RESOURCE CENTRE

Your EnterQuest Bulletin - 27 April 2005

In this week's issue:

• more small business success secrets your adviser forgot to tell you
• understanding different types of media releases
• do you need a consumer credit licence?
• online payments - what are the options for small businesses?
• The Department for Work and Pensions 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

More small business success secrets your adviser forgot to tell you

There's an expression you may have heard that's quite often applied to small business start ups (of American origin we believe) that goes something like this:

"Every successful enterprise requires three types of people - a dreamer, a businessman and a son-of-a-b*tch."

Regardless of the origins of the quote, this applies as much to small businesses in the UK as it does anywhere else in the world.

Why? Because it's a hard and statistically proven fact that the vast majority of enterprises that are started by people with no experience of running a business, and by people who don't know what to do, will go on to fail. While for businesses that are started by people who have experience and know what to do, there is an 80% chance of success.

If you're a start up team, the chances are you might well have the right combination of attributes, with a visionary dreamer and a hard-nosed, who-dares-wins SOB who fears nothing, alongside someone who actually knows how to run a business properly.

Single person start ups also have the ability to succeed if they have the right combination of the three types of characteristics. But what if they don't have the experience and know-how to run a business? Will these people fail? The answer is probably yes. Unless, of course, they learn how to do it, learn from their experiences, and from their mistakes and failures.

Success doesn't happen as a result of random events. There is no luck involved.

Success involves structure and discipline. To be successful in business, you have to know what to do, how to do it, and exactly when to do it. And make sure that it happens.

Right, that's enough of the pontificating, what about a few tips to help you learn and recognise some of the secrets and factors that will help increase your chances of small business success? Here are eight habits common to successful small business owners.

1)	Successful entrepreneurs see the path, not just the destination. What this means is that it's important to focus on how you will get there, rather than just on where you want to be. After all, your journey, your enterprise quest, will change many times, that's for sure.
2)	They focus their efforts and energy only into what they are good at, or extremely good at. And if they aren't good at something, they find someone else who is.
3)	They learn from others. They network with people like themselves, and track down and find out how to do things from the very best that there is.
4)	They know who their customers are and exactly what they want.
5)	They thoroughly plan and prepare everything that they do. Remember what we've told you in this newsletter many times before - failing to plan is planning to fail.
6)	They seek feedback all the time from their customers, suppliers, advisers, employees and business partners. Then they follow their gut and act upon it.
7)	They overflow with enthusiasm and passion for what they are doing. They want to try and change the world. Their own world and their customers' world.
8)	They have immense self-discipline. Remember what we said earlier. Success doesn't happen at random - it needs structure.

That's enough to get you thinking about yourself and your team this week.

Marketing tip

Understanding different types of media releases

In previous tips, we've looked at how to write an effective media release, but it's also important to understand the different types and styles of releases to choose from before deciding which is most appropriate for your situation.

Do you know the difference between the following?

a) a press release
b) a news release
c) a media alert

These are all different types of media release, and should all contain slightly different information and be written in a unique style.

A press release is a way of telling journalists about something that has happened to your business, such as winning a major contract or award. It should be simple, clear and hard-hitting, including information presented in a "who, what, when, where, why and how" format.

Often confused with press releases, a news release is, in basic terms, something that carries more general news that may be of interest to journalists. It may be your business' opinion about something topical or newsworthy, or the presentation of some research you have done which is relevant to your sector. Again, the journalistic approach of "who, what, when, where, why and how" should apply and the wording should be to the point and concise.

A media alert is a more simple way of getting a snippet of news to the attention of journalists. It's essentially a short memo from your business to provide an alert about something interesting or relevant coming up in your diary - a business event, exhibition or publicity campaign are good examples. The idea of the media alert is to tell the journalist in just a few words what is happening, hooking their interest enough that they will follow up with a request for more detailed information.

There are more practical guidelines on writing media releases from Publicity Insider magazine.

Read more about creating effective media releases in the UK Small Business Marketing Bible, which contains a special report entitled 'Free publicity secrets: how to get the media to call, visit and beg for your story'.

Legal tip

Do you need a consumer credit licence?

Offering credit to customers is something many small businesses consider, whether it takes the form of a long-term contract or simply allows people to settle their bills at the end of the month. But offering credit to consumers is heavily regulated, and some credit providers must hold a consumer credit licence issued by the Office of Fair Trading (OFT).

Licences are currently £110 each for sole traders and £275 for partnerships and limited companies, so before going ahead and applying, it will be worth checking whether your business actually needs one.

You may need a licence if you offer credit terms to individual consumers, sole traders, partnerships or any other unincorporated business. If you plan to offer credit to limited companies, you don't need a licence.

In addition, you'll need a licence if you:

• Hire or lease out goods to individuals for more than three months.
  
  
• Lend money to individuals.
  
  
• Arrange credit for individuals.
  
  
• Offer hire purchase arrangements to individuals.

This list doesn't cover the multitude of activities which businesses like lenders and credit card aggregators are involved in, but it should give you an idea of the basic rules.

On the other hand, you won't need a credit licence if you send out a bill at the end of the month, as newsagents or some food delivery services do, for example.

And you won't need to apply for a licence if you allow your customers to pay by four or fewer instalments during a single year.

The law governing all this is the 1974 Consumer Credit Act (as amended 2004). If you think you might need a licence, there's a useful OFT guide about how to apply, and the Department of Trade and Industry (DTI) offers a summary of potential reforms to the Act which are in the pipeline.

And the UK Red Tape BUSTER has scenarios and factsheets explaining all types of credit, as well as checklists and summaries of legislation covering almost every small business situation.

IT tip

Online payments - what are the options for small businesses?

Allowing your customers to order and pay online is one of the great advantages of having a business website. It can help you increase your customer base and spread your business outside your local region, even into Europe and further afield.

So how should you go about arranging a system that lets customers pay for goods on your website? To accept credit and debit card payments, you'll need to start by arranging a merchant account with your bank, but as the last option below shows, that's not necessarily essential. You have three main options, and each has its advantages and disadvantages.

• Option 1 - Using an online payment transfer service run by one of the banks
  
  This is a very common way for small businesses to accept payments. Two of the largest such services are WorldPay and PayPal. They offer an online business many different options, and are very reliable. By using a well known name you can reassure your customers that the transaction will be handled securely.
  
  The downside, of course, is that they may charge set-up fees and a percentage fee for every transaction and, depending on the provider, the money may not be available immediately.

• Option 2 - Running your own online payment facility
  
  There are two ways of arranging this. The first is to choose one of the premium services mentioned in option 1 above. This will ensure instant payment, and may make the process faster for the customer and your website appear more professional. The second is to take credit or debit card details via your website and carry out the transaction yourself afterwards, using the traditional merchant account with your existing bank.
  
  
• Option 3 - Putting your phone number on your website
  
  Instead of offering payment facilities online, you can take orders by post, or over the phone. This is a useful solution if your customers are mistrustful of paying online.

Once you've set up an online payment system, you will need to think about how you can expand and improve it so that it fits in with your business strategy. The DTI offers a number of factsheets about this. And there's a step-by-step guide to numerous other aspects of e-commerce if you follow this link.

New business idea

Here is this week's idea:

• Cereal/breakfast 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 a 'social enterprise' is?

a) a charity which generates sales revenue
b) a business run as a hobby, in addition to a full-time job
c) a business set up by a group of friends or neighbours
d) a not-for-profit business with primarily social objectives

Answer at the end of the Bulletin.

Website review

The Department for Work and Pensions (www.dwp.gov.uk)

An essential point of reference for any business that employs staff or operates a pension scheme, the Department for Work and Pensions (DWP) also provides information about avoiding discrimination and hiring workers through Jobcentre Plus. But how effective is its website?

• Navigation - the homepage is clearly set out and signposted for business owners looking for the sections most relevant to them. News is prominent, colours and images work well, and the layout of the individual sections of the site is also clear and appealing.
  
  
  

• Accessibility - there is an impressive array of accessibility options for people using different browsers, people wanting text only rather than HTML, and people with visual impairments who may wish to alter the size or colour of the text. You can also download a range of accessibility tools directly from Adobe in order to read the PDFs on the site. Oh, and key information is available in nine different languages.
  
  
  
  
• Content - the content of the site doesn't always go into enough detail in places, although there are plenty of useful links that transport you to more comprehensive information. For example, the sections for businesses about disability discrimination law and pensions are both populated with some useful suggestions and dozens of relevant links.
  
  
  
  
• Relevance - the homepage includes an announcement about the lack of government news and legal briefings as a result of the current election campaigning. However, the press releases site is well populated and there are also several relevant new factsheets and reports.
  
  

A strong score of 16 for the DWP - and the impressive range of accessibility options should serve as a benchmark for other Government websites to reach.

Our rating - 16/20

Did you know?

Businesses apparently confused about election (yawn)

With just over a week to go before the general election, UK businesses just don't know who to vote for. Business representatives and lobby groups say this is because firms are generally confused about the policies of the three main parties and are having difficulty deciding who stands for what. In a MORI poll, 90% of business directors believed that Labour would increase business taxes if re-elected, but 58% praised Gordon Brown as the best choice for Chancellor, while 51% said they would vote Conservative.

The Sober worm is back

Anti-virus firm F-Secure is warning businesses that tens of thousands of e-mails containing a new variant of the Sober worm are on the loose in cyberspace. There are two versions of the new Sober.N virus, one in English and one in German. Both versions arrive with an infected zip file attached. Luckily F-Secure provides advice about what the e-mails look like, along with removal instructions if you are unlucky enough to get infected.

Worth a visit

Tips on credit checking customers

Research by the Better Payment Practice Group (BPPG) shows that two-fifths of small businesses offer credit to new trade customers without carrying out credit checks first, and almost half agree terms with new customers automatically. So the BPPG has created a new section on its website to offer useful tips on finding credit information, reducing risks, how much credit to allow and collecting the cash.

Fresh guidance on e-marketing

The International Chamber of Commerce (ICC) has updated its excellent practical guidance on marketing and advertising using electronic media. The new guidance covers marketing via the Internet, text messaging, e-mail, phone, digital radio and TV, covering issues like being responsible when advertising to children, collecting data according to the letter of the law, and avoiding spamming.

Spider simulator

This useful tool is called the Search Engine Spider Simulator. You type in the URL of the website you want to check, and it reveals exactly what a typical search engine spider would see when it visits your page, in terms of the text and links it picks up.

Worth a read

This is a useful reference tool for anyone who regularly uses the Internet but is less than confident about their grasp of techie jargon. It defines and explains common terms used in basic business and personal computing, covering common shorthand, typical office phrases, emoticons (smiley faces and other 'emotional' icons) and explanations of future technologies. It also explains file suffixes (such as .doc and .xls) and country codes for domain name suffixes. 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.