Talk Business - August 2013 by Talk Business

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Life of Pi

Protect your rep

First impressions

Eben Upton on changing the world with the Raspberry Pi

The companies who can clean up your online identity

We cover hot spots and fashion in our new image section

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ROOM FOR IMPROVEMENT Why booking your own hotel accommodation online is a false economy for SMEs The abundance of hotel booking websites such as Trivago, and laterooms.com has led many SMEs to think that they will get a better room rate for business trips if they book their own hotel accommodation online. Or companies frequently assume that by booking direct on a specific hotel’s website, they will avoid additional fees and save money on corporate accommodation. According to specialist SME travel management company Corporate Traveller, in most cases going down the DIY route is a false economy. What seems like a short term win can translate into a huge amount of missed savings in the long run. Corporate Traveller’s research has identified that one in three business travellers need to amend their hotel booking before arrival. Often the cheaper rates available through online agents are nonchangeable and non-refundable. Companies might think that they have saved £15 by booking direct on a non-flex rate, but if business travel plans change, they will be unable to alter the booking and will lose the whole amount. Rates via a hotel booking site may look cheaper, but SMEs also need to consider what extras they are paying for in expenses during the actual stay. Travel management companies (TMCs) have built strong relationships with leading hotel chains, from budget to luxury, enabling them to negotiate the best room rates which also include extras such as free wifi and breakfast.

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A recent cost comparison by Corporate Traveller showed that a room rate of £90 sourced by one of the their travel managers was ultimately better value than the rate of £80 offered by a hotel booking site for a similar hotel in the same location. Corporate Traveller’s £90 rate included wifi and breakfast, plus the hotel was within walking distance of the client’s meeting; whereas on top of the £80 rate offered by the hotel agent, the client still had to pay £15 for breakfast and £15 for wifi on check-out, plus a £9 taxi fare because the hotel wasn’t close to the meeting venue – making an overall total of £119. The best way for SMEs to reduce their per-night spend on hotel accommodation is to ask their TMC to set up a hotel programme which mandates bookings in one or two properties per location. Many SMEs assume that their annual spend on accommodation is insufficient to warrant hotels giving a special rate. However, companies only need to be booking around 50 room nights per year in one location to trigger a discounted deal. Even if an SME doesn’t have significant volumes in one location, instead using hotels across a diverse number of cities or countries, their TMC should still be able to negotiate a hotel chain discount. “It seems an obvious cost saving exercise, as by placing the bulk of your bookings with a handful of hotels, those hotels are more like to offer you a discounted rate,” explains Graeme Milne, general

manager Corporate Traveller UK. “Yet you would be amazed at how many clients have no mandatory hotel programme in place. “The savings we made recently for a fashion industry client were around £3,000 per annum. The client was booking 120 room nights per year in Delhi. The average hotel rate in Delhi is £167 per room per night, but we negotiated this down to £142,” added Milne. Another factor to consider when booking via an online agent is that the guest will be perceived by the hotel as a leisure traveller, rather staying on business. That means you are more likely to be allocated the worst room, near the lift shaft or above the kitchens. You may also be put in a single room, whereas corporate bookings are often given ‘double for single occupancy’. Safety has always been an important aspect of business travel, but after a spate of terrorist attacks and natural disasters, traveller security has become even more of an issue. In the event of an emergency SMEs need to be able to track their employees quickly. This visibility is only possible when flights and accommodation have all been booked through one central source. “By bringing all your hotel bookings together under one TMC, you will know where your people are immediately. If you have booked independently online, it’s a different story,” concludes Graeme Milne.

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iNSIDE 11 Editor’s letter

12 Contributors & letters 15 News & events

110

TALK strategy 51 The branding column Rich With

Talk image

53 Be seen and shared Facebook

93 First impressions Introduction to the new image section

56 Go to town More than shopping

94 Look the business Summer smart/casual fashion

61 The sales doctor Solving your sales problems

98 Hot spots Locations for SMEs

62 Ask a question Adam Caplan

101 We love… A few favourites

talk MARKETING

talk technology

65 The marketing column Kimberly Davis

103 Our man in the Valley David Richards’ tech column

66 Seven wonders of the world wide web Social media personalities

105 Be more than a browser Internet data

70 Chatting to the top dog The personal touch

TALK Success

72 Colour me right Colour psychology

18 Take a byte Founder of Raspberry Pi, Eben Upton

75 Likes & follows = profit Social media

26 Take one company Crafter’s Companion

talk people

29 Introducing… TB grills a young up-and-comer

79 The people column Lee McQueen

31 Take ten Personal problems

81 A bad gamble Employee risks

33 Book reviews

82 Secret diary of an entrepreneur A week in the life of the Create a Craft Business founder

138 He said/she said What are our entrepreneurs saying this month?

talk MONEY

86 People power Best practice

35 What guarantee? Personal guarantees

89 Bending backwards Flexible working

39 Bootstrapping success Self-funding

91 How important is networking? Business Junction

40 Software vs. Online Payroll solutions 42 What about the bank? Different funding

110 The erasable era Online reputation 113 I’ve got an app for that… Our favourite business apps 114 Nokia vs. HTC This month’s best smartphones

TALK FRANCHISE 117 Franchise news 119 Spotlight Mr Electric 122 Take one franchisee Go-Kart Party, Claudio Galdes 125 Imbalance in the workplace Equal office

talk aDVICE 128 Kyocera 131 HR Insight 134 Marstan Group

136 Talk Business Directory

46 A day in the life Diary of a Start-Up Loan recipient 49 Before you sign on the dotted line… Legal agreements

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editor’s letter

Look your best everywhere

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EDITOR

Dawn Murden dawn.murden@astongreenlake.com

DESIGN

Paul Christopher Daniels paul.daniels@astongreenlake.com Heather Rugeley heather.rugeley@astongreenlake.com

WEB DEVELOPMENT MANAGER Mitchell Finlay mitchell.finlay@astongreenlake.com

here’s no doubt that the internet and social media has changed the way we communicate. It’s opened up the world; almost anything is accessible at the click of a button. But the opportunities technology can bring are hard to come by if we don’t know how to use it properly. Eben Upton believes we should be creators of technology, not mere users. That’s why he designed the credit-card sized Raspberry Pi microcomputer to encourage all generations to learn programming. Read his interview on page 18.

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TALK BUSINESS AUGUST 2013

Talk Business is published 12 times a year by Aston Greenlake Publishing Ltd. Floor 8, 6 Mitre Passage Peninsula Central Greenwich, London SE10 0ER T:02036174681

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August 2013 £4.50

It would be great if we were all technology experts, but because most business owners don’t have time to learn everything, this issue, our digital special is jam-packed with useful advice and tips. Turn to page 105 to learn how to use online data and see page 53 to master the perfect business tool: Facebook. For those who already have their online presence sorted, have you checked your virtual reputation lately? Google yourself, and you might find a bad review. But don’t fret; read about the companies who’ll erase those black marks for good on page 110. It’s not just online where you have to look you best. Have you ever judged a client or customer by what they were wearing? Well, they were doing the same thing. It takes just three seconds to form an impression subconsciously and many businesses fail to project the perfect image. That should be a thing of the past with our new TALK IMAGE section from page 93. Take care of business for now.

No part of Talk Business may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written consent of the editor. Talk Business will make every effort to return picture material, but it is sent at owner’s risk.

T IS HE SU D E IGIT AL

Due to the nature of the printing process, images can be subject to a variation of up to 15 per cent, therefore Aston Greenlake Publishing Ltd cannot be held responsible for such variation.

Dawn Murden, Editor

ISSUE 23

Life of Pi

Protect your rep

First impressions

Eben Upton on changing the world with the Raspberry Pi

The companies who can clean up your online identity

We cover hot spots and fashion in our new image section

This month’s cover was designed by Radio, a creative studio based in Cape Town, South Africa.

@TalkBusinessMag

talkbusinessmagazine.co.uk

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Contributors & LETTERS

our online elite

Eben Upton is cofounder and trustee of the Raspberry Pi Foundation, a charity with a commercial subsidiary that designs small and affordable microcomputers for children. Eben hopes the credit-card sized computer will encourage children all over the world to learn programming. The company turns over £2 million, and 1.5 million people – adults and children – are already using the microcomputer worldwide. Eben currently works at Broadcom and has previously worked at IBM and Intel.

James Kirkham is global head of social and mobile at Leo Burnett. The worldwide advertising company was launched in 1935 in Chicago and its first two major advertising projects were for Kellogg’s and Procter and Gamble. James is also founder of Holler, a creative agency that gets people talking about brands though engagement. He is a highly respected commentator on the digital marketing industry, speaking regularly at conferences including The Guardian Changing Media Summit.

Drew Benvie is managing director and founder of Battenhall, a social media agency that works with clients on PR, social media, and consumer and business communication. He is former CEO of Hotwire, founder of 33 Digital and wrote the Wikipedia page on social media. He was also the UK’s number one respected practitioner in New Media Age’s 2011 Reputation Online report. He’s a regular commentator in the media and has had articles published in The Huffington Post and PR Week.

Radio started as a creative collaboration between Byron Meiring and Gert Schoeman, and grew into a fully functioning studio by 2011. Based in Cape Town, its studio is housed within an old brewery, located between Table Mountain and the harbour. Radio have worked with a variety of brands and advertising agencies from around the globe, inlcuding Orange, Bloomberg and Toyota. They specialise in illustration, iconography and typography.

Turn to page 18 to read about Eben and what inspired the Raspberry Pi.

Read his article on online reputation on page 110.

Turn to page 66 to read his seven typical social media personalities.

Radio designed our front cover this month. For more information about Radio visit madebyradio.com

AUGUST 2013

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MAILBOX

If you’d like to send us your thoughts about Talk Business, or anything else that’s happening on the SME scene, just get in touch: email: dawn.murden@astongreenlake.com snail mail: Aston Greenlake, 6 Mitre Passage, 8th floor, Greenwich Peninsula, London SE10 0ER

This month we’ve inspired two of our readers to launch a new business and an app. Keep the praise coming, but if you have any suggestions don’t be shy and let us know

Battling for employment Hi Talk Business team, I’ve visited your website a number of times and I think that you offer some great advice and tips when it comes to careers and job opportunities. Given the current economic climate, jobs are becoming harder to come by and it’s a shame to see talented people unemployed. I sincerely hope that governments around the world start to address this situation and look to create more jobs. Thanks for your time, Georgina Stamp Office manager, Marble Hill Partners

Entrepreneur inspiration

R OF E T T LE MONTH THE

Dear editor, I absolutely loved reading about Charlie Mullins and his business Pimlico Plumbers [Reaching that pipe dream, July]. He came across as a normal, down to earth man. It’s amazing that he just wanted to be a plumber and now he owns a multi-million pound company. He didn’t set out to be an entrepreneur and yet he’s been so successful. I’ve always wanted to launch my own business but haven’t known where to start. After reading the inspirational stories and advice in Talk Business over the last few months, I’m finally ready to follow my dream. Thanks for the inspiration, Matthew Williams

It’s ‘appening

Dear Dawn, The app monetisation article you ran [Dawn of the dead, July] was insightful. As an SME owner I’ve felt pressure to launch a shiny new app but I’ve refrained because I believe that the marketplace is overcrowded. I don’t know much about technology and wouldn’t feel comfortable launching an app on our own. It’s good to know there are companies like Fiksu out there armed with expertise and glowing testimonials to help - I think I’m finally ready to launch our app. Kind regards, Kerri Stringer

Tweets 0F the month... @steveptodd Can’t wait for #mountpendo networking on the slopes! Sponsored by @talkbusinessmag. Minimal tickets left! http://tinyurl.com/ m4q2nmd #BiziTalk @BrynPowell Check out @TalkBusinessMag for an exclusive interview with me about my business @ContainersLdn. http://goo. gl/2yDFC p29! #business @bizloanservices @TalkBusinessMag Reading your magazine for the first time. Great content with practical ideas and tips for growing businesses. @Goldgenie Goldgenie CEO Laban Roomes featured in this month’s @TalkBusinessMag @PimlicoPlumbers Really enjoyed speaking to @TalkBusinessMag @BigredboxPR @TalkBusinessMag can I just say how much I enjoyed reading this month’s mag. Chocablock with relevant info. Thanks guys. @SaraDaviesCC Just had a fab chat with @DawnMurden from @TalkBusinessMag - we got on like a total house on fire! Poor woman- I did talk her to death though!

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NEWS & EVENTS

Dates for the diary Business Junction networking events 8 August The Roof Gardens, Kensington 14 August Freemasons’ Hall, Covent Garden 22 August The Happenstance, St Paul’s businessjunction.co.uk/events ad:tech 11-12 September Olympia, London ad-techlondon.co.uk The Sterling Integrity Show 13 September The Future Inn Hotel, Bristol 27 September Sixways Stadium, Worcester sterlingintegrity.co.uk

eCommerce Awards 2 October Marriot Hotel, Grosvenor Square, London ecommerceexpo.co.uk/page. cfm/link=250

The Spain Start-up and Investor Summit October 2013 Date & venue TBC spain-startup.com

eCommerce Expo 2-3 October Olympia, London ecommerceexpo.co.uk

Kent 2020 Vision Start-Up Live 23 October Kent Event Centre, Maidstone kent2020startup.co.uk

Successful Selling Expo 17 October RICOH, Coventry sales-expo.co.uk

Telecoms tech world 26-27 November Olympia, London telecomstechworld.com

Apps World 22-23 October Earls Court, London apps-world.net/Europe

The Business Show 28-29 November Olympia, London www.greatbritish businessshow.co.uk

Students missing SME employment opportunities JUST ONE IN eight (12%) of university students would pick working for an SME as their top career choice, according to a survey carried out by Santander UK. This is despite the fact that UK SMEs are responsible for more than 59% of private sector employment and that a quarter of graduates are employed by an SME. The top choices from current students were to continue their education (26%), work for a large corporation (16%), and 16% wanted to pursue a career in the public sector. To help promote the benefits and opportunities of working for an SME, Santander is expanding its internship programme run by its Santander Universities Global Division.

Since its launch in 2012, the scheme has placed 532 students from the country’s top universities on three-month internships with SMEs across the UK. Due to its success, Santander Universities is trebling the size of the programme. Luis Juste, director of Santander Universities UK, said: ‘Our specialist team works very closely with 66 universities throughout the UK. ‘Together we are passionate about helping students and graduates gain employment in these difficult times. ‘It’s great to see that working for an SME is the number one career choice for one in eight of those polled, but we believe this could, and should, be significantly higher.’

talkbusinessmagazine.co.uk

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Half of business owners could be missing out on VAT savings

Micro-businesses losing thousands through missed calls MICRO-BUSINESSES ARE LOSING over £3,300 a year each, through missed new business calls according to research commissioned by Penelope, a call handling solution for small businesses. It asked 2,000 businesses about their phone habits. Respondents outlined they received more than 20 calls, and that 9% of those calls are new business enquires. Despite many business owners admitting to answering calls while

at weddings, funerals and in the bathroom, the survey found they miss an average of seven calls a day. A new business lead was found to be worth an average of £102. ‘When it comes to attracting and winning business, responsiveness is everything,’ Ed Reeves, co-founder of Penelope said. ‘A consumer is unlikely to chase a business to buy something from them; it’s far more likely that they will simply call someone else.’

A STUDY BY software provider, Sage revealed more than half (52%) of business owners think they are missing out on VAT. They also estimated they are losing approximately £500 every year by not claiming for everything they are entitled to. All businesses that turn over more than £79,000 each year need to be VAT-registered, however due to the complexities of VAT, nearly 30% of the 1,000 business owners surveyed suggested that a deeper understanding of VAT would help their firm become more profitable. Lee Perkins, managing director of Sage’s small business division said: ‘Businesses that aren’t claiming back the VAT they are entitled to are really putting themselves at a competitive disadvantage. ‘Despite being around for 40 years, the ever-changing nature of VAT has put many business owners off from digging into VAT and fully understanding what can be refunded.’

Bibby calls for funding to help businesses UK CEO OF Bibby Financial Services, David Postings has approached the Government and Bank of England asking for a review of how lending schemes operate, to enable non-bank lenders to compete. This follows the news that RBS is to launch a review of its lending to businesses after uncovering £20 billion in untapped cash. David Postings warns that schemes

such as Funding for Lending are not set up to enable alternative providers to access available funds, which threatens to suffocate growth in 2013. ‘The news that RBS has an abundance of cash comes as no real surprise as the banks are extremely risk averse and too often decline funding applications,’ David Postings said. ‘As a result, Government lending channelled through banks has not been reaching

businesses as the banks are only lending to those at the safer end of the spectrum. ‘But these aren’t necessarily the businesses that require funding the most, so there is an element of cherry-picking going on.’ Bibby also carried out a study of 1,000 UK SME managers, which revealed 51% felt the UK had not become a better place to run a business since the coalition Government took its approach on reviving the economy.

AUGUST 2013

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TALK SUCCESS THE INTERVIEW

Most families have a home computer, but they wouldnâ&#x20AC;&#x2122;t want their children messing around with the circuit board

Take a byte Eben Upton is on a mission to turn future generations into technology experts. Dawn Murden finds out how the executive director of Raspberry Pi is changing the default

AUGUST 2013

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his issue we’re exploring how technology has changed the world for SMEs, so I jumped at the chance to meet Eben Upton. He’s the brain behind Raspberry Pi; a £16 ($25) credit card-sized single-board computer of the same name, created to put computer science in the hands of future generations. While studying for a PhD in 2006, Eben noticed the falling numbers of students enrolling on computer science courses. He found kids were still messing about on computers, but not with them. No longer were they taking apart circuit boards, hacking and writing programs; instead they were making PowerPoint presentations and writing hourly statuses on Facebook. Children had lost interest in the science behind the technology. Perhaps the dot-com bust had killed their enthusiasm, or maybe the technology had become so high-tech and perfected they didn’t feel the need to fiddle with it. But for Eben there were two key reasons this had happened. In the 1980s when he and his colleagues were growing up, they had computers like the Amiga, Commodore 64, and the BBC Micro. Eben learned most of his basic computer science knowledge on the line of Acorn computers built for the British

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Broadcasting Corporation, that were installed in most English schools. ‘There are no computers like that anymore,’ Eben told me. ‘Most families have a home computer but they wouldn’t want their children messing around with the circuit board.’ And in schools, Eben found IT didn’t teach pupils much more than how to enter data into spreadsheets or simple web design. Having worked at both IBM and Intel, and being a hardware man at heart, Eben built the Raspberry Pi; a stripped down device, which would enable users to get into the guts of computers. A device allowing kids and adults of any age, from any country, an affordable opportunity to create programs and get to grips with technology. Around the globe 1.5 million people are already using the simple circuit board, which has a USB port to connect a keyboard and mouse. Like the Amiga or Commodore 64, the device connects to a TV, or a DVI monitor. ‘I want to change the world,’ Eben said. ‘But we don’t claim to have all the answers, and we actively encourage other companies to clone what we’re doing.’ The device is the main initiative of the Raspberry Pi Foundation, a charity that promotes the teaching of computer science in schools.

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THE INTERVIEW

How did you come up with the idea for Raspberry Pi? While studying a PhD in computer science at Cambridge University in 2006, my colleagues and I became concerned with the small number of people studying the subject. And those who had come to study knew very little about programming, so we had to spend the first year doing remedial teaching. They didn’t grow up with the Amiga and Commodore 64 like we did. At school, pupils were learning the basics in Word or Excel, but not programming, and there was nothing on the market to make up for this. We wanted to combat this by launching a foundation that would launch educational initiatives (like a cheap computer), for both adults and children so they could learn programming. How did you get your start-up cash? We intended to be conventional and would make and ship the product ourselves. We wanted to build 10,000 devices, which we’d sell for $25. To do this we needed £250,000. We went to agencies to match the funding we put in, but they said there was no market for what we were doing.

We ensure there is a clear petition between the charitable foundation and the trading side

In the end my colleagues and I put our hands in our pockets and found a group of angels. We changed our model too we design the Pi, but we don’t manufacture it. Did you have instant success or was recognition hard won? There was a long delay, a slow burn. We launched the foundation at the end of 2008 and in the background we were building the product. We wanted the BBC to brand it; we tried but due to EU law, they couldn’t help us. But when BBC correspondent, Rory Cellan-Jones took a clip of our device, within two days it got 600,000 views. It started a “big bang” of publicity. After that we did a lot of social media work, and my wife Liz, a freelance journalist, dropped everything and began doing our PR. At the moment we’re on a bit of a high, but we have to maintain it.

TALK SUCCESS

Was it hard to set up a charitable foundation with a commercial trading subsidiary? How do you keep them separate? We ensure there is a clear partition between the charitable foundation and the trading side. Of course there are times when we’re not sure, for example when we built the community website, we asked: “should that be commercial or charity?” In the end we decided it was an asset of the foundation. This issue of Talk Business is all about technology, and how it’s changing the world for consumers and businesses. Do you think to stay ahead of the game we need to be creators of technology now, rather than consumers? Yes, and this is something I’m passionate about. Countries and people that create will go further. Our mission is to get to people when they’re young. There’s no point of putting a 25-year-old in front of a piano and expecting them to turn into Mozart. It’s easier to learn when we’re young. The thing about technology is sometimes it’s hard to translate what you want to do. You have lots people walking round with fantastic ideas for apps, but unfortunately they’re just ideas as they don’t have

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TALK SUCCESS THE INTERVIEW

the tools to make them. We want to give them the tools. What were the biggest struggles you faced, and did you ever think about giving up? We launched in 2008 and we’re only making waves now. We went in fits and starts. I think the reason is the technology we need to produce the Pi wasn’t affordable, and I had to dedicate time to my studies. Getting the capital together and making the prototype was difficult. We visited 10 to 20 factories, but none of them could make it for us at a reasonable price, so we were forced to go to China. Then, months later, we found a factory in Bridgend, enabling us to bring 100% of the production to the UK. How did you overcome the challenges? Passion for what we were doing. I had to work 100 hours a week to get it going, but it was worth it because I believed in what we were doing, and I still want to change the world.

I’d worked at IBM and Intel before, and I couldn’t move a needle while I was there

Vital statistics Company founded: 2008 Start-up capital: £130,000 Turnover: £2m Profit: £1m Growth rate: £100,000 to £200,000 a month. Biggest achievement: Our business model; we only design it, we don’t manufacture it. What’s the best thing about being an entrepreneur? The power. I’d worked at IBM and Intel before, and I couldn’t move a needle while I was there. Now I pay people’s mortgages, their bank accounts have money in because I came up with a good idea – it’s very empowering. More people are looking to set up their own businesses now. In the UK I believe we’ve gone from having around 20 to 70 million SMEs. I think the Internet has played a huge part in this. What would your advice be to first-time businesses that are experiencing difficulties in the current economic climate? Do something to test the waters and yourself before you dive in. Buy something and sell it on

eBay to make a profit. Or make something and do the same. Learn how to sell yourself and your products. If you fail, learn from your mistakes. I launched a business in my 20s, and I know it’s better to fail early on when nothing depends on it. Remember there is capital around; you just have to work hard to find it. What does the future hold? We’re on a high at the moment but we need to keep it going. I want the Raspberry Pi to become mainstream for kids, like Leapfrog, but I also want adults to use it. We’re working on the offical case at the moment. Contact: raspberrypi.org

AUGUST 2013

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WHAT IS A

BUSINESS COACH A business coach is a professional with a background in small business who oversees, assists and guides owners in developing, starting, and growing a small business. A business coach will help clarify your business goals and objectives whilst you develop the skills and acquire the resources needed to operate a successful business. A business coach will take an unbiased view of your business, identify business opportunities, whilst assisting you in balancing your business and personal life. A business coach will guide and support you in everything from business strategy, marketing, financial control, general administration, recruitment, employee conflict resolution and anything else that is important to you.

How Does Coaching Work The coaching partnership begins with a startup session in which the coach learns all about you and your business. Afterwards your Business Coach will meet with you on a regular basis, either in person, over the telephone or via Skype, to discuss

the current and future challenges that you are facing. This structure keeps you and your business on track and allows you to continuously move forward towards your goals and objectives. The results are that you gain clarity on what success means to you, and the actions you should take to achieve success.

What Is Expected Of You The key to an effective relationship between your business coach and you is a commitment by both parties. •You should be open to change and transition, to exploring business possibilities. •You should show a commitment to understanding and growing, and to confronting and working toward solutions to any business challenges that may arise. •You should bring a desire to succeed to the relationship and have a commitment and willingness to learn from your business coach. •You should recognise that you and your business coach are professional partners.

THE 50K CLUB This online program is aimed at giving smaller businesses the advice, guidance and ongoing support they need for a profitable, robust and successful business by showing you step-by-step everything you need to know and DO to succeed. It’s called the £50k Club because it is our aim to help you make £50k profit from a newly established business, if you are an existing business then your potential growth could be even greater.

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Yet for around £3.30 a day it costs the same as a cup of coffee, what’s more the first module is FREE, if you don’t like it simply cancel within the first 14 days and you will be charged nothing.

Your Coaching Options At My Business Advice you can choose from online business development courses and personalised one-toone coaching sessions all with an experienced business coach, AND you can try these risk free. •Our online business development courses courses offer a free 14 day trial period. •Our one-to-one mentoring packages offer a free initial session and a no-risk guarantee. We will ask you to allocate a minimum of 2 to 5 hours a week, depending on the package, and we will support you at every stage to enable you to implement the strategies for rapid and sustainable business growth. Is It Affordable For Me Using the services of a business coach is surprisingly affordable, especially compared to the hidden costs of not using one and they are just a phone call / email away with support and advice when you most need it. You could get extra profit over the next 3 years equal to your current turnover, that is an extra £200,000 for a business with a turnover of £200,000. What difference would that make in your business?

Contact:

www.mybusinessadvice.co.uk www.mybusinessadvice.co.uk/the-£50k-club

What This Means As monthly year 2 sales begin where year 1 sales ends you could get extra profit over the next 3 years equal to your turnover, that’s an extra £200,000. What difference would that make to your business?

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ome of us are practically born with our minds made up about our lives. We may not know how we’re going to get there, but we know where we’re going, like Sara Davies, from Durham. ‘My dad had his own company and property, while my mum had a decorating store that had been in our village for 30 years,’ she says. ‘They taught me that if I was going to work hard, it might as well be for myself. ‘I always knew I wanted to own my own company, but I didn’t know what industry I wanted to work in.’ A country bumpkin at heart, Sara didn’t want to venture too far from home. So leaving the north for London or becoming an investor in the City was out of the question. Instead she chose a business management course at York University, an hour and a half from her home town. ‘It was an elite course with 30 students, and many of them were privately educated – I felt like an underdog,’ she says. ‘I’ve never been the brightest.’ But by the end of the first year she was one of the course’s highest achieving students. At the end of her second year, Sara had to choose a work placement. Still feeling unsure about what she wanted to do, a friend of a friend who had started a craft business agreed to take her on. ‘Me and my mum used to make candles and things when I was little but I knew nothing about the craft industry,’ Sara says. ‘It was a boom time for the crafts and it really opened my eyes, I learnt how to craft and fell in love with it.’ During her sandwich year, Sara came up with her first product idea; an envelopemaking tool. Back at university, she was hell-bent on getting her product to market.

Vital statistics Company founded: October 2005 Start-up capital: £1,000 a term AKA my student loan Turnover: £6m in the UK, $4m in the US Profit: Healthy, but could be improved Growth rate: UK – 24%, US – threefold Biggest achievement: in 2011, I won the Ernst & Young Emerging Entrepreneur of the Year Award

Crafters conquest

Sara Davies’ business, Crafter’s Companion – launched during her last year at university – turns over £6m in the UK and $4m in the US, and it’s an industry she once knew nothing about

AUGUST 2013

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TAKE ONE COMPANY

‘I look back on it now and I don’t know how I did it,’ Sara admits. ‘I’d get up at 7am and work on my business until 5pm, then I’d do my university work until 1am.’ Sara used her student loan to fund her business, which was difficult. She knew injection moulding would be the best way to make her product, but she couldn’t afford it, so she found a little shop to make it in medium-density fibreboard. ‘My first big break came when I got onto the shopping channel, Ideal Shopping Direct,’ she says. ‘I managed to convince the channel every crafter needed one and they invited me on. ‘I sold 8,000 in the first day and my product became the crafter’s must-have Christmas present that year – Crafter’s Companion was born.’ Once she’d sold 30,000 units Sara had enough profit to make the injection-moulded version of her product and things really started taking off. However, success is never without setbacks. ‘My university didn’t support what I was doing; they wanted me to concentrate on my course,’ she says. ‘I remember being rejected from a huge pitch as well, I was a 20-yearold trying to sell products to the masses - I came home and cried on my bed while the other students brought me tea.’ Sara’s spirit kept her going; she finished university with a first class honours, and the highest achiever of her school. With the introduction of new products, Crafter’s Companion went from strength to strength and she was making regular appearances on Ideal Shopping Direct. In fact, crafts became so big for the network, it introduced a new channel solely dedicated to crafts.

TALK SUCCESS

My life I’m watching: The Big Bang Theory. I’m reading: autobiographies like Duncan Bannatyne’s and Alan Sugar’s. I’ve also read Ant and Dec’s book too – it was interesting to learn how they’d built themselves as a brand. I’m listening to: the radio. I‘m surfing: Facebook, and mother and baby websites.

It was a boom time for the crafts and it really opened my eyes, I learnt how to craft and fell in love with it

Sara had certainly put her stamp on the world of crafts in the UK, and in 2007 she decided to break America, with huge success, despite launching during the economic downturn. ‘Few businesses had tackled the US, so I was asked to sit on the board of directors of the Craft & Hobby Association at the age of 24,’ she says. York University also hailed Sara’s achievements and has since asked her back to talk to students about her business. Like most entrepreneurs, Sara admits that her business pretty much takes over her life. She has grown the business herself, but says her parents and childhood sweetheartturned husband, Simon, have supported her. ‘Simon says I’m unemployable,’ she says. ‘I come in on a Monday morning with an idea, and an hour later it’s being developed. He says in the real world

businesses can’t change with a moment’s notice.’ Her husband was working on the accounts for multimillion pound companies, but when Sara’s business started growing, he quit his job and became the managing director of Crafter’s Companion. ‘I would have done too much, too soon,’ she admits. ‘He keeps the money in check, and as sales director I can look after the rest of the business, including creativity.’ Sara says she always knew her twenties would be dedicated to business, while her thirties would be the time to have a family. She turns 30 next year, and has some fantastic news. ‘I’m four and a half months pregnant,’ she beamed. Well, Sara may not have known how she was going to get where she is today, but she’s arrived. Contact: crafterscompanion.co.uk

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Are you in need of HR and Health & Safety Support at an affordable price, with 24 hour online access and on call support? Look no further! Revera SOS offers a unique combination of HR and H&S support via our secure online portal that is specifically tailored to your business. Our product offers instant access to upto-date HR and H&S information, relevant workplace legislations, template policies & procedures, sample letters and training modules on key business issues, to support you and your management team. You can also have the extra assurances of telephone, email and onsite support from highly-skilled, fully qualified professionals.

Why do you need us? With people come complications…and Revera SOS gives you and your managers the tools to deal with issues quickly and effectively, whilst providing support and coaching to people who may not have been in such situations before. Revera SOS offers the answers to your HR and Health & Safety issues, and we provide a level of support tailored specifically to your business requirements. Whilst there are plenty of products that offer advice, Revera SOS offers a modern and dedicated service that is

specifically designed for SMEs. We can also undertake ad-hoc project work and assist with the complete implementation of HR and H&S – please contact our team for further information.

Green

• Our most popular package with SMEs. You are comfortable with HR and H&S, however you would benefit from the assurance of accessing our portal and having the ability to download documents and information which is updated with new legislation and relevant to your business, without trawling through search engines and finding out-of-date and incorrect information. £49.00 per month

Amber

• You need some dedicated assistance and you need to know someone is there for HR/ H&S guidance, but you’re experienced in dealing with people issues. You need answers to questions, but the ability to source the information quickly on your own: • 1 hours support per month • 24 hour email response service and dedicated hotline • Unlimited access to portal £99.00 per month

Red

We use a simple traffic light system on our portal to identify the potential difficulties associated with each action and we have used this model to create 3 levels of service:

• You are a growing business with big ambitions, or are not experienced enough to feel confident in delivering HR and H&S: • 5 hours support per month • 24 hour email response service and dedicated hotline • Unlimited access to portal £249.00 per month

Now is the right time to invest in HR and Health & Safety but we know that keeping costs low are of key importance, so as an exclusive offer to Talk Business readers if you sign up to one of our packages before 31st August 2013 you will receive a 50% discount on your SOS fee for the first 6 months*. To sign up, or to discuss further your requirements with one of our HR professionals please email us at enquiries@revera-sos.co.uk or visit the Revera SOS website at www.revera-sos.co.uk *Minimum contract term is 6 months

Revera HR Consulting Ltd

Revera August.indd 1

@ReveraHR

Revera HR Consulting Ltd

29/07/2013 14:07

UP-AND-COMING

hy would you feed your best friend something you wouldn’t eat yourself? This question led childhood friends, Daniel Eha and Mat Cockcroft to launch Pure Pet Food. It all started in Dan’s kitchen a year ago, but now the two are tipped as being two of the UK’s 20 young entrepreneurs to watch in 2013. Pure Pet Food is natural dehydrated dog food tested by humans. It avoids the harsh cooking procedures often used in commercial pet foods, meaning that many owners who have turned to low processed, raw and home cooked meals can choose Pure Pet Food as a healthier, convenient option.

WHERE DID THE IDEA COME FROM? Mat and myself grew up together on a small farm in Yorkshire, lucky enough to be brought up on fresh fruit and vegetables. Having dogs ourselves made us look at the pet industry and the foods available. We couldn’t understand how highly processed food, containing low quality ingredients, manufactured into small biscuits could be ideal. WHAT’S YOUR ADVICE TO YOUNG ENTREPRENEURS TRYING TO GET AN IDEA OFF THE GROUND? Do your market research and be sure you are in business for the right reasons. Find something you’re passionate about and don’t be afraid to give it a go! Don’t do it just for financial reasons.

TALK SUCCESS

Introducing

Daniel Eha Shell LiveWIRE winner, Daniel Eha is co-founder of Pure Pet Food, the dog food that has to pass a human taste test

WHAT WAS YOUR WORST JOB? It took almost a year to get the regulations and various testing, which we needed to launch Pure. We took on all sorts of different weekend jobs to get the funding we needed to make it a success. One of the least glamorous jobs was cleaning gutters. WHAT’S TOP OF YOUR BUCKET LIST? I love travelling. Although we aren’t ready to start exporting yet, distributors in Switzerland, Norway and Sweden have already approached us. If travelling to some of these locations become part of dayto-day life at Pure, I certainly won’t be complaining! WHAT HAS BEEN THE BIGGEST CHALLENGE YOU’VE FACED AS A YOUNG ENTREPRENEUR? Being the first natural dog food to be made in a human quality facility resulted in huge challenges. When we initially turned to industry experts for advice, common opinion was that we couldn’t achieve it.

However we persevered, and finally we gained the regulation we required to start making Pure foods on a bigger scale than my kitchen. HOW MUCH DOES MONEY MOTIVATE YOU? I launched Pure because I had a desire for a real sense of achievement, something I could be proud of. However the underlying profitability of the company is paramount to that ambition becoming reality. Although money is not my number one motivation, we spend a significant amount of time looking at forecasting, margins and profitability to ensure Pure continues to grow. TELL US ABOUT YOUR VISION FOR THE FUTURE… Our first ambition is for pet lovers all over the UK to be able to feed a Pure food diet to their pets. After that we see huge export opportunities across Europe, and then the world. Contact: purepetfood.co.uk

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Mad Ad 2013 Final.pdf 1 09/07/2013 14:23:49

CMY

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PERSONAL PROBLEMS

Take ten WHY ME? I’ve experienced many ups and downs, both in my personal life and in business, like divorce, having to rebrand my business when I suspiciously found another offering the same services with the same name, getting ripped off, naively not taking out business insurance, and hiring people I couldn’t trust. My main personal problem is my mystery illness caused as a result of being spiked in a nightclub. I’ve suffered with blackouts ever since, and a few months ago things got worse. I suffered a dislocated shoulder in my sleep, which I’m still having physiotherapy for, as it hasn’t healed. Doctors think I may have had a stroke or seizure, but I have to attend hospital on a regular basis and undergo tests. This affects business meetings and my ability work. On a personal level it’s incredibly hard to deal with, I’ve had to give up hobbies that make me happy and I’m constantly worried about my health.

TALK SUCCESS

How do you manage your business when cracks appear in your personal life? Cemanthe Harris, founder of New Media Angels, has had her fair share of problems and reveals how she copes

Like most entrepreneurs my business is my life, so if something goes wrong in one, the other feels it. Here are my top tips for coping…

4) GO OUT AND DO IT Gather the knowledge you need in order to be perfect in business. I took a formal PR and marketing course, because I didn’t originally come from that background. Go out and network, meet people who can help you in business when times get tough.

I’m passionate about what I do.

5) REMOVE YOURSELF If you’re reaching your boiling point don’t shout, cry or pull your hair out - go away. Pick up a notebook and go to your favourite restaurant, park or coffee shop. Do something you enjoy, and take a breather.

Sometimes you’re going to need a holiday, or you’re going 1) REMIND YOURSELF to get ill; Every time I feel overwhelmed, you can’t do I remind myself why I’m in everything all business. For me, it’s not for the money, it’s for the freedom and of the time 2) TAKE A DUVET DAY Take a break when you feel you need it. You can’t work hard and be perfect all the time. You should do this for your employees – they deserve a break too. 3) YOU NEED SUPPORT I’m not talking about a business mentor or coach, but a confidante in your personal life. Mine is my mum; she hasn’t run her own business, but she can guide and rationalise my actions and thoughts. Your support figure needs to be your biggest fan but honest as well. If you’ve got a terrible idea, they need to tell you.

6) DELEGATE Are you sure you want to be a one (wo)man band? Don’t expect too much from yourself. Sometimes you’re going to need a holiday, or you’re going to get ill; you can’t do everything all of the time. Employ people to help you grow your business. Contact: newmediaangels.com

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25/07/2013 16:00

Pay less in the long run Introducing the New 2014 Volvo range

Book a demo today. Call 08457 300 140 or visit volvocars.co.uk/business The New 2014 Volvo range could save your fleet money year after year. With class leading CO 2 emissions starting at a mere 88g/km,* you could save on BIK & NIC whilst also being able to write off up to 100% of the list price against tax. Our City Safety technology comes as standard and can reduce accident-related costs by up to 65% †. And outstanding NCAP ratings across the range mean lower insurance premiums too. All of which shows why a cheaper car could cost a lot more.

• City Safety technology as standard • CO 2 from 88g/km* • Combined mpg from 83.1* • BIK from £43.96 per month§

Official fuel consumption for the New Volvo range in MPG (l/100km): Urban 18.6 (15.2) – 74.3 (3.8), Extra Urban 34.9 (8.1) – 91.1 (3.1), Combined 26.4 (10.7) – 83.1 (3.4). CO2 Emissions 249 – 88g/km. MPG figures are obtained from laboratory testing and intended for comparisons between vehicles and may not reflect real driving results. *New Volvo V40 D2 †Statistics supplied by Tristar Worldwide Chauffeur Services – October 2012 for 2007-2011. § Benefit In Kind rate for the 2013/2014 tax year on the Volvo V40 D2 ES Manual for a 20% taxpayer.

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BOOK REVIEWS

TALK SUCCESS

Business is Beautiful The hard art of standing apart By Jean-Baptiste Danet and others How do we link the hardness of measurement with the art of the often difficult to explain tipping points in the life of a company? This is one of the questions addressed in Business is Beautiful. The five authors of the book, Jean-Baptiste Danet, Nick Liddell, Lynne Dobney, Dorothy MacKenzie and Tony Allen, are all from Dragon Rouge, an international design and innovation business. They examine 20 businesses, and interview individuals at the forefront of companies like BMW, Rabobank, Conde` Nast

and Opower, to reveal what it takes to stand apart. Danet says: In among the prescriptive methodologies and quantifiable measurements models, we’ve seen at first hand that those businesses that surprise and delight, entertain and encourage, and that are relevant and sustainable for the future, all possess more human values. We wanted to capture their thinking, to demonstrate how beautiful businesses stand part. We say: The book identifies the five

“hallmarks” of business, the qualities they believe make a successful business, which cannot be measured easily. The five hallmarks are; integrity, curiosity, elegance, craft, and prosperity. The stories, from an array of companies located all over the world, identify their success in relation to the five hallmarks. This book provides an inspirational and insightful read, presented in a beautifully designed book with plenty of fantastic photography and illustrations.

Our verdict: Business if Beautiful is published by LID publishing, priced at £19.99 in hardback

The Book on Entrepreneurship and Property The Guide to Successful Entrepreneurship and Property Investment By Selchouk Sami Selchouck Sami is the founder of SS Business Consultants, and head of property at a north London firm of solicitors. Sami is the first lawyer in the UK to publish a book that explains how to use the entrepreneurial strategy known as instalment contracts when buying and selling a property. The book analyses the essential characteristics of successful entrepreneurs and discusses how readers can apply techniques to their own endeavours. He says: The great entrepreneurs know how to grab or create

opportunities and then make it happen by forming the right partnerships. By the time you have completed this book, you should be equipped with the fundamentals to enable you to decide what your next move in business is going to be; whether it is to find the right business partner or to seek advice from an expert. We say: In eight concise chapters the book illustrates how entrepreneurship has developed and impacted society by reviewing industrial revolutions that have set the framework for

economic development. The author Selchouk Sami also lists his 10 greatest entrepreneurs of all time, including Sir Richard Branson, Steve Jobs and Bill Gates. It’s an interesting read that approaches entrepreneurship with a legal mind. We’ve got one of each book to give away FREE. Be the first to follow and tweet us, quoting the book name @TalkBusinessMag & we’ll send you a free copy!

Our verdict: The Book on Entrepreneurship and Property is published by AuthorHouse, priced at £9.95 in paperback

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MONEY

What guarantee?

There has been an increase in the number of personal guarantees used for SME funding. Jumping on the bandwagon? Mark Hughes, corporate finance partner at Browne Jacobson LLP, tells you everything you need to know

ersonal guarantees (known as PGs) often play a key part in an entrepreneur obtaining funding, particularly at an early stage of a business cycle or when additional funding is required in excess of a company’s asset base. Generally, a company has limited liability - meaning that in the event of a company becoming insolvent, its directors and shareholders will not become personally liable above and beyond any previous contribution that they have made by way of loan or share capital to the company’s assets. A PG is an arrangement that sits outside of this general principle and creates a direct relationship between the person signing the PG and the entity relying on it; and while the use of the expression “guarantee” implies that reliance on a PG is something secondary, sitting behind the primary obligation of the company itself, from a legal

distinction they are usually drafted in such a way so that the obligation is one which sits alongside the liability of the company itself. For obvious reasons, owners and directors of businesses will want to resist giving PGs - after all why use a limited liability vehicle, such as a company to carry on trade, and then potentially undo that by signing a PG? Sometimes though, the giving of a PG is unavoidable. We all recognise that banks are increasingly risk adverse when agreeing the sanctioning of credit, and in addition to taking security over a company’s assets (such as by way of a debenture) they will also want a PG, and, in some cases, may want the PG itself backed by other security (in effect this is what people mean when they say they have mortgaged their own property to the bank as security for their business borrowings). In addition to banks, landlords also often seek

We all recognise that banks are increasingly risk adverse when agreeing the sanctioning of credit

personal guarantees. For example, they will often ask for three years’ audited accounts and trade references when considering whether a lease should be granted or assigned - and often a PG is requested in place of, or in addition to these. In the current market though, if there is a choice of otherwise similar properties available, the requirement for a PG may mean that you prefer one property over another. Whether you agree to give a PG or not is a decision based on your appetite for risk and whether the funding line or asset is so critical as to mean that the giving of the PG is worth it. One of the questions I would always ask when advising those being asked to give a PG is to consider the worse case position: how would you feel if the PG is called on in 12 months time? Is the risk one that you legitimately consider is worth taking? The law (and in effect the involvement of the law

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25/07/2013 16:13

TALK MONEY PERSONAL GUARANTEES

in regulating the giving and receiving of PGs) has grown in recent years. During the recessions of the 1980s, a large number of cases were decided as a result of a wife losing her interest in the matrimonial home because it had been used as security for the PG given by a husband in respect of his business interests. This now means that most funders (and some landlords) insist that anyone giving a PG receives independent legal advice from a solicitor. In turn, the solicitor is required to give a certificate to the funder

confirming that it has given this advice. This is for the benefit of the funder, to ensure that the PG cannot be set aside at a later date because the person giving the PG argues that they did not understand its full risks or it was entered into as a result of duress or undue influence. The downside of this process means that the How would you feel if the instructions of the bank have to PG is called be followed to the absolute, and in the 24-hour communications on in 12 st months time? world of the 21 Century, this process can seem to take an Is the risk one that you undue amount of time. If, having considered all of the legitimately risks in giving the PG, you still consider is consider that it is the right thing worth taking? to do, you should then think about limits being placed on it. Your starting point will be to want some sort of financial cap

– for example, an absolute sum or something equivalent to, say, six months rent in the case of a lease obligation. You may also want an opportunity to bring the PG to an end by serving notice on the entity relying on it; careful with this though – the PG will usually secure any liabilities that exist at the end of the notice period so it in effect chrysalises the liability. Lastly - and if you don’t take anything away from this article other than this, then it will still be worth it - you should remember that a PG will usually not fall away if and when you cease to be associated with the company. As mentioned, the obligation is not one of the company’s, but is your own obligation - meaning that if, for example, you were to sell the company or your interest in it, you could still be liable after the point of sale.

AUGUST 2013

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25/07/2013 16:14

Talk To us abouT whaT’s holding your business back... The ICAEW Business Advice Service is an easy way to get expert financial advice and reassurance on your business. Planning your business • Self-employment or Ltd Co. • Preparing your business plan • Raising finance

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You can start today with a free, straight-forward discussion with an ICAEW Chartered Accountant. There’s no obligation after your first session – just practical thinking to help your business succeed. businessadviceservice.com bas@icaew.com +44 (0)20 7920 3561 © ICAEW MSDPLN11656 10/12

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At Indigo Payroll Services, we provide a Payroll Service for small and medium sized businesses throughout the UK. Being qualified accountants, we understand that payroll means more to a business than just paying the monthly salaries. We are here to provide assistance and advice when required, if we see something that requires your attention, we will tell you. To find out what great value for money our payroll service offers, please try the Payroll Instant Quote Tool on our website.

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29/07/2013 14:27

SELF-FUNDING

TALK MONEY

Bootstrapping o me, bootstrapping is the best option when starting a business. It’s never easy, and it’s not always glamorous, but I believe bootstrapping will encourage you to become a better, stronger entrepreneur and ultimately incentivise you to intelligently grow your business. When my business partner, Jamie Turner and I first established Postcode Anywhere back in 2001, we went to meet a number of venture capitalists (VCs) including Barclays Capital and Elderstreet Investment. We went to market as the dotcom bubble burst and received rejections at every point. While I could understand their point of view, which was that our timing was poor and we didn’t have a track record, as a former City-based investment manager I know that there’s no reward without a degree of risk.

BEST THING I NEVER HAD I often refer to the rejection process as being the best thing that ever happened to us. I remember one of my biggest motivators in this period was receiving a flippant email from

Guy Mucklow was told by a VC he’d get eaten for breakfast, now he’s co-founder of Postcode Anywhere, an address management firm with 8,000 customers worldwide and a £7m turnover. He tells us why bootstrapping is best

a Barclays VC, who told me that we were doomed as the “gorilla” in our market would eat us for breakfast. I believed that he was ignorant and didn’t realise how disruptive our model would be – which is exactly as it’s turned out! GETTING STARTED Getting off the ground was a struggle, as we put our hands in our pockets. But while you might view starting a business with a tight budget as a disadvantage, I believe it can prove incredibly beneficial further down the line, particularly if it’s your first venture. Bootstrapping helped us foster a culture of self-sufficiency, which is so important in a small business. THE BENEFITS When cash is tight, you’re forced to start small, test

I believed that he was ignorant and didn’t realise how disruptive our model would be – which is exactly as it’s turned out!

your assumptions carefully, and then scale up. Along the way, you learn about your products and customers far more intimately. Bootstrapped companies learn from the beginning that customers, not investors, pay the bills. Bootstrapping a business makes you far more sensitive to what you’re spending your money on. With less capital to work with, you’re forced to search for the lowest cost options available on the market - driving a hard bargain from the outset, thus improving your margins. DO WHAT’S BEST FOR YOU Of course, every entrepreneurial venture is different. But learning how to do more with less is one of the most important skills bootstrapping has taught me. Contact: postcodeanywhere.co.uk

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26/07/2013 17:02

TALK MONEY PAYROLL SOLUTIONS

vs.online

Software

Is software the most efficient solution or is the flexibility of online better? Two payroll solution providers share their views SOFTWARE HITESH TAILOR, REGIONAL SALES DIRECTOR OF SUMTOTAL SYSTEMS, A HR SOFTWARE COMPANY

“

In-house operated payroll systems are easily scalable, efficient and simple to operate. It will perform quicker than an online solution as well I see software becoming as allowing full customisation. obsolete in the way that floppy An in-house solution will enable disks did payroll to easily link with other HR functions, such as learning and workforce management, allowing increased visibility of employee data. Processing payroll requires sensitive personal information. For organisations wary about where data is stored, an in-house, on-premises solution is the preferential option over online. For large organisations with thousands of employees, a big benefit is how an in-house, onpremises software system will streamline the data needed in order to process payroll, adding increased efficiency. One additional benefit to call out is that locally installed and operated payroll software allows businesses to ensure full regulatory It will perform quicker than compliance even as Government an online solution as well as requirements shift. Overall, an allowing full customisation in-house solution is an efficient, flexible and easy–to-use option.”

ONLINE TONY TRENKER, DIRECTOR OF PHROOT ONLINE, AN ONLINE PAYROLL SYSTEM PROVIDER

“

I have worked in software and online, so I have the perspective of both and I’d never take a step back to software from online or cloud solutions. I see software becoming obsolete in the way that floppy disks did. Online and cloud systems provide more flexibility. With cloud systems, you are able to access them from anywhere, on demand. You may think there are security issues accessing your payroll information from anywhere, but as long as you make sure your supplier encrypts sensitive data - like online banking sites do - it’s perfectly safe. With online, you only pay for what you need, if you have one employee you pay for one employee, whereas software comes in packages. If you buy a package for five to 10 employees and have five employees, you’re losing money. With online you don’t have to buy upgrades either. It’s reliable, efficient, great for cash flow, and I believe online and cloud systems are the future of payroll solutions.”

AUGUST 2013

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30/07/2013 13:42

TALK MONEY DIFFERENT FUNDING

What about the bank? The availability of traditional bank loans for SMEs is a constant concern: four founders tell us why they turned elsewhere

Alago An innovative provider of heated glove technology; used for gardening, sports, and everyday cold weather conditions. Managing director, Tony Curtis was full of doubt after being turned down on BBC Two’s Dragons’ Den until he turned to pension-led funding to make his business a success. Founded in: April 2010 Start up capital: None for the first year. Turnover: Still in first year, but predict £120,000 Net profit: £60,000 Growth rate: Started with one product in the UK, and we now have nine products in 13 countries. Type of funding used? Pension funding. I was taking a business course and an advisor

told me about it. So I contacted my provider, the company was valued to draw pension, and I borrowed £27,000. Why? I appeared on Dragons’ Den two years ago and got rejected - James Caan didn’t want to invest in a business that hadn’t sold any products and the other Dragons said they’d either seen similar products or didn’t see the point of them. The high street banks also refused to lend. What are the pros? You’re borrowing from yourself. It feels good when you pay back money as it’s going towards your future. And cons? It’s high risk as you’re gambling your future. You have to be 100% sure of your business. Contact: alago.co.uk

E-Car The UK’s first entirely electric pay-per-use car club, which is preparing for its national launch this month. Executive chairman, Andrew Wordsworth explains why a mix of two funding types fitted the business. Founded in: September 2012 Start up capital: £17,000 Turnover: £50,000 Net profit: N/A Growth rate: Next year hope to expand our fleet. Type of funding used? Combination of crowd-equity funding and angel investing.

Why? As well as receiving grants, we received £100,000 from crowd funding (from 62 investors) and off the back of that we found an angel investor who put in £215,000. It works perfectly because we have one external stakeholder who sits on the board, and 62 who are silent. What are the pros? It’s a good mix and we get the best of both worlds. And cons? Crowdfunding was the hardest, you have to believe in your product and be able to sell it well. Contact: e-carclub.org

AUGUST 2013

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DIFFERENT FUNDING

Ruk-Bug Ruk-Bug is a lightweight pushchair that can be folded and carried in an attached rucksack. Founder Russell Clifton turned to The Funding Store to secure £150,000 to develop the product. Founded in: April 2010 Start up capital: Having developed the design we needed £100,000 to develop the prototype, prove the concept, file patents and test the market. Turnover/net profit/ growth rate: We are still pre-revenue, but interest has been extremely positive. We have serious interest from major high street retailers, many independent retailers, distributors, and e-tailers. Type of funding used? Through The Funding Store we found a private angel investor

TALK MONEY

who understood the business, lived close by, and had the right amount of money to invest. Why? We looked into a range of investment options, but the problem was finding people who understood our business and who we could trust. I wanted to manufacture in the UK, which is unheard of in this market, and there were concerns over profitability. What are the pros? The Funding Store really understands small businesses and the funding landscape. They combine a very smart search facility with independent advice. For a small fee, under £200, they helped match the company to a suitable investor and helped me shape my proposal. And cons? I would say paying the upfront fee, but it was reasonable. Contact: ruk-bug.com

Grono One of the UK’s leading providers of high quality artificial grass, even after signing a deal to be the sole supplier of Jewson’s in 2011, was turned down by the major banks. Managing director, Lionel Gilmartin tells us about using trade credit from his supplier. Founded in: 2009 Start up capital: Borrowed from a friend. Turnover: £1m Net profit: 15% Growth rate: Double turnover from last year, and the year before. Intend to double this year too. Type of funding used? Trade credit from supplier Why? Despite securing a big retail deal, the banks were not lending. I couldn’t get on

any Government schemes, nor could I secure a £5,000 overdraft. I had nowhere to turn, so I got on a plane to China and had a meeting with our supplier. We agreed trade credit; $100,000 for 90 days, which gave us 60 days to sell our products. What are the pros? Good opportunity when banks are unwilling to lend. Suppliers were honourable. As we’ve grown, we’ve increased the credit facility to 120 days up to the value of $300,000. And cons? You need to be certain you can sell what you need to make payments, but also don’t run out of products too soon. And if you make a late payment you get a black mark. Contact: grono.co.uk

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SHARELOCAL OPTIONS AND OTHER TEXT SERVICES 72 SOURCING 72 SOURCING LOCAL PAYROLL PAYROLL SERVICES

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TALK TECHNOLOGY START-UP LOANS

A day in the life This month we go backstage, as we put Start-Up Loan recipient Take A Hint Theatre Company into the Talk Business limelight aniel Jones, 23, is the artistic director of Take A Hint Theatre Company. He and his two co-founders, Lucie Rice, 21, and Sally Smithson, 23, received a Start-Up Loan to set up their Liverpool and Stoke-on-Trent-based company.

DEAR DIARY… The first thing I do each morning is check emails and social network accounts. Following that, I prepare for the performances we have booked at two schools with my colleagues, Lucie, the musical director and Sally, the creative director.