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ANNUAL REVIEW 2011
CHAIRMAN’S WELCOME NOTE /
It is a time to celebrate! Odd, you may think, in these stained times to be in such a positive mood. It would be easy to reiterate the gloomy state of the economic environment and its wide-ranging effects on all sections of society – keenly felt by the people of east London whom we serve. It is, though, an opportunity to remind ourselves that positive change is rarely brought about by a single person, body or government. The success of East London Small Business Centre over many years has been based on nurturing the “partnership” between all of our stakeholders – sponsors, donors, funders, staff and clients. In this report you will read of the difference ELSBC has made to the lives of many entrepreneurs in London. On behalf of the Board, we thank all of those who support us, but especially our hard working and loyal staff who execute our services.
East London Small Business Centre has been supporting new and existing small businesses since 1978. Our aim has always been to unlock and nurture the entrepreneurial talent within the local community. Our work is guided by the social return achieved through the encouragement of enterprise.
To help all entrepreneurs in east London start-up and develop successful, sustainable businesses.
To increase social wealth and mobility through the stimulation and support of micro-enterprises and small businesses across communities in east London.
THE SUCCESS OF ELSBC OVER MANY YEARS HAS BEEN BASED ON NURTURING THE “PARTNERSHIP” BETWEEN ALL OF OUR STAKEHOLDERS.
This year, we are proud to celebrate the 25th anniversary of our relationship with Lloyd’s Community Programme, who have been a generous, faithful and loyal supporter of our work throughout this period. We thank them in particular for their encouragement, but would also thank all of the sponsors and donors who enable our work.
John Whiter Chairman
This document is printed on recycled paper
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CHIEF EXECUTIVE’S OVERVIEW /
Despite a challenging year, East London Small Business Centre has continued to deliver and provide support to existing businesses and new start-ups in extremely testing economic conditions. The decline in public sector funding has only increased our determination and passion in helping and supporting entrepreneurs to thrive and grow. Good relationships are beneficial in so many ways, and we are proud of the strong partnerships we have sustained with private sector organisations over so many years. The private sector ‘Man Group Charitable Trust’, stepped in to fund and support our work with new start-ups, when funding ceased. Deutsche Bank continued their long standing support for our work and loan funding, and this year it is wonderful to be able to celebrate 25 years of working together with Lloyd’s Community Programme, who have most generously sponsored this Annual Review, and made a contribution of £25,000 into the Lloyd’s Loan Fund, to enable us to support and increase lending to small and start-up businesses starved of finance. There are not enough ways to say ‘Thankyou’ to the private sector, who support our passion to continue to make an impact on the communities we work with across east London, which continues to enhance and change the lives of many of our clients. Against a backdrop of change, we are taking positive action and continue to explore new innovative and creative funding opportunities, to enable us to provide continuing support to our clients in setting them on the path to establishing healthy successful businesses. Thank you to a wonderful group of people who ‘make it all happen’ at ELSBC, and thank you to all our sponsors and funders for their continued energy, faith and support in helping us achieve our mission and purpose.
OUR YEAR SUMMARISED /
OCTOBER 2010 - SEPTEMBER 2011
NEW JOBS CREATED NEW BUSINESS START-UPS
TOTAL FINANCE RAISED ELSBC LOANS AGREED
UNIQUE VISITORS TO ELSBC’S WEBSITE NEW ENTREPRENEURS
NEW BUSINESS START-UPS
NEW ENTREPRENEURS CONTACTING ELSBC
TOTAL BUSINESSES SUPPORTED
THE DECLINE IN PUBLIC SECTOR FUNDING HAS ONLY INCREASED OUR DETERMINATION AND PASSION IN HELPING AND SUPPORTING ENTREPRENEURS TO THRIVE AND GROW.
WOMEN 43% WOMEN 41% UNEMPLOYED 68% BAME
ATTENDED BUSINESS TRAINING COURSES
ONE-TO-ONE BUSINESS COUNSELLING HOURS
Pauline Barnett Chief Executive, ELSBC
OF WEBSITE VISITORS WANTED TO START A BUSINESS
ELSBC LOANS AGREED
As well as lending to new and existing businesses from our loan funds, East London Small Business Centre also helped businesses access finance from external funders. Without ELSBC’s support these businesses would have been unable to raise the additional finance
ATTENDED BUSINESS TRAINING COURSES
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TWENTY FIVE YEARS OF WORKING TOGETHER TO HELP ENTREPRENEURS /
Private sector partnership support has played an essential role in East London Small Business Centre’s longevity. Ongoing support has enabled ELSBC to work at grass roots level within some of the most deprived boroughs in east London, in helping entrepreneurs to startup and survive. This year, marks the 25th anniversary of ELSBC’s long-standing relationship with Lloyd’s Community Programme which started in 1987. During the 1980s, Tower Hamlets was suffering from the highest deprivation levels in the country – with over 40% of its residents unemployed and poverty rising. The local area’s social issues were of concern to Lloyd’s Community Programme leading to the development of a strong enduring partnership, now celebrating 25 years. Lloyd’s, a specialist insurance market donated, £90k to East London Small Business Centre to help them fund new and existing small businesses in Tower Hamlets, and subsequently the Lloyd’s Loan Fund was set up. The aim of the loan fund was to provide small loans to local businesses within the borough that had been unable to raise finance from elsewhere. Since its inception, the loan fund has been a vital source of funding to entrepreneurs who wanted to be their own boss, but lacked the financial resources. The Lloyd’s Loan Fund, which was established with funding of £90k, has supported 136 new businesses during the last 25 years. Repayments of loans back into the fund enabled many more businesses to access loans and start-up in business. The loan fund has now been recycled 5.7 times to the tune of £514,000. Vicky Mirfin, Corporate Social Responsibility Manager at Lloyd’s said: “Lloyd’s Community Programme is proud to be a long-term supporter of ELSBC. This has contributed to the local economic regeneration of Tower Hamlets and employment. ESLBC’s work is more important than ever, supporting east London residents to create empowering self-employment opportunities and Lloyd’s Community Programme is pleased to donate £25,000 to enable ELSBC to provide more loan funding – and to mark the 25th anniversary of this successful and important relationship.” While Lloyd’s Community Programme partnership with ELSBC started with the initial loan donation, their involvement in supporting ELSBC to deliver their mission spread to other areas within the business. From volunteering at loan fund panels, mentoring ELSBC’s small businesses, to non-exec directors sitting on ELSBC’s board. Lloyd’s Community Programme support has been fundamental to all aspects of ELSBC. Additionally, funding from Lloyd’s Community Programme has over the years supported some of our 4-day pre-start business planning courses, which has helped thousands of budding entrepreneurs understand what it takes to run their own business. Pauline Barnett, ELSBC’s CEO said: “All of us at ELSBC are so proud to be celebrating 25 years of working with Lloyd’s Community Programme. The ongoing commitment and generosity from Lloyd’s is outstanding, and greatly appreciated.”
THE LLOYD’S LOAN FUND, WHICH WAS ESTABLISHED BY THE LLOYD’S COMMUNITY PROGRAMME, WITH FUNDING OF £90K, HAS SUPPORTED 136 NEW BUSINESSES DURING THE LAST 25 YEARS.
25 YEARS OF THE LLOYD’S LOAN FUND /
Top Left: Wendy Sonter. Top Right: Nicholas Charles. Bottom Left: Noreen Conwell & Prince Charles. Bottom Right: Anthony Orakwue & Prince Charles.
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SUPPORTING HIGH GROWTH BUSINESSES /
DESTINY ENTERTAINMENTS, FOUNDED BY JAS SAPAL & KAM BAINS
SUPPORTING HIGH GROWTH BUSINESSES /
DEGREEART.COM, FOUNDED BY ELINOR OLISA & ISOBEL BEAUCHAMP
OUR BUSINESS ADVISOR AT ELSBC HELPED US UNDERSTAND THAT WE HAD MANY ROUTES THAT WE COULD TAKE TO ACHIEVE OUR EXPANSION.
WE SOUGHT THE ASSISTANCE OF ELSBC TO SAFEGUARD OURSELVES FINANCIALLY SO THAT WE COULD CONTINUE TO GROW AND FOCUS ON RAISING INVESTMENT.
Isobel have a close working relationship with many UK universities – ensuring that students are informed about the business side of being an artist before they graduate. In 2011 DegreeArt.com was experiencing a strong growth in revenues and it was this success that prompted Elinor to once again approach their business advisor at ELSBC for support. “With the onset of the recession we wanted to ensure that we protected ourselves against any cash flow issues that could arise as a result of the new economic climate. The business was growing and we were aware that this could be jeopardised. We were in the process of fundraising for the business and knew this would be a lengthy process. We sought the assistance of ELSBC to safeguard ourselves financially so that we could continue to grow and focus on raising investment.” “The investment has led to a period of significant change and growth, it has enabled us to make 2 members of the temporary staff permanent and we have recruited 3 new team members with a 4th soon to join.” 2011 proved to be a great year for DegreeArt. com, which was the proud winner of the Smarta 100 title – an award dedicated to celebrating the smartest, most resourceful and original small business in the UK. “Our advisor has been an invaluable supporter of the business and we have grown to consider him as a trusted advisor. His faith and belief in us has contributed to our success today,” says Elinor.
‘When I was 13 somebody asked to borrow a pen from me, after giving away so many I said you can buy it, it’s 20p, and to my surprise he paid it!’, says Jas Sapal, the Co-Founder of Destiny Entertainments Ltd. For Jas, this was when his entrepreneurial passion was ignited. Childhood friends, Jas Sapal and Kam Bains, initially turned their passion for music into an international DJ-ing business during their teens, but gave that up to pursue their education. Two years later the pair realised they were not enjoying their chosen career paths and started re-connecting with their contacts within the music industry. “After a few meetings we were commissioned to build speakers for our clients. We did this and Destiny Entertainments Ltd was born. We quickly realised that with Destiny, we could earn our living and enjoy ourselves,” recalls Jas.
At the age of 21, they moved their operations from Jas’s bedroom to a small warehouse in east London, and within a year outgrew that too. They expanded into the service industry, installing audio visual systems to clients like Royal Greenwich Museum and hiring their equipment to the biggest stars in the music industry. With an ambitious growth strategy on their mind, Jas and Kam applied for finance from their bank in 2011, but after being declined they were referred to East London Small Business Centre, which was delivering the Gateway to Finance Programme – a programme aimed at helping existing businesses raise finance. “Our business advisor at ELSBC helped us understand that we had many routes that we could take to achieve our expansion, other than finance. He helped us understand the
importance of efficiency, structure, planning and re-negotiating with current suppliers to support the growth of the relationships,” says Jas. After working with their business advisor on a new strategy and developing a revised finance plan, they secured a small loan from ELSBC. In less than a year, Destiny Entertainments saw a 27% increase in their turnover; added more products to their lines and are currently exporting internationally, while an additional 9 full time jobs were created to meet the growing demand. Experiencing growth during 2011; at a time of economic downturn, has given Jas and Kam the confidence to increase their product lines by 30% in 2012.
Inspired by their own experience as young creative graduates, Elinor Olisa and her business partner Isobel Beauchamp, established their business, DegreeArt.com in 2003, with a goal to ‘Invest in the Artists of the Future’. “We were aware of many of our peers, who were extremely talented, failing to reach their potential post-graduation and there was a clear appetite from the public who were seeking access to original, affordable art. We believed that we would be able to offer an online service that bridged the gap between emerging artists and the art buying pubic,” explains Elinor. Based in Bethnal Green, east London’s creative hub, DegreeArt.com provides promising graduate artists a platform to launch their careers, through exhibiting at the gallery and selling their work through the website. As well as working with recent graduates, Elinor and
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SUPPORTING CREATIVE BUSINESSES /
TATTY DEVINE, FOUNDED BY HARRIET VINE & ROSIE WOLFENDEN
SUPPORTING CREATIVE BUSINESSES /
BAARTMANS & SIEGEL, FOUNDED BY WOUTER BAARTMANS & AMBER SIEGEL
THROUGHOUT THE LAST TWELVE YEARS WE HAVE GROWN AND CHANGED SO MUCH AND WE HAVE BEEN ABLE TO ACCESS HELP FROM ELSBC THAT HAS BEEN A GOOD FIT WITH WHAT WE NEEDED AT EACH STAGE.
BEING ASSIGNED TO A DEDICATED ELSBC ADVISOR HAS BEEN SO VITAL TO US. IN ADDITION TO THE HOLISTIC SUPPORT, WE HAVE BEEN SUPPORTED FINANCIALLY.
Baartmans & Siegel Photographer: Simon Armstrong
Tatty Devine, a brilliantly quirky and independent handmade jewellery brand was set-up by Harriet Vine and Rosie Wolfenden over 12 years ago, quickly becoming a cult classic in British Fashion. Founded by the creative pair whilst still at university, they initially began creating wrist cuffs made out of leather samples and selling them at market stalls. “We got a call from Vogue, which inspired our first collection and then we showed our first collection at London Fashion week, “explains Harriet. With their first collection hailed a success, Tatty Devine opened their flagship boutique in London’s Brick Lane in 2000, followed by another store in Covent Garden as well as over 300 stockists selling their products around the world. From inception, Harriet and Rosie had developed a relationship with East London
Small Business Centre. Harriet says: “Throughout the last twelve years we have grown and changed so much and we have been able to access help from ELSBC that has been a good fit with what we needed at each stage, from grants, loans, forward planning and good advice.” Then as the economy slowed in 2011 and consumer buying habits shifted, Harriet and Rosie returned to ELSBC and worked with their business advisor to restructure the finances of the business, increase their profit margins and safeguard jobs to ensure a continued growth. “We’ve secured a bank loan and a small loan from ELSBC to help through this period of rapid growth. We have just re-launched our website and launched a precious metal range using classic Tatty iconography, which is currently stocked exclusively by Selfridges and our own boutiques.
Tatty Devine had an incredibly successful year, with sales growing by 34% and creating an additional six jobs. Being nominated for the NatWest Women in Business Awards, The Telegraph Small Shops Awards and included in Britain’s top 100 jewellers has not stopped the pair. “We have been invited to work on a number of high profile projects with Selfridges and are currently running a bespoke, live name necklace cutting studio on their ground floor and we are working on projects with Mary Portas, Colette and Tate,” adds Harriet. The PR savvy pair have embraced the power of social media, increasing their brand exposure both online and offline, leading to coverage in several high profile publications.
Combining playful artistry and controlled flamboyance, Baartmans and Siegel, is a highend British menswear fashion label, set up by Amber Siegel and Wouter Baartmans in 2010. The design duo, who graduated from London College of Fashion in 2010, met in Amsterdam whilst working at Victor & Rolf. Even before graduating, the pair who worked in some of the industry’s biggest fashion houses, including Yves Saint Laurent and Marc Jacobs, always knew they wanted to have their own label. “Before we graduated we were launched by Harrods, awarded the prestigious ‘Harrods launches’ support initiative, a fantastic scheme to support new British talent. We were propelled immediately into the industry, running full speed, and since then working on new exciting projects and collections,” says Amber.
With their brand launched, Amber came to East London Small Business Centre spring of 2011 seeking support with the business elements of her label and to discuss industry practices. Through the ELSBC specialist fashion sector project, they were assigned to an advisor who worked with them in identifying new routes to market and access to a shortterm loan to meet production costs. Amber says: “Being assigned a dedicated and knowledgeable ELSBC advisor has been so vital to us. It has allowed us to discuss any areas and aspects of the business where we might need help and a general sounding board for practical problem solving and evolution. In addition to the holistic support, we have been supported financially – which was a loan that was hugely needed and appreciated.” Working full-time on their label, Amber and Wouter, have three full-time interns, and
have produced four collections for Harrods with plans to expand their UK and international stockists. They have also presented their first solo show of their Autumn/Winter 2012 collection at London Fashion Week. “The past 12 months has seen exciting change and support on many levels. We are now part of the Courvoisier Future 500 club, and just presented our first solo London Fashion week show. As well as developing our range of products in each collection and participating in exciting creative collaborations, we have now expanded our UK, European and international retail points. We look forward to continuing to grow and expand our team in the next 12 months.”
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SUPPORTING NEW BUSINESSES /
LAKSHA BAY RESTAURANT, OWNED BY FAREED NABIR
SUPPORTING NEW BUSINESSES /
NUTRILICIOUS 4 LIFE, OWNED BY JENNIFER OLI
MY BUSINESS ADVISOR HELPED ME EVALUATE AND UNDERSTAND MY FUNDING REQUIREMENTS. WE WORKED ON THE FUNDING APPLICATION TOGETHER AND I WAS SUCCESSFUL IN GETTING A £10,000 LOAN.
I USED TO PLAY WITH THE IDEA OF HAVING MY OWN LITTLE CAFÉ OR RESTAURANT, AND THEN FINALLY I DECIDED TO GO FOR IT.
Coming from a family of business owners, 32-year-old restaurateur, Fareed Nabir, has always wanted to be his own boss. He first started working in the family owned restaurant at the age of 15 where he learned the tricks of the trade. “I opened my first restaurant at the age of 19 in Hampshire, after finishing the first year of doing my A-Levels.” says Fareed. In 2011, Tower Hamlets resident, Fareed took over ownership of an old Indian restaurant based in Wapping Lane, where he became the sole owner. Keen to make his mark, he re-furbished the restaurant with a modern décor, introduced a new menu – offering a special selection of seafood dishes and named it Laksha Bay.
Fareed’s Laksha Bay officially opened its doors May 2011, but knowing that he would need to promote his new restaurant effectively he came to East London Small Businesses Centre following a referral from his accountant. “I had already invested a lot of money in buying and transforming the restaurant, however I needed additional finance to carry out the promotional activity needed to attract customers for my restaurant,” explains Fareed. Once he contacted ELSBC, Fareed was assigned to a business advisor who specialises in the restaurant industry. After reviewing Fareed’s funding needs, his business advisor suggested Fareed signs on to the Gateway to Finance Programme to help him raise the finance he needed.
“My business advisor helped me evaluate and understand my funding requirements. We worked on the funding application together and I was successful in getting a £10,000 loan.” With his loan and a revised business plan, Fareed invested in a new marketing strategy including the development of a new website for the restaurant with online and offline advertising campaigns. “I have seen a positive growth and managed to employ people. I was also very proud, when Laksha Bay won an award for Best New Business,” adds Fareed. Currently employing 9 full-time staff, Fareed has put in the hard-work and dedication needed to sustain a business started in a recession.
Jennifer Oli, worked as a chef for over 27 years before deciding to set up her own business. While being her own boss was a dream for over a decade, lack of finance stopped her from chasing her entrepreneurial dream. Then in 2009, with encouragement from family and friends, Jennifer decided to set up a catering facility and café called Nutrilicious 4 life. Having lived and worked in Newham all her life, Jennifer was keen to start her business within her local area, and officially started trading Nutrilicious 4 Life in 201o, where she received a contract to serve her food to customers and staff based at The Place, Canning Town.
“I used to play with the idea of having my own little café or restaurant, and then finally I decided to go for it. I think not knowing much about all the hard work involved made me braver to take the first step,” explains Jennifer. Then in September 2011, Jennifer was offered the opportunity of a further contract at Eastlea Community School in Newham, but did not have the capital required to buy equipment for the new facility and was advised to approach ELSBC for funding. With ELSBC’s Newham based business advisor, Jennifer received help in developing a business plan and financial projections to ensure that her new venture was viable and in the best possible position to obtain the necessary funding.
With a viable business plan in place, Jennifer applied and was successful in receiving a £5,000 loan from East London Small Business Centre. With her business now expanded, Jennifer has hired two members of staff to run the facilities at Eastlea School, while the demand for her food in Canning Town continues, with an increased footfall from people working in regeneration projects in the area,
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FINANCIAL SUMMARY /
This was a challenging year for East London Small Business Centre as public funding continued to decline. In the ongoing difficult economic climate, nevertheless ELSBC continued to deliver business support and access to finance to new and existing businesses across east London and Pan London for specific funded projects, delivered in partnerships with other organisations. Although East London Small Business Centre’s turnover contracted by 12% to £1.08 million for the year; previous year’s £1.21 million, a surplus of £117,257 was recorded, against a loss of £68,827 in 2010. East London Small Business Charity Ltd turnover reduced to £894,253 down from £1,532,772 in 2010 as the charitable income was most affected by the reduction in public sector funding for the support of new startup businesses. However, though direct early intervention of management and timely decisive action in review of staffing levels, internal restructuring and reduced overheads; we have ended the year with a surplus, enabling contribution to reserves. Statutory accounts for both the Centre and Charity are available on request. Loan funding operated by East London Small Business Centre was in continuous demand. We had to review the current level of funding we could lend to clients, reducing loan amounts down from £20k to £10k, ensuring the Centre could continue to support as many businesses as possible. At the 30th September 2011, the combined Centre and Charity unrestricted reserves were £793,102.
BALANCE SHEET /
FOR CENTRE & CHARITY, 30 SEPTEMBER 2011
2011 £ FIXED ASSETS Tangible assets Investments 91,855 3 91,858 CURRENT ASSETS Assets held in trust 480,644 242,063 1,114,822 661,969 2,499,498 CREDITORS Amounts falling due within one year 339,995 366,975 468,817 305,983 1,110,200 517,851 2,402,851 Debtors Loan fund assets 2011 £ TURNOVER Cost of sales GROSS PROFIT Administrative expenses OPERATING SURPLUS (LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION Tax on loss on ordinary activities SURPLUS (LOSS) FOR THE FINANCIAL YEAR AFTER TAXATION 1,970,804 488,946 1,481,858 1,382,039 99,819 2010 £ 2,742,897 1,293,452 1,449,445 1,596,661 (147,216) NET CURRENT ASSETS 2,159,503 2,035,876 Cash at bank 99,202 3 99,205 2010 £
COMBINED PROFIT AND LOSS ACCOUNT
FOR CENTRE & CHARITY, FOR THE YEAR ENDED 30 SEPTEMBER 2011
TOTAL ASSETS LESS CURRENT LIABILITIES PROVISIONS FOR LIABILITIES
RESERVES Special reserve fund Unrestricted reserves 977,615 793,102 1,770,717 972,981 693,283 1,666,264
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SPONSORS AND FUNDERS /
WE WOULD LIKE TO THANK OUR SPONSORS AND FUNDERS FOR THEIR CONTINUED SUPPORT AND SHARED VISION. PRIVATE SECTOR / BARCLAYS DEUTSCHE BANK DEWEY & LEBOEUF CLIFFORD CHANCE HSBC KENNEDYS KINGSTON SMITH LLOYD’S COMMUNITY PROGRAMME LLOYDS TSB MAN GROUP CHARITABLE TRUST MORGAN LEWIS NABARRO NATWEST RBS THE MERCERS’ COMPANY PWC PUBLIC SECTOR / BANK OF ENGLAND CITY OF LONDON EUROPEAN REGIONAL DEVELOPMENT FUND LONDON DEVELOPMENT AGENCY LONDON BOROUGH OF BARKING & DAGENHAM LONDON BOROUGH OF HAVERING LONDON BOROUGH OF NEWHAM LONDON BOROUGH OF REDBRIDGE LONDON BOROUGH OF TOWER HAMLETS PEABODY TRUST
EAST LONDON SMALL BUSINESS CENTRE UNIVERSAL HOUSE 88-94 WENTWORTH STREET LONDON E1 7SA T / 020 7377 8821 W / WWW.SMALLBUSINESSCENTRE.ORG.UK WWW.TWITTER.COM/ELSBC
2011 ANNUAL REPORT SPONSORED BY: