Elite Business Magazine March 2013 by webwax

MARCH 2013

Glass Half-full

Why we shouldnâ&#x20AC;&#x2122;t call time on UK pubs

Badge of honour

Win awards and boost business

Making Mobile Pay

Savvy SMEs capitalise on m-commerce trend

The Mother of InventioN Serial entrepreneur and buddi creator Sara Murray on not taking no for an answer and why the best ideas are born of necessity

MARCH 2013 ÂŁ4.50

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CONTENTS

Inside this month... VOLUME 02 ISSUE 03 MAR 2013

16 The Elite interview

Opportunity just keeps on knocking for Sara Murray

09 Editor’s letter 10 Contributors 12 News in brief 13 Talking point 14 Book reviews 31 Hatching your nest egg

Borrowing against your pension can help you build bigger businesses

38 Increased mobility

Mobile commerce isn’t superceding older forms of retail – it’s creating a more fluid experience

45 A little recognition

21 One to watch

Why you can’t afford to miss the social media party

Awards ackowledge hard work and help a business stand out from the crowd

50 Eyes wide open

Awareness of the competition isn’t just about price – it can help you spot opportunities

54 Centre stage

Perfecting presentation skills can win you fans, both in and outside of the business

57 After the axe has fallen

Recovery after redundancy is much smoother if the process is properly handled

64 Looking to the future

In the battle for success, you need to ensure you have the talent to lead the charge

25 Time at the bar?

Closures aren’t calling last orders for the pub industry

69 Tech for start-ups

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

73 Meeting of minds

Videoconferencing can help teams work closely – irrespective of the distance between them

77 Dynamic data

Working out what customer data to collect and analyse can help build a better user experience

82 Franchise in the spotlight

Froyo franchising with Hale’s healthy dessert enterprise Yogberries

61 Anything to declare? Honesty is the best policy with office romance

85 Eyes to the sky

Cloud computing can help even the least tech-literate franchises get ahead

91 The promotion protocol

Running promotions gives great press – as long as you stay on the right side of the law

94 Classifieds 98 Start-up diary

March 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 03 MAR 2013 SALES Harrison Bloor – Account Manager E: harrison.bloor@cemedia.co.uk T: 01206 266843 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

Sara Murray is a true innovator – she’s an inventor, entrepreneur and astute businessperson

Lindsey McWhinnie – Chief Sub-editor E: lindsey.mcwhinnie@cemedia.co.uk

Innovation is a word we hear bandied around a lot at the Elite Business offices. Whether it’s a new book about innovation, a new innovative technology solution, or an entrepreneur who’s thinking innovatively about an age-old problem, we’ve heard it all.

DESIGN/PRODUCTION Leona Connor – Designer E: leona.connor@cemedia.co.uk T: 01206 266845

But then, occasionally, we hear about somebody who has truly broken the mould and has established themselves as a creative thinker, and more importantly, a creative doer.

Rachel Thomas – Freelance Writer E: rachel.thomas@cemedia.co.uk

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 Copyright 2013. All rights reserved No part of Elite Business may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written consent of the editor Elite Business magazine will make every effort to return picture material, but is at owner’s risk. Due to the nature of the printing process, images can be subject to a variation of up to 15 per cent, therefore CE Media Limited cannot be held responsible for such variation.

Arguably, you don’t get much more innovative than an inventor: the title bestowed upon this month’s cover star, Sara Murray. Murray has now started and run a plethora of businesses, each more inventive than the last. What’s more, each business was born out of a desire to do something better for the customer – which is arguably the way the best ideas come about. Spotting a gap in the market and the opportunity for change. The idea for buddi, Murray’s current business venture, was sparked when she lost her daughter in a supermarket. Since then, the personal tracking devices have been used by councils to keep older people safer and to keep tabs on former offenders. Murray is currently waiting on a procurement decision from the MoJ after buddi bid for two major contracts. Despite being up against stiff competition from behemoths including the likes of Serco, G4S and 3M, Murray is confident of her chances of success. Murray’s story is one that reflects others throughout the UK, where entrepreneurial businesses are just as capable, if not more so, as large companies of being creative, innovative and nimble. The Goliaths have had their day. Now it’s the turn of David.

HANNAH PREVETT EDITOR

www.cemedia.co.uk

March 2013 www.elitebusinessmagazine.co.uk

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CONTRIBUTORS

Contributors Jon Card (pictured centre)

Enterprise hack Card wrote our feature on the UK pub industry. He works as a freelancer for The Guardian, John Brown Publishing and is editor of Birmingham Living magazine. Ever the dedicated reporter, Card carried out first-hand research into all the beer brands mentioned in his piece and found them “very persuasive”. However, he’d like to point out he was at least “partly sober” while writing the feature and apologises if that diminished his fervour.

Rachel Thomas

The career of Thomas, who wrote this month’s One to Watch profile, has taken her far and wide, most recently to the position of editor of a regional lifestyle magazine in South Africa. When not writing, Thomas luxuriates on the veranda of her South African home - on a game reserve. “It’s a place I often sit with a good strong coffee watching the giraffes walk by,” she says. “It’s quite idyllic.” Jealous? Us?

Josh Russell

Amongst others, Elite’s feature writer penned the article extolling the virtues of awards this month. We think Russell deserves a medal himself for the amount of work he powers through each issue. But everyone needs a bit of downtime: Russell likes to chill out between interviews by doing a spot of office-based meditation.

Emilie Sandy

The images you see gracing our cover and the pages of our lead profile with Sara Murray are the oeuvre of EB’s favourite photographer Emilie Sandy. We’re going to have to cope without the Cotswolds-based snapper for a few months as her baby boy is due imminently. Here’s a shot taken by Sandy’s former teacher, John Stadnicki. “He’s the person who inspired me to become a photographer,” she explained.

www.elitebusinessmagazine.co.uk March 2013

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18/12/2012 09:35

News IN BRIEF

O2-owner Telefónica has announced it is developing tech that will be able to analyse users’ voice tones during calls and allow them to build up a psychological profile. It has stressed that it will be a strict opt-in process and that there are no plans to use the data for marketing purposes, but whether it will sit well with the consumer remains to be seen.

Huge salary hikes and big bonuses are hardly popular amongst the public right now, but it seems shareholders are taking a hard line. After the disappointing performance of the company’s share price recently, Apple head Tim Cook is facing potential mutiny over his proposed 51% pay rise, with more than a third of the tech-giant’s investors voting against the boost. If Cook wants to secure his new $1.4m pay-packet, it seems like he’s got his work cut out for him. Oxfam has released its Behind the Brands scorecard, ranking the ‘big 10’ food companies for their overall ethical practices, including workers’ rights, land management and impact on the climate. Surprisingly, whilst controversial corporations such as Coca-Cola and Nestlé have plenty of improvements to make, the worst offender comes closer to home. Associated British Foods – the owner of Kingsmill, Silverspoon and Ovaltine – scored just 13 out of 70 and shows that British firms are as much in need of an ethical tune-up. In the wake of the horse-meat scandal, it’s hard to remember the food scandals of yesteryear but it has been announced that Asda’s self-appointed ‘tomato king’, Antonino Russo, intends to appeal the sentence he received after mislabelling the store’s tomato puree as ‘produced in Italy’ – despite the fact the raw produce had been grown in China. The original verdict, which left Russo with a four-month jail-sentence, found the minimal production carried out at the plant in Italy was not sufficient to justify the claims. Yahoo’s CEO Marissa Meyer caused shock by outlawing flexible working at the internet company. An internal memo leaked to the press said that in order to improve collaboration and communication all staff were being asked to work in Yahoo offices. “Speed and quality are often sacrificed when we work from home,”

read the note, sent out by the company’s HR director, Jackie Reses. The move has been met by surprise, and in many cases, disdain. Telco O2 warned the company risked missing out on huge benefits – both for staff and the business at large. The number of small businesses being awarded government contracts is slowly creeping up. New figures released at the end of last month show that direct SME spend increased from £3.2bn (6.8%) in 2010/11 to £4.4bn (10%) in 2011/2012. There is still a good way to go: The Coalition Programme set an aspiration that by the end of Parliament in 2015, 25% of government spend would be apportioned to the nation’s SMEs. Whilst some business leaders attest to seeing the green shoots of recovery, others are less optimistic about the future. According to the latest quarterly SME Risk Index from insurance company Zurich and YouGov, 16% of UK SMEs consider themselves at high risk of going out of business within the next 12 months due to financial pressure. The high street’s recent woes appear to be affecting confidence in the retail sector, with 21% of retailers now claiming to be at high risk of going bust in 2013, an increase from 12% in the last financial quarter. A new poll of business leaders by the Institute of Directors (IoD) revealed the extent of the damage done by patchy broadband and mobile internet service in the UK. The study found just 57% of IoD members were satisfied with fixed-line download speeds for the business, and 50% with fixed-line upload speeds. Respondents said a faster internet service would improve productivity at 83% of companies and would encourage 13% to hire new staff. Internet service providers: the gauntlet has been laid down.

EVENTs School for Startups Windows of Opportunity March 5 9- 23 Marsham Street, Westminister London, SW1P 3DW Business Scene London Connections March 7 207-221 Pentonville Road London, N1 9UZ Prelude Entrepreneur Driven Growth Partner Programme March 12 22 Royal Mint Court, Tower Hill London, EC3N 4QN SyncFocus – March SyncLunch March 13 409 Chapelfield Plain, Chapelfield Shopping Centre Norwich, NR2 1SZ NDP Networking Event March 18 Natwest Bank, 204 High Street Wathamstow, E11 7LL The Business Growth Show March 19 John Charles Centre for Sport, Middleton Grove Leeds, LS11 5DJ Internet Retail Expo March 20 – 21 National Exhibition Centre Birmingham, B40 1NT Business Scene Manchester Connections March 21 1 Lowry Plaza, The Quays Manchester M50 3UB Speed Networking Events March 22 Level 33 Citigroup Building 25 Canada Square, Canary Wharf London, E14 5LB The Business Growth Show March 27 The Clarendon Suites, 2 Stirling Road Edgebaston, B16 9SB

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

www.elitebusinessmagazine.co.uk March 2013

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Talking Point

Power to the people

With utility prices locked in a near-continual rise, how can SMEs weaken the vice-like grip of the big energy providers?

n the UK we love our traditions. And where would we be without the annual backlash against rising energy prices? British Gas’s recent financial results caused outrage after the energy provider posted an 11% increase in profits and its parent group Centrica promised a £1.3bn payout to its shareholders – following a significant 6% hike in its prices last November. Consumer groups are up in arms, saying that this is a further example of big energy suppliers profiting from pushing householders into fuel poverty. But what about the effect this is having on small businesses? There’s no hiding that, for a lot of SMEs, cashflow is currently more rivulet than raging river and any minor diversion of these funds can cause some major issues. That means there’s a need to prevent any leaks in the metaphorical water-board wherever possible and the current trend of rising prices could pose significant issues for many projects trying to get off the ground. “All the projections show energy prices are only going one way, and that’s up,” says James Murray, editor of Business Green. But, frankly, it’s not enough for businesses to simply curse the darkness – they have to find an affordable way to the lights on. Of course there are plenty of ways to do this. If anything enterprises are facing such a variegated range of options that it’s unsurprising that many are suffering from choice paralysis. Do you shop around for a better deal? Cut your consumption to the bare minimum? Or is it best to bite the renewables bullet?

WORDS: JOSH RUSSELL

‘Go off the grid’ says Mike Landy, Head of on-site renewables, Renewable Energy Association There are actually lots of opportunities at the moment. The government’s support programmes, such as feed-in tariffs, are geared toward encouraging industry and the market place to achieve those levels of growth. Under the feed-in tariffs you have a lot of organisations now that have installed photovoltaics (PV), and to a lesser extent wind projects as well. For SMEs, PV is in some respects an ideal investment; it essentially insulates companies against future price rises. In terms of providing some kind of counterweight to the increases taking place at the moment, a programme like the feed-in tariffs – and particularly for SMEs investing in photovoltaics – has featured very strongly in recent times. We would strongly encourage SMEs to look toward that. If the costs of photovoltaics continue to reduce as they have done we are going to get to a point where we will have something called grid parity, meaning that buying a photovoltaic system will result in the same cost as buying from your local electricity company. And as time goes on and electricity prices continue to rise, those customers will be insulated against those rises. We’ll see a period after that where PV will be the obvious place to go because it will be cheaper than buying retail electricity.

‘Use less, pay less’ says Declan Curran Director of HomeFix Direct It’s a bit of a David and Goliath thing. Frankly, there’s nothing you can do about the big utility companies putting their prices up. But what you can do is hit the bastards where it hurts by using them less. And the only way you can do that is to put the right measures in place. There’s no magic bullet for this. You’ve got to try several things in tandem. You can commission a commercial Energy Performance Certificate, which costs around £200, and it will give you recommendations and guidelines on how to improve the thermal qualities of your workplace. It’s pretty much a roadmap of all the things you can improve – whether it’s the efficiency of the boiler or closing spaces around the windows. Shopping around, there’s always someone out there who’s going to do a deal; you can play one off “The best measure isn’t the other. Overall the best measure to complain and moan isn’t to complain and moan but to by eliminating all the ways your but to act by eliminating act workplace is thermally inefficient. all the ways your Then at the end of the day you’re workplace is thermally paying the big, bad, evil utility company a third of what you’d have inefficient” had to year on year.

March 2013 www.elitebusinessmagazine.co.uk

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BOOK REVIEWS

The Elite read Innovation as Usual; how to help your people bring great ideas to life Paddy Miller and Thomas Wedell-Wedellsborg As business journalists, we get a bit sick of the word ‘innovation’. It’s become such a cliche that the word has lost all meaning or impact. Until now. In Innovation as Usual, Miller and Wedell-Wedellsborg challenge many of the longheld beliefs about innovation and offer advice on how to engender a culture of creativity in thinking within organisations. One such myth the book seeks to dispel is the idea that giving people freedom helps them be creative. Conversely, the authors’ mantra is ‘focus beats freedom’. They suggest that people need guidance and direction if they are to be persuaded think more creatively, or dare we say it, innovatively. One of the other central tenets of Miller and Wedell-Wedellsborg’s theory is that businesses must get better at selecting the best ideas and discarding the rest. This is

something that entrepreneurs are notoriously bad at: having nurtured a product through the early stages of development, they often want it to succeed so badly that they won’t give it up – even if all the indicators suggest they should. The book is jam-packed with similarly useful insights, advice, real-world examples of innovative thinking and references to other useful texts and articles. Whether you’re a small business owner or a leader of the leader of a FTSE 100 company, it’s not one to be missed. Innovative thinking starts right here. HP Innovation as Usual; how to help your people bring great ideas to life, published by Harvard Business Review Press, is out on March 19 and will retail at £16.99.

Decide: better ways of making better decisions

David Wethey

Some books are rather like service-station soup; warmed-over observations ladled out from an individual’s life and involving much the same ‘stick it in and let it stew’ method of preparation. David Wethey’s Decide is the direct antithesis of its brothy contemporaries. After resolving that he’d like to write a book promoting effective decision making, Wethey not only plunged into extensive research but also spent a year of his life blogging around the subject on his site www.makingbetterdecisionsbetter.com, until he really felt at home with his subject matter. Decide is the culmination of this project and a darn interesting read it is too. Whether

discussing why big decisions have resulted in failure or what happens to critical decisionmaking processes in pressured circumstances like war, Wethey’s anecdotes and insights illustrate and outline the psychological, economic and personal elements that lie behind our decisions. All told, some decisions can be complex. But whether it’s worth you reading this book – remarkably simple. JR Decide: better ways of making better decisions, published by Kogan Page, is out now and retails at £14.99.

www.elitebusinessmagazine.co.uk March 2013

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THE ELITE INTERVIEW

As she waits with baited breath to find out if her company’s won a lucrative MoJ contract, Sara Murray reflects on her journey from Oxford graduate to serial entrepreneur

FAST-TRACK TO SUCCESS

WORDS: HANNAH PREVETT PHOTOGRAPHY: EMILIE SANDY

ara Murray, best known as the founder of comparison site confused.com and tracking company buddi, is a woman who doesn’t take no for an answer. Her first business, and several subsequently, was born from a desire to change the status quo – leaving those who didn’t share her vision trailing in her wake. Murray has always been something of a rebel. But less in the sense of challenging authority; more because she didn’t find the authority challenging enough. “School teaches you how to get around stuff. It’s more important to have your socks pulled up properly than to actually be happy or learn anything,” she says. “Did I like it? No, not really. If you’ve got half a brain school’s quite boring.” Born to a mother who retrained as a teacher when Murray was young, and a father who was a marketing director of an engineering company, Murray was the third of four children. She jokes that she was the ‘forgotten child’. “My brother was the oldest and the only boy. My eldest sister was the first daughter, and my younger sister was the youngest daughter. I was nothing,” she smiles. “So I had to fight for attention.” At school, Murray, by her own admission, did enough to get by. “The only school report I remember said, ‘At her best when cornered.’” She was more interested in spending time with her friends than attending classes. “I found people who were equally mischevious in trying to find ways around stuff,” she

www.elitebusinessmagazine.co.uk March 2013

says. “We did the usual – getting suspended and so on. But I only pushed the boundaries to the point where I knew I wouldn’t get into too much trouble.” Murray finally began to engage the grey matter when she applied to Oxford University to study philosophy, psychology and physiology. Rather than being intimidated by the famously arduous Oxbridge interview process, she loved it. “I quite enjoyed it because I got to show off a bit,” she says. “I was asked ridiculous questions. ‘What’s the meaning of life for a golden eagle?’ was one of them,” she recalls. Unlike at school, Murray thrived at university. Her course – with just 25 students – was exciting and engaging, and noncurricular activities gained her attention too. She recalls one of the Oxford Dons giving a speech on the first day. “She said, ‘Everyone who comes to Oxford is probably capable of getting a first. If they were anywhere else they’d probably get a first. Most of them don’t, and the reason they don’t is because there is everything to do here. So, enjoy it. Really get the most out of university.’” It was the best piece of advice she could have been given, says Murray. “I did loads, and had a fantastic time. It was non-stop good,” she beams. As her time at university began to draw to a close, Murray applied to eight big consulting firms in London and was offered a place at one of them. Then an advert caught her eye in her college at Oxford. “It was for an American company that was growing rapidly and wanted

THE ELITE INTERVIEW

“It wasn’t about starting a business, it was about serving a customer better than we were doing for the big guys”

to set up in Europe. They were going to take six people to the US to train them and then bring them back to set up an office in the UK,” she recalls. Initially sceptical, she went along to the interview and was galvanised by the opportunity of working for an exciting, international, fast-growth company in the pharmaceutical sector. The perks weren’t bad, either. “They flew me business class to Chicago, which was all very impressive as a graduate.” She accepted the job, and after several months’ training, relocated back to the UK to set up the office with her five counterparts. But the reality wasn’t quite as glamorous as she’d envisaged. “I was living in London, commuting out to Reading and quite literally working 23 hours a day. It was just ridiculous,” she says. So when she spotted an opportunity to write some code that would dramatically reduce her workload, she assumed her bosses would jump at the chance. “They didn’t think it was a good idea. So I did it myself. That was my first business,” she explains. The then 21-year-old Murray and her business partner had no idea what they were letting themselves in for by setting up a company. “It wasn’t about starting a business, it was about serving a customer better than we were doing for the big guys,” says Murray. Hard work and plenty of cold-calling paid off when the pair managed to get global healthcare giant SmithKline Beecham on board as a client. But the success was to be short-lived, when her former employer sued Murray and her partner. “It was hideous,” Murray admits. “It went to the High Court and it stopped us working for a bit.” When the judge ruled in the start-up’s favour, Murray used the exposure to raise the fledgling business’s profile. “When they paid us our £2,000 or so damages, I sent a fax to the chief executives and chairmen of all the big pharmaceutical companies saying that they were trying to stop us – an up-andcoming competitor – from trading, because all the big pharma companies knew them.” Murray’s serendipitous approach paid off: after this brush with the law, her company began working with 16 of the top 20 pharmaceutical firms in the world. Several years passed, and Murray started getting itchy feet. She felt that there was a bigger opportunity to look at total marketing investment, rather than just that in a company’s sales force. Her business partner, meanwhile, wasn’t so keen to embark on another start-up, so they went their separate ways. Murray’s new company, Ninah, began

March 2013 www.elitebusinessmagazine.co.uk

“I didn’t really know what the market would look like, so I just made a few available on the internet and waited to see what would happen”

working with huge international brands, including Coca Cola and Masterfoods. But it wasn’t always straight-forward – and for reasons Murray hadn’t quite anticipated. “It wasn’t always easy as a woman,” she explains. “There were a lot of middle-aged, male marketing directors who just wouldn’t give a reason why they wouldn’t work with me. I’d say, ‘If I do this work, you’ll increase your profits by 10%’, and they’d say, ‘I’m not interested.’ And they couldn’t just not be interested in that. So, what they’d mean is, ‘I don’t want to do it with you.’” One client she did work with extensively was Norwich Union. As she learned more about the insurance business, Murray pitched to the board that the only way they were going to reduce their operating costs, and therefore improve profitability, was to get online. She then suggested that rather than each insurer spending £6m annually on television advertising, they instead each invested £1m into creating an online market. The board said no, that they couldn’t possibly work with competitors. True to form, Murray decided she’d do it herself. Which was how confused.com was born. Norwich Union may not have seen the potential of such a venture, but customers clearly could, clamouring in their thousands to see if they could get cheaper car insurance: in the first 18 months, Murray had the support of more than 250,000 customers. The success of the start-up also caused ears to prick among would-be investors, and insurance company Admiral offered to buy a slice of the business. Murray wasn’t interested in giving a portion away – especially as she felt it would compromise the company’s integrity. But when Admiral came back with an offer she couldn’t refuse to buy the entire business, she signed on the dotted line in 2003. Having flogged confused.com, Murray refocused her efforts on consulting firm Ninah that her sister and another consultant had been running in her absence. The business had been limping along and Murray decided to take some decisive action. “I’d got a new non-executive chairman, and we talked it all through and decided it would be best plugged into a global communications group,” she recalls. They subsequently sold it to Publicis. After working two-thirds of her three-year buy-out, Murray decided she’d retire. With a reasonable wedge in the bank, she didn’t really need to work (though just how much selling her businesses had netted Murray is anyone’s guess – “I never talk about money,” she says).

But Murray’s plans to take a well-earned rest didn’t end up coming to fruition. After just a few weeks she was mulling over new opportunities. “The thing is, more often than not, your friends aren’t retired. And I’m certainly not a golfer. So there’s not actually much to do.” Rather than twiddling her thumbs, Murray began drafting plans for her next business. Her mind drifted back to when daughter Rowenna, now 20, was a toddler. “When she was quite small I’d done the thing of being in a supermarket and turning around to find she wasn’t there,” says Murray. “It’s a heart-stopping moment.” “I was right at the checkout, so I said, ‘My daughter’s missing’ to the girl at the till and there was a security guard there who immediately stepped forward and said, ‘Don’t panic, we’ll sweep the shop, you go and stand at the exit of the car park and look in the backs of the cars as they leave,” Murray

recalls. “Of course, I ignored him totally and went screaming around the shop.” Murray’s supermarket panic coincided with a sudden spike in growth in the semi-conductor market in the US. “I didn’t know what a semi-conductor was so started reading around semi-conductors and came across GPS chips and what was happening and the miniaturisation of them, and it all fell into place: I decided to make something small enough for children to carry around and then parents will never lose their kids any more ” Murray explains. After some research, the entrepreneur discovered that a US company called Wherify Wireless had spent $180m building a GPS watch. So she approached them, initially as a consumer. “The conversation went backwards and forwards with them so many times, I just couldn’t get one,” she recalls. “I asked them, ‘What is the problem?’ and they said they weren’t sold outside

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the elite INTERVIEW

“I decided to make something small enough for children to carry around and then parents will never lose their kids any more”

America.” When Murray found out they didn’t have a European distribution partner, she asked if she could do it herself. The company told her they didn’t have a European distributor because the technology couldn’t be used outside the US, and that they’d get back to her in three or four years. Not one to take no for an answer, Murray spotted an opportunity. “I thought to myself, ‘How hard can it be?’” she smiles. “Obviously, if I knew then what I know now, I wouldn’t have dreamed of it.” Murray put together a technical team of mechanical designers, hardware specialists, electrical engineers and much more besides, and designed the first buddi devices in 2005. “I didn’t really know what the market would look like, so I just made a few available on the internet and waited to see what would happen,” she says. Yet it wasn’t the initial market she’d had in mind for the product: instead of parents flocking to buy the device, it was local councils. “The people who came to us were local authorities looking after older people. They said, ‘Older people go wandering and the family come to us and say they want them in full-time care because they can’t cope.’ Sometimes they’re wandering around for long enough that they don’t make it home,” says Murray. With their buddi, the person wears the device at all times, and then when their family notices they’re missing they can look up online where they are and bring them home, Murray explains. The products certainly captured the imagination of carers: the company now works with 275 local authorities, who buy it on behalf of families caring for elderly or vulnerable people. That version of the product is £300 to buy, and then costs £20 a month. But the GPS tracking devices aren’t without their challenges. One of the key problems is their short battery life, says Murray. “There was nobody there to charge them,” she

explains. Another stumbling block has been the size and design of GPS trackers. They’re bulky and unsightly. “If I were that age I wouldn’t want to wear a big white box around my neck with a big red button,” she says. “I don’t know why we would think that older people suddenly don’t mind.” As such, with the aid of a grant from the Design Council, the company has been working hard on a nifty new buddi product, which will launch this summer. The buddiband is comfortable, discreet and waterproof. To avoid previous problems associated with battery charging, it is fitted with the most rechargeable possible battery and designed to be super power-efficient. Having been given a sneak-peek at the shiny, new product, we can promise it warrants all the attention it has been generating. Watch this space. The other market that buddi plays in is offender monitoring. Having worked on two huge government procurement bids for the past two years, Murray will find out if her company has won either (or both) of the MoJ contracts in April. She is confident of her chances, despite stiff competition from the likes of Serco and G4S. As she awaits the results, she will have a little more time to indulge in one of her favourite pastimes: flying helicopters. It’s now been two years since Murray got her licence, and while she admits to being a “fairweather flyer”, she says there is nothing like taking to the controls of a ’copter. “When you’re flying, you can’t think about anything else; you can’t think about business. For me, it’s 100% concentration on flying,” she says. One thing’s for sure: Sara Murray is a high flyer – in many senses of the word. It’s no surprise, therefore, that she’s inspiring young people to take the plunge and start to grow their own businesses. She sits on the Government’s Technology Strategy Board and is a mentor at Seedcamp – an organisation that was set up to jumpstart entrepreneurial activity in the UK. But Murray says that true entrepreneurs don’t need her help initially. “I kind of think that a real entrepreneur, who’s going to really make it, doesn’t actually need advice from someone like me; they’ve probably already started something,” she says. And for those who haven’t, her advice is simple. “Get on and do it.”

March 2013 www.elitebusinessmagazine.co.uk

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ONE TO WATCH

A new conversation

WORDS: RACHEL THOMAS

To tweet, or not to tweet: that is the question. For Linda Cheung, CEO and co-founder of award-winning social CRM and services business CubeSocial, the answer is a resounding yes

hether the recipient is a ‘friend’, ‘follower’ or ‘connection’, pinging 140-character messages to friends, colleagues or potential clients is pretty much the norm in today’s society. Over a billion tweets are sent every three days, giving businesses insight into what’s trending now and who their customers are following. When hiring, most businesses will use social media sites to screen candidates; an applicant who knows their tumblr from their Twitter, and their Facebook from their Flickr will definitely get a big tick in these PR-conscious times.

March 2013 www.elitebusinessmagazine.co.uk

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ONE TO WATCH

Linda Cheung has always been interested in how businesses and markets interact and communicate with one another. Hardly lacking in early influences, Cheung’s entrepreneurial stirrings began as a child as she watched her father run his own business. Perhaps inevitably, she was drawn to the City; for someone interested in global interaction, there could be few places quite so attractive, particularly given the increasing role, technologies such as email and the internet were beginning to play in the country’s financial and business capital. Leaving the London School of Economics with an MSc in economics, Cheung started her career at tax and advisory services firm KPMG – a graduate role that was to be of pivotal importance to the formation of CubeSocial. Encouraging enterprises to make the most of the technological solutions at their disposal has been something of a recurring theme in Cheung’s life: she recalls having a fight on her hands when she wanted to adopt email, with senior members firmly believing the trend would never catch on. For the next 13 years, Cheung called the Morgan Stanley offices her second home. The position gave her plenty of opportunities to flex her entrepreneurial muscles – for example, acting as a key player in the launch of the company’s first ever credit card. However, despite climbing the corporate ladder and securing a chief operating officer title at just 32 years old, Cheung was clearly a chip off the old block. Following in her father’s footsteps, she traded in her suit for jeans and her plush St John’s Wood flat for life in Basingstoke – dubbed jokingly ‘Amazingstoke’ by the entrepreneur – and returned to the grass roots, joining forces with social software veteran and an ex-Microsoft employee Mark Bower. And so CubeSocial was born. A core question for any company providing services to businesses is, ‘What do businesses want?’ After extensive research, Cheung and Bower found that the most important concern for businesses was finding new ways to reach and secure new customers. Together, the two entrepreneurs decided to devise a social CRM for professionals aimed at enabling the user to easily manage their contacts, tasks and social media conversations to win business through social media. “When we started talking about the business, I realised how much of a geek I really was,” she says. “I love technology for what it can do, which makes me the business element of our business relationship. Mark is much more about loving technology and seeing how it progresses things along in the world.” In a nutshell, as Microsoft Outlook has become synonymous

“It quickly occurred to me how significant [social media] could be and how it was just another way to talk” with email and calendar management, CubeSocial is the professional one-stop-shop for social media. It allows enterprises to turn email contacts into social profiles, meaning businesses can see, in one simple view, which social media sites their contacts are using. This enables companies to approach their customers through the channels they are using, as well as posting updates to multiple social media accounts in a single click. CubeSocial also offers a hype-free social media consulting service to get you started with social media; from complete outsourcing of social media activity through to training, strategic planning and support. For some, the social-media sector is still rather intimidating and it’s easy to assume social-media entrepreneurs like Cheung must have had extensive pre-existing knowledge to make such an impact in the social space. But with refreshing frankness, Cheung admits that when she left Morgan Stanley she was a complete social-media novice; she had less than a dozen connections on LinkedIn and had never once opened a Facebook or Twitter account. All of her experience in the sector is very much self-taught – for a long time she simply watched how it was done, a process she calls ‘lurking and learning’, before creating her own profiles. It was, in fact, Jonathon Ross who was part of her business education in the start-up world. “He was one of the celebrities I followed,” Cheung explains. “It quickly occurred to me how significant [social media] could be and how it was just another way to talk.” A useful insight came from watching the way Ross used social interaction to drive word-of-mouth around his shows. He would tweet about who he’d be interviewing on the show the day before it was filmed, giving his followers product teasers, creating potential advocacy for that person and

www.elitebusinessmagazine.co.uk March 2013

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ONE TO WATCH

Linda Cheung

seeding follower interaction by encouraging them to take part in the discussion. Starting up in the recession was not a hindrance to the pair, in part down to some shrewd planning. Rather than adopting the ‘London or bust’ mentality so often adopted by UK tech, the duo based the privately funded company in Basingstoke, keeping costs down without sacrificing easy access to all the benefits the capital offered. “When you’re a start-up, the best thing is to keep things as lean as possible,” she explains. “In a smaller location, there is more ability to build a local presence and grow, getting coverage that then gets picked up elsewhere.” But how has CubeSocial built such a high profile in a very competitive space? For Cheung, business practice has always been about building great relationships, which can only come about through conversation. She feels social media’s greatest strength lies in how it aids companies in interacting with their customer base and build relationships. A phrase Cheung can commonly be heard using and CubeSocial’s hashtag of choice is ‘joining the dots’. “It’s always about those connections, about joining the dots,” she explains. “Big business is about how you connect – and to whom.” Cheung draws on the analogy of Twitter being the ‘virtual cocktail party’. Twitter is about mingling; it enables you to join a conversation uninhibited as long as you have something relevant to say – even if you don’t know the people involved. “That makes Twitter in particular, very powerful from a B2B perspective,” she adds. On a similar level, Cheung often refers to Facebook as the virtual house party, which is invite-only, and LinkedIn as the virtual shop front where, if a business potential likes what they see on your profile, they will be encouraged to explore what more is on offer and ‘get connected’. But all of these opportunities are primarily social in nature – without being proactive and gregarious, actively seeking connections, you’re going to be spending a lot of lonely evenings by yourself. And CubeSocial Mark Bower has definitely practiced what it preaches, promoting itself to great effect through social media alone. “To date, we have gained local, national and international press coverage as well as a 45-minute interview on BBC radio, all without spending a penny on marketing or PR,” Cheung

“In a smaller location, there is more ability to build a local presence and grow, getting coverage that then gets picked up elsewhere”

explains. Pretty impressive stuff, particularly given the nature of the attention being paid to the outfit. It has been named as a Top 20 Idea in The Guardian, was listed as a ‘One to Watch’ by analyst firm Index B and was chosen as a finalist in the 2012 Cloud Computing World Series Awards in the Best Social CRM category. Even though CubeSocial is a mere slip of a thing at two years old, Cheung has grand ambitions for the company. Because it’s built around one of the most prevalent needs on the market, a requirement to establish effective connections, its place in the market is pretty much guaranteed. Not only that, but given the rapidly changing nature of the social space, there’s never been a more exciting time for the CubeSocial team. “To create a product or a business that could change the way thousands or millions of professionals do business is extremely exciting for me,” says Cheung. “The fact that we may play a part in that is phenomenal.”

Company CV Name: CubeSocial Founded by: Linda Cheung & Mark Bower Founded in: 2011 Team: 4

March 2013 www.elitebusinessmagazine.co.uk

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01/03/2013 19:22

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28/01/2013 12:23

ANALYSIS

PUB ANYONE? The UK pub industry is ostensibly in decline, with numerous closures every week. However, entrepreneurs with new ideas are still successfully exploiting gaps in the market and running fine drinking houses

ubs are in decline, say the headlines. The British have lost their taste for beer and are instead staying at home to drink wine purchased at the supermarket. The drinks industry blames high duties on alcohol and the smoking ban. Others claim it’s the result of a move to a more insular lifestyle powered by home entertainment. The great British institution that is the pub is dying out. You’ve all read stories and perhaps concluded that the pub business is not one worth entering. Indeed, statistics show that pub closures have been rampant through the first part of this century. During the peak of the recession in 2009 there were an average of 52 pub closures every week. This has slowed a little, but still during March and September 2012 there were about 18 closures every week. But have the British really gone off their pubs? Thankfully the answer is no, and a new breed of pub entrepreneur is on the rise.

WORDS: Jon Card

Legislation and change

The pub/brewery industry was initially dealt a hammer blow by a surprise move from the Thatcher government. The little-known Beer Orders of 1989 stipulated no brewery could own more than 2,000 public houses. The move, designed to boost competition, shocked the brewery industry which realised its days of endless expansion were over. So the industry reordered itself and soon pub companies, rather than breweries, owned pubs, and ‘the tied house’ model became the norm. In these agreements, the tenant landlord rents the property from the company and is obligated to buy the beer and cider it sells. Critics of the ‘tied house’ model say

the average number of weekly pub closures during March and September 2012

March 2013 www.elitebusinessmagazine.co.uk

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ANALYSIS

it squeezes the tenants financially through unfair pricing and restricts their ability to invest, leading to pub closures. Of course, the pub companies deny this and argue it isn’t in their interests to see pubs close and that their rents and beer prices are fair. On balance, it would appear that some deals are better than others, but either way the closures are still happening.

New breed

Entrepreneurs looking to make it in the pub industry are finding better models for growth, as well as marketing strategies that allow them to stand out from the corporates. Matt Scriven is one such entrepreneur and has been steadily expanding his pub and bar business, Bitters ‘n’ Twisted Venues, since 2006 and now runs six premises with a combined turnover of more than £5m. He has taken over several ‘failed’ pubs in Birmingham and reinvented them with new concepts, improved drinks offerings and a touch of quirkiness. He says the reasons for pub failures are often fairly easy to remedy. “The tied model means that tenants get ground down and can no longer take a helicopter view of their business. A lot of what goes into creating a good venue isn’t rocket science. Sometimes it’s something really obvious, like adding a dimmer switch to change the lighting,” he says. “The problem with the tied model is that it doesn’t provide tenants with the right kind of rewards and incentives, and some don’t have the skills to diversify their businesses.” Scriven says it doesn’t worry him that pubs are closing, and suggests there is still a future for the industry and for exciting independent businesses. “I take a different view. I travel around the country a lot and see what’s going on, what works, what’s successful and how busy other venues are. If I can’t see anything in Birmingham that fits that model I ask, ‘Why can’t it work in Birmingham?’ and if I can’t think of a good answer, I set one up.” Scrivens works with managers, in some cases involving them from the start, to create a distinct concept. One of his city centre pubs, the Jekyll and Hyde, takes on a gothic Victorian feel and has a gin parlour upstairs. “My model is about bringing in a manager and I try to involve them in the concept and use their passions. We define the music policy, think about the pub’s architecture and try to add some element of quirkiness. I am very passionate about cask ales, but a lot of my managers tend to focus on the cocktail side.”

Over the past decade there’s been a resurgence in cask ale brewing and consumers are responding Something’s brewing

One of the consequences of the pubs and breweries separating was a lack of investment in cask ale. For a while, pub companies favoured nitrokeg ales, which were cheap to produce and kept well. However, consumers began to turn their backs on them and feedback suggested they were associated with bad hangovers. But, over the past decade, there’s been a resurgence in cask-ale brewing and consumers are responding. According to the Cask Report, real-ale sales rose by 1.6% in 2011 and remained strong during 2012, bucking the trend for beer sales, which are in decline overall. The report’s authors also suggest pubs that serve cask ale are more likely to survive than those that do not. The rise in popularity of cask ales is good news for businesses such as Purity Ales, which began brewing in Warwickshire in 2005. The brewer has won awards for its ales such as the Mad Goose and UBU, and sells well in both pubs and retail outlets. The business increased sales by 23% in the last financial year to achieve revenues of £3.2m.

the increase in real ale sales in 2011

www.elitebusinessmagazine.co.uk March 2013

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28/02/2013 12:01

ANALYSIS

BREWDOG

“Consumption patterns have changed, and wine and cocktails are now on the menu at many successful pubs, alongside cask ales, exotic lagers and food” It is also expanding with a new brew house under construction and with plans to open its own pub. Managing director Paul Halsey is positive about the company’s prospects: “The opening of our new brew house will be a landmark step for the company. There are plans for further recruitment in the first half of the year and a new beer in the second– 2013 looks set to be an exciting period for Purity.”

Adapt or die

The UK has changed in so many ways over the past 20 years and this is part of the reason for the decline in pub numbers. For instance, city centre living is on the rise, reversing the long trend of suburbanisation, which characterised postwar Britain. This means footfall in the city centres is rising, which is good news for premises located there but bad news for those in the villages. Indeed, consumption patterns have changed, and wine and cocktails are now on the menu at many successful pubs, alongside cask ales, exotic lagers and food. British men no longer head to the pub to sink ten pints with a pack of cigarettes following a day’s graft at the pit or factory. Pubs that are still based on this approach can indeed expect to disappear.

If there’s one company that represents the new breed of brewers it must be BrewDog. The Aberdeenshirebased business, founded in 2007 by James Watt and Martin Dickie, started off brewing ‘hardcore’ ales and selling them in small quantities at markets and fairs. It grew and began to open its own pubs. However, it was unable to gain bank finance to expand and so went out to its own customers to raise money. “We had this crazy idea of bypassing banks and allowing lovers of craft beer to have a direct impact on the essence of the company,” says Watt. “It was a bold move, one we were optimistic about, but we definitely could not envision the speed at which we were able to reach our target of £2.2m. We’ve got over 7,000 investors now, all with a great passion for our beer and brand.”

“We had this crazy idea of bypassing banks and allowing lovers of craft beer to have a direct impact on the essence of the company” BrewDog now has premises in ten British cities and a group turnover of £11m. The business embraces the truly ‘anti-corporate’ persona and message, with brews such as Punk IPA and Dead Pony Club. “Our beer is targeted at anyone who is tired of the status quo, anyone who is interested in the possibilities of beer. Anyone who truly believes beer is to be enjoyed and understood, not simply consumed in mass quantities for an alcohol hit. We want to get people falling in love with beer again,” says Watt.

www.elitebusinessmagazine.co.uk March 2013

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01/03/2013 17:56

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28/02/2013 12:02

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28/02/2013 21:01

FINANCE

With bank lending still at a low ebb, entrepreneurs are increasingly turning to their pension pots as a way of financing their businesses

espite early indicators that recovery is on the way, SMEs continue to struggle to gain access to vital funding. The well-publicised reluctance of banks to lend has made business owners increasingly wary about asking their bank manager for help. Research group BDRCâ&#x20AC;&#x2122;s SME Finance Monitor for the third quarter of last year found that just one in ten SMEs reported making an application for a new or renewed loan or overdraft in the 12 months prior. And despite the efforts of the government to increase awareness of alternatives to traditional bank lending (BIS released its SME Access to Finance Schemes paper in February), business owners are still missing out on the vital financial support they need if theyâ&#x20AC;&#x2122;re to grow and flourish.

WORDS: HANNAH PREVETT

March 2013 www.elitebusinessmagazine.co.uk

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FINANCE

£100bn The amount of cash that could be unlocked by pension-led funding

Indeed, the BDRC research found that just 40% reported using any form of external finance – which represents a year-on-year decline. We’ve written about innovative alternative funding sources, including the likes of peer-to-peer lender Funding Circle, which continues to go great guns and has lent more than £81m to small businesses thus far. But another creative way of raising finance for owner-managed businesses is by borrowing money from their pension pots. According to financial services provider Clifton Asset Management, pension-led funding could release around £100bn of finance – a welcome injection of cash for the UK’s struggling SMEs (which would no doubt equate to substantial bounty for the government, by way of tax revenue).

“One of the principal advantages of pension-led funding is that the loan isn’t secured against a personal asset – such as a director’s home” Clifton itself has so far lent money to 1,250 small firms, with an average funding amount of between £120,000 and £150,000. But Clifton’s chairman Adam Tavener says this just offers a glimpse of the potential of the funding mechanism. “It’s not an insignificant number of businesses we’ve funded so far, but neither is it anywhere near the market potential,” he explains. “In very roundabout terms, if you take the businesses that we’ve funded and the people they employ, it’s about 10,000 jobs thus far that have either been created or stabilised by this particular funding methodology,” says Tavener. This is good news too for the government – not just from an employment perspective, but on the tax front, too, Tavener comments. “From George Osborne’s point of view, that’s quite good news because it’s more than £100m a year in payroll taxes he’s collecting. “That doesn’t make us NatWest Bank, but on the other hand, it’s not insignificant either: it’s two or three Rover groups not going bust.” Pension-led funding, at its most simple, isn’t a particularly complex principle to grasp. A business owner borrows money against the amount they’ve accrued in their pension pot to date. So that means, at the very least, the party, or parties, will need to have saved at least £50,000 in order to make it a feasible proposition.

www.elitebusinessmagazine.co.uk March 2013

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FINANCE

“From a financial point of view, it really needs to be north of £50,000 – below that the fixed costs render it a bit expensive,” he admits. “But in pension speak, £50,000 is a pretty small pot, especially if it’s between two or three individuals.” One of the principal advantages of pensionled funding is that the loan isn’t secured against a personal asset – such as a director’s home, for example. Many of the alternative financiers have long argued that the need for personal guarantees is outmoded, and often causes a business owner – and their family – unnecessary suffering if the business fails. “The consequences of business failure, when there’s a third party involved, are significant and they go beyond the financial – they can be emotional too,” explains Tavener. “Anybody who has had to sit the family down and say we’ve either got to sell the house or it’s being repossessed will tell you it’s not just about money.” 34

“About 10,000 jobs thus far have either been created or stabilised by this particular funding methodology”

Motoring ahead Having indulged a lifelong passion for motorsport, Dick Cormack decided to set up a business selling motorsport tyres in 2007. Rather than acting as a channel reseller for one of the major tyres brands, Cormack decided the real opportunity lie in developing his own range of tyres. This meant finding a substantial amount of development money to design and manufacture a single, 13-inch tyre. “Basically, we needed £150,000 to get to the point of production,” explains Cormack. Cormack’s first port of call was his bank, but they were unwilling to lend him the full £150,000. “Our bank was supportive but wasn’t able to lend me the full amount and it was a case of ‘all or nothing’ for us.” It was at this point that the budding entrepreneur was introduced to Clifton Asset Management. “We were starting a business in the middle of the financial crisis

and people were laughing at us. But Clifton was prepared to listen and provide us with all of the facts on what we could or couldn’t do,” says Cormack. Leveraging the company’s IP, inherent in Cormack’s tyre design and potential product range, Clifton recommended the use of IP-led pension-based business funding and £75,000 was raised by the pension scheme, with the remaining £75,000 from the business’s bank. Since, it has gone from strength to strength and is now a global player, thanks to the combination of low cost, good design and excellent performance characteristics. “Before we knew it, we were into Europe, then South America, Australia and New Zealand.” Cormack continues, “Within a couple of years we had a business providing 28 tyre sizes and 50 compound and tread combinations.”

“Our bank was supportive but wasn’t able to lend me the full amount and it was a case of ‘all or nothing’ for us”

Instead, this form of funding allows business owners and directors to borrow cash from their personal pension schemes offset against the value of the intellectual property of the business. It hasn’t always been possible for businesses to do this: it was only in The Finance Act of 2004 that intellectual property became recognised as an acceptable asset class for use in pension-led funding. This isn’t to say that businesses need to be clued up on IP: what IP they own, how it can be leveraged and so on. Expert organisations hired by the likes of Clifton will scrutinise a company’s IP. “What we would normally do when dealing with a new organisation is to go through some work around their IP to get some kind of value on it,” explains Tavener. “This isn’t something we do ourselves, we don’t do IP valuations, but we do have a panel of accountancy-led experts who do valuations for us.”

www.elitebusinessmagazine.co.uk March 2013

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23/01/2013 11:25

FINANCE

“The idea in collaboration – whether it’s with a bank or another style of lender – is that it gets the customer to where they want to be. It’s the outcome we’re interested in rather than the methodology”

Those experts will take a whole host of things into account: from branding and reputation to relationships with customers and suppliers. All these are part of the intellectual capability of the business, says Tavener. “For a small, privately owned business, that’s never normally discussed because banks won’t traditionally lend against it, unless the business is being sold, at which point it becomes a very important calculation,” he explains. “We’re dealing with exactly the same area of asset, except we’re using it as a means of funding the business rather than simply a means of calculating its value in terms of a potential purchaser.” Despite banks not being willing to lend against this kind of asset themselves, they often will partner with Clifton. For example, if a business wants to borrow £150,000 and the bank can only lend £75,000, they might suggest the SME-owner borrows the remaining amount from Clifton. “Most of the deals we do are collaborative deals,” says Tavener. “The idea in collaboration – whether it’s with a bank or another style of lender – is that it gets the customer to where they want to be. It’s the outcome we’re interested in rather than the methodology.” Yet, despite minimalising personal risk, no borrowing should be undertaken lightly. And while this form of lending means that should the business fail, the business owner or director won’t lose their house, they could stand to lose a good chunk of their pension. Tavener says this is still preferable than the alternatives. “There’s always risk involved, but we would say it’s a lower level of risk and one that’s controlled by the individual, rather than by a third party,” he suggests. As always, when considering borrowing cash, the onus is on the business owner to be truly objective when considering if they should accept external investment – of any description. “I absolutely have to underline this: it’s absolutely based on the fact that the business is investable. If it’s not working for any reason, we’re not going to invest in it. We are the trustees, and we’ve got a responsibility to make sure that it’s a commercial investment done for the right reasons. “We always say to people, ‘Ask yourself: would I invest in this business?’ If the answer is no, you’re not confident about the business, don’t do it. And while we’re on the subject, don’t ask anyone else to, either.”

March 2013 www.elitebusinessmagazine.co.uk

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FINANCE

OFF THE

HOOK

When looking at potential revenue streams, mobile commerce is one of the most exciting areas. Meaning itâ&#x20AC;&#x2122;s not worth missing the party

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here’s no hiding it. UK retail is going through its most fundamental shift since e-commerce first began to take off in the late-1990s. In just a few short years, mobile transactions have gone from being a niche to an all-pervading part of consumer culture and this is offering access to revenue channels which previously have been inaccessible. “E-commerce is changing on a dramatic level,” says Paul Doherty, sales and marketing director at e-commerce experts PureNet. Which is no overstatement. According to comScore’s UK Digital Future in Focus 2013 report, almost a third of page views in the UK now take place on a smartphone or tablet and one in five people used their smartphone to make a purchase last December. Taking this into account, it’s no

Lenstore. Founded in 2008, the Lenstore brand and model were founded before mobile commerce had really been established as a significant revenue stream. However, the retailer realised the way its customers were shopping was beginning to shift. Founder Mitesh Patel explains: “We noticed that a decent number, around about 10%, of our customers were trying to access our website through their mobile phones.” Initially, the levels of engagement through these channels were pretty poor, with the number of page-views per visit remaining very low, suggesting that they were losing many people from the buying channel. As the trend continued it became clear there was a very definite market for people shopping for contacts on their phones. “Customers were

“You need to at least have a site that allows people to get information on your goods and your services at a touch of a button or a click”

WORDS: JOSH RUSSELL

Ryan Higginson, vice president of digital channel and supplies Europe, Pitney Bowes

wonder many retailers are seeing mobile commerce as less of an optional revenue stream and more a fundamental element of their business. Doherty comments: “More and more of the switched-on retailers know that people use the internet and purchase in a very different way with their mobile devices than they do with their desktop computers.” When dealing with the evolution of e-commerce, it’s very much a case of adapt or die. “You can’t ignore the explosion we’re seeing in smartphones and also the usage of these smartphones to purchase,” says Ryan Higginson, vice president of digital channel and supplies Europe at Pitney Bowes. He refers to figures that estimate 70% of smartphone users research their purchases and begin the buying process on their phones; 30% complete this purchase on their handset. In light of this, it’s important to have the right tools in place to make their passage throughout that buying process as smooth as possible. “You need to at least have a site there that allows people to get information on your goods and your services at a touch of a button or a click.” A company that knows all about making the switch is online contact lens retailer

trying to get on and off the website while they were out and about, and then get on with their day,” says Patel. “We realised then that we needed to launch a mobile-optimised site.” Something worth bearing in mind, however, is that for a customer to make use of an app, they will either need to be motivated by high levels of loyalty or a need to make regular and repeat purchases. CTO of umi Digital Marc Crouch explains: “It is a heftier commitment for a user to download and install an individual app than it is to browse an individual website.” Expecting individuals to download an app to purchase a car or apply for a mortgage is likely only to frustrate the user, insisting upon an emotional commitment for a fairly short-term relationship. “My advice for the majority of e-commerce sites is to ensure your website is mobile- and tabletready through responsive design principles.” And this is something reflected in Lenstore’s experience of the market. Patel feels the instant connectivity and convenience of the mobile market lends itself toward specific types of products. “Contact lenses are a routine purchase,” he remarks. “They’re the sort of things you don’t really want to think about.” But additionally, the

March 2013 www.elitebusinessmagazine.co.uk

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quick and easy nature of purchasing on a mobile is particularly suited to items that might easily be forgotten and remembered again on the spur of the moment. He continues: “Anything you’ve actually run out of and actually need, you just want to do it right there and then. Mobile purchasing is very important for anything that needs replenishing.” Unfortunately, mobile commerce isn’t the only tool you’ll ever need. While it could be inferred from the reports in the media that mobile technologies are ringing the death-knell for the desktop, it seems nothing could be further from the truth. “One feature I’ve noticed from many who have added a mobile-optimised site is that it seems to create more users; it isn’t cannibalising desktop users,” comments “Anything you’ve actually run PureNet’s Doherty. He out of and actually need you does feel that this may be liable to change as just want to do it right there the way we define our technology changes, but and then. Mobile purchasing for the time being it is very important for anything certainly doesn’t seem to be a case of either/or. that needs replenishing” “It’s an additional channel, Mitesh Patel, founder, Lenstore not a replacement channel,” he says. Which brings us to an important point. Rather than being the next big thing, mobile commerce is simply another strand in an increasingly sophisticated multi-channel picture. Not only is mobile commerce able to capture sales when consumers are out and about but it is also facilitating greater cross-channel co-operation. “There are beautiful ways of linking the physical to the digital,” says Higginson. Given Pitney Bowes’ long history of working in communications and its work with franking machines, it’s only natural the firm is eager to pioneer any innovations that offer additional options for its clients. One of their most recent products involves replacing the traditional business logo on franked post with a digital logo featuring a QR code. “It allows you to advertise your business on your mail then take them to a really rich mobile experience with the QR code,” he explains. “That’s a great way of bridging between the physical and the digital.” This is something Patel feels is the real strength in mobile commerce. He comments: “I think there’s going to be a really interesting interaction between out-of-home advertising and your mobile phone.” He highlights what it is that makes Google such a powerful tool for driving retail opportunities. Unlike more sophisticated, targeted advertising platforms such as Facebook, Google actually captures the consumer at the point of highest purchasing intent. Patel thinks that the same rule will eventually be applied to our high streets, capturing consumers at the exact moment they’re intending to buy something. “When you walk past a billboard, I don’t see it being that far into the future when it will transmit to your mobile phone a relevant message,” he says. “That’s the big opportunity.” But when we’re talking about the relationship between channels, what about desktop and mobile? In a world of co-operative retail channels, is there anything e-commerce can learn from its trendy younger brother? “I think there are a lot of tricks that mobile sites employ that you can bring to bear on standard e-commerce sites,” Doherty comments. “You want to make it a very easy job. Less is more. Keep it simple.” Ultimately, there are some rules that apply across the board and no matter where you’re looking in your multichannel picture and when looking to bolster your revenue, they are things you cannot ignore. “Making it simple for the consumer – that’s the key thing,” explains Higginson. “Regardless of what channel they’re accessing you through and what device they’re using, it’s important to keep it simple.”

www.elitebusinessmagazine.co.uk March 2013

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“RTI means employers will have to tell HMRC, via an online submission, what it is paying employees”

new Universal Credit (UC) welfare system to be launched in October. The government claims RTI should generate savings of £300m a year from 2014/15.

How will employers provide RTI?

The legislative landscape: Information in real time Taking the time to step back and look at the bigger picture, Clive Lewis, head of enterprise at ICAEW, sees a large legislative landmark looming large on the horizon: Real Time Information (RTI).

RTI reporting will become part of normal payroll activity; the crucial difference is that it has to be done on or before the payment date. Employers will issue a Full Payment Submission (FPS) through either the Government Gateway system or via Electronic Data Interchange (EDI) – at least until April 2014. In future BACS will also be used. At the end of the tax year employers or pension providers will indicate which the last payment submission for the tax year is, provide each employee (or pensioner) with a P60, then complete P11D forms, as under existing arrangements. The smallest employers will be able to file employer returns online using free HMRC software. Where employers can get help

What is RTI?

RTI means employers will have to tell HMRC, via an online submission, what it is paying employees, including tax, National Insurance and other deductions, on or before the time they are made. In other words: giving a running commentary on pay. Who will have to use RTI?

Nearly all employers will have to start using RTI at some point between April and October this year. HMRC will write 1.4 million letters in February to employers telling them when they need to start submitting RTI reports. Most businesses will have to upgrade their payroll

software and employers with nine or fewer employees will be able to use HMRC’s free Basic PAYE Tools software for RTI reports. Why is RTI being introduced?

In a nutshell, RTI will enable HMRC and DWP see and know everything about salaries and tax liabilities in real time. The move to real time is an attempt to solve a real problem: the billions of pounds lost to the tax and welfare systems through fraud and error every year. It should make PAYE more efficient and ensure HMRC and DWP have up-to-date information about workers’ incomes, meaning the correct amount of benefit is paid to recipients of the

ICAEW (Institute of Chartered Accountants in England and Wales) is a professional membership organisation, supporting over 140,000 Chartered Accountants around the world. ICAEW member firms have 21,167 offices in the UK supporting many thousands of businesses of all sectors and sizes. ICAEW’s Business Advice Service enables businesses to receive an initial consultation at no charge from an ICAEW Chartered Accountant. To find a chartered accountant offering the service, you can search the ICAEW Directory of Firms which contains a directory of participating firms, broken down by location. You will find the directory at www.businessadviceservice.com

www.elitebusinessmagazine.co.uk March 2013

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SALES & MARKETING MARKETING

The

SPOILS Awards: what are they good for? Well, as it happens, rather a lot

43 45

When you’ve got wall-to-wall meetings to attend, capital to raise and new markets to crack, taking time out to apply for and attend awards ceremonies may not seem like a top priority. However, only a fool would ignore what they can offer a business. We spoke to some profoundly un-foolish people about just what it is that makes awards great

The winners

Better Bathrooms

WORDS: JOSH RUSSELL

The Sunday Times Fast Track 100 & National Business Awards Entrepreneur of the Year 2012 Better Bathrooms was motivated to start looking into business awards largely as a way of acknowledging all the effort put in by its staff. “I just wanted to give a bit of recognition to the guys,” says founder and managing director Colin Stevens. However, they’ve given them far more than just the much-deserved feel-good factor. Not only has it featured in news items and been the subject of several Sky News interviews but it has also had a huge impact on the company’s bottom line. “We’re about 50% up where we thought we’d be on sales by this time.”

“I just wanted to give a bit of recognition to the guys” Colin Stevens, founder and managing

director, Better Bathrooms

Obviously, recognition for your enterprise is one thing. But receiving a personal commendation such as Entrepreneur of the Year 2012 can have an even more dramatic effect on the profile of the entrepreneur. “It has opened up a new world,” comments Stevens. Which it certainly has. Not only has Stevens become a regular fixture in features in papers and magazines, but his award also precipitated his involvement in Oli Barratt’s high-profile Tenner scheme and saw him the receive a personal letter from James Caan. Not at all shabby.

March March 2013 2013 www.elitebusinessmagazine.co.uk www.elitebusinessmagazine.co.uk

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SALES & MARKETING

Naked Wines Winner Smarta 100 2011, the National Business Awards WorldPay Online Business of the Year 2011, Social Buzz Awards 2011, New Media Age Effectiveness Awards 2011

44 46

For Naked Wines, winning awards wasn’t even really on the radar. “It never even crossed our minds to be completely honest,” says founder Rowan Gormley. “It was just a happy surprise when it came along.” It was only at the recommendation of a friend that Gormley eventually decided to start putting Naked Wines forward. This started a bit of a chain reaction. “Curiously, entering one award provoked a whole lot of others as well,” he explains. “You get on people’s radar.” All this attention has had a pronounced effect on the company. “I think it’s been transformational,” says Gormley. “I really think it can’t be underestimated.” Rather than affecting public perception and attracting customers, Naked Wines has found that it has been its professional relationships that have received the strongest boost from this high-profile recognition. One example Gormley gives is when they are soliciting new business with wine-makers. He elaborates: “Obviously, the first thing they do is Google you and when they read you’re an award-winning company then all of a sudden they take you more seriously.”

“Curiously, entering one award provoked a whole lot of others as well” Rowan Gormley, founder, Naked Wines

clock Webby Awards Best Comedy Site/ Celebrity Site 2005, New Media Age Technology Innovation Award 2009, Communicator Awards Award of Excellence 2011 Having featured 30th on Design Week’s most awards won list a few years back, clock certainly isn’t lacking in accolades. One of the first it picked up was the Yahoo! Comedy Site of the Year 2003, a site put together for the comedian Eddie Izzard. “In my acceptance speech I did say: ‘I can’t help but think you were hoping Eddie Izzard would be here to pick this up instead of me,’” quips Syd Nadim, the firm’s CEO and founder. Unfortunately, “We actually lost well though the evening began, it our awards in a taxi ended tinged in tragedy. “We having had a couple actually lost our awards in a taxi, having had a couple too many too many celebratory celebratory beers,” he says. “We’d beers. We’d love love to get them back one day.” This slight rumble preceded an to get them back avalanche of design awards. “Success one day” bred success – we started winning more and more,” Nadim comments. Syd Nadim, CEO & founder, clock “We actually started to become a bit blasé about it.” However, as newer members of staff joined the company, Nadim began to realise that it was important to recognise the efforts of employees who’d never had the chance to attend a ceremony. “They needed to feel that validation,” he says. “They would want to experience the things that the rest of us had.”

www.elitebusinessmagazine.co.uk www.elitebusinessmagazine.co.uk March 2013 March

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Search Laboratory The Sunday Times Top 100 Best Companies to Work For 2012 & 2013, National Business Awards The Santander Small to Medium-Sized Business of the Year 2012 One of the most significant benefits of awards from Search Laboratory’s perspective is the fact that it demonstrates you’ve been carefully assessed and it stands as an effective accreditation of your enterprise. “As the business grows and over time you build the client base, if you go for the right ones they help demonstrate that you’re

“As the business grows and over time you build the client base, if you go for the right ones they help demonstrate that you’re a proper business” Tim Carr, operations director, Search Laboratory

a proper business,” says operations director Tim Carr. “It helps to show that you’re credible.” And, if high-profile awards are a mark of credibility, a significant stamp of approval next to Search Laboratory’s name is the fact they have featured in The Sunday Times’ Top 100 Best Companies to Work For – not once but twice, having just netted a place for the second year running. “Prospects have been really impressed by it,” comments Carr. “I think it helps form that competitive edge.” But it’s not just prospective clients who might be enticed to an awardwinning business. Since being recognised by The Sunday Times, there have been a huge number of job applications to the company’s site citing it as their main reason for wanting to work there. He concludes: “It’s about being recognised as a great place to work.”

The AWARD 46

The National Business Awards As far as cross-industry business awards go, the National Business Awards is one of the biggest. Now entering into its 13th year, the NBAs have recognised a wide range of enterprises including Unruly Media and Ella’s Kitchen. “The motivations for entering awards generally fall into several distinct categories,” explains Alex Evans, the National Business Awards’ programme director. First of all, being an award-winning business is also a powerful way to set oneself apart from the competition. In these recession-driven times, any SMEs trying to win tenders with bigger firms will simply be a face in the crowd. “In that situation, the head of procurement will look for a differentiator,” says Evans. Winning an award is a surefire way of attracting a second glance. “It’s becoming quite a powerful thing, using that kind of recognition to impress investors or shareholders. “Another motivation is the PR element,” comments Evans. “The prize, once you’re recognised, is you can use that win or that shortlist to present yourself as a third-partyendorsed organisation that performs well.” This can go both ways; there’s the traditional external PR, allowing you to promote a positive image outside of the company but Evans feels there is also a strong internal element. He continues: “Obviously, that

All the National Business Awards winners 2012

recognition creates a lot of staff morale, a lot of confidence internally. And it’s become something that is used to attract and keep talent in the business.” Lastly, one of the strongest benefits of winning awards is the amount of exposure that comes with such a high-profile event. “The National Business Awards invests a lot of resources in PR and profile, whether it’s working with our partners such as the Telegraph or Sky News, we have a year-long programme that we use to tell the story,” says Evans. “We can create an opportunity for

a winner and finalists to get a platform.” Since Sky News got involved in the awards last year, they have been using shortlisted entrants such Tom Allason of Shutl and Phil Smith of Cisco as commentators, and, after it was shortlisted for the Orange Innovation Award last year, the NBA team helped Duedil secure a high profile feature in The Telegraph. Ultimately, awards are about recognising when an organisation is well-respected among its peers and the wider community. Evans concludes: “Really the value of awards is all about recognition.”

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SALES & MARKETING

Knowledge is power Not every enterprise wants to get all buddy buddy with its direct competitors. But a little familiarity can help you know exactly what your rivals are doing right – and what you could be doing better

WORDS: JOSH RUSSELL

epending on your outlook, in modern business competition is considered either the lodestar to steer your ship by or a bit of a dirty word. Perhaps – given some associations with the cut-throat business practices of the past – the latter may be understandable but there is no denying that we are all operating in a competitive marketplace. Attracting customers often involves creating a more inviting service proposition than other enterprises – which means that knowing of your rivals are doing is absolutely vital. Even for businesses who don’t want to focus too much on competitive concerns, awareness of the market forms an essential part of forming a brand and assessing its potential market value. “When you start a business, that’s one of the first things you do,” says Adam Goff, founder of professional houseshare provider Capital Living. “Try to understand the competition and where you’re going to fit in the marketplace.” Whether this is practised in a low-tech way, investigating their services from the perspective of a consumer, or by using available analytics information to dissect their market position, it’s not too hard for an enterprise to build up a broad map of the market before their own name is even registered. It sounds obvious but to work out how the competition is serving a given marketplace, it’s vital an enterprise knows the exact requirements of its market and what concerns most motivate its buyers.

“Try to understand the competition and where you’re going to fit in the marketplace” Adam Goff, founder, Capital Living

www.elitebusinessmagazine.co.uk March 2013

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SALES & MARKETING

“If you have to compete on price then it’s a sign you really are struggling”

“Intelligentsia Worldwide’s recommended approach is for companies to first understand their target business decision-makers’ weighted buying criteria,” says the market intelligence firm’s chief executive John Pearson. Understanding what motivates purchasing decisions will be a fundamental element of any business plan and will lay the ground for understanding how well other enterprises are meeting this demand. However, reducing competitor analysis simply to a numbers game isn’t too clever. Ultimately, despite the fact that it runs counter to conventional logic, when companies are locked in a price war, there is rarely a value payoff for the consumer. “It’s woeful to compete on price,” comments Goff. “If you have to compete on price then it’s a sign you really are struggling.” Consumer sophistication is at an all-time high and few customers are likely to be won over by bargain-bin prices alone. Which means that competition is about offering something that your rivals don’t, rather than simply offering it for a budget price. Fortunately, the real strength of competitor analysis is not to aid businesses in scraps over similar service provisions but to identify opportunities that currently aren’t being met. Pearson explains: “The skill of competitive marketing strategy is to spot a gap, i.e. a combination of buyers’ needs that are poorly served, and then to develop a differentiated proposition to better serve those needs.” Using what you know of your competitors to establish differentiators is a much healthier way of approaching competition, not only promoting market diversity but also making it easier for consumers to grasp exactly how your service is better positioned to serve their needs. You know what they say. A little competition never hurt anyone. And when employed in the right way, competitive concerns can actually do a huge amount of good for your target audience by identifying areas in current service provisions that are lacking. But keeping abreast of what your competitors are up to doesn’t mean you need to have a set-to over every mutual offering. Instead, it’s a vital opportunity to test what you’re delivering and find ways you can improve.

Adam Goff, founder, Capital Living

Opportunity knocks Capital Living, Adam Goff, founder

It’s very easy, if you’re a dodgy landlord, to treat tenants badly and get away with it because they can’t write about you; they can’t give you a bad review on TripAdvisor because you aren’t an entity. Buyto-let properties are typically quite run down and cheap. Inevitably, you’re looking at properties that aren’t loved – they weren’t homes. The little things, such as being freshly painted or looked after, all the little details in the house sorted out and nice furniture. These little things are left by buy-to-let investors and renters; there’s no pride of brand attached to it. It’s just a numbers game to them. For me, it was very much spotting that. When I looked at this market, I was focused on building a brand and a reputation that we’d stand behind. I saw such variation in products. I didn’t understand why, if you rent a flat, you go and look at five wildly

“Buy-to-let properties are typically quite run down and cheap. Inevitably you’re looking at properties that aren’t loved, they weren’t homes.”

variable properties. Now, when you look at us, you get a standard. People look at a house with us and then they’ll go away and three weeks later they’ll rent another one because they know the bed they’re getting, the furniture they’re getting, the colour scheme. Do I know what my competition is doing? Yes, I do. Do we alter the product we give based on what the competitors are doing? Yes, we do – if we stood still we’d lose people. But, more importantly, we invest a lot in our brand. That’s really where we’re pushing the bar and where we’ve found a bit of a gap.

www.elitebusinessmagazine.co.uk March 2013

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SALES & MARKETING

Knowing how to pitch and present is a vital skill for any entrepreneur. And, as with any skill, practice very much makes perfect

PRESENTATION IS EVERYTHING WORDS: JOSH RUSSELL

eople start their own enterprises for a variety of reasons. But whether you’re in it because you have an innovative product idea, you want to be in control of your own destiny or have a totally unique revenue model, there’s one unifying factor that all ventures have in common; at some point their success will live or die by a pitch. For this reason, it’s vital to keep skills at their sharpest to ensure every presentation is pitch perfect. We all have varying aptitudes for public speaking. While the stereotypical image of the entrepreneur will conjure up pictures of an eloquent extrovert, completely in his or her element in these high-pressure situations, like most stereotypes it fails to cover the real breadth of personalities out there. But even if you’re not entirely at home when it comes to public speaking, there are ways to turn the

www.elitebusinessmagazine.co.uk March 2013

situation to your advantage. Before even going out in front of an audience, something a good presenter should be asking themselves is if they’re feeling nervous. If the answer is ‘yes’ – good. It may not be the conventional perspective but suffering from a little nerves can actually be a good thing. “Even the best presenters in the world suffer from nerves,” says Susanna Simpson, the founder and managing director of Limelight PR. “Use this as a positive.” She explains that the sensation of anxiety is related to that of anticipation – adrenaline pays a huge part in both states and means it can be easy to use the momentum of nerves to switch into viewing the situation with excitement. She continues: “Removing the fear in this way will help you to take Susanna Simpson, control of the situation, not let founder and managing director, Limelight PR the situation control you.”

“If you do make a mistake, don’t let it throw you off”

SALES & MARKETING

“Know your audience and tailor yourself to who you are speaking to”

Presentations aren’t a soliloquy; when somebody is presenting to an audience it’s important to be aware that they are engaged in a dialogue. A key presentation skill is being able to keep the audience at the heart of the process. “Know your audience and tailor yourself to who you are speaking to,” comments Simpson. While the nuts and bolts data or the overall vision may seem like the most important thing to you, your audience’s only concern is going to be where they fit into things. In this scenario, every bit of feedback is a vital opportunity for the individual presenting. “You have two ears and one mouth – use them in that ratio.” However, as important it is to get things right, an equally important skill is learning how to manage things when they don’t feel like they’re going your way. First off, it doesn’t pay to dwell excessively on mistakes. “We focus on our own behaviour far more than other people do, which means we often overestimate its impact,” Simpson remarks. In actual fact, errors often aren’t as noticeable as you may think; largely, an effective

presentation means not allowing the odd snag here and there trip you up. “If you do make a mistake, don’t let it throw you off,” she says. It’s also worth bearing in mind that a presentation plan isn’t a set of shackles. When presenting, an entrepreneur should feel able to deviate from it when needs be and not beat themselves up when they do. “Those who you are presenting to don’t know your presentation so they are unlikely to pick up on anything you miss or accidentally leave out,” says Simpson. Ultimately, a presentation that sticks too rigidly to a plan will simply end up seeming fragmented and unnatural as a result, so fluidity and flexibility are vital. As Simpson comments: “Just keep moving forward with confidence.” Obviously, the most important part of a presentation is the end the individual is trying to achieve. Essentially, any pitch is an attempt to secure certain outcomes and it is vital that the presenter ensures these outcomes inform every step of their presentation. “Know what you’re going in for,” comments Simpson. “People often lack confidence in confirming

next steps.” In these situations, being clear and direct can help an entrepreneur deliver a pitch that has the required impact. “Ensure you end with a concise call to action that you have practised and prepared in advance to make sure you finish on a high.” But, no matter how many pointers you can pick up, there will never be as useful a learning resource as the presentation experience itself. Which is why it’s worth making the most of the opportunity they offer and reflecting at points on the lessons they have taught you. “Look back to learn more going forward,” remarks Simpson. “Taking the time to look back after three months, a year or even three years can help you improve your presentations and presenting skills.” There are no magic formulas for delivering a successful pitch but it is worth bearing in mind that delivering an effective presentation is an art and like most arts it can be practised and refined. If they take the opportunities available, anyone can become an effective presenter and soon be winning over people with ease.

March 2013 www.elitebusinessmagazine.co.uk

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Weathering the storm

If the threat of redundancies is on the horizon, battening down the hatches and boarding up the windows may not be the best approach. Instead, engaging directly with staff can be a better way to avoid long-term structural damage

iven the recent news that Britain has been stripped of its triple-A credit rating – not to mention that the pound fell to a two-year-low as a result – it seems that economically it’s not quite clear skies ahead. Fortunately, few businesses will be faced with such a stark future that they’ll be looking at large-scale redundancies but for those that are, it’s worth knowing there are plenty of ways you can work with your staff to prepare for inclement weather.

“Including staff in the process often reduces the chances of them feeling they have been intentionally kept in the dark”

WORDS: JOSH RUSSELL

Andrew Cowler, conciliator, ACAS

When the barometer’s reading wet and windy, one of the first things you’re going to want to know is how soon you should share your concerns with your staff. “When employees call us, they very rarely complain that they’ve been consulted too early,” says Andrew Cowler, a conciliator at ACAS, a non-profit organisation that helps resolve employment disputes. Including staff in the process often reduces the chances of them

March 2013 www.elitebusinessmagazine.co.uk

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PEOPLE

feeling they have been intentionally kept in the dark. Cowler continues: “Staff can normally tell if something’s not quite right or if someone’s trying to pull the wool over their eyes, so honesty and being really frank and open is probably a good idea – without being tactless or scaremongering.” But there are other valid reasons, staff morale aside, for letting your team know early. Employers are obliged to provide a reasonable consultation period and the longer staff have, the more solid your legal standpoint. “It has to be with enough time to be effective and meaningful as a consultation process and there are legal minimums if it involves more than 20 people,” says Cowler. More significantly, however, being open with your staff provides valuable time for staff to find different, more creative ways to approach cost-cutting or address shortfalls. “It can bring out ideas that may lead to the redundancy situation being avoided completely,” explains Cowler. “Invite people to be a part of the solution, rather than just victims of a bad situation.” Including staff in this process can recognise the valuable knowledge they might have about the ins-and-outs of the business. This can take different forms; for example, there may be staff within your organisation who have a desire to change their working pattern but have hitherto felt like it wouldn’t be an option. Cowler explains: “They might jump at the chance to drop a couple of days a week and neither side really knew that before the opportunity came up.” Often, the ingenuity of the staff may mean that they see potential solutions that their managers are unable to. “They may have ideas for multi-tasking or putting something in place that would make efficiencies without the need to get rid of people,” he says. Another method useful to minimise the human cost of redundancy is

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“Invite people to be apart of the solution, rather than just victims of a bad situation” Andrew Cowler, conciliator, ACAS

redeployment. It’s worth noting you can’t necessarily force people to take positions that aren’t equivalent to their current roles. “You couldn’t say to somebody, ‘You can’t work 40 hours a week; we’re going to put you down to 20,’ because that might not be seen as a suitable alternative position,” Cowler warns. But it is worth spending the time talking to staff, looking at their skill-sets, their desired work patterns and asking whether they have identified any other roles they think they’d fit. “If there are suitable alternative roles in terms of redeployment, it’s much better to do that and retain the skills within the business than to make people redundant.” Unfortunately, even after the most inventive attempts to keep a hold of talent, sometimes redundancies become entirely unavoidable and at this point it’s not as simple as handing out termination notices. An employer needs to bear in mind that redundancy in itself is a very expensive process and because of this it is absolutely vital to plan ahead. “There is no point paying out lots of money in redundancy to get rid of six people from one department then in six months times realise that’s where the growth is now,” says Cowler. Additionally, while from a legal perspective it is up to the business to decide where it cuts roles, it’s important to have a clear and transparent selection process. “It needs to be something objective and that can be measured and evidenced,” Cowler explains. “Productivity, aptitude for work, skills and qualifications; they’re really the key ones that can be backed up and explained.” This serves two key functions. Firstly, it means, in the unlikely event the decision was legally challenged, that there is a record supporting any decisions made. More importantly, however, it means employees can trust that there is an accountable process in place. He continues: “It’s much easier for the employees to accept what’s going on and why it’s happening if it can be justified.” Despite appearances, just because the worst of the storm has passed that doesn’t mean the effects aren’t still felt. An oft-experienced after-effect in these situations is the ‘survivor syndrome’ that commonly accompanies bouts of redundancy. “It is something we come across, people that genuinely feel guilty for staying in the business,” says Cowler. But the important thing is to communicate with staff throughout the redundancy process. “It’s a case of actually thinking about how is this affecting people and checking in on them,” he says. “Because that’s the most important thing – that they feel engaged and included.”

01/03/2013 18:08

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The

Great L ove debate WORDS: HANNAH PREVETT

WORDS: HANNAH PREVETT

iven the amount of time we spend at work, it’s little wonder that many people find themselves in relationships with colleagues. Indeed, it’s estimated that roughly a third of employees have had a ‘romantic liaison’ with a colleague, and, moreover, that somewhere between a fifth and a third of people meet their spouse through work. Hell, even Michelle and Barack Obama met at work. With statistics like this, amorous inter-colleague action is almost certain to be on the menu as a company grows and recruits more staff. But it needn’t always be a bad thing. In fact, there are many positives associated with having co-workers hit by Cupid’s arrow. For one, having a spouse, partner or even a love interest at work can increase retention. Seeing the object of one’s affections at the watercooler each morning can be a great motivator for going to work, says John Readman, commercial director of Search Laboratory, a fast-growing search software firm. “I think it benefits the business because

Romance and the office: should it really be a case of never the twain shall meet?

“I think it benefits the business because they’re more likely to enjoy their work – and stay for longer too. I think that’s a big plus”

they’re more likely to enjoy their work – and stay for longer too. I think that’s a big plus,” says Readman. Search Laboratory accepts the inevitability John Readman, commercial director, Search Laboratory of office romances as it employs a high number of single, young people. “It isn’t proactively encouraged, but neither is it frowned upon to become involved with a co-worker,” explains Readman. “If you want to create a culture in a business, you have to do a lot of socialising with the people you work with. We even fund a lot of the socialising, because when you’ve got new people joining all the time, there’s always new staff and people who need to get to know each other.” Of its 130-strong workforce, Search Laboratory already has three official couples – and potentially others under the radar. “If you get a load of smart, like-minded people in the same room and they all spend a lot of time together and get drunk together, it’s just going to happen.” There may perhaps be another reason that Readman is so openminded about office romances: he met his wife at work when they were working for another entrepreneurial technology company, QAS, which was eventually sold to Experian. “She was a recent graduate and I was a top salesman,” says Readman.

March 2013 www.elitebusinessmagazine.co.uk

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“When people are in a new relationship, it makes us giddy, it makes us excited, and I think when you apply those elements to a working environment, it really does distract you” Michelle Dewberry, entrepreneur and Apprentice winner

”I actually spotted my wife the day she came for interview and I went to the hiring manager and suggested it would be a good idea if she got the job. Fortunately, she did get the job and we got together a few months after she started.” But not all inter-office liaisons read like a Jane Austen novel. Entrepreneur and Apprentice winner Michelle Dewberry had a high-profile workplace relationship when she dated fellow contestant Syed Ahmed. “We fell into a relationship based on the unnatural surroundings of being on The Apprentice together, where we were very much isolated from normal life,” Dewberry explains. “With the benefit of hindsight, it didn’t work out, and I wouldn’t involve myself with a work colleague again,” she continues. “I know that sometimes you can’t really help who you’re attracted to, but as much as is humanly possible, I would always try to avoid an inter-work relationship.” One of the pitfalls of being in a relationship at work is that it can serve as an almighty distraction, says Dewberry. “I think if you want to be successful in the workplace, focus is a key attribute that you need. And when people are in a new relationship, it makes us giddy, it makes us excited, and I think when you apply those elements to a working environment, it really does distract you,” she says. The other aspect that needs to be taken into account is the feelings and welfare of co-workers, Dewberry points out. “I think people involved in an inter-office relationship need to maintain a professional distance from one another in the workplace, and I would make sure that it never compromised any of my colleagues, either,” she says. Hannah Ford, a lawyer in the employment team of Guildford-based firm Stevens & Bolton said employers need to make sure the concerns of all of a company’s employees are catered for – not just those in the relationship. “You could potentially have issues of making other employees feel uncomfortable in the workplace. All employees have a right to a professional working environment,” says Ford. Other problems can arise when a relationship is undertaken between a manager and one of their subordinates, she warned.

“You can potentially get other employees raising concerns about the relationship and preferential treatment,” she says. And, of course, as Shakespeare once wrote, “The course of true love never did run smooth,” and it’s a sad inevitability that some relationships don’t work out. This is when employers need to be extra cautious about former-partners commencing legal proceedings, says Ford. “If the relationship breaks down, that’s the point at which claims can crystalise, with employees claiming they’ve been demoted or subject to any sort of detriment as a result of their previous relationship with a superior.” She also urged caution around confidentiality. “If it’s a junior and a senior in a relationship, how do you restrict confidential information you would normally restrict?” she asks. How companies ensure that the more junior member of staff is not being privy to sensitive company information, for example. So, how can businesses best handle the inevitable budding relationships between work colleagues? Firstly, accept it’s going to happen, says Ford. In the States, they have tried a much more prescribed approach with ‘Love Contracts’, which indemnifies the company from the ramifications of a relationship breakdown says Ford, but it’s unlikely they’ll catch on here. “It’s a question of having good policies in place,” says Ford. “Businesses must ensure they have a good staff handbook that deals with the manner in which employees are expected to conduct themselves,” she explains. “It’s about having clear and communicated policies.”

www.elitebusinessmagazine.co.uk March 2013

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01/03/2013 18:09

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TEAM TRANSFORMER Martin Reed

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

Leaders of tomorrow

With growth at the top of the agenda for small businesses, figuring out who will lead the company into the bright, new world is a rather tall task

very business wants to grow, but with 60% of companies reporting a leadership shortage in 2012 according to research by Ernst & Young – an increase of 40% from the previous year – how can you be confident that your business is identifying who will be leading your company’s next growth spurt? Identifying who your next leaders are, or could be, and then managing that talent has a quantifiable connection to your company’s financial performance, but very few business owners have a strategic plan to ensure they won’t be left high and dry when the next generation of leaders are required to take the reins. Ultimately, if your business fails to implement talent management plans, growth becomes impossible. Studies show that high-performing companies tend to manage their talent more effectively than their lower-performing counterparts. So,

how do you make sure you don’t lose that growth momentum? There are practical measures you can take to make sure your talent management programme fits your company’s future requirements. The first step is to increase your awareness of talent within your own business. Instead of looking externally for promising candidates, it’s much more efficient to identify and develop talent already within your organisation, thereby reducing recruitment costs, inspiring loyalty and encouraging current employees to commit fully to the future of the company by looking upward for their next career move instead of looking outside the company. In order to achieve this, you need to know what you’re looking for. In other words, you need to develop a record of skills and leadership competencies specific to each role. Identify the most important success factors.

“Technical skills are the easiest to quantify, but the best technical skills aren’t necessarily the most important aspect of a leadership role”

of companies reported a leadership shortage in 2012

www.elitebusinessmagazine.co.uk March 2013

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Think about what kind of person performed well in the role previously. What kind of person didn’t? What are the major challenges the team faces and what kind of person will best lead through those challenges? Many companies select the next candidates for leadership roles by choosing the employee who possesses the best technical skills to succeed a leader who shares those technical skills. This is often because technical skills are the easiest to quantify, but the best technical skills aren’t necessarily the most important aspect of a leadership role. Our experience as a psychometric assessment company, working with thousands of businesses to maximise their talent

management programmes, shows that the majority of leadership issues are to do with behaviour rather than technical competencies, so having a structured framework in place to identify which soft skills are important for each role offers a constructive solution to a nebulous problem. Communication skills, an ability to manage junior members of staff, a strong relationship with customers or clients, and the ability to adapt well to change are often skills that contribute more significantly to a new leader’s success. Identifying which attributes you want to encourage and hone will make your talent management strategy much more streamlined

and efficient and, for an SME, is absolutely vital to allow you to make informed decisions about who to train and where to invest your development budget. If you’re struggling to know where to start, or how to assess the skills you’ve identified as being key, there are various tools available that can help you identify core skills and inject objectivity. A tool such as the Thomas International 360, which provides information on specific competencies by gathering feedback from both the candidate and anonymous peers and managers to offer a complete picture of an individual, can help you identify individuals with the right qualities to become leaders of the future. Resources like this can be useful as the basis for development work with managers, leaders, supervisors and promotion candidates. Using this type of framework can help highlight issues that would otherwise remain undiscovered, address sensitive issues in an objective way, open up a constructive dialogue between current, and potential future, leaders and give managers insight into competencies to develop. Simply taking the time to assess what you’re looking for and how you’re going to measure whether you’ve found it in particular individuals will give you more control over how your business is going to grow and develop in the future. Adopting a more disciplined approach to talent management does take time but will give you the peace of mind to know you’re thinking strategically about the future of your business. Successful companies take a longer-term approach to leadership development, and extend their succession planning beyond their current leaders to encompass other high-potential employees across the organisation. By factoring in a more structured framework to develop talent internally and identify key competencies for each leadership role, alongside utilising tools to assess, measure, feed back and act on insight gathered, your company will be in the strongest position to ensure its continued – and consistent – growth.

March 2013 www.elitebusinessmagazine.co.uk

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Driving Global Innovation

01/03/2013 17:15

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01/02/2013 11:57

WORDS: JOSH RUSSELL

TECHNOLOGY

Scarcely a moment goes by on the tech scene without some titillating tidbit bubbling up through the press. For example, rumours that Apple is getting into the smartwatch market is enough to have many a technophile drooling. But when you mention that Polytron Technologies have invented a prototype for a transparent smartphone, it seems like some serious dehydration is on the cards. Youâ&#x20AC;&#x2122;ve got a long wait on your hands for either of these delectable dishes but, while you wait, how about a few choice gadgets to whet your appetite?

great for catching up on your glossies, but also an affordable and effective option for streaming your TV shows

Barnes & Noble Nook HD The tablet market is becoming increasingly diverse and one of the most interesting handheld ecosystems is the one in which the Nook HD dwells. The latest offering specced toward a high-quality reading experience, it comes in only second to the iPad in terms of resolution, providing a 244 ppi display at a wallet-friendly ÂŁ159. This means the Nook HD is not only great for catching up on your glossies, but also makes an affordable and effective option for streaming your TV shows.

March 2013 www.elitebusinessmagazine.co.uk

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TECHNOLOGY

QuoteRobot QuoteRobot’s name is a bit of a misnomer. Whether or not it can truly be classed a robot is a matter which lies solely between it and its robo-god, but either way QuoteRobot certainly ain’t no quote drone. Not only can it help you compile quality proposals, it can also be used to track how many pitches you’ve won, your workload and your receivable income, and, when it’s time to claim, it can also help you formulate your invoices. Now that’s artificial intelligence.

Blimp Project management can be something of a catch-22 scenario. The tools brought in to manage workflow can themselves end up becoming something of a workflow hassle. Perhaps one of the most appealing things about Blimp is its simplicity, both in terms of its workflow processes and the pleasing subtlety of its user interface. Uniquely, it also shows a progress bar for each goal, offering an instant appreciation of where your project is at. Simplicity is definitely the ultimate sophistication.

BlackBerry 10 The last few years haven’t been kind to BlackBerry. But the newly monikered firm has come back swinging. Its first smartphone, the BlackBerry 10, features plenty of innovations without sacrificing its predecessors corporate-friendly image. Elements such as its Hub – a unified inbox for texts, tweets, emails and updates – and BlackBerry Balance, which allows you to partition your business and personal worlds, certainly show the Canadian company isn’t lacking in ideas. Will it be enough to turn its fortunes around? Only time will tell.

March 2013 www.elitebusinessmagazine.co.uk

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TECHNOLOGY

WORDS: JOSH RUSSELL

Transcontinental conference Once reserved for the select few, videoconferencing is finally coming of age, uniting multinational businesses and acting as the focal point for the newest wave of collaboration software

ideoconferencing has become a big part of the way many companies do business – and not without good reason. “It’s not surprising that people are adopting videoconferencing at a rapid rate,” comments Sean O’Brien, EVP of strategy and communications for PGi, the US-based multinational provider of meeting solutions. With rising levels of mobility, as well as an increasing trend for flexible and home working, the demand for effective remoteconferencing solutions has never been greater. In addition, O’Brien also feel it tends to offer a better quality of meeting than other solutions such as instant messaging and

teleconferencing, with staff feeling more engaged in the process because it more closely represents natural meetings. “Video in general happens to be a great technology for bridging time and distance and getting that more human connection,” he says. Traditionally, the videoconferencing market has been dominated by room-based solutions and while these served a valuable function they weren’t without clear drawbacks. “Business users like video because it drives more efficient meetings,” says O’Brien. “But the reality is that room-based systems are expensive to install, they’re expensive to maintain and they don’t travel with you.”

“The reality is that room-based systems are expensive to install, they’re expensive to maintain and they don’t travel with you” Sean O’Brien, EVP of strategy and communications, PGi

March 2013 www.elitebusinessmagazine.co.uk

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TECHNOLOGY

He claims that providers such as Cisco and Polycom have found their traditional, room-based videoconferencing solutions are suffering in the current economic climate because they’re just too expensive. In contrast, cloud-based and mobile solutions have proved to be incredibly lucrative. He explains: “It’s a combination of price, value and it’s also a way to democratise the video technology so everyone within an organisation has access to it; it’s not just the C-suite executives.” To really understand the popularity of these videoconferencing solutions, it pays to talk directly to the end-user. Given that professional housing provider Capital Living was built upon a foundation of cloud-based tools, videoconferencing is very much its cornerstone. “We work in lots of different locations and we work remotely,” says founder Adam Goff. “But if we can see each other it can become a very focused organisation.” He explains that, given they are a multinational company, visual contact is a hugely important tool to allow them to work effectively together. He continues: “We make it almost obligatory that you can see the person and interact with them.” “What I like about videoconferencing is that it can be more productive,” comments Goff. “For example, I can have four people editing a document at once online and we can all be videoconferencing at the same time.” In recent times, the organisation has made the switch from using individual tools such as Skype for video-chatting or Dropbox for file-sharing to using the more And being at the centre of the conversation unified approach offered by Google Apps for means users can find new ways to utilise the Business. “To go from email to video chat, it’s one tools. One application Capital Living has found for button; it’s not opening new software or changing videoconferencing software is using it to screens because it’s more integrated,” he says. train new members of staff. “A new member “There are solutions out there now that just tie of staff might shadow a manager online while it all together very nicely. It just feels more normal they’re doing tasks that this person is going to – a bit like an office space would.” have to do,” explains Goff. “They’ll screen-share iMeet, PGi’s flagship application, is and then they can talk through what they’re also particularly focused on delivering this sort doing.” This means that not only is one not of integrated experience. “Collaboration helps having to look over the other’s shoulder but they foster a fluid exchange of ideas and information are able to make use of note-taking applications within an enterprise,” explains O’Brien. iMeet is and other software at the same time. None of this part of a wave of new products which recognise was dictated by a top down decision. Goff Adam Goff, founder, Capital Living that an application delivering one isolated continues: “It’s not like we told them to – people function creates a jarring gap in the user just used it that way naturally.” experience; whether providing screen- and file-sharing, file-storage, But there is an unspoken question in this debate. While collaborative notes or social-network integration. Fluidity of videoconferencing is providing an increasingly viable alternative experience is the key phrase. “The experience has been specifically when distance or other circumstances mean a personal meeting designed to let people connect in a more human way; people is out of the question, can it ever equal the value of dealing with are at the centre of the conversation.” someone face-to-face? “Sometimes it’s actually an improvement,” reckons Goff. However, he is quick to qualify this – he still feels there is still a massive value in the personal touch. He refers to a recent team action day where all of the UK staff came to London and had the chance to meet each other in person for the first time, providing a rather novel experience. “You’re actually re-meeting people that you already know quite well,” he explains. “But when you actually shake their hand, give them a hug or a kiss on the cheek – whatever the etiquette is – that cements the relationship.” O’Brien also agrees that digital alone can’t rival meeting in person. “It’s how human bonds are formed, it’s how trust is built,” he says. “We are big believers in the value of face-to-face meetings but we also recognise the fact that people cannot always be together.” And in these cases videoconferencing and other collaborative software are making the experience as true to life as possible. As O’Brien concludes: “These tools and technologies help people to be as productive when they’re apart as when they’re together.”

“We work in lots of different locations and we work remotely. But if we can see each other it can become a very focused organisation”

www.elitebusinessmagazine.co.uk March 2013

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01/03/2013 17:18

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.

Vital statistics

Businesses hold more data on customers than ever. But choosing what to measure can be a minefield, says David Hathiramani

“We’ve been finding different ways to use this mass of data to improve our customer experience, product offering and business”

Suit That Fits started as the world’s first online tailoring company. We have always listened to customers and, taking into account their demands very soon after we launched we developed a network of studios and became multi-channel. We started to take appointments locally to our customers and now have more than 30 studios nationwide. The reason I have started with this is because the business’s roots are online and this channel continues to be hugely important to our business model. By revolutionising the bespoke tailoring industry, we were unique; we were also able to store lots of tailoring data and customer preferences on the system. Everything we did was stored on a database and, since we started in 2006, we’ve been finding different ways to use this mass of information to improve our customer experience, product offering and business. Small businesses don’t have it easy on this front – it is very easy to get left behind. In fact, the only reason why we stored so much data was because of my IT background. I knew we needed to do everything through our system to be effective; this also meant that all of the interactions the business made were stored in our database.

March 2013 www.elitebusinessmagazine.co.uk

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TECHNOLOGY

“Your brain has far more data than even your most sophisticated database – so trust it” 78

Here are a couple of simple examples of useful data collection (though we have around 200 reports on our internal system):

We open new studios across the country based on customer demand. We use Google Analytics to track all of our visitors on our website. With this, we track where they are in the world, and if there is an available appointment for them. If it looks like there is an opportunity to increase the number of appointments we offer, we’ll consider a new studio location.

We track how happy our customers are using the Net Promoter Score (NPS) system. The NPS is based around one simple question: on a scale of one to ten, how likely are you to recommend us to a friend? The score is the percentage of people who

answer nine or ten (promoters) minus the percentage who score between one and six (detractors). Anything positive shows the net effect of customers who will recommend the business. Anything over 50 is a sign of excellence. We ask the question of every customer once they’ve had their garment tailored. We then use these scores to improve as a business – it’s a really clear system so is a great tool to use when motivating our team. There has been a lot of talk about how businesses will be built on data in the future. This can be a bit daunting for small businesses, so here are a few simple tips:

Collect, collect, collect – and store everything for later. You will find that when you have decided what data you would like to use, it’s too late to collect it. Even if you don’t need to use the data right now, store as much broad information as possible – then when you have a lightbulb moment, like, “Hey, let’s send birthday messages to our customers!” you will be able to action it on your past customers.

Keep it simple and clear. The Net Promoter Score (see before) is a great example of this. It is a single number that represents how well you are doing with your customers. This gives the entire team one number that they can all relate to and focus on.

Don’t bamboozle others (or yourself). Sometimes you will find yourself clutching to get some kind of understanding from a spreadsheet, or some pattern from a table that may or may not exist. In my experience, if you are getting to this point, trust your intuition. Your brain has far more data than even your most sophisticated database – so trust it. In summary, every time a customer visits your website or passes through your door, they will give you an insight (however small) into who they are, what they like about your product and service, and how your business – and team – is performing. On an individual level, this is insightful and helpful; on a company-wide level, this is extremely powerful.

www.elitebusinessmagazine.co.uk March 2013

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Website? Twitter? Emarketing? Crm? Facebook? Graphic Design? Ecommerce? Seo?

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01/03/2013 19:33

ADVERTISING FEATURE

ZipYard Altrincham England’s first clothing alterations franchise

Richard McConnell, 33, opened his clothing alterations, repairs and tailoring franchise, The ZipYard, in Altrincham in September 2011. Although well established in Ireland, Richard’s business is the first ZipYard centre in England, bringing on-site repairs and alterations to the high street in purposedesigned premises with fully trained staff. What led you to switch from being a driving instructor to running a ZipYard centre?

“My wife and I wanted to start a family, but my hours as a driving instructor were really unsociable, mainly during evenings and weekends. We didn’t think this would fit in well with family life so I started looking around at different opportunities. We had saved up a bit of money and thought that investing in a franchise was a less risky option.” “We did lots of research in the franchise press and online, and looked into a wide variety of franchises.” Why did you choose ZipYard?

“My wife noticed the ZipYard advert and she thought it was a fantastic idea. We did some research and quickly realised that there was no real competition in our area. Most of the time clothing repairs are done as a bolt-on service at dry cleaners. The turn-around time isn’t very good and they don’t offer a very wide range of services.”

“We went to meet Nigel Toplis, the franchisor, and we visited a centre in Wales. We were impressed by the professionalism of the franchise. The brand is very strong and the shop fit is amazing, from the fitting rooms to the equipment and layout. They really know what they are doing and can cater for every kind of alteration and repair on site.”

“The brand is very strong and the shop fit is amazing, from the fitting rooms to the equipment and layout.” What kind of support have you had setting up your franchise?

“Both myself and my wife, Marie, have received comprehensive training, at the ZipYard training centre in Belfast and more ‘hands-on’ experience in a working centre. The training covered everything from administration and office processes to employment contracts, employment law, pricing, tills, equipment maintenance and the general day to day running of the centre.” “Nigel and his team helped us to source the right premises and even helped us to negotiate the lease. There are so many areas that I knew

nothing about, such as break clauses and other contractual technicalities where Nigel’s team have been invaluable. I’m so glad we weren’t on our own.” How is it going?

“It’s going brilliantly and we are getting busier every week. In the first 6 weeks we saw our sales rise by 600%!” “The reaction from customers is amazing. They seem genuinely ecstatic that we are here and their faces light up when they come in to the centre. They are delighted that we can breathe new life into clothes that they can’t wear or that are damaged in some way.” What are your future plans for the business?

“Once we’ve got this centre up and running to full capacity we would love to open up a second one. Marie would also like to get more involved with the business once Darcey has grown up a bit.” Would you recommend a ZipYard franchise to potential franchise owners?

“Absolutely, no doubt about it. It is one of the most unique franchises available, with a professionalism and quality that just shines through.”

Contact Janet Matthews t: 01530 513307 e: info@thezipyard.co.uk Total Cost: Approx. £33,000 + VAT plus shop fit

www.elitebusinessmagazine.co.uk March 2013

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â&#x20AC;&#x153;Being your own boss is hard work but very gratifying. Having the opportunity to make your own decisions is very satisfying but knowing you can rely on the franchise group gives you the confidence to approach situations with ease and a shared experienceâ&#x20AC;? Kevin Old, Franchise Owner of Bournemouth

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01/03/2013 15:04

FRANCHISING

Zero-fat and dessert may seem like mutually exclusive terms – but one franchise is bringing healthy treats to the nation

Franchise in the spotlight: 82

Yogberries WORDS: JOSH RUSSELL

ruly guilt-free desserts are few and far between. In light of this, it’s hardly surprising frozen yoghurt has firmly captured the imagination of British consumers. The tart yet tasty treat is rapidly becoming a firm fixture in the UK and it’s an excellent opportunity for new brands to make their mark on Britain’s high streets. Yogberries, one of the earliest trailblazers of this frozen phenomenon, has already built up a very loyal customer base in the north-west and now the froyo makers have got their hearts set on being the nation’s favourite healthy snack. For Sarah Bradley, the co-founder and managing director of Yogberries, and her co-founder Matthew Agass, a background in food preparation and hospitality management formed a great foundation. However, experience isn’t everything; without a passion for quality, nutritious food, Yogberries might never have come to fruition. “We both had a keen interest in healthy eating and premium organic food,” she explains. “That’s originally

where our interest stemmed from.” Frozen yoghurt has had a presence on the palate of our Antipodean cousins for some time and it was there that the Yogberries seed was first planted. After graduation, Bradley and Agass spent a year in Australia, travelling for a period and then settling and working in Melbourne. “I got a job as a business development manager at a fairly new restaurant so I had quite a keen insight into actually developing a business in its early stages,” she says. “I got a firm understanding of what it actually takes to promote a business and try to drive more trade into a restaurant.” At the end of their time abroad, the couple returned to the UK prepared to put the extra knowledge that they’d acquired to work. But reacclimatising to life in the UK involved more than just trading suntans for goosebumps. In 2010, the economic climate was far from clement and positions in the events and hospitality sectors were few and far between. Fortunately, the duo already had something else in

mind. “We already knew that we wanted to set up our own business,” Bradley explains. “We’d discovered the frozen yoghurt product in Australia and knew that it would be the next big thing to come to the UK.” Deciding to act as pioneers for the fat-free dessert, Bradley and Agass immediately began to establish their brand. During their time in Australia, their interest in nutrition meant they had spent a lot of time researching various frozen yoghurt brands and, on their return to the UK, they also took a look at high-profile examples such as Pinkberry and Red Mango. Their knowledge of the product, the market and their aims for the business very naturally informed each element of the Yogberries brand. “It had to be easily recognised; obviously berries are associated worldwide with yoghurt,” says Bradley. “Everything behind it had a lot of thought and consideration, going back to the actual natural food and wellbeing side of the company that we wanted to convey to the customers.” Once Bradley and Agass worked up a business model for their first store, picking a location was no contest – Bradley knew her home town of Hale in Greater Manchester had the exact demographic they were chasing. “It’s a premium product and I felt it needed a premium, affluent location that lends itself well to the area of Hale, with all the yummy mummies and that kind of thing,” says Bradley, laughing. After finding a two-year lease on a property that was just right for their needs, all that was left to do was to open their doors and see whether their faith in their product would be rewarded. “It took off almost instantly,” she recalls. “We were able to build a second store out of the profits of our first just six months after it opened.” While there had always been an inherent part of the Yogberries business model that relied on an ability to scale rapidly, an additional pressure arose that drove a need for rapid expansion higher in the entrepreneurs

www.elitebusinessmagazine.co.uk March 2013

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“We’d discovered the frozen yoghurt product in Australia and knew that it would be the next big thing to come to the UK” list of priorities. In line with the founders’ expectations, the frozen yoghurt industry has taken off in the last year, further driving Yogberries need to capitalise on its market advantage. “We saw six or seven different frozen yogurt companies open just in Manchester alone,” comments Bradley. “We knew we needed a strategy that would get our brand out there as quick as possible.” Fortunately, the benefit of having a tested business model meant Yogberries has leant itself naturally to a franchise model. “It just suits our model brilliantly because we can easily replicate what we’ve done in our corporate stores nationwide.” Yogberries has only recently opened up its franchise but with seven new locations due to open soon, it’s already proving to be the right move for the enterprise. Potential franchisees are encouraged to really do the numbers to see if Yogberries is right for them and, as part of the purchase process, are welcomed to take time to really check out the competition to see what sets the brand apart. And the enterprise has some very big aims. “In terms of numbers, we aim within the next three years to get up to a hundred stores,” says Bradley. “Judging by the enquiries, that may not just be in the UK alone but also in countries further afield.” But while these are lofty dreams, they are far from unachievable, particularly with the increasing amount of respect consumers have for healthy, high-quality food brands. “I think at the moment, everybody is trying to be health conscious,” Bradley says. This means a brand that reflects this passion for nutritious treats holds a very strong position in the changing marketplace. “I think something that creates a social environment, where you can enjoy a healthy product, is key to the recession we’re in at the moment,” Bradley concludes. “It’s a small, affordable luxury that isn’t going to pile on the pounds.”

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01/03/2013 18:20

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01/03/2013 19:42

FRANCHISING

Wise up to the benefits of cloud EB guest columnist Sarah Jackson explains why cloud computing could offer opportunities for franchisors

According to a survey of 1,300 UK SMEs

of SMEs don’t use cloud computing

know they say you should never point out gaps in your own knowledge unless you have to, but I feel I should start by saying that I’m not, and probably never will be, anything close to a computer expert. I know enough to successfully fulfil the IT requirements of my franchise business, but if you were hoping to discuss automatic deprovisioning and application programming interfaces, I’m afraid it’s all Greek to me. What I do know though is how to run a business and how to find the right IT support to achieve the things I want to achieve. For me, IT isn’t so much about gigabytes and binary code, it’s about what computers can do to make the lives of my franchisees easier and how it can help me run my business more efficiently. I think, from that standpoint, I’m probably not dissimilar to an awful lot of business owners. When you talk about ‘cloud computing’ you often see people’s eyes glaze over, but putting all our databases, invoicing and expenditure forms in the cloud has been so beneficial to our franchise – and would, I believe, apply to many other franchises – that it’s a shame potential users are being put off by the tech-speak. According to a survey of 1,300 UK SMEs, 74% of them don’t use cloud computing, and 43% of those didn’t even know what the term meant. So, let me put it another way and use some other terms to explain what cloud computing actually means to the Extra Help franchise:

Support

When I set up Extra Help I knew that supporting our franchisees was the bedrock of the business because as a franchisee myself in the past I have felt unsupported and adrift, so I am determined to let our franchisees know that support and guidance is always on hand; when the franchisees are happy “Putting all supported, you create a business that works our databases, and smoothly as a whole. With that in mind, cloud invoicing and computing offered us an opportunity to provide the level of support that we wanted to. expenditure The databases for all clients, job bookings, staff forms in the information, invoicing and expenditure are all cloud has been stored in the cloud, meaning that if franchisees going through a difficult time and if they feel so beneficial to are they need our support, head office can take over our franchise” the running of their business and offer that

of those didn’t even know what the term meant

March 2013 www.elitebusinessmagazine.co.uk

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FRANCHISING

support until they are back on their feet – something I would have found invaluable a few years ago when my son was ill and I was trying to run a business, and something that’s really only possible with cloud computing. Security

“Commissioning our own bespoke database gave us the freedom to specify exactly which elements we wanted and tailor it perfectly to our business”

Research has found that security problems worry 9% of SME owners when thinking about cloud computing, but it’s a misconception that it’s less secure. With a laptop or desktop computer, all it takes is the hard drive to be lost, stolen or damaged and a wealth of valuable information goes with it. Cloud computing offers data back-up, secure log-in and the servers are stored and managed by companies that are experts in this area – their reputations hang on how secure their ‘clouds’ are so they’re naturally going to be far more secure than flimsy software on a personal computer. In addition, a managed cloud service means we can add or take away account access remotely so when a franchisee joins or leaves the company, access can be easily set up or revoked, giving us much greater security. Structure

Support also extends to letting franchisees make the move from full-time employment to running their own business at a pace that suits them. The way the business is structured means that franchisees can run their business without leaving full employment until their client base has built up sufficiently to be their main source of income. As part of the Extra Help package, franchisees are given a computer, the software they need and training in how to use the database. Cloud computing lets us run a virtual office so franchisees don’t need to be geographically tied to an office and can arrange for as much or as little support from head office as they want. Flexibility

Our database was created specifically for us by a company called Sandpiper Ltd (sandpiperuk.co.uk). Commissioning our own bespoke database gave us the freedom to specify exactly which elements we wanted and tailor it perfectly to our business rather than trying to squeeze ourselves into an off-the-shelf software package. We thrive on feedback from franchisees so when we receive requests for adaptations to the database – for example, franchisees requested easy access to an expenditure form in the database to help them keep an eye on their profit line – we’re able to update and evolve our software. Thereby we can help franchisees run their business the way they want to, resulting in an improved bottom line for everybody. Cloud computing might not be right for every business, but I do believe that every business should at least look at the possibilities it offers without being daunted by the terms and technology. For any company, especially a franchise, where employees are geographically spread out and working remotely, cloud computing can offer the opportunity to run your business more efficiently and with user-friendly software. The cloud isn’t scary or intimidating; it could even be a better way of working. Just don’t try to engage me in conversation about mash-ups and middleware – I’d rather stick to what I’m good at.

www.elitebusinessmagazine.co.uk March 2013

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01/03/2013 18:21

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21/12/2012 16:38

LEGAL

Promotions and giveaways offer a fantastic opportunity to interact with your consumer base. But unfamiliarity with the regulations can easily trip up the unwary

Guiltless

WORDS: JOSH RUSSELL

giveaways

One of the key legal factors you need to consider is making sure you know the manner of promotion you are operating

here are plenty of excellent reasons to run promotions on your product or services, with perhaps the primary factors being associated with raising brand awareness and securing customer loyalty. However, just as you would spend time analysing a promotion from a branding or financial perspective, it’s equally important to understand the legal aspects before forging ahead. The laws of the land when it comes to promotions are dictated by the Committees of Advertising Practice (CAP) – an organisation administered by the Advertising Standard

Authority (ASA) – and its UK Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing, which is colloquially referred to as the CAP code. “The CAP code provides significant guidance on what you should be telling your participants,” explains Claire Hyatt, associate in the commercial team at Stevens & Bolton. “The overarching principles are about the promotions being legal, decent and truthful, and being responsible towards consumers.” This covers a wide remit, everything from how they should respond and when the promotion closes to any potential restrictions on entry.

March 2013 www.elitebusinessmagazine.co.uk

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LEGAL

One of the key legal factors you need to consider is making sure you know the manner of promotion you are operating. “There’s quite a bit of confusion with the terminology – legally speaking the different terms have quite different meanings,” says Hyatt. Most promotional campaigns will be built on at least some of the following factors: the customer is entering to win a prize. That prize is awarded based on random chance. And customers are required to pay to enter. Legally, any promotion that contains all three factors is defined as a lottery. “Make sure it’s not a lottery,” she states. “That’s a really heavily regulated area under the Gambling Act 2005; you have to have licences.” However, many promotions avoid this trap. “The way to get round that is to either run your promotion as a competition or a free prize draw,” explains Hyatt. The first option is to remove the need for payment and run your promotion as a free prize draw; often enterprises are more interested in using promotions to draw in users than drawing down revenue, and boosting the traffic to your website can be far more valuable than a few pennies from a premium rate number. The alternative is to remove the randomised factor and run it as a competition. “You add a skill element,” she says. “It’s no longer by chance so you’ve taken it out of the remit of a lottery that way.” So, are we looking at the source of the ubiquitous ‘no purchase necessary’ clause on consumer promotions? “Actually, you don’t have to say that any more,” reveals Hyatt. The important thing is that consumers aren’t charged to enter a draw; tying a promotion to a commercial product is perfectly acceptable as long as the consumer isn’t paying any extra for the promotion. By way of example, Hyatt talks about a promotion run on a soft drink. “If I had to pay 50p to buy the can, which is the only way I can enter the promotion, that’s okay,” she says. “What’s not okay is if they charge me £1.50, inflating the price to give me the chance of entering.” As can be gleaned from this information, the terms and conditions required around promotions aren’t the briefest. This is all well and good when running a promotion online but when you’re trying to squeeze clauses of information on a crisp packet, suddenly things get a lot more tricky. “Obviously, from a marketing point of view, you don’t want to make the thing unattractive because it’s dominated by text,” says Hyatt. “In those cases, the guidance is to provide the key pieces of information upfront as much as you can and a link to the terms and conditions (T&Cs) and where they can be accessed.” Like a lot of regulations, it can seem easier just to assume compliance, rather than making sure you’re covered, but the implications of breaching the regulations can be costly indeed. “For the CPRs I just mentioned, the penalties for the breaches are quite severe and include fines and imprisonment,” comments Hyatt. As a rule, the enforcements

“The way to get round that is to either run your promotion as a competition or a free prize draw”

of the ASA’s CAP codes are less strict but the organisation still takes breaches very seriously. Campaigns in breach will be forcibly withdrawn – embarrassing enough in itself – but the worst cases could also be passed onto the Office of Fair Trading. Additionally, it has one more trick at its disposal – to name and shame regulation breakers. “If they get a complaint about a promotion, they can investigate and they can publish their adjudication online,” says Hyatt. “I imagine that’s the biggest deterrent for a lot of businesses.” Unfortunately, there are areas where the boundaries are nowhere near as clear cut. An area where promotions have really taken off in recent years is social media. It has become a familiar sight to organisations and enterprises offering giveaways and promotions for likes or retweets – but how do these promotions square with current legislation? “The sales promotion itself is still a sales promotion so there’s no reason that the CAP code wouldn’t apply,” comments Hyatt. However, something that is often missed by enterprises is that the consumer regulations aren’t the only legal terms they’re answerable to – they need to be sure that they’re complying to the social networks’ own T&Cs. While she recommends people check the terms for themselves, Hyatt has noticed, for example, that there are certain common practices that have been expressly prohibited by Facebook. “They actually prohibit people from running promotions where winners like stuff or have to post a picture to win,” she says. Another example is that enterprises shouldn’t be running promotions direct from their timelines, instead merely linking to promotions elsewhere. “It seems crazy that’s the case because there are so many people doing that but actually according to the guidelines you’re not supposed to.” But despite some tricky facets, running promotions is an excellent way to boost participation and awareness. Just make sure you’re following the letter of the law.

www.elitebusinessmagazine.co.uk March 2013

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www.elitebusinessmagazine.co.uk March 2013

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classifieds HR

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Firebird IT offer Proactive IT support over the phone to businesses across the UK. We are based in Coventry and offer on-site IT to businesses who need IT staff but cannot afford it full time. We are Microsoft Partners and our typical services are internet based phone systems (VOIP), Computer health monitoring, Cloud based file and email services.

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t: 077 6963 7492 e: info@wake-technology.com w: www.wake-technology.com March 2013 www.elitebusinessmagazine.co.uk

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classifieds Legal

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www.elitebusinessmagazine.co.uk March 2013

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01/03/2013 18:51

the START-UP DIARies

Freelancers want to feel valued Nicola Barron Founder of Homemade London

For some freelancers, you’ll never be more than a source of pay-cheques, but that doesn’t mean that you can’t build loyal relationships and inspire people to go the extra mile for you

or start-ups, forecasting revenue is tricky. You have little experience or past performance to base predictions on and it can be hard to tell how much things like seasonal variation will affect your business. I’m now in my third year of trading and it’s still hard to predict how much is going to come in each month. Even though I now know enough about my customers to know what kind of impact Christmas or the summer holidays will have, I still can’t be sure that the growth I’ve enjoyed over the last two years will continue in year three. This uncertainty makes it hard to commit to hiring permanent staff – and all the costs and various responsibilities that come with them. So hiring and managing great freelancers has been one of the most important things I’ve had to learn to do. Even if you’re lucky enough to be a little surer of your figures than I am, freelancers provide the outside expertise (from digital design to bookkeeping) and the arms and legs that you need from time to time. So how do you find and keep a talented team around you when you can’t put them on the payroll?

www.homemadelondon.com

Look for someone who’s up to the job

Cheap, inexperienced support is most often a false economy. There are times it can be necessary, but if you do go down this route, then get ready to do most of the work yourself. Ask around

The best people I’ve found have always come recommended by someone I trust. I am always asking people to tell me who they respect. When looking for designers, I have always

chosen people whose work I connect with – and more often than not, they turn out to be people I enjoy working with. Don’t overlook the people who fall into your lap

I get a lot of unsolicited approaches from people looking for work. Most of them haven’t even taken the time to understand my business before firing off a CV, but, occasionally, one turns out to be amazing. I read all my emails. Apart from the ones that say they are from HMRC, who want to give me a massive refund – the most implausible scam ever. Give them a clear understanding of your business

Spend some time at the beginning of every new relationship to talk through your business and how you operate, just like you would if they were a new employee. This is especially important for any freelancers who are going to be customer-facing. Homemade London has very clear business values and freelancers need to represent us. I try to get freelancers involved in social evenings and offer training if possible. They want to feel valued. Even creative people need a brief

Last year we had a young, talented graphicdesign graduate on our team. Fresh out of university and buzzing with ideas and enthusiasm, she took on lots of design work from small companies to build up her portfolio, from web design to creating brand logos. I’m naturally nosy and curious about how other businesses work, so I’d quiz her on each of her new projects. Without exception, none of these

companies provided her with a proper brief of what they wanted and, unfortunately, she was too inexperienced to know which questions to ask. Jobs that should have taken hours took days and even at the bargain rates she was charging, costs started to mount up and relationships became tense. When providing a brief, it pays to be as specific as possible – if you’re designing a new website or publicity material, outline all important content you need to include, create a mood board or give clear examples of sites you like and even those you don’t, and set out clear budget parameters. Clear direction and financial limits don’t constrain creativity, they spark it. Be clear about deadlines

Freelancers have lots of competing demands on their time and it’s easy to get forgotten if other people are shouting louder. I don’t think nagging is a productive way to stay front of mind, but deadlines are. And make sure your deadlines are realistic – for you and for them. Show your appreciation

Relationships with freelancers are more transactional than with employees and for some people, you’ll never be more than just a source of pay cheques, but that doesn’t mean you can’t build loyal relationships and inspire people to go the extra mile for you. My motto at Homemade London is ‘We’re not big enough to be ordinary’ – we always hope to exceed our client’s expectations. That’s not easy to pull off if your team doesn’t feel appreciated. Give love and you shall receive it in return – and so will your customers.

www.elitebusinessmagazine.co.uk March 2013

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