Microbusiness Entrepreneur

71% of UK SMEs report late payments in the past year

by KevPartner on 15 April, 2010

As Microbusinesses, we often find ourselves as piggy in the middle. If your business is based around large ticket items or projects then you will, in all likelihood, have to pay your suppliers promptly but find yourself stuck as you wait for your client to pay. Big corporations are notorious for this and it’s been a particular problem for one of my companies: NlightN Multimedia. We develop media and elearning products for corporates and we have to pay other small companies who provide us with services: for example voiceover artists and video companies. At the end of the project, there comes a moment when you must hand over the working product and await final payment. This can take, literally, months and months to come through while you must keep your business afloat.

Research from NatWest and RBS shows that 71% of SME’s in the UK have suffered from late payments in the past year but less than half have done anything about it.

What can be done?

Change your business model so that you have many clients paying smaller amounts rather than a small number of large clients. This is difficult for micro businesses because it’s all too easy to become reliant on one or more big clients but the result is that these clients have complete control over your cash flow and this is bad.
If you can’t change your model, get staged payments. At NlightN, we insist on 50% upfront on all projects, 25% on delivery of the alpha version and only the final 25% at the end. Ideally, you should make sure that you can make a profit on the 75% you can be fairly sure of getting with the final 25% being, effectively, a bonus.
Consider offering a discount for early payment or using a credit factoring service. The latter is where a company buys the invoice from you (at a discount). You get instant money and they then chase payment and keep it.

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Search Engine Advertising picks up in Q1: Recession over?

by KevPartner on 13 April, 2010

Internet Marketing analysts AdGooroo have released their Search Advertising Report for the first quarter of 2010. Interestingly, it shows that advertising across all three major search engines (Google, Yahoo and Bing) has increased in these three months which is a good indicator that advertisers, at least, are more confident about the future.

It’s an interesting, brief, report and I recommend downloading it.

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Small Business and Social Responsibility: is the bottom line enough?

by KevPartner on 9 April, 2010

I found myself with an hour to kill last night while the wife was in the bath and, for want of any other choice, turned to Channel 4′s “How the Other Half Live“. This series is about contrasting the life stories and lifestyles of people at the top of the financial heap and those at the bottom. In this case, the story was introduced by the children: two rich kids (8 and 13 I think) and the 8 year old daughter of a single mum.

I consider myself pretty liberal, but if you wrote down the story of this single mum (a “traveller” who brought up her child in a series of caravans and, even, a horse box) I would have written her off as a waster. However, this “waster”, determined to give her daughter a better future, took and passed a law degree (she got a first) but, due in part to the competition for places and in part to the fact that she didn’t go to a private school or have the right father, can’t get a placement as an apprentice and therefore cannot become a barrister. [click to continue…]

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Finding Direction

by KevPartner on 31 March, 2010

Click here to listen

Who’d be a school/college/university leaver today? Well, I would for one as the range of possibilities open to people these days is exponentially greater than when I left school. At that time (in the 1980s), on leaving college you had two choices: get a job or go onto University (at which point you had two choices: stay at Uni or get a job). Although there were, of course, self-employed businesspeople, most people didn’t know one personally and it seemed that there were many barriers in the way. For example, being self employed meant, at that time, selling a physical product or service and that meant either buying expensive equipment or renting a shop and that meant borrowing money from a reluctant bank (or family member).

Today it’s different. It’s possible to get a business up and running for, say, £250. It’s easy to choose a business that you can run part time to supplement earned income. And then, at some point, to add another business or build that one until you have enough regular income to stop inhabiting the corporate rat maze.

And the sheer amount of choice, along with the questionable reputation of the internet and the multitudes of “gurus” all eager to sell you on the dream of easy money is what is leading to confusion and procrastination amongst the next generation of entrepreneurs. With so much choice, what do you do?

Well, you may have come across a book called Crush It!: Why Now is the Time to Cash in on Your Passion by Gary Vaynerchuk. If you haven’t then I strongly recommend it: I had read it within 24 hours and am now systematically applying its lessons to my businesses. Vaynerchuk’s style might be a little OTT for your taste (or mine) but there’s no denying his enthusiasm or his success.

He talks about three rules, in this order:

Love your family. As soon as I read this, I knew I was going to like the book.
Find your passion
Work your arse off

…and there’s a fourth, which is “patience”.

So, to find direction you need to think about this. If you didn’t need to earn money, what constructive activity would you devote your life to? What would get you out of bed early in the morning energised and carry you through the day enthused and excited? Whatever the answer to that question is, that’s your direction.

I get excited about the idea of building new businesses, either myself or helping others to do so. It’s like a puzzle to me, a very creative puzzle. I also love writing and programming. So I spend the majority of my day doing these things. I’m advising one young man to build a blog around his passion for horse racing, another to build a very specific t-shirt business and a young woman to build a business around her passion for history. Can you imagine spending all your time working on something that turns you on? Then do it! Vaynerchuk’s book is a good starting point but you’ll find this advice given by all of the industry’s most respected figures.

The key is not to be in it just for money: be in it because you love it. You might not make more, working for yourself, than you did as an employee. But you’ll have a great time doing it.

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How to mend a broken image

by KevPartner on 28 March, 2010

Toyota has had a rough time of it lately – entirely its own fault. The business world is replete with examples of companies founded on exceptional quality losing sight of this over the years and compromising the quality in the name of cost cutting. Anyone who’s read or listened to Stephen Covey’s “The 7 Habits of Highly Effective People” will be familiar with the “clam chowder” story. Having watched the TV series going behind the scenes at John Lewis, I found myself wondering whether they, too, are running the risk of losing their distinctiveness in the name of cost reduction (eg “just in time” stock management is risky). [click to continue…]

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9 out of 10 small firms unhappy about the Budget

by KevPartner on 26 March, 2010

A press release from the Forum for Private Business says:

More than nine out of ten smaller businesses were left disappointed by this week’s Budget, a snap poll has revealed.

In a survey of its members, the Forum of Private Business found that just 5% believe Alistair Darling’s proposals will create an environment for their businesses to develop.

Similarly, 87% said the Chancellor’s measures will not increase business and consumer confidence.

More than two thirds (70%) of respondents said they expect a more realistic budget to be delivered after the general election. And when asked how they rated the budget overall, only 10% of Forum members described it as ‘good’ or ‘very good’, with 52% branding it ‘average’ and 38% describing it as ‘poor’ or ‘very poor’.

Reflecting widespread anger at the planned hike in National Insurance rates, the Forum’s survey also found that a third (45%) of respondents believed the Budget had a negative impact on employment.

[click to continue…]

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Why the Budget doesn't matter

by KevPartner on 24 March, 2010

Today is Budget day in the UK. This means that our Chancellor, Alistair Darling, will be walking the incredibly difficult path between the economic realism needed in the face of this country’s huge overdraft and the need for his party to be re-elected in a few weeks time. (Incidentally, what a backward country we are to not have fixed term parliaments: we still don’t officially know on what day the General Election will take place!) [click to continue…]

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How to have your ads appear in GMail

by KevPartner on 21 March, 2010

If you’re a Gmail user you’ll be familiar with the “Sponsored Listings” on the right hand side of the page when you view an email. These are ads supplied by the Google Adwords system and displayed via the “Content Network”.

To have your ads appear here, you need to have a Google Adwords campaign running. If you’re showing ads on the Content Network, you need to select the Networks tab and then find Managed Placements and click Show Details.

Once you’ve done this, click Add Placements, select the Ad Group you want to have show up in Gmail and type mail.google.com into the Add Managed Placements field. That’s it, job done. I recommend isolating your Gmail targeted ads into a separate campaign as you may need to revise your bid price or ad text to suit.

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Inbox Zero – myth or reality?

by KevPartner on 19 March, 2010

If, like me you get hundreds of emails a day (in my case from 5 main accounts) then you need a way to effectively handle them. Having spent years struggling with keeping most messages in my inbox (which ended up with thousands of entries) I tried “managing” my inbox down to zero in Thunderbird by either responding to emails instantly, deleting them or moving them into another folder.

It lasted a few days. However, on moving our email onto Google Apps Professional (essentially the Gmail client) it has become not only possible but actually easy. I am not an organised person by nature so the fact that I can achieve it means ANYONE can. [click to continue…]

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Getting organised: the online Filofax

by KevPartner on 17 March, 2010

As a business owner, keeping organised is critical especially if, like me, you’re naturally disorganised!

I’ve been using Backpack by 37Signals for a number of years and all of my businesses have a separate Backpack account. It’s a very easy to use, fairly free-form organisational tool and I use it largely for keeping track of information. For example, I keep notes about any interactions with the tax man, record customer conversations, software licenses – in fact anything I may need to lay my hands on later. Each of these is recorded in a separate Backpack Page.

It includes a calendar which can be shared amongst multiple users and also a simple writeboard with version tracking. You can also set up reminders to be sent to your mobile and even keep a journal of your daily activities.

Pricing starts at $24 per month (£17) and it pays for itself time and time again in convenience and peace of mind.

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