Adventures In Micro-Business: How to build prototypes and hire staff

Each month Professor Russell Smith answers your queries

Q. I would like to employ some casual workers on a short-term basis during the run-up to Christmas. How can I find out whether migrant workers have the necessary permission to work in the UK?

A. There is a useful website (www.employingmigrant workers.org.uk) backed by both the Home Office and the Federation of Small Businesses that should provide the information you need. Follow the website's step-by-step guide to legal compliance if you plan to employ people from outside the UK. Importantly, the website states: "Once you have completed your checks using the compliance tool, you can then use this as a statutory defence against prosecution in the event that you have unknowingly employed someone illegally." Always keep copies of documentation. Further information is available at the Home Office Border and Immigration Agency website (www.bia.homeoffice.gov.uk).

Q. I have built a database of information about my customers - where can I find out about Data Protection implications?

A. Go to the Information Commissioner's Office website (www.ico.gov.uk) and download the Getting it right, a brief guide to data protection for small businesses booklet. The Business Link website (www.businesslink.gov.uk) has a useful tool for determining whether you need to notify the Information Commissioner about the data your business holds.

Q. Can you recommend a good high-street business bank please?

A. The short answer is no! Most high-street banks offer a similar service and so a "good bank" is often one where you enjoy a good personal relationship with the manager. Speak with at least five banks and start with the one that you use for your personal account. You can compare the basic business facilities offered by the main banks at www.moneysupermarket.com. Building a good relationship with your bank will require effort on your part such as providing a quarterly update on business progress. Banks like to be kept informed - it's surprises that they don't like.

Q. I have just started my own service-based business and would like advice about accountants' fees. Is a budget of £600 per annum sensible?

A. You should double your estimate to at least £1,200 per annum - after all, that only equates to £100 per month. In your first year, it is a good idea to review financial performance with your accountant every three months in addition to asking them to prepare the usual returns. As you are new to business, ask your accountant to operate monthly "payroll" for you and to prepare VAT returns if your turnover is above the VAT threshold (£64,000). A good accountant will probably save you more in tax than you pay in fees.

Q. I have applied for a patent regarding an invention and would now like to find someone capable of making a prototype. Are there specialists who make prototypes of inventions?

A. The Manufacturing Advisory Service (MAS) should be able to help - call them on 0845 658 9600 or visit their website www.mas.dti.gov.uk). Inventors often get prototypes made prior to seeking finance for commercial development. If you are seeking development finance it will be worth having a professional prototype made and you may require help from a product designer. Take a look at the British Design Innovation website (www.designdirectory.org) to find further sources of help.

Send your questions to Professor Smith at independent@businessboffins.com. Selected questions will be answered each month. Answers are for the general guidance of owner-managers only; always seek professional advice. Professor Smith is the founder of Oxford-based Business Boffins Ltd which, in collaboration with Oxford Brookes University Business School, delivers support programmes to small businesses nationwide. Independent and Independent on Sunday readers can enrol on the university-accredited programme at a discounted rate; see www.businessboffins.com/independent