:00:29. > :00:32.Now it's time for Show Me The Money This is Show Me The Money, your
:00:32. > :00:36.weekly guide to who's making the cash, how they're doing it, and
:00:36. > :00:40.what it means for the way we work. With us tonight: You probably use
:00:40. > :00:44.his products every day but don't know it. Warren East is the boss of
:00:44. > :00:47.ARM. It keeps your mobile phone smart. Mark Pearson couldn't earn
:00:47. > :00:51.enough as a florist so set up a money-off voucher business. It's
:00:51. > :00:56.been a right blooming success. And Kate Bassett gets real about
:00:56. > :01:00.business as the Managing Editor of Real Business Magazine. Some call
:01:00. > :01:03.it work experience. Others, slave labour. Whatever you call it,
:01:03. > :01:05.another big employer isn't doing it. Burger King has pulled out of the
:01:05. > :01:14.Government's scheme to help unemployed youngsters find work
:01:15. > :01:21.placements because of public concerns.
:01:21. > :01:26.Your first break in business was a work placement. With Gordon Ramsay.
:01:26. > :01:31.If you hadn't had that break, would you be where you are today? No, I
:01:31. > :01:37.wouldn't, simple as that. My opportunities were pretty limited.
:01:37. > :01:43.I was not well educated. It was a difficult start, but, going into a
:01:43. > :01:50.vocational career, I was going to become a chef. I moved to London
:01:50. > :01:56.and the great opportunity was it was a prestigious location. A great
:01:56. > :02:00.someone to live up to. I learned hard work, long hours. Key skills
:02:00. > :02:05.and ethics which were important to me. It wasn't glamourous. I was
:02:05. > :02:08.peeling potatoes for months on end, but it was a step on the latter in
:02:08. > :02:13.the right direction. This is a story we hear so many times, the
:02:13. > :02:19.first step into business that teaches you very basic skills, but
:02:19. > :02:23.things like turning up on time, doing a full day's work. Going to
:02:23. > :02:29.work when you don't feel like doing it. These are things which make you
:02:29. > :02:33.employable. Yes, discipline. I got my first break in publishing
:02:33. > :02:37.through work experience. I absolutely applaud them. The
:02:37. > :02:44.problem with the government scheme is it has descended into chaos.
:02:44. > :02:51.Remarks about a slave labour, why aren't you paying people? Matter
:02:51. > :02:55.Lamb, Sainsbury's, Burger King, all pulling out, negative press. That
:02:55. > :03:01.negative press has made some companies reconsider their
:03:01. > :03:04.participation in it. Absolutely. Do these schemes give people genuine
:03:04. > :03:09.opportunities and contacts and experience and or are they an
:03:09. > :03:14.excuse for big companies to exploit workers and get them to take out
:03:14. > :03:21.the rubbish and stack shelves? doing that, isn't there merit in
:03:21. > :03:27.that? Yes, but remember this is not paid. These schemes can be eight
:03:27. > :03:32.weeks. How useful are they to these people? How useful are things like
:03:32. > :03:36.that to people who are quite likely to have not done well at school for
:03:36. > :03:40.whatever reason that would be, to not have any experience of work and
:03:40. > :03:47.have nothing on their CV they can use to look attractive to
:03:47. > :03:52.employers? At the opposite end of the scale, youngsters sitting a
:03:52. > :03:59.home doing nothing, watching daytime TV? If that is the picture
:03:59. > :04:02.painted, surely something, meeting people, seeing opportunities, they
:04:02. > :04:09.might not all turn into a job but it's better than a blank space on
:04:09. > :04:16.your CV. What happened during this period? That's the worst question.
:04:16. > :04:22.What have you done? If you haven't got an answer... There was payment
:04:22. > :04:27.for these schemes. Youngsters were getting benefits. Yes, and in some
:04:27. > :04:31.cases the travel expenses. It's about was their legitimate training
:04:32. > :04:35.involved and I think there is a question about that. Thank you for
:04:35. > :04:39.that discussion on that. Time for Boom or Bust, our quick flick
:04:39. > :04:43.through the news you'd rather have missed this week. Being British,
:04:43. > :04:47.you might think that means tea and cakes at 4 o'clock. But this is how
:04:47. > :04:53.Britain was represented at this year's Rio carnival in Brazil. What
:04:53. > :05:00.fun they seem to have having. It must have used up the UK's entire
:05:00. > :05:05.quota of Shetland ponies. If your library is never open,
:05:05. > :05:09.here's a solution from China. It's called the Book ATM and it lends
:05:09. > :05:13.books just like a library but it stays open 24 hours a day. You just
:05:13. > :05:17.need an ID card and a deposit of one pound to take one out. It has a
:05:17. > :05:21.collection of 400 books to choose from. 399 of them are translations
:05:21. > :05:24.of Barbara Cartland. Wondering what to do for your hols
:05:24. > :05:30.this year? How about a round-the- world cruise costing a mere �1
:05:30. > :05:36.million? Well, you can't take it with you. You'll enjoy luxury on
:05:36. > :05:46.board for 115 days, calling at 52 ports in 28 countries. The cruise
:05:46. > :05:52.
:05:52. > :05:57.Let's start with the carnival in Rio. Always a spectacular visual
:05:57. > :06:04.nature, but that representation of Britain, people in uniforms on
:06:04. > :06:10.Shetland ponies. Beefeaters and Shetland ponies, I don't think so.
:06:10. > :06:15.We are associated with bad food and Cheddar cheese, but when it comes
:06:15. > :06:22.to business, people do associate the made in Britain Taggart with
:06:22. > :06:31.quality, reliability. -- a tag. We are known for our entrepreneurial
:06:31. > :06:40.them. We are known for our ideas. You deal with the world's biggest
:06:40. > :06:47.companies, Apple and Microsoft. How do they see the British? I think
:06:47. > :06:53.they see us as practical. With a minder to do business. I think
:06:53. > :06:57.being based in the UK singles as out from being either American or
:06:57. > :07:04.Asian. It puts us in the middle and enables us to communicate well with
:07:04. > :07:07.both. We are the bridge between the Continent which drove for the last
:07:07. > :07:11.century and the one which will drive the current century and they
:07:11. > :07:20.see us as a good place to do business? Decent people to deal
:07:20. > :07:25.with? Certainly with our experience, it's how we have found doing
:07:26. > :07:30.business on both of those continents. Mark, tradition is
:07:30. > :07:36.important and tradition is often a selling point. But sometimes, in
:07:36. > :07:43.business, you need to look towards novelty. Yes, there's novelty and
:07:43. > :07:48.innovation. In Britain, it's very important we are seen as innovators
:07:48. > :07:53.and it's the future of the country. We need to jump on and innovate.
:07:53. > :08:03.We're always compared to Silicon Valley. I don't want that for so I
:08:03. > :08:03.
:08:03. > :08:09.want to be the leader. We need to push it harder. That was a nice
:08:09. > :08:12.innovation, the ATM which dispenses books. Yes, that is taking a
:08:12. > :08:18.requirement and finding a novel way of servicing the requirement. We
:08:18. > :08:23.find that, amongst the hundreds of people that use our technology, if
:08:23. > :08:28.you look at our own business model, it was born, in some ways, out of
:08:28. > :08:33.necessity, but a totally different way of doing business. Instead of
:08:33. > :08:37.building chips and selling chips, we licensed designs to hundreds of
:08:38. > :08:43.other companies who then make chips and sell them. It's just a
:08:43. > :08:49.different way. Innovation is the way of the future. The innovation
:08:49. > :08:55.in your business is what? Well, I mean, the innovation in the design
:08:55. > :08:59.itself. And in that business model, where we shear the Investment and
:08:59. > :09:06.share the return with our licensees and their customers. Why do you
:09:06. > :09:11.share it with them? We share it with them because we share both the
:09:11. > :09:18.investment and the return. We end up servicing a huge range of
:09:18. > :09:25.customers, last year 8 billion. That's nearly 2 billion consumers
:09:25. > :09:29.are all from about 2000 employees of. You can't do all that with just
:09:29. > :09:35.2000 employees, so we share the effort and the return. The it
:09:35. > :09:40.maximises and gives you more punch? OK. The million-dollar cruise. It
:09:40. > :09:45.shows that there are people out there with a lot of money to spend,
:09:45. > :09:50.not shy about spending it, and the recession has not got in their way.
:09:50. > :09:55.Yes, there's a lot of it out there. The media portray a very tough time
:09:56. > :10:00.and there's a lot of high rises, people being very successful.
:10:00. > :10:05.Putting a price tag on that, I think every year you see something
:10:05. > :10:09.horrendously priced. It is going to be an Easter break in a few weeks'
:10:09. > :10:16.time but if there's customers out there, this good business and good
:10:16. > :10:21.PR. The luxury Business holding up from your perspective? Absolutely.
:10:21. > :10:25.We are seeing are two extremes. Unemployment at a 16 year height of
:10:25. > :10:30.luxury market is holding up well with brands like the Morgan Motor
:10:30. > :10:36.Company, British luxury brand in doing well. A good place for
:10:36. > :10:41.entrepreneurs. He if you were to go to a book ATM and take one out,
:10:41. > :10:47.what would be? It would be some big entrepreneurial. If someone I look
:10:47. > :10:52.up to. I can't think of anyone. you say Richard Branson, I will
:10:53. > :11:01.make you leave the studio. I've already read it. 1984 by George
:11:01. > :11:07.Orwell. Pride and prejudice. And the classics girl. Pourri --
:11:07. > :11:13.probably a story about the elements. The periodic tales. It's very high
:11:13. > :11:21.in the non-fiction charts at the moment. The a chemistry book?
:11:21. > :11:25.not really chemistry, but it's how the elements help Bass and how we
:11:26. > :11:30.can make use of the different elements -- help pass. I'm looking
:11:30. > :11:36.forward to us. I know your background is Engineering, hence my
:11:36. > :11:41.slight surprise because over the years I know scientists and
:11:41. > :11:43.chemists don't necessarily see eye- to-eye on most things. Do you think
:11:43. > :11:47.there is enough public understanding about the scientific
:11:47. > :11:52.principles which underpin the type of industry you operate? That's a
:11:52. > :11:58.very good question. And I think these are books such as the one to
:11:58. > :12:01.which I refer, play an important role in a bridging the gap. When we
:12:01. > :12:06.start talking about business before it became as well known as it is
:12:06. > :12:10.today, people used to glaze over and turn off and yet, Engineering
:12:10. > :12:17.is about making use of the world around you, and making life better
:12:17. > :12:21.for people. Is it about mastering nature? It's about making life
:12:21. > :12:28.better for the people who live in the world around us. The what made
:12:28. > :12:34.you think engineering was the area for you?
:12:35. > :12:40.It is that challenge of working with the world around you, working
:12:40. > :12:44.with the laws of nature, and not trying to win. But trying to make
:12:44. > :12:49.those things work for you. And create real things. I'm not much of
:12:49. > :12:53.an artist, but I enjoy making things. That's what I have been
:12:53. > :13:01.lucky enough to have done as a career. Engineering is cool now
:13:01. > :13:05.because of the Big Bang theory of the television. Did it have
:13:05. > :13:10.appealed to you when you were starting off? To be honest, I was
:13:10. > :13:13.just interesting. We were talking at the start of a programme about
:13:14. > :13:18.the placement schemes for youngsters who have limited
:13:18. > :13:22.experience of work. When you look at the labour market, you look at
:13:22. > :13:26.it from a different perspective. You need people who already have
:13:26. > :13:33.many many technological advanced skills, and experience in working
:13:33. > :13:37.in your industry, as well. Can you find enough of those people? We can.
:13:37. > :13:45.Our business model means we have that fewer people relative to the
:13:45. > :13:50.amount of business we do. Over the last couple of years, we have hired
:13:50. > :13:55.about 700 and you people, about 400 additional people to our business.
:13:55. > :13:58.And they tend to be graduates and some of them are experienced.
:13:58. > :14:08.Because we're only looking for a relatively small numbers, we do
:14:08. > :14:14.find them. You have 100 unfilled vacancies. Yes, at the moment. It
:14:14. > :14:18.is a planned recruitment for the whole of 2012. We are going to hire
:14:18. > :14:22.about 200 people and a few more during the year. Here we are at the
:14:22. > :14:31.end of February. I'm not worried at the moment. You're confident you
:14:31. > :14:34.will fill them? Certainly. We saw on Friday, the primary reason that
:14:35. > :14:42.Britain's economy shrank last year was because businesses had cut back
:14:42. > :14:52.on their investment. Down at 6% across the board. What is happening
:14:52. > :14:52.
:14:52. > :14:58.D We are continuing to grow. So on top of the 400 people that we grew
:14:58. > :15:03.by over the last couple of years we are intending to continue on that
:15:03. > :15:07.trajectory and grow by another 200 or so this year. That is about
:15:07. > :15:11.another 10%. When you see other companies are cutting back their
:15:11. > :15:14.investment because of uncertainty about the euro and worries about
:15:14. > :15:18.Greece, do you think that perhaps they have lost the plot a little?
:15:18. > :15:22.Not at all. I think businesses have to react to the environment in
:15:22. > :15:28.which they find themselves. We have been through years, while I have
:15:28. > :15:35.been doing this job, when we have been in total none investment mood,
:15:35. > :15:42.in cutting back mode. Right now, we are looking at growth markets,
:15:42. > :15:48.growth opportunities, new projects, new geographic areas. It's time to
:15:48. > :15:55.investment RBS lost �800 million last year. Lloyd's lost �3.5
:15:55. > :15:59.billion. HSBC will say it made a profit of �14 billion. Back to you
:15:59. > :16:02.on this, when yo hear the bank making that amount of money, do you
:16:02. > :16:07.think they must be ripping a lot of people off, or do you think, good
:16:07. > :16:13.on them, that is what we need? first I think big companies, big
:16:13. > :16:18.profits. That's right. It so happens it is a bank. Businesses
:16:18. > :16:21.are about servicing their customers and making profit out of servicing
:16:21. > :16:27.those customers to give those profits to shareholders. It may
:16:27. > :16:32.trigger a payout for the top boss of �12 million, we read. When you
:16:32. > :16:39.saw the fuss about the bonuses for bankers, what did you think?
:16:39. > :16:45.thought it was, in some ways, you know, a pity that there was such a
:16:45. > :16:50.debate about one aspect. It's an understandable debate when these
:16:50. > :16:57.sums, large sums of money by normal people's standards. The banks
:16:57. > :17:03.operate in a global industry. UK banks have to compete globally. We
:17:03. > :17:09.believe for instance that performance should be related to
:17:09. > :17:14.reward. If businesses perform, then reward should be commensurate. If
:17:14. > :17:19.they the not perform they should also be commensurate. Given the
:17:19. > :17:24.fall in profits at the banks that the bonuses were not deserved?
:17:24. > :17:27.There has to be a balance between being competitive and also
:17:27. > :17:35.structuring your rewards to reflect long-term performance. Clearly not
:17:35. > :17:40.going to get any more out of you on that one. A profit of �14 billion,
:17:40. > :17:44.not dollars, pounds. The entrepreneurs, your customers in
:17:44. > :17:50.HSBC are likely to have what reaction? I think they will balk
:17:50. > :17:55.slightly. As we said the two state owned banks Lloyds and RBS made
:17:55. > :18:00.considerable losses. HSBC is on the brink of reporting great profits.
:18:00. > :18:04.The only thing these banks seem to have in common are big payouts. I
:18:04. > :18:09.think entrepreneurs will find that difficult to digest, give than the
:18:09. > :18:13.banks are iss missing targets when it comes to lending. Aren't
:18:13. > :18:21.entrepreneurs supposed to like big profits? Isn't that the name of the
:18:21. > :18:25.game? Not at their expense. themselves? It is a great news they
:18:25. > :18:29.have bucked the trend. It is understandable they want to pay
:18:29. > :18:37.such bonuses. They have achieved a great result. If we look at the
:18:37. > :18:41.other two banks how do we know the result was not bias. They may have
:18:41. > :18:46.delivered. What struck me were your first woords, that it's great news.
:18:46. > :18:50.You have -- words, that it's great news. You have no problem? I can
:18:50. > :18:54.choose which bank I used. They are all very competitive and similar.
:18:54. > :19:00.At the end of the day, if someone comes along and does it super
:19:00. > :19:07.cheaper and better service for me, that is where I will move my money.
:19:07. > :19:11.You have kept away from the banks? I did it all from the money in my
:19:11. > :19:14.back pocket. My website cost me �300. That is where I started my
:19:14. > :19:20.business. Do you think you might have had a different attitude
:19:20. > :19:27.towards the banks if you had to engage with them? Maybe. Also I
:19:27. > :19:31.know that you also invest in other businesses. When you are approached
:19:31. > :19:35.for investment is that from businesses that have been turned
:19:35. > :19:43.down, or declined by the banks? don't think a lot of entrepreneurs
:19:43. > :19:46.go to banks any more. They think it is a closed door. There's a lot of
:19:46. > :19:51.online opportunities. Successful people who want to... It's more of
:19:51. > :19:56.a personal investment. You want to grow a successful company, but
:19:56. > :20:02.invest in the people as well. It's a different opportunity. Thank you.
:20:02. > :20:07.Starting your own business. Why bother when you can run someone
:20:07. > :20:14.else's business, you can buy a franchise. We ask if you would like
:20:14. > :20:19.fries with that? Famous businesses on the high street are not always
:20:19. > :20:25.run by the big corporations behind them. Firms like these often grant
:20:25. > :20:30.licenses. Once you have brought a licence or franchise you get to use
:20:30. > :20:34.the name, services and products associated with these brands. More
:20:34. > :20:39.and more people are starting them. There are exhibitions like this in
:20:39. > :20:42.Birmingham. Why the interest? Is it a good way to do business? We came
:20:42. > :20:48.here today because we're in the process of buying a franchise. We
:20:48. > :20:53.came here to sea the bank to get some financial advice. To see what
:20:53. > :20:59.health and beauty franchises are on offer. The possibility of investing.
:20:59. > :21:03.I have done a part-time business which is suddenly full-time.
:21:03. > :21:06.Sticking by my existing job. I have come here to get advice on where
:21:06. > :21:11.the business can go from here. would you want to start a
:21:11. > :21:16.franchise? One of the biggest reasons is the success rate. A
:21:16. > :21:21.franchise because you have a proven system with support and a network
:21:21. > :21:26.around you, that improves your success rates six or seven times
:21:26. > :21:30.more. Whereas a normal business start-up you find more often than
:21:30. > :21:34.not they fail more than they succeed, a franchise it's the other
:21:35. > :21:39.way around. 90% will succeed. do you need to do? You need to know
:21:39. > :21:45.what you are getting yourself into. You need to understand the business.
:21:45. > :21:48.Speak to existing franchisees. See what the reality is day-to-day:
:21:48. > :21:53.There are banks which have specific franchise departments which can
:21:53. > :21:56.give you advice. Make sure you understand the legal implications.
:21:56. > :22:00.There are specialist solicitors. You can look at the agreement to
:22:00. > :22:06.make sure you are investing in something above board and
:22:06. > :22:13.structured properly. Someone who has taken the plunge is Roy. He
:22:13. > :22:18.bought This franchise of Dream Doors in Croydon. I was made
:22:18. > :22:21.redundant three years ago. After 30 years I wanted to try something
:22:21. > :22:26.different. My wife and I talked about having our own business for
:22:26. > :22:33.years. I decided to look at it more thoroughly and started to search
:22:33. > :22:39.for something which interested me. I ended up buying the Dream Doors
:22:39. > :22:43.franchise. What message would you give? The devil -- detail is in the
:22:43. > :22:50.detail. You owe it to yourself to investigate. Don't take what is
:22:50. > :22:56.given on a plate. Try and work with others that work. Don't go to ones
:22:56. > :23:01.put to you. Determine your own. Visit undercover, or sometimes by
:23:02. > :23:08.appointment. Go into the numbers. Find out what it can be and satisfy
:23:08. > :23:12.yourself. Roy is not alone. There are 37,000 individual franchise
:23:12. > :23:16.outlets across the country. The choice available continues to grow
:23:16. > :23:22.with 900 different types to pick from. More impressively the
:23:22. > :23:27.franchise industry in this country is worth over �12 billion.
:23:27. > :23:33.But with so many franchises to choose from and the average cost of
:23:33. > :23:37.buying one exceeding �40,000, what should you look out for? You are
:23:37. > :23:41.restricted over prices. They want to keep a certain level. You cannot
:23:41. > :23:45.charge more or less than the company wants you to. You may be
:23:45. > :23:49.restricted in the terms of products you can introduce. You might be
:23:49. > :23:54.able to influence the franchising company in terms of the product you
:23:54. > :23:59.are offering. You can tell them, well this is selling well or this
:23:59. > :24:04.is not. Adapt the product offering according to customer preferences.
:24:04. > :24:09.You'll have to do your homework and make sure you get the right legal
:24:09. > :24:15.and financial advice. If you don't, then you could edge up looking a
:24:15. > :24:20.duck. Next week, we are building up a programme around a house building