Planning for the worst-case scenario – why small business owners need Shareholder Protection Insurance

Small businesses often keep it in the family. If a company owner dies suddenly, their shares can end up going to a family member outside of the business. For the other business partners, the consequences can be catastrophic. The company could be sold off to someone outside of the family or end up in the hands of a competitor.

Sudden deaths can cause a business to become unstable. Business owners should always plan appropriately for the worst-case scenario. If they don’t, the surviving owner loses control of some, or all, of the business. This could spell the end of the company.

Small business owners need Shareholder Protection Insurance

Despite this, research shows that half of small business don’t have a legal structure place to deal with these potential issues. Without a legal document showing that they can buy a colleague’s share from his or her family members when they die, they have no say over what happens to those shares. And for lots of small and medium sized businesses (SMEs), this could mean a total loss of control over the company.

Just 43% of business owners have any form of business life cover in place to prepare for their sudden death or if they become incapacitated. This is where Shareholder Protection Insurance comes in.

This type of insurance allows the remaining directors or partners to keep control of the business should the business owner die. With no share protection policy in place, the deceased owner’s business share will most likely go to a family member not involved with the business.

Why is Shareholder Protection Insurance a good idea?

The share protection policy can avoid all of these awkward problems. It works by providing funds to buy shares, and also means existing shareholders retain ownership. Shareholder Protection Insurance will protect the business and all of its shareholders by simplifying success planning. Here’s what it can do:

  1. Provides money for the shareholder or shareholders who remain after the death to buy the deceased owner’s shares.
  2. Allows the business to continue trading in the normal way during the upheaval.

The State of the Nation’s SMEs report from Legal & General says that 53% of businesses would be forced to stop trading in under 12 months if a major business owner or key person became critically ill or died.

Around 60% of small businesses have not renewed or reviewed their company succession plans or agreements over the previous 12 months. And if a business owner or business partner dies without leaving specific instructions for their business shares, then the shares will most likely go to their estate.

The family that receives ownership of the shares then has two choices:

  1. A family member could replace the deceased as a business partner or part-owner. Should a family member decide to do this, there is no guarantee that they can make any realistic contribution to the company. It’s possible that they could even damage the business.

A sleeping partner is still entitled to their share of the business profits but could end up as a burden to the remaining partners. It’s also possible that the family becomes unhappy if they find they have no real control over the business.

  1. The family could choose to sell the business and realise the value that way. This could mean the remaining partners end up working with someone they either don’t like, don’t know, or doesn’t represent their aims. It could also be that the family can’t find a buyer, which will have a negative financial impact on the business.

Shareholder Protection Insurance covers the following:

  • Shareholder Life Insurance – if a shareholder becomes terminally ill (this is defined as fewer than 12 months left to live) or dies, the policy pays out a lump sum of money to the other shareholders.
  • Critical Illness Cover – this can be added to Shareholder Protection. This will allow the policy to pay out if the holder becomes seriously ill. The most common claims under this include heart disease, cancer and strokes. However, it also covers up to 100 serious conditions including motor neurone disease and multiple sclerosis.

Alongside Shareholder Protection, it’s advisable to set up a Cross-Option Agreement. On the death of the holder, it gives the option for other shareholders to buy the deceased’s shares and for the deceased person’s family to sell.

How do claims work under Shareholder Protection Insurance?

A claim is made under the policy.

  1. If the policy is written under trust, then the insurer will pay the amount to the trust. The trustees are therefore the remaining shareholders.
  2. These shareholders then use the money to buy the shares of the dead or critically ill person’s share.
  3. The family of the deceased, or the critically ill stakeholder themselves receive the money from the sale of their shares.

James Turner, Managing Director of Turner Little Limited says: “Shareholder protection insurance is something that every business owner should have in place. As these figures show, a relatively high percentage of businesses have no succession plans. A legal agreement on what will happen should a key member of the shareholder team, or the business owner, dies suddenly is vital.”

“While a sudden death or diagnosis of a terminal illness is devastating for the person involved, what happens to their business shares can impact negatively on a far wider number of people. Depending on the number of shareholders, the protection structure can become complicated relatively fast. It’s always a good idea to speak with an expert like Turner Little for advice on the best insurance policy and compare quotes for you.”

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 challenge of taking time off for small business owners

There are many upsides to owning a small business. Autonomy, control, creativity and the knowledge you’re working for yourself are just some of them.

But running a business, particularly during the first few years, is hard work. There are long days, few opportunities to take a break, and little downtime. This can lead to burnout and rising stress levels. So, how important is it for small business owners to take a holiday?

Taking time off is not a priority for more than half of small business owners

More than half (52%) of small business owners in the UK say they take less than five days off a year. The report from Aldermore SME Future Attitudes also says that a fifth (21%) take zero holiday days. And this is the downside to needing to retain control over every aspect of your small business.

Maintaining oversight of every aspect of a small business is the challenge facing every owner. For some, this leads to the neglect of a work/life balance. The report covers more than one thousand leaders and decision makers in the UK. From this number, 35% take work with them when they do take a holiday. A further third ensure it’s covered by a colleague and just over a fifth (21%) cancel days off to make sure work is finished.

While there are some regional differences in the report, nationally about a quarter (24%) of small business owners continue to communicate with the office on a daily basis. London bosses report the most time spent communicating with their business, with 30% responding to calls and emails while they’re away. In the North West, this drops to 16%, with a greater percentage able to switch off from work responsibilities.

Happily, most small business owners do encourage their staff to use up their holiday entitlement. Despite the fact that many bosses fail to take their own holidays, more than 70% actively encourage their staff to do so. Just 17% say they don’t push their staff to take their holidays.

Why it’s important to take time off

There may never be a ‘good time’ to take time off. But it’s important that as a small business owner, you accept this and book it anyway. Here’s why.

  1. Holidays help to avoid burnout

No matter how hardworking and entrepreneurial you are, everyone needs to switch off at some point. Stress is a cumulative thing, and exhaustion can build up for a while before it has any tangible effects. If you don’t take the time to rest and refresh both the mind and body, you will eventually hamper your own productivity and success.

  1. Build trust in your team

Taking a holiday and being forced to delegate key tasks is a positive step towards building trust. Most small business owners struggle with letting go of tasks, but by taking a holiday they are forced to entrust their team with tasks. Leave them contact details and instructions of how to get hold of you in an emergency and trust the process.

  1. Family time is important

The drive to start a business often comes with the idea that it will be easier to spend time with the family. After all, you make the rules. However, the reality of the work involved often side-lines these intentions. And if you work long days and find it difficult to spend quality time in a normal working week, then holiday time is even more important.

Use technology to ease into your holiday

Modern technology allows more ways than ever to stay in touch but at a distance:

  1. Mobile phone

You will take it on holiday with you. After all, everyone does. But take the opportunity to give yourself some space from it at the same time. Leave it in the safe in your room and have a few hours free from all communication every day. Tell clients you are away and give them alternative contact points. You can always tell them that they can contact you direct if there is an emergency.

Your team should be fully apprised of where you are and that you should only be contacted if it’s important.

  1. Apps for project management

Many small businesses use project management apps, such as Trello and Basecamp. They make it simple to keep on top of tasks and what needs prioritising. Don’t forget to adjust the settings so that notifications are off while you’re away. This will help to create a distance between you and the office. You can always check in once a day to ensure it’s all on track.

  1. Use focus tools if you take work with you

If it’s completely unavoidable and you must do work while you’re away, use tools like Quickstarter to ensure you focus on a short but productive time.

James Turner, Managing Director of Turner Little Limited says: “Small business owners are generally dedicated, passionate and motivated. Add into this mix the ability to remain connected online at all times, and it’s not surprising that holidays are few and far between. It’s difficult for many small business owners to switch off fully, and it’s all too easy to check in every day.”

“Entrepreneurial spirit is undoubtedly key to success for small and medium sized enterprises. This comes with the drive to work long hours, and the acceptance of sacrificing holiday time. However, it’s concerning that so many business leaders are taking so little time off.”

“The small business sector is the backbone of the country’s economy. And so the hard work of business owners is vital to its success. To avoid burnout, it’s important that they take breaks regularly. A good work/life balance is essential for long-term success and can also help to refresh their perspective on the business and the challenges ahead. It’s a win/win.”

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.

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.

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.

Turner Little advises small businesses on no-deal Brexit preparations

As the UK goes through a Tory leadership contest, it remains unclear how this will affect Brexit. Currently, Theresa May is acting Prime Minister until her successor is appointed. This means that the date set to leave the EU remains the 31 October 2019.

However, as this was an extension to the original date of 29 March 2019, it’s not yet possible to know whether the UK will leave with no deal on that date, or whether the new Prime Minister will alter the country’s trajectory somehow.

Could there be a no-deal Brexit?

While opinions remain divided both in the business and political sectors, as to when and how the UK should leave the EU, it’s business as usual for UK SMEs. The Institute of Directors (IoD) is now urging small businesses to return to preparing for the country leaving with no deal.

There are signs that Theresa May’s successor will pull the UK out of the EU regardless of a deal being finalised. At the moment Boris Johnson is leading the pack, and that is his stance. Should this happen, businesses must be as prepared as possible for its repercussions.

The IoD maintains that businesses must wait no longer for the Government and EU to formalise a final deal, but to step up their own preparations. Their figures show that less than 50% of businesses have firm plans in place.

Less than a quarter of UK businesses are planning for no-deal

The group surveyed one thousand companies and found that between January and April the percentage of those that had activated specific plans rose by only 5% (from 18% to 23%). They also found that just 4% say they will be using the time until October to speed up preparations.

The interim director of the IoD Edwin Morgan, in an interview with the Guardian, says that he believes it’s clear there is a possibility of a no deal Brexit, and that there is no absolute reassurance for businesses that an agreement will be reached.”

Furthermore, the group feels there hasn’t been enough support, particularly for SMEs for planning ahead for a no-deal Brexit.

What could a no deal Brexit mean for your business?

James Turner, Managing Director of Turner Little Limited says: “Obviously, we just don’t know the entire scope of a no-deal Brexit, but there are factors worth considering for businesses preparing for this possibility. No-deal Brexit doesn’t have one solution, just as it wouldn’t have a single outcome.”

“We do know that the Government will want to preserve some state of status quo so that businesses can continue to contribute to the UK’s economy. Over time, it’s likely that the Government would introduce specific solutions that will end up being positive for the economy. However, this is not as likely in the short term, due to the ongoing nature of negotiations.”

“All of this makes it difficult to plan ahead. UK SMEs should remain flexible, and ready for as many eventualities as possible. It could be that some businesses could face disruption in the short term, but in the medium and longer term, there could be opportunities for many. No country has previously left a trading bloc in the same way, so we don’t have a precedent to work from. This is why it is causing uncertainty for many sectors.”

How does ‘no deal’ stand for the EU’s position?

The EU issued Notices to Stakeholders, that cover all kinds of sectors and topics. These include the end of any existing relationships with member countries, and who is participating in Brexit committees.

For its part, the UK Government also issued documents, which highlight a high number of immediate ramifications from a no-deal Brexit. Third party countries are also waiting to see how long-term trade between the EU and UK will be affected before they begin any separate negotiations with the leaving country.

Adds Mr Turner: “When we have clarity on the leaving position of the UK, other countries will begin to open negotiations for bespoke trading deals. The EU has issued some information on interim measures that it would put in place, but these are going to be focused on limiting any problems for the EU, rather than the UK.”

Prepare now for a no-deal Brexit

While some, such as the IoD, are clear that a no-deal is the worst of the options available for the UK, others see it as a potentially positive move in the long-term. Either way, the IoD’s advice to small businesses in the UK is to begin preparations now.

Mr Turner says: “There is no doubt that preparing for Brexit in as many ways as possible is sound advice for small and medium sized businesses in the UK. The aim must be to minimise disruption, particularly in terms of exporting goods. Planning for manpower is also key, as it’s not yet clear the rights European citizens living in the UK will have after Brexit.”

“It’s a difficult and uncertain time for UK business in many ways, however, the frontrunner for Conservative leadership, and therefore as Prime Minister, believes that taking the UK out by 31 October 2019 is vital for public confidence in the Government. At the moment it’s a case of preparing for either eventuality, and carrying on as usual as much as possible.”

 

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.

 

Turner Little lists important small business tax breaks

When it comes to starting a small business, it’s natural to focus most of your energies on the day-to-day organisation. It’s often an ‘all-hands-on-deck’ scenario, with everyone involved ensuring sales are being made, products are being developed and marketing is being carried out. All too often, things like finding out about business tax breaks get left behind.

However, it’s worth putting the effort in at the beginning of your venture to find out about the tax breaks you could be entitled to. If you don’t, you could be missing out on ways you can help your business be more competitive.

Business tax breaks for small and medium sized enterprises

There are various tax relief schemes on offer for small and medium sized enterprises (SMEs) in the UK. Some are specific to industries and others are potentially available for all small businesses.

If you meet the criteria set by HMRC then your small business could lower its tax bill significantly. Look at it as an easy way to boost efficiency and potentially profitability. And it just takes some research up front. Here’s a rundown of some of the tax breaks your business could be eligible for.

  1. Employment Allowance

If you employ people through PAYE, then employment allowance can give you up to £3,000 off your Class 1 National Insurance (NIC) bill every year. Until 5 April 2020, businesses can claim this reduction in NICs. However, the majority of contractors and freelancers who pay Class 2 and 4 NICs aren’t eligible.

Businesses that are eligible can use up to the £3,000 limit each tax year. For example, a business with one member of staff earning £22,000 can claim the full amount (1,873.49) of NIC as it’s within the allowance. It’s £3,000 per business, not per employee.

After 6 April 2020, the allowance will only be available for small businesses, and those with an Employer NIC bill in excess of £100,000 won’t be able to claim it.

  1. Annual Investment Allowance (AIA)

 

The AIA is a form of tax credit for the purchase of equipment needed for your business. It allows you to deduct the total amount of an item that qualifies for AIA from your company profits before tax. If you later sell the item in question, you may have to pay tax then.

 

It can be claimed on most machinery and plant assets and does include some fixtures and features of buildings. It can also apply to alterations you make in order to install machinery but can’t be claimed for repairs. You can’t claim it for cars or anything given to your business, nor on any items you owned before you started your business.

 

The AIA threshold has been increased to £1 million on a temporary basis since 1 January 2019. This will cease on 31 December 2020 and was introduced by the Government to try and stimulate investment in business. Before this temporary increase, the amount stood at £200,000.

 

  1. Small Business Rates Relief (SBR)

 

If the property you run your business from has a rateable value of £15,000 or less, you should claim Small Business Rates Relief. This is on a sliding scale and means that businesses with a rateable value of less than £12,000 pay zero business rates. Those with a rateable value of more than £15,000 are not entitled to business rate relief. This is only available to business owners who have one property, but if you buy a second you can keep the entitlement to this tax credit for 12 months.

 

  1. SME research and development (R&D) tax relief

 

R&D tax relief is for businesses that create or contribute to scientific and technological advances. These advances must impact the field the business works within in a wider sense than just on the business itself. HMRC’s criteria for eligibility is relatively strict, so bear this in mind when applying.

 

The SME R&D relief scheme is available for businesses that employ fewer than 500 people, turnover less than €100m, or have a balance sheet total of less than €86m. Companies eligible for this can deduct 130% of the qualifying costs from annual profit in addition to the usual 100% deduction.

 

For businesses that are loss-making, tax credit of up to 14.5% of the loss is available. Qualifying costs can include employee costs, software fees, consumable items and subcontractor costs, but not rent, rates or capital expenditure.

 

  1. SEIS – Seed Enterprise Investment Schemes (SEIS)

 

This isn’t a straight-forward tax break but is a potential benefit for small businesses. SEIS is a venture capital scheme that could help you get investment. If you’re eligible, you could get up to a £150,000 worth of investment. The scheme gives investors tax relief, and you must both meet criteria set by HMRC to qualify.

 

To be eligible, businesses must be no older than two years, employ 25 people full time and have gross assets of no more than £250,000.

James Turner, Managing Director of Turner Little Limited: “Not every small business or SME will be eligible to claim all of these tax breaks. However, if your business is eligible for any of them, they are very much worth applying for. They could make a significant impact on your company’s profitability.”

 

“Always do your research and check whether your business meets the criteria set for these tax breaks. While it may seem like more work at the outset of your business, the benefits could be extremely worthwhile. The SME sector is vast and very competitive, and any assistance to improve efficiency and profitability should be seized by business owners.”

 

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.

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

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.

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.

Barclays launches fund to help small businesses through Brexit

A new Brexit date of 12 April 2019 is the Government’s current target to get Parliament to agree to the Prime Minister’s deal. It has now been voted down three times, and a series of non-binding indicative votes have been on the table over the last week.

The votes of 1 April appeared to show that MPs are still divided over the best way for the UK to leave the European Union (EU). Whatever happens, and this could feasibly include a General Election, a People’s Vote, a customs union agreement or a no-deal Brexit, the small business sector must look ahead.

How a new fund will help small businesses through Brexit

To help the increasingly vital SME sector in the UK navigate the challenges brought by Brexit, Barclays has announced a new fund. It offers overdrafts, mortgages and loans to UK SMEs, as well as growth funding and cash flow.

Worth £14.7 billion, the Barclays Brexit fund is designed specifically to help small and medium sized businesses negotiate Brexit and plan for a future outside of the EU.

The fund will offer:

  1. Commercial mortgages, overdrafts and business loans up to a quarter of a million pounds working capital.
  2. Loans for innovate start-ups and established companies seeking capital, environmental investment and growth funding.
  3. Cashflow funding for investment in management buy-outs, growth and acquisitions.

The fund takes advantage of the Enterprise Guarantee Programme. This is backed by the Government and is designed to encourage lending to small businesses by offering guarantees from the British Business Bank. It will be available to small and medium sized businesses that have a turnover worth up to £25 million.

And it’s not the only thing Barclays is implementing to deal with specific challenges caused by Brexit. The bank is running more than 100 SME seminars and clinics about Brexit across the UK. They will help businesses plan for managing their cashflow and working capital, how they will manage potentially restricted access to workers, supply chain management and exporting services and goods overseas.

Businesses divided on Brexit

Just as MPs are split on the best way to deliver Brexit, research shows that the business world is also somewhat divided. A survey from the Institute of Directors shows that almost two-thirds of small businesses would like to see a Brexit deal that allows the UK to be closely linked with the single market.

Its research finds that 58% want the UK to stay aligned in goods, and 60% in services. A similar number of small business owners (56%) say that they want a Brexit deal that makes sure the UK can align tariffs with the EU’s. The research targeted 1,400 IOD members between 14 and 21 March 2019 and could well have changed since the votes by MPs on since then.

While minds are changing all the time as events develop, businesses remain split on the length any potential extension period should last. Half say that there should be a short extension of no more than three months, while 40% say they want at least nine months.

James Turner, Managing Director of Turner Little Limited, says: “There is no doubt that MPs are currently dealing with important and difficult decisions. While the small business sector doesn’t have a completely unanimous view of the best course of action, it’s important that we all accept the risks and opportunities inherent in every course of action.

“Brexit presents the country with a unique, unprecedented opportunity for real, lasting change. It’s the small and medium sized business sector that will do the most to shape the change. This includes entrepreneurs, start-up owners, Fintech disruptors, builders, farmers, manufacturers and many others.

“It’s encouraging to see moves from the Government and the big banks that offer tangible assistance to the small business sector as it navigates the choppy waters of transformation. The fund from Barclays recognises that SMEs form the backbone of the UK’s economy, and that they are integral to a stronger, united country outside of the EU.”

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.

Small businesses in the UK turn towards alternative funding options

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

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

Why are SMEs considering alternative funding options?

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

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

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

What are the alternative funding options?

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

  • Peer-to-peer financing (P2P)

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

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

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

  • Equity crowdfunding

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

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

  • Venture capital funding

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

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

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

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

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

What small businesses can do to prepare for a no-deal Brexit

Many small businesses in the UK are already planning for Brexit. Whether it happens on 29 March as planned, or there is a delay on Article 50.

At the time of writing, the Government is renegotiating the deal put forward by the Prime Minister. The possibility of a ‘no-deal’ Brexit is on the table, as far as it’s possible to ascertain. And of all of the Brexit possibilities, a no-deal scenario is the most difficult to prepare for.

Small businesses should prepare for changes

In many ways, planning for Brexit is the same as making any other business decision. It’s about managing risk, and all small business owners are familiar with planning for the unknown.

While Brexit is a new scenario for small business owners to deal with, there is no reason why steps can’t be taken to manage the risk. You should be aiming to make changes that have the largest possible benefit at the lowest possible cost. Recent research shows that 4% of 130 small businesses surveyed have started Brexit planning, and 80% have not yet made any changes.

‘Wait and see’ may well be enough for many small businesses, particularly those not involved with trading with countries within the EU, but proactive steps to manage potential risks is always a good idea.

Simple steps to take

Small business owners should consider Brexit in the same way they do any other time of uncertainty. It’s important to reassure suppliers, clients and employees that it’s business as usual for the most part. While there may be some changes and possible delays, all businesses in the UK are working to make sure they run as usual.

Assessing which business activities might be impacted by a no-deal Brexit is the next stage. Businesses should begin by understanding the different types of sales and purchases they make and learn the physical and legal flow of trade. A no deal Brexit is likely to include a customs border creating between the UK and other countries. Therefore, businesses that trade in goods will be most affected, and can expect changes to importing and exporting processes and a possible increase in VAT and customs duty.

Service businesses are likely to be more affected by access to the labour market and regulatory changes. It’s a good idea to plan future employee needs in order to work out how much freedom of movement could affect it.

Five actions small businesses can take now to prepare for a no-deal Brexit

  1. Learn the impact of likely regulatory changes

Will you still be able to sell your services and goods in the EU and vice versa? If not, find out Government advice on what you can do about it. It’s possible that an EU presence will be needed to satisfy regulatory requirements.

  1. Think about incorporating an EU company

This is easier and cheaper than you might think. Ireland will be the largest English-speaking country within the EU post-Brexit. Having a subsidiary or overseas office there or in another EU country will mean your business has a legal presence within the bloc. If you go down this route, consider how this will affect the infrastructure of your business.

  1. Open a bank account in the EU

In the short term, it could be useful to have a bank account within the EU. Opening it now will mean you’re ahead of a potential rush to do so after Brexit and could save hassle down the road.

  1. Apply for an importer reference number

As the UK is currently part of the Customs Union, businesses don’t need to ‘import’ goods. A no deal Brexit would change this, and the UK will need to import and export goods with the EU. This means your business will need an EORI (importer reference) number.

  1. Check workforce needs against your business plan

If your business employs lots of EU workers and you’re expecting numbers to drop, how will you deal with the deficit? Consider apprenticeship schemes and how you will source employees.

James Turner, Managing Director of Turner Little Limited says: “The key for small businesses in preparing for a no-deal Brexit is to remain calm, take a ‘business as usual’ approach, but ensure sensible steps are taken to mitigate potential problems. A no-deal Brexit is difficult to prepare for, but while we wait for clarity from the Government, it is important to start preparing now. For those UK based companies trading with the EU, either selling there or sourcing product from there, the suggestion of incorporating an Irish company is both sensible and relatively inexpensive.

The leave date of 29 March 2019 is fast approaching, and while there may be a possibility that Article 50 will be extended, we just don’t know. In the meantime, making adequate plans for importing and exporting and ensuring workforce numbers can be retained remain the most important steps for small businesses. Those companies that don’t rely on importing from or exporting to the EU may find that the impact is negligible, but for those that do, following this advice could make the transition out of the Customs Union easier. Brexit should be seen as an opportunity for small businesses in the UK, as we stand at the cusp of a new era for the country.”

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

Why money management should matter to small business owners

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

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

Here are some financial management tips for small business owners:

  1. Manage payment terms

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

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

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

  1. Establish a cashflow budget

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

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

  1. Review accounts payable regularly

 

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

 

  1. Cut expenses where possible

 

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

 

  1. Understand your customers

 

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

 

  1. Ensure invoices are accurate

 

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

 

  1. Employ a credit controller

 

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

 

  1. Negotiate better terms with suppliers

 

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

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

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

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

Why market research is key to small business success

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

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

Market research vital for small business success

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

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

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

Using less to achieve more

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

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

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

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

Analyse data you already hold

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

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

Look for high quality data

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

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

Be flexible in your approach

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

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

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

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

Strong uptake for streamlined small business registration service

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

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

Small business registration simplified

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

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

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

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

Never been easier

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

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

The Industrial Strategy Programme

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

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

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

Small businesses suffer growing pains

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

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

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

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

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

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