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Posts for January 2010
Plan for growth in your business
January 28, 2010
If your business is to continue to expand and grow, then plans need to be put in place for that growth potential to occur right from the start. If you make a smart choice when you set up your business Internet services, then you’ll have faith in its capacity to expand as your business grows. But if you don’t choose right first time, you may end up paying the price when you need to shell out to cover the expense of expanding your Internet operations each time your business or organisation grows.
If you wish to save time and money, then it’s best to choose an Internet services company with the flexibility for expansion built in:
Multi User VoIP:
Voice over Internet Protocol, or VoIP, is growing in popularity with businesses due to its flexibility, cost-effectiveness and quality of service. VoIP to VoIP calls are free and the system is easy to set up with no expensive capital outlay at the beginning. With Multi User VoIP, you can add internal extensions to your existing VoIP phone services quickly and without any additional cost, allowing your rapidly expanding call teams to respond to increasing demand.
Email:
Exchange allows you to share all your important information with others and access your mail on your computer or mobile device. Share calendars, files, and address books and ensure that everyone is using the same up to date details. As your needs change and your business grows, increasing your email services will simply be a matter of adjustments, not having to look for a brand new product.
Broadband:
The standard broadband should give you the fastest possible speeds that your telephone exchange will allow. Broadband should also give you a very generous bandwidth limit and direct access to a VoIP network, like the Gradwell. However, as your organisation grows and your needs change, you may need faster connection speeds, more bandwidth and line prioritisation with a separate line for data, to free up your VoIP phone line as the number of calls increases.
Web Hosting:
Getting reliable hosting for your web activities is vital from the start. Poor hosting leads to down time that damages reputation, productivity, confidence and sales. It’s important that your web hosting is reliable and robust enough to ensure your site can handle all the demands that could be made on it – particularly when an influx of new visitors occurs, if there’s a sudden surge of interest in your business. Many companies fail to plan for these surges and end up with their sites going down when visitor numbers spike.
Your web host should provide plenty of web space, quick speeds and reliable, expandable services, and if they don’t – maybe it’s time to look elsewhere.
Peter Gradwell, Gradwell
Lessons learned at Small Business 2.0
January 28, 2010
Small Business 2.0 was held on Saturday 23 January. Now in its second year, it’s an event dedicated to helping small businesses profit from the web. Emma Jones went along and picked up some useful nuggets.
Business at the weekend
One of the reasons I like the Small Business 2.0 event is that it’s held on Saturday. Not only does this mean it’s accessible to 5 to 9ers (those holding down a day job and building the business at nights and weekends) it also means there’s a relaxed feeling about the place as attendees listen, learn, and meet new people in an informal setting.
These ingredients came together well on Saturday and were the recipe for an interesting and enjoyable day. Here are a few things I picked up:
- A bit of trivia – the first item ever sold on eBay UK was a Scorpions CD at the price of £2.89.
- eBay has more than 17 million monthly unique visitors and offers more than 15 million items for sale. There are 123,000 full time eBay businesses, generating more than £1.7 billion per year in turnover. To date, $600million worth of business has been driven through the eBay iPhone application. The company expect this to become an even more popular way to shop.
- E-commerce continues to climb: the numbers of people shopping online – and the amounts they are spending – is increasing at a rapid rate. So it’s still a very good time to be starting an online trading business.
- Customers are becoming more demanding: the majority of customers expect their online shopping experience to be as good as, if not better, than an offline shopping experience, placing the onus on the store owner to make it as simple and enjoyable as possible.
- The secrets to success in creating a successful online venture can be summed up as having: Great products, Competitive prices, Outstanding service, Giving something back.
(eBay report that even though sellers participating in eBay for charity give 10 per cent of the sales price to charity, their products are 20 per cent more likely to sell, at a better price. This resulted in $50 million being raised for charity in 2009).
- Enterprise is alive and well: I met a number of people in the early stages of starting a business, from Domino Duhan who is soon to launch Flog.com as a place to create a free online store, to Steven and Zoe who travelled from Worcestershire to pick up tips for their new venture selling cottage gifts.
Altogether, there was a great vibe and positive signs that 2010 will be another exciting year for anyone starting and growing an online business.
Emma Jones is the founder of Enterprise Nation and author of ‘Spare Room Start Up – how to start a business from home’. Her next book ‘Working 5 to 9 – how to start a business in your spare time’ will be published in May 2010.
Gym’ll fix it?
January 26, 2010
Every business has its sales peaks and troughs. A gym in January is supposedly one of the classic peaks. “I’ve eaten too much turkey, I must go to the gym and punish myself”.
The small club I run in Bristol was founded on the concept of “ethical exercise”, because we are not dealing with inanimate objects, but real people. In practice, we pride ourselves in telling people what they need to do, which usually differs from what they wanted to hear. This concept is not unique to the fitness industry.
The big question for us is this: Should we take advantage of the public’s desire to abuse themselves with a gym machine on the assumption that if we don’t take their money someone else will? We could put the fund to good use. Or should we “maintain our professional integrity” and tell them the truth, that it’s better (for the body’s physical and psychological health) to bang your head against a brick wall for 30 minutes than attempt to purge excesses with exercise?
The question is further complicated by both our hot water and central heating boilers breaking down in December, requiring an outlay of just over £1,500. It would, of course, be tempting to try to recoup that from some January lemmings.
In one of my favourite training handbooks, Superslow by Ken Hutchins, there is a chapter about the “Real vs assumed objective”.
The Real objective is to deliberately stress the body to illicit a response for the better (faster, stronger, etc). The assumed objective is to set yourself a target (eg 12 reps/5km) and cheat just to get there.
As I often do, this was applied to the above “big question”, which leads to the following answer. My business is based upon ethical exercise and it must succeed or fail on this principle, otherwise the Real objective is compromised.
Please don’t think I’m preaching. I still haven’t got the heating fixed, but I’m sleeping well at night.
Ross Campbell, The Exercise Club
How to make a profit in a week
January 25, 2010
A journalist calls to ask how long it takes to make a profit when starting out in business. ‘It depends on the business’ replies Emma Jones ‘but I’d say it’s perfectly possible to turn a profit within the week.’ Here’s the feature to discover if Emma got her facts right.
Let’s take a business
This feature will not apply to all businesses but let’s take the example of someone providing goods and services to consumers (a craft business) and someone offering professional services (a book-keeper.) This is how they each become profitable by week end.
Example 1: The craft business
Monday
Make item with cost of raw materials being £5.50.
Photograph item with family camera, ensuring professional/high quality presentation.
Tuesday
Upload profile and photo to 3 craft sites which levy a small charge (or free) for listing and exercise a sales commission. Sites such as:
- Etsy.com – listing fee of 20 cents per item and 3.5% sales commission
- MISI.co.uk – listing fee of 20p per item and 3% sales commission
- Coriandr.com - listing fee of 20p per item and 2.5% sales commission
Wednesday
Promote product via Twitter and Facebook. Include a link to the shop so people can click and buy.
Send an email to friends and family (personal, as opposed to group email) to announce the product and, again, with a link.
Thursday
Upload pictures of your product to Flickr so the large audience there can see it too.
If you have a webcam, make a short recording of you making products and upload to YouTube.
Call local stores and boutiques to ask if they would consider selling your stock.
Friday
You’ve attracted interest and made a sale! Sales price is £25.99.
Cost of making sale:
Raw materials: £5.50
Listing fee: 20p
Sales commission: 78p
Marketing & promotion: zero cost but your time
Profit for the week: £19.51
Example 2: The book keeper
Monday
Start a blog using free blogging platforms such as blogger.com or wordpress.com – with helpful posts on book-keeping technique, this will help you be seen as an expert in your field.
Promote blog via Twitter.
Produce business cards. A pack of 50 cards can be bought for £12.99 from Moo.com.
Tuesday
Attend local networking event.
Post in online business forums with helpful book-keeping advice.
Wednesday
Approach small business sites with an article for them to upload that will interest & assist readers (include a link back to your blog so people can make contact).
Thursday
Call local accountancy practice to ask if they require outsourced book-keeping.
Friday
Secure first client! Contract to carry out book-keeping for local home business at rate of £50 per month.
Cost of making sale:
Business cards: £12.99
Promotion and networking: zero cost but your time
Profit in first month: £37.01
Doing the sums
The beauty of both of these examples is that all this promotion and sales generating activity can be done by ‘Working 5 to 9’ ie it’s possible to keep hold of the day job and build your business (and profit) by working nights and weekends.
The secret is in keeping costs low (by being home based and making the mot of free social media tools) and focusing on making that first sale. In which case, it’s perfectly possible to realise profit in just five days. What’s stopping you? Get that business started!
NB. This feature assumes access to a home PC/laptop therefore costs of IT equipment not included.
Emma Jones is Founder of Emma Jones is Founder of Enterprise Nation and author of ‘Spare Room Start Up – how to start a business from home’ Her next book ‘Working 5 to 9 – how to start a business in your spare time’ will be published in May 2010
When to register for VAT
January 22, 2010
There are many excellent articles around on when to register for VAT, including the one on the Start Up Donut, so I'll try not to repeat what is already available.
So, you’ve recently set up or are about to start your business and you want to know what to do about VAT. You should do this when you draw up your business plan and cashflow forecasts, because it could affect your profitability.
What’s the first thing you need to do? Find out the VAT treatment of what you’re selling. The key questions are: would you have to charge VAT if you were VAT-registered? If not, is that because your supplies are exempt from VAT or zero-rated?
This latter point is an important distinction. In simple terms:
- if they are zero-rated, you can reclaim VAT you pay on your expenses.
- if they are exempt, you won’t be able to register or reclaim the VAT on your expenses.
If you fall in the latter category, there’s no need to read on.
Otherwise, what you do is liable to VAT at 0%, 5% and/or 17.5%. How do you work out when to register?
The registration limit is based on the value of your taxable supplies (ie the value of what you’ve sold that attracts VAT, in the past 12 months).
Keep track of this by recording at the end of each month what your taxable turnover has been. Add up the past 12 months to see whether you've gone over the registration limit. If so, you need to apply for VAT registration within 30 days of the end of the month in which your turnover went over the limit.
If you went over the registration limit in less than 12 months, you should still apply to register at the end of that month. Don't wait for the end of a 12-month period or you might find yourself liable to a penalty.
Should you apply to register for VAT before you go over the registration limit? That’s a very difficult question to answer and one that can only be determined by you with help from your advisers. There can be benefits to being registered for VAT, particularly where you customers are wholly or mainly businesses that are VAT registered. They will be able to recover the VAT you charge. Some suggest that being registered gives your business a certain credibility, after all, who would register for VAT unless they had to?
One thing that makes this decision a bit of a no-brainer is if you are only selling things that are zero-rated because you will get back the VAT on your expenses, but not have to account for VAT on your sales. This way you get paid by HMRC when you put in a VAT return. The only thing you should consider is whether you will be claiming back enough VAT to make the hassle worthwhile.
Robert Killington, VATark
Eight reality checks for social enterprises
January 21, 2010
This week, Doug Richard, former Dragons’ Den investor and founder of the School for Startups hosted a ‘bootcamp’ for social enterprises in London. Much of the day focused on comparing businesses run to generate profit for shareholders with those run to create a social impact. Just how “business-y” should a social enterprise be?This week, Doug Richard, former Dragons’ Den investor and founder of the School for Startups hosted a ‘bootcamp’ for social enterprises in London. Much of the day focused on comparing businesses run to generate profit for shareholders with those run to create a social impact. Just how “business-y” should a social enterprise be? Richard attempted to answer the question by focusing on the realities of running a social enterprise in a competitive marketplace. Here are eight lessons that every social entrepreneur would do well to bear in mind:
- Don’t assume that being “good” is good enough. If the sole difference between your social enterprise and other businesses in the same marketplace is that you are “ethical”, ask whether that is enough in itself. You may need to rethink your offer or your business model.
- You’re in the business of marketing and selling something to somebody. Whatever your ethical objective, you can’t achieve it unless you are selling people something they actually want. Like any business, you need to know your customers, understand your market, and so on. As Doug Richard puts it: “Understand the industry you are in and you can understand how to prosper within it.”
- People will not queue up to give you money. Just because you are doing “good”, that doesn’t mean people will lend to you or invest in your business. The “market” is mostly indifferent to the good that you do; your enterprise has to be strong enough to survive on its own terms.
- Do one thing and do it well. Successful businesses tend to have one type of expertise; those trying to do too much often over-reach themselves and fail. “A narrow business is better than a vague one,” according to Richard. Whether it’s the thing you’re selling or the thing you’re giving, do one thing and do it well.
- You don’t have to be a “social enterprise” to be a social enterprise. The legal forms of social enterprises (such as Community Interest Companies) are still evolving and you may find they limit your capacity to grow. There’s nothing wrong with being a limited company with a social purpose. Richard advises going down this route and incorporating your ethical aims into your company memorandum and articles. (NB: this can be a confusing area as this blog by The Capable Manager explains. Mi-Tee have also kindly offered to share their solution to this problem if you contact them via their website).
- Present your cause in a way that actually engages people. As Julie Devonshire of Global Ethics Limited, which runs The One Foundation, puts it: “You have to make your cause so brilliant that people will not just listen but will get off their backsides and act for you.”
- Try to avoid paying for anything. Global Ethics Ltd got BT to give them £3.3 million of human resources. They also paid just £293 for a television advert that would normally cost £200,000. Do everything in your power to persuade people to give you things for nothing.
- Don’t give it all away. Says Doug: “You need to give away exactly as much as your business model can afford to sustain and to grow.” It’s obvious really; if you’re giving everything away, you have nothing left to develop your enterprise so you can give even more away in future.
Simon Wicks, BHP Information Solutions
Alternative Online Marketplaces
January 20, 2010
Whilst eBay and Amazon are still the undoubted Goliaths of the online marketplace world, some smaller marketplaces have quietly been doing pretty well. Selling on these marketplaces can help retailers to reach more customers and increase sales.
Play.com (PlayTrade)
Play.com is the fourth biggest online retailing site in the UK (ranked by visits) after eBay, Amazon and Argos. Play is strongest in media categories (i.e. music, books, DVDs) but in total sells across 12 categories including clothing, electronics and tickets. Play is predominately a UK based site with a small US presence which sells DVDs only (playusa.com).
PlayTrade is Play.com’s fixed-price marketplace. It works in a very similar way to Amazon with retailers adding offers to existing Play.com catalogue items and paying a commission on sales (15 per cent). PlayTrade products can be sold across all Play categories in either new or used condition. All products on Play, including marketplace products, are offered with free shipping, so this must be factored into the price.
PixPlace (Pixmania.com)
Again modelled very much on the Amazon model, PixPlace is the online marketplace run by Pixmania.com. Pixmania is an online retailer owned by the Dixons group which sells across 26 different European countries. The background of Pixmania is in digital cameras and so the platform is particularly strong in this area. PixPlace allows sellers to sell across all of its 11 categories in either new or used condition and charges 15 per cent commission.
PriceMinister
PriceMinister is the second biggest eCommerce site in France and has recently opened up a UK site (www.priceminister.co.uk). Like Pixmania the platform is pan-European and available to residents from 18 European countries and territories. Unlike Play and Pixmania, PriceMinister does not sell any of its own products with all products sold by individual and business sellers. Most items on the site are at a fixed price - although sellers can opt to accept offers - and can be in new or used condition. Listing an item is free of charge but naturally there is a commission on sales.
Etsy
Launched in 2005, Etsy is a fixed price marketplace for handmade items which must be made by the seller. Vintage items and craft supplies are also allowed. This is a niche which is not well served by eBay and not at all by Amazon. As might be expected from a craft and design-focused site the site’s design and usability is great and there is a vibrant community of artisans.
On Etsy, commission listing fees are very low (3.5 per cent) and there is a nominal $0.20 to list an item for four months. On the downside the service is very US-centric
Abebooks
Abebooks is an online marketplace specifically for books, both new and used. The service is open only to professional sellers and has a presence in seven countries. Booksellers pay a monthly fee dependent the number of listings and a sales commission of 8 per cent (plus card a processing fee of 3.5% - 5.5%)
Alibris
On Alibris, professional or individual sellers can sell books, music and films either in new or used condition. The service has US and UK sites but also allows international sales. Like Amazon, Alibris has is own stock alongside which it allows third party sales. Sales commision is 15 per cent and there is also a monthly fixed fee dependent on the number of listings
MyShoppingBank
MyShoppingBank is a fixed-price marketplace previously known as eDirectory. The site charges a commission on each sale and a fairly hefty annual fee (several hundred pounds). All products are sold at a fixed price and the platform is only open to professional sellers. MyShoppingBank differentiates itself from the other marketplaces by offering cashback, sharing some of its commission with its users.
Other Marketplaces
- eBid (www.ebid.net). An auction site with a presence in 18 countries.
- CQout (www.cqout.com). Online auction site with a UK and Irish presence.
- Specialist Auctions (www.specialistauctions.com). A collectables focused auction site.
- Toymart (www.toymart.com). A specialist toy auctions site.
- Wigix. (www.wigix.com). Catalogue based fixed price marketplace.
- Aroxo (www.aroxo.com) Reverse auction marketplace
Trevor Ginn runs the online baby store Hello Baby and is a consultant at Vendlab. He blogs at www.trevorginn.com and you can follow him on twitter @trevorginn
Is it really so easy to set up and run a successful business?
January 19, 2010
I'm sitting in the lecture theatre of the Royal Institution, listening to the investor Doug Richard, founder of The School for Startups, tell an audience of potential social entrepreneurs the 20 questions that every successful business should ask themselves. The questions cover most aspects of business operation - market understanding, differentiation, industry knowledge, business model, pricing, operational dynamics, people.
The good thing about Doug Richard is that he keeps it simple. He tries to deal in the realities of running a small operation, is sceptical about big business and the claims of people touting big theories. Moreover, he's interested in doing things cheaply and effectively. It's good solid stuff and the questions are smart and get to the point.
So, in relation to your market, the three key questions are:
1) How many are there?
2) How can we reach them?
3) How many can we reach?
It's good, basic stuff that people well-versed in business might nod sagely and carry on - though it bears restatement often. However, the difference today is that this is an event specifically for social entrepreneurs. These are people who might not be "entrepreneurs" in the conventional sense; who perhaps are driven more by values or a charitable principle than by the desire to make profit. So the mechanisms of marketing and sales may be quite alien - and even frightening - to them.
But the truth is, as Doug points out, no matter how you dress it up, you can reduce marketing and sales to core principles. You need a product, you need a market for that product, you need a business model that suits your product and your market, and you need to price your product correctly. That's more or less it.
On the way, you get lots of gems. Pricing theory is misleading, says Doug: the way you price a product is to sell it to people. Efficiency counts for an awful lot: look at Tesco - few people say they like Tesco, but they shop there nevertheless. Don't listen to the opinions of friends and family about your product: they will give you a polite answer, not a truthful answer. "Every business needs three people: someone to sell, someone to deliver and someone to count." And so on, and so on.
Worthwhile? Absolutely. And I'm sitting here thinking "Wow, it's all so simple. If it's this easy, why haven't I started a business?" Ah, that's a much more difficult question to answer and I doubt even Doug would have a satisfying answer for that one.
Simon Wicks, BHP Information Solutions
Online filing tips for the January deadline
January 15, 2010
The deadline for submitting your tax return is fast-approaching. Below are some tips to help make this an easier process.
31 January deadline
If you have a tax return and do not file it on time you will be fined £100.
If the return was issued in April 2009, or any time up to 31 October 2009, it must be submitted by midnight on Sunday 31 January 2010, with a very small number of exceptions.
(If you were sent a return after 31 October 2009, you have three months from the date it was issued. You can file it online or by paper, and the guidance below does not apply to you.)
If HMRC receive your tax return after 31 January you'll get a late filing penalty of £100.
Avoiding Penalties
If you pay all the tax you owe by 31 January you will not need to pay the penalty.
Submitting your tax return
You will now need to send your return online. If you send in a paper version at this stage, even before 31 January, you will be fined £100.
If you have previously filed online you can use the same system as last time.
You will need your user ID, which was sent by HMRC when you first registered. If you cannot find it, go to the HMRC online filing site where you will be able access 'lost user id' or 'lost password' services.
You will be asked a number of questions, following which a replacement user ID and password can be issued. These may be sent online or by post. If you think you may have lost the details, give yourself plenty of time to get a replacement.
If you can find neither ID nor password you should contact the Online Helpdesk.
Registering to file online
If you have not previously filed online, you will need to register to obtain an activation code. You will not be able to file online without this code.
The code will be posted to you, and to ensure you receive it on time you must register by 21 January 2010.
Tips for online filing
There can be many people trying to file at the same time. In 2008, 200,000 people filed on 31 January. Try to use quiet periods.
HMRC provide year round online services, 24 hours a day. Avoid delays by accessing them on weekdays after 5pm or before 8am.
There may be maintenance issues. Check the HMRC site for scheduled downtime.
Use the HMRC website for step-by-step guides, and also the built in help available in free HMRC software.
Visually impaired users can access specific help.
Paying your tax
As well as filing your return, whether paper or online, you must pay tax due for 2008-09 by 31 January 2010.
Direct Debit payments are now possible, provided you have registered online. Paying this way allows you to make a payment as soon as you have worked out what it should be.
HMRC now kindly let you manage your finances by setting up regular payments towards your next bill.
Exceptions to online filing
HMRC allow you to submit using a paper tax return after 31 October if:
- Their software cannot handle it, for example non-resident companies.
- You have been told that you cannot!
14 ways to gain free publicity
January 12, 2010
Some ideas are so powerful they generate publicity year after year after year. In my 13-year career in the media, I’ve seen variations of these come up time and time again, resulting in free publicity for the businesses behind the story. The following might encourage journalist to cover your business.
1 Be the first, newest, oldest, biggest, smallest, etc. Journalists get sent a constant stream of ‘average’ all day long – make sure you’re superior.
2 Introduce something new or improved. Make it clear why it’s better and focus on key benefits or problems it solves.
3 Mark the passage of time. Being in business for ten years (quite an achievement), for example, can be enough to secure media coverage, especially if you are organising newsworthy celebratory events.
4 Announce a new member of your team. Doesn’t have to be anyone senior, although the more senior the better. Why are they special? Pinpoint the thing that made them the right person for the job and publicise that. Draw attention to noteworthy aspects of their career.
5 Win an award. It’s why many businesses enter them in the first place. Find out what trade, local, regional or national awards your business can enter and get your entry forms in. You’ve got to be in it to win it.
6 Attract a new major client – the bigger the better. And don’t shy away from boasting about it; get quotes from them if possible. News of big contracts can help to attract others.
7 React to a current event. Give your opinion on something happening in the news nationally or locally that’s relevant to you and your business. Spotting a trend and commenting on it is highly recommended.
8 Provide good comment. Years of experience in your industry could make you an expert. Journalists and readers appreciate experts’ opinion. Be available to comment when journalists need good quotes.
9 Give away freebies. If you have a product, give it away (providing that is cost-effective, of course). Use it to drive traffic from the newspaper, magazine or website to your website. Arranging an exclusive deal with one media outlet might get you more coverage over a longer period.
10 Write articles for free. Share your expertise and help a newspaper or magazine fill column inches with thought-provoking new content. Don’t agonise too much about making sure the copy is grammatically perfect, sub-editors will usually sort our any errors. But make sure you provide insight and engage with interesting facts.
11 Survey your customers. Find out what they think about specific issues. Ask enough people about an interesting enough topic and the media won’t be able to resist. Polls are always popular with journalists and their readers.
12 Get involved with a charity. Don’t just give cash, either – it’s dull and predictable (cheque presentation photos in particular are a relic of the 1980s). Instead, give your time or products. Better still – use your staff and resources to do something that will aid a worthy cause.
13 Do something differently. Journalists love to write about pioneers. That’s why entrepreneurs such as Richard Branson, Stelios and James Dyson have become household names. Break the mould and lead the way, but make sure you provide customers with additional value and benefits they cannot access elsewhere.
14 Stage a publicity stunt. It’s a tried and tested method, but your idea must be fresh, fun, exciting and highly visual (as well as legal and proper, of course) otherwise you won’t get the publicity you seek.
- The first 500 Start Up Donut Blog readers can get a free copy of Paul Green’s book – PR Success Made Easy – here.
10 tax tips for parents running their own business
January 11, 2010
When you operate your own business, bringing a child into the world is a costly matter. The good news is the government offers additional financial support you might not be aware of. The following tips are intended to make sure you get all of your state entitlements.
1 For company directors: make sure you receive the correct maternity, paternity or adoption pay
If you run a limited company, you will pay yourself as a director. Provided you meet the qualifying criteria regarding length of your employment, you are entitled to money your company can recover from the government. If you’re female and are taking most of your income out as a dividend, you will at least qualify from minimum statutory maternity pay (currently £123.06 per week). You can receive this for up to 39 weeks. Partners, of course, qualify for paternity leave, while those who adopt also have a legal right to paid leave.
2 For sole traders and partners: check if you can obtain maternity allowance
If you are not entitled to statutory maternity pay, you could be entitled to the maternity allowance paid by the Department of Work and Pensions. If you were self-employed for at least 26 out of the 66 weeks before you your baby is due, you qualify. The benefit is 90 per cent of your average weekly pay or £123.06 per week if higher.
3 Receive your one-off Health in Pregnancy Grant.
Since 6 April 2009, mothers who are 25 weeks into their pregnancy have been able to apply for a £190 grant towards the cost of pregnancy and childbirth. HMRC will make the one-off payment direct to the mother’s bank account, which she can spend as she chooses. It is not means-tested and will not affect entitlement to other benefits. Claim forms are available from your doctor or midwife.
4 Apply for Child Benefit
Register for Child Benefit as soon as your first baby is born. You will receive £20 per week for your eldest child and £13.20 per week for each of your other children. The benefit is not means-tested. You will receive the benefit until your child reaches 16 (or 20 if in certain kinds of education). A claim can only be backdated three months, so don’t delay.
5 Get your Child Trust Fund voucher
Save tax-free for your children by opening a Child Trust Fund. Accounts are available to all children born after 1 September 2002 and up to £1,200 can be added each year. The government will send you a £250 voucher to open the account and pay in a further £250 on the child’s seventh birthday. All income and gains are built up tax-free until your child’s eighteenth birthday, when funds can be withdrawn or rolled over into an ISA.
6 Apply for Child Tax Credits
Make a claim for Tax Credits, if you have children aged below 16. The credits are means-tested, but you only start to lose your entitlement to the child element when household income exceeds £50,000.
If you return to work, you may be eligible for working tax credits where you work or you and your partner (if applicable) work. If so, you may also be entitled to help towards childcare costs. If your earnings have gone down because of pregnancy, it would pay to make a protective claim rather than one based on the previous year’s earnings.
7 Set up a salary sacrifice scheme for childcare costs
Receive some of your pay from the company in the form of childcare reimbursement. The first £55 of childcare vouchers paid through the company is a tax-free benefit, and if paid instead of salary it will also reduce your National Insurance liability.
8 Have assets transferred to your children and save tax
Your children can receive income of up to £6,475 per year before being taxed. However, parents are taxed on income of more than £100 on assets they have transferred to their children who are under 18. Assets should preferably be transferred from grandparents or other relatives.
Children can also make gains of up to £10,100 tax-free. Transferring assets with better potential for capital growth, rather than income, is generally more tax-efficient. A share in the family business may be suitable.
9 Contribute to your child’s pension scheme
You can put up to £2,880 into a Children’s Stakeholder Pension for each child and the government will add a further 20% to your contribution. Income and gains in a pension scheme are tax-free, but your child will not be able to access the fund until they are 55.
10 Employ your children
Subject to conditions, you may make your children employees of your business, if they are aged 13 years or more. Your business will get tax relief on the wage payments, while the first £6,475 of income is tax-free in the hands of your child. You must consider the legal implications of employing children aged between 14 and 18.
Sources of start-up funding
January 08, 2010
Back in the mid-1990s, my company, Actinic, was set up using my own money and some I borrowed from family and friends. My business partner and I then raised £165k from an angel investor, and later a further £1.5m from venture capitalists, 3i.
At the height of the dot-com boom in 2000, we went public on the London Stock Exchange, raising £25m. A couple of years later, the company de-listed and became a limited entity again.
When you are seeking funds, you won't feel it, but there is plenty of money around. You just need the right formula to tap into. So it's important to understand the keys to attracting investment – particularly from business angels and venture capitalists.
The challenge is that investors – just like those on Dragon's Den – receive numerous approaches, but make few investments. How can you make yourself stand out, and get the cash you need to grow?
I’m assuming that you have a workable business, and a well-written plan that covers finance and marketing without boring too much with detail. However, even when you have these, you still have a long way to go.
There are three keys:
- You must excite investors with the chance to make a lot of money.
- You must convince them that the risk is low.
- You must explain how they will get their profits out. This is what they care about. Get it right and the cash will follow.
Incidentally, the way to generate excitement is to provide hard data on the size of market you can address and what margin you can obtain. This must be evidence backed. Simply saying: “we estimate the market at £100m and will take 70% share” without any facts to back it up is a real turn off. But don’t go into too much detail.
Once there is an initial attraction, the key questions will be about the credibility and commitment of the management team and business generally.
The best answer to is to have a great track record. If you don't, get people involved who do and get experienced people onto your board. This will have a cost, probably in shares. You also need to listen to their advice – no one who is good will stick around if they are ignored.
Investors will also want to be certain of your commitment. Don’t mention any alternative business ideas, because this will be a big turn off. If they put their money in, they want you to be fully devoted to making it grow, becoming profitable as soon as possible.
The next question is whether the business itself is credible. This is best demonstrated by having real sales and customers. In fact, if you don't already have these, you need to ask yourself some tough questions.
Investors will sometimes ask you to put your house on the line. Personally, I’ve always refused, arguing that I had already taken a pay cut to start the business, risked my career and was utterly committed anyway. Finally, I pointed out that such a high price runs the risk of the directors behaving desperately if things get tough – which doesn't promote good business practice or the protection of their investment. I’d suggest you sharpen these arguments up, too.
Many people obtain their investment from family and friends. Assuming you know people with sufficient capital, this has the advantage that it’s easier to tap them. The disadvantage is that if the business fails, which is bad enough, you may also face losing key relationships. And I'm afraid to say that if you believe there is no chance of that happening, you probably don't understand risk and should reconsider your career direction.
I myself borrowed money from family and friends to help get the business going. But I deliberately took the loans on personally, so if the business failed I’d still have to pay them back. And I kept the loans at a level that I would just about be able to pay them off over a few years.
Finding potential sources is the easy part. You can find a list of angel investor organisations at www.bbaa.org.uk, while VCs can be found at www.bvca.co.uk.
Remember, the key lesson is to look firstly at the needs of investors. Only secondly present your need for money and how much sense the business makes to you.
I can’t pretend raising money is simple, and a pre-requisite is having a viable business and plan anyway. We presented to more than 70 investors before getting our first funds. However, if you follow the advice here, your chances will be improved. Good luck.
Online start-up business owners – your SEO blank canvas
January 06, 2010
Sitting down for the first time to outline online objectives for your new business can be particularly daunting. Typically, you’re entering a sector where competition already exists and you may look upon competitors as tremendous obstacles in reaching your own business targets.
Perfectly true, but you have to remember with ‘search marketing strategy’, every online business, big or small, started with a blank canvas, not necessarily a structured plan with objectives.
I was involved with my first online business in 1997. The ability to reach certain search ranking targets was far simpler then – the market was much less saturated. Conversely, the opportunity to track, analyse and develop a search engine marketing strategy gives the 2010 start-up the necessary ammunition to build their SEO (search engine optimisation) arsenal.
As you begin to prepare your online marketing objectives, keep the following five tips in mind, to ensure your time and energies are optimised just as much as your search strategy:
1 Brainstorm and produce a list of 20-25 key 'phrases' that make up your SEO ‘dream ticket’. Do they look like realistic targets within your first year? You probably don't know. If they're single words, I’d suggest they aren't achievable within your first year of trading. My advice would be to add to each of these words or phrases another demographic term, for example, “Widgets" should become “Widgets Hertfordshire” or "Hire Widgets". Setting your SEO expectations too high, too early, can take away from what should actually be seen as tremendous ranking results for any start-up.
2 Track everything and leave no stone unturned. There are a range of tools available, mostly free, which allow you to see exactly what is happening on your website – how people find you, which pages they visit and the all-important terms they type into Google to find your website.
This information can produce the building blocks for a highly optimised search campaign and throw up new and innovative ideas to capture additional levels of traffic. Put the necessary packages in place from day one and review accordingly.
3 Understand - but don't become an expert. Starting a business and having access to reams of data can be tremendously offputting. I had a tendency to look at data on a daily basis, overanalysing each search ranking movement and trying to understand why certain keywords performed in certain ways.
My advice in hindsight? Research your key data on a monthly basis – especially if you’re starting up from home on a budget. As a new website, it will take time for your search positioning to bed in. Seeing rapid movements up and down the ranking can strike fear into most, but it needn't. Concentrate on your core business efforts and compile your analytics data for monthly review
4 Context is king. Your site content will make or break your online business. Poorly drafted content not only detracts from the usability of your site, it provides Google with little opportunity to grant your site authority. Write your content with the end user in mind.
Keep it simple, know when to produce both internal and external links and always field the opportunity to allow your site visitors to communicate. Don't let them wander your site trying to find your contact page or telephone number. Keep everything within context and your site will quickly develop it's own SEO pattern
5 Don't take your eye off of your initial business goal. The web is constantly evolving. New opportunities present themselves each and every day. Try your best not to deviate away from your initial online business objectives. If you receive a call from business X promising to send an email to 100,000 recipients for £x – be wary. Is your business in a position to capitalise on this opportunity? Does this opportunity make good business sense? Does this opportunity seem to good to be true?
What not to do when naming your website
January 04, 2010
OK, so you’ve thought about a fantastic name for your company and it’s time to purchase your website domain. Before you hit the purchase button, it’s always a good idea to run your decisions past someone else.
Why? Because, by shortening two words or more by simply removing the spaces in your business name, your domain name could attract an unwanted audience.
All of the businesses below didn’t spend quite enough time considering how their URLs might appear – or be misread…
- So you want to find out the name of the agent or agency that represents any celebrity in the world, so you can book them for your upcoming event? Who better than ‘Who Represents’ [www.whorepresents.com]?
- You’re a programmer and you need advice or want to provide advice to other programmers. Where better than ‘Expert Exchange’ [www.expertsexchange.com]?
- Looking for a pen? Look no further than ‘Pen Island’ [www.penisland.net]?
- Need a therapist? Try ‘Therapist Finder’ [www.therapistfinder.com]?
- In Italy and need to contact a power company? ‘Italian Power Generators’ can be found at www.powergenitalia.com
- And don’t forget the ‘Mole Station Native Nursery’ in New South Wales [www.molestationnursery.com].
- If you’re looking for ‘IP computer software’, there’s always www.ipanywhere.com.
- Decided you have found God and want to attend church? Then you might want to head over to the ‘First Cumming Methodist Church Web’. Their website is www.cummingfirst.com.
- And finally the designers at ‘Speed of Art’ await you at their wacky Web site – www.speedofart.com.
The serious point is, always check your domain spelling and the way it reads. It saves on embarrassing marketing issues or red faces in front of clients later on.
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