Rainbow generates about 80pc of its turnover from its wholesale business, which sources designer fragrances in overseas markets or at times of the year that afford a pricing advantage, selling them at value–oriented chains in the UK The remaining 20pc comes from Rainbow's own–brand cosmetics SUNkissed and Active Cosmetics, which are both sourced and manufactured in China and sold to airlines such as Thomson and Monarch and retailers including Argos.  Mr Sharman said the initial gains were made in Rainbow's key markets of Denmark and Norway but the business has also learnt a lot about China from the Thought Exchange and is developing a plan to launch retail products there and elsewhere in the Far East.  "We will definitely consider China but, as we found in Shanghai, knowing the market is extremely important before going into it. We will not do it this year but probably the year after. We have to be very careful because in the Far East, they have different skin tones so we need to do lots of testing and we need to make sure we can source the right supplies."  Rainbow, which manufactures its own–branded products in China through outsourced providers, would also like to establish a buying office in China to speed up sourcing and production.  Separately, however, the firm received an unexpected benefit from taking part in the business Thinking programme when it was contacted by a Business Thinking finalist who attended a Thought Exchange in a different continent but read about Rainbow in The Daily Telegraph's coverage of the initiative and has become a distributor for it in Eastern Europe.  Polish–born Jack Ostrowski is managing director of Skipton–based Yellow Octopus, which buys end-of-line garments from wholesalers and manufacturers that supply major UK retailers such as Marks & Spencer, Next and Topshop, re–badges them and sells them on to wholesalers, chain stores and independent retailers in more than 20 countries.  A Business Thinking finalist for the north–east region and a participant in an HSBC Thought Exchange in Mexico City, he spotted the synergy between clothing and fragrances and suggested to Rainbow that the firms work together.  "He called us out of the blue and is now exporting our products to Eastern Europe," says Mr Sharman, who is targeting export sales of £5m for Rainbow this year and expects overall turnover to be flat, reflecting softening conditions in the UK.  Yellow Octopus now has a turnover of more than £5m and employs ten people. Last year it won a Queen's Award for Exports. Mr Ostrowski said: "HSBC Business Thinking has helped us learn about networking and business develpment and really given us an edge going forward."  The Rainbow–Octopus alliance is a perfect example of the Global Connections, Local Opportunities theme of the 2011/12 HSBC Business Thinking programme, aimed at identifying and supporting leading thinking businesses, stimulating international growth and rewarding innovative enterprises. The initiative offers UK businesses a share in £108m of lending, with 18 regional winners each eligible for up to £6m of funding plus cash rewards equivalent to 2pc of the borrowings, up to £120,000.  The overall winner will see their financial reward doubled up to a potential £240,000. A total of 54 finalists, competing in nine regional heats, will also take part in all expenses-paid, week-long Thought Exchange visits to Brazil, North America, the United Arab Emirates, Hong Kong and Europe.  These will provide opportunities for networking and developing further the business strategies needed to thrive in the global economy. Finalists will receive extensive coverage in The Daily Telegraph and The Sunday Telegraph as well as on www.telegraph.co.uk website.  Put your company in the running  To enter, businesses must be based in the UK, have been operating for two years or longer and have an annual turnover of £2m.  They also have to be able to provide profit and loss and balance sheet information for a minimum trading period of 12 months and to give projected financial data for a minimum of two years.  They will need to demonstrate how their forward–thinking translates into business action and how they could benefit from HSBC lending to further develop their business.  Entrants from nine UK regions are invited to make a case for the quality of their business thinking online at www.hsbc.co.uk/ businessthinking.  Applications close on June 10, with panels then choosing the six most compelling applicants from each region and inviting them to take part on an international Thought Exchange to one of the five global destinations between October and February 2012.  On their return to the UK, the finalist will pitch to a panel of judges and two businesses from each region will be chosen as regional winners.  Following a further pitch to the national judging panel, the regional winners will be invited to join HSBC at an International Insights event in London, where the overall UK winner of Business Thinking will be announced .
If you want to expand your business, then HSBC's networking initiative can    help. Andrew Cave reports.