Nothing is more satisfying that mentioning the word ‘payroll’ to a room full of business bods and watching eyes immediately glaze over.
It’s this soporific effect that drew me to the sector in the first place. My feeling was that if incumbent companies offering payroll had this impact on captains of industry, surely this was an open door for a new business to shake-up an increasingly dessicated space.
My experience of launching Paycircle, a pensions and payroll platform, is nothing out of the ordinary for other start-ups attempting to disrupt other set-in-their-ways industries.
The assumption that you’re bringing something new and shiny to market isn’t enough to upset the apple cart when you’re fighting for market share against brands with established reputations – so instead of just keeping your head down and ploughing on, here are a few things to consider when breaking into ‘drier’ sectors.
The experience among small businesses of running payroll usually fell into two camps; either they were forking out to outsource the function of payroll to accountants and payroll bureaux; or they were having to grapple with overly complicated (and often outdated) software that made the whole process of paying employees feel like reading Baudelaire translated into Wingdings.
Our challenge was one that other disruptors entering traditionally dry sectors have to deal with, too; namely overcoming accepted wisdoms and thinking differently. In the payroll and workplace pensions space, this was the impression that management tools need to be clinically convoluted to be fit for use. We created an automated platform that anyone who could operate a mouse would be able to use without losing the layers of complexity that sits behind the whole process of paying people.
The obvious way to stand out in a traditionally dry-as-dust sector is to zig when everyone else is zagging. That doesn’t just mean lightening up in terms of marketing and presentation, but also in how you present and price your model.
So instead of making customers buy access to your platform for a minimum of six months or a year, be more nimble; pricing per employee or scrapping the need for cumbersome contracts altogether shows that your business lives and breathes that laissez-faire image that your advertising is working so hard to prove. Think about free online support too for all parts of the ecosystem. In our case, that doesn’t just mean accountants and HR bods, but employees who want to get hands on with their payroll as well.
Understand the landscape
In my experience, payroll is a fundamentally divisive topic. Satisfied employees mean businesses run effectively and yet the process of paying employees is often thought of as secondary to actually carrying out day-to-day work, but naturally you can’t have the first without the second, so why is there such a disconnect here?
Well, the nuts and bolts of managing a business – especially for SMEs – have piled up and become increasingly complicated over the last couple of years. The government’s workplace pensions rollout, the move to make companies report their taxes quarterly as well as the introduction of new data protection rules under GDPR, are all adding to the burden. In fact, small businesses now spend 120 days every year on admin alone.
Understanding that small businesses are under the cosh in terms of both time and money is key here. Creating something that radically disrupts an industry is only effective if it helps address central issues – in our case, that was removing as much of the heavy-lifting from small business owners as possible.
It’s not rocket science but it’s easy to become carried away by the notion that your product’s very existence is enough to make an impact in an otherwise staid sector. Scope out your targeted industry and make sure that you’re addressing issues instead of just being dazzled by your own brilliance.
Cat Pinkney is co-founder of Paycircle.