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Last Updated: Wednesday, 11 June, 2003, 17:02 GMT 18:02 UK
The small business panel of experts
A panel of experts on small business answer questions from BBC News Online readers.

Whether you are worried about growing your company without losing control, or agonising over funding for a new business, our panellists can help you.

Following an overwhelming response last week, BBC News Online will publish the answers to your questions in four instalments. We have tried to include as many questions as possible.

The next instalment will be published on Tuesday, 17 June.

Lewis Santos, UK
I started my own consultancy two years ago and it is all going well in spite of the little mistakes that I make. Different mistakes each time of course. Thinking back to the beginning of your business achievements, which were the top three small mistakes which you may have wished you had been better prepared for and avoided?

Anita Roddick, founder of The Body Shop
The small mistakes pale into insignificance against the biggest ones I made - going public and employing external consultants. However, I have trawled my memory for some real small early ones. Here are a few:

  • Don't ever go to the bank manager with your kids
  • Always be prepared for any financial eventuality
  • Gut instinct can't always be the answer
  • Don't always trust CVs - always, always check references
  • Don't neglect your stock. The back-end of the business is less interesting but you'll find stock will disappear if you don't look after it.

Alicia Mughal, UK
I am about to open my women's fashion boutique in the North Laines in Brighton - literally around the corner from where Anita's first retail outlet was set up. What five key points should I remember to ensure that I am still trading next year?

Anita Roddick, founder of The Body Shop
Location, location, location. Research the nature of trading in great detail. When is the street busy? Don't wait for customers to come in. Go out and get them. I put a bubble machine outside my shop to drag curious people in.

Tell everyone you're here. Get an article in the Brighton Evening Argus. I rang them up and told them I was being intimidated by Mafia undertakers. Read the full story in my book, "Business as unusual".

Be frugal. Don't have business lunches. Don't waste your money. Never give people free samples. Loan items to the press, don't give them away. Make sure the window looks amazing.

Shantau, Vietnam
How do we grow without losing control?

David Wilkinson, partner, Ernst & Young
If you are referring to ownership control, it can be done and there are many examples of successful businesses that have grown without external equity funding. Vijay and Bhikhu Patel, who were Ernst & Young Entrepreneur of the Year winners in 2001, still own 100% of their company, Waymade Healthcare.

Often, the lack of external funding can dramatically limit the growth rate or potential of a business.

If you are talking about the way in which you run your business, there is a clear need for management style to evolve as the business grows. Entrepreneurs need to move from an autocratic approach, in which they can control through their own involvement in decisions, to a more structured approach in which they delegate responsibility to the next tier of management and rely on a system of reporting and internal checks and balances to monitor progress.

The challenge is then to retain the entrepreneurial flair and innovative spirit, despite the more systemised environment, by giving employees a sense of empowerment.

Fiona Tye, UK
What's your advice on advertising, for someone who's self-employed and working from home? So far I've always got all my work by word of mouth, and repeat business from a few core clients, but I'd like to be more pro-active. I haven't advertised before because I didn't want to publish my telephone number or address on my website or any advert since they are my personal home details. I've heard that people don't necessarily respond well to websites and adverts which don't state these details though - is this true?

Liz Barclay, presenter of Radio 4's You and Yours
It's always easier to keep customers than to get new ones - if your customer care is good enough. You need to make it as easy as possible for new clients to contact you - however they choose. If their preferred choice isn't available, they'll simply use the competition. Your ads should have phone, fax, e-mail and website options. Is it possible to set up a second line that can be used for both phone and fax to add to your general e-mail address? And if you can't use your home address, what about a Box number?

Nicolai Thomson, UK
I am 19 years old, and about to go to university to study Accounting and Finance. For the past year, I have been importing contemporary jewellery for the 16-25 age group market. The price of the items is obviously quite low to bring the latest fashions to a wider audience at one-fifth of the price charged by high street retailers.

Am I going to have any chance of getting finance on a small scale (5,000) for initial stock, a website, and basic advertising, bearing in mind my age and experience?

Would my educational grades have any influence on the decision? I have a sound business plan, cash flow forecasts and sales forecasts. Sales would take place on the internet and to private individuals.

I have a real desire for jewellery and am hungry for success in the long term. Any feedback would be invaluable.

Peter Ibbetson, head of NatWest Business Banking
It sounds like you have done a lot of research and planning for your business, which is an excellent sign. The fact that you have got a sound business plan, cash flow and sales forecasts is a good start and having an accounting and finance background will give you knowledge in an area that many small businesses find difficult.

Applications for borrowing are assessed on the specific business proposition and will take into consideration your experience, knowledge and ability to demonstrate that you can successfully manage a business. It is always best to make an appointment with a Business Manager to discuss your proposition.

Age should not be an issue. The Princes Trust for business is targeted at 18-30 year olds and may be of help to you with advice and finance.

Steve Esplin, England
Why are banks so loathe to lend start-up companies money using the DTI guarantee scheme? Why do they insist on people risking their homes to start a business?

Peter Ibbetson, head of NatWest Business Banking
Although security is considered as part of our overall assessment process, the overriding factor for the bank to consider is business viability.

For some propositions, such as start-up businesses, outside factors are difficult to accurately assess and whilst the bank and the customer must consider these factors in their plans, the bank may seek to secure borrowing to cover the potential level of risk involved.

Banks are not loathe to lend start-up companies money via the Small Firms Loan Guarantee scheme, in fact many recommend it to small businesses that do qualify for conventional bank borrowing. The DTI scheme is not available to those who have assets available, such as a home or investments.

Alex, UK
In the recent BBC2 series "I'll show you who's boss" troubleshooter Gerry Robinson gave advice to small family-run businesses on how to get out of the various ruts they were in. The predominant theme was that these businesses had no clear leader.

I am a co-director of a small (but not family) software company. The three directors have always felt that we can work things out democratically, and that a designated leader or MD was unnecessary and almost old fashioned.

As a result our decision-making process is random and inefficient. Firstly, do you agree with Mr Robinson about the importance of a single clear leader, even in a very small firm? Secondly, if the politics of a small firm make it extremely difficult to appoint a single leader, are there any strategies for achieving the goal without explicitly appointing an MD?

Professor Nigel Nicholson, London Business School
Gerry Robinson is an acute observer and analyst but he really does not understand family businesses and I disagree with his insistence on unitary leadership. In the long run he may have a point: co-leadership models tend to be less sustainable over a long period, though there are notable exceptions, even outside the family business world - Proctor and Gamble, Hewlett and Packard etc.

In families, blood ties make co-leadership much easier to implement than in other types of firm. A recent US survey found one in nine family businesses were running successfully with this model.

However, you do need clear decision making processes and forums. Every meeting should be skilfully chaired to achieve consensus over strategic issues. When conflicts of opinion arise they can be healthy so long as they focus on task and process issues and not personalities. If you find yourselves blocked, don't let it paralyse you. Find ways of moving on. Good luck!

Liz Crosbie, UK
We are a small strategy consultancy and continue to experience problems with post graduate entrants. Repeatedly despite full briefings they appear not to have any idea what work is actually about, regardless of having undertaken a vocational M.Sc and their financial and progression expectations are totally unrealistic. I am loathe not to train any one and only employ other people's trainees but do you have any suggestions on 'grounding' new graduates, changes we could make to our process of recruitment or should we give up with youngsters?

Professor Nigel Nicholson, London Business School
Yes, it is common to find educated young people with not much idea about business realities and ways of working - such as fuzzy decision making and team working.

One method I have seen work quite well is to set them a project to find out how the business operates (or some part of it) and report back to you. It gives them licence to wander round asking people dumb questions - and you get the additional benefit of finding out things you might not have known about your organisation. Newcomers often see things that need fixing that you have begun to take for granted.

The opinions expressed above are those of the panel of experts, not the BBC's. The advice is not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.


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