Adventures In Micro-Business: How do I win a Government contract?

Each month Professor Russell Smith answers your queries, and profiles a small business facing a big challenge

Q. I'd like to implement an annual performance appraisal. Although only one of my three employees is performing poorly, I want to have a system that is fair for all. Where do I start?

A. The best place to start is with the job description associated with each employee's contract of employment. In addition, you should have ideally set a series of sensible and achievable objectives for the year for each of your employees. The appraisal then becomes straightforward since it boils down to a comparison between expected and actual performance over the year. If you don't have job descriptions for your employees then you'll need their agreement to put those in place retrospectively and to amend their contracts of employment accordingly. That would also create an opportunity to discuss with all employees whether you believe they are currently performing at the level you expect.

Q. A friend of mine has just won a large contract from a public body. Where does one find out about such opportunities?

A Government contracts have often been difficult to access for the smaller business but a recent initiative (log on to www.supply2.gov.uk for further details) available from Business Link aims to connect suppliers with "lower value" (worth less than £100,000) contract opportunities.

Q. I am about to lauch a mobile valet service for car owners and, as far as I can see, have little competition in my town. What do you suggest is the best form of advertising for this kind of business?

A. Firstly, why not issue a press release to local newspapers announcing the launch of your new business? The launch of your business represents local news and a one-page release would be appropriate. Include your full contact details, background information about the services that your mobile valet service can offer and include a quote from a satisfied client to add human interest. You should also provide high-quality photographs to accompany the piece. Secondly, target trade users by sending a one-page description of services to all car sales businesses in your area. Finally, you could advertise on the private car sales pages of local newspapers - many people have their car professionally cleaned before selling it.

Q. I run a small business with 10 employees of which three have recently announced their pregnancy. I am worried about the impact on my business and what I need to do to comply with regulations. Can you suggest a source of information?

A. The Business Link website contains a helpful section on managing expectant and new mothers at work entitled "Bumps and Babies" (www.business link.gov.uk/bdotg).

Q. I've been thinking about selling my business and a friend has advised me to learn about "due diligence" and "warranties". Can you explain what these are please?

A. Any buyer will wish to conduct a thorough investigation of information provided by you as part of the "seller's disclosures"; this is known as due diligence. Typical information to be disclosed will include full trading accounts and confirmation that the business is not involved in any litigation. As the seller, you may be required to give "warranties" as to the accuracy and completeness of the information that you provide. Such warranties may include a financial penalty for you if something that you said turns out later to be untrue. It's important to always have a lawyer act on your behalf.