WHERE LOCAL BUSINESS GROWS

Financial Planning Your New Business

Good financial planning is a vital requirement of starting a business and has complex aspects, particularly in the cash flow projections.

Tax, VAT, payment terms, debt collection, projections and credit ratings amongst others are all areas where expert opinion and assistance is most advisable.

However, there should be equal emphasis on the business owner really understanding the nuances of the financial plan themselves.  An expertly (externally) created plan is much less valuable than one where the business owner properly knows precisely what they need to do to deliver it.

You have probably seen the famous dragons den team dishing out the scorn and mocking any prospective entrepreneur seeking funding when they don’t actually ‘know’ their numbers!  But more than this, it is a legal issue too – as the business owner, any failing to properly conduct the business is your legal responsibility and so, ‘knowing’ your numbers is something essential to all businesses.

A professional advisor who can translate and explain the more technical side of financial planning is much more valuable than a mathematical and technical approach.  Ultimately, you need to take responsibility for your business and its financial performance.

Content kindly provided by www.yorkshirepowerhouse.com visit them for free business templates & much more.



Understanding cashflow
 

Every business needs to be effective in managing the money coming in and going out.

Making and invoicing sales is great but you need to keep the cash coming in as you will always need to have money in the business to pay the bills!

Effectively managing cash flow forms the life blood of any business and needs to be one of the key priority areas for anybody running a business.  Constant awareness of the value of your debtors against the liabilities owed to your creditors and the cash reserves you have in hand are vital if your business is to run successfully and function as a commercial viable enterprise.  You often see established businesses blame cash flow for their demise and setting this discipline as a priority is always a good habit for a new business to adopt to avoid a similar fate.  Not having enough cash within the business to satisfy your creditors on demand can be fatal.  Monitor it closely and manage it with diligence.

There are a number of good business practices you can utilise that will keep your business cash flow healthy and free from excessive burden.

  • Sales forecasting – use your knowledge of the market trends and demands to make sound assumptions about where and how much you will sell.  Having an accurate estimation of what income you will generate will be extremely beneficial in assessing the financial needs of the business.  You will need to factor in market trends which should show variations where you may sell more or less and the impact that can have on your cash flow.  This may require you to have significantly more finance available and having a clear vision of what is likely to happen will help avoid potentially serious consequences.
  • Credit control – dealing with customers is not just about marketing and selling to them.  You need to ensure you get paid for what you have supplied and when payments are due.  Providing credit is how most B2B businesses run, but agree your terms with your customers at the outset and stick to them.Make sure customers are checked for creditworthiness prior to trading with them and ensure your payment terms and conditions are clearly understood by them.  Make sure you are diligent about late payments and don’t be scared of penalising late payers with interest on amounts outstanding.  You aren’t a bank and the only cash flow that will suffer is yours.  It might be workable for you to offer discounts for early settlement of invoices but the main thing is that you issue them at the agreed time and ensure they are paid on the due date.
  • Controlling costs – removing costs or saving on the cost of running the business is always something that is worth reviewing on a continual basis.  The savings you achieve go straight to the bottom line as profit!  This can involve anything from your fixed or variable costs but obviously needs careful consideration to ensure it doesn’t adversely affect the business.  Things like savings on utilities or monitoring suppliers for the best value are good examples of areas you might look.<

Being diligent about the health of your business requires a clear understanding of cash flow and you need to be aware of any issues or problems well before they are significant enough to be fatal to your business and also allow you to take prompt action to mitigate against them.

You could also talk to specialist funders about a finance system called ‘factoring’ or ‘invoice discounting’ where they essentially lend money to you based on the invoices you have raised.  This can be an effective form of generating positive cash flow but remember that there will always be a fee to pay for this.

Content kindly provided by www.yorkshirepowerhouse.com visit them for free business templates & much more. 

 

Your personal survival budget
 

It is always important that you establish what you want from your business in regard to your personal financial reward.

As part of your initial planning for your business, you should establish what your Personal Survival Budget figure is.

Do you need to carry on with your employed work and run your start-up ‘part time’ or do you want to throw yourself into it full time and require an income from the off?  Either way, (or any variation on that theme), you need to ensure that you have carried out a full assessment of what the business needs to provide you with personally, (to achieve your minimum survival budget), and calculate this into the forecasts developed within the business plan.

You have to be confident that the business can generate this ‘Personal Survival Budget’ level of income to sustain you otherwise you will have to reconsider your options.  Clearly this is not being pessimistic but realistic – running a business can be hard work and you need to be prepared for the worst case scenario.

This thinking needs to include factors such as rent / mortgage, council tax, bills, food, car running costs, insurance, etc.  But also remember to factor in the costs of the business too – printing and marketing costs, premises, wages, overheads and so on.

Don’t ignore your Personal Survival Budget as you need to be confident that you can last the tough times.

Content kindly provided by www.yorkshirepowerhouse.com visit them for free business templates & much more. 

Start up costs
 

Keeping start up costs to a minimum is a natural instinct.  However, taking this approach can sometimes contradict activity that the business would ideally like to do in order to get the best possible start.

The main thing is that you spend money on what is essential for the business to function well from the outset but don’t waste funds on extravagant extras or perceived “must haves”.  Your business planning should assess the costs of every aspect of your start up.  In that way, you should end up with a ‘shopping list’ that has defined costs for essential expenditure without taking on excessive debt or ending up with a lack of funds for working capital to support successful progress.  A well considered budget needs to include all the initial start up expenditure and the operating costs for at least the first 12 months.

There are several ways to reduce costs both in the pre-start phase and when you begin trading and a good business plan will certainly help to identify areas where opportunities exist to maximise the savings.

  • Premises – one of the biggest start up expenses … do you really need them to begin with?  One option could be to start from home or use a virtual office or even office share with someone else?  This decision will obviously depend on the type of business but is certainly worth considering until the business has money to invest in taking on its own premises.
  • Machinery or equipment – assess options which don’t require full payment.  Look at leasing/rental, lease purchase, hire purchase or other asset based finance.  Although this will require a deposit (typically anything from 10 – 30%) any subsequent arrangement will allow you to spread the full costs over a manageable period of time and can have added value benefits such as tax advantages and access to free upgrades for example.Virtually anything can be obtained on this basis, from office furniture to high value capital items, but lending restrictions may apply and you would need to do your research to ensure your eligibility under the finance provider’s criteria.  Some will even consider second hand or used equipment and the opportunity to save even more money.
  • Professional fees – look to spread the costs.  Most accountants and legal firms now have funding packages which will allow you to spread the start-up costs cost over a period of time to avoid large “one off” bills.
  • Supplier support – you could ask for credit from suppliers (or even extended credit terms).  This can sometimes be difficult for a new business with no credit history (and often the opposite could be true and you have to pay before goods or services are supplied.  The thing is, if you don’t ask, you don’t get.With the right approach you may be able to gain some support from suppliers, particularly if they feel there is the potential for a long term relationship – your success will benefit them as well.

You need to carry out a full assessment of your start-up costs. The following list isn’t exhaustive but can include –

 

  • Equipment/machinery – not just the purchase but it can also include delivery (particularly relevant to large items), site preparation and installation / commissioning.
  • Premises – start-up costs include things like deposits (leasing or buying), refurbishment, decoration, utilities installation, security equipment, adjustments for Health and Safety compliance and fixtures and fittings are typical examples.
  • Insurance – professional indemnity, product, buildings and contents, goods in transit and employers cover could be relevant to your particular enterprise.
  • Vehicles – any insurance associated with running a commercial vehicle as well as the initial purchase or start-up costs for a lease.
  • Professional fees – accountants, solicitors, business coaches or mentors and specialist consultants all carry costs and will invariably be required as part of your start up.
  • Start up stock or raw materials (real or virtual) – anything you require that goes into your product or service.
  • Marketing – anything associated with promoting and selling your products and services will need including. Marketing collateral such as websites, brochures, leaflets, signage and advertising are the obvious ones but also things like business cards and anything you might use at exhibitions or events are other examples. Your website and branding will likely be two significant costs within your marketing budget and an essential part of how you will promote your business (and make your first sale of course).
  • Staff – if relevant, anything associated with employing people and it can also include things like corporate clothing or training costs as well as the set up of compliance elements such as employee contracts, handbooks and terms – another recent development is the requirement to provide a work place pension under the Auto Enrolment legislation which will again carry a start-up cost.

These are the main areas of consideration for start-up costs but there could be others which need looking at in relation to your particular area of business.  Consider things like licences (or anything regulatory) or trade association membership costs which may be beneficial to your venture gaining more business.

A big part of this exercise is to work out your fixed costs (overheads) for the business over the first year on a month by month basis.  This needs to include anything you will have to pay even if you don’t make a sale such as rent/mortgage, rates, IT and communication bills and utilities charges for example.

In addition, you need to factor in your wages or drawings to ensure the business will provide you with what you require and, if relevant, include everything associated with employing people.
Having worked out your start up and first year costs, you will need to do a critical analysis of these against your sales forecasts to ensure the venture has viability.  If there are any aspects of the business proposition which cause concern, you may have to review your plan to either reduce costs or look at a areas where you can increase sales.

Becoming established after taking your start-up costs into account can take some time for any new enterprise and although some turn a profit in the first year many will only break even or possibly show a loss.  This isn’t unusual and providing you can see an upward curve into profit as you progress beyond the critical first year, and demonstrate it to any funders, that is an acceptable and recognised scenario for start up businesses.

The key thing is that you are realistic and honest about the path your business will take.  If you accurately assess and estimate what funds will be required for the start up and sustainability of the business over the first year you increase your chances of survival.  It is worth noting that whatever figure you arrive at, its wise to build in a small contingency for anything that might come along unexpectedly.

Content kindly provided by www.yorkshirepowerhouse.com visit them for free business templates & much more. 

Sources of finance
 

You need to work out how you are going to finance your business and raise the funds to make a start.

Unless you have plenty of spare cash (in the experience of Yorkshire Powerhouse this is highly unlikely!) the odds are you will be looking to use a combination of personal investment from savings, family or friends and then seeking other investment – normally approaching funding providers and sources of finance that are commercially motivated.  It’s well recognised that many institutional funders can be difficult to access when you are setting up, but a well defined business plan will give you the very best chance to persuade any potential funders to lend to you.

Raising finance from personal sources can come in numerous forms but most commonly from savings.  Other assets that are regularly used could be things such as equity release, selling shares or money paid as part of a redundancy package.

Family funding (and friends) is also common but there are some golden rules around how you do this to ensure everybody fully understands the basis on which the money is provided.  Family (particularly parents) have a vested interest in seeing you do well and can be willing participants in supporting your venture.

You have a responsibility to make sure that they are not investing money that could put them in difficult position, both now or in the future, should anything go wrong.  Not to do so would be reckless and could seriously damage your personal relationships in the future should the worst come to the worst.  There should always be a written agreement, signed up to by all parties, which clearly states on what basis the money is provided.  This could be a loan – interest free or confirming what rate of interest is to be charged and over what time period, shares or equity in the business and what percentage of ownership.  If you’re really lucky, it may be gifted!
One of the key aspects to remember is that it is almost certain that commercial lenders or sources of finance such as a bank or private investor will want to see a personal financial commitment from you to give them the confidence and willingness to invest and take on the risk.

External sources of finance for a start up business can come in many forms and it can often be the case that there is a combination of funders who see joint support as a way of mitigating risk.
As you would expect, start up businesses are classed as ‘high risk areas’ for funders and its no surprise that a robust business plan is vital to get “buy in” from organisations which are potential sources of finances. The main sources of finance are best looked at individually:

  • Banks – most peoples first port of call when they consider sources of finance for a business start up.  It is always worthwhile engaging with them asap and certainly before you have spent any of your personal investment in the business.  Most banks have start up business banking offers and they can provide loans, overdraft facilities and credit cards to allow you to access finance.  They will scrutinise your business plan in some detail and you have to be prepared to undergo a rigorous process to achieve a successful outcome.  Additionally, it is not unusual to be asked to provide personal guarantees (PG’s) if you are borrowing money and these debts will then be secured against your personal assets.
    Thinking of writing a business plan?
  • Other funders – there are many business support organisations who can offer a wide range of loans outside banks.  Enterprise agencies, local authorities, government backed schemes and Chambers of Commerce are all examples of organisations who can be considered as sources of finance and many are specifically to support start up businesses.  They can often be what is called “lenders of last resort” and this often means you will pay slightly more interest … but as they are tailored to operating in a higher risk area of business finance, they can be much more “user friendly” to work with.  Their due diligence will still require you to provide a well constructed business plan that shows the viability of your venture.
  • Specialist funders – this relates mainly to areas around specialist asset finance providers (banks can also provide this).  This is where you purchase machinery or equipment for the business and pay for it over a period of time before you own the asset outright.  You will obviously have to pay interest but it allows the business to buy expensive items without the high cost of outright purchase.  The funding is secured against the asset being purchased.  This can also include leasing where you don’t ever own the asset but pay to utilise it over a fixed period (vehicles being a common one) for a monthly or annual payment.  Although it’s not always easy for a new business to access this kind of funding, it can be very beneficial and often includes tax advantages.  It is certainly worth the effort to research and speak to providers if it is relevant to what you are doing.
  • Remortgaging – when considering sources of finance, this option carries higher personal risk and is dependent on the agreement of your mortgage provider but this could be a viable alternative to more conventional areas of funding.  The cost can be more attractive and paying it back can be spread over a longer period of time.
  • Investors – they will look for a share and take equity in your business in return for the finance provided.  They can be organisations or individuals but their motives are somewhat different to other funders.  Equity based investment shouldn’t be something to be afraid of – it can often be the springboard to rapid success for the business.  You could potentially achieve something in a much shorter time ‘with an investor’ that may take you years without.  They will want a return on their money (and will normally have an exit strategy) but basically they are speculating on your success.  The business plan for an investor tends to need much greater detail and in-depth analysis of the venture.  Individual investors tend to be interested in areas or sectors of business they are familiar with.  The can often add value through greater involvement but they will want some representation in your business.  There are investors who specialise in start ups but the main thing is that you fully understand the implications of taking on an investor and be aware of what you give away and whether it helps you achieve what you want.
  • Credit cards – whilst it is never recommended that you run your business through personal finance and banking facilities, the availability of personal credit and the many attractive deals on credit cards can provide a viable source of funding for a start up.  It should only be considered as a relatively short term option (dependent on offers available and over the critical first 12 – 18 months of the new business) and without being reckless.  If there is an opportunity to purchase something that is needed for the business and that can be paid for over a period without interest, it is worth considering.  Always understand the terms and conditions that apply.
  • Crowd-funding – a relatively new kid on the block but it is an extremely viable option for start ups looking for sources of finance.  It is basically equity investment but spread over numerous investors (the crowd!) who tend to invest smaller amounts in businesses that attract them not purely for high financial returns (although they do hope for a return) but for more emotive reasons.  This is becoming increasingly popular and there are a number of online platforms available through which you can access crowd-funding and have your portfolio of investors managed for you.  It is imperative that you research these thoroughly to ensure legality and that their criteria fit within what you want for the business and any future implications.
  • Grants – less available these days (in our opinion about as common as hens teeth!) but very useful if you can find a fund within whose criteria you fit.  Grants are money which is provided from government sources that are designed to stimulate certain types of commercial activity and it doesn’t have to be paid back.  They are normally dependent on job creation, business growth or investment in new or environmental technology but they are all linked to things which promote successful businesses.  There will invariably be an application process and it can vary greatly in the depth and detail required.  It is also normal that any grant awarded is subject to other funding also being injected into the business with the specific ratios varying per grant.  The key thing is to ensure you fit the criteria for the grant you have identified – too many times people try to make the business fit the grant rather than the other way round and this can cost you a very precious commodity – time!
  • Suppliers – similar to specialist funders above. Many suppliers of anything from your office furniture and equipment to heavy machinery can offer you their own asset based finance.  Again, research to see what you can find.

With all the options of sources of finance available to you, make sure you FULLY understand your obligations, responsibilities and liabilities in regard to any funding you agree or sign up to.

Whilst we are very much talking about success with a new venture, there is still a degree of risk and you need to be aware of the implications should things not go to plan.  This is something all commercial sources of finance will consider when balancing risk.

Content kindly provided by www.yorkshirepowerhouse.com visit them for free business templates & much more. 

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5 results found 
ABL Business expands into North Yorkshire

Wednesday 21 June 2017

Yorkshire-based business support consultancy ABL Business Ltd are expanding their operations into North Yorkshire. The company, which offers commercial finance and marketing support to SMEs, has engaged Fraser Irvine as an Appointed Representative to cover the county. Based in Harrogate, Fraser will be operating across the area, offering a full mix of commercial finance services. He will assist SMEs in raising the funds they need to trade, grow or stabilise their business, using all the funding lines and capabilities of ABL Business. It marks the third recent growth for the Cleckheaton-based company, who recently set up a new office in Scotland with two representatives just over a year ago and expanded into the North East region in March this year. Fraser Irvine is an experienced Independent Commercial Finance Broker and joins the company with an extensive career in financing businesses under his belt. He has spent almost 30 years working with asset and cash flow funders, which gives him a deep understanding of the financial needs of an SME business. Fraser has worked with new start businesses, as well as more established companies, arranging funding facilities to suit individual needs. His interest in business finance has also enabled him to gain extensive experience in the Management Buy-out, Management Buy-in and transactional market as a whole. He said: “I have known ABL Business and its owners, Andy Redman and Alex Beardsley for many years and really like the independent and client-focussed approach they adopt, so I’m very excited that I’m now joining the team. “ABL Business has access to a vast range of funders, which means I will benefit from being able to offer clients financial solutions that are tailored to bespoke needs. I am keen to help clients from new starts to multi-million turnover businesses to grow and achieve their full potential.” ABL Business Ltd and their appointed representatives have access to over 70 funders, enabling them to find an appropriate solution, no matter what a client’s financial requirements may be. ABL Business Director Andy Redman said: “We’re delighted to welcome Fraser to the team. He has a wealth of experience, which he brings with him from the financial sector, and in business too. Fraser, with his connections and knowledge, will be a real asset to ABL Business and to companies across North Yorkshire. His appointment has enabled us to expand our reach into yet another area and help even more businesses find funding packages that suit their specific needs”.
Posted by ABL Business Ltd
Social Progress MD selected for Digital Women Debate Panel

Saturday 03 June 2017

During the Digital Marketing Roadshow - Wigan on Wednesday 7th June at DW Stadium five leading industry experts will be coming together to discuss diversity in Digital and how gender balance is being addressed. The day has a very exciting list of digital related seminars throughout the day including a Google Digital Garage session on 'Reach New Customers Online & Know your Business with Google Analytics.' The Digital Women Debate is being hosted by Naomi Timperley who runs Coo Digital & is a Tech North Advocate. Social Progress, owner and MD Janet Bebb is one of the five panelists discussing gender balance in the digital along with Debbie Edwards, F Disrupters, Wendy Bowers at Role, Melissa Conlon, Commercial Director at Magma and Aaron Crewe from novi.digital. Big Screen Social our highly visual Twitter Wall will also be featuring at the event displaying the photos, branding and messages of delegates, exhibitors and speakers via hashtag #DMRoadshow helping to spread the word about the full day event and reach an online audience. This free to attend event is part of a series of Digital Marketing Roadshows taking place across the North West of England organised by Launch Events. https://www.socialprogress.co.uk/social-progress-selected-for-digital-women-debate-panel/
Posted by Social Progress
The benefits of being a member of Kirklees Business Hub

Friday 26 May 2017

Earlier this year, we returned from the Objective Management Group (OMG) International Conference in Boston, having won two awards, best new partner or "rookie" of the year award and an outstanding performance award. We wrote an article about our achievement on Kirklees Business Hub and included information about how we support businesses with improving their sales. The news article was subsequently shared by the team at Kirklees Business Hub on LinkedIn and Twitter. As a result of the article being shared, we received two new enquiries. One of the new enquiries is a business based in Kirklees and the other prospect is based in South Wales. Our business is already experiencing the benefits of the hub and we would encourage people to share their news. More importantly, attend the excellent events that are organised. The one I attended on Wednesday at the 3M Innovation Centre was excellent. It is a great opportunity to learn and make contacts with like minded local businesses.
Posted by Momentum Sales Solutions Limited
Huddersfield Digital Marketing Trainer is only Facebook #SheMeansBusiness Accredited Trainer in the North of England

Wednesday 22 February 2017

Janet Bebb of Social Progress Ltd was recently invited to Facebook International, Ireland to be trained up on Facebook Fundamentals, Facebook Pages, Instagram and Advertising as part of the She Means Business initiative. Janet was flown out to Dublin, with seven other UK digital experts, to learn from the social media giant about their new initiative, She Means Business being delivered in partnership with Enterprise Nation. “Facebook offices were such an inspiring and fun place to be and we all learned a lot from both Facebook and each other” – Janet Bebb, Social Progress Ltd As well as being shown around the Dublin Facebook HQ, these digital experts were trained especially to deliver the She Means Business Programme across the UK, on behalf of Facebook and Enterprise Nation, at nationwide events throughout 2017. The programme is designed especially to encourage budding and existing businesswomen across the UK to develop their businesses and grow their digital skills in 2017. The aim is to provide digital skills training to more than 10,000 women. Not only does the programme involve various events to book onto, but they will also provide resources and support for the women who register onto the programme. “I wouldn’t have been able to set up Social Progress Ltd by myself without the support and advise I received from similar support programmes over 5 years ago. It’s awesome to be able to support more business women to achieve their business goals and realise their potential!” – Janet Bebb, Social Progress Ltd Janet was the only trainer selected from “up North” with the majority of the others being from the London area & Southern Counties. These eight individuals included social media consultants & digital marketers who will each deliver the She Means Business programme in their area, to cover the UK together. For more information and to book visit the Enterprise Nation website: www.enterprisenation.com/shemeansbusiness
Posted by Social Progress
Jumping For Business Imaging Joy!

Monday 06 February 2017

We all know that as a Business, you want to create the best impression you can - your business images are a proud statement about you and what your business offers. You need stock images for your Testimonials, 'Meet The Team' Portraits, Business Cards, Posters, Flyers, and other Website Content such as Logos and correctly sized images for your Social Media Pages, not to mention Google Maps and all of your other Business Listings too. Millions of people rely on Images like mine when they search for places, especially on Google - In the last week of January 2017 my image views were up by 4,836 on the previous week. My images have been viewed over 50,000 times in the past 6 months! As a local Photographer I support local enterprise and I consistently add new images to all of my social media pages as well as to my my web and blog and to businesses on Google Maps - all part of my Business Image Service for their Shops, Cafes etc. If local businesses choose to use my service they get an affordable package of great web and social media content, and at the same time, greater web exposure at no extra cost. If you want more information, and would like to see more examples of my work, please go to my Business Images page for more information. Harry Dwyer January 2017.
Posted by Harry Dwyer Photography
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Events Posted

6 results found 
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Facebook Advertising Workshop
Thursday 3 August 2017, 13:30 - 16:30
Bridge House, 2 Woodhead Road, Holmfirth, HD9 6PX
£65 - 6 places
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Facebook for Business Workshop
Thursday 3 August 2017, 09:30 - 12:30
Bridge House, 2 Woodhead Road, Holmfirth, HD9 6PX
£65 - 6 places
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Social Media Marketing and Branding
Wednesday 16 August 2017, 13:30 - 16:30
Bridge House, 2 Woodhead Road, Holmfirth, HD9 6PX
£65 - 6 places
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Content Creation and Blogging for Business
Wednesday 30 August 2017, 09:30 - 12:30
Creative Analysis Ltd And Social Progress Ltd, 2, Woodhead Road, Holmfirth, HD9 6PX
£65 - 6 places
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LinkedIn for Business Workshop
Wednesday 30 August 2017, 13:30 - 16:30
Bridge House, Woodhead Road, Holmfirth, HD9 6PX
£65 - 6 places
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Twitter for Business Workshop
Thursday 14 September 2017, 09:30 - 12:30
Bridge House, 2 Woodhead Road, Holmfirth, HD9 6PX
£65 - 6 places
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