How does CSR and charitable giving boost small businesses?

Charitable giving and corporate social responsibility (CSR) are not only positively impacting society, they’re also having a direct effect on profits for small businesses. Research by Work for Good shows that nearly 70% of businesses report a boost in profits when they have a regular charitable giving strategy.

The study confirms that 68% of businesses also report a positive impact on their reputation too.

Why does charitable giving improve profits for small businesses?

Customers respond well to businesses that give to charity and demonstrate sustainable and respectful practices. And while it’s nice to assume businesses give to charity for other reasons too, there’s no doubt that it’s good for their bottom line.

More than 35% of businesses say that giving to charity leads to more new clients. The research covers 100 small businesses and almost the same number of charity fundraisers, and reveals both positive and negative reactions to businesses giving to charity.

More than 60% of small businesses say that they donate to charity, both in terms of time and money, to make an overall positive impact on society. The survey also reveals that small businesses that donate more than 0.5% of turnover are twice as likely than those giving less, to find it positively impacts their business reputation. They also report it assists with recruiting and keeping high quality employees.

Different options for regular charity giving

Random, ad-hoc donations are always a good thing for the causes your business chooses to support. However, Work for Good says that data gathered during their research suggests that sustained, regular giving will benefit your business more in the long term.

By including a CSR and charity giving programme into your business plan or business model, you will benefit from more of the positive effects on your company. Consumers, employees and stakeholders are all driven by their personal belief system. It’s a logical step for small businesses to include this into their business initiatives and launch CSR programmes that demonstrate positive effects on society, the community and charity.

Small businesses benefit from CSR

CSR is usually confined to large businesses, but SMEs are increasingly catching on to the benefits of having a strategy too. It can seem like just ‘another thing’ to get done when you’re in the midst of running a small business, but with a strategy in place it will become part of everyday business practice.

Studies support this, showing that a strong CSR strategy tends to help attract and retain higher skilled employees. It also fosters a sense of loyalty among employees. Research from PWC shows that an enormous 86% of Millennial employees would think about leaving a business if their CSR values don’t align with their own.

Here are some ways to define and implement a CSR strategy:

  • Involve employees when choosing community projects to get involved with, or charities to support. Collaboration is much easier in SMEs than in large corporations, and it increases engagement.
  • Make it ‘business as usual’, CSR isn’t just a message on your website, it should become part of every day business. Regularly communicate updates on initiatives and keep everyone aware.
  • Communicate the positives. Employees should be told at regular interviews of the positive effects of their CSR and charity contributions.

 

James Turner, Managing Director of Turner Little Limited, says: “A successful CSR and charitable strategy is about much more than occasional bursts of fundraising. By building CSR activity into their business model, small businesses can benefit in myriad ways. From recruiting higher quality employees to fostering excellent teamwork, CSR has a positive effect on people and profits.

 

“If you’re not sure where to start, think about your company’s unique selling points. Can you link a charity or service with your own products or services? Start with your local community, as this is particularly important for small businesses. A report from Raconteur says that ‘the top 1,000 charities soak up 89% of all donations in the UK’. This leaves plenty of scope for small businesses to make a sustainable difference to smaller, local charities. Using your business as a force for good will only benefit you and the future of your company.”

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.

The pros and cons of running a home-based small business

For those working in the corporate sector, the idea of working from home can seem tempting. An ever-increasing number of entrepreneurs and start-up business owners in the UK are doing just that.

If you’re not already working from home, have you ever wondered what it’s really like? Are there downsides as well as upsides? And if there are challenges, what’s the best way to navigate them?

New research focuses on home-based small business owners

Almost 40% of UK SMEs are based at home. This number has shot up by 3% since 2014, and we’re expecting to see it continue to increase throughout 2019 and beyond.

Barclays has released research focusing on the emotions experienced by those who run their businesses from home. The data shows that 68% are happy and 62% excited about working in this way. Just under two-thirds report feeling more efficient when working from home, due to the lack of distractions. Almost a quarter say they choose to work in pyjamas at least some of the time!

However, on the less positive side, the research also shows more than 35% of people running a business from home often experience loneliness and isolation. Half of these respondents cite lack of support as a reason for these negative feelings.

Six tips to stay motivated when you work from home

While running a home-based business has many plus points, there’s no doubt that there can be downsides, particularly if you struggle with self-discipline and getting organised.

Autonomous working is a positive thing for lots of people, particularly those who don’t work well with the micromanagement experienced within many corporate environments. However, home workers also don’t have colleagues readily available to discuss issues with. Lots of people assume working from home means fewer distractions but being on your own all day can lead to a loss of motivation and high levels of procrastination.

  1. Timetable your day

It can be surprisingly challenging to organise your day when you’re left to your own devices. A good tip is to work out which part of the day helps you do your best work and plan around that. If you’re a morning person you may find that early in the morning sees you hammering through tasks. Or perhaps you need family time first thing, and the afternoon is your sweet spot for work. Either way, make a strict timetable and follow it. You’ll find a natural rhythm that works best for you.

  1. Dress as if you’re going to an office

This is more subjective, but some people find that working in their pyjamas has a negative effect on their output. Dressing as you would for an external office job can have surprisingly positive effects on what you achieve. It helps to get you in the ‘work’ frame of mind. It’s also helpful to alter your work environment every day. For example, work from a coffee shop for a portion of the day, as this change of scenery can really help you get through your tasks.

  1. Connect with people

The lack of distractions associated with an open plan office are extremely beneficial for productivity but can leave you feeling lonely. Luckily, we live and work in a connected age, and colleagues, clients and customers are easy to reach. There are many forums and websites devoted to home-based workers and entrepreneurs. Reach out and network virtually and you’ll find like-minded ‘colleagues’ to swap ideas and chat through any challenges.

  1. Boost your energy

Find healthy ways to give yourself a boost in energy. At home you have the freedom that is lacking in an office to arrange your day in a way that works best for you. If a mid-morning jog helps to blow the cobwebs away, then schedule it in. Take hourly breaks to stretch it out or have a cup of coffee for an energy-giving break. If your energy drops, you tend to lose focus and can end up wasting hours.

  1. Set up a proper ‘office’ area

Invest in a proper desk and chair. Set your computer and phone up as you would in an office and dedicate the space to your job. It can be tempting to work from the sofa, but not only does this fail to boost energy levels, it can also play havoc with your posture.

  1. Slow down to speed up

It’s extremely tempting for many entrepreneurs who work from home to double their normal hours. However, by always pushing yourself to do more, the likelihood is you’ll burn out, and achieve less. Research shows that people who can slow it right down are the ones who achieve more in the long run, as they are always working at their peak level.

James Turner, Managing Director of Turner Little Limited, says: “The research from Barclays shows that there are undoubted benefits to running your business from home. With the sector increasing in number year-on-year, it’s important that people consider all of the challenges working in this way presents.

“Many entrepreneurs who work from home are happy and motivated, but for those who struggle with motivation, it can be difficult. Building up a support network is important, and this is now easier than ever to do thanks to our connected digital world. Being in touch and working alongside other likeminded people, if only virtually, can help to boost motivation levels better than anything else.

“Working from home is more viable than it has been thanks to the Internet, and a changing view of the way we live and work. We can expect to see more people choosing this way, not only for the clear financial benefits, but also for a more balanced lifestyle on their own terms.”

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.

Could these little-known laws and regulations cost your business?

Do you know all the regulations and legal restrictions that could cost your small business money? Many don’t.

For example, in December 2018, a Liverpool-based bookshop owner was fined £300 for throwing sweet wrappers in a bin. The local authority enforcer who fined her said she was flouting legislation surrounding business-generated waste, which needs a specific licence describing how it will dispose of rubbish. As the business owner couldn’t provide this, they were fined.

Obscure laws and regulations in the UK

Technically, the Council in question is legally entitled to fine this business owner. However, legislation in the UK surrounding what constitutes business waste versus personal waste is not clear. After a public outcry, on this occasion, the council cancelled the fine. During this process, it became clear that many other business owners in the area had no idea that this regulation exists.

Waste regulations are a great example of the kinds of rules that small businesses might be flouting without realising. Small businesses in the UK are at risk of being fined for breaking laws like this. But, with so many in place in different areas, do you know what could cost your business if you break the rules?

Music in the workplace

If you play music in your workplace, you are in contravention of the small print of the Copyright, Designs and Patents Acts of 1988. This Act says that any business playing music on its premises of any kind for either employees or customers to enjoy are technically hosting a ‘public performance’.

This means licenses are needed from PRS for Music and PPL. These organisations are there to make sure artists are paid when their music is broadcast in any public place. These licenses are less than £100 per year to buy for some businesses but can reach up to thousands of pounds in some circumstances.

PRS does carry out spot checks and takes civil and enforcement action against companies that are playing music without a licence. This can prove much more expensive than purchasing the licence to start with.

Are your vehicles covered?

Any business owner or employee that uses a vehicle for work must have in place the appropriate insurance that covers that specific vehicle for that purpose. This means insurance is needed even if it’s the private vehicle of the owner or an employee. If they use it for business, then it needs to be insured appropriately.

As many as 40% of small businesses affected by this don’t have the right motor insurance, according to research from AXA Insurance. And they’re all vulnerable to potential legal action.

Don’t send marketing material without permission

In 2003, it was made illegal to send direct marketing material via text or email without express permission from the recipient. If your business continues to send material like this without the permission in writing, then you’re breaking the law. And in theory, the recipient can press charges and claim damages from your business.

Is your software licensed?

A third of small businesses say they don’t know what software packages are being used in their workplace, says the Business Software Alliance. This could mean their software isn’t appropriately licensed by its publisher. In the worst-case scenario, this could mean their software is pirated.

Ignorance doesn’t count as a defence against IP (Intellectual Property) regulation. If a small business owner can’t show licenses for the software installed on its work network, then enforcement action can be taken.

Display employee liability insurance certification

Legally, all employers must take out employee liability insurance for at least £5million. This pays out if a worker is injured at your place of business or gets sick due to the work they do for you.

Employers also have a legal obligation to display this employee liability insurance certificate on full view of their workforce. If employees can’t easily and readily access this certificate, you are breaching legislation.

Make sure the smoking ban is enforced

In 2007, the Government outlawed smoking in most public spaces and enclosed places of employment. However, it’s not enough to ban smoking in your building. Business owners must display no-smoking signage that meet the required criteria at every entrance to the premises.

The rules surrounding the notices depend on whether the building is used by only members of the workforce, or also by the public.

Enforce age restrictions properly

For small businesses in the retail space, there are age restrictions in place for cigarettes and alcohol. But there are also restrictions on other products, such as Christmas crackers, which can’t be sold to anyone under the age of 12. Retailers should check every product to ensure they’re complying with age restriction legislation.

James Turner, Managing Director of Turner Little Limited says: “This checklist shows just how many regulations affect small business owners. It’s easy to feel you’re on top of everything in terms of compliance, but it’s worth going through every aspect of your business and double checking.

“Issues such as business waste and software licensing can catch out even the most prepared businesses. Small business in the UK are increasingly forming the backbone of our economy, with almost six million now in existence. Cashflow is a crucial aspect of survival into maturation for start-ups and small businesses and ensuring you don’t get caught out with unnecessary fines is a sensible step to take.”

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.

Protecting your small business from the dark web

The dangers of the dark web are not a problem facing only large multinationals. Small business owners are also at risk of cybercriminals breaching company systems. While small businesses used to be seen as immune to cybercrime, this is no longer the case.

And while some small business managers are taking steps to enhance their cybersecurity protection, the dark web just isn’t on the radar for many.

Why small business owners should know about the dark web

Think of the dark web as synonymous with anonymity. Dan Patterson explains in an article for TechRepublic: “Much like the Internet – or Clearnet – that is accessed every day by billions of people, the dark web is a network of websites, forums, and communication tools like email. What differentiates the dark web from the Clearnet is that users are required to run a suite of security tools that help anonymise web traffic.”

And this is why the dark web has become infiltrated with cybercrime. Not everything is illegal on the dark web, but it is a massive marketplace for stolen personal information and company data. Any data breach leads to information being traded on the dark web by people looking to steal identities and anything else they can turn to their advantage.

Despite its dangers, many small business owners aren’t aware the dark web exists. A report from Switchfast (an IT business focusing on small businesses), shows that 26% of small business owners don’t understand the dark web. Furthermore, they have little to no understanding of how the dark web can exacerbate data breaches.

It’s also possible that small businesses may not even know they have been a target until their data is being used by someone else. Even if small businesses understand the existence and dangers posed by the dark web, it’s difficult to access and navigate.

How can small businesses implement protective measures?

Small businesses can deploy dark web response and monitoring software and tools. Many options allow companies to select which information they want to monitor. They then receive notifications if that data turns up where it shouldn’t. This helps to alert the business to any data breach and give them the opportunity to limit further damage.

Most attacks against small businesses involve identity or account takeovers, so this is the kind of data that should be monitored. The most commonly stolen forms of information are personal identification information and user credentials. As this kind of data monitoring is labour intensive, and not particularly suited to small businesses with finite resources, many choose to outsource it.

Even with this in place, businesses should take steps to minimise any impact from a possible attack. This involves having recovery procedures in place in case a cyberattack does affect them.

James Turner, Managing Director of Turner Little Limited says: “As with any form of security procedure, training should be given to employees and small business owners. Human error almost always forms part of a successful cyberattack. These reports show that the awareness among small business owners of the dark web and the dangers it represents is relatively unknown for many.

“This suggests that there is a distinct training need. Small businesses should implement regular security and training exercises for all workers, in order to reinforce security best practice among employees unaware of the best way to respond to a threat. “

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.

Revenue fluctuations affecting small businesses in the UK

Research shows that small businesses in the UK often experience significant revenue fluctuations. Direct Line for Business finds that during certain months, it’s a normal experience for 1.6 million small businesses in this country to halve or double their revenue.

These kinds of fluctuations inevitably cause problems for small businesses in terms of maintaining appropriate staffing levels and being able to fulfil changing consumer demands.

How do revenue fluctuations affect small businesses?

As these revenue fluctuations are so significant in size, there are also challenges in maintaining and managing cash flow. Small businesses must be able to continually adapt to meet the challenges posed by wildly fluctuating revenue generation month by month.

More than a quarter of the 5.7 million small businesses in the UK are dealing with this fluctuation at any one time, showing the scale of the challenges facing the sector. And the way they manage varies.

How to manage revenue challenges

One way to deal with the changing income generated by a small business is to be flexible with employee numbers. Being able to quickly scale up or down as business dictates is a key part of small business success. For many there are periods of intense action, interspersed with slower months. This leads to the need for more or fewer staff to meet requirements.

Almost a quarter of small businesses have found themselves employing more people due to their rapid expansion. This can cause problems later down the line as demand drops, or the business needs change. As a result, the small businesses able to flexibly manage staffing levels, and understand the need for forward planning to predict the changing requirements from their consumers, are the ones that will succeed.

UK small business sector still growing

However, challenging these fluctuations can be, the UK SME industry is continuing on its upward trajectory. Over the past 12 months, more than half of small businesses report an increase in income, with 3% reporting revenue growth in excess of 50%.

There are now 2.7 million VAT registered SMEs in the UK, which represents a 23% growth. This is partly driven by the 25% increase in the launch of micro-businesses, which now number 2.4 million. Micro-businesses are defined as those employing fewer than ten people.

James Turner, Managing Director of Turner Little Limited says: “Small business operators and owners are some of the most adaptable, flexible and resilient business leaders in this country. Fluctuations in demand for services and in revenue are difficult challenges to overcome. However, UK SMEs continue to thrive, proving that these challenges are surmountable.

“If small businesses have the appropriate strategies, cover and policies in place, and are updating these as necessary, then they will be in a good position to deal with fluctuations. The ability to be flexible and adapt to changing conditions cannot be underestimated, particularly as the country awaits the outcome of Brexit.”

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

Small businesses in the UK turn towards alternative funding options

Small businesses in the UK are searching for alternative funding options to maintain their cashflow post-Brexit, according to research by SME (small and medium-sized enterprises) financing platform Swoop.

CEO Andrea Reynolds says: “We are getting an increasing number of enquiries about contingency arrangements ahead of the 29 March deadline.”

Why are SMEs considering alternative funding options?

Concerns are being raised by some that traditional banks will hold fire on lending to small businesses. Andrea Reynolds says: “This concern is particularly affecting older businesses who have been through a crash before and found their finances were withdrawn very quickly. They are wondering whether they can trust the banks.”

A report produced by the British Business Bank supports the theory that there is much greater awareness of alternative providers among UK small businesses. The annual Small Business Finance Markets report 2018 shows that just over half of small businesses in the UK are fully aware of peer-to-peer lending as an alternative to traditional funding. This rose from 47% in 2017.

More than two-thirds of small businesses are aware of equity crowdfunding, up 10% from 2017. Just under 70% are aware of venture capital funding as an option, a rise of 7% from 2017.

What are the alternative funding options?

Here is a summary of the main streams of alternative financing available to small businesses:

  • Peer-to-peer financing (P2P)

This channel is a way for people to lend money to businesses or other individuals. The lender gets interest when the loan is repaid. P2P platforms are like marketplaces, bringing together businesses and individuals that want to lend money and matching them to those who need funding.

It allows small businesses to get funding without going through a bank. Some websites divide money loaned between many borrowers, others allow the lender to choose who to lend the cash to.

The higher the interest rate offered by the person or business looking for funding, generally speaking the riskier the investment is. It’s a simple process to open an account with a P2P lender and pay money in via direct transfer or using a debit card. The lender can then set the interest rate or agree one with the recipient and choose a fixed period of time for the loan. Some sites charge a fee to lend money.

  • Equity crowdfunding

This is where people invest in unlisted early-stage small businesses in exchange for shares in that business. A shareholder, therefore, will profit along with the company is it does well, and vice versa. If the company fails, it is possible for investors to lose some, if not all, of their investment.

Traditionally, only venture capitalists, wealthy people and investment angels could invest in start-ups. The shift towards crowdfunding equity in businesses opens the door to a much larger number of possible investors.

  • Venture capital funding

This is a form of financing that investors provide to small businesses and start-ups with long-term potential for growth. Generally, venture capital funding comes from wealthy individuals, financial instututuons and investment banks. However, it doesn’t always come solely in monetary form. It can be in the form of managerial expertise.

VC funding is increasingly popular with new smaller businesses, particularly if they’re struggling to gain access to bank loans or other forms of lending.

James Turner, Managing Director of Turner Little Limited says: “While Brexit certainly plays a part in small businesses seeking out alternative financing away from traditional banks, this is also part of changes in the business world as a whole.

“Crowdfunding, secure platforms, cryptocurrency, FinTech and the ramping up of innovative, workable ideas is transforming the business world year after year. Small businesses are finding there are new ways to access funds from disruptive start-ups and small businesses offering a way to maintain cashflow away from the usual channels. Banks must find ways to compete in this new market and acknowledge that small businesses in the UK are demanding more flexibility and personal service from lending streams.”

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.

Research shows what UK SMEs really want from banks

Recent research from YouGov, the Telegraph and Yorkshire Bank shows that UK SMEs are experiencing high levels of confidence, and this affects how they deal with banks.

UK SMEs have money to invest but aren’t prepared to be overcharged on banking fees. And while only 11% say they want to switch banks, most want a better deal and service than their current bank provides.

UK SMEs should work with their bank

It’s no surprise that better services and rates make certain banks more attractive to UK SMEs. However, small and medium sized enterprises arguably have more power than ever before. We live in a time where SMEs can access finances in many different ways, and where the market has diversified hugely. Banks should understand that the personalised approach makes a big difference to smaller businesses.

The ideal relationship between a bank and SME should be collaborative, with the company working with the bank to analyse the best way to do business. Gavin Opperman, Group Business Banking Director for Yorkshire Bank, says: “In terms of how the business bank relationship can play a role, SMEs should also analyse their business together with their banker and advisors to identify any levers which can be pulled to free up cash, or any new markets that could further diversify their income base. This can hedge against economic uncertainty and reduce outgoings.”

Small businesses want better business rates

Just over 40% of respondents to the survey say they want better fee tariffs and interest rates. And a separate piece of research by the Federation of Small Businesses (FSB) shows why. Borrowing costs for SMEs have reached a four-year high, and this can be a major problem for small businesses.

However, while borrowing and banking in general is more expensive, few SMEs say they have problems accessing finance. More than 75% say they have sufficient access to financial sources when they need them. Encouragingly, only 4% of UK SMEs report that debt management adversely affects their company finances.

Financing options for small businesses have increased over the last ten years due to significant market development. For example, the launch of the British Business Bank increases funding supplies to smaller businesses. The rapid growth of the alternative finance industry, which offers solutions such as invoice finance, peer-to-peer lending and crowd-funding has also increase options for SMEs.

Businesses better prepared following financial crisis

As well as these significant changes within the market, there is also the legacy following the financial crisis of 2008. This encouraged businesses to ensure they build up cash reserves for operations and growth, so that they are prepared should they suddenly lose access to financial providers.

The Institute of Chartered Accountants in England and Wales (ICAEW) revealed in 2017 that 61% UK small businesses have a cash surplus.

James Turner, Managing Director of Turner Little Limited says: “We can assume that UK SMEs are focusing on building a cash surplus, particularly as we go through Brexit uncertainty. It does seem that, to a certain extent, smaller businesses in the country are delaying substantial investment until we have a clearer picture of how the country will be affected by leaving the EU.

“However, the report’s key findings include the fact that 39% of UK SMEs are not threatened by Brexit at all and say that they don’t think it will affect them in the slightest. This is encouraging news, as we move into the final phases of the negotiations with the EU, as this sort of resilience bodes well for the future of small businesses in the UK, whatever the final deal turns out to be.”

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.

How Brexit could be good news for innovative start-ups

Brexit could be good news for innovation, if the Government helps make it a success. This is the view of Dave Philp, Head of R&D Tax at Chiene+Tate accountants. He says that withdrawing from the European Union will give ministers freedom and funding to incentivise new product research and development.

Currently, the UK is one of the best locations within the EU to launch a start-up business. We have sufficient tax incentives, grant funding initiatives and access to a wide talent pool. All of this supports UK companies in progressing tech innovation and advancement to push through barriers and become world-class businesses.

Does Brexit threaten innovative start-ups?

While media attention has focused on the threat that Brexit presents for innovative start-ups in the UK, it could also provide a welcome opportunity. Leaving the EU will impact some of the access to funding streams and grants, but it will mean the UK Government has a golden opportunity to switch up the way they support start-ups. They could introduce more generous measures to support start-ups through the tax system, for example.

Some grants, such as Horizon 2020, will not be available to UK start-ups should we leave the EU with no deal. UK Government guidance says that if there is a no-deal Brexit, businesses will forfeit future funding for projects that come under EU programmes. And, while the Government announced that it would honour the projects that were signed off before Brexit, there are no plans to do so after the UK’s proposed exit from the EU on 29 March 2019.

Turning negatives into positives

There’s no doubt that the one thing businesses of all sizes want is stability. And, the ongoing Brexit negotiations are shaking this. It’s likely that some tech start-ups are affected by this uncertainty. However, the most innovative minds excel under pressure, and many successful business owners turn weaknesses into strength.

For innovative, forward-thinking, cutting-edge start-ups and small businesses, Brexit is just another challenge along the road to success. The Government could attract companies focused on innovation and invention by providing R&D (research and development) tax relief. It’s a flagship incentive scheme that helps companies, including start-ups that typically make little revenue but have high expenditure levels early on.

R&D tax relief is one of the most generous corporation tax breaks provided by the Government. Designed to help businesses improve processes and invest to ensure success, it offers a tax credit of up to 33p on every pound of expenditure on activities focused on innovation. By using this effectively, start-ups can maintain a positive cash flow in the crucial early days.

Opening up opportunities for innovation

While this kind of tax relief has had a positive impact on lots of UK companies, it does have certain limitations. The tax relief complies with EU law and has been changed many times following objections from other EU member states who felt it gave the UK a competitive advantage.

When we leave the EU, the UK will no longer be bound by these restrictions on this kind of tax relief. This presents the Government with an excellent opportunity to expand its scope and add in other incentives for innovate start-ups to thrive after Brexit.

James Turner, Managing Director of Turner Little Limited says: “Brexit has caused a certain level of difficulty for some businesses, particularly those who want clarity on the final deal. However, it should be emphasised that Brexit will be a great opportunity for the UK Government to make different decisions for funding and supporting innovative UK start-ups.

“The chance to alter incentives such as the R&D Tax Relief is a golden opportunity for positive change that could completely transform the fate of start-ups in the UK. Small businesses are the backbone of the UK economy, and will be even more vital to the success of the country after we leave the EU. The Government could fuel further innovation in business and as a country we will continue to build on our excellent reputation as the perfect base for innovation.”

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.

Six MarTech and AdTech UK start-ups worth watching

The race is on for UK start-ups to transform the future of brand advertising and digital marketing. Advertising tech (AdTech) and Marketing tech (MarTech) are two powerful industries packed with innovative businesses making their mark.

 

Research by Gartner shows that, on average, marketing leaders in the UK and in North America spent 29% of their budget on MarTech in 2018. This was a rise of 7% on the spend in 2017. It’s expected that this increasing interest in these sectors will continue, as businesses continue their digital transformations.

 

Six UK start-ups worth watching

We’ve listed some UK start-ups who are already busy in these sectors. The businesses here highlight the changing needs of companies in every sector, as they strive to improve productivity and make the most out of their marketing spend.

  1. PPC Protect

This is a start-up that hones-in on a specific area: stamping out click fraud in PPC (pay-per-click) campaigns. Click fraud is when bots, click farms or competitors create fake impressions. This annihilates the advertiser’s Google Ads budget. In 2017, this kind of fraud cost advertisers an estimated $16 billion.

PPC Protect provides automated software that is designed to stop the click fraud and provide protection for future campaigns. When click fraud is detected, the software bans the IP address from accessing another ad. The company currently protects more than 35,000 Google Ads accounts.

  1. DataSine

This London based MarTech start-up uses machine learning and Artificial Intelligence (AI) to allow businesses to personalise their communications at a massive scale. Machine learning gains an understanding of the customer base and targets ad content. They work with BNP Paribas, Hello bank! Belgium and Tinkoff Bank, among others. The company secured £4 million in series A funding by February 2019.

  1. SuperAwesome

This digital ad platform is designed to improve safety for children. It ensures child controls are in place on online content, including marketing and digital material. This allows kids to play games without seeing adult content. It’s already used by hundreds of companies aimed at children, including Lego, Hasbro, Disney and Mattel. The next step for the company is launching a social platform just for kids, called Popjam. It promises to be the home of only safe social content.

In 2018, the business announced a 75% increase in revenue, to $60 million. The start-up began in the UK but is now global.

  1. Sceenic

This UK start-up works with media businesses to provide effective audience engagement solutions using interactive viewing experiences. Founded in 2016, Sceenic provides technology that allows companies to create sophisticated experiences for customers. Customers include eSports and BT Sport. So far, Sceenic has raised £210,000 in funding since launch.

  1. Qubit

London-based start-up Qubit is on the cusp of life beyond launch. It now has more than 260 employees and raised £40 million in Series C funding in February 2019. The funding is led by Goldman Sachs, and clients include the likes of TUI, Thomas Cook and Topshop.

Qubit focuses on web optimisation and personalised digital customer experiences across digital platforms. It’s a marketing hub platform and was designed by four ex-Google employees. Built on open-source software, it’s a sophisticated database with a simple, easy to use front end.

  1. Unruly

Another company crossing over from being a start-up to something more established, Unruly has more than 250 employees across 12 separate markets. It’s a video advertising platform promising content that will go viral. CEO Sarah Wood says: “Our mission is to deliver the most awesome social video campaigns on the planet, so this video advertising for brands. We don’t make the videos, but we make them famous.”

Unruly tools provided for advertisers include Activate, which is a programmatic video platform, an analytics suite for benchmarking and tracking, and ShareRank, a predictive tech algorithm that evaluates how shareable a video ad is before launch. Unruly has run campaigns for huge brands, including Guinness and Coca-Cola.

James Turner, Managing Director of Turner Little Limited says: “The explosion of interest in digital platforms for marketing and advertising is an exciting opportunity for UK start-ups. Now that it has become in the interests of just about every business to cut costs by streamlining their services using tech, we are seeing innovative and impressive start-ups acquiring vast amounts of funding and really making an impact.

“These sectors will continue to grow and are a strong example of the importance of UK start-ups and small businesses to the country’s economy. We have a wealth of talent and expertise, as well as hundreds of innovative, forward-thinking entrepreneurs who will take the UK forward into a positive space post-Brexit.”

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

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

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

UK SMEs dealing with increased costs in devolved regions

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

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

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

UK SMEs in construction sector most vulnerable

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

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

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

Fewer businesses in devolved regions

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

 

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

 

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

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

 

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

Why money management should matter to small business owners

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

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

Here are some financial management tips for small business owners:

  1. Manage payment terms

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

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

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

  1. Establish a cashflow budget

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

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

  1. Review accounts payable regularly

 

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

 

  1. Cut expenses where possible

 

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

 

  1. Understand your customers

 

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

 

  1. Ensure invoices are accurate

 

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

 

  1. Employ a credit controller

 

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

 

  1. Negotiate better terms with suppliers

 

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

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

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

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

Why market research is key to small business success

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

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

Market research vital for small business success

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

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

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

Using less to achieve more

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

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

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

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

Analyse data you already hold

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

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

Look for high quality data

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

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

Be flexible in your approach

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

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

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

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

Strong uptake for streamlined small business registration service

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

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

Small business registration simplified

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

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

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

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

Never been easier

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

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

The Industrial Strategy Programme

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

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

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

Small businesses suffer growing pains

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

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

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

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

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

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

Small businesses beat larger rivals on inclusion and diversity

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

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

Financial advantage for small businesses

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

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

Small businesses generally more diverse

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

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

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

Stark contrast between large and small businesses

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

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

Government moves to increase gender diversity

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

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

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

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

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

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

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

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

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

Why UK SMEs must protect their digital future

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

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

Improving efficiency is the top challenge for UK SMEs

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

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

Working in the Fourth Industrial Revolution

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

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

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

The Internet of Things – challenges and benefits

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

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

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

Legislative changes to cyber security

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

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

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

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

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

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

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

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

Small businesses in the UK are suffering

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

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

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

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

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

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

Regional variations across the UK – and the impact

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

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

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

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

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

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

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

What is and Where are the tax havens?

A tax haven is any country that allows you to reduce the amount of tax you pay.

Let’s state at the beginning that there is nothing wrong with using tax havens provided you are careful not to break any rules in your country of residence.

Some people use tax havens to hide their money from the tax authorities in their home countries. This is not only illegal, it’s very stupid, because one day you will probably be caught and could end up with substantial fines as well as back-taxes and possible even a jail sentence.

Notwithstanding, if you have the legal right to use a tax haven you would be foolish not to take advantage of all the opportunities you can to maximise your wealth.

There are three principal types of tax haven:

Zero – Tax Havens

These are countries that do not have any of the three main direct taxes most of us are familiar with:

  • No income tax or corporation tax
  • No capital gains tax; and
  • No inheritance tax

Some of the nil tax havens, you have probably heard of or read about or even seen in films; you may even have been on holiday in some. Amongst others they include:

Anguilla
Bahamas
Bermuda
Cayman Islands
Dubai
Monaco
St Kitts and Nevis
Turks & Caicos Islands
Vanuatu

Although there are no direct taxes in these jurisdictions, the governments there still need to generate some income. What they tend to do therefore is to impose licence fees for company incorporation documents or annual registration fees for companies; these charges are usually fixed and relatively small. If you’re considering living in one of these territories, most of these charges won’t apply and you may be able to live with little state involvement in the way of taxes. The only tax charges that might then affect you would perhaps be import duties or local sales taxes.

Foreign Source Exempt Havens

These countries do charge taxes and sometimes they can be at a high level. However, they are tax havens by virtue of the fact that they only tax you on locally derived income.

In other words, if all your income is earned outside the tax haven, you will not pay any tax there. Please be aware though that you may incur a liability for tax in the country in which you actually earn the income. Some examples of foreign source exempt tax havens are:

Costa Rica
Hong Kong
Panama
Seychelles
Singapore

This type of tax haven exempts any income earned from foreign sources from tax, provided the foreign income source does not involve any local business activity.

Some of the other tax havens don’t even allow a company to conduct business of any sort internally if tax advantages are to be claimed.

Jurisdictions such as Panama and Gibraltar would require a company to decide at the time of incorporation whether it was allowed to do local business (and therefore be taxed on its worldwide profits), or only foreign business and therefore be free from taxation.

Low-Tax Havens

The final group of so-called tax havens are countries that do have a system of taxation and do impose taxes on residents’ worldwide income. You may well ask why these are still known as tax havens. There are principally two reasons:

  • Certain countries may grant concessions that offer tax advantages in specific situations (capital gains tax avoidance for example).
  • Appropriate use of double tax treaties that countries enter into with each other which may allow you to lower your tax bill.

Good examples of low-tax havens are:

Austria
Barbados
Belgium
Cyprus
Denmark
Switzerland
The Netherlands
The United Kingdom

Other Important Factors to Consider

When considering tax havens per se, whilst the amount of tax they levy is obviously important, it is not the only factor.

You may not for example, want to risk investing your money in an offshore account in a politically unstable country; particularly if there is a risk that your assets could be expropriated.

Tax planning therefore, is only one consideration. Other important considerations are:

  • Privacy. What is the level of confidentiality?
  • Ease of residence. Is it fairly easy to obtain permission to live in the tax haven?
  • Political stability. Is there a risk your cash could end up in the government’s coffers?
  • Communications. How good are telephone and broadband internet access?
  • How easy is it to travel to the country?
  • Lifestyle factors. What is the standard of living? Are schooling and hospitals up to standard?
  • Is the climate suitable?
  • How high is the cost of living?

Ultimately, it’s a question of what you want from life and from your tax haven; are you concerned only with the tax position or are other factors equally important?

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, 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.

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.

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