New research shows that it’s more expensive to run UK SMEs outside of London

Research from The Federation of Small Businesses (FSB) reveals that Government policy has made it more expensive for UK SMEs located outside London.

The policy changes recently implemented by the Government have put a relatively larger burden on small businesses in Northern Ireland, Scotland and Wales than on those in London. The legislative changes that have caused this include the cost of taxes and regulation.

UK SMEs dealing with increased costs in devolved regions

The cost of the changes in every devolved region has gone up, while it has actually decreased slightly in the capital. The average UK SME has an annual cost of £481,000. While this is the same cost as 2018, it has increased by 14.5% compared with the £61,000 it cost in 2011.

Small businesses in Scotland are paying 14.7% more, 14.9% more in Northern Ireland and 15.25% more in Wales, because of the measures. These changes are shown in the annual Impact of Government Policy Index, which also reveals that the rise in London was 13.7%.

The index is currently measuring the highest ever, due to the rising business rates announced in the Autumn 2018 budget. Other Government policy changes in areas including insurance and pensions means that they outweigh any benefit from a reduction in corporation tax.

UK SMEs in construction sector most vulnerable

According to the research experts at the Centre for Economics and Business Research (CEBR) who compile the index, the way the economy is made up in the devolved regions explains the rise in costs.

The data shows that construction is under the most pressure, as it is dealing with a 28% rise in costs due to the policy changes. Rising wages and labour taxes mean that it’s the hardest hit sector in devolved areas. The costs of manufacturing actually rose by a fifth in just two years.

It’s also likely that the increase in minimum wage from £7.83 to £8.21/hr, is affecting these regions and sectors. Most workers in the capital already earn more than the threshold due to London weighting on salaries, so this also impacts the distribution of costs.

Fewer businesses in devolved regions

Another factor that has contributed to the marked difference in business costs is the sheer number of businesses in London. Devolved regions of the UK are home to far fewer companies than the capital. Per 10,000 people, London has 1,563 businesses. In Scotland, the number of businesses per 10,000 people is 735, in Northern Ireland 897 and in Wales 774.

 

The index has been compiled by CEBR since 2011, to measure the impact of Government policy on the average VAT-registered SME.

 

James Turner, Managing Director of Turner Little Limited says: “It seems clear from this report that the Government must do much more to support UK SMEs throughout the whole country. At the moment, the weighting in favour of small businesses in London is marked. As the country heads towards Brexit, there needs to be much more guidance and reassurance from the Government for small businesses, and particularly those in regions outside the capital.

“Small businesses in the UK increasingly form the backbone of the economy and, as such, need more support. If the country is going to thrive after Brexit, then work needs to be put in to shore up SMEs in all regions of the country.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Why money management should matter to small business owners

No matter how healthy your turnover, without tight cashflow management, there’s no chance of success. Problems such as late payments, too little planning and ignoring the daily costs hit small business owners hardest.

Cashflow and effective money management keeps a business going. By creating a cashflow budget and better controlling payments, small businesses can mitigate the danger posed by poor money management.

Here are some financial management tips for small business owners:

  1. Manage payment terms

Figures from the Asset Based Finance Association (ABFA) reveal that clients of SMEs take an average of 72 days to make payment on invoices. In addition, micro-business owners generally wait six weeks longer than bigger businesses to be paid.

With 70% of small business owners citing cash flow as their biggest problem, and that late payment is the most common cause, this is a key issue to target for SME owners. By assessing the risk your company can take on payments, you can ascertain the best-case scenario. For example, if you feel your business can’t take any risk on the possibility of late payments, then advance payment could be the solution.

Credit-check any new customer or business prospect before you go into business with them. It can feel counter-productive to turn down a new contract, but if it’s clear they won’t pay then it’s the best decision for your business. If the customer’s credit history is acceptable, the next step is to establish watertight terms and conditions. Set up expectations straight away so there can be no confusion about when they’re meant to pay. If necessary, invest in a solicitor to make the contract fool proof.

  1. Establish a cashflow budget

This will ensure your business can pay all expenses. It allows the owner to proactively manage revenues and expenses. Components of the budget plan should include a sales forecast, anticipated inflow and outflow of cash, any debt repayments and ongoing operating costs.

Keep it up-to-date regularly and make sure it truly reflects your business and its future plans.

  1. Review accounts payable regularly

 

By incorporating a regular review of accounts payable, you will be able to determine whether your business is up to date with its credit obligations.

 

  1. Cut expenses where possible

 

Look for any way to cut back unnecessary expenses. For example, it might be possible to slash the cost of promotional material without adversely compromising quality. When business is up, consider temporary or part time employees, before taking on permanent members of staff.

 

  1. Understand your customers

 

Many businesses set their own schedule for paying invoices. If you can include these in your credit control system, then you can retain some control. If you miss a customer’s cheque payment run, then that could have a knock-on effect on your cashflow, as you’re forced to wait another month before receiving payment. Invoice customers according to their schedules, whether that’s weekly or monthly. Being flexible at this point in the process will help cashflow management.

 

  1. Ensure invoices are accurate

 

PwC research reveals that about 85% of reasons given for non-payment by customers reference poor administration and unanswered invoice queries. Get the basics right, such as making doubly sure all invoices are for the right amount, and are addressed to the correct people, can help immeasurably.

 

  1. Employ a credit controller

 

Small businesses should, where possible, employ a separate credit controller. An employee dedicated to chasing invoices will accomplish much more for the business, than the owner trying to squeeze it in when they have time.

 

  1. Negotiate better terms with suppliers

 

If you’re heading up a fast-growing start-up, try to secure better terms with suppliers. Simply by explaining your circumstances you may be able to secure credit of up to 60 days, which will help cashflow immeasurably. If you never ask, you’ll never know, and you could be stuck with the default 30 days.

James Turner, Managing Director of Turner Little Limited says: “Creating a workable plan for cash flow management is often what sets a successful small business apart. While it’s easy for owners to get carried away with the creativity involved in their start-up, or for managers to forget about day-to-day expenses, it’s vitally important to get a handle on finances. Cash flow can cause a small business to sink or swim, and poorly managed cash flow leads to problems that can quickly spiral into potential bankruptcy.

“Luckily, with expert advice and some common-sense planning, SME owners can avoid the pitfalls surrounding the neglect of their daily cash flow. At the heart of improving cash flow lie two fundamentally important goals. They are: regulate your income and control your expenditure. Always plan for the unexpected and don’t assume that problems won’t occur. Utilising clever tactics, expert assistance and a diligent and pro-active approach can allow you to grow your business and mitigate the unthinkable should the unexpected happen.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Why market research is key to small business success

The UK’s market research industry is the second largest in the world, according to the Market Research Society. And no matter which sector a business is operating in, understanding the economic, social and cultural context in which it is trading is essential.

For small businesses, commission market research may seem an unnecessary expense, particularly when starting out with little cash to spare.

Market research vital for small business success

SMEs may dismiss market research as something that’s only necessary for large businesses. However, starting market research out of the gate can save time, cash and problems later on for small businesses too.

Customer opinions affect every business, no matter its size. They often have fixed perceptions and clear ideas about what they will or won’t buy. So, if a small business has made a fundamental error early on with its product or service, finding out as soon as possible could save them from going under.

Jose Scheuer, business and marketing lecturer at the London School of Business and Finance says: “In the past a small business had competition from other, often local, small businesses and their customers were known. Today a small business competes in a much larger field. Not only does it face competition from local as well as international companies, often these competitors are much larger and have greater negotiating power to source and sell at cheaper prices. In addition to this, small businesses face competition from the unstoppable growth of e-commerce.”

Using less to achieve more

Small businesses inevitably have fewer resources and less money than larger companies, but they may also have more to gain from effective customer market research. It’s about being careful and strategic.

According to the Federation of Small Businesses, small and medium sized (SMEs) companies make up 99.9% of all UK businesses. This means that SMEs form the core of the economy, and it’s more important than ever that they do their market research in order to gain customer insight. If they get this right, then they will make better decisions leading lead to improved product or service design, and eventually higher profits.

When carrying out market research, small business owners must consider exactly what they want to gain. For example, what they need to know from customers in order to improve their service, product or communications. Choosing a market research consultant and working with them as a partner will benefit the process.

It’s essential to be realistic. If the research shows there is a flaw in the service, then use it to improve. Working with the right kind of consultant that will be honest with research is the most useful. Here are some initial steps to get started with market research.

Analyse data you already hold

Most businesses already hold a lot of customer information in one form or another. By systematically analysing it, you could be surprised at what you already know about current and potential customers.

If you do already have data, check how useful it is. Is it biased by the questions that were used to gather it, for example? Before adding more customer data into your files, organise the pieces you have. Think carefully about how you can use it to your best advantage. This will put in you in a good position to work out any gaps in your knowledge, so you can create a solid plan for your research. Always factor in GDPR considerations when handling customer data.

Look for high quality data

Putting quality over quantity is vital for research. Don’t get carried away with trying to amass endless pieces of research. SMEs in particular should ensure the process is streamlined as much as possible, so that time and money isn’t wasted. A vast amount of data is no use unless it can be properly utilised.

In today’s online world, it’s possible to access a lot of data without incurring any costs. The Census is always a good place to start, and Royal Mail’s MarketReach database is useful for direct mail. Social media accounts are also vitally important in ascertaining what your target demographic likes to do, buy, wear and see. However, always bear in mind that the people who tend to express a lot of information that’s readily available on social media tend to be a relatively small group. They shouldn’t be considered as a complete resource, as they are not representative of entire demographics. Don’t make the mistake of relying too much on one source of data, as this could exclude a lot of important information.

Be flexible in your approach

Gaining insight into your target market should include qualitative insights. Simply listening and talking to small groups of people, and individuals, can give a lot of usable information. Use your own observations alongside the numerical data you’ve amassed to make decisions on actionable points. This flexible approach is particularly important for small businesses that are working with smaller budgets.

James Turner, Managing Director of Turner Little Limited says: “Market research is a fundamental aspect of small business success. Start-up business owners, entrepreneurs, and established SME managers need to know the market for their service or product. They should be asking who their potential customers are, how much they’re likely to pay, how often they will pay it, and is it possible to make a profit based on this information?

“It’s also important to learn how best to analyse the information extrapolated from customers and potential customers. If the wrong questions are asked, then misleading information will negatively impact on later business decisions.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Strong uptake for streamlined small business registration service

More than 200,000 small businesses in the UK have taken advantage of the Streamlined Company Registration Service, since its launch. The strong uptake of the service shows how much it was needed, given the challenges faced by small business owners.

While words used to describe UK SMEs tend towards ‘agile’, ‘disruptive’ and ‘innovative’, many small business owners find themselves increasingly slowed down by bureaucratic red tape. Statistics show that small businesses spend around 70 hours per month dealing with form filling, tax and registration. All of which eats into growth targets and time spent on new ideas.

Small business registration simplified

To combat some of the paperwork needed at the start of the process of setting up a small business, the Streamlined Company Registration Service was introduced.

Launched through collaboration between Companies House and HMRC, the service is designed, ostensibly, to help the burden of administration on new businesses.

Small business registration has always involved registering with Companies House. Since the new service was introduced, small businesses can now register for corporation tax and HMRC’s services as a PAYE tax employer, all at the same time. Traditionally one would set up the company, start trading and then register when HMRC when they employed someone or completed their first-year annual accounts.

The new system is claimed to make it simpler for start-ups and small businesses to ensure they’re legally covered in one process. Prior to the service being launched, small businesses were obliged to send the same information to HMRC and Companies House. This arguably duplicated the work necessary to complete the small business registration process and it was suggested that it left some companies legally vulnerable. One could equally argue that the new system is intended to ‘trap’ everyone setting up a company at day one.

Never been easier

The Financial Secretary to the Treasury, Mel Stride MP would have you believe and has said: “It’s never been easier to set up a business in the UK. Reducing the administrative burden on small businesses is all part of this. HMRC and Companies House are working hard to make business registration and tax easier. Previously, the same information would need to be entered in different platforms to register a company and register for tax, we have simplified that process.” They have but to what purpose?

The Government says that it is committed to delivering a digital, streamlined tax system for every business in the UK. It wants to support all businesses, including UK SMEs, to get their tax correct in order to reduce the amount lost through errors that can be avoided. A more cynical view might be that the Government want to make sure everyone is on a database and their incomes tracked and taxed automatically and at the earliest possible opportunity.

The Industrial Strategy Programme

The simplification of small business registration is part of the Government’s Industrial Strategy. The strategy’s aim is claimed to help UK small business increase their productivity by assisting them to “create good jobs and increase the earning power of people throughout the UK with investment in skills, industries and infrastructure.”

The Government has repeatedly stated that they see UK small businesses as a vital part of the UK economy, particularly as we move ever closer to Brexit. Small Business Minister, Kelly Tolhurst MP, says: “British small businesses, and the entrepreneurial spirit behind them, are the backbone of the UK economy, employing over 16 million people up and down the country.”

By investing in infrastructure, skills and modern industries, the Government says that it is making it easier for UK small businesses to flourish.  

Small businesses suffer growing pains

Despite this, many small businesses owners report suffering from stumbling blocks to growth. Research from the British Business Bank canvassed 500 SME directors in England and found a third wanted to grow their business but didn’t know how.

Lack of awareness of alternative financing options particularly stands out as a key problem. Just 5% of the companies asked said they have thought about early-stage equity investment, for example. Only 7% say they considered crowdfunding.

James Turner, Managing Director of Turner Little Limited says: “While Government support to simplify small business registration is acceptable, the sector would benefit from further initiatives. This is particularly the case for finances. Many small business owners are unaware of the right kind of finance to maximise their growth plans. It’s absolutely the case that many find the financial landscape difficult to understand, apparently complex and daunting. This can seriously impede small business growth in the UK as can the ever-increasing burden of red-tape and regulation.

“We even have figures showing that some simply give up. The study by the British Business Bank shows that 27% of small businesses that can’t access the finance they want, simply abandon their growth plans. This clearly shows that there are many ‘black spots’ in the small business process, that need to be addressed by Government initiatives.

“Small businesses are the beating heart of the UK. Figures from the Department for Business, Innovation and Skills show that the country’s 5.7 million small and medium sized businesses form more than 99% of private sector companies. They employ approximately a quarter of the UK’s population and turnover an average of around £2 trillion. More is needed to support this vital sector, in terms of Government backing and through raising awareness of financial options.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Small businesses beat larger rivals on inclusion and diversity

Diversity matters in business. Organisations perform better, make more money and attract superior talent when they have a culture of inclusivity and diversity. McKinsey & Co, one of the world’s foremost consultancies says that there is a distinct financial advantage in inclusivity and diversity.

And it seems that small businesses are beating larger companies on diversity and inclusivity.

Financial advantage for small businesses

The research by McKinsey & Co shows that businesses in the top 25% for gender diversity are around 21% more likely to perform better than those in the bottom 25%. It included 1,000 organisations across 12 countries and examined every benchmark for diversity. It shows that organisations in the top 25% for ethnic diversity are a third more likely to see higher than average profitability than those at the bottom.

Diversity most obviously impacts the financial performance of a company when it’s embedded in executive teams and managerial positions. This correlation exists across all countries in the research. However, ethnic minorities in particular, are still under-represented in executive teams around the world.

Small businesses generally more diverse

As financial performance is linked to diversity within managerial and executive teams, it’s logical that small businesses outperform larger companies in this area. A Marketing Week report backs this up. Its annual Career and Salary Survey suggests that UK small businesses do better than larger rivals in terms of diversity and inclusivity. Furthermore, organisations with a strong diversity culture are more attractive to potential new hires.

The survey, which was collated from 4,415 marketing professionals, also shows that some business sizes and industries are still under-representing diverse groups of employees. For example, religious groups are the most likely to be under-represented in medium sized businesses (those with 50-249 people) at 20.8%, followed by large companies (250+ employees) at 19.8%. The best result for inclusivity in this area is with small businesses at 11.5%.

Around 50% of respondents in the gambling and gaming sector report that ethnic minorities are under-represented, followed by media at 42.5% and the public sector at 42.5%. Overall, ethnic minorities are least likely to be under-represented in small businesses.

Stark contrast between large and small businesses

Medium sized companies (50-249 employees) employ fewer LGBT employees, with 18.9% saying they’re under-represented. Small businesses again score highest, with just 7.5% of respondents saying that they feel LGBT employees are under-represented within companies under ten employees.

Another stark contrast can be seen with employees with mental or physical disabilities. Almost 41% of respondents feel that they are under-represented in large businesses, but just 13.8% report the same for small businesses. Similar ratios can be seen with other categories, including single parents and older employees.

Government moves to increase gender diversity

While the statistics for small businesses are encouraging, the Government is working to, in particular, increase gender diversity. A majority of MPs recently backed a recommendation by the Association of Accounting Technicians (AAT) to extend its ‘Women in Finance Charter’ across all businesses within the UK.

As it stands, the Charter suggests that firms within the financial services sector commit to four key actions:

  • Name a senior executive as accountable for gender inclusion and diversity.
  • Set targets internally for gender diversity within senior management.
  • Publish progress every year.
  • Make sure the senior executive team’s pay is linked to the delivery of gender diversity targets.

This was signed by 300 financial services businesses, and its impact is therefore confined to this sector. AAT wants to see it renamed ‘Women in Business Charter’ and cover all businesses.

While the financial sector has been making some progress, a report from the Tech Talent Charter shows that they’re falling behind. The report says that the UK’s tech sector is failing to include women into tech roles. The UK average number of women in technological roles is only 19%, despite the Charter’s launch in 2018 with the aim of being more proactive in terms of delivering better gender diversity in this sector.

James Turner, Managing Director of Turner Little Limited says: “Multiple reports show that small businesses in the UK are outperforming larger companies in terms of inclusivity and diversity. This is perhaps unsurprising given that small businesses are often disruptive, innovative and forward-thinking, while larger companies can become lost in years of tradition and old-fashioned thinking.

“Every measure of diversity inclusion is shown to be greater in small businesses than medium to large. It’s the same across every sector, as well as across multiple countries. It’s encouraging that small businesses are further ahead when it comes to delivering inclusivity expected in 2019.

“However, it’s also clear that there is still much to do across every sector to encourage diversity. The financial advantages are there for the taking, and it’s hoped that further Government measures will continue to encourage inclusivity across the UK.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Why UK SMEs must protect their digital future

A recent survey carried out by the Management Consultancies Association (MCA) reports that technology and digital challenges are the biggest worries for business owners in 2019.

Business transformation, digital strategy and the need to understand rapidly advancing technologies are all named in the research as priorities. The survey asked 250 decision-makers across the private and public sector, taking in opinions from UK SMEs and bigger businesses.

Improving efficiency is the top challenge for UK SMEs

Across both the private and public sector, SMEs named ‘efficiency’ as the biggest business challenge. This is followed by Brexit concerns, potential disruption from the incorporation of automation and AI and effectively deploying digital transformation. More than half of business owners in financial services cite Brexit as the biggest business challenge, while public sector business owners are more concerned about recruitment.

While Brexit is a big concern to every sector in the UK, this survey shows that there are many challenges facing UK SMEs. In order to effectively manage digital transformation, it’s vital that businesses identify cyber-security priorities and take effective steps to protect data insight and intelligence.

Working in the Fourth Industrial Revolution

Paul Hingley is the Data Services Business Manager at Siemens UK. He says: “We are now in the midst of the Fourth Industrial Revolution. It is based on the use of cyber-physical systems where the growth of connected devices through the Internet of Things will see digital transformation increase performance. Applications and digital services will also help build new digital business models that will differentiate organisations.”

At the centre of the digital transformation challenges for every sector is data. It’s estimated that the total amount of data generated across the world will exceed 45 Zettabytes (one zettabyte is equal to 1 trillion gigabytes) by 2020. That’s an increase from 7.4 Zettabytes just three years ago. According to an IDC report commissioned by Seagate, “the global datasphere will grow to 175 zettabytes by 2025.”

Behind this phenomenal growth of data is the increasing connectivity of machines, devices, sensors and meters.

The Internet of Things – challenges and benefits

As digital platforms increasingly utilise automation and AI, there will be more seamless connection of all kinds of technology. This includes augmented and virtual reality, simulation, cloud storage technology and digital security protection. All of this will have an impact on businesses over the next ten years.

Mr Hingley says: “Internet of Things-driven benefits to production are clear as it allows data to become actionable and delivers value to the business. In order to benefit, businesses have to embrace the technological forces that are transforming both society and  industry, that will see the most successful evolve into data-driven digital enterprises.”

As UK SMEs, corporations and multinationals continue to meet the challenges of digitisation, the issue of security is more critical than ever. A connected world means more vulnerability and that presents challenges of its own. Malware is on the rise, phishing big data is always a danger and there is always the danger of cyber-attacks that can severely damage businesses.

Legislative changes to cyber security

Last year, an EU Directive regarding Security of Networks & Information Systems became UK law. It’s designed to increase resilience of information and network systems and improve overall security.

The directive says that businesses that operate within specific sectors, such as healthcare and transport should be identified as “operators of essential services” (OES). They must take appropriate security measures to manage network and information system risks.

James Turner, Managing Director of Turner Little Limited says: “The increasingly advanced digitisation across every business sector will be an improvement to our daily lives. However, the risks of malicious cyber-attacks are also increasing dramatically. It’s just as important that UK SMEs understand the risks and take appropriate measures to ensure the security of their data and business.

“When setting up a small businesses, cyber-security can often take a backseat in favour of other priorities, which might include maintaining cashflow, recruiting staff or winning new business. However, it’s vital that SMEs thoroughly understand the dangers that can affect their businesses too, regardless of the industry sector in which they operate.

“Stepping into an increasingly digital future is challenging for everyone, particularly at a time of such political and economic uncertainty. Committing to appropriate security standards will future-proof your business and ensure that you benefit from digital transformation.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Late payments report shows clear problems for small businesses in the UK

New research by Bacs Payment Schemes, part of the UK’s retail payments authority, Pay.UK, shows that late payments are causing huge problems for small businesses in the UK. Businesses are now facing an outstanding bill of £6.7 billion, just in payments they’re owed. This is up from £2.6 billion in 2017.

Small businesses in the UK are suffering

The cost of recovering the money that is overdue is now (on average) £9,000 per business. As well as the costs involved in actually recovering the money, more than 33% of SMEs in the UK are waiting two months beyond agreed payment terms to recoup it. This is almost double the number of businesses who reported the same problem in 2017.

Data from the UK Small Business Commissioner, in conjunction with Lloyds Banking Group agrees. Their research finds that there are regional variations with late payments, with small businesses in the north east wait an average of 40 days to receive payment, three days more than the UK average.

What is the recommendation for payment terms for small businesses in the UK?

Two years ago, the office of the Small Business Commissioner was launched by the Government to monitor payment practices for small businesses. Paul Uppal currently holds the commissioner position and has issued a recommendation that large businesses pay small business suppliers in no more than 30 days.

Cashflow challenges faced by small businesses not only hamper their growth and that of the overall economy. The Commissioner says: “Our initial findings indicate that almost two-thirds of payments are likely to be owed to smaller firms at any time. This is money that could be used to grow smaller businesses and generate tangible economic activity. Instead, it is stuck in large firms’ business ledgers doing nothing.”

Information on payment terms to small business suppliers has been collected by the commissioner for two years. The challenge for the Government now is to utilise the information in such a way that helps small businesses make useful decisions about which large firms they should do business with.

Regional variations across the UK – and the impact

The data also shows that 65% of large businesses in the UK pay smaller suppliers in an average of more than 30 days. 20% wait more than 50 days before paying small businesses they work with.

Small businesses in the Humber and Yorkshire areas are worst off, as they are forced to wait an average of 43 days for their bills to be settled. The second worst payment time can be seen in the East Midlands and Northern Ireland, where businesses are forced to wait an average of 41 days. London businesses are the best off, with businesses reporting payments at 34 days.

To deal with the increasing problem caused by late payment, Mr Uppal is recommending that a ‘traffic light’ system is introduced in order to clearly show which businesses are later payers. He says: “A traffic light system would be a simple and effective way of demonstrating which larger firms have structured their supply chain in such a way that it is more than an exchange of goods or services but also resembles part of their financing model.”

Lloyds Bank Commercial Banking’s representative, Ed Thurman, adds: “We have discovered wide variations in payments depending on where businesses are located. Two weeks can be critical in the financial well-being of a smaller business. Businesses could consider utilising invoice financing products to mitigate these challenges.”

James Turner, Managing Director of Turner Little Limited says: “The effect of late payments on small businesses can be devastating. It not only slows down the growth of their business, but also impacts on the daily lives and potential mental health of those dealing with the delays.

“More than 25% of SME owners who are facing late payments are forced to withhold payment to their own suppliers. Similarly, 28% report cutting their own income to keep the cashflow going for their business. With a 6% increase in the number of small businesses in the UK experiencing the problems of late payments, there is clearly a lot of work to be done. It’s important that business owners plan ahead as much as possible to mitigate the challenges posed by late payers.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

UK cracks down on offshore banking fraud

Since the end of January 2018, UK authorities have been able to use Unexplained Wealth Orders (UWO) to crack down on financial fraud. Incorporated into law as part of the Criminal Finances Act 2017, it’s a specific order issued by a British court to force someone to reveal the sources of their ‘unexplained wealth’. It’s part of a wider push by the Government to combat fraud within legacy and offshore banking.

Combating fraud in offshore banking fraud

The first UWO to be issued under s362A (1) has just been upheld in the High Court, after it was challenged by the respondent. The first UWO was for Mrs Zamira Hajiyeva, who was asked to explain her wealth. The 55year-old woman is married to a jailed banker who owns the Mill Ride Golf Club in Ascot and went to the High Court to try to keep her identity hidden. This was denied by the High Court.

The order demands a statement from the respondent to explain various aspects of their finances. First, they must set out the nature and extent of their interest in a property, explain how they obtained it, reveal whether it is held by trustees of a settlement and give any other information under the order. If the respondent doesn’t comply within a specific timeframe, then the property in questions is deemed recoverable. The order can only be issued by the Crown Prosecution Service, HM Revenue & Customs, the FCA or the National Crime Agency (NCA).

Offshore incorporated business

The property in the order was bought in 2009 by a company called Vicksburg Global Inc. The business was incorporated in the British Virgin Islands and bout the property for £11.5 million. Three years ago, the respondent told the Home Office in her application for ‘indefinite leave to remain’ that she is the beneficial owner of Vicksburg. This was later confirmed by the British Virgin Islands police.

Mr Hajiyeva is the respondent’s husband and was formerly the chairman of the International Bank of Azerbaijan. Between 2001 and 2015 when he resigned his position, he was on a salary of £54,000. Later in 2015, he was arrested and charged with abuse of office, large-scale fraud and embezzlement in connection with his former bank. In 2016, he was sentenced to 15 years in prison and forced to pay the bank about $39 million.

The NCA convinced the courts that both Mr Hajiyeva and his wife are PEPs (politically exposed persons). Under the European Union’s newest Money Laundering Directive, PEPs come under various categories, including supervisory bodies of enterprises owned by the state.

Respondent contested order

The respondent argued that the UWO shouldn’t apply on eight different grounds, including that her husband isn’t a PEP, and that the NCA misrepresented his role to the courts. However, Mr Justice Supperstone of the High Court rejected all of her arguments and said he was satisfied that the Bank of Azerbaijan is a “state-owned enterprise”.

This judgement led to the anonymity order surround Mrs Hajiyeva to lapse. The NCA further suspects that illegal cash funded the purchase of a property called Mill Ride, which was bought through an offshore company based in Guernsey. The Judge says that the respondent’s spending habits appeared to corroborate the fraud allegations against her husband. The court pointed to the £16.3 million that was spent by the defendant between 2006 and 2016 at Harrods in London.

The NCA has identified approximately £4.4 billion of suspicious money in the UK. It wants to use UWOs more rigorously to target potential sources and users of illegal money. The NCA’s Director of Economic Crime has said that he wants to target money-laundering through buying and selling of prime real estate in London. The overall aim is to reduce the appeal of the UK as the ideal destination for money laundering and fraud.

James Turner, Managing Director of Turner Little Limited says: “Although UWOs are a civil matter, only law enforcers can use these orders. It’s likely that they will become more common in the ongoing fight against financial fraud. At the moment, the proceeds of any unexplained wealth are confiscated in accordance with the Proceeds of Crime Act. It’s not clear, however, how law enforcement agencies will determine the origins of stolen money. It’s also not clear whether the agencies will be fighting to return the money to the victims.

“There is a fear that UWOs are too little, too late and that it will mean agencies respond more slowly to initial reports of fraud.

About Turner Little

Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

How to build a great sales team for a small business

There are many exciting and daunting challenges for any new and growing company. One of these challenges is how to build a great sales team? As this will form the backbone for your future success, it’s important to get it right.

There are four keys to success:

  1. Choose the right people
  2. Learn to perform
  3. Use the best technology
  4. Focus on the right activities

Here is how to do it:

Hiring the best people

To scale your new or growing business, you must attract the right talent to your team. The first step should be clarifying why you want to recruit for specific roles. An incorrect hire can be hugely costly when you’re starting out, or for any established SME. To get it right, you should review the current needs for your business and identify any gaps that are ready for expansion.

When you have a concise job description in writing, then it’s time to reach out to potential candidates. Carry out your searches strategically and be clear what you are prepared to compromise on for the right person.

It’s important to remain open-minded when it comes to background and experience; the candidate must be relevant. No matter how personable they appear, someone with ten years in manufacturing sales will probably not match the needs of a property company, for example.

The final stage is to work out a clearly defined interview process that includes the values you want from the candidate. Having a list of clear behaviours that represent your company’s culture and aspirations will help you score interview candidates in a useful way. Whether you’re looking for passion and aspiration or experience and an inquisitive instinct, understanding what you actually need will help you find the best person. And in a sales candidate, you want to see a good track record and evidence of success.

When you have a candidate that fits, make an offer and see how they negotiate. A good salesperson will try to get the best offer possible. If they can convince you to alter your salary and commission stricture, then this is a clear indication they are right for your sales team.

Your sales team must perform. It’s a key function for every business. No matter how good your product or service, if you can’t communicate this to potential customers then the business with fail. To succeed, your small business must sell itself and its products to a high standard.

Deciding who to hire for your sales team, which systems to use and when to scale up are all key considerations for business owners.

Take advantage of technology

When you have the team in place, you must provide the right tools to allow them to succeed. Many SMEs neglect this step, and salespeople are expected to achieve the impossible. Research by YouGov, covering 1,000 sales professionals in the UK, has found that 25% rely on pen and paper to keep track of their sales pipeline. This is an incredible number, given the sheer number of digital tools freely available to salespeople in 2018.

Sales tracking is incredibly important to effectively manage sales. To scale up as a business, it’s vital to be able to optimise and refine your sales processes as you go. This is a constant process and needs technology to work well. Build your team using a high-quality CRM (Customer Relationship Platform) platform from day one. This will allow them to track metrics and understand where and how they can change their process for better results.

Focus on ‘winnable’ tasks

A major factor in building a successful team is focusing on the right sales activities. The best route to success is by focusing on quality rather than quantity when it comes to chasing leads and closing sales.

It doesn’t matter how good the salesperson is, some deals are never going to close. Spending too much time chasing the impossible wastes other opportunities. Sales teams should be trained to understand how to spot low-quality leads and drop them in favour of those than can be converted.

Remember that rigidly focusing on end targets rather than the steps that could be taken to move deals on, can be counter-productive.

James Turner, Managing Director of Turner Little Limited said: “A good sales team really matters. Research shows that SMEs in the UK are losing an average of £15,000 every month due to poor quality sales processes. This must change if you want your small business to smash through growth targets and become successful.

“The market in every sector in increasingly competitive. Teams are increasingly needing to secure both national and international sales, for example. By allowing inaccurate or unfocused sales activity to slide, your business could be losing substantial amounts of money on a regular basis.

“Invest in decent technology and tools to allow your sales team to do their job. The importance of this can’t be underestimated. A well maintained and productive sales team shouldn’t be something business owners take for granted. It should be nurtured, encouraged and supported.

About Turner Little

Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Turner Little

Social Media Is Key To Launching A Successful Product

Turner Little discusses new data, which indicates that the majority of marketers believe that social media is the most effective tool available, when it comes to promoting new products to consumers.

Launching products

There are a range of tasks you must complete when launching a new product. You should protect the associated intellectual property, through vehicles such as trademarks, to gain an edge against your market competitors. As specialists in the area, the Turner Little can help you register trademarks.

You also need to market the product to consumers. After conducting market research, you need to determine which platforms you will use to promote your product. Consumers are increasingly engaging with businesses online, so digital channels should form a key component of your firm’s marketing plan. Considering the fact that a third of Britons are influenced by social media engagement every month, you would be advised to use these channels, to reach a vast audience.

Social media marketing

Research found that 74% of respondents believe that social media is key to promoting new products successfully.

When asked about the most notable benefit of social media, 46% cited its potential to spread awareness of a new product among consumers. Meanwhile, just over two thirds (64%) of those questioned admitted that when creating campaigns they utilise social listening, ensuring that they can monitor online conversations surrounding their product, so they can address consumer concerns.

Social media has become the most important way to generate buzz for new products and services before they appear. Shareable content and social engagement allow brands to create a groundswell of pre-launch interest in a way no other channel can match.

Successful launch

The research also shed light on other marketing trends. According to 72% of those polled, the creative ideas behind launch initiatives have become braver over the past five years. Meanwhile, 81% said that since 2011, the time between the conception of a marketing idea and the launch of a product has shortened, with 70% admitting that they can now complete this process within six months.

Social media marketing is popular for launching products because it allows marketers to executive brave ideas quickly, while reaching a vast audience. In order to execute social media marketing effectively, you need to have a strong company website, which consumers can visit from your social profiles to find out more about your firm. Here at Turner Little, we provide the internet services, such as website development, that you need to ensure your social media marketing efforts prove lucrative.

Turner Little

Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.

How to Launch Your Small Business in Another Country

By launching your firm in another country, you could expand into a new market, potentially increasing your customer base. But this can be daunting, especially as you will be unfamiliar with its customs and business laws. Turner Little explains how to launch your small business in another country.

Choose your country carefully 

It is inadvisable to choose your new market, without conducting extensive research beforehand. Ask yourself, where does the greatest opportunity lie for your business? It is critical that you examine factors such as language, current market behaviours, business legislation and certification, as well as competing firms, to ensure you select the most favourable market for your firm.

Survey your consumers

Your business model may be unique, making launching your firm in a new country especially advantageous, due to lack of competition. However, you must first ask yourself, whether there is a target consumer base, in a country which is unfamiliar with the products or services that you sell. Here, it is advisable to conduct market research and focus groups in your chosen territory.

You can gather consumer data quickly and conveniently by utilising online research tools like Survey Monkey. With this tool, you can communicate with different consumer groups in your new market from anywhere in the world, as users have access to specific customer profiles. You can also utilise the services of marketing groups which focus on your field, but this can be expensive. The advantage of this approach, however, is that these groups are operated by qualified individuals, who can avoid steering the group towards one specific outcome, supplying you with unbiased consumer data.

Consider your distributor

If you are not familiar with the primary language of your new market, you will need to partner with a local distributor. Contact non-competing firms in your industry, to determine which distributors they use. Ensure you get references for the distributor, to determine whether they provide first-rate services. Remember to sign a sole agreement with distributors, rather than one which guarantees exclusivity. This way, if legal issues arise, you can provide your goods and services directly to retailers.

Research regulation

It is critical that you research business regulations in your new market, so you can determine the administrative costs of expansion. With this strategy, you will be able to ensure that your firm meets all the legal requirements to trade within your new country and has the certificates major retailers will need to sell your products and services to consumers. This applies to your manufacturer, as some retailers will require them undergo ethical standards audits, to ensure they conform to regulations.

We should note that if you are planning to expand into an EU country, Brexit may have an impact on your plans. For example, Brexit could change trademark protection, requiring you to register trademarks for new products in both the UK and the EU, once the UK’s removal process is complete. As experts in this field, Turner Little can advise you on trademark registration matters internationally.

Alter your packaging

You may also have to create new packaging when expanding into another nation. Your brand name could be popular in your own market, for example, but boast completely different connotations in another, requiring you to change your name and thus develop new packaging, in order to appeal to your new consumers. If you decide to adopt a new name, you will need to trademark it within the country, to protect your brand from competitors and this is another area where we can help.

What will you charge?

Before moving your firm into another market, ask yourself, what will you charge? What may seem a fair price to your existing consumers, may be outrageous to your new customers, so by using your existing price models, you could outprice your goods, losing custom. Here it is key to research what your competitors within your new country are charging. You should also factor charges such as duty costs, which can vary from nation to nation, into your pricing, to ensure you accrue a decent profit.

Get online

You can reduce the costs of expanding your company into another market, by setting up an online presence within the country. It is advisable develop an international website with one domain, so you can handle domestic and foreign business conveniently. We supply the internet services you need, such as domain name registration, to conduct business online anywhere in the world.

Turner Little

Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.