Small businesses provide the backbone of Britain's economy but these tough times mean a bumpy ride for many. For start-ups, the climate can appear especially daunting. Fortunately there is a wealth of advice, information and help available for SMEs that need assistance in areas ranging from finance to networking, from telecoms to training. By logging on to our webchat with Karen Hanton, one of Britain's leading entrepreneurs, you can find out how to locate it, how to make the most of it, and how to make big savings for your business.

Named as one of today's top 30 entrepreneurs and the founder of toptable.co.uk, Karen Hanton understands the problems that today's small businesses face. Karen provides expert advice and coaches start-ups and existing enterprises that want to cut costs and maximise networking opportunities such as seeking assistance from Small Business Gateway, friends, businesses in their sector and the government.

In the show she will also address queries small business owners have about identifying and minimising unexpected costs for start-ups. As well as that, she will tell you about a business loyalty programme that's already attracted more than 500,000 businesses. The Nectar Business programme allows you to collect Nectar Points on your daily business expenditure which can then be used to reward your business or treat yourself or your team. Log on to the chat to find out more.

Entrepreneur Karen Hanton joins us live online to discuss help and advice for small businesses and start-ups, and the Nectar Business programme.

For more information visit www.nectar-business.com

H: Host, Jayne Constantinis
K: Karen Hanton, founder toptable.co.uk

H: Hello and welcome to the Business Show brought to you today by Nectar Business, I'm Jayne Constantinis. Now then, small businesses provide the backbone of Britain's economy but these tough times mean a bumpy ride for many. For start-ups the climate can appear especially daunting. Fortunately there is a wealth of, often untapped advice, information and help available for small and medium sized businesses, in areas ranging from finance to networking, from telecoms to training. Well I'm delighted to be joined today by Karen Hanton, founder of TopTable.co.uk and one of Britain's leading entrepreneurs. She's here to share her experiences of running a successful company. Karen, welcome to the show

K: Hello, hi

H: Thank you for coming in to talk to us

K: Thanks

H: And of course we're live so if you've got any questions for Karen type them in the box on your screen, with your name of course, send it to us and we'll get through as many as we can during the course of the show. Karen what was it like for you, starting off in those heady early days?

K: Well I mean I think in the early days of any business at any time it can be incredibly lonely, and it was, and you sort of start everything off on a bit of a shoestring, and you do the tiniest bit of research and you just hope it will work, so –

H: But you must have had that crucial ingredient for all entrepreneurs – passion? And self-belief?

K: Yes of course, I mean I think any entrepreneur has to have that. It is about passion and belief. I think you know they say about entrepreneurs that you're great on the big picture and not great on detail – the truth is you have to be good on it all, small business need an awful lot of effort put into them as anybody starting will tell you

H: Yes, it's certainly not a 9 to 5 business is it –

K: Not at all, it completely takes over your life so you have to be prepared for that, so – but the other thing is there is an incredible amount of common sense involved, and so being an entrepreneur, I think is having a good dose of common sense. So maybe more people are entrepreneurs than they actually know

H: Yes. Of course we are in the midst of particularly difficult times for both established and up and coming businesses, and in fact we've been out and about and we've spoken to a few small businesses locally, to see how they're faring in these very troubled times. Let's see what they had to say

Video Footage

"I think running a business in the current climate is ok, because I'm busier now than I was this time last year"

"Lot more busy 6 months ago, now business gone down 20%"

"I think people are still spending money on clothes, women still need sort of fashion"

"Business is growing slowly. It should be growing quicker. We should actually be doing quite well out of this recession because we sell the same as other people, but cheaper"

":They don't come in, and when they do come in it's for little bits and pieces, whereas before it was for big, big items"

"Yes it's going really, really well"

"Over the last few weeks there has dropped, the trade has dropped a lot"

"I actually think that people are going out drinking more"

"Bonuses maybe, it's not going to be such a big bonus this year"

"Yes people are quite stressed out at work, people need to be united a little bit more, so we're getting a lot of companies doing an awful lot more team activity than we have previously"

H: Mmm interesting mixed bag of responses there, some people saying that at the moment things are ok, I fear we're heading for troubled waters though, don't you?

K: Yes I think so. I mean – I think to a certain extent you know we have had very good 10 years, we have had good run at it, and in some respects I think we're all very slightly in denial about what we're going to face, and 2009 I am convinced is going to be a tough year, I think we can all see the headlines of sort of job losses and so on, so I think we're all going to be quite challenged, and let's face it, it's probably more sensible to prepare for it, and even if it doesn't happen, then we'll be in an even better position, so I think definitely some preparation for choppy waters ahead would be sensible

H: And in what sort of terms? What are the particular – we hear a lot about very big businesses

K: Yes

H: But for the small and medium sized enterprises –

K: Yes, yes

H: Where are the areas they should be particularly concentrating on?

K: Ok. I think a very automatic reaction in difficult times or expected difficult times is to heavily, heavily cost cut, and I do think thrift is very, very important so yes I mean I think cost cutting sensibly is going to be good. I think smart marketing, you know there is an argument to say that when times are difficult then actually you should take a very close look at your marketing activities, and even increase them. And when I say increase them, it doesn't necessarily mean increase spend on marketing, there are some very, very simple things that you can do, that don't cost any money. Like for example it's much, much easier to get an add-on sale from an existing customer, so somebody, you know whose already bought something from you, you have a better chance of selling them something else, because it costs money to get new customers. So that is one very, very simple way. Or recommendations, getting people to recommend your product, another very simple way that isn't at all costly, to get more people through the door willing to buy your product

H: This is music to my ears, because the small business that I run is actually a marketing consultancy

K: Ah, there you are

H: And our raison d'être is smart, smart marketing

K: That's it, yes

H: And you're right, it doesn't have to be about spending huge amounts of money

K: Sure

H: It's about thinking very carefully about your audiences and your targets and so on. What else, so that's – marketing is one thing. What else in the cost cutting money saving line?

K: Oh I mean you can just look at everything. I mean if you look at – I sort of quite often think of any size of business in fact, a little bit and like an extension of how you run your household, and you just have to look at every single cost, from every time you switch a light on, so energy costs and obviously the oil prices have been very high lately so energy and energy prices have gone up enormously, and this effects everyone, doesn't it? Every single business uses energy to heat and light its premises. If you have a business say where delivery is involved the cost of you know, filling up the tank in your van is going to have gone up, a lot of catering businesses are affected because if you're cooking food you're using energy. So I think look at every single supplier that you have, and you know you've got to be looking at ways of trying to either reduce the costs or even in some cases, you know, review and think of whether you should be changing suppliers

H: Interesting moment now to go back to the people that we spoke to earlier, the small businesses locally because we asked them as well about cost cutting and what they were doing to try to reduce their overheads. Let's have a look at what they have to say

Video Footage

"We just have to cut back mainly we order less"

"I go for a lot of different cash and carries to get cheaper price"

"We've been looking at making little savings wherever we can"

"Always trying to get cheaper deals with our suppliers"

"It's just a case of trying to do as much as you can yourself rather than employing other people to do it"

"Don't live above your means"

"I think there is help for small businesses if you know where to look"

"I feel at the moment there's not much support at all, it's mainly for the bigger businesses"

"Any advice on savings of course at the moment would be very, very welcome and helpful"

"If we had some free advertising obviously that would be a great help"

"Any sort of you know free advertising, local advertising would be fantastic for us"

"I've heard there are schemes about – to cut costs but I'm not really that aware of them to be honest"

H: Mmmm that's interesting. That guy there, talking about not knowing where there is support and help and advice and so on – there is a lot of help and advice out there, particularly on the cost cutting side isn't there?

K: Yes definitely. I mean I think one of the things that's changed so dramatically in the past 10 years is the fact that information and advice is just much easier to track down, so we have a great tool in the internet, so just about everything you want to find out you can access it very, very quickly, but you know there are lots of places that you can go to for advice and a couple of places that I think are particularly good I think Business Link is very good. Government sponsored, some very good people running Business Link who have been involved in business so they are very practical and they know how it all works so that's a very good place. But also part of the Nectar Business Program, there's a very good section to that which offers advice on all sorts of topics that you need to know about business, if you're starting up or you know even at quite an advanced stage, some very, very good advice readily available as part of the Nectar Business Program

H: So what is Nectar Business

K: Ok

H: Tell me a little bit about that

K: Nectar Business Program, I mean it is something that definitely wasn't around when I was starting up my latest business Top Table, and I wish it had been because one of the things, and we've touched on this is the loneliness that you feel, and really the lack of you know quite frankly the lack of negotiating power, and all the other things you feel as a very small company. And the Nectar Business Program is in a way giving small businesses, small and medium sized businesses much, much more buying power and through a range of suppliers covering just about everything you can think of for your business, so you can have access to stationery, you can have access to reduced price energy from EDF energy. Viking Direct for stationery – everything you might need and you feel like you've got a bit more buying power of a much larger business

H: And you're getting –

K: And that you're part of a club

H: Yes

K: You get lots of advice on all sorts of topics that you need on top of that

H: Yes

K: So really excellent I think for small and medium-sized businesses

H: And it's saving money without doing – without doing without anything

K: Completely

H: Which is what we're after isn't it?

K: Absolutely right, so yes I mean I think there are lots and lots of – lots and lots of places for advice, but that is the real – this is a real practical thing which you actually can save proper cash

H: I like the idea of feeling that you're part of a bigger organisation as well

K: Yes

H: Because I know for certain in work that I do with other small businesses that thing – they do feel very isolated. Things like late payment, you know they're victims of the big suppliers often

K: Oh yes

H: Not taking them seriously

K: There is definitely something about being part of a club if you like, like this, which does make you feel a little bit more empowered and a little less lonely and helpless

H: Yes. Let's take a question because we're getting lots in and I don't want to – having asked for them we don't want to ignore them! Sean has said he's working out of his bedroom for a couple of years

K: Good for you Sean

H: Haven't we all? I'm out of my dining room actually! But now ready to consider his own premises, aside from insurance, what other hidden costs should he take into account? That's quite a big step isn't it?

K: Oh yes, it is, it is, it is and I think Sean should think and think again at the moment about taking on premises. However I think the best bit of advice at the moment is to bargain very hard because you know, there are lots and lots of bits of office space available and anxious landlords who want to let them. So make sure Sean you get a nice, nice long rent-free period, and don't take on too long a lease because things could get quite tricky and you want a lot of flexibility. You want to make sure that you're able to get out of it if you need to or want to

H: Yes

K: So that would be my advice to Sean

H: Yes. And stay in the bedroom as long as you possibly can

K: Stay in the bedroom as long as you can. I stayed in my kitchen until there were 12 people working on Top Table

H: No!

K: And –

H: What they were all in your kitchen?

K: It was a bit like living in a commune, but yes until we – until we were really sure that we had something as a business, so I don't think you need at all be embarrassed or shy about working out of your own house, it's a great idea

H: And it makes for quite comical moments doesn't it when you're having your sort of informal board meeting round your kitchen table –

K: Oh yes, sure

H: In your pyjamas and the office phone rings and you have –

K: Exactly – and the dog is having your lunch

H: To say "I'll see if she's available". Jessica has sent in an interesting comment. She finds overheads like gas, electricity bills and so on

K: Yes

H: Eating up her profits. What can she do? Obviously very topical at the moment

K: Yes. Yes of course, everybody's energy bill has gone up. Now one of the things through the Nectar Business Program is that EDF energy are part of the program, and one quite nifty little thing, I think is that if you read your own meter you get some extra points, just for reading your meter, and the fact is, I suppose, if you read your meter yourself you're even more aware of how much energy you're using, so I would say, you know very, very close attention to detail there, and I would definitely sign up for the EDF Energy one to get some extra points

H: So just explain to me in a bit more detail how the points thing works? You gather points and then you can spend them on –

K: You do – yes, exactly, so you – for kind of all the supplies and services and so on that you, that you take an order through the Nectar Business Program, and you accumulate points. Now what I really like about it is the fact that you can then spend these points on things for your business, so if you need computers, if you need telecoms and so on, you can spend them on that, but one of the things I really believe is that – at any time, but especially at times when things are a little bit of a downturn and so on, you absolutely have to motivate your team. And one of the really good things is that some of the redemption kind of, if you like not prizes, but you can redeem points, for days out and so on which you could use as a team-building exercise, or a reward for somebody whose done something really well. So I actually think that the redemption part of it is very well thought out too

H: Now very interesting you say that because Lee has sent in a question which is absolutely pertinent to what you've just said. "When looking at cutting costs, should he be cancelling the Christmas party this year? If not, how can he make it as cost-effective as possible?" I think you've answered that –

K: Oh yes

H: This is the moment actually to motivate people

K: It is and you know interestingly Top Table, we book restaurants online and we also do a lot of work on booking events, and Christmas parties are very much at top of mind for me at the moment, and a lot of the big corporate have cancelled their parties, and I guess we can understand it, you know if people are having to lose jobs and so on, it isn't really right and perhaps to be having a big, lavish event. However we did do a little bit of work recently with a psychologist who said the very last thing you need to do is cancel your party because it will seriously demotivate people. But I think, and what you need to do is still have a party, have a little one and certainly at Top Table you get lots of 50% off deals and so I think still have a party, but you can do that in a thrifty way as well

H: Maybe have it in the office and get people to bring food!

K: Totally, well that's very team-building – yes that's very team-building

H: It's funny isn't it, I read something the other day about how we as a nation seem to be embracing this new spirit of thrift and actually quite enjoying it

K: Oh yes

H: Because it's what we are at heart

K: Oh we are, yes

H: Aren't we?

K: Yes. I think the British – the British definitely thrive under a bit of pressure like we have –

H: It's like the war spirit isn't it?

K: It is a bit, it is

H: And the thing of operating from your bedroom has provoked Emma, who's from Enterprisenation.com, you probably know them to send in just a comment really – "one of the best ways of keeping your cost down is to operate from your bedroom or your kitchen"

K: Good

H: But she also mentions that Enterprisenation.com are doing a webchat at midday, so soon after this, just time to make a cup of tea in between on the topic of making money online

K: Oh great

H: So that'll be interesting

K: I'll have to tune in to that

H: You hang around, yes. Let's also just consider this question from James because you mentioned events a few minutes ago. He's thinking of starting his own small events company. Where can he go for help and assistance? So go right back to those early days, he's got the business plan on the back of an envelope

K: Ok

H: What does he do now?

K: Well I think more than ever before research must be done. Into the business area, especially the business area that James is choosing, because you know a lot of companies are cancelling events, and cutting budgets. So unless it's an area that is not going to be affected by that, I think James needs to think again and again. And because it could be quite a tricky time for that type of business. So research, now this is another kind of thing that can be quite intimidating, because when you talk about research, you know we all have visions of you know big management consulting firm, charging hundreds of thousands of pounds, and we have never done, and probably never will do anything like that. Research can be very simple and it can be very cheap, and it can even be free. If you use your friends, neighbours, family, research is only about putting yourself in the position of a customer for your intended business. Checking out a bit of competition and trying to validate whether you really have got a business proposition or not, so James I recommend you do that. Just make sure that you're going into the right area at this time

H: Yes. Certainly when I'm advising businesses who are maybe launching a new product or whatever, it's all about what is everybody else doing, and have you got something that is different

K: A unique selling point

H: And is it right for this time and this climate

K: Yes, yes

H: And what can you offer that is –

K: Absolutely

H: Not currently being offered out there. Well I hope that's good advice. Tim Carter says, just to bring us all down for a minute, is it, "it is all doom and gloom with the banks and everything. What chance do small businesses have, do you think?"

K: Oh enormous. I think that Britain is – we're a nation of shopkeepers and small businesses, and to be frank I think small businesses will pull us through. I think big businesses have had lots of challenges for all sorts of reasons, I think they've had their day for the moment. I think it's our turn. I think we've a very thrifty mentality, I do think, we mentioned this before, the British have great spirit and so I actually think that small businesses will power ahead next year, and there's one bit of advice which might seem unusual after all the banking crises of the last few months – I think small businesses need to make their bank managers their very best friends. For a number of reasons, you probably need money, so that's a good enough reason. And secondly the bank manager is like an unpaid consultant. He is working with a lot of businesses like ours and like yours, and he sees all the pitfalls and he gets a good visibility on the outside world, and just remember that there's only one person who needs your business to work more than you do, and that's your bank manager. So don't be afraid to ask him for advice, to ask him what he thinks. He or she – they are great sources of free consultancy

H: Fantastic, that's a really good tip and I'm going to ask you to add two more tips if you would to that – final bit of advice for people just starting up or in the early days of a new business. Two other top bits of advice?

K: Ok, top bits of advice – one we've touched on earlier, definitely do some research, however simple. Never launch a business without at least looking into it and checking out whether it's a ghost of a chance of working. And my last bit of advice I guess would be you must, must be prepared for it to take over your life, and if you really don't want it to take over your life, business might not be for you

H: Fantastic, thank you very much, it's been really, really interesting –

K: Pleasure. Thank you

H: Chatting to you, thank you for sharing your experience with us. And thank you for joining us, I hope it's been useful. If you'd like more information about the Nectar Business Loyalty Program that we talked about then you can visit the website of course which is nectar-business.com. Thank you very much for watching, see you again soon. Bye bye

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