The Fizz! Blog

Networking with Fizz #1 - Do you know why you're there?

I go to quite a few networking events, and they work very well for me.  Although I wouldn't have the hubris to claim to be a networking guru, I've developed some theories over the years of what works and what doesn't.  So, here is the first in what will be an infrequent series of tips on how to make the most of your networking efforts.

The first thing you need to consider with any networking event is - why are you going?  This might seem really obvious, but I'm not sure how many people consider it.  I don't go to every event for the same reason; I get different things from different events, and I adjust my approach accordingly.

With some events (for example, my BNI group), proceedings are very structured and there's a strong push towards finding new business for your fellow members.  So, for those events, it's really important to get to a) make sure you meet everyone in the group, and check in with them on a regular basis, b) ask questions so that you find out exactly what your fellow members do and c) work hard to make sure that everyone knows exactly what you do.  Events like that are good for a couple of reasons.  Firstly, the obvious one - they're great for generating business.  But, secondly, the fact that you'll probably have to regularly stand up and explain to people just what you do, within a defined time slot, means that you're forced to become very clear about exactly what your business is, and you should very quickly become good at explaining that with clarity and efficiency.

With others (for example, some regular lunches I organise for professionals in and around Thame) it's a more relaxed, social event, with no pressure to seek or give referrals.  The aim, if there's any beyond just enjoying yourself, is to build long-term relationships and friendships, much more slowly.  That type of event can be great as well.  But it means that there's less of a need to "circulate" or to talk business.    It's very noticeable when someone comes along to one of these groups for the first time and adopts the approach you'd expect at the first type of event - the "harder sell" that they're trying to do isn't really appropriate out of its usual context and can make people feel uncomfortable. 

There's a place for both types of events.  In fact, they can feed off one another - when you do come across someone at a more relaxed event who could be a great business connection for you, the practice you've had at the formal events at explaining yourself and your business will come in really useful.  But make sure you're clear in your own mind why you're there before deciding who to talk to and what to talk to them about.

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Are Pringles crisps?

This is a question of vital importance to HM Revenue & Customs, and it has been rumbling through the courts for some years.  But it's now all over, and the verdict is...

Yes, Pringles are crisps.  This is bad news for Mr Pringle, but good news for the VATman, because it means that Mr Pringle needs to hand over some VAT every time he sells a tube of his delicious snack.

The central question in the dispute has been whether Pringles (which are around 42% potato, 33% fat and 25% other stuff) are "made of" potato.  For obscure reasons I won't go into, VAT rules mean that if they're "made of" potato then VAT is due on their sale but if they're not "made of" potato then it isn't.  Ironically, given that he's probably generally reluctant to boast about the small quantity of potato in his potato-based snack, Mr Pringle had taken the position that there is so little potato in his products that you couldn't really say they're made of potato.  On the other side, the VATman has been saying that the man on the Clapham omnibus would consider Pringles to be made of potato, regardless of the precise quantity of potato contained within.

To cut a very, very long story short the judges agreed with the VATman - that common sense says that Pringles are made of potato.  Their position can be summarised in this excellent passage from the judgement:

VAT legislation uses everyday English words, which ought to be interpreted in a sensible way according to their ordinary and natural meaning. The "made from" question would probably be answered in a more relevant and sensible way by a child consumer of crisps than by a food scientist or a culinary pedant. On another aspect of party food I think that most children, if asked whether jellies with raspberries in them were "made from" jelly, would have the good sense to say "Yes", despite the raspberries.

Although I'm not sure what the child would say if presented with a pudding that was 42% jelly, 33% fat and 25% other stuff.  I guess that's trifle, thinking about it, so they'd probably be quite happy.

Incidentally, while this case might seem trivial, the amounts of VAT that were at stake were certainly not trivial at all - in the first instance the cost to Mr Pringle of this verdict is £100m, with a further £20m a year cost from now on!

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'Tips as wages' loophole to close

This is a business news story from a week or two ago that didn't receive as much coverage as I thought it would.  Ever since the minimum wage legislation was introduced, many restaurants (including some major chains) have avoided complying with it by considering tips to be part of their employees' earnings.  Unions have been arguing against this, saying that tips are supposed to be a gesture from the customer over and above the minimum wage.  It looks like the unions have won - the government has announced that from October restaurants must pay the minimum wage regardless of any additional tips that employees make.  I imagine this will significantly impact the profit of quite a few restaurants, and perhaps hospitality businesses will find a new way of escaping the rules, but I think most people will agree that in principle it's fair enough.

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HMRC's video library - a useful resource?

HMRC have issued a new series of short videos explaining various aspects of the tax system.  They're specifically for those new to business.  I think that they're a good idea, but they may have some shortcomings.

They vidoes are, in HMRC's words, "bite-sized" (around 3 minutes each, including an introduction and details of further resources at the end), which I guess is necessary in an age of short attention spans.  But that means that there's no time to do anything more than scratch the surface of a subject.  However, tax is sometimes necessarily complicated, and in the case of the video, say, about Business Allowances, I'd imagine the rushed explanation of what constitutes capital expenditure versus revenue expenditure might be a bit confusing for the novice.  On top of that, they also squeeze in sections  on both R&D credits, which is a bit odd when 99% of businesses won't qualify for them, and child and working tax credits, which is just bizarre, as they're not in any sense business allowances.

However, saying that, the videos are not really aimed at me!  If you find them useful, let me know.

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