Talk Business Magazine April 2014 by Talk Business

W W W . T A L K B U S I N E S S M A G A Z I N E . C O . U K

FOR THE ENTREPRENEUR

BY THE ENTREPRENEUR

April 2014 £4.50

VINCE CABLE

We meet the Secretary of State for Business Innovation and Skills, to talk about UK SMEs, the state of the economy, and women in business

The Budget reaction

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Find out what other entrepreneurs had to say about George Osborne’s announcement

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49 iNSIDE 11 Editor’s letter 14 Letters

Talk image

22 TALK strategy

16 News & events

61 The branding column Rich With

TALK Success

63 Falling back in love How to get CRM right

21 Starting a business? Here’s your checklist 22 Vince Cable Interview with the Secretary of State for Business Innovation and skills 30 Take one company Metcalfe’s Food Company 33 Introducing… TB grills a young up-and-comer 34 The Business Show Preview 37 Book reviews 138 He said/she said What are the entrepreneurs saying this month?

65 Seven steps to write a business plan Essential tips

95 Chrisopher Ward: watch face with personality How the company achieved success 96 Look the business: in the bag Fashion 98 Get ready for the slopes Hot spot: Momentum Ski Festval 101 We love Our favourites

talk technology 105 The accelerator Jon Bradford, the tech expert

66 The Budget: reactions Find out what entrepreneurs think

107 The cloud is not secure… Common cloud myths busted

71 Why are exhibitions useful? Entrepreneurs have their say

109 Importance of user experience Tips for web design

73 The sales doctor Solving your sales problems 75 Six questions to ask before you buy a business Tips for buying a business

talk MARKETING

111 How to manage IT Co-ordinating projects 112 Time to be open minded? Benefits of open source communication 115 I’ve got an app for that… Our fave business apps

talk MONEY

77 The marketing column Kimberly Davis

39 The funding expert The Budget – expectations vs. reality

79 Ten steps of Twitter Step six: be human

45 NDAs and confidentiality agreements Legal issues

81 Marketers can rebrand feminism The fourth wave

47 Cash flow: the engine that drives business By Powwownow

83 10 reasons managers should be social savvy Social media tips

49 The smarter way to finance your business? Factoring and invoice discounting

talk people

talk aDVICE

87 The people column Lee McQueen

126 Direct numbers

89 Flexible working rights extended HR Insight

131 Doodle direct

90 Secret diary of an entrepreneur A week in the life of the founders of PetShopBowl.co.uk

136 Talk Business directory

53 A day in the life Diary of a Start-Up Loan recipient 54 Foundations for good business Building a tech start-up 57 Tax tips for business Tax planning 58 Step one: negotiating a profitable deal Series by Simplify The Law

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93 Woman and van removals Q&A with Van Girls

116 Gadgets Samsung S4 vs. S5

TALK FRANCHISE 119 Franchise news 123 Spotlight Cleanhome Domestic Cleaning 125 The fran man Buying an existing franchise

128 Capital space 134 Recruitment genius

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editor’s letter

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EDITOR

Dawn Murden dawn.murden@astongreenlake.com

DESIGN

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

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

SALES & MARKETING MANAGER Scott Hartley scott.hartley@astongreenlake.com

SENIOR ACCOUNT MANAGER Trystan Hurley trystan.hurley@astongreenlake.com

MANAGING DIRECTOR Stuart McCreery

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 Limited William Robinson Buildings, 3 Woodfield Terrace, Stansted Mountfitchet, Essex, CM24 8AJ © Copyright 2014. All rights reserved. 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 Limited cannot be held responsible for such variation.

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Happy New (financial) Year his month sees the end of one financial year and the beginning of another. Last month the Chancellor of the Exchequer, George Osborne unveiled what has been coined as “the election budget” – with decisions aimed to influence the ballot boxes. However, as usual the Budget was met with mixed responses across the nation. As George said, this was a Budget for the makers, the doers and the savers. But what about SMEs? How are you affected? One example is Corporation Tax. This will definitely benefit larger profitable companies because they will receive the reduced rate of 20%. However start-ups and small businesses will be paying the same. Is that fair? On page 39, our funding expert, Julian Smith talks about the expectations he had of the Budget and what he had hoped for, and then gives his reaction on what actually happened. Not quite sure what to make of the Budget? Turn to page 66 to read what other entrepreneurs thought about it. A key figure in Government for SMEs is Vince Cable, the Secretary of State for Business Innovation and Skills. He has been the Secretary since 2010, and is often featured in the media

commentating on the future for SMEs. Read our interview with the Secretary on page 22. With all this talk of finance, if you’re worried about your cash flow, turn to page 49 to read about factoring and invoice discounting, and how it could benefit your company. On top of this we feature all our great columnists, and plenty more advice on how to grow your business. Take care of business for now,

@TalkBusinessMag

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Contributors & LETTERS

Money makers, movers and shakers

Jonathan Brewer is a former solicitor at Pinsent Masons and CMS Cameron McKenna. Having completed his MBA at Imperial College Business School, he joined legal publisher, LexisNexis, where he quickly became a UK board director. Here, Jon built a team of 50 lawyers and technologists to create a class-leading legal online know-how product built around legal work flows. From his career as a litigator and experience in running his businesses, Jon has hands-on experience of the contractual issues that you need to address in order to keep the money rolling in. He also knows how you can resolve the disputes that have a habit of arising if you haven’t addressed your legal issues earlier.

Emi Gal is founder & CEO of Brainient, an ad-tech company headquartered in London, with offices in Bucharest and New York. Prior to Brainient, Emi started two other technology businesses and advised or invested in various start-ups. He is also one of the founding members of Digital Catalyst Fund, an early stage venture fund that helps technology start-ups source tech talent in Romania. Emi is an occasional columnist for The Daily Telegraph, The Kernel, and TechCrunch Europe, and also writes a blog. Outside his business interests, Emi loves waking up early, quantified selfexperiments, sports and languages.

Read his column on negotiating a profitable deal on page 58.

Turn to page 21 to read Emi’s start-up check list.

Graeme Freeman is co-founder and director of Freeman Clarke. The company is made up of a team of fractional (parttime) IT directors; they work for for small- and medium-sized businesses. He founded Freeman Clarke having both run his own businesses and worked for many years for large corporates, including Logica (now part of CGI), and BBC Worldwide. Read his blog here: freemanclarke.co.uk/blog Read his article on how to manage IT projects successfully on page 111.

Vince Cable has been Secretary of State for Business Innovation and Skills since 2010. He has also been the MP for Twickenham since 1997. He joined the Liberal Democrat Shadow Cabinet in 1999 as spokesman on Trade and Industry after a spell as a junior Treasury spokesman. He was the Liberal Democrat Shadow Chancellor from November 2003 until May 2010 and was Deputy Leader of the Liberal Democrats until May 2010. Before this Vince worked for Shell International and in 1995 became Shell’s chief economist. On page 22, Dawn Murden asks Vince about SMEs, the economy and women in business.

APRIL 2014

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MAILBOX

If you’d like to send us your thoughts about Talk Business, or anything else that’s happening on the SME scene, just get in touch: email: dawn.murden@astongreenlake.com. snail mail: Aston Greenlake Publishing Limited, William Robinson Buildings, 3 Woodfield Terrace, Stansted Mountfitchet, Essex, CM24 8AJ.

This month our readers are talking about staff tax perks, the Budget and LinkedIn

Melody’s big news

Dear editor, I really enjoyed reading about past Apprentice contestant, Melody Hossaini [Face on the cover, March]. She’s very inspirational. Shortly after I read the article, I had a look on her blog and found out she was pregnant too. Congratulations to her and her husband. Amy Timber Owner of Amy’s Bakery

R OF E T T E L MONTH THE

Following your review After reading your review of the book, Click.ology: What Works in Online Shopping and How Your Business Can Use Consumer Psychology to Succeed, I went out and bought it. I run a e-commerce business selling office supplies and I haven’t been able to put it down! Click.ology fan

Cashing in on the tax perks The article, Increasing salaries without a pay rise, [March’14] was very informative. It’s important for entrepreneurs like myself to keep up with things like this. My staff are very important to the business, and it’s imperative I reward them for their hard work and remind them they are valued. Martin Jones

Tweets 0F the month... @ThamesValleyExp IT’s #FF - Here’s to our #TVExpo #Partners @TValleyChamber @WWLimited @MacWindsor @WindsorRaces @BaylisMedia @TalkBusinessMag @4nhq @PortsmouthExpo Don’t forget to pick up your free copies of @TalkBusinessMag available at the Registration Desk and in the Cafe Area at #PBE14 @HullbusinessGur What does the Budget mean for SMEs? via @talkbusinessmag http://ow.ly/uMgp6 @Done4USocialMed LinkedIn hits 15 million members in the UK via @talkbusinessmag http://ow.ly/uzVAh @WOTBFestival National Magazine @TalkBusinessMag have a feature on @triciadesigns10. Well done Tricia from all at #WOTB http://bit.ly/1ejTjNQ @norma_lou @TalkBusinessMag Great article on the hows & whys of #website #translation, I love that you covered the #transcreation aspect - a fab read! @brandamplifier From @DawnMurden at @TalkBusinessMag Dragon Kelly Hopen becomes ambassador for #BusinessisGreatBritain campaign http://bit.ly/1g5YhBY @GingerKidd_sf Cloud computing helps 62% of UK start-ups scale as they grow, driving 25-75% increases in profits http://bit.ly/1j8V441 @talkbusinessmag

APRIL 2014

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NEWS & EVENTS

Dates for the diary

Business Junction Networking Events 9 April The Fable, Holborn 16 April Imperial College, London 24 April VIA, Canary Wharf businessjunction.co.uk

The Business Show 2014 15-16 May ExCel London greatbritishbusinessshow.co.uk

Online Retail Conference 16 September Royal Garden Hotel, Kensington orevents.com

Kent 2020 Vision Live 14 May Kent Event Centre, Maidstone kent2020live.co.uk

eCommerce Expo 1-2 October Olympia, London ecommerceexpo.co.uk

Sterling Integrity 8 May Kingsholme Rugby Club, Gloucester 16 May The Village Hotel, Solihull 6 June The Village Hotel, Swansea sterlingintegrity.co.uk

Thames Valley Expo 12 June Museum of the Great Western Railway, Swindon thamesvalleyexpo.co.uk

Successful Selling Expo 16 October RICOH, Coventry sales-expo.co.uk

The Mobile Innovations Awards July 8 Grosvenor House Hotel, London themobileinnovationsawards.com

Branson starts search for Britain’s best new business VIRGIN MEDIA PIONEERS – the online community for entrepreneurs – has launched its annual, nationwide search to find Britain’s best up-and-coming business leaders. Founded by Virgin Media in 2010, the free peer-to-peer network supports more than 6,000 young people, providing mentoring, advice and business opportunities. This year there are two chances for innovators to “pitch to Rich” and a panel of judges in The Start Up Award and The Innovation Award. The winning prize package for each award includes £5,000 of investment plus mentoring, including legal, branding and marketing advice, as well as an opportunity for the winners to build their network and raise their profile in order to further their prospects. Tom Mockridge, chief executive officer of Virgin Media, said: ‘The online world is powering Britain’s

economic growth and transforming the prospects of young entrepreneurs. Our network puts Virgin Media at the heart of this information super highway, and with Virgin Media Pioneers, we provide opportunities for them to accelerate their ambitions as we champion the next generation of digital innovators.’ Sir Richard Branson, pioneer-at-large of Virgin Media Pioneers and founder of the Virgin Group, said: ‘Starting a business with very little capital is something I can relate to, but with a little backing early on and the right idea, anything is possible. I’m looking forward to meeting more of Britain’s best young entrepreneurs through the Start Up Award. The Innovation Award is about propelling the next great British tech business forward, so we’re looking for disruptive businesses who could one day give Silicon Valley a run for their money.’

The call for written entries is open, and five entrepreneurs will be shortlisted for each award and asked to prepare pitch videos to face a public vote. The entrepreneurs with the most votes by 22 April will then pitch on 13 May at the Branson family home in Oxfordshire. To enter, or to find out more about Virgin Media Pioneers, go to virginmediapioneers.com or on Twitter @VMPioneers #Pitch2Rich or Facebook @VirginMediaPioneers.

APRIL 2014

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Mumpreneurs take advantage of fellow mums’ skills to boost growth

AS SHADOW CHILDCARE Minister, Lucy Powell says that mothers working part time are often more productive than other employees, mumpreneurs working with GrowthAccelerator have extolled the virtues of employing other mums. Mumpreneur, Cara Sayer runs SnoozeShade, the sun and sleep aid for prams, car seats and cots. Despite the products being sold worldwide in stores such as Tesco and John Lewis, she is the only employee and relies on the skills of a team of mum freelancers to keep the business’ cogs turning. ‘Using freelancers allows me to manage peaks and troughs in the business,’ she explains. ‘My network of mums means I have access to some very talented women with a wide array of skills that I normally couldn’t afford – they work from home, and I don’t mind when they do the work as long as it’s done. Keith Angus, a growth coach at GrowthAccelerator says: ‘Employing a flexible workforce is a great strategy for smaller growing businesses to plug skills gaps as and when necessary. Mums are often an untapped pool of

talent, and many of these companies can really benefit from taking advantage of their skills. As these businesses have shown, mums can

provide ideal support to free up the business owner to spend more time working on, not in, the company, which is vital for enabling business growth.’

60% of small businesses expecting to see growth in 2014 RESEARCH HAS REVEALED SMEs in the north are more likely to invest than those in south.

A study of 1,000 SME owners by funding specialist, Bibby Financial Services, shows that despite 60% of businesses throughout the country expecting to see growth in 2014, a regional divide has emerged with more SMEs in the north of England looking to invest than their counterparts in the Midlands and the south. The survey reveals that exactly half of SME owners in the north east of England said they are planning to invest, but this figure fell to 35% in the south west and just 31% in the West Midlands. In addition, there is significant disparity throughout the rest of mainland UK as 42% of firms in Scotland are looking to invest in 2014, compared to less than a third (30%) in Wales.

Edward Winterton, commercial director at Bibby Financial Services said: ‘It’s positive to find that so many businesses are expecting to achieve growth this year, but it’s interesting to see that more SMEs in the north are planning to invest than those throughout the rest of the country. ‘It seems that businesses in the Midlands and south of England are counting on organically rising demand as a way of achieving growth, whereas businesses in the north are taking growth into their own hands by investing for the future. ‘More and more businesses are turning to invoice finance to enable them to unlock value in outstanding invoices; providing cashflow available for investment in recruitment, new product development and sales and marketing.’

APRIL 2014

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27/02/2014 09:57

START-UP CHECKLIST

TALK SUCCESS

Starting a business? Here’s your to-do list MAKE/OFFER GOODS OR SERVICES PEOPLE WANT It’s a competitive global market; invest your time researching it. Only build something you know people will buy. Know your customers – and your competitors – by getting out there and meeting them. ALWAYS ASK FOR FEEDBACK When you’re building your business, it is incredibly important to test your product. Use your friends, family, network and potential customers for feedback from the start. This will save you bigger problems down the line. BUILD YOUR TEAM WISELY Recruitment is hard and it takes time. In a start-up, your first few hires are crucial for your business. Invest your time wisely – hire people you feel you can have a beer with and who will be as passionate about your start-up as you are.

Emi Gal, serial entrepreneur and CEO of Brainient – a company that helps brands such as Channel 4 and FOX create interactive video advertising – shares his start-up checklist

DON’T FRET ABOUT YOUR LOCATION At Brainient, we are headquartered in London, have a technology team in Romania, investors from the UK and Silicon Valley, and clients as far away as India. It doesn’t really matter where everyone is based, the internet has enabled all companies to go global. LISTEN AND BE PATIENT People with plenty of patience are wiser because they take the time to listen. As a founder, you need to learn this sooner rather than later. Some things can only be learnt from experience but the more you listen, the quicker you will learn.

network of opportunity. Do your research to find the best accelerator program for you. The benefits are numerous; credibility, validation, focus and momentum to name a few. HAVE FUN! Fun is a great motivator. Walk into work with a smile and chances are you’ll be more productive. Lead your team by example and have fun every day! Contact: jacobbailey.com

BE AMBITIOUS, BUT PLAN Great ambition is the passion of a great character. Investors will respect you for aiming high, but back it up with a thorough road map of how you plan to get there. Think about how you will scale, and make a five-year plan not a one-year. CONSIDER AN ACCELERATOR There are a host of accelerators out there to consider if you want to kick start your business and open yourself to a new

talkbusinessmagazine.co.uk

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Vince Cable Dawn Murden meets Vince Cable, Secretary of State for Business Innovation and Skills, to talk about UK SMEs, the state of the economy, and his opinion on the Budget

very SME owner knows who Vince Cable is. He has been Secretary of State for Business Innovations and Skills since 2010. He has also been MP for Twickenham since 1997. He joined the Liberal Democrat Shadow Cabinet in 1999 as spokesman on trade and industry after a spell as a junior treasury spokesman. He was the Liberal Democrat Shadow Chancellor from November 2003 until May 2010, and Deputy Leader of the Liberal Democrats until May 2010. Before this, Vince worked for Shell International, and in 1995 became Shell’s chief economist. Vince Cable, quite rightly, is featured frequently in the media

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commenting on UK business, the economy and what the Government is doing to help to improve the health of both. This is our finance issue, marking the end of one financial year and the beginning of another, so we asked Vince Cable about UK SMEs, the state of the economy and his opinion on the Budget. WHAT, IN YOUR EYES, ARE THE THREE MOST IMPORTANT ISSUES A START-UP ENTREPRENEUR, OR AN SME OWNER NEEDS TO FOCUS ON? Accessing finance is a vital part of setting up and growing a business. For those in the very early stages, Start-Up Loans [featured on page 51] offers

lending to help get a business idea off the ground, and in just over a year has already helped more than 14,000 businesses get up and running. For those firms that have been going for some time, many will be daunted by the prospect of going to their bank for credit. The Government is supporting the growth and development of alternative finance, such as peer-to-peer lending, which offers small- and mediumsized enterprises (SMEs) a viable alternative to the high street lenders – as do new and emerging banks – which help to provide diversity in the lending market and give small firms choice in what finance options are most suitable to them.

10/04/2014 11:44

INTERVIEW

DO YOU THINK THE ECONOMY IS BECOMING MORE STABLE ON THE WHOLE? OR DO WE HAVE A LONG WAY TO GO? We are beginning to see signs that a real recovery is taking place, and the confidence of small businesses, particularly those with ambitions to grow, has received a boost. But we need to make sure this optimism can be translated into a long term sustainable, balanced recovery without repeating the mistakes of the past.

For someone starting their own business, it’s important they receive the right support and advice to turn their idea into reality. The Mentor Challenge Fund is a new £2.6 million fund, which will help small businesses receive expert help from those in the same industry as them. Small firms can also access support and advice from a network of 26,000 mentors across the country. For those businesses with high growth potential, the GrowthAccelerator scheme provides guidance to businesses to help them move to the next level – helping them build a successful growth strategy, identify suitable sources of finance and get the most out of a firm’s employees.

DO YOU THINK THERE IS A LACK OF COMMERCIAL LENDING FOR SMES? IF SO, WHAT CAN BE DONE TO HELP THIS SITUATION? WHAT IS THE GOVERNMENT DOING? Yes, there is a serious problem of SME commercial lending. I am confident that the measures we are taking via increased competition and business bank funding will bear fruit: promoting new challenger banks and new kinds of lending like crowd funding, and creating incentives for risk capital. The British Business Bank brings together £2.9 billion of existing finance schemes with £1 billion of new capital. We have just invested £40 million from the Business Bank into peer-to-peer lender, Funding Circle, and this should lead to around £450 million being lent to SMEs. So, there is still a serious problem on business lending, but it has been recognised and we are doing something about it. WHAT DO YOU THINK OF THE ALTERNATIVE FUNDING METHODS THAT ARE NOW BECOMING MORE MAINSTREAM FOR SMES AND START-UPS, SUCH AS PENSION FUNDING AND CROWD SOURCING? IS THIS GOOD FOR THE ECONOMY? I want to see more alternative lenders in the market, whether they are alternative finance

TALK SUCCESS

providers or new banks. Crowd-funding, peer-to-peer lenders and invoice finance lenders are becoming more popular, and have the ability to lend to thousands of small firms seeking finance. Newer banks are also becoming more prevalent as SMEs realise they don’t just have to go to the main high street banks for finance. We have started to see challenger banks like Handelsbank and MetroBank enter the SME lending market, which is encouraging, because at the moment 78% of SME lending is concentrated in the hands of the big four banks. Increasing competition will boost innovation, and help small businesses form strong relationships with their lender - and will hopefully prevent the type of mis-selling scandals we have seen in recent years.

We are beginning to see signs that a real recovery is taking place

THE RATE OF UNEMPLOYMENT IS 7.2% ACCORDING TO ONS. WHAT CAN SMES DO TO IMPROVE THIS RATE? Small- and medium-sized businesses employ around 14 million people, and are important job creators. To make it easier for SMEs to take on new staff, Government has brought in a range of measures to make this easier. This includes cutting £2,000 from the National Insurance bills of 1.25 million businesses and charities from April 2014; bringing in major employment law reforms to simplify the process of taking on and managing staff; and providing grants of £1,500 for new employers taking on apprentices. I also launched the Business is GREAT campaign last year, which aims to inspire small businesses to grow, including through hiring, and helps firms find the Government support schemes available to help them.

talkbusinessmagazine.co.uk

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10/04/2014 11:44

TALK SUCCESS INTERVIEW

LAST WEEK WAS NATIONAL APPRENTICESHIP WEEK, WHICH YOU HAVE SHOWN YOU’RE IN SUPPORT OF. WHY IS IT IMPORTANT FOR SMES TO EMBRACE APPRENTICESHIPS? HOW WILL IT HELP THEIR COMPANIES AND THE ECONOMY? Taking on an apprentice can be a real game-changer for a business, and can be of particular value to small- and medium-sized firms. Taking on an apprentice will not only help a firm develop the quality of their skills base, but apprentices boosted UK businesses by £1.8 billion last year, with every company taking on an apprentice reporting an average £2,000 boost to their bottom line. Grants are available to help small businesses take on apprentices, and it’s especially good that a fifth of SMEs plan to take on at least one apprentice in the next year.

THERE IS STILL A LACK OF WOMEN IN BUSINESS. ATTITUDES ARE CHANGING, BUT SLOWLY. HOW, IN YOUR OPINION, COULD WE SPEED

There is still a serious problem on business lending

UP THIS PROCESS AND ENCOURAGE MORE FEMALES INTO BUSINESS? I SAW IN THE PRESS YOU SAID ALLFEMALE SHORTLISTS SHOULD BE ALLOWED IN FTSE 100 COMPANIES LOOKING TO RECRUIT SENIOR POSTS – IS THAT AN IMPORTANT START? If we’re going to build a stronger, more sustainable economy then we need to make sure that we tap into the widest talent pool available. As a Government,

we are committed to making sure that as many women as possible have the opportunity to fulfil their full potential in their careers. That is why we’re

making sure that the modern workplace fits the modern world. We’re bringing in changes to shared parental leave, so mums can better their work and family lives, and extending the right to request flexible working to all employees. We’re taking action in response to the Women’s Business Council’s recommendations to help unblock the talent pipeline that for so long has restricted women from reaching the most senior levels in business. This programme of concerted action aims to drive the ambition and aspiration of girls; support women at all stages of their careers; help women set up their own businesses. For ambitious female entrepreneurs, they can benefit from the range of support and advice schemes offered by the Government. 40% of the loans given out by the Start-Up Loans company were to female-led businesses, and one fifth of all small firms are run by women. Making sure that we have more diversity in our top boardrooms is something we are seeing good progress in since the Davies Review in 2011. Women now represent more than one in five of FTSE board position, but of course that number should be higher. That is why I have asked the Equalities and Human Rights Commission to advise on the legality of

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TALK SUCCESS INTERVIEW

headhunters recommending all-female shortlists. We are on the home straight in achieving the 25% target by 2015, but Government, companies, investors and headhunters all need to play their part to get over the finish line. THERE HAS BEEN MUCH IN THE MEDIA ABOUT THE PAY GAP. WHAT IS THE GOVERNMENT DOING TO PROMOTE EQUALITY BETWEEN MEN AND WOMEN AT WORK? Businesses need to take responsibility for ensuring their workplace is an equal one. Government is asking business leaders to be more transparent about pay and help develop women’s progression, by signing up to Think, Act, Report – a voluntary initiative that encourages companies to think about how to offer equal opportunities for women. Government will continue to work with businesses, because the cultural shift that is needed won’t happen unless they work with Government to remove the barriers that hold women back and ensure that every woman can fulfil their full potential. THE EXPENSES SCANDAL DAMAGED THE REPUTATION OF POLITICAL LEADERS AND THE GOVERNMENT? IS THAT DAMAGE STILL BEING REPAIRED? Yes. We have seen a crisis of trust in many big institutions the public has hitherto relied on, from the banks to energy companies and the police. Politics has also been severely damaged by the expenses and various lobbying scandals, which have not showed politicians in the best light. This is disappointing as the vast majority of MPs and Peers are hardworking public servants and the mistakes of a few have meant that all have been tarnished with the same brush.

Industry has a responsibility to reduce the harm caused by carbon emissions

It is the responsibility of all politicians to work towards restoring trust. Transparency and openness is one very powerful way of doing this. That is why I publish prominently any information relating to my expenses on my constituency website, so people can hold me to account. I also – like all other Government Ministers – publish a list of journalists and media owners I meet and any hospitality I receive. We’re the first government to do this, and we hope this will go some way to restoring the trust that was lost by the public we serve. IF YOU COULD DECIDE THE BUDGET – HOW WOULD YOU HELP UK BUSINESSES? I know that top of the list of concerns for many UK businesses are energy costs. While industry has a responsibility to reduce the harm caused by carbon emissions, I recognise that a balance needs to be struck. That is why I am making the case to the Treasury for further relief measures in the Budget. I also want to see continued support for the things I have championed for the last four years – skills, apprenticeships, science and support for small businesses.

THERE HAS BEEN RISE IN THE NUMBER OF UK SOCIAL ENTERPRISES, AND SOME BUSINESS COMMENTATORS ARE SAYING THERE IS A SOCIAL ENTERPRISE REVOLUTION. WHAT IS YOUR OPINION ON SOCIAL ENTERPRISES? SHOULD MORE START-UPS FOCUS ON A SOCIAL BOTTOM LINE? Social enterprises make a major contribution to the economy as businesses and employers: there are 70,000 social enterprises in the UK contributing £18.5 billion in GVA and employing almost one million people. They also provide a challenger business model in public services and in the private sector, delivering innovations to solve intractable social problems and helping to increase economic resilience, often in disadvantaged places. My department is working with the Cabinet Office to promote the growth of social enterprise and ensure that social enterprises have the best chance of success. Contact: gov.uk/government/ organisations/department-forbusiness-innovation-skills vincentcable.org.uk/en/ Twitter: @vincecable

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TALK SUCCESS TAKE ONE COMPANY

obert Jakobi is a persistent and ambitious man. He went to the University of Pennsylvania, which in America is ranked with Harvard, and started his career on Wall Street. While working in hedge funding, Robert launched his own business, a healthy snack food company, which made dry roast edamame snacks covered in chocolate or yoghurt – named Pod bites. ‘Having spent many years in the US, I recognised there was a gap in the UK market,’ he tells me. ‘Edamame has always been popular in Japanese restaurants, but no one had exploited the market in the UK. They are healthy alternative to chocolate raisins or peanuts.’ Robert launched the snack in a number of stores, including Selfridges and Harvey Nichols. But there were two places he really wanted to get the snack into; Pret A Manger, the popular handmade natural food shop, and Itsu, a sushi restaurant. Two food places he felt were perfect for the market Pod bites was targeting. So he contacted Julian Metcalfe, the founder of Itsu, and co-founder of Pret A Manger, consistently determined to pitch his product. ‘I had been bombarding him for five months, calling or emailing him over 10 times a day,’ he says. ‘When he finally called me back, I thought it was one of my friends playing a prank!’ Julian had started Metcalfe Skinny Popcorn as a bit of a hobby, and because he thought there was a market for gourmet popcorn (he was certainly onto something). He was simply selling the products in his companies, Itsu, and Pret A Manger. Robert met Julian about Pod bites, and on their second

Poppi n’ success Dawn Murden meets Robert Jakobi, managing director of Metcalfe’s Food Company, and finds out why persistence pays off

When he finally called me back, I thought it was one of my friends playing a prank!

meeting left with more than he had bargained for: a new venture. ‘He asked me to take on the popcorn company,’ Robert says. ‘He liked my perseverance, the fact I had a financial background and had started my own business already – he thought I was entrepreneurial.’ Robert joined as a shareholder and managing director. The name changed from Metcalfe Skinny Popcorn to Metcalfe’s Food Company, so they could expand the offering. At the time Robert joined, the company was making £300,000 a year, selling its products to Itsu and Pret A Manger; now it turns over £1 million and is stocked in a range of shops, from Sainsbury’s to Topshop. When Robert came on board he was the only employee and

has been building the perfect team for two and a half years – a team he is very proud of. The company’s colourful marketing and packaging makes it a popular option and a healthier alternative to crisps and cakes. There is a growing range of products, from Skinny Topcorn (popcorn topped with flavours) and Skinny Corn’ers the popcorn’s nacho cousin. Breaking into the food industry isn’t easy and Robert encountered challenges when he took charge of the popcorn company. ‘It required a lot of time and patience, as it takes ages to get into supermarkets,’ Robert says. ‘The food market is a stable industry, but it’s a hard industry to get into, and it doesn’t happen overnight.’

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‘A lot of people thought I was mad for leaving my financial job,’ he says. When it comes to being an entrepreneur, Robert says one of the best aspects is that you are in control of your own destiny. ‘You’ve created something yourself,’ he says. ‘You’re not working for a large corporate company where you’re a piece of meat. ‘You are building something of value, and it’s really rewarding.’ And, he said, the worst thing about running your own business is the risks. ‘There’s always a chance I might not go anywhere, or your team might leave,’ he said. When it comes to advice, Robert says a key attribute is perseverance, and we can totally appreciate why, when it seems it was one of the main reason he became the managing director of Metcalfe’s Food Company. ‘Don’t give up, keep pestering,’ he says. ‘It’s never easy – life isn’t easy. ‘If you’ve got a good product and a good brand you should believe in yourself – don’t take no for an answer.’ He also says he valued his American education. ‘Americans have a different work approach – they are more serious, and don’t expect as much holiday. ‘I also feel Americans don’t resent success – it’s all about the “American dream”, whereas here in the UK we can be quite envious of success.’ Metcalfe’s is 12 months away from launching in America, something that has required Robert to do a lot of travelling. The future will also see the brand enter Europe, in France, Spain, and Belgium – something Robert is very excited about. ‘You have to be strategic when launching abroad, and this has required a lot of time

030_031 SUCCESS Metacalf.**ga**.indd 41

and planning,’ he says. Metcalfe’s sponsors various charity events and it has also partnered with Clic Sargent, the charity that helps children and young people with cancer. ‘We need to give back to the community,’ Robert says. ‘And we have donated a minimum of £30,000 to the charity already.’ Metcalfe’s is also planning to boost brand awareness in the UK with a £1 million television advert campaign – so keep your eyes peeled. And as for Pod bites, well Robert got his wish and the product is being sold under the Itsu brand.

Vital statistics Company founded: May 2009, I joined in October 2010. Start-up capital: £100,000 spent on a popcorn maker (before I joined). Turnover: £10m+. Profit: May 2013 – 7% net profit. Profitable this year, but no exact figures at the time of writing. Growth rate: Gone from £300,000 turnover to £10m+ in three years. Growth rate of 100% and on the Sunday Times’ Fast Track 100 programme. Biggest achievement: The team I’ve built. There is an average age of 26, we have eight Oxbridge grads, and they are all entrepreneurial, smart people.

Contact: metcalfesskinny.com

A lot of people thought I was mad for leaving my financial job

27/03/2014 12:38

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UP-AND-COMING

TALK SUCCESS

Introducing

Svietlana Lavrentidi This month we interview Svietlana Lavrentidi, founder of the Entrepreneurial Women’s Network he Entrepreneurial Women’s Network is for females who run start-up business, and those who have been entrepreneurs for a long time. It’s goal is to create connections that matter.

WHERE DID THE IDEA COME FROM? I have been helping Entrepreneurs in London, which is Europe’s biggest entrepreneurial meet-up site. The organiser saw that I had a potential for networking and making contacts, so he promoted me to co-organiser. A lot of the times if you are woman, men will not take you seriously. I got the idea to create this so that women could bounce ideas of each other and develop relationships. We could form a sort of sisterhood of entrepreneurial women. WHAT’S YOUR ADVICE TO YOUNG ENTREPRENEURS TRYING TO GET AN IDEA OFF THE GROUND? Go for it. Start taking action. If you have an idea and you are passionate about it, set it into action. Practice is the best way. Find people that can help you if there are things you cannot do yourself, otherwise you will just end up a dreamer and not get anywhere. IF YOU WEREN’T AN ENTREPRENEUR, WHAT WOULD YOU BE DOING TODAY? This is where I want to be. I

wanted to be a singer when I was a child. Instead of singing, I am trying to do something bigger. I am creating a network and inspiring women. There is nothing I would rather be than an entrepreneur and a business owner.

There is nothing I would rather be than an entrepreneur and a business owner

WHAT’S TOP OF YOUR BUCKET LIST? I want to make the Entrepreneurial Women’s Network worldwide so women all over the world can connect. WHAT HAVE BEEN THE BIGGEST CHALLENGES YOU’VE FACED AS A YOUNG ENTREPRENEUR? The hardest thing was to find my biggest passion. I ended up spending time and money on things that I really did not want to do. I wanted to make money, but I did not know where to start. HOW MUCH DOES MONEY MOTIVATE YOU? At this point 50% of my agenda is of what I have to do and what I like to do, the other 50% is money. Like everyone, I have bills to pay and I need to live. I do not believe that people are not motivated by money. WHAT’S BEEN YOUR PROUDEST MOMENT? It was definitely the launch party. When my mum hugged me and told me how proud she was of me. That moment was worth all the hassle. WHAT’S YOUR VISION FOR THE FUTURE? To unite women worldwide. I want to make the group into a membership site by next year. I also want to connect as many women as I can; making a difference - that is what matters. Contact: svietlanalavrentidi.com

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27/03/2014 12:43

TALK SUCCESS THE BUSINESS SHOW

The biggest exhibition

for anyone starting or growing a business ould you like to be in the same room as 25,000 potential customers? That’s the opportunity The Business Show offers your business, with everyone from start-ups to SMEs and beyond scouring the show floor for new products, services and partnerships to grow their businesses fast. With so many ambitious business people in one place 360 exhibitors, 260 seminars, 132 workshop sessions and nine live show features across two days - the atmosphere is always electric. You can sense real business deals being done all around you. Exhibiting at The Business Show gives you the chance to meet key influencers and decision makers face to face. It’s one of the most efficient, effective and successful marketing activities. Where else can you get in a room with so many prospects actively looking for suppliers, information and guidance? It’s an unrivalled opportunity for you to make an outstanding personal impression with your hottest new prospects, whether you want to make sales on the day, or gather a host of quality leads for the sales team. The face to face nature of the conversation allows you to qualify the leads in detail and know exactly who to call first

The UK’s biggest business show returns to ExCeL, London in May. We caught up with event organiser, the Prysm Group, about what exhibitors can expect from the thirty first meeting when you’re back in the office. That’s why nearly 80% of exhibitors at November’s show have already rebooked for May.

You can sense real business deals being done all around you

WHAT’S AT THE SHOW? You will find a unique blend of the biggest businesses alongside innovative SMEs and cutting edge business solutions. Alongside the 360 marketleading exhibitors, the two days are also packed with a schedule of seminars and workshops giving visitors the chance to learn new skills and strategies. These sessions also give exhibitors the chance to extend their reach and brand extension

to an attentive audience by delivering compelling content that the visitor will truly value. The seminar schedule is led by a stellar line up of keynote speakers, with the leading lights of industry delivering keynote seminars on topics ranging from inspiring stories to how to build a multi-million pound business from your back bedroom. Previous speakers have included BBC ‘Dragons’, James Caan and Doug Richard; David Gold; and Clive Rich, the £10 billion negotiator, as well as representatives from London Stock Exchange, PayPal and FaceBook.

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THE BUSINESS SHOW

TALK SUCCESS

Manager & PA; Global Enterprise Mobility, Workforce & Travel Management 2014; Business Intelligence & Analytics Live; and Going Global.

The Business Show’s workshop schedule is now more comprehensive than ever, covering everything from how to rank at the top of Google, generating sales leads, and franchising, to the benefits of a business mentor. The workshops are constantly evolving to meet the changing needs of business in the 21st Century, with new subjects that include cloud computing and SEO. There’s a huge range of networking features at every Business Show, giving visitors the chance to make the contacts they need to progress their businesses. Opportunities range from swapping business cards at Business Connections to Speed Networking, Facetime, The Boardroom, Tweet Meet, and the 4Networking 121 Roadshow. Two live features give visitors the chance to make their pitch for investment, whether they are start-ups or established SMEs, with Midas Touch and Angels Den. And if the visitors are ready to buy or sell a business, they can do that too, with Businesses For Sale Live.

ADDED VALUE Since its launch in 2000, The Business Show has helped more British businesses to start or grow than any other business exhibition or conference. It remains dedicated to supporting your business in any position, in any industry. Part of that vision in 2014 is realised by additional shows that are co-located with The Business Show, offering exhibitors an extended audience of high quality crossover delegates. These visitors are leaders in their own sector, drawn to ExCeL by the lure of a specialist show. And while they’re on site, many of them attend The Business Show, too. These key leaders and decision makers represent a great opportunity for any exhibitor at The Business Show by providing a route into a market sector that you might not have the chance to engage with otherwise. Running alongside The Business Show and Business Startup this May will be: Accountex; Legalex; Sales Innovation Expo; Office

Previous speakers have included BBC ‘Dragons’ James Caan and Doug Richard

FREE TICKETS The Business Show can help your business with everything it needs to start or grow in 2014 or beyond. If you’re in business – or want to be – then you need to be at The Business Show at ExCeL London, 15-16 May 2014. Tickets are completely free from thebusinessshow.co.uk or call 08000 686970.

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28/03/2014 09:06

BOOK REVIEWS

Book reviews Stickier Marketing [second edition] How to Win Customers in a

Our verdict:

About the authors: Mico Yul is an intelligence coach, global keynote speaker and analytics blogger. Stephanie Diamond is a former marketing director for AOL, founder of MarketingMessageMindset.com, and the author of seven business books.

Our verdict:

We say: Grant says the world wide web has commoditised the world, and being good at what you do is the minimum entry level to be allowed to compete – this is very powerful advice. It’s not about what your business does, it’s about how it does it, and who you do it for. Stickier Marketing is published by Kopan Page, priced at £19.99 in paperback.

Data Visualization for Dummies by Mico Yuk & Stephanie Diamond

Digital Age by Grant Leboff

About the author: Grant Leboff is founder of Sticker Marketing Ltd., a consulting firm that advises clients on sales and marketing strategies, building their brand and positioning it as a market leader in the particular sector.

TALK SUCCESS

You Can’t Plant aCreate Tree in Space the Conditions for You and Your Organisation to Thrive by Neil Hope with Dominic Will

We say: Big data are big buzz words, but how do you present data in an easy-to-understand and visually compelling manner? It’s a huge challenge faced by many companies. This straightforward colour guide will help you present data in a easyto-read and interesting manner. Data Visualization for Dummies is published by Wiley, priced at £24.99 in paperback.

Our verdict:

About the authors: Neil Hope and Dominic Will are the joint managing directors of HOME Fundraising, a successful fundraising company. Their new book reveals how their new model for leadership has developed. We say: This is a good guide to getting the most out of individuals and groups. These two unconventional leaders share their hands on, real world experiences. They have achieved commercial success and are worth listening to. You can’t Plant a Tree in Space is published by pighog, priced at £14.99 in paperback.

We’ve got one of each book to give away FREE. Be the first to follow and tweet us, quoting the book name @TalkBusinessMag & we’ll send you a free copy!

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vs. reality nlike most articles, I have written this one in two parts – the first part before the Budget was announced, and the second part reviewing the decisions taken.

WHAT WILL GEORGE UNVEIL? This is the last Budget where the decisions will have time to be felt before the next general election. Also, the Government is about half way through a tenyear programme to eliminate the budget deficit. For those reasons, neither should we expect significant changes in this Budget nor would the Chancellor have much wiggle room to take such action given the over-riding objective to

eliminate the deficit, meaning austerity will continue to be a key watchword. The one factor, which mitigates against that, is the fact that trends over the last six months are moving in a positive direction and the risks, to inflation, growth and the deficit in the short term are more weighted to the upside. I would expect some small giveaways and policies that are consistent with this Government’s pro enterprise and innovation stance. On the positive side for employers and entrepreneurs, the Chancellor is expected to make it easier for companies to recruit talent by increasing the age threshold before employers need to pay National Insurance.

money

Budget – expectations

Our funding expert, Julian Smith talks about the expectations he had pre-Budget, and what really happened

The Chancellor is expected to make it easier for companies to recruit talent

To encourage companies to invest in technology and IP, we could see an increase in R&D tax credits and an increase in grants for technology investment. Exporting companies are expected to benefit from new initiatives. The SEIS scheme, which allows young investors backing young companies to benefit from 50% Income Tax relief, could see its £150,000 ceiling raised. Finally, the Chancellor is also expected to make a small increase in the personal income tax allowance. On the flip side, I would expect to see a continued crack down on tax evasion as well as another bump in the higher stamp duty threshold.

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TALK MONEY FUNDING EXPERT

This is a budget for the makers, the doers and the savers

POST-BUDGET ‘This is a budget for the makers, the doers and the savers,’ George Osborne, 19 March 2014 Well, in the short 60-minute speech from the dispatch box, the Chancellor unveiled a series of measures that were broadly consistent with the pro business expectations, which have been welcomed by the likes of the CBI and the IoD. In certain areas, like the case of pensions, we even got fireworks with the most radical reform of the

industry in 50 years. One of the concerns going into this budget is that economic growth is being generated from increased consumer spending rather than increases in productivity, which, relative to other major economies, remains poor. A range of measures was introduced to encourage greater investment, to increase efficiency and to support export initiatives. So what were the business headlines?

BENEFICIARY GROUP MEASURE - Doubled Government export finance to £3bn at a rate one third Exporters -

lower than before. Reduction in long haul air passenger duty making it cheaper to access key export markets.

Manufacturers, big energy users

£7bn package to cut energy costs.

Local businesses

Extension of business rate discounts for 3 years in enterprise zones.

Tech/IP businesses Investing businesses Small businesses Start-ups

Extension of R&D tax credit rate from 11% to 14.5%.

Doubling of the annual investment allowance from £250k to £500k, increasing tax relief for investing companies.

Extension of grants to support 100,000 more apprentices.

SEIS scheme, which has proven popular with new companies and investors alike, made permanent but no increase in £150,000 ceiling.

So other than the lifting of the age below which NI is not paid by employers, we got most of what I was looking for, including the increase in the personal income tax threshold. It is clear that this Government is trying to foster an environment, which encourages business investment, increases

productivity and the development of successful export businesses. Having lost much IP and manufacturing prowess overseas during the last decade, that sounds like a constructive direction of travel for Great British business. Contact: thefundingexpert.co.uk Twitter: @lefundingexpert

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27/03/2014 11:34

LEGAL TALK SUCCESS

WHAT IS AN NDA? An NDA is a legally binding document that is the first step to protecting your ideas and intellectual property when sharing valuable and confidential information with individuals and businesses. It is the easiest way of ensuring that information is not compromised, made public, or exploited. It also means that in the event of a breach of contract, you can take legal action to implement any solution needed to rectify or prevent further breaches, and recover damages. WHY DO YOU NEED AN NDA? You may have a brilliant business or creative idea, along with the strategy on how it will be brought to market or implemented, or important business plans, marketing information or financials and statistics that are at the crux of your business. At some point you will need to share some of this information with others to help further the growth of your company, but you do not wish for such valuable information to be made public or fall into the wrong hands. An NDA will allow you to discuss confidential information openly without fear of it later being misused or shared without your authorisation. WHICH TYPE OF NDA DO YOU NEED? If you are sharing information, use a One-Way Confidentiality Agreement to protect your intellectual property. This should cover the terms under which the confidential information can be used, those allowed to receive the information, the restrictions placed on it to maintain confidentiality, as well as remedies and damages should there be a breach of contract.

NDAs & confidentiality agreements? Mark Edwards, general manager at Rocket Lawyer, an online legal service, discusses how to make sense of NDAs and confidentiality agreements You do not wish for such valuable information to be made public or fall into the wrong hands

If both parties are exchanging sensitive information, use a Mutual Confidentiality Agreement, which covers, all the aforementioned, but ensures full protection for both parties. An NDA like this allows you to get to know each other better, so you can decide whether to enter into a longer term deal or partnership.When you first start sharing information, or if you frequently do so, and quickly need to agree an NDA to protect your information, use a Letter of Confidentiality. This document provides the same level of protection, but is ideal for less formal situations or when time is of the essence. WHERE DO YOU GO TO CREATE A NDA? It’s important that you have confidence in your confidentiality agreement and that it has been properly drafted – if not, you are putting your business at risk. Always create a tailored agreement to fit the specific

needs of your business; that way you ensure all aspects of your confidential information are protected, leaving nothing to chance. Plus, it needn’t be complicated, time consuming or expensive, which are the most common reasons cited for not creating such a simple legal document. A legal service that provides start-ups and small businesses with easy-to-create, professional legal documents online and help from affordable specialist lawyers, allows you to create your own bespoke NDA from a template that has been drafted by a lawyer via an online interview process, in your own time and in as little as 10 minutes. Drafted carefully and dutifully signed off by the relevant parties, the NDA is the first, and single most effective legal document there is to protect the interests of your start-up or small business. Protect it before you share it. Contact: rocketlawyer.co.uk

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28/03/2014 10:53

POWWOWNOW TALK MONEY

ash flow is paramount to a successful business, especially a start-up or small business. But no matter what stage your business is at, cash flow must remain the focus of your financial outlook. If cash is the fuel that drives a company forward, then cash flow is the engine. Without good cash flow management, a business cannot move forward. Here are my top tips for ensuring good cash flow and how to make sure your business never has to worry.

1. MINIMISE DEBTOR DAYS Every business experiences a gap between invoicing and payment, the key is to minimise these gaps and ensure they remain stable. One excellent way to do this is to establish direct debit as a business norm for collecting receipts. It allows a business to scale up without increasing the costs required to collect the debt, while also providing a stable inflow of cash, from which all payments can be made. There can often be resistance to direct debit. If you experience this from your customers, you should take time to understand their reasons, as there will probably be a counter-argument to put their mind at ease. One of the biggest misconceptions of direct debit is that the payee loses control; in fact the opposite is true. Many people don’t know that once a direct debit has been made, a payee can quickly and easily have it returned by contacting their bank. With this in mind businesses should only use direct debit for small value, high volume transactions. 2. SET CASH FLOW TARGETS Setting targets for your credit controllers is an excellent

Cash flow: the engine that drives business Andrew Johnson, finance director at Powwownow, gives tips on managing your cash flow

Without good cash flow management a business cannot move forward

way to ensure that cash flow is given the attention necessary, and provide a level of satisfaction and ownership to hit and beat these targets. To work as a motivator, you must be able to give an upto-date understanding of performance versus targets. One way to do this is by preparing and maintaining a cash flow forecast that is updated weekly; this provides an accurate outlook for the next 6-12 months. 3. ESTABLISH CLEAR PAYMENT TERMS Establishing clear payment terms from the outset is important. If you don’t know what your payment terms are, it is difficult to know when you are going to get paid and when to advise those who need to pay you. If you want to reduce the chances of delayed or missed payments, make sure your payment terms are up to date. In my view, it is good business to pay within 30 days of an activity or service received.

4. INVOICE QUICKLY Cash flow isn’t just about external factors, there are some internal factors that influence cash flow too, like when to invoice. If you issue invoices via email, they can be received immediately and you also have a record of them being sent. That way, payment can be made quickly and there is no reliance on the post. 5. TECHNOLOGY As well as email, using technology can make managing cash flow much simpler. Cloudbased services, Excel documents all allow you to free up time and keep track of cash flow. Cloud technology also allows you to keep track of cash flow no matter where you are, accessing accounts from any location. This is especially good if you have a team that works remotely. Reliable technology allows you to keep on top of cash flow and make sure you never miss a payment. Contact: powwownow.co.uk

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CASH FLOW

TALK MONEY

A smarter way to finance your business?

he British Chambers of Commerce (BCC) recently upgraded its GDP growth forecast to 2.8% for 2014, and 2.5% for 2015/2016. This is great news for the nation’s SMEs. However, it highlights a severe problem. Businesses need to invest if they are to capitalise on the fresh opportunities created by such growth – but the funds are still not forthcoming from the traditional sources, such as banks overdrafts and loans. BCC director general, John Longworth recently commented, saying: ‘Britain is simply not investing enough,’ and ‘There is also more to do in securing access to finance for growing firms.’ On March 11, Vivienne Dews, chief executive of the Office of Fair Trading, also raised concerns over the lack of competition in the retail banking sector, and suggested that work may need to be done to give SMEs a broader choice of finance providers.

Nick Smith, recently appointed group sales director of Ultimate Finance, explains why more SMEs are waking up to the benefits of asset based finance

Work may need to be done to give SMEs a broader choice of finance providers

32%. In the last year alone, there has been an 11% increase. WHAT IS ASSET BASED FINANCE? Asset based finance takes several forms, but the most popular is invoice finance. There are, broadly speaking, two versions – factoring and

invoice discounting. Both enable a company to release up to 90% of the money tied up in their unpaid invoices – the difference being that with invoice discounting they continue to manage their own credit control, while with factoring, the lender supports this function.

SMES TURNING TO ALTERNATIVE SOLUTIONS Many SMEs are taking the initiative themselves and exploring alternative solutions. The Asset Based Finance Association (ABFA), whose members account for 98% of the industry, have reported significant growth. ABFAs figures for the last quarter of 2013 show advances by its members of £18.3 billion, up from £13.9 billion in December 2009 - an impressive jump of

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TALK MONEY CASH FLOW

WHAT ARE THE BENEFITS OF ASSET BASED FINANCE SOLUTIONS? The most obvious is cash availability. Asset based lenders are eager to help, have funds available and make the cash relatively easy to access – the same cannot be said for traditional bank lending. In some instances the asset based lender may help a company that has been refused cash by a bank – this can make all the difference between that business being able to capitalise on an opportunity and having to turn it down. In other situations, the SME may decide that the process of applying for a traditional overdraft or loan is simply too laborious and time consuming – the bank might have eventually helped them, but the SME prefers to approach an asset based lender because it’s quicker, easier and quite possibly cheaper. DRAMATICALLY SPEEDS UP YOUR CASH FLOW Instead of waiting 30, 60, 90, or even 120 days for payment, invoice finance means you can access practically all of the money owed to you almost as soon as you issue the invoice. It removes your most pressing cash flow problems and provides essential working capital. GOOD FOR GROWTH A traditional overdraft comes with a limit, and as your business grows you’ll have to go back to the bank for an extension. With invoice finance the more invoices you issue, the more funds become available. Factoring also solves a major headache. Instead of trying to manage the credit control function yourself, or employing a finance department, the business can outsource the entire job to a team of experts. This keeps the organisation lean and enables them to concentrate

THE BENEFITS OF INVOICE FINANCE AT A GLANCE • Improves cash flow by releasing up to 90% of the money a company has tied up in its unpaid invoices. • Easier to access and more readily available than a traditional overdraft or loan. • As the business grows, so do the funds available. • Enables a business to boost efficiency by outsourcing its credit control function. • Online systems make it easy for a business to immediately see what funds are available to it. • Adds value at every stage of an SMEs supply chain.

on those parts of the business where their particular skills lie, and which actually generate revenue and growth. EASY TO SEE WHAT FUNDS YOU HAVE AVAILABLE With invoice finance you’ll have access to an online system that provides all the account information you need – you can see, in real time, the status of every invoice and how much cash is available to you at that moment. IMPROVES YOUR SUPPLY CHAIN MANAGEMENT A traditional overdraft or loan just gives you cash, but with invoice finance the provider

With invoice finance the provider becomes a close partner who provides valuable practical assistance at every stage

becomes a close partner who provides valuable practical assistance at every stage of the supply chain. For instance, Ultimate Finance offers an integrated invoice finance and trade finance facility that makes it easy to buy goods from abroad without the usual cash flow challenges. Likewise, our dedicated service for recruitment consultancies offers clients a state-of-the-art online timesheet system. Given all these benefits it’s not surprising that asset based finance solutions are becoming increasing popular with the UK’s SMEs. Contact: ultimatefinance.co.uk

APRIL 2014

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START-UP LOANS

TALK MONEY

A day in The life

DEAR DIARY, I wake up at this time, but unfortunately I’m not a morning person, so I start my morning by reading emails I’ve received overnight on my phone. I then look through Aphrodite and Ares’ Twitter feed. I send a tweet out to all of our followers to start the day.