Archive for May, 2013

Europe still the largest market for exporters

Almost 40% of members of the British Chambers of Commerce (BCC) are actively exporting their goods and services in 2013, compared with 32% in 2012, according to a BCC survey. The survey also showed the EU remains the largest market, with 87% of respondents who export trading in the region. Prospective future growth markets preferred by current exporters include Brazil, Russia and Qatar, and the majority of respondents reported that ease of finding overseas customers and distributors were the reasons most likely to encourage them to export.
There is more about the BCC survey results at:
http://www.britishchambers.org.uk/policy-maker/policy-reports
-and-publications/2013-international-trade-survey.html

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Dacorum Small Business Forum

Have you recently started in business?
Have you less than 50 employees?
Are you or your business based in Dacorum?
Would you like a network of support for your business?
If you have answered yes to any of these questions then the Dacorum Small Business Forum may be for you.
Meeting Bi-monthly, this FREE group aims to work together to resolve business issues, to learn from each other, to attend seminars with external speakers on subjects of your choice and to provide support for each other.
Interested?
Please contact Lesley Crisp at Lesley.crisp@dacorum.gov.uk or 01442 531003. We aim to hold these meeting on the first Wednesday of every other month, starting in July,  between 10 and 12 at the Maylands Business Centre.

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Get to grips with business arithmetic

In just about every aspect of running a business, financial formulas and numbers are a central factor. And that isn’t just to do with your books and accounts, because numbers are crucial when assessing business performance, waste, efficiency and relative levels of success or failure.
In particular, numbers are inescapable in marketing and selling, and your efforts could well be wasted or questionable if you are not calculating and measuring how well your marketing activities are performing.
For the purpose of illustrating the importance of numbers in marketing let’s take a look at direct mail as a particular example.
Direct mail is a numbers game, pure and simple, because if the numbers work in your favour, direct mail can become a profit-generating machine. But, if the numbers don’t work to your benefit, direct mail can be a cash-draining black hole.
Here are the direct mail terms you need to understand and the arithmetic that is involved in every campaign:
•    Product price. This is the selling price of your product or service.
•    Product cost. This includes all variable costs (cost to acquire or manufacture the product plus packaging and marketing costs).
•    Overhead cost. This includes all fixed costs (such as salaries, equipment, utilities etc).
•    Response rate. This is the number of responses you receive from your mailing, divided by the number of mail pieces you sent (response rate = total responses/total mailings).
•    Conversion rate. This is the number of people who purchased from you as a result of your mailing.
•    Return on investment (ROI). This is the amount of money you made on your mailing divided by your investment to do the mailing (ROI = net profit/total investment).
•    Break even point. This is the amount of products or services you must sell to equal the sum of money invested to do the mailing (break even = overhead cost/selling price minus product cost).
And these are the rules of direct mail arithmetic you need to know:
•    Rule 1: Ask yourself “What must my conversion rate be at break even, for my assumed selling price?”
•    Rule 2: Only start a direct mail campaign if the most conservative conversion rate estimate results in a break even or profit (a 1% conversion rate is considered pretty good in direct mail terms).
•    Rule 3: (Caveat to rule 2) If you have a healthy back-end (e.g. repeat sales and renewals) it may be smart to gain customers through direct mail even at a loss.
•    Rule 4: Response rates mean nothing! A 1% response rate on a mailing for some products can be wildly profitable (just ask credit card firms).
•    Rule 5: ROI is everything. In the end, what counts is how much money you made on the mailing.
Of course,understanding these formulas, numbers and rules doesn’t provide a guarantee that you will immediately know whether your mailing campaign has been a success or failure. Sometimes, even after a few mailings, it can be unclear whether you have a disaster on your hands or a true winner. The only way you will know is if you test.
Your first mailing should always be small. When you measure your initial response rate, if it is less than 1% then you should change something (e.g. the offer, price, or headline) and then test again.
The initial mailing piece you send is your ‘control’ piece and the response rate from your next mailing should be compared against it. If your response rate goes up then your second piece becomes the control on your next mailing. If you tweak something and your results go down, then your second mailing continues to be your control piece. You continually tweak and test until you have a control piece that is bringing in your desired response rate.
Testing and measuring results is the key to direct mail success – or success in any form of marketing – but only if you understand the numbers and have a grasp of the arithmetic in the first place.

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Funding for Technology Strategy Board to benefit small firms

The Technology Strategy Board (TSB) will raise support for small and medium-sized firms over the next 12 months, as part of its 2013/14 Delivery Plan. The Delivery Plan sets out various measures to support innovative firms to take ideas to commercialisation, including expanding the budget for the Small Business Research Initiative (SBRI) to £100 million, improving the innovation vouchers scheme, and increasing the budget for the Smart grant scheme to £40 million.
Read more about the TSB’s Delivery Plan at:
https://www.gov.uk/government/news/record-440-million-funding-for-innovative-companies

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Small firms missing out on benefits of apprenticeships

Small businesses with a turnover of less than £5 million are missing out on the advantages of apprentices, according to research by Barclays.  Although firms with apprentices typically gain a £214 productivity enhancement per week, small firms are half as likely than larger organisations to take on an apprentice this year, and only 12% of small firms are intending to increase the number of apprentices they recruit. In addition, 39% of firms with between five and nine employees said bureaucracy was the greatest barrier to taking on an apprentice.
Read more about the research at:
http://www.newsroom.barclays.com/Press-releases/Small-businesses-missing-out-on-the-benefits-of-apprenticeships-a2e.aspx

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Awards for successful high-street rejuvenation

Seven towns that displayed innovative ways of invigorating their high streets have been awarded a share of the £1 million High Street Renewal Award, Local Growth Minister Mark Prisk has announced.   These include Altrincham in Greater Manchester, where landlords and retailers worked together to bring vacant shops back into use;  Rotherham, where support for independent retailers led to a rise in footfall on the high street;  and Gloucester, where support for start up and expanding  firms resulted in record new business registrations in the area.
There is more information about the Award at:
https://www.gov.uk/government/news/fund-rewards-high-street-innovation

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New measures to allow premises to change use

Changes to sanctioned development rights will enhance local economies and encourage new business start ups, Communities Secretary Eric Pickles has said. Changes include allowing the classification of buildings for use for retail, financial services, restaurants, pubs and hot food takeaways, offices, leisure and assembly to temporarily change to another use class without ‘change of use’ permission. Also, existing agricultural buildings under 500 square metres may be used for other business purposes and office buildings will be allowed to convert into homes. Mr Pickles said the legislation would “provide a helping hand to those eager to boost their high streets or rural communities by cutting the time and costs needed to start up new businesses.”
Read more about the new measures at:
https://www.gov.uk/government/news/new-measures-to-breathe-life-into-empty-buildings-and-boost-growth

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New Report makes recommendations for micro-business growth

In a new report “Growing your Business: A report on Growing Micro Businesses” Lord Young, special adviser on small business and enterprise, has made some recommendations for the Government to encourage micro-business growth. The recommendations that have been accepted by the Government include removing the age limit for the Start-up Loans scheme from Summer 2013 and launching a new ‘Supporting Small Business Charter’ to urge business schools to play a greater role in expanding the local economy and supporting local business.
To read more about the report, go to:
http://www.cobwebinfo.com/new-report-makes-recommendations-for-micro-business-growth/
To comment on the article go to:
http://www.cobwebinfo.com/new-report-makes-recommendations-for-micro-business-growth/#comments

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Availability of trade credit for smaller firms is falling

The amount of trade credit available to small firms fell by £4.7 billion between 2008 and 2011, according to research by Experian. The research also revealed that the proportion of small firms accessing trade credit fell from 10% to 6.1% over this period. The smallest firms were the worst affected at the beginning of the economic downturn, with a 50% drop in the number of businesses with annual turnover of less than £50,000 being able to access trade credit in 2008 compared to the year before.
There is more on the research at:
http://press.experian.com/United-Kingdom/Press-Release/reduction-in-trade-credit-impacting-smes.aspx

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Support launched to protect small firms from cyber attack

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Almost nine out of  ten small firms experienced a security breach in 2012, this was up 10% on the previous year, according to research by the Department for Business (BIS).   The Technology Strategy Board (TSB)  has responded by  extending its Innovation Vouchers scheme allowing small firms to bid for up to £5,000 to bring in outside expertise to increase their cyber security.  Added to this,  BIS has published a guide to cyber security risk management for smaller enterprises.  The measures follow research published this week by Verizon, which showed that all businesses are vulnerable to some form of cyber attack.
Read more on the scheme and guidance at:
https://www.gov.uk/government/news/support-for-
small-businesses-to-tackle-record-levels-of-cyber-attacks
And:
http://www.computerweekly.com/news/2240182186/Infosec-2013-
Every-business-a-target-of-cyber-attack-Verizon-breach-report-shows

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