< PreviousFAMILY BUSINESSEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk20The professional services firm saysthat an emerging generation of ‘digitalnatives’ could have a transformationalimpact on family businesses asattitudes towards inheritance shift fromobligation to an opportunity to maketheir mark.Ian Borley, East Midlands SeniorPartner at KPMG, believes the nextgeneration are embracing the chance touse their digital knowledge and lifeexperience to significantly impact thebusinesses they are inheriting.Ian said: “In the past, familybusinesses have often struggled toencourage the next generation to takeover the reins. It’s still the case that onlya third of family businesses survive pastthe first generation, as young peoplecan be reluctant to simply step intotheir parents’ shoes and run thecompany in the same way.“However, a new, entrepreneurialgeneration is emerging and one thathas been immersed in technology andthe internet. As such, they have acompletely fresh perspective to offerand can have a significant impact ontransforming a business’ operations andstrategic direction. What’s more, oldergenerations now appreciate and valuethe digital skills that their children canbring.”Elliott Peckett is a director at R HSmith, a fancy dress retailer based inGainsborough, Lincolnshire. R H Smithhas been family managed and ownedfor over 125 years, with Elliott’s familytaking on ownership around 40 yearsago. Elliott’s parents jointly own R HSmith, with Elliott and his older sisterDominique with them on the Board,alongside one non-family director.Elliott joined R H Smith fifteen yearsago, after starting his career ininvestment banking.“I joined the business at a time ofgrowth, my father having increased thesize and profitability significantly. Whilehe has always been interested in usingtechnology wherever possible, we’vecertainly made some real leaps forwardin the past few years.“Much of the technology has beenput in place in the ‘back office’, to helpthings run more smoothly on the frontend. For instance, picking and packinghas moved from a traditional to a digitalapproach. A few years ago, we pickedorders using a paper order sheet andclipboard. We moved from that to ahand held electronic device, but nowhave invested in voice technology,which not only makes us quicker andmore accurate, but also generatesreceipts which show exactly what is ineach box which helps our tradecustomers no end with checking in theirstock.”Elliott also cites a new ERP system,brought in a couple of years ago, asmoving the company forward by givingthem more ability to work effectivelywith data around sales, purchasing andproduct performance. But not all of R HSmith’s digital transformation sits wherecustomers can’t see, some very much‘Digital natives’set to lead newera in familybusinessesA digital mind-set, entrepreneurial culture and competitive jobs marketare combining to revive interest in younger generations in taking onfamily businesses, according to KPMG.FAMILY BUSINESSwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 21provides front-line customer service.“We were the first company withinour industry to provide a data feed toour trade customers. This means thatthey can track exactly what we have instock in as much or little detail as theyrequire – at the simplest level this canbe a snapshot of our stock, or they candrill down into the exact availability ofall of our products. This technology alsoallows them to add products direct totheir website and gives easy access toimages.”In late 2014, the company changed itswebsite from being trade-only toconsumer-facing, and now has a teamof developers in-house to update andmaintain the site. Upgrading the websitealso enabled R H Smith to implement a‘click and collect’ system to allowcustomers to have orders sent to theirhome address or to collect from UPSAccess Points nationwide.RH Smith is also utilising technologyin the fight against infringement of itsIntellectual Property by developingimage recognition software, whichtrawls the internet to identifyillegitimate uses of its copyrightedproduct images that often turn out tobe illegal counterfeits. This way, thecompany is protecting consumers aswell as its brand.With technology having sodemonstrably improved the running ofthe business, Elliott and the rest of thefamily are clear that it is now an integralpart of on-going business strategy.“On the operational side, we’reworking on creating a facility tomanufacture bespoke costumes withinthe UK. And from a customer serviceand communications perspective we’reputting in place a strategy for our socialmedia presence, making sure we areusing these channels effectively torespond to customers’ needs.“The huge benefit of being a familybusiness is that we can make decisionsquickly and with agility, which fits wellwith the world of digital. Our hope isthat my, and my sister’s, children willwant to go into the business, bringingwith them completely new andinnovative ideas – no doubt technologywill have moved on leaps and boundsby then!”COACHINGEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk22COACHINGwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 23Why your teamis not engagedby Stuart Ross of High Growth GlobalHow many of your top performing team have left you, leaving you, astheir leader, wondering why or what happened? Employees and teammembers will often quit before they ask for what they truly want: clarity,focus on strengths and engaged management.Clarity of our WordsFrom the leadership perspective, clarity of our words requires you toincrease explicit communication and expectations and decrease implicitcommunication and expectations. Explicit expectations are statedoutright, employees know exactly what is expected of them in detail.Implicit expectations are those that team members magically “figure out.”Clear and consistent communication (meetings, phone calls, emails,texts) are key. Why? Communication reinforces the areas/tasks theemployee “owns” and reminds them that their managers are easy toapproach and willing to listen.Clarity of Goals When done well, performance management has a positive impact onemployees. What performance management lacks is going above andbeyond the basic annual review. According to Gallup, managers need tohelp their employees set work priorities and performance goals. Whenmanagers help set performance goals, employee engagement is 69%. Ifmanagers do not help set performance goals, 53% of employees areactively disengaged. Put simply, your team wants your input andfeedback on goals and expectations.Focus on StrengthsEmployees who use their strengths every day are six times more likelyto be engaged at work. Weaknesses should not be ignored, but astrengths focus offers managers a better chance to develop individuals inthe context of who they are, instead of attempting to change theirpersonalities. If you want your team to grow, let them use their naturaltalents.Managers must be EngagedEmployees who work for engaged managers are 59% more likely to beengaged themselves. As a leader in your organisation, ask yourself – areyour managers engaged? If managers aren’t engaged, the team is notengaged.What’s scary aboutnetworking?NETWORKINGEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk24Everyone networks to some degree,by becoming known to new people; it’sjust the number of new people that canmake networking seem scary. So why is talking to new peoplescary? Being put on the spot or puttingyourself out there can be daunting,especially if you’re not a particularlyoutgoing person. Talking about whatyou do with a friend or family memberis probably completely comfortablewhilst the thought of walking up to astranger to start talking about your workcan bring new networkers out in a coldsweat; but this is why it shouldn’t:You’re all in the same boatEveryone there is in the sameposition as you – they probably knowfew or no other people there and will behoping for you to walk over and engagethem in a conversation. Even if twopeople have come from the same place,it’s no good to them having a chatabout work to each other at anetworking event, so they’re going tobe grateful to you for coming over tosay hello, too.There’s no scriptIf the idea of telling someone aboutwhere you work (or even scarier; aboutwhat it is exactly that you do) makesyou want to run for the nearest exit, justremember that everyone else is goingto have to do the same. There’s noscript for what you need to say and ifyou miss something out that you hadplanned to say before it was your turn,it’s okay because only you will know. You are who you areIf you’re new to a company or don’tknow everything about every product orservice you offer, just be honest. It’s farbetter than trying to blag an answer thatdoesn’t sound quite right and thenfeeling silly. There is no shame inowning up to not knowing somethingand being open and honest about it, infact it can often present an opportunityfor you to ask for contact details of theperson asking so that you can find outthe answer and get back to them withan answer later on.It’s not all about youAnyone who has ever been unluckyenough to be set up on a blind date willknow that their friends will have lots oftips of what to talk to the other personabout, like ‘Ask her about her dog’ or‘Don’t whatever you do say that youthink fishing is boring.’ Whilst youdon’t have the same advantage withnetworking, 99% of the time people willbe happy to answer questions aboutthemselves and their work, so if you’refeeling a bit tongue tied turn theconversation around and ask them whatthey’re working on at the minute, orwhat they enjoy about their job. At the end of the day, what is theworst that could happen? Going a bitred when you’re talking with 20+ pairsof eyes focused on you is completelynormal and there’s no-one at anetworking event who is likely to blankyou if you walk up to them andintroduce yourself.Still not convinced?Top tips:• Talk about something work relatedthat you think is interesting. Not onlywill you come across as caring aboutthe product/service you’re tellingsomeone else about, but the chancesare they’ll find it interesting too.• Try everything once. Sometimesthe events that seem terrifying are themost fun!• Stick with the events you enjoy. Ifyou’re enjoying them then you’re mostlikely to be coming across well andspeaking to more people. Plus, if youfind a couple that you can go toregularly you’ll start to develop closerrelationships with the other regulars aswell as begin to feel more comfortablewith new people when they come alongfor the first time.• Say hello. If someone is lookinglost or isn’t stood talking to someoneelse, even if you are, invite them to joinyou. They’re probably a bit scared likeyou used to be!The proof of the pudding (orbreakfast in this case) is in theeatingIf you don’t like sitting around in acircle and taking turns to talk aboutby Hannah Wellings, Bray and Bray SolicitorsNETWORKINGwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 25yourself, try a monthly networkingevent where the emphasis is oninformality and meeting in a relaxedatmosphere. With no formal speeches orpresentations The Business ExchangeNetwork in Leicester takes place on thefirst Thursday of every month (at TheExchange on Rutland Street) from 7.30-9.30am and is an excellent informalevent with no speeches, presentationsand no need to register. You can justcome along whenever you can to agreat city centre location, to meet otherlocal business people who enjoyinformal networking over a freemorning coffee and pastry. What haveyou got to lose?In November, the Business ExchangeNetwork is part of the LeicesterBusiness Festival and has beenadvertised in the LBF’s calendar ofevents, so we are expecting lots ofattendees from an even wider array oflocal businesses than usual. We arealso going to be holding a special raffledraw with some great prizes such astickets to see Oliver at The Curve, localrestaurant vouchers and cinema tickets;the proceeds of which will go toLOROS. You can also have anotherchance to win a bottle of Prosecco anda 10% discount card for The Exchangeon the day, if you tag us(@NetworkingLeics) on Twitter andmention that you’re coming along.THE CLOUDwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 26PKF Cooper Parry tohost business seminaron The CloudBusiness advisory and accountancy firm PKFCooper Parry will be hosting a free seminarnext month for those who want to maximisethe Cloud for their business.Taking place at the firm’s office at East Midlands Airport onNovember 12, the breakfast seminar will look at the importance ofthe Cloud and the benefits of a business switching to it.IT partner at PKF Cooper Parry, Victoria Dytrych, will be hostingthe event. She said: “PKF Cooper Parry IT is one of the EastMidland’s leading businesses, providing solutions to SME’s andprivately owned businesses across the region.“We have helped many businesses switch to the Cloudthroughout the region, whether small or large, by providing themwith a cost effective, efficient alternative.“Next month’s seminar will demonstrate the benefits ofswitching to the Cloud, detailing how it helps cut costs and boostsbusiness productivity.”Alongside Victoria, speakers at the event will include MarkDolman, director at Datto talking about the importance of having adisaster recovery plan in place, as well as Cloud users, director atBA International, Ben Queisser and managing director at InnesEngland, Tim Garratt. They will provide short presentations onhow the Cloud has taken their businesses to the next level.Victoria added: “We are pleased to have some brilliant businessleaders speaking at the event. They are all service users so theywill be able to draw on their own experiences of the Cloud andwhy it matters.“This will be an informative event for all that attend and wehope to see as many businesses as possible, as they take the nextstep in switching to the Cloud.”The seminar will take place on November 12 at 8am at PKFCooper Parry’s office at East Midlands Airport in CastleDonnington.For more information, please visit www.pkfcooperparry.com.Alternatively, you can email events@pkfcooperparry.com or call01332 411 163.FINANCEwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 27With improved economicconditions, many within the SMEspace are focusing on growth,with access to financesupporting and catalysinggrowth plans. Following aloosening of bank purse stringscoupled with an increase inalternative finance options,access to finance for SMEs is nolonger the brick wall it once wasat the height of the recession. Indeed, one could almostargue that at a high level, thecredit markets have actuallybecome a bit too congested andover-supplied with the myriad offinancing alternatives available.Getting a loan has become acomplex process and the challenge for many borrowers now liesin navigating the markets in an efficient manner to find thefinancing solution that best meets their requirements. Here are our top five tips for securing that all-importantfunding for your small business.1. Expect an assessmentThe current situation is very “liquid”, meaning the banks havesubstantial capital to lend, having recovered from the creditcrunch. However, with the volatile nature of the internationalmarkets, applicant businesses are coming under increasinglyrigorous risk assessment and scrutiny. Banks are taking ameticulous approach to lending in the hope of avoiding thewrong decision. However, the finance is undoubtedly out there -with the right documentation and approach, your business cansecure it.2. Explore every optionFinding the right loan for your business can be a long, drawn-out process, so be prepared to invest time and energy intoresearching prospective lenders. A recent study from BMGresearch shows 37% of businesses give up their search forfinance and cancel their spending plans after their firstrejection[1]. The lending market is diversifying. With crowdfunding and asset-based lending, amongst others, there are nowmore avenues for finance thanever before.3. Knuckle down on thenumbersAny lender will be looking forrobust financial records andforecasts. It doesn’t matter ifyou’re an incredibleentrepreneur with a millionpound idea; if the numbers don’tadd up and you can’t produceclear evidence of your financialperformance, the bank may beinclined to reject yourapplication.4. Don’t confuse banks withinvestorsMany businesses confuse banks with investors - they’re not thesame thing. While an investor can get comfortable with thepotential risks of a business idea, a bank is ultimately concernedwith getting repaid. If you can prove your ability to repay the loanwith evidence, for example, well explained business plan andforecasts, you’re likely to have a much smoother applicationprocess.5. It’s your job to make them understandA common misconception in small businesses is that banks willinstantly understand your situation. Lending doesn’t involve aconsultation stage; you need to know your stuff. A lot ofcompanies make the fundamental error of mistaking profit/salesfor cashflow. If you don’t completely understand your business,you’ll struggle to explain it to someone else.The overriding message is that capital is out there to supportgrowth but preparation is key to securing the right finance on theright terms.[1] https://www.gov.uk/government/consultations/sme-finance-help-to-match-smes-rejected-for-finance-with-alternative-lenders/sme-finance-help-to-match-smes-rejected-for-finance-with-alternative-lendersFinance without the kerfuffle:Five steps to help secureyour business loanIan Borley, Senior Partner, KPMG East MidlandsFINANCEEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk28One aspect which a company should never have to worryabout is getting paid. However, this is the single biggest risk toany company with the potential to undermine its ability to dobusiness.Chasing payment to reduce trade debt is unpredictable, timeconsuming and an administrative burden – resource whichcould be constructively directed growing the business.Overdue payments put strain on a business’ cash flow. Forsome, unpaid invoices can break a business altogether andSMEs are particularly vulnerable as they often have lessbreathing space to withstand the financial pressure.When doing business whether in the domestic market oroverseas, there is a very real risk of non-payment. The latestAtradius research into payment practices revealed that anaverage of 41 percent of B2B invoices are paid late. This trendhas risen over the past two years with British businesses nowwaiting an average of 10 days longer for overdue invoices tobe paid. In addition, around 7% of all sales become delinquent– that is, unpaid 90 days after the due date. British businesseswent on to declare that 1.2% of their trade was entirelyuncollectable. Nearly half of businesses said that delays weredue to their customers having insufficient funds while 11percent had fallen to insolvency.During the recession, businesses were seeing increasedinsolvencies and were very risk aware. Now that the economyis growing again, it is important not to lose sight of the risks –even though businesses in our region are quite rightlyambitious for new opportunities Even in a recovery period therisks and challenges of doing business can be tricky tomanoeuvre and companies need to continue their proactiveapproach and have robust credit management systems inplace.The good news is that implementing a positive risk strategyis simple and there are a few basic steps that businesses inthe Midlands can take to make the world of difference:Be focused: The first step is to focus on your market – youwill have much more success directing your energies tospecific markets and not take a scattergun approach.Understand the regulatory and legal regimes and then focuson your distribution channel and build strong relationshipsWho are you trading with:Credit checks will allow you tofind out vital financial information about your customer,including how good they are at paying other suppliers andtheir credit rating. This will enable you to decide if you can dobusiness with them on credit; if not, request payment inadvance.Set your payment terms: Can you get paid upfront? If creditis the only option, have a written agreement on the costs andthe payment procedure. Can you offer an early paymentincentive to reward timely payment? Stick rigidly to your sideof the deal and invoice promptly.Be clear about the service or product you’re selling:Because nearly one in five invoices are unpaid because thecustomer disputes the quality of the service or goodsprovided. Don’t let this become an issue.Get your admin right: 15% of bills are unpaid because theinvoice has the incorrect information. A further 13% are sentto the wrong person. Don’t take the basics for granted – checkit’s correct.Stay on top of billing: Create aged debtor reports to monitorwhich invoices are unpaid after the due date and follow upswiftly with reminders.Your legal rights: You are entitled by law to charge intereston overdue payments.Spot the warning signs: A business almost never goes intoinsolvency overnight. Red flags include customers frequentlyfailing to pay on time, permanently taking advantage of fullcredit lines, asking to prolong overdue bills, changing banksor offering bills of exchange in lieu of payment.Collect your debt: If your bill still hasn’t been paid, send afinal warning letter and turn the debt over to a collectionagency. You may not have the resource but, for example,Atradius has specialised collections teams on the ground incountries across the world ready to take action and you paynothing if they do not successfully collect the debt.Don’t be embarrassed: You may have a long-standingrelationship with your customer but you cannot let thishamper your business sense. Don’t let any customer over-extend your business’ usual payment boundaries and youcan’t afford to be shy about sending payment reminders,conducting credit checks or taking out trade credit insuranceagainst their orders.Protect yourself: Trade credit insurance is the simplest,most cost effective way to protect your business against notgetting paid. If you can’t get paid, for instance if yourcustomer becomes insolvent, is affected by payment defaultor political risk, Atradius will pay your claim – reducing theneed for bad debt provision and releasing money back intoyour business.Avoiding the risks ofnot getting paidBy Mary Ravenscroft, Midlands regional manager for AtradiusNext >