Starting a business is a big decision, particularly in today's challenging economic climate. But for Nick Humphreys, founder of Portishead-based national online shopping portal givingabit, it was a case of now or never. "I didn't want to look back in 10 years and wonder what might have happened," he says. "Life is too short for regrets. There's never a 'right' time to start a business. It's all about drive and circumstances. My circumstances were right. The stars aligned!"
Nick was made redundant from his job as a senior marketing manager after the financial crisis hit. But he used his years of experience to create an opportunity from a setback. "I knew online activity was surging and only likely to rise," he says. "We were hearing a lot about the 'big society' and community. I was involved in the charity of the year selection in my former role and knew the UK's population and businesses are generous, and very passionate about charities. I also knew about affiliate marketing – when retailers pay commissions for directing traffic to their site – and I thought: 'how can we ensure people and businesses can support their chosen good cause just by shopping online and not cost them anything?' That was my lightbulb moment."
His idea was simple: givingabit allows anyone to raise money for good causes at no extra cost by shopping online at the website's retail partners, including John Lewis, Sainsbury's and PC World. After operating for a year, the site, supported by a team of five, now has more than 1,200 retailers and the past three months in particular have seen considerable growth.
But it took meticulous planning, discussion and research to turn a flash of inspiration into a viable business. Concerned that he would be made redundant because of the economic downturn, Nick spent all of his spare time for six months on givingabit's business plan.
He'd banked personally with Lloyds TSB for years, so Nick decided to try out its business services. The bank has supported nearly 320,000 startups since January 2010 and Nick took his givingabit business plan to Becky Crees, commercial relationship manager at the Clevedon branch, near Bristol. "Becky gave me very good feedback and encouragement, and that was an excellent motivator. She helped me focus the plan. Lloyds TSB Commercial understood my background. They also made me think about the bigger picture – for example, what happens to the business if I'm ill or incapacitated?"
Becky says: "When Nick first came to see me, he had this great idea of what he wanted to do. So I encouraged him to write a business plan and do his cashflow projection, and everything else he needed to do to make it work. Nick is very open to suggestions from the bank and other business owners. I always suggest people write a business plan, because it helps them to identify areas they hadn't even thought about. You've got this amazing idea – how can you make it happen? How are you going to promote it? How are you going to reach your customers? What do you need to do to make a profit? It's a working document and we encourage people to look at it regularly to see if they need to change direction. That's how a business plan can really help."
Nick says his business plan is at the core of everything givingabit does. But it's not set in stone and needs to be flexible enough to accommodate new technology, changing circumstances and feedback. He reviews it on a monthly basis. "I had the opportunity to build a business on the most modern foundations, using the most modern technology to keep costs down. These foundations give us the ability to be flexible and make those changes."
Low running costs
Determined to avoid the high running costs that can cripple a startup, Nick uses flexible working practices to keep overheads as low as possible. "I work from home. Why do I need an expensive office? At the moment, givingabit doesn't directly employ anyone. My team are all freelance or on contracts, and work remotely – our lead web developer is in Exeter, our programmer is in Spain, while our social media manager is in Bristol. I get to work with fantastic, like-minded people, and I'm not sure we'd be any more effective if we were in the same room.
"The site functions using cloud computing on a pay-as-you-go basis, rather than costing us several thousand a month on a server. As a startup, you need to watch every penny – but our low running costs have another advantage; we can afford to pass on more money to charity. I think that gives us a real edge."
Nick believes it's essential, when starting a business, to realise that you don't know everything. "I needed as much knowledge as possible before I took the plunge," he says. "I spoke to people who had started up businesses, people who work with the internet, accountants and lawyers, and looked at lots of business cases and thoroughly researched the marketplace. The tax office used to scare me, but pick up the phone to them and they are very helpful and understanding of the situation for startups. You have to take yourself out of your comfort zone and speak to people. Absorb as much as you can."
Becky agrees. "Starting a business can be lonely, so I encouraged Nick to network. I pointed him towards a mentoring project and encouraged him to get involved in the local Chamber of Commerce. It's not just about meeting other business owners – hearing key speakers can be very helpful and motivating."
With solid foundations in place, Nick says the future's bright for givingabit. "We want online shoppers to know that their purchase can help others at no cost to them, just by clicking through to the retailer from givingabit," he says. "We're looking at changing people's shopping habits. That may sound very ambitious. But you have to have ambition to keep you going."
Guidance for SMEs
Everyone's heard the often repeated wisdom that most new businesses fail in their first three years. But how do you maximise your chances of beating those odds? Start by talking to your bank, says Lloyds TSB Commercial relationship manager Becky Crees. "There's an idea that bank managers are scary, but we're really not," she says. "We're very approachable."
At Lloyds TSB, all new businesses can receive guidance from a local business manager or relationship manager, depending on their business needs. They are encouraged to download a free copy of Sage Planning for Business software from the Lloyds TSB website. This software guides the new business owner through vital elements of running a company, including forecasting cashflow, marketing and writing a business plan. "It enables people to focus," says Becky. "A lot of people come in with a business idea and are very good at what they do, but they don't understand the figures side or what they need in terms of banking."
It's vital to use all the available expertise you can. Lloyds TSB Commercial business events take place all around the country and are perfect for meeting people from the local business community. Mentoring can also benefit startups. More than 400 Lloyds TSB employees have signed up to a mentoring programme established by the Business Finance Taskforce. The initiative matches all types of businesses, at all lifecycle stages, to bank mentors, from senior management to sustainability and marketing, to give them a fresh perspective.
Market research is hugely important to a startup, but can be expensive. Again, Lloyds TSB Commercial can help. "Our business opportunity profiles are a wealth of information about specific industries and areas," says Becky. "We are happy to share them with clients."
Don't be afraid to take your idea to the bank. "We try to work closely with our customers and the business owners," says Becky. "We don't tell them what to do – we just encourage them, give them ideas and act as a sounding board. We're here to help and have so much to offer."
For more information on starting a business visit http://businesshelp.lloydstsbbusiness.com/news/startup.
This content is an advertorial produced by Guardian Professional to a brief agreed with Lloyds TSB, part of the Lloyds Banking Group.
Lloyds TSB Commercial is a trading name of Lloyds TSB Bank plc and Lloyds TSB Scotland plc and serves customers with an annual turnover of up to £15m.
Authorised and regulated by the Financial Services Authority.
The Lloyds Banking Group includes Bank of Scotland plc and a number of other companies using brands including Lloyds TSB, Halifax and Bank of Scotland, and their associated companies.
This content is brought to you by Guardian Professional. To receive more like this you can become a member of the Small Business Network here.
We'd love to hear your views and thoughts in the comments but please remember not to disclose personal identifiable details.
