07 July 2014
Confusion costs cash!
Our resident finance expert, Johnny Martin explains the most common finance mistakes that he has come across.
One of the hardest things when you are starting or running a business is getting to grips with the financial jargon and of course the numbers! Too many business owners think that it’s OK to muddle by and that somehow it will be alright on the night.
As a result, many don’t start because they can’t raise cash, or they start and crash and burn because they run out of cash or they start and create a really successful business with the help of a (so-called) business partner who goes on to rip them off so they lose out on their cash! You wouldn’t believe the number of times at my workshop at the British Library, people say that’s what happened to me!
So what causes this confusion and how can you make sure you understand your business finances and make sure you don’t waste cash?
To start, let’s cover THE biggest cause of confusion and especially confusion between business owners and finance people – why is profit not the same as cash?! Well if you were running a very simple fruit seller business, buying on the wholesale market, selling on a street corner, and chucking out unsold fruit at the end of the day – then the increase in cash in your pocket would be the same as profit.
BUT as soon as you start selling on account, buying on account, having stock, buying equipment then cash and profit are different in the short term.
This explains why you have two reports – the cash flow looking at cash and the profit & loss report which matches income and expense when they happen i.e. based on activity. The profit and loss is there to help you assess profitability or viability – can you sell for more than your costs?
If you didn’t match income and expenses in the same period you would never know your true profits. For example you hire a freelancer but they don’t invoice you at month end, you would still make a provision for these costs in your management costs.
Otherwise you would understate freelance costs in the month when they happened and over state in the month the invoice came in or indeed when it was paid…This is known as accruals accounting – matching income and expenses based on activity.
To help overcome this kind of confusion I run a regular workshop at the Business & IP Centre called Get Cash Flow Confident. If you come to the workshop you also get access to my online training video Talk Money and a 5 year forecasting template.
Whatever stage you are at – please, please, please don’t ignore finance. Successful businesses understand their numbers, know their numbers and act on them. By all means delegate finance but don’t abdicate responsibility – it is just too important.
20 June 2014
Book review - Start Your Own Business: You can do it!
Start Your Own Business: You can do it! By Sue Hunter is a practical handbook offering advice to aspiring entrepreneurs in the kind of no-nonsense, easily understood language rarely found in the business world.
This book is easy to read and gives you encouragement. It has six clear chapters and is full of really helpful advice. It aims to help you work through the initial stages of starting you own business as a sole trader.
In Sole Trader you will discover why it is important to develop yourself, along with your business; you will learn why market research and your customers are all-important, and how to market your product or service.Business finance, such as keeping records, working out a cash flow and calculating your break-even point are covered using worked examples to clarify explanations.
The final chapter offers an annotated template to get you started with your own Business Plan.
Julie Boadilla on behalf of Business & IP Centre team.
05 June 2014
What’s new on… COBRA for business start-ups
One of the resources we provide here at the British Library Business & IP Centre is free access to a number of business and intellectual property databases; helping entrepreneurs and businesses to research trends, markets and companies, and to utilise and protect their IP. If you’ve ever wondered what the market trends are in a particular industry, how to write a business plan, or where to search for trademark registrations, then you can use our databases to find out. The databases are regularly updated and in a monthly blog series, we take a look at what’s new.
This month, we look at the COBRA database (or, to give it its full name, the ‘Complete Business Reference Advisor’), which is probably one of our best-used resources. COBRA is essentially an online encyclopaedia of practical information for starting, running and managing a small business and includes over 4,000 fact sheets and local area profiles. It’s often the first stop for entrepreneurs looking at setting up their business, as it provides lots of helpful hints for start-ups and is very easy to search. COBRA is accessible from the Business & IP Centre reading room, and best of all you can also download up to 10 reports from the database per day.
One of the things that makes COBRA particularly useful is that it provides a very comprehensive amount of information, covering a wide variety of industries - from the global to the niche. For instance, in this month’s updates, we have profiles on business areas ranging from Hotels, to Health and Safety Regulations, to House Sitters (not to mention Goth Clothing Shops, which we like to think is in honour of National Goth Day last week...)
Our update starts with a look at the latest Business Opportunity Profiles (BOPs), which summarise the opportunities and requirements for a particular industry or business area. The profiles outline the qualifications and skills needed, key market issues and trends, main trading issues and relevant legislation, and a guide to sources of further information.
This month a number of profiles have been updated, including:
• Children’s Indoor Play Area
• Dating Agency
• Florist
• Furniture Maker
• Handmade Toy Maker
• Hotel
• Party Plan Sales Agent
• Residential Letting Agent
• Sandwich Shop
• T Shirt printer
• Taxi and Private Hire Service
Next up are Mini Business Opportunity Profiles. These provide a general introduction to a business area, an outline of trading issues, and a guide to sources of further information. The ‘Mini BOPS’ often cover more niche areas, and this month the following profiles have been updated:
• Data Management Firm
• Dinner in the Dark Organiser
• Female Taxi Service
• Goth Clothing Shop
• House Sitter
• Indian Fashion Retailer
• Party Supplies Shop
• Specialist Model Shop
Finally, on to the Business Information Factsheets (BIFs). These are guides and summaries which provide information on specific areas of general business - for instance marketing, legals, or funding. They’re a great resource for start-ups who need to investigate the practicalities of running a business.
The most recently updated factsheets are:
• Advertising Hotels, Guest Houses, or Bed and Breakfast Accommodation Online - A Guide to
• Business Grant - A Guide to Applying for a
• Business Rate Relief - A Guide to
• Community Amateur Sports Clubs (CASCs) - An Introduction to
• Debt - A Guide to Recovering an Unpaid
• Finance for Starting a Business - A Summary of Sources of
• Health and Safety Regulations for IT Equipment - A Guide to
• Making a Small Claim to Recover an Unpaid Debt - An Introduction to
• Registering with HMRC as a New Employer - A Guide to
• Workplace (Health, Safety and Welfare) Regulations 1992 - A Guide to the
If you’d like to view any of the reports on COBRA, or use the other resources in the Business & IP Centre, you’ll need a British Library reader card.
Sally Jennings on behalf of Business & IP Centre
30 May 2014
Book review - How to get your product to market by Louise Guinda
“The biggest problem most people with great ideas have is just not knowing where to start and what to do. I think that’s the greatest barrier to market” - Patrick Mathews, Breffo
This is a quote from page 109 of How to get your product to market by Louise Guinda, which nicely sums up the purpose of this book
This book goes a long way to solving this problem. It is a step by step guide which can assist an entrepreneur in taking the idea in their head and turning it into a reality in the market place.
Written in easily digestible chapters covering topics such as ensuring that the idea is new, checking that a market for the product actually exists, and manufacturing and prototypes, the book takes the reader on a journey through the process of becoming an entrepreneur.
Each chapter includes a tip, based on the subject of the chapter, and a handy ‘Chapter Wrap-up’ reiterating the main points of the chapter.
It helps that the writer herself is an inventor and entrepreneur and has been there, done that, and has now written the book.
I would strongly recommend this book to anyone who has come up with a product idea, and who wants to bring it to the market.
Maria Lampert on behalf of Business & IP Centre
You can read a free PDF sample of How to get your product to market here.
Amazon review by Karen Wilson - Being someone with an good idea but no clue of what to do next, this book was extremely helpful and packed with information and great advice. It was easy to read and make notes and really gave me the inspirational push I needed to continue with my product idea.
16 May 2014
Book Review - Copywriting: Successful writing for design, advertising and marketing
I came across this book, written by Mark Shaw, while I was browsing the Small Business Help shelf in the Business & IP Centre, looking for a more recent book on the same topic, which hasn’t arrived yet.
Copywriting: Successful writing for design, advertising and marketing, published by Laurence King Publishing Ltd in 2009, is a practical guide on how to use creative writing in business for the following purposes:
• Advertising and direct marketing
• Retailing and products
• Catalogues
• Company magazines and newsletters
• Websites and digital formats
• Brand, marketing and internal communications
Even though the plain book cover does not imply it, the most interesting parts of the book are the numerous visual examples, based on real cases, which the author uses to illustrate every point he makes.
He also presents interesting interviews with creative directors, and case studies of companies and other organisations on their approach to creative writing in business.
The above illustration is one of the examples presented in the book. In the case study on direct marketing, the creative director of the graphic design agency Different Kettle explains how he created this hard-hitting leaflet for Amnesty International.
Another interesting feature of the book are the practical tips that the author gives at the end of each chapter, including:
• A checklist, with the main tasks to be done
• A practical exercise
• A round-up of the main points of the chapter
Overall, the book is comprehensive and well structured as a practical guide, with a lot of illustrations. If the text was made a little easier to read it would be better. Nevertheless, even though the book is not very recent most of the suggested techniques and tips apply regardless of time.
Irini Efthimiadou on behalf of Business & IP Centre
15 May 2014
Book review - Cook Wrap Sell: A guide to starting and running a successful food business from your kitchen
Gail Mitchell reviews Cook Wrap Sell: A guide to starting and running a successful food business from your kitchen By Bruce McMichael.
This book written in partnership with Country Living magazine aims to help you turn your love of food into a thriving small business, with the right idea and a watertight business plan.
It has chapters covering costs and funding, tax and insurance, branding and packaging and much more. As well as general business start up information it also contains information on food allergies and intolerance. It has a diary of events and festivals. Gives tips on blogging and lists food blogging groups. And how to get involved with food festivals and farmers markets as well as how to run a successful stall.
It also has case studies throughout the book and websites for further information within each chapter.
Hopefully a recipe for success!
Gail Mitchell on behalf of Business & IP Centre
08 April 2014
Portobello Business Centre Ask the Expert session at Imperial College
On Friday 28 March I attended an excellent Ask the Expert event hosted by Portobello Business Centre and sponsored by Lloyds TSB. The event, held in the prestigious Rector’s House, Imperial College, comprised of six experts who circulated round the room at twenty minute intervals to sit with tables of three or four budding entrepreneurs and offer advice and expertise. The event was chaired by Colin Rutt from Portobello, who used a judge’s gavel to notify the experts when to swap places!
The experts included IT consultant Sunil Patel, Chris Smith from the Intellectual Property Office, marketing expert Chris Griffin founder of marketing agency Pi Global, Uday Thakkar from Red Ochre, Bob Lindsay from Thames Productions and Howard Carter, entrepreneur and founder of Incognito.
The delegates were mainly small business founders and start-ups, with a variety of products and services.
After some brief words of introduction from Colin, my table welcomed Sunil Patel. Sunil has an extensive knowledge of the whole IT spectrum but it was on the subject of websites and ecommerce in particular that the delegates were keen to pick his brains. He offered some excellent advice on how to set up your online presence distinguishing between the different types of sites – blogging sites, shop fronts – and their suitability. He stressed the importance of business owners familiarising themselves with the processes of web development but ultimately the advice was to get someone in who knows what they are doing.
Once his twenty minutes was up, Sunil was replaced by Uday Thakkar, founder of Red Ochre and a familiar face to all of us at the Business & IP Centre. Uday has a wealth of experience in business mentoring and support, but it was the subject of raising finance that he was focusing on specifically. The conversation quickly settled on the subject of crowdfunding which has become a popular alternative to traditional forms of funding such as bank loans which are becoming increasingly difficult to secure in the current economic climate.
Uday stressed the importance of momentum when looking for crowdfunding so try to build up a good support base of family and friends to get the ball rolling. It is also important to offer incentives to encourage people to participate. If you are asking for gifts, offer something in return such as a free sample of your product or an invitation to an event. Uday also mentioned the importance of timing. Don’t start asking people for contributions just before Christmas or when they are about to go on their summer holidays.
Bob Lindsay from Thames Productions was our next expert. Bob has an engineering and manufacturing background but he was keen to find out what each of the delegates was doing and tailor his advice accordingly. He provided some particularly useful advice about approaching buyers. He emphasised the importance of being prepared for the types of questions buyers usually have, and being able to assure them the correct procedures are in place. He used the following examples of the types of issues they are concerned with: complying with ISO standards, logistics and complaints procedures.
Following some refreshments, we were joined by Chris Griffin, founder of marketing agency Pi Global. Chris underlined the importance of knowing your customer and explained that for a new business, word-of mouth was the most powerful marketing technique because it established a high level of trust.
I was keen to listen in on Chris Smith from the IPO to hear his take on Intellectual Property. He provided a very helpful overview of how businesses can protect their IP focusing specifically on Trade Marks and Copyright. Although you don’t need to register Copyright, it is a good idea to have a record of when you created a piece of work so he suggested sending a copy to your solicitor or even posting it to yourself by recorded delivery.
The event finished off with a question and answer session. Uday mentioned the Business & IP Centre as a great place to conduct further research into some of the issues we had discussed throughout the day so I took my cue and managed to say a few words about the Centre and what we offer.
I didn’t get a chance to speak to Howard Carter but he spoke a bit about his experiences as an entrepreneur. He expanded on a theme touched on by some of the other advisors, that all business founders make mistakes along the way but the secret is to learn from them and don’t lose heart when things don’t go your way. Passion and perseverance count for a lot!
Thanks to Colin Rutt and the rest of the team at Portobello Business Centre for hosting the event and for their hospitality on the day. Also thanks to Lloyds TSB for sponsoring the event.
Michael Pattinson Business & IP Centre Team
21 February 2014
Review of How to Start a Creative Business by Doug Richard
How to Start a Creative Business is a new book on business start-up by Doug Richard of School For Startups and School For Creative Startups, and formerly of Dragons Den.
To declare an interest, he has participated in a number of events here at the Business & IP Centre, and before the last election wrote a report for the Conservative Party on small business in which he highly praised us.
This book is aimed at creative businesses and shows signs of this including a distinctive landscape format and heavy hand-drawn-style of illustration. However, it will be useful for anybody starting a business.
Its structure is based around Ten Questions, which begin with basic things such as what your business proposition is, and who your customers are. It develops to more detailed information such as your channels to supply goods and services, your business’s emotional relationship with your customer, key partners and key competencies.
Apart from a short section on financial projections, its questions are mainly qualitative rather than quantitative, although still very thought-provoking and demanding. Richard is particularly keen, perhaps advisably for a creative audience, to make it clear that a business must make enough money for you to live your life, and if it fails to do so, then it has not achieved its most basic objective.
The book is very much about asking questions that are relevant to any kinds of business, and assumes that you already have a fair understanding of the business sector which you are entering. It is also not a place to look for information on legalities and procedures.
It does include useful information on subtleties such as the different forms of distributor which exist, and the types of deals that you may make with them, and common classifications of revenue models. It is aimed at people who do not have very large sums of money to invest, but at the same time are not struggling to find the minimum amount of start-up capital that their idea requires.
Each chapter ends with an interview with a successful entrepreneur on the issue it has dealt with. Subjects include those involved with names such as Tatty Divine and Folksy, as well as larger and longer established companies like Universal Music and Waitrose.
Overall, this book is highly recommended for any person who wants to start a business, no matter how creative they think of themselves or their concept.
Philip Eagle on behalf of Business & IP Centre
22 January 2014
Building your business in 2014
2014 has arrived and is already moving fast. Perhaps it's no surprise as this is also the Chinese year of the Horse which indicates power, and moving forward at pace.
Whether you’re starting out or whether you’re looking to take your business to the next level of success it’s important to get clear, inspired, organized and to take focused action. Here are life and business coach Rasheed Ogunlaru's 7 Soul Trader tips to get, ready and set and go forward for 2014.
1) Clarity: If you don't know where you’re going you’re unlikely to get there. Write a vision, mission, strategy and action plan – covering finance, marketing and operations and review them regularly.
2) Customers: No customers, no business. Research, network, talk, listen and learn what your (potential) customers need / want. Create and fine-tune your products/ services around them. Excel and they’ll re-use/recommend you.
3) Courage: Work to and from your strengths and you’ll grow. But also push your comfort zones and try something new too. Be yourself and you’ll stand out. Set backs will come – accept, learn and adjust. Don’t be afraid seek help.
4) Co-operation: You can’t do it alone. As a small business you can punch beyond your weight by finding like-minded partners and associates. Swap, share, work together, cross-refer to build capacity, skills, sales and clients.
5) Conversations: everything is a conversation your website, your social media interactions, your meeting pitch. Be clear, crisp, compelling and customer focused and relevant to who you are targeting.
6) Creativity: Manage your time and energy. Eat, sleep and rest well or you’ll underperform. Simplify, systemize, get organized and use technology wisely.
7) Compassion: take care of yourself, your health, your customers, contacts, customers, suppliers – and friends/ family – and they’ll take care of you.
+ Change: Accept, anticipate and adjust to change in your industry, business, team and customers. Review your progress regularly. Tweak or change what’s not working. Get expert support if and when you’re stuck or need to move up.
If you want to clarify your goals for this year, come along to Rasheed’s Soul Trader: Your life, your business workshop. Have a look at our calendar for the next one.
Rasheed Ogunlaru on behalf of Business & IP Centre
14 January 2014
Empatika: fitted furniture with a difference
I first met Tristan Titeux of Empatika when he joined our Innovating for Growth programme in September 2013 after attending one of our special ‘bring a friend’ Growth Clubs.
Empatika specialises in designing and making contemporary bespoke fitted furniture and also offer an eco-friendly option of furniture made of recycled cut-offs (see our post on Recycling Business Resolutions).
They are passionate about what they do, listen to the ideas of their customers, consider their needs and in partnership with them create a design that matches exactly what their customers have in mind.
Random Floating Tubes, designed by Empatika
Although already a thriving business, Tristan applied for a place on the programme because he wanted to grow. Innovating for Growth gave him one-to-one advisory sessions with our expert partners and advice on his business growth strategy, his branding and marketing approach, his product development strategy and his trade mark protection.
I chose to follow Tristan during his time in the Innovating for Growth programme by attending his one-to-one advisory sessions and observing his progress throughout the programme.
As a member of the Innovating for Growth project team, I did research work for Tristan and helped him identify market and consumer trends in the home and furniture industry, relevant quality and environmental standards, contact details of possible partners. I also helped him with trade mark clearance search, before he applied for new trade mark registration.
The programme helped Tristan identify the essence of his business and the business values that make his products and services different from his competitors, so that he can then establish a network of partners around the UK who will apply the same values and principles under his brand.
As a result, he is in the process of re-designing his website, trade mark and promotional material to reflect his business essence and values. He is also in the process of acquiring suitable business partners who will follow his stated business values and ethos.
Watch this space for the next stage for Empatika!
If you are an ambitious London-based established business want to apply for up to £10,000 worth of funded advice and support tailored specifically for your business, have a look at our Innovating for Growth programme and apply before 24 March.
Irini Efthimiadou on behalf of Business & IP Centre
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