You will probably be familiar with the adage: Productivity = Potential – Interference. Many of us are battling daily with interference of one sort or another, both external and internal. Potential is not always something that is easy to quantify, or to realise. Growing a business, finding a market, and bringing in orders takes time and effort, and often a bit of luck. It’s also likely to take some time, so those frustrating interferences are the key focus if you want fast results. Productivity is critical Superficial measures do not always show the bigger picture – if two businesses are paying different wages, you cannot assume that the lower payer makes cheaper goods, without knowing their productivity. Obviously, if the higher-paying business is more productive than the lower payer, their output might still be cheaper. Higher productivity gives you the opportunity to take better control of your prices and margins, allowing you to undercut competitors without undue pain, or … [Read more...]
What is a Terms of Service agreement and why could your business need one?
Terms of Service are exactly that – the terms you agree with a 3rd party who is commissioned to carry out certain services for your business. That 3rd party could be a freelancer, a contractor, a company or an off-shore service supplier. It can also serve as the terms you agree with a client who has instructed you to render services. Unless Terms of Service are agreed and the document is signed, you don’t have a legally enforceable document. Both parties need to agree to the terms set out. The terms can be set out by you or the person doing the work, or both. The document becomes legally binding if the agreement has been signed and dated by both parties. Hopefully, without confusing the issue too much, certain terms of service may not require a signature by both parties – a simple ‘yes’ on an email may suffice. You need the advice of a commercial lawyer that will help you decide if the agreement will require signatures. Planning Terms of Service Firstly you need to … [Read more...]
LGBA Marketing Advisor, Susanne Currid, Appears As Expert Judge On The Apprentice Final 2017
Congratulations to our colleague and marketing advisor Susanne Currid who recently participated as an expert judge on the final of The Apprentice on BBC1. Susanne told us, “Back in June, I had a very unexpected email. A TV producer had got in touch and asked me if I would be available to act as an expert judge on a show they were recording. Little did I realise at the time that she was talking about BBC1’s The Apprentice. A week later, I found myself sitting at a table in City Hall with leading business directors, expert advisors, Lady Karren Brady, Claude Littner and Lord Alan Sugar. To say the situation felt surreal is a bit of an understatement. However, I was also very excited and honoured to take part in such an iconic TV moment. I was delighted to take part and to have a chance to quiz the candidates on their pitch during the recording session. Well done to James White and Sarah Lynn on their surprise double win. They were both credible … [Read more...]
Essential ‘Must-Haves’ in a Business Relationship Contract
When embarking on an entrepreneurial venture with anyone, including people you trust (i.e. family and friends), be assured that there are always risks involved. To protect your interests for the future, it’s advisable to make your business relationship official by way of a commercial contract. Commercial contracts provide a practical framework which enables you to focus on your business needs and consider the associated risks. Once in place, they will provide your business with a greater level of protection from future potential issues. You need to be savvy in business and if you’re inexperienced about contracts, it makes good sense to take advice from those with skills and knowledge in this area, particularly in the legal field. Consider this – if you agree to go into business with your father, will you both view it as a continuation of your father/son comfort zone relationship, or will you view it as a new scenario? Many do not separate the friendship or family … [Read more...]
Book a free online 30 minute Business Advisory Session
Have you got a business opportunity or challenge that you’d like some impartial, expert feedback on? Improving your sales? Looking for investment? Improving your team’s performance? Getting better results from your marketing? Expanding your team? Considering a sale, merger or acquisition? Or do you want to review your business strategy Then why not book a free 30 minute Business Advisory Session with one of our expert business advisors. These informal sessions are designed to help you gain new insights to support your next steps. This month’s sessions will be available from 2pm to 5pm on Friday 23rd June and will be delivered on Skype. The number of available slots are limited so early booking is recommended. Please note, each session is a maximum of 30 minutes. To book your free advisory session on the 23rd June please email susanne.currid@lgba.co.uk with your name, business name and a short introduction to the business … [Read more...]
What Are The Essential Elements Of A Good Funding Business Plan?
It is generally accepted that a business plan is essential for business owners who are seeking to raise money to help fund their businesses. However, a business plan written by the management team can easily fall into the trap of being inward focussed, i.e. centred around the management benefits of planning. To secure finance, you will need to have a business plan, which is specifically targeted to meet the individual requirements of your finance providers or your investors, and not your management team. How does a Funding Business Plan help? Whether debt or equity, a potential backer wants to see why you need finance, how you plan to use it, and what evidence you can provide to back up any claims. It helps convince lenders and investors, that the business owner has thought the strategy through. It also gives any actual investors a set of financial benchmarks for which the business owner and the management team can be held accountable. What should be … [Read more...]
Making Tax Digital
This is the new initiative by HMRC for which the consultation document has come out. Consultation will close 7th November with draft legislation in December and the start of implementation in 2017 with full implementation as from 5 April 2018 with all taxpayers on stream by 1st January 2019. It will apply to all taxpayers both business and SA taxpayers. For businesses it will be a major change to the way they relate and report to HMRC. In this article we will only address Make Tax Digital (MTD) as it is applicable to businesses. The MTD for businesses will apply to all businesses with a turnover greater than £10,000 p.a. Submissions to HMRC must be made quarterly with a 5th adjusting submission 9 months after the financial year-end. Submissions must use commercial software. The free HMRC software has been withdrawn. Micro businesses used to keeping their records on spreadsheets which are submitted to their accountants once a year will now be … [Read more...]
Top Preparation Tips When Raising Finance For Your Company
Now that the economy is on the mend and confidence is rising, management teams are beginning to look at new capital expenditure and therefore ways of raising the required funding. The first thing to understand is not to rush into anything and to make careful preparations before applying for any type of funding at all. Complete a credit check on your own company; find out what the funding providers will see about your company. Make certain that any County Court Judgements, if any, are satisfied before you apply. Check that any debentures that other funders may hold are still applicable and if not have these removed. It is shocking how many funding providers and managing directors, fail to remove expired all asset debentures from the records. Also make certain that you are up to date with filing your latest set of accounts. It really does not matter what type of funding you require, most providers will want the same information from you, have it prepared in … [Read more...]
A view of what’s to come with HMRC’s Digital Tax Accounts for businesses and individuals
HMRC has embarked on a scheme to introduce digital tax accounts for individuals and businesses over the 2015-2016 calendar year with implementation dates in 2017. This scheme is not without its controversy largely around HMRC’s consultation (or lack thereof) and the way it’s been implemented. Digital tax accounts are not unique as a number of other jurisdictions have already introduced them. The digital tax accounts are broad in their implication as they include pre-populating self-assessment returns, quarterly tax reporting by businesses and individuals, tax on-line as well as an anti-money laundering service. Pre-populating the SA return with information known to HMRC will by itself be useful if, and it’s a big if, one can trust HMRC to enter the correct information. If HMRC’s past performance is any guide this may become a problematic area as changing what are known as incorrect figures has yet to be configured. Furthermore, unlike some other … [Read more...]
What you need to know about the new Person of Significant Control Register
With the tax crack down governments in the G20/EU have agreed to have legislation in place for transparency in ownership of companies and LLP trusts. The UK has this now in place and all companies/LLP's must have a register and declare their Persons of Significant Control (PSC) to Companies House by June 2016 (Companies Act 2006 Part 21A). This is in addition to your normal company secretarial records you are obliged to keep. A PSC is defined as a person who has one of the following attributes; Directly or indirectly holds more than 25% of the shares Directly or indirectly holds more than 25% of the voting rights Directly or indirectly holds the right to appoint or remove a majority of the directors Otherwise has the right to exercise or actually exercises significant influence or control Has the right to exercise or actually exercises a significant influence or control over the activities of a trust or a firm which is not a legal entity but … [Read more...]
Taxing Times for Small Business
This year will be the year in which many new taxes are implemented and a number of new consultations will start. Many of these are reasonably well known as announced well in advance of the implementation dates. However, it is now common that the autumn statements also have new tax initiatives which are due for implementation by April. The last autumn statement was typical in this regard. The following are some, but not all, new measures which affect mainly SME’s. Auto-enrolment: Most SME's are due to come on-stream with the pension auto enrolment in 2016. It’s a cost to the company but comes with social benefits. However, it’s admin intensive in the beginning and requires knowledgeable payroll staff. It includes part time staff under certain circumstances and includes domestic employers. One and two man companies can apply for exemptions to the PR by means of an email. Regretfully many SMEs are not aware or have chosen to ignore it, risking high penalties as a result. Company … [Read more...]
A New Lender who even likes start-ups
At the end of last year I had a meeting with an interesting lender. They do short term loans from just 3 months, but unlike most short term lenders they will also do loans of up to 10 years. They like new starts, adverse credit and sole traders. They will lend from £25,000 to £1m. It is quite quick taking around 2-3 weeks to get a loan. The interest rates start at 1.16% per month, which is lower than the usual adverse credit lender. The only stipulation is that the client must be a home owner with enough free equity in their property. The lender is happy to take 2nd, 3rd and even 4th charges against the property. Getting funding for start-ups is very difficult these days and most have to resort to equity Crowdfunding and therefore sell a % of their companies and usually too cheaply. Now there is an alternative, a lender who will happily lend to start-ups that have free equity in their homes. … [Read more...]
The Autumn spending review relating to property
Landlords and Second Home Levy New 3% surcharge on stamp duty for buy-to-let properties and second homes from April 2016, raising about £1bn in England and Wales will have to pay a 3% surcharge on each stamp duty band. George Osborne said the new surcharge would raise extra money. This change, would "choke off" investment in rented properties for the small investors and those who are thinking about investing as a pension plan for the future. This is likely to turn many new and existing landlords away from the sector and reduce the number of homes to rent and almost certainly driving up rents for the millions. Higher rents make it even less likely that those on low or modest incomes will ever be able to raise the deposit required to realise their dream of home ownership, despite new Help to Buy ISAs or capital loans for Londoners that were unveiled in the Autumn spending Review– first-time buyers will still need to find around 5% of the total purchase price as their share of the … [Read more...]
Licence/Maintenance Finance and Construction Stage Payments Finance
There have always been two types of funding requirements that have historically been very difficult, if not impossible to find solutions for. The first was how do you raise finance against the value of signed contracts for products or services that are paid in monthly instalments, such as maintenance agreements, security agreements, subscription agreements, and most importantly Software as a service licence agreements. There is now a new type of finance that solves this problem. The companies that are applying for this type of funding must have a turnover of at least £300,000 and been trading for at least two years. They must have been trading with their client for at least 1 year OR they have sold the same type of service to different clients for at least 2 years. The downside is that their customer must have a turnover of at least £15m if based in the UK or £50m if based abroad. This type of finance will fund up front 80% of the client’s next 12 months worth of regular … [Read more...]
The Fredericks Foundation Business Awards Dinner at Hampton Court
Fredericks Foundation is a charity that provides loans to people who want to set up a new business or maintain or expand an existing business as a route to financial independence. While we are open to anyone who has a viable business proposition but cannot obtain mainstream finance, we focus particularly on the disadvantaged. We provide a range of business support and microloan funding for start-ups and small businesses. In doing so, we enable people who cannot access finance through the usual channels to realise their potential for the benefit of themselves, their families and the Country. We are delighted to announce the Fredericks Business Awards Dinner This is a prestigious event to be held on the evening of Tuesday 6th October. The venue is The Garden Room set in the beautiful Tiltyard Gardens at Hampton Court Palace. The event acknowledges the achievements of the companies that Fredericks Foundation has funded. There will be a drinks reception followed by a superb 3-course … [Read more...]
Financing the Retirement of the MD, or a Major Shareholder in a Family Business
Planning the retirement of the MD or another major shareholder in a family business is often an emotional, complex and time consuming affair. It is normally, but not always in the case of death, a long term project spanning a number of years. The challenges and risks are often more intense in a family business than in a non family one and these have already been discussed in previous blogs in this series. One challenge that has not been discussed is how does the family business plan for this important liquidity event, without seriously damaging the company’s cash flow and profitability? The MD or major shareholder will need to finance his or her retirement and the company needs to carry on trading with the possibility of a major capital withdrawal damaging prospects. The best solution for the business is for the incoming or promoted family member to purchase the shareholding plus potentially a portion of goodwill of the exiting member, with new capital from his/her own outside … [Read more...]
Personal Guarantee Insurance
Are you or your clients worried about the Personal Guarantees that you have given? Then think about PG Insurance. Personal Guarantees are the bane of most business owners’ lives and something that they continually ‘moan’ about. Invariably any form of borrowing above say £5-10,000 from a bank or other financial entity will require further security in the form of a personal guarantee from the business owners and directors. This is on top of any security that they may also take over the assets of your company. As has been seen over the recent past, it doesn’t take a lot for an excellent business to be hit by unforeseen factors that may result in adverse trading and the lender may demand repayment of its money. You may well be faced with a call on the guarantee that you have given. At that point your personal assets are at risk. Personal Guarantee Insurance is there to meet that claim up to the amount for which you are insured. Personal Guarantee Insurance … [Read more...]
Alternative funding for SMEs keeps on growing
As peer-to-peer lending, invoice trading and crowdfunding shift into the mainstream, the alternative finance market is set to double in size next year, with the sector set to reach a value of £4.4 billion The report from charity Nesta and the University of Cambridge said alternative finance to businesses and consumers was set to hit £1.74 billion in 2014, before jumping to £4.4 billion in 2015. The market was only around £666 million last year. A raft of finance providers have sprung up in the wake of the financial crisis when banks cut back on lending to SMEs, forcing them to look for alternative sources of finance. The co-author of the Nesta report, Liam Collins said: “These findings shed light on a growing movement that is revolutionising banking, investing and giving by using technology to simplify the links between those who want to invest money and those who need it. With bank lending to SMEs down again this quarter, it’s no wonder that alternative finance is fast … [Read more...]
Equity Crowdfunding Around the World goes from Strength to Strength
An Organisation called The Crowdfunding Centre takes data from 120,000 crowdfunds across the World The US leads the way in the number of crowdfunds, However, earlier this month, London originated 248 crowdfunds. The city in second place was Los Angeles with 158. London has a 33% success rate compared to 30% across the rest of the UK and around 25% globally. It leads the way in big growth industries like gaming and films, which has fuelled a lot of growth in the US, is increasingly finding a home in the UK. Evidence is also growing of the positive lasting effects of a crowdfunding round. These figures are from a recent report by Crowdfund Capital Partners: - Reward crowdfunders reported an average sales revenue rise of 25% - Equity crowdfunders reported an average sales revenue rise of 350% - An average of 2-3 new employees are taken on after crowdfunding - Just over half of firms that contributed to the report said crowdfunding was their first choice method for raising … [Read more...]
Funding Growth
Now that the economy is firmly on the mend, management teams have a new challenge to think about and that is how do they obtain the funding that they need for the growth that they are now experiencing. It is vital to remember that more companies go to the wall in a recovery than fail in a recession. Over trading is a very real danger. The best place always to go for funding is your own bank. You have a history with them and they should understand your business better than any other funder. Unfortunately over the last 6 months bank lending to businesses has fallen by a staggering £4 Billion. So if your business is growing and your bank is not lending, then who do you turn to? There are many independent sources of finance for growing companies. The independents are much more flexible in their terms and their attitudes and being smaller you are much more important to them. Invoice Discounting and Factoring is one of the easiest to obtain and most flexible ways of raising finance … [Read more...]
