Sage Going for Growth e-Book

The Sage Going for Growth e-Book is now yours to enjoy!

This e-Book contains information, insights and best practice guidance for aspiring growth businesses, including:

Part 1: Technology as an enabler

Harnessing the power of unified technology – Rob Davies, Sage UKI

Cloud computing jargon buster – Craig Sharp, Abussi Ltd

Mobile and flexible working – Steve Attwell, Sage UKI

Part 2: Power of People

Hiring the right talent – Jayne Archbold, Sage UKI

Mentoring – Brendan Flattery, Sage UKI

Part 3: Strategies for expansion

Future Proofing – John Chinery, K3FDS

The exporting opportunity – Jeremy Corner, Blue Eyed Sun

Marketing for expansion – Guy Blaskey, Founder Pooch & Mutt ltd

Alternative funding for growth – Frank Webster, Seedrs

Keeping your business in balance – Steve Attwell, Sage UKI

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Going for Growth

About this guideAt Sage, we’re passionate about giving businesses the confidence to succeed and grow. Our tools, insights and advice help firms to improve their business efficiency and make confident decisions. This guide is designed for anyone with an interest in unlocking future growth for their business.

Steve is Managing Director of Sage UK & Ireland’s Small and Medium Business Segment. He has been at Sage for 24 years, during which time he has held roles in support, R&D, sales, marketing and general management. Steve is passionate about the issues impacting growing businesses and how technology can help facilitate business transformation.

Jayne is CEO of Sage Mid-Market Europe and Chair of Sage ERP X3 Globally. She has been at Sage since 1997 and has held senior positions in all Sage UKI divisions. Prior to joining the Sage Mid-Market Europe, leading Strategy and Corporate Communications, Jayne held the position of Managing Director for Sage Mid-Market in UKI.

John Chinery is a Product Manager with independent software reseller K3FDS and is an expert in designing and delivering ERP, CRM and BI systems for small and medium sized businesses.

Steve Attwell

Jayne Archbold

John Chinery

About the authors:

Going for Growth

Brendan is the CEO of Sage UK & Ireland. He joined Sage in 2003 and has been Managing Director for the Accountants Division, Mid-Market Division and Small Business Division. Brendan is a qualified chartered accountant and worked in commercial roles at a number of public and privately owned companies in a variety of industries prior to joining Sage.

Brendan Flattery

Going for Growth

Rob is Head of Technology for Sage UK & Ireland’s Small and Medium Business Segment and has over 22 years of experience in B2B software development and technology.

Craig is the owner of Abussi Ltd, a West Midlands based IT Managed Service Provider. He helps companies gain maximum benefit from any IT investment while providing a professional support service to resolve any day-to-day issues.

Frank is a lawyer who began his career in London with Jones Day, moving on to the London office of Kirkland & Ellis where he practised in the firm’s international private equity practice. More recently, he spent two years managing RollOnFriday, a leading legal news and community website before joining Seedrs as Senior Investment Associate in 2012.

Rob Davis

Craig Sharp

Frank Webster

Jeremy is the owner of the award winning greeting card publisher Blue Eyed Sun and wedding stationery specialists, Ivy Ellen. He’s a monthly columnist for Progressive Greetings magazine, which also lists Jeremy as a top 50 Influencer in the greeting card industry. Jeremy is a Sage Business Expert and sits on the Giftware Association’s National Committee. He is also Treasurer of the Greeting Card Association.

Jeremy Corner

Guy is founder of dog nutrition brand Pooch & Mutt. Pooch & Mutt is today one of the fastest growing brands in the pet industry, stocked in the UK’s best vets, pet shop and supermarket and sold around the world from the USA to Hong Kong. In 2014 the company won Gold at the European Design Awards, the SMARTA Made in Britain Award, and was a finalist in The Grocer New Products Awards. Guy also won Manufacturing Entrepreneur of The Year at the GB Entreprneur Awards.

Guy Blaskey

Going for Growth

Sage 200 is a full Enterprise Resource Planning (ERP) solution and helps Small and Medium-sized Enterprises (SMEs) get full visibility of information across their entire business. You can choose the modules and features that are right for your business and it’s fully customisable, so you can match the solution to the way your business works.

It manages finances, customers and business insight in one solution giving small and growing firms like yours full visibility of information across the entire business. It allows you to control a host of business processes, from accounts to stock and warehouse requirements, within one integrated solution. Choose the modules and features that are right for your business for a fully customised solution.

With a choice of online or installed on premise software, there’s even more flexibility about how you use, roll out and pay for your software. Sage 200 Online is our cloud-based accounting solution for growing companies. Developed on the Microsoft Windows Azure platform, Sage 200 Online offers SMEs the next generation of business technology, which is fully compliant with industry standards and continuously managed and monitored with 24-hour availability support.

About Sage 200

Since 1981, Sage (UK) Limited has been at the heart of the British economy and over 800,000 customers currently use our software to run their business. We are committed to helping businesses of all sizes succeed and prosper.

To find out more about Sage 200 and how it can help your business grow visit www.sage.co.uk/sage200 or call us on 0845 111 9988 and quote #goingforgrowth.

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UK small business confidence is at a four year high.By Steve Attwell, Managing Director, Sage UK and Ireland’s Small & Medium Business Segment

Foreword

Going for Growth

According to Sage’s 2014 Business Index, which surveys close to close to 14,000 small and medium sized businesses around the world, more than one in four UK businesses have set the target of 10% growth or more in the next year. On top of this, over one in ten are targeting 15% growth or more in the same period and nearly half of firms are planning to hire new staff.

These statistics underline the growth ambitions of small and medium-sized firms, demonstrating growth is firmly on the agenda. As the economy warms up, there has never been a better time for businesses to take advantage of the opportunities this brings and firms are right to be setting their sights on new strategies for unlocking growth.

But as a business grows so does its complexity, and there are a number of common growing pains medium-sized and growing businesses need to overcome as they evolve.

Managing supply chains, expansion and embracing the hyper-connected world are just some of the factors that can impact a company’s productivity and profit, and ultimately have a bearing on their prospects for future success.

At Sage we work with more than 800,000 businesses in the UK of all shapes and sizes.It is our goal to give businesses across the country the confidence to succeed, along with the tools, solutions and guidance required to unlock growth. This is why we have produced this Going for Growth e-book.

Over the next ten chapters we look to address some of the biggest challenges fast growing businesses face, as well as highlight some of the most important strategies to unlock growth in your organisation.

Alongside advice and guidance from Sage, a number of chapters have been co-authored by leading business experts, and by fellow growing businesses who relay their own experiences and best practice first-hand.

We are also encouraging business owners to share their experiences – and together we can help businesses in Britain achieve these ambitious growth goals.

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Regionally, the North East is showing thegreatest gains compared to a year ago,recording a confidence score of +44,compared to -7 in Q3 2013.

The South East remains the most confidentregion overall, registering a score of +52.

Three fifths of businessesare expecting to grow inthe next 12 months.

ONE IN TENexpects to grow rapidly.

Faith in the future

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The UK’s SMEs are looking forward to a future filled with growth.Throughout all sectors of business, there’s a positive feeling about the coming months...

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61% of firms expect to grow

The financial sector ranked as the most confident about its place in the future, with a score of +62, but the sectors thatwitnessed the most improvement were the health andsocial spheres and the hospitality industry.

A third of businesses expect their turnoverto grow in the next quarter and almost afifth (17%) expect profits to rise.

We’ve helped over 800,000 businessesof all sizes for over 30 years with market-leading accounts

software to manage finances, customers and more.

Widespread Confidence

ONE THIRD (33%)

Source: FSB News Release, PR 32 2014, Monday 15 September 2014

Effective use of technology lies at the heart of successful business growth strategies.

Many small and medium-sized companies have been able to use cloud-based technologies to give them capabilities that were previously the preserve of large corporations with big IT budgets, while others are leveraging mobile technologies and big data to boost the productivity of their employees and access new customers and markets.

By pre-empting rapid growth you can actually put the systems in place to help you manage surges in demand and growing complexities. Technology can also be used to move your business into the next gear. Whether that is by allowing a more flexible way of working for your employees, or by being able to manage your business online and on the move – arming employees with the right tools and infrastructure is fundamental to achieving sustainable growth.

Going for Growth

Part 1: Technology as an enabler

Unity, harmony, technology: Harnessing the power of unified IT for business growth

As a small business owner, you will no doubt pride yourself on knowing your industry inside out. Knowledge and insight are the key ingredients of effective business decision-making, in any industry, at any level. But how do you compete in a market where you’re up against large, resource-rich competitors with the same levels of insight? By becoming agile.

The ability to respond quickly to any business opportunity is key, and those companies that aren’t able to move fast could miss out on chances that could have a significant impact on the bottom line. Smaller organisations have the advantage here, as they’re more readily able to out-manoeuvre their larger rivals. However, this agility is underpinned by having access to the right information at the right time, and this means unifying and updating your IT so that it works in harmony.

Pockets of insight

Having added new software and systems as and when the need arises, growing firms often have several different products looking after various aspects of a business – dedicated pieces of software that provide insight into specific areas. While these tools may well be useful, as the business continues to grow you’ll find that you’re creating separate pockets of information. There will be siloes in different areas of your business, each containing useful insight, and you may even be entering the same information in more than one place. An unnecessary waste of time and resources.

Some companies talk about Enterprise Resource Planning (ERP), others refer to integrated business management - what they mean is unifying and simplifying your IT so it works to your advantage. As a business grows, the complexity and number of systems in place as well as the volume of data involved, will only increase. Investing in the right system early on means that your business will have a ‘backbone’, optimising processes and ensuring your business remains agile as you grow.

Going for Growth

By Rob Davis, Head of Technology, Sage UK and Ireland’s Small & Medium Business Segment

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The benefits for small and growing businesses:

• Conserving resources – with one system unifying your entire business lifecycle and automating complex business processes, your staff won’t need to spend as much time entering information or matching up insights from different systems. This then means that they’re able to spend their time on more impactful, revenue-generating activity

• Deeper insight, quicker – as your business information now lives within one system, you and your staff will be able to more readily identify trends in areas such as customer purchasing cycles. Using this insight you’ll then be able to proactively adapt your business strategy to make it as effective as possible

• Better customer service – straightforward insight into client information will allow your sales team to provide better service to existing and potential customers. If you’ve invested in mobile devices and the right ERP solution, then they’ll be able to do this remotely and immediately if needed

• Growing data – having an ERP system in place means that you are able to easily assimilate more and more data into your planning, ensuring you have deep insight into your business’s health as it grows.

Underpinning company operations, an ERP solution can manage everything from employee expenses all the way through to sales records. Having one in place from the beginning means that you’re able to take advantage of its benefits immediately and build a business that remains agile and insight-driven.

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“ Underpinning company operations, an ERP solution can manage everything from employee expenses all the way through to sales records. Having one in place from the beginning means that you’re able to take advantage of its benefits immediately and build a business that remains agile and insight-driven.”

By Craig Sharp, Managing Director of computer support, consultancy and managed IT service company Abussi Ltd – and Sage Business Expert

Demystifying technology: The cloud computing jargon buster

From hardware to cloud

The cloud has opened up new ways of doing business, of communicating, collaborating, and managing data. With the UK cloud industry expected to be worth £6.1 billion in 2014, we’re starting to reach a tipping point for cloud adoption, yet there a knowledge gap around cloud and its benefits remains pervasive.

In order to offer an explanation about what cloud or cloud computing is, we first need to examine where we were in the recent past…

IT systems were, and to a degree remain, based mostly in a fixed office location and focused on servers and desktop PC’s with the occasional laptop thrown in for mobile workers. IT was physical, it made a noise, it had green and red flashing lights and it was tangible.

Moving forward to today you will find that much of the world outlined above has changed significantly. PC’s still exist and many people working in an office will have one, but they’ll also be able to work on a tablet or a mobile. Much of the software they use is not installed to a device but accessible via a web browser and files or data are now available across many platforms, fixed and mobile.

The cloud as a driver for change

The best way to think of cloud or cloud computing is “the use of IT services which are not physically located at your premises” – Cloud services stop being your responsibility to buy, maintain and keep running for you and your business.

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Why cloud computing for business?

When you think about it a home doesn’t have an internal email server; individual users have email accounts with Hotmail and Hotmail is a service that is ‘in the cloud’. Each home doesn’t have a file server, they perhaps save important data and documents with Dropbox or Google Drive and both of these services are ‘in the cloud’.

It’s not hard to take the next logical step and see that if you run a business with an email server or a file server then you too can move to cloud services too. There are many reasons to do so but two key reasons are improved reliability and enhanced flexibility.

Cloud services are hosted in multi million pound data centres with huge amounts of resilience, allowing them to offer 99.9%, better uptime. These are figures that even the best maintained local single server can never achieve. By embracing the cloud you can stop phone calls to clients saying “I’m sorry, I can’t process that sale, our systems are down at the moment” – you cannot run a business without IT and the more your IT is down the less business you can do – fact.

The other key benefit is flexibility which is vital in 21st century business where you need to do business anytime-anywhere. If a worker needs to access information from the office they need it fast and they need it on a PC, a laptop, a mobile or a tablet. Using the cloud services allows you to offer enterprise solutions for your business at a fixed, low monthly cost.

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Security

In my experience, business owners can often stop thinking positively about cloud or cloud computing when they hear the Security and recall the high profile hacking stories which have contributed to a worrying trend to feel the cloud is not a safe place.

The fact is that any local office server is much less secure than a cloud service. The server can be stolen, it will be less secure in terms of software than most cloud services, it will be vulnerable to accidental damage and it is easy for most SME’s to have it in a place where staff can put memory sticks into it brining in all manner of viruses or other malware.

Most important of all, the most vulnerable part of any server is the backup and restore procedure which from my experience is untested and probably not working correctly. So let’s not feel that our own local systems are impenetrable and super-secure – they are not.

In order to put all of the benefits from a cloud service into context, let’s look at the comparison of a file server in your office with a cloud service like Dropbox for Business (DfB).

• DfB has no upper limit on data stored so unlike a local server that would need disks adding in the future you would just keep growing

• You would benefit from a system that is accessible across any platform, PC, laptop, iPhone, MAC, Android phone etc

• Information stored in DfB can be undeleted if removed in error going back months and months

• DfB is based around a number of data centres of which all are highly resilient so your data will always be available and never lost

If you have not given the cloud a second thought, it might now be time to do so. As the requirements of modern businesses become more and more diverse and the need to have IT up and available more and more of the time, then shifting services to the cloud is a way of maximising your IT budget and reducing the impact that an IT failure would have on your activities.

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“ The cloud is not a dangerous place. In reality, services based in the cloud are more secure than local IT systems - so reliable that in the long term, systems being “down” or your businesses suffering problems because user error caused data to be deleted without being backed up will be eradicated. 2015 is the year businesses should carefully consider a move to the cloud.”

By Steve Attwell, Managing Director, Sage UKI’s Small and Medium Business segment

Going for Growth

Mobility and flexible working: Legislation for change, flexibility for growth

Flexible working means two things – empowering your workforce to work from anywhere and being flexible when it comes to working hours. For a growing business, these two factors can be transformative and deliver the competitive edge needed to take your business to the next level.

However, offering flexibility and using it to reap business benefits are very different. Now that requesting flexible working is a statutory right for employees, how should you respond and adapt? Are you aware of the benefits and considerations needed to unlock mobility as a strategic business driver?

Flexibility becomes a legal requirement

On 30th June 2014, new legislation gave all employees in the UK the statutory right to request flexible working after 26 weeks employment. This legislation marked the latest milestone in the way the modern workplace - and UK business as a whole - is evolving. Surging growth in mobile computing technology and growing expectations from workers in almost every industry mean the topic of flexible working has been discussed for a few years, but slow-to-adapt organisations must now contend with legal ramifications as well.

The requirement on the part of the employer is that they must deal with all requests in a ‘reasonable manner’, such as arranging a meeting with the employee to discuss the request. If the employer fails to do this, they can be taken to a tribunal. Applications can be refused if employers have a good business reason for doing so, but many organisations may not have fully thought through the bottom line benefits that flexible working could bring to their organisation. Many may see this change as a burden, another strain on limited resources, but it can be an opportunity to boost productivity and efficiency, especially for small businesses.

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Going for Growth

What do businesses think?

Research from Sage has found that only one in four businesses (26%) currently offer flexible working as standard to all employees. While this may not be a shock, smaller businesses - where agility is key to competing with the bigger players in the market - need to look seriously at making this standard practice.

Two in every five companies we surveyed also felt that flexible working will be expensive to implement. The cost for any given company will be affected by numerous factors, such as the industry they operate in and the organisation’s size, but the long-term benefits and efficiencies can far outweigh initial set-up costs.

So, what are the benefits of flexible working, and what do businesses need to bear in mind when looking at boosting mobility?

The Benefits

• More empowered, motivated and loyal workforce

The ability to work from home, or work slightly different hours, is being requested more and more, particularly by those trying to find a healthy work-life balance. Those organisations able to accommodate these requests stand to benefit from happier, more loyal employees. While staff retention is important to businesses of all sizes, smaller companies may depend on a handful of key figures for their success. Flexibility could be the key to keeping them happy and holding on to vital knowledge and experience.

• Better customer relationships

If mobility sits at the heart of your operation then this means your team is truly able to work from anywhere. Aside from cost and employee benefits, this can help with retaining and growing business as well. If your staff are able to visit customers at the drop of a hat they will feel better looked after, more loyal, and more willing to invest in new products or services from you. Win win.

• Lower costs

Quite simply, having fewer employees working from the office means that you’ll need less office space. With commercial property rates at incredibly high levels, this can translate to significant savings.

• Reduced business risk

Employee absence costs UK businesses billions each year, whether this is due to illness, adverse weather, or travel complications. The ability to work from home removes many of these issues, helping growing businesses to mitigate risk and thereby boosting productivity and efficiency.

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Going for Growth

What to consider:

• Company culture

Ask yourself how flexible working will affect your company’s working culture. If your business thrives because of its bustling office environment it may be that your staff are allowed to work from home only once a week, with some based in the office permanently. It’s still important to make sure that they’re able to work from home, but that doesn’t mean completely stripping your company’s personality in the process.

• Get the right technology in place

If you’re going to enable work on the go, then you need to make sure your team can access the information they need at all times, from anywhere. This should apply to all business processes as well, from emails to invoicing, sales data to telephony. This means ensuring you have solid IT support in place, just in case something does go awry.

• Company tools? BYOD? CYOD?

Provide each employee with standard devices – the traditional option, with minimal complexity

Let them choose their own new devices – popular with staff, who may have personal preferences for the kind of device they use. Different operating systems could potentially lead to complication when it comes to compatibility

Allow them to use their own – often popular with employee and employer alike. Companies don’t have to invest in new devices so they often cover some or all of the cost of phone bills, and staff don’t have to carry even more technology with them. However, information security can often be a concern with this option, as well as compatibility.

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Business is about people, and people are one of your most important assets.

Going for Growth

Part 2: Power of People

Attracting, developing and retaining the right talent is fundamental to long term business success. Equally, having trusted people in place to act as strategic partners and advisers is essential to helping you identify and unlock new opportunities for growth. The power of people can be felt both internally and externally, and cannot be ignored.

By Jayne Archbold, CEO, Sage Mid Market Europe

Gain and retain: Finding and developing the right talent for your business

Plan like your business depends on it. It does.

Gaining and retaining the right talent is critical for growing businesses. Taking a short-sighted view runs the risk of stifling growth opportunities, so you have to plan for the type of talent you want, both today and in the future. Develop a short and long term talent plan – what do you need now, and what will you need in 12 months’ time, and beyond?

The first stage is planning the direction the business is going in, then understanding what talent you need to make that happen, while identifying talent already in the business. If not, do you have people who could become that talent with guidance and training? Hiring in new recruits is often the first instinct when you have a specific role to fill, but helping an existing team member to evolve into a new role can be quicker, easier, and more effective.

If you still feel you have gaps, identify the skills and traits you need to hire in. After assessing these three elements, you will then have a solid overview of where you need to hire, where you need to nurture people, and also where you have existing ‘top talent.’

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Attracting the talent

Recruitment can be a challenge for small firms. Large enterprises often have the draw of international opportunities, established business networks, and scale. At the same time, start-ups are seen as fast-paced and exciting - an image fuelled by stories of tiny companies that are discovered as ‘the next big thing.’ This can make it difficult for small, established companies to be noticed in the rush for talent. So what do you do?

One solution is to make it clear that your company is dedicated to its employees’ satisfaction and professional development, and that they will be listened to.

Big companies can make many feel isolated within a faceless corporation, while start-ups can’t provide the level of support that many people require or want. Make sure this is where you shine:

Transparency and involvement Keep your employees up to date with how the company is doing and what’s planned are for the coming months and year. Let them know how their work is contributing to the success of the business and they’ll automatically be more invested in its success themselves.

Opportunity and growth Ensure that each employee can see and understand the long-term personal and professional growth they stand to achieve within the company. If you show them how they can grow within the business then they are far more likely to do so, and to want to do so with your company rather than a competitor.

The right tools for the right job If your team feels involved in the business and knows what their opportunities are, that’s fantastic, but if you don’t give them the tools to succeed then they may feel you’re setting them up to fail. The right tools vary by company, but it could mean providing a work phone or laptop, or just ensuring that the accounting software they use is effective and efficient. Either way, you want to ensure they’re equipped to succeed.

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Finding the right talent When it comes to the process of actively looking for new talent for your firm, you can either outsource your search to a third party or do everything ‘in-house’. The advantages of using a recruitment agency are clear – extensive experience, a wide pool of contacts, an established vetting process, and they have time to dedicate to searching.

However, you may already know someone you think is suitable for the role, perhaps someone you’ve known for a long time, who you trust. If you want to be sure that you’re making a sound business decision rather than a personal one then you need to ensure objectivity as early as possible.

• Ask someone else to develop a set of criteria for the role, which you can then use to assess their suitability.

• When it comes to the interview process, make sure there’s at least one other person interviewing them with you, or don’t participate in the interview at all.

• Don’t make your decision without speaking with other potential candidates. Speaking with several people will help to ensure you’re making the right decision, and you may find your ideal colleague elsewhere.

Don’t forget to take advantage of the insight that LinkedIn offers. The site can give you a feel for the employment history and business experience of any one of your connections, making it an ideal starting point for your search or an easy tool for double checking.

Line managers – essential for good times and bad

The flipside of attracting and recruiting the right talent for your company is ensuring that you keep hold of it, and maximise their potential. Effectively managing an underperforming employee is just as important as attracting new superstars. Ensure that each employee is assigned a line manager, they know who that person is, and that there are regular meetings to discuss performance, both good and bad. This is the ‘front line’ of talent management and is a critical step in ensuring clarity in job roles and performance expectations.

Regular feedback to employees is vital, so make sure that line management meetings are happening regularly, even if it’s between you and one of your very first employees. People need to be getting regular feedback on how they are doing. Focus on what’s going really well and then correct areas that are not going so well. Balance is key here – encouragement and praise as well as constructive criticism and advice.

The bottom line? Your talent is your business

Leaders need to recognise that in growing businesses, managing your people is a top business priority. Growth, sales and profitability all come from your employees enjoying their roles and performing to the best of their abilities. Leaders who neglect talent management do so at their peril.

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By Brendan Flattery, CEO of Sage UK and Ireland

Going for Growth

Closing the ‘Mentoring Gap’: key to unlocking business growth

Small and growing businesses in the UK could double their chances of increasing their turnover by using a business mentor – yet four out of five firms are not utilising one.

A survey from Sage found that less than a quarter (just 22 per cent) of small business owners in the UK are using a mentor, despite nearly nine out of 10 (89 per cent) recognising the value that they can bring to an organisation.

The disconnect between the two is what we are calling the UK’s ‘mentoring gap’. This untapped resource offers a great opportunity for small and medium sized firms to unlock extra growth for their business at a time of ever-improving economic conditions.

It is very easy for business owners to get stuck in what I call the ‘inside out mentality’. We can be quite buried in the detail of running our businesses and what a mentor can do is view your organisation from an outside perspective, seeing things you cannot and giving you an objective opinion. Research has shown that 70 per cent of small businesses that receive mentoring survive for five years or more - double the rate compared with non-mentored entrepreneurs.

With small and medium-sized firms making up 99.9 per cent of the UK business population, the wider implications for the economy could be huge if mentoring was widely adopted.

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Going for Growth

But what are the key considerations for a business owner, when looking to utilise a mentor? We’ve broken it down into five key steps:

1 Finding the ideal mentor

Look for someone who has experience in your industry and understands your needs. On top of that, they need to be a good listener, have the right technical skills to advise, and be willing to introduce you to useful contacts. If you are unsure where to look, Government website www.mentorsme.co.uk is a good place to start.

2 Choose the sort of mentor you want to go for

A lot of this depends on where you are within the lifetime of your business. If you are just starting-out, someone with experience getting a business off the ground from scratch would be a massive advantage. If you’re a start-up, it’s advantageous to find someone who is able to spot strategic flaws and has experience in rectifying them – as well someone who has experience in a similar sector, or shares the same aspirations. If you’re a small business, it may be worth calling on the experience of a wide range of mentors as your business grows and becomes more complex. As you start to recruit staff to fill specialist roles, remember a mentor can give that outside perspective on an organisation.

3 Before you start, have clear expectations and agree ground rules

Both you and your mentor should be clear about your expectations and what you want to achieve from the relationship. Have clear rules and guidelines so that both parties know what is expected from them and to ensure you are both fully committed to the mentoring relationship and how it will work.

4 Be trusting

The point of a mentor is to push you to do things you might not have done otherwise. You must have faith in the guidance you are given otherwise the whole relationship will fall down.

5 Honesty is the best policy

Be open with your mentor – let them know how you are feeling, the pressures you are under, what is working well and what isn’t.

Mentoring has always been a part of the workplace, even back before the business of business got going. Craftsmen and women learned their trade at the feet of older, wiser experts through apprenticeships.

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“ What research demonstrates is that mentoring could be an accelerator to business growth, and we firmly believe that it gives organisations the confidence and control they need to make the right decisions in business.”

Going for Growth

Successful growth strategies can often require a change in direction; taking on a new market; diversifying your offering or exploring alternative routes to finance; challenging the existing status quo within your organisation. Whilst painful, taking the right steps into unchartered territory can yield substantial return. Getting the right advice along the way and approaching new opportunities with a solid business case will help to guarantee any changes act as a catalyst for future growth and success.

Part 3: Strategies for expansion

By John Chinery, Sage Product Manager at K3FDS

Future Proof by planning business capacity and capability

Capacity is a power to learn, an ability to perform, an innate potential for growth or a constraint. Capability and capacity is what made your business succeed. But when do these advantages turn into challenges for your business? I’ve broken this down into eight steps:

Flexibility

Like children’s shoes, a small business will outgrow systems and processes that once worked well so it’s vital to remain objective about the ongoing fit. Treating software systems and processes like you would a company car is a good analogy. Driver training, servicing, check performance, proactively tackle issues and be mindful that replacement will happen. Consider cash flow, of course, and sweating an asset to its last drop can seem sensible. But does it ignore the true cost to your business?

Insight

The true cost of business investment is how well it addresses the ongoing need of your customers and employees. Look for patterns of attrition, be a mystery shopper to your business and listen to feedback. Just like radar in the Battle of Britain or hilltop beacons warning of the Armada, one major reason businesses get into trouble is that they don’t detect the trouble in the first place. Business Intelligence and analytics are incredibly powerful tools to turn data to information then to actionable insights. Productivity

The true cost for employees is productivity. Having the right systems will not only empower your people to be more productive but it will motivate them too. Whether system speed, functionality, process or information availability is curbing productivity, the right investment will solve that.

SME software systems can be platforms upon which tweaks, improvements and meeting individual needs can be added. It’s not just about raw output; it’s also about doing the right things consistently. For example, automating an acknowledgement email following a customer complaint is ‘productive’. However, if by automating a manual process which improves the reliability and timeliness of that task being carried out, then the benefit here is not just the 5 minutes of labour saved but the value of helping turn around a customer’s view of your business.

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Man versus machine

Software can automate repetitive administrative tasks. This makes labour more productive as well as the added benefits of accuracy, timeliness, and speed. These can be crucial to delivering a superior customer service. But how do you get the right labour/machine mix? Listen to people who do the job and do their job for a couple of hours. An ‘undercover boss’ quickly learns what holds people back. Equally, you can learn where your people can really make a difference to the customer experience.

Gut feel and intuition help but the numbers are the proof. So always run a trial to measure peoples’ output to prove the benefit. Payback should be measured in months or years - not centuries!

Take data integration for example - synchronising sales orders is generally a quick payback whereas synchronising product types is very marginal. Synchronising products just depends. Our approach is to workshop these sessions to tease out the detail, and help you to flesh out the right decision. Dream and Reality

Always start with the problems - collate, quantify, and assess. Are they problems? Or actually symptoms of problems? Digging into symptoms can flesh out what the fix can then look like. ‘What if’ can be a useful way to plan improvements. Follow with a vision of where you want to get to. By working backwards from there you can plan the steps to need to take to get you there. Working with a trusted systems provider who have skilled, experienced people can really help here too.

Advantage

Differentiating your offering is vital to meet customers evolving expectations even if you’re happy to compete on price alone. Using the “7P’s marketing mix” as a framework for your technology strategy can help you consider how agility, information, efficiency, or product that makes you stand out. It also focuses you on your value chain, processes, and systems architecture. A valuable technique gaining traction that marries business and technical requirements is the TOGAF framework.

Complexity

Technology is truly transforming how we interact both within our businesses and externally with customers and suppliers. Yet the principles of business remain the same and the human element to business becomes even more important in a world of automation and noise. You are faced with unprecedented complexity in making technology decisions. Cutting through that complexity, getting transparent, plain, honest, answers is where working with the right platform and the right provider pays off.

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“ Build technology into your business to improve capacity. The results are capabilities to serve your customers better, to create a mix that meets their needs. Your employees are motivated by working with systems and procedures that help them do their job and achieve more.”

By Jeremy Corner, owner of greeting card publisher, Blue Eyed Sun, and wedding stationers, Ivy Ellen – and Sage Business Expert

The exporting opportunity

Going for Growth

Exporting to new countries and markets offers a great way for business owners to grow and expand their business.

The recently published Sage Business Index found that most confident firms were those who do business outside of their domestic market. Two fifths (40%) of those surveyed currently do business in countries outside their own, accounting for 20% of their turnover.

On top of this, the study found that the last year has been a good one for exporters with 39% of businesses surveyed seeing an increase in levels of exports and just 10% seeing a decrease. Furthermore, 50% predict that turnover generated by exports will increase by an average of 3.4% next year.

It’s clear there is a massive opportunity for businesses around exporting, but due to the added complexities of selling to a foreign market it can sometimes seem a difficult space to navigate if you have never exported before.

Although Blue Eyed Sun has exported to a handful of international customers over the years, it is only since 2012 that we have begun to focus on overseas expansion. As a result, we’ve distributed to over a dozen new countries in the last two years which has boosted our confidence in the global economy. Our business isn’t the only one to feel this increased confidence.

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Here is a brief overview of what I’ve learned so far about export from a greeting card publisher’s perspective and advice for growing firms looking to untap the exporting opportunity:

Get your product right here first

It’s important to establish yourself and your product well in the UK before you start thinking about exporting abroad. You need to make all of your mistakes locally first as they will all be magnified once you start distributing internationally.

Can you handle export?

Your operational systems must be strong enough to support the increased volume of business. As margins are greatly reduced when you export there is less room for error. Supply chains lengthen when you work with distributors and you need to be sure that you are a strong link in the chain. You not only let down your distributor when things go wrong, but their sales agents, retailers and consumers.

What can go wrong?

The most noticeable issues are strain on your cashflow, credit risks on bad debts that are difficult to chase overseas and fluctuations in currencies which can affect your profits if you don’t get paid in Sterling. Some countries have different laws regarding Intellectual Property and you run the risk of being copied abroad. You can also suffer quality control difficulties because of the increased volumes, freight forwarding issues, issues with third party couriers and miscommunication problems due to language differences.

So why do it?

Why export is worthwhile

Exporting can improve your business. The larger volumes and lower margins have forced us to find better ways of doing things. We’ve had access to new markets and sales we otherwise would not have had.

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“ Our products are sold across the world which is very exciting and we have met some great business people who have provided fascinating and inspiring insights into how things can be improved in our business. All this whilst growing our business, flying the Great British flag abroad and providing more jobs for people in the UK.”

Why export has been good for us

Our export strategy has also led to greater sales and improved profits. Because we sell to a number of countries, our company isn’t reliant on any single customer. Instead we have a nice spread of business across a range of markets. The product life cycles of our cards have also improved as we extend their lives in new markets. Some of our older best sellers still sell really well abroad because they are relatively new to those markets. This in turn spreads the development cost of these products across a larger number of sales. Production costs are reduced through greater volumes as savings are made on purchases and operational efficiencies.

We also have more options for clearing older stock which may have slowed down at the end of its product life cycle in the UK. Upgrading to the latest version of Sage software also allowed us to handle international currencies with ease.

While export does have its challenges and was not something that Blue Eyed Sun really started to push until we were ready.

It has had many benefits to our business. We’re looking forward to expanding our international sales further this year and working with UKTI for the first time to see if we can do the same for our wedding stationery business, Ivy Ellen.

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By Guy Blaskey, Founder Pooch & Mutt ltd (www.poochandmutt.com)

Marketing for expansion

Marketing your business effectively is a nut every growing business needs to crack. But before starting to look at marketing for growth, it makes sense to look at marketing in general - what it is, why it exists and where it has come from.

In ‘the good old days’ marketing was effectively taking things to a market. If you were a carpenter you would take the stool that you made to a market, hopefully sell it and then use the money to buy some vegetables so that you could feed your family. Or if you were a farmer you would take your vegetables to the market and sell them to make money so that you could buy a stool to sit on while you ate your dinner. The process was simple you had a ‘need’, such as satisfying your hunger and a seller had a product to meet the need, such as vegetables.

The seller’s job when at the market was to convince you that his vegetables were the ones that you should buy – that his product was the best product to meet your need. He would tend to do that with one or more of the four Ps:

• Price – his vegetables were cheaper than another vegetable seller’s vegetables;

• Product – his vegetables were better (tastier, bigger etc) than another vegetable seller’s vegetables;

• Place – he got the market stall at the entrance to the market, so that you bought his vegetables before you even saw the other vegetable seller’s vegetables, or;

• Promotion – he would either shout louder than the other vegetable seller (advertising), or he would get people to spread the word that his vegetables were the best (social media).

The role of marketing, which is to convince someone that your product is the best product the meet their need, is still the same. It is just the methods that are different.

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A key concept in the industrial revolution was ‘specialisation and division of labour’, as noted in Adam Smith’s pin factory example. What this meant was that one person no longer made products and took them to market to sell. The person who was better at making products made them, and the person who was best at selling products sold them. This leads to today where it is extremely unlikely that you ever meet the person who creates the products that you buy.

In a way this is a shame, because almost every dog owner I speak to I can tell about our dog food and turn them into a customer thanks to creating a connection with them on an emotional level. However in reality we make our dog food on an industrial level. The smallest run we can do is 2,000 bags per variety. We currently have 5 varieties, so that is 10,000 bags. Each bag lasts approximately 2 weeks, so that is 20,000 weeks worth of dog food, or 385 years worth of dog food.

Based on the amounts that we are producing we clearly need more customers than people that I can hope to meet, speak to and convince to buy our food, so I need to look at other forms of marketing, which reach more people.

Just as with the market stall of ye olden days, the keys to successful marketing are:

• A potential customer having a need;

• You having a product that meets that need;

• Being able to tell the potential customer that your product is the best product to meet their need

• The potential customer being able to purchase the product.

The most important thing is that it all starts with a customer need… not with what you want to make.

In order to market for growth you need to be able to find the maximum number of people with a need for your product that are able to purchase it. You must then explain to them why your product is the best one to match that need.

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“ The big trick of marketing is telling your potential customers about your product, rather telling a mass audience who may never have a need for your product. Don’t waste your effort, time and money telling people about your product who will never be customers as it detracts from the time spend communicating to those who do. Getting this right is the biggest challenge for marketers and something every growing business needs to navigate.”

Going for Growth

By Frank Webster, Seedrs Senior Investment Associate

Crowdfunding - alternative finance for growth

The technology landscape is moving at a rapid rate. Not only has it opened up new ways to do business and manage an organisation, it is also transforming the way businesses look at finance and investment.

Financial technology – or fintech – has exploded in the last the couple of years, and rapidly growing businesses are turning their backs on more traditional methods of raising finance.

This was underlined in a recent survey by market research firm BDRC Continental found more SMEs are turning away from lending from the banks. This is despite 71 per cent of all loan and overdraft applications made in the 18 months to September 2014 being successful.

Crowdfunding takes off

One of the biggest alternative routes to finance has been crowdfunding – which has captured the imagination of both the public and investors.

By definition, crowdfunding is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet.

Our crowdfunding platform - Seedrs - now raises £1 million worth of funding every single month. It allows a business to be directly connected with investors that they would not have necessarily been put in front of through traditional channels.

Our view is that over a period of time, a crowd of people will make a better investment decision than the more traditional funding suspects, be that angel investors, venture capitalists, or private equity funds.

Many people who use crowdfunding are of course looking for the next Amazon, or the next Google – but often they are very savvy investors that can also add a huge amount of value and experience to your business beyond funding.

We believe that the traditional approach to raising finance is broken – raising money offline is slow and expensive. You could be going to endless numbers of meetings with bank managers, VCs, angel investors and beyond, and even then it can still be impossible to get a definitive yes or no answer.

Essentially, you have to kiss a hell of a lot of frogs and hope that one of them turns into an investment.

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“ The traditional framework for raising finance is very selective and it is left to people who have pots of cash and pots of time. Crowdfunding democratises the whole process. No longer do you need a rich uncle, or a well-connected mentor. Technology has opened up a new online frontier for growing your business.”

Going for Growth

What are investors looking for?

It is something I’m often asked: “What are investors looking for?” This is literally the million dollar (or pound) question that is pretty difficult to answer, as not one investor is the same.

My view is if you have a product or a service which engages with people, and understands a particular pain point, then people will invest.

Businesses that combine an element of passion, sociability, and being able to define an issue they seek to solve, are at a huge advantage when looking at crowdfunding platforms for investment.

It’s not just for start-ups

It is a bit of a misconception that crowdfunding is just for early stage businesses – even listed firms are getting in on the action.

Earlier this year publicly-listed, award winning English winemaker and craft brewer Chapel Down launched a £1.6 million crowdfunding campaign on Seedrs. In less than three weeks, they overfunded to almost £4million, from around 1,400 investors – which makes this the largest equity crowdfunding campaign ever. This was the first time a public company – anywhere in the world – campaigned for investment via equity crowdfunding.

As well as saving time by not going through a broker, by inviting customers to invest in your business you can build up a long term rapport and higher engagement.

Crowdfunding genuinely offers an exciting opportunity for both businesses and investors. Any firm looking for finance no longer has to rely on the traditional routes, and technology can now connect your growing business with the investment you need to succeed.

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Going for Growth

Steve Attwell, Managing Director, Sage UKI’s Small and Medium Business segment

Strike the balance in your business

With less than one in three small and medium businesses having a business savings account, financial capability is sometimes left as an afterthought. Regardless of how entrepreneurial or creative the business is, a solid financial basis is integral to business victory. Without a strong balance sheet and a beady eye on cash flow, success is only going to be limited or short lived.

Cash flow is particularly critical for small businesses, which often have small reserves of cash and credit to fall back on. With 90 per cent of small business failures caused by poor cash flow it’s important that money flows into and out of your business on a daily basis as you get payments from customers and settle bills with suppliers and staff.

The key to success is not being caught out and striking the right balance.

Be strategic to meet your ambitions

Most SMEs will have a marketing plan and basic idea of profit and loss, but setting up a few key performance indicators and robust finance function from the start can provide a good indication of the health of the business.

As long as they are clearly derived from your actual business plan, these KPIs will arm you with the information you need to control the broad direction of the business, from business development to cashflow to supply chain management, and help create strategies that help you with inevitable obstacles – from falling demand or rising costs to late payers.

Whatever you do must suit your ambitions realistically. Look at strategic capability of people in the business and allocate functions – HR, marketing and sales, admin support and finance.

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You never know what’s round the corner

When it comes to expanding your offering, your finance team can help you assess the business case for new products, services or customers. Recent ACCA product innovation insight from 400 pan-European businesses championing new services revealed some interesting observations. Lack of funding was cited as the main reason for service failings. The survey revealed that companies with well-resourced finance functions employing highly scalable cost effective business intelligence were the most successful.

Many businesses think like a person: they make X, sell Y and charge for each widget. Typically they don’t look at building business capabilities until they have £1m turnover or more. However, analysing business activity at the earliest opportunity in the business cycle can reveal significant benefits when making one-off capital investments.

Employing business software - like our Sage 200 Suite - with integrated CRM, business intelligence and financials platform, for example, gives you a great tool for analysing transaction information and assessing the true drivers behind customer purchases.

Forecasting, forecasting, forecasting

One of the biggest pressure points for any growing business is cash-flow, so my advice is to think like a bank. By treating credit as a product that should be sold as such, it doesn’t have to be a headache. And properly costing credit can be key to a business’ success.

The mantra for credit is ‘forecasting, forecasting, forecasting’ as your cash flow is the first thing any bank or business angel will look at. Know when money comes and goes as you won’t convince anyone that you have control of the business if you don’t.

Consistent health checks

Keep and work with product lifecycle analysis that is in one place so you can then form decisions around Customer Relationship Management (CRM). Traditionally this is a space that has been owned by sales departments, but finance needs to get involved. I would advise being realistic when it comes to cash flow. Assume that not everyone will pay on time and work on a 20 per cent loss with the business when it comes to payment.

Hoping that a few numbers will provide a good indication of the health of the business is never a good strategy. Business software doesn’t just look at net profit and the bottom line, so adopt key performance indicators and project accounting forecasts that convert overheads to direct costs or project costs and employee time.

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“ Online businesses do more analysis than traditional businesses with non-financial information, so look at this model and use it regularly, even if you think the business hasn’t really changed. Each of these areas is key to any new – and importantly, any growing – business. If used, they can deliver or drive something that will help them connect with customers at every touch point and turn passion to planned future business success.”

Sage (UK) LimitedNorth Park,Newcastle upon Tyne,NE13 9AATel 0800 33 66 33Fax 0845 245 0294www.sage.co.uk

© Sage (UK) Limited 2015 01/15 36201AL 6209701

To find out more about Sage 200 and how it can help your business grow visit www.sage.co.uk/sage200 or call us on 0845 111 9988 and quote #goingforgrowth.