Getting into bed with the celebs

Apr 27, ’12 6:55 PM

Author Leonora Soculitherz Categories Business Bootstrapping, Business Funding, Business Mentoring, Business Startup, Employment, Entrepreneur, Finance, Home Business, Micro Business, News, Self-employed, Small Business / SOHO, Start-Up

Not about frocks

Keep up won’t you; I’m not asking you to actually sleep with the celebs. I don’t allow anyone to sleep with me. Simon Cowell’s unofficial biography mentioned Dannii Minogue but not me. Yet, coincidentally, I also have a chic shorter ‘do and a couple of designer frocks with an of-the-moment statement shoulder.

No, what I want you to do is consider why government folk, like your Brit Prime Minister, David Cameron, choose celebrities and big company chiefs to advise them on promoting and supporting business start-ups. Put it another way: why don’t your government ask people who have started and are currently running micro businesses to advise them on enterprise policies?

For example, they could use Stefan Topfer instead. Stefan is the Editor of The Small Business Blog and is a highly successful entrepreneur. Then there’s my hopeless agent and highly unsuccessful entrepreneur, who still knows a thing or two about starting and running micro businesses, Tony Robinson OBE.

Not about self-employment

The answer to my question is ‘charisma’. This is something the glampreneurs and fat cats have but the aforementioned German and Yorkshireman do not. Perhaps they’re messy eaters too, especially with posh nosh. You see your government like to portray starting your own business as something anyone can do. In fact they want everyone to do it whilst the big corporates, that are running the country, lay off thousands of employees. It makes the unemployment figures look acceptable.

Furthermore, the Banks and Big Companies want the 6% of start-ups that become substantial businesses as their customers and the glampreneurs want to sell all the start-ups their books and events.

It is about aspiration

Celebrity spokespeople will stay ‘on message’ for government. On message is that entrepreneurs are sexy and wealthy but the self-employed are the great unwashed. On message is that successful start-ups need to invest in financial services (loans, insurance and pensions), utilities, technology, and management and business skills – plus have a volunteer mentor, who may not have started and run their own business, on their shoulder.

Government and corporate leaders legitimise these messages about enterprise, such as, ‘Business in You’, as important for ‘trough filling’. The trough is filled with lots of dosh from start ups buying lots from big companies, taxation and lack of pay out to the welfare state and corporate social responsibility. The public sector and big company leaders keep filling the trough even as they lay off thousands of their employees.

Off message

Business owners, like Stefan Topfer and Tony Robinson OBE, recommend an alternative approach which is that people starting a business are best to bootstrap, test trade, not borrow, and should spend most of their personal time winning customers and managing cash flow.

Furthermore, they suggest that the best help they’ll get will be from other self-employed and micro business owners and that they may need to avoid supplying big corporates as they’ll pay them after, an average, 80 days. In fact, this German/Tyke combo hardly recommend start-ups do any of the stuff most government spokespeople, glampreneurs and corporate leaders do.

So now you know why government get into bed with the celebs.

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7 Questions To Ask When Considering Equity Finance For Your Business

Apr 1, ’12 6:20 PM

Author Lorraine Allman Categories Business Funding, Finance, Finance, find funding

Do you have a registered limited company?
For equity finance to work, you need to have a limited company (occasionally limited partnerships are acceptable), which then allows for the allocation of company shares to your external investors. If you are unsure about the advantages and disadvantages of moving from your current structure to that of a limited company, have a look at this resource and speak with a professional adviser.

Do you have an up-to-date business plan?
A business plan is essential if you’re planning on raising any kind of finance (venture, angel, bank etc.) and an up-to-date one including cash flow projections and other financials (see below) is essential.

Do you have up-to-date and detailed financial forecasts for your business over the next 3-5 years?
As part of your business plan you will definitely need detailed financial forecasts for your business over the next 3-5 years if you are serious about securing external investment. Investors will want to see exactly when they can expect a return on investment (normally within this time-frame) so if you can’t demonstrate that through your financials you may need to go back to the drawing board on your business model. As a starting point for putting these types of financials together, make sure the figures are backed up with solid, reliable research on projected growth of your company, future demand of your product/service, and current and future growth of your target market.

Do you have a clear idea as to what you will do with the money that will be invested in your business?
Sounds obvious but surprising how many businesses think it’ll be great to have £80k investment without a clear plan as to what the money will be spent on. Simply generalising that £x will be spent on ’marketing’ or ‘product development’ is not sufficient to reassure potential investors that you’re not going to just fritter their money away or pay yourself a big fat salary! Take time to focus and think strategically about where you want your business to be and how the money will help you move towards that goal. Always research your costings and put detail on your spending plans to demonstrate a thorough and professional approach to the business.

Does your management team have credible and relevant business experience including industry knowledge where applicable?
External investors such as Business Angels and Venture Capitalists will look at your management team to work out where the strengths and weaknesses lie and whether as a team you will be able to deliver the plans and grow the business. Even though you may feel your team has good all round business experience, you may want to think about ways to add credibility, complementary experiences, industry knowledge and networks to that team through for example the appointment of a Non-Executive Director.

The other area to consider is how you articulate the entrepreneurial skills and attitudes of your team. This will be of particular interest to external investors who will always want to know more about the people who are going to be delivering the business plan.

Do you have a clear exit strategy for your business?
Venture Capitalists in particular are keen on clear exit strategies within a specific time frame. They usually look to invest in high-growth companies with a clear growth and/or exit strategy such as sale or IPO. If you are still unclear about your exit strategy then Business Angels may be a better option to explore however it is worthwhile spending time thinking about where you see the business in 3-5 years’ time, possible exit routes and what needs to be in place to achieve any of these.

Do you have experience of ‘pitching’ your business to investors?
‘Pitching’ to investors is something anyone who is seriously considering equity finance is going to have to get to grips with. I’d be lying if I said it was a piece of cake, but if you are passionate about your business, and have a solid business plan behind you then you’re halfway there. You may be put off pitching by some of the experiences you have seen on programmes such as Dragon’s Den but these are not necessarily a true reflection of live pitching, rather selective snippets of ‘reality TV’ combined with a certain amount of ‘entertainment value’. There are some excellent resources available to support and inspire you as you prepare to pitch and of course a business mentor or coach will be able to provide some short-term support in this area too.

If you’ve worked through the answers to these questions and feel that securing equity investment in your business is not for you, take time to evaluate alternatives such as the increasingly popular Crowdfunding. I’ve written more about this on an earlier post.

Disclaimer
Anyone considering Equity Finance should be aware that there are many complex legal and regulatory issues relating to raising finance in this way and professional advice should always be sought. Please be aware that content here does not constitute specific legal or business advice nor should it be taken as such and you are strongly advised to consult an appropriate professional adviser before making any decisions and/or financial commitments.

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Yes, Ex-Minister,#MicroBizMatters!

Mar 28, ’12 10:55 AM

Author Leonora Soculitherz Categories Balderdash, Business Books, Business Startup, Entrepreneur, Finance, Freelancer, Home Business, Micro Business, MumEntrepreneur, Question & Answer, Reader Stories, Recession Survival, Red-Tape, SME-Blog, SOHO/SMB/SME/Micro, Self-employed, Small Business / SOHO, Small Business / SOHO, Start-Up

Question Time

Just before I flew home to Canada I was asked by my inept agent, Tony Robinson OBE, to chair a ‘Question Time’ type debate at a large micro business conference in his home town of Scarborough.

Micro businesses (0-9 employees) are, apparently, quite important to the UK. There are 4.5 million of them and they comprise 96% of all businesses. There are up to 500,000 micro business new starts each year and newer micro businesses provide most of the new jobs and innovation. As it is, micro businesses provide a third of employment and a fifth of UK turnover.

With the right support over 80% of new micro businesses will survive over 3 years and 6% of these will become substantial employing businesses. The conference was the opportunity for micro business owners to tackle government and big company leaders on what they will do to ensure micro enterprise thrives in Britain.

The Panel

The panel comprised of Will Scoop, MD of WhoppaStores, Sir Harry Gantwitt, former Secretary of State for Business and now Adviser to Investment Banker, JK Sexangold, and Robinson himself.

The clueless Robinson, Co-Founder of the Enterprise Rockers, was standing in for Bernard Ogbrush, Shadow Minister for Transport, whose train had been delayed because of sun on the tracks.

It was all a bit of a rush actually. The former Secretary of State was keen to return south almost from setting foot in Scarborough. Apparently he’d been intimidated by the seagulls, not because of their rather fearsome looks – heavily muscled, bald, tattooed and pierced – but because of their bad language towards him. Gantwitt blamed their swearing on binge drinking and vowed to increase the price of alcohol in pubs and clubs.

It wasn’t going to be an easy session to Chair. Robinson was useless and Scoop had already said to me he wouldn’t be able to comment on anything to do with fuel, alcohol, adult skills or women. This was because Scoop was not only MD of the WhoppaStores supermarket chain but also Director of the BigPubCos Trade Club.

In addition he was Chair of the Apprenticeship Services and WhoppaStores holds the UK employer record for receiving the most skills training funding from government. Scoop was also Chair of the ‘Equal Pay for Women in the Private Sector with Women in the Public Sector’ Committee. Basically he was working with Government on ‘confidential to policymakers’ solutions’ to just about everything and so couldn’t comment on hardly anything.

Gantwitt was coming into the panel not having endeared himself to all the micro business owners in the room by saying that the government was powerless on fuel prices.

His words were: ‘I know it’s difficult for those of you in road haulage and man and van firms but you’ll appreciate we can’t affect the price of oil and what is happening thousands of miles away from Britain. We’ve got an excellent public transport system in London and we’ll just have to use it – it’s greener too’.

I think Gantwitt is wrong about binge drinking too. Any local will tell you that seagulls are stealth drinkers partaking in a bottle or two of Rioja every evening with their meal.

I wanted the Question Time over as soon as possible. These were three appalling men on the panel which I couldn’t be doing with. Also, I’d spotted a rather nice evening gown, by Gino Cerutti, in Frockabella and wanted to claim it before the shop shut.

The Discussion

The following is a transcript of a segment of the ‘Question Time’, which will interest readers of The Small Business Blog. The question they were answering was ‘Do the panel think that micro business owners got a fair deal in the recent Budget?’

Gantwitt: Most definitely. The incentives they need to grow, we gave them. Firstly, they can now borrow lots to grow their little businesses into proper Smeese that solve our transitory unemployment blip. In fact who knows some of them may even be able to borrow enough to supply WhoppaStores in the future (a minute’s laughter ensued between Scoop and Gantwitt).

Scoop: Just to underline Harry’s point there. The government’s loan guarantee website makes it clear they should save £50k on a £5 million loan.

Robinson: Would anyone like a glass of water?

Gantwitt: Secondly, we incentivised them to reward themselves with a decent wage on a par with many of our advisers, by removing the 50p tax rate on salaries over £150k. It was stopping real entrepreneurs being entrepreneurial both as managers in big companies and Smeese too.

Me – Soculitherz (pronounced So-cool-it-hurts): Some say most micro business owners, real entrepreneurs, don’t want loans this size and that loans well under £50,000 are needed plus there isn’t anyone in the room that can afford to pay themselves anywhere near the wages you’re talking about.

Scoop: I’d like to come to the former Secretary of State’s defence here. The government is encouraging owners of Smeese to seize their place at the bottom of the supply chain to companies like ours. Frankly, they won’t get there without significant investment and reserves too. After all, the average time large companies, like mine, take to pay the bills of little businesses is 80 days. We do that for a reason you know and that reason is only the fittest survive.

Robinson: Would anyone like an extra strong mint?

Me: But how can micro businesses survive when your supermarkets take all their business away?

Gantwitt: Can I repay the favour and answer that for Will, Chair. Look this isn’t a ‘size’ issue it’s a ‘management’ issue When I was Secretary of State, my advisers …… by the way, my advisers knew a lot about small business, they even had them in their home doing repairs and stuff. My advisers worked very closely with Bill’s Senior Management team and only had the highest praise for them.

Scoop: Absolutely Harry and we’re indebted to national, regional and local government for supporting and investing in our expansion. What these owners of these little businesses need to do is get trained in management and hire lots of cheap or subsidised by the government, staff.

Robinson: Has anyone got a pencil sharpener?

Gantwitt: Spot on Will. This management skills gap means we’re lagging behind our international competitors in productivity and diversification. If you have the skills then it doesn’t matter who you are … a butcher or baker or candlestickmaker … you’ll manage through WhoppaStores doing better and cheaper what you were doing and you’ll already have transitioned to say … a clothes shop…

Scoop: ….. we do clothes…

Gantwitt: … or mobile phones…

Scoop: …we do mobile phones…

Robinson: Did we all remember to switch our mobile phones off?

Gantwitt: …or hairdressing, insurance … you get my drift. Would you credit …

Scoop: …absolutely, Harry, driftwood we don’t do.

I was going to challenge them on how bad the budget and current government policies were for both self employed and employed women, especially for those with young children. Then I remembered that Scoop wouldn’t answer such questions, Gantwitt wouldn’t care and Robinson would just blush. The only way out of this mess for Britain is to appoint women to all the top jobs in Government, the City and the top 100 corporates. Job done.

So I wrapped it up and reminded the audience that my latest book ‘Stripping for Freedom‘, despite being written with Robinson, was still selling well on Amazon.

———–ENDS ———–

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The Real Deal – Don’t Accept Anything Less

Mar 19, ’12 8:55 PM

Author Tony Robinson OBE Categories Business Funding, Business Ideas, Business Marketing, Business Startup, Finance, Freelancer, Getting Things Done, Reader Stories, SOHO/SMB/SME/Micro, Self-employed, Small Business / SOHO, Start-Up, be successful, do a reality check, market and sell, plan your business, start-up in business, start-up in business

Entrepreneur Conferences need a business health warning.

November and March are always the biggest months for Enterprise and Entrepreneurship conferences. Last week, I was lucky enough to be in Liverpool for the Global Entrepreneurship Congress. Last year it was in Dubai and next year it’s in Rio de Janeiro so we were lucky to have it in the UK. Liverpool is awesome, as is the Beatles Story, but I’m afraid the Congress didn’t float my boat. However, I did learn something important, for start up success, that I’d like to pass on.

On jumping into the taxi to take me to Lime Street station from my hotel I said to the taxi driver ‘Heck you were quick, you surprised me’. To which the taxi driver said ‘That’s what my wife says’. I laughed and it was a fab trip to the station and the taxi driver certainly earned his tip for cheering me up and educating me about all the new exciting development in Liverpool. That Liverpool taxi driver was the real deal. Everything you hope a taxi driver will be and that comes from real experience of handling hundreds of fares.

Intrepreneurs ain’t entrepreneurs

However, many of the speakers at the Congress weren’t. The reason they weren’t is they were people with monthly salaries in jobs. They were passing on what they think is important to be a successful entrepreneur. But really they were still just successful people in jobs not the real deal entrepreneur/enterprise owner. That’s different. They have budgets and functions and staff – it takes quite a bit o success before a start up gets any of these. They hadn’t taken a risk, on their own, with their own money to start and run their own enterprise. Only those that have are the real deal and can new starts authentic advice.

It’s simpler than they make out

The problem is they were magnetic, interesting people and you could tell why they’d got to the top and why peers might regard them as great leaders and entrepreneurs but what they were saying was dangerous. Indeed it is safer if prospective enterprise owners ignore their advice – difficult I know – because they’ll overcomplicate things for you and over-complication usually leads to very expensive ways of doing business.

Sir Richard Branson and Lord Sugar, despite their many critics, are definitely the real deal and although they’re now at the top of large organisations they haven’t forgotten what it is to start your own enterprise. Hearing from them is a reality check. Some things they said that show they are still totally in touch with practical realities. Branson is in favour of student type loans for start ups, and so am I. The difference between him and many of the other speakers is that he says, something like ‘it doesn’t take much money to start a business’.

Lord Sugar says something similar when he advises start ups that a good tip is to ‘work out how you’re going to make the salary you need in your first week of trading’. They know the value of a £pound and they see a few £thousand as a significant investment. Many bank advisers aren’t interested in loans under £50,000. Yet you or I investing £500 in our start up enterprise will be regarded as a serious entrepreneur by anyone who has started their own business.

Enterprise isn’t complex and it’s about your ability to sell products and services. It is not about leadership, business planning, strategy and pitching to investors.

Multiple income streams and test trading

Two weeks earlier I’d been in Leeds City library at an event for people thinking of starting their own business. Apart from my wonderful co-founder of the Enterprise Rockers, Tina Boden, the speakers made setting up and promoting your own business sound very complex. Why? Because all of them were speaking at the event for free. They hoped that the delegates might seek them out afterwards and pay them for their advice. If they made starting up sound easy no-one would pay them to help them. Again, advisers are not always the real deal.

What was disturbing were the number of people I spoke to that after listening to advice from the stage thought they had to work one business idea into a serious business plan and then get the finance to fund their plan. Two people I spoke to were very relieved to hear from me that you should test as many ideas as you can.

In fact testing is more important than planning. Certainly you can start with more than one product or service and can have multiple ways of making money. You may even choose to have money from a part time job or freelancing to help you in the early months.

Happiness is more than one egg in the basket

One person I spoke to went away happy that he could start, virtually the next day, seeing if he could make some money from both landscape gardening and making bicycles easier to ride by perfect fitting and alignment. He had been trained in law and was very confident at writing and was even more pleased that he could blog about totally different subjects and lead prospective clients to two very different websites.

The big lesson to me from all this is that real entrepreneurs that have started and run their own business know that the focus is on what can I sell, to whom, by when in order to start earning my living through my busness. That’s the real deal.

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Crowdfunding – could it work for your business?

Jan 18, ’12 7:21 PM

Author Lorraine Allman Categories Business Funding, Business Startup, Finance, Finance, Micro Business, Small Business / SOHO, find funding

Crowdfunding is becoming an increasingly popular method for small businesses and social ventures to raise much needed funds. The map below gives you some idea of the scale of growth in Crowdfunding over recent years. Interestingly, the same source indicates that 46% of all UK Crowdfunding platforms were launched in 2011 alone, so with the growth in such sites I wanted to write about the ups and downs of Crowdfunding from a small business perspective.

What exactly is Crowdfunding?
The idea behind crowdfunding is a relatively simple one. You have a business idea or want to grow your business but need money to make this happen. Visit your chosen crowdfunding platform, create your pitch, set your financial target, and promote your project to anyone online or offline who you think might want to invest in it, for example family, friends, clients, suppliers, twitter followers, linkedin (you get the idea). You offer rewards (traditional Crowdfunding) or a share of equity/revenue (commercial Crowdfunding) in return for the investment. When you reach your target, you get your money and get delivering on all those promises.

Sounds simple enough! So once your project has been listed you sit back and let the money roll in?
Alas, nothing could be further from the truth. In fact if you haven’t already been building your profile and marketing to your target audience before you post you’re going to have to work flat out to raise the funds you need. The onus is very much on YOU to promote your project and get the investors in. At the time of writing this blog 31 projects, that’s 67% of those listed currently on the commercial Crowdfunding site Crowdcube® have 10% funding or less (many at 0%). Looking at some of the successes on the site it’s not difficult to spot the more established companies securing their investment fairly quickly (Kammerling’s £180k; The Rushmore Group Ltd £1m). I’m not saying they didn’t have to work to secure their investment but a more established brand is likely to have a head-start.

How much does it cost to post a project?
At the current time the majority of sites don’t charge to list your project, but do take a fee when projects reach their investment target. The average seems to be around 5% of the target achieved.

What do I have to offer in return?
Different sites have different rules so be clear about this before deciding whether to part with equity or offer rewards. Rewards (or ‘perks’ as they are called on some sites) could be anything relevant to your project such as free tickets to a show to an acknowledgement on a website or free/discounted products depending on how much is pledged. Crowdcube® require you to release equity in return for pledges so you’ll need to make sure you have the right company structure for this and think carefully about how much equity you’re prepared to offer. Most sites have an area where you can interact with investors and let them know how plans are progressing.

The art of pitching
Creating a memorable pitch (usually in video format) is a crucial part of the Crowdfunding process and it’s probably true to say many small businesses don’t have spare video footage hanging around that can be used. Even if you did, you need to know how to make your video appealing to potential investors and get your message across in a very short space of time.

You have to remember that whilst the Crowdfunding websites are providing a platform for you, that is all they are doing. It is YOU who has to put the work in to promote it, market it and reach your intended audience. You’ll be competing against plenty of other businesses so creating a compelling pitch, sometimes in less than a minute, can be a real challenge. It’s worthwhile looking at the different sites and watching the videos of those projects who have secured 100% funding to get some ideas for your pitch. It may even be worth having a chat with one or two of them to find out just how much work they put in ‘behind the scenes’ to reach their target.

Dribble Delights – an example of a small business Crowdfunding
I caught up recently with Cheryl Ryder owner of Dribble Delights who currently has her project posted on Bloom VC a site which allows you to ‘make a promise’ to investors in return for their money. I asked her about her Crowdfunding experience so far.

Cheryl’s idea for a range of dairy-free foods for babies and toddlers stemmed from her own experiences as a Mum of a now 3 children, all of whom are dairy-intolerant. She became exasperated at the lack of choice on the shelves when it came to party food and treats in particular. She entered the company into The Pitch 2011 competition with just an idea and became one of five finalists in the Scottish heat. This spurred her on to take the idea forward but as is often the case, funds were needed to turn it into a reality. Enter Crowdfunding.

“It seemed like a good idea” said Cheryl “we had nothing to lose and everything to gain by trying to raise funds this way”. Although Dribble Delights have not yet reached their target funding (they have 30 days left but have so far secured just 3% of their target £7300), Cheryl is keen to point out what a positive experience it has been for them and the value of using the Crowdfunding platform to get their message out there.

“If anyone enters Crowdfunding simply to get money then they’re fools” said Cheryl. “It’s a bonus if you get your money but the exposure and opportunity it presents is priceless. We’ve had amazing coverage and recognising we’re operating in a very niche market, but being able to reach that, ask questions and effectively test out what we’re doing has been incredibly helpful”.

Cheryl isn’t put off even if they don’t raise their funds in the next month, but feels that the most successful projects are those who have been working on building their market well in advance of posting their project and already have a following.

Making your ideas public
I asked Cheryl whether she had any concerns about drawing attention to her business idea before it was off the ground in case somebody came along and copied it. As her company was already very much in the public domain having been a finalist in The Pitch 2011 it wasn’t really an issue, but for others it could be so you have to balance whether the exposure with potential financial return balances out or outweighs the possible risk of someone with deeper pockets taking your idea and turning it into reality before you have chance to.

Here’s my summary of the ups and downs of Crowdfunding for small business:

Some good reasons to choose Crowdfunding:

More straightforward (and less expensive) to raise finance than through Business Angels/VC
An alternative to bank finance which is difficult for small business to secure
Free PR for your business – gets your message out there
Positive endorsement from potential clients
Builds future buyers database

Some things to think about:

Waiting time to know if you’ve raised sufficient funds to go ahead
Lack of good contacts, networks and mentoring that normally comes with external investment
Risk of failure to gain investment
Multiple investors to communicate with
Risk of idea being copied

It’s up to you to decide whether its right for your business but it should certainly be given serious consideration.

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Invoice Finance improves your Cashflow

Nov 4, ’11 4:31 PM

Author Stefan Töpfer (Editor) Categories Finance, Guest Blog

As the world continues to recover from the pitfalls of the economic recession, businesses seek out ways to obtain conventional business finance and keep their debt at minimal level. This causes a huge strain on the cash flow of businesses especially those actively involved in day-to-day commercial operations.

Businesses that sell to other businesses prioritise themselves to maintain a cash flow that grows in perpetuity and this often appears to be an implausible task. Even the most solvent of businesses risk becoming untenable if they face cash flow problems. With recent innovations in commercial financing facilities such as invoice finance, companies can now rely on their outstanding debt to secure an immediate injection of funds.

Invoice Finance is a technique of borrowing money against pending sales invoices. It provides complete flexibility and allows a business to run itself without using its cash reserves. It is a very suitable facility for businesses that sell to other businesses as there is some assurance of the quality of the outstanding debt. In addition, invoice finance assists businesses of all sizes and has a specific financial package for all the industries it comes across.

In this difficult economic climate, banks are becoming increasingly reluctant to offer credit facilities to businesses. Even the most solvent of businesses could experience cash flow problems. In the interim, invoice finance permits you to secure business funding in a fluctuating market environment by providing cash advances against outstanding payments from customers. You do not have to wait 30-90 days to get paid and the end result is an instant cash boost against your sales account which allows you carry on your business stress-free.

What a feeble cash flow could mean to a business

Businesses in the UK have a culture of late and/or overdue payments which creates a giant pit in the finances of the creditor business. Customers in debt delay their payment of outstanding invoices right up to maturity date or later which leaves their cash flow in a favourable position. This causes a financial strain on the creditor business in need of funds to pay its bills and forces them into expensive forms of borrowing.

On a very local level, individuals who have money at home may not have the cash to buy a commodity in a shop which is heavily discounted. The same scenario applies to businesses that become restrained from short-term opportunities as they arise. Businesses with cash flow problems are often hindered from short-term equanimity and long-term expansion.

How Invoice Finance makes the cash flow

Invoice finance transforms outstanding invoices into cash available within 24 hours of raising an invoice. This creates higher levels of working capital and enables a business expand in a risk-free manner whilst taking advantage of accurate financial forecasting.

It is encouraging that this form of finance is growing at such an increasing rate as many businesses now can comfortably rely on invoice finance to get their cash flow back on track. With an invoice finance facility, businesses take advantage of the following:

Up to 90% of outstanding funds released almost immediately
The option to control the sales ledger and debtor collection
Increased working capital hence the ability to pay bills on time
Improved bargaining power and access to early supplier discounts
Flexible facility as its growth is dependent on your sales volume
Competitively priced facility
Fewer conditional requirements
Loan repaid each time your customer repays their invoice

Invoice Finance is best offered by a commercial finance broker who would have access to the suitable lenders that can help fuel growth in your business. Reasonable advance rates are offered and the remainder of the invoice value (less any charges) is paid to you once your customers settle their invoice.

GUEST BLOG: This business advice article was provided by Touch Financial, the Factoring specialists.

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Worsening Access To Finance For UK Small Business

Nov 16, ’09 2:51 PM

Author Stefan Töpfer (Editor) Categories Finance

Following on from my interview on CNBC, I came under fire with some criticism for suggesting the banks and the government is failing small business with access to affordable finance.

Today the British Chamber of Commerce announced in its latest monthly report that:

33% of companies said access to finance was more difficult over the last three months, is is up 13% on the previous quarter;
3% reported improved access to finance – a drop from 6% a quarter ago.

This shows how fragile the SME community is in terms of long term planning and business survival – a damning situation for banks and the government alike.

Read on @ British Chamber of Commerce.

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Equity essential to finance new ventures writes the Financial Times

Sep 14, ’09 11:33 AM

Author Stefan Töpfer (Editor) Categories Finance, WinWeb, find funding

Equity rather than debt holds the key to financing the future of the UK’s small business sector, according to the Association of Chartered Certified Accountants (ACCA).

The association’s small and medium-sized enterprises (SMEs) committee claims that economic recovery could be the shining moment for wealthy individuals who put money into early-stage ventures.

Read more @ FT.com

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How much money do you really need to start your micro business?

Feb 2, ’08 11:59 AM

Author Stefan Töpfer (Editor) Categories Finance, find funding

Starting from home and using bootstrapping techniques will save you money and help your small business to stay afloat. But you will need some money – the question is, how much capital will you really need.

To work this out you should do a cash-flow forecast, planning your income and expenditure for the next six to twelve month. Doing this on a per month basis is certainly a good start. Here are a few pointers to think about, when doing your cash-flow:

Don’t be too optimistic – make your plan as realistic as you can;
Turnover or Income – what happens if you turnover is less than expected;
Payment Terms – what if your customers pay later than expected;
Business Interruption – what if you are ill, or your co-workers are ill;
Holidays – the costs in your business keep on running.

You need to remember that cash-flow forecasting is not a exact science, it is a planning tool. There will always be a certain degree of error in your plan, and that is the interesting part. Now you can learn what went wrong and understand your business better, it will force you to rethink and face facts. Running a business is not gambling, it is taking manageable risks, and the aim has to be to minimise the risks to your home business as much as possible – cash-flow forecasting does exactly that.

You will be amazed what you can learn about the financial dynamic in your small business within one hour, that is often all it takes to get started. Once you know where your money is going and what benefit you derive from this expenditure, you can start thinking about different – more cost effective – ways to achieve the same result, and have a healthier small business in the process.

If you need help to start your cash-flow forecasting, use the WinWeb free cash-flow forecasting tool and ask our 24/7 support staff for help.

So, how much money do you really need? ST.

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Q & A: How Do I Find A Suitable Bank For My Small Business?

Nov 11, ’07 12:23 PM

Author Stefan Töpfer (Editor) Categories Finance, Question & Answer, find funding

This is not a precise art so you need to make some judgment calls along the way, every small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants needs a bank .

I would take this stepped approach to finding a small business bank in your area, and many of the steps are similar to finding other suppliers:

Find out the facts – i.e. account charges, loan charges, banking hours, online banking and other benefits, like free advice, software, etc.
Talk to the person who would be in charge of your account, meet with them.
Talk to other small businesses about the bank and the bank manager, go to networking events in your local area.
Make a Pro’s & Con’s list – then make your decision.

You will notice that banks don’t like to be called suppliers, or service providers, but that is exactly what they are, nothing more and nothing less. So use those terms and see how they react, if they get all upset and defensive about this, then walk away – they only see you as a number. This is probably the last time for a while that you hold all the cards, so it’s better to find out what your bank is like before you really need them.

For me business is between people, I move bank with my bank manager when he leaves, I’m on bank number three with him right now and that always served me well in the past, it is also a compliment to my bank manager, and he knows it.

Better the devil you know……! ST.

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