Overcoming obstacles as a start up business

Overcoming obstacles as an Internet Start Up

WikiJob.co.uk was started in 2007 by two young entrepreneurs, Chris Muktar and Ed Mellett. They began the business in reaction to what they perceived as a lack of reliable information about graduate schemes in the corporate world.

At the time, both Chris and Ed were stuck in unfulfilling graduate jobs which they felt did not suit them personally or professionally. They wanted to know more about the possibilities that were open to graduates but found that the information out there was mainly employer driven and did not offer a graduate perspective.

Ed and Chris saw a gap in the market that they felt they could fill. WikiJob was thus created to offer both a reliable source of careers information and a forum in which graduates could discuss their personal trials and tribulations in their hunt for a job. The Wiki concept, in which content is user generated, was perfect for a website purposefully designed for graduates, and run by graduates. They started with no capital and very little business knowledge; yet now sit at the helm of a thriving online business which serves 500,000 visitors a month. These are some of the lessons they learnt along the way.

1. Persistence: Starting a business from scratch requires a puritanical belief in your product and a steadfast dedication to both promoting and improving it. When WikiJob began both Chris and Ed had little in the way of business contacts or acumen. They used their own initiative to build up contacts and attract clients, initiating hundreds of phone calls and meetings to eventually win their first client.

2. Find a niche and ruthlessly exploit it: Having experienced difficulties in finding a suitable graduate career themselves, Ed and Chris knew that there was a market for their product. They tapped into it by figuring out the ways in which they themselves needed help; by solving their own problem they were able to help the graduates in a similar position. They also offered a platform through which graduates could voice their own concern thus encouraging the creation of an online community.     

3. Wherever possible get things for cheap: WikiJob’s early success was based on maintaining a lean and efficient business model and finding innovative ways to get things for free. They managed to get free hosting, free promotion in newspapers and magazines and free access to events. This was due to not only their eye for a bargain but also their commitment to networking and self-promotion.

4. Market yourself relentlessly: WikiJob generate their own marketing through a mixture of online, social media and face to face promotion. Generating an audience of young people online through social media was combined with a commitment to generating a network of professional contacts through face to face meetings and telephone conversations. They decided to conduct their marketing themselves both because of the cost of PR companies and because they felt that they would like to liaise directly with journalists and media professionals and thus control their message. They have so far been very successful and WikiJob has been asked to comment on news stories on a variety of BBC programs and in many of the national newspapers.

5. Develop your skills: When WikiJob was first started Chris and Ed were forced by circumstances to become masters of various trades which they had no previous experience of. They slowly became self taught experts in web design and web marketing whilst simultaneously learning the ins and outs of the graduate labour market. This expertise allowed them to offer a highly personalised service which they could tailor to meet their clients demands. They have allowed themselves space to innovate by not expanding too quickly and maintaining their control over the company.

The future for WikiJob is currently very bright; having expanded incrementally to become one of the largest graduate careers website in the UK they are now taking the next step and expanding overseas with a US website currently in the works. They credit their success to a obdurate commitment to their product and a self belief which allowed them to overcome the numerous difficulties they encountered along the way.

So far in 2011, WikiJob has received two awards acknowledging their achievements in the graduate recruitment industry. In March, WikiJob were announced winners of the Management Today Business Heroes award for ‘New Kid on the Block’. The award praised WikiJob as a ‘career site with a difference’, commending its innovative hybrid style of job board/social network, where users ‘are encouraged to contribute, collaborate and share their experiences with their peers (albeit on a website instead of a student pub)’. WikiJob were also awarded the ‘Niche Job Board’ award at the onrec Industry Awards in March.

Starting up your own small enterprise can thus be a highly rewarding experience both personally and professionally. It demands that business owners develop their skills in a wide variety of different industry areas; it also allows them to develop their own business and marketing strategy, innovate and incorporate their own beliefs into the company ethos. Ultimately, as with WikiJob, hard work will be rewarded and recognized.  

To find out more about WikiJob please call co-founders Chris Muktar or Ed Mellett on 0845 625 9454 or visit www.wikijob.co.uk

Business start ups: have you had enough advice yet?

Hi budding entrepreneur.  How is the business planning going?

I thought I'd review the blog at this point.  Are you enjoying the blog? is it useful to you?

I am thinking of starting off in the month of may now with a step by step guide to putting together all the parts that you need to make a successful business and by the end of it you'll have a business plan.  What you do think? Would this help?

I am also going to pop in some great write ups from guest posts from time to time which will hopefully give you a complete package for starting your business.

What do you think? Comment away!

Keeping your business out of the red

Top Tips for setting up your own business and more importantly keeping your finances out of the red

Jane Scott Paul, Chief Executive of AAT (Association of Accounting Technicians) provides her overarching thoughts on best ways to prepare your finances when setting up your own business.

1)    Be realistic – times are still tough, consumer spending is still slow. Many businesses that succeed don’t make a profit for the first couple of years; if you are hoping to get “rich” quick then you may need to think again.

2)    Keep a business head on. Think strategically about your product, your market, your cash flow and put a business plan together to ensure business stability, growth and profit. A business can not survive on creative flair alone.

3)    Understand the tax implications on setting up on your own. Tax legislation changes at a never-ending pace and it’s important for new businesses to keep up. Why? Because it can affect your bottom line and you might be missing important tax breaks.

4)    Keep on top of your finances right from the start. Implement a system and make sure it works. The law requires all businesses to have proper accounting records. By doing this you’ll manage your business better and help stimulate business growth. Start-ups that don’t do this, put themselves at a serious disadvantage.

5)    Don’t bury your head in the sand - ask for help, speak to an expert or a tax advisor or better still train yourself up. There are many courses out there which can give you basic finance training, book keeping and business management skills.  These skills and invaluable and you’ll use them from day one.

Want to see more clearly?

Clear launches Cloud-based invoicing network to simplify invoicing and payment for small firms.

Free invoicing and time-tracking network manages entire payment process

CLEAR, a new, free to use, cloud-based invoicing and time tracking network, that eases the administrative challenges that UK small businesses and sole traders face, has been launched today.

The CLEAR network will enable small firms to focus more strongly on customer service and growth by more efficiently managing the entire money collection process, from raising invoices, to sending, tracking and receiving payment. The new platform will enable SMEs to secure their cash flow as well as streamline their operations and reduce costs.¹ 

Firms, sole traders and freelancers register for the CLEAR service in seconds and can send their first invoice in less than five minutes. Creating and sending a simple invoice can take less than ten seconds.  The network’s easy-to-use set up wizard guides users through registration which also covers VAT and non-VAT registered businesses. The system is ideal for entrepreneurs and freelancers including photographers, developers and graphic designers who essentially don’t have an office.

The CLEAR network will cut red tape and the time businesses spend on administrative tasks such as invoicing, so they can focus on what they are best at – running and growing their businesses. CLEAR also believes it will help its customer to get paid up to 14 days faster. And because the CLEAR invoicing network is cloud-based, companies don’t have to run any software on their own computers. 

Peter Whent, CEO and founder of CLEAR, said: “Having been a small business owner myself several times, I understand at first hand the value of business tools or innovations to help small companies work smarter and spend more time on their business. Technology solutions such as the CLEAR invoicing network will help small organisations become more agile by streamlining the time they spend on managing a crucial but very time consuming administrative process”.

CLEAR plans to extend the reach of the CLEAR invoicing network beyond a simple web interface. “Many businesses use a business system of some sort to run other parts of their business,” Whent explains. “Rather than provide another interface we are working on integrating CLEAR into some of the popular small business software offerings as well as mobile devices such as iPhone or Blackberry so invoices can be raised and submitted while on a customer’s premises or between appointments. Ultimately we want people to be able to send or receive an invoice via the CLEAR network from anywhere using their system or device of choice.”

“Beyond that we plan to build a complete ecosystem that delivers a range of innovative business tools to small firms accessible from virtually anywhere.” 

Peter Whent continues: “Small businesses know better than others the saying that time is money. We are making invoicing and getting paid as simple as sending an email for small firms. But this is just the first step on a journey.”

Visit Clear at: http://www.clearinvoices.com

Snow patrol chased cars, we chase debts

Chasing your debts

John Davies, head of business law, ACCA

Cash flow has traditionally been an issue for many businesses and the recession has only intensified the problem. The Federation of Small Businesses recently surveyed its members (January 2010) and found that 41 per cent of them dipped into personal savings, 43 per cent used overdrafts and 21 per cent their credit card to stave off the recession.

Although there are definite signs of recovery, access to finance remains a challenge for business. So if external finance is to remain in such short and expensive supply, businesses will need to be extra careful in their management of working capital and all reasonable care needs to be taken in the management of trade credit.  

Minimising the risk

The overall purpose of sound credit management practice is to minimise the risk of a business being landed with bad debts. Businesses must ensure that, wherever credit is extended to customers, the amount of the credit offered, and the terms on which it is given, are appropriate given what is known about the customer’s ability to pay.

At the outset, any business, regardless of size, should consider taking these elementary steps to protect itself against the risk of bad or late debts (bearing in mind that it invariably costs less to pre-empt them than to try to recover them by legal means):

-      Consider what methods of payment you are happy to accept from customers. Retail businesses, more than other types of business, need to be flexible on this point but credit and debit card systems offer protection to the seller which is not affected by subsequent changes in the customer’s circumstances.  

-      For non-retail transactions, consider whether you should identify a monetary threshold beyond which you will make the extension of credit conditional on a new contact passing a credit reference check.

-      Decide in advance what your firm’s policy is to be with regard to late payment of amounts owed to you. Many firms incorporate interest clauses in their payment terms which provide for interest to be charged on debts paid late. Regardless of whether you do this, any business that is paid ‘late’ (which means beyond the contractual payment period) is entitled to charge statutory interest (8% above the prevailing base rate) on top of the amount owed.

-      Ensure that you send out any invoices promptly, with the name and address of your business clearly and accurately stated along with your payment terms. If you intend to take advantage of your statutory entitlement to charge interest on late debts, you do not need to formally announce this, although doing so may act as an additional incentive to the customer to pay promptly.

-      Keep an eye on your outstanding invoices and chase debtors up if your payment fails to turn up when it should. Resources permitting, it makes sense for a business to liaise with its debtors prior to the payment date and not just after.    

Collecting your debts

If despite your efforts you still have not been paid, what are your options?

-      You could ask your solicitor to send a letter to the debtor, stating or implying the consequences of a continuing failure to pay. A well worded letter will often produce the intended outcome.

-      You could sell your invoices to a factoring company or approach a debt recovery firm to chase the debt for you. This will relieve you of the debt and save the embarrassment of direct confrontation, but you will have to pay a fee for the privilege.  A list of recovery agencies can be found on the web site of the Credit Services Association, at www.csa-uk.com

-      You can take action to recover your debt through the courts. For debts of value up to £15,000, you will go through the county court. The court will allocate your claim to one of three streams, according to the value of the debt – claims of up to £5,000 will go through the small claims process, popularly known as the ‘small claims court’. Should you win your case in the small claims court, you may be allowed to claim costs, including legal costs, against the other side. Claims can be filed in person at your local county court or alternatively can be made out on-line via www.moneyclaim.gov.uk.

-      If all else fails, then, depending on the size of the debt owed, an unsatisfied creditor can initiate action to make the debtor insolvent. Where the outstanding amount is at least £750, an unpaid creditor can serve on the debtor a statutory demand for payment – if the demand is not paid within three weeks, you are entitled to present a petition for the debtor to be made bankrupt (in the case of an individual) or to be wound up (in the case of a company). This route is not dependent on the exhaustion of other recovery options and very often, the presentation of a statutory demand concentrates minds and causes the debtor company to pay up.

Stuck in the middle?

Managing cash flow will always involve juggling receipts and payments, and businesses will very often be debtor and creditor at the same time. Firms can find themselves in a difficult situation like this through no fault of their own – very often, smaller firms in particular are kept waiting for payment by a major debtor and as a direct consequence of that can struggle to pay their own creditors.

Where you are debtor and creditor to the same party at the same time, then you can negotiate the set-off of one the outstanding amounts against the other. Otherwise, the fact that you are awaiting payment yourself does not affect your liability to your own creditors and they will be entitled to exert pressure on you to pay up and if necessary resort to recovery procedures. This situation requires careful management, especially if the creditor is a person or business whose custom you value and with whom you wish to continue doing business.  

Cash-flow problems are an on-going challenge for businesses.  As with anything it is easier to prevent problems than resolve them, so I would advise any firm to discuss the adequacy of their credit and debt management practices with their accountants. 

John Davies

ACCA Head of Business Law