YOUR AWARD-WINNING SUPPLEMENT
FOCUS ON SMEs
EXCLUSIVE: David Craik interviews Anna Soubry, Minister for Small Business, Industry and Enterprise
Plus…
November 2015
UCL links up with Business Reporter to present the Medal for Entrepreneurship
WHO WILL IT BE?
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November 2015
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Opening shots René Carayol
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VERY NOW and again, my diary from hell appears to be working magically in my favour, and this is one of those rare moments. As I sit down to pull my thoughts together about what has changed in the world of supporting small to medium enterprises (SMEs), I glance through my diary and, next Thursday, I have been invited to moderate a fabulous session for 300 SMEs facilitated by Goldman Sachs. It’s predicated on how they are providing support to the 10,000 Small Business UK Programme on how they best “Scale Up” – yes, 10,000! So let’s just give that some context. The Federation of Small Businesses (FSB) at the start of 2015 estimated that there are 5.4 million businesses in the UK, which employ some 26 million people, and have a combined turnover of more than £3,700billion. This is significant stuff – made even more relevant to this event is that SMEs account for 99.3 per cent of all private sector businesses in the UK, providing 48 per cent of private sector employment, and 33 per cent of private sector turnover. No matter where you sit in UK industry, SMEs are relevant, vital and deserve tangible support. Back to Goldman Sachs. We all know them as the blue chip investment banking giant who
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THE ESSENTIALS
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No matter where you sit in UK industry, SMEs are relevant, vital and deserve support are generally involved in some of the world’s largest M&A transactions, advising the largest multinationals, and getting involved in eyewateringly large business transactions. Therefore, it was a pleasant surprise to learn just how much active, genuine commitment they have put into the push to support today’s SMEs. With the right support and a small sprinkling of good fortune, they could well become tomorrow’s market leaders. How times have changed. Having had the privilege of serving as both chairman and non-executive director for a few fast-growing SMEs in the past, I only wish that we could have been part of something so well thought through and so powerful. The one and only Michael Bloomberg (until recently mayor of New York, but now back running the media empire he created) will be
• See how the Goldman Sachs Small Business Programme helped one smoothie operator – pages 8 and 9
the guest keynote speaker. There was a time, admittedly many years ago now, when he too was running an SME, which went on to enable him to become the ultra-successful billionaire that he is today. Just the right sort of insights and role model for our diverse collection of entrepreneurs and wealth creators in the audience. I am looking forward to and excited to be running an instructive and learned panel which has Professor Mark Hart of Aston University, who is the key academic for the 10,000 Small Business UK Programme; Patrick Magee, chief operating officer of the British Business Bank; and Sherry Coutu CBE, founder of the Scale-Up Initiative. As we all know, the last few years have seen a complete turnaround from the traditional methods of funding for SMEs. While this has been extremely painful for far too many young businesses, it has also served to demonstrate the resilience and fortitude of many others. We still tend to start any assessment of an SME with inadvertent cynicism. The desire to embrace such numbers encourages an attitude of trying to identify winners as opposed to becoming obsessed with looking for faults easily found in fledgling businesses. With the sort of tangible support being given by the likes of Goldman Sachs, many dreams are becoming reality, but rock-solid initiatives like this are still not enough – but what brilliant role-modelling, and I hope I’ll have the opportunity in a future issue to share both the experience and the many nuggets from this much welcomed event with you.
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Virgin Media pledges £1,000 scheme to SMEs to help get them online VIRGIN MEDIA BUSINESS has launched a free small business broadband installation scheme to help small businesses get online. Last month Virgin Media Business launched a report, entitled The UK’s £92billion Digital Opportunity, which revealed that digital technologies could boost the UK economy by 2.5 per cent of GDP (or £92billion), as well as Minister for the Cabinet Office Matthew Hancock is fronting the government’s new partnership with the ODI
create more than a million new jobs across all industries over the next two years. The scheme will cover up to £1,000 of installation costs for new business customers, and will reach the same cities as the government’s Super Connected Cities (SCC) voucher programme, which closed last month. Virgin Media Business was part of the original SCC voucher programme and will trial its own
version of the scheme for the rest of the year. It has set the figure at £1,000 because almost all (86 per cent) the installations it completed under the SCC programme were for less than £1,000. Mike Smith, director of Small Business at Virgin Media Business, says: “We’ve connected thousands of small businesses with the support of the Super Connected Cities
voucher scheme, which was a huge success to help businesses get online. “We’re pleased to launch this exclusive trial for the UK’s small businesses to help them get online and thrive with the fastest available broadband. We know one of the biggest challenges facing small businesses is upfront costs, including for the likes of broadband.”
ODI start-ups injecting £6.5m into UK economy By Joanne Frearson START-UPS IN programmes at the Open Data Institute (ODI) are helping growth in the UK economy and increasing employment, and were a major theme at the ODI 2015 Summit, for which Business Reporter chaired the recent panel session on Open Data Means Business. The ODI has had many successful start-ups come out of its programmes, which include the Open Data Challenge Series (ODCS), the Open Data Incubator Europe (ODINE) and the Core Incubation programme. This year ODI start-ups have contributed £6.5million to the economy, and since 2012 they have accumulated £10.5million in sales, investments and efficiency savings. Speaking at a press conference at the recent ODI Summit, Gavin Starks, CEO at the ODI, says: “We have more than 30 start-ups through our
incubation programmes and they employ 150 people between them. They are all rapidly growing organisations and have been creating knock-on (effects on the economy to other) businesses.” For example, TransportAPI, in the ODI start-up programme, now has more than 1,100 developers and organisations signed up to use it, and powers apps such as Cit yMapper and UK TravelOptions. Although many of these startups have been very socially focused – in the ODCS the categories for applicants have been crime and justice, education, energy and environment, housing, food, heritage and culture and jobs – they have had a knock-on effect on the economy. Starks says: “We are trying to find businesses that employ people that solve problems. The priority was more about the social return, but it has also created jobs
and sustainable businesses.” In the Open Data Means Business session, chaired by Business Reporter, ODI start-ups which took centre stage included Provenance, a company whose focus is about opening data in the supply chain, and Brightbook, which uses open insight to help SMEs manage the accounting of their businesses. In the same session Matthew Hancock, minister for the Cabinet Office and Paymaster General, announced the government would look to the ODI to help shape its data agenda. The ODI will help the government connect with the businesses, start-ups and innovators progressing in this field. Research shows investment in this area is making a difference. Nesta and the ODI commissioned
PwC to analyse the impact the ODCS programme was having on the economy. It found i nvest ment i n t h is ODI programme could bring a tenfold return to UK economy over three years and lead to the creation of 75 to 140 jobs. Martha Lane Fox, board member at the ODI, says: “This report shows how start-up businesses are creating surprising new citizen services with open data that have the potential to be commercially very successful. “Demonstrating the value of open data to the UK economy is important – we need buy-in from government, we need businesses to be enthused about not just using, but publishing high-quality data, and we need to raise the level of data literacy across all sections of society.”
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How to do your accounts in 30 minutes a week
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mall business owners should spend no more than 30 minutes a week doing their accounts. Maximum. Not a second more. That time-span should include all financial duties, including bookkeeping, payroll, VAT, receipts, cash-flow analysis, monthly reports, tax returns, year-end accounts… the lot. Small firms typically spend aeons on their books. Evenings are ruined. Weekends get lost. For many sole traders and entrepreneurs it is a way of life – staring at books, filling out spreadsheets, eating up time that they could be spending with their family or friends. So how can all this time taken be shrunk to half an hour a week? Paradoxically, the first bit of advice is expand the amount of reporting you do. Yes, increase the workload. List all the things your business needs to thrive. Include things like detailed monthly reports on the financial health of your firm. There will be items like auto-enrolment for staff pensions. Let’s make sure your firm will be as well-regulated as a
large enterprise with a specialist finance department. Now – and here’s the crucial bit – give all that work to your accountant. All of it. Before you wince at the cost, you can be reassured that your accountant should not be charging you a penny more to take on these duties. It should be the accountant’s job to handle the financial side, so the business owner can concentrate on growing their business.
What do accountants actually do for you? Sadly, frustratingly, incredibly, many do not handle their fair workload. They expect their client to do the bookkeeping. The client ends up doing data entry for expenses and writing monthly reports, even filing VAT returns. To repeat – the accountant should be doing all this and for not one penny more. To prove the point KPMG has launched an annual fixed-fee
service for sole traders, start-ups and small businesses. For £125 a month sole traders get everything we believe an accountant should offer. It’s around £300 for limited companies with a handful of staff. That fixed fee stays fixed, no matter how unusual or demanding your request. We expect you to spend: • Zero minutes on spreadsheets • Zero minutes on bookkeeping
• Zero minutes dealing with HMRC • Zero minutes on payroll • Zero minutes on VAT You’ll get a personal, UK-based KMPG accountant you can think of as your finance team. If you hurt, they’ll feel the pain too! They’ll do your monthly report and cash flow analysis. Our ultimate goal? To make sure no small business owner
has to spend more than 30 minutes a week on their books. Because just think what potential and productivity could be unlocked in UK businesses, once they’re given the gift of time. Bivek Sharma is a partner with KPMG and started the Small Business Accounting division two years ago 0800 028 1028 accounting@kpmg.co.uk
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Linzi Boyd tells Joanne Frearson why she only ever wanted to be an entrepreneur
Born to run a business!
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Y THE AGE of 18, Linzi Boyd, author of Brand Famous and global partner of Shirlaws Group, had started her first business, a premium clothes shop in Leeds. Her store quickly earned a reputation, bringing brands like Diesel, the Italian fashion label, to the north of England. When she was younger, Boyd knew school was not for her, so she left at 15. “I never thought of any other route except being an entrepreneur,” she tells me. “I have never worked for anyone else and it never entered into my head to work for anyone else. I have always loved building brands and businesses and recognised how to do that through doing it for myself. “I had a well-known footballer’s wife work for me, and at the time Leeds United were huge and all the clothes used to sell out. It made me aware of brands, and other people’s brands, and how that could impact sales.” Her business was so successful that, at the age of 20, she sold it and moved to London to set up a footwear brand. Within four years, Stride Footwear was available all over the world through six distribution channels, and Boyd’s shoes were recognised as design classics at the Design Museum. She sold Stride to Caterpillar and moved on to her third business, Surgery PR, at the age of 25. Surgery has since been recognised for building some of the biggest brands on the high street today. She set up the company because she wanted to use the knowledge she had gained in her career to help others build their own brands. “Interestingly it started with my first client, Mark Newson, who had just designed the iWatch,” Boyd says. “We launched his book, car, watch and bike – I was out there in Sydney with him for the millennium when he designed the lighting for the opera house. “Now, 15 years on I am known in the market for building, renovating and refreshing brands, building brands from an
early stage, renovating brands from a dormant state, or refreshing brands that have already been doing well and might want to keep their position as a market leader or move onto the next stage.” For the last four years, Boyd has been working with SMEs, and has set up her own school, BOB (Business of Brand), to inspire and educate a new generation of business leaders about the secrets of building a successful brand. Her book, Brand Famous, which covers the same subject, has become a bestseller. It outlines the steps she teaches to create a successful brand, which include discovering, creating, connecting, communicating and evaluating. Boyd recommends people not to go to market with a product, but with a brand. “When Steve Jobs got up and talked about his brand Apple, he never said: ‘I have an iPad’. He got up and talked about technology and innovation and what that means for the world,” says Boyd. “What that future vision is and how it is changing the face of innovation and what that looks like. You have to build a business from a brand space first and then move into building out your revenue stream. “What we teach people is to test, redesign and reiterate. Get it out to market as quickly as possible, redesign it to get feedback and reiterate it. Reiteration is the best thing that came around. It is OK to put something out there, redesign it and get it out there again. You go to four, five or six reiterations before you get it right.”
“I have never worked for anyone else and it never entered into my head to work for anyone else”
Boyd believes that, for SMEs, the world is now their oyster. She says: “Because of digital you are no longer playing a local game, you are playing a global game – which is great as you now have the world to play with.” What is also imperative for SMEs is to have a can-do attitude. “There are a lot of people who will say you can’t do it, but you really have to listen to yourself,” she says. Boyd has had many success stories from her training school, helping companies that were finding it difficult to take their product to market to become successful. She tells me of a case about a businessman who approached her after failing to get funding for a passport identity tech business. “He came to us and we redesigned his business model,” explains Boyd. “Within six weeks he got massive funding and a partnership with one of the biggest banks. He went out to market with exactly the same product, but we changed the business mindset and redesigned a story around it.” For Boyd, there is no other way of life but to be an entrepreneur. Her success has made her famous and now, through her book and her training school, she is helping other SMEs get recognised as well.
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Business Reporter
EXCLUSIVE David Craik
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NNA SOUBRY’S voice, not for the first time this afternoon, is pulsing with energy. On the day that we sit down with the Minister for Small Business, Industry and Enterprise, in her bare-walled new office in the heart of Parliament, she has learned of supermarket giant Tesco’s plans to improve payment terms to its smallest suppliers to 14 days from an industry standard 28. “This is excellent,” she says, her hands sweeping up from her animal print top and across the room full of rolled-up posters, picture frames and boxes. “This is the sort of cultural change we need. Payments in 120 days belong to the past and I absolutely call on other businesses to follow what Tesco is doing.” Figures from BACS Payment Scheme put the amount owed to SMEs in late payments at £26.8billion in July 2015. That is down from £32.4billion in 2014 but still a significant hurdle for growing businesses. “They feel it is getting more onerous. We have to change the culture,” she states, Big Ben appropriately chiming time in the background. To help tackle the issue Soubry, who was appointed to her new role in May as part of Prime Minister David Cameron’s aim of giving small business a bigger voice at the Cabinet table,
“I have been blown away by young school and university students setting up their own businesses. They don’t even blink about it. Wow! What a difference from my generation when you were expected to work for a big company or in the public sector.” says a Small Business Commissioner will be established by the Enterprise Bill next year. The commissioner will assist small firms in resolving late payment disputes and signpost appropriate services such as ombudsmen or regulators if they need support. The aims include “creating a long-lasting culture to promote fair treatment”. The job will most likely be advertised in the spring, with Soubry looking for someone with vast business experience to fill it. “Small businesses don’t want to go to court over late payments because it cost s money a nd da mage s relationships with their customers. The commissioner will hear c o mpl a i nt s a n d s i g np o s t alternative mediation,” Soubry, a former barrister and journalist before entering the Commons in 2010, explains. “Much of the success will depend on the quality of the person
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The big interview Anna Soubry
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It is business operations. We want framework do what
As the first MP to fill the government’s newly minted post of Minister for Small Business, Anna Soubry believes SMEs need to be more able to determine their own futures
who is appointed. We want someone with the ability to do things discreetly, even sorting issues out with telephone calls to chief executives, but also not be afraid of speaking out when something is not being done properly. The com m i s sioner c a n na me a nd sha me those businesses which are seeking to impose terms and conditions which are out of date in the modern world.” The Enterprise Bill also promises to tackle the problem of red tape, with the government’s Primary Authority scheme being simplified to entice more small businesses to sign up. The changes will allow all existing and pre-launch firms to choose a single local authority as their regulatory point of contact for relevant legislation. “This should really help businesses save money,” Soubry states. “They won’t have to duplicate application processes to various bodies. At the moment it frustrates firms and slows down business.” Soubry is also keen to encourage more SMEs to start exporting. The government has a goal of having 100,000 more UK firms exporting in 2020 than in 2010 while hitting £1 trillion in exports. Soubry believes encouraging more medium businesses to “scale up” will boost export numbers, but admits it will be a challenge. “You have an issue with
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not our job to tell how to run their Not a good idea. to create the where they can they want to do well-established medium-sized firms who don’t want to make that jump forward,” she says. “Maybe they have got to a certain position where their life and work balance and future security is good and they don’t want to run the risk of borrowing an awful lot of money. They might feel vulnerable as they were badly hit in the recession. But if they did scale up it would make a huge difference, especially to exports. We need to understand the reasons.” As part of this, Soubry has talked to an “unnamed” senior British businessman. “Some ideas he has put my way include meeting with a group of businesses which have been in this position to find out what government can do. I suspect one problem is the relationship between businesses and banks. Is it as good as it should be? Banks are lending but there is a perception and a myth that they are not,” she explains.
Soubry, however – herself a daughter of a small garage owner – knows it is vital to look outside the green carpets, fusty bookcases and the Monty Python-style “Large Ministerial Conference Room” directly outside her office, and allow business to help business. “It is not our job as politicians and government to tell business how to run their operations. Not a good idea,” she smiles. “We find out and understand and see how we can help. We then create the framework where businesses can do what they want to do.”
“I suspect one problem is the relationship between businesses and banks. Is it as good as it should be?”
One example of this, she points out, is trying to ensure that micro-businesses, those employing fewer than 10 people, know where to go to for help and advice. “In the old days you had local bank managers who had a real depth of knowledge to assist new businesses. I have real concerns that today firms don’t know where to go to get good advice,” she says. “There are some great organisations out there, such as the Federation of Small Businesses and local chambers of commerce. But they could do more to help. If you are small you are not going to pay hundreds of pounds to become a member.” Soubry says she is also arguing hard for business to be at the heart of the government’s new devolution deals. “They must be led by local business, not local politicians. Businesses know the local needs and the faults and strengths of the market and supply chain,” she argues.
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Soubry with David Cameron during a visit to Singapore in July
“The Local Enterprise Partnerships must be the drivers of the deals to ensure prosperity across all our cities.” That growth will be helped, Soubry believes, by the thriving force of young entrepreneurialism. “I have been blown away by young school and university students setting up their own businesses. They don’t even blink about it,” she smiles. “They don’t see anything unusual in setting up a business. Wow! What a difference from my generation, when you were expected to work for a big company or in the public sector. A lot of that change has been led by schools and new academies working with businesses.” SMEs in Soubry’s words must also “take it on” themselves in developing their own skills and capabilities. “The small businesses who are really making a success of it in really challenging times are the ones who have gone, ‘right I’m doing a Facebook page, I’m doing click and collect’. They have changed their services,” she states. She looks up as she receives a gentle reminder by her advisers that she has another pressing engagement to go to. “I’ll keep talking because I want to,” she replies, smiling broadly. She mentions her support of Small Business Saturday which encourages consumers to buy from local small firms. “It’s great as people really want to help local stores, but the networking opportunity it creates is also important. I met a couple of women recently who want to set up a networking website for small micro-firms, and where we can help with that we will. But as I said before, it has to be led by people who know what they are doing – the business community,” she states. Soubry springs up from her chair and starts rolling out those posters on her desk. They carry photos of British-made cars, yachts and Rolls-Royce Trent engines. “I love those engines. They’ll look great on the wall,” she says. “You can’t have a strong economy without businesses and it is something people should be proud of being a part of.”
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How a dull A pet food conference sparked a taste for fabulous smoothies Joanne Frearson talks to Richard Canterbury about how he took his fledgling smoothie business to the next level without breaking the bank
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FTER ATTENDING a pet food conference in Geneva, Richard Canterbury was bored. It was simply not the career he had envisaged. He had toyed with the idea of starting up a smoothie business following a trip travelling around the US, Australia and New Zealand but, on his return, he went into advertising instead. The pet food conference was the final straw. His smoothie idea re-emerged, and over the next four months he produced a business plan, quit his job at Saatchi & Saatchi and started Love Smoothies. “The conference was incredibly dull,” Canterbury complains. “I just thought, my God! If I do not get out of this now I am never going to do it. This is it. Love Smoothies.” He began selling his drinks at a smoothie bar in Borough Market and six months later went back to Saatchi & Saatchi to build a smoothie bar in its reception. In 2012, he won a place on the Goldman Sachs 10,000 Small Business programme, which gives small businesses practical advice on how to grow their ideas. The course proved invaluable for Love Smoothies. It also gave him a mentor, which Canterbury believes is essential for anyone starting out in business. “I met my mentor on the course,” he says. “Someone who has been there before, seen it, done it and got the T-shirt is invaluable. What you actually need is someone with experience who can introduce you to the right people and show you how to do a proper P&L and explain what is necessary.” Since starting out in Borough Market, Love Smoothies has enjoyed tremendous growth. It now sells three million smoothies a year in about 5,000 different cafés, and has distribution deals with Pret A Manger, Virgin Active and Ocado in the UK, while internationally it has deals with supermarkets in Denmark and the UAE. Love Smoothies is now in
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Why my £50 cut of lamb shows that SMEs can offer us all a good deal EXPERT INSIGHT
Simon Ashby
talks with two Australian supermarkets to distribute their products. Canterbury says: “If we can sell into supermarkets on the opposite side of the world it would be fantastic. As you know we only have about one month of sunshine a year, so it makes sense for us to chase the sun and try to find other countries that have much more sunshine.” Now that Canterbury has been there, done that and got the T-shirt himself, he has plenty of his own advice for SMEs starting out. The first is to start writing a good business plan. He explains it does not have to be 100 pages, but 10 to 15 pages of well thought through information with sound financials, recognising everything will take twice as long as you imagined and cost twice as much. Another piece of advice he passes on is to employ people better than you. He says: “I read a book years ago called Good To Great – fundamentally, it said you should employ people who are better than you. It took me years to actually do this and I wish I had done it sooner. It is not always easy because they want money, but maybe you can give them equity. Just employ really good people. “I do not know retail so I employed someone who does. I pay him for that, but equally we are really starting to get some good results. “We have employed the ex-development chef who worked at The Fat Duck with Heston Blumenthal, and he is now taking our smoothies to a different level, creating much better balance, using much better, innovative ingredients to create flavours people can’t make at home or find much more difficult to make at home.” He also recommends SMEs enter awards to help their brand stand out from the crowd and give it credibility. Awards that
Below: Richard Canterbury, whose Love Smoothies has gone from a stall in Borough Market to an international business
Love Smoothies has so far won include the Great Taste Awards, the Quality Food Awards, the Free from Food Awards and the Hotelympia Innovation Awards. It is important for an SME, Canterbury explains, to grab people’s attention when they first start out. “In a competitive marketplace ideas get copied very quickly – it is hard to have a unique selling proposition,” he says. “You cannot stop people from copying you. It is frustrating. “The way you look makes you stand out from the crowd, and that is something really important. It does not have to cost a fortune. You can put together a good website, a good logo and a good brand identity without breaking the bank.” Love Smoothies does this by differentiating itself in three areas, says Canterbury – by having the best service, the best brand and the best product. To keep ahead of the curve, Love Smoothies has been developing new products for the winter months, the latest being bone broth. Canterbury says: “My wife has a disease called fibromyalgia and she has been making bone broth for years. It consists of boiling organic bones on the hob, with some herbs and vegetables for between 12 and 24 hours. We have to leave it on all night so we are constantly worried the house is going to burn down and everywhere stinks of boiled bone for two weeks. I thought, there has got to be a better way of doing this. “We have taken it down to individual cubes. We take high-quality chicken and beef and put it in an ice cube. You can put that into your cup, add boiling water and drink. Easy.” Canterbury already has orders from Planet Organic for the new product. “For us it is about balancing the seasonality: it is a healthy drink and perfect for winter and summer,” he says.
RECENTLY I was busy marking a pile of student assignments for a module entitled World of Enterprise. One of the tasks the students had to do was to reflect on their understanding of the term enterprise. Many commented on the fact that before the module they would have associated the term with “big business”, believing that large corporates dominated the business world. They were surprised to learn that small to medium-sized enterprises (SMEs) account for 99.3 per cent of all private sector businesses in the UK, with an annual turnover of £1.75trillion. It is this combination of large and small which arguably creates the biggest challenge for SMEs. As customers we want the best possible products at the cheapest prices. We also want easy access to these products via a range of delivery channels. SMEs on their own can find it difficult to satisfy these needs in full. They also lack the marketing budgets of their much bigger brothers and sisters, so cannot build the breadth of brand loyalty that they can command. On the other hand, larger businesses still need these SMEs, which make up a large part of their supply chain. Most of the products we buy have components supplied by SMEs, or might even have been produced in full by an SME – with the larger corporate (a supermarket for example) simply acting as an intermediary. Given this mutual need you might think that these large and small businesses get on well, but this is often not the case. And, as you might expect, most of the exploitation comes from the bigger businesses. A key reason why SMEs fail is cash flow. SMEs begin to grow, often driven by demand for their products by larger businesses, but then find that despite good levels of sales they run out of cash – why? The main reason is late payments,
which means payments that are delayed by more than 30 days. Late payments are a perennial problem for SMEs, but in 2015 the SME confidence tracker from invoice finance specialist Bibby Financial Services found that 51 per cent of SMEs wait more than 30 days for payment, often much longer. In total the five million smallest firms in the UK are owed an estimated £27billion in overdue payments. Late payments are a big cost for SMEs, interest charges for cashstrapped firms can spiral very quickly, and the cost of debt recovery can be high – recently BACS payment schemes estimated the cost of chasing late payments rose 25 per cent this year from £8.2billion in 2014 to £10.8billion this year. Late payments can also lead to some stark choices – one SME director I talked to recently explained that his, on paper, successful business currently had a major dilemma – either pay its staff or the money they owed in corporation tax – all because of one late payment of £150,000. So come on big business. When are you going to stop exploiting the SMEs which you so rely on and for whom many of your customers work? And come on consumers. It is about time we told big businesses that it is unacceptable to exploit SMEs and that we would rather pay a few pence more than see SMEs fail needlessly. As consumers we should also remember that in this increasingly digital age it is easier and often cheaper for us to deal directly with SMEs, especially in areas like food or tourism. We recently bought half a (large) lamb from a local farmer for £50 – no supermarket could beat that. If we do not change our habits and fail to treat SMEs fairly we will all suffer. Many of our jobs, tax revenues and the excellent products and services we enjoy are provided by SMEs – so the more of them that fail, the poorer we will all be.
WANTED:
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Business Reporter
THE SEARCH IS ON for the entrepreneur who has given most back to society. UCL (University College London), one of the foremost seats of learning in the world, is linking up with Business Reporter to launch the first UCL/Business Reporter Medal for Entrepreneurship. We are looking to honour someone who has founded their own successful business and then used their business skills to promote enterprise and provide opportunities for others. The aim is to highlight committed entrepreneurs who have worked to benefit society, not just by writing big cheques, but by making use of their capabilities and experience. Timothy Barnes, Director, UCL Advances, said:
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“Entrepreneurship is vital to the success of the British economy and we here at UCL are determined to play our part in encouraging businessmen and women to develop to their full potential.” Bradley Scheffer, MD of Business Reporter, is delighted to be involved in this search. “We are always keen to write about successful entrepreneurs so I’m particularly pleased we are involved with this award. I am sure there will be many deserving candidates – good luck to all the nominees.” Judging for the award will take place in early December, and the presentation will be at an event at UCL in February of next year.
How UCL is helping entrepreneurs reach their goals Timothy Barnes Director UCL Advances
W
HAT DO TURNING waste coffee grounds into biofuel, creating a new website to advise gap-year students and volunteers travelling off the beaten track, and a technology to help shops understand the demographics of customers coming through their doors all have in common? They are just three of the many successful start-ups which began life at University College London. The projects were launched by student entrepreneurs who were helped by UCL advisers with business planning and won awards which gave them early funding. Thanks to the support they received from UCL, all three are now thriving. The coffee waste recycling company bio-bean (www.bio-bean.com) employs 20 people and has a production plant in Cambridgeshire. Its founder Arthur Kay, who studied architecture at UCL, was recently named the Guardian’s sustainable business leader of 2015 and, at 24, was the youngest person to receive this award.
Launched after its UCL student founder Sally Broom had an unpleasant experience with border guards in Cambodia, travel website Tripbod (www.tripbod.com) was named by the Times as the best new travel website in 2009. Last year, Tripbod was bought by internet travel giant TripAdvisor. Showcasing cutting-edge technology is Hoxton Analytics (www.hoxtonanalytics.com), founded by UCL graduate Owen McCormack, which counts retailer footfall by filming and analysing shoppers’ shoes. The company has received funding from an angel investor and a retail accelerator fund. Its technology is in use in The Dandy Lab (www.thedandylab.com), a concept men’s retail store in Spitalfields co-founded by UCL postgraduate Julija Bainiaksina, which highlights top British brands, and high-end technology including smart mannequins and interactive display walls. All of these businesses have been helped by UCL Advances, the centre for entrepreneurship at UCL, which was launched in 2007 and has grown into one of the largest such centres running in any university in the world. Our activities build on a history of entrepreneurial alumni that includes the founders of PwC, Giraffe restaurants and polling firm YouGov. We are proud to support
not just budding student entrepreneurs but also existing small and medium businesses that started outside of the university and are seeking to grow. We help anyone who wants to learn about, start or grow a business. Last year, UCL was ranked number one in the country for overall research power in the government’s Research Excellence Framework and has been in the top ten universities in the world in each of the last five years, according to the QS World University Rankings. This gives us a phenomenal base of know-how that we can draw on when seeking new business ideas or expertise to help existing businesses. Working with entrepreneurs helps inform our research and teaching, and becomes a virtuous circle of activity as we seek to maximise the benefits we offer to society and the economy. The UK is one of the best places in the world to set up a business. There is a plethora of support
available, increasingly from universities, whose attitude towards entrepreneurship has improved significantly in recent years. UCL has led the way in supporting small businesses and start-ups, through our partnerships with major corporations, such as Santander and Intel, as well as offering in-house support, training and funding. Over the last eight years, we have supported nearly 500 student business concepts take shape. Each year we work with more than 250 external small businesses through training and advice and provide 2,500 places on our programmes. Our support is wide-ranging. UCL has a “hatchery” which provides free office space in central London to students while they are working on their business idea. It is expanding and soon should be able to support around 100 students. The university is also involved in two innovation centres in central London where small businesses
An entrepreneur who has ‘given back’...
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Your to chance te nomina
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Who will be the inaugural winner of the UCL/Business Reporter Medal for Entrepreneurship?
Do you know someone who’s hidden their light under a bushel and who you think deserves recognition? Or a major public business figure who is more than just a celebrity but has made a real difference? Whoever they are, if you think they should be considered, please fill in the online form at www.ucl.ac.uk/enterprise/medal-for-entrepreneurship. You can also find a link on the Business Reporter website at www.business-reporter.co.uk. Everyone who submits a nomination will be invited to the event.
can work on projects and receive support from UCL’s enterprise services. The first innovation centre to open was IDEALondon, a joint venture with DC Thomson and Cisco based in Tech City in Shoreditch. IDEALondon was opened by Prime Minister David Cameron in 2013 and is home to a clutch of exciting tech start-ups, including Hoxton Analytics. The second centre, BASE KX, is at King’s Cross and opened this summer to support new c reat ive a nd pro duc t businesses. It is supported by the London Borough of Camden and can support up to 100 ventures at any one time. We believe entrepreneurship should start as young as possible. Five years ago, we launched Citrus Saturday (ww w.citrussaturday.org),
Above: UCL’s main entrance; Below: David Cameron opens the IDEALondon centre in 2013
which gives schoolchildren the chance to experience entrepreneurship. Our Citrus Saturday toolkit equips young people with the skills to start their own business and make a future for themselves. Participants create a lemonade product, brand it and sell it to the public, then keep the profits. More than 1,500 schoolchildren have taken part in the scheme, which has expanded to 15 countries in Europe and Africa. This is part of how we are giving back. Entrepreneurship is no longer an activity for the few, but a mainstream choice for many young people looking for fulfilling careers and those wanting to take on the challenges of solving the biggest problems the world faces. UCL is here to help all of t hose indiv iduals reach their goals.
The criteria for nominations are: •S uccess achieved from entrepreneurial activities. We are looking for someone who has founded and sustained a successful business. Similarly, a candidate who founded a venture capital firm which invested in, and helped grow, multiple start-ups, would also be suitable for consideration. • “ Giving back”. Candidates must show that they have applied their business skills for the benefit of others. This could include those who apply venture capital investment principles to their charitable giving, as well as people who have been actively involved in educating or funding the teaching of entrepreneurship and enterprise. But the important element is that they have done more to be involved than acting only as a funder. •U K orientated. The candidate must be active in the UK. They do not need to be of British origin, or live here, but their key business operations and “giving back” activities must be in the UK. •C areer success. The candidate must have already achieved significant success in their entrepreneurial career with their financial achievement already secured. Nominations close next Friday, November 20 2015
Photo: DAVID ILIFF. Licence: CC-BY-SA 3.0
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November 2015
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SMEs are risking their future growth by ignoring the wellbeing of their employees, according to research by Bupa. But do they realise the business risks they are taking? This exclusive survey reveals exactly what the SME leaders think…
46%
53%
43%
believe employee health and wellbeing will be a key consideration in their future growth strategy
do not provide employees with any health and wellbeing benefits
will never consider providing health and wellbeing benefits
How big should a company be before it invests in healthcare?
A
24%
admit that their business has become less concerned with health and wellbeing as it has grown
claim they don’t have the time to think about employee health
What impact does sickness have on your company? 76% who have had an employee take a long sickness absence reported a significant impact on business growth 32% admit they have lost money because of sickness absence 47% admit that if a team member took a significant period of absence it would impact business growth 46% believe even an early short-term absence would have been damaging
On average, SMEs provide health and wellbeing benefits when they hit 40 employees. 28% believe they are not at the size where they need to take employee health and wellbeing seriously 12% say they will wait until they have over 100 employees to provide health-related benefits. 32% claim that health and wellbeing benefits are for larger corporations.
re your employees sick and tired or fit and happy? When a key employee calls in sick and you’ve a deadline looming, it’s bound to make your heart sink, especially if you run a small business. Leaders of small and medium enterprises know that their employees make an important contribution to business success. Recent research by Bupa found that more than half of those firms questioned (57 per cent) believe the health of their employees is extremely important or the single most important factor affecting their business’s productivity and it becoming “sustainably successful”. Furthermore, one in three (32 per cent) of SME leaders have admitted they have lost money because of sickness absence, and nearly half (47 per cent) say that if a team member took a significant period of absence now it would impact business growth. The impact of an employee’s health on a business is clear. A healthy work culture and healthy staff help foster and encourage greater staff productivity and engagement, which are at the heart of business growth.
25%
Why small firms believe a healthy work culture breeds better businesses If an employee is off for several days, someone else might need to take on some of his or her work, because it just needs to get done. That has a knock-on effect on the rest of the business. If that person has to take on the work of the absentee, it means something they may have been working on just won’t get completed. But despite this, many businesses are failing to sufficiently support their people’s health and wellbeing. Bupa’s research found that a quarter (25 per cent) of SME leaders say that their business has become less concerned with health and wellbeing as it has grown. More than half (53 per cent) do not provide employees with any health and
wellbeing benefits, while two in five (43 per cent) say they will never consider providing such benefits. Balancing the needs of employees with the goals of your business will not always be easy. But with the buy-in of your staff and sound management practices, you give your business the best chance you can of being “sustainably successful”. Richard Norris (left), SME director at Bupa, believes the impact individual employees have on the growth of start-ups cannot be underestimated. He says: “Even one person on short-term sick leave can have a big effect on business growth and fellow colleagues in a small team. Yet leaders are still
not doing enough to help employees keep healthy and well as their enterprises grow.” There will be times when employees will need more support from you than you might think. Management support in times of need will help foster employee goodwill and loyalty. Probably some of the issues your business faces you wouldn’t have bargained for when you first started, particularly the health of your staff. Fortunately, there is much help available to support small firms. By supporting the health and wellbeing of their people, leaders are helping to protect the long-term health of their business. 0808 271 4184 www.bupa.co.uk/business
November 2015
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Inspector Dogberry Bean there, done that THE SMELL OF roasted coffee beans from Pact is a common
demand for its products is seeing the firm grow. It recently had a campaign to develop
occurrence in the Inspector’s
coffee in a pod for customers with Nespresso
office. Every time he is in the
machines successfully crowdfunded on
kitchen there is always a brew going on. The Inspector likes his coffee cafetière-style and especially enjoys Pact’s Finca La Joyeria bean, with its lovely poached pear and dark chocolate flavours. Pact’s head of coffee, Will Corby, discovered the brew in Colombia’s Antioquia region on the Santa Barbara Estate farm. Pact is on a mission to get the UK drinking better coffee and buys its beans from the best
Kickstarter. Over the past 18 months, Pact has been
This award-winning website provides information, news and advice critical to SMEs. Alongside its regular editorial staff, Small Business Trends has more than 400 experts who provide their own knowledge, insights and experiences to help you on your way to success.
www.startupdonut.co.uk/blog Alongside expert advice and links to useful tools for small businesses, The Start Up Donut’s blog section provides tips for entrepreneurs and leaders. Recent posts look at ways co-founders can avoid falling out, as well as advice on how to manage sustainable growth.
googleandyourbusiness.blogspot.co.uk
Mineiro region in Brazil. Capim Branco has taste that has hints of dried apricot, mango and chocolate flavours – however, roasting it for pods will unleash an entirely new collection of flavours, says Pact. Although the crowdfunding
If you’d like your business to make its mark on the digital world, this blog is a good place to start. Google’s experts share their tips and best practices on how to use services like Search, Shopping and AdWords to your
Business is GREAT Britain www.greatbusiness.gov.uk The government’s campaign to promote British business provides advice on how to start and grow your firm. Along with case studies and thought-provoking articles is the My Business Support tool, which gives information on resources and schemes available for your business.
campaign has already reached its target goal of £20,000, there are those that want a Brazilian coffee
headquarters in Bermondsey, then
adventure, they can pledge £5,000
shipped to customers within seven
to join Will on his next buying journey
Stephen Rapoport, is an SME, but
The Start Up Donut
Capim Branco a coffee from the Cerrado
are roasted in small batches at Pact’s
entrepreneur and coffee lover
smallbiztrends.com
Google and Your Business
still opportunities to get involved. For
The company, started by
Small Business Trends By Matt Smith, web editor
The first round of pods will be packed with
farmers across the world. The beans
days after roasting.
advantage to make sure your company makes the most of the web.
developing a number of long and short pods.
been a popular choice on Pact’s menu, with a
in Brazil. The lucky person will meet growers and learn the ins and outs of life on a coffee farm, as well as enjoy a year’s supply of Pact Pods.
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Evernote (Free – iOS, Android)
This handy productivity app allows you to access notes, images, files and saved web pages wherever you are, whether on desktop or a mobile device.
Docusign (Free – iOS, Android)
Need to sign a lot of documents? Remove the hassle of printing, signing and scanning with Docusign, which lets you do it from the palm of your hand.
14 · Business Reporter · November 2015
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INSIDE TRACK
Streamlining processes with smarter printers T here comes a point in the life of every small business when they need to take on their larger competitors. But the only way they can win is to be smarter – and become so lean and efficient that they have the resources to dedicate to proactive, revenue-generating activities. But many don’t have the slack to cut. They’ve been fighting to keep costs down from the start-up stage. However, there is one area that often gets overlooked – printing costs. OKI knows that this is the case because we’ve carried out a number of surveys of small businesses over the past few years. Our latest poll showed that more than half (52 per cent) still don’t know how much they are spending on printing. What makes this issue so important now is the current exponential growth of data volumes. This is making information management a real challenge, whether documents are digital or hard copy. IDC has recently claimed that businesses experience a 20 per cent drop in productivity per year through documentrelated challenges, and many enterprises are adopting document management to counteract this. But these systems are designed for corporates and have a price
tag to match. As a result, small businesses are at a disadvantage. But what has this got to do with printing? Because new smart versions of multifunction printers (MFPs), such as OKI’s new MC800 range of digital LED A3/ A4 colour devices, offer the advantages of document management in a way that fits neatly into a small business. MFPs incorporate a printer, fax, copier and scanner in one device. Smart MFPs provide an intuitive touchscreen with a customisable user interface. They include embedded software that can be programmed to perform specific functions, including scan-to-email, converting paper documents, PDF files and images into editable and searchable text and the capture of documents from various sources and then converting, distributing or uploading them to a chosen location. In this way they can take control of document intensive processes as well as support day-to-day colour and mono A3 and A4 print requirements.
There are other ways too that the latest print technology can support small businesses. Advances in graphic arts printers have made it easier and more affordable to print high-end colour – from business cards and stationery to flyers and brochures – on demand and in-house to save on outsourcing costs. In addition, the development of new digital printers that include white toner means that for the first time, white print can be used on dark-coloured media, providing far more flexibility and potential. All these innovations offer small businesses plenty of scope to make cost, time and process efficiencies – as a self-led initiative or with the support of a managed print services provider. Whichever route is chosen, a comprehensive print strategy can play a surprisingly key role in helping a small business streamline its processes and prepare for growth. Andrew Hall is marketing manager at OKI Systems UK 01784 274300 marketing.team@okieurope.co.uk
Video special
Big Data has the potential to be a pragmatic, everyday tool that can transform the customer experience. Find out more at http://bit.ly/1PrDawW
Speed dating with the world
A
s the UK’s international gateway to the world, Heathrow’s goal is to enable more and more UK SMEs to connect to new opportunities for growth locally, nationally and internationally. With the Heathrow Business Summit, Heathrow works to connect local businesses with each other, with the airport, and through the airport, to the world. For nearly 20 years, Heathrow has been creating new opportunities for business through annual business summits. Since these events began companies have won new business worth an estimated £90million. Opportunities at the summit include hosting workshops with local SMEs in the boroughs that surround the airport, partnering with procurement and supply management specialists to assist SMEs with advice on how to maximise procurement opportunities with the airport, and connecting SMEs to international markets by making the most of supply, export and growth opportunities through the airport. As the UK’s hub airport, Heathrow aims to encourage as many businesses across the country to access the economic benefits and procurement opportunities that the airport offers so, for the first time this year, Heathrow held its first Business Summit North to encourage even more SMEs to connect to the airport. Heathrow already has 1,200 suppliers from all
regions across the UK. The economic value that was created with the construction of the new Terminal 2: The Queen’s Terminal gives a taste of the potential that expansion at Heathrow will create across the UK. The Terminal 2 project created 34,000 jobs in infrastructure, engineering and construction and Heathrow used hundreds of suppliers to deliver the £2.5billion infrastructure project, of which many were small and medium businesses. This year’s event took place on November 10 at the Park Inn, Heathrow. The day consisted of speed-dating style sessions of interviews with procurement managers representing businesses based at Heathrow. By forging connections and winning new business, this is an opportunity for all UK SMEs to use the airport’s international presence to project their brand and ingenuity globally. This year’s Heathrow Business Summit took place on Tuesday November 10 at the Park Inn, Heathrow. To register your interest for next year’s event, please email sally_payne @heathrow.com
Business Reporter · November 2015 · 15
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Making downtime a thing of the past
D
isaster recovery is a growing priority: 63 per cent of SMEs globally consider it a critical issue. When internet outages occur, applications including VOIP phones, POS systems and e-commerce platforms become useless. Ultimately, this causes enterprises to suffer lost productivity and damaged reputations as well as affecting customer loyalty and direct revenue losses.
Do you have a contingency plan in place to minimise the risk of outages affecting your business? With so many different options for hardware, connectivity and solution management, making the right decision can be difficult. To simplify things, we compiled a list of the 10 things you absolutely need to consider when deploying a cellular failover solution (see www.wyless.com/
10-best-practices-for-wireless-backup). A major retailer with more than 275 locations nationwide is delighted it chose Wyless™ Broadband backup to protect its sites from connectivity outages. “The Wyless solution has already proven invaluable,” says the retailer, “providing continuous connectivity and keeping our retail locations humming during several wireline carrier
outages.” Wyless provides secure M2M/IoT managed services and business continuity solutions with its partner, evolve telecom. evolve has developed a strong proposition for SME customers, recognising that service and expertise are fundamental to a great customer experience and long-term loyalty. marketing@wyless.com
Recruiting with integrity, efficiency and transparency
C
Is your business ready for change? T
he one common theme throughout business today is change. As technology continues to evolve it forces organisations to change the way they do business, from file infrastructure to business processes, compliances and everything in between. The problem is that many organisations fall behind and become victims, rather than victors, of change. In order to successfully navigate change it is important for organisations to engage with technologies that are robust, open, and able to adapt with them. A recent change that affected
thousands of businesses was the overturning of the EU-US Safe Harbor framework. With technology advancing at a more rapid pace than the agreement accounted for, the EU made the necessary decision to protect the people. Unfortunately, as a result, EU organisations conducting business with any of the 4,500 vendors registered under the Safe Harbor framework were forced to retrieve consumer data shared and stored on US servers.
While thousands of businesses were victims of this change and ended up scrambling to find new alternatives for conducting international business, Egnyte customers were victors. Our Adaptive Enterprise File Services offer unique solutions for data management, which allow our customers to store their data locally behind their own firewall or choose to place their data in Egnyte’s wellestablished European data centre. A robust,
adaptive solution gave our customers alternatives to effectively protect them, and us, from any fallout around the Safe Harbor changes. This is a prime example of why it’s a business imperative to look beyond minimum requirements and proactively align with technology vendors, like Egnyte, that continually evolve solutions to help successfully navigate the rolling tides of change. Ian McEwan (left) is vice president and general manager of EMEA at Egnyte. Find out how Egnyte can help your business at www.egnyte.com
OREcruitment is a leading international recruitment consultancy with a friendly team of recruitment specialists, covering multiple markets across the service industry. Established in 2005, we have rapidly earned an enviable international reputation for our professionalism and high-quality service delivery – founded on our three core principles of integrity, efficiency and transparency. COREcruitment provides a range of facility management services to help organisations find the support they need for their business challenges.We spend time getting to know your business intimately and gaining deep understanding of your needs. Our facilities management services are built around a team of experienced and highly trained individuals who ensure our services are delivered in a safe, consistent and high-quality manner to our customers. We manage a range of traditional soft services such
as cleaning, catering, grounds maintenance, through to hard FM services. We specialise in the following sectors: • Support services • Cleaning • Pest control • Security • Waste management • Healthcare • Hygiene • Hard services Special projects in the past have included: targeting international specialists to help run theme parks; specific roles within healthcare organisations; environmental services managers and much more. If you would like more information about our methods, clients or company background, or are interested in securing the services of our team of facilities management recruitment specialists, contact us today on +44 20 7790 2666 or email suj@corecruitment.com
16 · Business Technology · November 2015
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Why skills and training must be at the heart of the UK rail industry C
hancellor George Osborne has given the green light for the start of the race to secure £11.8billion of contracts on the first stage of HS2 – building the major civil engineering structures that will form the core of what will be one of the largest infrastructure projects in Europe. Once it’s up and running, HS2 will deliver fast, frequent and reliable connections between London and the major cities of the north, as well as between them and the Midlands, helping to improve capacity and boost connectivity and economic growth across the country. Building HS2 will create tens of thousands of individual business opportunities, the majority of which are expected to go to SMEs. We estimate that more than 14,000 jobs will be created on the construction of the London-to-Birmingham section of the route, with a further 10,000 on the second sections up to Manchester and Leeds. At the peak of construction, in the mid-2020s, we expect more than 24,000 people to be working on the project, either on site or across the UK-wide supply chain. That’s a lot of people, but what’s particularly striking is the demand for higher-level skills. 50 per cent of the workforce will require skills at, or above, level 3 (A-Level equivalent), yet 80 per cent of the current UK construction workforce typically only train to level 2. Quantity is also an issue. Every year the UK needs 87,000 graduate engineers, yet in 2013 only 51,000 engineers graduated from British universities and higher education institutions. Added to that, 20 per cent of UK rail engineers are expected to retire
over the next ten years. That’s why it’s essential that we move to close the skills gap in order to capitalise on the investment in HS2 and the rest of the national rail network. Closing the gap is about numbers, but crucially it’s also about the kind of skills people have. I think it’s fair to say that most people have an image of a rail engineering as manual heavy industry. Yet today’s workforce is far more likely to be involved in programming, digital design, control and hi-tech manufacturing. Ours will be the first major UK transport project built entirely in the digital realm before we put a single spade in the ground, using BIM Level 2 from day one. The next generation will also see the increased roll-out of European Rail Traffic Management System (ERTMS) digital signalling and modular construction across the national network. It is clear that to meet the unprecedented scale and nature of this demand, the rail and construction industries need to prepare for a hi-tech future. They need to attract the brightest and the best engineers and project leaders to drive the industry forward. Even setting aside HS2, the scale of investment is immense. Current Network Rail plans predict £38billion of spending between 2014 and 2019, plus of course the ongoing £14.8billion investment in London’s Crossrail. All of this will create demand for thousands of highly skilled people. Clearly, for companies up and down the UK, the prize is huge. But it is becoming all too evident that, in order to maximise the benefits, we as a nation must do more to build skills, capacity and innovative thinking within the industry.
“HS2 has the potential to be much more than just a railway. Instead, I believe it can be a catalyst for change, building British skills and expertise and helping to rebalance the economy” – Beth West, commercial director, HS2
That’s where the new National College for High Speed Rail comes in. Based in twin campuses in Birmingham and Doncaster, the college was established by the government to train the next generation of high-speed rail engineers and provide training and support for the existing workforce across the national rail network. Due to open in 2017, the college will offer a Higher Technical Diploma as well as short courses in areas such as rail operations, management, commercial awareness, rail systems, asset management, engineering principles and workforce safety and welfare. Full-time and part-time study will be available, with a mix of classroom, virtual learning and work placements. The thinking behind the college is simple. It’s all about raising the profile of rail engineering as a profession and providing students, companies, and especially SMEs, the chance to build the high-level skills required for the 21st century rail network. But I also believe that HS2 will provide a
huge opportunity to transform the way the whole supply chain works, and crucially how it thinks. Just as firms like Uber and Airbnb have transformed the way the taxi and hospitality industries work, I want to find the companies who will pioneer innovative new ways to drive cost out of the rail supply chain, while sharing our commitment to quality, safety and long-term value. These “disrupter” firms have been hugely successful in other areas – creating business models that previously simply did not exist, and shaking up the industry in the process. Most of them were SMEs that came out of nowhere, challenging established ways of doing things. The question is, who and what, will do the same for the rail industry? HS2 is the perfect opportunity for new thinking. With the exception of HS1, we simply haven’t built new rail in any great quantity in the country for more than 100 years. That’s why it’s so important that we get the brightest and best new thinking, in terms of training people through the National College for High Speed Rail and apprenticeships, and secure innovative new ways of doing things through our supply chain. It’s important because HS2 has the potential to be much more than just a railway. Instead, I believe it can be a catalyst for change across the transport and engineering sector, building British skills and expertise, transforming the image of the industry, and ultimately, helping to rebalance the national economy. Beth West (left) is commercial director at HS2 Ltd. Find out more about how your business can get involved with HS2 at www.hs2.org.uk/ business or email scc@hs2.org.uk
Business Technology · November 2015 · 17
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Top tips to help tradesmen get through the winter months
A
s the days get shorter and the weather gets colder, tradesmen face a specific set of challenges and risks. You’re also likely to find that your flow of customers changes, as people rush to get work done before Christmas, or encounter weather-related problems like burst pipes or broken boilers. With this in mind, the country’s biggest business insurance provider, Simply Business, has put together some top tradesmen tips for getting through the winter months unscathed.
work done. When you’re quoting for a job during the winter months, factor in the shorter days: a job that may have taken you a week when you could work into the evenings may now spill into a second week because you have to stop early. You may have to consider employing someone to ensure you finish on time, which means you will need employers’ liability insurance. This can be arranged quickly and easily through Simply Business, either online or by telephone.
Get kitted out
It’s tempting to continue outdoor work, for example on scaffolding or roofs, even when the weather’s bad, especially if you’re rushing to finish before dark. Instead, you should assess the risks carefully and consider taking a break or focusing on something else until conditions improve. If you do decide to go ahead, proceed carefully and make sure that any electrical tools you’re using are suitable for use in wet weather. Consider gloves with an anti-slip surface.
It’s worth investing in good winter weather clothing, especially if much of your work is outdoors. Check online sales to get affordable waterproof jackets and trousers, and get a set of fleeces to keep you warm. Buy decent boots with a good grip for wet or icy surfaces, or consider getting your existing boots resoled. If you’re working outside on dark winter evenings, remember your high visibility vests.
Adjust your working patterns If daylight is crucial for your work, then as the evenings darken you’ll probably need to start earlier each day to get a decent amount of
Avoid hazardous situations
Sort your tradesman insurance The risks that cold weather bring means that it’s more important than ever to have your
tradesman insurance sorted. The key cover here is public liability insurance, which can pay to cover compensation claims from a customer or another third party because you’re held responsible for death, injury, or damage to their possessions. This can be arranged through our quick and easy online form, or our friendly consultants are available to guide you through the cover you need. For example the bad weather means that you take a break from work, but you leave your tools lying around and someone trips over them and injures themselves. Or you slip on ice while tiling a roof and break a window. In each case you may have to pay compensation, and your public liability insurance could cover the legal costs and the compensation payment, up to the limit of your policy (apart from the excess, which is the part of the claim you have to pay). Simply Business offers from £1million to £10million of public liability cover, and you can build the insurance policy you need by adding extras like tool cover, which can replace your tools if they’re stolen or damaged. Twitter: @simplybusiness www.simplybusiness.co.uk
Managed logistics systems that are cost-effective, scalable and secure
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uccessful organisations are increasingly looking to leave the day-to-day running of their IT systems to a managed services provider so they can focus on core business. Dave Renshaw, CEO of OBS Logistics, explains: “We provide best-of-breed logistics systems for Transport Management (TMS), Warehouse Management (WMS) and total Supply Chain Tracking. Our managed services have grown to a level where 80 per cent of our services revenue comes from clients who use our systems as a fully managed service.” Businesses like to know we are responsible for the whole service – providing the software, customised to their requirements, with ongoing support and hosting and, most importantly, the fact that we operate our own private cloud from our UK ISO 27001 accredited data centres. So why are companies increasingly operating through a managed service?
• One Stop Shop approach – clients don’t want to manage multiple suppliers or worry about the division of responsibilities. OBS Logistics recently implemented its CALIDUS Total Logistics solution to the NHS Blood & Transplant service for Blood Distribution – a total IT-managed service to stringent service levels including integration with, and hosting of, third-party components. • With private cloud, clients know where their systems and data are
located – one of our major clients provides a distribution service using a CALIDUS WMS managed service for the Department of Justice. Knowing the data is in secure, resilient UK-based facilities which the DoJ audits is vitally important. • Rapid deployment – when a logistics firm took over an aggregates distribution contract for a major global manufacturer, we implemented a full CALIDUS WMS managed service within two weeks. • Avoid capital investment – one of the world’s largest logistics organisations uses our TMS and WMS for hundreds of users and millions of transactions. They add new customers into their managed service without the need for IT investment. They pay for the overall service based on usage with no unnecessary capital expenditure. • Avoid building and managing their
own computer facilities – OBS Logistics manages parcel tracking systems for major parcel distribution clients. When a client relocated they moved their different business systems into our data centres. Using this managed service they avoid wasting the space, time and cost of building and running their own computer facility.
freight business with overseas operations contracted with OBS Logistics for a CALIDUS Total Logistics solution to provide a web-enabled, 24/7 fully managed service. Its global customers are now able to track their orders in real time anywhere in the world through the CALIDUS Portal.
• Scalability with predictable cost – a multi-client third-party logistics firm, specialising in e-fulfilment services to fragrance companies introducing products into the UK, faced the challenge that these operations often start small and grow rapidly as they become established. Their CALIDUS e-fulfilment managed service solution costs are based on demand and enables them to expand while knowing exactly how much their service costs will be as their business changes.
Reliability is always vital to organisations that need continuous availability of their business-critical systems. Clients moving onto a managed services environment can receive a higher level of systems reliability thanks to the economies of scale from an established hosting facility providing affordable highavailability resilience. Dave Renshaw concludes: “We have long-term relationships with many organisations in the logistics marketplace, and we increasingly see how important cost-effective, scalable and secure managed services are to their success.”
• Support geographical coverage and customer needs – an Australian
020 7881 2500 www.obs-logistics.com
18 · Business Reporter · November 2015
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Five steps to help take on the challenges of a fast-changing business world
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unning any business is challenging, particularly in today’s increasingly regulated world. Directors needs to find the sometimes difficult balance between their commercial role and the delivery of shareholder returns on one hand, and the needs and expectations of customers, legislators and regulators on the other. To compound this challenge, the very nature of business is changing rapidly. The impact of operational failures, for example, traditionally could be contained internally with minimal reputational or external impact. In today’s connected world, such events are often instant headline news, generating immediate and sustained damage. “Risk Management” is often a phrase that conjures up a vision of a gang of sharp young things telling you how to run your business, and charging a healthy fee to do so. But it doesn’t have to be like this – after all, no one knows the business model and plans better than the people
4. Assign responsibility for material items to someone with the skills to manage them. 5. Monitor, re-assess, and manage the risks and issues that will arise on a regular basis.
who gave birth to the business idea in the first case. No one understands the underlying issues and risks better than the folk doing the work. Many business plans and mission statements articulately tell what needs to go right for a business to succeed. But very few demonstrate a clear understanding of what can go wrong. Many businesses are therefore unprepared for the inevitable bumps in the road that we all experience. In addition, in assessing potential risks,
new opportunities or innovative solutions can be identified. Genuine and tangible value can be created. Understanding risk is just as much about exploitation as it is avoidance. All that’s needed is for your firm to follow these five simple steps: 1. Understand the mechanics of your business model. Understand what levers drive the revenue and costs that underpin it, and the
assumptions and dependencies hard-wired into your forecasts. 2. Identify the things that can go wrong, and determine how to measure them. If you can’t measure it, it’s probably not important; 3. Assess the impact of these items under stressed (but realistic) scenarios. If you have a manufacture cost of £10 per widget, what happens if that increases to £11?
Businesses that genuinely embrace this approach will be better armed to deal with the challenges that arise, and equally importantly spot emerging market trends. They will also tend to enjoy closer and more collaborative relationships with their customers. Ultimately, those relationships are going to keep your firm ahead of those firms without them. The challenges are tough, but the rewards are potentially great. Crowe Horwath provides a tailored solution for the SME sector, offering pragmatic, real-world solutions to support a vibrant and essential part of the UK economy. 020 3457 7129 andrew.bird@crowehorwath.com
Business Reporter · November 2015 · 19
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The debate What will be the main challenges facing SMES in 2016? Tony Morgan Chief executive officer Verus360 Cashflow remains a key issue for SMEs. Increasingly, larger customers are imposing lengthy payment terms on suppliers, forcing many SMEs to navigate the complex, often expensive finance options available to them. Accessing finance remains challenging, with traditional lenders seemingly unable to meet the demand for business lending, although the alternative finance sector continues to widen the options available to SMEs. As many businesses discover, the true cost of borrowing is frequently much higher than the headline rate. Many lenders charge arrangement and/or management fees, and an array of charges, with interest sometimes charged regardless of whether or not the facility is used. SMEs are the lifeblood of the UK economy and deserve better. The positive reaction to Verus360’s pay-as-you-use finance and transparent pricing is clear evidence that businesses are increasingly looking for fairer finance. How quickly ‘fair’ becomes the norm for businesses borrowers remains to be seen. Tony.Morgan@verus360.com www.verus360.com
Kye Etherton Managing director Sugar Cube Productions The main challenges facing SMEs next year are: • The uncertainty around EU membership, which may lead to more volatile market conditions in the short term. • Cyber-security. With more large corporates falling prey to hackers, this is likely to affect consumer confidence, making consumers less likely to trust smaller companies with their details – if the big boys can’t protect themselves what hope for the small guys? • The introduction of the National Living Wage for over 25s. While this is a good thing for the economy, it could be challenging for smaller firms’ wage bills. Small companies may find themselves forced to choose between more costly experienced workers or cheaper newbies. Understanding the challenges faced by SMEs is important when it comes to providing expert marketing advice that shows a real ROI. At Sugar Cube we take time to understand the issues our clients face and work with them to tailor solutions that best suit their circumstances. admin@sugarcubeproductions.co.uk www.sugarcubeproductions.co.uk
Richard Norris SME director Bupa
Simon Conington Managing director BPS World The biggest challenge businesses face today is not having enough skilled staff. In some sectors the problem is so acute that it is threatening to hold back business growth – and the businesses with weak brands will struggle to recruit. Our research last year in our Total Immersion white paper found that organisations need to become the “employer of choice” – and to do that they have to get themselves noticed in a marketplace where skilled staff can be more selective about who to work for. What the company offers in its brand has to be matched by its human resources team. The two have to work together to ensure potential employees hear about the company, and then HR has to prove the benefits promised do exist. With social media there are no secrets about what it is like to work for a company. Disgruntled staff will let their feelings be known. +44 (0)1628 857 353 contact@bps-world.com
Bivek Sharma Partner, KPMG Small Business Accounting
We recently questioned 150 SME leaders who say that stress is the biggest emerging workplace issue. In fact, 53 per cent said that this is a concern for their business. The causes of work-related stress are broad. They may include and increase in business competition, work practices, tough financial targets or client expectations. Stress has a negative impact on everyone’s health, which in turn affects business success. Sound guidance and support on how to keep up with workforce demands (52 per cent stated this as an issue for their business) will be crucial for SMEs in 2016 if they are to increase their chances of success. In addition, business leaders need to themselves champion health and wellbeing in the workplace – of those we questioned, 43 per cent felt unable to do this. When a healthy work culture and healthy staff are at the heart of business growth, workplace stress should not be ignored. Yet of those business leaders questioned, 43 per cent felt unable to champion health and wellbeing.
Jeff Longhurst Chief executive officer, Asset Based Finance Association SMEs account for 60 per cent of UK private sector employment and almost half of private sector turnover. So let’s be clear what the question actually is – the challenges for SMEs are challenges for the UK economy as a whole. The general economic climate is key. The general stats look okay, but it does not feel that there is a lot of confidence out there at the moment. Businesses are not feeling empowered and confident enough to take advantage of the finance that is available to invest and grow. I think access to information about the options that are available, and which might be appropriate, is key to meeting this challenge. Invoice finance and asset based lending support UK businesses of all sizes and in all sectors, from start-ups through to corporates. But our industry could support many more businesses still. jeff.longhurst@abfa.org.uk www.abfa.org.uk
0808 271 4184 www.bupa.co.uk/business
Lee Perkins EVP & managing director Sage UKI
James Roy Poulter CEO Pronto
International trade will be a real challenge for SMEs over the next year. Many businesses have the appetite for cross-border expansion, but will need to implement the right strategies and processes to successfully import and export. From a competitive point of view, this could make all the difference to their success. On a more granular level, our upcoming research reveals that late payments, cash flow issues and decreasing demand are set to be the key concerns for SME business leaders. SMEs may also remain cautious about making significant investments in their business, as global economic uncertainty persists. There will be an increasing number of businesses with 30 employees or fewer affected by pension auto-enrolment in 2016. While large companies have departments dedicated to dealing with these changes, small employers with little experience of pensions may find it difficult to deal with implementing the new scheme. They also need to think about the impact autoenrolment will have on their fee forecasts and budget appropriately.
Money management has throttled growth for many businesses who struggle to handle the flow of cash in and out of their organisation, and this challenge will continue into 2016 and beyond. Simply making payments to their suppliers and employees has been a significant drain on time for small and medium businesses, with our research showing that many spend over eight hours a month processing payments. At Sage we asked a simple question: how could we empower SMEs to move their money more effectively? How could we break down age-old financial processes and revolutionise how businesses make payments and control their cashflow? The answer is Sage Payments, a payments solution that integrates with our Sage 50 Payroll, Sage 50 Accounts and Sage Instant Accounts products and enables SMEs to manage and make domestic and international payments straight from their software. We’re proud to empower small businesses across the UK and redefine how they move and manage their money.
Having a great idea and the passion and drive to build something from scratch is the baseline for business success. However, the biggest challenge SMEs face in 2016 is how to move from the start-up phase to taking the next step – namely, running a well-managed and scalable business. Critical to this is finding the right suppliers. Many SMEs may be surprised to know KPMG has a specific accounting service just for small businesses. But for me, selecting KPMG as my accountant has made a massive difference – they’ve taken away the time and hassle involved in bookkeeping and tax returns, which has freed me up to work on growing Pronto. They’ve also connected me to other businesses from their wide network of contacts – invaluable for support and advice. Making good choices on supplier selection is integral in ensuring that Pronto is ready to take that next step in 2016, and move closer to our goal of becoming the world’s default food delivery service.
0800 028 1028 accounting@kpmg.co.uk
0800 923 0343 www.sage.co.uk/payments
07817 532859 james@pronto.co.uk