10 Tips for developing your Business in difficult times

In the midst of despair there is opportunity. As we start the new financial year, the financial markets are in a challenging state with banks needing to be supported to keep the economy afloat. Despite this, there are opportunities for you and your business to develop greater relationships with your customers and thrive amidst all of the predictions of doom and gloom. Don’t forget that we still need to eat, find somewhere comfortable to sleep and to have our basic needs met.

Outlined below are 10 tips that you could apply which could help you to thrive in the current climate.

1. Spend some time reviewing your goals and the vision you have for the business. What do you want?
2. Who is your ideal client? Remember the old 80:20 rule – 80% of your business is from 20% of your customers – do you know who they are?
3. Review your service offering, think about the problems your customers are experiencing and how those problems are affecting them. How could your business help to relieve their pain?
4. The gold mine of your company is your customer database. Do you have a nicely compiled email listing of your customers and have you contacted them lately?
5. Are you clear on what each customer is worth? Learn how to calculate the life time value of your customers.
6. Do you have a website? How is your website representing your company? Are you proud of it? In 2007 an IMRG research stated that online sales was expected to jump by 40%. The quality of your information and functionality of your site plays a crucial part in getting business See this link on how to make your PPC campaign work for you ..
7. Invest in the development of your self and your staff. Develop a culture of never ending improvement – e.g. presentation skills, networking skills, how to write winning tenders, confidence and leadership skills etc.
8. Develop a system to follow up leads after networking events.
9. People buy people – focus on building relationships with your team, your customers, invite your best customers out to lunch to understand a little more about what is happening in their world.
10. Seek an adviser or coach that can help you to identify the constraints that could be preventing the business from moving forwardAfter reading these tips, pick just one tip to start working on immediately and make a commitment to see it through to completion. Good luck

Morton Patterson

How to Survive Insolvency/Bankruptcy

Definition

• Sole trader : an individual or sole trader becomes insolvent when they have insufficient assets to meet their debts and/or unable to meet a specific debt when it is due.
• Limited company: when a business cannot meet its debts when they fall due, or value of assets falls below the level of its liabilities.

A bankruptcy petition may be submitted in the High Court or county court against a sole trader by one or more creditors who are owed over £750. A creditor owed over £750 by a limited company can petition in the High Court or county court for compulsory winding-up of that company. Common reasons for insolvency

• Declining revenue while costs remain the same
• Loss of a major customer
• ‘Over trading’ – rapid growth with insufficient working capital
• Poor credit controls
• Bad debts from customers becoming insolvent
• Increase in prices for raw materials or other major cost –i.e. rent
• Poor financial management

Limited Company

1. Directors’ Responsibilities

• It is illegal to continue trading if a company cannot meets its liabilities. A Director who knowingly allows a company to trade with no reasonable likelihood of avoiding insolvency may be guilty of ‘wrongful’ trading and as such be personally liable for losses incurred after that date and subject to prosecution under the Company Directors Disqualification Act 1986.
• Directors have to switch from their duty of care to shareholders to minimising loss to the company’s creditors.

2. Options

• Administration –administrator, must be Licensed Insolvency Practitioner, takes control of the company from the Directors and provides some protection from creditors while a recovery or restructuring plan is formulated.
• Company Voluntary Arrangement (CVA) – is a recognised legal procedure which allows a company to enter into binding agreement with unsecured creditors, detailing how/when debts will be managed and paid in either full or part. If a company fails to perform as expected, it is in default and the CVA will fail; liquidation is the normal consequence
• Voluntary liquidation – if the company is in serious financial trouble then the shareholders through a general company meeting can:

  i) pass a voluntary winding-up resolution stating that they cannot continue to trade due to its liabilities; ii) appoint a Licensed Insolvency Practitioner to dispose of the company assets and disperse net proceeds to creditors.

• Compulsory liquidation – where the High Court or a county court orders a company into liquidation following a winding-up petition from a creditor owed an undisputed debt of £750 or more. An Official Receiver is then appointed to dispose of the company assets, investigate the affairs of the company and formally report to the Secretary of State on the conduct of all directors over the previous three years.

Sole Traders - consequences

• Continuing to trade whilst knowing that you might be insolvent could be illegal
• A sole trader is personally liable for all debts incurred by their business.
• Once Bankruptcy Order made Official Receiver or ‘Trustee in Bankruptcy’ will dispose of all assets to pay creditors
• All business assets and personal property may be taken by the trustee and sold to pay creditors
• Whilst an undischarged bankrupt can carry on business as a sole trader, there are restrictions that remain in force until outstanding debts are paid or the bankruptcy time limit expires.

Source of advice

• It is important to seek professional advice at an early stage from a Licensed Insolvency Practitioner – South East Enterprise, a solicitor or accountant may be able to help you find one
• See also the Insolvency Service
www.insolvency.gov.uk and Companies House www.companies-house.gov.uk websites

Jeremy Hedger

Tips on Buying a Franchise

Subway, McDonalds and Molly Maid are a few of the household names that business owners have bought into as franchises. Franchises are available in many sectors covering well known names and growing brands.

Buying a franchise can be a less risky way into business. But a decision to buy the wrong franchise, or be stuck in a one sided deal could also be a quick way to financial ruin. Like any business venture careful research, planning and expert advice can help ensure the best chance of success. The good news for any budding franchisee (the term for someone buying into a franchise) is that there is currently a specific project providing advice and support for franchise start-ups.

The London franchise project is supported by the London Development Agency as part of its mission to support new businesses across the capital. In south east London the in depth support is being provided by South East Enterprise, through one to one advice and workshops. Attending the workshop will provide the essential overview on how to explore franchising, including key issues such as

• How to separate the true franchises from the scams
• Working out the total cost
• What key questions to ask
• Are your skills suited to the franchise operation

There are many issues to think about when buying a franchise and those that think they are buying a “business in a box” and taking the easy way into business should think carefully before committing to buy. One key question to ask at the earliest stage is “what does the franchise give me that I couldn’t develop myself?” It also pays to spend some time considering if the franchise name and brand is well known, are people aware of it, have many people heard of it? And of course a few online searches to see if there are any grumbling and complaining franchisees who may be lumbered with a bad deal.

For those who do their home work and get it right however the franchise model can be a partnership that works for both parties, a successful new business for the franchisee, and a growing brand for the franchisor. One such example is Gary Morris who took on a printing.com franchise in Orpington three years ago.

“When I was looking for a franchise to operate, Printing.com ticked all the boxes. The business suited my skills and experience, a proven business model, a quality range at competitive prices, the initial training and ongoing support. I have to say that the experience of working with Printing.com has exceeded my expectations and their network has gone from strength to strength with over 249 franchisees.”

Tony Goldstein

Tips for handling your Bank Manager

Here are my "Five Tips for Banking Success":

1. Know the name of the person responsible for your account, build good personal relationships with them and keep them informed of your business affairs - tell them the good as well as the bad news.
2. When you tell your bank about a problem, also tell them what you are doing to solve it.
3. Do not make promises that you cannot keep.
4. Monitor your financial performance and provide this information to your bank on a regular basis (record actual figures; compare actuals with the budget; record, investigate and address variances; update budgets in the light of your findings).
5. Do not exceed agreed facilities without prior agreement/consultation and always consider/discuss other funding options (i.e. factoring, invoice discounting, leasing and HP).

Graham King

Did You Bring Lunch?

It’s March 6, 1971 in Madison Square Garden, New York City, and Muhammad Ali, after 3 years out of the ring, was attempting to regain his Heavyweight Championship title from Joe Frazier.

Ali had previously been stripped of the title and not allowed to box during those 3 years because of his refusal to be inducted into the United States Army and during that time, Joe Frazier had become the Heavyweight Champion. After a gruelling first round, Muhammad Ali came back to his corner and said to his trainer, Angelo Dundee: "Did you bring lunch?" "What???" Dundee asked, thinking maybe his fighter was suffering from a concussion. "Did you bring lunch?" Ali asked again.

"No," Dundee answered, more uncertain than ever about the condition of his fighter. "Why?" "Because this guy hits harder than either of us ever imagined, and this is going to be a looooong fight!" Ali, would lose to Frazier by a technical knockout in the 15th round.

I thought it would be great to inject some humour into this newsletter as apparently that was a story told by the sports reporter Howard Cosell, but behind the humour belies some very important points about a champion – having a sense of humour and being prepared for the journey.

We are in the first couple of weeks of the New Year and the residue of 2008 - with the world wide credit crunch, the closure of major retail stores and businesses and thousands being laid off in many industries, 2009 could be a long year.

Which leads to my question – did you bring lunch? Did you bring a planner with you to give yourself a fighting chance to survive and thrive in 2009?

Having a plan can keep you on track, and be a point of reference. However, having a plan is sometimes not enough because with the best intentions we do not get things done in the time or the way they should be done and that is where having an adviser comes in. Whatever stage you are in your business development having an adviser can be a useful resource to help you to review your strategy; stay focused, and be held accountable to someone other than yourself. Having a coach can help you to look at what may be in the way of you getting better results, because Muhammad Ali as talented as he was had someone in his corner. Why not get in touch with one of our advisers at South East Enterprise who can help you to bring lunch.

Morton Patterson