< Previous30 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk CORPORATE HOSPITALITY The right look There’s a lot to consider when it comes to corporate hospitality – food, venue, transport and so on. But one area that might escape one’s attention during the vital planning stages is what to wear. No one in their right mind would dream of attending a job interview in a tee-shirt and track suit. No, interviews require prospective new starters to demonstrate their employability. Studies have shown that a boss decides whether to employ someone based on the first ten to fifteen seconds upon meeting them. First impressions matter and there’s plenty that can be gleaned from how a person is dressed. Has their shirt or blouse been ironed? Are their shoes freshly polished, or can scuffs be clearly seen? If they’re wearing a tie, is the top button done up? Conversely, a lot can be discovered about an individual that puts too much effort in. An interviewee who arrives wearing cuff links, a tie pin, a pocket square, a waist coat, coloured shows and a bowtie might be overcompensating for something. It’s questions an employer will be asking themselves during that initial meeting and all the way through the interview, so why aren’t they doing the same for themselves? Often, company directors and managers need to give up more and more of their time. As there are only so many hours in a day, they have to make up the time and, often, this means making compromise after compromise. One of the easiest ways to claw back extra time is with clothing. Having a set uniform every day is a practice preached by Mark Zuckerberg and, before him, Albert Einstein. The thinking is that it’s one less thing to think about. Wearing the same thing every day can therefore boost productivity and grant extra time and energy to focus elsewhere. There’s no faulting that logic, but for a company leader wining and dining their clients, it’s probably a good idea to put a bit more effort in. Returning to our example of the interviewee, the same analytic process occurs whenever we meet new people. If this is the first time a manager or director has come face to face with clients, both parties will be making value judgments on the other. The moral of the story is to put effort in and create the best first impression possible. This is by no means easy and, as in all things, practice makes perfect. The first thing that’s worth bearing in mind is the suit. Whether plain, pinstriped or patterned, the suit is a symbol. It says a lot about a person, so getting it right is important and there’s plenty to consider. A black suit, for example, might come across as too severe. After all, it’s corporate hospitality, not a funeral or wedding. Black suits are also the hardest to hide if they’re cheap. Frankly, cheap black suits look cheap. The colour just isn’t as forgiving as, say, a charcoal. At the The right look 30-31.qxp_Layout 1 28/08/2019 10:15 Page 1same time, it’s key to bear patterns in mind. Not all suits are designed to be worn in corporate settings. But a way of looking professional yet still retaining a sense of personality is to go for a patterned lining. Many off-the-rail suits will already boast a playful lining, others can be tailored according to taste. So if you’re a big fan of Star Wars . say, you can have a droid pattern tailored into the lining of your jacket. Unless you’re deliberately showing clients and customers, this isn’t something most people are going to see. Yet you’ll know it’s there. It’s a similar argument with the tie. More and more office environments have done away with the tie in favour of a more smart-casual appearance. Rather than banish it from the corporate world, this move has instead ensured the tie is a more exclusive, lucrative accessory. For meeting important clients, many business leaders wouldn’t dream of leaving the house without a tie. But what to go for? Again, one might be inclined towards a cartoon pattern or something a little risqué, but it’s probably best avoided. Instead, try and find a pattern and colour that’s complimentary to the shirt and suit. A tie can always be paired with a pocket square for an effective appearance. Block colours might be easier in this regard, but they are boring. A simple pattern can be much more effective. Of course, this isn’t an issue for female business leaders, who can evoke a serious sense of style with a pant suit and blouse. When it comes to accessories, it’s best to keep things simple. You don’t want to come across as try-hard. Go with cufflinks, a tiepin or slide. For jewellery, stick to a few understated pieces. A necklace is always a good one and some simple yet elegant earrings. That’s just the outfit, there’s still hair and make-up to consider, but that’s a different article altogether. The key thing to remember is that clothing choices matter. If you’re meeting clients and customers for a sit-down meal or other corporate event, then it’s worth putting the effort in. No doubt they will have done the same. www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 31 CORPORATE HOSPITALITY © SHUTTERSTOCK.COM / PRESSMASTER © SHUTTERSTOCK.COM / ASIER ROMERO © SHUTTERSTOCK.COM / FEDOR SELIVANOV 30-31.qxp_Layout 1 28/08/2019 10:15 Page 232 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk TAX Is there something to be said for not keeping it in the family? By James Pinchbeck, Marketing Partner at Streets Chartered Accountants It is not untypical for family businesses to never consider or even resist the idea of recruiting or engaging a non family member to run or take up a senior role in the business. This may be because it is felt they are not required, family know best or reticence around letting others into the inner circle. The cost may also be a barrier, as well as even knowing how to go about recruiting someone. However, there is a growing trend for many successful family businesses to take on non family members in roles including Managing Director, Non-Exec Director and other senior or board positions. The key drivers for such appointments seem to be around aspects such as succession issues and a lack of family members to take on the roles, recognition that perhaps there might be a skills gap in the business and also the need to bring new ideas and a new level of professionalism to the business. Certainly, a non family member comes without the emotional baggage of a family member, often with the benefit of a more commercially focused mindset. The challenge is ensuring they embrace or at least are empathetic to the unique set of values often associated with running a family business. The need to bring about change and manage resistance can be a real balancing act – there is a risk that whilst change or new procedures need to take place, it is not always welcome. A good appointment though should be able to charter the stormy waters. It can be the case that an external appointment could cost or earn more than those family members working in the business. The challenge is ensuring that expectations and the financial returns around such spend is understood by all parties. As to why a non family member would want to work for a family business, the reasons are often overlooked or poorly understood. It can be much more rewarding than one might think. Family businesses often have an exceptional sense of pride in what they do or produce, have a focus on long term sustainability as opposed short term financial gains and have a focus on wellbeing and all being a part of the ‘family’. It is perhaps not an environment for the more corporate player, charged with keeping investors in the City happy. Recruiting the right individual, as with any employee, can be a challenge. There is often the need for clarity about the role and a true understanding around expectations, reporting and the outcomes to be delivered. The old adage about choosing your business partner like you might do your spouse might be a good one to heed. Seeking the support of fellow professional advisers and guidance from peers and those running other family businesses could be worthwhile too. The value and difference though that a non family member can make to a family business certainly outweighs the challenges or potential objections to recruiting one. 32-33.qxp_Layout 1 28/08/2019 10:16 Page 132-33.qxp_Layout 1 28/08/2019 10:16 Page 2FINANCE FINANCING the future East Midlands Business Link explores some of the most common finance solutions open to businesses, exploring the advantages and disadvantages and the business situations for which they’re best suited. 34-36.qxp_Layout 1 28/08/2019 10:18 Page 1Management buyouts A management buyout (MBO) is basically a transaction where a company’s management purchases the assets and operations from the business owners – be that a company founder or a private equity firm. From a manager’s point of view, an MBO is an attractive option because it allows them to take the reins and enjoy the greater control of owning the business rather than serving as an employee. It’s equally advantageous from the seller’s perspective as this kind of transaction allows corporations to shed divisions that are not part of their core business. For privately-owned businesses, an MBO offers a way out for owners wishing to retire or to take a less hands-on position in the company. A typical MBO will see a management team pooling resources to acquire all or part of the business they manage. Of course, this can’t be accomplished without capital, with funding typically coming from a mix of personal sources, private equity finances and seller financing. But, as we’ll see later in the feature, there are other financing options available. A management buy-in (MBI), on the other hand, is the same transaction, albeit in reverse. Here an external management team acquires a company and replaces the existing management team. This can come with several disadvantages when compared to an MBO. In the latter, a pre-established management team takes over the business, meaning they have a much better understanding of that business so there is no learning curve involved, they also already have relationships with that company’s other employees and its customers. An outside management term will need to become acquainted with a company’s operations, as well as build up relationships with clients and staff, all of which takes time. Invoice finance Invoice finance is simplest way of releasing cash tied up in a businesses’ outstanding invoices. Essentially, it sees businesses selling their invoices to a third party who will advance some of the funds it is worth up-front for a cut of the invoice. Thousands of business right across the UK use this kind of financing to maintain a healthy cash position, while others use it to take back control of cash flow issues that arise from late payments and unpaid invoices. The biggest draw is that businesses can be paid the majority of an invoice within forty-eight hours instead of the typical thirty days specified on most invoices. That’s assuming invoices are even paid on time which, unfortunately, many are not. The Federation of Small Businesses estimates that late payments contribute to 50,000 insolvencies every year at a £2.5 billion cost to the economy. As big an issue as this is, it does assume that the blame lies solely with the party East Midlands Business 35 36 Á © SHUTTERSTOCK.COM / KHAKIMULLIN ALEKSANDR © SHUTTERSTOCK.COM / ZADOROZHNYI VIKTOR 34-36.qxp_Layout 1 28/08/2019 10:18 Page 2that’s been billed. But according to the ‘Taking Notice of UK Business’ white paper, seventy-five per cent of SMEs would fear taking action against a late payment at the risk of damaging client relationships. So invoice finance presents an easy means of mitigating these risks as well as providing businesses a way to fund their growth without needing to take on extra liabilities or debt – as is the case with a business loan – and using assets they already have. There are, however, some things to consider, namely the kind of invoice finance a business is after. There’s several different kinds – such as invoice discounting, invoice factoring and spot factoring – so finding the right one is key. It’s also important looking at the individual providers themselves, as some will insist on managing credit control themselves, which could alienate customers. Asset-based finance This is a specialised method of providing companies with working capital and term loans that use accounts receivable, inventory, machinery, equipment and real estate as capital. Essentially, any loan to a company is secured by one of that company’s assets. This kind of financing is often used to pay for expenses when there are gaps in a company’s cash flows. But it is also frequently used for start-up company financing, refinancing existing loans, financing growth, mergers and acquisitions, as well as MBOs and MBIs. Of course, this kind of finance won’t be suited to every businesses’ needs but can offer a lifeline to companies that have stretched their credit limits with vendors and reached lending capacity at the bank. Private equity Private equity is a form of funding where investors provide long-term equity capital investment in a company in return for either shares, a percentage stake in the business and sometimes a seat on the board. The draw for businesses is that private equity can be used to finance MBOs or to provide equity capital to support growth plans. Of course, many companies might understandably be reluctant to dilute ownership of their business, but it does offer a good option of raising capital for businesses that aren’t ready to list on the stock exchange. Businesses need to bear in mind that as well as offering part of their business, securing private equity is also often a time-consuming process and securing equity isn’t always guaranteed. Angel investors An angel investor is a high net worth individual who makes use of their own personal disposable finance and makes their own decision about making an investment. Angels would normally take an equity stake in a business in return for providing equity funds. As well as capital, angels can also provide their experience, knowledge and contacts. Every investor is different and so will therefore provide differing amounts, but typical investment range from between £10,000 and £500,000, though deals of up to £2 million are becoming more commonplace because angels are grouping together in syndicates. Angels are one of the most significant investors in start-ups and early stage businesses, but that shouldn’t deter more established firms. However, it’s important to bear in mind that securing an angel can be a difficult and protracted experience. They’re harder to research and contact – certainly compared to private equity firms – and so they can seem less transparent. FINANCE © SHUTTERSTOCK.COM / VINNSTOCK © SHUTTERSTOCK.COM / JEVANTO PRODUCTIONS 36 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk 34-36.qxp_Layout 1 28/08/2019 10:18 Page 3With concern continuing to build over the environment, pollution and waste - particularly in regard to plastics - altering the beliefs of consumers as well as their buying habits, and global waste expected to grow to 3.4bn tonnes by 2050, businesses are increasingly conscious of the need to incorporate greener methods of waste management and better recycling practices. It is now expected that waste is minimised and reused, whether you are a member of the public, business owner, or waste management firm - society is rapidly moving towards a circular economy. Recycling within the UK and our region is only set to increase thanks to decisions such as that of China, which has banned imports of www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 37 WASTE MANAGEMENT AND RECYCLING 38 Á Á Investment in commercial property may be declining nationally and, unfortunately, here in the East Midlands, but that shouldn’t overshadow the major deals taking place in the regional marketplace. © SHUTTERSTOCK.COM/ CHINNAPONG Going circular 37-39.qxp_Layout 1 28/08/2019 14:11 Page 1contaminated plastics from Europe, pushing waste exporters to reconsider their methods of waste management, while Brexit is making waste export more difficult, and public opinion indicates 80% of people think the UK should discover a way to deal with its own recycling and not send it to external countries. There are a plethora of waste management and recycling businesses in the region which are investing to expand capacity and offerings whether that be with new sites, equipment or through acquisitions. The firms are actively helping businesses understand how dealing with waste in environmentally ways can give them a competitive advantage. Recycling office waste for instance can save money for a business, reduce their environmental impact and boost one’s green credentials. However when it comes to recycling, a recent report has highlighted that 80% of UK businesses still operate without a recycling/green policy, revealing a resistance to change in businesses day-to- day operations. The best recycling plans start with the basics such as paper, often the highest volume waste product in the office, and build up to include materials such as plastic, batteries, glass, food and electronics. Despite setting up an extensive recycling policy in a business, often residual general waste remains and may be sent to be incinerated or to landfill – options now more frowned upon by consumers and clients. In the race to zero waste then, firms should consider having this waste sent to efficient treatment facilities with the lowest environmental impact that have embraced technologies like Biomass, Solid Recovered Fuel (SRF) and Refuse Derived Fuel (RDF). These methods are praised for how their benefits such as reducing landfill impact and production of electricity outweigh their own impact. If one is able to achieve a zero-waste system at a business, one can propel a cogent environmental commitment that could be the tipping point when winning business and attracting employees, and that is key in engaging customers as CSR becomes more important. Diverting from landfill is a key concern in the waste industry with rising Landfill Tax and the fact that UK landfill is in structural decline, which has led to the positive growth of alternative waste management and treatment infrastructure. Many of these alternative treatment facilities have implemented proven technologies, from Energy from Waste (EfW) to Mechanical Biological Treatment (MBT) and gasification. Though many projects in this area have been successful, delays have occurred, alongside technological challenges and resulting facility closures which have been costly. The East Midlands is set for a boost in more environmentally conscious waste management and long-term waste infrastructure with for instance Altalto Immingham Limited submitting a planning application for Europe’s “first commercial scale household and commercial solid waste to sustainable fuel plant” in Lincolnshire. Near Immingham, the plant would convert what would be half a million tonnes of non-recyclable everyday waste set for incineration or landfill a year into clear burning sustainable aviation and road fuel. Not only taking waste out of landfills, it will create jobs for the region and improve © SHUTTERSTOCK.COM/ VCHAL 38 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk 37-39.qxp_Layout 1 28/08/2019 14:11 Page 2amount of valuable waste still reaching landfill. Revealed as part of an £18m Resource Action Fund launched by Defra, the programme, offered grants of between £25k and £170k, to boost recycling in England with capital infrastructure. Aside from funding being made available to help boost recycling, other actions taken include the government placing more responsibility on producers as part of extended producer responsibility in the Resources and Waste Strategy. Producers are being made to pay the full cost for packaging waste they create, holding them accountable for the environmental costs of their products when they become waste. This is expected to influence producers to alter the design of products so that they are easily recycled and dismantled. The strategy will also place more responsibility on producers for items that are hard or costly to recycle like electrical goods. Innovation is occurring in recycling and waste management with recycling plants turning waste into building materials, fuel and electricity, and new technologies in development and trial such as those integrating AI and robotic automation which are expected to take over the processing of waste. While in the past sorting was completed manually, AI powered robots are now ready to spot polymers with the same accuracy of a human, but quicker and at a lower cost, robotic arms are preparing to take apart electronics that aren’t dismantlable by hand and retrieve any recyclable materials, and AGVs are set to transport bins to compactor stations. Further, AI technology is being developed for the waste management sector to reduce human error with cameras and X-ray technology to see precisely which plastics are in a pile. With cameras taking millions of pictures, which are put through an algorithm, one can see what is there and what is recyclable. This information can then be sent to inform people of what could and couldn’t be recycled. Innovative schemes are also highlighting the potential of recycling, like Highways England’s use of recycled waste materials in road surfaces, recently for instance trialling the use of granulated tyre rubber to repave part of the M1 motorway in the East Midlands. Using waste tyres will recycle a chunk of the 40m waste tyres produced annually in the UK and the 500,000 disused tyres that are exported to landfill a year outside of the EU. The issue of waste management and recycling is only more pertinent this month (September) with the RWM Exhibition taking place on the 11th and 12th where this magazine will also be distributed. www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 39 WASTE MANAGEMENT AND RECYCLING © SHUTTERSTOCK.COM/ BELISH the UK’s fuel supply at a time when the majority of the UK’s jet fuel is imported from abroad. Encouraging innovation The government is encouraging the development of innovative waste management, treatment and recycling technologies with the aim of diminishing the environmental impact of existing options, expanding resource value, boosting productivity and creating a circular system. Last June the government revealed plans for a £20m fund to create a more sustainable end of life process for plastics which came along with the 25 Year Environment Plan - though criticisms have arisen over too much government focus on plastics over bulkier items. A variety of grants have been made available to deal with the issue of waste. One of the most recent, aiming specifically to help business of all sizes reduce and divert waste, is the Non- Household Municipal Waste Business Grant. With the national recycling rate for non-household municipal sector waste at present around 40%, there is potential for much more recycling with a significant 37-39.qxp_Layout 1 28/08/2019 14:11 Page 3Next >