businessi.info provides a complementary platform to businesslink.gov.uk/southwest to comment and exchange business advice and tips for businesses in the South West of England. Subscribe to Business Link ealerts and newsletters to receive the latest update and post your comments on this space.

Archive for the 'Starting Up' Category

Page 2 of 3

Running a new business during tough times

Published by Business Link on 12 June, 2009 in Starting Up • 0 Comments

Tough times can make your business more agile and resilient, and inspire you to do more with less. We explain how learning these lessons early on can help your business develop, grow and succeed.

Running a new business during tough times might seem daunting, but doing so can force you to learn valuable lessons which will stand you in good stead far beyond the recession. So, how can today’s experiences be turned into tomorrow’s wisdom?

Becoming more agile and resilient

Firstly, running a business during adverse times helps your business to become more agile and resilient. The ability to identify change and react decisively to it is a fundamental part of business leadership. Warren Bennis, an influential leadership expert, points out that outright success can be detrimental to business leadership because “there’s no opportunity to learn from adversity and problems”. In this sense, learning to spot negative change and react to it are valuable lessons that business leaders can take value from.

The most practical tip for managing change is to see it coming. Awareness is crucial. Ensure you conduct regular monitoring and analysis of what is happening both inside and outside of your business. Regular business reviews and business and financial planning can help to identify where your business is in relation to your long-term plans. Good communication between management is important, as is gathering knowledge from employees, suppliers, and even customers. Ensure your marketing activity identifies changing customer needs and that your product or service offerings are adapting accordingly. Importantly, look for opportunities as well as threats; changing times may present significant competitive opportunities. Through stellar awareness, businesses are given more time to adapt to change, so be sure to keep your finger firmly on the pulse.

Doing business by the bootstraps

Another lesson learnt from doing business during a recession is the art of bootstrapping. Bootstrapping is an informal term reflecting the development of new initiatives with little or no access to external resources, such as bank finance or investment. In a recession, we are often forced to survive on less. This can slow growth, but it can also help businesses to squeeze more value from the resources they have by avoiding frivolity and over-zealous spending. Limitation is also known to spur creativity and innovation; for example, Google Mail was created by just one employee working on it in his free time of just one day a week.

One practical tip when bootstrapping is to appreciate the relationship between spending and value. Look at individual costs and ask: What value does this spending provide? To illustrate, a costly marketing budget might seem prohibitive during a recession, but then again, more must be done to attract and engage with customers, and thus such activity might be invaluable. In contrast, consider costs which offer no value – or in other words contribute nothing but waste. It is these wasteful areas that go unnoticed when money is plentiful. Rigourously questioning your spending is a strong discipline which maximises value, minimises waste, and improves profitability. Importantly, banks and investors like such discipline; if you can clearly demonstrate the value your spending provides, financiers might be more inclined to provide resource to support your aims.

Pushing things forward

These two subjects are often forgotten during boom times, when markets are stable and finance is easier to access. This is why running a business during a recession can offer invaluable experience. Both businesses and their leaders can take strength and wisdom from adversity and become more agile and resilient to change. And start up businesses that learn to ‘make do’ can take forward valuable experience in how to progress on limited resource, be more creative and innovative, and obtain more value from their spending. Such qualities are beneficial from start up right through to maturity. One day, such disciplines may help to deal with future challenges, launch new initiatives, or at the very least, maximise the value and profitability of your business.

More info – Cash flow management - the basics

More info – Know your customers needs

 

How I started my maths business

Published by zoe on 3 April, 2009 in Starting Up • 0 Comments

Maths business adds up for teachers

Most parents of primary school-age children know the uneasy feeling of trying – but failing – to help them with their homework.

Maths is a particular problem as the way the subject is taught now is very different to when most parents were at school.

Wiltshire teachers Jan Heppenstall and Rosie Mayes realised there was a viable business in producing a novel, easy-to-use method of allowing embarrassed parents to brush up on their adding, subtracting, multiplying and division in a way that would also help their children.

Jan, a former primary school teacher, said: “We were always getting parents asking us questions about how we were teaching maths. They were struggling at home because it is now taught very differently to the way they remember when they were at school.”

They came up with 24 colour-coded cards aimed at parents of children aged between 7 and 11 year olds working on maths at Key Stage 2 level.

After nearly two years of working on the design they took the plunge last October and launched Hycah – which stands for Help Your Child At Home – with the help of Business Link.

Like many teachers, Jan and Rosie loved their jobs but were tiring of the endless paperwork and other admin tasks.  “We had started thinking about a way out – something that would draw on our teaching experience,” said Jan, who has been teaching for around 20 years.

“I think it was Rosie who came up with the idea of cards. We worked at it for quite a while, looking at various options and got a designer involved. That was in January last year and we spent quite a bit of time looking at various designs and also getting a simple website up and running.”

Jan and Rosie, both of whom live near Marlborough, expected to pick up sales over the internet but almost all have come from local schools.

“We’ve contacted a lot of schools directly,” said Jan, who is now a part-time swimming teacher.
“We’ve both been teaching long enough to know the schools around here. Most have been really supportive and can see the benefits of offering parents the cards.”

The lack of online sales surprised Jan and Rosie, a former headteacher who has 30 year’s classroom experience, and they are now hoping to update their website to increase its showing on search engines.

The cards have been sold to a school in London where Rosie had a contact and they are now targeting schools in nearby Berkshire and contacting parent-teacher associations. They are also working with a designer on a new flyer.

The cards, which sell for £14.99 a pack, are also being used by adults with learning difficulties and some teachers are using them as classroom aides.

“It’s still early days and we both have other jobs but we’re pleased it’s going well,” said Jan.
“We’ve been asked whether we can produce cards for Key Stage One maths and for reading, so there are other things we can look at.”

Jan is delighted with the help they received from Business Link before they even started up Hycah. She attended a three-day course ahead of launching the business.  “Our adviser Christopher Pearson has been a real boost,” she said. “We’re teachers, not business people so we’ve really appreciated the help he’s given us.  “It’s good to talk to someone on the same wavelength to us. It’s been a real boost.”

Christopher Pearson said: “Jan and Rosie have been really focused on getting this interesting business off the ground and I’m sure they’ll be successful.”

How I started my website design business

Published by zoe on 3 April, 2009 in Starting Up • 0 Comments

Thinking big from small beginnings

Anyone launching their first business during a recession would be excused if they wanted to make a low-key start.

But Christopher Frost and Simon Bell decided to think big from day one. They registered DesignBuds, their website design business, as a limited company and moved into a smart office.

As Christopher says: “We went straight into the deep end – but it’s paying off.”

Chris and Simon, who have been friends since being small boys at school, spent two months planning the business – with a major emphasis on marketing. When they went live last November, the economic conditions were not very welcoming, but they refused to be deterred.

“We wanted to be taken seriously from the start so the first thing we did was set up as a company rather than just be self-employed,” explained Christopher. “That was also the reason behind our decision to get an office, not work from home. In fact, that has turned out to be the best decision we’ve made.

“Having our own office presents the right image and shows that we’re a serious business. Many of our competitors won’t give out their address because they’re working from home and don’t want clients to know.

“We’re also finding it easier to convert inquiries into business because, if prospective clients know you are a professional organisation, they are going to be comfortable giving you their business. We can invite them here and talk over a coffee.”

DesignBuds offers clients a range of services from custom website design to researching suitable domain names, web hosting and search engine optimisation. It also gets work from other web developers who outsource their higher technical requirements to it.

Its marketing emphasises the firm’s quality service – both in terms of design and back-up – which Christopher says is giving them an edge over their rivals.

“It’s a competitive industry and it’s still early days for us,” said Simon. “But we are learning all the time. Our market is basically SMEs, but we’re not the cheapest and we are trying not to compete on cost.

“If a potential client thinks we are too expensive we point out the benefits of what we bring to the project. It’s all about quality.

 “We take a lot of care over what we do. We work closely with the client’s requirements. Their website has to work – not just look good. If it doesn’t work for them, they aren’t going to refer us on to other businesses.”

Another benefit of their location, the Arena Business Centre in Poole, is that it is also home to Business Link.  As a result the pair have struck up a good relationship with Business Link Adviser, Nick Hollingworth.

“He’s helped us a lot,” said Christopher. “We ring him up when we need some advice and he says ‘Pop in and see me for a chat’.  “He’s given us loads of really good advice, particularly on marketing our business.”

Nick Hollingworth said: “It would have been very easy for Chris and Simon to concentrate on their business activities within the confines of their pleasant office surroundings. The key marketing message they have learned is to get out and talk to potential customers to discover what it is they actually want.”

Don’t sell yourself short

Published by zoe on 3 April, 2009 in Starting Up • 0 Comments

Hone your sales technique with a few simple steps.

To secure sales, you must find businesses that will benefit from your products or services and target key decision-makers who have the power to buy.  Sales leads can be sourced through the Internet, trade publications, newspapers, attending network and conference events or referrals from an existing client.

When you spot a potential lead, log where the company is based and the name of a key contact, e.g. the owner or purchasing manager. Visit the company website to find out who their customers are and how your product or service could help with their particular business needs.

Pick up the phone
Cold calling brings many out in a cold sweat, but a phone call is a personal way to make that first contact. Being prepared will boost your confidence. Consider your company’s unique selling point and prepare a crib sheet so you can quickly communicate benefits relevant to a potential client’s business. Try to establish a date and time for a meeting so you can further discuss what you can do for their business.

Put it in writing
If you have a name and contact address for a key decision-maker, you may prefer to send a letter or email. Keep written communications short and include a client testimonial to show your credentials. Follow-up your letter or email with a phone call to establish a time to meet.  Always check whether companies have registered with the telephone or mail preference services as they may prefer not to receive marketing communications.

Successful sales appointments
Set out your objectives prior to a meeting and thoroughly research the client’s business and customers. Your research is likely to raise some questions, so prepare a ‘need to find’ list to expose gaps or issues your business could solve. Focus your presentation on:
• Introducing your business and its products and services
• Outlining key benefits relevant to the client
• Addressing any potential objectives you think the client might have.

Close the deal
Be enthusiastic about forming a relationship with the client, but not so excited as to appear desperate. Testimonials will help convince a client they are in safe hands as well as the way you handle objections in an informed and professional manner. A client may want to negotiate on price, but don’t be tempted to undersell your products or services as this could result in unacceptable profit margins and an expectancy you will lower the price further.

Further information:

Read our guide planning to sell

Use our interactive tool identify potential sales channels

Take the stress out of tax

Published by Business Link on 3 April, 2009 in Starting Up • 0 Comments

Tax year-end is fast approaching and understanding capital allowances will make a difference to your profits. Read our quick overview to see what your business can claim.

It’s the time of year when most small business owners are totting up their tax bill.  Being clued-up about capital allowances pays off.  Capital allowances could entitle your business to cash-back credits on certain purchases and investments, reducing the need to approach lenders and shareholders for funds. There are three areas covered by capital allowances:

Plant and machinery
This includes:

  • The cost of vans and cars, machines, scaffolding, ladders, tools, equipment, furniture, computers and similar items you use in your business.
  • Expenditure on plant and machinery.

Look back on this year’s purchases and ensure you’ve claimed the capital allowances you are entitled to.  Sometimes you can claim for items used privately before they became part of your business such as a home computer or car.  For cars costing over £12,000, you can claim a maximum of £3,000 a year per car but, if you use vehicles with low CO2 emissions, there are no restrictions on allowances.  Remember, you can only claim a proportion of the allowance if a car, or any other piece of equipment or machinery is used for purposes other than business.

Buildings
You can claim for the cost of:

  • Renovating or converting space above shops and other commercial premises to provide flats for rent.
  • Converting or renovating unused business premises in a disadvantaged area.
  • Allowances do not cover the cost of houses, showrooms, offices, shops, land, furnishing or extensions (unless providing access to a qualifying flat).

Research and development
An activity counts as research and development if:

  • It involves innovation and creativity in science and technology.
  • The research is relevant to your business.
  • You are classed as a trader and not working in a profession or vocation.
  • You can claim up to 175% tax relief on costs incurred by research and development, including the salaries and
  • National Insurance payments for members of staff involved purely in research activity.

Even if your business is posting a loss this year you can surrender an Energy Saving technology allowance for a tax credit at 19%.

If you need any help making a claim, contact your tax adviser or call the HM Revenue and Customs self assessment helpline on 0845 9000 444.

Business Link’s start-up manager Roger Wilkins says; ‘Don’t lose your allowances for this year. Make sure you take advantage of the opportunity to reduce your tax liability and boost your cashflow at the same time.’

Further information:

Read our guide on capital allowance

Use our interactive tool on how you can help reduce your tax bill

Read about capital investment schemes at HM Revenue and Customs (HMRC) website