Entrepreneur Academe expert session: SCALE

scale mentors sep15

In September over 40 of us were back at the City Business Library for our latest Entrepreneur Academe session. This time we looked at the various aspects of scaling a business, specifically honing in on HR, finance, law and international expansion. As ever, we assembled an illustrious panel to field questions from our entrepreneurs: Andrew Solomon (Kingsley Napley), Natasha Frangos and Mark Pattenden (haysmacintyre), Jeanne Le Roux, (JLR People Solutions), Helen Thevenot (Thomson Reuters), Heather Taylor Portmann (Ustwo) and Bob Mollen (Fried Frank). As you’d expect with such a diverse panel and group of entrepreneurs, we covered a lot of very different ground over an hour of conversation. It should also be said that for a potentially dry set of topics, it was one of the funniest sessions we’ve held this year. Highlights of the conversation included:

In general when expanding overseas, it’s best to form a new subsidiary company that can comply with local law, especially around tax and HR. Specifially, the US is a much riskier legal environment than the UK, with more compliance-focussed businesses. Get local advice around such areas as insurance, and remember that while the US is in theory more liberal around hiring and firing, there is in fact a huge amount of litigation in this space.

When employing people overseas, there are myriad routes to go down. In general, though, you probably want to look at contracting companies rather than employing overseas staff directly. Make sure you have a rigorous contract in place that specifies exactly what is going to be delivered and by when. And have absolute clarity around Intellectual Property (IP).

This led us into a lengthy discussion about the differences between employees and contractors in the UK. Indeed, HMRC set up IR35 legislation specifically to address the confusion (or obfuscation) around this within the digital sector. Yet while it might initially look like a complex area, in truth a lot of “if it walks like a duck” logic applies. If someone is coming into your place of work, day in day out, if they use your equipment, and certainly if you print them business cards (!) then let’s face it: they should be an employee. A contractor might come to your place of work occasionally, but they generally have their own work space. And again: they should work on a specific piece of work with a specific set of outputs.

Then some quickfire questions and observations:

  • Is there a heuristic measurement for what an employee will cost a company based on their salary? This was a tricky one, all agreed, but a consensus emerged that a rule of thumb is around 1.5 x salary.
  • As of 2017, employers who don’t have pension schemes in place will be auto-enrolled, so you should get something in place soon, before the options are reduced.
  • For younger companies, it’s perfectly natural – and commonplace – to incentivise employees through share options. But don’t forget that those options are pretty much meanigless until there’s an exit event.
  • When employing Millennials, test your assumptions – because they’re almost certainly wrong (turns out, for instance, that health insurance is a keen incentive for under 30s…)
  • When setting Terms & Conditions for customers, look at what your competitors do, and adapt that; and when moving into the US market, it’s probably best to adapt the T&Cs of a US company.
  • To retain staff and to motivate them, remember that culture is everything. It may be difficult to define, but it is crucial .

Scale mentoring sep15

We followed it up the panel, as ever, with a speed mentoring session that allowed the entrepreneurs to talk one on one with the experts about their specific concerns. We were joined by several other mentors from the Angel Academe network, including Lin-Marita Sen (haysmacintyre), Lili Long, Christopher Hughes (Thomson Reuters), Olga Shafranik and Nick Reynolds (BBC).

So that’s it for this year’s topic-specific sessions. From here on out we’ll be helping our entrepreneurs take all these lessons and apply them to their own businesses, honing their business plans and polishing their pitches. We’ll be keeping you posted here, of course.