What exactly do we mean by this?

And what are the things that only a small minority of business owners think about and do which makes them more entrepreneurial and, ultimately, more likely to succeed?

A good example of what we mean by this can be illustrated if you were to ask a broad cross section of business owners what they (or their business) actually does – and it is with a reasonable degree of confidence that their answer will be along the following lines:

- We make cakes – (or furniture, toys, beer etc).

- We supply insurance – (or holiday packages, courier services etc).

- We provide a cleaning service – (or a gardening or security service etc).

Typically, their answers will always include the words ‘we make’ or ‘we supply’.

These responses are all based around what these business owners ‘do’ in terms of what they produce and provide, and do not reflect why they are really in business, or the more important things they ‘make’ in their business.

Similarly, many business owners are increasingly running social enterprises these days, often as Community Interest Companies, or even charities. If these business owners were asked the same question their typical answers might be:

- We make compost using recycled waste.

- We provide shelter for the homeless.

- We supply second-hand clothing.

Again, their answers will reflect what they make, supply and do and, not unreasonably, who they do it for.

But the main problem with these typical answers is that they miss the point – several points in fact – about what every business owner needs to ‘do’ in their business, and one very important point in particular.

For example, in your business – or anyone’s business for that matter – the following is a list of things that you should be able to say that you make in your business and which does not describe the actual product or service you supply, or the community benefit you provide, such as:

- We make sales of our products/services.

- We make continual improvements to products/services.

- We make customers happy.

- We make our rivals jealous.

- We make breakthroughs as often as possible.

- We make mistakes and learn from them.

- We make rules and then break them.

- We make customer service and experience our priority.

- We make it easy to buy from us.

- We make it obvious what we supply.

- We make things at prices customers can afford.

- We make our tax returns on time.

- We make it easy for customers to complain and provide feedback.

- We make it difficult to steal from us.

- We make our finances transparent.

- We make a return for our investors or shareholders.

- We make sure that we trade within the law.

This important list of things business owners need to make could of course be much longer, but there is one point missing which is much more important than all of the other points put together. And it is the one absolutely vital thing that every business owner must make their priority.

They need to make money.

And they not only need to make enough money to cover their overheads and operating costs, but enough surplus money to continue trading, build their business, pay their taxes, make a return to stakeholders and, crucially, make a satisfactory personal return from it.

Otherwise what’s the point?

You can have happy customers, happy staff and stakeholders, happy trustees and community beneficiaries, and happy external investors. And yes, you can save your local community and save parts of the planet from destruction, if that’s what floats your boat – but you won’t be saving anything for very long if you aren’t making money.

To compound the matter, too many new business owners start out believing there is an endless amount of money that their business will be able to make – whereas the most successful business owners think of and find an endless number of ways to earn it.

And those who earn the most are the ones who clearly focus on the list of things their business needs to make, such as in the list above – with making money right at the top of their list.

Because, after all, that is the whole point of being in business.

To comment on this article you can do so below.

Plans. Planning. Business Plans. What exactly do these terms this mean to you? Everyone you talk to and everything you read about starting up and running a business seems to say more or less the same thing.

“You need to write a business plan,” your adviser, accountant, bank manager, mentor or business guru is likely to tell you.

OK, it’s certainly true you will need a plan at some time or other, and yes, you will need to write one in order to have one, and even better, you can get plenty of advice and find a great many guides to writing one in the blogosphere and elsewhere online.

But that’s not exactly what you need to hear, that you need to write a business plan to start up or run your business. This just doesn’t mean anything. It’s too vague, meaningless, unfocused.

What you actually need is a business plan, (or a marketing plan, investment plan, exit plan etc), that you can use for a purpose. A plan should help or enable you to do something with or in your enterprise that will achieve one or more very specific business goals or objectives.

And this is the key. Ask yourself initially, why exactly do you need a plan? What’s it for? Precisely what are you trying to do and, most importantly, how are you going to do it and make sure that it happens?

Then you can think about writing it down and start planning to achieve something.

However, the problem in most situations is with the word ‘plan’ itself. Too much of the advice you will get puts the emphasis of your plan on the ‘thing’ – the actual document – rather than on the act of planning, thinking and plotting, which is more about what you are going to ‘do’ with your business, or achieve in your market.

Planning is about recognising where you are now, identifying where you want to get to and what you want to achieve, and… the crunch part… how you’re going to do it. Planning is about doing things and specifying, illustrating or clarifying details about how you will achieve certain targets and objectives.

And it’s a fact that business owners who plan will, far more often than not, be more successful than those who don’t, because of the level of discipline they end up introducing and applying to their business.

Whatever your reason for writing a plan, or planning your future business activities, you might find it interesting and revealing to look at some other words and terms that relate to the meaning of ‘plan’. This can help you focus your ideas, thinking and approach to planning the start or next stage of your enterprise.

A plan can mean many things and could be any (or all) of the following:

- an aim
- a plot
- an ambition or wish
- a direction or way
- a purpose
- a course
- an outline
- a blueprint
- an intention
- a picture
- a system
- a proposal
- a prospectus
- a view
- a project
- a design
- a process

Get the drift? Look at these different terms, which mean the same as plan or are a part of planning, and use the ones that best fit what you are trying to do and will help you communicate your plan to your intended audience.

Whether it’s to persuade someone to invest in you, to lend you money, to launch a new product, to build an online store, to exit your business, to paddle across the Atlantic in a bathtub or whatever, your plan should articulate not just what, but more importantly when, why, where and how you are going to achieve your objectives.

By following these few simple rules you will hopefully be more focused on your real objectives – shifting products, increasing orders, growing sales and making profits – than on how much time you are going to spend putting your pen to paper.

To comment on this article you can do so below.

The following are examples of typical business distractions and mistakes we’ve observed and witnessed in business start ups and fledgling enterprises over many years.

1. Spending too long on your business plan

Yes, we’re back with this one again. In previous issues of EnterQuest, we’ve advocated that you should aim to condense your business ideas into a four-page plan describing your market opportunity, how you will reach and earn from it, your sales forecasts and targets, and the resources you will need to achieve them.

You should have a plan for sure, and be working to it, but don’t fall into the trap of spending weeks, or even months, procrastinating over unnecessary details to go into a 40- or 50-page prospectus. Get it clear in four pages and then get on with it. Your plan and the finer details will emerge and evolve as you begin trading and learning from your successes and mistakes over the coming months.

2. Overspending

A classic business killer. Over-enthusiastic new business owners burning up all their cash in the first few months before sales revenues ever get a chance to come in. Don’t let this happen to you. You should be spending only when you need to, and only on what you really need, until your revenue stream is established.

Remember that cash is the lifeblood of your business, and that it’s cash which keeps your business alive. Whether you manage to survive in business will be down to how much cash you make and how much of it you hang on to. Manage your cash (and cash flow) very carefully. The business world is unforgiving and merciless if you don’t.

3. Being too slow

Market and business opportunities don’t bang on your door very often, in fact, in most cases you’ve got to get out and hunt them down yourself. But too many new business owners operate at such a pedestrian pace that new opportunities have gone or been snapped up by their rivals before they even get a sniff.

So when a good business opportunity comes along, grab it with both hands and exploit it before anyone else competing in your market realises. Or, if it doesn’t taste right, don’t waste your time – just spit it out quickly and move on – because another opportunity could be just around the corner and may be the one that’s perfect for your business.

4. Not aiming at the target

The well-worn phrase “he who aims at nothing is sure to hit it” is something that sadly applies to too many new business owners. ‘Spraying and praying’ at nobody in particular is not a viable marketing strategy for any business.

Those business owners who get themselves off to a flying start have generally got their resources lined up and aiming at the most immediate and profitable cash-generating business opportunity they can see. Your four-page business plan should be telling you exactly where your immediate cash-generating opportunity exists, and you should be aiming your business precisely at it.

5. Talking to the wrong ‘experts’

Regular readers of EnterQuest will be aware that this is our favourite subject. The ‘experts’ we refer to are associated with the school of business excellence that currently broadcasts there is “a business in everyone”. They will tell you to concentrate on your business plan to justify you going into debt, or will shower you with crap about what else they can ‘supply’ you with – usually their own books, toolkits, masterclass or meaningless awards – and that you can start a business in less than 24 hours, or that the best day of the week to start up is a Tuesday.

There’s only one expert that matters in your business. And that is you. You alone have to call the shots, aim your resources at where you believe there is a market, and stand or fall by your decisions. Get advice whenever you can, and work out who’s talking crap and who isn’t. Then it’s down to you to make the choices based on the research that you have personally done and, of course, what your instinct tells you.

6. Not finding more customers

So here you are. You’ve spotted on opportunity before everyone else, you’ve found some customers and worked out how to sell to them. You’ve got a tidy little plan that’s working well for you, your cash position is increasingly positive and you’ve avoided any burdensome debt. Well done, you’ve survived the first six months, deserve a pat on the back and can breathe a huge sigh of relief.

But can you?

Absolutely not, because now it’s time to get out and find even more prospects and customers to sell to. Complacency has no part in any small business, otherwise your competitors will not just be breathing down your neck, they’ll be racing right past you.

Of course, as ever, these are just a few examples of the typical mistakes and distractions you might experience and the lessons you will learn in the early stages of your business. But, crucially, these lessons will not only help you survive, they will also help you gain that inestimable black belt in entrepreneurship.

To comment on this article you can do so below.

Against such a grim, and in some ways contradictory backdrop, recent figures continue to indicate that record numbers of people are starting up in business or entering self employment. It seems certain that prevailing economic conditions have had a bearing on this – for example, tens of thousands of professionals and public sector workers who have been made redundant are grasping the opportunity (or have no other choice) to become self employed, or to freelance and trade in an area of business that interests or appeals to them.

But is this a good time to start up in business – in the midst of the worst economic downturn for almost a century, and with so much uncertainty?

Despite there being strong yes/no arguments on both sides of the debate, seasoned enterprise practitioners would say there is no such thing as a good time or bad time for a start up, especially if certain basic factors are considered and good practice is followed. For each individual concerned – and for their particular business idea – any time can be the right time to start up no matter how gloomy or hopeful the economic forecast.

Here are some typical factors that are consistent contributors to it being the right time to start up in business.

1) When you have, without any question, found an untapped or under-exploited market gap and are focused on meeting and delivering what it needs.

2) When you can confidently say to yourself that you are capable of every new business’ number one priority – selling and marketing – and know exactly how you are going to reach and sell to your chosen audience.

3) When you have researched everything that needs to be researched about the sector you’re entering, including your competitors, whether your prices are right, whether you’re compliant with all regulations, and when you have uncovered all the hidden costs involved in getting started.

4) When you have sufficient start up and working capital in place to get up and running, and ideally when this hasn’t been borrowed from the bank, which could result in the repayments choking you to death within six months.

5) When you have run a market test to confirm that your target audience is genuinely willing to pay an acceptable price for your product or service.

6) When you are completely sure that you are focused on, and happy with, the quality of the service you are going to offer to your customers – and, of course, that your customers are happy with this as well.

7) When you can honestly say that your new business venture involves something that you’re not only good at and enjoy doing, but is also something you can excel at and build a reputation around.

8) When you have a thorough grasp of cashflow and the financial management aspects of running a business or, failing that, you have a business partner or accountant/adviser who does.

Of course there are several other personal, commercial and competitive factors that come into play in a right time/wrong time argument. But these are never going to be as important or relevant as the factors that really matter, and which make it clear when the time is right to start up.

To summarise and conclude this debate, for the majority of business start ups in their first trading year, the likelihood of success or failure will invariably be determined by four over-arching principles. And, in some ways, this is easier to illustrate by highlighting when it is the wrong time for a particular business to start up and where failure is almost inevitable.

It is almost certain to be the wrong time to start up in business:

- When there is no grasp or understanding of marketing and selling.

- When there is no grasp of cashflow and principles of business finance.

- When there is an inability to manage statutory business admin (especially tax and finance).

- When there has been insufficient (or inappropriate) advice and support from external practitioners.

It can reasonably be argued that any one of these will limit chances of first-year survival, but two or three in combination will signal, as clear as a bell, that it is definitely not the right time to start up.

To comment on this article you can do so below.

But nothing could be further from the truth.

In fact, in several ways small firms are inherently more competitive than their larger counterparts and have many qualities and advantages that big businesses often copy to improve their own performance.

Here are five examples of the qualities and reasons why smaller firms can compete with much larger ones.

1) Small businesses are so much closer to their customers. In fact, the proprietor of a small business will very often meet and speak directly to customers every day. In large firms the owners, senior management and decision makers often don’t get exposure to the coal face of their market at all. The advantage to the small firm is they can get immediate, direct feedback and have the ‘nose’ to be much more oriented to changes in customers’ needs and interests, and spot new business opportunities at the earliest possible stage.

2) Small firms are more responsive and can change things in their business operation and processes much quicker than larger businesses. This is mainly down to size, scale and speed of decision making. So in this respect small firms usually find it easier to innovate or introduce something new at very short notice.

3) Small businesses can be more fanatical and radical about their business and products. No matter how many times they can’t quite get it right, small business owners, in general, are more obsessive and never give up in their attempts to improve their existing services, or make new developments or projects a success. Bigger firms on the other hand are usually more hamstrung by corporate policy and guidelines which hamper their ability to do anything too radical or too quickly.

4) Small businesses can keep their costs lower. They usually don’t have any choice, and their survival depends on it. They haven’t got the overheads of their larger counterparts, and as a result the cost of innovating or developing something new doesn’t have to be a competitive barrier.

5) Smaller firms are more adaptable. They can turn orders around fast, they can try several ideas at once, and they can have more informal business plans which allow them to react and adapt to market or customer needs almost at will.

In essence, it’s sometimes easier for the smaller firm to concentrate on quality and service, maintain their individuality, and gain an advantage by simply trying to be more responsive than everyone else. And, more importantly, their customers will notice and appreciate it.

It’s worth remembering the old business maxim that both consumers and trade customers prefer to buy the product or service that most closely meets their needs, not just the cheapest on offer. So even though small firms may not be able to beat their larger competitors on price, they can certainly try to beat them on quality, reliability, flexibility and individual flair.

Here are a few non-price factors that typically affect the decision making process of purchasers.

• Product or service superiority – prospective buyers will compare quality standards and performance levels between similar offerings.
• Specification – buyers will judge how close it is to meeting their exact needs.
• Convenience – of ordering, delivery, payment terms and so on will be noticed and appreciated.
• Customer service – before, during and after the sale is often the Achilles’ heel of larger firms.

All of these ‘quality’ factors come into play in a purchaser’s mind, and they’re all factors that a small business can do something about in a competitive marketplace.

So yes, small firms can compete very effectively indeed, and fear of larger firms should certainly not put aspiring small business owners off starting their own venture. Indeed, many large companies study small businesses very closely and will often go out of their way to emulate their methods (and madness), and also their successes.

To comment on this article you can do so below.

To demonstrate this importance and understanding of the sector, Business Secretary Vince Cable has this week announced the appointment of two (yes, two) entrepreneurs-in-residence at the Department for Business (BIS), who will advise on small business issues. One of these is a start up cake maker and the other is 178th on the Sunday Times Rich List from a background in the construction, care homes and chemical industries.

So there we are – all sorted. BIS has our sector well and truly covered.

However, something equally important that should also never be understated – yet unfortunately always will be – are the facts about small business failure and survival rates, the reasons that determine them, and the ultra-fine line that lies between them.

Here’s a quick reminder of the facts.

- 50% of start ups fail within 12 months, with 90% no longer trading after five years.

- 10% close involuntarily due to insolvency or bankruptcy.

- 90% cease trading voluntarily because the business is too weak, or not providing a satisfactory income or return for the owners.

Other studies have estimated that, during their formative couple of years, around 40% of small firms manage to trade profitably, around 30% trade at break even and 30% trade while making continual losses.

What is overlooked and unappreciated are certain facts about those trading at break even. In particular, it needs to be recognised that for a small/micro-business to trade at break even (where income during a period is equal to expenditure) expenditure should, but does not always, include the owner or proprietor paying themselves.

The understated fact is that when it comes to a point during a financial period when a big supplier bill has to be paid, a lease for new equipment is needed, or staff wages and VAT payments are due – for many business owners, the only way that break even can be achieved is by not paying themselves.

In other words, of those small firms that supposedly break even, this is too often achieved through a false statement of costs where the owner/proprietor has no other option than to go unpaid, or to pay themselves considerably less than they would like, in order for the business to stay solvent and afloat.

This is the dirty, unspoken reality and one of the biggest issues faced by new start ups and early-stage business owners.

They have to forget about that delusionary living wage when faced with decisions about when or whether they can begin paying themselves – if at all – during the first months or possibly the entire first year of trading. For many, they will have invested their entire savings, begged and borrowed from family and friends, and grafted night and day without any personal financial return to ensure they keep things square with their landlord, suppliers and staff.

Unfortunately, this is one of the triggers where a small business begins to experience trouble that can eventually become terminal.

Should the owners pay themselves, but at the expense of being late with paying their supplier bills? Or should they delay when they pay staff to stem negative cash flow – maybe even get rid of one or two faces – but then have twice the work to do themselves?

Or should they carry on at break even with little or no return for themselves, and at risk of not putting food on the table and paying their own household bills?

This is one of the major reasons why the failure rate is so high, and also why so many proprietors cease trading voluntarily. Their business is too weak and unable to trade profitably – but, more significantly, it is unable to provide them with a satisfactory wage or other form of financial return.

But where and why does it go wrong, and what are the common factors that contribute to failure, lack of success and lack of a return?

In general, the answer also lies squarely with the proprietors, who have made the wrong business decisions right from start up, and whose business ineptitude continues once they are up and running, such as:

- Starting up for the wrong reasons
- Lack of planning
- Not anticipating the time and resources needed
- Poor market understanding
- General incompetence
- Not understanding cashflow
- Lack of business or industry experience
- Ignoring competitive threats
- Being in the wrong location
- Lack of entrepreneurial ability
- Personal burn out
- And, most crucially, poor financial awareness.

Each reason for failure can typically be categorised as proprietors not recognising the need to adapt themselves and their business to their market environment. While those that succeed – in other words, those who break even while paying themselves an adequate return – have recognised the need to continually adapt to their market.

In terms of supporting small and micro-business owners at start up and early stage, what they are told they need by BIS and what they actually need are entirely different things.

They don’t need access to finance, they need the ability to understand it.

They don’t need encouragement to ‘go for it’, they need to recognise the importance of preparation and only starting up when ready.

They don’t need mentors, they need to recognise their own shortcomings and seek appropriate advice/support to deal with it.

They don’t need to find a ‘business in them’, they need to find and understand a market gap or niche they can fill.

BIS and policy makers, however, do not recognise any of this. They believe that adapting the environment to meet the needs of business is the route to economic success, for example through regulation, subsidies, incentives, sector protection and other supply-driven intervention. That has been and always will be the case, unless something radical happens in Whitehall.

In that respect, it will be fascinating to see whether the two entrepreneurs-in-residence are able to recognise and explain these real world issues to Mr Cable and his department.

And also to see whether there are any signs of this sinking in.

To comment on this article you can do so below.

The smartest and most solvent of people, the hardest workers, those with the brightest ideas, and those who are quickest to get a new product on the market go bust just as easily, and quite often more easily, than anyone else.

They can’t understand how their business brilliance and dazzling ideas have failed when the laziest, uneducated bummers on a shoestring budget they were competing against have managed to survive.

No, the business world just isn’t fair at all. And why should it be? There are always winners and there are always losers.

So what are the mystery factors that set successful small businesses apart, and which the losers fail to grasp? Clearly there will be a complicated set of factors in any given situation, but the following is a list of qualities that are more likely to be found in small business owners who win more than in those that screw up and lose.

1) They look behind themselves for opportunities

The problem with spotting business opportunities is that most people just don’t know where to look. It’s too easy to only look at what’s under your nose for an opportunity, or to assume that one will eventually appear around the next corner. Business owners who find and exploit the most opportunities recognise that one of the best places to find them is where you’ve already been. Looking behind you at things you’ve already explored and considered will often reveal things you didn’t spot before. And in any event, keeping an eye in the back of your head will also help you to spot your competitors creeping up on you. There may be opportunities as a result of that, too.

2) They run their business to avoid going broke

People who survive in business recognise that there is no automatic guarantee of success and they know exactly when their cash will run out if orders unexpectedly dry up. The best way to look at this is by starting every day in business as if it might be your last, because the fact is, it actually could be. This requires a twist in the way you think about your business: you should permanently view things in terms of avoiding going bust as the way to ensure you will survive. Work out where your danger line is and work your backside off to keep above it.

3) They tell the truth

As there is a general lack of differentiation and frequently poor quality on offer in most business sectors, this provides another opportunity that winners can exploit. But this isn’t about offering something that’s better than the general crap already out there. This is about making sure that whatever you offer, your customers will believe you. In other words, whatever you promise your customers, make sure you back it up with substance and delivery. Don’t pretend you’re better than you are and don’t pretend that something is easy when it’s difficult. If you kid your customers they will quickly stop believing you and you will be kidding yourself about how long you remain in business.

4) They keep things simple and easy

This is just plain common sense again, but it isn’t common to most small business owners. This is about having simple business processes, simple marketing messages, simple pricing and simple customer promises that can be delivered. Everything kept simple, along with easy ordering, easy-to-understand instructions, easy-to-contact customer service, easy to return, easy to find and, most importantly, easy to do business with.

5) They are incurably inquisitive about their business

This is about pursuing a continual urge to find something new or something more about the needs of your customers, looking for an unfilled market gap, an inefficiency, or a business edge that doesn’t exist yet. In other words, finding or creating some added value (it doesn’t have to be much) that nobody else is offering and, of course, finding a way that you can deliver it before anyone else. Being successful at this is easier said than done and by far one of the rarest attributes to be found among business owners.

6) They minimise the risk of forgetting things

Relying on your memory is like relying completely on somebody else – in other words, it’s something you would be daft to do. Carry a notebook (paper or digital) everywhere you go and write down your thoughts and ideas as soon as you can, especially during or just after business meetings. Go back through your notes every week or two and you’ll be amazed at how much you have forgotten to do or what you originally thought about, agreed or conceived. Highlight the stuff that sticks out and act upon it.

7) They continually read and learn about business

You no longer have to read whole business books and manuals or sign up to an MBA to learn more about running a business. There are hundreds of free business newsletters you can subscribe to, free ‘how-to’ e-books, online tutorials, extracts from business gurus’ private files, professional networks, discussion groups on LinkedIn and so on. Sign up to and join the ones that appeal to you and you will soon build up a valuable personal coaching resource that you can access via e-mail and online.

8) They improve their business vocabulary

Improving your vocabulary is one of the easiest and most valuable personal development habits you can pick up. If you can learn a minimum of one new word or term each week, you will improve your ability to describe and articulate your ideas and business proposals and your ability to sell them to prospects, customers, investors and partners in the process. And this doesn’t just apply to business owners with minimal or no academic qualifications. In many ways, it applies even more to those with graduate and professional qualifications who are only capable of talking the type of psycho-babble that nobody else understands.

9) They screw up less than everybody else

Avoiding failure, and failing the least number of times both on strategy stuff and critical day-to-day business tasks, goes hand in hand with maximising potential for survival and success. There’s nothing wrong with screwing up occasionally, as you’ll learn just as much from this (if not more) as from your successes. But if you, your partners, suppliers or staff get it wrong more times than you get it right you will quickly slip down the survival league table and face the drop into the enterprise graveyard.

In a nutshell, survival, success and avoiding failure is about continually seeking to improve yourself and your business operation. Never stop and never ease back on this. You’ll reach a point many times in your small business career where you think you know it all, only to quickly fall back down to earth with a bump. The improvement to your business know-how and commercial acumen is something that is very difficult to measure or put a value on in a balance sheet, but is part and parcel of gaining that elusive and invaluable black-belt in entrepreneurship.

To comment on this article you can do so below.

With the plethora of employment regulations and associated responsibilities and requirements placed on the business owner, it can often feel as though the balance of the employer/employee relationship is weighted heavily in favour of the employee.

But while it’s true that an employer’s responsibilities are manyfold, is this actually the case?

Let’s use the following scenario as an example of a typical ‘employee situation’ you might easily be faced with.

You’re the owner of a small, but very busy restaurant and an employer of three people (other than yourself), one of whom is currently off sick with flu. Out of the blue, one of your other employees announces that she’s seen an incredible late deal for a family holiday on lastminute.com and asks you for a week off work starting from the day after tomorrow. And like many other small business employers you do not have a formal policy on notice to request leave written down and agreed with your staff.

Now then, you should be familiar with the Working Time Regulations, but how do you respond to this request and what exactly is the legal situation? You’ve checked your records and this employee has so far only taken three days holiday this year. So would you:

a) Say yes that’s fine. As an employer you have to agree to all requests for holiday by employees with a family, no matter how short the notice.

b) Say yes, but request that the employee considers alternative dates as you are short staffed at the moment.

c) Say yes, but explain that it will be unpaid leave as it is at very short notice.

d) Say no, you are short staffed and the request is at unreasonably short notice.

At first glance and under pressure you will naturally be thinking about your responsibility to be flexible and reasonable as an employer, and hence that you must agree to the request.

But you would be wrong.

The correct answer is d). Employment regulations do not give employees the right to specify when they take their holiday entitlement. In fact, they give the employer the right to stipulate when employees can or cannot take their holidays, provided you have agreed this with them in writing, and how much notice the employee has to give you when requesting their time off. Ideally, this should be written into their contract of employment.

In other words, employers and employees can agree how and when to give notice of when leave is to be taken. But in the absence of any agreement, by law the notice period should be at least twice the period of leave to be taken. So for example, if a week’s leave is requested, then two weeks notice should be given.

It’s a two way street – both employers and employees need to be sensible, reasonable and flexible. A formal written policy, usually in the employee’s contract will deal with that and the law will intervene when it does not.

Being your own boss and having people working with and for you is not only a pleasure (of course), but also at certain times quite painful, frustrating and distracting, especially when dealing with the type of dilemma faced by the restaurant owner in our example.

On the personal side of things you want to be loyal to your staff, and them to you. But when it comes to the crunch sometimes you have to be hard in order to be fair, and the employment regulations, despite being an absolute minefield, are there to protect your interests as an employer as well as those of your employees.

To comment on this article you can do so below.

In fact, all firms’ and traders’ individual characteristics are very different in terms of their size, experience, stage in their business life cycle and the sector/industry they operate in.

But there is one striking fact. The vast majority of businesses in the UK (more than 95% of them) are micro-enterprises – or, more precisely, there are around 3.6 million sole traders/freelancers and just over one million very small firms employing between one and nine staff. And this micro-business/sole-trading sector comprises one third of the nation’s private sector workforce at just under eight million people – a vitally important contributor to our economy.

Here are some other notable facts.

The vast majority of businesses that start up or attempt to start up each year are micro-enterprises and sole traders – historically, this figure has been in the region of 400,000-500,000 each year.

At least two thirds of people that attempt to start up will abort or delay their plans before they get started, highlighting that somewhere between 1 million and 1.5 million prepare or attempt to start up each year, with only around one third crossing the start up line.

It can generally take several months before a new start up commences trading and it is not unusual for it to take 12-18 months before new firms open their doors to customers.

Of those that do manage to start up, around half will fail or cease trading within 12 months, most of those in the first few months, and many within a matter of weeks.

Of those that continue trading, the vast majority will remain as micro-enterprises and sole traders and, while some will manage to grow a little and employ 10+ staff, only a few (around 2-3%) will make it into the 20-50 employee bracket.

A major reason for this is the fact that micro-enterprise owners generally have little aspiration to grow or employ more than one or two people.

But despite their individual size, micro-enterprise owners have traditionally been the biggest consumers of face-to-face business support – both pre- and post-start – especially when seeking help to manage or raise finance, grasp the principles of cash flow and break even, get to grips with marketing/sales and understand their tax and legal obligations.

Related to this, and one of the least appreciated aspects of the role of business support agencies, is the need to assist pre-start enterprises who will abandon or sideline their venture before they start, and to support post-starts who are the most vulnerable and at greatest risk of failure in their first year.

In fact, studies have shown that, of those micro-enterprises who do seek face-to-face advice and training, around 80% are still trading after three years.

However, it is also a fact that the majority (around 90%) of micro-enterprises do not tap into the assistance available from business support agencies, such as enterprise agencies, CDFIs, Chambers, PRIME and the Prince’s Trust – and the three-year survival rate among this group is only around 20%.

This type of practical, hands-on support, which has proven over 30 years to be fundamental to micro-enterprise formation and survival, is not the same as the free mentoring approach currently being championed by the Department for Business (BIS), or the various online support initiatives which are funded by the taxpayer.

Which begs the question: why is the capacity that is needed to support pre-start and early-stage start ups through these vital face-to-face support agencies generally being ignored and inadequately resourced by policy makers?

For example, at the Funding the Future – SME Finance in the North East conference in Newcastle last week, Edward Twiddy, Director of the North East Local Enterprise Partnership (LEP), commended the £125 million of non-bank finance that was available through various equity-based funds to established firms in the region.

But when asked in the Q and A session about the latest ONS figures revealing that the North East has the lowest levels of self employment and business start up in UK, Mr Twiddy admitted this was a strategic economic problem for the region. He went on to say that, despite the welcome levels of finance available to established firms, it is not access to finance that is the problem for start ups, it is access to appropriate face-to-face support. For which there is precious little funding available.

And it’s not only in the North East where there is no strategic funding available to resource support for start ups. This is a national problem and there is no indication that this is going to change in the next couple of years.

Against this gloomy backdrop, BIS have put out a tender to recruit a PR agency to encourage people to start their own business, primarily by raising awareness of the Business In You website. This is the business start up initiative favoured by civil servants, despite their own research finding it has minimal interest from the small/micro-business community and provides little of any practical value.

It’s no surprise that our economy is struggling to recover, when our policy makers are oblivious to the needs of the current and next generation of micro-enterprise owners.

No amount of PR or hype is ever going to be able to fix that.

To comment on this article you can do so below.

After all, your business plan will be meaningless if you haven’t identified the market you’re aiming your product or service at, and haven’t got a practical plan describing how you will reach it.

Your marketing plan doesn’t need to be dozens of pages of intricate detail about every single marketing tactic, sales activity, ad campaign and press release you are going to run.

What it does need to be is a concise, clear and coherent document that will answer a number of key questions about where your market is, who is in it, how you will reach it, who you will be competing against, and how you will carve a niche.

A useful way to approach this is to look at it from the point of view of someone who is trying to understand your marketing strategy, and the questions they would ask you to help them do that.

Here are ten examples of the types of question someone might ask about your strategy:

1) What is your number one source of new business going to be and how will you get it? In other words, is there a particular type or group of customers, or a specific marketing or sales channel, that will be your top revenue generator, and what will you be doing that specifically focuses on this?

2) Can you explain what your business is going to market? In effect, what are you going to sell, how will you sell it, and who will you be selling it to?

3) After you’ve got your first sale from a customer, what proactive communication and marketing methods will you use to sell to those customers again?

4) What is your competition’s biggest weakness or failing and how will you exploit this?

5) What is your competition’s biggest advantage over you that you seriously need to do something about, and how will you do this?

6) What is your Unique Selling Proposition (USP) in your market that will make customers prefer to buy from you rather than your competitors, and how will you communicate this in all your sales, marketing and advertising activities?

7) Is your strategy to make money on the ‘front end’ of your business from first-time customers, or are you planning to make it on the ‘back end’, where customers repeatedly buy from you over and again?

8) What is the lifetime value of your customer? In other words, how much revenue will be generated over the entire period that your customer has a relationship with your business? Can you explain how you have calculated this?

9) How will you test all aspects of your sales and marketing activities to ensure they are working effectively and profitably? How will you change and adjust things to reflect what is working and what isn’t?

10) Who is going to be responsible for the selling and marketing of your product or service (who will do it), and what budget have you allocated per month over the next year to make it happen?

Of course there are many possible questions that can be asked about your business and marketing strategy, but answering key questions such as those above will provide you with a clear focus and some very useful pointers to begin writing your marketing plan.

And you don’t have to kill a tree to write an effective plan, in fact you can do this in less than one day. To begin with, don’t worry about your writing style and don’t over complicate it. Just find a pencil and paper or open a Word document and get started.

To comment on this article you can do so below.