PRIME business club

Are some of your customers stars, bringing in money, skills and enhancing the reputation to your business? And are others quite frankly duds, bringing you hassle and actually losing you money on each sale?

Simply asking these questions can lead you into making some useful changes to the way you do business - so you do more work for the customers who are better for you.

But sometimes it isn’t obvious who the heroes and villains are. So here’s a 10-step technique  that will help you identify them.

Calculating what a given client is worth to you

1. This works most simply in businesses where you have a few clients, but if you’ve got a lot divide them up into meaningful segments that you can find or estimate figures for - e.g. those who buy food and those who don’t, the Monday crowd versus the Saturday crowd or whatever. It’s also more accurate if you do it for a longer time period, so quarterly is better than monthly, but don’t worry if your records don’t go that far back.

2. Next you need to know your own hourly staff costs. In an established business this would be the salaries plus all the costs of making someone productive - office space, equipment and so on. However in a start-up where there’s just you and you are not paying yourself much yet it may be hard to come up with a plausible figure. For this exercise a rough approximation will do. So you could just say £10 or whatever you think is reasonable. We are going to apply the same figure to all clients so it still makes for a fair comparison.

3. Now for each client or segment you are interested in tot up the total hours you spent on them last quarter, and multiply it by your hourly staff time figure. Add in any other significant hard costs like travel or material spent on that client. That will give you the cost of that client.

4. Now check what they brought in last quarter. You can keep things fairly simple. If you invoice in bigger chunks divide it up to give you a quarterly figure. And for segments tot up the quarterly income for the group - gross, without deducting any costs.

5. Subtract the cost of the client you worked out at step 3 from what they brought in. The result is a fair approximation to their relative monetary value to you.

6. Next the important bit - the fiddle factors. We all know some clients are reliable and easy to deal with, while others are a pain. So think of a fair monetary value in pounds per quarter for the joy (add) or pain (subtract), and apply this hassle factor to the value score.

7. We also need to recognise that some clients are valuable for strategic reasons - perhaps referring business to us, allowing us to build up valuable expertise or taking us in the direction we want the business to go. So we need another fiddle factor to recognise this strategic value. Again add an appropriate positive amount in pounds to any client taking you in an exceptionally useful direction, subtract money from clients who lock you into dead-end work you’d rather avoid and leave average clients alone. This gives the overall “value” of the client to you.

8. Now repeat from step 3 to 7 for all the clients or segments you wish to compare.

9. You should end up with a set of numbers, with best clients scoring high and your worst low. Note that because of all the approximations and the inclusion of intangible fiddle factors the number doesn’t represent the actual profit from each client. For that you’d need more real data, which you should eventually accumulate.
Nonetheless, this exercise is legitimate and does tell you something important. The high scorers are bringing in the most value to your business in the broadest sense. The low scorers are more of a drain and repay your efforts less. So if you have uncovered any serious duds or brilliant stars you might want to drop the duds and work more with the stars should the opportunity arise.

10. One final step may make identification of heroes and villains easier. Divide the value figure for each client by the number of hours you worked for them, which you’ve already totted up at step 3. This removes the amount of business you are getting from them from the equation, and gives you more of a pure customer-quality score. The high scorers are the ones you probably want more business with.

Date: Monday 31st March 2008, 10:00am to 4:00pm

Venue: Age Concern Training Centre, Suite 10 Bridge House, Bridge Street, Walsall, WS1 1JQ.

Status: PRIME Event 

Free workshop for people over 50 running their own business or thinking about starting up. Help on business computing and finding the right direction for you.

To book your place on this workshop please contact Martin Sarling on: 07717 151 168 or Free phone: 0800 783 1904
Email: martin.sarling@ace.org.uk

Printable flyer 31.03.08

Date: Friday 28th March 2008, 1:00pm to 4:00pm

Venue: Oceana, Bilston Street, Wolverhampton, WV1 3AW

Status: PRIME Event 

Free workshop for people over 50 running their own business or thinking about starting up. Help on planning your future and finding the right direction for you.

To book your place on this workshop please contact Martin Sarling on: 07717 151 168 or Free phone: 0800 783 1904
Email: martin.sarling@ace.org.uk

Printable flyer 28.03.08

Garry Stephenson, 55, has set up an innovative photography company just months after being made redundant.

Garry, from Cannock in the West Midlands, was made redundant at Christmas from his job inspecting motor homes for a large local vehicle importer. His company SkyHiFotos.co.uk offers photography from an unusual angle – taken from the top of a special 50-foot mast.

Garry himself stays on the ground, controlling the camera from a laptop which shows the precise view being photographed. The Canon digital camera is attached to a motorised tilt-and-swivel head tilt he can control with his mouse. Garry is fully insured and is using professional equipment designed for this application – the extensible aluminium mast has wide legs and can be secured with guy ropes and pegs for extra stability when fully extended.

In addition to taking high shots made possible by this equipment Garry will also take ground level and interior shots to offer a full service. “I’d like to specialise in aerial photography”, he says. “But when you are first starting out you’ve got to do what you can – and go where the money is.” That said, he is keen to get work that allows him to develop his speciality – hence the Sky Hi name he has chosen for his business.

He first got the idea from the Internet. “I saw a pole advertised, then looked into what types there were, what they could do and what they cost. I found that I could get something suitable for not much more than buying a good fishing rod and all the kit.”

“For me it ticked all the boxes. Firstly something I could start almost as a hobby, but then secondly something I could work with as a business. And then thirdly something I could keep doing into retirement.”

Garry had always been a keen amateur photography. And indeed, over the years he had done some weddings for friends.

But aerial photography is what got him seriously interested in taking up photography as a means of making a living. It gave him what marketers would call his “unique selling point”.

“I could be a wedding photographer – along with about 200,000 others”, Garry explains. “Or I could be an aerial photographer – and one of about probably 50 maximum in the UK.”

Garry got little warning of the redundancy from his previous job. He heard in November that his employer was thinking about redundancies and then got his notice at Christmas. He received the basic statutory redundancy package (see below) rather than an enhanced package, so he needed to start earning again soon.

“At 55 it’s very difficult to get a job unless you want to be stacking shelves at Tesco or Asda. That’s not what I am. I was already thinking I could be doing something in photography. But when the redundancy came along it pushed me into it faster.”

Garry did get some advice on turning his hobby into a business from the Institute for Innovation and Enterprise, based at Wolverhampton University. He got a total 10 hours one-to-one business mentoring spread over a number of sessions.

“It was useful in that it took me in directions I would not normally have gone – it opened my eyes to other possibilities. By yourself you tend to get into a fixed frame of mind.  If that doesn’t work you sort of fall flat on your face. With mentoring your thoughts open up to more possibilities. So eventually you do find your own niche.”

Garry’s advice to others is to get your business underway whilst still in a regular job if at all possible. “Get a couple of contracts in place fast to get the money flowing in. Work it around your existing job if you can, before deciding to go fully self-employed. It’s easier if you are already in work. I wasn’t quite ready when I was made redundant.”

Contacts:

Garry Stephenson sales@skyhifotos.co.uk
Tel: 01543 425753, 07523 897968 (mob)

Innovation and Enterprise
University of Wolverhampton University
Tel: 01902 518960
Email: innovation@wbs.wlv.ac.uk

More about redundancy pay and notice

How much notice you get and the amount of redundancy pay you are entitled may be written in your contract of employment. But there are legal minimums which you are entitled to anyway, and these depend on your age and how long you have been working for that employer. Legally you are entitled to one week’s notice for each complete year (up to a maximum of 12) if you’ve been continuously employed for two or more years after the age of 41.

The rules are fairly involved. There’s a useful calculator at the Direct Gov site.

If you are faced with redundancy it is also worth checking out the independent site Armchair Advice.

The story of Madame Tussaud from women’s enterprise site moretolifethanshoes. And here’s the biography at the modern London wax works site. A pioneer of the cult of celebrity, Mrs T didn’t get her business going till her forties.

Philip Black has recently been made redundant at the age of 57. This programme in the Radio 4 Learning Curve strand follows him round London Olympia, talking to various exhibitors at the One Life Live show about what if anything they could do to help.

Back in the studio, presenter Libby Purves interviews Laurie South of PRIME, asking him whether self-employment can really offer a solution to Philip and people like him.

Listen to full programme

All the 150-or-so books from WeBooks.co.uk can be read for free online. The publisher makes its money if you buy a normal paper book or a printable PDF version should you tire of tabbing through page-by-page. But it is perfectly practical to read the whole book for free online, or at least dip into the relevant sections.

Here are some of the titles in the business list.

Book-keeping and Accounting for the Small Business
(Peter Taylor) A useful guide to managing accounts & choosing accounts software, as well as information on double entry bookkeeping, double entry accounts and small business tax.

How to Start Your Own Gardening Business
(Paul Power) All about starting a business in the gardening industry, including writing a gardening business plan, financing the business and managing the accounts.

Preparing a Winning Business Plan
(Matthew Record) A full guide to writing a business plan. It explains what a business plan is, why you need one and how it should relate to your business idea, objectives and projected growth.

Raising Finance for Your Business
(Mark Blayney) Covers funding a business, getting a business loan, as well as looking at the lending market and other sources of finance.

Raising Start-Up Finance
(Phil Stone) Covers different ways of building capital, sources of finance including business grants and business loans, as well as how to assess the true cost of borrowing money.

Setting Up a Complementary Health Practice
(Patricia Bishop) Setting up a health business, including information on working from home, the start-up costs involved, marketing your business and achieving a healthy work-life balance.

Setting Up and Running a Limited Company
(Robert Browning) How to start a limited company, from writing a business plan and choosing a company name to dealing with company accounts.

Start and Run Your Own Business
(Alan Le Marinel) Guidance on starting and running a business, tips on preparing and managing accounts, and ways on raising business finance.

Starting a Business in the Country
(Wendy Pascoe) An in-depth look at starting a rural business - including start-up costs, rural advertising, working from home, marketing and research.

Starting a Sandwich - Coffee Bar
(Stephen Miller) How to set up and run your own coffee and sandwich business, from planning and creating your own identity, to hiring staff, sourcing suppliers and the daily running of the shop.

Starting and Running a B and B
(Stewart Whyte, Nigel Jess) Covers starting and running a small bed and breakfast business, including conducting a feasibility study, writing a business plan and financing the business.

Starting and Running a Catering Business
(Carol Godsmark) This guide includes a wide range of information, from writing a business plan, marketing, promotion and retaining customers.

Starting Your Own Business
(Jim Green) From the initial start-up costs, writing a business plan and marketing your business, to the different types of businesses and how to go after government grants.

Starting Your Own Childminding Business
(Allison Lee) Detailed guide to starting a daycare business, including the regulations, start-ups costs and running the business.

The Kitchen Table Entrepreneur
(Paul Power) Covers the initial stages of starting a business, including conducting market research, writing a business plan and self-motivation.

Owners of small businesses selling all or part of their business will only pay capital gains tax at 10 per cent. Months of speculation about changes to Capital Gains Tax were finally clarified in the Chancellor’s 12th of March 2008 budget report.

The 10 per cent rate applies only to the first £1 million of assets sold during a person’s lifetime. This so-called “Entrepreneur’s Relief” is a response to criticism of the original proposals.

These would have treated people selling small businesses they had laboriously built up themselves in the same way as big private equity firms that just buy and sell assets - hitting both with the same high rate

Tax expert Penny Bates comments on the BBC site

More about tax and disposing of a business at the HMRC site

In other budget news, the Small Firms Loan Guarantee scheme will get extra funding to encourage the banks to lend small businesses they might otherwise consider too risky. And a new capital fund will be set up to encourage female entrepreneurs to grow their businesses.

Other measures are promised to make it easier for small firms to bid for public sector contracts.

Date: Wednesday 19th March 2008, 9:30am to 2:00pm

Venue: Alison Business Centre, 39-40 Alison Crescent, Sheffield, S2 1AS

Status: PRIME event

This beginner’s workshop will help you come up with and develop your ideas and use your skills.
You will then begin to make a decision on whether you would like to work for yourself. 

The workshop will focus on:

~ using your skills and talents

~ developing your business idea

~ the basics of being self-employed

To book your place on this workshop please contact Faye Banerjee on:0800 783 1904
Email: faye.banerjee@ace.org.uk

Sheffield 19th March Printable flyer

Date: Tuesday 18th March 2008, 10:00am to 2:30pm

Venue: Pudsey Civic Hall, Dawson Corner, Cote Lane, Pudsey, LS28 5TA

Status: PRIME event

This beginner’s workshop will help you come up with and develop your ideas and use your skills.
You will then begin to make a decision on whether you would like to work for yourself. 

The workshop will focus on:

~ using your skills and talents

~ developing your business idea

~ the basics of being self-employed

To book your place on this workshop please contact Faye Banerjee on:0800 783 1904
Email: faye.banerjee@ace.org.uk

Pudsey 18th March 08 printable flyer

Date: Monday 10th March 2008, 9:30am to 2:00pm

Venue: Cantley Community Centre, Goodison Boulevard, Cantley, Doncaster, DN4 6DF

Status: PRIME event

This beginner’s workshop will help you come up with and develop your ideas and use your skills.
You will then begin to make a decision on whether you would like to work for yourself. 

The workshop will focus on:

~ using your skills and talents

~ developing your business idea

~ the basics of being self-employed

To book your place on this workshop please contact Faye Banerjee on:0800 783 1904
Email: faye.banerjee@ace.org.uk

Doncaster 10th March 08 printable flyer

The British Library, located between Euston and Kings Cross stations in London, runs a regular programme of workshops on business and intellectual property topics.

The workshops are generally aimed at a small business audience, last a few hours, and are either free or cost a few pounds. But they are often crowded - advance booking is essential.

Here’s a list of selected topics in the next month - click for more on how to book.

Many past talks by inspirational entrepreneurs are available in the podcast area of the site.

The library itself holds a large collection of market research reports, fact sheets on starting different sorts of business, and a searchable database of patents. To use these you will need to get a reader pass, but this again is free.

These services are partly funded by the London Development Agency, but are available to people from across the UK.