Category Archives: Running a business

Where I get my best ideas!

Business ideas Business gets ever quicker and there’s never a time now when we aren’t connected and “on-call”. It used to be that if you were on a train or car journey, there was valuable down-time where you could ruminate on life and free your mind to come up with new ideas.

It’s good to keep busy – right? Mobiles and wi-fi are a boon to productivity – yes? Well certainly they are, but I’ve noticed that many of my more original ideas have been coming when I’m away from the connected world.

In my case it’s when I’m out running. There’s something about the comatose state that I enter after the 3rd mile that allows my subconscious to work on problems and ideas to pop into my head.

People used to say that ideas came to them in the bath and it’s well known that Archimedes ran naked down the road shouting Eureka (I’ve got it!) after he had his big idea when in the bath. But who’s got time for baths now days in a world of much speedier showers.

It takes willpower to step away from your desk, put the phone on answer and take half-an-hour to yourself, doing nothing obviously to do with the business and allow a bit of time to free up your mind. That’s when the good ideas come.

Okay you may not want to go for a run, but a walk or other activity, that gives a break and relaxes the brain to be creative is time well spent. I don’t think it can be an activity that is imposing its own demands on the brain, such as a competitive game, or watching a movie. It has to allow an almost meditative feel.

This is just my observation, but with so many demands on our time, scheduling regular opportunities to be creative has to be built into your week. Otherwise it just won’t happen. Making it a regular activity, rather than when (if) you have a chance, means it will be more likely to take place.

That’s the beauty of going for a run; it’s a regular time commitment. Going for a walk or the gym a couple times a week can serve the same purpose, if you schedule it in. It’s much more difficult to sit at your desk and say: “I’m now going to switch off for a while to be creative”.

I’m sure there are loads of other ways of getting those idea juices flowing and you need to find the one that works for you.

Getting sales – the single biggest issue for a small business – Part 2

Businessman waiting for sales

Last week I talked about having a simple sales & marketing plan for your business. It doesn’t have to be particularly fancy, but you should have bounced ideas around with your team (find someone to do this with if a sole trader) and written it down. The act of documenting it is important, clears up muddy thinking and gives you something to work with.

Given your product / service is competitive, you’ve ensured that it has unique qualities and should sell, the next thing is to have potential customers know about it (simple isn’t it). You tell them by using PR (see how to get free PR), marketing and advertising, so that they come to you (called “pull”). Then you also go to them, by direct sales techniques like mailshots or leaflets, telesales, salespersons’ appointments and exhibitions (called “push”).

You may be thinking “well that’s not rocket science” – and it isn’t, but most small businesses don’t lay out a plan for doing these simple activities.

Can all this be done for nothing? Probably not. The term “guerrilla marketing” became popular a few years ago to describe how you can obtain publicity by unconventional means using creativity rather than money. This is now largely taken over by the idea of viral marketing, where a low cost web video for example, can suddenly take off and make a product well known.

However, if you are going to grow a business, you are probably going to need to budget for marketing and sales expenses. It needn’t be a huge amount and the budget can start small and grow in line with increased revenues.

All of your efforts though will be wasted if you are aiming your messages to the wrong people. Not only wasted, but expensive. It is much more efficient to use a focused campaign to an exact audience. The cost of advertising alone will be much less if you are only taking out ads to a small precise group of potential customers for a product that they particularly want.

Some of you will know this as market segmentation and it is important. You need to understand exactly who your customers are and split them down to addressable groups. These groups may have slightly different aspects to them. They may have different ages, backgrounds, location and needs, which will allow you to tailor your marketing exactly to each group. Address first the easiest to win and use the revenues and testimonials from that to market to the next group.

In a blog you can only give so much information and I’ve probably reached that by now. The key message I’m giving is to get a sales and marketing plan laid out (see Essential marketing plan content). The very act of brainstorming the content and putting in place measurable actions will galvanise your sales activity. You’ll feel more enthusiastic and in control than ever before.

If by chance you missed it, here is a link to Part1.

Getting sales – the single biggest issue for a small business – Part 1

Waiting for sales

Hands up those who have more sales than they can handle? It does happen, but for most small businesses it is a constant battle to get customers.

You’ve got a good product or service; in fact you are probably very proud of the quality and cost effectiveness of your offering. But sales don’t seem to be coming in very fast. I hear this time and time again.

Occasionally when I look at what the business is selling, there are problems with the product, or poor customer service that over time results in less recommendations and repeat business. But most often it’s because no one knows about the company, or they are just being out sold by the competition.

So then I ask “let’s look at your sales & marketing plan”. There is usually either a silence, or protestations that the owner hasn’t the time to do such a thing. In fact most small businesses don’t have a plan, but instead place an occasional ad and go to the odd exhibition when they think of it.

Yet it needn’t take long to think through what you are going to do during the year to get better known and to achieve more sales.

A short session brainstorming ideas with colleagues / partners can quickly put the bones of a plan together.

Ideally it would initially address your basic identity (brand), what you want to be known for and what is unique about you (called the USP – unique selling proposition in the theory books). You may instinctively know that, but try putting it on paper and think it through.

Then, how are customers going to know about you? PR (public relations) isn’t just for the big boys, but it can be expensive. A typical minimum retainer for a PR firm to get you some visibility is around £1k a month and can be much more.

You have to choose wisely also, making sure that the PR company understands your market. I’ve generally been disappointed when I’ve seen the quality of PR that had done for companies.

As an alternative you can do your own free PR. It can be time consuming and that is a reason for using a carefully selected agency, but if you can’t afford an agency, don’t ignore PR, you can get some publicity very cheaply yourself. For our Company Partners members we’ve got a good resource describing how to do so “How to get free PR”

So what else should you be doing to get sales? I’ll look at that in Part 2.

Oh yes, my bit of sales…. Would a hands-on workshop, plus free business plan software and marketing tips help? Have a look at our next business plan workshop.

Business Plans – Top 10 most common mistakes

Business Plan Mistakes

As you can imagine, I see a lot of business plans and so does any Investor. While many are good, most are very poor indeed.

Here’s my top ten of most common mistakes:

Typos and spellings – it sounds small, but it is a killer. Now days there is just no excuse. My own spelling is atrocious, but I use a spell checker all the time. Use a spell checker, proof-read your work, or get a friend to proof-read it. Sloppiness in producing the plan will indicate sloppiness in your business.
Poor structure – again no excuse. There are templates and examples around, we ourselves run business plan workshops and there’s software that will structure it for you.
Executive Summary – people get confused as to what that is. It’s simply a short, punchy, straight-to-the-point summary of all else in the plan. About 2 pages, that is interesting enough and factual enough to almost stand-alone. After reading it, you should want to reach for the phone to contact the author, or at least feel you want to read more in the main plan. Although at the front, it’s the last section to be done.
No contact details on the cover page. Someone reading the plan shouldn’t have to hunt through it for contact details – put them clearly on the cover.
Over hyped – expressions such as “fantastic”, “unique”, “incredible” are meaningless and overhyping your product or service shows naivety. This is closely coupled to the next point…
Lack of evidence – if you state a market figure, or statistic, try and show where it came from. It gains credibility. Do real market research; don’t just ask friends and family (they don’t count).
No effort made to sell the product/service – the proof of the concept comes when you get sales. There are many, many, good ideas around, but not all of them are commercial. Will customers actually give you their cash for your product? Get out there and make some sales, show it will be bought.
Not using Appendix’s – cluttering up the plan with pages of market statistics is not conducive to having it read. No one will struggle through a badly organised plan, just mention the facts and refer to the full information in the relevant appendix.
No detail to the sales and marketing plan – it’s as though you think that the product/service will sell itself – it won’t. This is often the worse part of the plans we see.
Unbelievable and incomplete financials – We’ve all seen the “hockey-stick” projections, where in the first year the revenues are minimal, but then by golly they shoot up at an incredible rate. Having unrealistic numbers, or incomplete numbers, or contradicting numbers are all plan killers.

You will spend a lot of time writing a plan, whether it is an operational plan to grow your business, or perhaps to get funding, you may as well produce a good professional plan.

There is software that will help with this – see our review of business plan help, or come to our business plan workshop (my bit of marketing!) But why reinvent the wheel, if your business is important spend the few pounds and save time by doing it right first time.

On-line service to replace Business Link

So it is coming to pass. As I speculated back in March, the new government is to close Business Link.

Mark Prisk, the business and enterprise minister, has now said: “The regional Business Links have spent too much time signposting and not enough time actually advising,”

“We’re going to wind down the Regional Development Agencies, and as part of those, we’ll be winding down the regional Business Link contracts.”

The minister’s plan is to replace Business Link with a better state-funded on-line service, backed up with a call centre and more use of existing private business consultancies.

There was no time-table announced however and I wonder how they can do this in the short-term. For instance outsourcing giant Serco have only just taken over the running of the service in the south east in a three-year deal worth £80m and there will be contracts to supply the Business Link service through-out the country.

Whatever is implemented I hope it is done in a speedy fashion rather than dragged out. We will get to a position where Business Link services have to continue because the contracts are still in place, but no adviser wants to join them and the existing staff are demoralised because of the axe hanging overhead.

The planned on-line service replacement must be well thought out and effective. There is so much information on the web now days that just creating a government site that repeats this information will not do the job. It needs to be able to cover a vast range of issues in an accessible manner, catering from the inexperienced start-up, to established businesses looking for solvency advice.

Or should we be limiting the focus of such government advice centres. The original Business Link was set up to encourage new and very small businesses, but lately had targets set upon them that pushed their focus towards SMEs that had 5 – 250 employees.

There is an argument that an established business could better afford to engage consultancy advice from the private sector and that the free support (presumably on-line) should concentrate on start-ups and businesses with less than 5 employees.

I wait with baited breath to see the next set of announcements on timetable and focus areas for the new service. I just hope that like almost all government IT projects, the implementation of the on-line service doesn’t over cost and under deliver.

Little known advantages of owning a business.

Small business tax reflief Yesterday’s budget reminded me that there are still considerable tax benefits to owning your own business, beyond the normal personal tax choices of taking salary, or dividends.

The Chancellor has for a start not only continued with the Entrepreneur Relief Rate of 10% but expanded it up to a value of £5M. Now many entrepreneurs busy beavering away on growing their business, may not even know about this advantage. But if your hard work and persistence results in a successful business, you may want to sell it, or even just retire from it at some point.

When you do sell it, instead of paying the current Capital Gains Tax rate, you can just pay 10%. That’s a fantastic benefit and most people are not aware of it. There are of course certain requirements you must meet, such as at least owning 5% of voting shares in the company for longer than a year, so check with your accountant.

Interestingly it also includes selling just a share of the business, business property (not letting properties though) and your own property that may have been used for a business, so lots for an accountant to have fun with.

There’s more… how about not paying any Inheritance Tax (IHT) on a major asset left to your children, partner or beneficiary of your will? That is exactly the case with a business. If you leave your business to someone when you die (sorry to be morbid, but it’s important), the beneficiaries pay no tax on it.

Given you’ve worked hard to build the business up, it’s comforting to know that if the worst happens, your family or dependants could inherit that business without giving the taxman part of it. Not the case with most other assets.

There’s just a couple more reasons for being an entrepreneur and for a change hard work does get it’s rewards.

Why must a hung parliament mean doom for business?

Politicians in a hung parliament Well let’s first look at the terminology “hung parliament”. It is a term that is designed to send shivers down your spine. Hung, drawn and quartered, a hung jury, hung from the highest tree.

It provokes the public into a sense of unease, if not outright terror. The danger is that this sense of doom can translate into a self fulfilled prophecy with less consumer spending as the public starts to gird their loins against the terrifying consequences of politicians having to put aside party self-interest in order to work together for the good of the Nation.

Yet need it really be like that? Apparently we are paying a good level of salary and additional benefits in order to attract the brightest of people to be MPs. People who say they put the interest of the Nation before all else. Yet we are fully expecting them to act like unruly gangs in a school yard, destroying the play equipment and breaking the school windows.

Shouldn’t we instead insist that they act like the intelligent public servants that they claim to be and put away the sling-shots and stones in order to work together to run the country.

While it was necessary to scaremonger about “hung parliaments” during the election campaign to stop the public from voting for that nice Mr. Clegg, it can stop now.

Germany’s three main parties work together as a coalition government, Greece has a single party. Which has the stronger economy?

With all that has happened recently to destroy the public trust in members of parliament, now would be a good time to show that they can after all behave responsibly and help to grow the economy, rather than see it wither for their own political self interest.

Customer service – who needs it?

Importance of customer service Britain used to be, shall we say, not great at customer service. But then everyone started to catch on that keeping a customer was less expensive (5 – 7 times) than finding a new customer. Good service also of course benefits reputation and public image.

So why would any company build into its systems anti-customer procedures? Or arrange for any customer contact to be one that turns the customer against the company?

Yet that’s what happened twice to me recently when contacting organisations. Admittedly the first one is a well known example of how to get it wrong, but even then the way in which their procedures and systems promoted a poor customer experience amazed me.

Who was it? BT I’m afraid and before you cry out “well what did you expect”, let me say that I have mostly enjoyed being a BT customer, but maybe that’s because I had little reason to contact them before.

Without boring you with details, it took numerous frustrating calls and 5 weeks to simply have our 2nd line moved to a new house. The issue was that BT’s systems didn’t allow the department that I had to contact, to pick up a phone and talk to the people that had to book and carry out the work. All they could do was send an email. No one knew if the email was read or being actioned. There’s also no way to give feedback, so they will never know how to improve their systems.

In the other case, I contacted Which? to change my address, however after going through several layers of automated call handling and being kept waiting 10 minutes on the one selected, with no end in sight, I decided I didn’t actually need their magazine that much and instead just cancelled the subscription.

Interestingly, the people I talked to in BT and Which? were polite and tried to be helpful, but their systems let them down.

It’s also strange that one can struggle to get through to a customer service department, to be thwarted in every way and yet you can get quickly through to the sales department.

As though existing customers are less important than potential new ones. Have we forgotten already the relative costs of acquisition versus retaining?

Generally in the UK we have now gotten pretty good at training staff to give the right service messages, but systems are often put in by people who are measured on cost savings rather than customer satisfaction.

If you are in the position of running a business never underestimate the importance of keeping customers happy, even after they have bought your products or service.

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