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Posts for March 2013

The future of business funding?

March 28, 2013 by Graham Tripp

The future of business funding?/invoices{{}}Invoice finance benefits small businesses by: allowing business growth; protecting cashflow, because late payments and increased credit terms are no longer an issue; providing an alternative to overdrafts and loans that can be difficult to secure at appropriate levels.

This can be seen with two of the fastest-growing industries using invoice finance today. The construction industry has enjoyed an increase of 138% for construction businesses taking up invoice finance from 2007 to 2012, particularly affecting small builders' firms who find it most difficult to secure an overdraft at the levels they need. The manufacturing industry has seen a similar increase in adopters of invoice finance, with an increase of 120% from 2007 to 2012. So why are these industries choosing to take invoice finance as their funding solution?

Invoice finance is flexible; it requires little collateral and takes into account that customers do not always pay invoices on the date of the invoice’s creation. These are especially pertinent reasons for the construction industry, because these businesses are often paid 60 to 90 days after the job is complete.

Invoice finance provides them with a cash advance of any invoices created. By allowing the business to fund projects with the money they would have previously only secured once the job is complete, they can now pay costs such as wages and purchase raw materials, which are required throughout a project’s lifetime.

Banks are unwilling to lend to what is often seen as a risky industry for late and non-payments. This is probably due to construction projects being easily halted by problems such as bad weather, or simply because the job has not been finished to the customer’s satisfaction. These problems can be seriously harmful to cashflow, because the banks are looking predominantly at historical financial data to assess whether a business (particularly a small business or startup) is worth lending to.

Construction businesses that are turning a corner and are in fact profitable, have responded to this by seeking out alternative forms of finance – invoice finance, where funding is judged on the future income of a business rather than its historical records.

Two other extremely popular adopters of invoice finance, according to data from Touch Financial, are recruitment businesses and those in wholesale and distribution. Wholesale and distribution often suffer from late payments, and the nature of the wholesale business means they need a quick stock turnaround in order to maximise income and profits. In no other industry does time mean money more than in wholesale, and invoice finance allows protection against late payment, while strengthening cashflow to allow the purchase of further stock as quickly as possible. This gives the safety and flexibility smaller businesses benefit from the most.

Recruitment is a sector where invoice finance also appears to be thriving. Contractors often require payment before the customers settle their bills and invoice finance provides the working capital to achieve this. Recruitment companies often have few high-value assets, which makes securing a bank loan or overdraft difficult, particularly earlier on in the business’s life. Invoice finance provides cash you are to receive in the future through the invoices you generate today and usually requires little other assets to secure - something an overdraft cannot provide.

Late payments, poor credit history and a lack of assets are all common reasons for small businesses being unable to grow to their full potential. 2013 is likely to see a further increase in the amount of construction and manufacturing sector businesses moving towards invoice finance, while wholesale/distribution and recruitment SMEs should continue to benefit from the flexible funding that invoice finance has provided them throughout the years.

Written by GrahamTripp on behalf of invoice finance provider Touch Financial

RTI: possible late-payment penalties

March 26, 2013 by Elaine Clark

RTI: possible late-payment penalties/LATE on clock radio{{}}There seems to be some confusion about the new Real Time Information rules (RTI) and when penalties apply. There are three situations where a fine can be imposed.

Penalties for late returns

There will be no penalties if your RTI returns are submitted late for 2012 – 2013 (if you are in the pilot) or 2013 – 2014.

Penalties for inaccurate returns

According to HMRC: “Penalties for inaccuracies may apply from the 2013-14 tax year. HMRC will continue to use a risk-based approach to identify employers who may be submitting incorrect returns.”

Late payment of PAYE due

The rules here do not change with the implementation of RTI.

“HMRC will continue to use a risk-based approach to identify employers who are not complying with their payment obligations and who therefore might be liable to late payment penalties.” Full guidance from HMRC can be found here.

The Reality

My advice? If you don’t think your data is accurate, don’t submit a return until it is. You won’t be fined for a late return, but will be fined if you submit inaccurate data.

Of course you will need to make sure your data is accurate and submit on time for your April 2014 payroll runs, although it’s worth noting that the last day for your RTI return for 2013-2014 is 19 May 2014.

If in any doubt about RTI contact your payroll provider or your accountant.

Using 20 years’ experience spent working at some of the UK’s leading businesses, award-winning chartered accountant Elaine Clark is the founder and managing director of www.cheapaccounting.co.uk.

** After this article was published, HMRC announced a "relaxation of reporting arrangements for small businesses". According to HMRC: "Until 5 October 2013, employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th)." We’ve put together an RTI resource page that contains a handy checklist, various articles, blogs and news. 

Do we really need another bank?

March 25, 2013 by Darren Fell

Do we really need another bank?/Vince Cable{{}}Last year, Business Secretary Vince Cable floated the idea of a new business bank, a financial institution whose raison d'être would be to support the UK’s freelancers, contractors and small businesses. 

Time after time, official figures prove it’s SMEs that are driving the UK’s recovery, so it only makes sense to support them in every way possible, while the wider economy lumbers back to its feet.

The main function of the business bank will be to help small enterprises raise funds and give them access to credit - something the high street banks are still monumentally failing to do.

There is a fundamental problem with Cable’s proposition, however. Back in September he promised £1bn in funding, plus a matching contribution from the private sector. Hang on a minute, you’re probably thinking, won’t those private sector contributors be the same institutions currently denying credit to small businesses up and down the high street? Quite possibly, yes.

If this new bank is to have private sector involvement, there is a danger the same risk-averse attitude the big banks have adopted will find its way into this organisation, rendering the whole exercise pointless.

As well as being easily accessible, any loans offered by the business bank must be available fast. I have seen many businesses disappear while waiting for loans to make their way through the maze of bureaucracy that blights most financial institutions.

Set up a scheme that allows access to funds within 30 days, guaranteed. Not only would this allow businesses to start up faster, it would allow owners to plan their spending accordingly, with a guarantee that funds will reach them by a certain date.

The government desperately needs to avoid another costly and under-subscribed business stimulus initiative. Past failures such as National Insurance holidays, and more recently the Funding for Lending scheme, will hopefully have given the Department for Business, Innovation & Skills a feel for what works and what doesn’t.

Details are still fairly sparse as to what form the business bank will eventually take, but with a bit of luck Vince Cable will listen to business owners and put together a sensible and useful establishment - and not one that exists solely to turn a profit for its commercial backers.

Written by Darren Fell, managing director of Crunch Accounting.

Posted in Financing a business | Tagged Funding | 2 comments

Is social media the equaliser for small businesses?

March 22, 2013 by James Barnett

Is social media the equali/social networking{{}}Is social media the equaliser for small businesses?

Social media provides opportunities for small businesses to compete with global brands. Any business can choose to register a Facebook or Twitter account and promote their products and services. Social media enables customers to define a brand’s reputation by choosing to follow, publicise or interact with an organisation and ‘share’ their services.

No matter how large or small your business, the overall goal remains the same: to sell products and to publicise and expand the brand. To achieve this, engagement with your target audiences is essential. In today’s digital era, engagement relies upon a brand’s online presence. Depending on a business’s use of social media, a small business can easily get more exposure then a multi-billion dollar organisation.

Live marketing events (ie exhibitions and conferences) provide a great platform for engagement and digital media has transformed the event industry by allowing exhibitions to reach a larger target audience. According to Exhibitor Magazine, the number of companies integrating social media to their exhibits had risen by more than 80 per cent in 2012.

A web interface on your exhibition stand allows customers to experience and engage with your brand first hand, creating debates across the social media sphere and enhancing the brand’s online presence. Let’s examine the key social media tools an exhibitor can use. 

LinkedIn is a business community that brings professionals together. It also provides the opportunity to follow other companies and participate in group discussions. Building genuine relationships and sharing knowledge is a great way to make new connections and nurture your relationships.

Companies attending exhibitions often use the group discussions feature to share their products and services, generating an interest in the product before, during and after the show. During the exhibition business cards are traded, and later connected on LinkedIn. 

A large portion of any customer base are likely to be Twitter users, who could choose to follow your brand. Businesses can use the hashtag (#) to keep their products trending and create a buzz around their brands. Updates on your products or services will connect with your customers. Many exhibitors give out free samples in exchange for a follow or re-tweet. Outreaching new customers has to be a primary business objective, ensuring you leave the exhibition with more connections that could well lead to face-to-face meetings.

A Facebook fan page provides an opportunity for customers to interact with your business and comment on your news. At exhibitions, companies offer incentives for users to ‘Like’ the fan page, which stands out on their newsfeed. Creating a live brand experience at an exhibition can generate many hits very quickly, so businesses will often try to entice the public to their stand with a USP. This is a cost-effective method for large brand exposure.

Pinterest is growing in use in the social media field and there were some 27m active users on the site in 2012. Exhibitors have used the tool to pin stands and products.  Inspiring technology is present at most commercial exhibitions and when shared, it entices online communities. This provides invaluable social exposure for brands products. 

Blogging is the heart of a digital marketing strategy. Social media draws traffic to the page where a company is able to describe its services in more detail. Simultaneously blogging during live events provides excellent exposure for your brand and unique insights to your company. Search engines such as Google recognise high quality content as a key ranking factor and it is important to write on your company blog to increase your sites visible presence rankings and engage your existing readership. 

Article contributed by James Barnett on behalf of Nimlok. James is a former consultant for the live events industry.

What will it take to kick start small business lending?

March 20, 2013 by Rachel Miller

What will it take to kick start small business lending?/loan approved stamp{{}}It’s a central plank of the Government’s policy to stimulate economic growth — supply cheap money to banks and building societies to encourage them to lend. It has come in many forms — from lower interest rates and quantitative easing to schemes like Funding for Lending (FLS), Project Merlin and the National Loan Guarantee scheme.

So how is it going?

Not great, it has to be said. Recent data from the Bank of England reveals that lending to businesses and individuals in the final quarter of 2012 dropped by £2.4bn. Lloyds Banking Group reduced its lending by more than £3bn in that time, more than any other bank.

Dr Vince Cable called the results "deeply disappointing” and said that the scheme may need to be “adapted”. Critics argue that banks are simply taking the cheap money and using it for their own needs. But the aim of this scheme and others like it was not to prop up the banks — it was supposed to kick start the economy.

Meanwhile, apologists for the Funding for Lending scheme say things would have been worse without it and they urge us all to give them more time. But is time running out for small firms that cannot get the funding they need?

The British Bankers Association, representing the major banks, says many businesses are choosing not to borrow. A spokesperson actually said: "It is more of a demand issue than a supply issue.”

Try telling that to Mike Benson and thousands like him. He runs a business in Worcestershire supplying parts for air compressors and exporting to countries such as the US and Chile. The business was described in a BBC article this week as “quietly profitable for the past 15 years” — like many UK small firms that are just getting on with the job.

Mike wanted to borrow £10,000 to put towards the purchase of a new van. Knocked back by the Bank of Scotland, Benson wrote to Sir Mervyn King to tell him of his woes and got a “delightful” letter back that was full of sympathy.

The Governor of the Bank of England did have one piece of advice for Mike — try one of the UK’s new banks such as the Swedish firm, Handlelsbank. It echoes Vince Cable’s comments this week on BBC Radio 4's World at One programme when he said the Funding for Lending scheme is working “with some of the new banks” such as Aldermore.

But the majority of small firms bank with the big names and, according to the Federation of Small Businesses (FSB), a staggering 41% of small firms were refused finance by the high street banks in the second quarter of 2012.

Something’s got to give. We’ve been watching the Budget with interest. Over to you George.

Rachel Miller is the editor of Marketing Donut.

Networking events: What's in it for me?

March 20, 2013 by Mimi Hughes

Networking Events: What's in it for me?/bacon, eggs and toast{{}}Woke up, fell out of bed, dragged a comb across my head. Went down stairs and drank a cup and looking up I noticed I was late and (diverging from the famous Beatles song) got in my car and drove 20 miles in the dark and rain to reach a networking breakfast…

Why? Because I want to win more business! But how?

Gone are the days of having the time and money to meet an endless stream of people in the hope they might decide they have an enormous contract that only your business can fulfil. Everyone now has to sell. Not hard sell, foot-in-the door type stuff. But by being sufficiently interesting so someone who may have a need for your product or service will want to know more.

There is little point in just being at an event to get your name on the delegate list. Thanks to the internet, it is now easy for purchasers to shortlist potential providers by picking the most appealing websites. However, there is one thing that a website cannot replicate and that is confidence in the people, the confidence created by meeting someone face to face – which is why we must network!

So there is no point in going to a networking event if you:

  1. Don’t talk to people or tell them about what you do.
  2. Are no more interesting than a website.
  3. Don’t give them the confidence that you know what you’re doing

Here are some tips

  • Work out in advance the type of person you want to meet; define an ideal profile and then identify the essential characteristics of this person which make them a potential customer (we call these ‘keys’ because they unlock a customer). When you are talking to people at the event, listen to what they say about themselves and look for these keys. If a person has even one of your keys (they rarely have all of them), they are a good contact and you should aim to meet again.
  • If you have identified that someone is worth talking to by listening, tell them what you do in no more than 10 words (my opener is “We help people with their persuasiveness”). Your ‘grabber’ should be structured to get the other person to ask for more information. If they do, you have about one minute to tell them how you can help them, focusing on the keys you identified in what they said.
  • If the other person is still interested at this point, provide some free advice or interesting information about your product or service so they can judge your expertise for themselves. Spend no more than five minutes with them; agree a follow up; then politely move on to someone else. There is limited time and they want to get on with seeing someone else as well.

If you don’t do these things – enjoy your very expensive bacon and eggs!

Mimi Hughes is director of training at The Business Voice

How social media can help you recruit top quality employees

March 18, 2013 by Derin Clark

How social media can help you recruit top quality employees/job interview{{}}As a business owner, you will know that to remain competitive within your market your business needs to grow. If you are not increasing your turnover and profits, you risk soon being overtaken by businesses that are.

Whether you prefer to remain a relatively small business or if you have the success of Richard Branson’s Virgin in mind, business growth will inevitably lead to hiring more staff. The importance of hiring top quality staff cannot be overestimated, because it can prove to be the difference between success, survival or failure.

Although many small businesses have never had or can no longer afford to have in-house HR departments, using external HR companies or HR software can provide a solution. However, if you decide to manage your HR matters, recruiting employees will be down to you, of course.

Along with more traditional recruitment strategies, today’s business owners are now turning to social media to hire top quality employees. If you are unsure how to do this, here are some tips.

LinkedIn

LinkedIn was established specifically with recruitment in mind. It not only enables job seekers and employees to promote their skills, education and experience online, but also acts as a business network and provides a way for like-minded professionals to contact and connect with one another. 

If you or your business does not already have a presence on LinkedIn it is a good idea to set one up. Along with enabling you to network with fellow business owners, potential and existing customers, it will enable you to search for potential employees. Think of it as online dating for the corporate world, where you and job candidates can connect online before making the commitment to meet in person.

Twitter and Facebook

Don’t make the mistake of thinking Twitter and Facebook are just for teenagers or bored housewives. They are both very useful tools for promoting businesses and recruiting employees. Top quality employees want to work somewhere that offers more than just a great salary, they also want to work in supportive and enjoyable environments, too. 

Facebook and Twitter provide a great chance to show your company’s personality to potential job candidates, who will likely be searching through your Facebook page and Tweets to find out more about your business. If your company has taken part in a charity event, held a team-building day or any other social events, promote it on your Facebook page, because it will show potential employees that your company can offer more than just a nine-to-five job.

On a practical level, Facebook and Twitter are ideal places to advertise jobs. If a vacancy becomes available, post it on Facebook with a link to how applicants can apply. Also Tweet about it and encourage staff to Retweet it on Twitter.

Growing trend

Use of Social media isn’t a fad – it continues to grow. Google+ has become the latest social media tool that combines LinkedIn with Facebook and enables users to create separate professional and personal networks in one place.

There are many business benefits to using social media and businesses have realised it is a perfect tool to enhance their recruitment efforts. The fact is, failing to use social media could put your business at a distinct disadvantage when seeking to hire top quality employees.  

By editor and blogger Derin Clark writing on behalf of Octopus HR

Join the fight against youth unemployment

March 14, 2013 by Mark Williams

Join the fight against youth unemployment/chef instructing trainee{{}}It’s hardly the greatest time to be a young British adult, trying to make your way in the cruel new world in which we find ourselves.

Punitive fees and budget-busting living costs mean a university education is set to once again become the preserve of society’s wealthier members. With households under immense pressure, many parents (even those who would be considered fully paid-up members of the middle classes), simply can’t find the money to pay for their sons and daughters to go to university.

Hard luck. Welcome to the real world, you might say. Why not go and get a job like the rest of us? Well, things aren’t that easy. As reported by the Mail Online in late January, according to a study by the Work Foundation, youth unemployment in the UK has increased at a faster rate than any country in the G8 since the start of the recession five years ago.

Youth unemployment rate

Indeed, out of the countries that make up the OECD (Organisation for Economic Co-operation and Development), only Spain and Greece have higher rates of youth unemployment than the UK (currently standing at about 1m). Youth unemployment here in the UK among 15 to 24 year olds increased by a staggering 35 per cent between 2008 and 2011, compared to an average of 15 per cent in the G8 countries (ie Canada, France, Germany, Italy, Japan, Russia, UK and USA). The politicians should hang their heads in shame for failing young people so badly, you might say.

According to the Work Foundation report, during the same period youth unemployment decreased in Germany, Russia and Japan, which, said the report’s authors, suggests that youth unemployment problems in the UK couldn’t be attributed entirely to the recession, other factors have clearly played a part.

One of the report’s author, Lizzie Crowley, said: “'The government should focus on those policies that have been shown to work, cherry-picking the best responses from other countries and adapting them to the needs of the UK labour market.”

Government support

Many experts see apprenticeships as a useful weapon in the fight against endemic youth unemployment in the UK and elsewhere. The Work Foundation report recommended that the government should do more to encourage larger businesses in particular to sign up to an apprenticeship agreement.

Another report published recently by the Centre for Economics and Business Research claimed that 3.8m people will complete an apprenticeship in the next decade, contributing £3.4bn to the UK economy a year in productivity gains by 2022.

Secretary of State for Business, Innovation and Skills, Vince Cable, said: "This research confirms the economic importance of apprenticeships and sends a clear message that they deliver for employers, individuals and the economy. I want to see more small and medium-sized businesses reap the benefits of apprenticeships, which is why we have introduced a £1,500 incentive for SMEs who take on a young person.”

Deputy Prime Minister Nick Clegg said apprentices were “vital to Great British business”. He continued: “They are at the heart of our drive to provide employers with people who have the skills needed for their businesses to prosper and compete, often in a global market.”

National Apprenticeship Week

This week, National Apprenticeship Week (NAW) 2013 is taking place. According to the National Apprenticeship Service, which organises NAW: “Apprenticeships deliver real returns, helping [you] to improve productivity and be more competitive. Training apprentices can also be more cost-effective than hiring skilled staff, leading to lower overall training and recruitment costs.

"Apprenticeships deliver skills designed around your business needs, providing the skilled workers you need for the future. They also help you develop the specialist skills you need to keep pace with the latest technology and working practices in your sector.”

Although many employers choose to pay more, the National Minimum Wage for apprentices is £2.65 per hour, making them an affordable option for many firms. There are even grants available to some employers. Maybe it’s time your business joined the fight against youth unemployment and took on an apprentice. Looks like the politicians need all the help they can get.

How to set up a successful sideline business

March 13, 2013 by Guest Blogger

How to set up a successful sideline business/Charlotte D{{}}When two young mums with blossoming careers in law decided to take a furniture painting class, little did they know within a year their hobby would be a successful business called Lovely Things.

However, after friends and family expressed interest in their up-cycled pieces, Charlotte Dennison (pictured, a lawyer for the Crown Prosecution Service) and Charlotte Smith (a legal assistant for Ryedale Council), both 32, decided to showcase their products at a local market, and the pieces were quickly snapped up by local stores. The Charlottes also now sell their goods on Ebay and Facebook.

Here the pair from North Yorkshire share their tips on how to run a sideline business.

On support from family and friends

Charlotte D: “When we started Lovely Things I was on maternity leave, looking after a three-year-old and a four-month-old. Charlotte Smith was back at uni as a mature student and looking after a 10-year-old.

“Luckily my husband is a policeman who works shifts and my in-laws live locally and Charlotte Smith’s parents help her out. There is no way we would be able to run our business without them, because we just couldn’t afford childcare.”

On teamwork and communication

Charlotte D: “We split the big jobs in half. For example, if we’re decorating a table and chairs, Charlotte (S) will do the first bit and I will do the second bit. This way no job is too big, and we don’t get bored half way through!”

On keeping overheads low

Charlotte S: “As we’re still in the very early days, we keep our own books and our overheads are low. We don’t have fixed prices for our items and encourage customers to make offers.

“We did consider getting our own website produced, but because we could use Facebook, Twitter and Ebay for free, it was hard to justify the additional cost.”

On flexible working

Charlotte S: “Being able to work in the evening and weekends allows us to fit Lovely Things around our family and work lives.”

On believing in your products

Charlotte D: “If I could go back to last year, one thing I would change is I’d have more belief in our products earlier on. We were too nervous to go and rent a market stall to begin with because we were worried no one would be interested in our products.

“But it turned out to be the best thing we did, because it was at a market that we got talking to the owner of a local interior design business, who offered us space in her shop for our things. You just need to speak to everyone, because you never know who you are talking to and you really need to shout about your business. You have to believe in yourself, your business and its products.”

This guest post has been provided by Lima Curtis writing on behalf of ExpertMarket

Clare Rayner's top tips for retailers in 2013

March 11, 2013 by Guest Blogger

1. Focus on who your ideal customer is - those who are loyal and high spending - and make sure that everything you do is with your customer in mind.

2. Focus on cost cutting. Remember the old saying: "Look after the pennies and the pounds will look after themselves." There are services to make this easier for you that don't cost a thing - check out Make It Cheaper for instance, which could enable you to make savings on your utilities.

3. Focus on your product, pricing and promotions - think about that ideal customer; make sure everything you present to them is aligned to their needs and wants and is clearly priced. Run engaging promotions that increase sales, don't drain margin and don't devalue the brand.

4. Make sure you are online. You don't need to be trading online (but it helps) but you do need to be findable. Spend some time to ensure you can be found for what you offer in your area. Make sure you add your business to Google places and as many free directories as you can. When people search for [category] in [Town] you want to be on page one! Add your business to www.independentshops.co.uk/.

5. Make sure you get social - retailers are using tools such as Facebook, Twitter, Pinterest, YouTube and blogs to stay in contact with customers. If you're not yet familiar with using social media then chose just one and learn how to use it. You'll soon find your feet, but if you do need a bit of help getting started, there is a free downloadable 'how-to' guide available at www.independentretail.co.uk/resources

Many small retailers start life as a hobby or project alongside full-time work; when is the right time to take the leap and make it a full-time occupation?

Clare replies: “Many people start retailing almost as a sideline and discover that it's consuming more and more of their time. Of course, if you're running a business alongside a full-time job you'll be getting income from both. Making the leap to being a full-time business owner - moving from employment to entrepreneurship - is never easy and only you will know when the time is right. Assess what income you need and how you'll achieve it and make sure you have the financial buffer to cover the transition. It's often valuable to join a local networking group to meet other local business people. You'll meet people who are in the position you'll be in when you make that leap and you may get a great deal of advice and support from the network as well.”

Is there enough support for small businesses from the government and banks at the moment?

Clare replies: “One of my greatest frustrations is the amount of money that seems to be thrown at start-ups and schemes to support start-ups but how little there is to help established businesses to keep going. I work with a privately funded organisation, Enterprise Rockers, and their mission is to support micro businesses (ie those with fewer than ten employees) to keep going once the honeymoon phase of start-up has passed. There is almost no support for established businesses from the government, and their stance on business rates for retailers in particular (of any size) is crippling. Banks are getting better; the anecdotal feedback I've had is variable - it seems that the success rate with banks has more to do with the business owner's relationship with their local business banking manager than it has to do with any specific bank or banking policy.”

On the whole, how would you rate the UK in terms of entrepreneurial spirit and achievement?

Clare replies: “I think the UK has huge entrepreneurial spirit and achieves an enormous amount. It's sad that much of the media focus is on super-star entrepreneurs like the BBC Dragons and not on the real-life entrepreneurs. The Federation of Small Businesses (FSB) has a campaign called Real-Life Entrepreneurs, and I've agreed to champion that for them. This is all about recognising the micro businesses that work hard to support themselves and perhaps a couple of employees, who earn a reasonable living and enjoy a reasonable life.

“These real-life entrepreneurs won't make millions overnight; they won't be bought out by mega brands and they don't need investors to accelerate their growth. They're like the vast majority of entrepreneurs: people enjoying what they do and making a decent living. It's important to celebrate these people and recognise their achievements - the thousands of plumbers, decorators, designers and web developers who work freelance are probably more valuable to the UK economy than one of the celebrity entrepreneurs! It's important that we acknowledge that when talking about the mix of UK small businesses.”

Clare is well known by most independent retailers as a 'voice of the industry'. With years of experience creating awareness for our high street shops, retailers and traders she is one of the most trusted experts in the UK. To read more advice for her visit www.retailchampion.co.uk

This article first appeared on the Towergate Insurance website and was written by Jonathan Falgate.

Kickstart lending to small businesses

March 07, 2013 by Rachel Miller

Startup capital{{}}It’s a central plank of the Government’s policy to stimulate economic growth — supply cheap money to banks and building societies to encourage them to lend. It has come in many forms — from lower interest rates and quantitative easing to schemes like Funding for Lending (FLS), Project Merlin and the National Loan Guarantee scheme. 

So how is it going?

Not great, it has to be said. This week, data from the Bank of England reveals that lending to businesses and individuals in the final quarter of 2012 dropped by £2.4bn. Lloyds Banking Group reduced its lending by more than £3bn in that time, more than any other bank.

This is after the Funding for Lending scheme was launched in Summer 2012. Dr Vince Cable called the results "deeply disappointing” and said that the scheme may need to be “adapted”. Critics argue that banks are simply taking the cheap money and using it for their own needs. But the aim of this scheme and others like it was not to prop up the banks — it was supposed to kick start the economy.

Meanwhile, apologists for the Funding for Lending scheme say things would have been worse without it and they urge us all to give them more time. But is time running out for small firms that cannot get the funding they need?

The British Bankers Association, representing the major banks, says many businesses are choosing not to borrow. A spokesperson actually said: "It is more of a demand issue than a supply issue.”

Try telling that to Mike Benson and thousands like him. He runs a business in Worcestershire supplying parts for air compressors and exporting to countries such as the US and Chile. The business was described in a BBC article this week as “quietly profitable for the past 15 years” — like many UK small firms that are just getting on with the job.

Mike wanted to borrow £10,000 to put towards the purchase of a new van. Knocked back by the Bank of Scotland, Benson wrote to Sir Mervyn King to tell him of his woes and got a “delightful” letter back that was full of sympathy.

The Governor of the Bank of England did have one piece of advice for Mike — try one of the UK’s new banks such as the Swedish firm, Handlelsbank. It echoes Vince Cable’s comments this week on BBC Radio 4's World at One programme when he said the Funding for Lending scheme is working “with some of the new banks” such as Aldermore.

But the majority of small firms bank with the big names and, according to the Federation of Small Businesses (FSB), a staggering 41% of small firms were refused finance by the high street banks in the second quarter of 2012.

Something’s got to give. We’ll be watching the budget on March 20th with interest. Over to you George.

Rachel Miller is the editor of Marketing Donut.

Why the boring business essentials could make the difference between sinking or swimming

March 07, 2013 by Bobby Dewhurst

So you’ve had an incredible new idea and you simply can’t wait to get to work on contacting potential customers, setting up meetings and making your dreams become a reality. But have you made sure you have the right insurance and have a first aid box on site?

It might sound ridiculous, but it’s very often the boring things businesses ignore that kill them in the all-important first year. So here’s a look at three things you might think are dull – but could end up being what breaks you if you choose to ignore them.

Business insurance

Of course, you’ll want to make sure you’re covered if anything goes wrong, right? But did you know that there are certain types of business insurance that are compulsory to anyone who chooses to get a business off the ground? Luckily there are handy online guides that will tell you more, so read up and make sure you’re covered.

A workplace risk assessment

No matter how big or small your premises might be, from a spare bedroom to a whole factory floor, a risk assessment could save your skin. It can help you to better protect visitors, clients and staff from accidents. If you don’t carry out a risk assessment, you could find yourself at the centre of a claim that digs so deep into your pocket that there is nothing left to keep your business afloat.

Buy a first aid kit

Sure, your risk assessment will help protect you, but it won’t stop accidents from happening. Trips, falls, bumps and much more can unexpectedly crop up anywhere so you’ll need to have either an industrial or office first aid kit available when they do. It may just be a few plasters, bandages and pain killers, but it could make all the difference if it stops someone trying to make a claim against you.

Bobby Dewhurst is a blogger writing on behalf of Pure Safety

Interim managers - flexible experts for start-ups?

March 06, 2013 by Nigel Peters

Interim managers – flexible experts for start-ups?/business people planning{{}}So you’ve done it – you have decided to leave your permanent job, follow your dream and start your own business – great news! But now what?

Help, I’m stuck

Starting a business – and keeping one going – can be incredibly challenging in what are still very tough economic times. As an entrepreneur with a clear vision you know exactly where you want your business to go - but it can take a lot to admit that you don’t know how to get it there. This is where many small and medium businesses come unstuck. Where can you find the expertise you need at a price you can afford? To solve this problem, many small businesses are turning to interim managers.

Multifunctional masters

No longer just the preserve of large multinationals or global conglomerates, an interim manager is a flexible, affordable way of getting the knowledge and insight you need to guide your business in the right direction. Whether it is help with sales and marketing, assistance with finance and regulatory matters or day-to-day operational and HR advice, using an interim manager is a quick and easy way to obtain the skills you need.

Cost sensitive

The other key advantage is that interims operate as a controlled, daily cost – essential for smaller organisations. With no sickness, holiday, pension or other traditional benefits to pay for, it is very easy for SMEs to forecast how much an interim will cost over a specified period of time, with no hidden extras.

Over-experienced

If you do choose to hire this sort of resource, small-business owners must also be prepared for the fact that the interim will more than likely be over-qualified for the role they are doing. Don’t be intimidated by this; their breadth of experience means they can deliver for your business faster and leave you with a sustainable best practice approach to grow your business successfully.

This post was written by Nigel Peters on behalf of Alium Partners – global provider of interim management solutions.

Posted in Set up a business | Tagged management | 0 comments

Why people in business make wrong decisions

March 04, 2013 by David Wethey

Why people in business make wrong decisions/businesswoman thinking{{}}All entrepreneurs are self-reliant. I know – I’m a serial offender! But almost everyone who starts a company cannot make much of it without support from a whole range of people – both in the company itself and outside.

These people are always chosen to be the best, most reliable, the most trustworthy. So how does it come about that dynamic self-starters with handpicked teams frequently not only make mistakes, but costly wrong decisions too?

Part of the explanation comes from our personality profiles. The kind of people we are not only affects how successful we are with the outside world (customers, suppliers, the authorities and so on). It also impacts on relationships and effectiveness within the company itself. In my book, Decide – Better ways of making better decisions, I have included advice from acknowledged experts and a guide to the main personality types, and how you can cope with difference and similarity – and importantly pick successful teams.

But decision-making is not a straightforward process, and so-called Decision Traps lie in wait for the unwary. Below I list some of the most lethal. You may well be able to identify examples from your own experience.

Downside delusion

The decision-maker is so excited about a potentially exciting outcome (the upside) that he/she seriously underestimates how bad the downside could be if everything goes wrong. Most of us are optimists and it’s natural to be enthusiastic. But wise decision-makers always weigh up reward and risk, and it’s often sensible to turn down an option (however glittering) if the downside could be disastrous enough to break you.

Group failure

A group of really bright people cannot believe they can ALL be wrong! But it can happen – particularly if the balance of personalities in the room is skewed on the positive side. Ten people are as capable of being wrong as one. There is a related trap called ‘Confirming Evidence’ – when we are prejudiced in favour of people who think like we do. The trick is to make sure it is always someone’s job to be the devil’s advocate, and ensure frequent reality checks.

Information underload

Sometimes it is tempting to go ahead and make a decision even before we have all the data we need. And it can be fatal to press the button before you have all the necessary information and research. But this is where judgement comes in. It can be almost equally wasteful to insist on having more and more information to the point that the opportunity has been lost. That is ‘information overload’.

The early decision

This is a polite term for a hasty decision that can come back to bite you. Governments and ministers do it all the time. We are all inclined to kid ourselves we have thought things through when we haven’t.

Those who cannot remember the past are condemned to repeat it (George Santanyana)

Really bad this one – making the same mistake again and again.

David Wethey is author of Decide – Better ways of making better decisions, published by Kogan Page.

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