Intriguing news from Brussels brings hope that there will be some relief to the perennial problem of affordable business finance, which many companies face. Recently published Green Paper proposals for a European Capital Markets Union (CMU), if realised, would result in capital being more readily available to SMEs and reduce reliance on lending from banks.

Less reliance on banking finance

The resultant borrowing environment would closely resemble the current situation in the US, where only 20% of business capital is loaned through banks (compared with around 70% in Europe). Investment funds, private equity and a growth in venture capital would play a far larger part in helping businesses to grow than is currently the case.

Easier access and enhanced growth

Commentators suggest that providing alternatives vehicles to access finance would make it easier for smaller businesses to benefit and bring significant economic benefits across the EU. Hopefully, UK businesses will be able to benefit from the capital available on the European market, rather than relying solely on what’s on offer nationally.

Whilst there is some way to go before the CMU will be sufficiently developed to become operational, the recognition that alternative finance routes are needed in order for businesses to thrive is encouraging. Once comments have been received on the Green Paper, the EU intends to develop an Action Plan and CMU implementation timetable.

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Have a burning idea for your very own business that you’re sure would be a hit? Then this guide is here to help. Here are four key steps you can take to go from dreaming a dream to setting up a business.

1. Test your idea and test it hard
Just because a few of your friends like the sound of it does not mean that your idea has mass market appeal. Test running your products or services to a neutral crowd will give you a much better idea of what works and what doesn’t as the concept takes shape.

2. Learn your target market
You don’t need to be an economist but you do need to understand what market your idea fits into, who your competitors are likely to be and how much disposable income your target customer has.

3. Work out your costs
If your new business is selling a product, work out how much it costs to manufacture. If you are offering a service, tally up your running costs. Now for the big, scary question: will you be able to cover these and actually turn a profit?

4. Protect your idea
If you still think you’re on to a winner, get your idea protected. Either patenting the concept or having all parties involved in your new business sign a non-disclosure agreement is highly recommended. Once that is in place, you can begin manufacturing.

So there you go: in four quick steps, you went from thinking big thoughts to running your own business.

Bankruptcy is a word everybody knows. The concept of bankruptcy and its general meaning are widely understood – Joe Bloggs has no money – but very few people truly understand how it works. Here’s a brief guide covering the most important points to remember when it comes to bankruptcy:

– Creditors and debtors

A fundamental point to understand is the role of creditors and debtors. Creditors are individuals or companies that are owed money by another. The person who is responsible for repaying the debt is called the debtor.

– Who can be declared bankrupt?

In the UK, only individuals can be declared bankrupt by a court order. Companies may instead go into administration or liquidation.

– Who can apply for bankruptcy proceedings?

A court must issue an order declaring that an individual is bankrupt. Creditors, or the debtor themselves, may apply to the court for a bankruptcy order to be issued.

– Creditor application for bankruptcy

An important first step in the bankruptcy process is for a creditor to personally serve a “statutory demand” on the debtor. The statutory demand gives the creditor 21 days to pay their debt. A debtor has 18 days from the date the demand was served to apply to the court for this to be “set aside”.

If the demanded sum, which must be more than £750, is still unpaid and the demand was not set aside by the court, the creditor may petition the court for a bankruptcy order.

– What happens after a bankruptcy order is made?

The debtor will not be able to act as a company director, even a new start up business or receive credit. A trustee of bankruptcy is appointed to investigate the debtor’s finances and will apply to the court for the sale of any assets that the debtor has an interest in, such as their car or home.

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With a fresh year ahead of us, many entrepreneurs are itching to start a business in 2015, and it couldn’t be a better time to do so. The low rate of interest creates an excellent atmosphere for fledgling businesses. Not only are interest rates low at the moment, they are also likely to remain so for a while at least, and economists expect any increases to be gradual. This is great news for young businesses, who often need to borrow to get off the ground.

Energy prices have historically been a burden for fledgling businesses – but fuel is now cheaper than for several years. That’s just another reason why it’s a good time to start your business. It’s a huge relief for entrepreneurs not to be held back by high energy prices as they attempt to make a young enterprise pay.

Though the employment rate seems to be improving, wages still remain low relative to prices. Over the last few years, prices on items such as food and train tickets have gone up but wages haven’t. This means that whilst individuals may find it slightly easier to find work than over the last few years, it just isn’t as well-remunerated as it could be. Self-employment may not lead to instant high income, but low wage growth is another factor pushing talented individuals to think outside the box. If work doesn’t pay so well, why not strike out alone?

It looks like 2015 could be the best time to take the plunge and start a new business!

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Example of Nike - Just do it Logo design

Founders of start-up businesses often spend days and weeks coming up with a catchy company name, only to neglect the actual brand. The days of a brand being simply a logo or a trademark to identify a company are a thing of the past. Today, it’s vital that a company’s brand identity stands for something that people right across the business – from employees to customers – can identify and associate with.

While today’s consumers might not want intimate relationships with every company they come across, they do want relationships with companies they can trust and this is where branding becomes a powerful communication tool. As such, start-up companies should – ideally before launching – consider what their brand is going to stand for and should have brand guidelines in place to ensure consistency across platforms and a tone of voice that reflects the company’s personality. Great examples from well established brands are Nike and Innocent Drinks. Of course, they are powerful now but they too were once start-ups. The former’s ‘Just Do It’ mantra oozes determination, courage and success. The latter’s brand is playful and quirky and demonstrates its passion for producing healthy and tasty drinks.

So a strong brand is vital as the battle for customers grows. It’s important that start-ups spend time investing in researching, defining, and building their brand. It’s an essential piece of their marketing communications and one that can make the difference between success and failure.

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Choosing a Name for your Business

On December 5, 2014, in Basic Startup Tips, by admin

One of the most important things to consider when setting up a business is the name. Often your business name is the first thing a potential customer will see or hear of you, so it’s important to get it right!

Do some research in your field of business before choosing a name. Have a look at what other companies are called. If you’re going to be a locally based service it’s important not to choose a name too similar to other local companies – even if they’re not in the same line of business as you! If your business will be mostly based online, spend some time with a search engine to see which other company names there are in your field.

Back in the days where we all used a telephone directory to find a service, there were a lot of companies named Aardvark – not because the owners liked animals particularly, but because then they were sure to be the first entry in the business directory under their chosen trade! These days, we don’t really use directories any more, and everything is online – so you don’t need to choose a name beginning with A – but it does need to be something that will tell people exactly who you are, and what you do.

If you provide several different services, it might be hard to have your business name tell people exactly what you do. As much as your business name needs to be informative, it shouldn’t be too long either! Ideally, you want two to three words that will tell people what you do. Alliteration can be useful to help a name stick in people’s minds too.

Test out your idea on as many people as possible before making a decision – your friends can offer you an outsider’s point of view that can be priceless in this situation!

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Finance for Used Vans for Startup BusinessesIf you’re working for yourself as a self employed person, or are just in the process of setting up a business or already running a small business, chances are that you need a van to make deliveries or carry equipment to and from jobs. A good, reliable used van is probably one of the best investments any small firm or sole trader can make in his or her business. With a van you can get out there and make some money!

Vans come in all shapes and sizes, so there’s a lot of choice available, and even at national firm who offer various vans for sale say that Diesel engines tend to be more economical but modern petrol engines can be really fuel efficient as well. The advances in engine technology also means that even a used van with high mileage can be a good investment – so long as the price is right. Like cars, vans can clock up considerable mileage without any difficulty these days, provided they have been well looked after and regularly serviced over the years. There’s nothing to stop you asking to see the vehicle’s service record before you buy a used van – and reputable dealers will always be happy to oblige.

If buying a used van is important to the success of your business, even a bad car finance record doesn’t have to prevent you from being able to afford one. There are a number of specialist companies who offer finance at affordable rates, and over an agreed period that may be more manageable, especially if finances are tight. With a good used van at your disposal, you’ll be able to earn enough to meet your car finance commitment. A missed mortgage payment or something similar in the past, doesn’t have to mean you can’t get credit again in the future.

How Can Tax Affect my Business?

On November 19, 2014, in Financial Information, by admin

When you are setting up a business, whatever type or size of business it is, it will be subject to tax laws.

If you are self-employed, you are responsible for paying your own tax and National Insurance. At the end of each tax year you must fill in a self assessment form and submit it to HM Revenue & Customs online; you will then have until the following January to pay your tax bill. A good way to budget for this is to immediately move 20% of every paid invoice directly to a savings account. That should provide enough to pay your tax bill at the end of the year.

If your income is likely to be above the higher tax bracket (currently £41,865), you will need to pay a higher rate of tax and should therefore save twice as much of your income from each invoice. This is something to bear in mind when you’re setting up your company; it’s wise to put something in place to ensure you are holding back money to pay your tax bill.

If your company has a turnover of more than £81,000 in a year, you will need to register for VAT. This means you can charge VAT on your products or services, and can claim back from Revenue & Customs any VAT you have paid to other companies. It also means you must fill in VAT returns, usually quarterly. At this point you will either have to pay your liability, or will receive a refund.

Limited companies must also pay Corporation Tax on taxable income. This includes income from investments or selling assets at a profit. You don’t receive a bill for Corporation Tax; it is up to your company to calculate how much is due to be paid.

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Effective Business Management

On October 10, 2014, in Management, by admin

Effective Business ManagementWith so much advice out there about how to set up and run a successful business, it can be hard to know where to look for the best advice. The first step is always the big idea. Once you have your idea and you are convinced enough by it to put in the time and effort that starting a business requires, the next step is to research and plan.

What many people may forget about setting up their own business, however obvious it may seem, is that they will be required to manage it and they may not necessarily have the skills or experience to do so. These pitfalls can be avoided by remembering to include yourself in the planning process. Take the time to study and train yourself in the art of management, in the long run it will help your business to grow and promote success.

It is true that some people naturally make better managers than others, but all of the necessary skills, such as effective organisational skills and time management can be learned. It is not easy to manage staff, especially as businesses grow and the pool of human resources grows larger, so it is important to remember that they too can have needs and worries which it is important to be mindful of.

Building a client base, especially in the early stages of business development, is incredibly important and good management training will build the necessary confidence to sell your business idea to people and communicate with them clearly, so that they will feel comfortable about dealing with your company.

Success in Business – 26.2 Miles

On September 23, 2014, in Basic Startup Tips, by admin

Thousands of people start successful businesses every year, and they all begin with a simple idea and a little motivation. There is no secret to success – to turn that idea into something else, something big, takes tenacity, hard work, and the right skills to put into practice. Setting up a business is comparable to running a marathon; you have an end goal comprised of many steps, there are techniques that will help you along the way, and once you have achieved your goal, you look forward to the next one.

So what are the techniques required to turn that million pound idea into a tangible reality? One of the most valuable skills to have in the business world is the art of negotiation. Once you have a selection of prospective suppliers, build relationships to get a sense of their reliability, request estimates, and use those relationships to negotiate terms and prices. However, beware, as some business find out the hard way that it’s not always about the best price. If a supplier is more expensive, ask why. Do they have better lead times, a higher standard of service or delivery? Negotiation is not always about price.

In conjunction, an equally vital skill to possess when setting up a business is the proficiency to sell. An effective sales process starts by determining the consumers wants and needs, rather than just focusing on what you are attempting to sell them. When you focus on the consumer rather than the product, the consumer generally responds.

Ultimately, commitment and motivation are the vital ingredients to a successful business. That combined with a good business mind, the ability to develop new skills, and a little of whatever it is that drives you to grow that simple idea into a true reality.

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