Supporting SMEs

RENÉ CARAYOL Disruptive technology is no longer just about the geeks

SIMON ASHBY Why SMEs should be a great source of British innovation

ENJOYING LIFE WITHOUT A SAFETY NET On the road with Emma Sinclair, shortlisted for the UCL/Business Reporter award

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The entrepreneur’s entrepreneur Luke Johnson’s amazing CV includes…

Risk Capital Partners Pizza Express Channel 4 Signature Restaurants Strada StartUp Britain Centre for Entrepreneurs Patisserie Holdings Eclectic Bars Feng Shushi 3Sixty Restaurants Genuine Dining Ten Alps …but he still found time to talk to Business Reporter

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Opening shots René Carayol

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URING ANOTHER two weeks of challenging travel, I visited Pune in India, Jeddah in Saudi Arabia, Johannesburg in Sout h A f r ica and Washington DC in the USA. They could not be more different and my body clock is all over the place.

However, there were some striking similarities between all of them. The first thing we all noticed was the prominence of Uber in all the cities we visited. Not only were many (young) people using the service but we also couldn’t help but notice the rise of the freelance worker in all the places we visited.

A recent visit to Silicon Roundabout, back home here in London, shows that this approach of access to the right talent “on demand”, is starting to take traction. The building we were visiting had many start-ups resident on various floors, but they were in the main thinly staffed. Looks can be misleading, as most had the majority of their workforce working “elsewhere”. Many working from home, but some working on other company’s premises.

In San Francisco, a growing group of entrepreneurs are striving to do the same

Publisher Bradley Scheffer | Editor Daniel Evans | Production editor Dan Geary

The vibrant and inclusive on-demand economy is no longer just about the geeks to services, bringing together computing power with freelance workers to supply luxuries that were once reserved for the wealthy. Uber provides chauffeurs. Handy supplies cleaners. SpoonRocket delivers restaurant meals to your door. Instacart keeps your fridge stocked.

This doesn’t stop at luxury goods. In fact this might be the biggest change in the way we all work for many years. The US Census Bureau in 2012 found that 33 per cent of the US workforce are freelancers (53 million). They will grow to 50 per cent by 2020 – 75 per cent of total US businesses, amounting to 22 million, have no paid employees.

This movement will not go away but, much like the working revolution that the march towards mass production created,

it has profound implications for everything – from the organisation of work to the nature of the social contract in a capitalist society.

There are two compelling forces that are accelerating this, and pushing it into ever more parts of the economy. The first is obviously the ubiquitous disruptive technology. Cheaper computing power means a lone creative tied to their Apple Mac can create broadcast-quality videos at a small portion of the huge costs of the Hollywood studios.

But it’s no longer just about the geeks.

Complex tasks, such as writing a legal brief, or preparing financial accounts, can now be divided into their small compact modules, and then subcontracted to specialists, who could be working from anywhere in the world.

The other massive driving force is our changing social habits. The world is being further subdivided between those who have money but no time, and those with time but no money.

The v ibrant and inclusive nature of the on-demand economy provides a way for enabling these two groups to trade with each other – no matter where they choose to reside.

There was a time when the organisation chose the talent – but increasingly today, the talent is capable and brave enough to choose the organisation.

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Small firms more vulnerable to cyber-attack, says PWC Small businesses: How to get the basics right about cyber-security

By Joanne Frearson SMALL BUSINESSES have been soft targets when it comes to cyber-crime, and lack of knowledge and awareness about cyber-crime has made SMEs victims of attacks, claims a recent report published by PWC. According to the 2015 Information Security Breaches survey, 74 per cent of SMEs experienced a security breach that year, up from 60 per cent a year ago.

Breaches have been costly for small and medium-sized organisations. The survey showed the average cost to small business was between £75,000 and £311,000, up from £65,000-£115,000 a year ago.

Other reports by the US National Cyber Securit y Alliance found that 60 per cent of small companies that suffered a breach went out of business six months after the attack.

Speaking at The European Information Security Summit 2016 Patrick Nuttall, head of the London Digital Security Centre, said: “There has been a huge increase in social engineering techniques to trick people into giving out their credentials. Small businesses are being targeted because cyber criminals want their IP.” In October 2015, the London Digital Security Centre was launched following a key recommendation in the mayor’s Business Crime Strategy to protect London’s micro- to medium-sized businesses

Use strong passwords

Use strong passwords made up of at least three random words. Using lower and upper case letters, numbers and symbols will make your passwords even stronger.

Download software updates

Download software and app updates as soon as they appear. They contain vital security upgrades that keep your devices and business information safe.

Use anti-virus software

Your computers, tablets and smartphones can easily become infected by small pieces of software known as viruses or malware. Install internet security software on all your devices to help prevent infection.

Train your staff

Make your staff aware of cyber-security threats and how to deal with them. The government offers free online training courses tailored for you and your staff which take around 60 minutes to complete.

Delete suspicious emails

Delete suspicious emails as they may contain fraudulent requests for information or links to viruses. against cyber-risks and threats.

Nuttall said: “SMEs are not getting the support from law authorities to address these risks. We do a lot of community engagement work and work with law enforcement to set up

a threat intelligence unit.”

According to Nuttall there are free resources available to businesses, such as Barclays’ antivirus software. There are also schemes such as the UK Government Cyber Essentials

Applications for SME loans on decline, says BBA

THE NUMBER of applications from SMEs slowed in 2015 in the fourth quarter by 13 per cent for loans and by 9 per cent for overdrafts compared to 2014, according to figures from the British Bankers Association (BBA), while cash holdings rose by 7 per cent.

The level of cash held by SMEs in current and deposit accounts totalled £164billion at the end of 2015.

Mike Conroy (pictured), managing director of business finance at the BBA, said: “While alternative products such as leasing and invoice discounting are playing an increasing part for SMEs, the fact that their deposits are growing by 7 per cent annually means that the need for external finance has been lessened.”

However, for those SMEs that applied for loans or overdrafts the approval rate was high and totalled £6.2billion for the fourth quarter. For smaller businesses, the approval rate was eight in 10, while for medium businesses this rose to nine in 10.

Net lending in 2015 was £2.1billion, which was the first increase since the series began in 2011.

Conroy said: “The fact that more than £6billion of new lending was approved quarterly last year and that there was positive net lending across 2015 are encouraging signs.”

scheme which give great advice to businesses. Nuttal believes employee awareness is crucial, as they are normally the first line of defence when it comes to protecting against cyber-attacks.

More backing for Scotland SMEs SMEs are to look at ways of developing a circular economy through a £18million fund. Zero Waste Scotland, backed by the Scottish government, will work with Scottish Enterprise and Highlands and Islands Enterprise. The funding will be focused on the bio-economy, the built environment and energy infrastructure. Iain Gulland of Zero Waste Scotland said: “Our fund is available to help all sorts of small to medium size organisations to not just stay ahead of the curve, but shape that curve.”

Future-proof your business!

Customer service strategies for 2020 and beyond For more information and to register, go to www.customerfocuslive.com

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MALL TO medium-sized enterprises have long formed the backbone of t he Br it ish economy.

According to statistics from t he Depa r t ment for Busi ness Innovation & Skills released in October last year, SMEs are responsible for 60 per cent of all private sector employment in the UK (15.6 million people), they account for 99.9 per cent of all private sector businesses, and are responsible for 47 per cent of private sector turnover (£1.8trillion).

Their importance is increasing, too.

The Federation of Small Businesses (FSB) reported the number of employing businesses increased by 35,000 during 2014-15, making the actions of these companies crucial in terms of the health of the national economy.

And yet, while this figure represents an annual growth of more than three per cent, SME performance over the same period has suffered. According to the 2015 All Party Parliamentary Small Business Group report, UK productivity (as measured on an output per hour basis) was 17 per cent lower than the G7 average in 2013 – the widest gap recorded since 1992. Output per worker was 19 per cent lower, giving SMEs in the UK the lowest level of labour productivity in all of the G7, with the exception of Japan.

Of course, there are lots of reasons why this might be. Red tape is one, as is the scourge of investment-choking late payment. Firms with 10 staff or fewer are collectively owed more than £16.9billion at any one time, according to research carried out

by Intuit QuickBooks.

At Bupa, we feel there is a bigger problem at the heart of all this: poor employee health and rising levels of stress and anxiety, which is further fuelled by today’s “always on” economy.

The workplace has undoubtedly become a much safer place in terms of rates of accidents and even deaths, but increasing numbers of hours put in by staff means five million adults now spend more than eight hours a day sitting down.

And when away from their desks, 44 per cent of British adults admit they don’t take part in any moderate exercise – which puts the population’s fitness levels at among the worst in Europe, according to a recent British Heart Foundation study. Long hours spent in front of a screen are already contributing to a much-documented obesity crisis (which in turn is responsible for 738 new cases of type two diabetes per day, or more than 280,000 a year, according to Diabetes UK). This sedentary lifestyle can result in a number of musculoskeletal conditions – from inflammation of the joints to osteoarthritis – ailments and injuries that can lead to sick days and lost productivity.

How SMEs can spark performance improvement The British economy relies on the productivity of small and medium-sized enterprises, but does the modern-day office enable employees to perform to the best of their abilities? We take a look at what SMEs can do to ensure the health and wellbeing of their workforce Aside from physical illness, it’s the changing nature of work that currently has the biggest impact on an employee’s ability to perform. Fewer resources creates more pressure, meaning workers are now more likely to be off work due to stress and mental health issues. Reports from the likes of recruiter Blue Arrow talk of the “overwhelmed employee”, where being busy is a badge of honour and disconnecting from devices simply isn’t a possibility.

With fewer administrative processes than larger corporates, it could be argued that SMEs are some of the bestplaced employers to start solving these problems. However, a report by the Chartered Institute of Personnel and Development (CIPD) demonstrates that there is a high awareness of the impor tance of health, but a stubborn “ implementation gap” bec ause ma nagement ’s perception of wellbeing doesn’t fit organisational strategy.

That’s why it’s vital for SMEs to link wellbeing to their own individual business needs, but it also has to be altruistic so it’s not perceived as being pushed on staff. The wellbeing plans that get the best buy-in are those that respond to what employees want. One firm might have stress-related absence, another might offer later start times to help with the school run, or pledge to cut their staff’s sugar intake by providing nutritious snacks.

One wellbeing strategy that increasing numbers of SMEs are adopting is the promotion of a realistic work-life balance. This means affording flexibility around staff working hours and enabling employees to work remotely by providing them with mobile devices such as tablets and smartphones. That said, with the ability to work wherever and whenever, the pressure to answer emails outside office hours has never been greater, so you need to be clear that being connected doesn’t mean having to be constantly on call.

Other initiatives, such as supplying weekly fruit baskets, and offering access to regular health checks and support benefits such as employerfunded health cash plans, are also gaining traction. These strategies should form part of a company’s authentic culture. It must be considered an underlying approach that continues indefinitely, not just for a few weeks, if we are to see a positive and sustainable impact on productivity. And the good news is that future employees will increasingly expect wellbeing to form part of a firms’ make-up, and will be driving the agenda as much as government policy makers.

Staff increasingly want welldesigned offices – those with break-out spaces where they can eat and converse, and plenty of natural light – which is a good first step to creating more restful working environments. They’ll also be more forthcoming when it comes to asking for flexible working hours (a right they’ve had since 30 June 2014).

Firms can now only refuse this request for genuine business reasons.

When wellbeing does form part of a company’s true DNA it’s proven to

have an impact on business success, which means SMEs no longer have a reason not to take it seriously. Good wellness programmes don’t just reduce sickness absence, they are proven to boost engagement and create more collaborative working cultures.

In recent years British Gas’s wellbeing initiatives have been instrumental in reducing staff absence by 12 per cent and achieving a 25 per cent reduction in staff turnover, and there is no reason why SMEs can’t profit from similar results. Wellness is good for organisations, good for employees and good for the economy as a whole.

There has never been a better time to engage with the wellness agenda.

The DWP estimates that by 2024, nearly 50 per cent of the adult population will be 50 and over, meaning age-related wellness programmes will become increasingly important for staff health and productivity.

In addition, employees are working beyond the traditional retirement age – so SMEs that create a recruitment brand out of their wellness policies stand to benefit from highly engaged and highly committed – and ultimagely more productive – staff. Can you afford to ignore wellness? Absolutely not.

Richard Norris (left) is director, small mid corporate at Bupa 0808 271 4184 www.bupa.co.uk/business

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Enjoying life without a safety net Joanne Frearson talks to Emma Sinclair, one of the nominees shortlisted for the UCL/Business Reporter award, about how there’s more to entrepreneurship than business

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ECOMING AN entrepreneur was always in Emma Sinclair’s veins.

As a young child, she loved to hear the stories her father told her about how he built a business.

She would read the back pages of the FT to check the share prices of his companies, and would listen intently at family dinners when conversations focused around business.

Nothing could convince Sinclair to swap the entrepreneurial path for anything else, so after a stint as an investment banker she decided to break out on her own.

Her achievements since have been impressive – by the age of 29, she was the youngest person in the UK to take a company – Mission Capital – public. Her current day job is as co-founder and managing director of global software company EnterpriseJungle, and she was also a founding partner in health and wellbeing club Wakeman Road (a venture she has subsequently exited).

But what is just as inspiring about Sinclair is her drive to give back to the community and help others with her business skills. At the age of 21 she became a governor of a beacon status school in an economically challenged council estate in Southwark, and she is also currently UNICEF UK’s first business mentor.

Her work has not gone unnoticed and she has recently been nominated for the inaugural UCL/Business Reporter Medal for Entrepreneurship, which honours entrepreneurs who have used their skills to provide opportunity for others. Sinclair tells Business Reporter: “Teaching basic business

skills can change the course of someone’s life, even if applied only to a hobby, personal passion or your job in a large enterprise.

There’s an opportunity to do that every day.

“I do my best to speak at schools and incubators – places where there are young minds in the process of making decisions that will impact their life and where they might not have exposure to people they can ask questions about business.

Equally in large enterprises, encouraging entrepreneurial thinking is critical.”

Last year, Sinclair went to Zambia with UNICEF, where she met with and mentored aspiring young business people across the country. She was part of the Building Young Futures programme, which aims to unlock the potential of disadvantaged young people by providing them with the skills, knowledge and confidence they need to set up their own business or find work.

“I get as much excitement hearing someone smart and passionate share ideas as being able to impart some thoughts that might help,” she says. “We all need a bit of encouragement and inspiration and I think entrepreneurs can be well placed for that – because, by nature, most successful entrepreneurs are optimists.

“I meet young people in environments where I would find it difficult to thrive without the tools and digital access that so many of us have become accustomed to, who are eager to learn and already showing promise. That’s really uplifting.

“By sharing in and supporting their journeys and those of aspiring young

How the numbers add up for UK social enterprises

49%

of all UK social enterprises are five years old or less

40%

of social enterprises have a director with a disability

31%

work in the top 20% most deprived communities in the UK

59%

employ at least one person who is disadvantaged in the labour market

44%

sought funding or finance in the last 12 months

40%

of social enterprises are led by women State of Social Enterprise Survey 2015

Working with UNICEF in Zambia, Sinclair brought her business acumen to aspiring business people

entrepreneurs wherever I find myself, I am playing a very small part in improving skills that can help make positive change.”

Sinclair has plenty of advice for people wanting to start their own business, but warns there is no “secret sauce”, and that setting up your own business is not for everyone. “Entrepreneurship is often deeply tied to a type of survival – many of my peers may not relate to it, but I sincerely can,” she says. “When you don’t have the safety net of family or a salary, pension and healthcare, the outcome of your business directly affects your ability to eat.

“Much like builders in your home, building a business – certainly one that has scale – takes longer than you think. Work out why you want to start a business and be honest with yourself about whet her you have t he

perseverance to weather the long road, as it’s really not for everyone.

“There are many entrepreneurs, myself included, who would say that building a business is like betting all your chips on red every day – for weeks, years and months.

It’s a long road – but when you win, it is so rewarding.”

Sinclair has worked across the company spectrum, at the IT helpdesk, and as cleaning lady and CEO – her first job where she learned about ear ning money was at McDonalds. She now feels her obligation is to give back and to teach others skills which could potentially change their lives. She has already helped many and as her work continues she will hopefully help many more.

it’s a stick up!

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Joanne Frearson talks to Rachel Verghis about marketing a phone case with attraction

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HILE TRYING TO KEEP her iPhone out of the way while her son played in the nursery, Rachel Verghis hit on an idea for a literal hands-free case that enabled you to stick your smartphone to most smooth surfaces. And, after discovering a material which could stick to glossy surfaces, she dived straight in with her own smartphone case company, Goo.ey. But when she finally launched the company in June 2014, sales did not take off. She sold just five colours and had little success – until an innovative idea turned her fortunes around.

Meeting Verghis at The Arts Club in Mayfair, she tells me: “Growing the business was not

overnight. I would definitely say the business is still in its infancy. I spent about a year making every mistake in the book. I did not have the experience.

“I really had to learn very quickly the other side of it. How to market a proper product? How to build something in a totally saturated market?

I could not have picked a worse market – I don’t know why I thought it was going to be easy. If my case grew wings and flew tomorrow it would still be competing with 600 other ones.”

Under pressure by her backers to start making money, Verghis had to think creatively or risk having her funding pulled. She thought

everything that was missing in the case market was what she loved contemporary art and design – so, by using her connections in the art world and fashion industry, she managed to get artist Ai Weiwei and shoe designer Sophia Webster on board to design phone cases for Goo.ey.

“I wanted great design by really good designers, but affordable,” says Verghis. “Sophia Webster shoes are £400 or £500, but you can have a case designed by her for £24.99. That was the kind of angle I was aiming for.”

However, her project with Ai Weiwei did not go quite as planned. Although she describes it as the “most amazing thing I have ever done,” it was also, she tells me, a “total commercial flop.”

The Ai Weiwei cases were a series which portrayed 176 prisoners of conscience, but the only ones that sold were those featuring better

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known figures such as Edward Snowdon and Martin Luther King. Some of the less popular cases are still sitting in storage. “But without a doubt it was one of my most favourite projects to do,” Verghis says. “[Ai Weiwei] has given us two other projects, which I will launch shortly.

I was really happy with that – it really opened the doors to the art world, and we have had a lot of talks.”

The other cases, created in collaboration with artists such as Sophia Webster, have sold well, however, and Verghis now has collaborations with fashion designer Henry Holland, artist Blair Chivers, swimwear designer Melissa Odabash and former Made In Chelsea star PhoebeLettice Thomson.

By being innovative Verghis was able to tap into a market area which was previously little

Science foundation CEO scoops everywoman

By Joanne Frearson JELENA ALEKSIC, CEO and co-founder of GeneAdviser an online marketplace for genetic testing, started the company while she was working at Cambridge researching Dubowitz syndrome, a rare genetic disorder.

Spotting a gap in the market for information regarding the testing of rare diseases, her business has now made it easier for people to get diagnosed with these conditions. It has grown significantly since launch and Aleksic has just been the winner of the 2016 FDM everywoman in Technology start-up founder award.

“I was inspired by the fact that a lot of rare disease research was driven by patient’s families,” Aleksic tells me after receiving the award. “A lot start up their own charities and own companies.”

Through her research she discovered a problem with the early diagnosis of rare diseases. The average diagnosis time in the UK is six years and worldwide it is even longer. Although there is genetic testing for rare diseases, she explains that doctors were not that aware of them.

“We found a lot of tests were not being listed online,” Aleksic says. “Doctors had to do a lot of manual work in order to find these tests. A standard process for a doctor would be to maybe hear about these tests from a conference or colleague

Jelena Aleksic has won an everywoman award for her work developing a genetic testing marketplace

and then phone up a number of different labs to find out whether they do the test and how much it costs. This was a time consuming process that the doctor had to go through in order to find the tests.

We wanted to solve this by putting all the information in one place and making sure it was reliable and high quality, as well as making sure that we were listing some of the highest quality providers.”

To make it easier for doctors to find tests for their patients, Aleksic and her co-founder Dr Robert Stojnic came up with the idea of an online marketplace for genetic tests. It works as an online portal which puts doctors in touch with specialist laboratories that can perform tests for their patients.

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info@lyonsdown.co.uk Below: Rachel Verghis combined her innovative smartphone cases with her love of art

SMEs: the engine of innovation?

EXPERT INSIGHT

Simon Ashby

touched. She is continuing to be innovative in her work, especially when it comes to the millennial generation as they are one of her target markets.

She says: “It is really engaging how the millennials shop, farm for information, decide their products and obtain their products.

We have had to plug into every single bit of this.

“We have had to build and refine over again an extremely fast website. We have to be on all the relevant marketplaces. We have to be on all the relevant social media platforms. I am launching 21 websites across the world in nine languages and trying for Google certification of the store,

which means I have to get Google to certify that this is a proper store to buy from.”

The phone case firm presently operates in six marketplaces on Amazon’s website. It is also sold in department stores such as Selfridges.

Goo.ey will be showcasing its products at the Millennial 20/20 Summit held in April, which looks at trends in this market. For the event Goo.ey has created a gigantic bug case based on one of Henry Holland’s designs.

By being innovative Verghis has created a successful global business. What once started as an idea to put her iPhone out of the way when her son is in the nursery is now being used by people all over the world.

For more information see the Millennial 20-20 website at millennial20-20.com

start-up award She says: “We recently launched a website earlier this month, which has been piloted and developed with the Genetic Testing lab in Edinburgh and Cambridge. We are now bringing other labs onto the system and building up the marketplace end of it. We are raising awareness of the system among doctors and also interviewing them to see what type of information is helpful to them and how we can optimise the process so it is most useful to them.”

To help get GeneAdviser up and running, Aleksic has been involved in support programmes such as Accelerate Cambridge at the Judge Business School, as well as Social Incubator East, which supports social ventures.

Her advice for others wanting to start up a business is to keep going step by step. “Think what are the first steps you need to make this happen, go and do those, see what happens, see how it goes, learn from it and just keep persevering. “For example, when my co-founder and I started the company we were both still working full time for the first year of it, as we wanted to build up a solid business case without having to seek investment and put very much money into it.

“As the business started taking off we gradually started cutting back our working hours. We finally went full time when we knew we had something really solid. Money can be a barrier,

but often the barriers can be psychological as well and people could be building up their businesses in their spare time until they are ready to go full time with it.”

The business has been highly successful since inception and since having won the everywoman start-up award, Aleksic sees a lot of untapped potential for women in technology, but feels more could be done to encourage more women into the sector.

“There are a lot of changes that could happen in the tech industry to make it more welcoming and more inclusive for females,” she says. “The visibility of role models is one of the big issues that are very easily addressed.”

IT WAS PERHAPS because Britain was a “nation of shopkeepers” – or more accurately, a nation of small to medium sized merchant enterprises – that by the 18th century we were leaders in business innovation. Trade and commerce breed innovation, both to open new markets and achieve a competitive edge over one’s continental cousins. And the biggest innovation of all, the Industrial Revolution, ensured that Britain was almost unbeatable – though the Industrial Revolution helped many merchant enterprises to grow quickly beyond the standard SME limit of 250 employees.

Fast forward to the 21st century and our small island nation still relies on innovation to remain competitive on the world stage. Only now the secret of our success is primarily post-industrial, with businesses in the service and high-technology sectors continuing to grow in importance.

Of course “big business”, whether post-industrial or not, remains crucial to the UK economy. But with SMEs accounting for 99.3 per cent of private businesses in the UK, they are a large potential source of innovation.

SMEs have some big advantages when it comes to innovation, but also some major drawbacks. On the one hand they combine specialist knowledge and experience with agility – allowing them to develop highly original products, services and processes quickly. On the other hand they can lack finance, management skills and the marketing knowhow and brand loyalty necessary to exploit innovation opportunities. Perhaps that is why, according to the latest UK Innovation Survey (2013), 50 per cent of larger firms were described as innovation-active, compared with 45 per cent of SMEs. So what can be done to help make our SMEs more innovative? Access to funds and the ability of a small business to turn innovative ideas into a healthy profit are obvious issues.

One important initiative is the EU’s Horizon 2020, an €80billion project which includes the provision of finance for innovative SMEs and which also works to improve their

“innovation capacity”, to ensure SMEs have the necessary business skills to convert their ideas into hard cash. The UK government would of course also claim to be supporting SMEs, but from what I can tell its strategy for fostering innovation is much less coherent – something that will need urgent rectification in the event of Brexit, if UK SMEs are to keep up with those in the rest of Europe.

However, there are also other less obvious areas. One thing I noted in the 2013 UK Innovation Survey is that SMEs are far more likely to innovate where they have degree-educated staff, especially where these degrees are in science and engineering. Given my day job as a university lecturer, this is immensely reassuring. But in the UK the popularity of science and engineering degrees has decreased in recent years and it is clear that more needs to be done in schools, colleges and by the government to encourage students into more technical subjects.

My own discipline of business management also helps less than it should – with little in the curriculum focused on enhancing the innovation capacity of graduates.

Another less obvious factor is innovation centres. Again in the UK Innovation Survey, I noted that the East Midlands and the South West are doing especially well. Having lived in both, I suspect one reason for this has been the development of SME Innovation Centres, something in which my home county of Cornwall excels (see www.cornwallinnovation. co.uk). Such centres combine academic connections with access to business skills, superfast internet and on occasion finance to provide the ideal environment for SME growth.

We need more innovation centres, and since many have relied on EU funding, this is also less likely in the event of Brexit. I find it rather ironic that while UK SME innovation in the 18th and 19th centuries made us the major European power we are, today it is the EU that is continuing to support this innovation. In the debate on the EU referendum I very much hope that this point is not lost in the rhetoric coming from both sides.

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EXCLUSIVE Joanne Frearson

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MEET LUKE JOHNSON at the Mayfair Hotel. He has a glass of champagne in hand and is smiling and mingling with the crowd who are all there to celebrate Britain’s most successful philanthropists, investors, mentors and entrepreneurs that have been honoured in the Maserati 100 list.

The list, compiled by Maserati and the Centre for Entrepreneurs – which was founded

by Johnson – recognises 100 entrepreneurs who have also generously supported the next generation of business people.

Johnson’s experience as an entrepreneur is wide-ranging and impressive – he is the man behind some of Britain’s best known restaurants, bars and patisseries in particular.

When he took control of PizzaExpress in 1993, he grew the business from 12 owned restaurants to more than 150, taking the share price from 40p to 900p in the process. He is also the former chairman of Channel 4.

His current interests include being partowner of Patisserie Holdings, which has grown 30-fold after he took control nine years ago.

He is also the chairman of private equity house Risk Capital Partners and chairman and coowner of London bar chain Grand Union, Majestic Bingo and Small Batch Coffee.

“Starting a business is probably not for the faint hearted,” Johnson tells me at the event.

“Obviously you can be self-employed and freelance, but if you are intending to be ambitious and grow a company you need to have a bit of a risk appetite.

“You need to have high energy, you need to be confident, you need to have self-belief, you need to have a capacity for hard work and you need to have a degree of selfishness.

Capital should not be a barrier to entry, because a lot of new businesses these days do not require a lot of investment.

“The whole digital revolution has made it easier and quicker to test ideas and experiment and get it wrong and correct it – or ‘pivot’, as they say in Silicon Valley!”

Johnson believes that e nt repre neu r s h ave a n important role to play in society as well as business, and are a big contributor to economic growth. He himself uses his experience to help other people who also want to create a business.

In 2012 he was appointed chair of StartUp Britain, the national campaign to stimulate start-up growth in the UK, and in 2013 he launched the Centre for Entrepreneurs – an independent non-profit think tank which promotes the role of entrepreneurs in society.

The Centre for Entrepreneurs research demonstrates the economic importance of entrepreneurship to a thriving society. These have included reports on how enterprise helps the economy, from reviving seaside towns via

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The big interview Luke Johnson

Entrepreneurs are not sheep.

They are willing to ignore the hubbub and have their own vision for success

entrepreneurships to shattering the stereotypes about female entrepreneurs.

Johnson is adamant about the importance of small-scale entrepreneurialism to the UK economy. “Frankly, there is one player in society who creates those jobs, and it is not big companies,” he says. “The majority of new jobs in this country were created by companies

employing 50 people or fewer. I obviously b e l ie ve i n t he w hole c onc e p t of entrepreneurship, and I do think there is a cultural shift going on in the UK towards self employment. The numbers have suggested there are more than 4.5 million people working for themselves. It is a very exciting time.”

In recognition of his promotion of entrepreneurs, Johnson has also been shortlisted for the UCL/Business Reporter Medal for Entrepreneurship, for entrepreneurs who uses their skills to promote enterprise and provide opportunities for others.

Johnson also helps inspire others wanting to start up a business through speeches, his

national newspaper columns and books.

“I talk to lots of people who are thinking about starting a business,” he says. “I tell them to go for it, because of their boldness. Be they inventors, be they financiers… whoever they are, the more entrepreneurs the better.

“Society will be busier, more innovative, happier, more productive, more fulfilled. The bottom line is, entrepreneurs create jobs – and I see one of my roles in life as to encourage entrepreneurship.”

That includes encouragement when times are tough – Johnson believes it is important to press on when things get hard. He explains that problems can range from falling out with

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The CV: Luke Joh nson

• Chair of more th an 20 companies, including private equity house Risk Capital Partners, di rector of media company Ten Alps and stockbroker Ar den Partners.

• Part-owner of Pa tisserie Holdings, Bread and bar/ restaurant chains Feng Sushi, Eclectic Bars, 3Sixty Restaurants and co ntract caterers Ge nuine Dining.

• Chairman of Chan nel 4 from January 2004 to January 2010, where he ap pointed a new CEO , restructured the board and saw record ratings and revenues.

• Chairman of Pizz a Express in 1993.

He sold out in 1999 and started Signatu re Restaurants, whi ch owned The Ivy, J.Sheekey, Le Ca price and the Belgo bar chain.

• Esablished Italian restaurant chain St rada in 2000, taking it to 30 units and selling the busin ess in 2006.

• Philanthropic inte rests: chair of The Institute of Cancer Research, StageO ne, StartUp Britain , Career Colleges and governor of Th e University of the Arts London (2000-06). Co-fo under, Centre for En trepreneurs.

Luke Johnson was nominated for the 2016 UCL/ Business Reporter Medal for Entrepreneurship at the end of last year

Luke Johnson has forged a successful career across many industries, from restaurants and bars to TV channels and stock trading

partners, falling ill, running out of money and not generating any sales to suffering fraud, suppliers going bust, customers going bust, cyber-crime and the disruption which comes with moving premises or products that do not work and employee litigation. There are an infinite number of hurdles and problems that can crop up.

Nevertheless, Johnson counsels against worrying too much about failing. “The biggest single issue would be generating sales and the practical consequence of things going wrong in a business generally,” he says. “The risk is [always] of running out of cash and going broke, but I always say how bad can it

get? It is not really that bad – I have had a number of businesses that have failed. I have survived. I always encourage entrepreneurs to avoid giving any personal guarantees if possible, so they will not go personally bankrupt.”

Indeed, Johnson believes persistence is an altogether more valuable quality than getting it right first time. “To encourage other

“The digital revolution has made it easier to test ideas, experiment, get it wrong, and correct it”

entrepreneurs in early stages to press on is really important. It is almost as important as money. Most problems can be overcome in time. I said at t he beginning t hat [entrepreneurialism] is not for the fainthearted, so those who try need to be resilient, but I believe the rewards are worth it. I don’t just mean financially – I mean the satisfaction of having achieved something on your own and getting the credit for your effort.

“People have time to say to would-be entrepreneurs, you can do it, don’t give up, there are opportunities around the corner, try this, try that. But a lot of entrepreneurs are not sheep. They take a different view and

they are willing to ignore the hubbub and have their own vision for success and follow that through.

“It is also about moral courage – explaining to them, yes, you have had set backs, you have had things that have not worked, get over it, life goes on, the worst generally does not happen. Do not despair. These are very important messages to get out.”

It is these traits which have arguably turned Johnson into the successful serial entrepreneur he is today. He attributes his success to having a strong role model early on in the form of his similarly self-starting father – who he says seized the opportunities when they arose and focused on those priorities as well as luck.

“Having a relatively early role model, who did not work for someone else, who did not feel the need to work nine to five and was willing to take a risk, is quite important,” he says.

At the Maserati 100 event, the crowds have started to gather to celebrate those 100 entrepreneurs recognised for helping others.

Johnson, champagne in hand, goes back to mingling with his fellow entrepreneurs, no doubt inspiring others who wish to follow a similar journey and create a business which also gives back to society.

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The new economy: how small makes big work wonders We might not be wearing spacesuits but the economic landscape has changed so much we could be on another planet

W

E’RE NOT wearing spacesuits, but the fact is, the future is even more futuristic than we could have imagined last century. And the technology and social media that’s now commonplace hasn’t just affected the way we go about our everyday lives – it has given rise to a new economy. It’s nothing short of a revolution that we are living through: one where the established rules of markets are being turned upside-down.

One implication of this is the changing relationship between small enterprises and large corporations. The competitive landscape has levelled to such an extent that small businesses can compete with established companies in very different ways. Which, in turn, is leading to increasing disruption in the way markets operate across all sectors of the economy. It’s not about to stop, either. Further advances in technology as well as rapidly changing consumer behaviours will only accelerate change in the coming years.

This is an exciting dynamic but one that requires large businesses to adapt. They can no longer rely solely on their scale and brand to maintain a competitive advantage and growth trajectory. And at the same time, small businesses are becoming increasingly attractive employers, as they tend to allow employees to innovate and be creative – a more appealing prospect than the traditional working life offered by large businesses. It could be the perfect storm – and a threat to the long-term success of larger businesses, unless they consider how to embrace this changing dynamic.

So how can businesses adapt – and benefit? By large businesses being willing to tap into the agility of small businesses and create new partnerships that benefit both companies. The rise of entrepreneurialism in the new economy is increasing the opportunity to work with small businesses.

They often bring a new solution to an existing business problem, and in turn help larger businesses to improve and deliver results more efficiently. For this to happen, the larger organisation needs to accept that not everything needs to be done in-house, and with existing resources. Likewise, it’s important to look beyond working with strategic partners, who may only reinforce existing outdated processes and methods of delivery.

At Standard Life we recognise just how important small businesses are to the future prosperity of society, which is why in July last year, we commissioned an independent research survey to find out more detail. We spoke to 500 business leaders – with job roles of director or above – alongside 1,000 employees – a crucial cross-section of UK enterprise (you can read the full report at businessandsome.co.uk).

The big themes that emerged in the report are the fundamental trends of collaboration, empowerment and adaptability, and these are identified as central to growth over the next five years. It’s clear an agile business approach is embedded in the psyche and practices of UK small businesses today, with 60 per cent of employers saying adaptability is the most important attribute for professional success.

In this new economy, there are increasing opportunities to collaborate with these adaptable start-up and entrepreneurial enterprises to deliver propositions in a different way – and meet the growing expectations of customers. Our own example is working with a collective of local freelancers, Alliance Creative, to deliver creative services. While we did explore continuing to deliver these services in-house or with a large established agency, working

with a small enterprise has given us greater flexibility and efficiency. We’ve been able to blend the benefits of our scale with the agility of a small enterprise, making Standard Life much more responsive to changing customer needs.

This collaborative working relationship allows Standard Life to benefit from talent attracted to the creativity and flexibility offered by a small business. Without this way of working, the talent and skill of these people would be deployed elsewhere – and Standard Life would miss out. This relationship also delivers commercially for both Alliance Creative and for Standard Life. A repeatable and scalable approach to service delivery ensures that the smaller business benefits from the certainty offered by a relationship with a larger business – while Standard Life benefits from the ability to ramp up and down resources as our business dictates.

It’s all change – and some larger companies are re-evaluating their strategies and their strategic partners, as well as their ways of working and culture. Of course, this doesn’t mean to say that large corporates aren’t important any more. They can bring vital strengths: more experience, stronger foundations and better financial backing and by supporting the success of smaller businesses their own businesses can benefit too.

We might not be wearing spacesuits but the economic landscape has changed so much we could be on another planet. In this brave new world, success for large organisations can mean they will have to support small businesses – and use their strengths to work with, not against, small businesses to hopefully drive mutually beneficial growth.

Stephen Ingledew (left) is managing director, marketing at Standard Life @IngledewStephen www.businessandsome.co.uk

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Inspector Eric Schmidt, executive chairman of Google parent company Alphabet, is to chair the newly created Defense Innovation Advisory Board at the Pentagon.

The new board is an effort to enhance the Department of Defense’s (DoD) culture, organisation and processes by tapping innovators from the private sector in Silicon Valley and beyond. It represents a commitment by the department to build lasting partnerships between the public and private sectors.

The board’s mandate is to provide department leaders with independent advice on innovative and adaptive means to address future organisational and cultural challenges, including the use of technology alternatives, streamlined project management processes and approaches – with the goal of identifying quick solutions to DoD problems. The Defence Innovation Advisory Board will seek to advise the department on areas that are deeply familiar to Silicon Valley companies, such as rapid prototyping, iterative product development, complex data analysis in business decision making, the use of mobile and cloud applications, and

11

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BY MATT SMITH, WEB EDITOR

Dogberry

British Library innovation and expertise blog

britishlibrary.typepad.co.uk/ business

Google is part of a new advisory board at the US Department of Defense organisational information sharing. The board will not engage in discussion of military operations or strategy.

Schmidt, former CEO of Google, will chair the board, which will be comprised of up to 12 individuals who have successfully led large private and public organisations, and excelled at identifying and adopting new technology concepts. Members will be selected jointly by US secretary of defence Ashton Carter and Schmidt, and will represent a cross-section of America’s most innovative industries, drawing on technical and

management expertise from Silicon Valley and beyond.

As chairman of Alphabet, and as the author of How Google Works, Schmidt has a unique perspective on the latest practices in harnessing and encouraging innovation, and the importance of technology in driving organisational behaviour and business operations.

Being an avid chocolate fan (even though, also being a dog, it isn’t very good for him), the Inspector regularly brings in samples for his work colleagues to taste.

So he was very interested to hear that Hotel Chocolat has announced its intention to seek admission of its shares to trading on AIM, London’s Stock Exchange for smaller growing companies.

Angus Thirlwell, co-founder and CEO, said: “Hotel Chocolat is built on our core values of authenticity, originality and ethical trading. We are very excited at the prospect of listing, as it is the next logical step in our growth plans and will enable us to accelerate the many initiatives we have in place – in particular additional investment in our British chocolate manufacturing, in new stores and in our digital offering.”

Hotel Chocolat sells online and through a network of 84 stories in the UK and abroad.

This blog, run by the British Library’s Business & IP Centre team, discusses all aspects of starting, running and growing a business with advice from successful entrepreneurs.

Among those to tell their stories are Mumsnet founder Justine Roberts and Original Dating founder and managing director Andrew Summersgill.

3DS Innovation Blog blogs.3ds.com/uk

Technology firm 3DS runs this blog looking at business, innovation and sustainability, covering everything from omni-channel retail and the public sector to the internet of things and the security of the UK’s energy infrastructure.

Several articles are posted each month, so there’s plenty to check back for regularly.

BSA blog

www.britishscienceassociation. org/Blogs/bsa-blog

The British Science Association’s blog looks at science and how it is communicated, including policy, education, public engagement, funding and culture. Some of its recent posts investigate how science is being promoted to children and young people to help inspire the British innovators of the future.

FCO Partners in Science blogs.fco.gov.uk/ partnersinscience

STAFF PICKS: THE BEST NEW MOBILE APPS

Shazam (Free – iOS and Android) This

innovative app from London-based Shazam Entertainment listens to songs playing nearby and tells you what they are.

Moshi Monsters Village (Free – iOS, Android) British innovation of a different kid. Shoreditchbased Mind Candy’s creation was downloaded 250,000 times in its first two weeks in 2013.

While British innovation has achieved great things, some of the best ideas come when we collaborate with experts from other countries. On this blog, the Foreign and Commonwealth Office’s science and innovation team explains some of the joint work in these fields being carried out in the United States.

Video campaigns from Human capital

Future of payments

HUMAN CAPITAL

FUTURE OF PAYMENTS

Performance improvement Digital transformation

PERFORMANCE IMPROVEMENT

DIGITAL TRANSFORMATION

Leading from the front: managing talent is one of the most important skills an organisation can have.

Backing a winner: key industry players analyse the challenges and opportunities in the payments sector.

Best in class: how to implement a business strategy to drive performance at every level of an organisation.

Finger on the pulse: today’s digital solutions can ensure enterprises remain competitive and relevant.

SPOTLIGHT ON… · Leadership development · HR analytics · Pay and reward · Talent retention · Fourth industrial revolution

SPOTLIGHT ON… • Payment innovation • Financial data and analytics • Digital security • Cloud platforms • Financial technology

SPOTLIGHT ON… • Sales and negotiation skills • Data analytics • Digital transformation • Employee engagement • Collaborative problem solving

SPOTLIGHT ON… • Internet of things • Cyber-security • Digital advertising • Business collaboration

To watch these videos, and for more information, go to business-reporter.co.uk/category/video

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Grow your business while making a positive social impact N

on-financial reporting standards and disclosure expectations are on the rise, and a raft of sustainability standards are emerging. Customers, investors, employees and other stakeholders want to know more about their companies’ business models, operating practices, performance and long-term viability.

These stakeholder groups want to understand how any firms they choose to work with: • Are ethical • Create genuine and sustainable value for the stakeholders • Create meaningful, empowering employment in safe and healthy environments • Contribute positively to the communities in which they operate, in developing stable and more adaptable communities • Continue to develop long-term, sustainable business environments through increased innovation, appropriate use of technology and process enhancement • Reduce their environmental footprint • Contribute positively to the biosphere Companies able to overcome the challenges and embrace the standards are likely to have a long-term advantage. Smaller firms may think these requirements do not apply. But viewing them as a piece of dusty regulation that can be ignored will prove to be a myopic view.

“Sustainability” is not about “being green”.

Environmental, social and governance (ESG) will drive greater efficiency, less waste, enhanced reputation management, company ethos and transparent governance, all generating positive outcomes. Several studies have found a positive correlation between companies that disclose their sustainability efforts and their value. In addition, various sustainability-focused investors hold that companies that report their sustainability results effectively outperform others because of their higher standards of efficiency, governance and decision making.

Such firms would argue that they better understand not only what can go wrong – but what needs to go right.

Ford Motor Company has been sharing information on its sustainability activities for nearly 20 years, and its executives believe the reporting helps to focus the company’s strategic thinking. In its 2013-14 sustainability report, Ford said: “Sustainability reporting not only demonstrates transparency but, in our view, is the basis of organisational learning, demonstrates our values, and both reflects and drives outstanding economic, environmental, and social performance.”

Companies have also found that, while sustainability reporting enables them to meet increasingly focused stakeholder and customer expectations, it also provides a

framework that helps guide decision-making, investing, and business planning.

Unilever, for example, notes that its Sustainable Living Plan, launched in 2010, “is our blueprint for achieving our vision to double the size of the business, while reducing our environmental footprint and increasing our positive social impact.”

Sustainability and the need to produce a long-term viability statement was codified into the UK Corporate Governance Code for certain firm types commencing October 2014. It was also adopted across the EU as the European Council Directive 2014/95/EU. It requires firms to consider the impact of their operations in a number of dimensions: Environmental, Social and Governance. In simple terms, it requires that firms report in detail how they are positively addressing these issues: Environment: known, foreseeable or possible impacts on environment, health, safety, energy use (renewable or non-renewable), greenhouse gas emissions, water use, and air pollution Social: employment law, equality, International Labour Organisation requirements, HSE, local community engagement and impact (such as economic), human rights, anti-bribery and corruption, diversity Governance: business model, policies, due diligence processes across supply chain, supply chain/vendor risk assessment, company risk profile and risk process, other key non-financial metrics (this could include anti-bribery and corruption, anti-money laundering and so on) The regulation is based on a comply-or-explain basis – if you don’t comply, you need to articulate why not. Given the increasing wave of commercial, social and regulatory pressure, why would any firm want to be perceived as an “outlier”?

Grab the initiative to differentiate your business The expectations for sustainability reporting are growing, and the benefits of doing it effectively are real. Businesses looking to chart a clear path should take cues from the history of financial reporting and determine what’s relevant to the organisation and its stakeholders. In addition, they should craft a repeatable and meaningful process. The true commercial value lies in doing this because the business understands the value and positive impacts. Those who merely seek to tick a box will soon be exposed.

Firms should view this as an opportunity, rather than a chore. Understanding the risks and opportunities inherent in the business plan will drive out inefficiency and stimulate innovation.

By focusing on these fundamentals, companies can address the rising expectations and be prepared when sustainability reporting becomes standard practice in the coming years.

How to start 1. Understand your business model:

• What problems do you solve for customers?

• What value do you deliver to your customers?

• What resources do you need?

• How do you deliver your services/products?

• How important is customer loyalty – and how do you achieve it?

• What are the cost structures/revenue streams?

2. Understand the risks inherent in each of the above – not only to your business, but also to the broader sustainability requirements.

Too often risk management is viewed as a cost of compliance, or a business prevention function. This makes true integration and embedding hard to achieve. Take an alternative view, however, and risk management, done properly, is a highly positive enabler. It is critical to support the delivery of objectives for any firm, in any sector. It becomes more “management” than “risk management” and supports the efficient, sustained viability of any business.

Risk strategy should be designed to assist the business in the achievement of its objectives.

It should to do this not through risk avoidance, but through the embedding of a framework through which it can identify and manage its risks to an acceptable level (its risk appetite).

This strategy ensures that the risk management programme is aligned to delivering its business objectives and intended outcomes and is companywide, including third parties such as outsource service providers.

Don’t gamble by becoming an outlier – take action now Pressure to meet or exceed these requirements is growing rapidly. There are two main sources of this pressure – external and internal: External • The Ten Principles of the United Nations Global Compact • The Organisation for Economic Co-operation and Development (OECD) guidelines for multi-nationals • The International Labour Organisation guidelines for the fair treatment of workers •A multitude of governmental and NGO initiatives • Customer expectations • Shareholder expectations • Investor expectations Internal • People want to work for ethical businesses •P eople want to work for businesses that show genuine enthusiasm and concern for the their local community and the environment •P eople want to work for businesses that have a long term, viable business model Don’t wait to be told. Seize the initiative, and obtain the maximum competitive, and social, advantage. We all win.

Andrew Bird (left) is Managing Director, Crowe Horwath Global Risk Consulting 020 3457 7129 andrew.bird@crowehorwath.com

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INSIDE TRACK W

hile the world itself is not getting smaller, our ability to erase the borders for international business certainly makes it feel that way.

This provides SMEs exciting opportunities to help them grow their businesses – and their profits. However, with innovative start-up organisations created every day, the pressure is on business owners to capitalise on as many potential markets before the competition catches up – or worse, captures that market ahead of them.

Investors, shareholders, and founders expect to see their investments grow as quickly as possible – that requires small to medium enterprises to get set up and operating in markets with huge growth potential. Today, business is more “borderless” than ever; gone are the constraints of all employees or business units remaining in the same geographic regions. Going global has become an opportunity to provide businesses with the added spark to boost their ability to see their business – and profits – grow.

In the past, going global was an opportunity that was only available to large companies with vast resources. Now this is available to SMEs as well. The ability to expand into multiple markets across the globe can help organisations grow exponentially. There are a myriad of challenges that make global expansion a very daunting prospect and one fraught with risks – and unfortunately for many, unknown until the expansion is already underway.

As your business grows, new markets have the promise of significant revenue, but many factors also come into play that can bring significant corporate risk. Misunderstanding labour laws could result in reputational damage due to devastating strikes

Take your SME global – overnight

that could disrupt your company.

Assessing any market barriers of entry, understanding the risk, and taking appropriate precautionary measures will define your success.

For most SMEs, the leadership teams are incredibly talented, hard-working subjectmatter experts with a vision to bring their product or service to market. But their expertise and experience rarely extends to foreign employment laws and cultures. This makes it not only difficult to locate and manage talent within another country, but leaves them at increased risk of fines and penalties for not ensuring statutory compliance – a sure-fire way to stop even the most considered growth plans.

Today it is possible to go global, quickly and with reduced risk – if you have the right partner.

Whether testing a new territory market quickly, with less initial investment and risk, or aggressively entering a new country, SafeGuard World can guide a small to medium enterprise through the entire process, allowing for a swift and compliant completion of their global employment requirements.

Companies that outsource global onboarding, payroll, and employee support to SafeGuard, experience more efficient staffing and employee management, dramatically reduced compliance risk and, most of all, the peace of mind that comes from knowing they have an expert team of professionals watching their back.

SMEs can quickly and easily go global and grow their business; with the right partners, leadership teams can focus on the allimportant job of growing the business and satisfying their investors and shareholders. info@safeguardworld.com www.safeguardworld.com

Business Zone

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In focus In the age of information, ignorance is a choice

I

f you’re an ambitious business owner, three years from now you’ll be laughing at yourself.

Why? Because despite two decades of frenzy around e-commerce, an incredible 66 per cent of business owners say the phone is still their most important source of all sales leads. Yet few can explain what is making their phone ring, and those who think they know are often dead wrong, most likely attributing leads to wherever the most marketing funds are being spent – an absurd bit of circular reasoning driving marketing investments.

A couple of years from now, not knowing where phone leads are coming from will seem as silly as having a website without web analytics. Perhaps because phone calls seem so old-school, it’s not intuitively obvious that a similar depth of insight is available for call traffic as for online traffic. But if you don’t look, you don’t know what you’re missing. Just like that MD I met recently – he was irate that he was spending heavily on evening newspaper ads but hadn’t received a single sales call, until it was proven to him that hundreds of calls were being delivered in the evening, when his

business was closed. He changed his opening hours, and hey presto!

A 39 per cent rise to his top line, even before he started tracking the return on investment across every single advert, not merely one evening newspaper.

Yet that kind of driving-blindwith-fingers-crossed attitude is what most business owners tolerate by not implementing the sort of big company call tracking and analytics solutions offered by the likes of IOVOX – simple cloud solutions now available to companies of any size.

Remember when websites were little more than online brochures? That’s roughly where the telephone is for most SMEs, but not for companies such as Zoopla, BT, SKY or Barclays – those companies know the ROI of every marketing penny and the outcome of every lead.

What happens when someone sees your phone number in an ad and simply calls you? How do you know where they found you? You don’t. So it makes sense to spend a bit of cash monitoring the loads of cash spent driving calls into a business, just

like those enormous businesses do. They see exactly how many calls come from Google, and also from other ads, affiliate networks, marketing campaigns, Facebook, and so on, because they’ve implemented not just Google Analytics but call tracking across their entire marketing network. They’ve chosen to be in the know.

Put it this way: imagine spending £500 a week on groceries, but having no idea what’s going to show up? Or paying for a class without knowing what the subject is? Intolerable! So why allocate marketing budgets without being certain that every penny goes to the advertising effort most relevant to business growth?

Many have wisely pointed out that hope is not a strategy. So stop hoping your marketing is working or that your staff are answering the phone, and start measuring the results.

Choosing to know is the first step. The next steps are nearly as easy as turning the lights on.

Ryan Gallagher is CEO and founder, IOVOX 0800 050 9000 www.iovox.com/telegraph

Business Reporter · March 2016 · 15

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The debate How can SMEs spark performance improvement?

Murray Cox

Nick Stanton

Richard Norris

Andy Richards

Stephen Ingledew

Strategy director Pancentric Digital

SVP, Global Workforce Solutions SafeGuard World International

Director, small mid corporate Bupa

Commercial and marketing director Coface

Managing director, marketing Standard Life

There’s no magic pill for improving performance but ownership is key.

Innovation, transformation and growth aren’t frictionless stages in a business’s lifecycle, so you need to get the relevant people engaged as soon as possible. Otherwise, you’ll cause resistance – the inevitable outcome of an imposed solution.

Ask yourself this: “Are blame, excuses and denial the norm in my business?” If so, you don’t have the responsibility, accountability and ownership that will drive performance improvement. Easier said than done, but practical first steps are needed.

In all of our service design projects, we use design thinking.

This methodology involves collaborating and working with stakeholders and customers so they are engaged from the outset. Only from here can you expect to uncover the real needs of the collective group, empathise with people’s emotions and harness the combined power of your entire workforce.

Survival of the fittest continues to reign in today’s global business market, requiring SMEs to be creative, nimble and fast to adapt to the changing landscape before your competitor. At SafeGuard World, we believe going global is the key to sparking performance improvement – an inevitable path to drive revenue in new markets, or accessing talent to accelerate innovation.

“Going global” would traditionally include engaging consultants – tax or legal advisers. But these typically only contribute one area of expertise.

The leadership team is left to manage the pieces and how they fit into the larger picture for the business.

There are multiple ways to crack the nut – even ways to compliantly enter a country in two to four weeks.

By outsourcing to a company like SafeGuard World that can handle the bureaucratic and legal headaches, SME owners can focus on actually running the business rather than red tape. Is there a bigger performance improvement than that?

We spoke to top thinkers in corporate organisations and our own experts to pinpoint game-changing workplace issues. They said that employee health and wellbeing at work is critical to business success.

Many organisations have made a start – trying to build great places to work that support people and drive growth. But they are also struggling to understand what and how to change.

The pace of transformation in our working lives has been astonishing. This is set to accelerate over the next ten years. This rapid evolution in what employees require and what they expect is making it difficult to meet the needs of the current workforce – let alone anticipate future change.

Your people expect you to support them to make healthy choices – and your business will benefit if you do.

Now is the time for you to connect with employees, investigate what works and draw an understanding of what needs to change.

By doing the following: • Reviewing existing trade customer relationships and focusing efforts on the financially healthy ones • Protecting against slow payment, unpaid invoices and insolvencies, thereby securing cash flow • Protection from such events as ‘Disputed Debts’, allowing the business to continue trading • Use data Trade Credit Insurance provides on domestic/export markets – know your customer • Securing more and better trade finance, improving credit options and borrowing terms • Mitigating cash flow risks and making informed credit line decisions brings peace of mind A credit insurance policy can help do all the above and the country risk, trade sector and business environment information provided helps improve performance. Find out more at our Country Risk Conference on June 9.

To spark brilliant performance most businesses rely on their people. We all expect a fair reward for the job done and it’s no surprise that people say their number one attribute for job satisfaction is receiving rewards and recognition from employers.

What our Business. And some report also reveals is that this goes way beyond the traditional basics of job security and adequate pay. SMEs can accelerate performance through providing broader rewards such as flexible working, upskilling and training – and employees are asking their leaders to make them active drivers on the journey to prosperity, involving them in key innovation and decision making.

Given this, it’s encouraging to hear that employers are increasingly keen to nurture talent from within – and this makes for a healthy bottom line too, as inevitably recruitment costs more than upskilling. People are the lifeblood of businesses and the more they are empowered and included, the better the future looks for everyone.

imagine@pancentric.com www.pancentric.com

01270 758047 NickStanton@SafeGuardWorld.com

0808 271 4184 www.bupa.co.uk/business

Free for credit risk management professionals crc_uk@coface.com 01923 478393 www.cofaceuk.com

£500 in your pocket if you can’t save money on card processing

D

id you know that independent businesses can save up to 50 per cent on the cost of taking card payments?

Handepay Merchant Services, a leading provider of debit and credit card processing services to 26,000 independent businesses, believes that almost all businesses could save on average up to half their current card processing costs by switching to them.

Many of the charges put in place by the big providers are ones that the vast majority of businesses don’t even know they are paying or why. Business owners are left befuddled by confusing language, tariffs, and unnecessary extra fees, which means

they are paying too much.

When new customers join Handepay, it’s simple. There are…

• NO minimum monthly service charges • NO PCI DSS compliance and noncompliance fees • NO authorisation fees • NO premiums for “card not present” transactions • NO joining fees All card machines accept contactless payments, including Apple Pay as standard, and come with free engineer installation and training. Plus, in most cases, Handepay

will even cover the fees to switch from your current provider. Customers are also offered the opportunity to earn money by referring other businesses to Handepay, and they will receive £50 or three months’ free rental for each successful referral.

If you want to make significant savings on your card processing fees, visit www.handepay.co.uk/handepayprice-challenge or call 0800 377 7382 to take the Handepay Price Challenge.

Terms and conditions apply (see website for more details).

0800 377 7382 www.handepay.co.uk

www.businessandsome.co.uk @IngledewStephen

March 2016

AN INDEPENDENT REPORT FROM LYONSDOWN, DISTRIBUTED WITH THE SUNDAY TELEGRAPH

16

business-reporter.co.uk

Business Reporter UK

@biznessreporter

How putting customers first drives greater growth Unlocking new opportunities and insights

M

arket competition is getting tougher and consumer expectations are getting higher. To find, win and keep more customers, small and medium-sized businesses need to excel at everything – from managing the sales pipeline and executing marketing campaigns to delivering support services.

Salesforce helps small and medium-sized businesses realise their growth ambitions by unlocking new insights and opportunities, and enabling new efficiencies and connections.

For example, at UK firm SureFlap, turnover soared by 186 per cent in the year that it implemented Salesforce. The company launched its first microchip cat flap in 2008, and now has more than 500,000 customers around the world.

“Salesforce touches so many parts of the business – it has been fundamental to our success,” said company founder Dr Nick Hill.

Salesforce is the world’s number one small business CRM solution. Its Customer Success Platform brings together the latest innovations in sales, service, marketing, apps and analytics to help small to mediumsized businesses work smarter and grow faster.

Chris McClellan, CEO at RAM Tracking, commented: “We knew Salesforce would make it easier for us to do business – we just didn’t realise how much.” The company, which provides advanced vehicle tracking solutions, has reduced its lead to invoice time by 40 per cent and customer service costs by 14 per cent since deploying Salesforce.

Customer service is increasingly becoming a differentiator for small and medium-sized businesses, with customer feedback powering metrics, such as the Net Promoter Score (NPS).

SureFlap has achieved an impressive NPS of 96 per cent,

which tops some of the world’s biggest brands. “Having an amazing product isn’t enough – you need to wrap it up with amazing customer service too. With Salesforce, we achieve that every day,” said Dr Hill.

Companies using Salesforce report seeing a 38 per cent jump in customer satisfaction and a 34 per cent increase in customer retention.

With Salesforce, small and medium-sized businesses can continue to enrich these relationships by connecting with their customers in a new ways, for example via online communities and mobile apps.

Research company Forrester predicts that by the end of 2016, smartphone subscribers will represent 46 per cent of the world’s population. Small and mediumsized companies will increasingly use mobile devices to not only connect with their customers but also run their business.

Salesforce turns a mobile device into a mobile office, enabling staff to respond to leads, collaborate with colleagues, check dashboards and pick up new tasks. “With Salesforce, we can track new sales and customer feedback in real time,” commented Dr Hill.

Greater visibility and agility are

vital for driving growth. With Salesforce, small and medium-sized businesses get a 360-degree view of every customer and every deal, every day. Thanks to this insight, companies using Salesforce report seeing their sales productivity and revenues grow by around a third.

Salesforce’s Customer Success Platform is hosted in the cloud, which means there is no hardware or software to buy, manage or maintain. Subscription packages range from just a couple of users through to entire companies.

For more information, visit www.salesforce.com/uk/smb