Saturday, January 30, 2010

Gemma's Eyecatching New Business Venture

Here's another in my new series of articles celebrating businesses founded during the current recession.

Graphic designer Gemma Reidy, from Guildford, was made redundant in April 2008.  She quickly discovered that looking for a new employer was a full-time job which didn't pay very well, so she directed her energies into establishing Brand & Image, a website promoting her design expertise and her passion for branding.

The website did the job, helping to attract enquiries and opening the door for new business.

Gemma had always hoped to go self-employed but didn't plan on it happening just a few years after leaving university. Six months after starting Brand & Image she decided it was time to get serious. She needed to establish a clear direction and she wrote a business and marketing plan to clarify her thinking.

The result was eyeline creative, a design business focused squarely on the packaging needs of the retail industry. It creates brand identity, point of sale material and also offers product photography.

With no money to invest Gemma had to design and build her websites herself and her marketing has largely been through networking and word of mouth. She's also had to overcome the major challenge of picking up the telephone to call potential customers. Despite being a confident person she admits this approach to selling filled her with dread, but it paid dividends when she starting winning business.

In 2010 Gemma plans to spend money on attending trade shows to boost her profile. She's also optimistic of doubling her turnover and broadening her client base; she has already secured work from a major charity which, when completed, will give her portfolio a massive boost.

If there's one thing Gemma wishes she'd known before setting up her business it's how you go about finding new customers, but we all know there's no easy answer to that one. Her advice to others setting up in business is that you need to take the time to learn what works and what doesn't. "Every business is individual so what works for one doesn't work for another," she says.

Gemma's story is an inspiration to many of the young people struggling to find a job in the current economic climate. She's proved that if you have a skill and some initiative you can become your own boss.

Do you have a design or branding need? Why not take a look at the eyeline creative website?

If you set up a business in late 2008 or 2009 and have a story to share drop me a line via email or make contact with @biz_oh via Twitter.

Andrew Knowles is a freelance copywriter and small business enthusiast.

Thursday, January 28, 2010

Business Development - Looking Beyond Today

To be successful in business you need the ability to see into the future.

The problem is, most of us aren't very good at it. The best we can do is to expect sales of lighter clothing and garden products to pick up soon because spring's approaching. Or to anticipate that the opening of a major supermarket will hit turnover of nearby local stores.

But we can't predict what products will be top-sellers in 2010 or whether the latest gadget from some technology company is going to flop or revolutionize the market.

As successful small business owners we need some predictive capability if we're to buy new ranges of stock that will sell, develop new products people will buy or adjust our services to meet coming needs. We can simply wait for change to happen around us and then adapt to it, or we can attempt to embrace change as it's taking place or even, more daringly, attempt to predict what's coming next.

I don't have an easy answer to the question of how we look into the future. But I do have a suggestion.

Don't allow the way things happen today to shape your view of how they might happen tomorrow.

That's easier said than done. We know what the world we live in looks like right now and our vision of the future is coloured by that knowledge. Our perspective on how people live and what they use particular products for is based on our current experience.

True visionaries escape from this. They can forsee a world where, say, everyone has a personal computer on their desk or people are willing to buy books from an invisible store. They build successful businesses based on an image of the world in the future, not as it is today.

But they also make the future. If, in the next few decades, it becomes common for people to take short breaks in a ship orbiting the planet, is that because there's already a demand for it or because entrepreneurs create demand by providing the means for it to happen?

Let's get our feet back on the ground. What you or I do in our business is unlikely to change the way the majority of people live their lives.

But take a moment to consider the new ideas bubbling around in your sector: possible new products, experimental ways of working, new theories about how to do business. Don't write them off just because they don't fit with your understanding of how the world works today; they might become mainstream in the future.

You're never going to have the ability to see into the future. But that shouldn't stop you trying to take a peek from time to time.

Friday, January 22, 2010

Ross Takes a Health and Safety Risk

Here's another in my new series of articles celebrating businesses founded during the current recession.

Like many of us, Ross Thorpe of Bedford is an accidental entrepreneur. Made redundant in 2009 he's taken the skills he learned while on the payroll and poured them into his own business.

Ross set up Inca Training in June 2009 to provide health and safety courses across the UK. He'd spent six years in the industry, working for someone else, and when his job was eliminated he was confident that the market was strong enough for him to enter with his own business.

He was inspired by the likes of entrepreneurs Peter Jones and Duncan Bannatyne, who've achieved success through determination and hard work. Ross's own commitment has paid off; his business is less than a year old and he already has a network of over 20 freelance trainers working for him and in 2010 he's planning to offer courses in locations as diverse as Aberdeen and Plymouth.

Like so many who start their own business, Ross has not had easy access to finance. To date he's invested £650 of his own money in office equipment and memberships. His first six months' turnover was a modest £6,500 but that's from a standing start. He's been building his trainer network and his customer base and in 2010 he's planning to bid for some national contracts.

Ross's advice for others in the early stages of running a business is simple: "Aim high and see how things materialise." That's what he's done and so far it's working for him.

Starting a new business is always a risk but like all health and safety professionals, Ross has done an assessment and he believes it's safe to give it a go. Good for him!

If you're a freelance trainer or run a business with a health and safety training requirement, why not take a look at the Inca Training Services website?

If you have set up a business during the recession and have a story to share, drop me a line via email or make contact with @biz_oh via Twitter.

Photo from by law_keven, from Flickr. Published under Creative Commons licence.

Thursday, January 21, 2010

Existing Customers or New Prospects - Who's More Important?

Neither. That's the answer to the question in the title above.

Or to answer it in another way: both. Either answer is valid because they recognise that existing customers and new prospects are equally valuable to your business.

I used to work for a global software company that sold systems costing hundreds of thousands of pounds. It operated a hungry, fired-up sales team that vigorously hunted for new customers. They pursued big businesses, persuaded them to sign contracts, and then handed the customer into the care of the service and support team.

Service and support were not sales people. They did a great job of making systems work and keeping them running because that was their job, but they didn't sell.

What was odd about this set up was that the software company made its money not from sales of new systems, but from ongoing support fees. It's also a recognised fact that it's easier to market to your existing customers.

So if the business made most of its money from customers who chose to renew their support agreements and they were easier to market new products to, why were the sales team so heavily focused on signing up brand new customers? With the result that existing customers sometimes felt like second-class citizens.

It's too easy for businesses to focus on 'new business' while neglecting existing customers. It's not deliberate, it's just the way it happens. A new customer is more exciting than an old one. But which is more valuable?

So I'll come back to the question in the title of this post. Existing customers or new prospects - who's more important? If the answer is 'both' then the next question is obvious: do you treat them both in the same way?

Do you?

Tuesday, January 19, 2010

Don't Pay Taxes - Legally

Are quarterly VAT payments causing you a major cash flow problem?

If they are, you may already be aware of, or even using, the HMRC's Business Payment Support Service (BPSS). Established in late 2008 as the recession deepened, this service is intended to help businesses spread their tax payments over time, reducing cash flow pressures.

If you've got this far without needing to use BPSS, well done. But the continued uncertainty of 2010 means you might yet have a need. So I thought you might be interested to hear how it's worked for others.

I took advantage of the scheme almost as soon as it was launched. I was working with two firms with VAT payments due in January 2009 and neither had the cash to pay. I called the BPSS and in both cases they agreed to the VAT payment being deferred into three monthly instalments. They asked very few questions and took very few details. It all felt remarkably informal, particularly given that I was talking to HMRC.

I used the scheme again at the end of the next quarter and once more it was easy to arrange. But this time they wanted some assurance, though only verbal, that they'd get the money.

I conducted an informal survey of the experience of other businesses through UK Business Forums. The feedback is that most businesses have received favourable treatment so far, but it does seem to depend on who answers the phone at HMRC's end.

One accountant reported that a client had two very different experiences on the same day. One VAT office insisted they spend time providing 12 months accounts and cash flow forecasts while the other office allowed a deferral of over £50k of VAT and PAYE with virtually no questions asked.

There are signs that HMRC are tightening up. If you're calling to defer your payment for the third or fourth time you'll probably find it harder to get what you want. Regular users of the service are being challenged about what other steps they can take to improve their cash situation. Some are being told that repeat calls will increase the likelihood of a VAT inspection in the near future.

HMRC originally intended the BPSS to be available for 2009 only. But in his pre-budget report last month the Chancellor announced it would continue for as long as necessary. On the other hand, the UK government needs all the money it can get and I'm sure it would like to reduce the one billion pounds it's lending to UK businesses through BPSS.

One of the UK's top accountancy firms, Wilkins Kennedy, believes the service is being wound down as the government tightens its belt. Director Anthony Cork, quoted on, says businesses will probably need even more support as the economy picks up.

So if you're beginning 2010 with cash flow woes and you make VAT, PAYE or Corporation Tax payments, you should do all you can to exploit the opportunities for deferring these with BPSS.

But be prepared to make a good case - the reason why you need to defer and, more importantly, the reason why you're confident you can pay in the future. You might have to argue for a deferral, but at the end of the day BPSS is there to help UK businesses.

Wednesday, January 13, 2010

A Business Winter's Tale

As the snow came down again today I spoke with ten local businesses to learn what the weather had done to them during the first two two weeks of 2010.

Because of the snow the commercial landscape in the Hampshire market town of Alton is gloomy at best. There are some bright spots, which I'll come to later, but let's start with the bad news.

Footfall on the High Street is substantially down. That's no surprise and it's even less surprising that many older people are staying at home. This has a direct impact on businesses such as a local gents hairdresser's, who've seen a significant drop in numbers of more mature customers.

The salon's owner estimates that business is down one third, due in part to reduced demand but also to being short staffed. Employees living miles away haven't been able to get into work on some days.

A local pasta and pizza restaurant, part of a national chain, has experienced similar staffing issues. The manager told me his staff had rallied around and taken on extra duties to help plug the gaps in manpower. They have also experienced a change in buying patterns - school closures mean that lunchtimes are busier than normal but the evenings are quieter than they should be. People aren't turning out to take advantage of the promotional offers and as a result trade this month is down 15% on the same period last year.

Two retailers who are seeing a much bigger fall in business are a jeweller and a greengrocer. The former is not surprised that their luxury products are not on the public's shopping list at the moment and the manager is philosophical about a 50% reduction in sales.

The greengrocer across the road is less sanguine. Her sales are also down by 50%, which she blames squarely on the council for failing to clear the pavements. The roads aren't doing too badly, in her opinion, but that's because the snow is being pushed aside onto footpaths and making it hazardous for pedestrians.

Another business hit by snowy roads and pavements is a local taxi company. The owner, who runs a fleet of about 10 vehicles, has called the last week "disastrous". School closures mean he misses out on work valued at around £1k per day. Some of his vehicles were snow-bound for days but when he can get them on the road there is work to be had because it seems plenty of people would hire a taxi rather than take their own car out.

One place not being visited by taxis is a local community and conference centre which has seen almost all its bookings cancelled, usually at the very last minute. A few brave souls, such as Weight Watchers, have braved the ice and snow but they're the exception.

People have been going to the the local hardware shop, which is seeing a brisk trade in all things wintry: sledges, shovels, coal, logs and salt. They can't get hold of any more rock salt so customers are buying dishwasher or water softener salt instead. Camping stoves are also proving popular, apparently. It was ironic that when I spoke to them this morning a delivery of 200 sledges had been held up by the fresh snow.

Other businesses are more ambivalent about the weather. A local sweet shop reports slack business but they're very new and don't know whether it's New Year resolutions or the snow that's keeping people away. A High Street print shop is making the most of the quiet to process a big order and expects the trade they missed this week to come in next week. A local grocer was too busy to give me much time but was happy to tell me that bad weather meant good business for him.

No one I spoke to was worried that they'd go out of business because of the weather although the hairdresser admitted she was now eating into her contingency fund.

One complaint that everyone had was that the council should have done more to keep the roads and pavements clear. Perhaps I'll give them a call and see what they have to say about it.

Tuesday, January 12, 2010

Recession-Beating Tales

This blog is featuring stories from ordinary people who've decided to become their own boss despite, or perhaps because of, the current recession.

The stories so far...

Green fingers grow a hobby into a business:
Helen's a winner at Gardening Scotland

Young mum learns lessons from business failure:
Gemma's fresh start in online retailing

16 year old girl becomes inventor and business woman:
Ruth takes a steady approach to success

New Zealand mum turns typing skills into her own business:
Fiona Wins with Audio Transcription

Bolton couple shelter beneath an online umbrella business:
Brolly success for Chris and Rebecca

A football coach aims to score with iPhone applications:
Craig's developing his own future

Two students ditch a toxic solution and find a better way of cleaning:
Adam and Amber launch a green clean business

Converting employee experience into a business:
Nancy's medical billing operation

Turning a passion for customer service into a going concern:
Brian answers the business call

Solicitor finds a niche role in the media:
Olivia wins a starring role in TV

A mother creates employment and an income for herself:
Trina makes her own success

A keen salesman finds himself in hot water:
David splashes out in Scotland

Marketing Manager turns redundancy into opportunity:
Debs does marketing services

An entrepreneurial tale from New Zealand:
Lenna finds keys to success

21 year old generates £28k from £3.69 in 6 months:
Matthew's story of serial success

Young graphic design talent goes solo:
Gemma's eye-catching new venture

A new business in training:
Ross takes a health and safety risk

Mum turns her hobby into a business:
Becky Spots a Dotty Opportunity

Where there's muck there's brass:
John Cleans Up in South Wales

Turning fashion sense into business sense:
A 2009 Start Up Story

If you'd like your story to be considered for inclusion, get in touch by sending an email. Or contact us through our Twitter account: @biz_oh.

Take Control of Your Cash Flow

If you run out of money your business is doomed.

I might be stating the obvious but it's amazing how many firms operate a cash flow strategy based on a combination of hope and knee-jerk response to crises. For some being in control of cash flow means seeing what's in the bank today, deciding who to pay and hoping some money will come in for tomorrow.

If you want your business to survive what are likely to be lean months at the beginning of 2010 you need a more coherent and logical approach to managing money. Yes, it means taking some time out to think and plan and you'll have to add up numbers and maybe make a spreadsheet. But if it helps you to spot trouble before it arrives and gives you time to find a way to avoid it, surely that's a good thing?

Taking control of cash flow is not difficult and it's not just for accountants and bookkeepers. It's about having a plan and an attitude and sticking to it.

Here are some areas where you need to grab control and hold on to it tightly:

  • Receipts from customers - know when to expect payment from them and consistently chase the slow payers.
  • Authorisation of payments - insist on strict procedures for releasing money; don't allow junior staff the authority to send or even commit to making payments without the right approval. 
  • Put together a forecast showing all the cash you expect to come in and go out this week. Do the same for next week and the week after, and so on. Now you can look at how your bank balance will move week after week for the next month or two.
  • Do not be over-optimistic about the amount of cash coming in. Be cautious and you might be pleasantly surprised; be optimistic and you're setting yourself up for a nasty shock.
  • Have a plan for the lean times. If you think the VAT payment at the end of the quarter is going to push you too far into the red, what are you going to do about it? Don't just hope that it will be okay, have a plan in place. What are your other options?
There's plenty more to say about cash flow management and I'll be posting on this subject again.

One final word of advice. Don't get a reputation for being a slow payer who hides behind an unanswered phone. Maintain your integrity by paying people at the right time and if you can't afford to, be as open as you can and give them a reasonable expectation of when you can settle the bill. Build trust with your suppliers and you'll reap the benefits in the long-term.

Andrew Knowles is a freelance writer and a small business enthusiast.

Sunday, January 10, 2010

Warning of Severe Cash Flow Problems Ahead

I’m predicting that the recent bad weather will cause a number of UK businesses to face significant cash flow challenges in the next two or three months.

January and February are traditionally a time when managing cash is tough for many businesses because they follow the short trading month of December. It's a particular problem if you are due to make a VAT payment at the end of January.

Retailers are an exception because they see a huge boost in trade leading up to the holidays. But many other businesses can see their monthly turnover cut by up to 50% in December.

Businesses had barely reopened after the Christmas and New Year holidays when the UK was hit by the worst winter conditions for decades. Some were unable to open and others have been short-staffed. Even those able to operate will have found many of their customers unusually quiet.

The result of this disruption will be reduced turnover in January which will have a direct impact on cash flowing into businesses in February and March. For firms already facing a cash flow squeeze after the holiday period this could precipitate a major crisis. Some business owners are already worried that this could force them into closure, as reported by the BBC.

If you’re facing a nightmare situation in these early weeks of 2010 and wondering where you’ll find the money to pay bills and staff, you need to start planning today. Cash flow forecasting is an essential activity in any business, particularly when money is in short supply. Hoping the problem will sort itself out is not a viable strategy.

If you’ve managed to get this far through the recession without doing detailed cash flow planning you’ve been fortunate. But now you need to take time out and think about where the money is going to come from in 2010, and where it will go, and put together a month-by-month or even week-by-week estimate of your cash inflows and outflows. That way you’ll be better able to spot the crisis points that you need to find a way to get through.

In the near future I’ll be posting more advice on how to manage your cash flow, so why not make a note to follow this blog?

If you have any stories about the challenges you’re facing or want to share solutions you’ve found please get in touch – drop me an email or make contact with @biz_oh via Twitter.

Saturday, January 9, 2010

Becky Spots a Dotty Opportunity

Here's another in my new series of articles celebrating businesses founded during the current recession.

This is the story of how a hobby became a business.

Becky Peabody, of Somerset, has always designed and made her own greetings cards. Ten years ago, following the arrival of her first child, Becky created a personal Christmas card combining her artwork with a family photo. She had 100 copies printed locally.

This became a tradition that led to a friend asking Becky to create a Christmas card for a small business. The opportunity for a larger print run, with its economies of scale, led Becky to start selling the card to others. So Dots and Spots was born.

With an initial investment of just £500 Becky has built up a range of unique and distinctively styled cards, pictures and gifts which she sells online and to a number of shops.

Getting into the market meant Becky had to approach a number of small, independent retailers directly and persuade them to take her stock. It was a thrill to have a first repeat order because it meant her creations were selling and soon other retailers were contacting her to buy stock.

Becky does not have a business background; she's worked for about ten years as a teacher and taken time out during her career to have her own family. In 2009 she took the brave decision to leave teaching to concentrate full time on Dots and Spots, which had a turnover in its first year of about £10k.

Leaving work has meant a cut in income for Becky and her husband, who has a full-time job but runs the Dots and Spots website. She's confident that business, and income, will pick up in 2010. Two agents now represent Dots and Spots products and she is hoping to participate in one or two trade shows. Turnover targets for the next year are around £20-30k and these appear realistic based on recent activity.

These are still early days for Dots and Spots. In common with most entrepreneurs Becky is investing a considerable amount of time and money (about £2k to date) in her business. She says that one of the main lessons she's learned is that "the trade element is the main 'earner' for the business and this is the area I really want to grow, but the retail provides a nice residual bit of cash, too!"

Visit their website if you'd like to know more about the Dots and Spots original and unique range of cards, gifts and pictures.

If you set up a business in late 2008 or 2009 and have a story to share drop me a line via email or make contact with @biz_oh via Twitter.

Tuesday, January 5, 2010

Extra Public Holiday in 2012

The UK government have just announced that there will be a special public holiday in 2012 to mark the Diamond Jubilee of the Queen's accession to the throne.

It will fall on Tuesday 5th June and the late May Bank Holiday is moved by one week to Monday 4th June.

This creates a four-day weekend of celebration.

Public holidays can create challenges for small businesses, particularly where more than one falls in close succession. While 2012 is still some time away, businesses should take note of these dates and be prepared to plan accordingly nearer the time.

2012 is also the summer that the Olympics will be held in the UK, which may present other challenges and opportunities for businesses, particularly those located near to Olympic venues.

To cap it all, 2012 is also about the time when the economy might be expected to return to 'normal'. It looks like being an interesting year!

Note that this public holiday applies to England and Wales, but not Scotland.

For more information visit the website for the Department for Culture, Media and Sport.

John Cleans Up in South Wales

This is the second in my new series of articles celebrating businesses founded during the current recession.

If, like me, you've tried to hire and work with a contract cleaning company you'll know it can be a challenge to find one that's reliable and reasonably priced.

John Bailey, from South Wales (pictured above with his staff team), had exactly that experience in late 2008 when he was asked to source a company to clean an office block. He decided that he could offer a more professional and thorough solution than that offered by any of the businesses he met and so he established his own contract cleaning company, ICU Clean.

John and his wife Maree (second from left in photo) have since grown the business to a turnover measured in hundreds of thousands and they employ five full-time and forty part-time staff. They've worked long hours and managed the business growth from home, working around the needs of a young family which includes a toddler. Even simple tasks, such as telephone calls to customers, had to be scheduled around the needs of the children.

John started his first business, a takeaway restaurant, when he was 19. He soon discovered that hard work and attention to detail paid off and kept the customers coming back for more.

These same skills make the difference in the contract cleaning industry. John's experience is that there are plenty of start-ups in this sector but few long-term survivors. ICU Clean prides itself on delivering a great service with a thorough, consistent approach to everything it does.

The business now boasts a wide range of customers across South Wales and its website claims it is now the premier contract cleaner in the region. Customers include a number of dental and doctors' surgeries which, as the website points out, demand the cleanest of environments.

John is upbeat about 2010 and is optimistic that business will grow by at least 20%. His advice to others looking to start their own business is to "seek opinions from people who are not friends and who will happily pull your idea to pieces. After all, it isn't until you take something apart that you see how it works."

For more information about ICU Clean why not visit their website?

If you've set up a business in late 2008 or 2009 and have a story to share drop me a line via email or make contact via Twitter.

Monday, January 4, 2010

Happy Monday - It's 2010

Welcome to the year of economic recovery.

Surely that's what everybody is thinking this cold Monday morning? In one way or another we are all hoping, praying or expecting that the new year will feel more comfortable than the old one.

We went into 2009 prepared for months of bad news as the global downturn bit. Pundits were almost universally gloomy but offered a glimmer of hope that the close of the year would see a return to economic growth, marking the end of the official recession. We're still not quite there yet.

BBC Business Editor Robert Peston's predictions for 2010 give the impression that the light at the end of the tunnel could yet be the headlights of an oncoming train. Granted, a slow and steady recovery is the more likely path we'll tread, but one prediction I'll make is that the word 'fragile' will continue to be overused for a while yet.

The government wants us to think positively about both our outlook, and theirs, as we consider where to put our election crosses in the spring. All the political parties will be offering encouraging words and implied promises while business agencies take the opportunity to put forward their ideas for rebuilding the economy. The Federation of Small Businesses is promoting the concept of an enterprise allowance scheme for entrepreneurs and regional stock exchanges.

Whatever happens in 2010, one thing is almost certain. If you're starting this week, and this year, in a negative frame of mind, your situation is unlikely to improve. If you don't have confidence in your business, why should anyone else?

Positive thinking won't pay bills or generate new sales but it lays the foundations for these to happen. So start 2010 by looking forward to growth and success and by being prepared to put in the hard work necessary to achieve both. Business planning is going to be important this year, as is following through on your plans and adapting to circumstances.

I'm hoping you, and I, will reach the end of 2010 and be able to look back and say: "Yes - this was the year of economic recovery".

Happy New Year!