Adventures in Micro-business
Professor Russell Smith answers your queries, and profiles a small business facing a big challenge
Tuesday 10 November 2009
Q. Because of customers paying slowly at the moment, I'm worried I might not be able to meet my VAT bill. What should I do?
A. Almost a year ago, HM Revenue and Customs set up a dedicated business payment support service – you should call them straight away on 0845 302 1435. You will need to quote your VAT number and tell them how much you owe and when you propose to pay (simply delayed or by instalments) if that will be after the due date. The support line is very efficient and most callers will get an answer on the spot. The same business help line can also be used if you are worried about meeting other tax or national insurance payments on time. Visit www.hmrc.gov.uk/pbr2008/ business-payment.htm for further information.
Q. Is it harder to get business finance in the current climate?
A. The short answer is probably "yes", but there are schemes available to help. The most important one is the Enterprise Finance Guarantee (EFG) scheme in which borrowing up to £1m over a period of up to 10 years is supported by a Government guarantee of 75 per cent. The borrower pays a 2 per cent premium to the Department for Business, Innovation and Skills (BIS) on the outstanding balance. Businesses with a turnover of less than £25m can apply, although some restrictions on business sector do apply. The EFG scheme is available from most, but not all, banks. Speak with your bank manager if you wish to seek finance through this scheme. Further information is available about this and other schemes at the BIS website ( www.bis.gov.uk ). Remember all loan applications will need to be accompanied by a sound business plan and a robust cash-flow forecast (business budget).
Q. I am thinking about starting a business, but am a bit worried about all of the rules and regulations. Where can I find out about what rules will apply to me.
A. The Business Link website ( www.businesslink.gov.uk) offers a regulation checklist via a simple questionnaire. However, anyone thinking of starting a business should discuss what financial regulations will apply through a consultation with an accountant. Many people new to business find calculations for PAYE can be complicated and time-consuming – ask your accountant if they offer a monthly PAYE service as this can be very cost-effective. Your accountant will also be able to help you with VAT calculations if your anticipated turnover will require you to charge VAT on sales (the current VAT turnover threshold is £68,000).
Q. Where can I get advice about developing an export side to my business?
A . You are not alone in wanting to develop export activity as many businesses are seeking to do that in order to maintain growth in these challenging times. The UK Trade and Investment website ( www.uktrade invest.gov.uk) has a wealth of information, and is a good place to start. You should investigate its "Passport to Export" programme, which is designed for those new to international trade. The programme is delivered by regional trade teams. Call the inquiry service on 020-7215 8000 to find out where the team nearest to you is based. The British Chambers of Commerce are also very active with help for exporters and run a number of support schemes. Visit their website ( www.britishchambers. org.uk/zones/export) for more information.
Matthew Eaves set up Chelmsford-based cleveratom in 2007
Sometimes, being in the right place at the right time really does matter, although few students can claim to be recruited on their graduation day. But for Matthew Eaves, 29, a chance meeting with IT expert Professor Stephen Heppell on that very day led to developing an online course in leadership for headteachers. Eaves then spent the next two years working with Heppell on a project for the RNLI aimed at engaging young people with the work of lifeboats. And following that, Eaves worked on diverse learning projects including the peace process in Northern Ireland, and even on the beaches of Thailand, following the 2004 tsunami, using film-making to develop community regeneration.
Having been diagnosed with dyslexia at the age of nine, Eaves found traditional teaching methods a challenge, but excelled at subjects that allowed flexible learning, creative thinking and problem solving. Perhaps it's not a surprise then that Eaves is passionate about the use of new and emerging technologies in the development of learning environments. As he says, "Technology can help kids to be creative and to excel."
In January 2007, Eaves, along with like-minded colleagues, founded cleveratom as "a specialist company which aims to nurture creativity through the use of new and emerging technologies". The new team approached Essex Regeneration Agency with its ideas, and the agency was so impressed that it provided free offices in the Essex Technology and Innovation Centre in Ongar. By May 2007, the team had moved into its own premises in Chelmsford. The young company tendered for its first project within weeks of starting the business and won a contract to evaluate the learning platforms of schools and colleges in the north of England.
That project led to both a book and a DVD about best practice – quality products that helped to kick the business off. From there the business has gone from strength to strength, and has built an impressive client list including the BBC, Macmillan Cancer Support, London Business School and the NHS. "We may be a small team, but we deliver big projects," says Eaves. "And the company is growing at a rate of 30 per cent per year."
No doubt, the result of talent combined with lots of hard work. Which makes it quite astonishing that Eaves has found time also to become a successful author. His book How To Survive A Long Haul Flight is now in its second edition.
Distance Selling Regulations (DSRs)
Customers purchasing from websites can be at a disadvantage when there's no opportunity to review the product or to discuss the service. DSRs define information that the seller must provide in this situation; for example, a full description of the product or service, price including delivery costs and details of how payments should be made. To learn more, call the Office of Fair Trading on 0800 389 3158 and request a copy of A Short Guide For Business On Distance Selling.
This is a form of internet advertising in which business customers only pay when users click on to their advert. As such, this can be a cost-effective use of marketing funds, especially when coupled with targeted marketing campaigns. While, in theory, it is possible to run up large advertising bills, in reality it is normal to define budget parameters in advance. Common parameters include cost-per-click, click-through rates (people going from the ad to your website) and daily budgets.
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