~business bulletin~ Economic insight


Sophie Murra, manager at small company stock market Sharemark, offers her view on the implications for SMEs if the UK were to enter another recession


finance to help them grow. When the coalition


I government came into power,


there was a lot of rhetoric about how they saw small businesses as one of the keys to growth in this country. A large, established business can still keep expanding but it doesn’t have the potential to double in size, whereas a smaller company can. That leads to new employment and money going back into the economy. I think that is the real fear – if we go into


another recession, it’s going to be even more difficult for companies to access funding through the banks. Then there is the fact that there would be


reduced consumer spending – a situation that could result in many businesses failing. We saw


What I’m reading now


More Balls Than Most, by Lara Morgan Patricia Harriss, business development director, DirectionGroup


book, More Balls Than Most. She was only 23 when she started her own business, Pacific Direct, specialising in


L 12 business xl


the manufacture and supply of hotel amenities. The book is a fast-paced and compelling


read, packed with Morgan’s personal experiences and learnings, from starting the company in 1991 to selling it for £20 million in 2008. Morgan was tireless in her pursuit of growth and success for ‘her first baby’, and the rigour she applied in all aspects of her business obviously paid off. The book is packed full of practical guidelines summarised at the end of each chapter as ‘Lara’s Laws’, which are relevant to running any business, either as an owner or a senior manager.


ara Morgan fizzes with energy, which comes across in her


Like all successful entrepreneurs, Morgan


has enough self-confidence to take note of her gut reactions to things, including her hiring process: ‘Employ people for the fit of their attitude – aptitude can be taught’. ‘People power’ is also a key theme of the book: ‘A team can build something amazing, an individual cannot.’ The book contains plenty of tips on


building staff morale, celebrating successes and encouraging people to help improve the business. It also mentions tackling issues such as underperforming employees. My key takeaway was a simple one; it’s all


about the sale. Sometimes, as business leaders, we get caught up in many issues involved in running the business. Morgan reminds us that it’s the sales that count and that businesses should be engineered around maximising opportunity creation. n


n the last recession, smaller companies had difficulty accessing


so many high-profile companies fail as a result of the last recession and the potential for that to happen again is a major concern. It could be much worse for smaller


companies who are trying to establish themselves. I think they would be left in a more vulnerable position because new businesses are the ones most dependent on bank loans to finance growth. Those companies could then find it


difficult to take the vital small steps forward that they previously managed to take. Unfortunately, if the UK were to fall into recession again, I can see a situation where they would end up taking rather large steps backwards instead. n


Rising star


Michelle Daniells launched children’s nutrition company Benjoy in 2008 and is expecting sales of £1 million for the next year of trading


How did you come up with the idea? We are a food company that develops 100 per cent natural and nutritious children’s snacks in the first anti-spill, ‘less-mess’ packaging of its kind anywhere in the world. I came up with the idea when I realised that lots of snack foods I was feeding my son weren’t nutritious at all. I also took issue with the large portion sizes and mess associated with existing snacks, so I decided to come up with something healthy in a sensible portion that wouldn’t spill.


How was it financed? I borrowed money from family, dipped into savings, remortgaged the house, and my mother remortgaged hers! I managed to get £200,000 together before we were ready to launch – then I had to find investment from angels. I did various pitches to angel groups, and a few people came out of that and were keen to come on board. At the end of it all, I still retain more than half of the business.


How was it marketed? Marketing was one of the biggest challenges; while the products are stocked in some supermarkets, including Waitrose and Morrisons, we don’t yet have mass distribution. We’ve done a lot of selective and targeted marketing and a lot of PR. We have had brilliant product reviews by “mummy bloggers” and our own social media campaigns have worked well. We’re fortunate to be in a market where word of mouth is very powerful, and our product is so interesting that if a mother sees the product being used then the word gets around quite organically.


What’s next? The immediate priority is to extend the distribution. It was part of our vision to make parents’ lives easier and so the products need to be available easily. We have a fabulous range of products on offer and numerous other products under development.


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