In my experience of working with MDs of their own companies over the last 14 years it doesn’t take very long before they start talking about why they set up their business, what is important to them in running the business and keeping it solvent/profitable, the differences that exist between them and other Directors and shareholders or conversations that start about a manager who just doesn’t get it. There are many insightful stories and anecdotes. Passions and frustrations run high in equal measure. So in a very conversational way, the values of the MD become very clear i.e. what really matters to them. With a bit of gentle probing, it doesn’t take a lot to get an MD to define the behaviours that enable success in their business. ‘If only people did this, we would be even more productive.’ When the MD set up the business, working with a small team, direction, focus, consistent behaviour was all a lot easier because everyone could see what was happening, everyone was involved in … [Read more...]
4 top tips to successfully secure business growth funding
Very few businesses are lucky enough to be able to bootstrap their way to success, most rely on securing business growth funding. Getting funding at the right time is critical to surviving yet alone thriving and growing. Without funding it is much harder and slower to grow and expand into new territories or markets. Here are my top four tips for successfully securing business growth funding. Know where to look and what type of funding is the best match There are numerous sources of funding from Bank Loans to Crowdfunding and Equity investment to Trade Finance, Grants and R&D Incentives for innovative companies. Often a growing business will need to draw on a mix of sources. Depending on the stage of growth and type of business some will be more suitable than others. Each type comes with its own positive and negative aspects for example if you’re seeking a bank loan, you will probably have to give a personal guarantee and of course pay back the loan with interest. If it’s equity … [Read more...]
Is your brand positioning clear enough?
Do you truly know how your customers perceive your brand? When running a business, it can be all too easy to get caught up in day-to-day operations and to lose sight of what your customer is thinking. Unfortunately, if you’re not actively working to shape and communicate your brand position, the customer will simply make his or her own decision as to what you stand for. If your brand positioning is not clear, your business will suffer from some or all of the following issues. You try to sell to everyone, and end up attracting no one in particular Customers don’t understand the problem you’re solving or the want you are meeting Unique features of your product or service will not be realised or understood Benefits you offer in comparison to other competitors will not stand out Reasons to believe in your brand are not crystal clear As an example, a crack garden landscaping team may do a great job on the ground, but their website and marketing material undersells their particular … [Read more...]
Is your business stuck at a crossroads? Time for a strategic review.
Many businesses reach a stage when they are at a crossroads about the direction to take next or are “stuck” without a clear strategy. It may be a crisis point or it could be an opportunity to take a different path. Directors may no longer be aligned with the planned company direction, and this can cause friction. Rather than putting off hard decisions, it makes sense to face up to the challenges and opportunities, have a strategy review and then put an implementation plan in place. Reasons for a strategic crossroads could include: Change in market dynamics that impact growth or profit potential.Increased competition forcing new approaches.Loss of important customers or contracts.New product or service opportunities possibly requiring research and development.Recognition that the business is too reliant on a small number of key customers.Macroeconomic/political changes such as Brexit.Divergence of what Directors want from the business.Planning for exit / opportunities to … [Read more...]
How to pick the best candidate for your Technology business C-Suite
With the current skills shortage in the technology sector and ever-increasing demand it is simply not enough to broadcast a role when you are recruiting for your leadership team. Placing an advertisement or hoping a quality candidate will alight upon your website will rarely succeed. You deserve and require the very best of candidates. Invariably, finding great people requires a more proactive approach. The best candidates are not looking for your role The best of candidates, or targets, are probably fully committed to working for a competitor, supplier, customer or possibly currently working overseas and not actively looking for another role. Alternatively, they may be restricted via a compromise agreement, garden leave or clause in their current contract – all of which can be the subject of further negotiation and equitable determination. A discreet approach A thorough, comprehensive, discreet and confidential first approach to the targets is required for a … [Read more...]
Case Study – Part-time Financial Director helps growing business to meet the audit threshold with confidence
Background Following a period of rapid growth, the business had outgrown its finance systems, processes and controls. The business was approaching the audit threshold and quarterly corporation tax payments, so cash control and forecasting needed to be reviewed much more frequently. The MD required more experienced commercial and financial support to help drive growth and assess future options while ensuring that customer focus remained at the heart of the business. Searching for a solution Following an introduction from a strategy consultant who had already been working with the company, we met with the MD so that they could outline their need and discuss how a senior Finance Director would restore confidence, professionalise the finance function and contribute to commercial issues and challenges with regard to growth. Fundamentally, the Finance Director needed to introduce: insightful management reporting and analysis of performance to enable the MD to make … [Read more...]
Beyond technology – what other sectors are benefiting from R&D tax relief or credit?
Your annual accounts are ready to be prepared but could you find ways to reduce your tax bill or get a cash payment to support your new product development? Well it might be that you can if you are undertaking development activities that qualify as Research and Development (R&D). It’s not just for rocket scientists or research laboratories. In fact far from it, all sorts of development activities qualify – a few are described below and we’ve also added a more comprehensive list at the end. The great thing about UK R&D tax incentives is that they apply to any UK registered limited company in any sector – The Dyson Report on Innovation 2010 made this point saying: “Of the various tax instruments available to government, R&D Tax Credits have the advantage that they seek to help companies that are themselves prepared to invest in R&D. Government does not need to choose sectors or companies, with the result that R&D can be encouraged in the widest … [Read more...]
Essential steps when acquiring a new business 3
Part 3 - What do you need to watch out for? Back in March I looked at your strategic reasons for buying a business and in April I gave pointers on searching for a new business to acquire. This month, in the final part of our series, I will highlight some key areas that you need to consider before you make your final purchase. Follow these recommendations and you could avoid a variety of unnecessary pitfalls. The main areas to consider are: proper strategic thinking for an acquisition – be clear about your ‘why’, ‘what’, ‘who’, ‘where’ and ‘when’ and the distinctive benefits you hope to establish from an acquisitionpreparation - sufficient and well thought-through preparation by the management team making the acquisitionfinances - acquirer must be properly prepared financiallynegotiating price - never pay too much, plan your negotiation strategy in advancesupport - use experienced and practical professional advisorsresources - ensure that you have … [Read more...]
Essential steps when acquiring a new business 1
Part 1 - What is your strategic reasoning for acquiring a business? Why you want to buy a business, where to search and what to look out for. To start with, it helps to be clear about why you are buying. Acquirers can have diverse motivations: a carefully thought out strategyopportunistic e.g. see a competitor of a failing business is up for sale a belief that, by acquiring, you will be able to generate a value significantly greater and faster than the alternative of continuing organic growth. Often, the expected benefits will include one or more from: geographic expansioncustomer basecustomer spread, i.e. for a manufacturer a number of blue-chip customers, such that there is no undue reliance on a small number of customerscontract durationsrepeat business patternsskill-setstechnologyintellectual property rightsdepth and quality of managementuniqueness and competitiveness of products and servicesscalability of products and/or servicesmarket position and brandsystems and … [Read more...]
How to identify and manage risks in your business
When you start a business you need to be aware of the risks you are taking. Government statistics show that 97% of new start-up businesses fail within 3 years. To prevent this from happening to your business you need to understand RISK. By understanding Risk you can apply yourself to the areas of the business which are really important for the survival of the business. Risk Management is a process of analysing what can go wrong with the business and what can be done to alleviate the problem in a cost-effective manner. Entrepreneurs need to be familiar with the likely occurrence of a risk and the consequences of such risks if they happen. Please see the diagram below: Quadrant 1 risks have the least impact and the least consequences to the business, whereas Quadrant 4 risks have the most damaging consequences and the highest likelihood of occurring. Therefore all risks need to be mitigated if the business is to be successful. Let’s discuss the four … [Read more...]
Getting Brexit Proof: Tips for researching new Markets for 2019
Concerns about how Brexit might impact export expansion plans are completely understandable, but it should not hold you back. You just need to get serious about how you research and plan your export strategy. That strategy should form an integral part of an up-to-date business plan, which must include your business objectives for the next 2 to 3 years. I always find setting a target is good place to start, as without it you have no objective measure of whether you have succeeded or not. Once you have a clear goal you can then work through the steps of what needs to be done. A revisit of the business plan should include an updated assessment of risks, as well as the opportunities, ensuring the business is as resilient to external shocks or changes as it can be. So while the final shape and terms of the Brexit deal are still unknown, your business will be significantly better prepared for whatever transpires if you take the following action. Your Strategy A strategic analysis … [Read more...]
Top Tips for Foreign Nationals Setting Up Business in the UK
In December 2018 Forbes Magazine placed the UK as number 1 in its list of Best Countries for Business. There is no doubt that the UK offers tremendous opportunities for businesses to be set up and to thrive. However the fact that this is so well recognised means that it is also probably the most competitive country on earth for businesses. You need to make sure that all aspects of your UK operation are run to the highest professional standards in order to succeed. The aim of this article is to give you some tips as to how to setup a company in the UK. Visa. If you do not already have the right to live and run a business here you will need a Tier 1 Entrepreneur Visa. For this you will need to invest a minimum of £200,000 in your new business and employ yourself and take on at least two members of staff in the first two years. Business Idea. You need to start with an idea of what product or service you want to sell. The first step is to think who … [Read more...]
Top tips for giving an Xmas Bonus to your team
It's that time of year, when Managing Directors are considering (or agonising over) whether to give a Xmas bonus. My start point would be to ask why you are considering a Xmas bonus. (If you are agonising over it then this suggests it is a marginal decision and you may be better off not bothering for the likely impact it is going to make) There are probably two reasons for considering a Xmas bonus As a form of recognition, a thank you for your efforts in 2018 As a retention tactic for 2019 in the face of a tight recruitment market There are 4 options available: A token gift (such as a bottle of wine) This can be tax free if all the following criteria apply: It costs less than £50 to provide and isn’t cash or a cash voucher It isn’t a reward for work or performance It isn’t in the terms of the employment contract The impact here is more on how it is done rather than the gift itself. One Senior Partner used to dress … [Read more...]
Why appoint a Virtual Non-Executive Director or Strategic Advisor?
If you run a business that has strategic challenges to address, or if you are looking to raise it to the next level, where can you turn for advice? The answer may be appointing a Non-Executive Director or Strategic Advisor. Even very successful businesses can benefit from an external independent view to help make better strategic choices and challenge established thinking. What can a Virtual Non-Executive Director do for your business? Every business has a different mix of challenges and opportunities at a given point in time and often the owners or management feel their business is unique and difficult for an “outsider” to understand. To an extent that may be true, however, a VNED’s experience of the dynamics of multiple businesses and transferable knowledge of best practice from other markets is proven to bring significant benefits to management decision making. Our Home Counties and London Group Business Advisors have developed a Virtual Non-Executive … [Read more...]
Budget 2018 – At a glance
Business Small retail businesses in England will see business rates reduced by a third. The annual investment allowance is to rise five-fold from £200,000 to £1 million for two years. Reforms to individuals working under IR35 are to be extended to the private sector by April 2020. Corporation Tax to remain at 19%. Personal The personal allowance is to rise to £12,500, higher-rate threshold up to £50,000. A 4.9% increase will set the national living wage at £8.21 an hour for over-25s. Stamp duty abolished for all first-time buyers of shared-ownership homes worth up to £500,000. Duties Fuel duty unchanged at 57.95p per litre of petrol, diesel, bio-diesel or bio-ethanol. Duties on beer, most ciders, and spirits remain unchanged for 2019/20. Cost of a bottle of wine duty to rise by 8p, in line with inflation, in February 2019. VAT The VAT-registration threshold is to stay at £85,000 until April 2022. The Government will revisit options … [Read more...]
Business Start Up – Getting it RIGHT First Time
Starting a business is not easy. Getting everything set up correctly can make the operation of your business run smoothly, especially when you need to be working on or in the business to make sure it survives. Last year 660,000 companies were established in the UK, which is up from 608,000 in 2015. That doesn’t include sole traders. But 97% of business startups fail in the first three years. So when you are firefighting to survive, if you have tackled the issues in the diagram below you will have a better chance of surviving because these issues have been tackled. The more of the issues you deal with before you start running your business the easier it will be to operate. The FIRST thing to do is a skills audit on yourself. Do you have the skills necessary to run a business? Which skills do you have and which ones should you learn and what can you delegate? What are the functions of a business and … [Read more...]
5 essential ways to scale a creative services business
Growth is often cited as one of the most important targets for a business to achieve. At its simplest level in the creative sector, it can come from adding team members to meet increased demand. However, growth without improved scale can also result in a greater level of frustrations for an entrepreneur. So how can a creative services business find smart ways to scale when a large portion of the cost is allocated to the delivery team’s efforts? And what are the first steps if you want to move your business from simply growing to scaling exponentially. Clearly Define Your Business Activities Too often in creative service businesses, the principles and teams will want to steer clear of defining and systemising their strategies and tactical approaches. It feels like it runs counter to the flow of creativity and can be seen as a way of cramping ideas and new thinking. However, if everyone has a different interpretation as to how things are done in the … [Read more...]
Cash for creativity aka R&D tax credit – have you left money on the table?
If you have a moment to spare before the Autumn springs us back into work mode, use it to check whether you could claw back a slice of your corporation tax as R&D tax credit. And please before you say, “that’s not relevant to me”, read on as too many people take that view in error. R&D tax credit is not only for the techies or pharma companies and research labs of this world; it applies to a very wide range of business sectors. In fact no sector is automatically ruled out. Of course there are some sectors where companies are more likely to be undertaking qualifying development activities. A large share of the government’s R&D subsidy goes to companies in the manufacturing industries, such a food processors, drinks makers/brewers, precision engineers, electronic circuit board makers, chemical, plastic and packaging makers and companies that are developing new gadgets and widgets. It’s also quite common for agrarian, farming, construction and engineering … [Read more...]
How can Design Thinking accelerate your business growth?
If you are a fan of design, I’m sure you’ll be looking forward to London Design Week, which is taking place across the city later in September. Our capital now seems to be crammed with creative companies and has developed an international reputation as an innovative hub in technology, food and fashion. However, not every business is graced with an in-house team of highly-charged creatives. When that’s the case, is there something we can take from seasoned design professionals that could invest some of that creative juice and energy into even the most basic product or service? With this in mind, let me introduce you to the concept of Design Thinking. This is a process that I’ve learnt from the Design and Technology industries that I believe can benefit every commercial enterprise regardless of its size or sector. So what do I mean by Design Thinking? In a nutshell, Design Thinking takes processes that designers and artists typically use to develop and … [Read more...]
To Register for VAT or Not, that is the question
What is Value Added Tax? Value Added Tax was introduced to the UK in 1972 to replace Purchase tax and to conform to the European Common Market. The Definition of VAT is a tax on the amount by which the value of an article has been increased at each stage of its production or distribution. For most businesses in the UK, VAT is added at 20%. However some things are exempt from VAT , eg most food goods, children’s clothes, postage stamps, financial and property transactions, printed books, magazines and newspapers. Some items are also charged at a reduced VAT rate of 5% e.g. energy and children’s car seats. When you are starting a new business when should you register for VAT? Reasons you should register immediately for VAT? Your new business is selling to other businesses. They will also be registered and will claim the VAT back as Input tax which reduces the amount they pay to HMRC. Your business is investing in capital items, … [Read more...]
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