Welcome to UK Business Startup. The podcast dedicated to helping you get started with your own business venture. Whether you’re looking to create a company with staff and premises, or just make some additional income as a freelancer in your spare time, this is the show for you.
In each episode we’re going to dive into the nuts and bolts of a particular topic, breaking things down into bite sized and easy to understand chunks.
We’ve enlisted the help of some trusted accountants, financial advisers, marketers, authors, and fellow business owners to bring a tonne of experience and advise to the table. And pulling everything together is the host, our very own Colin Gray.
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When you hear the term “business plan” it's easy to be put off by the thought of some huge complicated dossier. But don't worry, it doesn't need to be as complicated as that. At this stage we're more interested in why you want to set up your business, who you want to serve, what problems you've identified, and how you aim to solve them.
On this episode we're going to look at some examples from photographer Julie Christie, and shop owner Nicola Donnelly. Why did they decide to start their own businesses? How did they go about it? What can you learn from their experiences, and what advice do they have for you?
When it comes to the money side of things, we need to have a think about your anticipated startup and running costs. Then we can look at how much we can expect to earn, and figure out if this is a sustainable income for you to live on. For this segment we've brought accountant Gordon Howes on board.
And recruitment consultant Patricia McGuire has some advice for you on your long term goals. What kind of company would you like to have eventually? What would it look like, and how would you fit into it? Being clear on this can help you to work towards your goals, even if they seem a long way off at this early stage.
Finally, two of the biggest things that hold people back are
Over-planning to the point that they never start
Fear – just being so scared of what might go wrong
Recognising these obstacles early on is important if we want to overcome them. Yes, you're taking a risk, but you take a risk leaving the house each morning. As the old saying goes “A ship is safer in the harbour, but that's not what ships are for.”
Transcript
If anyone was thinking about starting their own business, they felt they had a good idea, they had what it took to make it work, then I would say go for it.
Hey folks, I’m Colin Gray and this is Business Startup UK – the podcast which takes you, step by step, through creating your own business. Since this is the first show, it’s probably worth a little introduction here. As you’ve guessed, this is all about starting a company. There’s obviously a huge range of possibilities there. Maybe you’re looking to register self-employed so that you can do a bit of freelance work outside your main job. Maybe you’re going full time in the business, but there’s no need for a limited company yet. Or maybe you’re jumping in, feet first, and setting up a business with employees, VAT and all the rest, right off the bat. Whatever your aims, there are a lot of steps they have in common. Over the coming 6 episodes I’m aiming, with the help of many others, to give you a full grounding in business startup in the UK. That means what you need to prepare, what you need to think about and what you need to do as you set up your company. By the end of this first series, you should have a really good idea of your first steps, the pitfalls, the things to watch out for along the way.
In case you’re wondering who on earth I am, my name’s Colin Gray and I’m the founder of The Podcast Host. As you’ll guess from the name, we make podcasts and we help other businesses to do that too. I first went self-employed around 10 years ago now, I’ve set up 2 limited companies and helped with a fair few others. I definitely don’t know it all, though, and during this series we’ll be talking to a big range of other people about their experience. Some are experts in finance, law, sales or marketing, and others are just business owners – people who’ve gone through the same experience. We’ll be hearing about the highs, the lows, the tops and the pitfalls. All of this with the aim of making the whole process much, much easier for you.
So, enough explanation – let’s get to the meat of it. In this episode we’re talking about that first step for many – the business plan. Saying that, don’t worry, we’re not jumping straight into a 20 page document with super detailed market analysis, customer segmentation and financial projections – I’m just talking the plan for your business which you build up over a little time. It’s starts out with a look at who you’re serving, what you’re selling them and why they’ll buy it from you. But, even before that, why do you want to make this plan in the first place?
Julie Christie: I'm Julie Christie and I run a portrait photography business called Julie Christie Photography in Carnoustie. I was forced into making the decision to start my own business because we moved Howes from Glasgow to Carnoustie. I found myself out of job. I hadn't really been enjoying my teaching job and I thought, “Well, this is the time to do this. It's going to make or break. I'll do it.”
Quite a few people start out this way. They end up in business almost by chance. It just seemed like the best decision at the time, or, actually, it was the only decision to make! Others, though, they can't stand the thought of not doing it, not solving this problem out there that just seems so obvious to them.
Nicola Donnelly: I have always wanted to own a shop. I put it down to childhood dream for many years.
That’s Nicola Donnelly – owner of the Time Lifestyle Boutique in Dundee, and purveyor of many fine gifts
Nicola Donnelly: I went – . I did live sciences. I worked in comms and marketing. There was this niggling feeling in the background. Actually, I still wanted to run my shop.
That’s how it starts for many. Just this itch, that won’t go away. This desire to try something for yourself – something of your own. So, we mentioned planning at the start. How do you turn that itch into something that can sustain you, sustain others, maybe even grow into something huge? That’s where the planning comes in.
Nicola Donelly: I did my research. I decided now was probably quite a good time for Dundee, things were on the up. There was lots of exciting things happening in the city. I did my research and I decided what kind of shop that would be.
So, Nicola had the desire first, and then figured out the idea later. Others have the idea first, and the research then goes into whether that idea really has legs. The key thing here is figuring out the problem you’re solving and whether it’s a big enough problem to encourage people to pay for it.
Patricia McGuire: Have in the back of your mind some of the problems you think they're going to have. Pick up the phone and make the first call.
That was Patricia McGuire who runs a recruitment company in Switzerland. She brings up the biggest part of this stage – and that’s talking. You’ve got an idea, but you need to check that the problem really exists for your customers. In a lot of cases, you’ll discover it's actually not much of a problem for them or it's just not urgent enough to build a profitable business around.
Nicola Donelly: I did some surveying. I had a survey monkey questionnaire that went out and asked people what kind of things they felt were missing from High Street. I always had a hunch that it would go towards a lifestyle store. I asked people what their average spend would be. What brands they'd like to see. What kind of cash base or projects they'd want to see.
So Nicola had that hunch but, like Patricia, she went out and confirmed it existed with real people. She also confirmed that it's urgent enough as well– it’s painful enough that people are going to pay to fix it. That’s the basis for your business. It’s called your value proposition. What value are you offering your customers? What pain are you solving for them? And how much is that worth to them? If you’ve got that solved, then you’re well on the way. Alright, that’s the blue sky thinking, the possibilities, the aspirations. Sorry to bring us back down to earth, but the plan also needs the more day to day things like finances, costs, projections. Those are the bits that tend to put people off, aren’t they?
Gordon Howes: Now, you've probably had the business plan. You're thinking of some form of multi-layered spread sheet identifying all sorts of costs and income. It doesn't need to be as complex as that.
That was Gordon Howes, an accountant with Balfour Shaw. And, that’s what I was hoping he'd say. You do see the standard plan templates out there and they're really daunting. Seeing it laid out like that, all at once, can make it a huge barrier. But, there are ways to break it down, and there’s help too in doing it.
Nicola Donelly: I got help from Business Gateway to do my business plan. They helped me put it together. Actually going to their workshops helped me focus on a different chapter each week. Then, I built that up gradually.
So, it’s good to know that there are ways to make it easier. But, No matter how you dice it up, there’s a decent bit of work that goes into your business plan. You might think, why bother?
Nicola Donelly: I did, yes, actually apply for funding. A business plan was essential for that. It's also a really good idea to do anyway to keep you focused.
Convinced? Ok, I hope so. They’re right, you’re going to struggle to get money without one, in any way. And you’re also going to struggle to stay focused once you’re really in the weeds – once you’re struggling to keep the whole thing running. Suffice to say, there’s no point pretending that you’re going to stick to every letter of this plan once it hits the real world, but as they say, FAILING TO PLAN IS PLANNING TO FAIL.
Right, let’s look at the detail, what goes in here:
Nicola Donelly: The business plan had basic things like aims and goals of the business. Your costs, your marketing plans. Then, a bit of your research about who your customers and your products are going to be.
We talked about customers and products earlier – that’s covered, but now we’re getting into aims, goals, costs. If you're getting into a particular sector, presumably you know a bit of the ins and outs. Figuring out the costs, the yearly income pattern, and the cash flow should be pretty feasible, especially with the help of an accountant. But let’s be honest, though, the financials are always a guess. But you want to make them as educated a guess as humanly possible. And timescales? That’s where I’ve struggled before – thinking long term. Here’s Patricia again:
Patricia McGuire: I would have two. I would have a plan that saw me through the next year. Then, I would have a plan over a five year period.
There's two things here, isn't there? There's the five year plan which is your aspirations. That's where you see the business going in five years. Projecting where you can reach. This is where you want to think big but be able to back it up as well. There's no point in saying you'll be earning a billion without a realistic route to making that many sales. But aspirations, realistic ones, are how you’ll attract investment, partners, staff, and, of course, motivating yourself along the way! Then there’s the other side, the one year plan that Patricia mentioned – that’s the important one for short term survival and your accuracy here should be much higher. What do people often miss?
Gordon Howes: Initial set up costs. These are always the things that people probably underestimate when they start a business. You need to know how much your outlay is going to be. If you're going to take on a tea room in a café, for example, are you renting it? Does the rental include the fixtures and fittings that are already in place? Indeed, are the fixtures and fittings in place? Do you have sufficient tables and chairs? Do you have the napkins? Do you have the cutlery and crockery? All these things are startup costs that probably exceed what you expect. Because once you start delving into it, you find that everything isn't exactly as you anticipated. A key to any business plan is timing your cash flow. You have to know when you expect the income. How much you expect at any time, and when you anticipate the expenses to be.
So, estimations and realism – that seems to be the key for the short-term plan. Cash flow is the really important here. Show where your money will come from, and where it will go out. That’s leaves profit – and that’s what you’re hoping for.
Finally, a lot of smart people advocate figuring out what your company might look like when it’s finished – whatever that means. When you’re done building, what’s there? If you take that to its conclusion, it also means planning for escape, before you’ve even started.
Patricia McGuire: The other thing I think is quite important when you're starting out. It might seem weird but start thinking about the type of company you want to have. By which I mean culture of the company. Because, sooner or later, you're going to want to employ staff in that company. You want to have thought about that before you get to that stage. And there are other things that I think you should be thinking at the beginning of your business. For example … Again, this might sound ridiculous but you might want to sell that business. You might be starting the business in order to sell it sometime in the future. You need to have a plan to do that. Because I think, personally, you want to try and sell more or less at the peak of your business. You don't want to miss that peak. Plan for it.
Ok, planning planning planning. Vital stuff, in its place. But Patricia had some final wise words for us:
Patricia McGuire: The more you can plan for the better. On the other hand, don't get so bogged down in plans that you don't actually do anything. The most important thing is to start work. Just go and do it because you won't regret it.
Hopefully, that's put a bit of clarity around business plans. What they’re for, what goes in them, and why they’re worth it. For most, I’m sure it still looks pretty daunting though. Don’t worry, if it does to you, you’re not alone. Remember what Patricia said though – don’t be afraid to start the work. A lot of people could learn from Julie’s example:
Julie Christie: Well, I suppose what the natural first step should be is a business plan. Actually, I have to be honest, I didn't do any of that. I was quite naïve and quite innocent about the whole thing. I really just went into it head first. Everything else, all the other things that you're supposed to do, I kind of did them bit by bit over time.
Now, I know that Julie knew her customers, she knew the problems they had, and even had a good idea of how she stands out. What she's saying is that she didn't go into the details of income, costs or cash flow. She just trusted in her ability to make ends meet. Possibly not the most advisable way to start out, I’ll admit. But, as she says, she filled in those gaps as she went along. Much like Nicola mentioned earlier, with the help of the Business Gateway. For sure, it depends a lot on context – it's easier to do this as a one man band, no so much if you have investors, a team and you're having to meet payroll every month. Plan or not though, Julie sums up what a lot of entrepreneurs feel in the first year.
Julie Christie: Fears-wise, I had so many fears. I think the greatest fear is that it's not going to work. You're not going to make any money. Your partner is going to be willing to bet that as well. Will you find any clients? Will you be good enough? All those worries that I think everyone has when they start up their own business. When you ask, “How did I overcome those fears?” I don't know that I actually have. I think I still have those fears all the time. I think it's just pretending that you don't have the time really, isn't it?
Pretending? yea, but then what do they say, “You are what you pretend to be.” Make the plan, feel the fear, pretend you don’t care and do it anyway! Now, you have your own business. You've been listening to me Colin Gray, and this was Business Startup UK. On the next episode, it’s time to decide what type of business you’ll be using to execute these carefully laid plans. Are you a sole trader, a partnership or a limited company? Tune in next time to find out.
In the meantime, head on over to the show notes at thepodcasthost.com/startup for and summary and links to everything we’ve talked about today. That includes all of our excellent contributors and the businesses they run. Business Startup UK was created by The Podcast Host as part of the 3B Podcast Network. Thanks for listening.
Choosing a Company Structure & Managing Your Finances
Épisode 2
lundi 20 juin 2016 • Durée 13:43
So what kind of business do you want to have? Perhaps you're looking at setting up on your own as a sole trader. Maybe you want to rent or buy premises and employ staff. Perhaps you're not even sure yet about which route is best for you. In this episode we're going to take a look at the different business structures why you might choose them.
The 3 main trading styles are
Sole Trader: You run the business, you do the work. A common route for tradespeople such as gardeners, plumbers, or hairdressers.
Partnership: The name says it all. You go into business with a partner and share/run the business between you. A partnership is essentially just like a sole trader split in two.
Limited Company: The route commonly taken by business owners looking to grow in size over time. Those who are looking to protect themselves legally by separating the business from themselves.
Also, whatever route you choose to go down, you will have to think about how you're going to manage your finances. How do you go about doing this? Should you work with an accountant or book keeper? And what tools are available to help you keep a record of what's going in and what's going out?
Hey, I’m Colin Gray and this is UK Business Startup, the podcast which takes you, step by step, through creating your own business. This, week we’re talking structure. If you’re starting a business, one of the first decisions – after what you actually do, of course – is what structure you’re gonna follow. That’s when terms like limited company, sole trader or partnership come up. And, for a lot of people, that’s really scary – it sounds like your getting deep into the legalities at that point. This episode should be a big help here, though, giving you some tips on what company structure might suit you. Let’s get into it!
Marketing Your Business
Épisode 3
lundi 4 juillet 2016 • Durée 21:26
There's a good chance that you're going to have to act as a marketer in your new business along with all the other hats you'll be wearing, at least in the early days. But without drumming up interest in what you have to offer, letting people know your out there, and ultimately making sales, you won't stay in business very long.
That's why it's important to make sure you get your marketing right, and that's the purpose of this episode. Our assembled panel of experts and business owners give their opinions on what works, and what doesn't work so well nowadays.
Know your audience. Who is your business for, and where can they be found?
Look after your existing clients, get this right and they will tell others about you.
Create content. Use the questions potential customers ask you and answer them on a blog, podcast, or video series.
Transcript
It's about putting out stuff that people can use, which entertains them, educates them, and powers them to take action and ideally, to take action with you.
I’m Colin Gray, and this is episode 3 of UK Business Startup. So far, we’ve had a look at some of the big bits, the intimidating bits. That’s company structure, finances, business plans. It’s the stuff you imagine you need to speak to the experts about. But, hopefully the first two episodes got you started, and helped make a few of the decisions.
Well, today’s topic, for most people is a bit more clear. And that’s, talking about your business, promoting what you do. Otherwise known as marketing. But really, when it comes down it, it’s just finding customers. Or, helping them to find you! So, let’s start off with Julie, our friendly, and her early adventures in marketing
Hiring Staff & Building your Team
Épisode 4
lundi 18 juillet 2016 • Durée 14:38
How do you know when you're ready to take on staff in your new business? Are you ever actually “ready” to take such a step? That's the basis of this episode, as our assembled panel of experts and business owners offer you their own tips and advice for taking on staff.
Whether you're a sole trader who needs an extra pair of hands for a few months, or the owner of a limited company looking to employ several people, the process is fairly similar across the board.
There's also the danger of putting off hiring staff because you don't think anyone can do the job as well as you. That might be true, but is this approach sustainable in the long term? What happens if you fall ill, or want to take a two week holiday abroad?
There's a couple of excellent books on this subject that are worth checking out. The first is a classic called The E-Myth Revisited (Why most small businesses don't work, and what to do about it) by Michael E. Gerber. This one is primarily aimed at small business owners who are trying to do everything themselves.
The second is Virtual Freedom by Chris Ducker. Again it deals with the problem of trying to do it all yourself, but this one is a guide to hiring and managing virtual staff, rather than on-site employees.
Managing Your Workload
Épisode 5
lundi 1 août 2016 • Durée 22:45
Going from employee to self-employed means you are now in charge of what you do, when you do it. Whilst this can be liberating, it can also be intimidating, and lead you towards working 14+ hours a day because there will always be something that needs done.
On the one hand you need to be doing enough to be earning enough to pay the bills, keep your clients happy, and generally make sure your business is ticking over.
On the other hand, you're still going to need time off. Not just holidays, but at evenings and weekends where it's good to switch off from all thoughts of work. If you neglect to do this, it can put a strain on relationships at home, as well as lead to higher levels of stress and potential burnout.
You also need to make sure that you're getting the most out of the hours when you are working. This doesn't necessarily mean being as busy as possible, but planning tasks so that you're getting the best results from the work you put in.
On this episode we're introduced to a new guest, business coach Laura Lucas. She's joined by our regular contributors, AdWords specialist Andy Brown, photographer Julie Christie, and recruitment consultant Patricia McGuire.
Recommended Reading
There's a couple of very good books on focus and general productivity that are well worth a read. The first is The One Thing by Gary W. Keller and Jay Papasan. This book drums a new way of looking at tasks into you, and encourages you to ditch multitasking, unnecessary work, and to take things one step at a time.
The second one is The 4-Hour Work Week by Tim Ferriss. Don't be fooled by the title, you probably won't end up working only 4 hours a week, but this book is an incredible manifesto against procrastination, doing pointless and unnecessary work, living in your email inbox, and generally doing too much on your own.
Networking & Collaboration
Épisode 6
lundi 15 août 2016 • Durée 22:43
Just because you're self-employed doesn't mean you have to go it alone in business. Joining or building a network of fellow professionals can be hugely beneficial to you for a number of reasons.
Despite this, many people still shy away from networking events. Some common excuses for this include…
I'd feel awkward
I wouldn't know what to say to anyone
The people there aren't my target customers
The people there aren't in my line of work
I'm too busy, it would be a waste of my time
It would cost me money as I wouldn't be working
I'd rather spend this time on marketing
I do all my networking on social media
So what are some of the benefits of networking?
Building relationships
Increasing visibility
Becoming known as the go-to person in your own line of work
Giving and receiving advice
Being around others who know what it's like to run your own business
On top of that we're joined by business networking expert Stefan Thomas, author of the book. Stefan brings a wealth of knowledge and advice on his specialist subject, and I'm certain you'll hugely benefit from it going forward.
Should You Start Your Own Business?
Épisode 7
lundi 29 août 2016 • Durée 16:34
The dream of starting your own business is probably the reason you're listening to this podcast. It's important to weigh up a few things before you throw yourself into any new venture though. Running a business isn't for everyone, and there's a couple of reasons why you might want to consider staying in employment instead.
Because you're passionate about something doesn't necessarily mean you can make money from it. There needs to be a demand for your product or service. You need to do your research and test the market first.
Because you enjoy doing something that you're skilled at doesn't mean that you should go into business doing that thing. Once you set up as self-employed you're going to have to do a lot of other (potentially less fun) things to build your business.
If you've given these factors some thought and are still determined to push on, then our contributors in this episode also have a lot of encouragement and reasons for why you should pursue your dream of starting your own business.
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Pete Matthew: Hi. My name is Pete Matthew. I am a chartered and certified financial planner, which is just a posh way of saying I'm a financial adviser, really. Managing the finances of a business is very much like managing personal finances, but a lot of us are not very good at that, so it's important to put in good practices right from the start. If you're going to set up as a sole trader, or in a partnership with somebody else, or as limited company, you will manage things slightly different.
So here’s the nub of it – each type of business works quite differently, and, actually, it often works as a bit of a pathway. A lot of people start out at sole traders or as part of a partnership, and then move on to become limited companies over time. Others skip the path, though, and jump straight in as as limited. The question for most people is, where do you start? I asked Pete if that’s something he’s asked a lot:
Pete Matthew: Yes, it is, and usually the answer to that is tax. If you're a sole trader or a partnership, you are your own entity as far as the revenue is concerned. Any profits you make as a sole trader, or your share of the profit of a partnership, becomes your income. Now if business is good, and you get to the stage where your share of the profits is more than 42 thousand, or there about, you are going to be paying higher rates tax, 40%. That's pretty steep. Whereas in the limited company, the money comes into the company, and it pays corporation tax. The difficulty with a company is getting money out. There's two ways you can get money out of a limited company, salary and dividends. It's usually the most tax efficient environment to be in a limited company, depending on your anticipated turn over. If it's going to be more than forty, fifty, sixty thousand, I would definitely look at a limited company.
So Pete gives us a good ballpark there – in the region of £50k turnover? Then you might want to think about incorporating. Remember, though, there’s a lot more than that goes into it, and one of the biggest is even more legal: that’s liability. So, the clue’s in the name – the limited in limited company, talks to the limited liability you have as the company owner or director. When you incorporate – that just means creating a limited company – suddenly that company is it’s own entity. It’s like a person itself. It has it’s own bank account, it’s own money, and it can shoulder the blame when something bad happens. That means debt, legal issues, and a whole lot more. As a sole trader, the company is YOU and only you. As a partnership, there’s two of you, but it’s the same idea. You’re the one that takes on all the responsibility.
I asked Gordon to give us some examples and we came up with a hypothetical gardener called Bill, and a café owner called Amy. His first question for Bill would be:
Gordon Howes: Could you have substantial personal liability if something goes wrong? His liability when he starts out is only to himself. He doesn't have any employees. It's unlikely that he's going to reach the VAT threshold with his turn over, and he's going to be dealing with house holders.There's little point incorporating a company and operating through a limited company with the additional regulations and reporting requirements that entails, in his circumstances. In Amy's case, she ticks all the boxes for adopting a trading style of a limited company. A number of reasons, first of all, you have your liability. Liability under fruit hygiene standards, liability to public, who are wandering in and out of your premises. She's taken on a lease on the rented property, so again, she has a continuing liability there. Far better that these things are conducted through a limited company, where there is some shelter from personal liability. We also need to consider the size of our business. I think it's fairly likely that she'll cross through the VAT registration within a first twelve months of trading. It would be better for her to segregate any liability to tax that she can by having an incorporated company. Once again, she's employing people. The moment you employ staff, you are at risk. For example, if you dismiss an employee unfairly, there is unlimited liability. It makes sense for Amy to incorporate a company.
So, Pete mentioned turnover as one factor, then Gordon took us to liability, company size, whether you have staff. Lots of things in there. The big thing is, this should give you an idea, but every business is different of course. It’s a good idea to talk to an accountant at some point, no matter your situation. They're the ones with the numbers to hand and can give you a wider picture on the pros and cons of each approach.
Talking of accountants, that’s the next big question – do you need one? What about a bookkeeper. Technically, it’s possible to do it all yourself as a sole trader, assuming you’re happy keeping the records and totting up the numbers. Limited companies are more complicated, and generally need at least some help from an accountant. But, beyond the minimum, why might you choose to work with someone on this? Here’s Julie Christie, our photographer friend, on her experience:
Julie Christie: After a year in business, I realized I could not do my own accounts. So I hired a bookkeeper at that point and my bookkeeper kept my books up until a year ago, and then whenever I became a limited company, she said that, you know, I really should start thinking about getting an accountant. So I now have a bookkeeper, and I have an accountant, and I chose them because they were the accountants that she worked with, so it's quite a streamlined process. And that's been amazing for me, because all that time I would spend trying to organize my books, I can now spend actually trying to grow my business and bring some money in.
Just to be clear, Julie could have done her own accounts when she was a sole trader, but she either didn’t have the aptitude, or the inclination to learn! Here’s Gordon again on all of those things Julie and our hypothetical gardener would have to think about:
Gordon Howes: Bill is a self-employed trader. He deals with house folders, primarily his customers, and he is going to be issuing receipts. He is going to be receiving and making payments. He's probably very adept and competent at what he does during the day, but does he really want to come home at night and have to start logging every single receipt, every single payment. He's considering buying a van. Who's going to help him make the decision about whether or not he should purchase outright, lease the van, can he afford the new van? He might want to boost his income in the quiet season, over winter. If he goes to an accountant, he can use that accountant as a sounding board. His accountant will have a number of other clients who are in a seasonal trade and might be able to make suggestions that would help him look for new business, identify new opportunities, so that he can increase his workload and stabilize his income during the winter period.
So, that’s what it’s all about. The receipts, the sales, the invoices – a bookkeeper can be a godsend in helping with that. As Julie said, why waste time on admin when you should be growing your business. And then Gordon’s point around advice – a good accountant will really help you to grow your business, using all of their experience to guide you the right way. For limited companies, that’s not all they do – think about Amy, our café owner again:
Gordon Howes: I think Amy should certainly consider engaging an accountant early. She's got a limited company. There are reporting requirements for a limited company. Her accountant will ensure that she compliant with these reporting requirements. She's engaging staff, she's required to operate a payroll. Again, she could delegate that responsibility to her accountants. They will ensure that the payroll is filed in time, that the staffs have pay slips, and can provide her advice on HR issues if required. It's likely that she'll be registered for VAT. Once again, the accountant can ensure that the VAT returns are prepared properly, the correct submissions are made, and they're made on time.
With all that in mind, which to choose? Julie worked only with a bookkeeper when she was a sole trader, and then took on an accountant too when she went limited. Me? I did my own accounts when I was sole trader, and only started working with the pros when I incorporated and started taking on staff. Which is the right path? I depends a lot on your aptitude with numbers, and how organized you are. I’m not in the slightest bit organized, so my accounts always ended up a day of stress at the end of the year. I’d take on a bookkeeper as soon as I could afford it if I had my time over.
Ok, we’re well into the finances now – that’s a bit part of the structure. How do we organize that once we’ve set up the business?
Pete Matthew: The first thing you absolutely must do is to keep the business finances separate from your personal finances. That obviously means a separate bank account. You don't want to be mixing the money up at all. It's a fundamental no-no.
Ok, straightfoward there. Keep your money apart, no matter what structure you choose. While the new account is still just yours as a sole trader, it makes your bookkpeeing so much easier. On that note, even if you do take on a bookkeeper, there are still a few things you have to do yourself, such as sending receipts, telling them who to invoice. How do you deal with that? Pete and Patricia, here to help as always:
Pete Matthew: You obviously need to keep really good records, and this is very often the problem. Receipts very quickly get out of hand. Invoicing can be difficult and difficult to stay on top of. Too many people use manual systems to do that.
Patricia McGuire: Right from the very beginning of my business, I saved one morning a week to do all the accounting and the invoicing, although some people say you should invoice immediately. I personally put aside Friday morning, invoicing and doing my accounts. It's a really good idea, from an expenditure point of view, as well as a mental health point of view, to put aside time, have a clear system, and keep your receipts and expenditures very neatly filed.
Recording that stuff is key – keeping track of everything. It’s such a small job to do day to day, but if you leave it to pile up, it becomes huge. I mentioned I’m far from organized, so I struggled with it, but Gordon outlines why it’s so important.
Gordon Howes: In terms of knowing how much income you've got, Amy wants to know what her daily takings are. She has a cash register, she need to record the ZED reports, every day. She needs to keep her record of it. Bill, on the other hand, probably not so important for him on a daily basis, certainly on a weekly basis. He wants to know how much he's earned. He needs to issue receipts to clients. He needs to consider how much he's spending on petrol. Each of them have a different requirement for record keeping.
No matter what type of business you run, you need to record the money coming in and going out, and either send it to your help to track, or log it yourself. The way I got around it was, the way I solve a bunch of my problems – technology! Pete says it well:
Pete Matthew: There are some great software tools out there which are very, very reasonable, which can help you get off on the right footing. I use a system called FreeAgent. There's another one called Xero, X-E-R-O. And these are great, low-cost accounting systems which you can get going with really easily. It really is just about making sure you know what's coming in from what sources, you're keeping really good records.
I use FreeAgent too, check it out at thepodcasthost.com/freeagent. But any system of that sort will let you do invoices, track receipts, create reports, and it’s actually really useful to use it with your bookkeeper or your accountant. It ties everything together into one neat little package. If you’re still struggling to decide on whether you should take on the help, I’ll leave you with Julie’s ringing endorsement here. Remember, do what you do best, and leave the rest to an expert!
Julie Christie: Every year, end of January, all my fellow photographers are on Facebook moaning and groaning about filling in their tax returns. They're staying up all night for three nights in a row, and I have nothing to do. It's all done. I really can't recommend it enough.
Thanks for listening to this episode of UK Business Startup, a podcast which takes you step by step through starting a business. This episode was all about the structure of your company, and how it manages its finances. If you want a recap and links to everything we’ve mentioned here, go to thepodcasthost.com/startup
Julie Christie: When I started I just did everything I thought you were supposed to do to market myself, so I got hundreds and hundreds of flyers run off, and I distributed flyers all around my hometown, offering my photography services. I asked all my friends and family to tell everyone they knew. Really, it didn't work. It didn't work.
So you know, Julie’s not alone here. It’s the way it’s always been done isn’t it? So it must work? Well, you’d think, but when was the last time you bought something off a flyer? It’s so common that we’re just blind to that type of marketing now. If that’s the case, how do we reach people? Often, it starts really local.
Julie Christie: I reached out to people who I knew, who looked like target client, and I offered to do work for them for free, in return for them allowing me to use their photographs, but also allowing me to reach their friends. I'd give them vouchers to give to their friends. I reached out to someone who was a bit of a mover and shaker in the area and she wrote a blog post about me. I tried to reach out to people who would talk about me and I reached out to the right people. The people I knew I wanted to work with.
That’s the beginning for a lot of businesses. Family, friends, local networks. And it works. Treat them right, and things can snowball.
Julie Christie: We really look after our customers. When we get a customer, we send them little gifts in the post. We have a really good relationship with them. We phone them. We have lots of conversations before the shoot. We touch base with them after the shoot, every year at least. We give them Christmas cards. We keep up with them on social media, and we find that they then, because we have such a good relationship with them, that they do our marketing for us. And I think that is a good, solid way to build the right client base. It's a slow burden though, and you have to be brave, and stick it out, and keep working at it.
I know a lot of businesses who thrive just on that. Just around word of mouth, referrals and you can do great from that, just like Julie. Let’s think wider though, outside of our network. How do we start to find people further afield? You’ll remember Patricia, who runs a recruitment company. She had some thoughts about finding people in another kind of network – the one I bet you’ve wasted at least a wee bit of time on today. Of course, I’m talking about Social media.
Patricia McGuire: Talk to your customers and find out where they're living in the digital space because you can waste an awful lot of time trying to cover too many of the digital options, the social media options. Once you know where they're living in this space, start becoming expert in those areas. It might be Facebook, it might be Twitter, Pinterest, Instagram. In my particular case, I use LinkedIn, a great deal. LinkedIn and Twitter would be my two major marketing tools at the moment. I'm also developing podcasting as a tool for marketing my business, too.
It’s great advice – depending on your sector, your audience is bound to have one or two networks they hang around on most. Do you know which one it is already? If not, take Pauline’s suggestion – start talking to people, ask them directly. It’s the easiest way. Of course, social isnt’ a natural fit for us all. Some are really comfortable interacting online, but what if you’re not?
Patricia McGuire: So, my main advice would be, don't be afraid. You're going to make mistakes. Everyone does, but you will learn very fast because your bread and butter depends on it.
Right, that was outbound – that’s you going on the hunt for customers. Finding them where they live, and building that relationship. But, maybe there’s a smarter way? What if you could attract customers to you? What if you could do something now that might attract customers to your company for years in the future? Well, that’s inbound marketing, and it’s all about making yourself easy to find.
Chris Marr: No longer are traditional marketing efforts working. You think about paid ads, radio ads, newspaper ads, all that kind of stuff. It might work to a certain degree, but it definitely aren't as powerful as, for example, having a website, having a blog and being found online because to be honest, that's where people are making buying decisions.
Yea, but what if you’re a care home – we gotta think demographics don’t we? Say, my target audience is over-60, so I’d imagine that traditional advertising works best for them, doesn’t it? Well, you’d think so, but Chris Marr thought otherwise!
Chris Marr: It used to be that people would say like there was a demographic there, that weren't online. Everybody is becoming more online. Even people in their sixties, seventies, and eighties. My granddad is eighty-six years old and has an Ipad and WIFI in the house.
It’s true, and you’re always reading about the grey-pound now – that’s the amount of disposable income out there in the older generation and retirees. And, like Chris say, a whole lot of which is online. That means it doesn’t matter who you’re targeting, the web has gotta be a major priority from now on. It helps too, that the web is the king of cheap, or free, inbound marketing. It’s all about the search – and that means Google! And that’s the big question every business has – how the heck do I get myself high in the search results. Well, here’s Pete Matthew’s thoughts on that.
Pete Matthew: Definitely content marketing, I think is how it is increasingly being done. It's not the be-all and end-all but it has many advantages. One of them is cost. It's relatively cheap to put out good content consistently. Cheap in terms of money, it's not cheap in terms of time and that's very often the objection that I get from people. You can be targeted, you can reach a very wide audience or you could be locally targeted, if you're in a sort of brick and mortar business where you want to reach your local community, then you can do that just as well.
So, content marketing – what’s that? In simple terms, it’s just publishing good stuff on the internet which ends up attracting people to your website. But what do you publish? Seems like that’s a question Chris Marr gets a lot.
Chris Marr: He's going to say, “That's great, Chris, I've got my website up and running but I need content. I need information there. What is the best type of content I should have on my website to be A, found in Google, for people to stay on my website and be interested in what it is I'm doing.” You really have to be creating valuable, usable, helpful content that people are searching for.
So, not rocket science here. It’s helping people, it’s showing your expertise by being hugely useful. And that means answering questions. Let’s think about Bill again, our imaginary Gardener, how’s he gonna approach this?
Chris Marr: For example, I'm not a big gardener, but they might say something like, “What's the best way to look after my lawn? Or my grass?” Or “What's the best flower feed for a type of flower?” Here comes my gardener experience. Basically, what I'm trying to get across is, they've got a problem and they're looking for a solution.
At this point, I know what you’re thinking, but this is what people pay me for? I can’t give it away! But that’s where the shift is – that’s what’s separating the businesses that are killing it online just now from the ones that are trying to sell sell sell, and failing.
Chris Marr: You're trying to build a relationship with people, so the best content a gardener can do is stuff that people are needing help with right now. They might not want to hire a gardener, but if you're the one that educates them and the one that builds trust with them, when they do need a gardener the person that they're more likely to go to is the person that they've been educated by, the person that they've been building the relationship up with online. You've got to think to yourself, just to strip away from Bill for a second, is what are people searching for on Google? What problems do people have? How can we help them with those problems? How can we answer those questions? That's what people are searching for on Google. That's how you're going to build a relationship with people and that's the type of content that I would advise someone like Bill to do.
So it’s all about the relationship. They’re interested in a topic, you help them, they grow to trust you, and even to like you. In a lot of ways it’s about sideways thinking. It’s about figuring out who exactly uses your product, and what type of content they’d be interested in.
Pete Matthew: Here at my financial advice practice, we want people who are serious about making decisions with their money, they want to achieve their goals. So, my podcast is geared to people like that. We're giving them good information that they can act on themselves while at the same time saying, “Look, a lot of this is really complicated, you might want to see an advisor. Hey, here we are.” It's about putting out stuff that people can use, which entertains them, educates them, and powers them to take action and ideally, to take action with you. It's lots and lots of things you can do, certainly it's working for us.
The classic take on this is, give away the what and the why, then charge for the how. OR, another way of putting it – information is free, charge for implementation. That means, no matter how much you tell people, there’s always a big group who need more help, some handholding or, even though they know, just want it done for them anyway! And who are they going to turn to. Well, the guy that told them about it in the first place. Looking further, there’s another pretty interesting benefit. And that’s The fact it can become a really valuable tool in your in-person selling as well.
Andy Brown: When I get a prospect comes in to my space, they e-mail me asking a question and I will reach out and say, “Look, I've already answered that question.” In a nice way. You're going to get more value by listening to the show, listening to this episode. That's great because it conveys my personality and my voice and maybe they could get to know me by that vehicle.
So that was Andy Brown from tripleyourclients.com. And he’s talking about the fact that his customers get to know him through his content – that means trust. That means credibility. That means loyalty. Not to mention the authority he’s building by putting out these really useful resources. Articles that seem to directed straight at that person. It’s like you’re in their head, seeing right through to their secret worries.
Andy Brown: I think every business needs to have content marketing strategy, where they're answering questions that their consumers ask. When I've done that, it's been really successful. Page one of Google for the specific search term that I'm targeting. You need to do more of it, I think that you can never end. It's not complicated, the audience asks questions and you answer them. A lot of small businesses, they assume that all those questions can be answered on the phone when someone contacts you, but as we know, that's no longer happening. People are making the decisions before they contact you. They're basically doing the research online. If they can't find the answers on your site, they're going to go somewhere else.
Right, we know what we’re doing – we’re answering question, squashing worries, we’re becoming the most useful person in our industry. But how do we get this stuff out there?
Julie Christie: We also blog, we have a blog on our website and we do write a lot of content surrounding what you should wear to your shoots, things to think about before your boudoir shoot, how to look after your skin before your boudoir shoot. We try to get found by potential clients through writing content for our blog, as well.
Blogging is a great one to start with – that’s just writing articles on your website. No kit required – just you, your keyboard, and the last few questions you were asked by a customer. Blogging’s also the most direct way to get found in search – Google lives on text after all. But, the downside is that, because it’s so easy, the competition is huge. It’s still something you can crack if you find your niche, and what’s unique about you. But blogging’s well supported by the other methods, and ones that might seem a bit more cutting edge.
Andy Brown: I've done a lot of video in other businesses that I've had over the years. Not done so much in the paper click space I'm working in at the moment. When I was in the golf industry we relied heavily on them, as you can imagine. On golf tips in small one minute, two minute videos. I still think YouTube is such a massive opportunity for small business. So, if you can offer out evergreen content, you should really take the time and you'll see the results. It's astounding.
Video’s great for being found, because it gets you visible on the second biggest search engine out there. That’s YouTube. It’s also an even better way to get your personality across – people can see you, hear you, really get to know you. But, one downside, video can be tricky to make, especially if you want it to look good. Something above the standard selfie stick guerrilla filming. But then again, that’s raw, that’s honest, and a lot of companies have made it work really really well for them. The other thing about video is that it’s a hugely busy medium, and attention spans can be pretty low, people flicking from video to video. So, there’s an alternative, and since you’re listening to this show, you’ve probably heard of the humble podcast.
Chris Marr: I loved doing video but I began to find myself listening to mono podcasts. I just thought I'd give it a go. The level of interaction from listeners is sky-high compared with video. I think it's because, podcasting particularly, can be passively consumed. You can be doing something else while you are listening to a podcast. Walking the dog, cutting the grass, you can be on the commute, you know? We've all got these smart phones with us these days, which automatically downloaded the latest episode of whatever we've subscribed to. I get to speak into people's ear drums for half an hour every week and there's thousands of people listening. I get to fill a good size local sports arena every week and speak to that many people and they're giving me their attention. I just think that's staggering. Because of that ability to consume it passively and because of that very intimate nature, I think, of having somebody's voice in your ear, it's certainly driven a lot more interaction, inquiries about doing business with us. I wish I'd done it earlier.
Andy Brown: I think podcasting has really worked well for me and will work for others because of the fact that you're having a conversation. You can actually talk personally to the listeners, a one-on-one experience. It's not like an e-mail, where the reader's feeling that you're talking to everyone. This is a one-on-one conversation.
That connection is what you’re really going for in your marketing. We talked earlier about relationships, about building trust, building loyalty – that’s what you’re looking for. All three of blogging, video and podcasting can do that, and really, good marketing means doing at least two of them, if not all three. Podcasting is a funny one because it’s a little bit behind the other two in terms of take up, but that might be a bit of an opportunity. When I asked Andy what he thinks the future of podcasting looks like, he was pretty emphatic.
Andy Brown: It's going to be everywhere. Well, if you're sort of nerd-techy like me, it is everywhere but the mainstream will see it in a couple years time. You talk to friends, more and more they're going to be recommending podcasts. The same way that they talk about what they enjoyed on Netflix, for instance. That wasn't around a few years ago. Fast forward to three years from here and it'll just be, “What's your favorite podcast?”
Even better, depending on how you do it, podcasting can be the easiest content of all to produce.
Andy Brown: It's not a big deal, I record mine on my iPhone and then use an app to produce it. It goes automatically onto my feed, which is hosted on Sound cloud. It's the simplest set up you can have and it's very inexpensive.
Marketing is a huge subject – it could be a series on its own – in fact I’m pretty sure we’ll do just that, creating a whole season on it for this show. But, when you’re getting started as a small business, less can be more. It’s really easy to take on too much, to tackle every marketing method out there. But if you cover everything, just a little bit, then it’s pretty likely you won’t make a big impact anywhere. Sometimes it’s best to choose a few key approaches and hit them hard. Concentrate your efforts and you’ll see a big impact, then you can move on to the next technique. Or just double down on what’s working!
Whichever route you take, there’s one thing that’s even more important – that’s’ consistency. We all struggle with this. Everyone hammers their marketing in the early days, to grow their customers. That’s when you’ve got lots of time, and not many contracts. But, what happens when the marketing works?
Chris Marr: The gardener, for examples, he's got loads of gardens, he's filling up his schedule and all of a sudden, he hasn't got any time to market his business. Now, the biggest mistake that Bill could make is to not plan in time to build his business. The worst case scenario for Bill is: he stops marketing, all of a sudden he starts losing clients for some reason, or customers stop needing him. The next thing he knows, he's got no customers left or he's only got a few customers. Then he starts marketing. Marketing doesn't take effect immediately, it's something you need to be building. It's a foundational thing in your business, something consistent. It's about awareness and it's about staying top of mind and about … Reminding people you exist, basically.
I love that – reminding them you exist. Chris’s highlighting the fact there that big brands don’t assume they can do one big campaign, and that’s them in your mind forever. That just doesn’t work. You fade in their minds, other brands get themselves out there and overwrite the work you’ve done. SO, you need to keep doing it. Keep marketing. Every day. Every week.
Chris Marr: You need to pick out a time in the day where you are spending an hour or so working on your business. You need to have a plan for that. What are you doing every day to build your business? The most successful people do this….. you've got to realize that actually, you can't just do the gardening. You need to do the marketing, as well.
Remember, though – that effort is so worth it. Consistent marketing helps you keep the work coming in, or the sales going out. Not only that, but GOOD marketing, makes sure those sales are to customers you actually like. Customers you WANT to work with. Remember Julie was talking about relationship marketing earlier? If you find customers that fit your personality, your values, your brand, then everything is so much easier. First, your customers stay longer, become more loyal. Next, you get more referrals because they actually like you! Ever better, you can charge more, because you’re in demand and you have the social proof to justify it. Last of all, probably the most important one, it makes your work more fun. And what’s the point of going into business if it’s not to do work we love?
Julie Christie: It's really hard to follow this advice, but my advice would be never forget who your target client is and never get desperate. I think that's when you go down that slippery slope and you start working for less money, you start working for the wrong clients. Try and stay strong, try and find that right client. It's easier said than done.
This was episode 3 of UK Business Startup, and this time around I want to ask a little favour. If you enjoyed the show and it helped in just a small way in your own business adventure, would you mind popping over to the iTunes store and giving us a rating and a review. It’s a huge help in getting the show out to more people. You can do it either in the Podcast app on your phone, or through iTunes on your computer. If you’re not on an apple device, then, forget about this itunes caper – instead, just fire us a tweet letting us know what you thought of the show. You’ll find us @thepodcasthost on Twitter.
Thanks as well to everyone that helped in this episode – all of our interviewees. And you can find out more about what they do at the shownotes today which is at thepodcasthost.com/startup/103
Thanks for listening, and see you in the next one!
Transcript
It becomes very apparent that you can't do everything and that's another piece of advice. Don't be a superhero. You cannot do everything.
I’m Colin Gray, and this is UK Business Startup, where this time, we’re talking people. Do you remember that quote from Chris Marr last time around?
Chris Marr: You need to pick out a time in the day where you are spending an hour or so working on your business. You need to have a plan for that. What are you doing every day to build your business?
This is one of the biggest mistakes new businesses make. They forget to think big. They forget to make time for planning, for strategy, for figuring out how to make the business a success. Instead, they just keep doing what they’re good at. The gardener keeps gardening, the programmer keeps programming, and the baker just bakes! The problem is, that’s not building a business. That’s building a job. And it’s a really terrible job at that. It relies on you to run, it relies on your time, so when you’re not baking, you’re not earning. That means no breaks, no holidays, no time to get sick! And it means no time to bring in more customers or grow a business. That’s what Chris from the Content Marketing Academy was talking about.
So, what’s the way out? Well, building a business that doesn’t just rely on you. That’s what. And that means staff. So, this is where it can get really scary.
Julie Christie: I have two employees. I didn't necessarily feel ready to do it. I just knew I had to do it. For two months, I couldn't afford it. I definitely took a hit because I was training her and I was sitting beside her all the time and we weren't taking on more work. Within two months, she was paying for herself. It was a very, very scary move to make but it was the right move and it allowed me to work on the business. I no longer was having to phone clients, go back and forth with anyone, design albums. All the admin was taken away from me so I was able to then do more shoots and more marketing to get more shoots.
That’s the bit that surprises most new business owners. The admin. There’s so much to do, from logging receipts, to paying tax, to handling bills. And that’s just the general stuff. There’s bound to be tonnes specific to your industry too. So, this is where a lot of people start, as you heard there from Julie Christie, the founder of TeaBreakTog.com. She’s still doing some of the main work – photography in her case – but he’s using the time that’s been freed up to do the marketing too. As Chris mentioned at the start, and even more in the last episode, that’s your big job as the founder. Marketing and growing your business. You can still do a bit of the technical work, but you need to find time for the high level stuff. Generally, that means staff.
So, how does it work when you’re starting out? Let’s look at Bill the gardener again.
Patricia McGuire: As a sole trader, Bill can take on a temporary member of staff. Certainly, Bill could advertise and take someone on just for a seasonal period of time so he could offer a seasonal contract to them which would be fixed, which means there's no obligation to keep them on after that or he could give something like a zero hour contract just to see how things go. If things work out well, he can tell the employee that he will increase the hours.
That’s the way in for a lot of people who start out working for themselves. They take someone on for the busy periods. No long term commitments, just getting a bit of help when it’s needed. It is a great way to build confidence and learn a few of the processes. And it gets you used to managing people – something most of us aren’t used to! So, once you make the decision, what’s our responsibility here with the tax office?
Chris Marr: He needs to inform the Inland Revenue that he's going to become an employer before he engages anyone. He will register for PAYE as an employer. He will receive his employer's PAYE reference as well as his Accounts Office reference.
This is easy enough, and it’s the same for a limited company. In fact limited companies tend to do this right off the bat! Either they’ll be taking on staff right away, like a café, or you want to get paid as the founder. Either way its’ really easy to register on the HMRC website – honestly, quick as anything.
Pete Matthew: One thing it's really important now is you've got to report to HM Revenue and Customs now when you pay your employees. You need to pay your employees on a certain day and that will need to be reported to the Revenue on that day, and any tax and national insurance due to the Revenue will need to be paid at the same time. That's called real-time information.
Okay, this might sound a bit complicated, but don’t worry, there’s technology out there to help. Remember on episode 2 when Pete was talking about managing your finances?
Pete Matthew: There are, again, software systems usually very often a part of the general accounting software systems that you can buy and they will do all that for you, so you'll need to register with the Revenue as an employer so that you can submit your real-time information, your payroll information as you go.
Both Pete and I have mentioned it before, but FreeAgent, is the one I’ve used in the past. It handles both invoicing and payroll, working out all of that stuff around tax and national insurance. There are plenty of other apps out there that can do it too. So, don’t let this part put you off – help exists!
Talking of which…
Julie Christie: When I decided to hire Fiona, I spoke an HR consultant who talked me through everything. He also put together a contract of employment and all the paperwork that we had to have in place and he advised me on insurance issues and things like that as well. That was all taken care of and then my bookkeeper, she took on payroll as well as keeping the books. It wasn't too bad at all and has been worth that's weight in gold.
We talked about bookkeeping and accountants in the finance episode, and Julie highlights it here. They can take on payroll for you, handling all of the fiddly work. And contracts – that’s a tricky one, and well worth getting some help with. You’ll find HR consultants all over the country, and you could get contracts and handbooks made up for just a few hundred pounds. In most cases, as Julie says, it’s worth every penny.
Ok, we’ve dealt with the prep. Everything you need to do to get set up as an employer. That’s a bit dry, but the next bit’s more exciting – that’s actually having them on board, getting the help, the input, the expertise they offer. Saying that, before we get too excited, I guess we need to think about what they want in return…
Pete Matthew: Paying staff isn't massively different whether you're in a limited company or you're sole trader. They are your employee and so you have certain responsibilities. A key one, of course, is paying them. They're not going to work for you very long if you don't pay, so that's a drain on cash flow. That needs to be planned in, always a good idea to have two or three months cash flow in reserve if at all possible, so you know you've got at least two or three months' worth of payroll that you can pay your staff so you're never sort of going right to the wire.
This ties into those questions at the start of the episode. When do you know you’re ready to take someone on? As Pete says, money plays a part. If the work dried up tomorrow, how long could you pay them for? Now, don’t let this scare you – it’s planning for the worst case. And with the help of someone else, it’s even less likely to happen than it is right now. You’ll be freed right up to search for more work after all. But, it’s worth a think. Next, what about frequency?
Pete Matthew: I would err towards paying people monthly for the simple reason that most people pay things out on a monthly basis. They're paying house and car insurance and other things on a monthly basis. It can be easier for your employees to budget on a monthly basis. Having said that, I have been paying on a weekly or fortnightly basis since I was at university and part-time at McDonald's. It's a long time ago. Some people may prefer it. I think the world is increasingly moving towards monthly though. It just seems more logical to me.
This depends a lot on industry too – the leisure industry always tends to pay weekly, but the finance industry doesn’t, for example. This isn’t a big deal, just choose what’s right for you. And then? All that’s left now, is finding the staff themselves!
Alison Colley: If Amy is looking to take on staff, there are various routes that she could take. She could take the traditional route of putting an advert in the newspaper but in my experience with my clients, that can be quite expensive and quite a timely process. Another way of looking for staff would be to use somebody specific like an agency, somebody who she can trust to make those initial findings for her and to try and find the right member of staff, so do the initial interviews and things.
From experience, vetting and interviewing takes a long long time… Agencies charge a fair bit for this, but sometimes it’s worth it…
Alison Colley: The other way of doing it is to look within her circle, within her network, see if there's somebody who she trusts and likes who might be looking for work. I find that way with my clients who were taking on their first member of staff, this is normally how they find them rather than going down the traditional advertising route because it would be quite daunting to bring someone into your new business especially when you've worked so hard on it, so finding someone that you trust and know in the first instance is probably a good way of finding staff.
Interviews can only tell you so much, so that personal connection can make a big difference in finding someone you trust. AND someone who’s right for the business. You’re going to have to live with these people, day in day out, so personality matters.
Pete Matthew: These are not just payroll numbers after all. They are people and they come with issues to deal with, things like needing to take time off to go to hospital appointments and emergency, things which might happen to him for family reasons, in inverted commas, that you've got to sort of be able to cope with these things.
And that’s when things get complicated. Because real people ARE complicated. But here’s how Pete thinks about it.
Pete Matthew: Certainly, a key thing for me here in my practice is culture. We obviously need people who are competent. They need to be able to do the job but I would rather have somebody who I need to train but who fits in well with me and what I'm building here rather than have someone who is superbly competent but is a bit of a pain to work with.
Company culture is huge, and it’s all your job at the start. You’re the founder, you set the tone. Small companies always have a culture based on the founder’s personality, their values. As Pete says, the plan is to find people that fit that culture, and for you to reinforce it every day. If you live and breathe the values of your company, then that’s infectious. It improves the morale, the productivity and the work that everyone does.
Now, there’s one last option I want to go through, before we’re done. Just incase it still seems too daunting. There is an easier way, and we’ve already alluded to it…
Virtual assistance – that means working with people OUTSIDE of your business to do the work of an employee. Julie mentioned earlier that her bookkeeper does payroll for her – that’s a virtual assistant. The bookkeeper isn’t employed by Julie, but she does work for the company. Work that needs done on a regular basis.
So, How would that work with Amy, our café owner, for example?
Alison Colley: This is certainly something that Amy should be thinking about for things like her marketing and social media whether she goes to somebody using a service like Upwork who provide virtual assistance or whether she goes for someone more local, would be down to her to decide. Certainly, with virtual assistance, you can give them a try without having to commit anything in the long term. You can try a couple of people and see how it works out. I would say that it would be better for a small business to try and do it virtually for those sorts of things initially than taking on an employee and having the additional costs and expense of things like PAYE and national insurance.
Great advice there from Alison Colley whose an Employment Law Specialist over at alisoncolley.co.uk. Whether they’re in the UK or abroad, working with a VA gives you a tonne of experience in managing tasks and staff. And that’s without a lot of the HR or admin headaches. I know a lot of new businesses that used virtual assistants to grow to a certain point and then they’ve graduated to in-house staff. It lets you get that work off your hands without worrying about long term commitment. Of course, the downside is that they might not be as bought into your business as an employee. And managing staff at a distance can be tricky. But, for most people, especially sole traders or really small companies, it can be a stepping stone to much bigger things.
So, are you ready to take someone on? Are you Set for that leap?
Patricia McGuire: I think you know when you're ready to take on staff. It becomes very apparent that you can't do everything and that's another piece of advice. Don't be a superhero. You cannot do everything, but there are worries, obviously. How are you going to pay them? How are they going to settle into your business? How are they going to reflect your business? But actually, you know when the time is right. You know when the money is right. You just have to do it. If your business is going to grow, you have to employ other people to help you grow it.
This was episode 4 of UK business startup. You can find links to everything we’ve mentioned on the show at the Startup website at podhost.me/startup/. Thanks too to all of our contributors, and you can find out more about what they do at the same place.
If you’ve enjoyed this show, please do pop over to the iTunes store and give us a review. It helps in a huge way to get the show out to more people. And if you’re not on an apple device, then tweet us @thepodcasthost – we’d love to hear what you think.
Thanks again for listening and we’ll see you next time!
Transcript
I think because I enjoy my work so much as well, it's hard not to just work when you have spare time. I have to say, I'm not really there with that yet.
I’m Colin Gray, and this is UK Business Startup. Where we’re about the get productive. If you’ve been following along, there’s a chance you’ve made the leap by now. Are you already working for yourself? Or your own company of course. If you are, I want to ask you this: how many times have you been asked about whether you work in nothing but your pants? It always seems to me that 99% of the working world think that the main advantage of self-employment is not having to wear clothes.
And of course that is part of it to be fair. But the other part, the more serious one, is suddenly being in control of your own working life. Now you can choose what you do, and when you do it. It’s freedom, at last! Or is it?
The problem is, businesses tend to be more than a job. They’re 3 jobs, 5 jobs, even 10 all rolled into one. Especially in the early days, you’re doing everything. Suddenly freedom looks like 14 hour days, 7 days a week. Because there’s always something to do.That’s why, this week, we’re talking about your working life. That means schedule, priortities, productivity and making sure you have a real life alongside it all. Let’s look at the small view first – one day. When no one’s telling you what to do, how the heck do you make the most of it?
Laura Lucas: I was quite used to that from sort of my corporate job I suppose. I was always a team leader and had to plan the direction of the department. Not just plan my own days, but plan the days of my teams and things like that as well, so, it wasn't something that was completely new to me.
That is Laura Lucas, a new guest on UK Business Startup. She’s a business coach at Inspirential and works on her own. This is how she starts to plan her day.
Laura Lucas: I know that I want to help as many business owners and leaders as I can. That means I need to find those business owners and show them what I can do to help them, and get them on on-board with me. That's then broken down into a number of different activities, so putting up information online that's going to attract those sorts of people, going out and meeting people proactively through networking. Then getting them into meetings and showing them my expertise and making sales ultimately. I've got to make sure I'm doing those sorts of activities every, single day. That helps knowing what the overall goal is.
So, this is it – our days aren’t really our days. They’re just one small part of the wider goal.
Patricia McGuire: I think you have to be quite strict with yourself that you set aside some time just for you, and not only time just for you, but time to think, because it's very easy to get bogged down in your day-to-day business. A business needs you to stop and think about what's coming next, and the mistakes that you've made and how you can rectify them.
Don’t worry, we’ll get back to the real detail on how to plan your working day, but this comes first. The only way you’re going to have an effective day – and to grow your business – is by having each day move you just a little bit forward towards your main goal. Patricia McGuire said it well there – it’s really easy to get bogged down, to end up doing busy-work that doesn’t push you forward. It sounds ridiculous when your income depends on avoiding that, but it happens to us all.
Laura Lucas: I started to fall into that trap probably early last summer. I had a period when I was really, really busy. Then I have two times in the month when I do my accounts, because I don't have masses of transactions in my business. I just sit down for half-an-hour, twice a month and do that. I sat down and realized that I hadn't brought in any new business for three weeks, even though I had been really busy. That gave me a real wake-up call. It was quite lucky that I did that. You can be a busy fool can't you?
Laura has a good method there. She’s got a system in place, every fortnight, where she checks her progress. Her aim is clients – she wants to help as many people as she can, and earn an income from that of course. So, she sits down – fortnightly accounts – what’s my goal? New clients? Have I brought any in? No! Well, damn… Let’s see – what can I do to change that?
Once you’ve got your overall goals, how do we start to break it down so it leads us to effective days?
Laura Lucas: I'll make a sort of three month plan really. For making detailed plans, I find three months is about the right timescale for me, and I'll know what I want to achieve in that three months, and break it down into step-by-step tasks. Then each week, I try and batch task and stick to the same sort of activities.
Julie Christie: I would say, have a schedule for every day or for every week. Plan your week ahead and schedule in all your tasks, and give them priorities. What's the most important? What's the least important? Put them in that order. Schedule them into your diary.
That was Julie Christie from Tea Break Tog joining the show, and giving a good example of where the long term planning leads us. Once you have your 3 month plan, you break than down into monthly goals, and then weekly goals. Once you have that level of detail, you’re ready to really schedule in the work.
Laura Lucas: Mostly on a Monday, I'm in the office doing things like, writing blog posts, writing social media posts, writing new material for clients and things. Tuesdays, Wednesdays and Thursdays, are a mixture of seeing clients and meeting new, prospective clients and things. On Friday, I generally only work the morning on a Friday, and that's more for projects, and really thinking about moving the business forward. I stick to that as much as I can, it doesn't have to be perfect, but each week with my three month plan, I sit down on a Thursday afternoon and plan what my next week's going to look like. All the activities that are coming up, I actually put them into slots in my calendar.
I do the same – monthly goals, to weekly goals, to small tasks. Those are then scheduled into the calendar on Monday morning. You’re probably thinking it sounds a bit of a pain to stick to that – a bit onerous – but it’s exactly the opposite actually.
Laura Lucas: When I'm sitting at my desk, I never have to think about, “Oh what should I do next?” I know what I have what I have to next because when you have that uncertainty, that's when procrastination can creep in. But if you know exactly what you're going to do, you can just get your head down and do it.
It’s ironic, because one of the big attractions of going self-employed is the chance to be your own boss. But, the thing is, that freedom comes with a big price, and procrastination is a big one. This type of scheduling is kind of like creating a little boss in a spreadsheet – someone who’s telling you what to do every minute of the day. And with that discipline comes a whole new type of freedom. The freedom that comes with knowing that you’re not missing things, you’re not wasting your time. You’re moving forward, just a little bit, every single day.
So, what if you want to start off a little easier. You’re not ready to go full-schedule. What’s the alternative?
Andy Brown: It's always a tough one isn't it, the productivity, getting it in order?
This is Andy Brown from TripleYourClients.com whose helped us out before.
Andy Brown: I use products like Allthings and Slack and Evernote to control and also a pen and paper comes in very useful at the end of the evening when you're trying to work out, right what's a priority of the next day? I'm a strong believer in having all that technology, but sometimes you just need to sort of reach back and think, “Right, what have we got on my plate?” I've got some sticky notes all over the place and bits of paper. I put it in an Allthings list or I look at an Evernote, things to do file, and I'll work through that. Generally, to make sure that I'm getting the stuff done, I need to prioritize, and so I need to work out what the top three things are the next day.
Andy’s method is a good start. At a minimum, at least finish the day by planning your next one. What are the next 2 or 3 jobs that’ll move your business forward? Get them down on a sheet of paper, and get them done first the next day.
Laura Lucas: I also tend to use a timer, quite a lot, as well. I'll set the Pomodoro Technique, I don't know if you've heard of that one? It basically works on twenty-five minute intervals. You set a timer for twenty-five minutes, and you work for twenty-five minutes, then you stop and have a five minute break and do another twenty-five minutes. What find's good about it is, you can sit there and think, “All right, I need to write this blog post,” and maybe it's going to take as long as it takes, and then you'll get half way through and you'll be like, “Oh, I'll just have a wee look on Facebook,” or something like that, but if you've got twenty-five minutes, you think, “Right, I'm going to focus on this for twenty-five minutes,” and I'll kind of race myself in that twenty-five minutes to get the first draft of the blog post written. If my mind starts to wander, I'll think, “Oh, I'm at seventeen minutes, I've only got eight minutes to finish this,” and it just keeps me on track.
The Pomodoro technique is pretty well known in productivity circles. It’s a great way to break up your day and stay productive. Chop any task into 25 minute sections and have a wee 5 minute break at the end. That’s your reward for a good chunk of focus, as Laura says.
The problem is, this is all easy said, not so easily done. Your business tends to have a life of it’s own and, in my experience at least, it fights against the work I do to manage it. I’ve already mentioned the long days and the 7 day working week. It’s an easy trap to fall into. So how can we deal with that?
Patricia McGuire: When you're thinking about your workload as a new business or an entrepreneur it's very important that you make some time for yourself within the week, because you will very quickly become burnt out. Starting a business, running a business, owning a business takes up practically every second of your time, your mental space.
Andy Brown: The lifestyle I have, if I'm feeling stressed, or feeling as if the world's on top of me, or on my shoulders, then I can just open the door and walk the dog. As simple as that is, it means that I can get out there and then get back, and I'm in a better frame of mind to attack the day.
You knew it was coming – this is the eternal struggle with work life balance. It’s bad enough when you’re working for a company, but as soon as you’re the ultimate boss, it jumps by a factor of 10. How do you keep the endless task list under control, but still have a life?
Julie Christie: I am not good with boundaries between work and person life. It's something that's on my to-do list, is to try and be better at that. I work from home, so it's really hard to create those boundaries, and to keep them, because I can see my desk. Everywhere I go in my house, it's all open plan, I can see my desk, and that's really hard to stop yourself from working. I think probably having a separate workplace from your living quarters is a really good idea, which is something I don't have yet, and I hope to have. I think that will really improve that situation. I think because I enjoy my work so much as well, it's hard not to just work when you have spare time. I have to say, I'm not really there with that yet.
Julie’s situation is really common – A lot of people that start working for themselves have no office so you’re just taking up a desk at home. The problem is, you love the work, you’re passionate about it, so it doesn’t feel like a stress to just get something done when you have a spare minute. But that means evenings, weekends, and as much as that doesn’t bother you right then, long term, that’s not good. You need the downtime. And, of course, that’s not even considering others in your life yet.
Andy Brown: It is tough because you don't want to be working all hours. You've got to respect the hours of the people that's around, your children and your partner or your wife, whatever, you really need to be respectful of that because if they've had a hard day working, they come in and you're still working, then you've got to acknowledge that they're in a down time, and then you might still be in a project. It can get tough.
Laura Lucas: I started to more and more schedule my down time, which sounds a wee bit sad actually, but I find if I schedule things, I schedule fun things in. If I know I've got loads of fun stuff to do at the weekend, I don't have time to do it housework, so I know I need to do housework in the evenings.
Julie Christie: When work is over, it's over. You close that computer down and you leave. I would definitely say, try and have very clear boundaries, physical boundaries. If you work from home very physical boundaries, where you work and where you play, so that you can close that door and forget about it. That's something I can't do. However, I do try and schedule what I'm doing each week, and what I'm doing each day, so that I can get through that work and hopefully close it down at the end, and leave until the next day.
I mean, it’s all common sense, but it’s also commonly ignored. And there’s always situations where you HAVE to ignore it. I mean, if that client job needs finished tomorrow and it’s not quite done, then who else is going to do it? In situations like that, Andy’s suggestion is good – he mentioned respect for the people around you. Talk to your partner, your kids, tell them the situation. Communication really is key. If you do that, the occasional (or not so occasional) late night won’t be quite so much trouble.
Now, let’s have a quick look at the other type of overworking. And this one’s a lot more insidious.
Laura Lucas: I do a lot networking via social media, and that's where the boundaries get really blurred, because I really enjoy it. It's a fun social thing, and it's a work thing. Sometimes I can be telling myself, “Oh, I'm doing this because it's a work thing,” but I'm actually, pretty much, just wasting my time and wasting the energy, and not being present for my family. It's something I've been conscious of, certainly the last week or so. I actually have times when I go and put the phone away in a different room, switch it off for an hour or so, and make sure that I'm taking breaks from it.
I’m a bad one for this. My wife’s watching something on TV, I’m not that bothered, so I’ll pull out the laptop and just fiddle away with a few easy tasks. Get a few things out of the way. Laura’s right, though, I’m not present, and it’s cuts out any chance of chat, whether it’s about the program or life. It also means I’m not really relaxing, and after a few days of that, you do notice it. It keeps that base level of stress and anxiety much higher. I can tell you from experience, it’s really not good for you. Keep working time deliberate, and don’t let it bleed over.
Laura Lucas: Sometimes I make a conscious choice to spend an hour, usually what I'll do in the evenings, because I’m a morning person, by evenings I'm not really up for doing much hard work, but I'll maybe do a bit of research or I'll do a wee bit of sort social media networking with a work head on, kind of thing. For me, it's a mixture between work and fun. It is a conscious decision to do a wee bit of work some evenings, and if I've got a project going on. Yeah, it's definitely planning in the things, the fun things and the family things that you want to do. Then you have to make the work fit around that.
A conscious decision, that’s the key. Plus, of course, we’re not ruling out a flexible schedule. That’s one of the reasons we do this, after all. Work whenever you like, as long as there is some downtime in there.
Andy Brown: I've never found it difficult to pick up the pieces late in the evening and get on with three or four, five hours more work. A lot of people would struggle with that. They would find it almost impossible. Like anyone, I enjoy TV, films, just chilling out in the evening, but I can chill out in the evening, and then still go back to work afterwards. That's a sure sign that I enjoy what I'm doing, and when also there's a pressing need to get the work done, but everyone would make an excuse about that, even if when it's their own business and that might be a reason why they fail.
That’s the second time this has come up, loving your work. “a sure sign I enjoy what I’m doing” as Andy said. That’s usually the biggest benefit of running your own business, and it makes up for all of the downsides, for me. But, as we’ve heard, you’ve got to watch it doesn’t lead you into the trap of never quite switching off.
Ok, I know the objection that’s popping out of your mouth right now. And it’s something that’s both the lifeblood of our business, and the bane of our existence. Yea, I’m talking about clients.
Laura Lucas: Yeah it is really tricky. For me, it's not been so much an issue of accessibility. I've set pretty firm boundaries with my clients that, yes, they can contact me, but I'm often with other clients, so I tend not to take phone calls. It tends to mostly be through email unless it's by prior arrangement. They're usually clear that I might not even answer them that day. For example, someone might be emailing me right now, I'll go home from here, I'll be straight into kids and chaos, and then it's evening. I might answer them this evening, but they already know that it might be tomorrow before I answer them, so that's not so much the issue.
Laura’s spot on there – clients are trainable. They’ll expect what you lead them to expect. So if you answer an email, even once, at the weekend, then they’ll expect that from then on. It’s the clichéd advice – communicate with them, set those boundaries that Laura mentioned, and coach them to expect a reasonable amount from you. I’ve often found that being less available actually makes a client take you more seriously. It shows you’re running an established business with real systems and processes.
Laura Lucas: I think that's all right, especially because I coach my clients on setting clear boundaries, and not always being completely on, and completely accessible, so it's up to me to kind of set that example as well. So, when I say, “I'm taking a week off, off the grid,” I think people get it. I don't think it's that big of a deal.
Some of you might have more than just clients. You might have an audience. If you’re putting out great quality content – like a blog, a podcast, videos, even printed materials, how do you deal with a break there?
Laura Lucas: So if I'm not there, then there's maybe blog posts not going out. There's maybe stuff on social media not happening, but I can schedule those things in advance. I can either decide to check in with them while I'm on holiday, just interact with social media posts and things like that, or I can just make it clear to my audience that I'm actually taking a week off.
Again, it’s communication! Tell people what’s happening and – funnily enough – they’ll understand! If they like youre material, they know you’re a human being. And that means time off, every now and again.
Ok, I’m going to start to tie this up. The final thing I want to cover is about something a bit deeper. Not only managing the work you do, but CHOOSING the work you do.
Laura Lucas: I was actually listening to Michael Hyatt's Podcast this morning. He was talking about, now what was the phrase he used? “Doing less to achieve more.” He talked about how when we say, “Yes,” to something, we're actually saying, “No,” to something else. For example, I've said, “yes,” to coming here and doing this podcast, it means I'm saying, “No,” to going home and writing another blog post, for example. It's just being very conscious about these things.
This is huge. Especially when you’re starting out, you feel like you have to say yes to everything. You can’t pass up an opportunity. But, remember what Julia said in the marketing episode? She talked about finding the right clients, and how beneficial that is in the long run.
Laura’s mentioned a good method there, and the way I do it, something I heard years ago, is the No or Hell yes! Test. If someone asks you to do something, and the answer isn’t a massive hell yes, then it should be a no. Don’t take on anything that makes you less than excited.
Chris Marr, who you’ve heard on previous episodes, does the ‘tomorrow’ test. So, If I was asked to do this tomorrow, would I say yes? We let a lot of average or time sucking things sneak into the diary because they seem far off at the time. But then, when it actually is tomorrow, you often end up thinking, why on earth did I say I’d do this…
Ok, I know, easier said than done, and we’ve all taken on work in the early days just to pay the bills. But keep what Laura said in your mind – everything you say yes to, is saying no to something else.
Laura Lucas: For me, certainly, in my business, I have to be not worried about money, so that I can be present to solve my clients problems. If I'm at the back of my mind thinking, “Where am I going to get the next client?” I'm not actually doing a good job for them. Yeah, I actually set money goals every month and set activities around those money goals that are daily. I make sure I'm taking proactive action to make money every, single day.
That’s just it – that one action, every day, helps to ease any anxiety about money. It needs to be built into your long term plans, as well as your daily schedule. That’s what brings in more clients, more work, more sales, all of which helps you to do the work you love.
In the end, it’s a combination of everything we’ve talked about that leads to a healthy business. Long term goals which lead to clear tasks. Tools which shuffle them into productive days. Clear boundaries around when you’re on and when you’re off. Deep thought about what work you actually take on.
No one gets this right straight away, and even with years of experience, you’ll fall off the wagon from time to time. But, keep it all in mind, and you’re already ahead of 90% of the businesses out there.
This was UK Business Startup, and thanks for following on with another episode. As always, you can find a summary and everything we’ve mentioned here at podhost.me/startup. Something I’m wondering about this week – is there anyone you know who would find this show useful? If there is, it would be amazing if you could pass it on. Tell them about the show, tell them how to subscribe – I’d really appreciate it. It helps us to get the show out there to more people – help us many people as possible. Feel free to copy us into a tweet to them if you like and I’ll do my best to talk them into it too! You can get us @thepodcasthost on Twitter. This show was produced by The Podcast Host and you can check out all of our work on how to podcast at thepodcasthost.com
Next time on the show, we’re talking about Networking. How the people you meet and get to know have a huge effect on your business, and I’m talking much more than just clients. I’ll see you then!
It can be difficult because a lot of people find it hard to go into a room full of strangers and just start talking to them. But I think if it’s something that makes you nervous is just remembering that probably most people feel nervous as well.
I’m Colin Gray, and this is UK Business Startup. This week we’re getting into one of those areas of business that really splits the crowd. Some people love it, and even more hate it. But there’s little doubt that, if you do it right, it can be one of the best ways to grow your business. And, it has a bunch of benefits besides that. You might have guessed by now. Of course, we’re talking business networking.
Stefan Thomas: A lot of people think that networking is just that thing which some of us who are quite odd do at seven thirty in the morning where we meet up at formal networking events and have breakfast with other people. But networking is about every connection you make along the way.
That was Stefan Thomas – author of business networking for dummies. He’s one of the top UK experts in this area, so he knows how to get networking right. We’ll be hearing plenty from him on this episode, along with a few old friends. Talking of which, here’s Alison Colley again from Real Employement law advice on how she sees networking.
Alison Colley: When I set up my business actually going to networking and meeting people who had either set up their own businesses or who were providing the sorts of services that I needed as a business was crucial. There's no better way of building trust than at networking. Then you can tap into those resources
Chris Marr: It’s a bit cliché now but it is true that people buy from people that they know they can trust. Not only that. People refer business to people that they know they can trust as well. The only way to get known by people and for people to like you and to trust you is to build a relationship with people.
That was Chris Marr, founder of the Content Marketing Academy. He talked a lot about trust on our marketing episode, and here it is again. This ties back to what Stefan told us – it’s those connections, and the trust you build with them. Those are the people that send you clients, or might even become clients themselves. Now, at this point, you might be thinking – this just doesn’t apply to me. It’s only for b2b companies isn’t it? Well, Chris has a good way for you to figure it out.
Chris Marr: We look back over the last six months, look at where our business has come from, and we always write down two or three names. That piece of business came from that person, this business came from that person. What you start to realize actually is that people are massively involved in your business.
If people just don’t know who you are, then you're less likely to get business. We do coaching calls, especially with people who are just starting their business. One of the big things that always comes up is, well, they say to me, “We’re not getting enough business.” I immediately ask them, “How big is your network? What are you doing to actively grow your network,” and they’re just simply not doing enough to get out there and to be known by people.
So, it’s not just trust, it’s visibility, isn’t it? No matter what type of business you have, you can always be more visible. The problem is, this personal connection caper is pretty time consuming… How do you make sure you’re making that time worthwhile.
Chris Marr: I don’t mean going meeting everybody, not going to have a coffee with every single person because it can be a massive time suck. What you need to be good at is qualifying people that you want to connect with, people who have influence, people who clearly are good at introducing people to other people, and people who have quite big networks are the people you're looking to spend time with.
What you're not trying to do, and I guess this kind of like the next question is, is not just about spending time with people that could be potential customers, because that’s sort of like thinking quite small. You’ve got to think quite big. You actually want to meet people that have bigger influence. They may never ever buy from you, but they might be … They will probably introduce you to other people, they will probably recommend your services to other people.
It’s well put – you might well find some direct clients through networking, but the big wins are in the wider viral effect. You get to know 10 people in a networking group, and suddenly you’re the ‘roof repair guy’ not only for them, but their entire network. When their friend says, Man my roof just fell in, who do you think they’re going to tell them about?
So, that makes sense – looks like the time’s well worth it, as long as you’re smart about how you spend it. Remember too that time’s just another kind of currency. Here’s how Stefan sees it.
Stefan Thomas: I treat my networking as part of my marketing spend. That’s an investment to my business because I know that an awful lot of the big opportunities that I've got coming up in the coming year and that I've had in the last couple of years have come from a little conversation at a networking event, and if I go to networking events, conferences, seminars, whatever it happens to be, then I’m more likely to start more of those conversations which lead to big opportunities.
So, Stefan knows it’s worthwhile for him. He’s tracking those opportunities and where they lead. But, then, Stefan’s a pro. What about mere mortals like us? Here’s Julie Christie from Tea Break Tog:
Julie Christie: I didn’t do anything like that for about three years, and then when I did that everything changed. Pretty much over the course of a couple of months I realized that everything was changing because of the people that I was meeting in this group, just expanding my network, but also encouraging me to think about my business differently. People who were having successes in different areas from me I was able to question them and learn from them and vice-versa.
So, this is interesting. She’s pretty clear that her network brings big direct benefits. But, she’s also starting to delve into the other upside. Because we know that, for all the things we love about running a business, it’s not all shiny rainbows.
Other Benefits
Laura Lucas: I was a bit worried I might be lonely when I first started my business working for myself, but because of the networking I've done I’ve meet amazing people actually. People who I feel are much more likeminded and much more attuned to the sort of ambitions I’ve got and where I want my life to go than maybe people who I would happen to work alongside. I always enjoyed going into work and having good relationships with my colleagues and so on, but I feel like there’s something that people who have their own business have in common. They’ve got that vision and that ambition. It’s just great to be around those sort of people.
It’s actually about developing those relationships to see how we can help each other and how we can collaborate and who we can introduce each other to. Is a huge, huge benefit of having a business that I hadn’t expected.
Julie Christie: Every week you're with these people who are passionate about their businesses and we’re all talking about our business and how we can move it forward. But because you're meeting them the next week you're really motivated to go back and work on those things that you’ve been talking about. I’ve meet some amazing people through that, and doing that it has changed the direction of my business and improved my business and made me think with a lot more clarity about what I’m doing and why I’m doing it. For me it’s been absolutely huge, huge part of growing my business.
Stefan Thomas: But also in business I think that networking helps you to build the structure, to build the support structure around you, and a network of supportive people which to my mind is just as important to sales.
There’s no doubt that running a business can be a pretty lonely, isolating job. If you’re working yourself, who do you turn to for help, for support, for some simple feedback on something? Well, for Laura, Julie and Stefan, it’s their network. As they all said there, they’ve met people through networking, built relationships, found support, and they’ve really grown their business as a result.
Alright, I’m hoping you’re at least a bit convinced, but there’s a good chance you’ve still got a few reservations. Networking does carry a lot of baggage…. I got a sign of this when I asked Pete Matthew if he sees any value in networking:
Hating Networking
Pete Matthew: Absolutely, though it can drive fear into the hearts of a lot of people. I’m a natural introvert. If I go to a party, you will usually find me in the corner on my cell phone. But I've taught myself to be better, because it’s important to have relationships. It’s amazing where relationships can go.
I even found out that Stefan, our networking Guru, took a while to find his feet.
Stefan Thomas: Not only have I covered it hundreds of times but of course I’ve been there myself. This wasn’t something that I was born to do. My very first networking event I really did stand awkwardly in the corner. That was sometime in 2005. There’s an awful lot that I’ve learned since then.
It’s definitely makes me feel better knowing that I’m not the only one who feels like a lemon every time I walk into an event like this. I always find myself making a meal over pouring a coffee. It’s my way of delaying that moment when I have to turn around and try not to look panicked, hoping someone will come over and talk to me. The thing is, it’s natural to feel like that, but it’s always fine.
Laura Lucas: If you're not sure if it’s for you or not go and find out basically. It can be difficult because a lot of people find it hard to go into a room full of strangers and just start talking to them. But I think if it’s something that makes you nervous is just remembering that probably most people feel nervous as well.
You’ve got something in common with everyone and just really being open to having those conversations. You’ll hopefully find, I know I've certainly found that networking events I’ve gone to are very open and welcoming and people are interested to hear about you and they’re keen to tell you about them. It’s not as hard as you might think it is.
Ok, we’ll get over the fear and give it a try. First step, I suppose, is finding a group:
How to Network
Stefan Thomas: The very first thing that I would do would be to google networking events in your town, wherever your town happens to be. Look for the local chamber of commerce. They are very likely to have some sort of networking event there. It’s pretty likely in most towns in the UK that you will also have networking organizations such as 4Networking of which I’m a member and BNI and other networking organizations that exist. Thanks Stefan – simple enough. So, once we’re there, how do we get over the fear and make that first introduction?
People I think look for some clever answer as to how to start a conversation with someone, and what I have found works best is to go for the lowest common denominator. If you’ve grabbed a cup of coffee, it’s very likely that there are other people grabbing coffee at the same time. Talk about coffee, talk about parking, talk about the fact that everyone got caught in traffic this morning. You're in that enviable position working event, or conference, or seminar, that you immediately have something in common with everyone in the room. An awful lot of my early sales training was about finding that thing that you have in common with someone so that you can start talking to them on common grounds.
My usual one is just to catch someone’s eye at the coffee table as say, ‘Hey, how’s your day been?’. It’s simple, easy and usually gets people talking about something they’re interested in. It also tends to give me a clue on whether it’s sometone I can get on with too, because if they just start moaning about their day, then they’re obviously not the most positive of people.
Laura Lucas: One thing that helps me on those times when I do feel a bit self-conscious is just to try and find someone that looks more nervous than me and help them feel better. That can be a really effective way of actually forgetting about your own hang-ups. If you make the conversation about the other person you're much more likely to have an impact. Sometimes we’ll go in and we’ll feel like we’re supposed to have this perfect elevator pitch and you should go in, say the elevator pitch and walk out with a client. Well that’s not really the purpose of it. It’s just begin to know people and it’s really about just looking for things that you’ve got in common.
Chris Marr: Be the person that introduces yourself to other people. Don’t go sell. Don’t sell to people. Just go and meet people. Make friends with people. That’s what I always use to say when I go to event, is like who can I make friends with today. That’s one of the best things you can do because people hate being sold to, and they can see a mile off, they can see you gearing up to hand your business card over and people hate it. They just absolutely hate it. The best thing to do is to almost forget that you are selling anything at all and just try and meet people and make friends with people.
Laura and Chris are spot on here, for me. You can always spot the serial networkers – those folk that see it as nothing more than a chance to push out as many business cards as they can. I really don’t know how they can’t see what a turn-off that is. They’re not building any kind of relationships, and that’s where the value lies.
Now you might remember Andy Brown from Triple Your Clients. He takes it a step further – he doesn’t just think about building relationships – he gives even more value to one of his business groups.
Andy Brown: I’m on the committee there and also on the committee of the St Andrews merchant association, even though I’m not actually a merchant, I don’t have a shop or anything in St Andrews. I joined the committee because I’m all about being useful and giving value, particularly in the local area.
It’s not a me, me, me situation. It’s just I think you do get a lot of benefits from just giving. You’ve got to be mindful of your own time, but I say that I've got these skills related to the internet. I can probably help even though you’ve got a presence on the High Street. I can help for instance the association. Then with the business club we have a website. I update that. Just by definition that I’m updating that I get in contact with all the people that come and speak at the business club.
So, part of Andy’s networking is doing just a little bit of work for the clubs – stuff that he finds pretty easy – but it helps grow that trust, that reputation, that makes him more prominent in the network.
It’s all about giving, really. What’s the cliché – you get what you give. Stefan sums it up well:
How to Talk to People
Stefan Thomas: The way that I treat any networking event is to ask a lot of questions, to find out a lot about the other people in the room, and to get to know them. I very rarely try and push my services on people at networking events.
Right, we’ve been along to an event, we’ve beaten the fear, and we’ve made some friends. But what we do we do next? What happens after that first conversation?
Next Steps
Stefan Thomas: If you think about this for a second, when you I and finish this conversation a number of things will happen. You’ve got your next appointment to get to, you’ve got your client you’ve missed a called from, and those little conversations that you have at the event start to slip out of your memory. Now the same happens to everyone else in the room, so it’s your job to continue to remind them that you exist. It’s not their job to continue to remember you.
Chris Marr: Bring the business cards home with you. Ping them on email. Just say, “Hey it was great to meet you today, and I’m looking forward to catching up with you sometime in the future,” and then stay in touch. That’s the big thing.
Stefan Thomas: There are two things that I talk about a lot in terms of follow up: active follow up. That’s when someone said, “Stephen, I’m really interested in what you do.” In that case I make a point to actively follow up, to phone them the next day and say, “Really like that you're interested in what I do. Can we talk about it more?” Passive follow up, passive follow up is I think when most people lose because actually keeping gently in touch with people over weeks, months, and in my case sometimes even years, that’s the thing that has often led to the hidden opportunities, the opportunities that I would never have spotted that come out of the woodwork a few months or even years later.
I know myself how easy it is to miss this out. We talked earlier about making sure it’s worth the time you invest. Well, the problem is, without the followup, it doesn’t really matter how well you do in person, nothing’s gonna come of it. You need to get yourself a system – Chris mentioned the business cards there – put them somewhere you’ll always find them. When you get back to the office, put it in your process that you always look in this place after an event. And you always do it right away. Like Stefan says, this stuff fades from your memory really quickly.
Stefan Thomas: With all of the tools that we have in 2015, Twitter, Facebook, LinkedIn, email, the telephone, all of these ways of keeping in touch with people, and yet there’s a staggering statistic that 87% of people never follow up after networking meetings. If you just do that, if you just make an effort to keep in touch with people in a very gentle non-sales-y way, then you're immediately putting yourself ahead of the competition.
A trick I often use is just to write a few words on the business card. Just something that’ll remind you who this person is, what you might have in common, what’s worth following up on. Having those little nuggets in the follow up contact really separates from the rest, as Stefan said. And if nothing else, it reminds you who the card belonged to. I’ve found many a card, weeks later, and had no clue where I got it!
Now, Stefan mentioned a bunch of mediums there, so it’s worth digging into that a bit. Email, for me, is still the first stop. I’ll do that for the main followup. But, social media can be a great addition.
Social Media
Stefan Thomas: I also treat all of my social media activity as networking as well, because all the way along I'm either making new connections or I'm strengthening my existing connections. Pretty much everything that we do in our day-to-day business is networking.
So for Stefan, actually, social media can support his existing connections, and it can be a first contact for others. You’ll remember Patricia McGuire from Purple select – she had a few thoughts on social networking.
Patricia McGuire: Sometimes when I look at the way my staff network I think really they spend too much time on social networks and the online platforms doing this. To be honest with you they’re really, really valuable. Again, you need to think where are the people you need to talk to, what platforms are they on, and start building relationships with them.
If you're using online platforms, so if you're using Twitter or Facebook or whatever, it’s not enough to be on those platforms. You need to interact with people, offer advice, tell people when they’ve given you some advice that’s really worked, just interact like you would do in a normal everyday life and you will find that that works very well and business will start being referred to. But I still believe that you cannot beat face-to-face relationships.
So, for Patricia – you can build a network online, as you’d expect. But it doesn’t replace face to face. I’d say it’s a valuable part of your networking, not the whole.
Laura Lucas: If you're into offline networking I think online networking can really enhance that, because I’ll give you a great example actually. A great friend of mine is Kate McQuillan who has Pet Sitters Ireland. She’s a really keen blogger. I met her briefly at the Content Marketing Academy Conference in 2014, so I met her once. We meet. She talked to the conference and I was very impressed with what she’d achieved through blogging. We didn’t really get much of a chance to speak to each other, but I really got to know her in the Content Marketing Academy Facebook group. Then I really got to know her personally on Facebook, just from like chatting and interacting, and it’s developed into a full bloomed friendship now. She’s as much my friend as anyone that I've known since school days or anything like that. She’s business friend and she’s a personal friend as well.
I love that story in that it shows the value of putting long term effort into your network. It’s not just those one-off meetings, and it’s not even just that follow-up, right after it happens. It’s beyond that, making sure that you’re building relationships long term – not just for your own benefit, but really creating a partnership with everyone in your network.
Stefan Thomas: The process doesn’t stop. In 2015 when you and I are talking it is so easy to keep in touch with people, and it’s the biggest mistake that most people make is not to keep in touch with people.
Laura Lucas: I think sometimes when it’s business networking we can think it’s all about business but it’s actually all about just building a relationship. It doesn’t matter what you build that relationship on. I think just take the pressure off yourself and enjoy getting to know people really.
Pete Matthew: Find half a dozen people who are like you, small business owners like you but maybe in different markets and just help each other. You’ll be surprised where that will end up.
This is Colin Gray on UK Business startup, hoping that I’ve given you the motivation you need to get out there and start building your own network. I promise you, it’ll end up being one of the most valuable assets in your business.
Now, we’re nearly at the end of the season. We’ll be tying it up next week with some key takeaways from the series, and giving you an insight into what’s coming next. We’re also going to be running a little competition leading up to the launch of season 2, so do make sure you tune in next time around.
Also, a wee request, in the spirit of this episode, I’d love to ask you for a little referral of your own. I hope we’ve helped you figure out some of this crazy journey we can business, and if you feel like that’s built a bit of trust, then I’m proud to call you part of my network. If that’s the case then could you do one small thing. Have a think about one person you know that might like this show. Fire up your email and send them the link, copying us in if you think it’d help – we’re on info@thepodcasthost.com. It’d mean a huge amount to me, and it’ll help us to get this out to more people, hopefully helping as many folk as we can in the long run.
Ok, that’s it for this week – this show is created by The Podcast Host, produced by Matthew McLean, written and narrated by me, Colin Gray, and we’re a part of the 3B Podcast Network – that stands for British Business Broadcasting. You can check out the other shows on the network at 3bpn.com.
Thanks and we’ll see you next time.
Thanks for listening, and we'll see you again in season 2!
