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Posts Tagged ‘small businesses’

Is British Entrepreneurship suffering?

Monday, May 7th, 2012

USA and Australia topped the recent Global Entrepreneurial and Development Index, whereas the UK only came only 14th.  The Financial Times’ Jonathan Moules commented with surprise that the UK had even come below Austria and Belgium!

On a positive note, the UK was among the best in the world for the number of start-ups it creates (– particularly technology companies); the quality of the founding teams; and the capacity to launch new products without any peers.

However the UK has arguably been more significantly affected by the financial crisis than other nations, and as a result British businesses lack early-stage investment.  In the ranking for the number of individuals who have invested informally in other people’s start-ups in the past three years, the UK falls into the bottom quarter of OECD nations.

In addition, research suggests that in cultural terms, the British do not perceive entrepreneurship as a good career choice.  Erkko Autio (Professor in Technology Transfer and Entrepreneurship at Imperial College) said the UK could significantly improve its position if measures introduced to encourage early-stage investment resulted in more investors committing capital.  “The one thing we are pretty sure about is that it is not [a problem of] over-regulation,” he added.  “It is more about the [need to change] cultural and social norms.”

Crowdfunding – a viable alternative for raising capital?

Tuesday, April 24th, 2012

Aiming to bring businesses and backers together, US crowdfunding site Kickstarter specialises in film, art and design.  It allows for people to pitch ideas for which they need financial backing, and for potential backers to come forward with offers.  A deadline is set by which a certain funding target must be met.  If it is not met, backers’ pledges are returned and no money transactions take place.  And if the funding target is met, the party who has pitched its project retains complete creative control, but Kickstarter retains 5% of the total funds raised.  The backers are given a role in the development of the product; the right to give feedback on its progress; and a copy of the finished product.

Justin Kazmark (Communications Director at Kickstarter) explains, “There’s always a value exchange between creators and the backers that pledge financial support to a project.  In exchange for pledging, backers receive creative rewards, one of a kind experiences and behind-the-scenes access to the creative process as the project comes to life.

Kickstarter was founded on the idea that there is value in the world beyond things that can make money. Ideas should be able to exist because people feel an affinity toward them, not because of the promise of profit.”

San Francisco-based developer Double Fine Productions has successfully raised a phenomenal amount of money by pitching the idea for their game “Double Fine Adventure” on Kickstarter.  It took a mere eight hours for the required £250,000 to be raised by thousands of on-line backers; but people continued to contribute funds for several weeks.  The final amount raised reached £2 million ($3.3 million), and the number of backers exceeded 87,000.  The game will now be developed for the next six to eight months and will be available on PC, Mac, Linux, iOS and android.

Greg Rice (Producer of “Double Fine Adventure”) enthuses, “Kickstarter allowed us direct communication with our fans and ultimately means we’ll be able to make the game we want and also directly benefit from it financially.”  He states that crowdfunding websites like Kickstarter are “getting more and more important…  It’s truly amazing that people with a great idea now have a way to fund making those ideas come true and are able to do that by speaking directly to their customers.”

New legislation in the USA,  the “Jumpstart Our Business Startups Act” will allow backers to own equity in the companies they invest in and let those businesses raise up to $1million (£600,000) through crowdfunding websites such as Kickstarter.

In Britain, one crowdfunding website is already offering equity to investors without the need for any change in the law.  Exeter-based Crowdcube launched last year and has already funded 15 projects, raising £2.8million.

Crowdcube vets in-coming business plans, and presents the approved ones on its website in a video clip, awaiting offers from potential backers.  Crowdcube functions in a similar way to Kickstarter, in that it takes a 5% fee on pitches that reach their target.

Luke Lang (Co-founder of Crowdcube) boasts, “We’ve completely democratised the whole investment industry…  We’re trying to make investing in business easy and inclusive rather than it being the exclusive preserve of the elite who have got lots of money or lots of experience…  We’ve broken down those barriers and enabled ordinary people with modest amounts of money to get behind small businesses.”

Crowdcube’s greatest success story is the £1 million which was raised for the Rushmore Group to build a new private members’ club in London.

There are other crowdfunding sites such as London-based PleaseFund.Us, which has raised around £100,000 for projects since it launched last September.

Feeling positive? Ready to take a risk?!

Tuesday, April 17th, 2012

We all know that Britain’s economy is in need of a boost, and the optimistic among us expect a renaissance at some point in the not-too-distant future!  Amid this tense anticipation, more and more alternative funding options, and attractive business savings account deals are emerging – so now could be a good time for businesses to “shop around” for advantageous deals.

Partly as a means of encouraging a resurgence in business activity in the UK; and partly in the hope of capitalising on the future success of UK businesses, Britain’s high street banks and building societies are vigorously promoting their business savings accounts.  Business savings accounts are in fact expected to grow by about 25% over the next five years.

In addition you may wish to consider the loan services of reputable organisations other than banks, such as Funding Circle.  Since its foundation in 2010, Funding Circle has loaned more than £28million to 670 British businesses.  Funding Circle has recently received a £10million boost, as it is now being backed by Index Ventures and Union Square Ventures.

Future Proofing for Success

Thursday, March 15th, 2012

If you work in the communications industry, and are interested in strengthening your business’s brand, you may be interested in attending a training event on 16 May 2012, at Kings Place, 90 York Way, London N1 9AG.

Speakers include Shelly Lazarus (Chairman of Ogilvy Worldwide), Louise Mensch (MP), Daryl Fielding (VP Marking for Kraft Foods), Fru Hazlitt (CEO of ITV), Debbie Klein (CEO of Engine), Alex Cole (Director of Corporate Affairs for Sainsbury’s) and Travey Follows (of VCCP).

You will be able to attend a workshop on one of the following subjects: Speed Mentoring; Work/family life balance; Investing in your future; Networking; and Change.

At £425 plus VAT per ticket, this event is not cheap; but if you book by the 31st March, you can get the early bird discount and pay £385 plus VAT.

http://www.wacl.info/gather

Female Entrepreneur Focus: Lara Morgan

Wednesday, March 14th, 2012

Lara Morgan initially founded a toiletries supplying business Pacific Direct in 1991, later selling it for £20 million in 2008.  She has since started Company Shortcuts, which focuses on helping other entrepreneurs with their business ventures.

In a recent magazine interview she narrowed her “top business tips” down to 5 fundamental mantras:

  1. “Sales are all you need”
  2. “Do admin outside business hours”
  3. “Hold on to equity”
  4. “Don’t stick to one mentor”
  5. “Don’t employ lightly”.

The first four tips speak for themselves.  With regards the fifth, Morgan emphasises the fact that becoming an employer means taking on a lot of additional responsibility.

Off To See My Lawyer are of course here to help you assess the pros and cons of taking on employees, considering UK and EU legal requirements, procedures and statutory duties of care; and taxation issues. (First appeared in Stylist Magazine http://www.stylist.co.uk/stylist-network/lara-morgans-top-business-tips)

Starting up a business of sales of goods/services? – Read on….

Tuesday, March 6th, 2012

Once your business has already been up-and-running for two or more years, it is likely to be far easier to predict the success of future sale of goods/services – as you will have gained a wealth of experience and know-how, and have established a number of business and customer/client relationships.

Having accumulated various data and statistics over the years from your various successes and failures, you will be able to make comparisons and draw relevant conclusions – and therefore decisions will be much easier to make.  When you are just starting out, however, you don’t have any such data at your fingertips – and the nature of forecasting and planning for the future is quite different.

Adapted from an American article I found on the internet, here are three pointers if you are just starting out:

1. List your Sales Prospects

Consider any sales that are already in the pipeline, and estimate the probability of success for each account.  Update this information regularly.

As your business matures, you’ll get better at making these estimates.  (It may be the case, for example that if you have met with a customer you roughly have a 20% chance of “sealing the deal”, and if the customer has already agreed to a price, the chance may be 50%.)

2. Customer payback period

At the outset, the cost of customer acquisition (perhaps via networking, advertising, or other marketing methods), can only be a rough guess.  Once you have determined the amount you wish to invest in this, you can start thinking about how many months it will take to recover that cost through successful sales – ie. “the customer payback period”.

It is also advisable to consider how many customers you can afford to acquire with your existing capital or operating profits.

3. Sales made by more than one person

Once you have started generating profits, and you are endeavouring to forecast how much profit you are likely to make in the near future, you may find it useful to take your gross sales figure, and divide it by the number of people who had been engaged in making  the sales (ie. Colleagues, Partners, employees, etc.)  If the number of people involved in selling your goods or services, or in generating new clients/customers are subject to change, you should consider this when estimating future profits.

WIN AN INVESTMENT FROM ONE OF BRITAIN’S TOP BUSINESSMEN!

Thursday, February 23rd, 2012

We have found an advertisement for such an opportunity – although the only downside is you need to be prepared to appear on a television programme on Sky 1 …Or maybe this prospect actually appeals to you!  The website address is: http://sky1.sky.com/the-angel/calling-all-entrepreneurs-apply-for-the-angel-here To find out more, contact Naomi Templeton on 0207438 1812 or send an E-mail to TwoFour Broadcast at: business@twofour.co.uk

HMRC call temporary halt to record-keeping checks

Monday, February 20th, 2012

On Friday 3rd February, HM Revenue & Customs (HMRC) called a temporary halt to its controversial programme of visiting small businesses to check up on the quality of their record-keeping: “Business Records Checks” (“BRC”).

The pilot programme made 2,437 checks between April 2011 and January 2012.  28% of the businesses visited had some issue with their record-keeping, and an additional 11% had problems serious enough to warrant a follow-up visit.  Various accountancy bodies, however, have been campaigning for HMRC to tone down the way it conducts its checks, as they are purported to be overzealous.  Richard Summersgill, HMRC’s Director of Local Compliance, conceded, “After reviewing the pilot programme and listening to the views of businesses and representative bodies, we acknowledge the need for a fresh approach to business records checks.”

As a result, HMRC are likely to cut the number of visits made very year from 50,000 to 20,000 – which means that the initiative will only raise a quarter of the amount of money which HMRC would have otherwise gained – that is, approximately £124m instead of an estimated £600m.

While small businesses can breathe a sigh of relief to a certain extent, Off To See My Lawyer strongly recommend you remain vigilant over the quality of your record-keeping!

Intelligent Textiles: Asha Peta Thompson

Wednesday, February 15th, 2012

To kick start your Wednesday, here is an inspiring story about an ambitious textiles student who has ended up with a contract designing innovative fabrics for the Ministry of Defence, worth several billions of pounds!

While studying at Central Saint Martins College of Art and Design, Asha Peta Thompson was initially interested in experimenting with textiles to find ways of imparting the National Curriculum to children with special educational needs.  In turn this led to Thompson gaining a research grant from Brunel University’s Design for Life project, where she met, and started to work with, Dr Stan Swallow, a lecturer with a background in engineering.

It is a well-known phenomenon that some of the world’s best inventions synthesise art and science, and so it proved to be the case when Thompson’s expertise in textiles combined with Swallow’s knowledge of electronics, to spawn various revolutionary types of weaves.  The pair secured various patents on their designs under the trading name “Intelligent Textiles”; and they were awarded a private grant through the University – which led to the construction of a custom loom in Switzerland.

The prospects of success for a number of Thompson’s products (such as a fabric QWERTY keyboard) initially looked promising, but ultimately did not take off in the market.

Thompson’s hard work finally paid off, however, when she exhibited some of her weaves in Canada and one of her innovations attracted the interest of the Canadian military.  This fabric, when squeezed, forms an electric switch – allowing power and data to be transmitted wirelessly through cloth.  For the next three years Intelligent Textiles worked on a project to prove that USB2 power and data could be transmitted around a soldier’s uniform.

Thompson was later head-hunted by the British MOD when conducting a presentation to NATO in Brussels, and soon after, Intelligent Textiles was granted funding by the MOD’s Centre for Defence Enterprise to develop a system which could lighten the burden for British soldiers.  Thompson’s innovative weave eradicates the need for wires, so that power can be transmitted from a backpack, through a uniform, up to a helmet and down to a glove, to potentially power a weapon.

Thompson states, “One of the problems we have with the fashion industry is they still promote [our work] as a craft, rather than a complicated exact science – just because we do it on wooden machines. There’s a lot more to it than that.”  However, she recommends working with the MOD to other entrepreneurs:  “We’ve found working with the military incredibly easy.  We’re talking and reassessing frequently and there’s also working groups that they invite industry to come and sit on, so we can understand the bigger picture of what they hope to do.”  She adds, “If small businesses are interested in working with the MOD and they already have IP, they might be put off by thinking that they want to own the IP.  In fact the beauty of working with the MOD is they don’t – they just want access to it.”

Thompson has only taken two holidays in the last 10 years, but her tireless endeavours have definitely been worth it, as Intelligent Textiles is poised to take a slice of the annual $28bn (£18bn) global soldier system budget in the next few years.

The Centre for Defence Enterprise is aligned with the government’s Small Business Research Initiative (SBRI), which connects government departments in need of innovative solutions to businesses in the UK who have the potential to solve them. For more information on working with SBRI, visit: www.innovateuk.org/deliveringinnovation/smallbusinessresearchinitiative/whatissbri.ashx

[Article adapted from “The accidental entrepreneur on securing a major contract with the MoD – and why great innovation sells itself” by Georgina-Kate Adams, www.startups.co.uk, 20 January 2012]

Handy Checklist- Transportation

Friday, October 21st, 2011
  • Your customers will judge the quality of your firm by your delivery service, as well as the intrinsic value of your products or services.
  • If you are supplying goods over a wide area, perhaps nationally, contractor services will probably offer the most efficient delivery.
  • Incorporate in your standard terms and conditions those of your contractor relating to acceptance and delivery that limit their liability.

Off to see my lawyer can help you draft your Terms & Conditions in accordance with your requirements, within the confines of the law.  For such advice, please contact Joanna Tall at jo@offtoseemylawyer.com.

  • Monitor your contractor’s service by regular inspection of its delivery records, and carry out periodic customer surveys.
  • Run your own vehicle(s) where your distribution pattern is concentrated or the success of your business relies on installation and repair services.
  • Review the alternative merits of contract hire, finance leasing and contract purchase, in terms of taxation, depreciation charges and capital allowances, against the advantages and disadvantages or outright purchase.

Off to see my lawyer can advise you on basic taxation issues, and where necessary refer you to a specialist tax lawyer whose services we recommend.

  • For more than a handful of vehicles, consider outsourcing fleet management services to a specialist firm.
  • The successful outcome of fleet purchase or a financial lease depends on maximising residual values on disposal.  If residual value estimates prove optimistic, you may need to dispose of a vehicle before its due date to avoid later loss, or to retain it until it is more fully depreciated or maintenance costs become excessive.
  • Both the trade-in and auction routes involve selling the vehicles ‘as seen’ and avoid potential liability towards a subsequent owner.
  • Factory extras increase initial vehicle cost and monthly payments to hire companies; they also depreciate quickly and may not add to residual value.  Hire and financing contractors may insist that accessories remain in place on return and restrict respraying or fitting of advertising decals.

Checklist Source: Start Up & Run Your Own Business: The Essential Guide to Planning, Funding & Growing your New Enterprise by Jonathan Reuvid (Kogan Page; 8th edition 2011)