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Real Business gives real experience

February 8, 2010

 

Over the Christmas holidays, I was fortunate enough to spend some time working at Real Business magazine. Unlike many other work experience placements that I have undertaken, the editors at RB were incredibly encouraging and supportive, allowing me to actually write articles for their website, try my hand at sub-editing and conduct a couple of phone interviews (as opposed to fetching coffee!). The experience was unbelievably educational and has further increased my interest in the field of journalism, motivating me to pursue a career in the field. The overwhelming sense of pride I felt when my first article was posted on the website (after having a number of small arguments with the online system!) will remain with me for years to come and I thought I would take this opportunity to thank everyone at Real Business for their continued support, whilst showing off my first pieces of published work!

All Saints’ Stanford named UK’s top fashionista

The Drapers Top 100 list of the most powerful and influential figures in fashion has been published this week, with a well-known British entrepreneur grabbing the top spot.

Kevin Stanford, owner of the high-street fashion label All Saints, was given the number-one slot along with his chief executive, Stephen Craig.

The All Saints brand began as a menswear collection in 1994. There are now over 55 stores in the UK and Europe, as well as three stores in the US.

Despite coming under intense scrutiny after a legal wrangle with Icelandic bank Kaupthing earlier this year, All Saints continues to thrive, with a 31 per cent jump in like-for-like sales this year.

The fashion brand has also recently sealed a £30m funding deal from Lloyds TSB Corporate Markets, allowing it to grow and develop both nationally and internationally. As Stephen Craig told Retail Week, the company has “ambitious plans” for the future.

Simon Cowell’s Next Big Thing

In an interview with BBC Newsnight following last night’s live X Factor result, Simon Cowell hinted that he is ready to take on the political world.

The self-made millionaire, who began his career as a post-room boy at EMI, discussed his interest to create a new series of primetime shows in the lead up to the next UK general election. The show would not take the same format as the X Factor but would instead provide politicians with a public forum in which to put forward their views on important public topics, such as knife crime and the war in Afghanistan, in front of large audiences who will then vote for or against the opinions that they have heard. Simon Cowell told the BBC he wants the show to create a “bear pit” and, as we have seen from his previous television successes, he would be just the man to do so.

As for the X Factor, Cowell, along with Sir Philip Green, has plans to take the show to the US, undoubtedly hoping to continue the show’s seemingly never-ending success. Cowell, who was named in The Times’ Power 100 list of successful businessmen and women last year, has not always been such a well-known public figure. Ten years ago, despite many business successes surrounding his production company Syco, Cowell was relatively unknown to the public. All of this changed when he was offered the chance to feature as a judge on the hit show Pop Idol. Two years on, Pop Idol had been re-launched and re-branded by Cowell as X Factor, a show that has gained him more of a “celebrity status” than the contestants themselves.

Whatever Simon Cowell’s next business move might be, be it X Factor in the US or X Factor for the likes of Gordon Brown and David Cameron, it will be interesting to see whether his success continues to grow. Surely even Cowell must stop somewhere?

Carpetright on the rise

Britain’s biggest high-street carpet retailer, Carpetright, today announced a return to sales growth, reporting a rise in pre-tax profit of 15.8 per cent in the first six months of the financial year.

Chairman and chief executive Lord Philip Harris told the Times: “Despite the continued uncertainty about economic recovery, we believe we are growing more quickly than the market in all our territories, reflecting the appeal of our value for money proposition.” The company has made a good start to the second half of the year and Lord Harris is confident about future progress, with like-for-like sales in the UK growing 3.9 per cent in the six months leading up to the end of October – the business’ best performance since 2004. Lord Harris believes the company’s recent success has been helped by the collapse of rival, Allied Carpets, as well as the beginnings of a recovery in the housing market; a rise in the demand for new houses means a rise in the demand for carpets.

Lord Harris, a carpet salesman from the age of 15, founded Carpetright in 1988. There are now nearly 600 stores in the UK and Ireland, and a further 116 stores in the Netherlands and Belgium.

Lakedale powers through the recession

By increasing the percentage of his public-sector contracts from five to 60 per cent during the downturn in the early nineties, Mike Gabriel expanded Lakedale Power Tools while many of his competitors were suffering huge losses. Small wonder he’s sailing through the current recession.

Lakedale has experienced only a minor dip in sales of six per cent in the past year, while rival companies are reporting drops of between 25 and 30 per cent.

Gabriel founded Lakedale in 1983, funded with a £10,000 loan from his father. Within a year, he’d moved his powertool distribution firm to a freehold property. The company has since moved sites a further four times and acquired four companies.

The business is now based in a 10,000sq ft property in Plumstead, with one more site of a similar size in Croydon. “I didn’t realise just how big the company would become,” comments Gabriel.

With an annual turnover of £5m and nearly 35 employees, Gabriel says he believes the company will maintain natural growth and has no current exit plans. He is still completely involved in “every single aspect of the company” and says this has been vital to his success. In Gabriel’s line of business, supplying the volatile building industry, strict credit 
control is crucial, so he constantly monitors the company’s finances, allowing him to keep a close eye on, and control, any potential losses.

British Airways: how the strikes will affect your business

British Airways plans a 12-day strike over the Christmas period, Real Business looks at the effects that the strikes could have on UK small businesses.

Colin Stanbridge, chief executive of London Chamber of Commerce and Industry, says Unite’s decision to strike over the Christmas and New Year period will “damage London’s economy as well as British Airways’ reputation as a first-class business and tourist airline”.

Lance Mercereau, director at consultancy firm Rosslyn Analytics, believes small businesses need to be proactive in identifying potential risks, such as the BA strikes, early on: “Our company won’t be impacted because, when BA announced in early November that a strike might take place, we made plans for staff to use alternate airlines for critical business meetings.”

He continues: “I don’t believe small firms will be affected by the BA strike because, as a result of the economy, they are most likely flying with low-cost airlines.”

Tim Duffy, CEO of MeetingZone, also says the strikes shouldn’t cause SMEs disruption: “If the BA strike will prevent you from flying to attend key business meetings, all is not lost. Meet anyway without leaving your desk. All you need is the plain old telephone, a PC/laptop and internet access. You can ‘talk’ to the meeting participants via audio conferencing and share information via web conferencing, just as if everyone was seated around the same conference room table. You may even ask yourself why you were going to spend time and money (not to mention the CO2 you would use!) flying to the meeting anyway!”

Cheques preparing to bounce (Charlie Lankston and Dan Matthews)

Small businesses have always had a love-hate relationship with the cheque. It’s a straightforward, no-nonsense form of payment where you don’t need to remember a pin or password (your name will do), but they have the nasty habit of costing everyone money.

Banks lump on a processing fee for cashing cheques on business accounts, because of the hassle involved converting them into ‘money’. Add to this figure the cost of travelling to your bank and the opportunity cost of not doing constructive work and…well it all adds up.

But it’s no laughing matter for finance houses either. Electronic payments are four times cheaper for them than cheques, which cost about £1 each to process.

So prepare to gasp or cheer (or neither) at the news that the days of the humble paper payment could be numbered. Banks are meeting today to decide when your cheque book is to become obsolete.

According to today’s Times this could occur within eight years. It says the Payments Council, a body comprised of bank folk set up to deal with such questions, blames “habit and inertia” for relying on the 350-year-old payment method.

Matthew Goodman at the Forum of Private Business (FPB) says that cheques have become an increasingly expensive option for businesses. While half of the FBP’s members still rely on cheques, he feels that the move can be “relatively painless”. Goodman urges small businesses to use the current publicity to pressure banks into coming up with simple and convenient alternatives to the cheque. “The Payment Council has said it will only take a final decision to phase out cheques in 2016 if it is satisfied the banks have put viable alternatives in place,” he adds.

Richard Branson moves into the Formula One fast lane

Richard Branson today confirmed that Virgin Racing will be competing in Formula One next season. Ten partners are already on board.

Branson held an official launch for the team in London yesterday. He later commented on the business venture through his online blog saying: “Our first year in Formula One was tremendous for the Virgin brand, so why not go in again with a new team from scratch? If you look at the history of Virgin we’ve loved supporting technical breakthroughs, great engineers, and there’s something like 120 engineers working away on this project.”

According to the Virgin entrepreneur, the team will be the lowest-budget team in Formula One, running on just under £40m a year. Branson comments: “Last year with Brawn, they started the season as a David and it ended as a Goliath. So we searched around for another great team, another David team. We have one and we will see how it goes… Money’s not everything.”

Recession grounds Globespan

The Globespan Group, operator of Flyglobespan, Scotland’s largest airline, entered administration yesterday, leaving many of its customers stranded. The move came after a potential rescue deal with Jersey-based company Halcyon Investments fell through.

The firm was founded by Scottish entrepreneur, Tom Dalrymple, who only two days ago denied reports that Globespan was on the brink of administration and spoke with confidence of a new investment package: “This is good news for the company, our customers and our staff.”

The BBC reported that nearly 4,500 passengers have been left stranded, 1,100 of which will be repatriated by the Civil Aviation Authority. A senior cabin member told the BBC that he has not yet been contacted by the company: “There is nothing on the staff website, we’re just hearing things through Facebook. No-one has told me that I don’t have a job.”

Only 18 months ago, Dalrymple featured in an extended online edition of the Times Rich List, his new boost in wealth being attributed to the growing success and expansion of Flyglobespan and placing him in joint 1,049th place. The firm, which in June 2008 boasted an annual turnover of £280m, reported losses of nearly £19m in the past year.

The news of Globespan’s collapse comes just days after thousands of British Airways cabin crew members voted in favour of a Christmas strike.

The Kitchen Designer withstands the heat

Mark Hanner opened the first showroom for his business, The Kitchen Designer, in 2007, just as the current recession started to take grip over the UK. Despite a still fragile economic climate, he is now looking to expand the business and set up more of his unusual studio “pods”.

Apprehensive about the state of the high street, Hanner began a two-year search for a suitable studio space for his kitchen design and supply firm. He settled on a novel and cost-effective site – an old 20ft shipping container. Having researched the ways in which he could convert the container, Hanner opened his showroom “pod” in 2008, gaining him a lot of local recognition. “Containers are quite well known in the US for house building but fewer projects are seen in the UK,” he says. “I now have a studio like no-one else, and have been able to survive the recession without the huge pressures most related business have with large outlets. Containers are incredibly cost effective.”

Hanner has built up his company slowly, with a turnover of £120,00 for the past year, and is now looking to future expansion: “Within the next five years, I’d like to have a few more local studios as well as a showroom in London. After building up the brand, I’ll also be looking to franchise the business.”

The current showroom for The Kitchen Designer is based in the grounds of a garden centre in Trowbridge, something that Hanner believes has worked to his advantage: “People shopping at garden centres are focused on improving their homes – and this is exactly the kind of customer I want!”

Hanner is convinced his business could succeed further afield. Aside from the fact that his shipping-container offices would be very easy to transport, Hanner reckons expats living abroad would really appreciate the “very British kitchen design”, as it differs greatly to designs found in Europe and the US.

Simon Fuller dreams big

Simon Fuller, the British entrepreneur who created the Spice Girls, yesterday announced his plans for a new internet-based reality talent show. If I Can Dream, due to begin next year, will follow the efforts of five young people trying to break into the Hollywood entertainment industry.

Fuller yesterday spoke of his desire to move away from the traditional approach of using primetime television to air new shows, commenting: “I am determined to push the boundaries of mainstream entertainment. The next frontier is the video world of authentic real time interaction.”

Viewers in the US will be able to watch the show via the streaming website Hulu.com, while those outside of the US can use the show’s own website, ificandream.com. Fuller is the creator of the Idol reality series which began in the UK in 2001 – there are now over 50 versions of the show in 110 countries, most notably American Idol, which was the most watched show in the US last year.

Banks leave SMEs in the lurch

New data released today by the Bank of England (BOE) confirms that the amount being lent to businesses fell for the ninth month running in October. Entrepreneurs responding to this news say that SMEs must look elsewhere in order to gain funding.

Victoria Pooley, managing director at The Data Partnership, told Real Business that when her business went to the bank for a small loan last year, they were only willing to lend her company the money if they became personal guarantors, a risk that her company were not willing to take. A year on, having quadrupled the business’s turnover, her new bank manager was “only too happy to offer us an overdraft facility of ten per cent of our turnover”, a huge amount in comparison to their previous loan request. Pooley says banks prefer to risk the chance of their supposedly “valued” customers going out of business than lend them a relatively small amount of money to help them out of short-term difficulties.

Kim Farrell, corporate finance manager at CBHC chartered accountants, which specialises in corporate funding for SMEs, told Real Business that her firm has found ample funding for its clients: “We are in the process of securing millions of investments for small and medium-sized firms through government-backed schemes such as the Enterprise Finance Guarantee,” she says.

Reuters today reported that the BOE continues to state that some large businesses are accessing capital markets. Policymakers, however, are worried that credit still remains scarce for smaller businesses who cannot gain access to the stock and bond markets.

BlackBerry business booms

The company behind the BlackBerry smartphone, Research In Motion (RIM), today announced a massive increase in sales, despite facing fierce competition from the Apple iPhone and the Palm Pre.

RIM believes that the boost in sales comes from targeting its smartphones at both consumers and businesspeople. The company today reported record-breaking sales over the past three months, having shipped ten million phones worldwide. The strong sales of the BlackBerry have helped RIM grow its quarterly revenues by 11 per cent and the company, founded by Canadian entrepreneur Mike Lazaridis in 1995, expects revenues to continue rising to between $4.2bn and $4.4bn over the next three months to the end of February.

The growing popularity of smartphones such as the BlackBerry and the iPhone has lead to a number of companies creating special “mobile sites” so customers can access web pages on the go. There are now a huge number business-related apps.

Here at Real Business, we’re in the process of developing our own mobile site. What would you like to see from us on the screens of your smartphones? Email: editors@realbusiness.co.uk

 

 

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