It‘s no secret that having an effective accounting system is essential to maintaining a successful business but financial management can prove to be a frustrating, daunting task for many small businesses. While technology and accounting are both areas that can often prove particularly challenging to smaller companies, technology really can make accounting simple and ’hassle-free‘.  

Until recently, there was very little technology could do to help. Most accounting packages were designed – and priced – for large enterprises, leaving small businesses to create piecemeal solutions from applications not designed for accounting, or to manually track everything from invoices to customer payments and supplier tracking.

Fortunately, times have changed. Products and programmes can now be tailored for the specific needs of smaller companies, and there is no reason why smaller businesses can‘t compete with the big players. The same technology that has long been available to bigger enterprises is now available to smaller companies but at a price proportionate to their size.  

Just because you‘re buying a lower-cost package doesn‘t mean that you have to settle for second best. When you evaluate what programme to buy, make sure it:

 

• Enables you to get a 360-degree view of your business, tracking sales, products and finances from supplier to customer

• Manages all aspects of your accounting needs, including the creation of reports, management of financials and payment tracking on one system

• Fits with the way you already work, integrating with your existing systems for contact management and business planning

Choose a solution that fits the needs of your business right now, as most companies have bolt-on products available that will allow you to scale it up later if needed. Accounting programmes now available enable you to do everything from identifying late payers and targeting them immediately so you don‘t spend precious time chasing them, to viewing cashflow trends and modelling future revenue streams. These solutions will enable you to take a more holistic view of your business, allowing you to look not just at financial output but also at trends, key customers and new business opportunities.

Adopting a new accounting solution may seem like an overwhelming task, but moving away from the paper trail to an electronic system delivers massive benefits to small businesses. Most importantly, it will free up your time allowing you to focus on the things that matter most to your company. The key to implementing a new accounting solution is to choose a programme that is right for you, your business and operation model.

John Crawford, The VAT Consultancy
VAT accounting can be straightforward, but businesses need to be aware of some important rules that affect them and the methods by which they can manage their VAT liabilities more efficiently.

 

• The quarterly or monthly VAT return includes a formal written declaration that the information given is true and complete. Deliberate, and in some circumstances innocent, errors can give rise to penalties and interest charges. Ensure your VAT return is accurate to the best of your knowledge and belief. If you are in doubt speak to your accountant or HM Revenue and Customs.

• It is imperative that your VAT return is received by H.M Revenue and Customs by the due date (normally by the end of the month following the period covered by the return). Failure, even by one day to get your return in on time and pay the liability on it will bring you within the scope of default surcharges. These can rise to 15% of the VAT liability on an individual return and should be avoided if at all possible.

• Businesses whose turnover does not exceed £660,000 can account for VAT using cash accounting. This means that they are not required to pay over the VAT on sales until such time as the customer pays, however, they cannot reclaim the VAT on purchases until such time as the supplier is paid. This scheme will be of benefit to businesses who suffer with late-paying customers.

• Retailers account for VAT on their takings but are entitled to reclaim the VAT on purchases, regardless of whether they have paid their supplier or not.

• Annual accounting can be used by businesses with a turnover of less than £1,350,000. This scheme allows businesses to submit only one VAT return per year and make monthly or quarterly payments which smoothes out cashflow.

• HM Revenue has also introduced a flat rate scheme for businesses with a turnover of less than £150,000. This scheme can really reduce business administration, but needs to be considered carefully as it can result in additional VAT liability for the unwary. The scheme works by applying a flat rate percentage to a business‘s total tax inclusive income, which is lower than the standard rate of VAT. Input VAT on purchases can however not normally be recovered.

Simon Smith, general manager, MYOB UK
If your business sends out invoices created using a word processor, or even manually, and then tracks who owes you money in a spreadsheet, there is a better way!

You may think that your spreadsheet is fine, and for some businesses it will be, but for many others having better tracking and reporting will enable them to run their business more efficiently. By using the right tool for the job, you reduce your chances of making calculation errors on invoices, not following up on customers who owe you money or not billing customers for work you have done.

I recall the story of a lady running a chain of chip shops – very successful ones – who used spreadsheets to manage the finances of her business. She thought there was really no need to automate things any further and was happy with what she was doing.  

As the conversation progressed, she began explaining how she entered all her takings into the spreadsheet, but went on to say that it would be nice to be able to compare takings this year against last. She proceeded to describe all the things she did and was really describing what accounting software could do for her in a lot less time.

When you think of accounting software as just a database to store your business finance information, you can start to see that by putting the information in once, you are able to slice and dice it however you want. You can get the information you need to run your business and also produce things such as VAT returns quickly and easily because all the information is in there ready for the reports to be run.

A common objection is that small businesses don‘t have the time to put accounting software into their business. The reality is that it will involve some time and cost to set things up, but it is an investment in the future of your business and the time-saving benefits will come as you use the software for routine tasks further down the track.  

Studies have shown that getting into a regular pattern of keeping the books up-to-date can increase your chances of business success. So don‘t get left behind, take control of your finances and spend more time minding your own business.
 

The knock-on effects of things going wrong can be crippling for a small business and go beyond a financial impact as reputations and business relationships can also suffer

Small business owners should check international banking transactions for errors after research revealed that more than a third (36%) have experienced problems.

The study by Travelex found that despite the fact that more than half of such errors are the fault of the banks, 17% of companies have been charged extra fees to rectify the problem.

These costs and the loss of man-hours chasing up such mistakes costs the average small business £400 a year, the study claims, and mean the small business community as a whole loses £100m annually.

“The demand for international business payment services is growing by 8% year-on-year,” said Tony Wilson, director of Travelex’s global business payments division. “With an increasing number of the UK’s small to medium-sized businesses engaging in trade with their foreign counterparts, these figures illustrate just how often payments go astray, and the subsequent cost of putting things right.

According to the study, the top five most common mistakes are banks taking deductions on fees without the clients’ knowledge; incorrect account names; human error; bank delays; and unsophisticated local banking networks in certain countries.

“We would urge any business involved with international transactions to think carefully about how they go about sending money abroad and, importantly, who they use to facilitate the payments,” added Wilson.

“The knock-on effects of things going wrong can be crippling for a small business and go beyond a financial impact as reputations and business relationships can also suffer.”

The survey also revealed that in two-thirds of cases the error was spotted by the customer rather than the bank.

• A clear view of how your business is performing currently AND how your ideas and plans for the future will impact upon skills, resources and cash flow within the business
• Allows you to communicate your goals and objectives to your team and should also help you build performance targets for key team members
• A basis for understanding future finance requirements and determining the most appropriate ways of satisfying these
• A tool for demonstrating business’ potential and strengths to external funding providers

Other advantages include:
 

• Opportunities to utilise government grants – few government grants would back a project that has already commenced
• Design most appropriate funding structure – in many cases the best deal can be obtained by taking into account how funds will be expended and future funding requirements

  One recipe for disaster is to outsource the development of your business plan completely to advisors – you and your team know your business strengths, weaknesses, the people (and what they are capable of), and your vision

Do you need external help with your planning process?
One recipe for disaster is to outsource the development of your business plan completely to advisors – you and your team know your business strengths, weaknesses, the people (and what they are capable of), and your vision.
A good advisor will work with you and your team to:
 

• Draw out information about your vision and goals in a structured manner
• Provide objective insight as to where your current (or new) markets might be heading
• Analyse the competition and giving you feedback as to how you compare
• Get information about what really works within your business (i.e. the bits the team would not normally tell you about…)
• Design the right funding structure for your requirements
• Provide introductions to the most relevant finance providers and negotiating the best deal on your behalf

What is Access to Finance?
Access to Finance is a new programme introduced by The London Development Agency (LDA) – targeted and small and medium sized businesses based in the London region that expect to have an external finance requirement within the next 18 months.

The programme significantly subsidises the cost of professional advice aimed at helping you raise finance. Platinum Business Services have been appointed by the LDA as an accredited provider to provide this support across London.
 

Small businesses are being urged to shop around for the best banking deals after the recent Competition Commission decision to lift price controls that established a minimum quality of service from the big four banks.

The Forum of Private Business said it did not support the idea of imposing restrictions on the four largest banks but urged small companies to look into the possibility of switching bank or negotiate with their current provider for a better deal.

“It’s inconsistent for business groups that campaign against regulation and believe in competition to support price controls,” said Matt Hardman, FPB campaigns manager.

“Our aim is to make competition work and encourage smaller businesses to negotiate with their banks, shop around for the best service, and change banks if they are not satisfied.”

But The Federation of Small Businesses condemned the decision to overhaul undertakings made with Barclays, Lloyds TSB, HSBC and the Royal Bank of Scotland in 2002, under which banks pledged to pay interest on accounts in credit or provide free banking to small business clients.

Our aim is to make competition work and encourage smaller businesses to negotiate with their banks, shop around for the best service, and change banks if they are not satisfied

“We are utterly bewildered by the Competition Commission’s provisional decision in this case,” said Mike Cherry, FSB financial affairs chairman. “It flies in the face of all the evidence we have given and completely contradicts the experience of thousands of our members.

“Despite their promises to the contrary, there has been a worrying lack of transparency from the banks about the services they offer to small businesses,” he added. “We have provided concrete evidence that the big four banks are not complying with the undertakings they signed up to in 2002 and the Competition Commission appears to have completely ignored it.”

A FPB report published last year revealed a general improvement in the banking industry’s services for small businesses as well as a greater willingness on the part of small firms to switch providers.

UK companies have woken up to the need to put measures in place to protect their core business processes but still have huge gaps in other areas of business continuity planning.

According to Grant Thornton’s International Business Report, 77% of companies in the UK now have documentation in place to deal with disaster recovery and a major IT failure, comparing favourably with an EU average of 57% and 63% respectively.

The vast majority of businesses (81%) have procedures in place to deal with a breach in the security of their electronic information, while 80% could cope with privacy of information issues and 73% with the loss or destruction of property.

“Risk management should be an integral part of every firm’s strategic management, so it is encouraging to see so many UK businesses appearing to take the issue seriously,” said Alysoun Stewart, head of Grant Thornton's Strategic Services Group.

While not as high profile or dramatic as some events, the sudden or unexpected loss of key personnel or a supplier can have a devastating impact on a business

“Identifying fundamental risks and taking steps to prepare for them is essential for minimising the impact of a disaster, which is key to the continuity of privately held businesses.”

Yet only 26% of businesses have formal procedures in place to deal with an event that threatens their reputation or portrayal in the media while just 32% and 34% respectively are equipped to deal with the loss of a key supplier and customer.

“It is worrying that UK businesses appear to be overlooking these fundamental business risk areas,” added Stewart. “While not as high profile or dramatic as some events, the sudden or unexpected loss of key personnel or a supplier can have a devastating impact on a business.”

The report also revealed that only just over half (53%) of companies have a formal succession planning mechanism in place. “Exiting from your company is one of the most important decision a business owner can make and should take years of careful planning,” claimed Stewart.

“Business owners who fail to recognise the importance of such preparation risk putting the successful continuation of their businesses in jeopardy,” she added.

To mark National Stress Awareness Day, HR services company Ceridian has revealed the top 10 list of employee gripes, which may sound trivial but are anything but that if they contribute to office stress.

Top of the list is colleagues avoiding doing their fair share of work, followed by arguing in work places, gossiping and complaining. Other gripes include hijacking meetings with personal agendas, taking excessive tea, cigarette or toilet breaks and swearing.

“Irritating habits may be funny when portrayed in sitcoms like The Office but in real life they’re no joke,” says Doug Sawers, managing director of Ceridian. "Employers should be on the lookout for annoying behaviours that stress out fellow workers. Stressful and disruptive behaviour can affect office morale, productivity and, as a result, the bottom line.”

Employers should be on the lookout for annoying behaviours that stress out fellow workers. Stressful and disruptive behaviour can affect office morale, productivity and, as a result, the bottom line

Croner offers the following tips on how your staff can prevent stress levels getting too high:

Set aside time for project work. Ignore or turn off your email alert and divert your phone when working on important tasks so you can focus on the project at hand. Multi-tasking can make us less productive and it may be helpful to set aside time for focused effort each day

Revisit timelines. Assess whether your timelines are realistic. Working toward deadlines you cannot meet is self-defeating. Re-adjust the timeline when necessary

Talk about it. Communicate concerns to your co-workers and suggest ideas for how to improve your situation. Ask for help with tasks that are easily delegated such as research, follow-up calls and other basic tasks

Set boundaries. Find the appropriate balance between life and work. With 24/7 access to mobile phones, email and PDAs, many modern workers need to be reminded to stop working after business hours or to fully recharge themselves during holiday periods. Time away from work will make you a more productive worker during normal office hours

Eat lunch. Enjoy healthy food at lunchtime, each day. Instead of working through lunch, take the time to eat and enjoy a few minutes away from your work. Sit and talk with colleagues or take a quick walk

Pay attention to posture. When you find yourself in a tense meeting, pay attention to your shoulders and arms. Are they tense? Try sitting with your palms face up on your lap.  This pose naturally relaxes your shoulders and relieves neck tension. When sitting at your desk, are you hunched over? Sit up and make sure your workstation is suitable

Stretch, breathe and find perspective. It sounds simple, but moving your muscles and deeply filling your lungs several times a day can help you instantly lower tension and stress. Take time on a regular basis to reconnect with your body, recognise stress as it escalates, and look at the big picture. When you take time to reflect on your current state of affairs, you may often find that it’s not so bad after all

The most important benefit when selecting an ideal jobs package is flexible working, according to a survey on staff motivation.

The research by Capital Incentives & Motivation found that three in 10 respondents put flexible working top of the list, ahead of pension (19%), car (14%) and an extra week’s annual leave.

Further benefits selected were a travel allowance such as a season ticket (6%), laptop (4%), gym membership (3%) and mobile phone (2%).

“The priority of flexible hours is an interesting measure of the importance to employees of achieving a better work-life balance,” said Graham Povey, managing director of Capital Incentives & Motivation.

“However, given the ongoing headlines about the future of the state pension, I am surprised that the provision of a company pension arrangement was not selected by a higher percentage of respondents.
 

It seems that employees could be failing to take a long-term view of the benefits of a company pension or healthcare scheme and are instead opting for benefits that will have a more immediate impact on their lives

“It seems that employees could be failing to take a long-term view of the benefits of a company pension or healthcare scheme and are instead opting for benefits that will have a more immediate impact on their lives.”

The poll also revealed that the factor most likely to motivate staff to perform at work was being treated fairly by their boss, with 72% citing this as very important. Having good relationships with colleague was second with 61% while a good salary was third in the list with 56%.

The majority of factors such as job security, leadership, benefits, work load and training increased in importance in 2007, while a good location and work environment remained stable, with 35% of respondents rating it as very important. Fair promotion prospects fell, with 35% of participants rating it very important in comparison to 38% in 2005. 

“It is not surprising that ‘being fairly treated’ at work has remained the top motivating factor as it is important for all employees to feel that they are valued by their employer,” added Povey.

It’s very easy when you’re running a business to get stuck doing the same old thing everyday, and that’s exactly the same with your staff too.

But for dynamic, entrepreneurial companies that want to expand, it’s vital to retain your staff at their maximum level so you can continue to maintain customer service standards and take on extra work when the opportunity arises.

“Improving the skills and performance of your team – your business’ greatest asset – is one of the best ways of building a more efficient and dynamic business,” says Helen Cracknell of Business Link.

“Not only will it make your business more productive, allowing you to service existing customers better, but it will help you identify ways to grow your business opportunities. It will send out a positive message to your employees, who will understand that you are investing time and money in their development.

“The size of your business will dictate how much you can do to improve your people and how they work,” she added. “Other influencing factors include industry, skills required, training and resources available. The important thing is to find the right solution for your business that will be cost effective for you, but also motivate you employees.”

Business Link offers the following tips on how to give your staff’s performance a boost:

Reviewing the situation
A good starting point is assessing your team to understand what you could change. Think about the different skills areas within your business, such as customer service, sales and marketing or finance. Developing a review process will give you the structure to build improvements into your employees’ performance and their skills across these areas. Talking to each team member individually carries several benefits, including identifying and understanding their own particular skills gaps and training requirements

Training
Running training courses is a good way of improving your staff performance and can ultimately strengthen your business. If you have the budget, it is a good way of introducing more specific skills to your business. It will also ensure you get buy-in from staff who will recognise you are prepared to invest in them, ultimately improving loyalty

Improving the skills and performance of your team – your business’ greatest asset – is one of the best ways of building a more efficient and dynamic business

What do employees want?
Take some time to think about what makes you and your staff tick. As a small or medium-sized business, you may not be able to pay huge salaries or wages but you will be able to dictate other areas and develop a workplace that will make your staff happier, such as introducing flexible workin

More than money
Aside from money, factors that you may want to look at more closely could be the type of work, potential to develop and the culture. Review these areas separately by asking your team how they feel about each of them. Perhaps they feel the business lacks a social element, in which case organise monthly events

Eyes on the target
Another good way of motivating people is through targets and incentives. Maybe you can attach targets to certain elements of work, like asking your staff to aim for an agreed number of sales meetings each month? An incentive for this could be an extra day’s paid holiday

Leadership
How your team performs depends largely on you, so you should aim to develop a management style your people will respond positively to. A manager of a business needs to be able to demonstrate respect and trust in their team, whilst having the ability the guide, motivate and inspire. If you can achieve that then you will succeed in getting the most out of your people

Stay on the ball
Always keep an eye out for new ideas and make sure you have a two-way communication channel open at all times between you and your employees. Most importantly, lead your team in way that will make them want to perform well for you and the business

Personal development tool
Developed with the Department for Education and Skills, the Department of Business, Enterprise & Regulatory Reform and the Management Standards Centre, this tool is for business owners or managers looking to improve on management and leadership skills. It guides users through a series of questions about their business, role and behaviour at work to produce a comprehensive and personalised development plan. The plan takes around 25 minutes to complete and the information submitted can be saved and revisited in order to track progress. For more information on this see www.businesslink.gov.uk/pdp

Small business owners should re-examine their sickness procedures and introduce back-to-work interviews to cut down on cases of bogus sickness, according to an employment law company.

Research by Peninsula claims that the total cost of sickness absence to companies is almost £21bn a year, with £3.5bn of that down to false cases. The survey claimed that 17% of all absence is bogus.

It also indicated that the average number of days taken off sick by an employee is 16, double the figure from 2002. A total of 480m days are lost due to absenteeism, it added, with 81.6m of these due to people taking time off sick when they are not actually ill.

The most common complaint for someone phoning in sick is flu or its side effects, the survey revealed.

Peninsula is advising companies to pay more attention to trends in sickness, for example staff taking a lot of Mondays or Fridays off or days when major sporting events are held, and enforce back-to-work interviews when staff return from a stint of sickness.

It is all too easy for a worker to ring in sick. They still get paid for it and there is no follow up regarding the excuse as to why the employee was off

“It is all too easy for a worker to ring in sick. They still get paid for it and there is no follow up regarding the excuse as to why the employee was off,” says Mike Huss, employment law director at Peninsula. “Return-to-work interviews should be enforced to give the employer and the employee the chance to sit down and discuss why they were absent from work.

“This can dissuade employees from calling in sick, when bogus, as a sense of guilt may hold them back,” he added. “The employer must make it known that bogus sickness will not be dealt with lightly.”

Peninsula has recently invested £755,000 in its Business Wise computer tool designed to help employers identify fraudulent absenteeism patterns.

Small business owners are being urged to ensure that staff take regular breaks to maintain efficiency, prevent mistakes and stay on the right side of the law.

A survey by workplace consultancy Croner revealed that almost one in five (19%) employees take no lunch break. But while this may appear to be an advantage for bosses, it is also fraught with danger, Croner claims.

“We all know that working long hours affects our ability to cope with our day-to-day roles, and as such we are starting to see more people question their work/life balance and taking appropriate action,” said Gillian Dowling, employment technical consultant at Croner.

“However, what some employees are failing to realise is that not taking time out in the working day can, in the long-term, also affect their health and their ability to do the job.”

Under the EU’s Working Time Regulations 1998, employers are obliged to ensure that anyone who works more than six hours a day is entitled to an uninterrupted break of not less than 20 minutes. This should be away from their workstation.

Younger employees under the age of 18 who work for more than four-and-a-half hours a day are entitled to a further 10 minutes away from their desk.

“In some cases there might well be very good reasons for missing out on a lunch break, such as meeting an impending deadline or leaving work early for a doctor’s appointment,” admitted Dowling.

We all know that working long hours affects our ability to cope with our day-to-day roles, and as such we are starting to see more people question their work/life balance

“But employers have to make sure that workers are having a rest break under the Working Time Regulations, so if it’s an every day occurrence, employers need to be looking into the reasons why and addressing the situation.”

However, there are also examples of employees saying they do not take a lunch hour or break but who in fact do give themselves at least some form of respite from work.

“It’s impossible for anyone to maintain concentration levels over protracted lengths of time,” said Dowling. “We find that in some instances although the employee doesn’t appear to be taking a regular ‘lunch’ break, they may in fact be taking other little breaks during the day even if it’s a quick chat while the kettle boils.”

The problem is that small firms are still buying insurance based on its cost rather than making a comprehensive assessment of their risk exposure. It is only when they have to make a claim that they realise that their losses are not fully covered

retailer.

However, each packaged policy will be different, with some offering frozen food cover, for example, as standard, while others will not. “Small companies, by their nature, have to be opportunistic in their approach,” says Scott. “Those that survive will be expanding and may find that the new business areas are not covered.”

One option is to use a specialist commercial insurance broker, which can tailor each policy to suit the particular business. Brokers often offer additional services such as a survey of company premises and risk assessment, as well as yearly policy-updating.
They can also ensure that the level of insurance fits the risk. “The problem is that small firms are still buying insurance based on its cost rather than making a comprehensive assessment of their risk exposure and buying insurance accordingly,” says Gary Head, professions underwriting director at insurance broker Hiscox. “It is only when they make a claim that they realise that their losses are not fully covered.”  

Not only do small businesses risk being under-insured, in some cases they may not be covered at all. Business risks are constantly changing. Figures from the thinktank c2e show there was a 41% increase in claims filed with employment tribunals year-on-year in 2006. Unfair dismissal; sexual, religious, disability and age discrimination; bullying; stress and low pay are now all legitimate reasons to sue an employer, according to Head.
Getting the right cover is essential. A claim or dispute could affect a business both financially and by damaging its reputation. As many struggling owners are finding across England right now, not all business can afford to bounce back from such a blow. Our essential guide to all your insurance needs should help you sift through the minefield and work out what you really need to protect your firm’s future.
 

Sam Franks, regional underwriting manager, Hiscox
When starting a business, most entrepreneurs are nervous about the business plan, cashflow, competition, regulation, taxation and shortage of skilled workers to name a few. Mix that with the excitement of launching a new business, it is no surprise that this is a stressful and intense time. The last thing entrepreneurs want to think about is any mishaps or misfortune. 

Most small businesses will acknowledge that there could be a power failure or a malfunction in their equipment and they might even anticipate the odd disgruntled employee and insure themselves against such mishaps. However, many, in particular those in so-called ‘new’ professions such as media and IT still forget an important ingredient in their business diet: insurance cover.

There is a huge range of cover available to protect SMEs against a variety of risks, such as:

Office contents and computers: covers damage to your business equipment

Employers’ liability: covers you for allegations of negligence following injury to an employee. If an employee is injured on the way to work or in the workplace, or even has a breakdown, you’re covered. This cover is mandatory under UK law for most businesses with employees

Public liability: covers you for allegations of negligence following injury, or property damage, to clients or the public. A client or courier falling and injuring themselves while visiting your offices would be covered, for example

Business interruption: covers your loss of income or reasonable additional expenses following damage to your property

Legal expenses: covers legal defence costs for certain forms of litigation like employment disputes or tax investigations

However, a key piece of insurance which small firms shouldn’t be without it professional indemnity insurance (PI). Quite simply, PI insurance protects your business against claims made by dissatisfied clients, particularly those who have experienced a financial loss. It covers you for the cost of defending allegations of negligence in the services you have provided, including any advice or consultation you have provided.

Clearly no business wants to – or expects to – run into problems where they could face legal action from their clients, and PI insurance is there to cover you for those unexpected times. Being sued by a client will not only cost money and perhaps embarrassment, but you will be distracted from your business while you deal with paperwork, lawyers and court time, which can lead to loss of new business, profits or declining turnover.

However, worryingly, Hiscox’s SME Risk Barometer study found that half of businesses (50%) don’t think that PI insurance is relevant for them. When there is so much to compete on, such as convenience, quality, price of your service, PI insurance can help you show your clients that you are a reputable company who have an insurer to call on for help should your error cause them a loss. The cover also gives you the peace of mind, of course, that should allegations be made against your company regarding the quality of your work you will have the best defence team available.

And if you are tendering for government contracts, PI insurance is a must, with many pre-qualification questionnaires including PI insurance (and amount of cover) as a standard requirement. No matter how capable you are for the job, a public sector body is unlikely to even consider your company if it does not have PI insurance. Make sure that you don’t lose a contract over something that is so important yet so simple to get.

Click here for Hiscox Business Insurance

Mike Langton, divisional managing director, Jardine Lloyd Thompson
In any business venture there is risk and the purchase of adequate insurance that helps manage the risk is particularly important in the formative years of any company.

Unlike the more common purchase of motor insurance, where most people understand the word ‘comprehensive’ or the limitations of third party, the complexities of small package insurance and their implications can be vast.

The actual premium cost of insurance is negligible. If proper advice is not sought on commencement of an insurance contract, the cost of getting it wrong can be huge. 

When considering insurance cover you should look at the disruptive effect on your business caused by a specific event which, for example, could be a fire at your own premises, a fire at a major supplier or even a key customer on which you rely for a high proportion of your business.

The requirements by contract to carry certain levels of insurance vary and you need to have a cover or an advisor who can reflect different trading conditions. Clearly when working for public authorities and airports, there is a requirement to have much higher levels of indemnity (sum insured) as against what would normally be required in other circumstances.

There also may be a reliance on certain machinery or third-party services: internet, telephones, post, computer equipment, switch gear, production machines, all of which may have a specific role within your business and their failure through not being supplied, or because they break down and stop you providing a service to your own customers with loss of revenue.

When looking at your risk you need to stand back a little and ask what the worst thing that could happen is and how it would affect your business and its ability to provide my product or services to my clients or customers. The answer might be a permanent injury or disablement to yourself or another key worker or it simply could be that you are sited close to a petro-chemical plant, which, if it suffered a major disaster, would result in your being excluded from your own premises.

All of these things can be catered for in one form or another, and it is important that you seek out the correct advice.

There are many brokers that specialise in different aspects of commercial life, as well as those like my own company, Jardine Lloyd Thompson, which handle both specialist and general ‘all trades’ type covers. The internet is a good start for research and also takes the recommendations of other people who have experienced the service of certain brokers. Trade bodies often give stamps of approval to brokers, so advice is also available that way.

There is no substitute for taking a little time to do some research, seek advice or get a recommendation. I would also strongly recommend that the best way of identifying risk is to carry out your own disaster recover plan. This will highlight areas of risk that you should look to see if an insurance policy could cater for, and may also highlight things that you could do as an alternative to taking out an insurance contract.

For more information visit www.jltgroup.com

Matthew Wood, propositions executive, MORE TH>N
Starting a new business takes a tremendous amount of organisation and effort, so deciphering complex, jargon-littered commercial insurance policies is usually way down any new business owner’s list of priorities. Arranging your first commercial insurance, however, need not be such a daunting task; in fact you can learn a great deal about the risks facing your business just by talking to your insurer.

Not only will you gain a good idea of the kind of costs you’ll need to include in your business plan, but you’ll also find out ways to reduce your premiums. Being familiar with business risks and insurance is also an important part of business planning, and demonstrates good foresight to lenders or investors should you need to borrow money to kickstart you business.

Good insurers can provide valuable information on risks and how to reduce costs, for example:

• Finding a commercial property with an adequate security system already in place

• Thinking about the physical security standard of locks, windows and roofs

• Producing written health and Safety policies

• Appointing designated first-aiders

• Implementing computer data backup procedures

Your insurer can talk you through the information required for a competitive quote and the covers you require but it pays to be prepared. Before putting in that important call make sure you know your annual turnover, how much you will pay in wages each year, what types of locks and systems safeguard your premises, and, if you’re a contractor, what type of premise you will be working on.

The lowest price and the right price are two very different things and, as a business owner, the type of insurance you opt for could have a direct effect on your livelihood, so don’t be afraid to ask questions before you accept a quote. Of course, every business faces different issues, but here are a few questions to get you started:

• How long will the price remain valid? The price may change when the time comes to buy

• What payment options are available? There are 0% interest options out there

• What extras are offered with the policy, such as advisory and support networks?

• Will my legal costs be covered in the event of a dispute with a supplier or employee?

• Will my revenue be subsidised if I can’t trade, for example, if the premises was flooded?

• What value of stock or money is covered in transit?

• Can I increase my cover as my business grows?

• Will the insurer continue to provide cover if I branch out into other areas?

• Will my premiums go down as my experience grows?

Shop around, and use the internet before you buy. There is a wealth of price comparison sites available, similar to those for motor insurance, and be sure to exploit helpful small business start-up guides published on many insurers’ websites.

But don’t be afraid to pick up the phone if you have unanswered questions. Most importantly, make sure you’re happy with the cover provided, and that you’re confident you’re with a company you can trust so that you can concentrate on running your new business with peace of mind.

Can you handle the extra traffic?
If there is anything worse that having no orders, it‘s having more than you can handle. This just produces dissatisfied customers. The average e-tailer gets 30% more orders in November and December. Make sure you can cope with the increase. This includes web hosting and extra staff for packing. 

Bill Stevenson, of www.spicesofindia.co.uk, advises ordering extra stock and advertising for temporary staff as soon as possible. “Last December visitors fell, but conversion rates tripled. We ran out of many Christmas gift sets and could not get new stock. This year we ordered a lot more.”

Sort your logistics
Make sure your logistics supplier can cope. To avoid missed deliveries, let customers select delivery to their work address. Robert Johnston, of www.gentlemans-shop.com, says: “We email customers their parcel tracking details and confirmation of delivery date. This dramatically reduces calls about deliveries.”

Last December visitors fell, but conversion rates tripled. We ran out of many Christmas gift sets and could not get new stock. This year we ordered a lot more

Seasonal promotions
“Don't be a bah-humbug! Decorate your site and get into the Christmas spirit,” says James Auckland at www.lunaspas.com. Find creative ways to mark the season. Put gift ideas on your homepage, and stock Christmas-themed items. Remember to change the pages on Boxing Day.

Last minute shoppers
Cite a final ordering date for Christmas delivery on every page, highlighted when the deadline has passed. Michelle Thomas, of One Red Sky www.oneredsky.com, a contemporary furniture business, says: “We have to allow seven days for delivery, so we liaise with suppliers closely. Last order dates are published on our site, and we send an email reminder to customers.”

Customers in a rush
Most online shoppers are in a hurry, particularly at Christmas. Help them out with a search capability that can match by category and price. Text-based searching is no help when you want a gift for less than £10 for your eight-year-old niece. Another aid for rushed buyers is a gift-wrapping service. It can also increase your margin.

Upsell to maximise the opportunity
Where gifts need additional items such as batteries, ensure they can be ordered together. Suggest similar gifts and incentivise extra purchases with offers like 'buy two and get one free'.

Thank regulars
“Thank your suppliers, as well as your regular customers,” suggests www.lunaspas.com‘s Auckland. Good supplier relationships can help resolve problems. Consider offering discount during January to suppliers and good customers.

Keep a sense of humour
Robert Johnston once had an irate customer repeatedly phoning on Christmas Eve, “about the delivery of his father‘s missing present. He accused me of ’ruining his Christmas‘. Just as we closed, he called to apologise. His sister had signed for the parcel, and dad‘s present was already wrapped and under the tree.”

Advertise January sales

Plan your January sale early. It gives ’value shoppers‘ a chance to clear all that dead stock for you. Finally, book a well-earned rest for February. You will probably need it. 

The vast majority of computer users feel social networking sites such as MySpace or Facebook can be used for business purposes and one in 10 (11%) already uses them for that end.

According to a survey by email research specialists emedia, 87% believe such sites can be used as a means of doing business with networking (65%), exchanging ideas (58%), getting advice (44%), recruitment (43%), research (35%) and selling (31%) the main possibilities.

The research showed that 81% of those surveyed use networking sites. The top five websites respondents have heard off are MySpace (89%), YouTube (88%), Friends Reunited (81%), Facebook (73%) and Bebo (51%). But the most popular sites among users were Friends Reunited (47%), YouTube (42%), MySpace (39%), Facebook (26%) and LinkedIn (19%).

Users of social networking sites visit these sites on a regular basis and almost half of them (48%) admit using these websites at work. Nearly one in four (24%) users logs in every day, with half of them logging in several times a day. Up to 45% of users log in at least once a week.

87% believe such sites can be used as a means of doing business with networking, exchanging ideas, getting advice, recruitment, research and selling the main possibilities

But there are also concerns about the security and reliability of personal data held on such sites, with nearly two-thirds (62%) saying they were worried about the safety of information.

It also revealed that nearly one in three (31%) users had already entered false information about themselves to protect their identity, which should also be of concern to someone thinking of approaching people using such sites for business reasons.

Half of users found advertising on social networking sites intrusive. Interestingly, 72% of users opted out of email newsletters from these sites and up to 93% opted out of email newsletters from selected third parties.

The Federation of Small Businesses has warned that small companies are failing to make the most of the potential of ecommerce due to concerns over online security.

According to the organisation, just 18% of small businesses have a transactional online presence and only 1% derives all their sales through the internet. Almost one in five small firms (19%) said they were concerned about credit card fraud, it added, although only 6% have actually been victims of this crime.

The FSB’s warning follows a recent report by the House of Lords on personal internet security which highlighted the growing problem of internet crime.

The small business lobby group is backing proposals made in the personal internet security report, including the suggestion that victims of online fraud should be able to report such crime to the police and receive a crime reference number in the same way as any other type of crime.

E-crime needs to be given the same status as crime that is committed against a bricks and mortar business. Only when this is accomplished can more small businesses benefit from having a stronger online presence

It is also getting behind proposals to force banks to take some responsibility for losses incurred as a result of electronic fraud, claiming many small businesses and online retailers are caught by charge-backs from card fraud which they often receive months down the line, even after they think a transaction has been successfully processed.

“E-crime needs to be given the same status as crime that is committed against a bricks and mortar business,” said David Croucher-Jones, FSB home affairs chairman. “Only when this is accomplished, by implementing the Lords recommendations, can more small businesses benefit from having a stronger online presence.

“Customers will also benefit from the increased choice and convenience that online security can bring,” he added.

The FSB is also supporting work to establish a national e-crime co-ordination unit with the Metropolitan Police and backs initiatives such as Get Safe Online, which are designed to create a safer online environment for businesses and consumers.

A third of IT managers in small companies have no formal training, according to research conducted by Loudhouse on behalf of database company FileMaker.

The study also revealed that 40% of managers in small firms have other responsibilities in addition to IT; a figure which rises to 50% in companies with fewer than 20 employees.

The most job role to be paired with IT responsibilities was director (41%), operations (36%), marketing (18%), finance (15%), sales (13%) and HR (13%). This suggests that in many cases it is the owner/manager himself who takes on the role of IT manager.

One of the most challenging issues for IT managers was managing the storage and cost of emails, the research suggested. This problem is made worse by the fact that 60% of employees use their email system as an ad hoc database, rather than saving contacts and attachments and storing them on a dedicated database.

Employees in small companies were also far more likely to have access to the software and network resources needed to create simple databases, with 71% of staff having such privileges in small firms compared to just 22% in larger organisations.

The role of IT manager in SMEs is undergoing a sea change: a typical IT manager is seen to be juggling multiple roles and learning ’on-the-job‘ rather than undergoing professional training

The functions most likely to go ’off-piste‘ and create their own databases were sales (61%), finance (51%), marketing (42%), operations (33%) and HR (31%). Not surprisingly, IT came last with just 25%.

“The role of IT manager in SMEs is undergoing a sea change: a typical IT manager is seen to be juggling multiple roles and learning ’on-the-job‘ rather than undergoing professional training,” the report concluded.

“Simultaneously, employees, particularly in small businesses, are encouraged to create their own databases and are given the tools to achieve this. With IT skills and resources more dispersed through the business, the result is that employees have created a wilderness of data files outside existing processes.”

1. Increase profit.
2. Minimise time wasted finding or replacing documents and records.
3. Significantly reduce operating and administrative costs.
4. Enable fast, efficient handling of customer enquiries.
5. Make it easy to find documents, particularly when being used by others.
6. Provide information to overseas clients or external entities without delay.
7. Maximise information security.
8. Provide an effective disaster recovery strategy.
9. Achieve consistent quality.
10. Provide proof that your company acts honestly and with integrity.

Where do SME‘s start?
Nowadays it‘s increasingly common for start-ups to consider information management needs from the outset. They implement ECM solutions as the cornerstone for their entire administrative processes. This is by far the best way to begin, not least because it eliminates the need for backfile conversion or staff re-training.
 

An SME‘s ability to anticipate and handle change is fundamental to its success, its pace of growth and ultimately its survival

However start-ups often have notoriously small budgets for these kinds of projects, and in the early days sales and marketing activities often take precedence. Nevertheless, SMEs must remember that administration can become a costly distraction that inhibits growth. By laying solid foundations early on SME‘s can focus on adapting to change. They must also select a solution that has the functionality, flexibility and scalability to accommodate future growth and previously unforeseen requirements.

There are a number of established, affordable, feature-rich solutions on the market that are specially targeted at SME businesses, so be sure to evaluate a selection prior to making a final decision. Visit exhibitions, meet the sales and development staff and watch demos. Some suppliers even offer short term trials, enabling you to try before you buy.

What if content management is already an issue?
If your business is already compromised by spiralling costs, wasted time and poor customer service, it‘s not too late to change, but you must act quickly. Some fear this change. Their perception is that it will cause organisational upheaval and resistance, but this is rarely the case.

Experience shows that the vast majority of SMEs have the foresight to create an effective file plan – albeit paper-based – right from the beginning. It is a system that generally works, and everyone understands it, but it‘s costly and time consuming to administer. The ECM solutions most suited to SME implementation simply map onto the manual file plan so that the concepts and parameters remain the same. They automate the file plan, as well as introducing powerful new tools to enable all content to be accessed, shared, traced, managed and archived instantaneously, from any PC via a web browser.

Who benefits?
ECM implementations benefit SMEs in all industry sectors. The number one benefit is increased profit. They also enable superior customer service at lower cost. Authorised staff, customers and suppliers have direct, round-the-clock access to accurate information, wherever they are located.  Day-to-day operational costs (faxes, photocopies, paper, time, phone calls etc.) are reduced and there are fewer administrative interruptions. ECM enables current employees to work more efficiently, thereby saving time and cost. As a result, recruitment decisions can sometimes be delayed. Last, but certainly not least, ECM solutions provide a detailed audit trail, assisting SMEs with regulatory compliance.

Closing thoughts
In order to survive and grow SMEs must anticipate and manage change effectively. Administration and information management often hinder progress, but the implementation of affordable, effective ECM enables business leaders to focus on core business, not content. Those who savour the change have most to gain.

VoIP makes it easier and cheaper for staff to work flexibly within the office or from home or remote locations, giving companies the opportunity to attract and retain key members of staff as well as to save money on heating, lighting and office space. Companies operating from more than one site can transfer calls between them over VoIP for free, as if between office extensions. And VoIP and converged networks can also drive improvements in customer service, with caller-identification technologies integrated with customer databases providing call-handling staff with instant access to customer details, and intelligent routing systems distributing calls to those staff best qualified to deal with specific customers or queries.
 

Trevor Evans, marketing manager for the small and medium business sector at Alcatel, identifies the three key reasons small companies are considering VoIP as cost savings on calls between sites, the potential for customer service improvement and the ability to offer flexible working.
 

“At the SME level the number of companies looking at an IP system has definitely increased, particularly as prices come down, but also because of these other drivers,” he says. “We find that in small firms about 25% of staff are mobile workers to some extent and mobility is more easily achieved with an IP solution.”

Alcatel‘s Extended Communications Server, which can be linked with the company‘s OmniPCX telephony system, enables this kind of mobility by giving remote workers secure connections into office networks to pick up emails and voicemails, view both their own – and their colleagues‘ – diaries, and access business information such as customer and supplier details. “It extends your communications, so when you‘re out of the office you get a similar level of service as you would in the office,” says Evans.
 

“You access the server securely through a web browser or a mobile phone browser and there‘s no special software needed,” he explains. “When you finish the web session there‘s nothing left on the PC. I can get all my calls wherever I am, and if I want to make a call I could connect back to my server, so I‘m not making the call from my mobile, but through my office phone and I‘m not incurring mobile phone charges or hotel phone charges.”

Access all hours
Chris Jagusz, chief executive at another communications service provider, Eurotel, agrees mobility has become a crucial motivator for firms looking at VoIP. “It also allows businesses to extend their working hours,” he says. “That can be useful when a customer does a lot of business online, meaning there‘s a reasonable amount of evening work, including phone enquiries. We‘ve got a [B2B] customer that uses it for service calls. The call comes in and can be directed to the technician at home, straight to the person who can sort it out. That‘s where VoIP really comes into its own. Previously this kind of flexibility would have been extremely expensive but now you just need a handset worth £100 or £200 and a broadband connection.”

Araminga is an example of a small business that is realising the benefits of VoIP. As a company that provides mobile phone car kit installation services to clients based across the UK, eight out of its 10 employees are almost always on the road. It originally considered purchasing a phone system that would have cost more than £4,000 but now uses Timico‘s VoIP for Business service that cost in the region of £300 to set up. This service is offered in conjunction with Nortel Networks and can run as a standalone IP PBX or function alongside an existing PBX.
 

Aside from the initial and ongoing cost savings, the main attraction is the system‘s call-routing capabilities, which can transfer calls coming into the office to mobiles, so staff need not worry about there being no one in the office to answer the phone. The system also enables several calls to be routed into the organisation simultaneously over the single analogue line in the office, using ADSL and VoIP.
 

’VoIP will be adopted everywhere when the price falls below the cost of traditional systems. That‘s something you can already see happening. Eventually, as manufacturers go over to it, customers won‘t ask for it. It‘s just what they‘ll get‘

The company started using the system in spring 2005. “We‘ve had a seamless transition and it‘s working very well,” says the company‘s managing director Steve Chrich. “I can work from home and log on as though I‘m in the office. If staff can‘t get in in the morning, they can just log in at home. If you want to add another person you just buy another phone, and if you wanted to decrease in size you won‘t have a big system to manage.” The company pays about £450 every month for line rental, internet connectivity and telephony. “It‘s increased profitability, productivity and capital cost outlay is kept to a minimum,” Chrich adds.

Lost in translation
Yet companies like Araminga are still in the minority. Often the reason is economic, with many smaller companies unwilling to write off existing analogue PBX systems, and a common suspicion that if the system‘s mobility-enabling qualities are not well used, it will take a long time to get a return on investment.
 

Vendors believe those doubters will be won over by the obvious customer service improvements IPT and converged networks can offer. “The real benefit would be unified communications for consistent and fast presentation to clients,” says Charles Davis, chief executive at the SAS Group. “It does give an edge to small business clients to be able to react and update clients fast, because it allows them to fight above their weight.”
 

But even if more small companies do start using VoIP, setting up a converged network is still often too great a leap.
The choice of supplier, and the level of detail required in planning the network infrastructure are crucial, warns Davis, who recommends using the assistance of a consultancy and/or a vendor-neutral systems integrator. “The problem with IP telephony is that the industry confuses what it is,” he says, stressing the value of investigating exactly what the different manufacturers and suppliers offer.
 

“A lot of small firms don‘t have a huge amount of time to investigate, so they get confused as to what they‘re buying and why. IP telephony is a pure call system that requires a lot of planning and investment,” adds Davis. “That‘s why there‘s a barrier, because you really need to pay someone else to put it in and maintain it. There is a bigger understanding required, because these products change the way you work and share information.”

The danger is that without adequate support, the economic part of the business case may be diluted by any unforeseen implementation and maintenance costs. “A lot of small businesses end up only buying half a solution, and they might not be able to set up the integration to the email server or firewall,” Davis explains. “There may be hidden costs in systems integration, staff training and refining business processes. Larger companies can get the skills they need in-house, but that‘s not an option for smaller businesses.”
 

Without an understanding of how convergence changes the company‘s use of IT, there is also a danger of being caught unaware by the knock-on effects. “One thing that catches a lot of people out is data growth, with voicemails, faxes and emails all coming into one inbox,” explains Davis. “Suddenly their back-up systems can‘t cope.”

Outsourcing option
One way to avoid some of these challenges is to outsource some or all technical functions. BT added VoIP to its business broadband services 18 months ago and has now launched a dedicated office extension service aimed at organisations with 10 to 50 employees, with a single broadband line used to run up to 10 extensions. “It would be good for anybody who doesn‘t want to put in a capital outlay, who‘s moving premises or has a particularly flexible workforce,” claims Chris Lindsay, general manager, broadband, VoIP and software services propositions at BT.
 

Among BT‘s customers is law company Woolley & Co, which specialises in family and divorce law. Its 11 lawyers all work from home. “Communicating with each other and with clients is clearly a big issue because there‘s no office to stick a physical switchboard in,” reveals Andrew Woolley, founder of the company.
 

“All our software and files are server or web-based. Because we work as a virtual firm and our clients want us to be contactable anywhere, we need our information with us,” he adds. “Also relevant is that we get a lot of clients from abroad – Brits or people married to Brits – who find us on the web.” So one of the most important reasons Woolley & Co was interested in VoIP was a need to reduce the amount of money being spent on international calls. “The intention is that, wherever a lawyer is, they can answer queries and have all the information at their fingertips,” says Woolley. “We will try to be totally paperless which for a law firm is a bit of a challenge.”

The company is extending a trial of VoIP that started in the spring. Security was a key concern. “We were worried about security issues but that‘s why I use BT, because my insurers and the Law Society don‘t ask so many questions if we use a well-known provider as if we used someone they‘d never heard of,” explains Woolley. “There‘s also the fact that we represent some very well-known people going through divorces.”

Those security concerns have now been overcome, as have worries over call quality. The one significant teething problem, a slowing of internet speed when a VoIP call is being made, has been put down to the relatively slow 2MB connections the lawyers currently use as part of their existing BT service package, and Woolley is confident this problem is temporary.
 

Of course, IP telephony and converged networks are still not suitable for every small business. “If you‘re single site and you just use your phone system to make and receive phone calls, you don‘t want to integrate it with any other applications and you don‘t have a great deal of mobility, then it would be a mistake to adopt all these new technologies,” admits the SAS Group‘s Davis.
 

But eventually the day will come when the economic advantages of IP telephony become too compelling and outweigh the initial setup costs. “VoIP will be adopted everywhere when the price falls below the cost of traditional systems,” claims Eurotel‘s Jagusz. “That‘s something you can already see happening. Eventually, as manufacturers go over to it, customers won‘t ask for it. It‘s just what they‘ll get.”
 

The biggest IT issue for small companies is being able to cope with the day-to-day task of running an effective IT system, according to research released by Connect.

The organisation found that 37% of directors and IT managers said regular IT hassles were their biggest problem, followed by IT security at 32%.

Security was found to be more of a problem for larger companies, with 35% of firms with fewer than 50 employees listing this in their top two IT headaches, compared to just 27% of larger companies.

A lack of understanding of basic IT issues by staff was also cited by 30% of respondents, although this was less of a problem in smaller firms.

Three in 10 (30%) small companies cited cost in their top two biggest issues, compared to just 22% in larger firms.

“Much of the IT debate currently revolves around what we’d call ‘big ticket’ items,” said Mark MacGregor, Connect’s chief executive. “Concepts like mobile working, Web 2.0 or open source software dominate the news agenda for IT.

The IT supply industry needs to assess this kind of discrepancy carefully and to find better ways to ensure that small companies have the internet and email tools they need to run and expand their businesses

“While we’re certainly not dismissing those concepts, the reality is that for the entrepreneurs and owner-managers that drive much of the innovation and growth in our economy, the issues are really much simpler,” he added.

“They just want robust, cost-effective IT systems that actually work. One of the challenges we need to address as an industry is how we can deliver more of that type of IT to this vital part of UK plc.” 

Smaller companies were also more likely to complain about the amount of email/internet downtime they suffered, he added. This was cited by 24% of small companies compared to just 12% of larger ones.

“The IT supply industry needs to assess this kind of discrepancy carefully and to find better ways to ensure that small companies have the internet and email tools they need to run and expand their businesses,” added MacGregor.

The new law, which comes into force in April 2008, will make it much easier for companies and owners to be convicted of manslaughter for work-related deaths and injuries.

But Croner claims many companies have not been made aware of the fact that if corporate manslaughter charges are brought against them, they will have to make that knowledge public, which could ruin their reputation and cost them staff, suppliers and customers.

“Only recently over half of all employers (52%) admitted to being unprepared for the new law, and from our interaction with businesses we know there’s even less awareness of the publicity clause,” said Stephen Thomas, a safety technical consultant with Croner.

This will no doubt affect recruitment and retention rates, as well as maintaining and securing new business and relationships with contractors. No one wants to work for or recruit the services of a ‘rogue’ company

“This specific part of the law puts unprepared businesses at risk of damaging their corporate reputation by highlighting their laissez faire attitude to health and safety,” he added.

“This will no doubt affect recruitment and retention rates, as well as maintaining and securing new business and relationships with contractors. No one wants to work for or recruit the services of a ‘rogue’ company.”

Croner offers the following tips to help comply with the new legislation:

• Make sure that health and safety management systems accurately reflect the company’s activities

• Actively involve senior managers to act as motivators for all levels of management (by maintaining their interest through participation) and for employees (by demonstrating management’s commitment to their wellbeing)

• Allocate health and safety responsibilities to all levels of staff to create a sense of ownership regarding the companies overall health and safety standards

• Encourage communication between all levels in spoken, written and visible pathways

• Implementing health and safety measures need not be costly: it can save you money not only in the avoidance of fines and penalties but in tangible business benefits such as increased performance, reduction in lost time, reduced insurance premiums and a healthier, happier workforce

Small business owners are being urged to make preparations now for new laws that will come into force from 1st October.

As part of a new government strategy to introduce legislation twice a year, three major initiatives that will affect small businesses will become law, warns John Davies, head of law at ACCA (the Association of Chartered Certified Accountants).

“October 1st represents the second key date of 2007 for new business legislation, under the government’s relatively new system of storing up new workplace measures for release just twice a year,” he said.

Of most concern to small company bosses will be another rise in the level of the minimum wage, which will increase to £5.52 an hour for workers aged over 22. Those aged between 18 and 21 will be entitled to a minimum of £4.60 while 16-17-year-olds will receive at least £3.40 an hour.

October also marks the start of a phased introduction of the new holiday ruling, which will eventually see every employee in the UK entitled to a minimum of 28 days’ annual leave a year. This is designed to end the practice used by some companies – particularly in the entertainment and service industries – of counting the eight Bank Holidays every year as part of the current minimum entitlement of 20 days. Staff will eventually be entitled to a minimum of 20 days plus the eight Bank Holidays.

Of most concern to small company bosses will be another rise in the level of the minimum wage, which will increase to £5.52 an hour for workers aged over 22

From October 1st, the statutory minimum leave entitlement will increase from 20 days to 24, before rising further to 28 days in April 2009. Companies will still be able to offer payment in lieu of the additional holiday entitlements but only up to April 2009. The new regulations will be extended to part-time workers on a pro-rata basis.

Small business owners will also be affected by elements of the new Companies Act that will come into force in October 2007. These include new statutory rules on the responsibilities of company directors which will have important implications for directors of companies of all shapes and sizes, says Davies.

“The new act takes the most important common law principles and sets them down in legislation,” he says. “The intention is to make the law more accessible to non-experts and in the process save companies the expense of buying in specialist advice from outside.

“The main common law-derived duties now set out in legislation include the fact that directors must respect the terms of their company’s constitution and act within their powers, they must avoid conflicts of interest and should not accept benefits from third parties,” he added.

The biggest gripes among office workers have been revealed as bad manners, long and pointless meetings and office politics, according to pan-European research commissioned by printer manufacturer Canon.

The research found that long and pointless meetings were the biggest annoyance in Europe while in the UK and Ireland office politics took the top spot.

Eight in 10 office staff in the UK and Ireland have witnessed visible acts of displeasure by colleagues, with the most common causes of staff losing their temper being spoken down to by a boss or work colleague (61%). PC downtime and leaving paper jams in printers also featured prominently, cited by 24% of staff.

The survey of 3,000 office workers also revealed the most stressful administrative tasks, with collating documents coming out as the most tedious, cited by 27%. This was followed by searching for files on the company network (23%), filing expenses (16%) and submitting holiday requests (10%).

There is no doubt that office rage is on the increase, but a range of initiatives such as crisper meetings or interpersonal kindness could reduce stress levels

One in 10 office workers admitted to wasting three hours a day on unnecessary admin, with four in 10 spending at least two hours on such tasks. When asked what they would spend this wasted time on if they could improve office productivity, the resounding response was leaving the office on time (39%) followed by more time for personal development (27%) and taking a proper lunch break (16%).

“For people to feel less stressed in the office, they need to feel more in control of their working life and working environment,” says psychotherapist and occupational stress expert Lucy Beresford.

“When this control is lost through external events such as a rude boss, sitting in a pointless meeting or a printer jam that no one wants to fix, it doesn‘t take much for the average office worker to snap.

“There is no doubt that office rage is on the increase, but a range of initiatives such as crisper meetings or interpersonal kindness could reduce stress levels.”

The number of insurance claims for crimes committed against businesses in the period between April and June 2007 rose by 11% on the same period in 2006.

According to Axa’s business crime survey, the amount of malicious damage claims rose by 28% while the number of arson claims rose by a staggering 43%.

Instances of theft fell by 2%, the survey revealed, although this remains the most common claim and accounts for over half (53%) of the total.

“What this survey continues to highlight is the increasing amount of crime related to business,” said Gareth Elliott, policy adviser at the British Chambers of Commerce. “Even though businesses have taken measures to reduce crime, they are fighting an ongoing battle that is becoming increasingly difficult to wage. 

“Until there is a reliable definition of business crime with which national police forces can record crime statistics, the true extent of crimes against businesses will not be fully known,” he added.

Even though businesses have taken measures to reduce crime, they are fighting an ongoing battle that is becoming increasingly difficult to wage

Despite the rising level of crime, the proportion of insurance claims that were made during this period due to crime actually fell in 11 of the 15 cities measured by the index.

The hotspots for crime against businesses are Bristol where crime accounted for 25.4% of claims – a rise of 5.2% from last year – and Cardiff, with figures of 24.3% and 3.6% respectively. At the other end of the table, just over one in 10 (11.2%) of claims in Newcastle were due to criminal activity.

“Criminal activity is a growing problem for businesses,” said Doug Barnett, risk manager at Axa. “So far this year, we have dealt with 10% more crime claims by businesses than in 2006 and around one in every six claims is crime-related. 

“We believe that businesses are making more of an effort to protect themselves from crime and are pleased to see that incidences of theft have actually decreased this quarter but acts of petty vandalism, which can be more difficult to guard against, are increasing dramatically.”

Companies are being warned to expect higher than usual levels of staff absence as children return to school and the weather takes a turn for the worse.

Research by Lemsip into how people deal with colds and flu claims this time of year is particularly risky for staff, and parents in particular.

“Back-to-school season is a bad time of year for UK businesses in terms of sickness levels, as germs are spread among the new school intake, which are then passed on to mum and dad,” the research claimed. “One in 10 parents is likely to have caught a cold from their offspring as soon as the school gates opened for the new term.”

The survey discovered that 59% of employees are ’gladiators‘, who will attempt to battle on regardless despite feeling ill, and 32% ’hibernators‘, who will phone in sick at the first sign of a sniffle.

Salespeople and office admin staff are the most likely to take time off work when struck down by a cold or the flu, the research suggested, with 22% and 18% respectively admitting their tactic is to hide themselves away for fear of spreading the virus around the office.

One in 10 parents is likely to have caught a cold from their offspring as soon as the school gates opened for the new term

Nearly half (45%) of those questioned said they rarely took time off work, with worrying about letting colleagues down cited by 43% and missing an important meeting by 29%.

Those working in the emergency services are the most likely to feel they are letting their colleagues down by failing to arrive for work, cited by 68% of respondents in this profession.

Tradesmen are the least likely to take time off work due to a cold or flu, the research discovered, with 76% saying they would battle on regardless. This is likely to be due to the high number of self-employed tradesmen who are not entitled to any form of sick pay for taking time off work. Teachers and others in the education sector followed, at 71%.

The survey also highlighted an emerging trend among UK workers for so-called ’HUDDLE‘ days, standing for ’hide under duvet, do little else‘, at the tail end of a bout of flu. The research claims this is common practice for 25% of public sector workers and 20% of private sector employees.

Such a habit could increase the average number of sick-days taken significantly and increase the cost of absence to UK businesses.

We need to address the reasons entrepreneurs are shying away from using other directors as they can provide a cost-effective way of developing these businesses beyond the often-limited horizons of the founders

Small business owners want to take key decisions themselves and reject the idea of having a board of directors or non-executive positions, according to academic research published by ACCA.

The research carried out by Colin Coulson-Thomas, professor of direction and leadership at the University of Lincoln, discovered that very few small companies even had working boards and the handful of non-executive directors that did exist were usually relatives.

Those who acknowledged that additional directors could help fill existing skills gaps did not believe they would be able to afford them, the study added.

“Directors in many cases only tended to act as directors when required to do so, at AGM time, or when approving the audited accounts,” said Coulson-Thomas. “But in the absence of independently-minded non-executive directors, whose duty is to the company rather than particular individuals, many found it difficult to step up from discussion of short-term operational issues to provide strategic direction.

“What was most striking – and sad – about my findings was that virtually no entrepreneurs were able to sum up succinctly what was special about their business,” he added. “Some of them had real potential, which independent advice in the shape of new directors could help them realise, but they could not see it.”

The research also suggested that small business owners were more concerned with getting through the next couple of years than formulating a strategy for the business. Company boards and non-executive directorships were seen as an issue for larger companies only.

“This valuable research shows that small firms are missing out on the experience, objectivity, fresh thinking and skills that effective boards can provide,” said Paul Moxey, ACCA head of corporate governance and risk management.

“We need to address the reasons entrepreneurs are shying away from using other directors as they can provide a cost-effective way of developing these businesses beyond the often-limited horizons of the founders.”

’Birmingham International airport is the UK‘s second largest airport outside London and has daily direct scheduled flights to over 100 destinations throughout Europe, North America, Asia and the Middle East‘

The region is also home to two airports connecting the West Midlands to the world. Birmingham International airport is the UK‘s second largest airport outside London and has daily direct scheduled flights to over 100 destinations throughout Europe, North America, Asia and the Middle East, while Coventry Airport has an established reputation as a major centre for international freight and courier services and is home to the Parcelforce worldwide, national and international parcel distribution hubs.

As well as a highly skilled workforce, the region also offers over half a million people currently in education. The region has 13 higher education establishments, of which 10 are universities, plus eight science parks and two of the UK‘s top five business schools; all of which work closely with local industries to share expertise and research.

It is also home to the largest and fastest growing business and professional services sector outside London with over 100,000 people employed in Birmingham alone, and boasts a rapidly expanding IT sector, growing 20% every year and employing 57,000 in 3,000 companies. The West Midlands is also one of the leading telecommunications centres in the UK.

Life outside work
From the city of Birmingham and its iconic buildings at the heart of the region to Hereford Cathedral and the Ironbridge Gorge, the West Midlands offers a diverse range of cities and eclectic mix of towns and the ideal balance between urban and rural environments. With the rolling beauty of the Malvern Hills to the world-class shopping facilities of Birmingham; the magic of Shakespeare‘s Stratford to the industrial heritage of the Black Country; and the culinary offers of the Balti belt to Ludlow‘s Michelin stars, the area offers a diversity of landscapes, people, food, drink and attractions.

As Britain‘s second city and the urban centre of the West Midlands, Birmingham is a modern and vibrant metropolis. A shopper‘s paradise, the city is home to the Bullring, the Mailbox and the landmark Selfridges, attracting millions of shoppers to the region every year. The National Exhibition Centre, located on the outskirts of Birmingham, is the busiest exhibition centre in Europe, staging more than 180 exhibitions each year. Visited annually by 4m people, the centre has the ability to host large-scale international trade fairs as well as smaller specialist shows.

With a thriving, diverse and dynamic business base, the region is the ideal location for new business start-ups and for established businesses to expand. High technology companies sit alongside resurgent manufacturing enterprises with internationally famous names like Cadbury, JCB and Wedgwood continuing to prosper in the region. An impressive infrastructure and a ready-made skills base have led companies like Fujitsu, Vodafone and Muller to relocate to the area where they have enjoyed strong local support.

The West Midlands was the birthplace of the industrial revolution and it has a long tradition of innovation. Today the region has a buoyant high technology base and great emphasis has been placed on allowing its technology community to retain its international edge. Three ’technology corridors‘ have been established to build on and nurture the existing regional technology strengths in targeted key industries. The West Midlands really is at the heart of it all, creating an environment in which business and people can prosper and flourish.

 

’If done correctly, you could have a situation where tenants in part of the property can effectively be paying the mortgage for you. That means that your business itself is living rent-free‘

business owners might consider taking out a mortgage rather than renting office premises. “A commercial mortgage may be the only option available to a business owner with a poor credit record and possibly county court judgments served against him,” he suggests. “In addition, some types of businesses may be too high a risk for the conventional fund providers. Some commercial mortgage providers now add greater weight to the individual‘s ability to repay rather than the person‘s past record. Typically an acceptable form of security would include retail shops, factories, warehouses, office buildings, hotels, land, pubs and farms.”

Because the range of mortgage products on offer has grown so significantly, this has become an environment in which you are far more likely to find a solution that suits your business than would have been the case just a few years ago. “Multiple new specialist business mortgage lenders have now entered the marketplace such as Commercial First,” adds Moore from Mortgages for Business. “The days of your local high street bank being your only option in terms of finance are gone.” He claims that it can make sense to have your day-to-day banking and mortgage with different providers because having all your products with one lender means that company has total transparency over your portfolio and could use that information when deciding whether to lend money and, if so, at what rate.

Why the sudden interest from lenders in this sector? According to Fraser Mackay, head of commercial marketing at Barclays Business Banking, research suggests that up to 10% of firms with a turnover of more than £50k hold a commercial mortgage. In addition, figures suggest that commercial mortgages are not typically ’small ticket‘ loans: 63% of loans are for over £100k, while 41% are in excess of £200k. In addition, against a backdrop of rising levels of insolvency, lenders are looking at ways of stretching their business into longer-term arrangements, easing the short-term cashflow issues that many of their customers face.

For many owner/manangers of small businesses, their only prior experience of mortgages is restricted to their own home loan. But the NACFB‘s Cann suggests
that commercial mortgages should not necessarily be viewed in the same way as their residential counterparts since they can also be used as part of a much more bespoke funding vehicle. “A commercial mortgage as a source of funding doesn‘t need to be taken in isolation,” she explains. “A good broker will have a look at the whole picture of the business and design a package that suits that individual business.

 

’Some of the new specialist lenders take a more flexible approach to the marketplace. Firms with short trading histories or imperfect credit are now fundable, as are companies with limited accounting information‘

“For example, where a small business owner/manager might believe they need a commercial mortgage with an 80% loan-to-value, a broker might look at the deal and consider the possibility of leasing arrangements on some of the equipment, or a factoring and invoice discounting arrangement to help with cashflow,” she says. “This could free up more capital to allow the business to pay a larger deposit and, in turn, secure a lower rate for its commercial mortgage. At the same time, the flexibility of the business‘s finances has been increased.”

Safe as houses?
Property has long been seen as a fairly safe long-term investment, so could there be merit in a business looking beyond simply owning its own premises and buying additional commercial property to let for additional income? Stuart Barton, president of the NACFB, certainly thinks so. “If done correctly, you could have a situation where tenants in part of the property can effectively be paying the mortgage for you,” he explains. “That means that your business itself is living rent-free.”

Taking out a commercial mortgage for an additional property can also assist with the lending process itself, he adds: “If you can prove a tenant is involved in your proposal to purchase a property then it can certainly help the lender to get his head around the proposition.” The latest report by the Royal Institution of Chartered Surveyors revealed that rental yields on commercial property has remained stable, with offices currently showing the best performance, although even in this sector the rate of increase has slowed down.

But outside the office market, rental growth was muted, at 2.7% for retail property and 1.4% for industrial space, and with interest rates likely to rise still further before the end of the year, this is not an investment decision that should be entered into lightly. It‘s also worth noting that the last Budget announced that business tax relief on empty commercial properties would be reduced, so any business owner investing in buy-to-let commercial property needs to be confident that it is highly rentable.

However, the current consensus is that – unlike other forms of investment – property will at least hold its value, even if it won‘t necessarily bring the kind of return that the residential market has seen in recent years. A well-advised purchase could just be the key to the long-term stability of a business‘s operation. “Any business looking to purchase its premises would be wise to seek the advice of a broker before taking the plunge,” says the NACFB‘s Carr. “As with many things, it‘s usually better to shop around to secure the best rates and a broker can take the legwork out of that.”
 

Small firms that are prepared to offer flexible and home-based working part of the time could benefit from working mothers who are keen to get back into the job market.

According to a recent survey by workingmums.co.uk, many mothers feel employers are indifferent to their family commitments and 90% said they found it difficult to find flexible work.

With many smaller companies struggling to recruit decent staff in key areas, this research suggests firms that are willing to be flexible over working arrangements could be attractive to well-qualified and reliable employees.

The survey showed that mothers are hungry for work and often have an impressive range of skills and experience to offer employees but feel that there is a distinct lack of opportunities to utilise them

“I would have been surprised if the survey had found that working mothers were finding things easy,” admitted Mike Emmott, employee relations advisor at the Chartered Institute of Personnel and Development. “It’s a tough job and it always will be.

“But I’m surprised that the responses were not more positive. There has never been a time when employers were more aware of the benefits of offering more flexibility to workers,” he added.

Over half (55%) of the respondents to the research said they would rather work from home with just 6% saying this did not interest them. But 39% said they would like to work from home only some of the time, suggesting that companies requiring staff to be in the office at times yet prepared to offer flexibility at other points could gain.

“There’s a huge pool of talent and years of experience that could be tapped should the right jobs be made available,” said Gillian Nissim, founder of the workingmums.co.uk website.

“The survey showed that mothers are hungry for work and often have an impressive range of skills and experience to offer employees but feel that there is a distinct lack of opportunities to utilise them.

“Things are improving but there’s still a perception that there’s a reluctance to offer flexibility,” she added. “We need employers to think more creatively and to get beyond the mindset that a job requires someone to be in the office five days a week.”

Starting-up and working in a family business can be challenging but can also bring valuable benefits when compared to other businesses, from greater trust between staff to a stronger commitment to making the business a success.

As well as the advantages mentioned above, family businesses can often have a more stable vision, given their desire to build a business for future generations. Family members may also be more willing to make financial sacrifices for the sake of the business, for example, deferring wages during a cashflow crisis.

However, without careful management the business can descend into conflict, often due to poor communication or clashes over pay. To help you run or start-up your family business here are a few factors to bear in mind:

Get talking
Communication can be an issue, so make sure you have good communication channels in place. Family members have a tendency to assume they know what the other feels or wants and personal resentments can become business conflicts. Encourage an atmosphere of open discussion where issues can be voiced in a safe, blameless environment

Create balance
Integrating non-family employees with the family can be tricky. They may feel uncomfortable and/or outnumbered. Develop a mechanism for providing constructive feedback to help all staff, family and non-family alike, to feel motivated and involved. This could be regular staff meetings or an internal newsletter, for example

How best to pass on your business to the next generation will be one of the biggest challenges you face. You need to make the right decisions for you, your family and your business

Get an outside view
Family businesses can have a tendency to get too close to the day-to-day running or the business and miss the wider picture. It is always advisable to have someone, perhaps a consultant, to advise and act as a sounding board. Think about appointing an experienced adviser or non-executive director to provide an impartial viewpoint and help prevent emotions from clouding business issues

Make the commitment
To avoid conflict, draw up a family-business constitution. The constitution or family creed should include the business strategy, objectives and ethos, management structure and dispute-resolution procedures. It should also cover succession planning, retirement, training and the appointment and rights of all staff, family and non-family alike

Paying the people
Remuneration can be a cause for conflict for all. Relatives being paid more that other staff for no valid business reason can cause resentment. Set out a remuneration policy which will help prevent conflict and resentment, ensuring fair treatment of all

Succession planning
How best to pass on your business to the next generation will be one of the biggest challenges you face. You need to make the right decisions for you, your family and your business, effectively balancing the needs of all three. Your plans should include your key goals for the succession process, a timetable of the transition stages, from identifying a successor and then full transfer of responsibilities and a contingency plan

The rewards of starting up your own business can be great, but think carefully if you have the attributes and right sort of personality to cope with going it alone

There are different ways to start a new business. These vary from self employed and partnership to private and public limited companies. There are a lot of important points you need to consider when thinking about starting your new business. There are also a lot of important questions you need to answer while considering your future enterprise. These questions usually include:
 

• What kind of business should I be?
• What do I call my business? Do I break a trademark rights or copyright with my proposed name?
• Do I need a license?
• How the trading laws affect me and my business?
• Statutory insurance requirements
• Keeping business records
• Annual requirements
• Tax liabilities
• and many others

Coddan CPM Ltd is here to help new entrepreneurs to make the most important decisions on the structuring of their new business operations and help with the annual statutory requirements: from annual filings with the Companies House and Tax Office to preparation of resolutions and minutes for day-to-day operations.

At Coddan, business specialists and consultants also can assist with the following queries and matters:
 

• Banking and finance transactions
• Intellectual property – we advise on exploitation and/or realisation of intellectual property including patents, trade marks, copyright and industrial know how in conjunction with the firm's intellectual property group; we also advise on confidentiality issues, restrictive covenants and computer software and hardware licensing
• Commercial agreements including agency, distribution and management agreements
• Shareholders agreements – we have the expertise and knowledge of many industries to recognise what our clients require;
• Internet start-ups. Web site design and development
• Financial services regulations
• Company incorporations for both local and foreign interests – we offer a fast, efficient and tailored fixed fee service for company incorporations
• Apostille legalization, notarial and consulate certification of the documents 
   

It brings together employers, through their Sector Skills Councils (SSCs), who can identify and articulate their skill needs, with college principals who have the expertise to deliver the training to meet those needs

Employers and colleges have joined together to form a new initiative which will attempt to create a ‘demand-led’ approach to skills training.

The alliance between the Skills for Business network and the Association of Colleges will create 14 new employer/college sector skills groups led by a college principal to develop skills ranging from basic writing to foundation degrees and diplomas.

“It brings together employers, through their Sector Skills Councils (SSCs), who can identify and articulate their skill needs, with college principals who have the expertise to deliver the training to meet those needs,” said David Hunter, chief executive of Lifelong Learning UK and chair of the skills coalition.

The joint initiative has come about as a result of the number of employers complaining that new recruits are unprepared for the world of work, despite having qualifications from schools, colleges or even universities.

“Employers have been telling us that despite the juggernaut of qualifications, applicants aren’t coming through with the skills they need,” said Tom Bewick, chief executive of Creative & Cultural Skills.

“This is why industry and education really need to work together. This flagship group provides the direct link between supply and demand. We can now help to deliver education and training that is truly responsive to the needs of employers.”

The alliance has now been officially endorsed by John Denham, secretary of state for innovation, universities and skills. “The government’s ambition to make this country a world-class leader in employment and skills by 2020 is being realised,” he said. “We are giving employers a powerful voice in closing skills gaps so they can control the design of training and its delivery, where and when employees need it.”

Companies can minimise the negative effects the recent stock market turmoil have on their staff by educating employees about the financial markets, the Chartered Institute of Personnel and Development has suggested.

According to Charles Cotton, benefits adviser at the CIPD, companies of all sizes can cut down on stress and depression caused by concern over share plans and pensions pots by educating them about the long-term nature of such plans and the tax-advantaged status they enjoy.

Reducing staff angst over such matters can ensure companies remain productive and prevent a rise in sickness absence at a time when they need to be performing at their maximum levels of efficiency.

Employers could also extend such financial training to cover mortgages and savings, said Cotton. “This comes against a backdrop of increasing mortgage costs for many workers, with some tempted to stop saving for their future by focusing on their mortgage repayments,” he said.

By providing financial education, employers can help their staff acquire the financial knowledge that will allow them to shop around for the best mortgage deals allowing any savings to be redirected

“By providing financial education, employers can help their staff acquire the financial knowledge that will allow them to shop around for the best mortgage deals allowing any savings to be redirected towards their savings.

“Providing employees with advice and education about financial matters will help them make more informed decisions about how to save for the future and deal with concerns when they arise,” he added.

“Better financial awareness will also help minimise the risk of people making inappropriate benefit decisions subsequently blaming their employer and impacting negatively on employee engagement, employer brand and possible litigation.”

In these days of cheap flights and staff shortages, many companies are realising the benefits of taking their team away as a means of rewarding them for their hard work and building a bit of team spirit.

But if left to spiral out of control such trips can easily end up costing far more than you initially envisaged and can even have the opposite effect on company morale if behaviour gets out of hand.

Jonathan Miles, corporate sales director at corporate events and teambuilding company Brilliant Weekends, offers the following tips for small business owners looking to create a truly unique experience:

What do staff want?
Find out what interests staff, where they’ve been before, what excites them and what their expectations are. Look at their feedback and take it on board: no one wants to be dragged away from their personal lives on a weekend for something they don’t want to do

Budgetary research
Do this before giving the game away. Don’t drop hints about Barbados when your budget will only stretch to Barcelona as it will only disappoint

Get organised
Plan in advance. Some corporate weekend breaks are booked a year beforehand. The earlier you book, the better rates you will get and more choice due to availability. Last-minute organising can result in panic-buying which means going with whatever you can get and disappointing your employees

Pay attention to detail
Mistakes mean unwanted stress and often expense. Something as simple as misspelling a name on airline tickets can result in £100 per ticket name changes. Booking double rooms rather than twins can also cause embarrassment and costly onsite changes

Something as simple as misspelling a name on airline tickets can result in £100 per ticket name changes. Booking double rooms rather than twins can also cause embarrassment

Communicate
If you’re organising an incentive, get people excited. If it’s a surprise, email weekly clues to them. If they know what’s going on, communicate as much detail as possible to make them look forward to the trip and feel that the hard work is being done for them and all they have to do is sit back, relax and enjoy

Know your limits
Decide from day one how many people are going or what targets they need to meet to participate. Changing the goalposts leads to increased costs, last-minute changes and some people feeling resentful that it’s not such a massive achievement to win the trip if the receptionist is being brought along for the ride. Agencies sell packages based on numbers so be aware the price can change considerably if you change your numbers

Shortlist destinations
It’s not all about the budget. You should also be aware of weather conditions, language barriers, travel times, public/school holidays, local customs and security risks. Overlooking something like a bank holiday weekend can have a huge impact on your weekend, particularly if everything is shut

Site inspection
Try and budget for an organiser’s inspection to check out the destination six months in advance. Not only is it good fun, it’s the best way to decide whether a destination is or isn’t suitable for your group. You will also feel far more equipped to advice your group what they are letting themselves in for and will be able to suggest great points of interest

Flights
It can be a nightmare when booking for one, let alone trying to organise a whole group. Check flight schedules before deciding on your destination. Low-cost airlines aren’t always low-cost once you take into account the extras such as taxes and in-flight meals so it can be better to book with groups agencies, which are often able to hold prices and don’t require names until sometimes two weeks before the travel dates. Ensure your tickets are 100% checked and accurate

Visas visas visas
Check with your employees in advance if they will need them, how easy it is to get them in time and how you can help them. Your employees may feel discriminated against if they can’t participate in the annual jolly due to their nationality

Dietary requirements
If you are organising meals find out if anyone has allergies or dietary requirements, if you know in advance it can be accommodated

Alcohol
Often an essential part of the trip but a costly one. Decide if you are offering open bars to employees or if guests will be required to pay for themselves. Once out of the office some people can be tempted to get carried away so you may want to consider limits

Get help
It is unrealistic to think one person from the team can organise and manage a trip for 150 employees. Use an experienced agency who will help onsite and take some off the pressure. You will also receive better rates and support when challenges arise, as they inevitably always do. It is also advised you use UK-based agencies so you can easily communicate and have somewhere to go if you are unsatisfied. After all, everyone (including you) should be able to enjoy themselves and not spend the entire trip dealing with individuals crises

Without a rigid definition of what is and what isn‘t green to ease confusion; consumers will never know the difference between clean energy and what they are actually buying into when they pay for more expensive tariffs

This clouded information given to consumers by the large suppliers only intensifies the confusion, powering an ongoing sense of distrust due to customers simply not being factually aware of what they are buying in comparison to what they are being assured they are paying for in cleaner energy tariffs.

Supposedly, making the decision to switch to green energy should be one of the simplest ways for businesses to reduce their environmental impact. However, the report indicates that this is most definitely not the case. So far, less than 1% of businesses in Great Britain have signed up to greener tariffs.

Prices are expected to rise as the energy industry strives to meet government targets on CO2 reduction. It is of paramount importance for energy providers to produce new, cleaner energy to meet these targets because green energy is never going to be cheap. However, without a rigid definition of what is and what isn‘t green to ease confusion; consumers will never know the difference between clean energy and what they are actually buying into when they pay for more expensive tariffs.

With wholesale electricity prices which are forecasted to rise, as will energy tariffs which will contribute to an uncertain time ahead for suppliers and consumers alike.

Graham Paul, Sales and Marketing Director, E4B comments:

’From many suppliers, a green energy tariff isn‘t likely to mean the most cost effective for business customers. SME‘s shouldn‘t be the first in the queue for purchasing green energy, as only 10% of energy available within the business market is renewable. For now, allow bigger businesses foot the bill for green energy tariffs until there is a more affordable alternative in place which will enable SME businesses the luxury of buying green. The only environmentally valuable action small business customers can take is to become clever with energy efficiency and look to keep their bills low‘.
 
Advertising campaigns by larger suppliers and regulators alike only encourages the confusion; it is important to provide a clear and reliable system of grading in order to bridge the knowledge gap between which tariffs consumers purchase and the quality of energy they receive.

It should not be a shock to learn from recent reports that more renewable energy has been sold than actually produced; thus further instilling that not all is as it may seem when it comes to knowing the difference between the tariff itemised on your bill and the energy which switches your lights on.

The safe choice for SMEs is to focus their green intent onto energy efficiency that they can deliver now until more renewable energy is created and correctly defined. Independent supplier, E4B‘s (electricity4business.co.uk) energy efficiency papers detail exactly how your business can help the environment by regulating the amount of energy you use.
 

However, to suggest that these same businesses should switch to green energy and pay even more for the privilege in order to right the wrongs of big business, the real polluters, would be imposing an unfair burden on those whose bills have already doubled since 2005.
 

Green energy, no doubt, will have its day and rightly so. But in times where barely 10% of energy is generated from renewable sources the responsibility to embrace this in the first instance clearly lies with big business. By doing this they will help stimulate the market creating the economies of scale necessary to produce this energy at more competitive rates for all. When the supply gap shortens and the cost of producing green energy drops considerably, then is the time for all businesses to consider the switch.
 

There’s much that can be done to reduce energy consumption, for example, with surprisingly little investment

That’s not to say that small and mid-sized businesses should sit on their laurels waiting for this to happen. There’s much that can be done to reduce energy consumption, for example, with surprisingly little investment. Buying your energy from a low-cost supplier such as electricity4business will provide you with the savings necessary to invest in energy saving devices which over time will help reduce your carbon footprint cutting your bills still further. To quote from Lord Jones of Birmingham, known to many of you simply as Digby Jones,‘The cleanest power station is the one that you do not have to build –
our first priority is to find ways of using less energy.’
 

The lengths entrepreneurs would go to in a bid to further their business have been revealed in a new survey.

According to the research, 87% would work as late as required and sacrifice an evening in with the family, 59% would cancel romantic plans with partners to secure a deal, and almost one in three (31%) would miss important meetings about their child‘s education if they thought it would lead to more business. Over half (54%) would forsake a family holiday if they felt it would help business.

The survey also revealed how far owner/managers would go to keep the business afloat. Over half (55%) would lay off staff and take on their workload in addition to their own while 41% would consider taking on a part-time job.

“It is very interesting to see the lengths that entrepreneurs will go to in an attempt to win new business, forsaking their partners and putting work before their children,” said David Robertson, chief executive of Bibby Financial Services, which commissioned the research. “This highlights a need for a more healthy distinction between work and life.”

It is very interesting to see the lengths that entrepreneurs will go to in an attempt to win new business, forsaking their partners and putting work before their children. This highlights a need for a more healthy distinction between work and life

When it comes to coping with the financial pressures of running a business, half (50%) of owners and managers would take out a personal loan and 37% would sell expensive possessions or re-mortgage their house.

Almost a third (29%) would borrow from their joint savings account and nearly a quarter (24%) would borrow from friends and relatives to give their business a financial boost.

“We are clearly a nation of motivated individuals,” added Robertson. “But it is concerning that when facing a cashflow crisis, owners and managers think that a personal loan or borrowing from friends is the answer. These are short-term solutions to what is clearly a long-term problem.”

The summer months can be one of the busiest times of year for small business owners, especially those with seasonal ventures.

But it can also throw up a number of headaches, from soaring temperatures and low productivity in the office to train problems and absence caused by staff holidays.

According to David Robertson, chief executive at Bibby Financial Services, it‘s also an opportunity to plan for future growth. “Summer can be one of the most challenging times for small business owners and managers, with staff holidays and seasonal surges in demand to cope with,” he said.

“But, with a little forward planning, it‘s surprising how much time can be saved in the long-term,” he added. “This time of year needn‘t be a headache for owners and managers. In fact, it can be a really prosperous time.”

Bibby Financial Services has developed the following top tips to help owners and managers manage their workload during the busy periods:

• Plan, plan and plan some more. Try to anticipate summer demand for your products or services by looking over orders for previous years. Seasonal trends are likely to occur on an annual basis and should be factored in to your business plan and sales forecasts

• Monitor your stock levels regularly. While over-stocking will deplete cashflow and may prove difficult to shift, under-stocking could cost you sales and may even result in the loss of valued customers

• Under-promise and over-deliver. Never take on board contracts that you can‘t fulfil, particularly in the summer months when you may have a skeleton staff. This will damage your reputation and endanger your business

   

  Summer can be one of the most challenging times for small business owners and managers, with staff holidays and seasonal surges in demand to cope with. But, with a little forward planning, it‘s surprising how much time can be saved in the long-term

   

• Consider seasonal cover. Many of your staff will want to take time off over the summer months, particularly during the school holidays. Consider taking on temporary staff to fill the gap and ensure that your customer service levels are uninterrupted

• Plan your absence. If you want a holiday, be realistic about when you can go. If your business is affected by marked seasonal variations, take your break when you anticipate a lull in demand

• Delegate responsibility. For the duration of your holiday, empower a trusted member of staff to make decisions in your absence, check email and voicemail and open the post. This will ensure you can ease yourself back into work gently on your return and won‘t spend the first few days sorting a mountain of mail and messages

• Keep the cash flowing. As the temperature heats up, don‘t let your cashflow dry up. If necessary, explore alternative funding methods such as invoice finance, freeing up to 85% of the cash tied up in unpaid invoices and helping you ensure you have a flexible supply of working capital during your peak sales season

• Practise good housekeeping. Keep clear, concise documentation, send out invoices and statements quickly and maintain clear records. This will ensure that when you are extremely busy, the day-to-day business runs as smoothly as possible. If you go away, staff can pick up where you left off

On the right track

Email marketing can give you something special: instant, live, two-way communication from every address you deliver to

Use all the information

Email marketing can give you something special: instant, live, two-way communication from every address you deliver to. That‘s right, every single one.

Even emails that bounce back tell you something: it may be that those addresses are dead and you need to update your database.

You can also tell instantly if your email is engaging your reader: if you‘re getting 20% ’opens‘ and only 22% ’reads‘  then you know something about your email isn‘t connecting with your recipients. If it was they would be reopening the email to reread it or show it to the boss, and the percentage of ’reads‘ to ’opens‘ would be much higher.

With this kind of in-depth information you can really understand what‘s working. And what‘s not. And you can begin to target your messages; improve your response rates; and follow up on click-throughs. 
 

To get you started, here are 5 tried and tested ways to improve the effectiveness of your email marketing. 


1. Short and sweet 
Keep your subject line short: about 40 characters or ten words. Any longer and the subject line will be cut off by most email clients. And make it punchy and interesting so your reader will be compelled to open your email.

Avoid words like OFFER or FREE or exclamation marks for emphasis!!! These will guarantee your email will end up in the spam folder quicker than you can say junk.

2. Keep it simple stupid 
Don‘t make your emails too long or try to cram in too many offers. You‘ve got a second or so to grab your reader‘s attention. So keep it simple with short sentences, small paragraphs, and bullet points. 

3. What next?
Let your readers know what to do next: Call us. Email us. Visit our website etc. Make sure all your contact details are big and bold.

4. Time‘s up! 
Putting a deadline on your email can increase response rates. So ask your reader to respond by a certain time or day to receive their, for example, free goodies or discounted offer. Let your reader know that if they snooze they lose!

5. Timing is everything 
Don‘t send your email at 10.00am on a Monday morning when everyone is manic. It will never get read. Instead choose a day of the week and time of day when your reader will be more receptive to your product or service. Friday afternoon is a good time for alcohol related products!

Follow these five golden rules and I guarantee you will improve your response rates. Good luck.
 

A survey in spring 2006 found that 56% of marketers believed technology was moving ahead of any consensus around the moral dilemmas it can create. By autumn last year that figure had crept up by 7%

 
Research suggests that the marketing profession is uncertain about how to cope with this issue. A small business advice survey by the Chartered Institute of Marketing in spring 2006 found that 56% of marketers believed technology was moving ahead of any consensus around the ethical and moral dilemmas that it can create. By the autumn of last year that figure had crept up by a significant 7%.
 
Technology can also stifle rather than aid progress. By using technology-based research to match products to customer demand, business owners and those thinking of starting a business can tweak and refine their offerings. Items will be slightly better than they were before but businesses will rarely make quantum leaps in innovation without human intervention.
 
Technology-based research can tell you who, what and when. But it can rarely tell you why. A business owner may be able to see that customers are going elsewhere by looking at a spreadsheet but to understand why they are leaving they have to get on the telephone and ask them. There are times when there is no substitute for personal contact. Vodafone, for example, still uses traditional market research to assess the success of its marketing campaigns, and to find out more about customer behaviour such as why people move to other suppliers.
 
Marketers and those interested in the best ways of communicating with customers must learn to control technology rather than the other way around. Allowing number-crunching programmes to automate decisions, send mass communications and decide what the customer wants is both lazy and misguided. And harnessing the real power of marketing technology isn‘t necessarily about buying the newest software or introducing  more sophisticated equipment. It‘s often simply a matter of using the technology that is already available more effectively.
 
Harnessing the power
The very best businesses understand that the basic rule of marketing should always apply, which is that everything it does must be driven by a genuine customer need. Some third-generation mobile phone providers continue to haemorrhage money because their emphasis on the glitz and glitter of technology isn‘t about creating a closer bond with customers. These companies are creating new technologies and then try to get customers to buy them.
 
As with all good marketing, the technology should respond to what the customer wants. The BBC, for example, treats technology more sensibly by offering services such as downloadable comedy and news that can be accessed while on the move.
 
Marketers must use technology to add extra colour to what they already do. The most successful organisations of tomorrow will harness technology to make marketing more personalised. They will use it to release themselves from mundane tasks and spend more time on better meeting the needs of their customers. They will understand the importance of real relationships and know when the human touch is required.
 
Honda, for example, is developing interactive platforms where buyers can speak to an adviser without the hassle of visiting a dealership. In this virtual showroom, customers can chat to a technician, look at different colours and ’test drive‘ the vehicles that take their fancy. This service allows customers to get to know a product without obligation and adds real business value.
 
Similarly, the AA is using technology so customers can avoid the frustrations of a call centre. Following a breakdown, it now sends automatic SMS updates to stranded customers letting them know when the mechanic is 15 minutes away. At Amazon, technology has been used to bring distant purchases further forward. Its suggestions for further reading and a facility to create wish lists are totally automated but they allow the customer to feel a part of a close community.
 
In all the above cases, technology is not replacing a direct and personal relationship with a customer but is enhancing it.
Small business owners and those thinking of starting a business would do well to remember that technology can be a valuable marketing tool but it is not the end of marketing life as we know it.

Search engines are often the first place where people go to look for products and services on the internet. You need to ensure that your business shows up on search engines when somebody is searching for the kind of products and services you offer. The chances are that if you are not present, your competitor will be, and your potential customers will be lost to them.

There are two places your business can be found through search engines: natural search results and search ads (sponsored links). You want your website to appear high in the rankings for both, as most users do not look beyond the first page of results.

All businesses should make sure their website is optimised for search engines to get them as high up the natural search results as possible. Google is the number one search engine in the UK, with over 26m users and 75% of all searches are done on Google. Find out what Google suggests to improve your website’s listing on natural search at www.google.com/webmasters/.

Getting higher in the natural search results is great because you do not pay if a user clicks through to your website. But you have little control over where your site shows up in the rankings. It can be difficult to achieve a high ranking, especially if your website is new or there are a lot of competitors. With search advertising, you have complete control of when your ad shows and where users are taken to when they click on it. You also have complete control of what the ad says and which keywords trigger it.

Link your ad to the relevant page on your website, which will often not be the homepage. Ensuring the content of the landing page is relevant to your ad is vital if you’re going to turn clicks into custom

Natural search and search ads work together very well: if users see your website appear in both the natural search results and in the ads, they are more likely to click through.

When a user searches for something on Google, sponsored links appear in a column on the right hand side of the search results page and sometimes on the top of the page in a yellow box. These sponsored links are ads served by Google’s search advertising programme, called AdWords.

With Google AdWords you can create, put live and edit your ads in real time. As soon as you put your ad live, it will appear when someone makes the relevant search. You can try different ads and see which does best for a keyword or set of keywords.

There is no minimum spend with Google AdWords, so you can use it whatever your budget. You only pay when someone clicks on your ad, rather than paying just to place it. This means that you only get charged for people who have actively shown an interest in your ad by clicking on it. You choose the keywords that trigger your ad.

Google rewards advertisers who make their ads relevant to the user’s search. It does so by placing more relevant ads higher than less relevant ones. The better your ad, the higher up it will be placed on the page even if your competitors spend more.

Google has other products to help you with your advertising, such as Google Analytics which can provide you with in-depth analysis of your ad campaign and where users go on your website.

How to make your search advertising successful
 

• Many people do not go beyond the first page of the search results so you want your ad to show up on the first page of results. It is vital that you learn how to make sure potential customers firstly see your advert, and secondly choose to click on it.

• Choose the right keywords for your product or service. You know your business best, so start with brainstorming terms that relate to your business. Then expand the list

• Create ad copy that is concise, compelling and reflects your product. You want to maximise your click-through rates to increase your ‘quality score’, while avoiding unnecessary clicks which cost you money

• Test multiple ads to see which is the most effective

• Link your ad to the relevant page on your website, which will often not be the homepage. Ensuring the content of the landing page is relevant to your ad is vital if you’re going to turn clicks into custom

• Use other features like geographic targeting, which allows you to focus your ads on a smaller area 

While this may look complicated at first, it is worth understanding the principles and managing your own campaign. This will put you in full control of your advertising spend and save you expensive management fees.

No one IP rights serves all purposes, and the best right depends on what the business idea is and how the business wants to use it

When a business idea has been implemented and trading commenced, it will of course lose its confidentiality and fall into the public domain. At this point (and in keeping with our comments about rival traders at the outset of this brochure) there is nothing preventing any other company from copying the essence of business idea and altering it or improving it and by doing so creating a competing product or service – subject to the following. If parts of the business idea can be protected by intellectual property rights, then competitors will not be able to copy the business idea to the extent that the intellectual property rights protect the idea.

Overview of intellectual property rights
Each of the different intellectual property rights serves a different purpose. They all apply independently – if subject matter qualifies for protection under more than one type of intellectual property protection, then the rights associated with the particular intellectual property right may be enforced independently of the others. No one IP rights serves all purposes, and the best right depends on what the business idea is and how the business wants to use it.

Loosely speaking, copyright protects written and recorded material from copying; registered trade mark law protects business names and logos from being used by other businesses; patent law protects truly innovative products and processes from being copied or offered for sale; the law of passing off protects established reputation in a business from being exploited by others; the law of confidential information and that of trade secrets protect information from disclosure or misuse provided it remains secret. Lastly, designs law primarily protects the aesthetic features of a design as it is applied to a product. There are different tests for infringement in each case.

So, if a logo is created that is intended to be used to identify a business, it may qualify for trade mark protection. It will also qualify for protection from passing off. If the logo is an artistic work, it will also qualify for copyright protection and protection as a registered design. Likewise, if a design has been created it may be registered as a design, the unregistered design right may also protect it, and if it is to be used as a trade mark, it may qualify for registered trade mark protection as a shape, and protection from passing off if it has accrued the requisite goodwill for the business.

It is important to realise the intellectual property rights are territorial. For instance, there is no such thing as a worldwide patent or trade mark. A reference to a worldwide patent usually means that registered patent protection has been obtained in many individual countries or ‘territories’.  With trade marks, there is an important exception where a single trade mark may be obtained covering all of the countries in Europe (except Switzerland) with a single application.

Individual Areas of Intellectual Property Protection to Business Ideas

Copyright Law
This area of Copyright law is said to protect the fine arts, whereas patent law protects the industrial arts. Copyright protects materials in their recorded form whether it be art, photographs, graphic works, music as a embodiment of a business idea. Copyright will not against someone reading the written work, extracting the concepts from it and implementing their own version of it, provided they do not copy the way it is expressed. It will protect against someone copying the materials that they read word for word.  It does not protect against someone extracting the ideas from the document and using them for their own purposes.

Patent Protection and Business Ideas
Some people say that patents protect ideas. They say this on the basis that at the time the patent application is filed you do not need an existing invention, because the patent invention only needs to be produced when the application proceeds to examination, about 9 months after the application is made.  Strictly speaking, patents do not protect ideas – it protects products and processes that have been invented, that has not been seen before and contains an advance over what existed in the market at the date of the application.
The UK and Europe do not allow protection for pure business methods (amongst others). This contrasts with US patent protection that does allow for protection of methods of doing business. A good example is the “One-Click” purchasing method used at amazon.com – it is patentable in the US, but not in Europe.

Design Rights
Design protects the appearance of a product brought about by its shape, contours, ornamentation and surface decoration. There are exceptions to these rules. Nevertheless if the design is new and has an individual character, it may be registered for protection.  The unregistered design right applies automatically in the same way as copyright and has some similar characteristics.

Trade Marks
If the business idea is the name of a business or a logo, it may be registered as a trade mark. A trade mark is simply a name or symbol that indicates that goods or services originate from a source associated with the trade mark. For instance, if Google were to produce a mobile telephone with word ‘Google’ applied to it, you know that the Google, Inc had a hand in producing it. Trade marks do play a role in the promotion of a business idea, because it allows the business to associate the business idea when it goes to market with a distinctive name, which is readily differentiated in the market.

Contracts
Contracts, when properly prepared, are simply agreements in a legally binding form. Contracts may be verbal or they may be written. In a commercial context, there is real difficulty in proving what the terms of a verbal agreement are.  It is commonly said that contracts are not required unless things go wrong. The problem with this approach is that when a value judgment is made at the outset of transaction that all will go well, there is no decisive written record of what was actually agreed, which makes enforcement of the contract more difficult and in our opinion, for most cases too risky to try.
 

When dealing with intellectual property rights, some transactions dealing with intellectual property must be in writing, such as transfers of ownership and grants of exclusive licenses. Furthermore, contracts with employees may be drafted with a view to preventing competition from employees and freelancers when they leave finish their engagement with their employer.

Conclusion
The focus of this article has been the application of intellectual property rights and contracts may used to protect a business idea and their limitations. Intellectual property rights and contracts may be tailored to maximise the level of protection that is available by law for a particular business idea in the circumstances that it is intended to be used. The way this is done for any particular business idea relies on the nature of the business idea and its origins.

By not taking measures at the outset, you run the risk of losing rights that may otherwise have been enforceable and in the process, compromising or losing a powerful negotiating position in the event of infringement of legal rights that you otherwise might have had.

Small companies with slow websites containing broken links will lose vital business to their competitors, according to new research into the UK‘s internet buying habits.

The poll found that nine out of 10 people would go directly to a company‘s rivals if their site failed to load with over half (52%) only prepared to wait a maximum of 30 seconds.

The survey of some 1,600 consumers revealed that nearly 80% of people found slow website loading a major irritation, 71% disliked websites that required specific software to run, 61% were annoyed when images failed to load and 24% were turned off by domain names which are difficult to remember.

Almost two-thirds of internet users (63%) would go to another firm‘s website if they came across a broken link, with just 4% prepared to tell that company about the problem.

It is no surprise how strongly consumers feel about poorly performing websites when they suffer significant stress from using them. As users become more dismissive of slower sites, small companies must ensure that their market has instant access to their products and services

“It is no surprise how strongly consumers feel about poorly performing websites when they suffer significant stress from using them,” said Andreas Gauger, chief executive at 1&1 Internet, which carried out the research. “As users become more dismissive of slower sites, small companies must ensure that their market has instant access to their products and services.”

The research also suggested that consumers are becoming more aware of the reasons behind poorly performing sites. Some 69 per cent of those surveyed blamed poor web hosting as the cause, rather than their own bandwidth, internet connection or computer.

Women are more likely to revisit a site later in the day, with 33% prepared to come back later compared to just 25% of men. But they are also more likely to complain about a site to their work colleagues or friends, the survey carried out by Tickbox.net added.

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Business owners can also talk to their internet service provider (ISP), which can help avoid DoS attacks. But don’t be complacent, says Cluely. “While smaller organisations are undoubtedly less at risk than the bigger or high-profile targets, it only requires one person to be a bit miffed with you or think that you gave him a poor service, and a DoS attack can happen.”
 

Small business owners normally come out of the corporate world where they have IT security available to them. Many of them don't even realise they need IT support until it's too late

 
Target practice
While the ‘bad guys’ might be getting more sophisticated in their attacks, small businesses have typically failed to keep pace with their defences. The problem is significant, with very few smaller businesses having the knowledge, time or resources to ensure they are properly protected. Many will not have dedicated IT staff or a security department, for example.
 
 “Small business owners normally come out of the corporate world where they have IT security available to them as a matter of course,” explains Ricky Brown from WireWorX, an outsourced IT helpdesk service that specialises in companies with fewer than 10 members of staff. “These entrepreneurs who are starting a business for the first time generally overlook security due to the number of other challenges they face in setting up the company. Many of them don’t even realise they need IT support until something happens and then it’s too late.” 
 
To combat that problem, new business owners should swot up on security. There are a number of websites and services that provide free business advice on what the risks are and how to avoid them. A good starting point is the government-led www.getsafeonline.org and Microsoft’s own specialised security portal at www.bcentral.co.uk.
 
The first line of defence – and one that is often the most overlooked – is to ensure the operating system security features are turned on. Microsoft Windows XP and its latest operating system Vista have a number of enhanced security features including automatic firewalls, which effectively put a wall between the business and the internet and prevents malicious information coming on to the network. Microsoft Outlook 2007 now has spam filters and anti-virus features built in, while Explorer 2007 trawls for phishing sites and warns users of suspicious web addresses or web content.
 
Microsoft Vista brings all security settings into one place and simplifies the installation process. Enhancements include Windows Defender, which monitors the system for malicious programs hidden in photos or joke emails, for example. Users can call the Microsoft helpline for help with any questions or advice on setting up these security features.
 
Protect and serve
But while Windows XP and Vista undoubtedly provide improved security, they are not sufficiently robust to defend against all attacks. Every month Microsoft finds security holes, so keeping up-to-date with its security patches by using the Windows update function, found on your computer’s start menu, is vital. And businesses will still need to install extra software alongside the Microsoft tools.
 
There are many off-the-shelf security products available to small businesses. Offerings from well-known providers such as Sophos, Symantec, McAfee and MessageLabs typically cost an initial fee with an ongoing annual licence fee on top for each user. Depending on the price you’re willing to pay, this can include firewall, anti-virus, anti-spam and anti-adware options (see separate box overpage for a full definition).
 
For slightly larger businesses with an infrastructure of more than two or three sites, owners may want to consider an intrusion detection system (IDS), which can be bought as an outsourced service for a yearly fee. IDS will search for hackers or malicious code trying to get into the network and alert users to the threat. 
 
Companies that are involved in online trading – the buying and selling of goods over the internet – need an extra layer of security. Secure socket layer, or SSL, technology is the cornerstone of all ecommerce security and provides the padlock icon on the bottom right hand side of the browser. “SSL ensures data sent over the internet is protected and encrypted so can’t be eaves-dropped on, and hopefully provides a degree of assurance that you are who you say you are,” explains Ollie Whitehouse, internet security expert at product provider Symantec.
 
Companies that use an external ecommerce service provider should make sure they are satisfied with how and where customer data is stored, who has access to credit card numbers and how they are backed up. All of these issues have data protection implications and could seriously jeopardise business reputation if a breach was allowed to happen.
 
According to Whitehouse, a relatively new problem for ecommerce sites is cross-site scripting: a tool that fraudsters use in phishing scams to redirect payments. “The criminals send a link out that looks like your site and is on your site, but is malicious in nature,” he explains, adding that owners should check that their ecommerce service provider has sufficient defences against such attacks.
 
Someone else’s problem
If all this is sounding a bit overwhelming, owners can opt to outsource the whole security function. Managed security services such as those supplied by VeriSign, Unisys and Belgium-headquartered Ubizen, protect customers’ businesses through the configuration, management and constant monitoring of security events. These typically have 24x7 network-monitoring facilities, which cover access control, intrusion detection and prevention, and can include data backup services.
 
Depending on the level of need, managed security services can also ensure that anti-virus and anti-spam software is up-to-date and active and that firewalls are configured correctly.
 
However, even managed security will not solve all potential security problems. Corporate identity fraud, for example, is a growing threat, where fraudstars fake applications to organisations such as Companies House, changing information such as company names and addresses of organisations. In one case taken up by the Federation of Small Businesses, one family business had its address changed from where it had been located for 100 years.
 
One way of protecting your business from this threat is to use the protected online filling system operated by Companies House, which alerts the business owner every time a record is changed. Another is to stay vigilant and report anything that looks suspicious. And this piece of advice is valid for all your security provisions, whether online or not.
 

Internet retailing is growing at the fastest rate since the dotcom bubble of the early 2000s, a new survey by Verdict Research suggests.

The poll claims the amount of money spent online in the UK grew by 33.4% to £10.9bn and claims this figure will almost triple over the next five years.
 

It cites quicker and cheaper internet connections as the main reason, claiming two-thirds of internet shoppers now have broadband connections and spend more money online as a result.

Verdict claims online retailing will account for 8.9% of total UK retail sales by 2011, resulting in a total annual spend of £28.1bn, with most of this figure coming from an increase in spend by existing internet shoppers rather than those who have so far resisted the internet going online.

By 2011, the typical spend of an online shopper will grow to £1,056 per year with the clothing and footwear, DIY and gardening, and food and grocery sectors achieving the fastest growth

But it also suggested there are three retail sectors that are resisting the temptation to go online due to the costs involved in setting up and maintaining such operations. These are food retailers that not yet online, value outlets such as Primark or Matalan and smaller, specialist stores.

“Even with some retailers staying out of the market, online sales in the UK are set to triple in value,” the research company said.
 

“By 2011, the typical spend of an online shopper will grow to £1,056 per year with the clothing and footwear, DIY and gardening, and food and grocery sectors achieving the fastest growth.”

Verdict‘s figures included online sales of goods but did not feature other products such as air flights, insurance or ticket sales.

The total amount spent online has grown every year since the birth of internet retailing in 1997.

The majority of small companies are leaving themselves open to footing the potentially crippling bill of legal action brought by employees by failing to have adequate insurance in place.

According to the results of new research, fewer than one in five (18%) small firms has employment practices liability insurance in place – which protects companies against the cost of lawsuits brought by staff – despite the fact that new employment legislation means a flurry of cases is expected over the next couple of years.

The survey by Hiscox also found that just 15% of company owners have directors’ and officers’ insurance, which aims to protect owners from personal claims brought against them in their role as director of a company.

However, nearly three in five small firms (59%) are spending more time looking at risk management issues than they did two years ago, while 70% believe they are more likely to be subjected to a frivolous legal claim due to the rise of a ‘no-win, no fee’ legal culture.

“While firms are increasingly viewing risk management as an important tool in their business armoury, the survey reveals some significant gaps in the level of insurance cover they have, particularly in areas such as directors and officers’ insurance and employment practices liability insurance,” said Gary Head, professions underwriting director at Hiscox.

While firms are increasingly viewing risk management as an important tool in their business armoury, the survey reveals some significant gaps in the level of insurance cover they have

“The potential cost from employee discrimination claims or other lawsuits is enormous, and these products are designed specifically for such eventualities,” he added.

The most common insurance policies taken out by small firms, according to Hiscox, are:

1.      Public liability (80%)

2.      Office contents and computers (66%)

3.      Employers’ liability (66%)

4.      Professional indemnity (59%)

5.      Buildings (58%)

6.      Motor (52%)

7.      Portable equipment (49%)

8.      Legal expenses (46%)

9.      Business interruption/loss of income (44%)

10.    Consequential loss (30%)

11.    Health (28%)

12.    Product liability (25%)

13.    Travel (22%)

14.    EPLI (18%)

15.    D&O (15%)

The survey added that 10% of small businesses have suffered financially in the past because of a loss that wasn’t insured, with the average loss being £14,400.

Small firms and business startups need to ensure they have a company sickness policy and improve the way they communicate it to their workforce if they are to get on top of the problem of staff absence.

That‘s according to a business advice survey by workplace consultancy Croner, which reveals a wide discrepancy in between what employers and employees view as acceptable reasons to call in sick.

The business advice survey found that 91% of employers felt that cold and flu was a suitable reason, as opposed to 81% of employees. Similarly, 77% of employers considered migraines to be a reasonable reason for calling in sick compared to 65% of employees.

The business advice research also claimed that one in three staff exaggerate sickness to get time off work, suggesting that as well as having to cope with fraudulent cases employers are failing to let their employees know what is an acceptable reason for failing to come into the office.

“The business advice surveys have highlighted a real discrepancy over what employers and employees believe to be acceptable reasons for calling in sick,” said Gillian Dowling, employment technical consultant at Croner.

Employers should implement a comprehensive sickness policy which should clearly set out the procedures for recording and reporting sickness absence and managing short and long-term absence

“Employers should implement a comprehensive sickness policy which should clearly set out the procedures for recording and reporting sickness absence and managing short and long-term absence,” she said. “This policy should be communicated to all employees at suitable times, for example when a new employee attends an induction.

“Well thought-out and communicated sickness policies will not only reduce unauthorised absences, they will have a positive effect on team morale and the overall health and wellbeing in the workplace, which will ultimately boost productivity,” added Dowling.

Croner offers the following business advice tips on how to create an effective sickness absence policy:

• Give primary responsibility for sickness absence to senior managers or HR managers

• Keep relevant records

• Consider improving employment conditions to reduce workplace stress and accidents, which are often a root cause of sickness absence

• Consider improving physical working conditions, ergonomic factors in workplace design and health and safety standards

• Design jobs to give motivation and provide job satisfaction

• Provide proper induction and training

• Check that policies on equal opportunities and discrimination are in place and upheld

• Consider requiring absent employees to phone in by a given time on each day of absence

• Notify employees on requirements for reporting sickness absence

• Meet with employees in an attempt to resolve short-term and long-term absentee issues and continue to communicate with the employee to gauge the seriousness of long term absence in business

• Ensure that senior managers, line managers and supervisors have the ability to conduct interviews and to support staff as appropriate during and following sickness absence

Sickness in the UK accounts for 21m working days a year, according to a business advice survey by the Confederation of British Industry and insurance company Axa.

Only just over half (51%) of small companies  and business startups have a formal expenses policy in place, leaving them open to fraudulent and unnecessary spending, a business advice survey by independent research company Loudhouse suggests.

The study, commissioned by American Express, suggests that 48% of small company employees believe they claim more expenses now than a year ago, with the average monthly claim now £119.

There are substantial regional differences in the amounts of money claimed, however, with Londoners saying they claim just £95 a month compared to £140 in the north-east.

The business advice report suggests that companies that fail to keep track on employee expenses leave themselves open to abuse or errors. It found that 60% of employees said they were able to claim expenses without receipts at least some of the time, while nearly a fifth (18%) thought it was acceptable to exaggerate claims and 14% admit to having done so.

Over half (61%) thought people became more lax in their attitude towards employee expenses the longer they have been with a company.

“It is important that companies understand the value of implementing a formal expense management programme,” said Brendan Walsh, senior vice president at American Express Commercial Card. “By monitoring and analysing employee spending, businesses can piece together a complete picture of company expenditure and begin to negotiate better deals with suppliers, as well as stamp out any unauthorised spending.”

It is understandable that employees will sometimes have differing attitudes to spending the company’s money but employers need to encourage policy compliance among employees to make savings

The business advice survey also revealed that while the majority of UK workers said they would treat company money in the same way as their own, 79% contradicted themselves when putting this into practice.

“This attitude of employees towards spending company money clearly demonstrates the need for small businesses and business startups to take tighter control over their expense management policies,” added Walsh. “It is understandable that employees will sometimes have differing attitudes to spending the company’s money but employers need to encourage policy compliance among employees to make savings.”

But there was some good news for companies that fail to keep a grip on employee expenses, with 82% of staff saying they thought it was unacceptable to exaggerate claims.

Small businesses should shop around to get the best fixed-rate loans and take their time to get the right deal, the Forum of Private Business has warned.

With interest rates at their highest level for seven years and expected to rise further during the remainder of 2007, the small business lobby group is advising companies to make sure they get the best possible rate when applying for a business loan.

According to Frank Peck, the organisation‘s economic adviser to the FPB and professor of regional economic development at the University of Central Lancashire, further interest rates hikes could restrict the growth of small companies.

“The problem with further rate rises is that uncertainty discourages investment, particularly for the expansion of smaller businesses who may have worries about the increased cost of borrowing,” he said. “It is much more difficult for smaller firms to absorb short term variations in these costs.”

The problem with further rate rises is that uncertainty discourages investment, particularly for the expansion of smaller businesses who may have worries about the increased cost of borrowing

But he added that there were signs in April that inflation had dropped, meaning that interest rates could yet remain on hold.

“What is interesting about the May rise in interest rates to 5.5% is that the decision of the MPC was unanimous, whereas meetings earlier in the year involved split decisions,” said Peck. “The reason for this, quite simply, is that inflation unexpectedly rose in March to 3.1%, moving well away from the target for the Treasury.

“However, we now have the April inflation figure which shows a drop to 2.8%, suggesting that previous rises in interest rates are having an effect,” he added. “Much depends on whether monetary policy committee members think they have done enough already and wait to see what happens when the May figures are published.”

The Bank of England‘s monetary policy committee voted to keep rates at 5.5% in June.

Businesses are still not doing enough to combat the threat of unforeseen disasters such as power cuts, storms, fires, floods and terrorist attacks to their company, the Chartered Management Institute (CMI) has warned.

According to the organisation‘s annual business continuity management survey, under half the 1,257 companies polled had any kind of business continuity plan despite expressing fears that such incidents could see them deprived of key staff and lose IT systems and files.

Small companies were the least likely to have a business continuity plan, with just 34% having put measures in place to deal with such threats, a figure that rose to 42% for medium-sized companies and an average of 48% when large organisations were also included.

Despite this, 73% of those questioned thought business continuity was an important concern for management.

The CMI is warning businesses to put in place procedures that will protect the safety of their staff and reassure them that such an event would not deprive them of a job.

Unless organisations balance the need to safeguard buildings with the need to secure their workforce, any attempt at business continuity management will remain unfinished and inadequate

“Companies need to work out what the key issues are that will stop them working,” said Jo Causon, director of marketing and corporate affairs at the CMI. “Unless organisations balance the need to safeguard buildings with the need to secure their workforce, any attempt at business continuity management will remain unfinished and inadequate.”

There were also notable differences in how companies that did possess a business continuity plan maintained them, the research found. Half those firms practised the plans at least once a year but a third of organisations didn‘t maintain them at all and 15% were aware of problems with the plans but had done nothing about it.

More than half of those managers surveyed claimed their organisation had developed a plan to counter the risk of a bird flu epidemic, the research found, but such plans tended to underestimate the likely impact on their workforce and society in general.

I would like to be thought of as firm but fair. But I don't care who likes me or who doesn't like me. I don't care how many people I upset as long as it's for the good of the whole. And if I've got to make tough decisions, then I'm going to make tough decisions

The short answer is yes. She even admits as much. She recognises herself from the show, albeit watching through her fingers in a darkened room with just her husband for company. Perhaps more predictably, her staff recognise her too.

Selective viewing
But that’s not the whole story by any means. For one thing, Meaden is actually quite good company. She’s lively, chatty, she even laughs at times (which would never make it through the BBC editors). She’s also very fond of gestures. Arms fly, fingers point, tails swish (metaphorical ones, anyway). But when confined to a chair and surrounded by others who can give her a run for her plentiful amount of money when it comes listening to the sound of their own voice, all you’re left with is the stony face that looks like it’s just been subjected to an encounter with a removable toilet seat cover.

“I hate to say it but it is me,” she says. “It’s a concentrated version of me but it is definitely me. I’ve asked my friends and they say they have seen and heard me say all those things that I do on camera. The only thing they say is that I come across as sterner on television. I have a lot of fun in business but I don’t think that really comes across in the programme.”

One thing is for sure, though: you wouldn’t want to mess with this particular dragon. I sailed close to the wind at least once during our interview at the London Hilton Hotel, notably when I put it to her that Elnaugh had said she felt she was only in the first two series as a token woman and did she feel the same (she felt the BBC had been looking for a woman but disliked my use of the word ‘token’). “That implies ‘oh god, we’ve got to find a woman, she’ll do’,” says Meaden. “I’m not there as a token woman. I’m there, I hope, because I’m good at what I do and I add something to the show. I’m a dragon in that programme.”

She certainly is. In fact, you get the impression that even St George may have had his work cut out to subdue this particular dragon once someone had given her cage a quick shake. “I would like to be thought of as firm but fair,” she says. “But I don’t care who likes me or who doesn’t like me. I don’t care how many people I upset as long as it’s for the good of the whole. And if I’ve got to make tough decisions, then I’m going to make tough decisions.

“At Weststar Holidays we had an absolute rule,” adds Meaden. “I don’t care what mistakes anybody’s made, they had to tell me about it. If they tried to cover it up and it turned into a problem later, all hell would break loose. That’s when people see my wrath: if they try to bullshit me or misrepresent me or put spin on stuff. I won’t have it.”

She’s candid enough to realise that her way of doing business has probably cost her somewhere along the line. “Even with my friends I can be a bit too damned direct,” she admits. “As a leader in a business, it was my job to get the best out of my people. That meant that I ended up with very robust people because I’m very robust myself. If I have a weakness, it’s probably that I’ve lost some quite good people who didn’t thrive in that environment and I didn’t temper my approach to nurture them.”

The making of Meaden
But Meaden’s take-it-or-leave-it, my-way-or-the-highway approach is engrained in her character and it’s certainly no charade put on for the benefit of staff or television cameras. Nor is there any denying that it’s proved to be highly effective over the years.

Meaden set up her first business – importing ceramic and glass products from Italy – after leaving college, leaving behind a three-month stint as a showroom model (no sniggering at the back, please). But despite having sole agency rights, the goods started appearing in other high street shops and, without the finances for a legal fight, Meaden walked away and took on a franchise in Somerset for Italian footwear and clothing company Stefanel, one of the first in the UK.

“That was a great experience; it was great fun setting it up and I learned a lot but I have a low boredom threshold and it just turned into running a shop,” she says. “And I’m not too happy about the franchising model. One of the strains in my career has been about being in control of my own destiny and I don’t like the constraints it puts on you. You’re making a lot of money for someone else and there are an awful lot of rules and regulations and, at the end of the day, it’s not really your business.”

So with a bit of experience but no real money, Meaden decided to take up one of the concessions her parents then ran in the Butlins and Haven holiday camp network, running a bingo hall at Butlins site. “I learned more business lessons through that than at any other point in my career,” she says. “You’ve got to be very good because it’s a very social thing. If the customers didn’t like you, they walked out and you could see them go. That was a really good lesson to learn.”

But if it was the bingo halls of Butlins where Meaden learned her trade, it was Weststar Holidays that became her stomping ground. After leaving the world of bingo, Meaden became general manager and then operations manager at the Bryson Group – her parents’ company that ran the concessions – taking responsibility initially for running the leisure side of a holiday park in Minehead, Cornwall, and then for all the group’s leisure activities and amusement arcades.

But, once more, it was the lack of control that bothered Meaden – this time over the concessions from Butlins and Haven on which the Bryson Group relied – and in 1993 she accepted an invitation from her parents to become operations director at Weststar, which had been set up by her parents five years previously and then consisted of just two parks in Mullion and Looe Bay. Within two years Meaden had become managing director and the company embarked on a programme of expansion that saw the number of parks expand to five by 1999.

“Holiday parks are now well-known products but at that stage they were quite off-centre. We were one of the first to have an indoor pool and also to develop entertainment from the clubs so we were pretty cutting-edge,” says Meaden. “I’ve always said that if you’re in business – whether at the low end or the top end of the market – just be the best, so we set out our stall to make Weststar the best holiday park provider within its sector.”

Yet despite running a successful business, Meaden wanted more. “I’d put all my eggs into that particular basket and I wanted to see evidence that I would one day take control of the company,” she explains. “So in 1997 I struck up negotiations with my parents, saying ‘either I get to take over the majority of this business or I’m going to spend my time doing something else’.

After two years of wrangling, they finally agreed to sell the company and Meaden eventually secured the necessary funds to take over the business, for which she paid a “very full price”. Her mother disappeared from the business altogether, while her father retained a non-executive director role.

“Succession is a difficult situation for families to deal with so give my parents a great deal of credit for recognising that what I was saying was absolutely right,” she says. “A lot of family businesses have to bring something to boiling point before it gets out on the table and that’s a recipe for disaster. I had a very good experience of family businesses because we were absolutely clear what was family and what was business. Our whole approach was that if we looked after the business, the business would take care of us.”

With Meaden finally at the helm and able to exercise her entrepreneurial muscles, Weststar was gradually transformed into what she describes as “a lean, mean fighting machine”. The number of sites was reduced from five to three, selling a plot in Riviera Bay, Cornwall, to her to sister and another one in Looe also being sold off.

With three main sites – in Mullion Bay on the Lizard peninsular, Looe Bay in Cornwall and Sandford Holiday Park in South Dorset – all generating new business in a growing marketplace on the back of quality but affordable holidays, Weststar soon found itself the target of several takeover approaches. A deal to sell in 2003 was aborted at midnight on the day the contracts were meant to be signed when the buyers reduced their price at the last minute and Meaden walked away. But the whole process made Meaden think about exiting and in 2005 she finally sold the company to Phoenix Equity Partners in a £33m deal.
 

Holiday parks are now well-known products but at that stage they were quite off-centre. We were one of the first to have an indoor pool and also to develop entertainment from the clubs so we were pretty cutting-edge

Meaden still retains a 23% stake in the business and a non-executive director role that accounts for an average of two days a week, a condition Phoenix insisted on as part of the deal. She initially carried on in a quasi-marketing director position but took a six-week break last November after which she returned to concentrate on making acquisitions, the first of which was Hayling Island in Hampshire, bought for £13m earlier this year.

Den of equity
Meaden’s love for business, she says, is what gets her up in the morning and she was all set to begin looking for start-up companies that were in need of both investment and a bit of mentoring when Dragons’ Den came calling. “You’ve got a team of BBC researchers going out and looking for products for you,” she explains. “I’ve seen products that I think are bloody silly. But I’ve also seen, and have invested in some, that I think are very good products and which I would never have found in the outside world.”

She made a total of four investments in the first series of Dragons’ Den – all with fellow dragon Theo Paphitis – and would be interested in doing a second series as well. One of these investments – the service station truck-washing firm – fell through at a very late stage when the entrepreneur decided to accept his bank’s offer of finance with no equity involved, a decision Meaden describes as “bloody irritating”.

Meaden also invested in Ian Chamings’s MixAlbum company, a music-download website that allows users to mix tracks; The Nuts Poker League; and Coin metrics, a wireless revenue system for fruit and arcade machines. She has also invested in a market research company outside of the show.

“The people who I’ve invested in generally are entrepreneurs who can say ‘this is what I want to do with this, these are the numbers, this is the market, I’ve done the research and that’s why this is going to sell’,” she says. “That, to me, is the twist of an entrepreneur. To me, it’s not someone who’s invented something and isn’t quite sure what to do with it.”

For Meaden, the most important thing when making an investment is that the product actually works. That may sound obvious, but many would-be entrepreneurs arrived in the den with prototypes that either didn’t work or hadn’t been properly tested. “You’ll see a few times on the programme when I say ‘great idea but I’ve got no idea whether it works so I’m not investing’,” she says.

“You know a good product when you see it and you think ‘yes, there’s a market here’. I would invest in a good product with a bad person because I think you can bolster someone up,” she adds. “But I would never invest in a good person with a bad product because a good person will just waste their energies trying to support what is a fundamentally bad idea. Good ideas almost have a little bit of life of their own whereas bad products just need to be allowed to die.”

Yet for all the dubious inventions Meaden and her fellow dragons examined in a whirlwind two months – and there were many – she remains upbeat about the UK’s claim to be a nation of entrepreneurs. And the key for any business model remains the same. “Demystify it. Simplify it. Keep in tune with what is going on. I watch so many businesses become over-complicated with layer upon layer of management,” she says.

“I think on Dragons’ Den I come over as quite a practical person. I wouldn’t invest in that toilet seat because I don’t want to have to hover my face over a toilet. It’s a very practical reason and it’s very odd that when people get into business and get removed from their customers they forget all the obvious stuff and it all becomes figures and theories. Just ask the simple questions: do customers want this? Is there a market? Keep it simple.”

There’s no doubt that Meaden’s arrival in the den has raised the temperature still further and contributed massively to the continued success of this unlikely hit television show. But for all the stern looks, the ‘I am not impressed’ faces and the cool putdowns, there’s more to Meaden than meets the eye. And when this particular dragon roars, you’d do well to listen. If only from a distance.
 

I’ve often said that a lack of profits is like a cancer, it kills you off very slowly. But a lack of cashflow is like a heart attack because you can’t pay your bills, the bank moves in and you’re bust. You’ve got to think ‘if I do this, what are the consequences’?

Red alert
His current portfolio includes the stationery chains Rymans and Partners and Red Letter Days, the gift experience company he bought with Peter Jones from their fellow dragon Rachel Elnaugh in 2005 and which has proved to be one of his biggest challenges to date. “It was probably the worst managed business I ever got involved in,” he says. “We had to scale it down to the profitable part of the business, identify its market and prepare it for that. We’ve got the business back on an even keel but we’ve still got work to do.”

In what should be a warning to any small business owner, Paphitis believes the case of Red Letter Days is by no means unique. This was, he says, a business with a strong brand that had suffered from mis-management and neglect. “You have to focus on the business and deal with the issues that come up,” he warns. “Looking at it through rose-tinted glasses is not a good way to run a business. Everything will go wrong at some stage; it’s how you deal with that and plan for it that matters. Focus on every single decision and how that will affect the whole business.”

One of the major problems facing small companies, particularly early on, is a lack of cashflow. But even this should be anticipated, he claims. “A lack of cashflow doesn’t just happen unless there’s some major disaster, in which case you can’t do anything about it,” he says. “Your business plan will show you the level of cashflow and you’ve got to deal with it before it becomes a problem.

“I’ve often said that a lack of profits is like a cancer, it kills you off very slowly,” he adds. “But a lack of cashflow is like a heart attack because you can’t pay your bills, the bank moves in and you’re bust. You’ve got to think ‘if I do this, what are the consequences’?”

Paphitis firmly believes that to be a successful entrepreneur requires a certain type of person. “There has to be something in you,” he says. “It’s the entrepreneurial spirit: the ability to take a risk and work without a safety net. Some people can’t do that.”

He does, however, believe the government could do more to encourage entrepreneurship in this country, and claims the main reason why the climate for starting your own business has improved in recent years is down to the arrival of new technology such as the internet and broadband rather than any state initiative.

“If you listen to the politicians, they’ll say it’s because of the way they’re trying to help small businesses which is absolute poppycock,” he says. “They’ve probably strangled more businesses than they’ve helped.

“The government has got to just wake up and smell the coffee because it strangles small businesses with red tape,” he adds. “There have to be easier ways for small businesses to start up and raise money. We should be using tax breaks or credits or exemptions for small businesses to get them going. The government will get its money back because if they’re successful they’ll pay the tax. But there’s a lot of talk and very little action.”

Straight talking
Paphitis and his fellow dragons can take some of the credit for the current interest in running a business. The fourth series of Dragons’ Den is currently being shown and the programme has moved from one to two series a year. “A lot of people have it inside them to run their own business and it’s quite compelling to actually see other people’s ideas,” he says. “The public don’t see that anywhere else, they just wonder ‘how did he make it?’ This is the first time they’ve really been able to see it.”

In his investments so far, Paphitis has found himself drawn to partnering with former Weststar Holidays owner Deborah Meaden, who he describes as “the most capable businesswoman I’ve ever met”. He did once enter into a deal with Duncan Bannatyne which later fell through although, not surprisingly given his Red Letter Days experience, he lists Elnaugh as the only dragon – past or present – who he would struggle to work with.

Partly in a bid to make the programme more appealing, the quality of entrepreneur coming into the den varies dramatically and Paphitis has administered candidates a severe dressing down for what he perceives as a lack of preparation on more than one occasion. “The cardinal sins are not knowing your product, not doing your research and not having the answers,” he says.

“We’re sitting there totally blind to what the proposal is so if we can pick things up and they haven’t thought them through, then it’s curtains. They’re living with it,” he says. “The other sad thing is that people ask relatives and friends what they think of their idea, and they aren’t the best people to ask. They’ll always say nice things to you.”

He admits he’s had to find a way of dealing with the extra commitments that have resulted from his investments in up-and-coming entrepreneurs. He’s there for advice but Paphitis won’t invest in anyone he thinks will take up too much of his time. “I laugh when people say ‘I’m not after your money, I’m after your expertise’,” he says. “And I say ‘well, I won’t give you any money then’. But I’m not going to run their business for them.’

Circuitous route
But if any entrepreneurs are looking to follow Paphitis’ own route to millionaire status, they’re likely to be disappointed. “I didn’t just become a millionaire,” he says. “You never get this feeling of being rich. It still hasn’t happened for me. Sitting in that car made me feel very silly because I didn’t feel like I belonged there.

“I made £10,000 and put it in the building society,” he continues. “And for me that was a lot of money because I constantly had overdrafts. But I don’t think I got to having £100,000 in the bank for a long time. I might have got to £50,000 but I always reinvested it into a business so I never had it to use.”

Born in Cyprus in 1959, the family emigrated to the UK when Paphitis was just six. After leaving school at the age of 16, he began his career as a filing clerk at Lloyds of London before picking up his first taste of the retail market as a shop assistant for Watches of Switzerland.

“It was the first time I’d experienced the ‘them and us’ mentality between the workers and the head office,” he recalls. “It was a very structured Are you being served? type of organisation and you could see things that didn’t make sense but you were powerless to change them.

“We also have a structured organisation in my companies but I’m happy to listen to the shopfloor,” he adds. “We have a conference every year when we all stay up until three or four o’clock in the morning so, if they have the stamina and the liver, staff can help themselves by putting a few beers down them and telling us what they really think.”

Paphitis’ inability to conform to a traditional employer-employee relationship meant he always felt he would be better working off for himself. “I’m one of those people who always has an opinion,” he explains. “Nine times out of 10 it’s right. That was there from school. So it became very clear that I wasn’t the type of character who was going to survive in any corporate environment.”

After working for Legal & General in financing property deals, Paphitis set up his own consultancy called Surrey & Kent. But it was when he agreed to sell this to, and become part-owner of, Hanover Druce – a London-based commercial finance company – that he started to expand from helping to finance property deals to other non-asset-based lending, eventually investing his own money in businesses he liked the look of.

“It was more businesses looking to survive rather than expand,” he says. “I didn’t get to see those because they were too easy pickings for the big boys. They were only interested in showing me what in those days were called ‘the dogs’, where the choice was to put them into receivership or find a way of refinancing them. It then got to the situation where I’d say ‘well, I’ll buy that company’. But it’s about hard work, commitment and dedication. I’m a very impatient person in lots of ways but I’m very patient in business. I don’t just put my money in and sell it tomorrow for a small fortune.”

Different league
But if Paphitis knew what he was doing in retail, it was a whole different ball game – literally – when he decided to take Millwall out of administration in 1997. “It’s a totally different business,” he admits. “If you’ve got badly performing employees here you put them on notice and you performance-manage them out of the business. But you can’t do that with football players. If you’ve got a lazy sod and who’s good at getting his wages, you’ve had it. Agents fill young men’s heads with rubbish, the FA was in turmoil and the Football League was in a terrible state after ITV Digital went bust.

“But Mrs P and I used to live in Peckham so it was our local football club,” he explains. “If I hadn’t got involved the club would have gone into liquidation and I let my heart rule my head. But sometimes it’s good to let your heart rule your head and I don’t regret it for one second. I had eight years there and they were some of the best of my life.”

Under Paphitis’ stewardship – and like his other businesses – Millwall gradually got back on its feet again. The club was promoted to what is now the Championship in 2001 and went on to reach the FA Cup final and qualify for European football for the first time three years later. But there were also dark days, notably the riots that followed Millwall’s playoff defeat in 2002 and threatened to return the club to the dark days of the 1980s and ruin the image Paphitis had worked so hard to build up. For the first time he began to question why he was there.

By 2005 Paphitis felt he could take the club no further and owed it to his other businesses to give them more attention, a process that eventually led to the sale of La Senza and Contessa last year. Yet the decision to let the lingerie stores go and retain the stationery businesses took many analysts by surprise.

“Fashion businesses take up a lot of time. It’s a bit like the football really. A lot of the time you have to be really hands-on,” he explains. “I was a bit concerned about the fashion market as well and I decided that the exciting business was the one that was going to go and the not-so-exciting business that was perhaps more stable was going to stay.”

But if anyone thought being a millionaire entrepreneur was an easy life, they should think again. Like Gordon Ramsey, Paphitis regularly works 20-hour days, going out to dinner functions at least four times a week and often not making it home at all.

And if ‘Mrs P’ is hoping that by selling his majority stake in Millwall and letting go of La Senza and Contessa she will see more of her husband, she’s in for a nasty surprise. “The days are there all day and the working week is a working week,” he says. “So I work from first thing in the morning to last thing at night. I try and get weekends off now and that’s another reason why I let go of Millwall. But I kiss the missus and the kids goodbye in the morning and then they won’t see me again until the following morning.”

Paphitis is already plotting further acquisitions and admits that “more than likely I will have to educate myself about a sector that I know nothing about”. So, for a few weeks at least, it looks like the closest his wife will get to him on a week night will be watching BBC2.

What made you decide to start your own business?
I wanted to create a financially secure future for myself and my family. I had started a lot of businesses and sold them to competitors and I decided that I wanted something that I could take out of New Zealand and go global. I identified very early on that transport was a sector that is always going to be in demand and I thought that was the area I wanted to be in.

What has been the biggest challenge to date?
In the early years the biggest challenge was finding enough capital to keep developing and growing. I solved this by inviting friends and family to take shareholdings in the parent company. Later on I was able to buy them back but that created another challenge because it stretched my personal finances. Another key challenge has been to get franchisees to adhere to and follow the Fastway system. Whenever a franchisee gets into trouble it’s always because they’ve tried to change the system.

What do you believe has been your single greatest achievement?
Seeing people being able to earn a living from the Fastway system. But I think it’s also been fantastic to see that we’ve been able to keep growing sales and profits over the past 24 years and that we’ve emerged from a small, entrepreneurial start-up company to a large corporate structure operating in multiple countries.

What key factors have made your company successful?
I think the franchise model is the key to our success. The Fastway model is very complex in its entirety but if you break it down to each of the franchisees you can see that all the elements are complementary.

What effect has technology had on your business?
In the last 10-12 years technology has had an enormous impact. We’ve had to invest very heavily in technology since that time to stay at the forefront and because we’re a low-cost operator we had to develop software that was affordable. I think if we had gone with the original technology that was coming out 10 or 12 years ago, it probably would have been the death knell of our business. Right now in the UK we will be rolling out very shortly our track-and-trace scanners which give the customers real-time information on the internet. But in every country we’re always rolling out new updates.

How would you describe your management style?
I’m a very direct person. I’m very focused and I know what I want to achieve. I use my personal goals to drive my business goals. So if I want a new boat or a house or a car, I work out what we need to do, even weekly or daily. I’m a do-er and over the years I’ve been very hands-on. When I’m on a mission to get something specific done I have a tendency to tell people exactly what to do and then I expect them to follow my directions to the letter of the law. On a day-to-day basis I do empower my staff to carry out their roles and to work on their own but everything is very accountable and everybody has to focus back to the business plan.

Who has been the greatest influence on your career and why?
The one key input on my life was my grandfather. He was very entrepreneurial and he spent a lot of time speaking to me about the days when he travelled from Europe to New Zealand at the start of the 1900s starting businesses, and how on the ship rather than goods he took water and would sell this water and fill it up at the various ports. He was probably the person who drove me to become the person that I am today.

You need to develop a comprehensive business plan. A lot of people just use the business plan to go to the bank and get finance and then they throw it in the drawer but I used mine to drive the business

What is the most valuable lesson you have learnt in business?
One of the things that I learned very early on is that you don’t trust anybody in business. You’ve always got to put systems that offer accountability in place. One of the things that I learned from my grandfather is that research is very important and right throughout my business career I’ve spent a lot of money on research. Every single year I research our markets to make sure things haven’t changed.

What advice would you give to budding entrepreneurs?
I don’t think anyone wanting to start up will be successful unless they do some thorough research. I spent a whole year researching this concept and prepared a five-year business plan. Research is probably the key and then you have to find a realistic way of achieving the capital that you need and to develop a comprehensive business plan. A lot of people just use the business plan to go to the bank and get finance and then they throw it in the drawer but I used mine to drive the business.

What are your plans for the future of the company?
In the last three years we were on a no-expansion plan. Our aim was to grow in all the existing 11 countries that we’ve already got but we’re now ready to recommit to expansion. We’ve found that non-English speaking countries have been very difficult for us because we don’t understand the language and if you get 10 people to translate the same manual you’ll get 10 different versions of that manual. So we’ve identified the US as our next marketplace. It’s an ideal market, it fits into our niche very well and it’s got very high consumption levels, which are what create courier services. The culture is very similar to where we’ve been very successful like New Zealand, Australia, Ireland and England.

And after 24 years we’re looking at diversifying into other associated areas. In New Zealand, with the postal market deregulated, we’ve set up a business called Fastway Post as a competitor to the New Zealand Post Office and they’ve been very successful and every one of their outlets has become a customer for the courier service. So we’re looking at expansion into other areas as well as taking the core brand into the United States.

Two in three small companies are risking high levels of staff absence and falling productivity by failing to monitor levels of staff sickness, new research suggests.

A survey by Employee Benefits magazine and healthplan provider HSA suggests just 37% of companies with fewer than 100 employees have a system in place to keep track of staff absence, compared to 51% in 2005.

It also suggested the total cost of sickness to employers is rising. The amount of firms recording the cost at between 6% and 10% of payroll increased from 4% in 2005 to 10%, with those claiming it cost between 3% and 5% rising from 6% in 2005 to 35%.

The most popular means of tackling staff absence was to implement work/life balance policies, cited by 69% of respondents. This was followed by establishing a sickness absence management scheme (66%), encouraging staff to take regular holidays (65%) and introducing flexible working (63%).

This research shows how important it is for managers and HR practitioners to be aware of the signs of mental ill-health so that they can take action early and provide support before the individual‘s condition deteriorates

The research also highlighted the growing problem of stress in the workplace. The number of respondents seeing this as a major cause of absence rose from 12% to 37% between 2005 and 2006 and increased still further, to 40%, in 2007.

Meanwhile a separate survey by the CIPD has suggested that mental ill-health is the second most common cause of sickness, behind only musculo-skeletal conditions.

The research claimed stress, depression and anxiety accounted for more than 50% of all mental health-related absence, with the average amount of time staff took off due to mental conditions standing at 21 days.

“This research shows how important it is for managers and HR practitioners to be aware of the signs of mental ill-health so that they can take action early and provide support before the individual‘s condition deteriorates to the point they go off on long-term sick leave,” said Ben Willmott, CIPD employee relations adviser.

The word ‘audit’ is usually associated with understanding finances, not people, but an audit is exactly what is needed to effectively assess and manage talent within smaller organisations

However, while smaller firms may lack the specialised departments of their larger counterparts, they also have a powerful advantage: they have the capability of engaging with their talent on a much more personal basis. As such, one question seems obvious – ‘Why don’t smaller firms start with the talent they have in-house?’ – The answer is that companies often don’t realise what capabilities are already in place but unused. The first step in winning ‘the war for talent’ is uncovering this untapped wealth of home grown talent by following a simple talent audit approach, which is especially suited for smaller businesses.

The word ‘audit’ is usually associated with understanding finances, not people, but an audit is exactly what is needed to effectively assess and manage talent within smaller organisations. Too many decisions about people are based on ‘gut feel’ when what is needed is an objective look at the potential of those within the organisation.

One of the most important actions that a smaller firm can take today to prepare for the challenges of tomorrow is to conduct an audit of their current talent. Not only does a talent audit provide invaluable information about the strengths and gaps in current talent, but it also allows organisations to be proactive in developing or obtaining the people that they will need to be successful in the future. As an added benefit, clear career development processes help to build loyalty with internal 'high potentials' who feel like their aspirations could be realised within their current organisation.

Employing a simple, yet strategic, talent audit of the existing people potential within the organisation could uncover skills that may need developing, but exist within those already in tune with the company’s brand values and culture. In addition to this, maximising the output of existing potential could cost businesses a third of the cost of recruiting new candidates. In this way smaller firms can retain their top performers without losing them to larger firms, while ensuring that any recruitment decisions are based on a sound understanding of what the company needs.

No matter the size of an organisation, the result will remain the same - the more resources you invest in an employee, the more they will invest in you. SHL is a world-leading provider of objective, scientific psychometric assessment and development solutions that helps companies around the globe to select, recruit and develop the best people.  SHL has established the SHL Partner Network (SPN) to service the needs of small and medium sized organisations. In the UK there are more than 350 SHL partners who can offer assistance, consultancy and expertise in SHL tools to select and develop the best talent for your business.

Maximising talent – with the help of SHL’s community of trained experts, simple steps can be followed to enhance current practices and help prepare for the ongoing shortage of talent in smaller companies.

1. Write a talent map
The process begins with taking a closer look at your business’ people, making a note of those skills, abilities and behaviours (competencies) that you think are required from them to help deliver your long term business strategy. For example, do you have too many people with strong technical skills and not enough big thinkers? SHL finds this to be a critical first step to ensure that your ongoing talent management activities support corporate goals.

2. Critique current context
You can get a clear view of your talent reputation, by asking how fulfilled, engaged and motivated employees feel. This could be done through an employee survey and take an honest look at the answers – Does your organisation have work to do? Do employees at multiple levels feel confident that they have room grow their careers without looking at other firms? Is there scope for improvement? How many leaders of the future could there be within the organisation? Your processes for identifying and “fast-tracking” undiscovered talent in your organisation may also need to be reviewed.

3. Conduct a talent audit
Along with the results of the employee survey, use of SHL’s Occupational Personality Questionnaire (OPQ), Motivation Questionnaire (MQ), and ability tests can also help smaller organisations to obtain a measure of a person’s potential and their fit for future roles and responsibilities. Taken together, the assessment results can enable you to understand the talent in your organisation – at both the individual and group level – and match it to those required as per your talent map. SHL’s Partner Network, SPN, can provide consultancy in your area and field with the help of our qualified experts to analyse the output of these assessments.

4. Create a talent strategy
With the help of an SPN facilitator, schedule a day with your senior managers to review the talent audit results and create a talent strategy with real targets that all can commit to. The objective is not to solve the talent challenge for the whole organisation at once. Through the facilitated discussion, prioritise initiatives by identifying areas that address significant pain points and that have the most impact on strategy.

Finally, integrate talent management into quarterly business reviews and remember, when addressing talent in your organisation, above all else be bold. Act like your business depends upon talent - because it does.

 

The uptake of group private health schemes continues to grow as employers realise their staff can be treated quicker privately. Modern diseases like stress and backache are not areas the NHS caters for best

 
The figures do not surprise Ben Wilmott, policy adviser at the Chartered Institute of Personnel and Development. “Smaller companies tend to have lower levels of absence because it’s easier for people in a small workforce to see the impact of their absence on colleagues and friends,” he says. “Managers and owners are also likely to have closer relationships with the people they manage.”
 
No pay, no gain
It’s not just loyalty and altruism that keep employees at work, of course, but the lack of sick pay too. Statutory sick pay only kicks in after four consecutive days of illness and is £70 a day; hardly an incentive to stay off sick. This compares unfavourably to the full pay that employees in the public sector can enjoy for long stretches, although many small firms will also pay staff their normal rate.
 
Whether it’s down to loyalty or financial hardship of employees, small businesses may encounter the opposite problem to unexplained absenteeism: that is, staff returning to work before they are better. “The danger with a small company is that you have a driven manager and a loyal team. You have to be clear in this situation that employees should stay at home until they are better,” advises Wilmott.
 
Even motivated businesses are prone to the odd ‘sickie’, however, and there is a danger that these can mushroom into a prevailing culture. Joanne McCarthy, an adviser with Workplace Health Connect, a free advisory service of the Health and Safety Executive, cites a nursery that rang the advice line because it was plagued by staff frequently going off sick.
 
Workplace Health Connect gave them business advice such as putting in place some basic processes such as logging sick leave and conducting back-to-work interviews. “Sometimes just knowing that they are allowed to interview staff about health is a huge relief for employers,” says McCarthy. “After all,” adds her colleague Louise Bisdee, “the contract between employer and employee is about work and so an employer is entitled to know if there’s an ongoing health issue.”
 
No margin for error
Even with small companies’ good track record on sickness absence, there’s no room for complacency as unexpected absences hits them far harder than their larger rivals. “Without warning a small firm can find itself without a large proportion of its workforce,” points out the FSB report.
 
“Just one person being off work can have a disproportionate effect: one out of 10 workers is 10% of the workforce,” says Tim Baker, commercial director of Norwich Union Healthcare. The fear of being hit by a wave of staff absence is behind the growing popularity among small firms for taking out private health insurance policies for staff, which Baker claims is growing at 4% a year.
 
“The uptake of group schemes continues to grow, even at a time when the NHS is investing, as employers realise their staff can be treated quicker privately,” he says. “Modern diseases like stress and backache are not areas the NHS caters for best.”

Health insurance also provides a degree of protection against ‘presenteeism’, a situation where sick employees come to work but do not function at their optimum. Like other health insurers, Norwich Union offers cover in a modular format with companies able to choose from a menu of options including more hospital cover, psychiatric treatment, dental and optical care. A basic package for five staff would come in at around £1,200 a year.
 
Like dealing with an illness itself, the key to tackling problems of staff absenteeism is to recognise that it exists and to make small alterations to tackle it (see separate box). Small companies may be leading the way in tackling the issue but by ensuring staff know bogus sick leave will not be tolerated and helping genuine cases to return to work as quickly as possible, small businesses can make themselves even more competitive