leadership and management toolkit -...

Leadership and Management for SMEs

Over-50s Business Start-up Toolkit

Leadership and Management for SMEs – Toolkit for Over-50s Starting a Business

IntroductionSmall businesses start with an idea, a skill or a product. Sometimes starting a small business is a conscious decision driven by favourable personal circumstances, but in other cases, the change is brought about by redundancy or forced early retirement. Whatever the reason, the Office for National Statistics has said that growth in self-employment over the last decade has been largely driven by over 50s starting their own businesses. They now make up around 20% of the country’s new business owners.

You will probably start a new small business when you can see an opportunity to provide products and services into a market in which you can compete. You can take advantage of your skills and experience and be responsive to customers’ needs, embrace new techniques and technologies and capitalise on your drive to succeed. Over 50s start-ups like yours can tap into a wealth of experience and knowledge, which can be put to good use in a new venture.

This Toolkit is a practical application of proven models and approaches to grow a small business. It has been devised to help start-ups by over 50s create opportunities, become profitable and perhaps grow enough to employ others.

This ToolkitThis Leadership and Management Toolkit has been designed as a practical resource to enable over 50s to consider and address some essential issues associated with starting and owning a small business.

It allows owners to develop business plans and get the most out of their skills and experience.

Each tool in this kit is practical in its approach and includes templates, which can be used when convenient; there is no need to attend a scheduled course.

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ContentsIntroduction...................................................................................................................... 2

This Toolkit.......................................................................................................................2

How to use this Toolkit.....................................................................................................4

Why Start a Business?.....................................................................................................4

What Can You Do?..........................................................................................................6

Strategic Planning Process..............................................................................................7

Personal Strengths, Weaknesses Opportunities Threats (SWOT) Analysis....................8

Personal SWOT Analysis.................................................................................................9

A Simple Business Model...............................................................................................10

Products and Services...................................................................................................10

Product / Service Breakdown.........................................................................................10

What do you need to get started?..................................................................................10

A Word on Pricing..........................................................................................................10

Suppliers........................................................................................................................11

Networking.....................................................................................................................11

Top Networking Tips......................................................................................................11

A Last Thought…...........................................................................................................12

Appendix 1 - What Can You Do?...................................................................................13

Appendix 2 - Personal SWOT Analysis Grid..................................................................14

Appendix 3 – Products or Services................................................................................15

Appendix 4 - Product or Service Breakdown..................................................................16

Appendix 5 - What do you need to get started?.............................................................17

Appendix 6 – Suppliers..................................................................................................18

Appendix 7 – Networking...............................................................................................19

Appendix 8 - Personal Budget Needs (Estimated Expenditure).....................................20

Appendix 9 - Personal Budget Needs (Minimum Income Requirements)......................21

Appendix 10 - Useful Resources....................................................................................22

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How to use this ToolkitThis Toolkit consists of descriptions of behavioural models and business techniques useful in leading and managing effectively. To get the best out of the Toolkit:

Read the relevant section to understand the model

Use the guides to work with your employees to understand the techniques described (templates are provided where applicable)

Use the techniques and review their impact in the workplace

Carry out extra research to add to your understanding of the model

Constantly review your overall progress to ensure that your approach is yielding the desired results.

Why Start a Business?

You may have reached a stage in your life where you a ready to face a new challenge, have an idea or opportunity that you have not previously had chance to pursue or are motivated by creativity, money or work/life balance. Whatever your reason, there are no right or wrong answers

By 2020, 47% of the adult population will be over 50 and as life expectancy increases, the benefits of working after the age of 50 are well documented including: remaining economically active, positively affecting health and well-being and, maintaining social contact. Over 50s start more business than young people and account for 43% of new business owners and, those that do are over twice as likely to succeed as someone younger. Improved connectivity through increased access to Broadband provides new opportunities to people starting their own business in the largely rural areas of York, North Yorkshire and East Riding with small and medium enterprises accounting for 98.5% of businesses.

It is easy to be daunted by thought of starting your own business, especially if you have always been an employee but when you are starting a business you can draw upon the many years of skills and experience you have acquired through your working life. You may also have developed interests outside of work that have inspired and informed your decision to start a business. Your skills, experience and knowledge are your most valuable assets, and your new business should use these strengths. This toolkit, will enable you to analyse these traits so that you can identify both what you are good at and when you will need help.

You may be wondering why improving your Leadership and Management Skills is important when setting up your own business. The fact is, even if you have no

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employees and may never want any employees, starting your own business will require using management and leadership skills on a day to day basis. You will need to lead your business and manage yourself in terms of time, resources, planning and decision-making. You will also be managing relationships with customers and suppliers and perhaps specific projects. Starting a business can be challenging and difficult it is important that you use effective Leadership and Management skills to your advantage.

Building your Management and Leadership skills will enable you to make decisions about how you want to run your business and what your core values are. Put simply, a business is an economic enterprise in which goods and services are exchanged for money with the aim of making a profit. You will have customers who will need to feel that they have received ‘something of value’ for the price they have paid and that can be either a physical product or a professional service or skill that they do not possess or can otherwise access.

Whether you intend to sell products or services you will need to consider whether your business will be in an industry you have experience of, or a completely new sector.

Think about if your business will:

Provide the same or similar products/services to customers in the same industry. For example, if you had worked in construction you could use your project management skills and experience on a freelance basis with a house building company.

Provide the same or similar products/services to customers in a different industry. For example, if you had worked in construction you could use your project management skills and experience on a freelance basis with a double-glazing manufacturing company.

Provide completely different products/services to a new customer base. For example, turn your hobby into a home-based business, selling your products on the internet or through local craft shops and providing pottery making classes to local schools and the community.

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What Can You Do?To help you make the right choice it is essential to reflect on what you can do that may form the basis of a viable business. Use Appendix 1 to list your knowledge, skills and achievements over your career to date. Include qualifications, awards and certifications, not only from your professional life, but also from your hobbies and interests.

KnowledgeKnowledge can include descriptions, facts, information and skills acquired through experience or education. It can refer to both theoretical and practical understanding of a subject. It can include specific industry experience, industry contacts and knowledge of trade memberships.

SkillsA skill is the ability to achieve a repeatable result, often with the minimum outlay of time and energy. Skills can be divided into general and specific skill sets. For example, general business skills would include time management, teamwork, leadership and management. Specific skills would be focused on a job or profession, for example, accountancy, joinery, technology or pottery.

AchievementsAchievements are the results of your work over the years. These achievements should include tangible parameters where possible, for example increased sales, profitability and reduced costs. Examples of dealing with problems, crises and emergencies, and awards and commendations should be included.Also, list knowledge, skills and achievements associated with outside interests such as volunteering, mountain rescue or first aid skills.

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Strategic Planning ProcessEvery organisation exists in an environment governed by rules and legal regulation, which can appear stable but is, in fact, subject to change. Occasionally businesses miss important changes in the environment while competitors seize the opportunity to take advantage. Examples could include changes in legislation, price differentials brought on by rent and rate rises or new trends such as the rise in popularity of artisan and craft products. These are all areas of opportunity where a start-up can take advantage in a changing world.

Strategy is about being aware of the environment in which you operate and making sure you maintain relevance and adaptability. Strategic models can be useful for businesses of all sizes in applying structured thinking to make sense of the complex world.

Here are four critical questions you might want to ask yourself:

1. What do I enjoy doing?2. What am I especially passionate about?3. What skills do I have or need to pursue my business idea?4. What are my first steps?

You can do this by using the SWOT (Strengths, Weaknesses, Opportunities, and Threats) Tool described below in conjunction with your notes on your knowledge, skills and achievements.

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Personal Strengths, Weaknesses Opportunities Threats (SWOT) Analysis

In conjunction with your assessment of your knowledge, skills and achievements, complete a personal SWOT analysis by considering the questions below and completing Appendix 2.

Strengths What are you good at? What do you enjoy? What do your achievements tell you about your strengths? What industries are you strong in?

Weaknesses What could you do better? What additional skills would be useful to you? What certifications might be useful to you?

Your strengths tell you what you are good at. Your weaknesses tell you where you need to develop. Together these are your distinctive competencies. They provide the basis for deciding what services you will offer or products you will make and sell.

Opportunities What current trends work in your favour? What products and services seem to be in demand now and growing? What current topics might help shape your business ideas?

Threats What trends (for example, in technology, the environment and the political arena)

are there that work against you? What specific certifications are required? What are the major high risk threats to the business?

Opportunities and threats tell you what you must be good at to start and grow your business. You must develop your knowledge and skills to help you to exploit opportunities that present themselves.

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Personal SWOT AnalysisTo help you complete your SWOT analysis, think about the statements below in the context of your own business, recording your responses in Appendix 2.

Strengths

I have expertise in:

I have technical skills and capabilities in:

I have legislative and compliance expertise in:

I have certifications in:

Weaknesses

I have the following technical skills and capabilities missing or needing development:

I have the following certifications and permits missing, needing development or updating:

I simply don’t enjoy it:

Opportunities

I believe the following new products or services are needed by potential customers:

I believe I need greater technical expertise in the following new area:

I need to keep updated on:

Threats

I need to keep updated on the impact on cost of materials and people because of the following developments:

I need to be aware of possible economic downturn.

I am not currently big enough to take on larger commercial work.

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A Simple Business ModelA business consists simply of activities and materials put together in an offering that is attractive enough for customers to buy. All businesses require some form of investment (money or time) at start up to be able to provide a product or service and find enough customers to whom the output can be consistently sold at a profit.Having established your skills and expertise it is now useful to look at products or services you can provide.

Products and ServicesUse the left hand column of Appendix 3 to list the products or services you could provide. In the right hand column describe the product as ‘features into benefits’ by using the phrase ‘which means that.’ Think about the benefits that a customer would enjoy by using you to provide the product or service.

For example, you could provide a complete business accounting service specialising in SMEs and start-ups which means that you can produce accounts, complete and submit online tax returns and deal directly with HMRC on your customer’s behalf.

Product / Service BreakdownWhenever you provide a product or service there will be costs associated with that provision. Use the blank grid in Appendix 4 as a template to consider those costs and work out how much one unit of your product or service costs you.

One unit could be one pottery item, one sandwich or one hour of your time for advice or accounting. The aim is to establish a rough framework of what it will cost you to provide your product or service. There are other costs that should also be considered; some useful resources to inform this are included in Appendix 10.

What do you need to get started?Using the template in Appendix 5, list your thoughts about what you need to get your business started. Detail equipment and materials needed to produce enough produce or provide your service to meet expected demand and get you off to a good start.

A word on pricingYour aim is ultimately to make a profit. The price you sell your products and services for, less the costs to you of providing those products and services, will leave you with a profit margin. When you start a small business, there are immediate start-up costs which could mean that you make a loss initially, so it is vitally important that you keep a close eye on the finances of your business. The organisations listed in Appendix 10 can provide a wealth of information on this topic.

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Suppliers A reliable source of goods and materials is essential to maintaining your ability to provide your product or services. Having multiple suppliers is a good tactic to keep control of prices and availability. Use Appendix 6 to list potential suppliers to your business.

NetworkingOnce you have decided on the product or service you’re going to offer, you must find customers who want to buy and an essential skill here is networking.

Networking is defined as the building up or maintaining of informal relationships, especially with people who could bring advantages such as projects or business opportunities.

Use Appendix 7 to make some initial notes on who might be useful contacts for your new business.

Top Networking TipsWhatever your business, getting your proposition out to your potential customers is probably the most important, yet most daunting thing for you to do, so here are a few tips for your consideration.

All business sectors have associations and communities who meet, talk and exchange views and information about their business area. Use technology to promote yourself and your business. Key platforms to consider are: Facebook, LinkedIn, Snapchat, Instagram and You Tube which are very useful for finding people and groups and also curating your products or services. When you have joined an appropriate group, write articles, post blogs and comment on aspects of your business. Offer your support where appropriate as this can lead to some interesting contacts.

Face to face networking is also highly valuable, use these opportunities to promote yourself and your products or services. There will be many local organisations that have events you can attend and it is worth registering with some of those listed at the end of this toolkit. At events or meetings, use the FORE technique to find things in common and build rapport.Topics for conversation would include.

Family. Occupation or work. Recreational activities, hobbies or other interests. Education, studies or development activities undertaken.

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Finally, always have business cards to hand and a small pocket-sized notebook and pen. It is also useful to understand how to share contact information electronically on iPhone and other smartphones.

Ultimately seek to develop ‘Win – Win’ relationships.A Last Thought…It is useful to think about your business and personal financial needs for the first three to six months of your venture.

Use Appendix 8 to list estimated expenditure on your business supplies and materials. This would include any equipment purchases and consumables that you’ll need.

Refer to Appendix 5; ‘What you need to get started’ for additional information.

Use Appendix 9 to estimate your personal budgetary requirements.

Further information on managing your business finances can be found on the Federation of Small Businesses website, along with other useful resources.

Good luck in your new venture.

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Appendix 1 - What Can You Do?List your knowledge, skills and achievements over your career to date. Include qualifications, awards and certifications, not only from your professional life, but also from hobbies and interests.

Knowledge

Skills

Achievements

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Appendix 2 - Personal SWOT Analysis Grid Record your responses to the statements on Page 8 - Personal SWOT Analysis - on the grid below in the relevant area.

Strengths Weaknesses

Opportunities Threats

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Appendix 3 – Products or ServicesList the products or services you could provide in the left hand column. In the right hand column describe the product as features into benefits by using the phrase ‘which means that.’

Products and ServicesWhat can you provide to customers?

Description (Features and Benefits)

For example.

Small business accounts services.

For example.

Complete business accounts for SMEs, which means that I can produce accounts, complete on line tax returns and deal with HMRC on my customers’ behalf.

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Appendix 4 - Product or Service BreakdownCalculate the costs associated with the provision of your product or service. Use the grid below as a template to consider those costs in working out how much one unit of your product or service costs you to supply. Some examples are provided.

Component Description Cost

Clay Pottery clay for 50 12-inch pots. £

Glaze Glaze for 50 12-inch pot. £

Energy Cost of running your kiln for 50 12-inch pots £

Total cost for 50 units

Cost per single unit

£

£

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Appendix 5 - What do you need to get started?List the equipment and materials to produce enough produce or provide your service to meet expected demand.

Item / Description Value

Kiln £

Clay supplies £

Glaze £

Packaging £

Pottery paint £

Car £

Computer or tablet £

Total £

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Appendix 6 – SuppliersA reliable source of goods and materials is essential to maintaining your ability to provide your product or services. Having multiple providers is a good tactic to keep a control on prices and availability.

Supplier Products or Materials Costs

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Appendix 7 – NetworkingMake some initial notes on who might be a useful contact for your new business. Online sources such as LinkedIn and Facebook can be very useful for finding people. Consider following similar businesses on-line, there may be opportunities to develop services/promotions which compliment your business. For example, a restaurant owner may wish to offer promotions to visitors to certain tourist attractions or B&Bs.

Networking Step Notes

Who do you know?

Who do you want to know or know better?

What are my contacts interested in?

What networking events are of interest to me?

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Appendix 8 - Personal Budget Needs (Estimated Expenditure)It is useful to consider your personal budget needs for the first 3 to 6 months. List your estimated expenditure on your business supplies and materials. This includes any equipment purchases and consumables that you will need. Refer to Appendix 5 –‘What you need to get started’ for additional information. Use this total in Appendix 9.

Estimated Expenditure Cost

Total:

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Appendix 9 - Personal Budget Needs (Minimum Income Requirements)Use this appendix to estimate your financial needs for the next 3 to 6 months.

Business Income

Estimated income from the business (sales) £

Estimated business expenditure (cost of sales) £

Total: (gross profit) £

Personal Expenditure

Total personal expenditure (outgoings and day to day living) £

Total business income (gross profit) £

Total personal income (from pension, savings and other sources)

£

Survival income required £

Previous Income (For Comparison)

Current Income £

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Appendix 10 - Useful ResourcesThe following organisations provide a range of useful resources and advice to support the professional development of leaders and managers of SMEs.

Federation of Small Businesses www.fsb.org.uk

How’s Business www.howsbusiness.org

Yorkshire Powerhouse www.yorkshirepowerhouse.com

Make it York www.makeityork.com

York and North Yorkshire Chamber of Commerce https://york.wnychamber.co.uk

York Professionals www.york-professionals.co.uk

Yorkshire Enterprise Network www.yorkshirenetwork.co.uk

Institute of Leadership and Management www.institutelm.com

Construction Industry Training Board www.citb.co.uk

Business support units or equivalents at District Council Level

Craven www.cravendc.gov.uk/business/

Hambleton www.hambleton.gov.uk/homepage/69/business_advice_and_support

Harrogate www.harrogate.gov.uk/info/20202/business_support

Richmondshire www.richmondshire.gov.u k/business-and-economy/

Ryedale www.ryedale.gov.uk/business.html

Scarborough www.scarborough.gov.uk/business

Selby www.selby.gov.uk/business

North Yorkshire County Council www.northyorks.gov.uk/business-support-and-advice

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http://www.northyorks.gov.uk/business-support-and-advice

http://www.selby.gov.uk/business

http://www.scarborough.gov.uk/business

http://www.ryedale.gov.uk/business.html

http://www.richmondshire.gov.uk/business-and-economy/

http://www.harrogate.gov.uk/info/20202/business_support

http://www.hambleton.gov.uk/homepage/69/business_advice_and_support

http://www.cravendc.gov.uk/business/

http://www.citb.co.uk/

http://www.institutelm.com/

http://www.yorkshirenetwork.co.uk/

http://www.york-professionals.co.uk/

https://york.wnychamber.co.uk/

http://www.makeityork.com/

http://www.yorkshirepowerhouse.com/

https://yorkshirepowerhouse.com/

http://www.howsbusiness.org/

http://www.fsb.org.uk/

“Grow your People –Grow your Business”

A series of Toolkits developed by Associates of Calderdale College on behalf of York, North Yorkshire and East Riding Local Enterprise Partnership to support leaders and managers of SMEs in the following priority sectors and groups:

Construction Engineering The Visitor Economy The over 50s Women in Leadership and Management.

This Toolkit was designed by the College as part of an ESF funded Skills Support for the Workforce programme.

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