AUGUST 2013
Scotland in the spotlight
Start-ups sprout north of the border
Getting stuck in
Miracle material sugru is the perfect fix
Brand new
Refresh with a rebrand
Hungry for more
AUGUST 2013
Some entrepreneurs would be satisfied with building a £400m-turnover retail business. Not Chris Dawson, founder of The Range. Plymouth’s answer to Del Boy Trotter has his eyes firmly set on the £1bn prize £4.50
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CONTENTS 57 Time out
A company away day can be a great way to motivate your workforce
VOLUME 02 ISSUE 08 / 2013 09 10 12 13 14 79 98
Editor’s letter Contributors News & events Talking point Book reviews Franchise news Start-up diaries
61 An interesting predicament Conflicting interests can turn a recruitment situation sour
16
64 Making them tick
Identify what gets your staff up in the morning to keep them on board
67 Tech for start-ups
The latest must-have gadgets, hardware and apps for forwardthinking small businesses
“You’ve got to have focus that’s so strong it’s like a beam: it’d burn through a wall”
71 Little acorns, mighty oaks
The relationship between giants and ants is changing the tech ecosystem
76 If at first you don’t succeed
Chris Dawson - The Range
16 The Elite interview
45 Having a facelift
The Range founder Chris Dawson is eyeing up the mega bucks
A rebrand is a natural occurrence in business, but it comes with its risks
21 One to watch
50 Livin’ la vida local
The woman behind spectacular substance sugru spills all
Engaging with the community can inject much vitality into your offering
54 Bad company
Social media isn’t always the best friend for your business
45
There are plenty of tools available to help test out new ideas online, says David Hathiramani
80 Franchise in the spotlight
A-Star Sports, the fast-growing children’s sports franchise, is moving ahead of the game
07
91 Written in the stars
The slightest touch of due diligence never goes amiss when striking a deal with a celebrity
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27 Northern lights
The entrepreneurial spark has been ignited in Scotland
34 In with the old?
Starting up or buying an existing business: both have their attractions
40 Drumming up business
There are a number of ways to build your customer base from the outset
42 Structural issues
Working out the best business model for a venture is key, says Clive Lewis
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EDITOR’S letter VOLUME 02 ISSUE 08 / 2013
Scan this QR Code to register for Elite Business Magazine SALES Harrison Bloor – Account Manager harrison.bloor@cemedia.co.uk Adam Reynolds – Account Manager adam.reynolds@cemedia.co.uk Richard Smith – Account Manager richard.smith@cemedia.co.uk
Each to their own
EDITORIAL Hannah Prevett – Editor hannah.prevett@cemedia.co.uk Josh Russell – Feature Writer josh.russell@cemedia.co.uk Adam Pescod – Feature Writer adam.pescod@cemedia.co.uk Jon Card – Feature Writer jon.card@cemedia.co.uk Lindsey McWhinnie – Chief Sub-editor lindsey.mcwhinnie@cemedia.co.uk DESIGN/PRODUCTION Leona Connor – Designer leona.connor@cemedia.co.uk Clare Bradbury – Designer clare.bradbury@cemedia.co.uk Dan Lecount – Web Development Manager dan@cemedia.co.uk CIRCULATION Malcolm Coleman – Circulation Manager malcolm.coleman@cemedia.co.uk ACCOUNTS Sally Stoker – Finance Manager sally.stoker@cemedia.co.uk Colin Munday - Management Accountant colin.munday@cemedia.co.uk ADMINISTRATION Charlotte James – Administrator charlotte.james@cemedia.co.uk DIRECTOR Scott English – Managing Director scott.english@cemedia.co.uk Circulation/subscription UK £40, EUROPE £60, REST OF WORLD £95 Circulation enquiries: CE Media Limited Call: 01206 266 842 Elite Business Magazine is published 12 times a year by CE Media Solutions Limited Weston Business Centre, Hawkins Road Colchester, Essex. CO2 8JX T: 01206 266 849 Copyright 2013. All rights reserved No part of Elite 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. Elite Business magazine will make every effort to return picture material, but is 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 CE Media Limited cannot be held responsible for such variation.
“My fondness for nostalgia reminds me that our business creators and owners come in all different shapes and sizes”
You may notice that your copy of Elite Business is looking slightly different this month – the front few pages at least. We decided to mark our first year (yes, really – time flies when you’re having fun) by giving the front section of the mag a bit of a facelift. As always, we’d love to hear your feedback so please do drop us a line to tell us what you think. Reaching this milestone has prompted us to reflect on the last 12 months, and the variety of people and businesses myself and the team have encountered. We’ve met all sorts: from trendy bag manufacturers to frozen yoghurt floggers and canny cab-app developers. Just a glance at this month’s One to watch, Jane Ní Dhulchaointigh, who came up with wonderstuff sugru (it fixes, sticks, moulds – like an all-singing, alldancing Polyfilla of the future) reminds us again of the wonderful inventiveness of the UK’s entrepreneurs. But my fondness for nostalgia also reminds me that our business creators and owners come in all different shapes and sizes. Just consider Chris Dawson, founder of homeware and DIY superstore chain The Range and this month’s Read Dawson’s cover star. Unlike many of the Oxbridge grads top tips for who grace our pages, Dawson began life with success nothing – not even a decent education. Yet, has he let his inadequacies in the classroom hold him back? Has he hell. To this day he claims to be unable to write or use a computer. But this is clearly not a reflection of his capacity to run a business: The Range continues to grow and thrive, and is expected to surpass revenues of £400m this year. By modern standards, Dawson’s approach to business is unconventional. Dragon Peter Jones nearly blew a gasket when he saw the state of The Range’s head offices, and Dawson’s attitude towards authority, in particular toward the Inland Revenue, remains unorthodox. But it works for him – and who’s to tell him he should run his business any other way? Dawson told me a story of a naysayer recently questioning him about his way of life, the hours he works and so on. The entrepreneur was infuriated. “He refused to believe I was happy. By Christ, am I happy; I love my life. And let’s face it, if he knew what I knew he wouldn’t have to work for a living.” Hear, hear.
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HANNAH PREVETT EDITOR
www.cemedia.co.uk
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CONTRIBUTORS
Nicola Barron
It’s a time of anniversaries for Barron, who, in addition to celebrating the third anniversary of her business, now has a full year’s worth of her Start-up diaries column under her belt. She’s not had a whole lot of time to celebrate however; between planning the celebrations of others, preparing to take the kids to the Isles of Scilly and having a fresh look at her business plan, she has plenty to occupy her in August. Here’s to another productive year at the helm of Homemade London.
Natalie Seery
Seery is the keen snapper who paps our cover stars each month. And she’s had plenty of experience, with a portfolio of shots of some of the UK’s hottest music stars as they strut their stuff on stage. Given it’s festival season, our ace photographer has plenty of travelling to do before she rests her weary head; we hardly lightened her load with a trip down to Plymouth to snap The Range’s Chris Dawson, but our busy shutterbug definitely rose to the challenge.
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Clive Lewis
Our regular finance aficionado, Lewis brings us his expertise gleaned from his role as head of enterprise at ICAEW. Having lent a hand to help shape the regulatory landscape through his work with the Better Regulation Executive, as well as his experiences in different areas of UK plc, he has been set in perfect stead to comment in his feature this month on choosing the best business structure. Safe hands, indeed.
Josh Russell
Like many creatives, feature writer Russell is more comfortable at home with the curtains drawn than out in the beating sunshine, but sometimes needs must when the devil causes a major vitamin D deficiency. Between flitting to festivals, upgrading his skintone from whitewash to tapioca and resolutely refusing to bare his knees, he still had plenty of time to chat to sugru inventor Jane Ní Dhulchaointigh about product-hacking, creating a community and producing one of the brightest innovations of its time.
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NEWS & EVENTS With the exception of the US, it seems the UK is stealing a march on all overseas rivals when it comes to the ever-growing online retail market. According to research conducted by market research firm Nielsen for online payment provider PayPal, sales of fashion, technology and home-electronics products have driven a British export boom to five key global markets. Indeed, the UK is now the second most popular destination for online shoppers overseas, ahead of the likes of China, Germany and Australia. Of the 6,000 cross-border online shoppers surveyed for the Modern Spice Routes report – selected from Australia, Brazil, China, Germany, the UK and the US – 37% identified Blighty as their favoured place for a bit of retail therapy. And with cross-border online shopping expected to deliver £24.4bn into the UK’s coffers in the next five years, things appear to be looking pretty rosy, that’s for sure.
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The banks have borne the brunt of the financial crisis, of that there is little doubt. It will therefore come as welcome news to many SME owners that their self-styled worst enemies are to reveal details of their lending activity across 10,000 postcode areas in the UK. The Treasury believes that the data will encourage greater competition in the banking sector and give homeowners and small businesses a better shot at securing credit. The data – provided by Royal Bank
of Scotland, Lloyds Banking Group, HSBC, Barclays, Santander UK, Nationwide, and Yorkshire and Clydesdale Banks – will be published
quarterly by the British Bankers’ Association (BBA) and the Council of Mortgage Lenders. It’s safe to say there was some uproar when the
Bank of England announced Sir Winston
Churchill would replace Elizabeth Fry on its new £5 note from 2016. Many feared it spelled the end of female representation on British banknotes for the foreseeable future. However, appeasement has arrived for the opposition camp as the Bank has now revealed that Pride
UPCOMING EVENTS Business Scene – London Summer Drinks Networking August 8 Abacus, 24 Cornhill, London EC3V 3ND
Business Junction Champagne Taittinger Networking Breakfast August 14 Freemasons Hall, 60 Great Queen Street, London WC2B 5AZ
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& Prejudice author Jane Austen is to feature on new £10 notes, replacing Charles Darwin in the process. The new £10 notes are expected to be rolled out in 2017, a year after the fivers. There is now wide acceptance that the economic situation is starting to improve ever so slightly. And this was brought out by the Lloyds TSB Spending Power Report for June, which showed that consumer sentiment had hit a record high. The report’s Consumer Sentiment Index reached 112 points, its highest level since November 2010 when the report was first published. Confidence is now 10 points higher than at the end of 2012 and 22 points higher than the historic low of 90 points seen in March 2011. The proportion of respondents who said the UK’s financial situation was ‘not at all good’ fell 2% from 41% in May to 39% in June, and has fallen 8% from March (47%). That said, 45% of people in the north of the UK have held this view for two consecutive months now. So, there is still some work to be done, clearly. Hot on the heels of our feature about diversity
Prelude Group Speaker Boutique: Incentives to Maximise Performance August 15
The Zetter, 86-88 Clerkenwell Road, London EC1M 5RJ
Business Scene – Birmingham Summer Drinks Networking August 15 The Jekyll & Hyde, 28 Steelhouse Lane, Birmingham B4 6BJ
last month, there has been some encouraging news from executive search firm Korn/Ferry Whitehead Mann. According to its research, 47% of first-time appointments to FTSE350 boards in 2012 were women, compared to just 11% in 2007. In addition, the number of positions going to first-time appointees rose by 7% between 2007 and 2012. Yet, the results go on to show – perhaps unsurprisingly – that there has been a marked decline in the number of non-executive director appointments with previous experience in such a role. A fall from 46% in 2007 to 29% is quite telling, as is the fact that only 11% of that 29% have experience of sitting on a FTSE350 executive board, compared to 25% in 2007. Regardless, there is some optimism that the government’s target of 25% female representation on FTSE100 boards by 2015 could be achieved. We’re not convinced just yet, however. Many of our brightest business minds are often accused of not being able to switch off. Well, a new survey by office-searching platform LondonOffices.com seems to lend credence to such a claim. It reveals that 68% of the 600 business professionals surveyed confess to checking their emails at least once while on holiday. A slightly smaller, but still significant, 58% of respondents said they would respond to emails if they deemed it urgent enough, while 32% admitted they continue to respond to important emails. And 21% said they answered the majority of emails received whilst away. There are some who can really unwind though, as 23% said they didn’t check emails at all, with 9% admitting that they deliberately leave their phone or tablet at home.
The Supper Club – Working on the business, not in the business August 20
Business Junction – Networking Lunch August 22
Venue TBC (check website)
The Happenstance, 1A Ludgate Hill, London EC4M 7AA
SyncNorwich August 22
ad:tech September 11-12
Virgin Money Lounge, 10 Castle Meadow, Norwich NR2 1PD
National Hall, Olympia, Hammersmith Road, London W14 8UX
A full event listing is available on our website: elitebusinessmagazine.co.uk/events
26/07/2013 17:53
TALKING POINT You’re tired? Has The Apprentice lost its sense of purpose and turned into a piece of TV trash?
A
nd so, another series of BBC’s The Apprentice has come to an end, with 24-year-old Dr Leah Totton winning a £250,000 investment from Lord Sugar for her ambitious cosmetic surgery venture. In opting for Totton over Luisa Zissman – whose bakery business has now attracted funding from the Angel’s Den investor network – Sugar admitted he was taking the riskier option, but that the profit margins on offer ultimately made the risk worth it. Since its conclusion, the show has once again attracted some fairly negative press, with many business tycoons suggesting that it doesn’t send out the right message to aspiring entrepreneurs. The constant infighting that tends to accompany each and every task, in addition to the rich array of resources made readily available to the contestants, paints an unrealistic picture of the traditional path to entrepreneurial greatness, it is claimed. Far from being an educational programme for the business leaders of tomorrow, The Apprentice is fast becoming regarded as just another reality show, acting as a quick route to televisual stardom for the 16 candidates. That said, the candidates who reach the final are generally there on merit, having presented a viable business plan and entrepreneurial spark worthy of Lord Sugar’s thousands. Where, then, does the small business world stand on one of the BBC’s flagship shows?
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“It has made entrepreneurship far more appealing” The Apprentice is, first and foremost, entertainment, and we shouldn’t forget that. A programme with a ‘proper’ business focus Ceri-Jane wouldn’t attract viewers in the same way that Hackling The Apprentice does. Managing director of Cerub PR While some of the behaviour seen in the show is a lesson in how not to do business, I believe that programmes such as The Apprentice and Dragons’ Den have made entrepreneurship far more appealing and accessible to people, particularly young people, and demonstrate how sales skills, negotiating skills and team management can apply to any kind of business. Twenty years ago, there were no popular programmes on business or entrepreneurship and for many people, the reality of running their own business seemed to be an unrealistic ambition. The business programmes currently on television have made people realise that a good attitude, common sense and the ability to get involved and get stuck in can be more important than an MBA and that if these people 13 can do it, perhaps they can too. While The Apprentice is not perhaps a ‘credible’ business show, it has done a huge amount to make people engage with the idea of running a business, which can only be a good thing.
“Not the full picture of how to be an entrepreneur” The Apprentice used to be really good but it has lost its way in the most recent seasons. I like the way the prize is now more realistic and appealing to entrepreneurs. However, being an Alex Uprichard online business entrepreneur I feel huge Managing partner of Mums In The Know aspects of the way businesses work are completely lacking in the show. How come nobody is ever on their laptop researching the market they are doing tasks on? Why are they running round the streets and using the Yellow Pages? It just seems a little unrealistic. I can reach out via Facebook and Twitter to a chosen demographic instantly to evaluate their thoughts on a marketing concept / product idea and garner statistical evidence to build my plans around. So why are Lord Sugar’s prospective business partners displayed on this show wandering up to random people in the street and basing decisions on what a handful of passers-by think? Why is no one using the fantastic tools we all now have access to via the internet and smart devices to instantly crowdsource opinion and research sales opportunities and marketing strategies? I do love Lord Sugar’s rise from barrow boy story, and the idea of putting candidates in these sorts of situations to test their mettle – but it really isn’t the full picture of how to be an entrepreneur in 2013.
26/07/2013 17:55
BOOK REVIEWS
The 15 Essential Marketing Masterclasses for Your Small Business Dee Blick
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or a start-up looking to take those first few steps to success, making the process of ‘getting your name out there’ as costefficient as possible would rank fairly high on a list of priorities. Given the amount of capital an entrepreneur would have invested into simply putting the necessary wheels in motion, he or she may often be left with a cash shortfall to effectively market their product or service from the offset. It is probably here where the phrase ‘time is money’ really comes into its own, and this message resonates quite strongly through Dee Blick’s The 15 Essential Marketing Masterclasses for Your Small Business. A combination of her own expert insight – founded upon 30 years of working closely with SMEs – and contributions from other marketing professionals, the book serves as a comprehensive yet concise guide for businesses of all shapes and sizes. Indeed, and as alluded to by Blick in her introduction, each ‘masterclass’ could merit a whole book in its own right. However, in recognition of the hectic life the modern entrepreneur leads, Blick has succeeded in creating an accessible resource for business owners that can be visited, and revisited, depending on their specific marketing need. From tightening up your tweeting to making a cold call a warmer experience for your customer, Masterclasses certainly ticks all the necessary boxes. AP
The 15 Essential Marketing Masterclasses for Your Small Business, published by Capstone, is out September 2013 and retails at £14.99
“
A comprehensive yet concise guide for businesses of all shapes and sizes
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The Personal Business Plan – A blueprint for running your life Stephen Bruyant-Langer
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good deal of attention is given to furthering ourselves either professionally or personally, as though these two elements are, at best, separate and, at worst, There is in direct conflict. The temptation for most plenty to be gleaned professionals is to focus on either our lives or our livings, attempting to grow and from the pages of develop in one area while the other atrophies. this guide The Personal Business Plan doesn’t deal with things in such a binary manner, instead using a model familiar to most entrepreneurs to offer a framework to develop and build ourselves the way we would build a business. In his text, Bruyant-Langer takes the insight and meticulous planning often associated with forming an effective business plan and translates it to a much wider context. Whether looking at how to approach developing new competencies, what factors differentiate you from those around you or how to realise your true brand value, there is plenty to be gleaned from the pages of this guide. If The Personal Business Plan has a fault it is that, on The Personal Business occasion, some of the advice can feel Plan – A blueprint for a little nebulous and hard to pin down, running your life, but there are still plenty of striking ideas published by Wiley, for those wanting to plan their path is out September 2013 both within and without the office. JR and retails at £16.99
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”
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the elite INTERVIEW
Galvanised by greed It may seem that everything Chris Dawson touches turns to gold. But it’s not down to good luck: his extraordinary accomplishments are a result of talent, flair for business and a rampant greed for success
C
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hris Dawson could sell ice to an eskimo. In fact, he probably has – after all, Dawson’s business, The Range, a chain of home and garden superstores he started in the late 1980s, sells everything from sofas and garden gnomes to novelty cupcakes and fishtanks. In fact, there probably isn’t that much separating the organised chaos of the market stalls, where he perfected his sales patter, from the stores he runs today. Except, of course, the scale. The Range is forecasted to turn over a whopping £400m this year – nothing bargain basement about that. Trading is in Dawson’s DNA. His father before him was a market trader, taking Dawson junior along to fairs and shows from the age of eight. But he also had a gift of the gab that wasn’t necessarily just down to his genes, he says. “I love trading. I was born to trade. I just trade in big numbers these days; when I’m buying or selling property now, it’s the same antics,” he says, in his broad West Country accent. Dawson did have plenty of opportunity to hone any inherent skill, though. He would bunk off from school to lend his dad a helping hand. “I would go with him because it was better than going to school,” he recalls. To say Dawson struggled at school would be an understatement. There has often been a link made between dyslexia and entrepreneurialism, but, to this day, the entrepreneur insists he cannot write – and he didn’t learn to read until the age of 27. “They’d call me a dunce. I was in a dunce class because I didn’t have the ability to understand what people were saying to me. It was all fuzzy in my head,” he says. “It became awkward for me because I couldn’t learn, I couldn’t pay attention and nor did I want to. It was a question of ‘I can’t and I won’t.’” The challenges extended to Dawson’s home life, too. Perhaps he gets his work ethic from his mother, who worked an 18-hour day when he was young. “She’d go and work on the post at 4 o’clock in the morning. My older brother would help me get ready for school, and then disappear on his motorbike and I’d have to finish getting ready myself. At five or six it was a bit awkward because I didn’t know what the hell I was doing,” he laughs. “After school I’d sit on the step and wait for Mum to get home.”
WORDS: HANNAH PREVETT PHOTOGRAPHY: NATALIE SEERY
“I love trading. I was born to trade. I just trade in big numbers now”
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Dawson’s way of doing it You’ve got to have focus. And that focus is so strong, it’s like a beam. It would burn through a wall. Personal strength. You need to have it to get you through the personal shit that happens in your life. We’ve all been there. What motivates you? Some people call it drive, ambition and so on. I like to call it greed – greed for success. If I’m successful I get paid. Talent is so important. You can’t put in what God left out, can you? There are different levels of talent. If you work with Paul McCartney, you’ll be a better singer/songwriter but you aren’t going to be Paul McCartney. It’s the same with entrepreneurs: I think they’re born.
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“The world’s a stage. I love the chemistry between myself, the public and stock” Asked how his father was occupying his time, Dawson says, “He was pissed most of the time.” He explains that this wasn’t considered unusual behaviour. “In those days, people used to go on the piss all the time. You can make this sound like an Oliver Twist story, but that’s how it bloody well was in those days.” When he did attend school, Dawson was set special tasks and projects as he couldn’t keep up with the rest of the class academically. One time, his PE teacher, Mr Ellis (Dawson has an incredible memory for details) asked him to linseed oil all of the cricket equipment. “I said, ‘What needs to be done with the old rubbishy ones?’ and he said, ‘We’ll throw them away.’ So I took them home and sold them.” He ran a similar scam in his metalwork class. He’d been bestowed the unlikely honour of being in charge of the scrap metal, so he encouraged his peers to make mistakes and chuck their metal rejects in the bin. He’d then pick it all up and flog it. On the last day of school one of his teachers asked him about his enterprising approach to school and told Dawson he was a “bloody genius”. “I can hear him now,” he laughs. “‘You’ll end up in prison or very rich,’ he said. And thank Christ it was the latter.” After leaving school at 15, Dawson turned his hand to anything that would make him a quick buck. He may not have flourished in the classroom, but he was streetwise and had drive and determination. Not long after leaving his education behind, he went picking sloe berries. Unwilling to be beaten by other pickers, he took a somewhat novel approach to the
exercise. “I thought, ‘I’ll have you, you bastards,’ and I sawed the tree down. I was all over that, filling up these duffel bags and sacks. I did about 14 trips backwards and forwards on my pushbike, like an onion salesman.” But, Dawson saved the true magic for the punters. “I can naturally sell,” he says. For Dawson’s self-assured nature often gets mistaken for arrogance. But he has to be seen to be believed: the man is a showman. “The world’s a stage. I love the chemistry between myself, the public and stock. There’s an ignition there. It just goes ‘BOOM’ and I come to life.” Still aged 15, he started street trading out of suitcases. “I was doing watches, perfumes, lighters and things like that,” he recalls. His silver tongue wasn’t always enough to get him out of scrapes, though. “I was showing this girl these lighters – I was a bit of a Jack the lad, and I didn’t look too bad, either. But, still, she told me to get stuffed and turned her back. In the meantime, I’d clicked the lighter, a flame had shot out the size of the bloody roof, went up through her mohair jumper and then caught her hair lacquer. Jesus Christ, we shut the suitcase, ran out of the bloody pub, up the pavement and away we went.” But he did sometimes have better luck with the ladies. He met his wife Sarah selling her a watch outside a pub. “I’d got chucked off a fair and I said, ‘I ain’t going to waste a bloody day,’ so parked my big auction wagon up and got my suitcase out. This gorgeous, stunning blonde girl walked past, and I thought ‘Christ!’ Dawson managed to persuade Sarah to part with £5 for the watch on the basis that she’d
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the elite INTERVIEW
owe him a further £2.99 the next time they met. “I still haven’t had it to this bloody day, 33 years later,” he jokes. As things looked up in his personal life, they weren’t too shabby in his professional life either. An extraordinarily successful market trader, he became a tourist attraction in his home town of Plymouth – which meant he had to become increasingly inventive with his sales patter. “Being a bloody tourist attraction wasn’t necessarily a good thing because coaches would pull up, they’d pull out deckchairs, open a bloody flask and sit there for two or three hours. You need the crowd to refresh so you can regurgitate,” he explains. Dawson was blowing the competition out of the water. It’s difficult to get a gauge of how much money he was earning at this point; he told one reporter it was around £10,000, but in a recent Peter Jones documentary it was estimated to be a whopping £38,000. “Careful, the Inland Revenue will be reading,” he jokes. “Let’s just say it was a hell of a lot.” That sounds true enough. Dawson tells wonderful stories of his daughter Lisa, then a toddler, playing with the money he’d earned as a trader that day. “I remember coming home with carrier bags of money and my daughter running through it, kicking it all over the show.
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Newton Abbot. Within three years, he had nearly trebled the turnover from the previous owner and sold one of the stores for a huge profit. He now only had one store, but was entirely debt-free. This was a pattern he was set to continue. “My mentality is all about being debt-free,” he says. “We’re debt-free today.” That certainly seems to be the case: The Range has never taken a penny of investment and while short-term loans or extensions on overdrafts may be a necessary measure when Dawson is buying property, it is always paid off in full in a “couple of months”. He may not be able to write, but Dawson is fastididious about the numbers. The Range officially launched at the end of 1989, Dawson says. He also claims turnover hit £1m in four months, and that the business turned a profit of £250,000 in its first year. It continued to grow astronomically fast – albeit “only the speed the cash would allow”, Dawson points out. The Range will have 90 stores trading by Christmas, and Dawson predicts a further 25 or 30 in 2014. “We’ll have 8,000 staff by the end of this year,” he says. Part of the reason for his success has been an instinct for picking exactly the right products to sell. “Perhaps I did learn some of it, but 80% of it was instinct. It was just natural. Some people can sing from day one. Some people are brilliant artists, or football players and so on. I’m really not being arrogant, but this is what came naturally to me.” These days, of course, he has a team of buyers around him – including his daughter Lisa. His wife, Sarah, also works within the business, as does their son, Christopher, who is part of the refitting team. What’s more, his sheer appetite for a good deal has to be credited somewhere in this rags to riches tale. It has been well documented over recent years that Dawson has taken stock from many of the retailers that have gone to the wall. And the most shocking – not to mention awe-inspiring – deal that Dawson has done in recent times is when MFI hit the runners in 2009. He claims to have bought stock worth almost £70m for less than £3m. All of these kinds of antics have stood Dawson in great stead, in both business and his personal life. He’s certainly not short of a penny or two: he was this year ranked 153 on The Sunday Times Rich List with an estimated personal wealth of £585m. It would perhaps be natural to assume that running and owning a hugely profitable business, working alongside his nearest and dearest, owning a villa in Cannes and travelling around in his convertible Bentley or helicopter would be enough for Dawson. But no, he wants more, he says. “I’m greedy for success,” he says, honestly. Asked about his day-to-day role, it’s difficult to put a finger on what he actually does. As well as also running a property business and a carpet cleaning business, it is clear that it is Dawson’s drive and vision that propel The Range forwards. “Am I the chief executive? I don’t even know what that means,” he exclaims. “I am very hands on in terms of day-to-day management, but I’m not stupid. If I got run over by a bus there are people in each segment of this business who can run it. It’d still run without me. Maybe not so fast. Maybe not so entrepreneurial. Maybe not so cheeky. But you know what, I can’t stay on this planet forever. But Jesus Christ, I’ll make sure the business is shipshape before I leave.”
I’m trying to count the bloody money and she thinks it’s really funny to be kicking it around, and then this tenner lands in her custard.” Dawson paints a picture of a rather hedonistic household, with money fluttering from every surface, but he says it was important for him that his children (he also has a son, Christopher) learned the value of money. “They’re very grounded, extremely so. When they were kids, even though they were at private school, if they wanted anything, they grafted Saturdays in the store. They moaned a bit, yes, but they knew there was no point trying to negotiate with me.” For Dawson’s star was truly on the ascent. Taking the profits he’d earned as a trader, he’d bought two stores, one in Exeter and one in
“Perhaps I did learn some of it, but 80% of it was instinct. It was just natural”
19
26/07/2013 17:43
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Make new & mend
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Whether you’re repairing a much loved knickknack or reinventing your favourite possession, sugru is the miracle material taking the world by storm
WORDS: JOSH RUSSELL
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(L)One to watch.indd 1
any of our greatest consumer products these days are collaborative efforts, only made possible by the connected intellect of generations of designers and thinkers. Finding a bona fide invention, created from scratch that, nonetheless, stands a good chance of becoming a part of our everyday lives, is rare indeed. Sugru is such a product. A self-setting rubber that can bond to practically any surface, it allows the user to easily repair and modify household items, knocking Blu-Tack, Polyfilla and Sellotape into a cocked hat. Already, sugru has survived trips to the North Pole and into space, built up a loyal fan-base of product-hackers, DIYers and kids and received rave reviews and accolades alike. As can be inferred from the community that
has sprung up around it, the drive behind sugru has always been about putting control back in the consumer’s hands. “I grew up on a farm, so for me that sort of way of life, make do and mend, is very normal,” says inventor and co-founder Jane Ní Dhulchaointigh. In a world where most things are intended to be discarded the moment they’re no longer fit for purpose, she believes people feel let down by the lack of emotional connection. “If you think about the stuff that means something to you, it’s usually something you’ve either had for a long time, you’ve taken care of or it’s been passed to you from somebody else,” she explains. “I wanted to design something that would basically encourage that and make it fun and easy for people to repair and customise things.”
“A key part of sugru was to give the impression of it being magic”
26/07/2013 18:20
ONE TO WATCH
22
This taste for the aesthetic isn’t all that surprising, given that originally Ní Dhulchaointigh studied sculpture, before moving into a masters degree in product design at the Royal College of Art. However, she didn’t want to just combine existing materials to create another new product that would be released and, before long, forgotten. Instead, she decided she wanted to experiment with the materials themselves – something most people would find daunting without a firm background in chemistry. “I was extremely naive and probably still am,” Ní Dhulchaointigh admits. “I regard that sort of naivety as actually quite an asset as I didn’t really see the barriers or how long it would take.” Sugru may have seemed rather inauspicious in its first form. Initially an experiment blending silicon sealant and waste wood powder, it left Ní Dhulchaointigh with something of a mess on her hands. “It was an extremely smelly and horrible thing to do but for some reason I did it,” she comments. However, with a faint echo of Charles Goodyear’s serendipitous discovery of vulcanisation, a gooey mess hid a rather striking secret. “I left it for an hour; when I came back the mixture turned from a dough-like consistency to bouncy rubber,” she says. “There was something there that was amazing.” While it was certainly an intriguing discovery, it was far from a finished product. “Working with it was obviously very messy and not a very nice experience,” says Ní Dhulchaointigh. Sugru had some very exciting properties
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“We believed that sugru had the potential to be a universal household product, like Blu-Tack or duct tape”
but an important influencing factor for the inventor and entrepreneur was putting herself in the shoes of her consumers and the impact she wanted to create. “A key part of sugru was to give the impression of it being magic,” she explains. “That required a certain design of the material to have the sense that you can do anything or that it can stick to anything.” And thus began a long development period. While the technological process was being ironed out, Ní Dhulchaointigh and her co-founders, Roger Ashby and James Carrigan, began to consider their route to market, something inevitably influenced by Ashby’s experience licensing technologies unearthed in universities into large industry. “We were thinking really big,” she explains. “We believed that sugru had the potential to be a universal household product like Blu-Tack or duct tape.” It certainly wasn’t met with a lack of interest from some of the industry’s best and brightest. Unfortunately, while all-comers recognised that sugru was an innovative and disruptive product, there were simply easier ways for the giants to make money. “Sugru is something that I think is still slightly ahead of its time – back when I started in 2004, nobody was talking about fixing and mending things,” she explains. “That only started when the recession hit and then people realised that actually all of this consumer stuff isn’t really what it’s cracked up to be.” While the meetings were incredibly useful in guiding and inspiring the development process, it eventually became clear that licensing wasn’t going to offer the best route to market, particularly when the recession hit in 2008 and the funds began to dry up. Fortunately, a shift in focus would ultimately become one of the enterprise’s greatest assets. “At a real low point I met a real friend of mine for a coffee and she gave me the best piece of advice I’ve ever been given,” says Ní Dhulchaointigh. “It was, ‘I know you want this to be big but don’t start there; start small. If you can make this work for ten people, you can make it work for 100. If you make
26/07/2013 17:46
ONE TO WATCH
it work for 100, it can go to 1,000.’ That was a real eye-opener for me.” The team revised their investment targets and secured a smaller amount of funding from an angel investor, setting themselves the challenge of building organically to a six-month launch. Friends and associates with experience in social media helped to forge a presence for sugru online while the team refocused on what it was that made their brand strong. “I was thinking, ‘What should this product be? What is this brand?’” recalls Ní Dhulchaointigh. And it was clear that rather than being something drab and functional, the whole focus of the as-yetunnamed product needed to be about being able to play around with the things that surround you and make something new. “Sugru is the Irish word for ‘play’,” says the entrepreneur. “It’s about taking things into your hands and having fun solving problems.” This new approach was a masterstroke. Rather than telling the consumer what they should do with the product, sugru put everything in their hands, inviting them to freely explore all the things for which they could use the mouldable, adhesive rubber. “The whole way we launched it was not telling people what to do but asking, ‘What would you do with it? What’s your problem?’” comments Ní Dhulchaointigh. “Then people would share their photos and inspire each other with what they could do.” At the time, the team couldn’t have possibly known quite how far this would take them. When they finally sent out the product to selected bloggers and journalists, initial
Company CV Name: sugru Founded by: Jane Ní Dhulchaointigh, Roger Ashby and James Carrigan Founded in: 2004 (launched 2010) Team: about 40
responses were limited. But then they found an unexpected benefactor in Daily Telegraph journalist Harry Wallop. Ní Dhulchaointigh recalls: “He said, ‘the stuff sounds brilliant – bring it over, I’ll give it a try and review it for you.’” The day before the product’s launch, Wallop’s video review hit the web – he’d given the product ten out of ten. The team had spent two months making a thousand packs of sugru for their launch. Such was the impact of Wallop’s review, every last pack sold within six hours. “It was amazing,” says Ní Dhulchaointigh. “That day just transformed everything because it told us there were customers for this and people who were as excited as us.” With this vindication, the team were able to secure more funding and begin to scale up production. And since then, the sugru team has scarcely had a chance to draw breath, seeing a nigh on constant influx of interest. Not only has the product netted its inventor the London Design Festival Design Entrepreneur award but the press attention it has garnered has been huge, including its inclusion in Time Magazine’s 50 Best Inventions of 2010 – the iPad ranked at just 34 while sugru was placed at a lofty 22. “They asked, ‘How often does an invention come along that is not full of really high-tech stuff but is something that is small and humble yet can make a difference in millions and millions lives over generations?’” says Ní Dhulchaointigh. But it’s the response they’ve had from their customers that has really made the most impact, confirming that the time for products like sugru has come. “Technology in general is being democratised,” Ní Dhulchaointigh comments. “That’s what we’re part of.” With technology such as 3D printing become cheaper and more readily available, possessions that consumers have played a part in creating are completely changing the way we view value. As its inventor comments: “The whole reason for sugru is because people are feeling like, ‘Where’s the soul in these things?’” It’s still early days for sugru and its community of product-hackers, modders, menders and creatives but, given its reception so far, it seems likely it’s going to become a firm fixture in a lot of people’s lives.
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“The whole way we launched it was not telling people what to do but asking, ‘What would you do with it?’
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31/05/2013 10:37 5/31/2013 9:26:48 AM
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A 2 day LEARNING event that will equip you to this year and next. In September 2013, for two days, 1,436 switched on UK business owners (and Britain’s most successful ever Olympian!) will attend the National Entrepreneur’s Convention at the ICC in Birmingham to discover “what’s working NOW” to grow REAL UK businesses...
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“Since meeting Nigel, I’ve grown my business considerably. I’ve seen a lot of business speakers but Nigel really speaks my language. The quality and energy of Nigel’s events are always amazing and that’s why I’m going, and that’s why I’ve made my business owner friend go too. There’s no way I can miss this.” Libby Langley Zest Communications Market Harborough
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It’s NOT a multi-speaker event. This won’t be a revolving door of gurus and “special guests” like other events;
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at www.entcon2013.com or call 0121 765 5551 Elite Magazine Untitled-21 1 Full Page.indd 1
25/06/2013 26/07/2013 15:29 19:01
ANALYSIS
Despite a vote on independence looming, start-ups in Scotland are keeping their heads down and leading the small business boom north of the border
Scotland shouting loud
27
WORDS: ADAM PESCOD
S
(L)Analysis Scotland.indd 1
omething has been stirring in Scotland of late. And for those of you who think we’re talking about independence, think again. While people operating outside of the British business community could be forgiven for assuming as such, what is really making waves north of the border is a sizeable start-up surge. Indeed, figures released recently by the Global Entrepreneurship Monitor (GEM) show that Scotland now has more entrepreneurs than at any other point in its illustrious history. It has not gone unnoticed that companies such as BrewDog, Skyscanner, Vegware and SKYCIG – among others – have been proudly flying the flag for Scottish enterprise over the last five years, and seem to have engendered a certain entrepreneurial spirit among the everyday citizen. “It is a great time right now – you can feel that something is happening,” says Lucy-Rose Walker, chief solutions officer at Entrepreneurial Spark, a new and fast-growing incubator for start-ups launched in January 2012, and backed by a trio of Scottish entrepreneurs. Indeed, the emergence of an organisation in the form of Entrepreneurial Spark is telling enough, with the Scottish government recognising how essential the country’s younger, more exciting, enterprises are to its economic future – whether that is as part of the UK, or not.
26/07/2013 17:48
ANALYSIS
“It is not all necessarily about building million- and billion-pound businesses. It is just about creating that start-up renaissance”
26 28
(L)Analysis Scotland.indd 2
“Certainly the government here in Scotland recognises it is the ‘meat and two veg’ companies who are going to kickstart the economy and have a big impact on it moving forward,” adds Walker. “It is not all necessarily about building million- and billion-pound businesses. It is just about creating that start-up renaissance.” Of course, one must be careful not to get Lucy-Rose Walker ahead of oneself. We are, after all, living in a recession, and much like other parts of the UK, a rise in start-up businesses should also be treated with a healthy dose of cynicism. Things are put in perspective by somebody who is very much on the inside of Scotland’s small business community. “Over the last 18 months or so, you have seen Scotland’s business start-up figures increase and, as a small-business organisation, naturally we support Scotland’s entrepreneurs and self-employed,” says Stuart McKinnon, senior public affairs advisor at the Federation of Small Businesses (FSB) in Scotland. “But there is a little bit of concern that a proportion of the new selfemployed are simply displaced from the ranks of the employed as a consequence of redundancies in either the public sector or larger private-sector employers.” Nevertheless, it is clear that such an eventuality should not be treated as a sign of weakness and the FSB, among others, is eager to help stimulate and support the start-up spirit in Scotland. “I think there is an opportunity to give these people the best chance to succeed,” adds McKinnon. “That means getting the support right for start-ups and the very smallest firms.” Well, it would seem that there is already ample assistance in place for aspiring entrepreneurs looking to set sail in Bonnie Scotland. And this is only likely to increase with time, according to Elaine Morrison, senior manager on the commercialisation portfolio at economic development agency Scottish Enterprise. She says: “Public- and private-sector organisations across Scotland have been coming together to really understand whether there are other, better, faster and more sustainable ways to make the ecosystem work effectively and ensure that Scotland is recognised as a place where entrepreneurs can start up and flourish.” However, one message that comes through strongly from all quarters is how the breadth and quality of the current support network in Scotland has laid an incredibly solid groundwork for established businesses, as well as new and expanding enterprises. “There is a real sense among the business community of people who want to give something back,” says Amy Dalrymple, policy and research manager at the Scottish Chambers of Commerce (SCC). She cites the example of the SCC’s Business Mentoring Scotland service, which currently boasts in the region of 900 business professionals who voluntarily lend a helping hand to younger firms on areas from sales and marketing to other key processes. “This is just an example of the kind of culture that I think there is in Scotland,” adds Dalrymple. “It is supportive and about saying, ‘We are a business community and we need to grow together.’”
Lucy-Rose Walker,
chief solutions officer at Entrepreneurial Spark
Stuart McKinnon, senior public affairs advisor at the Federation of Small Businesses (FSB) in Scotland
Amy Dalrymple,
policy and research manager at the Scottish Chambers of Commerce (SCC)
Alexander Cole,
founder and CEO of Edinburgh technology firm Peekabu Studios
26/07/2013 17:49
Untitled-9 1
30/04/2013 19:28
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Untitled-12 1
31/05/2013 15:11
http://qr.verisignlabs.com/qrcode/download/QRBW061[5/22/2013 12:21:44 PM]
ANALYSIS
Flying the flag One company currently taking Scotland, and the world, by storm is compostable food-packaging enterprise Vegware. Founded by Edinburgh University graduate Jo Frankel in 2006, Vegware bases its operations in the Scottish capital, where it now has two offices, and in Danielson in Connecticut, USA. It Lucy Frankel, has further operational outposts in communications director South Africa and Australia and boasts a range of partners across continental Europe. The firm produces packaging for the food-service industry (see right) that can be recycled alongside food waste by virtue of being put together using natural starches and compostable material. The idea for the business came to Frankel when he was in California and used a bio-plastic spoon to eat some frozen yogurt – he realised that no company at the time was producing anything similar in the UK. Suffice to say, Frankel has exploited the gap in the market rather successfully, and from an initial team of two in 2008 – business partner Dominic Marjoram joined when Vegware became a limited company – the company now employs more than 30 staff in Scotland. And communications director Lucy Frankel is adamant that there could be no place better for Vegware to conduct the majority of its work. “I think it is the energy and dedication of the people in Edinburgh that has helped our fantastic trajectory for growth,” she says. “There are quite a few people selling packaging in the market but people come back to us, and tell their friends about us, because they just enjoy dealing with us. The people we have been lucky enough to hire are great to work with – they are dynamic, “The people we energetic and really well qualified.” Frankel is also keen to lavish praise have been lucky on the Scottish government for its enough to hire forward-thinking green policies, that have given Vegware a solid platform are great to which to spread its positive work with – they from message far and wide. “There is are dynamic, legislation coming into force on 1 January 2014, which is far ahead of energetic, England, for example, in terms of and really waste management, because all businesses are going to be required well qualified” by law to recycle various key waste streams,” she says. We find this really exciting because we know that introducing food recycling and going zero waste is good for your business. It saves money, it is good for overall sustainability, because you are avoiding landfill tax, and you are setting yourselves up to be future-proofed.” Vegware is on target to report 15-fold growth since 2009 and with plenty more products and global projects in the pipeline, it is certainly showing what can be achieved with a bit of innovation and imagination. Indeed, this is only enhanced by the quality of life offered by an energetic Edinburgh. “Most of our team either walk or cycle to work, and if you have a happy workforce, you are going to be more productive,” says Frankel. And to top it off Vegware has just been handed a Queen’s Award for Enterprise in Sustainable Development. You can’t argue with that.
(L)Analysis Scotland.indd 3
Vegware
McKinnon affirms that Scotland has a “distinct business support network in comparison to the rest of the UK”, and draws attention to how Scottish Enterprise is fulfilling a role akin to that of regional development agencies (RDAs), which were abolished in England last year. He also bangs the drum for the much lauded Business Gateway, a scheme run by local authorities in Scotland that acts as a useful port of call for Scottish businesses of any shape and size. “While it is difficult to compare Scotland with England because there are significant historic differences, many of our members in Scotland do really appreciate the support that both of these agencies provide,” says McKinnon. And the government is doing its bit too, with the Encouraging Dynamic Growth Entrepreneurs (EDGE) fund awarding grants of up to £50,000 to the innovative companies identified as having the ability to lead Scotland’s charge to entrepreneurial greatness. EDGE is run in conjunction with Scottish Enterprise, Highlands and Islands Enterprise, Business Gateway and Entrepreneurial Spark, as well as the Royal Bank of Scotland, which has offered an additional package of support to the programme. Suffice to say, Scotland in itself has enough attractions for business owners without all of the above, and much of it has to do with its size. “It has a great deal going for it in the fact that, because it is a small country, you can find out quite quickly whether something is going to work or not,” says Walker. “So, ultimately, your aim may be to take something global, but you can start it quite small and test it out – and have quite a big impact in a small country quite quickly.” A sense of localisation also paves the way for businesses to have more of an influence on those in control of the purse strings. “You have better access to the people in positions of power,” explains Lucy Frankel, communications director at Vegware, the eco-friendly food service packaging company named FSB Streamline UK Business of the Year in April. “We have a fantastic relationship with our local politicians; we had Richard Lockhead, the cabinet secretary for environmental and rural affairs come to open our new office recently; we have had two Scottish parliamentary motions in our name; and the whole of Edinburgh city council voted unanimously to support what we are doing.” So, what do Edinburgh and Glasgow – Scotland’s two largest cities – provide the entrepreneur that London, in particular, doesn’t? One dominant theme here appears to revolve around the calibre of available talent, aided in part by the quality of life on offer in Scotland, and the educational prowess that the country’s universities can boast.
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26/07/2013 17:49
ANALYSIS
Top dogs
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“The variant of on to winning a fund from the Scottish Institute of Enterprise, followed by a fellowship skilled people and industries that are from the Royal Society of Edinburgh. The available within latter, it seems, was indispensable. “It came just Edinburgh and at the right time for me to be able to knuckle Glasgow means you down and do the proper market testing that I needed to do,” he says. “Not a lot of people can tap into most Doug Mutter, markets from here, know about it, but it is a massive boost and operations manager so it is certainly a couldn’t have come at a better time for me.” for Edinburgh-based good place to start,” Cole has only shed light on yet more avenues e-cigarette provider says Doug Mutter, for support here – and when one throws the SKYCIG operations manager riches of resources on its doorstep into the for Edinburgh-based e-cigarette provider equation, it is of little wonder that Scotland stands itself in good stead as a place to do SKYCIG, which is currently outstripping its rivals in what has become a highly business. It will thus come of little surprise to learn that the majority of start-ups are not competitive market. “Edinburgh itself, where we’re based, is a thriving city, it is very overly concerned about how a breakaway from the rest of the UK could affect any future functional across a whole range of industries success. More accurately, the general consensus and we have tapped into knowing there will be plenty of skilled people available in the appears to be that there is not yet enough information to make an informed judgement. area. We have assembled a great team of multi-skilled people throughout The default attitude is therefore ‘business as usual’ – and that is all the departments.” “Scotland isn’t nothing if not admirable. “This And, as far as Scotland’s is a political debate and most educational institutes are an outpost – it concerned, not only are they business people are getting on is a fantastic with running their businesses,” globally recognised centres base from of excellence, but they also play says Dalrymple. “There is a view a huge part in the development that it is something of a which to grow of the business scene around distraction, in a way – the debate your business” at the moment has been them. “There is a real enthusiasm in the university characterised by a lot of partisan Lucy Frankel statements being thrown around community for growing the and that is not useful for businesses.” commercial impact of the research that they That said, McKinnon admits it won’t be an are doing,” says Dalrymple. “So there are easy decision for Scotland’s SMEs when the plenty of opportunities for somebody looking time comes. “It is a challenge for these business to start a business to hook up with some of the really innovative work going on at that owners to decide whether they can separate academic level.” what might be good for their business, and Alexander Cole, founder and CEO of what they might believe individually,” he says. fledgling Edinburgh technology firm Peekabu “There are lots of debates about what the Studios, would certainly vouch for this, small-business and large-business communities think at the moment and I am sure we will having started up while studying in the city. hear a lot more about that in the next year.” Edinburgh University granted him a small Constitutional concerns aside though, any amount of financial support before he went budding start-up could well regret not considering Scotland as a launch pad, and established home, for their venture. “It really isn’t an outpost – it is a fantastic base from which to grow your business,” says Frankel. And, with improved transport links bringing all parts of the UK closer than ever before, it offers an attractive and realistic alternative to good old London. Needless to say, a recent Ernst & Young report – which shows a 49% rise in foreign inward investment to Scotland – almost speaks for itself.
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The British beer industry has definitely had a little bit of character – and controversy – injected into it recently, thanks mainly to the efforts of a certain brewery called BrewDog. Founded in 2007 by Aberdeenshire pair James Watt and Martin Dickie, it would be something of an understatement to say that BrewDog has enjoyed a monumental rise in the last few years. Through a combination of bold and brash marketing campaigns, and an attractive range of boundarypushing beer, Messrs Watt and Dickie have certainly managed to put their venture, and Scotland, firmly on the entrepreneurial map.
“Organisations such as Scottish Enterprise and Scottish Development International provide a great support structure for ambitious, internationally minded companies” James Watt, co-founder
Only last month, BrewDog raised a staggering £1m in 24 hours in its third crowdfunding push, coined Equity for Punks 3, and is set to open its first overseas venue in Stockholm, Sweden, with more in the pipeline. “Scotland is a great place to do business,” says Watt. “Organisations such as Scottish Enterprise and Scottish Development International provide a great support structure for ambitious, internationally minded companies and Scotland is a great base to export from with its global reputation for amazing quality food and drink.”
26/07/2013 17:49
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26/07/2013 12:54
FINANCE
Deciding whether to start from scratch or purchase a pre-built business can be a tricky call
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WORDS: JOSH RUSSELL
Something old, I something new?
t’s fair to say that, in post-recession Britain, more and more people are interested in owning a business. As headcounts have been slashed, people are yearning for the sense of controlling their own destiny. Given that entrepreneurialism is the order of the day, it can often be tempting to assume that launching your own Reggae Reggae Sauce or creating the next Trunki is the route to success. But, in the world of business, is breaking new ground all it’s cracked up to be? Or are the tried-and-tested formulas for success truly the best? As with many decisions in life, probably one of the first considerations that will need to be made is around money. While it’s certainly a truism that you have to spend money to make money, there is a disparity of investment between starting from scratch and buying an established business lock stock. “Effectively, these days, you can start in business for a couple of hundred quid,” says Mark Mills, founder of corporate finance advisors Comerga Capital and business resource howtosellacompany.co.uk. “You can buy a limited company, you can set up a website, you can be trading within a day or two.” A business undeniably will require a lot of capital to grow, but – when buying an established business – the purchaser will be effectively reimbursing this capital in one go, rather than in an organic manner.
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FINANCE
Inevitably, a start-up is going to give you the kind of creative freedom that an established enterprise can’t
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But it’s not all about the money; the decision is also often dependent on how much creative input an individual wants in shaping their business. “If you do it on your own, it’s vanilla or pure,” comments Mills. Inevitably, a start-up is going to give you the kind of creative freedom that an established enterprise can’t – a factor that often sets entrepreneurs apart from other successful business owners is that they’re attracted to the idea of having a completely blank slate. Obviously, the flip side of this means purchasing a business about which many decisions have already been made; while this offers less freedom, an established business model offers more security and you have a functioning business from the get-go. Mills continues: “Going into something with some momentum is going to cost you more but actually you’re going to get there quicker.” One of these circumstances is more likely to appeal than the other, depending on personal preference. Nicholas Gill, CEO and co-owner of specialist furniture supplier David Phillips has experienced both sides of the coin. Having an extensive background as an investment banker and a mergers and acquisitions (M&A) adviser, he’d spent plenty of time purchasing and investing in businesses. “But I wanted to make the change from being an adviser to being the principal,” he explains. He made the decision to start his own investment banking firm, allowing him to carry over his previous experience and still spend time investing in and acquiring businesses. But the journey helped him realise something rather fundamental. “Going through the process of starting that business confirmed my belief that I’d rather buy a business than start a business,” Gill says. In part, this was because of the high failure rate of start-ups; by contrast, in an established business, it was easier to assess elements that were successful and identify those that needed improvement. He explains: “The important thing for me was that I didn’t have that burning conviction of an idea or a business model.” However, it’s not just about what the new owner is bringing to the table. Inevitably, the success of a deal for an existing business is going to hinge much more on what happens after each party signs on the dotted line. While buying into an established enterprise can save on the hard slog getting the business into a profitable state, the legacy transition between an entrepreneurial founder and an owner executive won’t automatically be a smooth one. A lot of attention is given to carrying out due diligence around the numbers when acquiring a business, but Mills feels as much attention needs to be given to considering the transition between the personality of the old owner and one’s own. “If the old owner has been charismatic, they’ve had the vision, they’ve had the passion, not everybody will necessarily buy into the new owner’s version of that,” he comments.
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FINANCE
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However, this definitely doesn’t need to be viewed as a negative and often the culture imbued by the business’s founder in actuality can potentially set the tone for the future. After his experiences setting up his own enterprise, Gill made the decision to purchase an established company: David Phillips. And while picking up where its founders – David Heller and Phillip Scheiner – left off could have been an intimidating proposition, he actually found it to be hugely supportive. “Phillip is a fairly remarkable individual – because it had been a start-up, they’d imbued the business with a really strong ethos and sense of purpose,” Gill explains. “That really helped the transition period between their ownership and mine. In the early days when I had to make a decision, it gave me a very strong touchstone as a point to base my decision-making on.” That’s not to say there are no risks involved. Whether an individual is starting a company from scratch or acquiring something down the line, both involve no small amount of danger and can come packaged with pretty serious losses if they fail. But is one inherently more risky than the other? “I have a different answer than most people,” admits Mills. He feels that, despite the uncertainties involved in launching a start-up, you are required to rely solely on your own efforts and your own drive. “When you start up on your own, you’re in a bit of a bubble of enthusiasm, your own “If you buy something, charisma and your passion,” he says. you’ve always got that “Whereas, if you buy something, you’ve always got that risk of there risk of there being being something in the background.” something in the While it might be easy to slip into complacency because you have carried background” out plenty of due diligence, to some degree you are still having to rely Mark Mills, founder of Comerga Capital on and trust in another person. Gill gives the example where he might be buying a business in which 20% of the revenue comes from one single client. That client could have informally let slip at one point that they were considering changing their service once the contract came up for renewal and the owner decides it might be time to beat a quick retreat from the business. “They never tell me, they never write it down anywhere; it’s completely unprovable,” he says. “As the new owner I get in, day one, bang: 20% of the revenue’s gone.” But, sometimes, the route you go down just isn’t something that can be reasoned through. While you can mull over risks and revenues almost indefinitely, sometimes it really is simply a question of temperament. Gill makes reference to a friend of his who is almost his opposite in temperament: a serial entrepreneur who is on his fourth business. “He is a guy who absolutely has to do things his way,” he explains. “The reason he likes starting businesses is that he has an idea; he’s convinced about it and compromise is just not what he’s in it for.” Conversely, Gill prefers to learn from the processes and implementations of others, improving or replacing things that don’t work rather than throwing out the baby with the bathwater. “My view is that different people have different ways of approaching problems and you can take enormous positives from that. You look and you say, ‘actually, yeah, that’s an interesting way of doing it.’” Ultimately, whether looking at starting up an enterprise or acquiring one at a later stage, both form a vital function in the business ecosystem and require different, albeit complementary, skill sets. Making the decision about which is the best route for you is important, but, of course, what really matters is what comes afterwards. And that, rather than which fork in the road you take, is what makes a successful businessperson.
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26/07/2013 19:27
FINANCE
Five-minute money masterclass
How to grow your customer base Before a burgeoning business can start thinking about generating a healthy profit, it needs to convince a sufficient number of people that it has product or service is worth forking out for. Of course, an entrepreneur who has unbridled belief and passion in their project will probably be better placed to attract the new business that he or she needs in the early stages of their venture. However, desire will only get somebody so far, and there are other skills and activities that must be engaged if one is to grow their customer base at the desired rate from the outset.
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WORDS: ADAM PESCOD
Engage with existing customers Given that the everyday start-up won’t have budgeted for an extensive marketing campaign, word of mouth is undoubtedly its best friend in the early days. And in an age where the internet is king, offering existing customers the opportunity to rate your product or service is nigh on indispensable. “If you are a small business, and you are able to display recommendations and good reviews from previous customers on your website, that will certainly drum up business,” comments Jasper Martens, head of marketing and communications for online business insurance provider Simply Business. “It works for a business of any size, but especially for smaller businesses simply because it doesn’t cost a lot of money. It is basically one of the most cost-efficient ways to promote your business, and lets your customers tell the story, not yourself.” Fiona Hotston-Moore, tax and business advisory partner at accountancy firm Reeves, adds: “I suppose there is also an element of being brave enough to ask your customers to make referrals for you, which is obvious, but on the other hand it often gets overlooked.”
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26/07/2013 18:07
FINANCE
Only network when necessary The old idiom ‘time is money’ really does hold a fair degree of credence when it comes to business. For that reason, the opportunity to attend a networking event must be looked upon in terms of its potential outcomes, both positive and negative. “Networking is about quality rather than quantity,” comments Hotston-Moore. “It is about choosing the right networking events to go to, coming out of those events with one or two contacts to follow-up and following those contacts up consistently.” And, as Martens suggests, doing some thorough research beforehand should ensure you don’t end up wasting otherwise valuable time. “There are too many network events and if you are not careful, you will get carried away – you will end up at network events that don’t contribute to your business at all,” he says. “I would advise browsing a couple of network events you like so you can really engage with some people online. That way, you can identify some potential prospects and get some decent business cards.”
Ignore the high street at your peril It is commercial suicide for any aspiring entrepreneur to discount the internet nowadays. Nevertheless, the high street still has much to offer – which the world wide web doesn’t – when it comes to building one’s customer base. “You can’t ignore any market and still only about 10% of transactions in the UK are done online, compared to the high street, even though we are told every day it is dying on its backside,” says Stuart Conroy, owner and managing director of mobile phone and hand-held device accessories supplier Activ8 Distribution. “One of the problems with the internet is that, because it is so accessible, your business ideas can be copied quite quickly, whereas if you’re in the high street, you may get less business, but there is less chance of being copied in certain areas.” Conroy nevertheless admits that getting the price right is essential if you are going to make a successful go of the high street. He adds: “If the pricing on the high street is way above online, people will go home every time and just log on to Amazon and eBay, but we are seeing great success from some of our customers on the high street.”
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Fiona HotstonMoore, tax and
business advisory partner at accountancy firm Reeves
Stuart Conroy, owner and managing director of mobile phone and hand-held device accessories supplier Activ8 Distribution
Jasper Martens,
head of marketing and communications for online business insurance provider Simply Business
Smell what sells
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This phrase may be familiar to regular viewers of The Apprentice, but it rings true for any budding business tycoon who has a product they believe will wow the masses. Needless to say, without undertaking a solid chunk of market research prior to launch, the ship could sink before it has even had the chance to set sail. “I think many entrepreneurs often get carried away by their business idea, they think it is amazing and brilliant,” says Martens. “They take a lot of risks – quit their job and set up their own business – but haven’t done any proper market research, and if you haven’t done any market research, you will fail.” He explains that market research needn’t be an expensive process either, citing the Office of National Statistics and Business & IP Centre at the British Library as readily available and cost-free resources for entrepreneurs.
“Winning new business is about developing relationships longer term” Fiona Hotston-Moore
Be patient At the end of the day, a sizeable customer base isn’t going to materialise overnight, so a little bit of faith – and trial and error – can go a long way. “You tend to rush things at the start but we have learned that it is better to go out and research the trade shows and our positioning in them,” explains Conroy. “We thought we had to show ourselves as big, brash and bold, but you actually don’t – you just have to be more selective, depending on your business model.” That patience extends to the initial contact you have with potential customers too, according to HotstonMoore. “Winning new business is about developing relationships longer term,” she says. “You are unlikely to succeed in selling something to a customer on the first conversation or even the second conversation.” In that sense, the entrepreneur has to trust that eventually their professional perseverance will pay off.
26/07/2013 18:08
FINANCE
Firm foundations Clive Lewis, head of enterprise at the ICAEW, weighs up the pros and cons of the various ownership structures available to entrepreneurs
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E
ntrepreneurs are often so focused on their product or service that they end up overlooking the actual ownership structure of their venture. Therefore, it would probably be helpful to take a look at the available options, what each means and why it’s something you need to get right before you start. Sole trader
This structure offers fewest administrative burdens but there are implications for tax and raising finance. You’ll also have unlimited liability, which could mean risking everything in the worst case scenario. Partnership
About 407,000 UK businesses are structured in this way, with two or more people setting up jointly. They each own the business, share profits, losses and unlimited liability just like a sole trader. It is quite complex and does require specialist accountancy and legal skills to establish but is a common and often successful formula. Limited Liability Partnership (LLP)
LLPs are a touch more complex. The audit, returns, winding up and insolvency rules are similar to limited companies but the tax situation is just like partnerships. The added factor here is that partners, as the name suggests, are liable only to the limit of their partnership commitments.
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Limited Company
This is a legal entity that is separate from its owners. Ownership can be changed (the company bought and sold) or extra capital raised though the selling of shares (equity), without necessarily affecting the management of the company.
Key areas of difference between these structures Taxation
For the first three structures above, the owner(s) are not distinct from the business. The business’s profits are therefore viewed as the owner(s)’ income and are taxed as such. So profits over £32,011 for a sole trader (or per partner in the case of a partnership or LLP) in 2013-14 will be charged at 40%. For a limited company, profits are subject to corporation tax at 20% up to £300,000, while marginal rates apply between £300,001 and £1.5m, and 23% above £1.5m. However, as a director and shareholder, profits can be drawn as a combination of salary and dividends (subject to profitability) or repayment of a director’s loan account, if in credit. The limited company format and the low rate of corporation tax allow entrepreneurs to make profits and to defer taking the rewards out of the company. One distinct advantage for small companies is that corporation tax is payable nine months after the end of the accounting year whereas sole
traders, partnerships and limited liability partnerships make payments on account during the tax year at the end of January and July. Companies to make a corporation tax return to HM Revenue & Customs (HMRC) every year. Regulation and accounting
Limited company status has some downsides, perhaps the main one being the additional level of regulation and accounting required. Sole traders can choose their name freely but Companies House can prevent a particular name being chosen for a limited company, particularly if the name gives a misleading impression of the nature of the company. Businesses wanting to form a limited company either use the services of a company formation agent or their accountant will make the necessary enquiries and complete the formation process. Companies can be bought ‘off the shelf’ and the particulars changed if a company is required urgently. It is also possible to make the initial enquiries regarding a limited company directly with Companies House through its WebCheck system. An annual return, a snapshot of general information about the company’s directors, secretary, registered address, shareholders and share capital, must be made to Companies House every year, along with the annual financial statements, and also be sent to all shareholders. Accounting records must contain entries showing all money received and expended as well as all assets and liabilities of the company. Those with a turnover in excess of £6.5 million, and/or net assets in excess of £3.25 million or more than 50 employees must have accounts audited. Notifying HM Revenue & Customs
Companies House automatically notifies HMRC as soon as the company has been formed but sole traders or partnerships must do it themselves. HMRC uses the information to set up a computer record for the company and allocates it a reference number known as a Unique Taxpayer Reference (UTR). HMRC also tells the directors what they need to do if the company has become ‘active’ and suggests other tax implications the company may need to consider. Apart from the choice of ownership structure for tax purposes, choosing a limited company format is often seen as a statement of intent. Although, initially, finance providers will look behind the corporate person at the individuals supporting the company, once the company has a track record, finance providers will be more likely to treat the company as a credible vehicle for finance. There can be compelling tax advantages to choosing the limited liability format, but it is important not to underestimate the regulatory and legal requirements of choosing particular ownership structures. For more information, visit businessadviceservice.com
26/07/2013 18:08
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26/07/2013 19:07
SALES & MARKETING
Time for a change?
A rebrand may be a proven way to successfully modernise your offering, but catastrophe could ensue if it delivers the wrong message
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here are few things as precious as your brand. It follows, therefore, that rebranding can be a dangerous game. It carries with it the potential to undo the long, hard slog you’ve already been through to build your good name. Indeed, as a small business owner, you probably don’t have hundreds of thousands in the kitty to employ teams of designers and brand specialists. However, that in itself is not necessarily a recipe for success – far from it. Even the big players get it wrong “All brands should from time to time, and there have been many have a DNA and a failed rebrands over the years.
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core personality, just like you have your core personality” Mark Artus, CEO of global
WORDS: ADAM PESCOD
branding agency 1HQ
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Nevertheless, there is much for aspiring entrepreneurs and SMEs to learn from the dramatic U-turns made by established brands following efforts to freshen things up or broaden their appeal. One lesson, it seems, would be to treat your brand as an extension of both yourself and your business. “I have always believed that branding is a Darwinian process,” says Mark Artus, CEO of global branding agency 1HQ. “All brands should have a DNA and a core personality, just like you have your core personality. But the tone of voice with which you express yourself will change whether you are happy or sad, and that is pretty much what a brand is all about.” Essentially then, rebranding is a natural stage in the evolution of any forward-thinking enterprise, with the number of rebrands undertaken generally dependent on the nature of the business.
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SALES & MARKETING
“A lot of people missed the point with eBay. It was subtle, and that is the point” Edward Leake
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“Brands are always being tweaked and you probably don’t even register that they are, but they are being modernised to make them relevant and appealing to consumer,” comments Artus. “I don’t know whether it’s right to say that there are companies that rebrand more often than others. It probably just means that their products are susceptible to changes in the marketplace.” This is by no means to suggest that a rebrand is a decision, and a process, that should be taken lightly. If a rebrand is done for the wrong reasons, it has the potential to backfire spectacularly. “There are instances where companies want to rebrand for absolutely no reason at all and it is mainly because someone on the board is bored of the current logo, which is the completely wrong reason to rebrand,” says Edward Leake, managing director of web and graphic design agency Megamind Media. The old adage ‘if it ain’t broke, don’t fix it’ holds a fair degree of credence here, and Leake identifies the infamously unsuccessful rebrand of Tropicana as a prime example. The fruit juice brand was forced into a U-turn after its attempt at modernisation made it almost invisible to consumers. “Tropicana had a very traditional packaging – it was simple, but it was traditional,” says Leake. “They tried to modernise it, but people couldn’t find the product because it was so different.” More damaging was the fact that people were mistaking it for the so-called ‘own brand’ products that were trying to replicate Tropicana. “It was a complete change, and looked like the supermarket was mimicking Tropicana’s product,” Leake adds. “By trying to modernise their image, they actually devalued their image, and that was expensive for them.” On the other hand, Leake also warns of the dangers of rebranding to turn around one’s fortunes. “If a business has accrued a bad or
unfavourable reputation over a period of time, it often thinks a rebrand is the way out of it,” he explains. “But if they are not changing the business behind the rebrand, it is a pointless pursuit. They need to address the issues, and support it with the rebrand, and show people that they have actually addressed the issues that caused the reputation problems.” Therefore, this would very much be a case of ‘if it is already broke, you can’t fix it with a rebrand’, something that Artus further attests to. “I think there are many brands that are covering the cracks,” comments Artus. “You cannot believe how many times I am asked ‘Can you rebrand a product that is not any good?’, and the answer is always categorically ‘no’.” So, if a rebrand is unlikely to transform the fortunes of an ailing enterprise, can there be such a thing as a ‘successful rebrand’, so to speak? For Leake at least, there is a lot to be said for a rebrand that goes undetected by the everyday consumer, sneaking into their consciousness without the slightest hint of uproar – and all the while modernising and refreshing the brand. eBay falls into this category, as far as Leake is concerned. “A lot of people missed the point with eBay,” he says. “It was subtle, and that is the point. If you look at the old and new logos side by side, there is nothing subtle about it.” Leake admits that the rebrand caused some uproar in the design world, of which he is part, for the fact that eBay’s new logo “looks like something that was done by an intern or apprentice on their lunch break”. However, he lauds the fact that it has managed to simplify the logo to the extent that it did, but without unsettling the consumers who continue to trust eBay as a reputable online marketplace. “I bet a lot of eBay users probably didn’t even give it a second thought, and that is the beauty of it,” Leake adds.
Edward Leake,
managing director of web and graphic design agency Megamind Media
Mark Artus, CEO of global branding agency 1HQ
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And it is arguably here that one can see the risk factor involved in rebranding begin to materialise, especially when comparing the outcomes of the Tropicana and eBay ‘episodes’ put forward by Leake. Whereas Tropicana’s approach could quite easily be regarded as a substantial rebrand – albeit a fruitless one – eBay was more of what Leake would prefer to label a ‘tweak’. And he throws Mastercard into the former category too, citing its attempted 2006 rebrand as “absolutely atrocious” and “going from one extreme to another”. Suffice to say, it never latched on, and exposed the potential perils of totally reinventing the wheel, especially with a logo as iconic as Mastercard’s. Thus, in order to really give one’s brand the best shot at greatness, a considered approach built on gradual and incremental changes may help eliminate the ‘shock factor’ that can come with a total renovation. “You inject risk, if you have an established brand, by straying too far from the trodden path,” continues Leake. “If people recognise your brand and it has a solid reputation, you are taking a great risk by trying to redevelop that brand beyond a simple touch-up, as it were.” That said, Leake admits that a smaller company probably has less to lose when taking the bold option. “Our own rebrand has worked in the sense that people like the brand, but that was the only goal for me – to make the company look more attractive,” he comments. “Hopefully, it will Edward Leake work in our favour, and that is the thing for small businesses: they can get away with that a lot more easily than a large business. There are fewer repercussions when you have got fewer eyes on you.” Regardless of what path is trodden, however, keeping a brand in tune with its target market is nigh on indispensable. “Branding is all about relevancy,” confirms Artus. “You have got to understand what your brand stands for, who it is you are targeting, and why you are targeting them – that often shifts. You have got to keep your finger on that pulse.”
“You inject risk, if you have an established brand, by straying too far from the trodden path”
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The ecoPayz story For Phil Davies, managing director of global electronic payment solutions provider ecoPayz, the recent rebrand of the firm was almost a no-brainer, given the range of services it now provides. Davies explains that the previous ecoCard branding had outgrown itself – although it still remains a core brand within the wider ecoPayz offering. “The main reason behind the rebrand is to dispel any confusion in the market because we had observed that people wondered why ecoCard wasn’t actually a card, given what we now do,” he says. “Through a period of evolution, we have expanded the ecoCard – which is effectively a wallet product – into many other things.” However, seeking out a brand which accurately conveyed the ethos of the business proved a test for Davies, particularly when a number of potential names had already been snapped up. “The main challenge was to get a brand that was consistent with the message we wanted to put out, consistent with the type of industry we operated in, and to find something that somebody else hadn’t used already, to be perfectly honest.” Ultimately, though, the rebrand is a reflection of ecoPayz’s lofty ambitions. “One of the things people immediately think of is that if somebody rebrands, there is something to hide – they are going through some sort of crisis,” says Davies. “That is not the case with us and we are very keen to try and get the message out because we have grown, because we have expanded and we are continuing to expand, not just in terms of product but in terms of our global coverage and target markets.” Needless to say, Davies firmly believes that the ecoPayz brand will now be recognised by clients in each and every continent.
“The main reason behind the rebrand is to dispel any confusion in the market”
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SALES & MARKETING
Act local A
Plenty of growing enterprises might have the world in their sights, but reaching out to the customers on your doorstep should be a first port of call
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few short decades ago, global brands look set to rule the roost. With our high streets becoming increasingly homogenised and commerce the world over led by high-profile, international retailers, local communities’ relevance seemed to wane. And then as the internet bedded in to consumers’ habits, the shift seemed complete. But, conspicuously, the tides that once seemed to be threatening the concept of local community trade have begun to recede. While social networks have connected people across the globe, they have also simultaneously sparked new conversations about the places in which we live. Geotagging has got us once again championing the wonderful eateries and exhibitions around us; near-field communications are stepping in to give us new ways of interacting with our immediate environment. Pop-up shops are getting us excited anew about the hidden gems on our high street. While we’re thinking global, as
WORDS: JOSH RUSSELL
“Whether you’re a small business or even a big chain, it’s inevitable that a large proportion of your customers come from your local area”
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consumers and companies we’re acting local. In part, the increasing focus within businesses on a local approach comes from the understanding that an outlet will often be dependent on a community. “Whether you’re a small business or even a big chain, it’s probably inevitable that a large proportion of your customers come from your local area,” says Jim Eastwood, regional director of the UK and Ireland at group discounting site Groupon. Indeed, research conducted by Groupon in April of this year revealed that increasing direct customer engagement was a priority for 67% of enterprises over the coming year. “The will and the desire is there among merchants because they realise that they have to evolve their marketing mix to suit the world that we’re living in.”
26/07/2013 17:47
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QUOTE ELITEBIZ01
26/07/2013 19:19
SALES & MARKETING
The local picture Eastwood feels that the shift toward digital marketing has been absolutely vital to respond to the changing habits of consumers. “That said though, it’s important businesses don’t neglect their face-to-face interactions,” he comments. “I think that’s extremely powerful and very necessary in order for SMEs to survive these days.” Something he stresses is that attracting new customers is invariably more expensive than forming and maintaining close relationships with the ones an enterprise already has. “We have to have a positive face-to-face interaction and if we don’t have that we feel duped or neglected.” But sometimes establishing a connection in the local area isn’t necessarily that straightforward. Groupon generally advises the best thing enterprises can do is find ways to make contact with the people in their area. “So many things happen online and, even though they’re happening online, what actually increases that touch point and makes it more personal?” asks Eastwood. “We
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“We have to have a positive face-to-face interaction and if we don’t have that we feel duped or neglected” Jim Eastwood
encourage partners to do seminars, demos, taster sessions, attend local events, do networking, attend local fairs or markets or shopping centres to promote their wares, host or sponsor an event or volunteer.” As with most elements of marketing, however, the important thing is not so much how you employ individual elements but the ways in which they work together. “Applying a clear and consistent image and message across all of your communication channels for any business these days is vitally important,” explains Eastwood. And, actually, far from being the preserve of huge corporations, a consistent marketing message is actually something that can be easily achieved by SMEs. “Primarily, there’s one decision maker, one person who will oversee their marketing activities,” he continues. “They can have their signage, frontage, letterheads, business cards, decor, website, Groupon offering, Facebook page and Twitter profile consistent, professional, clear and inviting.” While it’s tempting to forgo what is happening on your street in favour of the vast world of the web, our local communities still play a huge part in our daily lives. And making the most of this – without forgetting the benefits digital can bring – is the best way to ensure a long-lasting relationship with your consumer base.
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For gallery and photography school Manchester Photographic, engaging with the denizens of the city in which it’s based has been vital to its success. “Manchester is a very proud city and obviously excels at a lot of things,” explains Andrew Hill, the enterprise’s founder. From its well-established business community, the world-renowned football stadium at Old Trafford and its vibrant music history, Manchester has plenty to work with. Manchester Photographic runs courses teaching individuals and organisations everything they need to know about photography, both at their own premises and in schools, corporations and local authorities. Their client roster has included homeless people, schoolchildren, academics, celebs, a Virgin exec and even a national newspaper editor. And the face-to-face time they spend with their clients ensures that there are always plenty more queueing up at the door. “I don’t have to do the marketing; they do it for me,” explains Hill. “They say, ‘Why don’t we have these guys? I’ve just been on a course down there and it really works.’” The photography school is well respected not only for its training. It features plenty of exhibits, trading on the city’s reputation of being the birthplace of some of the UK’s greatest bands, from Joy Division and New Order to The Stone Roses and Happy Mondays. “We have fans from all over the world visiting the exhibits, plus all the locals who obviously love to see and reminisce over the pictures of old,” says Hill. “That’s a nice way of engaging the community.” More importantly, it acts as another excellent way of getting the brand out into the public eye. “It’s a little bit viral; people get involved and get to know it,” he explains. This is the sort of “They know word of mouth that some that we’re looking brands pay hundreds of thousands of pounds for and after their interests yet Manchester Photographic locally; we’re local attracts it organically. “We did a Smiths exhibit earlier on this people, we live year and we had two pages in locally” the Independent one weekend, and a page in the Telegraph.” Andrew Hill, founder of And the effort they put in Manchester Photographic pays dividends with their customers. “They know that we’re looking after their interests locally; we’re local people, we live locally,” Hill says. Rather than being seen as something corporate and impersonal, their customers relate to Manchester Photographic on an immediate, emotional level. “Once somebody’s been on a course, when they book on another one they go, ‘Who’s doing it? Is it John or is it Dave? I had a great time with them.’ And that’s the sort of relationship we try and build with them.”
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SALES & MARKETING
Tarred with the same brush 54
In the mind of the consumer, brands will often be associated with the content alongside which they advertise. But when that content is offensive or inflammatory, the advertiser is normally the one to bear the cost
WORDS: JOSH RUSSELL
S
ocial networking has had a profound impact on the way we communicate. By effectively removing a lot of the borders between us, it has greatly aided the passage of free speech, a contribution that can’t be underestimated. Unfortunately, there is also a negative side to free expression: not all of the views you encounter will necessarily be palatable. Social media platforms such as Facebook and Twitter often attract the ire of pundits for how they also facilitate the spread of harmful or abusive content. In May 2013, gender equality activists took Facebook to task for the proliferation of pages and groups that condoned or promoted misogyny or sexual violence, demanding that the corporation take a more direct stance against this sort of offensive content. One of the most remarkable things about the campaign was the recognition of the power held by advertisers over a network that has spent years trying to define itself as a vanguard of a new type of targeted, datadriven advertising. Activists sent thousands of emails direct to brands advertising on Facebook, inspiring Nissan and other advertisers to temporarily suspend their investment until they could be assured that no controversial content was being associated with their brand – an understandable
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reaction, given just how much companies have invested in creating that brand. “I think it’s actually quite interesting because this isn’t the first time something like this has happened,” says Rebecca Mahony, vice president of global marketing at international video advertising service Ebuzzing. She refers to an incident that occurred around the time of Facebook’s initial public offering (IPO). General Motors was spending approximately £10m on advertising with the network and abruptly ceased, without much reason given publicly for the decision. Despite this, rumours abounded. “Allegedly General Motors was saying it didn’t want to be displayed on its competitors pages and Facebook said no,” she explains. “So General Motors decided it was time to stop investment.” Perhaps it isn’t surprising advertisers are so cautious about the content with which their brand is associated. “Marketers are mindful stewards of their brands, often representing years of built-up loyalty and affinity,” comments Nick Reid, MD of online video advertising company TubeMogul UK. “Given this, they rightly expect total control over where an ad is seen and, increasingly, who sees it.” Generally, this is the lure of the offering an outlet such as Facebook has; the granularity of its data means that brands
26/07/2013 17:51
SALES & MARKETING
can rely on the fact that their content should be shown in the right context and be seen by the right eyes. “Despite missteps at times, digital media is uniquely positioned to deliver on this,” Reid continues. Mahony adds: “Facebook is lucky because it has so much information – it’s in a very specialised place and the targeting could be second to none.” This has helped entice marketers to the platform in droves. Unfortunately, however, an environment that is as consumer-driven as Facebook isn’t self-contained or easily controlled. “It will struggle with that because it is a social platform; people are interacting, people are conversing and sometimes conversations and content that people view can be controversial.” And all too quickly a particularly toxic piece of content can tarnish the reputation of a brand that’s associated with it, even if that association is largely incidental. “We know this; fail consistently here and consumers will vote with their feet,” comments Ian Woolley, chief commercial officer of audience insights company Visual DNA. This means that some extra work is required to cushion brands and publishers from the negative “It is a social platform; impact of undesirable people are interacting, people content. “We’re all are conversing and sometimes incentivised to make conversations and content that advertising better; I think that as an industry we’ll get people view can be there,” he adds. controversial” Mahony does not Claire McCartney, vice president of believe that the failings Ebuzzing exhibited in this recent controversy are endemic. Instead, it’s an inevitable part of a medium still undergoing constant development. “Facebook is growing so quickly and it is changing things all the time,” she says. “I know on a weekly basis it is changing its products and its targeting – so I think it’s almost natural growing pains.” “The need for more control is a major reason that automated buying and delivery of ads took off,” comments Reid. And there is plenty of precedent that suggests this level of control is achievable even with the kind of intensely granulated data that Facebook deals with. “The technology is certainly there,” he continues. “We are doing a great deal of work in this area to bring in viewability standards in all areas of video advertising, to make sure brands are not being associated with racy or undesirable content.” While Facebook’s analytics and demographic information is practically second-to-none, mediums that have been on the market longer have had more time to employ techniques designed to protect advertisers and their brands. “There will be technology, which there is in online advertising and video advertising, where you’ll have negative keywords or contextual targeting coming into play,” says Mahony. “I think Facebook still has some catching up to do in that respect. But I absolutely think that it will.” Facebook responded promptly to advertisers’ concerns over their placements on pages featuring controversial content, issuing a statement on the site on June 28 that advertising would be stripped from pages that were identified as being offensive. While this doesn’t address the wider concerns of activists, it does at least show the network is committed to protecting advertisers from incidental content that may harm their brand images. And it seems an inevitable step along the road of the maturation of a powerful advertising medium.
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PEOPLE
The great escape If done well, a company away day can be the perfect way to reward or reinvigorate your team
WORDS: ADAM PESCOD
A
certain episode from the most recent series of The Apprentice served as a useful lesson in ‘how not to do company away days’. Indeed, one would hope that Lord Sugar’s candidates weren’t drawing on past experiences when formulating the activities for their unwitting subjects. Suffice to say, it didn’t do much to alter the mindsets of employers who are traditionally sceptical about away days. Firstly, there are tax implications for companies when an away day is deemed by HMRC not to have been held for ‘business purposes’. However, this is generally a minor consideration. The ultimate concern is to ensure that an away day fulfils the objectives for which it was held, thus justifying the time spent out of the office. These objectives will vary from company to company, but clearly defining them is essential if the away day is to have the desired effect. “Whenever I speak to a client, the most important question for me is ‘what do you want to achieve?’” comments Nikki Hunt, client services manager for team building and away-day specialists Sandstone. “I can then make a recommendation and explain how the activity I am recommending meets those requirements.” Hunt suggests that the business issue in need of resolution could be the lack of a clear ‘team’ ethos among employees. “It is not the case that
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every team needs to learn to communicate better or every team needs to learn to collaborate,” she says. “We sometimes get clients who are looking for an away day because they maybe need to basically rebuild the team from the bottom up. They have got a group of individuals who are good at their jobs but they don’t know how to be a team.” An away day can also provide an opportunity for a much welcome ‘meet and greet’ with new recruits and, more pertinently, people from elsewhere in a company. “Often, what people find is that they know those who they work with immediately quite well, but beyond that it might just be a wave across the office or a nod in the corridor,” Hunt explains. “So employers will often want their staff to be able to spend time outside of work getting to know one another.” What could initially have been penned as a general ‘getting to know you’ session may end up as a valuable meeting of minds where teams can “share information and reduce their overall workloads”, adds Hunt. Often though, taking a fairly carefree approach to an away day can pay off, suggests Ian Rummels, managing director of HR and employee benefits consultancy PES. “I have fairly low expectations of what we get out of these away days when we do them with our team,” he admits.
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“You want people to look forward to it, as opposed to dread it and not participate on the day” Ian Rummels
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Away-day inspiration Siobhan Dillon, co-founder and managing director of charity events organiser Skyline, certainly knows how to keep her staff happy: “We take people away for the first weekend of January. We give three people the responsibility of actually coordinating it and their identity is kept secret. The staff will talk about it for six weeks beforehand guessing where we are going, and who is organising it, right through to a couple of months afterwards. It is all expenses paid – they are given a budget – and we just rock up to the airport not knowing where we’re going. While there may be other elements contributing to why people stay with the company, we do have an extremely good loyalty factor, and they absolutely love it. It would be pretty strange for us not to do it because that is precisely what we do for other companies anyway.”
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Nikki Hunt, client services manager for team building and away-day specialists Sandstone
“The fact that we are out of the office doing something different, recharging, spending some quality time together, I see as a benefit. So long as we have achieved that, everything else is a bonus.” Finally, far from addressing an internal issue or preparing for a forthcoming challenge, an away day is frequently utilised as a form of reward for employees’ hard graft and fulfilment of certain goals. Either way, the specifics of any away day should be granted plentiful thought by the management team beforehand, so that the needs of all employers are Ian Rummels, sufficiently met. “It is important to remember that your managing director of HR team are not clones of one another,” says Hunt. “If they and employee benefits were, it would make it so much easier to decide what consultancy PES type of away day you want to go for. But the truth is everybody doesn’t enjoy the same thing.” Rummells adds: “You want people to look forward to it, as opposed to dread it and not participate on the day. So I think you just have to think about who is going, what they are likely to enjoy, what they are likely to be able to do, and try and pitch it just right.” As much as the period immediately preceding an away day can be crucial, the days, weeks and months in its wake are arguably the making of its success. Particularly if the activity or activities were geared towards a specific goal, the need for a comparative assessment of staff performance and morale is pretty indispensable. And this is a process that a company such as Sandstone can assist with, according to Hunt. “We offer the option for a debrief with every single activity that we do,” she says, before adding that this extends far beyond a mere assessment of the day itself. “Debriefs that say ‘what did you do well?’ and ‘what could you do better next time?’ aren’t very effective for us because at the end of the day they are not coming back to your activity tomorrow or next week. So what we do is ask them a question that gets them thinking about the activity in relation to work.” Of course, having an ‘away day culture’ engrained into one’s business model can go a long way to building employee loyalty, with regular time away from the office only serving to bolster employees’ appetites for participation. “If you just hold one away day annually, and it tends to be in the summer, there might be someone who always takes an annual summer holiday who can never take part,” says Siobhan Dillon, co-founder and managing director of charity events organiser Skyline Events. “Having it regularly throughout the year definitely helps and keeps the morale going, because I think that is the most important thing.” The charity aspect can also work wonders, suggests Dillon. “It takes away a lot of the cynicism to a large extent because people are doing something that is very positive and motivational. It can definitely help if you are assisting a children’s charity or local hospice.”
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My Business Advice FP August.indd 1
26/07/2013 19:23
PEOPLE
In whose interest? Conflicts of interest are one of those things in life that crop up from time to time. Making sure your staff know how to deal with this ahead of time can help avoid too many split loyalties
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WORDS: JOSH RUSSELL
U
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nsurprisingly, recruitment decisions come under plenty of scrutiny and cause considerable damage if they are seen to be influenced by outside factors. One can assume it caused no small amount of humiliation for both James Caan and the coalition when it was revealed in June 2013 that Hannah Caan, the new social mobility tsar’s daughter, had landed three jobs at his companies – especially embarrassing as it followed hot on the heels of a statement from Caan that parents shouldn’t help their children secure work. While the former Dragon staunchly denied that his daughter secured positions on anything but merit, the episode does underline exactly what it is that makes these conflicts of interest so incendiary. Obviously, a conflict of interest casts a much broader shadow than is covered by just nepotism. Any personal factor that could compromise or influence a recruiter’s decision represents a potential conflict.
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PEOPLE
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Beyond any form of friendship, familial connection or relationship between the applicant and recruiter, there are other cases that could unfairly sway a hiring decision. “One thing would be if they had any kind of financial interest in the outcome of the hiring process or they had a financial relationship with the applicant,” comments Claire McCartney, adviser at the Chartered Institute of Personnel and Development (CIPD). But it isn’t just positive recruitment decisions that might be influenced: there’s also a risk that passing over an applicant could be based on other individual biases. McCartney continues: “Another factor would be if they had a difficult or an acrimonious relationship with any of the applicants.” In Caan’s case, the issue seems to have been little more than a source of embarrassment, but that doesn’t mean there can’t be real damage in proven cases where a conflict of interest has influenced a decision. Aside from presenting all manner of legal risks, it can also have a strong impact on an enterprise’s reputation. Unsurprisingly, public perception of these sorts of conflicts of interest are very unforgiving, particularly with regard to high-profile roles, and if a poorly made decision comes under public scrutiny it can have huge ramifications for the brand. “It would obviously impact upon whether they’re seen as a good employer of choice; whether they’re seen to be fair, open and transparent in their recruitment process,” says McCartney. But this knock to confidence in the company doesn’t only affect people on the outside. “You’ve got the damage internally, in terms of other team members, who perhaps know that things have been negatively influenced by some sort of relationship,” explains McCartney. “And that can run quite deep.” When staff begin to question the even-handedness of an influential figure’s approach, it can have a huge impact. “If people feel there are things that aren’t fair or there are procedural injustices, then it can affect people’s outlook and productivity.” Of course, being aware of the potential risks involved doesn’t mean a founder or exec-suite manager will be able to personally keep a watchful eye over every recruitment decision. As with any element of the business, mitigating against the risks posed by conflicts of interest is a case of educating staff and making sure you have the right procedures in place to allow staff to act autonomously. “The best way organisations can approach it is to have clear policies around what potential conflicts of interest might look like and how staff can avoid them,” McCartney says. However, we all experience conflicts of interest at points in our lives and learn the hard way that it’s not always something that can easily be glossed over or ignored. “If they’re not able to avoid it, the right guidelines need to be in place to support staff, so they can disclose that conflict of interest and take themselves out of the process.” As with other policy areas within a business, while you need to ensure
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“One thing would be if they had any kind of financial interest in the outcome of the hiring process or they had a financial relationship with the applicant” Claire McCartney,
adviser at the Chartered Institute of Personnel and Development (CIPD)
you do everything you can to ensure you’re protected, clarity and simplicity are key if it’s going to make it easier for staff to avoid potential conflict situations. “It’s about having clear policies and codes of conduct but not making that too complicated or people won’t use them,” comments McCartney. “You need something quite robust so it’s almost like a checklist that people could potentially use.” Inevitably, there also needs to be recourse to a more formal structure in the rare cases a conflict of interest may slip through the net. If you have firm procedures and policies in place, it should be categorically clear what an enterprise’s stance is on taking advantage of a recruitment position for personal interest, and then the familiar ground of the established disciplinary procedures should offer a clear path forward. Feeling confident in these policies will also allow other employees to feel more comfortable raising potential conflict cases, as they’re aware there is a reliable framework in place. Given that, upon occasion, experiencing divided loyalties is an inevitable part of life, finding oneself encountering some degree of conflicting interests is inescapable. As evidenced by Caan’s case, the majority of these situations are likely to be relatively innocent and more discomfiting than something actively damaging. However, this doesn’t mean that it’s worth ignoring potential conflicts of interests entirely, as, often, they can be the thin end of the wedge and only lead to further trouble down the line. Therefore, a little training and prep work can ensure that the best interests of the business are what’s guiding everything forward.
26/07/2013 17:57
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HP Ad Place RHP.indd 1
26/07/2013 19:25
PEOPLE
TEAM TRANSFORMER
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Martin Reed Reed has been at the helm of psychometric testing company Thomas International since 2007, having been appointed chairman two years earlier. As well as penning this regular column for Elite Business, he is also a founding member of Buckingham Business First and a fellow of the Institute of Directors.
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Driving Finding out what motivates your workforce is crucial in times of economic austerity, suggests Martin Reed
A
recent report from the Institute of Fiscal Studies (IFS) found that as a result of the current economic downturn, wages have fallen more in real terms than ever before. The IFS discovered that despite the rising cost of living, a third of workers who stayed in the same job saw a wage cut or freeze between 2010 and 2011, and many UK companies, particularly smaller businesses, have cut wages rather than make staff redundant. Without a steady increase in salary, it is essential that managers find alternative ways to motivate their staff to ensure employee retention and, ultimately, the success of their business. Pay freezes will have an impact on employee job satisfaction and motivation, and as a result, may lead many companies to lose members of staff. Replacing an employee can have long lasting effects on your business’s profitabilty and productivity, and recruiting their replacement can be a costly and time consuming procedure. How a pay freeze affects your employees will vary depending on the outlook and priorities of the individual. Each employee is motivated by different things; some are goal-orientated, some need a stable working environment which enables them to maintain the status
quo, while others thrive on social interaction and engagement. Pay freezes and pay cuts will affect some members of staff more than others, and it is your responsibility as a manager to identify how you can continue to motivate different members of staff despite the financial limitations. For example, you may find that members of your sales team are driven by monetary incentives and a steady increase in salary, in which case a pay freeze will have a fairly significant impact on their job satisfaction and drive in the workplace. On the other hand, there may be members of your team who consider job security to be their main priority, and will therefore prefer the security of their role to be assured, rather than be in a more unstable position, but with a potential pay rise in the future.
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PEOPLE
forces Psychometric assessment is one way to get a valuable insight into each employee’s motivational make-up. By implementing a behavioural assessment such as the Thomas PPA during the recruitment process and lifespan of an employee, employers can generate a profile for each of their employees, which can help them to understand the motivations and drivers of their individual staff members and therefore learn how to manage them more effectively. Once you have determined what motivates an individual, you will need to be creative in developing ways to inspire and motivate them that play to their preferred working style. Some American companies recommend low-cost techniques to motivate employees such as leaving post-it notes with praise on an employee’s desk or acknowledging a hardworking employee with a standing ovation. We may be slightly more reserved over on this side of the pond, but there are alternative ways to incentivise your staff with minimal cost to your business but maximum impact on their job satisfaction. Offering flexitime or an additional day of annual leave can reduce absenteeism and boost your employee’s drive. Some companies have counteracted the impact of a pay freeze with something as simple as an extra day of leave for an employee’s birthday or taking the team out for lunch. Of course, some incentives will suit certain employees more than others.
Once you have determined what motivates an individual, you will need to be creative in developing ways to inspire and motivate them”
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For those members of your team motivated by power and a need to achieve goals, you could challenge them by organising a competition with a small prize for the winner. For individuals who best respond to social interaction, factoring opportunities for positive feedback and verbal praise will keep them engaged and fulfil their need for positive reinforcement. In other cases, employees will rely on job stability to be motivated, so showing strong leadership and reassuring them during times of change will help keep them motivated and happy. It’s also worth keeping in mind that it’s not only your team members who can benefit from psychometric assessments – they can also help managers develop an awareness of how their own behaviour can be interpreted by their team. Psychometric tools are a great way to facilitate two-way communication between employer and employee, and help SMEs cement better working environments and, ultimately, a more successful business. Every business understands the importance of staff satisfaction, efficient teams and low staff turnover in these challenging times. It is therefore imperative that you understand how certain economic, social and circumstantial changes can affect each of your employees in different ways. By understanding their individual motivations, strengths and limitations you can implement the best approach to keep your team happy and motivated.
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26/07/2013 18:56
TECHNOLOGY
Another year, another major change on Facebook. While one can hardly claim that we haven’t had long enough to prepare for the social network’s new Graph Search feature, you can bet that there is going to be a fair amount of griping about service disruptions and security issues. Fortunately, some things don’t change and we have another selection of top tech to take your mind off things 67
Nokia Lumia 925 Nokia has taken a bit of a bashing in recent years and it’s easy to underestimate the company in light of this. However, it has been pitching some pretty serious kit of late and the Lumia 925 is the sort of tech around which Nokia’s fortunes might change. A premium Windows phone with a great screen, excellent camera and a whole suite of additional Nokia freebies make this an excellent challenger to some of the big boys.
WORDS: JOSH RUSSELL
Elevatr
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We rate business plans pretty highly here at Elite Business, which is why the lack of tools to help structure them has always frustrated us. You can imagine our delight then that MakinMoves has ably barrelled into the breach and brought us Elevatr, a note-taking app specifically designed around hammering out a comprehensive business plan. Graphically speaking, the app is a treat with its minimal, flat and yet colourful design – and it’s also a handy way to plot business ideas on the move.
26/07/2013 18:09
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30/05/2013 18:30
TECHNOLOGY
Decahedron Fire Pit Thanks to the recent warm weather, we are all getting good use out of our gardens again, meaning some new outdoor furniture might not go amiss. The Decahedron Fire Pit from DogBiscuit Designs is crafted out of a naturally finished plate steel that oxidises to a warm rustic russet. Whether chucking a few steaks on its grill or gathering round it with friends for a glass or two of Merlot, the Decahedron Fire Pit provides a gorgeous geometric focal point for your patio.
PocketSpacecraft A gradual realisation that dawns as you get older is that space is probably not something you will ever get to experience – unless you’re rather chummy with old Beardy, of course. However, PocketSpacecraft is here to give you a taste of that freedom, allowing you to send your own pocket spaceship out into the inky black and have unlimited access to the data that comes back. This crowd-managed and crowd-funded moon mission means every one of us can now take that giant leap.
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AvroKO/Bombay Sapphire East Gin Wheel Life is all about beautiful pairings. Some, like this one between international design don AvroKO and household favourite Bombay Sapphire East Gin, just take your breath away. Handcrafted from walnut, this turntable can bring a touch of class to any soiree. Providing concealed alcoves and cutting surfaces, the gin wheel gives you a place to store your peppercorns, citrus fruits and cinnamon sticks, and comes with all the tools needed to make a truly first class G&T.
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26/07/2013 18:21
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www.xltelecom.co.uk info@xltelecom.co.uk 28/03/2013 20:48
TECHNOLOGY
71
WORDS: JOSH RUSSELL
It can hardly have escaped anyone’s attention that an increasingly close relationship has grown up between tech giants and innovative start-ups
One hand washes the other
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L
arge companies within the tech sector haven’t always had the best track record when it comes to innovation. For every Google or Apple that has built a reputation around actively challenging and disrupting the status quo, there is an IBM or Microsoft that has allowed its comfortable market position to stagnate. While small companies are often nimble, huge corporations have acquired the reputation of being cumbersome and lumbering, playing the solidly built dinosaurs to their malleable mammalian cousins. Clearly then, there’s something in the nature of these large organisations preventing them from easily being able to innovate. In the opinion of Peter Bance, entrepreneur-in-residence at investment firm Octopus Investments, their sheer size is one of the things impairing their manoeuvrability in the marketplace. “If you’re in the business unit of a large company, by definition you are busy making and selling today’s product instead of thinking about tomorrow’s,” he comments. “Corporations end up pouring the vast majority of their focus, attention, investment and resources into the business of today.” By way of contrast, micro-enterprises and new businesses constantly have to have an eye on the future and where they’re headed. “In the world of the start-up it’s all about creating the business of tomorrow.”
26/07/2013 18:06
TECHNOLOGY
72
The tech landscape has certainly changed. Even in the public eye, people are much more aware of the concept of small teams delivering powerful innovations, with consumers seeing products such as the Pebble smartwatch firing the starter’s pistol in the race for bigger corporations to develop their own equivalents. Suddenly, innovation has become the domain of the small- and medium-sized enterprise (SME) – and the big players in the industry are certainly sitting up and taking notice. “They realise a lot of the sources of innovation are outside of their businesses – not all of the good ideas are internal,” explains Bance. “Corporates are now firmly aware of that and using all of those resources at their disposal to tap into that talent.” This can take a wide variety of routes. “There is a spectrum of mechanisms that corporates are now realising are useful and either accessing new technologies, new business opportunities or talent,” says Bance. Stretching from traditional internal R&D routes, by accessing new talent, all the way to acquiring businesses lock stock through mergers and acquisitions (M&A), there are plenty of ways large corporations are reaching out to SMEs in the tech space. “In between internal R&D and acquiring businesses, there are other methods that are used, such as inlicensing technologies, joint developments, joint ventures or minority investments through corporate venturing.” Perhaps one of the most high profile examples of corporate firms working with small innovators is happening right on our doorstep. Incubators such as Telefonica’s Wayra and Google’s Campus London provide spaces and resources to assist burgeoning tech enterprises with their new products and innovations. With other methods such as corporate venturing and M&A, this ensures these large multinationals have a connection to important developments as and when they arise. “The large corporates are doing those things as an insurance policy, to make sure no breakthrough new innovation surprises them or potentially disrupts their business model completely,” Bance explains. “Players out there, the more nimble ones, are either going to represent a potentially life-threatening new innovation or something that is the next big growth area. It’s a window into the future.” Thus far, this could all sound rather cynical, as though these corporate enterprises are parasitically subsisting off their smaller brethren. But, in actual fact, nothing could be further from the truth. Instead, the relationship is one of mutual benefit. “There is a real natural marriage between small innovative start-ups and large established corporations,” comments Bance. Having access to operational resources such as huge R&D departments or factories of a million square feet is entirely beyond the reach of most start-ups, but, by forming close partnerships with large corporations, they can access resources usually only available at a much larger scale. “You couldn’t dream of having those resources yourself or building them organically, whereas by tying up with a large corporation you can get the operational firepower that the large corporation has already invested billions developing.”
“There is a real natural marriage between small innovative startups and large established corporations”
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And there’s another obvious factor. The funding gap, in which it’s often hard for an SME to secure capital between seed funding and acquisition or debt finance, can cause many a great idea to stall, and the tech space is particularly prone to enterprises slipping between the cracks. Bance explains: “Quite often there’s not enough risk appetite in the investment community, whether that’s equity or debt providers that are willing to bridge that chasm for a start-up to go from a proven idea to a profitable business.” This is another huge bonus for enterprises in the tech space being courted by the multinationals. “Corporates have the depth and patience of capital to bridge that chasm,” says Bance. “There’s a financial synergy to plug what is a structural gap in the capital market between angel funding and debt finance.” But one mistake smaller enterprises often make is assuming that, because a corporation is making a financial investment, they’ll be on hand every step of the way. “Ironically, it’s easier, quite often, for corporates to write a big cheque than to be operationally helpful,” laughs Bance. Which, in some cases, is to be preferred, as often too much involvement from a corporate partner can end up destroying the very independence and culture that enabled the smaller enterprise to be disruptive and unique in the first place. “Performing that dance correctly is one of the trickiest things in the marriage between giant and minnow,” explains Bance. “If you get the corporate’s money, you might also accidentally get the crushing force of a corporate culture that is anti-innovative and ends up killing the goose they hope will lay the golden eggs.” Despite this, close relationships between corporations and start-ups are helping the UK tech scene flourish. And it really can’t be denied that it’s proving to be a beneficial relationship for all involved.
26/07/2013 18:06
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26/07/2013 19:28
TECHNOLOGY
The Techspert
David Hathiramani He may be co-founder of trendy suit retailer A Suit That Fits, but Hathiramani is also something of a closet geek. And the Imperial College computing graduate is here to impart some of his wisdom about setting up an internet business.
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The power of testing I
n 2006, I met up with my old school friend, Warren Bennett. Since we had last seen each other, I had been working in the corporate world, and Warren had studied for an MBA and taken a gap year. Warren loved the idea of having a suit tailored wherever he travelled; in fact, he had suits made in China, Africa, and finally in Nepal where he stayed with a family of tailors. The suit he had made in Nepal was in a very distinctive olive green cloth; he chose to have two pairs of trousers made – one pair were flared and the others were straight-legged. When we met, he was wearing the flares. I loved the look of the suit (even though the flares wouldn’t have been my style of choice) and I asked him where he bought it. When I found out that he’d had it tailored and it looked that good, I wanted one too. We got talking and, immediately, the idea of having a suit tailored at great value really struck a chord for both of us. My background was in IT, so the thought process quickly turned to how we could make this available online – and the idea that soon became A Suit That Fits was born. However, just because Warren and I thought it was a good idea, we couldn’t be certain that anyone else would.
Trying out new ideas to aid your business has been made a lot easier by Google, says David Hathiramani
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26/07/2013 17:52
TECHNOLOGY
Real world testing
One of the first things we did was to create a very basic website, which described our offering as it stood and enabled customers to just about build up a suit from scratch. We knew that there would be no better way to test real people’s opinions on our offering than to go out and see them. We created a very basic stall at Hampstead market, hung Warren’s original suit on a dummy, and started talking to potential customers. We even managed to sell two bespoke suits within the first 20 minutes of being there and gained some really valuable insight from these original prospects. We used the information that we’d collected both from the market and feedback from friends to round our offering. Google AdWords
AB Testing
If you want to tweak and change a page on your website, it is sensible to test if it is working better than the old page. AB testing is essentially testing one version (version A) of a page against another (version B). There is no point putting a new page in unless you are testing it against the old version and you are sure that it performs better. The simple process for AB testing is: 1. Highlight the metric that you are looking to improve (for example, the exit rate) 2. Design a new version of the selected page 3. Serve half of your web traffic to version A, and half the traffic to version B 4. After you have collected the results, assess them 5. If there is an improvement, keep the new page, otherwise try again
Google AdWords is Google’s search advertising platform. You bid for your advert to be displayed on different search terms and, if used well, this can be an incredibly powerful way to test an “Tracking what people do when offering. There are a number of ways you can use Google they get to your website is a Adwords for testing, and I necessity for businesses whose won’t go into the detail of all of online experience is integral to the them, but I’ll give you a simple round-up of the testing we did buying process” when we started our offering. Imagine that we want to display an advert for people who search for “suits” in Google. We could use different tag lines for our business to gauge what people are most interested in. So, if you put three different variations of the advert out, Google Adwords allows you to see the click-through rate (the percentage of people who click on the advert); you can see which one performed best on this metric, and you know what aspect of your offering may be the one to focus your efforts on. The advantage of Google Adwords is that it allows you to get in front of a much larger targeted audience than in the real world.
No matter how old your business is, things are always changing and it is always important to incorporate all of the techniques above (and more) in the refinement of your product, services and website. In fact, sometimes when you are looking for new ideas, there is no better way than testing a broad range of solutions and focusing on the best performers.
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Analytics
Once you have traffic to your website, then testing is really important. Tracking what people do when they get to your website is a necessity for businesses whose online experience is integral to the buying process. Google provides another service called Google Analytics which is free and gives you a view of the interactions on your website. The depth of information can be overwhelming, but a good place to start is to see which pages on your website make the users leave. This is called an exit, and looking at pages with the largest exit rate (or volume of exits) is probably the best place to start. Once you have highlighted the page to work on from Analytics, then you can have fun with testing new designs or tweaks to the page. This is a very simple use of analytics, and the possibilities to work on using the data are almost endless.
(L)Davids column.indd 2
26/07/2013 17:52
Not so much a franchise… …more a way of life
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26/07/2013 19:31
FRANCHISING
Franchise news
WORDS: ADAM PESCOD
Radu Bercan / Shutterstock.com
KFC franchisees A slice of spread their sport for Papa wings John’s
HSBC Commercial Bank has served up some finger lickin’ good news to a franchisee of KFC, the not-so-fledgling fast-food chicken chain. Woking-based Amsric Holdings, has managed to extend its presence in the south west thanks to a seven-figure funding package from the global banking giant. In addition to acquiring three KFC outlets in Exeter, Torquay and Plymouth, Amsric has also converted an existing Pizza Hut in St Austell into a 100-seat restaurant, creating 60 new jobs in the process. It takes the total number of KFC outlets run by Amsric in Cornwall and Devon to seven, marking further success for its founders Ragin Patel and wife Dina. The couple opened their first KFC in Woking in 1993 after moving to the UK from Kenya. They now run outlets in Winchester, Southampton, Portsmouth and London, in addition to the further acquisitions made possible with HSBC’s funding. Amsric has also been approved as a Starbucks franchisee and opened its first 100-seater coffee shop near Newquay last month. “We have been very pleased with the support offered by the HSBC team and its specialist Franchise Unit,” said Patel. “It is clear that they understand franchising and are keen to support growth businesses in this area.” Did somebody say the banks weren’t lending?
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Football fans across the UK can look forward to a pizza the action this season after the Football League signed a deal with Papa John’s, which will see the fast-growing pizza franchise become its official pizza partner. Just to clarify, this does not mean the two parties will be spending Friday nights together watching DVDs over a takeaway pepperoni feast. However, the agreement does mark the first UK sport sponsorship by the world’s third largest pizza chain, which currently boasts more than 200 stores on these shores. It all means that supporters of teams from the Championship, League 1 and League 2 will now have a tasty alternative to the traditional half time pie at every match they attend.
With Papa John’s also currently the official partner of the NFL and half of its 32 teams, it seems the pizza chain is certainly intent on ramping up its presence on both sides of the pond, and delivering a serious message to the competition. “Much like the NFL in the US, the Football League is a premier brand in the UK, and we are delighted to be associated with the league and its passionate fans,” said John Schnatter, Papa John’s founder, chairman and CEO. Indeed, it seems the deal couldn’t have been timelier as the Football League celebrates its 125th birthday this season. What better way to celebrate than with a tasty slice of Papa’s best?
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UK growth on the horizon for IT training giant Global IT training firm New Horizons has announced plans to increase the brand’s presence in the UK following the success of its flagship London franchise. Founded in 1982, New Horizons lays claim to being the world’s largest independent IT training company, boasting over 300 training centres in 60 countries. It is now offering up the opportunity to own exclusive franchises in major cities across Britain where the training market is currently worth in excess of £19bn, apparently. Your everyday New Horizons franchisee operates as a general manager in his or her own dedicated training centre, which will ideally become the single source of IT training for companies of all shapes and sizes, as well as individuals looking to boost their careers. “There’s little doubt that the UK market has huge potential for new franchisees,” said Scott McDaniel, international development director for New Horizons. “We’re looking to partner with like-minded companies and professionals who are passionate about growing their business and achieving financial freedom, while at the same time helping others to succeed.” You certainly can’t argue with that.
26/07/2013 17:36
FRANCHISING
Franchise in the spotlight:
A-Star Sports
With British sporting achievements virtually a monthly occurrence, the rapid growth of A-Star Sports couldn’t be timelier
WORDS: ADAM PESCOD
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I
t’s safe to say that things have never looked brighter for British sport. The last year has brought us success on a seemingly unprecedented level, from Bradley Wiggins’ Tour de France triumph – occurring just before the prosperous London Olympics – through to Andy Murray’s historic Wimbledon victory last month. Something to tell the grandchildren about, you might say. More than this though, one would hope that the events of the past 12 months have served to inspire young sports enthusiasts the country over, as well as those for whom sport had previously been a minor interest. Regardless, the existence of A-Star Sports, the fast-growing children’s sports coaching franchise, is as welcome now as it was when launched by three determined couples just over 18 months ago. Indeed, it comes as no surprise to learn that co-founder and MD Gary Bassett grew up with a passion for sport and an eye for business to boot. “As a youngster I was actually quite a shy kid, but I did loads of sport and that is what brought me out of myself,” Bassett fondly recalls. “I was a director in a Lego company by the time I was 26 and I don’t think that would have ever happened without sport.”
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26/07/2013 17:44
17/6/13
16:29
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OF SETTING PEOPLE CH BL E UP IN BUSINESS 20th
CK
Franchising
20 YEARS SUCCESS DU
58685 Dublcheck A4 2pp:Layout 1
1993 ANNIVERSARY 2013
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Franchise F hi owners say: JOANNE Previously Project manager at Bank of Scotland Starting turnover: £50k Current turnover £73k
“We found Dublcheck during our research into the franchise industry and immediately liked its concept of guaranteed turnover*, with Dublcheck finding your clients and guaranteeing the level of turnover you desire.” - Peter
BUILD YOUR BUSINESS THE EASY WAY
Previously Greengrocers Starting turnover: £12k Current turnover £77k
Previously MD of Colouroll Starting turnover: £48k Selling turnover £400k
“Facing redundancy in my 50’s was unsettling. A management franchise was ideal because it enabled me to utilize my previous management experience. I love the fact that the harder my team and I work the higher the rewards.” - Graham
LEN DONNELLY “A big thank you to the Dublcheck team, and o receive an award was brilliant” - Len
Carol Stewart-Gill and the Dublcheck Support Team
“Once I met the Dublcheck team I found the concept of commercial cleaning very appealing” - Joanne
PETER & PRU
GRAHAM
93-2013
Previously Retail Manager Purchased resale Current turnover £300k
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Starting Turnover £62k Current Turnover £250k
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Further Details: 0800 317236 SONAL & MITESH Previously Quantity Surveyor Starting turnover: £14k Current turnover £118k
“Sonal and I can’t belive a year has past since we decided to join this wonderful franchise. We both wish we had done this years ago.” - Mitesh
email: franchise@dublcheck.co.uk web: www.dublcheck.co.uk
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Dublcheck, The 20th Fastest Growing Company in the UK - Official Source, Sunday Times 28/06/2013 09:29
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27/06/2013 19:14
FRANCHISING
He adds that the time he spent working with Lego helped inform the A-Star Sports approach, and opened his eyes to the frustrations evident among the UK’s sport-hungry youth. “Lego is about learning through play and making learning fun, and a lot of those same principles underpin where we are coming from,” he explains. “While I was doing the career thing, it was actually difficult to try and find the right opportunities to volunteer, get involved and make sport happen. I could also see that a lot kids were getting put off, not getting the opportunity to try loads of different sports, or they were doing one sport and it was just getting too serious.” For Bassett, A-Star Spots is “about looking for ways to give kids that same view on sport and opportunity that I had as a youngster”. And it is certainly doing a pretty decent job of it so far, with three more franchises set to open in September, taking the total number to 15, a mere year and half after launch. Bassett explains that the growth rate is largely down to the relatively low start-up costs and the equally efficient franchising route through which he opted to grow the business. He says, “Franchising is an easier way to grow quickly, particularly in our type of industry, because you can get people on board who actually want to be a master of their own destiny, but who are also passionate about what we are trying to achieve.” Bassett also cites the logistical benefits of franchising, especially when taking the nature of the A-Star Sports offering into account. “I think it would be difficult to reach out across the country, doing it from one head office structure, and managing all the coaches and things like that,” he explains. “I think there are plenty of examples of schemes that have tried to launch nationally, being run centrally, that have not necessarily done what they would have hoped from a sport perspective.”
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Purely on a strategic level, it is quite telling that the company’s three cofounding couples – Bassett’s wife Sharon is a fellow director – hail from north Wales, Glasgow and Edinburgh. This has allowed Gary Bassett, co-founder and MD, A-Star A-Star Sports to get things Sports well and truly off the ground, especially in the more northern reaches of the UK. However, it is very much a national project and Bassett has identified the precise number of franchise regions he hopes to incorporate in order for his dream to become a reality. “Everything we have built and structured was based on the fact that we know ultimately there are 240 territories, so we have tried to systemise everything and process everything so that we know it is scalable,” he says. And these 240 territories were devised in conjunction with a mapping company, which Bassett explains helped him pinpoint those areas with a high density of 0-11-year-olds, and sufficient levels of disposable income. Pre-school and school age children are very much the target market for A-Star Sports then, but Bassett is quick to distance his venture from being one that is targeted at schools, per se. Indeed, it is this very distinction that he believes gives A-Star Sports the competitive advantage when it comes to the children’s sport coaching arena. “Most of the similar-type competition – those that work across a number of sports – all tend to try and sell to schools,” he explains.
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“Franchising is an easier way to grow quickly, particularly in our type of industry”
26/07/2013 17:44
FRANCHISING
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“So that is very much our point of difference: we focus on long-term relationships direct with the families. It is nothing to do with the schools, or selling to schools, or any funding that schools have got, and we can be far more a part of the community as well.” The A-Star Sports ‘office’, therefore, changes on a daily basis from a local village hall to a leisure centre – venues which Bassett says are inexpensive to hire, meaning franchisees can set the prices for sports classes and training courses at a fairly accessible level for parents. Moreover, the transparency and openness of the A-Star Sports offer is a further game-changer for its target demographic. “Whereas if you were going into schools, it would be a bit more removed and you are following the school curriculum; we can work far more closely with governing bodies and other parties to help develop our programme,” comments Bassett. “We will have the parents sit and watch so they can actually see what we do. While it puts pressure on our coaches, it is actually the best marketing for us, and also probably helps parents play with their kids more.” Naturally, it takes a certain type of person to teach sport to children on a daily basis, and Bassett admits that the process that prospective franchisees go through before becoming an accepted A-Star Sports coach can often be quite gruelling. At the end of the day though, it is essential that each person is built in the same mould, and shares the same vision as the company’s founders. “It is important that our customers, the
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“It doesn’t matter if they are the best sports coach in the world – if they can’t captivate the kids, it won’t work” Gary Bassett, co-founder and MD, A-Star Sports
children, like them, and it is pretty brutal,” says Bassett. “It doesn’t matter if they are the best sports coach in the world – if they can’t captivate the kids, it won’t work.” One can’t help but admire the lofty aims of A-Star Sports – aims that are only matched by the hunger and passion with which its founders conduct the operation. Suffice to say, the success that the Bassetts have achieved thus far has been recognised by the powers that be in both the worlds of sport and small business, as well as the parenting community. As reported last month, A-Star Sports has struck up a partnership with Support Through Sport UK, a charity geared towards promoting positive sporting experiences and making sport accessible to lower participation groups. This is in addition to being named a founding member of Accelerate 250, the new business community backed by Lord Young and Sir Terry Leahy, and made up of the country’s fastest-growing firms – the so-called ‘vital 6%’ of companies currently responsible for creating half of the UK’s jobs. There are accolades to go with the achievements then, and Bassett identifies this credibility as the key to a successful franchise. “I would say for anyone considering franchising, it is about how to make sure you will be seen as a credible, ethical and correct franchisor so you don’t get dragged down with the one or two out there that aren’t,” Bennett says. “But having said that, it is not a negative story – all the statistics show that there is more chance of success in setting up a franchise business, or less chance of failure, than setting up on your own.” The A-Star Sports story thus far is certainly testament to that.
Sporting chance: A-Star Sports co-founders Gary (left) and Sharon Bassett (right) with ambassador and Team GB hockey player Helen Richardson
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Gti Consultancy are franchise specialists offering a variety of solutions, tailored to meet the needs of your business, and help you create and sustain exciting sales growth. We understand that every company is unique. For a potential franchisor to convert their business into a franchisable model their belief in themselves and their product is paramount. Every business has strengths and weaknesses. Recognising these will enable you to grow and expand your business, producing a robust business opportunity for franchisees to invest in. With over 15 years’ experience in the franchising sector we have used our expertise working with franchisors in a wide range of sectors to create and produce a plan that enabled them to grow and develop. Take your time to explore our site then, contact us for a free consultation and find out how we can work with you and your team to drive your business forward.
Call us on: 01522 246812 email: info@gti-consultancy.co.uk www.gti-consultancy.co.uk
FRANCHISE OPPORTUNITIES WITH CENTURY 21 UK
THE WORLD’S LARGEST ESTATE AND LETTING AGENCY NETWORK Century 21 is the world’s largest estate and letting agency network, comprising of over 7,100 broker offices and approximately 100,000 agents in 74 countries worldwide.
For more information, speak to our Franchise Sales Directors today. opportunities@century21uk.com
We are looking for new offices to join the Century 21 family, and help us to bring this truly international and exceptional brand to new locations across the UK.
0870 21 11 399 century21uk.com/franchise
Visit our website to read about the fantastic support we offer our franchise network.
Century 21 UK Franchise Opportunities
HP Ad Place LHP.indd 1
Each office is independently owned and operated.
@BecomeCentury21
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ADVERTISING FEATURE
challenging, but also the most rewarding aspect of running his own business. He has also learned that good customer relations is one of the most important aspects of his industry as it is service based, and word of mouth and recommendation is one of the best ways of acquiring new customers. Matthew has great plans for the future of his lawnscience business, he says: “I have already expanded my franchise into a multi-van business and I aim to be the market leader in the lawn care industry, with a reputation on high quality, service and value for money.” So what would Matthew say to anyone thinking of buying a franchise? “Make sure you do your research thoroughly, it is a long-term commitment and in this business
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Green room Previously employed in television, Matthew Allcott decided he wanted to be his own boss and explored franchising. He now enjoys working on his Lawnscience business Investment level: £18,995
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hen Matthew Allcott made the leap from employment to selfemployment he immediately saw that franchising was a far less risky way of getting into his own business than actually going it alone. Matthew says: “You always receive back up and help from the franchisor, and you are able to draw upon their experiences and expertise in the field which should help your business become more successful and unlikely to fail.” Raising the money to buy a franchise can be a problem, however Matthew was lucky in that most of his finance came from savings and he managed to secure a loan from a high street bank once he had produced a business plan,
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which is an essential part of anyone’s journey into franchising. What sets franchising apart is the training and support you receive from the franchisor, and Matthew states that his experience of this from lawnscience has been very good. “We have regular meetings to discuss ways to improve revenue and to discuss any issues that have arisen over the season. I also receive regular visits from my franchisor and additional support over the phone,” adds Matthew. Matthew has found that getting to know how to market his lawn care business and learning all the different lawn treatments – areas he had no prior experience of – to be the most
“I have already expanded my franchise into a multi-van business” territory it is very important as this will govern your earnings potential. Don’t make your decision purely on the cost of the franchise.” The lawnscience, lawn care, franchise attracts people from all walks of life, not just those with previous gardening or grounds keeping experience. They are justifiably proud to be able to offer each successful applicant a franchise territory, which is tailored exclusively to them. The package also includes a comprehensive three-week training programme, support in their business and an individual marketing launch, valued at more than £8,000 and second year support of up to £5,000, all for under £20,000. If you yearn for a healthy working environment and the opportunity to grow your business the way you want to, love the outdoors and have the determination to succeed in your own business get in touch with lawnscience today!
lawnscience Website: www.lawnsciencefranchise.co.uk Email: terence.nicholson@lawnscience.co.uk Phone: 01908 504 664
26/07/2013 19:38
Your future Your business Your rewards I was looking for a business opportunity, which would give me a balanced lifestyle, a healthy working environment, and the opportunity to grow a business that would provide a secure future for my family and me. Lawnscience ticked all the boxes and I’ve not looked back since starting in spring, within 8 weeks I had already scheduled my first years financial goals. It was the right choice for me. Scott Harrison, Lawnscience, Birmingham
M Launch arketing valued at over
Why you should choose Lawnscience…
£ 8, Second 000 Year S
Your own business for under £20,000!
of up t o
uppor t
£5,000 !
Customised territory, created with you and for you Protected postcode area with over 100,000 potential clients Three week comprehensive training covering all aspects of the business
Download your Free guide to buying a lawn care franchise at: www.lawnsciencefranchise.co.uk
Individual marketing launch, valued at over £8,000 and second year support of up to £5,000! Ongoing marketing support Year round repeat business Industry leading software to make running your business easy
For full details please call
01908 504664 or visit our website:
www.lawnsciencefranchise.co.uk Lawnscience Editorial & Advert.indd 2
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Freedom to run your business, support to help it succeed With our help you can replicate our success in your own territory! Following our proven system is far more likely to generate you a successful business than if you try to go it alone. You’ll still be your own boss, and be able to benefit from all the financial rewards that being self-employed entails. You’ll have the freedom to work where you want, when you want, but we’ll be there to help you.
Proven business model Full training & on-going support Repeat business Growth market Good profit margins Tel: 0845 0945 363 | Mob: 07973 328 555 info@lawnkeeperfranchise.co.uk | www.lawnkeeperfranchise.co.uk
Become part of our success story Why Letsand is a great choice for you Letsand is a new and exciting franchise with a forward thinking team of property experts working with you to grow your business Cost effective access for new franchisees. The franchise fee is purposely low at the moment to encourage franchisees with drive and determination to succeed We understand that it’s your business We work with you to grow and develop that business We will work with you to identify an area that suits you and our premises expert will work with you to source and brand your new office Opportunities to take on other aspects of the property business once your lettings business is up and running
Call: 01522 220890 franchising@letsand.co.uk
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www.letsand.co.uk/franchises
26/07/2013 19:41
LEGAL
Fame and misfortune Hooking up with a celebrity could be the catalyst your business needs. But endorsement comes with its own risks
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WORDS: ADAM PESCOD
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ersuading a celebrity to endorse your brand is a surefire way to attract the attention of the press and punters alike. That said, the value of celebrities as brand builders is counterbalanced by their often unpredictable behaviour, which can pose a variety of risks to your business. Therefore it makes sense to treat a potential collaboration with a high-profile star with a certain degree of care and due diligence, just in case they act in a way that threatens the reputation of themselves, and more importantly your brand. Indeed, Adidas would not have been able to wash its hands of the sprinters who tested positive for banned substances if the contract between both parties wasn’t sufficiently watertight. And the same applies to the disgraced American cyclist Lance Armstrong. The brands and charities that used his supposedly good name for promotional purposes would be in a far stickier situation now if – due to a sloppily written contract – they still found themselves tied to the Lance Armstrong name for the foreseeable future. Naturally, most celebrity collaborations are struck in good faith – from both parties – and so it makes sense to ensure that any contract signed covers a fairly lengthy timeframe, in order for your brand to get as much value out of the deal as possible. “Obviously, advertising campaigns are expensive, so if you set up a campaign, you
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LEGAL
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want to make sure that you can run it for long enough that you get the full benefit of it,” comments Kathryn Rogers, associate at law firm Cripps Harries Hall. “You want to have a fixed term written into that contract, which ensures you are getting the value.” Nevertheless, any business owner who Kathryn Rogers, cherishes their brand above all else will associate at law firm ensure that grounds for termination are Cripps Harries Hall clearly laid out in the contract, regardless of how well the celebrity is perceived by the general public. “You want to make sure that you can actually terminate the contract during that fixed term if anything happens with the celebrity, which could damage either their reputation or the reputation of your brand,” explains Rogers. Evidently, depending on the nature of a business, certain types of celebrity behaviour would be less likely to cause harm to your brand than others. “A speeding fine might be okay unless your brand represents safe driving, in which case speeding wouldn’t be okay,” Rogers adds. “It is a case of tailoring the contract to your brand and not just using an off-the-shelf template endorsement contract.” As is the law though, a celebrity has the right to challenge any attempts to terminate the contract should a situation arise where the brand deems it the only option. “You can put in a clause that says you are able to terminate the contract if the celebrity does anything that you feel could cause harm or damage to your brand,” says Rogers. “However, there is a risk that the celebrity wouldn’t accept that, and they would then want you to give more prime examples of ‘in which circumstances you could terminate’.” And the same ultimately applies to any efforts to recover financial losses. “You would want to have provisions to enable you to effectively claim your money back, not only the amount you have paid for the endorsement, but also the losses you have suffered as a result,” Rogers explains. “And that is going to be an issue of negotiating it with the celebrity, because obviously they are not going to want to financially expose themselves.” Of course, a celebrity will reasonably expect a similar level of protection in case your own brand becomes embroiled in controversy. Rogers adds: “A celebrity is also a brand so if, for example, he or she was linked with Tesco when the horsemeat scandal was going on, they may well think that is not something they want to associated with, and so at that point would want to be able to withdraw the use of their name from the branding.” Another recent news story that has exposed the complex relationship between real business and show business involves pop star Rihanna and clothes retailer Topshop. The former is pursuing a reported £3m from Topshop after it used her image on a T-shirt. Rihanna believes that it has breached her image and personality rights but Rogers explains that no such rights currently exist in the UK, as they do in the USA.
“You can put in a clause that says you are able to terminate the contract if the celebrity does anything that you feel could cause harm or damage to your brand” Kathryn Rogers
Therefore, she says, the only grounds upon which Rihanna could have a case against Topshop would be for ‘passing off’. “‘Passing off’ is a way to protect a person’s name or image if the use of it attracts goodwill and, if by using it, the brand is effectively making out that the celebrity is endorsing the brand,” Rogers explains. And, while admitting that Rihanna would probably have no issue proving she has goodwill in her own brand – she already has a merchandising deal with River Island – Rogers says that the endorsement angle provides the biggest challenge from a legal perspective. “I don’t think there is a thought among the general public that, just because there is an image on a T-shirt, that means the person who is in the picture has said, ‘Yes, you can use it,’” she comments. Suffice to say, should Rihanna win on such grounds, it seems it could have a significant bearing on the British retail sector. “It is really going to come down to whether the judge in the case feels they are prepared to accept this personality right concept in the UK,” says Rogers. “It would be quite a big change because it is not unusual for images to be used on T-shirts without there being a celebrity endorsement contract in place.” Taking into account the additional copyright implications of using a celebrity photo to help boost your brand, it really does pay to be on guard when it comes to dealing with the rich and famous.
26/07/2013 17:35
How comfortable are you that your business is protected? Need a helping hand? We help businesses through our virtual legal support service get the right contracts in place for their business and give owners peace of mind. We are offering to Business Elite readers a Free Consultation (up to 2 hours) without commitment and 10% off a first instruction during July and August 2013! Use the time to health check existing business contracts, review a particular contract that your business has been asked to sign, or review what contracts you may require for your business needs; the choice is yours!
Here are some examples of the commercial arrangements we can help with: Corporate Contracts: · · · ·
Franchising agreements Shareholder agreements Partnership agreements Joint Venture arrangements
Commercial Terms and Conditions: · · · · · ·
Website Terms and Conditions/Privacy Policies (including Cookie Policy) Your own Terms of Business (whether you provide goods and or services to your customers) Outsourcing agreements (including India) Confidentiality agreements / Memoranda of Understandings Contracts for consultants (self-employed or limited company) Contracts with key suppliers e.g. IT Services, Recruitment agencies, PR & Marketing
Employment Contracts: · · ·
Employees at all levels of your organisation (including director service agreements) HR policies and procedures/Staff Handbook Commission and Bonus Scheme terms and conditions
Contact Us: T: 020 7060 9913 E: sara.mccracken@vialegal.co.uk W: www.vialegal.co.uk
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26/07/2013 19:42
classifieds Accountancy Services
ICAEW’s Business Advice Service offers a free, straightforward discussion with an ICAEW Chartered Accountant. There’s no obligation after your first free session, just practical thinking to help your business succeed.
Getting the best financial advice at the right time is essential to starting your business off on a sound footing. We provide core services to SMEs, such as help and advice with accounts, tax, payroll, business start-ups as well as tax and service charge accounts for personal clients and flat management companies respectively. We are a long established but forward thinking practice, rooted in traditional values, offering flexibility and approachability and we are renowned for the personal service that we extend to all of our clients. Make an appointment for a free, no obligation consultation today. We can help you save money and avoid costly mistakes!
t: +44 (0)20 7920 3561 e: bas@icaew.com w: www.businessadviceservice.com
t: 020 8438 0625 e: joe@josephmorris.co.uk w: www.josephmorris.co.uk
Looking for a modern, online accountant? Handle your company bookkeeping and payroll effortlessly with Crunch’s online accounting software, and get help when you need it from our on-call team of accredited accountants. Crunch includes all HMRC and Companies House filings, a full Year End service and unlimited support, all for just £59.50+VAT/month!
t: 0844 500 8000 e: advisors@crunch.co.uk w: www.crunch.co.uk
Business Services
Business Coaching
IBCN
Lynbyrd Express
INDEPENDENT BUSINESS CONSULTANTS NETWORK
Creating confidence in Business with Real Skills for Real People
We have everything you need to get ahead and stay out front in business. Our toolkit (available online or in a presentation binder) provides you access to all the tools advice and information you need to improve your business. It’s like a 6 month training course and business consultancy combined into a series of modules, workbooks and practical tools you can work through at your own pace for less than the cost of a half day seminar. Find out more and Get Started Now at: www.stayoutfront.com
94 t: 0844 257 1330 e: info@stayoutfront.com w: www.stayoutfront.com Creative Design
Lynbyrd Express offers results driven training and coaching solutions for: Businesses looking to better staff skills and increase their sales conversions. Individuals to equip themselves for a new direction of employment or starting their own business. Contact us for:
• Coaching & Mentoring • Management training • Sales & telesales • Customer Service & Telemarketing
• NVQ & VRQ qualifications • Job hunting training • Pre-interview training • Funded courses
t: 01329 848 682 / 0800 508 8338 e: admin@lynbyrdexpress.co.uk w: www.lynbyrdexpress.co.uk
Call us on +44(0)1206 580179 visit us at www.puurcreative.com or follow us on twitter @puur_creative Email Marketing
Maximise the profit from your email marketing, SMS and social media with Sign-Up.to. Our powerful, easy to use marketing platform and award winning support team give you everything you need to create campaigns that get great results. To busy to do it yourself? Our managed services team can handle everything for you - from strategy to execution - and puts our 10 years of experience at your disposal. Visit us at www.sign-up.to or call us on 020 3355 2631 to find out more.
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Our objective is to provide experienced practitioners, facilitators, troubleshooters, designers and implementers to assist in the introduction of practical Business Management Systems.
t: +44(0) 1268 730 574 e: info@ibcn.co.uk w: www.ibcn.co.uk Debt Recovery
CRM
where excellence is standard
We’re a small design agency with big brand, international experience. We deliver creative, targeted and differentiated solutions to the design needs of your business. Specialising in all aspects of visual identity development and delivery.
IBCN provides practical jargon free value for money assistance, with minimal paperwork, which is tailored to individual business requirements, resulting in real business benefits.
We developed Interprise Suite with small and growing businesses in mind – providing Accounting, CRM, Stock Control, Sales Order Processing, Purchasing, etc, as well as optional eCommerce, in one fully integrated, feature-rich, real-time system. Our key aim with Interprise Suite is to deliver big-business functionality to small and growing businesses without the big-business price tag! Have a look - you’ll be impressed!
t: 0161 387 7140 e: sales@apexit.co.uk w: www.apexit.co.uk Energy Efficiency
Energy is a controllable cost that has a direct impact on your profits. We are dedicated to helping you make your business more profitable by reviewing your existing expenditure, recommending techniques and technologies to reduce waste and increase efficiency. We will oversee implementation, monitor and report on improved performance.
t: 02082 579451 e: info@greenbridgeservices.com w: www.greenbridgeservices.com
Camelot Credit Solutions Ltd is a proven provider of Debt Collection and Credit Management services that can help you improve your procedures, collect your outstanding debt, help safeguard your profit and give you peace of mind. Specialising in the following: • Debt Recovery • Credit management system reviews • Outsourcing • Tracing • Online litigation We achieve the best results for you by providing FAST, EFFICIENT AND COST EFFECTIVE services which in turn delivers a direct result to your bottom line.
t: 0845 873 3065 e: debt@camelotcredit.co.uk w: www.camelotcredit.co.uk First Aid Training
DW First Aid Training provide cost effective, informative, enjoyable courses delivered in a relaxed atmosphere using a mixture of theory and practical sessions to ensure all delegates complete the course with not only the skills but also the confidence to act in an emergency. Our trainers are all experienced first aiders and are able to relate each subject to real life situations. All our courses are competativley priced so that learning these skills will not cost a fortune. We are able to run courses at your location at a time that is convenient for you even if this is at the weekend or at night.
t: 01622 370 777 e: info@dwfirstaidtraining.co.uk w: www.dwfirstaidtraining.co.uk
26/07/2013 21:27
classifieds Franchise Opportunity
DON’T MISS THE BOAT! Your Chance to be Part of the Next Shopping Revolution... M-Commerce! FlexKom International are about to Launch Across 9 European Countries, with further Launches Planned.
Snack-in-the-Box offers a great opportunity to run a business that’s in constant demand. As a Snack-in-the-Box franchisee you’d provide a snack and drink vending service to local businesses, using proven business management and development methods. Established and start-up businesses are available. The minimum investment required starts from £20,000
Cargocall provides one-stop B2B logistics solutions for both large and small companies along with free consulting for supply chain management and international trade. Whether you are a company just taking your fist steps into exporting or importing, or if your business is a seasoned international company, Cargocall can manage your end-to-end shipping requirements and deliver efficiencies into the process. Everything from small components to large machinery, Cargocall offers international transport to the world. Contact us to access delivery systems and advice to your advantage.
t: 0845 22 66 492 e: enquiries@sitb.co.uk w: www.sitb.co.uk
t: 0800 0787 747 e: info@cargocall.com w: www.cargocall.com
t: +44 (0) 7922 254865 skype: karenwade224 e: karen@flexkominfo.com w: www.FlexKomInfo.com
Sweet Treat Donations are seeking franchises across all of the UK and Wales Boxes of sweets and snacks are left in places of work, requiring no commitment or obligation. Because funds are being raised for Your Local Air Ambulance Trust or The Children’s Society, people are only too pleased to offer their support and take a box. Customers choose their sweets and snacks from the 40 or so different varieties and the cash is placed in the honesty box incorporated within the display unit. Every two weeks, the money box is emptied and the display unit is re-stocked with more sweets and snacks – it couldn’t be easier.
Established in 1995 and with over 200 franchisees across the UK & Ireland, TaxAssist Accountants provides a full range of professional tax and accountancy services to small businesses.
New franchise opportunity from IFG 3 great features of the IFG 50/50 franchise • Leverage your capital • We handle the paperwork • Earn referral commissions on new business This is your opportunity to be in control of • Your income •Your capital • Your work schedule And, earn an ROI that is well-above average!
t: 0845 834 0332 e: ifg@interfacefinancial.com w: www.interfacefinancial.co.uk
t: 01271 310703 or 07976 665724 e: info@sweettreatdonations.com w: www.sweettreatdonations.com Health Insurance
A franchise opportunity in an ethical, established yet expanding market. A new take on a traditional business. Wilkins Chimney Sweep Franchisees experience excellent cash flow, good profits and are building sustainable, ethical businesses. They revel in the quirky yet grubby nature of being a chimney sweep. We’re seeking a select few individuals who will receive great training and use best practice to develop a business in an established yet expanding market. Full details on application.
t: 01635 551454 e: franchise@wilkinschimneysweep.co.uk w: www.franchisechimneysweep.co.uk
Significant earning potential. Full training, support and coaching provided. **Strictly limited number of franchise licenses available** Please quote ref: kw0021 for your £20 discount
As your role would be business development and practice management you do not need to be an accountant to join. As the owner of a TaxAssist Accountants franchise you will enjoy the profits whilst building an asset for you to sell when you are ready to exit and with the TaxAssist Accountants brand name this is proving to add a premium to the value of the business when you decide to sell.
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t: 0800 0188 297 w: www.taxassistfranchise.co.uk HR Support
Discounted Private Health Insurance from General & Medical
Nothing is more important to you than your health and the health of your family. If you or your loved ones were to experience worrying symptoms, private health insurance from General & Medical can give you some control over the situation. With private medical insurance, diagnosis and treatment can be dealt with almost immediately so you can concentrate on getting well sooner. As well as Private Health Insurance, we also have a comprehensive range of Sports cover available. To obtain a completely free no-obligation quote, for either Health or Sports insurance, please click on the following link; www.generalandmedical.com/elite
Insurance Services
Employment issues are challenging, time consuming and keeping up to date with ever changing legislation almost impossible creating significant challenges for employers without the expertise, time or money to manage them properly. We help you to manage employment issues - from recruitment to termination, keeping you compliant and minimising risk, at an affordable price. To our clients, we are their HR Department.
Invicta Insurance Services Limited are independent general insurance brokers who are authorised and regulated by the FCA. We combine personal service with modern technology to provide tailored insurance solutions to our commercial and private customers.
t: 0207 788 7966 e: sean@personnelmanagement.co.uk w: www.personnelmanagement.co.uk
t: 01732 471950 e: info@invictainsuranceservices.co.uk w: www.invictainsuranceservices.co.uk
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This is your chance to secure a global license allowing you to introduce both local and international retailers/small businesses and also other global franchisees.
Specialising in commercial, property owners, home and motor insurances, we research the market to provide comprehensive cover at highly competitive rates.
HR Elite aims to offer you and your business practical, cost effective Human Resource solutions to address your specific business and employee needs. Whatever your requirements, big or small, one off or ongoing, HR Elite will be able to provide you with a service to support you, your people and your business. TAKE OUR HR HEALTH CHECK ONLINE NOW
t: 01206 848 459 e: info@hrelite.co.uk w: www.hrelite.co.uk IT Support
Been hacked? Having LINUX problems? Trust the LINUX experts since 1998!
• Open Source software development • Linux systems administration • Networking • Fault finding • Installations t: 0141 438 2030 w: www.dsis.co.uk
26/07/2013 21:28
classifieds Legal Advice
IT Support
Managed Networks provides proactive IT support and cloud hosted desktop services, exclusively for small and medium-sized enterprises in London, Birmingham and Manchester. Our unique support offering is based on routine scheduled site visits “Rotation Days”, which combine preventative maintenance with an opportunity for face-to-face support of users. We’ve been providing better IT to SMEs for nearly 20 years and our service is backed by our unique proactive service warranty, so that if something goes wrong, we fix it; no fuss, no charge.
t: 0800 783 6170 e: sales@managednetworks.co.uk w: www.managednetworks.co.uk
Delivery Centre • Software development • Testing • Application Maintenance • Multilingual support • Unified Communications • Mobile Cross-platform • Embedded Software • Enterprise Applications • Time & Material Teams • Outsourcing • Staffing & workforce management • Staff Augmentation As IT becomes more complex, we encourage the quest for simplicity and clarity. Contact us to find out how we can be a reliable extension to your organisation. RINF, where ICT works!
t: +44 7426 584 821 e: angel.horvat@rinf.ro w: wwww.rinf.ro
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For all your printing needs including: >Business Cards > Flyers > Leaflets > Letterheads
t: 020 7060 9913 e: sara.mccracken@vialegal.co.uk w: www.vialegal.co.uk Stationery
t: 01255 671125 e: admin@essexstationery.co.uk w: www.essexstationery.co.uk
Fulfilment
It’s simple: video is the most powerful way to boost traffic and conversion rates. Wagon Media creates original, targeted video for web and TV. Broadcast expertise for your online budget. commercials | corporate | explainer | training | exhibitions Contact Rebecca on *comScore, May 2013
t: +44 (0) 1252 850058 m: 07789 773985 w: www.legalservicesforbusiness.co.uk e: lynda.lawson@legalservicesforbusiness.co.uk
DMS Exhibition Specialists We ensure that the continuity of the customers corporate branding is followed through every stage of the print process, whether it is a business card or an exterior sign to an exhibition banner. Our services include stand build/graphics and systems, roller banners, pop ups, bespoke modular systems, shell scheme panels, posters and banners including all your printed literature requirements.
t: 01622 607966 e: kevin@askdms.com w: www.askdms.com Video Marketing
Storage
Dispatch
Pick and Pack
Distribution
Access Fulfilment is a leading provider of fulfilment, logistics and shipping services for the UK, Europe and International community. With our fully integrated location and stock management system we can track any order from receipt to dispatch. We can meet any volume/product type or requirement through our wide range of experience in diverse clients from commercial and educational to printed and medical products. Essential additional services include pack make up, after-sales customer service, collection and replacement, labelling, hand finishing and client returns.
Virtual Administration
37 million UK customers viewed video online in March 2013*
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t: 0845 564 9717 w: www.fullcolourcards.co.uk
t: 08700 601563 e: enquiries@accessfulfilment.com w: www.accessfulfilment.com
Video Production
t: 07798 768 011 e: video@wagonmedia.co.uk w: wagonmedia.co.uk
> Booklets > Folders > Banners > Greetings Cards
Storage
Essex Stationery is a respected Office Supplies company with over 18,000 Discounted Office Products available via our secure website. We supply Office Products from all the major brands as well as a range of money saving alternatives. Our Office Stationery Supplies and Office Equipment have incredibly competitive prices and we aim to give the highest levels of customer service at all times. Essex Stationery for the best prices on office supplies
• There when you need me - communicative and responsive • Free one hour consultation • Fixed cost where possible, and transparency on fees • Value for money expertise
Signage
Printing Services
Practical and flexible legal support for your business needs We can help you with setting up corporate arrangements and agreements; reviewing and drafting commercial contracts; providing assistance with employment and HR related matters. We offer: •Fixed fees (where possible) •10% off first instruction (new clients) •Free complimentary support for general legal queries by phone and email (following first instruction)
Timely, effective advice in a language that won’t confuse. With over 12 years experience advising owners, directors, and shareholders, Legal Services for Business offers companies a fresh approach to law.
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We can project manage the entire website creation process for you. From domain registration to setting up your payment gateways. We can host, maintain an even migrate your old site from other servers. We also offer training plans so you can get the most out of your new website and learn how it can be expanded in the future. Your new website is a chance to break the mould and be daring. Your business is unique, not a template
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26/07/2013 21:28
classifieds Web Design
We are a web design agency who specialize in bespoke web design projects and start up packages for small businesses.
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Our web design, and on-line marketing services include E-commerce, Logo Design, Web Site Re-Design & Web Hosting.
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Quality cost effective web design your business whether you are a start-up, an established small/medium sized business or a blue chip giant. Specialising in eCommerce Solutions, CMS Website Design, Online Fast Food Restaurants, Property Webdesign and Bespoke Website Development. UK Based Company with UK staff and a very friendly hands on approach. Prices from £245.
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Website Design
The Web Tailor Group are passionate about delivering bespoke websites and web applications for all types of businesses, large and small. Specialists in bespoke website projects we have worked on some exceptionally creative and specialised tasks over the last few years which has made our ability to provide the perfect solution for businesses, second to none. For a full list of our work please visit our website at www.webtailorgroup.com or call us now on 01454 809 808.
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Whether you are an existing company or a new start up, we will work with you to design a website that gets the core message of what you offer to your customers. If your strength is business and customer service, then why don’t you concentrate on that and let Imran Shabir Freelance Web Designer handle the technical IT aspects?
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Classifieds August.indd 4
26/07/2013 21:28
the START-UP DIARies
business plan
2.0
The holiday season is an ideal time to steal a march on the competition and evaluate how everything is looking for your business, says Nicola Barron
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O
ne of the great things about being three years into a business is that you’re able to spot trends and track progress more easily. With Homemade London, I’ve even been able to pinpoint individual weeks that are likely to be busy or slow and that helps me plan accordingly. All things considered, it feels fairly reassuring. However, there is a flip-side to this: if you’re aware of trends and patterns, it’s easy to have a tendency not to try harder than you need to. For example, now we’re in the holiday season, many of us might be tempted to presume or accept that August will be a slow month. If it seems that the majority of your clients are away you may not see the point in chasing after new business. However, with your competitors possibly thinking the same thing and being less proactive in their approach, it could be an ideal time to attract customers. Like many business owners, I find I’m more realistic now than I was when I first started out. And while it’s a good thing I’ve shed some of the naïve optimism revealed by some of my earliest financial projections (if they were to be believed I would have been worthy of a place on the Dragons’ Den panel by now), occasionally I need to remind myself that, just because a particular idea wasn’t a success first time round, it doesn’t mean that I shouldn’t necessarily try it again. After all, if you’re too risk averse, you’re in danger of not doing anything at all. Complacency is the enemy of business. Recently, my husband and I were bemoaning the fact that some of the independent shops, bars and restaurants we once loved so much seemed far less exciting nowadays. As a business owner, I can see how this happens: you concentrate your efforts on maximising the elements that make you the most money, but in doing so it can become easy to ignore how your customers feel about you; they may be bored by you, they may not like changes you’ve implemented or they may simply forget about you because you’re not on their radar any more. For large businesses, this is dangerous. We all see the shopping centres and high streets peppered with empty units that were once occupied by
“Complacency is the enemy of business”
(L)Start-up diary.indd 1
household names. On the other hand, small businesses where income and expectations are relatively low can keep going like this for years in a plateau state. So you might accept things as the way they are and not even realise that you’re doing anything wrong. However, there are lessons to be learned from businesses that thrive in unlikely circumstances. Take the example of Timpson, which established itself as a shoe repairer in 1865 at a time when the phrase “make-do-andmend” had more resonance than it does now – but it currently has 800 stores throughout the country. If you take a look at its website, you’ll see that it has managed to do this through a combination of diversification (there’s relatively little mention of shoe repair on the homepage) and a focus on customer care and its staff. As business owners and employers, our job is not to accept things as they are. It’s all too easy to get sucked into the day-to-day running of a business without properly planning for the future – there are always demands on your time and it’s really easy not to prioritise long-term goals. For the past year, my very wise accountant has been suggesting that it’s now time to revisit my initial business plan. I’ve always agreed, but these things are easier said than done and I have found numerous valid reasons to put it off. But this week, I’ve been getting up a little earlier than usual and devoting some early-morning headspace to producing a new plan that properly reflects my business as it is now (flaws included) and where we want to be in the future. No doubt, I’ll be sharing the hard truths and realisations as they come to me.
www.homemadelondon.com
Nicola Barron Founder of Homemade London
26/07/2013 17:33
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12/07/2013 15:33
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26/07/2013 19:43