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For a successful business, you need a viable business idea, the skills to make it work and the funding. Discover whether your idea has what it takes.

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It is likely you will need funding to start your business unless you have your own money. Discover some of the main sources of start up funding.

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Businesses are required to comply with a wide range of business laws. We introduce the main rules and regulations you must comply with.

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Some businesses need a high street location whilst others can be run from home. Understand the key factors from cost to location, size to security.

Your employees can your biggest asset. They can also be your biggest challenge. We explain how to recruitment and manage staff successfully.

It is likely your business could not function without some form of IT. Learn how to specify, buy, maintain and secure your business IT.

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News

September 2016

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The latest rise in employment suggests that UK businesses have absorbed the new Living Wage and have held their nerve following uncertainty over Brexit.

Winners and losers in the big rates shake-upRetailers in 11 out of 14 UK cities could be better off next year when their average rateable values go down in the 2017 business rates review.

Cities including Aberdeen, Leeds, Cardiff and Bristol will all see their average values decrease by over 30% according to analysis from CBRE. However, in Central London, rateable values could rise by as much as 170%.

CBRE's analysis shows the percentage rateable value movement from 2010 to 2017, ahead of the next rates revaluation and the publication of the proposed values by the Valuation Office Agency on 30th September.

However, the decrease will not be felt across the board and some retailers are likely to see an uplift on 1 April 2017. And the CBRE warns that, with the cumulative rateable value set to fall across the UK, the Government "will be seeking to maintain the level of tax generated by the business rates system". Therefore, it says, "the multiplier will be higher than we've ever seen immediately after a revaluation. Retailers should be aware of what the potential changes might be, and the impact on their business."

In addition, the Government has recently established a consultation that could change the business rates appeals process. The regulations state that the Valuation Tribunal will only order an alteration to the rateable value of a business if it considers it to be "outside the bounds of reasonable professional judgement".

Tim Attridge, senior director, Rating at CBRE, said: "Yes, there is the option to appeal, but this will be a very protracted process and the definition of 'reasonable judgement', is far from clear. With this lack of clarity, the key is for retailers to budget accordingly now, review their strategy and ensure they have sufficient funds in place to either challenge, or adapt to a new system in order to survive."

Government steps up action on late paymentThe perennial problem of late payment for small firms has prompted the Government to strengthen its Prompt Payment Code.

New measures to support the Prompt Payment Code have been confirmed in a letter sent to signatories of the code from small business minister Margot James and Philip King, chief executive of the Chartered Institute of Credit Management (CICM).

More than 1,800 firms are signed up to the Prompt Payment Code, with each one committing to the fair and equal treatment of suppliers. They agree to maximum payment terms of 60 days, with the letter confirming they should aim to pay within 30 days.

If payment terms stretch beyond 60 days, companies must demonstrate that exceptional circumstances apply. These will be considered on a case-by-case basis but could include commitments made to pay smaller suppliers faster than larger businesses.

Margot James, the small business minister, said: "Prompt payment can make all the difference to small businesses, boosting their cashflow and allowing them to invest in growth for the future. Although we have seen some progress, there are still too many business owners across the country who have not been paid on time by their customers."

James has called for a "culture change to stamp this out". The Prompt Payment Code, she said, "continues to play an important role in bringing this about, alongside a package of measures taken forward by Government and industry."

The voluntary Prompt Payment Code is administered by the CICM on behalf of the Department for Business, Energy and Industrial Strategy. The Government says new measures to strengthen the code and increase transparency have now been put in place. The Small Business, Enterprise and Employment Act 2015 introduced the statutory duty for large businesses to report on payment practices. This will come into force in April 2017.

In addition, the Government plans to appoint a Small Business Commissioner to provide support on payment issues and handle complaints from small businesses.

Sharp rise in HMRC asset-seizingThe number of UK businesses that have had equipment and assets seized by HMRC has risen by 145% in just one year.

It means the number of businesses whose assets were seized by HMRC in order to settle outstanding debts has gone up from 649 in 2014/15 to 1,592 in 2015/16.

The figures, obtained by Funding Options, suggest that more businesses are struggling to pay their overdue tax bills - HMRC tried to recover £42.6m of outstanding debt in the last year, an increase of 175% from the previous year where debts to the Revenue amounted to £15.3m.

Under a power called "taking control of goods", HMRC can seize assets in order to settle debts from businesses that have been unable to pay their overdue tax bills. Under the system, businesses are given seven days following a visit from a bailiff to pay their overdue tax before their assets are seized. The assets are then sold at auction in order to recover the money owed to HMRC.

Although this tactic is usually a last resort, the growing number of businesses who have had their assets seized suggests that HMRC is using increasingly aggressive methods to recover overdue tax. However, Funding Options points out that the seized goods often fail to achieve a good price and if they don't clear a firm's debts, that company is left with fewer assets as well as an outstanding debt.

In addition, Funding Options claims that small businesses are "particularly at risk" of having their assets seized because SMEs are more likely to have a volatile cashflow than larger businesses.

Conrad Ford, ceo of Funding Options, said: "With the stark rise in asset seizing it's clear that HMRC is cracking down on those businesses with overdue tax bills. Businesses must ensure they have sufficient funding in place to pay tax bills on time, without taking up capital from other aspects of the business.

"Often small business owners aren't aware of the many options available to them outside traditional bank lending," he added. This includes specialist products designed to finance tax bills. "With pressure on HMRC to increase tax receipts, it's becoming increasingly important that businesses make sure their tax affairs are in order and bills are paid on time."

Arrogance is biggest turn-off in job interviews

Most managers and employers (67%) find arrogance the biggest turn-off when interviewing candidates for a new job according to a new survey by LyteSpark. On a more positive note, the most impressive qualities in job candidates are: the ability to interact naturally (58%); preparation (50%) and eloquence (42%).

Just how long will the new £5 notes last?

It may be made of plastic and able to withstand a washing machine cycle but the new £5 note may not have a very long shelf-life if a new survey of consumers is anything to go by. A poll by Worldpay has found that a third of Brits believe cash will be obsolete by 2020. And, by this date, 54% of Brits also think phones will have superseded cards as the most popular payment method. "The shift that we are seeing in terms of consumer preferences and what shoppers now expect from the high street is seismic and paying with cash is an inconvenience for many of today's shoppers," said James Frost, chief marketing and commercial officer at Worldpay.

Why charity begins at work

Jobseekers increasingly prefer to work for companies that are socially responsible according to a new poll by Regus. It found that 45% of UK professionals said that it was important for their employer to be involved in charity work; and 37% would choose the more charitable company if confronted with two equal job opportunities. Richard Morris, UK ceo of Regus, said: "Corporate social responsibility has perhaps been regarded as a nice-to-have by many businesses rather than an essential element of business strategy. But, for today's jobseekers, charitable and community initiatives are incredibly important."

New Acas guide on improving productivity

Acas has published new guidance aimed at businesses of all sizes to help them become more productive. The guide focuses on leadership, people management and improving organisational skills. Stewart Gee, Acas head of guidance, said: "Poorly trained front line managers are bad for business and productivity. People skills, setting team goals and planning work ahead are just some of the essential skills that managers of well-run companies need."

Businesses need reassurance on EU staff says BCCNew research by the British Chambers of Commerce reveals that 5% of businesses have lost EU staff following the EU referendum while one in ten say EU employees are talking about leaving.

The findings are based on a poll of more than 800 UK businesses that employ EU staff conducted by the British Chambers of Commerce (BCC). It reveals that more than two-fifths of companies say their EU employees have expressed concern over their future residency status following the vote to leave the European Union.

The BCC is calling on the Government to provide certainty on the residence rights of existing EU employees. It says the potential skills lost from existing EU workers leaving the UK would hamper businesses at a time when many are reporting recruitment difficulties. Businesses also need clarity on hiring from the 27 other EU countries during the transition period.

The Government, it says, must also "create a future immigration policy that allows businesses to plug their skills shortages with employees from the EU, with minimal bureaucracy, cost or barriers".

The key findings from the survey are:

  • 41% of companies that employ EU workers say these staff have expressed uncertainty over their future residency status;
  • 5% of businesses that employ EU workers have seen EU employees resign since the referendum;
  • 10% of businesses have seen their EU employees state their intention to leave the UK;
  • 60% of businesses surveyed think residency guarantees for EU workers would have a positive impact on their business (28% said it would have no impact and 9% said they were unsure or it was not applicable).

Adam Marshall, BCC acting director general, said: "Since the referendum many firms have expressed concern over the future status of their existing EU workforce. These hardworking people are absolutely vital to the success of businesses, and must be retained - we cannot afford to lose talented and skilled workers. Theresa May should reassure them as soon as possible that they will have the right to remain in the UK, to provide much-needed certainty both for EU employees and UK employers."

Rachel Suff, employment adviser at the CIPD, said: "Until a clear decision is made by Government, many workers from the EU will be feeling in limbo, particularly those without UK residency status who could be worried about their future right to remain. Employers need to communicate clearly with employees, emphasising that there will be no immediate changes."

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Local shops are thriving says retail reportThe value of the convenience store sector has grown and local shops are thriving according to the 2016 Local Shop Report by the Association of Convenience Stores.

There are just over 50,000 convenience stories in mainland UK and the sector is worth £37.5 billion in 2016, up over £400m on 2015. This growth demonstrates the value that local shops provide to local communities according to the Association of Convenience Stores (ACS).

"Running a successful convenience store requires a lot of hard work and a strong connection to the local community to ensure that the store stays relevant," said James Lowman, ACS chief executive.

Part of the reason for the success of convenience stores is their ability to adapt, according to the report. More than one in four stores (28%) now provide parcel services, with 10% offering a click and collect service and some introducing services like dry cleaning and key cutting. Convenience store owners have invested over £600m over the past year on improvements.

"Retailers have done a fantastic job of diversifying their offering in store and providing a wide range of services, which contributes to the fact that consumers, local councillors and MPs all believe that Post Offices and convenience stores are the services that have the most positive impact on their local area," said Lowman.

The convenience store sector provides jobs for 390,000 people, but the number of staff employed in each store has fallen. "For the first time since we started this research in 2012, we have seen a decline in job numbers as well as more staff working part-time hours," said Lowman. "This is consistent with the feedback from other ACS surveys showing retailers cutting back on staff hours to cope with the big increases in wage costs, not least because of the National Living Wage."

Meanwhile, the report also reveals that convenience store owners are some of the hardest working entrepreneurs in the UK, with 24% of retailers working over 70 hours per week and 22% taking no holiday at all throughout the year.

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Small firms that don't export are missing outMost UK small businesses do not export their goods or services despite the fact that it could significantly boost their revenue, according to new research by the Royal Mail.

Released to coincide with Small Business Advice Week (5-11 September), the Royal Mail research found that 60% of the 300 small business owners polled were not yet selling overseas.

The key reasons for this included the cost and complexity of getting through customs (26%), lack of knowledge of the market (21%) and language barriers (21%).

However, many of the business owners polled are interested in expanding overseas, with 35% of small firms saying that Europe holds the most potential to generate new sales for their business while 28% say the USA has the greatest potential.

For 26% of small businesses, the cost of getting through customs is the main obstacle to exporting. However according to the Royal Mail, many international orders from outside the EU fall below the minimum threshold for which customs duties are chargeable, making those markets more accessible to small businesses.

Meanwhile, among the 40% of businesses who sell internationally, just over a quarter of their sales this Christmas (26%) are expected to come from international orders.

At present, 15% of small exporters are selling to customers outside the European Union; 10% of those selling within the EU would also like to expand further afield. However, only 25% of small businesses use international online marketplaces to grow their sales.

Jim Shaikh ceo of Yoomi, the first self-warming baby bottle said: "Expanding internationally was a no-brainer for us. The UK market for our product is very mature and we found that expanding abroad was the logical next step for us and the only way for us to achieve growth and survive."

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Most UK small businesses do not export their goods or services despite the fact that it could significantly boost their revenue, according to new research by the Royal Mail.

Why small firms should pay less corporation taxAfter UK firms paid a record amount of corporation tax last year, Funding Options is calling on the Government to reduce the tax burden on small businesses.

A record high £32.4 billion in corporation tax was paid by UK businesses last year, up 8% on the £30 billion paid the year before, according to analysis by Funding Options.

These figures exclude financial services businesses and North Sea oil and gas companies. Corporation tax revenue from North Sea oil companies fell from a peak of £10.2 billion in 2008/2009 to £2.5 billion last year. According to Funding Options, the extra tax taken from mainstream UK businesses has been plugging this gap.

Now it is calling on the Government to reduce the corporation tax rate for small businesses. Conrad Ford, ceo of Funding Options, said: "With the corporation tax take now at record levels, the Government can now afford to ease the tax burden on small business. Reintroducing a lower corporation tax rate for small businesses would be a major and deserved boost to UK SMEs."

This week, Jane Ellison, financial secretary at HM Treasury, told the HMRC annual conference that: "We don't want a tax policy that sees those who are struggling the most, hit the hardest. So I'll be working over the coming months to continue delivering on that agenda."

Conrad Ford said: "Small businesses in the UK benefitted from a lower rate of corporation tax for over 40 years until 2015. This was an effective way of helping small businesses to compete with larger rivals and would be so again. Small business are an engine of growth and new jobs - the Government should be doing all it can to foster a business culture that allows SMEs to thrive."

Another way to help SMEs would be to increase the Annual Investment Allowance in order to encourage small businesses to invest in new equipment, he said.

The Annual Investment Allowance gives businesses tax relief on capital investment; the relief is currently £200,000 per business per year, down from £500,000 in 2015. "Increasing the Annual Investment Allowance would mean that restaurants could invest in new kitchens, manufacturers could invest in new machinery, and design businesses could invest in new IT," said Ford.

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Top reasons for running your own business

A new poll by Company Formation Made Simple has found that quality of life is the main reason that entrepreneurs choose to work for themselves. Over a quarter of those polled (28%) said running their own business gave them a better lifestyle. However, 24% said it provided higher earnings than they could make in a regular job and a further 19% said they were reluctant to work for someone else.

Why your staff might be leaving

On a similar note, a new study by Bright HR has found that pay is one of the least important factors when employees decide to look around for a new job. Instead, it's all about quality of life: 39% are lured by an easier role; 38% want to improve their work-life balance; and 34% are seeking a better work culture. Pay is the key factor for just 21% of workers.

Women ask but don't get when it comes to pay

Also on pay, new research from the Cass Business School, the University of Warwick and the University of Wisconsin has revealed that women ask for wage rises just as often as men, but men are 25% more likely to be successful. The research was testing the idea that women are not as pushy as men. But the survey of 4,600 randomly-chosen workers at more than 800 employers provides clear evidence of discrimination. Co-author Dr Amanda Goodall at Cass Business School said: "Ours is the first proper test of the reticent-female theory, and the evidence doesn't stand up."

Contactless payments continue to rise

Contactless cards have overtaken cheques as a payment method for the first time according to Mintel. Its findings show that cheques were used by 31% of Britons in the three months to April while contactless debit cards were used by 39% and contactless credit cards by 34%. Cash remains the most common payment method but Rich Shepherd, financial services analyst at Mintel, said the research shows that contactless cards have become much more widely accepted. "They've moved beyond coffee shops and sandwich bars and are now entirely commonplace."

Start Up Loans hit £250 million milestoneThe Government's Start Up Loans scheme has helped thousands of new businesses get up and running since it was launched in 2012, creating more than 45,000 new jobs and providing £250 million in funding.

Announcing the figures, business and energy secretary Greg Clark said Start Up Loans have generated a return on investment to the economy of £3 for every £1 spent.

Funded by the Government through the British Business Bank, the scheme has helped thousands of budding entrepreneurs, including many young people. Half of all Start Up Loans for people aged 18-24 go to those formerly not in employment, education or training.

Greg Clark said: "Everyone should have the chance to turn a great business idea into a reality. This Government will build on the success of Start Up Loans to give entrepreneurs the support and opportunities they need to start a business, grow it in Britain and turn it into a global success story."

Small business minister Margot James said: "With one in five Start Up Loans going to deprived areas in the UK, they are one of the many tools we have to build an economy that works for all."

There are now 5.4 million small and medium-sized enterprises (SMEs) in the UK, creating more than 15 million jobs and contributing £1.8 trillion to the economy.

Emma Jones, founder of Enterprise Nation, said: "Start Up Loans have plugged an essential gap for new businesses looking for funds. We've heard from hundreds of start-ups who not only benefit from the money, but also the mentoring that comes with it. The UK continues to witness record start-up rates and the Start Up Loans Company has been a key enabler of this - helping people across the UK to take an idea and give self-employment a go."

The Start Up Loans Company offers fixed rate loans of up to £25,000 and provides access to free business support for people starting out for the first time in business.

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