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Do I Need to VAT-register My New Business?

Monday, February 4th, 2013

No one likes paying it – but VAT is one of the things you can’t ignore when setting up a new business.

Even if it turns out you don’t need to register your business for VAT, there’s a good chance that some of your contacts and suppliers will add VAT to their invoices. So rather than avoiding the subject and crossing fingers that the VAT man won’t find you, read our easy guide to find out what it’s all about and whether you need to register.

What is VAT?

VAT, or Value Added Tax, is a tax on business transactions in the UK. Some transactions are exempt but most goods and services are subject to VAT. The standard rate is 20% of the cost of the goods or service, but there is also a reduced rate of 5% and a zero rate (0%). When VAT-registered businesses buy goods and services, they can usually claim back the VAT that they pay.

Who needs to register?

Businesses need to register for VAT if their annual turnover is £77,000 or above, or is about to go over this threshold. Businesses whose turnover is under £77,000 can still voluntarily register for VAT, so think about whether being VAT-registered could be good for your new business. If you’re not sure if it would benefit you, have a chat with your accountant.

How do I pay VAT?

You will need to fill in a VAT return regularly, usually once a quarter. If the amount of output tax (the sum you add to your sales price) is more than the amount of input tax (the amount you pay on goods and services bought), you will have to pay the difference. If the input tax is greater than the output tax, you can claim the difference back. Most businesses now have to submit their returns and pay electronically, and there are a number of ways you can do this. For more information visit www.hmrc.gov.uk.

Kind regards
ROY DERRICK

Posted in Business Start Up, Finance, Running A Home Based Business, Small Business, Small Business Advice, Starting A Business | No Comments »

Ideas For Starting A Small Business

Tuesday, July 24th, 2012

Sun, Sea And Ice Cream

I have to share this small business idea and experience with you.

During a recent holiday break in Turkey it became apparent to me that no matter where I go, even during my holidays I’m always looking out for exciting and usual ideas for starting a new business.

During our family holiday I decided to hire a speed boat for the day so we could all whizz around the Turkish beaches and explore some of their secluded bays, try out some snorkeling and swim in the clear sea waters. After sourcing a local small business to hire the speed boat from the small business owner was kind enough to warn me to keep out of the forbidden sea waters to the East of the coast to avoid being arrested by the sea patrol.

In all fairness to the business owner ‘Jaq’, he was very helpful and took a lot of pride in the service he offered us. I was intrigued by the way he had set up and put his small business idea in to action and soon got drawn into deep conversation with him before being dragged away by my wife !

For those of you who already know me you’ll know how much I love hearing stories on how other ordinary people come up with a Small Business idea and how they manage to set it up in the same way we share the stories on how we help people to start a small business.

Anyway, after about an hour whizzing around the secluded bays and swimming in the clear waters we set off again only to notice that we were quite close to the sea exclusion zone and that a speed boat was quickly heading towards with the man inside waving his hands at us….. Yes we did think the worse… that it was s Patrol Boat coming to give us a good telling off for being to close to the exclusion zone.

How wrong we were… in fact to our relief the man just operating a small business selling Ice Cream to people around the coast line. Phew !

Well, we couldn’t stop laughing over the fact that our panic turned into relief and ended by us all purchasing some lovely ice creams to enjoy during what was a scorching hot day from a small business owner who had taken the initiative to start his own small business idea selling ice creams to the hundreds of holiday makers, fishermen and boating enthusiasts around the Turkish Coastline. His boat was kitted out with freezers, signage, flags and a huge choice of ice creams. It was brilliant.

So you see, there are opportunities and ideas for starting a business all around us no matter where you are or where you go, many of which are right under your nose. Entrepreneurs never fail to notice these opportunities or think about taking them to another level. It’s all part of the fun and being a small business entrepreneur.

Some times the simplest small business ideas turn out to be the best, so my advice is don’t ever give up on a dream or on a small business idea that you may have.

Why not send me your story for me to share in the comment box below

Kind Regards
ROY DERRICK

Tags: ideas for starting a small business, small business ideas, small business start up, ways to start a small business
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5 Tips On How To Get Funding For A Small Business

Tuesday, July 3rd, 2012

More than 500,000 people in the U.K alone Start a Business every year.

World wide the amount of people starting a business runs into the millions and is growing by the day. Everyone has a different reason for wanting to start their own business including:

Being a natural entrepreneur who has a product or idea to sell to the masses
An individual wanting to become their own boss
Someone wanting to have more flexibility
Someone being forced to start a business due to becoming unemployed.

However, regardless of what type of business they start, most people will need to get funding to get their small business off the ground. Knowing where to get money from to start your small business can often be the hardest part.

Below are 5 tips on the best ways to get small business funding:

1. Have A Good Business Plan

One of the most important things to have in place before applying for finance is a strong business plan. A good business plan should be no longer than 10 pages of A4 and should include:

The product or services that you are going to provide
The cost to make or buy that product
The operational costs including rent, staff, fuel, vehicles, stationary, materials, legal fees advertising etc.
The location of the business
Who your targeted customers are going to be.

Most lenders say that when reading a business plan they are looking for good cash flow management, a strong balance sheet, a sound business plan and signs that the company is looking to develop and grow.

It is also important to calculate the exact amount of money that you want to borrow before hand as potential lenders do not favour people who ask broadly for some working capital without having worked out the actual sum of money that they require.

Lenders like to be clear about why you want to borrow the money and how you are going to pay it back.

2. Check If There Are Any Strings Attached

When borrowing money from a lender, make sure that you have any legal documentation checked to ensure that is complies with the Financial Services And Markets Act 2000.

Before entering into a financial agreement with any company, it is advisable to make sure that there are no strings attached. It is important to read all the small print and to be clear that you are 100% certain of any conditions that are attached to your loan. For example:

Are you bound by a personal guarantee for the loan?
What will the interest rates be?
How much are the application and transaction fees?
What will the renewal fees for the loan be, in case you will want to extend the loan
Are there any penalty fees?.

3. Be Yourself / Don’t Keep Secrets

When applying for funding for a small business it is important to be yourself. Prospective lenders will be assessing you as a person when they consider whether to lend you money. If you are trying to be something that you are not you will not come across very well. It is important to be confident but not overconfident. Be natural, as you will be ultimately trying to build up a relationship of trust.

It is also important to be open and honest about your financial background, as all potential lenders will check your financial history. Failure to disclose any previous debt will not only result in delaying the process but could also result in you being declined the loan. It is better to be upfront and honest from the beginning.

4. Look For an Investor

If possible try to offer to invest some finance yourself into starting your business, as it will show a commitment on your part too. If however you cannot find the money to invest into your company and you fail to get the required amount from a lender, you could consider asking an investor to Invest into your small business.

Investors who invest money into a small businesses, are often referred to as a “business angel”. Business angels act either independently or as part of a syndicate and have usually been successful business owners themselves. Some will solely lend the money whereas others prefer to take a more active role in the business, often taking a seat on the board. Business angels lend money on the basis that they take part ownership or a share of the business profits.

Business angels can be useful for providing capital for business start ups, offering valuable advice and also for the network of business contacts that they acquired over the years which can prove invaluable when starting your own business.

5. Check Out New Business Grants

Despite the current economic doom and gloom, there has never been a better time to start a small business. In order to encourage individuals to start a small business the government are now offering various small business grants to help get businesses started.

Below are examples of some grants currently available:

Enterprise Finance Guarantee (EFG)
Launched in 2009 and available until 2014-2015 the EFG is a loan guarantee scheme to help create additional bank lending to U.K. based small to medium businesses that are viable and lack security to obtain a commercial loan.
Provided that the business can repay the loan the government offers a guarantee for 75% of the loan. This is available for businesses with an annual turnover of up to £44m that require loans of between £1000 -£1 million and is repayable over a period of between 3 months and 10 years.

Regional Growth Fund (RGF)
This is a government fund amounting to £1.4b that operates across England from 2011-2014. The RGF is to support projects and programmes in areas and communities that are currently dependant on the public sector. Rounds 1 and 2 of bidding have now closed and is it not yet known when round 3 will open for suitable applicants to bid for a share of the remaining funds.

European Regional Development Fund (ERDF)
In England the ERDF is managed by the Department for Communities and Local Government. Around £3.2 bn of funding has been allocated to help various incentives between 2007 to 2013. It is designed to boost regional economies and can be applied for by contacting your regional ERDF programme team.

Export Enterprise Finance Guarantee (ExEFG)
The ExEFG has been designed to provide short term (up to two years) export finance to small to medium businesses that are viable and lack the security to export finance commercially. It is available to businesses with a yearly turnover of up to £25m who are looking for a short term export finance of between £25,001 and £1m. The government will then guarantee lenders 60% of each facility and the borrower will pay a premium.

Regional development Programme for England (RDPE)
The role of the RDPE is to help to develop rural businesses and to build thriving rural communities. There are various grants available under the scheme which is jointly funded by Defra and the European Union and runs from 2007 to 2013. There are also other government grants available for small to medium businesses in Wales and Scotland that are funded by the Welsh and Scottish Assemblies. There are no guarantees to succeeding when starting a small business. Sadly many small businesses fail in the first year. However even if you have the best new business ideas in the world , often the hardest part is knowing how to get funding for a small business.

If you struggle to find the funding yourself, it is worth looking into the options of ‘business angels’ or government grants to help you to get your new small business off the ground.

For more advice and information on starting a new business visit www.perfectprosperity.com

Kind Regards
ROY DERRICK

Tags: Business angel, business angels Starting your own business, find money, Funding a small business, Funding for a small business, How to get funding for a small business, new business grants, new business ideas, Small Business, Small business funding, Small business grants, start a small business, Start your small business, Where to get money from
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The 3 Must Do’s Before You Start A Small Business

Tuesday, May 29th, 2012

How To Get Your New Small Business Off To A Flying Start

So You’ve Got Your Small Business Idea And You Want To Start A Small Business?

What do you need to do to get your small business off to a flying start? Well I’m going to share with you what I believe are the first 3 most important things to consider when starting a small business, especially a bricks and mortar business.

1. Research
You need to know whether your new small business idea is going to succeed and the only way to find out is to carry out some thorough research on the products or service that you are going to be selling.

When I started my first business more than twenty years ago, my original business idea was to open up a pet shop. I wasn’t actually sure whether there would be a demand for that type of shop, so during one of my week’s holidays I actually parked in the main shopping street for 6 hours a day for the whole week and carried out some thorough research which entailed:

Counting the number of people who visited the shops within the high street each day.
Speaking to shoppers to ask whether they felt that there was demand for a pet shop in that area.
Speaking to other shop owners in the locality to ask for any tips that they could give me on the best ways to start a retail business.
Checking what other competitors were doing in order to offer a better service .
Checking whether the area was going to be the right location i.e. making sure that there was a market for what I was selling within a given area. This would then determine for me whether I could achieve the desired profit margins within that location. Location is very important when considering a bricks and mortar business as property leases and the prices that you can charge for your goods or services, are largely governed by location and the overheads you incur.

Needless to say I did not open a pet store but I opened up a chain of convenience food stores instead, based on using the same research techniques.

2. Create a Good Business Plan
You can have the best small business ideas in the world, but you will seldom get them off the ground without financial backing. In order to gain that all important backing you will first of all need to present your potential lender with a business plan.

Do not be out off by this. All too often you will already have the business plan already in your head and will merely need to put in down on paper. Some things that you need to include when writing a business plan are;

The product or service that you are going to provide.
Who your targeted customers are going to be.
The cost to make or buy the product to sell on or how much it’s going to cost you to provide the service that you are going to be offering.
Your operational costs including rent, staff, fuel, vehicles, equipment, stationary, materials, legal fees, advertising etc, etc. You will need to ensure that you list them all.
The location where you are going to be offering your goods or services.

3. Financial Planning
Financial planning for a new small business is not just about how much money people they spend but more about planning the amount of sales that you hope to make each day, the purchases you will need to make, and the income that you expect to make after deducting the overall costs of trading. Many small businesses fail in the first year of trading because of poor cash flow. Below are some suggestions of how to avoid cash flow problems within your first year of trading:

Create a “small business cash flow forecast”. Simply write down all of your expenditure costs for each month for the first year of trading and then add them up. Then write down what you think you will achieve in sales. Deduct one from the other and this will provide you with the targeted amount of sales that you will need to make in order to break even or make a profit.

If you don’t feel confident to create your own cash flow forecast, you could ask an accountant to do it for you. They could also create a profit and loss statement for you at the same time.
It is advisable to have some emergency funds set aside when starting a small business. Every new business needs money to get started, even if is only to buy stock or stationary.
If possible try to allow a sum of money equal to the projected turnover for the first year of business to allow for any cash flow problems.
Get the best deals from your lender. Some banks like Nat West and HSBC now offer free banking for 2 years for all new small businesses. Check out a few banks as they all offer something unique.

Don’t be disheartened if you get a few refusals. Just remain focused and confident in your approach when discussing your business plans with the business advisor.

I can remember when I started my first business, eighteen lenders turned me down. However I didn’t give up and eventually a bank manager situated 90 miles away believed in my passion and drive to start my own business and decided to lend me the money that I needed.

These are what I believe to be the first three most important things to consider when you start a small business. The more preparation you do to begin with, the less mistakes you will make. It can take time but it will be worth it in the long run.

For further advice on starting up your own business feel free to visit our website. I’m sure one way or another we will be able to help you … www.perfectprosperity.com

Kind Regards
ROY DERRICK

Tags: getting started in business, how to start a small business, small business ventures, start a new small business
Posted in Starting A Business | 1 Comment »

Unusual Tips For Starting A Part Time Small Business at Home

Wednesday, March 14th, 2012

Tips For Starting A Part Time Small Business From Home – Whose business is it Anyway ?

Are YOU one of those individuals looking to Start a Small Part Time Business because you feel stuck in a Rut?

Wage increases are virtually non existent whereas the cost of living continues to increase making it so much harder for individuals and families to make ends meet. Working in the public or private sector for someone else is also not as enjoyable as it used to be due to the pressures being imposed on employees to work harder for less.

The reality is that there is a limit as to what you can realistically earn by working for someone else, in other words you have to work over time, extra shifts and weekends making your social life more miserable and limited, whereas running a small part time business means that your hourly income can increase in line with the money and profits that your small part time business makes each and every day.

If you’re an employee /mum/ dad or student by day and looking towards building a business after hours around an existing job then there are people who you should consider keeping in the loop with what you’re doing to help relationships flourish that it turn may well help your new small business take off.

Tell your boss
As long as you’re not doing anything in competition with your day to day job, it is a good idea to let your employer know what you are doing out of hours as a part time small business, but remember that your small part time business must not affect your full time job. Don’t be afraid to tell your employer as they will be likely to see your part time small business as a good thing, because you are showing ambition towards gaining new skills and motivation that may well end up benefiting your employer in one way or another. If you attend out of hour training courses to help you develop new skills for your new small home based business, then again what you learn may also benefit your employer.

Inform your insurance / mortgage company
When starting a small business at home, it is always wise to upgrade your home insurance policy to include business cover and tell your mortgage provider so that should any claims be made in the future there is no excuse for them to refuse to pay out because they were not informed. There is no need to notify your local council as long as your property is to remain as your main residential home and not be completely converted to a full time business premises.

Contact the taxman
Whenever you change jobs, or even start a small part time business you have a duty to inform the taxman of your new activities within three months. Registration is straightforward and the type of form filling depends purely on whether you set yourself up as a sole trader, partnership or limited company. If you are unsure of what benefits you can claim or offset against any tax liabilities it is a good idea to seek advice from a professional accountant. By doing so you will be able to keep your tax bill as low as possible by claiming business including those for working at home.

Share the news with family and friends
Last but not least – shout out loud and spread the news. You may even be surprised how it could help create sales and new business for you. Some may be a little jealous to begin with, but so what….. it’s your life, your future and your dreams that count.

Feel Free to leave your views and comments or contact me should you require any help to start your very own Part Time Small Business From Home.

Kind regards
Roy Derrick

Tags: small business advice, small business start up, small home based business, tips for starting a small part time business
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How To Open A Small Business Without Being Overwhelmed

Wednesday, February 8th, 2012

How To Open A Small Business

There was a time when most people asked banks to learn How To Open A Small Business, but these days this is longer the case.

It is imperative that you know how to open a small business well before you even consider looking for finance or premises. Opening a small business no longer means having to start a bricks and mortar type of business as online Internet based businesses are now over taking bricks and mortar types.

There is something that people often forget when considering how to open a small business that very often plays a major factor in why so many people fail in business. … ‘they become overwhelmed’.

Have you ever felt overwhelmed or stressed out when trying to cope in work or running a business? Well if you have its very common indeed and particularly important to under understand why it happens when considering how to open a small business.

Starting and owning your own small business has incredible rewards but one of the major reasons for failure is the lack of understanding what the effects can have on you personally. There is a huge amount of information available online on how to start a small business but what people forget to consider is the impact such a new opportunity can have on them. It is very common for people to begin to feel overwhelmed and alone. This is perfectly normal and understandable. However, with some pre-planning it can be avoided.

No one has ever become extremely successful without having a mentor, some one who could teach and guide you how to open a small business. Entrepreneurs such as Sir Richard Branson, Sir Alan Sugar, Steve Jobs, Donald Trump all had mentors to help them to get where they are today.

If you ever begin to feel overwhelmed the trick is to take a deep breath…relax… make yourself a cup of coffee and talk to someone about it. Better still, slow down take one step at a time and ask for help! It’s never to late.

I remember a time when I employed 66 staff. The work load didn’t bother me but what was a nightmare was the lack of experience and training I had at that time, in ‘Human Resources’ and ‘Employment Law’.

That all changed when I eventually got help from someone who taught me everything I needed to know. As a result I was able to quickly wash away the terrible overwhelming and stressful feeling that I was experiencing by the issues having so many staff was creating for me. It turned out that it was purely caused through my lack of knowledge, education and understanding of that part of my business.

Feeling overwhelmed and confused is a MAJOR obstacle that MOST people over look when considering how to open a small business. People forget to think ahead and how they will cope with the excitement and the huge learning curve that they are about to experience when their new small business is up and running.

Some feel to embarrassed to ask for help whilst others think they know it all and can do everything alone. WRONG! Remember, that having your own business is a new beginning for you. You are about to learn and attempt to master brand new skills……… you cannot and will not be able to do it all alone…

The advice and support I give people when they ask me how to open a small business or what to do when they join our business, is to ensure that they address all of these important issues before they get started. I know that if we don’t discuss them it will unnecessarily ‘scare them to death’ and prevent them from making the progress they should make. Providing this kind of support to all of ours members is why our business is so successful. We are always there for our members so they never have to feel alone or overwhelmed.

That said no one should claim that ‘opening a new business’ would not cause them some stress or a feeling of being overwhelmed because it is inevitable that it will. In some ways it comes with the territory of discovering how to open a new business. In any case a little stress is good for keeping us on our toes!

Personally I cannot think of anything that I have given up on, because I always think to myself that I am SO CLOSE to achieving what I set out to do…. that giving up now is not really an option.

It makes me realize that the only reason I may fail in what I set out to do is if I give up. Most people never even attempt to look at it in this way… instead they find it easier to blame whatever and whoever they can whereas the real reason they failed it because they failed themselves.

Seriously… you have to think this way if you want to learn how to open a small business and turn it into a highly successful one. Having started and sold quite a few small businesses I have learnt that the best business to start is one that already has an excellent ‘Blue Print’ in place to follow. One that provides all of the necessary tools, resources, training and back up support to make it work. Having a mentor to help and guide you from the very outset is a HUGE MUST and could potentially save you a lot of money and help you make a lot of money.

Always stay focused on what you learn and need to do. Avoid getting distracted. Don’t waste your time. Commit to what you set out to do…

Being overwhelmed simply means you need help…. Ask for help and you will take 10 steps forward rather than 10 steps back.

The secret on how to open a small business is definitely to find a mentor and to implement exactly they teach you to do. No excuses. Stay CONSISTENT at all times, work with your mentor and your business will flourish from the beginning.

If you would like to know how to open a small business or how to start a home based business and become part of our exciting opportunity, then you’re very welcome to APPLY BY CLICKING HERE….

Tags: how to open a small business, opening a small business, opening your own small business, starting up a small business, starting your own small business, ways to open a small business
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Online Businesses Are Booming !

Friday, January 6th, 2012

Including Online Home Businesses

So Why Are Online Businesses Booming Despite The Global Recession?

Without doubt the internet has changed the way that we live our lives and continues to grwo at record speed. More businesses are branching out and setting up online business divisions in the same way individuals are turning to their home computers to make money from the internet.

This has become particularly apparent when you look at the most recent published sales figures that show for many retailers there has been a slump in high street bricks and mortar shop sales but a huge growth with online shopping sales, clearly proving that the internet is now the preferred method of shopping for many people. Sadly this has resulted in the closure of many high street stores, especially electrical retailers, as they battle stiff competition from online retailers.

During the past ten years the growth of the internet has resulted in many individual success stories and has also strengthened sales for many established home based businesses as they also use websites to generate extra revenue. Experts predict that by 2020 90% of transactions will take place online or will be influenced by the internet.

With this in mind there has never been a better time to start an internet online business. Statistics show that the demand and audience is huge so what better way to capitalise on this demand than by starting an online business.

Starting an Internet businesses involve less risk, costs and effort and can more or less be started straight away. To create a successful home based online business you will need to take the following into consideration:

Look For A Product That Doesn’t Have A Market Leader
If you want to become a successful online entrepreneur you will need to find a niche that is quite unique without massive competition. One such example was a lady who found a gap in the market for providing baby products and accessories in your own home. She thought of the idea after having a baby of her own. She has now formed a very successful business providing this service.

Having a passion for what you are selling is also crucial to your success. This was the case for twelve year old Louis Barnett who created a successful confectionary company selling chocolates to top retailers. He left school with severe dyslexia and dyspraxia but his desire to be able to spell the word chocolate inspired him to set up his own company selling chocolate. He scored the highest score ever for his pitch with one retailer which even at twelve years old was full of passion fuelled by his belief in his product.

Write Up A Good Business Plan To Get Funding For Your Business
Presenting a good business plan will help you to get the necessary funds to start your on line business. Make sure that you ask for adequate funds at the beginning to ensure the success of your business. Asking for too little funds is a mistake often made but will only result in your business struggling in the short term.

Register Your Company
If you anticipate that your sales will exceed the current threshold of Vat (tax) you will need to register your company for VAT depending on which county you live in. Online traders also need to ensure that they comply with data protection legislation when storing information on customers.

Create A Good Website
With any internet business it is crucial to create a powerful website to attract customers to your business. Your website acts as a shop window for your business and will determine how successful your business will become. Whilst it is cheaper to create and set up your own website, it is more professional if financially possible, to outsource this task as it can be the difference between making sales or not.

You will need to ensure that your website is appealing as people will buy if they like what they see. Make sure that the website is easy to navigate especially on the ordering page as people will tend to leave if the sales process is too difficult. Test your website with potential customers, friends and family before launching your website to make sure that it has the necessary appeal.

Marketing Your Business
For any online business, marketing is vital to its success. Effective marketing will ensure that people are drawn to your website over your competitors. There are several ways in which you can market your online business. You can advertise organically by writing articles or blogs or you can pay for advertising using Google Ad words or by paying for SEO (search engine optimisation). The type of advertising you choose will be largely governed by the type of online business that you have and by the marketing budget that you have available. Offline advertising such as direct mail can also be very effective in promoting your online business and increasing sales.

Don’t Give Up Your Day Job
Don’t make the mistake of giving up your day job too soon. Most online businesses only require you to work part time from home to begin with allowing you to work around your current employment and still enjoying the security of earning income while your business gets off the ground. All in all your internet business will thrive provided that you offer people what they want to buy at a price that they can afford and that you make them aware that you have what they need.

With the ever growing popularity of the internet there has never been a better time to start an internet business. There are many online business ideas, all you need to do is carry out some research to find the best online business for you.

If you’re considering taking advantage of the what the internet can offer then we highly recommend applying to become a member of one of the most unique and fastest growing global home business opportunities currently available. Here you will learn everything you need to know and have the opportunity to create a substantial and regular income.

Good Luck. APPLY HERE

Tags: best online business, home online business, increasing sales, internet business, internet businesses, internet online business, making sales, online businesses, online marketing, online shopping sales, starting an online business, working from home part time
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