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Your EnterQuest Bulletin - 23 February 2005
| Thought
for the week: "Experience is not what happens to a
man; it is what a man does with what happens to him." Aldous
Huxley |
In
this week's issue:
- even
more ways to guarantee small business failure
- how
free giveaways can boost your revenues
- safety
first with the Product Safety Regulations
- broadband
speeds up - how to understand the different offers
- a
review of the Food Standards Agency website
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
Even
more ways to guarantee small business failure
The doom and gloom merchants have been at it again, with the latest
Ernst & Young New Business Barometer telling us with uncanny
authority that small business confidence has hit rock bottom (a
report by someone else a couple of weeks ago said the complete opposite).
Perhaps
they should ask small business owners for predictions about what
the weather is going to be like this summer, so that we can study
the results and decide where to book our holiday, or maybe close
our businesses down just in case there's a flood.
So
in this week's bulletin we thought it would be helpful to coach
and encourage our readers to take positive action and prepare themselves
for failure. Like we did a couple of months ago, we've identified
some practical tips you can start using straightaway which, if followed,
will put you out of business in double quick time.
Here
are our latest tips to guarantee your small business will fail.
| 1) |
Save
costs by paying your staff as little as possible - this is
a trick any small business can use, and if you pay people
less than the National Minimum Wage, you'll have really cracked
it. There are plenty of unsuspecting skint or unemployed people
out there, desperate for work, who'll join your firm for some
extra beer money.
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| 2)
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Conveniently
forget to make your tax return - with any luck you won't get
found out, and better still, you'll spend all your cash so you
can't pay it anyway. The Inland Revenue and Customs and Excise
are very understanding about small business cash flow problems
and only send people to jail in the worst cases.
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| 3)
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Only
employ people who you know - friends, family and neighbours
are a good starting point. Looking for talented people with
qualifications will only bring you staff who'll keep on suggesting
new ideas and raise awkward questions about the way you run
your business.
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| 4)
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Don't
talk to customers under any circumstances - and certainly don't
give them their money back if they complain. The last thing
you want is to get embroiled in customer surveys and feedback
which will distract you from your objective of becoming a millionaire
overnight.
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| 5)
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Ignore
all the new employment regulations that keep coming out. All
that stuff about discrimination, harassment, health and safety
in the workplace and so on will eventually bog you down in paperwork
and red tape. In any event, there were only 56,000 cases of
employees taking their bosses to employment tribunals last year
- which is actually less than 1% of the working population,
so you've got a greater than 99% chance of getting away with
it.
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| 6)
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Get
yourself an MBA - that's one of those university masters degrees
about business which are run by professors and lecturers who
decided to pursue careers as teachers instead of risking it
as entrepreneurs and small business owners. You'll be able
to read endless textbooks and learn practical entrepreneurship
theories and techniques such as strategic modelling, time
series analysis and microeconomic dynamics. Your competitors
won't even know what's hit them.
|
Ignore
the above advice at your peril, otherwise you'll be in danger of
staying in business and might even be hugely successful. But at
what cost to your confidence and state of mind? How could you even
contemplate taking such a risk?
Marketing
tip
How
free giveaways can boost your revenues
Offering
free giveaways to prospects and customers is a powerful business-building
strategy that can result in a flood of new and repeat customers.
It
may seem counter-productive to give away your products and services
to build your business, but people can't resist the lure of receiving
something for free. The word 'free', as worn out as it may seem,
is still the most powerful word in marketing. It has a hypnotic
effect on people.
The
reason free giveaways work so well is twofold.
- First,
prospects who test your product or service risk-free will hopefully
recognise its value and continue purchasing what you offer. Or
even better, your prospects will get 'hooked' on your product
or service and won't be able to live without it.
- Second,
the fact that your product or service was given to your prospects
as a free gift will compel them to return the favour by continuing
to buy from you. This principle is called the 'law of reciprocity'.
Simply stated, people naturally feel an obligation to return favours
as a way of expressing their thanks.
There
are myriad ways to offer a free giveaway, and many effective types
of giveaways that small businesses can use to attract new and inactive
customers. Here are three tips on offering free giveaways in your
business.
| 1) |
Work
out your 'total customer value'. This is the amount of profit
you will receive from your customer over the total length
of your relationship. This figure not only includes business
that you will receive from your customer, but also any referrals
you may receive from them.
For
instance, suppose you own a dry cleaning business and you
compute your average total customer value to be £1,250. How
much money would you be willing to invest in free giveaways
to acquire a new customer? £50? £100? £200? The answer is
that of course, any small business would invest £50, £100
or £250 to gain £1,250 in profits.
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| 2)
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Offer
free giveaways that are low in cost to you, but have a high
perceived value to the person you are giving them to. Information
is a great example of a free giveaway that has a low product
cost and a high perceived value. Give away information in the
form of special reports containing 'insider' information for
new customers. |
| 3)
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Justify
any deal that's 'too good to be true'. If your free giveaway
appears too good to be true, it could decrease your credibility.
To avoid this you should always give the reason why you can
offer such a great deal.
It
might be that you made a mistake and over ordered; you arranged
a great deal with your supplier; or you just want to say thank
you in a meaningful way. Whatever the case may be, give a
reason to help your prospects logically reconcile your offer
in their minds. In turn, this will give your prospects the
comfort level needed to act on your offer.
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Read
more about using free giveaways in your business in Chapter 10,
'How free giveaways can boost your revenues', of the UK Small Business Marketing
Bible, where you can also find hundreds of ideas, tips and techniques
for increasing sales.
Legal
tip
Safety
first with the Product Safety Regulations
From time to time, even the best-run shops or online retailers can
make a mistake and supply goods to the public which aren't safe.
(See our article below on Sudan 1 as an example of this.)
If
you're a retailer, product safety law puts you in a difficult position,
because even if you didn't make the goods yourself, you can still
be held liable if any of your stock harms or injures a customer.
However,
depending on the circumstances, you may not necessarily be held
responsible if you've made a reasonable effort to find out about
the safety of the products you're going to sell, and kept your customers
informed.
The
law on product safety is covered by the General Product Safety Regulations
1994. It requires retailers to:
- Take
steps to ensure the products they sell are safe.
- Provide
customers with information and warnings.
- Keep
up to date with any new risks or scares.
These
requirements do not currently apply to food (which is covered extensively
elsewhere by specific regulations), second-hand goods and antiques,
or to goods used in industry but not by the general public.
The
Department of Trade and Industry (DTI) offers a guide to the Regulations, which provides advice on how the
law affects you if you run a shop or supply goods to the public.
You
should note that the DTI is currently running a
consultation on how new European product safety regulations
should be brought into UK law. The law is likely to become much
stricter before the end of 2005, so we'll be keeping you up to date
with developments.
The
UK Red Tape BUSTER
can keep you informed of updates to product safety laws, and offers
hundreds of scenarios, factsheets and guides for all small business
owners.
IT tip
Broadband
speeds up - how to understand the different offers
It's
been a while since we looked at broadband Internet connections,
and in that time things have changed - the connection speeds are
faster, and prices have either fallen or stayed the same for a better
connection.
With
prices dropping, broadband is now within the budget of many small
businesses, and is also useful for sole traders who want to connect
for family Internet use in the evenings. In recent weeks, the competition
between the broadband companies has heated up again, and it can
be worth looking at the current offers and seeing if you can save
money by moving to a different provider.
Here's
a guide to what to look out for:
- Firstly,
price and speed. Most providers charge by the month, and most
are offering three or four packages based on the speed of the
connection. A 2MB per second connection is likely to be the standard
consumer offer in the coming months - AOL's connection is already
live, and BT will be introducing their faster speeds in March.
- Next,
don't get caught out by the capped download limits. These vary
from a maximum of 1 gigabyte to 15 gigabytes per month. The lower
limit is probably enough if you use the Internet for an hour or
so a day, but if you need to download video or audio files, consider
buying a more generous package.
- Look
at what free extras the providers offer. Some will scan all your
e-mails with anti-virus software before they arrive, while some
offer a firewall to help reduce the risk posed by hackers. Technical
support can be useful, and some packages offer it free of charge.
- If
you use the Internet a lot, and need a very fast connection, there
are numerous business connections available, and prices are falling.
Satellite and cable connections are an option for businesses with
a larger monthly budget.
To
find out what's available in your area, Broadband Checker allows you to enter your postcode and
choose between all the consumer packages according to price and
speed.
And
check out this comparison chart, which looks at the current offers
from a dozen of the best-known providers.
New business
idea
Each week
we provide you with summaries of some popular or emerging business
ideas in the UK.
Here
is this week's idea:
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 'litigious' means?
a)
controversial
b) disputable in a court of law
c) defamatory
d) guilty of breaking the law
Answer
at the end of the Bulletin.
Did
you know?
Food
retailers hit by Sudan 1 scare
The
Food Standards Agency (FSA) has issued a recall of over 400 food
products after it was discovered that they had been contaminated
by an illegal dye used in food colouring, Sudan 1. Retailers stocking
the products must withdraw them from sale, but small, independent
retailers say that they are having problems getting help and advice
on what to do. Thankfully, the Association of Convenience Stores
has produced practical guidance for retailers, including a downloadable
notice to explain the product recall to customers.
The
FSA has produced a list detailing the food products affected.
Worth
a visit
The
Food Standards Agency website
With
the Sudan 1 food scare dominating the news for small food retailers,
we thought we'd take a closer look at the website of the Government
body responsible for food regulations, the Food Standards Agency. We've reviewed the site in terms
of four key elements: navigation, accessibility, content and relevance.
For each aspect, we've awarded the site marks out of five.
- Navigation
- it's not perfect, and the green menu at the left-hand side of
the homepage could be a bit more appealing. But if you have a
vague idea what you're looking for, such as a specific publication
or guidance about a piece of law, the content is fairly easy to
find.
 
- Accessibility
- the website features a page detailing the access keys needed
to use the site, for users who have difficulty pointing a mouse.
It gives instructions for different versions of the Internet Explorer
browser, and would have scored more highly if it also provided
instructions for users of alternative browsers such as Firefox
and Safari. However, the site does provide a download of Adobe
Acrobat so that users can access PDF files, and also provides
a link to Adobe's plug-in for visually impaired users. And a point
is scored for providing translations of the website content in
nine minority languages.
- Content
- we can't fault the content of this site. It's practical, easy
to read and comprehensive, with plenty of factsheets, publications
and guides to explain how the theory behind food law is put into
practice. The site also offers interactive tools that make visiting it a more enjoyable
experience, including games and quizzes that manage to be entertaining
as well as informative.
- Relevance
- unlike many Government sites, the FSA does manage to keep its
content up to date. And important news stories, such as product
recalls and scares, go up on the homepage, as well as in the news section, to ensure
maximum visibility.
So,
a total score of 16 out of 20. The FSA also gets a bonus point for
providing a practical resource for new catering businesses at http://cleanup.food.gov.uk. This offshoot of the main site
offers practical factsheets, FAQs and tips for catering businesses
on issues such as cooking, storing, chilling, cleaning and catering
outdoors.
Our
rating - 17/20.
Who's
linking to you?
Google's
Neighborsearch is a great little resource that allows you to
search for all the websites that link to a webpage of your choice,
and which also include a specified keyword. This is extremely useful
if you want to narrow down specific, relevant link partners or affiliates
in your chosen niche.
Are
you an innovative mother?
The Times is running a competition for innovative mothers,
with the top prize being a patent application, drafted, organised
and paid for by the newspaper. The initiative is inspired by a US
firm which helps mothers to make their innovative ideas become real
businesses. Ideas must help make parents' lives easier, and entrants
must be mothers with children aged under 18.
Worth
a read
A fascinating
read for anyone involved in retail, this book exposes the power
of the supermarkets over the retail industry, its suppliers and
customers. It explores how supermarkets exert such influence over
consumers, looking at the marketing tactics used, and provides illuminating
analysis of the process involved in shopping for food. Check out:
Just
one word answer
The answer is a) and b).
Litigious
has two meanings - a litigious matter can either be one which
is worthy of being taken to court, or something which is controversial
and contentious.
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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.
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