FIRSTVOICE The magazine of the Federation of Small Businesses OF BUSINESS October / November 2014 | £2.95 | www.fsb.org.uk Mind Games: Protecting your most valuable assets In this issue: FSB we salute you Celebrations as the Federation marks a milestone Business wish list Conferences kick off FSB election campaigning making change happen FSB speaks with one big voice fsb news speaking out for business Get in touch: e f t [email protected] www.facebook.com/federationofsmallbusinesses @fsb_policy Manifesto 2015: Putting the business voice FSB mobilises to ensure small business issues are well to the fore in general election campaigning. T he FSB has fired the starting gun on its biggest ever campaign to shape the political debate ahead of next year’s General Election with the publication of its Business Manifesto. The 40-page document, which was unveiled at the three main party conferences in September and October, sets out the measures the next Government should take to help small businesses and drive economic growth. It highlights what the FSB believes is essential to: • deliver a sustained recovery • rebalance the economy • create high quality jobs and full employment • make all markets work better together • lower the cost of doing business. “These measures form an economic plan that will spark economic growth and job creation, led by our world-beating small businesses,” said National Policy Chairman Mike Cherry. “But it requires political leadership and focus on the pressing issues that small businesses face right now, and which will only intensify through the next five-year Parliament.” He added that many of the measures detailed in the manifesto would cost the Government nothing to implement. They are based on the FSB’s own consultation with its 200,000 members across the UK. Where there are costs, such 10 | FIRSTVOICE as investment in infrastructure, expenditure would be covered by the wider economic benefits. “In the FSB’s 40-year history, the importance of the selfemployed and small and micro businesses to the economy has never been greater,” said Mike. The manifesto underpins a concerted and broad-ranging campaign to reinforce the FSB’s influence in the run-up to next May’s election. “We will be providing a wealth of resource and guidance for Regions to engage at every level with candidates and political parties, to ensure political candidates back small business,” said Ben Baruch, Senior Public Affairs Advisor. “We’re mounting a huge collective effort. There will be events and hustings in every Region. We have launched an FSB election microsite and will be asking all candidates to share our #ibacksmallbusiness handle on social media.” What will give the election coverage added resonance is that the Small Business Bill is currently going through Parliament and should have received Royal Assent by the time Parliament dissolves. “Over the months leading up to the election, small business issues will figure widely in political discourse,” said Ben. “The FSB needs to speak with one voice across the UK to ensure candidates back small business as part of their own election campaigns.” Labour: We will work harder for small business Shadow Minister for Universities, Science and Skills, Liam Byrne says FSB lobbying has ensured small business is front and centre of public policy debate. www.fsb.org.uk Labour has floated plans to raise the minimum wage to £8 per hour by the end of the next Parliament. How would that affect your business? [email protected] “W e know how important small business is, not just to the economy, but the whole ethos of our country,” said Liam Byrne. “We need a Government that is going to work harder for small business.” The Shadow Minister was speaking in conversation with FSB Policy Chairman, Mike Cherry in the first of three FSB conference fringe events hosted by the New Statesman magazine. Similar meetings were also due to be held at the Conservative and LibDem conferences. Discussion ranged over many of the issues highlighted in the FSB’s election Manifesto, which sets out what small businesses need to drive the economy over the next Parliament. “With confidence being restored and small firms creating four out of five new jobs, we need to ensure the next Government looks into the medium to longer term and gives sustained, consistent support for business to grow,” said Mike. Small Business Administration Fielding questions from the magazine’s Economics Editor, Jon Bernstein, as well as the audience, Mr Byrne identified sales, skills and cashflow as the basics which affect the health of all businesses. He said Labour proposed policies under all those headings, adding that what was needed to bring it all together was a US-style small business administration. “We simply do not have a force fighting on behalf of small businesses in this country, able to bang heads together, clear rubbish out of the path and speed things up. Labour is determined to get one.” Late payment Questioned about Labour’s commitment to dealing with late payment, Mr Byrne said a Labour Government would look to shame big companies into fulfilling their responsibilities by demanding disclosure of late payments in company accounts. A more fundamental response is needed, Mike argued. “It needs enforcement by Government. Big companies who say they value their supply chain, and then extend payment terms, are not valuing, but abusing their supply chain.” Finance Finance remains an issue, but the recent launch of the Business Banking Insight www.fsb.org.uk A packed room follows the discussion at the Labour Conference fringe meeting. initiative (www.businessbankinginsight. co.uk ) would open new avenues for small businesses to understand and access better and alternative sources, said Mike. Mr Byrne suggested a regional system of banking modelled on the Sparkassen system, which could work as well for business in Britain as it does in Germany. Local Enterprise Partnerships A key theme of the FSB’s Manifesto is rebalancing the economy to drive growth across all regions of the UK. Mr Byrne agreed that LEPs need to work better, and devolving more responsibility for skills, transport, infrastructure investment and business support to a local level would help local economies. Performance by LEPs was patchy, Mike agreed. “LEPs must engage with small business to recognise their ability to contribute to the debate on economic priorities.” Infrastructure Two important points need to be stressed on the issue of investment in infrastructure, said Mike. The first is that procurement opportunities arising from HS2 are made accessible to small businesses. The second is that much needed investment in extra airport capacity in the south east must not be made at the expense of road, rail and air connectivity in other regions. He called for an early commitment to HS2. “It is a big infrastructure decision which has been on the back burner for too long, and it’s harming small businesses.” Mr Byrne said Labour was committed to HS2, which he described as a visionary plan: “It will unlock economic growth in ways we can’t yet imagine. Infrastructure in this country is creaking, and it is damaging our ability to export successfully.” Employment The FSB puts the creation of high quality jobs and full employment at the core of its Manifesto. “The skills gap is now mission critical for Britain,” said Mr Byrne. “It is holding back growth all over Britain.” He said two things were needed - local control over spending on skills, and radical reform of the system. “We need a revolution in technical education. We have set out reform which means people start vocational education at 14, do English and maths up to 18, with a high quality technical baccalaureate available as well as a radical increase in apprenticeships.” Mike agreed that vocational training needed to be valued as much as academia. “We must have a medium and longerterm vision to give young people the skills that small businesses need.” National Minimum Wage Referring to an early announcement by Labour to raise the minimum wage to £8 over the next term of Parliament, Mike said simply: “We need politicians of all parties to stay out of this, and leave it to the Low Pay Commission, which works incredibly well.” Mr Byrne argued that low pay meant a higher tax credit bill which is, in effect, subsidising mainly large employers. “When you’ve got workers under the cosh, you’ve got to take action. But alongside that you also have to make sure workers are as productive as possible, through smarter investment in skills.” FIRSTVOICE | 11 fsb news speaking out for business Help is there for exporters Get in touch: e f t [email protected] www.facebook.com/federationofsmallbusinesses @fsb_policy Victoria Eggs: Opening new markets in Europe and the Far East. Open to Export offers new hope to small businesses looking to expand into overseas markets. T he FSB has long called on Government to recognise that the needs of small firms are different to those of big businesses and to provide more tailored support. “There is a strong opportunity for export growth if Government assistance and information is made easier to access,” says Policy Chairman, Mike Cherry, who sits on the board of Open to Export. The community interest company was set up by UKTI in partnership with internet services provider hibu (UK) Ltd, in 2012 to help small firms grow their international business by offering free advice from Government and the private sector. The FSB was a founding partner. Open to Export has thousands of articles and guides provided by individuals and organisations with relevant expertise, covering every aspect of exporting. It also hosts regular webinars and special features enabling participants to connect directly with subject matter experts. “We have a forum where anyone can post a question on any topic, no matter how simple or specific, and expect helpful responses from the Open to Export community,” explained David Lowe, Director of Operations. Designer, Victoria Eggs (www.victoriaeggs.co.uk), has recently started selling her own range of British-made gifts, homeware and greetings cards in China, Taiwan and Hong Kong with the help she received through Open to Export, and is now looking to expand into Europe. “I learned much of what I now know about exporting from the website,” she said. “I read loads of articles, joined webinars and followed links to contacts like UKTI. “I now have a UKTI representative helping me research markets overseas, set up meetings at trade fairs and deal with all sorts of issues like exchange rates and shipping. “The webinars are brilliant. They’ve helped us find new ways to market, and improve our website to make it easier to buy in other currencies.” e Find out more If you are considering or already expanding overseas, register for free advice, webinars and contacts at opentoexport.com: • Get bespoke advice on your business questions from the experts • Contact experts, exporters and service providers direct • Receive regular newsletters with the pick of new contents • Find out first about forthcoming webinars and special features. FSB presses for smarter approach to roll-out Over the next five years, smart meters will be installed in every home and business across the UK, giving consumers more control over their energy use. But while domestic customers will have access to a full package of advice on using smart meters to cut their bills, there is no such programme planned for businesses. “The whole point of smart metering is to empower people to cut their energy consumption,” said Allen Creedy, Chairman of the FSB’s energy portfolio. “So far, the smart meter roll-out campaign has targeted domestic consumers, but for businesses, the 14 | FIRSTVOICE energy companies are under no obligation to do any more than install the meters. It’s a missed opportunity. The energy companies must go further, providing support and advice to small business customers on energy use. “Smart meters will help customers see how and where they are using energy, so they can take informed decisions to reduce consumption.” The FSB, working closely with Ofgem, is urging the Government not to overlook small businesses, which may have more complex energy needs than domestic consumers – hotels, for example – and will need more help to get the best out of smart metering. “We would like an assurance that support for small businesses will be included in the roll-out,” added Allen. “Otherwise smart metering may enable energy companies to produce accurate readings in real time (which is a good thing), but do little else to help small businesses.” • Have you had experience of smart meters or other energy efficiency measures? If so, please share your story with us (andrew. [email protected]). www.fsb.org.uk special report Intellectual Property How to stop your competitors picking your brains. Stefan Volak reports on how to protect your intangible assets. G raham Crocker says he felt sick the moment he found an almost exact copy of his invention the Quill Drinker - being sold at a trade fair. ‘ “Apart from a couple of minor details, it was identical. It was being produced and imported into the UK by a large foreign manufacturer and sold by one of our competitors,” says Graham, who runs Quill Productions, which produces game and poultry equipment. [See story opposite] Sadly, the experience of Quill Productions is not unfamiliar. Thousands of small businesses each year find their most valuable assets in the hands of competitors. “Business history is littered with instances of people doing very nicely out of someone else’s designs and ideas,” says John Moore, at Abbey Legal, the FSB’s legal services provider. Designs, inventions, branding, are all what accountants call intangible assets. And increasingly, it is these intangible assets that make the difference in the market place. So, how do small businesses protect themselves, particularly in the age of instant downloads? How can you make sure your competitors are not picking your brains? For nothing. “Intellectual property is valuable. It is what sets your business apart by offering something new and different to the market; provides a revenue stream and forms an essential part of your branding and marketing,” said Mr Moore. “If you’re a small business, it’s hugely important to take steps to prevent competitor companies using what you have created without your permission. Competitive advantage If your business hinges on the technology, processes or concepts you have developed, it is imperative you do everything within your power to protect that competitive advantage, by ensuring confidentiality agreements are watertight before you start talking to third parties; and registering ➜ Mind games 18 | FIRSTVOICE www.fsb.org.uk Fight your legal battle Quill Productions, Pulham, Dorset Isolated: Graham and Trish Crocker of Quill Productions “Would you ‘come to an arrangement’ with a thief to decide how to divide up the items he’s stolen from you?” www.fsb.org.uk For the past eight years, Graham and Trish Crocker have been locked in a David and Goliath legal fight with a company they allege simply ‘stole’ their idea. Graham’s invention is a device which dispenses drinking water hygienically to game birds and poultry. He designed it to prevent cross-contamination of disease, which was a serious problem affecting bird flocks at that time. Once they realised the potential of their unique product, the Crockers set up Quill Productions at their farm in Dorset. Sales took off and the business grew rapidly, but within a short time, the foreign-made drinker was being marketed in the UK. “We’d gone to enormous trouble and expense to do everything right,” said Trish. “We developed, tested and refined the design. And before we started marketing it, we patented it in the UK, France, Italy and America. Yet here was a product coming in from another country that was a direct copy of ours.” “It has been crucifying,” said Graham. “As a small company, and having paid so much for the patent you’d think that you’d have the support of the Government or the Patent Office, but we’ve been left so exposed. “The only advice we had from our local MP and a Government Minister was to ‘come to an arrangement’ with the company infringing our patent. “Would you come to an arrangement with a thief to decide how to divide up the items he’s stolen from you!? “In fact, we did have a meeting, and this company’s managing director as good as admitted to taking our design. But he said ‘We’re much bigger than you. If you challenge us, we will suffocate you’.” Injustice Despite the warning, Graham and Trish are challenging the company for patent infringement in the High Court. They feel a huge sense of injustice that the effort and expense invested in trying to protect their intellectual property seems to have achieved nothing. “The cost in lost sales and legal fees has been enormous,” said Graham. “And we will never get back the thousands of hours we’ve had to spend on the case. “Why have we paid those fees to the Patent Office? And why isn’t the Government prepared to do more to help the small companies it says it is so keen to support?” FIRSTVOICE | 19
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