Business Planning: Plan to Succeed!

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Writing a business plan may sound like a long and tedious process that will lead to very few benefits for your business, but in reality the benefits that can be achieved from business planning are huge.

  • Attracting investors – Business plans give investors a look at what a business expects to achieve in the future by using statistics, facts, figures and detailed plans. This gives businesses a better chance of attracting investors to provide capital.
  • Growth – A business plan can be used as a tool to help plan growth and associated costs and capital requirements.
  • Stick to the strategy – During the day to day running of a business it is easy to lose sight of what the main goal is. A business plan can be used to define what the business is or what it intends to be in the future. Clarifying the purpose and direction of your enterprise allows you to understand what needs to be done to meet your objectives.
  • Managing cash flow – Careful management of cash flow is necessary for all businesses. Using a cash flow plan is a brilliant way to link together educated guesses on sales, costs, expenses, assets you need to buy and debts you have to pay.
  • Milestones – A business plan can be used to set milestones that you can work towards. These are key goals that you want to achieve. Having all dates and deadlines visible in one place can make achieving these milestones so much easier.
  • Management – A business plan should include an organisational structure of your business, including titles of directors or officers and their individual duties. It is an ideal place to clarify who is responsible for what. Every important task should have someone in charge of its execution.

A business plan can help to identify potential threats and opportunities your business could face, avoid penalties or other legal problems, helping you to adapt quickly and efficiently to changes.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

 

Top Tips: Organising Networking Events

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Networking events are more or less everywhere, whatever your field or location. Thanks to social media, it’s easier than ever to set up, plan and run a networking event. But what are our top tips for achieving a successful one?

Keep it personal

As your events may start to grow, remember to still try and talk to everyone, thank them for coming, connect with them on social media and say goodbyes.

Keep a familiar format

Familiarity is useful when it comes to networking events; the same structure means regulars know the score, how things run and feel relaxed, and also makes it easy for newcomers to get to grips pretty quickly.

Choose the right venue

Choosing the right venue is the most important part, as it will go some way to dictating the tone, mood and direction of the whole event. Pick a central location that is easy for all to access.

Promote the event

Use social media, blogs, even a newsletter to market your event. Don’t delay, start as early as you can and execute it to the full.

Follow up

It’s really important that you keep the conversation going after a networking event, so keep in touch on social media or through emails. Send out any relevant information from the event too, such as speaker’s talks and contact details.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Changes to the VAT Flat Rate Scheme

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As announced in the Autumn Statement, there are significant changes ahead for companies using the Flat Rate Scheme (FRS) for VAT. The FRS will continue to run, however many businesses will find it is no longer economical to use.

Under the FRS, a business ignores VAT incurred on purchases when reporting VAT, with the exception of capital items costing over £2,000. The business simply multiplies the gross turnover for the period by a percentage set for that particular trade sector, for example accountancy and legal services are 14.5%.

The government believes many have been abusing the system and so is changing the rules to make it less attractive. From 1st April 2017 a ‘low cost trader’ will be required to use the higher percentage of 16.5%.

Will this affect you? A ‘low cost trader’ is a business whose expenditure on goods is less than 2% of its gross turnover, or if more than 2% of its turnover, the amount spent on goods is less than £1,000 per year (Not including capital items, motor expenses or food and drink for consumption by the business).

Green & Co have a dedicated VAT department who can advise on how the changes may affect you, to speak to one of our team, contact us on 01633 871122.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

 

7 Essential Tips for Start-ups

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Starting a business doesn’t come as easy as some people think; there are many things which can try and test you, but if you stick it out and follow these simple tips, you can be sure you are heading in the right direction.

When starting up you need to ask yourself the following questions:

1. Do I have a plan?

Firstly, have a business plan and of course test it out. It’s no good having a business plan, if it doesn’t work! Testing your plan can help you come across any boulders in the road early on to ensure that when going into business, these teething problems have already been sorted. (Check out our top tips for writing a business plan.)

2. What should my business structure be?

There are numerous ways of forming and structuring your business. What best suits your needs? This would be a good time to consult us at Green & Co, and speak to one of our partners to discuss maybe starting a partnership, a sole trade, an LLP or a Limited Company. This is something we specialise in – helping clients choose what is best for them.

3. What shall I call my business?

Choosing a name and coming up with a logo for your company can be a challenging task, but a very important one. The name you choose is not only a name, but a brand, and once you become well established, it is something you want to be happy with and not resenting.  Changing the name down the line can be very costly.

4. How much will this cost me?

Saving money is extremely important when starting a business. You need to make sure that you cut costs as effectively as possible and that you do your research on getting the best deals. Starting a business is a very expensive time and the last thing you want to do is to spend all your money straight away when you may need it further down the line.

5. Can I get any financial help?

There are numerous grants widely available and with enough research, you will be able to see if you are eligible for any of them. There are many conditions with grants, including location, what type of business you have and how many people you employ, but there are more organisations out there willing to help you than you might think.

6. What space am I going to use?

Getting a premises can also be extremely difficult, as you need to ensure that you have the right amount of business space and that it’s in the right location. You don’t want to be opening a bakery next door to a bakery that has been open and established for years. Research is the key.

Do you even need a premises to start with? Can you work from home and save on costs until further down the line when the business is more established? Maybe look into a Virtual Address, so as to appear as though you are based at another location.

7. Are there any rules or regulations I should be aware of?

There are a number of things that some people don’t realise which come with the joy of staring up a business, such as abiding by laws and restrictions and making sure you have the right insurances/licenses/council permissions. These are essential to start-up businesses, as the last thing you want is an unexpected fine for, say, not abiding by fire regulations!

And lastly of course, make sure you choose a good accountant :)!

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

What is an invoice and what should it include?

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If you sell goods or services to customers, it’s likely that you’ll also have to invoice those customers for the work you’ve done. But what information are you actually required to include on your invoices?

  • You must clearly display the word ‘invoice’
  • A unique identification number
  • Your company name, address and contact information. If you are a limited company, this should be the full company name as it appears on the certificate of incorporation.
  • If you decide to put names of your directors on your invoices, you must include the names of all directors.
  • The company name and address of the customer you’re invoicing
  • A clear description of what you’re charging for
  • The date the goods or service were provided (supply date)
  • The date of the invoice
  • The amount(s) being charged
  • VAT amount if applicable
  • The total amount owed
  • VAT registration number (if applicable)

If both you and the customer are registered for VAT, invoicing is a legal requirement and copies should be kept with your books and records for at least 6 years if you’re a limited company or LLP, and 5 years if you’re a sole trader or partnership.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Tax Relief When Home is The Office

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When a business is operated through premises that are owned or let by the business, claiming for rent, rates and utilities, etc., is all relatively straightforward. However, when the business is run from the home of the proprietor or director (if a limited company), then the expense claim requires a little more thought.

If you wish to claim an apportionment of the household bills, as opposed to the flat rate allowance set by HMRC, then a number of factors should be considered for the calculation.

The area of the home used for business purposes (this can be expressed in terms of floor space or number of rooms) and the time in which that area is used for work should be established in order to apportion the bills.

If a room is used exclusively for the business, then it will not qualify for private residence relief so capital gains tax could be due when the house is sold. Therefore the room should also be used for domestic purposes to ensure the capital gains exemption.

Directors cannot claim any proportion of rent, mortgage interest, or council tax.  However, they can charge the company rent for using their home and claim allowable, apportioned expenditure against the rental income. The rental income would have to be declared on the director’s self-assessment tax return.

Certain occupations have specific allowances and thresholds which have been agreed with HMRC, for example child minders, and these should be observed where applicable. For help and advise on this, please contact our tax team on 01633 871122.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

 

HMRC – Under Cover or On-The -Spot

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Flushed with success following the introduction of their Connect scheme (an information sharing program), HMRC have once again been focussing on cash-based businesses.

As a part of their investigations, officers from HMRC often pose as customers in restaurants, fast food outlets, bars and even hairdressing  salons , with a view to obtaining more information about businesses whose income is cash-based.  By masquerading as a normal customer, an experienced HMRC officer can gauge how well a business is doing by observing orders, counting customers and seeing how many staff are working.  He can then make an assessment of the scale of trade and ascertain whether that is in line with the income being declared.  The assessment may be carried out over a number of visits at different times and perhaps by different officers.

It’s important to remember, however, that if a representative of HMRC attempts to carry out an on-the-spot compliance test, you have the right to refuse in certain circumstances.  If you are busy working, the visit is outside normal hours, or the paperwork required is not at the premises – or indeed, if you consider the request to be unreasonable – you can politely ask him to leave and make an appointment to return at a more convenient time.  The only time HMRC (much like anyone else) can enter your premises uninvited, is if they have a warrant.

Always contact your accountant or tax advisor if HMRC have told you they wish to look at your books and records, even if you are certain everything is in order.  They can arrange to be present at the visit, if you so wish, and in some cases, can request the inspection be held at their own offices. They will also be much more adept at dealing with any issues which may arise and can ensure that you are treated fairly by the inspecting officer.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Top tips for writing a business plan

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If you’re thinking about setting up your own company or considering applying for funding for your business, getting your business plan right is crucial.

A business plan should provide an outline of your business, the market in which it will operate and how it aims to make money. We’ve identified some top tips to help you on your way:

  • Be concise: It’s really important that potential investors can understand what your business is all about from a quick glance at your plan. Remove any filler language and get to the point quickly.
  • Be specific: Being specific is just as important as being concise. The details will help you drill down into how you will actually deliver your plan.
  • Be realistic: You should be honest with yourself in your business plan, if you’ve got a strong idea, let it stand on its merit.
  • Know your market: A big part of knowing whether your business will be successful is understanding your market. This not only includes your customers, but your suppliers and competitors too!
  • Know your finances: Be very clear on how your business will make a profit If it isn’t going to make any money, it won’t be successful.
  • Use visuals: Whenever possible, and without overdoing it, use visuals in your business plan. Graphs, charts, and images can help bring your concept to life. Plus, it breaks up the text and helps a plan flow better.
  • Be creative: Include a creative element in your business plan so you stand out and grab someone’s attention. You can use templates, but don’t look identical to a template. Do something unique to make the plan yours.

For a free business plan template, visit The Prince’s Trust website, and for help on how to write your business plan, the Start Up Donut provide detailed information to guide you through the process.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

 

 

 

Protecting Your Business Data

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A recent survey of financial and IT auditors conducted by CareersinAudit.com, has revealed that they believe many small businesses are unaware of the importance of protecting their IT systems from loss of data and cyber-attacks.

The survey, carried out in the Spring of 2016, revealed that many small business owners do not feel the cost of IT protection worth the investment, considering their limited resources would be better spent elsewhere. As a result, it is estimated around half of businesses utilising IT systems have no back up or rescue plan in place should their data be lost or corrupted. Of those who do put a safeguard in place, it is often only done once without reviewing or updating in line with their business growth or increased risk.

The danger is that business owners do not fully comprehend how vulnerable they can be with no protection in place. The loss of data can affect not only the business’s ability to operate, but also raise issues of trust by customers, particularly where confidential data has been compromised or leaked.

Much of the blame is put down to a lack of guidance from industry regulatory bodies, as well as a lack of support for start-ups from the Government. The survey director has called for business owners to take a greater responsibility for their data protection policies and well as suggesting financial assistance be provided for related training and risk awareness for small enterprises.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Sponsor The Winning Team

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Following on from this summer’s Euro 2016 football tournament, and with the Rio Olympics just around the corner, could your business benefit from sports sponsorship?

Sponsorship is a mutually beneficial relationship between a rights owner, such as a sports club, and a fund provider – a business. To many it may seem to be the hunting ground of large multinational corporations, but small businesses may also be able to benefit, and generate publicity for their business.

It can also be a way to generate trust and goodwill in the local community. Your sponsorship may be enough to buy kits and sports equipment for a local children’s football club, or maybe fund a coaching program at a junior athletics club. For smaller businesses, sponsorship is a good way to be seen giving back, by supporting sport at the grass roots level.

But before entering into a deal, remember that it is more than just a corporate exercise. You may well imagine your company logo appearing all over an event, but instead you can view it as an opportunity to engage with your target audience, use it to tell your story, encourage customer relationships and build your brand.

There are many things which need consideration before entering such agreements if tax relief is to be allowable e.g. company logo, advertisements etc. care needs to be taken.

For more information contact our Tax Department on 01633 871122.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.