Talk Business January 2013 by Talk Business

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TALK BUSINESS JANUARY 2013

FOR THE ENTREPRENEUR JANUARY 2013 ÂŁ4.50

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Readyfor

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New year, new rules: get prepared for the latest business policies

In thebag Julie Deane on the meteoric rise of The Cambridge Satchel Company ISSUE 16

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Inside

9 Editor’s letter 11 Letters 13 New Year’s resolutions 14 News & events

Focus on success 17 Face on the cover The Cambridge Satchel Company founder, Julie Deane 22 Take one company Hyper Recruitment Solutions, Apprentice winner Ricky Martin’s new venture

74 The face-to-face book Real word-of-mouth vs social media 77 Trust me, I’m an expert Thought leadership

Focus on people

25 Introducing… TB grills an up-and-comer

81 The people column Lee McQueen

26 12 steps to success Carly Ward shows us step 7

83 Keep your friends close Staff retention

29 The interview Wayne Hemingway MBE on UK startups

89 The staff appraisal Performance reviews

33 Book reviews

93 New year, new rules Employment law changes for 2013

34 The big business reads of 2012 Our top books from the past year

94 Secret diary of an entrepreneur Launch week of Oscar & Hooch

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

Focus on money

71 Online minefield Internet advertising

36 Finger on the pulse Financial gamechangers for 2013 39 RTI: are you ready? Our RTI special on the coming payroll changes

Focus on technology 97 Our man in the valley David Richards’ tech column 99 Where’s IT all going? IT changes for 2013 103 The future of IP Moving to IPv6 105 The 4G effect What 4G means for your SME

47 The future’s bright? Martin Spiller on financial forecasting 109 I’ve got an app for that… Our fave business apps 51 Before you sign on the dotted line… Material agreements 110 Nokia vs HTC This month’s best smart phones

Focus on strategy

113 Franchise news

55 2013: the year ahead This year’s business strategy

115 Spotlight Riverford Organic’s latest devotees

59 It’s a culture thing Why culture beats strategy

118 Take one franchisee The Creation Station’s Melanie Dawson

65 From small acorns… How to grow a business

Focus on marketing 68 The marketing column Kimberly Davis

115 009 contents.ga.indd 9

Focus on franchise

53 The branding column Rich With

121 Question time Questions to ask franchisors 123 Tea for two TB looks to new tea chain, Tea Monkey

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Comment

Scan this QR code to register for your free copy of Talk Business EDITOR

Helen Coffey helen.coffey@astongreenlake.com DESIGN

Stephanie Allingham stephanie.allingham@astongreenlake.com Ross Trigg ross.trigg@astongreenlake.com PRODUCTION COORDINATOR

An Truong artwork@astongreenlake.com WEB DEVELOPMENT MANAGER

Mitchell Finlay mitchell.finlay@astongreenlake.com ADVERTISING MANAGER

Scott Hartley scott.hartley@astongreenlake.com SENIOR ACCOUNT MANAGER

Damien Ward damien.ward@astongreenlake.com ACCOUNT MANAGER

Trystan Hurley trystan.hurley@astongreenlake.com Nathaniel Todman nat.todman@astongreenlake.com MANAGING DIRECTOR

Jay Boisvert jay@astongreenlake.com Circulation/subscriptions: UK £40, EUROPE £60, REST OF WORLD £95 Circulation enquiries: Aston Greenlake Publishing Ltd T: 0203 617 4680 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 ©Copyright 2013. All rights reserved.

A fresh start There is something about a new year that I find overwhelmingly exciting. Maybe it’s those brand new resolutions, all clean and shiny and just waiting to be broken. Perhaps it’s the tantalising promise of unknown adventures waiting just over the horizon, the ones I’ll keep chasing without ever quite reaching them. Whatever the reason, January always feels like a period of unique opportunity; a chance to “turn over a new leaf”, “make a fresh start”, and essentially refer to life as if it were one long clichéd proverb. This year though, it is not just a feeling – things really are going to be radically different in the world of UK business. With SMEs high up on the political agenda, there are a veritable plethora of legislative changes coming into play in 2013. From pensions to payroll, it’s a lot to keep track of, especially if you’re a small business owner; after all, it takes all of your time and energy just to keep on top of the day-to-day stuff. And although many of the proposed changes are aimed at making things easier and simpler for businesses in the long run, the implementation of these reforms looks to be a bit of an upheaval in the short-term. So in this New Year special, we look to what’s coming, providing you with information and tips on the application of these fast-approaching changes. The first step is awareness: familiarise yourself with the possible, probable and definite changes to employment law on page 93. From there, flip to page 99 for info on the disruptive technologies with the potential to shake up the SME scene. But the big news is happening on the money front; starting on page 36, check out the coming financial gamechangers, before reading up on the massive changes to payroll coming your way. Happy New Year,

Helen Coffey Editor

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. 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.

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Contributors

Meet the experts René Carayol, born in Gambia, is one of the UK’s leading

businessmen. He has extensive board level experience and has used this to build his own business philosophy, with a focus on inspirational leadership, culture and business transformation. Today he is chairman of Inspired Thinking Group, a marketing services provider. In the past, René has served as an executive on the board of directors for companies including Pepsi and the Inland Revenue, and in 2004 received an MBE for outstanding service to the business community. He has now established himself as a business guru and has worked with leaders including Bill Clinton and Sir Richard Branson. Read his thoughts on business culture on page 59

Justine Vaughan is founder and director of Triangle HR, a

Shropshire-based HR Consultancy. Triangle HR offers a full consultancy service in all areas of human resources and people management, and provides a professional, cost-effective solution for businesses across the UK. Justine has both operational and management experience across all levels of business, from the shop floor to the boardroom. She brings her 15 years’ human resources knowledge to improve and develop effective people, policy and process, achieving successful business performance and productivity. She is also a member of the Chartered Institute of Personnel & Development (CIPD). Read her opinions on performance reviews on page 89

Mark Paraskeva is CEO of the SME division at IRIS Software

Group. His remit covers software development, marketing, sales and customer support. Prior to joining ISG, Mark spent eight years at Autodesk where he was responsible for sales and marketing across Europe. Before this, Mark worked at Mentor Graphics as marketing director, general manager software development, and UK sales managing director. Previous roles saw him work for Cadence Design Systems, Digital Equipment Company and Siemens Plessey Roke Manor. Mark has a first class honours degree in electronic engineering from Southampton University and is married with two daughters. Read his advice on the coming payroll changes on page 43

Paula Volkmer is an associate at Fox Williams LLP. She advises

on HR and employment-related matters, including executive service agreements, disciplinary and grievance issues, termination packages and compromise agreements. Paula’s experience includes advising companies on the employment, employee share scheme and pensions aspects of corporate transactions. She has advised both employers and pension scheme trustees on pension issues including benefit changes, age discrimination and employer cessation debt obligations. Paula took her law degree at University College London and graduated with an honours degree before completing the Legal Practice Course at BPP Law School. Read her feature on employment law reforms on page 93

10 January 2013

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Letters

It’s a new year and a new perspective. Let’s see what our ever-growing community of switched-on Talk Business readers have to say about business in 2013…

A BIG CHEER FOR CSR

LETTER OF THE MONTH

Dear all, I liked reading about SMEs being encouraged to invest in CSR [Every little helps, December]. It is one of those things that small companies often shove to the very bottom on their list of priorities. Honestly though, the way the world operates now, it is not enough to bury your head in the sand. You are never too small to try and run your business in a responsible way, whether that is by letting your staff volunteer for charity or implementing a paperless office policy. No matter what your business, no matter what your industry, there are always things you can do. Regards,

Elsa Canning

THINGS CAN ONLY GET BETTER…

Well, despite your feature pronouncing ‘2012 the year of the SME’ [December], I have to say, for my fellow entrepreneurs and I, it was still a pretty tough year. Funding, as has often been said, was extremely hard to come by – I was turned down for a loan by several high street banks, who claimed the venture was too ‘high risk’ for them to invest capital. It is good that business is more talked about, yes, but we still need to acknowledge that, in a very fundamental way, start-ups are not getting the support they need and deserve. Too much waffle about how great small businesses are for the economy, not enough hard cash.

Jon McCaffrey

NOW IS THE WINTER OF OUR DISCONTENT Dear Talk Business, In the much anticipated Autumn Statement, the Chancellor has said the UK is making progress, yet growth is set to be lower, and borrowing higher than previously thought. I am not convinced that Britain is currently heading ‘in the right direction’, as Mr Osborne says. I fear that adhering to the current programme of austerity and cutbacks in spending will have an inevitable knock-on effect, shrinking the economy as a whole. The economic recovery of the UK hinges on investment in start-ups and SMEs. The UK has many small- and medium-sized companies, which have the potential to become world-class enterprises, and many firms are expanding, investing and creating jobs. However, very much more needs to be done to support our wealth creators of tomorrow in their efforts to build enterprises fit to compete and succeed in a global marketplace.

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: helen.coffey@astongreenlake.com snail mail: Aston Greenlake, 6 Mitre Passage, 8th floor, Greenwich Peninsula, London SE10 0ER

Tweets of

the month… @AlliesCom Great news from @TalkBusinessMag: ‘Survey finds rise in confidence of small businesses’ #SME @Prime_Advantage The CEO of HBVP predicting growth in 2013, despite slower Christmas sales #business @TalkBusinessMag @marketest Great to meet @ideasfactory_uk @GrowthAccel @TalkBusinessMag yesterday at @TheBusinessShow. Hope you all have had a good day today as well. @PolycomEurope Increased tech adoption changed way we communicate at work. #Remoteworking to become the norm by 2022. @TalkBusinessMag Bobby Lane @sshllp See my blog on #autumnstatement in @TalkBusinessMag… why there was not much for SMEs to be thankful for #AS2012 Nicola Potzas @YourVASupport Drafting an article I’m writing in @TalkBusinessMag January issue. It will be about virtual assistants. Look out for it! #entrepeneur #VA CSR info @schwild RT @EutheniaTouch: Latest @TalkBusinessMag, the year of the SME. Read more about #CSR for smaller businesses in my article, pg 64... @MartinRSpiller Shameless self promotion! My article “Bank says no” is on pg 47 of the fantastic @TalkBusinessMag

Dan Wagner, CEO and chairman, mPowa talkbusinessmagazine.co.uk 11

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2013: Resolutions

Well, we all know what our own resolutions should be: drink less, exercise more, grow the business. But what should the UK’s leading politicians and entrepreneurs be popping down on their New Year’s lists? Take note, Alan and co…

David and Samantha Cameron Davey and SamCam love to present a united front – it’s what they do best. But surely even the most united couple shouldn’t look exactly alike, unless they are in fact twins (in which case, they probably shouldn’t be a couple. No judgement, it’s just that casting the net a little wider than your own gene pool usually produces better results). Note to the Camerons, your resolution for this year:

“We, the Camerons, power couple and all round A-listers (trust us, you should see who comes to our dinner parties), solemnly swear to start the lengthy process of separating out into two individual humans. We will vary mannerisms and facial expressions to create the illusion that we are distinctly separate entities. We will stop kissing passionately in front of the paparazzi to convince everyone that we are sickeningly in love. We will not always wear coordinating, or worse still, matching outfits when out in public. However tempting it might be to ensure that David’s tie subtly picks out the colour of Sam’s dress… damn it, it’s too hard. Maybe we’ll just spend more time together instead.”

Richard Branson Who’s cooler than Richard Branson? When he’s not skydiving strapped to a pregnant kangaroo, he’s wrestling a shark, trekking through Peru or sending pandas into space, and all while making a million pounds every five seconds*. But that’s the problem – he’s a little bit too cool. It’s something of a downer for the rest of us, for whom an exciting evening involves meeting an old friend for a pint. Yes Mr Branson, if you wouldn’t mind pledging to be just a little more normal this year, it would take a weight off all our minds: “Richard here. Just snowboarding down a sand dune in the Sahara. Got a quick trip up to Mars planned later to shoot a little promo vid for Virgin. Oh, I’ve already broken it, haven’t I…Sorry,

Lord Sugar Good old Alan, he’s a British institution – but despite having been made a Sir, then a Lord, he still looks pretty miserable most of the time. Especially for someone reportedly ‘rolling in it’ thanks to the well-oiled Apprentice PR machine. We think his New Year’s resolution should read thusly:

sorry, won’t happen again. I resolve that in 2013 I will pretend to be like any other CEO or runof-the-mill entrepreneur. I will go into an office every day, wear a suit and tie, and feign concern about the collapse of the Eurozone, or whatever the latest crisis is that seems to be getting everyone who’s not me all hot and bothered. I will look at numbers, and graphs, and will spend no time whatsoever chilling on private islands or having adventures. The beard stays though. End of. *Warning: potentially wildly inaccurate statement.

“I, Lord Sugar, resolve to look less cross in 2013. I will probably still be cross – can’t change the habit of a lifetime, eh? – but will try to keep this hidden. I will: 1) smile once a day, minimum. OK then, in the interests of realism, once a day maximum. 2) tell contestants on The Apprentice that they aren’t too awful once in a while. Maybe even give them a ‘well done’ for trying hard when they’ve spent all day running around London buying baby bibs before pulling an all-nighter to customise them for some ridiculous trade show. 3) stop having high profile rants at fellow celebrity types on Twitter. It’s not big, and it’s not clever. Naughty Alan.”

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07/01/2013 16:38

News & events

THE BIG LOTTERY

FUND INVESTS

Dates for the diary Ebony Inspired UK: A black entrepreneurs network 16 January London www.eventbrite.co.uk The Art of New Business 17 January London www.eventbrite.co.uk The CFO Summit 22 January The Dorchester, London www.economistconferences.co.uk Intellectual Property for Tech and Startups 22 January The Google Campus, London www.eventbrite.co.uk The Mobile Enterprise 24 January Jumeirah Carlton Tower Hotel, London www.eventbrite.co.uk The Business Growth Show 29 January Leeds www.thebusinessgrowthshow.com

The Business Growth Show 1 February Northampton www.thebusinessgrowthshow.com Business Travel Show 5-6 February Earls Court, London www.businesstravelshow.com 42 Under 42 Dinner 7 February Birmingham www.insidermedia.com Dealmakers Awards 2013 7 February Crawley www.insidermedia.com The Supply Chain Logistics Event 7-8 February Celtic Manor Resort, UK www.scl-event.com The CPO Event 7-8 February Celtic Manor Resort, UK www.scl-event.com

THE BIG LOTTERY Fund (BIG) awarded almost £7m to further grow the successful Lloyds Banking Group Social Entrepreneurs Programme. This additional investment will enable the programme to deliver an impact worth over £14m in the UK, increasing the number funded to more than 1,000, who in turn aim to benefit over 120,000 people within their communities. Building on the original £6m investment from Lloyds Banking Group with additional funding from social investor, Nominet Trust, the new investment from BIG increases the ambition of the programme to recruit and support participants who have the potential to create well over £20m in social value and generate 4,000 jobs each year. The expanded programme will allow the social entrepreneurs to tackle UK societal issues from 14 different locations over the next five years. The additional grant enables the programme to provide a wider range of financial support and educational training at all of the Schools for Social Entrepreneurs (SSE), and sees the number of delivery locations double from seven to 14 sites. Speaking about the grant, Nat Sloane, England Chair of the Big Lottery Fund, said: ‘The School for Social Entrepreneurs is all about finding and supporting innovative ideas that will bring about real positive change to local communities, a mission that the Big Lottery Fund fully supports. ‘In these times of tough austerity, I am delighted that BIG is joining The Lloyds Banking Group Social Entrepreneurs Programme, a partnership that demonstrates how the private and charitable sectors can join forces.’

14 January 2013

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MERGER CREATES UK’S LEADING CROWDFUNDING NETWORK TWO SOUTH-WEST rewards-based crowdfunding websites teamed up in December to create the UK’s leading crowdfunding network. Exeter’s Crowdfunder, run by Crowdcube, the world’s leading equity crowdfunding company, joined forces with Plymouth’s Peoplefund.it, launched by KEO digital, the makers of rivercottage.net, fishfight.net, landshare.net and energyshare.com. They will combine technology and marketing platforms, branding and teams to create a platform to rival other new entrants to the crowdfunding market, including US-based Kickstarter. ‘It’s a game-changing move for Peoplefund.it and makes us the UK’s leading crowdfunding network,’ says Nick Underhill, Peoplefund.it’s co-founder. ‘Our aim is to inspire, engage and transform communities through enterprise, and following the arrival of Kickstarter in the UK, this is another huge step forward for British crowdfunding.’ ‘The merger of Crowdfunder and Peoplefund.it makes a huge amount of sense for UK projects that need funding,’ says Crowdfunder founder, Darren Westlake. ‘It will deliver scale, expertise and marketing reach – essential for those who want the best funding platform possible.’

UK IS TOP FOR

300,000 new ONLINE SMEs needed SHOPPING

A NEW STUDY released shows that 300,000 new SMEs are needed to restore the UK economy to its pre-recession peak. Valuable Assets, published by RSA and conducted by the Centre for Economics and Business Research (Cebr), revealed that SMEs are contributing more than half of private sector GVA to the UK economy. Private enterprise will grow faster than the UK economy as a whole over the coming years. This will help the UK to offset the effects of fiscal austerity measures, such as Whitehall spending cuts of 1% next year and 2% in 2014. Tara Kneafsey, SME director at leading insurer RSA, said: ‘Our study shows that an “enterprise army” will be the driving force for growth, providing a much-needed shot in the arm for the UK economy.’ The entrepreneurial spirit is certainly alive and well here in the UK, with individual

entrepreneurs contributing an average of £130,000 to the UK economy in 2012. While the number of large businesses has declined by 11% over the last ten years, the number of small businesses has risen by 35% over the same period, showing the growing strength of the burgeoning SME population.

OFCOM HAS RELEASED a report revealing that shopping online is more popular in the UK than any other country in the world, with uptake being driven by mobile and tablet devices. The report also discovered that UK consumers have now broken the £1,000-a-year spend barrier on Internet shopping – more than any other country in the research. In 2011, the per-head spending on e-commerce was £1,083 in the UK, up 14% from £950 in 2010. Ofcom revealed that UK adults like to shop on the move, with over a fifth of UK smart phone users using their devices to visit retail websites – the highest level out of the five largest European countries. Mark Haviland, MD of Rakuten LinkShare, commented: ‘The fact that Brits are spending more online compared to the rest of the globe shows our huge appetite for Internet shopping, and brands can clearly see the value of the online and mobile channels as a result.’

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Focus on success

Made in Britain From a Cambridge kitchen table to New York Fashion Week: Helen Coffey discovers the incredible story behind ‘The Brit It Bag’ and its creator, Julie Deane, founder of The Cambridge Satchel Company

ou could argue that every entrepreneur’s journey is its own unique, fascinating tale, what with all the highs and lows, the euphoric ups and devastating downs. But not every entrepreneur’s story is interesting enough to attract the attention of Google, let alone be

deemed riveting enough to form the basis of its latest ad campaign. If you think Julie Deane, founder of the phenomenally successful Cambridge Satchel Company, looks strangely familiar, it may well be because she and her family starred in the recent Google Chrome

campaign; it followed the ascension of the business from kitchen table venture to the hallowed pages of Elle magazine, demonstrating that “the web is what you make of it”. Well, if a story’s good enough for Google, it’s good enough for us. And it truly is an enchanting tale, which saw Julie, spurred on by the need to make money to move her daughter to a new school, start up her Britishmade satchel business on just £600. Five years on and it’s a different story. I go to meet her at the company’s Cambridge offices, where a bustling staff are busy taking orders, wrapping bags, and dealing with the media circus which has rolled into town since Julie’s high profile ad appearance. However, I feel duty-bound to stress at this juncture that, despite rapid growth, success and international acclaim, things haven’t changed in essence at The Cambridge Satchel Company: Julie’s mum, involved since the very beginning, is still an active part of the business. Rupert, beloved family dog and unofficial company mascot, still lounges around the office as if he owns the place, nonchalantly following his mistress from room to room. There is nothing “corporate” here, nothing clinical or soulless – it has the unmistakable feel of a family business. Julie herself is reassuringly down-to-earth and humble, still constantly surprised by the new accolades that seem to flood in on a daily basis: ‘I’m shocked every single time. I see our bags holding court next to the Prada shop in Paris, and I just can’t believe it!’ Now a firm catwalk favourite, the gift of choice for the cast of Mad Men from the producers

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07/01/2013 16:48

when they wrapped last season, and the beloved “It” bag of fashionistas the world over, it seems Julie will continue being shocked at her satchels’ success for a long while yet.

How did it feel to go from your kitchen table to seeing your bags stocked in Bloomingdales?

Weird. Really weird. We’d gone out, my children and my husband and I, for New York Fashion Week in February, and I said to my children: ‘Who can be the first one to spot one of our bags?’ We were passing Bloomingdales and my son said he’d seen one. There was one in a shop window in green, one in pink, one in yellow – we had seven shop windows. And they had ‘The Cambridge Satchel Company’ up on every single window, which was absolutely amazing. They also put us HUGE in the New York Post with these words – ‘The Brit It Bag’. Can you imagine? It was incredible!

Do you feel surprised when you see things like that?

Yes. I’m shocked, every time. And I always wish that everybody from here was standing with me – because I want them all to see it. I take photos on my phone and send them back and say LOOK AT THIS! And then equally, the people down in the factory in Leicester as well, because if they weren’t doing such fantastic work then our bags wouldn’t hold their own in places like Bloomingdales. For the people on the sewing machines to see that the bags they’re making are ending up being displayed in shops like that is incredible.

going to start my own company. I hadn’t decided what it was, but I know I would have started my own business anyway. But there’s a huge difference when suddenly there’s a deadline and a reason for doing it. You’ve got to stop the excuses of: ‘I’ll just look into this’, ‘I’ll just read this book by Peter Jones’, ‘Ooh, this business link website’s very interesting’. You can fill so much time “looking into things”. But my circumstances with my daughter put a very sharp, tight deadline on it, and a real sense of: ‘OK, stop messing about. You have to do something and you have to do it now, because there’s someone you love more than anything who needs your help.’ Sometimes you just need a bit of a kick.

“I know this business inside out because I have literally done every single job in this place”

You needed to make money to move your daughter to a different The business has had a really rapid school as she was being bullied. Would you have started a business expansion. How did you deal with scaling up the model so quickly? without that pressure? I had been talking to my mum for a year and a half before that happened, telling her I was

I think at each stage there are several steps, and each step brings different challenges. One

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thing that I always say to people is, you don’t need to know what the challenges are in the later steps. You just need to focus on the challenges that are facing you right at this minute. I’m really glad I didn’t know all the things that were coming!

How did you get your start-up cash? I’m not somebody who likes to have debt. I don’t like to feel that I have huge financial pressures, so everything that I’ve done has been selffinancing. I started off with £600, and never borrowed at all. The only way that you can do that is by keeping your overheads really low. Work from home as long as you can. And yes, it’s tough economic times: but it’s never been easier to start a business, because if you have a computer, like the Google Chrome advert says, the web is what you make of it. That computer can get you noticed all over the world.

How did you keep your costs down? The logo, I designed myself. The name, I came up with myself (that’s why it’s so straightforward!). The first website, I just Googled “How to make a website course free”. I taught myself over a few nights on the sofa, after the children had gone to bed. It puts you through a really interesting exercise – I feel like I know this business inside out because I have literally done every single job in this place.

“You can’t really claim to be the Brit It Bag if you’re having it made in Pakistan”

“I don’t imagine there’s going to be the Cambridge Satchel lemonade drink”

It seems viral, the way the business opportunity to stop and think: was picked up by the press. Was ‘Would I actually be happier there a point where you realised it doing something for myself?’ had really taken off? Just think, if you could do Yes. I think we were really lucky, because we were featured in a national paper in September 2009. Then in November, The Guardian put us in their Christmas Gift Guide, and I think it was because there were two things back to back: people really started to notice us. It was at that point that we decided it was time to move out of the kitchen. When we first came here, I remember saying to my husband: ‘It’s more than we’ll ever need, but at least we’ll never have to move.’ Haha! Famous last words.

Do you think we’re becoming a bit better at encouraging entrepreneurs in this country now?

I think that it’s become quite a sexy thing to do now. Where I would like to see it expand more is with middle-aged people. I think more people who have maybe been made redundant should consider it. Before you start looking at your next job that’s exactly like the one you just left, then perhaps if you have had some severance pay or something, take that as an

anything, what would you do? It might take some tweaking back, but there probably is a version of it you can do from your own home.

Did you ever feel pressure to make a bigger profit margin by outsourcing manufacturing abroad? We don’t make it easy in this country to find a manufacturer. I would go through Yellow Pages and Yell.com, and Google and Chambers of Commerce, trying to find somebody who could make leather satchels. It was really, really difficult. And meanwhile, people from Poland and Portugal and Taiwan would be emailing me constantly, saying, ‘We see you make leather bags, we can make leather bags for you’. It’s very difficult if you’ve got a demand that is outstripping what you can supply, to resist the pressure of saying, ‘Let’s just get them to make them, at least then my customers will be happy.’ I think that’s something that could be really improved upon. A manufacturing directory, particularly where the



How did you market the business?

When you don’t have a huge budget to start with, it makes you think creatively about ways of getting the word out. I emailed the fashion editors and the bloggers, but I couldn’t send them the bags – I only had six prototypes, so I couldn’t be sending them all over the place! I sent them photographs instead, and I told them the story: you just engage with people. That’s how you can get the really good feedback about how to grow.

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manufacturers on that directory were guaranteed to subscribe to certain ethical standards, would be a huge leap forward.

Do you think there should be more of an incentive for businesses to make things here in Britain?

It’s up to the individual really. Some people are very profitorientated, and if they can get something made for 50p less that’s OK, even though they seem to be surprised when they see relatives made redundant, and companies going under – they don’t necessarily see the link. I think there has been a bit of a culture of getting things made overseas, even if it’s only a small margin cheaper. But you get it made overseas and it’s a lot less hands-on. If I have a problem with a supplier or a manufacturer, I can just go and visit them. I can sit, face-to-face, and

say, ‘This is the problem we’re having – how can we get around it?’ Well, you’re not going to have that instant rapport with someone a long way away.

Is it important to you that the bags are made here?

Yes; I really like going to the factory, and seeing people sitting there, using their skills and their craft to make bags for us. I love that. And the fact that we bring all these orders and keep all these people busy doing what they’re really good at, and what they enjoy – it’s a big plus. It would lose a huge amount to me personally if the bags were coming from somewhere the other side of the world; they could be widgets, they could be anything. These would just be things that I have no emotional attachment to. And you can’t really claim to be the ‘Brit It Bag’ if you’re having it made in Pakistan!

What’s the future of The Cambridge Satchel Company?

There are lots of exciting things underway. We’re doing an amazing project with Disney at the moment. And there’s a new shape coming – and did you see the transparent ones? They’re the ones that went to London Fashion Week. We are working on a couple of other projects, which hopefully should be really successful for us next year. But I would say that, like French Sole, who do the pumps and are known for just doing those and doing them really well, we do satchels – I don’t imagine there’s going to be the Cambridge Satchel lemonade drink! We’re the Cambridge Satchel Company. We think that we make the best handmade satchels that you can get; we don’t forget our roots, and we don’t forget what we do well.

“Yes, it’s tough economic times: but it’s never been easier to start a business”

Contact: www.cambridgesatchel.co.uk

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Focus on success TAKE ONE COMPANY

You’re hired! Ricky Martin, he of the ridiculous name and infectious smile, is not only the winner of The Apprentice 2012: he is now the driving force behind his winning business idea, Hyper Recruitment Solutions

t’s not many who are on the receiving end of those two magic words, ‘You’re hired’ – at least, not when they’re coming out of the hardto-please mouth of Lord Sugar. Ricky Martin is one such lucky recipient, having fought his way to the top on last year’s series of The Apprentice to clinch the winning prize of Alan Sugar’s sterling endorsement. Well, that and £250,000 to fund his fledgling business idea, Hyper Recruitment Solutions. With all the back biting and bitching that goes on in the TV

“I admire anyone who’s started a business”

show, Ricky stood out for being, to put it in layman’s terms, a decent bloke; and there’s not many who would begrudge him the much coveted title. ‘At the start, I stood out for the wrong reasons by bigging myself up,’ says Ricky. ‘But I think as the weeks wore on, people started to see the way I really am, which is a lot more humble. ‘I started to stand out for the things I was doing, not the things I was saying.’ Now The Apprentice is finally done and dusted for Ricky, the ridiculous tasks finished and

the whacky ideas put to bed; now the next part of his journey has begun in earnest. Ricky says: ‘The Apprentice was hard, but in comparison to starting up a business it was easy. ‘Lots of people think that you have loads of money and success after winning. Real business people understand that it’s about putting in the hours and putting in the effort: getting in on the first day to an empty office and having to sort out the phone lines and the Internet access and the heating bills. ‘I admire anyone who’s

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Focus on success TAKE ONE COMPANY

“What makes us unique is my credibility and my passion”

started a business.’ He’s no stranger to hard work though, and has his eyes wide open when it comes to running a business. As a child, Ricky’s inspiration was his dad: ‘He was a bricklayer, and he taught me the harder you work the more money you can get. As a kid I didn’t know what my business would be, but I always knew I wanted to run my own company.’ It seems that Ricky has now found his niche, having settled on the recruitment industry: more specifically, recruitment for the science and technology

sectors. It may have seemed like a fairly staid idea for Lord Sugar to invest in – but HRS isn’t just any recruitment business, as Ricky is quick to point out. ‘What makes us unique is my credibility and my passion; I’m a scientist myself, and a member of the Royal Chemists Society,’ says Ricky. ‘We’re driven top down, and everyone else needs my passion for science. A lot of agencies are focused on recruitment and try and learn a little bit about science to get clients, but we are passionate about science.’ Indeed, Ricky is keen for the HRS name to be synonymous with credibility and genuine knowledge of the sector: ‘Our brand is all about being an absolute expert in science recruitment. We’re not just looking for a way to make money without caring about the industry.’ Of course, the other element that sets it apart is having arguably the most famous entrepreneur in the UK as its backer and partner. That’s got to be quite a commendation for a new business run by a fairly green entrepreneur, albeit it a dedicated and driven one. Has it helped Ricky launch HRS? ‘Yes, definitely. I was always going to start this company, and I could have done it alone: but I couldn’t position the way we are right now,’ he says. ‘Lord Sugar has given us a lot of money, but more than that, he’s been a very instrumental part of the company. He’s there in an advisory capacity.’ So he’s not there to do tea runs then? ‘He’s not part of the day-to-day, 9-5, no – but that’s because it’s my vision, and my area of expertise. It’s science recruitment and that’s my specialism, but we certainly couldn’t have come so far so fast without Lord Sugar.’ Ricky is confident in his skills when it comes to the science recruitment sector, and knows just what it will take to succeed in his market. As an

entrepreneur, he admits he is happy to stick to what he knows, and to what he is good at, in order to succeed. He says: ‘I personally think you really need to have an interest and expertise in what you’re doing. ‘It’s good to be innovative, but I think you’ll be more successful if you know what you’re doing – you can give a much better service to your customers. ‘I’m not against going out and thinking of big, new ideas, but I think you’re in a much better position to provide a good service if you know about it.’ And in fact this is the very reason Ricky pipped his fierce competition to the post last year; he convinced Lord Sugar that he knew the industry, he knew how to provide a first-rate service, and his business idea would be guaranteed to provide a solid return on investment. HRS is a very young business, and it’s far too soon to say whether or not it will be a roaring success. But Ricky’s enthusiasm for his industry is infectious, and he is a man with the brilliant combination of having big ideas but both feet planted firmly on the ground. When asked about the future of the business, he is confident about what he can do, and is clearly in it for the long-haul. ‘I always want to be part of the business,’ he says. ‘I didn’t do it to get rich quick – I want to be the company of choice for anyone recruiting in the science sector. I want to be known as a recruitment specialist, where you’ll always have a good experience, doing things in the right way and giving a really high level of service.’ With such dedication and admirable values in place from the outset at HRS, it can’t be too long before Ricky Martin is known for his fast-growth business, rather than for being Lord Sugar’s latest sidekick. Contact: www.hyperec.com

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Focus on success UP-AND-COMING

Introducing…David Hill We celebrate our first up-and-comer of 2013, the genius behind footwear design enterprise, Sneakerly, which uses a crowdfunding business model to sell indie sneakers

Sneakerly, the brainchild of David Hill, is the coolest idea we’ve heard about in years. Based on the crowdfunding model, it basically allows you to buy new footwear that’s designed and chosen by you. OK, let us explain: anyone can submit artwork to be printed onto sneakers, and Sneakerly showcase the designs on their website for consumers to decide which ones they make. Each design has 25 days to receive 250 pre-orders, called “endorsements”. If a design reaches this goal, the designer gets $2,500 (about £1,600) and they manufacture the sneakers to fulfill the orders. They’ll also make extra stock to place in their online store and to distribute to selected retailers.

Where did the idea come from?

The idea came while shopping for some new and original sneakers; it felt like all I could find were sneakers I’d seen before. In the same store there were hundreds of t-shirt designs that I’d never seen, some of which were designed by independent artists. I left the store asking myself why wasn’t the same true for footwear? Why couldn’t I own sneakers that had been designed by independent artists?

What’s your advice to young entrepreneurs trying to get an idea off the ground?

Share your idea with people you trust, get their feedback and then learn as much as you can about the market. Start with small experiments to test your ideas and don’t be afraid of changing direction.

If you weren’t an entrepreneur, what would you be doing today?

I’d still be designing products. I guess I’d be doing it from within a design consultancy like I used to though.

What’s been your worst ever job?

The summer jobs spent in warehouses unloading lorries and stacking pallets would have to be the worst!

What’s top of your bucket list?

To live in San Francisco and Tokyo. Tokyo is my favourite city, it has such a different and fascinating culture.

What have been the biggest challenges you’ve faced as a young entrepreneur?

As a small start-up with a limited budget, getting the press to listen to you is by far the biggest challenge.

What gets you out of bed in the morning?

How much does money motivate you?

If money was the motivation I’d have been a banker. Money isn’t the motivation, creating solutions to problems is. I guess that’s why I’ve always designed.

What’s been your proudest moment? My girlfriend and I spontaneously cycled 4,334km from Cairns to Melbourne. That was an adventure I’ll never forget, and the feeling we both had when we arrived at our destination 38 days later was immense.

What’s your vision for the future of Sneakerly? To build a great community of people that have fun creating and supporting indie footwear. To develop a range of different sneaker styles. Contact: www.sneakerly.com

My life I’m watching: I rarely watch television, but I do watch a lot of online tutorials I’m reading: The Lean Startup by Eric Ries I’m listening to: Deftones I’m surfing: Sneakerly.com…I use Flipboard a lot too

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Focus on success 12 STEPS

Carly Ward

The steps to success: Step 7 Is there a secret to success? Apparently so. And this month Carly Ward, founder of the Young Entrepreneur Society, is prepared to share it with us in the seventh step from her accredited entrepreneurial qualification

If I told you every thought you are thinking is creating your future, you might laugh and tell me I’m mad: but there really is a certain amount of truth in it. “The Secret”, or the “Law of Attraction” is all about things that you attract into your life, simply from the way you are thinking. Try turning your thoughts into a more positive form of thinking about what you want rather than what you don’t want.

“The Secret is not just positive thinking or wishful thinking”

How can you do this? It could be anything: relationships, personal goals, health, weight, education, career, recreation, money, hobbies etc. Let me explain. For example, a negative thought process would be: I don’t want to struggle financially. A positive thought process, in contrast, would be: I do want to be financially stable. Negative: I don’t want to argue with my brother/sister/parents/friends. Positive: I do want to have a good relationship with my brother/sister/parents/friends. You may have heard of the “The Secret” before – if not, then you will understand why it’s called this! “The Secret” is huge in America but not so much here in the UK. As a nation, we are generally not as positive as the Americans; if we were more like them we would have 900,000 more businesses trading (quoted by Lord Young). Do you class yourself as a positive person or a negative person? Do you surround yourself with people who add value to your life and have a positive influence? Or do you surround yourself with negative people who blame everyone else except themselves for the things that go wrong in their lives, and who zap all of your good energy? Be careful who you award the privilege of being your friend, business colleague or partner. You become the

average of the five people you spend most of your time with. Now, that’s a scary thought isn’t it? “The Secret” is not just positive thinking or wishful thinking. If I sat here all day dreaming up huge sums of money being paid into my bank account, even if I felt really positive about it, I’m pretty sure it wouldn’t happen – unless, of course, I had the intention of making it happen by working extremely hard. There is no point thinking positively unless you have proper goals to be positive about, but most importantly, you need to intend to reach your goals and take action. So, my recipe for the “The Secret to Success” summed up in an equation: Think positive + surround yourself with positive people who want the most out of life + set goals + intend to reach your goals + work hard + take action = SUCCESS. Read The Secret andThe Power by Rhonda Byrne; they will be the best investment you ever make. And let me know how you get on, I would love to hear from you!

Contact: www.yesnetwork.co.uk Twitter @carlyyes @yesteam

26 January 2013

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08/01/2013 10:01

Focus on success THE INTERVIEW

BUSINESS, THE HEMING WAY Wayne Hemingway, MBE is a British legend, having started his first design business, Red or Dead, from nothing. Now at the helm of social housing business, Hemingway Design, he talks to TB exclusively about starting out and moving forward

ayne Hemingway, MBE is an accidental entrepreneur. ‘There’s no such thing!’ you might well say. But when he and girlfriend Gerardine decided to empty their wardrobes and sell their clothes on a stall in Camden Market, they were not motivated by a burning desire to change the world, nor an unquenchable passion for design and retail: they were just broke and needed cash.

‘I was simply responding to the fact that I needed money fast, and that was it,’ says Wayne. But pretty quickly things changed; by the end of that first year they had 16 stalls, with shipments of second-hand clothing and footwear brought in from all over the world. International acclaim and success weren’t too far behind, and the pair, by then married, sold the business in a multimillion pound deal.

“We come from very hard working families, and that upbringing worked very well”

With their second venture Hemingway Design, a social housing business with attractive design and sustainability at its heart, nothing has been accidental. They have used all of the valuable lessons learned first time around to inform how they do things, and have proven that they can do buildings just as well as boots. Wayne shares their incredible entrepreneurial tale, spanning over 30 years of hard graft.

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When you started out, were you motivated by a love of design, or an entrepreneurial spirit?

I hadn’t even heard of the word “entrepreneur” – it wasn’t in my vocabulary. The love of design grew; at first I was simply motivated by survival, and wanting enough money to be able to stay in London with my girlfriend and carry on the adventure we’d started on. We enjoyed it from day one: to be young and make money from something that didn’t seem like hard work was great.

What were the biggest struggles and challenges you faced as a new business?

It never felt like there were any challenges. It genuinely felt like, ‘Wow, we didn’t know life could be like this!’ We just worked our way around problems. There are always the challenges of trusting someone to look after things and spreading yourself too thinly. But we managed to get through that.

How did you get from a market stall to UK department stores?

We’ve never been afraid to make friends, to take advice, and we’ve always been decent folk when it comes to suppliers and manufacturers. People generally liked working with us because we get on with people, and we’ve always been grateful for the talents of the wider team.

How did you make the transition from clothes to buildings? It’s the same question as: how did we make the transition from no training to selling clothes? We believed we could do something better when we saw the state of mass market housing, and we did it. You don’t need to be a genius – everyone’s lived in a house and knows how they want it to be. It’s not like flying a plane or being a heart surgeon. We were just as capable as anyone else.

What comes first with your designs – aesthetic, sustainability or practicality? The first thing we look at is: is this something we or our

families would use? And is it deliverable? You can waste a lot of time on things that aren’t deliverable. Practicality comes first, but we also want it to look and feel fantastic. So all three are important to us, but the first step is using our own experiences to decide whether we would like things to be a certain way.

Are big corporations truly embracing sustainability yet?

Most of them do embrace sustainability, because they know that the bigger you are the harder you fall. I’ve met with McDonald’s and Coca Cola, and let me tell you, I’ve never met such sustainable thinking businesses. It’s because they have to be. They’ll be the first to be pulled from pillar to post by the media and by the public if they don’t.

What’s the best thing about being an entrepreneur?

Being in control of your own destiny is nice, and being your own boss and the freedom that gets you is a big positive. You’ve got no one to blame except for yourself if things don’t work out. There’s never a dull moment, and if you thrive on change it really suits you. The reason it worked for me was doing it with my then girlfriend, now wife. We’re partners – it was a meeting of minds and a meeting of complimentary skills, and

it would be hard to imagine attempting it without each other.

What would your advice be to first-time businesses who are experiencing difficulties in the current climate?

“It never felt like there were any challenges. It all felt like a big adventure”

The important thing is to look at as many sources of income as you can – diversify. People shouldn’t be afraid of working part-time; there’s no shame in working in a restaurant in the evenings. The main thing is to stay afloat, even if it means doing some things that you don’t really want to do: that’s life. I had a very thrifty upbringing – without a doubt, the grounding I had was invaluable. Those lessons of never getting into debt or borrowing money stood both of us in good stead. We come from very hard working families, and that upbringing worked very well.

What’s the future for the businesses?

The business now, it’s growing pretty substantially, and our eldest two kids are getting involved in it. We just really hope it will become something they’ll be as happy in as we’ve been for the last 20 years. Contact: www.hemingwaydesign.co.uk

30 January 2013

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08/01/2013 14:11

Focus on success BOOK REVIEWS

STARTUP COMMUNITIES: Building an entrepreneurial ecosystem in your city by Brad Feld

*****

Startup communities are popping up all over the world. Startup Communities documents the buzz, strategy, long-term perspective, and dynamics of building communities of entrepreneurs who can feed off each other’s creativity and support. Entrepreneur turned venture capitalist, Brad Feld, uses his experience in the field – as well as contributions from innovative startup communities – to explore what it takes to create an entrepreneurial community anywhere, at any time. Along the way, it offers insights into increasing the breadth of the entrepreneurial ecosystem.

He says: This book is aimed at anyone who wants to be involved in creating, building, and sustaining a startup community in their city. Because entrepreneurs are at the heart of every startup and every startup community, this book is for every entrepreneur. Startup communities consist of many more participants than just entrepreneurs. Government, universities, investors, mentors, service providers, and large companies play key roles in the development of a startup community. This book is also for anyone in those organisations interested in entrepreneurs and startup communities.

We say: Startup Communities is designed to engage and inspire entrepreneurs everywhere. Using his hometown of Boulder, an active startup community, as a case study, Feld demonstrates the dynamics of building this kind of ecosystem. What sets this book apart is that it includes a set of clear approaches to make this happen, as well as laying out the set of attitudes that are needed to underpin a startup community. Definitely worth a look if you’re feeling fired up about looking beyond the ‘Silicon Roundabout’ to create real hotbeds of entrepreneurial activity in the UK.

Startup Communities is published by Wiley, priced at £17.99 in hardback and e-book

THE POCKET MENTOR: An entrepreneur’s on-the-go guide to life and business by Chelsey Baker

The Pocket Mentor is priced at £24.99 in Print-on-Demand and e-book

Rockstar Mentoring Group, the UK’s number one mentoring organisation for entrepreneurs, has launched The Pocket Mentor by Chelsey Baker. The book is designed for anyone running their own business, written to guide entrepreneurs through every stage by providing definitive solutions. The chapters are aimed at providing practical on-the-go answers to fast-track your business, from optimising focus, defining identity and being pitch perfect, to increasing market visibility and implementing powerful strategies. It acts as a personal business mentor to help answer key questions throughout day-to-day business life.

She says: I have successfully mentored many businesses throughout the UK for the past decade as a media and marketing expert, and now I have condensed all my knowledge and experience into a no-nonsense book – providing entrepreneurs with immediate answers, advice and 24/7 assistance to all their key challenges. For those who want to deliver outstanding results in their business, maximise their profits and reach their full potential, this book will be their perfect partner to achieve all this and more, whilst I will act as their personal mentor and motivator throughout.

*****

We say: The Pocket Mentor does exactly what it says on the tin – it’s a business book in miniature, filled with concise, easy-to-flickthrough chapters which cover everything you need to help you succeed with your business. Much of it is focused around you: helping improve confidence, learning how to look after yourself as well as your business, exploring the unplumbed talents you have hidden away. While a useful extra resource, it complements rather than replaces working through business issues with a real-life mentor; it covers lots of the universal business problems, but obviously is not tailored to you and your business.

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Focus on success READING LIST

THE BIG BUSINESS READS OF 2012

We reviewed a whopping 32 books over the last year here at Talk Business; but we don’t expect you to plough through them all. Here’s a list of our very favourites for the ultimate entrepreneur reading list

Start Your Business in 7 Days: James Caan Price: £12.99 Published by: Penguin in paperback original

The Rebel Entrepreneur: Jonathan Moules Price: £14.99 Published by: Kogan Page in paperback original

What’s the story? The face of the Start-Up Loans outlines how becoming your own ‘Dragon’ by grilling yourself about your business idea can save wasted time and heartache. He guides you through a process where you spend just seven days deciding if you have a bankable business idea. Good if…You’ve just had your billion dollar business idea, and the excitement is blinding you to potential pitfalls. This book will help keep your feet on the ground while you coolly assess whether it has legs.

What’s the story? Using examples of countless successful entrepreneurs who’ve made it by challenging conventional wisdom, Jonathan Moules explains how doing things differently and breaking the mould can turn your business into a world-beating organisation. Good if…You’re not one for sticking to convention. This book encourages those who don’t do things the “right” way, showing how brands from Jack Wills to Apple have thrown the rulebook out the window to achieve their phenomenal success.

Entrepreneur. How to Start an Online Business: Lucy Tobin Price: £12.99 Published by: Capstone Publishing in paperback original

Culture Shock: Will McInnes Price: £14.99 Published by: Wiley in hardback original and e-book

What’s the story? This handy little book tells the stories of some of the most successful Internet businesses, including Moonpig, Groupon and GoCompare. With interviews, practical advice and insights, it is designed to provide useful and applicable tips as well as inspiration. Good if…You’re about to start an Internet business. Learning from those pioneers who have made a success of trading online can help you avoid mistakes, and can be a great reminder that even the big boys started out small.

What’s the story? Will McInnes, MD of Nixon McInnes, wants us all to work in places that are supportive, open, motivating and conducive to creativity. Here he maps out ways to create an uplifting work culture and to understand, mould and implement a 21st century business model. Good if…You are looking to shift the culture of your business, to create a workplace that is underpinned by a different ethos: one that actually makes your staff spring out of bed in the morning, rather than subscribing to a lethargic presenteeism.

Think Big Act Small: Jason Jennings Price: £11.99 Published by: Portfolio in paperback original

Build a Business From Your Kitchen Table: Sophie Cornish and Holly Tucker Price: £14.99 Published by: Simon & Schuster in hardcover, paperback and e-book

What’s the story? Management guru, Jason Jennings, explains why the best companies never stop acting like start-ups. Taking the example of nine businesses that have managed to grow by at least 10% for ten consecutive years, he puts their practices under the microscope to find the secret of their success. Good if…You’re a medium-sized business and, having achieved moderate success, you’ve become stuck in your ways. This book will inspire you to try and recapture that start-up spirit.

What’s the story? The founders of notonthehighstreet.com tell the tumultuous story of how they went from being a kitchen table enterprise to an Internet sensation. They share the lessons they had to learn the hard way, in the hopes that you won’t have to. Good if…You’re trying to juggle mother/fatherhood with starting up a new business venture. These extraordinary women remind us that we’re all only human and we all make mistakes – but it’s still possible to achieve your goals.

34 January 2013

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Focus on money

Finger on the pulse We can’t predict the future for you, but we can prepare you for those financial game changers that will definitely affect your business in the year ahead. Darren Fell, founder of Crunch Accounting, gives us a financial preview of 2013

he start of a new year is always a nice time to be running your own business. Fresh from a relaxing Christmas break and a (hopefully scandal-free) office party, it’s a great time to evaluate and refocus. To effectively plan for the year ahead though, it helps to know what’s heading your way. As the Government swerves this way and that trying to kick the UK economy back to life, new rules and regulations are being introduced on a regular basis – staying on top of them can be a full-time job!

New rules

There are a couple of big financial changes businesses need to know about, mostly to do with the way payroll is operated. The first, and largest, is the introduction of Real Time Information (or RTI) for employee payroll. This scheme has been introduced by HMRC to make sure they are holding more up-to-date information on all company employees, as part

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of a larger modernisation of The Revenue’s services. The rollout of RTI means companies must submit salary and tax information about all their employees to HMRC on a monthly basis (on or before payday), rather than yearly. (See our features on what RTI means for you on pages 39 to 45.) Next year also sees the introduction of the Universal Credit, which will amalgamate six existing income-related tax credits. This new programme is designed to simplify the tax credit process, and also make it easier for the unemployed to return to work by limiting the amount of credits they will lose when entering employment. The Universal Credit won’t begin to be implemented until October 2013, and will see a staggered rollout over the following four years. Elsewhere, your employees’ (and your) personal allowance will be climbing to £9,205 at the beginning of the new financial year, and those lucky enough to be on the Additional Rate of income tax (earning over £150,000) will see it fall from 50% to 45%. There are also changes to Capital Allowances taking effect as part of the Finance Bill 2012 – now would be a very good time to consult a specialist to make sure you’re taking full advantage of this tax break, which can total up to 30% on any investment into new plant and machinery. At the time of writing, David Cameron has just announced a new “supply chain finance” scheme, allowing banks to release funds to SMEs once their client has notified their bank of their intention to settle an invoice. This could potentially alleviate many of the short-term cashflow problems faced by small businesses. Details are not yet forthcoming; however, this scheme could be one to keep an eye on.

Employment law

There are whole rafts of employment measures coming into force in 2013, which all

“New rules and regulations are being introduced on a regular basis”

“Early and effective communication is key”

business owners must be aware of. As with the financial rules, we will likely find out a few more headline changes during the 2013 Budget. The Government has already set a specific date for many legislative changes, or at the least promised an introduction in 2013. These are some of the major new measures we know about: The introduction of pension auto-enrolment will continue for larger businesses throughout 2013. Pension auto-enrolment is designed to ensure more employees are saving responsibly for their retirement by paying into a pension scheme. Employee pension contributions (which must be a minimum of 3% of their monthly pay packet) will begin automatically after 12 weeks of employment, and will be topped up by additional payments from their employer and the Government. The scheme started some time ago, and is being rolled out over several years (it won’t be fully rolled-out until 2018), starting with larger businesses. During 2013, businesses with between 500 and 50,000 employees will have to start auto-enrolling their workers. For specific dates, search for “Pension auto-enrolment staging dates” online. If your business’ staging date is in 2014, or even 2015, next year could still be the time to start thinking about auto-enrollment. Tim Jones, chief executive of the National Employment Savings Trust (NEST) estimates it will take businesses 18 months to fully prepare for the introduction of their schemes, and that some larger businesses already operating an auto-enrolment scheme took two years to get it in place. Early, effective communication is key – a survey by the Chartered Institute of Personnel and Development (CIPD) late last year revealed that only 53% of employees had even heard of pension auto-enrolment. A separate survey just a few weeks

ago indicated that number had risen only slightly, to 61%, despite TV advertising campaigns starring Theo Paphitis. Another big change is that, by March 2013, the amount of parental leave available to full-time employees will have increased from three months to four. Parental leave allows parents to take unpaid time off work to take care of childrearing duties such as visiting schools, or simply to spend more time with their kids. By summer 2013, the Government is also planning to introduce fees for employees to take their employer to Tribunal. These fees are designed to encourage employment disputes to be settled during mediation, and to discourage employees from bringing frivolous claims to Tribunal. Critics claim these changes erode employees’ rights, and could lead to more breaches of low-paid workers’ rights, as their employer will know they cannot afford to take them to Tribunal. At some point next year (the precise date is still undecided at the time of writing) the Government will introduce “protected conversations”. This provides a mechanism for employers to have “off the record” discussions with their employees, which cannot be used as evidence should the employee attempt to claim for unfair dismissal. If it is not derailed, next year will also see the introduction of George Osborne’s controversial “shares for rights” scheme, where employees can trade their unfair dismissal, redundancy and other rights in return for shares in their company. More changes will undoubtedly be announced in 2013, changes that will have an impact on how you run your business. Keep your ear to the ground, seek expert advice where necessary, and you should be just fine! Contact: www.crunch.co.uk

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Focus on money PAYROLL CHANGES

RTI:

ARE YOU READY? Have you heard of RTI? While you certainly should have done, it turns out a worrying number of you remain oblivious to the biggest payroll change to happen in 70 years. Never fear, our RTI special is here…

recent study by the All-Party Parliamentary Taxation Group (APPTG) found that only 34% of respondents had heard of Real Time Information (RTI), and those that had didn’t really understand the repercussions it would have on their business. Ouch. Considering RTI is quite literally the biggest thing to hit payroll since PAYE in 1944, you’d think people would have sat up and taken notice a little more. So, just in case you are one of those bemused 34% (and there’s no shame if you are), what is this mysterious RTI? According to HMRC, from April 2013, employers will be

legally required to report PAYE in real time. This means that information about all PAYE payments needs to be submitted to HMRC online each time a payment is made as part of the payroll process, rather than at the end of the year as they are at the moment. Simple, right? WRONG. This will have a huge impact on businesses of all shapes and sizes across the UK, and you need to start preparing now if you want to be ready for the coming changes. Luckily, we’ve gathered expert advice and info from IRIS Software Group, providers of software and accountancy solutions to UK SMEs for over 30 years, to make sure you’re clued up and ready to roll come the spring.



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Focus on money PAYROLL CHANGES

Always be prepared Why bother to prepare for RTI? Good question. Here’s an octet of very good reasons

1. Not all payroll software will

be RTI compliant There are an increasing number of payroll software providers who are announcing that their current software will not be RTI compliant by the time the change occurs, and many smaller companies are ceasing trading as they cannot get their products prepared in time.

2. It’s NOT optional

New PAYE schemes set up from November 2012 should start

submitting RTI from the time they register the scheme, and all businesses with 5,000 or fewer employees must start reporting in real time to HMRC by April 2013.

3. You are responsible

Employers will still be responsible for all tax deductions and calculations but will have to submit this data to HMRC whenever they make a payroll run (weekly, fortnightly, or monthly), rather than once a year.

4. There are new processes to learn Year-end process will be changing (no more P14s or P35s), and new starters and leavers will now be reported via a system called a Full Payment Submission. 5. Added pressure

With pension reforms occurring at the same time as the introduction of RTI, large numbers of customers will be requiring upgrades and training. This added pressure on software providers and accountants means training resources and consultancy fees will be at a premium in the first quarter of 2013. A recent survey at IRIS World found that almost two thirds of accountants are planning to increase fees due to RTI.

6. Data accuracy is key

There are a number of implications for both employers and employees if incorrect data is submitted to HMRC.

Employers: • More time spent dealing with employees and their tax affairs • Increase in the amount of tax code update rejections • Missing data could lead to your submission being rejected Employees: • Could be incorrectly taxed in-year • Risk seeing over- or underpayments produced in the future • Could affect the accuracy of universal credit calculations and employee’s entitlement to a state pension

7. A happy workforce

If you do not comply with RTI, your employees could be taxed the wrong amount and subsequently under- or overpaid throughout the year – and this could lead to a pretty disgruntled work force.

8. You face financial penalties

And just in case you needed even more persuading, fines of up to £2,000 could be incurred for late or incorrect submissions of data to HMRC. All info must be submitted on or before each payroll run. There is no escaping; RTI is happening and it will affect you. The best thing to do is to get educated, fast, so that you can plan ahead to make the transition smoother!

To find out more information about Real Time Information, download the IRIS Software Group’s free RTI guide. 

40 January 2013

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Focus on money PAYROLL CHANGES

Keeping it real… HMRC is in the process of implementing the biggest change to payroll since PAYE was first introduced in 1944. Real Time Information (RTI) will affect companies of all sizes and will be compulsory for all businesses with 5,000 or fewer employees from 6 April 2013. In the more immediate future, HMRC has recommended that start-ups begin the migration to RTI compliancy from 1 November 2012 onwards. Under the new guidelines, employers will no longer be able to just submit records to HMRC at the end of the financial year; starting from April, data will have to be reported on or before each payroll run (be that weekly, fortnightly or monthly). According to HMRC, the overall aims of RTI are to reduce burdens on employers, improve tax and benefit administration, and improve the overall taxpayer and employer experience. Once the change has been implemented, and companies have had time to adjust their payroll processes, this may be the case: but the action of migrating to RTI

“Almost two thirds of business process outsourcing providers said they were planning to increase fees”

compliant payroll software and processes is likely to cause many businesses a wide range of issues. If you are currently running your payroll in-house, you will need to ensure that you fully understand the legislation and the new processes you will have to start undertaking. There are four new processes that need to be implemented by employers when reporting information in real time: 1. First there is an Employee Alignment Submission (EAS), and this is a one off for each PAYE reference. HMRC wants this to be submitted before any further data, signifying you have officially joined the RTI scheme. 2. A Full Payment Submission (FPS) will include a range of employee data, year to date and payment values and must be reported every time a payment is made. 3. Employer Payment Submissions (EPS) will replace current P35s and will inform HMRC of any reductions to be made to the values in an FPS, or if there is no payment made for a specific period.

4. The final new process is a National Insurance Verification Request (NVR), which can be sent by employers to trace a national insurance number or confirm if one is correct. Another issue currently being faced by employers across the country is whether or not their payroll software supplier will be prepared for RTI. A growing number of suppliers are announcing that some of their products will not be compliant with the new legislation by April (Sage has already announced its intention to retire its TAS software due to this issue). Certain smaller companies are even having to withdraw due to the fact that they cannot cope with the transition to RTI (Payexcel has ceased trading after 10 years because of this). Companies who outsource their payroll will still face issues with the implementation of RTI; one of the biggest of these being a potential increase in prices. A recent survey IRIS conducted found that almost two thirds of business process outsourcing (BPO) providers said they were

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Focus on money PAYROLL CHANGES

“It is vital that you understand the legislation”

planning to increase fees due to the added work RTI would involve. Furthermore, 36% of respondents view the legislation as a “headache”, with another 29% seeing it as “unnecessary red tape”. The amount of planned price increases varied, with some firms only planning increases of 2-5%, while others are intending to raise their fees by up to 100%. If your business does outsource payroll, it is important to speak to your BPO as soon as possible and find out if it is planning to increase its prices. If it is, it could be a good idea to see if you could save money by running your own payroll in-house. HMRC has also recently released information about two potential penalty schemes to be put in place for employers who submit late filings or late payments from April. These penalties are set to be issued automatically, with penalties also being issued manually for incorrect submissions. HMRC stated that it wants the new penalty regime to be ‘as simple as possible’ to encourage compliance and for the penalties to be ‘fair, effective and influence behaviour’. For late filing there was a basic and advanced penalty model announced: the basic model involves an immediate fine at the default date, with penalties received for each individual default. More penalties would follow for outstanding returns at the six- and twelve-month points. The advanced model would see penalties based on the size of the employer instead of the defaults. A warning would be issued in place of the first penalty, with future penalties going out quarterly, rather than instantly like the basic model. For late payments, HMRC only intends to amend the existing penalty model, not change it completely. The suggested amendments included: automatic penalties on a monthly or quarterly

basis; fixing the penalty level to the number of defaults in the financial year; changing the date for late penalties to the day after the due date; and altering the legislation to reduce excessive penalties. HMRC is still in discussions about these schemes, and is planning to release further updates soon. As mentioned earlier, regardless of whether you run your payroll in-house or outsource it, RTI will still have an effect on you and your business, so it is vital that you understand the legislation. HMRC urged employers in October to start preparing, but recent polls have shown that a quarter of small businesses are still oblivious to the imminent arrival of RTI. With pension reforms occurring at the same time as the introduction of RTI, demand is only going to increase and training and consultancy fees could reach a premium in the first quarter of 2013. It is vital that employers educate themselves on the legislation as soon as possible in order to make the transition in April less of an upheaval.

Mark Paraskeva joined IRIS Software Group (ISG) in 2012 as CEO of its SME division. His remit covers software development, marketing, sales and customer support. Mark is also leading efforts to drive future development and is responsible for delivering organic and acquisition-led growth. Contact: www.iris.co.uk Twitter @IRISPayroll

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Focus on money FINANCIAL FORECASTING

The future’s

bright?

Creating a realistic picture of the sales and profits of your business can be harder than it looks. Martin Spiller, a partner with Jenson Solutions and angel investor, explains why financial forecasting is more an art than a science

n the last two months, my colleagues and I have been fortunate enough to participate in a number of investor forums and have seen pitches from a variety of sources, including MBA classes, start-ups and established businesses seeking development capital. It has proved beyond any doubt that entrepreneurialism is alive and well, and the energy, enthusiasm and creativity on display has been nothing short of inspirational. The consistent issue, seen in a majority of cases, has been the quality of the financial forecasts presented, in particular the headline sales and profit forecasts. Almost without fail the predicted performance of the businesses has been incredible. Yet, far from exciting the investors in the room, it has often served to undermine the otherwise

excellent presentations, raising real issues for the entrepreneur to overcome. There is a fine line between being positive when forecasting and being unrealistic, and it is vital to understand that far from being a science, financial forecasting is an art form: when painting the picture for investors, there are a number of key points to consider.

Start at the top

Creating credible financial forecasts starts with revenue. If sales are not carefully considered, then no matter how good the remaining assumptions, the business plan is likely to be doomed to fail; especially in terms of securing investment. The most common mistakes include: • Assuming sales will be “instantly on” from the beginning of the business, when in reality it takes time,

resources and effort to build a customer base. • Adopting a bottom up approach, whereby the expenses of the business are forecast and sales are added as a balancing figure required for the business to be viable. Invariably this creates issues, as with no reference to any market data, the projections are usually wildly optimistic. • Incorporation of the “magic hockey stick” where relatively slow revenues are suddenly transformed by an unexplained revolutionary breakthrough. In reality this rarely occurs, and most investors have seen it presented far too many times to be anything less than sceptical. There are a number of steps an entrepreneur can take to improve the accuracy of their projections: • Reviewing companies in comparable sectors or which

“Common sense has a strong role to play”

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Focus on money FINANCIAL FORECASTING

operate in industries with similar characteristics. A vast quantity of data is available from accounts, IPO documents, brokers notes or sector reviews. • Analysing independent industry reports to sense check planned market growth and market share by reference to the overall market size. • Running alternative scenarios, known as sensitivity analysis, to appraise the effect of delays or failing to achieve forecast sales, e.g. plans to review the effect of 10%, 25% and 50% reductions. For existing businesses, particularly those with a B2B focus, our approach is to critically appraise and segment the sales pipeline by: • Only including customers with signed contracts or those in the final stages of doing so at 100% of their contract value. • Discounting probably or highly likely customers to around 50%-75% of the contract value to reflect likely dropout. • Including early stage opportunities at a maximum of 25% of the likely sales value. Any increase on this should be approached with caution and would normally require detailed justification. If any of the assumptions underpinning the final forecasts are significantly different to the industry and comparable company data gathered, then it must be explained and supporting evidence provided.

It’s all about the margin

The next critical area is profit margin. As most early stage businesses fail as a result of cash flow difficulties, accurate cost forecasting and management is a critical skill. Our suggestion is to start by comparing the forecast gross margin to similar businesses or the sector average. Any significant variations should be reviewed, and justifications for the differences prepared and critically assessed. This is particularly important for start-ups, as the absence

THE BIG FIVE 1. Do not make claims that cannot be substantiated 2. Use a top down approach and try to avoid the “magic hockey stick” breakthrough 3. Use common sense when comparing forecasts to company, sector or market data. If it looks too good to be true, it probably is

4. Be sensible and cautious with cost forecasts as getting these wrong can be fatal 5. Make sure everything adds up, that percentages are properly calculated, and if

data is copied from other programmes, that all the links have correctly transposed

“There is a fine line between being positive and being unrealistic”

of historic data means care must be taken when forecasting materially different margins to existing businesses which may already benefit from economies of scale and efficiencies not necessarily available to newer entrants. Trading businesses should be cautious of making wholesale improvements in gross margin, as investors will critically assess these claims. Credibility and attractiveness are immeasurably enhanced by a considered and detailed analysis of where improvements will be made, and supporting evidence is critical.

Watch the overheads

Operating costs often cause particular issues and offer a number of pitfalls to unwary entrepreneurs. Perhaps because of the advent of technology, less care appears to go into forecasting overheads of the business than ever before. Common mistakes include: • Failure to account for employers’ National Insurance contributions within wages and salaries, a significant omission given that it adds to 13.8% of additional cost to the business. • Maintaining an unrealistic cost base structure over the forecast period, especially with regard to directors’ salaries, costs of attracting and retaining key staff, and core fixed costs, such as rent. • Incorrect treatment or omission of key items, such as bad debts, depreciation, and provisions for contingencies.

Common sense has a strong role to play. For example, in a business plan reviewed recently, the forecasts suggested that directors’ salaries would, after five years of hard work, remain at the current level of £30,000 per director, despite sales increasing from £150,000 to over £24m. While the employees increased from four to a forecast 95, rent expense remained constant throughout based on the year one serviced office cost. All of which was immediately exposed by the improvement of operating margins from a healthy 21% to an unbelievable 45%, and which was fully endorsed by a confident MD, at least until the errors were revealed to him.

Final thoughts

Financial forecasting is not a straightforward task. There are a number of factors to consider, and a lot of potential errors to make. Most critically, in seeking to attract investors, entrepreneurs have a fine line to tread to ensure that they attract investment without making claims that are unrealistic.

Particular thanks in the writing of this article go to Andrew Harwood, a partner with Jenson Solutions, for his invaluable input and assistance.

Contact: www.jensonsolutions.com Twitter @MartinRSpiller

48 January 2013

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Focus on money CAREFUL CONTRACTS

Before you sign on the dotted line… This month NaviStar Legal founder, Jo Rogers, advises us on minimising the impact of our material agreements another serious effect such as insolvency or (at the most severe) have criminal sanctions imposed.

“Implement processes to minimise the impact of those agreements on your business”

Likelihood

The likelihood that an agreement will come to an end is then also rated on a scale from one (unlikely to end) to four (may imminently come to an end).

Minimising risk

A “material agreement” for any company is usually an agreement, transaction or commitment (verbal or written), that has a value, length or is of a type that would be likely to cause substantial, irreparable, financial or reputational damage to a company if it came to an end. It is good practice to determine which agreements are “material” in your business in advance and to implement processes to minimise the impact of those agreements on your business.

What is a material agreement?

A material agreement is likely to be an agreement that either: • Contains high liability for the company • Contains a special discount for customers • Has a fixed term of more than six months • Cannot be terminated within 60 days (with or without payment) • Is unusual or abnormal in nature such as a joint venture agreement • Has an aggregate sales value

representing in excess of 10% of the anticipated turnover of the company in the next 12 months. You can use the following simple formula to consider the risk of any agreement: potential costs x likelihood = risk

Costs

The potential cost is an estimate of the costs that may be incurred if the agreement comes to an end. This may include any financial costs (including lawyer fees, fines or penalties) as well as the cost of someone’s time to deal with the issues or repair your reputation. You can rate each agreement on a scale of costs from one (low risk) to four (devastating risk). Depending on the size of the company, a “low risk” agreement could cost a maximum of £100; it would not cause the loss of any additional clients and would require a minimal amount of anyone’s time. A “devastating risk” agreement could cost the company £100,000+, or have

Clearly, those agreements rated ‘16’ will have a higher impact on your business and need minimising further than those rated as ‘1’. Depending on your company’s appetite for risk, you can then agree internal approval processes for the signing, monitoring, and immediate resolution of issues relating to these agreements. For example: • If there is more than one decision-maker in your company, then decide not to allow material agreements to be signed without review by at least two decision-makers • You may want to have all material agreements to be drafted (or at least reviewed) by a commercial lawyer before they are signed • You may want to consider taking out insurance (if available) You will certainly never eliminate all legal risks in business, but determining and mitigating material agreements is a good start. Contact: www.navistarlegal.com

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08/01/2013 14:57

Focus on Rich With

strategy

Branson, ’Bucks and the Big Smoke

Who came out on top, and who had a serious PR fail in 2012? Branding boffin Rich With kickstarts his first column of 2013 with a look at the lessons we can learn from what went down last year So it’s the start of a whole new year, and we’re all flush with enthusiasm about how we can take our brands forward in 2013. But before we all leap in with both feet, let’s see what we can learn from last year. If you were looking to piss off hipsters in 2012, then your branding role model was surely Starbucks. Even though it was brought before the Public Accounts Committee alongside Amazon and Google on tax avoidance queries, it managed to take the brunt of the flack (probably because the public still need to buy Christmas presents, but they can find somewhere else to drink their coffee). The “Branding Whiz Who Looks Like he Slept in his Car” Award goes to Mike Dubin of Dollarshaveclub.com. Who’d have thought that the year’s best viral marketing campaign would be promoting monthly subscriptions for razors? 2013 is going to be about content marketing more than ever. The John Lewis Award for Christmas Campaigns goes to…surprisingly, John Lewis. Another spectacular end-ofyear campaign that can be summed up as “snowmanon-a-promise” has meant the firm and ad men, Adam & Eve/ DDB, could pat themselves on the back this crimbo. As well as the ad, there was also a social media campaign (#snowmanjourney) and in-

store promotions to carry the brand forward. To the public, Richard Branson is essentially “God’s Vicar in Charge of Entrepreneurship”, so he can hardly do any wrong. As well as pushing his Virgin Galactic brand forward, he continued to thumb his nose at big business and even Government in 2012. Pointing out the serious flaws in the West Coast mainline bid process, and then gallantly stepping in while giving all the profits to charity, should see the Virgin brand still holding a place in people’s hearts in 2013. The London brand is the star of 2012. The World’s Greatest City™ held a soggy jubilee weekend, a bonkers Olympics, and a lifeaffirming Paralympics – and it even managed to host a future unborn King or Queen. 2012 was truly London’s year, and it achieved all of this with wit, gusto and panache (and thankfully no major traffic cock-ups).

“The public still need to buy Christmas presents, but they can find somewhere else to drink their coffee”

So what can us SMEs learn from these brands? At face level it’s fairly obvious: good customer service, a cracking philanthropic attitude and a big hunk of creativity. But look deeper and there’s always two sides to the story. Tax avoidance is carried out on a far greater scale by organisations that don’t just sell coffee for a start. Some would argue that it’s all a question of PR, but even the best PR can’t hide the truth for ever. My own highly insightful advice for your brand in 2013 is this: be creative, content led, use social media properly and think what you can give to your clients. And while you’re at it, best to steer clear of working for drug barons too. Happy New Year. Contact: www.gohoot.co.uk

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Trading online is one of the biggest things in business today? “Why?” We hear you say, “But how” we hear you cry? Check out these statistics to see why e-commerce is the biggest thing in business today and how we can help your business grow

10 Amazing Statistics About E-commerce

“The UK is globally No.1 for e-commerce.” — Wall Street Journal “The value of e-commerce in the UK is £485 billion with a 15% growth rate” — UK ONS “The average UK online shopper spends £3,370 per year” — WorldPay “85% of the European online population has purchased goods online” — Mashable “Chinese e-commerce giant Alibaba made $3billion sales in one day” — China Daily “B2B sales account for 85% of total e-commerce spend” — The Drum “If you do e-commerce, then for every £1 you import, you export £2.80” — BBC “INDEZ clients export in volume to over 70 countries” — INDEZ “The average turnover of INDEZ clients grew 70% last year” — INDEZ E-commerce sales via INDEZ clients totaled eight figures in 2012:

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Focus on strategy 2013: THE YEAR AHEAD

2013:

The year ahead David Sturges, chief operating officer at hosted desktop company, WorkPlaceLive, discusses what companies can do to ensure their business remains competitive in 2013

hile figures show the UK officially came out of recession in the third quarter of this year, the governor of the Bank of England, Sir Mervyn King, has warned that the UK economy risks suffering a triple-dip recession next year. This is traditionally a time of year when business owners are planning budgets for the year ahead, and questioning the seemingly impossible dilemma of how to increase efficiency and also keep costs down. Tough trading conditions are predicted for the next few years and this factor, combined with more dynamic players in the market and demanding clients, means companies need to ensure they do all they can to stay ahead of the game. According to business leaders around the world, technology is the single most important differentiator for successful organisations; a view that is

“Adapting working culture is going to be the key to success”

held by 75% of 1,709 business people that took part in the 2012 IBM Global CEO Study. BT Business has recently predicted that the “move to the Cloud” and the “consumerisation of IT” are the two megatrends that will transform the way businesses think about their IT. So what can businesses take from this, and how can they ensure they remain successful and competitive in 2013?

Changing work patterns

Advances in technology should have made our working lives easier. However, the fact that smart phones, tablets and laptops are pretty much constant companions, even when people are away from the office, means that many people are working 24/7 and that work will fall apart if they are not constantly online. These devices do allow flexible working for many people, which can help

improve productivity; however, businesses need to ensure their employees are working more smartly but not necessarily longer hours, just because they have the potential to be available 24/7. British workers clock up some of the longest hours in Europe – averaging around 42.7 hours a week – which many believe isn’t good for our health. Research by the Finnish Institute of Occupational Health found that those working days that were longer than the traditional eight hours had a 40-80% greater chance of heart disease. The same research team also found longer hours meant an increased risk of dementia in later life. Equally, clients are becoming more demanding and expect faster responses from businesses and better customer service. All of this has meant that working patterns in Britain have changed, with a move 

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Focus on strategy 2013: THE YEAR AHEAD

away from the traditional nineto-five office day. Increasingly, employees need to access data and answer emails away from the main companyâ&#x20AC;&#x2122;s office, or even respond out of office hours. However, to date, UK businesses have been reluctant to promote flexible working, and research has shown that the UK lags behind countries such as Finland, Sweden, Australia and the United States in offering flexible working arrangements. Research of 2,000 workers from Skype and You Gov earlier this year found that 70% of people want to work from home more often, but over half of these worked for companies where this was not allowed. With more employees demanding greater flexibility from their employers, companies will soon have to start adapting to support flexible working. A recent study by analysts Gartner revealed that 84% of organisations in the UK have a remote workforce to some degree, and this trend is set to continue.

Increasing flexibility

We are also increasingly becoming a global economy, which means many businesses need to have their workforce available at all times of the day in order to compete. UK executives are also travelling more frequently. According to the Global Business Travel Association (GBTA), the UK has the second highest level of spending on business travel in Western Europe, with $40.2bn spent in 2011. GBTA also predicts a 2.3% increase in spend on domestic business travel in 2013 and a 3.9% increase in international outbound business travel. A growing number of companies are therefore considering offering flexible working, and are turning to solutions such as virtual hosted desktops to support their increasingly nomadic workforce. To ensure

that employees can access their files on the move, these kind of cloud computing technologies are much more reliable than simply using broadband, and are less costly, especially when overseas. Employees with a hosted virtual desktop are able to access all their files and emails from any device with an Internet connection anywhere in the world, which means that productivity levels and workloads are never compromised by business travel.

In practice

One small company that has recently expanded its business following the implementation of a hosted desktop solution is IT recruitment company, Nicholas International. Founded seven years ago, the company has a head office in London, but has added offices in Paris and, more recently, Poland. The company has expanded rapidly and has 25 consultants, many of whom travel extensively. The move to a hosted desktop service has allowed its consultants to work seamlessly while on the move, improving productivity and business performance. One of the key attractions for the firm was getting rid of its servers and no longer having to do any IT administration, including software updates and IT security management, as well as having all three offices on the same IT system.

â&#x20AC;&#x153;Companies need to ensure they do all they can to stay ahead of the gameâ&#x20AC;?

can support flexible and remote working, enabling employees to be productive from any location. Adapting their working culture and embracing new technologies is going to be the key to success for many companies over the coming years. Those that do so will reap the rewards, especially as the economy starts to grow, and they will be in a much better position to compete on the global stage. Contact: www.workplacelive.com

Moving forwards

With the Bank of England only forecasting 1% growth for the UK economy and the world economy predicted to remain sluggish for many years, it seems we are not out of the woods yet. Companies need to do all they can to ensure they survive in what has been the longest economic downturn in history. The good news is that advances in technology have made it increasingly straightforward for companies to implement an IT system that

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Focus on strategy CULTURE

It’s a culture thing René Carayol, chairman of Inspired Thinking Group and respected business guru, argues that, when it comes to building a successful business, culture beats strategy every time

t can be tempting for businesses to overemphasise the focus on strategy, while inadvertently underplaying the power of culture. I would argue that culture is in fact more important than strategy. Culture is all about the psychology, actions and beliefs of a group of people. I believe there are two definitions of the kind of culture that creates momentum for any business. The first one is: “Culture is what happens when

the CEO leaves the room”. The second definition is: “The way we get things done around here.” It is all about the attitude of those working for your company. The most important thing about culture is that it’s the only sustainable point of difference for any organisation. Anyone can copy your strategy, but nobody can copy your culture. So why would you leave it untended? The values of any business should be nurtured and used

“It is better to take attitude over skills every time. We hire for attitude, we train for skills”

to define and then enforce the culture of a company. The best businesses are the ones that have a culture that has grown to be bigger and stronger than any one individual. If your culture is strong, it gains power through inspiring your people to conform to it. It becomes the thing that links everyone together, no matter what department they’re in. If your people become engaged with the company, the strategy is more likely to be “owned” by all and focused upon. Culture is ITG’s biggest weapon; it is the fuel that drives the whole business forward. It is our culture, not just our strategy that makes us brilliant. In employing new talent, you have to be discerning in what you’re looking for. I would suggest that it is better to take attitude over skills every time. We hire for attitude, we train for skills. It is more beneficial to hire someone with the right mind-set who will fit in with the culture of your company, than someone with strong skills and great experience, but an inappropriate mind-set. The banks have been going wrong, perhaps because they are far too focused on individual success rather than a teambased culture. They’ve become too profit-centric, rather than customer-centric. No industry is exempt from the importance of culture, which is a key part of a brand’s reputation. The selling off of Lloyds’ 632 branches to the Co-operative Bank may well prove this. Co-op stands for values. Virgin Money’s acquisition of Northern Rock will again bring their values to the fore. I think that we’re starting to see clear shifts now. If you ask people the question, ‘Who would you want to bank with, Lloyds bank or Google?’ They’d probably choose Google. If you said, ‘Royal Bank of Scotland or Apple?’, they’d probably choose Apple. We are going to see some interesting collaborations in the future, where the “front end” might be a supermarket and the

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Focus on strategy CULTURE

“back end” might be a traditional bank. It will take many years for the banks to lose the stigma of the last five years. The biggest shift we’re seeing is from product-centricity to customercentricity. The companies that just push products will wither away; the companies that have clear values and seek to discover what the customer wants, and then deliver it, will win. Some companies have managed to get the balance of being performance-driven and values-led spot on. Google is one of those companies. They are hugely performance-driven, but if you speak to their people, they love working for Google. One of Google’s mantras is: ‘Don’t be evil.’ I think they have been able to successfully embed this in much of their organisation. Virgin, and maybe more surprisingly, McDonald’s, have also managed to nurture a strong set of values throughout their organisations. In creating an inspirational culture, successes must be celebrated. At ITG we spontaneously celebrate every success. One of the most valuable parts of our culture is that we focus on strengths rather than weaknesses. We catch people doing the right things and shout about it. The only reason why we would be interested in mistakes is because we can learn from them. This culture has to originate somewhere though. It doesn’t just happen. It is a leader’s responsibility to identify a cultural vision for the company, to live and breathe it themselves, and then help to steer the rest of the company in the right direction. Culture comes directly from the behaviour of the leaders, and it is their duty to involve and inspire the whole organisation. You show me a risk-averse leader, and I’ll show you a riskaverse business. You show me a risk-embracing leader, and I’ll show you a risk-embracing business. So Branson’s businesses will always be

“Anyone can copy your strategy, but nobody can copy your culture”

risk-embracing, Mervin King’s businesses will always be riskaverse and cautious. Having Bob Diamond as a leader means it’s going to be seriously profit-embracing, and fairly audacious – it’s not necessarily breaking the rules, but it might well be bending them. If you’re going to change your culture, you have to start at the top. You’ve got to use symbols of success and symbols of change by bringing in people who exemplify the cultural behaviour that you’re looking for. Bring in people with high values, people who don’t expect a bonus for doing the right thing. Bring in people who think about the customer, people who care about their people. The

rest of the business will then start to change. Close proximity to a positive role model is a very powerful driver of change. The rise of the discerning customer and the fragmentation of the media have made culture even more important. Anyone with a mobile phone and Internet connection is now effectively a member of the paparazzi, a photographer and a blogger. The messages individuals and consumers are exposed to have changed. Before, if one customer was really upset with your product or your service they would write you a letter, or maybe even email you. That kind of complaint was containable. One tweet, however, can easily

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09/01/2013 09:23

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very website needs a purpose, a reason for existence. The days of brochureware are well and truly over with the adoption of multiple device access and the merging of online and offline into a single user experience. A site needs a goal and that goal needs to be measured and monitored. But if you ask site owners, I’d bet you the vast majority will give you a narrow vision of their expectations. “It’s there to sell,” or “It’s an enquiry generation tool” would be common responses. But if you ran your business on such a narrow footing, you’d be out on the street in no time at all.

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customer, but just what can you do to encourage repeat business? Whatever you are selling, how can you change your customer from one off purchasers to consumers of what you provide? Friendly Referral There’s nothing better than receiving a call out of the blue saying “a client of yours told me I had to call you!” You know you are half way to a successful deal already. In this article, we will look at some tools and techniques which will help, enable and encourage existing customers to put their networks in touch with you. None of this is rocket science. It is simply a methodology of reflecting how you do business in the real world more accurately in the virtual. But it is a process. It takes time to implement and evaluate. It needs to be measured, monitored and refined. It doesn’t come entirely without cost, either financial or as an investment in time, but the rewards are well worth the effort. Peter Clapperton Searchsmith Director

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08/01/2013 16:25

Focus on strategy CULTURE

“If you’re going to change your culture, you have to start at the top”

hit 100,000 people. You can no longer simply say: ‘Oh, we’ll deal with that next week.’ Businesses must now wear their hearts on their sleeves, and demonstrate their values openly and honestly. It is so much better that you listen to the initial whispers on social media: otherwise you’re going to have to listen to the crowd shouting. There’s no hiding place anymore. So the question is: how do businesses cope with this? I

once ran a conference where the brand director from Orange was speaking. He said their most helpful method of understanding how customers felt was through a website that they had set up. On this website they posted every single complaint that Orange received via social media, on paper, email or telephone. It was their most popular website because it gave the brand an air of transparency. They published

the things that went wrong and customers were able to share how they thought they could put this right. Honesty with your customers is a crucial part of a values-led culture. I believe this is the most effective method of customer-centricity that I have come across. The days of ‘we know best’ are officially over. If you’re not listening to your customers, someone else will. This is what ITG is built on – we think if we can listen to a customer and anticipate their needs then they will stay with us forever. If we get things wrong, we’re the first ones to tell our clients; they don’t have to find it out somewhere else. We’ve realised that people respect you for that. What they don’t respect is when there’s a problem and you haven’t told them. The culture of a company relies on there being a clear set of values, strong leadership and a sense of transparency and honesty between the company and the public. These factors will be the ones that differentiate your company in times of austerity and increased competition. Of course strategy is important, but this must be accompanied by a strong culture if lasting success is to be won. To become truly durable, your company must inspire every single one of your people and win a place in the hearts of the public. By far the best way to achieve this is through culture.

René, born in Gambia, has served as an executive on the board of directors for companies including Pepsi, IPC Media and the Inland Revenue, and in 2004 won an MBE for outstanding service to the business community. He has now established himself as a business guru and has worked with world famous leaders, including former US President Bill Clinton. Contact: www.inspiredthinkinggroup.com

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Focus on people APPRAISALS

The Justine Vaughan, founder and director of Triangle HR, offers her advice and guidance on how performance reviews can have a huge impact on your business

staff appraisal

ith businesses across all industries within the UK likely to suffer from inadequate staff performance at some time, it is vital that managers recognise the importance of regular performance reviews among their workforce. They are undoubtedly the best way to tackle any arising issues before they become critical. Managing performance can have a huge impact on a business, ensuring it maximises and increases productivity, and ultimately the bottom line. With reasons for employees performing poorly ranging from a lack of recognition, a lack of communication, and an actual inability to undertake the role in hand, businesses should be encouraged to consider their current review processes and how these could be enhanced for the benefit of both management and staff. Research time and time again proves that productivity and performance are significantly affected – both positively and negatively – by a business’ working environment; embracing a spirit of openness and ongoing communication between managers and employees can help to create constructive working conditions where staff feel respected and valued.

It’s not uncommon for businesses to conduct appraisals and performance review meetings on an annual basis to tie in with salary reviews, bonuses and promotions. However, I’m sure you’ll agree that’s a long time for an employee to wait before hearing how well or how badly they are performing. Our advice is that managers should be looking to hold regular performance reviews, even as often as quarterly, as this really helps to maximise an individual’s performance and drive their level of commitment. Waiting 12 months can be such a long journey for both the employee and manager, and doing reviews more frequently will help to recognise, record and monitor performance in the workplace more effectively. The popular saying that ‘a firm is only as good as its people’ is certainly true, and having the wrong people in the wrong jobs can be a real recipe for disaster, resulting in inefficiencies, internal conflict and low morale. While many companies find themselves having to spend valuable resources restructuring or recruiting, a solution to this could simply be to take a closer look at their existing workforce 

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07/01/2013 17:26

Focus on people APPRAISALS

“It’s clear that undertaking regular reviews is a true win-win situation”

“Having the wrong people in the wrong jobs can be a real recipe for disaster”

by making sure that the right people are in the right roles to suit both the needs of the business, and the appropriate skills of the staff themselves. Developing and maintaining an organisation that is efficient, profitable and successful requires the specific skill sets of a workforce to match the individual roles people are in. By regularly evaluating and appraising staff, an employer is able to clearly identify any training or other businessrelated needs. Reviews give managers the platform to point out areas of outstanding performance, strength and improvement, and to reward a ‘job well done’. It is, of course, human nature that people respond well to praise and recognition. By pointing out the positives, a manager is going some way to boosting their employees’ enthusiasm, loyalty, and overall job satisfaction – all critical factors in keeping valuable workers happy, especially when pay rises may not be possible. On a similar theme, regular performance reviews enable managers to clarify expectations with an employee, as well as giving them the opportunity to tackle any

specific issues that need addressing. Certain employees may not be carrying out their exact role, but rather than letting the issue fester away, managers can spell out the individual’s precise job description, and also put in place any training or support required to enable the employee to carry out their duties more effectively. It also empowers employees to really influence their careers moving forward by outlining how they would like to develop or progress in the months and years to come. Another area where carrying out more frequent appraisals can prove advantageous is the opportunity they give managers and employees to set and re-prioritise goals. Some individuals may be classic overachievers who quickly meet any targets or aspirations that have been set; regular reviews can ensure new goals are put in place so that a person feels suitably challenged and motivated. At the other end of the spectrum, for employees who perhaps haven’t achieved goals set previously, a regular review is a chance to take stock, re-focus, or even reprioritise objectives to reflect a change in circumstances.

Conducting regular performance reviews can also help to foster an atmosphere of openness across an organisation. While an office, shop, or warehouse may be bustling with everyday general chit-chat, the chance to sit down one-on-one with a member of staff gives a manager the chance to openly discuss where they see the employee currently and in the future, as well as enabling them to address issues both in and outside the workplace. Many employees feel uncomfortable or unable to talk about “office dramas” or difficulties with a co-worker. By building up a good rapport through regular performance reviews, they could be encouraged to start to speak more openly and honestly. It’s clear that undertaking regular reviews is a true win-win situation. As a business owner or manager, they provide the perfect platform to assess and reward an employee’s good performance and work out any areas of weakness or aspects where training and development is required. This, in addition to conveying an approachable, accessible and effective attitude, makes for a much better working environment. From the individual’s perspective, it obviously lets them know exactly where they stand, what their future prospects are, and how they will be supported and encouraged to reach their full potential.

Justine Vaughan is founder and director of Shropshire-based Triangle HR, which offers a full consultancy service in all areas of human resources and people management and provides a professional, cost-effective solution for businesses across the UK. Contact: www.trianglehr.co.uk

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07/01/2013 17:30

Focus on people EMPLOYMENT LAW

There’s a lot going on in 2013 when it comes to employment law. TB consults an expert employment lawyer to bring you all the possible, probable and definite reforms coming your business’ way this year

New year, new rules We were bombarded throughout the autumn with news of the Coalition’s proposals on reforming employment law, via various initiatives, and from a range of Government departments. Get ahead of the game by checking out this snapshot of the proposed reforms, from those that are simply being thrown around, to the ones that are set in stone. “Get ahead of the game by checking out this snapshot”

Possibly

Most of these have not yet been confirmed and are only at the proposal stage. Most of them are intended to make life easier for employers: • Introduction of “employee owner” status – whereby employees would be offered shares in their employer worth from £2,000-£50,000, which would be exempt from capital gains tax, in exchange for giving up some of their employment rights (e.g. unfair dismissal, statutory redundancy payment). • Repeal of the obligation for employers to protect employees against third party harassment and to respond to discrimination questionnaires. • Introducing a public interest requirement to gain protection for whistleblowing disclosures. • Changes to the rules on collective redundancy consultation, including reducing the 90-day

•

• •

•

minimum consultation period to either 30 or 45 days. Changes to the “without prejudice” rule so that offers of a settlement in the context of issues with conduct or performance will not be admissible as evidence in unfair dismissal cases, even if there is no dispute which has arisen at the time of making the offer. This will not apply in discrimination or whistleblowing claims. Statutory code of practice for the use of settlement agreements to be introduced. The current cap of £72,300 in relation to the compensatory award for unfair dismissal to be decreased. Changes to employment tribunal rules to introduce more effective case management; a reform of the costs regime; new tribunal guidance; new powers for the tribunal in relation to dispute resolution; changes to time limits.

Probably

The Government has indicated that it intends to: • Make changes to flexible parental leave and pay, including: 1) the right for parents to share between them 50 weeks of leave as they choose (in agreement with employers). This includes a new concept of flexible parental pay so that the current entitlement to statutory maternity pay can be shared between parents, and

2) changes to adoption leave,

including making it consistent with SMP and flexible parental leave set out above. • Extend the right to request flexible working to all employees with 26 weeks’ service.

Definitely

Also don’t forget the changes that are definitely going to come in: • Hearing fees to be introduced in employment tribunals. • Changes to the Working Time regulations to reflect European judgments on holiday carry over for employees on longterm sick or maternity leave. • An increase in the total amount of unpaid parental leave that can be taken per child from 13 to 18 weeks (up to four weeks of this leave can be taken per year). • Continued roll-out of the pensions auto-enrolment: employers with between 50 and 249 workers will have to autoenrol from staging dates running from 1 April 2014-1 April 2015. Employers with fewer than 50 workers will have to auto-enrol from 1 June 2015-1 April 2017.

By Paula Volkmer, an associate in the employment department at Fox Williams LLP. Contact: www.foxwilliams.com

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07/01/2013 18:13

Focus on people

Paul Steckler, founder of distinctive dog accessories producer, Oscar and Hooch, shares his jam-packed business diary the week before the company launch

SECRET DIARY

Secret diaryof an entrepreneur H “I love seeing the products being made, and seeing all the elements come together”

aving identified the huge opportunities to be found in the pet industry, Paul Steckler, ex-commercial director of Pfizer UK, recently founded Oscar and Hooch. Named after his own hounds, the company produces smart, distinctive and resilient products for dogs. He shares his diary with Talk Business, detailing the stress-filled, exhilarating week before the big company launch.

Day 1: Monday “It was another early start to pick up the collars, before heading back onto set”

After a last minute phone call on Friday from ITV regarding a new show, Top Dog Model, Monday became rather dominated by it! The request was to quickly make some dog collars for the six finalists. This was slightly challenging, as it turned out the collars and ‘TDM’ dog tags were needed for filming on Tuesday…I left early on Monday morning for filming

at Northbrook Park in Farnham, Surrey. Monday was spent on set getting to know some of the contestants and dogs (and trying to very subtly gauge sizes, bearing in mind 11 dogs were going down to six overnight). On my way back to the office, I needed an impromptu meeting with my product developer to ensure the order could be fulfilled – by lunchtime the next day – and also that our new range of collars and leads were on track for photography on Friday. From our meeting it emerged that manufacturing would need to take place overnight, and I would collect the collars en route to Surrey.

Day 2: Tuesday

After a somewhat broken night’s sleep, it was another early start to first pick up the gold ‘TDM’ dog tags, and then the collars, before heading back onto set. Things were very tense on day two,

with contestants’ nerves fraught and judges wondering if the right decisions had been made. Filming was somewhat behind schedule, with the products not needed until later that day. This gave me a great chance to catch up with some of the judges, crew and the contestants. It was during these conversations that I realised there is a definite need for diamante on some dog collars, so I made a quick mental note to research the best quality diamante – and, of course, it turned out Swarovski was the answer. Later that day, I was in a position to help allocate the right collars for the correct dogs. Sizes, on the whole, had worked out rather well, and everyone was very pleased with the exception of Lucky – a lovely Chihuahua whose neck was clearly much smaller than I remember. Luckily for Lucky, and for me, it added some amusement to the show: it all worked out for the best!

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07/01/2013 18:16

Focus on people SECRET DIARY

When filming finished later that evening, I headed home to prepare for another early start in the morning…

products and the stylish design and colours. I left reassured that we’d got it right.

Day 3: Wednesday

After three days of intense marketing, I was needed in our Devon-based factory. I love seeing the products being made, and seeing all the elements come together. Today the full range was being finished, ready for photography on Friday. The atmosphere in the factory was extremely upbeat, with all of us excited about our first photo shoot. It turned out to be a long day to ensure we had enough sizes and colours to demonstrate the full range – challenging with two ranges of collars and leads, each with 10 sizes, in nine colours. 8pm and everything was complete. I headed to the pub back in Somerset for a much needed drink!

One of the goals of the business was to always give something back, so that others can benefit from its success. We were very keen to embrace a charity with a strong relationship to dogs, so when I got the opportunity to meet Claire Guest, chief executive of Medical Detection Dogs, I was extremely excited. After the long drive to Buckinghamshire, it was great to get such a lovely welcome from all of the working dogs and staff. Claire is so passionate about the work the dogs do, and the lives of the people that the detection dogs are saving. There are two important arms to the charity. The first is the alert dogs that support people with life threatening illnesses, such as diabetes, trained to recognise low blood glucose levels and then warn to help prevent an attack. The second involves cancer detection dogs. It is jaw-dropping how acute these dogs’ sense of smell is; they are trained to pick up the smell of different types of cancer in a laboratory setting. It is hoped that this research will help further our understanding of cancer, and its diagnosis. I was very pleased to be able to supply all Medical Detection working dogs with free collars and leads made in their own colours, utilising the unique logo. It also made sense to sell this range online with a donation back to the charity for every item sold. On my way back, I decided to stop in at Dogs Palace – an upmarket dog grooming salon and boutique just outside Bristol – to discuss some product samples. The meeting was excellent, and an order was placed. It was great to hear our own product attributes being reiterated: manufacturing in Britain, as well as the practicality of our washable

Day 4: Thursday

Day 5: Friday

Another early start as I headed over to Dorset to the studio, accompanied by my own labradors, Oscar and Hooch, the inspiration for the business. We also had two beautiful Hungarian vizslas coming to model the products. As much as I would have loved to use Oscar and Hooch, they really cannot sit still! This was very quickly proven when we tried to get a picture for the ‘about us’ page; after much perseverance, I accepted we wouldn’t get a shot of the boys looking at the camera. 10am, and the other two dogs, Harley and Daisy, arrived. To my relief they were happy to sit and pose until we got exactly the shot we wanted. The pictures were extremely important as they will be used across all of our wholesale literature, point of sale, advertising, and our website. After a day of shooting I was extremely happy with the shots, and very excited about the official launch next week. Contact: www.oscarandhooch.com

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07/01/2013 18:17

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08/01/2013 16:34

Focus on

technology

David Richards

OUR MAN IN THE VALLEY Our Sheffield lad turned Silicon Valley techpreneur, David Richards, laments the limitations of focusing all British efforts on Tech City Not so long ago, David Cameron announced plans to invest £50m in Tech City, to create ‘the largest civic space in Europe’ for tech start-ups. As a British software entrepreneur working out of California, I suppose it’s only natural that I often get asked for my thoughts on the UK’s new technology “hub”. Part of me admires the desire to get behind British tech by creating a dedicated centre of specialism around Old Street. I’m sure the supporters of Tech City have nothing but good intentions. But another part is not so sure. Not only is Silicon Roundabout a fairly laughable epithet (the US has an entire valley – the best we can muster is a traffic junction?); the fact many have chosen to focus their intention on a single corner of London is telling of a broader and much more serious lack of ambition and imagination. It’s typical of British provincialism at its worst. A case in point: when we opened our software development centre in Sheffield, I gave some of my American colleagues a tour round the town. One of them asked how far Sheffield was from London, at which point a Sheffield employee said, ‘Oh, it’s miles away – two hours by train.’ This, to a Californian used to six-hour flights to New York! Many in Britain forget just how small our island is. So small, in

fact, that we may allow ourselves the luxury of thinking beyond our roundabout and turn instead to promoting and supporting technology ventures throughout the UK as a whole. But, more to the point, it’s time we realised that the world is, in every respect, as networked as it’s ever been. We at WANdisco get this. Our very livelihood depends on it, as we’re a company built on the notion of collaboration. In case you didn’t know, our name isn’t meant as a party joke, some sort of 70s hark-back picked on a whim or to chase headlines (though I admit it’s a sub-editor’s dream). Instead it refers to “Wide Area Network Distributed Computing”. Simply put, our software allows developers from around the world to work on projects in real-time, saving time, increasing efficiency and improving security. For Marvin Gaye, wherever he lay his hat, that was his home. Forty years later, wherever there’s a plug and an Internet connection, you and I can work in collaboration as far afield as San Francisco, San Sebastián or Saigon. The very notion that we should set about creating “hubs” where likeminded individuals can work together in harmony is not forward thinking – it’s practically archaic. However noble a cause, there’s simply no need for us to limit

our ambition to a single square mile in the East End. It’s time we started to think a little bigger.

David Richards is CEO and co-founder of British software company, WANdisco “The US has an entire valley – the best we can muster is a traffic junction?”

Contact: www.wandisco.com

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07/01/2013 18:18

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07/01/2013 17:37

Focus on technology 2013

eeping pace

2012 has seen a series of conflicting demands placed on businesses’ IT requirements. Economic pressures have forced organisations to cut costs and demand even more from their investment in technology. Yet in stark contrast, the pace of technological change over the past year has meant that businesses must invest in their IT service management to keep pace with the changes, not least to enable them to support initiatives such as Bring Your Own Device, social media and cloud solutions. Social media in particular has started to have a big impact. Businesses at large are starting to utilise social media outlets including Twitter, LinkedIn and Facebook. These platforms have become a firm staple in the communication strategies

of many organisations, and this raises concerns around support and security.

Changing the guard

I’ve witnessed many forward thinking companies react positively to the pressure to keep up with changing technology requirements: for example, by making more of their IT service management investment. This year there has been a shift to implement formalised change management processes, which has enabled many organisations to invest in IT efficiently and effectively, while ensuring that risks are reduced. The move towards improving processes has led to IT service management playing an increasingly pivotal role. IT departments are considering how to do things better, and become more process driven.

Stretched too thin

In 2013 I believe the struggling economy will place even greater pressures on businesses, and many departments will become increasingly stretched. IT must respond with resourceful and tenacious technology solutions, to support the short-term tactical initiatives and evolving strategic needs. Businesses will look to consolidate systems, selecting vendors that can provide solutions for multiple departments, and support processes that span departments and integrate data silos. Businesses will begin to take a holistic view of IT, and this change in approach will see more organisations adopting flexible business platforms, which promote agility and are capable of changing in response to new conditions. This will be particularly important

“IT must respond with resourceful and tenacious technology solutions”

WHERE’S IT ALL GOING?

James Gay, CEO of ICCM Solutions, looks at the important IT trends of 2012, and takes a quick gander in his crystal ball to make some predications on the crucial technologies coming in 2013

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Focus on technology 2013

as the pace of technology change increases, and places greater need on solutions with the ability to rapidly adapt processes and services to keep up with market innovations. I predict that over the coming year the speed of market change will continue to prove a conundrum. More organisations will consider technologies which can deliver their longterm strategic objectives.

Smart, agile, hybrid

Further adoption of hybrid IT and cloud computing will begin to change the role of IT as it becomes a centralised function, coordinating related activities across departments. I also envisage further growth of Smart Process Apps (SPAs), and I believe this will become a talking point of 2013. SPAs combine formal processes, collaboration capabilities, contextual awareness, data analytics and advanced information capture. These

apps change frequently and typically span multiple business functions. This new application software is designed to support business activities that are peopleintensive, highly variable, loosely structured, and subject to frequent change. The emergence of SPAs makes collaborative processes the next frontier for organisations. Over the coming year we will see many more CIOs beginning to utilise them to maximise the scope for re-using the investment throughout the organisation.

A customer focus

Over recent years there has been a plethora of new technologies, some of which have had a major impact on businesses. As pressure grows over the next 12 months, businesses cannot afford to ignore the increasing demand for new technologies, but their adoption must be actively

managed. To do this, the IT function must be able to easily modify the services and support it offers, as well as its policies on security and usage. 2013 will also see customers’ demands on technology increase, and IT must respond. I believe this will require an increased flexibility throughout the organisation to meet customers’ changing needs. Customers will expect the service and support functions they rely on to provide intuitive, consistent services built on accurate, up-to-date information. Patience for IT that does not deliver will be minimal, and customers that do not receive the experience they desire from technology will, in all likelihood, go elsewhere. Organisations must meet these requirements through innovation, and seek differentiation through continual service improvement processes, that allow them to provide more efficient service delivery and an enhanced customer experience as a result. The strained economic climate will mean that businesses will continue to face cost pressures. However, they must still have the capability to respond to greater demands on customer experience. I believe that improvement initiatives will also see an upsurge, and organisations will expect their service management platforms to be able to support these. Over the coming year, I foresee businesses increasingly shifting their approach to focus on the big picture. Organisations will look at how IT can be used across the company, enabling collaboration between business functions and effective, continual service improvement to take centre stage in the journey to deliver a superior customer experience.

“The speed of market change will continue to prove a conundrum”

Contact: www.iccm.co.uk

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08/01/2013 16:37

Focus on technology IPV6

The

future of IP What is IP management and why is it important for your business? Axel Pawlik, MD of RIPE NCC, explains what IPv6 means for small businesses and gives us his top tips IPv4 exhaustion

Each Internet-enabled device requires an Internet Protocol (IP) address, a unique identifier that enables a device to communicate with others via the Internet. Everything from your laptop to PDAs and smartphones need an IP address in order to connect to the Internet. But did you know that the vast number of devices accessing the Internet has had a significant impact on the remaining IP address space? Today’s Internet is mainly based on IP version 4 (IPv4). However, there are a limited number of IPv4 addresses available, and we have nearly run out in Europe. To ensure more devices, and more businesses, can continue to connect and communicate online, it’s vital that the next generation of IP addresses, IPv6, is widely deployed. However, IPv4 and IPv6 are not directly compatible. Therefore, in order for your entire network to be IPv6-ready, you need to ensure that all hardware and software is running IPv4 and IPv6 (the technical name for it is “dual stacking”).

IPv4 in your network

Many small businesses operate their own networks, either for customer use or for internal operations. The extent to which your network needs to be

upgraded to IPv6 will depend on your specific setup. Make sure you can answer these questions: • Are you and your IT staff aware of IPv6? • Is your Internet Service Provider (ISP) ready to provide IPv6 connectivity? • Is your own network equipment IPv6 compatible; if not, what steps are necessary to make it IPv6 compatible? • Have you considered IPv6readiness in your technology upgrade cycle?

Where are you now?

The first step is to assess where you are in relation to IPv6. Your ISP may already offer IPv6 connectivity, or you may already be operating hardware and software that is IPv6 compatible; but you won’t know until you research it. The following checklist is a rough guide: • Talk to your ISP • Identify the network components that will need to be changed or upgraded • Identify the training needs for you and your team • Determine costs of new hardware and software • Select suppliers and consultants • Draft a project plan and start implementation.

Talk to your ISP

Your own network’s IPv6 requirements and deployment schedule will depend on your provider’s IPv6 readiness, so it is important to understand what they can provide and when. Ask: • Do you currently provide IPv6 connectivity? • If not, when do you plan to deploy on customer networks? • When will our website be available over IPv6?

Physical technology

“There are a limited number of IPv4 addresses available”

The first step is to identify which equipment (routers, servers etc) needs upgrading or even replacing. Your hardware vendor should be able to help you with this process, and advise you on how to make the necessary changes.

Software compatibility

A great deal of software already on the market is IPv6-ready, by default. But if you have purchased software from a third party, you’ll want to get in touch with the provider to check if the product is already IPv6 compatible or if there’s an upgrade available. Contact: www.ipv6actnow.org

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You are:

• Complete “Turnkey” start-up package enables you to start earning as soon as your training is completed • Central marketing will complement your local efforts includes: Website, SEO, PPC as well as social media, saving you time and money as you benefit from the marketing edge we give you over any local competition. • Call answering from head office - Provides back up when you are busy with clients This is just the beginning of the benefits and support you receive. We even offer assistance with raising finance, by providing you with a finance plan which can be amended to suit your circumstances for you to show your Bank or Lender. Who Are Splice Marketing’s Clients? Nearly every business is a potential client because their website and online presence is costing them money. Even those with existing websites and online campaigns have

What Makes a Successful Splice Franchisee?

• Self-motivated • Keen to be your own boss • Good at networking and building client relations • Someone who enjoys working with business owners and managers • Passionate about helping businesses succeed in the constantly growing world of online marketing Having the right personality and the desire to succeed are the most important credentials. Hurry to secure your territory as these are limited, as we operate an exclusive territory system, to ensure our franchise operators will not be competing against each other. See the original business in operation and meet our team by simply calling our Head Office on 02380 982778 or visiting our website at www.splicefranchise.co.uk.

08/01/2013 16:42

Focus on technology 4G

Martin Stiven, vice president of business at EE, reveals how small businesses can get the most from 4G: the new superfast mobile network

The 4G effect ‘W

“What excited us was the end result of that speed for businesses”

“Nearly half said the mobile network saved their company money”

hat small business doesn’t want to improve productivity, boost efficiencies and cut costs?’ This is the mantra my team and I obsessively focus on as we roll out the UK’s first 4G network. We knew it was all too easy to get fixated on blazing fast download speeds, but what excited us was the end result of that speed for businesses. To help outline 4G’s potential to transform business, EE commissioned Arthur D Little to investigate how small firms in countries like the US, Japan and Germany are benefitting from 4G. The study, based on 14 in-depth interviews with 4G-enabled businesses worldwide and responses from more than 1,200 business decision makers, gives British firms the inside track on how best to exploit the new superfast network.

Productivity on the move

More than eight out of 10 US small businesses surveyed (86%) get more work done on the move with 4G. This is

because employees can browse the mobile Internet faster than before, access files in the cloud more quickly, and communicate with colleagues and customers using high quality video conference calls while on the move. For instance, 40% said sales staff can now get deals completed in the field, without having to come back to base. This remote working trend continues to gather pace in the UK, with an estimated 20% of employees (over 6.5 million people) working out of the office, according to the Centre for the Protection of National Infrastructure (CPNI). With 4G’s faster download speeds, more small businesses will be able to work on the move as more data can be sent and received over the superfast network. For example, a 20MB document takes on average 8.3 seconds to download with 3G. Downloading the same attachment using 4G will, on average, reduce this wait to less than a second. These time savings have a positive impact on the rest of the business. Take the small

photography firm, which was involved in our 4G Cumbrian trial. It slashed the time it took to send large images to clients from five hours to one and a half. This transformed the business, vastly improving productivity and increasing customer satisfaction as files could be sent to clients quicker than ever before.

Cost savings

With more employees using 4G to work remotely, the report also found that businesses in other countries are using their expensive office space more efficiently. One small business based in Los Angeles saved $100,000 (£62,000) by introducing 4G devices and hot-desking, and then reducing office space as a result. Cost savings like this were at the heart of many small businesses rolling out 4G. Nearly half (47%) said the mobile network saved their company money, with one small business reducing print costs by encouraging staff to transfer documents between smart phones and tablets rather than printing them out. 

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Focus on technology 4G

Instant connectivity

4G can also help speed up the amount of time it takes to get a business running. Many small firms can’t begin trading until they have an Internet connection. So rather than wait 40 days for a fixed line to be installed, they can set up instantly using a 4G mobile WiFi device. This gives fixed line speeds for up to five employees to connect to over WiFi. This is a revolution for small firms setting up for the first time, or for retailers looking to create pop-up shops. This instant connectivity means small businesses can also keep their files backed up to the cloud, regardless of size. Large presentations, images, videos, settings and address books can always be kept in sync, without the need for a WiFi connection or the hassle of coming back to the office.

Realising the potential of 4G

This is just the tip of the iceberg. It’s clear from the report that there are a variety of ways 4G can help small companies increase mobility, improve productivity, and boost efficiencies.

I’m positive our nation’s small firms will find their own uses for 4G, supercharging their businesses in the process. Contact: www.ee.co.uk

Innovation boost

Some of the most exciting 4G uses uncovered by the report were those firms creating game changing innovations. Over three quarters of US-based respondents in our report (76%), agree 4G has helped their firms innovate and jump ahead of the competition. In the US, small firms are using video to market their business, and this is improving online visibility while capturing the human element behind the company. 4G’s superfast upload speeds mean small firms, like street food sellers, can instantly upload videos of new recipes being tested, food being cooked or the stall being set up to Facebook, YouTube and Twitter. One mobile burger van in America uses 4G to update its Facebook and Twitter pages with its location in real-time, so that customers always know where to find it. With 4G, content like videos and images can be quickly and easily uploaded from anywhere; and the more interesting and regularly updated it is, the higher the company’s site will be positioned on Google search rankings.

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07/01/2013 18:22

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08/01/2013 16:47

Focus on technology APPS

I’ve got an app for that… It’s all about making your travel seamless this month. Introducing two all-new apps for booking taxis and hotels, saving you time and money on the ubiquitous business trip

JUSTBOOK APP

Price: FREE Compatible with: iPhone, Android and BlackBerry The gist: Business trip run over? Research has shown that 22% of business travellers have been forced to book unscheduled overnight hotel stays. But the new JustBook app is connecting travellers with hotels that have empty rooms, enabling them to save up to 50% on last-minute stays. Every day, the JustBook team handpicks three exclusive deals on boutique and high-end hotels in each of six UK cities, including London, Manchester and Birmingham, as well as major European cities. You get up to 50% off the usual price, but the deal is that you have to book between midday and 2am, and stay over that same night. Downloadable from: www.justbook.com

TaxiTastic

Price: FREE Compatible with: Apple and Android The gist: TaxiTastic enables users to hail private hire taxis from their smart phones while offering key safety and cost saving benefits. Set to revolutionise the way people book taxis, the app calculates the journey distance and provides an accurate estimate of the fare based on data from over 10,000 taxi firms. The app pinpoints the nearest taxi companies, enabling easy booking and faster pick-up times, as well as helping customers to avoid paying inflated prices or being taken the long way round by rogue drivers. The app also displays the saving users make by booking with private hire firms (which can set their own rates) compared to black cab firms whose rates are governed by their local council. Downloadable from: www.taxitastic.co.uk

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07/01/2013 18:24

Focus on technology GADGETS

Battle of the brands: Nokia vs HTC

A new year calls for a new smart phone, surely? And this year could well see an end to Appleâ&#x20AC;&#x2122;s stranglehold on the market, with two sexy numbers stepping onto the scene: say hello to the HTC One X and the Nokia Lumia 920

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[What they say]

07/01/2013 18:28

Focus on technology GADGETS

Nokia Lumia 920

From £419

4.5in PureMotion HD+ display

10.7mm/185g

Designed to wow: show off with vibrant colours, a one-piece polycarbonate body, ceramic zirconium camera detailing and side keys. It may not be to everyone’s tastes, but the Lumia 920 is bold, bright and – heck – it’s fun, a quality too many smartphones have been missing

8.7 megapixel camera sensor, with 3552 x 2448 pixel camera resolution. Video camera resolution: 1080p (Full HD, 1920x1080)

32GB and 7GB in SkyDrive

The highly-anticipated Windows Phone 8

“Our flagship Lumia smart phone with Pureview technology with Carl Zeiss lens, captures blur-free videos even if the camera’s shaking or in low light. The PureMotion HD+ display is the world’s brightest, clearest, fastest touch screen. And it’s sensitive enough to respond to your fingertips, even when they’re covered up.”

[VS] [Price] [Screen] [Width/weight]

[Looks]

[Camera/video]

[Storage]

HTC One X From £379

4.7in super LCD 2 display

8.9mm/130g

HTC calls the design “minimalist”, which is perhaps their way of saying it’s not a show stopper. Perfectly respectable, with subtly curved corners and a simple display, HTC, true to form, has concentrated more on packing in great features while keeping the One X streamlined and light. And who can blame them?

8.0 megapixel camera with auto focus, smart LED flash, and BSI sensor for better low-light captures

32GB, RAM: 1GB

[OS]

Android™ 4.0 with HTC Sense™ 4

[What they say]

“Brace yourself for lightningfast web browsing, remarkable picture quality and seamless gaming visuals thanks to the powerful quad-core processor. You’ll love the minimalist design and the camera that captures every moment (even in low light) with crisp, vivid, beautiful photos. It also lets you take a photo while shooting HD video.”

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07/01/2013 18:28

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08/01/2013 17:00

Focus on franchise

Franchise news Enterprise Rent-A-Car launches franchise

Bfa AGM looks ahead to a brighter 2013

ENTERPRISE RENT-A-CAR HAS started to franchise for the first time since it was founded, 55 years ago. The business has appointed Guerin Car Rental Solutions as its franchisee in Portugal. Guerin has been a leader in car rental in Portugal for over 20 years, and has offices at the country’s major airports in Lisbon, Faro, Porto and Madeira. Enterprise Rent-A-Car is the flagship brand of Enterprise Holdings, which also owns the National Car Rental and Alamo Rent-A-Car brands. Beginning with Portugal, the company now has plans to expand by franchising throughout Europe, the Middle East, Africa and Asia. In the US, it has more than 5,500 offices within 15 miles of 90% of the US population, and in Europe has a fleet of 100,000 vehicles. Enterprise Holdings and its subsidiaries is the largest car rental company in the world measured by revenue, fleet size and employees.

THE 2012 BRITISH Franchising Association (bfa) AGM reported back on the successes and challenges of the past year, as well as looking forward to 2013. It took place in Birmingham on 6 December, where chairman Michael Eyre, director general Brian Smart, and the chairs of the bfa committees recapped on 2012 to an audience of over 70 attendees. Sean Derrig reported on behalf of the Finance and General Purposes Committee on a difficult year for the bfa, as recession once again took hold of the UK economy. Berkeley Harris commented on the work of the Quality Standards Committee, reiterating the importance of the Association’s standards, why they are in place and how they are improving the quality standards of the industry as a whole. Brian Smart will once again be working tirelessly on behalf of the industry in the coming

year to develop its relationships with those in Parliament, and Associations from Europe and across the world. He highlighted the significance of this international work in developing markets and partnerships and promoting UK franchising ethics. With appearances on national and local television networks, numerous regional and tradespecific PR activities, franchising looks set to continue its upward trends throughout 2013.

Franchise founder wins Farmer of the Year THE FOUNDER OF Riverford, the organic veg box franchise, was named BBC Farmer of the Year. Guy Watson received the accolade at the BBC’s Food and Farming Awards ceremony, held at the BBC Good Food Show in Birmingham. The award recognises Guy’s passion for organic food and his innovative and inspirational approach to running a sustainable business. He was specifically commended for rising to the challenge of sustainable intensification – producing more

food using fewer resources. ‘I’m absolutely thrilled to receive this award,’ he said. ‘From the outset, my aim has been to produce organic food with flavour, look after my team, my suppliers and the land, and encourage people to eat seasonally. ‘Twenty five years on, Riverford has shown that all this is possible.’ The winners of this year’s BBC Food & Farming Awards were revealed by some of the biggest names in food and farming, including Adam Henson and Raymond Blanc.

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02/07/2012 16:33:48

Focus on franchise SPOTLIGHT

of fuel consumption and route and time management are important considerations for us.

We take a look at one couple’s franchise journey: Steve and Lynn Allen, who bought their Riverford franchise selling organic fruit and veg just six months ago

Did buying a franchise resale make things easier?

It’s true that buying a resale requires a lot more investment, but that’s because so much of the hard work has already been done. We needed the expertise and systems of an established company, and we needed a solid income from day one, so a resale was the only real option for us. You’ve got an established customer base, and a clear idea of profit and potential.

Have you received enough support?

UNDER THE SPOTLIGHT… RIVERFORD In August 2012, long standing Riverford Organic customers Steve and Lynn Allen decided the time had come for change. Tired of the constraints of employment in Nottingham, and with a new family to look after, they decided to start their own business as a way of achieving a better income and greater flexibility. Matt Pigott interviews:

Why Riverford?

We’d already been Riverford customers for about five years, and loved getting our organic food boxes delivered each week, mainly because of the excellent quality and flavour of the food. When we decided to look at buying a business, it seemed natural for us to start with a company we knew, that we believed in and that we knew offered a franchise opportunity.

Did you get a good return on investment?

Because of the cost of the franchise, which was high for us, we were nervous about making the investment – but we knew that we would bitterly regret it if the territory went to another buyer. Now that the purchase is behind us, and we’re Riverford franchisees, we’re happy with the decision we made.

Was it tough starting out?

Whenever you start something new, there are a lot of things to learn, particularly with an area the size of ours. We cover the whole of Cornwall; the geography is challenging where we are because you’ve got houses down tiny country lanes that are quite remote, so the logistics

“You’ve got an established customer base, and a clear idea of profit and potential”

Riverford head office and the company’s field team have been on hand to help us from day one. We’ve also had support from other franchisees in the network. We’ve never felt as though we were going it alone, which is one of the best things about being a local business and part of a national network.

How can you grow the business? One of the best ways to grow the business is to attend local food and farm shows where we’re able to meet potential customers, and tell them about Riverford. The shows take effort, and we have to do them on the weekends, but it’s the best way to engage with visitors – and it’s fun!

What are your plans for the future?

The turnover of the business when we bought it was just under £1m. Over the next three to five years we’d like to push growth to £1.2m. Our aim at the moment is to keep the business steady while we get to grips with what we’re doing, then work towards increasing our net profit through careful marketing. Contact: www.riverford.co.uk

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