Switching banks increasingly popular with small businesses

According to reports published in Computer Weekly on 25 July 2019, a growing number of UK small and medium sized businesses (SMEs) are switching banks. The data shows that in Q2 2019 twice as many SMEs used the Current Account Switch Service (CASS) when compared with the same period in 2018.

CASS is operated by Pay UK, and its data shows 17,687 UK small businesses swapped banks in the second quarter of 2019. Just 8,000 UK SMEs swapped banks in Q1 2018, showing a change of attitude for the sector.

Switching banks made easy

The scheme to make bank switching easier for small businesses was launched in 2013 and is one of a number of regulatory changes designed to improve the financial services sector. Pay UK Chief Operating Officer, Matthew Hunt says in a statement: “There can be many benefits gained from switching current accounts and our aim is to continue to ensure that consumers are aware of the options available to them.”

When should small businesses change banks?

The data also shows an increase in the number of challenger banks on the market, specifically targeting SMEs. So, when is it a good time for a small business to change banks?

  1. You’re getting hit with big banking fees

There are all kinds of banking fees your business might be charged, ranging from ATM fees to overdraft charges. Statistics show that in 2016, the big banks made more than £27 billion in overdraft charges alone. However, it’s not only big banks that charge fees.

When opening any kind of account with a financial provider, you should carefully check whether there are any hidden fees. You may find that accounts require a certain number of transactions, for example. Overdraft fees can be incurred by just one unplanned for outlay. If your business accounts are constantly incurring fees, it’s time to look for another banking provider.

  1. You’re not happy with the customer service

If you find you’re unable to speak to someone about any problems you have with your business bank account, it’s time to look elsewhere. Consumers are increasingly demanding better customer service and expect to be able to access it fast. This is why challenger banks are able to disrupt the traditional big banks. They are offering 24/7 communication and easier access to assistance.

  1. You never use offline services

If you’re with a traditional bank that offers branch assistance, yet you never use it, it could be time to switch. You’re generally paying extra in fees for services you don’t even use. More businesses bank entirely online than ever before, and just don’t need the in-branch service.

  1. The bank’s website and app just aren’t up to scratch

This may sound like it’s not a big deal, but when you use online services, whether desktop or mobile, it’s important that they work properly. An app or web service that has a confusing user interface or has too many unnecessary steps can be a deal-breaker. It’s easier for businesses to stay in control of their business accounts and cashflow if they can access everything they need easily and quickly.

James Turner, Managing Director of Turner Little Limited says: “Double the number of small businesses are switching banks compared with last year, showing that consumers are reacting to the increased offerings from challenger banks in the sector. The Fintech and banking disruption caused by challenger banks is in direct response to the changing needs of business, and in particular from SMEs that are demanding more from their financial services provider.”

“This healthy competition is long overdue in the financial services sector, which has long been out of reach for many small businesses and self-employed business owners. The Government recognises the importance of the SME sector in the UK as the main driver for the country’s economy, and the more steps taken to open up competition in the banking sector, the better it is for small businesses.”

“Business owners should take stock at regular intervals and look at whether they are getting the best, and cheapest, service they can from their financial provider. If not, there is no reason why they shouldn’t shop around until they find the best services for them, whether that comes from a traditional big banking institution or a challenger start-up.”

 

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.

Government cash boost for small business innovation

Innovative businesses in the UK could benefit from a cash boost of £125 million. From this total, £100 million is available in Government grants for research that is deemed pioneering. The remaining £25 million as loans for the commercial aspect of transforming ideas into reality.

Any size of UK businesses, including SMEs, can compete to win a slice of the £125 million. If successful, the money will go directly into transforming their ideas into reality in the form of world-leading products and services.

Small business innovation grants

The £100 million is available through the Innovate Smart grant initiative, and applications are now open. Past winners of the Innovate Smart award include Magic Pony Technology, which was sold to Twitter for a reported $150 million earlier this year.

Magic Pony Technology is a London-based start-up that develops machine learning techniques based on neural networks. These systems are designed to operate and think like human brains, and are used to enhance photos, videos and to develop graphics for augmented reality or virtual reality apps. Co-founders CEO Rob Bishop and Zehan Wang stayed on as part of the deal.

The third start-up focusing on machine learning that has recently been acquired by Twitter, Magic Pony Technology benefited from SMART funding, as well as from investors including Entrepreneur First and Octopus Ventures. It’s the perfect example of what can be achieved by smart start-ups with ideas and expertise.

How to apply for Smart funding

If you want to find out about how to apply for the next round of Innovate Smart funding, see the Government website. Applications opened on 25 July 2019, so now is a good time to get involved if you have the right business idea and backing.

Smart is the new name for the Open Grant Funding programme from Innovate UK. Applications can be from all kinds of technological backgrounds, including media, creative industries, arts and design, engineering or science, and can be applied to any part of the economy.

Any application has to include at least one SME, and the project must run between April 2020 and April 2023. Different rules apply to projects, depending on their projected length:

  • Projects scheduled to last between six and 18 months must have projected costs between £25,000 and £500,000.
  • Those scheduled to last between 19 months and 36 moths must have total project costs between £25,000 and £2 million and be collaborative.

Lead businesses within each consortium must be based in the UK and can be any size. They must also be carrying out the research and development (R&D) project within the UK.

Either be an SME if they want to go through the project independently or include at least one SME if a large company that wants to collaborate.

The project team that wishes to work with the lead business must be based in the UK, and be other a business, charity, public sector organisation, or academic organisation, and must also be conducting the R&D in the UK. Other stipulations include proof that it is intended to commercially use the results in the UK.

Further support grants

There is also a further £25 million allocated through Innovation Loans to go towards projects that are in much later stages and are near to going on the market. This scheme is focusing on businesses that need help to het over the final barriers to commercialisation.

In a press release, the Government’s Business Secretary, Greg Clark, says: “Through our modern Industrial Strategy, we are backing our homegrown businesses to boost productivity and create jobs, growth and opportunity in every part of the UK.”

Many businesses have already benefitted from funding provided by the Government to support innovation, including Digital Shadows. This online digital risk company has raised £20 million to fund its innovation that was developed using a Smart award.

James Turner, Managing Director of Turner Little Limited says: “Smart grants and other funding through Innovate UK are great ways for the Government to support innovation in either single businesses or collaborations between different sectors. With the deadline for the UK leaving the EU currently set at 31 October 2019, it’s important for small businesses to plan ahead.

“Applying for Government support is a way to ensure innovative ideas make it through to completion, therefore boosting jobs and the wider economy. The Government is increasingly recognising the importance of the SME sector to the economic stability of the country, which is encouraging. As we continue to move through uncertain times, it’s important that small businesses continue to push forward with innovative and disruptive products and services.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, 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.

Equity crowdfunding – everything you need to know

If you’re in the business world, you will have heard of crowdfunding. An increasingly popular way of raising money for charity, crowdfunding moved into the mainstream a few years ago.

By 2011, equity crowdfunding became available for small businesses, start-ups and entrepreneurs to raise capital. Here’s everything you need to know about raising money for business through crowdfunding, and how to begin the process.

How does equity crowdfunding work?

In this context, we’re talking about equity crowdfunding. Start-up businesses can raise capital through equity crowdfunding by selling shares through a platform regulated by the Financial Conduct Authority (FCA). They give private investors at all levels the chance to invest and starting stakes can be as low as £10.

In the UK, there are three major crowdfunding platforms: Syndicate Room, Crowdcube and Seedrs. All of these platforms are regulated and offer similar services.

Equity crowdfunding has been in existence in the UK since 2011 and has grown so fast that many experts see it as a mainstream channel for fundraising. While some dispute this, there is no arguing with the figures. The total raised across crowdfunding platforms between 2011 and 2018 is estimated at between £600 million and £800 million.

Which platform works best?

If you’re deciding between platforms, there is no single site that is ‘better’ than the others. Crowdcube is bigger than Seedrs, and it has been running longer. However, Seedrs offers different packages and include relatively thorough due diligence.

Syndicate Room, on the other hand, is generally for more high-level investors and technology-based businesses. If this is your area, then it’s a good option. It requires a lead investor and is more formal in terms of structure and running your campaign.

You are charged by the platforms for successful campaigns only. The costs range from between 4% and 8% of the total money raised on the platform, and while you can spend more, the beauty of crowdfunding is that it’s a cheaper way for start-ups to gain capital. The biggest costs usually lie in the pitch and video, which costs around £5,000 on average.

There is also the time you need to put into creating the campaign and running it. This can be tricky for start-ups that need to focus on running their business. Some businesses choose to employ a specialist consultant to run the campaign and give it the best chance of success.

How do the equity crowdfunding platforms make money?

The crowdfunding platforms make money by taking commission on the amount raised from a successful campaign. Should the campaign fail to reach its target, then all investments are scrapped, and no funding reaches the company. It’s worth noting that a campaign that fails to secure more than 30% of its target during the first few weeks, rarely makes it to the finish line.

If you want to raise money for your business through crowdfunding, it’s important to clearly state why you want the funding. Investors expect to be told exactly where their money will go, and how this will push the company towards more profitability. Investors are interested in one thing – return on investment (ROI) – and you must be able to demonstrate how they will get this.

Create a thorough business plan, that includes details of where the money is going, and how this will elevate your business to the next level. You should include realistic, demonstrable projections. When you have completed this vital step, choose the right crowdfunding platform and apply.

Requirements and eligibility

Some crowdfunding platforms stipulate that you must have at least 20% already in your campaign, before they will launch it to the public. The campaign will therefore usually launch in a private mode. This allows you to gain enough funding to hit their threshold from existing contacts, and then hopefully collect the rest from the platform’s audience.

Your pitch deck and business plan video should be tailored to the platform of your choice. The pitch should be succinct, compelling, realistic and believable, and the video three minutes long. Remember that this kind of fundraising needs a different approach to angel investment and should be tailored accordingly.

Campaigns generally last between 30 and 60 days, depending on the platform. It can take up to eight weeks to prepare the pitch to the platform’s specifications and go through the requisite due diligence. It’s best to give yourself 12 weeks running up to launch.

How does equity crowdfunding work?

Equity crowdfunding is available as an option to any limited company. Having said that, it’s best suited to new businesses that are less than seven years old, or start-ups. It’s also only viable for businesses that plan for exit in order to ensure investors get their ROI.

It’s difficult to get exact figures of how many campaigns have been successful, but estimates show more than 1,200 funded companies. These numbers are increasing every year, as equity crowdfunding becomes more mainstream.

Each platform will usually have between 20 and 30 live campaigns going, and around two-thirds of these won’t make it. The most common reasons for crowdfunding to fail include poor quality presentations, a poor idea that can’t be scaled, overvaluation of the company, selecting the wrong platform and failing to secure the minimum threshold before launch.

While equity crowdfunding is regulated in this country by the FCA, there are high risks for investors. However, it does give them the opportunity to get involved with start-ups at the beginning of their journey. They choose to invest based on an educated estimate of the chances of getting ROI, but some also invest smaller amounts based on the rewards offered.

 

James Turner, Managing Director of Turner Little Limited says: “Smaller investors also get their money back through tax breaks and through the perks offered at different stages of investment. Good start-ups and businesses that are raising money this way will always include investors in the ongoing success and growth of the company.

“This is definitely a viable way to raise funds if you are a start-up owner looking for backing. However, you must have a watertight business plan, and evidence to show investors that they will get their ROI at some point. Any company that doesn’t plan ahead effectively before crowdfunding is likely to fail to reach their target. And as this does require some time and money invested upfront, it’s worthwhile taking advice from an expert in equity crowdfunding before you go down this route.”

 

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 to set up a share option scheme to incentivise employees

Retaining and incentivising key employees should be a priority for small and medium sized business owners. And one of the best ways to effectively do so is through a share option scheme.

Share options are tax efficient for both the employees who will benefit, and the company itself, making them a sensible option. However, it’s important to understand the ins and outs of share option schemes before committing, in order to achieve the best outcome. Here’s what you need to know.

How to get the most out of a share option scheme

The most commonly used share option scheme is the Enterprise Management Incentive (EMI). When a start-up is established, the owner will offer employees share options under the EMI scheme. Usually, employees can only use the share option when the company is sold on. This means they don’t have any other rights as shareholders other than to receive the value when it’s sold, thus incurring no direct cost to the business or its owners.

If the EMI scheme is implemented effectively, employees are able to pay capital tax (rather than income tax) on the money they make after the sale of the shares. They also might be able to claim entrepreneur tax relief, which will reduce the capital tax they owe.

The company itself is able to claim a deduction in corporation tax for the cost of this scheme, as well as the extra market value of the shares over the amount paid by its employees.

Does the EMI scheme work for all small businesses?

The EMI scheme only incentivises employees who buy into it. Therefore, a small business must also include other incentives for employees who don’t wish to do so. These could include other share option schemes, or types of bonuses.

If the key employees aren’t full time employees, and instead work as contractors, freelancers, work for less than 25 hours a week then they aren’t eligible to benefit from an EMI scheme.

Other schemes offering tax advantages include a company share option plan (CSOP), which is similar to EMI. Alternatively, the company could implement share incentive plan (SIP) or a Save As You Earn (SAYE) scheme, both of which have very different structures.

Rules and regulations for share options

Before a small business can implement a share option scheme, the shareholders’ agreement and any articles of association must be checked. If they don’t allow for the adoption of such a scheme, then they must be formally amended.

In addition, there are statutory requirements:

  • The company must have a turnover of less than £30 million.
  • It must have fewer than 250 employees (full-time).
  • It must be independent, which means it can’t be a subsidiary of another company or controlled by another company.
  • Any subsidiaries must be at least 51% owned.

The company also has to introduce clearly communicated rules so that everyone knows the ins and outs of the share options scheme. This should include the following:

  1. A clear explanation of when the share option can be exercised. For example, whether it is after a certain number of years, or only when the company is sold.
  2. The conditions that apply to exercising the option for employees.
  3. When the share option should lapse if the employee leaves the company.
  4. What happens should the company undergo a formal reorganisation.
  5. What the existing shareholder protections are.

James Turner, Managing Director of Turner Little Limited says: “A share option scheme valuation should also be sought so that taxation on the exercising of the option can be clarified. EMI options also have an individual limit that can be held by a single employee. Therefore, it’s necessary to agree the market value of the share options with HMRC.

“We would always advise getting professional assistance when setting up an EMI share option, as there are various complexities that must be understood in order to implement the scheme effectively. Share option schemes like this can be essential for unleashing a company’s potential, and to give valuable employees a valuable exit option.

“However, not every company will benefit from an EMI scheme, and it is necessary to thoroughly analyse the company’s needs before selecting the appropriate share option scheme.”

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.

Amazon’s small business initiatives boost

While Amazon may not immediately spring to mind as champion of small businesses, the multinational behemoth has shifted focus over recent years. And this is in recognition of the growing gig economy.

As part of this drive to integrate small business owners into its overall business model, Amazon is teaming up with Enterprise Nation in the UK. The small business network and Amazon are launching ten pop-up shops across the country, called ‘Clicks and Mortar’.

What do Amazon’s small business initiatives involve?

The first Clicks and Mortar shop has opened in the centre of Manchester, with Wales, the Midlands, Yorkshire, Scotland and the South East following suit. The shops offer an opportunity for more than 100 small business online brands to interact with customers face-to-face. The idea is to boost both high street and online growth for small businesses.

This pilot programme will operate for 12 months around the country as an experiment to see whether online brands can reach high street consumers. The UK Government will analyse independent research about the scheme’s success. They will use the analysis to construct and inform the Future High Streets Fund strategy.

Government support for UK SMEs

The fund aims to support plans for local areas to improve town centres and high streets to future-proof small businesses against the rise of online sales. The Government says in the plan that they recognise changing consumer patterns and the need to adapt high streets to meet new demands.

An emphasis will be on the general experience levels of high streets, to offer something that can’t be found online. The current Government says it is committed to helping town centres adapt as part of its Our Plan for the High Street initiative, which carries funding of £675 million.

The Government also says it will cut business rates by a third for two years, offering this to selected retail properties. The Future High Streets Fund, which Amazon’s research will contribute towards, is part of the wider plan and will provide funding for transformative projects.

What is Amazon’s SME Apprenticeship Fund?

In addition, Amazon is also providing its new SME Apprenticeship Fund, which is worth £1 million. This is part of a package of new measures to practically help SMEs by training their workforce in digital and retail skills. It will create more than 150 roles that cover digital marketing, customer services and business administration.

The apprentices in these roles will work full time for SMEs that sell products on Amazon. The idea is for these apprenticeships to boost UK SME productivity by upskilling the workforce. The apprenticeships run for at least 12 months and offer online, at work and classroom training.

Any SME registered in England that owns a brand selling on Amazon can apply. To be eligible your business must have a turnover of less than £2 million.

Free training for UK small businesses

As well as the Apprenticeship Fund, Amazon is announcing its Amazon Academy 2019 programme. This brings a range of completely free training events across the country offering practical training to help UK small businesses. The training focuses particularly on helping small businesses boost their export sales and reach more people around the world.

Founder of Enterprise Nation, Emma Jones MBE, says that the intention behind teaming up with Amazon is to help small businesses by combining the best of high street and online retail. In Amazon’s blog she says: “This new concept will provide small businesses with the space, technology and support to experience physical retail for the first time while enabling customers to discover new brands on their local high streets.”

Adds James Turner, Managing Director of Turner Little Limited: “There is an increasing and welcome awareness from both the Government and multinationals of the importance of the small business community in the UK. For the UK’s economy to survive the impact of Brexit, and to thrive in a post-EU trading environment, it’s essential that small businesses are supported in every way possible”.

“These initiatives from Amazon and Enterprise Nation are welcomed by struggling high street retailers. There is a pressing need for the British High Street to adapt to the new expectations of consumers used to shopping in a digital online world. By finding a way to amalgamate physical bricks and mortar shops with online brands, a new era for High Streets can be formed.”

Small businesses are one of the most important sectors in the UK, and initiatives like this will provide a boost in skills, job creation and growth across the country. All of which will contribute to a stronger 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, 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 importance of getting terms and conditions right

In the rush to cover everything needed to launch a small business, certain aspects can be neglected. For example, many underestimate the importance of terms and conditions for small businesses.

Ensuring terms and conditions are prominent, accessible, easily understood and legally correct is vital for small businesses to avoid potentially expensive legal action. Customers are legally entitled to information that shows exactly what they’re buying and what your business terms are. This is particularly important if your business operates online.

Terms and conditions for small businesses

Terms and conditions (T&Cs) for small businesses are those contract clauses that spell out the obligations, rights and legalities pertaining to both parties entering a contract. Businesses that hide their T&Cs or attempt to blur boundaries with wording or accessibility, are still liable.

A mistake some businesses make is believing that, if they hide pertinent T&Cs in the small print and a customer signs the contract, the customers is still bound by them. In the eyes of the law, this is not the case.

Legal precedent for T&Cs

In 1940, there was a landmark legal court case regarding a local authority’s T&Cs. It centred on whether the local authority could legally rely on a disclaimer against personal injury, which was on the reverse of a ticket given to a person who hired a deckchair from them.

The courts said that this kind of disclaimer must be clearly and obviously brought to the attention of the customer when the contract was being made. Therefore, the local authority should have spelled it out at the same time the customer bought the ticket. However, in this case, the customer received the ticket (with the information printed on the back) after he had paid the money to the local authority. Therefore, the court ruled the disclaimer was not valid as the customer had had no opportunity to refuse the contract based on the actuality of the terms.

Legally, the same applies to T&Cs. They must be clearly brought to the customer’s attention before contracts are signed. The only sure way to do this is to make sure that they are easily visible, clearly written and highlighted. Often, this is where the tick box comes in when you buy something online. The text accompanying the tick box says something along the lines of: “I the undersigned have read the terms and conditions and am happy to proceed.”

 Clarity is key for small business T&Cs

Small businesses should leave no room for ambiguity when it comes to T&Cs. If they are poorly drafted and rendered unclear, then customers might interpret them incorrectly. Ensure that there is absolutely no room for misunderstandings, by drafting succinct and exact T&Cs.

Simple terminology and an absence of legal jargon are best, as most people don’t have a thorough understanding of complex legal language. The more complex the wording used is, the less likely a customer is to read it. This could put them off the transaction. Some terms are more general. These include limiting liability, disclaimers and IP (intellectual property). In these cases, it’s acceptable to use pre-written clauses. More specific T&Cs for your business should be written from scratch.

If a client or customer says they were unaware of your terms and conditions but ticked the box complying with them, they do not have much recourse. Exceptions to this include if a term included in the T&Cs could be construed as ‘unreasonable’ or is legally unenforceable. If the customer wants to pursue the case despite this, the onus is on them to show clear evidence that the T&Cs are unenforceable. This is why small businesses should always include a tick box online before a customer signs a contract.

Every small business should include an easily accessible complaints procedure online. If a customer does pursue a complaint through this, it is always in the company’s best interest to try and resolve it immediately.

James Turner, Managing Director of Turner Little Limited says: “Small businesses should engage the services of a professional to ensure their T&Cs are working in their best interests. It’s not always clear whether a certain term is enforceable or legal, and specialist advice should be sought.”

“Every small business should have unambiguous, well-written, clear and accessible terms and conditions. They should be drafted to fit in with the specific needs of the business and should be considered legally enforceable and reasonable. This must be made clear to the customer before they sign a contract or buy a product or service. The rules are simple, but they are absolutely vital for small businesses who want to avoid possible legal headaches further down the line. T&Cs should also be periodically checked and redrafted if necessary, to comply with changing legislation or to better suit the 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.

Choosing the best business finance for start-up growth

Small businesses have many options for business financing. But this, in itself, can be overwhelming, particularly for start-ups focusing on multiple strands of growth. Deciding which finance option is best for your small business is imperative for growth plans to succeed. Here’s a breakdown of some of the types of business finance for start-up companies.

Defining business finance

Business finance for start-up – what is this? It refers to any funding raised by start-ups to help them grow. There are two main types of business finance:

  1. Debt finance – where a business borrows money from a lender and agrees to pay back in full plus interest. The money can be paid back in a lump sum, or through a long-term payment plan. The business does not have to give up any control or shares to access funding in this way.
  2. Equity finance – when a business raises funding by effectively selling shares to investors or another business. The stake’s value depends on the success of the business selling, which means investors retain an interest in its profitability and growth. Often, investors also bring their experience, skills and networking to the deal, in order to help the business grow.

It is rare for a start-up to be able to fund itself independently, which means the vast majority must raise business finance of some kind.

Which business finance should a start-up choose?

Both debt and equity finance both have pros and cons for small businesses.

  1. What are the advantages of debt finance for small businesses?
  • Tax relief is available on interest payments.
  • It’s relatively simple to plan ahead to make repayments.
  • Terms can be tailored in the best interests of the business.
  1. What are the disadvantages of debt finance for small businesses?
  • Penalty charges apply if you default on payments.
  • Cashflow can fluctuate, which could affect the ability to pay.
  • Lenders will analyse business and personal credit history.
  1. What are the advantages of equity finance for small businesses?
  • Investors can provide further funding as the business grows.
  • Investors can bring invaluable skills, expertise and resources to the table.
  • Investors take on some of the risk as they own a share and want to help the business succeed.
  1. What are the disadvantages of equity finance for small businesses?
  • Businesses dilute ownership.
  • There are lots of legalities to cover.
  • Raising equity demands time away from the business.

Business financing is the lifeblood of a small business, and particularly start-ups. The most recent analysis from the Office of National Statistics (ONS) shows the business ‘death rate’ is continuing a steady rise (for a number of years). This is stark evidence of just how tough it can be out there for small businesses and start-ups that want to survive and grow.

Potential sources of business funding for small businesses

Following the financial crisis in 2008, some traditional forms of financing for businesses dried up. This opened the door for some alternative, or less traditional forms of funding, for example, crowdfunding. Here are some of the main sources of funding available for both categories, starting with debt finance.

  • Bank loans – work well for large, long-term investments.
  • Bank overdrafts – useful to fund shorter term business plans or finance day to day working capital.
  • P2P lending – peer-to-peer lending uses online platforms that match borrowers with potential lenders. Loans can be small amounts or go up to millions. The platform charges a fixed fee or lenders outbid each other with competitive interest rates.
  • Asset-based financing – this covers both asset-based lending and invoice financing.
  • Hire purchase and leasing – useful for physical assets like company cars and office equipment. The option to buy is generally available at the end of the agreement. Works well for businesses that need equipment but can’t afford to buy outright.
  • Export finance – this covers a number of financial banking products designed to make it easier for businesses to trade internationally. It reduces defaulting risks or delayed payments, and bridges payment gaps when necessary.
  • Trade finance – helps businesses buy goods from domestic and international sellers. This generally covers specific goods shipments over set periods of time.
  • Mezzanine and growth finance – both of these are tailored to the needs of a business, so that the repayment plan matches its revenue forecast. Usually used to fund the expansion of existing businesses.

Potential sources of equity financing

  • Angel investment – ‘angel’ investors are wealthy people who put money into businesses in return for equity. They either invest alone or through a syndicate.
  • Equity crowdfunding – uses online platforms to link angel investors with businesses needing funding.
  • Venture capital – venture capitalists seek out unique businesses they believe will deliver high returns. They invest in a number of businesses, knowing that a percentage will fail. Often invest in early stage start-ups.
  • Private equity investors – they aim to improve a business’ profitability and to do so invest in new services and products, or into plans for expansion. They introduce a corporate and management structure to the business. The investment goes on for around five to seven years, after which the investor sells its shares and lists the company publicly.

James Turner, Managing Director of Turner Little Limited says: “This is not an exhaustive list of all forms of business financing, but it is a useful basis for start-ups unsure how to proceed. All small businesses need to access some kind of funding, and while it can seem a distraction in terms of time invested in securing the right kind of funding, it is key to growth.”

“Small business and start-up owners should carefully consider which form of funding is right for their needs. It may be that as they grow and expand, the type of finance needed changes. It’s always a good idea to engage a professional for advice on the best kind of funding for your business, particularly if you’re starting out.”

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 vital to small business success

When you’re starting or running a small business in today’s always-online world, it’s very easy to become distracted. While there are many demands on your time, the primary goal behind every small or medium sized business always comes back to sales revenue.

Sales are the backbone of your business, regardless of sector, product or service. And if this aspect of your business is struggling, then all other parts will inevitably follow. As with most factors of success in business, the answer lies in proper preparation and time spent on market research.

Market research shapes the future of small business success

One of the most important and powerful tools you always have access to lies in small business market research. Every business must have a plan for its future, and a clear roadmap for success. The best roadmap is one that generates the maximum number of sales possible.

Networking, talking to contacts, surveys and other forms of online and offline market research will give you insight into how to improve sales. Here’s why putting time into research can shape the future of your business:

  1. You will reach new customers and clients

You need to pull in new clients and customers. Whether this is physically through the door, to an ecommerce site, or any other platform, this is your number one priority. By conducting efficient market research, you will be able to monitor not only your own success in achieving this, but also that of your competitors.

By properly understanding how your direct competitors are faring, you will be able to adjust your strategy accordingly. Research is not something that should be carried out once for your initial business strategy, but constantly and often throughout the business year.

Making decisions regarding where to advertise, which online channels to use, and properly utilising the huge opportunities of social media, you can attract customers who are unhappy with your competitors. Adjust your offering to meet their needs, and you will gain new customers.

Tracking consumer responses to competitors will also show you where opportunities lie for partnerships with companies that could help you grow your business.

  1. You will increase customer spend and customer loyalty

A common mistake made by start-ups and SMEs is to only concentrate on winning new customers. Far more important in the long-term is cultivating and increasing a loyal, long-standing customer base. This is why thorough and consistent market research is key.

A key metric to include in research is Customer Lifetime Value (CLV). This concept hinges on understanding that your customers are assets that should be managed. Their value, therefore, should be measured and monitored. Proper assessment of CLVs are particularly important for small businesses creating services that are directly customer orientated. However, it’s also an important metric for other businesses that are offering secondary services.

CLV relates to the amount customers spend across every transaction. Research in this area allows small businesses to understand what consumers want and to adjust offerings accordingly. Market researchers can also ascertain why past customers have decided not to come back, and further adjust the direction of customer offerings to accommodate this.

  1. You will be able to set accurate and achievable goals

The most successful SMEs understand where they stand in their chosen market. They also have clear, realistic aspirations and goals. Market research that correctly combines qualitative and quantitative data helps business owners produce accurate long-term forecasts that they can realistically work towards.

If it is discovered that realistic predictions fail to match aspirations, then that’s the time to work out ways to improve. Research is a motivator, as well as an instigator of judicious change.

If the predictions fall short of your aspirations, this will be the perfect time to plan how to improve the situation.

James Turner, Managing Director of Turner Little Limited, says: “Starting a new business, and running an SME is an incredibly challenging job. There are many aspects that need to be in harmony for a company to fulfil its potential. In the UK, we rely on small and medium sized businesses to bolster the economy, and while innovative ideas are one part of launching a successful company, the ability to manage long-term success is just as important.”

“A market research strategy that goes beyond initial customer expectations of your product or service is a vital part of success. Organisation and thorough, in-depth analysis of the response to your business, and to that of your competitors, will push you past your competition. Market research will allow you to accurately predict future success and adjust your product or service accordingly. It should be part of your long-term business strategy from the start.”

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 small business sentiment is more optimistic

Getting a true picture of small business sentiment can be tricky, particularly as the business world waits to find out how Brexit will affect them. But Business Tracker, a tool created by Impact Social for the Daily Telegraph uses social media to analyse general sentiment.

And the latest analysis shows a distinct shift, this time towards optimism.

New analysis shows optimistic small business sentiment

The tracker analyses posts on Twitter from 25,000 UK entrepreneurs, small business owners and enterprises. Recent data examined 32,500 Tweets posted between 23 April and 27 May 2019.

During this period, 14% of the Tweets were positive about small business prospects, while just one in nine (11%) were negative. The tool eliminates all posts that could be considered neutral opinions, including marketing and advertising, leaving accurate opinions, which give an indication of the general trend towards more optimistic business prospects.

The analysis shows that 56% of small businesses are positive about their future, with 44% less sure. While this may not seem like much of a difference, it represents a change in sentiment. The previous three trackers were on a downward path, and between 31 January and 22 April, almost two-thirds of posts were negative. So, this latest data shows a real shift towards positive business sentiment.

Industry awards boosting mood

Businesses are celebrating winning industry and specialist awards, with 18% of the positive Tweets celebrating various trophies. In April 2019, the Queen’s Awards for Enterprise awarded the efforts and achievements of more than 100 SMEs, recognising their huge contribution towards innovation and international trade. A month later, the Federation of Small Businesses (FSB) held its annual awards, and EY also released the UK finalists for its international Entrepreneur of the Year competition.

While awards were the most popular positive commentary on Twitter, 14% also expressed public relief at the extension of Article 50. With Brexit now delayed until 31 October 2019, it seems that some small businesses are feeling more positive.

Other small businesses shared tweets about Brexit that show frustration at the delay (41%). Some say that the delay makes it more difficult to plan ahead. For example, Phil Cookson heads a recruitment agency called Creative Resource, and says on Twitter: “Should we invest in growing the firm or should we save rainy day cash in case of a no-deal?”

Around 15% expressed negative sentiments about Prime Minister Theresa May’s decision to resign on 7 June. Concerns expressed include the worry that the Tory leadership battle will distract the Government from Brexit, potentially wasting the opportunity the extension has offered.

Moving away from Brexit, other success stories from small businesses include successful investment (16%), more sales (12%). Around 10% of the positive growth stories come from regions outside of London.

James Turner, Managing Director of Turner Little Limited, says: “Despite the ongoing frustrations and delays over Brexit, and the announcement of the Tory leadership battle, it is encouraging to see many signs of optimism in the small business community”.

“Small business, entrepreneurs, sole traders and microbusinesses are the driving force behind the UK’s economy. During tough economic times, or periods of political instability, it is vital that the sector continues to move forward with growth plans. We may not yet know how the change of Prime Minister will affect plans for the UK to leave the EU in October, but it’s clear that compromise and consensus is needed for the country to move forward. Despite the challenges facing the business sector, it’s encouraging to see that optimism is growing among small businesses.”

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.

Will Open Banking help small businesses grow?

Open Banking is here, and it is potentially the most seismic change for financial services in a generation. Since reforms were introduced in January 2018 regarding financial data sharing, Open Banking has transformed the financial services market. Access to innovative, disruptive, easy-access financial services will profoundly change the way banks and their customers work together.

For small businesses, it means that for the first time more options are available to them to manage their finances. Instead of being restricted to a select few services provided by high street banks, small businesses can use tailor-made, specifically honed financial assistance in the form of apps, products, alternative lending and new tech platforms.

How will Open Banking affect small businesses?

We’re currently seeing the transition from traditional business banking to Open Banking. And while it is still early days, it will deliver a profound sea-change in financial management, on a personal and business level.

Most UK small businesses are yet to grasp the opportunity available to them, but research from PricewaterhouseCoopers (PWC) indicates a steadily increasing willingness to use Open Banking. At the moment, 40% of small business owners are happy to share their financial data for Open Banking purposes. By 2022, this will increase to 72% as SME owners grow their understanding of the benefits available to them. This means that by 2022, 4.8 million small businesses and 32.7 million consumers will be utilising Open Banking to manage their finances.

The propositions that will be created and offered by Open Banking to small businesses include:

  1. Bespoke, tailored lending based on an analysis of the SME’s account data.
  2. Improved cash flow management.
  3. Integrated tax and accounting services.

Transformative financial management

Open Banking is the term used for a set of reforms implemented in January 2018, following calls for reform from the Competition and Markets Authority (CMA). It essentially forces UK regulated banks to allow customers to share financial data with other providers that offer apps or banking.

This is subject to the provider being authorised, and the consumer or small business giving permission. It’s hoped that this will end the monopoly of the traditional banking sector and improve financial management services for both consumers and businesses. The authorised parties are regulated by the Financial Conduct Authority (FCA) and are on the FCA Register or the Open Banking Directory.

Opening up the market will improve small business finances

In 2018, there were 5.4 million small businesses registered in the UK, making up 96% of the total businesses in the country. This is a huge number of small businesses forming the very backbone of the UK economy.

Challenges faced by microbusinesses and SMEs include access to financial management, services and products. With few staff and fewer resources, often time is just not available for financial analysis. This can lead to small businesses missing out on assistance, loans, information and general financial help that could be critical for survival.

Statistics show that almost half of small businesses that failed to secure the full amount they wanted from a business loan simply gave up, cancelled growth plans or put their business on hold. More than two-thirds are willing to give up growth plans rather than borrow money.

James Turner, Managing Director of Turner Little Limited, says: “The general reluctance to access financial management assistance is one of the reasons behind the introduction of Open Banking. Small businesses will benefit from more competitive products and services within the financial sector. Open Banking is becoming a very exciting opportunity that could help to boost the country’s position on the world stage”.

“However, it can seem low priority for small business owners who are dealing with the day to day immediacy of running a business. They will begin to see more products and services opening up, even if they are not aware of the changes in the background. This can help small businesses in many ways, from speeding up access to cash, funding and loans, to assisting with realistic plans for growth. From expenses tracking to tax assistance, there are already loads of apps and services available that small businesses and sole traders should be aware of. These innovations are specifically designed to help real-life problems faced by small businesses and are provided by Fintech innovators”.

“Fintech and Open Banking have the power to give small business owners full control of their financial future. We are in the early days of this transformative time within the financial sector, but through adoption of innovative solutions, small businesses will be able to further support the country’s economy and thrive.”

 

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 small business owners can recoup late payments

One of the biggest problems start-ups and small businesses face are late payments. The costs to small business owners adds up to £6.7 billion per year just to chase outstanding invoices.

Clearly this is a major problem for small businesses with limited resources, and tight cashflow, as we highlighted earlier this year. In this blog we’re looking at what you can do as a small business owner to recoup late payments.

Late payments cause problems for small businesses

The threat of late payments is an ongoing problem for small businesses in the UK. The Chancellor of the Exchequer, Phillip Hammond, included plans to “tackle the scourge of late payments” in his Spring statement. This includes a requirement that big companies report how they are fulfilling their payment obligations to small businesses.

According to statistics from the Federation of Small Businesses, about 80% of small businesses have experienced late payments. The bank transfer service, Bacs, calculates that the UK’s small businesses spent £6.7 billion in 2018 collecting money and chasing invoices.

The same data shows that more than 25% of small business owners have had to pay their own suppliers later than the agreed deadline, as a knock-on effect. Just over 28% say they have slashed their own salaries to keep their business going while they wait for payment from large corporations.

Government measures on hiatus

The Federation of Small Businesses (FSB) states that late payments lead directly to more than 50,000 small businesses closing every year. This costs the UK economy around £2.5 million. The Government’s measures are welcome, but, as yet, there is no date set for consultation and implementation. Small businesses are still in the same position regarding late payments, until further clarification comes from the Government.

Tracking payments, chasing invoices and ensuring payment is made is an important part of managing the cashflow of a business. However, it is not always simple, particularly for small businesses and start-ups, which are forced to direct energy, time and money into customer service, business development and content marketing. Chasing payments can take up a large part of a small business owner’s day and keep them from equally essential tasks. If this sounds familiar, here are some tips on recouping payments.

How to recoup late payments from clients

The majority of small businesses are already using accounting software and processing invoices online. If you’re not, this should be your first step. Sending invoices via email means faster processing and fool-proof record keeping.

While a simple spreadsheet can be enough in the early start-up stages, dedicated invoicing software is recommended. This will allow your company to grow and seamlessly deal with invoicing. Plenty of software vendors offer a limited, free platform, so try some out before you decide which works best for you.

Keep invoices simple and professional

This may sound simplistic, but your invoices should be clear and professional, and properly reflect your brand. By ensuring clarity on your invoices, including all company and financial information relevant to both parties, you are simplifying the process of payment collection. Make your invoices so clear that there can be no misunderstanding on either side.

Similarly, displaying clear and accessible payment information will help when sorting VAT and a clear and concise delivery note can be proof of clear communication should there be a dispute. Make your invoices easy to read, with a clear and accessible layout. Your aim should be to make it as simple as possible for the client to pay your invoice. Anything that could be misinterpreted or misconstrued should be omitted.

Give your clients payment options

While some small businesses still collect payments by cheque or bank transfer, be aware that some of your clients may prefer to pay by debit or credit card. In short, don’t assume you know their payment preference, and offer alternative options where possible.

By setting up electronic invoices that allow clients to pay with one click or just a couple of steps, your software should be able to reconcile your accounts automatically. This frees up time that would have been spent manually going through records to ensure reconciliation. In turn, this saves you money.

James Turner, Managing Director of Turner Little Limited, says: “Unfortunately, the reality is that large corporations generally pay their suppliers late. As small businesses are often the suppliers, they are the hardest hit. However, late payments don’t just damage individual companies, but also cause harm to the wider economy.

“This is why the Government are promising to act in favour of small businesses by making larger companies accountable for their payments. The Chancellor is proposing to tackle late payments, but as this is not yet in place, small businesses must take the initiative themselves.

“Small business owners can take steps to improve payment times, by following this advice. Consider how you can ensure the entire payments and invoicing process is as easy as possible for your clients. By using clear, accurate and detailed documentation, you will minimise complications and queries. These can slow down payments even further, so by taking pre-emptive measures, you can cut down on waiting times for invoice payments. These are steps which every small business can implement immediately to help manage cashflow.”

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 consultation, 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.

 

Image Credit: tirachardz / freepik.com

What are angel investors looking for from small businesses?

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

How do angel investors work?

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

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

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

How can small businesses find an angel investor?

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

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

What interests an angel investor?

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

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

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

Is there a limit on how much they can invest?

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

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

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

Start-up investment is increasing in the UK

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

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

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

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

About Turner Little

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

How small business owners can become recognised as industry experts

Becoming a visible industry expert, thought leader and authority in your chosen sector helps you to build credibility and attract and retain customers. For small business owners, implementing a communications and reputation building plan will ensure that you can make your mark in a crowded field.

People will always want to listen to authority figures. Experts in their field are invaluable, encouraging customers to follow advice, engage with them, buy into products and services and remain loyal to a small business. This is the power that industry expert/authority marketing has.

Small business industry expert/authority strategy

Small businesses should capitalise on their industry expert knowledge, and combine it with a planned, strategic branding exercise. The idea is to become recognised in your particular field as the authority worth listening to.

Becoming an authority in your field isn’t quick, and it isn’t always easy. But it is important. Here’s how to maximise the potential of your small business using four industry expert/authority marketing techniques. The idea is to clearly demonstrate authority, knowledge and expertise in an accessible way, so that customers know to trust your business when they see its name.

Maximise your presence online

Every small business should have a web presence. Statistics from the Federation of Small businesses (FSB) show that, at the end of 2018 there were 5.7 million small and medium enterprises (SMEs) in the UK. This accounts for more than 99% of all businesses in the country.

A substantial proportion (roughly 29%) have no web presence at all, and just under a third are not using social media channels in their marketing. An online presence is vital for running and growing a successful small business in the UK, and an integral part of building an authoritative marketing plan.

Your website is where the majority of customers will head. It’s design and UX (user-interface) is extremely important, particularly while you are working on building brand awareness. With the correct high-quality, relevant and search engine optimised (SEO) content on it, your website is the hub of your online authority.

As well as information on your business, products, services and e-commerce channels if applicable, include a specific page to showcase the company’s authority. This can either focus on the team, or you as the business owner, and should be high-quality, well written information. A dedicated page will give you the space to explain your knowledge of the industry, your company’s place within it and what you can offer.

Blog with authority and intent

High-quality blogs can go a long way in expanding your industry authority. Not only can they establish you as an industry leader, they can rank your business for relevant keywords and expand your audience and influence.

Your strategy should include regular, well-written, professional blogs. Use them to answer specific questions, to provide expert commentary on new stories involving your sector, to explain new products and services and demonstrate your overall knowledge.

If the blogs you produce are well-written, include relevant keywords and answer specific questions in an accessible way, they may well help your business to rank in Google’s search results. Many small business owners may find they don’t have the time to write high-quality content, in which case it is beneficial to outsource to a specialist content marketing agency.

Use social media to engage your audiences

Site content and blogs can be shared on your social media channels to further spread your messages and authority and involve people in your conversations. You should have a presence on social media, particularly on LinkedIn

Cultivate positive yet credible reviews

The impact of online reviews is massive. Around 93% of people say they use online reviews to make decisions when considering a product, service or business. Further data shows that 84% trust online reviews in the same way they trust recommendations from their friends.

These statistics show the power that customers have. Keeping people engaged and happy with your products, brand and services is crucial. This is particularly the case with small businesses, as you may only have a few online reviews. This makes even one negative review appearing quite damaging.

Satisfied customers show that your business is good at what it does. And if your small business does receive a negative or less than stellar online review, respond in a manner that can change it to a positive. This means listening, responding and actively working with the customer to improve their experience.

Create your own special niche

No-one can be an authority on everything, and anyone who attempts to present themselves as such will lose credibility. Customers looking for specific products or specialised information will go to a business demonstrating knowledge in that area.

To become an authority, it’s vital to be specific and demonstrate thorough and wide-ranging knowledge in your field. One way to do this is to develop and grow a business based on a relatively narrow focus. This way you can keep authority marketing, content strategy and website information focused.

 

James Turner, Managing Director of Turner Little Limited, says: “It’s no longer enough to be have a great product or service and years of experience. For small businesses to stand out from the crowd, it’s important they find their voice in their specific sector. This can seem a daunting task, but by including it in your business strategy from the start, your business voice will grow with your company.

“Consider how you can harness the potential of your small business or start up to position it as an authority in your field. Even if your chosen sector is a crowded one, judicious use of social media, high-quality content and a defined strategy can ensure your voice shouts louder than the competition.”

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

Should small businesses focus on people or technology?

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

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

Why is technology important to small businesses?

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

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

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

The link between technology and funding

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

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

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

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

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

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

About Turner Little

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

Why small businesses should be cautious with AI

Artificial Intelligence (AI) is more than just a tech buzzword. Along with automation, AI is very much here to stay, and is currently revolutionising the way we live and work. But when, and how, should small businesses jump on the AI bandwagon?

For small business owners, the question shouldn’t be whether to get involved with AI, but rather when to take the leap.

AI in small businesses inevitable

AI strategist Daniel Faggella says that it is inevitable that AI will be implemented across every business sector. However, in an Emerj article, he warns against proceeding without caution. And small businesses, in particular, should be wary of investing in this area too soon.

Small businesses typically have limited cashflow, resources and, often, data science knowledge. While AI is becoming more common, it is still highly complex, and there is little direct evidence of return on investment (ROI) yet.

AI is not yet diverse or flexible enough to easily solve problems for small businesses. The talent pool of people able to understand, build and follow up on an automated or AI application is still small. It takes time, talent and money to develop and implement. Many small businesses do not have any of these in the amount necessary to take the leap into AI development.

AI not yet necessary for profitability

AI tech also needs a tech infrastructure and data management system that is simply beyond what most small businesses are happy to invest in. Faggella says that no business should move into AI without a very clear objective and aim. He says in his article for Emerj, titled Is Artificial Intelligence for Small Businesses? Factors to Consider for Technology Adoption: “99.9% of small businesses don’t actually need AI right now to become profitable.”

As this field becomes cheaper, easier to use and has improved businesses uses, we will see AI move into the small business sector. It’s not that it should be ruled out completely, rather that right now it is costly, risky and not necessary. However, Faggella does recommend looking for applications and tech that use AI, so that small businesses can incorporate it in user-friendly formats. It’s possible to buy ready-made ‘off the shelf’ AI products for use in small businesses.

Caution is the watchword for small businesses

While it is possible to invest in AI products, or even to employ data science employees to develop in-house products, caution is the watchword. AI should never be considered anything other than a new way to solve a problem. In other words, it shouldn’t be implemented just because it’s a new, fashionable tech.

It’s important not to be swept into using AI applications simply because of what they are, rather than considering what they are doing to the company’s bottom line. AI is not guaranteed to solve any business problems, and needs an enormous amount of resources, money and high-levels skills to build from the ground-up.

Any technology should be chosen by small business owners based on what they can deliver to the business, and not because they use automation or AI.

James Turner, Managing Director of Turner Little Limited, says: “The business world is currently on the cusp of widespread adoption of AI applications, technology and automated products. There will undoubtedly come a time, in the not too distant future, when small businesses will use AI every day.

“It is likely that AI will become as user-friendly, widely accepted and easily installed as any other software. Until utilising AI makes a positive difference to your bottom line, and gives a guaranteed ROI, it’s just not yet necessary for small businesses to use. However, you should be focusing on ensuring all customer data is properly stored, which is already necessary, both to comply with guidelines but also to enable you to prepare for AI.

“As a small business owner you should ensure that you’re managing, governing and storing data in the most effective way to help you prepare for the advent of mainstream AI applications. That time may not be right now, but it’s unlikely to be too far into the future.”

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.

Digitisation dramatically improves business for UK SMEs

Small and medium sized businesses (SMEs) have flexibility, agility and responsiveness on their side in the battle against large companies. The ability to pivot and react to changes in your sector is invaluable when it comes to maintaining success and growing your business.

 

And SMEs that embrace and work with flexible, fast, digital infrastructure are ahead of the competitive game. A worldwide survey of SMEs by Techaisle and Salesforce finds a ‘digital divide’ within this sector. Those companies capitalising on the speed and cost advantages of cloud computing have an advantage over their contemporaries.

 

Digitisation improves business for UK SMEs

 

The annual Business Digital Index (BDI) from Lloyds Bank has been running since 2014. In those five years, encouraging results are now showing. The latest report shows that digital uptake for SMEs is currently at an all time high with 99% of small businesses and charities in the UK now online.

 

The digitisation of UK charities has just about doubled since 2014’s index. The score increased by 92% in the 2018 report for charities, and by 24% for SMEs. This means that, when compared with data from 2014, there are now 81% fewer charities showing the lowest digital capability. There are 50% fewer SMEs showing this too.

 

Lloyds say that this change results from a change in mindset. This is borne out by 71% of SMEs saying that they recognise that digitisation is vital for their future success. This is an increase of 31% over the last five years. Almost one million SMEs and charities show four of the five measurable Basic Digital Skills in the Index. This is an increase of 34% over just 12 months.

 

Still work to be done to close digital gap

 

All of these stats are encouraging, but there is still much to be done. There is a productivity gap of £85 billion that can be narrowed significantly by boosting digitisation.

 

The Index shows 16% of UK SMEs scoring low digital capability. This is the equivalent of 655,000 small businesses, and the impact this has on the economy as a whole is significant. Using behavioural and transactional data, the BDI shows that if these SMEs close the digital divide, they could unlock an extra £84.5 billion in turnover.

 

Sole traders have the biggest opportunity to capitalise on digital skills. Just over 41% measure as low digital capability. If they develop and enhance their digital capability, then they could see an extra £24,000 turnover per year each. And if every sole trader does this, there would be an increased turnover for SMEs in the UK of £43.3 billion.

 

Recognising the benefits of digital transformation

Businesses often don’t understand the value of their current digitisation, or the benefits of improving it. The Index shows that 64% of SMEs don’t link increased sales with their online activity. However, they are incorrect as data shows digitisation has improved sales for this sector by up to 25%. The study shows there is a clear correlation between using Cloud based tech services and increased turnover.

 

Accessibility is another key area that small businesses are failing to capitalise on. More than 10 million people in the UK are registered as having a disability. However, 96% of UK SME websites do not reach the international accessibility guidelines (WCAG).

 

Research also shows that around 25 million people choose to shop on their mobile device. Despite this number, just 18% of SMEs in the UK have optimised their website for mobile use.

 

James Turner, Managing Director of Turner Little Limited, says: “The latest Index has a mix of positive and negative results from the small business sector in the UK. It’s encouraging to see the increase in numbers of SMEs that are now digitised and showing real engagement with the benefits of technology.

 

“However, it’s clear that there is a significant digitisation gap in this country. There is the opportunity for small businesses to vastly improve their prospects, turnover and bottom line if they choose to utilise the technology available.

 

“There is likely a generational impact on these figures, with sole traders in particular affecting the uptake of Cloud-based services. Those who have been working for years in a certain way may simply not understand the opportunity available to them. As tech becomes more intuitive and easier to use, I would hope to see these figures improve by the time of the next Index.”

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 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.