As if the tax laws and costs surrounding employees who drive to work weren’t painful enough, now an additional ‘workplace parking levy’ (WPL) is being introduced that forces business owners to pay £250 per parking space provided to staff.

The first council to introduce the fee, which will apply to any firm with more than 10 employee parking spaces, is Nottingham. It’s bringing in the charge from 2012 – and Milton Keynes, Birmingham, Leeds, Manchester, Liverpool, Newcastle, Sheffield, Exeter, Cambridge and Oxford may all follow soon after, having all voiced interest. (The decision to implement the scheme in a city rests with the local council rather the the government.)

To make matters worse, the fee could go up to £350 after two years. Employers would be entitled to pass the cost onto their staff rather than pay it themselves - but this is hardly a good motivational tactic.

While the scheme has been introduced as an alternative to the congestion charge and has environmental aims at its heart, it is being viewed by small business lobby groups as grossly unfair and potentially very damaging to small businesses.

"Some employees have no choice but to drive to work, which means that getting rid of parking is simply not an option for most small businesses,” said Phil Orford, chief exeutive of the Forum of Private Business. "WPL schemes would cost them thousands of pounds per year and local economies could be seriously hurt as a result.

"The imposition of steep parking charges is a huge issue for high street retailers, which are experiencing a significant decline in trade. Often, local councils readily place short-term revenue-raising above facilitating real economic growth. This stealth tax on parking smacks of more of the same."

If you’re a small business operating in one of the councils listed above and are concerned about the WPL, write to your local MP or to the transport minister, Sadiq Khan.


Image: Mark Brown esq

Commercial landlords could be some of the worst-hit victims of the recession, it seems: figures out today have revealed the average number of empty shops in a town has rocketed from 4% a year ago to almost 12% now.

The report, by the Local Data Company (LDC), found around 12,000 independent shops and almost 7,000 former branches of major chains have closed since January.

One of the most badly affected towns in the UK is Margate in Kent, where an estimated 25% of shops lie empty as a result of the recession. As a response – and to make the town look a bit nicer – the local council has commissioned a number of art projects to fill empty shop windows.

The study showed an increase in ‘churn’ – where a number of businesses open in a shop, only to close after a short period. The highest churn rates were seen in the North, in particular in Wakefield, where it was more than 700%, and Wolverhampton, where it was 387%.

But landlords and retailers needn’t despair just yet: last month’s retail sales monitor from the British Retail Consortium (BRC) showed signs of recovery, with retail sales rising 3.2% on a year-on-year basis.

The numbers are ‘way above expectations’, said a spokesperson from LDC. “[It] could set the scene for a stronger than expected second half of the year. However, this has to be balanced against continued rises in unemployment and therefore less spending power overall.”

With one of the most impressive tech scenes in Europe, the UK is the obvious location of choice for any aspiring web entrepreneur – particularly as announcements of several new tech VC funds show would-be investors are finally beginning to come out of the woodwork.

But it’s not just our thriving tech scene we can boast about: it’s the great network of support tech entrepreneurs have as well.

Take, for instance, Digital Mission, which takes a group of 15 tech businesses to Silicon Valley to gain an insight into how tech entrepreneurs operate stateside and give them unrivalled access to contacts and knowledge they would otherwise have missed.

The mission, which takes place in October, is open to applications from UK-based design and development companies with fewer than 250 employees. Applicants will need to have a two-year trading history, be ready to either do business in the US or be looking for potential US partners, be able to provide references from key sponsors or industry players and be able to cover the costs for the entire trip.

Digital mission is organised by tech networking organisation Chinwag and UK Trade and Investment (UKTI), who say it was created to help UK digital companies ‘expand internationally, understand foreign markets, attract investment, find partners and develop business relationships’.

Applications close on August 21, so get yours in now.

This week the Den provided some very interesting insight into how practised entrepreneurs are able to quickly gauge the potential of a product, envisioning it in a specific market and taking an idea beyond the boundaries that its creator and even other Dragons are able to see. It was a subtle lesson in the true value an experienced investor is able to add to a business.

Let’s take the wheelie bin lid-opening device that Duncan Bannatyne branded ‘just a piece of plastic and piece of string’. Which, essentially, it was: a simple home-made looking device that functioned as a step-on bin-lid opener, completely devoid of any trace of aesthetic charm, that had seen sales of only 2,000 units in 12 years. Little business potential, one might think.

Cue Deborah Meaden, who, despite the sneers of a derisive Duncan, made an offer £25,000 for a 25% in this peculiar business, spearheaded by an ex head of school PE who by his own admission saw ‘no link’ between his former career and his current enterprise and a fumbling side-kick who mustered little more than an emotionless ‘great’ from time to time. Why? She immediately saw huge opportunity for the product in care homes and for elderly users.

Then in jumped Peter Jones. “This isn’t a business, it’s an opportunity to buy a patent,” he explained – the bin-lid couple had secured the right to essentially any lid-opening device for wheelie bins. Which was, for the telecoms super-entrepreneur, where the real value lay. His offer for £50,000 for 50% of the patent – interestingly not the business – was accepted.

Later, Emily Webb entered the den. An impressive young lady still at university, the Dragons warmed to her quickly as she was able to deal with each of their questions in a calm and already-thought-through manner on her rowing-oar grip that prevented blisters and tendonitis.

But what really got the five firey ones leaning forward on their seats was the fact she had already explored the potential of the product in numerous different markets. She had secured patents for the device for use in any sport that used a grip as well as on any bar that needed gripping – meaning that as well as sports, she could roll out the product to crutches, a far bigger market than the 22,000 rowers she’d started off with as potential customers.

Sadly, Emily hadn’t secured contracts with crutch manufacturers yet, and the Dragons felt she had approached them slightly too early – although, again, getting the patents in place (approved in the US and UK and filed in Canada, Germany and Australia) proved a very warmly received selling point for her proposition.

But it’s not only patented devices with potential that get the attention of those with cash-stocked pockets. Above all, investors want return on investment. It’s why they do what they do.

Two brothers from Essex offered them just that. Their car servicing business, which offered lower prices and increased convenience to customers across the UK, had already turned a £40,000 profit in its first 12 months. Not bad for any new business, let alone one launching during this recession. In the last month it had brought in £230,000 turnover. It had zero debt and £40,000 on its balance sheet. The Dragons were suitably impressed. So much so that three of them made individual offers for the full amount asked for. But Deborah walked away with the prize in some competitive undercutting that left the brothers with 5% more equity than Peter and James Caan were offering.

Key lessons form this week? Patents please, but a realistic return will always reel them in.

It looks as though the fight for world wide web domination is hotting up: web giants Microsoft and Yahoo have announced plans which may see nemesis Google lose its stranglehold on the online search and pay-per-click (PPC) markets.

The deal, revealed this afternoon, will see Microsoft’s Bing search engine power Yahoo’s search pages, while Yahoo’s pay-per-click company Overture will handle the advertising sales for Microsoft.

While an agreement between the two companies, both of which have been badly threatened by Google’s grip on, well, almost the entire online market, has been in the pipeline for some time, Yahoo had until now resisted the software behemoth’s attempts at takeover, instead preferring to approach Google for an advertising deal, a move which was quashed after several antitrust investigations in the US.

The move might not quite hit Google’s search and pay-per-click offerings hard, but it will certainly deliver a slap in the face: Bing has been touted by some as the first credible alternative to Google’s search offering – flattering words backed up by figures which show while Google still enjoys an 81% share of the search market, Bing has managed to claw its way for more than 5% in the relatively short space of time since its launch in May this year.

While Google might not quite be quaking in its boots yet, the deal may well lead PPC advertisers to reassess their marketing spend. In fact, it could even restore a healthy sense of competition to the search market – which is no bad thing.

The government has announced a £151m package to help UK manufacturers embrace emerging technologies and improve advice available to them.

The fund has been designed to support businesses manufacturing products requiring a high level of scientific skill and complicated processes, and to promote the advancement and adoption of environmentally-friendly technologies.

The cash injection will come as very welcome news to British manufacturers, who are feeling the cold force of the downturn as much as any industry. Earlier this month it was revealed that two thirds of businesses in the sector had been forced to freeze pay - the highest proportion since 1987.

£5m of the package will be invested in collaborative R&D projects working on complex items, while £4m will go towards bettering the Manufacturing Advisory Service, created to help businesses of all sizes become more efficient and generate more sales.

Business secretary Peter Mandelson, who announced the ‘Advanced Manufacturing’ fund yesterday, emphasised the importance of the manufacturing sector. “At the heart of Britain’s knowledge economy is our manufacturing base. This practical package will help equip British businesses, of all sizes and sectors, to take advantage of the technologies and new market opportunities now shaping our low carbon industrial future,” he said.

“It’s about giving them the support they need to create jobs in Britain, and export the best of British manufacturing design, technology, skills and innovation around the world.”

Hear, hear.
 

When Bebo founder Michael Birch and Lastminute.com entrepreneur Brent Hoberman announced the launch of their start-up investment fund PROfounders Capital earlier this month, the tech sector could hardly contain itself – and now it seems the pair have started something of a trend.

On Saturday, news broke son of Lloyd’s of London chairman Lord Levene former Betfair boss and Tim Levene is to planning to launch his own private equity fund after he was approached by banking tycoon Lord Rothschild about making a number of co-investments.

According to reports, the £50m fund, backed by Rothschild and investment house RIT Capital Partners will target the UK and China for investments of between £3m and £15m in e-commerce, leisure, consumer and technology.

Levine has already appointed VC Richard Matthews, who has a history with Manzanita Capital and eBay and Twitter investors Benchmark Capital, as partner.

So it seems the tech sector is once again proving itself to be an early adopter, recognising a trend long before it hits the mainstream. After a long, miserable winter, private equity houses are finally coming out of hibernation – which is great news for businesses who have been more than a little let down by banks unwilling to stand out from the crowd.

Spotify, the website that offers users free access to a huge library of music without any need to download (it is live streamed), is looking set to ruffle more than a few feathers at Apple with the new app it’s trying to get on the iPhone.

The music site still in beta that The Times calls ‘probably the hottest web start-up to come out of Europe since, well, forever’ is taking the music and tech superpower head on by attempting to offer iPhone users unlimited music that can be stored on their phone and listened to when on- or offline. Which, of course, would compete directly with iTunes.

The Spotify blog explains: “Our iPhone version is very similar to the Spotify you’re already familiar with and will allow you to listen to your music even when you’re not connected to a network.”

Spotify will offer their service for £9.99 a month – about the same as the cost of the average album on iTunes, making Spotify the obvious first port of call for anyone wanting to access that much music or more in a four-week period.

So why would Apple ever allow the app on one of their products, at the risk of denting their own sales potentially very seriously? Well, according to TheTimes, ‘Spotify has a nice PR line that a “no” from Apple would be anti-competitive’.

Plus it won’t do Spotify any harm that it’s already received national press attention for the app and has released the video you see above explaining it to users, getting the good old force of consumer pressure behind it - so that if Apple did reject the app it would risk losing favour with current fans.

But TheTimes opens up an interesting discussion about the competitiveness of the two services, and points to Spotify’s struggle for revenue - currently the free version of its service, where users can listen to unlimited music occasionally interrupted by adverts, is vastly more popular than the premium service, where users pay £9.99 a month for ad-free live music streaming.

“The big question is whether Spotify is a real threat, or more like YouTube – a popular service in desperate search for a business model,” the paper writes. “The website clearly does not have enough adverts to pay for the royalties of the songs played from it.”

But BBC technology correspondent Rory Cellan-Jones counters the revenue argument by suggesting the realisation of the iPhone app would be exactly what the startup needs to start making serious money. “It’s basically a weapon in Spotify’s hands aimed at getting people to upgrade and actually pay for the service rather than getting the free service supported by ads. Not many people have done that so far. Spotify is hoping that this will be its secret weapon.”

Then again, there is another viewpoint that suggests the Spotify app wouldn’t be quite so damaging to iTunes as first impressions might suggest. Leading technology blog TechCrunch says: “It’s common tech industry knowledge that Apple makes fairly meagre profits from iTunes, as it’s largely a honeypot to get consumers to buy Apple hardware, sales from which form the bulk of their profits. So Spotify would not compete nearly as much as you might think - plus, making it a subscriber-only application on the iPhone further creates a barrier to competition with the iTunes store.”

And, following that argument, the Spotify app could even be an advantage to Apple – as it may encourage current Spotify users to buy iPhones specifically to access the service. (Although of course that may detract from iPod sales.)

We’re big fans of Spotify, and we hope its plans come to fruition. Whatever happens, it’s always edifying to watch a feisty and seriously innovative young startup posing a serious threat to a market monopoliser.
 

It’s been a long time in coming, but it looks as though the government has finally seen fit to intervene: later today, almost 10 months after the banking bail-out, chancellor Alistair Darling will meet executives from the British banking sector to question them over their lending practices.

The meeting follows remarks by Darling on BBC1’s Andrew Marr show yesterday, in which he said he was ‘extremely concerned’ the cost of borrowing is rising for small businesses at a time when the Bank of England’s base rate is at a record low.

“What companies are being charged seems to have gone up relative to what the banks are having to pay.

“We did not stabilise the banking system... out of some charitable act or because we felt sorry for them. We did it because if you don’t have a banking system that provides credit for small businesses, you will make recovery and prosperity after that much more difficult.”

Angela Knight, chief executive of the British Bankers’ Association (BBA) hit back at the comments, saying banks could not lend at the base rate because of the amount they have to pay for the funds they borrow in the wholesale money markets.

“It is a very difficult market out there, the recession is a big one and some sectors are hit more than others,” she said.

“Demand [for loans] has dropped off and we need to address this as well.”

But David Frost, director general of the British Chambers of Commerce (BCC) said he was ‘still hearing too many stories of small businesses being unable to access appropriate funding’.

“It will be business that drives the UK out of recession, but that can only happen if the banks are prepared to play their part. The situation is complicated but the government certainly needs to keep the pressure up.”

Every series of Dragons’ Den has one: Smarta likes to call it the ‘Reggae Reggae moment’ – that episode where the hunters become the hunted and James Caan and  Duncan Bannatyne end up huddled in the corner of the room, debating how they can out-bid their rivals.

The Reggae Reggae moment has come early on this season, in the form of diffident inventor and single mother Sharon Wright, who pitched her solution to the problems engineers have getting electrical cables through cavity walls on last night’s episode. Her ingenious system uses magnets to pull cables through, and, best of all for the Dragons, retails with a 90% profit margin.

Wright’s pitch didn’t start especially auspiciously: her voice, which was probably softer than it should have been, quivered slightly as she explained her story – but then she started to deliver the numbers.

“I have a two-year contract with BT to supply all their engineers in the UK,” she explained, struggling to be heard over a succession of loud clunking sounds, which was Dragons’ jaws hitting the floor.

“I have a two-year distribution agreement with [electrical manufacture and distribution firm] Schneider,” she continued, “and I have a distribution agreement in the USA covering all 50 states and Canada. I also have a letter of intent for one million units.”

There was a pause, while the Dragons attempted to come up with something clever to ask so they didn’t look silly on national television. “Err,” ventured Scottish health club magnate Bannatyne tentatively. “Why do you need any money?”

“Because I work 16-20 hours a day, seven days a week, and I need your help to take me to the next level,” she answered, simply.

What followed was almost all-out war. “I’ll be more than happy to underwrite what you ask for,” said Theo Paphitis, while Deborah Meaden attempted to entice her with the offer of more money in the future.

But it was Bannatyne and James Caan, who co-own an electronics company, who took the final deal from the other Dragons’ grasps by offering Wright more than she was asking for - £80,000 – for 22.5% of the company.

So there you have it: it just goes to show, if you want investment from the Dragons, all you need is a great product. And great numbers. And, err, a confident yet humble delivery when you’re pitching. And, if we’re honest, quite a good sob story.