MicroFinance Tips for Small Business

As StartUp Britain’s Finance Week rolled into its fifth and final day, Club Workspace were very pleased to have a man in the room for the 'MicroFinance' panel.

What is MicroFinance?

When a startup starts up, it may not be looking for a huge cheque. Not every startup is looking for that VC-sized, million-pound investment. A young startup may require a sum in the hundreds and thousands, rather than amounts equivocal to Premier League transfer fees. This is where microfinancing enters the fray.

We went along to Startup Britain’s MicroFinancing panel event to hear four experts speak about different ways by which UK startups could boost to their fledgling finances. The panel was chaired by Emma Jones, Founder of Enterprise Nation and cofounder of StartUp Britain.

The Experts

Russell Gould is from Wonga, the short term loan specialists. He explained that Errol Damelin, Wonga’s CEO, considers the business to be placed in the 'tech' sector, rather than in the 'finance' scene. According to Errol, Wonga’s primary aim is to disrupt the money-lending marketplace.

Russell made it explicit that Wonga’s loans were quick-fixes, not long term finance solutions. Wonga realises that cashflow can cause a lot of small business heartache. That’s why they have engineered short-term loan-packages for startups and SMEs. These small injections of cash can alleviate the pressure of small business financial-management.

However, Russell made it clear that Wonga’s loans are for the short term. It is true that the interest on a Wonga business loan can reach 104% in a calendar year, however if the loan is payed back within a week, the interest will be capped at a more manageable 0.5-2%. Perfect, Russell argues, for an entrepreneur riding a cashflow hump.

Ginny Lunn, from The Prince’s Trust, spoke next. She explained that the Prince’s Trust offers Startup Loans to young people. These loans come hand-in-hand with a business mentor. Another stipulation is that the recipient of the loan must be unemployed.

Ginny explained that the loan, usually around £2,500, comes directly from the Prince’s Trust. This is good news as there are no complicated tie-ins with banks. Ginny offered this stat: 85% of the startups who receive the 85% startup loan succeed. That is a n industry defying percentage!

A heartwarming fact rounded off Ginny’s intro: the Prince’s Trust recently received a charitable donation of £250k from a business that it helped start with a startup loan!

Stu Anderson spoke next, on behalf of Shell Livewire UK. Stu divulged that Shell Livewire’s monthly competitions give away four bundles of £1k to young businesspeople. These competitions are judged mostly by an expert panel. Even though part of the decision-making-process is given-over to a public vote, the judges are the real decision-makers.

It is the expert judges that give the Shell competitions their real prestige. Feedback from five industry giants can’t be sniffed at! Furthermore, due to the involvement of the experts and the leverage of Shell’s brand-name, winners of the £1k bundles are well positioned for PR activity on local and national levels after their win!

Erika Watson from Prowess 2.0 was next on the mic. Erika spoke about CDFI Loans. She explained that CDFI loans usually amass an interest rate of 17-30%.

Erika explained that it is nigh-on impossible for microbusinesses to successfully pitch for corporate contracts. She preached the benefits of partnering with other organisations in order to ascertain larger contracts.

The Audience

In addition to Russell, Ginny, Stu, Erika and Emma, the other expert contributor to the day’s proceedings was the audience.

A bone of contention for many thirty-somethings in the audience was this: there are plenty of incentivisation schemes for young people and for the ever-growing silverpreneur community, but there is very little on offer for the inbetweeners who form the vast majority. Do you know of any financial boosters that are open to entrepreneurs of all ages?

Another sticky-wicket was that to be a recipient of the Prince’s Trust’s funding, you have to be unemployed. This was deemed 'unfair' by many entrepreneurs who felt that it is necessary to maintain self-employed status before starting-up. It was argued that without an income, it would be impossible to meet event the most meagre living costs.

Emma Jones also offered another alternative to the four options offered by the representatives from Wonga, TPT, Shell and Prowess 2.0: Credit Cards! If all a business requires is a short-term monetary tonic whilst their finances whir into action, simply using a credit card can provide this fiscal respite.

Thank You

Thank you again to the excellent Startup Britain team for hosting the event, and to the four expert speakers.

5 ways to revitalise your business post-recession

Many aspiring business start-ups and entrepreneurs work long hours each and every day to get their business off the ground – some succeed and some unfortunately fail.

To make your business stand out from the crowd post-recession you must consider ways to help distinguish your company from its competitors and take it to the next level.

Ascertain short and long term objectives

If you are looking to revitalise your business and breathe new life into it at all levels then your first priority should be to understand the strengths and weaknesses of your business as it stands today. Once you are clear on the areas your company needs to improve it is easier to implement short and long term objectives to action positive changes.

Ultimately the toughest challenge for any small business is to have the right management in place to focus on the fundamentals, from human resources and client management to logistics, production and more.

Focus on adding value to your customer’s lives

Although the importance of a balance sheet should not be underestimated businesses should also focus on adding value to their customer’s lives. Whether it’s an excellent service or a welcome product, a high quality customer experience is directly proportional to an increase in sales. Don’t be afraid of being creative; in a free enterprise environment this is what makes the world go round!

Improve customer relations

Customer loyalty is very important in a tough buyer’s market. If you are rebuilding or even creating customer loyalty from scratch the influence of social media marketing has grown considerably in recent years.

Re-evaluate your marketing initiatives and consider a targeted social networking campaign to properly inform existing and potential customers about your services. Facebook pages and Twitter accounts are a great way of offering exclusive deals and sales to loyal customers over the web, as well as offering up-to-the-minute customer service.

Network with other businesses

Any small business owner should aim to be pro-active with other businesses in order to increase brand awareness, buying power and enhance their contacts book. Don’t be afraid to get out there and network at local and national events and even get involved with communities where local businesses within the same sector share ideas and discuss the present and the future.

In terms of strategy, these networking events may also open your eyes to new concepts you may not have previously considered for your business.

Most importantly – have fun!

If you are looking to add colour and vibrancy to your business post-recession it is important to have a fun, open relationship with customers. Not only does a more laid-back approach make work more enjoyable for employees, it strengthens the bond with customers.

Running your own business is supposed to be enjoyable and when you lose sight of this it can only impact negatively on your business. Encourage laughter, creativity and insight within your organisation, ensuring a working environment that is not only productive, but one that entices new customers, generating bigger and better profit margins.

More New Business Guides

What attributes do you need to start a business
Sources of financing for start-ups
Five things to consider before starting your business

How Soho can help your small business expand

This famous, multicultural corner of London’s West End is one of the most vibrant areas to do business in the capital. For small businesses looking to land and expand in London, Soho is equally renowned for its industry, commerce and culture as well as its range of bars and restaurants.

One of the most attractive features of locating your business in Soho is that it is easily accessible without commanding the higher commercial property prices of inner-city London. Surrounded by a host of popular tube stations, most notably Covent Garden, Oxford Circus, Piccadilly Circus and Leicester Square, Soho has its finger firmly on the pulse of London’s entertainment and cultural heartbeat.

Although Soho remains predominantly an entertainment district this fashionable area has also become home to new media and IT industries. New media companies quickly feel at home in Soho. Following the diversification of the media makeup all manner of industries from publishing and fashion to film and post-production are welcome within the district.

The area remains in the midst of modernisation and there are numerous upgrades afoot to the district’s Wi-Fi networks and campaigns to accelerate social and cultural development throughout Soho.

Archer Street Studios 

Nestled in the heart of the hip Soho district, Archer Street Studios is now home to an eclectic mix of innovative businesses. Just moments from Shaftesbury Avenue, the traditional home of London’s theatre-land, these trendy, contemporary office and studio spaces are guaranteed to impress new and existing clients.

Hatton Square Business Centre 

A stone’s throw from London’s thriving West End, Hatton Square Business Centre lies within the capital’s legal district and infamous jewellery quarter, Hatton Garden. The centre benefits from strong transport links via the London Underground with Holborn, Chancery Lane and Farringdon stations each within walking distance. The building’s bright office and workshop space opens the door to a wide array of potential industries.

Quality Court

This striking period building with hi-tech interior is ideally located to offer access to both the City and the entertainment and media heartland of Soho and the West End. Quality Court offers a host of serviced office units with options available at present for tenants wishing to rent up to 8 workstations. The building is just 100 metres from Chancery Lane’s underground station and is a further 10 minute walk from Liverpool Street, Farringdon and Holborn.

Now is a great time to rent office space in Soho. At Workspace Group we provide office space in and around the Soho area at competitive prices.

More London Area Business Guides

Commercial property to let near the Olympic site
Advantages of property in Central London
Office space near Kings Cross

Image: Tom Curtis / FreeDigitalPhotos.net

20 things to consider when planning a business start-up (Part Two)

Following on from part one of our 20 things to consider when planning a business start-up, read the final section of our top tips for entrepreneurs and SMEs below.

Building a contacts book

If you want your new business to get noticed in the right circles it is important to make an effort to contact owners and CEO’s of businesses complimentary to your own. Show an interest in their business development and pick the brains of those trusted within your industry. Whenever you receive contact information from a respective owner be sure to keep in contact and develop a solid working relationship that may blossom in months and years to come.

Focusing on cash flow rather than profit

In terms of developing a successful business profit is the first thing on the mind of any entrepreneur’s mind. However, in terms of long term growth it is far better to focus the mind on cash flow; particularly in the early stages of your company when sufficient funds will be essential to expanding areas of the business.

Controlling stock

Overspending on stock in the critical early stages of your business start-up could put paid to your dreams before they’ve even got off the ground. Consequently, effective stock management is required dependant on your company and the industry in which you operate. Many businesses choose to implement inventory software which gives owners full control over stock and supplies at the touch of a button.

The art of delegation

It is important to have a clear idea in your mind of how to delegate business responsibilities between individuals and departments in order to tackle projects and contracts with suitable resource.

Marketing your business

It is important that your business is suitably marketed both online and offline. Design or outsource your requirements for a website, ensuring the site adequately portrays the image of your brand whilst advertising the services you provide without confusing jargon. Offline PR campaigns may also be considered in order to receive interest in local and national newspapers.

Embracing social media

The influence of Facebook and Twitter on fledgling businesses looking to enhance their brand cannot be underestimated. With the ability to build a Twitter following – effectively a list of subscribers to your brand – and create a Facebook page keeping current and potential clients abreast of your latest news and deals, you can now spread the word about your business quicker than ever before.

Managing recruitment & HR

Planning and executing recruitment campaigns are crucial to expanding your business and recruiting employees with the knowledge and drive to push your organisation forward. HR is similarly important, keeping existing employees up-to-date throughout every aspect of the employee lifecycle. This may include personal training and development as well as company social activities.

Dealing with setbacks

Don’t be afraid to receive setbacks when getting your business start-up off the ground. Whether you’ve been gazumped tendering for a contract or potential investment goes cold, the success of your new business will be determined by how well you deal with knockbacks, dust yourself down and focus on the next big challenge.

Small business grants

Financial aid is at hand with government-sponsored grants available providing SMEs with an initial lump sum to be competitive in the market. In most cases small business grants do not need to be repaid, making them extremely attractive to new businesses. There is however stringent eligibility criteria to consider before application.

Copyright, patents & trademarks

Copyright protection is incredibly important to safeguard any literary, dramatic or artistic work created for your business. Patents also come under the umbrella of ‘intellectual property’ and protect the commercial potential of any inventions for a set period of time. Similarly, trademarks are also granted to safeguard intangible assets such as branding that could so easily be stolen by third parties.