What We Have Achieved
I found the workshops, presented by VFM business advisors to be really useful and cover the major topics necessary in this stage of my business career. The content was delivered in small understandable pieces, with plenty of time for Q&A. Steve in particular stood out as knowledgeable and someone who's advice you could trust. The way he drew on his real life experiences to contextualise issues helped with my understanding and made for interesting listening.
My ideas about the business have changed drastically as a result of this experience. At the first workshop I was preparing to sell safety equipment, but after group discussions and one to one meetings with the supportive team at Old Broadcasting House, I now find myself embarking on an exciting joint venture with ELHFA.
The workshops have helped me to cement my ideas, and given me the direction and drive to take the first steps. Completing all of the exercises discussed during the workshops along the way, complemented by an extensive consultancy project for ELHFA, has now provided me with the basic tools and a ‘road map’ to get going.
I have achieved the following:
Elevator Pitch – defining TEDA concisely
Defined USPs of products, and TEDA to form our company proposition
Decided on Limited company status - with day to day operations under my jurisdiction
Named the company – The Ethnic Diet Association
Understood Terms of Business requirements – and begun to compose drafts
Realised how to maintain control – through holding the casting vote with 51% share
Gained insight on intellectual property
issues - discussed potential patent for VTAs
Understanding of book-keeping and basic
records – Cash Book, Bank Reconciliations, Petty Cash, and Invoicing
Gained insight on year end accounts – when they are due, and what they must include
Learnt about my responsibilities as a director
Completed analysis of the marketing environment, buyer behaviour and competitors
Completed a PEST analysis for TEDA
Performed a competitive sweep for TEDA
Segmented the market through Porters 5 Forces
Learnt about generic marketing strategies – including differentiation and marketing management
Created a marketing mix for TEDA – product, price, place, promotion
Gathered prospecting data – and learnt where to source this information
Created a direct mailer for TEDA – and learnt about the correct approach
Prepared a cold calling script – including qualification questions and objection handling
Identified features and benefits
Learnt how to close a deal
Gained a basic understanding of how to apply NLP and its various advantages
Realised the importance of networking - how it is a life skill, and gained some practice
Learnt where to network and about online resources
How to market yourself as ‘brand you’
It’s easy to see that I’ve learnt an awful lot during the incubator workshops, more than ever I’m feeling prepared and confident about being self employed and following my dream.
If you’re interested in business or perhaps thinking of going to uni, and still looking for that killer course then I would recommend doing BA Hons Business Creation and Enterprise, as it is more hands on than many courses and a great starting point for your business. Everyone here has been really helpful and a pleasure to work with.
I hope this blog has been interesting and given you some helpful hints – if not then check out my post with my 12 top tips for business start-ups!
Showing posts with label ethnic diet association. Show all posts
Showing posts with label ethnic diet association. Show all posts
Saturday, 18 April 2009
Tuesday, 7 April 2009
Post 7: Professional Selling Process
Everyone knows that to do business and succeed it all about the sales and closing deals, but how do you turn yourself from being a novice to someone "that could sell ice to the eskimos"?
Some people are born salespeople, but there are some simple steps to follow to drastically improve the chances of closing deals if you are not one of the lucky few natural sellers.
During the first workshop it was discussed that start-up business should initially sell to people they know, and make use of effective networking to source further prospects. Steve explained that generating sales is much like a funnel whereby many initial sales calls must be made in order to close a far smaller number. This is best demonstrated in the picture below:
Steve also explained that there is a framework used when selling professionally which can be seen below:
Step 1 of the Professional Selling Process - Prospecting
The first step of the professional sales process is prospecting. This involves compiling a list of potential purchasers for your product or service who are most likely to be interested. As the VTAs I am looking to sell target a very specific niche market, a focus must be paid to the quality of records as opposed to the quantity, the main sources of prospecting data include:
• Telephone directories
• Trade listings
• Chamber of Commerce
• Purchased information from a market researchers
• Business reports
To get people thinking about where to find prospecting data the following table was provided by Steve and has been completed for my company, The Ethnic Diet Association:
Unsurprisingly the largest source of prospecting data comes from the internet given the various telephone directories and government information websites available on-line. From the workshop I also came to realise how easy it is to purchase data from places such as the Chamber of Commerce and local councils. Steve mentioned that these records can cost as little as 18p each, and are usually up to date and accurate.
Although the sources mentioned have provided many names and numbers, I think only a very small fraction of these will actually be fit for purpose. I’m sure I’ll find out when I give them a call!
Initial Sales Contact
To offer the best chance of a sale with each new prospect a number of key points were discussed during the first workshop, these include:
1) Getting noticed by being prepared – use referrals and name drop to build instant credibility with a new prospect, or gather as much useful information as possible about each prospect before making the call as this will help to build rapport.
2) Send a mailer out to prospects before the first conversation - to get your company lodged in their mind.
3) Send a second mailer to remind people of your product/service – obviously this must be different to the first.
4) Telephone the prospect – using a warm, friendly and professional tone.
Steve suggested that steps 2, 3, and 4 should all be completed within approximately 1 week so as the information is fresh within a prospects mind upon the first conversation.
Although a lot of time is spent researching using this approach ultimately reducing the number of sales calls, it means that each call is well researched and professional which should have a positive impact on the number of sales, and the impression prospects are left with after the conversation.
Creating a Mailer
American studies have found that on average people are exposed to over 3000 adverts per day, www.ucsusa.org/publications/guide.ch1.html.
In order to make a mailer stand out Steve discussed some key principles for the design:
Addressing the correspondence personally – as people are always more likely to read on.
Grab their attention – use a picture or statement to gain intrigue to promote further reading.
Provide useful information – show you understand their issues to gain credibility
Prove you are worth talking to – demonstrate in the mailer that you are able to assist their business.
Ask them to take action steps – such as looking at your website or sending an email of their requirements.
Based on the information and approach suggested in the workshop a mailer for The Ethnic Diet Association can be seen below:
Preparing a Calling Script
Based on the professional sales approach discussed earlier, having sent prospects a couple of sales letters it is now time to begin cold calling. It’s no secret that this is one of the jobs people dislike, but it is a highly cost effective way of generating business.
Steve touched on the fact that 80% of the response gained from people you are calling is based on how you come across, as opposed to what you say. A happy, positive and professional approach will always get a better response than one where the salesperson sounds bored, nervous and amateur. It was suggested that practicing using a Dictaphone is an excellent way of perfecting tone and pitch.
As salespeople will tell you, selling is a numbers game and every “no” is another step towards getting a “yes”. Remember that good sales people don't take negative responses personally and are thick skinned to rejection.
The following was suggested as a good general plan for sales calls:
• Introduce yourself and your business
• Provide some form of context
• Ask them an open question
• Talk through their issues
• Ask for an appointment
• Thank them and end the call
To implement this strategy for The Ethnic Diet Association, the following calling script has been prepared:
I know that some of you will be scared by the thought of 'cold calling', but if you follow these steps you can make yourself as prepared as possible. I suppose I'm lucky in that talking to strangers has never phased me, and I've had experience of cold calling like this before, but this workshop still allowed me to add structure and utilise the calls effectively to gain my objectives.
For people that are worried think about it this way, the worse that can happen is they say no, or are rude - it may get you down a bit at first but remember that you are only a voice to them and you may never have to speak to them again. Don't take it personally, they're the ones that are missing out on your fantastic product!
For people who are struggling with making cold calls it is suggested that they:
• Allocate time to make the calls, and stick to this allocation
• Ignore negative responses, unless they have a good point which could help improve the later calls.
• Prepare for each call thoroughly which should build confidence
• If negative responses are still prominent then improve the prospecting list and calling script.
Another common problem with cold calling is overcoming objections, discussed in my next post.
Recommended Links:
• Writing sales letters – www.justsell.com
• Direct Selling Association – www.dsa.org.uk
• Institute of Direct Marketing - www.theidm.co.uk
Some people are born salespeople, but there are some simple steps to follow to drastically improve the chances of closing deals if you are not one of the lucky few natural sellers.
During the first workshop it was discussed that start-up business should initially sell to people they know, and make use of effective networking to source further prospects. Steve explained that generating sales is much like a funnel whereby many initial sales calls must be made in order to close a far smaller number. This is best demonstrated in the picture below:
Steve also explained that there is a framework used when selling professionally which can be seen below:
Step 1 of the Professional Selling Process - Prospecting
The first step of the professional sales process is prospecting. This involves compiling a list of potential purchasers for your product or service who are most likely to be interested. As the VTAs I am looking to sell target a very specific niche market, a focus must be paid to the quality of records as opposed to the quantity, the main sources of prospecting data include:
• Telephone directories
• Trade listings
• Chamber of Commerce
• Purchased information from a market researchers
• Business reports
To get people thinking about where to find prospecting data the following table was provided by Steve and has been completed for my company, The Ethnic Diet Association:
Unsurprisingly the largest source of prospecting data comes from the internet given the various telephone directories and government information websites available on-line. From the workshop I also came to realise how easy it is to purchase data from places such as the Chamber of Commerce and local councils. Steve mentioned that these records can cost as little as 18p each, and are usually up to date and accurate.
Although the sources mentioned have provided many names and numbers, I think only a very small fraction of these will actually be fit for purpose. I’m sure I’ll find out when I give them a call!
Initial Sales Contact
To offer the best chance of a sale with each new prospect a number of key points were discussed during the first workshop, these include:
1) Getting noticed by being prepared – use referrals and name drop to build instant credibility with a new prospect, or gather as much useful information as possible about each prospect before making the call as this will help to build rapport.
2) Send a mailer out to prospects before the first conversation - to get your company lodged in their mind.
3) Send a second mailer to remind people of your product/service – obviously this must be different to the first.
4) Telephone the prospect – using a warm, friendly and professional tone.
Steve suggested that steps 2, 3, and 4 should all be completed within approximately 1 week so as the information is fresh within a prospects mind upon the first conversation.
Although a lot of time is spent researching using this approach ultimately reducing the number of sales calls, it means that each call is well researched and professional which should have a positive impact on the number of sales, and the impression prospects are left with after the conversation.
Creating a Mailer
American studies have found that on average people are exposed to over 3000 adverts per day, www.ucsusa.org/publications/guide.ch1.html.
In order to make a mailer stand out Steve discussed some key principles for the design:
Addressing the correspondence personally – as people are always more likely to read on.
Grab their attention – use a picture or statement to gain intrigue to promote further reading.
Provide useful information – show you understand their issues to gain credibility
Prove you are worth talking to – demonstrate in the mailer that you are able to assist their business.
Ask them to take action steps – such as looking at your website or sending an email of their requirements.
Based on the information and approach suggested in the workshop a mailer for The Ethnic Diet Association can be seen below:
Preparing a Calling Script
Based on the professional sales approach discussed earlier, having sent prospects a couple of sales letters it is now time to begin cold calling. It’s no secret that this is one of the jobs people dislike, but it is a highly cost effective way of generating business.
Steve touched on the fact that 80% of the response gained from people you are calling is based on how you come across, as opposed to what you say. A happy, positive and professional approach will always get a better response than one where the salesperson sounds bored, nervous and amateur. It was suggested that practicing using a Dictaphone is an excellent way of perfecting tone and pitch.
As salespeople will tell you, selling is a numbers game and every “no” is another step towards getting a “yes”. Remember that good sales people don't take negative responses personally and are thick skinned to rejection.
The following was suggested as a good general plan for sales calls:
• Introduce yourself and your business
• Provide some form of context
• Ask them an open question
• Talk through their issues
• Ask for an appointment
• Thank them and end the call
To implement this strategy for The Ethnic Diet Association, the following calling script has been prepared:
I know that some of you will be scared by the thought of 'cold calling', but if you follow these steps you can make yourself as prepared as possible. I suppose I'm lucky in that talking to strangers has never phased me, and I've had experience of cold calling like this before, but this workshop still allowed me to add structure and utilise the calls effectively to gain my objectives.
For people that are worried think about it this way, the worse that can happen is they say no, or are rude - it may get you down a bit at first but remember that you are only a voice to them and you may never have to speak to them again. Don't take it personally, they're the ones that are missing out on your fantastic product!
For people who are struggling with making cold calls it is suggested that they:
• Allocate time to make the calls, and stick to this allocation
• Ignore negative responses, unless they have a good point which could help improve the later calls.
• Prepare for each call thoroughly which should build confidence
• If negative responses are still prominent then improve the prospecting list and calling script.
Another common problem with cold calling is overcoming objections, discussed in my next post.
Recommended Links:
• Writing sales letters – www.justsell.com
• Direct Selling Association – www.dsa.org.uk
• Institute of Direct Marketing - www.theidm.co.uk
Monday, 6 April 2009
Post 6: Book-keeping & Accounts
Having established the legal framework for TEDA and taken some steps to implement this, the next workshop was conducted by VFM and introduced business accounting.
I’ve never been the best with numbers, and always thought to play it safe I’d just employ a professional, but it was discussed that although an accountant is necessary, a lot of the basics are easy to do once you know the process. This also saves money when you do have to employ an accountant by reducing their workload.
The first areas covered, and the most relevant to TEDA were book-keeping and discussion on basic records to hold, which are essential for traceability, to understand profitability and maintain cash flow. It is advised that these are kept up to date, especially during a recession.
These include:
Cashbook
Record of all business transactions and monies coming in and out of the company. Always keep your cashbook up to date, as this is the most accurate account of money for your business.
Cash Book spreadsheet I prepared for TEDA
• Always enter data from source documentation e.g. cheque number/paying in number
• Banks make mistakes – always check against originals
• Only enter payments in cashbook when cheques clear
• Keep paid and unpaid invoices separate
• Always cross reference
Bank Reconciliations/Statements
Much like the bank statement you receive on a monthly basis for your personal account, this document offers a monthly reconciliation for businesses. Remember some cheques and wireless transactions take time to clear which can make the monthly reconciliation document inaccurate.
Petty cash book (PCB)
Businesses need a small amount of cash for miscellaneous items (transport, stationery etc), which still need to be recorded. Your PCB keeps a record of these transactions. When using a PCB, it’s essential to record all transactions, order data logically and keep receipts to check against and form basis for business expenses (non-taxable). For TEDA, I will use this to record expenses such as petrol for meetings and lunch at events etc.
Sales Book
A sales book is purely used to record sales, and can be done in a ‘per day’ format, ‘per week’ or others dependent on your level of sales. It records sales in a sequential format, and if a number is missed, it is also recorded. You need to keep a copy of all invoices issues, filed numerically, and note in the sales book the dates of payment for each sale.
In the initial period with an expected level of 10 sales per month, keeping track of this should be easy. When sales increase, it will include distributor sales, individual sales and bulk sales to customers.
Payroll Records
Keeping track of a company’s payroll can be done manually or using software such as Sage. It is important to keep records to produce year-end returns for the HMRC P35’s etc. Payroll can be tedious and is often outsourced at little cost to payroll bureau. As there are no employees, payroll will purely be in the form of dividends (payment received by directors).
VAT Records
You are only required to register VAT records if the business has a turnover of more than £67,000 (figure as of April 2009 from http://www.hmrc.gov.uk/vat/start/register/index.htm.). VAT can become a complex issue as there are different methods of VAT accounting and I’d strongly recommend you speak to an accountant for the best method for you. In the first year I do not anticipate to reach this threshold, however could become VAT registered at any point once the threshold is reached.
Purchase Invoices
To keep a record of all purchases/transactions from my suppliers all purchase invoices will be filed alphabetically, and will be used to cross reference against other records, such as the cashbook.
Sales Ledger
Used as part of the ‘double-entry’ system and keeps track of sales. It must be reconciled regularly, and is usually most appropriate when a large number of credit sale transactions occur.
Purchase Ledger
As with the sales ledger, this is most applicable if making a large number of purchases on credit. Forms basis of double-entry system and will be regularly used for cross checking.
Year-End Accounts
Irrelevant of the legal status of a business, accounts must be prepared annually for HMRC and as a measure of the venture’s success. Annual accounts are reviewed during loan applications and in the event of a business sale, therefore accurate year end accounts are vital.
Sole traders and partnerships have no legal obligation to employ an accountant and are able to keep these accounts private, but TEDA, as a limited company will employ an accountant and have to publish accounts through companies house where they can be requested by anyone.
There is flexibility in setting the date of year end accounts for tax and practical reasons, in most cases this is in line with the traditional tax year. Accounts must be prepared promptly, or penalties are incurred.
You may have heard of the term creative accounting, which comes from accountants being able to off-set specific items against tax, such as charitable donations or if a home office is used (like many of you out there do) you can off-set some utility/rent costs against tax. If you wish to investigate this further, try searching under:
- Disallowable items
- Private usage adjustments
- Depreciation/Capital Allowances
HMRC may adjust these types of calculations, so be aware that your year-end submission is not the final amount of tax you may have to pay.
Stock cut-off is important, and you must ensure that goods purchased close to the year-end are accounted for in the correct period. Also, if your business keeps some stock, they must be detailed in your accounts.
The remainder of the workshop went into more detail on VAT, obviously this is not relevant for me at present, but for more detail please see: www.hmrc.gov.uk under the ‘business & corporations section’, or post a comment through the blog and I'll answer any questions.
The Law & Directors’ Responsibilities
The other most relevant point I learnt for myself and TEDA was surrounding the law and Directors’ responsibilities. I was amazed to learn that there are about 50 separate duties placed on directors with regards to filing, which if ignored could result in disqualification for a minimum of 2, and maximum of 15 years – this could seriously affect my entrepreneurial aspirations!
I was interested to find that a register of company directors must be maintained, and changes notified to the Registrar of Companies within 14 days:
- Appointment by form 288a
- Resignation by form 288b
All directors are expected to act in the best interest of their company and must avoid conflicts of interest. In some cases, a director’s actions can be a criminal offence, usually as a result of ‘insider dealing’.
Directors are ultimately responsible for meeting the stringent accounting procedures, and that they show ‘true and fair view’ for HMRC. For more information please refer to Part 10 of the Companies Act 2006, available at:
http://www.opsi.gov.uk/acts/acts2006/ukpga_20060046_en_13.
The final part of this workshop involved a question and answer session about income tax bandings. If you would like to get up to date information on personal and corporate tax please see the HMRC website.
Recommended Links:
• Income tax & National Insurance – www.inlandrevenue.gov.uk
• VAT – www.hmce.gov.uk (HMRC)
• Managing Creditors & Debtors – www.payontime.co.uk
• Addressing cashflow problems – www.icm.org.uk (Institute of Credit Management)
• Issuing invoices and collecting debts – www.courtservice.gov.uk (Credit Service Association)
I’ve never been the best with numbers, and always thought to play it safe I’d just employ a professional, but it was discussed that although an accountant is necessary, a lot of the basics are easy to do once you know the process. This also saves money when you do have to employ an accountant by reducing their workload.
The first areas covered, and the most relevant to TEDA were book-keeping and discussion on basic records to hold, which are essential for traceability, to understand profitability and maintain cash flow. It is advised that these are kept up to date, especially during a recession.
These include:
Cashbook
Record of all business transactions and monies coming in and out of the company. Always keep your cashbook up to date, as this is the most accurate account of money for your business.
Cash Book spreadsheet I prepared for TEDA
• Always enter data from source documentation e.g. cheque number/paying in number
• Banks make mistakes – always check against originals
• Only enter payments in cashbook when cheques clear
• Keep paid and unpaid invoices separate
• Always cross reference
Bank Reconciliations/Statements
Much like the bank statement you receive on a monthly basis for your personal account, this document offers a monthly reconciliation for businesses. Remember some cheques and wireless transactions take time to clear which can make the monthly reconciliation document inaccurate.
Petty cash book (PCB)
Businesses need a small amount of cash for miscellaneous items (transport, stationery etc), which still need to be recorded. Your PCB keeps a record of these transactions. When using a PCB, it’s essential to record all transactions, order data logically and keep receipts to check against and form basis for business expenses (non-taxable). For TEDA, I will use this to record expenses such as petrol for meetings and lunch at events etc.
Sales Book
A sales book is purely used to record sales, and can be done in a ‘per day’ format, ‘per week’ or others dependent on your level of sales. It records sales in a sequential format, and if a number is missed, it is also recorded. You need to keep a copy of all invoices issues, filed numerically, and note in the sales book the dates of payment for each sale.
In the initial period with an expected level of 10 sales per month, keeping track of this should be easy. When sales increase, it will include distributor sales, individual sales and bulk sales to customers.
Payroll Records
Keeping track of a company’s payroll can be done manually or using software such as Sage. It is important to keep records to produce year-end returns for the HMRC P35’s etc. Payroll can be tedious and is often outsourced at little cost to payroll bureau. As there are no employees, payroll will purely be in the form of dividends (payment received by directors).
VAT Records
You are only required to register VAT records if the business has a turnover of more than £67,000 (figure as of April 2009 from http://www.hmrc.gov.uk/vat/start/register/index.htm.). VAT can become a complex issue as there are different methods of VAT accounting and I’d strongly recommend you speak to an accountant for the best method for you. In the first year I do not anticipate to reach this threshold, however could become VAT registered at any point once the threshold is reached.
Purchase Invoices
To keep a record of all purchases/transactions from my suppliers all purchase invoices will be filed alphabetically, and will be used to cross reference against other records, such as the cashbook.
Sales Ledger
Used as part of the ‘double-entry’ system and keeps track of sales. It must be reconciled regularly, and is usually most appropriate when a large number of credit sale transactions occur.
Purchase Ledger
As with the sales ledger, this is most applicable if making a large number of purchases on credit. Forms basis of double-entry system and will be regularly used for cross checking.
Year-End Accounts
Irrelevant of the legal status of a business, accounts must be prepared annually for HMRC and as a measure of the venture’s success. Annual accounts are reviewed during loan applications and in the event of a business sale, therefore accurate year end accounts are vital.
Sole traders and partnerships have no legal obligation to employ an accountant and are able to keep these accounts private, but TEDA, as a limited company will employ an accountant and have to publish accounts through companies house where they can be requested by anyone.
There is flexibility in setting the date of year end accounts for tax and practical reasons, in most cases this is in line with the traditional tax year. Accounts must be prepared promptly, or penalties are incurred.
You may have heard of the term creative accounting, which comes from accountants being able to off-set specific items against tax, such as charitable donations or if a home office is used (like many of you out there do) you can off-set some utility/rent costs against tax. If you wish to investigate this further, try searching under:
- Disallowable items
- Private usage adjustments
- Depreciation/Capital Allowances
HMRC may adjust these types of calculations, so be aware that your year-end submission is not the final amount of tax you may have to pay.
Stock cut-off is important, and you must ensure that goods purchased close to the year-end are accounted for in the correct period. Also, if your business keeps some stock, they must be detailed in your accounts.
The remainder of the workshop went into more detail on VAT, obviously this is not relevant for me at present, but for more detail please see: www.hmrc.gov.uk under the ‘business & corporations section’, or post a comment through the blog and I'll answer any questions.
The Law & Directors’ Responsibilities
The other most relevant point I learnt for myself and TEDA was surrounding the law and Directors’ responsibilities. I was amazed to learn that there are about 50 separate duties placed on directors with regards to filing, which if ignored could result in disqualification for a minimum of 2, and maximum of 15 years – this could seriously affect my entrepreneurial aspirations!
I was interested to find that a register of company directors must be maintained, and changes notified to the Registrar of Companies within 14 days:
- Appointment by form 288a
- Resignation by form 288b
All directors are expected to act in the best interest of their company and must avoid conflicts of interest. In some cases, a director’s actions can be a criminal offence, usually as a result of ‘insider dealing’.
Directors are ultimately responsible for meeting the stringent accounting procedures, and that they show ‘true and fair view’ for HMRC. For more information please refer to Part 10 of the Companies Act 2006, available at:
http://www.opsi.gov.uk/acts/acts2006/ukpga_20060046_en_13.
The final part of this workshop involved a question and answer session about income tax bandings. If you would like to get up to date information on personal and corporate tax please see the HMRC website.
Recommended Links:
• Income tax & National Insurance – www.inlandrevenue.gov.uk
• VAT – www.hmce.gov.uk (HMRC)
• Managing Creditors & Debtors – www.payontime.co.uk
• Addressing cashflow problems – www.icm.org.uk (Institute of Credit Management)
• Issuing invoices and collecting debts – www.courtservice.gov.uk (Credit Service Association)
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