Business Planning

Employment Allowance reduces NICs for Employers

10/04/2014 By Mushroom Internet

From 6th April 2014 employers are able to claim Employment Allowance. This Allowance reduces the NIC Class 1 payable by employers by up to £2000 per year. The aim of this allowance is to make it easier and less of a financial burden on small businesses to employ staff.

Employment Allowance

Not all businesses can claim the Employment Allowance however. Employers that cannot claim this allowance are those that:

employ someone for personal, household or domestic work, such as a nanny, au pair, chauffeur, gardener, care support worker
already claim the allowance through a connected company or charity
are a public authority, this includes; local, district, town and parish councils
carry out functions either wholly or mainly of a public nature (unless you have charitable status), for example:
- NHS services
- General Practitioner services
- the managing of housing stock owned by or for a local council
- providing a meals on wheels service for a local council
- refuse collection for a local council
- prison services
- collecting debt for a government department

The allowance can be claimed through your payroll software by automatically reducing the Employer NICs payable up to £2000. HRMC will automatically carry the claim forward for succeeding tax years.

Further information is available from the Government website at Employment Allowance.

Our experienced business advisors are available to help with any aspect of business and many of them are registered Growth Coaches. For a no obligation discussion contact us or call 0333 444 8522

Growth Vouchers – A New Scheme Offering Subsidised Advice to SMEs

10/02/2014 By Mushroom Internet

Growth Voucher business advice scheme This new scheme launched by the Government at the end of January is a £30 million fund that will enable qualifying small businesses to access expert business advice through an online Marketplace. Suitably qualified Business Advisors are registered on the Marketplace and you can choose one that is local to you, has the right expertise and has the experience.

Growth Vouchers are worth up to £2000 but you will need to match fund this. You can of course spend more if required but the maximum provided by Government will be £2000. The funding is aimed at SMEs obtaining advice in five categories: managing cashflow, late payments, and negotiating finance; developing skills and taking on staff; improving leadership and management; marketing, attracting, and keeping customers; and making the most of digital technology.

Vouchers can be obtained through a Government website and will be randomly issued to eligible companies. For further information and to see if you are eligible go to Growth Vouchers or email us. Alternatively call us for a no obligation discussion on your requirements on 0333 444 8522

Yet Another War on ‘Red Tape’

07/02/2014 By Mushroom Internet

David Cameron recently announced that he was going to cut 3000 items of red tape as a way of helping small businesses. For instance out goes that riveting read “Cattle Movement Guidance” – all 640 pages of it! Also 286 pages of hedgerow regulations will disappear! I am not quite sure how that will benefit the majority of companies that operate from an office or in an industrial estate in the heart of some of our cities. He also mentioned that over 600 rules had already been swept away but have small businesses benefited from it? Are they even aware that these rules have gone? But he also said that it would take nearly 2 years to get rid of the rest! A slow motion war indeed.

When senior politicians start to talk about the war on red tape, I start to worry. I worry that such a major announcement (it was in all the media including online, print and broadcast) is because the Government is bereft of ideas on how to help small business develop and grow. They always seem to revert to the ‘war on red tape’ as if that is the panacea for all the problems that business owners have. Their theory goes that if they get rid of all the red tape (they won’t, they never do!) then businesses will save a lot of money, be more profitable and do more business. In theory they are right. Superfluous bureaucracy is indeed a drain on the resources of small business. But some red tape is a necessary evil and needs to be in place.

As James Hurley said in his piece in The Telegraph “….. it’s actually a rather lazy assumption about what entrepreneurs believe is holding them back…..”

Business owners by their very nature learn to overcome or get round obstacles that are put in their way. That is why they do what they do. I believe they have many other more important issues that hold them back rather than red tape. Late payment by large organisations, lack of sensible lending by banks, the cost of hiring staff are but three common issues faced by all small businesses

So as a new front opens up in the war on red tape what do you consider are the three most important issues your business faces in 2014? Use the comment facility on this blog to list them and we will publish the top three concerns of SMEs.

And if you want practical help and advice from experienced business people contact us or call us on 0333 444 8522 for a no obligation discussion.

Yet Another War on 'Red Tape'

07/02/2014 By Mushroom Internet

As James Hurley said in his piece in The Telegraph “….. it’s actually a rather lazy assumption about what entrepreneurs believe is holding them back…..”

And if you want practical help and advice from experienced business people contact us or call us on 0333 444 8522 for a no obligation discussion.

Innovation the key to business transformation

02/07/2012 By Mushroom Internet

If you say the word ‘ Innovation’ to anyone their first reaction is likely to be ‘expensive.’ Talk to small businesses about innovation and their reaction is likely to be expensive R & D. Many people equate innovation with inventing a new product and usually equate it to unique product developments such as iPhone or iPad which would naturally cost hundreds and thousands of pounds.
However true innovation when applied to business need not be expensive and can be applied to almost any part of the business. Innovation can mean a new business process or a different way of engaging with customers . Reducing the number of processes in handling orders for instance is innovation. Going from paper invoices to electronic invoices is innovation. Many business have gone from a bricks and mortar type business to largely on line. This too is innovation.
Businesses that innovate tend to experience better growth, more profitability and by involving staff members in the process will have a happier workforce. And the process of innovation can be carried out in relatively short timescales. So by innovating business can reap the rewards quickly and move their business forward at the expense of their competitors.
If you want to transform your business through innovation contact Bob Francis on 07941 426 807 or at bob.francis@sgba.co.uk

Are new business support provisions fit for purpose?

07/02/2012 By Mushroom Internet

The Government is in the forefront of encouraging new business support provisions for SMEs. It has reorganised Business Link and done away with the local one-to-one advice provided from trained advisors and replaced them with a website.

In a recent Forum of Private Business (FPB) poll only one in ten of the respondents indicated that the support provided was adequate while 20% said it was not. Further, more than half thought that the information was inadequate to aid growth.

Mentoring and coaching now appear to be favoured by government as the best way to support SMEs and are supporting organisations and individuals who give their time free of charge. However some restrictions are placed on what they do. This means for instance that coaches cannot give advice! Whilst there are, no doubt, many good people providing good support amongst these organisations, the overall quality of these coaches and the services they provide may not suit the majority of SMEs seeking practical help and advice. For instance many of the coaches recruited are retired bank managers and the like. By the very definition bank managers have never run a business and it seems doubtful that they could assist a company that is ambitious and wants to grow but need help to develop a strategic marketing plan for instance.

The private sector provides a range of business support services. These organisations are staffed and run by business people who have run their own businesses (and by definition of being in the private sector, still run their own businesses) and are highly qualified in a range of different disciplines. Ambitious SMEs are willing to pay for quality help, support and advice as they know that the return will be substantial and will benefit their business in both the short and long term.

If you would like to explore how business support can help your company contact Bob Francis on 07941 426807 or email at bob.francis@sgba.co.uk

Business Improvement Strategy

13/09/2011 By Mushroom Internet

Imagine a business that was trying to grow, but was making no profit, generating no cash, and not paying its owner-directors a proper salary or dividends.

By going over their business, end-to-end, and they found 27 areas where their business could be improved, and by implementing their 27-point plan, within a year they had turned their business around to a PBIT (profit before interest and tax) of 17% of sales.

They then tackled their interest payments: with help, they were able to find lower-cost working capital so that they could pursue their plans for growth, and still have enough to pay themselves a decent return.

Business improvement should be part of your business strategy

There is as lesson to be learned here about thorough and systematic business improvement: no matter whether your business is rocky like theirs, or doing reasonably well, there can be a huge benefit in having business improvement as part of your business strategy.

It can help you to:

Find new opportunities for growth;
Squeeze out additional margin, profit and cash;
Reduce your loans or overdraft;
Increase your working capital; and
Pay yourself more.

And all of this will serve to increase the value of your business when you come to sell it and move on.

Areas of where your business can be improved

There many be benefits to be found, some small, some larger, from every area of your business:

Revenues: existing customers, new customers, pricing, use of assets;
Cost of Goods Sold: development, production, procurement, service, logistics;
Overheads: costs and shared services;
Taxes;
Balance Sheet; receivables, payables, inventory, property, plant and equipment; and
General Management: planning, delivery, performance, operational capabilities, stakeholders and other external factors.

Focus on the issues where the return is worth the effort

So, as part of your annual strategy review, maybe you should crawl over your business, end-to-end, looking for areas where it can be improved.

The only caveat is, recognising your time is your money, you should only work on those areas where the return is worth the effort.

Continual Improvement

And while there may be one-shot improvements you can make, such as outsourcing an overhead function to make a net saving, there will always be those areas that need to be addressed gradually, step-by-step.

These are areas where a Continual Improvement programme can really help.

Posted by Peter Johnson, Business Advisor with SGBA. If you would to talk to someone about your business, including your business improvement strategy, call Peter on 07714 093406 or email him at peter.johnson@sgba.co.uk.

Joined up thinking for business support for SMEs?

07/09/2011 By Mushroom Internet

A few days ago I moaned about the lack of joined up thinking in business support for SMEs in the South. At that point there was to be one stop on the Startup Britain (http://startupbritain.org) bus tour in the region but it was closed to the public! This bizarre state of affairs has now been corrected and the following public announcement was made on the Startup Britain blog:

Our morning visit to the Portlade Aldridge Community Academy in Brighton on the 19th of September is now open to the public!

Portslade Aldridge Community Academy

Chalky Road

Portslade, Brighton

BN41 2WS

We have also arranged an additional afternoon event on the 19th of September from 2-4pm at the Falmour Campus at Brighton University.

The Checkland Building

University of Brighton

Falmer, Brighton

BN1 9PH

Business advisor’s and professionals will be on board giving invaluable, first-hand advice ranging from everything including social media, to finance, technology and accountancy. We look forward to seeing you there!

It just shows you what effect a good old fashioned moan can have. If you want to have a moan contact us or comment on our moan!

Achieve a good price when you sell your business

05/09/2011 By Mushroom Internet

Its a sad fact that only 8% of small businesses are sold for a decent price. This is not good news if you are relying on selling your business for your pension, or indeed for any other purpose.

However, many more businesses would be saleable for fair value if the owners had planned their exit in good time.

Exit strategy

Will you transfer your business within your family, or do you want to sell it – to an employee, or to an outside purchaser?

How much do you want for it? When? Will you stay with it or move on?

You’ll need to think this through because your exit strategy will determine how you go about positioning your business for its eventual sale.

Positioning your business for sale

You’ll start with a valuation and you’ll almost certainly find it is well below what you need.

So, then you’ll need an analysis of your business to show you what has to be done to achieve your price. This may include:

getting your accounts in shape and audited;
some growth, not the least to show your business has potential; and
positioning you, the owner, so that on the eventual sale the business can be run either without you or on a planned exit path such as an earn-out.

Probably 2 to 3 years – when you have done the analysis, you’ll see this is the length of time it is going to take to put your business in the right shape to sell it for a good price.

Plan and make the changes

Now that you know what has to be done and who you might sell it to, you can get on with planning the changes you need to make to your business and making them happen.

You’ll also need to identify who, in the long run, might buy your business so that you can position it to be attractive to them.

Get the right help

Having gone to all that trouble the last thing you’ll want to do is to sell cheap. So, do make sure you choose people to help you who have a track record in achieving excellent value.

If you are in this situation and would like to talk to someone about it, please feel free to contact us. We can help in every stage from the setting your exit strategy through to finding a buyer and making the sale.

Posted by Peter Johnson, Business Advisor with SGBA. If you would like a free initial consultation to discuss your business, including your Exit Strategy and Plan requirements, call Peter on 07714 093406 or email him at peter.johnson@sgba.co.uk.

Continual Improvement

29/08/2011 By Mushroom Internet

As a small business owner wanting to grow your business you will be looking at ways to improve your business to generate more profit and cash, to free-up working capital, and to make more effective use of your own time.

While there may be one-shot improvements you can make, such as outsourcing an overhead function to make a net saving, there will always be those issues where the benefits are obvious but the means of achieving them are not so clear.

Continual Improvement is not just for manufacturing quality

Adopting a systematic, continual improvement approach to those issues could be the answer.

It used to be thought that continual improvement was about manufacturing quality, but these days, quality is seen as something that should be embedded right across a business.

And likewise the continual improvement methodology can be applied to issues, right across a business, in every function, for example:

improving the enquiry rate from an existing marketing budget
increasing the average sale value by designing and up-selling additional features and products
improving cash flow though better credit control and debtors management
reducing manufacturing costs with improved delivery times and no loss of quality
reducing inventory cost and obsolescence
achieving an overhead cost saving by reducing headcount
releasing management time by putting in better delegation, coaching and review processes

And lots more…

The PDCA Continual Improvement Cycle

The PDCA or Deming Cycle

First you set down the objective you want to achieve.

Then you embark on the 4-step PDCA cycle Plan – make a plan for achieving it; Do – carry out the plan; Check -gather and quantify the results; and Act – decide what to do next.

Having decided what to do next, you then make a new plan and repeat the cycle.

Obvious, really – when you sit down to work out how to deal with your issues, your thinking almost certainly follows those steps anyway.

Set a timetable and review progress

But the key to making this work is to get the people designated to resolve the issue – you, a member of your staff, or a small project team you have put together – to set a timetable for each cycle and stick to it.

And if you have the resources to run a number of improvement projects in parallel, you can review them at your management meetings, monthly or quarterly.

The results will come, slowly but surely, and year on year your company’s performance will get better and better!

We can help

Posted by Peter Johnson, Business Advisor with SGBA. If you would like a free initial consultation to discuss your business, including how to embed Continual Improvement in your company’s culture, call Peter on 07714 093406 or email him at peter.johnson@sgba.co.uk.

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