Will Britexit help SMEs?

With big business mainly aligned with the government, together with most political parties and trade unions, the campaign to remain in the EU  has plenty of funding and backing to win the upcoming UK referendum. But what about the SME's who are expected to provide the growth needed for more jobs?

Government statistics show that 99.9% in 2015 were SME's providing  60% of all private sector employment in the UK. So an important sector of the UK economy then - where do these businesses stand? This week I spoke at length to a businessman who runs a medium size business which provides major plant hire to the construction industry. He and his business partner were strongly in favour of leaving the EU even though he thought there could be an economic downturn for a while, but a Britain once again free of the burden of EU legislation would soon re-focus and within a few years be booming. His views of an independent Britain were generally optimistic, as with others of the older generation, who tend to view Europe as more of a 'basket case' than the blueprint for a better future.

The Government pro EU campaign claims 'over 3 million jobs are linked to exports to the EU.' This statement in the now infamous £9 million leaflet leaves the suggestion that if the UK leaves, 3 million people will lose their jobs. How this figure was reached who knows. It is a fear of job losses that may influence individual voters.

In summary much of the Government's economic and business case to remain in the EU is to offer a gloomy alternative. Against this the optimism of the business owners in the vital SME camp is coming from people who have succeeded in building successful businesses and see independence as a great opportunity. An opportunity and positive spirit that needs to be eloquently argued if the referendum is to be won by the 'leave' campaigners.

Is negative marketing a good idea?

When it seems difficult to find something positive to say about your product, is turning instead to making negative statements about your competitors offer going to get you more business?

As the UK Referendum campaign is now officially underway, it is the Government that has opened the offensive, last week with the £9 million leaflet and now with a Treasury report concluding that the UK is better off remaining a member of the EU or else we would all be a few thousand pound worse off. The thing is nobody actually knows. Those supporting the campaign to leave the EU claim the UK  would be £20 billion a year better off because instead of paying such sums into the EU, that money could be better spent on our people. Not so much of a forecast as saving the club fees.

The real issue for the stay in the EU group is that the product - the continued EU membership - is a bit  tired. It seems to be difficult to identify the product benefits. In fact the Prime Minister himself talked about the need for reform and claims rather disingenuously to have recently achieved major reforms. The proposition for the stay in campaign is we will all be better off, it is good for business and jobs and we can block immigrants now. But the backing to this vague message is that if we leave, we will lose jobs, our security would be undermined and everyone would have to shoulder the burden. The promoters are those with most to lose - politicians, big business, trade unions most of the political parties and some prominent people. Many were not born before the UK joined up so will have little direct comparison of life before and since.

The leave campaign's central proposition is more difficult to pin down and the case is barely being made other than to refute the frightening doomsday warnings of big time damage to the UK economy labelled as 'project fear'. Older voters will reflect that the post  Second World War generation were the first to voluntarily choose to travel to Europe on holiday, in serious numbers. Previous generations had certainly visited but in the colours of a British Expeditionary force. The great peace-time 'pay off' was not due to the then infant EU, but to the fact  German plans for controlling Europe had been defeated. For the Brits a European vacation pre- Euro was cheap and offered the opportunity for a decent amount of duty free fags and booze to be carted back home as a bonus and all for a British Visitors Passport you could buy for 7 shillings and sixpence at the Post Office! All pleasures now lost by being EU members. Along with the fun of messing around with foreign coinage. Along the way the old Imperial system of measurements has been sacrificed - well partially - we buy petrol by the litre but consume it by the mile, we still have 4 pints of milk in a bottle, but it is labelled as 2.73 litres!

So will the negative campaign pay dividends? Well the older generation have put up with worse, so they are more likely to respond to the nostalgia of the past if offered as a persuasive vision for the future. If the 'in' crowd can paint a more inspirational future of a rebranded EU than the 'out' crowd can re-ignite and evoke calls to a brighter future back in the world then they have got to drop the negative approach quickly.

Is this the most expensive leaflet ever?

The news that the UK Government is picking up an Invoice somewhere in excess of 9 million pound  for a leaflet promoting their case for the EU, has left many people stunned. How could a slim 16 page, landscape brochure possibly cost so much?

A copy of this document arrived at our home today and if had not been for the outcry the leaflet had generated it would probably been consigned directly to the recycling bin. Apparently the brief to whoever designed the leaflet was to provide 'The Facts' about continued British membership of the European Union. Sort of like a 'White Paper' we advise our 'knowledgeable' b-2-b clients to produce to explain the background to the state of knowledge etc. within the market relevant to their products. Such a White Paper in the b-2-b world would be written by an expert in the field and would outline the state of knowledge, the technologies, legislation, international standards etc and provide references to factual sources, to give the prospective buyer a fair view of the market sector and provide a useful background against which to make the eventual product purchase decision.

So does this leaflet meet these lofty aims - is it a document packed with essential facts and evidence offering a 'state of play' independent statement on the actual situation, or is it as opponents claim merely propaganda for one side of the referendum debate?

The design is rather bland, dated and unexciting. I  cannot imagine any of our clients however mundane their products might be, being excited or impressed when the agency account manager presented the concept at the agency/client meeting. I wouldn't have let it get outside the design studio if it were me. And I  wonder how discretely the value of the invoice was introduced? In hushed aside, "I  have put the 'paper work' in this envelope Prime Minister if you would be kind enough to pop it round to George to look after." Of course a lot of the cost is delivering something like 27 million copies to every home in the land. So why print a few rain forests worth of brochures in the first place and not go online?

Lets have a quick look inside the less than memorable front cover where we discover the style is left hand page 'facts' right hand facing page a picture. This is it:-

• 'An important decision for the UK' - opposite a photograph of a calendar with 23rd June ringed round.
• 'A stronger economy' - a mainly fuzzy out of focus photo of two men in blue overalls apparently doing something with some  metal parts with the statement 'Over 3 million UK  jobs linked to exports to the EU'.
• 'Improving our lives' - photo of an old wire hand held supermarket basket containing some oranges.
• 'What happens if we leave' - photo of container ships most likely delivering manufactured good from China.
• 'Controlling immigration and securing our borders' - photo of UK Border sign white text and blue background
• 'The benefits of EU membership' - photo of a group of four people in a kitchen, two ladies sitting at a table a lady possibly cutting oranges - same prop as in the earlier photo? - and a man polishing a mug with a tea towel. Strange.
• A once in a generation decision - photo of young couple carrying a baby.

Where figures, or indeed any facts are quoted, there is no reference to the source or interpretation of what they mean. I wonder if the client thinks it is money well spent?

Marketing for small start up businesses.

So you have a great idea, you have started to turn that idea into reality and you have achieved your first orders and demonstrated the concept is viable. What next?

In previous blogs we have looked at the huge numbers of small businesses in the UK - in fact 99.9%. Small business numbers have grown 55% since the year 2000. My daughter and her husband visited us over the weekend and I guess their experience is typical of many start up businesses. Unlike the traditional trades - painters, plumbers, plasterers, carpenters etc - their fledgling business is an online store selling personalised clothing to the equestrian fraternity. They both have full time day jobs, have a young daughter who is involved in sports clubs and needs to be taken to and from which means they are developing their business in their spare time. Very soon they have recognised a need for marketing and asked my advice. In a nutshell do as much as you can for free, in particular using social media and don't spend cash on display advertising and directories. But do use your customers to endorse your product and use word of mouth third party recommendations.

My first step would be to really understand the market they are addressing and that starts with research.   I  have no experience of the equestrian market at all - the sector of interest to them - but just a click away the British Horse Society offers an interesting page titled 'Equestrian Statistics' and straight away I  spot that their trade association had conducted market research as recently as 2015. Some 1.3 million people from amateurs to professionals ride horses.  This struck an immediate chord that this is more than an industry, it is a hobby, interest, a passion and probably an obsession for a significant number of people ... people who will willingly spend on anything than is related to their passion. In my analysis it is likely to exhibit traits I  have observed in other market sectors I am familiar with such as amateur dramatics and dance, which have a similar diversity from amateur to professional, not just participating but also as an audience. The next interesting statistic is 74% of riders are women - already we are beginning to get a feel for the target audience and are upon the way to identifying and defining a persona representing the target audience.

It is worth taking the time to develop a Market Analysis which need not be a complex document, but should still be written down. Here are some key points to cover:-

• About your company - as a start-up there will be little history, but you can identify the 'nature of business,' type of business, size and where you operate.
• Products and services - what is the range of products you offer and what services do you provide. 
• Competition - who are the existing businesses in your market sector, how do their products compare to yours - e.g. for range and for quality. What sort of businesses are they? Big/small/well-established/new? How do customers view them or rate them?
• Target markets. Operating on the Internet, enquiries might come from anywhere which prompts the question, do you want to export products yet? Will you get paid? Do you want all the paperwork? I  suggest you start with a local geographic area you can support and know, before reaching out to the rest of the UK, except for the highlands and islands, because couriers don't all handle those areas.
• Target audiences. We have already touched on this and it is important to identify who the customers will be for your products. You can start by examining the customers you have already - age, interests, location, male or female etc. and what media do they consume, especially social media such as are they on Facebook a lot, read equestrian magazines etc.?
• Route to market. You will probably start with direct sales one-to-one with your customers. But how will you deal with people who want to hold stock and take orders on your behalf, because they will want a discount and can you afford that?

 Your recent customers can also provide some valuable input to your research, marketing and business development.

1. Draw up a short survey to find out why they bought your product, how they found out about you, what they like about your product and would they recommend you to a friend?
2. Ask if they will let you use them as a reference - a third party endorsement is regarded as more honest than paid for space.
3. Offer them a small discount on their next purchase if they recommend you to say 3 friends.

 By now you should have a good understanding of your customers and prospects i.e. more like them, where they look for products like yours, web sites, social media etc so now it is time to start a marketing communications programme.

Marketing communications
Few start-ups will have cash to spare on display advertising so be aware of the advertising space sales people who call to offer a great deal. Today there are several 'free' options that can be used quite quickly.

Here are some suggestions to work at getting the 'word' out about your business without spending money.

1. Press releases - send interesting news stories about your product or service to special interest magazines and web sites  covering your target market - include a good quality and interesting photo. Send to local press too - they like local business news, but don't let them sell you and advertisement.
2. Short videos  - show customers wearing and talking about your product - post to YouTube, Facebook etc
3. Newsletter (html) - new products etc for emailing to customers; add email request on your web site. Don't send too often, you probably haven't the time anyway, but quarterly would be good or when you have an important new product to announce.
4. Set up a blog - offer helpful information, link to other relevant blogs and web sites and build an audience.
5. Use Twitter - 140 character headlines and shortened links to the full story on your web site.
6. Use Pinterest - themed photos relevant to your products.
7. Use Instagram - more photos!

Although you are doing this for free, that does not take account of your time, not just the cost of your time, but that while you are doing this you are not running your business. It is a good way to start but only in the short term. If you are not good at writing, photography, video and techie internet stuff then before long you are going to need someone who is - so start budgeting for outsourcing marketing when you have enough money to afford it.