Growth: business tips from entrepreneurs for entrepreneurs

We held a small-business summit and we listened.

Real business owners talked about growth, finance, recruitment and more.

This is what we heard.

Table of contents

ContentsWe’re talking to you...................................................................................................................................3

Finance: fuel for growth...........................................................................................................................4

Something old.......................................................................................................................................... 4

Something new........................................................................................................................................4

Something borrowed............................................................................................................................5

And something blue (-sky).................................................................................................................5

Technology: the tools for the job......................................................................................................... 6

Clarifying the cloud............................................................................................................................... 6

Going mobile............................................................................................................................................ 6

What’s most important to your customers?...............................................................................7

One step at a time...................................................................................................................................7

Technology that grows with you.....................................................................................................7

Culture: how we work...............................................................................................................................8

The importance of autonomy...........................................................................................................8

Communication that’s fit for purpose...........................................................................................8

Sometimes it’s about what you say................................................................................................8

You say it best, when you say nothing at all...............................................................................9

Recruitment: building the team.........................................................................................................10

Promote the personal........................................................................................................................10

Attitude suggests aptitude.............................................................................................................. 10

Retention comes from engagement............................................................................................11

Training: how to get better..................................................................................................................12

What is a social business?................................................................................................................12

Encouraging user adoption.............................................................................................................12

Top technology recommendations...................................................................................................13

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We’re talking to you

When people talk about the small business community or SMBs, they often lump of lot companies together, assuming they have the same challenges and needs.

Of course the reality is that there will never be a one-size-fits all set of advice for growing businesses because it’s such a diverse community.

Even at our SMB summit we had micro businesses alongside firms

with 20 to 25 people. We had companies providing web-based services, on-site catering services, a large-scale farm and a magician.

Inevitably, of the roughly 20 attendees, each faced a slightly different set of challenges and demands on their time and money. That said, there are certain issues, like technology and financing, which every business has to address.

This ebook aims to tackle these most common challenges and give you a range of practical tips and ideas, as tried and tested by real owners of growing businesses, that cover a range of small business personalities.

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Finance: fuel for growth

Something oldThe majority of small businesses are funded by founders’ own money, or that of their friends and family, according to Stephen Ibbotson of the ICAEW. While this can work, even the most cash-rich entrepreneur may need to look elsewhere for funding eventually.

First step? Get professional advice. Ibbotson added that one of the most commonly reported reasons for a business failing is that they didn’t get enough advice.

As a starting point, the ICAEW offers free advice to small businesses from Chartered Accountants through its Business Advice Service. And the Government’s Growth Vouchers scheme contributes towards the cost of advice tailored to your current needs.

Something newCrowd funding has grown in popularity in the UK, especially since Kickstarter launched its UK version in November 2012.

The process involves creating a specific project and funding goal, and building a page and video around it. You then promote it like crazy and hope you meet your target. There is no limit on what you can raise, but if you don’t meet your goal by the deadline you don’t get anything.

The process not only helps you raise money, but also creates an emotionally invested customer base and fantastic market research in the form of the responses you get. It tells you a lot about how viable your product is, as Zach Supulla found out when his first campaign failed.

Emilie Holmes, of Good and Proper Tea launched her tea van with Kickstarter

I was one of the first projects to be funded in the UK. 372 people invested, with amounts ranging from £1 to £1000.

It was a bit like being on X-Factor: you put your idea out into the world and see if people actually want it.

It’s more emotional than just getting equity. People are buying into you and your idea.

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Something borrowedOne of the main barriers to growth that small businesses face, especially now, is the reluctance of banks to give loans. There are, however, several other options beyond the bank for professional investment, including:

Angel investors VC funding Government schemes . There are around 175 different schemes for small

businesses, and it’s likely at least one will be applicable to you.

Bear in mind though that professional investors are looking for an exit strategy, so you need a clear and well put together business plan if you hope to attract this kind of funding.

And something blue (-sky)If your cash needs are a little smaller, a good way to bring your company’s finances into line is to collect your debts faster. Be brave and take a tough stance with your clients: it’s amazing how people respond to a little prompting.

Back in 2008, Rupert Davey cut his debtor days from 55 to 32 simply by sitting down and talking to his clients. Since then he has trained existing and new customers to pay on time in a few simple ways:

Switching to online invoicing, using Freshbooks, which confirms when the client has seen the invoice. No more ‘it must have got lost in the post’

Clearly specifying a 30-day payment deadline Automatically sending a reminder at 25 days

(politely)

Shaun Ames, from StreetsaGoGo.com added that putting written terms and conditions at the end of his invoices, including late payment penalties, have made a huge difference. Risk aversion can be a powerful motivator.

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Technology: the tools for the job

Clarifying the cloudTwo of our attendees work as advisors to small businesses and this is what they had to say about technology. Sound familiar?

Too many small businesses take a hodgepodge approach to the cloud. Growing businesses see technology as a barrier rather than an enabler.

The cloud gets a lot of hype for bringing enterprise-grade applications within reach of small businesses and enabling virtual and mobile working. But understanding how to implement those concepts in a real business isn’t so easy.

What the cloud actually does do is answer some very specific needs:

Reduces the need for, management and cost of onsite servers. Cloud-hosted email like Microsoft Office 365, for example, lets you take on more employees without a big technical headache

Allows you to be more responsive for customers. Since you can access files, or online invoicing applications from any device, anywhere, it lets you provide better customer service

Helps you ‘work seamlessly across devices’ as Ade Awokoya said. Many attendees noted that it lets them stay in touch and collaborate with colleagues while on the road or across different sites, particularly with file sharing services, like Microsoft OneDrive.

Going mobileSome small businesses have taken the cloud transition so far that they no longer require a physical office, instead working from home or Wi-Fi hotspots like coffee shops and libraries.

Certainly this is a growing trend according to the Guardian, but it won’t suit every business or every customer. Colin Farr, for example, has had potential clients simply drop off the radar when they found out he didn’t have a physical office that they could visit.

Others find that having a central location helps to nurture a company culture and ensure more effective communication. Ultimately, the decision should come down to

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what environment is best suited to the way you work, and more importantly, how your customers work.

What’s most important to your customers?When you’re looking for and deciding on programs and services, you need to think about what will support and enable your employees to do their job in the best way possible.

This will look different for different businesses, but there are some basic ideas to consider:

Integration. If you need to be able to pass documents and information between different applications, then consider APIs and integration capability.

Best in class. If integration isn’t top of your list then you may be able to go in search of individual services that do one thing extremely well in isolation, such as project management.

Flexibility. Are your processes fairly standard, where off the shelf will do, or do you have quite unusual working practices or requirements, where customisation may be necessary?

One step at a time‘We try to think strategically about tech, looking to see if we can make savings down the line rather than just jumping on the new,’ said Niall Milner of David and Robertson Rural.

‘It’s about investing in the right stuff when you need it,’ added Colin Farr of Findahood. For example, if you have no off-site employees and deal with customers face to face, then you don’t need to invest in multi-participant videoconference hosting until a new lead asks for it.

Technology that grows with youThat said, sometimes it’s worth investing in a little more than you need to avoid painful and costly changes down the line. For core technologies like email or hosting the ability to scale is vital. ‘Look further ahead to maximise the reach of your IT budget,’ said James Phipps from Excalibur.

‘You need to look for technology that is designed from the outside in, and is flexible enough to fit to how you want to best serve your customers.’ Richard Harrison of Cascaid.

Findahood and Windows Azure

Colin Farr runs findahood.com, which helps you find the right place to start searching for properties, based on how important you rate factors such as crime rate and age range.

Colin’s website is his product. From the very beginning he hosted it on Windows Azure.

‘It was much more power than I needed to start with when I had only one or two visitors,’ says Colin, ‘but now I get 50,000 plus and it has scaled perfectly, with no hitches.’

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Culture: how we work

The importance of autonomyEmployee satisfaction is just as important and customer satisfaction. After all, if employees don’t have faith the in the company, how will they sell it to anyone else?

While a focus on the cohesiveness and interconnectedness of the company is important, it’s also vital that each individual feels empowered and trusted in their own right.

Be sure to ask people what’s working and what’s not, and make sure you follow up on that feedback so that employees feels that they have a real stake in the growth and development of the company.

Communication that’s fit for purposeOne of the negative sides of technology is that it can skew your company culture: people sitting at adjacent desks email each other rather thank look up and speak. ‘Sometimes, to get things done, you have to eyeball people,’ says Niall Milner.

Several attendees lead by example when it comes to balancing technology and collaboration. They get up and walk around the office to talk to colleagues and make phone calls rather than firing off unnecessary emails. At the same time videoconferencing is employed to try and bring together employees spread across multiple sites and to build a rapport with suppliers based overseas.

Sometimes it’s about what you sayWhat you communicate can matter as much as how you say it. Dave Coplin, Chief Envisioning Officer at Microsoft talks about the need to redefine productivity in order to reengage employees in their work.

In the industrial age the end product was broken down into individual stages and processes and each person was employed for a specific processes. This now means there’s no engagement with the end product.

Cloud collaboration tools, like Skype videoconferences or business social networks such as Yammer!, can help to re-engage employees by allowing everyone to share goals and achievements across the company. Klood also runs analogue ‘Beer

‘If your culture is right, people want to work there. If the customers see that, they want to be a part of it too and people come to you – it’s the dream scenario.’ James Phipps, Excalibur.

‘People’s performance is governed by the way you design your organisation. You need to empower employees to be transformational for the customer.’ Richard Harris, Cascaid.

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Fridays’: 30-minute sessions where people share the challenges they’ve faced that week, how it went, and what they’re planning next.

You say it best, when you say nothing at allIt’s well documented that it takes 15 minutes of uninterrupted concentration to reach the optimum mind-set for working: flow state. You need to let people know they have the space to concentrate on their work without worrying about the need to be always present, whether physically or via email and message boards.

This applies to the business owner as well. Too many CEOs and entrepreneurs run from one thing to the next and don’t allow themselves the space and time to reflect and develop. If the co-founder of Facebook and Asana thinks it’s good for business to stop and be mindful, then it probably is.

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Recruitment: building the team

Promote the personalRecruitment is hard, no matter what your size, but when you have a limited budget and you aren’t well known it can be even harder to attract the best and brightest.

You might not be able to match the remuneration packages of large corporate graduate schemes, but, as a small business, you have the agility to understand each individual’s priorities and development plans and then intertwine them with the goals of the business.

In addition, you can offer a lot of flexibility and varied experience by moving new recruits around the company. This lets them find a niche best suited to their talents and ensures everyone in the company understands the business from end-to-end, meaning everyone is able to provide an excellent service to customers.

Attitude suggests aptitudeOf course, for this to work the people you hire need to be fast-learners and they need to be willing to try new ways of working. This is why a lot of attendees spoke of hiring people with the right energy and perspective rather than a rigid set of skills.

No one is going to have the ‘whole package’. The trick is not to be overambitious when you’re recruiting, but instead look for someone who is a good cultural fit and is intelligent. Watch for conversational and enthusiastic candidates, and hire for the person rather than the role.

Internal experience leads to excellence

Excalibur’s James Phipps explained how his company ensures that everyone moves around and gets experience in every department.

This has allowed candidates to fast track their advancement, and has made them better in the role they’ve ended up in.

James’ top sales guy is only 21, but he’s had four roles in two years: ‘it’s given him so much knowledge,’ says James.

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By relaxing your requirements you can spend less money on recruitment and more on training where you can teach processes and skills in a way that matches the way you work. ‘It’s easier to hire someone nice and train them to be technical, than hire technical people and make them nice,’ as Rupert Davey said.

This kind of personality-first style of recruiting also helps to foster innovation within small business as Ben Liu of Pocket Gems has said:

Often, great ideas come from just outside a discipline. Putting people in a position to see how things intersect by blurring the boundaries between what people do is one of the key aspects of fostering creativity.

Retention comes from engagement While this kind of on-the-job training works well for a lot of small businesses, there is drawback that some sectors face. John Charles, who runs the social enterprise, Catering2order, said he’s found he puts a lot of time and money into training people, only for them to leave for bigger and better things.

For some more repetitive or manual tasks like catering or farmworkers, the idea of employee engagement and high investment in training may not be practical, but even in these scenarios, finding ways to help people identify their own success with that of the company can help with retention and productivity.

Luke Palmer, of Palmer and Sons, runs a large farm in Cambridge.

They employ a lot for foreign workers, especially at harvest time, who are often just there to earn a certain amount then leave.

Luke has found technology a big help in engaging and training these employees:

He uses tablets to show training videos on the spot in fields to help workers learn faster

He uses Microsoft Translator for documents and messages, since many employees don’t speak English

Luke Palmer, of Palmer and Sons, runs a large farm in Cambridge.

They employ a lot for foreign workers, especially at harvest time, who are often just there to earn a certain amount then leave.

Luke has found technology a big help in engaging and training these employees:

He uses tablets to show training videos on the spot in fields to help workers learn faster

He uses Microsoft Translator for documents and messages, since many employees don’t speak English

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Training: how to get better

What is a social business?‘You go on social media to share first and decide what to hold back second. This is in reverse to the basis on which most companies work,’ says Dave Coplin. A social business is one where employees feel safe, and are encouraged to share first, hold back second.

Training and development shouldn’t be separate from company culture. Therefore, collaboration and sharing should from the core of your approach to training.

At our summit, attendees spoke of squads and squad leaders for particular specialities across the company, as well as tapping the experience of senior members of the company to fill any knowledge gaps. Not only do schemes like this improve company culture and morale, but also they are cheaper and more sustainable than external training.

Encouraging user adoptionThe more practical side of training often requires more than just an instruction manual for a new program or application. Much like with culture, you have to lead by example in order to encourage people to use the tools you have invested in to better the company.

People like what’s familiar, so to get them to change, you need to explain how a new technology or tool helps them do their job better, or makes their life easier.

At Microsoft, they used several techniques to manage the transition from traditional conference calling to Microsoft Lync:

Target management. Once management start using something, everyone below them will want to follow suit

Have a champion. Have someone extolling the benefits and answering questions

Manage resentment. For the last group of holdouts, rather than just switching the old service off, Microsoft implemented a charge for using it. This meant the option was still there, so people didn’t feel like they were being dictated to, but the option was disincentivised.

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Top technology recommendationsFinally, we asked all our attendees to recommend one piece of technology that they think is key to a growing business’ success. These are the answers we got:

Yammer Microsoft Office WhatsApp Vodaphone One Net Express Windows Azure Tictail Google Drive Office 365 Microsoft Lync Microsoft OneDrive Turbine SageOne Basecamp Microsoft OneNote Skype Windows 8 Smartphone Good broadband Answering service Geographic phone number (rather than a mobile phone number) Backup/ disaster recovery

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