Improve Your Cashflow Quickly
As a business owner, you have probably experienced the difficulties many entrepreneurs face in raising a suitable amount of finance when your business needs it. It can be a challenging process, which usually involves creating a long business plan each time you need finance and then trying to persuade a bank to give you the money.
If you add to this the difficulties of late paying debtors and managing your credit policy (who you give credit to) and credit control (how you recover credit you have given) then maintaining your finances and cashflow appears to be a near impossible task! However, help is available in the shape of factoring and invoice discounting.
Factoring allows you to receive up to 90% of the value of an invoice instantly, with the remainder paid after the debt is collected. The speed of factoring makes it particularly useful to small businesses; and it is fast growing in popularity as more business owners see the benefits it can bring.
As you are paid instantly; factoring provides an extremely quick form of finance that can help you to balance your cash flow or finance expansion, without the risk or hassle of a long term loan or other finance agreement.
Your credit control can benefit from the experience that factoring companies have in getting money from debtors, reducing the chances of late or missed payments. Their experience in credit vetting can also help you to improve your credit policy functions.
The cashflow benefits and credit experience also means that you can continue to provide your customers with reasonable credit periods, and can offer attractive credit terms (to trustworthy customers) to help make new sales with only a minimal effect on your cashflow.
Although factoring has been traditionally seen as something for large businesses; small businesses are increasingly becoming aware of the benefits of a form of finance that is both quick and cheap, but without the risk that other forms of finance can carry.
Click here for more information and free advice on how BizHelp24’s factoring services can benefit your business.
Common Christmas Party Questions Answered!
With the Christmas party season approaching, ACAS has answered some of the most common questions of the hundreds they are asked every year by businesses.
If you are planning a party for your employees, then it is much easier to prepare yourself for any problems in advance!
Q What if an employee who has clearly drunk too much at the office Christmas party is planning to drive home. It's not your responsibility is it?
A Wrong. As an employer you have a 'duty of care' for your employees. So as it's the company's party you need to take some responsibility. Think about travel arrangements and maybe end the party before public transport stops running. Or provide the phone numbers for local registered cab companies and encourage employees to use them.
Q How can you make sure people don't get too drunk and fail to turn up for work the day after the party?
A Make sure there are plenty of non-alcoholic drinks and enough food. Before the party, ensure that all staff are aware that disciplinary action could be taken if they fail to turn up for work and there is reason to believe it is due to too much booze.
Q What if an employee suffers verbal abuse about being gay at the local pub before the party - it's not on work premises so it's a matter for them isn't it?
A Wrong. Going to the pub before the office party counts as an extension of work and so all the laws covering discrimination still apply. Make sure the company has policies in place on bullying and harassment and discrimination and that everyone knows what they are.
Q What if you can't afford to pay a Christmas bonus this year although you have paid it for the last ten years. Employees will be disappointed but there's no problem with the law is there?
A Wrong. Even though the bonus is discretionary staff can argue that it has become contractual through custom and practice. Before deciding not to pay, tell staff why you feel unable to pay it and try to agree a solution. For example, you could offer to pay a proportion of the bonus or stagger payments in the next few months. Or you could offer to pay the drinks bill at the Christmas party!
Rita Donaghy, Acas Chair said: "If companies have policies and procedures in place which cover the key issues like discipline and grievance, bullying and harassment, discrimination and absence they are in a much better position to handle these sorts of issues which can happen at any time, not just at Christmas.
"Our helpline staff are very broad-minded and with many years’ experience of giving advice on employment relations the chances are they have heard it before. So if you do have any employment relations queries give them a call. I'm confident they will be able to help.
"But don't let potential hazards put you off organizing something for Christmas. Staff will feel valued if you treat them right. Think about asking them what they want to do and ask for suggestions on how to cater for any problems upfront."
Read our free article on Holding a Successful Office Party here.
Is Your Business Risking Age Discrimination Breach?
Almost 2.5 million small and medium sized businesses in the UK could be vulnerable to age discrimination claims if working practices regarding age are not reviewed or changed before October 2006.
The new legislation on age discrimination becomes law in October 2006, yet an AXA survey shows that 40% of small business leaders are not even aware of it; and 44% of those who are aware of it have not even started to consider its implications for their business.
As there are over 6million employees aged between 50 and retirement age, it is clear that no business employing or taking on staff should be unaware of this legislation.
Worryingly, more than half of SME managers questioned (56%) expressed concern about the negative effect of increased employers’ liability likely to be incurred with an older workforce, and nearly one in three (31%) are worried about having to fund longer pension plans.
While 89% of small business leaders believe investment in training and mentoring courses are important to overall success, nearly a quarter (23%) felt the cost and time they would need to invest in training older workers would have a negative effect on the profitability and productivity of their business.
Despite these concerns, 41% of respondents agreed that the potential of an older workforce is a positive thing for UK business, compared to only 15% of respondents who see it as negative.
Lou Macari, head of business consultancy and training at AXA, comments; “By 2006 there will be more 55-64 year olds than 16-24 year olds in the UK for the first time, and the Turner Report and impending age discrimination legislation are a timely reminder that all businesses need to adapt to support the new profile of the UK workforce.
For more information on the new legislation, visit our news article here.
Selling Your Business - Will You be Prepared?
Around a quarter of small to medium sized business entrepreneurs are planning to sell their business in the next three years; yet almost half of these people have no real idea what their business is worth.
Research by the Tenon Forum think tank shows that 47% of owners looking to sell do not have a clear idea of the value of their business, with many smaller owners overestimating the sale value. Only 48% of SMEs had an exit strategy in place, despite the clear benefits of having such a strategy.
Ian Beswick, Director of Corporate Finance at Tenon comments: "It’s not surprising to see how many entrepreneurs are thinking of selling up. Optimism in the retail, leisure, manufacturing and transport sectors is falling and this correlates with those businesses that tell us they’re thinking of getting out before things get worse. Ultimately this isn’t good news for the UK economy."
"What is of concern is how many small businesses don’t have an accurate picture of what their assets are worth. This seriously impedes proper planning. We’ve found that many very small business owners have an unrealistically optimistic view of the sale value of their company."
"Most owner-managers start to think about selling between five to 10 years of operation. But in reality the best time to sell depends on the value of the business at the time, as well as other lifestyle considerations. Equally, in order to maximize the value of your business, it’s essential that you have a clearly thought through exit strategy. This typically requires two to three years planning and execution. Bottom line, most businesses are just not approaching sale sensibly."
Web Retailers - Slow or Unfriendly Sites Will Lose You Customers
Record numbers of online shoppers are expected this holiday season, but website performance is now more important than ever. 95% of online buyers would abandon a website they were buying from if its performance was not up to scratch. 55% would not even give the site a second chance, and would turn straight to competitors.
The SciVisum Christmas eCommerce Survey also showed that the number one reason for abandoning a website was sluggish loading and searching, cited by 78%. Three quarters (76%) said they would not wait more than a minute for pages to respond before abandoning a site; and a third (35%) would wait no more than thirty seconds.
The biggest annoyance for customers was complicated website registration processes, which 74% found irritating. There are still a surprising number of sites which require you to fill in a lengthy log-in/account registration form before you can even consider buying!
These issues are vital at Christmas time, when there are many more online shoppers; and most people are trying to shop quickly, lacking much patience.
Another common annoyance is incompatibility with internet browsers such as Firefox, Opera and Safari. Many websites (including those of major international companies) are designed using code that does not display properly on these browsers; meaning that they cannot buy from you. A few small code adjustments could mean the difference between welcoming and turning away lots of your potential customers.
Although Firefox users only average 5-10% of internet users, you need to remember that these are usually the web savvy visitors; and are therefore much more likely to be buying online.
During the busy Christmas period, it is vital to ensure your site works properly. If you think your site is at risk of running slowly or failing then you need to see what action you can take to reduce the risk of customers going elsewhere.
Is Your Business Prepared For a Cold Winter?
The Met Office is warning that this winter will be colder than usual, and AXA is urging SMEs to take action to lower the risk of bad weather damaging their business.
Burst pipes and the breakdown of heating systems present the biggest problems to businesses during cold weather. Such events can cause water damage to property and key equipment leaving bills for repairs, replacement stock and lost business running into thousands of pounds.
“With many people distracted by the hectic routine of Christmas and some premises shutting down over the period, businesses need to plan early and ensure they have adequate contingency measures in place. A few simple precautions can save a lot of time, money and heart-ache in the long run,” explains Doug Barnett of AXA Insurance.
“For example, making sure the heating is left on at a low temperature in unoccupied premises will prevent pipes from freezing and bursting. Businesses which share their premises should take an active interest in the other areas of the building and discuss contingency plans with the landlord.”
Other tips for protecting premises, stock and equipment against cold weather include:
Identify the location of stop cocks/valves inside the premises as well as the main incoming valve in the street. Be sure to advise staff of their location.
Avoid storing computer and electronic equipment on the floor.
- Ensure stock and packaging materials are a minimum of 150mm off the floor in racking or on pallets.
- Ensure heating systems are given regular maintenance checks and frost stats are operational.
- Review and update emergency contact lists.
- Retain insurance company/intermediary details and ensure emergency contact staffs have copies.
- If the business is going to be closed for extended periods of time organize regular inspections during severe weather.
Businesses occupying shared premises should also discuss the following with their landlords:
- Find out whether there are water tanks in building roof space, where they are and whether associated pipe work lagged or trace heated.
- Discuss whether areas occupied by other tenants are protected against frost damage and burst pipes.
- Ascertain whether there is a central emergency contact register. If there is, ensure the business has a copy.
- If there are unoccupied areas in the building, find out who is in charge of inspecting them.
Protect Your Business From Corporate ID Theft
Identity fraud is seen as something that affects the general public, but it is increasingly affecting businesses. In a survey of its members, the Association of Chartered Certified Accountants (ACCA) found that 29% of its members (or their clients) have suffered some form of identity theft.
John Davies, Head of Business Law at ACCA said: "One of the biggest problems for companies is that fraudsters can submit forms to Companies House which enable them to change the names of company directors and the registered address of the company. Once this has been done, the 'new' directors can open new bank accounts, have goods delivered to the 'new' address and effectively ruin the credit rating of the business.
"Companies House is now taking the matter seriously and has launched an initiative - PROOF - which, as well as encouraging businesses to file on-line, should also help to deter the fraudsters."
The PROOF initiative is free of charge and when a company registers to file on-line it will receive a security code and an authentication code from Companies House, which undertakes only to accept specific statutory forms in electronic format. And as an added security measure, an email will be sent to the company’s registered email address when any of its details are changed.
John Davies adds: "Companies should remember that by registering with PROOF and filing documents on-line they can also save money. To deliver an annual return in hard copy costs £30, whereas by using this on-line facility they can save £15."
Measures to be introduced in the Government's new company law reform bill, including a new criminal offence of delivering misleading information to the Registrar, also have the potential to prove to be a valuable weapon against corporate fraudsters. This will help to ensure that if your identity is stolen, there is more you can do to recover the situation.
ACCA also suggests that there are other security measures businesses can easily adopt to protect themselves:
Companies should make regular checks to ensure that their details registered with Companies House are correct.
- Shred all corporate waste - and ensure that those employed to do so are vetted to ensure that they do not have a criminal background and can be trusted with what is a crucial part of any company's security procedure.
- If you move address, remember to inform all of the companies/customer that send information to you in the post and consider re-directing your post through Royal Mail.
- Destroy or keep safe all correspondence such as bank and credit card statements and utility bills.
As a business owner, you have probably experienced the difficulties many entrepreneurs face in raising a suitable amount of finance when your business needs it. It can be a challenging process, which usually involves creating a long business plan each time you need finance and then trying to persuade a bank to give you the money.
