What are angel investors looking for from small businesses?

Securing funding is a priority for all start-ups, entrepreneurs and small businesses. Without cashflow, it doesn’t matter how promising a business idea is. And one channel many entrepreneurs pursue for funding are angel investors.

How do angel investors work?

An angel investor is someone who uses their own personal money to invest in a small business, one that they personally consider worthwhile. They will choose businesses that have growth potential. Usually, they provide that business with equity finance and receive shares of the business in return – think a ‘Dragon’s Den’ style transaction.

Angel investors use their own experience, skills and knowledge to decide who to work with. They don’t rely on an external agent or advisor, it’s about them making gut decisions based on face-to-face meetings, or via online platforms.

A key differentiator between receiving funding from a bank and an angel investor is that you will also benefit from the angel investors contacts, experience and knowledge. Angel investors bring a lot more to the table that just funding, they can bring all kinds of networking opportunities to help the small business grow and succeed. Some choose to act passively as part of a group of investors or be the lead investor on a deal.

How can small businesses find an angel investor?

Networking is key here. The most productive way to approach an angel investor is through an introduction, either from a contact, client, other entrepreneur or even a friend. Angel investors are approached by many people with a lot of different pitches, so it can be difficult to get an ‘in’.

Events are also a possible avenue, with groups such as the UK Business Angels Association (UKBAA) regularly hosting investor forums. These can present opportunities to meet with business leaders, other entrepreneurs and potential investors. They also host regional hubs offering higher visibility of investors to entrepreneurs.

What interests an angel investor?

Investors want to understand how you are solving a problem or challenge present in society or a specific market. They will want to see market research that proves your start-up or project meets an actual need. It also must bring something disruptive or tangibly new to the market.

They also what to know that your business can be scaled, how you plan to grow, how you expect to make money and whether you’ve tested prototypes on customers. You must be able to prove there is real interest in your project. It’s not enough to turn up with an idea and expect funding, rather a strong business case must be crafted.

As well as short-term scalability, angel investors want to know about international possibilities. How will your start-up eventually fit in on a global stage?

Is there a limit on how much they can invest?

While some angel investors choose to do so alone, it’s more common to invest alongside others through syndication. The average angel investment from an individual is about £25,000. Syndicates provide approximately £190,000 on average.

Bigger SMEs on the cusp of international expansion naturally require more investment than a start-up. Investors tailor support to fit the project, something that is usually not possible from traditional lenders. Investors and the start-ups involved benefit from this flexibility.

Investing in this way usually doesn’t see a return or a possible exit for at least eight years. How long angel investors choose to remain part of the business again depends on individual circumstances. They rely on guidance from people who have long-term experience in building businesses to make decisions, as well as their own in-depth knowledge of the sector.

Start-up investment is increasing in the UK

Start-up investment is more popular and accessible in the UK than ever before. There are enough successful start-ups (for example, ASOS, JustEat and Zoopla) providing a clear framework for investors to make a decision. In addition, there are increasing policies and legislative changes implemented by various Governments to support this sector.

The biggest impact has come from the Enterprise Investment Scheme (EIS) in the late 1990s, and the Seed Enterprise Investment Scheme (SEIS), implemented in 2012. Both reward investors with generous tax breaks. For example, under SEIS, it’s possible to gain up to 72.5% of the investment as tax relief.

James Turner, Managing Director of Turner Little Limited, says: “These kinds of tax relief schemes have been exceptionally popular with private and angel investors. Each year. They invest more than £1.5 billion into high-growth opportunities using EIS and SEIS. This is why we are seeing more angel investors wanting to become involved at the early stages of start-ups.

“Angel networks are excellent tools for investors as they present various opportunities through online platforms and pitching events. Tech start-ups in particular are seeing results from angel investors, and it offers a financing opportunity that is more flexible than traditional banks.

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.

Should small businesses focus on people or technology?

What’s more important for your small business? Is it your people or the technology you invest in? As the business sector transitions into a totally digital world, some entrepreneurs and small business owners are focusing more on tech than people.

New research from Yorkshire Bank’s Expect More report, shows that nearly half of UK SME owners believe technology is more important to their business than people.

Why is technology important to small businesses?

Expect More covers 2,000 small business owners, SME entrepreneurs and start-up owners from ten major UK cities.

More than 46% of small business owners say they think tech is more important to their business than people, with the highest number in London (56%). And it seems these tech-loving SME owners may be on the right track.

Successful, high-growth businesses are more likely to be driven by technology. The report shows that almost three-quarters of entrepreneurs find tech is the key reason for business growth. Interestingly, these high-growth businesses driven by tech are more aware of the environmental impact of their work. Almost 60% say their environmental impact is extremely important, compared with an average 44%.

The link between technology and funding

Tech also secures more funding for SMEs. More than 35% of small businesses led by technology find it relatively easy to land growth funding. This is significant when compared with those outside of the tech field, with just 19% of other businesses reporting the same.

This is partly due to the fact that tech-led SMEs are making more attempts to secure more funding than businesses in other sectors. The study finds that 90% tech orientated businesses attempted to access funding, compared to an average of 80%. Whether this is because there are more opportunities available, or whether tech businesses are being more proactive remains unclear.

James Turner, Managing Director of Turner Little Limited, says: “Technology is the biggest disruptor to our daily lives and to businesses across every sector. Advances in tech are revolutionising the way we live and work. This is opening up new markets to UK SMEs.

“E-commerce has allowed access to a sector that wasn’t previously available to small businesses, and many start-ups are tech driven for this reason. There are opportunities for tech-based start-ups that simply don’t exist for more traditional small businesses, particularly as the face of retail is changing so much. As e-commerce and traditional retail continue to adapt to each other, UK SMEs are taking advantage of this new channel of opportunity.

“It’s unsurprising, therefore, that tech-based small businesses are securing more funding and reporting higher growth levels. The SME sector has adopted a massive range of tech, ranging from social media and digital marketing to automation and artificial intelligence (AI). The introduction of 5G will continue to push tech boundaries and open up more connections, fuelling development in this area.

“However, people remain vital to the success of small businesses, and this shouldn’t be forgotten in the drive to adopt new technology. The personal element is the differentiator between businesses and can be the difference between success and failure. The importance of effective communication between business and client or customer should not be taken for granted. UK SMEs must strike a balance between people and technology as their focus.”

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.

New legislation to shake up offshore banking in Cayman Islands

The Government of the Cayman Islands unveiled three legal bills that will fundamentally alter its offshore banking legislation. The move comes just weeks before the European Union’s deadline of 31 December, after which the EU will release its latest blacklist.

A deadline has been implemented by the EU for all offshore financial centres to address measures over perceived ‘unfair tax practices’ in order to avoid the blacklist.

Offshore banking legislation changes

New legislation includes the International Tax Co-operation (Economic Substance) Bill as well as alterations to current company laws. All three legal changes must be debated and passed before the end of 2018 and will lead to a major shake-up in the offshore sector.

The changes will mean that offshore companies incorporated in the Cayman Islands will have to prove that they are carrying out tangible work there. If they can’t prove this or that they have some form of solid, economic presence, then they won’t be able to “satisfy the economic substance test in relation to any relevant activity carried on by that relevant entity”, as stated in the new bill.

Officials from the financial services ministry say that an “in-depth consultation” went ahead with commerce regulators and stakeholders, the Cayman Island’s financial industry, the European Union and the global Organisation for Economic Co-operation and Development (OECD) before the laws were completed. They say: “Since January 2018, many representatives from more than 15 financial services and commerce associations, as well as government stakeholders outside of the Ministry of Financial Services, have participated in the consultation. This breadth allowed government to ensure that our legislation is appropriate for both financial services, and local business.”

International financial centre

Offshore centres operate as global financial centres, which inevitably means that legislative changes take a lot of tine to be published. The new laws, and changes to current laws, are built on the Forum on Harmful Tax Practices (FHTP) by the OECD. This comes under the Base Erosion and Profit Shifting (BEPS) Inclusive Framework, that was joined by the Cayman Islands in 2017.

This framework outlines the global standards for tax structures developed to attract profit in jurisdictions where they don’t conduct real economic activities. The forum in turn supports the framework, by reviewing regimes that give better tax rates to these structures, as this can negatively affect tax collection in other jurisdictions.

European Union blacklisting

The EU also use the framework to identify harmful tax practices within jurisdictions it considers ‘non-cooperative’. As the Cayman Islands intend to implement the new laws by the deadline of 31 December, they will avoid being blacklisted by the EU.

Cayman has never been on the EU’s list of ‘non-compliant’ jurisdictions, however it is on a watchlist in terms of addressing economic substance. Officials say that the EU’s concerns “need to be addressed in order to correct the perception that our tax system provides an unfair tax advantage to any company operating in our jurisdiction.”

James Turner, Managing Director of Turner Little Limited says: “These kinds of legal changes will effectively usher in a new chapter for the offshore sector. Exempt companies will be allowed to do business locally but will have to follow the same rules as local businesses do. This will eliminate mailbox companies, who have just used the address in order to gain tax exemptions.

“The FHTP now covers more than 120 countries within its range, with the ultimate aim of making tax issues globally compliant. We are witnessing a real evolution of global standards within financial services. The changes for the Cayman Islands will be seen next year, as currently there are more than 106,000 exempt companies with barely any economic presence in the jurisdiction. It will be interesting to see how this change will affect the offshore sector and the wider economic impact it will have as we move towards a true global standard.”

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.

Report shows why millennial women are choosing to start a company

A report published earlier this year by US-based small business agency SCORE uncovers the reasons why women from different demographics start a company. The 2018 Megaphone of Main Street: Women’s Entrepreneurship Report.

Why start a company?

The report reveals that 27.8% of millennial (generally defined as those born between 1980 and 2000) women start businesses when they spot an opportunity. A similar number of the older generation, commonly called baby boomers, gave a different reason. Just over 28% of baby boomers (born between 1946 and 1964) reported starting a company due to financial necessity. And women from Generation X (1961-1980) cited family consideration as the main reason for taking the leap and starting their own business.

Results were derived from an online survey sent out to 280,956 respondents across many different sectors. The results highlight the diversity of small business owners in the US and shows how entrepreneurs thrive across different industries. It’s the ninth annual survey covering this data, issued by PricewaterhouseCoopers. More than 25,100 people responded to the survey, out of which 12,091 were female entrepreneurs.

Women in small business representation

Women represent 39% of all small companies in the US, and in the UK the number is growing at a faster rate than ever before. Analysing why women decide to go into business for themselves makes it possible to increase the number representing small companies.

Questions in the survey centred around questions to determine how businesses owned by women compare in terms of success with male-owned companies. Attempting to determine whether women face different obstacles when seeking finance, and how mentorship appears to women as opposed to men.

Sectors headed by women

Female business owners are more likely to develop a business offering professional services (29.4%). The next most common for female entrepreneurs is healthcare services at 14.1%, retail at 12.5%, educational services at just under 9% and hospitality/restaurant and food at 8.2%.

Statistics also show that there is no discernible difference in success rates between companies owned by men and women. Approximately an equal number of businesses owned by women and men are sustaining their size (32%), expanding moderately (29%), increasing revenue (28%) or expanding aggressively (5% men, 7% women). On the flipside, approximately the same number of businesses owned by men and women are struggling (33% and 34% respectively).

Financing differences between male and female owned companies

Just under a third of women-owned businesses sought out financing over the past 12 months, compared with a higher percentage of 28 for male owned businesses. The impact of mentors also shows roughly the same influence over businesses regardless of which gender owns it.

James Turner, Managing Director of Turner Little Limited says: “Both in the US and the UK there are an increasing number of small businesses owned by women. Whether they are choosing to start their own company because they see a great opportunity or need to increase earnings to look after their families, the net result is the same – more SMEs started and run by women.

“While the SCORE report is US-specific, it shows that businesses owned by women are just as successful as those owned by men, and this is a trend we can expect to see at home too. With equal levels of revenue growth and business success, along with higher levels of start-ups, many independent measures show they are equally matched. However, there is still a lot of work to close the gender gap particularly in terms of hiring practices, revenue and financing.

“In the UK we can expect to see a greater number of small businesses from both genders over the next few years, as economic necessity drives opportunity for many. Accessible technology and entrepreneurial support from the Government should shore up a sector that is increasingly forming the backbone of the economy.”

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 off-market is the not-so-secret key to buying a luxury home in the UK

Over the last two years, there has been a sharp increase in wealthy buyers in London selling and buying off-market. Estate agent Hamptons International released research that shows off-market sales account for 25% of sales over £1 million in London. This is up from 14% just four years ago and shows how much off-market has become part of the asset protection strategies used by wealthy investors and buyers in the UK.

One in four homeowners are choosing to sell their property without advertising online or in estate agent literature. Behind this increase is widespread concern about the contracting market. Increasingly, the best way for wealthy buyers to find the ideal luxury property is behind closed doors.

Asset protection strategies

Brexit and recent legislative changes have led house prices and transactions to fall since 2016, leaving the sector in disarray. Wealthy sellers and buyers have lost clarity on realistic pricing and demand, thanks to the contrasting media reports and an uncertain economy. Off-market selling is part of the asset protection strategies used by this level of buyer and seller.

Rather than taking the risk of a public launch of their sale, sellers are asking agents to discretely approach potential buyers. This allows them to get a feel for a price point without publicly having to drop the price and influence perception of their luxury property.

Johnny Morris, Head of Research at Hamptons International, says: “If you make your home available to buy quietly you can see if you can achieve the price you want without having a public record. Part of this is about sellers wanting to keep their options open.”

Off-market affects luxury market

The off-market share across the country also increased from 14% in 2014 to 20% in 2018. Unsurprisingly, the figures also show that these off-market sales overwhelmingly concern the top end of the property market.

In London, just 0.9% of off-market sales concerned properties priced at £500,000 or less over the past year. At the upper end of the scale, 27% of all off-market sales were for properties worth £2 million or more. Wealthy homeowners are driven to sell privately to test out the potential value of their property, and it assuages the traditional worries of the wealthy – security and privacy.

If a property doesn’t sell publicly, then owners can remove it from the market before later targeting selected parties at a lower price. This avoids the new targets from seeing the previous price online.

Supply and demand driving off-market sales

Off-market selling is even more attractive to the super-rich. For properties worth over £10 million, the pool of potential buyers drops significantly. Agents typically know who may have an interest, or who is looking for a specific property.

Selling in this way makes an expensive home accessible only to those who could realistically afford it and are serious about making offers. Director at buying agent Huntly Hooper, Oliver Hooper, says that there is a “massive imbalance” of supply and demand in the high-end property market in central London. This has led to a clear trend among transactions completed by clients in London. He says: “In 2016, about 60% of my deals were off-market. For the past two years, the proportion has been 100%.”

Keeping identities secret

The secrecy of off-market sales can run deep. For example, when a wealthy Middle Eastern woman wanted to find a property in London, estate agent Carter Jonas was able to recommend a period home priced at more than £50 million.

While the property had never been publicly for sale, with no for-sale sign or listing with an estate agent, its owners had simply told Carter Jonas that they wanted to sell. The buyer ended up going through a purchase process using a company structure that meant even her identity was kept secret.

James Turner, Managing Director of Turner Little Limited says: “Prices and access to serious buyers are important factors for off-plan sellers and buyers, but their most important priority is privacy. This is becoming more difficult to maintain since both our Government and those of other countries have stepped up measures to fight money laundering in the real estate sector.

“The Government has signalled its wish for a tougher stance on people who use property to hide the proceeds of crime. This was shown by the reveal in October of the wife of an ex-chairman of an Azerbaijan bank as the first unexplained wealth order after she acquired assets that include a Knightsbridge property worth £11.5 million. These orders oblige the subject to explain to the National Crime Agency how they can afford the assets, and if they can’t, their assets can be seized.

“Measures like this won’t stop off-market sales for the wealthy, but they may cause some buyers concern. With an increasing focus on the wealth gap in the UK during this uncertain economic period, the uber-rich often want to hide their massive transactions from a public that could be hostile.”

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.

Research shows UK small businesses are ahead on AI and automation

Small businesses are faster at automating and implementing AI into business practices, according to research from the Chartered Institute of Management Accountants (CIMA).

Artificial Intelligence (AI) and automation of services and processes are becoming firmly entrenched in the UK business world. The sector is experiencing the first phase of the most important tech revolution since the start of the Internet. Some experts are heralding it the beginning of the Fourth Industrial Revolution.

This means that AI and automation will change every aspect of business over the next few years. This includes UK corporate bank accounts, financial services, who (or what) carries out certain tasks, customer service bots. It means streamlining and speeding up behind-the-scenes processes, to deliver faster service, using AI and machine learning. And it’s the businesses that are first off the starting blocks in terms of innovation that will take the lion’s share of the market.

Small businesses leading – UK corporate bank accounts

CIMA’s research shows that small businesses are leading this race. Compared with bigger companies, 18% say they’ve already implemented AI and automation in parts of their business. A lower 15% of mid-sized companies say they have taken similar steps. This is despite 26% of mid-sized companies saying that they could automate most of their operations, compared with 13% of small businesses.

These figures suggest that, although mid-sized companies have more room to automate processes, small businesses are more flexible to doing so. This could be partly due to the legacy systems that mid or large sized businesses are tied to, making it more expensive and difficult to implement new systems.

Adoption levels low

Real-life adoption of AI and automation is still quite low across all company sizes. This could be investors holding back due to the ongoing economic uncertainty the UK is experiencing because of Brexit. It can seem daunting to go ‘all in’ on brand new technologies. The perception is often that machine learning and AI are still at very early stages, and that there will be too much risk in investment.

However, investment right now in this sector will pay off long-term. There is no doubt that moving quickly to automate services and adopt AI tech will give businesses an advantage. And, while small and medium businesses can’t match the massive levels of investment necessary to develop overarching new tech, such as drones and automated cars, there are other steps to take.

Implementing AI and machine learning tools on a customer service website, for example, can reduce costs and improve service. For SMEs considering adopting new tech, the most important consideration is ensuring their workforce are upskilled. If the workforce can’t maximise the use of the new tech, then it will be a waste of money and time.

People are key to automation

There is a lack of understanding regarding how workers see their future in terms of AI and automation. For example, just 38% of workers surveyed think that technological innovations will affect their roles, and 26% have not even thought about it.

In contrast, 62% said that aspects of their businesses could be automated by 2023. While the interest level is high at investment and development level, it seems that the workforce is not given the same levels of focus.

New technology is altering workers’ roles within businesses, by shifting their focus into areas that technology can’t reach. For example, while machine learning can hugely speed up processes and reduce man hours needed to complete projects, people are still necessary to implement empathy, creativity and judgement. Despite this shift in focus, CIMA’s research shows that 25% of employees have had no in-work training over the last 12 months.

James Turner, Managing Director of Turner Little Limited says: “We are on the cusp of a technological revolution that could change the way the business world works. SMEs that take notice of the rapidly evolving AI and automation tech will reap the rewards that are there for the taking. And, while investment and development are obviously vital to making these changes, businesses must train their employees too.

“A change in attitude towards training and learning is needed across all businesses. Small businesses have the advantage of flexibility and not being tied to deeply embedded legacy processes, but they must include all employees to properly benefit from the advantages this technology could bring.

“It is a necessary step for businesses to ensure their workforce is given the requisite training in order to future proof their skills. While employees should also be proactive and take ownership of their careers, businesses must provide the tools and training. Without this, they could fall behind the competition.”

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.

Rental payment data included on credit reports for first time

Experian has announced that it now includes rental payments in its credit reports. This innovative change could make it simpler for renters to get onto the property ladder.

The changes affect 1.2 million tenants who will now see their rent considered on their Experian credit reports. Tenants could find it easier to buy property, access mortgages and secure finance deals. If you’ve ever wondered how to improve your credit score, this step change by Experian could help.

How to improve your credit score – bridging the credit score gap

Tenants who consistently pay rent in a timely fashion and have joined The Rental Exchange Scheme can use this information to improve their credit score and potentially access better credit card, loan and mortgage deals.

Millions of tenants pay out tens of thousands of pounds to rent property every year but struggle to prove that they could pay a monthly mortgage or pay back a personal loan. It’s this discrepancy that Experian is seeking to tackle. This ‘Catch-22’ scenario of paying out a lot of money but not being able to prove mortgage-worthy finances prompted 150,000 fed-up renters to sign a petition in 2017.

The petition is titled: Make paying rent enough proof that you are able meet mortgage repayments. Although it was cut short due to the snap General Election, it was debated by Parliament. And while the Government pushed the decision back onto lenders, The Rental Exchange is tackling the problem head on.

Data integrated into statutory report

More than 150 local authorities, letting agents and social housing providers now report data into The Rental Exchange. Developed by the Big Issue Invest (owned by the Big Issue Group) and Experian, the Exchange can also be used by private renters via different routes.

Tenants who have opted in can see their rent payments on the Credit Expert tool provided by Experian, as well as on their free statutory credit report. It shows their name, address and monthly rent. It’s reported in a very similar way to mortgage payments and is updated every month to show whether the tenant paid on time.

The new data should help tenants build a better credit history, showing a history of regular payments. In turn, this will help them pass credit checks. According to Experian, adding rental information onto credit reports will also help tenants prove their identity online. They anticipate this figure will leap from 39% to 84%, massively improving the kinds of financial services they can access.

Thin-file information

Research by Experian from March 2018, shows that approximately four million UK adults have ‘thin-file’ information. This means they essentially have very little or no information that can be accessed by lenders to check their credit-worthiness. It’s likely that these applicants will fail to secure the best value loans, credit cards or mortgages.

The changes should create a more level playing field for accessing credit. Managing Director of The Big Issue Group, John Montague, says: “We recognised that people in poverty were routinely penalised. The Rental Exchange has succeeded in making more inclusive data available to credit service providers, and it is this data which has the potential to reduce levels of financial and digital exclusion and improve the circumstances of some of the poorest in our society.”

Improving credit report scores

Many lenders are interested in including rental data into their decision making processes for giving out credit. However, it’s not yet clear which firms have pledged support.

For the time being, although lenders can access credit reports for tenants who have opted in to the new scheme, the data won’t yet affect credit scores. This is because it’s not yet certain how lenders will use the information in their decision-making processes. Experian say that they will update relevant credit scores when it receives enough feedback from lenders to explain how they’re using the information.

There isn’t enough evidence as yet to talk specifics in terms of positive or negative impact. However, it’s certain that a well-maintained, regularly paid rental account should add strength to the user’s credit history. Experian estimates that 79% of tenants would see an improved credit score should lenders utilise rental data.

What about other credit agencies?

Lenders can, of course, use any of the three available credit reference agencies to credit score applicants for loans and financial services. Experian is the first agency to include rental data in its free statutory and paid-for credit reports, but others also have plans to do so.

TransUnion (formerly Callcredit) says: “We already take a broad range of consumer financial information into consideration and are investigating and looking at additional sources of data to help enrich a consumer’s credit report. Rental is one payment type in a wider set of non-discretionary financial commitments to potentially adopt, such as council tax, utilities, insurance and telecoms.”

Rhona Parry is Vice President of External Affairs for Europe at Equifax. She says: “The cost of living is a major issue for renters and they often pay more for credit than people with mortgages just because they cannot easily prove to lenders that they pay their rent. Equifax is working hard with landlords and lenders to find safe, easy ways for renters to share their data and access better financial products at better prices.”

James Turner, Managing Director of Turner Little Limited says: “If you’re wondering how to improve your credit score, then measures such as the Exchange by Experian are encouraging. If you’re a council or social housing renting tenant, then ask your landlord to give The Rental Exchange your payment data. For those in private rentals managed by a letting agent, it could be possible to self-report through an Experian partner.

“If you’re renting and you want to buy property in the future, signing up to a way of tracking your rental payments is undoubtedly a good idea. While the information isn’t yet included in your credit file, it’s likely that it will be. Either way, it will help the lender make an informed decision about whether you can pay back a loan or mortgage.

“We can expect to see the other agencies follow suit over the next few years, and for lenders to be clear about how they will incorporate this information into credit files. There are more people renting in the UK than ever before, and it’s vital that lenders begin to treat both homeowners and renters equally when it comes to granting loans and financial services.”

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.

What does the 2018 Budget mean for small businesses in the UK?

As the Chancellor unveiled the 2018 Autumn Budget, the final one before Brexit in March 2019, there were various nods towards small businesses in the UK. These range from personal tax allowance increases to business rate help.

Mr Hammond began his opening speech saying that it would be “a Budget for hardworking families… the strivers, the grafters and the carers who are the backbone of our economy.”

Personal Tax Allowance

This is the amount of money workers can take home without paying tax on it. Any amount above the Personal Tax Allowance rate is taxed. The rate is variable, depending on the total income of the person.

The Budget raises Personal Tax Allowance to £12,500 for basic rate tax payers, and to £50,000 for high rate tax payers next year. At the moment, the standard personal allowance is £11,850.

Cash for the UK’s High Streets

For small business owners operating from a bricks and mortar retail space, the Budget introduces the Future High Streets Fund. This consists of £675 million of funding for local councils to apply for. The idea is that it will go towards planning for the future of the High Streets, which are increasingly empty.

Mr Hammond specifically said that it should be used for converting commercial premises into residential properties. This, he claims, would increase footfall and counter the rise of online shopping.

Savings for independent businesses

Up to £8,000 of savings will be introduced for the very small businesses, according to Mr Hammond. He says that he will cut business rates for businesses with a rateable value of £51,000 and under. This will mean their bills will be slashed by a third during the next two years.

Digital service tax

There were worries before the Budget was announced that an alleged new digital services tax would negatively affect small businesses. This was a particular concern for online retailers. However, the announcement only applies to global businesses that generate a massive amount of sales. It’s not yet certain whether this could affect small businesses that sell through large retailers, such as eBay and Amazon.

Green taxes

Just one tax was introduced in the Budget to cover environmental concerns. Companies that manufacture plastic made from less than 30% recycled material will face a charge. This could affect small businesses, depending on their product and sector.

Other changes that could impact small businesses

The main takeaways from the Budget that will affect small business are covered above. However, small business owners should also be aware of the following:

  1. The annual investment allowance increases from £200,000 to £1 million for two years.
  2. Small businesses only have to contribute 5% to the apprenticeship levy.
  3. All toilets available to the public will mean new business rate relief, whether they are privately or publicly owned.
  4. England’s roads will receive a £30 billion relief package for repairs to potholes and bridges.
  5. Fuel duty will continue to be frozen. This will save van drivers about £2,500 and car drivers about £1,000.
  6. No changes to the VAT threshold.
  7. National living wage will increase to £8.21.
  8. Duties on cider, beer and spirits will be frozen.

James Turner, Managing Director of Turner Little Limited says: “Taken at face value, it appears that the Government sees the importance of small businesses thriving. They form the backbone of the UK’s economy, and as we continue through uncertain economic and political times, I hope that this support also continues.

“It’s important to understand the implications of the 2018 Autumn Budget, of course. However, it’s also important to note that the Chancellor himself announced that should the UK leave the EU without a deal, then this Budget will be scrapped. The major announcement in the Budget is the so-called “end to austerity”, but if negotiations continue to stall, this won’t be the case.

“As the business world waits for the Government to provide clarity on the exit deal, it’s becoming more likely that we will all face a no deal scenario. In which case, we will be waiting for a completely different set of Budget announcements.”

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.

The challenges of starting a small business – and how to avoid them

With some business leaders in the UK demanding a People’s Vote or a second Referendum for leaving the EU, small businesses find themselves arguably operating within the toughest economic circumstances for decades.

The effect Brexit will have on small businesses, or indeed any businesses, is still unknown. This is despite the fact that the 2018 Budget has been released and the Government is in the final stages of the negotiating process. Whatever happens with Brexit, starting a small business is a challenge. It’s also a key moment in any business person’s life, and an opportunity to turn a passion into a living.

High fail rate

Figures from the Office of National Statistics show that the number of UK businesses that started between 2015 and 2016 went up from 383,000 to 414,000. The figures also show that the number of these businesses that failed rose from 283,000 to 328,000.

So, while a high percentage of people are ready to start a small business, the number of those that fail shows a need to get the basics right. What are the challenges small business owners can expect to face and how can they avoid failure?

Creating a solid business plan

Every business, no matter their size or longevity, must have a comprehensive, workable business plan. It should cover market research, realistic and viable financial forecasts, marketing details and the benchmarks needed to measure progress.

A business plan must be a document that is constantly revised and updated. It is not a static outline that is only looked at to secure funding, for example. It should be a workable document, that accompanies the small business owner through the rest of the challenges they will face in the first years of their new company.

Understanding the legalities of starting a small business

Many entrepreneurs are all about the excitement of starting their new business. And while, the legal nitty gritty isn’t necessarily the most interesting part of the process, nevertheless it’s vital.

For those operating as a sole trader, it can be as simple as ensuring they are registered with HMRC. However, many will choose to form a limited company and need to understand payroll and corporation tax.

Forgetting about the competition

Ignoring competition is a big mistake. Business owners must be in the loop in terms of their competitors. Proper market research and competitor analysis should form part of the ongoing updates to the business plan.

It’s important to understand that this isn’t a one-off job, and needs time and resources allocated to it. By keeping fully informed about competitor activity, small business owners can get ahead. Find out what they’re doing well, what and how they’re selling and any media presence they have secured. This helps to ascertain niche markets or complementary services that can be offered by the start-up.

Forming a brand identity

Branding is vital for every small business. As the digital world expands every year, branding becomes even more important. A brand comprises different elements. It shouldn’t be thought of as simply a logo and name, but more the style and tone of all visible communications, the experience a customer can expect and how the business is run.

Building a solid, recognisable brand that lights up for customers is essential for new start-ups that want to make it in a crowded sector.

Pricing services and products correctly

How to price goods and services often forms a stumbling block for start-ups. The temptation is always there to lower costs in order to gain new business. Depending on the sector, this could be a big mistake.

Most customers, and particularly those in the B2B sector, are seeking a service that provides value, as well as competitive prices. To price correctly, a small business should consider how they are adding value for customers, and price accordingly.

James Turner, Managing Director of Turner Little Limited says: “This information shows that there are steps that all start-ups should take when they decide to form a business. It’s unfortunately not enough to have the vision and ideas. Legalities, financing, business planning, marketing and much more must also factor in.

“It can be tempting for start-ups to dive in, without doing the right kind of research. And this could add them to the long list of start-ups that fail within their first year. The good news is that there are many ways to counteract the risks of starting a small or medium sized business. By taking care to create an effective and flexible business plan, taking advice on the legal side of starting a business, and carrying out thorough and relevant marketing research, a small business can ensure that some of the more common challenges don’t ruin their long-term success.”

About Turner Little

Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider and business consultancy. 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.

What small businesses will thrive after Brexit  

According to media reports, the UK Government is still trying to thrash out a deal for leaving the EU in 2019. While some accuse coverage of scaremongering, others are concerned about the increasing likelihood of a ‘no deal’ Brexit and what that could mean for the economy.

Whether the UK leaves with a deal or not, it seems that things will change for businesses and people investing in certain asset classes. For example, it’s likely that financial services businesses that rely on easy access to the European market will suffer. However, there will be winners too. Specifically, the opportunities presented by Brexit to small businesses.

SMEs could form the backbone of the economy post-Brexit, and the Government is certainly taking this stance. For those looking for financing, there are positive options such as the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS). This is because we are witnessing a time in the market where businesses are looking for investors, and investors are seeking out opportunities, leading to a ‘sweet spot’

Investment opportunities

Small and growing businesses offer investors the kind of opportunities that will continue to appeal after Brexit. These are the businesses that will flourish when the UK has left the EU, for various reasons.

The first is that they often operate in niche areas, specialising in specific sectors or services. This gives a measure of protection against any Brexit fallout, as they will still have that niche afterwards. Small businesses are also agile, flexible and able to adapt quickly to changes. This is one of their standout advantages over corporate giants.

Smaller businesses have an ability to pivot quickly, if necessary. Should circumstances demand a change in product or service, they are better placed to do so without enduring major adverse effects on their bottom line.

Strong Government support

The final reason for small businesses’ strong position as the UK heads towards Brexit, is the Government’s support. There is a renewed vigour in the support for entrepreneurship and innovation since the Referendum. Ministers are increasingly keen to encourage small businesses to continue to innovate and exploit niche opportunities, and to expand into larger markets.

In the current market climate, smaller firms that are potentially disruptive are increasingly attractive to investors. Entrepreneurship is at the heart of growth businesses, and the opportunities for financing are stronger than ever right now. The support available is not limited to funding, as many investment funds are providing mentoring which can be just as important as the funding itself.

James Turner, Managing Director of Turner Little Limited says: “These small, disruptive, niche businesses will form the economic backbone of the UK after Brexit. There is no doubt that the economy and market is experiencing a time of uncertainty as we wait to find out the Government’s final exit deal, but small businesses can mitigate the risks by securing funding and mentorship at the same time.

“SMEs must also retain their flexibility and ability to adapt to a potentially fast changing market. The reality is that no-one can yet forecast exactly what will happen to any business sector when the UK is out of the EU, but by focusing on being adaptable, agile and staying alert, small businesses can weather any potential storm.

“As we approach Brexit, investors should be turning more to these kinds of businesses, as they offer the best chances of thriving in the new, post-EU business landscape.”

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.

New report shows negative impact of employee’s financial problems on workplace productivity

Financial concerns cause UK workers to take four million days off work every year, according to new research from Aegon. The insurance and asset management company carried out the survey in conjunction with the Centre of Economics and Business Research.

The Financial Wellbeing in the Workplace Report explores and analyses the financial state of UK employees, and works out the detrimental impact on productivity in the workplace. In addition to the massive amount of working days lost due to financial concerns, the report found that those who keep working lose up to two hours of productive output every day.

By combining absentee levels with ‘presenteeism’ (that is, employees attending work but operating at lower levels of productivity), it was calculated that this costs UK businesses £1.56 billion a year.

Small businesses suffer most

According to the research, younger workers experience the highest level of concern over finances. This generation also reports the lowest financial wellbeing scores. Despite this, they also consider themselves as the group of people who are doing the most to actively prepare for their future. Around 46% of respondents under the age of 35 believe that they are doing everything possible to improve their financial future. When it comes to people aged 55 and over, this drops to just 37%.

Employees working for SMEs suffer the most, with just over a third of staff working for small businesses (defined as fewer than 50 staff members) saying they only just get by financially. This compares to just over a quarter in large businesses (defined as more than 250 staff members). The report suggests that this lower number is likely to reflect the more impactful efforts made by large employers to encourage financial wellbeing among their employees.

Financial assistance needed

Around 35% of SME employees state that they would like to receive some kind of financial education or help, but only 16% are receiving this from their employer. However, Aegon also discovered in separate research that just under half (45%) of SME business owners think that it would be intrusive to approach their employees about their personal finances. Despite three quarters of SME employers saying that their workforce productivity is adversely affected by employees’ money worries, almost 50% state that it is not their place to get involved.

A wider campaign by Aegon aims to delve deeper into the financial wellbeing of employees in the workplace. Various recommendations include employers taking responsibility for raising awareness among staff regarding the Government’s £500 allowance available for advice on pensions. They say that employers should consider financial wellbeing as part of mental and physical wellbeing. As part of this, greater support should be made available by the Government to offer financial advice and education within their workplace.

James Turner, Managing Director of Turner Little Limited says: “The research findings show the impact on small businesses of poor financial wellbeing among employees. It’s an important issue that is negatively impacting both employees and employers in many cases. There is a significant amount of evidence that financial problems among the workforce are damaging productivity and mental health.

“Employers should be better supported in order to assist employees with their financial wellbeing. Lots of employers are unaware of the kind of help they can offer staff, while many others feel it’s not their place to do so. This should change. It’s clear from research that many employees actively want financial support from their employers, in terms of advice and raising awareness.

“It’s clear that this is an issue that should be addressed by small business owners as it has been a long-term problem for them. It’s likely that those who chose to focus on addressing the problem and offering financial help to their workforce will benefit.”

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.

Should there be a tax break for SMEs investing in productivity technology?

Leaders across the business sector are asking the Government to introduce a ‘Productivity Allowance’ in a bid to push the UK forward. The suggestion is featured in a report from the Institute of Directors (IoD) called Lifting the Long Tail: The productivity challenge through the eyes of small businesses.

The idea is a new tax allowance for businesses investing in productivity and technology. Other measures are also suggested in the report, such as developing a formal business support framework that works nationally, increasing the Apprenticeship Levy and creating a wider training Levy. The report also talks about improving the knowledge transfer between businesses and academia.

Government’s Industrial Strategy

The report’s proposals are outlined in the foreword by the Chief Economist for the Bank of England, Andrew Haldane. He calls them: “useful food for thought for Government, as it begins to put in place the nest stages of its important and ambitious Industrial Strategy.”

Through the strategy the Government wants to boost productivity by supporting businesses. It pledges to create jobs and increase employee earning power by investing in infrastructure, industry and skills. This includes boosting the foundations of productivity – defined as the things that support an innovative, skilled and balanced economy. The five foundations, taken directly from the Government’s strategy, are:

  • Ideas: encouraging the UK to be the world’s most innovative economy
  • People: ensuring good jobs and greater earning power for all
  • Infrastructure: driving a major upgrade to the UK’s infrastructure
  • Business environment: guaranteeing the best place to start and grow a business
  • Places: creating prosperous communities across the UK

Solving the puzzle

The author of the IoD report is Senior Economist Tej Parikh. He says: “Solving the productivity puzzle has been a defining challenge for the UK over the past decade. The success of our post-Brexit economy hinges on our ability to unlock the vast untapped potential among UK small businesses.”

It’s important to recognise that there is no single way to achieve this. The debate has always talked about broad trends. Instead, as the IoD are urging the Government, the discussion needs to move into the real world of the office floor.

Mr Parikh adds: “To lift itself, the long tail will first need to twitch into action. This means shifting mind-sets and a series of small steps. Directors of smaller firms need the support and encouragement to spend more time working ‘on’ and not just ‘in’ their organisation, and to confidently adopt new management techniques and technology. We also need to retool our currently patchy national architecture for business advice, and there is no time to waste.”

Urgency needed

There’s a new sense of urgency for ideas, technologies and solutions to boost the small business community. Unsurprisingly, this is being driven by the uncertainty surrounding the Brexit agreements, and the date to leave the EU moving closer.

James Turner, Managing Director of Turner Little Limited says: “With just six months to go, it’s time to move small businesses on. While the Government is correct to prioritise closing the gap between high and low performing businesses, changes must happen soon.

“In the UK we are lucky to have a layer of innovators that are pushing through new frontiers. But this must translate down throughout the entire business community to boost the economy. Raising business productivity is one of the country’s most urgent economic challenges.

“This is particularly the case as we see automation transform many sectors. The Government must find innovative ways to support businesses of all sizes. Support is needed with funding, but also to improve management capability and expertise, to adopt the newest technologies and to spread information across the economy. By focusing on what can be done at company level, the IoD’s report is giving the Government new ideas on how to improve performance, and therefore productivity.”

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

Research shows that small businesses battle five cyberattacks every year

Hacking, online manipulation and cyber fraud is rarely out of the headlines these days. From election interference to personal details being stolen from major corporations, it’s something that most people are aware of.

Less well known is how much it affects small businesses in the UK. A new report commissioned by encryption experts Appstractor Corporation shows that UK small businesses face five cyberattacks a year.

Increasing threat of cyber attacks

The research highlights the increasing threat of online criminal behaviour affecting small businesses. Under Attack: Assessing the struggle of UK SMEs against cyber criminals shows that many IT decision makers in SMEs feel their company is at greater risk due to inferior software. They say their software fails to match the constantly increasing sophistication of online attacks.

Almost 20% of small businesses in the UK faced up to ten cyber attacks over the last 12 months. A major concern flagged in the report by IT bosses concerns ill-suited encryption software. Generally, security software is designed for either large corporations or for individuals. There is a lack of effective security software designed specifically for the small business sector.

This leads to small business owners feeling that they are less able to protect the company from cyber criminals than larger organisations. Just over 30% of respondents to the survey believe that the small business community in the UK is being left behind in the battle against cyber-crime.

Key findings

The report’s major findings include:

  • 17% of small businesses dealt with at least one cyber-attack over the last year.
  • 28% of SMEs were attacked up to three times.
  • 32% of SMEs faced between four and five attacks.
  • 19% were attacked between six and 10 times.
  • 2% were attacked up to 20 times.

Figures like this shows that small and medium businesses in the UK are less able to cope with cyber security threats than larger companies. Paul Rosenthal, founder of Appstractor Corporation says: “Software and platforms are not being effectively designed for them [small businesses], so they have to shoehorn consumer or large enterprise grade solutions into their company which don’t work in small businesses.”

However, another clue to the vulnerability of SMEs in the UK is the prevailing attitude that they are too small for cyber-criminals to target.

US small businesses

US statistics are much the same in terms of cyber-attacks and small businesses. According to the Hiscox small business risk report 2018, 65% of small businesses in the United States fail to take appropriate action after being exposed to an incident.

The research reveals that almost half of the more than 1,000 SMEs asked had dealt with at least one cyber-attack over the last year. It concludes that just over two-thirds of businesses around the world are underprepared for online attacks and small businesses are even more vulnerable as they tend not to have strategies in place to deal with the ensuing damage.

While two-thirds of businesses say that cyber crime is their highest concern for the coming year, only half have a strategy to deal with online security. Just less than a third have simulated hacks and breaches to prepare employees for an event in real life.

James Turner, Managing Director of Turner Little Limited says: “While there is certainly a need for software solutions designed for small businesses, owners, managers and decision makers must also be more vigilant. Small businesses can easily fall into the trap of thinking they’re not a target. This is a dangerous view to take as it leads to complacency concerning encryption and security software.

“The reality is that small businesses are vulnerable. Cyber criminals are targeting SMEs more than ever. Newer techniques, such as automated targeting, are putting small businesses at serious risk of cyber-attack. Small businesses are less likely than large corporations to be able to withstand the repercussions of a breach in security.

“Budgeting is cited as the main barrier to preparing for cyber-attacks. While budget is an understandable concern for small businesses, neglecting to prepare for a security breach could be fatal. Small businesses everywhere should take the necessary steps to understand the risks and protect themselves.”

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 prepared are small businesses for a potential ‘no deal’ Brexit?

The closer we get to the date specified for Brexit, which is scheduled for 29 March 2019, the more unclear it all appears. With the Conservative Party Conference underway now, and Prime Minister Theresa May apparently facing revolt from both ‘Remainers’ and ‘Brexiteers’ in her party, there has been much media speculation that the UK will be heading for a ‘no deal’ Brexit.

And while it’s also unclear how prepared anyone is for this scenario, according to research from the Federation of Small Businesses (FSB), few have started serious preparations.

No deal, no problem?

Just 14% (one in seven) small businesses has begun planning for the scenario of a no-deal Brexit, according to the research. The FSB’s report shows that while another 41% of small businesses think that a no deal Brexit will adversely impact their business, they haven’t yet started planning in real terms for this eventuality.

One in ten small businesses (10%) said that they think a no-deal Brexit will have a positive effect on their business. On the other side, nearly half of small businesses in the UK (48%) think that a no-deal style Brexit will negatively affect their ability to do business.

When considering small businesses that trade with the EU, this figure increases to 66%. For SMEs that employ people from the EU, 61% think no deal means problems ahead for their business.

Planned actions

As well as discovering the percentage of small businesses who are concerned about the potential impact of a no-deal Brexit, the research also breaks down what they’re planning to do about it.

It shows that just over a third of small businesses (35%) are planning to postpone major innovations, research and development and businesses decisions. Just over a fifth (21%) of small businesses likely to be affected by a no deal Brexit will be cutting expenditure and staff between now and the time the UK leaves the EU.

Michael Watkinson, FSB Development Manager for Nottinghamshire and Derbyshire, believes the findings show that small businesses are not prepared for the potential chaos that could arise from a no deal Brexit. He said: “Looking at this research, it’s obvious that our small firms are not prepared or ready for a chaotic no deal Brexit and the impact that it will have on their businesses.”

The Government appears to confirm that a no deal Brexit is likely, with Dominic Raab, Secretary of State for Exiting the European Union, saying today (1 October) that the UK could be “left with no choice but a no-deal Brexit if the EU tries to lock us in to a customs union”.

Government support

James Turner, Managing Director of Turner Little Limited said: “Small businesses that sell products to the EU, rely on employees from the EU or buy products from the EU are understandably concerned at how a no deal Brexit could affect them. It’s clear from research like this that many feel they are in the dark about what to expect and how they should prepare for it.

“It’s particularly concerning that small businesses are electing to delay business decisions, stopping investment and, perhaps most problematically, cutting staff. Small businesses form the very backbone of the UK’s economy and the Government must listen to their concerns as we head towards Brexit.

“With so much unclear it’s not surprising that SMEs haven’t started preparing for Brexit, as no one knows what to prepare for. In the ideal scenario at this stage, the Government would talk to and work directly with the small business sector in the UK to make sure that they are properly supported if a no deal Brexit continues to become the most likely scenario.

“We only have about six months until exit day, so it’s very much a race against time to avoid a situation where the UK will crash out of the EU in a way that will damage small businesses. It will be interesting to see what arises from the Conservative Party Conference as this is a key time for the Prime Minister’s current plan.”

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

Will AI change everything for UK SMEs?

Many believe that Artificial Intelligence (AI) will foster the fourth Industrial Revolution as it transforms how we live and work.

In the British business world, we are looking ahead to a future driven and controlled by AI. This could very well be the keystone of the next industrial revolution, but how many employers are ready for it and how can UK SMEs utilise it to push forward?

Driving innovation

A recent study has shown the current understanding of and predictions for AI by decision makers. It showed that 45% of IT decision makers are certain that AI will be behind the biggest innovations over the next few years.

This is unsurprising, when we consider the vast scope of artificially intelligent technology. Every generation sees the advent of a disruptive technology that changes everything, and for our generation this could very well be AI.

The survey considered whether UK businesses are fully embracing the possibilities AI brings, in order to increase productivity. Respondents said that AI is more important to the future than other buzzword technologies, such as VR (virtual reality) and AR (augmented reality), which came in at 16%. Slightly more (24%) consider the internet as equally important, but AI is the clear favourite.

This is likely to be, in part, because it’s easier to directly link AI to increased services and productivity, while AR and VR usage remains less clear. They also need specific devices in order to use them, while AI can be absorbed into current devices more easily.

How will AI help UK SMEs?

Financial experts expect that the technology will allow British businesses to save trillions of pounds. This is due to the massive time and manpower savings that AI can herald.

Businesses in the UK spend on average 120 days a year on administration. This has a huge impact on productivity.  Artificial Intelligence takes the burden of mundane back-office administration tasks such as logging expenses and analysing data, allowing people in the business to focus on what matters.

It is potentially a great opportunity for small businesses, particularly when starting out, as many find it difficult to dedicate the necessary hours to the day-to-day administrative duties necessary. With small numbers of employees, it is all too easy to allow important but repetitive tasks to go undone, leading to problems in the future.

How prepared are businesses in the UK?

The immense possibilities for UK SMEs provided by AI are indisputable, but many survey respondents reported that they didn’t think their employers were ready to take advantage of this.

More than 55% said that they considered that their employer is underprepared for AI and its possibilities. Just 19% felt their employers were ready and able to utilise the technology.

When it comes to larger businesses, just 10% feel that their employer is ‘completely ready’ for AI, according to the results of the poll. These numbers clearly show that employees are aware of the possibilities, yet businesses are being left behind.

It’s already here

While many feel underprepared, other businesses in the UK are already seeing the positive effects of AI. This is particularly the case in the financial sector as this type of industry is already strongly implementing AI.

Other sectors are also heavily utilising the technology. For example, Ordnance Survey have utilised machine learning to train a machine model to correctly identify types of roofs. This has freed up the workforce to concentrate their skills on more complicated problems.

James Turner, managing director of Turner Little Limited (turnerlittle.com) said “Ambitious SMEs in the UK must learn from other industries. It’s important for small businesses to understand how other sectors and businesses are using AI, and to implement it themselves. If they miss this crucial opportunity, they could find larger businesses are more flexible than them, thereby losing a traditional SME advantage.

“If businesses don’t quickly grasp the vast opportunities afforded by AI, then they could face losing talented employees who move to businesses who are more forward thinking. To embrace these kinds of changes, it’s important to invest in developing skills and keeping one step ahead of technological possibilities. This is true for SME owners and their employees. Technology moves fast, and if you don’t harness it, you could get left behind.”

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.

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Report shows small businesses want solicitor price transparency

The biggest barrier to small businesses securing proper legal assistance lies in price transparency. A recent report, commissioned by the Solicitors Regulatory Authority (SRA) shows that small business owners value clear, accessible pricing above other factors when they are seeking legal help.

More than 4,000 SME owners and managers were questioned by YouGov and Europe Economics in the report. Results show that small businesses are the most affected by price, with almost two-thirds of respondents citing solicitor’s fees as a barrier to engaging legal assistance.

High costs

The general perception that solicitors always have high costs is so strongly ingrained that many respondents say they never even look at legal providers. This attitude shifts when legal firms openly advertise their pricing structure.

Half of SME owners say they are more willing to research legal providers, if they can see the fee structure clearly displayed on their website. This shows that the legal sector is not fully trusted by small businesses and they believe they will struggle to meet unpredictable costs. It’s such a strong expectation that many are hesitant to approach legal experts at all.

Many respondents say that instead of seeking legal representation, they look for cheaper options, including employment consultants or HR experts. Others rely on their own instincts and experience to rectify matters internally.

Not transparent enough

Although fee structures are freely available from legal firms, they are not always shown clearly online. And this is the first port of call for most small business owners today. Legal firms should view publishing prices online to get secure new business.

Many solicitors see fee transparency as a compliancy-only issue. This survey shows that this is losing them clients from the small business community.

This research shows that the firms publishing clear, accessible fee information are benefiting from opening communication channels with SMEs. By ensuring that expectations are understood on both sides, there would be an upsurge in small business owners using legal representation.

Cost dictates choice

When small business owners need a service, their choice is often dictated by costs.  This applies to suppliers, contractors, employees and everything else required to run a small business. Business owners have an expectation that costs for services are transparent and achievable. The legal sector is no different.

The report shows that small businesses almost exclusively rely on the Internet, and that customer testimonials are key, when they choose a legal service. Most business owners research legal service providers every time they need one, rather than return to a solicitor they’ve used before.

Just over 40% of small businesses report that they will spend time researching when looking for legal advice. Three-quarters said they would look further into providers if there was easily available pricing information online.

Good for small businesses

The report says: “This research suggests that firms that do publish price information could benefit from increased contact from small businesses as their expectations about the costs of using a solicitor is lower when costs are publicly available. And firms that publish price information may gain, or at least retain, market share in an increasingly competitive market.”

This is key information for legal firms, but more so for small businesses. Business owners that need legal assistance should engage professional help, with this report showing that the expectation of exorbitantly high prices and prohibitively rising costs in the legal sector is not always the case.

James Turner, Managing Director of Turner Little Limited says: “Small businesses that need legal assistance or representation shouldn’t cut corners. Attempting to deal with legally sensitive issues, either internally or by engaging cheaper consultancy help, can be a fatal error.

“While it’s understandable that the legal sector is seen as prohibitively expensive by SME owners struggling with cashflow, this isn’t always the case. It’s likely that we will see more legal firms publishing their fee structure more transparently on websites. If legal firms refuse to be transparent and understand that the market is becoming more competitive, then they will lose out.

“It’s good news for small business owners that solicitors understand the need to be transparent. By busting the myth that all solicitors are hugely expensive, the legal sector can forge much more meaningful and lasting customer relationships with small business owners. In turn, this will mean small business managers and owners aren’t taking risks when dealing with potentially legally tricky issues.”

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.

The areas of the UK with the highest and lowest percentage of economically inactive people

Figures from The Office for National Statistics (ONS) have recently identified that there were 1.42 million unemployed people in the UK, from December 2017 to February 2018. This represents the number of people who are available to work and seeking employment. And to put the figures into context, over the course of 2017, there were almost 9 million economically inactive people in the UK. Simultaneously, there were over 1.30 million economically inactive people in London alone over the course of 2017.

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As a result, Turnerlittle.com sought to investigate the regions in the UK and the London boroughs with the highest and lowest percentage of economically inactive people, by utilising data from a recent ONS report, entitled UK Labour Market: April 2018.

ONS defines ‘economically inactive’ as someone who does not work, not seeking work, or unavailable to work.

Turner Little extracted figures for those classified as ‘economically inactive’, covering data collected from January 2017 to December 2017. The figures represent the number of people who could work, according to the working age of 16-64 per region, and the percentage of those who are economically inactive

Turner Little has exposed the areas of the UK with the highest number of economically inactive people. They are as following:

Northern Ireland (27.7%), North East (24.6%), Wales (24%), West Midlands (23.6%) and North West (23.5%).

On the other end of the scale, the areas with the least number of economically inactive people are as following:

East Midlands (22.4%), London (21.8%), East (19.2%), South East (18.6) and South West (18.6%).

When it comes to the capital, these are the London boroughs with the highest number of economically inactive people:

City of London (35%), Tower Hamlets (31.2%), Westminster (29.4%), Camden (28.9%) and Newham (26.7%).

Simmultaniously, the London boroughs with the least number of economically inactive people are as following:

Harrow (18.1%), Sutton (15.9%), Southwark (15.4%), Lambeth (14.9%) and Lewisham (13.2%).

James Turner, managing director of Turnerlittle.com comments:

“There are plenty of reasons why a person can be economically inactive; if you are a student or you are in a situation where you must look after someone who is dependent, to sickness related issues or even the fact that individuals just prefer not to work.

Although the figures show a slight decrease in the number of unemployed people overall, the figures remain quite high, and long-term economic inactivity will take its toll on tax revenues which means there is less money to be spent on public services such as the NHS or education.

Simultaneously, long-term unemployment could have a negative effect on an individual’s mental and physical health. And as time goes on, the ability to find work, or be accepted into employment continues to diminish.”

The Business Priorities of Global Banks, 2018

Banking in 2018 is a minefield. Consumers are disenchanted, emerging FinTech technologies are disrupting the industry leaving traditional banks contemplating their place in an ever-changing, modernising field. Turnerlittle.com took to investigating the business priorities of global banks in 2018, to better understand what our banks are doing to restore customer faith – and the sector.

To sculpt their findings, Turner Little analysed the report Global Banking Outlook 2018 released by Ernst and Young (EY). Comprising a survey of 221 financial institutions, across 29 markets, the report reveals bankers are positive about their ability to improve their financial performance this year. To achieve this, banks and bankers alike will prioritise five main categories: protect, control, grow, reshape and optimise.

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Observing each of these priorities will allow effective change to take place over the course of the year.

Clearly, we can see from the infographic above, to ‘protect’ comes out top. In fact, the highest priority in every category is to ‘enhance cyber and data security’ – at 89%, plainly indicating this is an urgent focus.

Other high priorities include to ‘implement a digital transformation program’ (85%), to ‘recruit, develop and retain key talent’ (83%) and to ‘gain efficiencies through technology adoption’ – at 82%.

Lower priorities include, to ‘optimise the balance sheet’ (78%), to ‘meet compliance and reporting standards’ (77%) and to ‘improve risk management’ – at 77%.

Delving further into detail, it is found, within the next three years, 40-60% of companies will choose to purchase a variety of technologies to help them achieve their goals. Some of the most favoured technologies include artificial intelligence, augmented and virtual reality, cloud technology, cryptography/cybersecurity technology and identification software based on biometrics.

Turner Little also pulled the top five reasons banks will invest in technology this year, with interesting results.

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To ‘strengthen competitive positioning and build market share’ is the number one reason banks will look to invest in technology – at 70%. Followed by ‘expand ability to acquire, engage and retain customers’ (67%) and to ‘generate cost savings and operating efficiencies’ (62%.)

Closely followed, was to ‘mitigate growing cybersecurity threats’ (58%) and to ‘drive digital transformation program’ – at 51%.

James Turner, managing director of Turnerlittle.com, comments:

“It’s clear traditional banks need to embrace digital advances, such as those under the FinTech umbrella, to drive opportunity. Not only will this improve efficiency and help to manage risk; it’s critical to sustainable success.

In fact, it is understood embracing digital innovation will provide banks with the key to reach their goals in 2018 and to appease fed up consumers. It’s time to move with new advances, rather than wasting energy, money and custom fighting the tide.”

Feature image credit: Sittipong Phokawattana/Shutterstock



How FinTech Can Help Banks Reach Goals in 2018

A lot has been written about the relationship between traditional banking and FinTech. The most common thought? The astounding rise of the world’s FinTech market and how it will affect the banking industry. The general opinion is that the constant progress of FinTech will one day spell the end of the banking system as we know it.

What is FinTech? It’s defined as ‘computer programs and other technology used to support or enable banking and financial services.’ Advances in its technology include mobile functionality, simplicity, big data, accessibility, cloud computing, contextuality, personalisation and convenience.

Traditional banks have few of these qualities and therefore rely on something FinTech start-ups haven’t yet mastered – trust, security, significant capitalisation and customer indifference. But according to Starling Bank’s report, traditional banking consumers are fed up. The top frustrations with current UK banks being:

  1. Unclear and complicated language and charges.
  2. Complicated products that don’t fit with lifestyle.
  3. Processes and technology that takes too long.
  4. A superior or unhelpful attitude.

From this, it is understood that the technological innovation FinTech provides could help traditional banks reach their goals and appease fed up consumers. Indeed, in 2018, a partnership of the two presents boundless opportunity.

The top business benefits of partnering with FinTech technologies, per ACI’s FinTech Disruptors Report*. include the ability to generate new revenue streams (64%), the ability to enhance customer experience (59%) and the ability to offer new applications – at 56%.

Chris Skinner, Chairman of the Financial Services Club, comments:

“Start-ups have no existing structure to change so they can change everything. The challenge is how to convince customers to change. Incumbents (traditional banks) have millions of onboarded clients and so to change anything takes time.

Most have the time though, as customers are slow to change. Fundamentally, both are facing two very different challenges – FinTech’s are creating while the incumbents are converting.”

By embracing themes, like openness, collaboration and investment, banks can afford to disrupt their own business model rather than waiting for challenger models to do so. However, traditional banks are anticipating this by creating new businesses within their existing structures that adapt and collaborate to meet these challenges and to make better, faster use of customer insight. A key competitive advantage.

A FinTech and Bank Partnership

Further to ACI’s Report, more than three quarters of banks, and a similar proportion of FinTech groups, identify partnership with the opposite camp as an essential ingredient to meeting the challenges of institutional inertia.

In fact, 80% of banks agree with their FinTech peers that FinTech is a viable, even essential path to the future. The top three ways embracing technologies can help banks meet their goals, according to ACI, include engaging in partnerships with FinTech (78%), expanding existing partnerships vendors (57%) and leveraging cloud technology – at 44%.

In 2018, banks’ new approach to FinTech is more about seizing opportunity and changing customer needs than defensive strategies to mitigate risk. Turnerlittle.com observed statistics from the same ACI report, to outline the exact areas where banks want to partner with FinTech:

  1. Payments – 68%
  2. Banking infrastructure – 43%
  3. E-Commerce – 40%
  4. Remittances – 37%
  5. Security and fraud management – 32%
  6. Consumer banking – 29%

Financial institutions see the greatest opportunity in payments – with nearly 70% identifying this as a key area of interest – followed by 43% interest in banking infrastructure.

Equally, e-commerce is a focus for 40% of banks and remains a major focus for FinTech too, suggesting that the current period of development is proving productive in terms of aligning interests and establishing goals between the two industries.

*ACI’s report considers findings from an industry-wide survey of banks and established financial institutions, FinTech start-ups and ecosystem participants alongside insights from over 20 interviews with financial institutions across Europe, FinTech founders, investors and enterprise-level technology firms.

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