Image is copyright of Buy Nothing Day UK

“Lock up your wallets and purses, cut up your credit cards and dump the love of your life – shopping. ”

“Saturday November 26th is Buy Nothing Day. It’s a day where you challenge yourself, your family and friends to switch off from shopping and tune into life.”

So says the blurb on the Buy Nothing Day website.  You can see where they are coming from.  Most of us would agree that there is more to life than shopping and so why not devote a day to the appreciation of a simpler, non-consumerist existence?

I’m all for devoting time to friends, family & fresh air, but the notion that it’s wrong to buy stuff is plain crass.  Especially now.  It oversimplifies a message to the point that it’s counter-productive. It hijacks an opportunity to say something useful and says something destructive instead.

How many thousands of struggling small businesses, the lifeblood of our economy and the green shoots of its recovery, rely on consumer purchases to sustain them and provide for the people that work in them? They need all the help they can get – many relying on the next few weeks of seasonal shopping to carry them through another year.

Examining the environmental and ethical impact of consumerism is a worthy agenda – but let’s keep it real.  Buy local – YES!  Buy quality – YES!  Buy from small businesses – YES!  Support ethical businesses – YES!  But please don’t think that buy buying NOTHING you will achieve ANYTHING very much at all.

There are plenty of online retailers out there, worrying whether they’ll still be here this time next year.

At this time of year, with the next few weeks due to deliver a significant proportion of annual turnover, the pressure is never greater to squeeze that extra pound out of your customers.  Merchants up and down the country are burning the midnight oil to fine tune the promotional plan in the hope that Christmas profits will sustain their business through another year.

But how many merchants find themselves accidentally training their customers to expect a juicy offer before they’ll place an order?  How many are struggling for ways to avoid having to settle for reduced-margin sales.  For many, it can feel like the dreaded discount death spiral.

Even at this late hour, there are dials you can tweak to avoid giving away your Christmas profits in the way of reduced margins.  Turning down the discounts dial is just one thing you can do.  There are dials you can turn up too – even now, when it really matters – dials that can result in more profits (more cash!) without increasing your planned order volumes.

I’m a bit of an evangelist for niche retailers adopting a discount-free marketing strategy.  And so is my colleague, Patrick Pitman, in Austin, TX.  He’s just put together a four week crash course that’ll give you creative, constructive guidance on what to do instead of pitching endless discount codes to your customers.

I recommend you check it out at Zero Percent Off!  The course consists of a series of 20 minute audio lessons with worksheets.  It’s priced at US$197 but you can actually pay what you like.  How’s that for an offer

Could I put a plea out to the relevant authorities to settle on a name for today?  So far, I’ve seen articles and offers heralding what’s likely to be the biggest online shopping day EVER with a confusing array of alternative ‘Monday’ labels:

• Mega Monday
• Manic Monday
• Cyber Monday
• Black Monday
• e-Shopping Monday
• e-Monday

Today has an identity crisis.

Perhaps the government quango that deals with such naming dilemmas has been recently disbanded (perhaps an Office of Naming Responsibility?).  Does anyone have a solution?

Don’t miss out on the biggest online shopping days of the year.

Christmas is a huge milestone in the calendar of a catalogue retailer.  After months of military-style planning, your promotional campaigns are in full swing and your well-oiled fulfilment operation purrs effortlessly as it shifts into a higher gear.  Not long to go now!

As you ride the festive wave and count down the days to the holiday, you’d be forgiven for looking forward to spending some time out of the office and forgetting about business for a few days.  But will your business keep on working for you over the Christmas shut-down, even if your staff are at home enjoying their mince pies?

The fact is, you can’t afford to neglect the busiest online shopping days in the entire year.  In 2009, like the year before, Boxing Day was the busiest day for online shopping.  The next day, the 27th, was the second busiest day.  Online sales on Christmas Eve and Christmas Day were up 36% on the previous year.  Although YOU might be ready for a break, your customer has different ideas!  They have gift money and vouchers to spend, and new gadgets to shop with.  And more than anything – they’re hungry for some bargains.

Last year, John Lewis began its online clearance at 6pm on Christmas Eve and reported an increase of 23 per cent in sales for the first three days of its online sale, compared to the same period last year.  On Christmas Day, their website took an order every ten seconds on average – the peak shopping hours being between 9pm and 10pm.

Have you planned to take advantage of this opportunity?  If you’re looking no further than the Christmas postage deadlines, there’s a good chance you’ll miss out.  Here’s a checklist of actions you should be thinking about now.

1. Have your site update ready to roll out on Christmas Eve.
Time to clear away the tinsel on the header, ditch the last posting dates, and re-organise your featured categories and products.  Your customers are ready to change gear, and it’s your job to make the site relevant to their changed requirements.

2. Set expectations for customer service.
Your customer service team is likely to be depleted or absent altogether over the holiday period.  Make sure your customers know when to expect their purchases, and when they can expect to get an answer to their queries.

3. Make sure all your gift voucher recipients can redeem their vouchers online
There’s nothing worse than having a gift voucher and not being able to spend it online.  It’s a bugbear of mine – and surprisingly common.  If your system can’t handle it, it’s time you did something about it.

4. Use your social media channels to build the hype.
Build a dialogue of engagement with your followers and use it to remind them about you during the holiday period.  Use scheduling functionality to maintain the dialogue, even when you’re at home enjoying your Christmas lunch.

5. Launch your sale.
There’s no better time to create some empty space on the shelves and turn those slow-moving lines into cash.  If you run just one clearance sale a year, make sure you launch it over the Christmas holiday rather than waiting until January.

6. Land an email in your customer’s inbox on Christmas Day.
Come on, you’d be mad not to.  Whether it’s Christmas Day or Boxing Day, let your customers know you are open for business!  If you don’t, someone else certainly will.

The Autumn 2010 Joules catalogue has been lying around in our house for over a week now.  It’s moved from the doormat to the kitchen to the coffee table to the catalogue pile. The trouble is, it’s still in its polywrap.  Unopened.

In my household, this is a bit of a mystery.  We’re mail order enthusiasts and all three women (daughters 16 & 19, and, erm, 40-ish other half) are hawk-eyed fashionistas.  So why has it failed to do it’s job of grabbing the reader’s attention and luring them inside?

My observed theory has two parts.  Firstly, it’s not obviously a Joules catalogue.  The clothes that the model is wearing, lovely though they may be, are not recognisably Joules.  We know the Joules signature stuff when we see it – and this isn’t it.  And as for the logo?  It’s so subtle that you’re pretty likely to miss it completely at a quick glance, given the other headlines and calls to action that feature prominently on the cover.  I think this is a missed opportunity.  Perhaps it’s a deliberate ‘trojan horse’ tactic to get the reader inside without knowing it’s Joules – in an effort to reach a wider audience.  Even so, I can’t help feeling that the value of brand recognition and customer loyalty is being ignored.

Secondly, there’s the matter of this word ‘catazine’.  Let’s face it, it’s not a word that’s bandied around much outside direct marketing circles.  It’s jargon – not common parlance.  I don’t understand the need to use it at all.  After all, when you visit Joules online you don’t see the word ‘website’ as a massive headline at the top of the homepage.  Customers are smart enough to know what they’re getting without being hit over the head with it.  Good content in a catalogue enriches the customer experience and helps reinforce brand positioning and differentiation.  I’m all for it.  But the catazine word is unnecessary – especially when it’s at the expense of branding.  In my household at least, it was clear turn-off.

Now – recent reports indicate that Joules is doing phenomenally well – so clearly they know what they are doing.  All I would say to them is this: you’ve got a strong brand and a good story to tell so don’t hide it – shout about it.

There’s no doubt that the web continues to evolve into an increasingly visual medium. Consumers like pictures, and they like video even more. So – as the technology continues to evolve at warp speed – maybe now’s the time for small business to sit up and pay attention?

Video has the power to showcase products and build brand awareness in a unique and compelling way. By engaging, educating and entertaining visitors, the niche retailer has the opportunity to connect with their customer in a way that cultivates loyalty and encourages ‘social dissemination’ of the brand. It’s no surprise to learn that video is the most ‘shared’ content type on the web.

“Isn’t that all a bit fluffy?” I hear the cynics cry. Well, maybe – but it’s only the start. Consider the importance that Google now attributes to video and you’ve got an altogether more measurable incentive to rethink your strategy.

Since the roll-out of the Google “Caffeine” upgrade earlier this year, the Search Engine Results Pages (SERPS) are increasingly dominated by real-time and video results – part of Google’s mission to deliver fresher, richer results. Video in particular, seems to get preferential treatment (unsurprising, given that Google owns YouTube). Not only do video results now capture some of the prime real estate in the list of organic results, but the new left nav column provides advanced search options on video results that reflect their enhanced status.

Video for ecommerce

As well as generating qualified traffic for your website (more on video SEO below), you can employ video effectively to increase conversion in the following ways:

1. Product demonstrations. The next best thing to seeing the product in “real life”, a video gives a visitor the opportunity to see its features in action, and provide some human scale. It’s an opportunity to assert your ‘authority’ as an expert and build consumer confidence.

2. Brand building. No matter how carefully you’ve crafted the copy on your About Us page to skillfully convey the uniqueness of your product or service, and your company values, relatively few people will read it. By providing supplemental video you can engage those unwilling to read the blurb, and do it in a way that makes it easy for them to share it with their friends.

3. Customer service. Whether it’s to provide answers to frequently asked questions, share customer testimonials, provide instructions, or simply put a human face to your operation – customer service video can help break down resistance and smooth the visitor’s path to purchase.

What makes a good video?

OK, so it all sounds quite good in principle and you’ve probably got some ideas on what to do. Here’s the conventional wisdom on what makes a good video for an ecommerce site:

1. Keep it short. The first 15 seconds are critical – so save your best for first. Three or four minutes is a good length as a rule, but note how Google enables you to search for videos of different length. No doubt there’s a trade-off opportunity in terms of competition and ranking.
2. Make it relevant. Treat your customers (and Google) with respect. Unless your video can educate, engage or entertain – you’re probably best thinking of a better idea.
3. Make it SEO smart. Like the rest of your content, you need to optimise it for organic search. I explain this in more detail below.
4. Shoot it in HD. It’s just a hunch, but I think HD will rank probably rank better than not. Google presents you with the option to filter out HD videos, and I think that’s a pretty good indication of its preference.

What makes a video good enough?

This is perhaps the biggest psychological barrier that small businesses face when considering video. Does my video need to be professionally produced, or is it something we can do inexpensively in-house? Do my customers expect slick production standards, or is ‘basic’ acceptable?

With a Flip camera or iPhone 4 you can quickly and easily capture decent HD video. All the software you need to add the bells and whistles is readily and cheaply available to download. If you do any of your own product photography, you probably already have most of what you need, and someone who understands how to do it. That’s one end of the scale.

Although no-one wants to damage their brand with unprofessional content, ask yourself what’s good enough for the purpose you’re seeking to fulfil. We live in the YouTube age where consumers accept clips with a wide variety of production standards – ranging from zero to Hollywood. With a steady camera, decent lighting, and a reasonable quality voiceover – you can, for example, produce a perfectly respectable product video. When you need something more professional, you may be pleasantly surprised with the cost that you can negotiate with a specialist.

The SEO factor

Optimising your video for SEO is really no different to optimising any of your other content. Here’s a checklist for making sure your video appears in Google’s blended search results:

1. Start with your keywords. Before you even start making your video, choose two or three keywords maximum on which to base your content. Make sure you use these keywords in the video title, tags, description and any back-links you create to the video.
2. Lead with the product. If it’s a product video, make sure the first few frames feature a shot of your product, as YouTube will use this as a static image for your video.
3. Post on YouTube. Google owns YouTube, so you can bet that it’s well indexed. Create your own YouTube channel and include links back to your site in the description for each video (use a URL shortener). Organise your content, customise your channel, work your tags, and manage your comments in a pro-active way.
4. Add a transcript and subtitles. It’s definitely worth getting to grips with the new closed caption feature in YouTube, given that subtitles and transcripts are translated into other languages – and indexed in all of them.
5. Create inbound links to your video. As with other content, it’ll rank better when other sites are linking to it – especially if those links include the relevant keywords. Start by linking from your blog, your Facebook page and your Twitter feed. Book-marking your video with social book-marking sites like Digg, Stumble and Delicious will help others find your video and create their own links to it.
6. Participate and promote. Engage the YouTube community by using the Like, Comment, and Favourite features on other people’s videos. Promote your own videos across your other channels, even your catalogue, your delivery notes, your customer service emails.
7. Analyse. Start with YouTube’s built-in Insight reports – especially the “Discovery” data that tells you how viewers found your video. Then use Google analytics to generate more sophisticated reporting on the performance of your YouTube channel, and the conversion rate of the visitors it sends to your ecommerce site.

Ready to have a go?

An increase in qualified traffic and conversion rates is a powerful incentive – so how do you get started?

Perhaps you already have a social media champion or other marketing staffer who can drive a test project forward. Why not take advantage of a forthcoming photo shoot, a trip to a supplier, or a gathering of customers? The team members in a small business invariably have a rich resource of material and ideas between them. Your suppliers may even already have video content that could be repurposed.

So why not take your top ten keywords from your latest keyword research and brainstorm video ideas based on those words alone. Choose one, make it happen, and start measuring. As they say in the movies, the rest will be history.

Case study: Teaching a close shave drives qualified traffic

Robert Johnston, owner of my local barbershop and shaving emporium The Gentleman’s Shop, decided to make a short video called “How to get a great shave every morning”. It’s six minutes long and cost £1,000 (and a free shaving set) to have it professionally produced.

Since posting it in September last year, it’s been viewed over 26,000 times. Over 75% of those views are from people who found the video through the YouTube – in other words, people who’ve probably never heard of the Gentleman’s Shop. That’s a lot of qualified traffic – qualified by the store’s most important keywords – that is getting delivered to the site. And the video will continue to deliver traffic for weeks, months, and quite probably years to come as people continue to discover, discuss and share it.

Article licensed for publication with Creative Commons “Attribution” terms.

First published in Catalogue & e-Business Magazine, September 2010

Do your staff-related anxieties betray a lack of ‘readiness’?

Ask a small business owner what worries them most in relation to staff or employment issues and one answer crops up again and again: how would I cope with the sudden loss of a key employee?

Isn’t this a great metaphor for the ‘growing up’ of a small business?  Perhaps the “key employee” concern is actually a symptom of deeper, underlying anxieties that owners experience as they nurture their business from infancy to maturity.  It begs the question: what does it actually take for your business to become bigger than any single person within it?

Indeed, there’s plenty to worry the owner/employer in a small, growing business.  From recruiting and retaining the right staff to staying on the right side of an ever growing number of legal requirements, accommodating progressive working practices in a small team, dealing with discipline, and facing up to tough decisions when tough decisions need to be made.  If you’re like me, you didn’t go into business to handle all this stuff.  Some of us are simply not equipped with the necessary diligence, patience and communication skills.  It took me a few years to realise that the most useful person in my business was the person who managed all these things for  me – but I never looked back.

Whether you’re a startup or an established niche brand, it’s likely you’ve built your own team – like all the best sports teams – around a backbone of key players with appropriate complementary skills.  Often they’ll be your co-founders, or your first “proper” employees – the ones you hired to bring-in the experience and expertise your business needed to maintain that forward momentum. Not surprisingly then, the loss of a key employee – part of the “backbone” of your team – can feel like having your legs kicked out from beneath you.

But hang on – surely “no one is indispensable”?

This slightly odious and over-used cliché perhaps ought to be reserved for use by football managers, politicians, and blood-thirsty sales managers.  Unpleasant as it is (one to avoid in the exit interview), I think it’s actually a useful litmus test for how “ready” your business is to cope with an unexpected disruption.  On one end of the scale, you’re utterly dependent on your key employee and it’s a case of “help, how will we manage?”.  At the other end of the scale, the business has moved on to a different place.  You’ll be sorry to see your valued colleague go, but it will be a hiccough rather than a disaster.  You can and will survive without her.

Let’s pursue this line of thinking further, examining the three stages of dependence on key employees, then identifying the traits of a small business that has matured sufficiently to efficiently handle the loss of a key employee.

Stage 1: RELIANCE

This is where it hurts most.  You’re working in an environment of perpetual change as the business evolves on an almost daily basis.  Decisions are taken on the hoof.  Your “backbone” team may be just one or two others, supplemented with some support staff.  There’s scant opportunity for documenting organisational processes or job specifications – there’s just no point as they’ll be out of date in no time.

Some businesses settle into this stage of development and are successful despite it.  For others, the nature of being a niche multi-channel retailer dictates that processes must be formalised if scalability is to be achieved.  If one of your key staff ends up on parental leave, emigrates to Canada, or falls long-term ill – you’ve got a serious challenge.  Whether on a personal level the circumstances elicit grief, commiseration, or congratulations – on a professional level you’ll be wishing your business was better prepared to ameliorate the significant and sudden impact of such an unforeseen departure.

Stage 2: VULNERABILITY

Your “backbone” of key players has strengthened and your team of support staff has grown – but you’re not out of the woods yet.  You’ve implemented company-wide systems and processes that are accessible and understood by all.  These include procedural manuals, up-to-date filing systems (both electronic and paper), properly administered software usernames and passwords, job descriptions, responsibilities and management authorities – all up-to-date and well documented.

Although no less likely to lose an employee, you’re already better placed to cope with the consequences – at least in terms of training a replacement should you be lucky enough to find one quickly.  And here lies the heart of your vulnerability: finding the right person can be nigh on impossible if you’re located ‘out of town’ (as many of us are), don’t have a big budget to splurge on a headhunter, and haven’t groomed an appropriate deputy from within your ranks.  Few small businesses are so risk averse that they invest in key person insurance.  It’s expensive (until you need it) – and doesn’t do anything to recruit new customers or increase order values.  However, depending on the policy wording and the circumstances, it could cover your recruitment costs as well as some hired help from a consultant or interim manager, giving you a little more time to reorganise internally.  It’s worth remembering too that consultants often have their ear to the ground and are sometimes able to recommend candidates who may not even be looking for a new job.

Stage 3:  MATURITY

Sensible enough not to rely on chance, by now you’ll have take steps to ensure that your business is underpinned by robust general health and sound organisational practice, coupled with a specific plan for replacing key personnel.  Your team may not be any bigger than it was at stage 2, but the momentum of your business will be more consistent, your growth will be more manageable, and you’ll be ready to handle the unexpected in ways that you previously never imagined.

A great example of this would be the rehearsal of certain situations – and we’re not talking about the fire drill (although that’s useful too).  Such rehearsals are particularly important if you’re likely to recruit a replacement from within your business, or merely re-organise responsibilities in order to best match the potential of your existing team.  Build a culture of shared responsibilities within teams by rotating duties, shadowing managers, and using holidays as an opportunity for support staff to practice an increased level of responsibility.  By encouraging a culture of nurturing and mentoring, junior staff members will enjoy a head start should they be required to step up and take on additional responsibilities.

Another example of ‘readiness’ is the business owner who has worked at developing and maintaining their professional network, paying particular attention to individuals they imagine could slot nicely into the business.  If you can name your reserve “backbone” of key staff, even it’s just a mental wish list, you’re more than one step ahead of the game.

There’s no magic vaccine that will immunise your business against the disruption of key employee loss.  It may not happen to you, or if it does, you might be lucky and find a queue of fantastic replacements forming miraculously outside your door.   If the queue doesn’t materialise, the greater the ‘state of readiness’ in your business, the more chance you have of mitigating any adverse impact and unnecessary delays.  Who knows, you might be smart enough to turn this number one challenge into an unexptected opportunity to propel your business forward to the next level.

So here’s a parting thought for you, and one that depends on your personal aspirations for the business:

At what point do you throw yourself into the equation? What if that key employee is you? Wouldn’t it be a testimony to your success if the business could dust itself down and move forward without you?

Article licensed for publication with Creative Commons “Attribution” terms.

First published in Catalogue & e-Business Magazine, April 2010

The theory goes that direct commerce is a cash-generative business. Our customers generally pay up front, and we in turn negotiate credit terms with our suppliers. So why is cash flow and funding so often cited by niche merchants as the factor that most inhibits their growth?

No prizes for providing the answers. Most businesses start life underfunded. Things very often take longer than anticipated. Not
everything works to plan (some mistakes being more costly than others).  We need more and better people. Ultimately, having tasted some success, we become impatient for growth and need to invest so that the momentum can be maintained.

For these reasons and others, it’s not unusual for direct commerce businesses to need an injection of cash. Take care! Raising finance for your business should not be undertaken lightly. At best, securing funding is a time-consuming diversion from the core business. At worst, it can be a stressful, expensive, and often needless denouement for a promising brand. You could end up diluting your ownership and increasing your personal liability.

If you’re investing in premises or equipment, consider the leasing options. If you’re facing a short-term cash-flow blip, think creatively and work through the usual list of cash-saving and cash-generating measures. If you’re certain an injection of finance is what the business needs, steel yourself for the task ahead, and don’t delay with getting started.

Preparation

The financing paradigm works like this: The more desperate you are to raise cash, the harder it is and the longer it will take. Don’t leave it too late, or you’re at risk of gravely compromising your negotiating position and reducing your options. Figure out your strategy and have a plan in place before you need it. You’ll be grateful later on.

Often businesses struggle to raise funds in times of distress purely because they’re so busy fire-fighting the symptoms of their funding problems that they can’t spare the time to start planning their way out. Never has it been more important to have a firm grip. If you’re on top of your business planning, can point to a recent set of key performance indicators, and are up to date with your financial reporting, you’re more than halfway there.

Develop a good pitch—two sides of A4 or approxima tely 10 slides. Avoid too much detail, but don’t leave out the key information (how much money you need, why you need it, and what you’ll give in return). Don’t write it as a speech; make it an outline that you can talk around and expand on.

Separately, have ready a good written business plan including your financials. You’ll need a standard nondisclosure agreement if you’re going to be sharing it with someone with whom you don’t already have a confidentiality understanding.  Think of potential investors as customers: They’ll certainly exhibit similar behavioural traits as part of their decision-making, and you need to accommodate them all. In the same way that your prospects make an instant decision on whether to engage further with your brand based on the look and feel of your catalogue or website, potential investors will quickly form an initial decision based on what they think of you as much as your business.  You can’t beat having the facts and figures at your fingertips to support
any questions you may have to respond to, but at the end of the day, it’s the sizzle that sells the steak in your business. You’ll need to demonstrate passion, belief, and management capabilities as well as a firm grasp of details.

Your options

The amount of funding you’re seeking will, to a certain degree, dictate the most appropriate source. For smaller amounts (perhaps up to £50,000), your bank will probably be your first port of call. An extended overdraft facility secured against the assets of the business is likely to be your best outcome. In today’s climate, however, the bank is likely to take the opportunity to secure any liability with a personal guarantee or a charge over your house—not something to rush in to without proper consideration. Many entrepreneurs are willing to go there, but all breathe a huge sigh of relief when they are finally released from such a guarantee.

The government’s Enterprise Finance Guarantee is designed to encourage banks to provide small and midsize businesses with funding of up to £1 million. The anecdotal evidence is that lenders will still seek personal guarantees (although they are not permitted to take a charge over a principal private residence) and are fairly picky when it comes to businesses with few assets on their balance sheet other than stock. Talk to your bank or consult the Business Link website for a list of participating lenders.

Most venture capital companies are uninterested in making investments of less than £1 million and anyway usually require a level of professional due diligence and legal work that would knock it into touch as an option for most smaller businesses.

Friends and family can fill a gap at the lower end of the spectrum with either a loan or an equity investment. Mixing personal affairs with business can sometimes be difficult, particularly if a dispassionate outlook is required. Each party needs to know what he’s letting himself in for, and some expense on an appropriate agreement is certainly worthwhile.

An angel at the table

Finally, and usually most appealing for small businesses, are independent investors, more commonly known as business angels. Such individuals can make ideal partners. To start, a quick deal is often possible, minimising the disruption to your business. They will usually have solid general business acumen and broad experience, providing you with a useful and interested sounding board. Occasionally, if you’re lucky, they will have direct relevant expertise of your product or your business model and will be enthusiastic about contributing some of their time at a strategic level on a regular basis—something that can be incredibly valuable to your business. As a stakeholder in your business, an angel will be highly motivated to safeguard his investment and deliver a significant return. This can often mean that he will assist you with securing additional funding further down the road.

To improve the odds of partnering with the right angel, you need to do some homework. How do you define the ideal investor? Do you want a back-seat investor or an active one? Is his network important to you?  Are there particular areas where your angel investor could usefully focus? Are you ready and willing to listen and learn from the investor? When you meet potential angels, take the opportunity to interview them and to make sure they really do understand the dynamics of your business model.

Angel investors do not usually want control of your business, but they’ll expect a significant equity stake, usually between 20 percent and 40 percent, to provide them with the upside they are looking for.  They tend to be highly motivated to participate to some degree. They won’t want to run your business (that’s your job), but they will expect certain management controls to be put in place. It’s definitely worth dealing with these principles early on, to avoid surprises or misunderstandings later. Make sure that they are incorporated into your shareholder agreement.

Many entrepreneurs baulk at the prospect of angel financing because of the implications for their own shareholding. If your balance sheet is weak, it can be hard to justify a bullish valuation of your business, even though you believe in its potential. The outcome can be an unpalatable offer in terms of the equity you need to hand over for the investor’s cash. This is a good time to start thinking creatively.  Some equity will strengthen your balance sheet, but so long as your investor feels he is being offered enough of an upside, consider a hybrid deal that includes some loan stock. Very often the prospect of extracting a proportion of his investment at an early stage is an attractive way of reducing his risk. It leaves more equity for the business owner, some of which could be offered as options to incentivise key staff.

Raising finance can be a tough exercise, and you’ll need to wear your thick skin. But finding the right sort of partner can be a tremendously revitalising experience for you and your business. Many of the most successful brands in the sector today have been through the process several times. It’s part of running a business, and the ambitious entrepreneur will treat it as an opportunity rather than a chore.

Red flags to an angel investor

Seven signals to avoid when pitching to a potential investor:

• The creditor black hole. Don’t imply that you’re raising funds to pay
  off creditors—focus instead on how the cash will add value or unlock
  potential.
• Silly salaries. Never mind what you think you’re
  worth; investors want to see you sharing the pain, investing some
  sweat. None will begrudge you an attractive bonus linked to
  performance, however.
• Wobbly morale. Your team can easily and
  unwittingly betray any cracks in morale. Work hard to unify your staff
  and bolster morale before introducing 
an investor.
• A flawless business. Your proposition becomes less plausible if it fails
  to acknowledge any weaknesses. After all, a canny investor will treat
  them as opportunities.
• Unrealistic valuation. Of course you want to hang on to equity, but don’t let that drive an overoptimistic valuation of your (cash-strapped) business.
• Risk blindness.Risk-free businesses are fantasies. Make sure you demonstrate awareness of the risks your company faces with some basic sensitivity analysis.
• Arrogance.You may think you know everything there is to know about
  your business, but afford potential investors some credit. There may be
  plenty you can learn from them, even if you don’t make a deal.

Resources for finding potential angels

• Angel Investment Network
• Angels Den
• British Business Angel Network
• Business Link
• Cmypitch

Article licensed for publication with Creative Commons “Attribution” terms.

First published in Catalogue & e-Business Magazine, January 2010

Art by Bubbo-Tubbo

Many niche multi-channel retailers don’t have an organisation big enough to support the in-house marketing expertise they need to grow their business at the pace they’d like. Often, the owner/manager will be working with limited resources, trying to navigate through an array of online tip-sheets and free advice to discover a strategy that’s effective, economical and sustainable.  I know, because that was me.

I’d make the annual pilgrimage to events like ECMOD and listen in awe to the quality of expertise on offer, wishing I could afford to bring my whole team, or even better, bring the experts into my own business and ‘internalise’ the learning.

So you can imagine how excited I was to get involved, through Gramar Investments, with the development and launch of an innovative online training program for ecommerce merchants.  The course mixes advice from many of the real-life experts I might encounter at ECMOD or equivalent events in the US, with the fictional story of a young, glamorous entrepreneur and her blossoming online cosmetics business.

The story is told through the eyes of Frank, a private investigator working for an undisclosed jealous rival.  His files, consisting of audio, email correspondence and notes, make up the course materials that are used to reinforce the key learning points of the program in a compelling, memorable and fun way.

Delivered online and on-demand, Frankly eCommerce enables your whole team to participate by working through the course materials collaboratively: tagging, sharing and commenting on lessons in a way that works best for your company.

The course is released to limited number of users in March 2010 however we’re currently inviting e-commerce retailers to sign up for free beta access in February, qualifying them for priority access when the full course is released.  Please register your interest for the free trial at www.franklyecommerce.com.

Follow Frankly eCommerce on Twitter

Between Tesco and Amazon, I could buy everything I need this Christmas.  I’d be confident about having huge choice, paying reasonable prices, and getting decent service.  It sounds like a no-brainer – so why would I rather sell my soul to the devil than make my holiday shopping so simple?

The answer is that I’m passionate about independent retailers.  Whether that’s local bricks and mortar or niche online specialists, I believe they’re the grass roots of our retail economy and the lifeblood of many local communities.

It’s easy to see this in our high streets and town centres.  Independent retailers are part of our national fabric, making each town distinct from the next, supporting the local economy, and absorbing the money we spend into the local community rather than syphoning it off to institutional shareholders.

And when you think about it, it’s no different online.  Specialist independent online retailers don’t inhabit cyberspace – they’re based in local communities too; providing employment, spending money, supporting local causes.  In fact, for many small communities that were previously ‘geographically challenged’ for retailing, the internet has provided a new lease of life for the local economy.

Good independent retailers – whether online, on the high street, or both – very often offer surprisingly competitive prices, excellent service, and plenty of choice.  What makes them different is the selection they make on your behalf of what to sell, the guidance of personal recommendation, the feeling that you’re really valued as a customer, and the knowledge that you’re supporting the sort of independent business that you’d never want to disappear.  For me, that’s a no-brainer.

Happy shopping!

Picture by LoopZilla