Issue 5 – January 2015
Business growth and plans for 2015 With the economic climate continuing to present challenges, how will your business fare in the new year?
Health and safety
Disciplinary advice
page 2
page 3
£ Policy news page 6
Looking forward to 2015 page 7
Now that the festive season is behind us, and with a general election just around the corner, this issue focuses on planning for 2015. The business climate continues to be difficult, and smaller businesses remain challenged by regulation, access to finance and poor payment practices. Our focus as always is on helping you overcome the obstacles your business faces, and lobbying to help alleviate them. Our new year business resolutions might give you some fresh ideas for the year ahead, while the results of the last survey make interesting reading in the run up to the general election.
Having your say...
Disciplining staff: getting it right Page 3
New year business resolutions Pages 4–5
Giving us your views means we can lobby effectively on your behalf and also helps us to develop the products and services your business needs. Enclosed is our quarterly ballot for members which this quarter focuses on our latest campaign – business ethics. Complete the survey and return it in the envelope provided or complete it online at www.fpb. org/referendum211 by 16th February.
Forum of PrivateBusiness
Remember we’re here to help and advise you whatever your business challenges. Call us on 0845 130 1722
Visit fpb.org
Health and safety legislation With health and safety breaches regularly hitting the headlines, is it any wonder that many small business owners still think that there is too much legislation and that keeping abreast of the latest law changes and potential risks can be a costly and time consuming process? The fact our recent Cost of Compliance survey revealed that health and safety remains the third most significant compliance cost for our members seems to confirm that most companies take the risks and fear of litigation extremely seriously. In many ways this obsession with risk has not been helped by some of the common health and safety myths that have crept into modern day business folklore, some ranging on the downright bizarre. What has emerged is that when it comes to health and safety, business owners actually over-estimate the amount of legislation and the amount of work involved in keeping compliant. This is a situation the government has been all too keen to tackle, commissioning a number of reviews, including its Red Tape Challenge. The process has by no means been straightforward and was also extended to looking at over 50 Approved Codes of Practice (ACoPs) and other formal guidance to identify how it can be clarified and simplified. The response therefore has been to focus on steps to make the health and safety process more straightforward to understand and simpler to follow, but what remains clear is that this
is still a work in progress. Even after the review of some two hundred or so regulations, only a total of 13 were revoked (www.hse.gov.uk/legislation/repeals-revocations.htm). Some items were also identified as in need of clarification and amendment and while some changes have already been made (e.g. Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013) this process is still ongoing with more changes due in the next 12 months (e.g. Construction (Design and Management) Regulations 2015). However what has improved is the work of the Health & Safety Executive to ensure it provides up-to-date resources to assist business to understand their legal duties, dispel myths and provide invaluable tips to achieve compliance. There may be still some way to go, but the ongoing approach is to make sure that legislation is goal-setting rather than prescriptive. The focus is on those who create risk having to take responsibility for control and that the level of control should be practical and proportionate to the risk, an approach wholeheartedly supported by the Forum, with specific health and safety services offered as part of our membership.
Martin Mulholland is a principal consultant with MD Safety Management – a health and safety consultancy and trusted partner of the Forum of Private Business. We produce the Forum’s successful Health and Safety Guide as a way to assist members in understanding where gaps may exist in their health and safety management systems so a simple action plan to address them can be developed. MD Safety Management offers consultancy services to help SMEs achieve a sensible balance between health and safety legislative compliance and maintaining a competitive business.
2
The Forum of Private Business
Disciplinary issues: avoid the common mistakes Despite employee discipline being one of the most common employment issues, it continues to be one of the easiest to make mistakes with. Getting it wrong can have serious consequences, perhaps even resulting in claims for unfair dismissal. If you have a disciplinary issue, get it right first time; call us on 0845 130 1722. Not following a disciplinary procedure at all All employers should follow the Acas Code of Practice on disciplinary and grievance. You must have clear disciplinary and grievance procedures which should be issued to all employees. These can be included in the employee’s contract of employment or issued as separate documents. It is essential that your response to a disciplinary incident is ‘reasonable’ and takes into account any mitigating factors such as normal behaviour and length of service.
Not operating a system of warnings where appropriate As soon as a disciplinary incident occurs, you need to take action. In some cases the alleged incident may be so serious that it constitutes ‘gross misconduct’ and warrants dismissal without notice, for minor offences it is appropriate to issues a series of warnings.
Not warning your employee of the consequences of disciplinary action From the start, you must make it clear to your employee the possible outcome, so that they realise the severity of the case and plan to defend themselves accordingly.
Not setting out the nature of the accusations to the employee clearly in writing You should explain the alleged misconduct clearly in writing to the employee before starting the procedure. It is also essential that you refer back to this throughout the process to ensure that you are consistent. Even if new allegations come to light during the investigation stage these should be set aside while the initial allegation is investigated.
Not providing your employee with the relevant evidence against them You must provide the employee with all evidence against them, in advance of any disciplinary hearing. Ideally it should be provided along with the invitation to attend the hearing. It should be far enough in advance to allow your employee to review and prepare an adequate defence.
Not allowing an employee to be accompanied to a disciplinary hearing Employees have the right to be accompanied to a disciplinary hearing by a work colleague or a trade union representative. Failure to do this can result in you being found guilty of a breach of this right and for which the maximum compensation is two weeks’ pay.
Not keeping adequate records of the whole disciplinary process Given that disciplinary action can potentially lead to a tribunal, it’s vital that you create a proper paper trail of the process; details of the allegation, the investigation, documentation and the final outcome.
Not dealing with disciplinary issues in an appropriate time frame Most disciplinary cases should be dealt with within a matter of a few weeks. While more complicated cases will undoubtedly take longer, any unexpected delays will be frowned on by a tribunal.
Having the same person deal with the whole disciplinary process Ideally different people should carry out each phase (investigation, hearing and appeal), to ensure that this is as fair as possible, though in the case of a small company this may not be practical.
If in doubt seek advice! The Forum of Private Business can provide detailed advice and support on disciplinary procedures and other business issues. For further information, visit www.fpb.org or call 0845 130 1722. Visit fpb.org
3
New year business resolutions It may seem like a cliché but the new year, when everyone is typically rested and refreshed, can be a great time to review your business progress and set goals for the rest of the year. What does growth look like to you? Growth and success mean different things to different businesses. Your plans could be as grand as aiming for multi-million pound turnover in the next five years, or as humble as starting to sell online in 2015. It’s important that you choose the right goals for your business, based on solid research (more about that later) and that you have a clear plan of the tactics you will use to achieve them. Often it can be tempting to think only tactically, but it pays to take some time to think about why you’re doing it and how you will measure the success of all your hard work with financial forecasts to back it up. First, consider how scalable your business is. If its current success is dependent on one or two key members of staff and their skills, large-scale growth through increased volume may not be achievable. However, this doesn’t mean you can’t grow, just that you might have to look at other alternatives, such as being more innovative around your product or service. This should help choose the right way method of innovation for your company.
Types of innovation Developing a new or improved product In a recent Forum member Growth Panel, we found that most businesses are focusing on product and positioning, rather than competing on price. But before you develop a product, you need to do your research. What do customers perceive is wrong – and right – with your existing products? What do they want? What are their biggest challenges? What are your competitors doing? These are all questions you should
4
The Forum of Private Business
be able to answer before you spend a penny on new products. Members can find a guide to carrying out market research at www.fpb.org/marketresearch.
Adding value through services As well as tangible products, you could think about ways that you could offer added value services for sale or to improve your existing product/service. Unlike products, these can often be delivered at low cost and potentially without time restraints. Examples of free services include user guides, comparison service or a newsletter. Paid-for services could include consultancy. Think about who your customers are and what they care about – what services could you develop that would make their life easier, and help you retain them in the process?
Making processes more efficient As we covered in the last issue of in.form, improving efficiency can have a big impact on your bottom line. Inspecting where you might be wasting time and money, and how you can increase capacity, will not only help you in running your business, but can actually mean you deliver better quality to your customers. And more happy customers means more repeat business.
Preparing for growth There is more to growth than just making more sales. With any plans to grow your business, you also need to think about how your business would cope with additional workload and any infrastructure changes you might need to put in place. By making sure you’re prepared in advance, your business will be ready to take advantage of opportunities when they arise, rather than missing out to a competitor.
Managing business resources Good employees are the engine that keeps your business running, but getting the best out of them under pressure can be a tricky balancing act. Periods of growth will almost always require increased effort from staff. You typically have two choices here; ask existing employees to do more and potentially spend some money and management time in the process, or look to hire more people with the required skills. With the latter, you need to consider whether you can afford to take on a new member of staff. Alternatives could include fixed-term contracts or outsourcing.
We hear from small businesses all the time just how difficult it is to access funding, with many using their personal savings and overdraft facilities to fund growth. However, if you are looking to external finance, from the banks or alternative providers, a well-thought out plan will definitely give your chances of success a boost. We’d love to hear your plans for 2015, and in particular any success stories you may have. You can let us know via Twitter @The_FPB or email editor@fpb.org. We’ll share the best, and you could even end up as a case study in in.form.
The cash flow question It’s a catch-22 situation; growing a business can certainly bring in more money, but you often need cash up front to fund it. After all, increasing inventory, taking on new employees, moving premises, investing in plant and machinery all cost money.
We’re here to help As a member of the Forum, you have access to a helpline for all your business queries so if you need further advice on growing and protecting your business, call 0845 130 172. Plus we also have a series of free mini guides to marketing your business which you can download from www.fpb.org/resources.
Visit fpb.org
5
News from our policy team
2015 presents some major challenges for the small business community as we enter a period of uncertainty in the run up to – and beyond – the general election, regardless of which party or parties form the next government. Other than for the Budget in 2015, our ability to influence decision makers will be significantly hampered as a result. Combined with the lack of appetite by government and its departments to implement new policy initiatives to support an environment for businesses to do business, this is likely to affect growth in 2015 despite positive forecasts for the year ahead.
Focusing on the issues that matter The political climate may be uncertain, but one thing you can be sure of is that the Forum will remain focused on the issues that matter to you, our members. These include the cost of doing business, business rates, regulation, tax incentives for exporters, infrastructure to support business, together with banking practice and access to finance. However, we will also be focusing on growing concerns about big business ethics and a rising trend of poor supply chain practices including new and novel ways of burdening suppliers with extra cost and retrospective discounts in addition to the well-known issue of late payment. Formerly the tactic of larger businesses with targeted buying teams, we are now seeing a wider adoption of regressive practice towards the very businesses – the supply chain, which do so much to support their larger customers. This is a dangerous trend which risks breaking many suppliers, especially small businesses, with no resultant winners. Our Referendum survey this quarter is therefore focused on these very issues. We need to gather quantitative data but we also need to hear from you about your concerns.
6
The Forum of Private Business
Your views can make a difference You will naturally be nervous about speaking out for fear of being targeted by the very companies you supply, and who we are trying to expose, because of the risk of you losing current or prospective business with them. The Forum will ensure anonymity of all data, but we will also be talking to members brave enough to want to speak out, to strengthen our position and therefore voice in this crucial area of policy change and development. We are also looking at using legislation to challenge these businesses directly, via a type of class action system, without the need to name any member. We have already held meetings with the Competition and Markets Authority and the Groceries Code Adjudicator to raise our concerns and we are gaining traction.
For our members, not for profit We know that for any small business owner, maintaining and growing a business is often a challenging affair. The last thing you need is for any customer to add to those daily burdens by operating poor and unethical business practices. We will continue to strive to influence those who adversely affect our members, whether through over-regulation and bureaucracy or by supply chain abuse and anti-competitive behaviour. Our aim is to ensure we are your voice. Everything we do is for you, our members, not for profit.
Looking forward to 2015...
“Consider the impact of ludicrous legislation designed for big corporates on the SME. Common sense needs to prevail.” Member response
In the last Referendum ballot, we asked you to tell us about your plans and ambitions for the year ahead, plus what support you want to see from your elected representatives pre- and post-election in order to achieve those plans. Here’s what you told us … How businesses are planning to grow
45%
Introduce new products or services
54%
58%
Sell more to current customer base
Targeting new customers in the UK
In order to grow, businesses need the right support from government
Barriers to growth
54% Business rates
46%
What effect has the coalition government had on business?
Business confidence
31%
39%
negative impact on health & safety culture
positive impact on reducing deficit
Utilities costs
What do businesses want from MPs?
28%
Listen to small firms
20%
Try to understand small firms
44%
19%
Less talk, better delivery
The run up to the election is a key time to make small businesses’ voices heard, and we will continue to use your views to influence the conversation around these issues. If you’d like to get involved in our research or provide a case study, email policy@fpb.org. Download the full report at www.fpb.org/referendum
“MPs should contact us, offer open days for small business where we can make our case, ring back when we call.” Member response
Visit fpb.org
7
Key dates & events to be aware of in the small business calendar
Self Assessment Tax Return Deadline Tax & Budget Panel House of Commons recess SME Finance Monitor
31st January February 12th-23rd February 2nd March
Small business auto enrolment 50+ employees
1st April
Common Commencement Date
6th April
Protect your business in the digital age As more and more business moves online, cyber fraud and phone hacking are an increasing danger, costing companies of all sizes thousands of pounds with little chance of recovery. Telephone hacking can cost you as much as £30,000 over a two-day period and the current fines for cyber breach and data loss under UK and EU legislation can be as much as £500,000. Common instances of risk include:
• • • • • •
Hacking, viruses and fraud Social media misuse on sites such as Facebook and Twitter Misuse of company email, internet and hardware, in and out of the office Loss or theft of personal/company owned devices containing personal information Breach of contract by service providers, including online marketing companies and outsourced IT services Breaches of cyber legislation, including the e-Privacy Directive or ‘cookies law’.
To support your ability to protect against these risks we have partnered with CybeRed, a cyber safety education and solutions company. Forum members now get 12 months’ free access to Cyber AMI®, an affordable and easyto-use cyber risk management system to help protect your business. *Access normally costs £10 +VAT per month
8
The Forum of Private Business
Visit fpb.org