08/01/2012 by Geoff.
We always bang on about doing your marketing in order to make a success of your venture - but it will cost a fortune I hear you say.
Maybe not.
If you have a good product or service you stand a chance of harnessing the power of your existing customers - word of mouth recommendations. They’re very powerful and mean that new clients feel confident in your business and feel less on edge. Search for ways to make it easy for your clients to recomend you.
Whilst “word of mouth” marketing has been arround a long time it has recently had the advantage of online social media. But beware it’s not for all companies (not new start ups) you need a mature product or service.
Another point to remember in the words of “Crosby” it is no longer to offer a good product or service it needs to be exceptional giving your clients something to shout about for you.
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08/01/2012 by Geoff.
If you are using the Flat Rate Scheme for VAT then you will be aware that you cannot reclaim input VAT on your purchases unless they are a single purchase of a capital nature and in excess of £2,000 inclusive of VAT.
However the rules state that purchases of a capital nature made at the same time from the same supplier on the same invoice are deemed to be a single purchase for VAT Flat Rate Scheme purposes.
For example if you purchase a computer package comprising a computer, a printer, external hard drive, digital camera and speaker systems which costs more than £2,000 (incl. VAT) then the VAT can be reclaimed. If these are all purchased from the same store on the same day and are shown on the same invoice if the total cost of these items is in excess of £2,000 (incl. VAT) then you can reclaim the VAT.
So if you use the Flat Rate Scheme for accounting for VAT and are looking to purchase some new assets then you should take the time to shop around to see if you can get the items you require from the same supplier and include them all as one purchase. This could save you a large amount of input VAT you would otherwise not be able to reclaim from HMRC.
Simone Greasley
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20/12/2011 by Geoff.
As you may be aware HMRC introduced penalties for late-paid PAYE and related liabilities back in April 2010 but due to the way that the penalties are calculated the penalties have only started to be levied now.
Unfortunately it is not yet clear how this penalty regime will be applied and this may remain the case until the Real Time Information system is implemented. This is because HMRC’s system does not flag up that a penalty situation has occurred until after the last payment has been made and the year end reports have been filed.
It is only at this point that HMRC will be able to calculate if a penalty is due and the rate at which that penalty should be levied. The penalties will be levied as follows:
· First default – attracts no penalty if it is the only late payment in the year
· 2, 3 or 4 defaults in the year – the penalty levied will be 1% of the total amount defaulted (including the first default)
· 5, 6 or 7 defaults in the year – the penalty levied will be 2% of the total defaults (again including the first one)
· 8, 9 or 10 defaults in the year – the penalty levied will be 3% of the total defaults (including the first one)
· 11 or more defaults – the penalty levied will be 4% of the total defaults (including the first one)
On top of this any amounts that remain unpaid after more than 6 months after the penalty date will be liable to a further 5% penalty with a further 5% penalty applying after 12 months.
As you can see the late payment of PAYE and related liabilities could very quickly become an expensive problem, but is one that can easily be avoided if payments are made on time.
Simone Greasley
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20/12/2011 by Geoff.
Many entrepreneurs first venture fails. Rather than stop you trying again see it as an opportunity to learn. This can lead to finding a more efficient way of doing things and hence early failure can often breed later success. In the States entrepreneurs that have failed are seen to have a badge of honour!
You’ll have your own lessons to learn but common reasons for failure are:
· Poor marketing – do your market research and know who the players are
· Poor brand strategy – make everything you do attractive
· Weak cash flow – know when you’re going to get paid – strong cash flow is a priority
· Uncontrolled growth – know the balance between revenue and costs
Should you still fail it pays to wind up a business legally treating staff and investors with respect.
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13/12/2011 by Geoff.
Whilst companies are trying to reduce costs in the gloom there aim is helped by a growing market for flexible support services.
It might be a specific project or just that they can’t afford to take anyone on fulltime. The opportunity is to tap in to experience that’s out there and don’t be worried about geography - technology now allows people to supply their services to anywhere in the World.
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13/12/2011 by Geoff.
Whilst the selling of large companies is severely affected by the financial markets, sale of smaller businesses are not.
The owner driver, entrepreneur, may have children but they’re probably reluctant to take the reins of the business. This leaves the owner with a potential millstone round his or her neck. Normally their desire is not to make lots of money more they just want to make enough money every year to pay themselves a decent salary.
Selling is an option but like a lot of things it’s a numbers game, it’s all about letting people know about the business. Some entrepreneurs don’t realise how good their businesses are. If you are considering selling your business then we would recommend using an agent. Let them know about your business the accounts don’t tell the full story.
Don’t forget buying an established business is usually easier than starting one from scratch.
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08/12/2011 by Geoff.
Tax returns for the year to 5 April 2011 filed late will create a penalty even if the correct amount of tax is paid on time or indeed there is no more tax to pay.
Arguably that was a move which could have been expected before now, and at least the basic penalty stays at £100. What may not be so apparent to those of you who tend not to supply the papers needed until close to or even after the deadline (31 January 2012 for the tax return for the year to 5 April 2011) is how quickly penalties can now stack up.
The new penalties for late filing of Self Assessment returns result in, for example, an overall penalty after 3 months delay of £10 per day up to a maximum of £900.
Simone Greasley
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08/12/2011 by Geoff.
Many small businesses baulk at the challenge of recruiting but at times the only alternative is to do all the tasks yourself – you never know you might be a good juggler.
Taking on that first employee not only involves finding the right person but registering for tax, drawing up a contract of employment and complying with employment regulations. It is a legal requirement to register as an employer with HMR&C if you expect to pay above the NI lower earnings limit of £102 per week (£5,304 pa) or the PAYE tax threshold of £144 a week (£7,475 pa).
Cost and paperwork are common disincentives for small businesses but the question to ask is “do you really want to grow your business?” If the answer is yes then there is probably no alternative to recruiting. As an added benefit your new recruit may bring something new to your business.
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29/11/2011 by Geoff.
A blight on most British businesses is that it is difficult and expensive to secure loans.An alternative, but a well kept secret, is a loan from the European Investment Bank (EIB) which is distributed by Lloyd TSB, Barclays, Santander and the Royal Bank of Scotland. Typically the cost will be 0.7% less than a normal business loan. Loans from the EIB are not very well promoted so you have to ask. The other catch is that money may not always be available since banks have to apply for money in tranches. To be eligible for an EIB loan, firms must have fewer than 250 employees and use the loan to invest in growing the business e.g. buying plant, taking out a patent or investing in research and development.
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29/11/2011 by Geoff.
Slow payment or none payment are the scourge of small businesses. If you’re worried about your exposure there are four options:
· Don’t trade
· Advanced payment
· Trade on different terms
· Credit insurance
The latter option has improved recently but is still very sensitive to the state of the financial markets and insolvencies. Recently more user friendly policies have been introduced along with other features to help small firms. The major credit insurers are Atradius, Euler Hermes and Coface.
As with all things that affect cash flow firms should beware of complacency.
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