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There’s nothing like the subject of maternity and paternity leave to get people hot under the collar. And so the news that the government is proposing a more flexible system that will encourage men and women to share parental leave has had mixed reactions in the business community.
The new approach will come into effect in 2015 and could include new provisions for parents to take time off in several short blocks.
“We support moves to make parental leave more flexible,” says Katja Hall, CBI director for employment policy — or ‘the voice of reason’, as I call her. “This will help families better balance their work and home life.” But she adds, “Any changes will need to be simple to administer and must allow firms to plan ahead to cover staff absences.”
Absolutely. No-one wants to hamstring businesses.
So what are the arguments against this new flexibility? Some business groups are saying that shorter periods of leave will be too difficult to manage. They say it’s already hard enough for small firms in particular to find cover for employees on parental leave. Some even warn that the proposals could see some small firms going out of business.
OK, it can be challenging for small firms to cover staff on leave. But it’s not impossible. Who are these totally irreplaceable people? And I really don’t buy the idea that parental leave could bring an otherwise healthy small business to its knees.
Mind you, this is the constructive criticism. The more outlandish comments online include rants about “the scroungers who see baby breeding as a way of life” and the suggestion that we “look at this question again when men start giving birth”.
Let’s stick to the facts, people. Lots of couples decide to have kids. Often both of them work. Babies need looking after. People need to work. How individual families approach the division of labour — both bread-winning and domestic duties — should be entirely up to them.
I believe that making parental leave arrangements more flexible can only be good for businesses. By spreading the leave between two parents, the absence of one individual employee is likely to be shorter. And taking that leave in shorter blocks could make it easier for businesses to manage without that employee — knowing they won’t be gone for long.
Of course it all depends how it is administered and managed. Small businesses don’t need any more red tape, that’s for sure. And while these new parental rights are to be welcomed, businesses have rights, too — the right to be kept fully informed with enough notice to make their own arrangements.
The Department for Business is to launch a consultation with businesses on this issue soon. Perhaps if the nay-sayers were to look at the proposals more constructively, instead of offering their usual knee-jerk reaction, we could develop an enlightened approach to parental leave that is good for families and good for businesses.
Previous articles on parental leave
September 2010: Maternity leave extension too costly for small firms, warns BCC
Recently, I discovered the meaning of a ‘BHAG’, it’s big, hairy, audacious goal. Immediately, I loved the idea of setting some out-of-reach challenges that would push my comfort zone. I came up with the following:
Winning an award last year really gave me a huge confidence boost, led to the start of some interesting PR and gave my product the credibility it needed to move forward. Already I have pinpointed three awards to apply for this month alone. It is time-consuming and competitive, but the process of completing the applications enables you to refresh in your mind what your business is all about, while being shortlisted is great recognition. However, my BHAG is to win!
Having been in contact with the PR people for both Sara Cox and Denise van Outen, I sent them photos of the products I’d like to send and then sent both of them a gift from Mama Jewels hoping for a little recognition. At the time they both had very young children and seemed to be the ideal people. I appreciate that this is a tricky one, particularly with jewellery, because everybody has such personal and different taste and perhaps what I thought they might like, may be completely wrong.
I had a very lovely thank you note on Twitter (two in fact) from Denise Van Outen, but nothing from Sara Cox (I guess she didn’t like my choice). I’d be interested to hear how your business was able to get a celebrity quote…
Possibly Mothercare, NCT online or JoJo Maman Bebe. I’ve been taking small steps and building up credibility, now I have people approaching me to become stockists, but so far I haven’t approached the larger stores. This year is the year I want to start working with at least one of them.
Last year was all about taking small, manageable steps, establishing good relationships with suppliers, finding out which designs sell and which don’t, working with small retailers, building my website, trying out fairs and shows and generally trying to create an income stream and gain recognition.
This year I’m determined to see Mama Jewels in larger shops, with more recognised retailers and move a step closer to becoming a recognised brand.
What BHAGs have you set for this year?
Amanda Waring, Mama Jewels
You can find out more about Amanda on the interactive business website www.inafishbowl.com
Research published recently by office-space provider Regus suggests the number of UK businesses who would take on working mums if they were recruiting has fallen significantly in the past year.
More than 1,000 UK businesses were surveyed and only 26 per cent said they would hire a woman with children, compared with 38 per cent last year. According to Regus: “With 43 per cent of firms saying they plan to increase employee numbers this year [itself quite a remarkable statistic], the proportion intending to recruit working mums is worryingly low.”
Sadly, when asked for key reasons, the same tired, old excuses (not reasons) reared their ugly heads. Some 38% fear “working mothers may show less commitment and flexibility than other employees”; while “31% believe working mums will leave to have another child”; and “17% are worried that women who return to the workplace will have out-of-date skills”.
Why are so many UK employers still stuck in the 1970s with their thinking when it comes to women with children? I’d wager that many of respondents were male – whadya reckon? And behind most successful businessmen, usually there’s a dutiful wife tucked away in the suburban background, who’s quietly looked after the kids and home for years.
Women seemed damned if they do and damned if they don’t. Most working mums I’ve worked with over the years could give many of their colleagues lessons in commitment. Trying to balance a career with childcare is no small challenge. Most families these days can only get by on two incomes, so many women have no choice but to return to work after having children – they do so out of necessity, not choice.
And while many women are allowed to work fewer days after having children (employers who facilitate such flexible arrangements take a bow), most working mums feel under added scrutiny and immense pressure to achieve the same results. They could give lessons in working hard, too. Many working mums try to cram as much work into their reduced working week as they did previously, which can eventually takes its toll.
The use of the word “flexibility” by respondents is interesting. This, of course, usually means willingness to habitually work for no pay. Surely by now we all know it’s about working smarter, not longer? And if your business really has to rely on employees’ willingness to work for free, you’ve really got problems. As long as people work the hours for which they are paid, employers can’t really complain.
On a more positive note, again according to Regus, 67 per cent or those surveyed said employers who ignored the potential contribution returning mothers can make are “missing out on a significant and valuable part of the employment pool”.
More than half (51%) regard working mums as “offering skills that are difficult to find in the current market”; and (revealingly) 45% value returning mothers because “they offer experience and skills without demanding top salaries”. (The implication being that some employers believe these women are just glad to have a job, so they won’t ask for pay parity with male colleagues.)
Generalising is a foolish and dangerous act. It’s certainly not my personal experience, but I’m sure there are women who show less commitment and don’t work as hard after they return to work after having children. In many ways, it’s a natural consequence. But as with any other employee, if there are problems with a working mum’s punctuality, attendance, productivity or quality, then your business should have processes and mechanisms to resolve them.
Some women will soon leave again – either temporarily or permanently – to have more children, and this often creates headaches for business owners and managers. But not taking on women with children or women of a certain age for fear they will soon have children isn’t the answer.
It seems some employers still have a lot to learn when it comes to the two-way streets that are commitment and flexibility.
When starting a business, one of the big decisions to make is whether to go it alone or start up with one or more partners.
There are pros and cons to both approaches, but one thing is for sure – it’s one of the most critical decisions you will make in your life. Not only can a lot of future prosperity depend on it, but it can also make a big difference to how happy you will be over many years to come.
If you’re on your own there’s no one else to fall out with; no one but you can decide to give up; have a family crisis or mess things up in some other way.
However, the right partner will usually double your financial resources and experience and you can encourage each other when times are hard. And the cocktail of skills you both have, along with the other factors, means that you’re more likely to succeed.
If you don’t have a partner and your business grows, you will need to employ staff. It’s a big jump from no employees to one (let alone more), both in cultural and financial terms. If there is more than one founder, it’s a smaller step.
When I was thinking of starting a business, for all of the positive reasons above I spent a lot of time looking for and wooing a business partner. I found someone with more entrepreneurial experience than me, who was great at raising funds and who brought with him substantial financial resources. Less than four years after we had started, we’d achieved a full listing on the London Stock Exchange and a business valuation north of £200m.
This experience can be balanced with plenty of other bad examples, of course. But it reinforces the point: deciding on whether to partner and who that partner should be is a crucial decision to make when starting a business.
Every business needs accounts. They may differ in format and complexity, but every self-employed person must produce accounts to complete their tax return, while limited companies must complete accounts according to the Companies Act. Here are the answers to a few frequently asked questions about start up account keeping.
Some small businesses don't like to open a separate bank account because of the charges, but if you don't have a dedicated bank account for your business, there is much more risk of confusion and your bookkeeping will take longer because there will be more transactions to account for – many of which will be irrelevant to your business.
Banks often give you a good deal when you start up, change banks or keep a minimum balance in the account. Even if there is a cost, this has to be set against the fact it will make your bookkeeping much easier, quicker and cheaper.
If HM Revenue & Customs investigates your business, you will be giving them access to your personal as well as your business income when they look at the bank statements if you mix everything up in a private account. It also means that whoever is preparing your accounts and tax returns will see details of your personal/private spending, of course.
If you operate as a limited company – although there is no specific legal requirement – you are strongly advised to open a separate bank account for the company.
Don't mix private and business expenditure. Your bookkeeping will be quicker and easier if you only put business transactions through your business account.
You will need to take money out for yourself – drawings for a sole trader or partnership; normally salary, dividends and expenses for a limited company – but once a month should be enough.
Paying private costs out of the business can create serious tax problems for a limited company, but even for a sole trader/partnership, you’ll only have to pay your bookkeeper or accountant to work their way through your private transactions. And – you may not want them to see how much you spend or what you buy.
Don't be tempted to pay for non-business things out of the business just because that is where the money is and it is convenient.
If you pay business expenses personally you are, of course, entitled to reclaim them back from the business. Try to avoid this as much as possible by using a debit card on your business account or using a petty cash tin so all payments are made directly.
Where it is unavoidable – and this will particularly apply to limited companies claiming mileage in lieu of motor expenses – take the same approach as if you were claiming expenses from an employer.
Detail the claim on a sheet of paper; don't forget to attach supporting receipts (and the mileage log if relevant); and file it in the purchase invoice file in the month in which it is paid.
Finally, try to do it at least once every month so you don't forget any costs or lose receipts and so miss out on claiming a legitimate expense against tax.
It is often easier to use a debit card linked to your business account because you should not be using a credit card as a source of finance. If you are using a credit card for business expenses, try and use it exclusively for the business (don't put private expenditure on it) and pay it off in full at the end of every month.
You will need to analyse the amounts spent on the credit card across the business expense items (eg VAT, travel, motor expenses, etc), because credit card transactions will often fall into different categories.
Sometimes credit card companies will summarise expenditure into different categories, but this is not usually very helpful as their analysis is not the same as the one suitable for the business.
This often causes confusion, but you can simply look at it as your private expenditure and make an expense claim for the business part in the way described above. If you run your own business as a limited company this may be the best way, because paying private costs from the company can cause tax problems.
You will need to have a sensible method of assessing how much the “business part” is. A common example is the cost of running your business from home. You will need to calculate how much your house costs in total and then make a reasonable estimate of the proportion of property used for the business and apply that proportion to the total costs.
It is important to realise that this is just a method of finding out what the business cost is, and if necessary being able to explain why it is 10 per cent or 20 per cent of the total rather than, say 5 per cent.
To be allowable, costs must be incurred for the “sole purpose of the business”. You cannot claim for personal expenses (eg suits or general clothing). Obviously, you can claim for the cost of the goods you have acquired to make your sales. For example, taxi drivers, minicab drivers, etc and those in the road haulage industry should enter fuel costs in this box rather than elsewhere unless they are claiming mileage rate; hairdressers should enter shampoo and hair product costs here.
At the end of the year you will need to make an adjustment for the stock you have left. So the value for cost of sales will be: the value of opening stock brought forward from last year, plus purchases made during the year; less value of closing stock at the end of the year.
Other direct costs might include: discounts; commissions; carriage; and research costs. For permanent, temporary and casual employees you should include: salaries/wages; bonuses; pension contributions; benefits; employer's NICs (National Insurance contributions); canteen expenses; any recruitment agency fees; any subcontract labour costs.
Allowable premises costs include rent; business rates; water rates; light; heat, power; property insurance; security; use of home as office; as well as repairs and renewals and general maintenance of premises and maintenance of machinery.
You can also claim for general admin expenses, such as telephone; broadband; postage/courier; stationery; printing costs; professional journals and subscriptions; insurance (eg public liability, etc). Travel and subsistence costs are also allowable, including vehicle insurance; servicing; repairs; vehicle licence; fuel (or mileage claimed at approved rates); rail/air tickets; taxi fares; hotel accommodation; subsistence/similar costs.
Advertising, marketing and promotional costs can be classed as expenses, as can fees you pay to an accountant, solicitor, surveyor, architect, stock taker, etc. You can also claim back interest and alternative finance payments on bank and other loans (including overdrafts) and alternative finance arrangements, as well as bank/credit card charges and interest charges on hire purchase agreements.
It’s been a fabulous second year for the Donut. We’ve been steadily building things and now, each month, tens of thousands of UK businesses visit our websites for advice, free resources and offers. So what have been our other key achievements?
In August, following 12 months’ development, we launched the IT Donut, which has since become a popular destination for small firms in need of advice on a range of hardware and software issues. We were delighted to welcome Microsoft and Sage onboard as founding sponsors (a big thank you to all our other sponsors, while we’re at it). Amazingly, the IT Donut blog beat off stiff opposition to be named Computer Weekly’s small company IT blog of the year – a superb achievement by any standards.
Crucially, we’ve created almost 100 syndicated versions of Donut websites for Enterprise Agencies, Chambers of Commerce and law firms across the UK. We’re extremely proud of this fact. We welcome the involvement of all of our syndicator partners and look forward to welcoming many more next year.
Our Donut writers and editors have been very busy. This year they’ve produced more than 400 stories on a range of issues that matter to small firms new and more established.
We’ve also produced 12 editions of our information and offer-packed e-newsletter MyDonut, which is distributed to tens of thousands of registered site users each month. We’ve got big plans to make MyDonut even better in 2011, so sign up if you haven’t already (don’t worry, there’s no charge), and keep an eye on your inbox…
None of the Donut sites would be possible without the involvement of our small business experts – a network that has grown to almost 250 leading professionals across our four Donut sites.
We’ve also built our combined Donut Twitter following to almost 24,000 followers – 5,250 on the Start Up Donut Twitter page alone.
We’re proud of our successes this year, but it wouldn’t have been possible without the enthusiastic support of you, the reader. We truly appreciate your input on our forums and the kind comments and messages of support you’ve sent us throughout the year.
What does 2011 hold? Well, you can expect fresh Donuts - and an even stronger local flavour. And, of course, we’ll continue to champion the cause of small-business owners. Watch this space.
Have a great Christmas and New Year. We’ll be back on 4 January. All the very best…