Duncan Bannatyne's Blog

‘April Fool’s Day To Remember

Fri, 01 Apr 2011 09:00:00 GMT

I know it is April Fool’s Day but, trust me, everything I’m about to tell you is true. Today really will be an extraordinary day.

As I write, I’m on the way from London to Salisbury Plain before breakfast for a parachute jump. Not a normal way to start the day, I’m sure you’ll agree, but this is for a very special cause.

A few weeks ago, I received a call from a truly remarkable young man called Ben Parkinson. Ben is one of the most seriously injured of our brave troops serving in Afghanistan; he is a paratrooper, who lost both legs and his voice, as well as sustaining brain damage, after a roadside bomb exploded in 2006.

Since then, he has been working for the Pilgrim Bandits charity to raise money for fellow forces amputees. Today’s jump, at the Army Parachute Association Netheravon Camp on Salisbury Plain, is its latest fund raising initiative. Very few things scare me and any trepidation I might have had at the prospect of jumping out of a plane disappeared as soon as I thought of what Ben and his colleagues have done for this country. Our servicemen are all heroes and deserve great admiration, so wish me luck today as I show my support.

As soon as I arrive back on solid ground, I’ll be tapping bannatyne.co.uk into my Blackberry search engine. That is because, today, my company website is re-launching. Not only that, but I am introducing a new arm of the business, called Bannatyne Digital , a full service creative agency aimed at the SME market. This is no April Fool; I have gone into business with a gentleman called Peter Dickson, who you may know as the ‘Voice of The X Factor’! and Steven Foster who will become a Director of Bannatyne Digital and both have great expertise in this area.

The new service will support small businesses with website creation, mobile marketing, social media, design and illustration and email marketing. I’m fully behind the government’s commitment to support enterprise and, as you may know, I enjoy social media (and occasionally log on to Twitter), so this is a perfect combination. Hopefully, it will help our entrepreneurs to connect with their customers online and to ultimately build successful British businesses. More details are on the new company website, so please take a look and I’d love to hear your feedback.

BRANCHING INTO NEW MARKETS REQUIRES CAREFUL PLANNING

Tue, 30 Nov 2010 09:00:00 GMT

Just because you start a successful business in one sector, doesn’t mean you will do the same thing automatically in a different one; if you don’t do the groundwork and the planning, the consequences could be calamitous.

I have often said that business is not an exact science, and of course I’ve made my share of mistakes along the way. But one thing is true beyond any doubt: all businesses planning to venture into a new marketplace should do their homework properly. That includes a thorough competitor review and full analysis of your potential customer base.

Even the most established of brands have had their setbacks. Sir Richard Branson has done a great job with the Virgin brand, which is represented successfully in a number of different sectors, but not everything touched by the name has turned to gold. Just cast your mind back to Virgin Cola.

Perhaps the drinks market was simply too far removed from Virgin’s area of expertise to succeed. When a business is aiming to branch out, having an established brand certainly helps but history proves you should stick to what you know – the Virgin brand is an outlier and most diversified companies pick markets closer to their core expertise.

When I sit back and think of brands that have branched out successfully, names like BT, Carphone Warehouse and Innocent come to mind. They have one thing in common: they each know their markets inside out. BT has moved from phones to internet to television; Carphone Warehouse, as the name suggests, started with phones for cars, kept the name and now sells cameras and laptops; Innocent now makes food as well as smoothies but still trades on its healthy approach. Each product is a natural extension of the last and many consumers will buy both.

Timing is also a key factor when launching a new venture. I went into the care home business at a time when the Conservative government, under Margaret Thatcher, was pushing a campaign to provide proper care for the elderly and offering incentives to businesses in that area. Likewise, my chain of health clubs has filled a gap in the market and added spas and hotels to its portfolio after finding more demand in these areas. Anyone can do it but the conditions must be right. Entering a fresh market without sufficient expertise and insight is always dangerous. My attitude is always, ‘if you have a good idea, go for it’. But that doesn’t mean dive in head first without thoroughly researching the market you’re planning to take by storm. Entering a fresh market without sufficient expertise and insight is dangerous and there are plenty of salutary warnings provided by business leaders who have backed the wrong venture at the wrong time.

WHY ENTREPRENEURS SHOULDN’T FEAR AUSTERITY

Wed, 27 Oct 2010 09:00:00 GMT

Over the last few years, there has been plenty of risk associated with becoming an entrepreneur and setting up a business from scratch. Undoubtedly, reservations have been amplified by the severity of the credit crunch, and even the most determined entrepreneurs have been forced to consider the relative merits of a more traditional career in teaching or accountancy, for example.

Why put your livelihood on the line, you might ask, when you can train towards a career that will provide security until retirement. If you want to be a teacher, an accountant or a lawyer, that’s great – the world would be a much more difficult place without those professionals. But don’t do it just for the security or because it seems like a risk free option; the training required to become a fully fledged lawyer or accountant comes at a substantial cost and, especially in the current economic climate, doesn’t guarantee you a job for life.

There’s absolutely nothing to lose by registering a business at Companies House. In fact, you might far more easily spend thousands of pounds training for a career that never materialises. My view is that the best time to start a business is right now and every minute you spend deliberating about whether to do it now or put it off for a few more months, is a minute wasted.

The cuts announced in the spending review mean widespread job losses in the public sector but that need not deter people from setting up or growing existing businesses. In fact, entrepreneurs and small companies can draw encouragement from the review; contracts that might previously have gone to publicly funded bodies automatically are now fair game and it’s up to small and medium-sized businesses to pick up the gauntlet and prove they can provide value for money.

Last week, the The Ministry of Justice, Border Agency and Department for Work and Pensions, to take three government agencies, all used the spending review to earmark savings by offering work to private firms. Serco and G4S, the security company, already run some prisons in the UK but now there will be opportunities for private companies to pitch their expertise, according to The Ministry of Justice; and the Border Agency has also pledged to save £500m by offering work to private firms.

These fresh outsourcing opportunities can only be good news for entrepreneurs and small business owners. Large outsourcing businesses are seeing the spending cuts as an opportunity rather than a threat, and while small businesses have often struggled to win Government work in the past, now’s the time start being more bullish. The tendering process is tough, but once you’ve won the first public contact, you start to build credibility and that makes the next one easier to win. The arduous compliance processes you go through can also help you win more business from large private sector clients in future.

The aftermath of the spending review could also be good time to set up a business from scratch. If the business plan answers a practical need, and can deliver results at a reduced cost, the door to huge nationwide contracts is now ajar. One small business that has grasped the nettle is UK Commercial Cleaning, which I invested in on Dragons’ Den; the company started as a tiny operation in the North but has since won contracts to clean government and local authority buildings across the country.

The trend for government agencies to outsource work to the private sector is not only good news for small companies but also for the UK economy as a whole. Competition for contracts and slicker, more efficient operations should shave costs and streamline the system. I’m glad the government has acknowledged that not all of its agencies can be entirely state run; now it’s up to small businesses to prove they can step in and help the economic recovery.

EQUALTIY ACT WILL DAMAGE HONEST EMPLOYERS

Tue, 12 Oct 2010 09:00:00 GMT

My health club company has employed thousands of people and it has never once occurred to me that there should be different pay levels for male and female staff, based purely on their gender. So I find it staggering that the Government has gone to such great lengths to uphold this basic principal in the recent Equality Act; in fact, the Act is so pedantic as to be damaging for honest employers trying to get on with the job of running the country’s businesses and boosting its economy.

No one, least of all me, wants a return to the conditions before level pay was established by the Equal Pay Act in 1970. People like Ford’s female machinists, featured in the film Made in Dagenham, worked tirelessly to bring the issue to the fore but I think even they would baulk at some of the cumbersome legislation that has just been passed.

Business leaders already have plenty of employment law to grapple with but the Equality Act will only add to the paperwork. It isn’t guided by one principle but instead has lots of clauses that will cause lots of problems for employers. Take the part on ‘Discrimination by Association’, for example; if an employee thinks that he has missed out on promotion because the boss doesn’t like his friends or family, he can sue the company. In extreme cases, the employee might even make up a story but he is still innocent until proven guilty, while the employer is guilty until proven innocent. The onus is on business leaders to disprove even the most ludicrous accusations, which is a complete waste of time and resources.

Then there’s the ‘Third Party Harassment’ section, which is beyond a joke. In fact, it’s enough to give an employer a sense of humour failure. It means that any member of staff can sue their employer if they take offence to office banter, even if it has absolutely nothing to do with them. Think how many times a day you could sue your employer if you were so minded; thankfully the majority of people are more sensible, but that’s not the point – the option should not even be open.

Of course, all of my members of staff expect a workplace where they are treated well and looked after. And there are existing laws to help ensure that people come to work knowing they won’t be harassed because of colour, gender, religion, sexuality or disability, for example. Of course, that doesn’t stop people taking a company to court on trumped up claims of discrimination; I’ve had several situations where directors have had to spend days in a tribunal, knowing we would win the case eventually. The loss of time and money hits businesses hard, not to mention the negative headlines and the stress for everyone involved.

The fact that the new Act is so open to abuse really concerns me and I know other employers will feel the same. It encourages staff to cast themselves in the role of victim, no matter how trivial their complaint, and that leaves employers badly exposed. The government should be supporting and protecting our businesses, rather than perpetuating legislation that will strip businesses of authority and force them to deal with needless legislation while productivity falls.

GOING GREEN MAKES BUSINESS SENSE

Fri, 01 Oct 2010 09:00:00 GMT

Boardroom discussions over the last few months have touched on the negotiations about tackling climate change that took place at the United Nations’ conference in Copenhagen.

The questions on everyone’s lips were whether there are ways to change everyday working practices within businesses to help the environment; what responsibility employers have to act; and finally, the trade off between short-term profits and long term survival.

While the necessary leadership was not shown in Copenhagen, in Britain our government has been arguing for widespread changes in business practices to address climate change. The Conservatives also seem to be on the same page. So whatever the outcome of the next general election, the party in power will continue to put pressure on employers to examine their policies.

In my view, government and businesses should be working together rather than government adopting a confrontational stance. Nevertheless, there are straightforward and cost effective measures that employers can take to make more efficient use of resources. The recession has help businesses to focus on saving money and one way to do that is by reducing their carbon footprint.

In my group of leisure clubs, we take a simple approach and look for changes that bring benefit both to the environment and to our bottom line. One of the virtues of being a privately owned company is that we are not beholden to shareholders or to the stock markets and, therefore, we don’t have documents entitled ‘Environmental Policy’ and so on gathering dust on our shelves.

We can take common sense steps that have a positive effect on climate change and our business; for example, we’re moving towards a paperless working environment, better quality waste management contracts, more recycling and tele/videoconferencing rather than expensive business travel.

Employers should also consider recent legislative changes which will, on the one hand, have considerable cost implications for businesses but, on the other hand, will allow us to introduce more efficient systems and save money as well as resources in the long term.

Regulatory changes to air conditioning gases from 1 January, for example, will increase our overheads but encourage us to introduce new technology that will operate more efficiently and have a beneficial impact on energy consumption.

It is well documented that we have to replace candescent light bulbs with energy efficient alternatives; these are much more expensive in the short term but savings in the future will balance out these increases.

The reduced energy bills alone make it worthwhile for employers to replace outdated equipment with newer, more efficient models. My advice is to put aside pressure from the government to make your business greener and make the changes on your terms now rather than letting your systems run till they collapse. All employers could save money by introducing more energy efficient systems; whether that means switching off the office lights when the last person leaves work or cutting down on unnecessary business travel. Looking after the balance sheet and the planet can all be part of the same business plan.

RETIREMENT LAW NEEDS CLARIFYING

Mon, 13 Sep 2010 09:00:00 GMT

The Government needs to clear up some grey areas in the law before scrapping employers’ rights to retire someone when they reach 65.

A growing number of people think traditional retirement will no longer be possible in the future, according to recent research. The Government’s plans to scrap mandatory retirement at 65 will certainly enable more people to work into their late sixties and seventies, with the potential to never give up work.

However, the latest official unemployment figures showed redundancies were higher among over-50s than any other age group, and campaign groups have long argued that older workers find it much harder to re-enter the labour market once they have lost their jobs.

Making it illegal for employers to retire someone purely because of their age should help to reduce a stubborn workplace myth that all older workers are less capable or less productive, or unable to cope with change. I for one feel fitter and sharper now in my 60s than when I was much younger and I know many people are the same as me. In this age of longer life expectancy and flexible working practices, it makes sense to enable people to work into their late 60s and beyond.

But employers are quire rightly concerned by some grey areas that persist with removing the default retirement age. We know the legislation will be scrapped in full from October next year, but we are yet to see the details of how the system will work. In particular, where a 65-year-old worker is no longer carrying out the requirements of their job properly, employers want to know how they can ask that worker when and whether they are planning to leave. In the absence of full guidelines on how to handle this difficult conversation – free from the threat of litigation – employers will worry that some older workers could cling onto their jobs while blocking opportunities for younger people to move up the ladder. Organisations are anxious that tried and tested methods of succession planning will go out of the window.

Another thing employers must be careful to protect against is the possibility that members of staff who continue to work past age 65 may experience age discrimination from other workers or even managers. Those who want to continue working and who add value to businesses should be respected and admired, rather than working while constantly looking over their shoulders.

So it is crucial for employers to promote an open and meritocratic working environment, where all employees are judged and rewarded on their performance, not their age. If older members of staff fear dismissal, purely because of their advancing years, that can only be bad for a business – they might stop taking breaks or holidays in an effort to protect their jobs and that, in turn, will lead to them burning out. The fear of being left on the employment scrap heap should not be forced upon loyal staff who continue to make a great contribution to companies.

Most businesses will probably be grateful for the benefits slightly older and wiser workers can bring. But they must keep an open mind when it comes to the over 65s.

Perhaps one way to retain the services of older workers, and manage the payroll at the same time, is to allow older employees more flexible working hours so they can share their wisdom and experience on a part-time basis. Employers could also consider moving older workers into different roles that are more suited to their skills and experience.

It is up to employers to find a strategy that works for their business, but they should be prepared and excited by the potential of key workers carrying on past 65.