Okay, I know this is the least favorite part of running your own business, having to keep ‘the books’.

As a practicing accountant I can also say it is my least favorite part when a client turns up with records that are in a mess, and as a result of sorting this mess out, I am then left with the quandary of a level of fee that does not represent any value for the poor client.

It is so important, boring and dull maybe, but, it is important that you understand you have to keep proper records, not only for the tax and vat man, but also for yourself, yes yourself, how else do you know who you owe, who owes you, or if your actually making or worse losing money.

You need to look on your books as your very own window on the health and well being of your business.

So, now you know why you need to keep books, but how do you go about it.

There are many ways to keep records, from nothing (not recommended), then there is manual and next you have countless software packages, all varying in price.

Nothing at all

Worth a mention I guess - DO NOT USE THIS METHOD! There, mention over.

Manual records

If you have decided that pen and paper is your preferred choice then it would be easiest if your records are maintained on what is called a ‘receipts and payments basis’.

You will record who you pay, and who pays you when the transaction takes place, and if you are vat registered your vat will be accounted for at this time also.

You can of course run your vat on what is called an ‘invoice basis’. This method involves you claiming vat back on expenditure and paying vat on sales when the invoices are raised, irrespective of when payment is made. This would mean you need an extra couple of books for this alone, and can lead to making the whole issue far more complex.

Manual records are great if you run a small business with little real need for tracking a significant number of transactions, but once your business starts to grow getting the right information from a set of manual records will prove time consuming, and time is something you may not have a lot of.

Computerised records

This is my preferred choice; using the right package for your needs and with suitable training and support of course.

This method allows you to keep your records in either the ‘receipts and payments basis’ or the ‘invoice basis’ as mentioned above, but which ever method you opt for it will not become a messy and complex affair because the software system will deal with everything for you behind the scenes.

Computerised systems now fall into two very different camps, the first are those that sit on your computer, and as such you need to take responsibility for ensuring you back your data up on a regular basis. Also, when you buy such a system the up front costs can be expensive.

Some such systems are Sage, TAS, Clearlybusiness, and VT transaction.

Next is the new generation of SaaS (Software as a Service) offerings, these operate in much the same way those that sit on your computer do, except you use them over an internet connection . They come with the distinct advantages that backing up of data is dealt with for you, you pay a low monthly cost (note: winweb is free for one user) and not an up front cost, you can access your records from anywhere in the world as long as you have access to the internet and your accountant can also log in and see what is going on financially in your business in real time.

Some of these providers are Winweb, Twinfield, Liberty Accounts and KashFlow.

You also need to decide who will keep your records, will this be you or your spouse? Keeping your books can be very time consuming, don’t under estimate this. 

Some people will use their accountants and other will use bookkeepers. If you are going to use a bookkeeper, the first port of call should be a Professional Book-keeping Institute.

Which ever method you decide you are going to use take professional advice first, it may save you a lot of time and effort and maybe money to.

Tags: Business Development, Business Idea, Business Start Up, Entrepreneur, Micro Business, Self Employed, Small Business, SME, OMB, Book-keeping, Book-keepers, Accountants, Winweb, Twinfield, Liberty Accounts, KashFlow, Sage, TAS, Clearlybusiness, VT transaction, SaaS

Okay, I know this looks like the heat has got to me, but I was just talking to a client about market share, or lack there off, and the lack there off came down to customer perception and company profile (read as outward appeal).

So, I made a remark, ‘it’s just like which honey and mustard salad dressing you choose when shopping as Tesco’, well as you can imagine this stunned my client into silence for a few moments, after which, he asked what the hell I was going on about, and was the heat too much for me?

I then explained, while out shopping at the local supermarket last weekend with my wife, I was informed we needed Honey and Mustard Salad Dressing, so over to the isle with all the various salad dressings we went and I duly picked one up, I realised from the face being pulled at me my wife did not approve, she said she didn’t like the look of the contents and picked a different make.

I only read the label, it had inside what we wanted, but she was right, upon looking at the content of the glass bottle it did not look as appetizing as the other, it probably needed a shake and I am sure it would have tasted very nice, but it did not on first inspection look attractive.

The same can be said about you and your business when potential customers look at you.

If you don’t look like the kind of business they want to deal with they won’t try you out and see, they will move on.

People often go on first impressions, whether it’s your website, the premises you operate from, your stationery, your receptionist when she answers the telephone, even down to the way you dress, yes all these things matter when you are trying to grow a small business.

So remember, it’s all about the Honey and Mustard Salad Dressing …

Tags: Business Development, Business Idea, Business Start Up, Entrepreneur, Micro Business, Self Employed, Small Business, SME, SMB, OMB, Honey and Mustard Salad Dressing

Previously I have mentioned the benefits of a blog, today I am going to point to a potentially huge downside.

On Wednesday 19 July the BBC ran a story on it's website about a British secretary who was sacked by her bosses for having a blog. The blog is petite anglaise and is her online diary about life in France with her three year old daughter, but unfortunately mention was made to her 'office life'.

In her postings she has referred to one of her bosses as 'very old school' with a 'plumy Oxbridge accent', and I guess this must have upset someone.

Since going public on her dismissal support has flooded in for this working single mother of one.

I won't get into the debate of who is right or wrong on this, but, the blog has been running for a little over two years and in that time has built up a loyal following of some 3,000 readers daily!

Now, the 'old school' firm which has been linked to this sacking also has a website, a static brochure site, I wonder if their site receives such a large number of regular daily visitors, I know mine doesn't?

Since the news of the sacking went on the net the readership of the blog has increased to such an extent that the servers have on several occasions been overloaded and resulted in the site being redirected to prevent other blogger's sites crashing, now that is a lot of traffic!

There is a saying there is no such thing as bad publicity, I disagree!  Just read some of the comments of support, glad I didn't sack her!

We are entering a brave new world, and technology, including that on the internet is a big part of that, but I guess some just won't make it ……

Tags: Blogger's, Online diary, Petite Anglaise, Blogging, Accountants, Chartered Accountants, British Secretary Sacked

Once you have decided you are starting a business you need to think about money to fund the business venture and how you are going to get it.

In this, the sixth part of our start up guides we look at the more common types of funding you will come across. You may need money to cover initial expenses or you may need it for expansion, what ever your needs we are going to cover the different methods in this part of our guides.

You need to ask yourself these few questions before you can deal with where you go for funding:

1. How much money do you need?
2. How much of your own money are you putting in?
3. How are you going to spend the money?
4. Why should a lender lend to you, can you convince them you are a good business risk?
5. Will the location of your business or the economic or political climate have an effect on your business?

These are only a few of the kinds of questions that will go through the mind of any potential lender, after all you are asking someone to lend you their money, it is only fair they make sure you are taking this seriously, and having the answers to the above questions proves you have given this matter some serious thought.

You will also need to be armed with your business plan/forecast when you go looking for funding. Any potential lender will want to know about your business, they will want to see what your cash projections look like, this way they can better understand your need for funding.

Funding comes in two forms, debt or equity.

Debt

This means borrowing money from family, friends, banks or other investors.

Equity

This means in exchange for funding you sell a part of your business.

Sources of debt financing

Banks

1. Overdrafts - these are set at a predetermined limit which is reviewed on an annual basis.
2. Loans - both short and long term. These are both over a set period of time with regular set repayments.

Leases

If you are buying equipment it is common to purchase this under a leasing agreement,  these agreements tend to be a bit more expensive than conventional bank finance. In common with bank loans the finance is for a specific amount and repayable by monthly installments.

Trade credit

Most of your suppliers will supply you with goods and services which become due for payment on a given future date, this maybe within 30, 60 or even 90 days from the invoice date. This is a very important part of credit for any small business. Your suppliers will set the credit limit for your business themselves, over time you may be able to extend this giving yourself much needed breathing space.

 Sources of equity finance

Venture Capital Companies

A venture capital fund is often backed by a group of investors, with a management group that evaluates potential investment opportunities. The cost of this type of funding is high compared to traditional lenders such as banks.

Business Angels

On a smaller scale than a Venture Capital Company are Business Angels. Business Angels are private investors who have experience of running their own business, who can fund a start-up and early stage ventures and who can bring expertise to an entrepreneur.

The advantages to the above two methods is in exchange for part of your business you not only get the much needed funding but also advisors on your board with experience of not only running but also growing businesses.

A good place to start when looking at either of these two forms of equity finance is the British Venture Capital Association.

The above is only a bite sized guide, but I hope you have found it useful. As with anything in today’s business world please take professional advice first.

Tags: Business Development, Business Idea, Business Start Up, Entrepreneur, Micro Business, Self Employed, Small Business, SME, SMB, Bank Loans, Bank Overdraft, VCs, Venture Capital, Business Angels, Business Funding

It struck me today when talking to my younger sister that there are still a lot of people who don't know what a blog is.

I then saw what Graham had posted on his blog about the differences between a blog and a 'static' website, I won't reproduce what he has to say, but please go and have a look. Graham Salmon is a blogging accountant from Manchester, only up the motorway from me as it happens.

Although strictly speaking a blog is an online diary, I personally think it lends itself to being much more when used as by a business to interact with it's clients/customers.

Take The Small Business Blog for example, some of the posting are an online diary, like this one which was spurred on by a conversation I had, but other postings are intended to be more informative like the Start Up Guides, but unlike a static brochure type website this medium gives everyone the opportunity to interact, post comments and ask questions.

So, maybe some people will continue to use a blog as an online diary open for all to see, just as some businesses will continue to use a static brochure website, while others will combine the two and create an interactive website that not only tells everyone about you but also tells everyone what you are thinking and doing, and in return lets your (potential) clients/customers interact with you and your business.

An example of how such a medium like a blogging website can change relationships for the better is the example of how some clients perceive their relationship with their accountant, it is often said:

'My accountant doesn't listen to me.'

If he/she has a blog they no longer have a choice, because if they doesn't listen to you then chances are everyone else will, and this in turn will force them to change their ways, or join the Dodo.

Maybe it's time that you thought about a blog of your own, whether you add it to your corporate website of leave it as a stand alone site.

Tags: Accountants, Client Relations, Entrepreneur, sme, smb, Business advice, Self Employed, Blogs, Website, Web Technology

The idea of having virtual support provided to a business owner takes a bit of getting your head around, especially when the idea is new to you. I meet people via the phone or via face-to-face networking every week who ask me how can this be done? They just cannot imagine how it might work.

The Virtual Assistant Industry is now 10 years old and celebrated its birthday with the first international online conference in May this year - again, it was totally virtual. No physical trade exhibition hall but we did have a virtual one. No physical seminar rooms but we did have many virtual ones. But that's another story for another time.

To provide virtual support to a client means to provide services for them in another location, another office to that of the client. When I first heard the term 'Virtual Assistant' in the mid 90's I baulked at the idea of that name - it was hot on the heels of 'virtual reality' and I wanted everyone to know that I am real. However, the support I provide to my clients is very much virtual or remote. I've provided a series of case studies on my Virtual Assistant blog and you can read them there, but here I will give you an idea of how some of the work is carried out.

Work can be provided to a Virtual Assistant in many ways: phone, fax, email, courier, mail, dropped off, picked up, downloaded via FTP or other processes and so on. As the working relationship is established the VA becomes the virtual PA to the client and gets to know and understand their business, just as a PA does in a corporate office. He or she can respond to enquiries by email on behalf of their client, maintain and manage their database, newsletter preparation, bulk emails, mail merges, formatting of typed documentation, desktop publishing, audio and digital transcriptions, maintain and manage their websites, research various items, do article submissions online, maintain their blogs, and even manage their diaries/calendars.

I have clients who are not very computer and/or internet literate and depend on my knowledge and experience to help guide them in their daily business needs and explore new online options and advise them of how they work and whether they would be a suitable new facility to be utilised in their business. In effect I become a consultant and advisor, as well as their PA. My longest term client was with me for over 10 years and he's recently retired in his early 80's. Another client who is a similar age to me, has been with me for around 10 years and the services I provide for her continue to increase as she finds more things she wants to do with her business that are internet and web related. Her motto is 'do what you do best and delegate the rest' - which she does - to me!

So, if you struggle with your admin work and find that it is taking valuable time away from what you really should be doing for your business, then you really need to consider outsourcing to a virtual assistant. You could choose to engage one who is local to you if you have need of occasional face-to-face contact, or if that isn't necessary, then the locality really shouldn't matter. There are around 16 VA Networks currently in the world and you are sure to find someone who will look after you as you require. Some of the networks have Requests for Proposal forms or Job Request Forms which will help you outline what you're looking for. Other VA networks encourage you to peruse their listings to find the right person. KMT

virtual assistants, VA Networks, working virtually, virtual support

A major task for any new business is to ensure it is registered with the various government departments, this is one area I find a lot of new clients fail to do, mostly through a lack of knowledge, but sometimes through a fear of red tape and paperwork. The aim of this part of the start up guides is to help you get over this initial hurdle, and by doing so save you money, failure to register within given time limits carries a fine.

I will take each stage in turn starting with HM Revenue & Customs (formerly known before the merger as the Inland Revenue and HM Customs & Excise).

HM Revenue & Customs ‘HMRC’

If you are self employed as a sole trader or partnership you will need to inform HMRC of this fact, this is done by completing form CWF1. This form will provide HMRC with essential information, from personal details to when you started in business, what type of self-employed work you will do, your business address and much more.
This form will also deal with registering you as an employer if you have or are going to take on staff and you can also request a VAT registration form if you are going to be VAT registered.

If you are operating through a limited company the form you use is CT41G. This form much like the CWF1 for the self employed will inform HMRC that your company is in existence, it will give them details on your business address, what business you are in, accountant (if you have one) and it also tells them the date you started to trade.

Important to remember, failure to register with the first three months of commencing in business will result in a penalty of £100.

Class 2 NIC

As a self employed person you are liable to pay Class 2 NICs (this used to be referred to as paying ‘your stamp’), but you only have to pay this once your profits are above £4,465 (current year running to 5 April 2007). To make sure you register to pay your contributions you can complete a Direct Debit mandate, this way HMRC will take a monthly Direct Debit from your bank account. Currently the rate for Class 2 NICs is £2.10 per week. Without a Direct Debit you will receive a bill every 13 weeks.

Employing staff

If you employ staff you need to register as an employer, this can be done by phoning the New Employers Help Line and they will take the necessary information required to register you as a new employer. Once registered you need to seek professional advice on how to run a payroll scheme together with guidance on your responsibilities and obligations which are now quite onerous.

Registering for VAT

You need to consider if it is beneficial to be registered for VAT, if your turnover (sales) is less than £61,000 then you don’t need to be registered, but it may still be beneficial to be registered. Anyone will turnover exceeding £61,000 should be registered for VAT. To register you need to complete form VAT1. If you are in partnership you also need to complete form VAT2.

Please remember, these are only bite sized guides, there is a lot more to running your own business than can be put into such a guide, always take professional advice sooner rather than later.

Tags: Business Development, Business Idea, Business Start Up, Entrepreneur, Micro Business, Self Employed, Small Business, sme, smb, Inland Revenue, HMRC, VAT, Payroll, PAYE

Anyone who reads my blog knows I have a soft spot for Stuart Jones. His practice is in Cumbria, an area beset with economic problems but Stuart fights his clients' corner and regularly takes local bureaucract to task. Yesterday, he demonstrated how he adds value to clients. In one case: value to client: £5,932. Fees: £3,050 - total value percentage 195%.

Whether you are a practitioner or client, it's worth following the link that shows the breakdown. Most important, it demonstrates that if practitioners concentrate on the things that are important, then value can be found from doing what would otherwise be viewed as routine work. Net result - happy clients.

This is a great story of how the internet is enabling more and more people to set up and run their own businesses.

This story really caught my attention, it proves that a true entrepreneur will find a business opportunity even when they should be enjoying a wedding.

Renu Kapila who is a Business and IT graduate had the idea for her new business while getting ready for a friends wedding.

‘I was getting ready for a friends wedding, putting on all the finishing touches, and I was done. I looked around me and I was surrounded and fascinated by the wonderful, colourful women adorned in Indian attire, right down to the very last bindi! I was mesmerised by how beautiful everyone could look, the time, effort and planning taken to get everything right, not over looking anything.

What an idea to be able to have all this and much more at a click of a button ……?’

And so Renu had the concept of her new venture, Bollywood Bay, I guess essentially its An Asian version of eBay.

I wonder Renu, are you using Winweb for your accounting needs, if not give me a call.

Tags: Business Development, Business Idea, Business Start Up, Business Tool, E-Commerce, Entrepreneur, Great Business Idea, Home Business, Marketing/PR, Micro Business, Office/IT, On-demand, Online Shop, OnlineOffice, puppy, SaaS, Selfemployed, Small Business, smb, sme, Software as a Service, Very Small Business, VSB, WinWeb, WOW

Following my meeting with the Evenlode Network of Accountants of last week, I am happy to report that all network partners have become WinWeb Bronze and Silver Partners. The group has currently about 18 members in 18 locations.

The Evenlode Network was founded by a group of independent practicing accountants who were looking for an association to provide support for their growing businesses on an informal basis with the emphasis on mutual assistance.

As we approach our July 15th deadline for free bronze membership, I would like to take this opportunity to thank all firms of accountants who have had the insight and fore-sight to take us up on our free membership offer and support us and our clients with their invaluable service.

Tags: Accountants, Accounting, Bookkeeping, Business Development, Business Infrastructure, Business Mentoring, Business Start Up, Client Relations, Entrepreneur, Home Business, Micro Business, puppy, SaaS, Selfemployed, Small Business, smb, sme, Software as a Service, SOHO, Teleworking, United Kingdom, Very Small Business, VSB, WinWeb