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Contents
Disclaimer
This information is intended to give an overview and
introduction to the subject. Any legal information is
provided for guidance only and should not be
regarded as an authoritative statement of law.
Barnsley College cannot be held responsible for
any actions taken as a result of this guide.
Our offer
Your Idea
Business Planning
Finance
Legislation
Social Enterprise
Marketing Plan
Contacts
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9-13
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16-19
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Barnsley College has an array of support to help you start your business.The Enterprise Department is here to help you realise your dreams
and turn your ideas into reality.
Whether you have products ready to sell or have a brilliant idea for
a business you want to explore, come and have a chat with us.
The support on offer includes:
Workshops on starting a business, finance and legislation
1 to 1 support with a Business Adviser
Access to Industry Specialists
Opportunity to test trade your product or service
Financial Support
Our Offer
/ezonebarnsley
@ezonebarnsley
www.barnsley.ac.uk/Enterprise
01226 216 840
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Before you launch into setting up your business you should consider:
How strong is your idea?
Who else is doing it?
Is it a niche market?
Are you able to offer a quality product/service?
If it hasnt already been done and nobody is doing it, why?
Is it something you enjoy doing?
If you are going to be doing it 24/7 will you remain positive about it?
What do you want to do?
What can you make?
What will people buy?
What services can you offer?
Not everyone has to have the next big thing. Its a case of looking
at your skills and working out how you can use them.
Your business will centre on an idea, a product or service
which you believe has commercial value.
Your Idea
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A business has to be involving, it has tobe fun, and it has to exercise
your creative instincts.-Richard Branson
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All good businesses take time to sit
down and look at where they are
heading, what their future looks like
and to ensure that they remain
relevant to the industry they are
operating in and continue to provide
a service that is what their customers
are looking for.
With the current economic climate as
it is, it is more important than ever that
those looking to start a business and
those with established enterprises
take time to plan in order to move the
venture forward.
Business Planning
There are a number of other reasons why a business
would look to write a business plan, these can include:
Raising finance for the business
Securing investment from a third party
In order to tender for a piece of work
Whatever the reason is for the plan being produced you should always
consider firstly who is going to read it and tailor it to their individual needs.
For example if you are applying to the bank for a loan they will want to see
financial figures throughout the plan and will want these to be based on
research and accurate forecasts.
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Executive SummaryThe executive summary should be the last part of the business plan which is
written but becomes the first page in the business plan which is read. This is
because it should summarise the business plan on one page in a concise
manner enticing the reader to want to know more.
It should set out an agenda for the business plan and touch lightly on all
aspects including setting out the proposition to the reader of what you are
asking them for, be it finance or investment. As it is a summary of the plan itmakes sense that until you have completed writing the business plan you
wouldnt know what to include in the summary. You should also consider
here the markets or industries that your product is aimed at, for example,
young people, women or individuals with disabilities.
Description of the Business
The description of the business is probably the best place to start when
writing a business plan. This is your opportunity to explain what it is that you
as a business are going to offer. You can also use this space to explain why
you are different to other people offering a similar service. This is called your
Unique Selling Point (USP). This could include any number of factors which
differentiate you from your competitors including:
A better quality service or product
A fast service
Lower prices
A new innovative product or service
Business Plan Contents
Innovation distinguishes betweena leader and a follower.
-Steve Jobs
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Market Analysis
Once you have explained what your business is going to offer, and to which
markets, you should then look at the market you are entering.
Who are the key people in the industry?
Who will your main competitors be?
You should look at how you differ to them and list their strengths andweaknesses. Local competitors will only form a small part of your industry.
What is the rest of the industry doing, nationally and globally?
This is your opportunity to explain how you are going to overcome issues
that are facing the industry as a whole and show that you understand how
your industry is represented in the local area.
Service or Product
Now that we have looked at the industry you are entering, and what the
business will look like, it is your opportunity to discuss the products and
services that you are going to offer.
If it is a singular offer, for example you are manufacturing one product or
a range of similar products then you should consider talking about the
suppliers who are going to provide you with the materials to manufacture
your product to show that you have researched the supply chain.
Retail businesses should discuss the range of products that they are
going to sell and group them by type but providing enough detail so
that the reader can envisage the products.
Business Plan Contents
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Marketing and Sales
Before you can talk about how you are going to advertise your product or
service, you need to show that you understand who it is you are aiming
your product at. Not everyone will want to buy from you for one reason
or another and so you need to show that you have thought about who is
most likely to want the product or service.
One way of doing this is to create a profile of your ideal customer or the
person you believe your product is best aimed at. This can include gender
and age, but can also look at their social circumstances for example
whether they are married, have a professional career or are parents.
You do not just have to have one profile for your product as there may
be a variety of different groups who would want to buy from you
for different reasons.
For each profile you create you can then
do a number of things with the information:
1. Start to understand the profiled group by looking at the following areas:
a. What do they base their decision to buy on? Eg. time, price or quality
b. How do they buy products? Eg. Online or through retail outlets
c. Where do they look for a service? Eg. Yellow Pages
2. You can decide how it would be best to advertise your product or
service so that the message of the advertising best reaches your targeted
customers. For example if your product or service is targeted towardsfemales - would there be any point in putting up a poster in a barbers shop?
Business Plan Contents
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Marketing continued
Now that you have customers interested in your offering, how will you make
sure the sale takes place? If you will be selling face to face, customer service
becomes a high priority to get right so that people remember you and want
to come back to you for custom. Knowledge of your product or service,
politeness and not being too pushy go a long way to instilling confidence
in your customer that you are the right person for them to buy from.
If you are selling through a website, you have to be clever about how
you complete the transaction to instill the same level of confidence.
Good communication, an easy purchasing process and polite text can go a
long way to convince a person to buy. One thing to bear in mind is that by
not being present at the time of the transaction, how can you answer any
questions that the customer might have?
This is why retailers add Frequently Asked Questions to their websites.
Business Plan Contents
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Money is the life blood of a business, if you arent making money, this can
put the business in jeopardy.
Knowing your business finances from how much stock you are holding, how
much products and services cost to knowing the profit margin on each item
is imperative to ensure that the business is run properly.
If the purpose of your business plan is to raise finance to start your
business there are several key pieces of information that any lender will
look for:
Survival Budget How much it costs you as an individual to live a basic
lifestyle including rent / mortgage, utilities, food etc.
Start-up Costs How much money do you need to raise in order to start thebusiness? Including equipment / space / product and the amount of funding
you already have in place whether from personal savings, family or from
lenders.
Price and Cost The price it will cost to buy / create the product / deliver the
service and how much you will then charge the customer.
Cash flow Forecast A 12 month (can be 24) forecast looking at the runningcosts of the business against your predictions for sales on a month by
month basis.
Profit and Loss Forecast Similarly to the cash flow forecast it should look
at 12 months but whereas the cash flow forecast deals with money in and
money out, the profit and loss looks at the value of the business taking into
account for example value of stock held and assets within the business.
Finance
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Business typesBefore you start trading you need to make a decision as to what legal form
your business is going to take. This decision will affect who monitors your
business, what tax you will pay, what level of control you have over the
business and your personal liability regarding the venture.
There are three main forms in the United Kingdom which are:
Sole Trader This is a business owned by one person who has
registered with Her Majestys Revenue and Custom (HMRC) to undertake a
self-assessment. The business has no dealings with Companies House, and
all profits made belong to the self-employed owner. Tax at the normal
income tax rate is paid on profits made by the business, but all debt held
against the business also sits against you as an individual. Please see here
for further details: https://www.gov.uk/set-up-sole-trader
Partnership If you are starting the business with someone else, you may
want to consider setting up a partnership. In effect a partnership is where
two or more sole traders are working together under a formal partnership
agreement. Individuals are still liable for their share of profits and debts
within the partnership and pay tax as per a sole trader above. Please see
here for further details:https://www.gov.uk/set-up-business-partnership
Legislation
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Business types continued
Private Limited Company A Limited Company is a formal separate entity
from your personal finances. This means that the debts the business holds
stay with the business and do not encroach on your personal finances.
In effect as director of the business you are an employee but can retain
the rights to govern the business.
The business will be registered with Companies House and subject to their
standards and practices. As an employee of the business you will pay
income tax on your wages; however there are other tax efficient ways of
removing monies from the business.
The company will also be subject to corporation tax.
Please see here for further details: https://www.gov.uk/limited-company-
formation & http://www.companieshouse.gov.uk/
There are various other forms of business which can be set up including:
Private Limited Company by Guarantee
Private Unlimited Company
Public Limited Company
For Information on the above go to:
https://www.gov.uk/business-legal-structures/limited-company
Limited Liability Partnership
Limited Partnership
For information on the above partnership style forms go to:
https://www.gov.uk/business-legal-structures/limited-
partnership-and-limited-liability-partnership
Unincorporated Association
For information on an unincorporated association go to:
https://www.gov.uk/business-legal-structures/unincorporated-association
Legislation
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FinancialAlongside managing your day to day cash flow and finance as a trading
business in the United Kingdom you are duty bound to pay certain taxes
based upon the finances of the business.
You will need to pay and declare tax on your income and profits however
this will depend on the type of business you start up, if you have any staff
and depending on your revenue whether you need to register for VAT.
Income Tax Taxable income from employment and self-employment.
With self-employment the amount paid is based upon your self-assessment
of how much profit you have made after all business related expenses have
been paid.
National Insurance Paid to build up entitlement to certain State benefits
including the State Pension. The amount paid is based upon the amount of
income.
Corporation Tax Tax paid on a limited companys taxable profits.
Value Added Tax (VAT) VAT is a tax paid on most goods and services
supplied in the UK, paid by companies that are VAT registered.
Legislation
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Financial continued
Other taxes which you as an individual or your business may have to pay
include:
Stamp Duty
Capital Gains Tax
Importing and Exporting Duties
All of the above taxes are paid to Her Majestys Revenue and Custom
(HMRC); for further information on rates of tax, which taxes you are obliged
to pay and for guidance have a look at: www.hmrc.gov.uk
Business Rates - As a trading venture operating in your local area you may
also have to pay business rates which are paid to help pay for local services.
You would most likely have to pay business rates if you use a building or part
of a building for non-domestic purposes. Unlike the other taxes mentioned,
business rates are paid to and managed by the local council where your
business is based.
For further information on business rates please look here:
https://www.gov.uk/introduction-to-business-rates/overview
Legislation
Your most unhappy customers areyour greatest source of learning.
-Bill Gates
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InsuranceAs in day to day life, we have to protect ourselves and our businesses
against unforeseen circumstances. There are several insurance products
available to business owners to protect themselves and the continual
trading of their businesses against the unknown.
In some industries it is a requirement for you to have certain insurance and
so it is always wise to check with your regulating body as to their opinion.The most common insurance policies taken about by businesses are as
follows:
Public Liability Insurance Protects the business against compensation
claims and legal action against the business.
Professional Indemnity Insurance Covers the cost of compensation to
clients if your professional advice has caused them to lose money or
business.
Product Liability Insurance Covers the cost of compensation to anyone
who is injured, or whose property is damaged because of a fault in a product
that you manufacture or supply.
There are many other insurance products which may be useful and are
sometimes targeted towards specific industries. Also dont forget if you are
using your personal vehicle for trading purposes it should be covered by
business insurance.
For details about insurance policies you can purchase for your business and
to talk through your requirements, speak to an insurance broker:
http://www.biba.org.uk/CustomerHome.aspx
Legislation
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Not all businesses are set up with the sole aim of creating money for their
owners and shareholders. Social Enterprises are businesses which are
created with social aims where the profits are used for charitable, social or
community purposes as opposed to going to shareholders. These differ from
ordinary businesses that have social aims as Social Enterprises are governed
to ensure that they stay true to their purpose.
One of the key things to remember with a social enterprise is that first and
foremost they are a business and so have to be viable and able to trade in
order to support their social activities.
Social Enterprises have their own designated structures which are similar to
those of an ordinary business:
Community Interest Company Set up to benefit the community ratherthan the shareholders, registered through Companies House, you create
an asset lock which is a legal statement allowing the companys assets
to only be used for social objectives.
Company Limited by Shares Not specifically designed for Social
Enterprises but can be adapted. Again set up through Companies House.
Company Limited by Guarantee These do not have shareholders, instead
they have members. As the members are guarantors not shareholders,
they cannot benefit from any increased value of the company.
For more information on setting up a social enterprise see here:
http://www.socialenterprise.org.uk/
Social Enterprise
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In your business plan you would have discussed your marketing and
advertising. It is often advisable to create a separate more thorough
marketing plan to compliment your business plan. Marketing is what draws
people into your brand and your business and moves them to buy from you.
Without marketing and advertising your business may as well be hidden
from sight, begging the question how do people find out about you?
Drawing on what we discussed earlier regarding identifying who it is you
think is most likely to buy from you, you can create a full campaign across
12 months which shows how you envisage targeting potential buyers.
Marketing Plan
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Information and Regulation
Her Majestys Revenue and Custom (HMRC)
Information, advice and regulation of sole-traders, partnerships,
taxes and National Insurance for all UK based enterprises.
www.hmrc.gov.uk
Companies House
Regulatory body which incorporates and dissolves limited companies,
stores and examines information in relation to the Companies Act and
makes this available to the public.
www.companieshouse.gov.uk
Intellectual Property Office
Official government body for responsible for Intellectual Property (IP) in the
United Kingdom.www.ipo.gov.uk
Support organisations
The Princes Trust
Practical support for young people in need of it most around
skills development, confidence and motivation.
www.princes-trust.org.uk
Prime
Supports mature entrepreneurs (Over 50) to set up their businesses.
www.prime.org.uk
Sheffield PATLIB Centre
Intellectual Property and Business Information advice
Useful Contacts and Links
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Support organisations continued
Business and Patent Information Services; Leeds Library
Business and Intellectual Property advice
www.businessandpatents.org
Social Enterprise Yorkshire
Organisation for individuals and groups exploring setting up
a social enterprise.
www.seyh.org.uk
UK Trade and Investment
UK Trade and Investment (UKTI) work with British businesses
to ensure their success in overseas markets.
www.ukti.gov.uk
Finance and Professional Services
Finance Yorkshire
Finance Yorkshire offer seed-corn finance, business loans and equity-linked
finance from 15,000 to 2 million for businesses in Yorkshire and Humber.
www.finance-yorkshire.com
Yorkshire Association of Business AngelsYorkshire association of Business Angels (YABA) are an organisation who put
private equity investors in touch with businesses looking for finance.
www.yaba.org.uk
Institute of Chartered Accountants for England and Wales
Register of accountants.
www.icaew.com
Useful Contacts and Links
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Finance and Professional Services continued
British Insurance Brokers Association
Register of Insurance brokers for all forms of cover.
www.biba.org.uk
Lawyers for Your Business
Scheme run by the Law Society offering businesses
half an hour free legal consultation.
www.lawsociety.org.uk/lfyb/
Membership and Networking Organisations
Barnsley & Rotherham Chamber of Commerce
Membership organisation for businesses in the Barnsley and Rotherham
areas offering support to its members.
www.brchamber.co.uk
Doncaster Chamber of Commerce
Membership organisation for businesses in the Doncaster
area offering supports to its members.
www.doncaster-chamber.co.uk
Leeds and North Yorkshire Chamber of CommerceMembership organisation for businesses in Leeds, York and North Yorkshire
offering support to its members.
www.yourchamber.org.uk
Mid Yorkshire Chamber of Commerce
Membership organisation for businesses in Huddersfield, Halifax
and Wakefield offering support to its members.
www.mycci.co.uk
Useful Contacts and Links
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Membership and Networking Organisations
Sheffield Chamber of Commerce
Membership organisation for businesses in Sheffield
offering support to its members.
www.scci.org.uk
Federation of Small Businesses
Membership organisation offering support, networking opportunities
and discounts to its members.
www.fsb.org.uk
Women in Rural Enterprise
Membership organisation offering support to women
who are running enterprises in rural areas.
www.wireuk.org
Forward Ladies
Membership networking organisation for ladies in
business offering support and advice.
www.forwardladies.com
Useful Contacts and Links
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Our greatest weakness lies in giving up.The most certain way to succeed isalways to try just one more time.
-Thomas A. Edison
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Notes
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/ezonebarnsley
@ezonebarnsley
www.barnsley.ac.uk/Enterprise
01226 216 840