RESOURCE CENTRE

Your EnterQuest Bulletin - 16 March 2005

In this week's issue:

• where to look for a small business idea?
• tips for developing your USP
• weighing up the options for packaging
• bringing your website to life
• the Health and Safety Executive's (HSE) website reviewed
  

Small business answers

If you have any questions about your business idea, are lacking some basic data about your target market, or simply need help tracking down a grant, subsidy or other source of business support in your local area, then send an e-mail with your query to the EnterQuest information team and we'll do our best to help.

Send your question to enterquest@cobwebinfo.com.

Weekly stir

Where to look for a small business idea?

If we were to ask you the question, "How many small business ideas are there out there?", what do you think your answer would be?

• 10,000?
• 100,000?
• 10,000,000?

Well, who knows? There are thousands of different types of small business in the world, working in hundreds of different variations on a theme. Think restaurants - Italian, Vietnamese, Cajun, French, Greek, Cantonese, Anglo-Lithuanian (what's on the menu in one of those?) - the list is endless. Think bookstores - general, academic, early learning, cooking, sports and hobbies, second-hand novels - you can just go on and on.

So how will this help you come up with an idea that you could set up as a business and begin trading? Well, it probably won't, because trying to pick from tens of thousands of ideas is just going to send your head spinning if you're at the stage where the idea is still a bit of an unknown quantity.

To get you started with a different approach to finding and homing in on an idea that you could turn into a business, there's something much simpler for you to consider.

Looking at what people WANT.

Yes, and by this we mean what people want and are willing to buy, or have to buy every day of their lives.

So how's that going to help? You can't run a business selling "things that people want". How on earth can you focus on a market with an idea like that?

Well, the answer is a bit more obvious than you might realise. Let's do a bit of research.

According to research by the Interactive Media in Retail Group, consumers spent £17 billion online (which means using their credit cards over the Internet) in 2004 alone - and this figure is predicted to increase to £80 billion by 2009. These sorts of figures can be meaningless, that is, until you start breaking them down into more revealing levels of spending.

For example, with a bit of digging, research also reveals that most online spending is going on products such as:

• Software
• Music
• Books (especially e-books)
• Travel services
• Food and drink

Clearly, these are all things that people want, so if consumer spending on this stuff is on the increase and continuing to rise, can you spot an opportunity, an idea, or a niche that you could pursue in a small business venture?

And why is it that so many people are attracted to the idea of running a business that sells products online? Because there are few or no distribution costs, very low admin, and no grief associated with chasing payments, that's why. And as a small business, you can sell other people's products without having to hold any of their stock.

The consumer likes it because they can see the product, read about it, hear about it, want it, buy it and, with e-products like software, e-books, music downloads and travel bookings, they've got their purchase in the blink of an eye. It's convenient, easy and painless.

Now what other ideas can you get by studying what people want? Consider the following list of basic, and in some cases very basic, things that the vast majority of people want.

• Adventure
• Self-improvement
• Control over their future
• Better health
• New friends
• Independence
• Know-how and advice
• New hobbies
• Food
• Drinks
• More time
• More leisure
• Security
• Relationships and romance
• Better fitness

Can you think of another 10 or 20 similar categories of things that people want?

Now consider your own personal situation and abilities that could be beneficial when considering a business idea.

• What are you good at?
• What are your hobbies?
• What do you enjoy doing more than anything else?
• What's your job and could you do this on your own?
• Is there someone else's job that you think you could do on your own?
• What do you look for or wish for in your local town or area but can never find?
• Who's had a business local to you, but has closed down, and everyone's complaining?

OK so far? Fine, let's now look at a few fundamentals before you go any further.

There are plenty of basic human or business needs that people want all the time, and there are plenty of trends indicating what's selling like hot cakes at the moment. Matched to your own abilities, hobbies, personal interests and gaps in the market you've spotted locally, you may well be able to close in on an idea that has business potential.

But before you take your idea to the next stage and begin researching how you will start it up, there are some rules you need to apply and follow.

• You must be confident that your idea can deliver a product or service to a quality standard that is high enough to satisfy your customers.
• You must be convinced there are enough people in your target market willing to buy your chosen product or service right now.
• You must be certain that the business idea or the product you intend to sell is sufficiently different or better than anything else that's on offer. If it's just more of the same, how will you convince people to buy from you?
• You must be able make your enterprise a pleasure to do business with. Friendly service, easy, convenient ordering, collection or delivery and after-sales advice are the sort of things to be thinking about. Will you bend over backwards to make people come back and buy from you again and again?
• You absolutely must be able to run your business legally.

All of this takes us back to our original point about looking at thousands of different business ideas and knowing where to start. At the end of the day, it's not all that complicated, because choosing a business idea is basically about finding out what people want, and how you can supply it to them.

Marketing tip

Tips for developing your USP

Last week, we explained how important it is to develop a powerful Unique Selling Proposition (USP) if you want to blow your competitors out of the water. And we've suggested practical ways to identify your own USP and make it crystal clear to your customers and anyone else associated with your business.

So here are three practical tips that you can apply to your business situation in order to further develop, exploit and integrate your strong and meaningful USP into everything you do.

This is sometimes called pre-emptive marketing. You can pre-empt your competitors if you select a benefit, whether or not it's unique, and put your stamp on it first. All others who come after you will just be strengthening an advantage that you have already placed in the minds of your prospects.

Once you have put some careful thought into developing your USP, you need to integrate it into everything you do. Your USP should be found somewhere in your headlines, advertisements, direct mail literature and Yellow Pages entries. Repeat it clearly and consistently at every opportunity. Include it in your sales presentations, on the walls of your business premises and even on your business cards. You can't overdo or wear out your USP, especially if it's powerful.

Read more about developing your USP in Chapter 3, 'Differentiate or Die', of the UK Small Business Marketing Bible, where you can also find hundreds of ideas, tips and techniques for increasing sales no matter what sector you are in.

Legal tip

Weighing up the options for packaging

Businesses involved in making, packaging or selling food are faced with a multitude of laws, and many find it difficult to keep up when new rules are introduced or when food hits the news as it did recently with the illegal Sudan 1 red dye.

One of the most important bits of food legislation is the Weights and Measures Act 1985, and its later amendments including the Packaged Goods Regulations 1986. Together, they cover the use of metric weights, the types of foods which must be sold in certain "prescribed quantities", and the principle of the average weight.

Here's a brief outline of the rules:

• Firstly, the labels for most packaged food must include its metric weight. A label can include the imperial weight (pounds and ounces), but this must not be more conspicuous than the metric weight.
  
  
• Some food, such as biscuits and cereals, may only be sold in "prescribed weights", except where it's sold in very small or very large quantities. Of course, many of these weights are simply the metric version of an imperial weight - for example, jam can be sold in units of 454 grams, which is equivalent to 1lb. There are details about prescribed weights at the University of Reading's website.
  
  
• It's important for food businesses to understand the principle of average weights. Under the Packaged Goods Regulations, the average weight of your goods must not be less than the weight indicated on the packaging. As well as complying with the average, not more than one in forty packages is allowed to exceed a certain fixed margin of error (which is calculated according to a fearsome mathematical formula published in the Code of Practical Guidance for Packers and Importers - this can be obtained by contacting your local trading standards department).
  
  
• The good news is that the principle of average weights doesn't apply to many foods, such as fresh fruit and vegetables, ice cream, cakes, and anything sold by "catch weight" (ready-cut portions of cheese on a deli counter, for example).

Of course, weights and measures are only part of the tangle of food laws facing businesses. For an overview of some of the other rules, there's an excellent list by subject at the University of Reading's website.

And the UK Red Tape BUSTER explains countless other rules and regulations that affect small firms, as well as covering hundreds of legal scenarios, checklists and frequently asked questions.

IT tip

Bringing your website to life

Which of the following formats is not a graphic file format (a suffix attached to the name of a graphic file)?

a) JPEG
b) Bitmap
c) XLS
d) GIF

Answer: Bitmaps, JPEGs and GIFs are all graphic file formats; XLS is usually used for an Excel spreadsheet

Pictures and graphics are a great way of bringing your website to life, impressing customers with a striking logo, or showing you mean business with a professional letterhead. And a basic image editor, such as Microsoft Picture It! or Adobe Photoshop, makes it quite easy to create and adjust graphics on your PC.

There's a wide variety of graphic file formats, and many computer users simply rely on their software to choose the right one. The three most common - GIFs, JPEGs and TIFFs - all work differently though, and it's worth finding out which is the best for the many different tasks you might be faced with.

• The most common format is the JPEG, since it can be displayed by most applications, such as Internet Explorer and Outlook, and can easily be imported into a Word document. It's useful if you want to include pictures of your products on your website, for example, as it will reproduce your original photographs accurately. It tends to save images as large files, however, and may take your website visitors a long time to download. When you need to make copies it can also lose the quality of the original.
  
  
• If you're designing a logo for your business, the GIF format is very useful as it doesn't lose any quality when you need to make copies. It's also smaller than a JPEG and will download quickly on your website. But because it has a maximum of 256 colours, complicated pictures can lose their quality and may not look as impressive when they're displayed.
  
  
• A less well-known format is TIFF (Tagged Image File Format). This is a good format because it doesn't lose anything when you copy it, and can display millions of different colours. The disadvantage is that it produces large files, so it's not suitable for quick downloads from your website.

Once you've decided on a format, you need to save your graphic file. With most image editors, that simply involves clicking on 'File', then 'Save as', then choosing your format. If you're changing a JPEG to a GIF, it will warn you that some colours may not be saved, but the software will then do its best to approximate the colours you originally had.

New business idea

Here is this week's idea:

• Home De-Clutter Service

Just one word

Regularly improving your vocabulary is not just about learning a new word and its meaning. It will improve your general knowledge and make you feel and act smarter in all sorts of personal and business situations.

Do you know what 'fiduciary' means?

a) a member of the board of a limited company
b) someone who owns a share in a business
c) a trustee or someone who holds assets, rights or powers on behalf of another
d) a business that invests money in another firm

Answer at the end of the Bulletin.

Website review

The Health and Safety Executive (HSE - www.hse.gov.uk)

Health and safety regulations affect all businesses, but how helpful is the site of the Government body responsible for implementing health and safety law? The HSE's site has recently been revamped, so we've selected it for this week's review.

As usual, we've assessed the website in terms of navigation, accessibility, content and relevance.

• Navigation - it's easy enough to find out which part of the website is relevant for business owners, but the toolbar along the top of the homepage is crammed to one side and not very practical. The 'What's New?' section, 'Press Office' and 'News' section all contain similar content, and there are graphic links down the right-hand side of the homepage which look confusingly like adverts.
  
  
  

• Accessibility - the content of the site can be translated into an impressive 22 languages. However, the site claims to be "in the process" of introducing access keys and advice for people with different browsers, but admits that currently only about a quarter of the content is available in this format.
  
  
  
  
• Content - we like the tone of the HSE's content, as it's written in an approachable and easy to understand style. And the business section of the site contains practical factsheets on both general and sector-specific health and safety issues, with good information for start ups and small businesses. The information explaining how health and safety law is enforced and the penalties of not complying is also extremely comprehensive.
  
  
  
  
• Relevance - the 'What's New?' option on the homepage manages to keep things looking fresh and topical, and helpfully, much of the PDF or factsheet content on the site is dated according to when it was last updated. The Press Office is also fairly good at keeping things current - and the HSE also produces monthly publications on relevant topics and changes in the law.
  
  

A total score of 12 out of 20 for the HSE, and we'll grant a bonus point for the recently launched, practical web-based tool, the Health and Safety Performance Indicator, which aims to help small firms give their insurers an accurate assessment of how well they're dealing with their health and safety obligations.

Our rating - 13/20.

Did you know?

Online consumers spend two weeks shopping around

A new report by Doubleclick reveals some interesting information about the way people use the Internet. The study looked at consumers buying clothes, computers, sports goods or travel items online, and found that nearly half of the respondents began shopping around by using a search engine prior to making their purchase. Over 54% of respondents carried out their searches two weeks or more before finally buying the goods.

eBay's new tariffs

eBay has recently updated the tariffs it charges people that want to use the auction site as a vehicle to sell goods online. More businesses are using eBay as a way to venture into e-commerce without having to set up their own online store, or as a method of getting rid of extra stock or second-hand office equipment and books. The new tariffs include options for business traders who want to highlight their items on the site - for less than £50 traders can have an item featured on the eBay homepage.

Worth a visit

New training tool for food firms

Improve, the Sector Skills Council for the food and drink industry, has developed a new online learning tool for business owners to use when training new staff. Available on CD-ROM for £35, the tool provides a basic one-hour training programme about food hygiene, covering personal hygiene, food safety, cleaning in food premises, waste and pest control. The aim is to make it easier, less time-consuming and cheaper to train new employees in these basic procedures.

Free sticky content from FreeSticky

FreeSticky is a directory of online content that is available for website owners to republish free of charge. It includes photographs, articles, discussion forms, cartoons and other graphics. Increasing the amount of fresh, interesting content on your website is one way to make sure customers have a valid reason for revisiting the site.

New Trojan scanning tool

A number of nifty tools are available at the Information Exchange, including a Trojan scanner that checks for 85 known Trojans, and a couple of clever tools that can provide analysis and information about other websites.

Worth a read

Written by an ex-marine, this book bills itself as an "entrepreneurial boot camp", providing practical advice and explanations that aim to contradict the various myths and misunderstandings about starting a business. Each chapter breaks down one such myth into a series of useful suggestions that anyone can implement, and the book covers topics such as deciding whether an idea is really viable, understanding your customers and the reasons why start ups fail. Check out:

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Good luck

The EnterQuest Team

This information is meant as a starting point only. Whilst all reasonable efforts have been made, the publisher makes no warranties that the information is accurate and up-to-date and will not be responsible for any errors or omissions in the information nor any consequences of any errors or omissions. Professional advice should be sought where appropriate.