Q I have reached the stage where I have maximised the space at my current premises and if business increases further I will have to consider moving. My problem is location. My business is based in quite a prominent town centre position where I pick up a bit of passing trade, but the majority comes from business leads and referrals although when I speak to prospective customers they do recognise the business from the prominent position of the signage.

There are no suitable (and affordable) town centre premises, which would mean moving out of town to a business park or trading estate. How important do you feel a town centre location is?

A Without actually knowing what your business does it is extremely difficult for me to comment on whether it is necessary to have a prominent business location. If you are selling directly to the public then, without a doubt, you need to have a prominent position with good signage. It may be that you could sub-let part of your premises and perhaps keep just enough to ensure you have a foothold on the high street. Would it be possible to perhaps relocate part of your business, ie perhaps purchase ledger or accounts, and keep your prominent location?

Q I have been working as an employee of a small business for several years. My boss, who I have a good relationship with, has offered me the opportunity to become a director for a nominal investment. I understand the business we do inside out, but I'm not an expert in business itself. What would you suggest I do to successfully make the move from employee to employer?

A I assume you work for a limited company and are being offered shares for your proposed investment. The position of director has responsibilities that you must become aware of. Each director has a duty under section 324 of the Companies Act 1985; details can be obtained from Companies House. After considering this, and if you still want to go ahead and if you have the capital to invest and you know the business is performing well, then you should make the investment. As you will only be a nominal investor I do not think that you necessarily have to be an expert in business itself.

Q I have been looking at ways of developing my customer base, by either courting new clients or strengthening relationships with existing customers, and have been thinking about corporate entertainment. Whether it's a table at a charity dinner or an executive box at a sporting event, does corporate entertainment justify its cost compared to the return it brings in?

A In many areas of business corporate entertainment works very well and tables at charity dinners are one way of helping a good cause and entertaining a number of clients at the same time. I am, however, of the opinion that if the service or product you offer is better and cheaper than anyone else's then people will buy it or use it no matter what you are giving away.

Q How do I stop my business from becoming a "nursery" for bigger firms? I have lost a couple of staff recently that I took on from university, gave them two years of training and experience and they are now leaving me for larger companies in the same field. I can't afford to pay them much more to stay so how do you suggest I can keep hold of my staff?

A Staff will always leave smaller companies for what they see as the better security and better prospects of a bigger company. Offering incentives such as staff share options, a share in company profits at the end of the year are a couple of ways to tie in staff without actually having to increase your wage bill initially.

Q I would like to expand my business outside the North-East. I have a successful shop in this region and think that it can be replicated elsewhere in the UK. I am sure that the service will replicate itself well and I would set the new store up while my existing staff run the North-East operation. At this point it will only be in one location, but I am unsure of where to consider. What factors would you look at when opening a new shop in a new area?

A You should do a detailed analysis of the area in which you are proposing to open your second shop. Check out if anyone is offering similar products to yours and look into the cost of freehold and leasehold premises as well as the cost of employing staff. You should also consider that if you leave your original business would it perform the same without you being on site?

Published: 25/03/2003