Archive for October, 2007

Top tips - Integrate your Marketing function

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Business Link
on 25 October, 2007
in Top Tips
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In recent years, marketing has evolved from a discrete, isolated activity, to a key organisational imperative. This evolution - from casual task to core function - has brought about new, complex challenges for the marketer.

As well as mastering the practice of marketing, a successful marketing function must now undertake additional duties. It must justify its own existence, by demonstrating why and how it delivers results. It must interact with and integrate within the wider organisation, ensuring that marketing activity remains valued and respected as a legitimate function. And it must affect change throughout the organisation, so that effective marketing strategies can be enacted and corporate objectives can be met.

And for once, such grandiose ambitions are not exclusively reserved for bigger marketing departments. The lone marketer and large marketing function alike has an equal opportunity to affect change across an organisation that results not only in a better, more integrated marketing function, but also improved organisational performance and success.

So, how do you capitalise on these new challenges and opportunities for the good of your business and your customers? Our Top Tips offer five steps which, if enacted together, can lead to a truly integrated and customer-focussed marketing function.

Read Top Tips - Integrate Your Marketing Function

Financing growth: Debt factoring and invoice discounting

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Business Link
on 25 October, 2007
in Finance
. 1 Comment

Debt factoring

Debt factoring is a method of releasing working capital from invoices in advance of them being paid.

A third party - such as a major bank, financial institution or independent organisation - agrees to pay a business cash advances on the strength of their unpaid invoices. These invoices are subsequently paid directly to the factor, who levies the agreed fees and applicable interest charges. In short, you get cash faster than you otherwise would have, but you give away a percentage of each invoice.

Factoring can be a complex agreement to initiate, and is usually only available to businesses trading with other companies on credit terms. Factors will require access to your business plan and financial records, in order to determine your suitability for a factoring facility, and you will need to discuss several key details with the factor when ironing out the terms of the agreement.

In addition to providing a boost to working capital, factoring may represent a cost-effective way to outsource your invoicing function, protect you from bad debts, and help you streamline your cash flow and financial planning. Useful benefits when pursuing a growth strategy - but as with most borrowing - the advantages come at a cost.

For more information on Debt factoring read our guide to Debt factoring and invoice discounting

Invoice discounting

Invoice discounting is another method of drawing money against invoices, but does not require a business to hand over control of its sales ledger.

A third party invoice discounter agrees to advance a percentage of the total outstanding sales ledger. In return, an agreed monthly fee is paid to the invoice discounter, alongside any additional interest charges on the net amount advanced. Month by month - assuming the total of outstanding invoices changes - so will the total amounts paid to and from invoice discounter.

Invoice discounting is similar to factoring in respect that it is often a long-term agreement, offered to businesses that deal on credit terms. It offers similar benefits too, such as the release of working capital quickly into the business, and a more robust cash flow system which may help manage financial investments or facilitate rapid growth. Unlike factoring, you retain control of your sales ledger, avoiding the need make your clients pay invoiced amounts to third parties.

For more information on Invoice discounting read our guide to Debt factoring and invoice discounting

Important note: It is advisable to seek professional guidance on the legal and financial implications of any type of financial arrangement.

Email tension

Published
by
Business Link
on 25 October, 2007
in HR & People Development
. 1 Comment

According to a 2005 article in the Journal of Personality and Social Psychology, email users ‘hear’ emotional overtones when writing emails, which seem obvious to the sender, but become difficult to sense by the recipient.

When we talk, the brain picks up hints and emotional cues that help us manage interactions, by adapting our tone or approach to the conversation. As a result, the risk of unintended conflict or misunderstanding can be minimised. This strength is diluted when using email because our brain is limited to interpreting only what is presented on the screen.

Kirstin Byron, an assistant professor of management at Syracuse University in New York, goes even further by commenting that email users have a tendency to misinterpret positive messages as more neutral, and neutral emails as more negative than the sender actually intended.

Familiarity between sender and receiver helps, according to Joseph Walther, a professor of communication at Michigan State University. Interactions with friends and family are often much easier to manage, online or off, because we are more aware of differences or peculiarities in those familiar to us. For example, if you know a friend is ‘short’ with his words, you are less likely to take offence to an abruptly constructed email.

Interestingly, the act of picking up the phone or talking face to face provides a two-fold benefit. First, in difficult or challenging circumstances - where there is increased potential for conflict - a more personal interaction could help manage the conversation and minimise misunderstanding. Second, following on from the first, focussing more time on personal interactions can help forge better relationships between you and your recipients. Which, as illustrated, helps improve your ability to identify and interpret the subtle tones and emotions lost in email communications.

A snapshot of environmental consciousness

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Business Link
on 25 October, 2007
in Environment
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The NetRegs SME-nvironment survey - undertook in 2005 and more recently in June 2007 - offers insight into the level of awareness among UK businesses on environmental issues, examines what is being done to increase environmentally friendly activity, and questions general attitudes toward the environment.

With over 4,000 respondents from SMEs in 15 distinct market sectors, the 2007 survey was far reaching, offering a dependable snapshot of current environmental consciousness. Comparing the two surveys also provides a useful measure of what has changed in the past two years.

Upon initial questioning, 15 per cent of businesses stated that they undertook activities that may cause harm to the environment. But when prompted with a list of potentially harmful activities, 49 per cent agreed that they undertook at least one of them - indicating a lack of understanding among businesses about what activities may actually be harmful to the environment. Although this lack of understanding remains significant, overall awareness has increased since 2005.

48 per cent of businesses indicated that they had introduced measures to reduce environmental harm, representing a 17 per cent increase since 2005. Recycling came out on top as the most popular environmentally friendly activity. Again, this pattern shows that a still significant proportion of businesses are failing to implement environmentally friendly practices, but the overall picture is slowly improving.

When questioned about the motivations behind addressing environmental issues, approximately two-thirds said that they were influenced by a general concern for the environment, 30 per cent by the need to comply with legislation, and 13 per cent by a desire to reduce costs. This indicates that while businesses are on the whole conscious of their role in protecting the environment, they are largely unaware of the efficiencies and cost saving benefits this activity could bring.

Read guide - Importance of environmental issues to your business

Read guide  - Save money by reducing waste and use of raw materials

Read guide - Save money by using energy more efficiently

Read guide - How to prevent your business causing pollution

Interactive tool - Identify where you can save money by going green

Scams - The grey area

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Business Link
on 25 October, 2007
in Legislation & Regulations
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The most unscrupulous scams offer nothing in return for your money. Cleverly designed, tightly organised and often impervious to the law, they add up to a billion pound global industry.

Beyond (or beneath) the scam is another, similar type of practice. One that does offer something in return for your money, but misleads you in the process. Crafty, if only because it is difficult to even define the process as a scam.

For almost ten years, the European City Guide (ECG) - a directory of companies, activities and services - has offered businesses the chance to be listed in their guide. Thousands of companies took this opportunity - which appeared largely above board - only to find that as a result they had unwittingly entered into a legally binding contract. One which lasted several years and demanded further, unexpected payments.

In 1999 the Advertising Standards Authority upheld complaints that the ECG mailing was misleading, because it implied that directory entries were free and did not make clear that signing and returning the mailing would commit to subsequent payments. And according to the ‘Stop the ECG’ website, over 1,300 business would agree - all stating in a poll that when returning the ECG mailing, they did not believe they were entering into a binding contract.

So the issue here is not that the ECG takes money for nothing - there is a guide, and registered businesses are (usually) listed in it. The issue is that the ECG uses misleading tactics to trap people into making unexpected payments and entering into unintended agreements.

Sounds like a scam, surely? Well, probably. But the rub here is the grey area between a scam, and a legitimate, legally binding contract. So much so that in this case, it was ECG that were shouting loudest for their money, not the victims themselves. According to reports online, hundreds of businesses were hounded by bailiffs and court orders for money owed to ECG. In many cases, firms simply gave up fighting and paid out their contracts, for fear of being taken to court or damaging their credit status.

It may seem pedantic to make the narrow distinction between a scam and misleading marketing. Both exist to con you in some way or another. The difference is, misleading tactics may be employed not just by hardened scammers, but by otherwise legitimate companies delivering seemingly ‘real’ products and services. As a result, their tactics may be harder to spot than a traditional scam. And if you fall into the trap, it may be much trickier to escape.

More info on Avoiding Scams

Find out more about Misleading Advertising at the ASA website
http://www.asa.org.uk/asa/about/short_guide/

HR focus - migrant workers, managing National Insurance, and Data Protection regulations

Published
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Business Link
on 25 October, 2007
in HR & People Development
. 0 Comments

Migrant workers bring new benefits and new responsibilities

A recent report by Ernst & Young, which uses the Treasury’s own data for its calculations, suggests that immigration has resulted in a younger, more flexible and economical workforce, and has helped keep UK interest rates half a percent lower than they would have otherwise been.

According to the report, immigrant workers have served to ‘plug the gaps in a variety of industries’, and contrary to previous waves of immigration into Britain, the current wave has been more widely geographically spread into rural areas.

Such findings offer compelling reasons to embrace the introduction of immigrant workers into the UK, but these new opportunities bring with them additional responsibilities for UK firms.

Andy Reeve, a Business Link adviser, said: “There is a greater onus on managers to check an applicant’s right to work, with penalties of up to £5,000 per illegal employee.”

A range of issues may need to be addressed in order to comply with the regulations. Restrictions on employment may exist for nationals of the EU and commonwealth countries, and nationals of EU countries must be registered with the Border and Immigration Agency within one month of starting work. For workers coming from outside of the European Economic Area, a permit must be issued before employment starts. Employers also need to make sure they follow the code of practice on racial equality in employment, and it is essential that all employees of UK based businesses are paid at least the National Minimum Wage.

If you employ migrant workers - or plan to do so - you should check the Business Link Migrant Workers guide for an in-depth overview of your requirements as an employer.

How to manage National Insurance

National Insurance must be managed correctly for two good reasons. First, an individual’s right to claim benefits can be affected by non-payment or late payment of National Insurance contributions (NICs). Second, as an employer, you are legally required to account for your employees’ NICs.  There are also two good ways to calculate NICs. The HM National Insurance tables, contained in the employer’s pack available at the HM Revenue and Customs website, offers an easy to use method for calculating NICs for employees in a variety of situations. The ‘exact percentage method’ is a second option for calculating NICs which can be used voluntarily, or in circumstances where the National Insurance tables do not apply.

Problems calculating, paying, and accounting for NICs can be costly to your business, and may adversely affect your employees if not dealt with promptly. So it’s important to understand the common mistakes made by businesses, which range from errors such as using the National Insurance tables incorrectly, to failing to keep proper National Insurance records.

Read the Business Link Guide How to Manage National Insurance for further insight into these issues, and more information on National Insurance.

Data Protection Act 1998 - End of Transitional Arrangements, October 2007

A number of transitional relief arrangements were included in the 1998 regulations, the last of which will expire during October. This means that from 24 October 2007, the Data Protection Act will be fully enacted.

This comes alongside new research from the Information Commissioner’s Office that small businesses have a much lower awareness of the principles of the Data Protection Act than larger organisations. According to the research, just over half of small businesses understand the importance of keeping personal data secure, but only 22% were aware that they were required to keep customer information accurate and up to date.

Any business that is not completely confident that they comply with the law must act now, by reviewing the eight core data protection principles, making changes to their data handling processes where necessary.

Find out more about the eight data protection principles in the Business Link Guide to Data Protection