A budget for business?

For the last few months I have been engaged in a simple, yet seemingly naive quest to get some clarity from each of the political parties on their policies for small business.

So far, I have had a hand-off from the Labour Party – who, about a month ago, promised me a reply within 15 days; an apology from David Cameron – who said that my first communication couldn’t be found and would I send it again – so he could ignore it again; and nothing from the Lib Dems – who you think would sell their own mother to get a cross in the box.

At least Alistair Darling has been forced to the dispatch box today to give me and every other business owner in the country, an account of what we can expect in the coming months should we entrust Labour with our vote.

The answer appears to be a series of modest, but well intentioned changes.

The Annual Investment Allowance, which gives us tax relief for capital expenditure, has been doubled to £100,000. Whilst the increase will provide a modest boost, it is only businesses that have the cash or the borrowing capability to invest above the current limit of £50,000 that will be able to benefit from it. Even if the allowance is fully utilised, it would only be worth £14,000 a year.

I, and I think most businesses, would prefer direct savings in tax and National Insurance over incentives to spend or borrow when business confidence is low and the availability of credit remains scarce. Liquidity is the key to our survival – not debt and new machinery.

In this respect, the Chancellor shows that he is out of touch with the real needs of small business. He spurned the opportunity to reduce the headline rates of corporation tax and made no move to stall the 1% rise in employers’ NI, which is due to take effect from April next year: a clear sign that he believes taxing businesses on employing people is the best way to reduce the dole queues.

The promise of cuts in business rates for one year from October is more promising. There seems to be scant detail available on who will qualify and for what relief, but let us not look a gift horse in the mouth – nor get our hopes too high.

The extension of the time to pay scheme is another welcome move. We haven’t needed to make use of this facility, but it is nonetheless reassuring to know that HMRC will play its part should we find ourselves in distress.

For the best news, it seems we have to wait until our ship finally comes in. Entrepreneurs’ relief has been doubled from £1m to £2m, providing an effective Capital Gains Tax rate of 10% on any gains that we make up to this level. Best get my finger out then and build some value.

The biggest factor though is not the impact of individual measures on individual businesses, but where the economy is going in general – nationally and globally. Business is about confidence and when the confidence runs out the impact on small businesses is cataclysmic.

We are in the midst of our worse crisis for seven decades and our vote has to be cast on who with think is delivering the most sensible response. Do we believe that the impact of the recession has been minimised by the present government or caused by it? Do we think that we need to make the present government see through its actions or is it time for change?

Darling has been forced to err on the side of caution and avoid any radical changes for fear of it being branded electioneering. I, like many business people in the South East, see it as a missed opportunity to give a much clearer indication that the Labour Party is the party for business.

The question remains, who is?

Real Business #3 - Escape Events

Real Business is a series of posts that analyses the marketing opportunities and challenges of real businesses in the South East. The articles are also appearing in The Courier.

Escape Events is the brainchild of West Malling resident, Martin Anslow.

Martin has a background which combines both exhibitions and a love of travel. After gaining experience in the exhibitions industry, Martin took five years out to spend his winters in the mountains – which then funded his summers travelling.

With start-up funds of just £5,000 – saved from his last ski season – Martin launched his first event, The Adventure Travel Show, in 1995. The original show welcomed 2,000 visitors and generated revenue of £20,000. By 2005, it had 30,000 visitors and a turnover of £800,000.

Martin then began to look at other niche areas of travel and launched The Spa Show in 2004.

Martin sold The Adventure Travel Show for a seven-figure sum in 2006 and The Spa Show in 2007.

“Looking back, I sold at the right time. However, while I gained financial security, I didn’t find it as satisfying as running my own company,” says Martin.

At the beginning of last year, the opportunity arose to buy Adventure Travel back and Martin ‘leapt at the chance’.

“Relaunching has been a massive challenge – almost harder than starting from scratch,” he says. “The industry has changed quite a lot over the past four years. Adventure holidays are now quite mainstream – so travellers are looking for something more.”

In terms of the business itself, Martin has noticed that exhibitors and sponsors are demanding more for their money.

“So we are having to be more careful about what we spend our money on – particularly when it comes to marketing. Previously, we’d do a lot of advertising on the tube, for example, but now it’s more focused on the Internet.”

As with any exhibition organiser, Escape Events has to juggle the fact that money does not come in steadily over a 12-month period, but just before an exhibition. One way Martin is dealing with this is to launch more shows. He unveiled The Cruise Show last year and is identifying other niche areas of the travel sector, as well as looking to launch some shows overseas.

For more information, visit: http://www.adventuretravellive.com/ and http://www.cruisingshow.co.uk/

The Marketing Eye says:

Marketing budgets are under pressure everywhere and Marketing Directors need to show an unambiguous and often short term return on the money they spend. Exhibitions are notoriously difficult to measure the success of, which means that Escape Events needs to clearly demonstrate to exhibitors how involvement at the shows can increase sales or improve brand visibility. Exhibitors should be provided with lots of ways to leverage their attendance before and after the event, for example with data capture, pre and post show marketing opportunities and brand visibility beyond the stand itself.

Before committing, exhibitors and sponsors need confidence that the show is going to attract the right footfall in the right quantity. A good marketing strategy provides reassurance that this will happen. The Internet is wonderful, but Escape Events should make sure it is switching to on-line promotion because it is better than off-line activity, not simply because it is cheaper. PR should not be overlooked either. There are good speakers at each event who can be engaged to raise profile in editorial.

Expansion into other shows is a wise move. Escape Events is proving to be an efficient ‘engine’ for the organisation and promotion of events, which could, in theory, be in any market. The brand is in the shows themselves, so there is little risk of diluting the Escape Events brand by expanding into new areas.

With thanks to freelance journalist, Angela Ward, who is interviewing the businesses featured in these posts.

Marketing Myth #1: Advertising and marketing is the same thing

This is the first in a series of 7 posts by guest blogger and associate of The Marketing Eye, Sharon Wilding, owner and founder of The Purple Edge.

Of course I'm going to tell you it's not, but for advertising read promotion, and I'll still tell you it's not the same thing as marketing. Whether you are using advertising, public relations, emails, websites, billboards, word of mouth, or one of the many other forms of promotions (paid or unpaid) you will be wasting your time and/or money if you don't recognise that marketing covers so many more aspects of your business.

Yes it is vitally important to spread the word about what you have to offer if you want buyers to come flocking, but only once you are crystal clear about the following:

• What exactly is the product or service you offer? What are the elements that make it unique or special and represent real value to a potential customer? What will make customers pay more, come back for more, or recommend you to others.
• And who do you need to spread the word to? Which group of customers (your niche or customer segment) are going to find your product most attractive and valuable? The more tightly you can define this, the better the chance you will delight and satisfy your customers by delivering what they really want, and the better the chance that you will target your promotions efficiently to this group.
• How can customers get hold of your product or service? Which channels are you using - in stores, on line, through distributors or direct from you? Giving customers a choice, or range of options, about where and how they can buy from you could be really important in increasing your sales results and could have major implications for the profit you make on each deal.
• What price are you charging and what does it say about the quality and value position you have chosen to take in the market? How can you flex your pricing or terms to change your success rate in sales or improve your profitability?
• Do you have a business plan that defines the objectives you are aiming to achieve? Do you have a strategy that guides your decision making around your priorities and helps you decide what you won't do as well as what you will?
• Does your plan identify the marketing investment (or budget) that you are prepared to make in order to achieve the objectives you have set? If not, how will you know if the cost of any promotions you want to do is acceptable or not? Or whether the return is appropriate?
• What is the sales strategy and process you have in place to ensure you convert interest and enquiries into sales?

All these issues are aspects of or are influenced by your marketing - in fact there are not many things that you do in your business that are not heavily impacted by the marketing decisions you make. Promotion may often feel like the most visible and costly part of the marketing mix - but failing to address the above list properly is only likely to make it more visible and costly through poor execution and wastage.

Many people say to me ‘we don't do any marketing'. What they really mean is that they don't do a lot of promotions, and that may be the right decision for their business.

If you are getting all the new and repeat custom you can handle then you are obviously doing something right, and maybe you are instinctively good at marketing, but to sustain growth there generally comes a point when a more structured and disciplined approach to managing your marketing mix (i.e. all the stuff above) is going to be needed.

Be honest - if you don't have the marketing skills yourself then go out and get some help or training. Marketing is too important a business function to do half-heartedly.