HSBC has launched a brand new Business Growth Grant competition. If your business has a turnover of between £100,000 and £2m and you are looking to grow and expand then this could be for you.

You need to demonstrate how the grant will help you boost your business, either here in the UK or overseas.

The total grant pot of £200,000 is available, and up to four grants worth £50,000 each will be awarded. The deadline to apply is 31 December 2011.

Up to two of the grants are domestic growth grants that will be awarded to businesses that want to take their UK operations to the next level; this might be because you have got a fantastic business model that you want to grow organically, such as opening more outlets or increasing production. Alternatively, it could be a business with plans to take over another business that could support their supply chain, for example.

A further two grants are for entrepreneurs with overseas ambitions. These will go to businesses that have either been successful in the UK but perhaps now have their eyes on overseas trade for the first time, or businesses that already focus on overseas trade but have aspirations to expand or enter other countries.

So, who can apply?

Businesses that are eligible to enter the competition for the HSBC Business Growth Grant are those that:

• are UK-based (includes Northern Ireland and excludes the Channel Islands and Isle of Man)
• have been trading for 12 months or longer
• have a minimum turnover of £100,000 and a maximum turnover of £2m per annum
• can provide profit and loss and balance sheet information for 12 months or longer and projected financial information for a minimum of two years

Visit www.hsbc.co.uk/businessgrant for full details, download an application pack (you can apply online also) and terms and conditions.

After the 31 December 2011 deadline the Judging Panel will select up to a maximum number of 5 entrants as finalists for each category. The ten selected finalists will then be invited to visit HSBC’s headquarters in London in February 2012, where they will be asked to pitch their case to the judges.

The winners will be announced by 31 March 2012.

So what are you waiting for, Act now to get your application in before the 31 December 2011 deadline.

Being able to work out your cash flow is a key task that all business owners should be able to do. The up and down nature of revenue within many small businesses necessitates the planning of cash flow. Seasonal factors and one off large orders can easily give an unbalanced perception of the cash flow of the business.

Consequently on different occasions it may be hard to effectively manage cash flow solely via income and expenditure methodology. An alternative method which can be used is the conversion cycle method. The conversion cycle method involves calculating the length of time that is taken to convert activities into cash. That is the length of time taken to recoup the money spent to finance activities or services as a cash return.

Why should I be concerned with the cash conversion cycle?

There are three elements of working capital that make up the cash conversion cycle (CCC):-

• Accounts Receivable Outstanding in days (ARO)
• Accounts Payable Outstanding in days (APO)
• Inventory in Outstanding Days

CCC = IOD + ARO – APO the final number of days represents the number of days that the businesses cash remains actively tied up operationally within the business. The lower the number of days the more healthy a business is. A higher number of days represent a warning sign that the business is heading towards difficulty. Analysing theses results over a period of time will help to identify any trends that require attention. It will also give a better representation of what the cash flow of the business is.

Understanding the different components of the cycle

It is not too difficult to understand factors affecting cash flow such as decreases or increases in profit margins. What is a little more difficult to understand is the working components of the CCC. A shorter period of collection provides an increase of cash coming into the business. Any decisions in regards to prolonging payment over an extended number of days will result in less money within the business. Knowing how many days you need to budget for gives a better indication of the kind of cash flow that is required by the business.

Correct implementation and management of the conversion cycle can have a positive impact on the business’s cash flow and profitability. The management of your cash conversion cycle could help the business to determine whether or not additional lending is required or whether not the business is able to meet its financial obligations.

Benefits of using the benefits of using the cycle

An additional benefit of using this particular methodology is that it also offers insight into the infra structure of the business. It offers an additional perception into the cost attached to each particular service or product. Hence you may need to decide which products to expand on or which products require price revisions or even discontinuing. Either way you will be able to make informed decisions about the running and sustainability of your business.

You may well ask the question what does a business advisor do? The answer will always vary depending on the personal knowledge of the person who is responding and at what stage they are at in their business. A simple description of the role of a business advisor might be ‘a person who translates the language of business. Effectively they help to translate business plans, marketing strategies, threats and opportunities, finances, internal and external infrastructures into a viable business.

Effectively a business advisor is a person that is able to converse in many of the languages of business which help to facilitate the efficient and effective running of a business. They are able to translate numbers into pictures and vice versa, goals into statistical data, targets into strategic goals and strategic goals into financial data.

Interpreting business into money

Interpreting your business into money will inevitably involve understanding:-

• What the breakeven point of your business is?
• Who the top ten clients of the business are?
• What percentage of sales and profit does each client bring to the business?
• What numbers are required to grow the business?

Simply being able to talk about your business in generic terms is not really enough. With the help and support of a business advisor you will be able to develop some meaningful due diligence data about your business. A distinct advantage of using a business advisor to help you to speak the language of business is that it will help you to understand your business from multiple perspectives and dimensions.

It’s all about the money

One of the key things that a business advisor will do is to help you present your business in a language that both banks and investors understand. No matter how well you present your business it will inevitably be ‘about the money’. Even if you decide to speak in terms of products or services there will always be related questions about the production costs and profit margins of these products.

No matter how promising the business sounds any decisions made about investment will ultimately depend on the financial sustainability and viability of the business. Hence it is necessary to speak about the business in a financial language which they understand. It is important to understand that sales do not necessarily equate to making a profit. The costs and outgoings of the business may well eat into any potential profits that the business makes.

Use the language of business to your advantage

Roughly speaking the language of numbers, statistics and unit costs will always outpace the language of words. There really is no competition between words and financial data. For example if finance were the athlete then there would be numerous members of the team all focussed on helping the athlete to win. There would be an accountant, bankers and business advisers to make sure that they are fielding the best team. Unfortunately there is not the same kind of team supporting the language of words.

It must be some six years ago I first met (virtually) Emily Coltman who was at the time working for a regional firm of accountants.

Emily was not long qualified but she was very interested in new technology and how this could help the smaller business, so no wonder that Emily has ended up as chief accountant FreeAgent.

I guess Emily felt she had more to offer because she has now published her first e-book – Finance for Small Business: A straight-talking guide to finance and accounting.

I have actually read it, cover to cover, before I decided to say anything about it.

It is another book worth reading if you are starting out on your own path towards self employment/small business.

There are a great many of these books, at Holden Associates we have our own £FREE New Business Kit.

So is it worth £10 (or £8 on Kindle), well actually Yes it is, and I have actually read the book rather than the promotional literature!

For the e-book click here.

For Kindle edition click here.

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No one seems to be sure whether the economy has or has or not emerged from a recession. There is constant speculation as to whether the economy will go into a double dip, that is appearing to emerge from the recession and then bouncing back into recession again before taking a continued steady path towards recovery. The intermittent announcement about job losses has naturally had an impact on the spending choices which are being made.

One consequence is that consumers are choosing very carefully when and whom to spend their money with. One of the positive things to happen is that more consumers are shopping around and looking for increased value for their money. This presents a good opportunity for small and medium sized businesses to capitalise on the cycle of change which is taking place.

So what should you do?

It is simple.......start blowing your own trumpet. Now is not the time to be shy. Think of three new ways that you can tell current and prospective customers what a great product or service you have. Make it explicit how you can meet and go beyond their expectations whilst still delivering quality.

Start thinking creatively and come up with innovative and new ways to get your business noticed. The really good news is that every business is looking for new customers. Start negotiating for the services your business needs. Services which were previously thought of as being too expensive may now be affordable. It is possible that such businesses may take on smaller clients in order to plug gaps that have been left vacant by larger businesses.

Stop looking for obstacles

Being a small or medium sized business in the current climate could be a blessing in disguise. One advantage is that it will be easier and quicker for you to implement any changes that you decide to make in regards gaining new customers. With help advice and business support you will be able to make changes without going through a lengthy and bureaucratic decision making processes.

“Change will be a crisis for some whilst for others it will be a fantastic opportunity”. That is an opportunity to capitalise on gaps in the market and on the increasing numbers of consumers who are straying away from brand loyalty.

If you are thinking “Where on earth do I start and there are 101 things running around my head”. Then the place to start is with a Holden Associates business adviser. We will be able to help you clarify your thoughts and bring your ideas to fruition.

Looking inwards

This is a great time to be looking at your business from the inside out and setting into motion a cycle of change that could help your business to survive and attract new customers. Ask yourself the crucial question.......what I can do to bring increased value and quality products to both my current and prospective customers?

Sales are key factor of every business!

In recent years there has been increased transparency about when government contracts are being put out for tender and what the tendering process is. As such it presents new opportunities for smaller businesses to increase their turnover. Securing a government contract can also help to create a sustainable business.

The devil’s in the detail

When it comes to bidding for government contracts, the more information bidders have or know in advance, the better their chances of producing a winning bid. The very nature of government contracts often means that they need to be very specific and detailed. Rules of governance, procedures and terms and conditions are set in advance with very little room for flexibility.

The stringent requirements may seem like a mountain to climb for smaller businesses. Nevertheless on the positive side it does mean that small businesses know whether they can or cannot meet the criteria. Additionally it affords them the opportunity of working towards meeting the criteria for future tenders if they are not able to do so at present. Bidders should carefully read all of the documentation because once the government signs the contract, it becomes legally binding to the winning bidder. Hence it is crucial that the entire contract is read and any discrepancies picked up. Never assume the paperwork is perfect always seek professional assistance to help you to understand the legal and financial implications.

Private Enterprise and the Government

The same business basics apply whether you are selling to the government or to private clients. Both are looking for quality at a fair price. No matter what the circumstances, bidders are required to be aware of their clients' needs, as well as how and why they buy from certain companies and who makes the final decisions. Getting to know the decision-makers is as important in government contracting as it is with private clients.

Pre qualification questionnaires

There may be a pre qualification process which you are asked to go through before bidding for a contract. A pre-qualification questionnaire will require you to present information about your business including accounts spanning a minimum of three years, detail the value of previous contracts and information about your business infrastructure including information about your suppliers. If the buyer is happy with your pre qualification questionnaire then you will be invited to participate in the next stage of bidding.

The early stages of bidding are a great opportunity to complete some research and detail how you are able to meet the tender requirements. The government itself is a great source of no-cost information. In addition using a business support advisor to help you during this process will help you to present your business in the best possible light. Business support advisors will work with you to promote your businesses in its best possible light.

Food for thought

There are always going to be challenges when bidding for government contracts. Working in partnership with Holden Associates will help to ensure that these challenges are not turned into insurmountable hurdles.

Selling to your mum, your family or your friends is unlikely to generate sufficient revenue to keep your business running or to make you a healthy profit. It is also unlikely that they will be able to give you the critical ongoing for feedback that your business will need for survival. Recent announcements about the decline of well known names have certainly given other businesses owners food for thought.

From a different perspective it reinforces the need for businesses to continue conducting market research intermittently. The reasons for conducting research are twofold. Firstly it helps to make sure that the products being sold are still relevant or are still popular with the target market. It also helps with the development of new products. It is unlikely that your regular or loyal customers will be able to provide the kind of critical feedback that is needed.

A World of Possibilities

On a positive note it does demonstrate that consumers are always on the lookout for new products or services. As such new or developing businesses can have the opportunity to become the next big idea. Being a tried, tested or established business does not guarantee survival. Becoming the next big idea is certainly an exciting prospect for up and coming businesses.

A Business Plan is Not Enough

Although many start-ups develop detailed business plans before they launch their business which is of course vital, much of the research done for the business plan is limited. It is either limited to secondary or very limited primary research. Having a great idea needs to be proven. Moreover it NEEDS to be tested and proven in a reliable way.

Be realistic

Being realistic is a key factor to business success. Receiving critical feedback may be a bit daunting but it is exactly what your business needs. Real unbiased opinions are worth their weight in gold. It will help to ensure that you are targeting the right type of people or that your business is set up in the best possible location. Market research is an invaluable opportunity to get inside the consumer’s minds and ask the important questions you need to know.

Satisfying a need is vital for success

When a product or service can satisfy a need or a want in the target market the business plan becomes far more valid and reliable. Competition coupled with the economic climate means that effective business planning has never been so vital to success. You may have fallen silently into the trap of only surveying consumers inside your close circle. Your passion for an idea will infect those you question and again result in biased opinions. Independent research and objective opinions are what you need to give your business a fighting chance.

Does your business suffer from the ‘can’t seem to get ahead financially’ syndrome?  Are your out goings larger than your income? If the answer is yes – then it is likely that you are unwittingly making some mistakes within your business. Do not worry, making mistakes is natural – we are all human. The key thing is to understand where you may be going wrong and how to get back on track quickly.

Error 1:- Not really knowing your financial situation

Before you can set your business on the right road, or introduce meaningful goals and develop savings strategies. You will need to know what your financial situation is. The time tested and proven methods of having budgets and accounts as a financial guide cannot be beaten. There must be some merits in applying a process that has stood the test of time to your business. You have three options either to engage an accountant, to take the do it yourself approach and the risks that this particular approach brings; or to do nothing and let your business fail. The choice is yours......

Error 2:- Running your business beyond its financial means

The current age of austerity brings with it a real cause for concern for every business owner. The ripples of tightening ones belt can be felt far and wide. Many business owners are also cutting back in order to keep the business running. The obvious answer to the problem is to generate additional sources of income. However the more probing questions relate to whose money are you spending and how much interest is your business incurring? Better management of resources will always be beneficial for the business.

Error 3:- Having poor income and expenditure systems

Every business needs to have set of robust set of internal system in place. Systems that ensure that income and expenditure are paid in a timely fashion. It is not uncommon to find that many businesses are in debt simply because they fail to collect outstanding payments. It is important not to inflict unnecessary pain on your business by shooting yourself in the foot by failing to collect outstanding monies. It is a simple equation of the money coming in equals an increased cash flow. The way out......is to manage your internal systems with precision timing.

Error 4:- Not having a development or contingency fund

It is self defeating to run a business that does not have sufficient capital to aid its development. At times it may be necessary to spend money as quickly as it comes in. However this is not good for the business in the long term. The lack of funds to cater for emergencies or to develop the business can be detrimental to the future of the business. Planning the financial future of your business will help to make your business more financially secure. It can be very rewarding to watch your business growing.

Your business will not take care of its self.....it needs your attention. Correcting these four errors will help you to create a more sustainable business.

If you are like many small business owners struggling to survive in today’s tough economy, what you're most hoping for this year is likely to be an increase in demand for your products and services. However, the fact is that should orders rise too quickly you might find yourself in a bit of a pickle. Your ability to respond may be hampered by circumstances beyond your control.

The natural preference is for suppliers to sit on the fence by keeping low levels of stock. Having adequate stock levels is balancing act for many a business. This creates a potentially difficult situation. If you are expecting increased demand in 2011, your best chance of meeting it is by working closely with your key suppliers.

Get a backup

When possible, your first step is to ensure that you have more than one supplier. Two choices are best. If demand spikes it is more than likely that one of the two suppliers will be able to meet the demand. In essence the key is to become your supplier’s favourite customer. Your goal is to encourage vendors to see you as a partner and, as a result, keep you at the top of the list. If there’s a problem “do not pick up the phone and scream. Ask how you can work together to solve the issue.”

Keep an eye on supplier’s data

The more information you have about your suppliers’ inventory levels, the better able you will be to plan. As part of the information-gathering process, you could ask your vendors to provide web access to product data. It’s unlikely they will allow you to see cost information, but they probably will let you monitor how many items they have in stock. This is especially important if your business experiences high turnover, because even a slight increase could put a real strain on suppliers. A best practice strategy is to break your inventory turnover down to individual products to see where potential supplier trouble spots are and address them.

Make sure your end is ready

For service businesses, the issue, of course, is finding ways to ramp up personnel quickly. One solution is to use sub-contractors. That, however, might mean higher costs, at least in the short run. Plus, you might simply prefer to have people on staff. If that's the case, you should develop a system for constant interviewing to generate a list of candidates to call on at a moment’s notice.

Final thoughts

Budgeting season is the perfect time to scrutinise supplier relationships. Your suppliers are in all likelihood mapping out their expectations for the year ahead and you can help them do so by providing your outlook. As a best practice, you should share your budget and the variety of scenarios you might face to see whether they can handle each level of demand. Many businesses have struggled because they could not meet demand. There's no good reason to join those ranks if you plan ahead properly.

Customers, customers, customers, there is no getting away from how important customers are to every business. Most businesses would be more than happy to welcome as many new customers as their business could cope with. There is no doubt that having an endless stream of customers would be a dream come true for every business.

There are a number of tried and tested methods that have been previously used to increase market share. The following are some ideas that could be utilised to increase profits.

STEP 1 - Cross promote your product.

It is more than likely that there are other businesses that have products which would be complimentary yours. Cross selling of complimentary goods as a package is often more attractive for would be buyers as it gives them instant options, it is likely that customers will say yes to save time. An additional benefit is that the other businesses involved are also selling goods on your behalf. For example if your business sells vacuum or carpet cleaners it would make sense to go one step further and sell a warranty and cleaning products for that particular item.

STEP 2 - Promote other products at delivery.

When you ship out or deliver your product, you include a coupon for other related products that you sell in the package. This in effect will attract them to buy more products from you. Money saving coupons are a traditional method of attracting new customers. It is more than likely that customers will buy other products whilst they are redeeming coupons.

STEP 3 - Create and sell add-on products.

Send your customers a catalogue of add-on products for the original product they purchased. This could be upgrades, special services, attachments, etc. If they enjoy your product they will buy the extra add-ons.

STEP 4 - Sell gift certificates to promote your product.

Sell gift certificates for your products. You'll make sales from the purchase of the gift certificate, when the recipient cashes it in. They could also buy other items from you or your web site.

STEP 5 - Give freebies and let your news of your spread.

Send your customers free products, information or e-books with their orders or via email. The freebies should have an advert for your business printed on them. It could be a car sticker, a pen, t-shirt or cups etc. This will allow other people to see your advert, as such they will become more aware of your existence and the services or products which you offer.

If you are seeking to increase revenue and sales then you may want to try some of these methods. On a positive note these methods are quick and easy to apply.

There are always a myriad of inexpensive ways that can be utilised to increase your market share. They key is to generate leads that will turn into customers who will return to your business whenever they require your services. More than likely you will be the first port of call.