Ws hw fullrunner

Issue 1: Spring/Summer 2016

grow get set,

build your dream team ~ getting the best from gen X and gen Y startup secrets ~ entrepreneurs share their success stories rest and play ~ how home comforts are transforming the workplace funding focus ~ 10-page alternative finance special

Smart ideas to make your business bloom

HOME TO NEW AND GROWING COMPANIES

International Currency Solutions F O R M I N I - M U LT I N AT I O N A L S

Think bigger at worldfirst.com

welcome home 2016 – a brand new year. It’s a chance for fresh starts, resolutions and, we thought, the perfect time to bring out the first issue of HomeWork, a magazine from Workspace for New and Growing Companies.

What we enjoyed most about putting it together was getting out there and meeting you. Or rather, some of you: Workspace is home to around 4,000 companies. They include businesses from every imaginable sphere – FinTech, design, digital marketing, fashion, PR and accountancy; brand new startups as well as growing companies and established names… It’s a whole ecosystem of business expertise, of knowledge, of talent and creativity. And it’s literally on your doorstep.

“ We believe there’s never been a greater crossover between the home and the work space” In fact, knocking on neighbours’ doors is actively encouraged at Metal Box Factory, Workspace’s recent development on Bankside, where social media, regular events and even the café are helping to build a sense of community; we take a tour on page 14. For this issue we also caught up with Club Workspace host Leon (page 48), and quizzed Brett Akker, founder of LOVESPACE and Streetcar, about starting up and selling on (page 46). We get down to business, too. You’ll find a wealth of advice and inspiration for entrepreneurs in our Start Me Up section on page 37, plus a 10-page special on alternative finance (page 51)

by FT and MoneyWeek contributor David Stevenson, which examines the new financial landscape and the factors that might shape it in the future.

Last but not least, why the name HomeWork? Because we believe there’s never been a greater crossover between the home and the work space. The modern office isn’t just a place to do business; as a space, we expect it to inspire us, to offer benefits for our wellbeing, to allow us to enjoy some downtime when we need it. (See how fellow Workspacers have made homes from home from their blank canvases on page 30.) So put up those artworks, install that coffee machine, invest in that squishy sofa… In short, we should all stop taking work home, and try taking a little bit of home to work.

If you or your business have a great story to tell the readers of HomeWork, please get in touch at editorhomework@workspace.co.uk

tess

Tessa Clayton, Editor

huge thanks to… ... this issue’s contributors, Jenny Williams, Liz Close and David Stevenson, for sharing their expertise Formerly global campaign director for Nokia, Jenny Williams is a highly experienced coach and trainer who specialies in helping marketing and creative teams unleash their potential. She has written about Gen X and Gen Y’s sometimes conflicting working styles on page 26.

“Intergenerational working is a positive thing,” she says. “When you strip it back to basics, there are differences between the age groups, but the bottom line is that everyone wants to connect and contribute through their work.”

Liz Close’s passion for interiors was sparked when she was put in charge of overseeing her office’s relocation in 1997. The former management consultant went on to found Generate Studio in 2005, and to design the HQs of some of the capital’s best-known up-and-coming firms.

A well-designed work space, Liz asserts, is important for staff retention. “People don’t mind working long hours as long as they like where they work.” She gives her tips for updating your office – without blowing the budget – on page 33.

If you want an in-depth, expert view on alternative funding and how it has changed the UK’s financial landscape, turn to page 51 for “The Long Read: The Alternative Finance Revolution” by David Stevenson. David is a financial journalist and commentator for several leading publications, including the FT, Investment Week and MoneyWeek, and executive director of www.altfi.com, the world’s leading alternative finance news and events service. He is also the author of a number of books on investment.

“I couldn’t work without… a Diet Coke to kick the morning off, a big love of what I do and plenty of walks with my four-legged friend Mr Weller for inspiration.”

“I couldn’t work without… every week having a Friday in it, the prospect of a Sipsmith and Fever-Tree at the end of a busy day, and laughing out loud regularly.”

“I couldn’t work without… my trusty Sonos music system and a blast of chillout music via Spotify. It keeps me from getting too anxious about the usual long list of things to write about!”

contents

14

p.

I am delighted to introduce you to the first edition of HomeWork magazine, a regular look at the trends and issues affecting the New and Growing Companies we are proud to host in our business centres across London. HomeWork will also celebrate some of the great stories and successes that these companies have to tell.

London is one of the most exciting places in the world to work. It is home to nearly five-and-a-half million businesses which, like you, are fuelling the city’s growth and employment. At Workspace, we provide a ready-made network of like-minded, thriving enterprises, offering numerous opportunities for customers to get to know one another and share knowledge and experience.

“London is one of the most exciting places in the world to work” More specifically, we believe that an office should provide more than just four walls. It should be a place where companies are inspired to achieve their goals and which reflects the lifestyle of those who work there: from the personalised design of space, through to opportunities to co-work and trade with neighbours or simply having a place to store a bike. We work hard to listen to the needs of businesses in our space so that we can create a real home for every business on its growth journey.

The way we all work is constantly evolving and Workspace aims to be at the forefront of addressing the exciting new developments in this space. We look forward to continuing to play our role as the Home to New and Growing Companies in London.

I hope you enjoy the read.

Jamie Hopkins, CEO, Workspace

box of delights

How businesses are making connections at Metal Box Factory, Workspace’s £16 million Bankside business hub

story

inside

Networking, team building, plus a peek inside fellow Workspacers’ offices – this issue’s all about you...

start me up Information, inspiration, tips and advice from fellow entrepreneurs - you’ll find it all in our special section dedicated to brand new businesses

Page 37

30 xvy 26 home from home

p.

Pool tables, cocktail bars, chillout zones... We meet the Workspace companies who believe that when it comes to office design, rest and play are every bit as important as work

also inside…

p 8 In the news ~ the big stories and what they mean for you and your business p 44 Bao-house ~ they started at Club; now Aduna are conquering the UK health-food market p 48 And here’s your host... ~ Club host Leon on co-working and the capital’s best hangouts p 60 Show me the money ~ trying to make sense of alternative finance? Informed Funding can help

What do you get when you combine Gen Y’s tech skills and innovation with Gen X’s knowledge and expertise?

A stronger, smarter team, argues life coach Jenny Williams

p.

the long read

MoneyWeek contributor David Stevenson examines the explosion in the alternative finance sector and how small businesses can reap the benefits

Page 51

the big picture

40%

of the workforce will be freelancers, temps, contractors and solopreneurs by 2020

78%

of co-workers are under 40

91%

have better interactions with others co-working

30%

prefer to work normal office hours

“ Talk about trends in the workplace has shifted away from telecommuting and home working, and towards a recognition that, as social animals, we enjoy working together and need working environments we can enjoy too…

“If we’re not going to have home offices,

90%

said they felt more confident when co-working

70%

reported they felt healthier than they did working in a traditional office setting

60%

said they felt more relaxed at home since co-working

50%

maybe we do need office homes�

Data: Deskmag Global Co-working Study. Quote: Will Hunter for BD Magazine

report higher incomes

news talking points

in the

Our roundup of what to expect in 2016, both at home and abroad – and what it means for you and your business

what George has in store The Chancellor’s Autumn Statement laid out the government’s financial plans for 2016. Does it all add up to a case of winter blues? Oliver Deed of Snapdragon Consulting, based at Workspace Kennington Park, crunches the numbers For SMEs, the recent Statement is a case of “steady as she goes”, with additional expenditure on extending small business rate relief balanced by cuts elsewhere. In a nutshell...

Digital tax accounts will become the norm for businesses. If you currently submit a selfassessment tax form, you’ll be switched over to a digital tax account which will allow you to update HMRC quarterly on your activity.

Small business rate relief will be extended to an additional 600,000 businesses across the UK. The Business, Innovation and Skills department budget will be cut by 17 per cent, and some of its business-support programmes could be in line for pruning, or cutting entirely. Programmes such as Growth Vouchers and Start Up Loans might come under pressure, as BIS looks to work within the confines of a constrained budget settlement.

3 million

Larger businesses, with a payroll bill of more than £3 million, will be liable for a new 0.5 per cent Apprenticeship Levy, in order to finance more than three million apprenticeships by 2020 – something Skills Minister Nick Boles has been pushing for.

The reform of business rates, which is currently under review by the government, will be delayed.

The results of this review will form part of the 2016 Budget (most likely delivered in March).

apprenticeships to be funded by 2020

600,000 more firms to get small business rate relief

17%

cut to the Business, Innovation and Skills department’s budget

come dine with us

The next Workspace Business Insight Dinner will take place on 2 March from 6pm in the Mimosa café at Kennington Park.

The dinner is part of the wider Workspace Business Insight Programme of case studies and events, run in partnership with business network Knowledge Peers, and is free to Workspace customers. We’ll be covering “The Internet of Things” and “What’s Next for Business and Social Media”. Find out more by emailing WBI@knowledgepeers.com

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www.workspace.co.uk

Words: Oliver Deed, www.snapdragonconsulting.co.uk

2016 is a watershed year. For the first time since the position was introduced in 2000, we are having a London mayoral election contest that features neither Ken Livingstone nor Boris Johnson.

As London-based commentators lament the loss of two heavyweights from the capital’s political scene, Zac Goldsmith and Sadiq Khan are limbering up to succeed Boris and lead London until at least 2020.

So why does the election matter for New and Growing Companies in London? Well, the Mayor of London has a number of responsibilities that may impact on your business. Do you travel to work by public transport? That falls under the mayor’s remit, with fares and capacity high on the agenda at the moment in London.

Does your job require travel abroad, and do you export your services or products? The mayor will have a big say on airport expansion. Do you struggle to attract talent due to the cost of living in London? The mayor has powers to do something about that. In short, Mayor of London is a position that holds significant executive weight, and either Goldsmith or Khan will hold it come May 2016.

Khan probably has the lower profile. An MP since 2005, he is Labour’s candidate for mayor and starts in pole position in the race. The former human rights lawyer, transport minister, Cabinet member and campaign manager for Ed Miliband fought off competition from Tessa Jowell, Diane Abbott and David Lammy to secure the nomination.

And make no mistake, despite a poor showing nationwide in 2015, Labour’s performance in the capital was not bad. The party also won more London Assembly seats in the 2012 election despite losing the mayoralty to Boris.

Which leads us to Zac Goldsmith. A Tory maverick and Oxford-educated millionaire, he’s a charismatic environmentalist who has turned his Richmond parliamentary seat from marginal to extremely safe on the back of his own popularity.

Goldsmith is a vigorous campaigner against airport expansion, and he backs the principle of “Direct Democracy”. Before putting his name forward to be the Tory candidate for mayor, he balloted his constituents, who gave him an overwhelming mandate to go ahead. He is a popular politician outside his own party and one of the only Conservative Party politicians capable of taking on the London Labour juggernaut. He has also made an effort to woo small businesses, promising to provide them with better broadband, faster payments and more funding from City Hall.

At the moment the polls are close, and frankly it is a nightmare for the political pundits, burnt by the General Election, to try to predict. Only one thing is certain: whoever wins the election will help to shape the future of the capital, and perhaps even the future of the business you own or work for.

“The mayor will have a big say on airport expansion”

HOME TO NEW AND GROWING COMPANIES

Boris? who’ll replace

Will Zac or Sadiq be the next London mayor?

It’s a tough one for the pundits to call...

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location focus

The Print Rooms Situated just off Blackfriars Road and close to Southwark, London Bridge and Borough stations, The Print Rooms has been transformed by a vast rooftop extension into a stunning home for New and Growing Companies. A new café and co-working lounge in the double-height reception are added attractions for businesses looking to base themselves in a bustling Bankside location.

164–180 Union Street, SE1 0LH. Offices and studios from 134 to 1,308 sq ft. For viewings, call 020 7369 2390.

new Three of the latest Workspace developments, in three buzzing locations. Your perfect business base awaits...

Grand Union Studios In a prime West London location, Grand Union Studios is a new landmark development with space for over 90 businesses, just a short walk from Kensal Green and Ladbroke Grove stations.

There’s an on-site café and bookable meeting rooms, and a full-height central atrium featuring a striking art installation with more than 5,000 glass blades that reflect natural light throughout the core of the building.

332 Ladbroke Grove, W10 5AS. Offices and studios from 200 to 20,000 sq ft.

For viewings, call 020 7369 2390 .

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www.workspace.co.uk

Vox Studios

Built on the site of a former Marmite factory, Vox Studios is located less than a five-minute walk from Vauxhall station. The new building has doubled the size of the existing centre, adding an integrated reception, cafĂŠ, event space and co-working lounge to create a destination hub for businesses in the area.

45 Durham Street, SE11 5JH. Offices and studios from 140 to 10,000 sq ft.

For viewings, call 020 7369 2390.

Join the Workspace network Looking for a flexible base for your business? Become part of the Workspace community of New and Growing Companies, in one of our attractive premises in prime locations across London. All new developments benefit from: ~ 24-hour access ~ co-working area ~ bookable meeting rooms to hire ~ high-speed internet and immediate data connectivity ~ building-wide wifi ~ free access to regular business events and seminars ~ on-site cafĂŠ ~ showers and cycle racks ~ comfort cooling system See more, including virtual tours and interviews with customers, at www.workspace.co.uk HOME TO NEW AND GROWING COMPANIES

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talking points

global

warning Jeremy Cook, chief economist at international currency transfer specialist World First, takes a look at the factors that might influence international exchange rates in the coming year Last January it was Switzerland, in May it was the UK, in July it was Greece (again) and most recently it’s been China. 2015 was a busy year for global events that have shaken – and yes, stirred too – the global economy, causing winds that can buffet, or worse, small businesses.

Naturally, these winds are most keenly felt by firms trading internationally but, in truth, they can affect all small businesses.

So, what does 2016 hold? These five issues will be ones to watch as drivers of currency movements over the course of the next 12 months or so:

Far-flung causes, local effects

2. China The wheels on the world’s second largest economy are starting to wobble as it transitions from an economy based around cheap manufacturing to one reliant on consumption. The global effect of a slowing China is prompting concerns over international trade, and high-end retailers like Burberry have already seen profits slashed as a result.

1. The EU Referendum A similar question to the one asked of the Scottish electorate over a year ago, which created uncertainty and hit GBP. Some economists predict that it could cut UK growth by as much as six per cent in the 12 months after the vote.

While the cause often takes place halfway around the world – take the Chinese slowdown, for example – the effect on businesses both at home and abroad can be profound.

These events cause currency volatility, and if you buy or sell overseas, you will feel the impacts. The reality, however, is that the effects are almost impossible to avoid.

Currency volatility can affect you even if you are buying from, or selling to, someone who buys or sells overseas.

3. The Federal Reserve The US economy is in a strong enough position at the moment for the US central bank to begin to reduce the amount of crisis-level support it has been using. This means

interest rate rises, something that the Federal Reserve hasn’t done since 2006.

4. Currency war Central banks cut interest rates to boost growth and make exports more attractive.

Retaliation from others sees currencies devalued and a currency war breakout that could lead to failing economies, inflation and corporate bankruptcy.

5. Oil Oil prices have slumped in the past year but can they remain this low? Markets seem to think not, and a rising oil price will constrain growth in Western economies as consumer spending falls.

Of course, these shouldn’t stop your international expansion plan to become a mini-multinational, but you should tread carefully. You might want to consult an international currency expert, who can help you to protect yourself against these headwinds and any more that may occur in 2016. www.worldfirst.com

“The wheels on the world’s second largest economy are starting to wobble” If you’ve ever wanted to “give something back”, now’s your chance. Workspace is looking for companies to take part in InspiresMe Week 2016, a scheme that allows businesses to reach out and help young people gain experience and confidence in the professional world.

Run by Workspace in conjunction with the Greater London Authority and Business in the Community (BITC), InspiresMe Week is specifically aimed at helping young people gain valuable insight into the inner workings of startups and small businesses so they can learn entrepreneurial skills on the ground.

mentors

wanted

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Last year, over 70 students interned withEWorkspace N UR customers. Some found T themselves REPREfilming podcasts N E at PRA meeting musicians at digital RE ANU U companies, T RE YOagencies U or designing jewellery with expert artisans.

F E H OF T“These small businesses don’t have internship schemes and so it’s harder to gain experience to in them,” says Desiree Hooper, who looks ingafter om

nc n sessio re soon io t a m r nt An info orkspace Ce W r u o y

employability, community and training at Aylward Academy in Enfield. “Last year’s event was fantastic. One of the students told us he was amazed by the fact that people who are young have built up businesses. Being in the workplace with young entrepreneurs really opened his eyes. Qualifications and academic results are important but these are life skills our students will use forever.”

Your business can support young people by hosting one or more students for a four-day work experience placement (15–18 February).

“We’re grateful for anything employers can offer,” says Desiree. “It really could make an incredible difference to a young person’s future.”

To sign up for InspiresMe Week, contact Antonia Williams at antonia.williams@bitc.org For more on Workspace’s involvement in InspiresMe Week and other great events visit www.workspace.co.uk/community

www.workspace.co.uk

www.workspace.co.uk Do you want to know more about Workspace and what it can offer you and your business? Would you like to link up with more than 4,000 other New and Growing Companies based at Workspace locations across the capital? Do you want instant access to a busy calendar of networking events, and a host of useful blogs and articles written by industry experts? Our upgraded website, www.workspace.co.uk, has been designed to offer all that and more, in an easy-to-navigate format. Just visit the home page and click on the banners at the top to explore.

getting around ~ Click THE WORKSPACE OFFER for an overview of what we do and the many benefits and services available to Workspace customers, from free networking events to business-grade voice and internet solutions.

You can also watch video tours of Workspace locations and interviews with customers. ~ Select FIND YOUR WORKSPACE to see an interactive map of Workspace locations and planned developments across the capital.

You can search by the type of work space you need – be it an office, light industrial unit, workshop or studio – and use the map controls to see the nearest tube and rail stations, cycle routes, airports and more. ~ Choose MEETING ROOMS to find out about our London-wide meeting facilities and event spaces. You can book and pay for rooms at the click of a mouse and review previous invoices.

Log on and get involved: our new website is a one-stop destination for all things Workspace-related. Whether you want to find out about free events and seminars taking place in your building or book a meeting room, it’s all at your fingertips

HOME TO NEW AND GROWING COMPANIES

~ Click on CO-WORKING to find out about Club Workspace, our fast-growing network of dynamic business clubs. Select Club Locations for an interactive map to help you find your perfect base, or Join Club for everything you need to know about different levels of Club membership – whether you want your own lockable desk at one location, or the freedom to pop in to any Club across London. ~ Visit COMMUNITY to plug straight into a network of over 4,000 businesses in 80 locations across London. Explore blogs and articles about everything from marketing strategies to the latest tech, plus interviews with Workspace customers in our Read All About It section. Check out the host of free networking and business events on offer to Workspace customers in Get Talking, or choose Supporting You to find out about our partners and the services they offer to give your business a boost.

de-coding

derivatives Complex currency derivatives promise to make doing business abroad easier. But SMEs should tread carefully, says Farah Khalique British companies are increasingly doing business abroad as confidence in the economy rises. China in particular is becoming more important as an import market, according to a Western Union survey of more than 1,000 SMEs. Firms therefore want to manage their exposure to foreign currencies, which can go up or down in value against the pound, to protect their bottom line.

There are a number of ways to mitigate this currency risk. The simplest is to use a derivative called a currency forward, which locks in today’s exchange rate, allowing companies to buy currency at a future date with a fixed rate in mind.

But there is a raft of more complex, speculative products on offer, like “knock out convertibles” and “structured collars”, and this is where problems arise. A customer might find themselves owing a substantial sum of money under the terms of their derivative contract if currency markets move against them.

Banks have pulled back from selling these to smaller customers, focusing instead on larger firms, so ambitious brokers like Afex and Travelex are clamouring to fill the gap. But experts are concerned that compliance and suitability tests at some brokers may be little more than box-ticking exercises.

Abhishek Sachdev, founder of independent derivatives consultant Vedanta Hedging and member of lobby group SME Alliance, says: “[It is] almost a lip-service compliance rather than genuinely trying to understand if customers understand what they’re getting into.”

Sometimes a complex derivative is necessary to manage exposure; a simple forward isn’t always suitable. But if in doubt, seek independent advice.

Farah Khalique is a freelance business and financial journalist with a keen interest in non-bank financing solutions. Read more of her features at www.workspace.co.uk

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Metal Box Factory

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www.workspace.co.uk

box of delights A £16 million development that’s “a wonderful community” as well as a thriving business hub... We lift the lid on Bankside’s Metal Box Factory

The breakout space in the main foyer offers a place to meet, chat or work. Box-like shapes are everywhere, from the steel-framed windows to the caramelised-timber square above the staircase

HOME TO NEW AND GROWING COMPANIES

In the 19th century it was the heartland of London’s light industry; today, tourists, foodies, and a new generation of small businesses and startups are driving the area’s growth…

Bankside has a long history of being one of the capital’s economic powerhouses, and it’s exactly that idea that inspired the creative planning of one of Workspace’s latest locations.

Three years in the making, Metal Box Factory represents a £16 million investment, and is in many ways the place where all of Workspace’s latest ideas, tech innovations and design experience, allied to years of commercial property expertise, have coalesced. Just a couple of minutes’ walk from Borough Market and London Bridge, it occupies the footprint of not one building, but three: a former stationer’scum-tin box manufacturer’s – hence the name; a second 19th-century warehouse with 1930s additions, and a 1950s printing works. With a dash of Workspace vision, not to mention some clever, out-of-the-box thinking by architects Pringle Richards Sharratt, this disjointed jumble of structures has been reborn as a cohesive, handsome, light-filled space.

In place of the steep steps that once led up from the pavement there is now an imposing concrete arch, framing the entranceway beyond;

beneath it, a lighted stone pathway seems to draw you in off the street and into the building’s heart, a five-storey-high atrium – formerly a dingy loading bay. Inside, grid-like windows, with occasional Mondrian-like splashes of red and yellow, visually reinforce the box “theme”.

It’s a sophisticated, well-thought-out space, but the idea behind it was incredibly simple, asserts Angus Boag, Workspace’s development director. “Our starting point is always the same: find out what New and Growing Companies want from their working environment, and then provide it. We’re in constant contact with our customers, and their feedback means we’re always improving our buildings in order to better meet their needs.” In the case of Metal Box, this meant factoring in plenty of co-working space – “It’s one of our more recent developments; we noticed people wanted a different way of working,” says Angus – in the form of a designated Club and breakout seating areas on every floor, as well as ensuring the building’s eco credentials exceeded customers’ expectations.

“A lot of our businesses are very keen that the building they’re in is as green as possible,” Angus explains. “They’re after lots of natural daylight. In smaller office units people like to get fresh air by throwing open a window, instead of relying on air

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“ You have to have an environment that gets you out of bed in the morning and makes you enthusiastic to go to work”

LEFT Co-working at Club TOP The entrance to the main foyer ABOVE The meeting rooms offer state-of-the-art tech facilities OPPOSITE The central building’s facade has been replaced by a striking concrete arch

conditioning. It’s much more sustainable, it uses a lot less energy. Our customers love to be part of that.

They also like it that we recycle a significant portion of our waste and none of it goes to landfill, and our targets are set higher each year.”

Metal Box delivers on those counts, of course, but also factors in something that’s vital to startup and SME success: collaboration. The building’s layout has been designed to encourage people to socialise and network via multiple communal areas: there’s a café, a restaurant next door and plans for a bar; upstairs there’s a games room, another courtyard (on the fifth floor) and a terrace, with incredible city-wide views, on the fourth floor.

Over 150 New and Growing Companies now call Metal Box home, and the place has a vibe that reflect’s Bankside’s unique character – a blend of the traditional and the new, of history and forward thinking. Digital startups pushing tech boundaries are next-door neighbours to fashion designers, greetings card companies, sports agents, financial advisers… Exposed brickwork, original glazed tiles

16

and steel girders hint at the industrial past, while high-speed internet connectivity and building-wide wifi, meeting rooms that can be booked online and come with 55-inch LCD screens and all the latest tech, point to a state-of-the-art future.

6Tribes, one office It’s something Anthony Rose, CEO and co-founder of social networking app 6Tribes, appreciates more than most. His search for office space in London took him to a succession of “dingy buildings with long corridors and no windows – miserable places.”

Anthony originally launched 6Tribes from his flat, “as with any good startup”, but with a team of five (now 14) employees, it became apparent that wasn’t sustainable. “I quickly became despondent,” recalls Anthony. “It was clear that if you were looking for 15,000 sq ft or more, with a bathroom, kitchen, meeting rooms and so on, you were fine, but if you were too small for that, there was nothing.”

Metal Box, then, came as “a breath of fresh air.

Everything’s new and bright.

...

continued on page 20

www.workspace.co.uk

Metal Box Factory

the brief…

Architects Pringle Richards Sharratt were tasked with turning three disparate buildings into one streamlined space. We asked PRS’s Gordon Abbott to highlight some of Metal Box Factory’s key features.

The entranceway: “The concrete arch is exactly the same height as the original twostorey central building, which made way for the foyer. It’s like a visual memory, if you like, and it’s echoed by the timber arch you see inside, over the staircase.”

The foyer: “This was still being used as a loading bay; it had lorries in and was dark and gloomy. We raised the floor level and took out the roof above to let daylight in.”

The extension: “On top of the 1950s printing works we built an extra two storeys, to give another 2,800 sq m of office space. We tried to stay true to the original building by using exactly the same grid, and the same steel frame.”

The stairs: “The main stairs and escape stairs on the north and south elevations are made with cast glass enclosures so they light up at night. It makes the building a bit of a beacon, so you can identify it from afar.”

The roof dome: “It’s ETFE, which is basically two skins of material pressed together and inflated until they’re rigid, like a life raft. It’s a good way of keeping weight down and letting lots of daylight through, and because there’s air trapped between the two layers, it provides insulation too.”

The walls: “Around 75 per cent of the white glazed bricks you can see are original; we hired an expert to find a match for the rest. They had to be cleaned up by hand with a Brillo pad and some Fairy Liquid – quite a job.”

HOME TO NEW AND GROWING COMPANIES

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www.workspace.co.uk

Metal Box Factory

my

working day

Mathilde (right) runs Too Many Cooks, Metal Box Factory’s in-house café, along with her business partner Cinzia. We asked her to tell us about a typical working day, and explain why she’s such a fan of Monday mornings.

6.30am This is when Cinzia – who is the chef as well as my great friend – and I arrive at Too Many Cooks. It’s early but compared to the hours most people work in catering, we live a life of luxury. Our first task is to lay out all the pastries, sausage rolls, cakes and yoghurts, and get the coffee machine running.

We don’t open until 7.30am but often people will knock on the door at 7am; we have our regulars, so we know what they want. Then Cinzia disappears into the kitchen, while I do the meeting and greeting. I’m a morning person, and I’m lucky that going to work isn’t a chore for me, it’s a pleasure. Sometimes a customer will come in and say, “Eurgh, it’s Monday,” and my response is, “Yay! I get to catch up with everyone, and find out about their weekends!”

10.45am Time for a small break. We change the display, ready for lunch, and discuss any last-minute changes to the menu. We always have a quiche, a salad and a frittata on the counter ready by noon; the flavours are different every day. We’ll cook a selection of meat dishes, veggie dishes and fish dishes to order, depending on the day’s menu. Again, it changes daily. Cinzia can turn her hand to anything. I met her when we both worked at La Fromagerie in Marylebone, 14 years ago, and she’s an incredible chef – something magical happens when she cooks.

One day we might have braised cuttlefish with polenta, grilled poussin cooked with paprika and lemon, and pappardelle with oxtail ragout… I’m French and Cinzia’s Italian, but our menu has influences from all over the place.

CLOCKWISE FROM TOP LEFT: Fresh pasta is a speciality; coffee to go; Felix helps out front of house; the lunch menu; customers’ postcards, entered in the café’s summer competition; one of Cinzia’s veggie dishes

HOME TO NEW AND GROWING COMPANIES

12 noon Lunch is pretty frantic, as you’d expect.

Beef tagliata or chicken liver and Tuscano sausages with homemade pasta are always a success. When I first came to London, the supermarkets were still full of pre-packaged food, but people were just starting to talk about having dinner with their family again, and wanting to cook “proper” meals. There was starting to be a real interest in homemade cooking, and how you could make it more fun. It was an exciting time to arrive.

3pm After the post-lunch lull, things pick up again, and we’re busy until we close. People will come for a coffee and just stay and work here. I think sometimes, if you’re a small startup, you just want to work surrounded by people and chatter. We’re lucky that the people at Metal Box are amazing. I’ve always worked in restaurants and in some places, the days feel really long and you just want to go home. This is a great community. It’s like a big family. There are loads of startups here, a lot of young people like us, starting something, giving it a shot, going for it…

And everyone meets at the café. They might say, “I’ve got a problem with this, can you help?”, and we’ll say, “Why don’t you go and talk to Joe over there?” This place is ideal for us. We didn’t want a place where people wouldn’t know each other, or meet each other. We wanted to make sure that everyone would feel welcome and right at home.

“ This is a great community.

It’s like a big family” 5.30pm We’re ready to close up. It’s quite a short day, although we’re just about to start opening late, as a restaurant, on Thursdays. We work longer hours at special times of year, like Christmas, when we do some festive catering.

While we’re doing the cash-up and working out the next day’s menu, we’ll often sit and have a chat with customers who’ve become friends over the past nine or 10 months. That’s the beauty of London – people are approachable, they don’t care about what you do, they’re just keen to have a chat and get to know you. It doesn’t happen often in Italy or France. I feel at home in London.

But after all this time here I’ve still got my French accent. Isn’t that terrible?

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Metal Box Factory

From small beginnings, social networking app 6Tribes has expanded to a team of 14

“ If you want to move to a bigger or smaller office, in this building or another building, it’s like, sure, just let us know” ...

You have to have an environment that gets you out of bed in the morning and makes you enthusiastic to go to work.” Flexibility was another factor on Anthony’s wish list. “As a startup you’re either going to fail or you’re going to grow quite quickly, but either way, you’re very unlikely to have the same number of people in a year as you have today,” he says. “Most office arrangements commit you to lengthy contracts, but how can you tell if you’ll have five, or 20, or 100 people in a few years’ time?” Workspace’s short-term agreements allow Anthony to scale up or down as he sees fit.

“Even within 30 days if you want to move to a bigger or smaller office, in this building or another building, it’s like, sure, just let us know…”

Something tells us Anthony will only be scaling one way. The serial tech entrepreneur – he launched social TV app Beamly, and is a former head of BBC iPlayer – may have struck virtual gold with 6Tribes. Its aim is to cut through the social media “noise” we’re all subjected to daily: the endless baby pics, the Candy Crush invites, the posts from people you haven’t seen since 1998…

“We realised the demand for something completely different,” says Anthony, “and so instead of connecting you with people you went to school with, 6Tribes connects you with people who share your interests, lifestyle or location. So if you’re

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a coffee geek, or you’re into fashion, or you love gardening, or you’re in the same business or location and so on, you can join a tribe for that, or start one.”

Metal Box is proving a useful testing ground.

“People here help each other,” Anthony explains.

“We can knock on doors and get feedback, say, ‘Hi, how are you finding the app?’. We’ve got friendly neighbours, who we can share stories with, talk to, who borrow stuff from us or come and test their own products on us, and vice versa.

It’s a really wonderful community.”

A very secret agency

ABOVE Anthony Rose of 6Tribes OPPOSITE Private view: a rare glimpse inside the Ai office

Anthony Noguera, on the other hand, is unlikely to be asking his fellow Boxers in for a cup of tea any time soon. That’s not to say he’s unfriendly – “I did knock on the office next door and say hi. I was a bit jealous, actually, to see their space was bigger than ours” – but for Anthony, privacy is paramount. His multimedia creative agency Accelerated Intelligence (Ai for short) has been engaged simultaneously on two of the entertainment world’s most prestigious accounts – working on the social media strategies for Spectre, 007’s latest outing, and Disney’s Star Wars: The Force Awakens. Understandably, given the no-spoilers policy, no material is allowed to leave the office. All documents are shredded.

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“I’ve never aspired to have the biggest agency. What I do want to have is the best”

Anthony Noguera’s creative agency Ai has worked on both Spectre and Star Wars: The Force Awakens

Staff use military-grade encrypted USBs. From time to time experts – usually ex-forces – hired by security-conscious clients visit the office to check the systems are working as they should.

“We can’t bring people into the offices because of the sensitive nature of what we’re working on,” Anthony explains. Which means the breakout spaces at Metal Box – the atrium area, the café and meeting rooms – are important to him and his team. “That’s where we’ll talk to clients.”

Anthony and his staff of 15 are used to working long hours. “If you work for me you have to be passionate, you have to really believe in what we’re doing,” says Anthony, who admits he’s a tough taskmaster. Finding the right people to join the team can be hard. “I ask staff when they apply, do you know what I mean when I say you have to live and breathe this business? Younger people seem to get it; it’s easier for them because of social media.

They’re used to posting any time, day or night.”

Those blurred lines between work and home proved problematic for Anthony when he launched Ai six years ago. “We were originally based on a boat. If we wanted to work on a Sunday, we had to phone the captain.” A permanently manned office building, with good access and good security, proved attractive, as did the Bankside location, with its excellent transport

HOME TO NEW AND GROWING COMPANIES

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well connected Centre manager Mark Baraks explains how networks – both social and virtual – are helping Metal Box customers do business

links. “It’s a safe area, a safe building. I have female members of staff, I want to feel that they’re OK leaving the office late at night.”

Metal Box will be home for the foreseeable future. Six years since launch Ai is already a global agency, with team members in Germany and Australia, but Anthony doesn’t want to spread himself too thinly. “I’ve never aspired to have the biggest agency. What I do want to have is the best. And with the work we’re doing, I hope we’re showing that we’re up there.”

It’s a rare moment of self-promotion for Anthony. A major media player for over 20 years, he’s the former editorial director of Emap/Bauer’s global men’s division, and editor in chief of Arena and FHM. But Google searches, and Ai’s own website – just a single page of contact details – give little away. “The work should speak for itself,” says Anthony. “We could be constantly tweeting about Ai’s achievements, or contracts we’ve landed, but that’s time wasted, time that we could have spent working on behalf of our clients. And anyway, talking about what you do as an agency is like that bit in The Wizard of Oz, when they pull back the curtain. People don’t want to see the mechanics, they just want to see the magic.”

“Of course, I get people coming to me wanting help with practical issues, but the more fun side of things is introducing neighbours to one another, and putting on both content- and social-led events. We hold regular coffee mornings in the café, for example. Recently, one of our customers hosted a London meet-up for Periscope [a live social media broadcasting platform], and my job was to make sure that everyone within the individual companies at Metal Box who’s in charge of that element of social media was there. It was a real success, everyone was talking to each other, exchanging Twitter handles... It feels like we’ve created a real sense of community at Metal Box because of events like these.

“A lot of what we do is online. If you want to book a Mark’s keen to build “a sense of community” by encouraging collaboration meeting room, you can book it and pay for it by logging on to www.workspace.co.uk. We encourage all our customers to use the website, which has a fantastic Community section. What you tend to find is, if one of our customers can see there’s someone in the building who provides something that they need, they’ll make an initial phone call but then, when they realise how close their offices are, they’ll say, ‘Oh, just pop down!’ It breaks down barriers straight away, because you very quickly go from having a telephone conversation to looking someone in the eye and having a face-to-face conversation, which speeds up the relationship process. I think that starts things off really well. Being part of the same community, having numerous connections, you sort of feel a bond from the outset, which is helpful because it means you’ll probably end up doing business. And that’s what we love – our companies doing business with one another, enabling them to grow faster.”

Next steps Satisfied customers, then. But what about the wider community? What does Metal Box contribute to Bankside as a whole? Angus Boag explains: “We’ve had a very positive reaction locally. First off, the new facade has helped improve the look of the street. But more importantly, there are benefits for the local community whenever Workspace undertake a development project. That’s because New and Growing Companies tend to recruit locally. And bringing new people in to an area brings a certain spending power, which local shops and cafés and restaurants can benefit from.”

“Spread the love” appears to be the general idea – and it extends to giving a boost to Workspace customers. The company’s policy is to try to use, where possible, architectural firms who are already Workspace customers [Metal Box architects Pringle Richards Sharratt are based at Workspace’s Kennington Park]. Failing that, they “look to bring in new young practices”. The same principles will no doubt apply to Workspace’s latest large-scale project: transforming Hatton Square Business Centre in Holborn into a 90,000 sq ft, five-storey business hub. There are clearly busy times ahead.

But for now, Angus is taking stock. Metal Box Factory has delivered everything Workspace set out to achieve. He smiles. “We’re delighted with it.”

Metal Box Factory, 30 Great Guildford Street, SE1 0HS. Offices, workshops and studios from 155 to 3,228 sq ft. For more information, call 0845 805 6890 or visit www.workspace.co.uk

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Meeting rooms (top and above left) can be booked online. ABOVE RIGHT Networking over a game of ping-pong

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Metal Box Factory

best of Bankside All work and no play...

…is bad for staff morale. Thankfully, there are plenty of places to have fun – before, after or during work hours – within a short walk of Metal Box Factory. Here are a few of our favourites.

UNION THEATRE 204 Union Street, SE1 0LX This compact theatre, housed in a former warehouse, punches well above its weight in artistic terms. As well as plays and musicals by new and up-and-coming writers, it hosts regular art exhibitions and events. It’s held in great affection by locals, who rallied round to save it when it was threatened with closure in 2013. www.uniontheatre.biz BOROUGH MARKET 8 Southwark Street, SE1 1TL The famous food market needs little introduction, but having some of London’s finest food just on the doorstep makes lunch breaks a lot more interesting. Try a duck confit sandwich from Le Marché du Quartier, or a goat’s-milk ice cream at The Greedy Goat. www.boroughmarket.org.uk

Where to eat, drink, kick back or work out

BETTER BANKSIDE Bankside is a Business Improvement District, a business-owned and -led, non-profit-making organisation devoted to improving the local area. Its governing body, Better Bankside, runs a range of initiatives, from regular (and free) bike-maintenance classes, to the Urban Forest, a planting scheme creating mini oases for locals to enjoy. If you live or work in the area, you can apply for a Better Bankside Buzz e-card, which offers great discounts on neighbourhood bars, restaurants, services and attractions. www.betterbankside.co.uk

THE RING BOXING CLUB 70 Ewer Street, SE1 0NR “Isn’t it time you became a legend?” asks the website for this historic south London boxing club. Run by local legend Mark “the Burf” Burford, this is where IT executives and media consultants go to train and take part in regular white-collar boxing bouts. Punching people (or getting punched) not really your thing? Then sign up for the non-contact Berserker Boxing Circuits classes – all of the fitness benefits, none of the pain. www.cityboxer.com

Bankside’s Borough Market: food mecca, tourist attraction, film set...

KATZENJAMMERS Hop Exchange, 24 Southwark Street, SE1 1TY An Austrian bierkeller in the heart of SE1, complete with fraüleins in traditional dress, this underground bar has nine beers on draught, a further 25 bottled varieties, and a menu that’s heavy on sausage- and cheese-based dishes. It may not be the hippest place to hang out – the oompah band isn’t to everyone’s taste – but for a fun night out, it can’t be beaten. www.katzenjammers.co.uk

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reaching new heights

The XLP Toubkal Challenge Saturday 30th April - Thursday 5th May 2016

Charity XLP is organising a six-day trek to the highest mountain in Morocco, to raise money for its efforts to tackle poverty and improve education for young people in London’s inner city.

Last year XLP helped over 1,500 young people start to create a positive future for themselves and their community. With your help we can reach out to even more in 2016.

For more information about the challenge or how to donate, please contact Ian Hiley at ian.hiley@xlp.org.uk or visit our website www.xlp.org.uk

XLP: Creating Positive Futures

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team building “ In most cases being a good boss means hiring talented people and then getting out of their way.”

Tina Fey

x+y=;-) We might not always understand each other. We certainly don’t think much of each other’s music. But when the generations learn to combine their skills and talents, it can result in new and exciting ways of working Self-confessed Gen X-er Jenny Williams is an ICF accredited coach, NLP master practitioner and Enneagram practitioner based at Club Workspace Chiswick. A former global campaign director for Nokia, she specialises in working with marketing and creative teams, helping them to unlock their potential. Her clients include L’Oreal, Healthwatch, University of Cambridge, Mindshare and Haygarth.

There’s been a quiet revolution in the workplace of late. As more and more of us defer retirement – for either financial or personal reasons – a single office might, for the first time in history, have three or more generations working together side by side. In some industries it’s not uncommon for there to be 50 years or more between a company’s oldest and youngest employees. That’s 50 years of diverse cultural values, ways of communicating, attitudes to work and educational experiences, all mixed up in one intergenerational melting pot. It means a wealth of different skill sets and expertise, just waiting to be mined. In HR terms, there’s never been an opportunity like it.

Jenny Williams, an experienced coach and trainer specialising in the marketing and creative industries, works with organisations keen to maximise the potential of this new intergenerational workforce. “Each generation brings its own strengths,” she says. “If you think about Gen Y, they are phenomenal when it comes to collaboration and flexibility, and they’re incredibly creative problem-solvers.

When you mix those attributes with Gen X’s skills base, the deep knowledge and wealth of experience they’ve acquired by being in the workplace so much longer, you get a really interesting mix of possibilities.”

But while age diversity in the workplace is clearly a positive thing – promoting a broader range of talent – it’s easy to see how, without careful management, negative stereotyping can occur. “There are some shared beliefs that keep cropping up in our studies and workshops,” Jenny says. “Gen Y claim that Gen X managers put experience ahead of ideas, that they micro-manage

and can be hierarchical. In contrast, Gen X talks a lot about Gen Y needing a lot of attention, being overconfident and lacking commitment.”

There may be a kernel of truth in the accusations but, as Jenny explains, most are misunderstandings that can be explained away by the generations’ different cultural backgrounds.

“The parenting and education system that Gen Y experienced was child-centred, which is in stark contrast to Gen X’s childhood. Gen X were expected to fit in with their parents’ lifestyles and schedules. It made them independent.” Gen Y, on the other hand, were brought up to question authority.

“They were encouraged by parents and teachers to challenge and stand up for what they believe in, and can carry this behaviour into the workplace,” explains Jenny. “By contrast, Gen X was taught to respect seniority, and learnt that access to authority was limited and must be earnt. As they grew up they learnt from experts and continue to value expertise in the workplace.”

Celebrate similarities The key to smoothing out any intergenerational tensions is to remember that we’re all on the same page. “People are individuals, not stereotypes,” Jenny asserts. “There’s a basic human desire to connect; people want to contribute and feel valued.

These are all deep-rooted needs that we all share, regardless of age.” Organisations need to keep their employees focused on those shared goals and desires, rather than their differences. “Companies should think about how can they create opportunities for the generations to work together.

You end up with a very well-rounded team when you combine the generations. Think of it like this: when you use only half of your workforce – only

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“ When you mix those attributes, you get a really interesting mix of possibilities”

Talkin’ ’bout my generation Researchers and social marketers tend to divide the population into five age-based demographic groupings. Although not an exact science, the thinking is that each generation has common traits that give it a specific character.

Traditionalists (aged 70 to 90) grew up in the shadow of the Great Depression and two world wars. Shared characteristics include an excellent work ethic and respect for authority.

HOME TO NEW AND GROWING COMPANIES

Baby Boomers (51 to 69) lived through a period of rapid social change and tend to be optimistic and idealistic. They’re the last generation to expect to retire on generous pensions.

Generation Y (15 to 35) were nurtured by doting parents – resulting in high self-esteem – and are known for their collaborative ways of working and tech expertise.

Generation X (35 to 50)

Generation Z, the first purely digital generation,

are “the Latchkey Generation”. Often the offspring of divorced parents, they’re more cynical than Boomers, but are also conscientious and independent.

are still “screenagers”. Studies suggest they’re impatient, but their ability to process large amounts of information at high speed could be of huge benefit in the workplace.

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team building

x y

“It’s just about having the conversation” your Gen Ys or Gen Xs – for various projects, it’s as if you’re only using half your brainpower.

Getting the generations to work together is about using your full capacity.

“There’s much that the generations can learn from each other, if given the opportunity. Gen X tend to be good communicators; they’re very adept when it comes to influencing and persuading, and getting ideas sold throughout the organisation.

Gen Y can learn a lot from their political and organisational savviness.”

In turn, Gen Y have some important lessons for their older colleagues. “If you look at how Gen X have been working to date, we seem to have got ourselves into a pattern of working that’s not as healthy, and not as productive, as it could be,” says Jenny. “We’re all working longer and harder, and Gen Y have come into the workplace and said, ‘There has to be a better way to do this.’ That kind of provocation is really good for us. It’s one of the biggest benefits that they bring to the workplace.”

Keep talking It’s clear that mixed-age teams are the way forward if we want our businesses to run on full power.

How, though, can occasional intergenerational flare-ups be avoided? Jenny has some practical advice. “It’s about defining clearly at the outset what success for the project looks like, and aligning on that. It’s also about agreeing a loose contract about ways of working. It could be just two or three points, such as, ‘We are going to check in every Friday. You’re tasked with doing A, I’m tasked with doing B. My preference for communication is 9am to 5pm; I’m not going to answer emails in the evening. I may wake up to a stack of emails from you but that’s OK…’ It’s very simple, really. It’s just about having the conversation.”

Visit www.jennywilliamscoaching.co.uk and follow Jenny on Twitter @jenfi

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If you’re Gen X…

If you’re Gen Y…

…it’s easy to stereotype Gen Y as Dayglotrainer-wearing upstarts with an inflated sense of entitlement. But learning to channel their energy, innovation and fresh thinking can give a creative boost to your business. Here’s how to iron out any intergenerational niggles.

…then Gen X’s top-down management style might make them seem authoritarian and inflexible. However, their knowledge and experience are priceless, so be willing to listen and if pinch points like those below occur, try to understand their point of view.

“The graduates who come to us don’t want to do menial tasks, they expect to be given huge projects right from the start.”

If Gen Y are ambitious, it’s because they need to be. With lower salaries and few workplace pensions, there’s never been a tougher time to enter the workforce.

They are acutely aware of the need to acquire skills to realise their professional dreams. Help them identify the skills they lack, and actively look for ways that they can acquire them. They’ll happily do the photocopying if they can see it’s all part of the bigger picture.

“My boss is so controlling. She micro-manages everything. I don’t have any freedom to just get on with stuff.”

Gen X on the whole prefers a less controlling style of management too. However, they are ultimately accountable for your work and that of everyone else who reports to them, which is why your boss may feel the need to breathe down a few necks.

Ask if you can agree a schedule of regular, scheduled check-ins, which will reassure them you’re on the right track.

“I get emails late into the night, full of ‘bad news’ about clients. I want to be phoned, and ideally in the morning.”

For Gen Y, texting and emailing are like breathing. If you would rather pause the communication stream, or have a face to face instead, you have to make that emphatically clear. For Gen Y, the default setting for communication will always be digital, and more or less constant.

“Some of the more senior members of the team seem to switch off at 6.30pm. But what if I have an urgent question outside office hours?”

These days, the lines between work and home are more blurred than ever, as we seek jobs that enrich us and give our lives meaning. Gen X – who grew up when jobs were jobs, and texts weren’t invented – might have a more black-and-white view, as well as other commitments that mean their evenings are ring-fenced for family time. Ask your manager what his or her boundaries are regarding communication. “Always available” may not be their preference.

“I sometimes feel there’s a fundamental lack of respect. I’ll say how I want something to happen, and they’ll argue with me.”

Gen Y is used to working collaboratively, not hierarchically. Explain the unspoken “rules”, including the role that hierarchy plays within your workplace.

Be clear about the decision-making process.

Who is the decision maker at each stage? What exactly can they decide? Gen Y doesn’t like to feel shut out of the process, so allow them a platform to express their views.

“Older people are obsessed with having faceto-face meetings. What’s Google Chat for?”

Again, this comes down to people’s preferred communication style, and to Gen X’s experiences in the workplace when they were starting out.

Don’t be too down on meetings though; much of communication is nonverbal, and you can learn a lot more about exactly what your manager is expecting from you from his or her body language and tone of voice than you can from staring at a message on a screen.

“It’s funny how anyone under 30 seems to need constant reassurance. What happened to just waiting till your six-month appraisal?”

Like it or not, Gen Y crave feedback. Regular assessment was an important part of the education system when they were growing up, and it’s hardwired into them.

After every task or project, ask them to reflect on what they’ve learnt. They’re used to doing this from their school days and it helps to embed the lessons.

“I find it extremely frustrating to have to bow to more senior members of the team. Sometimes it feels like their opinions are well past their sell-by date. We work in financial tech after all!”

Your manager may not – by virtue of the fact that their role is no longer hands-on – be an early adopter of the latest tech, but they have plenty to teach you about developing political and organisational skills. Experience and practice matter. Ask yourself: what can I learn from this person/situation?

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creative spaces

BELOW Beans mean business: the Bermondsey headquarters of Pact Coffee, at Workspace’s Biscuit Factory

home from home The office isn’t just a place to do business, it should offer plenty of domestic comforts too. We visit the companies bringing lifestyle touches to the traditional office layout – and working smarter as a result

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Panorama image created by The Virtual Picture, thevirtualpicture.com; aden + anais images: Dai Williams

“Design is a funny word.

Some people think design means how it looks. But of course, if you dig deeper, it’s really how it works.”

Steve Jobs

Your office is so much more than the space where you spend your working day.

Creative workspace design plays a significant part in a company’s ability to recruit and retain talent, according to studies. It can help foster a shared company culture and promote a business’s brand values. It can spur creativity, encourage collaboration and – by making the physical space somewhere that employees enjoy spending their time – it can boost staff morale.

However, as the Workspace offices featured on the following pages show, when it comes to design, one size doesn’t necessarily fit all.

“A bright and playful interior that might be perfect for one company will not not be the answer

HOME TO NEW AND GROWING COMPANIES

for another’s needs,” says Carmel McNamara, author of The Other Office 2 (Frame Publishers, £60), a new book that showcases 100 cutting-edge workplace design projects from around the world.

“You have to remember that your office is very much the tool of your organisation, and it forms part of its overall identity.”

That doesn’t necessarily mean embellishing everything with your company logo; it’s more about creating a space where your employees, clients and visitors feel engaged and welcomed.

“Your office should ignite innovation and creativity,” says Carmel. “When you’re considering its design, you need to think about generating opportunities for collaboration, such as breakout spaces, and, at the same time,

consider how the space will help people in your organisation to connect and build communities.”

And what about design trends? Is there anything we can expect to see in the workplace in 2016 and beyond? “A key theme is the centralisation of communication hubs, with more focused working spaces placed at the periphery,” says Carmel.

“Another is ensuring staff are catered for in terms of wellbeing, by encouraging physical activity. So a lot of companies are providing scooters for staff to get around the building, or adding a competitive edge to the feature staircase by including sensors to track the distance climbed per week by their employees.”

You might not want to go that far. But if it leads to improved productivity and happier staff, there’s no harm in getting out the paintbrushes.

...

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creative spaces BELOW The open-plan design of Pact’s office encourages collaboration RIGHT, FROM TOP A hot-desking system means staff can move to a quiet spot when they need to; standing desks are another option; Pact have recently designed their own coffee sacks for their growers

“The team are dab hands at DIY”

Pact Coffee, The Biscuit Factory Pact, the coffee delivery service, have hit a milestone. They managed to grind, roast and ship the most amount of coffee they have ever achieved in one day: 1.5 tons of the stuff. And all from their roasting house in The Biscuit Factory in Bermondsey. But for Pact, that still isn’t enough.

Words: Fleur Macdonald The team aim to deliver on their brand promise: “Make coffee a force for good”. And to make a significant impact, they know they’re going to have to sell a lot of coffee The desire to make Pact Coffee as ethical as possible was behind their decision to source by direct trade all the coffee they supply. Stephen Rapoport, the founder and MD, hijacks our visit to Ed Grattan, head of media relations, to show us around the roasting house, personally introduce us to the large metal roaster in the corner, and point out the coffee sacks that are now branded with the Pact logo since the company started working directly with coffee producers. The beans get shipped over from plantations in Brazil, Costa

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Rica, Colombia and other coffee-growing regions, dock in the Thames Gateway Port and then make their way, once a day, to The Biscuit Factory.

To make that happen, Will, the company’s coffee expert, now goes out to South America, Asia and Africa to meet famers and source their beans. “We know exactly what the growers are paid because no agents are taking a cut,” Stephen tells me – then adds, almost religiously, “Coffee is a force for good.”

Just as Pact Coffee try to make the lives of their customers as happy as possible – they still call all first-time customers to make sure they’re satisfied with whichever magic bean they’ve chosen – the startup wants to ensure that staff are equally content. Their office is geared towards the flexible work-life that a new generation of creative and innovative workers desire and even expect.

Ed Grattan takes over the tour again and points out all the perks that make everyday life at the grind a bit better. The open-plan environment and hot-desking arrangements mean that staff members don’t feel tied to their desks; they can

relax at the coffee bar or in one of the breakout spaces, or just as easily work from home. Time off is actively encouraged (the company has an unlimited holiday policy).

Perks of the job As the company has grown, they’ve had to adapt their space. Staff numbers have risen to over 50, up from 30 last January. This means the marketing team mostly sit together, as do the developers, almost as if they’re back in the school canteen. The customer service lot are up on the balcony so they can keep each other up to date without disturbing the rest of the team.

The large table at the centre of the room is cleared for team meetings, which take place amid all the action, and there’s a screen just above the high desks, which are there for those who want to straighten out their spines and work standing up.

The office is full of specially built nooks and crannies and it turns out that many of the team are dab hands at DIY. The interior decoration is all done in-house. The bar perched on crates was made by

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5 design quick fixes You don’t have to budget for a full refit to give your workplace the wow factor. Just take some tips from an interiors expert...

Dale, who works in the grindhouse, and Tatiana from customer service. There are cubbyholes for each employee so they have a storage space that isn’t connected to their desk. There’s a video camera, which was used in the Kickstarter campaign to raise £20,000 for R&D for Pact’s own specially developed coffee pods – other brands “don’t taste that good”, Ed says – that can be found around the office.

In fact, the only space in the office that’s always left clear is the route from the front door to the bike shed, which is in the office. Staff can cycle in and hang their bike up like a coat. Pact joined the Cycle to Work scheme to encourage staff to get on their bikes; the take-up was so successful, Pact have been featured as a case study.

“The local area and the building is really suited to us,” Ed says. “We love Borough Market, which is nearby, and it’s great to be based in such an iconic building in the world of food and drink.”

Iconic it is. Celebrated snacks such as the Bourbon biscuit and the Twiglet were invented right here.

Just as the building seems strangely perfect for Pact, the actual office suits the new working practices of a successful startup down to a tee.

Coffee isn’t the only thing that can be a force for good; office design is too.

Generate Studio have worked on the design of some of the coolest company HQs in London, including Pact Coffee (left), Mind Candy, and Workspace’s own Metal Box Factory, Chester House and Canterbury Court. We asked Generate’s director, Liz Close, to suggest some fast fixes that will turn even the blandest space into a bright and inspiring work environment – without blowing the annual budget.

The trick is to treat at least two surfaces, such as one wall plus the ceiling. That way, noise won’t be able to bounce around so easily.

1. Wonder walls If you have a fantastic art collection for your office, so much the better – a plain office with white walls makes an ideal gallery space. But if, like most of us, you don’t have that luxury, then be creative and design your own digital wallpaper; there are lots of companies offering the service online. Or invest a few minutes searching the vast number of decals you can buy online to give your walls some individuality and interest.

4. Shine on Office spaces are generally designed to give a uniform light level at desk height – which is fine if all you want to do is sit at your desk. It doesn’t take account of people’s individual preferences or needs. Invest in a few classic desk lamps or quirky standard lamps to give your workplace additional light sources that you can control as you wish. Whether you go for something ultra-modern or the classic Arco or Anglepoise, they’ll look fabulous.

2. Sound decisions The opportunity to be social and interact with colleagues is one of the great benefits of going to work, but it can be a real pain when the constant chit-chat is bouncing off every surface. Sort out the acoustics in your office for a headache-free day. There are lots of soundproofing products available to buy, from acoustic wall panels and screens to acoustic “clouds” that can be suspended from the ceiling.

5. Daily grind Investing in a great bean-to-cup

3. Tread softly Brighten up at floor level with a feature rug. It not only beats a solidcolour floor for visual impact, it can also help with acoustics. Use it to accentuate a breakout space, meeting space or welcome area. There are some great-value products on the market, from contemporary designs in acid brights to ethnic prints; check out The Artisan Rug Company (www.theartisanrugcompany.com) for individually designed pieces at affordable prices.

coffee machine will make your office a brighter place to be – who doesn’t feel better after a double espresso? Make sure you invest in the best beans, too. (Pact, see left, deliver a great range to your door.) A poor-quality cuppa is frankly worse than none at all.

www.generate-studio.com

CLOCKWISE FROM LEFT A meeting booth at Mind Candy’s HQ; Workspace’s Canterbury Court, and Canalot Studios in Westbourne Park

“Use a feature rug to accentuate a breakout space, meeting space or welcome area”

www.pactcoffee.com

HOME TO NEW AND GROWING COMPANIES

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creative spaces A blank canvas: how you customise your Workspace office is up to you

moving in, moving up How do you find the right office, and give it the look you want? And what if you want to upsize? Centre manager Lucia Angelovicova has the lowdown So, you know what area of London you’d like to be in, and you’ve even got a moodboard of the decor you want – but what’s next? We spoke to Lucia, from The Light Bulb in Wandsworth, to discover how she helps customers find the ideal space for them.

calculate the number of plug sockets and internet sockets based on the number of people in a space, so you shouldn’t need to add any extras.”

What about furniture?

Can you provide that?

“Yes, that’s no problem. We work closely with design company Generate Studio; they can do a setup, layout, anything you want. But you’re equally welcome to bring in your own furniture, using your own moving contractors.”

If I come to you looking for an office, what’s the first thing that happens?

Am I allowed to make any changes to my space?

“I’ll ask you quite a few questions, so I can get a real feel for the space you need. Sometimes customers really don’t know what they want, but I’m pretty good at working out what would suit them, I’ve been doing this for so long.

Prices vary according to office size, and where the space is located in the building. If it’s their first office, many customers are nervous about outgoings. So I always say, if you think a smaller space will work for you for a year, or 18 months, then go for that, because I can upgrade you at any time.”

“Lots of our customers are very creative people, and what they like are breakout spaces within their space. If you want t create one, you’re more than welcome to put up a partition. There are so many freestanding quirky screens available now, that you can move around to change the look of your space. People do ask if they can make major changes, such as building a meeting room.

That shouldn’t be a problem. I’d just need to get a brief description of the work, and details from their contractor. I send that off to my surveying team at head office for their approval. There’s a small fee attached because they have to draft up an alterations licence, but it shouldn’t be expensive.”

How quickly can I move in?

“If you’re a startup or small company, you just want to come in, plug in and work. Workspace is totally geared towards making that happen as quickly as possible. Provided everything’s straightforward and you have no unusual requirements, you could be in within a week.”

What about the internet and other utilities?

“We use our own supplier, Excell, for telephony, data and internet. What’s attractive to customers is that we don’t lock them in to long two- or three-year contracts. The supply terms match our lease terms. So you can just serve the same notice on both of us – six months – and move on or up. Basically, you should find everything you need to start working straight away. We

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Can I put up shelves and pictures?

“Minor works such as putting up pictures or shelves is fine, and you can paint the walls any colour you like. As long as you’re not altering the space, it’s not a problem. We only ask that at the end of your occupation, you leave the space as you found it.”

I want a bigger office.

What’s the process?

“You can be upgraded to a bigger space at any point. If the space is available, you don’t need to give notice. I’d just have to draft up a new lease for the new space. It’s easy. It’s been done so many times, it’s really not a problem!”

“It’s important to us that our staff are comfortable in the space. We want everyone to feel very much at home” www.workspace.co.uk

The aden + anais office is divided into different zones, and includes a games area (above), a work space (far left) and a seating area with a fully stocked bar (below)

aden + anais, The Light Bulb When Charlie Green (left), marketing manager at aden + anais, first set eyes on the company’s new office at The Light Bulb in Wandsworth, it was “just a building site, not even a shell”.

Nevertheless, she and the rest of the team – the London-based wing of the US baby accessories brand – had a clear picture of what they wanted from their work space.

in the shops when she relocated to the US, she launched her own collection of swaddle blankets, bibs, baby clothes, nursery bedding, sleeping bags… all made from high quality, natural cotton muslin (bar one luxury line, which features added merino wool). Fast-forward to 2016, and aden + anais accessories are sold in Harrods, Selfridges, and in 35 countries worldwide.

“We were keen to take some of the elements from our head office in New York, for brand consistency,” Charlie explains. “There were also some things that we’d seen that really worked over there, and we wanted to replicate them. We definitely wanted a separate leisure space, then a breakout space, and then a work space.”

The aden + anais office spans the length of the Light Bulb building, and then wraps around a corner. Originally it was planned as two separate offices – they’re now linked by an arch – and the resulting space is roomy, to say the least. As Charlie explains, “We thought, let’s try and get as big a space as we can for the budget that we’ve got, we can always grow into it…” As it turns out, foresight is a wonderful thing. The original team of eight who moved here from their “absolutely tiny” office in Clapham has now grown to 20, with three staff members joining just before Christmas.

The rapid expansion is down to a new, massmarket range of aden + anais accessories, to be launched this year alongside the existing high-end, boutique brand. The company was founded in the US in 2006 by Australian Raegan Moya-Jones, a mother of four. Disappointed that she couldn’t source her much-loved Aussie muslin blankets

Work, rest and play

HOME TO NEW AND GROWING COMPANIES

As per the original plans, one half of the office is now “the working side”, where all the desks are located; there’s also a large walk-in storeroom where samples and additional stock can be kept. It’s a decidedly egalitarian layout – there are no private rooms or boxed-off offices here.

“Everybody’s in the same space,” says Charlie.

“But we do a lot of moving around. We can’t quite get it right, who should sit where! Every month or so we change, and we do the same when new people arrive.”

Through the arch is a kitchen, leading to a breakout area with a large dining-room table.

“The table’s a really important feature,” explains Charlie. “Yesterday it was someone’s birthday so we all had a special lunch, and quite often people will cook things and bring them in and we’ll all eat together.” The fully stocked bar – Friday night is cocktails and champagne night – is another draw, as is the sofa area, which is where informal meetings, one-on-ones and general lounging happen. Just off the seating area is a conference room, where more private calls and meetings can take place.

But perhaps the place that fosters the strongest

team spirit is the games area. The aden + anais crowd are clearly a competitive bunch: they have a table tennis table, a pool table, table football and a fairground “grabby machine” filled with the company’s branded toys – no visitor is allowed home without one.

So, do all these office gizmos mean all play and no work? Quite the opposite, says Charlie.

“This office has made a real difference to the whole dynamic of the team, in a really positive way. Having light and space… Previously, we were very much on top of each other, we didn’t have space to breathe. Just being able to go off and have little meetings with each other, or make a private phone call… Previously we couldn’t do that at all. It’s important to us that all of our staff are really comfortable in the space. We want everyone to feel very much at home, and relaxed in the environment.”

The space isn’t quite finished yet. Additions are being made all the time as the team get used to the space. There are plans to put vinyls on the windows, for privacy (“They’ll have pictures of babies on them, which will be lovely,” says Charlie). Also, behind the bar, there’ll be another nod to the US office – a picture of the Albert Bridge at night, to echo the giant Brooklyn Bridge print that hangs in New York. Finally, the meeting room is going to be soundproofed, in an inspired example of product placement, with the company’s own muslin swaddles. “There’s still quite a lot of stuff to do,” admits Charlie. “But overall, it’s a really nice environment.” www.adenandanais.co.uk

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start me up the guide for brand new businesses

inside...

Page 38: Quick starts What’s on the agenda at Club Workspace

Page 40: The fast track Toolkits and tips to help hothouse your business Page 44: Bao-house African brand Aduna and the latest superfood

Page 48: And here’s your host... Getting to know Leon, Workspace’s king of Club

bags of room p46

How LOVESPACE is revolutionising the storage business

06

www.workspace.co.uk

co-working

quick starts

what’s trending at Club Workspace right now

@clubworkspace

Check out the Club Workspace Instagram feed, for people, places (like Club Workspace Clerkenwell, below), details of events and what’s inspiring your fellow co-workers.

Are you part of the Flat White Economy?

The phrase describes the financial recovery that’s being powered by entrepreneurs, startups, small businesses and co-workers.

The term has been coined in a book by Professor Douglas McWilliams, The Flat White Economy: How the Digital Economy Is Transforming London and Other Cities of the Future. According to McWilliams: “Since the financial collapse, the Flat White Economy has spawned four times more jobs than the City lost in the crisis. London is now growing one and a half times faster than Hong Kong.”

Start app:

Minecraft Story Mode (Android, iOS)

For deadline de-stressing

“You have to learn the rules of the game. And then you have to play better than anyone else” Albert Einstein

Startup dictionary:

unicorns

Not just one-horned mythical creatures any more, but startups that have a value of over $1 billion. Originally so-called because of their almost mythical rarity.

Startup dictionary: capital

Just a fancy way of saying “money”, most often used in situations where “moolah” “dollar” or “green” might be considered inappropriate.

5m

people in the UK will be self-employed by 2024*

38

* source: www.dtz.com/uk

Hot desks

Are team rooms the new way of working for close-knit startups? Club Workspace Leathermarket’s even features a power cable that looks like a giant slinky. Play nicely, now...

www.workspace.co.uk

of millennials value a flexible work environment*

“If you can’t feed a team with two pizzas, it’s too large”

Startup dictionary:

low-hanging fruit

This term is connected to lean startups and MVPs (minimum viable products) in that it refers to capitalising on the things that a business can do with the minimum of effort to secure the maximum amount of return.

“Gathering low-hanging fruit” is a strategy often deployed by startups to increase revenues and allow for cash to be reinvested in more lucrative products and services.

Jeff Bezos

Meet the neighbours

Ryoko Mutasono (top, in red) runs Wagumi, a store selling exquisite Japanese crafts, from Club Workspace Southbank. Check out the shop (above) at the Oxo Tower or visit www.wagumi-j.com

I’m in

My top tip

“Tech companies often spend too much time waffling on about their technology and how it’s better than company X’s. Customers don’t care. They want to know what impact a product will have on their life. That’s the only message you need to push in your marketing.”

Norman Liu, founder of Drunken Sailor Media, based at Club Workspace Chiswick

Start app:

Assembly (iOS)

Graphic design goes mobile

start me up

Tweet talk

We love keeping in touch so don’t forget to follow us on Twitter @Clubworkspace.

We’ll feed you relevant business news and practical tips – like how to stay motivated, and how to stop drowning in work!

Free access to a busy calendar of networking and business growth events...

Just one of the benefits of Club membership.

Find out more at www.workspace.co.uk/co-working

39

up and coming

don’t cave in

“Are you sure?”…“What if you fail?”…“Why risk it?”

There are forces out there responsible for delivering you the same average year, over and over again.

One of them is thousands of years old – and an expert at survival. Let’s call him Caveman You. Caveman You is the part of your brain whose job it is to keep you safe in the short term. He’ll always choose what you want “now” rather than what you need most. He also likes to optimise. Because food was limited in caveman days, he created a rule that anything you did on a consistent basis for more than three weeks or so became a habit. That way, you didn’t have to waste energy consciously thinking about a task.

New You, on the other hand, is the “modern” part of the brain – the frontal lobes – that makes us different from other animals. New You harbours hopes and dreams, wants to build an empire and do great things. But how can you, with Caveman You sitting on your shoulder, asking “Are you sure?”,

“What if you fail?” and ‘Why risk it?”.

The result, of course, is stalemate. Part of you is desperate to try things, part of you is desperate to stay the same. How do we solve this conflict?

There is hope, in the form of a Japanese warrior called Kaizen. Kaizen is a decadesold business philosophy that advocates small, continuous improvements. One of its major components is to chunk things down into such small tasks that you simply cannot fail.

The major reason people repeat the same year over and over is that they don’t spend enough time planning and chunking. If you compare the care, effort and detail that goes into planning a wedding with what you put into planning your business, what do you notice? The victory is made in the architecture phase. If you wanted to build a dream house, the first person you’d hire is the architect.

The architecture is where your effort needs to go.

However, most people start building first and then

get confused as to what they’re meant to be doing.

So, if you’re not spending a minimum of three days planning your upcoming year, you are not going into enough detail. You’re not chunking enough. And Caveman You is going to have a field day.

I run a test with my clients. I ask them to describe their 12-month vision for their business. If they can’t tell me with 10/10 clarity what they are building over the coming year (only 240 working days!) we work on that first. I then check in with their quarterly plan. This should take, at the very least, one full day each quarter to chunk and write.

There are opposing forces at work in your head. However, with a little bit of help from Kaizen and some committed planning time up front, maybe New You will emerge victorious.

fast track

“Fulfillionaire” business coach Blake Sergeant works with clients to make them rich in every area of life. Visit him at www.blakesergeant.com

the

Tips for entrepreneurs, by entrepreneurs: growth hacking, guerrilla marketing and landing the lender of your dreams

“Kitty, what do you think?” signs that working from home ain’t working ~ You canvass your cat’s opinion on work projects ~ The staff at Pret smirk every time they see you ~ You see nothing wrong in taking conference calls in your pants ~ Networking means saying “Hi” to the bin men ~ You’ve colour-coded your sock drawer – and your flatmate’s

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www.workspace.co.uk

the big question We asked Club Workspace business owners: “Who would you want (dead or alive) to be a dream member on your board of directors?”

“Professor John McKenzie, an economist and the first rector for The London Institute (now University of the Arts London) with whom I had the pleasure of working in 2001–2. He was an incredibly smart man who commanded respect and authority and did not suffer fools gladly.

Despite his tough exterior, he had a soft side that people rarely saw.”

Kin Bang, We Got Coders

“Well… not just because I used to work at Panasonic, I would mention Konosuke Matsushita, the founder. His attention to detail was legendary – as are his ideas about the purpose of design and the role it can play in people’s lives.”

Ryoko Mutasono, Wagumi

“Elizabeth Gilbert, the author of Eat, Pray, Love, is an inspiration both as a writer and as a person.

I would probably ask her to be on my board of directors. I think she’d really like that, too.

What do you say, Liz? :)”

Iulia Calota, The Love Project

“No one. I am on my own journey and no lesson has taught me better than my own mistakes.

Board meetings can also be tiresome affairs in any case. If I was to say Larry Page, then you can be sure that Larry is too busy running Google to care about my startup. Larry and I are both pursuing our passions with different levels of financial success but equal measures of purpose, fulfilment and happiness.”

“I’d like Melinda Gates, of the Gates Foundation, Paul Polman, CEO of Unilever, and Leo DiCaprio. Together we will show that sustainability is good for people, business and the environment.

And it’s a process that we can enjoy.”

“Steve Jobs, Mahatma Gandhi, Naomi Klein and Russell Brand.”

Ali Al-Assam, NewsSocial

Steve Malkin, Planet First

Satish Jayakumar, Typeless

“Steve Jobs, Mahatma Gandhi, Naomi Klein and Russell Brand”

giving back It seems Gen Y’s reputation for being community-spirited is well deserved. According to The Report on Small Firms 2015 by Lord Young, the Prime Minister’s Adviser on Enterprise, the number of social enterprises – businesses whose profits are invested back into a social mission – has risen from 240,000 to 300,000 in the last five years. They now account for six per cent of all UK small firms.

“One change that is driving the increased aspiration to start a business, particularly amongst young people, is the option to start a social enterprise” (The Report on Small Firms 2015)

win £1,000 worth of research Got a great business idea, but no budget for road-testing it? Online market research company Marketest is offering a range of prizes in its annual Business Start-ups Competition, including tailored market research plans worth £1,000 and £500.

Applications are open from February until April, and all you have to do to enter is fill in a short form online. For more details, log on to www.marketest.co.uk www.marketest.co.uk

start me up

41

up and coming

If you’re looking to raise awareness of your brand, a guerrilla marketing campaign can be a cheap and effective strategy, says Minnie Harding of KatchUp

no campaign, no gain Guerrilla marketing is almost designed for small businesses. It has three great advantages: it’s cheap (it costs next to nothing); it has impact – both online and off; and it engages your community. Here’s how to get it right.

Preparation is everything Scout out the area you’re going to be in, distribute fliers and introduce yourself to local business owners the week before. Basically, you need to tell people in advance where you’re going to be, what you’re going to be doing, how they can get involved and, most importantly, why you are doing it. You’ll find that many people you talk to want to get behind you, support you and ultimately amplify you.

Keep it local We decided to run our campaign in our own neighbourhood. Holding your campaign on Oxford Street may reach a greater number of people but it won’t resonate for that long. Keeping things local is a great way to get the community to engage with you, and we’ve built partnerships off the back of it.

Get everyone on board It’s crucial that the whole team gets involved in the campaign, especially if you’re a small business. If your team are nervous about engaging with the public, revisit your mission/brand statement (we created a manifesto). Get everyone excited by what you’re trying to achieve.

“You’ll find that many people you talk to want to get behind you” Be clear about your objectives Do you want to hand out a thousand fliers, sign up 100 people to a mailing list, or get at least 10 people in your video?

Remember to film non-stop An hour of video can be reduced down to a minute after editing so you need a lot of footage to produce something really impactful.

Don’t feel rejected A lot of people won’t want to hear about your company, but for every 10 people who turn down your flier, there’ll be one person who really believes in what you are trying to do. And that person will become a true brand advocate for you.

Publish across all platforms Remember to make the content consumable for everyone across all channels. People don’t have the time to watch a two-minute video; they have 40 seconds. And make sure you populate it across your channels, whether that’s your blog, your Facebook page, Twitter or YouTube.

Identify influencers Nurture relationships with influencers ahead of time. Remember that influencers are also your friends and family – it’s really all about getting people to share the content.

And they will if it’s funny, engaging or impactful.

Create a user experience You could align your campaign with a charitable donation, or with an event or festival (for example, you could organise a campaign where new users who download your app get a free pint).

Brand awareness is important but what you really want at the end of the day are users, so try to think creatively when strategising your acquisition campaign and always keep your brand values at the heart of it.

KatchUp is a private photo-sharing platform based at The Light Box in Chiswick. www.katchup.com

“Because I’m happ-ee...”

The latest Freelancer Confidence Index, published by IPSE, reveals independent professionals and contractors to be a pretty upbeat bunch. In fact, according to the quarterly report, freelancers’ confidence in their business is at an all-time high, ranking +11.8 on a scale ranging from -100 to +100.

Confidence in the wider UK economy is also up around 25 per cent from the previous quarter. Maybe that’s why some of the respondents reported upping their day rates by as much as 46 per cent!

See more at www.ipse.co.uk/research

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www.workspace.co.uk

hack attack

ways finding business finance is like online dating Looking for a fruitful and happy financial relationship? It’s not that different from looking for Mr (or Ms) Right, according to Emily Trant, COO of Funding Options, a “financial matchmaker” for SMEs based at Metal Box Factory It’s tempting to use a little “creative licence” on your profile Good lighting, a glossing over of some of those dark periods and really, who needs to mention that thing that happened last year? You know what I’m talking about...

It might seem like a good idea to put your best foot forward when you’re putting yourself “out there”, but inevitably the truth will come out. Being creative with the information you share, whether shopping for a loan or for a date, is only going to lead to wasted time and broken hearts. Be upfront, be honest. If they can’t love you (or lend to you) for who you are, they’re simply not worth your time.

There’s more to a great match than good looks Yes, yes. We know that you want to find that dreamy, tall, dark and handsome business loan. Turns out, so does everyone else. Bottom line – the most attractive candidates are spoilt for choice. While it might appear that “tall, dark and handsome” is available, the truth is they’ve got dozens of offers and can afford to be highly selective.

Those of us with a few little <cough> imperfections need to stop fantasising and start considering our real choices. This is not to say that you have to settle for second best; you just need a dose of perspective. Do you really need a low-rate term loan over five years? Or is a short-term cash injection just the ticket to get your business kicking up its heels again?

Rejection can be tough Nobody likes to be rejected, whatever the reason.

Maybe that guy who looked perfect didn’t like your hair but failed to notice you share the same passion for the theatre. Maybe your bank manager didn’t like your lack of profits but failed to notice your fantastic business plan.

Whatever the reason, it can be tough.

Your friendly online matchmaker, however, allows you to cast your net wider and gets

start me up

the important business facts in front of the right lenders for you. If you provide as much information as possible about your business, we’ll make sure the lenders see the good stuff to minimise your chances of rejection.

The best match is often not an obvious one In hindsight, of course you found a fantastic partner. They support you, communication is great and you feel like you’ve really got to know them. But when you first met, you had really specific ideas about what you wanted and they just didn’t tick those boxes. In fact, you nearly passed them over entirely, and if it hadn’t been for a pushy friend, you may never have taken the leap.

They may not have ticked any of the boxes on your list, but they tick all the boxes on the list you should’ve had.

To give a finance example, a surprising solution such as pension-led funding may be the perfect fit for your business. But had you even considered unlocking your personal pension to fund business growth?

Sometimes the happiest relationships are the most unexpected.

Sometimes you just want a quickie Not all relationships need to last forever.

Sometimes it’s not about Mr Right, it’s about Mr Right Now. Both sides go in with their eyes open, you enjoy a short but fruitful partnership and then you move on. Just what the doctor ordered.

So long as you’re honest from the outset, know what you’re after and are maybe prepared to look at a few alternative options, your online matchmaker should be able to get you the best date for your business.

Growth hacking – achieving fast, exponential growth – requires a different approach to traditional marketing. Eoin O’Hara has the lowdown on the tools that can help SEO tools

Colibri.IO has created a number of tools that amplify social media visibility, as well as search engine optimisation. Its services are based around social media “listening” as well as SEO monitoring. Diversification of traffic, and embedding your business within the most relevant online conversations, is meant to kickstart growth.

B2B lead generators These are list-building platforms and software that make lead generation less of a hassle by automating the process. Most provide information that qualifies the lead, ensuring you’re targeting the best business. MixRank is one of the bestknown platforms, but there are dozens of others.

Conversion/behaviour tools SessionCam is a clever tool that allows access to recordings of the behaviour of visitors on your site.

You can discover where they’re clicking/hovering and use this as a catalyst for targeting problem areas, thereby increasing your conversion rate.

User feedback tools Customer feedback is essential if you want to experience quick growth. Olark Live is a smart tool that allows you to connect directly with visitors to your site, if and when you choose to.

It provides you with useful information about visitors’ habits, allowing you to engage with them in a more meaningful way. This feature can be enabled for specific pages; you can thereby engage with potential consumers of your more profitable products and services. Or try Qualaroo, which embeds simple surveys into your site, which aim to dig down to the root of your visitors’ behaviour.

Eoin O’Hara is a business developer and lead copywriter at the entrepreneur networking site Startacus.net. Read more of his articles at www.workspace.co.uk

Funding Options helps companies to access alternative finance by matching businesses with specialist niche lenders. To find out more, go to www.fundingoptions.com

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growth strateg y

bao-house The seed was planted in Club Workspace, and now African brand Aduna has blossomed into a successful business, with a new Kennington Park HQ and a range of high-profile stockists for its superfood health products The baobab is a tree that grows in 32 countries across Africa. It thrives in the wild and doesn’t require any fertilisers, yet it produces a nutritious fruit around the size of a coconut. The fruit has a shelf life of two years without refrigeration, and has a hard shell that makes it easy to transport and export. It’s the very definition of a low-maintenance crop, and it can already be found in people’s back yards.

Most importantly, the baobab has numerous health benefits. It’s rich in vitamin C, for example. When Andrew Hunt, founder and MD of health and beauty brand Aduna, lived in Gambia for four years, his landlady would prepare him a baobab shake every morning. He always “felt much better for it”.

This African staple has enormous potential. In Zimbabwe, it’s said that the population consumes 60 tons of the fruit and exports the same amount, and 20,000 tons go to waste – and that’s typical across Africa. In the continent as a whole, an estimated eight to 10 million households farm it already. Says Andrew: “That trade in baobab-related products could create a market worth $1 billion for rural Africans.”

The Aduna team have decided now is the time to make baobab famous, with their line of superfruit nutritional supplements and energy bars. And in line with the profits they could potentially reap, they are dreaming big. Recently, they were runners-up in Richard Branson’s Pitch to Rich competition, which won them a £100,000 marketing budget, and they partnered with Holland & Barrett, who donated space in their shop windows to the startup. Aduna have form; their products are already the best-selling superfoods in both Whole Foods Market and Planet Organic, and they were the first food to be sold in beauty halls in Liberty.

Words: Fleur Macdonald

New direction, new challenges The path hasn’t always been straightforward for those behind the award-winning startup. Andrew originally worked in advertising until he decided to abandon his successful career (he was the youngest account director in his firm and looked after clients like Heinz and Pfizer) to do something he really cared about. But after working as a scriptwriter and finding that didn’t fulfil him either, he became despondent.

His involvement in Africa came about by chance. A family friend asked him to come out and help a fruit-and-vegetable social farming enterprise in Gambia. After four years Andrew returned, worked in various Africa-related jobs

44

“That trade in baobab-related products could create a market worth $1 billion for rural Africans”

and got an MBA from Oxford, becoming, as he puts it, “an expert in west African horticulture”.

In 2011 he founded Aduna as a response to everything he’d witnessed during his time in Africa; firstly, it was an acknowledgement that aid wasn’t an efficient way to help those on the ground, but it was also a counterpoint to the images of doom, gloom, famine and war that the media usually propagate when portraying the continent and its people. And it was how he wanted to earn his living.

“As a marketing person, I was never interested in business, but this is a social business,” he explains.

“Success is not measured in terms of sales of frozen ready meals, which no one cares about, but if we sell a lot of baobab, the family who grow it will be able to build a new room and not all sleep in the same one.”

Aduna was originally launched in Club Workspace.

The team at that point was small: just Andrew and an intern, while his business partner Nick worked at home.

Then they managed to raise £200K from friends and family in two rounds, after setting up a Facebook page for product feedback and receiving lots of requests to invest. Andrew has two pieces of advice for anyone considering this type of funding: “Tell people only to invest money they can afford to lose. And get the most out of SEIS and EIS tax breaks that you can.”

The company raised their next round from the socialimpact fund Clearly So. Aduna “can’t take institutional investment as it’s only interested in the bottom line. But we’re not here to build the business up and sell it. We’re here for the long haul.” Aduna has now, as Andrew puts it, “gone beyond what angels can do”. They’re currently preparing for a bigger round with social-impact funds looking to support women farmers in rural Africa.

The company is now based at Workspace Kennington Park; they grew too big for Club Workspace and Andrew’s living room, where they were temporarily located. “Kennington’s a good location,” says Andrew.

“There’s natural light. And enough space for everyone and plenty of storage.” He also stresses that it’s “great to have a community of young businesses around us”.

In fact, Aduna got a lot of votes for Pitch to Rich by knocking on all the doors of other businesses in Kennington Park. The £100,000 they won will go towards taking baobab and moringa, the next superfood they’re pushing, into the mainstream.

Rest assured, you’ll be seeing an Aduna product in a Waitrose near you very soon. www.aduna.com

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â&#x20AC;&#x153; I was never interested in business. But this is a social businessâ&#x20AC;?

start me up

xx

entrepreneurs “ You shouldn’t focus on why you can’t do something, which is what most people do. You should focus on why perhaps you can, and be one of the exceptions.”

Steve Case

space

man He’s been there, done that, sold up and started again…

Brett Akker, co-founder of Streetcar and now chairman of storage startup LOVESPACE, shares the lessons he’s learnt on his business journey

Last year was a very good one for LOVESPACE, the “pick up and store by the box” company.

They expanded to a team of 25, acquired a new 25,000 sq ft warehouse and moved into a new HQ in the City. What’s more, they’re now well on their way to cornering the smallbusiness sector as well as the consumer market, storing clients’ goods before sending them on to customers or trade shows. Which means boxed-up bathroom fittings, lingerie, theatrical props and baby products awaiting delivery now occupy their warehouses alongside the usual boxes of household paraphernalia.

“There’s no straight path; there have been plenty of ups and downs along the way” 46

That’s not to say that growing the business, in often unexpected directions, has been easy.

“There have been plenty of times, with both businesses, when I’ve thought, ‘Is this going to work?’” admits founder Brett Akker. “There’s no straight path; there have been plenty of ups and downs along the way.” Who better, then, to share a few business insights with us, and point other startups on the way to success?

On catching the startup bug “Once you’ve done something for yourself it’s really hard to go back to corporate life. It’s the challenge of building and growing a business, and creating a brand. Both Streetcar, which was a car-sharing club, and LOVESPACE were fairly new concepts at the time. But there’s a lot that goes with that, like building a great team.

At the end of Streetcar [before it was sold to Zipcar for £32 million in 2010] we had 250 employees, and creating that sort of level of employment is something that I’ve always taken pride in.”

On what it takes to be an entrepreneur

“My parents ran their own fashion business, so I got to see what working for yourself looked like, and in my spare time I did a bit of work for them.

So I guess the initial seed [of entrepreneurialism] was sown when I was a kid. But more than that, I think you need to be a certain character, you need a certain bloody-mindedness to get you up in the morning when you’re not sure there’s even going to be a business at the end of the day.”

Networking helps “We’re hoping to expand hugely in 2016 and beyond. The fact that we’re based at Workspace [at Gray’s Inn Road], and have those links, really helps, because it means we’re very much part of a startup community. And startups tend to be our perfect customers – they’re people without massive offices, without huge storage solutions, and we really can help them maximise the space they’ve got.”

How to tell if an idea’s “the one” “You might have a decent idea, but if you don’t do all the preliminary stuff before you launch, you could easily be set up to fail. There’s a lot of preparation you have to go through: you need to measure how big the market is, whether there is in fact a market there at all; you have to do some thorough planning, whether that be financial, marketing or operational. Having said that, for the go/no go decision, while you take all that into account, there’s an element of gut feeling. And I think I got to the point with both Streetcar and LOVESPACE where I felt the concept was very strong, the demand was there, and wouldn’t I be upset when I saw someone else doing it in a few years’ time when I could have done it myself?”

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“Your business is your baby – you really do care that much” Feel good about what you do

Investment is changing

“Right from the start of LOVESPACE, we knew we wanted social responsibility to play a part in the business. But for early-stage businesses with limited funds, there are limited ways you can make a difference. It was Steve [Folwell, LOVESPACE’s MD] who came up with the idea of an Oxfam offer: when customers place an order, they can also add a box for Oxfam, which we collect and deliver free of charge. It’s of huge benefit to our customers – residential or business – as it helps their CSR, and obviously there’s a big benefit to Oxfam. It’s now a core part of what we do; having that as part and parcel of our everyday business is something we really wanted to achieve, and something we’re all extremely proud of.”

“It’s a very different landscape now, to when we started Streetcar. Then, we launched the business with savings, got an angel round of a couple of hundred thousand, and then the only other round we did was when Smedvig Capital came on board.

Now, I’d say angel funding for that initial seed round is still pretty prevalent out there, but for that in-between phase, between an angel round and a larger VC round, the fact that crowdfunding and other types of alternative finance have come along is hugely helpful. We did a crowdfunding round with Crowdcube in the summer of 2014 of just over £1.5 million – it ended up being a mixture of angel investors, VCs and the crowd.”

On thinking outside the box(es)

“That’s how I thought of Streetcar, and now LOVESPACE – you really do care that much. You need to live and breathe your business. I invest in startups myself now, and when I go and see them, 99 per cent of any decision about getting involved is about the person or the people behind the business. Because you know that it’s never going to be a smooth ride with a startup, you’ve just got to make sure that you are totally in it for the long haul, whatever may happen, and whatever bumps you come across along the way.”

“We certainly foresaw that small- to medium-sized businesses would be customers of LOVESPACE. I guess what’s changed over the past year or so is our thinking around exactly what they would use us for. When we launched we presumed we’d be useful to companies looking to store their archives, and people certainly do use us for that. But a lot of businesses have started to use us as a key part of their operational function – their storage and their delivery out to their customers. So we’re very much managing the fulfilment/operational side of these companies, which we didn’t necessarily expect.”

Your business is your baby

www.lovespace.co.uk

“Right from the start of LOVESPACE, we knew we wanted social responsibility to play a part in the business” start me up

ABOVE Happy to help: the LOVESPACE gang

You’re only as strong as your team “It’s vital to build a great team around you. A lot of people make the mistake, when they’re recruiting, of choosing people they don’t feel are quite as good as them – it’s less threatening.

This isn’t something I’ve done at either Streetcar or LOVESPACE. Really try to surround yourself with people who you think are better than you at certain things; it’s very important.

“Starting something with a business partner can work phenomenally well, as long as you have complementary skill sets, like Steve [Folwell, LOVESPACE’s MD] and I. If you both have similar strengths and weaknesses, that’s where things can go wrong; you just find yourselves banging your heads against each other 24/7. Fortunately, I haven’t had that with Steve, and I never had it with Andy, my co-founder at Streetcar, either.”

“Really try to surround yourself with people who you think are better than you at certain things”

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and hereâ&#x20AC;&#x2122;s your host...

Your Club Workspace host is your first point of call if you have any queries, need some help or, in the case of Leon Marshall, who works across several central London Clubs, you want to debate the merits of ’90s hip-hop. We met up with the part-time DJ and asked him to tell us a bit about himself, and why Clubbing is good for business.

What does your role as a Club host involve?

I’m there to meet new and potential customers and show them the Clubs we have.

Some companies have very specific requirements so it’s important that I know all of the Clubs and what facilities they have. Having a good general knowledge of the locations is important as well; many companies will only want to move to vibrant neighbourhoods with not only good business communities, but also good transport links, cafés and pubs, as this helps them attract a better calibre of new staff. I also speak regularly to growing companies to gauge their future requirements: are they ready for an office? Can we offer them a team room? Similarly, we have also had companies who have downsized from Workspace offices into Club as this suited their working pattern better, as well as being of financial benefit.

What are the qualities you’ve noticed in successful entrepreneurs while working at Club?

The most successful members have a clear vision of where they want to take their business and can easily sum up what their business does in one line. Gone are the days where long plans secured higher investment; we’re all very time-conscious now and the best entrepreneurs can sell their ideas in very concise ways.

Have you noticed any startup trends at Club Workspace?

We’ve seen a big increase in recruitment companies joining us, which is a good sign for our economy! The guys who work for these companies tend to be very outgoing. They’ve brought a lot of personality to our Clubs and seem to take on an unofficial “social secretary” role – they’re the first down the pub on a Friday and normally last to leave.

“The most successful members have a clear vision of where they want to take their business” How do you think members can get the most out of their Club memberships?

Home is...

Peckham – no income tax, no VAT (I wish!)

First thing you do when you come in from work?

Get the tunes rolling out.

Shopping secret?

Vintage Basement in Brick Lane is great for threads and you can’t beat Rye Wax in Peckham for beats.

Favourite neighbourhood?

I still think Dalston has a lot to offer and Shoreditch is having a renaissance. Peckham offers a Pandora’s box of possibilities.

Best pubs?

I think some pubs are seasonal, so I’d say the Palm Tree in Mile End in the summer, although the Owl & Pussycat on Redchurch Street in Shoreditch is great all year round.

Talk to us. We can let you know about any events going on that might be of benefit, as well as other members or Workspace tenants who might be looking for your services.

If you want to spread your networking net even wider, you might want to consider our Everyday Everywhere package; it means you can use any of our 13 Clubs based all over London. Ultimately, I’m a firm believer in being a consumer rather than just a customer, so if you want something extra just ask and we’ll always see what we can do for you.

Weekend routine?

What’s your elevator pitch?

It’s impossible to pick one!

But “Mass Appeal” by Gang Starr [below] really delivers.

Hip-hop songs very often give great production or great lyrics but it’s rare to get both.

Well, I’m practically elevator-pitching our Clubs on a daily basis along the lines of, “What does your business do? What do you need? Here’s what we can offer and here’s who you can talk to who will help grow your business. Oh, I forgot to mention, so-and-so – who started off with two people – has just taken a 10-man office next to the river…”

Customers, just like investors, like to see tangible examples that show them something can work well for them.

Where can we take you for a post-work pint?

We’re lucky that London Bridge, where I’m often based, has a really eclectic mix of boozers. The Old Thameside Inn is an ’80s stale-carpeted pub that actually has a great outside area that juts into the river; it’s unrivalled for riverside drinking in the Bankside area. My favourite for a bit of olde worlde charm is the George Inn on Borough High Street – it’s the typical “Dickens drank here” sort of place but feels a lot more authentic than some of the other historic pubs in the area.

Follow Leon @LeonClubWS

Gym, brunch, coffee, dinner then time to iron the Ben Sherman and off I go.

Top track?

Is your financial plan missing a key piece?

Here at Informed Funding we’re always looking for ways to help businesses get the financial planning they need and Workspace customers can access a range of our premium services: — Free registration on www.informedfunding.com —F ree access to Informed Funding’s tailored finance seminars, held at Workspace locations —F ree access to Informed Funding’s facilitated one-to-one workshops, helping you with strategy and becoming “finance ready” —F ree one-hour consultation with one of our experienced team, who can help you identify your business’s best funding options

Informed Funding, connecting businesses to finance

We’re here to help, so contact us now by calling +44 203 176 5243, mailing workspace@informedfunding.com or visit www.informedfunding.com to see how your business can benefit from being better informed

the long read In our new regular section, we ask an industry insider to dissect a key issue affecting British business. Here, FT and MoneyWeek regular David Stevenson tackles the thorny subject of funding: why banks wonâ&#x20AC;&#x2122;t lend, which alternative suppliers will, and how the seismic shifts in the financial landscape will impact on us all. In short...

whatâ&#x20AC;&#x2122;s next for small-business finance? the hidden costs of banking ~ the funding gap: just how big is it? ~ new suppliers vs the old order ~ a better way to fund fast growth? ~ how tech innovations are shaping the future of finance ~ getting your business alternative finance-ready

alternative finance

the

alternative finance revolution The funding gap is as big a problem as ever for British businesses. But with banks unwilling to lend, a slew of new providers are weighing in, hoping to shake up the finance market for good. Financial journalist David Stevenson, executive director of AltFi.com, examines what it all means for startups and SMEs – and there’s good and bad news…

We like to think that “everything changes”, that today is truly different from the past, but if we look at the world of finance it seems we’re all doomed to repeat the same mistakes of the past, Groundhog Day-style. The funding gap was a massive issue back in the 1970s and it remains one today. Put simply, small businesses need capital and credit to survive and prosper, but there’s simply not enough debt and equity around to satisfy reasonable expectations.

But maybe, just maybe, the Panglossian forecasters predicting better futures are on to something when they suggest that “this time it really is different”.

A revolution is brewing within the fusty, dusty world of finance. Platforms such as Funding Circle, ThinCats, FundingKnight and Assetz are now growing their loan book for small businesses by

a significant challenge for many businesses.

Marketplaces like Funding Circle are often better placed to help such businesses, but not enough are aware of these options – we need to change the ‘bank first’ mentality.”

What’s true for Funding Circle is true more generally across the whole sector. The chart on the opposite page (Fig. 1) from AltFi Data – a wing of AltFi.com, an alternative finance news site – shows huge growth in this space over the last five years.

Virtually every week a new crowdfunding platform emerges to challenge market leaders such as Crowdcube, Seedrs and SyndicateRoom.

New products are also starting to emerge at a dizzying speed, with all manner of working capital solutions making an appearance, ranging from MarketInvoice – guess what they do – to ArchOver and Growth Street with their

“We need to change the ‘bank first’ mentality” upwards of 10 to 20 per cent a month. But even this frenzied rate of growth isn’t enough to meet demand.

Pam Burton, Funding Circle’s UK chief operating officer, argues that the funding gap is still large. “According to Bank of England lending figures, overall net lending to small businesses increased in Q3 by £250m, and at Funding Circle investors contributed net lending of £66m,” says Burton. “While this is encouraging, it doesn’t hide the fact that access to funding still remains

52

traditional bank overdraft lookalikes.

The result of this revolution may be a huge, tech-powered change in the financial ecosystem that might actually help all of us, by providing sounder funding for businesses, which will in turn help businesses create more jobs for the UK economy. To understand what is possibly on its way, we need first of all to grasp a few highfalutin’ concepts, namely the notion of creative destruction as well as the origins of banking.

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Fig. 1

an expanding market The growth in online invoice financing and P2P business lending since 2010 has been exponential Source: AltFi Data

Out with the old?

The term creative destruction was popularised back in the 1940s by the economist Joseph Schumpeter. It describes the process by which the “old” was overturned by the new in the world of business. We’re all familiar with the story: a once prosperous, high-margin sector of the economy is identified by competitors as ripe for change – think textiles. Along comes a new technology that enables competitors to flood into the space (steam power), investing in brand spanking new capital equipment (mechanised looms), intensifying price wars (bankrupting artisan weavers) and eventually depressing margins.

Perversely, though, one industry has largely held out: finance.

Until very recently, banking and the finance of trade didn’t look that much different to how it did 200 years ago. The names on the doors of the banks might have changed but the lending models had stood the test of time.

Of course, there has been rapid change in the use of technology, but the old business structures were pretty stable. Talk to insiders at huge banking goliaths such as HSBC and they’ll joke that sometimes big banks resemble vast IT businesses – with large bases in India, and a bunch of branches and a small army of relationship managers stuck on top. Banks have been adapting technology to serve their needs for decades, but something rather peculiar happened as a result. In most industries undergoing rapid technological change, margins fell.

That wasn’t the case in banking and finance more generally. In fact, there is plenty of evidence to suggest that the introduction of technology has increased costs to the end user – that’s you and I. To understand this astonishing state of affairs it’s worth reading an excellent academic overview paper by Thomas Philippon of New York University, “Finance vs Wal-Mart: Why Are Financial Services So Expensive?”

Looking at the US market, Philippon suggests that the total compensation of financial intermediaries including banks (and comprising profits, wages, salary and bonuses) as a fraction of (US) GDP is at an all-time high, at around

the long read

nine per cent. The US-based academic estimates that historically the unit cost of financial intermediation has been somewhere between 1.3 and 2.3 per cent of assets. Yet peculiarly, this unit cost has actually been trending upwards since 1970 – or, as Philippon puts it, “the finance industry of 1900 was just as able as the finance industry of 2010 to produce loans, bonds and stocks, and it was certainly doing it more cheaply. This is counter-intuitive, to say the least.”

Philippon’s devastating conclusion is that “the finance industry’s share of GDP is about two percentage points higher than it needs to be, and this would represent an annual misallocation of resources of about $280 billion for the US alone.”

My guess is that what’s true for the US is doubly so for the highly concentrated UK finance market.

What went wrong with the banking model, and what are the implications for SMEs? Imagine you are the lucky owner of GradGrind Banking PLC, sanctioned and authorised by the old lady on Threadneedle Street herself, the Bank of England. Your model hasn’t really changed in centuries. For every £1 you take in, you are allowed to lend out a further £10. But the challenge then becomes to work out who to lend to.

The hazards of lending Option one is to lend money back to one of the biggest sources of deposits – consumers – via personal loans. This is a good, reliable credit business model with proven statistics to manage risk. Returns probably won’t be amazing (most likely in the mid single digits) but if everything goes wrong, you can always send in the debt collectors. The good news is that even in bad times such as a recession, default levels – people not paying back a loan – rarely rise above six per cent.

Option two is to lend to consumers again, but to fund their property. Mortgages are a huge growth industry for banks. To understand this growth consider this fact about bank and building society mortgage lending in the UK. Even though we’ve had to suffer an unprecedented global financial crisis, which supposedly reined back in leverage, total mortgage balances outstanding in

the UK have risen from £675 billion in December 2002 to a staggering £1.27 trillion in September 2015. Crisis, what crisis? For the last decade or so, property as an asset class seemed like a one-way bet. What could possibly go wrong for lenders?

Anyway, property has an obvious appeal for banks.

It’s a hard asset that can be used as security for a loan. It can be repossessed, and there is fantastic visibility about the underlying value of the asset.

Option three is to take the plunge and do the really risky thing: lend to businesses – big businesses, with thousands of employees and huge balance sheets. These corporate behemoths, many of them quoted on the stock exchanges of the world, provide fantastic transparency about risks, and they also boast decent asset backing. They provide another virtue for big banks too: liquidity.

A bank can take part in a bond issuance by a major corporate, and then if they need to sell the bond, they can easily transact on one of the many bond and loan note security platforms globally.

The last option, number four, is lending to small businesses. This is a self-evidently riskier proposition for a bank, although it can also be a profitable one. Small businesses rarely have the asset backing that corporate giants offer, although at a push a personal debenture can be extracted from a director based on their own property. They also have a tendency to go bust. The chart on page 54 (Fig. 2), from the UK Government-backed British Business Bank, gives some sense of just how many new small businesses go under every year. It shows the number of SMEs registered with the HMRC and their survival rate a few years out. Note that fiveyear survival rates are under 50 per cent!

Knock-on effects Given these startling numbers, it’s not surprising that in recent years SME lending went into freefall.

The chart on page 55 (Fig. 3) shows the total amount of lending to SMEs since 2009. You can see clearly that we are still below levels last seen in 2008, eight years ago. To say that there was a funding gap for smaller businesses in the first half of this decade is something of an understatement.

In fact, it’s arguably worse than that – industry stats

53

alternative finance

“ Repayments by SMEs on their loans have consistently outstripped gross lending.

This means that the SME sector is actually a net lender to the banks” summed up in the chart show that repayments by SMEs on their loans have consistently outstripped gross lending. This means that the SME sector is actually a net lender to the banks.

What impact have these broad behavioural shifts had on the SME sector in the UK? The first effect is that some smaller businesses in the UK have been denied access to credit. In fact, small businesses choose not to apply for credit because they worry they’ll be denied a facility, thus impacting their credit record. One of the main professional bodies of the accountancy industry, ACCA, noted last year in evidence to the House of Commons that there was a growing trend in SMEs that choose to “disengage” from credit. They reported that disengaged SMEs or “permanent non-borrowers” made up 41 per cent of the UK SME population on last count [2013], up from only 30 per cent in early 2011.

It’s important, though, to step back from these broad observations and acknowledge that the wider SME market is made up of vastly different types of firms, in varying stages of the corporate “life cycle” – and varying access to credit.

Very early-stage startups, for instance, are likely to have different financing requirements (more equity, perhaps) than “gazelles”, which are bigger, fast-growing businesses that frequently employ hundreds of staff, and perhaps have an international focus.

The accountants’ body, ACCA, has attempted a segmentation of the vast SME market to pinpoint four types of business that are underserved when it comes to funding: ~Y oung and informationally opaque businesses ~F ast-growing, innovative SMEs relying heavily on intangible assets ~ I nternationalised SMEs

credit has had a direct effect on employment – and that matters because so much new employment is created by SMEs. In broad terms, government agencies such as the British Business Bank believe that small- and medium-sized businesses produce half of the private sector output and employ 63 per cent of private sector workers. In terms of the pace of job creation, the BBB also argues that existing small firms with fewer than 50 employees and new business startups contributed approximately onethird each to a total of 2.61 million jobs created on average each year between 1998 and 2010. If a large proportion of these businesses are being starved of credit, there’s almost certain to be an impact on job creation.

It’s clear from this mass of evidence that there is a funding gap in the UK, which in turn is having a very real impact on the productive potential of the UK economy. The $64 billion question is what can be done about it?

BUSINESS SURVIVAL RATE FOR BUSINESSES REGISTERING FOR VAT/PAYE BETWEEN 2007 AND 2011 100% Survival rate for businesses registeringfor VAT/ PAYE 80%

60% Births 2010 Births 2009

40%

Births 2008 Births 2007

20%

One year survival

Two year survival

Three year survival

Four year survival

Five year survival

~S MEs experiencing sudden credit rationing from suppliers.

Geoff Miller, until recently the CEO of GLI Finance, a serial investor in the alternative finance space, has his own take on the exact extent of the funding gap. According to Miller, “We’re now faced with a situation where the often complex needs of high-growth businesses are left significantly under-served. Crucially, it’s not just about availability, it’s about being able to access the right type of finance at the right time, and it’s here that the alternative finance industry has been able to add real value.”

Regardless of the business type, poor access to

54

Fig. 2

business survival rates Under 50 per cent: the number of companies registered for VAT/Paye in 2007 and still going strong in 2011 Source: British Business Bank

Government initiatives To its credit, the UK Government has been at the forefront of those trying to change the financial ecosystem for SMEs. From the early days of the global financial crisis the Treasury and the Bank of England have been on the front foot, providing huge lines of credit through the Funding for Lending Scheme (FLS) – making a major difference to the UK credit markets. The Treasury has also been an enthusiastic supporter of competition within the banking sector and has also helped pump prime new borrowers through the widely lauded British Business Bank. This year, it is aiming to launch the much-vaunted bank referral scheme, which will mandate that any business customer refused credit by the high-street banks must be passed on via an electronic exchange model to a panel of alternative lenders.

Activist government is, of course, to be applauded, but the harsh realities of markets provide a brutal reality check. The chart overleaf (Fig. 4, page 57) shows the market share for the top five high-street lenders in the UK to SMEs over the period between 1993 and 2013. Notice a seismic change? See a massive wave of disruption born by creative destruction? Thought not!

So, what’s the solution? Cue the crowd, or perhaps more accurately a crowded market. The big five banks may still dominate the aggregate lending market for businesses in the UK, providing 90 per cent of lending to businesses, and 85 per cent of SME current accounts (according to the Competition and Markets Authority), but there’s no shortage of upstarts looking to challenge this oligopoly. In the dedicated SME market, for instance, we have Shawbrook and Aldermore – with smaller outfits such as Secure Trust, Capital One Savings and OakNorth snapping at their heels. These outfits are gamely battling it out with banks boasting a broader product franchise, including brash upstart Metro Bank, Swedishowned (and highly conservatively managed) Handelsbanken, plus newbies TSB and the soonto-be-launched Williams & Glyn (emerging out of the RBS behemoth).

But already we can see evidence that the “rot” is setting in, that banks – being banks – are sticking to traditional business practices. A recent report from KPMG quotes its head of challenger banking and alternative finance Warren Mead, who observes that for “those challengers focusing on customer service or cost as a differentiator, this could be a major hurdle for the future”. In fact, KPMG found that some of the challenger banks are beginning to morph into “Big Bank lookalikes themselves. Large challenger lenders saw a 2.1 per

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ANNUAL GROWTH IN SMALL BUSINESS AND SME LENDING STOCK %

Fig. 3

small improvements The annual growth in small business and SME lending stock – the trend is upward

% BBA Small Businesses (b)

BBA SMEs (e)

Bank of England SMEs (d)

BIS SMEs (c)

15

15

10

10

5

5

0

0

-5

-5

Source: British Business Bank -10

-10

-15

-15 Sep 14

Mar 14

Sep 13

Mar 13

Sep 12

Mar 12

Sep 11

Mar 11

Mar 10

Sep 10

the long read

Sep 09

Over in the equity part of the spectrum we have the crowdfunders. This model was pioneered in the US by the likes of KickStarter and IndieGoGo, who’ve helped launch countless thousands of exciting/curious/pointless new tech products aided and abetted by donations from the crowd. Next-gen platforms such as Crowdcube and Syndicate Room, by contrast, focus their efforts instead on raising equity by selling shares in the new business.

How is alternative finance different?

However, the fastest growth has been in what’s called alternative finance. Challengers within this market comprise Funding Circle, ThinCats, Assetz, FundingKnight, MarketInvoice, Platform Black and a much longer trail of new platforms.

Fig. 5 (page 57) shows the total loans issued this year to date by the top 10 UK alternative finance business lenders – as well as total loan origination since 2010.

So, what constitutes an alternative finance solution? Definitions for this brave new world of finance vary, but we can tease out a number of common themes.

The key motivating idea behind this broad space – which includes marketplace lending (also known as P2P lending) and crowdfunding – is “distributed intelligence” about the lending decision process.

In the banking systems of old, knowledge about rates and returns moved in a fairly asymmetric pattern, from the top downwards.

Managers sitting in tall, shiny ivory towers in the City would stare at risk models and then determine what appetite for risk they had. Internal risk-control departments would then check the bank’s general lending policy against an individual applicant’s personal circumstances.

Alternative finance platforms such as Funding Circle and the others mentioned above take a different approach. They are in effect a network, where borrowers and lenders interact.

The marketplace determines the price of a loan. If there’s a great wall of money on the platform, the price of the loan (the interest rate) declines. By contrast if lenders dry up, and defaults skyrocket, the price of borrowing should shoot up.

The simplest financial product on offer is the straightforward term loan, usually for between two and five years. In this part of the alternative finance spectrum, a business will apply to list its

Mar 09

Sep 08

Sep 07

Mar 08

Mar 07

Sep 06

Mar 06

Sep 05

Sep 04

Mar 05

Mar 04

cent return on equity in 2014, compared with the 2.8 per cent return seen by the mainstream banks.”

And lurking behind these challenger banks are more traditional specialist finance lenders such as Bibby and Ezbob. These businesses tend to take one vertical such as invoice discounting as their core product model, but then offer complementary products as they grow their customer base.

Sifting the data

“If businesses are starved of credit, there’s an impact on job creation” loan on the platform, pass various credit checks and then offer up its loan at an interest rate that it thinks is viable. If the price is set too low, investor interest is too low; if it’s set too high, demand overwhelms supply very quickly.

Debt-based products built around term loans are popular with alternative lenders, but there’s also a growing niche around what can broadly be called “trade finance”. This might range from funding an invoice (MarketInvoice and Platform Black) through to help with financing international supply chains (Aztec Exchange and TradeRiver Finance).

We’re even seeing the emergence of products that are in effect modern-day replicas of the oldfashioned bank overdraft – a short- to mediumterm duration product that might last a year but is secured upon cash flow. This space is dominated by the likes of Growth Street and ArchOver.

Which form of alternative finance works for which business? The sheer range of platforms on offer is quite simply mind-boggling. There are dozens of marketplace lenders in the UK and probably the same number within the crowdfunding equity space – although they include those companies at the tip of the tail that operate donation or socialenterprise funding models. As a general rule, crowdfunding equity tends to appeal to earlier-stage businesses and especially startups, whereas P2P lending is more popular with more established – dare we say profitable – businesses looking for help to grow to the next stage.

According to Rupert Taylor of AltFi Data: “In 2015 marketplace lenders will facilitate £1.5 billion of lending to UK SMEs. By 2020 we estimate that this figure could reach £12 billion, around 15 per cent of the total addressable market.” Some believe the market may be even bigger. What’s powering this remarkable growth? Time to go back to the global financial crisis (GFC) of 2008/9…

One side effect of the GFC has been an unprecedented period of low interest rates. This has been called financial repression by some and is a very conscious policy choice by the central banks of the developed world: keep interest rates low so that savers will tire of boring savings and start to take chances by investing in riskier things such as lending to small businesses.

Interest rates in the US and UK might start to increase by a few quarter-percentage points in the next 12 to 18 months, but very few banking analysts think we’ll see a return to rates of more than 2.5 per cent any time this decade. In fact, a number of leading banking analysts believe we could be in an ultra-low interest rate environment for the next few decades.

55

alternative finance crowdfunding focus

fast growth? a better way to fund

Survey data suggests a worrying narrative for the UK economy – access to finance is one (major) factor that is contributing to a lack of entrepreneurial ambition. For example, one study by the British Business Bank found that only a small proportion (16 per cent) of business startups have high growth ambitions, and a smaller proportion actually achieve high growth.

In fact, according to this analysis, “High-growth businesses formed 6.6 per cent of businesses with 10 or more employees in 2010–2013, equivalent to roughly 10,000 businesses”.

Back in 2014, the accountancy body, ACCA, also observed that “fast-growing, innovative, intangible-capital intensive businesses were already credit rationed in the heady days of 2006–7, not only in the UK but throughout Europe. We believe that this is part of the reason why high-growth firms’ share of UK job creation has fallen consistently since the early 2000s. More recent evidence confirms that the bias against innovative businesses did not emerge during the recession, but is a structural problem of the UK finance market. Fast-growing businesses are less likely to be successful when applying for loans, indicating a preference among the banks for stable, non-contingent growth.”

That view is certainly echoed by one leading industry leader (and investor in just under 20 alternative finance platforms): Geoff Miller, until recently CEO of GLI Finance. He thinks too many in the industry focus on the plight of startups and don’t think about the challenges facing high-growth businesses. According to Miller, “Too often when people think of alternative finance they jump to the conclusion that lending is focused on small startups which are low value and high risk. While in some areas of the credit ecosystem that’s true, jumping to such conclusions only highlights the lack of understanding around the sector. Many of our platforms are funding well-established, multimillion-pound-turnover businesses, which have a long track record that allows their risk profile to be accurately assessed. It goes back to the point that the central problem the industry addresses is the complexity of SMEs’ financial needs and being able to address these over the long term as businesses grow.”

56

Then again, maybe the focus on using loans to fund growth is the wrong approach? Perhaps equity might be a better solution? That’s certainly what the co-founder of one of the UK’s fastest growing crowdfunding platforms thinks. Tom Britton is CTO of Cambridge-based Syndicate Room, an internet-based service that helps dynamic entrepreneurs raise money by selling equity stakes in their business. Its relatively unique approach is to work alongside existing angel investors – frequently entrepreneurs who’ve already made money from private business – and smaller venture capitalists. This partnership approach has helped it grow at breakneck speed.

“It’s that £0.5 to £5m gap that crowdfunding platforms are starting to address”

We asked Tom to map out the prospects for equity-based crowdfunding in the UK. 1. Are credit and equity more readily available for SMEs now, and is there really still a funding gap?

If there is, which niches are most acute?

“Platforms seem to have helped plug the space for first and second funding rounds and while the number of rounds above £1m is on the rise, there is still a huge gap in the £1m to £5m space that was vacated years ago by early-stage VCs.” 2. How will equity crowdfunders fight back against traditional investors, such as VCs? “It’s not so much fighting back as learning to work together. We’ve already had VCs leading funding rounds where the crowd is allowed in, so the momentum has started. Ultimately, though, platforms automate a number of the functions that traditional investors charge to provide. In the end I suspect the fees charged by these traditional investors will come down, or more limited partners will shift their money elsewhere.”

3. Aren’t we in the UK too focused on startups and not businesses in the £0.5m to £5m gap?

How will this latter group be better served by alternative finance providers?

“In the early days, had you put even a £200K round in front of the crowd they would have baulked, knowing there was little chance of that amount being raised. The supply of capital was restricted because people were still trying to figure out what equity crowdfunding could offer, so the platforms focused attention on the early-stage rounds that were likely to be completed. Now, though, given the larger awareness and larger crowds, it’s precisely that £0.5m to £5m gap that platforms are starting to address, and not just with crowds but by truly playing the role of platform, including more traditional investment players in the same rounds.”

4. If total transactions are in the low hundreds of millions for equity funding now, what’s your prediction for total origination by 2020?

“The appetite for these types of investments from the crowd is increasing and, as platforms are bringing in family offices, institutions and VCs to invest alongside the crowd, it’s easy to see this market growing well beyond £1 billion by 2020.”

www.workspace.co.uk

VOLUME SHARES OF BUSINESS LOANS IN ENGLAND AND WALES, YEAR TO Q1 2013 2013

1999

Fig. 4

banks: still big business

LBG 25%

LBG 26%

RBSG 31%

RBSG 26%

Barclays 23%

Barclays 19%

The big banks’ shares of business loans in England and Wales to Q1 2013 shows little change between 1999 and 2013.

HSBC 12%

HSBC 18 %

Santander Group 12%

Santander Group 4% Others 7%

Others 5%

HHI: 2,073

HHI: 2,280

Source: British Business Bank

If that’s the case, savers and investors have a problem. How do they get a decent return for their income-generating assets? Step forward marketplace lending platforms such as Funding Circle, Zopa and RateSetter. The AltFi Data chart on page 58 (Fig. 6) shows the average blended return from investing in P2P loans over the last few years; the rate is currently at around 5.45 per cent. Compare that rate with the high-street savings rates that barely offer much more than 2.5 per cent in interest, even if you lock up your money for five years (although it is worth noting that savings products are much less risky and are covered by the financial protection offered by the FSCS, whereas internet lending products offer no such guarantee).

“Investors want a piece of tomorrow’s Facebook”

Information, information, information Over in the crowdfunding equity market there’s a different driver at work. Interest rates may be low but investors are also determined to hunt down capital growth opportunities as well. For many investors this means access to startup businesses – traditionally the preserve of venture capitalists.

They want a piece of tomorrow’s Facebook.

But it would be wrong to presume that growth will only be driven by demand from investors.

There’s also an equally important supply side driver built around the quality of information on offer. To understand the transformation here, consider the following two scenarios. In the traditional banking model of old a bank manager would sit down with a client and decide what the

risk was of lending money to a business. They’d look at hard facts like the credit rating and the business’s balance sheet plus cash flow, and then make a decision. Qualitative and quantitative factors had a bearing, although we should never discount the “networking” effect of meeting the customer and knowing joint acquaintances down at the golf club or at the Rotary Club. But as bank managers became glorified sales managers, that model changed into a scaled-up, bulk data-

PLATFORM

LOANS TO Q3 2015

CUMULATIVE ORIGINATION SINCE 2010

FUNDING CIRCLE

£437,295,240

£913,943,720

MARKETINVOICE

£245,144,672

£558,568,550

LENDINVEST

£245,978,081

£440,960,459

WELLESLEY & CO.

£135,531,879

£279,095,144

THINCATS

£48,530,000

£136,913,000

PLATFORM BLACK

£22,746,735

£105,550,850

ASSETZ

£27,404,736

£83,053,044

FOLK 2FOLK

£34,565,400

£75,402,550

SAVING STREAM

£52,507,500

£67,442,807

FUNDINGKNIGHT

£17,613,500

£27,066,500

TOTAL

£1,306,680,268

£2,758,571,615

the long read

processing task with lots of account information mixed in with third-party (and patchy) credit ratings data. Mistakes were and are made, but along the way that qualitative aspect has been lost.

Big data and the ability of algorithms to analyse huge quantities of information is now offering the challenger banks and platforms the ability to see much more deeply into their borrowers’ “provenance”, in almost the same way a bank manager of old would.

Next-gen lenders are beginning to look at everything from social media information through to specialist information for each business sector (construction and transport are traditionally deemed higher risk, but not all potential borrowers are actually high risk). Perhaps more importantly, algo-based models used by the likes of Funding Circle in the UK and OnDeck in the US are crunching through this vastly increased breadth of information in search of new patterns that can help reduce the risk of lending to the wrong applicant.

But even these information systems could be superseded by insights gathered from lenders’ interaction with online accounting systems such as Sage One and Xero. Both of these software-inthe-cloud-based solutions gather huge amounts of information including invoicing, cash flow and HR. Imagine what would happen if those lenders could see into the client data, spot patterns and then make quick, personalised lending offers? “We see you are facing a cash crunch in two months – we can offer you a short-term loan at X rate in one hour’s time if you click here!”

Fig. 5

new-gen lending Total loans issued to Q3 2015 by the top 10 UK alternative finance business lenders, plus total loan origination since 2010 Source: AltFi Data

57

alternative finance

Fig. 6

happy returns?

The average blended return from investing in P2P loans over the last decade Source: AltFi Data

“Many of the upstart platforms now vying for business are untested”

58

The end game here is clear: we’ll break the stranglehold of the banks on the provision of financial products. We’ll use different providers for different products – or maybe one nextgeneration holistic provider such as PayPal, who will offer an end-to-end solution, using big data to better price financial products. If the latter scenario awaits, at what point does today’s alternative financier end up looking like yesterday’s bank but in a new guise?

Buyer beware Before any of this comes to pass, though, we need another reality check. Obstacles remain on the road to creative destruction within finance. Big banking groups are already quietly behind the scenes running a whole series of arguments with policy makers and journalists that quietly rubbish the claims made by alternative finance platforms.

Much of this is spin but some arguments are valid.

Possibly the most powerful argument is brand longevity. Shiny new products and sexy young providers are all well and good, but many business owners want a relationship with a brand that they can trust and can see will still be around in the next decade. Many of the upstart platforms now vying for business are untested, unprofitable and actually not that “next-gen” – they may, in fact, in truth rely on old-fashioned credit models that haven’t been battle-tested by a recession. And when that slowdown inevitably comes along, surely there’ll be a huge long list of platform failures, leaving business borrowers in a pickle.

Perhaps even more worryingly, some of these “alternative” platforms may fail before the next recession, for good old-fashioned reasons such as fraud and negligence. We’ve already seen the collapse of one Swedish P2P (consumer) lender called TrustBuddy, where a new management team uncovered evidence of a Ponzi-like “fraud”.

And if the next recession doesn’t stop the growth of alternative finance, the big established banks (perhaps helped by the regulators) might get there first, cut margins, expand business and strangle competition. Industry insiders such as

Geoff Miller, formerly of GLI Finance, agree that the banks will fight back aggressively – but he’s sanguine about the challenge. “As with all economic cycles, it’s inevitable that the banks will regain strength and increase their origination volumes and balance-sheet strength,” he says.

“That said, it doesn’t mean that SMEs will necessarily benefit. The current dilemma is more complex than just access to finance; it’s about the right type of finance at the right time, and it’s here that the alternative-finance sector has been a game changer. Traditional banks are simply unable to thrive in this complex dynamic.”

And if the banks don’t get to the alternativefinance competitors, the regulators might do it for them. Imagine a string of frauds on platforms.

Then the headlines: “Mrs Miggins lost all her pension on a P2P platform. Poverty awaits”.

Perhaps the cue for regulatory intervention might come with a recession when those supposedly next-gen, more accurate big-data models fall over.

Plenty could and probably will go wrong with this bout of creative destruction and disruption within the SME funding ecosystem.

But consider this one last observation. There is quite literally a huge wall of tens of billions of pounds provided by institutions ready to invest in SME loans, powered in part by those low interest rates mentioned earlier. By hook or by crook, this money will find its way into lending markets and SME cash flows, pushing down interest rates and broadening out the pool of borrowers. Some of this investment will probably result in losses during the next recession, but that’s investment for you. Along the way, UK PLC will benefit from a massive injection of credit into the most important business segment imaginable. Jobs will be created, new capital expenditure signed off, and productivity improved.

Maybe we’ll look back in 40 years and say, “Funding gap? What funding gap?”.

For more information on alternative funding and how it could benefit your business, turn to “Show me the money” overleaf.

www.workspace.co.uk

small-business focus

It all adds up: larger SMEs are more likely to obtain funding than sole traders

taking the next step Thinking of applying for funding?

It pays to get your books in order

How can small- and medium-sized businesses play their small part in this frenzied process of creative destruction? The first thing to understand is that using an alternative lender is not always about “cost of money”, that is to say, getting lower interest rates or even any loan at all.

What comes through clearly from all the survey data is that price is only one, relatively small, factor. Ease of access, speed, transparency and better services are all key considerations; many borrowers report that they’ll happily suffer a higher interest rate compared to a bank offering if they can get their money more quickly. Pam Burton at UK Funding Circle certainly echoes that view. “Businesses are looking for a seamless process and funds at a fair and transparent price,” says the platform’s chief operating officer.

“We believe businesses should be able to complete a simple, quick application online in a matter of minutes, and have funds in their account in days.”

If you’ve decided to take the plunge, how can you improve your chances of getting accepted?

There’s a terrific amount of hype out there about the range of choices, but a lack of hard data about what actually works when it comes to navigating the alternative-finance space. Luckily, research by Nesta and academics at the University of Cambridge has looked at borrower characteristics, using data such as number of employees, turnover and age of

business. According to this study, as a proportion of respondents in each category: ~ Sole traders were more likely to be unsuccessful in obtaining funding through a P2P business lending platform. However, those with six or more employees were more likely to be successful (with the likelihood increasing with the number of employees). ~ Businesses with higher turnover (above £100,000) were more likely to be successful in obtaining funding. ~ Businesses that had been trading for four years or more were more likely to be successful in obtaining funding. Those who had been trading for two years or less were more likely to be unsuccessful.

A number of other studies have pointed to the importance of financial information. A report by the accountants’ body, ACCA, suggests that most SME loan applicants (63 per cent) have no financially trained staff. It also observed that around 60 per cent intertwine the owner’s personal finances with the business’s finances, 50 per cent have no formal written business plans, and more than a third (34 per cent) do not produce regular management accounts.

The moral of the story? Be prepared, and assume you’ll have to provide a wealth of information before applying.

“Most loan applicants have no financially trained staff” the long read

59

alternative finance

the money show me

Sourcing alternative funding for your business can seem daunting, but help is out there. We spoke to Informed Funding, a free information resource empowering Workspace customers to make the right financial choices Money – sourcing it, securing it, understanding it – is probably the number one concern of anyone running a startup or SME. And yet the new financial landscape, which has been transformed by the arrival of alternative-finance providers and the opportunities they offer, is by no means easy to navigate. There may be significant amounts of capital available to businesses through diverse new sources, but laying hands on it takes research and effort. Little wonder that 36 per cent of you, according to a Workspace survey, felt that actively seeking funding was “too much of a hassle”, despite your ambitions to grow and expand.

ABOVE Speakers from Crowdcube, ECI Partners, GLE and Buzzacott at an IF seminar at Metal Box Factory

“For a lot of people, finance can be quite scary, or simply dull” 60

Riding to the rescue are various organisations and online platforms that aim to make alternativefinance options clearer and more accessible. One of these is Informed Funding, based at Workspace Chester House in Kennington, which was launched in early 2015 with the specific aim of connecting SMEs and growing companies with business finance; they currently have the UK’s largest choice of funding options online (over 600 and counting).

“The market’s a lot more fragmented now,” explains Andy Davis, programme director of Informed Funding’s Alternative Funding Network wing. “As a borrower, you have to work quite hard to identify the people you could approach. There are so many different types of finance out there – from short-term finance a bit like an overdraft facility, through to quite long-term, three-, four- or fiveyear loans that companies can use to buy assets or premises. Then there’s crowdfunding, debt finance such as invoice factoring...” Expecting businesses to research all the options – given that they’re often “insanely busy, and under pressure on all fronts” – is unrealistic. “And for a lot of people, finance can be quite scary, or simply dull,” Andy adds.

The initial idea behind Informed Funding was to organise the information that’s out there in an “interactive directory” form, making it accessible,

easy to comprehend and searchable. You can log on and follow a five-step process to find out which type of finance best suits your needs, and there are contact details for the lenders themselves if you want to take things further. “We provide information, but we are not a brokerage site,” says Andy. “There are no brokerage fees, and we don’t have a bias towards any specific type of funding.”

Knowledge provision is very much Informed Funding’s main aim. The various types of finance are explained online in accessible, easy-to-digest articles and, in addition, Informed Funding runs workshops, events and seminars – all free to Workspace customers – on a wide range of business issues, from improving working capital management to sourcing growth finance. They’re an opportunity for participants to question experts, meet fellow entrepreneurs and engage with the issues surrounding small-business finance. The case studies (right) show how two Workspace customers have benefited from the sessions they attended.

Despite the ever-shifting financial sands, one thing is certain: alternative finance isn’t going away any time soon. “It’s just going to be a fact of life,” states Andy. Changes are coming, he believes, that will increase the amount of money that’s available through alternative-finance platforms; in particular, rule changes allowing investors to hold peer-to-peer loans in new ISAs, which should make this type of investment more attractive. “Types of finance that are available online, and are fast and accessible through smartphones, are clearly going to figure large for young people,” Andy adds. “That’s not to say the banks are suddenly going to stop being important.

I don’t think one replaces the other in any way.

What happens is that the market simply gets more diverse. Banks will continue to have a huge role, but there are other choices.” www.informedfunding.com

www.workspace.co.uk

building up, selling on Debbie Leon is the owner and MD of Fashionizer uniform designers, based at Workspace’s Chiswick Studios. She attended the Informed Funding finance seminar “Funding Your Business for a Profitable Exit”.

Case study:1

Fashionizer

“I went into the seminar looking to have my eyes opened. In essence, it was about growing your business so that you’re in a position to sell.

It looked at stress-testing your business growth strategy, assessing your exit options, looking at your options for growth finance…

“What I found interesting was listening to the two case studies: one was somebody who set out in business with an idea to sell and took very high risks in order to get there, and the other was somebody who took over a company that wasn’t doing very well, and had to establish what the problems were and how to get them to where they wanted. What I really took away from it was that whether you’re a small company or a big one, the problems and issues you face are exactly the same.

KeyAGENT, based at Pill Box, is a tech company providing location-based marketing solutions for the property industry. Rolf Groenewold, the MD, attended the IF Funding Fair “What Works in New Finance for SMEs”.

KeyAGENT

www.fashionizer.com

“There are opportunities out there other than banks” crowdfunding choices

Case study:2

“The focus was on rapid growth, which is more complex for us due to our dependence on highly skilled personnel; it means as a business we’re not that easy to scale up, because we produce a bespoke product. But recently we expanded to create an export market and obtained funding from Funding Circle.

Seminars like these are so useful in letting people know that there are opportunities out there other than banks. Banks, as far as I’m concerned, in today’s business world are clumsy; they lack understanding and creativity.

They have no ability to evaluate whether your plan is viable or not.

“In order to sell you have to have a clear strategy of what you need to put in place to make the business sellable. It’s a different agenda from running a business. It’s a few-year plan. So now I’m following mine, which is very exciting. The seminar was useful in many ways. The idea is to start you thinking, and if you need follow-up, that’s what the IF website is for.”

“We specialise in professional photography, floor plans, EPCs and so on, through partnerships and software integrations. We service over 100,000 properties per year and expect 100 per cent growth in the next 18 months, so we’re not a startup, but we’re by no means a big business; we’re at a high-growth stage in the ‘roller coaster’ middle!

What IF has done is educate us in the landscape of alternative finance, and where we fit in.

“The session I found most useful featured three speakers: Darren from Crowdcube (crowdfunding), Charlie from ECI (private equity) and Keith from GLE (unsecured loans). It was interesting to hear about their different business models. It became clear that alternative finance is a ladder, with unsecured loans a potential first step, and private equity at the top. Interestingly, crowdfunding is stepping in as an early-stage seed-funding option for VC firms, who could look to acquire the crowdfunding platforms to

give them early low-risk access to startups, shifting the VC investment range upwards.

“We realised growth funding wasn’t right for the company at this stage but we’re looking at some side projects, one of which is developing tech for photographers, and it would be a great fit with crowdfunding. That was the fun part for me – learning about how crowdfunding really works.

It’s effectively a massive marketing campaign that generates a whole bunch of potential new clients. The fact that you have to generate momentum [above 50 per cent of funding takes place before a campaign goes live] means you’ve got pioneer clients lined up already. People are buying into the idea; they’re vested in your business. Six months later, you’ve got your proof of concept. So that’s when you can go to your VCs, stepping up the ladder. Crowdfunding has serious business value!

“IF has really helped educate us about the whole process, and made it all seem less daunting.

We’re hoping to get involved in crowdfunding for our side projects and we’ve got big plans to ‘Uberfy’ our business, with On Demand services and VR, so watch this space.” www.keyagent.co.uk

“Now we can see where we fit in the AltFi landscape” Offering customers free premium access to the Informed Funding platform is just one of the ways in which Workspace supports member startups and new businesses. If you are a Workspace customer and want to know more about finance options and the Informed Funding platform, call 0203 176 5243 or email info@informedfunding

the long read

61

your homework HomeWork, issue #1

Spring/Summer 2016 Editor/Writer Tessa Clayton Art etc Dom Salmon Contributing editor Fleur Macdonald Original photography Dai Williams, Dom Salmon.

Cover image by Gather for Workspace Sub-editor Vanessa Harriss Publisher/Advertising Dan Reeves, dan@true212.com HomeWork is published by TRUE 212; true212.com The magazine is printed by Alban House Print, 105 Farringdon Road, London EC1R 3BU At the time of print every effort was made to ensure the information contained in the magazine was correct.

Thanks to all the Workspace customers featured in this issue Anthony Rose at 6Tribes and Anthony Noguera at Ai, Metal Box Factory.

Ed Grattan and Stephen Rapoport at Pact Coffee, The Biscuit Factory.

Charlie Green at aden + anais, The Light Bulb.

Andrew Hunt at Aduna, Kennington Park; Brett Akker at LOVESPACE, 60 Gray’s Inn Road.

Andy Davis and Diarra Smith at Informed Funding; Debbie Leon at Fashionizer, Chiswick Studios; Rolf Groenewold at KeyAGENT, Pill Box. Oliver Deed at Snapdragon, Kennington Park; Emily Trant at Funding Options, Metal Box Factory; Minnie Harding at KatchUp, The Light Box. Iulia Calota at The Love Project, Steve Malkin at Planet First, Ryoko Mutasono at Wagumi and Ali Al-Assam at NewsSocial, all at Club Workspace Southbank. Norman Liu at Drunken Sailor Media, Club Workspace Chiswick; Satish Jayakumar at Typeless, Club Workspace London Bridge.

Home comforts We’ve got it all covered: great connectivity, breakout spaces, on-site cafés, showers and cycle storage.

why

Workspace?

We are home to 4,000 New and Growing Companies, offering a supportive and dynamic environment that fosters collaboration and creativity. With over 80 locations across the capital, we are dedicated to providing our customers with the perfect type of workspace to help them grow their business.

Enquire now: call 020 7369 2384 or visit www.workspace.co.uk

An instant network Plug straight into a wider community where you can collaborate and swap ideas with like-minded businesses.

also from Workspace…

Connected services We’ve teamed up with Excell to offer you unrivalled business grade voice and internet solutions to keep you connected to your customers and colleagues.

Flexibility With 80 locations

across London, we offer the chance to work exactly the way you want, whether you need office or co-working space, meeting rooms, light industrial or workshops.

Operational excellence Each of our properties is led by a dedicated centre manager who is on hand to support our customers with dayto-day issues and create the perfect working environment for business growth.

Customer benefits Base your business at Workspace and gain access to business insight, events, and our key partners’ services that we have handpicked to help you take your company to the next level.

Co-working

Make it happen at Club Workspace, a stimulating network of creative coworking business clubs in fantastic locations across London – ideal for mobile working, freelancers and business startups.

Meeting rooms Work smarter: hold a meeting, event, conference or training seminar in a room or event space that is right for you. Just book online at www.workspace.co.uk/meeting-rooms

Here’s an idea...

Generate Studio have provided the creative spark behind the designs of some of the most enjoyable places to work in London.

raw power So, if you want to create a great work environment for your company and staff, we¹re full of bright ideas.

Space planning - interior design - project management generate-studio.com

AFFORDABLE, TIMELESS AND LONG LASTING HOME AND OFFICE FURNITURE MADE FROM RESPONSIBLY SOURCED MATERIALS

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