RESOURCE CENTRE

Your EnterQuest Bulletin - 20 April 2005

In this week's issue:

• how important is honesty in a small business?
• using joint ventures to attract new customers
• open all hours - clarifying the law on trading hours
• getting your e-newsletter past the spam filters
• the all-new HM Revenue & Customs 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

How important is honesty in a small business?

This week we've made a long overdue return to something for which this newsletter has built up quite a reputation over the last couple of years.

Asking stupid questions. Or to put it another way, asking questions that state the blooming obvious.

Or maybe not, because when we ask these questions or state what appears to be obvious it's because we continue to find that the obvious isn't obvious at all. Not to everyone setting up and running a small business, at least.

So here's the stupid question.

How important is honesty in a small business?

OK, yes, so the answer is patently obvious. Of course honesty is very important in a small business - in fact it's crucial.

But if that's the case, then why do so many people fail to be honest when they run their small firms, and then can't understand what's gone wrong when their venture fails?

When we talk about dishonesty in a small business, we're not really talking about major cases of fraud, armed robbery, embezzlement and gun running. We're talking about small business petty crime, metaphorical "muggings" of customers, and a general approach to bullsh*tting your way through business.

Let's look at some examples of the things we've witnessed first-hand over the years that are the types of "dishonesty traps" you could fall into:

• Making ridiculous claims about your business that you can never fulfil or have no intention of fulfilling.
• Taking advantage of customers who believe the misleading crap you tell them.
• Deliberately not complying with, or allowing yourself to be ignorant of, business law.
• Providing short measures instead of what your customers think they are buying from you.
• Using inferior ingredients or components in your products that are "not on the label".
• Making wild and unachievable claims in your business plan in order to raise finance.
• Being a little bit more than just creative in your accounts.
• Lying about when you can deliver something just to receive the order.
• Agreeing to a price and then actually charging more.
• Making bogus claims and warranties such as a money-back guarantee and not sticking to your promises.

It may surprise you to know that this type of slyness and unscrupulous behaviour is widespread, and there are many other examples of petty business crookedness like these. And it's also a fact that most of this business "wiliness" rarely attracts the attention of business regulators, not at first anyway.

But you can bet your bottom dollar that this sort of deception and swindling doesn't escape the attention of your customers, suppliers, employees and other stakeholders with whom you want to establish loyal relationships. You might get away with it once or twice but people will soon get an idea of what you're like to do business with, and will go and do business or work with someone else. And what's worse for you is they'll tell other people what you and your dishonest, misleading little enterprise is all about.

The only businesses that prosper and go places are those that are entirely honest and ethical in every respect. If you try to dupe, short change, or even just ever so slightly "con" people, you'll get found out and will eventually go out of business, if the law doesn't catch you first.

That's a certainty.

Marketing tip

Using joint ventures to attract new customers

Too many small businesses make the mistake of not looking beyond the walls of their own business to see the vast opportunities waiting for them through joint-venture (JV) marketing.

JV marketing is the process of promoting your enterprise to the customers of complementary businesses. It involves developing a special offer and getting a business with a related product or service to present your offer to their customers, resulting in a win-win situation for both of you.

For instance, suppose you sell men's clothing. Chances are, your customers use related local services, such as dry cleaning. To set up a JV, you could ask local dry cleaners to display money-off vouchers for your shop, while you offer dry cleaning discount vouchers to your customers.

Or if you're a hair salon owner, you might consider giving away free colour treatments by allowing local nail salons to give them away. This way the nail salon benefits by offering their customers a valuable freebie, and the hair salon benefits by gaining free exposure and new customers.

You get the idea. There's no limit to the types of JVs you can profitably set up with other related businesses. Here are four practical steps to help you get started and make an approach to potential JV partners.

• Step 1 - Understand your numbers. You'll need these to demonstrate how much money your potential partner could make. For instance, work out what your response rate is for a typical direct-mail campaign and the pound value of each new customer.
  
  
• Step 2 - List products and services that are complementary or related to your own, and that you would like to offer your customers. Don't leave out products or services that aren't necessarily related but in which your customers might still be interested.
  
  
• Step 3 - List businesses that sell those products and services. Specifically note those businesses where you know the owner or have contacts. Then send a letter to those people and propose a meeting to explain your strategy further. Always start by introducing yourself and asking if they would be interested in making money (use a specific amount) with little or no effort. Make a follow-up phone call to set up the appointment.
  
  
• Step 4 - Get an agreement. When negotiating your deal, always try to get an agreement to extend your relationship. For instance, get agreement at the start that if the test goes well, the JV will last for the next 12 months. You don't want your partner stealing your good idea and playing you against your competitors.

Potential JVs are all around you, waiting for you to take advantage of them. Stop thinking 'competitor' and start thinking 'opportunity'.

Read more about joint ventures in Chapter 8, 'Joint ventures: using other people's customers to get a rush of new business', of the UK Small Business Marketing Bible, where you can also find hundreds of ideas, tips and techniques for increasing sales.

Legal tip

Open all hours - clarifying the law on trading hours

The law on trading hours has become increasingly complicated over recent years, so we thought we'd summarise some of the most relevant points for small shops, and cast a quick glance over street trading and car boot sales.

• If you run a small shop, the law is reasonably simple. The Sunday Trading Act 1994 classifies small shops as anything under 280 sq m or 3,000 sq ft - these shops are allowed to be open all day Sunday. Anything larger than that counts, under the law, as a supermarket and may only open on a Sunday for a maximum of 6 hours between 10am and 6pm. Likewise, the law says large shops must close on Christmas Day, but small shops are allowed to open if they want to.
  
  
• The recent introduction of the 2003 Licensing Act has removed the restrictions on the sale of alcohol, and shops can theoretically sell wine, beer and spirits all night. However, in order to serve alcohol at all, you must have a premises licence and a personal licence from your local authority, and this may come with strings attached if the licensing authority so decides.
  
  
• Street trading and car boot sales are licensed by your local authority too, under the Local Authorities Act. Things may get more complex if you want this type of licence, since your local authority may have quotas, time restrictions and may ban trading altogether in certain busy areas. To find out, it's worth asking what their policy is. A useful list of local authorities is available at the Direct.gov website.

The UK Red Tape BUSTER will keep you up to date on legal changes, and offers hundreds of legal scenarios, FAQs, factsheets and checklists.

IT tip

Getting your e-newsletter past the spam filters

E-mail newsletters are a good way of staying in touch with customers and letting them know your latest news, promoting special offers, or simply reminding them your business is still around. In previous tips, we've looked at how to ensure they're legal under the Data Protection Act 1998 and the Privacy and Electronic Communications Regulations 2003.

Complying with the law is only half the story though; even legitimate newsletters are often stopped by spam filters even before reaching the recipient, and others are binned without being read. How can you ensure yours gets through the filters and entices your subscribers to read it?

• First of all, you need to consider how to avoid your e-mail getting caught in a spam filter, which can happen if an Internet Service Provider (ISP) decides it looks like spam. This problem is becoming more widespread, and there are no golden rules, although clearly you should avoid using colourful language. If you have repeated problems, you should look at cutting out words which may appear harmless, such as "free" or even "credit card".
  
  
• The Newsletters and Electronic Publishers Association offers a guide to avoiding spam traps, and anti-virus firm Sophos has published a list of the 25 words most commonly disguised by spammers, so check that your newsletter doesn't contain any of these.
  
  
• Next you should think about whether to use HTML or plain text for your newsletter. Plain text is becoming less fashionable as more people connect to the Internet using broadband. Using HTML is also a good way of personalising your message with your business logo, a more attractive font, and even graphics and photographs, all of which can create a more appealing overall appearance.
  
  
• To avoid your recipients receiving the e-mail addresses of everybody on your mailing list, add one more e-mail address to the list - your own. Right click on your name in Outlook and click on 'Properties', then change the display name to the name of your newsletter. Finally, when you add names of recipients to the e-mail, add them as blind copies (using the 'BCC' button), and add only your newsletter name and e-mail address to the 'To' field. Here's Microsoft's explanation about carbon copies and blind copies.
  

New business idea

Here is this week's idea:

• Ghost Tours

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 'noisome' means?

a) loud
b) offensive
c) opinionated
d) indifferent

Answer at the end of the Bulletin.

Website review

The all-new HM Revenue & Customs website (www.hmrc.gov.uk)

The merger between the Inland Revenue and Customs & Excise took another step forward this week, with the names of both bodies now changed to HM Revenue & Customs (HMRC) and a new shared website. But how good is the new site, and how does it compare to the old Inland Revenue site which we reviewed a couple of months ago?

• Navigation - at first glance, it doesn't look much different from the old Inland Revenue homepage, which was reasonably - but not spectacularly - easy to navigate. However, it's totally unclear where to go if you're expecting the old Customs & Excise info - and the problem of having to register before you can access some of the information hasn't been addressed.
  
  
  

• Accessibility - this is a big improvement over both the old websites. There's now a link to accessibility information directly from the homepage, and there are good explanations about how to use access keys and what to do if you've got a browser other than Internet Explorer.
  
  
  
  
• Content - the frequently asked questions and step-by-step guidance through processes like registering for VAT and self-assessment included within the business section of the site are practical and comprehensive. There are also useful tables detailing income tax and National Insurance rates, plus a tool for checking VAT in Europe.
  
  
  
  
• Relevance - the new site has introduced a very useful press releases archive which was lacking on the original sites, and has even helpfully archived the past few months' worth of Customs & Excise and Inland Revenue news. The 'Business Briefs' section has been revamped and there's good information about the HMRC merger and the Budget.
  
  

A total score of 15 for the new HMRC site - the Inland Revenue only scraped 9 when we reviewed its site a couple of months ago.

Our rating - 15/20

Did you know?

Microsoft has released eight new patches

Microsoft has unveiled eight new patches as part of its monthly security update, five of which it says are "critical". The patches are to fix serious vulnerabilities in the Windows operating system, Internet Explorer browser, Exchange Server, Word program and MSN Messenger instant messaging service. The remaining three patches are classed as "important" and affected users are advised to download all eight as soon as possible. Meanwhile, security experts F-Secure have discovered another smartphone virus, the Fontal.A Trojan, which threatens to wipe out the data on affected phones.

Worth a visit

Spam glossary for e-mail users

E-mail security company Vircom has published a comprehensive glossary of the jargon and terminology associated with spam. The glossary includes explanations of European and US anti-spam legislation, as well as definitions of related words and phrases associated with viruses, spyware and Trojans.

Factsheets for social entrepreneurs

The DTI has published the third and final factsheet in its series of information about Community Interest Companies (CICs), which is a new legal structure of company that has been set up to boost social enterprise. The third factsheet provides practical guidance on forming and running a CIC, and the website also includes more general information about how CICs will be phased in this year.

Worth a read

If you spend more time writing and worrying about a to-do list than actually doing the things on the list, this book could help you. It provides practical tips, techniques and solutions to productivity problems, exploring how to make better use of time, keep cool under pressure and handle unexpected demands. Advice is given on when and how to delegate and the book is packed with tips on improving efficiency across your business. 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.