere. You may receive many applications from both appropriate and inappropriate graduates for your role. There are hundreds of universities throughout the UK. Expect to receive applications from a broad spectrum of these institutions. A filtering process can be implemented to make sure the amount of application administration is minimised.

Business Matters issue 164 • 17

BM Website DPS Ad:Layout 1

22/4/08

20:46

Page 1

going weekly more news, more opinion, more advice - more often

BM Website DPS Ad:Layout 1

22/4/08

20:46

Page 2

Business Matters Keep up with Business Matters as they happen. Visit www.bmmagazine.co.uk to register for the free Weekly News update, RSS feeds and exclusive videos

y n

www.bmmagazine.co.uk

BM159_36_37 copy:Layout 1

1/9/08

00:53

Page 1

Advice

Managing an MBO At first glance a management buy out appears to be the simplest proposition for an owner/manager seeking an exit from the business he or she has spent many years building. It seems even more attractive for the management team who recognise the opportunity to take control of a company they have helped to flourish. But, as Neil Ackroyd reveals, achieving a stress-free MBO isn’t as simple as it may appear.

t’s a fact: an MBO can provide a satisfactory solution for owner and management, but the goal is rarely achieved without a fair degree of heartache and soul searching. Two factors dominate: agreeing a price and securing the funding to enable the management to make the acquisition. The first issue revolves round that age old controversy-maker – human nature. An owner, who instigates the MBO process, thereby creating a VIMBO, will be looking to maximise the price he or she achieves. Full stop. The management team will, as their first objective, be moving heaven and earth to secure the lowest deal value; then they will be battling for the highest equity stake possible – and that deci-

20 • issue 164 Business Matters

sion rests with the organisation the team convinces to provide the backing. Funding opportunities are varied but depend on the size of the company being backed. Unless it is making profits of £1.5 million to £2million, or it is poised to make some spectacular growth, the management team should discount the involvement of a mainstream venture capitalist.

Gaining the backing However, if the figures do stack up there are literally hundreds of venture capitalists with the funds to back eager, enthusiastic management teams, but they all tend to have their “pet” industries so it is advisable to bring in a corpo-

rate finance adviser who will be aware of – and have relationships with - the right private equity houses for specific sectors. The adviser will then write a business plan and produce a financial model demonstrating profit forecasts and IRR and also help the management team to get the offer of funding. Allied to the offer of the cash will be the amount of equity the venture capitalist is prepared to hand to the management. It can be as low as 10% and as high as 80%, depending on the variables associated with the deal (so it doesn’t always follow that the 80% is worth more than the 10%). The advantage to management of bringing in a venture capitalist is that their potential pur-

BM159_36_37 copy:Layout 1

1/9/08

00:54

Page 2

Advice chaser costs and legal fees will be paid for them, leaving them risk free from that point of view. Additionally the corporate finance adviser will work wholly contingent on the transaction or for a small retainer. The vendor, however, is usually required to pay a retainer.

Venture capital Management teams in companies making profits from £800,000 to £1.5million might well be able to turn to venture capital trusts for funding. These organisations have tax breaks that prevent them from investing more than £1million at a time although they can get round it in certain cases by introducing multiple funds or syndicating with other houses. This can effectively put a £5million to £6million ceiling on their equity involvement. Management teams hoping to buy out smaller businesses, making less than £800,000 profit have different funding options including bank debt, business angels or vendor finance. Even when bank debt is available (which can be difficult in the current market) there is often an “equity gap” which is the difference between the amount of debt available and the price to be paid. This “equity gap” is likely to be funded by either a Business Angel or a loan note or deferred consideration from the vendor.

Business Angels are not as celestial as their name suggests. They can be difficult to work with. Remember that these are rich and successful individuals and they almost certainly didn’t get that way by being foolishly generous. A Business Angel will almost certainly want many strong legal clauses and to have a say in how the business should be run, even down to adopting “swamping rights” under which they take over the management of the business should things go wrong.

‘Management teams who get things right can expect their payout to be 10 to 20 times their initial investment,’ In many cases, Business Angels realise that the companies who approach them have all but run out of funding options. It is not unusual for vendors who have amassed a nest egg after years of successful trading to lend the management team the funds necessary to purchase the company. They retain an equity stake in the business, so having a “second bite of the cherry”, while being repaid over a period of years.

This scheme of things can be particularly successful when the exit is “in the family”. It takes away the risk for the vendor as the exit has been planned properly and the team is ready to do the deal.

Contributions all round No matter where the backing comes from, the management team will be expected to make a significant – but not horrendous – cash contribution towards the purchase; anything from 50% to 100% of annual salary. This more often than not involves the remortgaging of the family home (although some venture capitalists have been known to increase salary levels to cover these additional outgoings). It must be remembered that the first objective of a venture capitalist, once the deal has been done, is the preparation for an exit in three to five years time, either through a trade sale or a secondary buy out. Management teams who get things right can expect their payout to be 10 to 20 times their initial investment, and more if things have gone particularly well –not a bad return for a few short years of hard work.

Neil Ackroyd may be contacted at: Precision Corporate Finance: Tel: 0845 201 0320 or neil.ackroyd@Precision-corpfin.com

Business Matters issue 164 •21

BM164_22-23_24Q7.qxd:Layout 1

31/8/08

21:54

Page 1

Mike Harris Mild-mannered Mike is the star of his own show By Diane Priestley

BM164_22-23_24Q7.qxd:Layout 1

31/8/08

21:55

Page 2

Interview

ike Harris is a gentle, modest man. At least for an acclaimed entrepreneur who has built four companies from nothing into empires worth billions. Given this success he would be perfectly entitled to boast about his phenomenal success. Instead he allows his achievements to speak volumes while he focuses on his latest project: inspiring budding entrepreneurs. While Mike is low-key, his ideas are in fact quite radical, refreshing and original. His new book Find Your Lightbulb is not dry and boring, nor is it an ego trip. It is an unselfish book; generously giving away wisdom that he acquired the hard way in his rollercoaster ride over the past 20 years as an innovative business leader. His book focuses on the reader, with anecdotes and exercises designed to spark your own ideas. For Mike, it is all about YOU and YOUR dreams. When I interviewed Mike in his London office I complimented him on how engaging I found the book, he was quick to give credit to his editor, Lisa Murray, for making it so clear and reader-friendly. Mike doesn’t see himself as a high achiever, just a regular guy who has focused on his twin passions of finance and technology. After 15 years cutting his IT teeth with Midland Bank (now HSBC) he set up First Direct in 1988, creating a phone banking service that transformed the worldwide financial services landscape and which is today valued at more than £1 billion. In 1991 he was appointed CEO of Mercury, the telephone and internet provider. Mercury became a major threat to BT, which at that time had a virtual monopoly on the UK home phone market. The consumer business he built from scratch was sold to NTL, earning £2.5 billion in cash for Mercury shareholders. Mike was also Chairman of Mercury One2One, a fledgling mobile phone company, which eventually sold to T-Mobile for $10 billion.

A Good Egg But perhaps Mike’s most epic success was launching the internet banking company with the quirky brand - Egg, in 1998. The branding, of course, isn’t as exotic as you might think: naming a company after a distinctive food certainly worked for Apple and Orange, and for Transport for London’s Oyster card . But in the relatively conservative world of banking, it seemed like a revolution. And revolutionary it certainly was: Egg was successful beyond what anyone had imagined when it floated on the London Stock Exchange in 2000, valued at £1.3 billion.

The four companies that Mike founded generated more than £6 billion for shareholders who had backed his ideas, and created 5000 new jobs in UK, France and other European countries. Having reached such a giddy pinnacle of success it was hard for Mike to know what to do next. Sitting on a beach in the Seychelles in 2000, 55 years old and contemplating his retirement, he decided to ‘give back’ his hardwon knowledge to help novice entrepreneurs and would-be innovators. ‘I believe that the innovations of large corporations can be translated to start-ups, and that big companies can learn from the energy and enthusiasm of small ones. So I decided to write a book and see what happened.’

Mike’s CV • Grew up in Birmingham and graduated from London University with a degree in Chemistry in 1970. • Worked in IT with Midland Bank (now HSBC) for 15 years. • Founding CEO of First Direct phone banking company, which is valued at more than £1 billion, 1988- 1991. • CEO of Mercury from 1991 to 1995. Sold to NTL making £2.5 billion for Mercury shareholders. • Chairman of Mercury One2One mobile provider, Sold to T-Mobile for $10 billion. • CEO of internet banking company Egg from its foundation (as a division of Prudential plc) to 2000. After just three years Prudential undertook flotation, retaining 79% with the bank valued at £1.3 billion. • Currently Chairman of Garlik internet identity company which has raised £18 million in venture capital. • Chairman of innovation at RBS. • Regular speaker at mid-career MBA courses at the MIT Sloan School of management 1996 – 2006 • Facilitator of workshops on leadership, innovation and entrepreneurship with clients including 02, IBM, Colt, Intel, Oracle, Adobe and EDS.

Mike then co-founded Garlik, a leading edge technology company spearheading digital identity protection. Garlik has already raised £18 million in venture capital and is proud to have Tim Berners-Lee, the inventor of the World Wide Web, on its advisory board. An Illuminating Idea ‘Eventually I got round to writing the book in 2007 and I was hoping that something would come of it. Then two things happened that were perfectly aligned with my goals. A chance conversation over lunch led to the sale of 1000 copies for employees and customers of a global consultancy that wanted to use the Lightbulb methods to promote innovation in large companies. ‘Then a friend of mine, Mynoo Blackbyrn, approached me on behalf of Triumphant Events about running seminars for entrepreneurs. Now all of a sudden there is a whole explosion of possibilities.’ Getting people excited about your idea is the first step, as Mike explains in Find Your Lightbulb. He says your genuine enthusiasm has to ‘infect’ others. ‘An idea only lives in the way you talk about it,’ says Mike. ‘I recall back in 1975 when Bill Gates’ big dream was to see a PC on every desk and one in every home. Everyone thought “what a load of rubbish -that’s never going to happen!”’ Bill Gates was way ahead of his time, seeing a future no-one else could. In the same way, Mike was a visionary in 1997 when he set an outlandish goal for Egg to have 10 million internet banking customers in the UK. At the time there were only half a million people connected to the internet!

Only Child’s Play An internet enthusiast and evangelist, he says: ‘the internet is a major force, an incredible tool for entrepreneurs as a means of information, networking, marketing and delivery of products and services and excellent customer service. The World Wide Web is in its infancy. What we are seeing now is only child’s play. Over the next decade we will see a massive transformation.’ Audacious goals lead to what Mike calls a Big Inspiring Future (BIF) and he advises entrepreneurs not to let their BIFs be destroyed by criticism. Far from being defensive, Mike takes a positive approach to critics. ‘When someone says “that will never work” and tells you everything that’s wrong with your idea, they provide a list which is incredibly useful as a design resource. It becomes a set of intelligent

Business Matters issue 164 • 23

BM164_22-23_24Q7.qxd:Layout 1

31/8/08

21:56

Page 3

Interview Mike doesn’t see himself as a high achiever, just a regular guy who has focused on what he enjoys

insights about what is needed but not currently available.’ Mike believes that innovations succeed when they fill an unmet need. To come up with a multi-million pound idea, he advocates observing the functional and emotional needs of humans. Don’t ask people for a solution to their needs - discovering them is a role for creators. He quotes Henry Ford’s maxim: ‘If I’d asked my customers what they wanted, they’d have said a faster horse.’ Although Mike grew up as an only child, he was surrounded by cousins in a big, loving extended family in Birmingham. He has always enjoyed forming partnerships and gathering loyal teams around him, finding the creative atmosphere of a team conducive to business success. When setting up First Direct in 1988 and facing almost impossible challenges, he quickly discovered he had the power to either drag down or build up staff morale, and it was his job as leader to stay optimistic at all times.

In fact, to keep up morale he suggested that his team had a party to celebrate their success before it happened.

Write Your Own Script Mike employs a colourful metaphor to give advice to anyone with a big dream: see your business as a soap opera, write your own script and cast yourself as the star, not an extra. And write the last chapter first! He warns you to expect ‘drama’! He writes: ‘Business adventures are full of the magic of human life, humour, courage, despair, anger, pride, friendship, great triumphs, epic celebrations, fun and extraordinary good fortune.’ When I asked Mike which actor he would like to play his role in the movie of his life, he admitted it used to be Harrison Ford, the understated hero, but these days he’s leaning towards that debonair heart throb George Clooney. His wife, Sue, certainly sees him that

way after 37 years of happy marriage - and he is certainly a hero to his two adult children. Sue and Mike enjoy an enviable lifestyle with a beautiful country house in Oxfordshire and a flat in London They regularly travel to their favourite locations around the world. At 59, Mike now works three days a week - and is still making the most of the starring role in his own remarkable life story.

Mike’s website: www.findyourlightbulb.com Mike Harris will be speaking live to entrepreneurs all over the UK in September and October. For a discounted ticket to see Mike Harris share insights on entrepreneurship and innovation visit: TriumphantEvents.co.uk/MikeHarris

AT LAST… NO MORE PRINTING, FOLDING, LICKING AND STAMPING The Big Data Company will not only supply you with data of newly formed or relocated companies on a weekly basis, we will also process the entire Direct Mail piece for little more than the cost of a postage stamp. The Big Data Company has over 2.3 million listings available from one of the UK’s most comprehensive B2B databases… it doesn’t end there! Our sophisticated full colour print machines will mail-merge, print, fold and insert into a C5 envelope on high quality 90-120gsm paper – you don’t even have to supply the stationery! Our unique data 2 dormat solution will take away layers of cost, leaving you with more budget for additional mailings.

Here’s how in 4 easy steps: Step 1. Choose one of our many templates Step 2. Select one of our marketing lists Step 3. Choose a delivery date for your mailshot Step 4. Send the ﬁle to The Big Data Company and we will do the rest

It really is that easy!

24 • issue 164 Business Matters

Call The Big Data Company on 01622 618647 OR email Info@thebigdatacompany.com to ﬁnd out more.

BM164_25bh1.qxd:Layout 1

31/8/08

21:57

Page 1

Finance

Angels of the crunch Bill Morrow, co-founder of business angel network Angels Den, looks at whether the angel funding network has fallen foul of the ‘credit crunch’ - and finds good news ou might be forgiven for assuming that in the present economic climate most investment from business angels would have dried up. However, despite the infamous credit crunch persistently ringing in their ears, most business angels are actually stepping up their investment in the next ‘big thing’. The so-called squeeze has had, if anything, a positive effect by helping to define the ventures that business angels want to put their money into. Reduced incentives for investment in historically ‘safe’ avenues (typically for small returns in a booming entrepreneurial economy) have persuaded angels to favour investment in serious entrepreneurs with experience, concrete financials, enthusiasm and drive.

Buyer Beware! Before all you budding entrepreneurs out there throw caution to the winds and develop ‘that’ idea - the one that’s been eating away at the back of your mind for months - be aware that this increase in investment has focussed angels’ minds on ensuring that key dynamics are met before they invest. If you are a serious entrepreneur it will come as no surprise to know you must have a great idea and a concise business plan - one that covers all the necessary areas from the current and future markets and product specifics, along with any IP, a USP and financials for at least a three year period. This, combined with a committed attitude to your business, creates the best possible chance of securing investment. It’s also a good idea to remember that it’s not easy being an angel, especially considering the increasing number of entrepreneurs coming through the ranks. Savvy investors, on the whole, have a limited amount of time, and are thus looking for a succinct and on-message pitch. Any deviation can carry heavy penalties for a would-be entrepreneur as the angel loses interest and moves on to the next potential investment for consideration. Remember, though, that angels are keen to invest. If they are not investing, they are not

making money. They want you to give them the ‘right’ answers! Services like Angels Den have filled in those gaps, helping would-be entrepreneurs gain funding while providing the business angel community with access to hundreds of the best businesses in the making. Every day, over 700 angels log on to the site, looking for deals to invest in. I may set off the Cliché Alarm by saying this, but people buy from people. Grudgingly, the angel community has been forced to look at different formats for meeting entrepreneurs. It has taken us 14 months, but we are now funding more deals than all the rest combined. We have had to drag some angels, kicking and screaming, towards innovations such as: Video pitching, which allows you to display your passion to a wide community SpeedPitching, which lets you meet as many as 20 angels in one evening with just three minutes to sell your idea to them.

Even Internet Matching is still perceived as unseemly by far too many old school angels, who would much rather meet in fusty, cigarsmoke filled board rooms, where the ‘lucky few’ get to pitch. These people appear to think that Dragons’ Den is real and that an intimidating environment is the best way to find out what makes a pitcher tick.

This month’s message is clear If you are looking for funding, plenty is there if you follow the (weird) rules. Don’t believe the doom-mongerers - there is no crunch for those who already have the money. (Not many angels borrow to lend..!) Angels, if you want to find businesses to invest in, move with the times - embrace new media and methods and meet some astounding people. There are some truly amazing, world-changing deals around at the moment and all you have to do is log on. www.angelsden.co.uk

Business Matters issue 164 • 25

BM164_26_27Q7.qxd:Layout 1

31/8/08

21:58

Page 1

Advice

And the award for the most awards goes to... YUDU, a fast-growing technology start-up and digital publisher of online brochures, catalogues, magazines and books, has made a speciality of winning business awards – bagging no less than five in five months this year. CEO Richard Stephenson reveals the secrets of winning business awards and reaping the benefits.

pplying for business awards takes time, effort and skill. Many businesses therefore don’t bother. Others would like to bother but don’t know how to go about it or even to find out what relevant awards exist in the first place. So, is it worth the effort? Is it worth even making the job of applying for business awards a part of your marketing strategy and the cost of doing so a line in your marketing budget? These were the questions that we sat down

26 • issue 164 Business Matters

and asked ourselves recently. Although we’re only small, with everyone already working at full stretch, the answer that we gave to all of them was ‘yes’. Out of the seven business awards that we’ve applied for since, we’ve won five and been a finalist for the other two. In fact, we won five in five months in the first half of this year, including three in one night, when we had to split the team up to attend the different ceremonies. If there were an award for the business

with the most awards, we’d apply for that, too. Winning awards has turned out to be exactly what we hoped. It’s good for morale. It’s good for recruitment. It impresses customers. And, if you’re a start-up, like us, it impresses investors – both existing and potential. It’s also a gratifying endorsement from people like awards judges, who tend to be experts in their fields, that you’re barking up the right tree. What YUDU is doing as a publisher of online brochures, catalogues, books and mag-

BM164_26_27Q7.qxd:Layout 1

31/8/08

21:58

Page 2

Advice ‘Credible awards are a great third party endorsement, especially when potential clients are choosing between several suppliers’ azines is new and innovative and all that. But boldly going where no business has gone before can also be nerve-wracking. So, it’s reassuring that judges of business awards seem to like what we’re doing as much as our customers do. Winning awards, however, is also just plain good for business. The five that we’ve won have given a real push to not just our profile but also to our sales and revenue. Although it’s hard to measure the impact precisely, we estimate that we’ve won getting on for £150,000 of new business this year from clients who were swayed by our award portfolio or mentioned our awards as a factor when choosing between competing suppliers. We reckon that our awards are a big part of the reason that our revenue in the first half of this year is over 14% higher than the same period last year, despite the tougher conditions. Awards definitely help when you’re trying to win new clients. Credible awards are a great third party endorsement, especially when potential clients are choosing between several suppliers, or when they are new to a product or sector, which many of our clients are, and they see that you’ve repeatedly been named ‘best in class’. They think, ‘These guys MUST be good – look at all the awards they have won!’ So we mention our awards in all our marketing materials and sales pitches as standard

procedure. We tell our customers. We put it on our blog. We even list them as part of our email signatures – and, of course, at the bottom of this article. Best of all, we’ve created a multi-media digital brochure that not only celebrates all the awards, complete with photographs, video and audio, but at the same time is an example of what we’re selling. We plug it on the home page of our site, yudu.com.

What’s the secret? The ultimate secret, of course, is having a good business, with the right story. What YUDU is doing with online publishing is topical. It’s digital. It’s innovative. It’s green. In fact, digital publications are a way of being green and cutting costs on print and postage at the same time, which seems yet another reason that award judges like what we do. In short, YUDU seems to strike the right chord. But, of course, there’s more to it than that. The first tip is to take the job seriously – and to allocate the resources needed to submit a decent application. In other words, treat it as

an investment. In fact, we decided to make it a line in our marketing budget, which our COO enjoys referring to as ‘cash for honours’. Second, pick the right person for the job of applying. We’ve got someone who’s done a brilliant job for us. She has become a genuine expert on the whole process. Third, pick both the right award and the right category – one that you stand the best chance for, whether because it’s a perfect fit and/or because, say, it might not attract lots of other entrants. So, it’s a question both of knowing your own strengths and judging who else might apply and whether they might have a better chance. Fourth, make the time to submit a decent application. It normally takes about a day or so per award to make the initial application. Then, once you’ve been short-listed, you’ve got to send photos and do a bit more work. So, it’s probably around two days per award in total – not including attending the awards ceremony. But once you’ve done a few, it gets easier. Last but not least, remember to thank your mother. Well, not really, although another winner at one ceremony did include thanks to her mum. But if you get as far as the awards dinner, it can be worth having the bones of an acceptance speech up your sleeve.

Yudu’s awards include:

An arm full: Richard Stephenson with some of Yudo’s awards

Winner - Most Innovative Media Platform, How Do Awards 2008 Winner - 13th Fastest-Growing Digital Media Company in the UK, Media Momentum Top 50 Winner - Supplier of the Year Gold Award, The Revolution Awards 2008 Winner - Business Innovation, Be Inspired Business Awards (BIBAs) 2008 Winner - Most Promising Business of the Year, Be Inspired Business Awards (BIBAs), 2008 Finalist - Best Travel Technology, Travolution Awards 2008 Finalist - Freshest Digital Innovation, Fresh:Digital Awards 2007

Business Matters issue 164 • 27

BM164_28_29Q7.qxd:Layout 1

31/8/08

21:59

Page 1

The value of employee volunteering Richard Eaton looks at how encouraging your staff to volunteer isn’t just altruistic – it’s good business,

BM164_28_29Q7.qxd:Layout 1

31/8/08

21:59

Page 2

Advice here’s no escaping corporate social responsibility these days. With the environment, fair trade and workers’ rights all high on the national agenda, companies are falling over themselves to advertise their CSR policies, hoping to look compassionate and cool. When it comes to engaging with the public on a local and personal level, however, many businesses seem less enthusiastic. Arguably the most effective way for a company to generate goodwill and customer loyalty is to send its best assets – its employees – out into the community to assist local groups and charities, either in teams or individually. Yet Home Office figures suggest that such volunteering initiatives are rare, with only a quarter of UK employees having access to ‘employer support volunteer schemes’, as they’re known. Where these volunteering schemes do exist, they are hugely popular with staff – 40% of workers who can volunteer do volunteer – so it’s obviously not employee apathy that is holding them back. Why, then, are employers dragging their feet?

The burden For smaller businesses, the main stumbling block is probably resources: many MDs lack the time to set up proper volunteering programmes, or deal with the resulting admin and bureaucracy. Help is at hand, though, thanks to the growing number of volunteering ‘brokers’ who will help businesses to establish a volunteering programme and serve as the go-between with the local community. These brokers – some commercial, some

‘volunteering increases employees’ satisfaction levels’ non-profit – recognise the problems faced by over-stretched executives and try to take the burden off their shoulders. ‘Our overriding aim is to make employee volunteering as painless as possible for managers and directors,’ says Marion Schumann of the Hammersmith & Fulham Volunteer Centre (www.hfvc.org.uk), a charity which arranges business volunteering schemes and one-off community ‘challenges’ across London. ‘We’ll do everything from pinpointing the most appropriate form of volunteering, to finding the right community groups to work with, to carrying out health and safety assessments of their premises. ‘Once the scheme is up and running, we’ll serve as middleman between the volunteers

and the beneficiaries, monitor the success of the programme and assist the company in publicising its efforts.’

Employees With this kind of support, a corporate volunteering scheme shouldn’t eat into an MD’s time. Yet some businesses are hesitant. As Rabbi Julia Neuberger, the Prime Minister’s appointed Champion on Volunteering, recently admitted, many executives question the business case for sending employees out into the community on volunteering projects. Beyond securing coverage in the local paper, they cannot see the value of losing hundreds of staff hours a year. So how do businesses who support employee volunteering justify their initiatives?

‘Volunteering is a great way for our associates to bond’ Caroline Berry, Human Resources Executive for Starwood Central London Hotels, believes the company’s regular one-day volunteering challenges are not only good for the community, but good for the employees themselves. ‘Volunteering is a great way for our associates to bond,’ she says. ‘The community challenges allow them to enjoy each other’s company without thinking about who they are when they’re at work. As an organisation we try to encourage all our associates to participate in at least one community project per year.’ In these cash-strapped times, a team-building exercise as simple as painting a school or tidying up a park has got to be a good thing. And for those staff that are involved in more individual, one-on-one volunteering activities, there are great opportunities for developing new skills and gaining new levels of awareness about social issues and community affairs. Best of all, volunteering increases employees’ satisfaction levels and their loyalty to the company. A survey of staff at Barclays found that those who had taken part in the bank’s volunteering scheme were much more likely to recommend the bank as an employer.

Potential employees Increasingly, executives who launch employee volunteering schemes aren’t just thinking about their current staff intake. They are thinking about their companies’ future recruitment needs, too. Businesses are becoming increasingly clever at tailoring and targeting their volunteering programmes, sending staff to parts of the

community where they can best promote the company to potential employees. Where there are skills shortages, staff may be sent into schools to provide support in a relevant subject like IT, science or business studies. Where there’s a lack of diversity in the office, staff may serve as mentors to talented individuals from minority ethnic backgrounds. Volunteers can therefore be ambassadors, trainers and headhunters, all rolled into one.

Other Businesses Employee volunteering isn’t just beneficial on a personal and community level, either. Thanks to the explosion of CSR conferences and national initiatives like Business in the Community (www.bitc.org.uk), it’s the perfect platform for raising a company’s industry profile. A 2006 survey by City of London initiative City Action (www.city-action.org) showed that London SMEs that implemented employee volunteering schemes enjoyed increased networking opportunities, since their voluntary work would be discussed on diversity forums and would open doors with bigger corporations that have a strong focus on CSR. Some SMEs were even able to use the experience of launching a volunteering scheme to bid successfully for not-for-profit business. So although employee volunteering is at its heart about giving something back to the community, companies can get just as much out of these schemes as they put in. Volunteering may not be high on the national agenda, but it can have far-reaching benefits for a canny – but caring – business.

Business Matters issue 164 • 29

BM164_030.qxd:Layout 1

1/9/08

01:16

Page 1

BM164_31Q7.qxd:Layout 1

31/8/08

22:00

Page 1

Advice

It’s all about margins Networking expert Andy Lopata looks at the rise of Chief Executive and Leadership networks, and the benefits they offer business leaders ‘None of us is as smart as all of us.’ Footdown’s strapline sums up the focus of an increasing number of Chief Executive and Leadership networks in the UK. There is a growing recognition that there is no need for business leaders to plough on alone. Many CEOs have discovered the benefits of working closely with others in a similar position. Footdown is a mentoring and peer group organisation for entrepreneurs, directors and senior executives. It was founded by British entrepreneur Andrew Mercer, who had sold his software company to the technology giant Oracle in 1998. Mercer felt that, with more support at critical stages of the company’s growth, the its success could have been so much greater, and perhaps ended in public listing.

Sharing Mercer believed that the creation of a group environment for people in senior positions to share their experiences, discuss challenges and offer solutions would help other people achieve more than he had been able to. Footdown was not the first of its kind. Vistage International was founded as The Executive Committee (TEC) by Wisconsin businessman Robert Nourse in 1957 and now has a worldwide presence. Richard Alberg was a member of TEC for five years before he sold his psychometric testing company in November 2006. He found the process invaluable. ‘When I joined TEC I did not have a strategic direction for my business,’ Richard says. ‘My objectives were growing the business while avoiding going bust. TEC helped me think about strategy and exit.’ Richard originally joined TEC because he realised that he was learning on the job and

making a lot of mistakes. As the head of the organisation, there was no-one for him to bounce ideas off, or to be inspired by. In his TEC group he found that he had a sounding board for ideas. For Jo Wright, a member of Footdown in Bath, the support of her Leadership group is

‘Mentoring makes you accountable’ equally as important. When she joined, Jo had moved through her organisation, Feilden Clegg Bradley, to the position of Finance Partner, despite her training as an architect rather than as an accountant. When the Senior Partners approached Jo to become Managing Partner, the members of her Footdown group took her through an evaluation process to help her decide whether the position would be right for her and how to make it work, without losing touch with the design side that brought her into the business in the first place. ‘It’s given me more of a feel for the business side of the practice’, says Jo. ‘I now have a much better insight into how businesses operate and are led.’ Having founded The Academy for Chief Executives (ACE) in 1996, Brian Chernett has seen similar stories in leadership groups. ‘In one group alone there have been nine members selling their businesses for more than £3m. They would tell you that this had a lot to do with the support and help of the group.’ Brian formed ACE because he felt that TEC’s approach could be improved. ‘At the time I was working for our major competitor – TEC (Vistage) - and felt that there was a need

to focus more on the softer skills of leadership, which wasn’t a belief cherished by the American operators of TEC. So I left to set up the Academy. The processes very similar to those at Vistage, but the philosophy is very different.’ Roger Harrop, a CEO Expert who has spoken to over 50 groups and is a former ACE Speaker of the Year says, ‘I love working with these groups – the members are generally highly motivated and totally trusting of their fellow members. This means that meaningful discussion takes place, real actions are agreed and each is held to account by the others.’ Pilar Martinez-Vidal is the MD of Impulse International, a global courier firm located close to Heathrow Airport. ‘I wanted to focus more upon the future, but I was too entrenched in the day-to-day running of Impulse. I felt overworked and isolated. When you are in such a position, you can’t share doubts with your staff.’ ‘Mentoring makes you accountable to somebody, which pushes you harder to achieve what you’ve set out to do. I have quarterly targets I set with my one-to-one mentor, which I have to report back on. In the group mentoring sessions, my peers act as my nonexecutive directors. ‘It has helped me focus.’

Andy Lopata is Vice President of the UK Professional Speakers Association, a Director of the Word of Mouse network and co-author of two networking books. Read more at www.lopata.co.uk A version of this article appeared in The National Networker (www.thenationalnetworker.com)

Business Matters issue 164 • 31

BM164_32_33_34Q7.qxd:Layout 1

31/8/08

22:00

Page 1

Area Focus: The North East

Bright Sparks and Northern Lights Bill Hilton heads to Teesside in the north east of England to discover some remarkable young entrepreneurs and find out about the huge potential they offer the SME community as suppliers, partners and customers.

eesside is one of those parts of England that is never going to win a beauty contest. I lived up here for a while, and I vividly remember the first time I ever drove along the A66, past Stockton-on-Tees and into the centre of Middlesbrough. It was a drizzly Sunday afternoon in February, and the place looked like a wasteland – scruffy, dilapidated Victorian warehouses and

32 • issue 164 Business Matters

civic buildings mingled with the worst of 1960s architecture. Behind everything, it seemed, were the pipes, chimneys and cooling towers of the chemical industries that have sustained the local economy for a century. I remember even more clearly the first time I climbed Roseberry Topping, a sharply pointed hill on the edge of the Yorkshire Moors that has become an iconic local landmark. From the summit I looked down on the Teesside

conurbation and saw the vast dirty yellow cloud that is the result of so much chemical processing. Admittedly, with modern pollution controls the bad air has faded and thinned in recent years, but Teessiders retain the nickname – ‘Smoggies’ – that they earned in the days when it was virtually impossible to hang washing on a Middlesbrough clothesline without it discolouring in minutes.

BM164_32_33_34Q7.qxd:Layout 1

31/8/08

22:00

Page 2

Area Focus: The North East These are real businesses aiming to make real money, and have a higher survival rate than most start-ups.

Top, Mark and David from Halch (see p.34)

Left, Alison and Louise from Attention

prising that the university has developed a strong enterprise culture. It has successfully ‘spun out’ dozens of small businesses from its academic programmes, many of them with great potential as customers and partners of established businesses. Back in March I visited the university to find out what’s on offer.

In the incubator The Regeneration Game The thing about Teesside is that you need to look a little deeper. If you do, you’ll find that it’s an area with an enterprising and pioneering spirit that has grown out of the strong technical and engineering history of the north east. But during the 1970s the area experienced severe decline – Middlesbrough still contains two of the top five poorest postcodes in the country – which only began to be reversed in the 1980s. Prime Minister Margaret Thatcher, visiting the city and famously announcing that ‘something must be done’, pushed through the foundation of the Teesside Development Corporation and put the area back on the road to some sort of prosperity. Central to the commercial growth of the area in the last decade or so has been the University of Teesside. Established in Middlesbrough in 1930 as a technical college, it became a university in 1992, and has swiftly become a world leader in some very exciting areas – in particular, computer animation and games development. Given that its specialisms are directly focussed on real-world industries, it is not sur-

The Incubation Unit at the University of Teesside is based in a 100-year-old school building on Middlesbrough’s Victoria Road. On the outside, it looks like something from a bygone age – all red bricks, tall windows and separate entrances marked ‘boys’ and ‘girls’. The interior is a different story. Recently refitted, it houses a training base and office space for graduate businesses. These are real businesses aiming to make real money, and, because of the level of training and support that the University gives them, they have a much higher survival rate than the average start-up. The one-year rate is 100%, with 83% surviving for three years and 71% passing the five-year mark.

Your Attention Please! The first business I met in the Incubation Centre was Attention Design (www.attentiondesign.co.uk). Attention is a web and print agency founded by Alison Jones and Louise Skelton, both recent graduates of the University of Teesside. At the moment the business is small – the staff consists of just Alison and Louise, along with account manager Gemma Pithers. But they have big ambitions and, since

launching in October 2007, have already established a strong client base. ‘We’re working well as a business because we’ve got all the responsibilities carefully planned and divided up between us,’ says Alison. ‘I’m an illustrator and I also manage the company finances. Louise is a typographer and very confident at networking and sales. Gemma deals with project and client management, PR and the company database.’ The girlies (I’m not being sexist here – that’s what they call themselves) have focused the business around creating strong brand identities for their clients, and have an impressive portfolio of logos, stationery sets and brandcompliant websites. They reckon that much of their success is down to the high level of support they have received.

Business Facts: the North East • The north east region’s traditional business profile in the SME sector has been based around small engineering and other technical firms that originally grew up to support chemical, heavy engineering and shipbuilding industries on Teesside and Tyneside. • Today, the region has a reputation for strong IT skills. Teesside and Tyneside have a large number of small software companies, with the north east beginning to rival Cambridgeshire’s ‘Silicon Fen’. • A particular driver of innovation in the area is the presence of four major universities: Durham, Newcastle, Teesside and Northumbria. The high quality of life for graduates in the region leads a high proportion of students from other areas in the UK to remain in the north east when they have finished their studies. • The north east’s tradition of ‘metal bashing’ businesses continues, and it remains a net exporter on international markets - firms in the region export their products all over the world, including specialist engineering products to China and the USA.

Business Matters issue 164 • 33

BM164_32_33_34Q7.qxd:Layout 1

31/8/08

22:01

Page 3

Area Focus: The North East Brand identities by Attention Design

‘The University has been key to our success,’ says Louise. ‘We’ve been given constant advice and guidance from the enterprise team, helping us with all aspects of our business. They’ve given us everything from training courses instructing us on how to write a business plan to discounted office space and a guide to the business funding available to us. We’ve won the Blueprint planning competition twice over, something we wouldn’t have had access to without the university’s support.’ Another, less obvious, benefit that the incubation unit offers is the creative atmosphere that grows out of having so many new businesses in the same building. ‘It’s great that we’re so close to other businesses,’ says Alison. ‘Other start-ups in the same building are able to provide complementary services. We pass on work and help each other out – some of them have been around longer than us, and they are a great source of expertise.’ Alison and Louise are convinced that their business would never have come so far, so fast, without the university’s support, and grants from the Arts Council and elsewhere.

A great source of talent But what do businesses such as Attention Design offer existing SMEs? In search of answers, I talked to Neil Hannah, the New Business Manager in the Department of Academic Enterprise. It’s no secret that established businesses can be wary of working with or for start-ups. So why should they put their trust in an operation that’s been incubated? ‘One big issue for most start-ups is the lack of a genuine business plan,’ says Hannah. ‘Instability and failure are often the results of poor planning, and I can understand established businesses being reluctant to work with startups that don’t have a clear sense of direction. Working with an incubated business is much less risky, because you can be sure they have given due diligence to planning. SMEs want to work with people who have been trained, supported, have written robust plans and have had a professional start.’

34 • issue 164 Business Matters

But planning isn’t everything. The success of business relationships depend on the quality of the people involved. Do incubation schemes deliver better people than average? Yes, says Neil Hannah. ‘There’s quite a rigorous selection process, and we see its benefits in the high survival rates of incubated businesses. We're good at weeding out those who aren't clear about their vision or what they're doing – if we’re going to keep the faith of the existing business community, it’s important we’re pretty robust about that. Applicants

The success of business relationships depends on the quality of the people involved. for the incubation programme have to demonstrate determination and ability.’ Importantly, as well as offering cheap office accommodation and access to funding, the university also gives the founders of its incubated businesses intensive training in the skills required to run a successful enterprise. ‘Again,’ says Hannah, ‘that’s the sort of preparation many new businesses just don’t get. We provide a greater level of support than is available from open, publicly-funded programmes, excellent though they are.’

Their earliest challenge was marketing: ‘our customers are publishers, large multinational organisations with huge turnovers and hundreds or thousands of staff,’ says Marc. ‘These are the people that we are selling to. But our target end user is every games player and console owner in the world. So our products have to have a very broad appeal.’ As is the case with the team at Attention Design, Marc and David say they owe much of their success to the support offered by the university’s incubation scheme, and the fact that their customers like working with a business that has youth and fresh ideas, but also a good chance of long-term stability and survival. ‘We think the support has been invaluable,’ says David. ‘We were given the perfect setting to get up and running and spend time creating products. With our products taking at the very least six to seven months to complete, the office space and the pressure-free environment made development that much easier. We’re about to move into bigger offices - now we are at the end of our stay here we can look back and appreciate that support all the more.’ I left Middlesbrough with the strong impression that the university was offering an enterprise scheme that lived up to its hype, and which dug deep into the enterprising and innovative spirit of the locals. Teesside will never be the most beautiful place in the UK, but in business and technology terms, it’s one of the most exciting.

Great Games A little way down the corridor from Attention Design are the offices of Halch, another of Teesside’s exciting incubated businesses (www.halch.co.uk). Founded by graduates Marc Williamson and David Hankin, and already employing a staff of nine, Halch is a brilliantly innovative computer animation and games firm. The Halch team has already created games for the Nintendo DS and the Sony PlayStation, and recently worked on an animation commissioned by MTV. Not yet three years old, Halch already has major clients in the US and Japan.

How do I find out more about businesses in incubation? If you’re interested in seeing the kind of potential partner and client businesses a UK university has on offer, your best bet is to approach them direct, says Neil Hannah. ‘Here at Teesside we’re always interested to talk to established businesses about how they can partner with one of our incubatees.’ Neil can be contacted on n.hannah@tees.ac.uk or 01642 384646.

BM164_035.qxd:Layout 1

1/9/08

01:08

Page 1

WANT TO START YOUR OWN BUSINESS? BESTSELLER

‘Covers everything that an entrepreneur could want to know’ Independent on Sunday • Over 140 easy-to-read articles • Viewpoints from small business owners RRP £19.99 • Online Offer £15.99

NEW

• Getting off the ground • Managing your money • Getting paid on time • Company admin, tax & payroll • Coping in a crisis RRP £14.99 • Online Offer £11.99

BUSINESS ON A SHOESTRING SERIES Aimed at entrepreneurs with plenty of vision but not a lot of cash • Ideas that really work • Step-by-step advice • Written by small business owners RRP £8.99 each • Online Offer £7.19 each

For full details of all our books and to order online, visit: www.acblack.com/smallbusiness

BM164_36Q7.qxd:Layout 1

31/8/08

22:01

Page 1

Advice

The business builder Brad Rosser has joined the Business Matters team - and he wants to help you grow your business and maximise your potential Brad Rosser is one of the UK’s most successful business builders, having raised well over £1bn in funding for startups. With investments ranging from as little as £20,000 to as much as £900m, he has nurtured and sold businesses with values in excess of hundreds of millions of pounds. Brad is passionate about working with start-ups and loves doing the hard yards with partners who are taking their businesses to the next level. Brad is also enthusiastic about improving the skills of entrepreneurs through practical training. Prior to setting out on his own, Brad was Group Corporate Development Director for Virgin, where he was responsible for identifying all new businesses that Virgin should pursue and then turning the ideas into thriving, profitable operations. He also spent several years at McKinsey & Co. advising some of the world’s largest companies. Brad has also been extremely successful in his own enterprises. His diverse business interests include one of the UK’s leading mortgage brokers, several of the UK’s largest ‘cashback’ and money-saving websites, residential property investment services, and international resort development. See www.bradrosser.com for further information.

Q: I’m thinking about bringing a partner into my business. Have you had partners in the businesses you’ve been involved in? A: In general, I think that having a partner is a good idea. When I was at Virgin I realised that although it is Richard Branson’s and Virgin's names that have the highest profile in a venture, Richard will always partner with someone who knows the industry better than he does. I have followed a similar approach in most of my own ventures. Being in business on your own can often be lonely, and it’s great to have moral support. If you think you need a partner you need to ask a critical question: ‘is the partner going to bring a core skill into the business that I do not have, and that is so crucial that I can’t capture it just by recruiting an employee?’ Can you give your partner a massive ongoing responsibility to do something you can’t do, and leave them to their own devices, and be completely relaxed that they will get it done? You must be honest here, and assess

your own capabilities. If the answer is to the question is ‘yes’, go for it - get a partner. There is one caveat: if you’re the untrusting, second-guessing type who keeps yourself up at night wondering what your partner is up to, think again. You cannot manage partners like employees - you’ve just just let them get on and deliver their end. That’s why they are partners. One last word of advice: whenever I have been a partner or put two together I ensure the ground rules are agreed and have them written into an agreement on salaries, expense policy, dividend policy and all the rest. Q: With the economic outlook worsening, what suggestions do you have for improving sales in difficult times?

monitor them closely. Ensure the right incentives are there and make the commission element of their packages as high as possible. With these fundamentals in place, you can think more strategically. First off, help your staff to sell – as conditions have changed, we have changed our sales scripts and sales messages. We have provided additional training and given them up to date market information. Second, focus on existing customers. It’s far easier (and faster) to sell to them than to find new ones. We’ve reviewed our database to find clients who have not purchased for some time, or only in a single market, and who have significant equity available in their existing investments. Third, run sales events. We have held events such as evenings showcasing a new property market or development. We can both educate and inform our clients and sell face-to-face, once again to existing clients. Fourth, offer special incentives. To help sell a particular development rapidly, we have offered special commission incentives and bonuses. We are aware that the market is tougher, and are therefore prepared to reward our staff. But watch that sales staff don’t suddenly ignore all the products and services that don’t carry additional incentives! Finally, review the products you are selling, listen to your customers, and look for new opportunities. We constantly review the outlook for property markets around the world and adjust our property sourcing accordingly. We also solicit regular feedback from our clients about which property markets they are looking at and what products and services they need.

Firstly, make sure you have the fundamentals in place. You need a talented and highly motivated sales team. If they aren’t the right people then remove them ASAP. Churn can be a good thing. Don’t let your sales staff ever get too comfortable. Set them very clear targets and

Business Matters issue 164 • 36

BM164_030.qxd:Layout 1

1/9/08

01:21

Page 1

“We started making and selling wormeries for composting on our farm. Now, to reach a much wider audience, we advertise on Google using AdWords. Nearly a third of our sales come via the internet – from all over the UK. It’s a bit like a marketing worm farm!”

Visit www.google.co.uk/ads-freetest for more info about advertising on Google and a FREE £30 voucher to get you started. Terms and Conditions: The promotional code can only be used for AdWords accounts that are less than 14 days old. Voucher can be redeemed for AdWords advertising. Only one promotional code per customer. Customers must be from the UK or Ireland. A £5 account activation fee or equivalent credit deduction required depending on your preferred billing options. For full terms and conditions please visit http://www.google.co.uk/adwords-voucherterms

BM164_38Q7.qxd:Layout 1

31/8/08

22:06

Page 1

Advice

Maximise your Google AdWords campaign AdWords Professional and experienced trainer Claire Jarrett looks at the seven essential rules for a successful pay per click campaign on Google. 1. Avoid using a single generic ad A common error is to set up just a single ad, probably the one you created when you first set up your Google AdWords account. Weak generic ads tend to look like this: Virtual Office Services temporary staffing, virtual office registered office, mail forwarding www.freelanceofficeservices.co.uk This is trying to advertise several services in just one ad, which is a bad strategy. The secret of success with Adwords is targeting - each ad should be as precise as possible in terms of the product or service it offers. So don’t try to fit as many keywords as possible into your copy. Aim to set up one tailored Ad Group for each product you offer.

2. Use Negative Keywords If you do not want to attract a certain type of customer, you can take steps to avoid them seeing your ads. For example, you might wish to dissuade people whose searches include the words ‘free’ or ‘cheap’ from clicking on your ad and costing you money you are unlikely to recoup from them. If they aren’t likely to buy, why bring them to your site? The way around this is to ensure you include negative keywords during your campaign setup.

3. Measure conversions Internet marketing is highly trackable, and it makes sense to analyse your Adwords results so you can get an idea of your return on investment and how you can improve your campaign. Use a tracking package such as Google Analytics to install tracking code on

38 • issue 164 Business Matters

each page of your webpage where a conversion might occur. You could track: • • • •

Purchases Sign ups Call Back requests PDF document downloads

It is useful to note that you can assign nominal values to conversions to allow you effectively to measure your return on investment. For example, if you normally convert 25% of your callback requests into clients, and a new client is worth £1000 to you, a call ack conversion would be worth £250.

4. Avoid using your company name as your ad’s headline When creating your first Campaign, it is a common error to use your company name as the ad headline. Your headline should contain information that is useful to your visitors. Ensure it contains the keywords that relate to one specific Ad Group only! For example: Bouncy Castles for Parties Hire A Bouncy Castle From £45 Many Different Sizes Available www.kingofthebouncycastle.com Aim to match your headline to just the single product or service you are advertising in that particular Ad Group. This will ensure your visitor wants to click on your ad, as it matches what they were searching for.

5. Use dedicated landing pages People are lazy and have limited attention spans. So don’t make them hunt around your site - show them exactly what they want to find, and quickly! Your aim is to send people to a tightly focused landing page that specifically relates to that single product or service only. Doing so also allows you to track the success of your Adwords campaign more precisely.

6. Choose enough keywords Starting out, you might just use a few keywords you’ve thought of yourself. Trouble is, your potential visitors don’t always think the same way as you do! Use a keyword tool (such as the free one provided by Google) to generate as many related keywords as you can. Select the ones that are similar to your original keyword phrase. But don’t go too far and end up with 100 keywords for just one Ad Group! Ensure you choose only closely related keywords from the suggestions generated by the keyword tool. For keywords that are not so closely related, create a new Ad Group.

7. Content Network off! Google’s default setting is to leave the Content Network on, which runs the risk of people who are not interested in buying clicking on your ad. So turn it off. If you are really interested in making the Content Network work for you, invest some time learning how to use this form of marketing effectively. Claire is the lead Trainer on the highly rated DVD course “Master AdWords!” due to be released on 30th September.

BM164_38_39bQ7.qxd:Layout 1

31/8/08

22:03

Page 1

Marketing

21 reasons why we don’t buy your stuff... ...or refer you, or think much of your sales management. Direct sales expert Fraser Hay, Referral Institute’s Suzanne Cauchi and sales trainer Marcus Cauchi join forces to give us their top twenty-one tips on sorting out sales problems 1. We don't know or trust you. Give us a reason to want to get to know you, and a reason to trust you. Testimonials help. So does a money-back guarantee. Offering a FREE trial or download is useful. Start raising your profile and visibility by blogging, writing articles, networking, and attending events, exhibitions, and by hosting workshops and the like. Be different. Offer something different. Stop offering features. Start offering real benefits. Do you empathise with your target audience? Do you know the problems they have, and can you genuinely help them? Do you aim to help? Or do you aim to control? What tactics can you use to get people talking about you and referring you to others who need help in the area you specialise in?

2. We don't want your product. A toughie. If customers really don't want what you’re selling - don't push it. But if we need it, and we just don’t recognise that we need it, think how you can demonstrate or prove to us the value you offer. Think how you can allow us to come to the conclusion that we have a need for what you offer - that the true cost of not acting or choosing one of your solutions will be much more expensive in the long run. You certainly don't want to expend money and effort going to appointments to drink our coffee and waste our time and yours if you could have discovered hours, days or weeks

ago whether we were interested in what you have to offer or not, and whether we need what you offer or not.

3. We won't pay what your asking. Again, this is simply because we haven't recognised the value you offer. Calculate and demonstrate the opportunity cost, or the real cost, of us not acting. Calculate and demonstrate the saving or efficiency you offer, and/or the inefficiency, waste or spiralling cost or loss in not working with you. Try this: write down how much you want to generate in sales in the next 12 months. Write down how much you want to earn in revenues in the next 12 months. Now write down your current annual revenue. Now subtract your second answer from your first answer. That's how much you're losing or not generating now - how can you illustrate that point to us, your potential clients? More importantly, how do you plan to generate the revenues you want? What’s the plan for them? And for you?

4. We just don't believe in you. So prove yourself. Show what you can do. Give us reason to believe. Offer samples, or a puppy dog close - a FREE trial. See point 3. Show us the hundreds of testimonials you have, or all the videos you have on YouTube and links to your previous blog posts - so we

can get a taste of what you’re like, what you know, what you've achieved and what you believe in - people buy from people they like. As your prospects we want three things: confidence, progress and results. So give them to us. Give us the confidence we crave, and the belief that you can help us achieve progress and results. We’re human: quite often we simply don't know what it is we want because we don't where we're at, or where we've been, and thus which way we're heading. So why not help us do that? Allow us to experience the help, guidance and support you offer, and show us how much you go the extra mile in order to nurture the relationship.

5. The timing isn't good for us. Reschedule. Plan in advance. Illustrate and demonstrate the cost of not acting now. Introduce scarcity, limited stocks, impending price increase, delayed delivery times in not acting. Ask us why the timing isn't good, to draw out our real reasons or objections and not just the excuses. Offer us a discount to commit today, but accept delivery in 1,2 or 4 months’ time. Will the timing ever be right? Or will the cost of our pain increase in the meantime? Think back to your answer in that little exercise in point 3 - how much of a gap is there between where we, your prospects, are now, and where we want to be? More importantly, do we know what we want and understand how you can help us achieve it?

Business Matters issue 164 • 39

BM164_38_39bQ7.qxd:Layout 1

31/8/08

22:03

Page 2

Marketing

6. We don't have the money! Again, remind us of the cost of not acting. Offer us a discount for prepayment, and/or split the payment terms. Offer us a finance option or a lease option. Take away some of the value you offer and lower the price. Ask us on a scale of 1-10 how serious we are about wanting to solve the problem, and how much we can afford to lose or continue to lose compared to the price you propose to charge. Why not offer us a 100% return on our investment?

More importantly, what questions have you forgotten to ask about us? You can never know your customers well enough, and you want to make sure you have qualified us with sufficient thoroughness so you don’t waste our time and we don’t waste yours.

you realise why most successful people are good at asking for referrals the better. They aren’t bashful or afraid to ask. And there’s no shame in asking for help. In fact, you might even be pleasantly surprised that people are generally more than willing to help.

Fraser Hay is the founder of www.theresultsacademy.com, the business coaching club that offers four things to its members – knowledge, contacts, opportunity and results.

9. Give and thou shalt receive - just don’t take it for granted

Referral Marketing

7. Uh, we have a question... Unanswered questions prevent sales from happening, so draw out the key answers in advance via a list of frequently asked questions on your website. Pre-empt the questions by saying to us ‘you're probably wondering… well, what we do is…’ Because, you know, we were wondering that. Unanswered questions can be eliminated by identifying the unasked questions, and answering them before we prospects even think of them. Unanswered questions are usually the result of a lack of product knowledge or - and this is much more potentially damaging - a lack of belief in the product or lack of sufficient research into the nature of the market and your customers’ needs.

40 • issue 164 Business Matters

8. You didn’t ask! Asking for referrals is simple but few people do it consistently or effectively. If you’re like most people you probably wait until we offer to refer you to our contacts, because you don’t like to be too pushy. You do a good job, we like you, you deliver what you promised, you go the extra mile and that means we ought to refer you to our contacts, so why don’t we? Because, as your customers, excellent service is our minimum expectation. When was the last time you bought a product or service and you were pleased because it didn’t meet the expectations you were sold? The sooner

Some of you may have heard about the often misunderstood ethos of givers’ gain. It means that you give help and referrals without expectation of reciprocation. Great referral marketers get referred because they are the people you go to whenever you need to get to know someone else. They are the first people you call when you need an introduction, to see who they know. Giving without expecting anything back makes you highly attractive and highly referrable. Givers’ gain isn’t about karma or the laws of universal tree hugging.

10. You’re unreferrable Selfish networkers are two-a-penny. They can’t wait to tell us about themselves, they forcefeed us their business cards, they try and sell to us constantly and they hound us to refer them. The sole purpose of our existence is to fertilise their egos. If you’re one of these people, change your behaviour fast. You become unreferrable if you don’t follow up. If you don’t

BM164_38_39bQ7.qxd:Layout 1

31/8/08

22:04

Page 3

Marketing

say ‘thank you’ or keep your referrers informed, you run the risk of quickly hurting your relationship with us. If you don’t project your competence with conviction and authenticity, you’re telling us and other prospects and people in your network that you don’t have the right to be here in the first place. If you’re needy and desperate we won’t buy from you and we certainly won’t introduce you to the people we’ve spent years cultivating relationships with and who pay our mortgages and other bills. But the number one reason you become unreferrable is that you fail to close. This causes referral remorse in those who have been unwise enough to pass your name on, and the referrals dry up fast. You’ll know you’re doing something wrong if you can’t identify between four and eight relationships that have delivered ten good, qualified referrals over the course of the past year.

come credible is to spend time getting know us and establishing trust.

11. You confuse visibility, credibility and profitability

Referral marketing requires you to take a long term view. Your number one obligation in any referral situation is to make us, your referrers, look good in the eyes of the prospect. Hurting our relationship with the person we referred you to will be the kiss of death; not only for your relationship with us, but for you. Why? Because we’ll tell our friends. You will get a reputation as being a risky person to refer throughout our network and yours. So, even if it means you don’t win the business, make sure you leave the prospect with a better

If you actively participate in more than three networking organisations you’re likely to be over-networked. We’re seeing too much of you. You’ll certainly be highly visible if you attend networking function after networking function - but will it be for the right reason? If you want to profitable, or in other words receiving and passing referrals, then you have to become credible first. The only way to be-

impression of us, the referral source, than they had previously.

12. You don’t understand people In any referral situation there are at least three relationships: The referrer and the person being referred; the referred person and the prospect and the prospect and the referrer. Not understanding the behaviour and preferred communication styles of each party can cause delays, relationship breakdowns, lost sales and confusion. I like the big picture and focus on the result; my referrer may be people-orientated but likes detail; and the prospect likes detail and focuses on the result. You need to adapt to accommodate all these styles to win the sale and keep referrals coming.

13. You don’t understand your obligation to your referral source

14. You don’t have a system If you’re like most people, you wing it when it comes to your referral marketing activities and every referral is a bit of a surprise. If you want to receive referrals consistently, then find or create a system that works - one that you can replicate and that is simple enough to teach to people in your network. Once you’ve found a system, immerse yourself in it until it becomes habit. Referral marketing needn’t be a random activity. With the right system, it should be as predictable and regular as a well executed, sequenced, segmented, field tested and targeted advertising campaign. Experience shows expert referral marketers needn’t be actively involved in more than three networks, and can maintain as few as four to eight strong referral source partnerships. Don’t tell your spouse though - or you won’t be able to keep using your networking with us as a substitute for having no other social life...

Suzanne Cauchi is Managing Director of the Referral Institute London Central, and an internationally-recognised expert on the use of referrals for sales, marketing and promotions www.referralinstitutelondoncentral.co.uk.

Business Matters issue 164 • 41

BM164_38_39bQ7.qxd:Layout 1

31/8/08

22:04

Page 4

Marketing

Sales Management 15. You’re managing the wrong end of the problem

Managing your revenue is as pointless as the police managing crime figures instead of catching criminals. You can only manage what you can control and we customers control the cheque book. As the seller you should control the sales process. Sadly, the majority of sales managers have been made managers because they were good salespeople, not because they’re good managers.

16. You have a small carrot Companies will naturally promote good salespeople into management roles. Management talent is assumed to follow. You lose a good salesperson and gain a bad manager. In the same way domestic violence can be traced back through the generations, sales management abuse can be traced back through generation after generation of abused, harassed and panic-stricken managers. Few sales managers are groomed into the role; they get no training in managing people, they do to their people what was done to them - small carrot, big stick – and they encourage their people to do the things that they didn’t do when they were successful in sales. In fact, they were successful precisely because they didn’t do what everyone else does. Oh, and consider this. In our experience, the average ‘professional salesperson’ spends only about 6% of his or her time in front of customers and prospects and is only effective in their role for between 25-35% of the time you’re paying them. Feeling good? There’s more bad news!

17. You’re recruiting in your own image… but weaker Sales managers tend to recruit in their own image… only weaker. They hire people they like (because they are like them-

42 • issue 164 Business Matters

selves) but don’t pose a threat to them. They hire because a salesperson looks good on paper and sells themselves well at interview. Some don’t even take up references! Stupid! Stupid! Stupid! One client of ours complained after he’d hired a salesperson that ‘the best ******* sale he ever made was his interview. He never sold a ******* thing after he came on my payroll!’ Your candidates have the skills, experience and track record on paper, but if you’re judging them on this you’re driving your Bentley by only looking in the rear-view mirror. Skills, experience and results tell you about a candidate’s history, not their future performance. Are they burnt out? Do they have the right attitudes? What are the habits you should recruit for? What do you want to buy in and what can they learn on the job? The received wisdom says it costs you 25 times salary to make a bad hire. This is a fraction of the real cost.

18. Recruitment is a chore and only happens as a reflex when a vacancy appears Great managers recruit constantly. They replace their weak salespeople with stronger hires. They don’t tolerate persistent under-performance and always have better people waiting in the wings for a vacancy to appear. Don’t treat interviews as an inconvenience and prepare them on the walk from your office to the interview room. If someone is running around with your profits and dividends in their mouth, and they could either secure or ruin dozens of customer relationships which may last for years, and refer you to other customers, doesn’t it make sense to protect your investment? One that is potentially worth millions of pounds to your bottom line?

19. You tolerate mediocrity Fear of confrontation is normal. Some managers prefer to be liked than to be successful. If managers tolerate mediocrity they get the chance to play the superhero and save the day when their team is behind target. If you are constantly firefighting, you can’t develop your people. Your salespeople aren’t held accountable until they get their P45s. Unless accountability and consequences go hand in hand, salespeople end up managing their managers and avoid being fired. Honest reporting and accurate forecasting are urban myths for most sales managers. Mediocre salespeople perform inconsistently. Mediocre managers can’t eliminate rollercoaster performance. And

if you aren’t sick to your stomach yet, just wait until you read the next couple of paragraphs!

20. Your priorities are wrong. Ask your managers what their teams’ 90-day plans look like. You’re probably going to be disappointed. Which accounts have a ‘protect and grow’ strategy and which have a ‘pursue and plunder’ strategy? Of your A-list accounts, which also show A-growth potential? Are your salespeople babysitting accounts that have C potential instead of concentrating on C-list accounts with A-growth potential? Salespeople are generally a lazy bunch and often prefer to talk to their friends (who aren’t spending money on your products) instead of talking to the difficult ones who offer the richest pickings. Top performers know their wallet-share and uncover the potential. Do you know yours? Or even how to find out how much your customers are spending with your competitors? Are your highly paid salespeople leaving money behind because they’d rather talk to their mates than engage with tough prospects who might say ‘no’ and reject them?

21. You try to manage your people Bad managers manage. Good managers train, coach and mentor. Managing salespeople is indicative of bad recruitment, bad management behaviours, bad systems, bad culture and ignorance. Yes, that’s right - ignorance! If you’re paying a salesperson the equivalent of a third world nation’s debt and giving them the toys and the freedom to squander your scarce, expensive technical resources, then it serves you right if they see fit to mess you around. Did you know that writing proposals for nonprospects and free consulting are two of your highest hidden costs? A £25m client of ours lost £1m in profit to the cost of writing pointless proposals last year. We fixed the problem with eight simple questions. That £1m equated to the CEO’s entire profit target for 2006/7. By selectively doing nothing this year, he’s already got that in the bag. Good managers identify the behaviours that matter and help their people to motivate and manage themselves. Marcus Cauchi is a specialist sales trainer with Sandler. If you want to find out how your salespeople and sales managers may be hurting your profits and slowing down your exit plan, ask us for our sales & sales management audit (SalesMgmtAudit@SALTeurope.com). Contact him on: 0845 458 1237 or MCauchi@SALTeurope.com

BM164_45:Layout 1

5/9/08

02:41

Page 1

The region’s premier business to business exhibition and conference

Doncaster Racecourse 1-2 Oct 08

BUSINESS YORKSHIRE

be educated be inspired be motivated

Turn your back on the crunch.

Face the business In the current economic climate it is more important than ever to understand business trends and be networking in person, especially face-to-face. Business Yorkshire exhibition and conference is a unique platform designed specifically for business owners, directors and entrepreneurs to do just this. By attending you will be amongst 1000s of likeminded individuals who want to learn cutting edge business techniques, listen to inspiring keynote speakers, network to help sustain and develop business and source products and services. Register online for free tickets to the region’s premier exhibition and conference or call us to discover how you can showcase your business to thousands of Yorkshire based business decision makers.

Owners, directors and entrepreneurs - don’t miss this essential business event • World renowned keynote speakers

• Over 130 exhibiting companies

• Informative educational seminars and workshops

• Complimentary corporate breakfasts

• The largest business networking evening in the region

• Exciting speed networking

• Exhilarating speed pitching and Angel investing

• Advice clinics • FREE TO ATTEND

Ideas, information and inspiration for your business

www.business-yorkshire.co.uk 1-2 October 2008 Doncaster Racecourse Tel: 0117 907 1000 SUPPORTED BY

MEDIA PARTNER

BM164_44Q7.qxd:Layout 1

5/9/08

09:01

Page 1

Forum of Private Business

Think small first The Forum of Private Business looks at the tide of government regulation drowning the owners and managers of small and medium-sized businesses

he Government has unveiled plans to impose ‘regulatory budgets’ on departments. Their purpose will be to stem the tide of new regulations that leaves many entrepreneurs having to negotiate the piles of paperwork that land on their desks each day. A 2007 survey carried out by the Forum of Private Business (FPB) into the cost of complying with regulations revealed that, on average, business owners devote 14 hours per month to filling in forms. The Government’s historical efforts to micro-manage the economy through legislation first and foremost conflicts with the FPB’s ‘think smallest first’ campaign, which was launched in Brussels by Phil Orford, the FPB’s Chief Executive. Excessive regulation is a barrier to entrepreneurship. How can the smallest businesses, those with fewer than 10 employees – the average size of FPB members - hope to grow if expansion means having to tackle a far greater administrative burden? The FPB has called on politicians in Brussels, Westminster, Northern Ireland, Scotland and Wales to sign a pledge supporting the campaign.

Left alone Entrepreneurs want to be left to run their businesses effectively, wherever possible, free from any unnecessary regulatory restrictions. The FPB has long called for a change in the regulatory culture that is often associated with doing business in the UK. At last, the Government appears to be listening. At the least it is making some of the right noises. Announcing

44 • issue 164 Business Matters

the regulatory budgets recently, the Secretary of State for Business, Enterprise and Regulatory Reform, the Rt Hon John Hutton, publicly pledged to reduce regulatory output across government to ‘as close to zero as possible.’ However, despite being encouraged that the Government is finally taking action, the FPB has some reservations. In March this year, an FPB survey revealed that 84% of respondents agreed that the Government's plan to simplify regulation should be extended to cover the costs of compliance with regulations.

Red tape Part of the problem is the lack of a definition of ‘red tape’. The FPB is calling for a definition that is shared by decision-makers and business owners alike, and one that includes the burden of more established legislation, in addition to new laws that are coming through. Many existing regulations, particularly in the important areas of health and safety and employment, contain administrative requirements that are just as burdensome for the owners of small businesses as the new ones that are coming in. While the proposed regulatory budgets may counter future red tape, it is less certain how they will ease the existing problem. The FPB's Research Manager, Thomas Parry, said: ‘In the past, government impact assessments have underestimated time and requirements for small businesses. Our own research has shown that the time required by our members to unravel the complicated tangle of red tape and do what is expected of

them as owners and managers is significantly more than the Government's estimations.’

Burdens Once there is an understanding of what unnecessary regulation means for business owners, then the burden of new and existing regulations can be properly addressed. The FPB is planning regular surveys of members, which continue to report a steady increase in red tape, in order to gauge the real success of the Government’s efforts. FPB member Richard Allen owns a hairdressing salon based in Canterbury. He is struggling to run his business due to the current regulatory burdens and associated costs. ‘The whole thing is ludicrous,’ said Mr Allen. ‘At the moment, I'm having to deal with employment legislation. Due to the costs of the burden of red tape, we have had to reduce the number of staff we employ; we've gone from having fourteen to eight employees. The FPB is concerned that, if the whole system is not properly coordinated, the new proposals could fail to produce the expected results. Regulatory budgets, which should include regulations emanating from the European Union in addition to domestic departmental targets, must be both closely managed and results-driven. If they are not, the scope for failure will increase considerably.

BM164_45:Layout 1

5/9/08

02:37

Page 1

Advice

Communications breakdown seems to be time that businesses sat up and did something about it. Not only would employers then be safeguarding the health and welfare of their staff, they’d also be doing the public image of the company a great deal of good. A person stumbling over their words, sweating profusely and generally sounding quite incompetent is not going to give a good impression to a group of potential clients now is it? Rosy Maria, a life coach and the other co-founder of Secret Success, says: “By taking control of and changing thoughts, images veryone hates something about their job. For some people it’s the monthly round of finance reports they have to put together, for others it’s dealing with the endless emails that ping into their inboxes all day. But for millions of workers in the UK there’s one thing that leaves them in a cold sweat and having sleepless nights: it’s the fear of public speaking. That’s lucky for you if you’re a confident person who revels in the fact that you can hold a room full of people in the palm of your hand and hanging off your every word. The chances are that you’re in the minority though. For most of us the thought of standing up in front of our peers is a daunting one.

Phobia Recent research has shown that this phobia is no trifling matter and employers are becoming increasingly concerned about it. The UK is facing a shortage of socalled soft skills and the fear of public communication, such as presenting, is costing businesses

millions of pounds in ineffective meetings as well as the loss of new business opportunities. But forcing employees to face their fears is no easy task. In the UK alone, stress, anxiety and depression accounts for one-third of the 168 million absence days a year, according to a report by the Phobics Society. In monetary terms, these startlingly high numbers equate to around £4.1 billion in costs. That’s quite a lot of money for putting pressure on people to do their jobs. Belinda Pestana, co-founder of life coaching business Secret Success, says: “A fear of presenting can be very damaging to a person’s career and it can become a concern for employers too. With the current average cost of recruiting a new employee exceeding a whooping £5k, it makes perfect sense to help existing employees to overcome their unwanted fears and business-related anxieties.” With about 70 per cent of the UK workforce claiming they hate public speaking, then it really

and feelings of fear and anxiety, people will be able to switch off a panic reaction, feeling calm and relaxed in just a few moments. “Employees who have previously attended our workshops were initially sceptical, but now are no longer afraid and have acquired the skills to master their emotions and work with a greater sense of ease and well being.” So, if you think your business is lacking some decent presenting skills then it may be time for your employees to take the challenge and face their fears. Just don’t make them hold any spiders.

BUSINESS CAR INSURANCE

Keep your business moving! BENEFITS OF BUYING DIRECT FROM US:

Save up to 10%

¥ 0% Interest Free Instalments, helping your cash Ýow ¥ FREE 24 hour claims service and 48 hour replacement vehicle ¥ 24 hour Accident Recovery Service Ï Comprehensive cover only ¥ Courtesy Car provided Ï Comprehensive cover only

www.morethanbusiness.com/ business car

0800

072 5750 Lines open 8am-8pm Mon-Fri, 8am-4pm Sat

´ BUSINESS is a trading style of Royal & Sun Alliance Insurance plc (No. 93792). Registered in England and Wales at St. Marks Court, Chart Way, Horsham, West Sussex, RH12 1XA. Authorised and regulated by the Financial Services Authority. For your protection, calls may be recorded and monitored. Offer subject to terms and conditions. Discount based on prices available for like-for-like RSA policies.

Business Matters issue 164 • 45

BM164_46Q7.qxd:Layout 1

31/8/08

22:07

Page 1

Advice

Buying your business premises In the second part of the article, started last month, Independent Financial Advisor Gavin Porritt examine the final option when purchasing business premises - using your pension scheme. egislatively speaking, all registered pension schemes can invest in commercial property. In practice, scheme trustees and providers limit the investment options.. Greater investment flexibility is only found under more specialist vehicles like self invested personal pensions (SIPP) or small self-administered schemes (SSAS). There are also restrictions on occupational pension scheme (OPS) investment in property that is leased to the sponsoring employer or associated companies (or parties connected with such a company.)

The rules An OPS cannot invest more than 5% of its assets in employer-related investments, or make any employer-related loan, unless the scheme has fewer than 12 members, all members are trustees of the scheme and the scheme rules require all members to agree in writing before any employer-related investment is made. In practice, this effectively means that the only OPS able to meet the above rules and make significant employer-related investments are SSAS. These restrictions don’t apply to SIPP, as the Revenue does not regard them as employer-sponsored arrangements. The advantages of this route are: • There is a cost saving - payments to the scheme attract tax relief. • Rent received by the scheme is free from income tax. • Rent paid by the company is an allowable

46 • issue 164 Business Matters

expense for corporation tax purposes. • As the property is owned by the scheme, it is separate from the company/individual, so there will be no enforced sale of the property by creditors if the company/individual goes into liquidation or becomes bankrupt. • There is no capital gains tax (CGT) payable if the property is subsequently sold. • Improvement in the company cash flow – the funds that would be required for the company to buy the property can be used for other business purposes. Similarly, if the company already owns the property and sells it to the scheme, it will get a cash injection. • On the death of a member before the age of 75 there will normally be no inheritance tax (IHT) liability as the property is an asset of the scheme; there are exceptions to this though. • You can now hold property in your pension scheme indefinitely, provided you have enough liquidity to pay any possible income requirements. • The pension scheme is responsible for maintenance of the property; joint property purchase is possible – for example, two or more SIPPs could jointly own property. The proportion owned by each SIPP would be determined by the contribution towards the property purchase. Each SIPP would then be entitled to income (that is, rent) in proportion to its share of the property. On the down side: • Lack of liquidity, it could be difficult to pay benefits on death or retirement if the property

cannot be easily sold. Having said this, the availability of phased retirement and income drawdown has made it easier to manage this risk. Even if a property cannot be sold quickly, rental income from the property can be used to pay pensions.

Joint purchase headache • This can also be a potential problem with joint purchase. In addition to the above, possible solutions include the remaining syndicate members using liquid assets in their pension schemes (or borrowing via their pension schemes) to buy out the leaving member’s share of the property. As a last resort, it may be necessary to sell the property. • The company has to pay rent at the market rate. • Potential lack of diversification of the investments held within the scheme. • If the company needs to borrow, the property cannot be used as security as it is owned by the pension scheme. Borrowing could be more restricted, the maximum the scheme can borrow is 50% of the scheme assets. • Investment returns could suffer if the company goes into liquidation and a new tenant cannot be found.

If you have any questions or comments, please feel free to e-mail them through to me at bm@forumwealth.com.

BM164_47:Layout 1

5/9/08

08:47

Page 1

The 21st & Ultimate Grand Finale

JUSTIN ROSE LEE WESTWOOD SERGIO GARCÍA MIGUEL ÁNGEL JIMÉNEZ COLIN MONTGOMERIE I A N P O U LT E R LUKE DONALD

30 October - 2 November Club de Golf Valderrama, Sotogrande, San Roque, Andalucía Don’t miss your chance to watch the top 60 players of the European Tour competing for €4.25 million in prize money as the 21st and ultimate Volvo Masters promises to be a feast of ﬁne golf. Buy your tickets in advance with a 10% saving at Golf in Spain.com or call +34. 952 247 4848

www.volvomasters.com

* Player participation subject to classification and not guaranteed

PADRAIG HARRINGTON

BM164_48_49:Layout 1

5/9/08

02:37

Page 1

Advice

Get set for an online Christmas

Each year, Christmas seems to start earlier, so in order to be ready for what is often the most profitable time of year, you have to start fattening the goose even sooner. Here are ten tips about the special requirements of Yuletide retailing online, backed up by the experiences of site owners.

hatever marketing you are planning for your site in the run-up to Christmas, run some small-scale tests as soon as possible. Establish what works best, and refine it. And if search engines are important for traffic, then prepare, optimise and submit your Christmas pages now. Don’t wait, or you may be too late.Keith Milsom at www.AnythingLefthanded.co.uk advises, “We plan ahead for promo emails to various groups as it takes a

48 • issue 164 Business Matters

while to prepare them. We also boost our PR activity with a press release in September.”

Can you handle the extra traffic? If there is anything worse that having no orders, it's the frustration of going out of stock, or having fulfilment problems and having to refund the money. Problems like this produce unhappy customers that won't be coming back. An average ecommerce site sees a 30% rise in orders in November/December, so make

sure that the business can cope with the increase. This includes web hosting and having extra staff to help with shipping. Bill Stevenson of www.spicesofindia.co.uk advises ordering extra stock and advertising for temporary packing staff in September. “Last December visitors fell, but conversion rates went from 1% to around 3%. We ran out of many Christmas gift sets and could not get new stock in time. This year we have ordered enough to allow for a 5% conversion rate.”

BM164_48_49:Layout 1

5/9/08

02:37

Page 2

Advice ‘Christmas is coming and the goose is getting fat, as the saying goes. And the one sure thing is that on the hyper-competitive net, someone else will be getting fat’

Sort your deliveries

able you to start clearing slow moving stock even before December has passed.

Make sure your logistics supplier can cope. Consider a courier for the peak period, or Special Delivery. Letting customers select delivery to their work address can avoid missed deliveries. Robert Johnston of www.gentlemansshop.com adds, “When we send a parcel the customer receives the tracking details by email and confirmation that the goods will arrive on the next business day. This has cut dramatically the ‘when will my parcel arrive’ calls.”

Many gifts don't stand alone, they need other items to go with them – like batteries, for example. So explicitly offer related items with your products wherever relevant. You might also suggest, similar gifts to buy. And people buying presents can be susceptible to offers like 'buy two and get one free'.

Anticipate last minute shoppers

Customers in a rush

Make clear the last day customers can order for Christmas delivery. Ideally, put this at the top and bottom of every web page. Once the deadline has passed, highlight this.

Most online shoppers, and particularly Christmas ones, are in a hurry; so you need a search capability that can match both by category and by price range. Your ecommerce product must integrate the two: search engines may be fine for text-based searching, but they're very poor when you want a gift that costs less than £10 for, say, your eight-yearold niece.Another help for rushed buyers is a gift-wrapping service. This also provides a great opportunity to increase margin.

Use seasonal promotions “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. If this approach is good enough for Google, it’s good enough for us too. Put likely presents and links to gift packs on your home page, and stock Christmas-themed items. Offer gift wrapping too. But don’t forget to change the pages on Boxing Day.Christmas specials may also en-

Upsell to maximise the sale

Thank regulars James Auckland again: “Thank your suppliers, as well as your regular customers, as they are an integral part of your team.” Good sup-

plier relationships can really help when you have problems. You could also add a ‘present’ of a discount during January for 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 Christmas present. We had dispatched it two weeks earlier but he slammed the phone down accusing me of ’ruining his Christmas‘. Just as we closed, the same guy called to apologise. His sister had signed for the parcel and dad’s special present was already wrapped and under the tree.”

Advertise January sales Make sure that you have planned your January sales ahead of time, including working out the appropriate delivery dates. It gives the ‘value shoppers’ a chance to clear all that dead stock for you.So, Christmas is coming and the goose is getting fat, as the saying goes. And the one sure thing is that on the hyper-competitive net, someone else will be getting fat eating your lunch, if they’re better prepared than you. Why not get out and eat theirs instead?

Business Matters issue 164 • 49

BM164_48_49:Layout 1

5/9/08

08:42

Page 1

Advice

What would you do if your IT system crashed, burned or got stolen? Get a free professional audit of your IT disaster plan... if you have one. Call now and quote BM0808 Weâ&#x20AC;&#x2122;ll make your IT work for you...

T 01923 654 900 E sales@fwcs.co.uk www.fwcs.co.uk

50 â&#x20AC;˘ issue 164 Business Matters

BM164_50_51:Layout 1

5/9/08

16:55

Page 2

Advice

Business Matters issue 164 â&#x20AC;˘ 51

BM164_52_53:Layout 1

5/9/08

02:30

Page 1

Advice

Seizing opportunities Parts of the bridging finance sector have had a pretty unsavoury reputation in the past. However, one company, the Manchester based, Bridging Finance Ltd is enjoying considerable success by revisiting the market with a fresh perspective. This approach has put the short-term finance proposition back into the business mainstream. Here Chris Baguley, managing director of the company explains why that is its rightful place. t is one of life’s certainties that life is full of uncertainties and business life in particular has a habit of presenting us with all kinds of uncertainties – through situations and circumstances, both good and bad, which arise completely unexpectedly. We all welcome the unforeseen opportunities. They’re one of the things that make business exciting. Usually we need to act on them quickly because it’s unlikely they’ll recur again. And if we don’t make the most of the opportunity, someone else will. It could be the chance to buy a competitor’s business or acquire a property that has tremendous future potential.

Action Unforeseen threats can arrive with similar unpredictability. They can create a major personal or business crisis. It could be any one of a number of familiar scenarios maybe an unrecoverable bad debt from a trusted customer or a contract on which your business has come to rely goes elsewhere. It could simply be that the tide of market forces has turned or that returns from a promising investment have failed to materialise. Perhaps some personal change that you hadn’t anticipated skews the direction of carefully laid plans. Opportunities can be fleeting - unless you grasp them they’ll soon evaporate. Threats

52 • issue 164 Business Matters

soon change from being ominous possibilities to uncontrollable realities. The response to both situations needs to be the same - strike while the iron is hot and act quickly to either seize the opportunity or avert the crisis. Either course of action will normally involve spending money. If you have the funds to hand, fine. If not, you have to decide how to access them. Before expending substantial amounts of money there are generally conditions to be met and choices to be made.

Slow lane Most people are familiar with the conventional alternatives: increase your facility or get an advance from the bank; cash-in a liquid asset; auction the family silver; seek out a secured loan; ask the building society or commercial lender to remortgage your home or business property. All are tried and tested routes to raise liquidity in normal circumstances. But unexpected opportunities or threats aren’t normal events. How long will the opportunity last - days, a couple of weeks? How long before the threat does irreversible damage? And how long will it take to put the funds in place? The answer is probably much more than a

few days. Conventional lenders prefer to make advances over longer timescales, usually numbered as a period of years. And their professional constraints mean that they never rush into an arrangement without first establishing their security - the solidity of the collateral, the quality of the borrower and the strength of the contract. Decisions are usually taken centrally and that means there’s a queue. The conventional route could take weeks or even a couple of months while the lender does all the usual checks and paperwork. But raising substantial funds in very short spaces of time – without paying excessively for the privilege - can be done.

Fast lane There is however one such company which specialises in providing secured bridging loans either directly or though professional channels. The appropriately named Bridging Finance Limited (BFL) is based in Manchester and has made its mark by bringing fresh order and clarity to a sector of the lending market that was itself once regarded - at best - as being rather uncertain, clouded and arbitrary. Let’s be honest, many short-term lenders are known for their expensive and unscrupulous practices. It used to be the case that finance directors or professional advisors would have

BM164_52_53:Layout 1

5/9/08

02:30

Page 2

Advice

to scour the whole sector to find a bridging finance house that would accept the collateral on offer and provide the right level of funding, at a fair interest rate, over an appropriate time period. All too often it was a time-consuming ‘moveable feast’ - in effect, an auction of frenzied negotiations. The outcome was dependent on who had the funds in place to lend, the strength of their appetite for the particular deal and the scale of their interest rate expectations. In contrast, BFL offers clients fixed interest rates, fixed time scales and rapid responses. They have a highly skilled and highly responsive team. Typically, they are able to give immediate outline decisions and generally complete transactions within five working days.

The Buzz ‘The big buzz is putting funds in place quickly, so that clients can grasp opportunities or avert pressure from challenging business or personal situations.’ says Baguley Decisions about quite substantial transactions are made over the telephone in the course of the initial conversation. Then it’s all down to hard work, usually against the clock.

Making use of bridging finance generally costs more than conventional borrowing. The twin differentials of quick completion and a short-term period tend to make this specialised form of lending more expensive to administer and, of course, there is a higher element of risk attached for the lender.

‘The offer should be made simply because there is a sufficiently satisfactory business argument.’ Business people in a hurry or on a mission are seeking a short term expedient. They accept that the advantage they’ll gain from the advance will certainly outweigh the costs involved and normally replace the bridging funds with conventional secured borrowing well within the agreed duration of the bridging facility. This is a sophisticated service and our clients have professional advisors. They are well aware of the cost implications. It is an absolute pre-requisite of doing business that everyone understands these ground rules. Transparency and clarity, particularly on the subject of interest rates, have replaced a certain amount of unwarranted opportunism that existed on some fringes of the sector

before. That’s how BFL have been able to make such a conspicuous a breakthrough in the short-term finance market. Urgency is sometimes a factor in business dealings. The offer should be made simply because there is a sufficiently satisfactory business argument. For example, BFL provided £2.2 million of short term funding to a company called NGR, so that it could quickly purchase a site in Leeds that had become available. Director Chris Thomson felt it was an opportunity too good to miss, and he was delighted when the whole transaction was completed in just 3 working days. He said: “The whole process was co-ordinated by Bridging Finance Ltd, who drew upon their excellent relationships with solicitors and surveyors to ensure that the process went smoothly and all deadlines were met.” There was no arm-twisting, no brinkmanship and no rate negotiations. In my view, that spells a clear, bright future for bridging finance.

Chris Baguley is Managing Director of Bridging Finance Limited. www.bridgingfinance.co.uk

Business Matters issue 164 • 53

BM164_47:Layout 1

5/9/08

08:51

Page 1

BM164_55_56:Layout 1

5/9/08

02:31

Page 1

Advice

Thanks for the memory Peter Clark looks at carrying data in our pockets emory sticks, thumb drives, universal flash drives — call them what you want, the chances are you have bought, or been given, one of these in the last year or so. According to our survey on businesstraveller.com, 86 per cent of you now use some sort of USB storage device to carry and transfer data, and with worldwide sales set to top 100 million this year, not having a memory stick will soon be akin to living in the dark ages. Simple to use (but also simple to lose), USB flash drives have revolutionised the way we carry around information. A fraction of the size of a floppy disk (remember them?), even the smallest 32MB capacity drives will hold many times the data previously possible, and with several companies set to launch 16GB drives — that's 16,000MB — later this year, it will soon be possible to hold pretty much everything from your PC hard drive on a stick small enough to carry on a keychain.

Compatability Compatibility isn't an issue either, with most memory sticks working on both PCs and Macs, and while all new drives are made with USB 2.0 technology, they will still work on older computers with USB 1.1 drives, albeit at a slower rate. The huge growth in popularity of flash drives has led to prices plummeting by as much as 50 per cent in the first half of this year alone; a 1GB stick can now be picked up for as little as £25. This has obvious advantages for the consumer, but the

cheaper something becomes, the less care the owner will take of it. This is fine if all you have stored on your memory stick is the latest Norah Jones album and some holiday snaps, but a different story entirely if you are carrying around the details of a million pound contract in your pocket.

Protection Matt Fisher, spokesman for Centennial Software, which provides software to protect companies against loss or theft or information on PCs and flash drives, says: "The problem is that when someone buys a laptop for £1,000, they will happily pay another £200 to put software onto it to protect the data. In contrast, when they buy a £20 memory stick they view it as disposable, without any consideration for the value of the data they have stored on it." Centennial has carried out research revealing that over two thirds of people who use a memory stick have also lost one, and of those drives lost, 60 per cent had critical business information on them. As few of these sticks have software to encrypt the data stored on them, that means an awful lot of information out there that could potential fall into the wrong hands. "Over half of the European working population now has a removable storage device, be it an iPod, flash drive, PDA or smart phone," says Fisher. "Their use has become so prolific that there is very little companies can do to stop employees owning

them, so what we have done is look at the problem from a different angle. We say, 'fine, have an open door policy as far as allowing employees to own a flash drive, but also have software installed which will stop personally owned devices connecting to your corporate network.'" Centennial has developed "Devicewall",

Over half of the European working population now has a removable storage device software which intercepts Windows' "plug and play" service (the software which enables your PC to recognise and run your MP3 player or memory stick when you plug it in), and finds out whether the device has the correct privileges to be allowed to connect with the PC. The latest version of the product can also force encryption onto a flash drive, meaning that even if an authorised device gets lost or stolen it will be rendered useless. This encryption can take the form of a global key, meaning that the data on the drive can only be accessed by any PC within the company network, or a personal key, meaning that the operator would also need to know a password to operate the stick. Early adopters of this type of software have included financial and banking centres, government institutions such as the NHS where patient confidentiality is essential, and smaller firms such as architects and

Business Matters issue 164 • 55

BM164_55_56:Layout 1

5/9/08

02:31

Page 2

Advice electronic design companies, which live or die by the strength of their intellectual property.

Passwords For those not wanting to splash out on a software solution, there are many memory sticks out there with in-built protection, as Gerald Greig, product manager for technology provider Integral, explains: "The basic way to protect the information on a flash drive is with a password (typically up to 16 characters) which works in the same way as, say, protecting a document within Word. We try to make the security functions as simple as possible for the user, as the last thing we want is people jamming our support line because they can't access their memory stick." Flash drives with biometric protection are also available, although Integral has until now baulked at offering one due to the temperamental nature of the technology. Says Greig: "The problem with biometric protection is that it only takes a small amount of dirt or a bit of water on the scanner, and it won't work when the user comes to activate the stick. In this instance the drive has to be returned to the manufacturer in order to recover the data. We are looking at new technology to overcome this, and hope to have an improved biometric drive out later this year." Greig say that the current "sweet spot" for USB flash drives (the point where sufficient capacity and greatest value for money coincide) is around the 1GB mark, giving consumers enough space to store music, pictures and documents, all for around £15. Capacity has risen so quickly that some companies are stopping production of sticks holding 128MB and below, as they are simply no longer cost-effective. He also points out that there are alternatives to USB flash drives — portable hard disk drives (HDD) remain popular due to their higher capacities — but the sturdy nature of memory sticks has helped the growth in their popularity. "The only problem with HDD is that they are more fragile than memory sticks," says Greig. "They have moving parts that can be damaged when dropped, whereas flash drives are solid state and so much more hard-wearing. However, there is only so much memory we can currently fit into a memory stick, so above 16GB, HDD remains a viable choice." The flexibility of flash drives as a marketing tool has been duly noted as well, with

56 • issue 164 Business Matters

companies eager to offer preloaded sticks both to consumers and employees. Integral provides a service whereby it will load branded memory sticks with a Powerpoint presentation or slideshow, with the added bonus that the user does not have to have the specific application on their PC in order for the file to run (although they will not be able to edit or save the file).

The flexibility of flash drives as a marketing tool has been duly noted The educational and entertainment sectors are also looking closely at the technology, with everything from GCSE chemistry to the latest blockbuster soon to be available on a flash drive, providing copyright issues can be overcome. Greig points out that drives can be configured so that while their content can be downloaded onto a PC, it will only be accessible if the drive is plugged into the USB port, preventing users from forwarding the data to friends and colleagues. So with such a rapid growth in popularity, where next for memory sticks? U3, a joint venture between Sandisk and M-Systems (which provides USB flash drives for the likes of Memorex, Kingston and Verbatim) has developed technology which allows users to carry and run applications from their flash drives. Nathan Gold, senior director of partner development for U3, says: "Until now, most people have been using memory sticks to drag, carry and drop files. But with U3 software it is possible to run Skype,

Powerpoint and anti-virus applications directly from your flash drive. They don't actually take up much space — the average application uses under 10MB of memory, so a 512Mb stick can easily carry several applications along with your files."

Next Step Everything from your favourite internet browser, to password managers (enabling the dozens of online accounts we seem to accumulate everyday to be launched with one master password) can now be run via a U3 smart drive. Gold envisages a world in the not too distant future, where consumers will be able to install all of their applications onto their flash drives, enabling them to work on any computer they choose. Effectively this would lead to the hard drive of their PC being used simply as a back-up (files and applications could also be stored on an FTP site for extra security) — in other words, the opposite to what is currently the case. "Mobile phones will also become important platforms moving forward," adds Gold. "As their capacities increase there's no reason why applications couldn't be stored on the phone, and launched via Bluetooth or USB lead directly onto PCs." Whatever form USB flash drives end up taking, there is no doubt they have quickly established themselves as a user-friendly, convenient method of storing files on the move. Providing companies take note of their limitations and introduce measures to safeguard their data accordingly, there's no reason why these little sticks won't become as essential a piece of equipment as your laptop or Blackberry.

BM164_057.qxd:Layout 1

1/9/08

01:14

Page 1

BM164_58_59:Layout 1

5/9/08

02:32

Page 1

Advice

Real computing

Power

With Windows Vista here demanding our PC’s run at speeds previously unheard of, we look at five of the best computers on the market at the moment. Does the new OS make these machines better than their XP predecessors? Yes. Does Vista make it any easier to make a purchasing decision? Absolutely not -- if anything, it's even more difficult. Mark Prigg investigates...

Dell XPS 420

HP Pavillion m9000

£549 - £1,349 dell.com

£840 hp.com

You know what to expect when you buy an XPS: good looks, high performance, and a substantially lighter wallet. Dell's latest effort, the XPS 420, delivers all these things and should appeal to anyone with a desire to edit video and images, and play games. It features an integrated SideShow display, a BTX chassis and an Xcelerator2 hardware transcoder. The XPS 420 is attractive by desktop PC standards. The glossy front panel and silver side panels are attractive in their own right, but we personally think Dell should have chosen one colour or the other -- not both. At the top of the case you'll find a rubberised strip, designed to accommodate an external hard drive, MP3 player, or any of the miscellaneous shrapnel that normally ends up at the top of your PC. This is lined with non-slip rubber and is slightly recessed so most things stay put. The XPS 420 is designed to handle media, so it's no surprise to learn it can accommodate some high-end components. Various CPU options are available, all of which are stonkingly quick. The Premium Chassis, which sports the Dell MiniView screen, comes with either a 2.4GHz Intel Core 2 Quad Q6600, or for an extra £60 you can have a 3GHz Core 2 Duo E6850.

PROS: Very powerful high specification machine CONS: A pretty costly option

58 • issue 164 Business Matters

The Pavilion Elite m9000 series is designed to be a good all-rounder, delivering 'outstanding entertainment and top performance' to all and sundry. Not much forethought has gone into the basic shape of the m9000 series -- it looks like every other PC that came before it. Get a little closer though, and you'll likely be swayed by the modern piano black finish and the abundance of extra bits, bobs and flapdoodles to fiddle with. The most interesting additions include the top-mounted power button. This is far easier to reach than front-facing switches, particularly when the PC lives under a desk. The top of the chassis is rubberised to make it less slippery, so external hard drives and cups of coffee don't accidentally slide off. The front panel of the m9000 has a few clever tricks, too. Firstly the 15-in-1 memory card reader sits near the top, making it easy to access without getting on your hands and knees. Then all flap hell breaks loose: There's a flap concealing the optical drive, a flap concealing the USB and front-facing audio ports, and flaps for hiding 2.5-inch and 3.5-inch HP removable Media Drives. Finally, there's an HP Backup button, which launches software for making copies of your most precious files.Thankfully, that's not protected by a flap. Overall, it's a well-balanced specification but there are a couple of oddities. Firstly, HP provided 3GB of RAM, not 2GB or 4GB as is more common. This is supplied across two 1GB DIMMs and two 512MB DIMMs, so all four memory slots on the Intel G33 express-based motherboard are occupied. Upgrading memory in the future will involve throwing some of the existing RAM in the dustbin. PROS: Good solid tower PC CONS: Not a cost-effective process to upgrade the RAM

BM164_58_59:Layout 1

5/9/08

02:35

Page 2

Advice

Apple mac iMac 24” £1,149 apple.com We tested the fastest-available, 2.8GHz version with the optional 750GB hard disk, which added about another £100 to the price tag, bringing the total cost of our configuration to £1,559. For more on the design, features, and service and support of the fourth-generation iMac, check out our in-depth review of the 20-inch, 2.4GHz iMac. When we tested the 20-inch, 2.4GHz iMac, we came away impressed by its application performance, with it more than holding its own against competing Windows-based, mainstream desktops. The same can easily be said for the 24-inch, 2.8GHz iMac. With its faster processor, the 24-inch, 2.8GHz iMac is expectedly faster than the 20-inch, 2.4GHz iMac on all of our application benchmarks - as well as many similarly priced Windows machines. Of particular note is the 2.8GHz iMac's performance on our multimedia multitasking test -- perhaps our most punishing benchmark. The test performs simultaneous video and audio encoding, which typically taxes the resources of most systems. The 24-inch, 2.8GHz iMac's best-of-class performance on this test is an excellent indicator of the iMac's potential for tackling processor-intensive applications and juggling the demands of multiple applications concurrently vying for system resources. Serious multitaskers and some prosumers can definitely gain additional screen area to support more open applications on the desktop, and the modest performance bump can make a difference during longer video or audio renders. Perhaps the ideal user is someone who needs as much processing power as possible from a Mac but can't justify the much costlier Mac Pro.

Lenovo ThinkCentre A61e £320 lenovo.com he Lenovo ThinkCentre A61e is said to be one of the most energy-efficient PCs in the world. It is Energy Star 4.0 compliant, EPEAT Gold rated and has the same carbon footprint as a small daffodil. Well, possibly. For around £320, it's intended for businesses that want to lower their energy costs, or for energy-conscious users who want to be kinder to the environment. Some eco-friendly products just don't look right. It's funny then, that Lenovo -- creators of some of the ugliest PCs in the world -- should design its own energy-efficient desktop. The ThinkCentre A61e never stood a chance on the looks front! Most small form factor PCs (SFF) we've seen look great, and so should the A61e, in theory. It's lightweight, has the same approximate dimensions as a phonebook and can be positioned in either landscape or portrait orientation. Unfortunately, the ubiquitous IBM styling -- read: tacky black plastic and garish colour highlights -- will appeal to relatively few. It's pretty functional on the inside, too. The case allows tool-free access so memory can be added or removed within a matter of seconds. But that's all. The A61e has no room for expansion -- not even a spare SATA port. Once you've bought it, you can only add things via USB.

PROS: Cheap & green CONS: Not upgradeable

PROS: Very stylish,very fast & virus free CONS: Will not be 100% compatible

HP dx5150 £387 HP.com The dx5150 Small Form Factor is aggressively targeted at those on a tight budget. However, unlike the plethora of cheap, ugly desktops that litter the budget market, it stands out thanks to its promise of contemporary styling, solid build quality and quiet, efficient operation. Producing a computer that achieves these goals is a thankless, difficult task, so it'll be interesting to see whether HP achieves its goals without delivering a fatally compromised and ultimately pointless PC. Design wise the dx5150 is a welcome throwback to the desktop PCs of yesteryear. It uses a horizontal 'desktop' orientation instead of the more typical space saving tower layout, but it's far from bulky. Unlike HP's 'ultra compact' version of the dx5150, this Small Form Factor

(SFF) version has the same approximate footprint as the screen area of a standard 17-inch TFT monitor. There's very little in the way of input/output connectivity at the front, aside from the obligatory pair of USB ports and a couple of headphone and mic jacks. There's a decent range of I/O ports at the rear, but it's hard not to notice the lack of luxuries such as a memory card reader or even a floppy disk drive. Given the dx5150's low price, it's no surprise to learn it's not stuffed to the gills with modern hardware. Our sample uses an Athlon 64 3200+ processor, which in fairness is still a fairly potent solution that will let you carry out pretty much any PC-based task at a decent speed. It's not the sort of processor you'll want to brag about to your technophile friends, who'll probably disown you for admitting the PC only has 512MB of DDR memory. Fortunately, this can be upgraded (to a maximum of 4GB), as can the CPU, which can go as high as an Athlon 64 4000+. PROS: Very good solid HP office machine CONS: Could struggle with really demanding tasks

Business Matters issue 164 • 59

BM164_60_61:Layout 1

5/9/08

09:05

Page 1

Legal

Money Laundering: A warning for recruiters! Gareth Kervin, Looks at parts of The Money Laundering Act that you might now know about...

t is common knowledge that The Money Laundering Regulations 2007 came into force on the 15 December 2007. But do you know how they will affect your business or how to comply with the regulations? The Regulations extend the scope of the money laundering legislation to encompass a wider spectrum of businesses, including recruitment businesses. The regulations will mean that businesses may face potential criminal liabilities for non-compliance. "Trust or Company Service Providers" ("TCSPs") are now specifically included in the Regulations as a relevant business. A TCSP can include any firm or sole practitioner who are "acting or arranging for another person to act" as a director or secretary of a company or as a partner of a partnership or a similar legal position. HM Revenue & Customs' (HMRC) guidance specifically include recruitment agents and management agencies, involved with the appointment of directors, shadow directors or company secretaries, under the definition. In addition, recruitment businesses that provide payroll services could be caught under the definition of an "Accountancy Service Provider" (under which "Payroll Agents" are specifically referred to in HMRC Guidance) or "High Value

60 • issue 164 Business Matters

Dealer" if the agency is receiving high value payments to fund payments to the employee or to pay tax or NICs on the client's behalf.

Requirements As a direct result of the Regulations certain recruitment businesses will be required to be supervised by HMRC. This will involve: • being registered with HMRC before the 1 April 2008. • paying an annual fee based on the number of business premises. • an ongoing reporting obligation. • implemention comprehensive anti-money laundering systembs (to prevent and report). • appointing a money laundering reporting officer and to apply for a "fit and proper test". Regulation 18 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 ("CEAEB") already provides that the identity of hirer/employer must be verified prior to introduction of a work seeker and under regulation 19 the identity of the work seeker should be obtained. The Regulations extend this requirement by placing an obligation on the agency or business to ensure the hirer/employer is not in severe financial difficulties or engaged in immoral legal

practices. Furthermore, the Regulations will impose more severe criminal responsibility upon the specific individuals who fail to comply with its strict requirements. Such criminal liability may include imprisonment. The CEAEB already impose criminal liability upon businesses for certain and specific offences including charging fees to workers, failure to secure the proper conduct of an employment business, making false records or failure to comply with a prohibition order. Any person found guilty of these offences is liable on summary conviction to a fine up to £5,000 for each offence.

Prevent misuse The Government's intention in extending the money laundering provisions is to prevent the misuse of corporate entities. It is hoped that the monitoring of TCSPs so tightly will ensure those running such businesses are fit and proper and avoid improper use. Whatever the intention, it is clear that the impact on recruitment agencies and employment businesses will be significant. To contact Gareth, please email: gkervin@kingsleynapley.co.uk or call 020 7814 1200

BM164_60_61:Layout 1

5/9/08

02:36

Page 2

Legal

No need for alarm with new fire regulations S

ince October 2006, a new fire safety regime has been in place in England and Wales, replacing the previous legislation which required some properties to have fire certificates. Fire certificates are no longer valid. Those with obligations under the new regime must decide for themselves, through a selfassessment process, what the fire risks at their premises are and what measures they must take to minimise those risks. Although the new regime has been in force for 18 months, many businesses have not got to grips with their fire safety obligations.

The law The new regime is wider in scope than the old fire certificate regime - it applies to all nondomestic premises, including external paths and driveways. (Fire certificates only tended to apply to certain premises, such as hotels, factories, offices and shops.) The duty to comply with the new regime is placed, primarily, on the “responsible person”, which will usually be the employer. Where there is no employer, the responsible person will be the person who has control of the premises for the purpose of a trade, business, or undertaking. If the premises are empty, the responsible person will be the owner. There is a second category of person with obligations under the new regime; this is only likely to apply to businesses that, for example, maintain fire safety equipment or maintain or repair premises on behalf of others. It is possible that one property

Oliver Ennis looks at the fire safety rules and regulations to ensure that you do not fall foul of the law. could have more than one person with duties under the legislation. This is most likely to be the case in commercial properties with more than one tenant. Where this is the case, all those with duties must co-operate with each other. The main duties are: • to take general fire safety precautions; • to carry out a risk assessment and to keep this under review; and • to provide information and safety training to employees. The duties under the new regime are owed to those lawfully on the premises and those at risk from a fire on the premises. Failure to comply with the new regime is a criminal offence.

NEWS • ADVICE • INTERVIEWS • KNOWLEDGE

Subscribe to

Conclusion SMEs must carry out a risk assessment, implement its findings and keep it under review. The Department for Communities and Local Government’s web site contains useful property-specific guidance on carrying out risk assessments and general fire safety precautions. Following the recent publication of new Government guidance on enforcement, local fire authorities may well start to look more closely at compliance, so SMEs be warned! For further information, Oliver can be contacted at: 01603 693214 and oliver.ennis@mills-reeve.com

Business Matters

T O D AY log on to:

bmmagazine.co.uk Offer is limited to new subscribers & qualifying companies and for a limited period. Subject to availability. Please allow upto 28 days for delivery of first edition.

Business Matters issue 164 • 61

BM164_62_63:Layout 1

5/9/08

02:29

Page 1

Perks

Reviewed: Hix Oyster & Chop House perry jelly and elderflower ice-cream is so flawless, it resembles a lens. You could use it as a kind of wobbly magnifying glass. The other thing that wakes us is the crash of glass at the top of the stairs leading from the kitchen. They've got a new Olympic sport here: climbing with a massive tray of hot pies and then having to navigate a tricky right-hand bend with a pillar threatening to take you out. It's entertaining, but go soon or the excellent staff will have it sussed. Three weeks later, having digested that meal, I go back. This strategy has risks: you can't fault further research, but which side to come down on if the experience is totally different from the first visit? Hix Oyster & Chop House is decked out with plain quality: wooden surfaces, clean tiling, copper pans and starched whites. Mark Hix's first eponymous restaurant is straight-talking, reflecting his passion for quality English fare treated with care but not fuss. Menu entries list dishes with a maximum of three ingredients, and there is no need for decoding. When it says the broad beans are "crushed", that's what they are just smacked on the head, not puréed or delivered in a pipette. Nine of the 16 main courses are beef, with seven different cuts, spread between Dexter and Aberdeen Angus.

Enjoying There are some foods I am just not prepared to dislike. Parsnip slips past my guard now and then, but olives gave way relatively easily after a force-feeding regime, and I was relieved, about five years ago, and after detailed research into the workings of my gag reflex, to start properly enjoying oysters. Any food that can automatically change sex during its lifetime has to be eaten. I like oysters creamy, and decide on a couple as a pre-starter starter. Our waiter accurately predicts that I will like the Cumbrae and Maldon. Like all the bits of advice and knowledge he has, such as how Hix cures his salmon in his back garden, it is delivered with the perfect level of smarminess and ceremony, ie none. A hot miniature sourdough loaf arrives,

62 • issue 164 Business Matters

then the oysters and a bowl of peas in the pod - another pre-starter nibble we somehow thought would be a good idea. Oysters full and creamy; peas in generous quantities, so you could abandon the inevitable duds. We start with Hix's own smoked salmon cure and the red mullet with crushed broad beans on toasted sourdough. The salmon, blood orange-deep in colour, is boldly smoked, but that fire doesn't hang around in your face. It just melts away with the flesh. There's a dryness to the crushed broad beans, which make a slightly claggy combination with the sourdough and mullet, but it's tasty. As soon as the beef flank and oyster pie comes, I realise I am heading for metabolic disaster. I have never had this dish, but what with my recent bivalve excitement, it just seems the right thing to do and the right place to do it. To my horror, I learn that I don't really like cooked oysters, despite the dark, grainy loveliness of the beef in its gelatinous gravy and shortcrust pastry, which is suety but not leaden.

Amazing I can just remember two things before slipping into a food coma: 1) the chips were a really good size (not pencils, not bricks) and 2) the whole John Dory with rosemary was good enough to make my girlfriend loosen her evangelical grip on Anthony Bourdain's "no fish on Monday" rule. Bursts of sharpness and perfume bring me round like smelling salts. The jelly in the

a tough job! Never mind - I have to test a main course I would ordinarily love. In this case it is the hanger steak (not a common cut, but it has great livery flavour) with baked bone marrow, chips and salad. From the charring to the bleeding heart, it is superb, and the marrow - a bone halved lengthwise and topped with breadcrumbs, parsley and garlic - is a royal treat. Only a main course this time, with chips and salad, but I still can't quite finish it. That hanger steak costs £13.75; the porterhouse for two costs £54.50; starters from £5.50 to £12; nibbles around £3. An oyster: £1.95. Working-class food at middleclass prices, you could jibe. But it's the ingredients that count, and times change disease, rarity and desirability all turned the oyster into a fine food in the 19th century, rather than something to bulk up a pie when you ran out of beef. As for the cooking, Hix's food is definitely working, and it's class.

Score 8/10 Telephone 020-7017 1930 Address 35-37 Greenhill Rents, Cowcross Street, London EC1 Open All week, lunch noon-3pm (except Saturday, when it's closed for lunch); dinner, 6.11pm (currently closed for dinner on Sundays, but open from September 7)

BM164_62_63:Layout 1

5/9/08

02:30

Page 2

Motoring

Under the bonnet: Mercedes C Class

Dean Woodward, Contract Services Manager, DaimlerChrysler Fleet Management puts the Mercedes C Class through it’s paces

WHAT IS IT? The latest generation of the Mercedes-Benz C-Class is probably the most aspirational compact executive saloon on the market. This vehicle will not disappoint you.

are more subtle than the Sport variant, which hosts a prominent threepointed star (previously only featured on the C-Class Sports Coupe). More pronounced wheel arches make the C-Class looks like a baby SClass from the side.

SIGNIFICANT OTHERS ARE: • BMW 3 Series • Audi A4 • Lexus IS

INTERIOR The interior has the quality feel you would expect, with sound, logical instrumentation where it’s easy to set your preferences without assistance from a gadget-savvy 10 year old. Taller drivers may feel a little cocooned in the cockpit but a panoramic roof option gives a sense of light and space. It also looks great with the Calcite White exterior colour.

MODELS AND ENGINES COMPRISE OF: Models: Elegance, SE and Sport Engines: 1.8, 2.5v6 , 3.0v6 & 3.5v6 petrol and 2.0l 2.2l 3.0v6 Diesel VEHICLE APPRAISAL STYLING The C-Class comes alive, with a shape that has real road presence and a stature that is more substantial. The twin headlamps are gone, replaced by sleek oblong eyes and a wide retro grill, which is probably the most striking feature on the vehicle! The grills on the SE and Elegance

HANDLING/ PERFORMANCE Watch out 3-Series, the C-Class has got true spirit. The drive is invigorating, surprisingly light on its toes and precise in the corners. A great blend of sportiness, comfort and quality rolled into a compact saloon. SUMMARY The best C-Class to date. The Sport variant looks the business. Colours that complement are black, silver and, making a come-back, white.

Business Matters issue 164 • 63

BM164_64_65:Layout 1

5/9/08

02:28

Page 1

Books

The business

b o o shelf bookk shelf The Writing on the Wall

Seduced by Success Bill Gates once said, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose”. Successful individuals and organizations often feel that they are entitled to continual success in the future. As a result, they risk becoming complacent, comfortable, and mediocre. Instead, they should continue searching for fresh approaches to improve products and services, and focus on staying lean and agile. In Seduced by Success, author Robert J. Herbold demonstrates how successful companies can lose their way as the world changes and as they become complacent about building on their best business practices. He uses instructive case studies to show how certain top companies were seduced by their success, and he provides insight as to how to put success into perspective by outlining nine traps every organization must avoid.

64 • issue 164 Business Matters

Wall, In The Writing on the Wall, Will Hutton traces the his-istoric development ofof China’s economy from the e Imperial Dynasties to thee current “socialist market” economy. The question of whether China can become a great economic power without democracy and genuine capital- m is ism is examined. Hutton also ponders whether the West, particularly the U.S., will be wise enough to continue its free market policies with China. China can dominate the twenty first century if it embraces the economic and political pluralism of the West. This pluralism is defined to include the rule of law, independent legal institutions, a free press, independent scientific research, and representative government. China currently lacks these ideals and institutions, which will make the country’s current economic and political models unsustainable. Hutton argues it is imperative for the West to continue to engage China in international trade and idea exchange and believes the world’s future specifically hangs on whether China and the U.S. can resist the temptations of rivalry and find constructive ways to conduct business with each other.

BM164_64_65:Layout 1

5/9/08

02:24

Page 2

Books

My Way - Duncan Bannatyne

Getting things done With first-chapter allusions too martial arts, "flow", "mind like water", and other concepts borrowed from the East, you'd almost think this selfhelper from David Allen should have been called Zen and the Art of Schedule Maintenance. ngs Not quite. Yes, Getting Things

At 30, Duncan Bannatyne had no money and was enjoying life on the beaches of Jersey. He saw a story of someone who had made himself a millionaire, and decided to do the same. Five years later he had done it, and now he is worth 168 million. In this remarkable book, Bannatyne relives his colourful path to riches, from ice cream salesman to multi-millionaire, explaining how anyone could take the same route as he did - if they really want to. Hugely articulate, and with numerous fascinating and revealing stories to tell, this is an autobiography and a business book unlike any other - but then Bannatyne isn't like any other businessman

Done offers a complete system for downloading all those free-floating gotta-dos clogging your brain into a sophisticated framework of files and action lists--all purportedly to free your mind to focus on whatever you're working on. However, it still operates from the decidedly Western notion that if we could just get really, really organised, we could turn ourselves into 24/7 productivity machines. Thank goodness this is captured on a straightforward, one-page flowchart that you can pin over your desk.

Start your Business Week by Week ‘Start Your Business Week by Week" is written in such a clear and friendly way that you can't help being drawn into the excitement of becoming an entrepreneur. Breaking down the process into weekly steps makes it suddenly seem more achievable, and I'm sure many more people will be encouraged to turn their ideas into their own businesses as a result." Tony Blair "I wish I'd had this when I started the gadget shop." Jonathan Elviidge, founder of The Gadget Shop Setting up a new business is a daunting task, 400,000 in the UK do it every year , yet millions more are put off before they ever begin to trade. Once you've done it, it seems actually quite straightforward. But knowing where to start and what to do is impossible, there is a mountain to climb and you are lost at the bottom. Not any more. Each week for six months this book will tell you what you should be doing. Split into weekly sections that include explanations of the weeks' requirements, a checklist, useful contact information, a glossary, a case study of an entrepreneur, and suggestions for further reading material This book will take you through the whole process from brainstorming and refining your business ideas, registering your company, opening a bank account to finding your first customer and keeping records. This book will ensure you know what you should be doing and when, it's like having a super-efficient project manager by your side as you tackle one of the biggest

projects of your life. This book is written by an entrepreneur for entrepreneurs. Everything inside is tried and tested reality, not academic theory. This is your moment. And this is the book to show you how. "Steve Parks is probably the best person I know to advise you on starting your own business. He has interviewed most of the best entrepreneurs alive today and also set up his own successful business. This is a practical real-life guide that can be your ‘virtual’ mentor as you start up your business." John Barnes, serial entrepreneur behind Harry Ramsden’s Fish and Chips, La Tasca tapas restaurants, and many other businesses Steve Parks began his career as a journalist and presenter for BBC Radio. His work has been broadcast on Radio 4, Radio 5-Live, Radio 1, Radio 2, BBC TV and the ‘Today’ programme. He left the BBC to form his own company, initially to continue producing programmes for BBC Network Radio, but the company then evolved and grew intoRed Audio, the UK’s leading publisher of business audio.

Business Matters issue 164 • 65

BM164_66Q7.qxd:Layout 1

31/8/08

22:10

Page 1

Getting to know you...

Damian McKinney We talk to the CEO and founder of McKinney Rogers, the global business performance consultancy that works in partnership with clients to turn business strategy into action. a courageous pioneer who carried the future hopes of his fellow man. His unforgettable quote from the moment he touched the moon's surface: ‘That's one small step for man; one giant leap for mankind’, lives on in the minds of many, both young and old. When Kennedy first suggested going to the moon, so many people said it couldn’t be done and used every setback the mission experienced as evidence of just that. In the end, it wasn’t technology that enabled man to land on the moon, it was belief and it was Armstrong’s great leadership.

What do you currently do? I am the CEO and founder of McKinney Rogers. We specialise in helping our clients execute their strategy to its full potential. I have an overriding passion for helping people to ‘win’ which translates seamlessly into my work life. We help clients win by increasing their business performance and building a platform for sustainable growth. My interests range from client organisation missions to working with less fortunate young people, particularly in East Africa, encouraging their abilities to prepare them to become the next generation of entrepreneurs.

Who is your inspiration in business? I would have to say Virgin Group founder, Richard Branson, is a true business inspiration. He is a corporate maverick, starting with the Virgin record mail order business in 1970 and expanding it into the global empire as we know it today. Not content with being just a strategist, Branson follows through with concrete actions. From him I have learned that if you truly believe in something, be it a business venture or anything in life, you really go for it.

Whom do you admire? There are quite a few people I admire, but to name one, I would have to say astronaut Neil Armstrong. Like Branson, Armstrong is also a maverick;

66 • issue 164 Business Matters

Looking back are there things that you would have done differently? Absolutely, it’s easy to look back at your life with the clarity of hindsight and think you could have done things differently. My view is that business is about moving forward and accepting challenges and hurdles and then finding a path through them with passion and determination in order to look back with conviction that you did the best you were capable of at that juncture.

What defines your way of business? Bringing my experience as an officer in the Royal Marines to bear in the corporate environment, I still take the commando spirit with me wherever I go It’s also very much a part of McKinney Rogers’ corporate DNA. It was suggested that I diversify our company culture by toning down our commando spirit ethos. I did consider this, until another client said they would drop us if we lost this most unique aspect of the McKinney Rogers. I regret actually considering it because I am a firm believer in the benefits the commando spirit brings, for our clients and for the company. Today, it is one of the things our clients appreciate most about us. It defines who we are and the way we work as a team with 1) courage and determination, 2) cheerfulness in the face of adversity, 3) humility and humour and 4) meritocracy.

What would you say to businesses who are worried about tough times ahead? I would offer three pieces of advice. Firstly, believe. Instil a sense of confidence and belief in your business and it becomes a self-fulfilling prophecy. Treat economic uncertainty as a storm you can easily weather and an opportunity to become even more successful and competitive. If you take a defensive position then you will always be going backwards. If you take an offensive outlook, you can break out of any situation and have the potential to reap rewards. Secondly, have a clear vision of exactly what you want to achieve and be confident enough to put numbers to it, as well as a timeline. It seems a little obvious to say, but this is where many young businesses fall short. Stick to that timeline because it’s the fastest way to achieve year-on-year growth. In addition to unwaveringly high standards, make sure you have something unique about your business, whether it is the actual product offering or the way in which you run the business. This is absolutely vital to enable potential clients to distinguish you from your competitors and in turn, grow into profitable and loyal client base.

What advice would you give to someone looking to start up today? Don’t let yourself become ‘lonely at the top’. It is easy to fall into this trap, particularly if you feel that you have few people to whom you can turn for advice and support. My own solution was to join the chief executives’ organisation Vistage International, which has nearly 700 members around the UK (see page 31.) Other group members are fellow bosses from noncompeting sectors, and we meet monthly to act as one another’s non-executive directors. I have thrashed out lots of ideas this way, and have been helped to make invaluable contacts, such as our new HR advisor. I encourage all my business friends to join. www.mckinneyrogers.com

Still paying high agency fees and advertising costs in advance of filling your position?

001077_umbrella fp BusMatters.ad:Layout 1

16/7/08

09:25

Page 1

It’s rough out there, but we can get through it together. e3 can help protect your profits when things are against you. Our innovative and enlightened energy efficiency measures can help your business with some serious savings. Join npower business for gas and electricity and we’ll be happy to share our industry leading knowledge. Your business could save up to £1,000* in the first year and you can start saving from day one, with very little effort. Because you’ll reduce your carbon footprint too, you’ll contribute to a calmer brighter future! Head for shelter now, call †

0845 072 3091 or visit

quoting AI093

npower.com/e3

† Calls may be monitored and/or recorded for security, quality or training purposes. Calls from BT landlines to 0845 numbers will be charged up to 4p per minute. A call set up charge of 5p applies. The price of calls may vary with other operators. Please check with your operator for exact charges. Correct as of May 2008.* The Carbon Trust states that most businesses could quickly cut their energy bills by 10% without any capital investment and, with a little investment, savings of 20% are realistic (Source : www.carbontrust.co.uk April 2008). In monetary terms, this equates to a saving of approximately £1,000 per annum, based on an electricity consumption of 33,000 kWh per annum and an average pence per unit of 15p (including the standing charge). npower is a registered trademark and the trading name of Npower Direct Limited (registered in England and Wales No. 3782443) and npower Commercial Gas Limited (registered in England and Wales No. 3768856) and associated companies. Registered Office: Windmill Hill Business Park, Whitehall Way, Swindon, SN5 6PB.