Small Busines: businesses

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Sunday, March 3, 2013

How small businesses can take advantage of online services

Are you making the most of internet resources? Kjetil Olsen of Elance Europe explains how small businesses can use the opportunities available to them

Despite the economic climate, aspiring entrepreneurs should be feeling cautiously optimistic. In 2012, the government announced new start-up loans for young entrepreneurs, a scheme that has since been extended, and numerous incubator schemes are making it easier for businesses to get started.

Alongside these offline opportunities, the web is also ushering in a new range of opportunities to help small businesses access knowledge, tools and even personnel, all available at the touch of a button. The growing prevalence of user-friendly online services allows businesses to reduce overheads and maximise growth potential. Small tasks can be taken care of with free open-source software, and cloud-based premium services can be cheaper than their offline counterparts.

The difficulty with such an insurmountable number of online tools is knowing where to start. Which tools actually streamline efficiency rather than introducing added complications? Through my experience working in the technology and employment sectors and as European vice-president of Elance, a platform for online freelancing, I've spent a lot of time considering the usefulness of the internet and how it can benefit businesses. Here are my top tips:

Office space

Web-based office suites such as Google Documents allow businesses to make paperless collaborative working the norm. This enables employees from around the world to contribute to a shared spreadsheet and access documents created hundreds of miles away.

Combined with online storage providers, such as Dropbox, Google Drive or Box, sharing documents with colleagues, clients or customers is easier than ever. These services allow businesses to synchronise data and upload and retrieve files via the web. As soon as a file is uploaded, the latest version is available on all devices, including PCs, Macs and most mobile devices. This allows businesses to take the first steps towards having a global set-up, supporting genuine and effective remote working.

Staffing a team

Online employment platforms such as Elance allow businesses to hire talented temporary workers for a variety of tasks from translation and business writing to fixing code on your website. Hiring freelancers who work remotely is an easy way to reduce overheads and quickly increase your workforce in times of high demand. Hiring a cloud-based workforce cuts costs, allows you to react flexibly to times of high demand and opens the door for freelancers to global business operations.

Communications

Internet voice-over networks, which deliver voice communication over internet protocol networks, are a great way to keep phone bills to a minimum. Skype or, if you're on the move, Footalk, offer options for making free calls to anywhere in the world. Some services also offer free video-conferencing to add a visual element to a conference call, linking teams together, irrespective of location.

Some of these services also offer calls at reduced costs to mobile phone users who are not using the app, meaning that even external communication with clients or partners can be cost-effective.

Managing your brand's identity

A solid visual brand identity is vital for startups. In a crowded market, it's important that professionalism and user-friendliness allow your business to stand out from the crowd. Additionally, establishing a thought leadership position is more important than ever in the online age, and a blog can be a great way of showing potential customers you're ahead of the competition. Easy-to-use publishing platforms such as WordPress or Joomla allow you to add as many themes as you like and can be simply integrated into your website.

Sales and marketing online

Online press office services such as MyNewsDesk give any company a platform to host news announcements and demonstrate that your business is ahead of the curve. Social media is also a valuable tool to spread marketing messages to the masses. Facebook, LinkedIn and Twitter have been successful lead generation tools for many small businesses I've talked to.

It's worth remembering, though, that social media is a two-way process. No longer can companies be seen to be simply pushing out press releases; you have to engage with your audience and demonstrate knowledge in the industry.

Physical meetings are important too

The internet is a vast wealth of resource, but it's worth remembering that the digital route should only be one part of your business strategy. Building strong relationships through face-to-face meetings is invaluable and should remain a key part of building a network of suppliers and teams. Therefore, finding the right balance between the online and the offline strategy for your business is crucial.

Kjetil Olsen is the vice-president of Elance Europe

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Why there is an appetite for food businesses

One of the most popular startup sectors is food, and but why do such types of small business attract so much interest?

From cheesemakers and cupcake bakers to farmers' market traders and street food vans, recent years have seen a sharp surge in small food businesses with a focus on well-sourced high quality ingredients and personal service.

David Matchett, market development manager of London's Borough Market has noticed the rise in interest. "There's always been an interest in food businesses, but we have definitely seen an upturn in the number of City professionals who have become disillusioned with their career, want to be more independent and look to follow their own dreams," he says. "We also see people who spend their redundancy package on starting a small business."

As a sound artist Ole Hansen was finding it hard to get funding; he decided if he started his own business he could at least fund his own projects with the profits. After six months planning he launched Hansen & Lydersen, his salmon-smoking business, in an outbuilding of his house in London.

"It's not the most obvious thing to do in a city, but I never thought, 'it's weird to smoke salmon in London'. I had not done it in Norway, but I am a very technical person and I am good with buildings. So I didn't see the potential pitfalls; I was focused on how I was going to do it," he says.

Back to basics

Hansen believes customers' interest in small artisanal businesses is a natural development. "We are used to all this horrible plastic and tackiness and I think we are so sick of the ordinary," he says. "The trend is for people just making one thing and becoming very good at it. It is like a loop – the artisan is back."

Ben Mackinnon, who launched E5 Bakehouse in an old railway arch in east London three years ago, says this wave of small food businesses is a response to capitalism. "If you are buying a product made from well-sourced ingredients you know that you are supporting sustainable farming system, which improves biodiversity, you support local employment and more skilled employment and people who take pride in what they do."

He is one of many in the sector who launched his business after feeling little satisfaction in his career. "I was working in sustainability and renewable energy, but I wasn't really enjoying it and I wanted to do something entrepreneurial," he says. "I get a great deal of satisfaction from producing something and manufacturing and retailing – those things really stimulate me."

Petra Barran, the founder of street food trading association Kerb, says the personal contact between customer and trader is key in these businesses. "It's about the people and the stories behind the product; the whole experience. It is one of the reasons the street food industry is successful right now," she says.

Routes to market

Both E5 Bakehouse and Hansen & Lydersen have grown organically and picked up business through meeting customers and word-of-mouth.

Mackinnon started out speaking to people about his product in local shops. Soon he was getting orders in and after first baking his bread in the oven of a nearby pizza shop he moved into some railway arches and built his own wood fired oven. Today E5 Bakehouse serves 35 shops and restaurants and also has local deliveries by bike.

Hansen took the same face-to-face approach. "I had lists of good chefs, bad chefs and extremely good chefs as I went round knocking on their doors introducing myself as a smoked salmon producer in London and asked them to try my product," he says. His customers now include restaurants, punters at food markets and visitors to the smoke house.

Easy access for startups

Hansen was well into his project by the time he thought about practicalities. "The big question was, am I allowed to smoke salmon here? I didn't really think about that until I was really far into the project," he says.

It turned out he was fine. "As long as you're in a B2 unit you can do it. I needed the food hygiene standards of course, but that is no big deal. People can think all this is so difficult, but it's no more difficult than taking a driver's license so whatever you want to do you can do it."

The Food Standards Agency and local authorities can answer any questions budding food entrepreneurs have and if they choose to go down the route of trading at markets, many offer support for development of the business.

In fact the increase in food markets has made it much more accessible. Matchett says it's the perfect way in for anyone looking to start up in the food sector. "Starting out your business in a market means you don't have the overheads of taking on a shop and it gives you an opportunity to ask yourself: 'Do I really want to do this?'," he says.

His advice is to speak to other traders, be it in the market or on the high street.

"Don't believe that because you have an amazing product or you have amazing skills that you have what's needed to get the product sold," he explains. "The product should sell itself but you still need to know who the customers are, what they want and what their expectations are."

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Outsourcing for small businesses – Q&A roundup

Last week, a panel of experts shared their tips for SMEs looking to outsource work effectively. Here are some highlights

Ella Gascoigne is the founder of Startup PR

Why do everything yourself? If you have faith in your business and want to grow it then you should consider outsourcing from the off. If somebody else is better than you at something, then why not let them do it and concentrate on the things you are great at.

Don't jump into a contract: When you decide to outsource you need to ask a lot of questions to check; not only they can do what you want them to do but also that your personalities and ways of working are complimentary. If you are the kind of person who needs daily updates, then you are not going to work well with somebody who gives you a monthly update.

You also need to be clear exactly what you expect and also ask them what they can offer. Take a PR agency for example – don't be afraid to ask them to see proof of results, testimonials, lists of contacts that they have strong contacts with.

Aylish Jarvie is the community manager at PeoplePerHour

You could benefit from starting early: Many SMEs would probably benefit from outsourcing from the moment they start their business. Business owners are expected to have multiple skill sets and juggle many tasks on a daily basis. It's just not realistic to think they'll be expert at every single one. Whether it's accounts, branding or marketing, you probably won't want to hire an employee straight away for these tasks, so it makes sense to use freelancers, leaving the business owners to concentrate on other parts of their business such as winning new clients.

Katherine Ogilvie is a consultant at the Fountain Partnership

Outsource for a reason: Outsourcing can be considered at an early stage if it helps increase productivity. At the Fountain Partnership our focus has always been on ROI [return on investment] for our clients, so if we're working on a big project that involves a lot of copywriting it can often make sense to outsource some work to make sure the copy being produced is fresh and engaging. It can be a great time-saving option for startups who want to offer clients more. It also can give them the opportunity to work with bigger clients and still give their projects the attention they deserve.

Kirsten Glaze is head of virtual operations at the virtual PA company Time Etc

It can be hard to let go but worth it: For any business owner it can be emotional to let go of a process or task that has been previously cherished. However, it can also be very satisfying working with someone who can offer their own expertise and skill set.

Neil Murray is the founder of Sussd.it

Use word of mouth to find the right people: When deciding who to outsource to, I would start by asking around your network and contacts and discovering if others have outsourced, and if they have who they would recommend. By asking in your network and industry first then it is likely that the outsourcing company will have relevant experience in your area as well as being trusted in it.

Sometimes it's worth training your own staff: It all depends on the organisation's individual circumstances, and the function in question. There are of course negatives as well as positives to outsourcing, and these all need to be weighed up before deciding whether to invest in outsourcing or hiring a member of internal staff instead.

Bill Little is the European director for freelancer.co.uk

Be aware of your possibilities: Many SMEs don't know that they can outsource, or that a job that they are struggling to do themselves can be done competently by an expert freelancer. The best approach would be to think about what you need help with, such as a smart database to improve efficiency, or an e-commerce site, or even just have a look over an outsourcing site and see what other jobs are being posted by SMEs to get some ideas.

Be clear on your brief: However, as you start working with a freelancer and see the project developing, you may want to redevelop aspects of the job, so it is good to ensure the freelancer understands the need to be flexible. Outsourcing websites offer a system of milestone payments where you can pay the freelancer as different parts of the job are completed, ensuring you have full control over the outcome. Outsourcing websites also provide live reviews and examples of previous work the freelancer has undertaken, providing you with the confidence that you are hiring someone with a proven track record.

Louis Fairfax is managing director of CUB

Dealing with a budget: I don't believe there is an easy formula in terms of what you should prioritise. There has to be some level of judgement in terms of what feels like the most logical or beneficial area that just cannot be covered easily by internal sources. In terms of a budget, outsourcing should be more cost effective but sometimes the ROI can be over a long period of time. There is also still a lot of funding for small and growing businesses out there, you just have to look in the right places.

Martyn Hart is the chairman of the National Outsourcing Association

Outsourcing is not a religion: You should think about it along with all the other things, but usually there is a business driver, something you can't get done yourself, or it's taking too much of your time and not contributing to your business. I've found that some SMEs don't have time to think about core and non-core skills, but rather outsourcing is often triggered by an event, maybe winning a big order. That makes them think about how they are going to do things.

Outsource to the right people: They should understand the market you are in, it shouldn't be a company or agency so big that you are just lost in the noise, but it should be big enough to give you traction. Make sure you find the rates acceptable (payment by results is often preferred), and find a service that gives you control at a management level, without having to micromanage.

Get the legalities right: To draw up a contract you really need a lawyer. If it's a large contract then your business case would have already included costs for legal support. But for small contracts you don't need a big city firm, your local solicitors can help. Before you engage them try to agree on what it is you want to do with your potential supplier. If you can get this as a list of bullet points, that will help your lawyer, save their time (and your money) and maybe you would be able to split the costs if you both use the same firm. Although I hesitate with this last tip, because really its always best to have your own advice or lawyer as you never know what lies ahead.

This content is brought to you by Guardian Professional. To receive more like this you can become a member of the Small Business Network here.

Sirena Bergman

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Friday, March 1, 2013

Live Q&A: Online retail for small businesses

Join our live chat at 1pm on Thursday for expert tips on internet selling for small businesses
• Sign up here for details of upcoming live Q&As

Whether I'm looking to replace a winter coat which is falling apart, buy that book I've been meaning to read for months, or do a standard weekly food shop, Google is my first port of call. The fact that you type in what you want and it can be on its way to you within minutes is something which most of us take for granted.

In fact, according to the Organisation for Economic Co-operation and Development (OECD), the UK is the biggest online shopping nation in the developed world, as 60% of us resort to the internet when there's something we need to buy.

With this consumer trend on the rise, it's no surprise that 2013 is predicted to bring in even higher sales for online retailers. But despite optimistic forecasts, the online shopping market is becoming more and more competitive, so how can your small business stand out from the crowd?

Whether you trade exclusively online or this is a way of driving customers into your store, there are a number of things to consider, from making sure your website can take payments securely, to having a good delivery method, optimising your design and making the most of your resources.

To advise on all these aspects of online retail, we've compiled a panel of experts on answer all of your questions and share their tips and expertise. Join us on Thursday 28 February between 1pm and 3pm for a live Q&A and post your question in the comments section below.

Here is this week's panel:

Phil Dorrell is the director of Retail Remedy, a retail consultancy which advises SMEs in the industry on how to grow their business by increasing sales.

Jon Buchan is the CEO of Render Positive, a digital marketing agency. He is also an entrepreneur, having started his own business at age 17.

Martin Woods is SEO manager at Blueclaw, an ecommerce site development agency, which advises SMEs on SEO (search engine optimisation), PPC (pay per click) marketing and social media.

Aaron Gilboe is projects director at Last Exit, a digital design agency. Aaron has worked with a number of big retailers to help them increase online sales.

Neil Murray is the founder of Sussd.it, a company which provides a freelance sales agent to startups and SMEs. Neil has experience in selling and marketing new products.

Chris Barling is the founder of SellerDeck, an e-commerce software provider. He is also the author of three books about online trading for SMEs.

Nish Kukadia is the co-founder of the designer flash sale website SecretSales. Nish set up the website six years ago, and has grown the business exponentially since then.

Alan Beesley is the director of Thrive Vitamins, an SME currently trading online. Alan had 20 years' retail experience in sales and consultancy before starting his business last year.

David Roebuck is the sales director at Direct Blinds, a small family business founded more than 40 years ago which now sells its products exclusively online.

This content is brought to you by Guardian Professional. To receive more like this you can become a member of the Small Business Network here.

Sirena Bergman

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Rural businesses: best bits from our live chat

What's it like to run a rural business? A panel of experts recently discussed the benefits and drawbacks of starting a business in the countryside

Carolyn Frank is vice-chair of the Helmsley in Business group

Social media is even more important in rural areas: I think social media is essential as a small business tool, and is especially beneficial in rural areas. It overcomes isolation - think of it like your office community. Use it to find services, trial ideas, make contacts and cheer yourself up on bad days.

Make the most of your community: We know all our postmen and women by name, and get a great service from them. It's the same in the local shops - you don't just get a tin of paint, you get advice on what type to buy, how to use it, how to clean up afterwards and so on. That goes for most products in all our local shops.

We have looked into group buys by starting Helmsley in Business, where more than 40 diverse businesses have grouped together. This is extremely helpful, for example when buying advertising from large magazines we have got better rates for all of us. When you are in rural business you aren't alone, but you have to talk to other local businesspeople to move forward.

Chris Hillary is the founder of Fitness Frenzi, a Zumba fitness provider

Rural businesses have their benefits: I have purposefully chosen to work in rural areas because urban ones tend to be well catered for within the fitness sector. I wanted to be niche.

Also, the fees I pay for the use of village halls tend to be so much lower. For me, rural is a plus, but I can imagine that online businesses would find broadband speed a major issue. The other benefit I find from rural locations is the parking is rarely an issue. My customers can park for free most of the time.

Tim Stanger is the owner of Vinyl Clocks, an internet retailer turning vinyl records into clocks

Do your research: The issue of broadband speed was certainly the most important for us, as you can imagine. Before we set the business up in its current location we had to ensure that there was sufficient connection speed. There is a postcode search available, which will give you the expected speed, but there is nothing better than talking to other businesses or residents in the area to validate these figures.

Barney Jones is head of brands at XLN Business Services

Work around your broadband issues: If broadband is critical to your business, find out the local speed before you locate. Ask a specialist business provider what speed to expect and the availability of fibre-to-the-cabinet, as you'll get a sales person used to dealing with commercial premises and concerns. Also check the physical location of the telephone exchange. If it physically very distant, that could be a problem.

Make sure any internet connection is set up properly in your premises. We still see quite a few problems where WiFi is used but with physically thick walls blocking coverage or where filters have not be placed on phone sockets.

Target your advertising: With Google Adwords you can set a very small radius for your keyword advertising which might help.

Mike Cherry is national policy chairman for the Federation of Small Businesses (FSB)

Parking is also worth considering for some businesses: We want people on the high street, yet if they have free parking in an out-of-town shopping centre, they aren't incentivised to shop elsewhere. At Christmas we saw a number of local authorities provide free parking on a Saturday or for few hours after work to encourage people to shop on the high street, but is that really enough? Our survey figures show that more than 50% of small firms say the availability of parking negatively impacts their business, and 49% said the cost of parking negatively impacts their firm.

Murdoch Mactaggart is managing editor of Ingenious Britain

Running a rural business needn't be more challenging than an urban one: Perhaps the central issues for any business are firstly, who are the customers; and secondly, how does one contact and deal with them. Do these customers need to visit a shop? If they do then it's harder for a business based in Hammersmith to attract customers from Hackney, than it is from Yeovil to Bridport for instance.

Can the product or service be delivered by person or by carrier? Is it a knowledge-based service, in which case it doesn't matter in the slightest (broadband provision excepted) where you are? I live in west Dorset, liaise with a publishing company in north London, with a designer even further out and with clients all over the UK for a magazine (Ingenious Britain) printed in Sheffield.

Community incentives are great for rural SMEs: The village of Shipton Gorge took over their local pub a couple of years back when it was going to close down. Apart from drinks and meals the pub now carries small supplies of bread, milk, butter, tea and the like, and also deals with prescriptions, dry cleaning and some other things from Bridport or elsewhere. There are many hundreds, thousands even, of these types of community initiatives throughout the UK and these can often work well with other local startups or small rural businesses.

Diane Hannah is a co-founder of Herdy, a giftware business

Being rural is an asset for some businesses: When we launched five years ago we found that being located in a rural area, albeit in a national park, became a real asset. Visitors from all over the world come to the lakes and we found that this gave our brand enormous exposure, far more than if we'd been located in say, an industrial town. Initially we were selling to shops in the local area but retailers visiting the Lakes on holiday saw our products and enquired if they could sell them in their shops once they returned home. We now supply retailers from the Shetlands to Cornwall.

These are extracts from the live Q&A we held last week, which focussed on the issues affecting business owners in rural locations. You can share your experiences or suggestions in the comments section below.

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Sirena Bergman

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What do small businesses need to know if they are exporting to new markets?

We asked five small business owners trading abroad what they had to come up against when exporting, and how they overcame these barriers

Adam Unsworth is the sales director at Plastic Card Services Ltd

An agent can help: Finding the right exporting agent can alleviate a lot of concerns regarding language, local business etiquette or laws. It also helps increase customer confidence and provide reassurance they have a contact close by, which in turn can assist with day-to-day communications.

Think about currency and exchange rates: Fluctuating exchange rates can also be an issue: any business trading internationally is at risk of reduced profits if it does not pre-plan for possible swings in exchange rates. Changes in currency can price you out of the local market. The most sensible method of reducing risk is to forward fix the value of the order with the bank for an agreed period.

Be aware of having to wait for payments: The number of debtor days that can be expected from exporting with a new country should always form part of the new market assessment. We've previously discounted countries because of major disparities between our requirements for efficient payments, and the expectations of the local economy.

Geraldine Abrahams is the director of TWM Productions, which launched its first infant development product, Tummy With Mummy, just over a year ago and now sells it around the world

Shop around: We discovered quickly that it's difficult to get low transportation rates that larger companies can negotiate because we can't promise the same volumes and frequency that they can. The cost of transporting goods can vary widely, and it makes sense to shop around for the cheapest freight deals.

Misunderstandings can happen: We discovered that business transactions can be thwarted by misunderstandings about different types of shipment. Our first shipment to the Middle East was accidentally logged as ex-works (instead of free on board) by the buyer, so we had to pay for the products to get to the ship.

Think carefully about quality control checks: In one situation, we initially had trusted the internal quality control check at the overseas factory where we were sending a shipment, but on advice, we had an independent check carried out which failed. We would almost definitely have lost a valued customer if that shipment had been exported.

Janan Leo is the founder of Cocorose London

You might have to chase clients for payments: Minimising risk when exporting can prove expensive as clients are more difficult to chase up. Will your new clients be willing to pay a deposit?

Will there be extra costs involved? You may have to consider import duty and taxes your client will face and the extent to which that makes you competitive. We've found that in the USA, stores would rather draw on stock from local warehouses than deal with the red tape of importing. To overcome this we offer delivered duty paid prices.

Find good partners: The key to trading in new markets is research and identifying the most appropriate partners. We look for sales agents and distributors we can work with, who understand the brand, our values and are passionate about helping us develop.

David Williams is the chief executive of Taylor Bins

You need to consider more than just the product itself: A business may have a fantastic product but if it doesn't have the processes in place from a financial, logistical and compliance perspective, then it's unlikely to succeed. Similarly, businesses can be so close to their products that they fail to take an objective view when it comes to how suitable their product is for the target market. You should constantly be questioning your product's relevance in these markets.

It's better to have in-depth knowledge of fewer markets: Don't try to take on too much at the beginning. Rather than adopting a far and wide approach, limit the number of markets to maximize your available resource. This will enable you to gain a greater understanding of a few markets as opposed to learning a little about a lot.

Matt Roberts is the co-founder of Bean2Bed

We had to adapt: Due to the size and weight of our products (we use a high-end foam filling in our mattresses as opposed to polystyrene balls), finding the right courier partner was important. Price was important to us as we didn't want it to be a barrier for our customers abroad. In order to export our beanbags, we had to create a new box size and ensure that our products were vacuum packed efficiently.

Modern technology can help you communicate: Communicating with customers can also be a challenge, but using modern technology such as Skype and translating software we're able to get around this.

This content is brought to you by Guardian Professional. To receive more like this you can become a member of the Small Business Network here.

Emily Wight

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