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Earlier this year, entrepreneur and founder of The School for Startups, Doug Richard, published his Entrepreneurs’ Manifesto – a “declaration of rights” for small businesses.

The manifesto sets out eight demands to a new government, each of which addresses a different key concern for businesses. In the build-up to the 6 May general election, Donut MD Rory MccGwire is offering his thoughts on the issues raised by Doug Richard.

In his manifesto, Doug Richard argues that business regulation should be streamlined so that people can start businesses more quickly and run them more easily. 

I agree. But in order to achieve this, I think the law must make an important distinction between small and large businesses. They have different regulatory requirements. What is fair and suitable for one is often neither fair nor suitable for the other. 

It’s also important to recognise the natural bias in our regulations, a bias that stems from the fact that regulations are always going to favour the people who make them. So our regulatory system is heavily skewed towards the preferences of the government, the public sector, big business and the trade unions. 

The seemingly simple task of taking a chunk of time off for a family holiday is a struggle for many people running a small business, so it’s hardly surprising that they do not have time to assist in the law-making process. 

Nor do the various small business membership organisations have the power to make much of a difference. Think back to when the government raised CGT by 80 per cent without realising until afterwards that for many small businesses the only “pension” available at retirement is the proceeds of the sale of the business. A £1m threshold was hastily added, but not before it became obvious that the small business lobby groups had not even been consulted on this legislation, let alone listened to. 

Yet it’s small businesses that end up paying the price for so much of the legislation. Take a law requiring organisations to offer wheelchair access to their premises. I’m sure everyone agrees that society wants to help make life less difficult for disabled people. But few people stop to consider who will be forced to pay for the door widening. We all pay for the doors to be widened in the public sector buildings and the corporate buildings, through our taxes, pensions and savings (some of which are invested in listed shares), which seems completely fair. 

But when it comes to all the properties owned by small businesses, it’s the business owner who pays. So if I earn a £20k salary working for the local council or for a big company, I am not affected at all, but if I would have earned £20k from owning a shop, I might be left with just £17k after the adjustments to my shop front. How can that be fair? It’s not. It is merely convenient, both for the lawmakers and for the Treasury. 

It’s the same with employee rights. Nobody questions the need for new parents to spend more time with their children. But who pays? There’s no compensation to any of the small business owners who pick up these costs. In a small business, every member of staff is a key person and losing them, even temporarily, is a considerable blow. Larger businesses have the resources to cushion the blow; small businesses don’t. 

Given that small businesses employ a very considerable proportion of the workforce, I suggest that society ought to compensate small businesses if we all want to have those benefits. If not, you end up with a situation where business owners are terrified of employing women of a certain age. It’s discriminatory, but it happens; the law has massive unintended consequences. 

Sensible regulation is essential to protect customers, employers and employees. But it must recognise the reality of running a small business. 

So much of our business regulation is designed for Hewlett Packard and Rolls Royce, not for “mom and pop” businesses. But, in my view, firms with fewer than five employees should have a completely different set of regulations. If you choose to work for them, perhaps you shouldn’t have quite the same rights as employees in larger companies, simply because these rights amount to robbing Peter (the employer, who is a person) to pay Paul (the employee). But then you would be discriminating against employees of small businesses, which is clearly wrong. 

So the only fair solution is for society (aka the taxpayer) to face up to, and pay for, the cost of implementing all these rights, instead of turning a blind eye while the costs fall onto the shoulders of small business owners. 

Doug Richard is right and all the political parties seem to agree. We need to do something to enable the moms and pops to run their businesses in a more flexible and efficient way. Now let’s see if anyone actually does anything. 

What do you think? 

Rory’s other Have your say! blogs

What do you think about the regulations affecting small businesses? Please leave your comment below.
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Do you have content you would like to share with an interested audience of existing and potential customers? It’s never been so easy to package your content in a stylish way, and distribute it in a cost-effective way. Enter the age of home publishing.

Technology, the great leveller

It used to be that if you wanted to publish a book, magazine, newspaper or show series, you could only do so if you had access to large (and expensive) capital equipment and a workforce of hundreds. Not any more. Web-based applications are freeing up the imagination and putting home business owners in control of how content is distributed. Here are some to get you started.

  • Books – always wanted to write the authoritative guide for your industry/sector? Want to show off your portfolio of photographs or handmade goods in a coffee table style book? Now you can with self-publishing sites Blurb and Lulu.
  • Newspapers – move over, Rupert Murdoch, the home business owners are coming to media town! Become a newspaper publisher with Newspaper Club – the service is currently in beta but you can sign up and see what this tool could do for your business.
  • Magazines – digital magazines are becoming increasingly sophisticated with embedded links to buy products alongside video clips and interactive forums. Take a look at Yudu and Zmags. According to digital publishing service, nxtbook media, advertising in digital magazines is more trusted than online ad banners so for your sponsors and advertisers offering a presence in a digital magazine and on your site offers a good rate of return for them.
  • Audio – speak to your audience by producing a podcast and inviting in guests who can be interviewed using Skype. Click here to read a round-up of features on how to produce a podcast.
  • Video – publish content of you making your product/service or customers saying nice things about your product/service, by using a Flip camera that can be bought for around £90 and comes with only one button so is hyper-easy to use!
  • Online – share content and your expertise in the form of an online slide show using Slideshare.

This list does not even cover publishing content for people to consume whilst on the move ie mobile applications and publishing for devices such as the iPad and Kindle.

Make the most of earning revenue from charging individual subscriptions or secure a sponsor who would like to be associated with your content and the viral way through which you’ll distribute it. Before you know it you’ll be publishing online, in print, and in audio/video, to an audience of interested readers/watchers/listeners. What a business to run from the comfort of your own home!

Emma Jones is Founder of Enterprise Nation the home business website and author of ‘Spare Room Start Up – how to start a business from home’ Her next book ‘Working 5 to 9 – how to start a business in your spare time’ will be published in May 2010.

This blog post was originally published on the Enterprise Nation website.

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There are two ways of starting up a company. The first is to take an existing business idea, and do it better. Preferably you will concentrate on an area where the competition is limited or you have some existing connections.

The second is where you come up with an idea that’s completely new. People think that it’s the only way to make a real fortune, but that’s not true. It may come as a shock, but Bill Gates became the world’s richest man largely by improving on the work of others. He wasn’t the leader in new technologies, but he was close behind. And he did things very effectively.

Microsoft didn’t invent the Windows and mouse interface. It was invented by Xerox at its research labs. Microsoft didn’t even produce the first commercial Windows-based computer. That was Apple with the Lisa. But it did get its timing right, do a plausibly good job and market the product very well. The rest is history.

The problem with developing a totally new concept is that it’s totally new. You are not only selling the product, you have to sell the idea too and educate the market. Even if it would sell, it’s more than twice as much work. If you have all the capabilities you need, with limited resources it is hard to succeed. And it’s even harder to recover from a failure.

The world economy is driven in the long run by breakthrough products. But for your own success, it’s worth remembering that the odds are greatly improved by exploiting an area where a market already exists.

Chris Barling, Actinic

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Small Business 2.0 was held on Saturday 23 January. Now in its second year, it’s an event dedicated to helping small businesses profit from the web. Emma Jones went along and picked up some useful nuggets.

Business at the weekend

One of the reasons I like the Small Business 2.0 event is that it’s held on Saturday. Not only does this mean it’s accessible to 5 to 9ers (those holding down a day job and building the business at nights and weekends) it also means there’s a relaxed feeling about the place as attendees listen, learn, and meet new people in an informal setting.

These ingredients came together well on Saturday and were the recipe for an interesting and enjoyable day. Here are a few things I picked up:

  • A bit of trivia – the first item ever sold on eBay UK was a Scorpions CD at the price of £2.89. 
  • eBay has more than 17 million monthly unique visitors and offers more than 15 million items for sale. There are 123,000 full time eBay businesses, generating more than £1.7 billion per year in turnover. To date, $600million worth of business has been driven through the eBay iPhone application. The company expect this to become an even more popular way to shop. 
  • E-commerce continues to climb: the numbers of people shopping online – and the amounts they are spending – is increasing at a rapid rate. So it’s still a very good time to be starting an online trading business.
  • Customers are becoming more demanding: the majority of customers expect their online shopping experience to be as good as, if not better, than an offline shopping experience, placing the onus on the store owner to make it as simple and enjoyable as possible. 
  • The secrets to success in creating a successful online venture can be summed up as having:

– Great products
– Competitive prices
– Outstanding service
– Giving something back (eBay report that even though sellers participating in eBay for charity give 10 per cent of the sales price to charity, their products are 20 per cent more likely to sell, at a better price. This resulted in $50 million being raised for charity in 2009).

  • Enterprise is alive and well: I met a number of people in the early stages of starting a business, from Domino Duhan who is soon to launch Flog.com as a place to create a free online store, to Steven and Zoe who travelled from Worcestershire to pick up tips for their new venture selling cottage gifts.

Altogether, there was a great vibe and positive signs that 2010 will be another exciting year for anyone starting and growing an online business.

Emma Jones is the founder of Enterprise Nation and author of ‘Spare Room Start Up – how to start a business from home’. Her next book ‘Working 5 to 9 – how to start a business in your spare time’ will be published in May 2010.

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This week, Doug Richard, former Dragons’ Den investor and founder of the School for Startups hosted a ‘bootcamp’ for social enterprises in London. Much of the day focused on comparing businesses run to generate profit for shareholders with those run to create a social impact. Just how “business-y” should a social enterprise be?

Richard attempted to answer the question by focusing on the realities of running a social enterprise in a competitive marketplace. Here are eight lessons that every social entrepreneur would do well to bear in mind:

  1. Don’t assume that being “good” is good enough. If the sole difference between your social enterprise and other businesses in the same marketplace is that you are “ethical”, ask whether that is enough in itself. You may need to rethink your offer or your business model.
  2. You’re in the business of marketing and selling something to somebody. Whatever your ethical objective, you can’t achieve it unless you are selling people something they actually want. Like any business, you need to know your customers, understand your market, and so on. As Doug Richard puts it: “Understand the industry you are in and you can understand how to prosper within it.”
  3. People will not queue up to give you money. Just because you are doing “good”, that doesn’t mean people will lend to you or invest in your business. The “market” is mostly indifferent to the good that you do; your enterprise has to be strong enough to survive on its own terms.
  4. Do one thing and do it well. Successful businesses tend to have one type of expertise; those trying to do too much often over-reach themselves and fail. “A narrow business is better than a vague one,” according to Richard. Whether it’s the thing you’re selling or the thing you’re giving, do one thing and do it well.
  5. You don’t have to be a “social enterprise” to be a social enterprise. The legal forms of social enterprises (such as Community Interest Companies) are still evolving and you may find they limit your capacity to grow. There’s nothing wrong with being a limited company with a social purpose. Richard advises going down this route and incorporating your ethical aims into your company memorandum and articles. (NB: this can be a confusing area as this blog by The Capable Manager explains. Mi-Tee have also kindly offered to share their solution to this problem if you contact them via their website).
  6. Present your cause in a way that actually engages people. As Julie Devonshire of Global Ethics Limited, which runs The One Foundation, puts it: “You have to make your cause so brilliant that people will not just listen but will get off their backsides and act for you.”
  7. Try to avoid paying for anything. Global Ethics Ltd got BT to give them £3.3 million of human resources. They also paid just £293 for a television advert that would normally cost £200,000. Do everything in your power to persuade people to give you things for nothing.
  8. Don’t give it all away. Says Doug: “You need to give away exactly as much as your business model can afford to sustain and to grow.” It’s obvious really; if you’re giving everything away, you have nothing left to develop your enterprise so you can give even more away in future.

Simon Wicks, BHP Information Solutions

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Red Hat entered the stock market in the summer of 1999, breaking records on its first day of trading. As Bob Young explains, the company closed their first day at three times the offering price they had set. Although a great feat, he was also acutely aware that rapid success would turn the eyes of the financial world onto his business and there would be no room for error.

For a start up business, how concerned are you about growing your business too quickly?

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It’s not easy starting up a business. From initially having the courage to realise your idea, to seeking advice and then facing the endless scrutiny that surrounds your new business – there is a certain amount of thick-skin needed to even make it to the starting line. In this video, Eden Project co-founder Tim Smit talks about the qualities needed to survive in the tough world of entrepreneurship.

Smit talks of process and creativity. As an entrepreneur, how did you manage to stay positive while dealing with the range of skills needed in starting up a business?

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