The Impact of Women Running Businesses – And Why We Need More!

By Ali Golds

Named as one of The Independent’s 20 Extraordinary Women of 2017, Ali Golds is a growth coach, speaker, and author who helps women to achieve their best - both personally and through their business. She has worked with start-ups through to multi-million-pound companies, as well as advised awarding bodies and other leading education based organisations on enterprise and entrepreneurship; culminating in being appointed lead adviser on a UK government review of entrepreneurship education, 'Enterprise For All', in 2014.  Ali specialises in coaching female founders, particularly single mums and women who’ve experienced domestic abuse, and is passionate about empowering them to achieve economic independence.

www.aligolds.com

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I’ve been running my own businesses for almost twenty years now, and I wouldn’t change being my own boss for the world. I get the chance to do something I love, make a difference, do things I would probably have never done and meet people I would never have met, and can direct my career in any way I want it to go. All in all, it’s the perfect way of life for me.

I’ve also been fortunate to coach, and work alongside, lots of women who either want to or have started their own businesses too. Most of them have taken the leap because they’ve reached a stage in their life where it makes sense – either they’ve become mums, or they have done all they want in their employed career and now want to try something different.

However, despite more women taking up the mantle of self-employment, the figures for female owned businesses are still disappointingly low – just 17% - and yet women make successful entrepreneurs. So what’s the disconnect, and why do we need more women running businesses anyway?

Firstly, I don’t think women like the term entrepreneur; if they label themselves at all it tends to be ‘businesswoman’ or ‘mumpreneur’ – and there’s the problem. I don’t see dads calling themselves dadpreneurs, in fact the ones I asked wouldn’t dream of using that term, yet women do – and it’s a mindset. They don’t see themselves as ‘proper’ business owners, more a mum playing at it, and that’s wrong! The impact of women running businesses, especially mums, is felt far and wide – in families, wider social circles, and in business in general. 

There are very few high profile female entrepreneurs, which is a shame, as women who see other women running businesses are able to use them as role models. This is key in encouraging women to start businesses.

There’s a school of thought that believes if you educate a girl, if/when she becomes a mum, she can educate a new generation. It’s the same in business. If we encourage more women to start businesses, and then speak about their journey, they will act as a catalyst for more women to become their own boss.  

I’d like women who run businesses, particularly those who sell their product or service to other women, to start talking about why they started up, what their successes are, what the lessons are, and become more visible – not just for their business, but for themselves too.

Secondly, women make better entrepreneurs. I’ve said it before, and I’ll say it again; they plan more, they are more cautious so less inclined to take risks (good and bad, I’ll grant you) and more likely to run the financial side of their business in a prudent way. Banks, investors, and loan companies, in particular, want to lend to more women. Communities need small businesses even more than they need big ones, and let’s not forget that only a tiny percentage of businesses in the UK are large corporates; women tend to run these small businesses. The more we have, the more employment opportunities there are, and the more we can raise families out of poverty and towards economic independence.

And thirdly, women bring a different dimension to business. The way we do business is very male; the language used, the way we interact, even down to the thinking processes that underpin business planning. If we want business to change and grow, and I’m all for that, we need to have the input of women. So how do we do that? We start with encouraging them to run a business. Then help them to scale up, to grow, and then to think outside their own business towards other people’s businesses. Taking on a non-exec role perhaps, that first step into the boardroom of a bigger business and, eventually, into the engine room of the corporate world. 

The more we encourage women to get into business for themselves, the more we see the impact across their families and into the wider world.

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Spring Newsletter

The latest News from Fredericks Foundation 


Let’s Stay Together

New General Data Protection Regulations come into effect on May 25th. The new regulations are designed to ensure that your data is not misused or stored without your consent. As a charity, we take this very seriously and have never shared your details with anyone outside of Fredericks Foundation.

BUT we also need to prove that we have your permission to contact you about the work of Fredericks Foundation.

So all we need you to do is send an email to the address below, type 'YES' in the subject and press send. Easy peasy!

 gdpr@fredericksfoundation.org

You mean a lot to us and we would love to stay in touch.

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We Are Crowdfunding

On 8th May Fredericks Foundation is launching a Crowdfunding Appeal
and we are looking for your support.

www.crowdfunder.co.uk/womensloanfund

“I honestly don’t know what I’d have done without Freddies. They believed in me when everyone else thought I was worthless.”
— Pia - The Vanilla Pod Bakery

Our aim is to build a Women's Loan Fund to enable us to provide loans and support women with a viable business idea who cannot access funds from banks and other conventional lenders. We believe in a hand up, not a hand out.

The Women's Loan Fund will lend small amounts of money to women, who then repay it in order that others can then receive help from the fund. We see this as a sustainable solution to the lack of affordable start up finance available, specifically to women.

If you would like to support our Crowdfunder Appeal and help more women start their own businesses and change their lives and their families lives for the better, please donate what you can and share our appeal with others.

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Fundraising Heroes!

We would like to say a huge thank you and well done to the team from Hiyacar who braved the mud, obstacles and water of Rough Runner on Sunday 15th April to raise money for Fredericks Foundation. 

The brave team took on the obstacle course challenge, combining distance running with a variety of obstacles along the way, each inspired by game shows such as Total Wipeout, Takeshi’s Castle, Gladiators, and Fun House. 

One member of the team said: 
“The event was great, tough but fun. Everyone was exhausted and a few minor scrapes, but all worthwhile. It’s our pleasure to support such a worthy cause.”

The team raised over £1000 for Fredericks Foundation which will make such a difference to our clients looking to start up their own business and change their lives forever.

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Thank you Team Hiyacar!

The smarter, key-free way to hiya cars from people just like you!


Mentor Training Day Success Supported by Capital Group

The first of two planned mentor training days took place on 22nd March 2018 at the offices of the Capital Group in London. 

Firstly, we cannot thank Maeve Murray-Smith, James Hanford and the whole team at Capital enough for the tremendous facilities, delicious lunch and generous on-going support that they extend to us at Fredericks Foundation.

We were delighted to have Kerrie Dorman, the Founder of ‘The Association of Business Mentors’ as our trainer for the day. As one of the attendees said

‘"Kerrie elicited really interesting contributions from the participants and sent us all away with a much improved understanding of our mentoring role."

Fredericks Foundation is dedicated to providing our much-appreciated volunteer mentors with as much help as possible to assist them to provide the best possible service to our clients.

"It was great to get together with other mentors from Fredericks and to exchange experiences and thoughts on mentoring, all within a well-structured day."

There were 12 attendees on the day from all corners of country, who not only came away feeling that they had gained some very useful and practical insights, but that they also had fun. The feedback rated the day 8/10 and gave us some interesting ideas as to how we can improve going forward.

"It was brilliant to see such a fantastic amount of brain power and experience all in one room, all of which is available free to Fredericks clients."

We are beginning to plan a second Mentor Training Day, this time in Lightwater Surrey, either in October or November 2018. One disappointment was the lack of female attendees at this last one, let's try to correct this for this next one!

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To express advanced interest in attending this second training day please contact: peter@fredericksfoundation.org


Client News


Congratulations to Big Yellow Feet for reaching the finals of the 2018 Charity Film Awards for their charity video for RADLD. The video was a huge success, and was viewed on YouTube more than 16,000 times! The awards ceremony takes place on 11th May and we wish all at Big Yellow Feet all the best of luck for the night! 

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Congratulations to Client Danielle from OhMySkin who’s skincare products have been shortlisted as a 2018 ‘Best Special Innovation’ Finalist  by The Pure Beauty Global Awards. The 2018 Pure Beauty Global Awards celebrate the most exciting new beauty products launched around the world! 

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Client Spotlight on...
 
Big Yellow Feet is an award-winning corporate video production company. 

They specialise in B2B business films, HR training and internal communication videos, promo films, and commercials. Their services include everything from initial concept and script development through to live action filming, visual effects, motion graphics, and post-production. With over 16 years of experience, they take pride in delivering outstanding and cutting-edge videos with attention to detail and creativity that is second to none. Their production team is committed to fulfilling your unique needs and always strive to go beyond your expectations. 

Big Yellow Feet are always happy to provide quotes and advice so please feel free to contact them and they will gladly help. 

www.bigyellowfeet.co.uk


Volunteer News

Mentor Guide 2018:

A new Fredericks Mentor Guide is now available for our registered mentors. The guide outlines the duties and responsibilities of being a mentor  and offers advice on mentoring strategies and how to get started.

To obtain you’re your copy please email: peter@fredericksfoundation.org.

 
 


 
 

 
     
     
     
     
     


 

What kind of charity charges an interest rate?

By Duncan Parker

CEO Fredericks Foundation

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Background

Microfinance is a general term to describe financial services to low-income individuals or to those who do not have access to typical banking services. In Fredericks Foundation case, we lend to those typically excluded from mainstream lending, usually because of credit history issues.
Fredericks (and therefore the microfinance ideology) believe in the idea that low-income individuals are capable of lifting themselves out of poverty if given access to financial services. While some studies indicate that microfinance can play a role in the battle against poverty, it is also recognised that is not always the appropriate method, and that it should never be seen as the only tool for ending financial difficulty.

Go Fishing!

You will be familiar with the proverb ‘ give a man to fish, he’ll eat for a day, teach a man to fish he’ll eat for a lifetime. Well the ideology of micro finance as a poverty alleviation tool takes this a step further and enables the man (and woman) to own their own fishing rod and tackle by lending them money. This has two main benefits… firstly, the money that someone donates to us helps people over and over again (and one day we can stop fundraising) and secondly, it gives the beneficiary (we call them clients) self esteem as they have not received a hand out, but rather a hand up.
Charging an interest rate enables us to protect our capital and generate revenue to cover our overheads. If we are not sustainable we will not survive. If we do not survive, our clients will be at the mercy or more predatory lenders.

Fredericks accepts a higher than normal level of risk to help those most in need and our interest rate in some way helps to protect against that risk of loss and so protects the donation given to us.
Fredericks is a charity providing loans to those who are unable to obtain credit to start or support their businesses. Initially our interest rate was 4 %. However, after 9 years of data we found on review that this was not sustainable and had some difficult choices- either we stopped lending or we increased our interest rate. We did the latter. 

We increased our rate to 19% Apr. 
We found: 
 With increased support defaults went DOWN. Thus interest rate is NOT material in the businesses success. Far more important is the business plan and support. Our default rate is half that of commercial operators in this sector before they abandoned it all together

We work on a reducing balance and believe our rate to be affordable. For instance, our average loan is £5000 over 3 years. The cost total is £6664. Moreover Clients can pay back early WITHOUT PENALTY.

If our clients can get a loan less expensively we encourage them to do so. We are really lender of last resort. 

Fredericks lends responsibly. If we think they cannot afford repayments, we will note make a loan. 

We are willing to make very small business loans.  It is as costly to do this in terms of staff time as it is to make a larger loan (in fact, arguably more so because people need support to develop the loan application), but obviously we earn far less on these small loans.  

We also have to cover capital losses, which will be higher at this end of the market.  However, it still represents far greater value than a grant, since we get ~70% of the principal back, which can be redeployed.

The mentoring offer is embedded in the loan, so clients are deriving that value without having to pay an additional fee for it.

 Finally compare our APR with market leaders : ours is 19% theirs is 1500% or even standard institutions such as the banks, FOR THIS MARKET SECTOR FREDERICKS IS VERY COMPETITIVE.

 "Fredericks provides a vital service offering not just money but bespoke support appropriate for the client I cannot speak highly enough of them"
Little p nursery. 

Blimey – this is interesting…I’ll read a little bit more….

Microfinance is a general term to describe financial services to low-income individuals or to those who do not have access to typical banking services. In Fredericks Foundation case, we lend to those typically excluded from mainstream lending, usually because of credit history issues.
Fredericks (and therefore the microfinance ideology) believe in the idea that low-income individuals are capable of lifting themselves out of poverty if given access to financial services. While some studies indicate that microfinance can play a role in the battle against poverty, it is also recognised that is not always the appropriate method, and that it should never be seen as the only tool for ending financial difficulty.

Why do we charge interest? Don’t charities usually give money away?

Microfinance providers believe that the best way to combat poverty (in many cases – not all) is to find a sustainable solution – one that doesn’t need constant new funds – in our case as a charity, continued fundraising and donations. This makes us very different from many other types of charity who need to fundraise on a continual basis to deliver their services (i.e. animal welfare charities, health care charities, elderly care charities etc.).

Microfinance is different – the money we receive from donors (or investors) has the potential to never disappear an if managed well, actually grown. We lend £1 out, and we expect to get that £1 back. In a perfect world where there were no costs to the transaction (i.e. if all our infrastructure was free, all our staff were volunteers and most importantly, we always recovered the £1 lent out) we wouldn’t need to charge interest – unfortunately that isn’t the case. So let’s look at those costs in more detail.

Costs that Fredericks have to pay

There are three kinds of costs that Fredericks has to cover when it makes microloans. The first two, the cost of the money that it lends and the cost of loan defaults, are proportional to the amount lent. For instance, if the cost paid by us for the money we lend is 10%, and it experiences defaults of 4% of the amount lent, then these two costs will total £14 for a loan of £100, and £70 for a loan of £500. An interest rate of 14% of the loan amount thus covers both these costs for either loan.
The third type of cost, transaction costs, is not proportional to the amount lent. The transaction cost of the £500 loan is not much different from the transaction cost of the £100 loan. Both loans require roughly the same amount of staff time for meeting with the borrower to appraise the loan, processing the loan disbursement and repayments, and follow-up monitoring. 

At first glance, interest rates can look high to many people, especially when the clients are poor. But in fact, this interest rate simply reflects the basic reality that when loan sizes get very small, transaction costs loom larger because these costs can't be cut below certain minimums. 

Profitability and sustainability of MFIs

In our sector, excessive concern for profit in microfinance, and the demands of some funders, is leading other MFIs away from poor clients to serve better-off clients who want larger loans. It is true that programs serving very poor clients are somewhat less profitable than those reaching better-off clients, but this is where Fredericks Foundation feel called to serve. 
 
There are cases where microfinance cannot be made profitable, for example, where potential clients are extremely poor and risk-averse or live in remote areas with very low population density. In such settings, microfinance may require continuing subsidies. Whether microfinance is the best use of these subsidies will depend on evidence about its impact on the lives of these clients.


 

Should I become a mentor? 

By Peter KellyVolunteer Coordinator – Fredericks Foundation

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Many people have asked me why they should become a mentor. It is not any easy question to answer as it really does depend on the individual. To help people decide if they should become a mentor I normally go through the process of discussing the following with them:


•    The reasons  that individuals become mentors.
•    What a mentor does.
•    Why someone needs to have a mentor.
•    What makes a good mentor.

Why does someone become a mentor?
The main reasons given are:


•    To help someone else succeed and gain a sense of satisfaction themselves.
•    To have a feeling of giving something back.
•    To improve their own management skills.
•    To make additional use of their own experience and knowledge.
•    Improve their own personal self-development.
What does a mentor actually do?
In general, a mentor provides support by offering information, advice and assistance in a way that empowers the mentee. The business mentor is primarily concerned with helping to ensure that the business survives.
They:


•    Work with the client to develop a list of competencies required/needed to make the business successful.
•    Act in the best interests of the client at all times and attempt to encourage and motivate. Pointing out opportunities as well as potential pitfalls.
•    They will try and put themselves in the client’s shoes so as to get a complete understanding of the client.
•    They must recognise what motivates a client to learn and take action.
•    Help a client to set achievable goals and realistic plans and help them implement them.
•    Monitor the client’s progress and provide good feedback.
•    Provide a role model and pass on skills.
•    Give encouragement and provide motivation.
•    Be genuinely interested in the client’s development and their business.
•    Enable the client to make informed decisions.
•    Assess the client’s progress against the business plan.

Why does a client need a mentor?

A client must always want to have a mentor. The relationship must be mutual. Most clients understand why and how they can benefit from a mentor. They understand that they can:

•    Gain access to additional people and resources.
•    Get a greater understanding of how the world of business operates.
•    Develop greater skills.
•    Benefit from feedback from an experienced third party.
•    Be helped to focus on the right goals and not be distracted.
•    Increase their chances of success.
•    Have a shoulder to cry on when needed.

What makes a good mentor?
This depends on the individual requirements of the client, but in general someone who has started up and developed their own business or who has been involved in business for a number of years. In doing so they have experienced all the trials and tribulations of being in business.
A good mentor will have the following attributes:
•    Empathy
•    A desire to give something back
•    The ability to listen effectively and care about the client
•    Be well networked

Now I have a question to ask you: Is this you?
If so and you would like to volunteer as a mentor for Fredericks Foundation then please contact me at peter@fredericksfoundation.org
 

5 Reasons Why You Need To Write A Business Plan (And Use It) by Ali Golds

Named as one of The Independent’s 20 Extraordinary Women of 2017, Ali Golds is a growth coach, speaker, and author who helps women to achieve their best - both personally and through their business. She has worked with start-ups through to multi-million-pound companies, as well as advised awarding bodies and other leading education based organisations on enterprise and entrepreneurship; culminating in being appointed lead adviser on a UK government review of entrepreneurship education, 'Enterprise For All', in 2014. 
Ali specialises in coaching female founders, particularly single mums and women who’ve experienced domestic abuse, and is passionate about empowering them to achieve economic independence. www.aligolds.com 

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Below are Ali’s 5 Reasons Why You Need To Write A Business Plan (And Use It)
When I started my first business in 2000, one of the things I knew I had to do was to write a business plan. It’s number one on the official checklist of Things to Do When You Start Your Own Business.


I spent a week or two hunched over my computer, researching potential customer groups and competitors, and pulling together all manner of financial information, before assembling it all in a folder, bought especially for the job; and then filing it away on the shelf above my desk and never referring to it again.


My suspicion is that I’m not alone, and that’s assuming the business owner has written a plan in the first place (I’ve met a number who haven’t). I’m the first to admit that it isn’t the most fun of tasks but it’s necessary, and extremely helpful. After all, you wouldn’t go on a long journey without a map, or into the dark without a torch – so why would you start your own business without writing a plan?


Need convincing?


1.    A business plan brings clarity
One of the things that I find useful about writing a plan is that it helps me to think through what I’m doing through the coming year, and where I’m taking my business. It also helps with anticipating potential challenges along the way (and there’s always a few of those).


2.    It’s useful for banks and investors
When you start your business, or want to borrow money, you’ll be asked to show a copy of your plan to the bank manager. It shows them a level of commitment, and also enables them to talk through your idea and perhaps offer some advice (always helpful). For those growing their business, investors will require an in-depth business plan to assess whether they’d be prepared to invest. 


3.    It can highlight areas for development
I’ve had some of my best business ideas whilst I’ve been writing next years plans. The process of unpicking what went right this year, and what went wrong, and then using that incredibly valuable information to plot where I want to take my business over the coming year, really aids my creative thinking. 


4.    It helps you to be more organised
Knowing that I need to achieve even bigger targets and goals over the next 12 months means that I move into hyper organised Ali mode. I consider the skills and attributes that I’ll require for any new employees, the operational arrangements for my team, my marketing and sales strategies, and the financial requirements that underpin it all. Knowing that I need this information in place ahead of time means that not only can I make informed decisions at a more leisurely pace, but I’m also less stressed about it (and running your own business is stressful enough without adding to it).


5.    It brings great satisfaction
Sometimes there doesn’t need to be a reason for doing something beyond the fact that it just makes you feel better. This is one of those moments. We often forget the enormity of what we’re doing when we start and run our own business, we just take it in our stride and do what needs to be done, missing the incredible achievements and moments of glory that just become part of everyday business life. Writing a plan forces us to reflect on the year that’s ending, and in doing so we can see exactly what we’ve achieved. Take some time to celebrate your achievements, pat yourself on the back for a job well done, and use all that experience and knowledge to plan and build an even more successful business in the year to come.