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Essential tips on market research, record keeping, credit control, being a better boss and how to stay compliant with quality, environment and health & safety legislation.
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YBC Newsletter Issue 2 June 2015

 

A monthly update of news, views and helpful tips

Welcome to the second edition of the YBC Newsletter.

This month, we're focusing on useful tips for start-ups and small businesses. 

The Government has just published the 2014 Small Business Survey and it seems that confidence in this sector is improving...so much so that 73% of SMEs are planning for growth. However, only 28% feel confident to enter new markets and 66% are worried about competition.

That's not too surprising, we can all feel a little hesitant about entering unknown territory. So, we've put together a useful guide on market research and how you can use it to explore new market opportunities, or just to make sure you stay one step ahead of the competition.

We'll also be looking at some of the other areas of running a business that can seem daunting and asking:

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Market Research...a guide for Start-ups and Small Businesses
Whilst experience, common sense and intuition may tell you a great deal about your chosen market, some more in depth research to establish the viability of your new product or business venture is often necessary. Unfortunately, the market research industry is prone to jargon and can seem incomprehensible to beginners. To help you get to grips with this essential business tool, let’s look at some of the most common methods of research and explain how you can use them to better understand your market.

Desk Research
Often the fastest and cheapest option, this simply means analysing available information on the market you wish to research. This could include:
  • Published research from companies such as TGI, Mintel or Euromonitor
  • Online research from Google and other search engines
  • Trade association research
  • Trade magazine research
  • Government statistics and surveys 
If your business is already up and running, you should also look at sales reports, stock records, company accounts, customer records and customer complaints.
 
Whilst desk research is a quick and easy way to get a broad overview of the market, it can be out of date and lacking in detail. It is best used to identify areas for further research.
 
Quantitative Research
Uses surveys, questionnaires or panels to ask large samples* questions like:
  • How many?
  • How often?
  • Where from?
It then measures and analyses the answers to produce objective, numerical data for analysis and interpretation. The research can take place by phone, online or in the street.
 
It is most commonly used to calculate:
  • Size of a market or segment
  • Brand share
  • Frequency of purchase
  • Customer attitudes
  • Customer satisfaction
  • Customer loyalty
If you’re just starting out, you could use it to estimate the size of the market, estimate the sales you might achieve or how to target potential customers.
The easiest way to conduct your own Quantitative Research is to email contacts with an online survey using a free provider such as SurveyMonkey. Adding a question to an omnibus survey is also a relatively cost effective way of collecting demographic data, as well as responses to a specific question.
*A representative sample will reflect the group from which it is drawn. The larger the sample, the more precisely it reflects the target group.

Qualitative Research
Provides non-quantifiable, subjective information based on the opinions of a small group of selected individuals. It uses open ended questions to find out why people buy and how products meet their needs.
The two main qualitative methods are depth interviews and focus groups, both of which can be used to:
  • provide more depth to the understanding drawn from quantitative research
  • suggest the reasons for a trend
  • tap into consumer creativity when developing new products, packaging or advertising
However, both these techniques need highly skilled researchers, which puts them out of the price range of most small businesses.

Observational Research
This is carried out by simply observing customers in real life situations, without their being aware. For example, a Mystery Shopper could take notes on:
  • how customers shop
  • which products interest them
  • how your staff relate to them
This type of research can be relatively quick and easy to set up. It doesn’t rely on people giving opinions, being honest, or using their memory. It simply shows how people actually behave, what they buy or how they react to certain conditions. If you can experience it first hand by keeping a log of how customers behave, it may give you a better insight than other research methods. However, it can be time consuming and it is open to misinterpretation.

Which type to choose?
Whichever type of research you choose, make sure that you first define your objectives:
  • What do you want to know?
  • Why do you want this information?
  • How will the information you gather be used in your decision making?
Jackie Wilson Dip.M MCIM Chartered Marketer
Blue J Marketing

Jackie is a Chartered Marketer, Doncaster 100 Mentor and Yorkshire Business Collective Advisor with extensive management experience across a wide range of industry sectors and a passion for delivering effective marketing solutions.
Why record keeping is essential
It is vitally important to keep accurate records for your business (whether sole trader or limited company), the penalties for failing to do so can be very strict – including a jail sentence!
 
It is so much easier if you start keeping records from the very beginning of your self-employment or start of business and keep the habit going…keep all receipts for purchases and records of sales to customers using a method that suits you (can be electronically or paper receipts but it must be done). HMRC will accept small mistakes if you can prove you have tried to keep full and accurate records, but there is no excuse at all for failing to keep reasonable records.
 
As with everything, there are many ways to records the necessary transactions for your trading activities and it pays to take advice on what will suit you and your business.

Catherine Wainwright ACMA CGM
What is Credit?
Credit is an important area which is often not taken into consideration when starting a new business.
 
It starts when you offer your first invoice on terms, 30 days, 60 days etc.

It is the vetting process you employ to ensure that you are happy that the customer will repay, but also that he has the propensity to pay.

Credit Risk
Before you take on a new customer, you need to ask yourself some questions:
  • Are they a good risk or a bad risk?
  • How likely are they to pay on time?
  • How likely are you to receive payment in full?
Credit control
is the process used to manage each credit account:
  • setting a credit limit for each account 
  • issuing reminder letters 
  • following up on late payments
  • monitoring payment times and increasing or reducing the credit limit dependent on how the customer pays.
  • rescheduling the debt
  • taking any necessary legal proceedings
Getting to grips with Credit Control can make the difference between risking your money, or managing your risk profitably.
 
What kind of a boss are you?
Being the boss can be a thankless task. Are you the only one who seems to care? the only one who uses initiative?  The only one who worries about customer satisfaction?  There may be a reason…

  WHICH BOSS WOULD YOU LIKE TO WORK FOR?
  Boss A Boss B
General focus I know what needs to be done and so I direct and prioritise day to day workload accordingly I know where we are going and what success looks like. I bear that in mind and talk about it often.
Attitude to staff Someone has got to be there to keep people in line. To manage processes; attendance; sickness; payroll Let’s work together and commit to doing a great job. I want staff to love coming into work.
Communication style I give clear instructions (written or verbal) and am fair to all I like to listen and know what matters to each person
Staff development I ensure that people have the necessary qualifications, skills and training to do their job properly Let’s get the basics covered then find peoples potential to be excellent.
Statutory duties Someone needs to supervise to ensure compliance with legislation, Health and safety etc. Its tedious but necessary.
 

 
Let’s all understand why this is important and yes allocate responsibilities, but we all need to ensure that it happens.
Driving results I expect people to turn up and work hard I like to agree clear goals that are achievable but ambitious
Recognising success We all get paid to work hard-that’s reward I like to recognise achievements and give credit where it’s due.
 
Emotion What’s that got to do with work? I am passionate and enthusiastic about what we do and everyone knows that.
Catch phrase When the cats away, the mice will play. We’re in it together
 
Research tells us that without doubt
  • HAPPY STAFF LIKE TO TURN UP FOR WORK
  • APPRECIATED STAFF GO THE EXTRA MILE
  • ENCOURAGED STAFF DELIVER BETTER RESULTS.
 
WHAT WOULD IT BE LIKE TO WORK FOR YOU?
How will you manage quality in your business?
One of the many decisions to be made by a new start up is how the business will be promoted and what quality controls will be required.

This may be a decision that is made by either the owner, opting to promote the business as a provider of high quality goods and/or services; or by customers demanding goods and services to a prescribed national or international standard.

Management may decide to do nothing and let the business take its natural course, or they may subscribe to the requirements of an internationally recognized standard and have this verified and approved by an authorized third party. This will require a documented Quality Management System (QMS).

The form of the QMS will depend on the size of the business, the products and services being supplied and the customers’ expectations.

At the very minimum, there should be some form of procedure to review orders placed on the business, ensuring the requirements are fully understood and the means of their execution are at hand, or can be procured easily at a cost that does not make the order uneconomical.

Alternatively, QMS can be described through meeting the requirements of an international standard such as ISO 9001,
where the business’s controls, inspections, tests and continuous improvement activities are described in a documented manual.

The decision will be a strategic business decision because, whatever form of QMS is agreed upon, time, resources and money will be required. However, such a business tool will have positive economic results in the form of:
  • reduced delivery times
  • less cost with respect to nonconforming products
  • enhanced customer satisfaction resulting in more orders.
In future articles, the positive aspects of documented QMS and the elements of such systems that are essential, or give the most payback, will be explored.  
What are your legal obligations to your staff, the public and the environment?
The requirements of Health, Safety and Environment do not allow the owners of a business to do nothing. Any business, large or small, start up or mature, has to meet statutory legal requirements.

Health and safety regulations address the requirement to operate a safe environment for those working and visiting the business and the public at large. A statutory duty of care is applied to all operators of businesses.

The approach to be taken will be proportionate to the size and the nature of the business activity. 
For the majority of small and low risk businesses, the necessary initial steps are straightforward.

Find out what statutory requirements apply to your business activities and start understanding the hazards and risks associated with these activities. This may be undertaken by a competent person within the organization or with the help of outside assistance. The HSE website is a good place to start.

Businesses whose activities are larger in scale, or more hazardous in nature and/or whose customers demand more transparent controls, will document their activities in a Health & Safety Management System Manual addressing the requirements of OHSAS 18001. This manual must be available to, and auditable by, interested parties. The manual may also be approved by an accredited third party. 
     
Environmental
Pollution under the Environmental Protection Act is defined as the release of any substance into air, water or land as a result of any process which causes harm to man.

Further to this, businesses are expected to use raw materials and energy in the most efficient manner.

A business must understand its statutory legal obligations, which may be both national and local,  and provide a duty of care to the environment.

The approach taken will be proportionate to the size and nature of the business activity.

The local authority and water providers will need to know the nature of the business activity and its wastes, so ensuring statutory legal requirements are known and met as a minimum.

The company must review its environmental aspects and impacts, which essentially are those aspects of the business that change the environment either negatively or positively.

A business can address its obligations in an informal manner, or by documenting its controls in a management system addressing the requirements of BS EN ISO 14001, either accredited by a third party or not.  

Subsequent editions of this newsletter will explore the various essential elements of Health, Safety and Environmental Management Systems. 
Coming next month...

more helpful tips from our experts to help you grow your business:
  • Six essential elements of good a press release
  • How to manage your cash flow
  • How to get the best from your employees
  • Putting Quality at the core of your business
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Our Experts

Credit:                                         Mal Peacock

Finance:                                       Catherine Wainwright

Marketing:                                    Jackie Wilson

Quality, Environmental, H&S:           John Wilson

Leadership & Staff Development:     Cath Winfield   


You can find out more about our experts, their qualifications, experience and the services they offer by visiting our website:


http://www.yorksbizcollective.com

or email us: info@yorksbizcollective.com 
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