RESOURCE CENTRE

Your EnterQuest Bulletin - 25 January 2006

In this week's issue:

• More reasons for not starting up a small business
• Warming up cold calling
• The last, last chance to submit your self-assessment form
• Hints on creating readable documents
• The Computer Weekly website reviewed

Small business answers

If you have any questions about your business idea or target market, or need help tracking down a grant, subsidy or 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.

To access over 800 factsheets, guides and small business reports, go to www.scavenger.net.

Weekly stir

More reasons for not starting up a small business

The fact that so many small businesses fail so quickly after starting up isn't a reason not to start your own venture. But it's a very good reason to be absolutely sure that you're starting up for the right reasons, and with the right outlook.

Reports and statistics about business failure rates vary quite widely. The variations are probably due to the fact that it's not always clear when someone has failed (especially a sole trader) and actually ceased trading, so the figures are quite fluid.

Banks and accountants, being risk averse, will report that failures are inevitable and a reason to be cautious. But Government departments and ministers, desperate for votes and column inches, will grin like idiots on the front pages of the business press urging everyone aged between 14 and 114 to start up without further ado.

The reality is that small business failure tends be quick (within months or even weeks), especially for those ventures where all the start up ingredients are wrong. And although success rates improve over time, significant numbers will no longer be in business three to four years after they started.

Without being too scientific about this, it's probably a fair assumption that new start ups with at least a basic smattering of nous and experience will have a 50/50 chance of still being in business after three years. However, survival chances will be significantly higher for those people who know a bit more about what they're doing when they first start up, and are doing so for the right reasons.

Here's our quick guide to reasons why people start a business when they shouldn't, and often lose everything as a result.

1) You believe you'll no longer need to answer to anyone else.

While it's true that being self-employed or a small business owner means you can 'be your own boss', there are lots of people who'll not just be interested in what you're doing, but there'll also be a legal obligation for you to deal with them. The tax man, your local authority, your bank manager and the Information Commissioner, to name but a few, are all people you will personally have to 'answer' to. If you don't, you'll be in trouble - legally.

2) Someone told you it was easy to start up and succeed.

If you hadn't personally considered starting a business and haven't got the confidence, desire and experience to succeed in running a small enterprise, you need to tread very carefully indeed. Well-intentioned or otherwise, beware of the enterprise 'frenzy' and all those that promote it. 

3) You think you'll have more time for yourself and your family.

Unfortunately this is not going to be the case, especially in the first year or two. Starting a business, and even doing the preparation for starting up, will eat into your life more than you could ever realise. Investigating every last aspect of your market, thorough preparation and continual planning before you even get started are absolute requirements. No pain, no gain, as they say.

4) You think you'll get rich.

While there are examples of people who make their millions from their own businesses, these are without doubt the exceptions. Starting a business and running it effectively and profitably can certainly bring you financial independence if you achieve a moderate amount of success, and this should realistically be your aim.

5) You have a great idea.

Just about everyone who thinks about starting up will have an idea that they believe is good, or even great. In fact, it may well be the greatest idea that anyone has ever had. But is there a market for it, is it big enough, and do you have the selling and marketing skills to reach it and exploit it before someone else does the same thing? That's the key.

Start up failures are a fact and a reality of business life, and assuming odds of 50/50 for survival, you could give yourself a considerably better than even chance of surviving more than three years if you prepare yourself properly before you start, and stay prepared and focused with your feet planted firmly on the ground once you start trading.

Try reading our straight-talking factsheet, Could You Run Your Own Business, to assess the key skills and competences you'll need to have in place before starting up, or check out this guide to some of the other reasons why small businesses fail for more advice in this area.

Marketing tip

Warming up cold calling

Using the telephone to call potential customers can be daunting, and it's vitally important to understand the multitude of laws that surround this area of direct marketing as well as to build your confidence in dealing with potential customers on the phone.

The following resources provide some useful starting points for finding out about the pieces of law and best practice guides that apply to cold calling.

• The crucial regulation is that you must not contact a business or individual who has registered not to receive marketing calls. Check out the Telephone Preference Service (TPS) and the Corporate Telephone Preference Service (CTPS) for details about how to stay lawful.

• The Direct Marketing Association has an executive summary of a report into what consumers find most annoying about 'silent' calls, which also looks at the impact of the TPS and CTPS.

• The Institute of Direct Marketing offers 12 tips for getting the most out of cold calls, as well as a jargon buster for all the terminology used in telemarketing.

Finally, the UK Small Business Marketing Bible has more practical information about making effective sales calls in Chapter 16, and is jam-packed with hundreds more cheap, easy to implement ideas and techniques for promoting your business.

Legal tip

The last, last chance to submit your self-assessment form

HM Revenue and Customs (HMRC) has announced that most of its local offices will be open later than usual on Monday 30 and Tuesday 31 January, to allow for delivery of self-assessment forms until the last moment.

It has provided an Excel spreadsheet showing opening hours for all its offices; some will even stay open until 7.30 in the evening. If you don't have Excel, you can download a viewer for Excel files from the Microsoft website.

HMRC's self-assessment web pages explain in much more detail how the process works, and provide links to the process for submitting your return online.

Finally, the UK Red Tape Buster has tips, checklists and scenarios designed to clarify the self-assessment process, as well as guiding small business owners through hundreds of other red tape complications.

IT tip

Hints on creating readable documents

Readability can be the last thing anyone thinks about when they're writing an invoice, price list, brochure or letter. But using the formatting tools in your word-processing program to improve the visual appearance of your documents will make them look professional, and give your readers an easier time.

Here are a few suggestions for how to go about improving readability:

• Use an appropriate font. Unless you're trying to create a particular effect, avoid fonts with serifs such as Georgia and Times New Roman. Arial and Verdana have become the most commonly used fonts because they're the easiest to read on a computer screen.

• Space your lines generously. Research has shown that line spacing improves readability, particularly with smaller fonts (such as 10pt). You can increase line spacing in Word by selecting your text, clicking on 'Format' then 'Paragraph', and changing the spacing to 1.5 lines or more.

• Avoid coloured fonts wherever possible. Unless you're familiar with the rules on colour use followed by graphic designers, you should avoid using colours apart from black on a white (or light grey) background.

• Don't get bogged down in detail. Extra letter spacing (kerning), applied in moderation, can make text easier to read. Italics tend to make it harder.

The excellent W3Schools website offers many more hints on readability. And since readability is a subset of usability, keep an eye on the provocative Jakob Nielsen's website for more resources and tips.

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:

• Gaming Café

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 'ergo' means?

a) because of
b) forbidden or prohibited
c) therefore or consequently
d) in fact

Answer at the end of the Bulletin.

Website review

Computer Weekly (www.computerweekly.com)

One of the best-known trade magazines for the IT industry, this site is full of news and articles about viruses, software, trends and developments in IT. But how user-friendly and accessible is the website?

• Navigation and presentation - the homepage is clearly set out into areas for news, technology, reports and whitepapers, and practical seminars and tutorials. However, the whole thing is spoiled by an abundance of adverts - you can barely click on anything without an (often full-screen) ad popping up and distracting you.

• Accessibility - you can contact the site to ask about problems with accessibility, but there are no obvious options for things like adjusting text size, using a browser other than Internet Explorer, or receiving information in a foreign language. And the site makes use of images and Flash, making it particularly inaccessible for users with screen readers.

• Content and usefulness - there's no denying that this is one of the best places to keep absolutely up to date with emerging computer technology, virus threats and other IT news. Dozens of articles are added to the site daily, and it's also peppered with practical seminars on topics such as securing your business' IT systems.

• Relevance - a lot of the content is angled towards larger firms, but the security updates are relevant for all firms, and the site certainly keeps itself up to date with the latest news and views.

Half marks for Computer Weekly - this engaging news resource could be improved by having fewer intrusive ads, as well as by the addition of some more accessibility options.

Our rating - 10/20

Did you know?

You'll break your business resolutions in a month, says HSE

An opinion survey released recently by the Health and Safety Executive (HSE) reckons that the majority of business owners' resolutions to improve processes and practices made at the beginning of this year will be broken within a month. The study also showed that health and safety usually comes bottom of firms' lists of things to improve, with better financial systems, more effective marketing, staff training and improvements to IT systems all ranked more highly.

Online commerce is growing at a rate of knots

New findings from the Interactive Media in Retail Group (IMRG) provide further evidence of the huge boom in online shopping over Christmas. The IMRG's research shows that online shopping in the UK has grown by a whopping 2,600% since April 2000, climbing by 50% in the 10 weeks before Christmas last year alone. "Consumers have spoken," said IMRG. "They want the convenience and choice that online shopping provides."

Not long to go for Chip and PIN deadline

Small shop owners are reminded that from 14 February, all Chip and PIN cardholders must use their PIN number when making a purchase. Signing a receipt, which you can currently offer if a customer can't remember their PIN, will no longer be an option in an effort to reduce card fraud. Businesses need to be aware of the change, as well as of exceptions to the rule, which include disabled customers, those whose cards have not yet been upgraded to Chip and PIN, and overseas customers. The Association for Convenience Stores (ACS) is offering advice on its website, as is the Chip and PIN service itself.

Worth a visit

Test your DDA compliance online

The Nationwide Access Register, in partnership with the Royal Association for Disability and Rehabilitation (RADAR), has developed a new, free service to help small businesses meet their legal obligations under the Disability Discrimination Act (DDA) 1995. The free 'Access Assessment' service enables you to review your premises and facilities for accessibility to customers with disabilities, and to identify areas where you may need to make improvements.

Free or discounted marketing reports and lists

Marketing File is having a January sale, and is offering a number of free or heavily discounted marketing reports and customer lists via its website. Choose from discounted consumer and business lists for a number of areas and sectors, and check out the free reports on direct mail response rates during 2005.

Worth a read

Whether you need to write a business plan to raise finance for your venture or simply to explain your idea to yourself and your staff, this book offers practical, step-by-step advice on how to go about it. It explains how to tailor your plan for different readers and objectives, and is written in conversational, jargon-free language. 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.