Adventures In Micro-Business: How to raise finance and patent your ideas

Each month Professor Russell Smith answers your queries

Q. I've been in business for a year but understand that regulations will change on 6 April. Where can I find information about such changes?

A. Many government departments issue information about such changes twice a year: on 6 April and 1 October. These dates are called the Common Commencement Dates or "CCDs". A good place to see an overview is the Business Link website (www.businesslink.gov.uk) on their Regulations Update page. They also offer an e-mail alert free subscription service that keeps you up-to-date throughout the year.

Q. Do I really need a website for my new business?

A. There is no law that says your business must have one but I do think that a website is becoming just as important as a business card. Potential customers use websites as a way of "checking out" your business. For that reason, a poor website is probably worse than no website at all. If your budget is tight, consider approaching your local college of further education and speak with the head of computing or media studies. Developing a website for a "real" business could make a useful project for a student team. You can find contact details for FE colleges from the Hero website (www.hero.ac.uk). The website also provides information about student placements; employing a student on a short-term project could be another way of developing a website.

Q. I run a part-time business - do I really need a separate business account at the bank.

A. You must keep records of business transactions and a separate bank account makes that easy. Always keep business and personal finance separate.

Q. I need to raise finance for my business. Is there a simple rule that governs how to choose between equity and debt finance?

A. Basically, equity finance involves selling shares in your company to investors while debt finance involves borrowing money. Investors get their money back, hopefully with a profit, when they later sell those shares. Borrowed money has to be repaid by your business. In general terms, debt finance is appropriate if the business can quickly come into profit and be able to repay the loan. By contrast, equity finance is often used to fund the development of a business that takes longer to come into profit. However, the two forms of finance are not mutually exclusive and therefore many businesses access finance from both sources. I recommend that you discuss any financial needs with your accountant before making a decision.

Q. I have come up with an idea that I believe could be patented and form the basis of a great business. What should I do?

A. Firstly, don't tell anybody about your idea! You must keep ideas secret before filing a patent. The first step would be to consult a patent attorney. If you are unsure about who to visit in your local area, your solicitor should be able to recommend one. General information about patents can be found from the Patent Office website ( www.patent.gov.uk). I also suggest that you visit the excellent website of NESTA (the National Endowment for Science, Technology and the Arts) at www.nesta.org.uk. NESTA provides a wealth of information and support for inventors and also invests in innovative ideas.

Questions please

Send your questions to Russell 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.