Features

Free Advice

“The best piece of advice I got from the Business Link website was the part on the Research & Development tax credit. I could not believe we were eligible for it at first, but we were and we claimed it and that was worth £100,000 to us in cash.” Alex cheatle, Founder Ten Lifestyle Management Ltd.

New research from a You Gov poll has shown that SMEs around the UK spend up to £100 million on ‘free’ advice.

In addition to this, the independent Anderson review headed by Sarah Anderson and Business Link’s recent report studies also showed that the UK are spending unnecessarily on external consultants and advisors to help manage their HR obligations, such as calculating staff holiday allowances despite free advice being offered on websites such as Business Link.

The top areas in which respondents from smaller business pay for advice were revealed to be in the following areas:
Calculating staff NI contribution.
Writing business contracts; such as a new staff contract for an employee.
Managing maternity and paternity leave. Furthermore, almost one in six of those that pay for advice, 13%, admit paying consultants to help calculate staff holiday entitlement.
The research identifies the reasons behind the huge additional financial burden self-imposed on the UK’s small businesses.

To a certain extent certain key factors have played a large role in this missed opportunity for SMEs. The You Gov survey found a ‘lack of confidence’ to be the first key trait. With over half of those polled, (52%) said they do so because they do hire out consultants because they do not know enough and just under one in three (30%) worry that they will get it wrong if they do not call upon external advisors.

The second factor was a definable ‘knowledge gap’. Where almost a quarter of owners polled (24%) felt they were not eligible to manage their employment obligations themselves. One in five respondents (21%) thought they needed a professional qualification to give staff a new contract and a quarter (26%) of all small business employers surveyed believe they need a qualification to dismiss staff or make someone redundant. Thirdly, and most crucially, the main crippling factor was the distrust in free advice as the poll revealed more than half (53%) do not believe they can comply with employment obligations through free advice.

The vast majority (96%) of small business leaders surveyed said the best piece of business advice they had received had been free directly contradicting trends. Here we take a look at the importance of real advice, that is entirely free and unbiased by people who have needed it the most, entrepreneurs.

Andrew Pearce
Founder
Powwownow
“We established Pow Wow Now four years ago. We went and researched the idea of alternative conference calling, having used it ourselves we were aware of the expenses involved. There was a similar service in the US, so we changed the model to have it work in the UK and created a great value business, customers don’t get a bill from us they simply pay for the call.”
Hot tip: “There is a huge amount of online resources available, membership clubs and forums are also available where you can chat with your peers. My best advice came from a networking event when someone advised me to change our brand name. Having now taken that advice on I think it’s helped my business both internally and externally. Internally, by making my staff believe in our funky young brand and work culture, reinvigorating the company and externally in the way people perceive us. Again, it was invaluable free advice. There are websites out there that are not credible so you do have to choose what you read, but there is a common misconception amongst SMEs that advice that you buy is more valuable. We spend so much money on advice from lawyers, business advisors and accountants but a lot of it can be done from your own home and save you a great deal of cash.”

John Charles
Founder
Catering2Order
John Charles set-up Catering2Order after successfully graduating from the Visage business incubation project and ruthlessly manages his books to ensure every penny goes as far as it possibly can.

The company is comprised of a team of 15, who currently service a portfolio of small public and private sector contracts in south east London. The company was recently awarded a contract by the Olympic Delivery Authority (ODA) to provide catering services to the Olympic construction site in east London and is going from strength to strength.

HARRY BRIGGS
Founder
Firefly Tonics
“We produce and retail refreshing juices and energy drinks. I started Firefly because frankly we were tired of drinking and seeing sugar filled juices that tasted like Eastern European bubblegum! I thought couldn’t we make juice that was filled with real fruit and nutritious extracts? We have now grown to reach a £2 million sales mark this year and Firefly is now retailed across 30 different countries. As an entrepreneur you can never really think you have enough money to spend. Every penny always counts as you hang on to your break-even point and it’s always a bit further than you think.”

Generally when you start off it’s easy to get bogged down on details but you have to be open to advice from wherever you can get it and from people who can keep you focused on the big picture. You don’t really have money to start paying consultants at the start, so free advice has to be valued. It’s natural to distrust advice that is free or think it’s worthless but you have to realise that the majority of sources need to be good because they need businesses to succeed. What goes around comes around, SMEs are a vital part of the economy and so people generally want them to succeed.

I love giving people advice when I can because I value enterprise and what it does for society. When you’re running your own business, it’s really important to get the legal side of employment right. Even without the luxury of legal departments, it’s actually not that hard to manage employment obligations in-house.”

Hot Tip: “Brian Meehan who co-founded Fresh and Wild, said the key thing for sustaining our growth and attracting investment was keeping the top line growth and gross line margins steady and ultimately every other part of the business would grow from that.
Ultimately no-one can advise you better than an entrepreneur. They will take you through their mistakes and trials and hopefully also inspire you all over again. In addition, the patent office and Business Link were very helpful when it came to exporting advice and copyright at the start of the business.”

Alex cheatle, Founder
Ten Lifestyle Management Ltd
“Essentially, what we do is lifestyle management for people both in their professional and personal lives. For instance we have a service that assists head teachers and one that helps peopIe green their homes.”

“The idea for the business really came from what I wanted to both do and be associated with. I wanted a model that could grow into a large company and something that would be eternally useful and that I would be proud of. I thought to myself, if it’s going to be a new concept business I need to relate it to new trends. We thought that people in a modern world want a personalised service they could trust so we did a lot of research on what people needed help in. The feedback was that we were being asked for the same type of service over and over again and so I thought we could set up a digital knowledge management that could organise people’s lives for them in a cost effective and quality driven way. I actually built my concierge business with the help of free advice from family, friends and mentors. If professional free advice is available and it provides all you need to comply, you should act on it.”

“The Design Council was an excellent source for us and they helped us understand the green element of our business. Customers are also another good source of advice and the most valuable.”

Hot tip: “It can be extremely daunting to hire someone you believe to be sharper than you, but it has been the making of my business.”

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