In changing times, small businesses need help and advice they can trust. The business community has long taken advantage of information and education media ranging from textbooks to cassettes, but lately demand has been mounting for more resources to be made available in the online arena.

According to a new survey, a quarter of small business owners said that while they were enthusiastic about the beneficial role TV programmes like Dragon’s Den and The Apprentice play in educating and encouraging would-be entrepreneurs. They felt programmes like these helped to dumb down the public’s perception of real business and that these programmes didn’t help viewers deal with real business situations.

Now you can log on right here for a live business programme on real business. Presenter Sean Walsh will be interviewing Managing Director of the British Chambers of Commerce, John Dunsmure. Also joining Sean and John on the sofa will be a financial expert to tackle any questions you may have about working your way through the current financial climate. We will also have news of the Annual Chamber Awards, and a roundup of all the latest small business news from the BCC.

Please use the form to send in any questions you may have to our studio and we will do our best to answer them live during the show.

H: Host, Sean Walsh
J: John Dunsmure, Managing Director, British Chambers of Commerce
N: Nigel Shanahan, Managing Director, Rapide Communications
S: Sara Beirne

H: Well hello and welcome to this, the first in a brand new series of small business advice shows, brought to you by the British Chambers of Commerce and Dell in collaboration with Intel. I’m Sean Walsh and over the course of the next two months or so, we’re going to be looking at some of the big issues facing small businesses and let’s be honest, there are some major challenges ahead for all of us. Well against a background of global economic shocks, the G7 economies are forecast to contract in 2009 for the first time in some 27 years. It’s clear that the UK, like many advanced economies now has moved into the big R – recession. Well the first thing today we’re going to be looking at, I’d like to introduce my two guests, John Dunsmure is the Managing Director of the British Chambers of Commerce, John, thanks very much indeed

J: You’re welcome

H: For joining us. And Nigel Shanahan, the Managing Director of Rapide Communications. Thank you very much indeed for joining us

N: Nice to meet you

H: And you’re just fresh in from an award ceremony as well, and we’ll be talking about that a little bit later on. But first of all I would like to start by talking about the big issue of this week, the big financial issue, and Alistair Darling, the Chancellor, his pre-budget comments. Now let me start with you John – has he got it right?

J: He hasn’t done enough quite frankly. I mean the VAT issue is one that is a classic. I mean it’s so small that it’s not going to make any difference. We’ve been advocating for things like a holiday, you know sort of on VAT, NI contributions and so on, different things. There’s been a lot of money pumped into the financial industries, but there hasn’t been enough in our opinion for the small business community of which, you know this country depends on

H: Nigel, what’s your take on things? What was your immediate reaction when you heard the Chancellor’s statement?

N: I didn’t think much to it to be perfectly honest. I think John’s right, the VAT issue is not really going to help small businesses at all. In fact if it was intended to help consumer spending, you only have to walk down the high street and see major discounts of 50, 70% – 2 ½% on VAT is just not going to touch the sides. In fact for a lot of businesses I think it’s going to hinder them because they have to change lots of prices to try and accommodate

H: Indeed. Well let’s get down into that VAT issue in a moment. First of all I’d like to remind you that this is a live show today, so if you do have any comments or questions for John and Nigel, here in the studio, please type in the box, click send, and we’ll do our very best to tackle them. Now, Nigel touched on the issue of VAT – is VAT, the 2 ½% cut John, is that just fiddling at the edges?

J: It’s just tinkling if you like, from that point of view, and again if you think there’s going to be 2p on petrol coming up, and then another increase following on that, any sort of benefit there has been is going to be lost. And Nigel’s absolutely right, the burden on business, to do all of that change and all of that you know messing around if you like for 2 ½%, we already know if stores are offering 25, 30 and 50% discounts, what difference is 2 ½ going to make?

H: Indeed. We’ve just had a question in already I’m delighted to say, Charles Edward has sent us in one. He says “I sell products to the consumer via a website. Having to re-price all my goods because of this VAT reduction is not going to be an easy process. So I’m not going to alter my prices.” Interesting there. “And additionally the National Insurance contributions going up are going to hit me. What we need now is the Bank of England to cut rates further.” Let’s touch on the National Insurance contributions, again is that good news or bad news for small businesses?

J: I think again, it’s like everything, it’s been a – it’s a gesture and it’s a touch, but it’s not going to do enough by any stretch of the imagination. There’s going to be benefits that are going to be lost, and people are going to look at the people that they’ve been employing and so on, are they going to cut jobs, are they going to employ new people, all of that could be sort of another concern for business.

H: Indeed. Now Nigel, let me ask you. You’ve heard the comments of the Chancellor but in some respects there’s not an awful lot you can do about them is there?

N: No that’s right, I mean to a certain degree these macro, macro-economic things that are happening to me, I have to sort of take them on board, process them, think about my strategy and then really just get on with running a small business. A lot of these things don’t sort of touch the sides of a small business. I do relate to that gentleman’s comments though that if you’re running a small business, an online store, but equally a small business that’s a bricks and mortar business, you have to make major adjustments or think about major adjustments to your pricing strategy for such a small VAT reduction, just really is more hassle factor than anything else. I believe what the Chancellor could have done is done something with fuel. I think, you know as a consumer of fuel and as a small business owner, fuel is incredibly important, and when we see British Petroleum and the sort of profits they make on an hourly basis, I think a strike for the – for Britain would have been something around fuel and fuel reductions, and putting some pressure on the likes of BP

H: John, what do you think, would a cut in fuel duty really help?

J: I totally agree with what Nigel’s saying. I think we’ll see quite a few hauliers that will go out of business at the beginning of next year, you know some of the larger ones will be able to survive because of, just because of their scale, but some of the smaller businesses are just going to be totally and utterly devastated. And again that’s an on-cost that we all have to bear, and if you look at what is actually the taxation level, we’re at the highest taxation level on fuel in this country across the whole of Europe, and those kind of things can make a significant difference. The big problem is that sort of the Chancellor’s running out of money, and where’s he going to get it from, and that’s a trouble area that’s going to be brewing in the future

H: Ok well let’s pause it there for a moment. Before we look at some of the other big issues in more detail, let’s go over now to Sara Beirne for a round-up of the latest business news headlines. Sara

S: Here are the latest headlines. The BCC is calling for a further dramatic cut in interest rates in December. Alistair Darling is warning of the effects of National Insurance increases planned for 2011, and the fallen business investment is revealed as being smaller than expected. Firstly, revised ONS figures revealed GDP fell by 0.5% in the third quarter of 2008. David Cairn, the BCC’s chief economist says this supports his assessment that the UK economy is now in recession. And construction and distribution appear to be the main sectors driving the downturn. The revised figures have prompted the BCC to argue that even more aggressive monetary action is needed and the NPC should consider cutting interest rates in December by a full percentage point to 2%. The BCC’s director general David Frost has written to the Chancellor about the increases in the National Insurance contributions, announced in the pre-budget report. On the treasury’s own figures, the increases will cost employers £2.7 billion when the adjustment is made in 2011. In his letter, the director general points out that on top of the current difficulties businesses are experiencing, the rises will act as a barrier to the many employers seeking to grow their workforce. And finally, the quarter 3 fall in business investment has been smaller than expected, ONS figures revealed. Despite the downturn, there are still pockets of resilience within British businesses, however the BCC’s chief economist, David Cairn says these figures confirm the serious pressures facing UK businesses, and the vital importance of the government focusing on supporting business sectors, cashflow and employment

H: Thanks very much indeed Sara. Well some key points raised there – investment, interest rates and that kind of thing, but I just want to move onto one question we’ve just had in from a chap called Terry Carr – he writes “Britain’s infrastructure is in serious need of help. Our transport system being the main problem for me. How on earth can the country’s main goods import route from the port of Felixstowe and – “that must be the A14 – “be a pothole-ridden dual carriageway? Can the government not see that unless we invest for the long term, as a country we could be in trouble?” now clearly yes not the A14, maybe the A12, or maybe the join-up between the two there – that question’s really about government investment in the infrastructure. John, is there more that they should be doing about that long term?

J: I think they’ve been putting off this issue for years, and it’s not just about the current government, this has been something that has been stacking up on us for a long, long time. You just need to drive around in France, or in Italy or in Germany and then look at the UK and we’re absolutely swamped with vehicles that are trying to transport goods up and down the country. We’ve got a very weak rail infrastructure, but none of these things sadly are going to be able to be fixed quickly. It’s going to take some considerable time, and it’s going to take a lot of money

H: Indeed. I mean Nigel do you think it’s a twin track approach that’s needed by the government? Short term fixes now, but longer term look at the infrastructure and investment overall?

N: Yes possible. I mean there’s some very short term things, some of the – for example rail operators can do right away. I travelled down today on Virgin trains, cram packed in the standard accommodation, hardly anybody in first class. Can’t really understand as a business or at an infrastructure level how you – how that makes any sense. There should be some in between, but there were about 6 carriages that were empty, and the rest of the carriages were absolutely totally full with people standing up. Things like that make no sense to me whatsoever. I know they’re not just government – they’re not government issues, but there’s something wrong with £120 fare as well that’s for sure

J: Yes I’ve experienced that with the same thing, and they tell you look we can’t put you in first class because, you know sort of the people in first class would complain

N: Yes

J: you know and they haven’t got the rolling stock to be able to put people in it, so as you say we have to be treated like cattle

N: Yes

H: Now looking more focused maybe at business investment John, it’s not as low as we thought it might have been. Is that an encouraging sign do you think?

J: Yes and I don’t think it’s that big a surprise, I think businesses are still investing. I think regretfully we’ve had a lot of hype in the papers about – it’s the end of the world, Armageddon is just around about the corner. Businesses are still having to run, they have to look carefully what it is that they’re doing, and they’re still investing, and I think that’s saying something, that’s exactly what they should be doing. Looking at where they can maybe take out costs in another area, but invest in those areas that are going to pay dividends for you in the short term

H: Indeed. I mean interesting that you would pick up that thought of perception and image and view, because we’ve got a question in here from a chap called Jim Reese – Jim writes in “why is the television so full of negative stories? Surely there’s more room for more inspirational stories of both normal people and businesses in this country doing amazing things?” What do you think Nigel –

N: Yes –

H: We have talked ourselves down a little bit, haven’t we recently?

N: Yes things are tight, that’s for sure, but it can be a self-fulfilling prophecy if we don’t watch out, this – you wake up in the morning and switch the television on and it’s disaster after disaster, financial disaster, then world disaster, and it can actually change your perception of the whole world. There are some amazing opportunities out there, there still are, and often times in this sort of, entering a depression, I think small businesses have a major opportunity. It’s all about innovation. Large organisations tend to stop innovating. They go back to a – their old traditional ways. The small businesses can take opportunities from this lack of innovation in the big organisations and that’s what we’ve found

H: Now clearly there’s an issue here with some companies are reigning back on their expenditure now, a bit of a bunker mentality, but classically this is a perfect time, or the right time in some respects John, isn’t it, to actually be investing, investing in your people, investing in marketing, investing in getting that great story out there?

J: Yes one tip we would always say to businesses, in any sort of situation like this, is really invest in your sales and marketing, and that support. Customer service has got to be second to none, and really focus on those issues that are prime in your business, and taking you know sort of the caller’s earlier point on some of those issues that are there, we have to try and get some kind of stability so that we’re thinking, just as Nigel said, talking ourselves into an even deeper situation. There’s lots of good businesses, there’s excellent case studies, Nigel’s business is an excellent case study

H: Well that’s a very interesting point because Nigel you’ve just won an innovation technology award and how pleased are you with that and why did you win that do you think?

N: I’m absolutely delighted with it and delighted for the team at Rapide, and particularly the guys that worked on Rant and Rave, hard work’s gone into it and finally they’re recognition for their efforts. It was an amazing night last night

J: You missed all the celebrations

N: Yes, yes yes

H: No hangover then?

N: No hangover no, sadly, but hopefully we’ll get some recognition for our efforts

H: Indeed. Well we’ve been along to your company to have a look around and a little short report coming up on your screens now

Video Footage

“My name’s Nigel Shanahan, and I’m the Managing Director of Rapide Communications. We’re a business communication software provider. We started in business in the year 2000, and we help large companies get their message across to staff and customers in the fastest method they can, which is ostensibly using voice messaging and text messaging services from us. I think the biggest strength we have is the way we respond to large customers. They are pretty demanding and want something to happen very quickly, and we can do it for them really rather quickly, and we’re incredibly proud of the association we’ve got with Birmingham University, where we’re working on something called the Sentiment Engine, and the Sentiment Engine is really the heart of Rant and Rave service. Rant and Rave came about 3 years ago. I was at a service station, I’d been to the toilet, the toilets weren’t very clean. I’d gone and bought a cup of coffee, the coffee was incredibly expensive, I thought the whole layout was shoddy. And I just wondered to myself how do consumers in any service give their feedback, right at the point of service delivery? And I concluded that it wasn’t easy for consumers to have their say. So we subsequently created a service called Rant and Rave where consumers can have their say, and have organisations be able to see and head office, how their organisation is performing.

H: You’re back now live with us. Same tie again I see! Why do you think that you’ve won it? How important is innovation do you think, being able to help distinguish you in the marketplace?

N: Well I think innovation isn’t about inventing something that is brand new, sometimes innovation is just a change to something that already exists, but a better change, and in Rant and Rave it’s a change for the better on feedback, consumers giving their feedback but giving their feedback right at the point that they’re experiencing a service, whether it be in a restaurant, on a call centre, on a website. Getting those thoughts from a customer, right at the point they’re thinking those thoughts, rather than I’ll go away and I’ll write them a letter about that and give them the feedback, and that’s what innovation is about. Feedback has existed for years – surveys, mystery shopper, all those sorts of things, but this is an innovation that I believe is something that the market requires. The Rant and Rave service does something else special, it actually works out all those words and works out the sentiment automatically of them, and automatically scores it so that the organisations who get lots of feedback can actually work out the trends quickly

H: So if innovation is not about something new but taking something and improving that which you’ve got, John I’d like to bring you in here – things like cashflow, these are things that you need to be looking at now, maybe credit ratings for your customers, your payment terms – these are things that businesses need to be looking at now and tightening up on. Innovating in a – or doing the old things in a better and newer way

J: Absolutely, I think the regrettable situation that we’re facing just now means that you’re going to have to be smarter and work harder, you know sort of all those things about I can be complacent in different areas, it’s just not going to happen any more. You’re absolutely right, cash and cash is king, you’ve got to focus on that, you cannot afford to run out of money. Talk to your suppliers, talk to your customers about particular situations if it’s there. Look at where you might be able to reduce costs, that can be an inventory. i.e. you just stop ordering things in the normal way, can you look at trying to cut some of those things back. You just have to be more frugal in certain cases

H: Now we’ve just had a very interesting question in here from James in Richmond, James thanks very much indeed for joining in. He’s written here “generally it takes money to make money, but with lending tightening up and borrowers becoming more concerned about the amounts of debts they take on, are there types of small businesses that are better geared to grow literally from the bottom up? And are you seeing any trends towards smaller start-ups, even if it means those businesses may be slower to grow?” So is it a micro set-up rather than a macro set-up? John, what were your thoughts?

J: Interesting there’s been as many businesses started-up in the last period of time than there was in the preceding year, so we aren’t seeing anything you know sort of changing to that degree. Marginally lower but not enough really to make a difference, and we’ve still got more businesses in this country than ever before and I think that’s stimulating. Now they realise that there’s challenges, they realise that there’s difficulties, but there’s lots of help and support that can be there for them. We’ve a network of chambers up and down the country that can help. We work in partnership with organisations like Dell, with RBS, with various others. How do we try and help those businesses get that start, and that’s something that we do a lot of. I mean maybe people aren’t aware of it and we maybe don’t make enough of it, but there are ports of call that people can use

H: indeed. I mean it’s interesting, you touch on support and you know we’ve had all this money pumped into the banks. Are the banks now being supportive for small businesses that need some cash injection? Are they supporting them?

J: Well we work with RBS and they’ve been hammered just as much as any of the banks, and I’ll be honest with you, whoever you talk to there said we are still in business and we’re there to help and support business, it’s back to what we’ve talked about before, this hype, this media situation that’s out there about the banks aren’t doing this and people are doing something else, that is not our experience. There are some businesses that maybe be a – sorry – a more vulnerable situation than they were in the past, but that’s always going to be the case in life, the banks aren’t going to be there to bail out everybody, but those businesses that need the right kind of help and the right kind of support, we generally are finding that that is there

H: Well gentlemen we ‘re out of time, I have to leave it there, thank you very much indeed for joining us, and we didn’t even touch on currency rates, and pound against the dollar and the Euro. Maybe that’s something we can revisit later on

J: Sure

H: Well as we said that’s all we have time for on today’s program, we hope you’ve enjoyed it, and if you would like to know more about the issues facing fellow small businesses, then please do visit smallbusinessadvice.tv, the content there is being regularly updated so it’s well worth popping onto that site and having a look what’s available. And do try and join us for the next show, that’s on Thursday 4th December, again at 1 o’clock. I’ll give you that date again, Thursday 4th December at 1pm where we’ll be talking one on one with Michael Dell, the founder and CEO of Dell, the global IT company, the company that he himself started with an inspired idea and just a thousand dollars in his pocket. Well he’ll be sharing his experiences and challenges after some 24 years in business, as well as providing his expert advice for small business owners. Thank you very much indeed for watching, and I hope you can join us again soon. Goodbye