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ARE INCUBATORS THE WAY TO ACCELERATE SMALL BUSINESS SUCCESS?

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There are plenty of clichés to describe how it feels to run an SME. ‘Backs against the wall’, ‘keeping your head above water’, ‘a rollercoaster ride’. For many, while starting off a business is the best thing they’ve ever done, such clichés paint a picture of the tough situations founders sometimes find themselves in trying to survive and thrive.

Starting and running a SME does require blood, sweat and tears. But this doesn’t stop founders being optimistic about growing and ultimately breaking through the start-up chrysalis to become a smooth-running, successful business.

This is perfectly illustrated by the FSB’s latest survey. It claims that three-fifths of SMEs expect to grow in the next 12 months and that record breaking confidence is set to see small firms continue to spearhead the economic recovery.

What’s driving this growth, confidence and success? One potential contributor is that it’s partly down to the swathe of support given by incubators, accelerators and ‘Tech Cities’ that are popping up across the country to help nurture individuals and businesses.

There’s the hyped Silicon Roundabout in London’s Shoreditch. There’s also Seedcamp that has support from Google and Facebook. Ignite100 has a big presence in the North of England. And then there are global organisations like Techstars.

Will these hubs support your business? Here are some things to consider.

Incubators are great because:

  • They offer a collaborative office space: It’s not unusual to hear a founder talk about spending 18 hours a day cooped up in a garage. While this is admirable, having access to a shared space filled with like-minded and energy fuelled individuals can be invaluable. It creates a backdrop where ideas, creativity and innovation are readily shared between peers. Some spaces are huge and have a constant churn of new individuals racing in and out in an attempt to kick start their business. Others are smaller and have members that bed in for a while to get their business off the ground. Either way, there’s a diverse pool of ingenuity and ideas to tap into.
  • They provide a good source of advice: Any good incubator will be laden with investors, VCs and mentors who have a record of making businesses and ideas of all sizes work. They also have a vested interest in making your business succeed. When the business is up and running, this collection of individuals can provide connections that will help you take your business to the next level.
  • They can help you expand your network: Birds of a feather flock together in business. An entrepreneur will be drawn to an incubator that has form in growing a business in a relevant sector and by virtue of this, will throw up plenty of networking opportunities with relevant individuals. This might be through unearthing cheap or unique suppliers, discovering processes that build efficiency or simply the opening of a right door to get those crucial first leads in.
  • You can access and pool resources: The small things count when running a business. Not having the nuts and bolts in place wastes time and money. A small but significant support incubators and accelerators provide are free resources such as IT equipment and Wi-Fi, crucial in your earliest days when time and budgets are tight.

They may not be necessary when:

  • There are plenty of other funding sources: Decent amounts of cash can be dangled in front of start-ups by incubators and while this is useful, there are many other ways to secure funding. Stats from the Bank of England’s Funding for Lending Scheme show that most small business aren’t getting help from the banks. Instead, options come in the form of regulated crowd funding platforms like Funding Tree or online business networks like Tradeshift which gives loans on the back of data collected from within its network. The Government is also working on its ‘British Business Bank,’ which aims to learn from the mistakes of previous SME lending schemes.
  • You need to hang on to as much equity as you can: Many incubators take a percentage of equity for the privilege of their funding, counsel and the use of their services. This is a tough call on many levels. In the early days of a business it can feel like everyone who helps asks for a slice. There are some that only ask for a low percentage or others that don’t require equity at all, but these are usually government-funded grant programs that charge members monthly dues.  Either way, there is usually something required in return, and a judgement call should be made on whether turning a back on funding and support is worth it to protect your share.
  • You don’t need to be based in the centre of the action: London is a big tech hub. Cambridge is an innovation capital. York was in the news recently, labelled the latest start-up scene. But what if there’s no market demand for your product in the area that the incubator is in? If a business is localised, such as a manufacturer or retail organisation, it’s unnecessary to tie it to somewhere unrelated. Especially as around these hubs the likes of cost of living and labour tend to be high. Also, setting up outside a tech hub gives you the impetus to get out and work on the move, which can be critical in a business’ early months when as much time as possible should be spent on the ground getting in leads.
  • Tech is available to everyone: The cloud, internet and mobile are reducing the need for physical hubs and workspaces. A business can be based and run from anywhere, consultancy and inspiration can be taken from numerous online sources, and leads can be generated by just popping a laptop down and working from a coffee shop. It makes little sense to run many micro businesses from an office. Also, a lot of the collaborative tools, systems and processes that are provided by incubators now have cloud-based rivals at a fraction of the cost. There are online tools that will help you manage cash flow, find investors, indeed, manage an entire organisation – freeing up time to run and build the business.

So, while ideas, connections and a helping hand can be sought from incubators, it’s not the be all and end all. With the right technology and support you can run your business – and its crucial business processes – from anywhere, so it’s just a matter of figuring out what’s right for you and your business.

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Audi aims to sell one million cars in China in 2023

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Audi aims to sell one million cars in China in 2023 1

BEIJING (Reuters) – German premium automaker Audi aims to sell 1 million vehicles in China in 2023, versus 726,000 vehicles in 2020, the brand’s China chief Werner Eichhorn said on Wednesday.

Audi, which is making cars in the world’s biggest auto market with FAW Group, will also add more products in China, Eichhorn said. Audi’s rivals include Daimler and BMW.

(Reporting by Yilei Sun and Brenda Goh; Editing by Himani Sarka

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Netflix forecasts an end to borrowing binge, shares surge

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Netflix forecasts an end to borrowing binge, shares surge 2

By Lisa Richwine and Eva Mathews

(Reuters) – Netflix Inc said on Tuesday its global subscriber rolls crossed 200 million at the end of 2020 and projected it will no longer need to borrow billions of dollars to finance its broad slate of TV shows and movies.

Shares of Netflix rose nearly 13% in extended trading as the financial milestone validated the company’s strategy of going into debt to take on big Hollywood studios with a flood of its own programming in multiple languages.

The world’s largest streaming service had raised $15 billion through debt in less than a decade. On Tuesday, the company said it expected free cash flow to break even in 2021, adding in a letter to shareholders, “We believe we no longer have a need to raise external financing for our day-to-day operations.”

Netflix said it will explore returning excess cash to shareholders via share buybacks. It plans to maintain $10 billion to $15 billion in gross debt.

“This is in sharp contrast to Disney and many other new entrants into the streaming market who expect to lose money on streaming for the next few years,” said eMarketer analyst Eric Haggstrom.

From October to December, Netflix signed up 8.5 million new paying streaming customers as it debuted widely praised series “The Queen’s Gambit” and “Bridgerton,” a new season of “The Crown” and the George Clooney film “The Midnight Sky.”

The additions topped Wall Street estimates of 6.1 million, according to Refinitiv data, despite increased competition and a U.S. price increase. Fourth-quarter earnings per share of $1.19 missed analyst expectations of $1.39.

With the new customers, Netflix’s worldwide membership reached 203.7 million. The company that pioneered streaming in 2007 added more subscribers in 2020 than in any other year, boosted by viewers who stayed home to fight the coronavirus pandemic.

COMPETITION HEATS UP

Now, Netflix is working to add customers around the globe as big media companies amp up competition. Walt Disney Co in December unveiled a hefty slate of new programming for Disney+, while AT&T Inc’s Warner Bros scrapped the traditional Hollywood playbook by announcing it would send all 2021 movies straight to HBO Max alongside theaters.

Disney said in December it had already signed up 86.8 million subscribers to Disney+ in just over a year.

“It’s super-impressive what Disney’s done,” Netflix Co-Chief Executive Reed Hastings said in a post-earnings analyst interview. Disney’s success, he added, “gets us fired up about increasing our membership, increasing our content budget.”

Netflix said most of its growth last year – 83% of new customers – came from outside the United States and Canada. Forty-one percent joined from Europe, the Middle East and Africa.

For January through March, Netflix projected it would sign up 6 million more global subscribers, behind analyst expectations of roughly 8 million.

Revenue for the fourth quarter rose to $6.64 billion compared with $5.47 billion a year ago, edging past estimates of $6.63 billion.

Net income fell to $542.2 million, or $1.19 per share, from $587 million, or $1.30 per share, a year earlier.

Netflix shares jumped 12.5% to $564.32 in extended trading on Tuesday.

(Reporting by Eva Mathews in Bengaluru and Lisa Richwine in Los Angeles; Editing by Sriraj Kalluvila and Matthew Lewis)

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MGM Resorts drops takeover plan for Ladbrokes-owner Entain

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MGM Resorts drops takeover plan for Ladbrokes-owner Entain 3

By Tanishaa Nadkar

(Reuters) – Casino operator MGM Resorts International on Tuesday ditched plans to buy Ladbrokes owner Entain after the British company rejected an $11 billion takeover approach this month, sending Entain’s shares down nearly 12%.

The United States is seen as the next big growth market for sports betting, spawning a series of transatlantic partnerships tapping in to European technology and expertise. These include Caesars Entertainment agreeing last September to buy William Hill in a 2.9 billion-pound deal.

MGM said it would not submit a revised proposal or make a firm offer for Entain, which had said the approach announced two weeks ago significantly undervalued its business.

Entain shares closed down 11.9% at around 12.44 pounds in London. MGM shares were up 2.5% at $30.54 in New York trading late on Tuesday afternoon.

“We look forward to continuing to work closely with MGM to drive further success in the United States through the BetMGM joint venture,” Entain said in a statement.

Online betting firms have benefited during the COVID-19 pandemic-led lockdowns, as customers took to playing from home when casinos and betting shops were off-limits.

MGM had previously said a merger with the British bookmaker would be compelling and believed a deal would help expand BetMGM, which the two have operated since 2018.

The proposal, on the basis of 0.6 MGM share for each Entain share, was also backed by billionaire Barry Diller’s IAC. It valued Entain shares at 13.83 pence each when it was first announced.

Complicating matters, Entain Chief Executive Officer Shay Segev decided to step down just seven months into the role and in the middle of negotiations with MGM to take a job with sports streaming service DAZN.

Segev’s departure, as well as limited engagement in talks shown by Entain and a difference in price expectations between the two sides, led MGM to decide to walk away from the deal, according to a person familiar with the matter.

Entain, previously known as GVC, has itself expanded rapidly through a series of acquisitions and owns the bwin, Coral and Eurobet brands, operating traditional British high street betting shops as well as offering online gambling.

“While we are genuinely surprised MGM didn’t up its consideration … we don’t think this changes MGM’s ability to secure equity value enhancing benefits from the attractively growing US sports betting and iGaming pie,” JP Morgan analysts said.

The brokerage said it would not rule out further discussions with Entain depending on how the company shareholders reacted, adding it would be tough for someone else to buy Entain given so much potential equity value coming from the 50/50 BetMGM joint venture.

(Reporting by Tanishaa Nadkar in Bengaluru; Additional reporting by Joshua Franklin in Miami; Editing by Keith Weir and Matthew Lewis)

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