Making business links key to start-up success

Business & Enterprise North East (BE-NE), which delivers a wide portfolio of support services in the region, including Business Link, offers advice and assistance to help businesses get off the ground and make the best possible start.

Business Link adviser Neil Sowerby explains the ways in which the service can help turn a business idea into a viable venture.

“There is never a good or bad time to start a business.

Regardless of the economic climate, with a strong product or service offer, careful planning, preparation and, most of all, hard work, this can translate into a profitable business.

“The key to starting a successful enterprise is planning.

“Transforming an idea into a viable business model requires understanding, commitment, personal sacrifice and financial investment.

“At Business Link, we can help entrepreneurs to gain a deeper understanding of what is needed to get a business started and make it profitable.

We have a team of advisers who operate across the region and genuinely understand what makes a business work.

“Once an outline business plan has been prepared, they will be able to talk to businesses about what they need to do to get up and running, and will help them access other support services that will make things easier.”

Business Link is the primary access point for support in the region, as well as being the service that channels applications through to the North East England Investment Centre (NEEIC), which invests money into projects that will benefit the local economy.

In total, Business Link helped to create over 4,500 new businesses between April 2009 and March 2010, an increase of over 16% from 2007-2008 and over four per cent up on last year.

In total it has worked with over 33,200 businesses and individuals to help them startup, develop and grow.

Figures highlight that despite the challenges that businesses have continued to face during the past year, the North-East is still one of the best places in the UK to start and grow a business.

“The Business Link service is free to access and is a great source of support for entrepreneurs across North-East England,” said Neil.

“Businesses that use the service benefit from practical assistance, from advisers who understand business and who have worked with hundreds of enterprises to help them both start up and grow, and who, in many cases, have experience of running their own company.

“While entrepreneurs might have the best understanding of their product or service, our advisers can share broader business knowledge, with assistance relating to marketing, legal considerations and sales strategy, among other things.

“This general business know-how can really help a new entrepreneur to set off on the right track and ensure that the venture begins its life on the best possible footing.”

Aside from practical advice and support, entrepreneurs quite often need assistance with understanding how to finance a new business.

“By working with Business Link, they can better understand the costs of starting up, and will be able to gain valuable advice as to how to go about sourcing the capital needed to get up and running.

“Our advisers will, between them, have worked with enterprises from a host of different sectors.

“This experience means they are well equipped to work with you to look at your business plan and get a much clearer idea of the costs associated with starting up.

“The team has a really good understanding of what financial support is available regionally and nationally too.

“Business Link is also the gateway to services such as the North East England Investment Centre (NEEIC), which invests in projects that will benefit the local economy, so this is just one other way that the service could potentially help.

“For individuals that are looking to get started with their own business, it is absolutely crucial that they seek out all the support they can and Business Link is an important first call to make to realise their vision.

“With support from the team here there is nothing stopping any entrepreneur from launching a profitable and successful enterprise and making the leap into a new career, as their own boss.”

Up and running!

GETTING a small business off the ground can seem like an uphill struggle at times, especially in the current challenging economic climate.

That is why it is crucial to seek support and guidance to ensure that your idea or enterprise can develop and grow.

There are many ways Business Link can support a business and help it plan for the future.

If you haven’t already started your business, research and planning are key tasks for you to complete.

Developing your business idea into a viable product or service is a critical part of building a business.

Thorough assessment and market research at an early stage will help you to establish whether there is a market for your product or service.

Your next step is to complete a realistic, working business plan when you’re starting up a new venture.

The Business Link website, under the heading Starting up, shows you how to prepare a high-quality business plan using a number of easyto- follow steps.

A business plan is a written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts.

As well as acting as a prompt to make sure you have really thought through your business idea, a clear plan will also be vital if you are looking for financial support to get your business off the ground, or to grow.

It is also useful in helping you to assess how successful your company has been performing, by looking back at your forecasts and comparing them to results.

You should also bear in mind that a business plan is a living document that will need updating and changing as your business grows.

Regardless of whether you intend to use your plan internally, or as a document for external people, it should still take an objective and honest look at your business.

Failing to do this could mean that you and others have unrealistic expectations of what can be achieved and by when.

Practically, there are a number of things you need to think about when producing your business plan. It should include:

■ An executive summary – this is an overview of the business you want to start.

This is vital as many lenders and investors make judgments about a business based on this section of the plan alone

■ A short description of the business opportunity – who you are, what you plan to sell or offer, why and to whom

■ A marketing and sales strategy – why you think people will buy what you want to sell and how you plan to sell to them

■ Your management team and personnel – your credentials and the people you plan to recruit to work with you

■ Your operations – your premises, production facilities, your management information systems and IT

■ Financial forecasts – this section translates everything you have said in the previous sections into numbers.

Business Link offers a useful online guide explaining exactly how to compile each of these sections, available at www.businesslink.gov.uk/northeast

To make sure your business plan has maximum impact, there are a number of other factors to consider.

It is important that you keep the plan short and concise – it is more likely to be read if it is a manageable length. Similarly, it is worthwhile giving some consideration to the presentation of the plan, even if you only intend to use it internally.

Remember, a well-presented plan will reinforce the positive impression you want to create for your business.

Basic things to consider are:

■ The layout of the plan – you should include a cover and a contents page with page and section numbering

■ Legibility – make sure the type is ten point or above

■ Formatting – you may want to email it, so ensure you use email-friendly formatting Even if it is for internal use only, write the plan as if it is intended for an external audience

■ Editing – get at least two people to read the plan and check that it makes sense

Avoid jargon and put detailed information, such as market research data or balance sheets, in an appendix at the back.

You may have more detailed plans for specific areas of your business, such as a sales plan or a staff training plan, but it is best not to include these, though it is good practice to mention that they exist.

It is sensible, once you have drafted your plan to seek the opinion of an expert, such as your accountant, who may be able to offer help and guidance to improve your plan.

However, it is not a good idea to get them to write the plan for you.

Investors and lenders need to have confidence that you personally understand your business plan and are committed to the vision for the business.

Finally, and most importantly, make sure your plan is realistic.

Once you have prepared your plan, use it.

If you update it regularly, it will help you keep track of the development of your business.

Once an outline business plan is in place, Business Link can provide a wealth of guidance and impartial advice to get you off to the best possible start.

Business Link has a team of expert advisers who offer advice, help and information to individuals and companies across the region, giving them access to the ‘business brains’ who will help to get their business idea off the ground, or grow their existing company.

For further information about Business Link visit www.businesslink.gov.uk/no rtheast or call 0845 600 9 006.

Financing your new business

When starting up it is vital to take time to consider the finances needed to get your business off the ground, how you will raise these funds and how you will manage your finances as your new venture grows. Here Business Link’s Mark David provides some practical advice on all aspects of financing a new business, to help ensure it has firm foundations for long-term success.

I’VE got a strong business idea but how do I determine how much money I will need to get my new enterprise off the ground?

Every new business needs money when starting up to purchase equipment, establish the workplace and meet marketing costs, all before the first sale is made.

Then, once you are established, you’ll need cash to pay the bills and keep the business going.

Your business plan and financial forecasts will be key to determining how much funding your business is likely to require, what it is needed for and when you will need the money.

A strong business plan will not only help you to lay out what financial resources are required, but will actually help you to raise the money you need by convincing banks, lenders and other investors that it is worth them taking the risk to back your business.

You will also need to factor in your running expenses, as well as bearing in mind that customers may not pay you immediately, but you will still need to settle all your bills to keep trading.

I know what my start-up costs will be, but what finance options are available to help get up and running?

There is a range of financing options when starting a new business and choosing the right one, or a combination of options, is essential.

Many people use their own savings or personal borrowings to fund the business.

However, if you have a strong network of family or friends, they may well back you – but, you should carefully consider the risk that they could lose their money if your business is not as successful as anticipated.

If you have a solid business plan, you may be able to borrow from a bank. Many businesses use overdrafts for dayto- day borrowing and loans to finance large purchases such as equipment.

A larger business with good prospects might attract outside investors.

For example, ‘business angels’ typically invest £10,000 or more in exchange for a share in the business.

Will I be able to access funding or grant support to help get my business off the ground?

This should be an option that is explored by all businesses, and Business Link advisers have a good knowledge of the potential options that are available both nationally and regionally.

Business Link can also help you to gain access to the North East England Investment Centre (NEEIC), which invests Government money in projects that will be of benefit to the economic landscape in the region.

Innovation vouchers are another potential funding option and are designed to help North-East businesses to buy expertise from the region’s colleges and universities to encourage businesses to innovate.

They are accessed through the Business Link service, delivered through the North East England Investment Centre (NEEIC).

Once I know how I’m going to fund my business, how do I ensure its ongoing financial security?

Healthy cashflow is vital to the survival and prosperity of any business.

It means that the pattern of income and spending in a business allows it to have cash available to pay bills on time, so careful monitoring of the inflow and outflow of cash is essential to any business in protecting its financial security.

Are there any ways I can manage my cash flow more effectively?

By creating a cashflow forecast you will be able to predict peaks and troughs in your cash balance, helping to plan borrowing and assessing how much surplus cash you are likely to have at a given time.

It is worth noting that many banks and lenders require a cashflow forecast before considering a loan.

Business Link advisers can provide practical advice on managing cashflow and developing a cashflow forecast.

The Business Link website www.businesslink.gov.uk/nor theast also includes a useful guide on the basics of cashflow management.

For further information about how Business Link can help you manage your finances visit the above website or call 0845 600 9006.

Ethical business a scrumptious idea

AFTER a devastating accident left successful businesswoman Veronica Harnett unable to return to work, she decided to turn her hobby of cake making and passion for fairly traded products into a thriving business after getting the right mix of training from Business Link.

From 2002, Veronica Harnett held a senior management position with the Connexions Service, where she was locality manager responsible for running the service in Redcar and Cleveland.

After falling down the stairs of her Guisborough home in 2009 and breaking her back, Veronica was left on crutches for six months and unable to return to her job.

She decided a complete change in direction was needed and Business Link became her new crutch to lean on while she set up her own business, Fairly Scrumptious.

Veronica has always cooked and baked cakes for other people as a hobby and as a Traidcraft representative, has a keen interest in fair trade products.

When circumstances forced her to find a career that meant she could work around the constant pain she is now in, an ethical cake business was the new challenge she needed.

Run from her home kitchen, Fairly Scrumptious specialises in hand-made celebration and wedding cakes, cupcakes and luxury desserts.

“I have always loved making cakes and used to read about people making a successful career out of their passion for baking, but because I had a good job, which I enjoyed, I never looked to pursue setting up my own business,” said Veronica.

“I’m really excited about Fairly Scrumptious as I feel it is important for people to be able to buy cakes where the ingredients are ethically sourced and I saw a gap in the market for these products.

“Orders have been coming in from word of mouth, my Guisborough market stall, the website and through attending craft fairs, so I’m pleased with the interest in such a short space of time.

“I started working with Business Link once I had written my business plan and they helped me to explore new markets and source dedicated free business courses, which is so important for a new small business.

Stephen Gibson, Business Link adviser, has worked with Veronica to support her in setting up the business.

He said: “Veronica has demonstrated it is possible for people to create a business from a talent. It is always a pleasure to work with people who are embarking on a new challenge and to give them guidance to help them succeed.

“Business Link offers a range of start-up events and courses that are tailored to help people who want to run their own business.”

Veronica is looking to growing the business further and hopes to supply her cakes to delicatessens and coffee shops in the Tees Valley area.

Veronica adds: “If anyone is faced with change in circumstances that are out of their control it is worth considering setting up your own business.

“There is lots of help out there and it could be a positive career move. I may have broken my back, but since setting up the business, I haven’t looked back.”

Business Link has a team of expert advisers who offer advice, help and information to individuals and companies across the region, giving them access to ‘business brains’ who will help to get their business idea off the ground, or grow their existing company.

For further information about Business Link visit www.businesslink.gov.uk/nort heast or call 0845 6009006.