Experts Blog
Budget 2014 small business coverage on the Donuts
March 12, 2014
(Updated on Budget Day, 19 March)
The Chancellor of the Exchequer, George Osborne, announced the 2014 Budget on 19 March 2014.
Throughout the day, Start Up Donut covered the key points from Budget 2014 affecting small businesses:
- Tweeting about the Budget announcements from the @StartUpDonut and @TaxDonut Twitter accounts.
- Posting blogs written by small business experts.
- Posting our Budget 2014 summary for small businesses, and in our news section, gauging reaction from small firms and their representatives.
Let us know your thoughts about the UK Budget 2014.
Budget 2014 announcements and response
- 2014 Budget round up
- Did the Chancellor deliver on expectations?
- So where did small businesses figure in Mr Osborne's thinking?
- A Budget for makers, doers and savers
- Budget 2014: Twitter has its say
- The business verdict on a "steady" Budget 2014
- Budget support for UK exporters welcomed
- Budget 2014: small business winners and losers
What you told us you wanted from the budget
Five ways to ensure employee happiness
March 11, 2014
Happy employees are usually productive employees. If they believe they’re valued and an integral part of your business, employees will be more inclined to work harder because they will feel they have a personal investment in their role. Inspired by The Happiness Project by author Gretchen Rubin, here are five ways to try to ensure your people remain happy and well motivated…
1 Give employees more control
Rubin says happiness is affected by a sense of control, so where practical try to give your employees a choice over what they do and when. Some businesses have flexible project management roles that are adopted by different employees or teams on a project-by-project basis. On a simpler level, giving your employees control over what they wear and how they decorate their workspace can also inspire happiness. Employees who feel their individuality is crushed by their job may soon leave.
2 Don’t waste time
Tight deadlines cause stress, yet they’re necessary for successful businesses. What is unnecessary, however, are long meetings where nothing gets decided. Cut meeting times in half by having specific topics decided beforehand, a time limit that is rigidly stuck to, and clear and concise actions so that everyone leaves knowing exactly what they have to do and for when. Keep all employees in the loop about important matters so that every team member knows exactly what stage of the project they are on. Set realistic targets and stick to them.
3 Give rewards and celebrate successes
Take some chocolates into an arduous meeting; remember employee’s birthdays; organise office trips or team building activities. Even little rewards can achieve big results. Such small gestures contribute to an overall sense of value. Hosting a surprise office party in the middle of the day can be a great way to break up the working routine and re-energise your employees. Don’t see such activities as a waste of time, they’re important for employee happiness and productivity.
4 Encourage a feeling of community
Make your business more than just a place to work. By inspiring a feeling of community, your employees are more likely to work together, help each other and look forward to coming to work. This can also spread to your local community – get involved in charity fundraisers, sponsor events and take part in team races and other activities. This will not only get you noticed, but also make your employees feel proud of where they work.
5 Promote health and happiness
Invest in decent chairs and educate your employees about exercises and stretches to relieve tension and retain energy. Make use of the other businesses nearby; perhaps speak to a local gym or exercise class to get discounted deals for your employees. Educate them on the importance of healthy living (but practise what you preach).
If your employees are miserable, they’re likely to convey this to others and it will also be reflected in their attitude, which will affect their performance. If you employ people, place their satisfaction at the top of your priorities. Make them feel valued and that they have a stake in the future of your business. Then you can work together to make your business a success.
Blog supplied by Sophie Turton of Crunch Accounting.
Further reading
Why has enterprise education been so successful in Wales?
March 10, 2014
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.
Could taking on an apprentice give your business a £2k boost?
March 06, 2014
According to the AAT (“the UK’s leading qualification and membership body for accounting and finance staff”), your business could be missing out if it doesn’t currently employ an apprentice.
The organisation reckons that every time a business takes on an apprentice, “its bottom line gets a boost of more than £2,000”, while lack of awareness of available government support is a key reason why more small and medium-sized businesses aren’t employing apprentices, who, it estimates, “delivered £1.8bn of net economic benefits to UK organisations in 2012/13”.
The claims are based on a research report called The Value of Apprentices, compiled by the Centre for Economics and Business Research (Cebr). It found that apprentices offer UK firms “a significant return on their investment”, with economic output usually far exceeding associated wage and training costs. Even after wages and training is accounted for, every time a business takes on an apprentice, on average, they gain by £2,000, according to the AAT.
But the research also found that awareness among businesses (particularly small firms) of government support for those who take on apprentices was poor. About 60% of small businesses surveyed by The Department for Business, Innovation and Skills in August 2013 lacked basic knowledge of the “government’s programme of support for businesses that take on apprentices”. For example, businesses with fewer than 1,000 employees that haven’t hired an apprentice in the past 12 months and take on one apprentice (aged 16 to 24) could receive a grant of £1,500 per apprentice from the National Apprenticeship Service.
Jane Scott Paul, AAT Chief Executive, comments: “Take-up of apprenticeship schemes has grown sharply over the past five years, as more and more organisations enjoy the benefits that apprentices can bring to the workplace. This is benefitting their businesses and bolstering economic recovery and growth.
“We now need to do more to engage with smaller businesses – to break down the misconceptions and make it easier for smaller enterprises to unlock the full potential of training apprentices and to gain specific skills relevant to their business.
“Our research clearly reveals that apprentices, far from being a cost to business, are often a tangible benefit and, what’s more, they’re flourishing in non-traditional sectors such as business, administration and law. By quantifying the value of apprenticeships in this way we hope to encourage all sectors of business to open up their recruitment policies and address the skill shortage.”
With it being National Apprenticeship Week this week, maybe it’s time you found out more about the business benefits of taking on an apprentice?
Further reading
Lessons we learned by appearing on Dragons’ Den
March 06, 2014
When running a business there are two key things you must always try to do. Firstly, you always need to be improving. Secondly, you should always be trying to test yourself.
We knew our business, TreatmentSaver, was going well, because our customer base was growing in line with our revenue. It took us a number of attempts to find the best business model, but we knew right away that online appointment booking was a winner for both clinics and our site visitors. Clinics benefited from acquiring new customers and our visitors got to save money on treatments such as laser eye surgery and Botox. From this point onwards, it has always just been a case of trying to scale up the business.
We figured we needed both investment and exposure, so going on Dragons’ Den was potentially an opportunity to kill two birds with one stone. As well as this, we saw it as a great way to test ourselves and take us out of our comfort zone.
Initially we applied to appear on Dragons’ Den more than a year ago and having gone through a number of online and phone interviews we had to do an audition. This basically involved going to the BBC studios in Manchester and doing a mock pitch and interview in front of a BBC producer.
Everything went well and we were consequently chosen to appear on the actual show. After a few months of due diligence by the BBC (basically to check we were who we said we were), we were invited to film for real.
The whole day was surreal – it was certainly the first time I’d ever worn makeup. Once we were ready, having met the producer, etc, we spent about five hours in the green room, basically biting our fingernails until we were summoned in front of the Dragons.
When our time came to meet them, the adrenaline was definitely pumping. By far the worst bit is when the lift doors open for the first time and you see all five of them in front of you. It was a relief to get the pitch done, because for me this was the most nerve-wracking part. From then on it just became a Q&A with the Dragons, with a few curve balls thrown in for good measure.
After a fairly heated battle, unfortunately we did not manage to secure investment, but we gave it our best shot. After the initial disappointment had died down, we started to reflect on what a great experience it had been and how we could bounce back.
Ironically, being turned down was a shot in the arm for our business. It gave us the motivation and determination to prove the Dragons were wrong not to invest in us. Since the show was recorded we’ve doubled the traffic on our site and increased the number of clinics and offers on the site, while saving our customers more than a million pounds when booking online through our website.
But for me it’s some of the less tangible benefits that the whole experience has brought us that are more valuable. It has helped to reinvigorate our business, given us the extra drive to succeed and the confidence to seek out investment elsewhere. We will prove the Dragons wrong!
- Blog supplied by Dr Ganesh Rao of TreatmentSaver. You can read about his first business steps here.
Further reading
Should you trade as a partnership or limited company?
March 03, 2014
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:
Advantages
- 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.
Disadvantages
- 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.
Advantages
- 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.
Disadvantages
- 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
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