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Last Updated: Monday, 23 June, 2003, 20:58 GMT 21:58 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, BBC News Online is publishing a third instalment of answers to your questions. We have tried to include as many questions as possible.

The next instalment will be published on Tuesday, 1 July.


QUESTION
Brenda Pennell, England
There is plenty of anecdotal evidence of the impact of Fair Trade initiatives at the micro-economic level. However, is there any evidence that its effects feed through to the macro-economy?

ANSWER
Anita Roddick, founder of The Body Shop
Fair Trade is starting to look fairly impressive, especially in food products. The idea of organic food took maybe 10 years to catch on - Fair trade is the same. But already it's high profile in supermarkets and in the eco-consumer sector.

Most people now understand the concept and it's part of people's vocabulary even if they don't yet buy the products.

The most unexpected push for the growth in Fair Trade comes from the new vigilante consumer. I won't buy coffee unless I know it's fair-traded. Multiply me by a few thousand and you have the beginnings of a change in retail habits driven by customers rather than marketing men, and that's the most fundamental sort of change.

However, the sector that is conspicuous by its absence from this movement is the garment industry.

QUESTION
Alan Ramsey, UK
I'm currently involved in a small business partnership which is having difficulty with in-fighting amongst the members. How should we re-focus on our main goal of bringing in new business, or is it time we go our separate ways?

ANSWER
Anita Roddick, founder of The Body Shop
Dialogue, dialogue, dialogue. Talking to each other is effective and cheap, so long as you separate the emotions from the issues. Find a facilitator. Pay them if you have to.

Find out what you're united on. Write it down and sign it. Find out where your differences are. Write them down. Recognise that your differences may be irreconcilable.

If you dream of murdering your partners, it may be time to go your separate ways... remember it is supposed to be fun.


QUESTION
Neil Urquhart, Scotland
I run a home-based business with my wife. I do corporate communications, my wife organises business events. We recently merged the two businesses into one limited company and we now have many growth opportunities. However, we are reluctant to employ people (some history there) or to give up the lifestyle benefits of working from home. We do already subcontract work, but we would possibly like to formalise these relationships without going to the extent of employing. What are our best options?

ANSWER
David Wilkinson, partner, Ernst & Young
It is important that you consider carefully what are your personal objectives from your business. For many, lifestyle considerations are the most important, although you may have to recognise that putting lifestyle first could prevent you from addressing some of the growth opportunities you referred to.

There are many examples of businesses, which have managed to grow without taking on large numbers of employees. Internet companies, such as Jobserve, use highly scaleable technology to reduce the requirement for many employees.

Ultimately, however, even companies like this employ staff and rent premises. It is advisable to formalise the position of sub-contractors, particularly to ensure that they do not end up being classified as employees.

Benefits such as sick and holiday pay should be avoided, but this an area on which you should take specific advice from your tax and legal advisor.


QUESTION
Pete Nelder, England
I have been waiting 13 weeks for planning permission to open a sandwich shop in Plymouth. I have never received any feedback from the planners except by harassing them on a daily basis until someone finally happens to be at their desk when I call. It's as if they just want me to give up and go away!! If this goes on much longer I won't be able to afford to open. What can I do to get an answer and be treated fairly?

ANSWER
Liz Barclay, presenter of Radio 4's You and Yours
Your local Business Link will have advisers who will not only know how to go about planning applications but who will know about local planning issues and can advise on legal advice if it comes to that. You'll find the details in the phone book or on the businesslink.org website.

QUESTION
Michelle Boyle, England
I am 18 and I have just completed a Health and Beauty course at Technical college. I would like to start up my own mobile Health & Beauty business offering a range of in-home services. Is any funding available to get me started but not leaving me with large debts? Is any help and advice available to assist me with the start-up, and ongoing support?

ANSWER
Liz Barclay, presenter of Radio 4's You and Yours
Again this is a case where you need specialist advice. There are all sorts of grants and loans available for people setting up new businesses but there are also rules and regulations when it comes to providing any kind of health services to the public. The Business Link is a good place to start. They will help with business planning, finding the finance, legal aspects and give ongoing support as the business grows. They regularly run training courses for people at various stages of business start-up. Look in the phone book.


QUESTION
Graham, UK
We are looking to open a gym/leisure club and likely to require between 200-300K. I am pursuing grants but am interested in funding options to fill any shortfall as we have little available to invest ourselves. A view on how best to position this with lending organisations would be useful to us at this stage. If banks typically look for a ratio of their money to 'other sources', what guidelines are typically followed and how can we improve our chances of success?

ANSWER
Peter Ibbetson, head of NatWest Business Banking
I would recommend that you contact your local Business Link or Enterprise Agency who should be able to help you determine the ideal mix of equity/loan finance and grant aid.

They will also be able to advise on the type of grants and funding available to you locally.

Typically banks will seek some form of financial security from you but the level of contribution will be specific to the individual business proposition. If you do not qualify for conventional bank finance then the government backed Small Firms Loan Guarantee Scheme may be an option for you.

QUESTION
Paul, England
If you have a good business idea but lack the finance to support it, what are the best sources of finance for a new, small business?

ANSWER
Peter Ibbetson, head of NatWest Business Banking
I would recommend that you contact your local Business Link or Enterprise Agency which should be able to inform you of the various funding options available to you in your local area.


QUESTION
Dyfed Evans, UK
I am the finance manager of a small consulting company in the aviation industry. People are our most important asset but I'm concerned that we are not looking after the 'asset' or maintaining it as we would if it were a piece of machinery.

We employ young educated engineers who need to be prepared for conflicts with third parties and as such we ensure that they are 'head strong' individuals.

However, this causes conflict while managing them internally. I feel that the atmosphere in the office is very tense and it is not a very pleasant place to work in. Can you please suggest ways of changing the atmosphere and most probably the culture of a company?

ANSWER
Professor Nigel Nicholson, London Business School
You are describing a problem to do with organisational culture. You are probably right that the machismo selection bias is a significant input to this.

Competitive young males (especially) are notably vulnerable, but only if the surrounding conditions help to induce the problem. I suggest you look at the way you are organised and how your incentives are operating. It sounds like these people see themselves in competition with one another in a zero-sum game.

You really need to figure out ways to reverse this - e.g. by rewarding learning from each other, forums where people exchange insights and experiences, and group bonuses based upon collective achievements. You should also conduct other culture-building activities - such as social events.

Overall, leadership style will be important. This has to be consistent with the values you want to inculcate. No point in saying one thing, while actions speak more loudly in a different voice.

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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