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Tackling the legal minefield when you set up a business

July 11, 2016 by Guest contributor

Tackling the legal minefield when you set up a business{{}}Setting up a successful new business is no mean feat; it's easy to prioritise certain things over others to speed up the process. However, when it comes to meeting the legal requirements of starting a business, you cannot afford to let things slide or cut corners as your actions may come back to haunt you in the future.

There are many different legal obligations every business must fulfil when starting out, so it's important to have an understanding of what your responsibilities are from the beginning to ensure your company is always on the right side of the law.

Understand your legal obligations

Before you can meet your legal obligations, you must decide what your legal structure is so that you are completing the correct paperwork, paying the right taxes and maximising your profit.

There are three types of structure - sole trader, limited company and business partnership, each with their own set of responsibilities. Choosing the right structure for your business is incredibly important because it will have an impact on the way your business is run. However, you can change structure once you're set up if you think another option will work better.

For more information on each kind of legal structure, including what your duties are, take a look at the Government website.

Take out relevant insurance policies

The Health and Safety Executive (HSE) suggests that businesses take out certain forms of insurance to protect those working in and visiting a workplace. While not all these policies are legally required, it is advisable to make sure you are sufficiently covered, should something happen.

The types of insurance businesses should consider taking out include:

Employers' liability insurance covers the cost of compensation for claims of injury or illness to employees. It is a legal requirement for all employers in the UK. You must also ensure that the insurer is authorised under the terms of the Financial Services and Markets Act 2000. You can find out more about your legal obligations here.

Public liability insurance works in the same way as employer cover by allowing claims to be made by customers and members of the public who are injured while on your property or as a result of your business. Although this is not a legal requirement, it is essential for most businesses.

Professional indemnity insurance provides cover if you are accused of providing insufficient advice, services or designs by a client. Although not a legal requirement, this policy will cover the legal costs and expenses associated with building a defence, as well as compensation should you need to rectify a mistake.

Get your tax responsibilities right

All businesses take care of their own responsibilities when it comes to paying tax, and it is essential that you keep up to date with your taxes right from the start or you could be hit with penalties.

Registering for Value Added Tax (VAT) is often overlooked by new business owners because they often think that the VAT threshold, which is currently £83,000, is related to profit rather than turnover. This is not the case. If you believe your annual sales will exceed £83,000 then you must register and charge for VAT on all goods sold. To read more about VAT, visit the Government website.

HM Revenue and Customs (HMRC) carries out investigations to ensure you are paying the right amount of tax. These investigations are unavoidable and can either be triggered randomly or due to suspicions of malpractice. If you fail to keep on top of your accounts and tax returns, this process can be lengthy and you may be left with a fine or face prosecution.

To avoid penalties and time wasting, be sure to share all your records with inspectors and ensure that you get advice from a qualified accountant.

Protect personal information

Businesses that handle personal information have a responsibility to adhere to strict rules laid out in the Data Protection Act. These regulations state that data is used fairly in a way that protects people's rights. Examples of personal and sensitive data include:

  • Name
  • Address
  • Medical records
  • Banking details
  • Ethnic background
  • Political opinions
  • Religious beliefs
  • Criminal records

Failure to comply with data protection laws can incur hefty fines and tarnish your reputation with customers; deliberate breaches can also result in imprisonment. To find out your responsibilities for protecting personal data, take a look at the Government website.

Complying with legislation may be a mundane task that you are tempted to deal with at a later time. However, if you fail to comply with the law at the right time, it will have a detrimental effect on your start-up.

Sponsored post

Copyright © 2016 Jonathan Wall, a Lawyer at Burton Copeland, a criminal and regulatory law firm based in Manchester.

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Five questions to ask before you start up a business

June 27, 2016 by Guest contributor

Five questions you need to ask and answer before you start up a new business. Great advice here from business adviser Daryl Woodhouse.{{}}You've got a great idea. You've got the passion and the commitment. You're ready to start to start your own business. But wait! There are five questions you need to ask and answer before you start.

  1. Is there a commercial market for it? It might be a great idea but you can only be sure if you do your market research.
  2. Do you have the knowledge, experience and muscle (both influence and financial) to get it to market? Be honest in identifying your skills and knowledge gaps and then figure out how to fill them.
  3. What else do you need to know? Get advice on the areas you are unsure about from people who know. Also remember that: "you don't know what you don't know". Even if your business idea is going to see you working from your kitchen table as a sole trader, it's still worth getting advice from a successful business coach, a good accountant and a trustworthy lawyer.
  4. What kind of business set-up would be best? At the simplest level a sole trader status can be set up quickly but do you understand the implications of being a sole trader? Would your business be better suited to a limited liability partnership, a limited company, a charity or a social enterprise? You need to get advice on which one will be right for your business.
  5. If you're starting the business with someone else, think carefully: are you going to work well together? How do you structure the arrangement? Are you equal partners? Do you have an agreement on what will happen if circumstances change, because of a dispute or critical illness for instance? These are all things that need to be considered now while you are in a position to discuss these issues without emotion.

All these steps are crucial as the decisions you make at this stage are the foundations for what you build going forward. Of course you then need to focus on the operational aspects of getting a business started: the funding, the website, advertising, networking, a business plan and all the other activities that will become your daily focus as you establish your business. However, the importance of these pre-start-up considerations cannot be over-emphasised.

Once you've identified the need for the product or service, the price, volume/frequency needed and the route to market; and you're confident that you have the commitment, the stamina, the resources, the commercial knowledge and the support (family, friends and the right business team) to see the idea through, then you can get going with confidence.

There's no rule about which ideas will fly. You never know - it might be your great idea that becomes a winner!

Copyright © 2016 Daryl Woodhouse, ceo of Advantage Business Partnership and co-author of Creating Business Advantage: Setting Up and Running a Successful Business. ABP delivers performance improvement, top line to bottom line, through business coaching, mentoring and hands-on consultancy.

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Self-employed? You're not alone

June 09, 2016 by Rachel Miller

Self-employed? You're not alone{{}}If you work for yourself in the UK today you are not alone. OK, strike that - you may work alone; but you’re not the only one. The number of people choosing self-employment over a regular salary is rising fast. Estimates suggest that one in seven workers in the UK now work for themselves.

There are plenty of stats to back this up but it’s hard to get a complete picture because the world of self-employment is so diverse, including as it does everyone from a part-time freelancer to a company director with a staff of one.

So what do you call yourself? Are you a freelancer, a contractor or a consultant? An entrepreneur, sole trader or one-man-band? And does it matter?

A report published by the Association of Independent Professional and the Self-Employed (IPSE) in April this year describes freelancers as "important but hidden".

Focusing on professional freelancers in sectors such as media, education, IT and sport, the IPSE report says there are an estimated 1.91 million freelance workers in the UK. By this measure, 6% of all UK workers in employment are freelance.

But this is not the whole story.

Figures from the Office of National Statistics (ONS) released in May report that the number of self-employed people in the UK increased by 182,000 to 4.69 million between Q4 2015 and Q1 2016.

The ONS uses the Labour Force Survey (LFS) to gather its data and its definition of self-employment is based on the respondent's view - in other words those surveyed are simply asked if they are an employee or self-employed.

Allowing workers to define themselves is a sensible approach. No matter what type of business you are in, if you work for yourself, then you identify as self-employed - whether you happen to be a freelancer or the director of a limited company.

Meanwhile the Federation of Small Businesses (FSB) reports that of the 5.4 million SMEs in the UK, 4.1 million are "non-employing businesses". In other words, 76% of small businesses do not employ anyone apart from the owner.

And FSB statistics show that these "non-employing businesses" account for 90% of the 1.9m increase in SMEs since 2000. What's more, the number of sole proprietorships has increased by 50,000 in the past year alone.

So the one-man-band, for want of a better description, is becoming more and more popular. But the jury is still out on the reasons for this.

Clearly the recession has played its part and necessity has been a factor for some; but there's also evidence that self-employment is a key part of the changing world of work. The proliferation of freelance jobs sites is certainly testament to an evolving labour economy.

What's clear is that there is no single type of freelancer. Some may fall into self-employment; for others, it’s part of a specific career plan or lifestyle choice.

Then there are entrepreneurs who start small but have no plans to stay that way. But not every freelancer wants a growing business. Indeed, what attracts many to self-employment is the autonomy and flexibility not just of having no boss but having no staff either.

And that's where all sole traders have something in common. They are both employer and employee in one and that brings its own challenges as well as rewards.

The Government-commissioned Self-Employment review published by Julie Deane in February picked up on many of the challenges facing sole traders and made these recommendations:

  • More specific Government support for the self-employed;
  • More appropriate financial solutions (including mortgages and pensions);
  • Equal treatment for the self-employed including maternity allowance;
  • The establishment of a single clear definition of self-employment;
  • A review of tax and other administrative burdens for the self-employed.

It's high time the Government focused on this important group of workers and came up with policies to make their lives a little easier. Julie Deane's recommendations are a good place to start.

Copyright © 2016 Rachel Miller, editor of Marketing Donut.

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Top tips for becoming an internet freelancer

November 26, 2015 by Guest contributor

Top tips for becoming an internet freelancer{{}}

Exactly a year ago, I took the plunge and decided to become an internet freelancer, helping people grow their business online. Going out into the big wide world was daunting at first and there were some ups and downs.

But now I've got to a point where I am an established freelancer, working with reputable companies such as Groupon, Xexec and Call Wiser. Here are my top tips based on what I have learned so far:

Position yourself as a freelancer with expertise

It's important that the people closest to you such as friends and family know what you do, because they are going to be the ones most likely to recommend you to potential clients.

Start by posting regularly about your expertise on Linkedin and Facebook. Share posts about your industry, write blog posts or get an interview with the local press and share it. Soon, people will start associating you with that particular skill, such as PPC or SEO, and they will recommend you to others looking for that service.

Make introductions

As a freelancer, you need to ensure that you are constantly getting work. Without a regular monthly salary, you need to keep busy. Making connections with others in your industry is key.

Initially, I got in touch with dozens of agencies and freelancers and arranged meetings with a few who were interested. Eventually, I had a strong relationship with a few companies who regularly referred me work and continue to do so.

Stick with the nicest clients

Clients come in all shapes and sizes. Some will squeeze every penny out of you, have huge expectations and expect you to overwork. Other clients will treat you respectfully and value your expertise and these are the clients you want to keep.

There is nothing wrong with turning down work from demanding clients even though it pays the bills. It is better to focus on those clients that treat you well and pay you on time. Overall, you will be more motivated and happier with your work.

Use office space effectively

There is really no need to pay too much for office space as a freelancer. By avoiding commuting and office costs, you can simply keep more money for yourself.

If you don't have space at home, it's likely that friends or family have a spare room where you can work. Or perhaps someone you know has a spare desk in their office that you can use one day a week. And of course, every high street has cafes such as Starbucks that offer a place to work and free wi-fi.

Have a back-up plan

Having a back-up plan as a freelancer is important because you never know if the work could dry up for a while. This is common during the summer months or the Christmas break where people take more time off work or don't want to commit until the busier season.

So having a plan B is essential, whether it's a side project that you are working on and can devote more time to during slower periods, or giving lessons to people on your expertise, either in person or through online portals like Udemy.

There are also freelancing platforms like Elance where you can potentially pick up work at short notice. Above all, being busy is key to being a successful freelancer.

Copyright © 2015 Daniel Tannenbaum. Daniel works in London as a freelancer in SEO, PPC and digital marketing under Tudor Lodge Consultants.

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The hidden cause of start-up failure: co-founder conflicts

October 29, 2015 by Guest contributor

The hidden cause of start-up failure: co-founder conflicts{{}}Last year alone saw the birth of almost 500,000 new businesses in the UK. Starting up is one thing, but staying alive is even harder, with half of new businesses dying within five years.

Over the years I've founded my own start-ups and as a former lawyer helped entrepreneurs wind up their businesses. And after watching the good, the bad and the ugly, I've realised that a key reason why many start-ups fail is co-founder conflict.

The view is echoed by Y Combinator, arguably the world's most famous accelerator. Former Y Combinator partner Harjeet Taggar described fights between founders as "certainly the most common reason for failure we see at YC."

And serial investor Jeremie Berrebi said that after 13 years investing in more 200 companies he'd "finally discovered one of the main reasons that start-ups fail – conflict between founders."

Types of conflict varies from equity splits to clashing egos. There's an inexhaustible list of ways a working relationship can turn sour, but over years we've identified the top seven rules co-founders should follow.

1 A working (not social) history works best

Co-founders come together most commonly through social circles. While working with people you know and trust has appeal, it's likely to cloud your judgement about the skills and competence required. Professional acquaintances, such as former work colleagues, work best. You know what they're good at and over the years you've seen how they operate in good times and bad.

2 Find common goals and define your success

Too many co-founders dive into business together without defining and sharing what success would look like on a personal level. Talk openly about through your priorities, ambitions, insecurities and family commitments – and agree on an exit strategy.

3 "I do this, you do that"

Go beyond job titles or merely splitting up roles. Dive into all the jobs that need doing and look for gaps that either no one wants to fill, or where the required skills are lacking. Decide who'll take on (or learn) what, then set a future date to assess how it's working out.

4 Two is the magic number

Or 2.09 to be exact, even if it's statistic drawn from a small, rather dated (but regularly cited) sample. While three can be handy for breaking deadlocks, it also allows two to gang up on one. There's also less chance for skills and responsibilities to overlap when there are two or even three co-founders.

5 Beware of the 50/50 split

Splitting shares equally between two or three co-founders makes intuitive sense, but the distribution should be based on the contributions or sacrifice each makes. Here's a handy tool to help you get to a number, drawing from a solid list of variables.

6 Vest your shares

Once you've agreed the share split, instead of issuing shares upfront, the smarter way is to earn your shares over time using a 'vesting schedule'. A typical schedule works like this: after one year (the 'cliff') you'll each earn 25% of your shares, followed by a further 2% each month for the next four years. If someone leaves in the first year, they get zero. It's a great incentive.

And this means...

7 Get it in writing

Don't rely on handshake deals. Get things down in writing, whether it's basic one-pager or a 40-page shareholders agreement (with vesting of course!). Signing up to commitments has a way of flushing out issues that otherwise might be left unsaid. And if you can't agree on the rules, perhaps it's time to rethink who you're about to do business with.

Final word

Running a start-up alone can be, for the most part, hard. Finding that special someone or forming a small team at least gives you a fighting chance of success. It's a relationship that will be tested many times and will (on occasion) need repair, but it should always be nurtured.

Copyright © 2015 David Bushby, COO at Lexoo ("a service that handpicks specialist lawyers to give businesses multiple, fixed-fee quotes based on your legal needs"). He tweets at @DavidBushby and connects on LinkedIn.

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The seven benefits of having an online accountant

October 15, 2015 by Guest contributor

The seven benefits of having an online accountant{{}}When setting up your new business, there will be a number of responsibilities and paperwork to take care of if you are to get off to the best possible start.

Tax can be complicated and just learning some of the basics can take up many hours of your precious time. Some start-ups try to do their own accounts, others pay a high street accountant to look after their books, returns and associated admin, but this can be expensive for a new business.

Another solution is to use an online fixed-fee accountant. There are no hidden costs and usually you have your own dedicated contact, so help is always at hand. Business owners can easily find out about their revenue, cash flow, payroll or invoices and manage their financial information from a secure online portal. Some online accounting services will even set up your business for you, just to make things even easier.

So, why else should you choose an online accountant?

1 Easy to use

Online accounting software is easy to learn and use, making it a time-effective way to keep your accounts up to date with just a few regular data entries. Business owners usually need to provide information from bank statements, expenses and invoices. There is no need to worry about or understand advanced accounting concepts, just enter the relevant data and let the software do the rest.

2 Direct invoicing

Creating invoices through an online accounting offering saves time and prevents losses caused by human error. You can send invoices direct to your clients, monitor your invoices and be alerted when invoices are overdue.

3 Cost

Online accounting software is a cost-effective option for any business. If you are a start-up on a tight budget, hiring an accountant can be more expensive. Online accounting software usually comes at a fixed monthly cost, so you know what you are expected to pay and only have to pay a small monthly fee, instead of one larger lump sum.

4 Payroll and cash flow

Online accounting software makes it easy to fill out employer forms and manage your cash flow, cutting down on paperwork and save your business money. Additionally, you can view forecasts for profit and loss and cash flow, which can help when you’re making important decisions or planning ahead.

5 Accuracy

Simple calculation mistakes can lead to big problems. Online accounting software can prevent such errors by helping you to track trends and financial information far better than if you try to go it alone. This could also help you to discover new opportunities to improve your revenue, because online accounting software builds up a detailed picture of your business’s financial wellbeing.

6 Productivity

Paperwork can be boring and time-consuming, causing employees and business owners to get distracted and become less productive. Online accounting software is a more efficient option than filling out paperwork because the system is automated, so half the work is already done.

7 Flexibility

The beauty of online accounting software is the flexibility it gives to run your business from work, home or on the go. You have an up-to-date picture of how your business is doing, no matter where you are. Software updates can be developed and delivered so you will get access to new features instantly. You can run your business remotely, from anywhere in the world with online accounting software. And when information is fluid and accessible, the possibilities are endless.

Copyright © 2015 Rachel Smith, technical writer at Nixon Williams’s Vantage Online Accounting.

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First things to consider when launching an online business

September 08, 2015 by Guest contributor

First things to consider when launching an online business{{}}The world of ecommerce is extremely lucrative and its growth is showing no sign of slowing. In fact, online shopping is set to double in value over the next three years alone. And it's not just the large retailers that can cash in on its popularity, there's huge potential for small businesses, too.

However, there are still many small firms that are yet to venture online, finding the prospect of entering a new space too daunting, or lacking the resources to launch their own ecommerce enterprise. But with competition rife in the retail market, sitting back is no longer an option and small businesses must start taking their first steps or risk losing further revenue as more consumers go digital.

Proper planning

There are many aspects to launching an ecommerce business – it's not just a case of setting up a website, adding some products and going live. If SMEs want to better secure the success of their online efforts, a clear business plan must be in place right from the start.

Creating this solid structure will enable you to refine your strategy for launching to a digital audience – many of whom will be very different to typical in-store shoppers. For example, online customers are not limited to the local area, they can come from anywhere in the country (or even overseas). Once this is finalised, you can then get started on the exciting bit – producing the website.

Launching a website

The great thing about launching a website is the almost unlimited number of features and functions that can be added. However, be warned. Experimenting with too much too soon could mean you can't maintain a high level of customer service.

Start simple, to get it right. Outline what your website needs to do right now and implement that to begin with, you can always add more features later.

Don't forget to think how the site will look on a mobile device. This is extremely important to today's consumer, so consider a mobile optimised or responsive design.

Agency or DIY?

It can be very tempting to take a do-it-yourself approach to building a website. It can be cheaper and offers total control. However, it's important to consider how time-consuming it will be, along with the extra strain it can put on resources.

Partnering with a professional design agency will likely provide a slicker look and finish, while allowing small firms to draw on external expertise and have ongoing support when required.

So, just as consumer behaviour changes, so must small retailers, as they seek to provide shoppers with the means to browse and buy however they choose.

Copyright © 2015 Gareth Poppleton, managing director of Retail Merchant Services (which you can follow on Twitter @RMSCardPayments).

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Why trustmarks matter for small online businesses

March 12, 2015 by Guest contributor

Trust{{}}Although consumers have been shopping online for many years now, they still want reassurance that they're safe to shop on a website they may not have visited previously.

What are trustmarks?

A web store with a trustmark such as Norton Secured, McAfee Secure or TRUSTe, makes shoppers feel safer. A site displaying such a seal means that the issuer:

  • has verified it as a legitimate legal business entity.
  • scans the website daily for thousands of known malware exploits, malicious links and phishing scams.

A trustmark is more than just a logo. You paste a block of code into your site that shows dynamic content from the issuer, including the date the site was last verified as secure. When a customer hovers over a trustmark or clicks on it, they see full details about the website, which can be independently verified on the issuer’s own site. When a website is compromised and this is detected in a scan, the seal disappears until the business rectifies the issue.

Trustmarks are far more important to small businesses than to well-known brands. Amazon, eBay and John Lewis, for instance, don't display a trustmark because people are already confident that they are serious about security with a proven track record. However, a small retailer with an unknown brand doesn't have the same luxury, so needs to do all it can to reassure shoppers that it is trustworthy.

“Concerned visitors don't become customers. 45% of people have abandoned online shopping carts due to security worries” – Mcafee Secure.

How do trustmarks help?

Shoppers are now much more familiar with a number of popular computer security companies as a result of their anti-virus software being installed on new computers as standard. A consumer who's already placed their trust in any of these companies will readily extend that trust to a website that's been accredited as secure by those same organisations.

An eConsultancy consumer survey in 2014 found the most widely recognised trustmarks are from companies who are also strong in the consumer security software business, with 35.6% of shoppers choosing Norton Secured and 22.9% choosing McAfee Secure as their preferred mark of safety.

Other measures

A trustmark is just one tool in a suite of measures online businesses should use to build customer confidence.

  • You also need to display your secure payment processor's logo (eg PayPal, Sage Pay or World Pay). This further builds the consumer’s confidence that their financial transaction will be handled by a well-known PCI DSS-compliant solution with robust protection against anti-fraud and identity theft.
  • It's equally important to have a well-designed website that's easy to navigate, with detailed product descriptions and quality imagery. Your business contact details should be clearly visible and all enquiries must be handled in a timely manner.

All of these aspects contribute to establishing your business as trustworthy and overcoming a customer's fear – which could otherwise lose you the sale.

Copyright © 2015 Simon Horton of hosted shopping cart and ecommerce plug-in provider ShopIntegrator.

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Survival of the fittest? A new breed of entrepreneurs rises from the recession.

September 11, 2014 by Guest contributor

How do small businesses started during the recession differ from those started before the economic downturn? Hiscox’s DNA of an Entrepreneur Report surveyed 3500 small businesses and the responses identified a new breed of business, dubbed Generation Recession.

These recession start-ups are innovative, positive about the future and more likely to be run by women. Find out how they shape up against pre-recession businesses in the infographic below.

Generation Recession: a fierce new breed of business owners

Download the full report


Could your new business benefit from a virtual assistant?

June 23, 2014 by Guest contributor

Could your new business benefit from a virtual assistant? /Too much work office situations{{}}Not enough hours in the day but can’t afford to take on staff? Looking to focus on your passion as opposed to spending hours on time-consuming admin? Wish you could hire specific staff as and when you need them? Well, taking on a virtual assistant (VA) could be the answer.  

A VA is a highly skilled professional who can provide a diverse range of administrative, technical and creative business support services to businesses operating in a broad range of sectors. Rather than hiring full-time employees to fulfil numerous job roles, businesses use VAs to provide a wide range of skills.

The VA industry is rapidly growing, as businesses wake up to the associated benefits. However, with varying hourly rates and so many to choose from, how do you know which VA is right for your business and what should you consider before taking one on?

Managers: Many VA companies operate a pool of assistants to complete work. Look out for companies that assign one account manager to complete the majority of tasks. It really helps to have a single point of contact.

Sole traders: Most VAs (72%) are sole traders who work with various clients, so make sure you are clear about specific deadlines so your VA can juggle workload appropriately.

Contract: Although there is no minimum commitment in terms of hours and VAs only invoice for work completed, protect yourself with a contract that includes clauses about confidentiality and data protection.

Fees: Although there are no recruitment agency fees or HR-associated benefits to provide, it is important to double-check what the hourly charge includes. For example, this rate usually covers all normal office supplies but excludes postage or anything bought in specifically for a job.

Workload: Weekly work for a VA ranges from general admin to bookkeeping, marketing to events; there is no all-encompassing job description. VAs are also starting to take on more social media responsibilities so make sure you are maximising a broad range of services.

Blog provided by Caroline Wylie owner of Virtually Sorted and founder of the Society of Virtual Assistants.

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Recipe for start-up success: five key ingredients

June 12, 2014 by Guest contributor

Recipe for start-up success: five key ingredients/Spices and herbs in bowls{{}}There's no doubt that as a start-up you live on the entrepreneur diet of hard work and dedication. However, over the years I've also identified five other essentials that have been vital to our success…

1 Work from the ‘front line’

My role is to direct the strategic growth of the company and leave the day-to-day management to senior staff. However, from day one I've maintained a keen eye on the 'front line'. Each morning I spend 25-30 minutes reviewing our customer service enquiries to understand what the complaints are, what's being returned, etc. I even listen into recorded conversations for greater detail.

Spending time at the customer-facing side of the business allows me to spot trends I might miss if I were to be removed from the heart of the business. Often trends are only understandable if you have insight into what customers want here and now.

2 Taking a scientific approach to marketing

This ethos has been essential to driving our growth. Now, all the decisions we make are based on cold, hard facts rather than instinct. As a result, we take an obsessive approach to data. We trial and test everything to finality, exploring each and every variable to develop the best possible system for all our services.

This means we evaluate all that we do, from comparing our competitor's prices to analysing our customer's feedback to one product over another. Furthermore, we define short-, medium- and long-term goals. With goals in place it's easy to work backwards to identify the stepping-stones needed to reach that success - and therefore all the elements we need to trial and test to get there.

All our analysis is done in-house, we never outsource. The ability to harness data is something all business owners should learn. If you can interpret figures, you can determine your business's strategy. And you don't want to put that power in the hands of someone else.

3 Know when to outsource

You can feel compelled to manage everything in-house to try to save money. In our experience, though, it can be a false economy. In your quest to cut overheads, you spend time you don't have striving to be a ‘jack-of-all-trades’, often leaving yourself vulnerable to mistakes. Outsourcing has been one of the best things we've ever done. It allows us to employ agencies, such as recruitment and PR, to deliver on our goals, achieving what we want, but don't have the time or experience to afford.

4 Reward your staff

Recruiting the very best is great, but ensuring you can offer an ongoing, rewarding experience is crucial. We reward staff in a way that motivates. We have found that if you pay your employees market or above-market rate and offer them praise them when deserved, your staff will meet their targets. People are driven to do well and if you make sure you pay them enough so money is not a distraction, their focus will be that purpose.

5 Focus on one business and one business alone

It can be very instinctive to run from one great idea to the next. A short attention span seems to be the DNA of an entrepreneur. We soon learned, though, that it's best to focus on one business to the nth degree. We initially set up a number of sister companies alongside Cartridge Save. All were online retailers, built upon a similar model, so in theory, should run like one another. The reality was they were all equally demanding and we spread ourselves too thinly. So, we decided to focus on the cartridge ink business and operate in a market in which we knew we could really make difference.

Blog supplied by Sean Blanks, managing director of express online printer cartridge supplier Cartridge Save.

Further reading

Why starting and investing in Community Interest Companies is about to become even more viable

June 04, 2014 by Guest contributor

Why starting and investing in Community Interest Companies is about to become even more viable{{}}CIC Regulator Sara Burgess explains a key regulatory change due for introduction in October 2014 that will come as welcome news to good causes, Community Interest Companies (CICs) and their investors.

In 2015, the Community Interest Company (CIC) model will be ten years old. It has proved to be one of the fastest-growing structures in many years, in spite of some early reservations, hesitation and fears.

CICs have slotted very successfully into the mix of options for meeting social need and delivering social purpose. They have weathered the economic crash and the numbers continue to increase. By the time we get to the 10th anniversary in June next year, there will be well over 10,000 CICs across the UK and we are likely to see more growth following some key recent initiatives.

CICs limited by shares have always been able to distribute some of their profits in share dividends to private investors. Over the years it has become evident that the regulations around this created barriers to setting up a CIC limited by shares and to investment into them. We made some changes in 2010, but when we consulted on it again in 2013 it was clear there was more to do. 

In October 2014, the regulations will change to remove the 20% cap on share dividends and as a result of this remove the peg to the paid-up value of the share, which amongst other things was making CIC shares of little interest to investors.

CIC shares will have greater value, but CICs will still only be able to distribute 35% of post-tax profit in dividends, everything else is kept in the company. The more profit the company makes, the more it can pay in dividends (within the 35% distribution cap).

If a CIC has sufficiently more profit to pay its shareholders, it is making sufficiently more profit to put back into the purpose of the company, to meet its community interest. If the CIC is paying millions in share dividends, imagine how much it will be putting back into its community interest! Shareholders will get a return on their investment and see a return on the social impact of the company. Once it is set up, the CIC will always be a CIC, unless it winds up so it won't be taken over by shareholders who want to take all of the profit.

  • For information about how to set up a CIC (including converting an existing company into a CIC) and to download the relevant forms visit the website.

Further reading

Four common characteristics successful businesses share

May 13, 2014 by Guest contributor

Four common characteristics successful businesses share/ 3D metal number 4{{}}If you’re a fledgling entrepreneur, starting your own business will be one of the most daunting things you’ll ever do. Whether it’s burning ambition, necessity or the fact that entrepreneurship is hardwired into your DNA, being one of the brave that takes this leap will be life-changing. 

Being a new kid on the block can be overwhelming and you will meet people who will want to give you their advice. Picking your way through what’s good and what’s not is no mean feat, so Phil Sharpe, mentor at the University of Southampton Science Park Catalyst Centre, has identified four common characteristics successful businesses share.

1 Team

In a new business, it all comes down to the people and particularly the leader. To run a successful team, a leader needs to be creative, logical, passionate and able to be compelling and articulate. However, you also need to recognise that you can’t do everything on your own, so you must get the right people around you.

2 Diligence

Make sure you’ve looked at your business from every angle and worked out what your strengths and weaknesses are. It’s good to ask others and take on board their criticisms. A lot of people who are naturally passionate about their start-up seem to take criticism too personally, but actually it can be really powerful stuff. Just by recognising that somebody else has a different angle on your business – an angle you could never have because you haven’t got the same experience of life – could be vital. It’s important to turn negative criticism around and use it to your advantage.

3 Luck

You can make your own luck – and there’s a risk that you fail to spot it when it presents itself. So, being aware of opportunities worth taking is certainly part of starting out. Randy Komisar [venture capitalist and lecturer on entrepreneurship at Stanford University] has written a great book on being a successful start-up. He talks about how the basics of business have been written 100 times – the business plan, the value proposition, etc – but he thinks that all this is only about 30% of business. The other 70% is luck.

4 Perseverance

If you think you can put something off until tomorrow that can be done today – don’t even think about starting a business. To run a thriving start up, you must be able to persevere against adversity, because you’re going to get a lot of that. According to Alex Rovira and Fernando Trias de Bes, authors of Good Luck: Create the Conditions for Success in Life & Business: “Creators of good luck don’t give up or postpone. When a problem or situation arises, they act immediately to either solve it without delay, delegate or forget about it.”

Further reading

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

Seven key steps from freelancer to business owner

May 06, 2014 by Guest contributor

Seven key steps from freelancer to business owner/ 3D golden number 7{{}}The transition from being an independent freelancer to a business owner is a process of shifting responsibilities and needs. For me, moving from freelance copywriter to founder and MD of my own copywriting agency has been one of moving from one set of challenges to the next – and developing processes or recruiting people to meet those challenges.

As the business has grown we’ve increasingly moved from being reactive to proactive, and that has been crucial in ensuring the continuing success of the agency. I’d like to share with you seven proactive steps you need to take to move your business to the next level. Many of these are true not just for freelance copywriters moving into agency territory, but anyone making the shift from self-employed individual to business owner and boss.

1 Stop marketing yourself – market your business instead

To give clients the sense they’re dealing with a bona fide business rather than an individual, you need to market your business as such. Outline the core values of your business and shift from using ‘I’ in your promotional copy to ‘we’. Consciously create a brand image that leverages the strengths of your agency and sets it apart from the rest.

2 Start delegating

Once you’ve got staff, use them. There are only so many hours in the day, so to grow your business and focus on areas such as marketing, entrust certain activities to others. Once I’d taken on other copywriters, I found I spent most of my time being an editor. Later, I went on to recruit one of my senior writers to work full time as an editor, freeing me up work on expanding the business and developing processes to increase efficiency.

3 Get your cashflow in order

As a lone freelance writer you can weather the lulls and cut back on the groceries till that big client finally pays up. But if you’re employing other people (or even sub-contracting to other freelancers) you must have a much better handle on your cashflow. Nobody works just for praise and promises, and if you can’t afford to pay them, you may find that your business suddenly contracts again.

4 Invest more in marketing

Continued business growth requires an investment of time and money in marketing. You also need to develop a cohesive marketing strategy that will exploit your business strengths and conform to current market conditions. If you fail to market sufficiently or effectively, you may find you’ve got an excess of manpower and a shortage of work.

5 Set up and refine processes

To produce a consistent product, you need to have processes that ensure quality. This extends to everything from gauging client requirements and expectations to briefing writers, invoicing clients and dealing with problems that arise. Remember, delegating will give you the time to develop these processes.

6 Consider expanding into different areas

One of the key transitions from freelancer to business owner is to redefine your offering. Where once we focussed solely on providing writing and editing services, now we offer PR, consultation and training. The larger your business grows, the greater the possibilities.

7 Develop recruitment and training policies

As a freelancer you are in direct control of the quality of your output. As a business owner your staff now play a crucial role in maintaining that quality. Effective recruitment and training policies will go a long way keeping standards high. Your staff are now one of you key assets. Look after them!

Blog supplied by Derryck Strachan, MD of content marketing and copywriting agency Big Star Copywriting.

Further reading

So where did small businesses figure in Mr Osborne’s thinking?

March 19, 2014 by Liz Dawe

So where did small businesses figure in Mr Osborne’s thinking? {{}}

Personal, yes. Political, certainly. Business focused? Not that I noticed.

Like much of the country, we’ve been glued to the Budget today wondering if there’ll be any surprises from George Osborne. As publishers of the Donut websites, we’re always particularly interested in what the Budget means for small businesses.

Mostly, the Budget came across as being a feel-good one, with an eye to individuals. The saver, the pensioner, the tax payer all have cause to feel uplifted by the Budget. Those pension pots that have hitherto been locked behind measly annuity schemes, unless you want to pay punitive tax levels to draw them down, suddenly seem within shiny reach at only a basic level of tax.

Those people, and no, I’m not one of them, with a spare £15,000 per year to squirrel away will now be able to put it all into tax efficient ISAs. The personal tax allowance increase actually puts more real cash into a lot of pockets. Families could breathe a little more easily with transferable tax benefits and childcare allowances. Companies with up to £500,000 to invest in developing their business could also do well.

The continuing help for first-time buyers and the promised increase in housing stock is good news for associated companies including removals firms (who also benefit from reduced fuel duty), the construction industry and conveyancers.

So much for individuals and big businesses. But most micro-businesses and start-ups, who were singled out for attention in last year’s Autumn Statement, would still be straining to hear themselves mentioned.

Arguably, any Budget that makes people feel more optimistic and actually changes the amount of cash they have to spend, from tax cuts or accessible pension pots, will boost the recovering economy. And that, in turn, is good news for small businesses. It also, of course, won’t do any political harm to the Coalition.

Personally, I thought the tweet from Norman Smith, chief political correspondent at the BBC News Channelsummed it up nicely: "Booze, Bingo, Business and Savers. That's your #Budget2014 Folks."

Why has enterprise education been so successful in Wales?

March 10, 2014 by Lauren Pennycook

Why has enterprise education been so successful in Wales?{{}}As a teacher, enterprise policymaker or head of a government department, how do you get young people to consider starting a business as a possible career path? How do you explain the highs and lows, challenges and opportunities and realities of running a business?

The approach taken in Wales is to bring local entrepreneurs and young people together, from primary school right through to university, to raise awareness of entrepreneurship, encourage students to take part in enterprise challenges and competitions and provide them with the tools to start a business. It may not sound groundbreaking, but the Welsh Youth Entrepreneurship Strategy is seen as a success across Europe, and evidence suggests that the impact of the strategy is three-fold.

1 Aspirations and confidence

Young people who have taken part in enterprise challenges and events report that their aspirations have risen as a result. Research suggests that more than half of young people in Wales aged 16 to 24 now aspire to work for themselves – a significant increase from ten years ago. Interviews carried out by the Carnegie UK Trust with those involved in delivering enterprise education in Wales suggest that this stems from an increase in students’ confidence, and in some cases, their leadership skills.

2 Entrepreneurial skills

Learning about enterprise from a young age and having the opportunity to take part in challenges that mimic starting a business equips young people with entrepreneurial skills. The Trust’s survey of student attitudes to enterprise found that 52% of Welsh respondents had sold goods online, while 64% had experience of selling face to face. Many students are using these skills to set up their own businesses. After the Welsh Assembly Entrepreneurship Action Plan was introduced in 2002, early-stage entrepreneurial activity among young people increased from 3.5% to 10% in 2011.

3 Start-up success

The final and ultimate support for budding businesspeople in Wales is the help made available through the Youth Entrepreneurship Hubs to develop mature cashflow and business plans before asking for financial support. This bridging stage between education and work helps young people to discuss their plans with business advisers on a practical, day-to-day basis. And in return for supporting enterprise from an early age, the Welsh Government is being rewarded with more graduate start-ups compared to other parts of the UK and Ireland.

Those involved in delivering the enterprise agenda in Wales are well placed to share their success with governments in other parts of the UK and Ireland. Sharing what has proven to work well across national boundaries might just be the starting point for UK start-ups of the future.

  • Blog provided by Lauren Pennycook, Policy Officer at the Carnegie UK Trust. The Trust’s new briefing, The Welsh Dragon: the success of enterprise education in Wales, can be downloaded here.

Should you trade as a partnership or limited company?

March 03, 2014 by Guest contributor

Should you trade as a partnership or limited company? /Team work concept with puzzle{{}}If you’re planning to start a business, you will need to decide how you want to trade, whether it’s as a limited company, partnership or sole trader. This will largely depend on how many people are involved, the type of business and how you want it to be run.

If you’re going into business alone, becoming a sole trader may be the best option. However, if you want to work with and employ a number of people, you can trade as a partnership or a limited company. But which one is best?

A partnership has a very different structure from a limited company in terms of accounts and liability. There are, though, advantages and disadvantages to both, so you need to know all the risks involved before you dive in.

Key features of a partnership

A partnership is similar to a sole trader business but, of course, a partnership must involve two or more people to own the business and share the responsibility. This can have its upsides and downsides, but the main points are:


  • Tax efficiency. With a partnership, you draw earnings, as opposed to receiving a salary through PAYE. You also don’t need to make National Insurance contributions.
  • There’s no need to register at Companies House or file annual returns, however, it’s usually recommended that a partnership agreement is made, which explains the business structure, legalities and each partner’s responsibilities.


  • Joint and several liability. This is quite a big disadvantage, but this can be overlooked at the beginning (no one wants to think about what would happen if their business fails). Each partner is liable to the entire debt of the business. 
  • Regardless of each partner’s financial status, if one cannot afford to pay any debt back and goes bankrupt, the entire debt will be left to the remaining partner(s). Worst-case scenario, a partner may have to sell the family home to pay the partnership’s debt.
  • If a partner leaves a partnership business (eg retires, changes job/career), they may still be liable if the business becomes insolvent later on. Some partners who leave a partnership choose to continue investing, because they often get a good return over the years. However, they could be brought back into legal dispute and liability clauses if the business becomes insolvent. 
  • Shared responsibility. This can lead to disputes and falling-outs. There’s the old saying: “A friendship founded on business is a good deal better than a business founded on friendship”.

As licensed insolvency practitioners, we’ve come across numerous partners who have realised too late just how liable they really are. If a partnership is the preferred type of business, all partners must be aware of what’s at stake and know exactly what they are getting into from the beginning.

What is a Limited Liability Partnership (LLP)?

This is a corporate structure that gives partners limited liability and has similar traits to that of a limited company, while keeping the tradition of a partnership. It gives partners the benefits of a partnership, but allows them to be only partly liable if things were to go wrong.

Key features of a limited company

A limited company is owned by its shareholders (usually the directors) and all profits generated belong to the company. The company debt remains separate from individuals.


  • Directors of a limited company are not personally responsible for the company’s debt. If the company goes downhill, the directors and shareholders will undoubtedly be upset and worried for the business, however, the worry stops there. Their own personal circumstances will not be affected (eg their mortgages, savings and other personal investments are safe). However, if there has been any wrongful trading, this won’t apply. If the authorities can prove the directors have been fraudulent, they will be held personally liable.
  • Work and life at home can be separated financially because setting up a limited company means there will be clear legal boundaries between the two. This in turn can help ensure good balance and wellbeing.


  • A limited company must register and file annual returns at Companies House.
  • Companies must pay corporation tax.
  • There are more director duties and legal responsibilities.
  • Higher accountancy fees.
  • Some creditors might worry that if they are dealing with a limited liability company, they will have less protection against debts.

It’s impossible to tell how well a company may do in the future. If the business is a success, a partnership can be highly beneficial. However, if the business were to fail, would you be prepared to pay off the entire debt and put your own personal finances at stake? Regardless of the kind of business you want to set up or how many people you want to involve, you must consider all the risks (as well as benefits).

Always seek professional advice

This article provides only a basic introduction – it does not constitute legal advice. The law on partnerships in particular is complex, with little case law, therefore you should always consult a lawyer if you are worried about your personal situation in any partnership and indeed company. 

Blog supplied by Keith Steven of KSA Group is the author of Company Rescue. He has been rescuing partnerships and companies since 1994 using the company voluntary arrangement method.

Further reading 

Why I set up a community interest company

February 17, 2014 by Guest contributor

Why I set up a Community Interest Company/Bristol colorful writing{{}}As a newly fledged social entrepreneur who needed a constituted organisation, but who was also a headstrong and independent sole trader, having to think about boards of directors, reports, red tape, being told what to do and how to do, well, it was never going to be easy. 

Previously, as a consultant, I’d seen far too many boards of directors and trustees who, rather than operate for the good of the organisation and its aims, were more about personal aggrandisement, power, status and a belief that turning up to meetings was enough (oh, and if they didn’t like the founder, they’d simply get rid of them).  

So to even consider going into something that would possibly end up being the very means of my being sacked from my own project did not look that brilliant. Nevertheless, the pressure was mounting to become a robust trading vehicle for a social enterprise, something “proper” with which we could raise funds.

The whole point of any enterprise is to be a successful and viable business, and with the “social” aspect, the income then becomes a vital energy resource for helping to achieve the social purpose, not an end in itself.

Faced with the tangle of options, I began to find out more about community interest companies (CICs), charities, not-for-profits, limited companies, mutuals, co-ops and how they differed. In the end, making the decision was easy. 

A CIC allowed me to be a sole director and be a paid member of the working team.  This gave me a voice on the board, which is difficult for paid employees of a charity. This would help me to remain in control of things, while the locked assets offered security for the future. By law, when running a CIC all profit must go back into serving the community and the social purpose defined in the CIC’s Memorandum and Articles. It was the perfect structure and said on the packet what we were.

But to be able to apply for funding I needed another director and so began the quest to find people who would advise more than direct. The complexity was that the wonderful people alongside me were by law responsible for the financial and legal integrity of the organisation and therefore had a right to their opinion about how the company should be run. I found that really difficult and learned a great deal about myself and about how the label of “director” changes the dynamic of meetings. 

I have put that learning to good effect in constituting Music For All Zimbabwe as a CIC. We have only two directors, Fidelis Mherembi, whose vision it is, and me. Whilst allowing Fidelis free reign in his visionary decisions, this structure also secures the purpose of the company, which will continue to serve its community even if Fidelis and I both 'snuff it'. Any locked assets by law remain in service to the social purpose and cannot be sold to line the pockets of the next directors. That security of the future and the freedom in the present makes it a solid foundation from which to build. 

CICs are becoming increasingly popular for many reasons and it will not be long before there are 10,000 of them in the UK. The influence of this dedicated social enterprise vehicle being adopted will be interesting to watch over the next few years.

Blog provided by June Burrough, founder and former director of the Pierian Centre, which opened in Bristol in 2002 as a centre for training and self-development and became a CIC in 2008, before closing in December 2011, and co-director of Music For All Zimbabwe.

Further reading

Five reasons you need to outsource

December 10, 2013 by Guest contributor

Five reasons you need to outsource /outsource{{}}For many reasons small and large businesses choose to outsource particular tasks or services to third parties and agencies. As outsourcing continues to evolve, so do the reasons for SMEs and bigger organisations to consider adopting those methods for the good of their business.

The primary reason for outsourcing and outsourcing immediately is to cut costs, because this is the main driver for many businesses that choose to outsource work. But let’s look beyond the pound signs and see some of the other popular reasons for outsourcing services in 2012 and beyond.

1 Saving internal resource

In demanding industries there are many instances where highly pressurised employees simply don’t have enough time to focus on core business functions that can drive long term growth.

Businesses need as many people as possible to be able to focus on the profit-driving areas of their organisation. By outsourcing certain tasks or services to third parties, companies can save valuable internal resource to devote towards moving the business forward.

2 Corporate tax rates

Some businesses choose to outsource particular services or divisions of their business overseas to take advantage of greatly reduced corporate tax rates. Countries such as Hong Kong, Taiwan, Singapore and closer to home, Ireland, all boast very low corporate tax fees that can significantly improve a company’s bottom line.

3 Enhanced service

There may be an area of your business that would require significant in-house and external training to get employees up to speed. Subsequently, it may be more cost-efficient to simply outsource the entire service to a third party or agency. It is quite possible they will add greater value than you even anticipate due to the skills and expertise they possess. Why spend time and money learning new services and skills if you can employ a professional to do it for half the cost?

4 Always available, always accessible

In some cases, businesses choose to outsource services or divisions of their organisation to make sure they appear constantly accessible and available. To create the impression of operating 24-hours without closing down it is possible to outsource to an overseas partner that can do important work overnight, while catching up on much-needed sleep!

5 Less contractual risk than employing full-time staff

Although reaching agreement with outsourcing contractors can be unsettling and protracted, outsourcing work carries significantly less contractual risk than employing a full-time member of staff. Contractual agreements can be created to offer protection for both parties, while removing any difficult human interaction that can occur when in-house employees are dismissed. Outsourcing firms can be held just as accountable for poor performance and poor quality of work as a full-time employee.

While outsourcing requirements will naturally differ from business to business, there is no getting away from the fact that outsourcing is becoming a key component to the day-to-day strategies of successful businesses.

Blog written by David Campbell of Pall Mall Estates, “one of the UK’s leading providers of affordable commercial space to rent”.

Small business Saturday - what we can learn from the USA.

December 05, 2013 by Guest contributor

This weekend is the UK’s first Small Business Saturday, an initiative originally founded in the US to raise awareness of small businesses. Its success in the US has been impressive with American shoppers spending £3.4bn in independent stores in 2012.

Small Business Saturday therefore represents a significant step for the UK in promoting, supporting and developing independent businesses. The UK can learn a lot from the US where there is a culture of entrepreneurialism and where advice, information and funding is readily available.  

The UK economy looks set to improve, the Chancellor has pledged to help UK businesses in today’s Autumn Statement, and we have certainly seen an increase in demand for funding to assist with investment in small and independent businesses, which indicates that there is pick-up across this huge sector.  This is good news for both individuals making a living out of these small and micro-businesses, and for the suppliers to them and their employees.

The small business sector is critical to the success of the UK economy so any initiative that helps drive the start up & growth of small businesses in the UK can only be a good thing. 

Blog by Julio Vildosola, CEO of Liquid Finance

Top 20 business founders' fundamentals

October 28, 2013 by Guest contributor

Top 20 business founder’s fundamentalsmetal number 20{{}}Ideas are in abundance. We all know people with passion, vision, ambition and a real desire to make a difference with their new ventures.

It’s been an honour for everyone involved in my organisation, Entrepreneurial Spark, to assist more than 300 start-ups, to help them realise their goals and turn some of these ideas into business. However, in this time we have also seen some stumble and their ideas dissolve away. Lack of effective execution is the number one reason for this, in our experience.

So what are the Top 20 business founders' fundamentals to enable successful transition from idea to business? 

  1. Execution begins when you have validation of your idea (eg some early sales) and have made a significant commitment to your business (eg received investment, quit your job, remortgaged your house, etc).
  2. You can’t do business sitting on your backside. You must get out there and meet real customers in their world. Witness them dealing with your teams, procuring and using your product and services. Only then can you really know what’s really going on.
  3. Sorry, your idea is worth nothing! The quality and effectiveness of your execution will dictate its value.
  4. An operational system will bring rhythm to your chaos and help you turn your strategy into business ACTIONS.
  5. Hire the best people you can afford. Clichés are all too often true! Often we struggle to actually do this! Hire slow.
  6. Watch who you get into business with.
    Watch who you get into business with.
    Watch who you get into… You get the message, right?
  7. Mind the gap. Recruit your weakness, the things you don’t like to do or are not good at (eg operations, selling or finance).
  8. It’s all about the money. Get a great finance director, if finance is not your bag. Even one day a month is better than nothing.
  9. Pre-mortem: agree your total affordable loss before you commit. “When will we pull the plug if this one doesn’t work?”
  10. Manage cashflow with surgical precision and never hide bad news from yourself or others.
  11. Create the “A” team. Drive out the “C” players. The bad behaviours and the insecure senior managers.
  12. Drive alignment across every member of your team with amazing communication. Your purpose: “big, hairy, audacious goals”, business actions and dashboards for everyone to track their progress.
  13. Discuss the “un-discussable”- what’s the scary thing no one wants to talk about. What really moves the dials?
  14. Create rewards/compensation that supports alignment. Watch out for “gaming”- rewarding behaviour at the expense of the bigger picture (eg sales without the service).
  15.  Listen. Practise this discipline. Watch the best, they listen and understand others intently.
  16. Don’t over-talk a point. Stamp out time-wasting meetings.
  17. Discuss your learnings with your team when things don’t work or if you get some feedback/data. Re-imagine, re-shape and #GoDo!
  18. Take action- especially the tough decisions. Do it NOW!
  19. Look after yourself. Manage your capacity and keep in touch (in person not online) with the other world.
  20. Ask yourself and others – “Should I be the leader”?  Be prepared for a “no”. It’s OK; there are plenty of other things you can do in the business. Leadership is not for everyone.

Recently I had the pleasure of meeting David Grevemberg, CEO of Glasgow 2014 [next year’s Commonwealth Games]. He has a deadline that cannot slip. He can’t shift the whole schedule a couple of days because of unforeseen circumstances or because “it’s not perfect yet”. He must execute with precision and his team are totally aligned to this goal. If we want success and a legacy, we must behave the same way.

Blog supplied by Brian McGuire, co-founder of Espark.

Posted in Set up a business | Tagged strategy | 1 comment

Three ways start-ups can access free support and advice

October 02, 2013 by Vicky Brock

Three ways start-ups can access free support and advicehand with three finger pointing up{{}}When I set up a technology company to help retailers, I knew we had to spend time developing our products, so I made practical help from business advice bodies and boot camps part of the plan. As a result, we enjoyed three big benefits. I believe any of them could potentially help transform a start-up’s proposition and how it is developed.

1 Practical support is out there…

Firstly, build resources and practical assistance from government, local enterprise partnerships and business support programmes into your thinking. From the outset, I took our company into a local technology incubator. It helped us to focus on developing our software products in a supportive environment. 

Universities and other big institutions such as the British Library are increasingly providing advice and space for start-ups – often for free. Cities such as Sunderland and Dublin are setting up citywide free wireless zones or making their databases available to entrepreneurs to encourage innovations. Could they make the difference to your start-up when cash is tight or you want to expand with modest funding available?

2 Big firms can help you…

Secondly, take a look at accelerators that global firms such as IBM or Shell are setting up. Look beyond the publicity aspects, too. The biggest step up in for us was winning IBM SmartCamp, part of IBM’s Global Entrepreneur Programme, which supports innovative small technology start-ups over the longer term. 

In this type of event, entrants make their pitch Dragons’ Den-style. It forces you to really focus on your value proposition and rework it. You get advice from experienced entrepreneurs and commercial managers and they’ll soon let you know if you’re trying to reinvent wheels.

In these accelerators, successful entrants open up strategic guidance, sales advice and IT support opportunities, not only at the event itself, but also in the months that follow.  By winning our heat, we were given long-term office resources, such as software licences that enabled our developers to build products. Today’s big firms are opening their doors to start-up as never before.

3 Advisers can open doors…

Finally, think of the doors that large organisations’ events and advisers can open for you. The Scottish government helped our team get on entrepreneurship courses that instilled a "think big" mentality in our team. This helped us to draw up business plans, but more than that, gave us real confidence and ambition. 

And, in entering start-up accelerators, firms can catch the eye of seed funds and angel investors. We gained product development that we would have missed out on otherwise. Business support, commercial advice and networking opportunities are out there ... and a surprising amount of them are free.

Blog supplied by Vicky Brock, CEO of Clear Returns, which provides predictive intelligence technology for retailers, targeting the costly problem of returned products. 

Buying a business: key questions answered

September 23, 2013 by David Anderson

Buying a business: key questions answered/finance numerals and charts{{}}I want to buy a business and I’m thinking about what tactics to adopt…

The first thing to appreciate is that it is easier to fall out with sellers than to keep them onside. You will get a better buy if you can keep the seller onside at least for as long as possible. Once you fall out, mending fences is impossible.

So what do you suggest?

Sellers usually have a sale figure in mind. Agreeing a sale price at the outset slightly above this figure gives the seller a feel-good sensation and makes him/her think that he/she has a margin to play with. It also means he/she is unlikely to start talks with other buyers.

But I don’t want to pay an inflated price...

You won’t. Once the nitty gritty negotiations start, you will ask for guarantees as to the business’ turnover and profitability for say the next 12 months and ask for money to be retained. If the business turns out to be a star buy and performs above your expectations, the full stated price is probably acceptable. If it does not, you will have held money back, which the business sale agreement will enable you to deduct from the purchase price.

How much should I hold back?

As much money as possible – for as long as possible. The agreement can provide for money to be released in slices. Your seller is unlikely to agree to more than 50%.

Who should hold the money?

Ideally you, although the seller might want money held by a solicitor in an escrow account.

What happens if after agreeing a price when I put this to the seller he/she threatens to sell to someone else?

See if he/she does. If he/she comes back to you it means he/she has not been able to. You can then push him further. Remember, they will be thinking about your headline figure, which they probably cannot get elsewhere. You can also tell the seller that if the business does better than they anticipate, you will pay more based on performance. This way you can tell them that they have an upside, as well as a downside, and an interest in making the transfer work.

If I keep pushing the seller, how do I know when I am going too far and will lose the deal?

When the seller goes very quiet and stops coming back to you. It is better for you if they respond angrily at this stage, because it’s a sign that they still might eventually sell to you. If they do not respond, they have either written you off or they are talking to another buyer. Most deals reach an “angry phase”, after which the deal happens or does not. The skill is to manage how and when the seller gets to the angry moment and how this moment is managed, so you stay in control.

What else?

The seller and any business transfer agent will be keen to get “Heads of Agreement”, which outline the deal. This will be what the lawyers drawing up the sale agreement will work from. Tactically, if you want to keep matters as fluid as possible, you should either delay agreeing the Heads of Agreement or ensure that they are drafted in a form that is flexible. This way, it will be impossible for the seller to refer to these as “agreed” when the goalposts start to move.

What about due diligence on the seller?

Don’t be shy – it’s your money you are spending. Get as much information from the seller as you can. Don’t rely on solicitors or accountants to do this. They can help, but ultimately it’s your call. If there are things that are unsatisfactory, you will want money held back or deducted from the price.

What about business transfer agents?

They will be thinking about their commission and will therefore be keen for the deal to happen. If you knock some money off, it won’t have a big impact on what they get, so they will be on your side. If the business doesn’t sell, they will get nothing.

What about solicitors?

Most are useless at negotiations. You are best not involving them at this stage. By definition, if they were good at negotiating they would be successful businessmen making much more money than solicitors.

What about tax?

It’s a crucial consideration. Sadly, there is always a third party trying to get money – namely HMRC, which people often forget about. At the outset, Get to grips with tax both from your perspective and your seller’s. It could make a big difference to you. Your seller may have tax angles and you need to factor this in. If you can do something that helps them save tax, use this as a negotiating lever. Do not lose the deal because you are insensitive to the seller’s tax position. Finding a way to pay HMRC the least tax is good news for you both.

Blog provided by David Anderson (solicitor advocate and chartered tax adviser) and Alan Massenhove (commercial solicitor) at Sykes Anderson LLP. Please note that commercial and tax law are complex subjects and you should not rely on this article without professional advice on the facts of your case.

Further reading

Giving online retailers a shop window

May 08, 2013 by Guest contributor

Giving online retailers a shop window/business owner infront of store{{}}Is the high street the future for online retailers?

As an online retailer, how do you know how your product is going to sell in the 'offline' market?

With 60% of new businesses now started at home, this is a question being asked more and more frequently. PopUp Britain reckons it has an answer.

The private sector funded scheme offers start-ups a chance to put their products to the test on the high street. The campaign’s first shop, a former estate agent premises in Richmond, Surrey, which had been standing empty for a year, played host to more than 60 start-ups in its first five months.

The not-for-profit campaign intends to make use of the growing number of empty shops on the high street in order to encourage small start-ups to grow by providing an affordable opportunity to test the waters with a 'real' shop.

The scheme’s latest project is based on the iconic King’s Road. The shop is a former electronics showroom which has been empty for three months. It has the capacity to house twelve start-ups at a time, and each will pay £240 for a two week stint to cover costs.

The latest shop, which opens on 9th May, is designed give fledgling businesses from around the country a low cost opportunity to test their products in an area that has famously played a key role in supporting independent British brands for decades.

As retail start-ups begin to realise that in order to build a solid brand they need to be in bricks and mortar, interacting with their customers face-to-face, PopUp Britain could provide just the opportunity they need. It neatly helps them keep all the advantages of online retailers like Amazon, whilst having a low cost route to the high street.

If you think you fit the bill, it’s free to apply:

How much work satisfaction do you get?

April 25, 2013 by Guest contributor

How much work satisfaction do you get?/tired business man sleeping{{}}Research published recently suggests the average working adult in the UK is “59% happy in their current job role”. Researchers commissioned by Surbiton High School asked 2,000 employees to rate their level of contentment at work in 11 key areas, “from pay and company perks to relationships with colleagues and management”.

According to the study, workers are generally satisfied with their holiday allowance and relationship with colleagues, giving ratings of seven out of ten for both. Perks received four out of ten, the lowest score, with employees believing they should be entitled to mobile phones, laptops and even private health care.

Respondents were unhappy about their promotion prospects, which were rated just five out of 10. They gave a more encouraging six out of ten each for level of pay, relationship with the boss, work load, working hours, working environment, social life, size of team and hierarchy.

14% claimed they would be happier if they were allowed regular tea breaks, while 34% appreciated being able to manage their own workload. One in three said they liked the feeling of being able to make a difference, while 22% wanted to be able to talk to people every day. An easy commute was also important to 35% of people, while 18% said they would appreciate yearly bonuses.

When it comes to profession, teachers were happiest at work (presumably the poll took place before Education Secretary Michael Gove called for pupils to work longer days and have fewer holidays), with the “satisfaction they gained from working with children far outweighing the negatives”. Secretaries were second happiest group at work, followed in order by engineers, accountants, drivers, shop assistants, caterers, trades people, lawyers and those working in customer care.

Career dissatisfaction continues to be a key reason why people continue to give up their jobs to start their own business, with numbers continuing to rise. According to Enterprise Nation, there was a 10% increase in new businesses in 2012 (484,224) when compared to 2011 (440,600).

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