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Business Awareness Programme ‘Business Planning – how do I
create my first business?’
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Starting in BusinessBusiness Awareness
Workshop‘Business Planning – how do I create my
first business?’
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Bernard Curren MCMIResearch and EnterpriseKnowledge & Innovation Manager
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Starting in Business Programme
Welcome to Planning and RegulationGeneral introductions
DomesticsOutline of the Starting in Business Programme
Outline of today's Planning and Regulation session
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Planning and RegulationSmall Business- what does it mean?
Business Plan…why have one? Business Failure…some considerations!!!
Legal status Business names, trade marks, licences
Insurances , Tax, VAT Business Insurance
Health and Safety, Employment Law Premises
Contracts ..terms and conditions
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What it means to be a small business
Smallness means greater emphasis upon:
Standing alone Operating with limited resources
High levels of uncertainty and external dependency Being close to the customer
Coping with ‘total’ responsibility Managing a wide range of task structures
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What it means to be a small business - continued
Greater scope for individual dominance and responsibility
Managing networks with suppliers, customers, accountants.lawyers, bankers etc.
Wide scope for change and flexibility
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What is a business plan?&
Why have one!!!
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Planning is about looking to the future to minimise
risk and maximise opportunity
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Why have a Business Plan?3 Main reasons
A document setting out what you aim to do (setting targets and actions)
Reducing the risk of failure/ increasing the likelihood of success
Possibly assisting with the raising of business finance
Make your mistakes on paper!!
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The reasons for preparing a Business Plan?•To raise money
•Minimise Risk
•Increase success
•Reminder of why/who/what/when
•Assists in promoting the business to backers, suppliers, landlords and customers
•To know where you are going. To know when you have arrived
•Keeps focus on business issues
•It encourages realism
•Builds confidence in you and your team
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Important parts of the Plan
The vision….(where you are going) Why, When, How
The Market……..Segment, Size, Trends, Customer profile, Competition, Suppliers and Distribution
Financials…….Sales forecast, Cash Flow Forecast Profit and loss Forecast
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Business Plan• Title page• Synopsis of the plan• Background information• Form/status decision – dis/advantages• Key personnel – details in CV• Description of product/s and or service/s• Premises – location, type, size• Market research activities, findings and results• Written short, medium an long-term objectives• Marketing plan• Financial plan• Contingency plan
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The CashflowThis important document helps to:
• Establish the amount of money needed and when it is required• Ensure that capital expenditure is controlled• Encourage efficient use of resources• Identify any shortfalls• Provides facts to help with decision-making
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Reasons for Failure
• Under pricing• Inadequate cash flow• Lack of capital• Over-trading• Change in market demand• Ill health• Failure to keep Bank informed• Third Party debt – major customer
• Over estimating sales
• Failure to control costs
• Losing control over cash
• Inadequate market research
• Taking unnecessary risks
• Failure to meet client nee
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Legal Structure
Sole Trader
Partnership
Limited Liability Partnership
Limited Company
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Sole Trader and PartnershipsYou must inform -Inland Revenue )
- Contributions Agency )HMRC- Customs & Excise )
In Law: 1) The Business and proprietor/s are the same.
2) You are solely/jointly responsiblefor all debts
Tax Assessment: 1) Self assessed2) Need to keep records for 6 years
Tax Calculation: IR 30th SeptemberYou 31st January
Payments on account – January 31st and July 31st
Penalties for late returnsNo external audit – the business is private
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Limited CompaniesSet Up Minimum 1 Shareholder,1 Director and Company Secretary
Buy Ready-to-use CompanySolicitor/AccountantDo-it-yourself – via the internet or formation agent
Registration Companies House
Documents Certificate of Incorporation and Memorandum and Articles of Association
Employees Pay as you Earn
Company Profits Corporation Tax Accounts must be audited annually by an external auditor – additional costs
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Social Enterprise Objectives Trading Social Purpose Owned by the community
Not for profit legal structures: Company limited by Guarantee Charity Industrial and Provident Society Social Firm Community Interest Company
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Business Names, Logos & Licences
Regulated by Business Names Act 1985Using your own name
Passing offChecking for names in use
Using a trading nameConsider domain names
Trademarks
Business Registration…..HMRC…..Local authority……HSE
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Data Protection Act 1998The 8 Data Protection Principles:Data shall be:
1. Fairly & lawfully processed2. Processed for limited purposes3. Adequate, relevant & not excessive4. Accurate5. Not kept longer than necessary6. Processed in accordance with the data subject’s rights7. Secure8. Not transferred to countries outside the EEA without adequate
protection
www.informationcommissioner.gov.uk
Do you need to register?Find out at:
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What is VAT?
Value Added Tax A tax on the supply within the UK of: Goods
Services
Imports and acquisitions into the UK Charged by a taxable person/entity In the course/furtherance of business
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VAT Registration
AdvantagesClaim VAT on most
purchases thus:• Reducing net
expenses • Reducing costs to VAT
Registered Customers, Exports and EC Sales
Commercial credibilityDiscipline of keeping records
up to date
Disadvantages• Charge VAT on all Taxable
Sales• Submit VAT Returns (usually
quarterly)• Need to keep records for 6
years
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VAT Liability/Rates Calculated on sales value over a rolling 12 months. Accounted for (typically)
quarterly
Compulsory Registration threshold = £67,000 Voluntary Registration at any time below thisDe-Registration threshold = £62,000?
Taxable Supplies: Non Taxable Supplies:Standard 15% - ExemptReduced Rate 5% - Outside the ScopeZero Rate 0%
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What Insurance will I need? Legal Requirements (compulsory)
Vehicle InsuranceEmployers Liability if you employ people
Other forms of InsurancePublic Liability
Product liability – if you sell, repair or supplyProfessional Indemnity – for consultants
Goods in Transit, Loss of money, FireBuilding and Contents
Personal Insurances – such as pensionsHealth & Life Insurances
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Do you need a Licence?Local Authority
Theatre, child-minding, taxi service, nightclubs, pet kennels, sex shops etc
Environmental Health DeptHotels, restaurants, tattooing, massage, acupuncture, abattoirs, etc
PolicePossession or sale of firearms, to work with children
MagistratesSale of alcohol, betting shops, gaming
HM Customs & ExciseBureau de change, money transmission, third party cheque cashing
Office of Fair TradingCredit Licence; Lending money, debt collection, hiring, leasing, etc
Planning OfficerBuilding regulations, alterations, change of use etc
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The Law and your BusinessCustomer Obligation:
The Supply of Goods and Services ActThe Sale of Goods ActTrade Descriptions Act
Consumer Protection ActThe Unfair Contract Terms Act
Consumer Credit ActsWeights and Measures Acts
Unsolicited Goods and Services ActsThe Prices Acts
The Goods and Drugs ActThe Distance Selling Regulations
Expert advice can be obtained from the Trading Standards Department of your Local Authority
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Health & Safety
Health & Safety at Work Act Offices, Shops and Railway Premises Act
Factories Act Fire Precautions Act
Health & Safety (First Aid) Regulations Act www.hse.gov.uk for risk assessment checklist
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PremisesTrading from HomeHouse DeedsCapital Gains TaxPlanning IssuesHome Insurers
Commercial RentingLicense LeaseEasy in, easy out - Period- Break clause- Full repairing- Assignment- Sub-letting- Landlords legal fees- Rent Review dates- Service charges
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Terms and Conditions of TradingDelivery timingPayment dates
Ownership (retention of title)Cancellation
PriceRefunds policyForce majeure
Consequential lossIPR issues
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Useful Websites
Business Link… http://www.bldc.co.uk/ BERR http://www.berr.gov.uk/ HM Revenue & Customs www.hmrc.gov.uk
www.plymouth.ac.uk/businessservices
Contact Numbers: Local Business Link Office 0845 600 9966