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.

With all the recent gloomy predictions for the UK’s economy, George Osborne today outlined a range of new measures intended to drive growth and support small and medium-sized businesses.

Key points included in the Chancellor’s Statement were:

A new National Loan Guarantee Scheme worth £20 billion will see the Government underwriting loans to small enterprises, enabling banks to offer lower rates.

The British Bankers’ Association (BBA) will work on a new system for referring firms whose loan applications have been refused to Community Development Finance Institutions.

To help medium-sized firms access finance through non-bank channels, the Government will launch a £1 billion Business Finance Partnership, co-funded through private sector investment.

A working group led by the Department for Business (BIS) will look at ways of helping small and medium-sized businesses access alternative sources of funding, including opportunities to sell bonds, and will report by next year’s Budget.

Business angels who invest up to £100,000 in new enterprises will benefit from a 50% income tax break under a new Seed Enterprise Investment Scheme. They will also escape capital gains tax on profits from 2012/13 that they reinvest through the Scheme.

The Enterprise Investment Scheme and Venture Capital Trusts will be simplified and refocused.

An additional £75 million will be made available for small and medium-sized technology businesses to develop, demonstrate and market new products and services.

The business rate holiday for small firms that was due to expire in October 2012 will be extended to April the following year.

The 3p rise in fuel duty expected in January 2012 will be postponed until August.

A £400 million Get Britain Building investment fund will be used to boost the construction industry through the building of new homes. A Government-backed indemnity scheme will make 100,000 new 95% mortgages available for new-build properties.

The Regional Growth Fund is to be increased by £1 billion.

The Lancashire and Humber Local Enterprise Partnerships (LEPs) have been given the go-ahead to form Enterprise Zones, the North East Zone will be expanded to include the Port of Blyth to encourage investment in renewable energy, and a new zone will be considered for Battersea.

A number of Enterprise Zones will benefit from 100% capital allowances. These Zones are: the Black Country, Humber, Liverpool, North Eastern, Sheffield, and Tees Valley.

More rural businesses will gain access to superfast broadband, while further measures will ease compliance burdens on agricultural businesses, and £25 million for rural tourism.

Six Rural Growth Networks will be piloted to see how local authorities and LEPs can use new planning rules and infrastructure investment to support local economic growth. In particular, £2 million will be spent over the next three years on supporting rural enterprises led by women.

The qualifying period for unfair dismissal claims will be increased from one year to two from April 2012, and claimants will have to pay a fee to take their employer to a tribunal.

The Government will consult on introducing compensated no-fault dismissal for firms with fewer than ten employees, and on reducing the length of the collective redundancy process for 100 or more staff from 90 days to 60, 45 or 30 days.

For our full summary of the main points please click here.

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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In the world of small and medium sized businesses change is an on-going feature of running a business. Some of the changes that occur are beyond the control of business owners. Frequently these changes emanate from statutory obligations to which the business must comply. For example changes that are instigated by Companies House or more commonly changes that come from Her Majesty’s Revenue and Customs (HMRC).

Different schools of thought

Even though HMRC have not confirmed it officially there is reason to believe that they are moving towards the closure the Time to pay taxation scheme. This is a scheme which allows small or medium sized businesses to delay or stagger payment of their taxes as long as they have prior agreement from HMRC.

A common and most obvious opinion is that any such change may result in financial hardship for small businesses. Staggering or delaying payment can have a positive effect of improving cash flow. As such the business is able to benefit from the delay in paying taxes. Satisfying taxation bills can mean that a considerable sum of money has to be paid out in one go. Inevitably this has the knock on effect of reducing any monies available to spend on a daily basis and may mean financial hardship. The ability to stagger the bill inevitably gives the business more options and an increased ability to manage their cash flow thereby improving the chances of survival.

Recent data

When compared to historical data dating back to 2009 figures show that HMRC has steadfastly declined repeat applications. As such one third fewer applications have been granted. The reduction in the number of businesses being able to delay payment coupled with the recent uncertainty in the current economic climate brings with it increased concerns for business owners. Statistics show that 9.3% of businesses who applied for time to pay in the first quarter of 2011 were refused permission to do so. This is compared to 6% in 2010 and 2.9% in 2009.

Allowing businesses to delay payment is a bonus during normal economic conditions; it can be a god send during difficult or turbulent times. Once again HMRC has not confirmed that the time to pay scheme will be scrapped but the writing is on the wall. Never the less HMRC still continues to offer a listening ear to businesses that find themselves in difficulty. Their Business Support Service can discuss options for payment and ways forward for the business. It is important that any options discussed be shared with your accountant as they will be able to add increase understanding to the situation.

Keeping abreast of changes

As well as working in your business it is equally important to work on it by keeping abreast of any changes that may or may or affect your business. The continued viability of any business depends on that business being able to satisfy taxation demands as such it is important to know what HMRC are doing or thinking about.

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.

Online businesses are now a common feature of the 21st century world of commerce and socialisation. For some a virtual online presence is far more advantageous than a physical shop front or office. For instance, it can be cheaper and more accessible than a physical shop front. For many the use of the internet to aid the running of a business has been a financial advantage because there are smaller capital costs for the business to incur. There are a number of examples of businesses which only trade online and have become very successful global businesses.

Here are some tips to consider if you are thinking about trading online:-

1. Have a budget – some money will still be required to promote the business. Some people seem to think that you can be successful online without investing any money. Cheaper does mean that you will not need any money at all. There are a number of ways through which a business can be promoted, some free and some will incur a cost. Given this it is very important to allocate a budget towards promoting your business.

2. Work hard to develop your online business – an online business will need just as much effort as a physical business. You will still need to create an infrastructure for your business. What happens behinds the scene once customers access your website they will still need to be managed! There is no doubt that your online business will require lots of effort. The chances are that success will not happen by itself or happen overnight – you will have to work on it.

3. Treat your online business like a business - although your online business may not have a physical presence it is important that you treat your business professionally. This means that being disciplined enough to work on your business as much as you can. Ideally you should be disciplined enough to start work by at least 9.30 a.m. everyday – you never know who will be calling you! The ideal is to do something every day that will help to grow your business.

4. Be dynamic - the internet is a fluid and dynamic organism. The nature of the internet environment is as such that very little remains the same for a long periods of time. Hence it is essential to be aware of how different forms or uses of technology can benefit your business. An online business will need to be functional and user friendly.

5. Less is more – You may well be tempted to have your finger in more than one pie. If you want to be successful you will need to stay focused. This is very important if you want to produce outstanding results. Scattered efforts could will result in a mediocre business. Seeing one opportunity from start to the end is far better than having a pipeline of unfinished efforts.

Finally, what may look easy may require a lot of work!

If you are considering starting a home based business you will most certainly need to think about the formation of a business. It is likely that you may find that becoming the sole proprietor is the easiest and most appropriate choice to make in terms of the legal status of the business.

What does it mean to be a sole proprietor?

Being a sole proprietor means that you are 100% responsible for every aspect of the business, including, administrative decisions, legal compliances and any debts that may be owed. There are many benefits apart from being in sole control it gives you over the business. Sole traders are not accountable to anyone other than themselves.

Additional benefits include minimum paper work to be filed as opposed to when a company is incorporated, legal services are also optional. Although many small businesses feel like they should be incorporated in order to win larger contracts, they often do not realise the additional complications that it may create. Business owners who do taxes as a sole proprietor tend to have a less to do than those who are required to file forms for a corporation.

Downsides of being a sole proprietor

If you decide to become the sole proprietor you could be will putting your own credit record at risk. The money you borrow to start up the business will come from your personal credit, and therefore you will be responsible for paying it back. If the business should fail, this would mean liquidating all of your assets to pay back lenders this may include personal property.

Alternative to becoming a sole proprietor

You may also wish to consider an alternative business structure such as a partnership. If you have a friend or colleague who would like to go into business with you, this could be a better choice. With sole proprietorship, you have complete control over the company. But for many people, this is not the best option. With a partnership, you are able to discuss business decisions and get the opinion of another person. You can provide each other with feedback and support.

There are downsides to being in a partnership as well. For example in a partnership you are liable for your partner's actions. Hence if your partner does something illegal or has any negative spending habits, you will also be liable too. As such you have to make sure you really trust the person you enter into a partnership with.

You will also have to make sure you and your partner work well together. Since you and your partner both own 50% of the business, no single person will be in control. If you have a disagreement with your partner, you may find it hard to move the business forward. Of if partner decides to leave the business it is likely that the business may close.

Ultimately, your choice will depend on how confident you are that you can control the business effectively on your own.

There are many reasons that you might want to think about working from home through a home based business. If you are good at something or if you have a service that you can offer to others, a home business can be a great way to earn an income from the comfort of your home. If you want to start a home business, there are lots of things which you will need to think about before you start trading. Here is some food for thought.

A. The starting point for every business should be a business plan. Starting work without a plan can lead to your business starting on an erratic basis. From the outset you should know whether your idea is something you can do on your own or are going to employ additional staff. If you are going to employ staff then you need to be thinking about the personnel functions within your business, that is you will require job descriptions, contracts, policies and last but not least payroll functions. Employing people need not be a minefield as some of these functions can be outsourced to external companies.

B. Make sure that you have consulted with an accountant before you commence trading. It is advisable to have some knowledge of the taxation implications from the onset. Working alongside an accountant from the beginning will enable you to take proactive decisions from the very beginning. The formation of your business will bring with a variety tax implications depending on the legal status of your business. Hence it is prudent to speak with an accountant before any decisions are made. Coping with taxation is an important element of all businesses, it is something to consider in the beginning rather than half way through. There is no need to have sleepless nights if tax is handled correctly. Engaging with an accountant will allow you to consider the advantages and disadvantages of different business entities.

C. When you go into business, you will potentially be exposing yourself and your home to a variety of risks. It is possible that you may have increased sums of money on the premises. As such you will need to think about how these risks will be managed and what kind of insurance will be suitable for the business. If you will be storing products, chemicals or high value items then it is likely that your contents and building insurance may not suffice your needs. Consequently you will need specific small business insurance to ensure that you do not suffer loss.

Starting a small or home business is no different to starting any other business. The scale may be different but the inherent business principles remain the same.

Working from home does mean that you need to give extra thought to the whole idea before you start. Once your business starts it may take over your home hence the need to conduct research - doing will defiantly save you money and lots of time in the long run.