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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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Eye-catching PR for your small business needn’t be costly

Category : Business

Startups can do the job of raising awareness of their business in-house. All they need to do is put in a bit of time and creativity

PR can be a valuable tool in promoting your business. However, you must put a great deal of thought into the way you approach PR: it is really important, before plunging into a spate of activity and promotion, that you have an interesting story to tell.

Coverage in the press will raise awareness of your business. To a consumer, reading an article about your business in a well-regarded publication can indicate endorsement.

To budding entrepreneurs who have just established their startup, all minor achievements or successes are likely to equate to pivotal milestones. Whenever a milestone is reached, it is tempting to shout each success from the rooftops and send press releases out to every publication at every opportunity in a somewhat scattergun approach.

This can be an error, though. I would advise that you sit down and think about whether your achievements are significant and valuable enough to publicise. Given that there are thousands of business stories every day, ranging from large corporates launching new products to exciting young entrepreneurs that have caused a stir, a press release regarding the launch of your website is unlikely to capture the attention of a journalist.

So, how do you make your milestones newsworthy? How do you identify that angle that will capture people’s attention? You think outside the box. Think about what is trending in the press and how you can link your business to that angle.

Experiential marketing agency Cult Events, one of the Start-Up Loan Company’s recipients, have spent a great deal of time thinking about what angle will capture journalists’ attention. Hugo and Ian, the founders behind Cult, have decided to build memorable niche events, theming them around a concept relevant to current trends or brand campaigns. To help publicise Cult Events they have conceptualised Pisco Fuego, a pop-up Latin American dining experience which takes the pop-up trend back to its “blink and you’ll miss it” origins. These days, there are pop-ups that last for years, some that have developed into pop-up franchises and still more seem to scrawl the word pop-up on a chalkboard outside their restaurant in fear of missing out. Pisco Fuego will pop up for a few days at a time in various London locations, leaving people wanting to know and find out more. This story is far more likely to be picked up by journalists over an article about what Cult Events is, outlining the fact they are hosting an event.

Once you have the angle, then you can start utilising PR techniques. As a startup you are unlikely to have the required budget to allocate a substantial sum to PR, but with limited experience you may be tempted to approach a PR firm. In my experience, entering into lengthy retainers with PR firms isn’t necessarily the best option. There is no guarantee they will get you in the press. I learned the costly way when I established Hamilton Bradshaw that you can hire the best PR firm, but the lack of a decent story will result in you not making the papers.

If you are prepared to work hard, PR can be free. Undertake research on the internet. There are numerous free resources out there that provide advice on how best to devise a strategic PR campaign. Use all the contacts that you have in the industry. Work hard on producing concise and interesting press releases. Make direct contact with journalists. Partner with carefully selected complementary businesses. Cult Events has assisted at events at cost price when it knows that there will be press exposure at these events. One good media placement can lead to increased sales or growth. The PR around Cult Event’s Pisco Fuego has resulted in an increase in traffic to its website and 10% of these visitors have converted into ticket sales through its Facebook page. This is a great example as to how a well thought-out, thorough PR campaign can be cheap yet effective.

James Caan is chairman of the Start-Up Loans Company

Each fortnight James will be tackling a different business issue; keep up to date by visiting the network and signing up to our weekly newsletter. We’d welcome your suggestions for future topics and questions for James regarding your own business. Please share them in the comments thread below

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Britain is turning it’s back on co-operative insurance

Category : Business

Plans to sell off the Co-operative Group’s insurance operations will mark a historic shift, while appetite for co-op insurance continues elsewhere

The Co-operative Group recently announced that it wants to sell off its general insurance operations. If it goes ahead, it will mean the end of almost a century and a half of co-operative insurance in Britain.

The original Co-operative Insurance Society (CIS) was set up in 1867 to provide fire insurance for the rapidly increasing number of retail societies within the co-operative movement. In 1912, it became part of what is now the Co-operative Group following a take-over by the co-operative wholesale societies.

Despite suffering a £662m loss, the group maintains that the general insurance sale is still part of its strategy, following the sale of its life insurance and fund management business. Barring last-minute regulatory issues, Royal London is set to acquire this side of the old CIS business for £219m.

But although Britain is turning its back on co-operative insurance, the rest of the world is not. The desire of co-operatives to be able to insure with one of their own — rather than through a commercial insurer — has allowed successful insurers to become established throughout the global co-operative movement. Indeed, the world’s largest co-operative, Zenkyoren, gets its massive £70bn annual turnover from servicing the needs of the country’s agricultural co-ops.

Zenkyoren was set up in 1951. Six years earlier, a similar process in Canada saw the creation of what has become the Co-operators insurance company, now operating throughout the country. It markets itself on its co-operative ethos and principles and has taken a particularly strong line on issues around sustainability and corporate social responsibility. Like Zenkyoren and most other co-operative insurers, however, it is not directly owned by individual members: it’s a ‘secondary co-op’. It is collectively owned by a consortium of forty-five Canadian co-ops, credit unions and other organisations who jointly appoint its board and share its financial success.

And the impulse which led to Zenkyoren and the Co-operators is still very much alive. In Malawi, for instance, credit unions and co-ops are working hard to create their own national co-operative insurance company. The country’s federation of savings and credit co-operatives, MUSCCO, which already offers basic loan protection insurance, is making common cause with agricultural and consumer co-ops to try to raise enough capital to license a new insurer.

But collectively, co-op insurers are feeling rather chipper at the moment: the market share of the total insurance business held by them has been climbing since the financial crash. According to the International Co-operative and Mutual Insurance Federation (ICMIF), the insurance market share held by co-ops and mutuals has climbed from 23.7% in 2007 to nearly 27% today.

ICMIF is unusual among the international sectorial co-operative federations in having opened its membership to mutual insurers as well as co-operatives. It’s CEO, Shaun Tarbuck, argues that this growth is a direct result of popular disenchantment with shareholder-owned financial businesses with their focus on short-term profit maximisation. “I think organisations that have a values-based strategy are much more appealing to the general public,” he says.

He accepts that, until recently, co-ops and mutual insurers were often coy about promoting their different governance structure, but he says this is now changing. “We’re definitely seeing a trend towards organisations marketing their values, whether this is based on their being member-owned, on sharing profits or on business sustainability,” he says.

This sort of positive endorsement is a welcome turnaround from the situation during the dark days of demutualisation. Britain was particularly badly hit as, one by one, major mutual insurers like Standard Life, Norwich Union and Friends Provident followed the well-trodden building society route and turned themselves from member-owned institutions into plcs. Because of the demutualisations, Britain has now the smallest co-op and mutual market insurance share of any major economy, at around 6%.

The largest remaining life and pensions mutual is Royal London, so at least the Co-operative Group’s former life business will remain in the broader co-op and mutual family. The sale of the general insurance is much less advanced and could conceivably still be cancelled as the group tries to rebuild its long-term strategy following the Lloyds bid withdrawal. But, in the event of a sale, it would sell re-badged insurance products under the Co-operative Insurance name.

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The cultural shift to get more women into boardrooms must begin at start-up level

Category : Business

Just 7% of executive directors in FTSE 100 companies are female. For the situation to improve, more women need to engage with businesses at start-up and SME level

The UK has many great examples of female entrepreneurs, just look at Karren Brady, Annabel Karmel and JK Rowling to name a few. These highly successful women operate in a range of industries and have pushed through a number of boundaries to get where they are.

Many people’s first management experiences occur while they are in small or start-up companies (SMEs). However, there are fewer women than men in the UK creating small businesses. The country has a strong, high-performing SME sector, with 99.9% of all businesses falling into this category. SMEs employ an estimated 13.8 million people, accounting for 58.5% of the total private sector workforce. Small business activity is a key driver of economic success, with SMEs contributing almost as much as large businesses to UK output (48.3% of gross value added) and turnover (48.8%). The shift towards getting more women into UK boardrooms starts here.

Women are much less likely than men to be involved in the setting up and running of businesses according to Office for National Statistics self-employment data. Of the 4.2 million people in the UK who report that they were self-employed, 71% were men and 29% women. However, this is still an improvement on the percentage of women who sit on Britain’s boards.

The lack of women in boardrooms is self-perpetuating, which is why we must change our business ethos at start-up level. Often, chief executives seek out people like themselves to be their colleagues and therefore their future replacements: this is only human nature. It is no coincidence that women are far better represented on the boards of companies that have been founded by women.

Interestingly, I’ve noticed that women approach business differently to their male counter-parts. They’re known to be a lot more cautious and intuitive, and I find that this can add a new dynamic to a business. Personally, I look forward to working with female entrepreneurs – their approach and professionalism has been instrumental to the success of many businesses.

Anyone, no matter the gender, can be an entrepreneur if they have the right idea, the right plan for execution and passion. The idea alone is not what makes an entrepreneur; it’s what you do with the idea and how you execute it that really sets you apart. If more start-ups that are created by women this will result in an increase in the number of women in the boardroom. We must start by inspiring young people to aim for the very top, no matter their gender.

The Start-Up Loans Company, of which I am the chairman, was created last year to help young people bring their business dreams to life. Every young entrepreneur who receives a loan is also provided with a business mentor and access to discounted resources.

Of the first 2000 loans that have been awarded, 65.7% have gone to male and 34.3% to female applicants. This is already a considerable improvement on national self-employment statistics, which I hope will continue to increase.

Credit Suisse published a report in 2012 entitled: ‘Gender diversity and corporate performance’, that looked at nearly 2,400 American companies with and without female board members between 2005 and 2012. Their report discovered that the stock of companies with at least one female member on the board outperformed the stocks of companies with all male boards by 26% during that period.

With this in mind, can the UK afford to deny ourselves similar growth?

James Caan is an entrepreneur and chairman of the Start-Up Loans Company

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Stephanie McGovern: Why quotas are dangerous and undermine women’s credibility

Category : Business

The BBC’s business correspondent recalls being told: ‘I didn’t realise people like you were clever’ and explains why blagging it is a good idea

I am a young woman, with a regional accent, from a working class family, who has had a pretty standard education. So far, so ordinary. But in the places I’ve worked, one or more of these things would put me in the minority.

When I was 18 I joined Black & Decker as part of a pre-university ‘year in industry’ scheme. At that time it was a business full of men who had been there for years. When I turned up with my youthful enthusiasm and stilettos I was a novelty. Some tried to chat me up; most ignored me. I’d gone from being top dog in school to underdog in the workplace, so I made it my mission to show them that I was useful.

That, along with some cheeky banter, eventually won them over. The team accepted me as one of their own and the success of my work there lead to me winning the ‘Young Engineer for Britain’ award. After that I got interviewed a lot by the media. I was a journalist’s dream case study; a gobby girl with an accent who was good at engineering.

Through my media appearances, I managed to wangle a part-time job in the BBC current affairs department, which I did whilst studying for my science degree. Being a woman wasn’t a novelty to my BBC bosses — lots of women work in the media – this time I stood out because I had a northern accent.

I remember once at the end of a BBC job interview the manager said to me: “I didn’t realise people like you were clever.” I don’t think he was being intentionally nasty. At that time in the BBC he was surrounded by clones of himself, give or take some facial hair and glasses. He had never worked with anyone ‘like me’ before and so thought he was taking a risk by employing me. Later I found out that he’d also told the rest of my team that ‘someone very different was joining who would stir things up a bit’. Fundamentally though, I’m not any different, I just talk differently.

The problem in business isn’t that women are overlooked because they are women, it’s that most people subconsciously look to employ a mini-me. It’s not a gender issue, it’s about diversification full stop. It’s hard to change that mindset and it hits women particularly hard because men historically have always been the recruiters.

Recently I was involved in a debate at Macquarie Bank looking at how businesses can make their employee pool more diverse. One of the panellists was Noreen Doyle, a senior executive with over 40 years experience as a business leader. She suggested that for women to do well they need to take on a more male mindset and ‘blag it’. She added: “There’s a 80:20 rule. A job opens and women who feels she meets 80% of the criteria, applies. A man will say, ‘I have 20% of the criteria – I’ll learn the rest on the job.’ “

When I joined BBC Breakfast I was surprised by the number of viewers who felt that the BBC was doing something radical by putting me on national news to talk about business. I wasn’t what they deemed a typical BBC reporter. There was a misconception that I was there to fill some type of BBC northern quota. Yet I had been working for the national news for 10 years and been involved in making lots of our most high profile programmes. If I were a stick of rock I’d have ‘BBC’ written right through me.

This is why quotas for women in business can be dangerous, because they can undermine the credibility of the women who get top jobs. It’s a view that I’ve found is shared with other women at the top of their game. Eithne Wallis told me that in her role as the founding director general of the National Probation Service, she didn’t support quotas but said that without diversity targets the status quo would prevail: “The achievement of diversity in the workplace is critical to its effectiveness as well as being an ethical issue.” But, she added: “Positive discrimination was absolutely not allowed. It was instead, about creating the culture, end to end systems, and level playing fields to ensure that appropriate access and advancement was made available to all.”

There is an assumption that if you’re in the minority in the workplace then you’ll have a harder life than most. Personally I have had a wonderful career so far, but what has been vital is having champions; people in the business who mentor you, but also sing your praises to others. Mine have fought battles for me in work and taught me that if you know what you’re talking about and you work hard then you don’t need to fit a preconceived mould. Your genetic makeup and upbringing is irrelevant, it’s how you use your ability that counts.

Stephanie McGovern is business correspondent for BBC Breakfast

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Top tips for growing your business

Category : Business

Last week a panel of experts advised readers on how to expand their small businesses. Here are the best bits from our live Q&A

Jemma Wilson, founder of Crumbs and Doilies, a cupcake baking business which launched in 2006

Sourcing supplies at wholesale prices: Finding wholesale suppliers can be difficult. Some wholesalers are a little bit stuck in the past (I have one supplier who still supplies the catalogue on a CD-rom). Also, you would be surprised how much price can vary between companies supplying similar products. Make sure you get a few prices before choosing a supplier and try and use as few suppliers as possible. This will cut down on delivery charges and staggered supplies. It’ll probably cut carbon emissions too.
Use the phone to get in touch with potential suppliers. In my experience I have received the best service when dealing with a real person. You can build up a relationship with your supplier which can help down the line with cost cutting and problems.

Personalising packaging: There are lots of things you can do to regular stock packaging to make it yours. Stickers are a perfect example. We now have all of our packaging custom-made, but in the early days and until not so long ago, we used boxes and other types of packaging that were held in stock with our suppliers and we simply pasted our flyers or stickers on to them. Sounds ropey but it actually looked really great. Getting custom packaging made can be incredibly expensive so make sure you shop around for the best prices.

Andy Lopata, expert on networking strategy the author of three books on networking

Getting the word out: The golden rule with all social networks is to ‘engage rather than broadcast’. People don’t want to be sold to on social networks. They want you to listen to them, share useful information and get to know you. Frustratingly, this takes time but you sow the seeds to reap the rewards over time. Use Twitter or Facebook to get know your audience and position yourself as an expert and resource for your potential clients and the people who influence them.

James Gill, partner at The Pen Company, a family business which sells upmarket stationery

Ensuring good cashflow: A potentially sound and successful business can fail due to poor cashflow management. For someone starting out I would recommend:

• Get hold of an accounting package. Your accountant will probably have a favourite that he or she likes to work with and will recommend.

• Enter all of your invoices, payments and income regularly – once a week is good. Reconcile your bank statement as soon as it arrives. This way you will know exactly how you stand and will be able to see your commitments at least one month ahead. Estimate future income realistically.

• Negotiate with your suppliers: once you have a relationship with them, many suppliers will give extended terms to customers they trust. They may also be prepared to supply in smaller volume more regularly if you ask, although you will incur more delivery charges.

• Be realistic: don’t assume things will automatically go well, just because you want them to.

• If you see a problem looming, confront it. Contact the other parties that may be affected and explain the situation, what you are doing about it and ask for their co-operation. Knowledge is power and the more information you have the better decisions you will make and the more accurate your planning will be. Keep on top of the stats.

Simon Calderbank, client director for Acquire New Business

Recognising the importance of your brand: Branding is so much more than a logo. Your brand is the emotional reaction someone has when they say your company name – it’s everything they think and feel about your organisation. Think of your brand as a symbolic representation of your company, from the way you deliver your service and the advice you give to the way you answer the phone. It’s the sum total of everything you do to interact with your customers, colleagues, suppliers and market.

Imran Merza, co-founder of Jealous Sweets

Knowing what help is available: Depending on the type of business there are a few options, such as the enterprise capital funds. They are government-backed venture capital funds that aim to invest in fast-growing small businesses. I think getting a business mentor is probably the best way to move forward, someone who can give you tailored advice.

Alex Cohen, founder of Xander Marketing with more than a decade of experience in the field

Recognising the best marketing channels: WIth any marketing channel it’s worth asking ‘What is the purpose?’ first. Just because other people are on Facebook or other businesses are on LinkedIn, it doesn’t necessarily mean you should be there. You could try going door to door? What about sending an email with a free white paper? Maybe send a gimmick through the post or advertise in a trade magazine? There are lots of options and sometimes with marketing it’s a case of trying a few and seeing what sticks. I would try a few channels and see what works.

Annette Du Bois, co-founder of Smangel (Social Media Angel) and author of Big Profit Thinking To Stop Your Small Business Sinking

Having a good mix of strategies: The most important thing is to know who your customer is and what you’re really selling to help you maximise your efforts. Most of these are about sowing seeds to farm in the future. One of the gems that a lot of business owners miss is in the ‘follow up’ process, think of it as relationship marketing that continues to build the trust and credibility to make it easier for people to buy from you.

Gillian Harris, managing director of Gilliangladrag

Working with freelances: I employ quite a lot of freelances and tutors at the shop. Always make sure it’s kept business-like. They are indeed your employee, as you are paying their wages, but that doesn’t mean you can’t be friendly. It’s just important to establish the working relationship from the offset – to make sure they are working for you in the way you want them to.

Taking on employees: Sometimes it’s really difficult to let go and not be a control freak. But unless you can give your employees a degree of responsibility they won’t work to their potential. So sometimes it pays off to let go of things you really shouldn’t be doing. This allows you to move forward yourself and expand your business.

It is risky taking on employees – and all the associated hassles that that brings. But sometimes companies can’t move forward until they do. The most important thing is to find the right people, so keep looking until you do.

It’s worrying to think that your employees might run off with your customers and go and do their own thing, but you need to remain confident in what you do, and try and find staff who just want a job and aren’t entrepreneurial themselves. It’s just a question of advertising and interviewing until you find the right person.

Click here to read the full Q&A

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Is local government out of sync with Croydon’s Silicon Valley?

Category : Business

Jonny Rose questions whether local government has the infrastructure to support tech start-ups, but says councils have an important role in championing their success

You might not think of digital innovation or entrepreneurism when you think of south London but a collective of nearly 400 people from Croydon and the surrounding areas have united under a vision to make Croydon south London’s very own Silicon Valley.

Croydon Tech City, a community of software developers, creatives, venture capitalists and tech start-up founders, launched their proposal to make Croydon an attractive home to early-stage digital and tech businesses last year. The project was, in part, a response to a perceived lack of action by local policy makers in the wake of the 2011 riots.

Tech start-up communities are at the forefront of rejuvenating local economies. According to figures from Companies House London’s Tech City, a cluster of more than 600 technology and creative startups around Shoreditch and Clerkenwell, saw a 40% year-on-year rise in company incorporations and was responsible for 76% of all growth across central London in 2011.

The nature of tech communities is that rather than being introspective and siloed in the world of business, they also have a tremendous capacity to positively impact local education, culture and the arts. Beyond an immediate need to redefine Croydon and rejuvinate the community, there are more long-term prospects.

Forward-looking cities are increasingly committing to becoming smart cities. This phenomenon is particularly acute in America, but there are equivalents in the UK too, such as Newcastle, Cardiff, Dublin and Norwich.

However, while tech ecosystems of various guises and maturity have been around for many years in the UK, local government still finds itself playing catch-up. This is unsurprising as the world of local government is profoundly different to the dynamic world of tech startups and the ecosystems they are part of.

The structure of local government is hierarchal: there are chains of command and various rungs of bureaucracy; it is top-down, siloed and highly regulated. In contrast, tech startup communities are highly networked, deregulated and ultimately bottom-up entities with a loose affiliation of leaders working in parallel on different initiatives.

In Croydon a programme to get coding clubs into local primary schools is being overseen by a partnership between youth charity Lives Not Knives and software behemoth Dotmailer, while Croydon Creatives – a monthly developer meetup – is planning a variety of hackathons in the borough for late 2013.

The cadence of local government is largely out of sync with the long-term view needed to support emerging tech ecosystems like Croydon Tech City. Governments run in electoral cycles of four years which rarely concord with the immediate needs of tech startups. While incumbent local government can create wide ranging plans and do long-term studies, they rarely act quickly on specific initiatives.

It also doesn’t help that local government – if campaign and council literature are to be taken seriously – don’t seem to understand the differences between small and medium sized enterprises (SMEs) and high-growth entrepreneurial businesses, and insist on conflating the two. This is further exacerbated by the fact that very few people in local government have a background as entrepreneurs, much less tech ones.

Consequently, the interaction between local government and tech startup communities can be awkward, ineffectual and unproductive, and to tech entrepreneurs on the outside, local government can seem monolithic and impenetrable.

For me, the differences between local government and tech startup communities are almost too pronounced for there to be any hope of reconciliation.

That said, the one place I see local government helping tech startup ecosystems is not as a service provider or facilitator (a moniker I increasingly hear cash-strapped councillors use), but that of champion and marketing channel; a conduit by which the work of the tech communities on the ground can be made to resonate in the corridors of City Hall.

Whatever the ideological colour of the local council, there is something in every tech ecosystem for local government to shout about.

Jonny Rose is the founder of Croydon Tech City

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Secret Social Entrepreneur | Why defining social enterprise is important

Category : Business

Explain briefly and clearly what social enterprise is – create a tagline to reflect the ideals of the organisation and its social aims

As a director of a medium-sized social enterprise that delivers youth facilities and services through a customer-focused revenue-generating model, I met recently with the local council leader to seek his support for some new facilities we hope to add.

His opening and rather blunt gambit was to accuse: “If this was a business, you’d be bankrupt”, swiftly followed by every social entrepreneur’s favourite question: “What’s in it for you?”. Ignoring, as I always try to, the urge to ask whether he opened his meetings with local charities in the same way, I countered with a slightly surprised, “well, it is a business, and we’re not!” and proceeded to spend the best part of an hour explaining to him what social enterprise is all about, and how what’s ‘in it for us’ is, heaven forbid, earning a living doing something worthwhile that delivers social value for the community.

Sadly, five years into my social enterprise journey, still being somewhat affronted by this kind of attitude, I am more resigned to it than shocked. It belies a suspicion about social enterprise that those working on the ground in the sector must face and deflect on an almost daily basis. And it continues to reflect a failure, for sure on our part as an organisation, but also collectively as a sector, to get an effective message out there into our communities about what social enterprises are and why we do it.

More than just ignorance, the leader’s questions implied an underlying suspicion about motivations — one that, importantly, serves to differentiate us from the traditional charity sector. On the whole, and certainly at the small-scale community level, directors of charities are not and cannot be paid for their work. This is sufficient to allay suspicions, especially when combined with a model of delivering services for free funded by grants or fundraising. Equally, if we were just charging for services as a private sector company in pursuit of profit, that would be straightforward.

But in social enterprises, even wholly not-for-profit ones like ours, where directors can be paid (even if they often are not), mixing up the commercial approach and the social motivation simply confounds. In the context of an ill-defined, and little-understood model, we must instead be ‘in it for the money’ – a laughable irony that will not be lost on most readers of this column. Or even worse still, in it for the money while pretending to be in it for the social good.

Echoed in this is the hand-wringing debate of the sector’s higher echelons about ‘fake’ social enterprises, and certainly that muddies the waters, but it is not, fundamentally, the point. This leader didn’t ask these questions of me because he was aligning our organisation with some multi-million pound business masquerading as a social enterprise in order to make huge sums out of public sector contracts in health or prison services. Rather he asked because, on the ground, in local communities, the concept of delivering social good in an enterprising way is simply alien.

It matters that we do something to change that. It matters not just because it is demoralising and depressing, but because it is by collaborating and working in partnership that social enterprises and public sector bodies will maximise the social impact they can have. They can only do this if they understand one another and if the communities of which they are an increasingly integral part understand them in turn.

Without this understanding, in which definition plays a key part, social enterprises face an uphill battle against the tide of half-truths and suspicion that is all to quick to fill the clarity void.

While I hesitate to do so, seeking this clarity means entering the lofty discussions that continue unabated, be it in conference halls, meeting rooms, or virtual networks, about defining social enterprise. From my position on the ground, I don’t think this is about the issues that sometimes preoccupy those involved in it – be it about how and why social enterprise matters, deciding on the ‘legitimising’ proportion of traded income or the distinctions between companies limited by shares or by guarantee.

What we need is to develop and use a simple tagline that encapsulates in a nutshell what social enterprise is all about. Most importantly of all, we need to communicate that message widely and with gusto if we want the sector to live up to the current hype and achieve its hoped for and much-lauded transformative impact.

So what is the tagline to be? Well, the guy who runs our social enterprise on a day-to-day basis, can often be heard telling bemused teenagers who are being encouraged to become part of the CIC membership: “We’re like a charity only we earn our own money.” It is a simple sentence that conveys both our social motivation, and our commercial approach.

To read more pieces from our Secret Social Entrepreneur, click here. To write for the column, email Joe Jervis

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Every business should be efficient, but how do you pin down your strategy?

Category : Business

Business efficiency can often be achieved by implementing a number of small changes. Matt Levington shares his suggestions

Many company owners might think that greater efficiency derives from applying some sort of overarching process change to a business, perhaps tied to a new IT system that gets the company’s employees accounting for their time in crushing detail all day long. I take a different view.

Efficiency comes from doing more of what’s most profitable in your business, and less of what’s least profitable.

How? Try this: nearly all companies are selling a range of products or services, but not many smaller companies have ever found the time to analyse the profitability of the different parts of their proposition. Usually, they have an array of customers and markets that they serve, but no clear vision of which ones are worth more and which are worth less.

An analysis of the situation – of each customer, potentially, and certainly each product line or service – will get you closer to the truth of your business. What you find might be surprising, but the effort will pay off.

Because the reality for many companies is that some customers will have become unprofitable. The cost base can change, what’s being delivered can incrementally increase in an effort to please – and suddenly that trophy customer is now losing you money.

It can be a painful process to go through, there’s no escaping that. Pricing may need to change, and there may be a cleansing process to reset the client mix or move existing clients onto a different footing. Those aren’t easy steps to take but they are necessary to run an efficient business.

The other side of the efficiency equation is getting staff working really effectively, which usually comes down to having greater clarity around everyone’s respective roles. To get the ball rolling, a staff engagement day can help, followed up by analysis of which staff to retain and in some cases re-train, and which roles need to be recruited for or phased out.

Companies grow organically – but not always logically, because needs change all the time. One question to ask, with efficiency foremost in your mind, is what structure today’s company would have if you took a blank sheet of paper and started again. What you come up with is not necessarily something you’d look to apply in practice, but you can learn a great deal.

Remember, the end goal is getting people working more smartly, more accountably and more efficiently as individuals – and aligned to and motivated by a shared goal that they can believe in.

And this last point is crucial. If you clearly define the contribution of every individual it becomes straightforward to reward excellence simply because the company now knows what it looks like.

Profit-sharing and other kinds of rewards can be fantastic tools when properly applied. If you can give individuals confidence about the role they are performing and its importance, and clarity about the benefits to be had if they deliver, then you’ll often see productivity soar.

Being in business is about teamwork. So look to make individual efficiency, targets and rewards part of the mix, but also work hard to develop a sense of shared ownership among staff to get the best out of them. Team targets and rewards could well be part of that, but at the very least you should be engaging with everyone about the vision for the company.

You can’t expect the best from your people if any of them feel like passengers – they have to be involved at every step of a company’s journey if you want them efficient and motivated. Once they are on board, though, the sky’s the limit.

Matt Levington is the founder of Business Doctors

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Social enterprise lessons from Mumbai

Category : Business

Alex Mitchell explains the themes at the heart of entrepreneurship in India’s commercial capital

Recently I was invited to Mumbai by Young Indians to address the inaugural Commonwealth Asia Alliance for Young Entrepreneurs summit on behalf of Young Brits and the G20 Young Entrepreneurs Alliance. During my time in the city I got to visit some remarkable micro enterprises and meet some quite amazing social entrepreneurs. I wanted to share two of the lessons I learnt from these individuals, who from the outside seem to have the odds stacked against them, but all share a will, determination and ultimately a desire to bring about a real change.

From the moment you step off the plane you are hit by it, your senses are over powered by it and you will not escape it. It pulls you in and wraps you up. In a word, it’s ‘enterprise’.

Enterprise is everywhere, from stall sellers in the airport to the cabbies pitching for your business outside, the street sellers trying to get you to buy anything from leather jackets to balloons and the street food sellers with a dazzling array of dishes. This is a city where business is not just a part of its being, it is its being.

With a population of over 24m, 7m using the trains everyday (slightly less than the population of Switzerland), 5.5m using the buses daily (roughly population of Denmark) and the equivalent of a third of the worlds population making a train journey every year, this city is busy. At first glance it might seem chaotic, but it is organised chaos, everyone knows what they are doing, where they are going and there is a very real sense of a want to create work, business and money from them and their families.

This was the first of two lessons I learnt; it is all about the family.

I spent a day in the worlds most densely populated slum Dharavi, which sits in the centre of Mumbai, it houses over a million people and it wasn’t what I expected. It was safe, the people living there were welcoming and rather than there being a feeling of depression everyone I met was aiming to create a better life for them and their families. And by family I mean it in the widest possible sense.

Communities working together, creating a degree of financial independence through enterprise. In Dharavi alone there are over 10,000 businesses operating in sectors like leather, pottery and recycling. I came across larger business outside of Dharavi outsourcing the production of chapati’s to women within Dharavi, this not only provided a small income, but crucially it gave women a degree of buying power and therefor equality within the family unit.

And then there was the emphasis on education. The young children in Dharavi were immaculately turned out attending daily classes on English to math’s. Education was seen as a key way out, with the people I met seeing community enterprise as vital in helping their children to a brighter future.

Isn’t this what true social enterprise really is? Helping each other, providing support and opportunity for all, creating a better future for yourself, your children and the wider community.

There was no hiding away from it, life in Dharavi is tough, extremely tough, it left me with a lasting impression of how lucky we are. But what I did see was that through a community spirit that delivers practical solutions brought about by enterprise, there was a glimmer of hope.

My second lesson is taken from Mumbai’s world renowned dabbawalas.

So who are the dabbawalas? They transport home cooked food in dabbas (tiffins) from the homes of people who work in the city to their offices and back again. On a daily bases they move over 400,000 dabbas and have over 200,000 customers. The really interesting thing about the dabbawalas is two fold. First, they have no formal education, they are from poor backgrounds and they are recruited as dabbawalas to provide them with a skill and a career. Second, they use no form of telecommunication or IT system. It is all done by a coding system on the lid of the dabbas.

Now here is the amazing thing, they have an error rate of one in 16 million deliveries!

So why have I picked the dabbawalas as a lesson? They have been operating for 122 years, have a work force of over 5,000 people, operate a very flat structure with their board still doing deliveries and all pay is equal. So everyone is dependent on each other. Also every dabbawala is able to negotiate with their customer on the price point per delivery. They are trusted to be truthful and honest, to share all their earnings and negotiate sensibly.

It is an enterprise which has been answering a social problem for over a 100 years, they have been giving career opportunities to those in society with little or no education. And they have done this by trusting their work force and giving them real financial responsibility.

The lessons I learned in Mumbai where basic. But we often seem to forget the basics. We either focus on the next ‘big thing’ or we say it is up to someone else to sort out. Whereas it is actually up to us all to make a better future for ourselves, our families and our communities, be they local or far.

I recently said ‘all businesses will be social enterprises’ but I don’t think I got it quite right. All businesses need to be, but we all must be more social in our outlook. What I saw in Dharavi and with the dabbawalas shows what I feel is the true essence of social enterprise, delivering real change through communities and individuals addressing some of the countries toughest challenges. This is something we can learn from Mumbai. A collective responsibility and a shared awareness that will help make society better for all.

Alex Mitchell is director at Young Brits Network, a social enterprise aiming to provide a global voice for young British entrepreneurs

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Credit unions offer viable alternative to high street lenders

Category : Business

About 400 credit unions currently operate in the UK, and their influence is growing

Britain’s youngest credit union, in the industrial Cumbrian town of Barrow in Furness, has just been celebrating its 100th membership application. Barrow and District Credit Union, the fruit of much hard work and planning over many months by a committed group of volunteers, received its authorisation from the Financial Services Authority just before Christmas.

It begged and borrowed the necessary furniture, and opened its doors of its office just off Barrow’s main shopping street in February. Since then, little by little, the money has been coming from its members. Their savings and surplus cash will form the capital pool which, in due course, the credit union will be able to lend back to those of its members in need of affordable loans.

At a time when the payday lenders have been under media scrutiny for their astonishingly high interest rates (the Guardian recently reported the case of one lender charging more than 16,000,000% APR), the credit union way of providing financial services seems almost too good to be true. Loans are currently set at a maximum rate of interest of 2% per month (26.8% APR), for example. But despite more than 20 years of trying, Britain’s credit union movement is still struggling to get attention. Compared with Australia, say, where a quarter of the population are credit union members, or the US where credit unions claim 95 million members, the British movement still has a long way to go.

Barrow certainly seems ready for its credit union. “There’s a lot of payday lenders and cash-your-cheque-here places. There are some illegal loan sharks operating as well,” says Rob Cairns, the credit union’s chairman. Having taken retirement in 2011 from his job as chief executive of the resolutely local Furness Building Society, he has since found himself back in the world of financial services, this time in a lay capacity. The plan to set up a credit union in the town goes back four years, he says, and has been actively progressed by a local steering group for two years. Until last month when the doors were opened, Barrow was the most economically deprived town in Britain without its own credit union, he adds.

His credit union is now taking it a step at a time. Its recently appointed general manager is currently being funded by a charitable foundation, but the business plan suggests full self-sufficiency within three years. The next step will be to begin lending. After that Cairns hopes the credit union will be able to encourage regular savings by partnering with local employers. “That’s on the action list – we need to get payroll schemes established,” he says. He is also keen to ensure the credit union appeals to all in the local community, not only those on low incomes. “We need people who have some spare cash, to provide the funding for those that don’t.”

Credit unions – effectively financial cooperatives, controlled by their members – are now regulated by the FSA, which means members’ savings are protected up to £85,000, in exactly the same way as they would be in banks or building societies.

Barrow’s planned route forward to long-term sustainability is one being followed more generally by Britain’s credit union movement. The main federation the Association of British Credit Unions Ltd (ABCUL) met for its annual conference earlier this month aware that the days when revenue funding support (often from sympathetic local councils) could be obtained are passing.

ABCUL’s chief executive Mark Lyonette sees benefits in sloughing off the old dependency culture. “It is actually a weakness if you come to rely on financial support,” he says. Instead, he points to three major new opportunities opened up for credit unions by legislative changes last year.

One reform is that credit unions are now able to offer interest on members’ savings, rather than simply offering subsequent dividends. “This puts us on a par with building societies and will make a big difference,” he says. A second change sees the membership ‘common bond’ broadened, making it easier for credit unions to attract members nationally. Membership is for the first time also opened to organisations, and ABCUL hopes that housing associations and community organisations among others will be tempted to put some of their reserves with their local credit union. “This will have a knock-on effect on credit union credibility,” Lyonette says.

The past decade has seen Britain’s credit unions consolidate and merge, so that from a peak of about 700 individual credit unions there are now roughly 400 operating. The two largest, Glasgow Credit Union and the police officers’ No 1 Copper Pot (Number One Police Credit Union), both have assets over £100m and offer sophisticated financial services for their members. Thirty or so offer basic current account banking and many more provide pre-paid Visa cards for members to withdraw their money through ATMs.

Lyonette sees scope for both the large professionally managed credit unions and the small-scale volunteer-only organisations, such as are sometimes linked to churches. But he also points out that relying on unpaid workers does run the risk that a credit union can simply run out of volunteers. In general, he is keen to see credit unions collaborating more with each other, including developing shared back-office processing and administration.

One possibility is that the Post Office network may be available as a point of contact for credit unions. “I think that’s likely to happen within two or three years,” Lyonette says. More generally, the government is offering up to £38m to support the infrastructure development of the movement through the credit union expansion project. Credit unions may have a key role to play later this year when benefits are reformed and universal credit introduced, not least in helping members budget to be able to pay their housing costs.

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