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 … [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...]
Setting up business in the UK for non EU citizens – Essentials Check List
The summer is a time when visitors come from all over the world to watch our famous sports events including Wimbledon, test cricket at The Oval and the UK Grand Prix at Silverstone. To the side of these visits, many are also researching the UK as a destination for their new business. The UK is now one of the easiest countries in the world to do business in but there are a number of essentials you must have in place before you can start trading if you are a non EU citizen. Visa You will need a Tier 1 Entrepreneur Visa, or a Tier 1 Investor Visa. For the Entrepreneur Visa you will need to invest a minimum of £200,000 in your new business and employ yourself and at least two members of staff. For the Entrepreneur Visa you need to be prepared to invest at least £2m in the business. 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 might buy your product and why. You need a USP (Unique Selling … [Read more...]
Five ways to improve your business productivity
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, … [Read more...]
The Value of MEASUREMENT
Knowing what to measure and how to measure it can make running your business easier. To make better decisions you need to gather the relevant data and format it into a report showing the essential information. Your decision makers can then be taught how to use that report to make sensible decisions or to recognise that they need additional information or instructions from you. For Measuring your Cash Flow you need to know: Who your debtors are, how much they owe you and when they are likely to pay. Who your creditors are, how much you owe them and when you need to pay them. What your regular outgoings are (rents, rates, salaries etc). Only when you have gathered the data can you then make a reasonably accurate Cash Flow Forecast. This will enable you to make decisions about who to chase for cash and who to pay in order to manage the cash in your business. When making a decision on buying a piece of Capital Equipment you … [Read more...]
Why do earn out clauses often create conflict or end up in court?
How do you value your business when you're selling it? In recent years there seems to be more significant differences in expectation of valuation between buyer and seller, and increasingly the Earn-out clause has been used as an appropriate way to bridge this gap. The clause basically retains interest and motivation for the seller by holding back a portion of the sale price until certain performance criteria are met, and minimises risk to the buyer of overpaying for a business that doesn’t perform as well as its previous owners say it will. If it is planned and executed well then the buyer can gain more than originally envisaged, but it is full of risk for the selling entrepreneur and conflicts are almost inevitable. So what’s the problem? You might base the sale price of the business on an assumed level of financial performance over the next 24 months, but the seller is cautious and insists on part of the value being deferred and wrapped … [Read more...]
How to Stretch for Success – Business Lessons from our 3 x Ben Nevis Bike Challenge
Some businesses move from year to year making small adjustments but never stretch themselves for the big achievements. Other more ambitious businesses, and their leaders, try to find a way to achieve leaps forward that at first sight look too hard or possibly foolhardy. Some succeed and others fail. Without setting ambitious goals, taking calculated risks, implementing careful strategic planning and proactive problem solving along the way, the big leaps are rarely made. I would like to draw an analogy with a group of middle aged mountain bikers that I ride with most weekends, typically covering 12-15 miles on local technical trails. There was a collective desire for a more challenging project to stretch us. Various options for a suitable longer trek were discussed at “team meetings” - aka post-ride drinks at the pub. This compares with business strategy meetings where ideas are floated, discussed, filtered, and prioritised. In January 2018 the … [Read more...]
Fundraising success stories for early stage companies
We looked at London based companies that have recently successfully raised seed funding! The good news is that there is a constant flow of funding into very young companies - albeit with a technology bias. Companies with innovative ideas, strong management teams and good business plans position themselves for better funding success. We wanted to get a flavour of what's happening in the world of funding for seed level companies that are based in London. We found five recent funding success stories - we have summarised what they got, what they do and how long they have been going. Labrador (internet of things) We’d all like to sure we are getting the cheapest energy bill on the market, but even with the help of price comparison sites it can be a chore working out which supplier to go with and then sorting all the paperwork to change supplier. Labrador aims to solve this problem by paring with your smart meter and analysing your energy consumption … [Read more...]
Brexit – Let’s face it!
With Brexit dominating headlines, the importance of having the best leadership team, who will be able to derive and implement strategy to steer a company or organisation through change and uncertainty is of paramount importance. Deal or no deal will have a significant impact on our entire economy which executives and managers will have to address. No deal will certainly not mean no action required, in fact it most certainly will mean the opposite. The outcome may be viewed as providing significant opportunity and or challenge which will impact on all sectors of the economy and all commercial functionality whether it be sales, marketing, engineering, research. manufacturing, logistics, IT, human resources, finance or legal. Uncertainty must be addressed and not be allowed as an excuse for inaction; contingency planning is necessary. We are fortunate in having a fabulous pool of talent, skills and experience in the UK; a significant proportion of which is currently … [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...]
Five crucial ways to improve your business productivity
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. Wages & Productivity 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 means to take better control of your prices and … [Read more...]
Better budgeting in 10 steps
Many entrepreneurs and their management teams don't devote enough time or attention to the process of preparing annual budgets, especially when they operate in rapidly growing or uncertain markets. A financial plan in a private company is at risk of becoming gradually ignored over time, devaluing the operational benefits of measuring performance against budget and the process next time round. With a careful and efficient planning process a business will set a much clearer picture of where it is heading, knowing what to do at each stage to hit and exceed targets, but also how to react when these are missed. With the benefit of our collective experience of managing hundreds of budgets and plans, we have put together some top tips on making your budgets more robust, realistic and valuable. Get everyone involved - It is a common place misconception that your finance team puts a budget together. A business plan and its budget should be produced by the collective … [Read more...]
How To Set – and Keep – Your New Year’s Business Resolutions
Make twelve New Year resolutions for business, one for each month! By breaking them down into workable pieces, you’ll actually get them done. Our local Bollywood-style keep-fit class in my local area is led by Nikita, an instructor who has inspired me on more than one occasion. At our recent pre-Christmas dinner celebration, she surprised me with her response when I asked if she had made a New Year Resolution by answering ‘Actually I’ve made twelve!’ It turns out that in 2017, she implemented a different resolution every month. I found myself hanging on to her every word, relishing her answers, and inspired to the core at this extraordinary young woman. As I listened, I got excited thinking about the projects I had let slip and was yearning to get back to. She told me that by having a new resolution each month, it ensured that they actually happened. They didn’t feel onerous. Better yet, she nipped procrastination in the metaphorical bud. She … [Read more...]
GDPR Check List – Your 8 Step Plan For The New Legislation
You need to start your preparations for GDPR (General Data Protection Regulation) as the implementation date of 25th May 2018 is fast approaching. For most businesses and IT managers, preparation has not yet started despite the deadline being less than 6 months away. Ignorance of the Legislation will be no excuse and with the severe penalties planned, some businesses could be made bankrupt if they fail to comply. How would you deal with a fine of 4% of turnover? Please use this checklist to start you on the road to compliance. These are the key areas you should address. As you get into the detail of your own GDPR review, you will also uncover data considerations, which are particular to your own industry and business type. 1 Raise Awareness In Your Business GDPR will probably require you to make changes to the way you collect, store, use and process data. In particular data held on individuals. The new regulations extend the provisions in the Data … [Read more...]
Is your business ready for new GDPR legislation on Data Protection?
This article outlines the key themes of the new General Data Protection Regulation (GDPR) to help businesses understand their corporate responsibilities and the challenges of this new legal framework. Key facts about GDPR A data protection regulation to protect the data businesses hold on individuals. It is legislation with large fines for non-compliance It makes organisations much more accountable for the data they hold. Applies equally in all EU member states and to those offering goods or services to individuals within the EU Stricter stipulations apply to firms with over 250 employees Also applies to SMEs with under 250 employees when data processing carried out is likely to result in risk to the rights and freedoms of data subjects, the processing is not occasional or the processing includes special categories of data as defined in GPDR Article 9 It will be enforced across Europe from 25th May 2018 Overview of … [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...]
Don’t Wait For Brexit Clarity – Get Exporting
Almost every business will be impacted by Brexit – positively or negatively. We can only make educated assumptions about what Brexit will look like and indeed when any transition arrangements may end. With a potential 2-year transition agreement, Brexit would happen in March 2021. Fortune favours the bold and businesses that can benefit from exporting should review their business strategy to achieve their maximum potential. If you don’t your competitors probably will. The good news is that there is a huge range of support available for businesses who want to start exporting or want to expand their exporting. When helping businesses review their strategy, I often ask if they export. The first answer is often no, followed by a, well we have sold this to here and that to there. They have become accidental exporters. If your business has recognised expertise or a niche specialisation then you will often be found globally via your web site even if … [Read more...]
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