Choosing the right furniture for your business depends essentially on the type of business. Cheap, second-hand desks and chairs may not be good business sense. If you think it possible that customers or suppliers will visit your premises at regular intervals, it is crucial to select furniture which projects the image you have planned for your business. People are very affected by appearances, even other business people. Choosing good-quality furniture can suggest to customers that your business, smart offices are crucial.
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The Right Furniture
Choosing Other Equipment
THE RIGHT COMMUNICATIONS
You need to buy a fast modem; choose the faster feasible modem on general supply (say ?150 – ?200). A modem – either installed internally within your computer or attached externally – lets you communicate with others direct from your computer screen using your phone line. You can send and receive e-mail and faxes, which can be read on screen, printed out, saved wherever you choose on your system and even dropped into other files you are working on, such as a database or a word-processed report. E-mail, in particular, is very flexible, allowing you to send and receive whole files, not just simple messages. A modem can also open up the world of the Internet to you, giving you the ability to explore external databases, gather information from governments, libraries, universities, companies and others. it is now possible to get on to the Internet for the cost of a local call from virtually anywhere in the UK, so ‘surfing the Net’ need not be costly.
The Final Process
There are two constructive steps you can take: consider whether you could negotiate with creditors to pay off what you owe in instalments or to pay a smaller sum which they will accept in full settlement. Or you can enter into what is known as a formal voluntary arrangement. This is a procedure whereby you offer to pay a dividend to creditors in full settlement of your debts. You need to contact an authorized insolvency practitioner, who will require fees in advance to carry out the work. Voluntary arrangements are a formal legal procedure and have proved very effective as a means of avoiding liquidation or bankruptcy.
A Guide To Choosing A Franchise
Keep a healthy dose of skepticism about franchises, franchisors and franchise specialists.
Make your own choice of advisers, do not use those suggested by the franchisor. The most unbiased advisers are likely to be a High-Street bank – some of which have specialized franchise giving independent advice – and the solicitor and accountant you employ to advise you.
Get your accountant to examine the forecasts given to you by the franchisor and to advise you on how realistic they are.
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Going For Growth
Growth businesses are the cream. They make up the top five percent of small companies – and around 20,000 a year are started. There are several subtle differences between the growth companies and the rest. What marks them out?
The definition of a growth company will usually be based upon one of the following measurements: growth in sales, growth in employees and growth in profits. Fast-growing businesses might be aiming for sales of ?500,000 in three years from a scratch start or show sales growing at over 60 percent a year from a base sales figure of say ?100,000 or so.
Who Has To Register
It is the person, not the business, who is registered for Vat. Each registration covers all the business activities of the registered person. For VAT purposes, a company is treated as a person. There are a number of reasons why you might not have to register. These include:
- ? your sales (strictly, the amount of your taxable supplies, see overleaf) are too low, but you might with still to register for VAT purposes and charge it on your sales
- ? your business operates outside the VAT area
- ? you make only exempt supplies
- ? you carry out non-business activities (but you would still charge VAT on what counts as your business activities)
Customer Care
It’s all too easy when you’re struggling with the finances, the production, the employees to regard customers as ‘just another problem’, ‘a nuisance’ or ‘getting in the way’. But you need to drag yourself back to reality. Without customers, you have no business, no matter how slick your financial control, nor how good your man-management.
Put yourself in your customer’s shoes. What would you expect if you were buying this product? How would you want to be treated over the phone if you are phoning with a query? You won’t be able to satisfy all customers, but you should struggle to satisfy all reasonable customers, because you want them to carry on buying from you.
When The Business Is More Complicated
There will be many businesses for whom the simple system described above will not be sufficient. This will apply to you if you make many sales or purchases each month and keep a lot of stock on the premises. There will be an increasing number of documents and records needed. Your business may need to set up a system for recording information which includes some or all of the following records. And it may well be appropriate to introduce a computerized accounting system.
Accountant And Book-Keeper
The advice accountants may be able to give ranges from the basic services, such as book-keeping, to the more sophisticated, such as tax planning or raising funds. Not every accountant will offer every sort of advice. For example, a big firm of accountants is unlikely to undertake weekly book-keeping functions; an accountant working alone may not have the expertise to help with raising funds.
Why Will They Buy
Before you can answer this question, you have to find out what your customer wants. What are the benefits and features of a service or product which your target group rates most highly? Research is essential.
Once you have the framework of your customer needs, you can begin to vary your service or product with the aim of meeting those customer wants and needs more successfully than any other supplier. There are a number of ways in which your sales package (that is, your product/service plus a range of other sales features of your business) can be altered to achieve the desired objective. These include:
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If You Are Self-Employed
The simplest way of increasing your pension is to start paying money into a personal pension, which is organized and invested by an insurance company; and, because you can get tax relief on what you pay at your highest rate of tax and your money is put into a tax-free fund, doing this may be the best way of saving for retirement. Since April 2001, you have been able to take out a personal stakeholder pension scheme. These are personal pensions which meet certain conditions on low cost and flexibility.
How Is The Tax Worked Out
What Do You Charge Vat On?
You charge VAT on the taxable sales you make; this is known as output tax. The amount of VAT is worked out on the price for the goods or services you are supplying. Occasional sales of second-hand goods are treated in the same way as new goods, but if your business involves buying and selling secondhand, you’ll usually be covered by a special scheme.
You cannot escape charging VAT if you decide to take other goods, for example, rather than money in full payment or in part exchange. In this case, you have to work out the Vat to add on the basis of the open-market value of the goods or services you are supplying.
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Losses For The Self-Employed
If you have made a loss in your business, what can you do with it to cut your tax bills? Your two main options are to:
- ? deduct the loss from other income or a capital gain
- ? carry the loss forward and deduct it from future trading profits from your business.
DEDUCTING THE LOSS FROM OTHER INCOME AND CAPITAL GAIN
You can either deduct your trading loss from any other income or capital gains which you have in the tax year in which your loss-making accounting year ends, or you can carry the loss back and set it against other income or gains for the previous tax year. Other income could be, for example, dividends from shares or earnings from a job.
Phase 2 Money
Going for growth usually means raising more money. Not always. You may have created that elixir of business, a cash-generative model, and be able to fund your own expansion with your own resources. But you are likely to be the exception.
In most cases to expand you will need to raise outside money. Phase 2 money is likely to be different from the finance you needed to start the business in that it is likely to be substantially more, come from outside sources and be risk-capital rather than loans. Read the rest…
Property Income
The tax treatment of this income is outside the scope of this book and only brief details can be given here. A helpful tax concession is the ability to rent out a room in your own home and pay not tax. The Lloyds TSB Tax Guide 2002-3 gives fuller details of the Rent-a-Room scheme and the taxation of income from property.
If you run a hotel or guest house, your income will normally count as earnings from self-employment and be taxed as described. With the rent-a-room scheme you can let out furnished rooms in your home and as long as the total rent you get during the year is not more than ?4,250 in 2002-3 (before deducting any expenses), you don’t have to pay to on that income. If you let the room out jointly with someone else, each of you will be able to get ?2,125 tax-free. Read the rest…
Investigating And Negotiating
Before you sign anything, there are several steps to take to investigate the premises further. These steps are:
- ? to estimate costs
- ? to check structure of property (if it is freehold or a repairing lease)
- ? to investigate the legal side of things, and
- ? to look at local authority requirements.
TO ESTIMATE COSTS
There are a few things to investigate before estimating costs. First, do not rely on the measurements given by the estate agent or landlord. Measure the premises yourself. There is a chance that the area is less than said which could mean lower rent for you, if you have been quoted a rent per sq. ft. Read the rest…
What To Do With A Design
Sometimes the success or failure of a product depends not only on how it works, but on what it looks like. The outward shape or decorative appearance of a product can also be protected, either by:
- ? relying on the automatic protection of design right (a bit like copyright), or by
- ? registering the design, by applying to the Patent Office. This gives stronger protection but not all designs can be registered – and it takes time and money to register.
The Pluses And Minuses
Your main consideration before buying any particular franchise is whether it will work as a business for you and provide you with the sort of living you require. Assuming that you have found such a franchise, there are advantages and disadvantages of which you should be aware.
Other Insurance You Can Get
INSURANCE AGAINST FIRE AND OTHER PERILS
This covers destruction or damage to your buildings and contents through fire. You can also be covered for other risks such as lightning, explosion, aircraft, storm, flood, riot, malicious damage and so on. If you work from your own home, you will still need to get your own insurance policy and there are some special schemes available.
Worth getting? Yes.
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The Message- Who, What, How
WHO IS THE MESSAGE TO?
If you do not know what your target market is, you really do not deserve to succeed. You need this information at your fingertips from a very early stage of planning your business. Defining the target market necessitates sorting out its characteristics: the number, the location, the spending power, the class structure.
Knowledge of the target market is needed to help refine the message and to select the most useful way of communicating the message to that particular group.
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The Plan To Control The Business
When you produced your business plan before you started your business, you incorporated some forecasts: profit and loss and cash flow. These could form the basis for your plan (or budget), which you need to control the business, although probably with some adjustments.
What you need for a budget that you use to control your business, but that is also to give you (and any employees) something to aim for, is a plan incorporating figures which you believe you may be able to achieve. Be wary of including figures that are too easy for the business, in case meeting the budget turns into the objective, rather than striving for the biggest profit possible.
Banks obviously offer a wide range of financial facilities
Banks obviously offer a wide range of financial facilities, such as current accounts, provision of overdrafts, longer-term loans, leasing and factoring, import and export assistance. There is more detail about the provision of finance ‘Raising the money’. Most of the banks also have specialist services for small businesses and networks of small business centres or advisers. Some of the banks offer free banking for the first year or longer if you open a business account with them.
How To Pay For Equipment
There are four main ways you can pay for equipment. Two of them involve buying the equipment, so you become the owner; the others do not, the ownership being retained elsewhere. The ways are:
- ? buying outright
- ? hire purchase
- ? leasing
- ? contract hire. Read the rest…
What To Do With A Trade Mark
WHAT IS A MARK?
A trade mark is something which identifies a product in the eyes of the consumer. The consumer will know who has manufactured the goods or who is selling them. Trade marks are closely linked with the idea of building loyalty among customers, so that they will choose your product or service over another similar one.
A trade mark can be a word or a symbol, such as a logo. Since 1994, distinctive smells and three dimensional shapes can also be registered as trade marks. Obviously, what you use as your trade mark should be carefully considered, as it needs to fit with the image of your product and business which you are trying to put across. Read the rest…
Working From Home
Many small businesses will start off in the back bedroom. Some, especially if they are part-time businesses, may stay there permanently. Working from home has several advantages:
- ? it is free
- ? it involves no travelling
- ? the work can be combined with any domestic tasks to be done
- ? there are no fares or lunches to be bought
- ? you can wear what you like
- ? it protects your house from burglars. Read the rest…
Your Suppliers
Quite a lot of the way you can deal with your suppliers (or creditors when you owe them money) is simply the reverse of what you do with debtors. Taking credit from suppliers is a significant source of finance for most small businesses. However, the other side of the coin is that those suppliers may be short of funds themselves and heavily dependent on getting in the money they are owed as quickly as possible.
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Balance Sheet Forecast
A balance sheet for your business will show what you own and what you are owed on one particular day. A forecast one will show your estimate of that picture at the end of the period.
There is more about accounting records needed to produce the right information for a balance sheet once you are in business. Of course, your accountant should be willing to help if you find it difficult to produce a balance sheet yourself. If you business is likely to be fairly small-scale and you are only approaching your bank manager, and for a fairly modest sum, a forecast balance sheet may not be necessary. Read the rest…
Building Your Reputation
Once you have selected your business or product name, your next strategy is to devise means of getting your name noticed by as many of your target customers as you can. Obviously, you do not want your name to be associated with any bad news, so you may find that you do not want to take up every opportunity to publicize your business name. What you should aim for is that your business or product name comes instantly to mind in your potential buyers, but with a favorable impression.
