Steps to a Successful Small Business

1. Start Smart.

Identify a niche. Don't compete to be the lowest cost provider. Look for what makes your product or service unique and adds a special value for the client and charge for that value.. Start with what you know and like; start a business that has meaning to you. Keep in mind that we don't know what the future holds, many of the jobs and businesses of tomorrow don't exist today. You can create your own success.

Now is the time to dream. To start smart, you should like the idea of the business. The way to earn a good income is by serving clients well, making their life better – it's more than filling a need in the marketplace. To succeed you want to test the idea to make sure your potential clients like the idea too. Test your ideas.

2. Plan Ahead.

People often ask me why bother with a business plan? Look at the lottery as an example. You may get lucky and get the winning ticket… I'm a risk taker...but not that much, minimize the risk of going into business and maximize your potential for success. Take the time to write a plan of how you get from point A to point B. A plan gives you a clear future focus and increases your chances of success.

The first rule of a start-up is put some of your own money in the business. As the owner you must be willing to capitalize the business. The second rule is put as little of your own money as possible in the business. Prepare your plan and look for funding for your business from multiple sources, which can include a business loan or business line of credit.

Don't go it alone. Plan ahead now to build your team. No one has all the answers. You get more ideas and information by building a successful, supportive team that can help you plan ahead.

3. Set up Systems.

The most basic system every business should have is a good financial system. Ask yourself how I am going to generate enough income to support myself and my family. Begin here. Put together a personal budget, so you know what it costs you to live. Now, you can move on to the business budget and sales planning, so you can see how many sales you need to break even and make a profit. The start-up expense plan, operating budget and your accounting software are vital to your success.

4. Seek out Sales.

The daunting question is how you go about seeking out your first sale. Recognize that since you don't have a big ad budget to be seen by everyone, you need to target a niche and get connected in your market community, be it local, regional or national. Get out and talk to as many people as you can. Join organizations that would have clients for your product or service. Become a visible part of your market, and then ask for the sale. You begin the sales process with people that you know. Yes, it's okay to start with friends and family as your first customers, and then broaden from there.

5. Aim for Growth.

The basic tenant of creating a company is that you own the company. You are not just creating a job for yourself. It's less risk and less investment to get a job. Building a business is creating a company that is more than the job itself. Think about the future. How large do you want the company to be in terms of sales, net profit and employees? Your answer to each of these questions will influence how you grow. There are varying costs and profits associated with growth. It's important to make a deliberate choice early about how you want to grow your company.

6. Leverage Opportunities.

Good luck. Good fortune. Good timing. All play a part in business. As a business owner, be very clear about your core focus for the business and how it serves clients. Your core business is what pays the bills. Then, as an entrepreneur you are about opportunity. When you see a potential opportunity, measure it against your core business focus. Good fortune is great, when it matches your vision for the business. Always consider if a good opportunity is the right fit for your business. If something looks great, but it's not in sync with your long-term plan and budget, think carefully before committing your company's resources.

The Working Time Regulations in the UK.

Frequently Asked Questions

The Working Time Regulations (WTR) came into force on 1 October 1998. The Regulations implement the European Working Time Directive and parts of the Young Workers Directive, which relate to the working time of adolescent workers (workers above the minimum school leaving age but below 18).

Worker

A legal term that goes wider than employee. The difference is that an employee either has, or is entitled to, a contract of employment, someone who is a worker but not an employee works for someone else but usually on the basis or providing a service. Strictly speaking all employees are workers, but not all workers are employees. In practice however worker is often used to describe those who are not employees.

Directive - a piece of European Union law, many of which apply directly in the UK.

Employment tribunal

Special courts of law which hear employment cases, for example, sex discrimination, unfair dismissal, non-payment of National Minimum Wage

1 My employer wants to have a 52-week review period rather than a 17-week review. Should we agree?

Under the Working Time Regulations, the 48 hour average working week is normally calculated using a 17 week reference period. This can be extended up to a maximum of 52 weeks by a collective agreement or workforce agreement, if there are objective or technical reasons concerning the organisation of work. An example of where such an extension might be useful is where workers are on annualised hours contracts.

A collective agreement is an agreement between the employer and an independent trade union. A workforce agreement is between an employer and the duly elected representatives of its employees or, in the case of small employers (i.e. those with 20 or fewer employees), the employees themselves. Workforce agreements are only allowed where there are no recognised unions.

2 My employer does not keep records of my working hours. Is this permitted?

Employers will always need to keep records for workers who are paid by the hour for payroll purposes. They are less likely to monitor unpaid overtime carried out by salaried staff, and the law on working time is slack in this area.

The Working Time Regulations were amended in 1999 and changed the requirements of employers to keep records.

The position now is that:

• Employers need to keep records that show that the weekly working time limit is complied with. It is for the employer to determine what records need to be kept for this purpose. They may be able to use existing records maintained for other purposes, such as pay or make new arrangements.
• Employers do not have to keep a running total of how much time individuals work on average each week. How they monitor workers' hours depends on particular contracts and work patterns.
• Employers need only make occasional checks of workers who do standard hours and who are unlikely to reach the average 48-hour limit. However, they should monitor the hours of workers who appear to be close to the working time limit – and make sure they do not work too many hours.
• Employers need to keep an up-to-date record of the names of workers who have agreed to work more than 48 hours a week.
• Employers must offer regular health assessments to night workers. They should keep a record of:
• the name of the night worker
• when he or she had the assessment and
• the result of the assessment.
• Records must be kept for 2 years.
• Employers do not need records for rest breaks, days off and annual leave.

The 1999 amendment had the practical effect of exempting unpaid overtime from the Working Time Regulations, but in 2006 the position was improved by a successful case taken by the European Commission to the European Court of Justice. As a result, it is now once again clear that 'partly unmeasured working time' counts towards the limits in the Working Time Regulations.

Partly unmeasured working time would include the unpaid overtime worked by middle managers and other white-collar workers as long as they are required to work extra hours as part of their job. Senior managers and executives who genuinely have control over their own working time are still exempt from the limits.

3 The HSE inspector is coming to investigate our compliance with the Working Time Regulations. What should I do if he or she calls me in?

You should co-operate with the HSE inspector.

The HSE has responsibility for enforcing the requirements on working "limits" and associated matters in the Regulations.

For "entitlements", e.g. annual leave, and rest breaks or rest periods, enforcement is through employment tribunals.

The relevant matters for which HSE inspectors are responsible are:

• weekly working hours
• length of night work
• health assessments
• record keeping.

Failure to comply with the Regulations in these respects renders the employer liable to prosecution by the HSE.

In some industries the regulations are enforced by other bodies. Local authorities deal with shops, retail, offices, hotels, catering, sports, leisure and customer services workplaces; the Vehicle and Operator Services Agency deals with HGV and PSV drivers; the Maritime and Coastguard Agency deal with seafarers and inland waterway workers; the Office of the Rail Regulator deals with rail workers and the Civil Aviation Authority with air cabin crew.

4 What are my working hours rights in a nutshell?

Most adult workers have the following rights:

• the right to a break where the working day is longer than 6 hours
• a guaranteed rest period of 11 hours every working day
• a guaranteed rest period of 24 hours once in every 7 days (or 48 hours in every 14 days)
• a ceiling of 48 hours on the maximum average working week
• a ceiling on night work of an average of 8 hours in every 24
• a free health assessment for all night workers with a possibility to transfer to day work (where it is available) if working at night is damaging a worker's health
• the right to 5.6 weeks annual leave.

However, the law is unduly complicated and there are quite a few variations.

• The weekly limit on working time is an average. You can work more than 48 hours in a week as long as your average hours don’t exceed 48. The average is worked out in different ways for different groups of workers, and the workforce as a whole can agree to change the way it’s worked out.
• You can sign an individual opt-out and lose the protection of the weekly limit, but you can reverse your opt-out at any time and regain your rights. The notice period for this cannot be more than 3 months. There is no opt-out from the 48 hour average weekly limit on nightwork or any of the other provisions.

5 Which groups of workers are not covered by working time rules, or treated as a special case?

Some groups used to be completely exempt from all working time rights, and others miss out on some but not all, working time protection. The EU is gradually extending the scope of working time rights, and previously exempt groups are slowly getting full or partial protection.

• Transport staff who are 'mobile', such as train drivers, do not get the same rights to breaks, but do benefit from the 48-hour average weekly limit, and must receive ‘adequate rest’. This also applies to rail staff whose work is linked to railway timetables and ensuring continuity of rail traffic, such as signal box operators. Most transport staff who work at a fixed location ('non-mobile' workers in legal jargon) have full protection.
• Mobile air transport workers are covered instead by the Aviation Directive (i.e., a piece of European Union law, many of which apply directly in the UK).
• Seafarers are covered by a separate directive, and workers in river and lake transport are covered by the Inland Waterways Working Time Regulations. There are also special rules for sea fishermen. You should take further advice if you work in any of these industries.
• Lorry and public transport drivers, i.e. those who must have LGV and PSV licences, were covered by the Road Transport Directive in May 2005. They are also covered by the tachograph rules on driving time. There are no opt-outs in this sector.
• Off-shore workers are covered by the regulations, but the weekly working time limit is averaged over 52 weeks.
• Domestic staff in private households are entitled to rest breaks and paid holidays, but have no protection against working long hours.
• Protection for junior doctors by the regulations has been normalised since August 2009.
• Armed forces and the police are not covered.
• Ambulance personnel, fire-fighters and prison staff are covered, although regulations are waived to deal with emergencies.
• Those whose 'working time is not measured or pre-determined' are not covered. This includes top managers who are free to set their working hours, workers employed by other members of their family and some other unusual jobs such as ministers of religion. This exemption in the European Directive is also the basis for not counting many hours worked by white-collar staff. See the separate Q&A on white-collar work.

There are other groups which enjoy working time rights, but employers are given more flexibility in how to implement them. These include:

• security guards, caretakers and similar jobs
• where the job involves long travelling distances
• where the job ‘requires continuity of service or production’, such as hospitals, media, prisons, docks, airports, post and telecoms, civil protection, agriculture and industries where work cannot be interrupted, such as the utilities
• jobs where there are seasonal rushes such as tourism and agriculture
• shift workers in the process of changing shift.

6 What counts as working time?

Obviously work you do at your workplace under the direction of your employer counts as working time.

It does not include:

• breaks
• travel to work time
• time when you are on call, away from your employer's premises and not working
• training at a college
• time taken to travel to an occasional meeting away from your workplace (eg. setting off half an hour early to get to the location of an away day).

Working time does include:

• paid overtime and some unpaid overtime – see the next question about unpaid overtime
• time when you are on call at your employer's premises, but not working
• training at the workplace arranged by the employer
• time taken travelling to clients - when this is a regular part of your job (such as sales jobs)
• a working lunch.

7 What unpaid overtime counts as working time?

This is one of the most controversial aspects of working time rules, although there were some changes for the better during 2006. The big growth in long hours in the UK, mainly came from white-collar workers who do not get paid overtime for their extra work. Employer lobbying persuaded the government to change the Working Time Regulations in 1999, so less white-collar work gets counted as working time. This resulted in the new concept of ‘partially unmeasured working time’. This is defined as the work you choose to do voluntarily, in addition to the hours set out in your contract.

However, following a complaint by the trade union AMICUS, the European Commission took a successful case against the UK Government to the European Court of Justice. As a result, it is now once again clear that 'partly unmeasured working time' counts towards the limits in the Working Time Regulations. Partly unmeasured working time would include the unpaid overtime worked by middle managers and other white-collar workers, as long as they are required to work extra hours as part of their job. Senior managers and executives who genuinely have control over their own working time are still exempt from the limits.

8 How is my average working week calculated?

For most people, you simply need to add up your working time over the last 17 weeks and then divide by 17. In the jargon of Working Time Regulations, this is a 17-week rolling reference period.

If you were sick or on leave during the last 17 weeks, you start the reference period a week earlier, and make up the missing days from your last week (i.e. the 18th week from when the reference period now starts). If this still doesn’t give 17 weeks, then you keep starting the reference period a week earlier until you have 17 weeks of working days, made up from the reference period and the weeks after it finishes.

Some groups have a 26-week reference period instead, and if there is an emergency, employers can use a 26 week period.

Workers who use a 26 week reference period include:

• security guards, caretakers and similar jobs
• where the job involves long travelling distances
• where the job ‘requires continuity of service or production’, such as hospitals, media, prisons, docks, airports, post and telecoms, civil protection, agriculture and industries where work cannot be interrupted such as the utilities
• jobs where there are seasonal rushes such as tourism and agriculture
• shift workers in the process of changing shift.

If you have not yet worked 17 weeks (or 26 if you are in one of the groups above) then your reference period starts on the first day of work. In other words if you have had your job for 5 weeks, you add your working time since you started and divide by 5.

The reference period can be extended to 52 weeks by a relevant agreement with a trade union or representatives of the workforce, made under the rules set out in the Working Time Regulations (1998). The offshore industry has a standard 52-week reference period.

9 Can the period over which my average hours are calculated be varied?

You cannot agree to change the reference period as an individual, but it is possible to change it by an agreement between your employer and all the staff involved. This can be done in two ways:

• through a collective agreement, between a recognised union and the employer
• through a workforce agreement, where there are no recognised unions.

A workforce agreement requires the employer to organise elections for representatives who can then conclude an agreement with the employer.

There are two main ways that the reference period can be varied through either type of agreement:

• Rather than a rolling reference period, you can agree to count consecutive blocks of time. So the first 17 weeks of the year will be the first reference period, and the second reference period will start in week 18.
• You can agree a longer reference period. Some agreements extend it to 52 weeks, thus allowing very long hours during the peak seasons and much shorter hours off peak.

Don't give away your working time rights for nothing. If you’re prepared to vary your hours in this way to suit your employer it’s only fair that you should get something in return such as higher pay or more holiday.

10 Can I opt out of the 48-hour limit?

Most people can sign an agreement as an individual to opt out of the 48-hour limit (and thus lose protection against working long hours). This must be an individual choice. There cannot be a collective or workforce agreement for everyone to sign away their rights. You also have the right to opt back in, at any time.

Your opt-out agreement may contain the notice that is required for you to opt back in again. The longest it can be is 3 months. If there is no limit, then you can regain protection in seven days. If you are given an opt-out form with a 3-month notice period, you may want to suggest that the notice period is shortened.

Note that there is no opt-out from the 48-hour limit on night work, or from any of the other part of the regulations.

In addition, there is no opt-out for HGV and PSV road transport drivers or for inland waterway and lake transport workers. Separate rules apply to seafarers and air cabin crew.

11 Can I opt back into the 48-hour limit?

Yes, you can write to your employer at any time saying that you wish to regain your right to work not more than a 48-hour average week.

When you signed an opt-out, it may have contained a clause saying how long you would have to wait before the rules applied again, once you had reversed your opt out. This waiting time cannot be more than 3 months.

If your opt-out agreement did not include this kind of clause, then you only have to wait 7 days before working time rules apply again.

12 Can I be made to sign an opt-out?

The law says you must not be forced to sign an opt-out, or treated unfavourably (‘suffer detriment’ if you refuse.

(detriment - a legal term used to describe action taken by your employer against you unfairly, other than sacking you, such as refusing you training because you are in a trade union).

If you are treated unfavourably or even sacked, you can take a case to an employment tribunal. Seek advice from your union or an advice agency.

The law is less helpful if you are asked to sign an opt-out as a condition for starting a job. Strictly speaking this probably should not happen, but there is little in practice you can do about it unless you are in a union.

However there is nothing to stop you reversing your opt-out at any time, and you are protected from unfair treatment.

In practice if you are sacked, you will have a stronger case if you have been in your job for more than a year. This is because after a year you gain protection from unfair dismissal. Specifically, you will be entitled to know why you were dismissed and to challenge the employer in the tribunal, as to whether it followed a fair procedure in dismissing you.

While an employer cannot sack you (or discriminate against you in any way) simply for exercising your right to reverse an opt-out (even if you have worked for less than a year), it is harder to challenge the employer when your service is less than a year.

13 How do I reverse a working time opt-out?

You simply write to your employer. We suggest the following text:

"Dear [HR representative] .

Further to my conversation with [my line manager], I hereby confirm that I am withdrawing my agreement to opt-out from the weekly working time limit set by the Working Time Regulations. Specifically, I no longer wish to work more than 48 hours on average each week as [it is having an adverse impact on my health].

I would ask you to acknowledge this in writing and to let me know when this will come into effect. I look forward to discussing how my hours will be adjusted to take account of this.

Yours sincerely"

14 What does my employer mean when they say my working time is 'unmeasured'?

The definition of partly unmeasured working time (unpaid overtime) has been clarified as the result of a European Court of Justice decision in 2006.

The definition of 'unmeasured working time' is still a bit vague, but is intended to apply to senior managers and executives who genuinely have control over their own working time. These workers are entitled to paid holidays but don't receive other working time rights. Workers who are free to set their own hours are deemed competent to look after themselves and are thus exempt from the working time limits and rest break provisions.

The problem is that many managers in long hours workplaces still behave as though this exemption also applies to all white-collar workers, for the so-called 'voluntary' work they 'choose' to put in over and above the hours specified in their contract (and for which they aren't paid). You should take further advice if you are concerned about unpaid overtime.

Henry Ford

Henry Ford was 40 years old when he founded the Ford Motor Company in 1903. That was not an easy task – to start producing cars at that time. To start such production you need a lot of money, but Henry Ford was not a rich man. He had to look for investors. And it was a very difficult task to find the investors. Why? Because people did not believe in great future for cars at that time. People used horses and were frightened by the machines moving without a horse. At last, Henry Ford found twelve investors. They gave him 28 thousand dollars and he opened a small factory in Detroit, Michigan.

At first, the company produced only two-three cars a day. In nineteen-oh-three (1903), the company sold its first car. That sale was the beginning of Henry Ford's dream. He wanted to build a good, but not expensive car for the general public. He said many times: "I want to make a car that anybody can buy."

To keep prices low, Henry Ford decided to build just one kind of a car. He called it the "Model T”. It was a simple machine, but very fast and reliable. Americans loved the "Model T” so much, that they even wrote songs about it.

The first price of the model was eight hundred fifty dollars, but later, as production rose, Ford lowered prices. By 1916 the price had dropped to three hundred forty-five dollars. At the same time Henry Ford raised his workers' pay. His workers earned 2 dollars a day. That was the same as at other factories. Henry Ford raised the pay to 5 dollars a day. Henry Ford and his cars were getting more and more popular.

In 1923 some investors wanted to buy Ford company and they were ready to pay for the company one thousand million dollars!!!

Henry Ford expanded and controlled his company for about 40 years. He created the world's largest and most profitable company. The company was able to survive the Great Depression.

Today Ford Motor Company is one of the largest family-controlled companies in the world. It has been in continuous family control for over 100 years. Ford produces about 5 million automobiles and employs about 200 thousand employees. The company has around 90 plants worldwide. It operates in North and South America, in Europe, in Asia, Africa and Middle East.

Today the company manufactures a wide range of cars: sports cars, touring cars (Focus, Falcon etc.), a number of truck models, buses and tractors. It is developing fuel-saving technologies, for example, electric cars, hydrogen cars and others. As before, the company is focusing on creating vehicles that are simple, durable and lightweight with reasonable prices. The company is looking for new ways to stay competitive and profitable in the global market.

Warren Buffett

Early Life

Businessman and investor, Warren Buffett was born on August 30, 1930 in the state Nebraska, the USA. Buffett's father Howard worked as a stockbroker and served as U.S. Congressman. His mother was a homemaker. Buffett was the second of three children and the only boy.

Buffett demonstrated a knack for financial and business matters early in his childhood. Friends and acquaintances have said the young boy was a mathematical prodigy, and was able to add large columns of numbers in his head.

Warren often visited his father's stockbrokerage shop as a child, and chalked in the stock prices on the blackboard in the office. At 11 years old he made his first investment; he bought three shares of Cities Service Preferred at $38 per share. The stock quickly dropped to only $27, but Buffett held on tenaciously until they reached $40. He sold his shares at a small profit, but regretted the decision when Cities Service shot up to nearly $200 a share. He later cited this experience as an early lesson in patience in investing.

First Entrepreneurial Venture

By the age of 13, Buffett was running his own businesses as a paperboy and selling his own horseracing tip sheet. That same year, he filed his first tax return, claiming his bike as a $35 tax deduction.

In 1942, Buffett's father was elected to the U.S. House of Representatives, and his family moved to Virginia, to be closer to the congressman's new post. Buffett attended High School in Washington, D.C., where he continued plotting new ways to make money. During his high school tenure, he and a friend purchased a used pinball machine for $25. They installed it in a Washington, D.C. barbershop and, within a few months, the profits of the machine allowed Buffett and his friend to buy other machines. Buffett owned three machines in three different locations before he sold the business to a War Veteran for $1,200.

Higher Education

Buffett enrolled at the University of Pennsylvania at the age of 16 to study business. He stayed two years, moved to the University of Nebraska to finish up his degree, and emerged from college at age 20 with nearly $10,000 from his childhood businesses.

Buffett attended Columbia University for his advanced degree and in 1956, shortly after graduation, he formed the firm Buffett Partnership in his hometown of Omaha. His investment successes, particularly in buying undervalued companies whose stocks shortly began to rise, made him extremely rich and gained him the sobriquet, "Oracle of Omaha." Other notable career succeses include helping rescue Salomon Brothers from corporate raiders (1987) and taking charge of the New York City house (1992) in the wake of an insider trading scandal.

Record-Breaking Donation

In June 2006, Buffett made an announcement that he would be giving his entire fortune away to charity, committing 85 percent of it to the Bill and Melinda Gates Foundation. This donation became the largest act of charitable giving in United States history.

The majority of Buffett's considerable fortune was amassed through Berkshire Hathaway, a company for which he is the largest shareholder and CEO. Ranked as Forbes' wealthiest man in 2008, his net worth is estimated at more than $62 billion.

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