Adventures In Micro-Business: Losses, loans and little ones

Russell Smith answers your queries
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The Independent Online

Q. My bank is being difficult. Why should I bother going through the hassle of getting a business loan for £5,000 when I could get more as an advance on my credit card from the same bank?

A. I understand your frustration and this lack of "joined-up-thinking" from banks does appears illogical. However, bear in mind that the business loan and credit card borrowing will be at different interest rates and that you'll probably be charged an additional fee for the advance. In addition, the process of going through the business loan application will put your plans under scrutiny. You may not like what the bank manager says but any feedback on your plans from an experienced person is constructive.

Q. My childcare costs are likely to be the reason that I can't get my business off the ground. Where can I go to get some help and advice?

A. Start with your local Business Link (see as they are often aware of cost-effective childcare schemes appropriate for the self-employed.

Q. I use a local accountant to do my books and I've been happy with his service, and fees, for the last three years. Recently, his service has deteriorated quite a bit - should I move to someone else?

A. Since you've been happy for the last three years I suggest a face-to-face meeting as the place to start. Set out your concerns in a logical manner and run through them. There may be good reasons for this problem. Perhaps the way you provide him with information has changed? However, unless you are convinced by his explanations, you should move your business.

Q. I'm finding myself increasingly out of the office and feel the need to appoint one of my four employees as my "number two" to cover in my absence. The problem is that I can't decide between three candidates. Are there any simple rules here that would help?

A. A tricky situation to tackle, but first it's worth turning this question on its head. Do you really need to be out of the office or would it be better for those outside activities be delegated to other employees? If you can't solve the problem through delegation of your external activities then I suggest you approach this just as if you were interviewing for a new position. Call all three of them to a meeting and explain what you intend to do - this means that you'll be seen to be fair and even-handed. Draw up a list of questions to ask each of the three candidates and interview them in turn. An objective comparison of their answers should help you to determine who would be best suited for the new role.

Q. My business is running at a small loss. I have some savings but they won't last forever. At what point do I pull the plug?

A. All businesses benefit from review meetings with accountants, but your need is immediate - make an appointment straight away. The "small loss" may be something than you can turn around by looking to cut costs and by increasing revenue. Often an external adviser can spot things that you will have missed - get their advice now.


Send your questions to Professor Russell Smith at

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 sustainability support programmes to small businesses nationwide. Independent on Sunday readers can enrol on the university-accredited programme at a discounted rate; see