Elite Business Magazine Jan 2013

JANUARY 2013

THE FUTURE OF PROCUREMENT

SMEs want a bigger slice of the public sector pie

titans of tech

Meet the biggest stars of the UK scene

life after metro bank

Anthony Thomson plots his next move

Against all odds When Kanya King MBE first came up with the idea for the Mobos, doors were closed in her face.

Sixteen years after the debut show, the awards reach an audience of 339 million people worldwide JANUARY 2013 ÂŁ4.50

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CONTENTS

Inside this month...

VOLUME 02 ISSUE 01 JAN 2013

16 The Elite interview Kanya King on making the Mobos a smash hit

09 Editor’s letter 10 Contributors 12 News in brief 13 Talking point 14 Book reviews 21 One to watch

Climate Cars is providing a greener take on minicabs. Watch out, Addison Lee

32 Assembling a model

Judging what pricing structure is right for your business can be a tough call

43 Service with a smile

25 Procuring progress Opportunities abound for SMEs in the public sector

When thinking about customer experience, satisfaction simply isn’t enough

48 The international language

Why there’s a world of difference between your native tongue and global business English 07

52 As easy as ABC

Multitasking is an overrated quality – which is why it’s better to tackle problems one at a time

55 Following in their footsteps

Experienced entrepreneurs can help lead the way by mentoring fledgling enterprises

60 Should auld acquaintance be forgot?

37 Quantum leap Metro Bank’s Anthony Thomson looks to the future

Things to bear in mind if you’re going to hold onto your staff this new year

70 Tech for start-ups

The latest must-have gadgets, hardware and apps for forward-thinking small businesses

75 Social life

How social media can help inject your enterprise full of vitality

77 Enterprise arithmetic

When approaching a new project, it’s important to make sure the figures tally

82 Franchise in the spotlight

65 The new radicals The first part of our list of the movers and shakers in UK tech

BBC Radio 4 Farmer of the Year winner Guy Watson and his franchise Riverford Organic Farms

85 A friendlier franchise

Acting cold and distant isn’t going to bring in franchisees – a little compassion goes a long way

91 Talking tax

Understanding tax obligations isn’t easy and mistakes come at a big price

94 Classifieds 98 Start-up diary

January 2013 www.elitebusinessmagazine.co.uk

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EDITOR’S COMMENT

Scan this QR Code to register for your free copy of Elite Business Magazine

VOLUME 02 ISSUE 01 JAN 2013 SALES Harrison Bloor – Account Manager E: harrison.bloor@cemedia.co.uk T: 01206 266843 Daniel Little – Account Manager E: daniel.little@cemedia.co.uk T: 01206 266844 Richard Smith – Account Manager E: richard.smith@cemedia.co.uk T: 01206 266844 EDITORIAL Hannah Prevett – Editor E: hannah.prevett@cemedia.co.uk Josh Russell – Feature Writer E: josh.russell@cemedia.co.uk Jon Card – Feature Writer E: jon.card@cemedia.co.uk Lindsey McWhinnie – Chief Sub-editor E: lindsey.mcwhinnie@cemedia.co.uk DESIGN/PRODUCTION Leona Connor – Designer E: leona.connor@cemedia.co.uk T: 01206 266845 Clare Bradbury – Designer E: clare.bradbury@cemedia.co.uk T: 01206 266845 Dan Lecount – Web Development Manager E: dan@cemedia.co.uk T: 01245 905805 CIRCULATION Malcolm Coleman – Circulation Manager E: malcolm.coleman@cemedia.co.uk ACCOUNTS Sally Stoker – Finance Manager E: sally.stoker@cemedia.co.uk T: 01206 266846 DIRECTOR Scott English – Managing Director E: scott.english@cemedia.co.uk Circulation/subscription UK £40, EUROPE £60, REST OF WORLD £95 Circulation enquiries: CE Media Limited T: 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

Get out there and grab 2013 by the balls Happy new year everyone! We at Elite Business we hope you had a wonderful Christmas sharing mulled wine and mince pies with loved ones, and generally putting your feet up for a while.

As some of us are still clearing away the debris from the confetti cannons from the new year celebrations, and returning to work, there will be an army of entrepreneurs for whom the work may have never ceased over the festive period – not even for a bite of turkey or a swig of whisky. We salute you.

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Like many of her peers, our cover star Kanya King (p16) is no stranger to hard work. From juggling young motherhood, attending university and doing several jobs to organising the first Mobo Awards in six weeks, she has form when it comes to biting off more than many others could chew. Fast forward to 2012, and King is chief executive of Mobo – which famously organises the largest awards ceremony for urban music in Europe.

One of the traits undoubtedly vital to King’s success is tenacity. She’d had the idea for the Mobo Awards several years before the event came to fruition and had had many doors closed in her face – but she carried on knocking until one day, one opened.

Tenacity is a characteristic shared by many of the businesses we spoke to for our investigation into government procurement (p25). Public sector contracts can offer SMEs a welcome financial and reputational boost, but are often an absolute pain to get hold of. Until the first one’s in the bag, others can’t follow. But once a business has got it nailed, like JBW Group or Updata, the rewards are bounteous.

Whether the customers are public sector or private sector, the UK’s entrepreneurs may very well be the key to dragging the UK from the doldrums in the next 12 months. So what are you lot waiting for? Get out there and grab 2013 by the balls.

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.

HANNAH PREVETT 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. www.cemedia.co.uk

January 2013 www.elitebusinessmagazine.co.uk

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CONTRIBUTORS

Contributors LEONA CONNOR

Meticulously working from cover-to-cover, head designer Connor is the talented soul who ensures every inch of Elite Business is pitch perfect. When not at our beck and call, she chills out by trawling Camden and Brick Lane for vintage finds, smoking shishas in Middle-Eastern cafés and sampling London’s most delectable street cuisine.

DAVID Hathiramani

Hathiramani is one half of the team behind revolutionary suit company A Suit That Fits. Our regular tech columnist is making a welcome return to Elite Business after a month-long hiatus where he was tied up by an exciting but top-secret project. Given his penchant for snappy suits, we personally think he was seconded by MI5 but, of course, you didn’t hear that from us...

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FIONA TALBOT

Between running her specialist business-writing consultancy and penning four books, we were lucky Talbot could stop long enough to pen us a feature on business English – and after six years living in Rotterdam she definitely practises what she preaches. What little time she has left is spent schmoozing at networking events.

EMILIE SANDY

Sterling photographer Sandy has promised she’ll continue to shoot the UK’s biggest and brightest start-up stars for us even after giving birth to her first baby, due in March. In her line of work, she’s probably no stranger to dealing with divas, but motherhood may be her biggest challenge yet.

www.elitebusinessmagazine.co.uk January 2013

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News IN BRIEF

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The government’s attempts to slash red tape may finally be bearing fruit: The Fifth Statement of New Regulation reported that the ‘one in, one out’ policy (which dictates that costly new regulations cannot be enforced without prior removal or modification of an existing regulation) has saved businesses around £836m since its inception in January 2011. What’s more, the government says it will deliver further savings of £83m when ‘one-in, one-out’ is replaced by ‘one-in, two-out’ this month.

company Boost&Co and asset finance provider Credit Asset Management, which is a subsidary of City of London Group. Funding Circle and Zopa were awarded £20m and £10m respectively while Boost&Co was given £20m to establish a fund that will make loans of between £1m and £8m to small businesses. Credit Asset Finance was awarded £5m to provide asset finance and professional loans. The government will announce the allocation of the remaining £45m of BFP funding in the new year.

New measures were announced to make patenting and IP processes smoother and quicker. Speaking at the Big Innovation Centre in December, business secretary Vince Cable described a “superfast patent processing service” that will deliver patents in just 90 days.

There will also be a campaign to help educate small firms about getting the best value from their creativity and innovation.

Facebook founder Mark Zuckerberg has followed in the footsteps of Bill Gates and donated half a billion dollars’ worth of shares in the social network to charity. It is the 28-yearold entrepreneur’s second major donation since he and wife Priscilla signed a pledge two years ago stating they would give the majority of their wealth to charity. In a statement on his Facebook page, Zuckerberg said his donation to the Silicon Valley Community Foundation would “lay a foundation for new projects”.

Good to see shrewd businessmen aren’t always red-blooded capitalists.

The Technology Strategy Board announced plans for its second wave of Innovation Vouchers – a way for start-ups and SMEs to access £1.1m earmarked to help with idea development, to improve processes and target new markets. The Innovation Vouchers scheme was initially launched in September 2012, and provided £5,000 to businesses developing ideas applicable to agri-food, built environment and space. This second wave of vouchers is aimed at companies who want to use public open data to commercialise their ideas and develop products and prototypes.

There is bounty on offer for green businesses too as the vouchers are also being extended to include firms with innovative ideas in the areas of energy, water and waste.

Cisco, DC Thomson and UCL launched IDEALondon, a Shoreditch-based innovation centre, which is the first in the consortium’s planned ‘innovation hothouses’. The facility builds on pledges by the partners to support the government’s Tech City initiative to support and promote digital start-ups in London’s east end. In the first three years the partners will invest more than £3.5m in the scheme, which will provide promising tech start-ups with mentoring programmes, training and business support.

Alternative financiers got a much-welcome boost. BIS awarded the first £55m under the Business Finance Partnership to help provide finance to cash-strapped SMEs. The four successful bidders were peer-to-peer lenders Funding Circle and Zopa, fund management

EVENTs Speed Networking Events January 15 MWB Business Exchange 1 Farnham Road, Guildford, Surrey GU2 4RG Speed Networking Events January 18 De Vere Gorse Hill, Hook Heath Road, Woking GU22 0QH Speed Networking Events January 18 MWB Canary Wharf Level 33 Citigroup Building, 25 Canada Square, London E14 5LB SyncNorwich – Student & Employer Speed Dating & Cyber Dojo January 24 65 Colman Road, Norwich NR4 7AN Speed Networking Events January 28 14 Basil Street, Knightsbridge, London SW3 1AJ Speed Networking Events January 29 London School of Economics & Political Science, Houghton Street, London WC2A 2AE Business Growth Show January 29 John Charles Centre for Sport, Middleton Grove, Leeds LS11 5DJ

A full event listing is available on our website: elitebusinessmagazine.co.uk/events

The Institute of Directors published a report supporting calls for a third and fourth runway to be built at London’s Heathrow airport.

Nearly 60% of the 1,000 IoD members polled said a lack of spare capacity at Heathrow was damaging investment in the UK. In the survey, 27% of respondents said a third runway at Heathrow would most benefit their business, while 13% supported a new hub airport in the Thames estuary. The IoD also criticised high rates of Air Passenger Duty and said it could be costing the economy £12bn a year by deterring travellers.

www.elitebusinessmagazine.co.uk January 2013

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Talking Point

Is the move toward the 45-day notice period for redundancies a bad move for Britain?

December’s news that the government will be cutting the redundancy consultancy period from 90 to 45 days was destined to polarise people; from those who see it as lauding a new age of flexibility for business to others who feel it will simply destabilise confidence. So, are the benefits of the reduced notice period being overstated?

WORDS: JOSH RUSSELL

W

ith the suggestion of a triple-dip skulking on the horizon, the last word anyone wants to hear is ‘redundancies’. However, there was a grim inevitability to the announcement last month that the government was going to slash the redundancy notice period for businesses with more than 100 employees. Its programme to cut employment regulation has been one of the coalition’s foremost agendas since the election and in the wake of the ‘rights-forshares’ scheme it seemed unlikely that the

raft of reforms were likely to run aground any time soon.

Even so, the revisions to the redundancy notice period seemed to be marked by a pronounced intake of breath from some quarters. It isn’t hard to understand why such a move might prove to be controversial: during the first two years of the economic downturn, the CIPD found that two-thirds of those made redundant had to take an average pay cut of 28% to return to work.

Minimising redundancies is clearly a

YES says Tony Burke, assistant general secretary of Unite Quite frankly, these ideas are appalling.

It will not create one new job, it will not help towards creating new growth – in fact, we just see it as a continuation of the war the government is waging on working people. The consultation period is there so that companies can discuss with unions and the workforce ways to reduce the number of redundancies, to save jobs and reduce the effect on the economy.

We’ve got experiences in Unite where we’ve had to use the full 90 days. There was a print company in the south-east of England who notified us of closure, but, after much longer than 45 days, following a lengthy period of discussions and negotiations, an agreement was reached – the company has stayed open for a year and it’s now at no risk of closing.

All it’s going to do is damage to the economy in the long term.

Companies, rather than negotiating, will make a decision to lay people off and the end result will be that benefits will need to be paid out earlier and it’ll break up skilled workforces. It’s all part of the race to the bottom. This is ideological and there’s no logic to it.

high priority on anyone’s agenda. But there are also plenty of businesses that would maintain that the ability to react flexibly to economic trouble is the only way to prevent much wider unemployment if firms are forced to close entirely.

Few businesses are hardly likely to want their hands bound by an increase in the amount red tape. But is this latest move simply one snip too far?

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No says James Hick, managing director of ManpowerGroup Solutions From a business perspective, the need to be more agile and quicker to react to market conditions is critical. If you look at the wider picture, in terms of employment, it has gone through a fundamental restructure, which has been driven by increasing sophistication within the supply chain, technology and individual choice of how consumers and individuals are working. If you can’t react to any of those work mega-trends, then we’re going to be less competitive. So it’s a very welcome change.

The last thing organisations want to do is reduce the talent in their companies. What we’ve seen is companies bend over backwards to protect the people they have. It’s been an extraordinary year in 2012 where there’s been a double-dip recession and yet employment has continued to rise. The net position is 500,000 new jobs have been created. This isn’t about helping to increase the speed of the race to the bottom; it’s just another adjustment to the changing nature of work.

The need for flexibility, in a well-managed and constructive way, will continue to be critical to make sure we’re competitive at a micro-level and a macro-level.

January 2013 www.elitebusinessmagazine.co.uk

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BOOK REVIEWS

The Elite read Pioneers of Digital Paul Springer and Mel Carson

In best Ronseal style, the concept behind Pioneers of Digital hardly needs explaining.

Springer and Carson’s almanac of the 20 leading digital authorities in advertising, marketing, search and social media highlights some of the global tech scene’s most stellar success stories. Instead, the emphasis really should be to allow the tales to speak for themselves. It includes a dissection of Malcolm Poynton’s revolutionary Dove Campaign for Real Beauty, a profile on digital advertising superstar and founder of AKQA Ajaz Ahmed on eschewing the spotlight to focus on building a world-beating, independent agency and a lesson on how prolific technophile and tweeter Stephen

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Fry has taught us to be proud of our love for all things digital.

It’s an excellent book to dip into and pick up lessons and inspiration from some of the greatest digital marketeers the world has to offer. It’s also beautifully laid out, features neat summaries and handy hints to take away from each profile and, above all, is just very nicely written and executed.

Introducing you to all the individuals worth knowing, Pioneers of Digital is an excellent reference tool and an encyclopaedia of tech know-how. JR Pioneers of Digital, published by Kogan Page, is out now and retails at £19.99

Welcome to Entrepreneur Country

Julie Meyer

One part transport map, one part autobiography and finished off with a small measure of self help, Welcome to Entrepreneur Country is Ariadne Capital founder Julie Meyer’s call-to-arms for Britain to embrace the start-up spirit. It’s packed full of fresh ideas, whether it be that the so-called feminine business ideal is becoming the more desirable model for the boardroom or that today’s entrepreneurs quickly become the investors of tomorrow, funding a brand new generation.

Meyer’s tech background means she is ideally placed to present a view of a rapidly changing industry and how our

entrepreneurs form a vital part of UK plc.

For those of you with extensive tech careers of your own, it’s unlikely that Welcome to Entrepreneur Country is going to revolutionise your perspective of the start-up world. But as an inspirational text for those planning their route to the top, it certainly contains plenty of interesting insights for those wanting to stake their claim in Britain’s exciting start-up scene. JR Welcome to Entrepreneur Country, published by Constable, is out now and retails at £12.99

www.elitebusinessmagazine.co.uk January 2013

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Higher ground WORDS: HANNAH PREVETT PHOTOGRAPHY: EMILIE SANDY MAKEUP: LINA CAMERON

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Dismissed by her teachers as unrealistic and written off as a young single mother, Kanya King overcame all the odds to found Europe’s largest urban music awards show

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he link between adversity and entrepreneurship is a well publicised one. The subject of many a press release, journal article and even books, it is almost embedded in the business psyche that a little hardship early on in life often spurs on an individual to strive for success and riches.

It’s certainly true to say Kanya King’s formative years were a bit of a struggle. For while the founder of the renowned Mobo awards is now responsible for a show beamed into the homes of 339 million people worldwide, it wasn’t always obvious that success would be within her grasp.

Growing up in council house in north-west London with her eight siblings, Irish mother and Ghanian father, times were tough. The youngest girl of her siblings (the name Kanya means ‘youngest one’ in Ghanian) she often found herself dressed in hand-me-downs.

“They call these clothes ‘vintage’ now, but it didn’t seem very cool at the time,” she says.

What’s more, with 11 people under the roof of the small council house in Kilburn, it’s fair to say there wasn’t much in the way of personal space. “I think that’s why I got on the housing ladder at a young age – because there had been

five of us in one room. It was a bit crowded,” explains King.

The entrepreneur found an outlet for her burgeoning creativity at school, where she excelled in English and art. “I did like school, and I always participated in everything that was happening,” she says. “I was quite sporty, too, and I was always good at long-distance running. So I think I learned early in life that I had a certain stamina,” King laughs.

Then when she was 13, the family was dealt a hammer blow when King’s father died. “I remember vividly the night he died because my mother and I went to the hospital – St Mary’s on Praed Street, near Paddington – and there were all of these tubes going into him. My mum wanted to talk to the doctor and she asked how long he had to live and the doctor couldn’t give her an answer; he said it could be a month or it could be five years. They didn’t know.

“As we left the hospital and we were walking along Praed Street, I just said to my mum, ‘Hold on a second’, and I had to rush back to the ward.

I felt I hadn’t said goodbye to him. That was the last time I saw him because he died that night.”

Her father’s passing hit the family hard, and no one more so than his youngest daughter. She

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the elite INTERVIEW

recalls an incident when her parents had briefly split up and she had felt torn between the two of them. “I hadn’t wanted to leave him on his own because the rest of the family were away, so I remember writing this letter to him. When he died, we found that letter.

He’d held onto it all those years.”

She picked up her pen again to express her sadness at her father’s untimely passing.

“I wrote a poem about how I felt and the school wanted to publish it,” she recalls.

“But because it was so personal, I just couldn’t bear the thought of other people reading it. They said they’d change the name, but, still, I couldn’t do it.”

While it would have been easy to allow the turmoil to disrupt her schooling, King continued to apply herself. The importance

“I realised if I believed in something so much, I needed to put my money where my mouth was”

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of education had been drummed into her.

“Education was very important to my parents.

They had struggled when they came here at a young age. There would have been notices on the doors saying: ‘No blacks, no dogs, no Irish’. My mum found it very difficult with young children and trying to find somewhere to rent. It was very tough. And so my father had always instilled in me how important it was to work hard. He’d always taught me there was a bigger picture.”

But King’s teachers didn’t always share her father’s enthusiasm for her future.

“I had these big ambitions of what I wanted to do – things like starting my own business – but I was told that my expectations were too high and I needed to be realistic,” she recalls. But she didn’t allow these doubters to dissuade her from dreaming big. “I had big ambitions of what I wanted to do because it had been a struggle growing up and I wanted to be financially independent.”

And financially independent is just what she became, buying her first home in Kilburn at just 17.

This was no mean feat, especially as she’d given birth to a son, Jay, at the age of 16. When she was 18, she attended Goldsmith’s College in south-east London to study English and drama. It

January 2013 www.elitebusinessmagazine.co.uk

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was a difficult balancing act. “I was juggling many different things. I was getting up early to work, going to university, working evenings and also looking after my son. It was tough.”

So much so that in 1991 she nearly got thrown out for not attending enough lectures.

But King knuckled down and managed the near impossible task of balancing the myriad responsibilities of her life.

Up until this point, she had been working in whatever jobs she could fit around childcare and university, from promotion work to market research. But of all the modules she’d studied at university, television

had been what she’d enjoyed the most.

So, when someone she had met was doing a pilot for a television show, King mucked in, offering advice and ideas on the project. “She invited me to become part of the team, so it was a bit like my work experience,” says King.

The show was picked up by Carlton, and King applied for a job at the station.

Meanwhile, King had her fingers in other pies. She’d maintained her music promotion work. “I’d always had so many things on the go and had been organising gigs because I had friends who were very talented musicians. Even though I didn’t have much money at the time,

I just made it work. Often when you’re restricted with funds, you are more creative.”

As she held more events, it became more apparent to King that there was a shift in the music landscape as urban music soared in popularity. “There was an audience out there that wasn’t being catered for,” she says.

“I could see that there were artists performing the kind of music that wasn’t being celebrated at the time and I had to do something about it. I hoped that this would inspire people to follow their own dreams musically, and their entrepreneurial ones too.”

At first, King was a little reticent about taking on such a momentous task. “But then I realised if I believed in something so much, I needed to put my money where my mouth was.” This isn’t to say it was an easy ride.

“It was definitely very hard and it was very daunting because I didn’t have mentors; I didn’t have accountants or lawyers in the family. That business expertise didn’t exist.” In fact, her mother was convinced it was the wrong move to embark on such an ambitious project. “When I’d say I wanted to be an entrepreneur, my mother would give me 101 reasons why I shouldn’t, that I could lose my home etc. So I only told her once I’d already taken the plunge.”

King had been keen for many years to stage an awards ceremony for music of black origin

“I think the beauty of not being a large organisation is that we’re more nimble, we’re able to embrace new technology, and we’re able to constantly adapt the way we deliver our events and services” – but had found the doors to be slammed in her face. This time, when she got the backing from Carlton, she had to move fast.

“I remember when we were given the television slot, they said: ‘Do you want the good news or the bad news? The good news is we’re going to give you the TV slot. The bad news is the show needs to take place in six weeks.”

King describes that time as a “really intense period”. Overnight, she had gone from working out of her spare bedroom to needing to pull together a team, find premises, book acts and invite guests. It was a tall order.

“It was daunting because I knew I had to

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“I could see there were artists performing the kind of music that wasn’t being celebrated at the time and I had to do something about it. This would inspire people to follow their own dreams musically, and their entrepreneurial ones too” prove myself. I knew I’d have to make it work.”

Not least of all because she knew she’d only have one shot to to gain the trust of the urban music community. “They did it because they believed in the concept. They just needed to know it was professionally organised and would meet certain expectations.”

The first Mobo awards were held at London’s New Connaught Rooms in 1996 with Lionel Ritchie headlining and then-leader of the opposition Tony Blair and wife Cherie in the audience. “It felt like a landmark occasion,” says King. “Even though the music was seen as niche at the time, people were going going crazy for the awards. Here was a show that wasn’t on at 4am – it was on terrestrial TV at a decent hour.” And it wasn’t just the public that had got a taste for the project – the press was awash with stories about the upcoming show. “I think it was MTV who had its show a week later, which is a huge company, and here was us with this tiny budget generating equally as much coverage.”

The event was a huge success and the following year, it moved to the Royal Albert Hall. It has also been staged at other London landmark venues such as Alexandra Palace, Wembley and the O2. In 2009, for the first time, the Mobos left London to be set in Glasgow – a testament to King’s appetite to inspire, motivate and cultivate the culture of young people the length and breadth of Britain.

“We’ve always had a sense of cultural responsibility beyond the parameters of music and so we don’t go into a city without a clear purpose. It’s important to us to work with the communities in the cities we go to,” says King.

This sense of local responsibility is one of the driving forces behind other events the company holds countrywide – from cinema nights to mobile talent competitions.

Mobo has also signed a three-year deal with tech brand HTC, with whom it holds a range of activities, including a mentoring scheme.

“We’re jointly trying to support up and coming British talent,” says King.

The organisation’s employees may now number in the hundreds, but King is keen to keep the small-company feel. “I think the

beauty of not being a large organisation is that we’re more nimble, we’re able to embrace new technology, and we’re able to constantly adapt the way we deliver our events and services.”

From working with as-yet-unknown artists to some of the biggest stars in the world, King keeps her feet firmly on the ground. For her, the biggest ‘pinch me’ moments haven’t been meeting her idols, but helping to cultivate the careers of some of the UK’s best talent. “I remember Amy Winehouse performing at our nominations launch before her debut album had come out. It makes you feel really proud that you’ve been able to contribute to artists’ careers and help music overall.”

That said, King was thrilled when her personal heroine Sade came out of retirement to perform at the Mobos in 2000 – the singer’s first performance in almost a decade.

“I felt in awe really, she was absolutely amazing.” King has had become accustomed to spending time in illustrious company. “I was in the privileged position of celebrating Stevie Wonder’s birthday one year. Everyone started to clap when he arrived. Can you imagine the impact that had?” she exclaims. “He’s very funny and witty. I remember he rang me up one time and put on an English accent. He had me completely fooled.”

When not dining with international icons, King insists that she remains very grounded.

As CEO, she continues to be very hands-on.

She also still goes to a lot of gigs, as well as giving a substantial portion of her time to talks to aspiring entrepreneurs about founding their own businesses. “I’m passionate about SMEs,” she announces. “It’s all about helping support each other and helping other businesses to grow.”

When she does unwind, King spends time with her friends and family. She also enjoys the peace and tranquility of visiting London’s parks.

“In my younger days, I used to spend a lot of time in the park. That’s where my mum used to find me,” she says. “I think coming from a large family, I loved the tranquility of sitting in deserted places, or quietly reading a book,” she explains. “Nothing’s really changed. If you can’t find me, take a walk to the park.”

19

January 2013 www.elitebusinessmagazine.co.uk

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ONE TO WATCH

Going the extra mile

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The founder of Climate Cars, Nicko Williamson, has always had a one-track mind. It was the entrepreneurial way, or the highway

WORDS: HANNAH PREVETT

T

here aren’t many 14-year-old boys who are happy to do extra-curricular reading. Getting them to delve into the works of Joyce, Shakespeare and Orwell, as directed by the reading list, is usually tall enough a task. For them to squirrel themselves away in their dorm room devouring a business biography would leave many a tutor scratching their head in bewilderment.

But Nicko Williamson had a unique drive.

From a young age, he knew that he wanted to start his own business. Reading Richard Branson’s autobiography Losing My Virginity just confirmed it. Williamson said he was “totally blown away” by Old Beardy’s musings. “The excitement of starting multiple businesses and the sense of achievement that I drew from Branson’s book really inspired me to go and do it myself,” he says.

January 2013 www.elitebusinessmagazine.co.uk

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ONE TO WATCH

Aside from his clear interest in business and start-ups, there were other clues to Williamson’s budding entrepreneurialism.

“I think I’ve always been a bit challenging,” he admits. “I always asked ‘why’. That’s a good thing now, of course, but not so good when you’re a child and people are trying to drum information into you. Being questioning and curious can wind teachers up a little bit.”

Aside from business, there was another subject that fascinated the precocious Marlborough School student: history.

So while he waited to be struck by the lightning bolt of genius as to what his first entrepreneurial venture would be, Williamson headed to Bristol University to read modern history. “I spent my time there searching for this elusive idea about what I would do when I left,” he says.

Eventually, the eureka moment came in Williamson’s last year at Bristol. On the journey from university to his parents’ home on the other side of Bath he would drive past a garage that converted cars to run on greener LPG fuel. “I started thinking about the growth of the environmental agenda and which sectors I could apply greener fuels to. I thought the taxi sector might be an ideal place to start.”

This is when the first idea for Climate Cars

22

was born. He still had a few months of intense study to complete before he graduated, so juggled his course and sketching out plans for his start-up. “I was writing my dissertation on slavery in Florida, but also writing a business plan for Climate Cars,” he recalls.

Upon finishing his degree, Williamson continued to tinker with the business plan.

A major flaw was that his original idea of running the cars on gas was completely unviable. “Buying cars and converting them to run on alternative fuel is not what vehicle funders want you to do,” he explains. “They want you to buy standard vehicles so that if they go bust they can reclaim the cars and get their money back.”

An obvious alternative to running regular cars on alternative fuel was to buy cleaner, greener cars from the off. “Hybrid cars were very much coming to the fore at that moment in time, and, as it turns out, the emissions were lower [on them] than they would have been on the converted cars,” he says.

The basic premise for Climate Cars was very simple: it was taking the existing high-end minicab offering, but with a significant reduction in emissions. “Our biggest competitor is Addison Lee,” says Williamson. “It’s that model of providing a very slick, fantastic service at a very

“I started thinking about the growth of the environmental agenda and which sectors I could apply greener fuels to, and I thought the taxi sector might be an ideal place to start” www.elitebusinessmagazine.co.uk January 2013

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ONE TO WATCH

z Company CV

Name: Climate Cars Founded by: Nicko Williamson Founded in: 2007 Team: 24 staff, 150 drivers

competitive cost.

But with the environmental bit, too.

Our emissions are less than half of that of black cabs.”

Right from the outset, Williamson was very clear about his target market: he was after the large corporates. The banks, the magic-circle law firms and big ad agencies were all on the hit list. And it couldn’t have come at a better time, with the rising prevalence of the CSR agenda. “One of the big things I was aware of when I was starting Climate Cars was that many big businesses were making noises about cutting their emissions, so this was a key selling point for us.”

And Williamson wasn’t the only one convinced by the business’s viability: he also had investors hooked too, raising £200,000 from friends and family in 2007 and a further £300,000 from business angels the following year. He also secured credit lines with a number of vehicle funders. This meant the cash he’d raised could be used to foot the bill for start-up costs and fund the initial losses, and the cars would be purchased on credit.

“It was a very capital-intense business to start with,” says the entrepreneur. The company began trading with five cars, and now has a fleet of more than 150. Turnover has grown just as quickly, too, going from revenues of £255,000 in the first year to £2.7m in the year to March 2012.

Unlike lots of founders who struggle as the business grows in size and complexity, Williamson says that it has got easier as the company has grown larger. “One of the issues I had early on was developing a good team,” he admits. “I hired a few of the wrong people early on, which was difficult. But we now have an excellent team, with a really good operations director, as well as a head of account management, a guy who takes charge of all of our drivers, and a head of sales. We’ve got a decent management structure in place.”

It certainly seems as though everything is rosy at the green taxi firm. Certainly when things could have so easily gone the other way: Climate Cars raised its much-need angel round

just before Lehman Brothers collapsed. What’s more, it is no surprise that during the recession of the past couple of years, CSR has slipped down the agenda in UK plc.

But Williamson says his business has been unaffected by the downturn. “We kept growing the whole way through it,” he says, confidently. “I started in a boom market for about nine months, before it all turned a bit sour. Apart from those initial few months I haven’t really operated in a thriving economy, so I’m used to it being hard work.”

Williamson’s natural knack for innovation (arguably, he’s shaken up one of the most staid divisions of the transport sector) has won him many an accolade, including the much-coveted young entrepreneur of the year award at the Ernst and Young Entrepreneur of the Year awards in 2011.

He also had the opportunity to participate in the recent BBC television series Be Your Own Boss fronted by Innocent drinks co-founder Richard Reed, where Williamson and other mentors met 500 budding entrepreneurs.

“It was fun,” says the Climate Cars founder.

“I met a huge number of really young people with all of these wonderful ambitions. We heard lots of ideas that were just not viable, but there were a few gems in there, too.”

Closer to home, business is thriving. Climate Cars is looking at a turnover of £4m for next year, and the business has been profitable since 2009. Not that there’s a lot of cash to spare.

“We’re not making huge profits because we’re ploughing most of it straight back into the business.” Recent investments have been in technology – a new shiny iPhone app was recently launched – and a large project to automate back-office operations is currently underway. The taxi firm is also about to launch its new executive line, with the December delivery of its new lower emission Mercedes.

But his success with Climate Cars doesn’t mean Williamson is ready to rest on his laurels just yet: he wouldn’t be true to his Bransonworshipping younger self if he stopped at one business. “I’m very ambitious, so I don’t want to do just one thing,” he says. But he remains tight-lipped as to what his next ventures may entail. “There’s a few other things bubbling.

Just the way I like it.”

23

January 2013 www.elitebusinessmagazine.co.uk

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21/12/2012 12:29

ANALYSIS

Government procurement is a minefield – not least of all for small businesses. In February last year, the government announced a raft of changes that would make it easier for SMEs to access public sector contracts. But what advancements have really been made?

Hannah Prevett investigates

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Gaining ground WORDS: HANNAH PREVETT

P

ublic sector procurement is a burdensome process. Its detractors, of which there are many, will tell you it is painfully bureaucratic, complex and expensive. And nowhere is this encumberance felt more than amongst the SME community. But change may be afoot. Last February the cabinet office laid out plans to make life easier for SMEs with an eye on the public sector prize, and has followed up since with more policy changes.

But have they had any real impact?

Government has a lot to gain from working more closely with SMEs. Not only can smaller firms be more flexible and nimble afoot, they are often cheaper because they don’t come with the same costs – salaries as well as associated overheads such as travel, office space etc. What’s more,

by their very nature, they are often more innovative and can offer unique, bespoke solutions.

What’s more, it’s good for the economy if the nation’s entrepreneurs get their mitts on a bigger slice of the public sector pie.

Government expenditure on procurement amounts to some £236bn annually. This means that just a 1% increase in contracts awarded to SMEs, rather than their big, burly competitors, would represent an extra annual investment of £2.3bn in smaller organisations.

And on the flipside, the lure of government contracts is no great mystery. It is guaranteed income over a sustained period of time. A £60m contract over five years?

That would put a few zeros on the P&L. But there are many challenges to navigate

January 2013 www.elitebusinessmagazine.co.uk

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ANALYSIS

26

if an SME is to stand a chance of winning government business. Firstly, the process is complex and time-consuming. Larger rivals will put teams of people to work on the tender for a single piece of work, whereas an SME may only be able to afford one full-time resource, if that.

Brian Taylor is the co-founder of PixelPin, a technology company that replaces passwords with pictures, but has worked as a freelance consultant for the best part of two decades.

Unable to gain access to work directly for government, Taylor worked in-house at firms such as General Dynamics and BAE. As a result, he has worked on highly lucrative tenders. “I’ve done two bids for £1bn contracts and I lost one and won one. In both cases, the teams were substantial and we were spending many hundreds of thousands of pounds on the government bid.” There aren’t likely to be many small businesses in the land that can compete on that kind of scale.

The obvious answer is to dip a toe in the water; it often makes more sense to go for smaller, labour- and resource-intensive contracts. Sara Murray is the founder of buddi, a tracking device which is now used by about 25 police forces nationally, 85% of local authorities and a few NHS trusts.

“I’ve done two bids for £1bn contracts and I lost one and won one. In both cases, the teams were substantial and we were spending many hundreds of thousands of pounds on the government bid.”

Brian Taylor, co-founder, PixelPin

Users range from former offenders as well to vulnerable people such as the elderly and dementia sufferers. Murray points out that if small firms do their homework and target the smaller contracts, they stand a good chance of being successful. “For things that fall under the OJEC [Official Journal of the European Community] threshold [currently set at around 170,00 euros] it’s very easy for authorities to buy them. They can easily go out and spend £50,000, or, in fact, any amount up to the threshold. Which is not an insignificant amount for a small business,” she says.

Another way for smaller companies to gain access to large contracts when they lack the inhouse resources, is to buddy up with a larger organisation. Many companies will bid for multiple contracts; some as sole traders, others with a larger, corporate partner.

Going for gold Having proven unsuccessful in early attempts to gain access to public sector contracts, Jamie Waller, founder and CEO of bailiff firm JBW Group, decided it was time for a strategy overhaul. “In the first three years of JBW, we found it really difficult to get to grips with public procurement. Then we decided that, actually, what we don’t need is a team of 30 salesmen; what we do need is great writers,” Waller explains. “We invested in a team of mainly ex-journalists, and other people with great writing abilities.”

The bet paid off. JBW has gone from not winning a single government contract in its first three years, to a 100% hit rate in 2012. Not that he expects this run of good fortune to continue indefinitely. “I have to say, it’s highly unusual. It’s the only time in history I believe that us or one of our competitors have had that kind of strike rate. We wouldn’t expect that to continue.”

Neither does he expect it to drop too low, either. “Since we decided to invest in people rather than salesmen, it’s always been above 50%,” he says.

Once the right team is in place, it is also key to play to your strengths, says

Waller. “Pick your battles. You can’t go for everything.” Also, one of the key advantages JBW has over its larger rivals is that it is nimble. “The government does want to see flexibility, it does want to see businesses that can be dynamic, and it also wants best value opportunities,” says Waller. “My experience is that the government is totally pissed off with the big FTSE players bidding with a price of X and then every single change that’s required during the course of the contract, putting in prices that are three times what they were proposing at the beginning.”

Part of the challenge is ensuring that a SME can get this across on paper. “The forms are very technical,” says Waller.

“You need to look carefully at the scoring mechanism as well as how they’ve laid out the questions.”

If a small firm can get all of this down on paper, there’s no reason why it shouldn’t win government work, says Waller. “As an SME you can be dynamic and you can give them added value throughout the terms of the contract without penalising them. Why wouldn’t they choose you?”

www.elitebusinessmagazine.co.uk January 2013

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ANALYSIS

Unlike many of her peers, Murray says she doesn’t have a problem with the complexity of the procurement process. In fact, she says it’s necessary. “People complain because as they get into more high value procurement, the process becomes more and more complicated,” she explains. “But if you’re buying something more valuable of course you should take care over buying it.”

Yet Murray does agree that the process is often unnecessarily time-consuming. “I’ve done deals with large corporations that are far larger than anything we’ve ever done with public procurement which have happened very quickly.” The reason for the delay in the public sector is often because government doesn’t have a clear understanding of what it wants to purchase at the beginning of the process, she says. This means it has also been bad at encouraging innovation, argues Murray. “The government hasn’t gone and found anything new and different.”

It is for precisely this reason that pretender engagement is vital, says Murray. “The cabinet office has been really encouraging procurers to talk to companies before putting procurements out to help them understand a bit better,” she explains.

The cabinet office’s Stephen Allott, who is the crown representative for SMEs, says that pre-procurement engagement works both ways. “SMEs need to be part of the conversation,” says Allott. “When the government is deciding what they want to buy and setting the specifications, having informal engagement with that process [is key],” he explains. “Quite often there are PINS (prior information notices) which are published explaining how businesses can get involved with that process so that they can engage with the early stages of procurement.”

Richard Bennett, co-founder and MD of Updata Infrastructure, a WAN and managed services provider to local authorities and

government, says the importance of building relationships with potential government clients cannot be over-emphasised. “If you see a tender that’s come out and you haven’t spoken to that customer beforehand, then don’t waste your time,” he says. “If you want to improve your win rate, the best thing you can do is talk to customers before they come out to tender.”

One of the advantages of bidding for government work is that information about the contract is usually readily available under the freedom of information act. “You can glean a lot of information about who the current supplier is, how much they’re being paid, when’s that contract coming to an end, what’s the likelihood of an extension, or what’s the extendability of the contract,” explains Bennett. “In our sector there’s quite a lead time between getting replacement from one to another, so we would probably be out there talking to the

28

“SMEs that are new to government [contracts] don’t realise that the tender process is like taking an exam. You can be the best at doing something in the world, but unless you put the answers down on paper during the exam, you won’t get any marks” Stephen Allott, crown representative for SMEs

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ANALYSIS

“Run it as a cost; run it at a loss. But do the most exceptional job of it to get the most exceptional government reference. Then the following year you can win four or five contracts” Jamie Waller, founder & CEO of JBW Group

procurer about two years before the contract was scheduled to come to an end,” he says.

Another piece of advice offered by the technology entrepreneur is to ensure that the team tasked with managing the relationship isn’t overly pushy in their approach. “It’s about being consultative, not trying to sell,” he says.

“The sales people we’ve had to let go of have been the ones who wanted to push something down people’s throats and were lacking the consultative side.” Taking a different approach to that which would typically be used in the private sector has certainly helped bolster Jamie Waller’s business, JBW Group (see box).

Once small firms have mastered the right approach, they need to make sure they are doing their utmost to secure the best score on the tender documents. “SMEs that are new to government [contracts] don’t realise that the tender process is like taking an exam,” explains Allott. “You can be the best at doing something in the world, but unless you put the answers down on paper during the exam, you won’t get any marks. SMEs have got to learn how to do these formal processes,” he says. What’s more, if small companies don’t have this expertise in-house, they should seek external guidance, Allott

urges. “Bring your tendering skills up to first-class standard by getting help.”

As with many things in business, getting a foot in the door is the hardest part.

Not least of all because many procurers will want government references.

Therefore, winning the first government contract, however small, could be the beginning of a new, lucrative, phase in your company’s history. “When you get your first contract, forget about profitability,” says Waller. “Run it as a cost; run it at a loss. But do the most exceptional job of it to get the most exceptional government reference. Then the following year you can win four or five of them.”

But there is only so much small firms can do themselves – they also need a steer from government. And since Allott took up residence at the cabinet office last february, he has had a firm hand on the tiller. One of the landmark changes was the introduction of the ‘mystery shopper’ initiative – a way for SMEs to raise concerns about public procurement processes. “Suppliers can report directly things they think are not going right and the cabinet office can intervene and do something about it,” explains Allott.

There have been other changes that have attracted less attention. One of the biggest barriers to entry for many SMEs historically was the requirement of three years of audited accounts in order to show the supplier had the financial prowess and sustainability to handle large contracts. This is no longer a requirement for central government contracts, says Allott. “That’s not a rule anymore, so

if your readers see examples where they’re still being asked for three years of accounts, they can report that to the mystery shopper service.” Another rule dictating that companies’ turnovers needed to be four-times the contract size has also been jettisoned.

“Again, if readers come across financial thresholds, they can report that to the mystery shopper service and we’ll get it changed.”

Whilst there weren’t any figures available at the time of going to press as to whether or not the number of government contracts being awarded to SMEs have improved, certainly, the headlines seem to suggest that things are looking up: at the end of 2011, Yorkshire-based Redfern Travel was awarded the government’s domestic travel contract worth £1.1bn over 15 years. And more recently, Leeds company Calder Conferences beat off stiff competition to secure the contract to manage central government meetings, thought to be worth £10-12m.

But what’s the word on the street? It’s true to say that opinion is divided – and often not in government’s favour. Waller, Taylor and Bennett are all fiercely critical of a process they see as being wildly outmoded and unnecessarily complicated. But there are rare voices of support for the cabinet office’s attempts to make SMEs’ lives easier. “This really is a time of change,” says Sara Murray.

“There is now a whole team of people who have commercial backgrounds and know where the want to take the government procurement process to make it easier for SMEs.” Nonetheless, Murray is hesitant to suggest that the government will meet the target it set itself of 25% of public procurement to be from SMEs by March 2015. “I agree that they’re likely to be way off target,” she admits. “But if you don’t set targets, you don’t get anywhere.”

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January 2013 www.elitebusinessmagazine.co.uk

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18/12/2012 10:32

FINANCE

the price is right

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Once upon a time, pricing products and services was comparatively easy. But now, making sure you’re giving the right price involves a lot more thought

WORDS: JOSH RUSSELL

P

ricing your products or services isn’t as simple as pulling out a pricing gun and covering things in sticky labels.

Knowing what to charge and how to approach pricing is becoming increasingly complex, with competing companies often charging wildly different figures for their products and solutions, meaning that developing an appropriate pricing model for your enterprise can be a bit of a struggle. Which is why it can help to have a little expert advice to cut through the treacle.

While it’s a complicated area, there are a few simple guidelines that will always apply. “You can never see pricing as disconnected from your product, your technology and what you’re doing,” says Christian Lanng, CEO and co-founder of invoicing platform Tradeshift. It may be an incredibly appealing option to pull a Facebook, making your service free to the end user and generating all of your revenue

through advertising, but is this really appropriate at a stage when you have limited traffic and need rapid liquidity? Often what is needed is an awareness of the how pricing models build in sophistication and complexity.

The European Pricing Platform (EPP) is an international knowledge-sharing platform, aimed at sparking conversations around pricing and profit-optimisation management.

President Pol Vanearde believes the key focus must be around what they term the ‘pricing maturity level’. “We have explored different kinds of industries and companies and we’ve seen four different levels,” he explains. The first level is cost plus – looking at how much the product or service costs them, the organisation simply adds a margin, largely based on comparing prices with the competition. Level two is about improving the profit this makes and beginning to make use of available transactional data.

www.elitebusinessmagazine.co.uk January 2013

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FINANCE

“An average-sized company may have 5,000 customers, they may sell 200 products, they may sell through two or three distribution channels including their website.

That’s three million different combinations of pricing and selling decisions that need to be made” Patrick Schneidau, vice president, PROS

33

“The company tries to optimise its portfolio in order to sell the right products to the right customers at the right price,” says Vanearde.

“They also try to find margin improvement and start margin improvement projects.

“The next step is trying to get full value capturing,” he continues. “You start to move on from cost plus.” This third level is when an organisation truly prices its products based on their value to the consumer, rather than on their cost. At this point, price improvement requires more of a dedicated journey than simple improvement measures. “It’s a real change process to develop the pricing maturity in the organisation.” Lastly, the fourth level involves not just considering your revenue streams as a mere result of your pricing, but actually considering the structure of the whole revenue model in relation to the ways you can price your product. “An example is Michelin, which no longer sells tyres outright and, instead, is being paid per tonne carried, per landing or per kilometre,” says Vanearde.

“These are the kind of new revenue models that are linked to new pricing models.”

Easy enough to say but all of this requires a huge amount of knowledge about your current revenue streams. Patrick Schneidau, vice president of product marketing at big data analytics firm PROS, puts the enormity of this

task into context. “The average-sized company may have 5,000 customers, they may sell 200 products, they may sell through two or three distribution channels including their website,” he says. “That’s three million different combinations of pricing and selling decisions that need to be made.”

This is obviously an overwhelming amount of data to work through and when using more traditional, rule-based pricing models, companies often found that it was almost impossible to keep track of such a detailed picture. “Companies started to build up all these business rules around pricing and it just got too complex for any one person to understand how all those rules affected profitability,” Schneidau explains. “You have to take a step back and say: ‘There’s got to be a way to handle this complexity.’” Which is where EPP’s journey to develop pricing maturity comes in, allowing companies to begin to approach their pricing in more sophisticated, granular ways. Schneidau remarks: “It’s important to use the data to understand the market from a customer point of view, using value-based pricing and giving specific price points to specific customers.”

But where do newer models fit into this?

Technological innovation is reciprocally driving revenue innovation forward and

January 2013 www.elitebusinessmagazine.co.uk

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FINANCE

The models Simple & scaleable Joanna Fwash, sales & marketing director at Moneypenny

What we do is answer the telephone for lots and lots of businesses, ranging from small one-man-bands right up to big multinational corporations. Where we’re different is we give companies their own dedicated Moneypenny receptionist. For me, the issue of pricing is key because you’re trying to keep everyone happy along that scale.

There are an awful lot of people in the marketplace who win business on price but we just don’t want to be seen as playing in that field. What that leads to then is a very clear cost price model, so that the customers are very clear, right from the outset, what their pricing will be. There are no hidden extras. There’s no surprise when they get their invoice. It’s all scaleable and very much based on the call volume.

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Two-sides to every market Christian Laang, CEO and co-founder at Tradeshift

In our space, which is the electronic invoicing space, the dominant price model for the last 20 years was that the supplier would pay for it and the buyer would pay very little. But that doesn’t work for anyone. You’re buying a solution because you want suppliers to switch from paper to electronic invoicing, but the business model was built in the way that you’re in essence fining the people whose behaviour you want to change. What we went in and did is, we said: ‘We make it free for suppliers and make buyers pay.’

It’s a two-sided market model, where you get one party to subsidise the cost for the other party because it’s in their interest. What Google has done with search is a very clear example of a two-sided market model because it has advertisers who will pay for Google running a service to another group of people.

We’ve found it’s in the interest of the large buyers and large organisations to subsidise billing and invoicing software for small companies for free because that means they can get electronic invoices rather than paper ones. It’s a model that really works.

providing new systems, such as the recent trend in software to work on a ‘freemium’ model. “Freemium became really big two years ago,” says Tradeshift’s Laang. “The idea is that most users can start out for free and later they can pay if they want more services.” But while, like many an innovation, it has caught organisations’ imaginations, it is a mistake to let its novelty blind you as to whether it really is the most appropriate model for your solution. As with all models, the freemium model has both positives and negatives and these need to be taken into account. Laang points to one of the model’s major flaws. “You’re locking away those features that you think will make your user pay behind a paywall,” he explains. “Suddenly you’re taking the best part of your applications, that should make users love and use your product regularly and locking them away.”

Ultimately, one of the aims of getting your pricing model right is going to be making your organisation competitive. However, this isn’t really just a case of undercutting your competitor’s, prices – instead you need to consider how much value your customers are going to place in your individual provision. “You really have to think truthfully how your pricing model and the way you’re disrupting the market align with the value of your business,” says Laang. This is something Scheidnau concurs with. “A lot of companies underestimate the value of the relationship, of the service they give, of their differentiated product capabilities,” he remarks.

“While you want to take in some of the competitor price information, it shouldn’t be the sole decision criteria out there.”

January 2013 www.elitebusinessmagazine.co.uk

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FINANCE

37

enduring spirit

In 2010, Anthony Thomson opened Metro Bank, the first new high-street bank in more than 150 years. It’s now worth a cool £1bn – but the serial entrepreneur isn’t ready to rest on his laurels just yet

WORDS: HANNAH PREVETT

An

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nthony Thomson has good reason to be happy with his lot. Having founded three businesses – one of which is Metro Bank, the first new high street bank in a century – Thomson would be forgiven for wanting to spend less time working and a little longer in his prized wine cellar. Yet he is doing no such thing.

The co-founder of Metro Bank has recently stepped down as chairman in order to start a new business, but he’s tight-lipped about his latest venture (he assures me he’ll be able to tell Elite more in February). “People used to work five days a week until they were 65 and then they would stop and do nothing – I think those days are behind us,” says Thomson. “I think the period between working flat-out and not working at all will be longer and more nuanced.”

It would be understandable if Thomson wanted to take a break for a couple of months. Apart from six months off after selling his previous business (and that was supposed to be 12, but he says he got bored), the affable northerner has grafted non-stop since leaving school at 17 – before completing his A-levels. “I wasn’t very good

January 2013 www.elitebusinessmagazine.co.uk

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FINANCE

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at school,” he admits. “I didn’t really get it.”

His first job was selling advertising for the Newcastle Evening Chronicle. “I had lunch recently with Richard Desmond and we were reminiscing because that’s how he started out too, selling advertising. He says the only difference is he hasn’t stopped.”

When he was 29, Thomson traded the north-east for the Big Smoke to work for Sun Life Financial of Canada. He clawed his way up through the ranks, until, by the time he left, he was sales and marketing director. That was 25 years ago – and was the last time he was employed by an organisation that he didn’t set up himself.

In 1987, Thomson started his first business: City Financial Marketing.“It was an advertising and marketing agency that specialised in financial services,” says Thomson. “And what made it unique was that, in addition to all of the normal advertising, creative and communications skills, we also had a very big compliance and actuary department.”

Thomson learned some vital lessons in the early days of his first venture. “You very quickly learn the value of money when you start a business,” he says. “The first lesson every entrepreneur learns is that it’s not profitability, or a lack of profitability that kills you, it’s lack of cashflow.” In the next decade, he grew the organisation to 100 people before selling it to advertising agency behemoth Publicis in 1998.

After the previously mentioned attempt at some time off, he founded the Financial Services Forum, which is a membership organisation for senior executives in financial services. Today, the FSF has 400 members, and is still chaired

by Thomson – he ran it until he began work on the project that became Metro Bank.

“I had an idea for a new bank,” recalls Thomson. “I’d seen this great model in America at Commerzbank, so I approached a guy called Paul Heston, who was the retail managing director at Lloyds at the time. And, in July 2007, Vernon Hill, who is the founder of Commerzbank and was forced to stand down, told me he was interested in getting involved. So he and I became the two founders of Metro Bank.”

Metro Bank opened its doors in July 2010. To this day, all the vital signs are positive – in November this year, the bank secured a further £126m in funding (taking the total raised to more than £250m) and there are plans to open a total of 200 branches by 2020.

So why did Thomson decide to stand down now, while things were in full flow? “It was

“Once you’ve made your first million – or the first five million – the money ceases to be relevant.

Other things become more important”

never my intention to chair a public company,” says Thomson. “I said to the board in June that I wanted to step down no later than March of next year, and then I announced in September that I actually wanted to step down at the end of 2012. And that’s what I’m doing, because I want to create a new business.”

Much is often made of entrepreneurs’ qualms about handing over the reigns – not a concern shared by Thomson. “There is a great team of people running it; they absolutely get the model and they get the culture,” says Thomson. “There are people in that bank today who are more passionate about it than I was as the founder.”

This isn’t to say that Thomson doesn’t think of the project with immense fondness. “I’m very proud of the bank,” says Thomson. “It’s the first bank that genuinely puts its customer first.

Metro Bank for me is about creating something very, very powerful, and it will outlive me.”

Thomson got his real sense of mortality recently. But it wasn’t having stared death in the face during a horrific skiing accident, or while riding his superbike. No, it was when he was participating in one of his favourite hobbies: wine collecting. “I bought a case of wine a year ago, and when I got it home and read the review it said: ‘This is a fantastic wine; don’t drink it for 25 years’.

I’ll be in my 80s by then; I’m more likely to be drooling than drinking.”

This also prompted Thomson to consider his legacy. For him, this goes beyond another car, or another house. “My perspective on money changed over time. Originally, money was really important to me, or at least I thought it was. The reality is, it isn’t. I’d like to think I have a very pleasant lifestyle, and it’s important to me that my family are looked after. But once you’ve made your first million, or the first five million – the amount varies from person to person – the money ceases to be relevant. Other things become more important.”

Something that Thomson places great emphasis on is maintaining an equilibrium between work and home. “Work/life balance is incredibly important to me,” he says. “I go through phases of being balanced and phases of being imbalanced. I often work more than I like to, but that’s what happens when you’re setting up businesses. In a year or two, I’ll get back to a better work/life balance, I hope.”

In the meantime, he has his favourite hobby to fall back on, when time allows. “I do enjoy my wine,” he says. “Life is just too short to drink shit wine.”

www.elitebusinessmagazine.co.uk January 2013

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FINANCE

Know your overdraft options Applying for an overdraft needn’t be arduous. Clive Lewis gives us the lowdown on how to make the process as hassle-free as possible 40

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tart-up businesses are continuing to find it difficult to get debt finance, particularly bank loans and overdrafts. At this time of year, many companies are looking for short-term finance until business starts picking up. Clive Lewis, ICAEW head of enterprise, looks at what businesses need to think about to ensure that they are not turned down.

Firstly, ask yourself if an overdraft is the appropriate finance option for your business?

An overdraft is a borrowing facility attached to your bank account, set at an agreed limit. It can be drawn on at any time and is most useful for your day-to-day expenses as it can help you to manage your cashflow more flexibly. It is worth noting that loans are probably more appropriate for long-term funding. An overdraft is likely to cost more than a loan for a long-term purchase.

In some circumstances invoice finance may be more appropriate, although it is only available for business-to-business sales. It offers ways to access working capital by unlocking the value of invoices, although interest rates and charges apply on the cash advanced. Invoice discounting allows you to draw on funding secured against approved invoices, while in factoring you can sell invoices to your financier.

Advantages of an overdraft

• An overdraft is flexible - you only borrow what you need at the time which may make it cheaper than a loan.

• It’s quick to arrange.

• There is not normally a charge for paying off the overdraft earlier than expected.

Disadvantages of an overdraft

• If you have to extend your overdraft, you usually have to pay an arrangement fee.

• Your bank could charge you if you exceed your overdraft limit without authorisation.

• The bank has the right to ask for repayment of your overdraft amount at any time, although this is unlikely to happen unless you get into financial difficulties.

• Overdrafts may be secured against business assets.

• Unlike loans, you can only get an overdraft from the bank where you maintain your current account. In order to get an overdraft elsewhere you need to transfer your business bank account.

• The interest rate applied is nearly always variable, making it difficult to accurately calculate your borrowing costs.

• Unutilized overdraft facilities may be reduced by the banks at short notice, although this is unlikely to happen unless you get into financial difficulties.

An overdraft can help you manage day-to-day spending, and may be particularly useful if the cashflow of your business varies a lot, whereas loans are usually more suitable for funding specific investments. Before you approach your bank for either an overdraft or a loan,

you need to do some preparatory work.

You need to have a clear idea about how much you want to borrow, what it will be used for, and how it will be repaid. You will need to support your application with information that the bank will request, and which will include your financial records, business plan and details of any security offered. You will need to have a clear idea about your requirements and be able to talk about your longer-term plans, so that the bank will appreciate their role in your business now and into the future.

Any bank will base its decision on the information supplied by the business. Dependent upon the amount of the overdraft sought, this could include management accounts, cash flow and profit forecasts, details of any assets, a business plan and past financial reports. When applying for an overdraft, monthly cash flow projections showing how the overdraft will be utilized, and, ultimately paid off, is key.

A previous poor track record in paying back lending will count against you. It is also important that if you are a business with a troubled history, such as adverse data (bankruptcies, CCJs), you are transparent with what went wrong and have put in place measures to ensure your record is now clean.

www.elitebusinessmagazine.co.uk January 2013

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21/12/2012 14:45

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SALES & MARKETING

The gift of experience Promoting customer experience is about more than just fending off dissatisfied consumers.

Taking care of customers is actually the best way to boost the value of your brand 43

WORDS: JOSH RUSSELL

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tereotypically, customer service might conjure up images of a packed call-centre fielding customer complaints – and for some enterprises that’s where considerations begin and end. But this fails to take into account the huge value customer experience can have in promoting your brand. Recent research conducted by providers of customer service technology Verint across EMEA and North America found that 45% of consumers felt that quality service was actually more important than price. Steve Rosier, Verint’s director of analytics, EMEA, gives his perspective: “What customers are telling us is: ‘A lot of times we’re not actually shopping around for price, it’s a case that we want to feel respected, loved and that people are listening to us’.”

Scott Cook, the co-founder and chairman of the executive committee of Intuit Inc, once said: “Instead of focusing on the competition, focus on the customer.” This underlines what makes managing customer experience so important.

January 2013 www.elitebusinessmagazine.co.uk

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SALES & MARKETING

“Customers are happy to go to brands or go to organisations that give a higher level of customer service” Jo Causon, chief

executive, Institute of Customer Service (ICS)

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“You can copy products,” comments Jo Causon, chief executive of the Institute of Customer Service (ICS). “The only thing you can’t copy is the service experience that you deliver.” She feels there is a very concrete correlation between the way customers are treated and the public perception of a brand, something that can quickly impact upon an organisation’s revenue streams.

To illustrate this point, Rosier uses an example of an insurance company Verint worked with. “Its marketing department said: ‘We need to compete on price,’” he recalls. “‘We’ve got a lot of churn, a lot of customers leaving us so therefore we need to be as cheap as our competitors.’” Which would be a fair assumption to make. But, once Verint began looking into calls and customer conversations, it found that price wasn’t the issue – the company had loyal customers who were happy to pay for a quality service. The issue was that its consumer-base weren’t happy with changes made to service provisions. “They were thinking that they needed to compete on price but actually they’d got the service completely wrong,” says Rosier. “They’d not consulted the customer at all; they’d just forced the changes upon them.”

One of the biggest mistakes organisations make when dealing with customer experience is they believe it is simply a case of dealing with customers that are actively disgruntled, not recognising that there is a large proportion of their customer-base that – while not actively unhappy with the service they’re receiving – could easily switch to a rival.

“Customers are happy to go to brands or go to organisations that give a higher level of customer service,” Causon says. Rosier also feels this poses an issue, highlighting a worrying figure that suggests 26% of consumers have no strong ties to their service provider. “This is easy pickings for competitors to come along and scoop them up,” he remarks. “They could take that 26% and the percentage of people who are complaining as well.”

Joan Gurasich, senior director at customer relationship analysis firm Net Promoter concurs that merely having a satisfied customer is not enough. “Customer satisfaction is necessary but not sufficient,” she says. Deflecting complaints pales in significance when compared to the potential benefits of having a loyal customer base.

“Actual customer loyalty means that a customer buys more products, they’re more efficient to do business with and they tell their friends.”

It is clearly true that you shouldn’t underestimate the damage that a dissatisfied customer can do to your brand. Particularly with the increasingly borderless communication aided by advances in technology, you can’t hide away from cases where your customer relationship management fails. “Now, with social media, if you make a customer unhappy there’s going to be a lot more people who hear about it,” comments Rosier. “It’s going to retweeted and shared.” But it is when you start to realise that these public avenues offer more

www.elitebusinessmagazine.co.uk January 2013

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SALES & MARKETING

“You’re not having to go out and solicit feedback – customers are willingly giving it – but without the analytics in place you have no idea.”

Steve Rosier, director of analytics, EMEA, Verint

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opportunities than simply fielding complaints that managing customer experience becomes much more rewarding. He continues: “If you can get it right across all channels you can actually turn those customers into advocates.”

And for Net Promoter this is the ultimate goal of effective customer management. “With Net Promoter you both recover detractors and you mobilise promoters,” explains Gurasich.

A company should always aim to be looking to nurture its customer base and value them as promoters in their own right. “If someone you deal with is a promoter, they’re going to tell their friends and you’ve got really positive revenue streams,” she says.

But how do you go about developing this sort of culture? As in all relationships, building a rewarding connection with your customer is down to two things: listening and remaining open.

“Listening is the most important element,” says Gurasich. “Actually doing the analysis.”

Making use of tools such as Net Promoter allow in-depth analysis of your customers’ feedback and break down perception of your brand by product or region. One of the examples Gurasich points to is that of self-publishing platform Blurb. As she explains: “They do the analysis lots of different ways and they do different kinds of improvements.”

What often escapes organisations’ attention is just how wide an array of information their customer base is providing them. “A lot of organisations have got call recording in place but they might listen to 2% of those calls,” says Rosier. By contrast, with speech analytics, an organisation such as Verint is able to harvest information from thousands of calls and make the most of the feedback the customer is providing. This can quickly identify where an underlying problem lies and ensures you aren’t left in the dark. “You’re not having to go out and solicit that feedback – customers are willingly giving that – but without the analytics in place you have no idea.”

But the knowledge alone won’t improve your reputation if you’re seen as being incommunicative or uncooperative. “We’ve just done a piece of research at the Institute called ‘the future of customer service’,” comments the ICS’s Causon. “One of the key tenets that came out of that was about trust and reputation.” Being open and transparent about issues and communicating directly with the consumer can help them feel as though they aren’t being kept out of the loop and are being respected as an individual.

Causon believes it’s ultimately down to the emotional intelligence the organisation displays – rather than treating a customer like a number, an enterprise should show it

recognises its customer as an individual.

“Even if the outcome isn’t what I want it to be, I want you to show empathy and I want you to connect with me.”

Part of this is down to overly rigid processes.

If staff aren’t given a degree of autonomy and encouraged to make decisions, it is very difficult to overcome systemic issues that a customer may be having. “I think this is what’s frustrating customers,” says Rosier.

“You’re ported around the business, you speak to four different people and you don’t get the answers you need.” While it is very important an organisation protects themselves from excessive risks that come from not giving staff sufficient frameworks to work inside, failing to empower staff to actually resolve issues can create a hugely frustrating situation for the customer.

Fortunately, engaging directly with customers and ensuring their experience is at the heart of the journey has never been easier.

“Technology has really made it faster, better, cheaper,” says Gurasich. Elements such as social media and improved analytics tools are allowing organisations to remain in contact wherever the consumer is and make them feel like they are at the core of the experience. She concludes: “With these tools you can form a connection with the customer and turn it into something they feel strongly about.”

www.elitebusinessmagazine.co.uk January 2013

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21/12/2012 15:01

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SALES & MARKETING

English: one size doesn’t fit all 48

More SMEs are doing business abroad than ever before. But with great power comes great responsibility. Author Fiona Talbot imparts some advice on how to articulate yourself more clearly – no matter where you’re selling your wares

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urrently, English is the most used language in business today. Great, isn’t it, for us as native English speakers? The language ‘belongs to us’, right?

Others ‘borrow it’ as the ice-breaker language and wherever we go on holiday abroad or whenever we try to negotiate a deal overseas, English is often the language used.

But wait a minute. Just think about it: if you count up the number of people worldwide who are using English as the language of commerce, what do you find? Most (by far) are non-native speakers.

The upshot is that, in the global context of things, the way we use English has to depend on the cultural, social and professional backgrounds of our readers, customers and target audience. One style of English won’t suit all. The world may seem a smaller place, but that doesn’t mean the way people conduct business doesn’t differ enormously depending upon geographical location.

Thanks to the reach of websites, blogs,

“The world may seem a smaller place, but that doesn’t mean the way people conduct business doesn’t differ enormously depending upon geographical location”

WORDS: Fiona Talbot

Facebook, Twitter and social media generally, even the smallest start-ups now have the potential to go global. Alongside the bigger players, it’s time for everyone to reap the benefits these developments bring.

In the run-up to the new year and new resolutions, in November 2012, the Wall Street Journal ran an article listing clear communication and an ability to create connection through personal branding as the top two must-have business skills for 2013.

Unsurprisingly, the advice went viral. That’s the power of digital. We would like to add our two penneth worth here, to help you kick-start your communication success for 2013.

www.elitebusinessmagazine.co.uk January 2013

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SALES & MARKETING

Give yourself the advantage by understanding: • In today’s world and with the advent of the new social media, eg Twitter, ‘simple is the new smart’.

• You should ditch the waffle.

• If you want to use idiom or slang, think carefully first. What might work for a local market might be misunderstood globally. It might even cause offence.

Tip 3 Make the right impact

Tip 1 Decide your business-writing objectives in the digital age 50

Writing is the key communication medium today (think about emails, websites, social media, as well as more traditional writing, such as reports, manuals, brochures and presentations etc). Every company relies on written correspondence to some extent – yet how many are systematic about writing really well?

Gain the upper hand by: • Working out in your head what you hope to achieve before you write. If you don’t know where your writing is leading, you can’t expect anyone else to either.

• Understanding you have the power to choose the words you write and choose the right ones to get the results you need.

• Realising that you won’t communicate your your objectives professionally if you don’t send out the right information, which also means mistake-free communication that reflects a quality corporate image. So use spell and grammar check every time and, if in doubt, ask for help. To do so is a strength, not a weakness.

Tip 2 Be clear, use words that people will understand

In a time of information overload, you need your voice to be heard above the noise. You will get your points over clearly by highlighting them concisely to readers.

A good structure can help your words stand out. Also, if you write a sentence of more than 40 words, you’ll find a high proportion of even native English readers have to go back and reread it. So, shorter is usually better.

“In a time of information overload, you need your voice to be heard above the noise”

The great news is that every piece of writing you put out has the potential to showcase your talents and brand you (a smart career move), as well as highlight what’s good about your organisation.

The bad news? The reverse is also true if you don’t make the right impact. So: • Use words that your readers like to see (so the words engage them) or need to see (if you are selling solutions, for example). Examples of impact words people might like are: new, advantage, easy, help, cost-effective – basically, these words highlight the benefits.

Examples of impact words people might need to see are : ‘can you afford not to’, ‘avoid risk’, ‘minimise your liability’.

• Break down chunks of text into bitesized portions – with interesting captions.

It can make all the difference between boring readers or engaging their interest.

Tip 4 Write with customer focus

Think as if you were in the reader’s shoes and write from their perspective if you can. Also, remember: not all customer complaints about writing are about unprofessionalism and sloppiness. Lots are about abrupt tone or, at the other end of the scale, over-familiarity or lack of respect (often cultural considerations you need to factor in). So: • Let your communication show that you care about your readers. Use pleasant words and ‘people’ words such as ‘you’, ‘we’ etc.

• Cut out jargon that they won’t understand – and that can actually create barriers • Understand how the personal touch can boost the customer experience These are just some tips from the helpful new self-development and office handbook Improve Your Global Business English by Fiona Talbot and Sudakshina Bhattacharjee.

www.elitebusinessmagazine.co.uk January 2013

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Multitasking can sometimes be overrated as an efficiency tool.

Learning to step out of the multitasking mindset from time to time can actually help you deliver work on time – without compromising on quality

WORDS: JOSH RUSSELL

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or decades, businesses have regarded multitasking as the one of the building blocks of productivity.

But increasing attention is being paid to its downsides. Research conducted by the Michigan State University has found that trying to balance too many tasks can contribute to social anxiety and depression and designer Paolo Cardini recently sang the praises of ‘monotasking’ in his TED talk.

“I think the power of focus is so crucial to achieving quality,” says the founder and managing director of houseshare site Capital Living, Adam Goff. “It would be hard for anyone to deny that.” The majority of start-ups, by necessity, are reduced to firefighting in order to ensure everything is completed. In its early days Capital Living was certainly no exception to this, as it was facing limited staffing and huge customer demand.

“We were definitely in a firefighting mode,” he says. “But what we’ve worked very hard on since then is creating an organised flow.”

Bringing order to the chaos of the modern workplace may not seem like the easiest thing to achieve. You can never totally eliminate all distractions – instead you need to accept that they are an inevitable part of the workplace. “You are going to be distracted,”

Goff remarks. “No man is an island.” He feels part of the problem is that often people focus on the wrong goals. Productivity in the modern workplace is associated with clearing all your emails and reducing the amount of paper in your in-tray – something which is inevitably going to very quickly become a losing battle as anyone can tell you that the next batch of emails will be just around the corner. “It’s quality not quantity,” he says. “Don’t panic whilst you’re doing a task that the workload builds up. Focus on one thing at a time.”

A point that Shaz Smilansky, the co-founder and creative director of experiential marketing company Blazinstar, agrees with. “Where people often go wrong is they believe you have a certain number of things and it’s about getting everything done.” Our idea of multitasking is so prevalent that it can often be tempting to just throw in every task at one end and attempt to churn through everything, regardless of whether that is the most productive way to achieve our aims. “Instead you have to focus on setting priorities and enabling you and your team to work smarter and more productively.”

www.elitebusinessmagazine.co.uk January 2013

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21/12/2012 14:58

PEOPLE

Part of this means accepting that you don’t work at consistent productivity throughout the day. Something Goff relies on here is the Pareto principle, which dictates that usually 80% of the results of something come from only 20% of the input. “It’s trying to recognise in yourself first where your 80 / 20 comes from,” he says. “There’s a lot of unfocused time that doesn’t amount to much – the quality comes from a very small amount of your time.”

To this end he believes the best way to prevent organised tasking from bleeding

“Don’t panic whilst you’re doing a task that the workload builds up. Focus on one thing at a time” Adam Goff, founder & managing director Capital Living

into reactive firefighting is to actively plan for both focused monotasking and more open multitasking. “We allow ourselves to do organised multitasking at certain times of the day and the week,” he explains. There are many periods during the working week – whether that be dealing with payroll or reviewing their advertising – that require staff to juggle several things and actively planning for these periods can help to differentiate between this multitasking time and more focused work. “They might be multitasking those tasks but it’s regular and they know what multitasking they’re going to have to do.”

Effective planning forms an essential part of task management. Whilst nobody particularly enjoys diarising workloads, there are simple methods you can use to ensure you’re taking into account your most urgent priorities on a day-to-day basis. “The one that I would champion is setting an ‘ABC’ system,” says Smilansky. The highest priority tasks are A tasks; these are the tasks that have the most far-reaching consequences if they are missed,

with B and C tasks being of lower and lower priority. “You first plot all of your As into your diary for that day,” she explains. “If you have time left, then you slot things in from the B list.” This easily helps you analyse which tasks are essential and ensure that nothing urgent slips between the cracks.

However, there is one element of office working these days that often refuses to conform to the best laid plans. Emails have become an integral part of work and yet whilst they assist with all manner of daily tasks, they can end up being a real productivity drain. “People spend a huge amount of their time reacting to emails,” Smilansky comments. “Essentially it’s a very unproductive way of working.” It can help to plan in time to deal with emails and not allow them to become a disruption during periods of focused work. As Goff concludes: “You can answer the phone and you can look at your emails at certain points – you just have to build in time when you are allowed to get distracted.”

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January 2013 www.elitebusinessmagazine.co.uk

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21/12/2012 14:59

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PEOPLE

Lighting the way 55

By helping new enterprises find their feet, mentoring can be a hugely rewarding experience – for all involved

WORDS: JOSH RUSSELL

F

or most people, recalling the early days of their first enterprise is likely to conjure up all manner of contradictory feelings. It’s undeniably an exciting time; you have a fresh, bright idea and are packed full of enthusiasm for the journey ahead of you. But, equally, entering the market with no knowledge or experience of running a business can make it a rather daunting prospect. Therefore, sometimes the thought of having someone in your corner who has weathered a few storms can be a very appealing prospect.

Experienced entrepreneurs mentor others for a number of reasons. “One of the main reasons is probably the fact that they’ve actually gone through the pain that the fledgling enterprises have gone through – they know what it’s like,” explains Ruth Lowbridge, executive chair at Small Firms Enterprise Development Initiative (SFEDI). Angel investor and mentor Divyang Mistry adds that there’s also an important feel-good factor. “I enjoy the enthusiasm behind someone’s idea and trying to make it viable,” he says. “I find it just quite an exciting creative process.”

January 2013 www.elitebusinessmagazine.co.uk

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PEOPLE

“I think there are a million and one things that you’re supposed to know but the truth is you don’t. You can’t have all the answers.”

Carrie Green, founder, That Girl Means Business

Founder of That Girl Means Business – a publication dedicated to championing female entrepreneurs – and a mentor in her own right, Carrie Green is no stranger to this thrill, but she can still remember what her first few steps as an entrepreneur were like. “Was I prepared for it?” she says. “No. I didn’t have a clue what I was doing.” Setting up your first business is full of challenges and expecting oneself to be entirely prepared from the off is simply unrealistic. “I think there are a million and one things that you’re supposed to know but the truth is you don’t. You can’t have all the answers.”

Mentors are there to plug this knowledge gap, imparting their experience and helping new entrepreneurs navigate their way through the pitfalls of their first enterprise. Often the best way to view mentors is seeing them as trusted advisors. Green recalls the mentoring session she received with Lord Billimoria, the co-founder and chair of Cobra Beer, after winning MADE: The Change Makers 2012.

One of the key pieces of expertise he provided was the importance of setting up an advisory board of people with a variety of skills. “It’s about putting together people who are more successful than you are, who can give you advice,” she says. “I think that’s a great thing that anyone in business can do.”

57

Entrepreneur Ruth Amos not only invented her product the StairSteady – an aide to help people with mobility problems safely climb the stairs – as a part of her GCSEs but she was also the first winner of the Women of the Future’s ‘Young Star’ award and the youngest person ever to have featured on Management Today’s list of ‘35 Women Under 35’.

Developing her business at this young age she was hardly lacking in enthusiasm, but she still feels that without a mentor it would have been much more difficult to make a success of her enterprise. “Without a mentor or somebody talking to me about what business is like I wouldn’t have had a clue where to start.”

Fortunately, when she was prototyping her product, her school put her in touch with Reg Copeland, an experienced designer, manufacturer and inventor, which was the beginning of a long and fruitful relationship.

He assisted her with everything from patent applications to registering her enterprise as a commercial business. “He didn’t necessarily want to make any money from it,” she says.

“I don’t think he ever saw himself in the mentoring role. He just wanted to help.”

It really is worth considering the mentoring relationship as just that: a relationship. And this means a personal connection between mentor and mentee can be hugely important.

January 2013 www.elitebusinessmagazine.co.uk

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PEOPLE

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“Without a mentor or somebody talking to me about what business is like I wouldn’t have had a clue where to start” Ruth Amos, founder and inventor of the StairSteady

“I’m not all about entrepreneurs and business owners; mothers, fathers, hard working citizens are my ideal client,” says professional business coach and mentor Mark Sephton. For him it’s not necessarily about experience, but the person behind the business idea. “I want to work with those that are free spirited, they want to blaze new trails, develop themselves and grow.” He feels one of the most important factors in this relationship is trust. “It’s a great privilege for someone to trust and respect me with their life,” he says. “I’m a huge believer that people buy from an individual or company because they either like, know or trust you.”

Sometimes the relationship can be like that between a parent and child; a good parent gives their child everything they need to make the right decisions without living their lives for them. “In a couple of businesses I’ve seen things not going quite right and I’d advise the person and say: ‘Look I don’t think this particular technology is going to work out,’” says Mistry. But he’s keen to stress that it’s not about telling people what they should do or making decisions on their behalf. “Usually as long as you just keep an eye on it, it can be a learning experience,” he says. “Founders of businesses can be really determined and they often find a way of making it work that really surprises me.”

With time, the relationship can grow and become much more established. As SFEDI’s Lowbridge explains: “Often what happens is that people will continue a relationship with a mentor but that relationship may change and, for example, sometimes a mentor can become a non-exec board member.” This was certainly the case with Amos’s mentor Copeland; he’s very much become a key part of her business.

“Reg faced the challenges along with me and he became an executive director,” she says.

Whilst it’s important to have someone by your side during these troubling times, as Amos’s case suggests, it really is important to have long-term advice during the good times as well as the bad. “I think this is a culture change in thinking because often advice is sought when something negative is happening to a business,” comments Lowbridge. It’s often easy in business to get carried along by the momentum of things and when things are positive in an entrepreneurial business it’s harder to ask yourself probing questions about

the decisions you’re making. “If you have got that access to a mentor they’re the critical friend that can then pull you back a bit.”

Throughout all of this it might be tempting to see the mentoring relationship as rather one-sided, as though only the mentee learns from the experience, but in actuality it can often help a mentor consolidate their own knowledge. “If I take my own experiences, I’ve actually learnt a lot through speaking with people who were just starting,” remarks Lowbridge. “It takes you back to basics and you start to think about some of the reasons why you set off along that path.” Green also believes this is a huge added benefit of mentoring. She explains: “When I have my meetings with the person I mentor from the Prince’s Trust, because I’m sat there giving her advice, it’s like hearing it all over again.”

Ultimately, picking up additional skills and knowledge can have huge ramifications for your business, and whether someone is just starting out or they have 30 years of industry experience it’s never too late to benefit from someone else’s perspective.

As Sephton concludes: “We’re all a work in progress. You never actually graduate: it’s a lifetime pilgrimage so become a lover of learning.”

www.elitebusinessmagazine.co.uk January 2013

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21/12/2012 14:58

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PEOPLE

TEAM TRANSFORMER Martin Reed CEO

Reed has been at the helm of psychometric testing company Thomas International since 2007, after being appointed as chairman two years earlier. As well as penning this regular column for Elite Business, he is also a founding member of the Buckingham Business First and a fellow of the Institute of Directors.

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New year, new start?

While you may be planning that 2013 is that year you’ll network more/exceed your sales targets/expand into new markets, how many of your employees are resolving ‘This year I will find a new job’, asks Martin Reed

A

fter quitting smoking, joining the gym and losing weight, finding a new job is perhaps the most popular New Year’s resolution. Straight after the Christmas break, the job-hunting frenzy kicks off as employees start to think about the year ahead: where their career is heading, and whether they are actually happy in their current role.

While this mass exodus can strike fear into any employer’s heart, there are steps you can take to minimise staff attrition and make sure your staff are happy to stay where they are. Research repeatedly shows that employees who are dissatisfied in their roles tend to give fairly predictable reasons for feeling that way – and, perhaps surprisingly, it’s not often related to salary.

In a recent survey conducted by salary.com, half of employees said they felt unappreciated, 35% said they needed their employers to set clearer goals and nearly a third of respondents said their unhappiness was a result of not getting along with a boss or manager – all of which are issues that can be addressed fairly easily with the right attitude, the right knowledge and the right tools.

One of the key points to remember, when looking at how to make employees feel appreciated and keep morale high, is to ensure you are communicating with them in the way that they prefer and appreciate what drives them. Each of your staff will have communication and working style preferences, so one of the most important

www.elitebusinessmagazine.co.uk January 2013

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PEOPLE

things you can do to increase staff motivation and loyalty is to try to understand more about your employees’ behaviour – their natural communication style, how they like to work and what drives them.

If you don’t deal directly with your employees, then you need to make sure your managers are managing to their full potential by working with staff, rather than rubbing them up the wrong way. Just because you find it easy to get on with a manager, don’t assume that the rest of the team will as well.

A key element of good management is for line managers to become aware of their own approach to people management and be able to modify it when dealing with staff who have different styles to their own. This will help staff feel more appreciated and minimise misunderstandings. Clear communication and effective leadership can help stop minor issues becoming major problems.

Straight after the Christmas break, the job-hunting frenzy kicks off as employees start to think about the year ahead: where their career is heading, and whether they are actually happy in their current role At Thomas International, our psychometric assessments identify four behavioural traits that influence behaviour in the workplace – dominance, influence, steadiness and compliance. Each individual has varying levels of each trait, but the dominant traits will dictate how that person likes to communicate with others, how they prefer others to communicate with them, what motivates them and what they need for job satisfaction.

There are strengths and limitations associated with each trait. For example, dominant people tend to be direct, forceful and assertive, which is great for communication that is short, to the point

and free from waffle, but conversely they may be poor listeners and their body language might come across as aggressive. Influencers are often persuasive, positive and friendly but they may waffle without focus or direction.

People with high steadiness are likely to be methodical and patient but their single-paced, measured delivery might seem boring to others. Compliant people tend to be logical, accurate and precise but their communication might be so tightly packed with facts that the listener is overwhelmed. By recognising that other people in your organisation are likely to be led by different behavioural traits enables you to become aware of the differences, appreciate the dissatisfaction that can arise from mismatched behavioural styles and learn to adapt your style of delivery to suit the person you are addressing.

Perhaps the 35% of employees who wish their employers would set clearer goals have a behavioural preference for steadiness or compliance and feel more comfortable with measurable goals, facts and figures – a simple enough issue to remedy once you understand their need for more measured boundaries and something that psychometric assessment can help you to identify.

Likewise, respondents who felt unappreciated perhaps will have high levels of dominance and influence and may be reacting to a lack of opportunity in their current role for sociability, praise, power, influence or feedback, instead of dissatisfaction with the job itself. By factoring in opportunities for them to be more sociable or receive more verbal praise, you will probably find their job satisfaction increases.

Making sure that your staff morale is high by understanding how different people operate at work and responding effectively, and appropriately, will do more for your business than simply lessening the number of staff who are looking for new jobs this January – when a team is working together efficiently, behavioural styles are appreciated, and team members feel understood and valued, your business will be on track for a productive, successful and harmonious 2013.

Half of employees said they felt unappreciated

61 35% of employees said they needed their employers to set clearer goals

27% of employees said their unhappiness came from a boss or manager they didn’t get on with

Survey conducted by salary.com

January 2013 www.elitebusinessmagazine.co.uk

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30/08/2012 18:42

TECHNOLOGY

The

who’s who of UK tech

Blighty has a thriving tech scene. But without a little prior knowledge, it can be difficult to know who the real movers and shakers are.

Luckily, EB is on hand to deliver a bite-sized guide to the most influential people on the tech start-up scene today

A

s a new year dawns, thousands more businesses will be throwing themselves at the mercy of the UK tech ecosystem.

In recent years, London has spawned some of the greatest entrepreneurs of a generation. We’re here to tell you about them and other key influencers who know the difference between survival and failure.

As there are too many to reasonably name in a single feature, we’ve decided to spread our power list over the next few issues for your delectation. So kick back, relax and prepare to be inspired.

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WORDS: HANNAH PREVETT AND JOSH RUSSELL

Michael Acton Smith Acton Smith came up with his first business idea with university pal Tom Boardman.

Together they grew gadget etailer Firebox.com to a multi-million pound business, before Acton Smith left to found online games company Mind Candy. Its first game, Perplex City was a hit among gamers, but a flop financially. But the entrepreneur was to hit the big time with second offering Moshi Monsters.

The online kids social network now boasts more than 70 million registered users in 150 territories worldwide. The Moshi merchandise has proved a real money-spinner for Mind Candy: it is now possible to purchase everything from Moshi branded wrapping paper to a Moshi Monsters album (which just went gold – no mean feat considering it had zero promotional airplay.) @acton

January 2013 www.elitebusinessmagazine.co.uk

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TECHNOLOGY

Wendy Tan White

Julie Meyer Meyer first burst onto London’s bustling tech scene in 1998 when she co-founded business network First Tuesday. After selling the company for a princely $50m (£32m) in 2000, she spearheaded a new model for financing entrepreneurs by setting up investment firm Ariadne Capital with 60 entrepreneurs as founding investors. Since the company’s inception, Meyer has led investment rounds worth £300m and advised tech behemoths such as Skype, Monitise and Zopa. She’s not just good with numbers, either: in her 2012 book, Welcome to Entrepreneur Country, Meyer sets out her vision for an entrepreneur-led Britain in 2020. @JulieMarieMeyer 66

The computer science graduate began her career programming assembly control systems before founding website building company Moonfruit in 2000. With Tan White, her husband Joe White and close friend Eirik Petterson at the helm, Moonfruit weathered the economic storm of the early 2000s. Having scaled back back for a couple of years, Moonfruit re-emerged stronger than ever and by 2012 had build 5 million sites and 230,000 online shops. The company was sold to Yell for £23m in May 2012. @wendytanwhite

Bindi Karia

Polly Gowers

Errol Damelin

‘Queen of start-ups’ Bindi Karia was the UK VC and emerging business lead for Microsoft for nearly five years before announcing a move to Silicon Valley Bank. As you might imagine, she is one influential lady.

She’s been a permanent fixture of the Wired UK Top 100 Digital Power Broker list from 2010 to 2012, was named one of the IoD’s Six Most Connected Women in the UK and spoke at TEDxAthens 2012. As if this wasn’t all enough, Karia was one of the mentors on BBC Three’s Be Your Own Boss.

Gowers is the founder and CEO of Everyclick, a loyalty and fundraising technology company.

To date, Gowers and her team have raised more than £3m for charity. The company’s latest development is Give As You Live, which can turn every purchase made online into additional funds for any shopper’s favourite UK cause, without asking anyone to spend a penny more. The entrepreneur’s philanthropic endeavours were recognised by none other than HRH Queen Elizabeth in May last year, when Gowers was awarded an OBE.

Even if the average member of the public doesn’t know the name Errol Damelin, they’ll certainly be very familiar with his oeuvre. As one of the early pioneers of the online payday loan, his start-up Wonga has revolutionised how we see consumer lending. Not only that, but Wonga shouted Tube transport for every New Year’s reveller in London in 2010 – definitely the sort of techniques needed to ensure your business is an indelible part of the UK tech culture.

@bindik

Brent Hoberman Most famous for founding Lastminute.com with Martha Lane Fox in 1998, Hoberman’s current business, Mydeco.com, a furnishing site, keeps him busy. He has also flexed his investor muscles as one of the founders of Profounders Capital and has recently joined the board of mobile music recognition service Shazam. A nod to his more artistic side, Hoberman is also a governor of the University of the Arts, London. @brenthoberman

@ed_wonga

@PollyGowers

Greg Marsh Marsh is highly decorated; he’s got degrees from Harvard and Cambridge and spent three years at Index Ventures, the venture capital firm behind Skype and MySQL. His enterprise onefinestay helps people find a little taste of home in a strange town by matching them with high-end properties whose owners are away. Additionally, Marsh’s bow has more than its fair share of extra strings – for example, writing for tech, media and politics mag The Kernel. @gjbm2

www.elitebusinessmagazine.co.uk January 2013

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21/12/2012 15:05

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TECHNOLOGY

Jay Bregman After the success of eCourier.co.uk, Bregman took a more lateral approach than his co-founder and decided his next start-up should be based around delivering people rather than post. Transport app Hailo helps match customers with cabs and raised $17m in its series-A funding in 2012. If that’s not impressive enough, in the Times ‘100 to Watch in 2012’ Bregman was judged to be more influential than North Korean leader Kim Jong-un. @jaybregman

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Joe Cohen What this entrepreneur doesn’t know about events is not worth knowing. Having held a senior position at Ticketmaster, Cohen started and ran the international division of dating site Match.com – one of the world’s largest dating sites. He launched ticket reselling company Seatwave in February 2007 as an alternative to grubby street touting.

Now an angel investor and mentor, the tech whizz is a mentor at Seedcamp and a sponsor at Devcamp. It goes without saying he is a huge sport and music fan. Lucky, that. @seatwavejoe

3beards

Alicia Navarro

Oli Barrett

Three wise, bearded men meeting and bonding over a mutual love of beer, beards and London’s start-up technology ecosystem. This kicked off the journey toward Digital Sizzle, the celebrated BBQ and bonding network event for the tech community that has been attended by some of the Roundabout’s biggest stars – such as Mind Candy founder Michael Acton Smith. With their fingers’ firmly on the pulse of technology happenings in the UK, these lads are veritable mines of information and are extraordinarily well-connected.

Describing herself as ‘Spanish-blooded, Aussie-born, London-headquartered and San Francisco-based’, Navarro is a truly international tech champion. Her enterprise Skimlinks helps online businesses raise income using affiliate links and has won a whole host of awards including best new business at the NMA Effectiveness Awards in 2009. Not only has she revolutionised the way content producers make their living, but she’s also put together a pretty convincing treatise on why Buffy of vampire slaying fame is perhaps the archetypal entrepreneur.

This affable chap is so well connected that his Twitter followers count among them none other than US president Barack Obama. Barrett is behind several start-up schemes that provide help and guidance to young entrepreneurs, including the Make Your Mark With a Tenner campaign (now called Tenner). He’s also responsible for the UK’s hi-tech trade missions to New York and Silicon Valley. The former Butlins redcoat’s raison d’etre is connecting likeminded people – and he does it with a smile and grace second to none.

@3_beards; @TremulantDesign; @Bryce_Keane; @JoeScarboro

@alicianavarro

@olibarrett

The journalist...

Tom Allason Online-shopping delivery service Shutl claims its founder and CEO Tom Allason had his first taste of entrepreneurship attempting to make fake IDs. Perhaps not the most showbiz start but he’s made up for it since then. Not content with flipping the world of couriered delivery upside down with Jay Bregman with their start-up eCourier. co.uk, Allason turned his sights on delivery for the e-commerce market with Shutl and achieved plenty of recognition, netting the Guardian’s Breakthrough Technology Award in 2011 and start-up of the year at the 2012 National Business Awards. @tomall

Milo Yiannopoulos To say Yiannopoulos divides opinion is an understatement. When finally given the boot from his column at the Telegraph (it wasn’t the first time), the outspoken hack founded The Kernel when he couldn’t find a publication he wanted to write for.

Celebrating its first birthday back in December, The Kernel is now the go-to location for news on technology, politics, media and a bit of pop-culture thrown in for good measure. A controversial figure, perhaps, but Yiannopoulos firmly cemented his position of power when named one of 100 most influential people in the UK’s digital economy by Wired two years in a row. @Nero

www.elitebusinessmagazine.co.uk January 2013

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21/12/2012 15:05

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TECHNOLOGY

Given the extravagances of Christmas, the new year doesn’t always seem like the best time for increasing your outlay.

But, sometimes, investing in your tech solutions is the best way to save cash in the long term, which is why it’s important to shop smart. Consider us your personal shopper and take a look at the basket of goodies we’ve delivered for your delectation

70

WORDS: JOSH RUSSELL

iMac When the first iMac was released, it was nigh on impossible to imagine squeezing a powerful desktop computer in the same space as a standard CRT. With the latest model, you can’t help feel that same sense of shock. It’s thin. Very thin. Enough even to make the Macbook Air feel a little self-conscious.

And yet for such a featherweight device it packs plenty of punch; the optional breakthrough Fusion Drive, combining the best of flash storage and hard drive, can perform up to 3.5 times faster than a 1TB 7200-rpm hard drive and still brings an impressive 3TB of storage. Not bad given that, at its edge, it’s about as thick as the magazine you’re reading.

www.elitebusinessmagazine.co.uk January 2013

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21/12/2012 14:56

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21/12/2012 09:26

TECHNOLOGY

Streak How many times have you been working on something and realised that vital customer query you meant to follow up on fell beside the wayside? Well, those days are done. No matter what your line of work, the Streak CRM plugin helps sort and track your Google Mail inbox by task, meaning your task management and your emails are no longer arch-enemies.

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FreshDesk Given our article on customer service this month, you may be wondering about ways you can punch up the quality of your customer experiences. FreshDesk is a streamlined solution dealing with support, allowing both customers and agents to raise tickets and providing handy reports on the numbers of issues raised and those resolved. It also works with your customers, allowing them to track their tickets and ensuring feedback provided via social networks doesn’t slip between the cracks.

Asus Taichi Necessity is the mother of invention. Which is why many tech innovators are currently beavering away to create an effective laptop/tablet hybrid. All else aside, the Asus Taichi is definitely the most novel solution to the problem, adding a touch screen to the device’s outer case. Given it also comes with the more desktop friendly Windows 8 Pro and boasts screen sharing options, it certainly offers an interesting solution for those wanting to avoid dual-wielding devices.

www.elitebusinessmagazine.co.uk January 2013

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21/12/2012 14:56

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21/12/2012 16:35

TECHNOLOGY

Damon Segal gives us his top ten tips to ensure your social media strategy helps you stand out from the crowd

S

ocial media is taking over the world.

OK, perhaps not quite, but it is increasingly impacting on our daily lives; from mobilising activists and giving us a sneaky peak into the lives of those on our TV screens, to breaking down the boundaries between Britain’s best-loved brands and those who consume them. What’s more, businesses that are not up to speed on the latest trends are rapidly fading into the background. Ten years ago, social media was an added bonus, something to think about every so often. Today it is a business necessity.

As we move into 2013, the demand for creative, timely social-media initiatives has never been greater.

According to a survey by the Neilsen Company of 305 senior decision makers from UK SMEs, only 57% of small businesses currently utilise social media to help market themselves. That said, it predicts that by the end of next year, firms will spend a significant amount of their digital media budgets on online communication, as businesses start to realise the value of these platforms.

There is so much hype around the need for an effective social-media strategy, many businesses can lose sight of the basics and become embroiled in a plan they neither need nor can afford. With more than 15 years of experience in the sector, Damon Segal, co-creator and architect of Telaeo CMS, advises businesses to make sure they cover the basics and implement these ten key points for success.

Swinging social media 3. Remember: HOC

Keep your content humorous, opinionated or controversial for maximum engagement and reach.

4. Make things easier on the eye

7. Remember to engage

Always try to engage with your audience and influencers. Social media is not a one-sided conversation; find postings you like and comment on them.

Visual content will typically gain the highest level of engagement from an audience.

Using tools such as Instagram adds value to your social-media efforts, and involves no extra cost.

8. Measure effectiveness

5. Use statistics and facts

Remember to tag posts with keywords or hashtags that are relevant to your audience for greater reach. Jump on the bandwagon of current hashtags or keywords; a simple search can reveal these.

People are more likely to share content that makes them look intelligent; statistics and facts are excellent at increasing reach.

6. Add a question

Adding a question to your social posting will encourage an audience to respond. Useful phrases include: ‘did you know…?’ and ‘have you seen the latest…?’

Measure what content works best – if a post gets great virality or engagement, create more content along the same lines.

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9. Find relevant keywords and hashtags

10. Use trackable links

Using trackable links where possible (eg bit.ly, ow.ly) will give you a clear picture of effectiveness.

1. Discuss topics you’re passionate about

Don’t focus conversation on a product or service; instead talk about related topics.

For example, instead of talking about selling football kits and accessories, talk about the game itself.

2. Frequency and quality matter

The pace at which you attract followers is based on the frequency and quality of the content you post. Think about the wording of your content – can it be said in a more engaging and creative way?

January 2013 www.elitebusinessmagazine.co.uk

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21/12/2012 14:56

Concerned about Cloud technology and migrating across?

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Tegen Jan13.indd 1

18/12/2012 09:32

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.

Doing the maths

T

here are certain times of the year that make you take time to stop and look around you; for me, the start of a new year is certainly one of them. Considering what 2013 might hold, I’ve been really thinking about what value for money means to my business and my team.

To me, quite simply, value for money is the amount you spend on a project versus the return you will get from it. If you spend more than you will get as a return (in the long and short term) then the project isn’t worth it. If you spend less than you will get in return, then the project should be considered.

This is incredibly simplistic, and I am almost convinced that you as readers are feeling a bit patronised by me saying this to you. Having said that, in my experience, it is very difficult to judge what return you will see from a new project – and over what period. While I discuss this idea, I’m going to use IT as an example (as it’s what I specialise in), but it is important to note that these ideas relate to all business functions – not just IT. In the IT world, for outsourcing companies, having to tie down a return on a project gives them two disadvantages: 1. If they give you a value, and a timeline, then the logical thing for you to do is insist that their payment is related to this.

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After a brief hiatus, our tech expert David Hathiramani is back with his methodology for making sure the numbers stack up on new projects

January 2013 www.elitebusinessmagazine.co.uk

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TECHNOLOGY

“The more you do something, the more you can look back at what’s worked previously, and what hasn’t worked so well and refine your guesses – eventually, you can be very precise”

2. They know that they can’t price any higher

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than this total value.

It is difficult for employees to be able to think about ‘value for money’ too. It’s quite rare to have an in-house IT team like we do here at A Suit That Fits. And if you do, the chances are that the employees have come from an outsourcing company themselves and it is another skill to ensure projects are carried out in ‘value order’, as I like to call it.

For every IT project that we now consider, our CTO estimates the return – we then slot these into a priority list, and get on with them accordingly. This can be a difficult process as there is initially quite a lot of guess work involved. But as an entrepreneurial business doing things for the first time, this is something that everyone has to get comfortable with.

Of course, the more you do something, the more you can look back at what’s worked previously, and what hasn’t worked so well and refine your guesses – eventually, you can be very precise.

Here’s a little example about pinning down the value of a web refinement: 1. Take one of your web pages and dig

into the data.

2. As an example, the analytics for the

webpage may have seen 100 visitors in a month with a conversion rate of 1% and an average profit of £200. The monthly profit is 200 x 1000 x 1% = £2000.

3. Someone in the team suggests a further development to the product page with a cost of £1000.

But what return is it going to get?

A project like this would be too small to invest any more research into; instead, these gaps will have to be filled in by well thought-out estimates. And to be able to make an order of

magnitude estimate of the project, the CTO will have to make a few guesses based on their experience including: 1. What will the increased conversion rate be?

2. How many more visitors will come to the page based on the further development?

3. Will there be any increased profit per transaction based on this?

As an example, our CTO might estimate: 1. An increased conversion rate to 1.1% based

on past projects.

2. An increased number of visitors to 1200 per month based on a similar project in the past.

3. No increase in profit per transaction (unless there is a price increase in the product).

Therefore, the increased profit per month will be the estimated monthly profit afterwards, less the monthly profit before. So the estimated monthly profit would be £200 x 1200 x 1.1% = £2640 (a £640 profit increase).

Therefore, at a cost of £1000, the project would take less than two months to pay back.

These numbers are by no means certain, but they give an indication to the value of the project. This type of initial screening can help you figure out if a project is viable, and at best let you slot it into the right place in your team’s priority list.

While this can never be exact and, of course, the real numbers will only appear once a project is completed, it is a reassurance to know that everyone in your team is attempting to grow the business in an entrepreneurial (and methodical) way. It almost goes without saying that is very important for your team to think of your project in terms of long-term brand equity, too.

I hope you’ve found this little insight useful; I find that ensuring our entire team (in every single department) thinks this way makes for a very efficient business.

www.elitebusinessmagazine.co.uk January 2013

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03/01/2013 10:21

FRANCHISING Guy Watson, Riverford’s founder

Franchise in the spotlight:

Riverford Organic Farms

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Food shopping has become a deeply impersonal experience. Which is why the concept of organic groceries, delivered hand-to-hand is enough to warm anyone’s heart

WORDS: JOSH RUSSELL

T

hese days, the concept of homedelivered fruit and vegetables is likely to be a familiar one. Whether you order from one of the big four, an online store such as Ocado, or from one of the many subscription-based suppliers, you’re probably aware you can get fresh produce without having to leave the house. But it wasn’t always this way. Riverford Organic Farms was one of the pioneers of home-delivered groceries, giving people access to organic produce literally right on their doorstep.

If you imagine The Good Life, in documentary format and minus Felicity Kendall, you’ll probably get a good impression of how the organic food producer began.

Riverford was set up 25 years ago after founder Guy Watson began to tire of the rat-race. “Guy was a management consultant in New York, among other places,” says Nicky Morgan, Riverford’s franchise services manager. “He hated the lifestyle and always wanted to get back to his farming family roots.” Central to Watson’s vision for developing his family’s farm was that he wanted to do it in a way that didn’t utilise insecticides, chemical fertilisers and pesticides. “These sorts of chemicals had actually caused illness among people that he knew,” explains Morgan. “That’s when he decided to go organic, to grow healthy, sustainable, seasonal vegetables

www.elitebusinessmagazine.co.uk January 2013

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21/12/2012 15:08

FRANCHISING

and get them out to a local audience.”

Watson’s approach also didn’t favour mass-production or excessive, high-yield techniques. “He really did start with one field, one crop and a wheelbarrow,” says Morgan.

“Being organic and given the amount of land he started with, he didn’t want to be tied to the multiples and their ethos, which went very much against his own grain.” And this proved to be vital to the way the business developed, with small-scale local distribution shaping the whole future of the enterprise. “Guy decided that actually sending the stuff to friends of his would be the best option and they said, ‘That’s really nice’,” she remarks. “They recommended their own friends, the next year he planted a few different types of crops and then more people were referred. That’s how it got started.”

This lent itself very naturally to a franchise model and some 13 years ago Riverford reached out to franchisees to help expand and maintain its network. Morgan recalls: “They presented a really useful vehicle to be able to scale out nationally – as a distribution network, effectively – because it’s door-to-

“Being organic and given the amount of land he started with, he didn’t want to be tied to the multiples and their ethos, which went very much against his own grain” Nicky Morgan, franchise services manager, Riverford

door deliveries and very much a people-based business.” Not only this, but it has found franchisees are naturally more inclined to be personally invested in a way that an employee without a stake in the business rarely are. “The relationships that get built on the ground level with the franchisee tend to be much more valuable and tend to have much greater integrity than those with internal employees,” she says.

Currently Riverford owns four farms around

the country; in addition to its main farm in Devon, it also has land in Hampshire, Cambridgeshire and North Yorkshire. They also embrace local cooperatives and organic growers to help them meet demand. “We sell between 40,000-45,000 boxes a week so it’s a fairly big operation,” remarks Morgan. “But we also want to be able to still grow produce as locally to our customer base as possible.”

Despite the fact that regional variations occasionally mean they have to transport certain types of vegetable from another one of the farms, the core aim of Riverford is to give people access to the local produce grown on their doorstep.

Before you get an idea of Riverford being a small-town phenomenon, however, it’s also proving to be a huge hit in cities. Morgan elaborates: “If you look at some of our London franchises they’re up 15-20% year-on-year, which goes to show that there really is a high demand, especially given the fact that the organic market has shown quite considerable decline over the last four or five years.” What’s more, the organisation has been winning plenty of awards in recognition of its work, netting four compassion in farming awards for its recent line in delivered meat boxes. And, significantly, for his efforts Watson was recently given the title of BBC Radio 4 Farmer of the Year. “That’s really exciting and is a big deal for us,” Morgan comments. “What the judges were looking for was a good farming story but one that relates very well to good business.”

But even though it’s an award-winning national enterprise, local, people-focused distribution is what Riverford is all about.

“A recent survey with our franchise network showed that what they regard as one of their greatest assets across the business are their customers,” explains Morgan. The company prides itself on the relationships it builds with the consumer, something that is vital for consumables that are likely to be ordered again and again. “I don’t know any other business that’s as people orientated as this, and the real engagement our customers have is that they understand we are farmers above everything. That’s why our real heartland, our core customers, want to buy from Riverford.”

Jane Baxter, head chef at Riverford Field Kitchen

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Travelling Field Kitchen

Riverford Field Kitchen restaurant

January 2013 www.elitebusinessmagazine.co.uk

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Franchise master 59555:Franchise master 59555

13/1/11

17:11

Page 1

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08/08/2012 10:57

FRANCHISING

Taking the leap

EB guest columnist Sarah Jackson explores how franchisors can support franchisees in taking the steps toward starting their own business

B

eing a franchisee can be a scary experience – and I speak as somebody who has been there. There are so many questions racing through your mind: how do I find the funds for the upfront costs? How do I pay my mortgage and bills when the business is just starting? How can I convince my bank manager to lend me money? Fears about making ends meet are a worry for most would-be franchisees, but throw in concerns about how to run a business and the prospect of operating your own franchise and it can all seem overwhelming.

As a franchisor you have two options: either you act as a distant, all-powerful head office and leave the franchisees to sort themselves out, or you can structure your business plan to make it easier for potential franchisees to enter the world of self-employment. As a former franchisee I know which one I would have preferred.

Apart from anything else, it makes good business sense to be as supportive as possible to people who want to make that move, and let’s face it – who doesn’t need a bit of support from time to time?

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January 2013 www.elitebusinessmagazine.co.uk

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FRANCHISING

At Extra Help we decided to structure the business to make it much easier for franchisees to build a successful company with five key principles: Make it easy for franchisees to buy the business

The first thing most people think when they consider investing in a franchise is that it takes a chunk of money up front. Obviously, investing in a franchise is always going to cost money, but we’ve put systems in place to make that first step easier by liaising with a high street bank to offer 70-80% of the money as a loan, and by accepting the remaining £3,000-£4,000 in instalments.

Make it easy for franchisees to get support from the bank

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For a franchisee with little experience of dealing with banks, it’s reassuring to know they can speak to their high-street branch with no need to show them a business plan.

After submitting our operations manual, franchise agreement, legal documents, financial statements, a five-year projection and undergoing an in-depth face-to-face interview, we were approved by Natwest’s franchise team. Our business plan is deemed to be sound, meaning that franchisees can borrow up to 80% of the purchase cost, which cuts out a lot of the legwork.

If you have a franchise model that works, prove it to the bank and future franchisees will be able to buy into the business far more easily – it’s a win/win situation.

Make it easy for franchisees to handle ongoing costs

The first few months of running a business are unlikely to be profitable. No business really expects to make money initially, so we don’t expect our franchisees to pay any management fees for the first three months. This gives them the chance to build the business and invest any proceeds back into growing their franchise. After those initial months, when things should be moving a bit more, we don’t immediately hike up the fees because we understand it’s a gradual process. Instead, we keep our management fees deliberately low until the franchise is turning over £2,500 a month, essentially £30,000 a year – however long that takes. After reaching that level, the management fees are 10%.

Make it easy for franchisees to hit the ground running

All new franchisees are eager to get started, so to enable them to get to work straight away,

We all have bills, mortgages or rent to pay and we all want the reassurance that money will be coming in to cover them

we’ve done the pre-start-up legwork. Each new franchisee is given a database of approximately 100 relevant local contacts in their area, researched using our knowledge of people and organisations that will be helpful to a new franchisee, so all they need to do is make contact and arrange meetings. While it does require an investment of our time, it enables the franchisee to be in a strong position to start making their own money and building their business as soon as possible. Ultimately, that’s good for everyone.

Make it easy for franchisees to shift between full-time employment and running their business

Perhaps the scariest leap when starting any business is leaving the security of full-time employment. We all have bills, mortgages or rent to pay and we all want the reassurance that money will be coming in to cover them, so leaving your job to concentrate on a business that isn’t bringing in the same kind of cash is daunting.

To ease the transition, we have a virtual office taking client calls to make sure the franchisee can continue employment while they build their business to a point where they are financially stable. It also gives franchisees the opportunity to be out of the office, working on building their business without losing client enquiries. The virtual office service is completely free for the first three months and charged at a minimal rate thereafter. The software we provide for our franchisees enables them to store all their databases, information, tax records, expenses, contracts and so on in a secure database ‘in the cloud’. As well as a straightforward way to store information, it also gives them the peace of mind to know that if they can’t manage the business for any reason – illness for example – we are able to log into the database for them and continue to run their business without any loss of continuity or income.

Setting up and running your own business is never easy, but we aim to make it as painless and straightforward as possible because it makes sense for everyone. Unhappy, stressed franchisees aren’t likely to be long-term partners – I know I certainly wasn’t when I was in their position – so making it a more seamless transition is a sensible approach for both franchisee and franchisor. Extra initial effort will result in happier clients, happier franchisees and, in the long term, a more successful business. Everyone’s a winner.

www.elitebusinessmagazine.co.uk January 2013

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18/12/2012 17:46

LEGAL

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In the current climate, getting your taxes wrong is a mistake you really can’t afford.

Which is why it’s worth checking you really understand your obligations

WORDS: JOSH RUSSELL

Taxing issues

C

ommercial tax obligations could hardly be under more public scrutiny than they are at the moment and, in light of the potentially questionable tax avoidance practices of several of the nation’s largest firms, there are many eyes trained on enterprises’ tax practices and it’s easy to see how slip-ups can have huge reputational, as well as financial, costs. But in reality few small- and medium-sized enterprises (SMEs) actively attempt to avoid or, worse, evade making the required tax contributions. Where many organisations run foul of tax legislation is simply being unaware of exactly what is required of them.

Despite the current focus on the subject, it is uncommon for SMEs to find themselves in hot water over corporation tax. “Quite often small companies’ corporation tax is probably going to be handled by an accountant,” says Kate Schmit, partner at Stevens & Bolton.

“Typically things that can go wrong are in relation to PAYE and VAT.”

January 2013 www.elitebusinessmagazine.co.uk

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Smaller companies are more likely to tackle their own PAYE and VAT returns and, while this can often be the most prudent way for them to process these taxes, it does mean that very small misunderstandings can lead to quite significant issues long-term.

“There could be weaknesses in their systems that are inherent and are repeated month-on-month or quarter-on-quarter.”

Often these weaknesses are very simple oversights. “It’s the small things,” remarks Schmit. An example she draws on are employee share-acquisitions where Form 42, concerning the annual reporting obligations, can often be forgotten. Avoiding these simple mistakes is often just a matter of planning and keeping an eye on the various deadlines. “It’s about diarising and keeping very careful watch in terms of ensuring that you’re hitting all of the filing deadlines, that people remember all their PAYE filings in the summer.”

Another factor that can often cause start-ups to trip is holding steadfast to old systems, even if they are no longer appropriate.

Something Schmit has seen is when people have founded their own enterprise and involved friends who work on a self-employed basis.

“It is possible that there is a point at which their self-employed status

“There may be areas where small oversights might not be seen as warranting heavy repercussions – for example errors in mileage claims or allowances around an office party” ceases to be applicable – they’re really employees but your systems haven’t necessarily caught up with that,” she says. “That’s a problem because what you’ve managed to produce is some employees who you’re not paying via PAYE.” Not only does this put you at risk from a visit from HM Revenue & Customs but it will severely put others off from involving themselves in your enterprise if they feel your PAYE history isn’t up to scratch. “Having lots of self-employed contractors on the books where their employment status is a little dubious is going to have practical, knock-on effects.”

Many of the mistakes enterprises make with regards to their tax are simply down to being insufficiently aware of legislation. “They have a misunderstanding of or have misinterpreted what they’re supposed to be doing,” Schmit comments. Often in these cases the organisation has simply assumed that following common sense on minor points of doubt

will see them right, but unfortunately this can lead to difficulties. “They are fully intending to be 100% compliant but there just is something technically that is not quite right.”

Unfortunately, the old legal precedent that ‘ignorance of the law is no excuse’ applies here. “It’s not much of a defence,” says Schmit.

Generally, on a PAYE or a VAT visit, while the main focus will be to identify processes and areas where things aren’t being done correctly and recover underpaid tax, failure to adhere to legislation can result in penalties. However, there may be areas where small oversights might not be seen as warranting heavy repercussions – for example, errors in mileage claims or allowances around an office party.

Schmit explains: “These are all things where a reasonable inspector will have a conversation with you and agree: ‘Yes, this is the way we’re going to deal with it’.”

Despite this, it is often far less costly to simply make sure things are right the first time around, making sure your enterprise is tax compliant from its first launch. “Even if you’re going to do your VAT returns yourself, having an advisor and some form of overview on a periodic basis would not be a bad thing,” Schmit feels. Essentially, tax compliance can just be a matter of ensuring you have access to appropriate advice for the size of your business – whether that’s an accountant handling all of your returns or just a periodic health-check.

“I think that probably from the outset having advice that is appropriate for your size is not a bad idea,” she says. “And also, if you’re not sure about something seek some assistance or advice in relation to that.”

There is also another very good reason for seeking advice: you may be entitled to relief that you aren’t making use of. “Research and development tax credits are a prime example where companies are entitled to tax relief that they are not fully utilising,” says Schmit. It’s worth bearing in mind that there is a world of difference between the recent high-profile avoidance cases and claiming reliefs to which you are legitimately entitled. Evasion, questionable avoidance and legitimate avoidance may come with a sour taste but making use of extant tax reliefs is as important as making sure you’re compliant with legislation. “That is really where it’s at,” she concludes. “One should ensure that one is undertaking sensible tax-planning plus ensuring that your compliance is as it should be.”

www.elitebusinessmagazine.co.uk January 2013

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www.elitebusinessmagazine.co.uk January 2013

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January 2013 www.elitebusinessmagazine.co.uk

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the START-UP DIARies

When I look at my confident, opinionated seven-year-old, it’s hard to imagine that just a few years ago he was crawling around on the carpet. These are fun and exciting times and I need to remember that more.

This year I plan to lighten up a little, which should also help me with resolution number one.

Set up better systems

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This year there will be less talking, more doing Nicola Barron Founder of Homemade London

In her first column of 2013, Elite Business’s diarist tells us how a self-help book helped her focus on plans for the year ahead

www.homemadelondon.com

I

picked up a book called The Happiness Project by Gretchen Rubin in the airport a couple of weeks ago. I thought it would be a light-hearted work of non-fiction but it’s actually a self-help book of the sort I’m secretly quite partial to. Normally, I’d have bought it as an ebook to hide it from my husband, who’s disapproved of these books since he discovered The Little Book of Power and How to Make Anyone Fall In Love with You on my shelves.

This book started out as a guilty pleasure but gradually I’ve realised that it’s quite a useful tool for both my home and business life. It explores a year in the life of the author who road tests different research and philosophies on how to be happier. So far, it has reminded me that it’s probably not a good idea to bark at my children to get ready for school in the morning and has helped me to focus more on my goals at work.

One idea that’s proved particularly useful is to mentally ‘put myself in jail’ to force me to tackle a task until it’s done.

It’s also inspired me to think about some of my own business resolutions for 2013, which

I get a real buzz from being creative, which is why I set up Homemade London in the first place. Yet I’m not so good at admin or methodical pursuits. Luckily, I have an excellent memory so I’m usually on top of everything, but I’m all too aware that this is not an ideal way to exist. Recently I spent several hours of a precious day off tracking down a cheque book stub for my book-keeper. Along with the other exasperated but more organised members of my team, she’s helping me implement more efficient systems, which will hopefully save time and money, not to mention stress, in the long-run.

Be a better boss

As the business grows, it’s less about you and more about the people you surround yourself with. I’m sometimes so preoccupied with my own to-do list, I forget to spend time with the rest of the team, ensuring that they’re properly briefed and are happy in their jobs.

Be generous

I would like to share with you.

When I worked on the research desk for TV programme Tomorrow’s World, a certain proportion of my time was spent dealing with would-be inventors claiming they’d first come up with an idea we had featured. I quickly learned that it’s not having an idea that’s key, it’s how you execute that idea and follow it through. I think I’m often guilty of not following through on my plans for the business, be it scheduling a new workshop or developing a retail line. This year will be devoted less to talking and more to doing – this column notwithstanding, of course.

I have a tendency to worry about the minutiae of all my business decisions, even down to answering the most simple email enquiry. Like a really vivid dream, sometimes I answer enquiries in my head in so much detail that I forget I’ve not done so in reality.

I have a tendency to look for the potential negatives to every situation, which, while beneficial in many ways, can prove unnecessarily stressful and time consuming.

Generosity is a great strategy. In my local neighbourhood, it’s been shown that the small businesses that tend to be the most popular with other local traders also tend to be the most successful ones. They will happily refer custom, buy each other’s goods and services and generally help each other out, by letting other businesses use their spare storage or lending equipment to one another. I think it’s an attitude that reflects a confident business and spreads positive word of mouth.

Yesterday, I received a really nice thank-you email from another events company I’d recommended to one of our regular corporate clients. There wasn’t anything in it for us directly, but I managed to help out a client and a possible supplier in one go at little cost on my part. Relationships are so important when you’re a small business and ‘paying it forward’ is one of the best ways to build them.

So those are my resolutions. I’d love to hear yours. Tell me about them on Twitter @homemadelondon and I promise to be generous with my retweets. Wishing you all the very best of luck for 2013.

www.elitebusinessmagazine.co.uk January 2013

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