Browsing articles in "Finance"

Maximise the sale value of your business

Mar 28, 2013   //   by paulgreen   //   Blog, Business Planning, Finance, Strategic Planning  //  No Comments

Axis PartnershipSelling a business is never simple. There are no guarantees. Today the economic climate is changing so rapidly that goods and services fly in and out of demand at such a rapid pace that it’s almost impossible to guess what is bankable what isn’t. But what you can do is be smart and optimise your profits. It’s mostly common sense, but these few pieces of advise are invaluable.

1. Sell your business at the right time. One of the most common motivations for business owners selling is that they become either too ill or too old to continue to operate the business as they would like to. Perhaps due to pride, many business owners do not wish to take a lower, lest strenuous role in their business and therefore decide to sell instead. Do not attempt to sell your business under these circumstance. If you are already feeling physically weak, you do not need the additional stress. Nor do you want potential buyers trying to monopolise on your desperation by offering you less than you business is actually worth. If you’re going to sell, sell whilst your healthy and fighting fit.

2. Think about what you are selling. Before you put your business on the market, you need to consider what its key assets are. What are you actually selling? Define not just the physical value of the business, but also its value in potential profits and other endeavours. Successful businesses will already have a steady client base. And so the new owners are in fact acquiring almost guaranteed profit in addition to the physical attributes of the business. You must take this into account whilst evaluating the overall value of your business.

3. Show your business at its best. Potential buyers do not want to walk into your business offices to find a dilapidated workspace with a dissatisfied boss or staff. They don’t want to find that your files are not up to date and they certainly don’t want to know that your business is failing. If you really want to maximise profits when selling your business, these are a must. Obviously, if a buyer can see a clean business in operation, with content staff helping to turn over products and services to a loyal host of satisfied customers, your business will sell itself.

4. Be realistic about the value of your business. Your business is never going to sell if you price it out of the market, but equally, determining its actual value is not a simple task. Unless you are remarkably confident about how much your business is worth, you will probably want to consider seeking professional help from business specialists such as Axis Partnership. Companies such as these will ensure that you get the maximum possible profit when selling your business. Of course, it is in their interests to do so.

Find out more about selling your business.

Researching Your Rivals: Top Tips

Jan 24, 2013   //   by paulgreen   //   Blog, Finance, Marketing  //  No Comments

Duedil - Researching Your Rivals: Top TipsIn today’s ultra-competitive business climate, keeping an eye on the competition is a common-sense part of any strategy. You could pay a specialist researcher to do the job, but there are many cost-effective measures you can take yourself to find out everything from how your competitors market themselves to taking a peek into their company accounts.

Before diving in, keep in mind that your competitors in the offline space are often not the same as your competitors online, so look beyond the most obvious opposition. Here are three tips to help you do your own competitive research:

1. Do regular online searches to keep track of the other businesses offering the same service or product as you in your area. This will also show you which of your competitors rank at the top of the search engine’s results page and lead you to their websites. The website is now the front door of any company, so keep an eye on your competitors’ homepages: what key phrases are they using, which help them bring in web traffic? Are there lessons you can learn in terms of design and ease of interface? There is nothing more off-putting for customers than a clunky website or one that doesn’t provide enough information.

2. Listen to what the customers are saying. If someone decides not to use your business, don’t be afraid to ask if they have found an alternative elsewhere. This could be invaluable knowledge for improving your business model. If your business is more active in the online field, it becomes especially important to keep up-to-date with conversations about your rivals on social networking sites such as Facebook and Twitter. Spotting a recurring complaint about a main competitor could allow you to take advantage by using the same media to highlight your own high performance in that area.

3. Get the financial inside line. Anyone running a small business knows that at the end of the day, it’s all about the balance sheet. Understanding those of your rivals, especially the ones that appear successful, must be a key aspect of your strategy; online services such as Duedil provide a free rundown on company accounts going back several years. You may find that a firm you see as a major success in your field came from a financial position not dissimilar to your own. One thing is sure: the more you know, the more confident you can feel in the decisions you are making.

UK SMEs let £2 billion of expenses slip through their fingers – What??

Apr 23, 2012   //   by paulgreen   //   Blog, Finance  //  No Comments
UK SMEs let £2 billion of expenses slip through their fingers

UK SMEs let £2 billion of expenses slip through their fingers

British SMEs will have failed to claim an estimated £2 billion in expenses for the 2011 / 2012 financial year, according to new research.

One of the biggest failures of small businesses is not claiming the full amount of VAT they’re entitled to. Sloppy management of expenses in this area alone means they’re failing to claim for a quarter of all potential VAT refunds, at a combined annual cost of nearly £1.2bn.

Poor standard of expense management

The standard of expense management by SMEs is so poor that:

- 40% aren’t confident their expense records are accurate enough to allow them to claim all the tax deductions;
- 40% don’t know the size of the monthly expenditure bill;
- one third don’t know how much their employees claim in expenses every month;
- for many small businesses, the time spent managing expenses (13 day per annum, on average) exceeds that spent generating new business or investing in new markets.

Even SMEs who retain an accountant to manage the process could still miss out on identifying patterns in expense claims which could help streamline processes or identify potential cost inefficiencies.

….read the full article.

Santander aiming to lure SMEs with £200m

Apr 16, 2012   //   by paulgreen   //   Blog, Finance  //  No Comments
Santander aiming to lure SMEs with £200m

Santander aiming to lure SMEs with £200m

Santander is looking to attract small to medium businesses with a package of measures designed to boost their growth.

The bank hosted an event in Newcastle yesterday to showcase its Breakthrough programme, which will make £200m available to high-growth businesses with a turnover of up to £10m.

On top of the money, Santander is also providing development opportunities such as international trade missions, visits to successful companies such as Google, and help in attracting and hiring talented graduates.

The Government has contributed £50m to this pool from its Regional Growth Fund.

“One of our major goals is to become the SME bank of choice”, said Santander CEO Ana Botin.

“The group we’re looking to help are the growth champions of Britain. This is where we could offer the most help and have the most impact.”

Read full article.

Seed Enterprise Investment Scheme (SEIS) launches today

Apr 6, 2012   //   by paulgreen   //   Blog, Finance  //  1 Comment
Seed Enterprise Investment Scheme Launches Today

Seed Enterprise Investment Scheme Launches Today

As confirmed in last month’s budget, the Seed Enterprise Investment Scheme (SEIS) launches today.

The Seed Enterprise Investment Scheme (SEIS) is designed to help small, early-stage companies to raise equity finance by offering a range of tax reliefs to individual investors who purchase new shares in those companies. It complements the existing Enterprise Investment Scheme (EIS) which will continue to offer tax reliefs to investors in higher-risk small companies. SEIS is intended to recognise the particular difficulties which very early stage companies face in attracting investment, by offering tax relief at a higher rate than that offered by the existing EIS.

So who is eligible?

The criteria for eligibility for the funding is as follows:

  • The business must be new, or 2 years old or less, with fewer than 25 employees. It must have less than £200,000 of gross assets and not quoted on a stock market.
  • Directors or executives cannot use the scheme to invest in their own companies.
  • You can raise up to £150,000 of funding through the SEIS, but mustn’t have already raised any money under EIS or venture capital trust (VCT) schemes. This is in total not per year.

Further information:

http://www.hmrc.gov.uk/seedeis/index.htm

http://www.companypartners.com/blog/2012/03/14/seis-start-up-investment/

http://www.companypartners.com/blog/2012/03/21/seis-seed-enterprise-investment-scheme/

10 Steps To Success in 2012 – Step 8: Cashflow

Jan 28, 2012   //   by paulgreen   //   Finance  //  No Comments
10 Steps To Success in 2012 - Step 8: Cashflow

10 Steps To Success in 2012 - Step 8: Cashflow

Cash is the biggest killer of businesses – large and small. Lack of cash within a business (or extensive borrowing and the inability to repay it) cuts off the lifeblood within an organisation and ultimately will lead to its failure. Knowing what cash is coming in and out of your business and when is essential. Invoice regularly – there is no need to wait for the end of the month and chase invoices before they are due

Doing this ensures there are no issues that would prevent payment, that you are on the payment run and to keep your bill in the mind of the debtor – sometimes it’s who shouts the loudest gets paid the soonest. 

Manage relationships with creditors and negotiate better payment terms that benefit your business. Have a cashflow projection that looks forwards not backwards, so you can manage bills that will become due in the future; like VAT for example. 

(Download a free cashflow template)

Download the full guide: 10 Steps To Success in 2012

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10 Steps To Success in 2012 – Step 7: Profit

Jan 27, 2012   //   by paulgreen   //   Finance  //  No Comments
10 Steps To Success in 2012 - Step 7: Profit

10 Steps To Success in 2012 - Step 7: Profit

No doubt you have heard the expression: “Turnover is vanity, profit is sanity“? There is no point, as a business owner, having a high turnover but only a few pounds profit – or worse still, a loss. Understand the break even point in your business and keep control of your costs; whether it is staff, raw materials, utilities, rates, etc. 

Have regular management accounts generated (at least monthly) by your finance person that provide you with the key financial measures that are important to your business (including a cashflow forecast). 

Knowing where you are in your business from a ‘bottom-line’ perspective enables you to make more informed decisions about the direction of your business. 

Download the full guide: 10 Steps To Success in 2012

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10 Steps To Success in 2012

 

Small firms will get £40bn boost over the next two years

Jan 4, 2012   //   by paulgreen   //   Finance  //  No Comments

Small firms will get £40bn boost over the next two years

Credit-starved companies face an agonising wait as the Treasury and Britain’s big banks wrangle over an adrenaline shot of as much as £40billion for the moribund economy.

They will have to keep their expansion plans on ice until well into the New Year as the government puts the finishing touches to its ‘credit-easing’ plan for small businesses.

George Osborne said he’d initially underwrite £20billion of loans to firms over the next two years in a bid to channel money to the bedrock of the stalling economy.

 

Read more: http://www.thisismoney.co.uk/money/news/article-2067838/Small-firms-40bn-boost-years.html#ixzz1gKcbWXCW

10 Top Tips To Better Manage Your Cashflow

Dec 7, 2011   //   by paulgreen   //   Finance  //  No Comments

10 Top Tips To Better Manage Your CashCash is king in any business – being on top of what money is coming in and what money is going out and when is essential.

As they say, “every little helps”, so here are 10 tips to help you manage your cash more effectively:

1.            Plan the cash flow year – If the business experiences peaks and troughs in demand, prepare for these and put in place measures to ensure the cash flow reflects the changes.

2.            Don’t bulk buy – hold as little stock as possible and turn it over quickly. Agree with suppliers a right of return of unsold stock.  Look at getting ‘stock on consignment’ (you do not pay before it is sold).  Can suppliers deliver to customers on the company’s behalf?  Careful planning should eliminate this potential drain on cash.

3.            Keep costs down – Review all cost items (including products and energy) and relate this to efficiency. Turning off one PC overnight can save over £50 a year.

4.            Run a credit check on customers and potential customers – look at the credit histories with a view to eliminating late or non-payment.  Try to instil in staff the thought that ‘a sale is only valid when the cash is in the bank’.  Before accepting an order ensure the customer/potential customer accepts the payment terms – in writing.  It is also essential to enforce payment terms and if a customer doesn’t pay, put them on a stop.

5.            Invoice promptly – issue them as soon as is practical. Soon after they are issued contact the customer by phone or email ensuring they have the invoice in their system and that they have no problems with the supply – record this. Get them used to paying on time.  Remember “a sale is only valid…”

6.            Ensure that systems advise you of late customer payments – keep an eye on debtors’ days (trade debtors’ ÷ sales for the previous 12 months) × 365).  An increase could indicate a credit control issue.

7.            Take precautions – consider taking out insurance to cover all trading with a large or doubtful customers or even against individual invoices.

8.            Negotiate or re-negotiate credit terms with suppliers – Ask for early settlement discounts (if cash is available) and try to split annual costs into monthly payments.  This will probably be easier than paying a large bill at the end of the year. Consider what would happen to the business if a supplier failed?  Too much reliance on any one supplier could leave the company extremely vulnerable.  Use credit checks and find alternate source(s).

9.            Review wages and salaries – In times where cash is tight, these (usually) monthly payments are strain on cashflow.

10.          Consider invoice finance – These facilities can bring in a value of up to 90 per cent issued invoices – but it has a cost. It can assist as the cashflow income then grows in line with sales, and bridges the gap between issuing an invoice and receiving payment.

 

Source: Barry Hill of www.ukba.co.uk

The UK needs alternative solutions for SME funding

Nov 27, 2011   //   by paulgreen   //   Finance  //  No Comments

Pound coinThe previous few years have been a rocky road for the UK’s banks. UK SMEs have felt the effects of the stumbles in the banking industry more than most, with bank lending to the SME sector becoming especially restrained in an economic environment that has heightened the need for working capital to support day to day business operations.

However, although generally failing to meet the credit needs of SMEs the big 4 UK banks (Lloyds Banking Group, Royal Bank of Scotland, Barclays and HSBC still manage to retain nearly 80% of all SME accounts.

Read full article.

For some innovative funding solutions, take a look at the following:

£500k interest free loan

Funding from 0.9-2%

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