For the last 3 months I have given you some bite sized guidance and advice on starting a new business. From what you should do before you start through to dealing with business taxation.

I hope I have helped you understand some of what is required when starting a new business, and for those of you who already run a small business I hope I have helped you understand some of what it is the accountant does for his money, from helping you decide what legal structure is right for your business through to running your payroll.

Now you have some of the finance related basics under your belt it’s up to you where you go next.

Remember, every new business not only needs solid financial foundations, it also needs everyone to know it exists, so remember, publicize your business at every opportunity, and most importantly of all, don’t give up on your dream.

Good luck.

Tags: Business Development, Business Start Up, Entrepreneur, Micro Business, Self Employed, Working for yourself, SME, OMB, Publicity, Business Advisor, Holden Associates, Accountants

How many of you have thought ‘if only I had thought of that’ when you see the latest entrepreneur with his latest business idea or invention in the press.

Well, I think I have cracked it, I have found a site that brings some of the latest entrepreneurial ideas to your screen, the site is ‘Springwise.com‘.

Springwise.com is a global network of some 8,000 spotters around the globe that report on the latest, smartest and newest business ideas.

Now, not all of them will work, but what a play ground for the entrepreneur, go have a look, it’s like being a kid in a sweet shop, so many ideas to choose from.

Tags: Business Start Up, Business Development, Springwise.com, Entrepreneur, New business idea

Business taxation - depending on what structure you opted for you will eventually have to deal with either income or corporation tax.

There is not enough time or space for me to cover all the tax implications and ramifications of a new or existing business in this our tenth bite-sized Start Up Guide. I will however cover a few of the basics to help you get a better understanding of this vast and complex area, so the next time your accountant sits opposite you talking about ‘tax’ you have an idea what it is he is saying.

Firstly we will cover income tax. Income tax is payable by soles traders and partners in a partnership, as well as those who are employed.

The income tax year runs from 6 April to 5 April, however, you can, as a self employed individual have your year end at any date you wish.

A more common year end date is 5 April (or 31 March), choosing this date avoids some of the complexities that exist within the UK tax system where you can effectively get taxed twice on your first years profits, ask you accountant/advisor to explain this to you when deciding on what year end date you want to use.

Cashflow tip: When choosing a year end date even though 5 April is a convenient date it may be that you consider 30 April, why? Well simply put, if your year end is 5 April 2006 you will have to pay all your tax by 31 January 2007, but, if you have selected 30 April 2006 as your year end date you have until 31 January 2008 to pay all your tax, thus giving you extra time and easing cashflow.

The rates of tax for a sole trader/partnership are:

There may also be a liability to Class 2 and Class 4 National Insurance Contributions depending on the level of profit.

Class 2 is paid on either a monthly or quarterly basis, and for the current tax year, which is 6 April 2006 to 5 April 2007, the amount is £2.10 per week.

Class 4 is paid based on the profits of the business over and above the personal allowance, which for the current tax year is £5,035. The rate of Class 4 is of 8% on profits up to £33,540 (that is from £5,035 to £33,540 which is profits of £28,505) and 1% on any excess over £33,540.

For the self employed tax is payable in three installments, the first two are based on the tax paid in the previous tax year. Therefore, the installment is paid on or before 31 January and the second installment on or before 31 July, the third is also paid on 31 January, and it is this third  installment that is the balance of any tax owed once the actual tax liability is known.

For example, J Blog has a year end of 5 April, in the tax year 6 April 2004 to 5 April 2005 (2004/2005) he paid tax of £10,000.

As Joe hadn’t had his accounts done when the Revenue assessed him for the following tax year (6 April 2005 to 5 April 2006) they based his payments on account ‘POA’ on the previous year as follows:

POA 31 January 2006    £5,000 (half of the previous years tax of £10,000)

POA 31 July 2006      £5,000 (the other half of the previous years tax bill)

When Joe had his accounts completed and his tax bill calculated in August 2006 it was discovered his tax was £12,000, it is this difference of £2,000 (the £12, 000 due, minus the £10,000 actually paid) that Joe will pay in January 2007 (his third installment), along with his first installment for the next tax year.

The self employed also have to complete a self assessment tax return every year, and although they have until the 31 January at the very latest to get it into the tax man, but please don’t leave it this long.

Next, Corporation Tax. Companies pay their tax differently to the self employed, and they pay corporation tax not income tax.

Unlike the self employed a small company pays its tax in only one payment, and this payment is due nine months and one day after its year end date.

Companies pay tax at 19% on the first £300,000 of profits, and then a higher rate thereafter.

Like the self employed a company also has to complete a self assessment tax return, this return is known as a CT600 but unlike the self employed  this return has to be with the Revenue 12 months after the company’s year end date.

I hope this bite sized guide has given you a better understanding of what is a very complex area. The key is to ask your accountant/advisor at every stage to explain things to you in plain English so that you can understand.

Tags: Business Development, Business Start Up, Entrepreneur, Micro Business, Self Employed, Small Business, Limited Company, SME, OMB, Self Assessment, Corporation Tax, Income Tax

Like it or not if you are going to employ staff Payroll is something you are going to be faced with, how you deal with it is up to you, you may opt for the DIY route or you may use the services of a professional.

This bite sized guide is for those of you who are opting for the Do It Yourself route.

If you are thinking of taking someone on first take a look at the Prospective Employer’s Pack from the Revenue.

If you know you are going to take someone on then you should register as an employer before you do so. To register contact the New Employers Help line and one of the operators will talk you though the registration process, it really is a painless experience.

The New Employers Help line operator will need some general information from you in order to get you registered as an employer, to make things easier have it at hand. This information is:

1. General Information
   • Business Name
   • Trading Address
   • Name and address of employer
   • National Insurance number and Unique Taxpayer Reference of employer
   • Contact telephone number
   • Contact email address if registering using email
   • Nature of business
2. About your employees
   • The date you took on (or will be taking on) your first employee(s)
   • How many employees you will have
   • The date you intend to pay them for the first time
   • How often you intend to pay them
3. About your payroll
   • The address from which your payroll is run
   • The name, address and telephone number of anybody who looks after your payroll
4. Simplified Deduction Schemes only
   • Name, address including postcode of each employee
   • Date of birth and National Insurance number of each employee
   • Nature of employment for each employee
5. Partnerships only
   • Names and addresses of any business partners
   • National Insurance number and Unique Taxpayer Reference of any business partners
   • If you are a Limited Liability Partnership (LLP) you must provide your LLP number.
6. Limited companies only
   • The company’s Registered Office, Company Registration Number and the date of incorporation.
   • The names, addresses, private telephone numbers, National Insurance number and Unique Taxpayer Reference of the company directors.

Once registered you will then be able to operate the Payroll for all your staff. As a new employer you will receive a New Employers Starter Pack which will contain guidance on operating PAYE, National Insurance, Statutory Sick Pay and Statutory Maternity Pay.

But how do I calculate my employees net pay?

It’s only possible to give you an outline, as the running of a payroll system is a complex area.

To calculate the amount of tax and national insurance due by an employee, the Revenue will supply you with sets of tables.  By reference to the pay adjustment tables and your employee’s tax code you will be able to calculate the amount of salary that is not subject to tax.  The difference between this figure and the gross amount is the employee’s taxable pay.  By reference to another set of tables called the taxable pay tables the tax can then be calculated on this taxable pay.  The employer’s and employee’s national insurance is calculated by reference to the gross pay with a third set of tables. 

Note: The tax and national insurance should be paid to the Inland Revenue by the 19th of the month following that in which the salaries were paid.

The above is only a bite sized guide, but I hope you find the links useful, and if you are going to try the DIY route the Revenue run training days at various centres around the country, try phoning your local office for details on the next one in your area.

Tags: Business Start Up, HMRC, HMR&C, Payroll, PAYE, NIC, National Insurance, Employing Staff, Employees, New Employer, Small Business, SME, OMB

Before my meeting with Steve yesterday, I was interviewed on behalf of the Government of New Zealand, asking my opinion about doing business with New Zealand. We have several hundred New Zealand customers and I have been involved with my export activities with that region for a number of years.

What became clear from our conversation was, that New Zealand as a whole, is thinking about it’s place in the World in terms of business and live-style. European Governments, sit up and take note ” …. and live-syle!”

One other point caught my attention, and that is the notion, that entrepreneurship is hampered by the worry about failure. This is a fact I encounter very often when I am speaking at events or directly to entrepreneurs. One could just say: ” Don’t worry about that, life is too short!”, but that would not do it justice.

Success is a staircase of failures.

And to tell you the truth without failure, you can never build a really successful business. Let us look at this from a different point of view.

If someone comes up to you and says: ” Hey I like your product, it’s great.” What can you learn from that?

But if someone comes up to you and says: ” I don’t like your product, because…..!” Now you are learning, right?

Right, but this person also thinks you have failed in one way or another (!), yet this failure will move you forward. In other words you need to fail in order to provide a product or service that clients want to pay for. And sometimes the failure may be “catastrophic” for your business model, that does not mean it has to be catastrophic for you.

Once you include the possibility of “failure” in your business model, and act accordingly, you will not really FAIL. The only time you really fail, is if you give up yourself.

If New Zealand can find a way to teach their entrepreneurs to succeed with their “failures” and maintain a happy life-style, an ecologically sound and socially tolerant business environment, the whole world could benefit. I believe New Zealand to be in an almost unique position, to do this.

Let’s have it. New Zealand, New Thinking.

Tags: Accountants, Business Development, Business Idea, Business Infrastructure, Business Mentoring, Business Start Up, Entrepreneur, Environment, Home Business, Homesourcing, Micro Business, New Zealand, On-demand, OnlineOffice, SaaS, Selfemployed, Small Business, smb, sme, SOHO, Teleworking, Very Small Business, VSB, WOW

Following our recent agreement, Steve Checkley and I had our first working meeting yesterday. He surprised me by showing me the first customised parts of AccountsVision for WinWeb. I am happy to present:

We developed our WinWeb API just in time. We will have a fully integrated version of WinWeb AccountsVision sometime in November. Should any of our Partner Accountants wish to use the software beforehand, on a regular .csv or manual basis, please let Rachael know.

What I enjoyed even more about our discussion, was the near 100% alignment of our vision for the future. Steve worked in practice for many years, and is passionate about helping accountants to safe time and making their daily tasks more productive.

It is in this framework, that we will work together, and I am sure Steve will help us to improve our AccountsOffice from an accountants point of view. I am looking forward to his input. Here are some cornerstones of our joint venture:

• We will jointly work on SaaS offering around AV, with a beta by the end of the year;
• AccountsVision will leverage the WinWeb platform for these SaaS developments;
• WinWeb will leverage AccountsVision knowledge in this area;
• AccountsVision will offer more and more applications around the accountants practice, i.e. Company Secretary tools with online filing, automatic tax return generation and online filing, and so on….;
• WinWeb will concentrate on the client side of things, with enhanced AccountsOffice, launch of AccountsOffice Lite ( in testing as I write ), online filing, enhanced cash flow and business planning tools, etc.

It is not often that one can find a partner, which fits in so perfectly with our own development focus. Together we will offer solutions for entrepreneurs and accountants alike to reduce accountant time spend on worthless IT tasks and free this time for active involvement in clients businesses to reduce mortality rate and increase business success.

Just to clarify, all Silver Partners and Gold Partners will get WinWeb AccountsVision ( Standard Edition ) FREE with their annual partnership, for all Bronze Partners we will subsidise the product by over 60%, from £ 379.00 (+VAT) to £ 150.00 (+VAT).

It is our relationship with our Accountant Partners and Solution Partners in connection with our online technology, forming our Small Business Infrastructure, that sets us apart from our competition, and represents our value model.

UPDATE: Read more on this story on Steve’s blog.

Tags: AAT, ACCA, Accountancy Age, Accountants, Accounting, AccountsOffice, AccountsVision, AIA, Badger Hakim, Business Development, Business Infrastructure, Business Mentoring, Business Start Up, Business Tool, Cash-Flow, CharterGroup, CIMA, CIPFA, Client Relations, CPA, CPAs, Customer Service, Entrepreneur, Evenlode Network, Finance, Holden Associates, Home Business, Homesourcing, ICAEW, ICAI, ICAS, IFA, IT, Micro Business, On-demand, OnlineOffice, Outsourcing, SaaS, SBI, Selfemployed, Small Business, smb, sme, sme-blog, Software as a Service, SOHO, Teleworking, United Kingdom, VAs, Very Small Business, Virtual Assitants, VirtualOffice, VSB, Web Technology, WebOffice, WinWeb, WOW

Haggle, I like this site, this is a website that encourages us all to ‘Join the wealth preservation society’.

From a Business Advisers view point this is a great business idea, Steve Dixon the founder of Haggle had one of those Eureka moments, after spending his valuable time searching the Internet for family and friends, as so many of us do, looking for those bargains he thought:

"You should make them do it for themselves or charge them"

Well like all good entrepreneurs Steve had a Eureka moment and acted on it.

Then came the reality, the idea is simple, but still none the less fantastic, but next came the implementation, now here we are not talking about worrying has he registered with the Revenue etc, we are talking the thought his idea could cost millions to implement, and this is what forced Steve, reluctantly, to shelf his Eureka moment, but only for a short time.

Again, it was another realisation that brought Haggle4me.com in to being, Steve realised he didn’t need premises and staff to fulfil his dream, what he needed to do was to provide a venue for people to meet and haggle, and now you have Haggle4me.com.

Go on, take a look at the site, read Steve’s own account of how Haggle came into being, and meet the people behind this venture, and if you get bitten by the bug, Haggle.

Tags: OMB, SME, Haggle4me.com, Institute of Business Advisers, Entrepreneur, Business Start Up, Internet Trading, IT

It’s interesting that at the moment there are a lot of discussions going on about ’speaking’ a common language in business.

Dennis is discussing recent posts by others concerning Business and IT not speak the same language, meanwhile Stefan is talking about big business such as BT not being able to get his business phone system (read as this is needed to earn my living phone system) up and running for several days.

Emily at Cannon Moorcroft has also entered the debate on how accountants need to speak a language the client can also understand, I guess this means some need lessons in ‘English for accountants 101′.

Over at the OMB blog Graham Salmon is talking about ‘Financial indiscipline’ in which he recounts tales of old clients who through a lack of understanding the importance of financial discipline are no longer in business, in fact Graham goes on to say out of the old client list only 5% of those clients are still in business today, yet there was in fact no reason this figure should not have been at least 25%, ‘Financial indiscipline’.

Again this ‘Financial indiscipline’ is another case of language, and how we all need to work harder to find a common language when doing business together, whether this is the IT company supplying their end users, or the accountants when talking to their clients, we all need to ’speak a common language’.

Some of us do try to speak in plain English, but at times we too can go off into the deep end when trying to explain something to a client and in doing so giving them far too much information which can leave the client wondering what’s hit them.

You never know though, if enough people out there keep striving to speak less in tongues and more in plain English we may just get there.

Keep checking back with Graham, it will be interesting to see his review of products on the market to help OMB owners with their ‘Financial indiscipline’, I hope to see the WinWeb solutions mentioned Graham.

Tags: Business Infrastructure, Business Start Ups, Business Tools, Client Relationships, Customer Service, SME, OMB, WinWeb, Small Business, Cannon Moorcroft, Holden Associates, Graham Salmon, Customer Support, Financial Indiscipline

Dennis has a interesting post about ROI ( Return on Investment), but what I really liked is this statement apparently by Prof. Andrew McAfee:

Business and IT have to speak a common language, which means that IT has to learn to ’speak business.’ I advocate framing the conversation in terms of capabilities delivered by IT. Framing it in terms of whizzy new technologies leaves business people cold, and gets us nowhere.

I think not only does it leave business people cold, they do not understand it and that creates business barriers.

And that is exactly what I mean when I say small business needs BSI - Small Business Infrastructure. It should be our aim to reduce barriers and red-tape, especially for small business. But all this talk about bits & bytes is not only not very helpful, but also counterproductive from the software vendor point of view.

We need to look at business processes and then apply the best technology and not the other way around. A real dialogue is needed, and for this conversation we need to “speak business.”

Tags: Business Development, Business Infrastructure, Business Mentoring, Business Start Up, Business Tool, Client Relations, Customer Service, Entrepreneur, Home Business, Homesourcing, IT, Micro Business, SBI, Selfemployed, Small Business, smb, sme, sme-blog, Software as a Service, SOHO, Teleworking, VAs, Very Small Business, VSB, Web Technology, WinWeb

Here a little example how small business gets dumped on by big business.
BT - British Telecom cut all my telephone lines off. I work mainly from home and they disconnected all my lines. Response so far:

We don’t not know what happened (!), BUT we are sorry. And nobody can come to see you until Thursday.

That was Tuesday. This is business reality 21st century England. Just to make this point, these are business lines, not private customer circuits. They are short staffed! Two ISDN-2e lines (four channels) down and they can not do anything for three days?!

The people I spoke to had no help to offer, I had to ask them to divert all my calls to my mobile, they had to find out if that was possible!?! Do these people get any training anymore? Does BT care what they do to their customers? Why is the customer service so bad? When they say “We are sorry!”, why does it sound like an insult and “We don’t give a s***!”?

“We don’t know what happened!” How can you get any comfort out of a statement like this? If they really don’t know, then BT is in even more trouble then even I can imagine. Or they will not tell you the truth, which is even worth. But either way, you will not know when this nightmare is over and you remain in limbo.

I was commenting on a ROI discussion on Dennis’ Blog earlier today. How do you ROI the services from a supplier like BT!

Can I ask anyone who knows me and has skype to email me their skype details!

BTW, all you BT people out there I would love to hear from you on this blog. You are using skype yet?

09.08.2006 UPDATE: BT came today, it turns out they did not know what the problem was! Why? Well the telephone line connected to my phone system was not ISDN and it was not my number. We found this out by establishing that the D-channel was missing that was why BT believed the line was there, when it was somewhere else.

They will go back and “try” to find my circuit, but can not tell when it will be found.

Since I have a VoIP telephone system I have now used the ADSL (Internet) line, to connect to the outside world for out going calls, but incoming is still diverted to my mobile.

OH, I almost forgot, they are SORRY!

11.08.2006 UPDATE: My phone is working again.

Tags: bad business, British Telecom, BT, Business Tool, Client Relations, Customer Service, Skype