Category Archives: Running a business

Enterprise Zones – what are they and will they help?

Enterprise Zones are the latest government incentive to get businesses growing. Within the Enterprise Zone you can get superfast broadband, lower rates & taxes, and low levels of regulation & planning controls.

That can only be a good thing – right? A great encouragement for younger companies who may otherwise struggle to reach critical mass.

Maybe, however there is considerable criticism of this approach also. Firstly it’s not new. Maggie Thatcher tried exactly this in the 1980’s. They provided a boost at the time that wasn’t able to be sustained.

Critics argue that all the Enterprise Zones do is to displace jobs from one area to another, with up to 80% of the jobs they create taken from other places.

Also that they are expensive, with estimates ranging from £23,000 to £50,000 per job created.

Having said that, if you are looking to expand your business (the zones will be most useful for businesses that have been going for two or three years, and are looking to expand and inhabit their first business premises), is there a benefit to doing so in a Enterprise Zone rather than elsewhere?

Probably yes. One of the main benefits that the zones will offer is a business rate discount worth up to £275,000, or enhanced capital allowances for plant and machinery where there is a strong focus on manufacturing, over a five year period. That coupled with the other advantages of infrastructure and support can make it attractive.

So where are these Zones? They are not all in areas needing regeneration, another criticism, but are areas with the most potential for growth and those which could attract inward investment from abroad. The government has announced the following areas will get an Enterprise Zone:

Bristol;
Liverpool;
Birmingham;
the Black Country;
the Tees Valley;
the West of England;
the North East;
London;
Manchester;
Derby;
Nottingham;
Humber Estuary Renewable Energy Super Cluster;
Daresbury Science Campus in Warrington;
Newquay AeroHub in Cornwall;
The Solent Enterprise Zone at Daedalus Airfield in Gosport;
MIRA Technology Park in Hinckley, Leicestershire;
Rotherwas Enterprise Zone in Hereford;
Discovery Park in Sandwich, Kent, and Enterprise West Essex in Harlow;
Science Vale UK in Oxfordshire;
Northampton Waterside;
Alconbury Airfield, near Huntingdon in Cambridgeshire;
Great Yarmouth in Norfolk, and Lowestoft in Suffolk.

Interestingly, it is difficult to then get further detail on each and how to apply to be in one. These are being managed by each Local Enterprise Partnership (LEP), so the first step is to contact one of these. You don’t have to already be working or living in the area, if you are prepared to move your business there.

Resources that may help:

Map of the Local Enterprise Partnerships (LEP).

Contact details for the Local Enterprise Partnerships (LEP).

Why SEO means sales for your business website

Almost all businesses now days have to have a web site. Even if you don’t sell over the web, your customers will expect to be able to find you on it.

If they know your name and it’s fairly unique then you are likely to be found. That’s good, you can give your customers contact details, support information and reassure them that you have a web presence.

But what if you not only want to be found by people that know you, but also by new customers? Then you have to be found by the type of product or service that you sell. These in web terms are keywords.

Given that all of your competitors also want to be found for those terms, it’s not easy to get to the first page of Google (hardly anyone looks beyond the first page).

If, like me, you get continued spam from people claiming that they can get you on that first page, you’ll be pretty jaded by now. There are some good SEO (search engine optimisation) companies out there but they are difficult to identify from the poor ones and do tend to charge quite a bit.

Also, the good companies do not send out spam, I’d never respond to unsolicited SEO mails, but actually SEO is something that you can take control of yourself.

We used a tool that we down-loaded, it looked at the top ten websites for our keywords and worked out what it was that made those particular sites rank higher than others. We then altered our site to match the recommendations.

All the recent spam I’ve had on SEO reminded me that we’ve had questions on this before and have written a resource on the subject (along with a plug for the tool we used – well worth getting !). Have a look at How to get people to your business web site

To grow a business employ a “great one”.

Whenever I hear advice from successful entrepreneurs the most consistent mantra is “always hire the best people you can afford”.

But how good is “the best”, how do you measure that? Also, if you are in a young company, with very limited resources, how much can you really afford?

Let’s step back for a moment though and examine that advice. Is it really the most important thing that a growing business should do? What about offices, buying equipment and developing the product or service, then there’s marketing, the best product is going nowhere unless people know that it exists.

The answer may be that if you have good people aboard, they will help you get the operating essentials cheaper, faster, and of better quality. When you look at product design the difference between good and average has even more staggering claims.

Mark Zuckerberg, of Facebook, suggests that some programmers and programming teams are 100 times more productive than their more typically talented peers.

This isn’t because they can programme 100 times the number of lines of code, but because they write smarter code. These truly great programmers grasp what is needed quickly and transform that into efficient, supportable, clever instructions that enhance the original concept.

What does this mean for the non IT side of businesses? Well the theory is still valid, if the multiplication factor may be less. Consider the likely results of an inspirational, highly respected and well networked senior figure in any sector of business, such as marketing, PR, raising finance, compared to an industrious but junior practitioner.

Can you measure the impact of the great person against the average worker? The difference may be that you get funding, or not. That you become well known, or not. What is the measure and worth of these?

I think we can all accept that the great person is going to do more for your company than an average worker, the question is what do you give up to be able to afford them?

Do you take out loans, sell your house or divert funds from infrastructure to hire a great employee?

It’s a balancing act, between all the calls upon your limited cash. The advice that successful entrepreneurs have given implies that you do all you can to get these few great people.

If the immensely talented ones can ramp up your business fast, then you can start to readjust the balance so that other areas have cash made available.

It is natural though to hope that even by using a less expensive resource you will still manage to make the break through. The lessons from very successful businesses however seem to speak against that.

How to market smarter.

Market segmentation I spent an enjoyable couple of days doing one-to-ones on business planning at a conference last week and the area that was most misunderstood was the need to define and understand your market.

It sounds simple, everyone of course understands their market don’t they, it’s obvious. The market is whoever will buy from us. We don’t want to restrict ourselves, so we will market to everyone.

There are actually a couple of problems with that; firstly to market to everyone you have to spend a lot of money. Then think about the messages that your marketing is going to give, to be applicable to everyone they have to be fairly general and bland.

This is where a well known but often ignored marketing technique comes in – market segmentation.

You may well have a product or service that could be bought by a great many people, but they will not all be alike. They may live in different geographies, be of different ages or gender, or have different expectations of the product.

The more you can focus your marketing effort the more cost effective your advertising is, instead of expensive adverts in large magazines to try and reach everyone, or GoogleAds covering lots of keywords, you can just pay for advertising in the specific media that your focused market reads.

Importantly also, the messages and benefits that you give will be targeted exactly to that group of people. It may be that your company, works both for corporate clients and private individuals, each will value different aspects of your offering.

A middle aged man will identify and be swayed by different messages about your product than a teenager. The more you can segment your market into different chunks, the more effective your advertising and marketing will be.

Finally it may lead you to changing how your product or service is packaged to be more attractive to each specific group, rather than a one-size fits all, that no one sees as relevant to them.

Division to provide business help is launched

Management Consultancy

Company Partners has been a blessing for those businesses who are looking for business partners, mentors and investors, but what if you need to reorganise your business to make it more profitable, or to grow?

I’ve been helping companies that have approached us for a while now, but eventually there is only so much of my time available. Rather than continue to turn down requests, we’ve started a new division dedicated just to helping companies with their consulting needs.

Called, “Company Partners Consulting” – yes maybe a bit of an obvious name – I’ve gathered together the consultants that I most respected and that follow my own ethos of practical advice geared to getting results.

Since it is aimed at this stage at the UK, I’m using our www.companypartners.co.uk address – have a look, I’d be interested in your feedback.

Spot checks by tax inspectors

HMRC inspection I wonder if anyone you know has been the victim of these? Various business journals have been mentioning for some time that the Inland Revenue has decided to target small companies. On the belief that such businesses would have poor record keeping and so would be able to have more tax squeezed out of them.

It flies in the face of the government’s pledge to reduce the burden of red-tape and to encourage entrepreneurship, but the HMRC is a law onto itself. Literally. As long as they are effective in raising money, they seem to be able to make their own rules.

But is targeting 1000′s of small companies a cost effective exercise given the small payback for the amount of time needed to do such investigations? Probably not, so the major benefit must be thought to discourage abuse of the system and encourage SMEs to pay fully all tax.

Most small businesses I know though are not run by greedy Arthur Daleys, but by hard working owner managers, who try their best in filling out the endless Companies House, VAT, PAYE, National Insurance and annual returns forms, but inevitably may not tick all the boxes in the right place or have kept 6 years records.

If these entrepreneurs make a error they don’t realise it at the time, so the punitive measures mentioned above are not likely to cause a change of behaviour. It all seems a waste.

But today I received a letter from my accountants suggesting I take out insurance that would cover their costs in the event of a investigation by HMRC. I’m not sure if it is just a scare tactic in order to drum up commission from the insurance providers, or if it is another sign that these investigations are generally increasing. Certainly the cost of dealing with a tax inspection worries me more than the likely outcome.

Hmm, should I take the insurance or live to regret not doing so – a dilemma.

Will small businesses ever get a slice of government spending?

Government helping small business A few days ago the office of the Prime Minister sent a letter to many small businesses and SME organisations explaining that a new online tool called Contracts Finder has been launched that will show all government tender opportunities.

At the same time he said they would eliminate the prequalification questionnaire (PQQ) for low value orders and standardise it so it was filled in just once for all other procurements.

Additionally there would be “Dragons Den” type surgeries where people with innovative products and services will be able to come and pitch to government – rather than waiting for the right tender to be issued.

All good news generally. For years the conditions set by procurements have excluded, or been unfairly weighed against smaller businesses applying for tenders. The cost of doing so is also proportionally higher for a small company than a large one.

Some people have commented that they are worried that eliminating the PQQ will create a “free for all” and that companies that stood no chance would waste their time bidding.

Well in an open market that can happen, but if in fact getting rid of the PQQ doesn’t change at all the size of company winning a tender, what was the point? There probably is still a culture in government procurement that only larger companies should win and just getting rid of prequalifying is not enough, attitudes must also change. I’ll wait and see on this one.

However, the Contracts Finder could be very good news indeed. There are some government tender sites out there (a couple charge for their use), but having one simple and easy to use central site for all tenders is a godsend. Much saving of time and hopefully it will make sure we don’t miss any relevant opportunities ever again.

Now on to the “Dragons Den” surgeries. They are not quite as the description implies, because you are not pitching for investment or funds, but for the chance to sell your innovative product or service.

The surgeries are going to be managed by Stephen Allott as a new Crown Commercial Representative (CCR) for SMEs. You will pitch to “a panel of senior procurement and operational professionals from central government and the wider public sector”.

I like this idea a lot, but the proof will be how many get taken up and what hoops they will have to jump through.

In the early days of Company Partners I approached a government figure to offer our business partner matching service to assist people who wanted to start a business. You would think that encouraging new start-ups by finding them a like minded partner to start up with was an obvious benefit to the economy.

The feedback was positive, but I would have to talk to the regional development agency, they in turn insisted I talk to a local Business Link and so it died. They also wanted me to trial it locally for 2 years and if it was successful they would put it out to tender.

Herein lays a problem. If at one of these surgeries, a young company puts forward an innovative idea for a service, will the government support them and place an order, or will there be endless jumping through hoops, or worse (in order of course to be fair and impartial) they put the service suggested up to open tender, effectively stealing the small company’s idea and giving it to someone else?

There is optimism for the general direction that the government is going on this, but let’s see if it actually produces a change.

Who needs a business partner?

Spot Bill Gates There’s a common misconception of the typical entrepreneur being a charismatic individual business person, not needing or wanting a partner’s help in driving forward his all conquering venture.

Think Richard Branson, Bill Gates, or the latest film idol, Mark Zuckerberg of Facebook fame.

Yes they were the front men and there’s no doubt that they steered the ship, but each started their businesses with partners that had complimentary skills.

Branson always had a partner for each business he began. In the earliest years it was Jonny Gems (Student magazine), then Nik Powell (Student magazine and Virgin) adding Simon Draper (Virgin) for his music knowledge. These were share holding partners, not employees, although Branson certainly surrounded himself with a very capable workforce.

Bill Gates and Paul Allen started Microsoft together, while Zuckerberg’s Facebook was founded with his original partner Eduardo Saverin (now the subject of a film – The Social Network).

There must be exceptions, anyone aware of one; I’d be interested to know? As far as I can find out, almost every successful company had a partner helping it to grow.

Why? Well, it is almost impossible for one person to have all the capabilities and characteristics needed to develop a business. One may have the technical skills, the other the sales or business knowledge.

Between them they start to handle the PR and soon it’s clear that one is more comfortable in that environment and they agree that he will act as the front man.

Taking on the world yourself, with no one to bounce ideas off and to give mutual motivation is quite daunting. A strong team of employees will help fill out any skills or experience that the business needs and a mentor can be very helpful in acting as a sounding board, but there’s nothing as good as having a partner with the same skin and commitment in the game as you.

Of course choosing a partner must be done with open eyes and it is absolutely important to get the right legal and partnership agreements in place. See my guide to healthy partnerships: Business Partnerships .

It was to provide a “dating site” for people to find business partners that we started Company Partners, so I guess I am a bit prejudiced in favour of not going it alone. But it’s a hard old world by yourself.

Entrepreneur Quotes – Just do it!

Entrepreneur - Just do it! I was putting together a business plan workshop for some MBA students the other day and looked for a couple of quotes to illustrate points. There are, as you can imagine, quotes for everything, sometimes contradictory.

There is one area though that no one disagrees with and it happens to be a pet issue with me. That of “just do it”. When I talk to potential entrepreneurs, far too many are waiting for “the right time” or someone to do it for them. Honestly, you just need to take a deep breath and then get on with it.

Anyway here are some thoughts from quite successful people – but less thinking, more doing…

“Talk to your customers – provide what they want, not what you want”
Jacqueline Gold – Anne Summers

“Make sure your business goals are measurable – if it’s measurable it’s manageable”
Steve Mills – MRI Network

“Be detailed, be persistent”
Sahar Hashemi – Coffee Republic

“Don’t be afraid of failure, we worry about that too much”
Tim Smit – Eden Project

“The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try” Debbie Fields – Mrs. Fields Cookies

“If you think about things too long and too hard you won’t do them”
Simon Woodruffe – Yo! Sushi

“Never leave that to tomorrow that you can do today”
Benjamin Franklin

“The critical ingredient is getting off your butt and doing something”
Nolan Bushnell – Atari

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do”
Mark Twain

“Your time is limited, so don’t waste it living someone else’s life”
Steve Jobs – Apple

“Whatever you are going to do, if you don’t enjoy it, don’t do it”
Philip Green – Arcadia

“Choose a job that you like and you’ll never have to work a day in your life”
Confucius

Learning from great Entrepreneurs

Questions for Business Angels

Last night I attended the keynote event of Global Entrepreneurship Week (GEW), yes it’s this week, how could you miss it? Sitting in a packed conference centre of the British Library, I looked around at the alert eager faces of budding Entrepreneurs and thought this has to be the future for Britain.

Tom Bewick, the CEO of Enterprise UK, who have organised GEW put the feeling into words “Make a job, don’t take a job”. This also fits nicely with the Government’s need to increase private sector employment to compensate for the coming job losses in the public sector.

Called “Question time for Entrepreneurs”, it followed the traditional format of a panel of eminent and famous figures asked questions by an audience hanging on their words of wisdom.

On the panel was Deborah Meaden, (Dragon’s Den), Cath Kidston (Cath Kidston Ltd), Brent Hoberman (Last Minute.com & Mydeco), Tom Bewick (Enterprise UK) and chaired by Adam Shaw (BBC’s Working Lunch).

As always, well organised by the British Library’s Business & IP Centre. However I left feeling a bit frustrated that the questions and responses were really just skipping round the edge of what most entrepreneurs wanted to hear about.

Most questions seemed to centre on the way that entrepreneurship could be fostered and at times the answers became a fraction obvious. “Should we encourage youngsters into being entrepreneurs?” Yes was the reply. “Are entrepreneurs born or can they be made?” Deborah Meaden thought they had to be born with the right characteristics. But Cath Kidston believed they could develop the skills.

Interesting intellectual issues, but I felt an opportunity was missed to have the practical questions answered by this famous group that would be on most entrepreneurs minds.

“How can I find funding?” “How do I get visibility for my fledgling company with little money for marketing or PR?” “What should I do to find customers?” These were barely covered.

So what nuggets did I pick out of the event?

Everyone agreed that government should assist companies to provide apprenticeships, or internships, which would give youngsters a kick-start in business life. At the moment it is left to individual companies and the quality and even whether the young person gets paid varies a great deal.

The best time to start a business is always right now. Do your research and business plan, but don’t wait forever.

Get the summary of your business plan succinct and hit the key points quickly. What is your business concept, what differentiates you, why will you make it work, how much do you need and what will you spend it on? The revenue and profit of the business and what does an Investor get out of it?

Deborah Meaden gets 200 plans a month (or was it a week) and now has to employ an assistant to sift through them. The Exec Summary is all important; unless that is right the rest of the plan never gets read. No fancy tricks, just a solid, thought out summary that ticks the boxes quickly.

Check the interests of who you are sending it to, not all Investors are interested in every market sector. Find out their background, Investors more often put their money into concepts they understand and are comfortable with.

If a plan is turned down, by a bank or an Investor, ask why. Learn from that. Also ask if they know of anyone else to approach.

Get a partner. This is one of the reasons I set up Company Partners, to help people find a business partner, so I was gratified that this came out. Even the famous entrepreneurs that we all know had partners. It may be that one took the lime-light, but the other was there with complementary skills, to bounce ideas off. It’s lonely by yourself.

Get good people around you. Choosing your first employees is difficult, but always get the best you can.

Contracts for partners and employees are needed, but it is much more about the relationship. That must be right.

Cath Kidston started her business part-time, while working to pay the bills and thought that was acceptable. But Deborah Meaden said: “As an Investor I want to see that the entrepreneur is fully committed” and wouldn’t invest unless the entrepreneur was working full-time on the project.

Finally, all felt that the most important characteristic of an entrepreneur was ambition and that you need to have a passion for what you did. I agree, you can teach many things, but you can’t put a fire in the belly unless it’s already there.

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