Is it time to start your own business? - Daily Telegraph Is it time to start your own business? - Daily Telegraph

Tuesday, May 29, 2012

Is it time to start your own business? - Daily Telegraph

Is it time to start your own business? - Daily Telegraph

If you use your car for business, invite clients into your home, offer advice or are the main breadwinner for your family, then you need the appropriate cover. Home-based firms are vulnerable to business disruption, legal claims and damage to property just like site-based ones.

But the message is clear. If you can start a lean business, attract clients and cover yourself against the worst-case scenario, now could be the best time yet to take the plunge into self-employment, regardless of the choppy waters.

What AXA can do for you

AXA’s new website for businesses — — allows start-ups to assess their insurance needs and buy cover in a clear and simple way.

Business owners who want to keep an eye on what they spend can strip out the add-ons and be safe in the knowledge that they have the basics sorted, while others can select add-ons appropriate to their structure and the service they provide — all at the click of a mouse.

Customers decide their own premium and can see at a glance how much various elements of cover cost. This modular approach, written in plain English, is a quick and pain-free way to protect your business, giving you more time to concentrate on your big idea. And for customers who want the comfort of knowing they have all the bases covered at the right level, AXA’s helpline operators are on hand to give you the best advice around the clock.

What you should know about college financial aid - Marketwatch

By Mara Grbenick

WASHINGTON (MarketWatch)—President Barack Obama opposes a push by Congress to double the 3.4% interest rate on federal Stafford student loans, but Mark Kantrowitz, publisher of and, has a different message: Let the rate expire in July as currently mandated and increase funding for Pell Grants, which help make college attainable for the neediest students in America.

The U.S. is in a brains race, Kantrowitz says, and, to stay competitive, should devote substantially more resources to smart people who can’t afford college.

In a recent conversation, Kantrowitz offered his take on federal education loan policy and his best advice for students and parents.

Question: What frustrates you most about how the college-aid process works?

Answer: “The financial-aid system, which includes the financial-aid application, the methods for evaluating financial need and the types of aid available, is too complicated. Neither the Free Application for Federal Student Aid (FAFSA) nor the College Board’s CSS/Financial Aid Profile form take into consideration consumer debt held by the student or parents. Student-loan debt is also not treated as offsetting to assets or income and consequently the need analysis overstates ability to pay.

“There are three college-savings plans: 529 college savings plans, prepaid tuition plans and Coverdell education savings accounts. There are three education tax benefits: Hope Scholarship tax credit (also known as the American Opportunity tax credit), lifetime learning tax credit and tuition and fees deduction. There are also too many student-aid programs: For example, there are five different federal loan programs — Perkins, subsidized and unsubsidized Stafford, Parent Plus loans, consolidation loans — and they all have different interest rates. It’s too much choice for most people and makes the true cost of college hard to know.”

Q: What should students look for in their college-aid award letters?

A: “In financial-aid award letters, colleges often describe loans as reducing college costs, which is, of course, misleading, because loans do just the opposite—they increase your costs. Also, there’s an important distinction between the net cost, the term used in award letters, and the true cost of college. The net cost of college is the total cost of attendance minus the financial-aid package, which may include a variety of student loans.

“I routinely hear from students who believe they are getting a free ride because the net cost is zero. The net cost is usually the same or similar to the expected family contribution, which may be zero for low-income students. When I look at their financial-aid award letters I see thousands of dollars of student loans and tens of thousands of dollars of Parent Plus loans. That isn’t a free ride.”

Q: What should the goals be, on a national level, to improve financial-aid policy?

A: “In the United States, we are not adequately investing in our greatest resource—students. Public policy can be based on a variety of goals, such as increasing the number of college-capable low-income students who can enroll in and graduate from college, or keeping the U.S. strong in fields that are going to be strategically important (e.g., science, technology, engineering and math) by rewarding academic merit in those fields. Finally, encouraging college graduates to become teachers in those areas will help educate the next generation so public-service loan forgiveness should be a part of the policy.

“More money for loans means less money for grants. Cutting direct investment in education will ultimately hurt us as a nation. The benefits of this investment are not private. Not only do college graduates earn incomes that are 70% to 80% higher than high-school graduates, but bachelor’s degree recipients also pay more than double the federal income tax.”

Q: Why have the interest rates on some federal student loans remained high even though interest rates for other things like cars are quite low? The Direct Plus loan for parents is 7.9% plus a 4% origination fee. The government makes money on it.

A: “The rates are overall a pretty good deal. When you buy a car, the loan is secured with the car. When you buy a house, the mortgage is secured by the home. If you default on a federal student loan, the government cannot repossess your education. Federal student loans are also higher risk, since they are not credit underwritten. Federal student loans have fixed rates, while most other forms of consumer debt have variable rates, rates that have nowhere to go but up. This is why, if you fail to pay your student loans, your wages or even Social Security checks could be garnished up to 15%.

“The interest rate doesn’t matter while you’re in school. It only affects the cost of college after you graduate. Remember that interest rates are unusually low right now because the Federal Reserve is suppressing increases in interest rates through 2014. If interest rates follow past patterns, they will eventually begin to rise by about the same amount they dropped at the start of the credit crisis. Federal student loans have fixed rates, which over time will cost less.”

Financial crisis: UK can't afford its shopping addiction anymore - Daily Telegraph

It did at one point cross my mind, clutching my three-for-two Christmas ribbon and Per Una underwear on my way to the wine section, that even with 20 per cent off the price of things, that still left 80 per cent to pay.

No matter; I stayed and queued and saved the grand total of £12.50.

When was it that shopping did become a leisure activity, taking over from family, sport, religion, dogs and loafing around with a book as the way people spend their time? More to the point, why did it?

The author Neil Borman, whose book Bonfire of the Brands documented his flight from brand addiction, has released a spoof film about indiscriminate shopping, The Good Consumer.

The voiceover at the start of it declares: "The good consumer is always buying new products. When he is not buying, he is earning money so that he can fund his consumption, or looking for purchases that he can make in future."

Yes, it's heavy handed. But it doesn't feel like a spoof so much as a sober account of the condition of England, recession or not.

A few weeks ago, the retail sector raised a couple of fingers to the credit crunch with the opening of the Westfield shopping centre: two miles worth of expensive shops in a part of London previously known for its proximity to Wormwood Scrubs prison.

The opening was a riot. Another two multi-billion-pound shopping projects kicked off this year – at Liverpool One and Bristol's Cabot Circus – on top of 10 rather smaller shopping-centre openings elsewhere.

And the retail spread is not stopping any time soon; the Westfield developers will be opening another shopping centre on the same scale in Stratford, East London, in 2012.

The recession has clipped our wings, but we're still buying things – although more and more of it is from Primark and Aldi.

Where does it come from, this almost hormonal drive to go shopping, to buy and own more things? Why do we do it?

Men hate it. Children hate it. The shoppers you see in department stores don't give any discernible sign that they're enjoying themselves – bookshops apart. There's something dead around the eyes.

But families will still take themselves off to Bluewater to spend their day of rest – theirs, if not the assistants'.

And if wandering from WH Smith to Scribblers to Boots to Debenham's makes them look like zombies, a working definition of hell would be the shopping centre Christmas sales.

Women queue up at five in the morning to save 50 quid at the Brent Cross Next sales. Why?

The social psychiatrist Oliver James, in his book, Affluenza, squarely attributed much of the high rates of mental illness in Britain and the US to consumerism.

"The Affluenza virus," he says, "is a set of values which increase our vulnerability to psychological distress: placing a high value on acquiring money and possessions... My explanation... is that the virus promotes Having over Being and the confusion (through advertising) of wants with needs."

It wasn't always thus, you know; shopping isn't part of the human condition.

The other week, I was in Walsingham in Norfolk, famous for its shrine to the Virgin Mary. We pottered around the shops after church and before the pub opened – but, this being Sunday, most shops were shut.

And as we browsed the teddy hospital for reclaimed bears and the children's charity shop and the little retail section at the entrance to the priory – three packs of Christmas cards for a pound! – it dawned on me what was missing.

There weren't any chain stores; all the shops appeared to be independent or at least without identical branches in London, Glasgow and Manchester.

The retail equivalent of the M&S discount day will be tomorrow when the Catholic church holds its Christmas (sorry, Advent) Bazaar and the going price for most things will be around two quid.

But then in Walsingham, there is a life that doesn't revolve around shopping: you've got religion, riding, pubs to go to, walks to go on, Women's Institute meetings to attend. Lots of places were once like that.

Funny; it crossed my mind then that the super-luxe section of shops in Westfield is called The Village. Except that village is a parody of the real one.

Tamasin Doe, the former fashion director of Instyle magazine, pinpoints the start of shopaholicism around 25 years ago, during the Eighties, when shopping malls, which had already been around for a decade, began to spread and become a place for the young to hang out. The malls stimulated the collective shopping gland.

"You began," she said, "to be defined by how you shop, and everything else was depleted by it. Everything was defined by acquisition. Shopping became a way to recreate yourself."

The fashion cycle shortened; built-in redundancy became the essence of it, at least for women. The rise of low-cost production in China meant it became cheaper to buy new manufactured goods than to have the old ones repaired.

In fact, for some durables, such as computers, it wasn't actually possible to fix old models; they had to be replaced.

Politics came into it too, notably the 1994 Sunday Shopping Act, which lifted the curbs on Sabbath trading.

It had conscience clauses to prevent people being forced to work on the day of rest, but if you want to hear a not very nice laugh, ask your department-store manicurist or perfume saleswoman whether she can turn down work on Sunday.

At the same time, we got the cult of celebrity. Obviously, there have been pin-ups for the masses – society beauties and cult actors – for well over a century.

But Hello!-style celebdom, being famous for nothing at all, is a comparatively recent phenomenon.

And what celebrities do is shop and be seen to shop and give their endorsement to products that the rest of us can shop for. It's hard to think of images of Wayne Rooney's wife, Colleen, without armfuls of carrier bags.

The symbol and apex of the trend were the It Bags – big, phenomenally ugly handbags that cost from about £300 to £1,500 and had a life cycle of about six months.

Once Britain took to consumerism, it went all the way. Over the past 20 years, the retail sector absorbed 88 million square feet of new space – the equivalent, for those who think in terms of football pitches, of 1,200 of them.

Obviously, you can't have a shopping habit without paying for it – eventually. Because of the liberalisation of credit over the past couple of decades, personal indebtedness is higher in Britain than anywhere in Europe: consumer debt totals £1.5 trillion.

There was a time when, if you wanted to buy something, you had to save up for it. Ten years ago that was seen as almost risibly quaint. Now it looks like rather a sensible thing to do. The demutualisation of the building societies added to the problem.

Don't think I'm being snooty about all this. I was right in there and the upshot in my case is that I have, oh, six credit cards, which cost more to maintain than the baby.

Plainly, the recession has changed things. But only up to a point. One retail analyst, Verdict, estimates that retail-sector growth will fall to 2.4 per cent in 2008 – but that's after 10 years during which average annual growth was about four per cent.

Of the £228 billion we're likely to spend in the shops this year, an estimated £128 million is classed as non-essential, indulgence spending. Even if there's a fall in spending, it's from a very, very high base.

What's the solution? Well, how about going with the grain of the recession, of making do and mending? How about not shopping on Sundays?

Keeping perfectly good clothes even when the fashion roundabout has moved on? Spending time with the family at home? Saving up to buy things?

At the end of all this, we may come to remember that we're more than the sum of our possessions. And that would be a good thing.

How to launch your business for under $1000 - ninemsn

Is it possible to brand, market and launch your new business for under a grand? I did it – and so can you – in ten easy steps.

Many soloists feel they need to have significant funds available in order to get their business started. While every cent helps, it can be done on a shoestring. Once you're up and running, you can build on improving your branding and marketing where necessary. But for starters, here's how it's done.

1. Register your business name to ensure that no-one else can operate under that name. In Australia this costs less than $200.

2. Register your domain name and set up web hosting (about $100 per year). This will enable you to set up emails at your business domain and host a website at your business domain address. This looks far more professional than a third-party email or website provider.

3. Decide on your brand image and obtain an effective logo. You could pay thousands of dollars for logo design work; however, there are some companies online that can provide you with a professional, customised logo design suited to your brand for as little as $49. Beware of "free" offers, as you may not get the quality you want.

4. Set up a website. The best low-cost solution is WordPress, a free website content management system that allows you to update website content. This will save you hundreds, if not thousands, of dollars. It is advisable to purchase a premium website theme from a third-party company with built in functionality that can then be customised to suit your branding ($20-40).

5. Purchase website maintenance training. A professional-looking website is critical for an online business's success so I highly recommend investing in an online training program (for WordPress, about $200) that covers everything from the basics to using recommended plug-ins and widgets, as well as search engine optimisation (SEO) techniques.

6. For a professional look, purchase high-resolution images. Source these from a stock photography website (about $1 per image). These can be used on your website and any other print and graphic design projects, so long as credit is given.

7. Design and purchase business cards consistent with your branding. There are numerous online companies that offer business cards for a minimal cost (about $30). Having your contact details on hand is important for networking and marketing your business in the early stages.

8. Set up social media accounts under your business name with Facebook and Twitter and consider extending this to LinkedIn and Google+. Ensure that your branding is consistent across all of these social media platforms and connect with other companies that have a similar audience. Invite your personal and professional networks to connect with your business via these platforms and ask them to recommend to their networks where relevant.

9. Set up a blog. Write concise, relevant and informative articles to your target audience and issue this on a consistent basis (weekly or monthly). Repurpose these documents and submit to other websites or blogs that serve a similar audience, and to content websites such as Ezinearticles. By having other websites link back to yours, you will get significantly better results in Google searches and drive traffic to your site.

10. Consider some cost-per-click advertising and set a low budget ($25 per month) with Facebook or Google AdWords.

As a final tip, sign up for as many reputable business newsletters that provide free tips and resources in online marketing, branding, social media networking and search engine optimisation (SEO). In the online age there is so much to master and many businesses provide enough free content to allow you to be successful without blowing your start-up budget.

There are many more branding and marketing activities that could be undertaken, but the ones listed will get you off to a professional and importantly low-cost start.

How did you save money when launching, branding and marketing your business?

To comment on this article, head here.

For more from Kathryn Hocking, head to, Australia's community for solo and micro business owners.

Give these overpaid CEOs asbos (that's Antisocial Business Orders) - The Guardian

Forget civil servants. Forget academic expertise. Forget irksome consultation and careful study of what happens in other countries. No, today's Downing Street wonk knows just how to sort out any problem of public policy: just add CEO.

I'm not referring solely to private-equity baron Adrian Beecroft and last week's publication of his 16 pages of under-researched chest-puffery on how employment regulation should be slashed (actually, let's be fair: take away the gubbins and it's only 13 pages of under-researched chest-puffery). That merely follows on from Mary Portas and her government-commissioned proposals on how to revivify Britain's high streets; and from Topshop boss Philip Green and his 2010 report for David Cameron on how to cut waste in Whitehall.

The old cliche that every journalist has a novel inside them must be updated; now, it appears, every Rich List boss yearns to produce a report on reducing contraflows on the M25.

Not all these ideas stink as bad as Beecroft's, but the notion that business people have some unique cache of wisdom off-limits to anyone else is swiftly dispelled by a glance at the Green report on making government more efficient. Since I can't better it, let me quote the conclusion of Peter Smith, former director of purchasing for the Department of Social Security: "There is not a single procurement idea here that I have not read about in a previous report; is not already being implemented; or has not been tried and failed."

Like many bad things in public policy, you can trace the roots of this to Gordon Brown and his trick of pulling in big-name business people to head mammoth policy reviews: BA's Rod Eddington to look at transport or NatWest's former head Derek Wanless to study health funding. It was typical Third Way gimmickry – but at least back then the bosses sat alongside civil servants and produced something substantial (and, with the Wanless review, something positive, too: a compelling case to spend more money on the NHS). The same cannot be said for those 13 pages of saloon-bar guff from Beecroft.

In the media too, the voice of big business is loud and constant. No BBC discussion of globalisation is complete without advertising boss Martin Sorrell. Rare is the debate over the eurozone that does not feature Next's CEO Simon Wolfson. The logic of booking such people is never spelled out, but is nevertheless obvious: they have made a bit of money, therefore they must know all about economics. In the process, the subject is trivialised and the views of the powerful, on areas well outside their expertise, is given unnecessary amplification. Needless to say, the same courtesy is rarely extended to trade unionists or campaigners from NGOs.

And besides, why not extend the argument further? Jonny Logan was magnificent on Eurovision all those years ago with Hold Me Now, so why not invite him to front a documentary on Ireland's sovereign debt problems?

What's really odd here is that the representation of big business in the media and in public policy comes precisely as major chief executives are increasingly remote from the rest of us. Their pay packages are bigger than at any point in living memory, while many feel less obliged to pay taxes to the countries they deign to advise. Cameron's former efficiency tsar, Philip Green, is equally efficient in the organisation of his tax affairs: he legally avoids paying millions to Revenue and Customs by paying himself in the form of a dividend to a Channel Islands company owned by his wife, Tina, who in turn is legally resident in the tax haven of Monaco.

But for chutzpah, Sorrell goes one better. In September 2008, he wrote an op-ed for the FT about how his London staff suffered "ruinous housing costs, high crime levels and creaking public transport". Just a few months after issuing this plea for greater public spending, he moved his FTSE 100 firm to Dublin for tax purposes, even while keeping its offices in London. Oh, and as Ferdinand Mount points out in his book The New Few, in 2008 the WPP boss got 631 times the wage of his average employee. Yet somehow Sorrell's views on what should be done about taxes for the super-rich get far more airtime on Newsnight than, say, a tax-justice campaigner such as John Christensen.

In an ideal world, the media and government would simply give less prominence to big business. But that isn't going to happen any time soon. So meanwhile, the rest of us should at least get some say on which business people should not be allowed to pronounce on public policy. We could do it through a scheme called Antisocial Business Orders, or asbos, for short.

Executives of a company might earn an asbo if they are on excessive pay packages, or arrange their tax affairs so as to (let's be gentle here) inconvenience the Revenue. Or a boss might not give enough of his corporate budget to training staff, or investing in wider community projects. Chris Bones, a professor at Manchester Business School, suggests awarding asbos for climate-destructive corporate behaviour.

Unlike the other asbos, the ones for business wouldn't carry any punishment – a committee of judges would simply slap them on firms behaving perfectly legally, just very, very badly. And then, when the Today programme stuck on Sorrell for the umpteenth time, families across the land would know not to pay him any heed. After all, he earned his asbo a long time ago.

Stay nimble: a winning formula for handling downturns - The Guardian

What lessons can governments learn from the global financial crisis and the way in which companies responded?

Our research into corporate reactions to the global downturn that hit its nadir in September 2008 with the collapse of Lehman Brothers overturns received wisdom on how companies should handle recessions and provides some salient lessons for governments. In particular, we believe that many European governments have adopted courses of action that in the corporate world turned out to be a losing strategy: they have been too slow, too cost-focused and too passive.

The cost of the financial crisis was enormous; GDP ratios rose by about 25% in many countries. As a result, the focus of many governments started to swing towards debt reduction, and away from supporting economic growth. Many of these economies are now seeing a double-dip recession, casting doubt on their governments' diagnosis and treatment of the problem.

Conventional wisdom on how companies should handle recessions says they should batten down the hatches and ride out the storm.

But in this downturn, the winners adopted a different mindset, which resulted in a faster response, a more intelligent approach to cost reduction, and a determined focus on coming out of the crisis stronger than they went in.

We believe governments can learn from all three elements of this corporate experience.

The first element is speed of response. Conventional battening-down amounts to saying "we will wait until we see that a recession is real, then cut costs and hold firm until we see a return to business as usual". In the financial crisis, this cost many companies 18 months of reaction time from the collapse of Northern Rock until six months after the fall of Lehman Brothers.

A more successful approach borrows from the military. Observe, orient, decide, act (OODA) was invented by US airforce pilot and Pentagon consultant Colonel John Boyd.

Our survey showed that too many companies failed to interpret the facts ($1tn in losses in US sub-prime mortgages, the first run on a UK bank for over 140 years, and numerous worldwide failures) as indicating either that a recession was coming at all or that it would be more profound than others they had lived through. The winners won through superior orientation, which enabled them to plan better and carry through their plans.

Similarly, many governments are still struggling to adjust in a post-financial crisis world. Many continue to ascribe high levels of debt to government profligacy when, with the exception of Greece, most of the highly indebted countries had relatively low levels of government debt before the crisis, compared with Germany.

They are struggling to ask the right questions, let alone identify the right answers.

The second element is an intelligent approach to costs. In a recession, cost-cutting tends to be reactive, and indiscriminate. The softest targets are cut, regardless of their contribution to business sustainability: travel and client entertainment go first, followed by marketing, training, IT investment and new projects. These cuts may preserve short-term profits, but they often need to be reversed and compensated for later, when the pressure is reduced.

Governments' approach to cost cutting stems from the received wisdom that fiscal contraction has no side effects. The UK led the way, talking of 'expansionary contraction', but we were not alone: Jean-Claude Trichet, former head of the European Central Bank said austerity measures would not trigger stagnation. In fact, the degree of austerity turned out to be strongly correlated with decline. The US took a less austere approach, which resulted in a major political debate, and a ratings downgrade, but the US has grown faster than the EU and UK, and its interest rates remain lower.

The final element is mindset. The conventional approach to a recession is defensive, focused on protecting profit. The winners understood, however, that the great recession was deeper, would last longer and would have more structural impact than a normal recession, bringing major shifts in market power. They understood that flux equals opportunity and planned to emerge stronger from the crisis.

One large consumer goods company, for example, recognising that its competitors would slash marketing expenditure, held spend constant, and took advantage of the crisis to renegotiate its media contracts. This helped it to secure double the advertising space, double the air time and double the web-presence. As a result, it more than doubled its 'share of voice' and increased market share followed.

A defensive approach is insufficient for governments. With declining GDP, any level of debt eventually becomes unsustainable, so a successful strategy needs to generate growth and, in particular, private sector growth.

With little confidence in domestic demand as consumers and governments reduce spending, large companies are investing abroad or in risk-free assets rather than making capital investment at home. But latent demand exists in many areas of infrastructure and energy; and where returns can be reasonably expected, investment is attractive. Investment in sound projects makes the country richer, not poorer.

Mark Thomas is a business strategy expert at PA Consulting Group. Click here for more information

This article is published by Guardian Professional. Join the Guardian Public Leaders Network free to receive regular emails on the issues at the top of the professional agenda.

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