Helen Loveless

NICK Clegg last month pushed the case for employee share ownership, urging more firms to take a ‘John Lewis’ style approach to running their business by involving staff far more.

In a series of proposals the deputy prime minister suggested employees be given the right to ask for shares in companies they worked for, arguing that it could lead to a fairer model of capital and labour and address concerns about executive pay.

So what are the benefits, of any, of adopting such a structure and how do business owners go about it?

Currently firms where employees own a significant stake in the business they are working for have a combined annual turnover of more than £25 billion – more than two per cent of GDP.

According to a recent study by Cass Business School, employee-owned businesses create jobs faster, are at least as profitable and more resilient than non-employee owned firms. During the recession they have outperformed the market. It also found that absenteeism and staff turnover tend to be lower in employee-owned businesses, while job satisfaction is higher.

Campbell McDonald is a director at Baxi Partnership, which offers advice, support and funding to employee-owned firms and those looking to become employee-owned businesses.

The Baxi Partnership came out of family business Baxi Boilers, which was set up in the 1800s but in 1983 became employee-owned. In the late 1990s Baxi Boilers was sold to Potterton and the £20 million sale proceeds were used to create the Baxi Partnership Fund.

Since then Baxi Partnership has ‘created’ more than 40 employee-owned businesses, working with a range of private firms and some public sector groups. The group holds free seminars and also works with business networks and groups such as the Institute of Directors to promote the benefits of employee-ownership.

McDonald says: ‘When you give people a stake in the business and a say in how things are run, you motivate them. There is a noticeable uplift in productivity and people become more entrepreneurial.’

He also points to the fact that employees may have the opportunity to exercise their views on pay, while some firms, such as John Lewis, operate a pay ratio to ensure the pay of those at the top is related to those at the bottom. There is also a greater transparency about business information, with staff able to see more clearly how the business is doing and the impact they are having.

There are different ways of approaching employee-ownership and each case is individual says McDonald: ‘There isn’t a clear signposted route to becoming employee-owned. One benefit is that it is very flexible, it can be as structured as you want. The key is knowing what you want.’

There are different ways to fund a transition to an employee-owned business. In some cases the Baxi Partnership will make a loan against the value of the business, alternatively it may take an equity stake in the firm concerned.

McDonald adds: ‘Sometimes employees invest in the business to fund the change but there are ways to make the transition that don’t involve employees investing. When firms come to us we ask them what they are trying to achieve and talk about the options open to them.’

>> For more on Baxi Partnership, click here

Air charter firm Elite Helicopters is offering apprenticeships for ex-servicemen left badly injured and disabled in conflicts like Afghanistan and Iraq.

It is one of a growing number of small firms that have discovered that skills offered by war veterans can prove invaluable in the workplace.

The opportunity also benefits ex-Armed Forces unable to return to the front line due to injury and facing an uncertain future. The Poppy Factory – the charity that makes commemorative poppies for the Royal British Legion – is also hoping to help with a £4 million pledge to get 500 war wounded into work.

Former Royal Marine Alec Robotham, 25, of Clanfield in Hampshire, started his apprenticeship with Elite Helicopters in January. In July 2010 he was almost killed when a suicide bomber detonated an explosive while walking past him while on patrol in Helmand Province, Afghanistan. The bomb shattered both legs and maimed his right arm.

Alec says: ‘After the slow recover it was a question of what next? The future felt bleak – I could not longer fight for my country. My careers officer told me about an initiative to train injured soldiers as helicopter pilots – a childhood dream. Although not so physically demanding as being a Royal Marine my brain still feels like it is on a Commando course.’

Alec began 12-month intensive training at the start of the year with help from a £15,000 grant from The Poppy Factory. The total cost for obtaining a full commercial pilot’s licence will exceed £50,000. As an apprentice he will be given practical support and training but Alec must also pay his way as a flight marshal and be involved in other ground operations. Elite Helicopters hopes to take on up to half a dozen war wounded apprentices this year.

Mark Radcliffe, pilot for Elite Helicopters is aiming to set up a charity called Wings 4 Warriors to help provide additional funding support if necessary.

Mark says: ‘This is not just about doing a good turn – it is a hard-nosed business decision where employers get highly skilled professionals. The level of commitment and determination these ex-servicemen bring is inspirational for the workplace.’

The Poppy Factory has already helped find work and apprenticeships for a hundred injured and disabled ex-servicemen and hopes to help get 400 more in employment over the next three years. Jobs that have been found range from golf course green keepers to company managing directors.

Melanie Waters, chief executive at The Poppy Factory, says: ‘There are a wide range of transferable skills picked up from being in the military. These men and women also have a level of resilience and dedication to hard work that makes them great in a team. The support we give is career management and aimed at benefiting employers.’

Leeds Business School research calculates transferable skills picked up in the military can be worth £9,000 a year. These include management, leadership, decision making, coping under pressure, teamwork, discipline and organisation.

>> Click here to find out more about the Poppy Factory

>> For more on Elite Helicopters, click here

Helen Loveless

SMALL business minister Mark Prisk MP will tomorrow launch a nationwide competition to find the best new British innovations in manufacturing.

The Make It In Great Britain challenge, part of a larger Government-led campaign which aims to change the image of modern manufacturing, will focus on pre-market products, processes and concepts.

It will be looking for entries that ‘represent the breadth and depth of the engineering industry, and highlight the innovation and talent in Britain today’. It is open to inventors, engineers, designers, businesses of all sizes, the general public and young people in particular.

Mark Prisk says: ‘This challenge creates the perfect platform to celebrate the most innovative and creative manufacturing minds out there today, while showcasing their skills to potential investors, employers and peers who could help kick-start their ideas into real commercial ventures.’

There are five award categories including Make it Stronger, Make it Sustainable and Make it Breakthrough, the latter of which is open only to entrants aged 16 to 21 years of age.

The winning entries from each category will be given the chance to showcase their creations at a Make It In Great Britain exhibition at the Science Museum in west London, taking place this summer. Visitors will then be able to vote for their favourite entry.

Will Butler-Adams, founder of Brompton Bikes, will sit on the judging panel. He says: ‘The Make It in Great Britain challenge will remind us how many fantastic things we make across Britain.’

The deadline for entries is April 5.

>> For more information go to bis.gov.uk/makeitingreatbritain

NEW figures just published show the number of businesses falling into insolvency is rising, adding to the frankly pretty bleak economic picture.

According to the Department for Business, Innovation and Skills, there were a total of 4,260 business insolvencies in England and Wales in the fourth quarter of 2011, up 0.4 per cent on the previous quarter and a hefty 7.2 per cent increase compared to the same period in 2010.

Experts, understandably, are warning that this indicates Britain is on the verge of a double-dip recession, with firms struggling to meet the challenges in their paths. Just a few of these include the ongoing problems in accessing finance, falling sales, late payments, high inflation and jobs cuts.

Add to that the cold weather spell which is threatening to make life even harder for UK businesses and you’d be forgiven for thinking that firms all over the country are giving up the ghost under the strain of the pressures they face.

Yet from an anecdotal level – and I speak to a lot of small businesses every day, and a lot of organisations who also speak to small firms every day – that is not what is happening.

Many, quite sensibly you might argue, are ignoring what we journalists are writing, disregarding or just plain not listening to the prophecies of doom and gloom we peddle most weeks, and just getting on with the business of running their business.

For the fact of the matter is that running a business will always involve challenges and difficult times. There is no doubt that the last few years are among the most difficult ever experienced by many firms and the duration of the recession has hit businesses hard, yet those firms that are well-run, lean and yet still prepared to take risks and move forward should still be here when the dust has settled and we are back on a brighter economic footing.

A downturn will also weed out some businesses that are not solid, that are not well-run and – it might sound harsh – that don’t deserve to survive in an increasingly competitive and difficult market.

Every day I hear stories of businesses that are thriving despite being unable to access bank finance, of firms that are developing innovative new products or taking their businesses forward in exciting and experimental ways.

I wish I could cover even more of these stories but sadly I only get a limited amount of space within the paper so have to settle for recounting only a few of these firms’ success stories.

While many business owners are too busy to pay attention to the doomsayers, I do worry that the constant overwhelming focus on how terrible things are out there will deter many other people from setting up their own business, or worse still deter business owners from making the nececessary investment into their company to ensure they can remain competitive both on a national and global scale.

Equally I know that irrespective of what we say there are many amazingly entrepreneurial people and businesses out there who will go on their path and thrive because they have the vision and the strength to do so.

In 2012 I think we need to concentrate on the positives more than ever and keep on highlighting those wonderful success stories that may not make the headlines but certainly should be doing so.

Who Cares has been launched by the Financial section of the Mail on Sunday to offer advice, help and support to the millions of people in Britain today who are affected by the chronic difficulties of old age, whether they are elderly themselves or helping to care for older relatives and friends.

So many people now find themselves plunged into the confusing world of benefits, entitlements, dementia, care homes and home care. It can be a huge battle for younger relatives and a struggle for anyone since one of the worst aspects of this world is a sense of isolation.

It is hard to know which way to turn.

In a series of articles and blogs, Who Cares will be offering hard facts and straightforward advice to help you find your way through the maelstrom.

We want to create a community that includes you and offers genuine support. This will be a place where you can share your stories and where we will be campaigning to help push all these issues up the agenda..

>>Who Cares wants to hear your questions and concerns, your thoughts and your experiences. You can contact us by posting at the end of any of our articles or blogs, or you can email us direct on whocares@fmwf.com.

For Advice on:

Benefits and Entitlements click here

Home Care click here

Dementia click here

Living and residential care click here

Important Contacts click here

Sarah Whitebloom’s blog click here.

[Reuters] Mark Zuckerberg may be retaining tight control over the company when it floats, but he isn’t the only one running the company. Critically he has surrounded himself with experienced executives.

These are some of the key personalities behind Zuckerberg and Facebook – the world’s largest social network.

1. Mark Zuckerberg, chief executive and co-founder

Zuckerberg, portrayed as a brilliant, ambitious and ruthless empire-builder in the 2010 movie “The Social Network,” founded Facebook with Chris Hughes, Dustin Moskovitz and Eduardo Saverin while at Harvard University in 2004.

The 27-year-old frontman, who has repeatedly said he was in no rush to go public because that might distract employees and dilute his control, decides the direction and product strategy of the company.

Forbes estimates Zuckberg’s net worth at $17.5 billion, making him the 14th richest man in the United States.

2. Sheryl Sandberg, chief operating officer and Zuckerberg’s top lieutenant

Sandberg, one of the most powerful women in Silicon Valley, oversees business operations including sales, marketing, business development, human resources, public policy and communications.

Another former Google employee, Sandberg built and managed Google’s online sales channels for advertising and publishing and operations for consumer products. Before working for Google, she was chief of staff at the Treasury Department under President Clinton.

Zuckerberg’s 533.8 million shares in Facebook are worth almost $16 billion, based on a per-share value of $29.76 that the company assigned to its restricted stock units on 31st December. As a result, Zuckerberg, following the example set by Apple founder Steve Jobs, agreed to decrease his compensation from $1.48 million last year to $1.00 effective Jan. 1, 2013.

By comparison, Sheryl Sandberg earned $30.8 million in total compensation last year.

3. Peter Thiel, investor and director

The billionaire Stanford alumnus and former Wall Street trader was Facebook’s first outside investor and director. Thiel co-founded online payments service PayPal and sold it to eBay Inc for $1.5 billion in 2002.

4. Christopher Cox, vice president of product

Cox organizes Facebook’s product strategy and oversees product management and design. He joined the company in 2005 as a software engineer and was involved in the first versions of Facebook features such as the News Feed and Inbox.

5. Dan Rose, vice president of partnerships

A former Amazon.com Inc manager who helped develop the “Kindle” digital book reader, Rose oversees Facebook’s partnerships, forging ties with Hollywood film studios, game makers, mobile phone companies and even carmakers. Rose also takes the lead on mergers and acquisitions.

6. David Fischer, vice president of advertising and global operations

Fischer is responsible for much of Facebook’s vast and highly profitable advertising network. He runs sales, advertiser marketing and customer operations. During seven years at Google Inc, Fischer helped build that company’s online ad network into the largest in the world.

Before that, he was deputy chief of staff at the Treasury Department during the Clinton Administration.

>> Click here to visit FMWF’s Debt Advice section

If you read my first Diary of a Young Debtor entry, you may be wondering how on earth I am going to pay my rent which is due out this week… because I know I was.

Well, I found a solution. Admittedly, not an ideal one: I have opened up a new credit card. My rent HAS to be paid and I HAVE to be able to get to work. I don’t know what else I could have done.

When I wrote that post my HSBC credit card was almost entirely at its limit (balance: minus £3,646, credit available: £104) and I was also paying loads of interest (about £50 per month).

So I have transferred my credit card debt to a new Barclaycard Platinum credit card which is O% interest (I found the offer via this article). I don’t know why I didn’t transfer it elsewhere before. It is just stupid and lazy that I didn’t, because I’m now £50 per month better off without even changing my lifestyle.

If I miss a payment I will lose the O% interest offer, which lasts 24 months, so I have to keep a close eye on it, but it seems to have worked out so far.

…It also means my HSBC credit card has been freed-up for me to continue recklessly using it to pay my rent (erm, yes – I did say it wasn’t an ideal solution). I’m committed to getting in credit now, though, and as soon as I can pay it off I will.

This month I have already saved money by smoking less (one packet of 20 and one packet of 10 cigarettes this entire month, compared to about one packet of 20 every two days last month), scavenging from my parents’ fridge and cupboards (this is fine by them as long as I don’t take the… biscuit) and cancelling my £30 per month Virgin Media broadband (and using my parents’ connection at home instead for now).

I’m feeling like a bit of a paragon of virtue. One packet of cigarettes in a month! This seems semi-miraculous! I don’t want to get too smug though, because I have a long way to go. It is much easier to cut back on spending when everyone is on a post-Christmas/New-Year-health-drive and the pubs are quiet (ahem, and when you are living with your parents and scrounging internet and food off them).

I am genuinely in this getting-out-of-debt-mission for the long-haul though, and I now have two lots of credit card payments instead of one, so I can’t start celebrating yet.

 >> Follow me on Twitter: @diaryofadebtor

>> Or take a look here for Mark’s other exclusive columns for FMWF’s Enterprise Zone.

I would like to do some networking to create more business but am quite a shy person, can you give me some useful tips on how to approach people?

Mark Lovell replies:

Networking is simply telling other people what you do and it doesn’t have to be in front of large crowds of people. You’re the expert; you know more about your business than anyone else so how could you be wrong?

However, that doesn’t stop many of us feeling nervous or ill at ease at the thought of approaching people. So here are a few useful hints and tips to consider when planning on networking.

Firstly, who is in your network already? We all have existing networks of friends, family, ex-colleagues etc, but have you had a close look at who is already in your network? How many of the people you already know could be your potential customers, suppliers, business advisers, consultants, market researchers?

Some further points to note. Choose your networking event wisely. Make sure the events you are attending will actually give you the opportunity to access target customers or relevant links to your industry. It’s very easy to end up going to many events, without making a significant connection.

Ensure you listen carefully and focus on that listening, rather than talking. If you listen carefully you will be able to establish a connection or interest that will help you tailor make your offer according to who you are talking to.

Another important point is that ‘people buy people’; it is often about establishing a relationship and not immediately focusing on what you want to sell. On that point, some people are afraid of the word ‘selling without’ realising that every day, in every interaction, we are selling ourselves. We present a different side of our personalities depending of who are we talking to.

It is a good idea to acquire business cards from the people you are interested in dealing with. This means you are taking control of any future engagement, and the power rests in your hands to establish further contact instead of waiting for the person to contact you. A tip is to jot down a ‘note to self’ on the business card – to remind you in the future why it was that you wanted to remain in contact.

Ask yourself a few questions to help you frame what you want to say and how. If you only had 60 seconds, how would you introduce yourself, your business/product/service? What would you say? How would you say it? Create a story. Not too much detail.

Practice, practice, practice

>> For more expert advice on Networking click here

Here they are:

Current account overdraft limit: £1,500.

Current account balance: Minus £1,386. Credit available: £114.

Credit card limit: £3,750.

Credit card balance: Minus £3,646. Credit available: £104.

Bank loan: £1,799. Possibility of extending the loan: Nil.

Student loan: I have no idea! Huge, probably.

Savings account: 43p (In credit. Hurrah!).

Oyster card balance for travel to work: Zero.

Fridge: Empty.

What a mess! It looks blatantly alarming when you write it down like this, but this is the first time I really have.

For the past few months I have had to pay my rent on a credit card and I have been getting whacked with interest payments and charges on my current account.

It is embarrassing to admit this, but I have got myself into this situation where I pay for everything through loans and credit cards, and it has now reached a breaking point.

I cannot pay next month’s rent on my credit card again as I am almost at the limit. I have already taken out a loan and the bank will not let me extend it. And they won’t let me extend my overdraft, which I am permanently living in, either.

How have I got myself into this mess? My financial situation hasn’t suddenly changed … other than that I have reached the point where the bank says ‘no’. Thankfully, I still have a job.

I don’t think I have an extravagant lifestyle, but I admit I have been sleepwalking into a spiral of ever-increasing debt. I didn’t think I was a reckless person. My bank statement says otherwise.

It is not as if I have been out buying expensive clothes and shoes. I haven’t been out drinking until the early hours (OK, I have a little bit). I don’t run a car.

The problem is I never got out of living in my £2,000 interest-free overdraft after I finished university. And as that interest-free overdraft limit shrank when the bank gradually withdrew it, my outgoings stayed the same. The high cost of living and renting in London has kept me overdrawn. (London did it, it wasn’t me!).

Now I have a £1,500 overdraft (thanks to the bank agreeing not to remove it), but it is no longer interest free. I pay about £20 a month interest on the current account and charges on top of that. For example my current account charges, due out later this month, are £92.87 (£50 informal overdraft fees, £25 fee for a rent payment which bounced and £17.87 interest). I pay about £65 per month to pay off my bank loan and £70 per month credit card payments (£50 of which is interest). Paying fees like these over the past year has gradually tipped me further and further into the red.

Yes, I know. It is my fault. And I am going to do something about it.

Now I am on a mission to get out of debt within a year and I will share the journey through this blog. It is all very embarrassing. But if I learn anything from this, then you can learn with me…

>> Follow me on Twitter: @diaryofadebtor

 >> Here are some tweets I have received about this diary entry. Thanks for your encouragement…

@debtology: Hi there! Keen to hear more about what you plan.

@debtology: Here are a few suggestions on who to follow @Zerocredit_UK @BDACBristol @jrf_uk @Gemma_Payplan @MoneySaviour @paullewismoney

@debtology: More: @martynsaville @JohnHolmstrom @stellacreasy @CAPuk @DAVIDJONES_dpaj @faiselr @nacasadvice @patrickhopedown @WorldBank

@meandmyshapes: very brave and inspiring to reveal all. Good luck and I look forward to learning some penny saving tips myself!

@debtology: Today’s first #FF @diaryofadebtor Relative newcomer to Twitter but an interesting story. One to follow for the future we think. Take a peek.

@gemma_payplan: I second that.

@garethcare: Really interesting to follow @diaryofadebtor and read the blog http://bit.ly/z0uW3w - Has society consigned the young to debt?

@garethcare: I’m on your side in all of this. Been in debt myself- not a good feeling. I’ll follow your quest with interest (excuse pun)

@debt_s_trust: good luck! We’ll be following and supporting you along the way! You can do it : -)

@bob_banni: look up http://capmoney.org/ they have really helped a friend of mine.

>> Or visit our dedicated “Women In the Boardroom” section here

By Vicki Owen

When Heather Jackson read a report saying Yorkshire had 16 per cent fewer women on boards than any other English region she decided she would try and find out why.

Formerly a consultant to blue chip companies, she began a mission to connect local business leaders on the issue in 2009.

Now she runs An Inspirational Journey, a firm she set up to help firms across Britain identify and develop female talent, and Allan Leighton, former chief executive of Asda and on the board of a string of firms including Peacocks, is its chairman.

Heather, 43, says: ‘The same month as that BDO Stoy Hayward report came out I began speaking to local headhunters and chief executives. I spoke to lots of women who were good at their job but had not considered putting themselves forward for non-executive director positions and realised women were not meeting other women and involving themselves in the selection process.

‘I set up a steering group of 50 leading women in Yorkshire – The Two Percent Club. This year every region in the UK will have one, starting with a launch in Manchester in February.’

Heather, who lives in Leeds and has two children, says the initiative is designed to help senior women raise their profile.

An Inspirational Journey, which has a team of nine and has been expanded with the support of RBS, also runs a mentoring scheme, a conference for business women and a network for women ‘working below the senior corporate level’.

>> Click here to visit An Inspirational Journey’s website.