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THE (OBVIOUS AND NOT-SO-OBVIOUS) WAYS ENTREPRENEURS MAKE MONEY FROM THEIR INVENTIONS

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Some entrepreneurs have a firecracker of an idea and seem to instantly make millions from it, whilst others plug away until something great happens. But the one thing they all have in common is strategic planning, focus and hard work… and a bit of luck too.

Here’s how entrepreneurs in the UK grow their idea – and hopefully make some serious cash from it.

 

1. Innovating strategically

Emma Lewis

Racking your brain for a business start-up idea? Most people seem to think the only way they’ll be a successful entrepreneur is to come up with something brand new. A flashing lightbulb moment where they create something no-one has ever seen before.

But actually, that’s not usually what happens. Instead, many entrepreneurs and start-ups simply take a product or service that already exists and improve it. This might be so it appeals to more consumers, or is cheaper or easier to manufacture and use.

An example? The iPhone. Launched back in 2007, mobile phones were nothing new. People were generally happy with what they had; they could send texts, make calls and take the odd photo. But what the iPhone did was take the best bits of the existing technology and make it better. Suddenly people could easily surf the web from the palm of their hand, with screens that were much bigger than anything before. New and exciting apps exploded onto the scene alongside instant messaging and social media – and the telecoms market was changed forever.

It’s tricky, but getting this right could put your business light years ahead of any competitors. Don’t forget too that innovative research and development activities seeking to make an advancement in science or tech may well attract lucrative R&D Tax Credits.

FinTech companies are particularly innovative, but of course, innovation occurs across just about every business in every sector.

 

2. Putting business growth front and centre

An entrepreneur must grow their business to stand any change of surviving. Sustained growth needs to come from the top down, weaving itself into the very fabric of the business.

Employing fresh, innovative talent is an important way of doing this. Onboarding skilled people who are fizzing with new ideas and know how to implement them effectively will keep the business evolving.

“Finding the right people is always a tough task in business”, says Kelly Ruston, Communications & PR Director at Lightbox.

“No idea is a bad one – even if it is a little far out. Ideas can lead to brainstorming new ideas, new ways of working or new campaigns”.

 

3. Franchising

“The Franchise Industry contributes £15 Billion to the UK economy – an increase of 46% over the past 10 years.”Franchise Supermarket

Franchising allows a third-party business to set up using the same branding, products, logos etc as the original business. It’s especially common in retail, leisure and hospitality.

Support is given to the third-party franchisee by the primary company, in return for a fee. This is normally a set percentage of turnover.

It’s essential that all products and services sold by the franchise are completely identical, with no change in quality or appearance. For example, a McDonalds Big Mac is exactly the same no matter which McDonalds restaurant in the country it came from.

Bear in mind however that franchising may not be the best way forward for an entrepreneur if their product only has short-term sales potential or is in a geographically restricted market. But if it does work, it’s a relatively straight-forward way to expand.

 

4. Getting their intellectual property licensed

Too many entrepreneurs have fallen foul of other people ripping off their idea and creating lookalikes. If these lookalikes are cheaply made or poor quality, the original brand will soon be damaged – possibly forever.

By licensing their intellectual property, an entrepreneur can sell the rights to its patented or copyrighted inventions to a specific, named license holder. Royalties (usually a small amount per sale) are then paid by the licensee in return.

Patents are great, but they only last for 20 years (maximum). So licensing intellectual property is often the best way forward, as receiving a small amount per sale is far preferable to no money coming in at all from the patent once 20 years have passed.

We recommend reading our recent piece Protecting your company’s intellectual property.

 

5. Benefitting from Patent Box tax relief

“In the tax year 2018 to 2019, 1,405 companies claimed relief under the Patent Box, and the total value of relief claimed was £1,129 million.” – Gov.uk

UK Patent Box relief is incredibly generous, so missing out is a really wasted opportunity.

Developed to encourage UK companies to innovate new products, as well as retain and commercialise existing patents, Patent Box tax relief was launched in April 2013. It means that any profits that result from an eligible patent will only be taxed at 10% – far below the current 19% Corporation Tax rate.

One particularly notable benefit to the relief is that profit made from products anywhere in the world will qualify. This is still the case even if only a very tiny part of the invention is actually patented.

No matter what course of action an entrepreneur takes, it’s likely to be a bumpy ride. Unfortunately, there are no ‘quick wins’ when it comes to innovative ideas making money.

But by planning your next move in detail you put yourself (and your business) in the best position for success.

Business

What Every Small Business Should Do

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The majority of the difficulties associated with establishing a business stem from failing to accomplish the small things correctly. The basics will lead you to the top, as any competent instructor has stated at some time.

If you’re thinking of starting a small business, make sure you follow these 10 small business rules:

1. You must keep track of your finances.

Lack of capital, is the leading cause of small business failure. You must undertake proper financial planning and fully comprehend the business levers that might affect your cash flow.

Do you purchase stock?

  • What amount of cash should you have on hand?
  • Do you have a system in place to collect money from clients?
  • How long do you have to wait for them to pay you?
  • Do you have any loans that you need to repay?
  • Do you rely on suppliers whose prices fluctuate according to market conditions?

 

2. You must create a data-driven culture.

The better your business decisions are, the more data you can track and utilize to make them. Business often necessitates certain “intuition feel” judgments, but it’s preferable to provide your instincts with as much knowledge as possible.
Tracking your company’s key performance indicators (KPIs) and understanding why they rise or fall may help you make decisions that will help you develop and stay on track.

 

3. You must participate in Lean Planning.

Rather of creating a long-written document that you utilize once and then file away, it’s critical to create a strategic and financial plan and track it on a frequent basis.

Planning is a continuous tool that should be used to understand the assumptions you have about your business and whether or not those assumptions are valid, or whether you need to make changes and adapt your assumptions.
60 percent of small companies in America fail due to a lack of cash, not a lack of profits—by utilizing Lean Planning, you can rapidly determine if you have made any financial assumptions that will have a negative impact on your cash. Maybe you assumed you’d get paid every 30 days on the dot.

By engaging in ongoing planning and then tracking the actual results of your business against your plans, you can quickly determine if you are getting paid every 45 days, and if so, you can increase your credit line quickly and appropriately, keeping your business cash healthy—before you get into trouble.

4. You must have a strategy in place for attracting and keeping top employees.

We are continuously on the lookout for top talent in our industry, therefore we make it a point to follow talent in our region on a regular basis and design outstanding retention programs and rewards.

Take some time to consider your company’s culture and what you want it to be, and make sure that culture is factored into your recruiting selections. We utilize LinkedIn on a daily basis to follow and acquire talent.

5. Every day, you must listen online.

Even if you just operate from 9 a.m. to 5 p.m. Monday through Friday, your business is “always on.” Every company should set up internet alerts to monitor what their customers are saying about them, their rivals, and the market in general.

Google Alerts is a fantastic (and free) tool for “listening” to what’s going on online. Be the first to know when a consumer leaves a negative review or when someone praises your company online. Use these methods to remain ahead of the conversation and capitalize on it. You need to get a business phone number too.

6. You must engage in marketing that generates a return on investment.

Small companies frequently tell us that they have no idea what marketing is. What should they spend their money on? Is it effective? Is it better to promote on the radio or on the internet? Should they believe the Groupon or Comcast salesperson who tries to persuade them to distribute discounts to the general public or buy local TV ads? What is it that works?

What does not work?

Small company operators should begin in venues that are both free and simple to access. Begin by forming relationships with local companies and company owners. Find out what it is that they do that is effective. Find out how visitors find your website and where they come from by using Google Analytics and your website.
Customers should be questioned about how they learned about you. And if you do decide to promote, make sure you know how to track it. Make a unique offer and keep track of it. Only provide one type of service or product. Repeat your successful marketing efforts after learning what works and what doesn’t. If you won’t be able to measure the results, don’t invest the money.

 

8. You must communicate with your clients.
Every company should communicate with its clients as frequently as feasible. If you own a retail store, talk to your customers at least once a week (if not every day). Discover what they enjoy—and what they despise.

If you own an online business, send a brief survey to your consumers or ask a few survey questions after they check out. Make a call to them. People enjoy talking and being asked for their viewpoint. Negative feedback might be difficult to hear, but it’s important to hear it and understand how you can improve your business for your consumers.

9. You need to know your competitors.

Both your direct and indirect rivals must be known and understood. You should always be aware of your rivals’ activities, including what they are doing, how they promote, and how they price their products.

You may be the only one of your kind in your town or sector, but that doesn’t mean you don’t have indirect competition. In my town, a small do-it-yourself tie-dye store has no direct competition.

They do, however, provide activity-based events and compete with all of the other businesses who host birthday parties and group activities. They also compete with other tie-dye merchants at Saturday Fairs and Markets. Even if they don’t have direct competition, they need to know how to position themselves against all of their indirect competitors.

10. You must have a larger goal in mind: a mission.

People like to work for companies that are more than simply a money-making machine. That isn’t to say that you can’t set sales or profit targets; it only means that if your employees believe they are part of a larger purpose, they will work harder and be more loyal.

 

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Business

5 Ways That Businesses Can Get the Most Out of Their Digital Marketing

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Everyone knows that the world of marketing has been changing for the last two or three decades. The days of traditional marketing through billboards, radio ads and television commercials are still around, but something new is taking the world by storm. Digital marketing is the way of the future and has proven to be more beneficial for businesses everywhere. It’s not that traditional, offline marketing is completely dead, but it is difficult for business owners to deny the power of digital marketing and what it can do for their businesses.

Because the world has changed so much, people have now moved online, so a business owner needs to learn how to market their products and services digitally. If they do not, there is a huge risk that they will not be around much longer. However, the problem is that most business owners do not understand digital marketing. To begin, most owners do not fully understand marketing altogether, and they go for hiring a marketing agency to do this for them. But now, when you add a digital aspect to this scenario, it makes it even more confusing to the owners. If a business owner starts with simply knowing what digital marketing can do for their business and how to get the most out of it, this is a great place to start.

 

  1. Utilize Email

If your business is not using email marketing yet, you should be. It is far from being dead, and many people are just beginning to tap into what it can actually do for their business. To make the most out of your digital marketing efforts, advertising your company through email is essential. It could very well be the foundation of your marketing online. Email is all about keeping the channel open to your customer who you might not have seen in a long time or being available to someone who is simply interested in what you have to offer. Send occasional, nurturing emails to your following and customers to keep the dream alive.

 

  1. Build a List

Next, you have to build a list. Many marketers and business owners will tell you that you must have a list in order to survive. Now, the list is nothing more than a collection of information from your customers that includes their names, numbers and email addresses. You need this valuable information so you can email them and get in touch with them when things are dry. To get the most out of digital marketing, you should always be gathering this information from them and storing it for future use. Gather this information by running online advertising to generate leads.

 

  1. Do More Videos

To be the absolute best at digital marketing, your business should be using more video. This is because research shows that consumers want to see videos above anything else online. They don’t want to see still images and text, but they want to see you rock it through the camera. The good news is that this isn’t hard to do with modern innovations. Use your smartphone to record simple videos of your business and use these clever videos as the creative part of your digital marketing to catch their eyes and stop them from scrolling. The other great thing is that you will feel more like a movie star for creating videos.

 

  1. Build a Following

Now, it’s also important to build your online following. These days, it’s all about how many people you have “following” you online. These people are your audience, which is one of your valuable assets online. Don’t think that these are just virtual people that offer you known value. They are actual people who follow your company because they might be interested in what you have. It’s important to always build your following online. Increase your page likes and your audience, and your products and services will practically sell themselves. YOu can run specific campaigns to increase your following.

 

  1. Learn How To Target

To get even more out of your digital marketing, learn how to target the right people. Remember, you are doing all of this online marketing in order to reach people in hopes that they will make a purchase with you. To do this, you have to put yourself in front of the right people, not just anyone. But be happy, because online marketing makes it easier to find your customers. Learn how to navigate with digital marketing to find your right audience, and this will also make you stronger as a whole in your company. You will know your customer’s pain points, what they need and what they’re saying.

If you put a bit more effort into your marketing effort by learning how to do it digitally, you can definitely increase your profit and get the most out of it. With the right strategies and a little education, you can make anything happen online.

 

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