Last week England made international news for all the wrong reasons. The pictures and video footage tells one story, the aftermath of people’s lives tells another story. An untold number of business owners are attempting to count the cost of the damage that has been done to their business.
As a business owner one of the major investments in your life is likely to be your business. This includes countless work hours, untold amount of effort even when you are tired, countless hours of overtime and hard work not to mention the money that has been invested into the business.
It is already a challenging time for businesses in England with a fluctuating global market, the numerous concerns about the economy owing to America’s credit rating being downgraded and the problems in Greece and Italy. The global situation is bad enough and to a large extent understandable. Being looted and vandalised is never something that is understandable or easy to swallow.
The destruction of businesses across various regions of England has left many a business owner devastated and dismayed about the future of their business. For many it will be too early to try and quantify their losses or assess whether it will be possible to resume business again. Consequently it is every business owner’s nightmare to unexpectedly find themselves in the position of not knowing where the future of their business lies due to unforeseen circumstances.
Reading the small print
It is possible that you may find that your insurance policy does not cover the damage to your business, or that unfortunately your business insurance ran out the day before the riots and was not renewed. Whatever the reason or circumstances that you find yourself without insurance there is no reason to despair. It is possible that you may be able to claim under the Riot Damages Act of 1886.
All claims should be submitted through the police station nearest to your business within fourteen days of the incident. Hence it is important to act swiftly and make sure you submit your claim as quickly as possible.
Seeking help from your accountant
If you are having trouble quantifying the losses incurred by your business or what your business was valued at before the riots then your accountant should be able to help you. It is possible that they will have sufficient information from your previous accounts that will be able to help you put your claim together. Any historical forecasts provided via your accountant will also be useful when trying to quantify any monies lost through the inability to trade.
Independent help and assistance from your business adviser or accountant during this difficult time can go a long way towards helping to make decisions about the future of your business. Remember your accountant is there all year around not just for end of year tax submissions. There is no doubt that the help and advice that you receive from your accountant will be invaluable.
It really is scary to think about how much debt America has accumulated. We are used to talking about millions and billions, but when it goes into trillions it starts to become difficult to fully comprehend how much money we are talking about. Regardless of the sums of money being spoken about it does reinforce the need for businesses to diligently manage their income and expenditure. There is a very serious need for individuals and business to manage budgets effectively. Having a budget will help to steer and navigate your business through good and bad times.
Managing on a budget
It is not uncommon for small and medium sized businesses to manage on a small or limited budget. Hence there is an ongoing need to ensure that income and expenditure is able to balance throughout the financial year. There is no getting away from linking the success of a business with its ability to manage the financial side effectively. It is absolutely crucial to work through what comes into the business and what is going out. Given that business may fluctuate throughout the year. As such it is important to work out what the average income and expenditure is over a quarterly period this will enable any peaks and troughs to be taken into account.
Catering for on costs
It is tempting to think that all the money that the business makes can be spent as the owner pleases. However items like tax and national insurance should always be accounted for. Allowing for tax and national insurance will help to work out the income that can be drawn from the business. Knowing your real income will ultimately help to work out household income.
Priority and non-priority
If you feel that your business is struggling it might be worthwhile sub-dividing your budget into priority and non-priority areas. Items that are essential for the running of the business such as leases, business rates, utility bills, key suppliers and tax should always take priority when drawing up budgets. Essentially these are all the items that will allow your business to continue trading. It is important that you do not fall behind with these payments. Non-priority items such as credit cards or professional subscriptions can be placed lower down on the list.
The way forward
It is not too distant a memory that the last time America “sneezed” the United Kingdom caught a very serious cold from which it is still attempting to recover. On this occasion it is unclear what will happen or how badly affected the United Kingdom will be, if at all. Nevertheless, it is worthwhile taking the time to ensure that your business is in good financial health just in case Britain is adversely affected once again. In reality your business can only benefit from any work that is done to improve its financial running........let us hope that the UK has learnt its lesson and does not become infected again.
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.
You may have noticed that the birth and naming of one particular baby girl has made news headlines. One reason being for whom her parents are, the other because of the interesting choice of names that they have chosen for their daughter. In a similar scenario many a business owner will have to go through the process of choosing a name for their business.
Just like an individual’s name, a business name helps to create an identity for the business. Making decisions about the name of your business is not an easy task. A name can be everything and nothing. Everything in that it helps your business to establish and distinguish itself from other businesses. Nothing in that it requires the infrastructure of a business behind a name in order to bring it to life.
Food for thought
-
Take the naming of your business seriously
You should take the naming of your business seriously. It is important to remember what may seem like a really good idea, could turn out to be a difficult name to market. It is amazing what the human mind can do with a quirky name! It is possible that names that may seem like a good play on words could backfire resulting in your business being the source of many a joke.
-
Avoid using abbreviations
Using abbreviations is a sticky wicket. Whilst it will be easier for communication, it may be difficult for customers to understand what the letters stand for. If you have a large and ongoing marketing budget then using abbreviations should not be a major problem. Using an Acronym is fine if you have the time and money to educate customers about what the name means.
-
Steer clear of self aggrandisement
There is nothing wrong with having a big vision and high aspirations for your business. However endings such as “global”, “international” or “worldwide” should be avoided. Even though your business may be capable of competing in such markets one day. It is highly unlikely to be the reason as to why your customers choose you. The chances are your customers have chosen you because of the individual and specialist services that you provide. An oversized moniker may make your business seem impersonal to local customers.
-
Stay OUT of Court
Using, borrowing or modifying a well known brand name could see you be landed with a hefty bill for court costs. Larger businesses and corporations have the money, staff and expertise of how to protect their name. It is highly likely that they will pursue any business which they feel has infringed on their trade mark or copy write.
Hence there is a vital need to check the availability of any name chosen. It is possible to use a similar name to another company as long as it is being used in an unrelated industry.
As from the 1st July 2011 the UK introduced a reform to its current Anti-Bribery Act. Naturally with any new legislation there is a need to ensure that your business is able to comply with new regulations. A grace period of two months has been afforded to businesses to ensure that they do not fall foul of the law. The Act is extensive and includes employees, business partnerships and suppliers to the business. Hence business owners will need to be vigilant in all areas of their business as they could unwittingly become involved in corruption through business associations.
The Serious Fraud Office & Ministry of Justice
On the 30th March both departments produced guidance to enable businesses to comply with the new Act. It seems as though the drive to reduce corruption and bribery in business will be on the agenda for some time. Consequently time should be taken to become familiar with the guidance and to implement any suggestions and ideas which it offers. It is possible that any business that falls short of the law will be hit with substantial fines or find themselves in court.
Who will be affected?
Essentially any company that does business in the UK will be affected. That is UK businesses that do business outside of the UK or globally, or overseas companies that do business within the UK. The long and the short of it is that there will be no escaping or side stepping of the law. The common perception is that enforcing good practice will help to enhance the UK’s image as a fair and safe place to conduct business. Who knows? This may even help smaller businesses by levelling the playing field.
What is in the Act?
The Act will bring into force new generic offences such as:-
-
The giving and receiving of bribes
-
Bribing a foreign public official
-
Failure to prevent bribery or corruption by representatives
Business will need to be able to demonstrate that they have taken adequate steps and have suitable procedures in place to curtail bribery.
What Holden Associates recommend?
-
Having an easy to understand and implement anti-corruption policy.
-
Engaging an independent person to vet or implement your anti-corruption policy.
-
Encourage the reporting of misconduct or irregular approaches from other businesses.
-
Be aware of who you are doing business with and by conducting checks on employees that may be at risk.
-
Implement staff training to ensure dissemination of the anti-corruption culture to all staff
How can Holden Associates support you?
The need for businesses to implement anti-corruption procedures has become of the utmost importance. Ignorance will not be considered as an adequate defence should the worst come to the worst. We can help by providing :-
The cost of litigation and loss of reputation is something no business can afford.
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.
It is estimated that about £400 million is left unclaimed from the Small Business Rate Relief scheme (SBRR) each year. That is a lot of money that could make a significant difference to small businesses each year. It is likely that a lack of awareness of what small businesses can or cannot claim has led to the accrual of such a huge pot of money. The crux of the matter is that Her Majesty’s Revenue & Customs will automatically chase you for any monies owing, however, they will not take the same approach if you fail to claim any money owed.
How much can be claimed?
The rules for claiming SBRR are relatively straight forward.
-
You can claim SBRR if the rateable value of the business premises is below £12,000.
-
Different rules apply for businesses have more that property but the rateable value collective falls below £12,000.
-
Any business with a rateable value of £6,000 or below will be exempt from paying business rates.
-
A tapering relief going from 100% to 0% will be applied to business properties with rates from £6,000 to £12,000
This exemption will remain in place until September 2012, so if you have not claimed.......what are you waiting for? There is no time like the present!
Benefits
This really is a “no brainer”. The less money paid out, the more the business will have to spend or to save. Either way it will help to sustain the business. Rumour has it that businesses in the North West of the United Kingdom are the least likely to claim. In this areas only a quarter of the businesses that are eligible to claim actually take steps to submit a claim. If you think that you are eligible then your first port of call should be your accountant. If you do not have an accountant then you should not be shy about contacting Holden Associates. Needless to say - for small businesses every penny counts.
A complicated tax system
If you marry a complex taxation system, poor financial skills and lack awareness about tax schemes the result is a large number of businesses which do not benefit from the tax relief schemes which are available. There are countless new tax laws and amendments that come into effect each year. As such HMRC has become cumbersome and difficult to understand. It is likely that if you take the time to look at Her Majesty’s Revenue & Customs website after awhile your eyes would glaze over because of the mountain of information which is to be found on the site.
What is the solution?
The easiest solution is to engage an appropriately qualified accountant if you do not have an accountant. It may cost you money, but it will save you having to wade through reams and reams of tax laws and amendments. The second solution is to attempt to manage the situation yourself and risk making major errors for which you can potentially be fined.
The recent attempt to hack into the International Monetary Fund computer systems has highlighted the need for all businesses to be proactive about protecting their data. On one hand the use of information technology has brought great benefits to small and medium sized businesses. On the other hand it has created a new serious and silent threat which needs to be treated as a seriously high risk factor. Virtual theft is now as serious the loss of goods or products.
Data is one of the most valuable assets that any business has. First and foremost data forms a central component within many businesses. Data can be transformed and used for multiple uses such as marketing, business forecasting and business analysis. Ultimately, data can transform a business and be turned into a healthy profit. It is no longer as simple as one competitor ‘stealing’ the odd customer here and there. Loss of data could lead to serious consequences both strategically and financially for the business.
Mobile Phones
Mobile phones are increasingly an essential part of everyday life. They are often used as a multipurpose tool to organise work, send and respond to emails and to manage increasing amounts of information. It is truly astonishing to think about the vast amount of personal information which is contained in a mobile phone. That is personal information about the individual, their friends and work related information. Whilst the inclusion of Bluetooth on many mobile phones may be useful to facilitate wireless connection to a variety of devices it also makes the phone susceptible to being “hacked”. As such any information that is contained in the phone can be exploited via external sources.
Failure to treat data as being valuable
Often the electronic records on a database are more valuable than the computer itself. Frequently the computer can be replaced, whereas data loss or corruption can be irreplaceable. Surely the thought of having to tell all your customers that you have lost all their personal or business information cannot be a pleasant one. Equally, facing the thought of customers potentially suing you because they felt you were negligent with their data is not the best outcome. The loss of classified information could ultimately mean the loss of business and reputation. As such businesses will need to consider investing in a means of protecting their data.
What needs to be done?
-
Backup early and frequently
-
Secure wireless transmissions using encryption
-
Password protect individual documents
-
Use file sharing security to set access for those who can or cannot access files
-
Ensure that anyone who has your data such as your accountant uses secure measures to secure your information
There is no excuse not to maintain strong computer security whilst managing your business. Data protection and electronic security is an essential component for peace of mind. Help and advice should be sort from your business advisor if in doubt about what needs to be done.
Technorati Tags:
Business Security
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!
