Adventures In Micro-Business: Wages, websites and a capital funding idea

Each month, Russell Smith answers your queries

Q. I'm looking to find new premises for my business but know little about leases. Where can I find advice?

A. General advice about leases can be found in two booklets produced recently by The Office of The Deputy Prime Minister: "Renewing and Ending Business Leases: A Guide for Tenants" and "Thinking of Taking on Business Premises? Renting Business Premises - a Short Guide". Both are available from ODPM Free Literature Unit (tel: 0870 1226 236) or as "downloads" from the website (www.odpm.gov.uk). Professional advice is also vital. You should always engage a solicitor to act for you when leasing premises.

Q. For the past three years I have been making jewellery during the week and selling that at weekend craft fairs. Since the arrival of a baby boy I'd like to cut down on my weekend travel. Friends have suggested that e-commerce is the answer. Do you agree?

A. Many small businesses have found that selling goods over the internet has allowed them to reach more customers. You'll need an appropriate website with an "online" catalogue and secure payment facilities. Take a look at Microsoft's "Trading on the Internet" feature for a review of what is involved (www.bcentral.co.uk). If funds don't permit the investment needed to develop an e-commerce website just yet, think about trading by auction with ebay. They have a section dedicated to jewellery (www.ebay.co.uk).

Q. I run a small business employing six people. Should I do the wage calculations myself or contract that out?

A. Doing monthly wage calculations and keeping up to date with changes in the rules that govern wage payments is very time-consuming. It's usually more efficient to contract this out.Most accounting firms offer a "payroll" service at very reasonable rates. Expect to pay some set-up costs and then around £6 per employee for monthly payroll. Extra charges will apply if you have "starters" or "leavers" in the month.

Q. I run my business from home but increasingly need access to some kind of business facility to meet suppliers. What should I expect to pay?

A. Before you pay anything, I suggest that you find a local hotel with easy parking and use their lobby as your meeting place. Private rooms for larger meetings will cost from £80 per half day upwards. Audio-visual equipment hire will be extra.

Q. Our business needs capital in order to grow. The bank manager has suggested that I approach a local "VCT" for investment. Could you explain what a "VCT" is please?

A. Wealthy individuals can either invest directly in companies like yours or get somebody else to manage that process for them. A Venture Capital Trust (VCT) takes money from a number of people and invests from that pool across a range of companies. Since VCTs are not allowed to invest in big business, they look to find smaller companies with big growth potential. Keen to promote this, the Chancellor offers tax breaks to the wealthy on both their initial investment into a VCT and on any later gains when shares are sold. Try to get a personal introduction to your local VCT. If your bank manager can't help, then ask your local Business Link adviser (www.businesslink.gov.uk).

QUESTIONS PLEASE

Send your questions to Prof Russell Smith at ios@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 sustainability support programmes to small businesses nationwide. Independent on Sunday readers can enrol on the university-accredited programme at a discounted rate; see www.businessboffins.com/ios