If you run a small to medium sized business or are thinking of starting one, you'll know that directing the majority of your time and resources into taking it forward is essential to success. But with other issues to think about including setting up systems, ensuring you have the right documentation, finding office space and reliable staff and marketing the business, it can be all too easy to get distracted from focusing on your company's core strengths.

A report uncovered by BT Business last year, revealed that the government should give more support to UK small businesses. With hundreds of thousands of new businesses started every year, the people behind these start-ups should have a forum to consult for advice. For that reason, small business expert Mick Hegarty from BT Business is joining us for an exclusive web chat designed especially to help you get the most out of your business from the very start. Mick will be on hand to talk about the dos and don'ts of running your own business. He'll also be dispensing expert advice about the best information and services that are available to help you maximise productivity and minimise wasting time fretting over nuts and bolts. Log in to the chat to find out how Mick's inside knowledge can turn your small business into big news.

For more information visit www.bt.com/business

H: Murray Norton, host
M: Mick Hegarty, BT's small business expert
K: Kate Welsh, chief executive, Acumen
J: John Dunsmure, managing director British Chamber of Commerce

H: Hello and welcome to the Business Show, brought to you today by BT – I'm Murray Norton. Now, if you run a small to medium sized business or are thinking of starting one up, you're probably aware of the need to set up systems to have the right documentation, to find office space and reliable staff, and then there's the marketing of the business to consider as well. So it can all be very, very easy to get distracted from focusing on what you do best – the company's core strengths. Well if that's you then keep watching because we've got BT's small business expert Mick Hegarty, alongside Kate Welsh whose the chief executive of Acumen, and also the managing director of the British Chamber of Commerce, John Dunsmure who are all here to offer some salient, relevant, practical advice as well as taking your questions. So welcome all, thank you very much indeed for coming

M: Thank you

K: Thank you

H: Good to have you with us.  We've got questions here already guys so let's get underway, a lot of questions coming in. The first one – I'm going to go to you on this one Mick if I may first of all – this is from Simon who says "I'm a complete technophobe, but I've been running a small business for 12 months now, what would you suggest I do to get off the ground?" This is obviously to get a bit more computerised, obviously

M: So I think it very much depends on – was it Simon?

H: Simon

M: Simon's nature of his business, but I think one of the great things now for small and medium businesses is you can start to use the technology much more cost effectively than you have been able to in the past, so I think one of the first things to crack is to make sure that he and the people in his business have, you know modern IT with access to broadband so that he can use the internet, and start using the power of the internet to reach out to customers, to start telling his customers about the products and services they offer, to research their customer's needs and what the competitor are offering, and really start to build on that, rather than splashing out on any significant spends to start with, so try a few things and see what works, and then build on that

H: But also getting the technical help that you need but also the technical hardware – if you like – that you need as well – because otherwise you can spend a fortune on stuff that you're never going to use

M: Absolutely and I think especially in the current economic environment you have to look at all of your spend very carefully, but getting the right infrastructure, getting the right technology is critical to success in any business sector today

H: I can see you nodding sagely there Kate, so let's just talk about this a little bit further because when you are setting a business up it's difficult to know – you learn as the business grows don't you so obviously the technical side, the IT side of it – that's got to grow with you

K: Yes it has and I think the advice I would always give to somebody is to start small and build from it, just as Mick said, because it's all too easy – I'm sure that even with the technology that we've got in our business, we're not using more than say 10 or 15% of its capacity, so why not start with something you know will work.  Nowadays links, your mobile phone linking into your laptop, you could be doing everything just with two pieces of equipment there – and that can make such a difference if you're perhaps wanting to work from home, or starting a business which involves you being out and about quite a lot. Very easy to do, doesn't cost a lot, gets you started and then build from there

H: John, this lack of technical knowledge can hold a business back – can stop it growing that bit further –

J: Absolutely, I mean when most people start out their business they've got a passion, you know sort of for their service or for their product, and that doesn't make them a jack of – you know – sort of on a master of all trades, it makes them a jack of them.  I mean our recommendation would be certainly, you know find yourself a local partner, someone that you can trust and depend, grow into what it is that you're trying to do, but think about what the business is going to be going forward and then sort of talk to your partner about what some of those areas are, and then you'll get the right kind of equipment, and again you'll get the right help and support as you're going through that. Don't try and do it all yourself, you'll just end up spending far too much time and effort on the wrong things

H: Again wasting even more time rather than getting on with what –

J: Absolutely

H: All right, questions in.  James – I can bring this one to you Kate if I may. "What tools can help me starting out with a business?" There must be 101 different tools that you can use, depending on what the business is, but if you're setting a business up, to start a business up, where would you go looking starting a business, as you did?

K: Yes. I think one of the things you can do is actually go to a number of different products that are around, to help you with your business planning you need some sort of structure that will take you on the way.  Some banks will offer them to you if you're already working with a bank, you might be able to get that support through Business Link, you might be able to get it from websites like BT's – lots of different opportunities to do that, but actually start with something that gives you a bit of a structure, that takes you through the different things you need, because you need first of all – as John said quite rightly about your passion for your product or service, that's the core of what your business will be, but then see where you're going to fit in the marketplace that's out there, who else is out there in that – so you need to do some market research, start to build the financials and the planning that you're going to need with that, and a bit of structure that will help with that with one of those business plans and toolkits is a really good way to do it

H: Mick, bring you in on this

M: I totally support that; I mean I think as we said earlier starting out with the basics. What we're trying to do is we're trying to help businesses understand how they can use technology, and our job is to try and justify it, so a couple of times during this we'll probably refer to our main website which is bt.com/insight which is really about information about how you can run your business, case studies, and we've got guides there, for example one on how to start up your business, and one which demystifies technology which could make it easier. We used to say in the old days all you needed to run a business was a bank and a phone because then you could reach out to customer and transact with them, I think the third element you now very much need to do is to have some way of being online, whether it's broadband in your office, or mobile broadband or something like a Blackberry where you can work when you're about. But it's that ability to communicate with customers, communicate with suppliers, always be in touch, and run your business in a fairly low cost but real time way, so you're always on top of what's going on

H: Ok, good points.  Siobhan's got a great question now, I'm going to bring this one straight to you as managing director of the Chamber of Commerce – "is it a good time to be starting a business?"

J: Absolutely but to be honest there's no bad time really to start a business. I mean yes we're probably facing a sort of economic downturn, things will be difficult, things will be tough, but that's a good time for opportunities and that's sort of when a lot of people can rise through some of that, and a lot of people will make that decision now, whether it's through redundancy or whether it's you know their business could be that they work in could be questionable, now's the right time to think should I be doing something for myself? But if you're going to do that you've got to have a recommendation to sort of – think very carefully – this is not something that you just do because I think it might be the right thing to do – as Kate says, she's right, you have to have a passion for whatever it is that you do, but you've got to do a lot of market research, think very carefully about what you're going to do, I mean that's part of the reason that we've recently launched our business start-up pack to help businesses and we were asked the question well why now, you know sort of why at this particular time?

H: Sure

J: And our answer was there's no bad time, so how do we help those businesses do that and get over those first very difficult hurdles?

H: With the help that I'm seeing in front of us here, there's almost no excuse for not having the information that you need at your fingertips. It's all available isn't it?

J: It is, absolutely

H: It's just being aware it's available. All right thank you for answer that. Let's move to Steven from Harrow, thank you very much indeed. Steven says, "I want to increase my awareness of my business.  I know marketing is important but there are so many different forms of media, what do you think would be the most successful?" Online or just local press? How do I get out to people? Mick?

M: So I'm actually the marketing director for our business sector in the UK and –

H: Ideally suited for this

M: I've faced many of the same challenges as he does. There are a very wide number of channels and media available to you. Some are very expensive and so again as always I think it's being pragmatic and starting out with those where you can see a quick return and then start to build on it, and depending on where his business is, I mean a few things I would look at is local press may well work, but people are very pressed for time and as we've seen from newspaper circulations, less and less people are finding the time to read newspapers. I think online is a really sensible place to start because there are so many things you can do – you can start researching your competitors and position yourself better against those, you can join into various communities, you can see what customers and potential customers are saying about themselves, and you can start to advertise your business. You know we're trying to make it easy for businesses to start so with for example BT Tradespace you can join for free and you're instantly part of a community of 160,000 small businesses that have started to communicate online in that community. You can start a webpage for free and start to get your business known, you can start to look at how you research marketing and I think the final thing I'd suggest is think about PR, because PR is one of the most effective channels you can have and it can be very low cost. All you need is imagination, creativity and a real bit of insight about your business, and if you haven't got those you'll probably have challenges anyway!

H: Ok, good answer.  Harry in Oxford – "I run a small bakery with my wife. We want to move the business forward and employ a new member of staff. What's a good rule when it comes to deciding on what wages I can pay?" Well that's a tricky one, I'm going to give that one to you here, John and Kate first

J: Kate?

K: I'll start. Wages is all about two things really, one is about being sure that you're actually complying with the legislation which is the minimum wage, so you have to be absolutely certain depending on the age of the person that you're paying absolute minimum for the minimum wage.  But then there's market conditions and what's actually prevailing in the local area. So the thing to do is have a look at the local job ads around and about, see what other sorts of positions, what are the bigger bakers actually paying their staff, because you need to be sure that you're paying at the right level to keep people, not just to get them initially and have them move on very quickly, you want to be sure that it's that – and it's not just the wages, it's that overall package. Working in a small family business is great because you'll probably have a much closer relationship with, you know the man and his wife who are running the business, a much better place perhaps for some people than being in a very big chain, so play on that because those are added advantages too

H: All right, John?

J: Yes I think sort of that individual if you like will give a lot of loyalty to the business as well, so as Kate said I think you have to identify sort of what's the right kind of person that you want. Don't promise them something that you can't deliver, that's certainly not the right thing to do, but certainly look at what are the things you could do to make the job more interesting, whether it's in the front of the bakery or whether it's somewhere else within the bakery, think about some diversity within that, you know, also look at the things you may be able to help the individual with as well, it's not just about wages, it's about some of the other fringe benefits – maybe some free bread, you know may be an answer

H: It could be anything really couldn't it? Whilst we're talking Kate we're pretty aware of the Chamber of Commerce and we're pretty aware of BT, but Acumen, you're chief executive of that, could you just tell us a little bit about that, because you're here very much if you like, the case study of the shining example of the great business start-up

K: Yes. What Acumen is, we're actually a development trust and we're a social enterprise, we're a business that what profits we do make are ploughed back into the community and we're based up in the North East of England, we're working across most of the region now, and our main business is about engaging people in our local communities and encourage them into work or starting businesses, or getting into learning, so we work with a lot of public sector contracts, so one of the things I have to deal with is the whole procurement, how you right tendors, how you actually get the right sort of bids together to be able to get the business, as well as then running a number of small subsidiary businesses, so we have 7 small businesses as well that run out of that, so everything from a nursery and landscaping company to a small café to a transport training business that does forklift truck training, an IT business – lots of others. So kind of a bit of a serial entrepreneur I think with what's going on

H: Yes you certainly have.  Thank you for explaining that.  John in Bristol, hello John, he's got a question for John as well – "how important is it to do market research before starting up a business, and is there an easier and more effective way than standing on the street asking questions?"

J: I certainly wouldn't recommend standing on the street and asking questions about – for sure you have to do a lot of market research on a sort of – and the internet is a fantastic vehicle now for finding out so much about different things. But I would also try and get as much expert advice as you possibly can as well once you've done that.  I mean Kate mentioned the Business Link, you could go along to your local trainer – there are different organisations that are there to try and help and support people. But the sort of – you really need to be totally prepared for what it is you're going to do. Do as much homework as you can, sort of do as much market research as you possibly can, but don't be daunted by some of the things that you find out. If you still care about it, if you're still passionate about it then just carry on

H: And chances are there are other businesses that would be quite happy to offer advice as well

J: Absolutely, I mean Chambers of Commerce run lots of different working events, we're looking at the possibility of business growth clubs which is bringing people together of a like mind, and it's amazing how people can mentor one another and learn from each other about how does this not happen, how can I do this in a different way? Etc, and people are more than willing to offer that kind of help and support

H: All right. The advice is out there, just go and get it

J:Absolutely

H: As a small business – this is one for you Mick I think – "as a small business owner I am concerned that the credit crunch is amongst us and in the next few months it's going to be a bit too tough for me to cope. What advice can you give?" That's from Darren

M: So – I mean we at BT are not economists so we're not experts in terms of what's going to happen in the economy, but we do talk – we've got a million business customers who we talk to, and we are seeing, you know obviously what we see in the papers, we are talking to our customers that many of them are being effected by an economic downturn, we're in a summer period now, as we go into the autumn when everybody comes back from leave you know our feeling is it's going to get tougher, and there's a couple of very basic, simple things. The first thing is obviously to absolutely control your costs very quickly. As a small business the main reason that businesses fail is around cash flow. So absolutely making sure that you've got no money going out of your business that you don't have to. It is a must. There are two ways that you can do that. The first is looking at the costs you've got now, the deals you've got now and say well if I bring these together, you know under one roof, have fewer suppliers or cut back a bit, you know can I save money? And that's certainly one thing that we're talking to customers about and saying can we offer them better deals. And secondly it's also about looking at what costs can you get rid of, so for example us as a communications and IT company we're saying if you help people to work flexibly or work remotely, if you start to use conferencing then maybe you don't have to have travel costs or petrol costs or some accommodation costs, so controlling your cost is the first big thing. The second big thing is that small businesses, we think, are fantastically positioned in a downturn, because they're agile, they're responsive, they're entrepreneurial, they can pick up opportunities that others are missing, and when we talked to our customers we surveyed them and 45% of them said – 45% of potential start-ups said they wouldn't let a recession deter them from starting out

H: Right

M: And 44% said they would market their businesses more aggressively, so it's about how can you – particularly using the internet – market your business and drive your top line so that you defend your profits in a harder time

H: It's being more agile, it's that secret of a small business, and it means you can make huge changes very, very quickly

M: Absolutely. Based on numbers. I mean that's the key thing, watch the numbers every day, you know and don't assume maybe it's because people are on holiday my business is slowing down, you've got to watch your cash and make sure that you're on top of it

H: And be frugal

M: And be frugal

J: I think businesses will also find that their customers don't pay them just as much or just as easily sorry as they did before. So I would certainly recommend the first thing you should do is to your major customers – talk to them about the situation that they're in and also talk to your suppliers so you're looking after that total supply chain. But you know don't run out of money whatever you do, that's the most important thing, that's where businesses sort of get into real trouble. And I think if you're fair and you're reasonable with your customers – and your suppliers – most people will go along with that, far better to be open and upfront.  Doesn't mean to say you're in trouble, doesn't mean to say your customers or suppliers are, but at least everybody's then aware of it in the supply chain

M: That was another thing that came through from us, you know basically people do business with people, so customer service is paramount, so if you are scrimping and cutting back in certain areas don't – make sure you don't neglect your customers

J: Absolutely

M: Because the customers you stick through with harder times where you really understand, ok maybe they had some temporary difficulties, how do you work through it together – those will be loyal customers for many years to come

J: And market your presence even more effectively in this particular time as we've said

K: And I'd like to add I think about your relationship with your bank is highly important, and trying to hide difficulties from the bank is not the right way to do it

H: No burying your head in the sand then

K: Yes, open and upfront and start the discussions with them. They understand the world that's going on, it's not in their interests to close down a business that's viable, but I think the other thing is being realistic with yourself, if your business really doesn't have a future, there's a point that you have to say "stop"

H: It's like the whole honesty question isn't it?

K: Yes

H: Does this really work?

J: Well that can be difficult for people to face because you know they really care about it, you know and there's nothing worse than realising maybe this is going nowhere, but you have to take that hard decision

M: And as we all know from a thousand success stories, you know most people who have built successful businesses have at least one failure before them in the past

J: Absolutely

M: So you know making the right business decision, even though it's very painful, but if you just see the numbers aren't going the right way and making a hard decision really can set you up with a lot of experience for the next time

K: Been there, done that, got that t-shirt – it's true

H: We have had so many questions thank you very much indeed for all the questions that we've had, we can't get through every question possible, and we've tried to put as many together of a similar ilk as we possibly can. Just a couple of questions to go, and this one is from Sarah, Sarah says "I'm setting up a business from home and would love some simple tips as to how I can help my small business setting up from home." You referred to this earlier on, a little bit of flexible working, maybe working from home, this is happening a great deal more, a bit of flexibility for the staff or if you're a single business
 
M: Yes, working from home is I think a growing topic and businesses starting from home and it's one that we think is quite hard to see in some of the numbers because the stats, you know the government stats don't pick up at all well. Every start-up we look at has typically two years before it officially declares itself as a business, which is researching while people are doing other jobs, while they're maybe at home with children or what have you.  And they're doing work in the evening, building up confidence, business knowledge. So I think from the latest numbers we've seen, we think that more than half of the businesses that start up now are starting up in the home, and the great thing today is the tools are available to you as long as you have a PC, as long as you have broadband, and as long as you have, you know the ability to start using the internet to start finding out about business and starting to grow business at a very low cost, you've got no accommodation costs you may well have broadband already at home for family and entertainment reasons, and you can use those tools to actually run your business at a very low cost while you start to build up, you know revenues and customers

J: We've done that as well very effectively with a PR company. The lady in question wanted to work from home, she had a young family, and she wanted that sort of lifestyle you know decision that she had to make.  We pay for her services you know more or less as we use them. She can work 24 hours a day, 7 days a week to suit herself and her family. She works with a network of consultants that some of them are in France, some are in the States but it doesn't stop us from getting that service and that's total and utterly just because of the capability with the technology that's there today

K: I think –

H: Technology but discipline

K: It is. What I was going to say what's really important and I've been a mum with young children at home is setting aside somewhere in the house that's different, because if you try and do it right in the middle of the hubbub of all the other things you can get very easily sidetracked, so it's about having the kind of space that's work, and there are people who say oh I can just do it in my pyjamas all day – no, get dressed as though you were going to work and go to work at home, and those disciplines are really important in doing that

H: Ok we are rapidly running out of time. Finally for all of you, this came in from Clare and from Sarah and from others as well – your top tips if you like for starting up a business or you've got a small to medium sized business at the moment and you want to expand that little bit further. Where would you go from here? John let's start with you

J: Well I think you have to be resolute, it is going to be tough but if you've got the right service, if you've got the right product then you can win through. Don't run out of money as we said earlier on, be open and upfront with your bank as Kate said, with your suppliers, with your customers.  Try and promote yourself even more than you've ever done before, market yourself far more effectively. Be aware that the competition's going to be tougher and harder, so keep your eye out from that point of view, and if you employ people make sure that you're trying to do the best that you can by the people that you employ, because they're the secret of your business's success

H: There we go. Is there anything left for you there Kate?

K: Well yes I think a few things – the main thing for me is about being really clear what your vision is, what you're trying to achieve. You have a passion for the product or service you're trying to deliver but know where you're trying to go. Whether you capture that as a business plan, whether it's in your head, but have a clear picture of where you're trying to go, because if you can keep that in view you will keep moving forward, and the people bit is so important. We've now got to the stage where we've got 80 staff, getting the right people in position to actually help run the business, so I mean from my point of view I can then focus on what I'm best at doing and that's the right thing for other people in their business, is get the right people in place to do that

H: Thank you for that.  And finally Mick?

M: And from me just a couple of things, I mean we talked about a number of businesses do fail in the early stages, they don't plan to fail, they fail to plan, so I think building on what Kate said, be really clear what you're doing and have a plan and stick to it, refine it as you go but have a plan. I think the second thing is use the power of technology to keep your costs low and yet reach out to customers in the online world and market your business is essential. Focus on customer at all times and use resources. You know bt.com/insights is one that we provide which will give you tips on starting a business and demystifying technology

H: Ok, and the website overall in order to go and visit is?

M: www.bt.com/insight

H: Perfect. Thank you very much indeed for joining us, good luck with your business whatever it might be and wherever you might be and join us again next time. Thank you again, bye bye